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Bose Sues Beats, Sanofi, Hershey: Intellectual Property

Bose Corp. filed a patent-infringement action seeking to block U.S. imports of noise-canceling headphones made by Beats Electronics LLC, the company being bought by Apple Inc.

The Beats Studio and Beats Studio Wireless headphones use technology covered by five patents, Bose said in a complaint filed with the U.S. International Trade Commission in Washington July 24. A mirror lawsuit, filed the next day in federal court in Wilmington, Delaware, makes the same allegations and is likely to be put on hold while the ITC case is pending.

Apple agreed to buy Beats for $3 billion in May, its biggest-ever acquisition, with founders Dr. Dre and music-industry executive Jimmy Iovine joining the iPhone maker. While the deal, projected to close in the current quarter, includes Beats headphones and other hardware, Cupertino, California-based Apple also is getting access to an Internet-based music streaming service.

Bose, based in Framingham, Massachusetts, said it began developing its noise-canceling technology almost four decades ago and started selling its QuietComfort headphones in 2000. The technology in the latest patents, used in more recent models of Bose headphones, involves the use of sound waves to cancel out unwanted noise.

Sarah Joyce, a spokeswoman for Culver City, California-based Beats, said the company doesn’t comment on pending litigation.

Bose has filed other patent suits against rival headphone makers. In February, it filed an ITC complaint to block imports iSport Intensity earbuds made by Monster Cable Products Inc., with the case scheduled for a hearing in October. In 2008, Bose settled a case it had at the ITC against New Zealand’s Phitek Systems Inc. over noise-canceling headphones.

The ITC case is In the Matter of Certain Noise Canceling Headphones and Components Thereof. The lawsuit is Bose Corp. v. Beats Electronics LLC, 14-cv-00980, U.S. District Court, District of Delaware (Wilmington).

Patent

Chinese Companies Take on Hitachi as Rare-Earth Patent Expires

Some Chinese producers of rare-earth magnets are seeking to use this month’s expiration of a key U.S. patent held by Hitachi Metals Ltd. (5486) to expand exports of the micro magnets used in products from motors to smartphones.

The expiration paves the way for previously blocked Chinese producers to sell to U.S. customers, said Sun Baoyu, chairman of Shenyang General Magnetic Co. That company has formed an alliance with six Chinese producers to promote their products and fight Hitachi over other patents, that the Japanese company says largely prevent rivals from making magnets.

Hitachi holds more than 600 patents for rare-earth magnets globally, some of which it acquired after taking over Sumitomo Special Metals Co. in the 2000s, said spokesman Akio Minami.

Japanese companies hold most of the world’s rare-earth magnet patents, while China produces about 90 percent of global supply, Li said. Chinese exports of the magnets were 18,800 tons last year.

The expired U.S. patent 5,654,651 covers magnets with neodymium, a rare earth element, and cobalt.

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Sanofi Off-Patent Drugs Said to Draw Private Equity Interest

Sanofi (SAN)’s $8.5 billion portfolio of older, off-patent drugs has drawn interest from private-equity firms KKR & Co., Blackstone Group and TPG Capital, people with knowledge of the matter said.

Sanofi, based in Paris, is still reviewing options for its mature-drug portfolio, said the people, who asked not to be identified because the information isn’t public.

The drugmaker has held talks with Mylan Inc., Abbott Laboratories and firms such as Warburg Pincus LLC about a possible sale of its mature-products portfolio in Europe, according to an internal Sanofi document circulated by a labor union this month.

The company also has been considering possible partnerships for the assets, according to the document.

Large pharmaceutical companies are seeking to sell older drugs to generate cash to invest in developing newer, more in-demand treatments. Merck & Co. and GlaxoSmithKline Plc are among those reviewing their portfolios of established drugs.

Andrew Witty, chief executive officer of London-based Glaxo, said July 23 that there is “significant” interest in his assets from private-equity firms and mid-tier pharmaceutical companies.

While Sanofi CEO Chris Viehbacher is keen to find a solution for the portfolio, carving out the drugs is complicated and may make a transaction difficult, two people said. The products are made in four different facilities with hundreds of employees, one person said.

The process is still in early stages and Sanofi doesn’t yet have financial information for the private-equity firms to examine for due diligence, the person said.

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Trademark

Politician Hershey Can’t Use Logo That Resembles Candy Wrapper

Maryland State Senator Steve Hershey shares a name with a candy company, but he can’t use campaign materials that resemble the iconic white-and-brown wrapper of a Hershey bar.

According to the July 17 ruling, which granted Hershey Co. a preliminary injunction, the Republican originally used a logo that looked like the candy bar in 2002 and again in 2010. Although the company objected, it allowed him to use his existing materials in 2010. When he used them again in a 2014 campaign, the company sued for trademark infringement.

U.S. District Judge William Quarles Jr. held that although “the public is not likely to confuse the senator with a candy bar,” people “could easily -- and mistakenly -- believe that Senator Hershey is in some way affiliated with Hershey.”

Timothy Maloney of Joseph Greenwald & Laake PA, which represented the senator, declined to comment on the ruling. Hershey was represented by Kaye Scholer LLP.

The case is Hershey Co. v. Friends of Steve Hershey, 14-cv-01825, U.S. District Court, District of Maryland (Baltimore).

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Internet

Google Criticized by Top EU Regulator Over Link Removal

European Union privacy regulators last week continued to criticize Google Inc. (GOOG) after a data-protection summit where officials demanded the company justify its decision to notify publishers when removing links to personal data.

Google is the only company to notify websites that it’s taking down links to material to comply with a court ruling that allows EU residents to erase references to personal data, said Isabelle Falque-Pierrotin, who heads a group of EU privacy regulators.

“There has been a climate of controversy that’s been entertained in order to maybe endanger the right to be forgotten,” Falque-Pierrotin said in a phone interview with Bloomberg News July 25. “It has led some people to say that the right to be forgotten leads to censorship of the press, which is not the case” because only a link is removed from some search results.

Falque-Pierrotin’s comments come a day after regulators met with Google, Microsoft Corp. and Yahoo! Inc. on steps to implement the May court ruling on the “right to be forgotten.” Data-protection officials in Ireland and Germany have already complained about how Google, the largest search-engine company, has handled the issue.

Al Verney, a spokesman for the company in Brussels, declined to comment on the meeting and referred to a blog post by Google’s top lawyer this month that said the company was “doing our best to be transparent about removals” and was avoiding communicating anything specific about why it takes down a page because that could violate a person’s privacy rights.

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

To contact the editors responsible for this story: Michael Hytha at mhytha@bloomberg.net Andrew Dunn, Joe Schneider

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