AS we predicted more than 24 hours ago, Monday was dominated by coverage (at least in patent blogs) of the collapse of a dubious Allergan and Mohawk relationship. PTAB isn't impressed by the "scam" of these two 'companies' (one is not actually a company, just a tribe pretending to be one), which conspired to shield patents that the USPTO probably shouldn't have granted.
The PTAB’s answer to this question was a resounding no. First, the PTAB noted that there’s neither case law nor statutory reasons to apply tribal sovereign immunity to agency proceedings like IPR. Second, as I noted back in October, tribal sovereign immunity does not apply to federal administrative proceedings like IPR. The PTAB agreed, finding that tribal sovereign immunity does not apply to IPRs, which are of course federal administrative proceedings. And third, the PTAB noted that in an IPR, the ultimate remedy is applied only to the challenged patent, not to the patent owner. This sort of proceeding isn’t the type of “suit” which traditionally triggers sovereign immunity.
This might also have impacts on state sovereign immunity going forward. While there are good case law reasons to consider the applicability of state sovereign immunity, unlike tribal sovereign immunity, state sovereign immunity also doesn’t apply to federal administrative proceedings and IPR’s structure makes it not the sort of suit which traditionally triggers state sovereign immunity.
“The Tribe is a sovereign government that cannot be sued unless Congress unequivocally abrogates its immunity or the Tribe expressly waives it,” wrote attorneys for the Tribe in the Motion to Dismiss. “Neither of these exceptions apply here. As Patent Owner, the Tribe is an indispensable party to this proceeding whose interests cannot be protected in its absence.”
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If this panel really believes this, if the entire PTAB really believes this, god help patent owners!
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Whether you believe the Saint Regis Mohawk tribe deserves to dismiss these IPR proceedings by asserting sovereign immunity isn’t really the issue. Even if this winds up being the correct legal determination (which I seriously doubt), patent owners deserve better.
The PTAB rules that sovereign immunity does not apply in the closely-watched case in which Allergan transferred patents to a Native American tribe, and that the proceedings can continue even without the tribe’s participation in view of Allergan’s retained ownership interests in the challenged patents
The Patent Trial and Appeal Board (PTAB) has ruled that sovereign immunity does not apply to inter partes review (IPR) in the closely-watched case in which Allergan transferred patents to a Native American tribe.
By not doing so, it injects ambiguity, as it is the "sham deal" designation that carries the legal effect that the PTAB enacted.