Bayer, Oxis, Schutt, Righthaven, Phillie Phanatic: Intellectual Property
A U.S. appeals court refused to reconsider whether a patent settlement reached by Bayer AG over the anthrax treatment Cipro was appropriate, a setback in the government’s efforts to curb such deals.
The Court of Appeals in New York yesterday denied a request that all judges consider the standard for determining if the agreements violate antitrust laws. A three-judge panel in April upheld the dismissal of a lawsuit over Bayer’s payments to Teva Pharmaceutical Industries Ltd.’s Barr Pharmaceuticals Ltd. in return for dropping plans for a generic copy of Cipro.
The panel in April urged CVS Caremark Corp., Rite Aid Corp. and labor groups challenging the settlement to seek the review before the full court. The panel said it had to uphold the settlement, citing a 2006 appeals court decision in an unrelated drug case.
Since the 2006 ruling, “this type of settlement, once unheard of, has become increasingly common,” Judge Rosemary Pooler wrote, saying the full appeals court should have considered the case.
The settlements are known as “reverse payment” or “pay for delay” deals because a drug company compensates the generic-drug maker in return for dropping challenges to a patent. Courts have upheld such agreements as long as they don’t bar introduction of copies beyond the terms of the patents.
The majority in the 2006 case “recognized the ‘troubling dynamic’ of permitting exclusion payments that ‘inevitably protect patent monopolies that are, perhaps, undeserved,’” Pooler wrote. “Subsequent experience has shown that the majority was right to be troubled.”
In the Cipro case, Bayer paid $398.1 million beginning in 1997 for Barr to drop its challenge and agree not to sell a drug copy 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.
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.
The case is In Re Ciprofloxacin Hydrochloride Antitrust Litigation, 05-2851 and 05-2852, 2nd U.S. Circuit Court of Appeals (New York).
Oxis, Estee Lauder Settle Anti-Aging Compound Patent Dispute
Oxis International Inc. and Estee Lauder Cos. settled a patent dispute, the two companies said in a joint statement.
Estee Lauder, the New York-based cosmetics company, sued Oxis in federal court in New York in June, seeking either a declaration that it wasn’t infringing two patents held by Oxis or that the patents were invalid.
The patents relate to the use of a particular amino acid, L-ergothioneine, to combat and prevent damage to the skin from aging and exposure to ultraviolet light.
In dispute were patents 6,103,746, issued in August 2000, and 6,479,533, issued in November 2002.
According to the statement, Oxis, based in Beverly Hills, California, retains full title to the patents, and Estee Lauder receives a non-exclusive license to the technology they cover within the cosmetic market. No other details of the agreement were disclosed.
Estee Lauder was represented in the litigation by David Leichtman and Oren Dov Langer of Minneapolis-based Robins, Kaplan, Miller & Ciresi LLP.
The case is Estee Lauder Companies v. Oxis International Inc., 1:10-cv-04673-PGG, U.S. District Court, Southern District of New York (Manhattan)
Schutt Sports in Bankruptcy, Asks Shield From Verdict
Schutt Sports Inc., the Illinois football-helmet maker, filed for bankruptcy and sued competitor Riddell Inc. seeking an order to block collection of an earlier $29 million patent suit verdict.
Schutt and affiliates filed Chapter 11 bankruptcy papers in Wilmington, Delaware Sept. 6. They listed both assets and debt of $50 million to $100 million. Schutt also sued Riddell, asking the bankruptcy court to bar collection of the damages in the patent suit and to block an order from the trial court not to sell helmets involved in the case.
A federal court jury in Madison, Wisconsin, found last month that Schutt’s DNA and ION football helmets infringed Riddell inventions and awarded Riddell the damages, Riddell said in a statement at the time.
“The debtors are faced with a softer demand for their products due to cutbacks in school budgets and, at the same time, operate under an over-leveraged capital structure,” Rollen Jones, Schutt’s chief financial officer, said in court papers.
The company also faces the $29 million verdict “and continued litigation attacks from Riddell,” Jones said.
Schutt, based in Litchfield, Illinois, is the world’s biggest maker of football helmets, the company says on its website. Riddell, an affiliate of Easton-Bell Sports Inc., says it is the official helmet provider for the National Football League.
“Riddell is the industry leader in football helmet safety and we have invested millions of dollars in technology and helmet design innovation,” Dan Arment, the company’s president, said after the verdict.
Joel Curran, a Riddell spokesman, said the company doesn’t comment on ongoing litigation.
The bankruptcy case is In re Schutt Sports Inc., 1:10-bk- 12795, and the Riddell suit is Schutt Sports Inc. v. Riddell Inc., 1:10-ap-52995, U.S. Bankruptcy Court, District of Delaware (Wilmington). The patent case is Riddell Inc. v. Schutt Sports Inc., 3:08-cv-00711, U.S. District Court, Western District of Wisconsin (Madison).
For more patent news, click here.
Trade Secrets/Industrial Espionage
Hewlett-Packard Sues to Block Hurd From Taking Oracle Job
Hewlett-Packard Co. sued former Chief Executive Officer Mark Hurd to block him from working as a president of Oracle Corp., the world’s second-biggest software company.
Serving as an Oracle president would make it “impossible” for Hurd to avoid using or disclosing HP’s trade secrets and confidential information, according to HP’s lawsuit, filed yesterday in California state court.
Oracle announced the hiring Sept. 6 and said Hurd would serve as a board member, reporting to CEO Larry Ellison.
“In his new positions, Hurd will be in a situation in which he cannot perform his duties for Oracle without necessarily using and disclosing HP’s trade secrets and confidential information to others,” HP said in the complaint.
Glenn Bunting, a spokesman for Hurd, declined to make an immediate comment. Oracle spokeswoman Deborah Hellinger didn’t respond to a request for comment.
Technology companies including HP, Apple Inc., Microsoft Corp., International Business Machines Corp. and Google Inc. have clashed over hiring in the past, with one side trying to bar managers privy to sensitive information from moving to a rival. Some lawsuits are settled out of court. Lawyers who routinely handle such cases say others are sometimes the business equivalent of divorce cases, often with bitterness and harsh words on both sides.
HP may struggle to prevent Hurd from working at Oracle before there is evidence he has disclosed or used HP’s proprietary information, said Frederick Baron, chairman of the employment and labor practice at Cooley Godward Kronish LLP.
“HP will have an uphill climb,” he said. “The inevitable use doctrine has been argued around the country, but it is not well established in California or in many jurisdictions.”
Hurd left HP Aug. 6 after the company said he violated standards of business conduct. An investigation into a sexual harassment claim said inaccurate expenses, filed by him or in his name, covered up a personal relationship with a contractor.
As part of his severance, Hurd was due to receive a payment of $12.2 million, plus other benefits that include restricted HP shares. According to documents filed with the complaint, Hurd signed agreements with HP in February 2008, 2009, and 2010, and again on Aug. 6, that prevent him from disclosing confidential information, and from soliciting HP customers, employees, or suppliers for two years.
The new case is Hewlett-Packard Co. v. Hurd, 110-cv-181699, California Superior Court, Santa Clara County (San Jose).
For more, click here.
Copyright
Righthaven Sues Nevada GOP Senate Candidate for Infringement
Sharron Angle, the Republican candidate for the Senate seat held by Majority Leader Harry Reid, a Democrat, is another target in a recent series of Nevada copyright cases.
Righthaven LLC, which has sued more than 200 website operators for allegedly infringing copyrights to stories appearing in the Las Vegas Review-Journal, sued Angle in federal court in Las Vegas on Sept. 3.
According to the complaint, a Review-Journal story related to jobs and the economy was posted on the www.sharonangle.com website without authorization. A second story, related to the political clout possessed by Senator Reid, also was posted without permission, Righthaven said in its pleadings.
Angle’s campaign didn’t respond immediately to an e-mailed request for comment.
The case is Righthaven LLC v. Angle, 2:10-cv-01511, U.S. District Court, District of Nevada (Las Vegas).
For more copyright news, click here.
Trademark
League to Save Lake Tahoe Says Fitness Trainer Infringes Marks
A fitness trainer in South Lake Tahoe, California, was told his logo infringes the trademark of the League to Save Lake Tahoe environmental group, the Sierra Sun reported.
Chris Minnes, who owns Keep Tahoe Fit, was told his blue and white trademark infringed the league’s “Keep Tahoe Blue” mark, according to the newspaper.
The fitness trainer said the league’s demand he change his logo is an “attack” on the community, and that a better use of the environmental group’s resources would be the protection of the lake, according to the Sun.
A spokesperson for the league told the newspaper it had attempted to resolve the issue, and that it is troubled by a for-profit entity’s use of a similar mark.
Major League Baseball Grounds Phillie Phanatic Mascot’s Flight
Major League Baseball demanded that a team entered in Philadelphia’s version of the Red Bull Flugtag completion remove the Philadelphia Phillies’ Phillie Phanatic mascot from their human-powered flying machine, leading to the renaming of the team, according to the Flugtag website.
The competition, held to promote Red Bull GmbH’s energy drink, was held in four cities in 2010: Miami; Minneapolis/St. Paul Minnesota; Long Beach, California; and Philadelphia. Contestants build human-powered flying machines that generally end up dumping themselves and their operators into a body of water rather than gaining altitude and actually flying.
The “Phlyin’ Phanatics” team wasn’t allowed to fly with the Phillie Phanatic’s fuzzy green head on the machine when it was launched at a Delaware River site over the Labor Day weekend.
After Major League Baseball warned of trademark infringement allegations if the Phillie Phanatic remained aboard, the Phlyin’ Phanatics’ pilot suggested the entry be renamed Philly Mascot That Major League Baseball Decided to Kill, according to the Philadelphia Enquirer.
The Flugtag website lists the furthest flight to date as 195 feet, set at a Flugtag in Austria. The furthest U.S. flight -- 155 feet -- was made at Nashville, Tennessee’s Flugtag in 2007.
The former Phlyin’ Phanatics competed as the “Phlyin’ Censored” and, unlike others in the competition, didn’t have a photo on the Flugtag website.
The top prize was won by the “Giant Flying Llama” team, followed by “Let Freedom Wing” and “Bumble” according to the website.
For more trademark news, click here.
IP Moves
Sheppard Mullin Expands IP Practice With Paul Hastings Hire
Sheppard Mullin Richter & Hampton LLP hired Stephen S. Korniczky for its IP practice group, the Los Angeles-based firm said in a statement.
Korniczky, who joins from Los Angeles’s Paul Hastings Janofsky & Walker LLP, has litigated more than 200 patent disputes. From 2005 to 2009 he headed his former firm’s global IP practice. He previously practiced at the now-defunct Los Angeles firm of Lyon & Lyon.
Among clients he has represented are Samsung Electronics Co., HTC Corp., Kyocera Corp.’s Kyocera Wireless unit, MediaTek Inc. and ESPN Inc.
Korniczky has an undergraduate degree in engineering from Polytechnic University and a law degree from the State University of New York Buffalo School of Law.
To contact the reporter on this story: Victoria Slind-Flor in Oakland, California, at vslindflor@bloomberg.net.
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