`
`Paper No. ___
`Filed: October 13, 2017
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`
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`UNITED STATES PATENT AND TRADEMARK OFFICE
`_____________________________
`
`BEFORE THE PATENT TRIAL AND APPEAL BOARD
`_____________________________
`
`MYLAN PHARMACEUTICALS INC., TEVA PHARMACEUTICALS
`USA, INC. and AKORN INC.,1
`Petitioners,
`v.
`ALLERGAN, INC.,
`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)
`_____________________________
`
`PETITIONERS’ OPPOSITION TO
`ST. REGIS MOHAWK TRIBE’S MOTION TO DISMISS
`
`
`
`
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`1 Cases 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 pursuant to the
`Board’s Scheduling Order (Paper 10).
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`CONTAINS PROTECTIVE ORDER MATERIAL
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`TABLE OF CONTENTS
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`INTRODUCTION ........................................................................................ 1
`I.
`ALLERGAN REMAINS THE PATENT OWNER ...................................... 3
`II.
`A.
`The Tribe Never Held All Substantial Rights ...................................... 3
`B.
`The Sham Agreement Is No Barrier to Inter Partes Review ............. 10
`III. EVEN IF THE TRIBE WERE THE SOLE OR JOINT PATENT
`OWNER IT IS NOT AN INDISPENSABLE PARTY ................................ 13
`A. Allergan Adequately Represents All Interests in the Patents ............. 14
`B.
`Not Required or “Indispensable” ...................................................... 16
`C.
`Pimentel and Its Progeny Do Not Require Dismissal ........................ 21
`IV.
`IPRS ARE NOT SUBJECT TO TRIBAL IMMUNITY .............................. 22
`V.
`THE TRIBE FAILS TO JUSTIFY DISMISSAL ........................................ 24
`VI. CONCLUSION .......................................................................................... 25
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`Even Under Federal Rule of Civil Procedure 19, the Tribe Is
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`TABLE OF AUTHORITIES
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`Page
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`
`
`CASES
`
`Airlines Reporting Corp. v. S & N Travel, Inc., 58 F.3d 857 (2d Cir.
`1995) .......................................................................................................... 12
`
`Alfred E. Mann Found. for Sci. Research v. Cochlear Corp., 604 F.3d
`1354 (Fed. Cir. 2010) ................................................................................ 4, 6
`
`Anderson & Middleton Lumber Co. v. Quinault Indian Nation, 929
`P.2d 379 (Wash. 1996) ................................................................................ 23
`
`Aspex Eyewear Inc. v. Miracle Optics Inc., 434 F.3d 1336 (Fed. Cir.
`2006) .......................................................................................................... 18
`
`Attorneys Trust v. Videotape Computer Prods., Inc., 93 F.3d 593 (9th
`Cir. 1996).............................................................................................. 11, 12
`
`Azure Networks, LLC v. CSR plc, 771 F.3d 1336 (Fed. Cir. 2014) ...................... 6, 7
`
`Barona Band of Mission Indians v. Yee, 528 F.3d 1184 (9th Cir. 2008) ...... 1, 10, 11
`
`Calgon Corp. v. Nalco Chem. Co., 726 F. Supp. 983 (D. Del. 1989) ...................... 9
`
`Cass Cnty. Joint Water Res. Dist. v. 1.43 Acres of Land, 643 N.W.2d
`685 (N.D. 2002) .................................................................................... 10, 23
`
`City of Lincoln City v. U.S. Dep’t of Interior, 229 F. Supp. 2d 1109
`(D. Or. 2002) .............................................................................................. 17
`
`Civil Aeronautics Bd. v. Delta Air Lines, Inc., 367 U.S. 316 (1961) ...................... 24
`
`Cnty. of Yakima v. Yakima Indian Nation, 502 U.S. 251 (1992) ............................ 22
`
`Commander Oil Corp. v. Advance Food Serv. Equip., 991 F.2d 49 (2d
`Cir. 1993)...................................................................................................... 4
`
`Commonwealth v. Think Finance, Inc., No. 14-cv-7139, 2016 WL
`183289 (E.D. Pa. Jan. 14, 2016) .................................................................. 18
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`CSR plc. v. Azure Networks LLC, 135 S. Ct. 1845 (2015) 135 S. Ct.
`1845 (2015) .................................................................................................. 6
`
`Cuozzo Speed Techs., LLC v. Lee, 136 S. Ct. 2131 (2016) ................................ 2, 12
`
`Dep’t of Tax. & Fin. of N.Y. v. Milhelm Attea & Bros., 512 U.S. 61
`(1994) ......................................................................................................... 10
`
`Diné Citizens Against Ruining Our Env’t. v. U.S. Office of Surface
`Mining Reclamation & Enf’t, No. 12-cv-1275-AP, 2013 WL
`68701 (D. Colo. Jan. 4, 2013) ..................................................................... 22
`
`EEOC v. Karuk Tribe Hous. Auth., 260 F.3d 1071 (9th Cir. 2001) ....................... 23
`
`FlowRider Surf, Ltd. v. Pac. Surf Designs, Inc., 2017 WL 2349031
`(S.D. Cal. May 26, 2017) .......................................................................... 4, 8
`
`Gingras v. Rosette, Case No. 5:15-cv-101, 2016 WL 2932163 (D. Vt.
`May 18, 2016)............................................................................................. 10
`
`Idaho Potato Comm’n v. M & M Produce Farm & Sales, 335 F.3d
`130 (2d Cir. 2003) ....................................................................................... 12
`
`Intellectual Prop. Dev., Inc. v. TCI Cablevision of Cal., Inc., 248 F.3d
`1333 (Fed. Cir. 2001) .................................................................................... 9
`
`Kramer v. Caribbean Mills, Inc., 394 U.S. 823 (1969) ......................................... 11
`
`Lewis v. Clark, 127 S. Ct. 1285 (2017) ................................................................. 19
`
`Luminara Worldwide, LLC v. Liown Elecs. Co., 814 F.3d 1343 (Fed.
`Cir. 2016)................................................................................................ 8, 20
`
`Lundgren v. Upper Skagit Indian Tribe, 389 P.3d 569 (Wash. 2017),
`modified, 2017 Wash. LEXIS 619 (Wash. June 8, 2017)............................. 23
`
`Mich. v. Bay Mills Indian Cmty, 134 S. Ct. 2024 (2014) ....................................... 13
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`Michigan v. EPA, 268 F.3d 1075 (D.C. Cir. 2001) ................................................ 25
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`Otoe-Missouria Tribe v. NY DFS, 769 F.3d 105 (2d Cir. 2014) ................ 11, 12, 19
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`Philippines v. Pimentel, 553 U.S. 851 (2008)........................................................ 21
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`Rates Tech. Inc. v. Speakeasy, Inc., 685 F.3d 163 (2d Cir. 2012) .......................... 13
`
`SourceOne Global Partners, LLC v. KGK Synergize, Inc., No. 08-C-
`7403, 2009 WL 1346250 (N.D. Ill. May 13, 2009) ..................................... 20
`
`Speedplay, Inc. v. Bebop, Inc., 211 F.3d 1245 (Fed. Cir. 2000) ........................... 5, 7
`
`Steel Co. v. Citizens for a Better Env’t, 523 U.S. 83 (1998) .................................. 24
`
`Univ. of Utah v. Max-Planck-Gesellschaft zur Forderung der
`Wissenschaften E.V., 734 F.3d 1315 (Fed. Cir. 2013) ........................... 19, 20
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`Vastfame Camera, Ltd. v. ITC, 386 F.3d 1108 (Fed. Cir. 2004) ............................ 24
`
`Vaupel Textilmaschinen KG v. Meccanica Euro Italia SPA, 944 F.2d
`870 (Fed. Cir. 1991) .............................................................................. 3, 4, 5
`8, 9
`
`Wash. v. Confed. Tribes of Colville Indian Reservation, 447 U.S. 134
`(1980) ............................................................................................. 11, 22, 23
`
`STATUTES
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`35 U.S.C. §6(a) ..................................................................................................... 20
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`35 U.S.C. §261 ..................................................................................................... 23
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`35 U.S.C. §311(b) ................................................................................................. 22
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`35 U.S.C. §312(a)(5) ............................................................................................. 16
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`35 U.S.C. §313 ..................................................................................................... 16
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`35 U.S.C. §314(c) ................................................................................................. 16
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`35 U.S.C. §315 ............................................................................................... 16, 24
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`35 U.S.C. §316 ........................................................................................... 1, 16, 25
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`35 U.S.C. §317 ............................................................................................... 22, 24
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`35 U.S.C. §318 ......................................................................................... 22, 24, 25
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`RULES
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`37 C.F.R. 42.9(b) .................................................................................................. 15
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`37 C.F.R. 42.73(d)(3) ............................................................................................ 23
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`37 C.F.R. §42.20(c) .............................................................................................. 24
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`37 C.F.R. §42.23(b) .............................................................................................. 24
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`37 C.F.R. §§42.108(c), 42.74(a), 42.9(b) .............................................................. 14
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`77 Fed. Reg. 48756, 48768 (2012) ........................................................................ 16
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`Federal Rule of Civil Procedure 19 ............................................... 16, 17, 18, 20, 21
`
`PTAB
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`Allergan, Inc. v. 1474791 Ontario, Ltd., IPR2016-00102, Paper 61 ........................ 1
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`Covidien LP v. Univ. of Fla. Research Found., IPR2016-01274, Paper
`21 ................................................................................................................ 16
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`NeoChord, Inc. v. Univ. of Md. Balt., IPR2016-00208, Paper 28 .................... 15, 16
`
`Reactive Surface Ltd., LLP v. Toyota Motor Corp., IPR2017-00572, Paper
`32……………………………………………………..….…14, 15, 16, 17, 24
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`I.
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`INTRODUCTION
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`A week before the scheduled hearing, Allergan announced it had made a
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`deal with the St. Regis Mohawk Tribe (“the Tribe”) to invoke tribal immunity as a
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`shield against an adverse Board decision. Allergan and the Tribe justify the deal by
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`claiming that inter partes review (“IPR”) is “unfair” and a “kangaroo court.”2 But
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`impugning the Board’s integrity and Congress’s considered decision to create IPRs
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`cannot justify Allergan’s purchase of the Tribe’s immunity to circumvent the law
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`and “reap a windfall at the public’s expense.” Barona Band of Mission Indians v.
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`Yee, 528 F.3d 1184, 1187, 1190 (9th Cir. 2008). Their goal is to block public
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`access to an alternative to Allergan’s Restasis® product and perpetuate Allergan’s
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`monopoly profits, which they have already enjoyed for almost 15 years. EX1149
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`(Healthcare Organizations’ Letter to Congress); EX1150 (Henry Waxman:
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`Allergan’s deal undermines Hatch-Waxman); EX1152; 35 U.S.C. §316(b).
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`2 EX1144; EX1145 at 1; see also EX1146 (“thorn in [Allergan’s) side”);
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`EX1147; EX1148. Allergan had no qualms embracing AIA review when it wanted
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`to do so. After being accused of patent infringement in district court, Allergan filed
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`an IPR and obtained a decision cancelling the claims. See Allergan, Inc. v.
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`1474791 Ontario, Ltd., IPR2016-00102, Paper 61.
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`By purchasing immunity in an effort to protect its Restasis® patents from
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`review, Allergan attempts to manipulate Board jurisdiction and subvert the very
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`purpose of AIA reforms: to subject weak patents to scrutiny. Cuozzo Speed Techs.,
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`LLC v. Lee, 136 S. Ct. 2131, 2139-40 (2016); EX1151. There is little doubt that
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`Allergan’s deal with the Tribe is a sham—the Tribe’s interest as the purported
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`patent owner amounts to a mere four days of Allergan’s annual Restasis® sales.
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`See EX1152 at 3, 8-10; EX1153 at 1-2. Legally and factually, the Tribe is not the
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`effective owner.
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`The Tribe’s theory for dismissal hinges on the false assumptions that the
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`Tribe owns the patents and that the IPRs cannot proceed without them.
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`Unsurprisingly, Allergan did not actually transfer to the Tribe any substantial
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`rights to the patents protecting the Restasis® empire. The agreements show that
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`Allergan retained all substantial rights, and it remains the owner under well-
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`established patent law principles. Moreover, even if the Tribe could be considered
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`an owner, its minimal interests (if any) are adequately represented by Allergan, the
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`far more interested party, and an adequate remedy will issue with or without the
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`Tribe’s participation. The answer to the test used by the courts—“whether, in
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`equity and good conscience, the action should proceed among the existing
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`parties” —is manifest: the Board’s power over the patents was not destroyed by
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`Allergan’s eleventh-hour deal. Even if a valid assignment had taken place,
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`termination is not required because the Board has statutory and agency authority to
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`proceed without further owner participation.
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`The Tribe’s motion suffers numerous additional flaws and its assertion of
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`tribal immunity is wrong. Further, Allergan and the Tribe overlook fundamental
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`distinctions in this case from prior Board decisions on Eleventh Amendment
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`immunity on which the Tribe relies. And, not to be overlooked, Allergan’s abuse
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`of the patent system runs contrary to established tribal immunity principles, and the
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`assignment is facially void as a contrivance to thwart congressionally mandated
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`review. The Tribe’s motion should be denied.
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`II. ALLERGAN REMAINS THE PATENT OWNER
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`The Tribe’s motion to dismiss these IPRs relies on Allergan’s purported
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`“assignment.” But Allergan remains the owner, both practically and legally.
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`A. The Tribe Never Held All Substantial Rights
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`Even taking Allergan’s agreements at face value, Allergan never transferred
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`all substantial rights to the Tribe and it remains the effective owner today. An
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`agreement’s substance governs ownership, not the labels parties choose. Vaupel
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`Textilmaschinen KG v. Meccanica Euro Italia SPA, 944 F.2d 870, 875 (Fed. Cir.
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`1991) (“[U]se of the term ‘exclusive license’… [wa]s not dispositive” where
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`agreements granted all substantial rights). To determine if a transaction is
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`“tantamount to an assignment,” this Board must evaluate both “the intention of the
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`parties” and “the substance of what was granted.” Alfred E. Mann Found. for Sci.
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`Research v. Cochlear Corp., 604 F.3d 1354, 1358-59 (Fed. Cir. 2010).
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`Courts have developed a non-exhaustive list of rights to evaluate if a
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`transaction conveys “all substantial rights” and constitutes a true assignment,
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`including the right to sue, exclusive use, sublicensing rights, allocation of licensing
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`and litigation proceeds, licensing supervision, maintenance-fee payment, and
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`alienability. Id. at 1360-61. When a transfer involves multiple documents executed
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`simultaneously, courts read them together. See, e.g., FlowRider Surf, Ltd. v. Pac.
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`Surf Designs, Inc., 2017 WL 2349031, at *1-4 (S.D. Cal. May 26, 2017);
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`Commander Oil Corp. v. Advance Food Serv. Equip., 991 F.2d 49, 53 (2d Cir.
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`1993). The Assignment and Exclusive License (EX2085–2087) (“Transaction
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`Documents”) make clear Allergan remains the sole effective owner.
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`1. Control of Litigation and IPR Strategies. One critical factor is who
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`brings and controls litigation. Mann, 604 F.3d at 1361; Vaupel, 944 F.2d at 875.
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`Allergan retains the “first right” to sue competitors and to “control and prosecute
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`… any past, present or future Infringement.” Compare Mann, 604 F.3d at 1361 and
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`FlowRider, 2017 WL 2349031 at *6 (“first right, but not the obligation”), with
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`EX2087 §5.2.2. Allergan also retains “the first right” to “defend and control”
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`validity defense, enforceability and patentability of these patents. EX2087 §§1.31,
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`5.3, Schedule 1.31. “Allergan shall retain control of the defense in such claim, suit
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`or proceeding;” the Tribe must “assist and cooperate with” Allergan, including
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`“furnishing” power of attorney to permit “joining in” the proceedings, and
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`providing access to relevant documents. Id. §5.3. Allergan must pay the Tribe’s
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`expenses. Id. §§5.2.2, 5.2.3, 5.3. “This grant is particularly dispositive here
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`because the ultimate question confronting [the Board] is whether [Allergan] can
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`[act in the IPR] on its own or whether [the Tribe] must be joined as a party.”
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`Vaupel, 944 F.2d at 875.
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`In contrast to Allergan’s expansive rights, the Tribe has only minor,
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`contingent rights: it can take over commercially relevant litigation with Allergan’s
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`consent and provide “reasonable input” in response to “notice” from Allergan. Id.
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`§§5.2.2, 5.3. Allergan’s right to grant sublicenses without obligation to pass any
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`royalties to the Tribe renders these rights “nugatory.” Speedplay, Inc. v. Bebop,
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`Inc., 211 F.3d 1245, 1251 (Fed. Cir. 2000); see also Vaupel, 944 F.2d at 875.
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`Simply put, Allergan retained control over validity and commercially relevant
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`infringement proceedings, and granted the Tribe only contingent, illusory rights to
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`enforce the patents. This is compelling evidence that Allergan never transferred all
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`substantial rights to the Tribe.
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`2. Exclusive Right to Make, Use, and Sell Restasis®. Allergan also retains
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`the “irrevocable, perpetual, transferable and exclusive” rights to “Exploit” (to
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`“make, have made, use, offer to sell, sell import or otherwise exploit”) Licensed
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`Products “for all FDA-approved uses in the United States.” EX2087 §§2.1, 3.1,
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`1.19, 1.33. Allergan also has “the sole and exclusive right” to obtain and maintain
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`regulatory approvals. Id. §3.1. Allergan thus retains the “vitally important” right to
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`exploit all claims of all patents for all FDA-approved purposes. Mann, 604 F.3d at
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`1360.
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`Allergan is not a mere field-of-use licensee. The Tribe’s nominal rights—for
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`research, scholarly use, teaching, education, and “incidental” patient care (EX2087
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`§2.4)—are window-dressing. The claims are limited to human use so any rights
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`held by the Tribe for non-FDA approved uses are illusory. As recently as August
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`22, 2017, Allergan told the district court that all “the claimed uses are ‘on-label.’”
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`EX1154 at 0006 (“Using Restasis® to treat KCS and dry eye or to restore tearing
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`are simply not off-label uses”). The Tribe’s use rights are insubstantial because it
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`cannot use them for any commercial purposes. EX2087 §2.4. Notably, the Tribe
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`provides no evidence that it uses the patents at all. See Azure Networks, LLC v.
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`CSR plc, 771 F.3d 1336, 1344 (Fed. Cir. 2014) (according little weight to nominal
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`owner’s right to make products because no evidence suggested it had such
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`products), vacated sub nom. CSR plc. v. Azure Networks LLC, 135 S. Ct. 1845
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`(2015) (vacating claim construction); EX1145 at 1-2 (the Tribe informing
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`members that it is investing no money to exploit the patents and that its only role
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`will be to “hold the patents”). Again, the record shows Allergan retains all
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`substantial rights.
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`3. Right to Sublicense and Settle. Allergan retains “all licenses and other
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`rights” including “the right to grant sublicenses … for the purpose of settling any
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`dispute or proceeding,” and to exploit the patents “through its…sublicensees.”
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`EX2087 §§2.1, 2.3, 3.1. Allergan may subcontract its obligations without
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`restriction. EX2087 § 10.4. Allergan thus has full power to end any proceeding—
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`even one the Tribe wants to pursue—simply by granting a sublicense.
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`Allergan’s rights to grant sublicenses and settle litigation demonstrate that it
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`remains the effective owner. See Azure, 771 F.3d at 1347 (exclusive license with
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`substantial rights to sublicense and control litigation made licensee effective owner
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`even where nominal assignee received a third of enforcement proceeds);
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`Speedplay, 211 F.3d at 1251 (licensee’s sublicensing right rendered licensor’s
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`nominal rights to sue and approve assignments insubstantial).
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`4. Duration of Rights. Allergan’s exclusive license is “perpetual” and
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`“irrevocable,” and it continues for the life of the patents. EX2087 §§2.1, 9.1.1.
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`Allergan’s control of these patents continues even if the License is voided. EX2087
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`§9.2. Thus, the Tribe is powerless to extinguish Allergan’s rights.
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`5. Proceeds from Commercial Litigation. Allergan retains rights to
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`monetary recovery from all commercially relevant litigation against any generic
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`drug maker, including damages and settlement proceeds. See EX2087 §§5.2.5,
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`5.2.2. The Tribe receives only reimbursement for costs incurred to appear and
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`cooperate with Allergan, id. §§5.2.5, 5.1.2, 5.1.5, 5.2.2, 5.3, which is not a share in
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`the recovery and does not amount to a substantial right. See Flowrider, 2017 WL
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`2349031, at *8. The Tribe’s only real interest is monetary, and even that interest is
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`capped regardless of any litigation or sublicensing proceeds. EX2087 §§4.1, 4.2.
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`The Tribe’s interest at most amounts to 1% of sales. EX1153 (reporting $15
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`million annual payment on $1.5 billion in annual sales). But “a financial interest …
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`without more does not amount to a substantial right….” Luminara Worldwide, LLC
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`v. Liown Elecs. Co., 814 F.3d 1343, 1351 (Fed. Cir. 2016); see also Vaupel, 944
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`F.2d at 875.
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`6. Retention of Extensive Other Rights. Control over prosecution and
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`payment of maintenance fees can “demonstrat[e] … the effective owner of the
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`patent,” FlowRider, 2017 WL 2349031, at *8, but these belong to Allergan.
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`EX2087 §5.1.1. Allergan makes all patent term extension decisions (§5.1.5) and
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`has “sole right” to list patents in the Orange Book (§5.1.6) and communicate with
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`FDA (§3.1). Allergan can transfer or assign its rights to an affiliate or successor
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`without the Tribe’s consent. Id. §§2.1, 10.3, 7.2.8. These rights further confirm that
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`Allergan is the real owner.
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`7. The Tribe’s Obligation and Restrictions. The Tribe incurred many
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`obligations and restrictions that confirm Allergan’s status as owner. The Tribe
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`“shall cooperate” with Allergan in litigation and other proceedings relating to the
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`patents. See id. §§5.1.4, 5.2.4, 5.3. The Tribe must “assert its sovereign immunity”
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`in “IPR Proceedings,” and cannot “waive its sovereign immunity in any manner
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`that would create recourse to the Licensed Patents.” Id. §§5.3, 7.2.12, 7.2.8. Yet
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`the Tribe may “not assert its sovereign immunity as to any claim, counter-claim or
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`affirmative defense in the E.D. Texas Litigations.” Id. §5.2.2. Allergan thus
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`controls even the Tribe’s decision whether to invoke or waive tribal sovereign
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`immunity—an extraordinary restriction on the supposed “assignee” and “owner.”
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`The Tribe also cannot transfer or grant any other license or other right in the
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`patents “without Allergan’s prior written consent.” Id. §§7.2.8, 10.3. By contrast,
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`Allergan may assign its interests to any affiliate or successor. Id. Allergan’s control
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`over the Tribe’s alienation of “its” property interests confirms that Allergan
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`remains the owner. See Calgon Corp. v. Nalco Chem. Co., 726 F. Supp. 983, 986
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`(D. Del. 1989) (“[T]he right to further assign patent rights is implicit in any true
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`assignment.”); Intellectual Prop. Dev., Inc. v. TCI Cablevision of Cal., Inc., 248
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`F.3d 1333, 1345 (Fed. Cir. 2001) (“limits on … assignment rights weigh in favor
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`of finding ... a transfer of fewer than all substantial rights in a patent”).
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`Altogether, any rights of the Tribe are at most a “minor derogation” and
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`“d[o] not substantially interfere with the full use by [Allergan] of the exclusive
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`rights under the patent….” Vaupel, 944 F.2d at 875. In reality, Allergan maintains
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`full control over these patents and retains more than 99% of the patent revenue.
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`B.
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`The Sham Agreement Is No Barrier to Inter Partes Review
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`Allergan’s deal with the Tribe is the latest in a long series of schemes to buy
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`tribal immunity for dubious activities. See Gingras v. Rosette, Case No. 5:15-cv-
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`101, 2016 WL 2932163, at *34 (D. Vt. May 18, 2016) (explaining “rent-a-tribe”
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`schemes). Courts and agencies have the power and duty to prevent abuses of tribal
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`immunity. See Barona, 528 F.3d at 1190 (refusing to extend an immunity “rooted
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`in due respect for Indian autonomy, to provide tax shelters for non-Indian
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`businesses”); Cass Cnty. Joint Water Res. Dist. v. 1.43 Acres of Land, 643 N.W.2d
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`685, 694-95 (N.D. 2002) (tribal immunity did not bar in-rem condemnation of off-
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`reservation land transferred to block development).
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`Allergan’s sham assignment does not alter the legal and economic reality
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`that Allergan controls and principally benefits from the patents. The Tribe’s
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`attorney candidly admits exploiting immunity as an “arbitrage opportunity” given
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`that “there’s a huge value difference between patents which can be subject to IPRs
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`and patents that are not.” EX1148 at 1, EX1146, EX1145 at 2.
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`But creating an “arbitrage opportunity” for others is not the purpose of the
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`tribal sovereign-immunity doctrine. Courts readily reject third-party abuse of tribal
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`immunity to evade laws—and have specifically done so with the Tribe. E.g., Dep’t
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`of Tax. & Fin. of N.Y. v. Milhelm Attea & Bros., 512 U.S. 61, 75-76 (1994)
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`(upholding State law to end Tribe-facilitated tax evasion); Wash. v. Confed. Tribes
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`of Colville Indian Reservation, 447 U.S. 134, 136 (1980) (disallowing tribe-
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`marketed “exemption from state taxation”); Otoe-Missouria Tribe v. NY DFS, 769
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`F.3d 105, 114, 116 (2d Cir. 2014) (a tribe “has no legitimate interest in selling an
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`opportunity to evade [the] law” to a non-Indian). Allergan cannot buy a “legal
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`loophole in the cloak of tribal sovereignty[.]” Otoe-Missouria Tribe, 769 F.3d at
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`114. Nor may it use tribal immunity to alter “the economic reality of a
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`transaction … to reap a windfall at the public’s expense.” Barona Band, 528
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`F.3d at 1190.
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`Moreover, sham assignments made to destroy jurisdiction are ineffective
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`when “the assignee was a strawman and had no real interest in the outcome of the
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`case, although a good outcome would have had some economic value.” Attorneys
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`Trust v. Videotape Computer Prods., Inc., 93 F.3d 593, 598 (9th Cir. 1996)
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`(jurisdiction not affected); cf. Kramer v. Caribbean Mills, Inc., 394 U.S. 823, 827-
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`28 (1969) (jurisdiction not created through an assignment that was “a mere
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`contrivance, a pretense, the result of a collusive agreement”). Courts police
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`“manipulations of their jurisdiction with partial assignments which lack reality and
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`amount to no change in the identity of the party with the real interest in the
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`outcome of the case.” Attorneys Trust, 93 F.3d at 597.
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`“[C]lassic elements of an assignment which does not affect jurisdiction”
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`include an assignee that “had no prior interest” in the matter prior to the
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`assignment, an assignment timed to affect jurisdiction, “the assignee gave no
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`consideration” apart from its role in the litigation, and the assignor retained
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`significant control and most of the profits. Id. at 599; see also Airlines Reporting
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`Corp. v. S & N Travel, Inc., 58 F.3d 857, 863 (2d Cir. 1995) (facial collusion to
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`affect jurisdiction shifts burden to show “a legitimate business purpose for the
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`assignment”). These “classic elements” of a sham assignment are all present here.
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`The question of “immunity” need not be reached because the assignment has all
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`the “classic elements” of a sham that does not alter the Board’s jurisdiction.
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`Indeed, the Tribe admittedly provided no consideration in return for the
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`sham patent assignment apart from an unlawful promise to assert sovereign
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`immunity in these or other IPRs. EX1151 at 2-3. Far from “good and valuable
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`consideration” (EX2085), the promise amounts to “selling an opportunity to evade
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`[the] law” and cannot be upheld. Otoe-Missouria Tribe, 769 F.3d at 114.
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`Allergan’s purported assignment is also void because it undermines the AIA.
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`“[F]ederal policy embodied in the law of intellectual property can trump even
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`explicit contractual provisions.” Idaho Potato Comm’n v. M & M Produce Farm &
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`Sales, 335 F.3d 130, 137 (2d Cir. 2003). Allergan overtly seeks tribal immunity for
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`private gain at public expense, which is no justification for extending tribal
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`immunity to thwart a congressional mandate. See Cuozzo Speed Techs., LLC v.
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`Lee, 136 S. Ct. 2131, 2139-40 (2016) (recognizing the Board’s “power to revisit
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`and revise earlier patent grants” as an “important congressional objective” in the
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`AIA). This sham assignment threatens to subvert a cornerstone of patent reform.
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`Allergan’s gambit threatens not just these IPRs, but the integrity of the patent
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`system, encouraging others to follow the same “business plan.” EX1147 at 3 (200
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`calls from interested parties); EX1155 (Allergan explaining “it creates a playbook
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`for other cases down the road both for us and for others”); Rates Tech. Inc. v.
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`Speakeasy, Inc., 685 F.3d 163, 172 (2d Cir. 2012) (voiding contract clause that
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`would “significantly undermine the public interest in discovering invalid patents”)
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`(internal quotation omitted). Sovereign immunity does not require respect for an
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`agreement designed to protect patents from review. The Tribe has not shown that a
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`party “who has not chosen to deal with a tribe” is barred from seeking “relief for
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`off-reservation commercial conduct.” Mich. v. Bay Mills Indian Cmty, 134 S. Ct.
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`2024, 2036 n.8 (2014).
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`III. EVEN IF THE TRIBE WERE THE SOLE OR JOINT PATENT
`OWNER IT IS NOT AN INDISPENSABLE PARTY
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`The Tribe asserts (at 16-25) that the Board may not proceed without its
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`participation and that Allergan is a mere “field-of-use licensee” that “lacks
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`authority under the statutory scheme to participate.” The Tribe is wrong—any
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`rights retained by the Tribe are insufficient to make it indispensable, and this
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`proceeding may continue without it.
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`A. Allergan Adequately Represents All Interests in the Patents
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`As discussed above, the Tribe holds no substantial rights in the patents. Even
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`if the Tribe did hold any relevant interest through its sham agreements with
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`Allergan, no rule categorically requires dismissal of an IPR in the absence of an
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`interested sovereign, and Allergan can adequately represent any such interests as
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`an existing party to the proceedings. In Reactive Surface Ltd., LLP v. Toyota Motor
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`Corp., Toyota and the University of Minnesota (“Minnesota”) co-owned and had
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`identical interests in the patent. Like the Tribe, Minnesota argued that “‘the
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`interests of the absent sovereign’… cannot be protected adequately by any
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`remaining private-party defendants.” IPR2017-00572, Paper 32 at 12-13. But the
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`Board rejected “a rule under which the successful assertion of [state] sovereign
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`immunity by one party requires a dismissal of the action against the remaining
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`parties,” finding that Toyota could adequately represent Minnesota’s interests even
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`though Toyota was not a sovereign entity. Id. at 14. The Board explained that the
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`“rules contemplate proceeding with less than all the owners of challenged patent.”
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`Id. at 17. For example, the Board may “institute trial and proceed to a final written
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`decis