Supreme Court Denies Cert On Tribal Sovereign Immunity Question

Jones Day

Jones Day

On April 15, the Supreme Court denied a petition for certiorari filed by Saint Regis Mohawk Tribe, leaving intact the Federal Circuit’s ruling that tribal sovereign immunity does not apply in inter partes reviews.  See Saint Regis Mohawk Tribe v. Mylan Pharm. Inc., 896 F.3d 1322, 1326 (Fed. Cir. 2018), cert. denied, No. 18-899, 2019 WL 1590253 (U.S. Apr. 15, 2019); see also PTAB Litigation Blog articles on the Federal Circuit decision, the PTAB decision giving rise to this appeal, and related PTAB decisions on tribal immunity.

In Saint Regis, generic drug maker Mylan petitioned for inter partes reviews of patents that cover Allergan’s Restasis®, prescription eye drops for treating dry eye.  After the Patent Trial and Appeal Board (PTAB) instituted reviews, Allergan transferred ownership of those patents to the Saint Regis Mohawk Tribe, an Indian tribe, which then granted an exclusive and perpetual license to Allergan.  Saint Regis moved to terminate the inter partes reviews, asserting tribal immunity from the PTAB’s review.  But the PTAB denied the motions, and the Federal Circuit affirmed.

On appeal, Saint Regis relied on Federal Maritime Commission v. South Carolina State Ports Authority, 535 U.S. 743 (2002) (“FMC”).  In FMC, the Supreme Court concluded that state sovereign immunity applied in an agency adjudicative proceeding brought by a private party against a state, distinguishing such a proceeding from agency-initiated enforcement actions.  Saint Regis argued that just like the proceeding in FMC, inter partes reviews are adjudicative proceedings between private parties.  A week after Saint Regis filed its opening brief, the Supreme Court decided SAS Institute Inc. v. Iancu, 138 S. Ct. 1348 (2018), in which the Court held that the petitioner, not the PTO Director, defines the contours of inter partes reviews.  Saint Regis emphasized the holdings of FMC and SAS in its reply brief and at oral argument.

The Federal Circuit, however, concluded that tribal immunity does not apply here because, unlike the proceeding in FMC, inter partes review “is more like an agency enforcement action than a civil suit brought by a private party.”  Saint Regis, 896 F.3d at 1327.  The court cited several factors relating to the nature of inter partes reviews to support its conclusion, including the fact that the PTO Director has broad discretion in deciding whether to institute review, even though its discretion in how to conduct review is constrained under SAS.  Judge Dyk concurred in a separate opinion to express his view that “[w]hile private parties play a role, inter partes reviews are fundamentally agency reconsiderations of the original patent grant, proceedings as to which sovereign immunity does not apply.”  Id. at 1329 (Dyk, J., concurring).

Although its reasoning was broadly based on the nature of inter partes reviews, the court in Saint Regis emphasized that it was only deciding whether tribal immunity applies in inter partes reviews, leaving open “the question of whether there is any reason to treat state sovereign immunity differently.”  Saint Regis, 896 F.3d at 1329.  Another consolidated appeal is presently pending before the Federal Circuit raising exactly that question—whether state sovereign immunity applies in inter partes reviews.  Regents of Univ. of Minn. v. LSI Corp., No. 18-1559 (Fed. Cir.).  We covered the underlying PTAB decisions on the PTAB Litigation Blog.  That appeal was argued in March 2019.  With the Supreme Court’s recent denial of Saint Regis’s petition for certiorari, we expect the Federal Circuit to issue a decision in the LSI appeal in the near future.  Jones Day will continue to monitor this appeal and provide updates.

DISCLAIMER: Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.

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