The Federal Circuit Will Decide Whether Sovereign Immunity Can be Used to Escape Patent Invalidation by the PTAB – If the Supreme Court Finds Inter Partes Review Constitutional
When Allergan assigned its Restasis patents to the Saint Regis Mohawk Tribe last September, so that sovereign immunity could be used to help prevent their invalidation by the Patent Trial and Appeals Board (PTAB), politicians and the public cried foul. This past month, after the PTAB decided that sovereign immunity did not apply and scheduled its final hearing in the matters for April 3, and then refused to stay pending notices of appeal by Allergan and the Tribe, the Federal Circuit cried foul.
In its nonprecedential order of March 28, addressing the appellants’ motion for stay pending review, the Federal Circuit stated:
It appears that the appeals divested the Board of jurisdiction over the aspects of the case on appeal, … and that exclusive jurisdiction to resolve the threshold issue of whether these proceedings must be terminated [based upon assertion of sovereign immunity] vests in this court, and that the Board may not proceed until granted leave by this court.
The Federal Circuit accordingly granted the motion to stay the IPR proceedings, at least until the day after the Court hears oral argument in the appeal, on an as yet unspecified date in June 2018. Appellant briefing will begin soon, with the opening brief due April 18, response brief due May 11, and reply brief due May 18, 2018. In an uncharacteristically succinct paper issued the same day as the Federal Circuit’s order, the PTAB ordered that the IPR proceeding was stayed pending leave by the Federal Circuit to proceed.
This case highlights the current tensions between the PTAB, the Courts, politicians and the public, especially with respect to pharmaceutical patents. The PTAB’s reputation as a “death squad” has subsided since Inter Partes review procedures were instituted in September 2012. But concerns remain that its authority to invalidate patents is sufficiently duplicative of, and yet different from, the Courts to be problematic. At the same time, Allergan’s attempt to shield itself from a PTAB decision by alignment with a sovereign nation has been widely viewed as improper gamesmanship.
These tensions may be relieved by the Supreme Courts’ decision in Oil States Energy Services, LLC v. Greene’s Energy Group, LLC regarding the PTAB’s authority to conduct Inter Partes Review proceedings. Oral arguments in that case were heard on November 27, 2017, so a decision should issue by end of June – i.e., before the Federal Circuit hears argument in the appeal by Allergan and Saint Regis Mohawk Tribe.
Parties considering the filing of petitions for IPR or other post-grant review by the PTAB, as well as those contemplating defensive maneuvers involving sovereign immunity, may want to post-pone action until the Supreme Court and the Federal Circuit can address these important pending issues.