The Able Judge Bryson (In Texas) Ultimately Reserves On The Issue Of Legitimacy... But Expresses "Serious Reservations" About It, While Leaving The Question -- For IPR Proceedings

We will have to wait for the IPR proceedings to answer the question, definitively -- but it sure seems that the able Judge Bryson feels Brent Saunders' gambit, "to rent" sovereign immunity from a tribe of indigenous people. . . should be struck, as a sham transaction.

Ever employing the rule of parsimony, he did not rule exactly that, this morning -- to be clear. He ruled only that many of the patents are invalid -- but reserved for the IPR proceeding, the precise question of whether Mr. Saunders' artifice of "rented immunity" will be enforceable in the federal courts. Here's the judge's memorandum and opinion -- and a bit:

. . . .The Court has reviewed the information and briefs filed in response to the Court’s order. From that information, it is clear that Allergan’s motivation for the assignment was to attempt to avoid the IPR proceedings that are currently pending in the PTO by invoking the Tribe’s sovereign immunity as a bar to those proceedings. . . .

The Court has serious concerns about the legitimacy of the tactic that Allergan and the Tribe have employed. The essence of the matter is this: Allergan purports to have sold the patents to the Tribe, but in reality it has paid the Tribe to allow Allergan to purchase -- or perhaps more precisely, to rent -- the Tribe’s sovereign immunity in order to defeat the pending IPR proceedings in the PTO. This is not a situation in which the patentee was entitled to sovereign immunity in the first instance. Rather, Allergan, which does not enjoy sovereign immunity, has invoked the benefits of the patent system and has obtained valuable patent protection for its product, Restasis. But when faced with the possibility that the PTO would determine that those patents should not have been issued, Allergan has sought to prevent the PTO from reconsidering its original issuance decision. What Allergan seeks is the right to continue to enjoy the considerable benefits of the U.S. patent system without accepting the limits that Congress has placed on those benefits through the administrative mechanism for canceling invalid patents. . . .

But sovereign immunity should not be treated as a monetizable commodity that can be purchased by private entities as part of a scheme to evade their legal responsibilities. It is not an inexhaustible asset that can be sold to any party that might find it convenient to purchase immunity from suit. Because that is in essence is what the agreement between Allergan and the Tribe does, the Court has serious reservations about whether the contract between Allergan and the Tribe should be recognized as valid, rather than being held void as being contrary to public policy. . . .

While it is important to ensure that any judgment in this case will not be subject to challenge based on the omission of a necessary party, the Court is not required to decide whether the assignment of the patent rights from Allergan to the Tribe was valid in order to resolve the question whether to add the Tribe as a co-plaintiff. Instead, the Court will adopt the safer course of joining the Tribe as a co-plaintiff, while leaving the question of the validity of the assignment to be decided in the IPR proceedings, where it is directly presented. . . .

Now you know. Onward, on a lovely fall afternoon here.

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