- September 13, 2017
- Posted by: Brennen Baylor
- Category: Blog
Allergan and the Saint Regis Mohawk Tribe have announced that the Saint Regis Mohawk Tribe [“the Tribe”] is now the owner of all Orange Book patents related to Allergan’s best-selling Restasis® eyedrops1, which are widely prescribed to treat patients with chronically dry eyes. The Restasis patents are currently being challenged in an inter partes review2 instituted by Mylan after Allergan sued Teva Pharmaceuticals, InnoPharma Inc., Pfizer, Inc., Mylan, and other pharmaceutical companies in the Eastern District of Texas, alleging that the defendants’ proposed generic eyedrops would be infringing.
Allergan and the Tribe have entered into an agreement whereby Allergan will pay the Tribe $13.75 million to claim that the patents assigned to the Tribe may not be challenged due to the Tribe’s sovereign immunity. To continue to manufacture and sell the patented eyedrops, Allergan will pay the Tribe $15 million annually to license back the patents for Allergan’s use until the patents’ expiration. Sales of Restasis account for more than $1 billion in annual revenue for Allergan, rendering the payments to the Tribe essentially negligible.
This strategy of transferring the challenged patents to the Tribe finds its basis in a Patent Trial and Appeal Board decision3 from earlier this year in which the Board decided that states’ sovereign immunity applies in inter partes reviews. Furthermore, the Supreme Court has ruled in favor of tribes over states, establishing that tribes’ immunity is stronger than that of states. In combination, the Board and the Supreme Court may have built a sanctuary for patents that Allergan wishes to insulate from PTAB review.
It remains to be seen whether this landmark deal will prompt a trend of assigning valuable, vulnerable patents to Native American tribes, or whether Allergan will be successful in this approach long-term. However, Allergan may have just drafted a blueprint for an escape hatch out of inter partes or post grant reviews.
1 U.S. Patent Nos. 8,629,111; 8,633,162; 8,642,556; 8,648,048; 8,685,930; and 9,248,191, which will expire August 27, 2024
2 Patent Trial and Appeal Board case numbers IPR2016-01127, IPR2016-01128, IPR2016-01129, IPR2016-01130, IPR2016-01131 and IPR2016-01132.
3 Covidien LP v. University of Florida Research Foundation Inc.; PTAB case numbers IPR2016-01274, IPR2016-01275 and IPR2016-01276.