Bloomberg News

Anheuser-Busch, Lilly, Google, Apple: Intellectual Property

August 01, 2011

(This is a daily report on global news about patents, trademarks, copyright and other intellectual property topics. Updates with Microsoft-Alcatel jury verdict and two Apple items in Patents.)

Aug. 1 (Bloomberg) -- Anheuser-Busch Inc., the maker of Budweiser Beer, sued the International Brotherhood of Teamsters and one of its local chapters for trademark infringement and disparagement.

The unit of Anheuser-Busch InBev NV alleges in the suit, filed July 27 in federal court in Dayton, Ohio, that the union invoked the brand while publicizing a dispute with a regional beverage distributor, Heidelberg Distributing Co.

According to the suit, the Teamsters took out advertisements on two back-to-back billboards that said, “Tell Budweiser Heidelberg’s Destruction of Ohio Jobs Is Tasteless.” The St. Louis-based brewer claims the signs are false and disparage the Budweiser trademark. The company seeks both injunctive relief and damages.

Heidelberg is neither owned nor controlled by Anheuser- Busch, according to the complaint.

Gary Rutledge, Anheuser-Busch’s general counsel for North America, said the company “will aggressively challenge any action like this that sends a wrong and undeserved message to consumers.”

The Teamsters’ general counsel, Brad Raymond, through a spokesperson, described the suit as without merit and declined to comment further. A Heidelberg representative didn’t immediately return a call seeking comment.

The case is Anheuser-Busch Inc. v. International Brotherhood of Teamsters, 11-262, U.S. District Court for the Southern District of Ohio (Dayton).

Patent

Lilly Wins Appeals Court Ruling in Strattera Patent Case

Eli Lilly & Co., the world’s biggest maker of psychiatric drugs, won an appeals court ruling in its effort to block generic versions of attention-deficit treatment Strattera.

The U.S. Court of Appeals for the Federal Circuit in Washington on July 29 overturned a judge’s decision finding Lilly’s patent invalid and remanded the case to the lower court for further proceedings. The patent expires in 2017.

Strattera, known by its chemical name atomoxetine hydrochloride, generated sales of $577 million last year for Indianapolis-based Lilly. The company had won an order that prevented drugmakers including Mylan Inc. and Teva Pharmaceutical Industries Ltd. from entering the market with a generic version until this appeal was decided.

Lilly General Counsel Robert A. Armitage said in an e-mail that the company was pleased with the ruling and “remain confident that the patent is valid and enforceable.”

Mylan spokesperson Michael Laffin didn’t immediately return a call seeking comment. Teva spokeswoman Denise Bradley declined to comment.

The case is Eli Lilly & Co. v. Actavis Elizabeth LLC, 2010- 1500, U.S. Court of Appeals for the Federal Circuit (Washington). The lower court case is Eli Lilly & Co. v. Actavis Elizabeth LLC, 07cv3770, U.S. District Court for the District of New Jersey (Newark).

For more, click here.

Rovi Sues Hulu Over Patents for Interactive TV Functions

Rovi Corp., a provider of digital home-entertainment products, sued online video service Hulu LLC alleging infringement of patents for interactive television functions and seeking unspecified damages.

Rovi, formerly known as Gemstar-TV Guide International Inc., contends that Los Angeles-based Hulu is wrongly using protected technology for electronic programming guides, according to a complaint filed July 28 in federal court in Wilmington, Delaware.

“Rovi invests significant resources” in development of its guides and related inventions for digital video streaming technologies, the Santa Clara, California-based company said in court papers.

Elisa Schreiber, a Hulu spokeswoman, declined to comment on the suit. Hulu, which has put itself up for sale, is co-owned by Walt Disney Co., News Corp. and Comcast Corp.

Rovi was formed when Macrovision Corp. acquired Gemstar-TV Guide in 2008, according to the complaint. Rovi reported $541.5 million in sales last year, according to data compiled by Bloomberg News.

The company “leads the digital entertainment industry in the development and improved functionality of guidance systems for TVs, recorders, set-top boxes and other devices,” according to the complaint.

The case is Rovi Corp. v. Hulu LLC, U.S. District Court, District of Delaware (Wilmington).

To see the patents, click: 6,396,546; 7,103,906; and 7,769,775.

Rambus Loses Ruling in Appeal of Document-Destruction Case

A decision will stand that Rambus Inc. destroyed documents as it pursued patent-infringement claims against Micron Technology Inc. and Hynix Semiconductor Inc., a U.S. appeals court said.

The U.S. Court of Appeals for the Federal Circuit in Washington, which ruled in May against Sunnyvale, California- based Rambus, rejected requests that the cases be reheard, according to a notice posted on the court’s website July 29.

Rambus, a chip designer that sues companies that refuse to license its technology, was slowed in its effort to extract royalties from Micron and Hynix because of allegations it got rid of potential evidence. The appeals court decision from May ordered the lower court judge in the Micron trial to reconsider the degree to which Rambus acted in bad faith and threw out a $397 million judgment against Hynix so the court in that case could also revisit the document-destruction issue.

Hynix, based in Ichon, South Korea, is the world’s second- largest maker of computer-memory chips, trailing Samsung Electronics Co. Boise, Idaho-based Micron is the largest in the U.S.

The disputes with Micron and Hynix are over the companies’ use of interfaces that are part of dynamic random access memory that acts as the main memory in computers. DRAM is built to industry standards and is interchangeable by product. Hynix and Micron claimed Rambus got rid of papers that would have proved Rambus misled the board that sets that standard.

The appeals are Micron Technology v. Rambus, 2009-1263, and Hynix Semiconductor v. Rambus, 2009-1299, U.S. Court of Appeals for the Federal Circuit (Washington). The lower-court cases are Micron Technology Inc. v. Rambus Inc., 00-cv-00792, U.S. District Court, District of Delaware (Wilmington) and Hynix Semiconductor Inc. v. Rambus Inc., 00-cv-20905, U.S. District Court, Northern District of California (San Jose).

Myriad Wins Appeal That Isolated DNA Can Be Patented

Myriad Genetics Inc., maker of tests that help determine the hereditary risk of breast cancer, won an appeals court ruling that its technology related to isolated DNA is eligible for patent protection.

The U.S. Court of Appeals for the Federal Circuit in Washington posted notice of the decision on its website July 29. The biotechnology industry had said it needed the patent protection to entice venture capital funding to pay for research into new medicines and into the causes of diseases.

“This is a positive decision for the biotech industry, but center stage will be the Supreme Court,” which will likely have to hear the case, said Edward Reines, a patent lawyer with Weil Gotshal & Manges LLP in Redwood Shores, California. The U.S. high court already has agreed to consider whether certain diagnostic tests are eligible for patent protection.

A trial judge, rejecting guidelines set by the U.S. Patent and Trademark Office, had said isolated DNA is no different than what appears in nature and isn’t eligible for protection. The ruling split the medical community as scientists and religious groups argued that gene patents limit who can perform research.

Genes are encoded strands of nucleotides in different sequences that are responsible for inherited traits. The Myriad genes strip out unneeded information to home in on those portions of DNA that determine if a person has a higher risk of breast and ovarian cancer.

The Federal Circuit upheld a lower court ruling that patent claims related to an analysis of the DNA were invalid if they only dealt with comparisons.

The American Civil Liberties Union and the Public Patent Foundation affiliated with the Benjamin N. Cardozo School of Law in New York represented the challengers including the Association for Molecular Pathology and American College of Medical Genetics and had the partial backing of the Obama administration.

The case is Association for Molecular Pathology v. Myriad, 10-1406, U.S. Court of Appeals for the Federal Circuit (Washington). The lower court case is Association for Molecular Pathology v. U.S. Patent and Trademark Office, 09cv4515, U.S. District Court, Southern District of New York (Manhattan).

Sanofi Wins Australia Arava Infringement Case Against Apotex

Sanofi, France’s biggest drugmaker, won a court bid to block Canadian generic drug manufacturer Apotex Ltd. from selling its version of the rheumatoid arthritis drugs Arava and Arabloc in Australia.

Justice Jayne Jagot ruled July 29 in Sydney federal court that Apotex’s copy of the medications, which contain the drug leflunomide, infringed Sanofi’s patent and that Apotex failed to prove the patent wasn’t valid.

The ruling will allow Sanofi to sell Arava and Arabloc in Australia without competition from generics until the patent expires in March 2014. The judge also agreed with Sanofi that Apotex’s proposal to sell its version of the drug to doctors, pharmacists and patients without notification that the patent may be infringed would violate Australia’s retail law.

“These representations would be false and likely to mislead,” Jagot wrote in the 146-page judgment. “The respective recipients would not be entitled to prescribe, dispense and use Apotex’s leflunomide product as such conduct would infringe the patent.”

Sanofi has competed with copycat versions of Arava in the U.S. since 2005, when Apotex and other generic drug manufacturers won U.S. Food and Drug Administration approval to sell copies of the medicine.

The case is Sanofi-Aventis Australia Ltd. v. Apotex Ltd. NSD1664/2008. Federal Court of Australia (Sydney).

Google Buys Inventions From IBM, Aims to Build Patent Hoard

Google Inc., facing a growing threat of intellectual- property lawsuits, acquired a batch of patents this month from International Business Machines Corp. to bolster its portfolio.

The U.S. Patent and Trademark Office on July 11 and 12 recorded more than 1,000 patents assigned to Mountain View, California-based Google by IBM. They cover a range of topics including microprocessing chips, regional databases and memory fabrication and architecture, said Bill Slawski, president of SEO by the Sea Inc., a Warrenton, Virginia-based research firm specializing in search-engine optimization.

“Like many tech companies, at times we’ll acquire patents that are relevant to our business,” Mountain View, California- based Google said last week in an e-mailed statement.

Google’s Android mobile operating system has been targeted in at least six legal complaints, increasing its need for intellectual property to defend the company against litigation. Google, the world’s largest Internet search company, also aims to curb abuses of the patent system. The company has urged Congress and the Federal Trade Commission to rein in lawsuits, and asked the U.S. Patent and Trademark Office to take closer looks at patents being used in litigation.

“The tech industry has a significant problem,” Google General Counsel Kent Walker said in an interview last week. “Software patents are kind of gumming up the works of innovation.”

Google’s rivals have said the company is critical of the patent system because it has few patents of its own and entered a smartphone market where companies had been researching and selling products for years before Android phones went on sale in 2008.

The Android system is a free, open-source program that relies on some nonproprietary features Google didn’t create and allows outside developers to modify the code. That has left the company vulnerable to claims that it built Android on the backs of research done by other technology companies.

Google, which had $39.1 billion in cash and short-term investments as of June, put in an initial $900 million offer in April to buy the patents of bankrupt phone-equipment maker Nortel Networks Corp. It was outbid by a group that includes Apple Inc., Microsoft Corp. and Research In Motion Ltd., which all make devices that compete with Android phones.

Standard Bank, MTN Have Court Date in Patent Dispute

Standard Bank Group Ltd. and MTN Group Ltd. are scheduled to go to South Africa’s second-highest court on Aug. 1 to defend themselves in a technology supplier’s lawsuit over a credit-card security feature.

3MFuture Africa Ltd., a Seychelles-based company with offices in Cape Town, is seeking damages from the MTN Mobile Money Ltd. remote-banking joint venture for violating a patent on a system allowing consumers to switch credit cards on or off via mobile phone to prevent illicit use, the software developer said in an e-mailed statement.

Standard Bank, Africa’s largest lender, said in April 2010 that it had received a summons in the dispute. The Johannesburg- based bank will defend itself in the case, Erik Larsen, a spokesman, said July 29 in a phone interview, declining to comment further. Bridget Bhengu, a spokeswoman at Johannesburg- based phone company MTN, said she couldn’t immediately comment.

3MFuture Africa held more than 30 meetings about the system with Standard Bank and MTN representatives, Wolfram Reiners, a director at the technology company, said in a phone interview. The meetings took place in 2001 and 2002, Willem Steenkamp, a spokesman for 3MFuture, said by phone.

The case is scheduled to be heard over the course of two weeks in the Patent Court of the South African High Court in Pretoria, 3MFuture said.

Microsoft Must Pay Alcatel $70 Million in Damages, Jury Says

Microsoft Corp. must pay $70 million for infringing an Alcatel-Lucent patent used in versions of Microsoft’s Outlook program and two other applications, a federal jury in San Diego said July 29.

Alcatel-Lucent, France’s largest telecommunications- equipment maker, had asked the jury to return as much as $75 million in damages. Microsoft’s lawyers asked jurors to limit damages to $5 million.

The patent, described in court as involving a touch-screen form entry that Microsoft argued is simply a “date-picker” function, isn’t used with e-mail, the most popular function on Outlook. Paris-based Alcatel-Lucent described the technology as a pop-up tool for form-filing that “plays a central role in the entire operation” of Outlook.

A different jury in San Diego in 2008 found that Redmond, Washington-based Microsoft had infringed the patent and awarded $358 million in damages. An appeals court, upholding the infringement verdict, overturned the damages award, finding the calculation lacked sufficient evidentiary support. The case was sent back for retrial on damages only.

The case is Lucent Technologies Inc. v. Gateway Inc., 07- cv-2000 U.S. District Court, Southern District of California (San Diego).

Apple Wins Order That Limits Damages in Personal Audio Case

Apple Inc., ordered by a jury to pay $8 million for violating patents with its music playlists on the iPod, won a U.S. court ruling that Personal Audio LLC can’t seek additional damages from use on the iPad, iPhone and Macs.

The decision July 29 by U.S. District Judge Ron Clark in Lufkin, Texas, effectively shuts off efforts by Personal Audio to pursue a second patent-infringement lawsuit that it filed against Apple after the July 8 jury verdict.

“The court finds that the jury’s selection of lump sum as the appropriate form of reasonable royalty clearly represents a damages award giving Apple a fully paid up license that covers all past and future use of the patented technology,” Clark said in a decision posted on the court’s website.

Personal Audio, a patent licensing company with an office in Beaumont, Texas, sued Apple in 2009 for $84 million in damages, claiming infringement of two patents. The inventions cover an audio player that can receive navigable playlists and can skip forward or backward through the downloaded list.

The case is Personal Audio LLC v. Apple Inc., 09cv111, U.S. District Court for the Eastern District of Texas (Lufkin).

Apple Suit Puts Samsung Tablet Sales in Australia on Hold

Apple Inc. escalated a patent dispute against Samsung Electronics Co. and won an agreement that the South Korean company won’t sell the newest version of its tablet computer in Australia until a lawsuit is resolved.

The Samsung Galaxy Tab 10.1 infringes 10 Apple patents, including the “look and feel,” and touchscreen technology of the iPad, Steven Burley, a lawyer for Apple, told Federal Court Justice Annabelle Bennett in Sydney today. The Cupertino, California-based company sought an Australian injunction and also wants to stop Samsung from selling the tablet in other countries, Burley said, without specifying where.

Samsung, based in Suwon, South Korea, agreed to stop advertising the Galaxy Tab 10.1 in Australia and not to sell the device until it wins court approval or the lawsuit is resolved, according to an accord reached by lawyers during a break in the hearing. Should Apple lose its patent-infringement lawsuit, it agreed to pay Samsung damages, which weren’t specified.

The dispute between the companies began in April when Apple sued Samsung in the U.S., claiming the Galaxy products “slavishly” imitated the designs and technologies used for its iPad and iPhone. Samsung, which supplies memory chips for Apple, retaliated with lawsuits in South Korea, Japan, Germany and the U.S.

Apple is basing today’s claim on a U.S. version of the Galaxy tablet, which is different from the one that will be sold in Australia, Samsung’s lawyer Neil Murray said.

Samsung agreed to provide Apple with three samples of the Australian version of the computer tablet at least seven days before it planned to start distributing it so the U.S. company could review it, according to the agreement submitted in court.

Bennett scheduled a hearing for Aug. 29 to review the status of the case and set a trial date if necessary.

The case is Apple Inc. v. Samsung Electronics Co., NSD1243/2011, Federal Court of Australia (Sydney).

Trademark

Facebook Sues Typosquatters for Trademark Infringement

Facebook Inc. sued Cyber2Media Inc. and more than 100 other defendants in federal court in San Jose, California, on July 22 for cybersquatting and trademark infringement.

The complaint alleges that the defendants are so-called typosquatters, who register names similar to recognized websites to attract visitors who think they are linking to Facebook. Many of the sites that infringe Facebook’s trademarks are hosted on servers owned by Cyber2Media, according to the complaint.

The social-networking company seeks cancellation of the defendants’ trademarks as well as damages.

Daniel Negari, the chief executive officer of Beverly Hills-based Cyber2Media, who was also named as a defendant, didn’t return a call seeking comment.

The case is Facebook Inc. v Cyber2Media Inc., CV 11-03619, U.S. District Court for the Northern District of California (San Jose).

--With assistance from Susan Decker in Washington; Brian Womack in San Francisco; Meg Tirrell and Devin Banerjee in New York; Phil Milford in Wilmington, Delaware; Bill Callahan in San Diego; Joe Schneider in Sydney; Robert Fenner in Melbourne; and Sikonathi Mantshantsha in Johannesburg. Editor: Stephen Farr

To contact the reporter on this story: Ellen Rosen in New York at erosen14@bloomberg.net.

To contact the editor responsible for this report: Michael Hytha at mhytha@bloomberg.net.


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