You may have seen our firm’s recent e-mail regarding the efforts of a drug company to prevent its patents from being invalidated by the Patent Trial and Appeal Board (PTAB) Allergan had transferred certain patents to St. Regis Mohawk Tribe and licensed them back, hoping to take advantage of the tribe’s sovereign immunity to block the inter-partes patent review process. That case is still unfolding in the courts and in Congress, but a recent court decision doesn’t bode well for patent owners who would follow this path.

In a refreshing case of common-sense prevailing over convoluted legal maneuvers, the efforts of the University of Minnesota (“UM”) to prevent PTAB inter-partes review, by claiming sovereign immunity, have failed. On December 19, an expanded PTAB panel, including the Chief Administrative Patent Judge, denied UM’s motion to dismiss a company’s request for inter-partes review of the patents. Though acknowledging that state universities are generally immune from inter-partes review, as arms of the state, the PTAB concluded that UM had waived its sovereign immunity under the Eleventh Amendment by filing an action in federal court alleging infringement of the patents at issue. This apparently was a bridge too far for the judges, since UM was obviously trying to have its cake and eat it too.

While the facts involved in the tribal and state university litigation are not identical, the recent PTAB ruling may provide insight into how it will handle the claim of tribal immunity. If the PTAB finds that the transfer of assets to the tribe was a sham transaction (one made solely to avoid a legal proceeding), then it will likely be invalidated. It’s an interesting legal question. Stay tuned.