×

Mohawk tribe sues Microsoft, Amazon for patent infringement

  • SRC Labs transferred some patent rights to the Saint Regis Mohawk Tribe in August.
  • The tribe filed lawsuits against Microsoft and Amazon, claiming patent infringement.
  • The tribe attracted attention last month after Allergan partnered with it, assigning the rights to the drug Restasis to the tribe.
  • The Allergan deal has drawn scrutiny from competitors and lawmakers.
  • On Monday, a Texas judge invalidated Allergan's patents on Restasis, saying the patents cover obvious ideas. Allergan plans to appeal.
Saint Regis Mohawk Tribe Chief Eric Thompson next to the Saint Lawrence River in upstate New York. The tribe aims to diversify its economy through patent partnerships with technology companies.
Harriet Taylor | CNBC
Saint Regis Mohawk Tribe Chief Eric Thompson next to the Saint Lawrence River in upstate New York. The tribe aims to diversify its economy through patent partnerships with technology companies.

The Saint Regis Mohawk Tribe, which captured headlines last month for its unusual patent deal with drugmaker Allergan, is doubling down in the patent space, Wednesday filing lawsuits against Microsoft and Amazon claiming patent infringement.

The tribe is a co-plaintiff with small tech firm SRC Labs, which claims the tech giants have been infringing its patents on data processing technologies for years. The company and the tribe are seeking damages and royalties.

SRC transferred the patents to the tribe in early August, a month before the tribe's partnership with Allergan captured national headlines. Native American tribes possess sovereign immunity to patent challenges through a system known as inter partes review, and the partnerships with both Allergan and SRC are designed to shield the patents from those challenges.

The Allergan partnership drew backlash from at least nine members of Congress, with one, Sen. Claire McCaskill, introducing legislation seeking to abrogate tribal sovereign immunity in this context.

Allergan said it struck the deal with the tribe to avoid the "double jeopardy" of defending its patents, on the blockbuster eye drug Restasis, in both the federal court system and through IPR challenges from generic-drug makers. Monday, a federal court judge invalidated the patents. Allergan said it will appeal.

The partnership with the SRC is designed to protect the patents from a counter-challenge from Microsoft and Amazon through the IPR system. Critics of IPR say it can tie patent holders up in perpetual legal limbo as challengers file repeated complaints, whereas patent challenges through federal courts are decisive. Proponents of IPR say it's vital for dismantling bad patents.

The tribe says its patent partnerships are part of its efforts to economically diversify, noting gaming revenue from a casino it operates has leveled off in recent years, and that it has significant health and economic challenges in its community. In the Allergan partnership, the pharmaceutical company paid the tribe $13.75 million after transferring the patent rights and then licensing them back exclusively.

The terms of the deal with SRC weren't immediately known.

"To overcome these economic disadvantages, the tribe took steps to diversify its economy with investments in innovative business and various enterprises to foster jobs and entrepreneurship," the tribe said in its complaint against Microsoft, filed Wednesday morning in the U.S. District Court for the Eastern District of Virginia. The Amazon complaint was filed in the same court.

The tribe also said it's creating a technology and innovation center to promote modernization of its businesses, create revenue and jobs and "promote the education of Mohawks in the fields of science, technology, engineering and math."

Microsoft and Amazon didn't immediately respond to requests for comment.