Senator McCaskill introduces bill to abrogate Native American Sovereign Immunity

By Gene Quinn
October 5, 2017

Senator McCaskill (D-MO) has introduced a bill to abrogate the sovereign immunity of Indian tribes as a defense in inter partes review (IPR) proceedings at the United States Patent and Trademark Office. Indeed, the sole purpose of McCaskill’s short, ill-conceived and hastily assembled bill is to make it impossible for Native American Indian Tribes that own patents to assert sovereign immunity when those patents are challenged in proceedings at the Patent Trial and Appeal Board.

“Congress never imagined tribes would allow themselves to be used by pharmaceutical companies to avoid challenges to patents,” McCaskill said in a statement to Reuters. “And this bill will shut the practice down before others follow suit.”

McCaskill is talking about the Allergan deal with the Saint Regis Mohawk Tribe. Allergan transferred the RESTASIS® patents to the Tribe, with the Tribe granting back to Allergan an exclusive license. The purpose of this transaction was so that the Tribe could assert sovereign immunity and defeat the jurisdiction of the Patent Trial and Appeal Board (PTAB) of the United States Patent and Trademark Office. See also here and here.

While McCaskill has said that any “thinking person” would view this transaction as illegal, the problem she and her bill will face is the obvious discriminatory nature of the substance of the bill. She and her political directors have obviously not thought through this rash decision, which is understandable to some point given she wrote this bill before the Senate has had any opportunity to conduct an investigation into the Allergan deal with the Saint Regis Mohawk Tribe. Such legislation by ambush without any consideration of the issues, let alone thoughtful consideration, is sadly becoming all too commonplace in America.

Substantively, McCaskill’s bill says only this:

Notwithstanding any other provision of law, an Indian tribe may not assert sovereign immunity as a defense in a review that is conducted under chapter 31 of title 35, United States code.

The problem McCaskill faces is that her bill, even if enacted, will do absolutely nothing to do away with the potential thread that comes from the assertion of sovereign immunity at the PTAB. While it is true Indian Tribes enjoy sovereign immunity only to the extent Congress has not abrogated such sovereign immunity, States enjoy sovereign immunity stemming from the 11th Amendment of the United States Constitution. Absent amending the Constitution, Congress cannot abrogate State sovereign immunity.

The issue of State sovereign immunity is significant because on January 25, 2017, a panel of administrative patent judges (APJs) of the PTAB entered a series of decisions ending three IPR proceedings initiated by medical device developer Covidien LP prior to institution. Each of the Covidien IPRs challenged the validity of a single patent owned by the University of Florida Research Foundation (UFRF), which the university had previously asserted against Covidien. The IPR decisions of the PTAB explain that public research universities can find protection from review proceedings at the PTAB by claiming rights afforded them by the 11th Amendment. See UFRF’s Win on 11th Amendment at the PTAB.

What this means is McCaskill’s bill cannot and will not remove claims of sovereign immunity from PTAB proceedings. McCaskill’s bill would only discriminate against Native American Indian Tribes.

The only possible outcome of enacting the McCaskill bill would be to prevent Native American Indian Tribes from developing Technology Transfer offices that have the same inherit sovereign advantages of state universities.

An important question needs to be asked: Why is everyone so upset that Native American Indians are asserting sovereign immunity? No one was upset when it was the University of Florida Research Foundation. Would Senator McCaskill or other call it clearly illegal if Allergan or other companies were to do the same deal with a state university instead of a Native American Indian Tribe?

Discriminating against Native American Indian Tribes in order to continue a one-sided patent review process that unfairly disadvantages patent owners (see here, here, here and here, for example) is as unwise as it is unbelievable. After all, in a few months there is the very distinct possibility that the Supreme Court will rule all PTAB challenges to be unconstitutional, so why would Senator McCaskill submit obviously discriminatory legislation? Why would anyone in Congress rush to back this ill-conceived, mean-spirited piece of legislation that would do nothing other than once again subjugate American Indians?

Rather than rushing to discriminate, once again, against Native American Indians perhaps Senator McCaskill and others should take a critical look at why patent owners are lining up in search of deals with Indian Tribes. The PTAB is a rouge tribunal that must be addressed. Acting as if patent owners and Native American Indians are to blame for searching for a solution to the PTAB is misplaced and out of touch.

The Author

Gene Quinn

Gene Quinn is a Patent Attorney and Editor and founder of IPWatchdog.com. Gene is also a principal lecturer in the PLI Patent Bar Review Course and an attorney with Widerman Malek. Gene’s specialty is in the area of strategic patent consulting, patent application drafting and patent prosecution. He consults with attorneys facing peculiar procedural issues at the Patent Office, advises investors and executives on patent law changes and pending litigation matters, and works with start-up businesses throughout the United States and around the world, primarily dealing with software and computer related innovations. is admitted to practice law in New Hampshire, is a Registered Patent Attorney and is also admitted to practice before the United States Court of Appeals for the Federal Circuit. CLICK HERE to send Gene a message.

Warning & Disclaimer: The pages, articles and comments on IPWatchdog.com do not constitute legal advice, nor do they create any attorney-client relationship. The articles published express the personal opinion and views of the author and should not be attributed to the author’s employer, clients or the sponsors of IPWatchdog.com. Read more.

Discuss this

There are currently 34 Comments comments. Join the discussion.

  1. Invention Rights October 5, 2017 5:58 pm

    Follow up question. Could a sovereign nation own a patent and bring an infringement action in a U.S. court?

  2. Bemused October 5, 2017 6:19 pm

    I presume Senator Elizabeth Warren (a/k/a Pocahontas) is going to be incensed at fellow Democratic Senator McCaskill for introducing this bill….

  3. Paul Morinville October 5, 2017 6:47 pm

    I’m finding this a bit hard to believe. Stripping treaty rights from Indian tribes again. Haven’t we had enough of that in our history?

  4. Joachim Martillo October 5, 2017 7:07 pm

    It was too good to last. I wrote this comment previously.

    Seems like poetic justice. European invaders stole the real property of the natives. Now the natives get to own the intellectual property of the invaders.

    It might have been a good opportunity to discuss the tension in American history between those Americans that seek justice for all and those Americans that seek to exploit everyone they can.

    Obviously there are those that try to steal inventions made by others — hence pre-AIA 35 USC 102 (f).

    There are those that would debate to which group of Americans drug companies belong, but instead of looking at least one deeper level of the bigger picture, McCaskill rushes to look for a way to shore up a mechanism of stripping inventors of their intellectual property and of putting it in the public domain to the advantage of rich incumbents, who did not bother to do the research themselves.

    BTW, governments can certainly own patents. The US government owns many, which (surprise! surprise!) are not subject to invalidation via IPR.

  5. The Time Is Now To Act October 5, 2017 7:37 pm

    Gene,

    Thanks for getting this article posted. I have already been on the phone this afternoon reaching out to colleagues who represent several large tribal governments. This action by Sen. McCaskill will spread quickly across counsel for Indian tribes of which there are many in and around Missouri. She should not have done this.

    What a bunch of clowns!!!

    The Founders drew up the U.S. patent system so that *Team USA* would shine on the global stage as an external bright light of invention. Ahem, not TEAM DEEP POCKETS.

    We are certainly not shining as a NATION of innovators at the moment.

  6. Pete October 5, 2017 9:07 pm

    Truly a said day that is constantly repeated in America when you see this lady who is a democratic leader blatantly discriminating against Native Americans I guess their skin is not dark enough

  7. LLDC October 5, 2017 11:58 pm

    How many federally recognized tribes are in MO? OR better yet, how much money does McCaskill take from Allergan and Big Pharma?

    Did she consult with anyone from the Bureau of Indian Affairs?

  8. Judge Rich's Ghost October 6, 2017 12:55 am

    Let’s not forget that, but for Western Europeans, Native Americans would still be relying on a non-written language and fighting each other in tribal battles. I appreciate the history of Native Americans vis-a-vis European expansion, but let’s not forget that the multitude of advances by Western Civilization.

  9. Judge Rich's Ghost October 6, 2017 1:04 am

    More to the substance, if Congress is going to abrogate immunity for actions under Chapter 31, why not also include Chapter 32 (PGRs and CBMs)?

  10. Bluejay October 6, 2017 7:05 am

    Bill is a payback for past donations and solicitation for her re-election campaign.

  11. Ternary October 6, 2017 8:53 am

    “Why would anyone in Congress rush to back this ill-conceived, mean-spirited piece of legislation that would do nothing other than once again subjugate American Indians?” Absolutely.

    Why would any Democrat at this stage voluntarily stick her/his neck out for the anti-patent crowd and tick off American Indians and the many people who are concerned about their plights? McCaskill is undoing Dick Durbin’s efforts to have the Democrats trying to restore their reputation related to innovation quicker than you can file a petition for IPR.

  12. Anon2 October 6, 2017 9:18 am

    Medical and health based goods and services are always first to be attacked by the regressive left.

    Never mind the rights to the fruits of their own labor, of those individuals who have created the medicines and techniques and miracle devices that save and improve countess lives. Never mind a doctor’s inalienable right to set the terms of the services he provides to his potential clients on a voluntary basis.

    Need is an entitlement, a claim on the goods and services of others, a claim on the life and rights of others. Patents? IP rights for inventions on pharmaceuticals? A right to profit from what you sell or what services you provide? What of those… when people are in need… (to the pharma companies) their right to live trumps your right to live because they need what you have made possible.

    It is no surprise that such a swift attack would occur. As long as need trumps rights in the culture there will be continual erosion of any rights in medicine and health care business until there is single payer medicare, then doctors will become de facto government workers, there will be price controls on all medical services and pharmaceuticals, and what will follow after complete violation of the rights of those who would dare aspire to practice in the business of medicine and health, is a shambling ineffective guarantee of third world medicine at bloated costs, for everyone.

  13. Moocow October 6, 2017 9:58 am

    @ Invention Rights at 1. : Yes a sovereign nation could own a patent and bring an infringement action. And because they are the ones who brought the suit, they waived sovereign immunity against all affirmative defenses and compulsory counterclaims. In other words, if a sovereign entity sues to enforce its patent rights, the defendant can mount a full and fair defense in that lawsuit.
    Which is, frankly, the way sovereign immunity (if one accepts it) should work. The sovereign plaintiff (state, tribe, government) is deemed to consent to defending the patent’s validity in the suit. What they didn’t consent to, however, is getting dragged into a parallel administrative pseudo-trial where infringers and their proxies take second bites at the patent under lower burdens of proof, different claim constructions, and rudimentary procedural protections. Makes sense to me.

  14. Anon October 6, 2017 9:59 am

    Surprisingly, I have mixed emotions on the write-up of this article.

    As regulars may attest, I am no fan of IPRs (or most things AIA).

    Further, the McCaskill quote (not sure of the exact context) of “Congress never imagined tribes would allow themselves to be used by pharmaceutical companies to avoid challenges to patents, [a]nd this bill will shut the practice down before others follow suit.” to me smacks of an almost eager paternalism that belies the fact that NO ONE FORCED the tribes to enter any such deal. Such paternalism almost defying both any understanding of freedom to contract, as well as not being very well versed in the rather ignoble history of this country and its relations with native americans. As I pointed out in an earlier thread, “sham” (which is seemingly a forgone conclusion to Ms. McCaskill), is not present here – leastwise in the legal sense of the word. It is a bit startlingly to hear a lawmaker throw out a “legal opinion” that is basically so uninformed (“While McCaskill has said that any “thinking person” would view this transaction as illegal,…“).

    HOWEVER,…

    I find the compare (and lack of contrast) with State immunity to be underwhelming. It is a bit of a fallacy to compare the two, and then not recognize that the very action here of targeting the tribe sovereign immunity status is something that pre-exists in the legal structure. Put simply, the basic fact that Congress may – if it so chooses – abrogate Tribal Sovereignty and such just is not something “made up” by Ms. McCaskill. To see such a “quick labelling” appears to be playing “the race card,” which is something that I personally think is a rather weak position to take.

    There are better (and more fundamental) reasons that can be brought to bear.

  15. Chris Gallagher October 6, 2017 10:07 am

    Sen. McCaskill’s modern “Manifest Destiny” misses the point. Creative avoidance of PTAB will continue to flourish as long as PTAB is permitted to discriminate against patent holders.

  16. John Ogilvie October 6, 2017 10:45 am

    I’m not a patent litigator, but this is interesting even from a prosecution perspective. If I’m understanding the flow of this thread, the next logical development will be deals with other sovereigns, especially those who already have little to fear from annoying the US government or minimal exposure to US diplomatic pressure. North Korea? Iran? How about lower profile Bhutan, which according to Wikipedia has no formal ties to the US. Regardless of the specifics, it seems like another Pandora’s PTAB box is opening.

  17. Gene Quinn October 6, 2017 10:52 am

    Chris-

    Very well put! That is exactly right.

  18. Gene Quinn October 6, 2017 10:56 am

    The Time Is Now To Act-

    If your colleagues who represent the tribal governments you mentioned might be interested in writing an op-ed for publication I would be very interested in offering a platform to push it out. Please feel free to reach out directly to make an introduction if appropriate.

    -Gene

  19. Bemused October 6, 2017 10:57 am

    Anon: “There are better (and more fundamental) reasons that can be brought to bear.” Please continue… 🙂

  20. Paul Morinville October 6, 2017 11:15 am

    Judge Rich’s Ghost @8. “Let’s not forget that, but for Western Europeans, Native Americans would still be relying on a non-written language and fighting each other in tribal battles.”

    What makes you say that? Do you think natives would have stayed the same? Were they not inventive and industrious? Are they not now?

  21. Gene Quinn October 6, 2017 11:20 am

    Judge Rich’s Ghost-

    So you wound up wrong about Aqua Products and instead of a mea culpa you decide to say something extraordinarily racist here instead? Are you kidding?

    I guess the Trail of Tears was a gift to Native Americans.

    https://en.wikipedia.org/wiki/Trail_of_Tears

  22. Moocow October 6, 2017 11:27 am

    @ John at 16.: The Foreign Sovereign Immunities Act has a provision for state-sponsored commercial activity, i.e. where the foreign government simply acts like a corporation would. So if e.g. an Australian federal research agency owns a U.S. patent and asserts it a little too forcefully in licensing negotiations, it can be targeted for a lawsuit in US court like any other patent holder. In that sense, sovereign immunity of foreign governments is weaker than that of U.S. state universities.
    That said, I think you raise an interesting point. If, say, a small U.S. technology company were to assign its patents to the King of Bhutan, and those patents were then asserted in patent litigation against a patent-infringing big tech company in U.S. court — when the patent infringer then predictably tries to start an IPR proceeding, could the King of Bhutan invoke his sovereign immunity against the PTAB? The FSIA only abrogates foreign sovereign immunity to the jurisdiction of “courts of the United States or of the States.” The PTAB is many things, but it’s not yet a “court of the United States.”

  23. Peter Corcoran October 6, 2017 12:03 pm

    And she’s a Democrat? I remember in law school all the Dems attacking me for taking a stance in a Trademark case when the issue didn’t even involve Indian rights. I thought to myself, “What are they talking about?” (I found myself saying that a lot in law school.) But, then, of course, the professor was a lesbian, and they were just trying to score points with her. Hypocrisy knows no bounds for the Dems.

  24. Confused Pharmacist October 9, 2017 2:32 am

    Wow, a pharma company gaming the system by paying off and taking advantage of a Native American tribe… That’s the lowest of the low. Seems eerily familiar to how people think that they can use a corporation or an LLC to shield themselves, yet the doctrine of piercing the veil remains as part of the law explicitly to prevent this from happening. I see no problem with sensible legislation to prevent this evasion of justice by treating a vulnerable and disadvantaged group of people as a human shield. Everyone that perversely defends this on the grounds that it discriminates against Native Americans ignores the fact that the companies themselves are invidiously targeting them in order to simply use them. Please drop the pretense that this is about concern for Native Americans. On a similar note, how is it possible to hold the view that, for instance, the Redskins should be allowed to keep their trademark because of “intellectual property” and at the same time believe “oh no, the PTAB is discriminating against those poor native peoples?” You guys should be ashamed of yourselves. Say what you want about the role that patents play (i.e. private property debate) but don’t kid yourselves when you argue that this is really about Native American sovereignty…

  25. Moocow October 9, 2017 6:21 am

    @ Confused at 24: Why don’t you go talk to the tribe; ask them if they feel used? Oh wait — they’re too ‘disadvantaged’ to understand what’s really being done to them, right? So bills like McCaskill’s are really meant to protect these poor people. Now I get it. Thank you for injecting a little beneficent paternalism into this debate, really puts things into perspective.

  26. Gene Quinn October 9, 2017 11:01 am

    Confused Pharmacist-

    You are most certainly confused.

    You say: “sensible legislation”

    McCaskill’s bill is anything other than sensible. It is actually moronic. She would prevent Indian Tribes from asserting sovereign immunity with respect to IPR proceedings but not with respect to PGR or CBM proceedings. That is anything other than sensible. It is stupid. Furthermore, the bill doesn’t prevent states from asserting sovereign immunity, so it does exactly what I said it does, which is discriminate against Indian Tribes while allowing state universities from continuing to assert sovereign immunity. That type of racial discrimination is something that democrats are supposed to loathe. I guess you can get away with blatant discrimination as long as there is a D after your name.

    You also say: “the companies themselves are invidiously targeting them in order to simply use them.”

    Only a shill or someone who is wholly ignorant could make such a ridiculous statement. The Tribes are receiving a lot of money for their troubles. That is hardly being used.

    You ask: “how is it possible to hold the view that, for instance, the Redskins should be allowed to keep their trademark…”

    Because the law for the last century was that in order to demonstrate that a mark is disparaging you need contemporaneous evidence that the mark is disparaging. The Redskin mark was trademarked in the 1920s, the evidence submitted showing it was disparaging was from the 1970s and 1980s, which is not contemporaneous. So legally there was no evidence. So my analysis was simply a legal one.

    Furthermore, if you actually look at the surveys, which I’m sure you haven’t and won’t because they would require you to cease being ignorant on the issue, you’d find that Native Americans do not find the name Redskins to be disparaging. White Americans find the name to be disparaging, but that isn’t the correct sample.

    Finally, the Supreme Court has said the disparagement clause violates the First Amendment, mooting the entirety of the issue.

    You say: “You guys should be ashamed of yourselves.”

    No, you should be ashamed for having an opinion and voicing it when you clearly don’t know anything about what you are talking about. When you are completely ignorant it is best to keep quiet.

  27. lenehey October 9, 2017 12:09 pm

    I’m with Confused Pharmacist. Moocow, whether the tribes think this is harmful to them is not the point. It’s harmful to the *patent system.* You’re defending a practice that allows big companies who own dubious patents to protect them from IPR by paying off the tribes to intervene. Of course the tribes like this arrangement, but it is bad for consumers who have to pay unreasonably high monopolistic prices for their prescription medication that should be available in the generic market but for patent that takes years and millions of dollars to invalidate in court.

    It really is astonishing that so many people here support such a maneuver by Allergan. And to suggest that McCaskill is going against her “democratic principles” by favoring a free market over big pharma for prescription drugs that should never have been patented is ridiculous.

  28. Gene Quinn October 9, 2017 12:26 pm

    lenehy-

    What the Indian Tribes are doing is harmful to the patent system, but having a Kangaroo court like the PTAB isn’t harmful to the patent system?

    What is astonishing is that you can actually condemn a completely legal transaction while turning a blind eye to the systemic abuses of the PTAB.

    http://www.ipwatchdog.com/2017/09/11/solution-ptab-disband-runaway-tribunal/id=87844/

  29. lenehey October 9, 2017 1:11 pm

    While I certainly think that improvements can and should be made, that hasn’t been my experience with the IPR process. Granted, I come at it from Tech, not Pharma. Personally, I think the Supreme Court has, in recent years, done far more harm to the patent system than the AIA, but I’m not proposing we do away with the Supreme Court. And I certainly do not support giving sovereign powers (of any stripe) the *right* to access *federal* courts to enforce patent interests granted by the U.S. federal government in the first instance.

  30. Gene Quinn October 9, 2017 4:16 pm

    lenehy-

    Not your experience with the IPR process? You do realize the PTAB has allowed judges to decide cases where there are serious conflicts of interest? You do realize that the PTAB openly refuses to accept and consider timely submitted evidence? You do realize they have ruled an MRI machine to be an abstract idea? And I could go on and on and on.

    Sure, the Supreme Court has done a lot of damage, but to pretend or suggest that the PTAB is not a run away tribunal that is seriously out of control is to ignore what is actually happening.

  31. lenehey October 10, 2017 11:41 am

    Your narrative of “runnaway tribunal” is based on anecdotal evidence, and not at all convincing to me. The PTAB has reviewed 6,878 IPR petitions and instituted 3,774 trials, about 46% resulting in a final written decision. I’m sure you can pick out many, many cases where there was some flaw. IPRs deal with complex issues with limited information, time, and expertise. IPRs are not perfect because people are imperfect. I would posit that the overwhelming majority of IPRs arrived at the correct result in a reasonable time and at a much lower cost than it would have required in court.

  32. Durnik October 10, 2017 7:45 pm

    The senator proposes a bill which treats Native Americans like every other race, and it’s her that’s discriminating? Why do the critics of the senator feel like Native Americans should be the only race treated one way while every other race is treated another? Is special treatment somehow okay only so long as it’s for non-whites?

    While I hate the PTAB too, sovereign immunity is a loophole and she’s proposing a step towards closing the loophole, plain and simple. It’s not a perfect bill, but allegations of racial discrimination are merely grabs at attention, which I had hoped this blog was above.

  33. Gene Quinn October 11, 2017 11:41 am

    Durnik-

    Frankly, I don’t know how anyone who actually reads the bill and gives this issue independent, non-political thought can come to any conclusion other than that the bill is discriminatory. The bill specifically identifies a class of people based on their race, which clearly and unambiguously makes the bill discriminatory. Senator McCaskill’s bill applies only to Native American Indians.

    When attempts have been made to limit or eliminate affirmative action programs they have been roundly criticized as targeting African Americans. It is really befuddling to me how there can be such a different reaction when Native American Indians are involved. The bill is clearly discriminatory.

    Whether sovereign immunity is a good idea or not really isn’t the issue. If claiming sovereign immunity at the PTAB is problematic it should be problematic for white, black, yellow and red, not just for red, which is what McCaskill’s bill says. McCaskill would do nothing about state universities and has said nothing to my knowledge about attempting a Constitutional amendment to strip states of sovereign immunity at the PTAB. Further, her bill would do nothing to prevent other sovereigns from claiming immunity at the PTAB. Still further, her bill would still allow for even Native American Indian Tribes to claim sovereign immunity in post grant review and covered business method proceedings. Yet you say I’m the one trying to grab attention?

    McCaskill is engaging in grandstanding of the worst kind. She complains about a problem and her solution won’t save the problem, although it would disadvantage Native America Indians. Disadvantaging Native American Indians while allowing others to continue to have the same ability to claim sovereign immunity is what makes the bill discriminatory.

  34. Joachim Martillo October 11, 2017 11:53 am

    The issue is not treating one race differently from another. The issue is domestic sovereigns. Tribes like states have been part of the US Constitution since day 1. There is a lot of case law that treats tribes as domestic sovereigns.

    Even the racists that comment here should focus IP issues and eschew the coded racism. I doubt anyone is interested. I am not.

    Durnik’s comment is part of the old tradition in US politics of trying to clothe discrimination as somehow strict construction or anti-discrimination.

    In 1865 racist Democrats campaigned under the slogan: “The Union as It Is — the Constitution as It Was.”

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