By Jason Rantanen
Saint Regis Mohawk Tribe, Allergan, Inc. v. Mylan Pharmaceuticals Inc., Teva Pharmaceuticals USA, Inc., AKORN, Inc. (Fed. Cir. 2018) Download Opinion
Panel: Dyk (concurring), Moore (author), Reyna
Last fall, Allergan transferred a set of patents relating to its Restasis product (the “Restasis Patents”) to the Saint Regis Mohawk Tribe (“the Tribe”). The Tribe promptly asserted tribal sovereign immunity in the pending inter partes review proceedings involving the Restasis patents. In February, the PTAB denied the Tribe’s motion to terminate the IPRs, a decision the Tribe appealed. Following an expedited briefing schedule, the Federal Circuit has now affirmed the PTAB’s denial of sovereign immunity.
The panel opinion, joined by all three judges, addressed only one of the arguments against sovereign immunity: that under the Supreme Court’s analysis in Fed. Maritime Comm’n v. S.C. State Ports Auth., 535 U.S. 743 (2002), tribal sovereign immunity does not apply. It’s important to note at the outset that “Generally, immunity does not apply where the federal government acting through an agency engages in an investigative action or pursues an adjudicatory agency action.” Slip Op. at 5.
The Court in FMC looked to whether the adjudications at issue were “the type of proceedings from which the Framers would have thought the States possessed immunity when they agreed to enter the Union.” Id. at 5-6. In particular, the Federal Circuit observed that “[i]n doing so, the Court recognized a distinction between adjudicative proceedings brought against a state by a private party and agency-initiated enforcement proceedings.” Id. at 6.
This question is similar to that of whether an administrative agency can hear a dispute at all, and unsurprisingly the court looked to the Supreme Court’s recent decisions for guidance. “IPR is neither clearly a judicial proceeding instituted
by a private party nor clearly an enforcement action brought by the federal government,” the court observed, before comparing the views offered by the Court in Oil States v. Greene’s Energy and SAS v. Iancu. Ultimately, the court concluded, “IPR is more like an agency enforcement action than a civil suit brought by a private party….” Thus, “we conclude that tribal immunity is not implicated.” Id. at 8.
How is IPR more like an agency enforcement action? For one thing, the Director chooses whether to institute an IPR. And while that discretion is limited to an all-or-none decision under SAS, “if the Director decides not to institute, for whatever reason, there is no review.” Id. at 8. In addition, “the Board may choose to continue review even if the petitioner chooses not to participate,” reinforcing “the view that IPR is an act by the agency in reconsidering its own grant of a public franchise.” Id. at 9. There are also differences between the IPR rules of procedure and the Federal Rules of Civil Procedure; because of these distinctions “the agency procedures in FM much more closely approximated a civil litigation than those in IPR.” Id. at 10. Nor does the existence of more “inquisitorial” proceedings in which sovereign immunity would not apply, such as ex parte and inter parte reexamination, mean that sovereign immunity must apply to IPRs.
Judge Dyk joined the panel opinion in full, but wrote separately to describe the history of inter partes review and why those reviews are not adjudications between private parties. His opinion is a great reference if one wants a thorough description of the history of the proceeding, complete with numerous source citations.
This dispute is clearly not at an end, and I suspect that the Tribe and Allergan will seek en banc review, if not head straight for a cert petition. Given the expedited briefing schedule, I expect this issue to continue to move quickly. At the same time, however, keep in mind that in the parallel infringement proceeding in the Eastern District of Texas, Judge Bryson (sitting by designation) found the Restasis Patents obvious following a bench trial. Allergan (now joined by the Tribe) appealed that determination. Oral argument is currently scheduled for September.