On Monday, October 22, 208, the US Court of Appeals for the Federal Circuit issued another blow to Allergan’s deal with the Saint Regis Mohawk Tribe (“Tribe”) by refusing to reconsider an earlier decision that rejected use of tribal sovereign immunity in inter partes reviews (IPRs). This is the latest setback for Allergan and the Tribe in their efforts to avoid IPRs before the Patent Trial and Appeals Board (“PTAB”).
As a general background, in September 2017, Allergan announced that they entered into an agreement with the Saint Regis Mohawk Tribe (the Tribe) in which Allergan transferred ownership of all Orange Book-listed patents for RESTASIS® (Cyclosporine Ophthalmic Emulsion) 0.05% to the Tribe, while being granted exclusive licenses in the patents related to the product. The patents transferred to the Tribe included U.S. Patent Nos. 8,629,111; 8,633,162; 8,642,556; 8,648,048; 8,685,930 and 9,248,191. RESTASIS® is an important product for Allergan since it generated around $1.5 billion in 2017. By transferring ownership of the RESTASIS® patent portfolio to the Tribe, Allergan and the Tribe hoped to dismiss the ongoing IPRs of the RESTASIS® patents based on the Tribe’s status of being a recognized sovereign tribal government to which sovereign immunity applies.
Thus far, however, Allergan’s strategy to avoid IPR challenges has faced significant hurdles. In February 2018, the PTAB rejected the attempt to dismiss based on tribal sovereign immunity, finding that Allergan retained ownership in the patents and the Tribe retained nothing more an “illusory or superficial right” to sue for infringement of the challenged patents. According to the PTAB, “[i]n view of the recognised differences between the state sovereign immunity and tribal immunity doctrines, and the lack of statutory authority or controlling precedent for the specific issue before us, we decline the tribe’s invitation to hold for the first time that the doctrine of tribal immunity should be applied in IPR proceedings.”
In July 2018, the Federal Circuit upheld the PTAB’s decision, concluding that tribal sovereign immunity cannot be asserted in IPRs, and therefore cannot be used to dismiss the IPRs filed against Allergan.
A month later, in August 2018, Allergan and the Tribe requested a panel rehearing and an en banc rehearing. This request was denied on Monday.
Despite the recent denial, Allergan and the Tribe can still appeal to the U.S. Supreme Court.
Allergan’s controversial move to circumvent IPRs in an effort to stave off generic drug entry adds fuel to the ongoing debate over IPR proceedings. We will keep you informed of developments related to IPRs as they occur.
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