BOARD OF REGENTS OF THE UNIVERSITY OF TEXAS SYSTEM, TISSUEGEN, INC., Plaintiffs-Appellants
BOSTON SCIENTIFIC CORPORATION, Defendant-Appellee
from the United States District Court for the Western
District of Texas in No. 1:17-cv-01103-LY, Judge Lee Yeakel.
Michael W. Shore, Shore Chan DePumpo LLP, Dallas, TX, argued
for plaintiffs-appellants. Also represented by Alfonso Chan,
Chijioke E. Offor; Andrew M. Howard, Howard & Spaniol,
PLLC, Dallas, TX; Russell J. DePalma, Russell J. DePalma
PLLC, Irving, TX.
Nilsson, Arnold & Porter Kaye Scholer LLP, Washington,
DC, argued for defendant-appellee. Also represented by
Matthew Wolf, Andrew Tutt.
Prost, Chief Judge, Reyna and Stoll, Circuit Judges.
Board of Regents of the University of Texas System (UT) and
TissueGen Inc. sued Boston Scientific Corporation (BSC) for
patent infringement in the Western District of Texas. The
district court determined that venue was improper and
transferred the case to the District of Delaware. UT, acting
as an arm of the State of Texas, appeals the district
court's transfer order on several grounds relating to its
rights as a sovereign entity.
that, as a threshold matter, we have jurisdiction to hear
this appeal under the collateral order doctrine. On the
merits, we conclude that the state sovereignty principles
asserted by UT do not grant it the right to bring suit in an
otherwise improper venue. We affirm.
Board of Regents is the governing body for the University of
Texas System, which includes eight universities and six
health institutions. The Board's nine regents are
appointed by the Governor of Texas and confirmed by the Texas
Senate, and its authority to govern the University of Texas
System is delegated to it by the Texas Legislature. It is
undisputed that UT is an arm of the State of Texas.
the assignee and exclusive owner of patents resulting from
research conducted at the University of Texas System. Its
portfolio includes U.S. Patent Nos. 6, 596, 296 and 7, 033,
603 (the "patents-in-suit"), which are directed to
implantable drug-releasing biodegradable fibers. Dr. Kevin
Nelson, co-inventor of the patents-in-suit, developed the
claimed technology at the University of Texas at Arlington
and founded TissueGen Inc. as a vehicle for commercializing
his inventions. UT exclusively licensed the patents-in-suit
to TissueGen, which then commercialized its
ELUTE® fiber product. According to UT,
ELUTE® fiber is intended to replace standard
fibers in medical devices like implantable stents, and it is
capable of delivering therapeutic agents directly to the site
November 2017, UT and TissueGen sued BSC for patent
infringement in the Western District of Texas. See
Compl., Bd. of Regents, the Univ. of Tex. Sys. v. Boston
Sci. Corp., No. 1:17-cv-1103 (W.D. Tex. Nov. 20, 2017),
ECF No. 1. UT alleged that several BSC stent products
infringed the patents-in-suit. In its complaint, UT conceded
that BSC is a Delaware corporation with a principal place of
business in Massachusetts. It asserted that "[v]enue is
proper in the Western District of Texas because UT has
sovereign immunity and this Court has personal jurisdiction
over [BSC]." Id. ¶ 7. Relying on state
sovereignty as its hook for venue, UT explained:
Venue is proper in the Western District of Texas because UT
is an arm of the State of Texas, has the same sovereign
immunity as the State of Texas, it would offend the dignity
of the State to require it to pursue persons who have harmed
the State outside the territory of Texas, and the State of
Texas cannot be compelled to respond to any counterclaims,
whether compulsory or not, outside its territory due to the
Id. ¶ 10. UT further emphasized that it did not
waive its sovereign immunity and did not "consent to
any suit or proceeding filed separate from this action."
Id. ¶ 2.
filed a motion to dismiss under Federal Rule of Civil
Procedure 12(b)(3) for improper venue. It requested that the
case be dismissed or, in the alternative, transferred to the
District of Delaware. BSC noted that it does not own or lease
any property or maintain a business address in the Western
District of Texas. BSC disclosed that it has approximately
forty-six employees in the Western District of Texas, all of
whom maintain home offices and do not work in spaces that are
owned, leased, or controlled by BSC.
district court granted BSC's motion and transferred the
case to the District of Delaware. See Bd. of Regents, the
Univ. of Tex. Sys. v. Boston Sci. Corp., No.
1:17-cv-1103 (W.D. Tex. Mar. 12, 2018), ECF No. 27
("Order"). It explained that "28
U.S.C. § 1400(b) is the 'sole and exclusive
provision controlling venue in patent infringement actions,
'" and that venue is proper under this section where
a defendant resides or has a regular and established place of
business. Id. at 2 (quoting TC Heartland LLC v.
Kraft Foods Grp. Brands LLC, 137 S.Ct. 1514, 1519
(2017)). Applying this court's decision in In re Cray
Inc., 871 F.3d 1355 (Fed. Cir. 2017), the district court
found that BSC "does not maintain a 'regular and
established place of business' in the Western District of
Texas." Id. It rejected UT's sovereign
immunity arguments, explaining that "[s]overeign
immunity is a shield; it is not meant to be used as a sword .
. . There is no claim or counterclaim against The Board of
Regents that places it in the position of a defendant."
Id. at 3 (citing Regents of the Univ. of Cal. v.
Eli Lilly & Co., 119 F.3d 1559, 1565 (Fed. Cir.
1997)). The district court held that venue was improper under
§ 1400(b), as there was no dispute that BSC, a Delaware
corporation, does not reside in the district. Accordingly, it
transferred the case to the District of Delaware pursuant to
28 U.S.C. § 1406. Id. at 3-4. UT appeals the
district court's transfer order.
first address whether we have appellate jurisdiction over
UT's appeal. Transfer orders are interlocutory and
generally cannot be appealed immediately. We conclude,
however, that we have jurisdiction here. Because UT
challenges the district court's transfer order based on
state sovereignty, we hold that this case falls within the
small class of orders excepted from the final judgment rule
by the collateral order doctrine.
1295(a)(1) of Title 28 grants this court jurisdiction over
any "appeal from a final decision of a district court of
the United States . . . in any civil action arising under . .
. any Act of Congress relating to patents." Under the
final judgment rule, a party may not appeal "until there
has been a decision by the district court that ends the
litigation on the merits and leaves nothing for the court to
do but execute the judgment." Robert Bosch, LLC v.
Pylon Mfg. Corp., 719 F.3d 1305, 1308 (Fed. Cir. 2013)
(en banc) (quoting Firestone Tire & Rubber Co. v.
Risjord, 449 U.S. 368, 373 (1981)). "Appeal is
thereby precluded 'from any decision which is tentative,
informal or incomplete,' as well as from any 'fully
consummated decisions, where they are but steps towards final
judgment in which they will merge.'" Puerto Rico
Aqueduct & Sewer Auth. v. Metcalf & Eddy, Inc.,
506 U.S. 139, 142 (1993) (quoting Cohen v. Beneficial
Indus. Loan Corp., 337 U.S. 541, 546 (1949)). A transfer
order is not a final judgment. It "is interlocutory and
thus not immediately appealable, but appealable only incident
to a final judgment in a case (or a partial judgment pursuant
to Fed.R.Civ.P. 54(b)) or as a certified question pursuant to
28 U.S.C. § 1292(b)." FDIC v. Maco Bancorp,
Inc., 125 F.3d 1446, 1447 (Fed. Cir. 1997).
collateral order doctrine provides a "narrow
exception" to the final judgment rule. Amgen Inc. v.
Hospira, Inc., 866 F.3d 1355, 1358-59 (Fed. Cir. 2017).
An order that is not final will be immediately appealable
under this doctrine if it "fall[s] in that small class
which finally deter-mine[s] claims of right separable from,
and collateral to, rights asserted in the action, too
important to be denied review and too independent of the
cause itself to require that appellate consideration be
deferred until the whole case is adjudicated."
Puerto Rico, 506 U.S. at 143 (quoting
Cohen, 337 U.S. at 546). "To come within the
'small class' of . . . [collateral order doctrine
decisions], the order must conclusively determine the
disputed question,  resolve an important issue completely
separate from the merits of the action, and  be
effectively unreviewable on appeal from a final
judgment." Id. at 144-45 (quoting Coopers
& Lybrand v. Livesay, 437 U.S. 463, 468 (1978));
see also Cohen, 337 U.S. at 546.
Supreme Court has held that States and State entities may
invoke the collateral order doctrine to immediately appeal an
order denying a claim of sovereign immunity. In Puerto
Rico, the Puerto Rico Aqueduct and Sewer Authority
(PRASA)-an arm of the Puerto Rican government-sought to
upgrade Puerto Rico's waste treatment plants and
contracted with Metcalf & Eddy Inc. to assist with the
task. 506 U.S. at 141. PRASA withheld payments on the
contract due to alleged overcharging by Metcalf, and Metcalf
sued PRASA in the District of Puerto Rico for breach of
contract in response. Id. PRASA then moved to
dismiss the case on grounds that sovereign immunity under the
Eleventh Amendment prohibited the suit. Id. The
district court denied the motion, PRASA appealed, and the
First Circuit dismissed the appeal for lack of jurisdiction.
Id. at 141-42. The First Circuit explained that its
precedent barred States from taking an immediate appeal on a
claim of sovereign immunity. Id. at 142.
Supreme Court reversed. It determined that decisions denying
claims of sovereign immunity by a State or its arms fall
within the "small class" of decisions covered by
the collateral order doctrine. Id. at 144-45. The
Court explained that such decisions satisfy the three
elements of the doctrine as set forth in Cohen and
Coopers & Lybrand. Id. It emphasized
that the Eleventh Amendment confers on States the privilege
not to be sued, and that decisions denying sovereign immunity
"purport to be conclusive determinations that [States]
have no right not to be sued in federal court."
Id. at 145. The Court noted that resolving the issue
of sovereign immunity "generally will have no bearing on
the merits of the underlying action," and that the value
of sovereign immunity to a State "is for the most part
lost once litigation proceeds past motion practice."
Id. Accordingly, the Court held that "States
and state entities that claim to be 'arms of the
State' may take advantage of the collateral order
doctrine to appeal a district court order denying a claim of
Eleventh Amendment immunity." Id. at 147;
see also Univ. of Minn. v. LSI Corp., 926 F.3d 1327,
1331 n.2 (Fed. Cir. 2019) ("It is well-established that
decisions denying sovereign immunity are appealable as
collateral orders, and the 'ultimate justification is the
importance of ensuring that the States' dignitary
interests can be fully vindicated.'" (quoting
Puerto Rico, 506 U.S. at 146-47)).
UT challenges the district court's transfer order on
several grounds. It argues that the U.S. Constitution's
Original Jurisdiction Clause ensures that a State cannot be
forced to sue in a court located in another State.
See Appellant's Br. 11-17. UT also argues that
the Eleventh Amendment confirms that a State is entitled to
control where it litigates against a private party. See
id. at 18-21. Finally, it asserts that it did not
consent to jurisdiction or waive its sovereignty rights in
Delaware, and that the patent venue statute does not abrogate
those rights. See id. at 26-36. UT generally invokes
its rights as a state sovereign to challenge the district
court's transfer order-an order denying the application
of the Eleventh Amendment. See Order at 3. We thus
hold that, based on the Supreme Court's reasoning and
analysis in Puerto Rico, the collateral order
doctrine likewise applies here.
Puerto Rico, the district court's order
satisfies all three elements of the collateral order
doctrine. See 506 U.S. at 144-45. The first element
is met because the order "conclusively
determine[d]" that State sovereignty principles do not
apply. Id. at 144. There is nothing "tentative,
informal or incomplete" about the transfer order
regarding this issue. Cohen, 337 U.S. at 546. As
soon as the case proceeds in Delaware, UT is subject to suit
there, and the issue of whether state sovereignty principles
apply is conclusively determined in the negative. Contrary to
BSC's argument, UT cannot simply "raise its
sovereignty arguments in a 'different room, '"
because UT's asserted right to not litigate in ...