In the near future, Native American tribal organizations might consider expanding operations in many technological areas in view of recent court decisions indicating that tribes enjoy sovereign immunity from patent infringement suits. According to the courts, sovereign immunity applies to Native American tribes even for activities performed off the reservation and regardless of whether the activities are commercial in nature. Practitioners should be aware of the possibility for such a trend and consider the implications for litigation, including assessing the possibility of lawsuits against alternative direct infringers who may be unaffiliated with the tribe.
In Home Bingo Network v. Multimedia Games, Inc., 2005 U.S. Dist. LEXIS 34238 (N.D.N.Y Aug. 30, 2005), a patent infringement claim was alleged against a Native American tribe’s business development authority. The court granted a motion to dismiss the action against the tribe’s business development authority because the business development authority was an arm of the Native American tribe and, therefore, entitled to sovereign immunity. Id. at *4-6. The court indicated that the immunity applies regardless of whether the business development authority was engaging in activity off the reservation or whether the activity was commercial in nature. Id. at *4.
The court in Home Bingo pointed to the Supreme Court decision in Kiowa Tribe of Okla. v. Manufacturing Techs., Inc., 523 U.S. 751, 754 (1998), for the proposition that Native American tribes enjoy the same immunity from suit enjoyed by sovereign powers and are subject to suit only where Congress has authorized the suit or the tribe has waived its immunity. The court in Home Bingo further pointed to the Supreme Court decision in C & L Enters., Inc. v. Citizen Band Potawatomi Indian Tribe of Okla., 532 U.S. 411, 418 (2001), for the proposition that to abrogate tribal immunity, Congress must “unequivocally” express that purpose. According to the court in Home Bingo, Congress has not expressly waived tribal immunity with respect to the enforcement of patents, so Native American tribes enjoy sovereign immunity from patent infringement suits.
The same conclusion of tribal sovereign immunity from patent infringement suits was reached in the more recent case of Specialty House of Creation, Inc. v. Quapaw Tribe of Okla., 2011 U.S. Dist. LEXIS 9179, (N.D. Okla. Jan. 27, 2011). The court in Specialty House examined the federal patent law and concluded that the statute regarding patent infringement makes no waiver of the sovereign immunity of Native American tribes in its text. Id. at *2. The Plaintiff in that case argued that federal patent law must waive tribal sovereign immunity because it is a statute of general applicability. Id. at *3. The court disagreed with the Plaintiff’s argument, and stated that the fact that a general statute applies to tribes does not mean that Congress has waived tribal sovereign immunity from private suits brought thereunder. Id. As a consequence, therefore, the court reasoned that the defendant tribe was immune from private suits under federal patent law. Id. at *4.
If Native American tribes become more involved in technology areas while maintaining immunity from patent infringement lawsuits, Plaintiffs seeking to enforce their patent rights may have to find creative ways to do so. Some options may include bringing lawsuits against direct infringers who are not themselves affiliated with the tribe, or leveraging a contractual waiver of sovereign immunity between the tribe and a potential plaintiff (if available). Meanwhile, Native American tribes should consider leveraging their immunity from patent infringement by becoming more involved in technology areas, while preparing for alternative ways that Plaintiffs might use to enforce their patent rights.