Re Be Very, Very Concerned About What Allergan Just Did

["Dave Farber" <farber () gmail com>]

Begin forwarded message:

> From: Gregory Aharonian <greg.aharonian () gmail com>
> Date: September 10, 2017 at 12:47:46 PM EDT
> To: Dave Farber <dave () farber net>
> Subject: Re: [IP] Be Very, Very Concerned About What Allergan Just Did
>
> Dave,
>
> The concerns of Rachel Sachs are quite valid.  But her blog's focus on health care lets even a bigger concern go 
> missing from her commentary.  She writes:
>
>       In short, if repeated and taken to its logical conclusion, this transfer
>       has the potential to prevent any invalidity challenge to any drug
>       patents.
>
> True.  But less true than the following:
>
>       In short, if repeated and taken to its logical conclusion, this transfer
>       has the potential to prevent any invalidity challenge to     ALL
>       patents.
>
> If you read what she wrote, there is nothing really specific to drug patents (except some secondary Hatch-Waxman 
> concerns).  It applies to all patents.  So if the Supreme Court doesn't nullify PTAB IPR challenges - de lure - this 
> Indian tribe tactic nullifies - de facto.  For all patents.  Fun stuff, this patent law.
>
> By "invalidity challenge", she is referring to pre-emptive, declaratory judgment attacks on patents.  Patents can 
> still be challenged once the (Indian tribe) owner sues you in court.  Expensive to fight off, but at least you can 
> try to invalidate (and in the case of idiotic patents, you can collect attorneys fees).
>
> Greg Aharonian
> Internet Patent News Service
>
>
> > On Sun, Sep 10, 2017 at 10:45 AM, Dave Farber <farber () gmail com> wrote:
> >
> >
> >
> > Begin forwarded message:
> >
> > > From: Richard Forno <rforno () infowarrior org>
> > > Date: September 10, 2017 at 10:10:29 AM EDT
> > > To: Infowarrior List <infowarrior () attrition org>
> > > Cc: Dave Farber <dave () farber net>
> > > Subject: Be Very, Very Concerned About What Allergan Just Did
> > >
> > > (c/o KM)
> > >
> > > Be Very, Very Concerned About What Allergan Just Did
> > >
> > > Posted on September 9, 2017 by rachelsachs
> > >
> > > http://blogs.harvard.edu/billofhealth/2017/09/09/be-very-very-concerned-about-what-allergan-just-did/
> > >
> > > Yesterday, it was announced that Allergan had transferred the ownership of the patents on its billion-dollar drug 
> > > Restasis, used for the treatment of chronic dry eye, to the Saint Regis Mohawk Tribe. The Tribe then exclusively 
> > > licensed the drug back to Allergan, in exchange for tens of millions of dollars in both licensing and royalty fees. 
> > > Although it may not sound like it, this transfer is potentially huge news in the drug pricing world. It is also 
> > > extremely complex, and its full implications have yet to be determined.
> > >
> > > Enormous caveat before we begin: I am by no means an expert on tribal sovereign immunity. I may well be wrong here. 
> > > (In fact, I would very much like to be wrong here.) There is little (any?) case law on sovereign immunity’s impact 
> > > in the Hatch-Waxman area, and much of what follows is extrapolated from case law on tribal sovereign immunity both 
> > > in IP and in other contexts, state sovereign immunity in the IP area, and discussions with other law professors. 
> > > Please let me know if this is your area of expertise and you believe I’ve gotten the analysis wrong!
> > >
> > > In short, if repeated and taken to its logical conclusion, this transfer has the potential to prevent any 
> > > invalidity challenges to any drug patents. Would-be generic competitors could not seek to initiate inter partes 
> > > review (IPR) actions before the Patent and Trademark Office (PTO). They could not bring declaratory judgment 
> > > actions in federal court. And – both most importantly and most unclear – they could not bring Paragraph IV claims 
> > > under Hatch-Waxman, preventing generic companies from challenging patents’ invalidity and requiring us all to wait 
> > > until the very end of patent expiration to experience generic competition.
> > >
> > > Here’s why: tribal sovereign immunity claims will bar these suits. Let’s take them one at a time. First, Allergan’s 
> > > stated reason for the transfer is to insulate it from the ongoing IPR action against its patents. Allergan does not 
> > > want to allow the PTO to find its patents to be invalid, and a newly asserted sovereign immunity argument seems 
> > > likely to allow Allergan to dismiss the IPR. State universities whose patents end up in IPRs have successfully used 
> > > this argument, and there is no reason to think it would not work here. This is also the reason that declaratory 
> > > judgment actions of invalidity in federal court will be dismissed. As Professor Mike Carrier states in the New York 
> > > Times’ coverage of Allergan’s transfer, there are reasons to be concerned about this set of implications. (Some 
> > > might also remember that BIO and PhRMA have lobbied for legislation that would insulate their patents from IPR 
> > > challenges. They have been unsuccessful so far, and we might see Allergan’s actions here as one strategy to 
> > > accomplish what they were otherwise unable to do.)
> > >
> > > But it gets worse. Because it seems likely that tribal sovereign immunity would also insulate the tribe from a 
> > > counterclaim of invalidity as part of a Hatch-Waxman Paragraph IV suit. Recall that the usual posture of a 
> > > Paragraph IV suit is as follows: a generic drug company has filed a Paragraph IV ANDA alleging that the innovator 
> > > company’s patents are invalid (for example). The innovator company then sues the generic for patent infringement, 
> > > as permitted by the statute. The generic drug company may then counterclaim for invalidity. If they succeed in 
> > > invalidating the innovator company’s patents, then the generic can come to market earlier than anticipated and help 
> > > bring down drug prices more quickly.
> > >
> > > Except that tribal sovereign immunity should insulate an innovator company from that counterclaim for invalidity. 
> > > This may not be the case for state universities, who have been held to waive sovereign immunity for counterclaims 
> > > by initiating the infringement suit in the first instance. But in a range of contexts, courts have held or 
> > > reaffirmed that even tribes initiating lawsuits are immune from counterclaims. And it does not appear (on its face) 
> > > that Hatch-Waxman has abrogated this sovereign immunity. Allergan has said that the transfer “has no impact on” an 
> > > ongoing ANDA proceeding for its Restasis patents. But as a matter of law, it is not clear why that would be so. 
> > > (For more, see Jake Sherkow’s great Tweetstorm here.)
> > >
> > > < - >
> > >
> > > http://blogs.harvard.edu/billofhealth/2017/09/09/be-very-very-concerned-about-what-allergan-just-did/
> >
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