A Federal judge raised questions about the legitimacy of Allergan plc Ordinary Shares (NYSE:AGN)’s patent deal with the Native American Mohawk tribe during a hearing on Friday.
The court case grew to a new level of intensity after the Federal Judge asked whether the agreement between the company and the Mohawk tribe was a “sham.” The judge also ordered the company to reveal whether it plans to include the Saint Regis Mohawk tribe as a co-plaintiff in the patent infringement suit against Restasis. The presiding Judge, William Bryson pointed out that Allergan told him that they would include the tribe as a co-plaintiff. This was on September 8 after the patent infringement case went to trial.
“No motion to join the Tribe has been forthcoming during the month since,” stated Judge Bryson.
The judge’s question might expose the company to further legal charges against the company, in regards to the immunity of the tribe in a separate legal venue according to law professor Dan Ravicher. Allergan has been accused of anti-competitive practices by transferring its patent to the Mohawk tribe. The intellectual property rights have been challenged by rivals seeking a piece of the generic medicines market in the U.S.
The Mohawk tribe reportedly went to court a month ago after taking possession of the patents in a bid to persuade the court to throw out the challenge against the intellectual property. Allergan reportedly awarded $13.75M to the tribe and this amount was paid upfront as well as a $15 million per year royalty deal. The company also stated that the tribe’s pursuit of a dismissal had nothing to do with the ongoing federal case.
Professor Ravicher who teaches law at the University of Miami stated that the company will relinquish its tribal immunity if the tribe becomes a co-plaintiff in the federal court. This could mean that the chances of the company winning the case will reduce drastically. The company’s stock gained following the revelation about the strategic plan with the native tribe.
Allergan stock closed the latest trading session on Friday at $206.75 after tanking by 1.22 percent from the previous close.