The validity of a US patent can be challenged not only before a court, but also in “inter partes review” (IPR) proceedings before the Patent Trial and Appeal Board (PTAB).  As previously reported here, one patent owner resorted to an unusual strategy to try to shield his patents from IPR proceedings: Allergan sold one of its patent portfolios to the native Mohawk tribe (but licenced them back), allowing the tribe to assert tribal sovereign immunity from IPR proceedings.

The move has been criticised as being disingenious and there were fears that this practice may start to spread more widely. However, on 23 February 2018 the PTAB issued a ruling that should put an end to this practice.

The PTAB ruled that tribal sovereign immunity is not applicable to IPR proceedings. Moreover, the PTAB determined that although the tribe had formal ownership of the patents, Allergan remained the effective owner. Therefore, even if, for the sake of argument, the tribe was entitled to claim tribal sovereign immunity, it would be possible to proceed with IPR proceedings with Allergan as the effective owner.

In conclusion, it would seem that assignment strategies are not an effective tool for avoiding IPR proceedings. It is worth noting, however, that the constitutionality of IPR proceedings has been challenged.  The US Supreme Court has heard arguments in Oil States Energy Services, LLC v. Green’s Energy Group, LLC), so a decision is expected later this year.

“we do not comment on whether the License and the other agreements between the Tribe and Allergan constitute a “sham” transaction, nor do we need to decide whether the agreements are otherwise improper under the law”

https://www.patentprogress.org/wp-content/uploads/2018/02/PTAB-Denial-Of-Sovereign-Immunity-In-Allergan-IPRs.pdf