Google, Merck, Gruyere, Newzbin2: Intellectual Property

Google Inc. owes its creation partly to a patented software algorithm for ranking documents in a database, issued to company founder Larry Page and owned by Stanford University.

The world’s largest search-engine company contends that too many other software patents hurt innovation more often than they lead to viable businesses. Google, along with JPMorgan Chase & Co. and the Yelp Inc. business-review site, say they need to be able to quickly resolve cases in which a patent owner sues a large number of companies over widely used software features.

An appeals court specializing in U.S. patent law will consider the issue today, in arguments about when software programs represent legitimate innovations and when they simply computerize ideas that couldn’t otherwise be patented.

“The patent system has had a hard time figuring out what patents are valid when you are using a computer to make something easier,” said Lynn Pasahow, who represented Amazon.com Inc. in its 1999 lawsuit alleging Barnes & Noble Inc. violated a patent for one-click shopping. “There’s an idea out there that it’s like pornography, you know it when you see it, or when the Federal Circuit or Supreme Court rules on it.”

The case before the U.S. Court of Appeals for the Federal Circuit in Washington has divided technology companies that have filed legal arguments with the court.

Google, Facebook Inc. and Red Hat Inc. say patent standards are too lax. International Business Machines Corp. warns that stringent rules could stifle innovation. Computer software was the fastest-growing area of patents between 1980 and 2005, according to a report this month by the Brookings Institution, a Washington research group.

The patents before the Federal Circuit concern a computerized method for using an intermediary to make sure buyers and sellers meet their obligations in stock and currency trading. Patent owner Alice Corp., an Australian company jointly owned by National Australia Bank Ltd. and Alice Ventures Pty, filed infringement claims in 2007 against CLS Bank International, which settles about $4.5 billion foreign-exchange transactions daily.

A federal judge in Washington ruled in 2011 that the idea of using an intermediary to settle trades isn’t eligible for a patent, and computerizing the notion didn’t make it patentable.

In a 2-1 decision in July, the appeals court reversed that decision, ruling that Alice’s suit should proceed because the patents cover “practical applications of the invention” and not an abstract idea.

The Federal Circuit agreed to have all active judges on the court rehear the case tomorrow, with a focus on how to determine if a computer-implemented invention can be patented.

The case is CLS Bank v. Alice Corp., 11-01301, U.S. Court of Appeals for the Federal Circuit.

Merck Wins Ruling to Block Mylan’s Copy of Zetia, Vytorin

Merck & Co. won a U.S. appeals court ruling that will prevent Mylan Inc. from selling a generic version of the Zetia and Vytorin cholesterol medicines before April 2017.

The U.S. Court of Appeals for the Federal Circuit in Washington denied an appeal by Mylan over the patent for the active ingredient in the drug, ezetimibe. The court posted notice of its decision to affirm a trial judge’s ruling on its website yesterday, two days after it heard arguments.

Together, the drugs had about $2 billion in U.S. sales last year, with Zetia generating $1.33 billion and Vytorin bringing in $764 million, said Ron Rogers, a Merck spokesman. Sales of Vytorin, which combines Zetia with Merck’s Zocor cholesterol pill, have been falling because of questions about its effectiveness.

“The appellate court appropriately upheld the lower court’s ruling in April 2012 that found the patent for Zetia and Vytorin is valid and enforceable,” Rogers said. “We invest heavily in the research and development that is needed to discover innovative medicines like Vytorin and Zetia, and we will vigorously defend our intellectual property rights.”

According to Merck’s third-quarter report, the Whitehouse Station, New Jersey-based company also sued Impax Laboratories Inc. and Actavis Inc. over their plans to sell generic versions of Vytorin. Those cases were put on hold pending the outcome of the Mylan case, Merck said in the filing.

Mylan, based in Canonsburg, Pennsylvania, conceded that it infringed the patent, leaving only the issue of whether it was valid and enforceable. Officials with the company didn’t respond to e-mail queries seeking comment.

The case is Merck Sharp & Dohme Corp. v. Mylan Pharmaceuticals Inc., 12-1434, U.S. Court of Appeals for the Federal Circuit (Washington). The lower court case is Schering v. Mylan, 09cv6383, U.S. District Court, District of New Jersey (Newark). BlackBerry Maker Seeks Two U.S. Patents on Retractable Keyboards

BlackBerry, the Canadian maker of BlackBerry mobile devices formerly known as Research In Motion Ltd., filed two patent applications for retractable keyboards.

The applications, published in the database of the U.S. Patent and Trademark Office Feb. 7, cover devices with a keyboard that can be pulled out from beneath the screen.

The company says making the keyboard retractable will make it possible for devices to be smaller and yet retain functionality of the traditional QWERTY keyboard. “As the size of such handheld devices has decreased, the more important it has become to utilize the entire keyboard surface as efficiently as possible,” the company said in its application.

The technology is covered by the 20130033432 and 20130033431 applications.

Last month, the Waterloo, Ontario-based company released information about its new BlackBerry 10 products, one with a touch screen and the other with a physical keyboard. The products will be available in the U.S. beginning in March.

For more patent news, click here.

Trademark

French Gruyere Label Must Include ‘France,’ Commission Rules

“Gruyere” is now a protected geographic designation for a type of cheese produced in France, according to a Feb. 6 publication in the Official Journal of the European Union.

French cheese producers will be required to append their country name to “Gruyere” in the wake of objections lodged by Australia, New Zealand, the U.S. Dairy Export Council and the National Milk Producers Federation of the U.S. They had objected to the registration, saying the term was generic.

Following those objections the European Commission asked France and the objectors to try to reach agreement. No accord was reached within a designated time frame, so the commission made the decision about whether to grant the registration.

The commission found that the evidence submitted by the objectors wasn’t relevant because it didn’t relate to the use of the name within the European Union. The commission consulted with France and Switzerland to determine whether additional labeling measures would be necessary to avoid misleading consumers.

The commission determined that “it appeared necessary to indicate the country of origin, in this case France, on the label in the same field of vision as the name ‘Gruyere’ in letters of the same size as those of the name.”

The registration goes into effect Feb. 26, according to the journal.

For more trademark news, click here.

Copyright

U.K. Court Viewed Infringement Facilitator as ‘Trespasser’

In a case related to unauthorized downloading of copyright- protected content, a U.K. court ruled that the copyright owners don’t have the right to profits realized from those who facilitated the infringement.

Film studios sued the owner of the Newzbin2 website, which indexed film files posted on Usenet. The studios said the website facilitated infringement and sought the assets of its owner.

In 2012, a court found that Newzbin was liable for infringement, and the site was ordered closed. The studios then sought the Newzbin owner’s profits.

In a Feb. 5 decision, the U.K. High Court of Justice’s Chancery Court ruled that no textbook case has suggested that “that a copyright owner can advance a proprietary claim to the fruits of a breach of copyright.”

The court used an example of stolen coins and said that under that scenario, the owner from whom the coins were stolen was entitled to recover them. In the case of a copyright, the court said, the copyright owner still owned the copyright, and the infringer is more akin to a trespasser than an actual thief.

The property owner isn’t entitled to the fruit of the trespass under U.K. law, and neither is the copyright owner entitled to proprietary rights in the infringers profits, according to the opinion.

The case is Twentieth Century Fox. v. Harris, [2013]EWHC 159.

Google Receives 13.6 Million Takedown Requests in January

Google Inc., operator of the world’s most-used search engine, received requests to remove 13.6 million websites in January, according to the Mountain View, California-based company’s data.

The company posts a “transparency report’ on its website, listing the number of takedown requests it receives under the Digital Millennium Copyright Act or under trademark law. Last month, in addition to the removal of the URLs, copyright and trademark owners sought removal of 43,015 specific Internet domain names.

Degban Ltd., a multimedia copyright-protection agency, filed the greatest number of removal requests last month, 2.8 million. The Recording Industry Association of America, a music- industry trade group, came in second, with 1.9 million takedown requests.

For more copyright news, click here.

To contact the reporter on this story: Victoria Slind-Flor in San Francisco at vslindflor@bloomberg.net

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

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