Allergan Transfers Restasis Patents to Native American Tribe


When it comes to intellectual property holdings, many portfolio owners have utilized a number of tactics, legal maneuvers, and strategies to protect their intellectual property assets.  From holding companies to shell corporations, asset owners may have a variety of reasons as to why they want their prize assets to be held under a different legal name. For example, intellectual property holding companies are commonly used for a variety of purposes that include, licensing arrangements, tax reasons, and liability issues.  Recently, however, Allergan, the pharmaceutical giant, made headlines by transferring their Restasis Patents to the Saint Regis Mohawk Tribe earlier this year.

Legal experts theorized that Allergan transferred patents regarding Allergan’s dry-eye medicine “Restasis” in order to avoid administrative challenges to the patents from competitors.  Now, those theories have been proven correct because the Saint Regis Mohawk Tribe has filed a motion to dismiss a case brought by an Allergan-competitor, Mylan, that challenges the patents.  Mylan is currently asking the U.S. Patent Trial and Appeal Board to invalidate Allergan’s patents regarding Restasis, and in response, the Saint Regis Mohawk Tribe filed a motion last week to dismiss the case on the grounds that the U.S. Patent Trial and Appeal Board has no legal jurisdiction over the tribe.

The legal case between Allergan and Mylan has been going on since late 2016 when Mylan filed a motion before the U.S. Patent Trial and Appeal Board to invalidate Allergan’s Restasis patents.  Having Allergan’s patents invalidated would pave the way for Mylan to then launch their own generic version of the medicine.

In the Saint Regis Mohawk Tribe filings, however, the tribe noted that it cannot be sued in an administrative court unless it expressly waives its immunity or the U.S. government itself abrogates the immunity of the tribe.

Mylan has called Allergan’s transfer of the Restasis patents a sham transaction, noting that the tribe will receive payment of $13.75 million in one lump sum with additional annual royalties of approximately $15 million a year.  The transaction has since come under further scrutiny when U.S. Senator Sherrod Brown weighed in on the transaction, questioning why Allergan would pursue such a transaction if not simply to keep the price of Restasis high.  Brown had suggested that Allergan is exploiting legal loopholes because Restasis has been such a lucrative product, having produced over $1.5 billion in revenue last year alone.

Allergan has countered that they only intend to use the Saint Regis Mohawk Tribe’s sovereign immunity to shield the Restasis patents from administrative review by the U.S. Patent Trial and Appeal Board, calling the board a flawed forum for patent review.  As a compromise, Allergan has stated that they have no intention of invoking tribal immunity if the lawsuit proceeds to U.S. federal courts.

Regardless of whether Allergan’s efforts succeed, it is important to note that clients and competitors alike have many legal maneuvers and business transactions available to address liability, asset holding, and tax concerns.  In order to best protect one’s intellectual property assets, companies should meet with experienced intellectual property counsel in order to tailor solutions that will leverage their assets in the most lucrative and legally-secure manner possible.

For more information on this topic, please visit our Patent Transaction and Licensing service page, which is part of our Patent Practice.

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