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Did Tribes Find Pass Around Patent Review?

By William Vogeler, Esq. on October 02, 2017 | Last updated on March 21, 2019

If you thought Native American tribes just made money from casinos, you don't know the Mandan, Hidatsa, and Arikara Nation.

The tribes, with about 15,000 members, occupy about one million acres in North Dakota. Most members live elsewhere due to poor conditions on the tribal lands.

Unlike many Native American tribes, however, the North Dakota tribes don't survive solely on casino money. In addition to oil rights, the Mandan, Hidatsa, and Arikara Nation owns a significant technology patent.

In a land that has been ravaged by an oil boom, it must have seemed like a God-send when a tech company transferred its patent to the tribes. Prowire, LLC, was in the midst of litigation against Apple, Inc., claiming that the iPad 4 infringed on its patent.

It was, however, a legal strategy that now seems to be part of a trend. Companies are transferring their patents to Native American tribes in order to avoid a patent procedure called inter partes review, or IPR.

"Because it's faster and cheaper than the courts, IPR has been one of the most efficient ways to get rid of bad patents," reported ArsTechnica. "That has made it loved by tech companies, who are often patent defendants--and hated by the drug companies, who are usually asserting their patents against generic competitors."

Because Native American tribes are sovereign nations within the United States, however, they are immune from the IPR process. That's why Allergan pays the New York-based St. Regis Mohawk Tribe $15 million a year to license its own -- previously -- patents.

Patent Holding?

The validity of sovereign immunity in patent law is still an open question. The courts have turned back sovereign immunity in other cases.

The U.S. Supreme Court held earlier this year that a Mohegan tribe's driver was not immune from liability in a car crash, and the U.S. Ninth Circuit Court of Appeals said tribes are subject to federal lending laws. Legal scholars say the court and the federal government have "progressively and systematically diminished" Native Americans sovereignty rights.

However, the patent maneuver has worked so far. Science columnist Derek Lowe, following the Allergan deal with the Mohawk tribe, said it will take an act of Congress to undo it -- literally.

The Mandan, Hidatsa and Arikara Nation knows it, too. If that happens, at least they'll have casinos and oil.

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