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Federal Circuit Holds Tribal Immunity Does Not Bar IPR of Tribe-Owned Patents

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By Tyler J. Fortner and David G. Barker

Last week, the Federal Circuit held that tribal sovereign immunity does not apply to inter partes review (IPR) actions instituted at the Patent Trial and Appeal Board.  The decision, in Saint Regis Mohawk Tribe et al. v. Mylan Pharmaceuticals Inc., comes approximately a month and a half after a Federal Circuit panel heard the issue (see here).

The decision opens the door for generic drug manufacturers (including Mylan) and others to challenge the validity of patents owned by Native American tribes that enjoy sovereign immunity. During oral argument, Allergan and the Mohawk Tribe argued that the IPR process is akin to a civil lawsuit, from which tribes are immune.  In contrast, Mylan argued that the IPR process is closer to a federal regulatory proceeding to which immunity would not apply.  The Federal Circuit agreed with Mylan, holding that tribal immunity does not extend to IPRs.

Among other things, the court’s decision focuses on the United States Patent and Trademark Office’s broad discretion in deciding whether to institute a review, which is similar to other federal agencies that choose whether to institute a proceeding on information provided by a private party. The Supreme Court already has held that tribal sovereign immunity does not apply in such cases.  The Federal Circuit also noted that the role of the parties in the IPR process suggests that immunity does not apply.  That is, “[o]nce IPR has been initiated, the Board may choose to continue to review even if the petitioner chooses not to participate. . . .This reinforces the view that IPR is an act by the agency in reconsidering its own grant of a public franchise.”

If this decision stands, it may provide a considerable advantage to those seeking to challenge patents owned by Native American tribes and, conversely, a considerable loss for those attempting to avoid invalidation of their patents through transfers to Native American tribes.