Bloomberg News

Cephalon, Wiley, Google, Datawind: Intellectual Property

April 17, 2012

Cephalon Inc. (TEVA) won an appeals court ruling that could help it block generic versions of the muscle- relaxant Amrix.

The U.S. Court of Appeals for the Federal Circuit in Washington said yesterday that a trial judge erred in invalidating two patents on the medicine. Mylan Inc. (MYL:US) and Par Pharmaceutical Cos. (PRX:US), which won a patent challenge at the lower court, can seek victory on other grounds, including allegations of patent misuse and antitrust violations.

In dispute are patents 7,387,793 and 7,544,372.

Cephalon, bought by Petah Tikva, Israel-based Teva Pharmaceutical Industries Ltd. last year, and partner Eurand NV sought to block low-cost versions of the medicine from entering the market until the patents expire in 2023 and 2025. They cover a dosage form of a skeletal muscle relaxant and a method of relieving muscle spasms.

Mylan began selling generic Amrix in May 2011 after winning the ruling that the patents covered obvious variations of earlier known research. U.S. District Judge Sue Robinson ordered Mylan to hold off selling the drug until the appeals court ruling. The Federal Circuit said that sales ban will remain in effect until Robinson gets the case back.

Amrix generated $109 million in U.S. sales in 2010, before the generic versions entered the market.

The case is Eurand Inc. v. Mylan Pharmaceuticals Inc., 2011-1399 and 2011-1409, U.S. Court of Appeals for the Federal Circuit (Washington. The lower court case is Cyclobenzaprine Hydrochloride Patent Litigation, 09-2118, U.S. District Court, District of Delaware (Wilmington).

J&J Must Pay $40 Million to Boston Scientific, Judge Rules

A Johnson & Johnson (JNJ:US) unit owes Boston Scientific Corp. more than $40 million in damages for intentionally infringing patent 5,922,021 for coronary stents, a federal judge ruled.

Boston Scientific won about $20 million from Cordis Corp. in a May 2011 jury trial in Wilmington, Delaware. U.S. District Judge Sue Robinson said in an opinion March 13 that Boston Scientific deserved twice that much. Cordis filed an appeal of the ruling April 10 with the U.S. Court of Appeals for the Federal Circuit in Washington, according to court records.

“Cordis was aware of and investigated” the patent, Robinson wrote in her decision. “Doubling the jury’s award” is “reasonable under the circumstances.”

Boston Scientific, based in Natick, Massachusetts, sued Cordis in Minnesota in 2009. The case was transferred to Delaware the following year.

Sandy Pound, a Cordis spokeswoman, didn’t immediately return a message seeking comment on the ruling. Steven Campanini, a spokesman for Boston Scientific, said the company couldn’t comment immediately.

The case is Boston Scientific Corp. (BSX:US) v. Cordis Corp., 10CV315, U.S. District Court, District of Delaware (Wilmington).

For more patent news, click here.

Trademark

Discounted ‘Gray Market’ Goods Draw U.S. Supreme Court Review

The U.S. Supreme Court agreed to consider whether discount retailers violate copyright laws by selling tens of billions of dollars in “gray market” products after buying them overseas at a reduced price.

The case promises to be one of the top business and consumer cases in the court term that starts in October, affecting sales on EBay and at stores including Costco and Wal- Mart. It will pit supporters of the gray market -- retailers, distributors and consumer advocates -- against publishers and manufacturers that say their U.S. sales are being illegally undercut.

Gray market products are genuine goods sold by U.S. retailers outside official distribution channels to exploit the lower prices manufacturers sometimes charge for their products overseas.

It “represents a multibillion-dollar benefit to American consumers,” according to a brief urging Supreme Court review filed by the Retail Industry Leaders Association, whose members include Wal-Mart Stores Inc. (WMT:US), Target Corp. (TGT:US) and Costco Wholesale Corp. (COST:US)EBay Inc. (EBAY:US) filed a separate brief asking the court to take the case.

The justices said yesterday they will hear an appeal from Supap Kirtsaeng, who was ordered by a jury to pay publisher John Wiley & Sons Inc. (A:US) $600,000 for violating the company’s copyrights when he imported foreign-edition textbooks from his native Thailand and sold them in the U.S. for a profit.

The case poses a question that deadlocked the court 4-4 in a 2010 clash between Costco and Swatch Group AG (UHR)’s Omega unit over discounted watches.

The legal dispute concerns the first-sale doctrine, which says a copyright holder can profit only from the original sale of a product. In 1998, the Supreme Court unanimously said the doctrine applies to U.S.-made products sold overseas, meaning purchasers can bring those goods back into the U.S. through unauthorized channels even if the copyright holder objects.

Wiley urged the Supreme Court to reject the appeal without a hearing. The publisher said its case is different from the movie example because its foreign-edition textbooks weren’t authorized for sale in the U.S.

The case is Kirtsaeng v. John Wiley & Sons, 11-697.

Google Gets German Trademark Rights for G-mail, Ends Battle

Google Inc. (GOOG:US), owner of the world’s most-used Internet search engine, acquired the German rights to the name “G-mail,” according to a filing at the nation’s trademark office.

Google, which owns trademark rights to Gmail in more than 60 nations, has been fighting with German businessman Daniel Giersch, who won the rights to “G-mail” in 2000. Giersch prevented Google from registering “Gmail” with the European Union’s trademark office in 2008. The dispute led to a series of court cases after the Mountain View, California-based company started its e-mail service using the name “Gmail” in 2004.

Giersch didn’t immediately return a call seeking comment. Google spokesman Stefan Keuchel confirmed in an e-mail that the German disputes have been ended.

The trademark transfer was reported by the CIO website yesterday.

BAT Takes Plain Cigarette Packs Fight to Australia’s Top Court

British American Tobacco Plc (BATS) took its fight with the Australian government to court yesterday in a bid to end a ban on logos and trademarks on cigarette packs.

BAT, Europe’s biggest cigarette maker, was joined by Philip Morris International Inc. (PM:US), the largest publicly traded tobacco manufacturer, and Imperial Tobacco Group Plc, maker of Gauloises Blondes, in a challenge to the Australian ban on logos. The tobacco companies claim the government is seizing their intellectual property, worth billions of dollars, without due compensation.

The Australian ban, the first of its kind in the world, is being watched by governments around the globe. A High Court ruling upholding the law, which is due to go into effect Dec. 1, might prompt other countries to follow suit, further eroding the value of the tobacco companies’ brands.

The European Commission began public consultations on revisions to the European Union’s Tobacco Products Directive in September 2010, with one of the measures considered being plain or generic packaging.

A November 2010 report in New Zealand recommended the implementation of plain packaging and harmonizing the requirement with Australia.

“Plain packaging is inevitable,” Minister of Health Tony Ryall told the New Zealand Medical Association in June.

The anti-tobacco lobby faces resistance in the U.S., where cigarette manufacturers also have the protection of the First Amendment of the U.S. Constitution, which covers the right to freedom of expression from government interference.

A federal judge in Washington ruled on Feb. 29 that the U.S. Food and Drug Administration’s requirement for graphic warning labels on cigarette packs violated the tobacco companies’ free-speech rights. A U.S. Court of Appeals in Cincinnati ruled 2-1 in a separate case that tobacco companies can be forced to put graphic warning labels on packages without violating their constitutional rights.

Under the plain packaging law, cigarettes will have to be sold in dark brown packages, with no company logos and the same font for all brands, with graphic health warnings and contact number for advice on how to quit on the back of the package.IP Report Update

BAT makes Dunhill, Pall Mall and Australia’s best-selling cigarette brand, Winfield. Philip Morris is the maker of Marlboro cigarettes.

Philip Morris is also pursuing the case in international arbitration. The Australian proposal violates a treaty with Hong Kong and may cause billions of dollars in damages, the maker of Marlboro cigarettes said.

The case is British American Tobacco Australia Ltd. v. the Commonwealth of Australia, S389/2011, High Court of Australia (Canberra).

For more trademark news, click here.

Copyright

Oracle Tells Jury Google Stole Technology to Make Android

An Oracle Corp. (ORCL:US) lawyer told a federal jury that Google Inc. stole its copyrights to make Android software.

“This case is about Google’s use of somebody else’s property without permission,” Oracle attorney Michael Jacobs told jurors in San Francisco during opening arguments in a trial that began yesterday.

Oracle alleges in its lawsuit that Google used Java programming language without a license to develop Android, the mobile-phone operating software. The two-month trial will feature testimony from the companies’ chief executive officers, Larry Ellison and Larry Page, as well as damage experts appointed by both sides and the presiding judge.

Oracle, the largest maker of database software, is seeking $1 billion in damages and an injunction to block Google from distributing Android, now running on more than 150 million devices, unless it takes a license.

The first phase of the trial will deal with allegations of copyright infringement.

Google, based in Mountain View, California, denies infringing Oracle’s patents, saying the Oracle-owned technology it’s accused of taking, called application programming interfaces, or APIs, isn’t covered by copyright, and that its use of parts of the Java platform was fair and legal.

Settlement talks held April 2 and in September failed to resolve the lawsuit.

Developed by Sun Microsystems in the mid-1990s, Java lets developers write programs that work across different operating systems and on a variety of computers. It formed a key building block of the World Wide Web and is widely used in business applications. Oracle, based in Redwood City, California, acquired Sun in 2010.

Google rejected an offer by Sun to pay $100 million in royalties to use Java to develop Android, Van Nest said at a hearing last year in the case

Google relies on Android, the most popular U.S. smartphone operating system, to compete with Apple Inc. (AAPL:US) in the mobile-phone market and lessen its dependence on traditional Web-search advertising.

Oracle also alleged that Google infringed the two Java patents in the case that a court-appointed expert estimated are worth $2.8 million in damages.

In its original lawsuit filed in 2010, Oracle claimed Google was infringing seven patents. U.S. District Judge William Alsup, who presides over the case, ruled that damage estimates should start at $100 million, the 2006 offer from Sun.

The case is Oracle America Inc. v. Google Inc., 10-03561, U.S. District Court, Northern District of California (San Francisco).

National Library of Ireland Plans to Publish Joyce’s Work Online

The National Library of Ireland is seeking to beat a James Joyce scholar in the publication of many of the writings of the late author, whose works entered the public domain this year, the BBC reported.

Danis Rose is publishing Joyce works in editions priced from 75 to 250 Euros ($99 to $328), according to the BBC. His actions are permitted under European Union copyright law, which states that the first to publish previously unpublished work entering the public domain gets rights equivalent to a 25-year copyright, the BBC reported.

Rose said in a statement that his publication was part of efforts to prevent others from tying up the content and denying it to scholars and even the National Library itself.

The National Library has consulted with the copyright committee of the Irish department of Enterprise, Jobs and Innovation, which, according to the BBC, is believed to have given the library “greater confidence” in its position on the Joyce copyrights and efforts to publish the content online.

For more copyright news, click here.

Trade Secrets/Industrial Espionage

Datawind Accused Contract Manufacturer of Misappropriating IP

Datawind Ltd., maker of the world’s cheapest tablet device, accused its contract manufacturer of misappropriating intellectual property related to the device and agreeing to develop the next generation of the product with another company, according to the Hindustan Times.

London-based Datawind claimed that despite having signed a non-disclosure agreement, contract manufacturer Quad Electronics revealed Datawind IP to IIT-Rajasthan, the newspaper reported.

Neither Quad nor IIT-Rajasthan responded to the Hindustan Times’ requests for comment.

Datawind told Hindustan Times that it will sue Quad Electronics for violating the confidentiality agreement if the parties can’t come to agreement.

To contact the reporter on this story: Victoria Slind-Flor in Oakland, California, at vslindflor@bloomberg.net.

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


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