The attorneys at Allergan deserve a raise after the clever legal maneuvering they employed to dodge a patent challenge. Here’s what happened: Allergan sued a generic drug company, Mylan, for infringing on its biopharmaceutical patent, and Mylan countered by challenging the validity of the patent. Instead of defending its challenged patent, Allergan transferred its patent to a Native American tribe, and then raised the defense of tribal sovereign immunity.
The legal doctrine of sovereign immunity shields Native American tribes from actions brought against them in courts and other judicial proceedings, and, to Mylan’s surprise and dismay, Allergan found a way to maneuver itself behind the proverbial Tatanka Shield. The case was Mylan Pharmaceuticals Inc. v. Allergan Inc., and it reads as a refreshingly honest argument in the nature of “Did we game the system? Yes. Why? Because the IP system is unfair to brand-name drug companies.”
The particular area of the IP system Allergan takes issue with is the IPR procedure—the procedure used by Mylan to challenge Allergan’s patent. IPR stands for inter partes review, and it’s a procedure established in 2011 and intended to curb abusive patent litigation by providing a faster and cheaper administrative forum (as opposed to federal court) for resolving patent disputes. IPR is unfair, the argument goes because it makes it easier for generic drug companies to challenge brand-name drugs under the lower “preponderance of the evidence” standard.
The case has provoked Congress’ interest, with the House Judiciary Committee holding hearings to examine how tribal sovereign immunity is affecting the IP system. And in the judiciary branch of government, the Supreme Court is deliberating on Oil States Energy v. Greene’s Energy to determine whether IPR violates the Constitution by extinguishing private property rights through a non-Article III forum without a jury.
When judging the propriety of Allergan claiming sovereign immunity, it’s worth remembering that Allergan sued Mylan for patent infringement in the first place: Allergan challenged Mylan’s patent while claiming Mylan could not challenge Allergan’s patent. Put differently, Allergan is claiming immunity from the same system it is wielding against others. As Congress scratches its head trying to figure out what to do, reasonable minds may disagree as to whether this gaming of the system is fair play, or a perversion of the IP system.