Case: 18-1638 Document: 137 Page: 1 Filed: 08/20/2018
`Nos. 18-1638, 18-1639, 18-1640, 18-1641, 18-1642, 18-1643
`
`In the United States Court of Appeals
`For the Federal Circuit
`
`SAINT REGIS MOHAWK TRIBE, ALLERGAN, INC.,
`
`
`
`Appellants,
`v.
`
`
`
`MYLAN PHARMACEUTICALS, INC., TEVA PHARMACEUTICALS USA, INC., AND
`AKORN, INC,
`
`Appellees.
`
`
`
`
`
`
`
`
`
`
`
`Appeals from: Patent and Trademark Office - Patent Trial and Appeal Board
`in Inter Partes Review Nos. IPR2016-01127, IPR2016-01128, IPR2016-01129, IPR2016-01130,
`IPR2016-01131, IPR2016-01132, IPR2017-00576,
`IPR2017-00578, IPR2017-00579, IPR2017-00583, IPR2017-00585,
`IPR2017-00586, IPR2017-00594, IPR2017-00596, IPR2017-00598,
`IPR2017- 00599, IPR2017-00600, IPR2017-00601
`
`
`PETITION FOR REHEARING EN BANC OF APPELLANTS
`SAINT REGIS MOHAWK TRIBE AND ALLERGAN, INC.
`
`
`Marsha Kostura Schmidt
`ATTORNEY AT LAW
`14928 Perrywood Drive
`Burtonsville, MD 20866
`Tel: (301) 949-5176
`
`
`Michael W. Shore
`Alfonso Garcia Chan
`Christopher L. Evans
`Joseph F. DePumpo
`SHORE CHAN DEPUMPO LLP
`901 Main Street, Suite 3300
`Dallas, TX 75202
`Tel: (214) 593-9110
`
`Counsel for Appellant
`Saint Regis Mohawk Tribe
`
`
`
`
`
`Jonathan S. Massey
`MASSEY & GAIL LLP
`1325 G Street, NW, Suite 500
`Washington, D.C. 20005
`Tel: (202) 652-4511
`Robert A. Long, Jr.
`Jeffrey B. Elikan
`Thomas R. Brugato
`Alaina M. Whitt
`COVINGTON & BURLING LLP
`850 Tenth Street, NW
`Washington, D.C. 20001-4956
`Tel: (202) 662-5612
`Counsel for Appellant
` Allergan, Inc.
`
`Patent Owner Saint Regis Mohawk Tribe
`Ex. 2007, p. 1
`
`

`

`Case: 18-1638 Document: 137 Page: 2 Filed: 08/20/2018
`
`
`
`CERTIFICATE OF INTEREST
`
`Counsel for Appellants certify the following:
`
`1. Full Name of Party
`Represented by me
`
`
`
`2. Name of Real
`Party in interest
`represented by me
`is:
`
`3. Parent corporations and
`publicly held companies that own
`10% or more of stock in the party
`
`Saint Regis Mohawk
`Tribe
`
`N/A
`
`N/A
`
`Allergan, Inc.
`
`N/A
`
`Allergan plc
`
`
`
`4.
`
`The names of all law firms and the partners or associates that appeared for the
`
`party or amicus now represented by me in the trial court or agency or are
`
`expected to appear in this Court are:
`
`Saint Regis Mohawk Tribe
`
`Allergan, Inc.
`
`SHORE CHAN DEPUMPO LLP
`Michael W. Shore
`Christopher L. Evans
`Alfonso Garcia Chan
`Joseph F. DePumpo
`
`Marsha Kostura Schmidt
`Attorney at Law
`
`
`
`
`
`
`
`MASSEY & GAIL LLP
`Jonathan S. Massey
`
`FISH & RICHARDSON P.C.
`Michael J. Kane
`Dorothy P. Whelan
`Susan Morrison
`Robert Oakes
`
`COVINGTON & BURLING LLP
`Robert A. Long, Jr.
`Jeffrey B. Elikan
`Thomas R. Brugato
`Alaina M. Whitt
`
`
`
`
`
`i
`
`Patent Owner Saint Regis Mohawk Tribe
`Ex. 2007, p. 2
`
`

`

`Case: 18-1638 Document: 137 Page: 3 Filed: 08/20/2018
`
`
`
`5.
`
`The title and number of any case known to counsel to be pending in this or
`
`any other court or agency that will affect or be directly affected by this Court’s
`
`decision in the pending appeal. See Fed. Cir. R. 47.4(a) (5) and 47.5(b).
`
`Federal Circuit: Allergan, Inc. v. Teva Pharmaceuticals USA, Inc.,
`No. 2018-1130
`
`Regents of the University of Minnesota v. LSI Corp.,
`No. 2018-1559
`
`Allergan, Inc. v. Deva Holding A.S., No. 2:16-cv-1447
`
`Respectfully submitted,
`
`/s/ Jonathan S. Massey
`Jonathan S. Massey
`Counsel for Appellant
`Allergan, Inc.
`
`
`
`
`
`
`
`
`
`
`ii
`
`
`
`E.D. Texas:
`
`
`August 20, 2018
`
`
`
`
`
`
`
`
`/s/ Marsha K. Schmidt
`Marsha Kostura Schmidt
`Counsel for Appellant
`Saint Regis Mohawk Tribe
`
`
`
`
`
`
`
`
`
`Patent Owner Saint Regis Mohawk Tribe
`Ex. 2007, p. 3
`
`

`

`Case: 18-1638 Document: 137 Page: 4 Filed: 08/20/2018
`
`TABLE OF CONTENTS
`
`II. 
`
`
`CERTIFICATE OF INTEREST ................................................................................ i 
`TABLE OF AUTHORITIES ..................................................................................... v 
`STATEMENT OF COUNSEL PURSUANT TO RULE 35(B)(2) ....................... viii 
`INTRODUCTION ..................................................................................................... 1 
`STATEMENT ............................................................................................................ 2 
`ARGUMENT ............................................................................................................. 7 
`I. 
`This Case Presents
`Issues Of Exceptional
`Importance
`Warranting En Banc Review. ................................................................ 7 
`The Panel Decision Is Contrary To Precedent Of The Supreme
`Court And This Court. ........................................................................... 7 
`A. 
`The Panel Failed To Follow FMC, SAS, Alden, And Vas-
`Cath. ............................................................................................ 7 
`1. 
`The Director’s Role In Deciding Whether To Institute
`An IPR Does Not Eliminate Sovereign Immunity. .......... 8 
`The PTAB’s Ability To Issue A Decision Absent The
`Petitioner And To Intervene On Appeal Does Not
`Eliminate Sovereign Immunity. ...................................... 13 
`The Lack Of Complete Identity Between IPRs And
`Federal Civil Litigation Does Not Eliminate Sovereign
`Immunity. ........................................................................ 14 
`The Contrast Between IPRs And Ex Parte Re-
`Examinations Supports The Availability Of Sovereign
`Immunity. ........................................................................ 16 
`Oil States and Cuozzo Do Not Support the Panel’s
`Decision. ................................................................................... 17 
`CONCLUSION ........................................................................................................ 18 
`ADDENDUM ..............................................................................................................  
`CERTIFICATE OF COMPLIANCE ...........................................................................  
`iii
`
`2. 
`
`3. 
`
`4. 
`
`B. 
`
`
`
`Patent Owner Saint Regis Mohawk Tribe
`Ex. 2007, p. 4
`
`

`

`Case: 18-1638 Document: 137 Page: 5 Filed: 08/20/2018
`
`
`
`CERTIFICATE OF SERVICE ....................................................................................
`
`
`
`
`
`
`
`iv
`
`Patent Owner Saint Regis Mohawk Tribe
`Ex. 2007, p. 5
`
`

`

`Case: 18-1638 Document: 137 Page: 6 Filed: 08/20/2018
`
`TABLE OF AUTHORITIES
`
` Page(s)
`
`
`
`Cases
`
`Alden v. Maine,
`527 U.S. 706 (1999) ................................................................................... passim
`
`Belden Inc. v. Berk-Tek LLC,
`805 F.3d 1064 (Fed. Cir. 2015) ........................................................................... 4
`
`Covidien LP v. Univ. of Fla. Research Found. Inc.,
`No. IPR2016-01274, Paper 21 (PTAB Jan. 25, 2017) ........................................ 3
`
`Cuozzo Speed Techs., LLC v. Lee,
`136 S.Ct. 2131 (2016) ................................................................................. 17, 18
`
`Eli Lilly and Co. v. Board of Regents of the University of Washington,
`334 F.3d 1264 (Fed. Cir. 2003) .........................................................................11
`
`Federal Maritime Comm’n v. S.C. State Ports Auth.,
`535 U.S. 743 (2002) ................................................................................... passim
`
`In re Magnum Oil Tools Int’l, Ltd.,
`829 F.3d 1364 (Fed. Cir. 2016) ........................................................................... 5
`
`Knowles Electronics LLC v. Iancu,
`886 F.3d 1369 (Fed. Cir. 2018) .........................................................................14
`
`LSI Corp. v. Regents of the University of Minnesota,
`No. IPR2017–01068, No. 2017 WL 6517562, (PTAB Dec. 19, 2017) ............16
`
`NeoChord, Inc. v. Univ. of Md., Balt.,
`No. IPR2016-00208, Paper 28 (PTAB May 23, 2017) ....................................... 3
`
`Oil States Energy Services v. Greene’s Energy Group, LLC,
`138 S.Ct. 1365 (2018) ........................................................................................17
`
`Reactive Surfaces, Ltd. v. Toyota Motor Corp.,
`No. IPR2017–00572, 2017 WL 2992435 (July 13, 2017) ............................3, 16
`
`RPX Corp. v. Applications in Internet Time, LLC,
`IPR2015-01750, Paper 11 (PTAB Oct. 20, 2015) .............................................13
`
`
`
`v
`
`Patent Owner Saint Regis Mohawk Tribe
`Ex. 2007, p. 6
`
`

`

`Case: 18-1638 Document: 137 Page: 7 Filed: 08/20/2018
`
`
`
`RPX Corp. v. Applications in Internet Time, LLC,
`IPR2015-01750, Paper 23 (PTAB Dec. 4, 2015) ..............................................13
`
`RPX Corp. v. Applications in Internet Time, LLC,
`IPR2015-01750, Paper 58 (PTAB May 6, 2016) ..............................................13
`
`S.C. Ports Auth. v. Fed. Mar. Comm’n,
`243 F.3d 165 (4th Cir. 2001),
`aff’d, 535 U.S. 743 (2002) .................................................................................17
`
`SAS Inst. Inc. v. Iancu,
`138 S.Ct. 1348 (2018) ................................................................................ passim
`
`Vas-Cath, Inc. v. Curators of Univ. of Mo.,
`473 F.3d 1376 (Fed. Cir. 2007) ................................................................. passim
`
`Statutes
`
`28 U.S.C. § 2348 ......................................................................................................14
`
`35 U.S.C. § 102(a) ...................................................................................................12
`
`35 U.S.C. § 102(e) ...................................................................................................12
`
`35 U.S.C. § 135 ........................................................................................................11
`
`35 U.S.C. § 135(b) ...................................................................................................12
`
`35 U.S.C. § 312(a)(3)(B) ........................................................................................... 4
`
`35 U.S.C. § 312(a)(5) ................................................................................................. 3
`
`35 U.S.C. § 316(a)(10) ............................................................................................... 5
`
`35 U.S.C. § 316(e) ..................................................................................................... 4
`
`35 U.S.C. § 317(a) ...................................................................................................13
`
`46 U.S.C.App. § 1710(b) .........................................................................................10
`
`Regulations
`
`37 C.F.R. § 41 ..........................................................................................................11
`
`37 C.F.R. § 42 .................................................................................................. passim
`
`
`
`vi
`
`Patent Owner Saint Regis Mohawk Tribe
`Ex. 2007, p. 7
`
`

`

`Case: 18-1638 Document: 137 Page: 8 Filed: 08/20/2018
`
`
`
`Other Authorities
`
`American Invents Act, H.R. Rep. No. 112-98 (2011) .............................................12
`
`Manual of Patent Examination Procedure Rule 2304.02(c) ....................................11
`
`Office Patent Trial Practice Guide,
`77 Fed. Reg. 48,756, 48,757 (Aug. 14, 2012) .................................................3, 5
`
`Top 300 Organizations Granted U.S. Patents in 2017,
`http://www.ipo.org/wp-content/uploads/2018/06/2017_Top-300-Patent-
`Owners.pdf. .......................................................................................................... 7
`
`USPTO, Trial Practice Guide Update (Aug. 2018),
`https://www.uspto.gov/patents-application-process/patent-trial-and-appeal-
`board/ptab-trial-practice-guide-august-2018 .......................................... 6, 15, 16
`
`
`
`
`
`
`vii
`
`Patent Owner Saint Regis Mohawk Tribe
`Ex. 2007, p. 8
`
`

`

`Case: 18-1638 Document: 137 Page: 9 Filed: 08/20/2018
`
`
`
`STATEMENT OF COUNSEL PURSUANT TO RULE 35(b)(2)
`
`Based on my professional judgment, I believe the panel decision is contrary
`
`to the following decision(s) of the Supreme Court of the United States or the
`
`precedent(s) of this court: Federal Maritime Comm’n v. S.C. State Ports Auth., 535
`
`U.S. 743 (2002); SAS Inst. Inc. v. Iancu, 138 S.Ct. 1348 (2018); Alden v. Maine, 527
`
`U.S. 706 (1999); Vas-Cath, Inc. v. Curators of Univ. of Mo., 473 F.3d 1376 (Fed.
`
`Cir. 2007).
`
`Based on my professional judgment, I believe this appeal requires an answer
`
`to one or more precedent-setting questions of exceptional importance: whether
`
`sovereign immunity may be asserted in inter partes reviews before the Patent Trial
`
`and Appeal Board.
`
`
`/s/ Marsha K. Schmidt
`Counsel for Appellant Saint Regis Mohawk Tribe
`
`/s/ Jonathan S. Massey
`Counsel for Appellant Allergan, Inc.
`
`
`
`
`
`viii
`
`Patent Owner Saint Regis Mohawk Tribe
`Ex. 2007, p. 9
`
`

`

`Case: 18-1638 Document: 137 Page: 10 Filed: 08/20/2018
`
`INTRODUCTION
`
`This case presents the question whether a federally recognized Indian tribe –
`
`and, in fact, whether any sovereign – may assert sovereign immunity in an inter
`
`partes review (“IPR”) before the Patent Trial and Appeal Board (“Board” or
`
`“PTAB”). As the panel acknowledged, “Indian tribes possess ‘inherent sovereign
`
`immunity,’ and suits against them are generally barred ‘absent a clear waiver by the
`
`tribe or congressional abrogation.’” Add.5 (citation omitted). The panel also
`
`recognized that sovereign immunity applies in administrative adjudications between
`
`private parties. Add.6-7; see Federal Maritime Comm’n v. S.C. State Ports Auth.,
`
`535 U.S. 743 (2002) (“FMC”).
`
`But the panel held that sovereign immunity does not apply in IPRs. Add.8.
`
`In so holding, the panel failed to follow the Supreme Court’s decision in FMC, which
`
`held that an administrative system of adversarial adjudications between private
`
`parties triggers sovereign immunity. 535 U.S. at 747.
`
`The panel’s decision is also inconsistent with the Supreme Court’s decision
`
`in SAS Inst. Inc. v. Iancu, 138 S.Ct. 1348 (2018), that an IPR is a “procedure
`
`allow[ing] private parties to challenge previously issued patent claims in an
`
`adversarial process before the Patent Office that mimics civil litigation.” Id. at 1352
`
`(emphases added).
`
`
`
`1
`
`Patent Owner Saint Regis Mohawk Tribe
`Ex. 2007, p. 10
`
`

`

`Case: 18-1638 Document: 137 Page: 11 Filed: 08/20/2018
`
`
`
`Further, the panel misconstrued Alden v. Maine, 527 U.S. 706, 756 (1999), in
`
`opining that the Director’s discretion whether to institute an IPR is comparable to
`
`the Attorney General’s control over whether, how, and when to sue a sovereign state
`
`and in controlling the prosecution of any such action. Add.8.
`
`The panel’s decision also conflicts with this Court’s determination in Vas-
`
`Cath, Inc. v. Curators of Univ. of Mo., 473 F.3d 1376 (Fed. Cir. 2007), that patent
`
`interference proceedings before the Board of Patent Appeals and Interferences
`
`trigger sovereign immunity. The panel did not cite, much less discuss, Vas-Cath.
`
`The case presents an important question of federal law. The panel’s reasoning
`
`effectively forecloses IPR immunity claims by any sovereign entity. Indeed, the
`
`United States described the immunity issue in this case as one of “cross-cutting
`
`significance.” U.S. Brief Amicus Curiae, at 1 (filed May 11, 2018). An appeal
`
`involving state university immunity is already before this Court. See No. 2018-1559,
`
`Regents of the University of Minnesota v. LSI Corp. A question this momentous
`
`warrants consideration by the full Court.
`
`STATEMENT
`
`IPRs are “party-directed, adversarial” proceedings before neutral judges with
`
`“many of the usual trappings of litigation” such as discovery, briefing, and oral
`
`hearing. SAS, 138 S.Ct. at 1354-55. The Board’s own rules define IPRs as “trials.”
`
`
`
`2
`
`Patent Owner Saint Regis Mohawk Tribe
`Ex. 2007, p. 11
`
`

`

`Case: 18-1638 Document: 137 Page: 12 Filed: 08/20/2018
`
`
`
`37 C.F.R. § 42.100(a). Private parties, not the Board, determine the issues
`
`adjudicated. Indeed, “inter partes” means “between parties.”
`
`Prior to this case, the PTAB had repeatedly followed FMC and Vas-Cath to
`
`conclude that IPRs are adjudications triggering sovereign immunity. The PTAB
`
`concluded that “the analysis in FMC applies to” IPRs,1 “the same factors that led the
`
`Vas-Cath court to analogize interference proceedings to district court proceedings
`
`also exist” regarding IPRs,2 and, “under FMC and Vas–Cath, inter partes reviews
`
`are similar to lawsuits.”3
`
`The PTAB had sound reasons for these conclusions:
`
`• IPRs “begin with the filing of a petition [by a private party] that
`
`identifies all of the claims challenged and the grounds and supporting
`
`evidence on a claim-by-claim basis.” Office Patent Trial Practice
`
`Guide, 77 Fed. Reg. 48,756, 48,757 (Aug. 14, 2012). The private-party
`
`petitioner controls the claims challenged and the grounds of the attacks.
`
`• The proceeding cannot start until the private-party petitioner serves the
`
`patent owner with the petition. 35 U.S.C. § 312(a)(5).
`
`
`1 Covidien LP v. Univ. of Fla. Research Found. Inc., 2017 WL 4015009, at
`*8 (PTAB Jan. 25, 2017).
`
`2 NeoChord, Inc. v. Univ. of Md., Balt., No. IPR2016-00208, Paper 28, at 7
`(PTAB May 23, 2017)
`
`3 Reactive Surfaces, Ltd. v. Toyota Motor Corp., 2017 WL 2992435, at *2
`(PTAB July 13, 2017).
`
`
`
`3
`
`Patent Owner Saint Regis Mohawk Tribe
`Ex. 2007, p. 12
`
`

`

`Case: 18-1638 Document: 137 Page: 13 Filed: 08/20/2018
`
`• The patent owner may respond to the petition with a motion or a
`
`preliminary response. 37 C.F.R. §§ 42.20-42.25.
`
`• The PTAB and Director are not parties to the proceeding. 37 C.F.R.
`
`§ 42.2. They lack authority to initiate a proceeding without a private
`
`party’s petition or to engage in investigations that would lead to the
`
`filing of a claim.
`
`• Once an IPR is initiated, neither the statute nor regulations provide any
`
`role for the PTAB or any federal officer to act as advocates in the
`
`proceedings, to add patent claims to an existing IPR, or to add prior art
`
`to that cited by the petition.
`
`• The private-party petitioner provides the evidence, 35 U.S.C.
`
`§ 312(a)(3)(B), and shoulders the burden of proof. Id. at § 316(e) .
`
`• The parties (i.e., the petitioner and patent owner) can seek discovery,
`
`which the PTAB can enforce through sanctions. 37 C.F.R. §§ 42.51-
`
`42.65. The PTAB and Director have no power to initiate discovery.
`
`• The Federal Rules of Evidence generally apply to IPRs. Id. at § 42.62.
`
`• The parties (but not the Board) may offer rebuttal evidence “which is
`
`responsive to the adversary’s evidence.” Belden Inc. v. Berk-Tek LLC,
`
`805 F.3d 1064, 1082 (Fed. Cir. 2015) (emphasis added).
`
`4
`
`
`
`
`
`Patent Owner Saint Regis Mohawk Tribe
`Ex. 2007, p. 13
`
`

`

`Case: 18-1638 Document: 137 Page: 14 Filed: 08/20/2018
`
`• If a patent owner withdraws from an IPR, the Board may issue an
`
`“adverse judgment” cancelling the patent owner’s claims. 37 C.F.R.
`
`§ 42.73(b)(4). The judgment is limited to the grounds raised by
`
`petitioner.
`
`• The parties may settle the IPR, but “the Board is not a party to the
`
`settlement,” id. at § 42.74(a), and the Board lacks authority to settle an
`
`IPR if the petitioner wishes to proceed.
`
`• The parties have the right to an oral hearing. 35 U.S.C. § 316(a)(10).
`
`• The three PTAB “judges” issue a final written decision known as a
`
`“judgment.” 77 Fed. Reg. at 48,766-67.
`
`• The Board must decide the case based on the “arguments that were
`
`advanced by a party.” In re Magnum Oil Tools Int’l, Ltd., 829 F.3d
`
`1364, 1380-81 (Fed. Cir. 2016).
`
`• The loser of the IPR may be subject to estoppel. 37 C.F.R.
`
`§ 42.73(d)(3). The Board, which is not a party, is not estopped.
`
`5
`
`
`
`
`
`Patent Owner Saint Regis Mohawk Tribe
`Ex. 2007, p. 14
`
`

`

`Case: 18-1638 Document: 137 Page: 15 Filed: 08/20/2018
`
`
`
`• The PTAB has continued to borrow judicial practices for IPR trials,
`
`including recently revised procedures for expert testimony, word
`
`counts, motion practice, and other matters.4
`
`The panel nevertheless rejected the Tribe’s assertion of immunity. It cited
`
`“several factors” suggesting that an “IPR is more like an agency enforcement action
`
`than a civil suit brought by a private party” (Add.8): (1) the Director has discretion
`
`in deciding whether to institute an IPR (id.); (2) the Board may “continue review
`
`even if the petitioner chooses not to participate” and intervene in appeals (id. at 9);
`
`(3) “procedures in IPR do not mirror the Federal Rules of Civil Procedure” (id.); and
`
`(4) “[t]he mere existence of more inquisitorial proceedings in which immunity does
`
`not apply does not mean that immunity applies in a different type of proceeding
`
`before the same agency.” Id. at 11.
`
`Judge Dyk wrote separately to set forth his view that “the history of inter
`
`partes review … confirms that those proceedings are not adjudications between
`
`private parties.” Id. at 13.
`
`
`4 See USPTO, Trial Practice Guide Update, at 4, 6, 16 (Aug. 2018), available
`at https://www.uspto.gov/patents-application-process/patent-trial-and-appeal-
`board/ptab-trial-practice-guide-august-2018.
`
`
`
`6
`
`Patent Owner Saint Regis Mohawk Tribe
`Ex. 2007, p. 15
`
`

`

`Case: 18-1638 Document: 137 Page: 16 Filed: 08/20/2018
`
`
`
`ARGUMENT
`
`I.
`
`This Case Presents Issues Of Exceptional Importance Warranting
`En Banc Review.
`
`The panel’s decision effectively abrogated all sovereign immunity in IPRs.
`
`Although the panel stated that its decision was limited to the assertion of tribal
`
`immunity (Add.12), the panel’s holding turns entirely on the inherent attributes of
`
`the IPR proceeding itself. Those attributes are the same for all IPRs, and thus the
`
`panel’s decision effectively bars States and even federal agencies, such as NASA,
`
`HHS, the U.S. Army, and the U.S. Navy, which are some of nation’s most prolific
`
`patent filers,5 from asserting sovereign immunity in IPRs brought against them as
`
`patent owners.
`
`An appeal raising state immunity is already before this Court. See No. 2018-
`
`1559, Regents of the University of Minnesota v. LSI Corp. The pendency of cases
`
`presenting closely related sovereign immunity questions warrants en banc review.
`
`II. The Panel Decision Is Contrary To Precedent Of The Supreme
`Court And This Court.
`
`A. The Panel Failed To Follow FMC, SAS, Alden, And Vas-Cath.
`
`Although the panel articulated four factors to justify its departure from the
`
`Supreme Court’s decision in FMC, none withstands scrutiny. The panel did not cite,
`
`
`5
`in 2017,”
`“Top 300 Organizations Granted U.S. Patents
`http://www.ipo.org/wp-content/uploads/2018/06/2017_Top-300-Patent-
`Owners.pdf.
`
`
`
`7
`
`Patent Owner Saint Regis Mohawk Tribe
`Ex. 2007, p. 16
`
`

`

`Case: 18-1638 Document: 137 Page: 17 Filed: 08/20/2018
`
`
`
`let alone attempt to distinguish, this Court’s determination in Vas-Cath that patent
`
`interference proceedings between private parties trigger sovereign immunity. The
`
`panel’s reasoning conflicts not only with FMC and Vas-Cath, but also with the
`
`Supreme Court’s decisions in SAS and Alden.
`
`1.
`
`The Director’s Role In Deciding Whether To Institute
`An IPR Does Not Eliminate Sovereign Immunity.
`
`
`The panel found that the Director’s role in deciding whether to institute an
`
`IPR means that “a politically accountable, federal official has authorized the
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`institution of that proceeding.” Add.8 (citing Alden v. Maine, 527 U.S. 706, 756
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`(1999)).
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`But the Supreme Court in SAS rejected a similar argument about the
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`significance of the Director’s role in instituting an IPR. The Court ruled the
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`Director’s role does not transform an IPR into an “agency-led, inquisitorial process”;
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`instead, it remains a “party-directed adversarial process” that “mimics civil
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`litigation.” 138 S.Ct. at 1352, 1355. The Court observed that the Director may not
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`“start proceedings on his own initiative” or “initiate whatever kind of inter partes
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`review he might choose.” Id. at 1355. That distinction is critical and distinguishes
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`IPRs from typical agency proceedings, where the agency (as prosecutor) has
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`discretion over the scope and nature of the proceedings. With respect to IPRs, “the
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`petitioner’s petition, not the Director’s discretion, is supposed to guide the life of the
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`litigation,” and in multiple ways, “the statute tells us that the petitioner’s contentions,
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`not the Director’s discretion, define the scope of the litigation all the way from
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`institution through to conclusion.” 138 S.Ct. at 1356-57. This reasoning in SAS was
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`not dicta; the significance of the Director’s role in instituting an IPR was integral to
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`the question whether the PTAB was required to address, in its final written decision,
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`every claim challenged in an IPR.
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`Notably, the Government made the same arguments in SAS as the panel
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`decision here, and the Supreme Court flatly rejected them. See No. 16-989, Brief of
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`Federal Respondent, at 12 (arguing that Director’s “broad discretion in determining
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`whether to institute” an IPR supported Government’s position); id. at 14 (Director’s
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`“broad discretion” demonstrates “the USPTO may institute review as to fewer than
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`all of the claims of which review is sought”); id. at 38 (arguing that IPR review
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`“differs from district-court litigation” and is “a mechanism for the agency to revisit
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`its own prior determination”).
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`The panel’s decision also conflicts with Alden v. Maine (cited by the panel at
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`Add.8), where the Supreme Court explained that “[s]uits brought by the United
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`States itself require the exercise of political responsibility for each suit prosecuted
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`against a State, a control which is absent from a broad delegation to private persons
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`to sue nonconsenting States.” 527 U.S. at 756. The Supreme Court stressed that a
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`suit brought in the name of the United States “is commenced and prosecuted . . . by
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`9
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`those who are entrusted with the constitutional duty to ‘take Care that the Laws be
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`faithfully executed.’” Id. at 755.
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`IPRs do not involve the kind of political accountability discussed in Alden.
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`The Attorney General decides whether, how, when, and where to sue a sovereign
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`State and also determines the claims that are brought (or not brought) and controls
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`the subsequent litigation. In contrast, IPRs are brought in the name (and for the
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`benefit) of a private-party petitioner, not the government. Private parties draft IPR
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`petitions and litigate the proceedings; the Director has no role in how IPRs are
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`prosecuted. Moreover, the Director has delegated to the PTAB responsibility to
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`make institution decisions, SAS, 138 S.Ct. at 1353, and thus plays no role (and
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`exercises no political accountability) in deciding which cases to institute. In short,
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`the Director’s attenuated role in IPRs is far removed from the Attorney General’s
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`responsibility in Alden.
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`The panel’s reasoning is also inconsistent with FMC, where the FMC
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`controlled the conduct of proceedings before administrative adjudication actually
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`occurred. After a complaint was filed, the FMC had the power to specify a
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`“reasonable time” for its satisfaction, to decide whether it had been satisfied, and to
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`decide the “appropriate manner” to investigate it. 46 U.S.C.App. § 1710(b) (2001).
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`Despite the control vested in the FMC, the Supreme Court held that sovereign
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`immunity applied.
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`Moreover, in FMC the Court rejected the Government’s argument that
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`sovereign immunity should not apply because the politically accountable Attorney
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`General would ultimately be responsible for enforcement of any Commission
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`decision, as the FMC lacks the authority to enforce its own orders. 535 U.S. at 761-
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`62. Instead, the Court held that a subsequent enforcement action by the Attorney
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`General does not “retroactively convert an [administrative] adjudication initiated
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`and pursued by a private party into one initiated and pursued by the Federal
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`Government.” Id. at 764. By the same token, IPRs are initiated and pursued by
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`private parties, and therefore remain adversarial adjudications between private
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`parties, regardless of the PTAB’s role in instituting them.
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`The panel’s reasoning also provides no basis for distinguishing Vas-Cath,
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`which involves interference proceedings. As with IPRs, “the Director has discretion
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`whether or not to declare an interference.” Eli Lilly and Co. v. Board of Regents of
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`the University of Washington, 334 F.3d 1264, 1272 (Fed. Cir. 2003) (Lourie, J.,
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`dissenting) (citing 35 U.S.C. § 135 (containing the provisos “in the opinion of the
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`Director” and “an interference may be declared”)) (emphasis added). An examiner
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`may reject a suggestion of interference if the criteria specified in 37 C.F.R.
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`§ 41.202(a)(1)-(6) are not met. Manual of Patent Examination Procedure Rule
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`2304.02(c) explains that an examiner may reject a claim suggested for an
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`interference under 35 U.S.C. §§ 102(a), 102(e), or 135(b). The panel thus failed to
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`distinguish either FMC or Vas-Cath.
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`In fact, the panel’s reasoning is backwards. Contrary to Judge Dyk’s
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`concurrence, the history of IPRs shows that Congress gave the Director discretion
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`to institute privately-filed IPRs precisely because they mimic private litigation. The
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`Committee Report accompanying the American Invents Act explained that the
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`legislation was intended to “convert[] inter partes reexamination from an
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`examinational to an adjudicative proceeding.” H.R. Rep. No. 112-98, at 46 (2011)
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`(emphasis added). The report recognized the dangers posed by IPRs “as tools for
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`harassment or a means to prevent market entry through repeated litigation and
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`administrative attacks on the validity of a patent.” Id. at 48. Accordingly, the Report
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`instructed the Director to use his authority “to address potential abuses.” Id. The
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`statutory safeguard of the Director’s discretion not to institute IPRs reflects a
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`congressional understanding that they are not agency actions.
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`The panel’s decision is also inconsistent with the Board’s own rules, which
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`provide that the Board may adjudicate the “preliminary proceeding” of an IPR,
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`which “begins with the filing of a petition,” even prior to any decision to institute
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`review. 37 C.F.R. § 42.2. For example, even before institution, the Board can order
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`discovery, sanction parties, conduct oral hearings, and authorize and decide motions.
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`E.g., RPX Corp. v. Applications in Internet Time, LLC, IPR2015-01750, Paper 11
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`12
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`(PTAB Oct. 20, 2015) (granting a deposition before institution); id., Paper 23 (PTAB
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`Dec. 4, 2015) (authorizing a protective order before institution); id., Paper 58 (PTAB
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`May 6, 2016) (ordering sanctions before institution).
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`2.
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`The PTAB’s Ability To Issue A Decision Absent The
`Petitioner And To Intervene On Appeal Does Not
`Eliminate Sovereign Immunity.
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`As a further reason for departing from FMC, the panel pointed to the PTAB’s
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`ability to issue a decision under 35 U.S.C. § 317(a) if the petitioner withdraws.
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`Add.9. But that feature of IPRs cuts in favor of applying sovereign immunity under
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`FMC, not against it. The feature reflects the absence of a case-or-controversy
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`requirement in administrative tribunals, which FMC described as an even “greater
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`insult” to a sovereign’s interests. 535 U.S. at 760 n.11.
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`Moreover, the statute makes clear that the PTAB’s authority to issue a
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`decision is limited to exceptional circumstances: an IPR “shall be terminated with
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`respect to any petitioner upon the joint request of t