Be Very, Very Concerned About What Allergan Just Did

["Dave Farber" <farber () gmail com>]

Begin forwarded message:

> From: Richard Forno <rforno () infowarrior org>
> Date: September 10, 2017 at 10:10:29 AM EDT
> To: Infowarrior List <infowarrior () attrition org>
> Cc: Dave Farber <dave () farber net>
> Subject: Be Very, Very Concerned About What Allergan Just Did
>
> (c/o KM)
>
> Be Very, Very Concerned About What Allergan Just Did
>
> Posted on September 9, 2017 by rachelsachs
>
> http://blogs.harvard.edu/billofhealth/2017/09/09/be-very-very-concerned-about-what-allergan-just-did/
>
> Yesterday, it was announced that Allergan had transferred the ownership of the patents on its billion-dollar drug 
> Restasis, used for the treatment of chronic dry eye, to the Saint Regis Mohawk Tribe. The Tribe then exclusively 
> licensed the drug back to Allergan, in exchange for tens of millions of dollars in both licensing and royalty fees. 
> Although it may not sound like it, this transfer is potentially huge news in the drug pricing world. It is also 
> extremely complex, and its full implications have yet to be determined.
>
> Enormous caveat before we begin: I am by no means an expert on tribal sovereign immunity. I may well be wrong here. 
> (In fact, I would very much like to be wrong here.) There is little (any?) case law on sovereign immunity’s impact in 
> the Hatch-Waxman area, and much of what follows is extrapolated from case law on tribal sovereign immunity both in IP 
> and in other contexts, state sovereign immunity in the IP area, and discussions with other law professors. Please let 
> me know if this is your area of expertise and you believe I’ve gotten the analysis wrong!
>
> In short, if repeated and taken to its logical conclusion, this transfer has the potential to prevent any invalidity 
> challenges to any drug patents. Would-be generic competitors could not seek to initiate inter partes review (IPR) 
> actions before the Patent and Trademark Office (PTO). They could not bring declaratory judgment actions in federal 
> court. And – both most importantly and most unclear – they could not bring Paragraph IV claims under Hatch-Waxman, 
> preventing generic companies from challenging patents’ invalidity and requiring us all to wait until the very end of 
> patent expiration to experience generic competition.
>
> Here’s why: tribal sovereign immunity claims will bar these suits. Let’s take them one at a time. First, Allergan’s 
> stated reason for the transfer is to insulate it from the ongoing IPR action against its patents. Allergan does not 
> want to allow the PTO to find its patents to be invalid, and a newly asserted sovereign immunity argument seems 
> likely to allow Allergan to dismiss the IPR. State universities whose patents end up in IPRs have successfully used 
> this argument, and there is no reason to think it would not work here. This is also the reason that declaratory 
> judgment actions of invalidity in federal court will be dismissed. As Professor Mike Carrier states in the New York 
> Times’ coverage of Allergan’s transfer, there are reasons to be concerned about this set of implications. (Some might 
> also remember that BIO and PhRMA have lobbied for legislation that would insulate their patents from IPR challenges. 
> They have been unsuccessful so far, and we might see Allergan’s actions here as one strategy to accomplish what they 
> were otherwise unable to do.)
>
> But it gets worse. Because it seems likely that tribal sovereign immunity would also insulate the tribe from a 
> counterclaim of invalidity as part of a Hatch-Waxman Paragraph IV suit. Recall that the usual posture of a Paragraph 
> IV suit is as follows: a generic drug company has filed a Paragraph IV ANDA alleging that the innovator company’s 
> patents are invalid (for example). The innovator company then sues the generic for patent infringement, as permitted 
> by the statute. The generic drug company may then counterclaim for invalidity. If they succeed in invalidating the 
> innovator company’s patents, then the generic can come to market earlier than anticipated and help bring down drug 
> prices more quickly.
>
> Except that tribal sovereign immunity should insulate an innovator company from that counterclaim for invalidity. 
> This may not be the case for state universities, who have been held to waive sovereign immunity for counterclaims by 
> initiating the infringement suit in the first instance. But in a range of contexts, courts have held or reaffirmed 
> that even tribes initiating lawsuits are immune from counterclaims. And it does not appear (on its face) that 
> Hatch-Waxman has abrogated this sovereign immunity. Allergan has said that the transfer “has no impact on” an ongoing 
> ANDA proceeding for its Restasis patents. But as a matter of law, it is not clear why that would be so. (For more, 
> see Jake Sherkow’s great Tweetstorm here.)
>
> < - >
>
> http://blogs.harvard.edu/billofhealth/2017/09/09/be-very-very-concerned-about-what-allergan-just-did/



-------------------------------------------
Archives: https://www.listbox.com/member/archive/247/=now
RSS Feed: https://www.listbox.com/member/archive/rss/247/18849915-ae8fa580
Modify Your Subscription: https://www.listbox.com/member/?member_id=18849915&id_secret=18849915-aa268125
Unsubscribe Now: 
https://www.listbox.com/unsubscribe/?member_id=18849915&id_secret=18849915-32545cb4&post_id=20170910114521:0BD050A6-963F-11E7-B67C-B1FD05EE2020
Powered by Listbox: http://www.listbox.com