Senator McCaskill drafts bill in response to Allergan patent maneuver

By Michael Erman

NEW YORK (Reuters) - Democratic U.S. Senator Claire McCaskill on Thursday said she drafted a bill stating that tribal sovereign immunity cannot be used to block U.S. Patent and Trademark Office review of a patent.

Drugmaker Allergan Plc made a deal to transfer some of its patents to a Native American tribe two weeks ago in order to shield them from review.

McCaskill's response follows a bipartisan U.S. House of Representatives committee decision to investigate the deal earlier this week and previous calls by Democratic Senators for a probe.

"Any thinking person would look at what this company did and say, 'That should be illegal.' Well, I agree," McCaskill said in a statement. "Congress never imagined tribes would allow themselves to be used by pharmaceutical companies to avoid challenges to patents, and this bill will shut the practice down before others follow suit."

Allergan was not immediately available for comment.

Allergan said last month that it was transferring patents on its blockbuster dry eye medication Restasis to New York's Saint Regis Mohawk Tribe, which agreed to exclusively license them back to the company in exchange for ongoing payments.

The Tribe issued a statement expressing outrage at McCaskill's move and accused the senator of engaging in double standards. It said the proposed legislation "specifically targets Indian tribes, yet exempts state universities and other sovereign governments engaged in the very same IPR (inter partes review) process."

Allergan has argued that the legal maneuver is aimed at removing administrative patent challenges through inter partes review by the U.S. Patent Trial and Appeal Board, and not challenges in federal court. The drugmaker said it believes that the patents should not be subject to the IPR process - which Allergan has called flawed and broken - because of the tribe's sovereign immunity.

The company still faces a challenge to the patents in federal court.

(Additional reporting by Bill Berkrot in New York; Editing by David Gregorio)