Apple, Green Mountain, Tootsie Roll: Intellectual Property
Apple Inc. (AAPL) said it may face as much as 2 billion euros ($2.7 billion) in lost sales if a German court rules in favor of Motorola Mobility Holdings Inc. in a patent-infringement case over mobile devices.
Apple lawyers argued at a hearing in Mannheim that if Motorola Mobility won the case and received an order that forced Apple to halt sales of some products, Motorola Mobility should post the amount in a bond to cover any damages caused while the case is on appeal. Apple denies infringing the Motorola Mobility patent, which relates to e-mail account synchronization.
“I am not yet entirely sure that amount adequately mirrors the commercial value of this dispute,” said Andreas Voss, the presiding judge at the hearing. “The technology isn’t a standard and there are alternative ways to provide the same services.”
The suit is one of several filed by Motorola Mobility, the mobile-phone maker being acquired by Google Inc. (GOOG), against Apple in Germany and the companies are also entangled in patent disputes in the U.S. Google is buying Motorola Mobility to gain mobile patents and expand in the hardware business. Google’s Android is also the operating system for phones made by companies such as HTC Corp. (2498) and Samsung Electronics Co.
German courts often require the winning side to post collateral if it wants to enforce a ruling while the loser appeals. The amount reflects the losses the party may suffer when forced to comply with the ruling. If it wins the appeal, it can seek damages and can make use of the collateral.
The court will issue a ruling on Feb. 3.
The case is LG Mannheim, 7 O 229/11.
UnitedHealth Chooses Pfizer’s Lipitor Over Generic Versions
UnitedHealth Group Inc. (UNH) will charge a smaller co-payment for Pfizer Inc. (PFE)’s cholesterol pill Lipitor than it does for generic copies for the next six months, taking advantage of a price reduction from the drugmaker.
UnitedHealth, the largest U.S. health insurer by sales, will pass on to customers savings it will receive when Pfizer reduces the price of the drug after Lipitor loses patent protection, Tyler Mason, a spokesman for Minnetonka, Minnesota- based UnitedHealth, said in an e-mail.
The move adds to agreements Pfizer has been making with insurers and pharmacy benefit management companies to keep as much of the market for the cholesterol drug as it can once the drug’s U.S. patent ends at the end of this month. Lipitor, Pfizer’s top-selling drug, generated $10.7 billion in 2010.
“UnitedHealthcare works diligently to keep down pharmacy costs for members and customers by providing the lowest net price, which is why we have placed Lipitor in the cheapest tier,” Mason said in an e-mail.
UnitedHealthcare has 9.5 million individuals, according to the company. After Nov. 30, the insurer’s customer will pay about $30 to $35 for brand-name Lipitor, compared with $50 to $60 for the generic, Mason said.
After six months, the co-pay on the copycats will drop to about $15 as more generic competitors begin selling the pills, said Lynne High, a UnitedHealth spokeswoman. The co-pay for Lipitor at that point will depend on Pfizer’s pricing, she said.
Generic versions made by Watson, based in Parsippany, New Jersey, and India’s Ranbaxy, will compete exclusively with Pfizer for six months. After that, other generic-drug makers are allowed to enter the market.
Pfizer, based in New York, has already reached a Lipitor agreement with Coventry Health Care Inc. (CVH) for 1.2 million of that insurer’s patients. Medco Health Solutions Inc. (MHS), which administers Coventry’s pharmacy benefits, will block sales of generic copies, according to documents describing the agreement.
UnitedHealth’s employer plans, where the insurer only administers benefits, have also been offered the lower co-pay and most have accepted, High said.
Pfizer declined to comment specifically on any agreements with insurers and pharmacy benefit managers, only to say that it’s been working to keep patients on the brand-name version.
“Our programs, which are designed to offer Lipitor at or below generic cost during the 180-day period, will not increase costs for the significant number of payers participating in our programs,” Mackay Jimeson, a Pfizer spokesman, said in an e- mail.
The UnitedHealth agreement was reported earlier in the Wall Street Journal.
Green Mountain’s Expiring K-Cup Patents Attract Coffee Rivals
Sept. 16, 2012, is D Day -- or at least K Day -- for Green Mountain Coffee Roasters Inc. (GMCR)
That’s when it will lose the main patents on K-Cups, the coffee pods that helped make Green Mountain the largest player in the $1 billion-plus U.S. single-serve coffee market.
Once the patents expire, competitors can make their own version of K-cups and threaten the prospects of a company already battling criticism from hedge fund manager David Einhorn that its market-share gains have peaked. Einhorn, president of Greenlight Capital Inc., declined to comment for this story and won’t say if his firm is shorting the stock.
Recently, the company has sought to boost sales and discourage competition by partnering with high-profile coffee brands such as Caribou Coffee Co. and Folgers to sell K-Cups. Earlier this year, the company signed deals with Seattle-based Starbucks Corp. (SBUX) and Dunkin’ Brands Group Inc. Grocery retailers began selling Starbucks K-Cups earlier this month. Green Mountain has a 71 percent share of the U.S. market in single- serve beverages, according to Mitchell Pinheiro, an analyst at Janney Montgomery Scott in Philadelphia.
Copying the technology won’t be difficult once the patents expire, Mark Rygiel, a patent attorney at Sterne, Kessler, Goldstein & Fox in Washington, said in an interview.
“The K-Cup is not a complex invention,” he said. Most potential rivals “would understand what’s going on.”
It’s hard to know how important the patents are to Green Mountain, Rygiel said. The company and Keurig own at least 37 patents that protect how the pods look and are made, he said.
“Two patents expiring might end up being very significant, but it doesn’t necessarily mean that,” he said.
Still, competitors already are emerging. Rogers Family Co., a closely held coffee roaster and distributor, sells one-cup coffee pods compatible with Keurig brewers for a suggested retail price of $6.99 for a 12-pack. Green Mountain’s 24-pack of namesake brand K-Cups sell for $16.49 on its website.
While Keurig sued Rogers on Nov. 2 for patent infringement in the U.S. District Court in Boston, the Lincoln, California- based company is still looking to buy more coffee-pod making equipment, Jon B. Rogers, the company’s president, said in a phone interview.
Taking on Green Mountain won’t be easy because the Keurig brand resonates with consumers, according to John Staszak, a New York-based analyst at Argus Research.
“Clearly the patents are expiring and everyone is going to be trying to construct a product to go into this space,” said Eric Anderson, a marketing professor at Northwestern University in Evanston, Illinois, who has taught Keurig case studies in classes since 1997. “Whether that can be successful or not is a different story.”
Limelight Urges Cap on Patent Infringement in Group Inventions
Limelight Networks Inc. (LLNW), an online content delivery provider, urged a U.S. appeals court to limit patent- infringement claims when separate entities perform the steps of an invention.
The U.S. Court of Appeals for the Federal Circuit is considering whether a company can be liable for infringing patents when various parties carry out parts of an innovation. A three-judge court panel cleared Limelight, whose argument is supported by Apple Inc., Google Inc. and Facebook Inc., on Dec. 20 of an infringement claim by Akamai Technologies Inc. (AKAM) The issue was heard Nov. 18 by 10 of the court’s active judges.
A decision in the Akamai case and in a similar dispute heard the same day involving drug distributor McKesson Corp. (MCK) may determine the scope of patent rights involving the performance of multiple steps in a process.
“It’s a pretty big deal,” said Wayne Porter, a patent lawyer with Banner & Witcoff in Washington who’s been following the case. “There are an awful lot of patents out there that would require multiple people to perform the steps, so it’s an important question. It’s very difficult to write a patent claim that’s directed to just one single step.”
E-commerce companies such as EBay Inc. (EBAY) and technology companies including Cisco Systems Inc. (CSCO) sought to curtail suits filed against them, while the trade groups for drug and biotechnology companies argued such a limit would weaken patent rights and hurt innovation.
Limelight and Cambridge, Massachusetts-based Akamai compete in the market for content-delivery networks that store and distribute movies or music to computers on behalf of services such as Hulu LLC or Netflix Inc. The three Akamai patents in the case are for the process of delivering content.
Akamai won a $45.5 million jury verdict, only to have it thrown out after a court ruled there was no infringement because Limelight didn’t perform all of the steps covered by the patent. Some were performed by the websites.
“This is a huge and unfair loophole in the law,” Akamai lawyer Donald Dunner of Finnegan Henderson in Washington told the court. “You have a content delivery network and a content provider. Each knows what the other is doing.”
Limelight lawyer Aaron Panner of Kellogg Huber in Washington said the law allows infringement to be found when two entities are acting as a joint enterprise to use the invention. That wasn’t the case in this issue, he said.
“It is undisputed that Limelight does not carry out one of the steps of the method” covered by the Akamai patents, he said. Customers of Tempe, Arizona-based Limelight “are under no legal obligation to perform that step.”
The case is Akamai Technologies v. Limelight Networks, 2009-1372, U.S. Court of Appeals for the Federal Circuit (Washington). The lower court case is Akamai Technologies v. Limelight Networks Inc., 06cv11109, U.S. District Court, District of Massachusetts (Boston).
The McKesson case is McKesson Technologies Inc. v. Epic Systems Corp., 2010-1291, U.S. Court of Appeals for the Federal Circuit. The lower court case is McKesson Information Solutions LLC v. Epic Systems Corp., 06cv2965, U.S. District Court for the Northern District of Georgia (Atlanta).
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Tootsie Roll Says Rollashoe’s ‘Footzyrolls” Mark Infringes
Tootsie Roll Industries Inc. (TR), maker of the chocolate-roll candy, sued a Florida shoe company for trademark infringement.
The Chicago-based candy company objects to Rollashoe LLC’s use of the term “Footzyrolls” for its rollable shoes. The term “so resembles the Tootsie Roll marks in sound, commercial impression and appearance” that the public is likely to assume falsely that an affiliation exists between the two companies, Tootsie Roll said in its complaint.
The candy company complains that Miami Beach-based Rollashoe’s use of “Footzyrolls” is “willful and malicious” and done with full knowledge of Tootsie Roll’s rights to its trademark, according to the complaint filed Nov. 16 in federal court in Chicago.
It asked the court to cancel the shoe company’s trademark registration for “Unroll into comfort www.footzyrolls.com” trademark and for an order barring the Florida company’s use of “Footzyroll.” Additionally, it seeks awards of money damages, attorney fees, and litigation costs, and, claiming the infringement has been deliberate,” asked for extra damages to punish the shoe company for its actions.
The suit is “frivolous” and Rollashoe intends “to use all our resources to fight these big business bullies, company spokesman Harris Theophanous said in an e-mail.
“Our product has nothing to do with candy,” he said. “Our name is not the same and there is no confusion between our products.”
Tootsie Roll is represented by John M. Riccione, Brianna M. Sansone and Amy R. Rapoport of Aronberg Goldgehn Davis & Garmisa of Chicago, and Allen S. Rugg and Christina M. Licursi of Botson’s Wolf Greenfield & Sacks PC.
The case is Tootsie Roll Industries LLC v. Rollashoe LLC, 1:11-cv-08182, U.S. District Court, Northern District of Illinois (Chicago).
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Internet Can’t Rewrite Rules on Copyright, Taxes, Sarkozy Says
Internet companies can’t be exempt from copyright and taxes, French President Nicolas Sarkozy said.
“I am not willing to accept that the Internet revolution, as extraordinary as it is, can endanger a fundamental concept such as copyright,” he said at a cultural conference in Avignon, France. “Who pays for the infrastructure that allows the Internet to function? It’s also the state. It’s not normal that some Internet companies based elsewhere that make money in France don’t pay a cent of taxes here.”
Sarkozy also said the French state hasn’t cut cultural spending because of the financial crisis.
For more copyright news, click here.
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