The Federal Circuit Finds Tribal Sovereign Immunity does not Apply in IPR

On July 20, 2018, the Federal Circuit held that tribal sovereign immunity is not available as a defense in IPR.

Allergan Pharmaceuticals owned patents that it had asserted in litigation against various generic pharmaceutical manufacturers, including Mylan Pharmaceuticals, for the drug Restasis®.  In September 2017, Allergan announced that it had transferred these patents to the Saint Regis Mohawk Tribe so the Tribe could invoke sovereign immunity and dismiss the pending IPRs.  See Allergan and the Saint Regis Mohawk Tribe Enter Patent Agreement to Defend Against IPR of RESTASIS® Patents.  The Tribe then filed motions to terminate the IPRs in view of tribal sovereign immunity.  In February, 2018, the PTAB denied the Tribe’s motions to terminate, reasoning that the Tribe’s sovereign immunity was not available as a defense in IPR. See The Saint Regis Mohawk Tribe is not entitled to Sovereign Immunity at the PTAB.  Following the PTAB’s denial of the Tribe’s motion, the Tribe appealed the PTAB’s decision to the Federal Circuit. Mylan Pharms. v. St. Regis Mohawk Tribe, IPR2016-01127, Paper 133 (PTAB February 28, 2018).  On March 28, 2018, the Federal Circuit granted the Tribe’s motion to stay the IPR proceedings.  St. Regis Mohawk Tribe v. Mylan Pharms. Inc., No. 18-1638 slip op. at 2 (Fed. Cir. March 28, 2018).  

In its decision, the Federal Circuit looked to the Supreme Court’s decision in Fed. Maritime Comm’n v. S.C. State Ports Auth. (FMC), which addressed the applicability of state sovereign immunity to actions at federal agencies.  535 U.S. 743 (2002).  In FMC, the Supreme Court held that state sovereign immunity is applicable in an agency action which bears a strong resemblance to civil litigation.  Id. at 756-758.  The Federal Circuit analyzed the similarities and differences between IPR and civil litigation, and held that “IPR is more like an agency enforcement action than a civil suit brought by a private party.”  St. Regis Mohawk Tribe v. Mylan Pharms. Inc., No. 18-1638 slip op. at 8 (Fed. Cir. July 20, 2018).  Thus, the Federal Circuit concluded that “tribal sovereign immunity cannot be asserted in IPR.”  Id. at 11.

The Federal Circuit also specifically noted, “we are only deciding whether tribal immunity applies in IPR. . . we leave for another day the question of whether there is any reason to treat state sovereign immunity differently.”  Id. at 12. 

Although the Federal Circuit affirmed the decision of the Board, the Federal Circuit’s reasoning was quite different from that of PTAB.  The PTAB’s decision determined that although state sovereign immunity was applicable in IPR, tribal sovereign immunity is different; and, because it is different, tribal sovereign immunity was not available in IPR as a defense. See The Saint Regis Mohawk Tribe is not entitled to Sovereign Immunity at the PTAB.  The Federal Circuit, however, did not draw a distinction between state and tribal sovereign immunity when comparing IPR to civil litigation and an agency enforcement actions.  It will be interesting to see whether the Federal Circuit’s analysis affects how future PTAB panels treat state sovereign immunity claims.

Written by: Peter Law and Kerry S. Taylor, Ph.D.