Just recently, Allergan PLC (“Allergan”) announced that it had transferred the patents for its dry-eye drug Restasis to the Saint Regis Mohawk Tribe to take advantage of its sovereign immunity status and ward off challenges to the patents. Under the deal, the Tribe received an upfront payment of $13.75 million and will receive $15 million a year in royalties for the duration of the six Restasis patents.[i] The patents involved are set to expire on August 27, 2024.

The Saint Regis Mohawk Tribe licensed the patents back to Allergan and is filing a motion to dismiss the inter partes review (IPR) of the Restasis patents before the Patent Trial and Appeal Board (“PTAB” or “Board”) based on their sovereign immunity status. Earlier this year we discussed the PTAB’s holding in Covidien LP v. University of Florida Research Foundation Inc. that sovereign immunity applies to IPR’s, and the Board addressed the issue of sovereign immunity again in Neocard, Inc. v. University of Maryland, Baltimore and Reactive Surfaces Ltd., LLP v. Toyota Motor Corp.[ii] Each of these cases involved public universities who were patent owners that asserted sovereign immunity as a defense to the institution of an IPR.

In Covidien, the University of Florida asserted sovereign immunity, as an arm of the state of Florida, as a defense against an IPR challenge by the medical-device maker Covidien. The PTAB held that sovereign immunity bars the institution of an IPR to challenge the patentability of patents owned by states.

In Neochord, patent-owner University of Maryland and its exclusive licensee filed a motion to dismiss asserting sovereign immunity. The PTAB determined that sovereign immunity applied to the university and that the university had retained rights under the license agreement, transferring less than “substantially all” of its rights to the licensee. Accordingly, the PTAB held that the university was a necessary and indispensable party and found that the IPR could not proceed without the university, dismissing both the university and the exclusive licensee.

In Reactive Surfaces, the PTAB dismissed one of the patent owners in the IPR, the Regents of the University of Minnesota (“Regents”), but denied the motion to dismiss of patent co-owner Toyota Motor Corp. (“Toyota”). The Board rejected an argument by the patent owners that there should be a categorical rule requiring automatic termination of a proceeding upon the dismissal of one party on the grounds of sovereign immunity. Instead, the Board held that “when the absent sovereign party and a remaining party have identical ‘interests in the asserted patents,’ the remaining party adequately represents the interest of the absent sovereign party.”[iii] Finding that the Regents and Toyota held identical interests in the asserted patent, the Board held that Toyota would adequately represent the interests of the Regents and the IPR could proceed in their absence.

In each of the three cases, the PTAB dismissed the universities on the basis of sovereign immunity; however, the Board arrived at different conclusions in regard to the other parties who had rights in the asserted patents. The difference between the treatment of the exclusive licensee in Neochord and the co-owner in Reactive Surfaces seems to be based on whether the parties’ interests in the patent are “identical” to the sovereign’s interest.

Allergan’s Chief Legal Officer said Allergan reviewed the PTAB’s recent cases involving sovereign immunity in reaching its agreement with the Saint Regis Mohawk tribe. The Allergan IPR sets the stage for a possible extension of the university sovereign immunity IPR cases to Indian tribes with sovereign immunity status. The Board could possibly find Allergan and the Saint Regis Mohawk Tribe analogous to the University of Maryland and the exclusive licensee in Neochord, holding that the IPR cannot proceed without the Saint Regis Mohawk Tribe. If the PTAB does issue a holding finding that tribal immunity applies to IPR’s, it could have concerning future ramifications. Other pharmaceutical companies may follow Allergan’s lead in order to protect their patents from IPR challenges. Agreements such as these could potentially undermine the role of IPR challenges at the PTAB. The Allergan deal and the recent sovereign immunity PTAB cases could also prompt Congress to take another look at both tribal and state sovereign immunities laws in the context of intellectual property matters.


[i] United States Patent Nos. 8,629,111; 8,633,162; 8,642,556; 8,648,048; 8,685,930 and 9,248,191.

[ii] Covidien LP v. Univ. of Fla. Research Found. Inc., No. IPR2016-1274 (P.T.A.B. Jan. 25, 2017) (Paper 21); Neochord, Inc. v. Univ. of Md., Baltimore, No. IPR2016-208 (May 23, 2017) (Paper 28); Reactive Surfaces Ltd. v. Toyota Motor Corp., No. IPR2016-1914 (P.T.A.B. July 13, 2017) (Paper 36).

[iii] Reactive Surfaces Ltd. v. Toyota Motor Corp., No. IPR2016-1914, at 14-15 (P.T.A.B. July 13, 2017) (Paper 36)