Adidas, Eli Lilly, ITV-Apple, Playboy, Adult Quest: Intellectual Property

Adidas AG and more than 25 other defendants were sued by a Texas patent-owner.

Quark Images LLC of Longview, Texas, claims its two patents for a method of creating customized branded merchandise over a computer network are infringed.

Most of the defendants offer custom created merchandise such as Mars Inc.’s M&M candies on which customers can have any message or photo printed, or Nike Inc. which offers custom- designed athletic shoes through its NikeID program. Serverside Group Ltd. of New York was sued for allegedly selling software that enables the creation of branded and customized credit cards.

Among the other defendants are Zion Bancorporation, Bayerische Motoren Werke AG, and Hallmark Cards Inc.

In dispute are patents 6,493,677 and 6,845,365, which were issued in December 2002 and January 2005, respectively.

Both patents were originally issued to Jones Soda Co., a Seattle-based company that permits customers to order fruit- flavored soft-drink personalized labels for $16.99 per six-pack. In a 2010 regulatory filing, the company said it intended “to explore potential licensing arrangements with third parties to commercialize this patented methodology and defend against patent violations.”

Quark Images asked the court to bar the defendants from future infringement of the patents, and awards of money damages, attorney fees and litigation costs.

The company is represented by Andrew W. Spangler of Spangler Law PC, and Gregory P. Love, Scott E. Stevens, Darrell G. Dotson and Todd Y. Brandt of Stevens Love, all of Longview, Texas.

The case is Quark Images LLC v. Adidas AG,2:10-cv-00293, U.S. District Court, Eastern District of Texas (Marshall).

Eli Lilly’s Strattera Drug Faces Generic Competition

Eli Lilly & Co.’s Strattera faces generic competition after the drugmaker lost a U.S. court case over the attention-deficit treatment, its second patent ruling setback in a month.

U.S. District Judge Dennis M. Cavanaugh in Newark, New Jersey, invalidated a patent on the medicine that would have prevented sales of copies until May 2017. Cavanaugh said Lilly failed to describe in its patent application how anyone could use the invention to treat hyperactivity.

The ruling Aug. 12 favors generic-drug companies including Teva Pharmaceutical Industries Ltd. and Novartis AG’s Sandoz unit.

Lilly said it expects “near-term entry” of generic versions and reduced its sales forecast. The Indianapolis-based company is seeking to preserve patent protection on its drugs because Zyprexa and Cymbalta, accounting for more than a third of its revenue, already face generic competition by 2013.

Strattera, known by its active ingredient atomoxetine, generated U.S. sales of $445.6 million last year as a treatment for attention deficit hyperactivity disorder, the company said in a fourth-quarter earnings statement. The company reported $21.8 billion in total annual revenue.

“We disagree profoundly with the district court’s ruling and will appeal this decision,” Robert A. Armitage, Lilly’s general counsel, said in a statement.

Seamus Fernandez, an analyst with Leerink Swann & Co., said Aug. 12 in a research report that at least seven of the 10 generic-drug makers involved in the case have tentative U.S. Food and Drug Administration approval to sell versions of the medicine. He estimated that an immediate launch could put $100 million worth of Lilly revenue at risk this year.

Robert Hazlett, an analyst with BMO Capital Markets Corp., said in a note the generic-drug companies may decide to wait “until the upcoming appeals process plays out, which should occur within 12 months.”

The ruling is Lilly’s second court loss over a patent in the past month. On July 28, a U.S. appeals court upheld a ruling that a patent on the cancer medicine Gemzar was invalid, which may allow generic competition two years earlier than Lilly had projected. Gemzar had $747.4 million in U.S. sales last year.

Lilly is seeking to increase the speed of drug development as it faces patent expirations on its two top-selling medicines, Zyprexa next year and antidepressant Cymbalta in 2013. Zyprexa sales last year were $4.9 billion, or 23 percent of total revenue, and Cymbalta was $3 billion, or 14 percent of 2009 sales, according to data compiled by Bloomberg.

The other generic-drug makers who had challenged the Strattera patent were Mylan Inc., based in Canonsburg, Pennsylvania; Belgium’s Synthon BV; Iceland’s Actavis Group hf; Canada’s Apotex Inc.; and Indian generic-drug makers Aurobindo Pharma Ltd., Glenmark Pharmaceuticals Ltd., Sun Pharmaceutical Industries Ltd. and Cadila Healthcare Ltd.’s Zydus.

The case is Eli Lilly & Co. v. Actavis Elizabeth LLC, U.S. District Court for the District of New Jersey (Newark).

Oracle Says Google Android Violates Its Java Patents

Oracle Corp. filed a patent- and copyright-infringement lawsuit against Google Inc., claiming its Android software for mobile devices uses technology Oracle obtained in its January acquisition of Sun Microsystems Inc.

“In developing Android, Google knowingly, directly and repeatedly infringed Oracle’s Java-related intellectual property,” Karen Tillman, a spokeswoman for Redwood City, California-based Oracle, said in a statement Aug. 12. “This lawsuit seeks appropriate remedies for their infringement.”

The suit, which Google called “baseless,” opens a new front in Silicon Valley’s smartphone software wars, pitting Oracle against the fastest-growing mobile operating system. Android, used on devices such as Motorola Inc.’s Droid X and HTC Corp.’s Droid Incredible, was the best-selling operating software in the U.S. in the second quarter, topping Research In Motion Ltd. and Apple Inc., research firm Gartner Inc. said yesterday.

Oracle gained the Java programming language as part of its $7.3 billion purchase of Sun. Developed by Sun in the mid-1990s, Java lets developers write programs that work across different operating systems and on a variety of computers. It formed a key building block of the Web and is widely used in business applications. The software also runs on billions of mobile devices, Sun said last year.

The complaint targets Google’s Dalvik virtual machine, one of the software programs used to run applications on the phones. Oracle claims the software was developed using the Java platform. Google hired former Sun engineers so it knew of the Java technology, Oracle said in the complaint.

Oracle, which claims seven patents are being violated, is seeking a court ruling that would ban further use of its intellectual property, and would force the destruction of all products that violate Java-related copyrights on the code, documentation and specifications. It also seeks an unspecified amount of cash compensation.

“We are disappointed Oracle has chosen to attack both Google and the open-source Java community with this baseless lawsuit,” said Aaron Zamost, a Google spokesman. “The open- source Java community goes beyond any one corporation and works every day to make the Web a better place. We will strongly defend open-source standards and will continue to work with the industry to develop the Android platform.”

Java was developed as a proprietary language that needed to be licensed from Sun. During the past decade, then Sun Chief Executive Officer Jonathan Schwartz began making open-source versions of Java products available. That means the code can be used freely by outside developers.

“Java is the single most important software asset we have ever acquired,” Oracle CEO Larry Ellison said when he first announced the Sun purchase. Oracle will continue to expand the Java business, he said at the time.

Oracle isn’t likely trying to take on Google, as much as wanting to squeeze higher royalties out of the company, said James Gosling, who created Java while working at Sun.

“Everything there is about money,” Gosling said about Oracle in an interview today. He resigned from the company in April, a few months after it bought Sun, according to his blog.

While Java is widely used in business applications, many new websites are favoring programming languages such as Ruby on Rails, which is also distributed under an open-source license.

“It’s part of an effort by Oracle to shore up their investment in Java,” Stofega said. “A lot of people would argue Java is losing its relevance versus other platforms.”

Researcher ISuppli Corp. on Aug. 5 projected Android will be in almost a fifth of all smartphones in the world by 2012. It’s used on phones sold through Verizon Wireless and Sprint Nextel Corp., while the iPhone is available only on AT&T Inc.’s network.

Microsoft Corp., the world’s biggest software maker and owner of the Windows Mobile operating system, said in April that Android may infringe its patents. Microsoft, which signed a licensing agreement with HTC, said at the time it was in talks with other makers of phones that run on Android.

Oracle and Google will probably settle the case by agreeing to license each other’s patents, IDC’s Stofega said.

For more patent news, click here.

Trademark

ITV Gears up for Possible Trademark Battle With Apple Over Mark

Executives at ITV Plc, a London-based media company, are meeting with lawyers over a possible trademark challenge to Apple Inc., the U.K.’s Mirror newspaper reported Aug. 13.

The issue is over the name Apple may choose for its set-top box that permits users to download music and movies and view them on their television sets, according to the Mirror.

An ITV official told the Mirror “we all take our ITV brand very seriously and we’ll do everything in our power to protect it.”

The pattern of names Cupertino, California-based Apple has chosen for other products -- iPad, iPod, iPhone, iMac -- has led ITV officials to fear the company will chose iTV for its set-top box, according to the Mirror.

Playboy Cuts Ties to Lisbon Publisher, Sues for Infringing Marks

Playboy Enterprises International Inc., the adult- entertainment company created by Hugh Hefner, sued the publisher of a Portuguese-language “Playboy” magazine for trademark infringement.

FrestaCom-Lisbon Media Publishing is accused of using the Playboy marks without authorization after the publishing contract between the two companies was terminated. Playboy said the contract was voided in July after the Portuguese publisher was in default for more than $190,000 in royalties, according to the complaint filed Aug. 12 in federal court in Chicago.

The U.K.’s Daily Mail said Playboy voided its contract with FrestaCom after the July issue of the Portuguese-language edition came out with a cover showing Jesus in bed with a topless woman. Theresa Hennessy, Playboy Enterprises vice president of public relations told the U.K. newspaper the cover was a “shocking” breach of the company’s standards, and had it been seen in advance by the company “would not have allowed it to be published.”

FrestaCom told Portuguese News Online that the cover was intended to be a tribute to the late Jose Saramago, a Nobel laureate famed for his book “The Gospel According to Jesus Christ.”

Playboy said it has made repeated attempts to settle the royalty dispute with FrestaCom, including having a special Portuguese bailiff attempt to deliver a notice of default to the publisher. FrestaCom employees or agents at the company’s Lisbon headquarters three times refused to accept delivery of the notice of default, Chicago-based Playboy said.

In addition to seeking a court declaration that FrestaCom has no right to use the Playboy marks, the company asked for an order for the destruction of all Portuguese-language Playboy magazines that are on hand or in process, and for awards of money damages, extra damages to punish FrestaCon for its alleged infringement, and for attorney fees and litigation costs.

Additionally, Playboy asked for copies of lists of all names and addresses of subscribers to the Portuguese edition, together with advertising contract files, past editorial files and all bound volumes.

When accessed Aug. 13, a FrestaCom website still displayed the Playboy name and marks. According to an Aug. 13 story posted on the Southern Times website for African news, FrestaCon said it would publish editions of Playboy for Angola and Mozambique, African countries where the Portuguese language is spoken.

Playboy is represented by James R. Pranger and Patrick Frye of Chicago’s Neal, Gerber & Eisenberg LLP.

The case is Playboy Enterprises International Inc., v. FrestaCon-Lisbon Media Publishing LDA, 1:10-cv-05805, U.S. District Court, Northern District of Illinois (Chicago).

For more trademark news, click here.

Copyright

Texas Photographer Sues After Her Photos Turn up on Adult Sites

A Texas-based photographer sued the publisher of a variety of magazines that promote topless bars, swinging clubs and escort services for copyright infringement.

Leann Collins of Austin, Texas, said she shot a series of “100 fine art nudes” and registered the copyright with the U.S. Copyright Office. Her photos contain a “conspicuous notice” of their copyright status, she said in the complaint she filed Aug. 12 in federal court in Houston.

The images are displayed in her www.leanncollins.com website preceded by a full-page copyright notice.

The photographer claims that beginning June 1, the defendants began using her images to advertise “blatant prostitution” and “adult services.” She contacted one of the defendants and left messages regarding infringement.

Included in her complaint is what she says was the e-mail she received in response that said “bitch your pics are public domain if ya don’t wnt them usd don’t put them on web” and “thers nothing ya can do.”

She sued 10 unnamed defendants, together with Adult Quest of Houston, and John Anthony Gray, who, she says, published a number of adult-themed magazines and operates the wwww.adultquesttv.com website. The website contains no contact information.

Collins said her work is tarnished by its association with the defendants’ products and that she’s owed royalties for the unauthorized work for her images.

She asked the court for money damages, an order barring future infringement, and “a turnover” of all the defendants assets used for the alleged infringement, including computer hardware, software, routers, modems, Internet equipment and office equipment. Collins also requested awards of litigation costs and attorney fees.

She’s represented by Dan Crocker of Houston.

The case is Leann Collins v. Doe, 4:10-cv-02882, U.S. District Court, Southern District of Texas (Houston).

For more copyright news, click here.

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

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