In case you missed it, Allergan’s Restasis patent fight took a sudden turn yesterday, when federal judge William Bryson ruled in Texas to invalidate six of the company’s patents. That will not come as welcome news to either Allergan nor to the St. Regis Mohawk Nation, to whom the company (in)famously transferred those patent rights. Update: the case is indeed in a Texas district, but Judge Bryson is actually designated from the Court of Appeals for the Federal Circuit to handle it. Reading his opinion, I was very impressed with its detailed handling of intellectual property law, and a CAFC judge is where you would go for that!
The patent dispute itself deals largely with whether there is a real difference between a particular formulation of cyclosporin, castor oil, and emulsifying agents and the range of possible formulations from Allergan’s initial patent filings. One of Allergan’s witnesses testified that the efficacy of a particular 0.05% formulation (Restasis itself) was surprising and unexpected, which those of you wise in the patent art will recognize as the jungle call of Non-obviousness. This contention had been a key part of the prosecution of some of Allergan’s later patent filings, which otherwise would have run into problems due to their own prior art (they actually persuaded the patent examiner to reverse course).
The case itself was Allergan suing four generic companies, claiming that they were violating the Hatch-Waxman act by infringing those Allergan patents, and the generic folks claiming that the patents were invalid from the start – not only was the particular formulation obvious from the earlier patents, but the clinical results on various combinations were in the public record by the time Allergan filed on the specific one. The judge found that while Allergan made its case for infringement, they did not do so for nonobviousness, and that the patents in question are invalid from the start. The opinion is 135 pages long, and most of it is a painstaking and ferociously detailed account of the issues above and the relative merits of what was presented at trial. If you feel a need to dig into the fine details of this method of overturning a patent, close study of this document will give you a concentrated course in it with copious case citations, but very few people without law degrees will be that motivated.
To make matters worse, the judge added about ten pages of commentary in a separate opinion about that exact deal, calling its legality into question and basically laying out the strategies that could best be used to challenge it in court. (This came up to make sure that the decision could not be challenged on the basis that the relevant parties had not been included). My favorite line from this opinion is: “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“. I think that’s exactly the situation. The question is whether sovereign immunity can be commodified in this way, and it looks like the answer is going to be “No, now that you bring it up, it can’t”. Says Judge Bryson:
“. . .sovereign immunity should not be treated as a monetizable commodity that can be purchased by private entities as part of a scheme to evade their legal responsibilities. It is not an inexhaustible asset that can be sold to any party that might find it convenient to purchase immunity from suit.”
Allergan is naturally going to appeal this decision, which would take things to the Court of Appeals for the Federal Circuit, and it’ll be interesting to see how far this case gets. It has the potential to end up before the Supreme Court, if someone wants to try to fight it that far, because it raises some fairly high-level issues – not least, as Judge Bryson noted, the potential to undermine the entire patent review system established by Congress in 2012. Inter partes review may or may not be a good idea in its present form, but it’s safe to say that (as I put it when this deal happened) the plan was not that patents would be so reviewed unless you paid off some Indian tribe, in which case you could flip the PTO the bird and walk off laughing.
The judge also got off a good line about what seems so wrong about this whole deal. Allergan, he said, is trying to take advantage of “the considerable benefits of the U.S. patent system without accepting the limits that Congress has placed on those benefits“. Exactly. Heads I win, tails you lose. And this sort of egregrious loophole maneuver has given the drug industry yet another self-inflicted black eye, and probably to no purpose whatsoever. Smooth move, guys. How much did you pay for the advice to try this one out, exactly?