Laurence Tribe, Erwin Chemerinsky say PTAB should recognize Tribal Sovereign Immunity

By Derek Gilliland
December 7, 2017

EDITORIAL NOTE: What follows is the Summary of the Argument from an amicus brief filed by a distinguished list of Scholars, including Laurence Tribe and Erwin Chemerinsky. The brief filed at the Patent Trial and Appeal Board (PTAB), which was filed by attorney Derek Gilliland, is in support of the Saint Regis Mohawk Tribe assertion of tribal sovereign immunity. For more on this topic please see our Saint Regis Mohawk archive

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Laurence Tribe (left), Erwin Chemerinsky (right).

Laurence Tribe (left), Erwin Chemerinsky (right).

Petitioners Mylan Pharmaceuticals, Inc. et al. contend that “[c]ourts and agencies have the power and duty” to deny assertions of tribal sovereign immunity to prevent what they call “abuses.” Petrs. Opp. to Motion to Dismiss, Paper 87, IPR2016-01127 (Oct. 13, 2017), at 10. Petitioners maintain that “[s]overeign immunity does not require respect for an agreement designed to protect patents from review.” Id. at 13. They describe the Tribe’s assertion of immunity as being part of a “sham” (id. at 2, 10, 11, 12, 13), a “contrivance” (id. at 3), a “manipulation” (id. at 15), and a “rent-a-tribe” scheme. Id. at 10 (internal quotation marks and citation omitted). They urge the Board to withhold tribal immunity to protect “the integrity of the patent system” (id. at 13) and to prevent patent owners from “reap[ing] a windfall at the public’s expense.” Id. at 11 (citation and internal quotation marks omitted); id. at 12 (“private gain at public expense . . . is no justification for extending tribal immunity”).

Petitioners’ contentions miss the mark. Tribal sovereignty is not a “sham” or a “contrivance,” even when it produces results Petitioners do not like. There is no dispute that the St. Regis Mohawk Tribe is what the Supreme Court has termed a “domestic dependent nation[]” (Cherokee Nation v. Georgia, 30 U.S. 1, 17 (1831) (Marshall, C.J.)) entitled to tribal sovereign immunity and that its agreement with Allergan is a legitimate contract. Further, the Tribe has explained that the contract serves its sovereign interests and represents an important part of its technology development plan, a project that is saturated with sovereign importance, in part because it complements the Tribe’s modest tax base. See Michigan v. Bay Mills Indian Community, 134 S. Ct. 2024, 2043-45 (2014) (Sotomayor, J., concurring).

Moreover, Petitioners’ objections are being raised in the wrong forum. Congress – rather than the Board, the Article II executive, or even the Article III courts – controls the availability of tribal sovereign immunity. As the Supreme Court has explained, “it is fundamentally Congress’s job, not ours, to determine whether or how to limit tribal immunity. The special brand of sovereignty the tribes retain—both its nature and its extent—rests in the hands of Congress.” Bay Mills Indian Community, 134 S. Ct. at 2037. Congress has not withdrawn tribal immunity in patent cases. Where a patent owner makes a prima facie showing of tribal sovereign immunity, the Board should recognize that showing and decline to consider the kind of challenges to immunity that Petitioners seek to raise. There is no warrant for the Board to entertain Petitioners’ policy objections to the Tribe’s assertion of sovereign immunity, and doing so would interfere with Congress’s plenary and exclusive responsibility for setting the boundaries of tribal immunity.

The Board has already adopted a similar approach in recognizing the sovereign immunity of three state universities. See Covidien LP v. Univ. of Fla. Research Found. Inc., IPR2016-01274, Paper 21 at 39 (Jan. 25, 2017); Neochord, Inc. v. Univ. of Md., et al., IPR2016- 00208, Paper 28 at 20 (May 23, 2017); Reactive Surface Ltd., LLP v. Toyota Motor Corp., IPR2016-01914, Paper 36 at 17 (July 13, 2017). The Board should follow the same approach with respect to tribal sovereign immunity.

The Supreme Court’s decision in Republic of Philippines v. Pimentel, 553 U.S. 851 (2008), provides instruction for the proper resolution of this proceeding. In Pimental, the Supreme Court held that an interpleader action could not proceed in the absence of the Republic of the Philippines and a government-created commission, which were protected by sovereign immunity. The Court explained that, once a tribunal recognizes that an assertion of sovereign immunity is “not frivolous,” it is “error” for the tribunal to proceed further to address the merits. Id. at 864. “[W]here sovereign immunity is asserted, and the claims of the sovereign are not frivolous,” the tribunal should accept those claims. Id. at 867. The Board should follow that approach here and decline to consider Petitioners’ policy objections to tribal sovereign immunity.

The Author

Derek Gilliland

Derek Gilliland is a partner with Nix, Patterson & Roach LLP, where he handles all manner of complex litigation. For the last several years he has focused on intellectual property and oversees the firm’s intellectual property litigation practice, which primarily operates out of the firms Dallas office. Derek has been an instrumental member of the trial teams for the firms two biggest intellectual property verdicts. In 2010, he was a key member of the trial team for DataTreasury in its trial against US Bank, which resulted in a $27,000,000 settlement that was enhanced to $54,000,000 for willfulness. In 2013, Derek was the lead trial lawyer for the team that obtained a $95,795,507 verdict for Syntrix against Illumina in federal court in Tacoma, Washington. For more information, or to contact Derek, please visit his firm profile page.

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 24 Comments comments. Join the discussion.

  1. Bemused December 7, 2017 10:06 am

    Here’s my prediction: The PTAB will continue to show its arrogance by simply ignoring clear-cut SCOTUS precedent and rule that the sovereign immunity defense is not applicable in this case by focusing on the purported “sham transaction” aspect of the assignment between Allergan and the Saint Regis Mohawk Tribe.

    The CAFC will vacate that ruling (not because they really want to but because they’re tired of getting their butts kicked by SCOTUS). Who wants to bet a coffee on that prediction? 🙂

  2. Anon December 7, 2017 1:25 pm

    Bemused,

    by focusing on the purported “sham transaction” aspect of the assignment between Allergan and the Saint Regis Mohawk Tribe.

    If only.

    By this, I mean that “sham” has a rather particular meaning as a legal term of art – and as I explicated way back when this case was first discussed, the deal here does NOT rise to that legal meaning.

    PTAB’s “focus” then – IF completed properly – would show that sovereign immunity WOULD be in play.

  3. Gene Quinn December 7, 2017 2:00 pm

    Bemused-

    I’m not going to be a coffee (or anything) against the PTAB doing what is proper, but I agree with Anon. The term “sham” is a specific term that has a very particular legal meaning. Tribe and Chemerinsky are exactly right, this is no sham. There was adequate consideration.

    Will be interesting to see how things turn out.

  4. Bemused December 7, 2017 2:18 pm

    Anon/Gene: Couldn’t agree more with y’all about the legal implication/analysis of what a “sham” transaction is (or isn’t). But then again when has doing what is legal (i.e. mandated under that pesky thing called the law) stopped the PTAB from reaching the results it (or its pay-masters) desires?

  5. Gene Quinn December 7, 2017 3:08 pm

    Bemused-

    You ask: “when has doing what is legal stopped the PTAB?”

    Answer: Rarely, if ever, at least in so far as I can tell.

  6. Joachim Martillo December 7, 2017 4:07 pm

    It’s not a matter of law, but I know Professor Tribe cares about issues of racism and of political or economic inclusion or exclusion. The Linkedin article at the end touches upon issues of exclusion of native Americans politically and economically.

    This passage from the Amici Brief caught my attention.

    They [Mylan and Teva] urge the Board to withhold tribal immunity to protect “the integrity of the patent system” (id. at 13) and to prevent patent owners from “reap[ing] a windfall at the public’s expense.” Id. at 11 (citation and internal quotation marks omitted); id. at 12 (“private gain at public expense . . . is no justification for extending tribal immunity”).

    It is a fair excerpt form the opposition to the motion to dismiss. I would quote from Mylan and Teva’s document, but it’s encoding makes it hard to extract the passage and to paste it in the response box.

    Anyway the more I read these briefs and memoranda, the more convinced that all this economic crap should be ignored unless written by a completely independent mathematical economist, who has a proven grasp of game theory.

    As far as I can tell, Mylan and Teva want to piggyback for free on Allergan’s research. That is equivalent to taking money from one hyperwealthy pharmaceutical firm to put it in the coffers of another pharmaceutical firm. Now it might lower some drug prices temporarily, but the action will also dissuade Allergan from developing new IP, something that will harm the public. It is probably a wash from the standpoint of the public. I would have to do some mathematical modelling to be sure.

    On the other hand, if Allergan ends up sharing some of its profits with the St. Regis Indian tribe, that monetary redistribution is exactly the sort of thing that the patent system is supposed to provide (although not usually in this way).

    Capitalism tends to concentrate wealth in a way that leads to revolution or to economic collapse. Small economic resets provided by the patent system are a good thing and stabilize the political economic system.

    Undermining the patent system and dismantling the healthcare system are two steps in an ongoing effort to harden class and racial divisions

  7. Joachim Martillo December 7, 2017 4:51 pm

    Who would ever have thought that Intellectual Property (IP) law and Indian law would intersect?

  8. angry dude December 7, 2017 5:36 pm

    Just pause and think about this for a minute …

    native indian tribes and hi-tech patents – wtf do they have in common ???

    what a f%^&*& shame on this country

    just cancel patent system and be done once and for all

  9. Paul Morinville December 7, 2017 7:24 pm

    The Three Affiliated Tribes in ND have a circuit board manufacturing company. Not sure if they have patents, but just because they are out in the boonies does not mean they are not involved with hi-tech.

  10. angry dude December 7, 2017 7:45 pm

    Paul Morinville@9

    then it’s too bad for me (and you) that we don’t belong to those tribes 🙂

    how long this farce can continue ?

    I bet other nations are looking at US and laughing… some are laughing all the way to the bank

    If 5 years ago someone told me that it would come down to this I would never believe it

  11. The Time Is Now To Act December 7, 2017 7:53 pm

    Yeah, AD @8, you crossed a line there.

    Had you taken the time to read the amicus brief of the National Congress of American Indians et al. written by the attorneys at the Native American Rights Fund (NARF.org) or educate yourself in tribal commerce in even the most basid way, you would understand that Native Americans, including but not limited to Indian tribes. are longtime owners of registered Trademarks and Copyrights and IP licensing.

    For Indian tribes specifically, their respective businesses measure among the strongest employers in each of the markets they serve. Further, their vendor contracts with local businesses are vital to the economic activity. This includes investments in startup businesses; including high tech.

    The shame is on you for not educating yourself. It is that sad lack of diligence in informing oneself that is the basis for bigotry; clearly inherent in your post.

  12. angry dude December 7, 2017 8:10 pm

    The Time Is Now To Act@11

    NO, I did not cross any lines and shame is on you (and other commentators here)

    I do not give a damn about native tribes – government can subsidize them all they want (from my taxes too) – I do not mind – there are not too many of them after all to damage US economy
    But when some vital foundational things like patent and copyrights enshrined in US constitution are tied to some tribal laws then excuse me ..
    this is just farce and pure nonsense
    cancel PTAB or cancel US patent system – I do not give a damn at this point
    but please please do not continue to discuss this nonsense
    The Founding Fathers are spinning in their graves faster and faster

  13. Paul Morinville December 7, 2017 8:39 pm

    Immunity is not for individual tribal members, it is for the tribe itself. Think of it like you county government. You cannot sue your government, but you can sue someone who is a member of your county.

    Tribal land is held in trust by the US government. Because of this they cannot collateralize it for investment. Most of the tribes are in rural areas, so contrary to what some people have told me, they don’t make millions on gambling and smoke shops because most are too far from population centers. I don’t believe most tribes tax tribal members either. Yet the states they live in attempt to tax tribal members. In short there is little a tribe can do to generate revenue to support themselves. So the federal government does. Tribes proudly start up businesses to improve their lot and few have been very successful doing this. When they do, the profits go to the tribe to provide and enhance services for their members. These services include healthcare, education and more. It’s often the only way for a tribe to improve life for the tribal members and most members want a better life just like people living near you in your county.

    I met with the Three Affiliated Tribes’ Mandaree Enterprises. It is nothing but impressive. They have built a complete set of businesses including electronic manufacturing, oil and gas, distribution, and much more. IP management is just another business.

    Nobody should take that business opportunity away from the tribes. I find this whole idea that the PTAB arrogantly believes it can take it away to be absurd, unlawful and thoroughly angering. Congress has the sole authority over this – not the administration.

  14. angry dude December 7, 2017 9:05 pm

    Paul,

    I do work for federal government and know first hand how those preferences work (most of the beneficiaries involved like this dude Tribe are not tribal members – they just attach themselves to them to extract profits but that’s another matter…)

    But tying constitutional IP clause to tribal rights is pure nonsense – don’t you get it ?

    US Constitution is for all citizens of this country

    So cancel PTAB (and Alice and Ebay etc etc) or cancel US patent system

    But please stop peddling this Tribe for tribes nonsense

  15. angry dude December 7, 2017 9:09 pm

    “Laurence H. Tribe, the Carl M. Loeb University Professor and Professor of Constitutional Law at Harvard”

    Ha-Ha-Ha-Har-ha…

    constitutional law indeed

  16. The Time Is Now To Act December 7, 2017 9:30 pm

    Paul @ 13 – the NCAI amicus brief is on point with the issue you raise as to Congress being the only entity who can abrogate sovereign immunity; which is the reason why Sen. McCaskill rushed S. 1948 as a bill. NCAI is right. The PTAB should, at a minimum, stand down for the time being and wait for further guidance.

    Tribal businesses generate substantial tax revenue for state and federal government via payroll taxes from non-tribal employees and sustain/grow local economies surrounding reservation land near urban, suburban and rural cities.

  17. Paul Morinville December 7, 2017 10:09 pm

    Angry dude, I lived on the White Earth reservation for almost 5 years. I’m not peddling anything. Just stating facts as I know them

    I completely agree with you when you say that patent law should apply to all the same. I think the tribes agree with that too.

    I think overall, the tribes are doing the work of exposing just how messed up the patent system is. The whole situation is a travesty on all sides.

    But, the PTAB, a bunch of corrupt lawyers, DO NOT have the authority to do a damn thing about it. Their corrupt arrogance is driving them into a brick wall. I am very happy and grateful for the collective courage of these tribes. I only hope I can be a brick in that wall.

  18. angry dude December 7, 2017 10:19 pm

    Paul Morinville@17

    “…the tribes are doing the work of exposing just how messed up the patent system is”

    And I agree with this 100%

    when it comes to things like that its live or die situation for the whole US Patent System

    I am pessimistic

  19. angry dude December 7, 2017 10:54 pm

    “novel, useful, unobvious and sufficiently enabled in the patent application so that anyone skilled in the art can reproduce it” are used to be the only criteria for the USPTO to determine patentability

    boy, now things have changed…

  20. Night Writer December 7, 2017 11:00 pm

    @14, 15 Angry dude.

    Lawrence Tribe has been a distinguished scholar of Constitutional law for like 40 or 50 years. He authored one of the most famous treatises on the Constitution and has argued many cases.

    He is also well-known for his integrity.

    Chemerinsky has a similar background. I have great respect for both of them.

  21. angry dude December 7, 2017 11:16 pm

    Night Writer@20

    I must admit that by now I hate all lawyers and especially “legal scholars”

    sorry, my bad, nothing personal, just frustration with the whole situation

    BUT, do you guys realize the absurdity of this whole thing ???

    tying patent eligibility to tribal sovereign immunity ???

    I sure hope you do

  22. Bemused December 8, 2017 10:37 am

    AD@21: Yes, of course we realize the absurdity of this fight. But that’s exactly the point of all this: To drive home to the public/Congress/SCOTUS/etc what a mess has been made of the US patent system that patent owners are left with no choice but to do deals with Native American tribes in order to avoid the PTAB killing fields.

    I sincerely hope that many, many more patent owners team up with Native American tribes and state universities and any other organization or group that can claim sovereign immunity at the PTAB. The efficient infringer lobby wants to play the game of rigging the patent system against inventors and patent owners? Fine. We’ll play that game too and use every tool or loophole available to us in order to tell the patent pirates to kiss our collective patent-owning b**ts.

    Don’t get mad. Get even.

  23. Curious December 8, 2017 9:21 pm

    But then again when has doing what is legal (i.e. mandated under that pesky thing called the law) stopped the PTAB from reaching the results it (or its pay-masters) desires?
    I’m a little late to the game, but you nailed that one.

  24. Night Writer December 10, 2017 7:40 pm

    @21 Angry: I agree the whole thing is absurd. I also agree that it is hard not to hate all attorneys.

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