Case 2:15-cv-01455-WCB Document 518 Filed 10/13/17 Page 1 of 27 PageID #: 25954
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`IN THE UNITED STATES DISTRICT COURT
`FOR THE EASTERN DISTRICT OF TEXAS
`MARSHALL DIVISION
`
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`ALLERGAN, INC.,
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` Plaintiff,
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`v.
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`TEVA PHARMACEUTICALS USA, INC., et
`al.,
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` Defendants.
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`
` Civil Action No. 2:15-cv-1455 WCB LEAD
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` FILED UNDER SEAL
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`PLAINTIFF’S MEMORANDUM IN SUPPORT OF ITS MOTION TO JOIN THE TRIBE
`AS A PARTY PURSUANT TO FEDERAL RULE OF CIVIL PROCEDURE 25(c) AND
`RESPONSE TO COURT’S OCTOBER 6, 2017 ORDER (DKT. 503)
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`Case 2:15-cv-01455-WCB Document 518 Filed 10/13/17 Page 2 of 27 PageID #: 25955
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`TABLE OF CONTENTS
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`Page
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`I.
`
`INTRODUCTION .................................................................................................1
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`II.
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`FACTUAL BACKGROUND ................................................................................2
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`III.
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`ARGUMENT .........................................................................................................5
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`A.
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`B.
`
`C.
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`The Tribe Is the Owner of the Patents-in-Suit ...........................................5
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`It Is Proper to Join the Tribe as a Plaintiff Under Fed. R. Civ. P.
`25(c) ...........................................................................................................6
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`The Transaction Between Allergan and The Tribe Was Not a
`Sham ..........................................................................................................9
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`1.
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`2.
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`3.
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`The Transfer of the Patents-in-Suit Provides Significant
`and Much-Needed Benefit to the Tribe .........................................9
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`The Assignment Was Supported by Good and Valuable
`Consideration ...............................................................................11
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`There Is No Support for Defendants’ Assertion that the
`Transaction Between Allergan and the Tribe Was a
`Sham ............................................................................................13
`
`a.
`
`b.
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`c.
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`The Tribe’s Assertion of Sovereign Immunity in
`the PTAB Does Not Make This a Sham
`Transaction .......................................................................13
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`Tribal Lending Cases Are Inapplicable and Do
`Not Establish that the Transaction Was a Sham ..............16
`
`The Assignment Is Not a Collusive Assignment
`Under 28 U.S.C. § 1359 ...................................................18
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`IV.
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`CONCLUSION ....................................................................................................20
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`i
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`Case 2:15-cv-01455-WCB Document 518 Filed 10/13/17 Page 3 of 27 PageID #: 25956
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`TABLE OF AUTHORITIES
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`Page(s)
`
`Cases
`
`A123 Sys., Inc. v. Hydro-Quebec,
`626 F.3d 1213 (Fed. Cir. 2010)..............................................................................................5, 6
`
`Affinion Loyalty Grp., Inc. v. Maritz, Inc.,
`2006 WL 1431065 (D. Del. May 22, 2006) ...............................................................................7
`
`Airlines Reporting Co. v. S and N Travel,
`58 F.3d 857 (2d Cir. 1995).......................................................................................................19
`
`Amoco Rocmount Co. v. Anschutz Corp.,
`7 F.3d 909 (10th Cir. 1993) .....................................................................................................19
`
`Attorneys Tr. v. Videotape Computer Prods., Inc.,
`93 F.3d 593 (9th Cir. 1996) .....................................................................................................20
`
`Bank of Bermuda, Ltd. v. Rosenbloom,
`76 Civ. 1830 (GLG), 1976 U.S. Dist. LEXIS 11648 (S.D.N.Y. Dec. 28, 1976) .....................12
`
`Betar v. De Havilland Aircraft of Canada, Ltd.,
`603 F.2d 30 (7th Cir. 1979) .....................................................................................................19
`
`United States ex rel. Cain v. Salish Kootenai Coll., Inc.,
`862 F.3d 939 (9th Cir. 2017) ...................................................................................................17
`
`El Paso Healthcare Sys. v. Molina Healthcare of New Mexico, Inc.,
`683 F. Supp. 2d 454 (W.D. Tex. 2010)....................................................................................13
`
`Finn v. Great Plains Lending, LLC,
`689 F. App’x 608 (10th Cir. 2017) ..........................................................................................17
`
`Gen. Battery Corp. v. Globe-Union, Inc.,
`100 F.R.D. 258 (D. Del. 1982) ..........................................................................................7, 8, 9
`
`Hyatt Chalet Motels, Inc. v. Salem Bldg. & Constr. Trades Council,
`298 F. Supp. 699 (D. Or. 1968) .................................................................................................8
`
`Inline Connection Corp. v. Verizon Internet Servs., Inc.,
`2016 WL 5532598 (D. Del. Sept. 28, 2016) ..............................................................................7
`
`Intellectual Prop. Dev., Inc. v. TCI Cablevision of Cal., Inc.,
`248 F.3d 1333 (Fed. Cir. 2001)..................................................................................................6
`
`Keller v. Bass Pro Shops, Inc.,
`15 F.3d 122 (8th Cir. 1994) ............................................................................................... 12-13
`
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`ii
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`Case 2:15-cv-01455-WCB Document 518 Filed 10/13/17 Page 4 of 27 PageID #: 25957
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`TABLE OF AUTHORITIES (cont’d)
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`Page(s)
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`Kinley Corp. v. Ancira,
`859 F. Supp. 652 (W.D.N.Y. 1994) .........................................................................................11
`
`Kramer v. Caribbean Mills, Inc.,
`394 U.S. 823 (1969) .................................................................................................................19
`
`Luxliner P.L. Exp., Co. v. RDI/Luxliner, Inc.,
`13 F.3d 69 (3d Cir. 1993).......................................................................................................7, 8
`
`Mars, Inc. v. JCM Am. Corp.,
`2007 WL 776786 (D.N.J. Mar. 9, 2007) ....................................................................................8
`
`Maysonet-Robles v. Cabrero,
`323 F.3d 43 (1st Cir. 2003) ......................................................................................................15
`
`McSparran v. Weist,
`402 F.2d 867 (3d Cir. 1968)............................................................................................... 19-20
`
`Memorylink Corp. v. Motorola Sols., Inc., Motorola Mobility, Inc.,
`773 F.3d 1266 (Fed. Cir. 2014)................................................................................................12
`
`Michigan v. Bay Mills Indian Community
`134 S. Ct. 202 (2014) .........................................................................................................10, 18
`
`Mitutoyo Corp. v. Central Purchasing, LLC,
`499 F.3d 1284 (Fed. Cir. 2007)..................................................................................................9
`
`Oil States Energy Servs. LLC v. Greene’s Energy Grp., LLC,
`639 F. App’x 639 (Fed. Cir. 2016), cert. granted, 198 L. Ed. 2d 677 (U.S. Jun.
`12, 2017) ..................................................................................................................................14
`
`People ex rel. Owen v. Miami Nation Enterprises,
`2 Cal. 5th 222, 236 (2016) .................................................................................................17, 18
`
`Paleteria La Michoacana, Inc. v. Productos Lacteos Tocumbo S.A. De C.V.,
`247 F.Supp.3d 76 (D.D.C. 2017) ...............................................................................................7
`
`Pharmachemie B.V. v. Pharmacia S.p.A.,
`934 F. Supp. 484 (D. Mass. 1996) ...........................................................................................15
`
`Prima Tek II, L.L.C. v. A–Roo Co.,
`222 F.3d 1372 (Fed. Cir. 2000)..................................................................................................5
`
`Roth v. Isomed, Inc.,
`746 F. Supp. 316 (S.D.N.Y. 1990) .................................................................................... 11-12
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`iii
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`Case 2:15-cv-01455-WCB Document 518 Filed 10/13/17 Page 5 of 27 PageID #: 25958
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`TABLE OF AUTHORITIES (cont’d)
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`Page(s)
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`Secured Worldwide LLC v. Kinney,
`No. 15 CIV. 1761 (CM), 2015 WL 1514738 (S.D.N.Y. Apr. 1, 2015) ...................................12
`
`Toste Farm Corp. v. Hadbury, Inc.,
`70 F.3d 640 (1st Cir. 1995) ......................................................................................................19
`
`United States v. Tucker,
`2017 WL 2470836 (S.D.N.Y. June 6, 2017) .....................................................................16, 17
`
`W.L. Gore & Assocs., Inc. v. C.R. Bard, Inc.,
`198 F. Supp. 3d 366 (D. Del. 2016) .........................................................................................13
`
`Yokeno v. Mafnas,
`973 F.2d 803 (9th Cir. 1992) ...................................................................................................19
`
`Statutes
`
`28 U.S.C. § 1359 ................................................................................................................18, 19, 20
`
`Other Authorities
`
`Federal Rule of Civil Procedure 25(c) ................................................................................... passim
`
`Moore’s Federal Practice (Matthew Bender 3d ed. 1997) (2007) ...............................................8, 9
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`iv
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`Case 2:15-cv-01455-WCB Document 518 Filed 10/13/17 Page 6 of 27 PageID #: 25959
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`I.
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`INTRODUCTION
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`Allergan moves under Federal Rule of Civil Procedure 25(c) to join patent owner, Saint
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`Regis Mohawk Tribe (“the Tribe”), as a party to this case. Allergan
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`
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` in U.S.
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`Patent Nos. 8,629,111, 8,648,048, 8,685,930, and 9,248,191 (the “patents-in-suit”) to the Tribe
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`on September 8, 2017. (Dkt. 508, Ex. B at § 1.) As of that time, the Tribe became the owner of
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`the patents-in-suit and Allergan became an exclusive licensee, with Allergan no longer holding
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`all of the rights in the patents-in-suit. (Dkt. 508, Ex. C at §§ 2.1, 2.4.) Joining the Tribe will not
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`disrupt this case or otherwise impact the substantive issues the Court is currently deciding.
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`Allergan retains an exclusive field-of-use license to practice the patents-in-suit in the United
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`States for all FDA-approved uses of products under the Restasis® NDAs and thus remains a
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`proper party. (Id.) Because joinder will facilitate the conduct of this litigation without undue
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`disruption, Allergan respectfully requests that the Court grant its motion and join the Tribe under
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`Rule 25(c).
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`Defendants, without evidence or legal support, have repeatedly asserted that the
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`transaction between Allergan and the Tribe was a “sham,” and appear to oppose Allergan’s
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`motion on that basis. But, as detailed below and in Allergan’s October 10 filing, the transfer of
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`the patents-in-suit was a legitimate arm’s-length transaction between Allergan and the Tribe,
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`supported by good and valuable consideration. And, as the Tribe set forth in its briefing to the
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`PTAB, the transaction serves the legitimate economic interests of the Tribe, and will help to
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`fulfill its obligations to its members to provide basic services and support.
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`While Defendants may not like the outcome of the transaction with respect to the
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`proceedings in the PTAB, that does not render the transaction between the parties a sham. The
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`Tribe is now the legitimate owner of the patents-in-suit and therefore eligible to be joined as a
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`1
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`Case 2:15-cv-01455-WCB Document 518 Filed 10/13/17 Page 7 of 27 PageID #: 25960
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`co-Plaintiff in this case. Allergan respectfully requests that the Tribe be joined to this litigation
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`as a party.
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`II.
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`FACTUAL BACKGROUND
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`When Allergan filed this case, it owned the patents-in-suit. (Dkt. 1 at ¶¶ 74, 79, 84, 89,
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`94; Dkt. 96 at ¶ 96.) On September 8, 2017, Allergan assigned the patents-in-suit to the Tribe.
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`(Dkt. 508, Ex. B.) The assignment agreement lays out the transfer of rights in explicit terms,
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`stating that “for good and valuable consideration, the receipt and sufficiency of which is hereby
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`acknowledged,” Allergan, as the Assignor,
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` (Dkt. 508, Ex. B at § 1.) Under the assignment
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`agreement, the Tribe promised that it “will not waive its or any other Tribal Party’s sovereign
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`immunity in relation to any inter partes review or any other proceeding in the United States
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`Patent & Trademark Office or any administrative proceeding that may be filed for the purpose of
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`invalidating or rendering unenforceable any Assigned Patents.” (Id. at § 12(i).)
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`The Tribe also granted a license back to Allergan for the patents-in-suit. The license
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`agreement provides Allergan with an exclusive field-of-use license
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` (Dkt. 508, Ex. C at § 2.1.)
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`. (Id. at § 1.33.) The
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`Tribe retained the rights to practice the patents in all other fields of use,
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` (Id. at § 2.4.) The Tribe also retained the right to
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`2
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`Case 2:15-cv-01455-WCB Document 518 Filed 10/13/17 Page 8 of 27 PageID #: 25961
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`id. at §§ 1.10, 1.33, 2.1.)
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`. (Id.)
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` (Id. at § 5.2.2.)
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`. (Id. at § 5.2.3
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`. (See
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`. (Id.
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`at § 5.2.5.)
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`. (Id. at § 5.2.4.)
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`Additionally, the Tribe receives quarterly royalties from Allergan of $3,750,000 for its
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`field-of-use license until the Licensed Patents expire or are rendered invalid by a non-appealable
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`final judgment. (Id. at §§ 4.2, 9.1.1.)
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` (Id. at § 10.3.)
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` (Id. at § 5.1.3.)
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`On the same day that Allergan and the Tribe entered into the assignment and license
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`agreements, they recorded the assignment with the PTO. (Dkt. 510, Ex. E.) The Tribe informed
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`the PTAB, as required in the agreements (Dkt. 508, Ex. B at § 12(i); Dkt. 508, Ex. C at § 5.3),
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`3
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`Case 2:15-cv-01455-WCB Document 518 Filed 10/13/17 Page 9 of 27 PageID #: 25962
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`that it intended to invoke its tribal sovereign immunity to seek dismissal of the pending inter
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`partes review proceedings. After the PTAB delayed the hearing to address the issue of sovereign
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`immunity, the Tribe filed a formal motion to dismiss the IPR proceedings based on its immunity.
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`(Dkt. 510, Ex. L.) That motion remains pending before the PTAB.
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`As more fully discussed below in Section III.C.1, Allergan’s assignment of the patents-
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`in-suit to the Tribe was in furtherance of the Tribe’s economic development and diversification
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`and to allow the Tribe to raise much-needed revenue to provide for its members. As set forth in
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`the Tribe’s motion before the PTAB, the Tribe has over 15,600 tribal members, 8,000 of whom
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`live on the Tribal reservation in rural upstate New York. (Dkt. 510, Ex. L at 2.) As the Tribe is
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`the sovereign government for its members, it is responsible for performing and providing many
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`government functions, including education, law enforcement, infrastructure, housing services,
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`social services, and health care. (See Ex. 1 (https://www.srmt-nsn.gov/about-the-tribe).) While
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`the Tribe has the responsibilities of a sovereign, its ability to raise revenues through taxes is
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`much more limited than other sovereign entities. As a result, “[m]ost Indian reservations are
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`plagued with disproportionately high levels of unemployment and poverty, not to mention a
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`severe lack of employment opportunities.” (Ex. 2 at 1; Ex. 3 (Oct. 12, 2017 Ltr. from Saint
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`Regis Mohawk Tribe to Grassley and Feinstein).) As more fully discussed below, in an effort to
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`diversify the ways in which it raises income, the Tribe formed the Tribe’s Office of Technology,
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`Research and Patents (“OTRAP”). (See Ex. 4 (https://www.srmt-
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`nsn.gov/ uploads/site files/OTRAP-Website-Blurb.pdf).) Among other things, the purpose of
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`OTRAP is to “contribute to the strengthening of the Tribal economy by encouraging the
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`development of emerging science and technology initiatives and projects and promoting the
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`4
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`Case 2:15-cv-01455-WCB Document 518 Filed 10/13/17 Page 10 of 27 PageID #: 25963
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`modernization of Tribal and other businesses.” (Id. at 1.) Assignment and expolitation of
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`patents is one of the methods that the OTRAP will use to serve these purposes.
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`III. ARGUMENT
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`A.
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`The Tribe Is the Owner of the Patents-in-Suit
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`Under the assignment and license agreements, the Tribe is the legitimate owner of the
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`patents-in-suit. The Tribe has therefore become a proper party to this case and should be added.
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`See Prima Tek II, L.L.C. v. A–Roo Co., 222 F.3d 1372, 1377 (Fed. Cir. 2000). Moreover, to the
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`extent that Defendants allege, without proof or explanation, that the transactions between
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`Allergan and the Tribe were a “sham,” the legitimate transfer of ownership and rights rebuts that
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`allegation.
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`The assignment agreement transferred full ownership of all patents-in-suit to the Tribe.
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`(Dkt. 508, Ex. B at § 1.) In the license agreement, the Tribe granted certain rights to Allergan,
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`particularly an
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`. (Dkt. 508, Ex. C. at §§ 2.1, 5.2.2.) But the Tribe retained all rights in the patents
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`outside that specific field,
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`. (Id. at §§ 2.4, 5.2.3.)
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`Under the case law, the Tribe is the proper owner of the patents because Allergan does
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`not have “all substantial rights” under its license. For example, in A123 Sys., Inc. v. Hydro-
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`Quebec, 626 F.3d 1213, 1217-18 (Fed. Cir. 2010), the Federal Circuit explained that an exclusive
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`field-of-use licensee does not have all substantial rights in a patent. In that case, HQ had an
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`“exclusive license to make, use and sell a significant portion of the field of technology described
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`5
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`Case 2:15-cv-01455-WCB Document 518 Filed 10/13/17 Page 11 of 27 PageID #: 25964
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`and claimed” in the patents in suit, including an “exclusive, worldwide license to manufacture
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`LiFePO4 and sell LiFePO4 in bulk quantities for all applications of the technology,” and those
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`rights were exclusive even against the licensor. Id. at 1218. The Federal Circuit found that
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`“[t]hese statements unmistakably identify HQ's license as less than a complete grant of rights
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`under the patents, even if an exclusive grant of certain rights. HQ states that it received an
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`exclusive license to a significant portion of the field of technology, not all fields of technology
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`described and claimed in the patents.” Id. (emphasis in original). Similarly, while Allergan
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`received significant, exclusive rights under the patents-in-suit
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`, the Tribe retains all rights
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`outside that grant, including, among other things, the right to practice the inventions in other
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`fields,
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`, and the right to
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`quarterly royalty payments. (See supra Section II.)
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`B.
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`It Is Proper to Join the Tribe as a Plaintiff Under Fed. R. Civ. P. 25(c)
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`Because the Tribe is the now the owner of the patents-in-suit, the Federal Rules permit
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`them to be joined as a party in this case.1 And because the Tribe now owns the patents-in-suit,
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`joinder will ensure that the Tribe’s interests are represented. Because Allergan, as an exclusive
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`licensee, remains a proper party to the case and the joinder will not otherwise impact the
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`substantive issues in the litigation, Defendants will suffer no prejudice as a result of the joinder.
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`Generally, a “patent owner should be joined, either voluntarily or involuntarily, in any
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`patent infringement suit brought by an exclusive licensee having fewer than all substantial patent
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`rights.” Intellectual Prop. Dev., Inc. v. TCI Cablevision of Cal., Inc., 248 F.3d 1333, 1347 (Fed.
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`Cir. 2001). Rule 25(c) provides that “[i]f an interest is transferred, the action may be continued
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`1 Allergan has consulted with counsel for the Tribe, and the Tribe consents to joinder in this case
`in accordance with Allergan’s motion.
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`6
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`Case 2:15-cv-01455-WCB Document 518 Filed 10/13/17 Page 12 of 27 PageID #: 25965
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`by or against the original party, unless the court, on motion, orders the transferee to be
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`substituted in the action or joined with the original party.” Fed. R. Civ. P. 25(c); Affinion Loyalty
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`Grp., Inc. v. Maritz, Inc., 2006 WL 1431065, at n.3 (D. Del. May 22, 2006); see also Gen.
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`Battery Corp. v. Globe-Union, Inc., 100 F.R.D. 258, 261 (D. Del. 1982). “Rather than require
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`the assignee to initiate a new action, the rule enables the court to continue the action with the
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`assignee joined with or in the place of the original party.” Gen. Battery, 100 F.R.D. at 262-63.
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`Rule 25(c) allows for the orderly continuation of pending cases when rights are
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`transferred. Id. Indeed, the “joinder or substitution under Rule 25(c) does not ordinarily alter the
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`substantive rights of parties but is merely a procedural device designed to facilitate the conduct
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`of a case.” Inline Connection Corp. v. Verizon Internet Servs., Inc., 2016 WL 5532598, at *3 (D.
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`Del. Sept. 28, 2016) (quoting Luxliner P.L. Exp., Co. v. RDI/Luxliner, Inc., 13 F.3d 69, 71 (3d
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`Cir. 1993)). And here, under the terms of the license agreement, joinder of the Tribe will alter no
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`substantive rights because the Tribe has agreed not to assert sovereign immunity and has agreed
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`to cooperate in the conduct of the litigation. (Dkt. 508, Ex. C at § 5.2.2.)
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`Courts have expressly recognized that Rule 25(c) may be invoked at any time during the
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`pendency of an action because there is no time limit on a party seeking substitution or joinder.
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`Paleteria La Michoacana, Inc. v. Productos Lacteos Tocumbo S.A. De C.V., 247 F.Supp.3d 76,
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`87 (D.D.C. 2017); see also Inline Connection Corp., 2016 WL 5532598, at *4. As such, a Rule
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`25(c) motion may be granted at any time, even when patents are assigned after trial. See Inline
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`Connection Corp., 2016 WL 5532598, at *4 (joining successor in interest to patents-in-suit after
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`trial under Rule 25(c)).
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`While granting a motion under Rule 25(c) is discretionary, where an interest in the
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`patents-in-suit has been transferred, a motion to join should be granted when the “transferee’s
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`7
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`Case 2:15-cv-01455-WCB Document 518 Filed 10/13/17 Page 13 of 27 PageID #: 25966
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`presence would facilitate the conduct of the litigation.” Luxliner P.L. Exp., 3 F.3d at 72; see also
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`Mars, Inc. v. JCM Am. Corp., 2007 WL 776786, *1 (D.N.J. Mar. 9, 2007) (“Since joinder or
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`substitution under Rule 25(c) is a procedural device that does not typically alter the substantive
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`rights of a party, a Rule 25(c) decision is generally left to the court’s discretion.”). That is the
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`case here.
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`The Tribe owns the right, title and interest in the patents-in-suit,
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`. (Dkt. 508, Ex. C at §§ 5.2.2, 5.2.3.) Joining the Tribe will
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`adjudicate the rights and obligations of the Tribe, not just Allergan. See Gen. Battery, 100
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`F.R.D. at 263. Moreover, it will facilitate the management of the remainder of the litigation, and
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`will ensure that the Tribe is bound to the outcome and can participate in the remainder of the
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`litigation, including any appeals. Indeed, under the license between Allergan and the Tribe,
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`, all
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`of which will be easier to do if the Tribe is a party in this case and in any appeal and is able to
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`see all materials, even those filed under seal. (Dkt. 508, Ex. C at § 5.2.4.)
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` (Id.)
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`There is also no persuasive reason not to join the Tribe. Joinder should be denied only
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`where there is “good reason for not allowing the suit to proceed in the name of the original party
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`and the real party in interest.” Hyatt Chalet Motels, Inc. v. Salem Bldg. & Constr. Trades
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`Council, 298 F. Supp. 699, 704 (D. Or. 1968); see also Moore’s Federal Practice, § 25.34
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`(Matthew Bender 3d ed. 1997) (2007). Neither reason applies here.
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`For the reasons described below, the transaction between Allergan and the Tribe was not
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`a “sham,” as best that term can be understood without explanation from Defendants. And
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`8
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`Case 2:15-cv-01455-WCB Document 518 Filed 10/13/17 Page 14 of 27 PageID #: 25967
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`because the Tribe granted an exclusive license back to Allergan in the field-of-use covering
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`Restasis®, Allergan retains standing and remains in this litigation as a proper co-plaintiff and co-
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`counter-defendant. See Mitutoyo Corp. v. Central Purchasing, LLC, 499 F.3d 1284, 1291 (Fed.
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`Cir. 2007) (“In order for a licensee to have co-plaintiff standing, it must hold at least some of the
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`proprietary rights under the patent.”); see also Moore’s Federal Practice, § 25.34 n.10 (Matthew
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`Bender 3d ed. 1997) (2007). Allergan will thus properly remain as a co-plaintiff, and there will
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`be no substantive effect on the litigation. Thus, the Defendants will not be prejudiced by the
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`joinder of the Tribe. See Gen. Battery, 100 F.R.D. at 263 (stating that because the “allegations in
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`the counterclaim and the relief sought are identical,” and the assignee is placed in the “identical
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`position” of the original party, the opposing party “will not be prejudiced in any way by the
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`joinder”).
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`C.
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`The Transaction Between Allergan and The Tribe Was Not a Sham
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`1.
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`The Transfer of the Patents-in-Suit Provides Significant and Much-
`Needed Benefit to the Tribe
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`As the Tribe has stated in its Motion to Dismiss before the PTAB, it is a sovereign entity
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`that provides essential government functions to its over 15,600 members, such as education, law
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`enforcement, infrastructure, housing services, social services, and health care. (See Dkt. 510, Ex.
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`L at 2; see also Ex. 1 (https://www.srmt-nsn.gov/about-the-tribe).) The transaction with
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`Allergan gives the Tribe resources that will directly and significantly impact the lives of its
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`members by providing not only for basic needs, but for a platform that will promote continued
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`and expanded education of the Mohawk people. (Dkt. 510, Ex. L at 5-6.)
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`As discussed in the Tribe’s Motion to Dismiss before the PTAB, the Tribe’s ability to
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`raise revenues through taxes is much more limited than other sovereign entities. The National
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`Congress of American Indians has elaborated on this inability and the significant negative
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`consequences to Native American communities:
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`In general, tribal governments lack parity with states, local governments, and the
`federal government in exercising taxing authority. For example, tribes are unable
`to levy property taxes because of the trust status of their land, and they generally
`do not levy income taxes on tribal members. Most Indian reservations are plagued
`with disproportionately high levels of unemployment and poverty, not to mention
`a severe lack of employment opportunities. As a result, tribes are unable to
`establish a strong tax base structured around the property taxes and income taxes
`typically found at the local state government level. To the degree that they are able,
`tribes use sales and excise taxes, but these do not generate enough revenue to
`support tribal government functions.
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`(Ex. 2 at 1.) Justice Sotomayor echoed this sentiment, and the Federal Government’s
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`important role in facilitating self-sufficiency of Native American Tribes, in her
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`concurring opinion in Michigan v. Bay Mills Indian Community:
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`A key goal of the Federal Government is to render Tribes more self-sufficient, and
`better positioned to fund their own sovereign functions, rather than relying on
`federal funding. And tribal business operations are critical to the goals of tribal
`self-sufficiency because such enterprises in some cases may be the only means by
`which a tribe can raise revenues. This is due in large part to the insuperable (and
`often state-imposed) barriers Tribes face in raising revenue through more
`traditional means.
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`134 S. Ct. 2024, 2043–44 (2014) (Sotomayor, J., concurring) (internal citations and
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`quotation marks omitted).
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`To overcome such disparities, the Tribe explained to the PTAB that it has taken steps to
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`diversify its income, including by fostering relationships with innovator companies, like
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`Allergan. (Dkt. 510, Ex. L at 5-6.) Looking to a business model that has already been utilized
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`by state universities and their technology transfer offices, many of which hold and acquire
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`numerous patents, including Orange Book-listed patents, the Tribe adopted a Tribal Resolution
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`endorsing the creation of the Tribe’s Office of Technology, Research and Patents (“OTRAP”) for
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`the commercialization of existing and emerging technologies. (Ex. 4 (https://www.srmt-
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`nsn.gov/_uploads/site_files/OTRAP-Website-Blurb.pdf) at 1; Ex. 3 (Oct. 12, 2017 Ltr. from
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`Saint Regis Mohawk Tribe to Grassley and Feinstein) at 3-4, 5-6.) OTRAP operates to “manage
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`the acquisition of intellectual property from third parties,” and “maintain and license the acquired
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`legally protected intellectual property.” (Ex. 4.) All revenue generated by OTRAP, including
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`the revenue generated by the transfer from Allergan, goes into the Tribal General Fund and will
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`be used to address the chronically unmet needs of the Tribal community, such as housing,
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`employment, education, healthcare, cultural and the preservation of Mohawk cultural traditions.
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`(Id. at 2.)
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`2.
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`The Assignment Was Supported by Good and Valuable Consideration
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`As set forth in Allergan’s October 10, 2017 filing, Allergan’s assignment to the Tribe was
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`supported by consideration—in particular, the promise of the Tribe to assert sovereign immunity
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`before the PTAB, and its actual assertion of immunity in that proceeding, as well as the Tribe’s
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`promise not to assert immunity before this Court, but instead to cooperate in the litigation. (See
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`Dkt. 508, Ex. B at § 12(i); Dkt. 508, Ex. C at §§ 5.2, 5.3, 7.2.12; Dkt. 510, Ex. L.) These
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`promises related to the assertion and non-assertion of immunity are of critical and unique
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`importance to the Tribe and, as set forth in detail in Section III.C.1, may have a substantial effect
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`on the Tribe’s economic development activities.
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`That the consideration from the Tribe is not in monetary form is of no moment—the
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`Tribe’s promises and commitments, and its subsequent performance, serves as consideration
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`under the law, including under New York law, which governs the agreements. See Kinley Corp.
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`v. Ancira, 859 F. Supp. 652, 657 (W.D.N.Y. 1994) (“A benefit to a promisor or a detriment to a
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`promisee is sufficient consideration for a contract … It is enough that something is promised,
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`done, forborne, or suffered by the party to whom the promise is made as consideration for the
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`promise made to him.”) (citation omitted); Roth v. Isomed, Inc., 746 F. Supp. 316, 319 (S.D.N.Y.
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`1990) (“Consideration, which can take the form of either promise or performance, can be either a
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`bargained for gain or advantage to the promisee or a bargained for legal detriment or
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`disadvantage to the promisor.”); Bank of Bermuda, Ltd. v. Rosenbloom, 76 Civ. 1830 (GLG),
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`1976 U.S. Dist. LEXIS 11648, at *8 (S.D.N.Y. Dec. 28, 1976) (“It is hornbook law that in the
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`absence of fraud any benefit conferred upon a promisor in exchange for his promise is sufficient
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`to constitute a valid consideration and the court will not look to the sufficiency or the
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`insufficiency of such benefit conferred.”). Moreover, the assignment agreement itself expressly
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`acknowledges the existence and adequacy of the consideration received by Allergan (Dkt. 508,
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`Ex. B at § 1), which confirms that such consideration existed. See Memorylink Corp. v.
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`Motorola Sols., Inc., Motorola Mobility, Inc., 773 F.3d 1266, 1271 (Fed. Cir. 2014) (“We agree
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`with Motorola that there is no genuine issue of material fact that consideration existed, because
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`the Assignment explicitly acknowledges consideration for the sale, assignment, and transfer of
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`rights relating to the wireless video technology.”).
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`Moreover, the adequacy of the consideration is generally an issue for the contracting
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`parties to determine, and, where both Allergan and the Tribe are satisfied with the consideration
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`received for the assignment