Abbott, Samsung, LOCOG, Dolby, Napster: Intellectual Property

Abbott Laboratories (ABT) won a U.S. appeals court ruling that will make it harder for companies to block inventors from enforcing their intellectual property rights because of misconduct in obtaining the patent.

The ruling tightens standards for “finding both intent and materiality” in determining inequitable conduct before the U.S. Patent and Trademark Office, Chief Judge Randall Rader wrote in an opinion posted yesterday on the website of the U.S. Court of Appeals for the Federal Circuit in Washington. Except in egregious cases, patents would be unenforceable only if information withheld would have affected whether the invention was approved.

Generic-drug companies had been challenging patents on medicines in a way that “plagued not only the courts but also the entire patent system,” the Federal Circuit said. The case was an appeal involving an Abbott dispute with Becton, Dickinson & Co. and Bayer AG (BAYN)’s health-care unit over a glucose-monitor design. An Abbott patent was deemed unenforceable as punishment for the company giving contradictory information to the U.S. and European patent offices on the same invention.

Courts under the old standard had to decide how important withheld information was, and how much evidence there was of intent to deceive, with each factor weighed against the other. If the information was key to obtaining the patent, then intent mattered less. If there was clear evidence of deception, the material nature of the information is less important.

The old standard had “numerous and unforeseen and unintended consequences” that discouraged settlements and put more attention on the morality of the inventor than the merits of the patent, Rader wrote for the six-member majority of the 11 judges who ruled on the case.

Abbott, based in Abbott Park, Illinois, had argued that companies were being penalized for mistakes that wouldn’t have affected whether the patent was issued. It said inequitable conduct should be found only if there had been fraud that was committed to obtain the patent.

It had partial support of the patent office, which claimed to be overwhelmed with inventors presenting too much data for fear they would later be found to have withheld information. Still, the agency said patentees could engage in gamesmanship if it was too difficult to prove inequitable conduct.

Pharmaceutical Research and Manufacturers of America, which represents drugmakers including Pfizer Inc. (PFE) and Merck & Co., urged the court to clarify the standard, saying use of the inequitable conduct argument was “spiraling out of control.”

The decision will have little effect on the underlying case, which Abbott lost. Becton Dickinson -- which has since sold its glucose monitoring business -- and Bayer HealthCare won rulings that the aspects of the patent that were in the case were invalid and that issue wasn’t reconsidered.

The case is Therasense Inc. v. Becton, Dickinson & Co., 2008-1511, -1512, -1513, -1514, -1595, U.S. Court of Appeals for the Federal Circuit (Washington). The lower court case is Therasense Inc. v. Becton Dickinson & Co., 04-2123, U.S. District Court, Northern District of California (San Francisco).

Vermillion to Get U.S. Patent for Alzheimer’s Diagnostic Test

Vermillion Inc. (VRML), a biotech company that focuses on diagnostic tests, received notice that a patent will be issued shortly covering a test for Alzheimer’s disease.

The test looks at two biomarkers that are indicators of the disease, according to a company statement. Vermillion received an earlier patent for Alzheimer’s biomarkers, the company said in a June 2010 statement.

According to the database of the U.S. Patent and Trademark Office, Vermillion also has patents for a biomarker test for ovarian cancer, a test for peripheral artery disease, and tests for kidney disease.

Previously the company was based in Fremont, California. Now its offices are in Austin, Texas.

For more patent news, click here.

Trademark

Samsung Told to Hand Over Phone Sample to Apple’s Lawyers

Samsung Electronics Co., which was sued for trademark infringement over its newest mobile phones, was ordered to produce its newest product samples for a range of products.

In a May 18 order, U.S. District Judge Lucy H. Koh ordered the Korean company to give samples of five mobile phones, their packaging and the package inserts to outside counsel for Apple Inc. (AAPL), the plaintiff in the case.

She said that while she understood that “the production of pre-release samples to a competitor can be prejudicial,” she thought the “stringent” protective order would not be prejudicial to Samsung’s interests. She said the phones, packages and inserts were to be designated for “outside counsel’s eyes only” and not provided to Apple or its in-house counsel.

Apple sued Samsung in federal court in Oakland, California, April 15, claiming the Samsung products “slavishly copied” Cupertino-based Apple’s iPhone, iPad and iPod touch products.

The case is Apple Inc. v. Samsung Electronics Co., 5:11-cv- 01846-LHK, U.S. District Court, Northern District of California (Oakland).

LOCOG’s Trademark Covers Range of Non-Sports Goods, Services

The London Organizing Committee of the Olympic and Paralympic Games is reaching far to protect IP rights associated with the 2012 sporting event, if the committee’s U.K. trademark is any indication.

According to a filing with the U.K.’s Intellectual Property Office, the committee has registered its “LOCOG” trademark for a wide range of goods that include some categories not ordinarily associated with athletics.

Among the classes of goods and services for which the mark is registered are chemical substances for preserving foodstuffs, greases, dental wax, artificial limbs, asbestos, whips, articles made from whalebone, yarns and threads, steel wool, tobacco, vinegar, the leasing of access time to a computer database, and pins and needles.

The committee filed its application in July 2005, and the mark was registered in May 2006. If the committee is as zealous about protecting its mark as was the organizing committee for the Vancouver Olympics and the sponsors of the games’ television broadcasts, trademark specialists will find plenty of work.

Political satirist Stephen Colbert was so concerned about the possibility of infringement litigation that he consulted with his brother, a partner in a New York IP specialty firm, about what he could and couldn’t say in about the Vancouver Olympics.

He learned that because Colbert Report, which appears on Viacom Inc.’s Comedy Channel, wasn’t an official sponsor of the competition, he couldn’t say “Olympics,” “winter games,” or show the interlocked rings that are a symbol of the athletic competition.

Video Store Owner, Employee Accused of Importing Fake CDs

The manager and an employee of a Monterey Park, California, video store were arrested for selling what U.S. Immigration and Customs Enforcement said are DVDs from China with fake Dolby Digital trademarks, according to the San Gabriel Valley Tribune.

ICE said the retail value of the seized DVDs exceeded $1 million, the newspaper reported

Claude Arnold, special agent in charge for ICE Homeland Security Investigations in Los Angeles, said the retailer was supplying clients in California and Nevada, according to the newspaper.

The store owner and employee each face prison sentences of up to 10 years if they are convicted of criminal trafficking in counterfeit goods, the San Gabriel Valley Tribune reported.

For more trademark news, click here.

Copyright

Napster Co-Founder Sees Web Boom for Undervalued Music Labels

Sean Parker, co-founder of music-download pioneer Napster Inc., said “dramatically undervalued” record companies are well-positioned to make money as online jukebox services such as Spotify proliferate.

Spotify, which offers paid-for subscriptions and free services supported by advertising, shows how the music industry can generate income from libraries of songs, said Parker, whose Napster was sued for copyright infringement by record companies and shut down in 2001. Earlier this year he considered investing $100 million in Warner Music Group, Parker said, speaking at the eG8 technology forum in Paris.

Record labels such as Warner, Universal Music Group and EMI Group Ltd. are increasingly turning to online music operators such as Spotify and Pandora to offset falling revenue from fewer sales of CDs and rampant online piracy. Apple Inc., Google Inc. (GOOG) and Amazon.com Inc. are also pursuing models that allow consumers to stream music online instead of downloading it to a hard drive.

“There’s a pretty dramatic change happening in the way music is monetized, and the back catalogs of the record companies are going to become extremely valuable,” Parker said. “The record business is dramatically, dramatically undervalued.”

Consolidation among the biggest record companies may be under way after Warner was sold to its former director, Len Blavatnik, for about $1.3 billion this month. Blavatnik’s Access Industries Holdings will pay $8.25 a share. The sale of Warner also includes bond debt, valuing the entire transaction at about $3.3 billion.

EMI, the record label of the Beatles and Pink Floyd, may come up for sale in the coming weeks after creditor Citigroup Inc. (C) seized the company in January from Guy Hands’s Terra Firma Capital Partners Ltd.

Spotify, which is presently only available in Europe, has been in talks with the major record labels to offer service in the U.S.

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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