Allergan proposed a strange way to help immunize US patents from IPR attack – the “sovereign immunity defense”.
IPR attacks: The America Invents Act (ACA) went into effect in 2013. Since then, a popular way to invalidate patents has been to challenge them in Inter Partes Review (IPR) proceedings. IPR proceedings are a USPTO (Federal) Patent Trial and Appeal Board (PTAB) proceeding where challengers can argue that a given patent is not novel, or is obvious, in view of various published prior art.
Sovereign Immunity: The Eleventh Amendment to the US Constitution reads: “The Judicial power of the United States shall not be construed to extend to any suit in law or equity, commenced or prosecuted against one of the United States by Citizens of another State, or by Citizens or Subjects of any Foreign State.”
Background: The University of Maryland (UMD) owned patent 7,635,386, covering a method of repairing cardiac valves. In May 2017, UMD successfully overcame an IPR challenge. They argued that UMD was part of the State of Maryland. Therefore they were immune from the PTAB and IPR under the Eleventh Amendment (Sovereign Immunity).
OK… maybe so. Certainly, UMD was able to cite various cases supporting their view. PTAB agreed and dismissed the challenge.
Twisty patent strategy
They did what? Allergan PLC was multinational pharmaceutical company with its own patents to protect. They decided to push this concept to the limit. Allergan sold some of their patents to the St. Regis Mohawk Tribe (located in New York). Allergan then immediately licensed the patents back again. In September 2017 Allergan then argued that since this tribe is also a sovereign government, “the tribe’s” patents also had sovereign immunity to IPR challenges!
Well, points for creativity! I don’t think anyone has ever thought of this angle before. Certainly, the tribe would have been very happy to supplement its Casino business.
The tribes’ sovereign legal status, “domestic dependent nations”, is best described as “it’s complicated”. Did Allergan invent a new form of “patent laundering“? Patent law could have taken an interesting turn.
Sadly, for fans of twisty patent strategy, in 2018 the Federal Circuit shut this down in Saint Regis Mohawk Tribe, Allergan Inc. v. Mylan Pharmaceuticals et al. A subsequent appeal to the Supreme Court was denied.
But to contemplate an alternative reality, enjoy the enclosed map of the continental US, showing the larger tribal lands in color. They could have been the new frontier in creative patent law strategy! There still could be some life in the idea, because the Federal Circuit ruling was narrowly focused on IPR. Other areas of patent, trademark, and copyright immunity remain to be explored.