The U.S. Supreme Court bolstered Monsanto Co. (MON)’s ability to control the use of its genetically modified seeds, ruling that companies can block efforts to circumvent patents on self-replicating technologies.
The justices unanimously upheld an $84,456 award Monsanto won in a lawsuit against Vernon Hugh Bowman, an Indiana farmer. Rather than buying herbicide-resistant soybean seeds from a Monsanto-authorized dealer, Bowman used harvested soybeans containing the technology to plant his crops.
“Bowman planted Monsanto’s patented soybeans solely to make and market replicas of them, thus depriving the company of the reward patent law provides for the sale of each article,” Justice Elena Kagan wrote for the court.
The case may affect makers of live vaccines, genetically modified salmon, and bacteria strains used in medical research, potentially helping makers of those products restrict use beyond the first generation. Even so, the court said its ruling was a narrow one that didn’t resolve all issues concerning patents on self-replicating technologies.
“We recognize that such inventions are becoming ever more prevalent, complex and diverse,” Kagan wrote. “In another case, the article’s self-replication might occur outside the purchaser’s control. Or it might be a necessary but incidental step in using the item for another purpose.”
The case centered on a technology that has helped make Monsanto the world’s largest seed company, with $14.7 billion in annual revenue, as well as a prime target for opponents of genetically modified food.
St. Louis-based Monsanto inserts genes into crops, letting them withstand application of the herbicide Roundup. Farmers who buy so-called Roundup Ready seeds must accept restrictions on their use, agreeing not to save the harvest for planting in a later season.
Yesterday’s ruling “reflects the court’s sensitivity to the importance of patent protection not only for agriculture companies such as Monsanto, but for the basic incentive structure the patent system provides for innovation,” the company said in a statement.
Bowman’s lawyer, Mark Walters, said in an e-mail that the ruling “makes infringers out of 95 percent of America’s soybeans farmers, dependent on the grace of a single company to avoid liability.”
Monsanto said before the ruling that a loss would force the seed industry to shift research away from soybeans, canola and wheat -- crops that produce exact replicas of themselves because they are self-pollinating. Grain from hybrid crops such as corn isn’t typically replanted because the offspring are less productive.
The case is Bowman v. Monsanto, 11-796, U.S. Supreme Court (Washington).
Nike LeBrons to NFL Helmets Protecting Edges in Patent Lawsuits
No longer are sporting-goods makers relying just on the allure of a star athlete or a colorful design to sell athletic wear and equipment. As they build in technology to sell performance and safety advantages, they’re encountering the same sorts of legal challenges to their features as makers of smartphones and medical devices have.
Patent-infringement lawsuits were filed this year against Beaverton, Oregon-based Nike over its FuelBand monitor, through which users download heart rates and other data to a smartphone application, and its Hyperdunk+ and LeBron X+ shoes, the latter named for the Miami Heat’s LeBron James.
The litigation promises to be expensive -- patent cases with more than $25 million at stake cost $5 million on average, according to the American Intellectual Property Law Association -- and could determine winners in the growing market.
“You have a relatively small industry, with a relatively few number of players and incredibly competitive companies,” attorney Brian Rosenthal of Mayer Brown in Washington. “Every time there’s a technological advance, everyone wants to be number one.”
Gadgets that combine electronics with athletic equipment are the fastest growing segment of the so-called wearable device market, which also includes Google Inc. (GOOG)’s Google Glasses, according to Juniper Research, based in Hampshire, England. The market is projected to grow from about $800 million this year to $1.5 billion in 2014, said Nitin Bhas, a researcher with Juniper in London.
Nike isn’t the only sporting-goods maker sued over its innovations, and the sector could be the next big patent battleground after the smartphone litigation tying up Apple Inc. (AAPL), Google Inc.’s Motorola unit, Samsung Electronics Co. and other technology companies.
SportBrain Inc., an Austin, Texas-based company that sells pedometers, sued Herzogenaurach, Germany-based Adidas and Fitbit Inc. over their activity monitors.
Easton-Bell Sports Inc.’s Riddell unit, the official maker of helmets for the National Football League, is accused of infringing a Colorado company’s patents for headgear that measures the impact of a tackle or other blow and transmits it to a wireless device.
Electronics companies including Samsung and Royal Philips NV. are also obtaining fitness patents, said David Cornwell, a lawyer with Sterne Kessler in Washington whose clients include Adidas.
“I’m seeing a lot of companies that I wouldn’t expect for sports electronics,” Cornwell said.
Nintendo Wins Appeals Court Ruling Over Video Game Systems
Nintendo Co. won an appeals court ruling that prevents a patent-licensing company from trying to block imports of its Wii gaming system into the U.S.
Motiva LLC, which had claimed Nintendo infringed its patents, didn’t meet the requirements that would let it file a complaint with the U.S. International Trade Commission, the U.S. Court of Appeals for the Federal Circuit said in a decision posted on its website.
The case is Motiva LLC v. ITC, 12-1252, U.S. Court of Appeals for the Federal Circuit.
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BCBG Wins Court Order Barring Knockoffs of Leger Bandage Dresses
BCBG Max Azria Group Inc. won a court order barring a competitor from creating and selling knock-off versions of the Herve Leger “bandage dress.”
Vernon, California-based BCBG acquired the Leger brand in 1998. Leger was already famous for the design of the bandage dress, made from bands of fabric that form a tight-fitting dress that “accentuates the female form,” the company said in its court papers.
These dresses are popular with celebrities and won an award for the company during the Fall/Winter 2011 Mercedes-Benz Fashion Week in New York, according to the complaint.
The company said the dresses are sold in department stores such as Nordstrom Inc. (JWN) and the Intermix boutique. According to the Leger website, the dresses sell for $900 to $1,600.
In the complaint filed in March 2012 in federal court in Los Angeles, BCBG claimed that Los Angeles-based Stretta Moda LLC was making and selling illegal copies of the bandage dress. Further, BCBG said, Stretta was “leaking” to the public a claim that its garments were made in the same factories as the Leger bandage dress.
The dresses were so similar looking, BCBG said, that customers have even tried to “return” Stretta merchandise to Leger.
BCBG had asked the court for money damages and an order barring further infringement.
In a consent order filed in April, Stretta agreed to pay $150,000 to BCBG. Additionally, the company agreed to quit making, importing or selling knockoffs, including but not limited to 37 specific dresses listed in the order.
Both sides were to pay their own litigation costs and attorney fees.
The case is BCBG Max Azria Group Inc. v. Stretta Moda LLC, 2:12-cv-02088-ABC-JCG, U.S. District Court, Central District of California (Los Angeles).
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Deutsche Boerse Unit Spurned by Top U.S. Court on Index Options
The justices yesterday turned away an appeal by Deutsche Boerse’s International Securities Exchange LLC of a court order that barred the company from creating a market for the options without a license. Deutsche Boerse is the operator of the Frankfurt stock exchange.
The rebuff is a victory for McGraw-Hill Cos. (MHP), whose S&P Dow Jones unit maintains the indexes, and CBOE Holdings Inc. (CBOE), whose Chicago Board Options Exchange offers index options under an exclusive licensing agreement with S&P Dow Jones.
McGraw Hill and CBOE won an Illinois state court ruling barring International Securities Exchange from using the indexes to create an index-options market without a license.
At the Supreme Court, International Securities Exchange argued unsuccessfully that federal copyright law barred the claim by McGraw Hill and CBOE.
The case is International Securities Exchange v. Chicago Board of Options Exchange, 12-940, U.S. Supreme Court (Washington).
Canadian Anti-Piracy Firm Gathers 1 Million Evidence Files
Canipre, a Montreal-based intellectual property enforcement company, says that after monitoring the downloading of pirated content in Canada for several months, it has gathered more than one million evidence files, the National Post reported.
The company said it has already provided evidence to one client -- Los Angeles-based Voltage Pictures, maker of the “Hurt Locker” film -- which is pursuing alleged infringers in Canadian federal court in Toronto, according to the newspaper.
The Canadian ISP Teksavvy, which is on the other side of the case, could potentially be ordered by the court to release customer information tied to the Internet protocol addresses identified by Canipre, the Post reported.
Barry Logan, managing director of Canipre, told the National Post that his company has a “long list” of clients who are willing to file infringement suits based on his data.
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Trade Secrets/Industrial Espionage
MIT Can Withhold Names in Swartz Suicide Probe, Court Rules
Massachusetts Institute of Technology doesn’t have to disclose names of professors and law enforcement agents when it releases documents related to the case of Aaron Swartz, who committed suicide while awaiting trial on charges of stealing electronic files.
U.S. District Judge Nathaniel Gorton said the names of the MIT professors and agents in documents to be produced for public viewing could be concealed to protect them from harm, according to a filing in Boston yesterday.
“The estate’s interest in disclosing the identity of individuals named in the production, as it relates to enhancing the public’s understanding of the investigation and prosecution of Mr. Swartz, is substantially outweighed by the interest of the government and the victims in shielding their employees from potential retaliation,” Gorton said in his order.
Swartz was arrested in 2011 and charged with unlawfully entering MIT’s computer network and downloading more than 4 million articles and documents from journals and distributing them for free.
Facing a possible sentence of 30 years if convicted, the 26-year-old hanged himself in his Brooklyn apartment last year. His family blamed the university and U.S. prosecutors for his death and sought to have the documents released without omissions.
The criminal case was U.S. v. Swartz, 1:11-cr-10260, U.S. District Court, District of Massachusetts (Boston).
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