Bloomberg News

BAT, Nike, Nestle, Chick-fil-A: Intellectual Property

December 06, 2012

British American Tobacco Plc (BATS)’s Zimbabwean unit denied allegations of “industrial espionage” and “illegal activity” after the country’s president, Robert Mugabe, said that BAT had disrupted shipments by rivals.

Mugabe told a conference on empowerment of black Zimbabweans in Harare last week that his government had got information that the unit, British American Tobacco Holdings Zimbabwe Ltd. (BAT), had been working with groups in South Africa against Savanna Tobacco Co., a Zimbabwean tobacco company owned by a businessmen, Adam Molai. He said the information, which included the armed theft of tobacco from Savanna, “appears to be authentic.”

BAT Zimbabwe “strongly denies any involvement in the industrial espionage and/or any illegal activity that may be linked to other local tobacco manufacturers,” the Harare-based company said in an e-mailed response to questions yesterday.

Zimbabwe has passed a law to force foreign-owned companies to sell a 51 percent stake in their business to black Zimbabweans and is pushing for greater local participation in industries ranging from banks to mining.

State media carried reports that while trucks from competitors traveling to South Africa have been hijacked, BAT’s vehicles have been spared.

“BAT Zimbabwe does not export any cigarettes,” the company said. “Our operation does, however, export semi- processed tobacco leaf.”

The company bases its competitive strategy on market research and hasn’t resorted to “illegal tactics,” it said.

“Those are the things that have been happening in order to kill competition and if you try to undo a competitor in that ugly way that’s not acceptable,” Mugabe said.

BAT, Zimbabwe’s biggest cigarette maker, competes with closely-held companies like Savannah Tobacco (Pvt) Ltd and Cut Rag Tobacco (Pvt) Ltd. for domestic sales. Zimbabwe is Africa’s biggest tobacco exporter.

Patents

Japan to Mandate Price Cuts for Off-Patent Brand-Name Drugs

Japan’s Health Ministry has approved a rule cutting prices for off-patent name-brand drugs, thereby cutting health-care costs, Nikkei reported.

Generics make up only about 30 percent of the pharmaceutical market in Japan because the name brand drugs retain brand strength even after patent expiration, according to Nikkei.

The mandated price cuts would go into effect as early as April 2014.

Strategies pharmaceutical companies will employ to offset the lower prices include accelerated development of new products, or increasing the volume of sales of the off-patent brand-name drugs, according to Nikkei.

Verizon Applies for Patent on People-Watching Set-Top Box

Verizon Communications Inc. is seeking a patent on a technology that may potentially turn a set-top box into a Big Brother analogate.

Application 20120304206 covers a targeted advertising system based on activities of the user. The ads shown would be based on the activities performed while a television program is being viewed, according to the application.

The traditional targeted advertising system “fails to account for what the user is doing” while watching a particular TV program, Verizon said in the application.

The system could include what Verizon calls a “presentation facility,” together with a “detection facility,” a “targeted advertising facility” and a “storage facility,” all of which communicate with each other, according to the application.

Verizon filed the application in May 2011. It was published in the database of the U.S. Patent and Trademark Office Nov. 29.

For more patent news, click here.

Trademarks

Nike Files Chinese Suit, Battling Adverse Liu Trademark Decision

Nike Inc. (NKE:US), the Oregon athletic-shoe company, filed suit in China, seeking to overcome government rejection of its application to register the name of Chinese track star Liu Xiang as a trademark, China Daily reported.

The application was rejected because the Chinese characters for Liu’s name were registered 26 years ago by a Shanghai clothing company, according to the newspaper.

Beaverton, Oregon-based Nike has signed a contract with the athlete authorizing the use of his name and likeness and, while it’s unable to register the characters for his name, does have several other Chinese trademarks related to Liu, China Daily reported.

The proprietor of the Shanghai-based clothing company that holds the mark said it may be possible to transfer the mark to Nike, depending on how much the shoe company is willing to pay, the newspaper reported.

Nespresso Sued in Paris by Ethical Coffee for ‘Smear’ Campaign

Nestle SA (NESN) was sued in Paris by capsule-coffee maker Ethical Coffee Co., which claimed the Swiss food company’s Nespresso brand engaged in unfair competition practices to stymie its rival’s growth.

Ethical Coffee filed a suit before the commercial tribunal Dec. 4 claiming a “systematic smear” effort by Nespresso to criticize its products and steer clients away from the competition, the Fribourg, Switzerland-based company said in a statement. Nespresso made such comments through its Nespresso Club, on the Internet and through machine distributors, Ethical Coffee said.

“It would have been fairer and far better if Nespresso had tried to beat the competition in terms of quality and price,” Chief Executive Officer Jean-Paul Gaillard said in yesterday’s statement. “However, where the consumer opted for our products, Nespresso clearly tries, even through unlawful means, to influence their decision.”

Nespresso, one of Nestle’s fastest-growing brands, faces increased competition as other food companies including D.E Master Blenders 1753 NV began offering coffee-filled capsules that work in its machines. Vevey, Switzerland-based Nestle has taken legal action against Ethical Coffee and other capsule makers in countries including France and Germany, as well as at home, arguing the rivals violate its patents.

“The allegations by ECC are without substance and we believe that the complaint has no merit,” Nespresso General Counsel Daniel Weston said yesterday in an e-mail. “This is part of an on-going pattern and is not the first time that this company has made similar claims.”

Ethical Coffee has asked the court to order Nespresso to cease such practices and is seeking unspecified “considerable compensation” for the financial harm it’s suffered since entering the market, according to the statement.

Chick-fil-A Parody Site Not in Bad Faith, WIPO Panel Says

Chick-fil-A Inc., the Atlanta-based fast-food chain that had $4.1 billion in sales last year, filed a complaint in its battle against a parody website.

The company filed with the World Intellectual Property Organization’s Arbitration and Mediation Center in August, objecting to the registration of the chickfilafoundation.com Internet domain name.

According to a Nov. 30 WIPO ruling, the disputed name was registered in 2011 by an opponent of the public stand Chick-Fil- A’s owner has taken with respect to same-sex marriage. Dan Cathy, the chief executive officer of the Georgia chain, has expressed the view that homosexuality is both sinful and a chosen lifestyle, and he opposes same-sex marriage.

After Cathy’s views became widely known last summer, gay, lesbian and transgender people and their allies called for a boycott of Chick-fil-A restaurants. In response, former Arkansas governor Mike Huckabee called for opponents of same-sex marriage to go out of their way to eat at Chick-fil-A restaurants.

The disputed website featured a photo of Huckabee, and a coupon purporting to offer a free Chick-fil-A sandwich to anyone who abandoned homosexuality. A notice that “this site is not affiliated with Chick-fil-A” appeared in very small type at the bottom of the page.

Other features of the disputed website were photos of the operator of a clinic that claimed to cure people of homosexuality, and former U.S. Senator Rick Santorum of Pennsylvania, a Republican candidate in the 2012 presidential race and an opponent of same-sex marriage.

The restaurant chain argued that its name was being used in bad faith on the parody website, and that the site didn’t constitute the parody exemption to trademark infringement.

The WIPO panel said that while it was “questionable” about whether the disputes site qualified as parody, it was clear that the application wasn’t filed in bad faith. For a bad faith claim to succeed, the site must have been created for commercial gain, and the panel said Chick-fil-A “failed to produce even a scintilla of evidence” that this why the site was created.

Because the panel couldn’t find any proof of bad-faith registration, Chick-fil-A’s complaint was denied.

The WIPO panel had a single member, M. Scott Donahey of Palo Alto, California.

The case is CFA Properties Inc., v. Domains By Proxy LLC, D2012-1618.

For more trademark news, click here.

Copyright

EU Plans Work on Overhaul of Copyright Rules for Digital Age

European Union regulators plan to work on an overhaul of the bloc’s copyright rules to “make them fit” for the digital age.

The European Commission decided yesterday to adapt the rules governing how copyrights are used and enforced across the 27-nation EU to meet challenges presented by the Internet. The regulator seeks to complete work by 2014.

The goal is to “work for a modern copyright framework that guarantees effective recognition and remuneration of rights holders in order to provide sustainable incentives for creativity” and combating piracy, the Brussels-based commission said in a statement.

EU lawmakers in July rejected a global anti-piracy treaty, known as ACTA, that would have established global rules for cracking down on piracy, including illegal file-sharing. Key goals in the new initiative are to improve enforcement of copyright rules across the EU and harmonize the fragmented way copyrights apply across the bloc’s 27 nations.

The commission next year will have discussions with industry officials to tackle six “concrete problems.” This includes how to solve the effect of copyright territoriality when consumers who have legally downloaded content such as music or e-books in one EU nation, can’t access it in another EU country.

For more copyright news, click here.

IP Moves

Roetzel & Andress Hires Biotech Patent Specialist Vern Luckow

Roetzel & Andress LPA hired Vern A. Luckow for its IP practice group, the Washington Court, Ohio-based firm said in a statement.

Luckow, who does patent-acquisition and IP-related transactional work, previously practiced at Polster Lieder Woodruff & Lucchesi LC of St. Louis. He has represented clients in the biotechnology and pharmaceutical industries.

He has an undergraduate degree in biochemistry and a doctorate in molecular biology from the University of Wisconsin and a law degree from St. Louis 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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