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Wednesday, October 18, 2017

ANALYSIS/OPINION:

It has been asked throughout history: Haven’t Native American tribes suffered enough?

Well, one senator vehemently appears to disagree.


Let’s establish an important legal concept and set the context. The legal term “sovereign immunity,” according to the Wex Legal Dictionary, means that “the government cannot be sued without its consent.” This doctrine has applied to the federal government, states, public universities and Native American tribes for many years.


AUDIO: Matt Mackowiak with author Josh Green


In September, the drug maker Allergan gave six patents for the drug Restasis (an eye drop used to treat chronic dry eyes) to the upstate New York-based Saint Regis Mohawk Tribe, and paid the tribe $13.5 million to accept the patents and grant an exclusive license, also promising $15 million annually until the patents expire in 2024, so long as the patents remain valid.

After that transaction, Allergan moved to dismiss an inter partes review, known as an IPR, which is a patent review. The reason? Sovereign immunity.

This week, a U.S. Circuit Judge William Bryson threw out the patents. Allergan has said it is considering its options in light of the decision. I suspect an appeal is likely given the stakes.

Setting aside that legal debate, there is legislation pending before Congress that would narrowly target the sovereign immunity of Native American tribes, sponsored by Sen. Claire McCaskill, Missouri Democrat.

As Gene Quinn of IP Watch Dog wrote, the senator has introduced the bill with the “sole purpose of [making] it impossible for Native American Indian tribes that own patents to assert sovereign immunity when those patents are challenged in proceedings at the Patent Trial and Appeal Board.”

The bill clearly singles out Native American tribes — is that not the textbook definition of discrimination?

There is more history that matters here.

Congress passed the America Invents Act in 2012, which, among other things, created the Patent Trial and Appeal Board (PTAB), which oversees patent challenges. While initially designed to spur innovation and limit so-called patent trolls, the reality is that in recent years the review process has become a tool in other industries to attack legitimate patents, hampering new product development.

One example: Hedge fund manager Kyle Bass used the IPR process to file challenge pharmaceutical companies’ patents after taking a market position betting against the company’s stock. He then publicly used the challenges to drive down the stocks’ value.

Generic drug manufacturers have regularly used the IPR process in attempts to open patents earlier than intended. The net result is there is now a significant disincentive for companies to invest billions of dollars in new drug development.

In retrospect, it would have been better for Congress to have addressed problems within the IPR process by limiting the scope to patent trolls specifically, but that has not happened. As a result, companies and universities have been exploring ways to protect their legitimate intellectual property from nefarious actors.

In 2017, the University of Florida shielded its research from IPR challenges on sovereign immunity grounds. This was followed by the University of Maryland invoking its standing as a state sovereign to dismiss another IPR challenge.

While the legal debate rolls on, this patent/exclusive license agreement between Allergan and the Saint Regis Mohawk Tribe is both creative and mutually beneficial.

With Congress failing to act on revising the IPR process, Allergan was forced to take action to protect its intellectual property. On the other side, the Saint Regis Mohawks took an important step in diversifying their tribe’s economic interests. At a time when gambling is becoming legal in many states and casinos on non-reservation land are opening, tribes like the Mohawks must find other revenue streams to help their communities. The Mohawks developed a great new revenue stream for their use.

So this brings us back to Ms. McCaskill, who has a troubling history of targeting Native Americans.

In 2014, she led the assault on the Small Business Administration’s 8(a) Program, which helps business owned by economically disadvantaged individuals serving low-income areas. A large number of businesses located on Native American land rely on the program to be able to serve Native American populations. She was specifically called out for her position by former Sen. Mark Begich, a fellow Democrat from Alaska.

Is Ms. McCaskill biased against Native Americans? Only she knows what is truly in her heart.

The courts have ruled that sovereign immunity can be used for universities. I can find no record of Ms. McCaskill objecting to universities invoking sovereign immunity. Does Ms. McCaskill oppose sovereign immunity for universities like the University of Missouri, or does she just object to it when Native American Tribes benefit from it?

 • Matt Mackowiak is the president of Austin, Texas, and Washington, D.C.-based Potomac Strategy Group, a Republican consultant, a Bush administration and Bush-Cheney re-election campaign veteran and former press secretary to two U.S. senators. His national politics podcast, “Mack on Politics,” may be found on iTunes, Google Play, Stitcher and at MackOnPolitics.com.


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