“Apple gets sued for patent infringement dozens of times each year, mostly by little-known shell companies with no products — the types of companies often derided as ‘patent trolls,'” Joe Mullin reports for Ars Technica. “But the newest lawsuit seeking royalty payments from iPad sales is likely a first: the recently created plaintiff, MEC Resources LLC, is wholly owned by a Native American tribe. The MEC lawsuit appears to be using Native American legal rights to avoid having the US Patent Office perform an ‘inter partes review’ that could invalidate the patent.”
“MEC Resources is wholly owned by the Mandan, Hidatsa, and Arikara Nation, also known as the Three Affiliated Tribes. Neither MEC’s CEO nor its lawyers responded to a request for comment from Ars. However, recent developments in other patent cases shed light on why there’s suddenly a connection between patents and Native Americans,” Mullin reports. “Earlier this month, the New York-based St. Regis Mohawk Tribe disclosed that it was given a set of valuable patents belonging to the drug company Allergan. In return for holding on to those patents, which were licensed back to Allergan, the company would pay the tribe an annual royalty of $15 million, as long as the patents remained valid.”
“Both the tribe and Allergan were explicit about why they executed the deal: to avoid having the US Patent Office review their patents in a procedure called inter partes review, or IPR,” Mullin reports. “But there are certain parties that can’t be challenged with an IPR because of ‘sovereign immunity,’ an old legal concept codified in the 11th Amendment of the US Constitution.”
“Even though sovereign immunity has helped at least two public universities dodge IPRs, it isn’t clear that the strategy will work for Native American tribes,” Mullin reports. “Their sovereign immunity is granted by Congress and, thus, can be revoked or changed by Congress. States, on the other hand, derive their sovereign immunity from the 11th Amendment.”
Read more in the full article here.
MacDailyNews Take: This seems to be a clear abuse of a loophole that Congress will likely have to look at closing.