"Sham" or "scam", depending on who one asks

Summary: The patent microcosm is aligning itself with a clear scam/bluff, which says a lot about the patent microcosm and its moral depravity

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 CCIA's Josh Landau wrote about it early on Monday:

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.

Dennis Crouch wrote about that as well. He said that "Allergan owned several patents that it granted to the Mohawk Tribe back in 2017. Although the patents are quite valuable, Allergan actually paid the Mohawk Tribe to take the patents. The scheme allowed Allergan to still exclusively control use of the underlying inventions and potentially benefit from the Sovereign Immunity given to Indian Nations within the United States."

Well, it obviously did not work. Kevin Noonan, another patent maximalist, said "this clearly is not the end of the matter; it remains to be seen whether the Board quickly follows with a Final Written Decision on the merits (due within the statutorily mandated twelve months on March 31st) or whether the Tribe files a Notice of Appeal on this issue (although the availability of such an appeal, likely to be considered interlocutory in nature, is uncertain; it is unlikely the PTAB will certify the question or otherwise facilitate an early appeal)."

Scott McKeown said that the "Federal Circuit will review both the PTAB’s state and tribal sovereign immunity decisions in the short term."

It seems very unlikely to be overturned.

Watchtroll hates PTAB so much that he is willing to defend this patent scam. Here is what he wrote yesterday:

“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.

These so-called 'patent owners' [sic] would be better served without such scams in their 'support'. It just makes the patent system look rather bad and ripe for corruption. Here's what Managing IP wrote yesterday:

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.

“The only reservation that I had with the decision was that the PTAB did not come out and use the words: sham deal,” this comment said. It went further:

By not doing so, it injects ambiguity, as it is the "sham deal" designation that carries the legal effect that the PTAB enacted.

A Federal judge has already called it a "sham". Many others called it a "scam".

It would be a lot better for the legitimacy of the patent system to just leave it all behind and not openly/publicly defend such a "scam" or "sham". Every time lawyers/attorneys express their support for the scammers they promote the perception that they too are scammers or sympathetic towards scams. ⬆