Intellectual Property
| Publication year | 2019 |
| Author | By Morgan Chu & Dominik Slusarczyk |
By Morgan Chu & Dominik Slusarczyk
Creative litigation strategies sometimes flourish amid the high stakes of patent litigation, leaving case studies for posterity. The Saint Regis Mohawk Tribe case is a recent, educational example.1 In this article, we discuss how that litigation recently prompted the courts to decide that American Indian tribes cannot assert sovereign immunity from a key Patent Office proceeding, and we conclude that neither states nor the federal government are likely to fare any better with such a defense.
In the last decade, Congress established inter partes review ("IPR"), an adversarial agency proceeding that allows challenges to issued patents on invalidity grounds. Such petitions are often filed by defendants in district court infringement actions, and the proceedings have become a popular vehicle for resolving validity challenges.
Meanwhile, sovereign entities like state governments—and, it turns out, many American Indian tribes—are typically immune from suit under the doctrine of sovereign immunity. But are such entities immune from answering an IPR petition challenging the validity of the sovereign's patents? Recently, a plaintiff private-sector pharmaceutical company in a patent infringement case posed that question to the courts. After the defendants challenged the patents with IPR petitions, the plaintiff transferred the patents to a federally recognized American Indian tribe. The tribe then sought to terminate the IPR, arguing immunity.
The Patent Office and the Federal Circuit Court of Appeals rebuffed the approach; and the Supreme Court chose not to review. Below, we discuss the fundamentals of IPR proceedings and the sovereign immunity "defense," and examine how these doctrines intersect in Saint Regis Mohawk Tribe.
Inter partes review proceedings allow adversarial examination of an issued patent directly within the Patent Office.2 In a nutshell, a challenger brings forward its invalidity argument and supporting evidence, and, in tandem with the patent owner, develops a record on which the Patent Office renders a patentability decision. The proceeding is usually conducted before a three-judge panel of the Patent Office's specialized Patent Trial and Appeal Board ("PTAB" or "Board").
Among IPR's most popular features may be its quick statutory timetable. An IPR is typically required by statute to conclude within 18 months of the filing of a petition challenging the validity of the patent. First, within about six months of the filing of a petition, the Board determines whether to institute trial.3 If trial is instituted, a final written decision from the Board is then due within a year of institution in most cases.4 If no trial is instituted, the proceeding concludes within about six months of the filing of the petition, with the Board's decision denying review—and the patent emerges unscathed.5
This section describes a few salient features of the inter partes review process.
PetitionTo request inter partes review of a patent, a challenger files a petition with the Board. The petition must set forth the merits of the challenger's validity attack, including the specific legal theories and evidence cited in support thereof (such as expert declarations, which are commonplace in IPRs).6 The petition is a key document: its contents set forth the theories that may be considered in the proceedings, and once it is filed, these theories cannot usually be changed.7 For example, neither the petitioner nor the Board has power to amend the petition, other than for purposes of correcting clerical or typographical errors.8
It is common for litigants accused of infringing patents in district court litigation to file IPR petitions to open collateral proceedings challenging the validity of the patent.
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Institution of TrialThree months after the optional preliminary response is due, the Board issues its institution order, which is a threshold decision about whether trial will proceed on the petition. Interestingly, the Board is typically not obligated to institute trial, even on meritorious petitions; although a statute prohibits the Board from instituting trial on petitions that present merits falling short of a certain minimum standard,9 no plain statutory text directly compels the Board to institute trial if the standard is met—or seemingly in any other circumstance. Thus the decision regarding institution of trial appears to rest within the Board's broad discretion.
Until trial is instituted, the owner of the challenged patent is not required to respond substantively to the petition. While the rules afford the patent owner an opportunity to file a preliminary response about three months after the petition is filed, such a preliminary response—which may include procedural arguments as well as arguments about the merits of the petition—is strictly optional.10 It bears only on the Board's decision whether to institute trial, and the patent owner's election to file or not file such a preliminary response does not waive the patent owner's right later to file a full response on the merits if trial is instituted to consider patentability.
DiscoveryInter partes review proceedings provide very limited discovery, even if trial is instituted. The so-called "routine discovery" permitted in IPRs consists chiefly of a right to production of exhibits cited in papers or expert declarations filed in connection with the proceeding, and to cross-examination of declarants (usually, but not always, expert witnesses).11 Additional discovery, unless agreed between the parties, is allowed upon motion only if the movant establishes that such discovery would be "in the interests of justice."12
Juxtaposed with inter partes reviews in the Saint Regis Mohawk Tribe case is the doctrine of sovereign immu-nity—the rule that, generally, "a sovereign c[an]not be sued without its consent."13
A Federalism of "Dual Sovereignty"As a threshold issue, the United States federal government is not the only sovereign in our scheme of government. States, too, are sovereigns. In fact, though the concept may seem self-contradicting, "[d]ual sovereignty is a defining feature of our Nation's constitutional blueprint"14—a product of our constitutional history, whereby respective sovereign states agreed to join a federation only with minimal surrender of their prior rights.15 Thus, while a state may be sued by peer sovereigns (its sister states), as well as the federal government,16 it cannot be forced to answer the civil claims of private individuals. Even Congress does not have plenary power to abrogate state sovereign immunity.17
American Indian Tribes"Dual" does not fully account for the nuances of sovereignty in our Constitutional scheme, which actually extends to at least a third kind of sovereign entity: American Indian tribes. The Supreme Court has referred to such tribes as "distinct, independent political communities, retaining their original natural rights in matters of self-government."18 Tribes also generally enjoy immunity from suit by private individuals as a matter of federal common law.19
A tribe, like a state, may waive its own sovereign immunity. But while Congress does not have plenary authority to abrogate state sovereign immunity, it does have plenary authority to abrogate the immunity of the tribes; and, as a historical consequence of such abrogations in a number of contexts, that immunity has eroded over the centuries.20
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Limitations on ImmunityImmunity from suit by private individuals does not shield sovereigns from federal regulation. For instance, neither states nor tribes are immune from suit by the federal govern-ment.21 And by extension, state and tribal sovereigns also do not enjoy immunity from many types of federal adjudicatory agency process.
For example, proceedings brought by federal agencies to enforce rights based on federal law may proceed against state and tribal...
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