In a fight over the intellectual property of American companies, Sen. Claire McCaskill, D-Mo., has inadvertently stepped onto the third rail of politics – the sovereignty of nations.
In the battle between tech companies, patents have always been the holy grail. Whoever holds the patent first, wins the game.
The same has become true of the battle between pharmaceutical companies and generic drug manufacturers — the battle over patents has become big business.
So big, in fact, that Congress in 2012 passed the America Invents Act and created the Patent Trial and Appeal Board to oversee patent challenges and to utilize a patent review process which the tech industry supported as it would help dismiss frivolous patent challenges by so-called "patent trolls."
Like most things Congress undertakes, it was well-intended but had an unintended outcome: The process began to be abused by so-called "patent trolls" (hedge fund managers that used the process to try to short certain drug prices). Hedge fund manager Kyle Bass is just one notable player who gamed the system for his personal gain.
Instead of stepping in to fix abuse of the process, Congress did nothing.
In true congressional fashion, they broke the system then did nothing to fix the problem.
In response, to protect their intellectual property, American companies have begun to protect their patents by selling their intellectual property to universities and Native American tribes – both of which possess the benefits of sovereignty so as to protect the patents from the overly bureaucratic processes and vulnerability to patent trolls.
In 2017, the University of Florida shielded its research from intellectual property rights challenges on sovereign immunity grounds. This was followed by the University of Maryland invoking its standing as a state sovereign to dismiss another patent review board challenge.
So, what does McCaskill have to do with all of this?
Last month, in order to protect their patents, pharmaceutical company Allergan partnered with the Native American St. Regis Mohawk Tribe. In the deal, the tribe assumes ownership of Allergan's patents and exclusively licenses those patents back to Allergan. In exchange for the Mohawk's sovereign immunity protections, Allergan paid the tribe $13.75 million up front, as well as $15 million annually in royalties.
It may sound strange, but it's what companies are being driven to do in order to protect their intellectual property – an age-old "don't hate the player, hate the game" situation.
It's a win-win for companies and for tribes. Allergan gets to preserve its patents for its research for which they've paid millions and millions of dollars. The tribes get to diversify their economies beyond the casinos upon which their communities depend.
But McCaskill doesn't like it. Not one bit.
She is challenging the tribe's sovereign immunity, and it's not the first time she's attacked Native Americans' rights.
In 2014, McCaskill led an assault on the 8(a) Program, a program utilized by the Small Business Administration which helps businesses servicing poor economic areas or owned by economically-disadvantaged individuals. Many businesses on reservations qualify for the 8(a) Program and rely on it to serve Native American communities.
In a press release at the time, McCaskill attempted to "crack down" on the program, using false claims that it was circumventing the government's contracting process. It didn't.
Even McCaskill's fellow Democrats slammed her crusade including then-Sen. Mark Begich, D-Alaska. In fact, McCaskill's crusade is raising eyebrows about possible bias against Native Americans, since this isn't the first time they've been her target.
It also raises the question, why wasn't McCaskill concerned when state-run universities were shielding intellectual property? But suddenly, she is concerned when a Native American sovereign nation utilizes the exact same procedure at their disposal.
Perhaps it's because she doesn't like the political affiliations of their donations – tribes often contribute to Republicans – or perhaps she simply doesn't like Native Americans?
Only McCaskill knows her true intentions, but it certainly appears that what's good for the goose on the protection of intellectual property is not always good for the gander.
Imagine that, a hypocritical Democrat! It's been a while since we've seen one of those in Washington.
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