Use of Tribeā€™s Sovereignty Called Risk to Patent System

Allergan Plc faced a skeptical appeals court Monday as the company defended its use of an American Indian tribeā€™s sovereign immunity to avoid challenges to its patents from generic-drug makers.

Two of three judges on the U.S. Court of Appeals for the Federal Circuit in Washington questioned whether Allergan was seeking to circumvent review by the Patent and Trademark Office. The reviews are widely used by technology companies, banks and insurers who say it offers a way to weed out bad patents.

The court is considering whether patents for Allerganā€™s blockbuster dry-eye drug Restasis can still be challenged despite being transferred to a tribe that claims sovereign immunity. The generic-drug makers Mylan NV and Teva Pharmaceutical Industries Ltd. claim that the patents are little different than earlier, expired ones.

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