PTAB Denies Sovereign Immunity Defense in St. Regis Mohawk Tribe / Allergan case

Allergan paid the Tribe a nonrefundable and non-creditable upfront amount of $13.75 million.

Tom Hochstatter - Managing Editor, IPWire by: Tom Hochstatter | February 23, 2018

In a race from novelty in drug therapies and medicine to the novelty of patent defenses, Allergan and its more recent bedfellow, The St. Regis Mohawk Tribe were dealt a significant blow on Friday from the Patent Trial and Appeal Board (PTAB). In a PER CURIAM decision from Judge’s Snedden, Hulse, Paulraj, the PTAB nixed the sovereign immunity cover due to the continued carried interest of Allergan – among other lingering issues detailed below.

From the decision (Paper 130, IPR2016-01127):

“Upon consideration of the record, and for the reasons discussed below, we determine the Tribe has not established that the doctrine of tribal sovereign immunity should be applied to these proceedings. Furthermore, we determine that these proceedings can continue even without the Tribe’s participation in view of Allergan’s retained ownership interests in the challenged patents. The Tribe’s Motion is therefore denied.”

Quick history of Allergan’s Legal Maneuvers at the PTAB

On September 8th, just a week before the scheduled hearing counsel for the St. Regis Mohawk Tribe contacted the court informing them that they had in fact acquired the patents in question and were immediately seeking permission to file a motion to dismiss based upon the Tribe’s sovereign immunity status. The PTAB honored the request and allowed the Tribe to file their motion to dismiss.

Then the PTAB, citing public interest in such a case, invited third parties to file amicus briefs in December – which they received more than a dozen from both sides “of the argument”.

Fast forward, the PTAB, citing Ericsson Inc. v. Regents of the University of Minnesota, Case IPR2017-01186, LSI Corp. v. Regents of the University of Minnesota, Case IPR2017-01068, allowed the Tribe and Petitioner to file supplemental briefs on “the applicability of litigation waiver to the Tribe’s claim of sovereign immunity.” which they both did provide.

A $13.75M Gambit – Lost

Friday comes and the motion is denied. Keep in mind another important fact – in exchange for the rights granted in the License, Allergan paid the Tribe a nonrefundable and non-creditable upfront amount of $13.75 million. This type of gamble may have been better spend straight gambling at a casino.

 

While (literally) no surprise to me or anyone in my company this defense boundary case is stopped in it tracks before it even gets started. So, a fair warning to the vocal IP activists that were shouting their “chicken little” script – a rational, open market – over time – tends to get things right over time and we don’t need a mad dash to Congress for immediate legislation.

Save that cry for real problems – perhaps the reduced spending among the (US) government’s esteemed R&D organizations or the reduced grants to the private sector, or cleaning up the America Invents Act. Let’s hope we get that soon enough from our friends over at SCOTUS on the Oil States case.

 

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