July 20, 2018

Tribal immunity does not insulate patents owned by Native American tribes from inter partes review (IPR) proceedings.  So held the U.S. Court of Appeals for the Federal Circuit in its July 20 opinion in Saint Regis Mohawk Tribe v. Mylan Pharms. Inc.  This opinion results from a case in which a patent holder assigned its patents to the tribe after the institution of several IPRs.Although the case has its roots in the pharmaceutical industry, the Federal Circuit’s holding has broad applicability to any industry. 

Tribal sovereign immunity generally protects a tribe from private causes of action. It does not, however, protect it against government-run investigative or adjudicatory agency actions. The Federal Circuit held that tribal immunity does not extend to IPRs because an “IPR is more like an agency enforcement action than a civil suit brought by a private party.” In issuing this holding, the Federal Circuit cited the following reasons:

  • The U.S. Patent and Trademark Office (PTO) Director—a politically-appointed figure—has complete discretion to institute (or refuse to institute) an IPR. Because the Director can choose not to institute an IPR, there is no concern that a tribe could be “unilaterally hale[d]” into an IPR by a private party.
  • The PTAB could continue the IPR, even if the petitioner or the patentee did not participate in the proceeding following institution. “This reinforces the view that IPR is an act by the agency in reconsidering its own grant of a public franchise.”
  • There are several procedural differences between an IPR and patent litigation, including (1) the inability to amend the IPR petition (unlike the ability to amend pleadings), (2) the ability to amend patent claims (an option completely absent from district court litigation), (3) the lack of several discovery mechanisms and (4) the short length of and limited availability of live testimony at the IPR hearing. 

The Federal Circuit also explained that the differences between IPRs and reexamination proceedings (another means by which patents can be challenged after they have issued, and for which there is no tribal immunity) did not warrant the application of tribal immunity to IPRs. Finally, the court did not address the generic manufacturers’ arguments that the patent assignment was a sham, or that the tribe waived its immunity by suing them for infringement in district court.  It therefore remains to be seen how those issues would affect a claim to tribal or another type of sovereign immunity.

* IPRs are proceedings held before the Patent Trial and Appeal Board (PTAB) that address whether a patent is invalid as anticipated or obvious based on prior art patents or printed publications. After a third party files a petition for an IPR, the PTAB decides whether to institute the proceeding if it finds “a reasonable likelihood that the petitioner would prevail.” If the proceeding is instituted, the PTAB determines whether the challenged patent claims are invalid based on a preponderance of the evidence.