For as long as a Hero has this item at the entrance of your dungeon or in your dungeon, you cannot play spells, even if you not the active player. However, you can play Items and Room abilities.
Since the Boss ability is an Item, it cannot be Counterspelled.
The Boss ability can only be played to cancel a Spell during your adventure phase.
Possible reference to Gollum and Bilbo Baggins from the Hobbit.