Apple, Google, Investment Banks: Intellectual Property

Apple Inc. and Motorola Mobility, the mobile phone-making unit of Google Inc. (GOOG), lost bids for court orders barring each other from infringing their patents.

U.S. Circuit Judge Richard A. Posner in Chicago denied the requests for relief in a 38-page court order issued on June 22, ending a lawsuit started in 2010. A copy of the ruling couldn’t immediately be obtained from the court and was provided to Bloomberg News by a Motorola Mobility spokeswoman.

“Neither party is entitled to an injunction,” Posner wrote. “Neither has shown that damages would not be an adequate remedy.”

Earlier this month, the judge rejected each company’s money-damages theories and canceled a jury trial set for June 11. “That was a simple failure of proof,” not that damages are incalculable, Posner said.

That trial would have been the first between Apple -- whose iPhones are the world’s most popular line of mobile phone and Google, whose Android operating system is the world’s most-used mobile phone platform -- since Google completed its $12.5 billion acquisition of Motorola Mobility last month.

Kristin Huguet, a spokeswoman for Cupertino, California- based Apple, confirmed Posner’s ruling in a telephone interview on June 24. She declined to comment on the court’s decision.

“We are pleased that Judge Posner formally dismissed the case against Motorola Mobility,” Jennifer Erickson, a spokeswoman for the Google unit, said in an e-mailed statement. “As it relates to Apple’s violation of our patents, we will continue our efforts to defend our own innovation.”

Separately, the U.S. International Trade Commission said yesterday it will review whether Apple, which gets about 75 percent of its revenue from the iPhone, iPad and related products, infringed four patents held by Google’s Motorola Mobility unit. A trade judge in April said Apple infringed one of the patents.

The commission also asked lawyers in the case, and the public, for comments on how to proceed when infringed patents cover aspects of technology that are adopted by an entire industry so electronic devices work across platforms.

“There’s some sort of movement to reduce ‘competition through litigation,’” said Will Stofega, a program manager at researcher IDC in Framingham, Massachusetts. “They really want to bring this whole issue to a head. Patent litigation is part of the ordinary due course of business, but this has gone beyond that.”

The U.S. Federal Trade Commission, a half-dozen members of Congress and companies including Intel Corp. and Cisco Systems Inc. have in recent weeks questioned whether companies that helped develop standards should be able to get orders from the ITC to block competitors’ use of the technology.

The ITC will review aspects of all four Motorola Mobility patents in the case against Apple. Of the 13 questions it posed to lawyers yesterday, eight are related to handling standard- essential patents. Should it side with Motorola Mobility, the agency has the power to order U.S. Customs and Border Protection to stop iPhones and iPad computers made in Asia from entering the U.S.

The federal court case is Apple Inc. (AAPL) v. Motorola Mobility Inc., 11-cv-8540, U.S. District Court for the Northern District of Illinois (Chicago). The ITC case against Apple is In the Matter of Wireless Communication Devices, Portable Music and Data Processing Devices, Computers and Components Thereof, 337-745, and Apple’s case against Motorola Mobility is In the Matter of Mobile Devices and Related Software, 337-750, both U.S. International Trade.

For more on the ITC cases, click here.

Patents

Supreme Court Seeks U.S. Views in Drug Testing Patent Royalties

The U.S. Supreme Court asked the Justice Department to outline the government’s view on whether drugmakers can be forced to pay patent royalties for tests they conduct on the safety or proper dosage of approved medicines.

GlaxoSmithKline Plc (GSK) has filed an appeal at the Supreme Court arguing that a royalty exemption given to drugmakers while they’re seeking regulatory approval for new treatments should also apply to post-approval testing. The London-based company is fighting a lawsuit by Classen Immunotherapies Inc., which says Glaxo is infringing its patents on methods for scheduling vaccinations to limit patients’ risk of developing other disorders.

The Supreme Court yesterday held off on deciding whether to hear Glaxo’s appeal until the federal government files a brief presenting its analysis of the case.

The dispute is over tests Glaxo conducted to evaluate whether there was any correlation between its vaccines and disorders including diabetes. Baltimore-based Classen, whose founder claims there is a link, obtained patents on evaluating risks and altering vaccination schedules.

The case is GlaxoSmithKline v. Classen Immunotherapies Inc., 11-1078.

Investment Banks Seek Business in Patent Deals as M&A Work Slows

Amid the dearth of global mergers and acquisitions, a handful of investment banks are finding business advising companies on patent sales.

Lazard Ltd. (LAZ), Evercore Partners Inc. (EVR) and Barclays Plc (BARC) are banking on a turf typically dominated by lawyers. While global mergers and acquisitions volume is down 27 percent so far this year, patent deals have jumped in the past 12 months to $18.8 billion from $450 million the year before, according to calculations based on data compiled by Bloomberg. The competition among Apple Inc., Google Inc., Microsoft Corp. (MSFT) and Facebook Inc. (FB) to dominate the wireless market largely accounts for the rise.

“Patents have historically been a small, private and illiquid asset. Now you have money piling in from all kinds of sources,” said Robert Heath, head of corporate development at RPX Corp. (RPXC), a San Francisco-based firm that buys and licenses patents.

For technology companies patents have become a valuable asset to wield against competitors and to defend themselves against intellectual-property infringement lawsuits. Activist investors including Carl Icahn and hedge fund Starboard Value LP have been riding the trend, urging companies such as Motorola Mobility Holdings Inc. and AOL Inc. to extract value from their patents as well.

Until recently, most Wall Street firms stayed on the sidelines in patent deals because they’ve been “too much of a niche asset,” said Craig Opperman, partner and intellectual- property asset specialist at law firm DLA Piper LLP. “Lazard, Evercore and Barclays are the banks that I come across the most” in patent deals, said Opperman, based in Palo Alto, California.

“Banks are contributing to make the patent market more liquid by attracting more potential buyers,” said David Berten, founder and partner of Global IP Law Group LLC, a Chicago-based law firm, which advised Nortel together with Lazard.

For more, click here.

Teva Shares Rise on Ruling that Sandoz, Mylan Infringed Patents

Teva Pharmaceutical Industries Ltd. (TEVA) rose 4.50 percent yesterday on the news that a federal court found that its patents for its multiple sclerosis drug Copaxone were valid.

Teva had sued Novartis AG (NOVN)’s Sandoz unit Mylan Inc. (MYL) and Cambridge, Massachusetts-based Momenta Pharmaceuticals Inc. (MNTA), saying their attempts to seek permission to sell Copaxone copies infringed its patents.

U.S. District Judge Barbara Jones in Manhattan on June 22 ruled that drug applications made by Sandoz and Mylan “infringe all of the asserted claims.”

Eric Altof, a spokesman for Novartis, said in an e-mail that the company declined to comment.

“Although Mylan is disappointed in the court’s decision, and while we have not yet had the opportunity to review the court’s opinion, we fully intend to evaluate our options for an appeal once the Court’s full opinion becomes available,” Mylan Chief Executive Officer Heather Bresch said in a statement, adding that Mylan’s earnings “are not reliant on the launch of a generic Copaxone.”

Although the order doesn’t name Momenta, Chief Executive Officer Craig Wheeler said in a statement the company will appeal the ruling.

“We are disappointed that the court determined that Teva’s patents were valid and infringed, and we look forward to reading the full opinion to understand its reasoning,” Wheeler said in the statement.

The case is Teva Pharmaceuticals USA Inc. v. Sandoz Inc., 08-cv-07611, U.S. District Court, Southern District of New York (Manhattan).

For more patent news, click here.

Law Firm Moves

Intellectual Property Group Joins Troutman Sanders in New York

Louis J. DelJuidice, of counsel Hiroyuki Yasuda and patent agent Nicole R. Sullivan have joined the New York office of Troutman Sanders LLP. The three previously worked at McDermott Will & Emery LLP.

DelJuidice focuses his practice on litigation, patent prosecution and client counseling in the electromechanical, cellular telephone, computer and medical device areas. Part of his practice involves managing portfolios for U.S. and Japanese clients, as well as auditing and performing due diligence on intellectual property assets in the furtherance of licensing. “Troutman Sanders provides a great platform to service my clients in Asia, particularly in Japan, and is committed to the region,” DelJuidice said.

Yasuda also focuses on patent litigation and prosecution, particularly in the areas of mechanical, electromechanical and medical device technologies. Sullivan focuses her work on U.S. and foreign patent prosecution in the biotechnology, pharmaceutical, bioengineering and molecular biology fields.

Troutman Sanders has more than 600 lawyers in 15 offices throughout the U.S. and China.

Deals

Microsoft Agrees to Acquire Yammer for $1.2 Billion in Cash

Microsoft Corp. agreed to buy corporate social-network operator Yammer Inc. for $1.2 billion in cash to help it woo businesses with Facebook-like tools that help employees collaborate in the workplace.

San Francisco-based Yammer will become part of Microsoft’s Office division and the team will continue to report to current Yammer Chief Executive Officer David Sacks, the companies said yesterday in a statement.

Yammer provides features -- similar to those found on Facebook Inc. -- to more than 200,000 companies such as Ford Motor Co. and EBay Inc. (EBAY) The purchase will help Microsoft compete with corporate-social features like Salesforce.com Inc. (CRM)’s Chatter product, as well as startups such as Jive Software Inc. (JIVE) and Asana Inc., run by Facebook co-founder Dustin Moskovitz.

Microsoft, based in Redmond, Washington, could add Yammer’s corporate-social networking tools to its Office and SharePoint software products for businesses. Large information-technology companies are snapping up nimbler startups, sometimes before they reach an initial public offering, spending $17.4 billion on enterprise software acquisitions in 2011, compared with $715.5 million in 2009, data compiled by Bloomberg show.

The Yammer deal follows other recent enterprise software purchases centered around social media. Salesforce.com gained social-marketing tools through its $745 million purchase of Buddy Media Inc. earlier this month, and Oracle Corp. (ORCL) recently bought two companies that analyze data on social-media sites. Those are Vitrue Inc. and Collective Intellect Inc.

Quest Gets $27.50-a-Share Bid, Topping Insight Buyout Offer

Quest Software Inc. (QSFT), the software maker that agreed to be bought by a group led by Insight Venture Partners, said it has received a higher offer of $27.50 a share in cash, the third buyout increase announced this year.

The bid from an unidentified strategic suitor is superior to a $25.75-a-share offer Quest accepted from Insight last week, the Aliso Viejo, California-based software company said yesterday in a statement. Dell Inc. (DELL) had previously offered to acquire Quest, according to a person familiar with the matter.

Quest said on March 9 it agreed to be acquired by Insight for $23 a share, and two months later said it received several other proposals that it anticipated would lead to a superior offer. Chief Executive Officer Vincent Smith prefers a sale to Insight over Dell because it would allow him to keep running the company, said the person, who asked not to be named because the negotiations are private.

Tracy Benelli, a Quest spokeswoman, and Jess Blackburn, a Dell spokesman didn’t immediately return calls for comment. Blair Flicker, general counsel at Insight Venture Partners, declined to comment.

Quest’s software helps businesses administer databases and servers, as well as back up information and recover lost data. Insight, a New York-based private equity firm, specializes in software and Internet businesses.

For more, click here.

To contact the reporter on this story: Ellen Rosen in New York at erosen14@bloomberg.net.

To contact the editor responsible for this story: Michael Hytha at mhytha@bloomberg.net.

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