Notable Case: Allergan, Inc. v. Teva Pharmaceuticals USA, Inc. et al 2:15-cv-01455-WCB

Notable Case: Allergan, Inc. v. Teva Pharmaceuticals USA, Inc. et al 2:15-cv-01455-WCB

Patent law does not exist in a vacuum. Patent law is a very specific field of law that not many attorneys practice, but patent law exists along side all other laws. In all nations, some laws take precedence over other laws.  For instance the statute of limitations sets a deadline for filing a lawsuit, if you do not file a lawsuit within the statute of limitations, you lose.  Even if the law and the facts are in your favor and not disputed, if you do not go to court within a certain time, the court must dismiss the case.

Another similar law which takes precedence over other laws is sovereign immunity.  Sovereign immunity is a legal doctrine by which a nation or a state cannot commit a legal wrong and is immune from civil suit or criminal prosecution. It is a principle of international law which exempts a sovereign state from the jurisdiction of foreign national courts.  One nation cannot be forced into the court of another nation.

Within the United States there are sovereign nations of Native Americas.  These groups are frequently called tribes.  The relationship between the tribes and the United States is typically respectful but complex.  Tribes can claim sovereign immunity, which means United States Courts will typically dismiss cases in which a tribe is named as a defendant.  The tribes can also claim sovereign immunity from administrative agencies.

The Patent Trial and Appeal Board is an administrative agency of the United States Patent and Trademark Office which decides issues of patentability. It was formed on September 16, 2012 as one part of the America Invents Act.  One of the functions of the The Patent Trial and Appeal Board is to conduct inter partes reviews.  An inter partes review is a procedure for challenging the validity of a patent. The Patent Trial and Appeal Board can invalidate patents that have been granted if the patent is invalid.  Prior to the implementation of inter parties review, a lawsuit would need to be brought in federal court to challenge the validity of a patent.  A federal court and the Patent Trial and Appeal Board would use the same standard for review to determine if a patent is valid, but because the Patent Trial and Appeal Board is an administrative agency it is considered easier to challenge a patent through inter partes review rather than bringing a lawsuit in federal court.

This brings us to Allergan, Inc. v. Teva Pharmaceuticals.  In that case Allergan had a successful eye medicine which was patented.  Allergan sued a number of companies that made eye medicines claiming patent infringement.  The defendants asked the judge in the patent infringement lawsuit to invalidate the patent.  At the same time the defendants asked the Patent Trial and Appeal Board to invalidate the patent.

Someone at Allergan, or Allergan’s attorney’s office, thought the patent could be shielded from review by transferring it to a tribe.  The tribe would then claim that since the patent was the property  of the tribe it was immune from review by administrative agencies or courts in the United States.

In September 2017 Allergan transferred its eye medication patents to the Saint Regis Mohawk Tribe in New York.  The Tribe was paid $13 million to take the patents and could earn a royalty of up to $15 a year after that. The tribe filed a motion to dismiss  in the inter partes review with the Patent Trial and Appeal Board based on the sovereign immunity of the tribe.  The tribe did not claim sovereign immunity in the patent infringement case in federal court.

In October 2017 the judge in Allergan, Inc. v. Teva Pharmaceuticals found that the patent was invalid.  The Patent Trial and Appeal Board case was rendered moot because the federal court found that the patent was invalid.  In the judge’s opinion he gave a strong warning that “sovereign immunity should not be treated as a monetizable commodity that can be purchased by private entities as part of a scheme to evade their legal responsibilities.”  But the judge did not directly rule on whether the tribe could claim sovereign immunity for the patent because the tribe did not make the claim in his court.

Given the opinion of the judge it is unlikely that other companies will attempt to use tribal sovereign immunity to shield their patents from judicial or administrative review in the future.

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