Bloomberg News

Lilly, Novartis, Google, Time Warner: Intellectual Property

July 06, 2011

(This is a daily report on global news about patents, trademarks, copyright and other intellectual property topics. Updates with Google item in top section.)

July 6 (Bloomberg) -- Eli Lilly & Co., whose best-selling schizophrenia drug Zyprexa survived a U.K. court challenge by generic makers two years ago, lost a bid to dismiss another lawsuit over the medicine’s patent in Britain.

Judge Christopher Floyd in the High Court in London yesterday denied Lilly’s request for a judgment without trial against Neopharma Ltd., the closely held company that has European marketing rights for the generic version of the drug known chemically as olanzapine. One of Neopharma’s three claims in the case was dismissed.

While Floyd agreed Neopharma should be allowed to introduce “fresh evidence” in the dispute, he said the company was unlikely to succeed and ordered it to post a 200,000 pound ($321,400) security to pay Lilly’s legal fees if it loses.

The disputed patent held by Indianapolis-based Lilly was upheld by the U.K. Court of Appeal in December 2009 against a challenge by the Indian generic-drug maker Dr. Reddy’s Laboratories Ltd. The drug survived a parallel U.S. challenge in 2006 and went on to generate worldwide sales last year of more than $5 billion.

“This decision granting summary judgment for part of the case and security for costs for the remainder of the case in these circumstances, is unprecedented,” said Mark Sudwell, a U.K.-based spokesman for Eli Lilly. The ruling “confirms Lilly’s confidence in the strength of the olanzapine patent.”

Neopharma, which presently has no operations, briefly sold its generic version of the drug in Britain in 2008, before a court injunction forced it to stop. The case was put on hold until the Dr. Reddy’s lawsuit was resolved.

Neopharma’s lawyer, Antony Watson, argued the case should go to trial because he will introduce claims against the patent that haven’t yet been addressed in the U.K. Lilly claims those arguments were rejected by courts in the Czech Republic, Slovakia, Canada and the U.S. and needn’t be heard.

Novartis’s Lucentis Drug Cleared in MedImmune Patent Case

Novartis AG’s Lucentis blindness treatment doesn’t infringe two European patents held by AstraZeneca Plc’s MedImmune unit and a U.K.-financed research agency, a judge ruled in London yesterday.

The patents, held jointly by MedImmune and the U.K. Medical Research Council, are “obvious” because the claimed invention was disclosed earlier by another researcher in the field, Judge Richard Arnold ruled.

“It follows that both patents are invalid,” Arnold said in the 261-page ruling. Another trial may be held to determine an unresolved dispute in the priority dates of the patents, he said.

Lucentis, developed by Roche Holding AG and its Genentech unit, last year generated sales of $1.53 billion for Basel, Switzerland-based Novartis, which markets the drug outside the U.S. The U.K. lawsuit was filed a month after Lucentis failed to win the backing of Britain’s National Institute of Health and Clinical Excellence in draft guidance on the treatment of diabetic macular edema.

“We continue to believe that the patents are valid and infringed by Novartis’ activities in respect of Lucentis,” AstraZeneca spokeswoman Isabelle Jouin said in a statement. “MedImmune will be seeking permission to appeal.”

Roche sells the drug in the U.S.

The case is MedImmune Ltd. v. Novartis Pharmaceuticals, High Court of Justice, Chancery Division, No. HC09C04770.

Google Left Searching for New Patent Assets After Nortel Loss

Google Inc.’s loss in bidding for the $4.5 billion portfolio of Nortel Networks Corp. patents last week means the Internet-search company will be looking to buy other inventions to build a bulwark against lawsuits targeting its Android system, patent brokers said.

“There are a lot of phenomenal portfolios for sale,” said Dean Becker, chief executive officer of ICAP Patent Brokerage in Palm Beach, Florida, the world’s largest patent seller. “Every operating company is in the market because of the expense, distraction and the potential financial risk of patent litigation.”

Google, with $36.7 billion in cash and securities as of March, is ramping up efforts to obtain patents to create what it calls a disincentive for companies to sue amid “an explosion” in litigation. Last week’s Nortel auction, the biggest of its kind, followed Google’s $900 million offer in April to buy the more than 6,000 patents owned by the Canadian phone-equipment maker that filed for bankruptcy protection in 2009.

Winning the Nortel portfolio, which went to a group led by Cupertino, California-based Apple Inc., would have boosted Google’s patent holdings almost ninefold from at least 701 presently issued, according to U.S. Patent & Trademark Office records. The increase would have given Mountain View, California-based Google more ammunition against lawsuits, which have increased since the world’s largest Internet-search company moved into areas such as mobile and desktop operating systems to broaden sales.

Oracle Corp. has sued Google directly, and Apple has gone after makers of phones that use Google’s Android mobile operating system, including HTC Corp. and Samsung Electronics Co. Microsoft Corp. also has demanded licensing revenue from makers of products that run on Android, and has filed a trade complaint seeking to block U.S. imports of Barnes & Noble Inc.’s Android-based Nook reader.

While the company wouldn’t comment for this story, Google executives have criticized the challenges of patent lawsuits.

In an April 4 blog posting, Google General Counsel Kent Walker described “an explosion of patent litigation, often involving low-quality software patents” and said the Nortel bid was going to discourage lawsuits against Google.

“One of a company’s best defenses against this kind of litigation is (ironically) to have a formidable patent portfolio,” Walker said in the blog post.

In a July 1 e-mail he called the announcement of Google being outbid “disappointing for anyone who believes that open innovation benefits users and promotes creativity and competition.”

The winning group included some Apple competitors-turned- partners: Microsoft, Research In Motion Ltd., Sony Corp., Ericsson AB and EMC Corp., according to a Nortel statement.

For more patent news, click here.


Rackspace Opposes Aussie Trademark Registration for Rival

Rackspace Hosting Inc., a San Antonio-based website hosting company, opposed the registration of a competitor’s Australian trademark, according to Australia’s ITNews website.

The company filed opposition papers with IP Australia, seeking to halt the registration of a trademark for Rack Servers Pty Ltd. of Nundah, Australia, the website reported.

The filing was done so that Rackspace doesn’t miss a chance to pursue a claim against Rack Servers if the Texas company decides legal action is warranted, ITNews reported.

Rackspace didn’t address whether its trademark opposition indicated that the company was considering a more aggressive marketing effort in Australia, according to ITNews.

ZeniMax Files Application to Register ‘Dishonored’ Trademark

ZeniMax Media Inc., publisher of the Doom, Quake and Rage computer games, may be coming out with a new product line, if a recent trademark filing is any indication.

The Rockville, Maryland-based company filed an application with the U.S. Patent and Trademark Office June 17 to register ‘Dishonored” as a trademark.

According to the application, closely held ZeniMax plans to use the mark with computer games and the provision of online computer games.

Vietnamese Crocodile Famers Want Trademark for Their Products

The Sai Gon Crocodile Village, a venture established by the Hoa Ca Crocodile Co. and the Xuan Loc Cooperative, is planning to acquire a trademark for its products, Voice of Vietnam News reported.

The village has a crocodile breeding farm, a restaurant that serves crocodile-meat dishes, a workshop in which products from crocodile skin are made, a processing house that packs crocodile meat for export and domestic consumption, according to Voice of Vietnam News.

Because of the lack of a trademark and active efforts at promotion, Vietnam presently produces only 0.0001 percent of the world output of crocodile products, Voice of Vietnam reported.

Although regulations of the Convention on International Trade in Endangered Species of Wild Fauna and Flora bar the hunting of crocodiles, CITES has given some Vietnamese companies licenses to export products made from crocodile farms, according to Voice of Vietnam.

For more trademark news, click here.


Warner Movie Stills Can Be Exploited in a Limited Fashion

Time Warner Inc.’s Warner Brothers Entertainment achieved partial victory in a case involving the use of movie publicity stills.

The studio sued five companies that license images taken from publicity materials for the films “Gone With the Wind,” “Wizard of Oz,” and several “Tom and Jerry” animated features.

In the lawsuit filed in federal court in St. Louis in March 2006, Warner Brothers accused the companies of infringing its copyrights to the films.

The trial court, in an order in March 2010, told the companies they couldn’t license or use for commercial gain images from the movies, or altered images from public-domain movie publicity materials.

In that order, U.S. District Judge Henry Edward Autrey said the defendants were like “naughty selfish children” for continuing to gain “unfairly and illegally” from Warner Brothers’ protected works.

The defendants appealed. On July 5, the 8th U.S. Circuit Court of Appeals said that the trial court reached too far with its order. The movie publicity stills were in the public domain and no reasonable jury could find that “merely printing a public domain image on a new style of surface” infringed, the court said.

The defendant companies were still barred from creating three-dimensional images or from juxtaposing those images with content taken from underlying works, such as phrases from the books on which the films are based.

The court said that such use would be adding new elements of expression to the protected content in the films and would therefore infringe.

The case in the trial court is Warner Brothers Entertainment Inc., v. Dave Grossman Creations Inc., 4:06-cv- 00546-HEA, U.S. District Court, Eastern District of Missouri (St. Louis). The appeal is Warner Brothers Entertainment Inc. v. X One X Productions, 10-1743, U.S. Court of Appeals for the Eighth Circuit.

LucasFilm Copyright Complaint Leads to Greenpeace Takedown

LucasFilm Ltd. demanded that Google Inc.’s YouTube video- sharing site take down Greenpeace’s satire of Volkswagen AG’s advertisement featuring a child in a Darth Vader costume, MarketingWeek reported.

Volkswagen told MarketingWeek it had an agreement to use the Darth Vader image.

The Greenpeace ad, which faults the automaker on its environmental record, is still available on the advocacy group’s website, according to MarketingWeek.

Volkswagen said it hadn’t taken any action against Greenpeace related to the campaign, MarketingWeek reported.

Spain’s SGAE Rights Society Raided, Officials Arrested

Nine people from Spain’s Society of Authors & Editors, Spain’s music-royalty collecting group, were arrested as part of an investigation of allegations of financial misconduct, Billboard reported.

The investigation is related to allegations that funds from a tax on music-storage devices may have been diverted, according to Billboard.

The society said in a statement on its website that it was surprised when the arrests were made, that it’s cooperating with authorities and that its accused executives are innocent, Billboard reported.

South Korea’s Copyright Commission to Open Overseas Offices

South Korea’s Copyright Commission will increase the number of overseas copyright offices to include Vietnam and Los Angeles, the Korea Herald reported.

Data from the commission indicate that about 80 percent of China’s major music websites and web portals are using Korean content without authorization, according to the Korea Herald.

Yu Byong-han, the new chairman of the commission, said his office will develop an index to measure how much Korean content is pirated, according to the newspaper.

The commission is seeking certification of its copyright education center from the World Intellectual Property Organization, the Korea Herald reported.

Glaswegian Convicted of Mobile-Phone Film Piracy

A resident of Glasgow, Scotland, was convicted of illegally using his mobile telephone to record the Ridley Scott “Robin Hood” film in a theater, the Scotsman newspaper reported.

Christopher Clark, 25, pleaded guilty to a violation of the U.K.’s Copyright, Designs and Patents Act, according to the newspaper.

An investigator from the Federation Against Copyright Theft, a U.K. film-industry trade group, caught Clark with the entire film on his mobile phone after a press screening of “Robin Hood,” a night before its official world premier at the Cannes International Film Festival, the Scotsman reported.

Clark’s conviction is the first of its kind in Scotland, according to the newspaper.

For more copyright news, click here.

IP Moves

Barnes & Thornburg Adds Kevin R. Erdman to IP Practice Group

Barnes & Thornburg LLP hired Kevin R. Erdman for its intellectual-property practice, the Indianapolis-based firm said in a statement.

Erdman, who does both transactional work and litigation, joins from Baker & Daniels LLP, also based in Indianapolis. His clients are medical technology and bioinformatics companies, software companies and manufacturers.

He has an undergraduate degree in computer science from Indiana University and a law degree from the University of Pennsylvania.

--With assistance from Erik Larson in London and Susan Decker in Washington. Editor: Stephen Farr.

To contact the reporter on this story: Victoria Slind-Flor in Oakland, California, at

To contact the editor responsible for this story: Michael Hytha at

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