On September 8, 2017, the multi-billion dollar pharmaceutical company Allergan announced that it “sold” its patents relating to its eye drops drug “Restasis” to the Saint Regis Mohawk Tribe. But this was not a usual “sale.” The Tribe doesn't appear to have paid anything in exchange for becoming the legal owner of Allergan's patents. Instead, Allergan paid the Tribe $13.75 million, and also agreed to pay the Tribe up to $15 million more each year in exclusive licensing fees.
Last week, EFF and Public Knowledge explained to the Patent Office how Allergan and the Tribe’s deal doesn’t mean Allergan’s bad patents can’t be challenged.
The reason that Allergan and the Tribe engaged in this deal is not a secret. Both Allergan and the Tribe [PDF] readily admit the deal was done to try to prevent Allergan’s patents from being revoked through a Patent Office procedure known as “inter partes review.” Inter partes review allows any member of the public to challenge a patent as improperly granted based on the fact that what the patent claims as an invention was known to the public, or was an obvious change from information and innovation already held by the public.
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Shortly after announcing the deal, the Tribe asked the Patent Office to end the proceedings, saying that since the Tribe owns the patents, the Patent Office has no authority to reconsider their legitimacy without the Tribe’s consent. The generic companies have opposed this motion on various grounds, arguing that the proceeding can continue. The Patent Office, perhaps in recognition of the significant controversy generated by the Allergan-Tribe deal, asked the public to weigh in as to whether the proceeding needed to be terminated.
On November 30, 2017, EFF and Public Knowledge submitted a brief arguing that the Patent Office has all the authority it needs to continue the inter partes review proceeding, despite the Tribe’s sovereign immunity. We argued that the proceeding was not one that required the Tribe’s presence at all, meaning sovereign immunity had no application. We also suggested that the Patent Office consider asking its question in a more accessible proceeding, so that more voices could be heard.
Fehlner’s comments come at a time when there are acute political controversies surrounding pharmaceuticals patents and market exclusivity in the US. Allergan’s recent attempt to circumvent the inter partes review patent invalidity process by transferring its Restasis rights to a Native American tribe has provoked public criticism, and even attracted censure from within the industry: Regeneron CEO Leonard Schleiffer last week describing the move as “nuts”, because it broke Allergan’s ‘social contract’ and made it look bad to the public.
November PTAB news included the lowest petition filing since January 2016, oral arguments at the Supreme Court, amicus briefing on whether tribal ownership immunises a patent from IPR challenges, guidance on motions to amend, new procedures for remands from the Federal Circuit, and an increase in fees
In November, 112 Patent Trial and Appeal Board petitions were filed. This consisted of 109 inter partes review (IPR), one covered business method (CBM) and two post-grant review (PGR) petitions.
The court here does not decide whether preclusion would also apply if the original obviousness rejection was based upon a PTAB decision that had not been appealed to the Federal Circuit.
Although losing on Claim 25, the Mouttet’s appeal was important because it forced the USPTO to drop its PTAB indefiniteness holding. The PTAB held that his claims 35-40 were indefinite because they merged statutory classes. On appeal, though, the solicitor conceded that the PTAB judgment was incorrect. The court agreed. The formerly problematic claim is written as a “35. A method of … using the processor of claim 1 … [to perform a series of steps].”
Note here that the PTAB had also substantially sided with Mouttet – reversing all of the examiner’s obviousness rejections.