Today the Federal Circuit (Judges Moore, Dyk, and Reyna) ruled in St. Regis Mohawk Tribe v. Mylan Pharmaceuticals Inc. that tribal sovereign immunity does not apply in IPR proceedings. The appeal represented the first opportunity for the Federal Circuit to address the issue of sovereign immunity in IPR proceedings.

The case arose when Mylan requested IPR of several listed patents associated with Allergan’s Restasis® product. Mylan’s petitions were joined by Teva and Akorn.  Shortly before the Board’s scheduled trial, Allergan and the St. Regis Mohawk Tribe entered an agreement under which Allergan purported to transfer title in the patents to the Tribe and agreed to make certain payments to the Tribe, and the Tribe agreed to assert tribal sovereign immunity in the IPRs. The Tribe thereafter moved to terminate the IPRs based on tribal sovereign immunity, and Allergan moved to withdraw from the IPR proceedings. The Board denied both motions, and Allergan and the Tribe appealed.

The Federal Circuit affirmed. The court noted that tribal sovereign immunity generally does not extend to actions brought by the federal government, including agency actions. The court looked to Federal Maritime Commission v. South Carolina State Ports Authority, 535 U.S. 743 (2002) (“FMC”)—a state sovereign immunity case—and concluded that the Supreme Court recognized a distinction between adjudicative proceedings brought against a sovereign by a private party, and thus subject to immunity, and agency-driven enforcement proceedings where immunity would not apply.

In applying that distinction, the court emphasized that IPR is a “hybrid proceeding” that does not align precisely with an adjudicative proceeding between private parties or an agency enforcement action brought by the federal government. The court concluded, however, that IPR is more like an agency enforcement action than a civil suit brought by a private party for sovereign immunity purposes. First, the PTO Director, as a politically accountable federal official, has complete discretion to decide whether to institute IPR, unlike the agency adjudicator in FMC that had no discretion to refuse to hear the suit. Second, the Board can proceed with an IPR with or without the parties, indicating that IPRs ultimately represent the agency “reconsidering its own grant of a public franchise.” Third, the court highlighted differences between the Board’s IPR procedures and the Federal Rules of Civil Procedure, including opportunities to amend a complaint versus an IPR petition, the possibility of amending challenged claims, the breadth of permitted discovery, and the conduct of oral hearings. Fourth, the court noted that the existence of other agency proceedings (ex parte and inter partes reexamination) that the parties agreed were beyond the reach of tribal sovereign immunity “does not mean that IPR is thus necessarily a proceeding in which Congress contemplated tribal immunity to apply.” Based on those considerations, the court concluded that tribal sovereign immunity cannot be asserted in an IPR.

The court limited its decision to the question of tribal sovereign immunity in IPRs, noting “many parallels” to state sovereign immunity but expressly leaving open what role, if any, the latter may play in IPRs.

Judge Dyk joined the majority opinion but wrote separately “to describe in greater detail the history of inter partes review proceedings” that he believed confirmed that IPRs “are fundamentally agency reconsiderations of the original patent grant, proceedings as to which sovereign immunity does not apply.”

Perkins Coie represented Mylan before the Federal Circuit and the Board. The discussion above should not be attributed to Mylan.