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.
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.
We should have one set of rules that apply equally to everyone rather than separate rules for tribal organizations. It’s long past time.
Really? This is the biggest problem of the patent system, requiring an immediate legislative fix?
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.
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.
posting to undo a miss-clicked mod.
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So weird that this even exists...just another reminder that I have basically no chance of ever understanding law...
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.
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?
--- Most topics have many sides worth arguing, allow me to take one opposite you.
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.
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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.
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.
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?
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According to the latest ruleset, this post should be modded as Vorpal Flamebait +5.
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.
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!
I don't know what's the problem with the patent system of the US, but you have a wall of text syndrome.
Patents Drive Free Software as Hurricanes Drive Construction Industry
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.
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
"Hi. This is my friend, Jack Shit, and you don't know him." - Lord Kano
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...
If you disagree, please post your argument. (-1, Overrated) isn't your personal censorship tool for views you don't like
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.
This is not twitter.
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.
tl;dr fuck off
That isn't a wall of text asshole, there's plenty of paragraphs. You fail.