ADVANCED PATENT LAW INSTITUTE Venue Panel Nimalka Wickramasekera, Winston & Strawn LLP

Sovereign Immunity & Patent Litigation The Eleventh Amendment Who can assert: States & arms of the state (e.g., state universities, state agencies in certain circumstances) McCullogh v. Maryland, 17 U.S. (4 Wheat.) 316, 350-51 (1819) Effect: In patent context, Eleventh Amendment sovereign immunity from suits for patent infringement & declaratory judgment of invalidity or noninfringement Waiver: State may expressly waive sovereign immunity from suit State voluntarily becomes party to a cause and submits its rights for judicial determination Gunter v. Atl. Coast Line R.R., 200 U.S. 273, 284 (1906)

Sovereign Immunity & Patent Litigation Sovereign Immunity & Indian Tribes Unique political entities: not a foreign nation and not a state Subject to the plenary control of Congress “It is fundamentally Congress’s job, [not Article III courts], to determine whether or how to limit tribal immunity. The special brand of sovereignty the tribes retain—both in its nature and its extent—rests in the hands of Congress.” Michigan v. Bay Mills Indian Comty., 134 S.Ct. 2024, 2037 (2014)

Sovereign Immunity & Patent Litigation State Sovereign Immunity – Patent Venue and Jurisdiction Does sovereign immunity apply to suits brought by states? No. Regents of the Univ. of California v. Eli Lilly and Co., 119 F.3d 1559 (Fed. Cir. 1997); In re Regents of Univ. of California, 964 F.2d 1128, 1133 (Fed. Cir. 1992). Relying on Supreme Court precedent, the Federal Circuit ruled that: “We discern no principle of state sovereign immunity slighted by the Multidistrict Panel’s order. Principles of federalism are not compromised by this result.” Regents of Univ. of California, 964 F.2d at 1133. “The Eleventh Amendment applies to suits ‘against’ a state, not suits by a state.” Regents of the Univ. of California v. Eli Lilly and Co., 119 F.3d 1559 (1997).

Sovereign Immunity & Patent Litigation State Sovereign Immunity – Patent Venue and Jurisdiction Does sovereign immunity apply to compulsory counterclaims? No. Regents of Univ. of New Mexico v. Knight, 321 F.3d 1111 (Fed. Cir. 2003). State university sued inventors in federal court, seeking declaratory, injunctive, and monetary relief on patent and state law claims and the defendants counterclaimed On appeal, Federal Circuit upheld summary judgment that university is owner of patents, but affirmed counterclaim for royalties because they arose from the same transaction as contract giving university patent ownership “[C]ompulsory counterclaims, while being limited to those that arise from the same transaction or occurrence, allow for adjudication of counterclaims that are not strictly of the ‘same kind or nature,’ but should be ligated together.” Id. at 1125.

Sovereign Immunity & Patent Litigation State Sovereign Immunity – IPRs Does state sovereign immunity apply to IPRs? According to PTAB, yes. Covidien LP, v. Univ. of Florida Research Found. Inc., IPR2016- 01274-76, Paper 21 (PTAB Jan. 25, 2017). PTAB held state university was entitled to Eleventh Amendment immunity defense to the institution of an inter partes review (IPR) “On the whole, considering the nature of inter partes review and civil litigation, we conclude that the considerable resemblance between the two is sufficient to implicate the immunity afforded to the States by the Eleventh Amendment.” (Id. at 24.) The Board further stated: “[W]e are not persuaded that an inter partes review is an in rem action directed only to the patent and not against the patent owner.” (Id. at 13.) “[W]e are not persuaded that an inter partes review is an action brought by the federal government against a state.” (Id. at 16.)

Sovereign Immunity & Patent Litigation Tribal Sovereign Immunity – IPRs Does tribal sovereign immunity apply to IPRs? TBD. Mylan Pharm. Inc., et al., v. Saint Regis Mohawk Tribe, IPR2016- 01127-32 (PTAB). One month after IPR filed against six Orange Book-listed patents for Restasis®, Allergan, Inc. assigned patents to St. Regis Mohawk Tribe Allergan licensed back patents for $13.75 million upfront and $15 million in annual royalties while patents remained valid IPR Timeline: June 3, 2015 – Mylan filed six petitions for inter partes review (additional petitions filed by Teva and Akorn) December 8, 2016 – PTAB instituted IPR September 8, 2017 – Allergan assigned patents to Saint Regis Mohawk Tribe September 22, 2017 – Saint Regis Tribe moved to dismiss IPR petition October 13, 2017 – Petitioners submitted oppositions to dismissal December 1, 2017 – Amicus Curiae submitted briefs to address Tribal Sovereign Immunity

Sovereign Immunity & Patent Litigation Tribal Sovereign Immunity – IPRs Does tribal sovereign immunity apply to IPRs? TBD. Mylan Pharm. Inc., et al., v. Saint Regis Mohawk Tribe, Cont. St. Regis Tribe arguments: Tribe’s sovereign immunity applies to inter partes review proceedings, just as it does to other adjudicatory proceedings As a sovereign, it cannot be sued unless: Congress unequivocally abrogates its immunity; or Tribe expressly waives it IPR cannot proceed without Tribe because it is an indispensable party as new owner of the patents

Sovereign Immunity & Patent Litigation Tribal Sovereign Immunity – IPRs Does tribal sovereign immunity apply to IPRs? TBD. Mylan Pharm. Inc., et al., v. Saint Regis Mohawk Tribe, Cont. Petitioners’ arguments: A “sham” assignment cannot subvert a cornerstone of patent reform . . .threaten[ing] not just these IPRs, but the integrity of the patent system, encouraging others to follow the same business plan.” Even if Tribe is not an indispensable party: Allergan adequately represents all interests in the patents Board can afford complete relief among existing parties without Tribe’s presence No risk of inconsistent obligations because patentability is sole issue IPRs are not subject to tribal immunity because Board: Simply reviews compliance with patent laws Does not compel parties to act Can enter judgment without party participation Board, as a statutory creature, only has authority to act under its enabling statute with no power to determine or abrogate sovereign immunity

Sovereign Immunity & Patent Litigation Tribal Sovereign Immunity – IPRs Does tribal sovereign immunity apply to IPRs? TBD. Mylan Pharm. Inc., et al., v. Saint Regis Mohawk Tribe, Cont. 15 Amicus Curiae briefs submitted to the PTAB Those in support of the Tribe argue, inter alia, that: The assignment from Allergan to the Tribe is a legitimate transfer of patent rights PTAB has no authority to control or determine the availability of sovereign immunity Participation in the patent system does not constitute a waiver of tribal sovereign immunity

Sovereign Immunity & Patent Litigation Tribal Sovereign Immunity – IPRs Does tribal sovereign immunity apply to IPRs? TBD. Mylan Pharm. Inc., et al., v. Saint Regis Mohawk Tribe, Cont. Those in support of the Petitioners argued, inter alia, that: Tribe cannot impose sovereign immunity against the United States and tribes must comply with statues of general applicability Tribal sovereign immunity is not applicable to IPRs PTAB only has jurisdiction over patents, not Patent Owner Sovereign immunity should not be allowed to impact PTAB’s duty to protect public’s interest in seeing that patent monopolies are kept within their legitimate scope

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