Gun Patents, Idenix-Gilead, Amazon: Intellectual Property

Gunmakers such as Smith & Wesson Holding Corp. (SWHC) and Sturm Ruger & Co. (RGR) are boosting firearms sales by building weapons that are more accurate and easier to use, with gun-related U.S. patents at a 35-year high.

Demand is growing as more states allow people to carry concealed weapons and lawmakers discuss limiting sales after mass shootings at public venues like schools and movie theaters. Ownership is rising among women and the elderly, Bloomberg News reports.

Manufacturers are competing for sales with improvements such as magazines that increase a bullet’s accuracy or are lower in cost. Of 6,077 patents issued since 1977 in the firearms class, 19 percent were in the past four years, with a record 370 issued last year, according to the U.S. Patent and Trademark Office.

“There’s money to be made and everybody wants to protect their moneymaker,” said Larry Hyatt, owner of Hyatt Guns in Charlotte, North Carolina, which has been in business for more than 50 years and carries more than 7,000 guns. “There is a huge amount of technology going into these products.”

Recent innovations include patents issued for voice-command shooting, rifle scopes and a new trigger system. Not all are for the weapons themselves: there’s a gun rest that could attach to a hunter’s leg and a pistol holder for next to the bed. The rise in patents has brought on litigation, with at least eight lawsuits filed since the start of 2013.

By many measures, U.S. firearms sales are growing.

Background checks, conducted every time a buyer attempts to purchase one or more firearms, surged 54 percent from 2008 to 2012, with a record 19.6 million checks completed in 2012, according to Federal Bureau of Investigation data.

Sturm Ruger, of Southport, Connecticut, the largest publicly traded U.S. gun maker, reported a 45 percent jump in third-quarter sales this year due to high demand for new firearms including the LC380 pistol, the SR45 pistol and the Ruger American Rimfire rifle.

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Idenix Files Two Suits Against Gilead Sciences

Idenix Pharmaceuticals, Inc. (IDIX), a biopharmaceutical company that focuses on treatments of viral diseases, sued Gilead Sciences Inc. (GILD) in federal court in Boston and Wilmington, Delaware.

According to a statement yesterday from Idenix, the Massachusetts infringement lawsuit alleges that Gilead infringes two U.S. patents co-owned by Idenix (6,914,054 and 7,608,597) that cover methods of treating the hepatitis C virus.

The Delaware infringement and interference lawsuit alleges that Gilead infringes a separate U.S. patent co-owned by Idenix (7,608,600) that also covers methods of treating the hepatitis C virus.

Idenix is suing Gilead ahead of the U.S. Food and Drug Administration’s expected approval of sofosbuvir, Gilead’s new drug for hepatitis C.

Cara Miller, a Gilead spokeswoman, said in an e-mail that the company wasn’t “surprised by the Idenix lawsuit and expected the company to file around the time of the sofosbuvir launch. We do not believe that sofosbuvir will infringe any valid patent claims of Idenix and we believe the lawsuits have no merit.”

Maria Stahl, senior vice president and general counsel at Idenix, said in the statement that the company has been “building an intellectual property portfolio that aids in the discovery and development of drugs for the treatment of the hepatitis C virus and other viral diseases.”

The companies, she said, have “attempted to resolve this matter” without litigation.

Idenix and Gilead are involved in a separate patent interference before the U.S. Patent and Trademark Office. Gilead Sciences has also filed suit against Idenix in various jurisdictions outside the U.S., according to the Idenix statement.

The Massachusetts case is Idenix Pharmaceuticals, Inc. v. Gilead Sciences, Inc., 1:13-cv-13052, U.S. District Court for the District of Massachusetts (Boston). The Delaware case is Idenix Pharmaceuticals, Inc. v. Gilead Sciences, Inc., 1:13-cv-01987, U.S. District Court for the District of Delaware (Wilmington).

Nokia Gets Ruling Blocking Sales of HTC’s One Mini Phone in U.K.

A London judge said HTC Corp. (2498) couldn’t sell its One Mini phone in the U.K. from Dec. 6 after it was found to have infringed patents owned by Nokia Oyj. (NOK1V)

While Judge Richard Arnold also ruled that HTC’s One phone contained microchips that breached Nokia’s patent, he delayed an injunction against the product so HTC could appeal. Blocking U.K. sales of the One would cause “considerable” damage to HTC, he said in a ruling today.

HTC One, released globally including the U.K. in March, is the Taiwanese company’s flagship handset for 2013 and was lauded by reviewers for its sleek metallic design. HTC One Mini and HTC One Max, smaller and larger variants of the device, were released in the second half of the year.

“Nokia is also claiming financial compensation for the infringement of this patent,” the Espoo, Finland-based company said in a statement. HTC has agreed not to import any more of the products into the U.K. pending the appeal, Nokia said in a statement.

Two calls and an e-mail to HTC public relations after Taiwan office hours weren’t immediately answered.

HTC had argued the microchips found to infringe Nokia patents were “a very small component” and didn’t justify a sales ban, Arnold said in the ruling. HTC sold about 750,000 smartphones worth about 221 million pounds ($363 million) in the U.K. between January and September, according to the judgment.

Nokia also sued Apple Inc. (AAPL) over the chip patent and settled the case in April 2011 after agreeing to grant Apple a license. In September, Microsoft Corp. (MSFT) agreed to buy Nokia’s devices and services business for 5.44 billion euros.

The cases are HTC Corporation v. Nokia Corporation, High Court of Justice, Chancery Division, Patents Court, HC12A02048 and HC12C02909.

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Copyright

Pejorative Terms Can’t Be Used in Disney-Hotfile Suit

A federal judge said terms such as “piracy,” “theft” and “stealing” cannot be used in an upcoming copyright trial that pits major movie studios against a company that offers so-called digital lockers.

Hotfile.com, a Panamanian company that offers its users “cyberlockers” to store digital content, was originally sued by Time Warner Inc. (TWX)’s Warner Bros. Entertainment unit, Walt Disney Co. (DIS) and three other studios, which accused the company of operating a website that encouraged users to engage in copyright infringement.

The parties may not use those pejorative terms or their derivatives, U.S. District Judge Kathleen M. Williams said.

The studios claim that Hotfile users were encouraged to upload files to hotfile.com, where Hotfile would create five copies of each work and generate unique URLs for each copy. Anyone who accessed such a URL would be able to download a free copy of the file.

In July 2011, the court in Miami dismissed the claims of direct copyright infringement while allowing claims for vicarious and contributory infringement, as well as for inducing infringement, to proceed to trial.

Hotfile argued that using terms such as piracy at a trial for vicarious liability would be prejudicial.

The plaintiffs argued that the terms are commonplace and barring them would hamstring their witnesses, who use these terms as part of their work. One of the plaintiffs, Warner Bros., has a unit named Global Corporate Anti-Piracy.

The court sided with Hotfile, prohibiting use of the terms while saying that the parties may use “terms of art.”

A status conference is scheduled for today. The trial is set for Dec. 9, according to Kate Bedingfield, spokeswoman for the Motion Picture Association of America.

The case is Disney Enterprises Inc. v. Hotfile Corp., 11-cv-20427, U.S. District Court, Southern District of Florida (Miami).

IAC Sued Over Profiles with Fake Photos on Dating Site Match.com

Match.com, the online-dating site owned by IAC/InteractiveCorp. (IACI), is being sued by a model who says that the site permitted the unauthorized use of her “photographs in hundreds if not thousands of fraudulent profiles posted on several of the 25 dating sites owned and operated by the defendants over the past six years.”

In her complaint, Yuliana Avalos lists multiple profiles in which her photograph was used without her permission on Match.com. She alleges that her likeness was also included in profiles on niche dating sites like CatholicPeopleMeet.com and JPeopleMeet.com--a Jewish dating site-- that are part of IAC’s People Media subsidiary.

The complaint alleges violations of copyright law and the federal Lanham Act, which prohibits trademark infringement and false advertising, as well as other federal and state law claims. The suit seeks class-action status to represent others whose pictures also were allegedly used to create dating site profiles.

In a statement, Match.com said the suit “is filled with outlandish conspiracy theories and clumsy fabrications in lieu of factual or legal basis. We’re confident that our legal system is as adept as we are at detecting scammers and will dismiss this case in short order.”

Evan Spencer, the attorney who brought the lawsuit, defended the filing. In addition to the use of unauthorized pictures of his client on multiple sites, he said photos of actors such as Jessica Biel, Rob Lowe and Al Pacino had been used by unauthorized individuals to accompany their profiles.

The case is Avalos v. IAC/Interactivecorp., 13-cv-08351, U.S. District Court for the Southern District of New York (Manhattan).

Sony Sued by Musician Over Sample of 1970s Song Used in Rap

Sony/ATV Music Publishing was sued by a musician who claims one of his songs was sampled and used on the rap recording “Letter to the King.”

Dominic Ierace, known as Donnie Iris, co-wrote the song “Memoirs of the Traveler” when he was a member of the Jaggerz. Ierace’s biggest hit was “The Rapper,” according to the Nov. 27 suit.

Ierace, joined by two former band members, contends that samples from the song were used by the rapper “The Game.”

They claim in their copyright suit that they hadn’t received royalties for the use of their song. According to the suit, The Game’s label, Geffen/Universal, paid royalties to EMI Music Publishing Co. while EMI hadn’t paid the “Memoirs” songwriters. Sony/ATV was sued because Sony bought EMI in 2012.

Jimmy Asci, a spokesman for Sony, declined in an e-mail to comment on the suit.

The case is Rock v. Sony/ATV Music Publishing, 2:13-cv-01697, U.S. District Court for the Western District of Pennsylvania (Pittsburgh). For more copyright news, click here.

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Trademark

Ninth Circuit Overturns District Court in “Platters” Case

A federal appellate court in San Francisco yesterday held that in a trademark case, a plaintiff seeking preliminary injunctive relief must establish that there is a “likelihood of irreparable harm” before a competing mark is banned.

Before yesterday’s ruling, a presumption of irreparable harm was sufficient for a preliminary injunction.

The case involved the Platters, a vocal group of the 1950s whose hits include “Great Pretender” and “Smoke Gets in Your Eyes.” According to the court, the group’s breakup in the 1960s was followed by years of litigation with multiple parties over the continued use of the Platters brand.

Herb Reed, one of the founders of the group, performed under the name Herb Reed and the Platters. Last year, he sued to prevent a tribute brand from using the name. A lower court granted Reed and his company a preliminary injunction.

Yesterday, the U.S. Court of Appeals for the Ninth Circuit, in an opinion by Judge M. Margaret McKeown, reversed. The court, applying Supreme Court precedent as well as that of other circuit courts that had ruled on the question, found that Reed hadn’t established irreparable harm.

While it is possible that the plaintiff “could establish the likelihood of irreparable harm,” McKeown wrote, “missing from this record is any such evidence.”

The case is Herb Reed Enterprises LLC v. Florida Entertainment Management, Inc., 12-16868, U.S. Court of Appeals for the Ninth Circuit (San Francisco).

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Internet

Amazon Rejected by U.S. Supreme Court on New York Sales Tax

The U.S. Supreme Court stayed out of the multibillion-dollar fight over Internet sales taxes, leaving intact a New York law that forces Amazon.com Inc. (AMZN) to collect money from customers in that state.

Acting on one of the biggest online-shopping days of the year, the justices yesterday made no comment in rejecting appeals by Amazon and Overstock.com Inc. (OSTK), another Internet retailer. The companies said the law, upheld by New York’s top court, violates the Constitution by demanding tax collection from businesses that don’t have facilities in the state.

States lose an estimated $23 billion a year in uncollected sales taxes from web retailers. Although Amazon has agreed to collect taxes in some states as it sets up distribution centers, it has resisted efforts by others to impose sales taxes unilaterally. New York’s measure is among a handful that have been dubbed “Amazon laws” because they affect only the largest online sellers.

The New York law “subjects Internet retailers to significant burdens on pain of serious civil and criminal penalties,” Seattle-based Amazon argued in its appeal. The world’s biggest online retailer now collects taxes in 16 states.

The rebuff leaves it to Congress to craft a nationwide approach to the sales-tax issue. Amazon supports federal legislation that would explicitly let states require tax collections by all online retailers above a certain size.

The cases are Overstock.com v. New York State Department of Taxation, 13-252, and Amazon.com v. New York State Department of Taxation, 12-259.

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To contact the reporter on this story: Ellen Rosen in New York at erosen14@bloomberg.net

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

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