October 15, 2018

Indian Tribe files Motion to Dismiss IPR Proceeding based on Sovereign Immunity

The Saint Regis Mohawk Tribe filed a Motion to Dismiss all of the IPR proceedings relating to the Allergan drug RESTASIS on September 19, 2017. As discussed in my previous post, the drug company Allergan recently assigned the patents to the Tribe, with the Tribe granting back to Allergan an exclusive license. Allergan must pay the Tribe quarterly royalties of $3,750,000 for its field-of-use license. The purpose of the transaction was to permit the Tribe to assert sovereign immunity and defeat the jurisdiction of the PTAB of the USPTO, which has been hostile to the rights of patent owners in IPR proceedings. The Tribe argues that it is a sovereign government that cannot be sued “unless Congress unequivocally abrogate is immunity or the Tribe expressly waives it” and neither of these exceptions applies in this instance.

As the Tribes notes, Supreme Court recognized in 1832 in Worcester v. State of Georgia that sovereign Indian Tribes are “‘distinct independent political communities,”  and, as such, have inherent sovereign immunity. Such immunity can only be waived by the Tribe or “congressional abrogation,” and absent such waiver all suits against the Tribe are barred. The Tribe argues that Congress has not unequivocally abrogated the Tribe’s immunity from suit by statute (as required by the Supreme Court), and that neither has the Tribe unequivocally waived its immunity. Therefore, according to the Tribe, the “action must be dismissed.”

It is interesting that in the Section addressing whether the proceeding may move forward without the consent of the Tribe, the Tribe notes that the petitioners still have an adequate remedy since they have challenged the validity of the same patents “in a recently completed five-day bench trial in the Eastern District of Texas” and “The Tribe will not assert sovereign immunity in the Eastern District of Texas case. So dismissing this case does not deprive Petitioners of an adequate remedy; it only deprives them of multiple bites at the same apple.”

The Tribe is relying on well and long established principles of law, and the PTAB should dismiss the IPR proceedings. However, given the track record of the PTAB, this outcome is far from certain.

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