Docket No. 2018-1638 through -1643 (multiple IPRs)
DYK (C), MOORE, REYNA
July 20, 2018
Brief summary: Board decision that Allergan’s assignment of its patents to Saint Regis Mohawk Tribe did not allow the Tribe to terminate IPR proceedings based on sovereign immunity affirmed.
Summary: Mylan (joined by Teva and Alkorn, collectively “Mylan”) petitioned for IPR of Allergan’s patents relating to Allergan’s dry eye treatment Restasis after Allergan filed suit for infringement by Mylan’s ANDA. Allergan assigned the disputed patents to the Saint Regis Mohawk Tribe (“Tribe”), which filed a motion to terminate based on asserted sovereign immunity, and Allergan filed a motion to withdraw. The USPTO (“Board”) denied both motions, and Allergan and the Tribe appealed the Board decision. The FC panel explained that “Board decisions must be set aside if they are ‘arbitrary, capricious, an abuse of discretion, or otherwise not in accordance with law” (5 USC § 706). The FC panel also explained that Indian tribes have “inherenty sovereign immunity,’ and suits against them are generally barred ‘absent a clear waiver by the tribe or congressional abrogation’” (Okla. Tax Comm’n, US 1991), but also that “[t]here is not…a blanket rule that immunity does not apply in federal agency proceedings” (Fed. Maritime Comm’n, US 2002 (“FMC”) (proceeding in that case had “‘overwhelming’ similarities with civil litigation in federal courts…‘bear a remarkably strong resemblance’ to the rules applied in civil litigation”). Mylan argued sovereign immunity under FMC should not apply to “IPR proceedings because they are more like a traditional agency action”, and the FC panel agreed. The FC panel explained that an IPR “is a ‘hybrid proceeding’ with ‘adjudicatory characteristics’ similar to court proceedings, but in other respects it ‘is less like a judicial proceeding and more like a specialized agency proceeding’” (Cuozzo, US 2016 (as is inter partes reexamination); Oil States, US 2018 (emphasizing “the government’s central role in IPR and the role of the USPTO in protecting the public interest”); SAS, US 2018 (emphasizing “the adjudicatory aspects of IPR and the way in which it ‘mimics civil litigation’”)). “Ultimately,” the FC panel wrote, “several factors convince us that IPR is more like an agency enforcement action than a civil suit brought by a private party” (e.g., “the Director has complete discretion to decide not to institute review” (WiFi, FC 2018 (en banc); Alden, US 1999; “Board may choose to continue review even if the petitioner chooses not to participate” (Cuozzo, US 2016); “USPTO procedures in IPR do not mirror the” FRCP (e.g., “a petitioner may only make clerical or typographical corrections to its petition”) (FMC)), a proceeding in which the FMC Court recognized immunity would not apply. Thus, it affirmed the Board decision but also noted it is leaving “for another day the question of whether there is any reason to treat state sovereign immunity differently.” Judge Dyk concurred, writing “separately to describe in greater detail the history of [IPRs] that confirms that those proceedings are not adjudications between private parties.”