Allergan PLC has made an unorthodox agreement with the St. Regis Mohawk Tribe that could protect patents on a key Allergan product, the dry eye medication Restasis.

Allergan US:AGN shot up 1.9% in heavy Friday afternoon trade after the news.

Under the agreement, the New York state-based St. Regis Mohawk Tribe now owns patents on Restasis—which are expected to expire at the end of August 2024—and has granted Allergan exclusive licenses on the product.

The St. Regis Mohawk Tribe is filing to dismiss patent challenges made through the U.S. Patent and Trade Office’s inter partes review process “based on their sovereign immunity from IPR challenges,” Allergan said, although the agreement doesn’t affect recent patent litigation in a Texas federal court.

Teva Pharmaceutical Industries Ltd. TEVA, +2.04% , Mylan NV MYL, -2.66% and Akorn Inc. Inc. US:AKRX have all filed IPR challenges related to Restasis.

Allergan will pay the St. Regis Mohawk Tribe $13.75 million upfront and $15 million in annual royalties; an Allergan spokesperson said the latter is for commercial rights to Restasis.

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State entities can be protected from civil litigation unless they opt out of it, and “here you have a sovereign entity with a federally recognized Native American tribe, the immunity wasn’t waived, and I suppose patent challenges in IPRs are close enough to civil litigation,” said Dmitry Karshtedt, law professor at George Washington Law School.

The St. Regis Mohawk Tribe and its lawyer approached Allergan about the agreement, according to a Friday Allergan statement, and there is case law precedent of universities using this approach.

The Allergan agreement is “part of our overall economic diversification strategy,” the St. Regis Mohawk Tribal Council said in a statement. “We realize that we cannot depend solely on casino revenues and, in order for us to be self-reliant, we must enter into diverse business sectors to address the chronically unmet needs of the Akwesasne community; such as housing, employment, education, health care, cultural and language preservation.”

his is the first such agreement Allergan has made and is the only such one with the St. Regis Mohawk Tribe, according to Lisa Brown, Allergan’s associate director, media relations.

Brown declined to comment on when Allergan expects the Restasis patents to expire, saying it would be speculative.

However, due to ongoing federal court litigation, a generic Restasis “could definitely happen before 2024,” she said.

See: Allergan reports Q2 profit, revenue beats

Asked about criticism of the unusual approach, Brown said, “We invented Restasis and according to the system that was set up by Congress, we still hold these patents. So this is a move to protect our intellectual property.”

The Friday announcement is “extremely important for the industry to track,” said Evercore ISI analyst Umer Raffat. “Big diligence issue for me: in theory, other companies can now try to transfer their key patents to sovereign entities and thus, avoid IPR challenges...in that scenario, will courts allow that to happen?”

In this specific scenario, “it seems like it’s a strategy that’s going to be effective,” and the patents likely have a good chance of surviving until 2024, said Jacob Sherkow, an associate professor at New York Law School.

Branded drug companies tend to be more successful than generic drug companies in the IPR process, he said, but “when you’re dealing with a franchise worth hundreds of millions or billions each year, you don’t want to take any chances.”

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Restasis is a major product for Allergan—it brought in $336 million in the latest quarter, second to only Allergan’s best-selling Botox—and Wall Street has been closely watching generic competition for it.