Bloomberg News

Martha Stewart, GE, Merck, Mylan: Intellectual Property

April 12, 2013

Macy’s Inc. will ask a judge to expand the scope of his order blocking J.C. Penney (JCP:US) Co. from selling goods designed by Martha Stewart’s company in certain categories even if they don’t carry her name or trademark.

New York State Supreme Court Justice Jeffrey K. Oing is scheduled to hear arguments today in Manhattan to broaden a preliminary injunction he issued in July keeping Martha Stewart Living Omnimedia Inc. (MSO:US) from selling goods with Stewart’s name at J.C. Penney in categories exclusive to Macy’s, including soft home goods and cookware.

Macy’s wants Oing to extend the injunction to cover goods designed by Stewart’s company that don’t carry her name, which J.C. Penney plans to sell under the name “JCP Everyday.” Macy’s also wants Oing to declare that plastic partyware sold at J.C. Penney under the name “MarthaCelebrations” violates his injunction and should be pulled from the shelves.

Oing on April 10 dismissed one of the two claims in Macy’s suit against Martha Stewart Living, saying that Macy’s hadn’t proved that the company violated a confidentiality provision of their contract.

The judge yesterday denied a motion by New York-based Martha Stewart Living to dismiss the second breach-of-contract claim as it relates to whether the company can design products for other retailers in the exclusive categories.

The judge granted Martha Stewart Living’s motion to dismiss a claim for damages related to disgorgement, saying that Cincinnati-based Macy’s isn’t entitled to part of a design fee paid to the company by J.C. Penney, which is based in Plano, Texas.

Oing also granted a motion to dismiss one of three claims in Macy’s suit against J.C. Penney. The judge threw out a claim for intentional contract interference. Oing said he will rule today on a bid by J.C. Penney to dismiss a second claim of unfair competition.

The cases are Macy’s Inc. (M:US) v. Martha Stewart Living Omnimedia Inc., 650197/2012; Macy’s Inc. v. J.C. Penney Corp., 652861/2012, New York State Supreme Court (Manhattan).

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Patent

General Electric Offers Some Patents for Crowdsourcing

General Electric Co. (GE:US) entered into an unusual arrangement with Quirky Inc., a site that helps individuals create consumer products. Under the agreement, announced April 10, GE will make available its patents for use by inventors and entrepreneurs.

A GE spokeswoman, Leigh Farris, said in a phone interview yesterday that initially GE would make “200 of its 30,000 patents available across its product lines, but may increase that number to 1,000 over the course of the year.” GE will receive royalties on any products in which its patents are used, she said.

“GE and Quirky have been working together for some time and worked together in a variety of ways,” Farris said. While GE has sublicensed its patents before, the company “has never made a quantity like this available to a broader platform.” She said the arrangement is “very much an experiment.”

In a statement announcing the deal, Quirky founder Ben Kaufman said: “We are going to return patents to their original purpose to act as a blueprint for technological and societal progress while protecting inventors and becoming a source of inspiration for future creators.”

Merck Victory Upholding Vytorin Patents Will Stand, Court Says

Merck & Co.’s February victory upholding the validity of its patents on the cholesterol drugs Zetia and Vytorin will stand, a U.S. appeals court said yesterday.

Mylan Inc. asked the U.S. Court of Appeals for the Federal Circuit to reconsider that decision. That request was denied, according to a notice posted on the court’s website. Together, the drugs had about $2 billion in U.S. sales last year, and the ruling will prevent Mylan from selling generic versions of the drugs before April 2017.

Gevo Wins Court Ruling in Butamax Biofuels Patent Lawsuit

Gevo Inc. (GEVO:US), a biofuel chemical development company, won a court ruling in its favor as part of a series of patent- infringement lawsuits with Butamax Advanced Biofuels LLC, a joint venture of DuPont Co. and BP Plc. (BP/)

U.S. District Judge Sue Robinson in Wilmington, Delaware, found that some claims of one Butamax patent were invalid and that Butamax admitted that Gevo didn’t infringe another patent, according to court papers.

“There is no just reason for delay in entering final judgment” on those patent challenges, Robinson wrote April 10 after ruling two weeks ago on two patents. The entering of a final judgment allows Butamax to appeal.

The judge severed claims involving two other patents in continuing litigation between the two companies involving at least 15 different cases in the same court, according to court papers.

Butamax sued Gevo in 2011, alleging misuse of technology for genetically engineered microorganisms used to produce biofuels. Gevo is in a joint venture to make the chemicals with the oil refiner Total SA and specialty-chemicals maker Lanxess AG. (LXS)

“Butamax strongly disagrees with the court’s claim construction” and has decided to appeal the case, said a company spokesman, Mark Buse.

The case is Butamax v. Gevo, 11-cv-00054, U.S. District Court, District of Delaware (Wilmington).

CA Technologies Sues AppDynamics Over IT Management Patents

CA Technologies (CA:US), a maker of software for managing information technology, filed a patent infringement suit against AppDynamics Inc., a company started by a former CA Inc. employee.

AppDynamics’ founder, Jyoti Bansal, previously worked at CA on developing products related to the three IT patents, Islandia, New York-based CA said in a complaint made public yesterday in Central Islip, New York, federal court.

AppDynamics, a San Francisco-based provider of application performance-management software for the entertainment, retail and gambling industries, has “actual knowledge of the patents- in-suit and hasn’t ceased its infringing activities,” CA said in its complaint.

CA, the world’s sixth-largest maker of infrastructure software by market share, acquired the patents when it bought (CA:US) Wily Technology in 2006 for $375 million, according to the company. Bansal formerly “led the design and architecture for several products” at Wily and founded AppDynamics in 2008, according to the San Francisco company’s website.

In November, CA sued San Francisco-based New Relic Inc., also asserting that it had infringed patents obtained through the acquisition of Wily. New Relic was founded by Lewis Cirne, formerly a senior Wily executive, according to CA. That suit is pending.

Greg Howard, a spokesman for AppDynamics, said in an e-mail that the company hasn’t received the official paperwork.

“We do strongly believe” AppDynamics doesn’t infringe upon any protected intellectual property, he said.

The case is CA Inc. v. AppDynamics Inc., 2:13-cv-02111, U.S. District Court, Eastern District of New York (Central Islip).

Counterfeits

Billionaire William Koch May Win More Fake Wine Trial Damages

Billionaire William Koch won a fraud lawsuit in which he claimed a consigner sold him 24 counterfeit bottles of wine from France’s Bordeaux region and may get punitive damages as the jury resumes deliberations.

The federal jury in Manhattan yesterday found against the consigner, Eric Greenberg, concluding he made fraudulent misrepresentations about the authenticity and provenance of the wine, including many purported grand crus that cost Koch tens of thousands of dollars. The jury awarded Koch $379,000 in damages, comprising the amount he paid for the wine at a 2005 auction and $1,000 in compensatory damages for each bottle.

The jury of six men and two women, who heard Koch and Greenberg testify during the three-week trial, are scheduled to return to court today to consider punitive damages. Koch, the brother of conservative Tea Party funders David Koch and Charles Koch, is the founder of West Palm Beach, Florida-based Oxbow Carbon & Minerals LLC.

Koch estimated that hundreds of millions of dollars in counterfeit wine have flooded the vintage market.

Greenberg and his lawyers declined to comment on the verdict after court.

Arthur Shartsis, a lawyer for Greenberg, argued that his client hadn’t misrepresented the wines and had instead relied upon wine experts to inspect and authenticate his bottles for the sale.

The wines at issue included a purported 1864 Chateau Latour bottle, which Koch bought for $14,160, two 1950 Chateau Petrus magnums he bought for $20,060 each, and a 1921 Chateau Petrus magnum that cost Koch $29,500.

The case is Koch v. Greenberg, 07-cv-09600, U.S. District Court, Southern District of New York (Manhattan).

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Trade Secrets

Researcher Accused of Drug Theft for China Pleads Not Guilty

A Medical College of Wisconsin researcher accused of stealing a developmental cancer drug to deliver it to a Chinese university pleaded not guilty to charges of computer tampering and lying to federal agents.

Hua Jun Zhao, who was indicted by a federal grand jury on April 9, entered his plea yesterday before U.S. Magistrate Judge Patricia Gorence in Milwaukee. He’s being held without bail.

Zhao, 42, initially was accused of economic espionage in a criminal complaint filed on March 29. Gerald Shinneman of the Federal Bureau of Investigation said in an accompanying affidavit that surveillance cameras showed Zhao to be the only person to enter and leave a medical college office at the time three vials of the medicinal compound vanished in February.

Assistant U.S. Attorney Stephen Ingraham yesterday asked Gorence to dismiss the criminal complaint while leaving prosecutors with permission to refile those allegations at a later date.

Zhao’s defense lawyer, Juval Scott, said yesterday in a phone interview, “We’re looking forward to getting information from the government and starting our own investigation.”

The case is U.S. v. Zhao, 13-cr-00058, U.S. District Court, Eastern District of Wisconsin (Milwaukee).

Internet

Google Sued for ‘Cynical Manipulation’ as EU Probes Advance

Google Inc. (GOOG:US), operator of the world’s largest search engine, was sued in London by a U.K. Internet company for promoting its own maps over those of competitors in what it claimed was “Google’s cynical manipulation of search results.”

Streetmap, a provider of Internet maps, filed a complaint in London March 15, according to court records. Google’s actions have made its products “harder to find,” the U.K.-based company alleged in an April 10 statement. It’s at least the second such lawsuit filed against Google since June.

Streetmap said its complaint mirrors an antitrust probe by the European Union into whether Google favors its own services over competitors in search results.

“We have had to take this action in an effort to protect our business and attract attention to those that, like us, have started their own technology businesses, only to find them damaged by Google’s cynical manipulation of search results,” Kate Sutton, commercial director of Streetmap, said in the statement.

Google has submitted an offer to the EU that will soon be shown to rivals and customers as part of settlement talks to end the probe into claims that its search results discriminate competitors. EU Competition Commissioner Joaquin Almunia told reporters in Washington yesterday that its goal is to “secure legally binding commitments” from Mountain View, California- based Google as part of the settlement negotiations.

Tom Price, a spokesman for Google, declined to comment yesterday on the allegations, saying in an e-mailed statement that he hadn’t seen the Streetmap complaint.

The case is Streetmap.eu Ltd. v. Google Inc., case no 13-1013, High Court of Justice, Chancery Division.

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

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


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Companies Mentioned

  • JCP
    (JC Penney Co Inc)
    • $7.66 USD
    • -0.02
    • -0.26%
  • MSO
    (Martha Stewart Living Omnimedia Inc)
    • $4.38 USD
    • 0.09
    • 2.05%
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