Allergan Assigns Patents to Native American Tribe to Avoid Validity Challenge

What will those lawyers think of next? In one of the most surprising patent strategies ever, the Irish drug company Allergan has assigned six patents on its top-selling dry eye drug Restasis to the Saint Regis Mohawk Tribe of upstate New York, which is one of the colonial-era Iroquois Nations. The federally recognized tribe is now the owner of the patents, with Allergan having taken back a license to exploit them. The purpose of the transfer is to take advantage of the tribe’s claim to “sovereign immunity,” under which an Indian tribe (the usual legal term), as a sovereign nation, is immune from being sued unless it consents or Congress abrogates its immunity. Allergan’s hope is that would-be generic competitors will be prevented from challenging the validity of the patents either in federal court or through the U.S. Patent & Trademark Office’s inter partes review process.

The idea apparently had its genesis in a decision by the USPTO’s Patent Trial and Appeal Board in a case involving an information technology patent held by the University of Florida. The PTAB held that the university, as an agency of the sovereign state of Florida, was immune to an inter partes challenge to the patent’s validity. Although the PTAB is an administrative body rather than a court, sovereign immunity is usually deemed to extend to “quasi-judicial proceedings,” which accounts for its application in the Florida case.

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Filed under Patent Litigation, Patents & IP, Pending Regulation