https://archive.org/details/LegalGeekEp115
As discussed earlier, lawyers for Netflix earned a lot of positive press in sending a nice version of a Cease and Desist letter to a temporary pop-up bar that used the IP of the show Stranger Things without authorization or license. While it's not always appropriate to take a softer approach and have fun with in-jokes in this setting, dealing with fans of a brand is a tricky situation as we've covered before on this segment, and this approach shows great legal and PR savvy on the part of Netflix. Legal Geek approves and welcomes any other nerd IP company who needs a C&D written with in jokes to come contact me.
Now, on to our main course this week, which is also a bit of legal ingenuity. Pharmaceutical company Allergan, who makes the Restasis eyedrops that generate $1.5 billion dollars
per year, hit the legal newswaves in a big way this week as they defend from claims that their patents covering these eyedrops are invalid. Patents can be challenged in federal court lawsuits as well as in post grant review proceedings at the Patent Trial and Appeal Board of the Patent Office. However, both of these are federal bodies, and that brings us to the interesting legal theory Allergan is now employing.
Just like how states have sovereign immunity from federal lawsuits under the constitution, many Native American tribes have sovereign immunity from similar federal actions. Thus, Allergan has recently paid a New York tribe to transfer patents covering the eyedrops to the tribe and then implicitly license the rights back to make the eyedrop medication. The tribe, as the rightful owner of these patents being challenged, is now claiming that these challenges in the Patent Office and federal court should be dismissed because they have tribal sovereign immunity from such federal actions.
The legal theory of applying tribal immunity appears to be sound, as the same theory has worked to protect State University owned patents from similar reviews and challenges. But is this a sham transaction that opens a massive end around for companies to avoid challenges to their patents, or a legitimate legal and business arrangement? That question has opened some great public debate this week.
On one hand, the tribes who take advantage of this situation should be commended for finding ways beyond things like casinos to generate revenue and support their members. However, it could risk the legitimacy of applying tribal sovereign immunity in this and other contexts, should the courts or Congress deem it an improper abuse of the power. The patent world will be watching closely as this progresses to briefing and argument in the coming weeks, as if Allergan is successful, a whole new world of business opportunities will open up to the recognized tribes of the U.S.
The Bottom Line is, never doubt the ability of lawyers to come up with some interesting loophole or novel legal strategy, especially when billions of dollars are at stake. While it's certainly not great for the patent system if this is a valid workaround, it makes a great story and some money for Native American tribes who have had it rough, in some parts of the country. Now excuse me while I dial up my local tribe to set up a mutually beneficial business arrangement...
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