Given the frequency with which Native American tribes have had promises broken by the federal government you'd think people would never have thought the prospect of assigning a patent to a tribe so as to preclude some kind of review process would never have been considered a good idea to begin with.
Well, you can learn something new every day.
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Part of the rationale behind the implementation of the PTAB and a new IPR procedure was to address the heavy volume of patent litigation in the courts brought by non-practicing entities (“NPEs”) seeking to obtain revenue from patent portfolios they obtained and were seeking to monetize, essentially providing an alternate mechanism for post-grant review of patent claims (albeit on limited grounds based upon prior art). Since its implementation, IPRs in the PTAB have resulted in far more patents being completely invalidated (as opposed to just some, or none, of the claims in the patents at issue), becoming a weapon of choice to patent defendants seeking to invalidate the patents being asserted against them. Without question, IPRs have had a significant impact on patent practice and patent portfolios.
In yet another effort to game the system, ever-creative legal minds have found a way to theoretically bypass PTAB scrutiny by placing patents in the hands of Native American tribes in exchange for royalties, using sovereign immunity to evade PTAB jurisdiction. For example, Irish pharmaceutical company Allergan PLC recently transferred the patents to its popular eye drug Restasis to the Saint Regis Mohawk tribe in the State of New York, with an exclusive grant-back license to Allergan for an upfront fee and ongoing royalty. Allergan has been quite forthcoming that its rationale for doing so has been to “ strengthen the defense” of its Restasis patents in IPRs in the PTAB. [emphasis added]
While hiding behind the shield of sovereign immunity is an intriguing strategy, state versus tribal sovereign immunity are very, very different things. Native American tribes are subject to sovereign immunity through congressional action, while the states enjoy sovereign immunity under the 11th Amendment of the U.S Constitution. Amending the Constitution is far less likely than an act of Congress, and I wouldn’t bet on a patent protection strategy that is subject to congressional whim. In fact, Congress has opened an investigation into the Allergan transfer, and Senator Claire McCaskill has already submitted (albeit hastily) a bill in the Senate to prohibit transfers to Native American tribes that are structured to take advantage of tribal sovereign immunity. Given the tumultuous times in Washington, D.C. as of late, it’s good to remember: What Congress giveth, Congress can take away.