By Brian Lewis (Rutgers Law Student) Most patent, trademark, and copyright law is exclusively governed by Federal law. Violations of these laws are addressed in Federal court. A party can raise a defense of sovereign immunity, a legal principle which grants immunity to sovereign entities unless the sovereign entity has waived immunity or by an express statement or action. Following such a defense, violations are no longer confined to lawsuits in a Federal court, but can also extend to various federal administrative procedures. One such example is an inter partes review (IPR), in which a trial like proceeding is held before an administrative court to challenge the validity of patents. The Patent Trial and Appeal Board (PTAB) is an administrative law body of the United States Patent and Trademark Office (USPTO) which decides such issues of patentability. Recent litigation has questioned not only the limitations of PTAB, but also the protection afforded by the sovereign immunity doctrine. General examples of sovereign entities include the Federal government, each U.S. state, State Universities, and the American Tribal Nations. A trend has recently emerged wherein a company will assign rights of a patent to an entity protected by sovereign immunity. In turn, that entity will then transfer an exclusive license back to the company. This transaction, though simple, has the profound effect of allowing a company to “rent” sovereign immunity. Because the sovereign entity owns the patent and not the company, it can limit IPR challenges performed by PTAB. Of particular interest is when sovereign immunity is claimed by a member of the American Tribal Nations. This has been aptly named Tribal Sovereign Immunity (TIP) amongst IP scholars. Surprisingly, TIP has avoided the Supreme Court decisions over the last 40 years in which the Court has imposed increasing restriction on tribes’ jurisdiction and authority. A Tribe is a sovereign government that cannot be sued unless the Tribe expressly waives its immunity or Congress unequivocally abrogates its immunity. When a Tribe becomes the owner of a patent through partnership with a company, the transitive property generally utilized in mathematics applies. Namely, if the Tribe owns the patent and the patent and is protected under TIP, then licensing of the patent back to the company affords the protection of TIP to that company. In a recent decision, PTAB shut down the St. Regis Mohawk Tribe’s claim of sovereign immunity. Allergan assigned its patents for the ophthalmic drug Restasis® to the tribe for $13.5 million plus yearly royalties surpassing that amount. The St. Regis Mohawk Tribe, as owner of the drug, claimed TIP when PTAB attempted to challenge the patent. Because Allergan received the exclusive license for the drug, it remained a secondary party to this challenge. PTAB determined that the Tribe is not immune from its proceedings as a sovereign entity and the patent could be challenged. In the eyes of PTAB, it is clear that Allergan is still the owner of the drug even though actual ownership belongs to the St. Regis Mohawk Tribe. The Tribe’s attorneys appealed the decision while noting that the Tribe is an indispensable party to this proceeding whose interests cannot be protected in its absence. In lieu of PTABs decision and the potential problems that can arise, the Federal Circuit issued a stay of further PTAB proceedings pending the St. Regis Mohawk Tribe’s sovereign immunity appeal. The Allergan patent has helped unearth an issue with sovereign immunity and has exposed a weakness of the USPTO concerning a potential abuse of power. PTABs role is to adjudicate property rights. Action by PTAB against the use of TIP might deprive a tribal sovereign of a necessary revenue stream. This constitutes a civil action to which the tribal sovereign is supposed to be immune (absent a decision by Congress). As more and more companies attempt to exploit the transitive property loophole created by TIP and renting sovereign immunity, PTAB and the Federal Circuit will need to strongly consider the short term and long terms effects of its decisions. Sovereign immunity is an important principle generally held to too important or valuable to be interfered with. A decision against Allergan’s claim will dilute the principle. A decision for Allergan may open the floodgates. There are positives and negatives to cabining TIP, but what remains for the future of patents given PTAB’s recent decision against Allergan’s claim of sovereign immunity and the subsequent appeal is unclear. Whether Allergan’s tactic will ultimately succeed remains unknown. One thing is clear: if PTAB does not limit Tribal Sovereign Immunity, we will see an ever-increasing trend of pharmaceutical giants developing close relationships with the American Tribal Nation. For those tribes, such a relationship may be welcomed. It may help offset the many hardships within those communities such as poverty and lack of jobs which were created due to colonial dispossession. However, in terms of Intellectual Property, the consequences can be devastating and lead to unchallengeable patents. By Brian Lewis