Starting Off 2018 With More Sovereign Immunity

2018 started off with a sovereign immunity bang, with the Saint Regis Mohawk Tribe filing a motion that implicitly suggests that the Patent Trial and Appeal Board (PTAB) would only rule against them due to financial self-interest and political pressure.

(For more background on the Allergan/Saint Regis Mohawk IPRs, you can read my earlier posts on the topic. [1] [2])

Litigation Waivers and Sovereign Immunity

In order to understand why the Tribe chose to file such an unusual request, we need to go back a few weeks.  In mid-December, the PTAB started settling one of the more contentious issues in front of it—the question of whether sovereign immunity applies to inter partes review (IPR).  

An expanded panel in IPR2017-01186 (and companion IPRs), where Ericsson is requesting a review of patents owned by the University of Minnesota, determined that “IPR is an adjudicatory proceeding of a federal agency from which state entities are immune.”  This confirmed earlier IPRs which found that Eleventh Amendment sovereign immunity applies to IPRs.  

However, the PTAB also decided “that Patent Owner has waived its Eleventh Amendment immunity by filing an action in federal court alleging infringement of the patent being challenged in this proceeding.”  In other words, if you sue someone using a patent, you waive your sovereign immunity with respect to their IPR of your patent.  While this is not the rationale I would have preferred to see used in determining that sovereign immunity doesn’t bar review of a patent—I believe that sovereign immunity does not apply to IPRs, which are an action of a federal agency, as articulated in the brief we filed with the PTAB—it’s an important first step in preventing efforts to render IPR meaningless by the use of shielding ownership structures.

As expected, the University of Minnesota is requesting a writ of mandamus from the Federal Circuit, asking the Circuit to overturn the PTAB’s decision.

Responding to Ericsson

After the Ericsson decision, the basic assumption was that the Allergan/Saint Regis IPRs would also be covered under litigation waiver and thus sovereign immunity would be waived in these IPRs as well.  It appears that the Saint Regis Tribe wanted to preemptively lay out an appeal argument that the PTAB improperly decided to expand the panel hearing their case, and that they were doing so in response to improper influences.  

The Saint Regis Tribe’s request asks for information about how judges are financially compensated, asks for copies of the performance reviews of the judges deciding their case, and effectively accuses the PTAB of conducting off-record ex parte conversations about the case, while providing no evidence of any such conversations.  The obvious implication is that the Tribe is asserting that the PTAB behaved improperly.

People who make a living complaining about IPR occasionally accuse the PTAB of “stacking panels”—of putting additional judges onto a PTAB decision in order to rule against a company they don’t like.  It even came up during the Oil States argument, although it doesn’t appear to have been considered particularly important there.  The Saint Regis Tribe appears to be buying into this conspiracy theory, and getting ready to litigate it.

The reality, unsurprisingly, is that those complaints are baseless.  The PTAB does expand panels on occasion, but they do it for very specific reasons—and those reasons are hardly secret.  The PTAB expands panels to ensure that important questions (like, for example, if sovereign immunity applies to IPR) are decided by a panel that includes the most senior PTAB judges, and to ensure that panels apply the law properly in instances where some members of the original panel appear to be applying the law improperly.

Setting aside the issue that discovery is generally directed at the petitioner or patent owner, not at the PTAB, discovery in IPRs is generally disfavored, and will not be granted absent meeting a set of factors called the Garmin factors.

The very first Garmin factor?  There must be “more than a possibility and mere allegation” that the discovery request will produce relevant and useful information.  But the Tribe hasn’t produced any evidence that there’s any ex parte conversations off-record, or anything else that would suffice to justify their implication that the PTAB is only going to rule against them because of financial and political interests.  They’re making baseless allegations and trying to obtain discovery based on those allegations.

The Tribe’s request is likely to be denied, and justifiably.  The sovereign immunity laundering tactic that Allergan is employing was always questionable.  The PTAB determining that it isn’t an acceptable tactic shouldn’t surprise anyone—and implying that the only reason the PTAB would rule that way is due to financial self-interest is the kind of thing you only do when you know you’re losing on the legal issues.

Joshua Landau

Joshua Landau is the Patent Counsel at the Computer & Communications Industry Association (CCIA), where he represents and advises the association regarding patent issues.  Mr. Landau joined CCIA from WilmerHale in 2017, where he represented clients in patent litigation, counseling, and prosecution, including trials in both district courts and before the PTAB.

Prior to his time at WilmerHale, Mr. Landau was a Legal Fellow on Senator Al Franken’s Judiciary staff, focusing on privacy and technology issues.  Mr. Landau received his J.D. from Georgetown University Law Center and his B.S.E.E. from the University of Michigan.  Before law school, he spent several years as an automotive engineer, during which time he co-invented technology leading to U.S. Patent No. 6,934,140.

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