In a closely watched case, a U.S. patent appeals board ruled that a Native American tribe cannot claim sovereign immunity in order to avoid a certain type of patent challenge. The decision is a blow to Allergan (AGN), which last fall transferred patent rights to one of its biggest-selling medicines to the St. Regis Mohawk Tribe in hopes of thwarting generic competition.
Procedurally, Allergan sought to avoid inter partes reviews, a type of patent challenge that has vexed drug makers since going into effect six years ago, because these are easier and faster to file than patent lawsuits. At the time it transferred patent rights to its Restasis eye treatment, which last year generated more than $1.4 billion in sales, Allergan was facing a conventional patent challenge in a federal court.
But the drug maker was also facing IPR challenges from some of the same generic companies, which it decried as “double jeopardy.” So Allergan struck a deal with the tribe in the belief that a sovereign tribal government has immunity from these types of challenges. And the St. Regis tribe sought to dismiss the IPR challenges before the U.S. Patent Trial and Appeal Board.
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