throbber
Filed: November 30, 2017
`
`UNITED STATES PATENT AND TRADEMARK OFFICE
`
`BEFORE THE PATENT TRIAL AND APPEAL BOARD
`
`MYLAN PHARMACEUTICALS INC., TEVA
`PHARMACEUTICALS USA, INC., and AKORN INC.,
`Petitioners,
`
`v.
`SAINT REGIS MOHAWK TRIBE,
`
`Patent Owner.
`
`Case IPR2016-01127 (US 8,685,930 B2)
`Case IPR2016-01128 (US 8,629,111 B2)
`Case IPR2016-01129 (US 8,642,556 B2)
`Case IPR2016-01130 (US 8,633,162 B2)
`Case IPR2016-01131 (US 8,648,048 B2)
`Case IPR2016-01132 (US 9,248,191 B2)1
`
`BRIEF OF PUBLIC KNOWLEDGE AND THE ELECTRONIC
`FRONTIER FOUNDATION AS AMICI COLLEGII
`IN OPPOSITION TO THE MOTION TO TERMINATE
`
`1Cases IPR2017-00576 and IPR2017-00594, IPR2017-00578 and IPR2017-
`00596,
`IPR2017-00579 and IPR2017-00598,
`IPR2017-00583 and IPR2017-
`00599, IPR2017-00585 and IPR2017-00600, and IPR2017-00586 and IPR2017-
`00601, have respectively been joined with the captioned proceedings. The word-
`for-word identical paper is filed in each proceeding identified in the caption.
`
`Rev. ae25d99f
`
`

`

`TABLE OF CONTENTS
`
`ii
`. . . . . . . . . . . . . . . . . . . .
`.
`. . .
`.
`TABLE OF AUTHORITIES .
`INTEREST OF AMICI COLLEGII . .
`. .
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`. .
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`. . .
`. 1
`.
`INTRODUCTION AND SUMMARY OF ARGUMENT . . . . . . . . . . . 1
`ARGUMENT .
`.
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`. . . . . . . . . . . . . . . . . .
`. 2
`Inter Partes Review Is a Public-Interest Administrative Proceeding,
`I.
`Not Private Litigation . .
`. .
`. .
`. .
`. .
`. .
`. . . . . . . . . . . . . . . 2
`II. Sovereign Immunity Does Not Apply to Inter Partes Review Based on
`Judicial Precedent
`.
`.
`.
`.
`. .
`.
`. . .
`.
`. . .
`. . . . . . . . . . . . . . . 8
`A. The Board Has Jurisdiction Only over Patents, and Exercises No
`Jurisdiction over the Patent Owner or Other Parties . . . . . . . . . 8
`B. The Character and Effect of Inter Partes Review Is Closer to Gen-
`eralized Agency Action than Private Dispute Resolution . . . . . . 10
`III. The Board Should Certify This Question to the Director . . . . . . . . . 13
`CONCLUSION .
`.
`.
`.
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`. . .
`. . . . . . . . . . . . . . . . . . . 15
`CERTIFICATE OF SERVICE .
`. . .
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`. . . . . . . . . . . . . . . . . . . . 16
`
`(i)
`
`

`

`TABLE OF AUTHORITIES
`
`Cases and Administrative Decisions
`
`Aronson v. Quick Point Pencil Co.,
`440 U.S. 257 (1979) .
`.
`.
`.
`.
`. . .
`
`Bilski v. Kappos,
`561 U.S. 593 (2010) .
`
`.
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`. . . . . . . . . . . . . . . . 4
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`. . . . . . . . . . . . . . . . 4
`
`Blonder-Tongue Laboratories, Inc. v. University of Illinois Foundation,
`402 U.S. 313 (1971) .
`.
`.
`. .
`.
`. . .
`.
`. . .
`. . . . . . . . . . . . . . 7, 10
`
`Bonito Boats, Inc. v. Thunder Craft Boats, Inc.,
`489 U.S. 141 (1989) .
`.
`.
`.
`. .
`.
`. . .
`.
`. . . . . . . . . . . . . . . . . 3–4
`
`California v. Deep Sea Research, Inc.,
`523 U.S. 491 (1998) .
`.
`.
`.
`. .
`.
`. . .
`
`.
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`. . . . . . . . . . . . . . . . . . 9
`
`Cardinal Chemical Co. v. Morton International, Inc.,
`508 U.S. 83 (1993)
`.
`.
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`. .
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`. . .
`.
`. . .
`. . . . . . . . . . . . . . .
`
`. 7
`
`Covidien LP v. University of Florida Research Foundation Inc.,
`IPR2016-01274 to -01276 (PTAB Jan. 25, 2017) (paper no. 21) . . . . 12, 14
`
`Crown Die & Tool Co. v. Nye Tool & Machine Works,
`261 U.S. 24 (1923)
`.
`.
`.
`. .
`.
`. . .
`.
`. . .
`. . . . . . . . . . . . . . .
`
`. 3
`
`Cuozzo Speed Technologies, LLC v. Lee,
`136 S. Ct. 2131 (2016)
`.
`. .
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`. . .
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`.
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`. . .
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`. . . . . . . . . . . . . . .
`
`. 7
`
`Federal Maritime Commission v. South Carolina State Ports Authority,
`535 U.S. 743 (2002) .
`.
`.
`. .
`.
`. . .
`.
`. . .
`. . . . . . . . . . 2–3, 7, 9, 12
`
`Federal Trade Commission v. Actavis, Inc.,
`133 S. Ct. 2223 (2013)
`.
`. .
`.
`. . .
`.
`
`. . .
`
`. . . . . . . . . . . . . . .
`
`. 4
`
`Hazel-Atlas Glass Co. v. Hartford-Empire Co.,
`322 U.S. 238 (1944) .
`.
`.
`. .
`.
`. . .
`.
`. . .
`
`. . . . . . . . . . . . . . .
`
`. 1
`
`Idaho v. Coeur d’Alene Tribe,
`521 U.S. 261 (1997) .
`.
`.
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`. .
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`. . .
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`. . . . . . . . . . . . . . .
`
`. 11
`
`(ii)
`
`

`

`J.E.M. Ag Supply, Inc. v. Pioneer Hi-Bred International, Inc.,
`534 U.S. 124 (2001) .
`.
`.
`.
`. . .
`.
`. . .
`.
`. . . . . . . . . . . . . . . . . 4
`
`Kendall v. Winsor,
`62 U.S. (21 How.) 322 (1859) .
`
`Kewanee Oil Co. v. Bicron Corp.,
`416 U.S. 470 (1974) .
`.
`.
`.
`. .
`
`Lear, Inc. v. Adkins,
`395 U.S. 653 (1969) .
`
`.
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`. . . . . . . . . . . . . . . . . 3
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`. . . . . . . . . . . . . . . . . . 4
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`. . . . . . . . . . . . . . . 5, 7, 11
`
`MedImmune, Inc. v. Genentech, Inc.,
`549 U.S. 118 (2007) .
`.
`.
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`. . .
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`. . .
`
`.
`
`. . . . . . . . . . . . . . . . . 7
`
`Medtronic, Inc. v. Mirowski Family Ventures, LLC,
`134 S. Ct. 843 (2014) .
`.
`. .
`.
`. . .
`.
`. . .
`. . . . . . . . . . . . . . . . 4
`
`Mercoid Corp. v. Mid-Continent Investment Co.,
`320 U.S. 661 (1944) .
`.
`.
`.
`. .
`.
`. . .
`.
`. . . . . . . . . . . . . . . . . . 3
`
`Motion Picture Patents Co. v. Universal Film Manufacturing Co.,
`243 U.S. 502 (1917) .
`.
`.
`. .
`.
`. . .
`.
`. . .
`. . . . . . . . . . . . . . . 3–4
`
`MPHJ Technology Investments, LLC, In re,
`159 F.T.C. 1004 (Mar. 13, 2015)
`.
`.
`. . .
`
`. . . . . . . . . . . . . . . . . 6
`
`MPHJ Technology Investments, LLC v. Ricoh Americas Corp.,
`847 F.3d 1363 (Fed. Cir. 2017) . .
`.
`. . .
`. . . . . . . . . . . . . . . . . 7
`
`New York v. Irving Trust Co.,
`288 U.S. 329 (1933) .
`.
`.
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`.
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`. . .
`
`.
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`. . .
`
`. . . . . . . . . . . . . . . . 9
`
`Oil States Energy Services, LLC v. Greene’s Energy Group, LLC,
`No. 16-712 (U.S. cert. granted June 12, 2017)
`. . . . . . . . . . . . . . . 14
`
`Pfaff v. Wells Electronics, Inc.,
`525 U.S. 55 (1998)
`.
`.
`.
`
`. .
`
`.
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`. . .
`
`Pope Manufacturing Co. v. Gormully,
`144 U.S. 224 (1892) .
`.
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`. . . . . . . . . . . . . . . . 4
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`. . .
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`. . . . . . . . . . . . . . . . 5
`
`(iii)
`
`

`

`Precision Instrument Manufacturing Co.
`v. Automotive Maintenance Machinery Co.,
`324 U.S. 806 (1945) .
`.
`.
`.
`.
`. . .
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`. . .
`
`.
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`. . . . . . . . . . . . . . . 3–4
`
`Tennessee Student Assistance Corp. v. Hood,
`541 U.S. 440 (2004) .
`.
`.
`. .
`.
`. . .
`.
`. . .
`
`. . . . . . . . . . . . . 2, 8–12
`
`Tennessee v. United States Department of Transportation,
`326 F.3d 729 (6th Cir. 2003)
`. .
`.
`. . .
`.
`. . . . . . . . . . . . . . . 9–11
`
`Triplett v. Lowell,
`297 U.S. 638 (1936) .
`
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`
`. 10
`
`United Carbon Co. v. Binney & Smith Co.,
`317 U.S. 228 (1942) .
`.
`.
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`.
`
`United States v. Singer Manufacturing Co.,
`374 U.S. 174 (1963) .
`.
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`. 4
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`. 4
`
`Universal Oil Co. v. Globe Co.,
`322 U.S. 471 (1944) .
`.
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`. . .
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`. . . . . . . . . . . . . . . . . . 4
`
`Van Huffel v. Harkelrode,
`284 U.S. 225 (1931) .
`
`.
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`. .
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`. . . . . . . . . . . . . . . . . 9
`
`Verizon Maryland Inc. v. Public Service Commission,
`535 U.S. 635 (2002) .
`.
`.
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`. . .
`.
`. . .
`.
`. . . . . . . . . . . . . . . . . 11
`
`Virginia Office for Protection & Advocacy v. Stewart,
`131 S. Ct. 1632 (2011)
`.
`.
`. .
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`. . . . . . . . . . . . . . . . . . 11
`
`Young, Ex parte,
`209 U.S. 123 (1908) .
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`. . . . . . . . . . . . . . . . . 11
`
`Constitutional Provisions
`
`U.S. Const. amend. 11 .
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`.
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`. . . . . . . . . . . . . . . . . . 8–9
`
`——— art. I, § 8, cl. 8 .
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`. . . . . . . . . . . . . . . .
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`. 3
`
`(iv)
`
`

`

`Regulation, Statutes and Rule
`
`35 U.S.C. § 314 .
`
`——— § 316 .
`
`——— § 317 .
`
`——— § 318 .
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`37 C.F.R. § 42.73 .
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`. . . . . . . . . . . . . . . . . . . 11
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`. . . . . . . . . . . . . . . . . . . 11
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`. . . . . . . . . . . . . . . . . . . 11
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`. . . . . . . . . . . . . . . . . . . 10
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`. 10
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`PTAB Standard Operating Procedure . . .
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`. . . . . . . . . . . . . . . . . .
`
`. 11
`
`Other Sources
`
`Tahir Amin & Aaron S. Kesselheim, Secondary Patenting of Branded Phar-
`maceuticals, 31 Health Aff. 2286 (2012) .
`. . .
`.
`. . . . . . . . . . . . . 6
`
`Brief for the Federal Respondent, Oil States Energy Servs., LLC v. Greene’s
`Energy Group, LLC, No. 16-712 (U.S. Oct. 23, 2017) . . .
`.
`. . . . . . . 14
`
`Fed. Trade Comm’n, Generic Drug Entry Prior to Patent Expiration (July
`2002)
`.
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`. . . . . . . . . . . . . . . . . 6
`
`Jennifer S. Haas, Potential Savings from Substituting Generic Drugs for
`Brand-Name Drugs, 142 Annals Internal Med. 891 (2005)
`. . .
`. . . . . 5
`
`Megan M. La Belle, Patent Litigation, Personal Jurisdiction, and the Public
`Good, 18 Geo. Mason L. Rev. 43 (2010) . .
`. .
`. . . . . . . . . . . . . 5–6
`
`(v)
`
`

`

`INTEREST OF AMICI COLLEGII
`
`Amici Public Knowledge and the Electronic Frontier Foundation are nonprofit
`
`organizations that promote consumer interests with regard to intellectual property
`
`law. They and their members have a strong interest in promoting balanced intel-
`
`lectual property policy that serves both public and private interests.
`
`Authorization for this brief is based on the order of the Board dated November
`
`3, 2017. No one other than counsel for amici authored this brief in whole or in part,
`
`or made a monetary contribution to the preparation or submission of this brief.
`
`INTRODUCTION AND SUMMARY OF ARGUMENT
`
`In Hazel-Atlas Glass Co. v. Hartford-Empire Co., the Supreme Court explained
`
`that a patent wrongly deemed valid “does not concern only private parties. There
`
`are issues of great moment to the public.” 322 U.S. 238, 246 (1944). “The public
`
`welfare demands that the agencies of public justice be not so impotent that they
`
`must always be mute and helpless victims of deception and fraud.” Id.
`
`The Patent Trial and Appeal Board is an agency of public justice, and need not
`
`be the helpless victim of the sovereign immunity scheme at play here. Because its
`
`mandate is to determine the validity of patents—a matter of great moment to the
`
`public, not just a concern of private parties—the Board’s powers are distinct from
`
`the limited ambit of courts, which only determine relative rights of individuals.
`
`1
`
`

`

`The Board’s public interest mandate renders sovereign immunity inapplicable
`
`before the Board, for at least three reasons. First, it causes inter partes review to be
`
`more like a public agency determination than private dispute resolution. Second,
`
`the Board’s jurisdiction is solely directed to patents and not parties, and sovereign
`
`immunity does not apply to in rem proceedings. Third, the nature and result of
`
`the proceeding is distinct from judicial procedure in ways that have been held to
`
`render sovereign immunity inapplicable.
`
`In any event, the Board should certify the question of sovereign immunity for
`
`guidance from the Director of the Patent and Trademark Office after public no-
`
`tice and comment. That procedure would enable participation by members of the
`
`public with key knowledge or interests, would guarantee consistency across Board
`
`decisions, and would work to avoid conflicts with other policy decisions and po-
`
`sitions of the Office.
`
`ARGUMENT
`
`I.
`
`Inter Partes Review Is a Public-Interest Administrative Proceeding, Not
`Private Litigation
`
`Applicability of sovereign immunity to an agency proceeding depends in part
`
`on the character of the proceeding and its similarity to traditional litigation. See
`
`Fed. Mar. Comm’n v. S.C. State Ports Auth. (“FMC”), 535 U.S. 743, 756–60
`
`(2002). But see Tenn. Student Assistance Corp. v. Hood (“TSAC”), 541 U.S. 440,
`
`2
`
`

`

`452 (2004) (questioning FMC’s reliance on procedural similarities) (discussed
`
`infra p. 12). Inter partes review is not similar to litigation because it is not sim-
`
`ply dispute resolution between two parties. A patent affects the entire public, and
`
`cancellation of improperly granted patents is a matter of the public interest as a
`
`whole. As a result, assessment of patent validity before the Board is more akin to
`
`an agency administrative proceeding, with effect on the public at large rather than
`
`merely the private parties before the agency.
`
`1.
`
`“A patent by its very nature is affected with a public interest.” Precision
`
`Instrument Mfg. Co. v. Auto. Maint. Mach. Co., 324 U.S. 806, 816 (1945). Specif-
`
`ically, patents are a statutory instrument for promoting the public good: “The sole
`
`reason and purpose of the constitutional grant to Congress to enact patent laws is
`
`to promote the progress of science and useful arts.” Crown Die & Tool Co. v. Nye
`
`Tool & Mach. Works, 261 U.S. 24, 35 (1923) (quoting U.S. Const. art. I, § 8, cl. 8);
`
`see also Motion Picture Patents Co. v. Universal Film Mfg. Co., 243 U.S. 502,
`
`510 (1917); Mercoid Corp. v. Mid-Continent Inv. Co., 320 U.S. 661, 666 (1944)
`
`(patent is “conditioned by a public purpose”). The exclusive rights of a patent are
`
`not granted merely as a windfall or reward to inventors; the rights are part of a
`
`“carefully crafted bargain” between inventors and the public, where “the benefit
`
`to the public or community at large was . . . doubtless the primary object.” Bonito
`
`Boats, Inc. v. Thunder Craft Boats, Inc., 489 U.S. 141, 150 (1989); Kendall v.
`
`3
`
`

`

`Winsor, 62 U.S. (21 How.) 322, 328 (1859); accord Motion Picture Patents, 243
`
`U.S. at 511; see also J.E.M. Ag Supply, Inc. v. Pioneer Hi-Bred Int’l, Inc., 534 U.S.
`
`124, 142 (2001) (describing “quid pro quo” of patent bargain) (quoting Kewanee
`
`Oil Co. v. Bicron Corp., 416 U.S. 470, 470 (1974)); Universal Oil Co. v. Globe
`
`Co., 322 U.S. 471, 484 (1944) (same). “[T]he public interest in granting patent
`
`monopolies exists only to the extent that the public is given a novel and useful
`
`invention in consideration for its grant.” Fed. Trade Comm’n v. Actavis, Inc., 133
`
`S. Ct. 2223, 2232 (2013) (quoting United States v. Singer Mfg. Co., 374 U.S. 174,
`
`199 (1963) (White, J., concurring)) (internal quotations omitted).
`
`Fundamental to this bargain is that “the federal patent laws must determine not
`
`only what is protected, but also what is free for all to use.” Bonito Boats, 489 U.S.
`
`at 151. Ensuring that “ideas in the public domain remain there for the use of the
`
`public” is the basic purpose behind the novelty and obviousness requirements of
`
`patentability. Aronson v. Quick Point Pencil Co., 440 U.S. 257, 262 (1979). The
`
`patent system thus “has a paramount interest in seeing that patent monopolies are
`
`kept within their legitimate scope.” Medtronic, Inc. v. Mirowski Family Ventures,
`
`LLC, 134 S. Ct. 843, 851 (2014) (quoting Precision Instrument, 324 U.S. at 816)
`
`(internal quotes and alterations omitted); see also United Carbon Co. v. Binney &
`
`Smith Co., 317 U.S. 228, 232 (1942); Pfaff v. Wells Elecs., Inc., 525 U.S. 55, 63
`
`(1998); Bilski v. Kappos, 561 U.S. 593, 606 (2010).
`
`4
`
`

`

`2. Patents on anticipated or obvious ideas fail the patent bargain and injure
`
`the interests of the entire public, by preventing “the use of ideas that are in reality
`
`a part of the public domain.” Lear, Inc. v. Adkins, 395 U.S. 653, 670 (1969). A
`
`wrongly granted patent discourages innovation, diverts funds from research and
`
`development to litigation, increases consumer prices, delays competition, and ulti-
`
`mately “reduces the overall value of patent protection and undermines the public’s
`
`confidence in the patent system at large.” Megan M. La Belle, Patent Litigation,
`
`Personal Jurisdiction, and the Public Good, 18 Geo. Mason L. Rev. 43, 51 (2010).
`
`Thus, it is “important to the public that competition should not be repressed by
`
`worthless patents.” Pope Mfg. Co. v. Gormully, 144 U.S. 224, 234 (1892).
`
`Two examples among many illustrate these harms. The first relates to erro-
`
`neous pharmaceutical patents that block generic entry. Generic drugs create market
`
`competition that saves consumers money; “broad generic substitution of outpatient
`
`prescription drugs could save approximately $8.8 billion . . . in the United States
`
`each year.” Jennifer S. Haas, Potential Savings from Substituting Generic Drugs
`
`for Brand-Name Drugs, 142 Annals Internal Med. 891, 894 (2005). An invalid
`
`patent that blocks generic entry thus denies the public those cost savings—perhaps
`
`the difference between life and death for some.
`
`A study on HIV treatments identified two drugs for which the patents on the
`
`compounds were expired but for which generics were unavailable due to “sec-
`
`5
`
`

`

`ondary patenting” of minor variations and methods of manufacturing and treat-
`
`ment. Tahir Amin & Aaron S. Kesselheim, Secondary Patenting of Branded Phar-
`
`maceuticals, 31 Health Aff. 2286, 2288–89 (2012). The researchers found 108
`
`secondary patents that could potentially delay generic entry by 12 years after the
`
`expiration of the base-compound patents; they also found in the patents “signs of
`
`quality concerns” that “may serve as a basis for challenging their validity.” Id. at
`
`2290–91. This is no outlier: A Federal Trade Commission study found that drug
`
`patents were invalidated at least 28% of the time in litigation. Fed. Trade Comm’n,
`
`Generic Drug Entry Prior to Patent Expiration 20 (July 2002).
`
`Another example of public harm from invalid patents comes from a firm,
`
`MPHJ, who held a patent on obvious methods of using document scanners. See
`
`In re MPHJ Tech. Invs., LLC, 159 F.T.C. 1004, 1006 (Mar. 13, 2015). This patent
`
`on everyday technology enabled MPHJ to scam large swaths of the public. The
`
`firm reportedly sent over 16,000 letters to small businesses, demanding payment
`
`of $1,000 or $1,200 per employee. See id. at 1010–11. Broad public nuisance
`
`was possible only because MPHJ’s patent purported to take away a right to use
`
`technology in the public domain.
`
`3.
`
`If wrongly granted patents are a public harm, then revocation of wrongly
`
`granted patents is “a public good to be shared . . . by society as a whole.” La Belle,
`
`supra, at 97. The case of MPHJ exemplifies this: Its invalid patents and associated
`
`6
`
`

`

`scam were finally put to rest through inter partes review. See MPHJ Tech. Invs.,
`
`LLC v. Ricoh Americas Corp., 847 F.3d 1363 (Fed. Cir. 2017).
`
`This public benefit of invalidation of erroneous patents has led the Supreme
`
`Court repeatedly to reject limitations on parties’ ability to challenge patent validity.
`
`See Blonder-Tongue Labs., Inc. v. Univ. of Ill. Found., 402 U.S. 313, 342 (1971)
`
`(expanding collateral estoppel effect of patent invalidity holding); MedImmune,
`
`Inc. v. Genentech, Inc., 549 U.S. 118, 137 (2007) (removing requirement that
`
`a licensee breach its license before seeking declaratory judgment of invalidity);
`
`Cardinal Chem. Co. v. Morton Int’l, Inc., 508 U.S. 83, 102–03 (1993) (reject-
`
`ing Federal Circuit practice of automatically vacating certain invalidity determi-
`
`nations); Lear, 395 U.S. at 670–71 (public interest in patent validity determinations
`
`overrides private interest in contract enforcement).
`
`Inter partes review also ensures that patents “are kept within their legitimate
`
`scope” by enabling the Office “to reexamine an earlier agency decision” in view
`
`of new information. Cuozzo Speed Techs., LLC v. Lee, 136 S. Ct. 2131, 2144
`
`(2016). This public purpose demonstrates, as Cuozzo concluded, that in “signifi-
`
`cant respects, inter partes review is less like a judicial proceeding and more like a
`
`specialized agency proceeding.” Id. at 2143. Here, too, the public interest objec-
`
`tive of inter partes review renders it more like a specialized agency proceeding,
`
`distinguishing FMC and rendering sovereign immunity inapplicable.
`
`7
`
`

`

`II. Sovereign Immunity Does Not Apply to Inter Partes Review Based on
`Judicial Precedent
`
`In view of the unique public-interest purpose of inter partes review, case law
`
`dictates that sovereign immunity does not apply to preclude the proceeding. Cases
`
`on sovereign immunity have focused on the jurisdictional reach of the agency ad-
`
`judicator and the nature and effect of the proceeding. All the factors under these
`
`considerations weigh against applicability of sovereign immunity.
`
`A. The Board Has Jurisdiction Only over Patents, and Exercises No Juris-
`diction over the Patent Owner or Other Parties
`
`Sovereign immunity does not require dismissal of an inter partes review pro-
`
`ceeding because the Board’s jurisdiction over the proceeding is over the patents,
`
`and not the patent owner or any other party.
`
`Where an adjudicator’s jurisdictional power is over a thing rather than a party,
`
`sovereign immunity does not apply. In TSAC, an individual opened a bankruptcy
`
`proceeding to discharge her student loans, some of which were owed to a state
`
`agency, and the agency moved to dismiss based on sovereign immunity under the
`
`Eleventh Amendment. See 541 U.S. at 444–45. The Supreme Court held that
`
`sovereign immunity did not apply because the bankruptcy court’s jurisdiction was
`
`in rem, “premised on the debtor and his estate, and not on the creditors.” Id. at 447.
`
`The Court reviewed extensive precedent that had “drawn a distinction between in
`
`rem and in personam jurisdiction, even when the underlying proceedings are, for
`
`8
`
`

`

`the most part, identical.” Id. at 453 (citing California v. Deep Sea Research, Inc.,
`
`523 U.S. 491 (1998); Van Huffel v. Harkelrode, 284 U.S. 225 (1931); New York v.
`
`Irving Trust Co., 288 U.S. 329 (1933)). In particular, the state was not a necessary
`
`party to the proceeding: “the Bankruptcy Court’s in rem jurisdiction allows it to
`
`adjudicate the debtor’s discharge claim without in personam jurisdiction over the
`
`State.” Id. Because the bankruptcy court adjudicated only the debt and not the
`
`creditors, the Court distinguished FMC and held that no sovereign dignity was
`
`injured contrary to the Eleventh Amendment. See TSAC, 541 U.S. at 450.
`
`In Tennessee v. United States Department of Transportation, a federal agency
`
`instituted a proceeding based on the complaint of a private party, to determine a
`
`state’s compliance with federal waste management standards; the state contended
`
`that sovereign immunity precluded the agency proceeding. 326 F.3d 729, 732–33
`
`(6th Cir. 2003), cert. denied, 540 U.S. 981. The Sixth Circuit held that sovereign
`
`immunity did not apply and FMC was “clearly distinguish[ed]” because the pro-
`
`ceeding “approximates other administrative procedures already given approval.”
`
`Tennessee, 326 F.3d at 734. In particular, the court relied on the fact that the pro-
`
`ceeding “does not result in an order of enforcement against a state.” Id. at 736.
`
`Inter partes review is akin to the above two cases. As with TSAC, the sovereign
`
`is not a necessary party to the proceeding, and the Board exercises no in per-
`
`sonam jurisdiction. The Board’s sole power is over the patent—the res. And as in
`
`9
`
`

`

`Tennessee, inter partes review “does not result in an order of enforcement” against
`
`any party. Indeed, the Board “is without authority to issue an order against” any
`
`party, sovereign or not. 326 F.3d at 736. Certainly a sovereign’s interests can
`
`be affected by the proceeding (either by cancellation of the patent or by estoppel
`
`under 37 C.F.R. § 42.73(d)(3)), but mere effect on interests is insufficient: Even
`
`“individualized determinations of [sovereigns’] interests” are permitted so long as
`
`no jurisdiction is exercised over the sovereign. TSAC, 541 U.S. at 450.
`
`The unique nature of the Board’s jurisdiction results in a unique remedy distinct
`
`from any judicial action. Courts in patent cases exercise in personam jurisdiction
`
`so invalidity determinations are personal to the parties; it is only because of modern
`
`collateral estoppel doctrine that judicial invalidity findings have broader effect. See
`
`Blonder-Tongue, 402 U.S. at 350 (overruling Triplett v. Lowell, 297 U.S. 638, 642–
`
`43 (1936)). The power to attach a certificate of cancellation to a patent is reserved
`
`to the Board, because its jurisdiction is in rem. See 35 U.S.C. § 318(b).
`
`The Board’s jurisdiction is over patents, not parties. Accordingly, a sovereign
`
`cannot assert immunity to prevent the Board from deciding the validity of patents.
`
`B. The Character and Effect of Inter Partes Review Is Closer to Generalized
`Agency Action than Private Dispute Resolution
`
`Several other features of inter partes review further demonstrate that, under
`
`judicial precedent, sovereign immunity does not apply.
`
`10
`
`

`

`Where the presence of affected parties in a proceeding is optional and the pro-
`
`ceeding is “one against the world,” sovereign immunity will not bar the proceeding.
`
`TSAC, 541 U.S. at 448. In inter partes review, the patent owner is not required to
`
`file any response, see, e.g., 35 U.S.C. § 314(a)(2), and the Board has an indepen-
`
`dent power to determine patent validity even if the parties all withdraw from the
`
`proceeding, § 317(a). Furthermore, cancellation of a patent affects all people, so
`
`the proceeding is “one against the world.” See Lear, 395 U.S. at 670.
`
`Applicability of sovereign immunity also depends on “whether the adjudicator
`
`acts as the functional equivalent of an Article III judge” or rather “as an adminis-
`
`trator of a federal agency.” Tennessee, 326 F.3d at 735. Although administrative
`
`patent judges certainly enjoy a great degree of independence, the inter partes re-
`
`view process remains statutorily bound to the policy of the agency. The Director
`
`prescribes the rules for the proceeding, 35 U.S.C. § 316(a), makes the decision
`
`to institute review, § 314(b), and decides which opinions of the Board are to be
`
`precedential, PTAB Standard Operating Procedure 2, § III.D (rev. 9).
`
`Sovereign immunity also will not bar a proceeding where the complainant
`
`“seeks relief properly characterized as prospective.” Verizon Md. Inc. v. Pub. Serv.
`
`Comm’n, 535 U.S. 635, 645 (2002) (quoting Idaho v. Coeur d’Alene Tribe, 521
`
`U.S. 261, 296, 298–99 (1997)); accord Va. Office for Prot. & Advocacy v. Stewart,
`
`131 S. Ct. 1632, 1639 (2011); Ex parte Young, 209 U.S. 123 (1908). In inter partes
`
`11
`
`

`

`review, the only relief available is prospective. Patent cancellation does not result
`
`in damages against the patent owner or affect prior final infringement decisions.
`
`Finally, FMC observed that while sovereign immunity is implicated when an
`
`agency resolves private disputes, the agency “remains free” to take action “either
`
`upon its own initiative or upon information supplied by a private party.” 535 U.S.
`
`at 768. Determination of patent validity in inter partes review is much closer to
`
`this permissible form of administrative proceeding. As noted above, the parties
`
`need not be present in the proceeding, and the Board can conduct an independent
`
`analysis of patent validity even if the parties are in agreement. Inter partes review
`
`is best characterized as agency action “upon information supplied by” petitioners
`
`and patent owners, such that sovereign immunity is inapplicable.
`
`It is irrelevant that, superficially, inter partes review resembles court litigation
`
`in certain procedures including discovery and motion practice. Cf. Covidien LP v.
`
`Univ. of Fla. Research Found. Inc., IPR2016-01274 to -01276, at 22–23 (PTAB
`
`Jan. 25, 2017) (paper no. 21). In TSAC, the Court recognized that the bankruptcy
`
`proceeding at issue there “has some similarities to a traditional civil trial” in its
`
`procedural rules, such as a summons procedure. 541 U.S. at 452. Nevertheless, the
`
`Court found the rules insufficient to render the bankruptcy proceeding sufficiently
`
`court-like for sovereign immunity to apply; to do otherwise, said the Court, “would
`
`give the Rules an impermissible effect.” Id. at 454.
`
`12
`
`

`

`The result for inter partes review is the same: To hold that procedural rules
`
`render sovereign immunity applicable would give those rules “an impermissible
`
`effect.” The correct analysis focuses on whether jurisdiction is in rem, whether
`
`the parties are optional to the proceeding, whether the proceeding is subject to
`
`agency policy, whether the relief is prospective, and whether the agency exercises
`
`power to act independent of the parties’ positions. On all of these counts, sovereign
`
`immunity does not apply to inter partes review.
`
`III. The Board Should Certify This Question to the Director
`
`While amici appreciate the opportunity to submit a brief in this matter, the
`
`decision on sovereign immunity question should ultimately be submitted to the
`
`Director, who should solicit broader public comment and issue agency-wide guid-
`
`ance, akin to the process that the Office has used in issuing guidance on subject
`
`matter eligibility for example. Notice and comment would be more proper than
`
`resolution by a panel of the Board, for at least three reasons.
`
`First, a notice and comment proceeding would enable all interested parties to
`
`participate and provide useful information to the Office and the Board, and to do so
`
`without expensive and onerous requirements of retaining registered counsel. The
`
`question of applicability of sovereign immunity is one of tribal and constitutional
`
`law, and a notice and comment proceeding is the established mechanism to obtain
`
`diverse and useful public input from relevant experts and interested parties.
`
`13
`
`

`

`Second, certification to the Director will avoid inconsistent policy across panels
`
`of the Board. A decision by a panel of the Board is not necessarily precedential
`
`for other panels, whereas guidance from the Director will have immediate effect.
`
`Third, and perhaps most importantly, the Director is best positioned to assess
`
`any consequences for the Office as a whole. The determination of this sovereign
`
`immunity question could affect a variety of administrative and policy issues, po-
`
`tentially even impacting legal positions that the Office has taken in other contexts.
`
`Compare Brief for the Federal Respondent at 24, Oil States Energy Servs., LLC v.
`
`Greene’s Energy Group, LLC, No. 16-712 (U.S. Oct. 23, 2017) (inter partes re-
`
`view determines “rights as against the world”), and id. at 25 (“Board’s role is . . .
`
`not to determine the respective rights of the patentee and challenger vis-à-vis each
`
`other”), with Covidien, IPR2016-01274 to -01276, at 15 (“inter partes review is
`
`not a proceeding ‘against the world’”), and id. at 19 (“inter partes review is an
`
`action against the patent owner”).
`
`Cognizance of the ripple effects of any action on this issue is of the utmost im-
`
`portance here. Indeed, the disposition of the subsidiary question of how court-like
`
`inter partes review appears is arguably already affected by the amicus curiae brief
`
`solicitation itself. Besides peculiarly styling the Board as a “curiae” (something
`
`that the caption to this brief seeks to correct), the choice of a judicial practice for
`
`public input rather than the ordinary agency practice of notice and comment could
`
`14
`
`

`

`potentially, if unintentionally, tilt the substantive outcome.
`
`The Board’s work is exceptionally important, in view of the national interest in
`
`a balanced and properly functioning patent system not flooded with invalid patents.
`
`But the Board is not a freestanding entity; it is a part of the United States Patent and
`
`Trademark Office. To ensure that a correct, consistent decision without unintended
`
`consequences is reached on a momentous issue such as sovereign immunity, the
`
`Board should defer the question to the agency as a whole.
`
`CONCLUSION
`
`For the foregoing reasons, the Board should deny the Patent Owner’s motion
`
`to terminate these proceedings.
`
`Dated: November 30, 2017
`
`Respectfully submitted,
`
`/Charles Duan/
`Charles Duan
`USPTO Reg. No. 65,114
`Public Knowledge
`1818 N Street NW, Suite 410
`Washington, DC 20036
`(202) 861-0020
`cduan@publicknowledge.org
`Counsel for Public Knowledge and the
`Electronic Frontier Foundation
`
`15
`
`

`

`CERTIFICATE OF SERVICE
`
`I hereby certify that on November 30, 2017, I caused the foregoing Brief of
`
`Public Knowledge and the Electronic Frontier Foundation as Amici Collegii
`
`in Opposition to the Motion to Terminate to be served by email on the following
`
`counsel of record:
`
`PETITIONER MYLAN:
`
`Steven W. Parmelee
`Michael T. Rosato
`Jad A. Mills
`Richard Torczon
`WILSON SONSINI GOODRICH & ROSATI
`sparmelee@wsgr.com
`mrosato@wsgr.com
`jmills@wsgr.com
`rtorczon@wsgr.com
`
`PETITIONER TEVA:
`
`Gary Speier
`Mark Schuman
`CARLSON, CASPERS, VANDENBURH, LINDQUIST & SCHUMAN, P.A.
`gspeier@carlsoncaspers.com
`mschuman@carlsoncaspers.com
`
`PETITIONER AKORN:
`
`Michael Dzwonczyk
`Azadeh Kokabi
`Travis Ribar
`SUGHRUE MION, PLLC
`mdzwonczyk@sughrue.com
`akokabi@sughrue.com
`
`16
`
`

`

`PATENT OWNER:
`
`Dorothy P. Whelan
`Michael Kane
`Susan Coletti
`Robert Oakes
`FISH & RICHARDSON P.C.
`whelan@fr.com
`PTABInbound@fr.com
`coletti@fr.com
`oakes@fr.com
`singer@fr.com
`
`Alfonso Chan
`Joseph DePumpo
`Michael Shore
`Christopher Evans
`SHORE CHAN DEPUMPO LLP
`achan@shorechan.com
`jdepumpo@shorechan.com
`mshore@shorechan.com
`cevans@shorechan.com
`
`Marsha Schmidt
`marsha@mkschmidtlaw.com
`
`Dated: November 30, 2017
`
`/Charles Duan/
`Charl

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