Why Is Allergan Partnering with the St. Regis Mohawk Tribe?
Inside the bizarre world of patent law.
Date Written: 2017-11-20
Publisher: The New Yorker
Year Published: 2018
Resource Type: Article
Cx Number: CX22166
The St. Regis Mohawk Tribe has invested in a portfolio of patents, their status as a sovereign-entity allows the holder to circumvent the "inter partes review" if a patent dispute is raised, increasing the value of their holdings.
This article appears in the print edition of the November 20, 2017, issue, with the headline "Patently Odd."
The St. Regis Mohawk Reservation, in upstate New York, sits at the U.S. border with Canada, and most of its residents are citizens of both countries, as well as of the Mohawk Nation at Akwesasne, a territory that includes land on the Canadian side of the border. Much of the St. Regis Mohawk Reservation's income comes from a casino, but its revenues have lately flattened, and the unemployment rate on the reservation is twice that of Franklin County, which abuts it and is itself one of the poorest parts of the state. Recently, however, the St. Regis Mohawk Tribe acquired a major new source of revenue. It has become the owner of six patents for Restasis, a drug for dry-eye syndrome that is the second-highest-selling product of the pharmaceutical company Allergan. Soon, tribal leaders say, they will have a small portfolio of patents, covering other medicines and also computer software and hardware. No tribe members were involved in designing these products. The business opportunity fell into their lap, thanks to an intellectual-property lawyer in Texas named Michael Shore.
For years, Shore had a successful practice representing patent holders, mostly universities, whose intellectual property had been infringed upon. Then, in 2012, Congress passed the America Invents Act, which created a streamlined procedure, known as "inter partes review," for the adjudication of patent challenges by the U.S. Patent and Trademark Office. Shore immediately realized three things. First, a streamlined procedure would encourage many more challenges. Second, the law was written in such a way that it didn’t apply to sovereign entities, such as foreign countries, U.S. states, and Native American nations. Third, a patent held by a sovereign entity therefore had a greater effective value than the same patent held by an institution subject to the new procedure. By Shore’s calculation, transferring a patent from a non-sovereign entity to a sovereign one would increase its value anywhere from four to ten times over. If he could broker such deals, everybody—patent owners, sovereign entities, and Shore himself—could make millions.