Allergan has disclosed that it transferred title to six of its contested eye drug patents to the St Regis Mohawk band in upstate New York, in a bid to use the band's sovereign immunity to prevent generic pharma companies from dragging the company into court to show that its patents are invalid.
The company paid the band $13.75m upfront and promised a $15m annual royalty if the patents remain intact.
If the tactic works (and that's a big if), native bands across the USA could find themselves being invited to launder the dirty money earned by pharma companies who use invalid patents to gouge Americans for medicine. What's more, the inevitable lawsuits will find fact-patterns that erode the bands' sovereign immunity, creating a set of precedential carve-outs that will weaken the legal position of every treaty band in the US.
Allergan CEO Brent Saunders addressed a Wells Fargo healthcare conference last weekend, urging his fellow pharma execs to end their dirty tricks, lest they serve as fodder for a popular uprising in support of the Democrats' single payer proposal.
The St Regis Mohawks say they're also holding a patent for an unnamed technology company, suggesting that there's a Shrkelic future for the band.
Lawyers for Allergan and the tribe expect that the concept of "sovereign immunity," which bars lawsuits against certain types of government entities, will protect patents owned by St. Regis from any IPR proceeding. In fact, university patents have already been found to be immune to IPR under the concept of sovereign immunity. That will give Allergan a major edge as it clashes with generic drug companies who are trying to knock out the patent so they can produce a cheaper generic version.
"The Saint Regis Mohawk Tribe and its counsel approached Allergan with a sophisticated opportunity to strengthen the defense of our RESTASIS intellectual property in the upcoming inter partes review proceedings before the Patent Trial and Appeal Board," Allergan Chief Legal Officer Bob Bailey said in a statement.
Given the potential power of the move, there's little doubt that tech companies, or the "patent trolls" that harangue them, will be next in line. In fact, at least one technology patent-holder has already done so. A lawyer for the St. Regis Mohawk Tribe told The New York Times that even before the Allergan deal, the tribe agreed to hold patents for a "technology company," which he declined to name.
Drug company hands patents off to Native American tribe to avoid challenge [Joe Mullin/Ars Technica]