UPDATE 1-U.S. court rejects Allergan bid to shield patents through tribe deal

(Adds background, Allergan declining comment)

July 20 (Reuters) - A U.S. appeals court on Friday rejected a novel strategy adopted by drug company Allergan PLC to shield patents from review by an administrative court by transferring them to a Native American tribe.

The U.S. Court of Appeals for the Federal Circuit said a tribunal run by the U.S. Patent and Trademark Office has authority to review the validity of patents covering Allergan's dry eye drug Restasis.

Allergan spokeswoman Amy Rose declined to comment.

The company in September 2017 transferred the patents to New York's Saint Regis Mohawk Tribe, claiming the tribe's sovereign status meant the patents were immune from administrative review.

The tribe took legal ownership of the patents and licensed them back to Allergan in exchange for ongoing payments.

After announcing the deal, the tribe asked the U.S. Patent Trial and Appeal Board to dismiss a challenge to the validity of the patents brought by generic drug company Mylan NV, which was seeking to bring its own version of Restasis to market.

U.S. lawmakers from both political parties criticized Allergans move, saying it could be used by the pharmaceutical industry to prevent sales of lower-cost generic drugs. (Reporting by Jan Wolfe Editing by Phil Berlowitz and Marguerita Choy)