Bayer-Teva, Orchid Chemicals, Generex, Google, V&S: Intellectual Property

Patent settlements reached by drug companies including Bayer AG may violate antitrust laws, a U.S. appeals court said, citing an increase in cases in which makers of brand-name medicines pay rivals to delay generic products.

A three-judge panel of the 2nd U.S. Circuit Court of Appeals in New York made the determination yesterday in saying it was reluctantly upholding dismissal of a challenge to a deal between Bayer and Teva Pharmaceutical Industries Ltd.’s Barr over the anthrax treatment Cipro because of legal precedent.

Courts have upheld “pay-to-delay” agreements as long as they don’t prevent introduction of the generic drug beyond the terms of the patents. The panel yesterday urged objectors to that precedent, including pharmacy chain CVS Caremark Corp. and labor unions, to ask the full court to look deeper into the issue.

The Justice Department said last year the payments may be illegal and Federal Trade Commission Chairman Jonathan Leibowitz in January argued that the courts are allowing these agreements without regard for the merit of the patents. He said pay-to- delay deals limit the availability of lower-cost generic versions of medicines, costing American consumers $3.5 billion a year in higher prescription drug prices.

The judges’ comments may be “the turning point,” said Steve Shadowen, a lawyer who represents CVS and Rite Aid Corp. in the case.

Had Barr continued to fight the patent and won, consumers could have saved as much as $3.9 billion on the price of Cipro between 1998 and 2004, Shadowen said.

The words of the appeals court are “further evidence that courts are rethinking their approach to pay-for-delay settlements,” Leibowitz said in a statement.

The settlements are known as reverse payments because the patent owner typically provides the company it sued some financial consideration, such as a marketing license, to stop producing the generic drug. The drugmakers contend the agreements provide certainty of when a low-cost medicine will enter the market and often shave years off the terms of patent protection.

In the Cipro case, Bayer paid $398.1 million beginning in 1997 for Barr to drop its challenge and agree not to enter the market with a generic until the patent expired in 2003. An appeals court later upheld the patent in a separate challenge brought by Mylan Inc., and both Bayer and Barr cite that ruling as proof there was nothing wrong with their agreement.

Marcy Funk, a spokeswoman for Bayer, said the Leverkusen, Germany-based company was pleased the court affirmed dismissal of the case and has “no further comment on the ruling.”

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Apple Seeks U.S. Patent on Invisible Portable Device Controls

Apple Inc., maker of the iPad and iPhone, applied for a patent on a technology for a “disappearing button or slider” that would make a portable electronic device less cluttered- looking.

Application 20100103116, published in the database of the U.S. Patent and Trademark Office yesterday, is for a touch input that appears invisible to the user.

The way the user can tell that it is operating is that tiny holes on the device’s frame through which a light shines making the button visible when that area of the frame is touched.

An advantage of the “invisible” controls is that they won’t be subject to as much wear and tear as mechanical input devices and are also less likely to admit dirt, dust and moisture into the device, Apple said in its application.

The Cupertino, California-based company filed its patent application in October 2008 with assistance from Washington’s Sterne Kessler Goldstein & Fox PLLC.

Orchid Settles Namenda Patent Dispute With Forest

Orchid Chemicals & Pharmaceuticals Ltd. settled a patent dispute with Forest Laboratories Inc. over a copy of Namenda, a drug used to treat Alzheimer’s disease.

Under the settlement, Chennai-based Orchid will start selling a generic version of Forest’s Namenda in January 2015, Orchid said in a statement to the Bombay Stock Exchange. Namenda had sales of about $950 million in 2009, Orchid said.

Forest, based in New York, sued an Orchid unit for wrongly applying to the U.S. Food and Drug Administration to market a Namenda copy before the end of its patent’s validity, U.S. federal court papers show.

The patent covering Namenda -- 5,061,703 -- expires in April 2015, according to Forest’s quarterly report filed Feb. 9 with the Securities and Exchange Commission.

The case is Forest Laboratories Inc. v. Orgenus Pharma Inc., 08CV291, U.S. District Court, Delaware (Wilmington).

Generex Gets U.S. Patent on Oral Insulin Delivery Method

Generex Biotechnology Corp. received a U.S. patent for a method of delivering insulin through the inner lining of the mouth.

Patent 7,687,453 covers a method of delivering large- molecule drugs such as vaccines and hormones through oral membranes.

The drug molecules are encapsulated in coating that protects them from premature degradation in the acidic environment of gastrointestinal system, according to the patent. The encapsulation prevents the oral tissue damage that often accompanied the use of bile salts to aid in the delivery of the insulin.

Generex, based in Toronto, said in a statement yesterday that the new patent is one of 22 U.S. patents it has on its proprietary drug-delivery system. The company’s Generex oral- insulin product is presently in phase III clinical trials around the world, the company said.

Copyright

Google Wins ‘Thumbnail’ Copyright Ruling in German Court

Google Inc., operator of the world’s most-used Internet search engine, won dismissal of a lawsuit in Germany’s top civil court aimed at stopping the company’s use of “thumbnail” preview images.

Google isn’t violating the copyright of an artist who had posted photographs of her works on her Web site, the Federal Court of Justice said in an e-mailed statement yesterday.

Google “was allowed to interpret the plaintiff’s behavior as agreeing to use her works in image searches,” the court said. “The plaintiff made the content of her site available without using technical tools to block search engines from finding and displaying her works.”

The case highlights disputes over how copyrighted material can be used without an owner’s permission. Web sites such as Google have made it easier for consumers to share such content, prompting artists, publishers and sports leagues to step up efforts to protect their property.

The ruling allows the company to continue to serve Internet users and Web site owners, Arnd Haller, general counsel for Google in Germany, Switzerland and Austria, said in blog posting.

The artist, whose name wasn’t disclosed, posted images of her works on her Web site in 2005. A Google search with her name resulted in the display of thumbnail photos showing previews of her works. Her suit was also dismissed by two lower courts.

“A prohibition of these searches would have restricted the use of the Internet considerably,” German high-tech industry group Bitkom said in a statement. “That wouldn’t have been in the interest of many copyright holders, like photographers, who market their pictures via the Internet.”

Google would only have been liable for copyright infringement if someone had posted the pictures without the artist’s consent and Google knew that, the German court said, referring to a March 23 ruling at the European Court of Justice.

The case is BGH, I ZR 69/08.

Trademark

Absolut Vodka’s Trademark Dispute with Absolute Radio Settled

V&S Vin & Sprit AB settled a trademark lawsuit with Times of India Group’s Absolute Radio unit, the U.K.’s Guardian newspaper reported yesterday.

The dispute related to the Swedish vodka brand Absolut, and was settled for undisclosed terms, according to the newspaper.

V&S filed a trademark-infringement action against the radio station, claiming the public was likely to confuse the two brands, the Guardian reported.

V&S told the Guardian the settlement will enable it to “develop the iconic brand without risk of confusion.”

Texas Asks Patent Office to Delay Issuing ‘Alamo’ Trademark

The state of Texas filed papers with the U.S. Patent and Trademark Office in an attempt to halt the registration of “The Alamo” as a trademark by the Daughters of the Republic of Texas, the Dallas Morning news reported yesterday.

The president of the Daughters, a nonprofit organization whose membership is restricted to descendents of Texas pioneers, told the newspaper her group was seeking the mark in order to create a line of official Alamo merchandise.

The Daughters have operated the Alamo since 1905.

The state asked the Patent Office for a 90-day extension period to determine whether it wanted to oppose the Daughters’ application, the newspaper reported.

IP Moves

Hughes Hubbard Hires IP, Trade Specialist Jennifer Choe Groves

Hughes Hubbard & Reed LLP hired Jennifer Choe Groves to head its intellectual-property and entertainment practice groups, the New York-based firm said in a statement April 26.

Grove previously was senior director of intellectual property and innovation and headed the Special 301 Committee Office of the U.S. Trade Representative. There she negotiated and implemented the IP elements of international trade agreements with Bahrain, Oman, United Arab Emirates, Morocco, Jordan, Israel, Malaysia, South Korea and Thailand.

She also has worked as an assistant district attorney in Manhattan.

Groves has represented clients whose technologies include pharmaceuticals, semiconductors, cellular telephones, automobiles, video technology, motion pictures, music and media.

She has a diploma in piano and composition from Julliard School of Music, an undergraduate degree in English from Princeton University, a law degree from Rutgers University and a master’s degree in intellectual property and international law from Columbia University.

To contact the reporter on this story: Victoria Slind-Flor in Oakland, California, at vslindflor@bloomberg.net.

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