A Sovereign Shield

A previously-little known loophole in the patent system, which permits Native American tribes to assert sovereign immunity as defense in inter partes review (IPR) is getting a great deal of attention these days, following an unpopular deal by Allergan to shelter its patents with the Saint Regis Mohawk Tribe. In brief, Allergan transferred a set of pharmaceutical patents to the Tribe, with the Tribe in turn granting Allergan an exclusive license…all so that the patents could be shielded from the jurisdiction of the PTAB.

It is not difficult to imagine how this tactic could be enthusiastically adopted by patent trolls, and, indeed, the tech sector has started to see hints of that possibility. Ars Technica reports that Apple has recently been sued by a non-practicing entity wholly owned by Native American tribes.

Congress, it appears, may be paying attention. Sen. Claire McCaskill (D­-Mo) recently released a draft bill that would seek to abrogate sovereign immunity in IPR proceedings – a move that may cause its own outcry. Stay tuned.