The House Judiciary Committee met Tuesday to hear testimony on a patent deal between the drugmaker Allergan Plcand a Native American tribe. The deal has become a major scandal in the nation’s communities of innovators. The same tribe has struck an equally controversial copycat bargain with a notorious patent troll and is now suing Amazon and Microsoft. If these arrangements stand, they will deliver a harsh blow to the nearly decade-long national effort to improve the quality of the nation’s patent system, hurting the innovation and job creation on which our economic vitality depends.
The ploy was developed by Allergan, which is itself the product of a complicated 2015 transaction that allowed the maker of the mega-drug Botox to move its headquarters to Ireland, escaping U.S. corporate taxes. Trying to escape official scrutiny of the validity of some of its patents, the company sold some of its portfolio to upstate New York’s St. Regis Mohawk tribe.
As tribes are generally entitled to sovereign immunity, Allergan claimed that the patents in question were, therefore, exempt from U.S. Patent Office review. The tribe’s follow-on agreement was with a patent holding company called SRC Labs. This sovereign-immunity gimmick should not stand up in court. But in the meantime, the drugmaker and the troll will lease exclusive rights from the tribe and continue their questionable operations.
Read the entire op-ed in the Washington Times.