Brief of the R Street Institute and the Electronic Frontier Foundation as Amici Curiae in Support of Appellees

Abstract

Allergan, the holder of several pharmaceutical patents, entered a patent assignment and licensing transaction with the Saint Regis Mohawk Tribe. The sole purpose of that transaction was to prevent inter partes review of several Allergan patents based on the Tribe's sovereign immunity. Other patent holders and tribes could easily replicate this sovereign immunity transaction, and there are strong incentives for others to take advantage of this method of circumventing inter partes review and other post-grant proceedings. As a result, there is no reason to believe that this case is a unique one-off situation; should this Court deem sovereign immunity transactions an effective loophole to escape inter partes review, it is likely that many, if not most, patentees will take advantage of that loophole. Widespread evasion of inter partes review would lead to at least two serious harms. First, it would upset the basic balance of the patent system, with problematic fallout for all parties. Inter partes review was developed as the result of Congress weighing the tradeoffs between pre-grant examination and post-grant reconsideration of patents; in crafting the America Invents Act, Congress determined that it made policy and economic sense to correct erroneous patent grants after the fact, rather than to place the burden of accuracy entirely on pre-grant examination. If patent owners can easily avoid post-grant procedure, then pre-grant examination would need to become far more stringent, rendering patents potentially more expensive and difficult to obtain. Sovereign immunity transactions for circumventing inter partes review could thus have unintended negative ramifications for patent applicants and the public. Second, use of tribal transactions to avoid inter partes review negatively reflects on the reputation and integrity of the United States patent system as a whole. Allergan's transaction with the Tribe has been roundly criticized, and that criticism reveals a growing view that American patent law is not a driver of innovation but rather a game for lawyers to play. With intellectual property law's leading role in global policy today, it would be a step backwards to approve of a sovereign immunity stratagem that makes the patent system look illegitimate. Certainly, inter partes review is not perfect; indeed, amici have called for improvements to the proceeding. But insofar as complaints about inter partes review are the sole policy justification offered by Allergan and the Tribe for their position, this case is the wrong vehicle for those complaints, and the policy concerns laid out above militate strongly against dismantling the proceeding entirely to answer those complaints. The decision of the Board should be affirmed.