Stryker, Samsung, Arcadia Group: Intellectual Property

Zimmer Holdings Inc. (ZMH), which lost a February trial against Stryker Corp. over a surgical device, was told to pay more than $228 million -- three times the jury award plus other costs -- and stop selling its products.

The increase in the jury award was appropriate because Zimmer intentionally infringed Stryker patents to build its business for pulsed lavage, a technique that removes damaged tissue and cleans bones during joint-replacement surgery, U.S. District Judge Robert Jonker said in an order issued Aug. 7. He also ordered Zimmer to stop selling its Pulsavac Plus device.

A federal jury in Grand Rapids, Michigan, in February sided with Stryker and awarded $70 million in damages. The dispute is over devices that use pulsing liquid, such as water or saline solution, to loosen debris from a surgical site and remove it by suction.

“A $70 million verdict sounds large in the abstract, but in context, it may not be enough, without enhancement, to deter infringing conduct,” Jonker wrote in his opinion. Tripling the award is appropriate “given the one-sidedness of the case and the flagrancy and scope of Zimmer’s infringement.”

The $228 million figure is more than the second-quarter profit for either company. Kalamazoo, Michigan-based Stryker reported $213 million in net income on sales of $2.2 billion. Zimmer, based in Warsaw, Indiana, reported $152 million net income on $1.17 billion in sales.

The judge awarded $210 million after tripling the $70 million jury award, then added another $7 million for infringing sales that weren’t covered by the verdict, $11.2 million for interest, as well as attorney’s fees, said Stryker lawyer Greg Vogler of McAndrews Held & Malloy in Chicago.

“Zimmer chose a high-risk/high-reward strategy of competing immediately and aggressively in the pulsed lavage market and opted to worry about the potential legal consequences later,” the judge said.

Officials with Zimmer didn’t immediately return messages seeking comment.

The case is Stryker Corp. (SYK) v. Zimmer Inc., 10-cv-01223, U.S. District Court, Western District of Michigan (Grand Rapids).

For more patent news, click here.

Trademark

Samsung Files Application for Trademark for Wearable Phone

Samsung Electronics Co. (005930), which is locked in a battle with Apple Inc. (AAPL) for supremacy in the mobile phone market, is planning a wearable phone, based on a recent trademark filing.

The South Korean-based company filed an application to register “Samsung Galaxy Gear” as a trademark, according to the database of the U.S. Patent and Trademark Office.

According to the application, which was filed July 29, Samsung plans to use the mark for a “wearable digital electronic devices in the form of a wristwatch, wrist band or bangle capable of providing access to the Internet and for sending and receiving phone calls, electronic mails and messages.”

The mark would also be used with smart phones, tablet devices and portable computers, Samsung said in the application.

Rival Apple has filed applications in multiple countries to register “iWatch” for a comparable wearable device. In the U.S., the Cupertino, California-based company may have difficulty, as a company in Fresno, California, filed an application in 2012 to use the mark with mobile phones.

Another contender is Qualcomm Inc., (QCOM) the San Diego-based maker of digital wireless communications equipment, which filed an application with the patent office June 26 to register “Qualcomm TOQ” as a trademark.

The company said in its application that it will use the mark with “personal communication hub in the form of a wristwatch; portable electronic devices for transmitting and reviewing text, data, image, and audio files; hands-free devices for mobile phones; battery chargers.”

Topshop’s Perth Opening Hits Opposition From Local Retailer

Arcadia Group PLC’s Topshop unit, which operates stores in Melbourne and Sydney, has run into opposition in its attempt to open a store in Perth, Australia, because of a trademark conflict, Fairfax Media Ltd. (FXJ)’s WAToday reported.

Robyn Swayn, owner of a women’s retail shop that has been operating in Perth for 36 years as Topshop Fashions, told WAToday she’s trying to block the U.K. company’s Australian trademark application.

She said that while she doesn’t want to stop the opening of a Perth outlet by the fashion chain, she wants what she says is adequate compensation, according to WAToday.

Swayn turned down an earlier offer from Topshop as insufficient to cover the cost of changing her signs, advertising to let customers know about the name change, and the compensating her for the goodwill associated with the business, WAToday reported.

For more trademark news, click here.

Copyright

Artist Loses Copyright Appeal Against Green Day Over Backdrop

The rock band Green Day prevailed in a copyright suit brought by an artist who claimed his work was infringed in a video backdrop the group used.

Dereck Seltzer, who created his “Scream Icon” drawing in 2003, filed suit in federal court in Los Angeles in 2010, claiming a backdrop used behind Green Day in its 2009 concert tour contained an unauthorized copy of the image.

After the trial court found that the band’s use of the image fell within U.S. copyright law’s “fair use” provision, the artist filed an appeal with the U.S. Court of Appeals in San Francisco.

In an Aug. 7 opinion, the appeals court affirmed the lower-court ruling on the infringement issue and said the backdrop used Seltzer’s content in a way that transformed it enough so that it was a new work. The court noted that the image became “only a component of what is essentially a street-art focused music video about religion and especially about Christianity.”

Seltzer’s work didn’t address religion, the court said, and the focus of the total performance on religion conveyed “new information, new aesthetics, new insights and understandings” that were distinct from the original piece.

Green Day’s attorney fee award was overturned. The appeals court said the lower court erred in finding that the artist acted unreasonably in bringing the suit and awarding the band attorney fees.

The case is Seltzer v. Green Day Inc., 11-56573, U.S. Court of Appeals for the Ninth Circuit. The lower court case is Dereck Seltzer v. Green Day Inc., 2:10-cv-02103-PSG-PLA, U.S. District Court, Central District of California (Los Angeles).

Nigerian Company Says It Registered Copyright for RFID Program

Haynes-Worth International Ltd., a technology company based in Lagos, Nigeria, is claiming the company holds the copyright to a Radio Frequency Identification system used in the oil industry, All Africa Global Media reported.

Joseph Afenikhena Imonikhe said in a statement that his company had registered the copyright with the Nigerian Copyright Commission on July 18, according to the publication.

The RFID product is used to secure pipelines and their maintenance, with “the most minimal human efforts,” according to All Africa Global Media.

For more copyright news, click here.

To contact the reporter on this story: Victoria Slind-Flor in Oakland, California, at vslindflor@bloomberg.net.

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

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