Bloomberg News

BAT, Burberry, Valeant, Google: Intellectual Property

April 19, 2012

Trademark use by companies in Australia is a privilege that the government can curtail, Queensland state’s solicitor-general said in defending the country’s plain-packaging legislation for cigarettes.

“Privilege is not property,” Walter Sofronoff, Queensland’s solicitor-general, told the seven-judge panel of Australia’s High Court yesterday during the second day of a hearing on the legality of the plain-packaging law. “It’s a liberty to act unless regulated by law.”

British American Tobacco Plc (BATS), Europe’s biggest cigarette maker, and Japan Tobacco Inc. (2914) were joined by Philip Morris International Inc. (PM:US), the largest publicly traded tobacco manufacturer, and Imperial Tobacco Group Plc (IMT) in a challenge to the Australian law requiring cigarettes to be sold in uniform packages. The tobacco companies are seeking a ruling deeming the Australian law unconstitutional for seizing their intellectual property without adequate compensation.

Australia’s trademark law is in place to ensure companies’ logos are protected from misuse by competitors or individuals, Sofronoff said.

The government crossed a line with the new rules that prohibit the use of logos and trademarks, moving from regulating tobacco sales by requiring warning messages to “commandeering people’s property,” Bret Walker, a lawyer for Imperial Tobacco, told the court yesterday.

“It is wrong to hypothesize the extreme use of the power,” Stephen Gageler, the federal solicitor-general, told the court.

A more realistic example would be the requirement that all cars sold in Australia are required to be fitted with seatbelts, Gageler said.

Australia’s government is confident the law will be upheld, Attorney-General Nicola Roxon told reporters before the start of the hearings.

“Tobacco is the only legal product sold in Australia which if used as intended will kill you,” Roxon said. “No other product is in that category.”

Lawyers representing the tobacco companies were repeatedly challenged on their positions by six of the seven justices, with Chief Justice Robert French echoing Roxon’s concerns.

“You’re putting into the market a substance that causes serious disease or is fatal,” French said, adding that puts tobacco in a different category from cars or soft drinks.

Under the plain-packaging law, cigarettes will be sold with no company logos and the same font for all brands on a dark brown background. Graphic health warnings will cover 90 percent of the back of the package and 70 percent of the front. The law was approved by the Australian Senate on Nov. 10.

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

Appeals Court Upholds Burberry Plaid Counterfeiter’s Conviction

The conviction of an importer of counterfeit items for infringing Burberry Group Plc (BRBY)’s trademarks was upheld by a federal appeals court.

The appeals court rejected the defendant’s argument that the term “substantially indistinguishable” to refer to the plaid design and knight image used on fake goods and legitimate Burberry products was constitutionally vague.

The fake goods had a plaid pattern and a knight image that the defendants called the “Marco plaid.” The government argued that they were virtually identical to marks used by the London- based luxury-goods company.

The court said that in its proper context, “the meaning of the term is plain.”

The appeals court case is U.S. v. Chong Lam, 11-4056, U.S. Court of Appeals for the Federal Circuit. The lower court case is U.S. v. Lam, 3:07-cr-00374-JRS, U.S. District Court, Eastern District of Virginia (Richmond).

For more trademark news, click here.

Patents

Valeant, Depomed Sue Watson Over Patents for Diabetes Drug

Valeant Pharmaceuticals International Inc. (VRX:US) and Depomed Inc. (DEPO:US) sued Watson Pharmaceuticals Inc. (WPI:US) over patents for a diabetes drug.

Watson, based in Parsippany, New Jersey, has filed an application with the U.S. Food and Drug Administration to market generic copies of the diabetes medicine Glumetza before their patents expire, Valeant and Depomed contend in a complaint filed yesterday in federal court in Wilmington, Delaware.

“Plaintiffs will be substantially and irreparably harmed” if Watson isn’t stopped from using the protected technology, and Watson should pay damages and legal fees, lawyers for Valeant’s Barbados unit and Menlo Park, California-based Depomed said in court papers. In dispute are patents 6,488,962 and 7,780,987.

Watson faces similar allegations in a patent-infringement lawsuit filed a month ago in the same court by Abbott Laboratories (ABT:US) over generic copies of the Niaspan cholesterol drug.

Charlie Mayr, a spokesman for Watson, didn’t immediately return voice and e-mail messages seeking comment on the allegations.

The case is Depomed v. Watson, 12-CV-492, U.S. District Court, District of Delaware (Wilmington).

RIM, Samsung Case Brought by Pragmatus to Be Investigated at ITC

The U.S. International Trade Commission has formally instituted an investigation filed by patent licenser Pragmatus AC LLC, of Alexandria, Virginia, according to a notice on the Washington-based trade group’s website.

Companies whose products are the target of the investigation are HTC Corp., AsusTek Computer Inc, LG Electronics Inc., Pantech Co., Samsung Electronics Co. and Research In Motion Ltd. All but Waterloo, Ontario’s Research in Motion are based in Korea.

Pragmatus claims mobile telephones and tablet devices made by these companies infringe the patents, and seeks an order from the ITC barring their importation.

According to data compiled by Bloomberg, Pragmatus units have filed at least 33 patent-infringement cases in U.S. federal courts since November 2010.

For more patent news, click here.

Copyright

Google ‘Did Nothing Wrong,’ CEO Page Tells Jury in Java Case

Google Inc. (GOOG:US) Chief Executive Officer Larry Page, disputing claims that the leading search engine operator stole Java software technology from Oracle Corp. (ORCL:US), told a jury his company “did nothing wrong.”

Page, the first witness to be called by Oracle attorney David Boies yesterday at a trial in federal court in San Francisco, said Google negotiated hard over a partnership with Oracle, the largest maker of database software, over the Java programming language.

“We really wanted to use Java’s technology,” Page testified. “When we weren’t able to come to terms on a business partnership, we went down our own path.”

Oracle, based in Redwood City, California, claims in a lawsuit filed in 2010 that Google infringed copyrights and patents for Java in creating the Android operating system for mobile devices.

Google acknowledges using Java to develop Android and says its use was fair and legal and Google engineers wrote original code for Android. Google rejected a proposal by Java creator Sun Microsystems Inc. in 2006, before it was acquired by Oracle, that the search engine company pay $100 million for a three-year technology partnership to build Android jointly, Google’s lawyers disclosed in the case last year.

Google was careful with the technology to ensure that Android and the company “respect intellectual property,” Page said during his testimony.

He said he didn’t recall or couldn’t speculate about several issues Boies questioned him about, including who Google engineer Tim Lindholm is.

Lindholm wrote a 2010 e-mail saying he was asked by Page and Google co-founder Sergey Brin to find an alternative to Java and determined that Google should take a license for the language. Shown the e-mail, and other documents featuring Lindholm, Page said he couldn’t recall Lindholm, giving him any directions concerning Java or whether Lindholm had recommended that Google take a license for Java.

Oracle is seeking $1 billion in damages and a court order blocking distribution of Android unless Mountain View, California-based Google pays for a license.

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

Two Chinese Nationals Charged by U.S. Over Software Piracy

Two Chinese nationals were charged by the U.S. for illegally exporting technology to their home country and pirating software from U.S. companies including Agilent Technologies Inc. (A:US), federal officials said.

Xiang Li, 35, and Chun Yan Li, 33, a married couple from Chengdu, China, were indicted by a federal grand jury in Wilmington, Delaware, according to a statement yesterday by the U.S. Immigration and Customs Enforcement agency.

“Counterfeiting and intellectual-property theft are seriously undermining U.S. business and innovation -- more than $100 million in lost revenue in this one case alone,” John Morton, the agency’s director, said in the statement.

The couple are accused of running a website called “Crack 99” that sold copies of software where the “access-control mechanisms” had been circumvented, Morton said. The pair is charged in the indictment with distributing more than 500 pirated copyrighted works to more than 300 purchasers in the U.S. and overseas from April 2008 to June 2011.

Xiang Li was arrested by federal agents in June 2011 on an earlier indictment in the case. Chun Yan Li “remains an at- large fugitive in Chengdu,” according to the statement.

An Agilent software product, which retails for $45,000, was among the programs illegally copied by the couple, according to the indictment.

Stuart Matlow, a spokesman for Santa Clara, California- based Agilent, wasn’t immediately available to respond to a phone call and e-mail seeking comment on the indictment.

A Maryland resident who was a customer of the Crack99 pleaded guilty to conspiracy to commit criminal copyright infringement, the government said in a statement. Cosburn Wedderburn, of Windsor Mill, Maryland, bought more than $1 million worth of pirated software, according to the government statement.

He faces a potential prison sentence of as long as five years and a fine of as much as $250,000, or twice the loss the makers of the legitimated pirated software suffered as a result of his actions, the government said.

The case against the Lis is U.S. v. Xiang Li and Chun Yan Li, Criminal Action No. 10-112-LPS, U.S. District Court; District of Delaware (Wilmington).

For more copyright news, click here.

IP Moves

Orrick Expands IP Practice with Two Hires From DLA Piper

Orrick Herrington & Sutcliffe LLP hired Robert J. Benson and Christopher Broderick for its IP group, the San Francisco- based firm said in a statement.

Both lawyers, who joined from DLA Piper LLP of Chicago, had previously practiced at Washington’s Hogan Lovells US LLP.

Benson, a litigator, has represented clients in federal trial and appeal courts and before the U.S. International Trade Commission. His clients’ technologies have included mobile devices, computer hardware and software, telecommunications, semiconductors, LCDs, printers, cameras and other consumer electronics.

He has an undergraduate degree in engineering from San Jose State University and a law degree from the University of California, Berkeley School of Law.

Broderick has represented clients in patent, trademark, unfair-competition and trade-secret disputes involving wireless communications, handsets, cameras and camcorders, printers, displays, satellite television, semiconductors, software, Internet business patents, manufacturing techniques and consumer products.

Before he was a lawyer, Broderick worked as an engineer developing satellite systems for Hughes Aircraft and Northrop Grumman.

He has an undergraduate degree in engineering from the University of Cincinnati and a law degree from Loyola Marymount University.

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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