The U.S. Supreme Court, rebuffing calls to scrutinize “pay for delay” drug settlements, refused to revive a suit accusing Bayer AG of paying almost $400 million to forestall competition to its Cipro antibiotic.
The court, without comment, rejected an appeal yesterday from drugstore chains that sought to press an antitrust suit over a 1997 settlement between Bayer and Barr Laboratories Inc., now part of Teva Pharmaceutical Industries Ltd. Under the accord, Bayer paid Barr $398 million, while Barr dropped its challenge to a Bayer patent and agreed not to sell a generic version of Cipro until June 2003.
Opponents say such settlements are rampant in the drug industry, costing consumers $3.5 billion a year, according to the Federal Trade Commission, which has led the criticism. Consumer advocates and 32 states joined the pharmacies and a drug wholesaler in urging Supreme Court review.
The group includes two of the three largest U.S. drugstore companies, CVS Caremark Corp. and Rite-Aid Corp.
The drugstores faced an especially high hurdle in seeking a Supreme Court hearing because two justices, Elena Kagan and Sonia Sotomayor, didn’t take part in the court’s consideration of the case. The court accepts an appeal only when four justices vote to hear a case.
Drugmakers say the settlements are a legitimate way of resolving patent disputes between brand-name manufacturers and would-be generic rivals. In the Cipro case, Bayer said the accord benefited consumers by letting Barr sell its version six months before the drug was scheduled to lose patent protection in December 2003. The company is based in Leverkusen, Germany.
Cipro treats conditions caused by bacteria including anthrax, conjunctivitis and pneumonia.
The high court has now turned away challenges to a “pay for delay” settlement on six occasions, including an appeal in a second case involving the Cipro settlement in 2009.
Since then, the government has taken a harder line toward the accords, with the Justice Department’s antitrust division arguing that courts have been too lenient in assessing them. The Justice Department filed a brief backing the plaintiffs in the Cipro case at a federal appeals court in New York.
CVS and Rite Aid said the payments made by Bayer suggest that its patent was of questionable validity. Barr had won a preliminary round in the litigation and the case was heading toward trial before the companies settled it.
Bayer countered that it won every other challenge to its Cipro patent, including a Mylan Inc. lawsuit that led to a federal appeals court ruling upholding the patent in 2002.
The case is Louisiana Wholesale Drug v. Bayer, 10-762.
DRB-Hicom to Hold IP Rights in $2.5 Billion Defense Contract
DRB-Hicom Bhd., a Malaysian automotive assembler, said it won a 7.55 billion-ringgit ($2.5 billion) contract for 257 armored vehicles from the Southeast Asian nation’s government.
The Selangor-based company will design, develop and manufacture them over the next seven years, it said in an exchange filing. This will be the first time DRB will have owned intellectual property rights for such vehicles and their sub-systems, it said.
The project is part of a push by Malaysia’s government to encourage industry to move up the value chain as the country aims to achieve high-income status by 2020. The project will see advanced defense technologies transferred from DRB’s partners to local manufacturers and vendors, the company said.
“This contract will spur and enhance the growth of the Malaysian economy,” said DRB. “Many new local original equipment manufacturers will be created through direct and indirect foreign investments during the duration of the contract.”
It will increase employment for the local defense industry and contribute “positively” to future earnings, DRB said.
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Ajinomoto Registers Trademark for Pepper-Based Diet Aid
Ajinomoto Co., the Japanese company best known for its “Accent” brand of monosodium glutamate, registered a trademark for a dietary supplement made from sweet peppers.
The Tokyo-based company registered “Capsiate Natura” as a U.S. trademark for the product, which is used as a diet aid, Ajinomoto said in a statement yesterday.
The product boosts the body’s metabolism without a burning sensation or other after-effects, according to the statement.
‘Baby Gaga’ Breast-Milk Ice Cream Accused of Infringement
Producers of breast-milk ice cream in the U.K. have been given until March 9 to change the name of their product from “Baby Gaga,” Agence France-Presse reported.
Lawyers representing U.S. pop singer Lady Gaga have sent London’s Icecreamists Ltd. a cease-and-desist letter, according to AFP.
In the letter, they accuse the ice-cream maker of infringing the singer’s marks in a manner “deliberately provocative and, to many people, nausea-inducing,” the French wire service reported.
The dispute may be academic as local authorities have seized the ice cream to run a series of health and safety checks, AFP reported.
Louisiana Brewery Backs Down on Enforcing ‘Pub Crawl’ Trademark
Abita Brewing Co., a Louisiana microbrewery, has backed down from attempts to enforce its Louisiana state trademark for the term “pub crawl,” New Orleans Times-Picayune reported.
The Abita Springs, Louisiana-based brewery had sent a cease-and-desist letter to a Baton Rouge event promoter demanding he quit using the term for a monthly bar tour he leads to benefit the New Orleans Council for Community and Justice, according to the Times-Picayune.
After fans used Facebook Inc.’s social media site to castigate the brewery and threaten to boycott its products, the brewery backed down, the newspaper reported.
David Blossman, president of the brewery, wrote a letter to the fans on the Abita Brewery Facebook page that the phrase was registered only “to stop the big breweries from copying our success,” and went on to say: “we’ve heard from you today on this trademark issue and we agree your respect is far more important to us than two little words,” The Times-Picayune reported.
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Lucasfilm’s ‘Stormtrooper’ Helmet Copyright Case Argued in U.K.
Lucasfilm Ltd., George Lucas’s film production company, is arguing before the U.K.’s Supreme Court that the “Stormtrooper” helmets featured in the “Star Wars” films are entitled to copyright protection, Sky News reported.
Andrew Ainsworth, the U.K. prop designer who created the original helmets, has claimed he has the right to make and sell replicas, according to Sky News.
Lucasfilm has previously successfully sued Ainsworth for copyright infringement in the U.S, winning $20 million in damages, Sky News reported.
Yesterday, in the first of three days of arguments before the high court, the focus of the discussion was the difference between a sculpture and an industrial prop, according to Sky News.
Music Publishers Drop Copyright Claims Against Lime Wire
Music publishers voluntarily dropped their lawsuit against Lime Wire LLC, which was found liable last year for inducing copyright infringement in a legal action by record labels, according to a filing yesterday in Manhattan federal court. Both sides said they agreed to dismiss all claims.
The infringement suit was filed in June 2010. The complaint had accused Lime Wire of copying the publishers’ works “on a massive scale and profiting greatly from their illegal activities.” The publishers characterized Lime Wire’s actions as “brazen infringement.”
The case is EMI April Music Inc. v. Lime Wire LLC, 1:10-cv-04695-KMW-DCF, U.S. District Court, Southern District of New York (Manhattan).
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