Casinos Aren’t Enough as Native Tribe Makes Deal on Drug Patents

For one Native American tribe, the money’s not in the casino anymore. Patents are the future.

On Friday, drugmaker Allergan Plc said it would transfer intellectual property on a blockbuster drug to the Saint Regis Mohawk Tribe, in order to avoid attacks on the medicine’s patents. For the tribe, it’s a new revenue stream that could lead to more down the road.

“Our options beyond the casino are few and far between so an opportunity like this is attractive to us, because we have a lot of unmet needs for our community,” said Saint Regis Mohawk Tribe’s general counsel Dale White. The agreement will pay the tribe $13.75 million, plus $15 million a year in annual revenues, according to Allergan.

There are 13,000 Saint Regis Mohawk Tribe members nationwide, and they own a six-mile-by-six-mile square piece of land in a sparsely populated part of upstate New York. The Akwesasne Mohawk Casino Resort, is one of the tribe’s main sources of revenue. It’s open 24 hours a day, has 1,600 slot machines, 30 table games and a poker room, according to the website.

The attraction for a drug company is simple: The tribe has sovereignty, setting it apart from some legal proceedings — such as expedited patent reviews. For Allergan, it can serve as a small legal island guarding its valuable intellectual property.

Patent Attack

Restasis’s patents are under attack on two fronts, and moving the rights may shield them on one side. Last year, the drug — which treats chronic dry eye — brought in $1.49 billion in sales.

“I would expect it creates a playbook for other cases down the road both for us and for others,” Bob Bailey, Allergan’s chief legal officer, said of the agreement with the tribe.

Shares of Allergan, which is based in the U.S., ended Friday up 2.5 percent.

There’s a legal basis for the strategy. The Patent Trial and Appeal Board recently ruled in two cases that state-university-owned patents aren’t subject to the review process because states have sovereign immunity. In those cases, however, the university was the original owner of the patents.

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