09.23.17
The Mohawk-PTAB Fiasco Threatens the Tribe’s Reputation More Than It Threatens PTAB
Since the patents are not even assigned to the Mohawk people, this whole “scam” accomplishes nothing
Photo credit: Sarah Stierch (CC BY 4.0)
Summary: In an effort to dodge scrutiny from the Patent Trial and Appeal Board (PTAB), Allergan Plc offloaded a lot of negative publicity onto the Mohawk people, owing primarily to the Mowhawk Tribe’s general counsel, Dale White
THE Patent Trial & Appeal Board (PTAB) has been making many headlines recently. The patent microcosm is trying as hard as it can to kill it. It cannot kill the people inside the PTAB (whom it vainly refers to as a “death squad”), so it wants to kill the entire institution. It’s appalling.
We were very sad to see the Mohawk people exploited, or virtually used as a sort of ‘instrument’ for killing PTAB. As some people have put it, the Mohawk tribe is now facilitating a "scam" (not our word). Don’t expect the patent microcosm to admit this. In fact, in some comments that we saw over the past week, all criticisms of this ploy are being dismissed or played down as being just a substance-less cry of “scam”. Far from it!
Earlier this week, in a site of the patent microcosm, Philippe J.C. Signore from Oblon wrote about this as a case for refreshing Constitutional Law recollection. Well, as patent radicalism is waning (the system has improved in recent years) they will try to crush the system. Here is what Signore wrote:
Article III also states that the judicial power of the U.S. is vested in the federal courts and judges. In its brief filed in August 2017, Oil States argued that IPR proceedings are unconstitutional because they are set up as adversarial judicial trials (as opposed to examination proceedings) of granted private property rights, and as such should be handled by Article III judges and not “administrative agency employees who are beholden to Executive Branch officials.” Oil States also argued that IPR trials resolve questions of novelty or obviousness, which “are precisely the same questions that English jurors resolved,” such that “they fall within the Seventh Amendment’s scope.”
The Eleventh Amendment of the Constitution has also made the patent headlines lately. This amendment bans lawsuits against individual states of the union, unless the immunity is waived. The immunity stems from the principle that states entered the federal system on the condition of keeping their sovereignty intact. In 1999, the Supreme Court interpreted the immunity of the Eleventh amendment as extending to state universities and agencies, recognized as arms of the state. As such, state universities cannot be sued for patent or trademark infringement (unless the immunity is waived or abrogated by Congress).
Earlier this year, in Covidien v. University of Florida, the PTAB refused to institute an IPR because it held that the patent owner, the University of Florida, should benefit from the immunity afforded to the States by the Eleventh Amendment. The PTAB reasoned that the “considerable resemblance” between IPR proceedings and civil litigation justified application of the sovereign immunity to the administrative proceeding. If this decision is affirmed, it would place state universities in the very enviable position of being able to sue for patent infringement in a federal court—without being subject to IPRs before the PTAB, and without being subject to infringement lawsuits.
Better change jobs if one relies on just suing lots of companies and trying to dodge legal challenges.
Three days ago we saw Susan Decker from the Wall Street media relaying the offensive analogy from a corrupt judge, who called PTAB a “death squad”. She wrote about the Mohawk fiasco and cited an extremist “who founded a group called US Inventor Inc.” (laughing stock of a tiny group). Why did Bloomberg decide to quote radicals like Paul Morinville? Or disgraced judges? Is that all that’s left to discredit PTAB by?
Decker said that “Allergan Plc’s decision to pay a Native American tribe $15 million a year rather than let one of its blockbuster drugs be scrutinized by the U.S. Patent & Trademark Office is part of a backlash against an agency review panel that has been dubbed a “death squad.””
This so-called ‘backlash’ is orchestrated by the patent maximalists. It’s a made up controversy which the practicing industry has repeatedly refuted. Sites like Watchtroll and Patently-O worked very hard to scandalise PTAB and solicit briefs to that effect. So did Morinville, who burned papers in an unauthorised protest in front of the USPTO (like some Tea Party nut).
Managing IP, another key element of the patent microcosm, wrote about it several days ago (stating, in the headline, that this “could blow up the IPR system”):
If successful, Allergan’s eye-catching gambit of seeking to cancel PTAB proceedings by assigning patents to the Saint Regis Mohawk Tribe would be a blueprint for others to follow. But will the PTAB rule that sovereign immunity applies in this case?
Then came Bristows, the UPC propagandists and the friends of patent trolls (even in Europe), with a headline that says “rip off consumers” [sic] (means customers). These are the mischievous people who openly lobby for patent trolls (even promoting them in the UK) — using words like “attack” to mean quality control (typical calls to weaken PTAB IPRs). It says that “according to this New York Times article, the Mowhawk Tribe’s general counsel, Dale White, said it was a Dallas law firm called Shore Chan DePumpo that first approached the tribe with the proposal.”
This highly dodgy entity was mentioned here before. To quote Bristows:
Critics have said that the move should fail because a company should not be able to shield its patents from review. The response, of course, being that they cannot completely shield their patents from any review – they will still be subject to federal court and the realm of Hatch-Waxman litigation (at least in this case). So the patents are, for now, not completely immune to the attack as stated by Allergan’s press release (although a different deal and parties could take a different position which could make the sovereign immunity v federal court position a bit murkier).
In the meantime, what seems clear is that this move is another flag to Congress that the IPR regime needs to be re-examined. Senator Brown, however, stated that he would look into how Congress can “close loopholes that drug companies exploit to avoid competition”. But perhaps a more holistic view as to all the issues in play is in order…
“The biggest problem with Allergan’s St Regis Mohawk deal is that the tribe may not own the patents,” IAM explained. They just (mis)use it for immunity and herein lies the great controversy. The Mowhawk Tribe’s general counsel, Dale White, got them into a scam. The tribe ought to fire him and ‘burn’ the patents (if at all possible). Any financial gain made through this ridiculous transaction is likely outweighed by the damage done to the tribe’s reputation already. Is this what they want to become synonymous with? Because many people will know nothing about the tribe except this episode. █
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