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Conferred immunity in IPR

Why Allergan’s purchase of sovereign immunity from an Indian tribe could end IPR

The outcome of Allergan plc’s gambit to shield its Restasis cyclosporine patents from inter partes review could determine the fate of the IPR system and upset the balance of power between generic and brand drug companies under the Hatch-Waxman Act.

By transferring rights to six patents for the dry eye drug to the Saint Regis Mohawk Tribe in a Sept. 8 deal, Allergan is trying to buy access to the tribe’s sovereign immunity. On Sept. 22, the tribe filed a motion asking the U.S. Patent and Trademark Office’s Patent Trial and Appeal Board (PTAB) to dismiss an IPR challenge brought by Mylan N.V. in 2016.

Reactions from the public, the media and lawmakers when the deal was announced Sept. 8 were predictably swift and angry, as the industry already faces criticism of anticompetitive tactics and concern about the high cost of drugs.

“This move rips off consumers who need these drugs and closes the market to innovative new generics, and we can’t let this go-around become the new normal,” Sen. Sherrod Brown (D-Ohio) said in a statement provided to BioCentury.

Allergan Chairman, President and CEO Brent Saunders, who has championed the concept of the drug industry’s contract with society, defended the maneuver as an ethically sound defense of the right to a fair process for adjudicating patent validity.

His interpretation of the social contract, widely publicized as a promise to cap price increases, actually rests on shared obligations: of industry to develop and ensure access to medicines, and of society to provide incentives and regulatory protections for innovation.

He argues Congress violated the social contract by creating IPR, so Allergan and other companies should do what they can to evade IPR.

“The social contract is a two-way street,” Saunders told BioCentury. “We need to be able to rely on the rule of law and the predictability of the patent system to be incentivized to invest in innovation and meet the social need.”

“We can’t let this go-around become the new normal.”

Sherrod Brown (D-Ohio)

He also pointed out that, under the deal, the tribe has agreed not to use

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