08-4164 Board of Regents of the University of Wisconsin System v. Phoenix International Software, Inc.

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Constitutional Law
Sovereign immunity

By filing a lawsuit under the trademark laws, a state waives its sovereign immunity from counterclaims by the defendant.

“[O]ur first opinion concluded unanimously that Phoenix was entitled to a trial on its confusion-in- trade allegation. The question whether Wisconsin was entitled to immunity, however, proved more difficult to resolve, and we thank the parties for their patience and their additional attention to this important issue. We now hold that the Supreme Court’s decision in Lapides v. Board of Regents of the University System of Georgia, 535 U.S. 613 (2002), requires us to find that Wisconsin waived its sovereign immunity when it filed suit in the federal district court seeking to overturn the decision of the TTAB. To maximize its chances of reversing the agency’s decision, the state availed itself of the advantages of a fresh lawsuit, choosing that path over a number of others available. It would be anomalous if, after invoking federal jurisdiction, the state could declare that the federal court has no authority to consider related aspects of the case. Cf. Lapides, 535 U.S. at 619. Phoenix’s counterclaims are compulsory in nature and thus lie well within the scope of Wisconsin’s waiver of immunity. Accordingly, we reverse the district court’s grant of summary judgment, reinstate Phoenix’s federal counterclaims, and remand for further proceedings.”

Reversed and Remanded.

08-4164 Board of Regents of the University of Wisconsin System v. Phoenix International Software, Inc.

Appeal from the United States District Court for the Western District of Wisconsin, Crabb, J., Wood, J.

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