527 U.S. 627, 647 (1999)
In 1987, College Savings Bank, a New Jersey chartered savings bank located in Princeton, New Jersey, began marketing and selling certificates of deposit known as the CollegeSure CD, which are annuity contracts designed to finance future college expenses.1 College Savings obtained a patent for its financing methodology that guarantees investors sufficient funds to cover college tuition costs.2 Petitioner Florida Prepaid Postsecondary Education Expense Board is an entity created by the State of Florida that administers similar tuition prepayment contracts available to Florida residents and their children under Florida Statutes section 240.551.3 College Savings claims that in administering its program, Florida Prepaid directly and indirectly infringed the patent.4
College Savings filed an infringement action under 35 U.S.C. § 271(a) against Florida Prepaid in the United States District Court for the District of New Jersey in November 1994.5 By that time, Congress had enacted the Patent and Plant Variety Protection Remedy Clarification Act in 1992, which amended the patent laws to include states within the definition of "whoever" and expressly provided that states shall not be immune from suit in federal court for patent infringement.6 College Savings sought declaratory and injunctive relief, damages, attorney's fees, and costs, alleging willful infringement as well as contributory and induced infringement.7
After the Supreme Court's decision in Seminole Tribe of Florida v. Florida in 1996, Florida Prepaid moved to dismiss the action on sovereign immunity grounds, arguing that the Patent Remedy Act was an unconstitutional attempt to abrogate state immunity using Article I powers.8 College Savings responded that Congress had acted pursuant to section 5 of the Fourteenth Amendment to enforce due process protections.9 The United States intervened to defend the statute's constitutionality.10 The District Court denied the motion to dismiss in 1996.11
The Federal Circuit affirmed the District Court's denial in 1998, holding that Congress had clearly intended to abrogate immunity and had the power to do so under section 5.12 The court identified only eight patent infringement suits against states between 1880 and 1990 in reaching its decision.13 The Supreme Court granted certiorari in 1999 to review the case.14
Whether Congress validly abrogated the States' sovereign immunity from patent infringement suits pursuant to its authority under section 5 of the Fourteenth Amendment when it enacted the Patent Remedy Act?15
To invoke its power under section 5 of the Fourteenth Amendment, Congress must identify conduct transgressing the Fourteenth Amendment's substantive provisions and must tailor its legislative scheme to remedying or preventing such conduct. There must be a congruence and proportionality between the injury to be prevented or remedied and the means adopted to that end.16
No. In 1987, College Savings Bank, a New Jersey chartered savings bank located in Princeton, New Jersey, began marketing and selling certificates of deposit known as the CollegeSure CD, which are annuity contracts designed to finance future college expenses. Congress identified no pattern of patent infringement by the States, let alone a pattern of constitutional violations.17 The legislative record at best offers scant support for Congress' conclusion that States were depriving patent owners of property without due process of law by pleading sovereign immunity in federal-court patent actions.18 The provisions of the Patent Remedy Act are so out of proportion to a supposed remedial or preventive object that they cannot be understood as responsive to, or designed to prevent, unconstitutional behavior.19
The Patent Remedy Act cannot be sustained as legislation enacted to enforce the guarantees of the Fourteenth Amendment's Due Process Clause.20
Related opinions on this issue
Joined by Souter, Ginsburg, And Breyer, Jj.
Justice Stevens dissented on the ground that the Patent Remedy Act was an appropriate exercise of Congress' power under section 5 of the Fourteenth Amendment to prevent state deprivations of property without due process of law.21 He stressed the Constitution's grant of plenary authority over patents to Congress and the strong federal interest in uniform interpretation of patent law through exclusive federal jurisdiction.22 Stevens pointed out that Congress heard testimony about inadequate state remedies, including the Chew case, and evidence that state infringement was likely to increase as states became more involved in commercial activities and obtained patents.23
He maintained that the Act showed precise congruence between its narrow means of abrogating immunity in patent cases and the end of ensuring due process for patentees, unlike the overbroad statute invalidated in City of Boerne.24 Stevens concluded that the legislation was a paradigm of appropriate section 5 power because it merely placed states in the same position as private parties without altering substantive state law.25