On Friday a panel of the Federal Circuit (Judges Dyk, Moore and Reyna) ruled that sovereign immunity does not shield Indian Tribes from patent challenges via the inter partes review mechanism. In a nutshell, the panel noted that (a) Congress must explicitly waive tribal sovereign immunity, but (b) that’s only true in litigation, not administrative proceedings, and (c) IPRs are administrative proceedings (since they look and smell more like administrative proceedings than like court proceedings), therefore there’s no tribal sovereign immunity in IPRs, and therefore the transfer of Allergan’s patents to the St. Regis Mohawk Tribe did not immunize those patents from IPR challenges. Judge Dyk filed a concurrence in which he went through the history of IPRs the earlier ex parte and inter parte reexaminations – which are unquestionably administrative proceedings – and said that IPRs are just the next step in this process.
When I wrote about this case last year, I did not attempt to predict the outcome, but merely noted that SRM’s case passed the I-can-say-it-with-a-straight-face-and-not-blush test. What I found interesting about the panel’s decision was its complete avoidance of any discussion about the transfer to SRM being a sham, which was one of the arguments made in some corners; the decision was constructed in a way that there was no need to broach this question. Also noteworthy was the panel’s invocation of the recent Supreme Court decisions in Oil States and SAS, which it relied on to show that IPR proceedings are not litigation – and to presumably help insulate this decision from a grant of cert when the cert request follows.
It will be interesting to see if, as a result of this decision, pharmaceutical companies and others assign their patents to state universities, which the PTAB agreed at the beginning last year (in a case involving the University of Florida) do have sovereign immunity from IPR challenges...at least until it said in a case at the end of last year (involving the University of Minnesota) that the assertion of a patent by a state university in federal court waives state sovereign immunity in IPRs before the PTAB. That case is now on appeal before the Federal Circuit.