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.

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?

[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?

[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.

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.

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.

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?

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.

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?

[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.

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...