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8 June 2018Americas

BIO 2018: Allergan-tribe deal just the start, says former USPTO director

“The Saint Regis Mohawk Tribe issue is not unique to just life sciences—we’re likely to see it across the board. There’s likely been other transfers that are not yet public information,” said Teresa Rea, vice-chair of Crowell & Moring’s IP group and former director of the US Patent and Trademark Office (USPTO).

She was speaking on the panel “State Universities, Indian Tribes, and Biotech Patent Law” during the 2018 BIO International Convention.

Allergan paid the Saint Regis Mohawk Tribe $13.75 million to acquire Restasis in September last year. The tribe then filed a motion to dismiss the inter partes reviews (IPRs) of the patents based on the tribe’s sovereign immunity from IPR challenges. The challenges were filed by generics companies including Mylan.

What followed is an incredibly closely-watched case.

In February, the PTAB found the tribe had not retained anything more than an “illusory or superficial right” to sue for infringement and that the proceedings could continue without the tribe’s participation in view of “Allergan’s retained ownership interests in the challenged patents”.

Rea said that the tribe had complained of ‘panel stacking’, where judges are added to a panel to achieve a particular outcome.

She added that because tribal sovereign immunity in IPRs was a hot issue, the PTAB wants to make sure it gets it right.

“The PTAB tries to expand panels to get as much consensus and consistency as possible, not to request a specific outcome but to look it from as many perspectives as possible,” she said.

The tribe and Allergan have appealed to the US Court of Appeals for the Federal Circuit. Oral arguments were heard on Monday, June 4.

Kevin Noonan, partner at McDonnell Boehnen Hulbert & Berghoff, listened to a recording of the arguments. Speaking alongside Rea, he said that Circuit Judge Jimmie Reyna asked the government advocate whether it was appropriate for the PTAB to decide constitutional questions.

“In the context of the questioning, I took that as an indication that he thought there was some overreach,” he added in a discussion with LSIPR after the session.

According to Melody McCoy, staff attorney at non-profit organisation Native American Rights Fund, who also spoke on the panel, the problem with the PTAB’s decision was that the board was looking for a statutory basis for tribal sovereign immunity, which was an “incorrect analysis”.

“Tribal sovereign immunity is presumed based on the status of tribes in federal law, which has its origins in common law,” said McCoy.

She added: “It’s also clear that Congress can abrogate sovereignty. The question should have been has Congress done that?”

“All of Indian country really took issue with what the PTAB did,” McCoy claimed.

In November last year, the House of Representatives’ Judiciary Committee’s subcommittee on IP called a hearing on the issue of IP rights being owned by entities that claim sovereign immunity.

McCoy noted that Darrell Issa, chairman of the subcommittee, made it clear that if Congress is going to act to abrogate sovereign immunity from IPRs, immunity would be abrogated for state institutions and tribes.

“For several months, he has been saying he’s going to release a draft or introduce a bill but his staff have said nothing. My sense is that he can’t get the support he needs to do the dual damage.”

In the session, Carl Gulbrandsen, emeritus managing director of the Wisconsin Alumni Research Foundation, the patent management organisation for the University of Wisconsin Madison, provided the perspective of public universities.

“Talking to directors of public universities’ technology transfer offices, they want to avoid a Saint Regis-type situation. They don’t want federal legislation as they could tamper with the Bayh-Dole Act.”

Passed in 1980, the Act jump-started a surge of technology transfer activity. Before its implementation, IP generated from federal funding was owned solely by the government.

And although IPRs are less expensive than court trials, if an IPR is brought against a university, it’s likely to cost between half a million and million dollars, and “public universities just don’t have the budget”, claimed Gulbrandsen.

Randy Kubetin, managing editor of Bloomberg Law, moderated the session.

The 2018 BIO International Convention finished yesterday, June 7.

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Americas
6 June 2018   Why has the US Supreme Court never granted certiorari on the issue of differing standards required to prove patent invalidity at district courts and at the US Patent and Trademark Office (USPTO)?
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8 June 2018   Sometimes the pharmaceutical industry is putting in place barriers to generic makers’ ability to get access to and samples of drugs, according to Scott Gottlieb, commissioner of the US Food and Drug Administration.