Congress calls hearing on tribal patent immunity

A US House of Representatives subcommittee has arranged a hearing for November 7 on the legitimacy of agreements like the one between drugmaker Allergan Plc and a Native American tribe intended to shield patents from inter partes review (IPR).

The House Judiciary Committee’s Courts, Intellectual Property, and the Internet Subcommittee will hold a hearing called “Sovereign Immunity and the Intellectual Property System”.

The hearing will examine “the issue of intellectual property rights owned by entities that claim sovereign immunity on the basis of the 11th Amendment or Native American tribal immunity.”

The subcommittee said: “Recently, drug company Allergan transferred a number of patents to the St. Regis Mohawk Tribe in exchange for an exclusive license.

“According to Allergan, the deal will shield those patents from inter partes review (IPR) proceedings at the Patent Trial and Appeal Board (PTAB) of the U.S. Patent & Trademark Office because the Tribe’s sovereign immunity precludes such proceedings against it.

“Allergan and the Tribe have moved to dismiss pending IPRs on that basis.

“At the same time, Allergan is asserting those patents against competitors in district court.

“Although the district court recently held the patents invalid, Allergan is expected to appeal, and the IPRs are still pending.

“The St. Regis Mohawk Tribe has since become involved in filing lawsuits against Amazon and Microsoft with SRC Labs LLC, which transferred a number of computer technology patents to the Tribe in a deal similar to the Allergan deal.

“The Tribe has indicated it intends to pursue other such deals with companies seeking to assert patents as it seeks to diversify its revenue sources.”

The witnesses for the hearing are: Karl Manheim, Professor of Law, Loyola Law School; William Jay, Partner and Co-Chair, Appellate Litigation, Goodwin Procter LLP; Philip Johnson, Principal, Johnson-IP Strategy & Policy Consulting; and Christopher Mohr, Vice President for Intellectual Property and General Counsel, Software and Information Industry Association.

House Judiciary Committee chairman Bob Goodlatte (R-Va.) and Courts, Intellectual Property, and the Internet Subcommittee chairman Darrell Issa (R-Calif.) issued statements in advance of the hearing.

Goodlatte said: “The patent system is central to the United States’ competitiveness, job creation, and future economic security.

“It is designed to protect and promote American innovation and we in Congress have a responsibility to ensure that our patent system continues to function in this manner.

“Next week’s IP subcommittee will be an excellent opportunity to hear from expert witnesses on the true impact of patents being sold to entities that can claim sovereign immunity, exempting the patents from any future challenges.”

Issa said: “Ensuring a strong and fair patent system is critical to safeguarding property rights and creating certainty for job creators.

“The changes Congress made in the America Invents Act have done much to improve the quality of patents and the ways challenges to their validity are dealt with.

“This hearing is an important look at the ways that the system can be gamed under the guise of sovereign immunity as a means to shield patents from the checks and balances intended by law and the changes Congress may need to make to address it.”