Mylan and Teva v. St. Regis Mohawk Tribe (PTAB 2018)
In a long 42 page opinion, a PTAB panel has denied St. Regis Mohawk Tribe’s motion to dismiss the pending inter partes review (IPR) proceedings against its patents. Here, the panel holds plainly that “Tribal immunity does not apply to inter partes review proceedings.” Although the PTAB identified state sovereign immunity as a different question, the ruling here certainly suggests that
The case will be appealed to the Federal Circuit — I expect the court will be willing to hear a mandamus action, but we may have to wait until a final decision of validity — something that the equitable owner Allergan has been working hard to avoid. The sovereign immunity question is the type of threshold question decided at the IPR petition stage. Under the statute, PTO petition decisions are not subject to appeal. However, the issues here appear to fall squarely within the exceptions noted by the Supreme Court in Cuozzo.
Allergan owned several patents that it granted to the Mohawk Tribe back in 2017. Although the patents are quite valuable, Allergan actually paid the Mohawk Tribe to take the patents. The scheme allowed Allergan to still exclusively control use of the underlying inventions and potentially benefit from the Sovereign Immunity given to Indian Nations within the United States.
In reviewing whether sovereign immunity applies here, the PTAB held the following:
- There is no statutory basis for the application of Tribal Immunity in IPR proceedings.
- There is no controlling precedent requiring the application of Tribal Immunity in IPR proceedings. (Decisions by other Federal Agencies is not controlling precedent.)
- Granting of sovereign immunity to the States in the IPR context does not require granting of sovereign immunity to the Indian Nations.
- Congress granted the PTO with broad IPR authority over “any patent.”
- In IPR actions, the jurisdiction is in rem – over the patent – rather than in personam – over the patent owner. This means that IPRs are less offensive of any immunities.
- IPR actions are not the “type of suit” to which tribal immunity applies at common law since petitioners are not seeking anything from the tribe (only cancellation of its valuable property rights).
The collection of these legal determinations served as the PTAB’s foundation for its final decision of no immunity.
The PTAB then went on to look at the particular situation in this case – where the Mohawk Tribe is the assignee, but Allergan holds all effective rights. After reviewing the details of the transfer, the PTAB ruled in the end that it could treat Allergan as the “patent owner.” See Speedplay, Inc. v. Bebop, Inc., 211 F.3d 1245, 1250 (Fed. Cir. 2000) (a “party that has been granted all substantial rights under the patent is considered the owner regardless of how the parties characterize the transaction that conveyed those rights.”).
I would see this case as quite different if the Mohawk Tribe had actually bought the patents or obtained them through some positive-value venture. Here, the approach is blatant rent seeking and I am glad that the PTAB was able to work its way through.