BLS Letter To Grassley Feinstein 10-3-17 FINAL

Brenton L. Saunders T 862.261.
8801 Morris Corporate Center III

Chairman, President and F 862.261.8003 400 Interpace Parkway
Chief Executive Officer Parsippany, NJ 07054
www.allergan.com
October 3, 2017
The Honorable Charles E. Grassley The Honorable Dianne Feinstein

Chairman Ranking Member
Committee on the Judiciary Committee on the Judiciary
United States Senate United States Senate
Washington, DC 20510 Washington, DC 20510
Dear Chairman Grassley and Ranking Member Feinstein:
On September 27, Senators Hassan, Casey, Brown, and Blumenthal wrote to you asking that the
Judiciary Committee investigate the recent agreement between Allergan and the Saint Regis
Mohawk Tribe (SRMT) pursuant to which Allergan transferred all Orange Book listed patents for
RESTASIS (Cyclosporine Ophthalmic Emulsion) 0.05%, an important treatment for chronic dry
eye disease impacting millions of patients, to the SRMT and licensed back commercial rights
related to the product (described in the attached Allergan press release). I am writing to
provide you with Allergans view of the important issues at stake here and to correct certain
misperceptions in the Senators letter.
First, and most importantly, Allergan points out that the Senators September 27, 2017 letter is
incorrect when it asserts that there has been an attempt to shield [the RESTASIS patents]
from review. The opposite is true. Allergan is committed to vigorously defending the
intellectual property that protects its products and has recently completed a Hatch-Waxman
trial in a Federal District Court in Texas which includes attacks on the validity of the patents
covering RESTASIS, and a ruling is anticipated in the near future. To be clear, if the District
Court ruling is adverse to Allergans patent position, and there is an FDA approval of a generic
version of RESTASIS, that product could enter the market many years in advance of the listed
patent expiry dates. Allergans recent agreement with the SRMT has no impact on that case.
As you are aware, Allergan along with the biopharmaceutical industry and others have, for the
past several years, expressed concerns to Congress about how the IPR process, created in the
America Invents Act of 2011 to address concerns relating to patent trolls, has created
unintended and negative consequences. The defects inherent in IPR are clear: (i) it undermines
the delicate balance of the 33 year-old Hatch-Waxman statutory regime, (ii) it has been
implemented by the administrative branch through the not-impartial Patent and Trademark
Office, including changes in claim construction and the presumption of patent validity that have
been designed and implemented with the express purpose of undermining issued patents , and
(iii) it creates an unnecessary and unfair burden on innovators of branded medicines by opening
up patents to parallel and often inconsistently adjudicated challenges before both federal
courts and the Patent Trial and Appeal Board (PTAB).
Additionally, the IPR process has created a situation where patents that have already have been
upheld in the federal court system can be held hostage by entities such as hedge funds with no
involvement in biopharmaceutical development. These reverse trolls and hedge funds seek
to profit from this system by demanding financial payment from biopharmaceutical innovators
in exchange for not filing IPR challenges, or shorting biopharmaceutical company stock and
then filing IPR cases to bring down the stock price. These are blatant forms of market
manipulation facilitated by the IPR process and the PTAB approach to patents. Allergan itself
was the subject of an extortion demand from a hedge fund that threatened to file an IPR case.i
Brenton L. Saunders T 862.261.8801 Morris Corporate Center III
www.allergan.com
-2-
As a consequence of these flaws and incentives for manipulation, the IPR process undercuts
life-saving pharmaceutical innovation and will inevitably result in decreased biopharmaceutical
development, fewer novel treatments for unmet medical need, and the loss of valuable jobs.
Without the assurance of reliable and predictable patent protection, biopharmaceutical
innovators cannot rationally make the necessary and immense investments necessary to
develop new treatments for patients.
Allergan is not alone or even the first in pointing out the problems with the IPR process.ii,iii,iv,v
These articles, written by independent third-party commentators, underscore the issues with
the IPR process. Namely, that administrative branch over-reach through the PTO has negatively
impacted innovation in the U.S. The commentators also underscore the point that the IPR
process is particularly inappropriate for assessing pharmaceutical patents as there is already a
longstanding, Congressionally-created pathway for patent challenges in federal courts pursuant
to the Hatch-Waxman Act of 1984.
In July and September of this year, former Chief Judge of the Federal Circuit Court of Appeals
Paul Michel presented testimony to the House Judiciary Committees Subcommittee on Courts,
Intellectual Property and the Internet, in each case noting specific problems with the IPR
process and the corresponding harm to innovation in our country.vi In September, Judge
Michel noted, After six years, the AIA has caused more harm than good. Earlier this year,
Senator Coons, along with Senators Cotton, Durbin and Hirono, introduced the bipartisan
STRONGER Patents Act of 2017 (S.1390, 115th Congress), designed in part to enhance the
fairness and efficiency of the IPR process.vii Finally, the Supreme Court of the United States will
review the constitutionality of the IPR process in its Fall term.viii Supporting amicus briefs have
been filed by Allergan (along with AbbVie and Celgene), the Pharmaceutical Research and
Manufacturers of America, and Biotechnology Innovation Organization (BIO) along with the
Association of University Technology Managers and the Cato Institute along with the American
Conservative Union Foundation.ix
During the past year, it has also become clear that a certain class of patents were exempt from
the flawed and broken IPR process, solely because they were owned by a sovereign entity that
claimed sovereign immunity a state university. It is against this background that the SRMT
and its counsel approached Allergan in August with an opportunity to strengthen the defense of
the RESTASIS intellectual property in the upcoming IPR proceedings before PTAB. Allergan
evaluated this approach closely, with expert counsel in patent law procedure and sovereign
immunity law. This included a thorough review of recent IPR-related case law such as Covidien
LP v. University of Florida Research Foundation Inc.,x and Neochord, Inc. v. University of
Maryland,xi in which the PTAB dismissed IPR proceedings against the university-owned patents
based upon state university claims of sovereign immunity. Each case involved university-owned
patents that were being threatened or asserted against private industry for damages or
licensing revenue.
Brenton L. Saunders T 862.261.8801 Morris Corporate Center III
www.allergan.com
-3-
In addition to the university patents that were exempted from the IPR process, we understand
that companies other than Allergan have responded to the PTAB rulings on sovereign immunity
by entering into transactions to protect their intellectual property from unnecessary IPR
review.xii
In closing, Allergan urges the Judiciary Committee to review the IPR process, particularly in light
of the forthcoming Supreme Court review, to rectify its infirmities and protect the innovation
that is the lifeblood of the biopharmaceutical industry and the U.S. economy.
Sincerely,
BLS:lm
i Lorelai Laird, Patent Holders Allege Financial Companies are Misusing New Post-Grant Review Process for Profit,
ABA Journal, December 2015.
ii Alden Abbott, et al, Crippling the Innovation Economy: Regulatory Overreach at the Patent Office, Regulatory
Transparency Project of the Federalist Society (August 14, 2017);

iii Alden Abbott, How a Patent Office Agency Undermines Patent Rights and Cripples Innovation and What Can
Be Done About It, Truth on the Market (August 14, 2017);

iv Joanna Shepherd, Disrupting the Balance: The Conflict Between Hatch-Waxman and Inter Partes Review,
New York University Journal of Intellectual Property and Entertainment Law (Fall 2016);
v Joanna Shepherd, The Allergan-Mohawk deal: An Ingenious Strategy to Avoid an Unbalanced IPR Process,
Truth on the Market (September 14, 2017).

vi The Impact of Bad Patents on American Business, Subcomm. on Courts, Intellectual Property and the Internet, 115th
Cong. 1st Sess. (2017) (Statement and Supplemental Statement of Judge Paul R. Michel (Ret.), former Chief Judge United
States Court of Appeals for the Federal Circuit).
vii A Bipartisan Call for Stronger Patents, Law360, June 21, 2017.
viii Oil States Energy Services, LLC v. Greenes Energy Group, LLC, No. 16-712, __ U.S.__ (2017).
ix Brief for Amici Curiae Abbvie, Inc, Allergan, Inc., and Celgene Corp. in Support of Petitioner, Oil States Energy Services,
LLC v. Greenes Energy Group, LLC, No. 16-712, __ U.S.__ (August 31, 2017); Brief of Biotechnology Innovation
Organization (BIO) and Assoc. of Univ. Technology Managers (AUTM) as Amici Curiae in Support of Petitioner, Oil States
Energy Services, LLC v. Greenes Energy Group, LLC, No. 16-712, __ U.S.__ (August 31, 2017); Brief of the Cato Institute
and the American Conservative Union Foundation as Amici Curiae Supporting Petitioner, Oil States Energy Services,
LLC v. Greenes Energy Group, LLC, No. 16-712, __ U.S.__ (August 31, 2017); Brief of the Pharmaceutical Research and
Manufacturers of America as Amicus Curiae in Support of Petitioner, Oil States Energy Services, LLC v. Greenes Energy
Group, LLC, No. 16-712, __ U.S.__ (August 31, 2017).
x IPR2016-1274-1276, Paper 21 (PTAB Jan. 25, 2017)
xi IPR 2016-00208, Paper 28 (PTAB May 23, 2017)
xii Matthew Bultman. Patent Owner in Apple IPad Suit Has Ties to ND Tribe, Law360, September 25, 2017.

BLS Letter To Grassley Feinstein 10-3-17 FINAL

Uploaded by

Copyright:

Available Formats

BLS Letter To Grassley Feinstein 10-3-17 FINAL

Uploaded by

Document Information

Original Title

Copyright

Available Formats

Share this document

Share or Embed Document

Sharing Options

Did you find this document useful?

Is this content inappropriate?

Copyright:

Available Formats

BLS Letter To Grassley Feinstein 10-3-17 FINAL

Uploaded by

Copyright:

Available Formats

Brenton L. Saunders T 862.261.

8801 Morris Corporate Center III

The Honorable Charles E. Grassley The Honorable Dianne Feinstein

Dear Chairman Grassley and Ranking Member Feinstein:

Transparency Project of the Federalist Society (August 14, 2017);

Be Done About It, Truth on the Market (August 14, 2017);

Truth on the Market (September 14, 2017).

You might also like