Federal Circuit Affirms PTAB Ruling That Tribal Immunity Does Not Apply To IPRs

20 July 2018 PTAB Trial Insights Blog
Authors: Stephen B. Maebius

On July 20, 2018, the Federal Circuit held in St. Regis Mohawk Tribe v. Mylan Pharmaceuticals that tribal sovereign immunity does not prevent IPR on a patent assigned to a tribe asserting such immunity. The court expressly declined to make any decision about state sovereign immunity in this case.  The PTAB has found that state sovereign immunity can prevent IPR, although it may be waived if the patent is enforced in district court by the assignee (see “Expanded PTAB Panel Finds Sovereign Immunity Waived By Patent Enforcement”). 

Judges Dyk, Moore, and Reyna issued the opinion, in which Judge Dyk concurred.  The court found that IPR is more like “an agency enforcement action than a civil suit brought by a private party” based on several factors:

  1. “First, although the Director’s discretion in how he conducts IPR is significantly constrained, he possesses broad discretion in deciding whether to institute review. Oil States, 138 S. Ct. at 1371…  Therefore, if IPR proceeds on patents owned by a tribe, it is because a politically accountable, federal official has authorized the institution of that proceeding. See Alden v. Maine, 527 U.S. 706, 756 (1999) (contrasting suits in which the United States ‘exercise[s] . . . political responsibility for each suit prosecuted” in order to fulfill its obligation under the Take Care Clause with “a broad delegation to private persons to sue nonconsenting States’).”
  2. “Second, the role of the parties in IPR suggests immunity does not apply in these proceedings. Once IPR has been initiated, the Board may choose to continue review even if the petitioner chooses not to participate. 35 U.S.C. § 317(a). The Director has also been granted the right to participate in appeals “even if the private challengers drop out.” Cuozzo, 136 S. Ct. at 2144; see also 35 U.S.C. § 143 (granting the Director the right to intervene
    in appeals of Board decisions in IPRs).”
  3. “Third, unlike FMC, the USPTO procedures in IPR do not mirror the Federal Rules of Civil Procedure. See FMC, 535 U.S. at 757–58. Although there are certain similarities, the differences are substantial. While the Federal Rules of Civil Procedure provide opportunities for a plaintiff to make significant amendments to its complaint, see Fed. R. Civ. P. 15, the Board has determined that in IPR a petitioner may only make clerical or typographical corrections to its petition…  At the same time, a patent owner in IPR may seek to amend its patent
    claims during the proceedings, an option not available in civil litigation. 35 U.S.C. § 316(d). IPR also lacks many of the preliminary proceedings that exist in civil litigation.”
  4. “Finally, while the USPTO has the authority to conduct reexamination proceedings that are more inquisitorial and less adjudicatory than IPR, this does not mean that IPR is thus necessarily a proceeding in which Congress contemplated tribal immunity to apply. The Tribe acknowledged that sovereign immunity would not apply in ex parte or inter partes reexamination proceedings because of their inquisitorial nature. Oral Arg. at 6:30– 8:10. The mere existence of more inquisitorial proceedings in which immunity does not apply does not mean
    that immunity applies in a different type of proceeding before the same agency.”

Judge Dyk, in a 13-page concurrence, states that “I fully join the panel opinion but write separately to describe in greater detail the history of inter partes review proceedings, history that confirms that those proceedings are not adjudications between private parties. “

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