Patently Absurd: Critiquing the USPTO’s Disparate Treatment of Tribal and State Immunity in Inter Partes Review
Patently Absurd: Critiquing the USPTO's Disparate Treatment of Tribal and State Immunity in Inter Partes Review
Maya Ginga 0 1
0 Washington and Lee University School of Law , USA
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Follow this and additional works at: https://scholarlycommons.law.wlu.edu/wlulr Part of the Indian and Aboriginal Law Commons, and the Intellectual Property Law Commons Recommended Citation Maya Ginga, Patently Absurd: Critiquing the USPTO's Disparate Treatment of Tribal and State
Patently Absurd: Critiquing the
USPTO?s Disparate Treatment of Tribal
and State Immunity in Inter Partes
I. Introduction.................................................................... 1704?
* Candidate for J.D. May 2019. I would like to thank Professors
Shaughnessy and Seaman and the Washington and Lee Law Review Editorial
Board, specifically Aileen Almonte and Corey Lipschutz, for their editorial and
substantive guidance. Thank you, also, to my family for encouraging me to follow
my intellectual curiosities. I would like to dedicate this Note to Carl Frappaolo.
VI. Conclusion ...................................................................... 1776?
The U.S. biopharmaceut
ical industry?s profits in 2017
$453 billion.1 Innovative drug development and commercialization
is a major source of the industry?s profits.2 These medical advances
are due in large part to investment in time-consuming and costly
research and development efforts.3 Pharmaceutical companies
then protect their investment in research via intellectual property
rights?namely, patents.4 One such Irish-based biopharmaceutical
company, Allergan, Inc., grossed approximately $6.45 billion in
1. Global Pharmaceutical Sales From 2014 to 2016, STAT
(last visited Sept. 19, 2018)
(on file with the Washington and Lee Law
2. See Richard Anderson, Pharmaceutical Industry Gets High on Fat
Profits, BBC NEWS (Nov. 6, 2014), https://www.bbc.com/news/business-28212223
(last visited Sept. 19, 2018)
(discussing the pharmaceutical industry?s large profit
margins due to expensive drugs and low manufacturing costs) (on file with the
Washington and Lee Law Review).
3. See Richard Frank & Paul B. Ginsburg, Pharmaceutical Industry Profits
and Research and Development, BROOKINGS INST.
(Nov. 17, 2017)
(last visited Sept. 19, 2018)
(?[T]he cost of
bringing a new drug to market is very high and the process is risky.?) (on file with
the Washington and Lee Law Review); Robert Weisman, Cost of Bringing Drug to
Market Tops $2.5b, Research Finds, BOS. GLOBE (Nov. 18, 2014),
(last visited Sept. 10, 2018)
(estimating that bringing a new
drug to market costs approximately $2.5 billion dollars over the course of a
decade) (on file with the Washington and Lee Law Review).
4. See Frank & Ginsberg, supra note 3 (?[I]f free competition were
permitted, firms spending hundreds of millions of dollars to bring a new drug to
market would be unlikely to recoup those investments, as competition would drive
prices down to
.5 Allergan?s second-best-selling drug, a prescription eye-drop
medicine called Restasis, earned $1.4 billi
on in revenue in 2016
In theory, pharmaceutical companies? drug monopolies are
meant to incentivize medical breakthroughs,7 though in practice
the industry is frequently criticized for exploiting monopolies to
make windfall profits at the public?s expense.8 This has come about
in a number of forms. For instance, some firms pay generic drug
companies to delay selling bioequivalent versions of lucrative
medications once their patents expire in exchange for large
settlements, otherwise known by the shorthand phrase ?pay for
delay.?9 Another example that has gained popularity in recent
years is ?patent hopping.?10 This practice extends a drug?s patent
monopoly and blocks generic competition by slightly reformulating
the medication and filing for a new patent when a drug?s original
patent is close to expiration.11 Engendering consumer distrust and
5. Annual Financials for Allergan PLC, MARKETWATCH (2016),
(last visited Sept. 19, 2018)
(on file with the Washington and Lee Law
political backlash,12 manipulative practices like these drive legal
and policy developments both in antitrust and patent law.13
In contrast to highly profitable pharmaceutical companies,
many Native American nations suffer from crippling poverty and
lack of economic stimulation.14 A federally recognized tribe, the
Saint Regis Mohawk Tribe (the Tribe) is located in northern New
York, straddling the U.S. and Canadian border.15 The Tribe has an
unemployment rate double that of its neighboring county?itself
one of the poorest in the nation.16 The Saint Regis Mohawk Tribe?s
major source of revenue is the Akwesasne Mohawk Casino Resort,
bringing in about $19 million annually and employing 40% of its
12. See Andrew Pollack, Big Price Increase for Tuberculosis Drug Is
Rescinded, N.Y. TIMES (Sept. 21, 2015), https://www.nytimes.com/2015/09/22/
(last visited Sept. 19,
(quoting then-Democratic presidential candidate Hillary Clinton that
?[p]rice-gouging . . . in the specialty drug market is outrageous?) (on file with the
Washington and Lee Law Review).
13. See, e.g., New York ex rel. Schneiderman v. Actavis PLC, 787 F.3d 638,
(2d Cir. 2015)
(considering whether defendant drug company?s withdrawal of
an older drug from the market ?in order to force Alzheimer's patients who depend
on [the drug] to switch to [the newly patented version] before [the generic drug]
becomes available? is unlawfully anticompetitive); Levy, supra note 7, at 254
(discussing recent Supreme Court jurisprudence aiming to curb anticompetitive
practices within the pharmaceutical industry).
14. See Robert J. Miller, American Indian Entrepreneurs: Unique
Challenges, Unlimited Potential, 40 ARIZ. ST. L.J. 1297, 1298 (2008) (?American
Indians remain as a group the poorest of the poor in the United States.?); Dao Lee
Bernardi-Boyle, State Corporations for Indian Reservations, 26 AM. INDIAN L. REV.
41, 41 (2002) (?Reservation American Indians are among the poorest people living
in this country.?).
15. See Mylan Pharm. Inc. v. Saint Regis
Mohawk Tribe, No.
-01127, 2018 WL 1100950, at *2
(P.T.A.B. Feb. 23, 2018)
factual background and identity of the parties); Joe Jackson, A Native-American
Nation Divided, AL JAZEERA (Jan. 9, 2015), http://www.aljazeera.com/indepth/
visited Sept. 19, 2017)
(describing the jurisdictional split in the Saint Regis
Mohawk Tribe between United States and Canada) (on file with the Washington
and Lee Law Review).
16. Adam Davidson, Why Is Allergan Partnering with the St. Regis Mohawk
Tribe?, NEW YORKER
(Nov. 20, 2017)
visited Sept. 19, 2018)
(on file with the Washington and Lee Law Review).
staff with members of the Saint Regis Mohawk Tribe.17 Still, the
Tribe?s infrastructure struggles to support the community.18
These entities, comparatively, are two of the most and least
powerful in American society and seemingly share nothing in
common. That changed on September 8, 2017, when Allergan and
the Tribe announced an agreement to transfer six patents
protecting Restasis to the Saint Regis Mohawk Tribe.19
Lawmakers,20 judges,21 and practitioners22 immediately
questioned the legitimacy of the deal. Still, the deal was not
without its supporters23 and followers.24
The transaction received such a swift and polarizing response
because it aimed to shield the Restasis patents from an
administrative proceeding that could otherwise potentially bring
about the patents? cancelation.25 Briefly summarizing how this is
possible, a patent may be subject to a post-issuance review of
patentability even after the United States Patent and Trademark
Office (USPTO) grants a patent.26 Such ex post facto invalidation
can occur through a number of procedures, but generally speaking
can be adjudicated either by the Patent Trial and Appeals Board
(PTAB)27 at the request of any party,28 or in federal district court,
or both.29 In fact, parties almost systematically dispute patent
validity in two forums simultaneously?roughly 80% of PTAB
invalidation proceedings involve parallel proceedings in federal
23. See Petrarca, supra note 6, at 12 (arguing that because IPR
?diminishe[s]? patent protections, Allergan was rightly motivated to invent
methods to circumvent the proceeding altogether).
28. Id. ? 311(a) (?[A] person who is not the owner of a patent may file with
the Office a petition to institute an inter partes review of the patent . . . .?).
29. Id. ? 282(b)(2) (listing invalidity as a defense available against the claim
of infringement); see also Sovereign Immunity and the Intellectual Property
System: Hearing Before the Subcomm. on the Courts, Intellectual Property and the
Internet, 115th Cong. 1 (2017) (testimony of Professor Karl Manheim, Loyola Law
School) [hereinafter Professor Manheim Testimony] (?Once issued, patent
controversies can arise either in federal court or in the PTO.?).
Desmond O?Sullivan, PTAB Deals a Crippling Blow to Sovereign
Allergan sought to preemptively evade the PTAB?s
after-the-fact invalidation by transferring legal rights in the
patents to a sovereign entity, the Saint Regis Mohawk Tribe.31
Tribes, like other sovereign entities such as states or foreign
nations, generally enjoy immunity from suit.32 Allergan and Saint
Regis believed that because a suit against the Tribe (either an
administrative adjudication or civil litigation) as the patent holder
should be dismissed for lack of jurisdiction due to tribal
immunity,33 the drug?s intellectual property would remain
somewhat insulated from third party legal attacks.34
But even before the Tribe became the patent holder, Allergan
was involved in ongoing disputes with a number of generic drug
companies regarding the Restasis patents.35 The dispute developed
in two forums: one in the U.S. District Court for the Eastern
District of Texas36 and the other in a specialized PTAB
Immunity, LAW360 (Jan. 3, 2018, 4:37 PM), www.law360.com/articles/998503/
(last visited Sept. 19, 2018)
(on file with the Washington and Lee Law Review).
31. See Press Release, Allergan, Allergan and Saint Regis Mohawk Tribe
Announce Agreements Regarding RESTASIS? Patents
(Sept. 8, 2017)
visited Sept. 19, 2018)
[hereinafter Allergan Press Release] (?The Tribe, a
recognized sovereign tribal government, is filing a motion to dismiss the ongoing
inter partes review (IPR) of the RESTASIS? patents based on their sovereign
immunity from IPR challenges.?) (on file with the Washington and Lee Law
Allergan, Inc.?s Complaint for Patent Infringement, Allergan, Inc. v.
proceeding.37 Allergan initiated the litigation, suing a number of
generic companies in the Eastern District of Texas for infringing
the Restasis patents by filing for the right to manufacture a generic
bioequivalent version of drug.38 In response, the defendant generic
drug companies asserted the affirmative defense of invalidity?the
companies admitted to infringing Allergan?s patents, but claimed
that the patents were invalid.39 In the midst of the litigation,
Allergan moved to join the Tribe as party to the lawsuit after it
became the purported patent owner.40
As in most infringement suits,41 the generic pharmaceutical
companies subsequently initiated the proceeding at the PTAB.42
Those seeking to invalidate patents tend to prefer the PTAB
proceedings over district court litigation for a number of reasons.43
The petitioners filed a petition for inter partes review, a specialized
patent review proceeding conducted by the PTAB. Inter partes
review, or IPR, is a newly created and highly popular type of
proceeding that allows any party to challenge a patent?s validity.44
IPRs have garnered disagreements since their creation in 2011 by
the Leahy?Smith America Invents Act.45
Teva Pharm. USA, Inc., No. 2:15-CV-1455-WCB, 2017 WL 4619790, at *1
Tex. Oct. 16, 2017)
Allergan?s CEO is among those that disapprove of the new
reexamination process.46 As such, Allergan, with a history of
engaging in controversial business decisions, took affirmative
steps to protect its intellectual property rights.47 Apparently
inspired by a recent PTAB decision allowing a state university to
invoke immunity in IPR,48 Allergan agreed to transfer rights in the
Restasis patents to the Tribe for $13.75 million dollars.49 In return,
the Tribe agreed to invoke its sovereign immunity in IPR
In the light of the Allergan?Saint Regis deal, this Note argues
that the legal framework for sovereign immunity should be the
same with respect to state and tribal patent holders. Additionally,
this Note argues that because it is unlikely Congress possesses the
constitutional authority to abrogate state immunity, that the
that it violates Article III and the Seventh Amendment).
46. See Brent Saunders, Reverse Patent Trolls Are Harming Drug
Innovation?and Patients, WALL ST. J.
(Oct. 8, 2017, 2:33 PM)
(last visited Sept. 19, 2018)
(arguing that IPRs
?disadvantage . . . biopharma innovators and the patients they serve?) (on file
with the Washington and Lee Law Review).
47. See Dennis Crouch, Allergan: Creating Sovereign Immunity with Tribal
(Sept. 8, 2017)
(last visited Sept. 19, 2018)
(?Allergan is a
frequent player of jurisdictional games. Its corporate ?headquarters? is in Dublin
for the tax benefits, although it is ?actually? sited in New Jersey.?) (on file with the
Washington and Lee Law Review); Chelsea Naso, Pfizer, Allergan End $160B
Merger After New Inversion Regs, LAW360 (April 6, 2016, 7:01 AM),
(last visited Sept. 19, 2018)
(reporting that Pfizer and
Allergan?s anticipated merger that would save Pfizer $35 billion in U.S. taxes was
thwarted by the IRS) (on file with the Washington and Lee Law Review).
48. See Covidien LP v. Univ. of Fla. Research Found., Inc., IPR2016-01274,
2017 WL 4015009, at *11
(P.T.A.B. Jan. 25, 2017)
(dismissing IPR on state
immunity grounds when a third party petitioned for IPR review of a state
49. See Exhibit 2087 Patent License Agreement at 9, Mylan Pharm. Inc. v.
Allergan, Inc., Case IPR2016-01132
(P.T.A.B. Nov. 16, 2017)
Agreement] (stipulating the ?upfront payment? between Saint Regis Mohawk
Tribe and Allergan).
50. See SHORT FORM PATENT ASSIGNMENT 1?2 (2017),
(memorializing the patent assignment agreement between Allergan and the Saint
Regis Mohawk Tribe).
legislature should unequivocally extend state and tribal sovereign
immunity in IPRs. To argue this, this Note explores the policy
concerns and justifications of tribal and state immunity within
administrative patent review.
In addressing these concerns and justifications, Part II.A
discusses patent law?s central policy aims. At its core, patent law
aims to achieve the constitutional demand to balance incentivizing
invention against over-monopolizing patent rights for the benefit
of society.51 Part II.B then describes the administrative scheme
that governs patent rights. In particular, this legal background
will focus on the recent development of inter partes review as
instituted by the America Invents Act.52
Part III first discusses the history of tribal sovereign
immunity and its contemporary understanding. Specifically, this
historical analysis focuses on the congressional policy objective of
tribal self-determination.53 Second, Part III considers state
sovereignty, notably, the recent judicial reinforcement of state
sovereign immunity during the Rehnquist Court?s ?New
Federalism? Era.54 This discussion illuminates the differences
between the two sovereigns as stemming from their disparate legal
bases: tribal sovereignty was judicially created but long
understood as subject to congressional regulation55 whereas state
sovereignty is tethered to the Eleventh Amendment and largely
insulated from congressional control.56
Part IV then analyzes the long-term implications of the
Allergan?Saint Regis deal against this legal backdrop. Chiefly, the
analysis focuses on a critique of the PTAB and Federal Circuit?s
51. See infra Part II.A (discussing the constitutional and philosophical
justifications for the American patent regime).
52. Pub. L. No. 112-29, 125 Stat. 284 (2011) (codified in scattered sections of
28 and 35 U.S.C.).
53. See infra Part III.B (discussing the interplay between tribal economic
opportunities and immunity).
54. See In Defense of Tribal Sovereign Immunity, infra note 249 and
accompanying text (discussing a series of Supreme Court decisions during the
Rehnquist Court that bolstered state sovereign immunity).
55. See Michigan v. Bay Mills Indian Cmty., 134 S. Ct. 2024, 2030 (2014)
(?[T]ribes are subject to plenary control by Congress.?).
56. See discussion infra Part III.C (noting the decisions where the Court
struck Congress?s attempts to abrogate state immunity).
recent decisions in response to the Allergan?Saint Regis deal.57
The main shortcoming of the PTAB?s reasoning is an unexplained
departure from the existing, albeit developing, legal framework for
sovereign immunity in administrative patent proceedings.58 The
argument follows that the PTAB?s inconsistent treatment of tribes
and states is not premised on discernible legal or policy reasons.
The Federal Circuit, although identifying the proper legal
standard, misapplies it. This has led to states and tribes possessing
different rights within administrative patent reexamination.
Finding that sovereign patent owners are interchangeable under
the proper legal framework, this Note argues that their legal rights
within the patent administrative reexamination process should
likewise be identical.
Furthermore, the only governing body with the authority and
policymaking capability to address this inconsistency is
Congress.59 Moreover, if Congress precludes this maneuver
through legislation, it should not treat states and tribes
differently. Two justifications support this conclusion, one
pragmatic and one ethical. First, abrogating only tribal immunity
in PTAB reexamination hearings does not effectively close the
loophole because state universities will continue to successfully
assert immunity.60 Second, robbing only one sovereign of its
immunity privilege derogates Congress?s goal to incentivize tribal
self-determination and economic development?a grave
impairment to tribes? dignitary and financial interests.61
This leads to Congress?s second potential response: abrogating
neither tribal nor state immunity in IPR. Allowing a sovereign
entity to benefit from the patent system and simultaneously evade
unfavorable outcomes certainly seems unfair and undermines the
patent system because it forecloses the PTO from certain
procedures;62 however, every invocation of sovereign immunity at
the expense of the complaining party is inherently unfair.63 But
more importantly, any attempt to judicially curtail both
sovereigns? immunity would likely not withstand the Supreme
Court?s scrutiny. That is to say that if the Federal Circuit finds
that both tribal and state immunity is inapplicable in IPR,64 it is
likely that the Supreme Court would reverse only the restriction of
Furthermore, the Federal Circuit?s decision fails to consider
the implications on federal Indian law more broadly. An
unthinking condemnation of the Saint Regis deal conflates the
pharmaceutical industry?s pattern of dubiousness with tribal
economic diversification. Abrogation of sovereign immunity in
patent proceedings uniquely damages tribes because of the
difficulties that tribes face generating revenue. Congress should
capital is an essential ingredient for improving conditions on reservations.?).
62. See Professor Manheim Testimony, supra note 29 (advocating for
legislation that abrogates state and tribal immunity in IPR).
63. See SHORTELL, infra note 140 and accompanying text (noting that many
scholars denounce the doctrine of sovereign immunity because of its impact on
64. See Saint Regis Mohawk Tribe v. Mylan Pharm. Inc., 896 F.3d 1322, 1326
(Fed. Cir. 2018)
(holding ?that tribal sovereign immunity cannot be asserted in
IPRs); Brief of the States of Indiana, Hawaii, Illinois, Massachusetts, Texas,
Utah, and Virginia as Amici Curiae in Support of En Banc Rehearing at 1?2,
Saint Regis Mohawk Tribe v. Mylan Pharm., Inc., 896 F.3d 1322
(Fed. Cir. July
(No. 18-1638) [hereinafter State Amicus Brief Support En Banc
Rehearing] (supporting the Tribe for its application for a rehearing en banc due
to the likelihood that the Federal Circuit?s decision will also affect state immunity
in IPR). It should be noted that the litigation could unfold in a number of ways.
For instance, the Federal Circuit may reverse the PTAB?s holding during an en
banc rehearing. Alternatively, the Supreme Court may not grant certiorari for
either case. But in a number of different scenarios, the chance of differing legal
precedents concerning tribes and states is possible, if not likely.
65. See infra Part III.A?C (explaining the difference between tribal and state
sovereign immunity and Congress?s ability to affect each).
therefore allow continued invocation of sovereign immunity within
patent review in the name of continued tribal economic
II. Introduction to Patent Law
Normatively speaking, opposition to the Tribe?s motion to
dismiss the IPR proceeding stems from the concern that sovereigns
should not be able to evade the U.S. patent scheme that carefully
determines which inventions should benefit from protection.66 To
understand this concern, it is essential to begin by examining the
philosophical justifications for granting protection to patent
owners. Although it is perhaps impossible to discern a singular
justification for protecting intellectual property,67 utilitarianism is
the primary rationalization.68
A. Philosophical Justifications
Thomas Jefferson believed that ?an inventor ought to be
allowed a right to the benefit of his invention for some certain
time . . . . [I]ngenuity should receive a liberal encouragement.?69
Jefferson?s beliefs likely stemmed from intellectual property
66. See Professor Manheim Testimony, supra note 29 (?State and tribal
sovereign immunity in patent cases distorts the patent system and can lead to
anticompetitive conduct harming consumers and the public welfare.?).
67. See, e.g., Margaret Jane Radin, Property and Personhood, 34 STAN. L.
REV. 957, 957 (1982) (maintaining Hegel?s theory of personhood related to
property which argues that ?to achieve proper self-development?to be a
person?an individual needs some control over resources in the external
environment?); WILLIAM M. LANDES & RICHARD A. POSNER, THE ECONOMIC
STRUCTURE OF INTELLECTUAL PROPERTY LAW 4 (2003) (?Patent law [has] long been
defended by reference to Locke?s theory that labor creates an entitlement to its
68. See Abraham Bell & Gideon Parchomovsky, A Theory of Property, 90
CORNELL L. REV. 531, 542 (2005) (?[M]ost scholars today base their
understandings of property on a model where property is justified by
utilitarianism and defined by positive law rather than upon natural rights
69. Graham v. John Deere Co. of Kansas City, 383 U.S. 1, 8 (1966).
protections existing in English jurisprudence.70 Later, Jefferson?s
view on intellectual property, particularly the incentive theory,
was codified in the Constitution. The Patent and Copyright Clause
of Article I gives Congress the authority ?[t]o promote the Progress
of Science and useful Arts, by securing for limited Times to Authors
and Inventors the exclusive Right to their respective Writings and
Discoveries[.]?71 Unlike other rights, there is no natural right to
intellectual property.72 Rather, patent rights are
government-created rights. In creating the patent system, the
government generally seeks to advance two competing goals
which, when balanced, promote scientific advancement for the
benefit of society.73 These two competing goals are: promoting
invention and limiting diffusion costs.74 The following discussion is
a simplistic, but nevertheless helpful, description of the economic
justification for patent protections.
Patents, like other types of intellectual property, are ideas or
inventions that have been ?propertized.?75 Thus, patents are
subject to protection only under a formal legal regime.76 In other
words, patents are ?limited private monopol[ies].?77 Because ideas
and inventions are different from other commodities, they require
formalized protection to generate value for the inventor.78 The key
difference between inventions and other commodities is that
inventions are public goods whereas other commodities are private
goods?the former can be disbursed endlessly without cost
whereas the latter is a finite quantity, which the owner only grants
access to by selling it.79
Therefore, an unscrupulous copyist can steal an idea from its
original creator, circumventing any development costs, and selling
the embodiment of the idea into the market at a lower cost.80 This,
then, discourages the original inventor from investing time and
money into an invention that can easily be stolen. Without some
form of legal protection, scientific and artistic progress is impeded.
To accomplish this, the U.S. patent regime confers on its owner
?the right to exclude others from making, using, offering for sale,
or selling the invention throughout the United States.?81
However, unfettered monopolies would drive prices of public
goods above their marginal costs and thereby reduce access at the
detriment to society.82 The government, therefore, limits patent
monopolies by way of its duration and scope.83 The scope of
protection, for instance, does not extend to ?small details, obvious
improvements, or frivolous devices.?84 Rather, only those
inventions that contribute a truly novel, nonobvious contribution
inherent depletion sans formal protections and noting another examples of a
public good as national defense); Davidson, supra note 16 (?When it comes to
physical goods and land, property rights are usually fairly intuitive. But
intellectual property is inherently more arbitrary.?).
79. MENELL, ET AL., supra note 74, at 17?18.
80. See Frank & Ginsburg, supra note 3 (discussing the effect of patent
monopolies within the context of the pharmaceutical industry).
81. 35 U.S.C. ? 154(a)(1) (2012).
82. See Precision Instrument Mfg. Co. v. Auto. Maint. Mach. Co., 324 U.S.
806, 816 (1945) (?The far-reaching social and economic consequences of a
patent . . . give the public a paramount interest in seeing that patent
monopolies . . . are kept within their legitimate scope.?); LANDES & POSNER, supra
note 67, at 1 (?[E]nabling the creator of intellectual property to charge a price for
copies . . . in excess of his marginal cost, prevents access to (use of) the intellectual
property by persons who value that access at more than the marginal cost but less
than the price.?).
83. See MENELL, ET AL., supra note 74, at 19 (?One of the reasons that
intellectual property rights are limited to scope, duration, and effect is to balance
these costs and benefits.?).
84. Graham, 383 U.S. at 9.
are protected.85 Similarly, a patent monopoly is further controlled
by limiting its duration.86 Because innovation necessarily requires
a rich public domain, it is in society?s best interest to limit the
length of time inventions are protected to encourage others to
improve upon the invention without infringing.87
B. The Contemporary Patent System
Balancing these two objectives, however, is a tricky feat.88 The
difficulty of balancing incentives against over-monopolization is
evident in Congress?s numerous attempts to amend the USPTO?s
administrative proceedings throughout the twentieth century.89
Congress thus passed the 1952 Patent Act to address the concern
that the USPTO granted too many weak patents.90 The drafters
had the ambitious goal of overhauling the patent system and
?recogniz[ed that] patents are distinct from obnoxious monopolies
and are a reward or an inducement to bring forth new
knowledge.?91 The 1952 Act made significant improvements, such
as delineating distinct grounds for patentability that were
previously lacking.92 Nevertheless, the complaint about low quality
patents persisted despite the 1952 Act?s substantial contribution
to substantive patent law.93
Amidst these complaints, the first post-grant administrative
proceedings were created.94 Although litigants could always bring
an invalidation proceeding in district court, administrative
reexamination was meant to correct the USPTO?s errors more
efficiently and cheaply.95 The first post-grant examination
mechanism was created in 1980 by the Bayh-Dole Act.96 However,
the experiment was quickly met with criticism, particularly
because it operated largely like the initial patent prosecution.97
This meant that the party that requested reexamination was never
party to the proceeding, and hence could not argue for
invalidation.98 Addressing the concern, Congress again set out to
cure the plague of low quality patents through post-issuance
examination, this time involving third parties in the proceeding.99
This too was largely unsuccessful.100
The latest change came by way of the Leahy?Smith America
Invents Act (AIA) passed in 2011.101 The AIA amended and
expanded the previous post-grant review proceedings in several
significant ways.102 Relevant here, the Act replaced the former
inter partes reexamination proceedings with inter partes review.103
Congress passed the AIA with the purpose of ?establish[ing] a more
efficient and streamlined patent system that will improve patent
quality and limit unnecessary and counterproductive litigation
costs.?104 To achieve these ends, the AIA and the USPTO
structured IPRs with a number of procedural and substantive
changes to the prior reexamination procedure.
First, IPRs were meant to give ?broader participation rights?
to third parties.105 As such, IPRs allow any third party to assert
that the PTO should never have issued the patent in the first
instance?that is, to challenge the patent?s validity.106 IPRs also
allow joinder to an existing proceeding.107 Second, a patent holder?s
ability to amend her claim in an IPR, unlike in the former inter
102. See EDWARD D. MANZO, AMERICA INVENTS ACT?A GUIDE TO PATENT
LITIGATION AND PATENT PROCEDURE ? 15:1 (2016) (listing the PTAB?s four
post-grant review proceedings: ?(1) review adverse decisions of examiners upon
applications for patents pursuant to 35 U.S.C. ? 134(a); (2) review appeals of
reexaminations pursuant to ? 134(b); (3) conduct derivation proceedings pursuant
to ? 135; and (4) conduct inter partes reviews and post-grant reviews pursuant to
Chapters 31 and 32?); Sarah Tran, Policy Tailors and the Patent Office, 46 U.C.
DAVIS L. REV. 487, 498?99 (2012) (?The USPTO?s toolbox of new or fortified
proceedings . . . includes post-grant review, inter partes review, supplemental
examination, and derivation proceedings, as well as a transitional post-grant
review program for certain business methods patents.?).
103. See MANZO, supra note 102, ? 16:1 (describing the AIA?s procedural
changes to post-grant review proceedings).
106. See 35 U.S.C. ? 311(b) (2012) (?A petitioner in an inter partes review may
request to cancel as unpatentable 1 or more claims of a patent only on a ground
that could be raised under section 102 or 103 and only on the basis of prior art
consisting of patents or printed publications.?); Microsoft Corp. v. i4i Ltd. P?ship,
564 U.S. 91, 96 (2011) (?[A]n alleged infringer may assert the invalidity of the
patent?that is, he may attempt to prove that the patent never should have issued
in the first place.?).
107. See Saurabh Vishnubhakat, Arti K. Rai & Jay P. Kesan, Strategic
Decision Making in Dual PTAB and District Court Proceedings, 31 BERKELEY
TECH. L.J. 45, 58 (2016) (finding that permitting joinder and a lack of standing
creates ?opportunities for robust public participation?).
partes reexamination, is far more limited if not impossible.108
Third, IPRs are adversarial proceedings that more closely
resemble traditional litigation than its administrative
Still, there are significant substantive differences that
distinguish IPR from traditional litigation.110 For instance, the AIA
mandates a lower burden of proof than the district court?s ?clear
and convincing evidence? to a ?preponderance of the evidence?
standard.111 Additionally, the standard for claim construction in
IPR is the ?broadest reasonable construction in light of the
specification? standard.112 By contrast, a claim is assessed by its
?ordinary meaning . . . as understood by a person of skill in the art?
in federal court.113 Because a claim is given its ?broadest
reasonable construction,? in IPR it is more likely that the patent
will overlap with prior art,114 rendering the patent invalid.
The idea behind these changes was to create an adversarial
proceeding that allows third party challengers an efficient and
cost-effective means of challenging questionable patents.115 In
108. See Dolin & Manta, supra note 44, at 786 (?Th[e] radical shift from an
examinational to an adjudicatory model, which deprives the patentee of the actual
ability to continue its pas de deux with the PTO, is what separates inter partes
reexamination from IPR.?).
109. See 35 U.S.C. ? 316(a) (stating the Director is to promulgate regulations
for inter partes review proceedings that enact many features common to judicial
proceedings, including discovery, depositions, protective orders, the imposition of
sanctions, and an oral hearing); H.R. REP. NO. 112-98, at *46, 2011 U.S.C.C.A.N.
67, 77 (?The Act converts inter partes reexamination from an examinational to an
110. See Cuozzo Speed, 136 S. Ct. at 2143 (?[I]nter partes review is less like a
judicial proceeding and more like a specialized agency proceeding.?); Tran, supra
note 102, at 496 (?The [AIA] requires the USPTO, rather than the courts, to make
core judgments that affect patent policy and substantive patent rights.?).
111. See 35 U.S.C. ? 316(e) (2012) (?[T]he petitioner shall have the burden of
proving a proposition of unpatentability by a preponderance of the evidence.?).
112. 37 C.F.R. ? 42.100(b) (2016).
Cuozzo Speed, 136 S. Ct. at 2142.
114. See 35 U.S.C. ? 102 (2012) (defining ?prior art? as an ?invention [that]
was patented, described in a printed publication, or in public use, on sale, or
otherwise available to the public? before an inventor applies for a patent).
115. See Vishnubhakat et al., supra note 107, at 45 (?A major normative
argument for administrative ex post review is that it should be an efficient,
accessible, and accurate substitute for Article III litigation over patent validity.?).
within the meaning of the tribal sovereign immunity doctrine.370
The Board thereafter employs the very same comparative analysis
as in Covidien, comparing IPR to the traditional litigation, but
reaches a wholly different conclusion?ultimately finding that
tribal immunity does not apply to IPR.371
This conflicting outcome is perplexing. Whether IPR is similar
to civil litigation should not turn on which sovereign is asserting
immunity. Either IPR is sufficiently similar to civil litigation to
require application of the immunity doctrine or it is insufficiently
similar. To rationalize this flagrant contradiction, the panel rightly
notes that tribal and state immunity are not identical.372 Indeed,
Part III.A and C of this Note explore those differences. Yet, none
explain why one sovereign patent owner should fare differently in
an administrative patent reexamination hearing than another.
Additionally, the panel states that the Supreme Court and
Congress are silent as to tribal sovereign immunity in IPR.373 But
neither the Court nor Congress has spoken to the applicability of
state immunity in IPR, yet the PTAB nevertheless found Eleventh
Amendment immunity applicable.374
Second, the PTAB?s decision effectively abrogates tribal
immunity via an interpretation of congressional silence. The Court
ordinarily refuses to read de facto abrogation into a generally
applicable statute.375 Such an interpretation is at odds with the
widely accepted rule of construction that congressional abrogation
must be explicit.376 It is true that generally applicable laws
ordinarily apply to Native American tribes, but this is not the same
thing as congressional waiver, or abrogation.377 That is, Congress
can pass a generally applicable law that applies to Indian tribes
without authorizing private suits against tribes to enforce the
statute.378 In fact, federal courts have considered this dynamic in
the context of the Patent Act?concluding that no reference to
tribes within the Patent Act warrants tribal immunity during
patent infringement suits.379
D. The Federal Circuit Applies FMC to IPR
In July, 2018, the Federal Circuit largely upheld the PTAB?s
denial of the Tribe?s motion to dismiss based on sovereign
immunity grounds. The key difference, though, is that the Panel
admitted, unlike the PTAB, that ?[a]lthough the precise contours
of tribal sovereign immunity differ from those of state sovereign
immunity, the FMC analysis is instructive.?380 Nevertheless it
a sweeping change in the status of tribal government and reservation Indians had
been contemplated by Congress.?); Smith, supra note 181, at 21 (?Absolute
[statutory] silence, of course, deposes of the issue altogether.?).
376. See supra Part III.A (discussing congressional abrogation of tribal
377. See Fed. Power Comm?n v. Tuscarora Indian Nation, 362 U.S. 99, 116
(1960) (?[I]t is now well settled by many decisions of this Court that a general
statute in terms applying to all persons includes Indians and their property
378. See Bassett v. Mashantucket Pequot Tribe, 204 F.3d 343, 357 (2d Cir.
2000) (?[T]he fact that a statute applies to Indian tribes does not mean that
Congress abrogated tribal immunity in adopting it.?).
379. See Home Bingo Network v. Multimedia Games, Inc., No. 1:05-CV-0608,
2005 WL 2098056, at *1 (N.D.N.Y. Aug. 30, 2005) (?Plaintiff points to no authority
that Congress has expressly waived tribal immunity with respect to the
enforcement of patents.?); Specialty House of Creation, Inc. v. Quapaw Tribe, No.
10-CV-371-GKF-TLW, 2011 WL 308903, at *1 (N.D. Okla. Jan. 27, 2011) (?[T]his
court concludes that the Quapaw Tribe is immune from private suits under
federal patent law.?).
380. Saint Regis Mohawk Tribe v. Mylan Pharm. Inc., 896 F.3d 1322, 1326
(Fed. Cir. 2018)
concluded that IPR is sufficiently distinct from civil litigation that
tribal immunity does not apply.381
The Federal Circuit also had the benefit of two influential
Supreme Court decisions decided after the PTAB?s Saint Regis
Mohawk decision that shed more, albeit conflicting, light on the
degree to which IPR is similar to civil litigation.382 Oil States,
mentioned supra, reinforced that it is within the government?s
authority to reconsider its own prior issuance of a public right.383
Within the framework of FMC, the Federal Circuit found this
suggests IPR is not a dispute between two private parties, but
principally one between the government and the patent holder.384
On the same day as Oil States, the Court held in SAS Institute,
Inc. v. Iancu (?SAS?)385 that the Director does not have the
discretion to hear some of a petitioner?s claims and dismiss others,
but must issue a written decision on all claims.386 SAS had the
effect of significantly limiting the PTO Director?s authority.387
Therefore, ?it?s the petitioner, not the Director, who gets to define
the contours of the proceeding.?388 This has major implications for
the analysis in Saint Regis Mohawk because it suggests that the
381. See id. at *2 (?IPR is neither clearly a judicial proceeding instituted by a
private party nor clearly an enforcement action brought by the federal
382. See id. (discussing Oil States Energy Services, LLC v. Greene?s Energy
Group, LLC, 138 S. Ct. 1365 (2018) and SAS Institute, Inc. v. Iancu, 138 S. Ct.
383. See Oil States Energy Servs., LLC v. Greene?s Energy Grp., LLC, 138 S.
Ct. 1365, 1373 (2018) (?[T]he public-rights doctrine applies to matters ?arising
between the government and others, which from their nature do not require
judicial determination and yet are susceptible of it.??).
384. See Saint Regis Mohawk Tribe, 896 F.3d, at 1327 (?[T]he [Oil States]
Court emphasized the government?s central role in IPR and the role of the USPTO
in protecting the public interest.?).
387. See Oral Argument at 21:33, Saint Regis Mohawk
Tribe v. Mylan Pharm.
Inc., No. 2018
-1638, 2018 WL 3484448
(Fed. Cir. July 20, 2018)
https://www.courtlistener.com/audio/36881/saint-regis-mohawk-tribe-v-mylanpharmaceuticals-inc/ (probing the appellee?s attorney whether filing a complaint
in federal court and filing a petition at the PTO differs after SAS).
SAS Inst., Inc. v. Iancu, 138 S. Ct. 1348, 1355 (2018).
PTAB, much like an Article III judge must adjudicate a plaintiff?s
complaint, must issue a written decision on all the petitioner?s
claims.389 Yet the Federal Circuit found that although the
Director?s discretion is curtailed under SAS, he still makes the
pivotal decision of whether to institute review.390 Therefore, in
theory, the Director has the capability to weigh the political
considerations of whether to initiate IPR review of a patent held
by a sovereign.391 Practically speaking, whether this balancing
actually occurs?and whether the same balancing considerations
are engaged when considering state versus tribal immunity?is
Like the Panel?s overly formalistic consideration of SAS, it also
misses the spirit of FMC by focusing too narrowly on minor
procedural differences between IPR and civil litigation.392 In FMC,
the Court used the similarity of procedures as helpful
benchmarks,393 but also took note of the broader similarities that
were pertinent to the central concern??whether they are the type
of proceedings from which the Framers would have thought the
States possessed immunity when they agreed to enter the
Union.?394 Borrowing from a case where the Court decided that
Administrative Law Judges possess absolute immunity like Article
III judges for their judicial decisions, the Court observed:
[F]ederal administrative law requires that agency adjudication
contain many of the same safeguards as are available in the
judicial process. The proceedings are adversary in nature. They
are conducted before a trier of fact insulated from political
influence. A party is entitled to present his case by oral or
documentary evidence, and the transcript of testimony and
exhibits together with the pleadings constitute the exclusive
record for decision. The parties are entitled to know the findings
and conclusions on all of the issues of fact, law, or discretion
presented on the record.395
Undoubtedly, IPR features much of these same broader
characteristics. But the Panel?s analysis obscures the practical
reality that IPR has the spirit of an adversarial proceeding. As a
result, it has ?many of the usual trappings of litigation,?396 without
Another shortcoming of the Federal Circuit?s decision is the
absence of any mention of Vas-Cath,397 which was itself a Federal
Circuit decision that influenced the PTAB?s findings for state
immunity.398 Each proceeding at the PTO can be understood on a
continuum between inquisitorial and adversarial. On the far left
side, proceedings like ex parte reexamination are plainly
inquisitorial and therefore do not implicate sovereign immunity.399
On the right side of the continuum are those proceedings that are
unmistakably adversarial.400 But many proceedings fall
somewhere in the middle, forcing courts to engage in the practice
395. See id. (citing Butz v. Economou, 438 U.S. 478 (1978)).
396. SAS Inst., Inc. v. Iancu, 138 S. Ct. 1348, 1353?54 (2018).
397. 473 F.3d 1376
(Fed. Cir. 2007)
399. See 35 U.S.C. ? 302 (2012) (?Any person at any time may file a request
for reexamination by the Office of any claim of a patent on the basis of any prior
art . . . .?); Saint Regis Mohawk Tribe v. Mylan Pharm. Inc., 896 F.3d 1322, 1329
(Fed. Cir. 2018)
(?The Tribe acknowledged that sovereign immunity would not
apply in ex parte or inter partes reexamination proceedings because of their
400. There is no administrative patent proceeding in which immunity
definitely applies. However, clearly the most adversarial patent proceeding in
which sovereign immunity applies would be district court litigation. See Fla.
Prepaid Postsecondary Educ. Expense Bd. v. Coll. Sav. Bank, 527 U.S. 627, 635
(1999) (finding unconstitutional a statute abrogating state immunity in patent
disputes and thus allowing states to assert immunity in patent litigation); Tegic
Commc?ns Corp. v. Bd. of Regents of Univ. of Texas Sys., 458 F.3d 1335, 1344?45
(Fed. Cir. 2006) (finding that plaintiff was barred from bringing a declaratory
action against a state patent holder).
of line-drawing and resulting in a handful of contradicting
Here, Saint Regis Mohawk and Vas-Cath further compound
these inconsistencies. But rather than clarify the apparent conflict,
the Federal Circuit ignored this precedent entirely. Because
Vas-Cath concerned an interference proceeding rather than IPR,
and because the case dealt directly with the issue of waiver and
not applicability of sovereign immunity, it does not explicitly
control the outcome of Saint Regis Mohawk.402 Still, the Vas-Cath
holding inescapably implied that sovereign immunity applies to
interference proceedings.403 It seems that interference proceedings
fall to the right of IPR on the inquisitorial?adversarial continuum
(meaning interference and derivation proceedings are more
adversarial than IPR) because the petitioner has a stake in the
dispute, whereas in IPR the petitioner may lack constitutional
standing.404 But rather than address and distinguish Vas-Cath
head on, the Federal Circuit failed to cite or discuss it at all.
Perhaps wary of the discrepancy between the PTAB?s state
immunity decisions and the Saint Regis Mohawk holding, the
Federal Circuit interestingly concluded, ?[w]hile we recognize
there are many parallels, we leave for another day the question of
whether there is any reason to treat state sovereign immunity
401. Compare Oil States Energy Servs., LLC v. Greene?s Energy Grp., LLC,
138 S. Ct. 1365, 1373 (2018) (emphasizing that it is within the USPTO?s authority
to reexamine and cancel patent rights and therefore that IPR does not violate
Article III), and Cuozzo Speed Techs., LLC v. Lee, 136 S. Ct. 2131, 2143?44,
(2016) (distinguishing IPR from civil litigation to find that the PTO was
reasonable for imposing a different standard of proof in IPR than in litigation),
with Iancu, 138 S. Ct. at 1352 (explaining that IPR ?mimics? civil litigation).
402. See supra Part IV (discussing Vas-Cath and its effect on the
intersection of sovereign immunity and IPR).
403. See, e.g., Reactive Surfaces Ltd. v. Toyota Motor Corp., No.
IPR2016-01914, 2017 WL 2992429, at *2?3
(P.T.A.B. July 13, 2017)
Vas-Cath?s finding that sovereign?s are immune from interference proceedings to
conclude that states are likewise immune from IPR).
404. Compare 35 U.S.C. ? 135(a)(1) (2012) (?An applicant for patent may file
a petition with respect to an invention to institute a derivation proceeding in the
Office.? (emphasis added)), with id. ? 311 (?[A] person who is not the owner of a
patent may file with the Office a petition to institute an inter partes review of
differently.?405 Because the Federal Circuit evaluated tribal
immunity under the FMC standard, which was originally created
to determine applicability of state immunity in administrative
proceedings, it seems nearly impossible that the court will come to
a different conclusion if and when it considers the issue of state
immunity in IPR.406 But the difficulty and capaciousness of
determining whether IPR is akin to civil litigation, together with
the federalism implications inherent in the federal government?s
affecting a state patent holder,407 suggests that continuing
application state but not tribal immunity in IPR is not a foregone
Illustrating this point, Senator McCaskill introduced a bill
directly in response to the announcement of the Allergan?Saint
Regis deal that would abrogate only tribal immunity in IPR.408
Additionally, the issue of whether a state university waives its
Eleventh Amendment immunity in IPR by filing an infringement
suit in federal court is unfolding at the time of publication.409 As
such, the potential for disparate and conflicting legal standards
regarding states and tribes, and their corresponding immunity
405. Saint Regis Mohawk Tribe, 896 F.3d at 1329.
406. See State Amicus Brief Support En Banc Rehearing, supra note 64, at
1?2 (filing an amicus brief in support of an en banc rehearing because of the
likelihood that the Federal Circuit?s Saint Regis Mohawk decision will affect state
immunity in IPR).
407. Note that under FMC, the federal government can institute a proceeding
against a state. See Fed. Mar. Comm?n v. S.C. State Ports Auth., 535 U.S. 743,
764 (2002) (?[T]he States have consented to actions brought by the Federal
Government.?). Still, the Court?s recent state immunity jurisprudence is
increasingly sensitive to the federal government?s encroachment on state
authority. See Christopher G. Paulraj, Federal Maritime Commission v. South
Carolina State Ports Authority: Extending the States? Sovereign Immunity to
Administrative Adjudications, 55 ADMIN. L. REV. 679, 680 (2003) (?[T]he Supreme
Court has extended the principles of federalism to unprecedented new heights,
resulting in a drastic curtailment of the federal government?s ability to regulate
the states and their instrumentalities.?).
408. See S. 1948, 115th Cong. (1st Sess. 2017) (?Notwithstanding any other
provision of law, an Indian tribe may not assert sovereign immunity as a defense
in a review that is conducted under chapter 31 of title 35, United States Code.?).
409. See Ericsson Inc. v. Regents of Un
iv. of Minn., No. IPR2017
WL 6517563, at *2
(P.T.A.B. Dec. 19, 2017)
(?[W]e determine . . . 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.?).
within patent administrative adjudication, is growing ever
complex. To ensure uniformity both in law and policy, Congress is
the organ of government best equipped to address the applicability
of sovereign immunity in administrative patent review.
Abrogating immunity should not be taken lightly, as
evidenced by Congress?s continued reluctance to do so.410 This is
especially true in the area of Indian law. The Supreme Court
repeatedly emphasizes that ?federal encroachment upon Indian
tribes? natural rights is a serious undertaking.?411 The trepidation
with which the Court approaches sovereign immunity reflects an
understanding that Congress?s decision not to abrogate is
purposeful, not accidental.412
Furthermore, tribal immunity is one narrow legal principle
embedded within a far-reaching socio-political landscape?one
which oftentimes robs tribes of other opportunities for economic
development.413 The PTAB and the Federal Circuit, in considering
just the isolated issue of tribal immunity in IPR, unavoidably
misses the broader political ramifications of its decision.
The proceeding discussion examines the broader implications
of the PTAB and Federal Circuit?s decisions. In doing so, this Note
argues that Congress should not legislate differently with respect
to tribes and states in IPR proceedings?whether it upholds
immunity for both governmental units or forecloses each from
asserting immunity in IPR. This discussion offers a potential
avenue for congressional abrogation of both tribes and states
despite Congress? constitutional constraint to affect state
V. Sovereign Patent Holders in IPR
That the PTAB has held that state universities, but not tribes,
are immune from inter partes review is illogical from both a legal
and policy standpoint. The PTAB?s finding, affirmed by the Federal
Circuit, that tribal sovereign immunity does not apply to IPR
creates a disparity between the two sovereigns unsupported by any
meaningful justification.414 What is more, this differential
treatment does little to abate the legitimate concern that sovereign
immunity in IPR manipulates the U.S. patent regime because
state universities continue to enjoy immunity from IPR review.
The Board misconstrued any differences between tribal and
state immunity in finding that tribal immunity is inapplicable to
IPR.415 Furthermore, although not so flagrantly treating tribes and
states differently, the Federal Circuit did little to clarify earlier
decisions upholding Eleventh Amendment immunity patent
administrative proceedings and declining to extend tribal
immunity to IPR.416 As described in Parts II and III, tribal and
state sovereign immunity are indeed different in some
respects?the most important difference being Congress?s ability
(and inability) to affect the scope of their sovereignty. But those
differences are not significant, let alone dispositive, in the context
of patent reconsideration.
Amici supporting the petitioner generic drug companies
lumped the two sovereigns together in their argument that ?a
State or a Tribe may, on the one hand, take full advantage of the
remedies and benefits afforded the patent owner, but yet use
sovereign immunity to escape IPR.?417 Additionally, a number of
states have filed an amicus brief supporting the Tribe?s petition for
en banc reconsideration, arguing that the Panel misapplied FMC
and the decision gravely harms states and tribes.418 This
demonstrates that opponents of sovereign immunity in IPR place
no significance on whether the entity is a state or a tribe?both are
equally damaging to the patent system. Similarly, states are wary
that exclusion of tribal sovereign immunity presupposes the same
fate for state sovereign immunity in IPR. As such, states and tribes
are fungible, that is, interchangeable in their participation in IPR
as patent holders.419
Accepting that patent owners are fungible, there is no policy
reason for state and tribal patent owners to possess different legal
rights during administrative patent reexamination hearings.
Either shielding patent rights intolerably harms the patent system
or immunity is necessary to protecting sovereign dignity.
To correct the currently disparate treatment of each sovereign
within IPR, Congress should speak to this issue unequivocally and
uniformly. Accepting that Congress has the authority to abrogate
tribal immunity, the proceeding analysis explores one avenue
which Congress may utilize to abrogate state immunity. It is
therefore arguable that Congress has the authority to abrogate
both state and tribal immunity in IPR to prevent evasion of the
PTO?s administrative reexamination system.420
A. Congressional Abrogation of Tribal and State Immunity in
Inter Partes Review
To take this position, this Note argues that state sovereign
immunity may not apply in IPR at all because the PTAB?s
jurisdiction is a species of in rem jurisdiction. This analysis is
similar to the FMC standard: that application of the immunity
presumption turns on ?whether [it is] the type of proceedings from
which the Framers would have thought the States possessed
immunity when they agreed to enter the Union.?421 But instead of
observing the similarities and differences between IPR and civil
litigation, comparing the similarities between a bankruptcy court?s
in rem jurisdiction over debts and the PTAB?s jurisdiction over
patents demonstrates a lack of the state immunity presumption.
The following discussion considers the similarities and
differences between in rem jurisdiction and the PTAB?s
jurisdiction, ultimately finding that there is a legitimate argument
that PTAB jurisdiction inheres no state immunity presumption.422
The similarities between a bankruptcy proceeding and IPR
flow from the fact that both are types of in rem jurisdiction.423 Like
a bankruptcy court?s jurisdiction over an individual?s assets, the
USPTO has jurisdiction over patent reexamination claims because
of the patent, irrespective of the identity of the patent holder.424
Put differently, the PTAB has jurisdiction over ?the res, not on the
persona.?425 Additionally, the Director does not require the patent
owner?s continued participation to have jurisdiction over the
patent,426 much like a bankruptcy court need not join every
creditor to discharge the debtor?s liabilities.427
Both the PTAB and the Federal Circuit support this
argument. In the PTAB?s decision denying the Tribe?s motion to
terminate, it stated that ?Congress has enacted a generally
applicable statute providing that any patent (regardless of
ownership) is subject to the U.S. patent regime.?428 Similarly,
reinforcing the majority holding that tribal immunity is
inapplicable in IPR because the USPTO?s reexamination is
sufficiently dissimilar to civil litigation, Judge Dyk noted in his
concurrence that ?the Supreme Court has held that ?adversarial
proceedings? that do not involve the exercise of personal
jurisdiction do not necessarily raise sovereign immunity
The differences between PTAB jurisdiction and in rem
jurisdiction, however, highlight the weaknesses in this
comparison. Thus, there is a significant likelihood that if Congress
were to statutorily eliminate state immunity in IPR, the Supreme
Court would find the abrogation unconstitutional. The most
notable difference between a bankruptcy discharge and a patent
invalidation is that a bankruptcy discharge cancels the debtor?s
liability against the entire world,430 whereas a patent invalidation
does the opposite?the invalidation renders the invention
available to the entire world by entering the invention into the
public domain.431 Second, the very name of the proceeding, inter
426. See 35 U.S.C. ?? 317(a), 318(a) (2012) (?If no petitioner remains in the
inter partes review, the Office may terminate the review or proceed to a final
written decision . . . .? (emphasis added)).
427. See Hood, 541 U.S. at 447 (describing bankruptcy procedures which
allows the bankruptcy court to discharge the debtor?s liability despite an absence
of creditor claimants); In re Collins, 173 F.3d 924, 928
(4th Cir. 1999)
of course, well may choose not to appear in federal court.?).
428. Mylan Pharm. Inc. v. Saint Regis
Mohawk Tribe, No. IPR2016
2018 WL 1100950, at *4
(P.T.A.B. Feb. 23, 2018)
429. Saint Regis Mohawk Tribe, 896 F.3d, at 1333 (Dyk, J., concurring).
430. See MOORE, ET AL., supra note 261, ? 6.21 (describing the nature of in rem
431. See Covidien LP v. Univ. Fla. Research Found. Inc., No. IPR2016-01274,
2017 WL 4015009, at *6
(P.T.A.B. Jan. 25, 2017)
(?[T]he term inter partes means
between the parties, which in itself captures the notion that the proceeding is
partes, indicates that the proceeding is adversarial in nature.432
The Hood Court examined this point only as to the specific
proceeding at issue?an ?adversary proceeding,? and found that
despite its name and notice of process on the state, the Bankruptcy
proceeding was not in fact a ?suit? within the meaning of the
Eleventh Amendment.433 Third, and least compelling, the PTAB?s
authority touches the patent holder herself in its estoppel
provisions.434 The rules governing estoppel, however, only extend
the PTAB?s jurisdiction to the patent owner in so far as she is
estopped from acting inconsistently with an adverse board decision
relative to patents that are substantially similar.435
Ultimately, this argument faces a number of obstacles. In
general, the Court?s protection of state immunity based in
federalism suggests congressional abrogation of state immunity
would be unsuccessful.436 Additionally, the Court?s decision in
Florida Prepaid is more on point than Hood.437 Although the
procedural touchstones of an in rem proceeding are present in IPR,
IPR is clearly substantively similar to patent litigation. Because
these difficulties are specific to state immunity, any attempt to
abrogate both state and tribal immunity would likely lead to the
same discrepant treatment that exists under the current law.
directed to both parties over whom the Board exercises jurisdiction.?).
432. See id. at *8, (?Patent Owner argues that, under the enacted rules, inter
partes review is similar to civil litigation . . . because inter partes reviews are
adversarial ?contested cases between a patent owner and a petitioner . . . .??).
433. See Tenn. Studen Assistance Corp. v. Hood, 541 U.S. 440, 452 (2004) (?In
this case, however, there is no need to engage in a comparative analysis to
determine whether the adjudication would be an affront to States? sovereignty.
As noted above, we have long held that the bankruptcy courts? exercise of in rem
jurisdiction is not such an offense.?).
434. See 37 C.F.R. ? 42.73(d)(3) (2018) (?A patent applicant or owner is
precluded from taking action inconsistent with the adverse judgment, including
obtaining in any patent.? (emphasis added)).
435. See id. ? 42.73(d)(3)(i) (extending a PTAB invalidation only over patents
that ?[a] claim that is not patentably distinct?).
436. See supra Part III.C (discussing Seminole Tribe and Florida Prepaid,
making the point that Congress has been unsuccessful at abrogating state
437. See Fla. Prepaid Postsecondary Educ. Expense Bd. v. Coll. Sav. Bank,
527 U.S. 627, 635 (1999) (finding that the Patent Clause does not give Congress
authority to abrogate state immunity).
B. Maintaining Tribal and State Immunity in IPR
Congress can also elect not to limit sovereign immunity in IPR.
The obvious difficulty in considering whether to abrogate any
sovereigns? immunity is the potential unfairness to plaintiffs, or
here, petitioners seeking patent review.438 In the context of patent
review, this concern is exasperated by the sense that sovereigns
are undermining the patent system as a whole and, in effect,
weakening the quality of patents. In the case of the Saint Regis
Mohawk Tribe, this seems especially unfair because, unlike state
universities that are involved in developing the underlying
technology, here the Tribe?s only contribution to the transaction is
their sovereign status and concomitant immunity.439
This is because the FMC framework accounts for only the
primary justification for sovereign immunity?dignitary
interests?with little if no attention given to the secondary
justification, financial interests.440 Shifting focus to protecting a
sovereign?s financial interest, it becomes less objectionable to allow
tribes to strategically ?rent? their immunity in exchange for
lucrative patent rights.
Keeping in mind the often-forgotten justification for sovereign
immunity to protect a sovereign?s economic interests, with special
attention given to tribes? desperate need for economic
diversification, invocation of tribal immunity in IPR is more
defensible. States continue to enjoy sovereign immunity after
Florida Prepaid in patent disputes, and now also within IPR at the
PTO.441 Why unequally disadvantage tribes, especially where their
opportunities for economic diversification are so limited?
438. See Lundgren, 187 Wash. 2d at 877 (Gonzales, J., dissenting)
(characterizing the majority?s analysis as misplaced because of a ?desire to reach
the merits of the action so that both parties can have their day in court? instead
of the threshold question of whether a sovereign is an indispensable party).
439. See Crouch, supra note 47 (?Of course, a major difference with the
university situation is that the university patents are the outcome of original
440. See Fed. Mar. Comm?n v. S.C. State Ports Auth., 535 U.S. 743, 760 (2002)
(?The preeminent purpose of state sovereign immunity is to accord States the
dignity that is consistent with their status as sovereign entities.?).
441. See Covidien LP v. Univ. Fla. Research Found. Inc., No. IPR2016?01274,
2017 WL 4015009, at *17
(P.T.A.B. Jan. 25, 2017)
(dismissing petitions for review
Despite Congress?s push towards tribal economic
independence, tribes continue to struggle generating sufficient
economic support for such basic infrastructural needs like paved
roads, housing, sewage systems, and steady electricity.442 This
chronic economic underdevelopment is due in part, although
certainly not entirely,443 to certain tax policies: the unavailability
of tax exempt bonds for tribes444 and states? authority to collect
taxes from on-reservation mineral leases.445 Generally,
governmental entities finance projects in one of three ways: (1) tax
revenue, (2) debt instruments, such as bank loans or bond
of University of Florida?s patent on Eleventh Amendment immunity grounds).
442. See Clarkson, supra note 165, at 1012?13 (describing tribal governments?
reliance on federal grants rather than tax free bonds that most state and
municipal governments rely on to improve infrastructure).
443. Because the federal government holds most tribal lands in trust, this
prevents tribes from using that land either as collateral to secure bank loans or
to collect taxes. See Clarkson, supra note 165, at 1016?17 (?Given that the federal
government holds most tribal land in trust, those lands are not available for
property taxes, and thus the tax base of a tribe is usually insufficient for a tribe
to issue general obligation bonds.?); OFFICE OF THE COMPTROLLER OF THE
CURRENCY, COMMERCIAL LENDING IN INDIAN COUNTRY: POTENTIAL OPPORTUNITIES
IN A GROWING MARKET 7 (2016),
[hereinafter COMPTROLLER LENDING MANUAL] (?Tribal trust lands generally may
not be sold, taxed, or encumbered, requiring a different process to secure and
perfect a bank?s mortgage liens on real property.?). Additionally, there is a
separate but interrelated issue of tribal jurisdiction over criminal trials of
non-Indians leading to widespread abuse and community safety degradation. See
Oliphant v. Suquamish Indian Tribe, 435 U.S. 191, 195 (1978), overruled in part
by United States v. Lara, 541 U.S. 193 (2004) (?We granted certiorari . . . to decide
whether Indian tribal courts have criminal jurisdiction over non-Indians. We
decide that they do not.?); Jessica Rizzo, Native American Women Are Rape
Targets Because of a Legislative Loophole, VICE (Dec. 16, 2015, 11:00 AM),
(last visited Sept. 19, 2018)
(?Eighty percent of the reported sexual violence against Native women is
committed by white men, who do so with virtual criminal impunity because, with
very few exceptions, they cannot be tried in tribal courts.?) (on file with the
Washington and Lee Law Review).
444. See 26 U.S.C. ?? 103, 7871(c)(1) (2012) (regulating tax-exempt bonds for
states and tribes, but stipulating that tribes only issue tax-exempt bonds to ?be
used in the exercise of any essential governmental function?).
445. See Cotton Petroleum Corp. v. New Mexico, 490 U.S. 163, 176 (1989)
(considering whether the ??multiple burden? imposed by the state and tribal taxes
issuances, and (3) federal grants.446 Two of these three major
sources of funding are impeded as a matter of law for tribal
Because of additional restrictions on tribal tax-free bonding
that do not apply to states, tribes have far less access to capital
markets than states or other governmental entities.447 Tax-exempt
bonds are established by ? 103 of the Internal Revenue Code and
are at the heart of state and municipal financing for any number
of public projects.448 Investors are incentivized to buy bonds at a
lower interest rate to state bond-issuers because the interest on
the bonds are tax-exempt.449 The tax scheme, although technically
benefiting the bond-buyer, operates as a subsidy to state
projects.450 Understandably, then, the Internal Revenue Code
places restrictions on the types of projects such bonds can be used
However, there are restrictions imposed on tribes that are not
likewise imposed on states?effectively preventing tribes from
taking advantage of borrowing through tax-free bonds to the same
extent that states do. The two key limitations on tribal bonding
were instituted by the Tribal Tax Status Act in 1982,452 an update
446. See Peter J. Herne, Tribal Nations, Indian Gaming, and the Rigged
Economy, 10 ALB. GOV?T L. REV. 239, 246?47 (2017) (?For many governments when
the need to raise large sums of money arises, many resort to issuing their own
debt instruments rather than securing a loan, or simply raising taxes.?);
Clarkson, supra note 165, at 1014 (listing ?tax revenues, borrowing, and federal
grants? as the three major sources of financing for state and local governments).
447. See Clarkson, supra note 165, at 1017 (?The narrow interpretation of this
language by the IRS has had a stifling effect on tribes? tax-free bonding
448. See 26 U.S.C. ? 103(a) (2012) (?[G]ross income does not include interest
on any State or local bond.?); South Carolina v. Baker, 485 U.S. 505, 531 (1988)
(?Long-term debt obligations are an essential source of funding for state and local
governments.?); Clarkson, supra note 165, at 1054?59 (detailing typical public
projects constituting ?governmental functions? that states finance through
tax-exempt bonding, including hotels, parking garages, and golf courses).
449. See Clarkson, supra note 165, at 1032?34 (explaining the IRS? tax-free
bonds available to states to incentivize investment in governmental projects).
451. See 26 U.S.C. ?? 103(b)(1), 141 (excepting private activity bonds from tax
exemption and defining private activity bonds based on comprehensive criteria to
ensure tax-exempt bonds are not used for private business ventures).
452. S. 1298, 97th Cong. (1982).
to the Internal Revenue Code ironically meant to equalize tribes?
tax treatment with states.453 First, tribes? ability to issue bonds per
? 103 is permitted ?only if such obligation is part of an issue
substantially all of the proceeds of which are to be used in the
exercise of any essential governmental function.?454 Second,
because that criteria was ambiguous and routinely litigated, a
provision of the Omnibus Budget Reconciliation Act of 1987455 was
meant to clarify the governmental function requirement.456 The
provision made the requirement even narrower, specifying that the
scope of tribal bond authority be limited to projects that are
?customarily performed by State and local governments with
general taxing powers.?457
Although these provisions seem facially reasonable and in
keeping with the purpose of tax-free bonding schemes, the two
additional restrictions have had the effect of eliminating
altogether tax-exempt bonds as a financing option for tribes.458
Furthermore, they mark a significant difference between the
federal government?s treatment of states and tribes despite the
legislative intent to achieve equal tax treatment.459 The
453. See Robert A. Williams, Jr., Small Steps on the Long Road to
Self-Sufficiency for Indian Nations: The Indian Tribal Governmental Tax Status
Act of 1982, 22 HARV. J. ON LEGIS. 335, 339 (1985) (?[T]he Tribal Tax Status Act is
intended to ?strengthen tribal governments significantly by providing additional
sources of financing and by eliminating the unfair burden of taxes Indian tribal
governments must now pay.??).
455. Pub. L. No. 100-203, ?10632(a), 101 Stat. 1330-1, 1330-455 (1987)
(codified at 26 U.S.C. ?7871(e) (2012)).
456. See Ellen P. Aprill, Tribal Bonds: Indian Sovereignty and the Tax
Legislative Process, 46 ADMIN. L. REV. 333, 361 (1994) (?Representative Gibbons
sponsored a measure [in the Omnibus Budget Reconciliation Act] to tighten the
tribal bond measures by limiting essential governmental functions to those
customarily financed with exempt bonds by state and local governments.?).
457. See 26 U.S.C. ? 7871 (?For purposes of this section, the term ?essential
governmental function? shall not include any function which is not customarily
performed by State and local governments with general taxing powers.?).
458. See Aprill, supra note 456, at 363 (?Reported tribal bond offerings came
to a standstill for several years.?); Jenny Small, Financing Native Nations: Access
to Capital Markets, 32 REV. BANKING & FIN. L. 463, 466 (2013) (?[The IRS?]
restrictive interpretation has long served as a barrier for native nations
attempting to raise capital through the issuance of bonds.?).
See Clarkson, supra note 165 at 1039 (noting that the stated purpose of
differential treatment is rooted, like in the instant issue of
immunity in IPR, in sovereignty. That is, exempting states from
the federal taxation scheme stems directly from notions of state
sovereignty implicit in the constitutional structure.460 As
previously discussed, tribes have no similar constitutional
Perhaps the most traditional source of income for
governmental entities is tax revenue.462 Here, too, tribes face
difficulties unfamiliar to states. In Cotton Petroleum Corporation
v. New Mexico,463 the Supreme Court held that nontribal
organizations that lease land for mining on tribal property can be
taxed not just by the tribal government, but also by the state in
which the tribal land sits?causing entities to be doubly taxed.464
Thus, tribes are faced with the dilemma of foregoing their own tax
revenue to keep mineral lessees doing business on tribal property,
or imposing their own tax, making the double-tax prohibitively
expensive for the lessee.465
In both of these discrete tax areas, tribes are denied the same
economic opportunities as their state and municipal counterparts.
Therefore, tribes rely on commercial enterprises in an attempt to
boost revenue.466 By allowing tribes to develop technology
the introduced legislation was to eliminate the perception of differences between
tribal governments and state or local governments?).
460. See South Carolina v. Baker, 485 U.S. 505, 531 (1988) (O?Connor, J.,
dissenting) (?In my view, the Tenth Amendment and principles of federalism
inherent in the Constitution prohibit Congress from taxing or threatening to tax
the interest paid on state and municipal bonds.?).
461. See supra Part III.A (describing the trustee relationship between the
federal government and Native American tribes).
462. See supra note 446 and accompanying text (describing the traditional
sources of income for governmental bodies).
463. 490 U.S. 163 (1989).
464. See id. at 180 (?We thus agree that a purpose of the [Indian Mineral
Leasing Act] is to provide Indian tribes with badly needed revenue, but find no
evidence for the further supposition that Congress intended to remove all barriers
to profit maximization.?).
465. See id. at 206 (Blackmun, J., dissenting) (?State taxes would also reduce
the funds available to oil and gas producers to meet the financial obligations
placed upon them by the extensive federal and tribal regulatory schemes.?).
466. See Gary Davis, Tribal Economic Development Aspirations: Analyzing
Senator Warren's Recent Speech To Indian Country, FORBES (Mar. 16, 2018, 9:00
initiatives like the Saint Regis Mohawk Tribes?, Congress has an
opportunity to equalize technological-driven revenue streams in at
least this one, narrow respect. Indeed, state universities have been
hugely successful in their patent development efforts.467
This would also be in keeping with Congress?s initiative to
support tribal economic independence and self-determination.468
The congressional initiative towards self-determination has
proved successful both politically and economically. Politically,
tribal self-determination receives widespread support from
progressives and conservatives.469 Economically, policies rooted in
self-determination have yielded empirically-proven developments
in infrastructure, including availability of schools, health clinics,
and water supply.470
(last visited Sept. 19, 2018)
governments, which can levy taxes (or collect sales taxes) to fund these critical
initiatives, tribes are forced to rely largely on the creation of tribal businesses to
generate the revenues that fund tribal government operations.?) (on file with the
Washington and Lee Law Review).
467. See Brief of Amicus Curiae the Association of Public and Land-Grant
Universities in Support of Appellant, Regents of the University of Minnesota,
Seeking Reversal, Regents of the Univ. of Minn. v. Ericsson Inc. (No. 18-1565) at
Collaboration between public universities and industry has led to the
development of countless products that Americans use every
day[.] . . . In addition to these economic and societal impacts,
technology transfer occasionally provides some public universities a
source of revenue that is used to deepen the impact through
reinvestment in further research and educational objectives for the
468. See COMPTROLLER LENDING MANUAL, supra note 443, at 2 (?There is a
consensus among field experts that Indian Country has experienced significantly
higher economic growth rates since the onset of the self-determination era in the
mid-1970s, compared with preceding decades.?).
469. See Stephen Cornell & Joseph Kalt, American Indian
SelfDetermination: The Political Economy of a Successful Policy 15 (Joint Occasional
Papers on Native Affairs, Working Paper No. 1 2010),
http://nni.arizona.edu/pubs/jopna-wp1_cornell&kalt.pdf (noting that
self-determination has bipartisan support from both liberals and conservatives).
470. See id. at 8 (noting that the recent boom in tribal economic development
coincides with low federal funding relative to governmental support of other
In light of the fact that Congress cannot so easily limit state
immunity, abrogating tribal immunity in IPR will not actually
accomplish the benefits of strengthening the quality of patents
through administrative reexamination. Therefore, the Federal
Circuit?s decision finding that tribal immunity does not apply in
IPR should be reversed?leaving such a weighty decision to the
policymaking branch of government that can take into account the
far-reaching landscape of Indian law as it affects tribal
communities.471 As for their part, Congress should not unequally
disadvantage tribal patent holders in IPR?especially considering
other challenges tribal governments face generating revenue.
According to the PTAB and the Federal Circuit, states enjoy
immunity in IPR but tribes do not.472 On the one hand, the PTAB
came to this conclusion by finding that IPR is sufficiently similar
to civil litigation that it offends the dignity of states because it
requires that a state university, as the defendant, be haled into an
adversarial proceeding. On the other hand, the PTAB did not
undergo the same FMC comparison in finding that tribes do not
enjoy immunity from IPR proceedings,473 likely because it would
be patently absurd to find that the extent of the similarity between
IPR and civil litigation hinges on the identity of the sovereign,
rather than the procedures.
471. See Upper Skagit Indian Tribe v. Lundgren, 138 S. Ct. 1649, 1654 (2018)
(?Determining the limits on the sovereign immunity held by Indian tribes is a
grave question; the answer will affect all tribes . . . .?).
472. Compare Saint Regis Mohawk Tribe v. Mylan Pharm. Inc., 896 F.3d
(Fed. Cir. 2018)
(?[W]e conclude that tribal sovereign immunity cannot
be asserted in IPR . . . .?), with Covidien LP v. Univ. Fla. Research Found., Inc.,
No. IPR2016?01274, 2017 WL 4015009, at *17
that Eleventh Amendment immunity applies to inter partes review
473. See Mylan Pharm. Inc. v. Saint Regis
Mohawk Tribe, No.
-01127, 2018 WL 1100950, at *3
(P.T.A.B. Feb. 23, 2018)
(?The Tribe and
its supporting amici, however, have not pointed to any federal court or Board
precedent suggesting that FMC?'s holding with respect to state sovereign
immunity can or should be extended to an assertion of tribal immunity in similar
federal administrative proceedings.?).
Rather, the PTAB found narrowly that the non-tribal entity
was the true patent holder, and more broadly that even if a tribe
retained substantial rights in a disputed patent, that tribal
sovereign immunity does not apply to IPR.474 Setting aside the
Board?s narrower holding, the broader holding that FMC does not
extend to tribal sovereignty in administrative proceeding places
undue weight on the difference between state and tribal
sovereignty in the patent context.
True, ?the immunity possessed by Indian Tribes is not
co-extensive with that of the States.?475 But the PTAB placed too
much emphasis on this axiom. In the context of administrative
patent reexamination, any difference between the two is
insignificant. That is to say, the focus on a patent reexamination
is on the patent, not the patent holder. In this sense, a patent
holder?s participation in the proceeding is limited to defending the
grounds of patentability,476 therefore a state?s interest in defending
its patent is no different from a tribe?s interest in doing the same.
The Federal Circuit, in affirming the PTAB?s holding based on
different reasoning, did little to correct the currently disparate
treatment of tribes and states in IPR.
Perhaps the PTAB misjudged these differences because
Administrative Patent Judges, whose authority is delegated via
the Patent Act and who consider primarily substantive patent
issues, cannot consider the broader policy questions of sovereign
immunity.477 Congress should therefore respond to this growing
issue to address policy and uniformity concerns.
Because states and tribes as patent holders are identical in
IPR, Congress is faced with two options: (1) abrogate both state
474. See id. at *7?8 (finding that tribal immunity does not apply to IPR and
that Allergan retained all substantial rights under the license agreement).
475. Kiowa Tribe v. Mfg. Techs., Inc., 523 U.S. 751, 756 (1998).
476. See 35 U.S.C. ? 311(b) (2012) (defining the scope of inter partes review).
477. See id. ? 6 (?[T]he administrative patent judges shall constitute the
Patent Trial and Appeal Board. The administrative patent judges shall be persons
of competent legal knowledge and scientific ability who are appointed by the
Secretary, in consultation with the Director.?); Scholars? Brief, supra note 59
(?Petitioners? objections are being raised in the wrong forum. Congress ? rather
than the Board, the Article II executive, or even the Article III courts ? controls
the availability of tribal sovereign immunity.?).
II. Introduction to Patent Law ........................................... 1715 ?
A. Philosophical Justifications..................................... 1715 ?
B. The Contemporary Patent System.......................... 1718 ?
III. Sovereign Immunity ...................................................... 1725 ?
A. Tribal Sovereignty ................................................. 17285 ?
B. Tribal Economic Liberty and Self-Determination.. 1735 ?
C. State Sovereignty..................................................... 1736 ?
Sovereign Immunity ...................................................... 1745 ?
Law and Sovereign Immunity................................. 1745 ?
B. The ?Sham? Transaction in District Court............. 1750 ?
C. The PTAB Rejects Tribal Immunity ....................... 1755 ?
D. The Federal Circuit Applies FMC to IPR ............... 1758 ?
V. Sovereign Patent Holders in IPR .................................. 1765 ?
Immunity in Inter Partes Review............................ 1766 ?
B. Maintaining Tribal and State Immunity in IPR .... 1770 ? 6 . Ashley E. Petrarca , Allergan's Battle to Stay in Court: Does Inter Partes
Review Violate the Constitution by Circumventing Courtroom Adjudication?, 2017
B.C. INTELL. PROP. & TECH . F. 1 , 6 ( 2017 ). 7. See Mark S. Levy , Big Pharma Monopoly: Why Consumers Keep Landing
on ?Park Place? and How the Game Is Rigged , 66 AM. U. L. REV. 247 , 247 ( 2016 )
multiple sclerosis, and various forms of cancer . ?) . 8. See id. at 252 (describing one of the most sensational and highly
instituted a 5000% overnight price hike for a medication used to treat a
life-threatening illness found in patients with HIV/AIDS). 9 . See FTC v. Actavis, Inc., 570 U.S. 136 , 160 ( 2013 ) (addressing the issue
challenge the patent in exchange for millions of dollars violates antitrust laws ). 10 . See Benjamin Lajoie & Lauren Barnes , Uncertainty Remains for Pharma
Product Hopping Liability , LAW360 (Aug. 31 , 2017 , 12 :48 PM),
product-hopping-liability (last visited Sept . 19 , 2018 ) (describing the phenomena
of ?patent hopping?) (on file with the Washington and Lee Law Review) . 17 . Jackson , supra note 15; Brief of Appellants at 5 , Saint Regis Mohawk
Tribe v. Mylan Pharm ., Inc., 896 F.3d 1322 ( Fed. Cir . 2018 ). 18 . See Katie Thomas, How to Protect a Drug Patent? Give It to a Native
American Tribe , N.Y. TIMES (Sept. 8 , 2017 ), https://www.nytimes.com/2017/
09 /08/health/allergan-patent-tribe. html (last visited Sept . 10 , 2018 ) (quoting the
Patents , BLOOMBERG (Sept. 9 , 2017 , 12 :01 AM), https://www.bloomberg.com/news/
patents (last visited Sept . 19 , 2018 ) (quoting the Tribe's general counsel as noting
file with the Washington and Lee Law Review) . 19 . See Mylan Pharm. Inc., 2018 WL 1100950 , at *1 (introducing the
chronology of the dispute surrounding the Restasis deal ). 20 . See S. 1948 , 115th Cong. ( 2017 ) (proposing a bill restricting an Indian
Native-American Tribe , REUTERS (Sept. 20 , 2017 , 9 :38 PM),
allergan-patent-deal-with-native-american-tribe-idUSKCN1BQ2BE (last visited
Sept. 19 , 2018 ) (quoting an Ohio democratic senator that Congress should ?close
Washington and Lee Law Review). 21 . See Allergan , Inc. v. Teva Pharm. USA, Inc., No. 2 : 15 -CV-1455-WCB,
2017 WL 4619790 , at *3 ( E.D. Tex . Oct. 16 , 2017 ) (comparing the transaction to
other ?sham? transactions, such as abusive tax shelters ). 22 . See David Crow, Pharma Industry Faces Hypocrisy Charge over Patents,
FINANCIAL TIMES (Nov. 1 , 2017 ), https://www.ft.com/content/ad85104e-bd86 - 11e7-
b8a3-38a6e068f464 (last visited Sept . 19 , 2018 ) (citing a spokesperson for Eli
deal) (on file with the Washington and Lee Law Review) . 24 . See Patent Owner's Motion to Dismiss, Apple Inc . v. MEC Resources,
LLC , No. IPR2018 -00286, at *1 ( P.T.A.B. Feb . 13 , 2018 ) (moving to dismiss IPR
proceedings on tribal immunity grounds) . 25 . See Mylan Pharm. Inc. v. Saint Regis Mohawk Tribe, No.
IPR2016-01127 , 2018 WL 1100950, at *1 ( P.T.A.B. Feb . 23 , 2018 ) (discussing the
grounds) . 26 . See 35 U.S.C. ? 311 (b) ( 2012 ) (dictating the scope of reconsideration
prior art consisting of patents or printed publications ). 27 . Id . ? 303 (?[T]he Director will determine whether a substantial new
the request [for reexamination] . . . .?). 32 . See Kiowa Tribe v. Mfg. Techs., Inc., 523 U.S. 751 , 759 ( 1998 ) (comparing
tribal, state, and foreign sovereign immunity) . 33 . See Covidien LP v . Univ. of Fla . Research Found., No. IPR2016 - 01274 ,
2017 WL 4015009 , at *11 ( P.T.A.B. Jan . 25 , 2017 ) (?[C]onsidering the nature of
the States by the Eleventh Amendment.?) . 34 . See Allergan , Inc. v. Teva Pharm. USA, Inc., No. 2 : 15 -CV-1455-WCB,
2017 WL 4619790 , at *1- 2 ( E.D. Tex . Oct. 16 , 2017 ) (describing the patent
the suit , thereby waiving any immunity privilege) . 35 . See Allergan , Inc., No. 2 : 15 -CV-1455 -WCB , 2017 WL 4619790, at *1- 2
companies , and later the Saint Regis Mohawk Tribe) . 37 . See Mylan Pharm. Inc. v. Allergan, Inc., No. IPR2016 -01132, at * 24
(P.T.A.B. Dec . 8 , 2016 ) (instituting inter partes review for Allergan's patents) . 38 . Allergan , Inc. v. Teva Pharm., Inc., No. 2 : 15 -CV-01455 -WCB , 2017 WL
4803941, at *1 ( E.D. Tex . Aug. 24 , 2015 ). 39 . See Defendant's Answer to Plaintiff's Complaint, Allergan, Inc . v. Teva
Pharm. USA , Inc., No. 2 : 15 -CV-1455 -WCB , 2017 WL 4619790, at *21 ( E.D. Tex .
Oct. 21 , 2015 ) (answering that the Restasis patents are invalid ). 40 . See Allergan , Inc. v. Teva Pharm. Inc., No. 2 : 15 -CV-1455 -WCB , 2017 WL
4619790, at *1- 2 ( E.D. Tex . Oct. 16 , 2017 ) (describing the procedural background
after Allergan notified the court of the patent transfer to Saint Regis) . 41 . See O ' Sullivan, supra note 30 (discussing the frequency that patents are
disputed in parallel district court litigation and PTAB proceedings) . 42 . Mylan Pharm . Inc. v. Allergan, Inc., Case IPR2016-01132 , 2018 WL
1100950, at *1 ( P.T.A.B. Feb . 23 , 2018 ). 43 . See infra Part II.B (discussing a number of procedural and substantive
advantages for the patent challenger in PTAB proceedings) . 44 . See Gregory Dolin & Irina D. Manta , Taking Patents, 73 WASH. & LEE L.
REV. 719 , 740 - 41 ( 2016 ) (describing inter partes review, a newly crafted
reexamination proceeding conducted by a panel of administrative patent judges ). 45 . See Oil States Energy Services v. Greene's Energy Group , LLC, 138 S.
Ct. 1365 , 1370 ( 2018 ) (challenging the constitutionality of IPR on the grounds 57 . See infra Part IV.B-C (arguing that the PTAB and Federal Circuits
reasoning is unsound) . 58 . See Covidien LP v . Univ. of Fla . Research Found., Inc., No.
IPR2016-01274 , 2017 WL 4015009, at * 11 ( Jan . 25, 2017 ) (holding that state
litigation) . 59 . See Brief of Amici Scholars in Support of Patent Owner the Saint Regis
Mohawk Tribe at 1 , Mylan Pharm ., Inc. v. Allergan, Inc., No. IPR2016 01127 ,
2016 WL 10655556 (P.T.A.B. Feb . 23 , 2018 ) [hereinafter Scholars' Brief]
by Petitioners.?) . 60 . See Professor Manheim Testimony, supra note 29 (?Whatever the
outcome in Allergan, the issue is likely to recur .?). 61 . See Bernardi-Boyle, supra note 14 , at 41 (?[G] reater access to private 70. See Oil States Energy Services v. Greene's Energy Group , LLC, 138 S.
Ct. 1365 , 1377 ( 2018 ) (?The Patent Clause in our Constitution 'was written
against the backdrop' of the English system .?); LANDES & POSNER, supra note 67,
at 1 (noting early law protection of intellectual property such as the English
Statute of Monopolies of 1624 and the Statute of Anne) . 71. U.S. CONST. art. I, ? 8 , cl . 8 . 72. See Bell & Parchomovsky, supra note 68, at 542 ( 2005 ) (noting the
realist movement) . 73 . See id. at 563 (balancing ?incentives for innovation against the costs
determining this precise trade-off is ?elusive? in the real world ). 74 . See PETER S. MENELL , MARK LEMLEY & ROBERT P. MERGES ,
I INTELLECTUAL PROPERTY IN THE NEW TECHNOLOGICAL AGE: 2017 16- 20
(describing the economic justifications for intellectual property ). 75 . See LANDES & POSNER, supra note 67, at 1 (noting the historical
development of intellectual property legal protection in the United States) . 76 . Id . 77 . Graham , 383 U.S. at 9. 78. See MENELL , ET AL., supra note 74 , at 17-18 (describing public goods' 85. See 35 U.S.C. ?? 101 - 103 ( 2012 ) (codifying criteria for an invention to be
patentable) . 86 . See WILLIAM NORDHAUS , INVENTION, GROWTH , AND WELFARE: A
THEORETICAL TREATMENT OF TECHNOLOGICAL CHANGE 3-7 ( 1969 ) (arguing that the
term lengths) . 87. See id. at 20 ( ?Knowledge in society is cumulative . ?) . 88 . See id. at 22 ( ?[S]ociety must determine the appropriate requirements
& Parchomovsky, supra note 68, at 563 (?[D] etermining where this balance lies
in the real world has proved to be elusive . ?) . 89 . See Dolin & Manta, supra note 44, at 735 (? Congress made several
Office that supposedly resulted in 'low quality' patents .?). 90 . See Rudolph P. Hofmann , Jr. & Edward P. Heller , III, The Rosetta Stone
for the Doctrines of Means-Plus-Function Patent Claims, 23 RUTGERS COMPUTER
& TECH. L .J. 227 , 272 ( 1997 ) (?The Patent Act of 1952 was enacted in part as a
response to the harsh attitude toward patents in the thirties and forties . ?) . 91 . Id. at 273 . 92. See Dolin & Manta, supra note 44, at 734 (describing the 1952 Patent
Act's substantive provisions) . 93 . See id. (?The drumbeat of complaints about 'poor quality' patents that
enacted the far-reaching reforms in the 1952 Patent Act .?). 94 . See Saint Regis Mohawk Tribe v . Mylan Pharm . Inc., 896 F.3d 1322 ,
1330- 34 (Fed. Cir. 2018 ) (Dyk, J., concurring) (explaining the history of
reexamination procedures that preceded IPR) . 95 . See Sherry M. Knowles et al., Inter Partes Patent Reexamination in the
United States , 86 J. PAT . & TRADEMARK OFF. SOC'Y 611 , 611 ( 2004 ) (?The
and less expensively than litigation . '?) . 96 . Bayh-Dole Act , Pub. L. No. 96 - 517 , 94 Stat. 3015 ( 1980 ). 97 . Dolin & Manta, supra note 44, at 736- 37 . 98 . Id . 99 . See American Inventors Protection Act of 1999 , Pub. L. No. 106 - 113 , 113
Stat. 1501 (codified in relevant part in 35 U .S.C. ?? 311 - 318 ( 2006 )) (repealed
2012 ) (creating inter partes reexamination ). 100 . See Knowles et al., infra note 95 , at 614 ( ?A common complaint [of the
options, not more input . ?) . 101 . Pub . L. No. 112 - 29 , 125 Stat. 284 (codified in scattered Sections of 28
U.S.C . and 35 U.S.C.). 104 . Press Release, Sen. Patrick Leahy, Senate Begins Debate on
Leahy-Smith America Invents Act ( Sept . 6, 2011 ) ( on file with the Washington
Cuozzo Speed Techs. , LLC v. Lee , 136 S. Ct . 2131 , 2137 ( 2016 ). 370 . See Mylan Pharm. Inc. v. Saint Regis Mohawk Tribe , 2018 WL 1100950,
at *1 (quoting Santa Clara Pueblo v . Martinez , 436 U.S. 49 , 58 ( 1978 )). 371 . See id. at 16-18 (comparing IPR and other ?suits,? finding that the
patent holder) . 372. See id. at 9 (?[T] he immunity possessed by Indian Tribes is not
523 U.S. 751 , 756 ( 1998 ))). 373 . See id. at 8 (?The Tribe and its supporting amici, however, have not
assertion of tribal immunity in similar federal administrative proceedings . ?) . 374 . But see Vas-Cath, Inc . v. Curators of Univ. of Mo., 473 F.3d 1376 , 1382
(Fed. Cir . 2007 ) (applying the FMC standard to patent interference proceedings
at the PTAB) . 375 . See Bryan v. Itasca Cty., 426 U.S. 373 , 381 ( 1976 ) (?This omission has
affecting Indian immunities, as some mention would normally be expected if such 389 . Id. 390 . See Oil States, 138 S. Ct . at 1371 (? The decision whether to institute inter
partes review is committed to the Director's discretion . ?) . 391 . See Saint Regis Mohawk Tribe v . Mylan Pharm. Inc., 896 F.3d 1322 , 1327
(Fed. Cir . 2018 ) (?The Director bears the political responsibility of determining
which cases should proceed . ?) . 392 . See id. at 1328 (?[T]he USPTO procedures in IPR do not mirror the
Federal Rules of Civil Procedure.?) . 393 . See Fed . Mar. Comm'n v. S.C. State Ports Auth ., 535 U.S. 743 , 758 ( 2002 )
Rules of Procedures and the FMC's procedures , and discovery practices) . 394. Id. at 757-60 . 398 . See , e.g., Covidien LP v. Univ. of Fla . Research Found., No.
IPR2016-01274 , 2017 WL 4015009, at *4- 5 (P.T.A.B. Jan . 25 , 2017 ) (discussing
Vas-Cath before comparing civil litigation and IPR) . 410 . See Kiowa Tribe v. Mfg. Techs., Inc., 523 U.S. 751 , 758 ( 1998 ) (?It has
MURPHY , CONG. RESEARCH SERV., 97 -851 A , FEDERAL INDIAN LAW: BACKGROUND
AND CURRENT ISSUES 26-27 ( 1997 ) [hereinafter Murphy Congressional Research]
funding because of the statute's overly broad language ). 411 . Fla . Paraplegic, Ass'n v. Miccosukee Tribe of Indians , 166 F.3d 1126 ,
1130 ( 11th Cir . 1999 ). 412 . See Santa Clara Pueblo v. Martinez , 436 U.S. 49 , 61 ( 1978 ) (finding that
choice not to afford a remedy that would abrogate tribal immunity ). 413 . See Allergan's E.D. Texas Complaint , supra note 36 , at 9-10 (discussing
tribal initiatives to generate income to support its infrastructure). 414. See Mylan Pharm . Inc. v. Saint Regis Mohawk Tribe, No.
IPR2016-01127 , 2018 WL 1100950, at *2 ( P.T.A.B. Feb . 23 , 2018 ) (?[W]e
immunity should be applied to these proceedings . ?) . 415 . See Brief of Appellants at 23, Saint Regis Mohawk Tribe v. Mylan
Pharm. , Inc., 896 F.3d 1322 ( Fed. Cir . 2018 ) (No. 18 - 1638 ) (?But the Board never
explained the differences or why they dictated opposite results . ?) . 416 . See supra Part IV.C (pointing to the Vas-Cath gap in the Federal
Circuit's Saint Regis Mohawk analysis) 417. Software Industry Association Amicus Brief, supra note 131, at 3 . 418. See State Amicus Brief Support En Banc Rehearing , supra note 406 , at
2 (?Sovereign immunity protects States' sovereign dignity and the value of
patents held by States and their public universities . ?) . 419 . See Petition for Rehearing En Banc of Appellants Saint Regis Mohawk
Tribe and Allergan, Inc., Saint Regis Mohawk Tribe v. Mylan Pharm., Inc., 896
F. 3d 1322 (Fed . Cir. 2018 ) (No. 18 - 01638 ) (?Although the panel stated that its
are the same for all IPRs . . . . ? (citations omitted)) . 420 . See S. 1948 , 115th Cong. (1st Sess . 2017 ) (abrogating only tribal
sovereign immunity in IPR) . 421 . Fed . Mar. Comm'n v. S.C. State Ports Auth ., 535 U.S. 743 , 756 ( 2002 ). 422 . See Tenn . Student Assistance Corp. v. Hood, 541 U.S. 440 , 452 ( 2004 )
(internal citations omitted) . 423 . See Ericsson Inc. v. Regents of Univ. of Minn ., 2017 WL 6517563 , No.
IPR2017-01186 at *6 (Dec. 19 , 2017 ) (? At its core, inter partes review is a
over the patent challenged, rather than the parties named . ?) . 424 . See Oil States Energy Servs ., LLC v. Greene's Energy Grp ., LLC, 138 S.
Ct. 1365 , 1373 ( 2018 ) (explaining that because the USPTO has authority to grant
patents, it also has the authority to reconsider them) . 425. Hood , 541 U.S. at 450; Saint Regis Mohawk Tribe v . Mylan Pharm . Inc.,
896 F. 3d 1322 (Fed . Cir. 2018 ) (?[IPR] does not involve exercise of personal