Florida Prepaid Postsecondary Education Expense Board v. College Savings Bank And United States

527 U.S. 627 (1999)

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Nature of the Case

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Facts

In 1992, Congress amended the patent laws and expressly abrogated the States' sovereign immunity from claims of patent infringement. College Savings obtained a patent for its financing methodology, designed to guarantee investors sufficient funds to cover the costs of tuition for colleges. Petitioner Florida Prepaid Postsecondary Education Expenses Board (Florida Prepaid) is an entity created by the State of Florida that administers similar tuition prepayment contracts available to Florida residents and their children. College Savings claims that, in the course of administering its tuition prepayment program, Florida Prepaid, directly and indirectly, infringed College Savings' patent. Respondent College Savings then sued the State of Florida for patent infringement. Florida Prepaid moved to dismiss the action on the grounds of sovereign immunity after the Seminole Tribe case was decided, Florida Prepaid argued that the Patent Remedy Act was an unconstitutional attempt by Congress to use its Article I powers to abrogate state sovereign immunity. College Savings responded that Congress had properly exercised its power pursuant to § 5 of the Fourteenth Amendment to enforce the guarantees of the Due Process Clause in § 1 of the Amendment. The United States intervened to defend the constitutionality of the statute. Agreeing with College Savings, the District Court denied Florida Prepaid's motion to dismiss and the Federal Circuit affirmed. The Federal Circuit held that Congress had clearly expressed its intent to abrogate the States' immunity from suit in federal court for patent infringement and that Congress had the power under § 5 of the Fourteenth Amendment to do so. The court reasoned that patents are property subject to the protections of the Due Process Clause and that Congress' objective in enacting the Patent Remedy Act was permissible because it sought to prevent States from depriving patent owners of this property without due process. The Supreme Court granted certiorari.