AOL Inc. (AOL)’s patent portfolio would be valued at about $290 million in a sale, less than a third of the amount that shareholder Starboard Value LP has estimated it could generate, according to patent-advisory firm M-Cam Inc.
“That is the absolute ceiling price,” David Pratt, president of Charlottesville, Virginia-based M-Cam, said yesterday. “It’s worth much less than what investors have estimated, based largely on the fact that most of AOL’s patents are not commercially viable, or junk grade.”
AOL, based in New York, has hired Evercore Partners Inc. (EVR) to explore strategic options and find a buyer for its more than 800 patents. While Starboard has said the portfolio may yield more than $1 billion in licensing income, some of AOL’s patents are variations on existing technologies that companies, including Google Inc., could license from others, Pratt said.
The ceiling price of $290 million for the patents reflects a “Google-like transaction,” Pratt said, referring to the search company’s proposed $12.5 billion purchase of Motorola Mobility Holdings Inc., from which it could draw on more than 17,000 patents.
A lower valuation on AOL’s patents could hurt the company’s chances to generate enough dollars to spur a sale of the whole company, Pratt said.
Caroline Campbell, a spokeswoman for AOL, declined to comment on the patents’ value.
A strategic buyer could bid a much higher price for the patents than M-Cam’s estimate, said Erin-Michael Gill, chief intellectual property officer for MDB Capital Group LLC.
“There’s a difference between a pure financial value for patents and a strategic value,” Gill said by telephone yesterday. “A strategic buyer could bid higher because they realize the long-term value of licensing those patents.”
Many of AOL’s patents cover Internet advertising and communications services, and the portfolio could fetch as much as $1 billion from a large technology company, Christopher Marlett, co-founder of Santa Monica, California-based MDB, said last week.
AstraZeneca Wins Ruling on Extended-Release Seroquel Patent
AstraZeneca Plc (AZN) won a U.S. court ruling that will help ward off generic competition to the extended-release version of its Seroquel antipsychotic drug until a patent expires in 2017.
U.S. District Judge Joel Pisano in Trenton, New Jersey, ruled yesterday that four generic-drug makers, including Mylan Inc., were infringing a patent on the medicine. The judge rejected their arguments that the patent was invalid.
AstraZeneca, based in London, is relying on sales of Seroquel XR after low-cost versions of the immediate-release version of the medicine entered the market this week. Seroquel generated $5.83 billion in sales last year, with $1.4 billion coming from Seroquel XR, the company said in a statement Feb. 2.
The other three generic-drug makers in the case are Anchen Pharmaceuticals Inc., Osmotica Pharmaceutical Corp. and Torrent Pharmaceuticals Ltd.
The case is AstraZeneca Pharmaceuticals LP v. Torrent Pharmaceuticals Ltd., 10cv4971, U.S. District Court for the District of New Jersey (Trenton).
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Nike Wins Restraining Order Against Reebok Over Tebow Jersey
Nike Inc., the world’s biggest sporting-goods company, won a judge’s order temporarily blocking Adidas AG (ADS)’s Reebok International (RBK) from using quarterback Tim Tebow’s name on New York Jets-related clothing.
U.S. District Judge Kevin Castel in Manhattan granted Nike’s request for a temporary restraining order March 28, a day after the Beaverton, Oregon-based company filed a lawsuit. Reebok’s licensing agreement with the National Football League ends March 31 and Nike is to become the official supplier of licensed NFL apparel.
Castel blocked Reebok from manufacturing, selling or otherwise marketing New York Jets-related apparel with the name Tebow on it. The order doesn’t apply to Denver Broncos-related apparel with Tebow’s name. Reebok must recall unauthorized Tebow products, the judge ruled.
In the lawsuit, Nike claimed it, not Reebok, has rights to use Tebow’s name. The judge scheduled a hearing for April 4 in Manhattan federal court.
Tebow, 24, helped lead the Broncos to the NFL playoffs after taking over as the team’s starting quarterback last year. He was traded to the Jets on March 21.
His Broncos jersey was the second-highest selling of all NFL players last season, Nike said in the complaint
Nike said it plans to introduce its new line of uniforms for all 32 NFL teams at an event in New York April 3.
Lauren Lamkin, an Adidas spokeswoman, didn’t immediately return a call seeking comment on the ruling. Mary Remuzzi, a Nike spokeswoman, declined to comment.
The case is Nike Inc. (NKE) v. Reebok International Ltd., 12- cv-2275, U.S. District Court, Southern District of New York (Manhattan).
Beatles Can Block Wheelchair Maker’s Trademark, EU Court Rules
The Beatles’ Apple Corps Ltd. can block a Dutch wheelchair manufacturer from selling “Beatle” electric mobility aids, a European Union court ruled.
The EU’s general court rejected a lawsuit by You-Q BV that sought to register a trademark for its Beatle wheelchairs. The court said the Beatles name is “still synonymous with youth and a certain counter-culture of the 1960s” and its “very positive image of freedom, youth and mobility” would probably attract people who need mobility aids, according to a statement from the Luxembourg-based tribunal.
The EU’s trademark office “did not err” in refusing You- Q’s application for a trademark because it was likely that the company “would take unfair advantage of the repute and the consistent selling power of Apple Corps’ trademarks,” the court said.
Apple Corps, owned by Paul McCartney, Ringo Starr, John Lennon’s widow Yoko Ono and the estate of George Harrison, have defended their trademarks with decades of litigation, including a dispute against Apple Inc. that ended in 2010, clearing the way for distribution of Beatles’ songs such as “Ticket to Ride” and “Drive My Car” through the Cupertino, California- based company’s iTunes music store.
You-Q, based in Helmond, the Netherlands, isn’t trying to profit from the Beatles trademark and is considering an appeal to the EU’s highest court, said Gino van Roeyen, a lawyer at Banning NV, who represented the company.
“You-Q is convinced that the public doesn’t link its Beatle product to The Beatles,” van Roeyen said. “The decision rests for great part on fiction.”
Apple Corps’s London office didn’t immediately respond to two voice-mail messages seeking comment on the ruling.
The case is T-369/10 You-Q BV v. OHIM
Australia Cigarette Law Sterilizes Property Rights, BAT Says
British American Tobacco Plc (BATS) said an Australian law prohibiting the display of tobacco companies’ logos, labels and trademarks “sterilizes” their intellectual property rights and must be declared unconstitutional. Philip Morris International Inc. (PM), BAT and Imperial Tobacco Group Plc (IMT) are challenging the validity of the Australian law and will present their arguments against it in Canberra beginning April 17. Australia is the first country in the world to ban logos on cigarette packaging.
The Australian Constitution, like its U.S. counterpart, was drafted recognizing the right of the state to acquire private property for public purposes only if “full indemnification” is provided to the former owner, Imperial Tobacco’s Australian unit said in its submission to the court.
The tobacco companies have said they will seek billions of dollars of damages from the Australian government should they lose the right to their trademarks.
The companies’ “aggressive litigation against Australia for implementing plain packaging is just another example of how big tobacco continues to try to intimidate countries,” John Stewart, a senior organizer with the lobby group Corporate Accountability International, said in an e-mail.
BAT makes Dunhill, Pall Mall and Australia’s best-selling cigarette brand, Winfield. Philip Morris is the maker of Marlboro cigarettes.
At the hearing scheduled for April, the companies will ask the High Court to declare that the plain-packaging legislation results in acquisition of property without proper compensation and that the law is unconstitutional.
The Australian government announced the plan to ban branding on cigarette packs in April last year, along with a 25 percent increase in tobacco taxes and an A$85 million ($88 million) advertising campaign to combat smoking.
Cigarettes will have to be sold in dark brown packages, with no company logos and the same font for all brands, according to a government statement.
The law passed through the Australian Senate on Nov. 10.
The government is to give its written submissions to the High Court by April 5.
Philip Morris is also pursuing the case in international arbitration. The Australian proposal violates a treaty with Hong Kong and may cause billions of dollars in damages, the maker of Marlboro cigarettes said.
The case is British American Tobacco Australia Ltd. v. the Commonwealth of Australia. S389/2011. High Court of Australia (Canberra).
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Australia Court Keeps 1 Percent Broadcast Royalty Cap in Place
Australia’s High Court ruled that a cap on royalties for radio broadcast of sound recordings is constitutional, Australia’s Music Industry News Network website reported.
The 1968 Copyright Act set 1 percent of the gross earnings of the broadcaster as a cap for broadcast recordings, according to Music Industry News.
Although Australia’s government had announced plans to lift the cap, the change wasn’t included in a final draft of amendments to the Copyright Act, Music Industry News Reported.
PPCA, Australia’s copyright-collecting society, argued unsuccessfully that the cap was the equivalent of an acquisition of the property of content owners on unjust terms, according to Music Industry News.
Canadian Receives 18-Month Sentence, Fine in Copyright Case
A 30-year-old resident of Winnipeg, Manitoba, who pleaded guilty to two Canadian federal copyright-infringement charges was given an 18-month sentence and a fine of C$20,000 ($20,060), the Toronto Sun reported.
Jonathan Donais received what officials say is one of the harshest sentences ever imposed in Canada for criminal copyright infringement, according to the newspaper.
When the police raided his home, they found 11,000 CDs and DVDs and a burner that could duplicate 56 discs an hour, according to the Sun.
Police tracked receipts from EBay Inc. (EBAY)’s PayPal payment service to learn that Donais had received more than $76,000 from buyers of his bootlegged discs of movies, TV shows, music and software, the newspaper reported.
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McDermott Hires Fabio Marino, Three Associates for IP Group
McDermott Will & Emery LLP (1121L) hired Fabio Marino for its intellectual-property practice, the Chicago-based firm said in a statement yesterday.
Marino, a litigator, joins from San Francisco’s Orrick, Herrington & Sutcliffe LLP (1141L). He also previously practiced at Boston’s Bingham McCutchen LLP (1186L) and the now-defunct Silicon Valley firm Skjerven Morrill MacPherson LLP.
He has represented clients whose technologies included computer networks, telecommunications, software engineering, e- commerce, entertainment, computer architecture, digital circuit design, parallel computing, 3D graphics and animation, medical imaging and artificial intelligence.
Marino has an undergraduate degree in computer science from the University of Pennsylvania, a master’s degree in computer science from the University of California at Los Angeles, and a law degree from the University of California’s Hastings College of the Law.
Joining with Marino are Judith S.H. Hom, Nitin Gambhir and Barrington E Dyer.
Hom, who has litigated biotechnology and pharmaceutical- related cases, has an undergraduate degree in biology and a doctorate in pharmacology from Cornell University. She received her law degree from the University of San Francisco.
Gambhir, a patent, trademark, trade secret and copyright litigator, has an undergraduate and a master’s degree in computer science from the University of California at Los Angeles, and a law degree from Santa Clara University.
Dyer, who does patent litigation and counseling, worked as a programmer before he became a lawyer. He has an undergraduate degree in electrical engineering from the University of California at Los Angeles and a law degree from Boston University.
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