Troubles loom for patent trolls who rent sovereign immunity from Native American tribes

In September, we learned that the pharma giant Allergan had sold key patents to the St Regis Mohawk band in upstate New York, in a bid to avoid a streamlined patent-challenge process called inter partes review (IPR).

American indigenous tribes are sovereign nations and under the doctrine of "sovereign immunity" they can only be sued in US federal courts if they agree to subject themselves to the court's jurisdiction. Allergan was embroiled in a patent dispute over an expired eye-medication that its rivals wanted to manufacture as a generic. Though Allergan believed it would prevail in the suit, it feared that it would then have to fight an inter partes review, and it believed that the St Regis Mohawks could avoid the process by claiming sovereign immunity.

Later in the month, we learned that other patent trolls had sold key patents to North Dakota's Three Affiliated Tribes in order to sue Apple over patent violation, forcing Apple into the most expensive form of litigation by preventing Apple from seeking inter partes review of the troll's patents.

As it turns out, the Allergan gambit was moot: yesterday, a federal judge invalidated the company's patent on its $1.5B dry-eye drug Restasis. The ruling means that inter partes review is not likely to occur, as Allergan's rivals are now free to manufacture generics without further legal action.


In his opinion, US Circuit Judge William Bryson took pains to make it clear that he did not acknowledge the validity of the arrangement between Allergan and the St Regis Mohawks.

Congress is already investigating the tactic with an eye to clarifying the law to prohibit it.

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…

If that ploy succeeds, any patentee facing IPR proceedings would presumably be able to defeat those proceedings by employing the same artifice. In short, Allergan's tactic, if successful, could spell the end of the PTO's IPR program, which was a central component of the America Invents Act of 2011.

Judge throws out Allergan patent, slams company's Native American deal
[Joe Mullin/Ars Technica]

(Image: Chris Potter, CC-BY)