A couple weeks ago, we learned that pharma giant Allergan had transferred title to its most profitable eye drugs to New York's St Regis Mohawk band in order to invoke the band's "sovereign immunity" in proceedings that sought to invalidate its patents and make its drugs universally available at low costs.
The gambit has not been tried in court, but patent trolls are certainly warming up to do so. ITRI transferred 40 patents to MEC Resources LLC, wholly owned by North Dakota's Three Affiliated Tribes (the Mandan, Hidatsa, and Arikara Nations), which has now sued Apple, seeking a royalty on every Ipad sale.
By transferring title to the Three Affiliated Tribes, ITRI can force Apple into a longer, more expensive procedure for invalidating its patent, rather than the streamlined inter partes review.
It's not clear whether this will work. In 2016, the California courts slapped down a similar tactic, deployed by the payday loan industry, which had affiliated with native bands in order to invoke sovereign immunity and avoid legal liability for illegal financial practices.
IPRs have fundamentally changed the economics of patent litigation by increasing risks and lessening rewards for asserting weak patents. If Native American tribes are allowed to bypass the normal rules, the only ones who benefit will be "people who own shaky patents that they want to assert, patents that would have been invalidated in IPRs," writes Landau.
"'The validity of your patents is subject to review, unless you pay off some Indian tribe' does not seem like a good way to run an intellectual property system," notes Science columnist Derek Lowe.
There's no telling how this turns out until we see some rulings from courts or the Patent Trial and Appeals Board. If the patent-licensing shops see even a glimmer of hope that they could avoid IPRs, we're likely to see whole patent portfolios transferred to tribes in short order.
Apple is being sued for patent infringement by a Native American tribe [Joe Mullin/Ars Technica]