IPR Nos. 2016-01127 through -001132
U.S. Pat. Nos. 8,685,930B2; 8,629,111 B2; 8,642,556 B2; 8,633,162 B2; 8,648,048 B2; 9,248,191 B2 (“Allergan patents”)
USPTO Decision Denying Tribe Motion to Terminate
Brief summary: Board denied the Tribe’s motion to dismiss the IPR proceedings based on its sovereign immunity since under a grant back License of patents relating to Allergan’s dry-eye Restasis product, Allergan “remains the effective patent owner”.
Summary: This decision relates to patents relating to Allergan’s “Restasis” product that Allergan assigned to the Saint Regis Mohawk Tribe (“the Tribe”), and the Tribe’s motion to dismiss the IPR proceedings based on its sovereign immunity. FN2 of the Decision explains that the Board authorized the Tribe to file a motion to terminate the IPR proceedings, and not a motion to dismiss since the Tribe did not own the Allergan patents at the of institution. The Board requested the parties to file supplemental briefs in light of Ericsson v. Univ. Minn. (PTAB Dec. 19, 2017) and LSI Corp. v. Univ. Minn. (PTAB Dec. 19, 2017). On the same day Allergan assigned the Allergan Patents to the Tribe, in exchange for $13.75 million (and $15 million annually; both being “nonrefundable and noncreditable”), “the Tribe and Allergan also entered into a Patent License Agreement (‘License’) in which the Tribe granted back to Allergan ‘an irrevocable, perpetual, transferable and exclusive license’ under the” Allergan patents “for all FDA-approved uses in the” US, along with “the first right to sue for infringement with respect to ‘Generic Equivalents’”. The Board first explained that “Indian tribes are ‘domestic dependent nations’ that exercise ‘inherent sovereign authority’” (Bay Mills, US 1991), is “subject to suit only where Congress has authorized the suit or the tribe has waived its immunity” (Kiowa, US 1998), but also that “[a] tribe’s sovereignty…is of a unique and limited character” (Wheeler, US 1978; Mescalero, US 1973 (“when a tribal government goes beyond matters of internal self-governance and enters into off-reservation business transaction with non-Indians, its claim of sovereignty is at its weakest”)). The Tribe relied on FMC (US 2002) and other Board decisions applying that decision “with respect to state sovereign immunity in the context of” IPR proceedings (Covidien LP v. Univ. Fl. (IPR2016-01274); Neochord v. Univ. Md. (IPR2016-00208); Reactive Surfaces v. Toyota (IPR2016-01914)). But the Board found that the Tribe did not “point to any federal court of Board precedent suggesting that FMC’s holding with respect to state sovereign immunity can or should be extended to an assertion of tribal immunity in similar federal administrative proceedings”, but only “decisions of other federal agencies” to which the Board is not bound. Thus, the Board was not “persuaded that the tribal immunity doctrine applies to” its proceedings (FN5 explaining this decision is only with respect to IPRs, and does not interferences). The Board also explained that “termination…is not warranted if we can proceed with another patent owner’s participation” (Reactive Surfaces), and it agreed with Mylan “that these proceedings can continue with Allergan as the ‘patent owner’” because “the License transferred ‘all substantial rights’ in the challenged patents back to Allergan” (Waterman, US 1891; e.g., Allergan’s rights to sue for infringement (“the most important consideration” (Mann, FC 2010)); to make, use, and sell products “for all FDA-approved uses in the” US (“non-FDA approved uses are illusory”); to sublicense (“full power to end any proceeding-even one the Tribe wants to pursue-simply by granting a sublicense”); reversionary rights; to litigation proceeds (Luminara, FC 2016; Propat, FC 2007); its “primary right, but not the obligation, to prosecute and maintain the challenged patents” (including IPRs); and to consent in writing to any assignment of any interest in the Allergan patents). “In sum,” the Board concluded, “Allergan obtained all substantial rights in the challenged patents” through the License and “remains the effective patent owner” (“a recordation of a patent assignment only creates a rebuttable presumption regarding ownership” (SiRF Tech., FC 2010)). The Board was also not persuaded that the Tribe is an indispensable party to the IPRs (e.g., although instructive, FRCP do not apply to IPRs; “Allergan as at least an identical interest to the Tribe-if not more of an interest as the effective patent owner” and “will be able to adequately represent any interests of the Tribe….”)