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What do the amici say about the Allergan / St. Regis Mohawk deal?

Zachary Silbersher

On December 1, 2017, several friends of the PTAB submitted amicus curiae briefs in connection with the Tribe’s motion to dismiss the pending IPRs challenging Allergan’s Restasis® patents.  The Board previously denied a request to file a brief as an amicus curiae, in part based on Mylan’s objection.  Yet, the Board subsequently reversed course and allowed any amici to submit briefs by the first of December.  The Board recognized that the Tribe’s motion to dismiss presents an issue of first impression, and Mylan dropped its objection to amicus briefs. 

Thirteen different amicus briefs were filed, with roughly equal numbers arguing in favor of dismissal as those opposed to dismissal.  Overall, those arguing in favor of the Tribe’s motion to dismiss admonished the Board to tread carefully.  They reminded the PTAB that the Supreme Court has historically been very deferential to tribal sovereign immunity, and any decision impacting the contours of tribal immunity remains the purview of Congress, not a federal agency charged with administering patents.  By contrast, those opposed to the Tribe’s motion to dismiss argued that, for procedural and technical reasons, sovereign immunity is inapplicable to IPRs.  While the amici fiercely debated whether the PTAB has authority to determine the immunity questions, few if any amici weighed in on whether the Tribe is the actual owner of the patents.  As we previously argued, putting aside the difficult issue of whether tribal sovereign immunity is applicable to IPRs, the Board could theoretically deny the motion to dismiss on the ground that the Tribe does not actually own the patents, without reaching the deeper policy questions around immunity.  That, in essence, would limit this case to its facts.

More than one tribe submitted amicus curiae briefs, including Oglala Sioux Tribe and the Seneca Nation.  Along with other amici, the Oglala Sioux Tribe argued that to the extent the St. Regis Mohawk Tribe’s motion to dismiss implicated policy considerations regarding whether tribal sovereign immunity can be constrained to non-commercial activities, then only Congress can resolve that question.  The Seneca Nation admonished the Board to tread carefully, and reminded the Board that the Supreme Court has traditionally been very deferential to treatments of tribal sovereign immunity.  The Seneca Nation’s message was that the Board risks creating “an exception to tribal immunity for all off-reservation commercial conduct.”

Joining this sentiment was a number of legal scholars, from Harvard, Yale, Berkeley and Florida State University.  They argued that assertion of tribal sovereign immunity is an extremely delicate matter, and after a prima facie showing of tribal immunity by the Patent Owner, that should end the inquiry.  The Board, they argue, lacks authority to determine the scope of tribal immunity or weigh policy considerations with respect to the prudence or ramifications of the contract between the parties, such as Allergan and the Tribe.  This argument was echoed by U.S. Inventor, an inventor advocacy organization that lobbies on behalf of inventors, as well as several other amici, including Luis Ortiz and Kermet Lopez.

By contrast, those opposed to the Tribe’s motion to dismiss offered technical arguments for why the Tribe’s immunity is inapplicable in an IPR.  These amici included, inter alia, Public Knowledge, Electronic Frontier Foundation and the Association for Accessible Medicines (AAM).  They argued that patents are essentially public rights, and resolution of their validity is more akin to an agency determination before the world, rather than a dispute between private parties.  Because the Board’s jurisdiction applies to patents, IPRs are essentially in rem determinations, and they are free from the traditional hallmarks of private dispute resolution, then precedent dictates that sovereign immunity does not apply.  Even if these arguments ultimately prevail before the Supreme Court, it is likely very difficult for the PTAB to buy into them at this time.  Given that the PTAB has previously decided that Universities could rightfully assert immunity, how can the PTAB now decide that deciding the applicability of IPRs to tribal sovereign immunity is beyond its mandate?

Other amici, on both sides of this issue, indicated that the Board should seek input on this issue elsewhere.  Public Knowledge and Electronic Frontier Foundation (EFF) tacitly recognized the gravity of this decision by suggesting the Board should certify the question for guidance from the Director of the Patent Office and the opportunity for notice and comment.  National Congress of American Indians (NCAI), National Indian Gaming Association (NIGA), and the United South and Eastern Tribes (USET) argued that the Board should refrain from deciding the motion to dismiss pending input from either the Supreme Court or Congress.  Even if judicial restraint counsels the Board to seek input on this issue from Congress, that delay could in turn benefit Allergan, even if it eventually loses this argument, because delaying the IPRs could in turn delay entry of generics.  That is not likely to be a factor lost on the Board.  Also, unlike district courts, the PTAB is statutorily required to complete IPRs within fixed periods of time.

Putting aside the question whether the PTAB potentially lacks the requisite jurisdiction or authority to adjust the contours of tribal sovereign immunity, the scholars also argued that the Board “is not competent to evaluate or balance the legitimacy of the Allergan-Mohawk contract from Congress’s policy perspective.”  That argument, however, may be doubtful.  Mylan has argued that under the precise terms of the deal between Allergan and the Tribe, the Tribe does not actually own the patents.  That question is raised and decided squarely within the confines of patent law, and need not reach immunity issues at all to be decided.  Indeed, there is a pathway for the Board to deny the Tribe’s motion to dismiss exclusively on the ground that Allergan did not confer enough rights on the Tribe for it to actually own the patents, without implicating any of the policy or larger immunity concerns raised by the amici.

The Oglala Sioux Tribe also argued that assertion of tribal immunity before the PTAB is no different than assertion of immunity by Universities.  This is an important argument, and likely one that will take center stage in resolution of this issue.  At first blush, the obvious difference is that the Universities asserted immunity with respect to patents that originated at the respective University, whereas the Allergan’s Restasis® patents did not originate with the Tribe.  Does that difference matter?  Some analysts have argued it should not.  One could argue that because patents can be freely assigned, all that should matter is who currently owns the patents when immunity is asserted.  Under Patent Law, that is true, but the problem is that it side-steps the non-patent issue that makes Allergan’s deal so troubling to other amici.  Allergan’s patents did not originate with the Tribe because the Allergan essentially rented the Tribe’s immunity.  While doing so may not contravene any specific patent laws or regulations, the ramifications of renting immunity extend far beyond patent law.  The Software and Information Industry Association highlighted that transactions similar to that between Allergan and the Tribe have already spread outside of the pharmaceutical industry, and Judge Bryson previously called out Allergan for being conspicuously silent about the larger ramifications of its strategy.

Askeladden, which founded the Patent Quality Initiative to improve understanding of patents within financial services, along with AAM made an interesting point.  They argued that under the AIA, the Board has authority to continue an IPR proceeding even if the parties drop out, settle or cannot be compelled to join.  That feature is distinct from district court litigation, where no court has jurisdiction to continue resolving a dispute on its own in the event the parties are dismissed.  While this wrinkle may not be dispositive for the Tribe’s motion to dismiss, it highlights a practical problem with deals such as that between Allergan and the Tribe.  Will a brand pharmaceutical company enter such a deal, with all the attendant risks of putting its patents in someone else’s hands, if the PTAB nevertheless has authority to look past immunity and invalidate patents nonetheless?

Finally, Deva Holding also made an interesting point.  Deva is a generic pharmaceutical company that has filed an ANDA for license to distribute a generic version of Restasis®.  The Tribe argued that the IPRs should be dismissed because Allergan cannot adequately represent its interest, and as an example, the Tribe and Allergan may have competing claim construction positions.  Yet, Deva pointed out that in Deva’s pending ANDA litigation with Allergan, there was no attempt by the Tribe to be joined to the suit, nor any attempt by the Tribe to offer claim constructions that competed with Allergan’s, or at the very least, preserve the opportunity to do so.  This may be an important point for the Board’s decision.  Assuming the Board is wary of treading into any decision that would rule upon the contour’s of tribal sovereign immunity, Deva’s point deflates the Tribe’s position that it is an indispensable party to the IPR as the purported owner of the patent.