SAP AG (SAP) won a U.S. patent office ruling that could help it avoid paying a $345 million jury verdict over a way to customize pricing, in the first challenge under a new rule for reconsidering business methods patents.
The U.S. Patent and Trademark Office said June 11 that the patent claims owned by closely held Versata Software Inc. should be canceled because they seek to cover a mental process rather than an actual invention. In May, an appeals court upheld the infringement verdict and damage award while the validity of the patent wasn’t an issue.
The decision by the PTO’s Patent Trial and Appeal Board could give SAP more ammunition in its petition asking for a reconsideration of the May decision by the U.S. Court of Appeals for the Federal Circuit in Washington, which specializes in patent law.
With modifications and interest, the jury award has grown to more than $400 million, Versata lawyers have said. SAP, the largest maker of business-management software, reported $11.8 billion in gross profit on sales of $16.2 billion last year, according to data compiled by Bloomberg.
The patent office review was the first of its kind under a new proceeding created by Congress to reconsider issued patents for finance-related business methods.
SAP successfully asked to have the review expedited, so the decision came six months after the process was instituted, said Steve Baughman of Ropes & Gray in Washington, who also represented SAP. The law sets a one-year timeline, while a typical review under old rules could take years.
In a lawsuit filed in March against the patent office, Versata said its patent isn’t for a financial product or service so shouldn’t be subject to the new proceeding.
The case is Versata Software Inc. v. SAP America Inc., 12-1029, U.S. Court of Appeals for the Federal Circuit (Washington). The lower court case is Versata Software Inc. v. SAP America Inc., 07cv153, U.S. District Court, Eastern District of Texas (Marshall).
Pfizer Receives $2.15 Billion From Teva, Sun Over Protonix
Teva Pharmaceutical Industries Ltd. (TEVA) and Sun Pharmaceutical Industries Ltd. (SUNP) will pay $2.15 billion to Pfizer Inc. (PFE) and a partner to settle litigation over unauthorized sales of the heartburn drug Protonix.
Pfizer, the world’s largest drugmaker, will receive 64 percent of the settlement while partner Takeda Pharmaceutical Co. will get the rest, New York-based Pfizer said in a statement yesterday. Teva will pay $1.6 billion, including $800 million this year and the rest in 2014, according to a company statement. Sun said it will pay $550 million.
“We are pleased with today’s settlement, which recognizes the validity and value of the innovation that led to Protonix,” Amy Schulman, Pfizer’s general counsel, said in the statement.
Teva and Sun began selling generic versions in 2008 only to lose a challenge to a patent on the medicine two years later. Pfizer’s Wyeth unit was seeking $2.7 billion from Teva and Sun, saying it was entitled to a share of the revenue from those generic versions, as well as compensation for sales it lost to the copycat.
A trial over Pfizer’s claims began June 3 in federal court in Newark, New Jersey.
“We are pleased to put this matter behind us as we continue to focus on delivering safe and affordable medicines to patients around the world,” Richard Egosi, Teva’s chief legal officer, said in the statement.
The case marked a rare instance in which a brand-drug company was seeking compensation for the early release of a copy of its medicines. Typically, generic-drug makers wait until the patents expire or they get a court ruling that clears the way. Teva has undertaken more than a dozen such at-risk market entries, betting that it would eventually win the case. It usually did.
At the trial in Newark, Pfizer attorney William Lee told jurors that Teva and Sun were unwilling to wait until the patent expired on Protonix before they began selling their cheaper copies.
“They decided to take a risk,” said Lee in his opening statement on June 4. By starting generic sales, the market for branded versions of the drug was “destroyed,” he said. “
The case is Altana Pharma AG v. Teva Pharmaceuticals USA Inc., 04-cv-02355, U.S. District Court, District of New Jersey (Newark).
Barnes & Noble Defeats Alexsam’s Patent Infringement Claim
Barnes & Noble Inc. (BKS), the New York-based bookstore chain, didn’t infringe a patent related to gift-card processing, a jury found.
The company and other retailers were sued in federal court in Marshall, Texas, in 2010 by Alexsam Inc., a Texas-based patent holder. Alexsam had sought money damages and court orders barring further unauthorized use of its technology.
In May a jury rejected Barnes & Noble’s claims that the patents were invalid because the technology it covered wasn’t new. The trial on Barnes & Noble’s alleged infringement of patent 6,189,787 followed.
After a five-day trial, the jury on June 7 said the bookstore chain didn’t infringe the patent.
Alexsam’s claims against other remaining retailers will be heard later this month.
The case is Alexsam Inc. v. Barnes & Noble Inc., 2:13-cv-00003-MHS-CMC, U.S. District Court, Eastern District of Texas (Marshall).
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FIFA Says Brazil World Cup Soccer Trademark Abuse More Than 2010
Soccer’s governing body FIFA said it found more cases of intellectual property infringement related to next year’s World Cup in Brazil than it did a year before South Africa hosted sports’ most-watched event in 2010.
Auke-Jan Bossenbroek, FIFA’s legal counsel responsible for protecting the Zurich-based organization’s trademarks, said action has been taken in the past six months against about 100 companies that don’t have permission to use protected words or logos related to the World Cup, which kicks off in Rio de Janeiro June 12, 2014.
FIFA and the local organizing committee have sold sponsorship rights to the monthlong event to 20 companies whose combined involvement is $1.4 billion through a mixture of direct cash payments and services. Coca Cola Co. (KO), one of FIFA’s longest-tenured sponsors, is providing 5 million beverages for the tournament and Hyundai Motor Co. (005380) will deliver 1,400 vehicles to transport officials and teams in 12 host cities.
FIFA has been accused by small-business owners of being heavy-handed in its protection of rights at its flagship competition, which is responsible for about 90 percent of its income. Marketing Director Thierry Weil said FIFA has a responsibility to partners who have “invested quite a significant amount of money to be part of the event.”
FIFA has registered slogans including Brazil 2014 and Copa 2014 as trademarks, and also the image of its current gold trophy.
While the majority of cases have been solved “by a phone call,” Bossenbroek said, there have been instances of large corporations trying to use the popularity of the World Cup in marketing material and promotional activity.
During the 2010 tournament in South Africa, FIFA filed charges against organizers of an ambush marketing campaign for a Dutch beer brand during a match between the Netherlands and Denmark. FIFA’s reaction to the incident, which featured about 30 women wearing identical orange dresses, meant that Lieshout, Netherlands-based Bavaria, the company behind the stunt, got publicity for several days.
Many of the cases in Brazil have been the result of local businesses not understanding the rules related to using World Cup logos, Bossenbroek said.
University of Kansas Claums ‘KUBoobs’ Infringes Trademarks
The University of Kansas told the operator of an account with Twitter Inc.’s short-messaging service that products it promotes and its domain name infringe the school’s trademarks, the Topeka Capital-Journal reported.
The school was objecting to the use of its “KU” trademark with the @KUBoobs Twitter account, the www.kuboobs.com domain name, and the sale of “I heart KU Boobs” wristbands, according to the newspaper.
The Twitter account solicited photographs of women’s chests with something with a KU logo, saying these photos were a good luck ritual, the newspaper reported.
The school said the KUBoobs activities could potentially create unfair competition, and cause the public to believe, mistakenly, that some affiliation existed between the entities, according to the Capital-Journal.
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Chinese National Gets 12 Years in Prison for Pirated Software
A Chinese national was ordered to serve 12 years in a U.S. prison for selling more than $100 million worth of software pirated from American companies, including Agilent Technologies Inc. (A), from his home in China.
Xiang Li, 36, was sentenced June 11 in federal court in Wilmington, Delaware, after pleading guilty to copyright and wire fraud conspiracy charges in connection with software sales from his China-based website, prosecutors said in a release.
Li and his wife, of Chengdu, China, were accused of running a website called “Crack 99” that sold copies of software for which “access-control mechanisms” had been circumvented, the U.S. said in an unsealed 46-count indictment. The pair was charged with distributing more than 500 copyrighted works to more than 300 buyers in the U.S. and overseas from April 2008 to June 2011.
Li is the first Chinese citizen to be “apprehended and prosecuted in the U.S. for cybercrimes he engaged in entirely from China,” prosecutors said in court filings.
“It was hard for me to accept that Mr. Li deserved” a 12-year sentence for his actions, Mingli Chen, Li’s lawyer, said in a telephone interview.
According to court filings, Li was arrested by federal agents in June 2011 in Saipan, an island about 120 miles (193 kilometers) northeast of Guam in the western Pacific Ocean.
Li agreed to travel there from his home in southwest China to deliver pirated software and 20 gigabytes of proprietary data from a U.S. software company to undercover agents posing as businessmen, according court filings.
The pirated software included programs made by Santa Clara, California-based Agilent and Canonsburg, Pennsylvania-based Ansys (ANSS) Inc., prosecutors said.
Prosecutors had asked U.S. District Judge Leonard Stark in to sentence Li to more than 17 years in prison over the illegal software sales. Li will be deported to China once he serves his prison term, the government said in a statement.
The case is U.S. v. Li, 10-cr-112, U.S. District Court, District of Delaware (Wilmington).
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Trade Secrets/Industrial Espionage
N.J. Tech Council Head Says Don’t Halt Immigration Reforms
The arrest June 5 of a foreign-born worker in a trade secrets case involving Becton Dickinson & Co. (BDX) medical technology is no reason to derail immigration reform, the head of New Jersey’s technology business trade group said, NJBiz reported.
Maxine Ballen, president and chief executive officer of the New Jersey Technology Council said such incidents are too rare to derail industry’s need for foreign talent and the easing of restrictions on visas for skilled workers, according to NJ Biz.
She told NJBiz that companies can’t afford to do without skilled workers from abroad.
Ballen said that while she was “appalled” at the recent arrest of an ex-BD employee, it is still important to increase rather than constrict the immigration pool, according to NJBiz.
To contact the editor responsible for this story: Michael Hytha at firstname.lastname@example.org.