Bloomberg News

Myriad, Hot Topic, Apple, Del’s: Intellectual Property (1)

June 14, 2013

The U.S. Supreme Court restricted the ability of companies to patent human genetic sequences, issuing a mixed ruling in a case that raised questions about thousands of biotechnology, agricultural and drug patents.

The justices unanimously ruled that parts of Myriad Genetics Inc. (MYGN:US)’s patents on genes linked to breast and ovarian cancer improperly covered natural phenomena. Other parts, the court said, involve enough human intervention to be eligible for legal protection.

The decision left both sides of the debate claiming victory. It forces a change at the federal patent office, which has been awarding gene patents since 1982. That’s a victory for doctors’ groups and patient advocates that accused Myriad of using its patents to block clinical testing and research.

Myriad said in a statement that its tests still are protected by 24 different patents. The ruling ensures “strong intellectual property protection for our BRACAnalysis test moving forward,” Myriad Chief Executive Officer Peter Meldrum said in a statement.

Myriad’s critics disputed that assessment. Roger Klein, chairman of the professional relations committee at the Association for Molecular Pathology, predicted that Myriad would face competition within two years.

Biotechnology, agriculture and drug industries backed Myriad in the case, telling the court that gene patents have led to valuable treatments. The decision will have implications for the growing field of personalized medicine and efforts to map the human brain and discover new uses for embryonic stem cells.

The decision creates a balance between researchers and businesses, said Matthew Dowd of Wiley Rein in Washington, who submitted a brief on behalf of James Watson, the co-discoverer of the structure of DNA. Watson, a Nobel Prize winner for his discovery who helped found the Human Genome Project, objected to patenting of the isolated DNA.

The dispute came to the court in an emotionally charged package, with patient advocates accusing Myriad of standing in the way of breast cancer diagnosis and treatment. The company at one point demanded that the University of Pennsylvania stop clinical testing of cancer patients.

The U.S. Court of Appeals for the Federal Circuit largely sided with Myriad, saying isolated DNA could be patented.

The case is Association for Molecular Pathology v. Myriad Genetics, 12-398.

Cypress Says It Will Return to Courts in Patent Fight With GSI

Cypress Semiconductor Corp. (CY:US) said that even after an adverse ruling from the International Trade Commission June 7 it will continue to defend four disputed patents in two infringement cases pending in federal court.

The Washington-based ITC, which has the power to exclude imports that infringe U.S. patents, said that GSI (GSIT:US) didn’t infringe the patents.

The dispute is over static random-access memory chips produced by Sunnyvale, California-based GSI. Cypress, of San Jose, California, sought to halt the importation of the chips and devices that contain them.

One case is Cypress Semiconductor Corp. v. GSI Technology Inc., 11-cv-00789, U.S. District Court, District of Minnesota (Minneapolis). The other case is Cypress Semiconductor Corp. v. GSI Technology Inc., 13-cv-02013, U.S. District Court, Northern District of California (San Francisco).

For more patent news, click here.

Trademark

Joan Jett Sues Hot Topic Claiming Blackheart Infringement

Rock star Joan Jett’s Blackheart Records Group Inc. sued mall-based retailer Hot Topic Inc. for trademark infringement, claiming the chain is selling its own line of women’s clothing under the Blackheart brand.

Blackheart, named for Jett’s band, said in a filing dated June 12 in Manhattan federal court that consumers would be confused by the apparel now being sold by the retailer under that name.

According to the complaint, Hot Topic approached Blackheart in February 2010 to design and distribute clothing and other merchandise featuring the brand. Hot Topic later announced its “new test retail concept, Blackheart.” The clothing company, based in City of Industry, California, said in a statement in March that it operates five Blackheart stores.

“After experimenting with legitimate and illegitimate items that use and or are sold under the Blackheart family of marks, defendants commenced their own line of clothing under their own new Blackheart brand,” according to the filing.

Jett formed the all-female band the Runaways in 1973 at the age of 15. In the late 1970s, she and Kenneth Laguna started Joan Jett & the Blackhearts, which had a chart-topping hit with “I Love Rock ‘n Roll.’’ They formed Blackheart Records to market music and other merchandise. Blackheart received a federally registered trademark in 1985, according to the suit.

The case is Blackheart Records Group Inc. v. Hot Topic Inc., 13-cv-04054, U.S. District Court, Southern District of New York (Manhattan).

Rhode Island Lemonade Chain Claims Virginia Store Infringes Mark

Deb’s Frozen Lemonade, a small mother-daughter operation in Virginia’s Roanoke Valley, received a cease-and-desist letter from legal counsel for a Rhode Island-based lemonade chain, the Roanoke Times reported.

Del’s, of Cranston, Rhode Island, claimed that the Virginia business is infringing the chain’s trademarks, according to the newspaper.

Del’s, which has franchise operations in 13 states, said the public is likely to be confused by the name similarity and that litigation could ensue if the name isn’t changed, according to the Times.

The letter from Del’s lawyers made reference to Deb’s page on Facebook Inc. (FB:US)’s social-media site, and owners of the Virginia store said they believe this is how their 36-year-old business came to the chain’s attention, the Times reported.

North American Breweries, West 6th Settle Trademark Suit

North American Breweries Inc.’s Independent Brewers United trademark lawsuit against a Kentucky craft brewery has settled, according to a joint statement from the two companies.

West Sixth Brewing Co. said the suit, filed May 16 in federal court in Lexington, Kentucky, claimed its label infringed the trademarks for North American’s Magic Hat Brewing’s Magic Hat Beer.

The Kentucky brewery had asked its customers to petition Rochester, New York-based North American to drop the suit.

According to the statement, the parties ‘‘addressed the issues in the lawsuit in a manner that eliminates potential confusion about product origin and resolves the lawsuit in a mutually acceptable way.”

No details of the settlement were released and the two companies said in their statement that they will no longer discuss the issues in public.

The case is Magic Hat IP LLC v. West Sixth Brewing Co., 13-cv-00136, U.S. District Court, Eastern District of Kentucky (Lexington).

For more trademark news, click here.

Copyright

Apple’s Eddy Cue Says He Didn’t Know of Publisher Communications

Eddy Cue, the Apple Inc. (AAPL:US) executive the government claims was the “chief ringleader” of a scheme to fix e-book prices, said he was unaware that publishing chief executive officers were talking with one another during six weeks of intense negotiations with Apple.

Cue, 48, took the stand yesterday in the Justice Department’s civil antitrust case against Cupertino, California-based Apple, which is on trial in federal court in Manhattan. Cue testified that he didn’t know about any of the e-mails and more than 100 phone calls involving the chief executive officers of five of the biggest U.S. book publishers in late 2009 and early 2010.

Cue said he “struggled and fought” with the publishers, in individual talks before the introduction of the iPad, to get them to sign contracts to sell e-books on Apple’s iBookstore. Cue testified it’s his opinion the CEOs weren’t coordinating over their negotiations with Apple.

The government claims Cue led a conspiracy by the publishers to raise prices and pressure Amazon.com Inc. (AMZN:US), the biggest e-book seller, to abandon its practice of selling electronic versions of best-selling books for $9.99, at a loss.

Apple denies it conspired to fix prices and is fighting the case, which U.S. District Judge Denise Cote will decide without a jury.

The government claims Apple got the publishers to force Amazon and other e-book retailers to switch from a wholesale pricing model, under which the retailers set prices, to a “agency” pricing, which allowed the publishers to set the prices.

Apple’s contracts with the publishers gave Apple 30 percent of the retail price. A so-called “most-favored nation,” or MFN, clause in the contract allowed it to match low prices set by other e-book sellers.

Five publishers signed agency contracts with Apple: Verlagsgruppe Georg von Holtzbrinck GmbH’s Macmillan unit, CBS Corp. (CBS:US)’s Simon & Schuster, Lagardere SCA (MMB)’s Hachette Book Group, Pearson Plc (PSON)’s Penguin unit and News Corp.’s HarperCollins. All five settled with the government, avoiding trial.

A sixth publisher, Random House Inc., didn’t sign an agency agreement with Apple and isn’t involved in the U.S. suit.

The case is U.S. v. Apple Inc., 12-cv-02826, U.S. District Court, Southern District of New York (Manhattan).

U.K. Newspaper Charity Licensing Discount Too Small, Critic Says

The U.K.’s Newspaper Licensing Agency, which licenses the use of newspaper content, said it will extend a discount on licensing fees to charities, the Third Sector news website reported.

Vicky Browning, representative of CharityComms, a professional organization for charity communications workers, said the discount wasn’t big enough and the fees are a burden on many U.K. charities, according to Third Sector.

She said that the fees are typically 1 pound ($1.57) for each article that is copied, and some of the U.K.’s largest charities are hit with licensing costs in excess of 10,000 pounds, Third Sector reported.

She said her organization believes that charities should be exempt from such licensing fees, according to Third Sector.

For more copyright news, click here.

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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Companies Mentioned

  • MYGN
    (Myriad Genetics Inc)
    • $36.19 USD
    • -0.53
    • -1.46%
  • CY
    (Cypress Semiconductor Corp)
    • $10.15 USD
    • -0.15
    • -1.48%
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