STAT, July 20, 2018
Ed Silverman

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After months of anticipation, a federal appeals court ruled Friday that a Native American tribe cannot claim sovereign immunity in order to avoid a certain type of patent challenge. The decision is another blow to Allergan (AGN), which last fall famously transferred patent rights to one of its biggest-selling medicines to the St. Regis Mohawk Tribe in hopes of thwarting generic competition.

In reaching its decision, the court upheld a ruling issued earlier this year by the U.S. Patent Trial and Appeal Board, which handles 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.

The case began nearly a year ago, when Allergan transferred patent rights to its Restasis eye treatment, which generated more than $1.4 billion in sales in 2017, because the company was facing a conventional patent challenge from several erstwhile generic rivals in a federal court. But the drug maker complained it faced “double jeopardy,” since it also faced IPR challenges from some of the same generic companies.

So Allergan struck a deal with the St. Regis tribe in the belief that a sovereign tribal government has immunity from IPR challenges. And the St. Regis tribe subsequently sought to dismiss the IPR challenges before the patent board, which last February decided that tribal immunity does not apply to IPR proceedings. [...]

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