Source: https://www.ipwatchdog.com/2018/06/14/federal-circuit-hears-oral-arguments-st-regis-appeal-tribal-sovereign-immunity/id=98366/?utm_source=feedburner&utm_medium=feed&utm_campaign=Feed%3A+Ipwatchdog+%28IPWatchdog.com%29
Timestamp: 2019-04-21 22:52:10+00:00

Document:
On Monday, June 4th, the Court of Appeals for the Federal Circuit heard oral arguments in St. Regis Mohawk Tribe v. Mylan Pharmaceuticals, a case appealed from the Patent Trial and Appeal Board (PTAB) which asks the appeals court to determine whether tribal sovereign immunity can be asserted to terminate inter partes review (IPR) proceedings at the PTAB. The Federal Circuit panel consisting of Circuit Judges Kimberley Moore, Timothy Dyk and Jimmie Reyna lobbed tough questions at counsel representing appellants St. Regis and Allergan, appellees Mylan and Teva as well as the respondent for the U.S. federal government, without giving much clue as to whether the panel favored the argument offered by any particular side.
“Our position is the tribal immunity in the IPRs is the logical conclusion of the system enacted by Congress,” said Jonathan Massey, counsel representing St. Regis, said at the top of his remarks. He noted that the adjudicatory party-based model put in place for IPR proceedings differed from the agency-led inquisitorial process for adjudicating patentability in original patent prosecutions or ex parte reexaminations, a difference which was highlighted by the recent U.S. Supreme Court decision in SAS Institute v. Iancu. The Federal Circuit panel questioned whether this position was undermined by SCOTUS’ recent holding in Oil States v. Greene’s Energy Group, which held that patents were public franchises that were granted with an expectation that they could be reviewed and cancelled. Massey argued that Oil States supports St. Regis’ position when the Supreme Court recognized that IPRs employed adjudicatory court-like procedures that could potentially trigger sovereign immunity claims.
Massey discussed court precedent from two cases to support St. Regis’ position on sovereign immunity applying in IPRs: Vas-Cath Inc. v. Curators of University of Missouri, a 2007 Federal Circuit case which decided against Eleventh Amendment state sovereign immunity in a USPTO interference proceeding; and Federal Maritime Commission v. South Carolina State Ports Authority, a 2002 Supreme Court case which upheld state sovereign immunity barred the FMC from adjudicating a private party’s rights against a nonconsenting state. Though Vas-Cath held against a sovereign immunity defense, Massey noted that, in that case, the USPTO Director had to actively declare an interference proceeding which wasn’t filed like a normal federal civil action. In both cases, the agency actions bore differences to civil litigation whereas IPRs followed a more adversarial approach between parties.
Of the judges on the Federal Circuit panel, Judge Moore seemed especially feisty in her questioning of Massey’s arguments. “You can’t say Congress made this decision, Congress didn’t speak to tribal immunity anywhere in the statute,” Judge Moore said. “So for you to come in and to suggest to me that Congress decided this case in 2011 is nonsense.” In response, Massey cited to a House report to argue that Congress deliberately choose an adjudicative model.
Miller continued to assert throughout that the USPTO Director’s discretion whether or not to institute the IPR proceeding, although limited to the grounds raised by the petitioner, was a critically important piece of discretion afforded the Director which was not present in FMC. Further, Miller argued that the IPR process can only end in the cancellation of a patent, not in any monetary relief, marking another difference between IPRs and civil court actions where St. Regis could raise tribal sovereign immunity. Because the St. Regis tribe had entered into a patent infringement civil action in the Eastern District of Texas, Miller argued that this amounted to waiver of the sovereign immunity defense in front of the PTAB. “The tribe has brought an action to enforce the patents, invoking the benefits of the patent system, and at the same time trying to assert its immunity to bar another aspect of the very same system,” Miller said.
Appearing on behalf of the U.S. government as the federal respondent of the case was Mark Freeman who argued that the Supreme Court recently upheld IPRs as a reconsideration of a decision made by a government agency and thus doesn’t resemble private litigation. “That is the express ground on which the Court upheld the proceedings against arguments exactly like those advanced by my friend today,” Freeman argued. “Namely, that inter partes review is just private civil litigation transplanted into a federal agency. These are our proceedings.” Once again, the ire of Judge Moore was raised by what she felt was an improperly stated argument.
Freeman argued that the way to reconcile those two cases was to understand that, under the statute, the petitioner frames the question and the Director has unreviewable discretion to answer that petition. Freeman also pushed the oft-used analogy of the English Privy Council’s ability to cancel patent grants through the 18th century, an aspect of the British legal system which provides a basis for executive branch cancellation of patents and an analogy which received wide support by those supporting IPRs in Oil States briefs filed with the Court.
Freeman argued that there are some types of proceedings where sovereign immunity doesn’t apply, citing to the Supreme Court’s 2004 decision in Tennessee Student Assistance Corporation v. Hood. That case arose out of a bankruptcy proceeding created by debt to a state loan-granting institution and the Court held that the bankruptcy procedure was different than a civil suit and is therefore not barred by sovereign immunity.
Massey discussed court precedent from two cases to support St. Regis’ position on sovereign immunity applying in IPRs: Vas-Cath Inc. v. Curators of University of Missouri, a 2002 Supreme Court case which decided against Eleventh Amendment state sovereign immunity in a USPTO interference proceeding; and Federal Maritime Commission v. South Carolina State Ports Authority, a 2007 Federal Circuit case which upheld state sovereign immunity barred the FMC from adjudicating a private party’s rights against a nonconsenting state.
You’ve got these two backwards — FMC is the 2002 Supreme Court case.
That being said, what a horrible panel for the patent holder to draw.

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