Bayer, Target, Zynga, Google: Intellectual Property

Bayer AG was among drug companies told by European Union antitrust officials to submit details of patent-settlement deals that may be used to delay the sale of generic versions of medicines.

“A selected number” of unidentified companies must hand in copies of all agreements from last year “relevant” to the 27-nation EU region, the European Commission said in a statement on Jan. 17. Bayer, Europe’s largest drug and chemical maker, received a request, said Rolf Ackermann, a spokesman for the Leverkusen, Germany-based company. He declined to comment further.

Patent settlements “are an area of particular concern because they may delay the market entry of generic medicines,” Joaquin Almunia, the EU’s competition commissioner, said in the statement.

Antitrust regulators on both sides of the Atlantic are focusing on how settlements between companies that make branded medicines and generic producers might harm consumers. AstraZeneca Plc, the U.K.’s second-biggest drugmaker, and Nycomed A/S said last month they were raided by EU officials as part of a probe into possible anti-competitive practices.

The commission, the EU’s executive arm, said Jan. 17 it will use the information it gleans from companies for a report in the first half of 2011. The move follows an earlier study of drug-industry settlements from mid-2008 to the end of last year.

“At this point in time, we’re not aware of any request from the commission on this matter,” Sarah Lindgreen, a spokeswoman for AstraZeneca, said in an e-mail. AstraZeneca has said the EU antitrust raids at its offices concerned the ulcer drug Nexium.

Drug developers use a variety of techniques to delay generics, the EU said in a 2009 report.

“This is still a hot topic with ongoing cases,” Lesley Ainsworth, a partner in London with law firm Hogan Lovells, said in an e-mail. “Continuing the monitoring will in itself tend to discourage the sorts of reverse-payment deals that the EC and U.S. authorities are concerned about.”

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Trademark

Callaway Sued Over Use of ‘Octane’ Mark on Golf Equipment

Callaway Golf Co., maker of Big Bertha golf clubs, was sued for trademark infringement by a Wisconsin competitor.

TourSwing Golf LLC accused Callaway of infringing its “Octane” trademark. The company claims that Callaway has attended many of the same golf trade shows and the companies had adjacent booths. TourSwing said its Octane golf club has been displayed at those shows, and Callaway had “actual” knowledge of the Grafton, Wisconsin-based company’s use of the name and mark.

It objects to Callaway’s July application to register “Octane” as a trademark with the U.S. Patent and Trademark Office, and the Carlsbad, California-based company’s use of the Octane name “as a prominent feature” on its Diablo line of golf clubs.

Consumers are confused by Callaway’s actions, said TourSwing, which asked the court to bar Callaway’s use of the term. TourSwing seeks money damages, including profits tied to the alleged infringement, as well as extra damages to punish Callaway for its actions and awards of attorney fees and litigation costs.

Callaway didn’t respond immediately to an e-mailed request for comment.

TourSwing is represented by Mark M. Leitner, Joseph S. Goode and John F. Hovel of Kravit, Hovel & Krawczyk SC of Milwaukee.

The case is TourSwing Golf LLC v. Callaway Golf Co., 3:11- cv-00043, U.S. District Court, Western District of Wisconsin (Madison).

Target Sued for Trademark Infringement in Canadian Court

Target Corp., the U.S.-based discount retailer that said last week it would spend $1.8 billion to buy store leases from the Zellers unit of Hudson’s Bay Co., was sued for trademark infringement by a Canadian retailer, Toronto’s Globe and Mail reported.

Isaac Benitah, who acquired the Target Apparel brand in 2001 from now-defunct retailer Dylex Ltd., opened his first Target Apparel store in 2005 in Toronto, according to the Globe and Mail.

In a complaint filed Jan. 17, Benitah asked a Canadian court to bar Minneapolis-based Target from using its name in Canada and for $250 million in damages, the newspaper reported.

In November, Target asked the Federal Court of Canada to order Benitah not to use the Target name or its bull’s-eye logo, according to the newspaper.

Blingville Seeks Declaration It Doesn’t Infringe Zynga Marks

Blingville LLC, a computer game company based in Harpers Ferry, West Virginia, asked a federal court to declare that it isn’t infringing trademarks belonging to San Francisco’s Zynga Game Network Inc.

In a complaint filed Jan. 14 in federal court in Martinsburg, West Virginia, Blingville said the Blingville.com domain name has been in use since 2004 and that it’s licensed to use the domain name and a pending trademark application.

In its court papers, Blingville said it received multiple cease-and-desist notices from counsel for Zynga, even though the San Francisco company “does not own and has not registered or applied for any trademark registrations” for Blingville or similar words.

According to the patent office database, an application to register “Blingville” as a trademark was filed in November by Overtime Apps LLC of Bellefonte, Pennsylvania. Blingville said that it is Overtime Apps’ licensee.

According to the cease-and-desist notice Blingville included in its court filings, Zynga claims rights to a “ville family of social networking games, which includes YoVille, FarmVille, PetVille, FrontierVille and FishVille.”

Zynga, in a letter sent by Dennis L. Wilson of law firm Keats McFarland & Wilson LLP of Beverly Hills, California, and included in the filing, said it has invested “substantial time and resources” in developing and promoting its ‘ville family of marks, and demanded that Blingville quit using the name.

In a notice sent to Blingville on Jan. 4, Wilson demanded “confirmation of your compliance” with Zynga’s demands by Jan. 11, saying that otherwise, “I will have no choice but to recommend that Zynga consider appropriate legal action.” Zynga, whose games are played on Facebook Inc.’s social media site, is the world’s largest social-game developer with more than 215 million monthly active users, according to the company website.

In addition to seeking a declaration that it isn’t infringing, Blingville asked the court for awards of attorney fees and litigation costs.

Blingville is represented by Michael J. Novotny of Harpers Ferry.

The case is Blingville LLC v. Zynga Inc., 3:11-cv-00004- JPB, U.S. District Court, Northern District of West Virginia (Martinsburg).

Google Rivals Quizzed by EU on Whether Competition Is Thwarted

Google Inc.’s smaller rivals were asked by European regulators investigating the company’s business practices whether they were prevented from competing more broadly with the world’s largest search engine.

Specialized “vertical search” services were asked if they had considered adding extra products to compete head-to-head with Google and how much that would cost, according to one of three questionnaires obtained by Bloomberg News that were sent out as part of a European Union antitrust probe.

Google is being investigated by the European Commission over claims it discriminated against other services in its search results and stopped some websites from accepting rival ads. A Microsoft Corp. Internet unit and other competitors were among the complainants.

The 27-nation EU’s antitrust authority asked rivals if they had “ever considered/planned upgrading” their “vertical online search services in order to introduce a horizontal search service.” Vertical search engines limit their answers to one category, such as travel information. Google, Microsoft’s Bing and others offer horizontal search engines that comb all categories for answers.

Another question sought views on whether Google’s search function hurt vertical search engines and if companies were “aware of the existence of features in Google’s natural search algorithm” which “might penalize the ranking or display of your vertical search websites.”

Companies were also asked if they had “ever noticed a sudden significant change” in their Google search ranking and whether that triggered a plunge in visitor numbers.

Al Verney, a spokesman for Google in Brussels, said the company “worked hard to do the right thing by our users and our industry” by ensuring that ads are clearly marked and that users and advertisers can take data with them when they switch services. “There’s always going to be room for improvement and so we’ll be working with the commission to address any concerns.”

Amelia Torres, a spokeswoman for the commission, didn’t respond to a call and an e-mail seeking comment. She said on Jan. 5 that the EU didn’t have any conclusions on Google’s conduct and was “only investigating at the moment” to determine whether any competition rules were broken.

The commission has power to impose fines of as much as 10 percent of revenue for monopoly abuses. The EU’s highest-ever penalty of 1.06 billion euros ($1.42 billion) was against Intel Corp. in 2009.

In a second questionnaire to advertisers, companies were asked if spending with Google “has ever had an influence on your ranking” and whether Google had ever mentioned that increasing advertising spending could improve a search ranking.

Google says on its website that it “never accepts money to include or rank sites in our search results.” Advertising accounted for almost 97 percent of the Mountain View, California-based company’s revenue in 2009, or about $22.9 billion.

For more trademark news, click here.

Copyright

Mattel and MGA’s Bratz Doll Dispute Begins Second Trial

Mattel Inc., the maker of Barbie, accused rival toymaker MGA Entertainment Inc. of stealing its idea for the pouty, multiethnic Bratz doll in 2000 when it made a deal with the Mattel designer who created it.

Opening statements started yesterday in Santa Ana, California, federal court for a trial that U.S. District Judge David Carter has said may take as long as four months. Mattel is seeking damages for copyright infringement and trade-secret theft from closely held MGA, which in turn will ask the jury to hold Mattel liable for unfair competition and stealing its trade secrets.

The case returns to court after a $100 million verdict in favor of Mattel was overturned on appeal. MGA, based in Van Nuys, California, said in court filings that Mattel may seek as much as $1.1 billion in damages for its trade-secret claims.

In 2008, a federal jury in Riverside, California, agreed with Mattel that doll designer Carter Bryant made most of the initial sketches for the Bratz dolls while he worked for El Segundo, California-based Mattel.

The jury awarded the toymaker $100 million in damages and Stephen Larson, the judge presiding over the trial, awarded Mattel rights to most of MGA’s Bratz products.

The U.S. Court of Appeals in San Francisco found that Larson had wrongly ruled that Mattel automatically owned Bryant’s design under the terms of an invention agreement and that the judge incorrectly gave Mattel ownership of later Bratz dolls that MGA developed. Carter, who got the case after Larson left the bench, said last year that all of Mattel’s claims needed to be retried.

The new jury, unlike the one in 2008, will have to decide whether the inventions agreement that Bryant signed in 1999 entitles Mattel to his ideas for the names “Bratz” and “Jade,” one of the first-generation dolls, and whether the agreement entitles Mattel to the inventions that the designer conceived of during his off-hours on nights and weekends.

Carter last month ruled that Mattel can pursue copyright- infringement claims for only the first four Bratz dolls sold by MGA in 2001 and two later ones. Under the judge’s ruling, Mattel can still pursue its trade-secret claims against the entire line of Bratz dolls as well infringement claims for the production sculpt used for most of the dolls, Mattel’s lawyers said.

Mattel first sued Bryant in 2004, alleging he secretly worked for a competitor while still employed at Mattel. Two years later, Mattel filed its copyright-infringement and trade- secret theft claims against MGA. Bryant settled with Mattel before the start of the 2008 trial.

“Mattel’s allegations that we instructed Mattel employees to steal documents is nonsense,” Isaac Larian, MGA’s founder and chief executive officer, said in an e-mailed statement last week. “To the contrary, we told them, in writing, don’t bring anything from Mattel, please. Not even a paper clip.”

The case is Bryant v. Mattel, 04-09049, U.S. District Court, Central District of California (Santa Ana).

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: David E. Rovella at drovella@bloomberg.net.

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