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Federal Court rejects sovereign immunity in Allergan – Saint Regis Mohawk Tribe patent case

 


In a unanimous decision, the United States Court of Appeals for the Federal Circuit found in a 3 to 0 decision that the inter partes (Latin for ‘between the parties’) review process is closer to an “agency enforcement action” like that of a complaint brought by the Federal Trade Commission of the Federal Communication, than that of a regular lawsuit.

Inter partes (IPR) is a process that allows anyone to challenge a patent’s validity at the United States Patent and Trademark Office

This decision rejects the legal claim that ‘sovereign immunity’ as defined and argued by the SRMT can act a shield for Allergan’s patent on Restatis and that it cant be sued. The Federal Circuit didn’t agree, noting that because of the patent office has the final executive authority to begin or decline an IPR process “it is because a politically accountable, federal official has authorized the institution of that proceeding.” Meaning an IPR isn’t a lawsuit and with no lawsuit there can be no sovereign immunity.

The theory was, essentially, that because the Mohawk Tribe has sovereign immunity, it can’t be sued.

According to arsTechnica on July 20, 2018, Mylan issued this statement from CEO Heather Bresch, “This win is a victory in our ongoing efforts to stop patent abuses by brand companies and to help drive access to more affordable medicine. Today’s ruling reaffirms that Allergan’s attempt to leverage the Saint Regis Mohawk Tribe for patent protection represents another inappropriate tactic to delay the availability of generic medicines for patients who need them.”

The Saint Regis Mohawk Tribe, Allergan Inc. v. Mylan Pharmaceuticals et al, began in September 2015 when Allergan, a pharma company, sued rival Mylan, claiming that Mylan’s generics infringed on Allergan’s dry eye treatment known as Restasis.

In 2016, Mylan initiated the IPR. Allergan, in an attempt to stop IPR a strange deal, transferring ownership of the six Restasis-related patents to the Saint Regis Mohawk Tribe.

As part of that deal between Allergan paid $13.75 million to the tribe, with a promise of $15 million in annual payments if the patents were upheld. According to The New Yorker, Allergan stood to make $1 billion annually for its monopoly product.

The Mohawk Tribe attempted to end the IPR, citing sovereign immunity, which was denied. The tribe struck at least one other similar deal with a firm known as SRC Labs, which sued Amazon and Microsoft.

Due to the July 20 ruling, Mylan’s IPR process will now go forward.

The three-judge panel concluded: “The Director’s important role as a gatekeeper and the Board’s authority to proceed in the absence of the parties convinces us that the USPTO is acting as the United States in its role as a superior sovereign to reconsider a prior administrative grant and protect the public interest in keeping patent monopolies ‘within their legitimate scope.’”

Allergan can now choose to appeal further to the Supreme Court of the United States, which only agrees to hear a tiny percentage of cases.

The SRMT offered this statement, “The Saint Regis Mohawk Tribe is very disappointed in the ruling. While the Court acknowledged the Tribe has sovereign immunity, the court took the position that an IPR is controlled by the United States, against whom the Tribe cannot assert immunity, and not private parties. We fundamentally disagree that this is an action of the United States. The Tribe is reviewing the decision and consulting with our attorneys. We will continue to work on other innovative projects that have come out of this initiative which are not impacted by this decision.”

 

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