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Native American Tribe Can't Be a 'Sovereign' Shield During Patent Review, Says Court (arstechnica.com)
Cyrus Farivar writes via Ars Technica: In a unanimous decision, an appellate court has resoundingly rejected the legal claim that sovereign immunity, as argued by a Native American tribe, can act as a shield for a patent review process. On July 20, the United States Court of Appeals for the Federal Circuit found in a 3-0 decision that the inter partes review (IPR) process (a process that allows anyone to challenge a patent's validity at the United States Patent and Trademark Office) is closer to an "agency enforcement action" -- like a complaint brought by the FTC or the FCC -- than a regular lawsuit.
This case really began in September 2015. That was when Allergan, a pharma company, sued rival Mylan, claiming that Mylan's generics infringed on Allergan's dry eye treatment known as Restasis. Saint Regis Mohawk Tribe was initially filed in the Eastern District of Texas, known as a judicial region that is particularly friendly to entities that are often dubbed patent trolls. By 2016, Mylan initiated the IPR. But Allergan, in an attempt to stave it off, struck a strange deal, transferring ownership of the six Restasis-related patents to the Saint Regis Mohawk Tribe, based in Upstate New York, near the Canadian border. As part of that deal, Allergan paid $13.75 million to the tribe, with a promise of $15 million in annual payments -- if the patents were upheld, that is. The Mohawk Tribe attempted to end the IPR, citing sovereign immunity, which was denied. The tribe struck at least one other similar deal with a firm known as SRC Labs, which sued Amazon and Microsoft.
This case really began in September 2015. That was when Allergan, a pharma company, sued rival Mylan, claiming that Mylan's generics infringed on Allergan's dry eye treatment known as Restasis. Saint Regis Mohawk Tribe was initially filed in the Eastern District of Texas, known as a judicial region that is particularly friendly to entities that are often dubbed patent trolls. By 2016, Mylan initiated the IPR. But Allergan, in an attempt to stave it off, struck a strange deal, transferring ownership of the six Restasis-related patents to the Saint Regis Mohawk Tribe, based in Upstate New York, near the Canadian border. As part of that deal, Allergan paid $13.75 million to the tribe, with a promise of $15 million in annual payments -- if the patents were upheld, that is. The Mohawk Tribe attempted to end the IPR, citing sovereign immunity, which was denied. The tribe struck at least one other similar deal with a firm known as SRC Labs, which sued Amazon and Microsoft.
The problem is not, if a patent is valid or not. The problem is how to determine if a patent is valid or not. If someone can claim souvereignity, the processual possibilities to invalidate a patent in his ownership are limited. Basicly he can say: Don't touch it, it's mine! And because the USPTO once agreed to the claims and issued the patent, it is valid as of now, and because of the don't-touch-it-doctrin, the state of validity can't be changed.
Silly question, but what would the case be if you replaced "native american" with any other citizenship that isn't US based?
For example say an Australian sent a patent filing to the USPTO, paid the fees, and the patent was initially granted without issue. Later the patent was challenged and the USPTO agreed it was not valid to be issued after all.
What happens?
It seems obvious the patent wouldn't be legally valid in the US, but what about Internationally?
Is the patent then only seen as invalid to the rest of the world due to a treaty, some equivalent of the berne convention of copyright but for patents instead?
Are sovereign native americans not a party to such a treaty?
I just don't understand why a native american tribe would be any different to any other countries citizen doing the same, or perhaps don't understand what you mean when you say "Don't touch it, it's mine" in this context.
Many states in the U.S have allowed the natives to skirt around various laws for god knows how many years as sort of repayment for what their ancestors did to them. To a foreigner like myself it seems to be pretty absurd, but to some people the idea of having the natives subject to the same laws as everyone else is somehow repressive.
Most of what they use their sovereign status for is skirting around gambling laws, but you do from time to time hear about suspect alliances like this where tribes help people get around various laws. Last example I heard of was one payday loan company, who operated in a different state, who used the claim of being associated with a tribe to skirt around loads of financial regulations. Thankfully the authorities saw right trough it and just dismantled the whole company. Even went as far as putting their executives in jail, thou one avoided jail by committing suicide, and having them forfeit most of their property.
The most shocking thing about that case was how dismissive the members of the tribe were to the distress of the people screwed over by the company, how they didn't see anything wrong with what the company did and how after the company's justified demise they were in the process of building up a similar enterprise themselves.
"Why should I want to make anything up? Life's bad enough as it is without wanting to invent any more of it."
Yes, the various bands were promised, by treaty (the highest law in the land as I understand it) and by later court verdicts, that they would be sovereign on their own land. But this has always been an empty promise. Any time it turned out they were sitting on land that turned out to be valuable, it just got taken away. Despite being sovereign nations in their own right, their young men were (and still are) subject to the draft. Despite being sovereign, federal law enforcement agencies have had a piss poor track record of respecting that and engaging in proper cooperation with any reservation police. In short, America (and Canada) have only allowed the native peoples a limited form of autonomy NOT sovereignty and always ignored even that when convenient.
With that kind of track record in place, I don't see how the St Regis Mohawk ever thought it might work. Mind you, that first 13.75 million was certainly welcome.
There's another angle by which this would have failed as well. Lets suppose, for the sake of argument, that the sovereign claims were upheld (ignoring the fact that questions of sovereignty are only properly address by Congress, not a lower Federal court). You would end up with a situation analogous to one company using a patent granted in the US while another company is paying for the license rights to a very similar US patent owned by the government of Canada so they can market a competing drug in the US. And if I read the summary right, it is on this basis that the judge ruled that a patent review can proceed. Regardless of who owns the patents, they are still patents issued by the US government for products being sold in the US.
Cynically of me, I don't think anybody involved expected this tactic to really work. They just thought it would long enough to make some money for them.
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The problem is not, if a patent is valid or not. The problem is how to determine if a patent is valid or not. If someone can claim souvereignity, the processual possibilities to invalidate a patent in his ownership are limited. Basicly he can say: Don't touch it, it's mine! And because the USPTO once agreed to the claims and issued the patent, it is valid as of now, and because of the don't-touch-it-doctrin, the state of validity can't be changed.
Silly question, but what would the case be if you replaced "native american" with any other citizenship that isn't US based?
For example say an Australian sent a patent filing to the USPTO, paid the fees, and the patent was initially granted without issue. Later the patent was challenged and the USPTO agreed it was not valid to be issued after all.
What happens?
It seems obvious the patent wouldn't be legally valid in the US, but what about Internationally?
Is the patent then only seen as invalid to the rest of the world due to a treaty, some equivalent of the berne convention of copyright but for patents instead?
Not a silly question, but it has an easy answer: US patents are only good in the US. You have to get a patent in every country you want to enforce your rights in. Most entities only get patents in the big countries as a rules - US, China, Japan, France, Germany, the UK, etc., with some occasional ones in other countries like Canada, Australia, India, etc., usually depending if they have a large market or competitor there. Hardly anyone bothers getting a patent in, say, Ghana.
There is an international treaty called the Patent Cooperation Treaty, but it's more procedural - you file a PCT application, and it gets an examination by WIPO and is then transmitted to each national patent office... And then you pay fees only in the countries you want a patent in, and those countries usually do a further examination. It saves a bit of money if you're going into more than about 3-4 countries, but it doesn't provide any substantive rights.
Are sovereign native americans not a party to such a treaty?
I just don't understand why a native american tribe would be any different to any other countries citizen doing the same, or perhaps don't understand what you mean when you say "Don't touch it, it's mine" in this context.
It has to do with sovereign immunity. Generally, you can't sue the US or a state unless there's a statute that gives you permission to do so (e.g. the Federal Tort Claims Act, etc.). The weird wrinkle with native americans is that the US has given them pseudo-sovereign status, so generally, you can't sue a tribe unless there's a statute that allows the suit.
So the tricksy part here is that the pharma company with the crap patent sold it to a tribe. One way to invalidate a patent is to initiate an Inter Partes Review before the Board of Patent Appeals at the USPTO, but that's kind of like "suing" the tribe, so they're immune, right?
Well, no. The Fed. Circ. threw that out in an entirely predictable decision.