ALLERGAN PARTNERS WITH TRIBE TO FIGHT IPR BY STEVE USDIN
In an effort to create a shield against patent challenges under the U.S. Patent and Trademark Office’s inter partes review process, Allergan plc (NYSE:AGN) announced Friday that it had transferred ownership of six patents covering dry eye drug Restasis cyclosporine to the Saint Regis Mohawk Tribe. Citing its sovereign immunity as a recognized tribal government, the tribe is filing a motion to dismiss ongoing IPR challenges to the patents, Allergan reported.
Allergan said its action is intended to eliminate the IPR challenge while a district court adjudicates cases that generic companies have brought against its patents. The biopharmaceutical industry has launched broad attacks against the IPR process, contending that it is unfair and biased against the rights of patent holders (see BioCentury, May 18, 2015).
The IPR challenges were filed by Mylan N.V. (NASDAQ:MYL; Tel Aviv:MYL).
Brent Saunders, Allergan’s president and CEO, said on Twitter that the company’s transfer of patents to the tribe is consistent with the company’s social contract. “Protecting IP from double jeopardy of IPR” is consistent with the company’s commitment to invest and innovate, he wrote (see BioCentury, July 21).
“Our patents extend into 2024. The federal court system as per the Hatch Waxman regime are [determining] and will determine if it will be otherwise,” he added in a second tweet.
Allergan is suing four generic companies -- Mylan; Teva Pharmaceutical Industries Ltd. (NYSE:TEVA; Tel Aviv:TEVA); Akorn Inc. (NASDAQ:AKRX); and the Inno Pharma division of Pfizer Inc. (NYSE:PFE) -- in the U.S. District Court for the Eastern District of Texas to prevent them from marketing generic versions of Restasis.
Allergan has settled litigation and IPR challenges related to Restasis with at least three entities, including Apotex Inc. (Toronto, Ontario) in 2015, TWi Pharmaceuticals Holding Inc. (TPEx:4180) in January and Family Care Ltd. last month.
Allergan stated that the tribe approached the company to propose the arrangement. The pharma noted that the Patent Trial and Appeal Board (PTAB) which administers IPR challenges, has dismissed IPR proceedings against two universities based on their claims of sovereign immunity.
Patent attorneys had mixed predictions about the chances that Allergan’s strategy would be successful, but all of the attorneys contacted by BioCentury agreed that if it works, it will be widely emulated.
“I’m skeptical about the strategy,” Matthew Kreeger, a partner at Morrison & Foerster, told BioCentury. He pointed to differences between the sovereign immunity cases involving universities and Allergan’s situation, and predicted that the PTO will fight Allergan. “The cases the PTO reviewed where it found sovereign immunity were state-owned universities, and in both cases there were no pending district court cases. Here they want to keep the district court case going with Allergan as patentee and at the same time tell PTAB that the patents have been transferred” to the tribe.
Kreeger said if he were working for Mylan, he “would say that by obtaining patents in the middle of a dispute they abrogated their sovereign immunity.”
Kreeger added, “as a policy matter, it would be pretty disruptive if any patent holder could pull a maneuver like this. I think the Patent Office will look for ways to make sure this strategy doesn’t get out of hand.”
Writing on the patently-o blog, Dennis Crouch noted, “one question will be whether the ownership structure creates a sham that can be pierced as if a fraudulent corporate veil.” Crouch is an associate professor at the University of Missouri School of Law.
On the other hand, Kurt Karst, an attorney at Hyman, Phelps & McNamara, is more confident that Allergan’s strategy will work. “I think they’ve got a very interesting argument,” he said. Based on prior cases, he said, “this thing may very well have legs.”
Karst and Jacob Sherkow, an assistant professor at the New York Law School, also said the strategy could be adopted by other patent holders. “If it works, why not? It’s a fantastic opportunity for brand manufacturers and tribes,” Sherkow told BioCentury.
Sherkow said he thinks the PTAB will dismiss the IPR challenges to Allergan’s patents based on the sovereign immunity claim.
In addition to eviscerating IPR, Sherkow said the strategy could upend the Hatch-Waxman Act. It might be possible for patent holders to use a sovereign immunity defense as a shield against patent invalidity litigation in federal courts, he said. “If this strategy is widely deployed, it has the ability to unravel a large portion of the usual order of business of Hatch-Waxman.”
Market Data 
Markets 
AI
