Allergan’s RESTASIS® patents declared invalid by Eastern District of Texas

By Gene Quinn
October 17, 2017

“The Court has serious concerns about the legitimacy of the tactic that Allergan and the Tribe have employed,” Judge Bryson wrote.

Gavel closeupYesterday, in a 135-page opinion, Judge William C. Bryson of the United States Federal District Court for the Eastern District of Texas found that Allergan’s RESTASIS patents were infringed by Teva Pharmaceuticals USA, but that Teva had demonstrated invalidity of those patents by clear and convincing evidence.

“We are disappointed by the Federal District Court’s decision on the RESTASIS® patents. We are carefully reviewing the decision and are considering all options,” said Robert D. Bailey, Chief Legal Officer for Allergan. “Allergan remains committed to vigorously defending the intellectual property of our products, which allows us to continue to invest in developing and bringing forward new medicines for millions of patients.”

The patents include United States Patent Nos. 8,629,111; 8,648,048; 8,685,930 and 9,248,191. These patents, along with United States Patent Nos. 8,633,162 and 8,642,556, are listed in the Orange Book for RESTASIS® and expire on August 27, 2024.

In a separate Order dealing with the issue of whether the Saint Regis Mohawk Tribe should be joined as co-plaintiff, Judge Bryson acknowledged that “the sovereign immunity issue is not presented in this case,” but nevertheless went to great lengths in dicta to express his opinion on the matter anyway.

“The Court has serious concerns about the legitimacy of the tactic that Allergan and the Tribe have employed. The essence of the matter is this: Allergan purports to have sold the patents to the Tribe, but in reality it has paid the Tribe to allow Allergan to purchase—or perhaps more precisely, to rent—the Tribe’s sovereign immunity in order to defeat the pending IPR proceedings in the PTO. This is not a situation in which the patentee was entitled to sovereign immunity in the first instance. Rather, Allergan, which does not enjoy sovereign immunity, has invoked the benefits of the patent system and has obtained valuable patent protection for its product, Restasis. But when faced with the possibility that the PTO would determine that those patents should not have been issued, Allergan has sought to prevent the PTO from reconsidering its original issuance decision. What Allergan seeks is the right to continue to enjoy the considerable benefits of the U.S. patent system without accepting the limits that Congress has placed on those benefits through the administrative mechanism for canceling invalid patents.

If that ploy succeeds, any patentee facing IPR proceedings would presumably be able to defeat those proceedings by employing the same artifice. In short, Allergan’s tactic, if successful, could spell the end of the PTO’s IPR program, which was a central component of the America Invents Act of 2011.”

While Judge Bryson unnecessarily opined sovereign immunity, he did acknowledge that the validity of the assignment and exclusive license transaction “may be dispositive in the IPR proceedings.” This admission by Bryson is warranted because there was consideration given by the Saint Regis Mohawk Tribe in exchange for the RESTASIS patents.

Indeed, one of the questions raised regarding whether the Allergan transaction with the Saint Regis Mohawk Tribe was a legitimate contractual transaction related to the issue of consideration. Every contract requires consideration; otherwise there is nothing more than a gift — or perhaps a sham transaction. According to the evidence submitted by Allergan to the Eastern District of Texas, “the consideration for the assignment of the patents to the Tribe was the Tribe’s promise not to waive its sovereign immunity with respect to any IPR or other administrative action in the PTO related to the patents.”

Nevertheless, Judge Bryson concluded: “[T]he assignment does not operate as a bar to this Court’s continued exercise of its jurisdiction over this matter.”

Indeed, neither Allergan nor the Saint Regis Mohawk Tribe asserted sovereign immunity in the Eastern District, which was in keeping with their stated intentions as discussed at the time of the transaction. Therefore, it was interesting (to say the least) for Judge Bryson to conclude sovereign immunity did not bar his consideration of the matter when that defense had not been raised.

Without saying directly that he viewed the assignment to the Saint Regis Mohawk Tribe to be valid, Judge Bryson explained that he would, nevertheless, join the Tribe as co-plaintiff. “[I]n order to ensure that any judgment entered in this case will be protected against challenge on the ground that the proper parties were not all joined as plaintiffs, the Court hereby orders the joinder of the Tribe as a co-plaintiff,” Bryson wrote.

While it is clear that Judge Bryson does not think much of the tactic used by Allergan to avoid adjudication of the RESTASIS patents at the Patent Trial and Appeal Board, the evidence submitted to the Court regarding consideration for the transaction should make it relatively clear that sovereign immunity will be successful at the PTAB; that is of course if the PTAB follows the law. Indeed, Bryson no doubt wanted to find the transaction a sham, but did not and at the end of the day joined the Saint Regis Mohawk Tribe as co-plaintiffs because they are the owners of the RESTASIS patents.

To date, none of the proposed generic versions of RESTASIS have received approval and none of these products would be able to launch in the market.

UPDATED: Tuesday, October 17, 2017 at 11:30am to add additional analysis, specifically adding the penultimate paragraph.

 

The Author

Gene Quinn

Gene Quinn is a Patent Attorney and Editor and founder of IPWatchdog.com. Gene is also a principal lecturer in the PLI Patent Bar Review Course and an attorney with Widerman Malek. Gene’s specialty is in the area of strategic patent consulting, patent application drafting and patent prosecution. He consults with attorneys facing peculiar procedural issues at the Patent Office, advises investors and executives on patent law changes and pending litigation matters, and works with start-up businesses throughout the United States and around the world, primarily dealing with software and computer related innovations. is admitted to practice law in New Hampshire, is a Registered Patent Attorney and is also admitted to practice before the United States Court of Appeals for the Federal Circuit. CLICK HERE to send Gene a message.

Warning & Disclaimer: The pages, articles and comments on IPWatchdog.com do not constitute legal advice, nor do they create any attorney-client relationship. The articles published express the personal opinion and views of the author and should not be attributed to the author’s employer, clients or the sponsors of IPWatchdog.com. Read more.

Discuss this

There are currently 17 Comments comments. Join the discussion.

  1. David October 17, 2017 11:47 am

    Has the Federal Circuit declared war against big pharma?

  2. Tiburon October 17, 2017 12:55 pm

    Like I said [1], sneaky tricks to undo AIA will not be tolerated.

    Patents are now completely dead.

    [1] http://www.ipwatchdog.com/2017/10/15/st-regis-mohawks-bio-letter-senate-judiciary/id=89185

  3. Bemused October 17, 2017 2:19 pm

    Hey Tiburon, why don’t you crawl back under the rock you slithered out from? The only thing that is completely dead are the parts of your brain that govern intelligence and reasoning.

  4. Tiburon October 17, 2017 3:57 pm

    Bemused – not sure if you’re on the other thread, but there we were discussing whether sovereign immunity will be allowed or will measures be taken to ensure the spirit of AIA will be upheld. Turns out, the squashing of sovereign immunity happened faster than anyone thought.

    Do you not agree that patents are completely dead?

  5. Anon October 17, 2017 6:59 pm

    Tiburon,

    It is certainly not the case here that the “quashing of sovereign immunity happened faster than anyone thought.”

    You celebrate an “Ends”and woefully misunderstand the “Means.”

  6. Andrew233 October 17, 2017 9:54 pm

    I know this is off-topic, but has anyone seen the film, “The Patent Scam”? It’s about patent trolls. It can be watched for free on Amazon Prime Video. What are your thoughts on this film?

  7. Patent Investor October 17, 2017 10:30 pm

    Did anybody read the decision? I’m curious, but no so much as to suffer 135 pages of Bryson pontificating. Wouldn’t surprise me in the least if the sovereignty issue determined his ruling and he found the conclusion before the reasoning (would that be the first time a CAFC judge has been accused of that???).

  8. Valuationguy October 18, 2017 9:29 am

    I read it.

    As to the patents being obvious….I think Bryson reach the correct decision based on the facts presented and the law.

    As to the dicta….I frankly think he went way off the reservation in injecting a personal bias into his decision about what Allergen did in selling the patents….something he fairly ADMITTED to in the decision. In fact….it showed his lack of personal and ethical qualifications for the position he holds…and can be used in an appeal to show the appearance of judicial bias against Allergen which might be enough to overturn his decision (correct or not).

    I think that spending 25 or so pages relating the history of the case was excessive.

  9. Patent Investor October 18, 2017 11:39 am

    @7 VG, Well, I certainly have no love of Big Pharma and actually hate their “poor old me” façade in the IPR fight in hopes of getting a niche carved out for them, so them losing their overly broad patents is causing me no lost sleep. But as you said, Bryson shows his unprofessionalism in even bringing up the Mohawk’s involvement other to “allow” them to be named in the litigation. For it to be overturned at the CAFC would have to be a blind luck panel draw to actually overturn one of their, so I’d love to see it happen!

  10. Confused Pharmacist October 20, 2017 7:42 pm

    Good job to that court guy Bryson.

  11. Confused Pharmacist October 20, 2017 9:40 pm

    Fresh News!

    The St. Regis Mohawk tribe is now suing Amazon and Microsoft. There’s no way this will fly…https://arstechnica.com/tech-policy/2017/10/native-american-tribe-sues-amazon-and-microsoft-over-patents

  12. Anon October 21, 2017 10:12 am

    Confused Pharmacist,

    First bit of advice for you: get your news related to the patent world from some other source than ars technica.

    That place is nothing more than a collection of anti-patentists.

    Further, the fact of the matter in the story you link to is that the Tribe has brought suit in Federal Court. Thus, there is no connection between the story you bring and the “gambit” of using american indian tribal ownership as a shield from IPRs (or DJs).

    The story you link to is just a sorry excuse to beat the drum of the “Tr011” narrative – a narrative that ars technica is only too happy to regurgitate.

  13. Confused Pharmacist October 21, 2017 12:34 pm

    Au contraire, there is certainly a connection. Now they are emboldened to bring suits because they are banking on sovereign immunity protecting them from any IPRs instituted after the initial lawsuit has been initiated.

    Further, this site has the opposite problem of Ars, it’s the other side of the coin so to speak.

  14. Patent Investor October 21, 2017 12:52 pm

    @13 Arstechnica is a bunch of techies denigrating all things computer and software patent. Mainly it seems because they are mad they didn’t come up with it first. This site has many patent attorneys and patent players with infinite more knowledge of patent law and patent process than the whole of arstechnica and its commenters. If you ever want to see the human version of “ducks on a June bug”, just post a pro-patent comment in an arstechnica article. Must say, I’ve done it before mainly for entertainment value, it fails to disappoint.

    And that phrase “emboldened”, to me, smacks of prejudice. As in “How dare those pesky Indians assume to utilize the US court system for their own gain”. I find it WAY too funny that somebody finds an unintended loophole and the righteous get indignant for game playing. The AIA was littered with intentional loopholes that the PTO used just as intended to get us to the cr@phole we are in now.

  15. Anon October 21, 2017 2:31 pm

    Confused Pharmacist,

    Once the tribe is involved in the lawsuit – IN THAT LAWSUIT there exists the ability to attack the patents.

    The “connection” you see, the inoculation from the parallel attack by IPR, does not do the “inoculation” that you may be thinking of.

    Further, as Patent Investor points out, there is a world of difference – and NOT just viewpoint difference – between a site such as this and ars technica.

    Your “opposite problem” is simply incorrect. As I have described in the past, those patent attorneys who work in the technical spaces have TWO feet – one in each world of technical and legal. The lemming-speak at ars technica, may have one foot in the technical, but are almost always containing zero actaul knowledge of the legal side of things.

    Yes, there is a huge contrast (almost an opposite viewpoint) of the combination of tech and law issues.

    But that only shows just how bad it is over at ars technica.

    And that is precisely why I made the suggestion to you that you do NOT obtain your inputs to the combination of legal and technical matters that the patent world brings.

  16. Bing October 23, 2017 7:27 am

    NPE issue, to the max. Res ipsa.

    Next.

  17. Joachim CS Martillo October 24, 2017 3:13 pm

    It might be worthwhile to investigate the history of Indian Law jurisprudence and abiding anti-native prejudice in Texas.

    In general, natives have almost invariably received the short-end of the stick if issues of Indian Law arise, and when lawyers for natives find an obscure cut-out, which gives some benefit to natives after centuries of abuse, immediately white racists, who have benefited so much from dispossession of the natives, look for a way to dispossess natives even more.

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