Tribe taking steps to ‘ramp up’ drug patent business

The Native American tribe wrapped up in litigation with generic pharmaceutical companies is trying to prove that its arrangement with Allergan (NYSE:AGN) reflects a legitimate move to boost its economy, according to court documents.

The St. Regis Mohawk Tribe of New York found itself it the middle of a controversial deal this year after it agreed to license the patents for a dry eye drug, Restasis, from Allergan in exchange for payments.

Both Allergan and the tribe have argued that the tribe’s sovereign immunity render the drug’s patents outside of the U.S. Patent & Trademark Office’s power of review.

Generic pharma companies, including Mylan (NSDQ:MYL), condemned the deal and challenged it in federal court, saying that the arrangement revealed Allergan’s “duplicitousness” towards the patent system.

This week, the tribe argued that “contrary to Mylan’s suggestion that the tribe is simply collecting a check for immunity rental, the tribe has taken concrete steps to ramp up its patent business. This is an enormous task and the tribe has owned the Restasis patents only since September 2017, but the Tribe, through its collection of royalties from Allergan, now has the resources to implement its economic development plan.”

That plan includes developing new uses for cyclosporin and potential investments in other drugs, the tribe wrote.

The St. Regis Mohawk tribe received $13.8 million upfront from Allergan, according to court documents, and is slated to receive an additional $15 million each year as long as the deal is in place.

The tribe’s lawyer pointed out that this is not the first time companies have argued that Native Americans were attempting to circumvent the law.

“…when it began, Indian gaming was considered illegal by many, and the same protestations were made – that tribes needed to be stopped from flouting the law,” the tribe argued. “That view changed once it became clear that tribes were engaged in a legitimate effort to generate revenue and, as sovereigns, they had the choice whether to engage in gaming.”

In February, the USPTO declared that sovereign immunity does not shield tribes from patent challenges. Allergan and the tribe have since asked the Federal Circuit to intervene and stop the board from reviewing its Restasis IP.

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