No Tribal Sovereign Immunity in IPR

IPR patent PTAB sovereign immunity

On February 23, 2018, the Patent Trial and Appeal Board of the U.S. Patent and Trademark Office issued a decision denying the St. Regis Mohawk Tribe’s various motions to terminate several inter partes review proceedings based on the theory of tribal sovereign immunity.  The consolidated case was Mylan Pharmaceuticals Inc., et al. v. Saint Regis Mohawk Tribe.[1]

To recap, Mylan, along with Teva Pharmaceuticals and Akorn Inc., the petitioners, filed several IPRs against then-owner Allergan, Inc. to invalidate several patents related to Allergan’s dry-eye drug, Restasis®.  Just before the oral hearing, Allergan assigned ownership of the challenged patents to the Saint Regis tribe.  In doing so, Allergan believed it could escape liability by transferring the patent assets to a Native-American tribe who could assert tribal sovereign immunity to prevent invalidation of its RESTASIS® patents.  It was certainly a new procedural tactic that even the PTAB board noted was one of “first impression.”  Very early in the decision, the panel wrote:

Upon consideration of the record, and for the reasons discussed below, we determine the Tribe has not established that the doctrine of trial sovereign immunity should be applied to these proceedings.  Furthermore, we determine that these proceedings can continue even without the Tribe’s participation in view of Allergan’s retained ownership interests in the challenged patents.[2]

The legal doctrine of sovereign immunity is an old English common law-derived doctrine that is premised on the idea that the Crown (and, hence, the government) cannot commit wrongs, and therefore, could not be prosecuted in any court.[3]  Tribal sovereign immunity is an off-shoot of this concept and is premised on the special relationship between the federal government and Native American tribes throughout history, combined with Supreme Court rulings and tribal self-governance principles.[4]  As such, actions against Native American tribes are barred by sovereign immunity absent a clear waiver by the tribe or congressional abrogation.[5]

Noting that this case was one of first impression, the PTAB panel determined that “there was no controlling precedent or statutory basis for application of tribal immunity in an inter partes review proceeding.”[6]  However, the panel observed that Supreme Court decisions have held that Native American tribes’ immunity is not co-extensive with that of the states, which has not been usually followed by lower courts.[7]  Further, PTAB precedent instructed “against application of non-statutory defenses in inter partes review proceedings.”[8]  Against this backdrop, the PTAB panel determined that tribal sovereign immunity did not apply to PTAB proceedings.  This was because Native American tribal sovereignty is based on Congressional act.[9]  While Congressional action mandated a patent statute to be subject to the conditions and requirements of the Patent Act pursuant to 35 U.S.C. §101, §261, and §§311-319.  In other words, Congress authorized statutory authority to the USPTO to grant patents and consider patentability of patent claims through the IPR system.[10]  In doing so, determining whether tribal sovereign immunity defenses prohibit or apply to inter partes proceedings falls outside the regular scope of the Patent Act.

The panel distinguished state sovereign immunity because the petitioners in the state sovereign immunity proceedings were state universities acting as an extension of the state; tribal sovereign immunity extends to Native American tribes only, and by definition, do not act on behalf of the state.[11]

The panel further enunciated that “[c]ourts have recognized only limited exceptions when a generally applicable federal statute should not apply to tribes:”

A federal statute of general applicability that is silent on the issue of applicability to Indian tribes will not apply to them if: (1) the law touches ‘exclusive rights of self-governance in purely intramural matters’; (20 the application of the law to the tribe would ‘abrogate rights guaranteed by Indian treaties’; or (30 there is proof ‘by legislative history or some other means that Congress intended [the law] not to apply to Indians on their reservations.[12]

The PTAB panel further noted because the doctrine of tribal immunity is common law immunity from a lawsuit traditionally enjoyed b sovereign nations, “[a]n inter partes review proceeding is not the type of ‘suit’ to which an Indian tribe would traditionally enjoy immunity under the common law.”[13]  Additionally, the panel noted a nuance in patent administrative suits, in that PTAB exercises in rem jurisdiction – that is, jurisdiction over a thing, namely, a patent – as opposed to in personam jurisdiction – namely, jurisdiction over a person, which is the basis for tribal sovereign immunity statutes and cases.[14]

As a result, the St. Regis Mohawk Tribe’s motion to dismiss has been denied, and the IPR proceeding will continue, with Allergan allowed to be present as an interested co-patent owner.

While the cases are different, this case and the recent Ericsson[15] case dealing with state sovereign immunity in PGR proceedings, are consistent in the fact the PTAB will not terminate, once instituted, any type of post-grant proceeding unless compelled to do so by the courts or Congress.  The takeaway is that the Patent Act is fairly broad, but there are only a limited number of assertions and defenses that can be made in a patent administrative proceeding, and tribal sovereign immunity is not one of them.  All of this, however, is not good news for Allergan, coming on the heels of its recent invalidation of the four RESTASIS® patents by the Eastern District of Texas,[16] and coupled with this ruling from the PTAB, it remains what Allergan’s next move will be.  Appeals to the Federal Circuit on both seem certain.

[1] Case Nos. IPR2016-01127 (Patent No. 8,685,930); IPR2016-01128 (8,629,111); IPR2016-01129 (8,642,556); IPR2016-01130 (8,633,162); IPR2016-01131 (8,648,048); IPR2016-01132 (9,248,191); IPR2017-00576; IPR2017-00594, IPR2017-00578, IPR2017-00596, IPR2017-00579; IPR2017-00598; IPR2017-00586; and IPR2017-00601.  All of these proceedings have been consolidated into IPR2016-01127.

[2] Mylan, supra (slip op. at 4).

[3] See, e.g., Erwin Chemerinsky, Against Sovereign Immunity, 53 Stanford L. Rev. 1201-1224 (May 2001),

[4] See William F. Kussel, Tribal Sovereignty and Jurisdiction: It’s a Matter of Trust (Jan. 1996).

[5] See Oklahoma Tax Comm’n v. Citizen Band Potawatomi Tribe of Okla., 498 U.S. 505, 509 (1991); Kiowa Tribe of Okla. v. Mfg. Techs., Inc., 523 U.S. 751, 754 (1998).

[6] Mylan, supra (slip op. at 7).

[7] See Kiowa, supra, 523 U.S. at 756; see also Bodi v. Shingle Springs Band of Miwok Indians, 823 F.3d 1011, 1021 (9th Cir. 2016).

[8] Mylan, supra (slip op. at 10).

[9] Id. (slip op. at 11).

[10] Id. (slip op. 11-12); see also MCM Portfolio LLC v. Hewlett-Packard Co., 812 F.3d 1284, 1289 (Fed. Cir. 2015).

[11] Mylan, supra (slip op. at 8).

[12] Id. (slip op. at 12).

[13] Id. (slip op. at 16).

[14] Id. (slip op. at 16-17).

[15] See Ericsson Inc. v. Regents of the University of Minnesota, Case No. IPR2017-01186 (PTAB Dec. 19, 2017).

[16] See Allergan, Inc. and The Saint Regis Mohawk Tribe v. Teva Pharmaceuticals USA, Inc., Case No. 2:15-cv-01455-WCB (E.D.Tex. Oct. 16, 2017).

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