Tribal 'Sovereign Immunity' Patent Protection Could Be Outlawed (arstechnica.com)

AnalogDiehard writes: The recent -- and questionable -- practice of technological and pharmaceutical companies selling their patents to U.S. native Indian tribes (where they enjoy "sovereign immunity" from the inter partes review (IPR) process of the PTO) and then the tribes licensing them back to the companies is drawing scrutiny from a federal court and has inspired a new U.S. bill outlawing the practice. The IPR process is a "fast track" (read: much less expensive) process through the PTO to review the validity of challenged patents -- it is loved by defendants and hated by patent holders. Not only has U.S. Circuit Judge William Bryson invalidated Allergan's pharmaceutical patents due to "obviousness," he is questioning the legitimacy of the sovereign immunity tactic. The judge was well aware that the tactic could endanger the IPR process, which was a central component of the America Invents Act of 2011, and writes 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 responsibility." U.S. Senator Claire McCaskill (D-Mo.) -- no stranger to abuses of the patent system -- has introduced a bill that would outlaw the practice she describes as "one of the most brazen and absurd loopholes I've ever seen and it should be illegal." Sovereign immunity is not absolute and has been limited by Congress and the courts in the past. The bill would apply only to the IPR proceedings and not to patent disputes in federal courts.

Comments

A predictable outcome

[MangoCats]

Anything of value is inherently monetizable, any time a law like this is passed - lessening the value of patents, except in certain circumstances, it would be very surprising if those circumstances were not monetized and exploited to preserve the existing value, or create new value, if that's a possibility.

Especially when dealing with entities with practically infinite resources, including legal teams larger than the Congress.

Re:A predictable outcome

[Anonymous Coward]

Anything of value is inherently monetizable

That's why the penalty should be enough to counter the incentive (i.e., cost more than the value of the "anything") and be sufficiently enforced that the risk of getting caught is high.

Not just for patents

[Kohath]

We should have one set of rules that apply equally to everyone rather than separate rules for tribal organizations. It’s long past time.

Re:Not just for patents

[omnichad]

Didn't we conquer them enough? Let them have their sovereignty unless they want to give it up (though having them pay federal income taxes under that arrangement is a bit of a double standard).

Re:Not just for patents

[LifesABeach]

I find myself thinking that Big Pharma is doing with American Indians what Google, Microsoft, Amazon, Hewlett Packard, et.al. did in Ireland. Finally it's now illegal. It's more than time to bring home trillions in profits that are in sheltered in banks else where waiting to be used to hold growth down till it can be monetized for 1% of 1% and the rest of us must wait some more.

And because this is /., did Big Pharma use Linux? Or is there a Forbes wirter on staff at /. now?

Re:Not just for patents

[Anonymous Coward]

We should have one set of rules that apply equally to everyone rather than separate rules for tribal organizations. It’s long past time.

I'm not sure about this idea of scrapping the Constitution to adopt tribal law, but hey, we can give it shot.

On the upside: No native tribe ever put Hillary or Trump up as candidates for election to any office.

Re:Not just for patents

[omnichad]

On the upside: No native tribe ever put Hillary or Trump up as candidates for election to any office.

Maybe not, but they're also US citizens with voting rights. So they're not exactly uninvolved either.

This is the biggest problem?

[drunken_boxer777]

Really? This is the biggest problem of the patent system, requiring an immediate legislative fix?

Re:This is the biggest problem?

[Anubis IV]

A) Who says you’re only allowed to work on one problem at a time? This is a simple problem with a simple fix. There’s no reason not to fix it immediately.

B) Considering this is the easiest way for a defendant to push back against a troll’s patent in order to get it invalidated, arguably, yes, this is one of the biggest issues, especially because it’s been happening more often.

Re: This is the biggest problem?

[Anonymous Coward]

If you're presented on massive problem requiring 5 years to fix, and one slightly less massive problem requiring 5 minutes to fix, which do you fix first?

Re:This is the biggest problem?

[LifesABeach]

No, but this problem is in the herd of big problems at the USPTO. I would hope that this law could be applied to Trade Marks also.

Re:This is the biggest problem?

[fibonacci8]

Excellent strawman! Sovereign immunity is being used to violate the right of others to due process. Sometimes things are still wrong whether or not racism is factored in.

Re:This is the biggest problem?

[Anonymous Coward]

fuckin race baiter

Re:This is the biggest problem?

[guruevi]

It's not the biggest problem but it's a big fucking problem.

In 2011, this thing was legalized where patents no longer have to go through the already minimal review process, benefiting big pharmaceutical corporations. This is literally a constructed loophole.

So let's say your an inventor and you invented this thing, let's say a cure for cancer, and out of the goodness of your heart you release it to the world for free. A pharmaceutical company, through this process can take your cure, patent it and make sure everybody now has to pay them to be able to produce or use the cure.

In this case, the company patented cyclosporin, a drug you can easily produce from particular mold strains which has been in use since the early 1980's.

Re:This is the biggest problem?

[bad-badtz-maru]

The case in question involves a product that generates over a billion dollars in annual revenue for Allergan. So it's not exactly the smallest case.

Re:This is the biggest problem?

[drunken_boxer777]

I don't think you understand this "loophole". It's not about patenting something that someone else created, it's about delaying the invalidation of patents by forcing a process with a longer timeline.

The particular example is not about a patent for cyclosporin, it's about a patent for the formulation of Restasis, which contains cyclosporin.

Re:This is the biggest problem?

[drunken_boxer777]

Nobody denied A, but is this loophole is being exploited by an army of patent trolls? This example (Allergan and the formulation patents for Restasis) was the first, to my knowledge, but I'm curious to know if there are legitimate patent trolls using this loophole.

Either this has gone under the radar for 5+ years (America Invents was passed in 2011), or Allergan was one of the first to find it. But you sort of made a fair point: it could be exploited by real patent trolls, so let's close it now.

(I don't consider pharma companies patent trolls, in the classical sense of the term, as they look to fiercely fend off generic competition, which will come to the market eventually, rather than sue others for violating their patents.)

Re:This is the biggest problem?

[guruevi]

I don't think you know what Sovereign Immunity means. It means that even though you can force it in whatever process you want, they are Immune from the effects of the process. So if the USPTO says "it's invalid" the "Sovereign Immunity" clause means they can say "so what, you can't touch it".

And Restasis is eyedrops + cyclosporin. They also have eyedrops + hydrochloric acid, eyedrops + saline. Look at the ingredients, they aren't unique.

Re:This is the biggest problem?

[drunken_boxer777]

Again, I assert that you are mistaken, or misunderstood my last comment.

The newer patents, that Allergan is arguing allow commercial exclusivity, will expire in a couple of years. After that, anyone can sell generic Restasis. It is not indefinite exclusivity from generic competition. In your example, with a cancer drug, the patent shouldn't be granted because the applicant is not the inventor, sovereign immunity or not. Likewise, the longer process to invalidate the patent will still exist and be applicable, sovereign immunity or not. It's the shorter process (IPR) that can be skipped due to sovereign immunity.

As for Restasis, it's the formulation, i.e., the concentration of cyclosporin and other ingredients, that is patented. They didn't patent cyclosporin itself.

Anyway, in another comment I conceded that this could be a problem if real patent trolls exploit it, so I can see why the loophole should be closed. In the particular incidence in TFS, I found it to be more of an interesting piece of legal maneuvering. But I still think there are other problems that need to be addressed, that aren't getting this much attention.

Re:This is the biggest problem?

[sydbarrett74]

Even if Allergan were the only entity to commit this nefarious tactic, signing McCaskill's bill into law has value purely as a preventative measure.

This is what the patent trenches look like

[Anonymous Coward]

That went out the window ages ago, when Americans made treaties with the Original And Native Americans, then broke them.

Which isn't to say that this sort of shenanigan shall stand. But the problem isn't so much that tribes have special rules.

The problem is that the patent system is terminally broken. It's too easy to get bullshit patents and troll around with them. This gets expensive for the victims in a hurry. Defending against that was also too expensive. So instead of fixing the patent system, they fast-tracked the individual patent review process. So the trolls found a way to defend against fast-tracking patent review. So now instead of fixing the patent system we'll get a fix for the broken fix.

Bitching on the tribes for this is really not the most productive you could be doing.

Re:This is what the patent trenches look like

[swb]

I feel bad for the plight of Native Americans, but that doesn't mean that "Tribal Sovereignty" isn't a dubious concept with all kinds of negative externalities, like being used as a patent dodge.

I live in a state with a large Native population and a number of good-sized reservations and more often than not "Tribal Sovereignty" winds up causing more trouble than it seems worth.

It creates a bunch of law enforcement problems, as local police generally can't enforce the law on tribal lands, and as you might imagine this creates all manner of ill will with neighboring non-tribal residents. While on the surface it seems to be beneficial to the natives because they're not subject to racist rural cops, what ends up happening is that the tribal police wind up being the enforcement tool of the corrupt tribal leadership. And there's little accountability for the natives, either, since the usual political and justice hierarchies don't apply to the native police forces.

I also think it hobbles investment in tribal areas -- sovereignty winds up making it difficult to enforce contracts and collect debts incurred by tribes and tribal residents. People I know who have done business with tribal casinos have horror stories of not being paid for labor or materials and finding that it's a maze of federal laws and bureaucracy to deal with it in the Federal court system. And that's the *casinos*, the actual successful tribal industry which has positive cash flow and something of a reputation to consider.

Bottom line is I don't think the average Native American really gets much value for their tribal sovereignty. It's mostly used as a gimmick for tribes to make money by evading state regulations and as a kind of political prop by tribal officials to further the illusion of native independence.

Re:This is what the patent trenches look like

[cayenne8]

That went out the window ages ago, when Americans made treaties with the Original And Native Americans, then broke them.

So, what's ONE more time, eh?

Give some fire water, smoke a peace pipe, and get them to sign another dotted line.

Re:This is what the patent trenches look like

[DarkOx]

Without the immunity though the casinos and tobacco business (don't forget that makes them loads of cash too) could not exist. Many natives do get employment or other significant compensation as result of profits from those industries.

Its complex but its hard to argue that they should give up self governance; without first showing that the failures you mention are not really policy problems that could be address but necessary results that follow directly from their immunity.

Re:This is what the patent trenches look like

[Anonymous Coward]

I feel bad for the plight of Native Americans, but that doesn't mean that "Tribal Sovereignty" isn't a dubious concept with all kinds of negative externalities, like being used as a patent dodge.

The point remains that the dodging is the problem, not the mechanics of the dodge. Therefore, the thing that needs fixing is the patent system, not the dodge vehicle.

In the same way any "fixes" to the tribal sovereignty thing in the name of fixing patents are no good to the tribes' plight either.

IOW fix the approach, as in, talk patents when we mean patents and talk tribal sovereignty when we want to talk about the tribes' plight. Mixing that up opportunistically just means fscking up, and don't do that, eh.

While on the surface [TS] seems to be beneficial to the natives because they're not subject to racist rural cops, what ends up happening is that the tribal police wind up being the enforcement tool of the corrupt tribal leadership. And there's little accountability for the natives, either, since the usual political and justice hierarchies don't apply to the native police forces.

That's no different from before, except the badges and the cop cars. For members of the tribe it's still easier to get chummy with the tribe leaders than with the local state bigwigs or the DC scum. Not that I'm saying it's a good situation, just that while different it isn't necessarily worse for the tribespeople.

I also think it hobbles investment in tribal areas -- sovereignty winds up making it difficult to enforce contracts and collect debts incurred by tribes and tribal residents. People I know who have done business with tribal casinos have horror stories of not being paid for labor or materials and finding that it's a maze of federal laws and bureaucracy to deal with it in the Federal court system. And that's the *casinos*, the actual successful tribal industry which has positive cash flow and something of a reputation to consider.

That doesn't sound too different from trying to get paid by federal anything.

Bottom line is I don't think the average Native American really gets much value for their tribal sovereignty. It's mostly used as a gimmick for tribes to make money by evading state regulations and as a kind of political prop by tribal officials to further the illusion of native independence.

How they use it is, well, up to them, isn't it?

Sure enough, dirty power plays are dirty, but in and of itself that isn't enough to take them away. Honestly, I'd much sooner do away with the US patent system as it is today in its entirety than even argue about the merits of tribal sovereign immunity, since that issue is so much smaller.

Re:This is what the patent trenches look like

[swb]

That's no different from before, except the badges and the cop cars. For members of the tribe it's still easier to get chummy with the tribe leaders than with the local state bigwigs or the DC scum. Not that I'm saying it's a good situation, just that while different it isn't necessarily worse for the tribespeople.

The problem is, though, it's like assuming someone is Italian they can get chummy with the mafia. When the tribal leadership is corrupt, they're a closed circle and being the same ethnic group doesn't get you anywhere. In fact, you're probably still better off as white because people might ask questions about what's going on if a white guy gets hassled on the reservation.

But if an Indian gets hassled? They've got nowhere to turn, except maybe by massively exposing themselves filing some kind of complaint with the FBI (which DOES have authority on reservations as a Federal law enforcement body). Now you're a snitch, a race traitor and the white man's lackey, and most likely living in an isolated place with nowhere to go.

Either tribal sovereignty needs be turned into the equivalent of state level sovereignty or it needs to be scrapped.

Re:This is what the patent trenches look like

[Anonymous Coward]

The thinking was more that before their land got overrun they had largely the same structure, and that the (methaphorical, physical, social, you name it) distance between Joe Random Firewater and his chief is a little less than the distance between him and the (possibly racist) governor of the state, n'mind whatever runs around in DC.

So in a sense, yes, since the mafia indeed does (or did) require "being Italian" to get in, if you aren't then you have that much less chance to get in. In that sense being Italian definitely helps getting into the mafia.

Your implication that this impedes your ability to get your justice, well, them whiteys need to have damn deep pockets and it can take ages, and them blackies typically don't even try. So, and that was the point really, if you compare the situations realistically, I really don't know which is worse. Am I wrong in assuming not all tribal leaders are corrupt?

Either tribal sovereignty needs be turned into the equivalent of state level sovereignty or it needs to be scrapped.

Not sure the latter will be an improvement. I currently have little reason to object to the former.

Then again I also think the US should break up into three to five parts or so, like ma bell back when, for similar reasons, but I have no illusions that will happen peacefully in our time either.

This is fair

[scourfish]

The tribes should be free to practice whatever patent methodology they want on their sovereign territory. If they buy a patent and practice it in the US, it should be subject to the same standards, fair or otherwise, as everyone else.

Yep - government rules encourage rent-seeking

[Anonymous Coward]

I'm not sure why anyone concludes in general that more government rules would be an effective answer.

But hey, let's put that government in complete charge of health care. What could possibly go wrong?

Re:Yep - government rules encourage rent-seeking

[EndlessNameless]

I'm not sure why anyone concludes in general that more government rules would be an effective answer.

I am entirely unclear on your position. If someone abuses a set of rules, what is the problem with making a new rule or issuing a clarification to end the abuse?

Re:Yep - government rules encourage rent-seeking

[Hal_Porter]

The problem the US has is not too few rules. It has a vast number of rules, and each new rule has been subtly altered by interested parties lobbying. And those interested parties are very, very good at gaming the rules that exist and at the same time lobby for subtle changes in any new rules which suit their interests and screw their opponents.

A couple of examples would be the ban on Kinder Surprise eggs.

https://en.wikipedia.org/wiki/...

The Federal Food, Drug, and Cosmetic Act prohibits confectionery products which contain a "non-nutritive object", unless the non-nutritive object has functional value.[19] Essentially, the Act bans "the sale of any candy that has embedded in it a toy or trinket".[20]

In 1997, the staff of the Consumer Product Safety Commission (CPSC) examined and issued a recall for some Kinder Surprise illegally brought into the US with foreign labels.[21] The staff determined that the toys within the eggs had small parts. The staff presumed that Kinder Surprise, being a chocolate product, was intended for children of all ages, including those under three years of age. On this basis, the staff took the position that Kinder Surprise was in violation of the small parts regulation and should be banned from importation into the US.[21]

Kinder Surprise eggs are legal in Canada and Mexico, but are illegal to import into the US. In January 2011, the US Customs and Border Protection (CBP) threatened a Manitoba resident with a $300 (Canadian dollars) fine for carrying one egg across the US border into Minnesota.[22] In June 2012, CBP held two Seattle men for two and a half hours after discovering six Kinder Surprise eggs in their car upon returning to the US from a trip to Vancouver. According to one of the men detained, a border guard quoted the potential fine as US $2,500 per egg.[23]

In 2012, the FDA re-issued their import alert stating "The embedded non-nutritive objects in these confectionery products may pose a public health risk as the consumer may unknowingly choke on the object".[24]

Kinder Surprise bears warnings advising the consumer that the toy is "not suitable for children under three years, due to the presence of small parts", and that "adult supervision is recommended".[25]

Some US cosmetics manufacturer got a ban in for some long forgotten product which now means Kinder Surprise eggs are seized by customs and illicit egg importers fined.

Or look at this

http://www.slate.com/articles/...

The agency's failure to effectively regulate cigarettes, a mature technology that has been extensively studied since the 1950s, raised doubts about its competence to take on the far more complex questions surrounding e-cigarettes. When the FDA detailed its plans to aggressively regulate e-cigarettes last year by using the same exact regulatory regime it had used for cigarettes, that concern seemed warranted. Per that plan, any vapor products introduced after 2007--essentially all of them--would have to retroactively apply for pre-market approval. Those that failed to receive it could be ordered off the market, potentially sending millions of users back to far more dangerous combustible cigarettes. It looked as if Philip Morris' gamble would pay off more than anyone could have anticipated.

Since the market for e-cigarettes barely existed in 2007, there was no baseline established for the product, meaning e-cig producers couldn't just apply under the substantial equivalence standard that is available to cigarettes. Instead they had to meet a much vaguer standard, convincing FDA regulators that approving their products is "appropriate for the protection of the public health." It's uncertain exactly what that will entail with the FDA's new direction, but we do know

Re:Yep - government rules encourage rent-seeking

[someone1234]

I don't know what's the problem with the patent system of the US, but you have a wall of text syndrome.

Re:Yep - government rules encourage rent-seeking

[Lord Kano]

I'm not sure why anyone concludes in general that more government rules would be an effective answer.

I am entirely unclear on your position. If someone abuses a set of rules, what is the problem with making a new rule or issuing a clarification to end the abuse?

If a new rule is to be made, more thought should be put into it than the original rule that was evaded.

The tax laws are why so many corporations have billions of dollars in overseas tax haven. FOPA (1986) is why we are now talking about Bump Fire Stocks.

A rash decision could very well lead a situation that's worse than the one we're trying to correct.

LK

Re:Yep - government rules encourage rent-seeking

[ThePawArmy]

This is not twitter.

Re:Yep - government rules encourage rent-seeking

[modmans2ndcoming]

I'm not sure why anyone concludes in general that more government rules would be an effective answer.

But hey, let's put that government in complete charge of health care. What could possibly go wrong?

You're not too smart I see. Alex Jones is calling. He wants you to drink some more lead to give you vitality and make you more of a sycophant.

Re:Yep - government rules encourage rent-seeking

[modmans2ndcoming]

tl;dr fuck off

Re: Yep - government rules encourage rent-seeking

[Brockmire]

That isn't a wall of text asshole, there's plenty of paragraphs. You fail.

oops

[spaceman375]

posting to undo a miss-clicked mod.

Patent law is weird

[aicrules]

So weird that this even exists...just another reminder that I have basically no chance of ever understanding law...

Simple fix

[ebrandsberg]

If a patent is licensed by an entity that is a former owner of the patent, then the patent may be challenged as if the license holder was the owner of the patent in all respects, including jurisdiction. Done. No more shenanigans of selling off patents only to re-license the code to avoid exposure.

Re:Simple fix

[Anonymous Coward]

Done....for about five minutes, until they create a separate company to own new patents.

Re:Simple fix

[wwalker98]

I would guess that someone is clever enough to circumvent this by making the licensee and the inventor different legal entities even though the beneficiaries are the same.

Re:Simple fix

[ebrandsberg]

True, this would make things a bit more complex, although I'm sure legal wording could be added in to relate the corporate ownership of the new entity, etc. OR it could just be worded that if a patent is licensed to another entity that the patent can be disputed under the rules that would apply to the new entity, without any regard to if they had owned the patent prior or not. This would insure that the most lenient jurisdiction that the patent is licensed into can be used to dispute the patent as a whole.

Re:Simple fix

[PPH]

I don't think sovereign immunity applies to corporations. The Indian tribe thing relied upon the tribes being exempt from certain provisions of federal law (the IPR in this case).

Re:Simple fix

[Nidi62]

If a patent is licensed by an entity that is a former owner of the patent, then the patent may be challenged as if the license holder was the owner of the patent in all respects, including jurisdiction. Done. No more shenanigans of selling off patents only to re-license the code to avoid exposure.

Step 1: Develop patent
Step 2: Transfer ownership of patent to holding company
Step 3: Use patent anyway
Step 4: Holding company sues original owner, offers to settle for previously agreed upon payment
Step 5: Profit!

Re:Simple fix

[shuz]

And... Creating and controlling a new company is relatively simple. Create a company that is independent with a huge amount of starting debt. Then "invest" in this new company because you care. You give this new company all the starting capitol and require this company to come to you for future loans. The interest of the seed money and loan money would be much higher than a bank, but hey you are taking a huge risk. Since you are the primary investor, then you control the board, the leadership. But you ARE NOT that company. Any problems, laws, rules, anything to do with that company isn't your liability because you just kindly are helping this new company survive. Now, this new independent company can do whatever it wants. If it eventually collapses then you either lose a portion of your investment money and/or you get to fight out in court with other "creditors" for the liquidation money. Creditors may include legal settlements. If this new company does really well, starts making profits well above expectation, and/or doesn't have much legal risk, then you simply force the company to sell themselves to you. Somehow people make full careers out of figuring out how to do this instead of spending all this effort producing something actually useful to the masses.

Re:Simple fix

[Anonymous Coward]

Not the tribes. the pharmaceutical company would create a separate corp to own the patents, which then sells them to the tribe, which then licenses it to the pharmaceutical.

Why is this even an issue?

[Immerman]

I know this is no Groklaw, but has anyone seen any layman accessible explanation for why the fact that the owner has sovereign immunity should make any difference in the challenge process of a US patent being enforced in the US? I mean you're not even *looking* at the owner at that point, it's all about the validity of the patent itself, right?

I would assume that if the Chinese, German, etc. government acquires a US patent, that patent is still subjected to US law, so what's the difference?

Re:Why is this even an issue?

[omnichad]

I didn't read anything, and don't plan to. But maybe if an invention has a patent in another sovereign nation (Chinese patent something in China but want a US patent too), then they get fast-tracked because the thing is already partially vetted.

It's a poor excuse, but it wouldn't surprise me if that's what this is like.

Re:Why is this even an issue?

[Asgard]

One of the methods of challenging a patent (IPR) is unavailable in the case of sovereign immunity. So in that scenario you're looking at the owner from the get-go.

Re:Why is this even an issue?

[Khyber]

"has anyone seen any layman accessible explanation for why the fact that the owner has sovereign immunity should make any difference in the challenge process of a US patent being enforced in the US?"

Indian territories are sovereign nations within the United States, and don't have to follow all of the Federal and State rules. If you trespass on Indian Land, they can simply make you disappear and the Feds can't do SHIT about it.

Re: Why is this even an issue?

[Anonymous Coward]

So everyone that goes to Indian casinos is at risk of being harmed with no recourse? Reservations have their own legal systems but they are by no means immune to state and federal laws.

Re: Why is this even an issue?

[Anonymous Coward]

That's what sovereignty means dude.

In terms of casinos they generally don't because it would mean loss of business

Re: Why is this even an issue?

[Anonymous Coward]

This is total bs. The Indian nations are subject to federal law. They are sovereign over their land the way a city is sovereign within its boundaries. They are not a stand - alone nation within the borders of the USA.

A sovereign nation can issue passports. Tribal nations canâ(TM)t issue real passports.

Bottom line - they are enclaves created by the federal government.

Re:Why is this even an issue?

[Immerman]

If it was a Tribal patent enforced on Tribal lands, that might be relevant. But we're discussing a US patent being enforced on US lands.

Re: Why is this even an issue?

[Anonymous Coward]

Indian reservations may not have to follow state laws (tobacco sales and casinos) but they have to follow federal law unless there is an exception made by congress.

Re:Why is this even an issue?

[Immerman]

You're sadly the most helpful reply so far, but are basically just restating the original post. Yes, there's a claim that IPR is somehow voided if the owner has sovereign immunity - but what is the legal basis of that claim?

Re:Why is this even an issue?

[Anonymous Coward]

A foreign sovereign waives their immunity in the US. A domestic sovereign does not. This also means that states that own patents are immune to IPRs, including through state universities, which often assert large patent portfolios.

https://patentlyo.com/patent/2017/02/sovereign-university-challenge.html
https://www.knobbe.com/news/2017/05/ptab-terminates-ipr-based-sovereign-immunity-university-maryland

Re:Why is this even an issue?

[EndlessNameless]

Sovereign immunity applies, in limited form, to Native American tribes on reservations. Typically, state and local enforcement have no jurisdiction on tribal lands either.

I would assume that if the Chinese, German, etc. government acquires a US patent, that patent is still subjected to US law, so what's the difference?

Evidently, inter partes review is limited to US patent holders (whether real or incorporated), otherwise there would be nothing to report.

Re:Why is this even an issue?

[Anonymous Coward]

IPRs are a legal gray area, as they violate the takings and due process clauses in the federal constitution. Hopefully they get shut down when the SCOTUS hears Oil States this term.

Re:Why is this even an issue?

[hattable]

I didn't read anything, and don't plan to.

I stopped here. 100% agree

Re:Why is this even an issue?

[Anonymous Coward]

Yes, there's a claim that IPR is somehow voided if the owner has sovereign immunity - but what is the legal basis of that claim?

I think the answer you are looking for is at this site. Read the section with header "Patent Owner Benefits of Sovereign Immunity Assertions" because it explains the benefit of sovereign immunity and that implies why IPR should be void for the holder.

Re:Why is this even an issue?

[Immerman]

Thanks. That's at least a bit informative, though still really low on details. Man, I miss Groklaw.

Re:Why is this even an issue?

[rahvin112]

You can't sue an entity with Sovereign immunity unless they consent to the suit. The IPR process is a preliminary patent action where a challenger sues the patent holder demanding an adjudication of whether the patent is valid. if the Defendant has sovereign immunity in theory you can't launch the suit. At least that's why Allergen sold the patents to the Tribe, to prevent people from challenging the patent. If the court allows the suit to go forward discovery will likely show the sale of the patent is a sham sale.

Most of the Pharma companies are run by people who would fit right in with the Mafia. The days of humble drug companies working with the government to develop drugs and produce them for society at reasonable margins are gone, in the last 20 years the biggest group of psychopaths ever condensed into a single industry is running Pharma. And the results are just what you would expect.

Re:Why is this even an issue?

[rtb61]

People forget patents are governed by treaty in order to be multi-national. So the mess lies in around sovereignty with a lack of treaty to cover patents. As everyone knows treaties between, the immigrant protestant United States of America and the original nations United States of America, are totally worthless and over ridden at whim for profit, so that lack of treaty brought about by the pointlessness of treaties, lead to the loop hole, that could be temporarily exploited. The solution, they are only native Americans, we need no stinking treaty, what for, we will break them any how, so they are breaking the principles of treaties with sovereign nations right off the get go. This is also nothing unusual for the USA, just look at Syria, even when fully exposed for supporting terrorism, they still do it in full public view, attacking anyone who attacks their terrorist with their embedded US military terrorist organisers and arms and viagra suppliers.

Re:Good

[Chrisq]

Hey, is that you, Donald?

Re:Good

[Anonymous Coward]

Yankees eliminated them.

You need to take out the 'former owner' provision

[rsilvergun]

or they'll hide it all with shell companies. That's the trouble with law and why people hate it so much. For it to be fair you have to hold people to the written law, but it's so easy to leave loop holes intact. Even when you're explicitly trying to close them.

Re:Good

[Anonymous Coward]

Seriously, why hasn't Donald tweeted his opinion?

Good

[Anonymous Coward]

I hope that bill becomes law. This is just a variation on the "Double Irish" tax evasion scheme. Sell the intellectual property to a third party, who you essentially control, then have that third party license the patents back to you on very favorable terms. Wouldn't surprise me if the beancounters at Allergen were attempting to use this as some kind of tax write-off as well.

Allergen's method was either incredibly brazen or incredibly amateurish in how easy it is, even for the lay person, to see exactly what they're trying to do.

Re: Good

[Anonymous Coward]

Donald is prepping a tweet in this matter. He is working on the part that goes "Obama didn't" as we speak.

Re:Good

[Anonymous Coward]

No, no no. You license them back at very harsh terms, say, at least as much as it costs you to manufacture the patented idea, therefore you have no profit, so then no taxes are due. Profit!

Re:You need to take out the 'former owner' provisi

[Anonymous Coward]

No you don't. Have you ever been pulled over and they let you off with a warning? Congrats, they didn't hold you to the written law. You're only held to the written law for a conviction. And even then, you only assume you have to be held to the written law because the US legal system is based of the UK system which is a "letter of the law" system, which as already discussed is only "the letter" in the technical sense as precedence is so important in this legal system which deals with interpretation, and as such immediately deviates from a true "letter of the law" system.

That being said, there can be legal systems that follow "spirit of the law" instead. These would be better overall to avoid abuse by police and over prosecution, but can only work if your society is fair and doesn't discriminate against certain groups systemically, which sadly doesn't exist in any society on this planet. I feel the precedence system we use today tries to balance "spirit of the law" with "letter of the law", but as we know well, it fails quite often as seen when somebody gets convicted of a federal crime put in place for Enron type situations because they threw a fish they caught that was a little too small back in the water after a parks and wildlife officer did an investigation and sentenced to 20 years in federal prison for what really should be a fine.

I need a translator for this

[Anonymous Coward]

Only a paper pusher knows what the hell any of this means. It's like the summary started in mid conversation.

Re: I need a translator for this

[Anonymous Coward]

The short version is that someone was challenging the validity of some of Allergans patents. In an effort to try and end run the system, allergan sold the patents to a Native American tribe who then licensed it back to allergan. A judge saw it for the scam it was and invalidated allergans patents, and Elizabeth Warren is proposing legislation that would make it illegal for any other company to try the same stunt.

Re:Good

[drunken_boxer777]

It doesn't matter if the lay person sees it for what it is. Every day that generic competition for Restasis is delayed equals millions of dollars of revenue for Allergan. This is not about a perpetual monopoly on selling cyclosporin eye drops, it's about delaying generic competitors coming to market. It was never meant to be a winning strategy, only a delay tactic.

IP law: a great scam for cronies

[Anonymous Coward]

Patent and IP law is a giant scam invented by lawyers, cronies who canâ(TM)t compete in business and therefore need government to give them a leg up, and massive corporations to crush would-be competitors by fraudulently obtaining IP and then destroying the real inventor (or buying license rights and burying it).

The entire premise of patent and IP law is people run to government and ask them to forcefully prevent someone else from making a product that people want to buy. Imagine all the innovation and wealth destroyed by this bogus industry. We are all much poorer off because of patent and IP law. Kinsella explains here:

https://mises.org/library/against-intellectual-property-0

Re:IP law: a great scam for cronies

[Anonymous Coward]

Actually patents are a scam to trick businesses into disclosing their innovations to the public domain rather than trying to keep them secret or enforcing their own exclusivity agreements via contract law.

The trick is that the patent expires. To get short sighted business types to fall for it they offer monopoly protection for 20 years (basically forever in businessman years).

VERY +50 FUNNY

[Anonymous Coward]

If this doesn't deserve a +5 (Funny), then nothing does!

Maybe a better solution...

[Anonymous Coward]

Is building a series of border walls and giving them *ACTUAL* Tribal Sovereignty instead of this half assed crap they have today. Among other things it would them decide if they wanted to allow/disallow immigration, protect or molest their natural resources, enforce ALL laws how they choose to see fit, and govern in a manner befitting their tribes. Maybe it would make things better, or maybe it would make them worse, but as it stands right now, together but apart isn't working, and I am against integration because that was the 'White Man's Plan' all along, and I am for SMALLER self-governing entities, not the huge faceless asshole Union that has been pushed on both states and natives alike since the 1700s.

here's your cite (from the IPR board)

[Anonymous Coward]

The PTAB (the folks who do IPRs) themselves declared early this year https://www.law360.com/articles/885214/ptab-says-state-sovereign-immunity-applies-to-iprs that the IPR process cannot be used against a patent owner who has sovereign immunity.

It would certainly appear that Congress had no issues with the board's ruling until tribes tried to use it to their benefit.

Re:here's your cite - with bonus quote

[Anonymous Coward]

Gotta love the blisfully ignorant statement the PTAB made back then when they were warned their ruling was going to have "far-reaching consequences":

Based on the record before us, there is no evidence that the harm to the patent system, described by the petitioner, will come to pass, let alone exists as a basis to divest [...] sovereign immunity.

Yet only 8 months later it is crytal clear that the PTAB's ruling has provided the basis for Congressional actions towards divesting sovereign immunity.

Re: Good

[Anonymous Coward]

That is a favorable set of terms for the âoelicenseeâ. The terms are designed to give the âoelicenseeâ the biggest net benefit, be it taxes or something else.

Prepare for the lawsuit from the tribes...

[InvalidsYnc]

Any of the tribes that were benefiting from this will likely want to sue over this since this law would be eliminating their income. Don't know if they have a leg to stand on (legally speaking), but it seems a common outcome lately.

Don't like a law? Sue!

Re:Prepare for the lawsuit from the tribes...

[Anonymous Coward]

Even speaking as someone with native american heritage (Inupiaq and Seneca), the tribes have been looking inward way too long. It's one thing to maintain culture, but in the face of the modern world you have to accept reality. On their own, most tribes would fail without direct financial intervention. The tribesmen themselves rely far too much on the government for their livelihoods. Many who do not live on reservations still receive very decent checks from the government each month, for no reason other than being descended from a tribe. They rely on that money so much that it prevents them from going out to do other things like get an education or start a business. It is too ingrained.
 
  At what point in the future does a people have to walk on their own two feet? Will the US Government write checks to their descendants in perpetuity? Descendants who will know nothing about why? How long do you have to pay for a debt? Why do people who did nothing wrong other than happening to be descended from someone who DID do something wrong, have to pay? My family members who take these checks and use up all of the handouts cry the loudest about Thanksgiving when someone talks about what their plans are for the holidays. They are holding themselves back now. The ones on the reservations will never progress because they identify solely with the massacres and tragedies that our ancestors went through and not how they will fit in with a modern world. Let's face it. If it had been any other country in the world pretty much, they would have been forced to conform to the modern world or be wiped out.

Government Healthcare

[AF_Cheddar_Head]

But hey, let's put that government in complete charge of health care. What could possibly go wrong?

As a member of the United States Air Force the government is in complete control of my healthcare, much more so than anyone under Obamacare. Guess what, turns out that the government can provide some pretty damn good healthcare.

Re: Government Healthcare

[LDAPMAN]

I spent a decade receiving my health care from the Air Force. Itâ(TM)s true that for some things itâ(TM)s very good. For other things, especially chronic problems, itâ(TM)s not. It would not translate all that well to the general population.

Invalidate the patents... and Reform the USPTO

[LeftCoastThinker]

Invalidate all patents transferred in this manner for their blatant attempt to circumvent the law. Patent and copyright reform are so far beyond due it is reaching absurdity.

We need to get back to the original intent of the law, which was that only the inventor (a person or persons) who made the creation own the patent, and make it non-transferable. If it is developed in the employ of a company, that company gets an unlimited license of the patent, but if that company goes bankrupt, the license is automatically null and void, and ownership reverts to the creator and either way, the patent expires in 7 years from the date of first commercial product sold with no extensions on the original patent. This drives patent holders to saturate the market with their product and keep prices reasonable, because after 7 years the cash cow dies and everyone can get in on the product which is always how it was meant to work.

Beyond that, all computer software patents need to be vaporized and software needs to be transferred to the purview of copyright, which is where it belonged all along. Getting patents for real world things done "with a computer" or "on the internet" is a sad joke whose punchline is your wallet...

It's all new

[Xenographic]

So, the idea of "sovereign immunity" in the USA is found in the 11th Amendment which says:

"The Judicial power of the United States shall not be construed to extend to any suit in law or equity, commenced or prosecuted against one of the United States by Citizens of another State, or by Citizens or Subjects of any Foreign State."

There was a recent ruling that said this applies to the IPR process. This is all quite new, so there haven't been a lot of cases around it yet and this is the first time someone has tried to use this so far. Someone saw that ruling, found a tribe to go along with the licensing scheme, and then used it as a defense in court. This is why the ruling in the case about the Indian tribes goes on about whether or not to join the Indian tribe to the case--that's a procedural trick they're trying to employ.

Disclaimer: Everything about this is complicated, if you're looking at this for reasons beyond idle curiosity, get a lawyer.