Nestle SA (NESN) offered to lift obstacles to rivals that make knockoff capsules for Nespresso coffee machines in France, aiming to end a probe by the competition regulator in the largest market for the iconic brand.
The world’s biggest coffee maker proposed giving competitors three months’ notice about technical changes to its machines and promised it won’t discourage consumers against copycats or automatically revoke warranties on Nespresso machines if compatible capsules are used, according to a statement April 17 from the French Competition Authority.
The ruling “was the first of its kind,” Alain-Sebastian Oberhuber, an analyst at MainFirst, said in a note. “Nestle faces the risk of more such antitrust investigations in other markets,” which could hurt sales and profit, he wrote.
Nespresso, the biggest maker of single-serve coffee in Europe, has been losing market share to capsules made by companies including D.E Master Blenders 1753, Mondelez International Inc. (MDLZ) and Ethical Coffee Co. as some of its patents have expired. Nespresso has been adding espresso varieties and expanding into areas like the U.S. to boost sales as growth has slowed in past years.
The initiatives “demonstrate the company’s commitment to fair and open competition,” Diane Duperret, a Nespresso spokeswoman, said in an e-mailed statement.
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Diller Goes Big in U.S. High Court Gamble on Aereo’s Future
Aereo, the streaming-TV startup challenging the economics of the television industry, goes before the court tomorrow to fight copyright claims from broadcasters including CBS Corp. (CBS) and Walt Disney Co. (DIS)’s ABC. Aereo’s Internet service lets customers in 11 cities watch live and recorded broadcast programs for $8 a month.
The case marks the culmination of a two-year court fight stemming from Aereo’s bid to forge a technological route around the broadcasters’ copyrights and from Diller’s hope to transform an industry he once embodied.
Broadcasters say an Aereo victory might create a blueprint that would let cable and satellite providers stop paying billions of dollars in retransmission fees each year to carry local programming. While Aereo questions that assessment, Diller says his goal is nothing short of upending the TV distribution system so consumers can buy programming they want, rather than the packages offered through cable and satellite.
With the Supreme Court now set to rule by early July, the broadcasters say they are confident the gamble will fail.
Chances for a definitive ruling rose last week when Justice Samuel Alito indicated he will take part. Alito didn’t participate when the court agreed in January to hear the dispute, raising the prospect that the court might divide 4-4. The court’s online docket on April 17 said Alito is “no longer recused” from the case.
The case is American Broadcasting Companies v. Aereo, 13-461.
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Pandora Sued by Record Companies Over Music Made Before 1972
Pandora Media Inc., (P) the biggest Internet radio service, was sued by major record labels for failing to pay for using music recorded before 1972.
The companies, including Capitol Records LLC and Sony Music Entertainment, filed the copyright-infringement lawsuit in New York State Supreme Court in Manhattan April 17 because federal law doesn’t protect recordings made before Feb. 15, 1972. New York courts have enforced ownership rights stemming from before that date, according to the suit.
The labels accused the Oakland, California-based music streaming service of “massive and continuing unauthorized commercial exploitation” of thousands of recordings including iconic songs such as the Beatles’ “Hey Jude,” Bob Dylan’s “Like a Rolling Stone” and Marvin Gaye’s “I Heard It Through the Grapevine.”
Pandora has been fighting in court over how much it has to pay to stream music. In a ruling that sets a precedent for future rate battles, a federal judge in Manhattan last month said the company must give 1.85 percent of revenue to a group representing songwriters and music publishers, rejecting Pandora’s request for a lower rate.
“Pandora is confident in its legal position and looks forward to a quick resolution of this matter,” Will Valentine, a spokesman for the company, said by e-mail.
Pandora had sued the 470,000-member American Society of Composers, Authors and Publishers in 2012, saying that the fees charged at the time made sustained profitability impossible.
The case is Capitol Records LLC v. Pandora Media Inc., 651195/2014, New York State Supreme Court, New York County (Manhattan).
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Teva Rejected by Justice Roberts on Generic Copaxone Delay
A U.S. Supreme Court justice rejected Teva Pharmaceutical Industries Ltd. (TEVA)’s bid to block generic versions of its Copaxone multiple-sclerosis drug while the court hears the company’s appeal in a patent clash.
The rebuff by Chief Justice John Roberts on April 18 leaves Teva open to generic competition as soon as next month. Mylan Inc., Momenta Pharmaceuticals Inc. (MNTA) and Novartis AG’s Sandoz are positioned to start selling generic Copaxone in late May, although they would risk having to pay damages if Teva ultimately wins its patent-infringement case. Momenta and Sandoz are working together on a generic version of the drug.
“Teva will continue pursuing its appeal in the Supreme Court and defending its intellectual property for Copaxone,” according to a statement April 19 from the Petach Tikva, Israel-based company.
Teva can ask another justice to intervene. By custom, that application would then go to the full court for consideration.
In a one-paragraph opinion April 18, Roberts said a court-ordered delay was unnecessary because Teva could recover damages for infringement if it wins the case.
“We are pleased with the chief justice’s decision, and we look forward to introducing the first generic Copaxone treatment for multiple sclerosis patients in the U.S. at market formation,” Mylan Chief Executive Officer Heather Bresch said in a statement.
Copaxone brings in $3.2 billion in annual U.S. sales and accounts for more than half of Teva’s profit. A delay would give Teva more time to switch patients from the 20-milligram dose that is the subject of the legal fight to a 40-milligram dose it says is covered by other patents.
The case is Teva v. Sandoz, 13-854.
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