Motorola Mobility Holdings Inc., the mobile-phone maker that agreed to be bought this week for $12.5 billion by Google Inc. (GOOG), cannot solicit other offers, according to terms of the merger agreement published yesterday.
All employees and directors of the company as well as outside advisers and legal counsel had to stop any solicitation of other proposals as of Aug. 15, the document states. Still, Motorola’s board has a fiduciary duty to consider any unsolicited superior proposal it may receive, according to the agreement.
Google, the world’s largest maker of smartphone software, is buying Motorola Mobility to gain mobile patents and expanding in the hardware business. Both boards have approved the takeover, which provides Motorola Mobility shareholders a 63 percent premium over the stock’s closing price on the trading day preceding the offer.
Google has agreed to pay Motorola Mobility $2.5 billion if the deal falls through, the contract states. Motorola Mobility would pay $375 million if it decided not to sell to Google, according to the agreement.
Lipitor Generic Rights May Be Sold If FDA Approval Delayed
Ranbaxy Laboratories Ltd. (RBXY) may sell rights to make a generic version of Pfizer Inc. (PFE)’s Lipitor, the world’s best-selling medicine, should it fail to win timely U.S. approval for the cholesterol pill, Credit Suisse AG said.
A legal settlement with Pfizer gave Ranbaxy six months’ exclusivity to market generic Lipitor in the U.S. Delays in Food and Drug Administration approval may prevent the Indian company from selling its copies as planned from Nov. 30, Credit Suisse equity analysts Edward J. Kelly and Rajat Suri said Aug. 17.
Lipitor is the highest-selling drug of all time, generating $10.7 billion last year. An FDA investigation into quality standards at two Ranbaxy manufacturing plants and a federal investigation into its testing practices have delayed approval of the drug copy. Federal prosecutors are negotiating a dispute settlement that may cost Ranbaxy more than $1 billion, Fortune Magazine reported in May.
“We believe the most likely outcome will involve Ranbaxy paying a hefty fine to the FDA, which would subsequently clear the path for Lipitor approval,” Kelly and Suri said in a report. “The company and most industry experts remain confident a resolution will be reached in time for Ranbaxy to launch on Nov. 30.”
Ranbaxy said it can’t comment “at this stage” in an e- mailed response to questions.
Ranbaxy, based in Gurgaon near New Delhi, is in discussions with the FDA to get approval by November and the “negotiations are progressing well,” Managing Director Arun Sawhney said in an Aug. 5 conference call.
“Delays in the resolution of the matter will weigh on sentiment as the date for a generic Lipitor launch approaches,” Vihari Purushothaman and Dhruva Sabharwal of Tata Securities Ltd. in Mumbai, wrote in an Aug. 5 report.
Ranbaxy’s stock has dropped 21 percent this year, compared with a 20 percent decline in the benchmark Sensitive Index.
Generic Lipitor would be a key growth driver for Ranbaxy, Deepak Malik and Ashish Thavkar of Emkay Global Financial Services Ltd. in Mumbai wrote in an Aug. 6 report. The copy may contribute $400 million to $500 million in revenue, they wrote.
“However, this gain will largely be off-set by the penalty imposed on Ranbaxy by the U.S. FDA,” Malik and Thavkar said.
If the Nov. 30 deadline isn’t met, Ranbaxy may postpone the release of its copycat Lipitor, the Credit Suisse report said. This would also delay the timeline for other generic manufacturers wanting to sell their own copies, as Ranbaxy’s 180-day exclusivity period does not start until it begins commercial marketing, it said.
This would benefit Parsippany, New Jersey-based Watson Pharmaceuticals Inc. (WPI), which negotiated with Pfizer to begin selling a so-called authorized generic by Nov. 30.
Alternatively, Ranbaxy may waive exclusivity in exchange for payment from a rival generic-drug maker, Credit Suisse said.
“If Ranbaxy anticipates a lengthy delay, it may allow other generic manufacturers to accelerate their launches for a one-time payment or a revenue sharing agreement,” Kelly and Suri said.
Ranbaxy, 64 percent owned by Tokyo-based Daiichi Sankyo Co., received a one-time payment from Boehringer Ingelheim GmbH last year for relinquishing its 180-day exclusivity on the Flomax prostate treatment under similar circumstances, the analysts wrote.
“Daiichi Sankyo is not in a position to speculate or comment whether Ranbaxy will get approval for its Lipitor generic,” Masaya Tamae, a spokesman at the Tokyo-based Daiichi Sankyo said yesterday by telephone.
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Icahn Settles Tropicana Las Vegas Trademark Suit Over Name
Carl Icahn and the Tropicana Las Vegas hotel and casino settled a trademark lawsuit over the right to the name Tropicana, with each allowed to use it depending on the location.
The accord between the owner of the hotel and several Icahn companies needs approval by the U.S. Bankruptcy Court in Delaware, according to an Aug. 15 filing in that court. The action arose out of the hotel’s Chapter 11 case.
Icahn, the billionaire investor whose companies include Tropicana Entertainment Inc., operates the Tropicana Casino & Resort in Atlantic City, New Jersey. Under the terms of the settlement, Tropicana Las Vegas will have rights to the name in Las Vegas within 50 miles of the casino. Icahn will have rights in New Jersey and other areas.
Tropicana Entertainment LLC, the Las Vegas hotel operator, filed for Chapter 11 creditor protection in May 2008. Two plans of reorganization were filed and approved by the bankruptcy court. Each group filing a plan claimed trademark rights.
Ramada of Nevada is listed along with Tropicana Las Vegas as a defendant in the suit.
The lawsuit is Icahn Agency Services LLC v. Tropicana Las Vegas Inc., 10-ap-52489, and the bankruptcy case is In re: Tropicana Entertainment LLC, 08-10856, U.S. Bankruptcy Court, District of Delaware (Wilmington).
Tavern on the Green Rights Get $1.3 Million Opening Bid
A potential buyer agreed to start the bidding for limited rights to the name Tavern on the Green at $1.3 million in an auction in Manhattan bankruptcy court.
Tavern International LLC will be the opening bidder, known as the stalking horse, at the auction, Streambank LLC, the firm hired to find a buyer, said yesterday in a statement
Tavern on the Green LP filed for bankruptcy protection in September 2009 after losing its lease to operate the namesake restaurant in New York’s Central Park.
The company lost a fight with New York City for rights to the trademark. U.S. Bankruptcy Judge Allan Gropper in April approved a settlement between the city and the Chapter 7 trustee for the company, Jil Mazer-Marino.
The terms of that accord allowed the trustee to sell the name for restaurants outside New York, New Jersey, Connecticut and part of Pennsylvania and for food products. Proceeds are to go to creditors.
A hearing to approve bidding procedures will be Aug. 31, according to a court filing. If the rights are sold to another company, the stalking-horse bidder is to receive a breakup fee of $65,000, the filing states.
The Chapter 7 case is Tavern on the Green LP, 09-15450, U.S. Bankruptcy Court, Southern District of New York (Manhattan).
Kellogg Told Its Toucan Trademark Isn’t Infringed by Non-Profit
Kellogg Co. (K), maker of Cocoa Puffs, Froot Loops and Rice Krispies cereals, has told a non-governmental group involved with the protection of the Guatemalan biosphere to quit using a toucan as a logo.
The Battle Creek, Michigan-based cereal company uses an image of the Toucan Sam character with his multicolor beak on its boxes of rainbow-hued Froot Loops. The Maya Archeology Initiative’s toucan is shown in front of a Mayan pyramid on t- shirts, refrigerator magnets, coffee mugs and baseball hats it gives as a premium to its donors.
The San Ramon, California-based non-profit said in a statement that it doesn’t infringe the Kellogg trademark. Sarah D. Mott, legal counsel for the non-profit, said the two trademarks don’t look alike and the two entities don’t compete.
“MAI’s trademark is made up of iconic images,” she said. “Its toucan is based upon a realistic toucan endemic to Mesoamerica. Kellogg provides sugary cereal and entertainment through Toucan Sam, his cousins and a make-believe world that pretends to reflect something real.”
She also said that there is no Mayan imagery associated with Kellogg’s toucan.
MAI is focused on foster education for Maya children, protecting antiquities and defending biodiversity in the Guatemalan rainforest.
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John Wiley Victorious in Appeal Involving First Sale Doctrine
John Wiley & Sons Inc. (JW/A), a publisher of scientific and technical books, convinced an appeals court that books produced abroad aren’t covered by a section of copyright law permitting sale of non-infringing items.
The case arose from the actions of a student from Thailand who had family members buy foreign editions of John Wiley’s books and send them to him for resale in the U.S. Supap Kirtsaeng had argued that because the books were produced lawfully in foreign countries he couldn’t be accused of copyright infringement.
According to court papers, the overseas edition of the Wiley books had thinner paper; different bindings, covers and jacket designs; fewer internal ink colors, and lower quality photographs and graphics. Such books are also marked with a legend designating the countries in which they may be sold.
Kirtsaeng was subsidizing the cost of his education by selling the books he imported on EBay Inc. (EBAY)’s auction website and other commercial sites. He consulted Google Inc.’s Google Answer’s website for advice about whether his actions were legal, according to the opinion.
Wiley sued Kirtsaeng for copyright infringement in federal court in Manhattan in September 2008. At trial he argued that copyright law’s “first sale doctrine” was a defense against the infringement allegations. The trial court rejected that defense, and the jury found he had infringed the Wiley copyrights and ordered him to pay damages of $75,000 for each of the eight works at issue.
In his appeal Kirtsaeng said the trial court mistakenly barred the first-sale defense.
In its Aug. 18 opinion, the appeals court said that the trial court correctly barred Kirtsaeng’s defense. The section of copyright law he tried to invoke referred to works “lawfully made” in terms of U.S. copyright law. This section, the appeals court said, “refers specifically and exclusively to works that are made in territories in which the Copyright Act is law, and not to foreign-manufactured works.”
The case is John Wiley & Sons Inc., v. Supap Kirtsaeng, 09- 4896-CV, U.S. Second Circuit Court of Appeals. The lower court case is John Wiley & Sons Inc., v. Supap Kirtsaeng, 1:08-cv- 07834-DVP, U.S. District Court, Southern District of New York (Manhattan).
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IIPI Names Mexico’s Jorge Amigo Castenada Vice Chairman
Amigo, who will serve as the group’s vice chairman, previously headed the Mexican Institute of Intellectual Property, an organization he founded in 1994. He was appointed to that post by then-President Ernesto Zedillo, with the mission of expanding that nation’s patent and trademark authority.
He headed the Mexican delegation for the investment chapter of the North American Free Trade Agreement. He was Mexico’s chief coordinator for the 2010 Anticounterfeiting Trade Agreement.
A non-lawyer, Amigo has worked in banking and private industries as well as holding a variety of posts within Mexico’s Ministry of Commerce.
He has an undergraduate degree in economics from Anajuac University and a master’s degree in economics from the University of the Americas.
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