WikiLeaks, Kraft, Rolex, Google: Intellectual Property

Access to cheaper drugs in other countries may be limited by a provision sought by the U.S. in a Pacific trade deal, according to patent specialists who reviewed a document exposed by the WikiLeaks anti-secrecy group.

The proposal would boost patent protections for brand-name medicines in some participating countries and curtail access to low-cost generic drugs, the specialists said after reading a 94-page document WikiLeaks said is a draft of the intellectual-property chapter of the Trans-Pacific Partnership being negotiated by 12 nations, including the U.S. and Japan.

Patent safeguards give pharmaceutical makers such as Pfizer Inc. (PFE) and Merck & Co. (MRK) the right to block competition from generic drugs for a set period to protect their research investments. U.S. negotiators are trying to balance preserving those barriers against the desire to make drugs more affordable and accessible in developing countries.

“Pharmaceutical companies are extremely important for job creation in the United States but we also have more important issues sometimes,” Robert Stoll, a former commissioner of the U.S. Patent and Trademark Office, said in an interview. “This is something that needs to be more transparent.”

Protecting the patents of drugmakers including AbbVie Inc., (ABBV) which was spun off from Abbott Laboratories (ABT) in January, and GlaxoSmithKline Plc (GSK) as part of the accord has drawn criticism from groups such as Doctors Without Borders and advocates of providing cheaper drugs to treat HIV and AIDS.

The trade agreement, covering an area with $28 trillion in economic output, would be the largest accord in U.S. history, though it may be eclipsed by a separate pact that President Barack Obama’s administration is negotiating with the European Union. Other nations drafting the partnership are Australia, Brunei, Canada, Chile, Malaysia, Mexico, New Zealand, Peru, Singapore and Vietnam.

U.S. Trade Representative Michael Froman has said negotiators are seeking a deal by year’s end. “We’re now in the endgame,” he said Nov. 13 at a conference in Washington.

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Trademark

Kraft Wins Appeals Court Ruling Upholding Cracker Barrel Bar

Kraft Foods Group Inc. (KRFT), the maker of Cracker Barrel-brand cheeses, won a U.S. appeals court ruling provisionally keeping products sold by the Cracker Barrel Old Country Store Inc. restaurant chain off grocers’ shelves.

“Familiarity is likely to have made the name Cracker Barrel salient to grocery shoppers, and so any product bearing that name might be attributed to Kraft, even if close scrutiny of the label would suggest that the product might well have a different origin,” the Chicago-based three-judge appeals panel said yesterday.

Upholding a preliminary injunction issued this year by a lower court, the appellate judges said Kraft could be injured if consumers were dissatisfied with the restaurant chain’s products.

Kraft, based in Northfield, Illinois, has made Cracker Barrel-brand cheese since 1954 and has derived more than $100 million in revenue from it, according to its website.

It sued the Lebanon, Tennessee-based Cracker Barrel (CBRL) restaurant company for trademark infringement this year after learning of its plan to sell packaged ham and other branded products in grocery stores. The restaurant chain has more than 600 locations in 42 states, according to its website.

“The likelihood of confusion seems substantial and the risk to Kraft of the loss of valuable goodwill and control therefore palpable,” the panel said, upholding U.S. District Judge Robert Gettleman’s July 1 order.

Gettleman also required Kraft to post a $5 million bond in case Cracker Barrel turns out to have been wrongfully blocked from selling its products.

The media relations department for Cracker Barrel Old Country Stores didn’t immediately reply to a voice-mail message seeking comment on yesterday’s decision. Kraft’s media relations dept didn’t immediately respond to a phone message seeking comment.

The case is Kraft Food Group Brands LLC v. Cracker Barrel Old Country Store Inc., 13-2559, U.S. Court of Appeals for the Seventh Circuit (Chicago).

Rolex Receives $8.5 Million Settlement in Trademark Suit

Rolex Group’s Rolex Watch U.S.A. unit received an $8.5 million settlement in a trademark lawsuit against an Internet retailer, according to a court filing.

The Swiss watch manufacturer sued Melrose Jewelers of Los Angeles for trademark infringement in federal court in Los Angeles in July 2012. Melrose, which did business on the Internet at Melrose.com, was accused of selling counterfeit Rolex watches and using non-Rolex elements within altered Rolex watches.

Melrose generated $10 million in revenue in 2011, according to a statement last year.

The parties entered into a consent agreement in which Melrose is permanently barred from advertising or selling any genuine or non-genuine Rolex watches. The company also agreed to surrender its Melrose.com domain name to Rolex, as well as other domain names that contain “Melrose.”

Additionally, Melrose was to deliver to Rolex’s counsel all Rolex watch heads in its possession or control.

The case is Rolex Watch U.S.A. Inc. v. Agarwal, 12-cv-06400, U.S. District Court, Central District of California (Los Angeles).

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Copyright

Google Wins Dismissal of Lawsuit Over Digital Books Project

Google Inc.’s (GOOG) project to digitally copy millions of books for online searches doesn’t violate copyright law, a federal judge ruled, dismissing an eight-year-old lawsuit against the largest search-engine company.

Google Books provides a public benefit and is a fair use of copyrighted material, Judge Denny Chin in Manhattan ruled yesterday. The project, which has scanned more than 20 million books so far, doesn’t harm authors or inventors of original works, Chin said.

“Google Books provides significant public benefits,” Chin wrote. “It advances the progress of the arts and sciences, while maintaining respectful consideration for the rights of authors and other creative individuals, and without adversely impacting the rights of copyright holders.”

Chin’s decision comes more than two years after he rejected a proposed $125 million settlement in the case filed by the Authors Guild, which represents writers. The group sued in 2005 alleging that Google, owner of the world’s most popular search engine, infringed copyrights by scanning and indexing books without writers’ permission.

Paul Aiken, the Authors Guild’s executive director, said in a statement that the ruling is a “fundamental challenge” to copyrights and that his group plans to appeal.

“Google made unauthorized digital editions of nearly all of the world’s valuable copyright-protected literature and profits from displaying those works,” Aiken said. “In our view, such mass digitization and exploitation far exceeds the bounds of the fair use defense.”

If upheld on appeal, the decision may help Google retain its leadership in Internet searching, which has allowed it to become the world’s largest online advertiser. Google has more than 70 percent of the ad revenue tied to online searches in the U.S., according to researcher EMarketer Inc.

The case is Authors Guild v. Google, 1:05-cv-08136, U.S. District Court, Southern District of New York (Manhattan).

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Trade Secrets/Industrial Espionage

Sanofi Seeks Trade Secret Designation for OTC Nasacort Label

Sanofi (SAN) SA’s Sanofi-Aventis unit, maker of Ambien and Plavix, sued the U.S. Food and Drug Administration, claiming the label information on one of its over-the-counter drugs is a trade secret.

The Bridgewater, New Jersey-based pharmaceutical company said in its court filing that its over-the-counter version of the Nasacort Allergy 24HR nasal spray was approved by the FDA and is expected to come to market in 2014. According to the company website, the over-the-counter version will be the original full prescription strength.

The company is claiming that its labeling and packaging materials for Nasacort are a trade secret and filed the suit in federal court in Washington seeking an order barring the FDA from releasing that information until it begins selling the over-the-counter version.

Under FDA regulations, labeling for generic versions of the product much match the labeling for the Sanofi product, according to court papers.

Sanofi said that providing the information to generics manufacturers will “give them advance knowledge of the labeling they must match,” enabling them to get their competing products on the market sooner.

Release of the labeling information would also enable generics manufacturers to prepare advertising and promotional materials before the Sanofi product enters the market, the company said in its pleadings. Such disclosure “would cause substantial competitive harm” to the drugmaker, Sanofi said.

The FDA has informed Sanofi that it has received four requests under the Freedom of Information Act for the approved labeling for over-the-counter Nasacort. Sanofi claims that the labeling and packing information falls under an exception to the Freedom of Information Act and the Trade Secrets Act.

The FDA sent Sanofi a letter Nov. 1 rejecting its request for confidentiality, the company said.

The case is Sanofi-Aventus U.S. LLC v. Food and Drug Administration, 13-cv-01753, U.S. District Court, District of Columbia (Washington).

Trade-Related Intellectual Property

China Intellectual Property Rules Lack Transparency, Locke Says

China must strengthen commercial rule of law to protect intellectual-property rights because current safeguards lack transparency or consistency, U.S. Ambassador Gary Locke said.

Damages awarded in intellectual property cases aren’t sufficient to compensate for losses or deter pirates, Locke told a conference sponsored by his office yesterday.

“There is still a long road ahead before right holders in China can feel confident that their IPR will be both fully protected under the law and effectively enforced,” Locke told the 2013 U.S. Ambassador’s Intellectual Property Rights Round-table. At the same, time, he said China’s enforcement regimes are “clearly moving in the right direction.”

China has pledged to strengthen actions against piracy and ensure that the country’s state-owned enterprises use only legal software. More than three-quarters of the software used in the nation comes from counterfeit copies, according to a report last year from the Business Software Alliance.

Asked about Locke’s remarks at a briefing in Beijing yesterday, Foreign Ministry spokesman Qin Gang said China has made “great efforts” to protect intellectual property and wants to work with the U.S. to push for greater IP protection.

“We hope that the U.S. can be more objective and fair in understanding this,” Qin said. “We hope that relevant countries can strengthen dialogue and not keep applying pressure and blame.”

Sales of illegal software in China were valued at $9 billion in 2011, compared with a legal market of less than $3 billion, for a piracy rate of 77 percent, the Washington D.C.- based alliance said in its report in May 2012.

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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