Court Strikes Down Tribe's Sovereign Shield Against Patent Review

By William Vogeler, Esq. on July 26, 2018 | Last updated on March 21, 2019

A federal appeals court struck down a Native American tribe's claim of sovereign immunity against inter partes patent challenges.

In Saint Regis Mohawk Tribe v. Mylan Pharmaceuticals, the U.S. Federal Circuit Court of Appeals said the United States Patent and Trademark Office acts for the United States as a "superior sovereign." It has the power to review its own grants of patents, the appeals court said.

If Allergan has anything to do with it, however, the battle over inter partes review is far from over.

Battle of the IPR

The war really started in 2016, when Mylan petitioned for review of Allergan's patents for chronic eye treatments. A week before the hearing was to begin in 2017, however, Allergan transferred its Restasis patents to the Saint Regis Mohawk Tribe.

The tribe moved to terminate the proceedings, arguing its sovereign immunity. The patent board denied the motion, and the federal circuit said the company can't use the tribal shield to stop the patent review process.

It is a financial setback because Allergan paid the tribe $17.75 million with a promise to pay $15 million annually for patent protection through its sovereign immunity. The tribe got paid, but Allergan lost.

The financial stakes are much higher, however. According to reports, Allegan stood to make $1 billion annually by protecting its patents from generic manufacturers of its products

Billions to Trillions

Alan Davidson, writing for the New Yorker about the issue, said intellectual property represents more than a third of all value created in the United States. Patents and trademarks will be worth trillions more each year, he said.

The Electronic Frontier Foundation, which filed an amicus brief supporting Mylan in the case, said it was concerned that companies were attempting to "rent sovereign immunity."

"In this case, the tactic was part of an attempt to use bad patents to prop up drug prices for everyone," the organization posted on its blog. "We are glad the Federal Circuit has rejected the tactic."

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