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US Congress Investigates Patent 'Gifts' That Evade Inter Partes Review (arstechnica.com)
AnalogDiehard writes: Congress created the Inter Partes Review (IPR) in 2012 within the U.S. Patent Office Patent Trials and Appeals Board (PTAB) as a faster and cheaper way to challenge and invalidate bad patents. The IPR expense is a fraction of the cost of a multimillion dollar patent court trial; it is loved by patent challengers and hated by patent owners. The pharmaceutical company Allergen has exploited a novel tactic to evade the IPR process: they hand them to a Native American Indian tribe for safekeeping. Under the arrangement, the tribes earn millions in royalties as long as the patents are valid, they license them back to Allergan, and the patents under the tribes' ownership is immune from lawsuits via sovereign immunity. Under the colonial-era concept of "sovereign immunity" which is codified in the 11th amendment, certain groups like states, universities, and tribes are immune from lawsuits, thus the drug patents are shielded from the IPR process leaving only a full blown multimillion dollar court trial for generic drug companies. This tactic is also attracting the attention of non-practicing entities -- the polite term for "patent trolls" -- and one such NPE company has already exploited sovereign immunity with the intention to sue Apple for infringement.
But court cases have limited the scope of sovereign immunity (especially for commercial activity), and now Congress is investigating Allergan over the tactic that has Congress not only greatly concerned about competition in the drug industry (and exorbitant prices of pharmaceuticals), but also the questionable use of the sovereign immunity law. The four lawmakers who signed the letter to Allergan state: "The unconventional maneuver has received considerable criticism from the generic competitors challenging the drug's patents under the process Congress created (IPR) to enable timelier review of such challenges (read: a fraction of the cost of a court trial)." The letter also notes that the key ingredient in the patent was set to expire in 2014 and that Allergan had filed more patents to extend patent protection to 2024, a signal that Congress is watching for exploitation of patent law to enable "perpetual patents" widely used by the pharmaceuticals.
But court cases have limited the scope of sovereign immunity (especially for commercial activity), and now Congress is investigating Allergan over the tactic that has Congress not only greatly concerned about competition in the drug industry (and exorbitant prices of pharmaceuticals), but also the questionable use of the sovereign immunity law. The four lawmakers who signed the letter to Allergan state: "The unconventional maneuver has received considerable criticism from the generic competitors challenging the drug's patents under the process Congress created (IPR) to enable timelier review of such challenges (read: a fraction of the cost of a court trial)." The letter also notes that the key ingredient in the patent was set to expire in 2014 and that Allergan had filed more patents to extend patent protection to 2024, a signal that Congress is watching for exploitation of patent law to enable "perpetual patents" widely used by the pharmaceuticals.
All of this follows on the "legal" IP transfers by multinational corporations to Ireland and Luxembourg inside the EU to avoid taxation. The EU is coming down on these, and now the US is coming down on tribal IP transfers (for the same reason).
Just.
Pay.
Your.
Taxes.
-- Tigger warning: This post may contain tiggers! --
That's a pretty clever work-around.
#DeleteChrome
The name of the company in the summary is not Allergen, but Allergan.
Twinstiq, game news
Congress might say they are watching but are they going to do anything about it?
I severely doubt it. Too many donors.
Intellectual property is theft of common knowledge and culture. We are waking up to the fact that we buy things because it is fun to do so, and it is no longer being fun to buy intellectual property with these terms.
> Sovereign immunity prevents states from being sued in federal court unless they agree to the suit.
So, just do like law enforcement does with civil forfeiture -- Don't use the tribes/states, sue the patent. The patent itself has no sovereign immunity.
> The IPR process, which went into effect in 2012, is a kind of mini-litigation system that takes place before the Patent Trial and Appeals Board (PTAB), rather than in district courts.
Alternatively, stop calling it a "mini-litigation system" and instead call it "binding arbitration". We already know that companies can force you to give up your rights to litigate, if you want to do business with them. The US Patent and Trademark Office can simply say, if you want to do business with us (get a patent), you must agree to "arbitrate" your patent or you don't get one. So sorry.
Allow unlimited patents. But they have to pay for that right every 5 years. The cost: 10% of what is has made in its lifetime so far.
Congress sure didn't seem to mind when companies partnered with Universities to evade IPR.
A big multinational corporation finds a loophole that allows them to make money hand over fist? Say it isn't so?!?! How can that be? Oh yeah
1) They have huge teams of lawyers that have one job, protecting their profits and them from legal risks.
2) There are professional consulting legal firms that specialize in setting this up.
3) The tribal nations also advertise the fact and knock on company doors soliciting this kind of business.
4) Congress is bought/paid for by lobbying dollars. Shit, no congressman even writes their own legislation, lobbyists do and then they attach their name to
it.
Do any of us think that what's been described here hasn't been discussed/known for decades in the halls of DC? It's not new, it's not shocking it's just business.
Harrison's Postulate - "For every action there is an equal and opposite criticism"
You can sue the patent via an in rem action. Do it, no sovereign immunity that way.
This is the very first time I have ever heard of anyone GIVING something to an Indian. Normally they rob them blind and steal or abuse their land.
Don't get me wrong, the red man has taken it up the ass. Once the sole proprietor of a mighty hemisphere, he's now hawking gambling, cut rate cigarettes and and has-been rock bands after the white man fucked him over but good.
But this sovereign tribe thing is BS. You want to hold the patent? Fine, then it's only valid on the reservation. Unless the patent violation occurs on tribal land, you're outside your sovereign territory and authority.
If you want to wave your sovereignty around, do something brave. Legalize pot and tell the state legislature to fuck off.
A drug company does something amoral I think wow, no one can stoop lower than that, they always surprise me and do. I hope all these major execs get a MRSA bug and just die.
I seem to recall them being given a blanket once. /duck
I've heard about the Sue Indians.
Table-ized A.I.
This is a black and white case. There are no moral ambiguities, no reasoning that could make it appear less heinous. This is exactly what we have maximum penalties for.
Annul the patents, revoke the charter for Allergen, arrest the board. There is no other response possible. When foreign nations do not respect your sovereignty you declare war; when a company so flagrantly shows that they care not one iota for your laws or for your people, you respond in kind.
Take everything - it is in the best interest of your country, your population, and your democracy.
It's nice that Congress is taking a look, but the idea that Congress should do something is entirely misplaced.
1) We don't even know if the IPR process is actually constitutional at all regardless of the parties involved:
http://www.ipwatchdog.com/2017/06/12/supreme-court-inter-partes-review-unconstitutional/id=84430/
2) The "sovereign immunity" rights the drug companies are hoping to rely on have only been vindicated with respect to state universities by the Patent Trial and Appeals Board. Native American tribes are so different from U.S. states that I hardly know where to begin- at the very least, they'll implicate old, barely-reviewed treaties rather than this Constitution we've been litigating over for two centuries.
3) There has been no Article III court decision saying the PTAB got the above right- it's the equivalent of the cops themselves ruling that they didn't violate some right.
This concept seems odd to me--that you can have a business transaction where you transfer legal ownership of a thing to somebody else, and then still dictate after the sale what they are allowed to do with it.
I think in the long run, it'd be better to throw this concept out right away, and 3-5 years to see what effect that has on patent gifts. As well as a lot of other things...
It'd be amusing if the tribe suddenly gained this option and decided to license it to somebody else instead. [Homer Simpson voice] "D'oh!"
A difficult election season is coming up and Congress would appreciate it if the pharmaceutical industry increased their campaign donations.
This is not limited to tribes, and not everyone in pharma is happy about it either:
http://blogs.sciencemag.org/pipeline/archives/2017/09/26/more-on-the-mighty-mohawk-maneuver/
Were that I say, pancakes?