On February 23, 2018, the Patent Trial and Appeal Board (PTAB) issued two decisions regarding an inter partes review (IPR) of patents covering Allergan’s Restasis© (Cyclosporine ophthalmic emulsion) filed by Akorn Pharmaceuticals, Mylan Pharmaceuticals, and Teva Pharmaceuticals. The first opinion denied the Saint Regis Mohawk Tribe’s Motion to Terminate the Proceedings, while the second denied Allergan’s Motion to Withdraw from the IPR, even though it purported to assign its patent rights to the Tribe. Mylan Pharmaceuticals Inc. v. Allergan, Inc., IPR2016-01127, -01128, -01129, -01130,, 01131, -01132, Paper Nos. 129 and 131 (Feb. 23, 2018 PTAB)
The two decisions were issued just months after an Eastern District of Texas decision finding that the Restasis patents were invalid as obvious (currently pending appeal at the United States Court of Appeals for the Federal Circuit). Just prior to the district court decision, Allergan attempted to assign its patent rights to the Saint Regis Mohawk Tribe, who granted Allergan an exclusive license to the Restasis© patents. The Tribe then filed a motion to terminate the IPRs based on the doctrine of tribal sovereign immunity. Shortly thereafter, Allergan filed a motion to withdraw from the proceedings, stating Allergan was no longer the patent holder. The PTAB denied both motions.
The PTAB provided two reasons for denying the Tribe’s Motion to Terminate. First, the PTAB held that the Tribe failed to establish that it was entitled to assert its tribal immunity in inter partes review proceedings. Citing the Supreme Court, the Board noted that the Tribe’s sovereignty “is of a unique and limited character…[existing] only at the sufferance of Congress and is subject to complete defeasance.” United States v. Wheeler, 435 U.S. 313, 323 (1978). The PTAB’s analysis relied on the premise that “general Acts of Congress apply to Indians…in the absence of a clear expression to the contrary.” IPR2016-01127, Paper no. 129 at 11. The Act of Congress here provides that “any patent (regardless of ownership) is ‘subject to the conditions and requirements of [the Patent Act].’” Id. Because patents are, by law, inherently subject to IPRs, the Board made clear that any sovereign immunity enjoyed by the Tribe did not eliminate the PTAB’s right to conduct an inter partes review.
Second, the Board held that the proceedings may continue with Allergan as the patent owner, and that the Tribe was not an indispensable party to the proceedings. According to the terms of the patent assignment, Allergan retained substantially all of its rights in the patents, leaving the Tribe with nothing more than “an illusory or superficial right to sue for infringement of the challenged patents.” See Paper no. 131 at 22. Furthermore, Allergan’s rights as the exclusive licensee gave Allergan “at least an identical – if not more of an interest of the effective patent owner…in defending the challenged patents.” Paper no. 131 at 37. Therefore, the PTAB found that the assignment did warrant granting the Tribe’s Motion to Terminate the IPRs.
Disclaimer: Sughrue Mion represented Akorn Pharmaceuticals in the District Court Litigation and is currently representing Akorn in the Appeal and IPR proceedings.
Benjamin M. Cappel
Email: bcappel sughrue.com
Benjamin Cappel is an associate in the Litigation group and concentrates his practice on pharmaceutical patent litigation under the Hatch-Waxman Act. Mr. Cappel has experience litigating cases before the International Trade Commission and federal district courts. He has also assisted in contested case proceedings before the Patent Trial and Appeal Board (PTAB) including IPR and CBM reviews.
Not a member of the DC Bar. Supervised by members of the DC Bar.