Protection: A legal loophole sees the tribe holding tech patents

A Native American tribe is suing Amazon and Microsoft after accusing the tech giants of breaching patent laws.

The Saint Regis Mohawk tribe will take on two of the world’s biggest companies in the federal court in Virginia, in one of the more unusual courtroom dramas.

In a quirk of American law, the tribe owns the patent for supercomputer technology, which it believes has been copied by the Silicon Valley giants.

In the US, Native American tribes have been handed numerous patents by tech and pharmaceutical companies because they are covered by so-called sovereign status. This means that any rights the tribes hold are shielded from administrative review – so when a patent expires the tribe can prevent it from being copied by rival firms, as is usually the case.

In exchange for looking after the patents, the tribes are paid by the companies that handed them over. But it means the tribe is also legally responsible for any court actions.

As a result, it has to lead the way in suing Amazon and Microsoft over alleged breaches in data-processing technology.

On Wednesday it submitted a filing against Microsoft to the US district court for the eastern district of Virginia. If successful the tribe could win damages and royalties.

The Saint Regis tribe struck a deal for the supercomputer patent with SRC Labs, which invented the technology. However, these deals are open to increasing scrutiny.

The tribe had already struck a similar deal with drug maker Allergan over the patent for an eye medicine called Restasis. Its partnership with Allergan netted it £10.5million, with the firm transferring the patents to it and then licensing them.

But in a hearing earlier this week, four of the Restasis patents were ruled invalid by a court in Texas.

In his ruling on the agreement reached by Allergan and the Saint Regis Mohawk tribe, US circuit judge William Bryson wrote: ‘Sovereign immunity should not be treated as a monetisable commodity that can be purchased by private entities as part of a scheme to evade legal responsibilities.’

Handing Native American tribes patents in this manner has also sparked controversy and drawn criticism from lawmakers, some of whom have called the moves ‘a sham’.

Missouri senator Claire McCaskill has introduced a bill to ban attempts to take advantage of tribal sovereignty.

She said: ‘This is one of the most brazen and absurd loopholes I’ve ever seen, and it should be illegal.’

The tribe says that its partnerships on high-tech patents are vital to its plans to diversify its economy, after its traditional income from running casinos stagnated.

In its case against Microsoft, the Saint Regis tribe said: ‘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.’

Microsoft and Amazon did not comment.