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February 25, 2018


In short, "We are the PTAB and we will do whatever the @#$% we want."

You're right, Kevin, this outcome surprises no one. Personally, I'm rooting for reversal on appeal.

A more solid decision would have come from using the words "sham deal" and not touching the sovereign immunity question at all.

As is, they go most of the way there, but leave some ambiguity, and then in what may be considered dicta, attempt to act as if they were Congress and limit the tribal immunity anyway.

Excellent groundwork - sloppy finish.


"Nevertheless, the Board applying at least Rule 121(b), refuges in the fact that there is no "controlling precedent or statutory basis" for applying sovereign immunity to IPR. Acknowledging that this is a "case of first impression" (making its mention of a lack controlling precedent at least inherently redundant), the opinion distinguishes Federal Maritime Commission v. South Carolina State Ports Authority, 535 U.S. 743 (2002) ("FMC"), on the grounds that FMC was concerned with State sovereign immunity which is distinct from tribal sovereign immunity by being protected by the Eleventh Amendment and not being subject to abrogation by Congress as tribal immunity is."

is just not compelling. There will be lots of things "of first impression" within the PTAB, and there is no such thing as well WE (the royal we of the PTAB) will decide what WE want to do because WE have not seen this before. The PRINCIPLE behind sovereign immunity for the States is the same principle for the Tribes, and the difference listed is a non-sequitur to the point at hand. Quite in fact, the fact that a bill has been proposed to change and limit Tribal sovereign immunity leaves the premise that such immunity does in fact exist, as were such immunity NOT exist, such a bill would not be required. This presents a clear error of law and a basis for overturning the decision - which then also places the LACK of statement of "sham deal" as a weakness.

Let me add that the scorecard here is excellent - at last that part of the decision was thorough.

"Sham" factors that could have been added (should have been added) would include a comparison of benefits obtained.

This (as well) paints a difficult "Oil States" effect:

"The Board also gives little credence to the argument that in an IPR a private third party remains involved, stating that "a private entity's continued involvement as a party in a federal administrative proceeding does not necessarily entitle a tribal entity to assert its immunity in the proceeding."

This is saying that in the executive branch proceeding, there is NO neutral arbiter and that it is the patentee against BOTH the petitioner and the "judge."

This admission should sound out klaxon alarms.

I have some experience in working with the St. Regis Mohawk Tribe from when I was the executive director of a tribal environmental association. Admittedly, my experience with the tribe at the time touched only tangentially on intellectual property issues. But I know that the principle of sovereign immunity is part of the soul of Native American tribes. The PTAB's eclectic and idiosyncratic interpretation of sovereign immunity is, unfortunately, typical of the way tribes have often been treated by federal and state government entities. I too look for an appeal if only to get another chance for a more thorough interpretation.

If tribes want to retain or expand their sovereign immunity they could pick a more appropriate arrangement to enter into than lending out their names for so-called patent assignments (with de facto fully exclusive license and control grant-backs, as spelled out in detail in this decision) for a drug company to use to avoid IPR validity challenges to its patents.
An attempt to substitute a Potemkin Village patent owner was already shot down in the E.D.TX D.C.

There seems to have been an erroneous assumption by one party here that an IPR cannot proceed to a final judgement if a party withdraws or no longer participates? Also, an erroneous view of what the term "real party in interest or its prives" means in an IPR?

The "IPO News" ID's the most important issue: "..the PTAB panel said that “Congress has enacted a generally applicable statute providing that any patent (regardless of ownership) is ‘subject to the conditions and requirements of [the Patent Act].’” That statutory authorization extended to the USPTO’s authority “both to grant a patent limited in scope to patentable claims and to reconsider the patentability of those claims.” Inter partes review was therefore “appropriate without regard to the identity of the patent owner,” whose participation was not required."

Paul: I thought the most important issue was the determination that the Tribe is not an indispensable party, because that issue may resonate with other patent owners who assert sovereign immunity defenses (like state universities). What if a university grated a license to a commercial actor that was substantially the same as the Tribe's grant-back license? I think a similar line of reasoning would permit the IPR to proceed even if the patent was owned by a state university, don't you?

Thanks for the comments.

The statement is self-serving and is not in accord with basic principles of property - of which the AIA did not change.

Sorry, Mr. Morgan, but your tendencies as IPR cheerleader do not lend credibility to your attempts at Rah Rah.

Thanks Keven, and you may well be right, but the PTAB expressly refused to decide that question. And this is not a case where the one claiming immunity was the original patent owner representative.
But IPRs, unlike D.C.'s, do not have an "indispensable parties" requirement.* Also, the use of the word "owned" is strained as applied to an entity that has retained no significant incidents of actual ownership, as here.
*All patent owners must have notice and service of a copy of the IPR petition but none have to participate for the IPR to proceed.

As unfolding on the other blog, ownership of personal property is something that is not forced to be made of record by the Patent Office.

Yet another infirmity of the AIA with a mechanism outside of the Article III courts and with a forum that does not impose standing.

Mr. Morgan states that the PTAB does not have an "indispensable parties" requirement.

That can be combined with the line from the PTAB (dismissing any sense of comity) with its "this is an issue of first impression for us."

We truly have a court that is unfounded in any sense of the word (or how a court may traditionally be considered 'founded').

In essence, EVERYTHING is a matter of "first impression" for the PTAB - which, at least to the PTAB, means that they are not beholding to anything.

"We, therefore, determine that the Tribe is not an indispensable party,
and that we may continue with these proceedings without the Tribe’s
participation." p. 39 of the opinion

"the PTAB panel said..."

The PTAB panel has over reached.


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