July 26, 2018
The Federal Circuit issued its decision in Saint Regis Mohawk Tribe et al v. Mylan Pharmaceuticals Inc., et al (18-1638) on July 20, 2018. The central question addressed in the Federal Circuit’s decision was whether the principal of sovereign immunity can be asserted by a patent owner to avoid their patent being subjected to the Inter Partes Review (IPR) process. The decision hinged on whether the IPR process is more akin to the civil litigation-like proceedings in adjudications before the Federal Maritime Commission in which state sovereign immunity was held to apply (Fed. Maritime Comm’n v. S.C. State Ports Auth., 535 U.S. 743, 754–56 (2002) (“FMC”) or whether IPR is a traditional agency action in which it has been previously held that sovereign immunity does not typically apply (see, for example, Pauma v. NLRB, 888 F.3d 1066 (9th Cir. 2018); Karuk Tribe Hous. Auth., 260 F.3d at 1074; and Fed. Power Comm’n v. Tuscarora Indian Nation, 362 U.S. 99, 122 (1960)). It is important to note, however that there is no blanket rule that immunity does not apply in federal agency proceedings.
The Federal Circuit’s reasoning was thus guided by the Supreme Court’s analysis in FMC, to determine whether IPR more resembles typical civil litigation between two parties, or an agency proceeding. The Federal Circuit held that the IPR process is clearly neither a judicial proceeding instituted by a single party, nor clearly an enforcement action brought by the federal government, but rather is a “hybrid proceeding” with characteristics of both. While the USPTO Director has sole discretion on whether or not to institute an IPR, the IPR process still bears some resemblance to civil litigation.
Ultimately, the following factors were significant components of the Federal Circuit decision:
Because of the above factors, the Federal Circuit held that tribal sovereign immunity does not apply in IPR proceedings. I note, however, that in the final sentence of their analysis, the Federal Circuit explicitly stated that this decision did NOT address whether there is any reason to treat state sovereign immunity differently with respect to IPR proceedings. That will remain to be seen…