Bloomberg News

Verizon, Lilly, Apple, Viacom: Intellectual Property

August 27, 2012

Verizon Communications Inc. must pay royalties to a California company whose patents it infringes, though it doesn’t have to stop providing FiOS TV customers with video-on-demand services, a U.S. appeals court said.

A jury’s $115 million damage award to ActiveVideo Networks Inc. was affirmed, as was an order for Verizon to pay ActiveVideo $2.74 a month for each FiOS TV subscriber. The U.S. Court of Appeals for the Federal Circuit in Washington on Aug. 24 upheld a finding that three ActiveVideo patents were infringed and reversed a finding as to a fourth.

ActiveVideo, which licenses its technology to Verizon competitor Cablevision Systems Corp. (CVC:US), owns inventions related to delivering interactive television to subscribers. After Verizon lost the trial, a federal judge in Norfolk, Virginia, gave Verizon six months to alter its video-on-demand service or stop providing it. That order was put on hold pending the appeal.

Edward McFadden, a spokesman for Verizon, said the company had no immediate comment.

Paul Schneider, an ActiveVideo spokesman, said in an e- mailed statement that the company is “gratified” with the verdict validating the lower court’s findings and the awards of damages and royalties. The company is “glad to have this part of the case behind us,” he said.

The appeals court said that “substantial evidence supports the jury’s verdict” against New York-based Verizon regarding three patents, while it doesn’t back up a claim against FiOS.

ActiveVideo can’t prevent Verizon from providing a video- on-demand service when the San Jose, California-based company was actively licensing its patents to all comers, the panel wrote. Cablevision might lose customers to the competition; ActiveVideo only loses potential revenue which would be balanced out by Verizon’s royalties, it said.

“In light of the record evidence including ActiveVideo’s past licensing of this technology and its pursuit of Verizon as a licensee, no fact finder could reasonably conclude that ActiveVideo would be irreparably harmed by the payment of a royalty,” the three-judge panel wrote in an opinion posted on its website.

The Federal Circuit panel also vacated a judge’s ruling that a Verizon patent was invalid and remanded that part of the case for further proceedings. The jury had awarded Verizon $16,000 in damages based on infringement of its patents.

The case is ActiveVideo Networks Inc. v. Verizon Communications Inc. (VZ:US), 2011-1538, U.S. Court of Appeals for the Federal Circuit (Washington). The lower court case is ActiveVideo Networks Inc. v. Verizon Communications Inc., 10cv248, U.S. District Court, Eastern District of Virginia (Norfolk).

Lilly Wins Appeal Upholding Patent for Alimta Cancer Drug

Eli Lilly & Co. won a U.S. appeals court ruling that upholds the validity of a patent for the lung-cancer drug Alimta and blocks generic competition through 2017.

The U.S. Court of Appeals for the Federal Circuit on Aug. 24 rejected arguments made by Teva Pharmaceutical Industries Ltd. (TEVA) that patent 5,344,932 was invalid. It affirmed a lower court ruling. The decision was posted on the court’s website.

Alimta, whose chemical name is pemetrexed, generated $2.5 billion in sales last year for Indianapolis-based Lilly, making it the company’s third biggest-selling drug. Alimta is designed to hamper cancer cells’ ability to use folic acid to grow after an initial treatment with other drugs.

Teva, based in Petach Tikva, Israel, had argued that Lilly had patented a compound that wasn’t much different from what was covered by two earlier patents. The three-judge panel said the lower court was correct to rule that the 2017 patent is distinct from the earlier inventions.

“By affirming the district court ruling, we believe that the court fairly applied long-standing patent law principles,” Lilly General Counsel Robert Armitage said in a statement. “Protection of intellectual property rights is extremely important to the biopharmaceutical industry and the physicians and patients we serve, as these rights help support the development of the next generation of innovative medicines to treat unmet medical needs.”

Denise Bradley, a spokeswoman for Teva, said the company had no comment.

The case is Eli Lilly & Co. (LLY:US) v. Teva Parental Medicines Inc., 2011-1561, U.S. Court of Appeals for the Federal Circuit (Washington). The lower court case is Eli Lilly & Co. v. Teva Parenteral Medicines Inc., 08CV335, U.S. District Court, District of Delaware (Wilmington).

Apple, Samsung Must Stop Some Korea Sales in Patent Dispute

Apple Inc. (AAPL:US) and Samsung Electronics Co. (005930) must stop selling some smartphones and tablet computers in South Korea and pay damages after a Seoul court ruled they infringed on each other’s patents.

Apple, maker of the iPhone, violated two Samsung patents related to mobile-data transfer technologies, the Seoul Central District Court said Aug. 24. Samsung, the world’s largest mobile-phone maker, infringed one Apple patent related to a “bounce-back” touchscreen feature, though the Suwon, South Korea-based company didn’t copy the design of the iPhone, the court said.

The sales bans don’t cover Apple’s iPhone 4S, its newest iPad, or Samsung’s latest products including the Galaxy S III phone, all of which were released after the lawsuits were filed. The companies have sued each other on four continents since April, accusing each other of copying products, design and technology as they battle for dominance of a smartphone market estimated by Bloomberg Industries to be worth $219 billion.

“The ruling is in line with what we had expected,” Im Jeong Jae, a Seoul-based fund manager at Shinhan BNP Paribas Asset Management Co., which oversees about $29 billion, said by phone. “What’s important is how the verdict that’s coming out soon in the U.S. will affect other pending cases in places like Europe and Australia.”

Samsung said it welcomed the ruling, “which affirms our position that Apple has been using our mobile telecommunications standards patents without having obtained the necessary licenses,” according to a company statement. The ruling “also affirmed our position that one single company cannot monopolize generic design features,” Samsung said.

Three phone calls to Steve Park, a Seoul-based spokesman for Apple, went unanswered.

Under the ruling, Apple must stop selling the iPhone 3GS, iPhone 4, iPad 1 and iPad 2 in South Korea, while Samsung must stop selling 12 products including the Galaxy S, Galaxy S II and Galaxy Tab. Cupertino, California-based Apple must pay Samsung 40 million won ($35,000), and the Korean company must pay its U.S. rival 25 million won.

The sales bans take effect immediately, though the companies can ask the court to rescind them.

For more patent news, click here.

Trademark

Viacom Opposes Mike ‘The Situation’ Sorrentino’s ‘GTL’ Trademark

The application of Mike “The Situation” Sorrentino to register “GTL” as a trademark may have hit a roadblock.

Sorrentino, who appears on the “Jersey Shore” reality television program, filed applications to register the acronym with the U.S. Patent and Trademark Office in February. He used “GTL” frequently on the show to describe his preferred activities of “gym, tanning, laundry.”

According to the patent office database, Viacom Inc. (VIAB:US) filed papers indicating it opposes the trademarks. Generally, intellectual property created in the course of employment is the property of the employer.

Sorrentino sued Abercrombie & Fitch Co. (ANF:US) in federal court in Miami in November, claiming the clothing company sold t-shirts that infringed his trademarks. Abercrombie responded in December, saying that Viacom owned the marks and that Sorrentino lacked standing to pursue the case. The most recent filing in that case is a request from Abercrombie for an extension of time to take a deposition from Sorrentino.

The case against Abercrombie is MPS Entertainment LLC v. Abercrombie & Fitch Stores Inc., 11-cv-24110, U.S. District Court, Southern District of Florida (Miami).

For more trademark news, click here.

Copyright

Google Says 10 Individuals, Groups It Paid Commented on Suit

Google Inc. (GOOG:US) said at least 10 individuals and groups receiving company money, including Google attorney William Patry and the Electronic Frontier Foundation, wrote commentaries about Oracle Corp. (ORCL:US)’s copyright lawsuit over Android software.

Google said in a filing in federal court Aug. 24 that it didn’t pay anyone to write or comment about the case. The filing was in response to an order from the judge who presided over the Oracle trial and who said public commentary that purports to be independent can influence courts “in subtle ways” and writers’ financial ties to the companies should be disclosed.

“Our reply to the court is clear; no one on our side paid journalists, bloggers, or other commentators to write about this case,” Google’s Jim Prosser said in an e-mail.

Deborah Hellinger, an Oracle spokeswoman, declined to comment on the filing.

A jury found May 7 that Mountain View, California-based Google, owner of the world’s most popular search engine, infringed Oracle’s copyrights when it developed Android software for mobile devices. The jury deadlocked on whether the copying was “fair use.”

The deadlock denied Redwood City, California-based Oracle the ability to seek as much as $1 billion in damages from Google. The jury found May 23 that Google didn’t infringe two Oracle patents.

Oracle hired one writer, Florian Mueller, author of the FOSS Patents blog, as a consultant, not to blog about the case, Oracle said in an Aug. 17 filing. Mueller, who disclosed the relationship in April, has written extensively on the lawsuit.

The case is Oracle v. Google, 10-3561, U.S. District Court, Northern District of California (San Francisco).

New Yorker Pleads Guilty in Virginia Criminal Copyright Case

A New York resident pleaded guilty to copying and distributing computer software and training materials without authorization, the government said in a statement.

Dennis Newsome, 36, of Beacon, New York, entered a guilty plea in federal court in Norfolk, Virginia, to four counts relating to criminal copyright infringement, according to an Aug. 23 court filing.

The government said in its statement that he sold illegal copies of copyrighted material from content owners including John Wiley & Sons Inc. (A:US) and CBT Nuggets LLC.

Some items he sold through his PCTec101 business for $24.99 had a retail price ranging from $750 to $4,295, according to the government statement. He sold pirated content in the U.S. and worldwide from 2008 to 2010, the U.S. said.

Newsome agreed to forfeit the proceeds from his piracy, the government said. He previously was sued in federal court for civil copyright infringement, according to data compiled by Bloomberg.

In June 2006, Wiley sued Newsome in federal court in Manhattan, accusing him of copyright infringement. In March 2007, that court entered a judgment against him for $14,475.

That case is John Wiley & Sons Inc. v. Newsome, 06- cv-04326, U.S. District Court, Southern District of New York (Manhattan).

The case is U.S. v. Newsome, 12-cr-00044, U.S. District Court, Eastern District of Virginia (Norfolk).

For more copyright news, click here.

To contact the reporter on this story: Victoria Slind-Flor in San Francisco at vslindflor@bloomberg.net

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


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