Pay-to-Play for Sovereign Immunity? A New Strategy Employed by Drug Patent Holders

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By Seth Parent

In May the Supreme Court decided TC Heartland, requiring patent infringement claims be brought where the defendant either “resides” or has an “established place of business” (rather than in the notoriously patent-holder friendly Eastern District of Texas). This change has led patent-holding companies to search for new strategies to increase the efficiency of their business model, and in turn, their profits.

These patent-holding companies, or “patent trolls,” as they are often referred to, may have just unveiled one such strategy. Following news of Allergan’s announcement that it was transferring title of six different pharmaceutical patents to the St. Regis Mohawk Tribe in September, patent holding company SRC Labs has now elected to pursue a similar strategy. Not only did these deals transfer the patents to the St. Regis tribe, they also provided the tribe with several million dollars upfront in addition to several million per annum. Continue reading