Allergan (NYSE:AGN) was dealt a major blow yesterday after a Texas judge ruled that claims to a number of patents for its dry eye drug, Restasis, were invalid due to obviousness. The ruling opens the door for generic versions of the drug that accounted for nearly 10% of Allergan’s revenue last year.
The decision came in a suit involving generic drugmakers like Mylan (NSDQ:MYL), which celebrated the ruling as a push back against Allergan’s recent move to transfer its Restasis patents to a Native American tribe.
“We couldn’t be more pleased with today’s federal court ruling invalidating the Restasis patents,” Mylan CEO Heather Bresch said in prepared remarks. “For decades, our investments and perseverance continue to pay off as we have led the charge in challenging the unnecessary roadblocks often put up by brand pharmaceutical companies, whether it’s through the regulatory pathway or around its intellectual property, which often delay access to affordable generic medicines to patients.
“We look forward to continuing to work with the FDA to expeditiously bring our more affordable, generic Restasis product to patients.”
Last month, Allergan made a deal with the St. Regis Mohawk Tribe in New York to transfer its Restasis patents in an attempt to halt any review by the U.S. Patent and Trademark Office. The tribe agreed to license the patents exclusively to the company in exchange for payments.
Both parties have argued that the tribe’s sovereign immunity render the patents outside of the trademark office’s power of review.
The deal struck a nerve around the pharmaceutical industry and with politicians. Sen. Claire McCaskill (D-MO) has since drafted a bill and a committee in the House of Representatives is investigating the deal.
In his decision yesterday, federal judge William Bryson wrote that “sovereign immunity should not be treated as a monetizable commodity that can be purchased by private entities as part of a scheme to evade their legal responsibilities.”
Mylan echoed the judge’s statement, criticizing Allergan for its use of the tribe’s sovereign immunity.
“The admitted purpose of the Allergan/Saint Regis Mohawk Tribe transaction was to employ Native American sovereign immunity to cut-off pending IPR proceedings before the Patent Trial and Appeal Board and to prevent the PTAB from canceling Allergan’s invalid patents,” the company wrote. “The court’s decision emphasized the duplicitousness of Allergan’s changing course with respect to the Patent Office, explaining that the company ‘invoked the benefits of the patent system’ but now seeks ‘the right to continue to enjoy the considerable benefits of the U.S. patent system without accepting the limits that Congress has placed on those benefits.'”
Allergan said in a statement that it plans to appeal the Texas judge’s decision.
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