If you thought the pharmaceutical industry couldn't possibly sink any lower in its pursuit of profits, Allergan just proved you wrong. The geniuses at Allergan came up with the brilliant idea of turning over one of its patents on the dry-eye drug Restasis to the Mohawk tribe. The tribe will then lease the patent back to the Allergan.
The reason for this silly trick is that the Mohawk tribe, based on its sovereign status, is disputing the right of generic competitors to pursue a case before the Patent Trial and Appeal Board. This board is supposed to determine whether a patent was appropriately granted in the first place.
The article may have left readers confused about the issues involved when it reported without comment a statement by Allergan's lawyer, which claimed that they were trying to avoid double jeopardy since the company also faces a case in federal court. The additional background here is that there is an enormous asymmetry in legal cases involving patents. The patent holder is fighting for the right to sell a drug in a monopoly market, which means monopoly profits. The challenger(s) is fighting for the right to be able to sell the drug in a competitive market, which means normal profits.
In this context, the patent holder has an enormous incentive to delay and run up the cost of litigation, which may quickly prove unprofitable to the generic competitor. The Patent Trial and Appeal Board was created to allow a quicker lower cost process to challenge invalid patents. It is also worth noting that Allergan's revenue on this drug (more than $1.3 billion annually, according to the article) can be thought of as a tax on the American public. Without this patent, the drug would likely sell for 20 percent or less of its patent-protected price.