Patently wrong: A critical analysis of Florida Prepaid Postsecondary Education Expense Board V. College Savings Bank

St. John's Law Review, Summer 2000 by Melman, Daniel J

"Constitutions are intended to preserve practical and substantial rights, not to maintain theories."1

-OLIVER WENDELL HOLMES, JR.

INTRODUCTION

Public policy and fairness mandate that the states should not be immune from federal court suits arising under the patent laws. Whether the federal Constitution authorizes Congress to abrogate state immunity in patent actions, however, is a more complex issue.

In Florida Prepaid Postsecondary Education Expense Board v. College Savings Bank2 the United States Supreme Court invalidated the Patent and Plant Variety Protection Remedy Clarification Act, which purported to make the states amenable to patent infringement suits in federal courts, and in doing so, held that the State of Florida could not be sued for infringement of a New Jersey bank's patent. In this Comment, the Supreme Court's Florida Prepaid decision will be subject to critical analysis. The breadth of the Supreme Court's state sovereign immunity doctrine3 undermines the objectives of the United States patent laws because it diminishes patent owners' exclusive rights to their inventions.

In order to understand the inconsistency between the patent laws and the doctrine of state sovereign immunity, it is necessary to briefly examine the fundamental principles of patent law, as well as the Supreme Court's Eleventh Amendment-state sovereign immunity jurisprudence.

1. PATENT LAW

Patent law protects new, unobvious, and useful inventions such as machines, devices, chemical compositions, and manufacturing processes.4 The grant of a patent confers upon the patentee the right to exclude others from making, using, or selling in the United States, the product or process covered by the patent.5 A patentee's exclusive rights last for twenty years from the date on which the patent application was filed.6

Significant public policy issues underlie patent law. It is clear that humans rarely produce significant mental creations without great time, effort, and expense. Patent law, by granting exclusive market rights, provides the incentive for people to undertake and produce significant inventions. The Supreme Court has declared that the objectives of the federal patent laws are to (1) seek the stimulation of further innovation; (2) promote the disclosure of inventions to stimulate further innovation and to permit the public to practice the invention once the patent expires; and (3) impose stringent requirements for patentability to assure that ideas in the public domain remain there for the free use of the public.7 Another important policy issue underlying patent law is a general aversion to monopolies over inventions and a preference for competition.8 The Constitution embodies these opposing policy issues.9 By allowing Congress to secure exclusive rights to an invention, the Constitution induces the undertaking of mental creations. By requiring that these exclusive rights be granted for "limited times,"10 however, the Constitution strikes a balance between incentive and competition, as well as between property and monopoly.

Under the patent laws, a patent application must fully describe the invention.ll The specifications and drawings filed with a patent application are printed and distributed as part of the issued patent.12 Therefore, one of the primary objectives of the patent system is that inventions be fully disclosed for the benefit of the public.13 At the expiration of the patentee's "limited" period of exclusivity, the public is free to utilize and improve upon the invention in any way it wishes.14 Thus, the patent system achieves Congress's mandate of promoting the progress of the useful arts.

The federal district courts have exclusive subject matter jurisdiction over patent disputes.15 Federal courts are authorized to enjoin unauthorized activity16 or award "damages adequate to compensate for the infringement."17 Furthermore, a court has the authority to "increase the damages up to three times the amount found or assessed."18 Lastly, in "exceptional cases," a court may award attorney fees to the prevailing party. 19

II. THE ELEVENTH AMENDMENT

The Eleventh Amendment was passed in response to the Supreme Court's decision in Chisholm v. Georgia.20 In Chisholm, the Court held that states were subject to the Supreme Court's original jurisdiction over suits between a state and citizens of another state.21 The states responded to the Court's shocking22 decision by ratifying the Eleventh Amendment in 1798.23 The Eleventh Amendment has been interpreted in numerous Supreme Court decisions over the last century.24 Early cases initially expanded the reach of the amendment,25 and more recent cases have restricted the states' Eleventh Amendment immunity to federal legislation.26 The Supreme Court, however, has often failed to reach a consensus on its interpretation of the amendment.27 Some justices have advocated a literal reading of the Eleventh Amendment,28 while other justices have supported the more expansive interpretation set forth in Hans v. Louisiana.29