THE bad news about the EPO and the relatively good news about the USPTO (gradually phasing out software patents) aside, we have a quick update on the Allergan “scam” (the word widely used to describe gross misuse of immunity). We last wrote about it a week ago.
Allergan will eliminate about 5.5 percent of its workforce as part of a cost-cutting move while it prepares for generic competition on several lucrative drugs.
The company will cut 1,000 jobs and leave another 400 open positions unfilled. The Dublin-based company has about 18,000 employees.
The 2017 patent story of the year took another turn shortly before Christmas when an expanded panel at the PTAB ruled that the University of Minnesota could not use sovereign immunity to shield its patents in a dispute with Ericsson. That’s because, the Board said, the University waived its sovereign immunity by asserting one of its patent against the Swedish company, which Ericsson then sought to challenge in inter partes review (IPR). The panel did confirm that state entities were immune from IPR - just not when they launch an assertion.
That case did not directly involve the Saint Regis Mohawks, the Native American tribe which catapulted the issue of sovereign immunity and IPRs into the mainstream when it was paid millions to take ownership of a number of Allergan drug patents, but the tribe’s lawyers were quick to ratchet up their own dispute when they filed a motion with the PTAB asking for information on the judges covering their case such as how they’re compensated and requesting recent performance reviews. With constraints being placed on how sovereign immunity can be used in relation to IPR, the tribe has clearly decided to come out fighting; though yesterday, the board responded by forbidding the Mohawks from filing further, similar requests.
Earlier this week I discussed the Saint Regis Mohawk Tribe’s discovery request directed to the Board’s internal practices, personnel policies, and communications; yesterday, the Board responded. In a strongly worded Order, the Board pointed out the impropriety of the Tribe’s filing and its repeated disregard for the Board’s rules.
The creation of adversarial procedures before the Patent Trial and Appeal Board under the Leahy-Smith America Invents Act (post-grant review, inter partes review, and covered business methods review) has raised a number of issues arising from the differences between Article I agencies (and the courts created therein and governed by the Administrative Procedures Act; 5 U.S.C. ۤ 554) and Article III courts. Some of these stem from the nature of the two types of courts (with the Chief Justice of the U.S. Supreme Court noting these differences somewhat acerbically in Oil States Energy Services, LLC v. Greene's Energy Group, LLC, to whit "we usually mean something different when we use the word 'judge"'), and some from legitimate differences between the goals of the two types of tribunals.
2018 started off with a sovereign immunity bang, with the Saint Regis Mohawk Tribe filing a motion that implicitly suggests that the Patent Trial and Appeal Board (PTAB) would only rule against them due to financial self-interest and political pressure.
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The Saint Regis Tribe’s request asks for information about how judges are financially compensated, asks for copies of the performance reviews of the judges deciding their case, and effectively accuses the PTAB of conducting off-record ex parte conversations about the case, while providing no evidence of any such conversations. The obvious implication is that the Tribe is asserting that the PTAB behaved improperly.
People who make a living complaining about IPR occasionally accuse the PTAB of “stacking panels”—of putting additional judges onto a PTAB decision in order to rule against a company they don’t like. It even came up during the Oil States argument, although it doesn’t appear to have been considered particularly important there. The Saint Regis Tribe appears to be buying into this conspiracy theory, and getting ready to litigate it.
The reality, unsurprisingly, is that those complaints are baseless. The PTAB does expand panels on occasion, but they do it for very specific reasons—and those reasons are hardly secret. The PTAB expands panels to ensure that important questions (like, for example, if sovereign immunity applies to IPR) are decided by a panel that includes the most senior PTAB judges, and to ensure that panels apply the law properly in instances where some members of the original panel appear to be applying the law improperly.