Court rules Allergan’s Restasis patents invalid, criticizes Native American deal

A federal court ruled Monday that Allergan’s patents for Restasis were invalid “based on obviousness,” opening the door to generic competition.

Patents for Restasis (cyclosporine ophthalmic emulsion 0.05%), Allergan’s dry eye drug that brings in $1.5 billion annually, were set to expire in 2014; however, the company filed additional patents extending protections to 2024.

The ruling from the U.S. District Court for the Eastern District of Texas found the defendants in the case — four generic pharmaceutical companies including Teva Pharmaceutical Industries — proved the asserted claims for the Restasis patents were invalid “by clear and convincing evidence.”

Allergan will appeal the decision, the company announced in a press release.

“We are disappointed by the Federal District Court’s decision on the Restasis patents. We are carefully reviewing the decision and are considering all options,” Robert D. Bailey, Allergan’s chief legal officer, said in the release. “Allergan remains committed to vigorously defending the intellectual property of our products, which allows us to continue to invest in developing and bringing forward new medicines for millions of patients.”

The patents under question were the same patents the pharmaceutical company gave to the Saint Regis Mohawk Tribe in September in a controversial protection deal. Under the deal, the New York-based Native American tribe received the patents and a $13.75 million payment, along with the eligibility to receive another $15 million in annual royalties as long as the patents held. Meanwhile, Allergan will retain the licensing rights to the drug.

In a memorandum to Monday’s decision, U.S. District Judge William C. Bryson criticized that deal, saying Allergan’s motivation for transferring its patents was an attempt to avoid the inter partes review process of the patents.

“The Court has serious concerns about the legitimacy of the tactic that Allergan and the Tribe have employed,” Bryson wrote.

He questioned the deal’s validity and wrote that Allergan was attempting to “enjoy the considerable benefits of the U.S. patent system without accepting the limits that Congress has placed on those benefits.”

Members of the House Committee on Oversight and Government Reform announced earlier this month that it was also looking into the deal’s validity, while Missouri Sen. Clare McCaskill introduced legislation to keep such sovereign immunity deals from interfering in the inter partes review process. – by Rebecca L. Forand