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At first glance it seemed only fair when, in 1999, Genentech had to pay the University of California $200 million because a former university employee had carried trade secrets to his new job at the biotechnology giant. But for Massachusetts inventor Marc Andelman, the decision set off fireworks. Andelman claims the same university infringed on one of his patents, but he can’t do anything about it. Why? Because as a state entity, the university has a get-out-of-court-free card called sovereign immunity.

State sovereign immunity, guaranteed in the Eleventh Amendment and expanded by Supreme Court decisions, protects states from lawsuits by citizens. For intellectual property this immunity means that while a state or state agency can sue you for damages from a patent infringement, you can’t sue them in federal court for the same transgression-unless they agree to be sued.

Take Andelman’s story: Working at a makeshift lab in his basement, he spent 11 years developing a new method for water purification  (see “Nanofresh Water,” TR Jan/Feb 2000), using charged material to remove contaminants from dirty water. He dubbed it the Flow-Through Capacitor and filed a handful of patents in 1991.

A few years later, Andelman read about a suspiciously similar technology touted by scientists at the Department of Energy’s Lawrence Livermore National Laboratory in Berkeley, CA. He contacted the lab to discuss some sort of collaboration or, at the very least, proper patent attribution. But Livermore wasn’t interested in talking, and it didn’t flinch when Andelman hired a lawyer. By contracting with the regents of the University of California, Livermore and its employees also get sovereign immunity. Andelman can’t even get his case heard.

“Livermore is ripping off inventors like me, and nobody can do anything about it,” says Andelman. “My lawyer said we could sue until kingdom come, but nothing would come of it.”

“If Marc was David [and Livermore Goliath], where would he throw the rock?” asks Bill Warren, program manager at the Defense Advanced Research Project Agency. Two years ago, Warren’s office gave Andelman a research grant after Defense Department patent attorneys identified him as the country’s leading expert in the technology. While DARPA may have given him his due, Andelman says the regents’ snub and alleged infringement has cost him investors delayed development.

A 1999 report by the Committee on Science of the U.S. House of Representatives expressed concern that state-run government labs were bullying entrepreneurs. Inventors and small businesses working on technologies as varied as explosives, wireless communications, and DNA probes came forward with grievances against Department of Energy labs. As a federal agency, the DOE can be sued, but when its labs contract with state universities they are protected by state immunity.

Now, Senator Patrick Leahy (D-VT) has a bill he thinks can square the situation, and he’s pushing to get it past the Senate Judiciary Committee and onto the Senate floor for a vote. The goal of the Intellectual Property Protection Restoration Act of 2001 is straightforward: end state insulation from infringement suits. According to Leahy’s spokespeople, the bill “creates reasonable incentives for States to waive their immunity in intellectual property cases, but it does not oblige them to do so.” States have two years to waive their immunity. If by that time they still decline to do so, “like private parties that sue states for infringement, states that sue private parties for infringement could not recover any money damages.”

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