A drug company has found a novel way to avoid challenges to some of its most prized patents: handing them off to a Native American tribe for safe-keeping.
On Friday, Allergan disclosed that it gave six patents covering its top-selling dry eye drug Restasis to the St. Regis Mohawk Tribe in Northern New York. The deal will provide the tribe with $13.75 million immediately and an annual royalty of $15 million as long as the patents are valid. The new deal was soon reported in both The New York Times and The Wall Street Journal.
Allergan made the unprecedented move because it will prevent any meaningful challenge to the company's patents at the Patent Trial and Appeal Board, or PTAB. Challenging patents at the PTAB in a process called "inter partes review" (IPR) was authorized by the America Invents Act of 2011, and the IPR process has significantly changed the patent landscape since then. While invalidating a patent in district court typically costs millions of dollars, invalidating a patent via IPR can happen for the relative bargain of a few hundred thousand dollars.