Merck, Novartis, Hershey, La-Z-Boy: Intellectual Property

The U.S. Federal Trade Commission urged an appeals court to outlaw settlements between brand-drug manufacturers and generic drugmakers on patent expirations, saying they harm competition and hurt consumers.

The agency asked the U.S. Court of Appeals in Philadelphia to reverse a lower court’s ruling that accords between Merck & Co.’s Schering-Plough unit and generic manufacturers of K-Dur 20 high blood-pressure medicine didn’t violate antitrust laws.

The FTC is fighting agreements between companies about when generic drugs can be marketed, known as “pay for delay” settlements, saying they cost consumers the equivalent of about $3.5 billion a year in higher prices for pharmaceuticals. The agency is pressing the courts and Congress to limit the settlements. Brand and generic drugmakers say the deals may bring lower-cost copies of medicines to the market sooner than they would otherwise.

The commission filed a court brief May 18 siding with retailers such as CVS Caremark Corp. (CVS)’s CVS Caremark Pharmacy unit, Rite Aid Corp. (RAD), Safeway Inc. (SWY) and Walgreen Co. that have challenged the legality of patent settlements between Schering- Plough Corp. and two generic drugmakers for K-Dur 20, a potassium supplement.

The lower-court decision would allow name-brand companies to pay generic rivals to stay out of the market until the patents for the medication expire. These deals run counter to basic antitrust principles as well as the Hatch-Waxman Act of 1984, which Congress passed to foster competition with generic drug firms, the FTC said yesterday in a statement.

FTC Chairman Jon Leibowitz called the deals “outrageous” and said they harm consumers in a May 3 interview with Bloomberg News. Deals that delayed the introduction of cheaper generic medicines rose 63 percent last year, he said in the interview.

The number of deals increased to 31 from 19 in 2009, the FTC said May 4. The agency said there were no such settlements in 2004. The cases involved 22 products and $9.3 billion in sales. The FTC tracks the drug patent settlements, which companies are required to report to the agency.

The agency sued Schering-Plough over the patent settlements in 2001. The Supreme Court in 2006 refused to give the agency more power to crack down on the practice when it left intact a decision by a federal appeals court that overturned FTC sanctions against Schering-Plough in 2005.

Merck bought Schering-Plough in November 2009.

The case is In re K-Dur Antitrust, 10-02077, 10-02078 and 10-02079, U.S. Court of Appeals for the Third Circuit (Philadelphia).

Novartis’s Alcon Unit Wins Patent Fight Over Generic Patanol

Novartis AG (NOVN)’s Alcon unit won a court ruling that will prevent Apotex Inc. from selling a generic version of the eye drug Patanol until a patent expires in 2015.

U.S. District Judge Richard Young in Indianapolis said that a copy proposed by Apotex would infringe patent 5,641,805 owned by Alcon and partner Kyowa Hakko Kirin Co., and rejected claims that the patent was invalid or unenforceable.

Patanol, whose active ingredient is olopatadine hydrochloride, is the top-selling medicine to treat allergic conjunctivitis, the most common type of allergic disease in the eye. Basel, Switzerland-based Novartis acquired the drug with its purchase last month of Alcon.

The court decision “is an important milestone to defend Alcon’s intellectual property rights,” Stuart Raetzman, vice president for global marketing at Alcon, said in a statement.

The patent covers the first compound to stabilize human mast cells and prevent them from triggering the allergic reactions, such as redness, itching and runny eyes, according to the court opinion. Mast cells exist throughout the body and are the primary cells involved in allergic reactions, Young said in his opinion.

“Alcon invested many years and millions of dollars in the discovery and development of an ocular allergy product that would stabilize mast cells in the eye and provide long-term relief of the signs and symptoms of ocular allergies,” Raetzman said.

Closely held Apotex, based in Toronto, claimed that the patent was an obvious variation of earlier inventions in the field and that Alcon and Kyowa failed to adequately describe what they claim to have invented.

The case is Alcon Manufacturing Ltd. v. Apotex Inc., 06cv1642, U.S. District Court for the Southern District of Indiana (Indianapolis).

Fractus Says Jury Awards $23 Million in Antenna Patent Case

Fractus SA, a closely held maker of mobile-phone antennas, won a $23 million jury verdict in a patent infringement case, lawyers for the Barcelona-based company said in a statement.

The Spanish company sued Samsung Electronics Co. in federal court in Tyler, Texas, in May 2009, alleging that nine of its patents for mobile-phone antennas were infringed.

Fractus was awarded royalties of more than 35 cents per phone, according to the statement. Fractus previously negotiated patent licenses valued at almost $70 million with other companies, the lawyers said.

Lawyers for Samsung from Baker Botts LLP didn’t immediately respond to an e-mailed request for comment.

Fractus was represented by lawyers from Heim Payne & Chorush LLP and Susman Godfrey LLP, both of Houston, and Longview, Texas-based Ward & Smith Law Firm.

The case is Fractus SA v. Samsung Electronics Co., 6:09-cv- 00203-LED-JDL, U.s. District Court, Eastern District of Texas (Tyler).

For more patent news, click here.

Trademark

Hershey Drops Suit Claiming Mars Infringed Reese’s Trademark

Hershey Co. (HSY), the maker of Reese’s candies, dropped a lawsuit against Mars Inc. in which it claimed Mars’s packaging for its Dove peanut butter and chocolate bars infringed trademarks for Reese’s.

Hershey and Mars agreed to “dismiss with prejudice all claims asserted in this action,” according to a filing May 23 in federal court in Harrisburg, Pennsylvania. No details were given for the dismissal.

Hershey sued in November, claiming that Mars used an orange background for its Dove candies that had been trademarked for Reese’s Peanut Butter cups and Reese’s Pieces. The use of the color would “confuse consumers” about the source of the product, Hershey claimed.

Jeff Beckman, a spokesman for Hershey, Pennsylvania-based Hershey, and Lauren Nodzak, a spokeswoman for McLean, Virginia- based Mars, didn’t immediately return calls seeking comment.

Mars filed an action against Hershey in federal court in Virginia in November seeking a ruling that it wasn’t infringing Hershey’s trademarks. That action is also dismissed.

The Hershey case is The Hershey Co. v. Mars Inc., 10-02417, U.S. District Court, Middle District of Pennsylvania (Harrisburg). The Mars case is Mars Inc. v. The Hershey Co., 10- 01325, U.S. District Court, Eastern District of Virginia (Alexandria).

La-Z-Boy Sued for Using ‘Live Life Comfortably’ Mark

La-Z Boy Inc., the Monroe, Michigan-based manufacturer of upholstered furniture, was sued for trademark infringement by a maker of pillows and bedding.

Hollander Home Fashions LLC of Boca Raton, Florida, accused the furniture maker of infringing the “live comfortably” trademark it has used since 2002 for pillows and other products. The company first registered the mark in August 2003, according to the complaint filed May 23 in federal court in West Palm Beach, Florida.

La-Z-Boy is using “live life comfortably” in print and television advertising and on its website, according to court papers. Hollander also objects to La-Z-Boy’s licensing the term for use on a line of La-Z-Boy branded bedding. The use of this term wasn’t authorized by Hollander, the company said.

Hollander claims the public is confused and led to believe, falsely, that an affiliation, sponsorship or license exists between the two companies.

The Florida company asked the court to order La-Z-Boy to quit using any trademark, URL or copyright that is confusingly similar to those it owns. It also seeks money damages, extra damages to punish Hollander for the alleged infringement, and awards of attorney fees and litigation costs.

Additionally, Hollander asked the court to order the U.S. Patent and Trademark Office to deny registration of a La-Z-Boy application filed Aug. 31 to register “live life comfortably” as a trademark.

La-Z-Boy does “not comment on matters in litigation,” spokeswoman Kathy Liebmann said in an e-mail.

Hollander is represented by Gerard Joseph Curley Jr. and Brian McPherson of Gunster Yoakley & Stewart of West Palm Beach, and Bruce H. Sales, Gregg A. Paradise and Robert B. Hander of Lerner David Littenberg Krumholz & Mentlik LLP of Westfield, New Jersey.

The case is Hollander Home Fashions LLC v. La-Z-Boy Inc. (LZB), 9:11-cv-80605, U.S. District Court, Southern District of Florida (West Palm Beach).

For more trademark news, click here.

Copyright

EU Targets Digital Books, Music Rights in Copyright Overhaul

Digital libraries may be able to include more copyrighted works under European Union rules proposed yesterday.

The European Commission is seeking to bolster the EU-funded Internet library Europeana, a rival to the Internet book service operated by Google Inc. (GOOG), owner of the most popular Internet- search engine.

Some so-called orphan works, including newspapers and video footage for which no one can be identified to authorize digital use, may be included in digital libraries after a “diligent search” can’t trace the author, the commission said.

About 40 percent of the British Library’s copyrighted works cannot be digitized because authors can’t be located, the commission said. Google has said it doesn’t scan copyrighted material in European libraries.

Michel Barnier, the EU’s internal market commissioner, said he will also fulfill a promise to submit proposals later this year to simplify music rights, in a move that may aid Apple Inc. (AAPL)’s iTunes and other music services to open EU-wide stores.

Music services must currently seek permission from each of the EU’s 27 nations before they can sell a track across the bloc.

Barnier said he would examine how levies are charged on electronic devices and blank disks in some European countries to compensate copyright holders for private copying.

Triten Sued for Copyright Infringement by Software Company

Triten Corp., a Houston-based holding company that develops and manufactures alloy products through its subsidiary units, was sued for copyright infringement by a Chicago-based software company.

Cassetica Software Inc. accused Triten of downloading and copying the source code for its NotesMedic programs without authorization. According to the complaint filed May 23 in federal court in Chicago, Triten employees, including “senior executives, and at least one officer and member of the board of directors” have copied the software.

The Chicago software company claims that Triten “has the right and ability to supervise its employees with respect to their downloading, copying and installation of NotesMedic on Triten-owned computers and personal computers who connect to the Internet through Triten’s Internet connections.”

Cassetica asked the court to bar closely held Triten’s unauthorized use of the software and its source code and for awards of money damages, including profits attributable to Triten’s alleged infringement. The software company seeks enhanced damages, claiming the infringement is deliberate and also asked for awards of attorney fees and litigation costs.

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

Cassetica is represented by Michael R. La Porte and William W. Flachsbart of Chicago’s Flachsbart & Greenspoon LLC.

The case is Cassetica Software Inc., v. Triten Corp., 1:11- cv-03444, U.S. District Court, northern District of Illinois (Chicago).

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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