Saint Regis Mohawk Tribe v. Mylan Pharmaceuticals Inc. , 896 F.3d 1322 ( 2018 )

United States Court of Appeals
for the Federal Circuit
______________________
SAINT REGIS MOHAWK TRIBE, ALLERGAN, INC.,
Appellants
v.
MYLAN PHARMACEUTICALS INC., TEVA
PHARMACEUTICALS USA, INC., AKORN, INC.,
Appellees
______________________
2018-1638, 2018-1639, 2018-1640, 2018-1641, 2018-1642,
2018-1643
______________________
Appeals from the United States Patent and Trade-
mark Office, Patent Trial and Appeal Board in Nos.
IPR2016-01127, IPR2016-01128, IPR2016-01129,
IPR2016-01130, IPR2016-01131, IPR2016-01132,
IPR2017-00599, IPR2017-00576, IPR2017-00578,
IPR2017-00579, IPR2017-00583, IPR2017-00585,
IPR2017-00586, IPR2017-00594, IPR2017-00596,
IPR2017-00598, IPR2017-00600, IPR2017-00601.
______________________
Decided: July 20, 2018
______________________
JONATHAN MASSEY, Massey & Gail LLP, Washington,
DC, argued for appellants. Appellant Allergan, Inc. also
represented by THOMAS BRUGATO, JEFFREY B. ELIKAN,
ROBERT ALLEN LONG, JR., ALAINA MARIE WHITT, Coving-
ton & Burling LLP, Washington, DC.
2 SAINT REGIS MOHAWK TRIBE v. MYLAN PHARM. INC.
ERIC MILLER, Perkins Coie, LLP, Seattle, WA, argued
for appellees. Appellee Mylan Pharmaceuticals Inc. also
represented by DAN L. BAGATELL, Hanover, NH; SHANNON
BLOODWORTH, BRANDON MICHAEL WHITE, Washington,
DC; CHARLES CURTIS, ANDREW DUFRESNE, Madison, WI;
JAD ALLEN MILLS, STEVEN WILLIAM PARMELEE, Wilson,
Sonsini, Goodrich & Rosati, PC, Seattle, WA; RICHARD
TORCZON, Washington, DC.
MARK R. FREEMAN, Appellate Staff, Civil Division,
United States Department of Justice, Washington, DC,
argued for amicus curiae United States. Also represented
by COURTNEY DIXON, MARK B. STERN, CHAD A. READLER.
MICHAEL W. SHORE, Shore Chan DePumpo LLP, Dal-
las, TX, for appellant Saint Regis Mohawk Tribe. Also
represented by ALFONSO CHAN, JOSEPH F. DEPUMPO,
CHRISTOPHER LIIMATAINEN EVANS; MARSHA K. SCHMIDT,
Burtonsville, MD.
JOHN CHRISTOPHER ROZENDAAL, Sterne Kessler Gold-
stein & Fox, PLLC, Washington, DC, for appellee Teva
Pharmaceuticals USA, Inc. Also represented by MICHAEL
E. JOFFRE, WILLIAM H. MILLIKEN, PAULINE PELLETIER,
RALPH WILSON POWERS, III.
MICHAEL R. DZWONCZYK, Sughrue Mion PLLC, Wash-
ington, DC, for appellee Akorn, Inc. Also represented by
MARK BOLAND.
YIN HUANG, Zuber Lawler & Del Duca LLP, New
York, NY, for amicus curiae New York City Bar Associa-
tion.
ERIC SHUMSKY, Orrick, Herrington & Sutcliffe LLP,
Washington, DC, for amicus curiae Microsoft Corporation.
SAINT REGIS MOHAWK TRIBE v. MYLAN PHARM. 3
Also represented by SAMUEL HARBOURT; E. JOSHUA
ROSENKRANZ, New York, NY.
CHARLES DUAN, R Street Institute, Washington, DC,
for amici curiae R Street Institute, Electronic Frontier
Foundation.
JOHN THORNE, Kellogg, Hansen, Todd, Figel & Freder-
ick, P.L.L.C., Washington, DC, for amici curiae High Tech
Inventors Alliance, Computer & Communications Indus-
try Association. Also represented by GREGORY G. RAPAWY.
CHARLES R. MACEDO, Amster Rothstein & Ebenstein
LLP, New York, NY, for amicus curiae Askeladden, L.L.C.
Also represented by MARK BERKOWITZ, SANDRA A. HUDAK.
ANNA-ROSE MATHIESON, California Appellate Law
Group, San Francisco, CA, for amicus curiae America's
Health Insurance Plans.
WILLIAM M. JAY, Goodwin Procter LLP, Washington,
DC, for amicus curiae The Association for Accessible
Medicines. Also represented by JAIME ANN SANTOS;
JEFFREY FRANCER, The Association for Accessible Medi-
cines, Washington, DC.
MARIA AMELIA CALAF, Wittliff Cutter, Austin, TX, for
amici curiae Software & Information Industry Associa-
tion, L Brands, Inc., SAS Institute Inc., SAP America,
Inc., Internet Association, Xilinx, Inc.
______________________
Before DYK, MOORE, and REYNA, Circuit Judges.
Opinion for the court filed by Circuit Judge MOORE.
Concurring opinion filed by Circuit Judge DYK.
MOORE, Circuit Judge.
4 SAINT REGIS MOHAWK TRIBE v. MYLAN PHARM. INC.
Mylan Pharmaceuticals, Inc., petitioned for inter
partes review (“IPR”) of various patents owned by Aller-
gan, Inc., relating to its dry eye treatment Restasis. Teva
Pharmaceuticals USA, Inc., and Akorn, Inc. (together
with Mylan, “Appellees”) joined. While IPR was pending,
Allergan transferred title of the patents to the Saint Regis
Mohawk Tribe, which asserted sovereign immunity. The
Board denied the Tribe’s motion to terminate on the basis
of sovereign immunity and Allergan’s motion to withdraw
from the proceedings. Allergan and the Tribe appeal,
arguing the Board improperly denied these motions. We
affirm.
BACKGROUND
This appeal stems from a multifront dispute between
Allergan and various generic drug manufacturers regard-
ing patents related to Allergan’s Restasis product (the
“Restasis Patents”), a treatment for alleviating the symp-
toms of chronic dry eye. In 2015, Allergan sued Appellees
in the Eastern District of Texas, alleging infringement of
the Restasis Patents based on their filings of Abbreviated
New Drug Applications. On June 3, 2016, Mylan peti-
tioned for IPR of the Restasis Patents. Subsequently,
Teva and Akorn filed similar petitions. The Board insti-
tuted IPR and scheduled a consolidated oral hearing for
September 15, 2017.
Before the hearing, Allergan and the Tribe entered in-
to an agreement Mylan alleges was intended to protect
the patents from review. On September 8, 2017, a patent
assignment transferring the Restasis patents from Aller-
gan to the Tribe was recorded with the USPTO. The
Tribe moved to terminate the IPRs, arguing it is entitled
to assert tribal sovereign immunity, and Allergan moved
to withdraw. The Board denied both motions.
Allergan and the Tribe appeal. We have jurisdiction
pursuant 28 U.S.C. § 1295(a)(4)(A). Board decisions must
be set aside if they are “arbitrary, capricious, an abuse of
SAINT REGIS MOHAWK TRIBE v. MYLAN PHARM. 5
discretion, or otherwise not in accordance with law.”
5 U.S.C. § 706.
ANALYSIS
As “domestic dependent nations,” Indian tribes pos-
sess “inherent sovereign immunity,” and suits against
them are generally barred “absent a clear waiver by the
tribe or congressional abrogation.” Okla. Tax Comm’n v.
Citizen Band Potawatomi Indian Tribe of Okla., 498 U.S.
505, 509 (1991). This immunity derives from the common
law, Santa Clara Pueblo v. Martinez, 436 U.S. 49, 58
(1978), and it does not extend to actions brought by the
federal government, see, e.g., E.E.O.C. v. Karuk Tribe
Hous. Auth., 260 F.3d 1071, 1075 (9th Cir. 2001); United
States v. Red Lake Band of Chippewa Indians, 827 F.2d
380, 383 (8th Cir. 1987). Generally, immunity does not
apply where the federal government acting through an
agency engages in an investigative action or pursues an
adjudicatory agency action. See, e.g., Pauma v. NLRB,
888 F.3d 1066 (9th Cir. 2018) (holding the NLRB could
adjudicate unfair labor charges brought by the Board
against a tribally-owned business operating on tribal
land); Karuk Tribe Hous. Auth., 260 F.3d at 1074 (holding
tribe not immune in EEOC enforcement action); cf. Fed.
Power Comm’n v. Tuscarora Indian Nation, 362 U.S. 99,
122 (1960) (holding that tribal lands were subject to
takings by the Federal Power Commission). There is not,
however, a blanket rule that immunity does not apply in
federal agency proceedings. Fed. Maritime Comm’n v.
S.C. State Ports Auth., 535 U.S. 743, 754–56 (2002)
(“FMC”).
In FMC, the Supreme Court considered whether state
sovereign immunity precluded the Federal Maritime
Commission from “adjudicating a private party’s com-
plaint that a state-run port ha[d] violated the Shipping
Act of 1984.” Id. at 747. In answering this question, the
Court asked whether Commission adjudications “are the
6 SAINT REGIS MOHAWK TRIBE v. MYLAN PHARM. INC.
type of proceedings from which the Framers would have
thought the States possessed immunity when they agreed
to enter the Union.” Id. at 756. It decided they were,
given the FMC proceedings’ “overwhelming” similarities
with civil litigation in federal courts. Id. at 759. For
example, the Court noted the procedural rules in the
Commission’s proceedings “bear a remarkably strong
resemblance” to the rules applied in civil litigation, and
the discovery procedures were “virtually indistinguisha-
ble” from the procedures used in civil litigation. Id. at
757–58. The Court also distinguished the proceedings at
issue from other proceedings in which the Commission
had the authority to decide whether to proceed with an
investigation or enforcement action. Id. at 768. In doing
so, the Court recognized a distinction between adjudica-
tive proceedings brought against a state by a private
party and agency-initiated enforcement proceedings.
The Tribe argues that tribal sovereign immunity ap-
plies in IPR under FMC. It asserts that like the proceed-
ing in FMC, IPR is a contested, adjudicatory proceeding
between private parties in which the petitioner, not the
USPTO, defines the contours of the proceeding. Appellees
dispute this comparison, arguing that the Tribe may not
invoke sovereign immunity to block IPR proceedings
because they are more like a traditional agency action.
They argue the Board is not adjudicating claims between
parties but instead is reconsidering a grant of a govern-
ment franchise. They also argue that even if the Tribe
could otherwise assert sovereign immunity, its use here is
an impermissible attempt to “market an exception” from
the law and non-Indian companies have no legitimate
interest in renting tribal immunity to circumvent the law.
Appellees further argue the Tribe may not assert immuni-
ty because the assignment was a sham, and the Tribe
waived sovereign immunity by suing on the patents.
Although the precise contours of tribal sovereign im-
munity differ from those of state sovereign immunity, the
SAINT REGIS MOHAWK TRIBE v. MYLAN PHARM. 7
FMC analysis is instructive. We hold that tribal sover-
eign immunity cannot be asserted in IPRs.
IPR is neither clearly a judicial proceeding instituted
by a private party nor clearly an enforcement action
brought by the federal government. It is a “hybrid pro-
ceeding” with “adjudicatory characteristics” similar to
court proceedings, but in other respects it “is less like a
judicial proceeding and more like a specialized agency
proceeding.” Cuozzo Speed Techs., LLC v. Lee, 136 S. Ct.
2131, 2143–44 (2016). This tension was laid bare in two
recent Supreme Court decisions decided on the same day.
In Oil States Energy Services v. Greene’s Energy
Group, LLC, 138 S. Ct. 1365 (2018), the Court empha-
sized the government’s central role in IPR and the role of
the USPTO in protecting the public interest. It held that
IPR is a matter “which arise[s] between the Government
and persons subject to its authority in connection with the
performance of the constitutional functions of the execu-
tive or legislative departments.” 138 S. Ct. at 1373 (quot-
ing Crowell v. Benson, 285 U.S. 22, 50 (1932)). It
recognized that IPR is “simply a reconsideration of” the
PTO’s original grant of a public franchise, which serves to
protect “the public’s paramount interest in seeing that
patent monopolies are kept within their legitimate scope.”
Id. (quoting Cuozzo, 136 S. Ct. at 2144).
In contrast, in SAS Institute Inc. v. Iancu, 138 S. Ct.
1348 (2018), the Court emphasized the adjudicatory
aspects of IPR and the way in which it “mimics civil
litigation.” Id. at 1352; see also id. at 1353, 1355. It
explained that Congress structured IPR so that the peti-
tioner, not the USPTO Director, “define[s] the contours of
the proceeding.” Id. at 1355. The Court contrasted the
“party-directed, adversarial” IPR process, in which the
Director is only given the choice of whether to institute
IPR, with the “inquisitorial approach” established by the
ex parte reexamination statute, under which the Director
8 SAINT REGIS MOHAWK TRIBE v. MYLAN PHARM. INC.
was given the authority to investigate patentability on his
own initiative. Id.
Ultimately, several factors convince us that IPR is
more like an agency enforcement action than a civil suit
brought by a private party, and we conclude that tribal
immunity is not implicated. First, although the Director’s
discretion in how he conducts IPR is significantly con-
strained, he possesses broad discretion in deciding wheth-
er to institute review. Oil States, 138 S. Ct. at 1371.
Although this is only one decision, it embraces the entire-
ty of the proceeding. If the Director decides to institute,
review occurs. If the Director decides not to institute, for
whatever reason, there is no review. In making this
decision, the Director has complete discretion to decide
not to institute review. Oil States, 138 S. Ct. at 1371
(“The decision whether to institute inter partes review is
committed to the Director’s discretion.”). The Director
bears the political responsibility of determining which
cases should proceed. While he has the authority not to
institute review on the merits of the petition, he could
deny review for other reasons such as administrative
efficiency or based on a party’s status as a sovereign. See
Wi-Fi One, LLC v. Broadcom Corp., 878 F.3d 1364, 1372
(Fed. Cir. 2018) (en banc). Therefore, if IPR proceeds on
patents owned by a tribe, it is because a politically ac-
countable, federal official has authorized the institution of
that proceeding. See Alden v. Maine, 527 U.S. 706, 756
(1999) (contrasting suits in which the United States
“exercise[s] . . . political responsibility for each suit prose-
cuted” in order to fulfill its obligation under the Take
Care Clause with “a broad delegation to private persons
to sue nonconsenting States”). In this way, IPR is more
like cases in which an agency chooses whether to institute
a proceeding on information supplied by a private party.
In FMC, the Court recognized that immunity would not
apply in such a proceeding. FMC, 535 U.S. at 768.
SAINT REGIS MOHAWK TRIBE v. MYLAN PHARM. 9
In FMC, the Federal Maritime Commission lacked the
“discretion to refuse to adjudicate complaints brought by
private parties,” FMC, 535 U.S. at 764, and in federal civil
litigation, a private party can compel a defendant’s ap-
pearance in court and the court had no discretion to
refuse to hear the suit. In both instances, absent immuni-
ty, a private party could unilaterally hale a sovereign
before a tribunal, presenting an affront to the dignity of
the sovereign. See Michigan v. Bay Mills Indian Cmty.,
134 S. Ct. 2024, 2042 (2014) (noting the need to consider
the dignity of the Indian tribes as sovereigns); FMC, 535
U.S. at 760 (“The preeminent purpose of state sovereign
immunity is to accord States the dignity that is consistent
with their status as sovereign entities.”). The Director’s
broad authority to not institute alleviates these concerns
in the IPR context. It is the Director, the politically
appointed executive branch official, not the private party,
who ultimately decides whether to proceed against the
sovereign.
Second, the role of the parties in IPR suggests im-
munity does not apply in these proceedings. Once IPR
has been initiated, the Board may choose to continue
review even if the petitioner chooses not to participate.
35 U.S.C. § 317(a). The Director has also been granted
the right to participate in appeals “even if the private
challengers drop out.” Cuozzo, 136 S. Ct. at 2144; see also
35 U.S.C. § 143 (granting the Director the right to inter-
vene in appeals of Board decisions in IPRs). The Board
has construed its rules to allow it to continue review even
in the absence of patent owner participation. See Reactive
Surfaces Ltd. v. Toyota Motor Corp., IPR2017-00572,
Paper 32 (PTAB July 13, 2017) (citing 37 C.F.R.
§§ 42.108(c), 120(a)). This reinforces the view that IPR is
an act by the agency in reconsidering its own grant of a
public franchise.
Third, unlike FMC, the USPTO procedures in IPR do
not mirror the Federal Rules of Civil Procedure. See
10 SAINT REGIS MOHAWK TRIBE v. MYLAN PHARM. INC.
FMC, 535 U.S. at 757–58. Although there are certain
similarities, the differences are substantial. While the
Federal Rules of Civil Procedure provide opportunities for
a plaintiff to make significant amendments to its com-
plaint, see Fed. R. Civ. P. 15, the Board has determined
that in IPR a petitioner may only make clerical or typo-
graphical corrections to its petition, see Nat’l Envtl. Prods.
Ltd. v. Dri-Steem Corp., IPR2014-01503, Paper 11 (PTAB
Nov. 4, 2014) (citing 37 C.F.R. § 42.104(c)). At the same
time, a patent owner in IPR may seek to amend its patent
claims during the proceedings, an option not available in
civil litigation. 35 U.S.C. § 316(d). IPR also lacks many
of the preliminary proceedings that exist in civil litiga-
tion. See, e.g., Farmwald v. Parkervision, Inc., IPR2014-
00946, Paper 13 (PTAB Jan. 26, 2015) (declining to con-
duct a Markman hearing). Moreover, in civil litigation
and the proceedings at issue in FMC, parties have a host
of discovery options, including the use of interrogatories,
depositions, production demands, and requests for admis-
sion. FMC, 535 U.S. at 758. In IPR, discovery is limited
to “(A) the deposition of witnesses submitting affidavits or
declarations; and (B) what is otherwise necessary in the
interest of justice.” 35 U.S.C. § 316(a)(5); see also 37
C.F.R. § 42.51. In FMC, the Court rejected the idea that
sovereign immunity could be circumvented by merely
moving a proceeding from an Article III court to an equiv-
alent agency tribunal. FMC, 535 U.S. at 760. An IPR
hearing is nothing like a district court patent trial. The
hearings are short, and live testimony is rarely allowed.
Ultratec, Inc. v. CaptionCall, LLC, 872 F.3d 1267, 1270
n.2 (Fed. Cir. 2017) (“Very seldom do IPR proceedings
have the hallmarks of what is typically thought of as a
trial.”). In IPR, the agency proceedings are both function-
ally and procedurally different from district court litiga-
tion. In short, the agency procedures in FMC much more
closely approximated a civil litigation than those in IPR.
SAINT REGIS MOHAWK TRIBE v. MYLAN PHARM. 11
Finally, while the USPTO has the authority to con-
duct reexamination proceedings that are more inquisito-
rial and less adjudicatory than IPR, this does not mean
that IPR is thus necessarily a proceeding in which Con-
gress contemplated tribal immunity to apply. The Tribe
acknowledged that sovereign immunity would not apply
in ex parte or inter partes reexamination proceedings
because of their inquisitorial nature. Oral Arg. at 6:30–
8:10. The mere existence of more inquisitorial proceed-
ings in which immunity does not apply does not mean
that immunity applies in a different type of proceeding
before the same agency. Notably, the Supreme Court in
Cuozzo recognized inter partes reexamination and IPR
have the same “basic purposes, namely to reexamine an
agency decision.” 136 S. Ct. at 2144. While IPR presents
a closer case for the application of tribal immunity than
reexamination, we nonetheless conclude that tribal im-
munity does not extend to these administrative agency
reconsideration decisions.
The Director’s important role as a gatekeeper and the
Board’s authority to proceed in the absence of the parties
convinces us that the USPTO is acting as the United
States in its role as a superior sovereign to reconsider a
prior administrative grant and protect the public interest
in keeping patent monopolies “within their legitimate
scope.” See Cuozzo, 136 S. Ct. at 2144. The United
States, through the Director, does “exercise . . . political
responsibility” over the decision to proceed with IPR.
FMC, 535 U.S. at 764 (quoting Alden, 527 U.S. at 756).
The Tribe may not rely on its immunity to bar such an
action. See Miccosukee Tribe of Indians of Fla. v. United
States, 698 F.3d 1326, 1331 (11th Cir. 2012) (“Indian
tribes may not rely on tribal sovereign immunity to bar a
suit by a superior sovereign.”). Because we conclude that
tribal sovereign immunity cannot be asserted in IPR, we
need not reach the parties’ other arguments.
12 SAINT REGIS MOHAWK TRIBE v. MYLAN PHARM. INC.
In this case we are only deciding whether tribal im-
munity applies in IPR. While we recognize there are
many parallels, we leave for another day the question of
whether there is any reason to treat state sovereign
immunity differently.
CONCLUSION
For the foregoing reasons, the decision of the Board is
affirmed.
AFFIRMED
United States Court of Appeals
for the Federal Circuit
______________________
SAINT REGIS MOHAWK TRIBE, ALLERGAN, INC.,
Appellants
v.
MYLAN PHARMACEUTICALS INC., TEVA
PHARMACEUTICALS USA, INC., AKORN, INC.,
Appellees
______________________
2018-1638, 2018-1639, 2018-1640, 2018-1641, 2018-1642,
2018-1643
______________________
Appeals from the United States Patent and Trade-
mark Office, Patent Trial and Appeal Board in Nos.
IPR2016-01127, IPR2016-01128, IPR2016-01129,
IPR2016-01130, IPR2016-01131, IPR2016-01132,
IPR2017-00599, IPR2017-00576, IPR2017-00578,
IPR2017-00579, IPR2017-00583, IPR2017-00585,
IPR2017-00586, IPR2017-00594, IPR2017-00596,
IPR2017-00598, IPR2017-00600, IPR2017-00601.
______________________
DYK, Circuit Judge, concurring.
I fully join the panel opinion but write separately to
describe in greater detail the history of inter partes
review proceedings, history that confirms that those
proceedings are not adjudications between private par-
ties. While private parties play a role, inter partes re-
views are fundamentally agency reconsiderations of the
2 SAINT REGIS MOHAWK TRIBE v. MYLAN PHARM. INC.
original patent grant, proceedings as to which sovereign
immunity does not apply.
As the panel makes clear, it is well established that
tribes cannot assert sovereign immunity in proceedings
brought by the federal government. 1 This understanding
is reflected in Federal Maritime Commission v. South
Carolina State Ports Authority (“FMC”), which dealt with
a proceeding conducted by the Federal Maritime Commis-
sion adjudicating a private party’s claim that a state-run
port had violated a federal statute in which the private
party sought monetary and injunctive relief. 535 U.S. 743,
747–49 (2002). “[T]he only duty assumed by the FMC, and
hence the United States, in conjunction with [the] private
complaint [was] to assess its merits in an impartial man-
ner.” Id. at 764.
The Supreme Court held that state sovereign immun-
ity barred the FMC from adjudicating the complaint, but
noted that it would not bar the FMC from “institut[ing]
its own administrative proceeding against a state-run
port,” even if that proceeding were prompted by “infor-
mation supplied by a private party.” Id. at 768. Private
parties, the Court explained, “remain perfectly free to
complain to the Federal Government about unlawful state
activity and the Federal Government [remains] free to
take subsequent legal action.” Id. at 768 n.19.
1 See Washington v. Confederated Tribes of Colville
Indian Reservation, 447 U.S. 134, 154 (1980) (holding that
tribal sovereignty is “dependent on, and subordinate to”
the Federal Government); Pauma v. NLRB, 888 F.3d
1066, 1078–79 (9th Cir. 2018) (holding that tribal immun-
ity does not preclude a proceeding brought “on behalf of
the NLRB, an agency of the United States, to enforce
public rights”); NLRB v. Little River Band of Ottawa
Indians Tribal Gov’t, 788 F.3d 537, 555 (6th Cir. 2015).
SAINT REGIS MOHAWK TRIBE v. MYLAN PHARM. INC. 3
Under FMC, it is clear that sovereign immunity can-
not bar agency denial of an original patent application
filed by a sovereign entity or, consequently, agency recon-
sideration of an original patent grant. Such reconsidera-
tion simply does not involve agency adjudication of a
private dispute, but rather agency reconsideration of its
own prior actions.
At oral argument, counsel for the tribe acknowledged
that sovereign immunity would not apply in either ex
parte or inter partes reexamination proceedings, and even
suggested that the USPTO could continue to provide post-
grant review of tribe-owned patents by simply converting
the inter partes reviews to ex parte reexaminations. Oral
Arg. 6:30–7:08, 54:48–55:15. But inter partes review is
not fundamentally different from other reexamination
procedures. Rather, inter partes review is a direct succes-
sor to ex parte and inter partes reexamination. It shares
many of the same procedural features and is designed to
address the same problems. And like the reexaminations
from which it descends, it is fundamentally agency recon-
sideration, assisted by third parties, rather than agency
adjudication of a private dispute.
Post-grant administrative review of issued patents is
a relatively new feature of the patent system. It was first
enacted in 1980 to address longstanding concerns about
the reliability of the original examination process. Patlex
Corp. v. Mossinghoff, 758 F.2d 594, 603 (Fed. Cir. 1985).
Before reexamination procedures, once a patent was
issued, “there was no way the PTO or private persons
could have forced . . . patents back into the examination
phase against [the patent owner’s] will.” Id. at 601. 2 This
2 The USPTO did have the authority to reissue pa-
tents to cure errors in the original. See Grant v. Raymond,
31 U.S. 218, 244 (1832); see also 35 U.S.C. § 251. Howev-
4 SAINT REGIS MOHAWK TRIBE v. MYLAN PHARM. INC.
was problematic because the USPTO—then and now—is
an agency with finite resources that sometimes issues
patents in error. Currently, for instance, the USPTO
receives over 600,000 applications a year. U.S. Patent &
Trademark Office, Performance & Accountability Report
169 tbl.2 (2017). Patent examiners receive roughly 22
hours to review each application, an amount of time that
70% of examiners report as insufficient. See U.S. Gov’t
Accountability Office, GAO-16-490, Patent Office Should
Define Quality, Reassess Incentives, and Improve Clarity
10, 25–26 (2016). And the USPTO struggles to attract and
retain examiners with the technical competence required
to understand the inventions being reviewed and to
perform sufficiently thorough prior art searches. See U.S.
Gov’t Accountability Office, GAO-16-479, Patent Office
Should Strengthen Search Capabilities and Better Moni-
tor Examiners’ Work 28–29 & n.50 (2016).
In considering the enactment of reexamination, Con-
gress was well aware of constraints on the accuracy of
initial examination and the adverse effects of the issuance
of bad patents. The Senate report on patent reexamina-
tion emphasized that the USPTO faced “a situation where
a limited staff is trying to cope with a constantly increas-
ing workload and is under pressure to make speedy
determinations on whether or not to grant patents.” S.
Rep. No. 96-617, at 8 (1980); see also Patent Reexamina-
tion: Hearing on S. 1679 Before the Comm. on the Judici-
ary, 96th Cong. 3 (1980) (statement of Sen. Bayh)
(characterizing the USPTO as “an understaffed and
overworked office trying to handle an ever increasing
er, reissue proceedings could only be initiated at the
request of the patentee, so they were of limited use in
ensuring patent quality. See Russell E. Levine et. al., Ex
Parte Patent Practice and the Rights of Third Parties, 45
Am. U. L. Rev. 1987, 2008 (1996).
SAINT REGIS MOHAWK TRIBE v. MYLAN PHARM. INC. 5
workload.”). The USPTO Commissioner testified that
these resource constraints led to uncertainty in the patent
system “because pertinent prior patents and printed
publications . . . often are discovered only after a patent
has issued and become commercially important.” S. Rep.
No. 96-617, at 9 (1980). The Commissioner also explained
that
The main reason reexamination is needed is be-
cause members of the public interested in the va-
lidity of a patent are sometimes able to find
pertinent prior patents and printed publications
not known or available to the PTO. . . .
The patent owner’s competitors will devote great
effort and expense to invalidating a patent that
affects their business. They can afford to look for
documentary evidence of unpatentability in li-
brary collections, technical journals and other
sources not within the PTO’s search file. Because
of budgetary and time constraints, the examiner’s
search seldom extends beyond the PTO’s 22 mil-
lion document collection.
Industrial Innovation and Patent and Copyright Law
Amendments: Hearing on H.R. 6033, H.R. 6934, H.R.
3806, and H.R. 2414 Before the Subcomm. on Courts, Civil
Liberties & the Admin. of Justice of the H. Comm. on the
Judiciary, 96th Cong. 576 (1981) (statement of Sidney A
Diamond, Commissioner of Patents and Trademarks). 3 In
3 See also Thomas E. Popovich, Patent Quality: An
Analysis of Proposed Court, Legislative, and PTO—
Administrative Reform—Reexamination Resurrected (Part
I), 61 J. Pat. Off. Soc’y 248, 269 (1979) (concluding that
the issuance of low quality patents was attributable to the
USPTO’s failure to discover and adequately to consider
6 SAINT REGIS MOHAWK TRIBE v. MYLAN PHARM. INC.
short, given the high volume of applications and the
USPTO’s manpower limitations, pre-grant patent exami-
nation was—and still is—an imperfect way to separate
the good patents from the bad. Resource constraints in
the initial examination period inevitably result in errone-
ously granted patents. 4
As a result of these problems, there was a perception
that the public lacked confidence in the patent system,
which in turn contributed to judicial skepticism about the
USPTO’s work. See S. Rep. No. 96-617, at 3, 14 (1980).
Indeed, “judicial opinions and commentaries from the
time” evince “a fundamental lack of trust in the compe-
tency of the PTO to discover sources of relevant prior art
and apply them properly under the statutory standards,
particularly in the context of a confidential ex parte
examination process.” Mark D. Janis, Rethinking Reexam-
ination: Toward A Viable Administrative Revocation
System for U.S. Patent Law, 11 Harv. J.L. & Tech. 1, 9–10
(1997). This lack of confidence led to an undermining of
the most relevant prior art and that patent reform should
be directed at these failures).
4 See U.S. Gov’t Accountability Office, GAO-16-490,
Patent Office Should Define Quality, Reassess Incentives,
and Improve Clarity 25 (2016) (reporting that “examiners’
time pressures are one of the central challenges for patent
quality”); see also Michael D. Frakes & Melissa F. Was-
serman, Does the U.S. Patent and Trademark Office
Grant Too Many Bad Patents?: Evidence from a Quasi-
Experiment, 67 Stan. L. Rev. 613, 652–53 (2015) (finding
increased patent grant rates correlated with increased
resource strain on the USPTO); Shawn P. Miller, Where’s
the Innovation: An Analysis of the Quantity and Qualities
of Anticipated and Obvious Patents, 18 Va. J.L. & Tech. 1,
45 (2013) (estimating that 28% of issued patents would be
invalidated as anticipated or obvious).
SAINT REGIS MOHAWK TRIBE v. MYLAN PHARM. INC. 7
the presumption of patent validity, as “many courts
treated the presumption of validity as coextensive with
the presumption of administrative correctness.” Id. at 12.
Some kind of reexamination procedure was therefore
desirable, particularly as to issues of anticipation and
obviousness where prior art has always played a central
role. “After reexamination,” the Commissioner testified,
“the presumptive validity of the patent as it leaves the
reexamination process will be enhanced. The court will
have greater confidence that the patent claims are of
exactly the right scope and that any unpatentable original
claims have been canceled.” Industrial Innovation and
Patent and Copyright Law Amendments: Hearing on H.R.
6033, H.R. 6934, H.R. 3806, and H.R. 2414 Before the
Subcomm. on Courts, Civil Liberties & the Admin. of
Justice of the H. Comm. on the Judiciary, 96th Cong. 580–
81 (1981) (statement of Sidney A Diamond, Commissioner
of Patents and Trademarks). Reexamination would allow
the USPTO to cure its own errors, thereby improving
patent quality, bolstering the presumption of patent
validity, and restoring the public’s and the judiciary’s
confidence in the USPTO.
In 1980, Congress enacted the Reexamination Act and
created ex parte reexamination, the first post-issuance
proceeding to review patent validity. See Act of Dec. 12,
1980, Pub. L. No. 96-517, 94 Stat. 3015 (1980). A request
for ex parte reexamination could be filed by “any person
at any time,” including the patent owner, a third party, or
the Director of the USPTO. 35 U.S.C. § 302 (1980). If the
request raised “a substantial new question of patentabil-
ity” based on prior art, the USPTO would grant the re-
quest and conduct reexamination. Id. at § 303(a). The
USPTO would then cancel any claim of the patent deter-
mined to be unpatentable. Id. at § 307.
8 SAINT REGIS MOHAWK TRIBE v. MYLAN PHARM. INC.
The objective of reexamination was to “strengthen[]
investor confidence in the certainty of patent rights by
creating a system of administrative reexamination of
doubtful patents,” H.R. Rep. No. 96-1307, pt. 1, at 3
(1980), and to “permit efficient resolution of questions
about the validity of issued patents without recourse to
expensive and lengthy infringement litigation,” id. at 4. In
particular, reexamination aimed to use the motivation
and resources of third parties to improve the accuracy of
the USPTO’s patent process. See S. Rep. No. 96-617, at 2
(1980) (explaining that reexamination “will help to restore
confidence in the effectiveness of our patent system by
efficiently bringing to the PTO’s attention relevant [prior
art] materials that are missing or have been overlooked.”).
“The problem,” the Senate report concluded, “is to insure
that the patent examiner has the materials needed for a
complete examination and patent reexamination will help
to get these materials before him.” Id. at 3.
Nevertheless, ex parte reexamination had several lim-
itations with the result that it was rarely used. H.R. Rep
No. 106-464, at 133 (1999). First and foremost, a “third
party challenger had no role once the proceeding was
initiated while the patent holder had significant input
throughout the entire process.” S. Rep. No. 110-259 at 18
(2008). Additionally, there was no right for a requestor to
appeal the USPTO’s reexamination decision either admin-
istratively or in court. Id. at 19.
In light of these deficiencies, Congress sought to in-
troduce a new system that would make reexamination
more effective and broaden its use. H.R. Rep 106-464 at
133 (1999). In 1999, it enacted a new procedure, known as
inter partes reexamination, adding to the 1980 Reexami-
nation Act’s ex parte option. Act of Nov. 29, 1999, Pub. L.
No. 106-113, 113 Stat. 1501 (1999). Inter partes reexami-
nation allowed a third party to file a request for reexami-
nation based on prior art, and if a substantial new
SAINT REGIS MOHAWK TRIBE v. MYLAN PHARM. INC. 9
question of patentability was raised, the USPTO would
grant the request and proceed with reexamination. 35
U.S.C. § 312 (2002). Unlike ex parte reexamination,
however, inter partes reexamination allowed third party
requesters to participate in the process by providing that
“[e]ach time that the patent owner files a response to an
action on the merits from the Patent and Trademark
Office, the third-party requester shall have one opportuni-
ty to file written comments addressing issues raised by
the action of the Office or the patent owner’s response
thereto.” Id. at § 314. It also permitted a requester to
appeal an examiner’s determination that the reexamined
patent is valid to the Board of Patent Appeals and Inter-
ferences. “The participation by third parties [was] consid-
ered vital” to the goal of “improving patent quality and
validity” because “in many circumstances they [would]
have the most relevant prior art available and incentive
to seek to invalidate an allegedly defective patent.” H.R.
Rep. 107-120, at 4 (2001).
Over the next few years, Congress revised inter partes
reexamination in an attempt to make it more effective. In
2002, the procedure was amended to allow requests based
solely on prior art already considered by the USPTO, Pub.
L. 107-273, §13105, 116 Stat. 1758, 1900 (2002), and to
provide the same appellate review opportunities to pa-
tentees and third-party requesters. Id. at § 13202, 116
Stat. 1899–1906. Ultimately, however, both ex parte and
inter partes reexamination were less widely used than
Congress had hoped, and had features that made them
“troublesomely inefficient and ineffective as a truly viable
alternative for resolving questions of patent validity.” S.
Rep. No. 110-259 at 19 (2008).
It was against this background that, in 2011, Con-
gress enacted the Leahy–Smith America Invents Act,
which replaced inter partes reexamination with new post-
grant review procedures, such as inter partes review,
10 SAINT REGIS MOHAWK TRIBE v. MYLAN PHARM. INC.
covered business method review, and post-grant review,
while retaining ex parte reexamination. See Pub. L. No.
112-29, § 6, 125 Stat. 284, 299–304 (2011). Inter partes
review in particular was designed to improve upon the
inter partes reexamination process. Cuozzo Speed Techs.,
LLC v. Lee, 136 S. Ct. 2131, 2137 (2016). 5 Similar to
reexamination, the purpose behind creating inter partes
review was to “improve patent quality and restore confi-
dence in the presumption of validity.” H.R. Rep. 112-98,
pt. I, at 48 (2011).
Inter partes review, like inter partes reexamination,
begins with a third party’s filing a petition challenging
the validity of one or more claims in a patent on the basis
of prior art. The USPTO may institute review if the
petitioner demonstrates a “reasonable likelihood that [it]
would prevail” in the dispute, rather than instituting if it
demonstrates a “substantial new question of patentabil-
ity,” as was the case in reexamination. See 35 U.S.C.
5 The proceedings created by the AIA continued
Congress’ efforts to channel the work of third party chal-
lengers in order to help the USPTO achieve its mission.
See H.R. Rep. No. 112-98, pt. I, at 39–40 (2011) (charac-
terizing post-grant proceedings as “a more efficient sys-
tem for challenging patents that should not have issued”).
Indeed, the AIA also expanded the role of private parties
in the pre-grant examination process. Previous USPTO
procedure allowed third parties to submit prior art pa-
tents and other printed publications of potential relevance
to a pending examination but did not allow explanations
of “why the prior art was submitted or what its relevancy
might be.” Id. at 48–49. In an effort to better capitalize on
the assistance of third parties, the AIA removed this
restriction and provided a mechanism for third parties to
explain the relevance of prior art they bring to the
USPTO’s attention. Id. at 49.
SAINT REGIS MOHAWK TRIBE v. MYLAN PHARM. INC. 11
§ 314(a). Like inter partes reexamination, the third party
remains involved throughout the proceeding, but inter
partes review can include discovery and an oral hearing
in addition to written comments. It is conducted before
the Patent Trial and Appeal Board rather than an exam-
iner. § 316(c).
In inter partes review, the federal agency tasked with
patent examination of patent applications takes a “second
look” at its own decision to issue a patent. As the Su-
preme Court concluded in Cuozzo:
[T]he purpose of [inter partes review] is not quite
the same as the purpose of district court litigation.
The proceeding involves what used to be called a
reexamination (and, as noted above, a cousin of in-
ter partes review, ex parte reexamination, 35
U.S.C. § 302 et seq., still bears that name). The
name and accompanying procedures suggest that
the proceeding offers a second look at an earlier
administrative grant of a patent. Although Con-
gress changed the name from “reexamination” to
“review,” nothing convinces us that, in doing so,
Congress wanted to change its basic purposes,
namely, to reexamine an earlier agency decision.
136 S. Ct. at 2144; see also Patlex, 758 F.2d at 604 (ex-
plaining that ex parte reexamination’s “purpose is to
correct errors made by the government, to remedy defec-
tive governmental (not private) action, and if need be to
remove patents that should never have been granted.”).
While inter partes review has some features similar to
civil litigation, see SAS Institute Inc. v. Iancu, 138 S. Ct.
1348, 1352 (2018), at its core, it retains the purpose and
many of the procedures of its reexamination ancestors, to
which everybody agrees sovereign immunity does not
apply. Inter partes review is an administrative proceeding
designed to improve patent quality by giving the USPTO
12 SAINT REGIS MOHAWK TRIBE v. MYLAN PHARM. INC.
“a second look at an earlier administrative grant of a
patent.” Cuozzo, 136 S. Ct. at 2144; see also Oil States
Energy Servs., LLC v. Greene’s Energy Grp., LLC, 138 S.
Ct. 1365, 1374 (2018) (“The primary distinction between
inter partes review and the initial grant of a patent is
that inter partes review occurs after the patent has is-
sued.”).
As the panel describes, significant features of the sys-
tem confirm that inter partes review is an agency recon-
sideration rather than an adjudication of a private
dispute and does not implicate sovereign immunity. Inter
partes review brings to bear the same agency expertise as
exists in initial examination. There is no requirement
that a third party petitioner have any interest in the
outcome of the proceeding, much less Article III standing.
See 35 U.S.C. § 311(a). Upon receiving a petition, the
Director has complete discretion regarding whether to
institute review. § 314; Oil States, 138 S. Ct. at 1371. The
inter partes review procedures limit discovery, typically
preclude live testimony in oral hearings, and do not
mirror the Federal Rules of Civil Procedure. § 316(a)(5);
see also 37 C.F.R. §§ 42.51, 42.70; Ultratec, Inc. v. Cap-
tionCall, LLC, 872 F.3d 1267, 1270 n.2 (Fed. Cir. 2017).
And if the third party settles, the proceeding does not end,
and the USPTO may continue on to a final written deci-
sion. § 317(a). The USPTO may intervene to defend its
decisions on appeal, whether or not the third party peti-
tioner remains in the case. § 143; Cuozzo, 136 S. Ct. at
2144. It does not involve exercise of personal jurisdiction
over the patent holder or adjudication of infringement.
The only possible adverse outcome is the cancelation of
erroneously granted claims. Notably, the Supreme Court
has held that “adversarial proceedings” that do not in-
volve the exercise of personal jurisdiction do not neces-
sarily raise sovereign immunity concerns. See Tenn.
SAINT REGIS MOHAWK TRIBE v. MYLAN PHARM. INC. 13
Student Assistance Corp. v. Hood, 541 U.S. 440, 448
(2004) (bankruptcy).
These features distinguish inter partes review from
the proceeding in FMC and bolster the view that it is, like
ex parte and inter partes reexamination, an executive
proceeding that enlists third-party assistance. As the
panel concludes, in such a reexamination proceeding,
sovereign immunity does not apply.