July 12 (Bloomberg) -- Apple Inc., Microsoft Corp. and their partners won court permission to buy the patent portfolio of Nortel Networks Corp. for $4.5 billion. The group outbid Google Inc. in the biggest patent auction in history, covering more than 6,000 patents and applications related to wireless and Internet technology.
In a joint hearing, U.S. Bankruptcy Judge Kevin Gross in Wilmington, Delaware, and Ontario Superior Court Judge Geoffrey Morawetz in Toronto approved the sale after the last minor objection to the sale was resolved.
“This truly is a ‘wow’ transaction,” said David H. Botter, an attorney for the main committee of Nortel’s unsecured U.S. creditors.
After Nortel filed for bankruptcy in 2009, it began selling its businesses, raising about $3 billion before the June patent auction. The patent portfolio was the last major asset Nortel had to sell and will boost creditor recoveries.
The winning group includes competitors-turned-partners of Apple, such as Microsoft, Research In Motion Ltd., Sony Corp., Ericsson AB and EMC Corp., Nortel said in a statement. Those companies bid under the name Rockstar Bidco LP.
The auction, held June 27 to June 30, involved 19 rounds of bidding and began with an opening bid from Intel Corp., company attorney Lisa Schweitzer said in court. Before the auction, Google signed a contract to be the so-called stalking-horse bidder with a guaranteed offer of $900 million.
That offer, which entitles the Internet search company to a breakup fee of $25 million plus expenses, was exceeded by Intel when the auction started and then followed by more offers, some in writing, some made orally, Schweitzer said.
Three companies and two groups competed in the first round of bidding: Apple, Google, Intel, the initial Rockstar group that didn’t include Apple, and Norpax LLC, a group led by patent-buying company RPX Corp., according to court records filed in Toronto.
The minimum increase in the bids rose from $5 million to $100 million after the second round of bids. After five rounds of bidding, Apple joined Microsoft as part of the Rockstar bid and Intel dropped out, according to Canadian court records.
Google and Intel joined forces after eight rounds of bidding and together stayed in the auction until the 19th round, which was won by the Rockstar group.
The bankruptcy case is Nortel Networks Inc., 09-10138, U.S. Bankruptcy Court, District of Delaware (Wilmington).
India, China Able to Win Drug Patent Flexibility, Minister Says
Brazil, Russia, India, China and South Africa acting as a group are better able to obtain flexibility in patent enforcement so that poorer countries have more access to treatments for AIDS, malaria and other diseases, said India’s health minister.
“There are countries that would like patents to stay for decades and decades, meaning the poor will have no access to these medicines,” India’s Minister of Health and Family Welfare Ghulam Nabi Azad said in an interview in Beijing yesterday. “But there are some flexibilities when there is an acute public health requirement. We want those flexibilities to be there in case of new drug innovations.”
Azad was in the Chinese capital for a meeting of health ministers from the so-called BRICS grouping of nations, which today issued a statement supporting “innovative mechanisms” for transferring intellectual property rights so that cheaper drugs can be supplied to low and middle income countries. Yesterday’s gathering was the first by the five health ministers, who said they may meet again in September.
China said last month it may seek compulsory licensing for an AIDS drug made by Gilead Sciences Inc. Compulsory licensing is when a government allows someone else to produce a patented product without the consent of the patent owner, according to the World Trade Organization. It is one of the flexibilities allowed under WTO rules that took effect in 1995.
Under compulsory licensing, the generic copy of a drug is mainly produced for the domestic market and not for export, according to the WTO.
“We should be able to have a more flexible method, so hi-tech developments in more developed countries can be made available to lower income countries,” Tatyana Golikova, Russia’s health and social development minister, said at a briefing held after the meeting.
The ministers, in their joint statement, said they had agreed to establish a working group to discuss specific proposals for a possible patent transfer mechanism.
In addition to India’s Azad and Russia’s Golikova, the meeting was also attended by China’s Chen Zhu, Brazil’s Alexandre Padilha and South Africa’s Aaron Motsoaledi. World Health Organization Director General Margaret Chan and Michel Sidibé, executive director of the United Nations’ UNAIDS program, also attended.
Apple Files Second Trade Complaint Against HTC Over Devices
Apple Inc. filed a second patent-infringement complaint against HTC Corp. at the U.S. International Trade Commission, seeking to block imports of “personal electronic devices” by the Taiwanese phonemaker.
The complaint, which wasn’t immediately available for viewing, was filed July 8, according to a notice posted yesterday on the ITC’s website. The notice didn’t elaborate on the nature of the complaint.
Apple has been using the trade commission, which completes investigations in 15 to 18 months and has the power to keep products out of the U.S. market, to pursue makers of mobile devices that run Google Inc.’s Android operating system. The complaint is the second lodged by Apple against HTC in the past 16 months and comes a week after the filing of a patent case against Samsung Electronics Co.
“HTC is dismayed that Apple has resorted to competition in the courts rather than the marketplace,” said Grace Lei, HTC’s general counsel. “HTC continues to vehemently deny all of Apple’s past and present claims against it and will continue to protect and defend its own intellectual property as it has already done this year.”
Taoyuan, Taiwan-based HTC agreed last week to buy S3 Graphics Co. for $300 million after the maker of video-game graphics chips won an infringement ruling at the trade agency against Cupertino, California-based Apple. HTC also has its own patent complaint against Apple at the commission, with findings scheduled to be released Sept. 16.
A trade commission judge is scheduled to issue a decision in Apple’s first case against HTC on Aug. 5. Those findings are subject to review by the full commission.
Apple, which has accused competitors of “widespread imitation,” also has patent battles at the trade agency with Samsung Electronics and Motorola Mobility Holdings Inc., both makers of Android-based phones. The Samsung complaint targets both the Galaxy phone and Galaxy tablet computer.
In March, HTC released its first tablet device in the U.S. to rival Apple’s iPad and Samsung’s Galaxy Tab. The device, called Flyer, has a 7-inch screen and uses Android, while its second tablet, called EVO View 4G, offers faster connections over Sprint Nextel Corp.’s fourth-generation network.
Android is the most popular mobile-device operating system in the U.S., accounting for 38 percent of the market in the three months ended in May, according to Reston, Virginia-based researcher ComScore Inc. Apple’s iOS, used in the iPad and iPhone, made up 27 percent of the market.
HTC on July 6 reported sales and net income that surpassed analyst expectations for the second-quarter, ending June 30, after it released models with faster download speeds and better displays. Both HTC and Apple more than doubled revenue from mobile phones in the March quarter from a year earlier as they race to offer their products in more markets globally.
Seeking to expand its patent portfolio, HTC said in April it paid $75 million for wireless communications patents from ADC Telecommunications Inc. According to the U.S. Patent and Trademark Office’s database, 171 patents have been assigned to HTC.
Apple, once best known for its Mac computers, now relies on its iPhone for about 50 percent of sales and the iPad tablet for 12 percent, according to first-quarter figures compiled by Bloomberg.
The commission issued a notice yesterday seeking information on any public issues raised by the complaint. Such requests have become standard, to allow the agency to determine if an exclusion order should be granted, should Apple win the case.
The new complaint is In the Matter of Portable Electronic Devices and Related Software, Complaint No. 2828, U.S. International Trade Commission (Washington). Apple’s earlier case against HTC is In the Matter of Certain Personal Data and Mobile Communications Devices and Related Software, and the HTC case against Apple is In the Matter of Portable Electronic Devices, 337-721, both ITC.
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Celgene Sued by Research Chemical Maker Over Trademark Claims
Celgene Corp., a maker of anti-cancer and anti-inflammatory drugs, was sued by a Massachusetts company that provides chemicals to researchers.
According to the complaint filed July 8 in federal court in Boston, PKC Pharmaceuticals Inc. is seeking a court declaration that it doesn’t infringe Summit, New Jersey-based Celgene’s Revlimid trademarks.
PKC, based in Woburn, Massachusetts, makes and sells chemical compounds for use in non-human and preclinical pharmaceutical research. The company said in its court papers it doesn’t sell drug products or drug substances, and that the chemical compounds it produces aren’t intended for human consumption.
Under the guidelines of the U.S. Food and Drug Administration, companies such as PKC don’t have to manufacture compounds to the same stringent standards required of those who make drugs for human consumption, according to court papers.
PKC says it strictly controls sales of its compounds to ensure they are used only for research and not for human subjects. The company’s catalog contains a broad range of information about the compounds, including which drug products contain the substance with the same chemical structure as the research compounds it sells.
One of the compounds LC sells is lenalidomide powder. In its catalog, PKC lists the names of the FDA-approved drug products that contain lenalidomide as an active ingredient, the company said in court papers.
On March 28 Celgene sued LC in federal court in Newark, New Jersey, alleging the chemical company was infringing its trademark. In that complaint, Celgene warned that the company’s sale of lenalidomide powder was unauthorized, infringed the Revlimid trademarks and that its sale of the product “could result in serious health consequences for consumers and could have catastrophic effects.”
That case is Celgene Corp. v. PKC Pharmaceuticals Inc., 2:11-cv-01697-WJM-MF, U.S. District Court, District of New Jersey (Newark).
PKC said its listing the Revlimid name in the catalog is “in keeping with its practices for the other research compounds it sells,” and is “a common industry practice.”
It asked the court to declare it’s not infringing the Revlimid marks, and to order Celgene to quit asserting that PKC does infringe. It also seeks an award of attorney fees.
The company is represented by Ieuan G. Mahoney, Elizabeth R. Burkhard and Rory Foster of New York’s Holland & Knight LLP.
The case is PKC Pharmaceuticals Inc., v. Celgene Corp., 1:11-cv-11211-WGY, U.S. District Court, District of Massachusetts.
Casey Anthony’s Parents’ Lawyers Seeks ‘Caylee Anthony’ Mark
Mark R. Lippman, the lawyer who represented the parents of Casey Anthony, has filed an application with the U.S. Patent and Trademark Office to register the name of Anthony’s murdered daughter as a trademark.
According to the database of the U.S. Patent and Trademark Office, Lippman’s application to register “Caylee Anthony” as a trademark was filed May 11. He said in his filing that he wants to use the mark on T-shirts.
Casey Anthony was acquitted July 5 of murdering her daughter. Lippman, of the Lippman Law Offices PA of Orlando, Florida, said Anthony has refused all contact with her parents following the verdict, the International Business Times reported.
Russian Newspaper Distributors Turn Back Trademark Challenge
The Los Angeles-based publishers of a Russian-language newspaper has defeated a trademark-infringement case brought by the publisher of a similarly named newspaper in New York.
Oleg Pogrebnoy sued the Russian Newspaper Distributors Inc., in federal court in Los Angeles in November 2010, claiming he was the rightful owner of the name of the newspaper. The name, written in the Cyrillic alphabet, is translated as “Kurier” in English. He also sought cancellation of the publishers’ Cyrillic-alphabet “Kurier” trademark.
U.S. District Judge Percy Anderson, in a June 28 order, said Pogrebnoy failed to prove he’d ever owned the Kurier name.
Pogrebnoy hadn’t provided an explanation for the absence of the written agreement “or any facts concerning his efforts to locate a copy of the agreement, which he claimed in his deposition was at his parents’ house” in the Ukraine, Judge Anderson said in his order dismissing the case on a motion from Russian Newspaper Distributors
The judge ordered that Pogrebnoy pay Russian Newspaper Distributors’ attorney fees.
The case is Oleb Pogrebnoy v. Russian Newspaper Distribution, 2:10-cv-08532-PA, U.S. District Court, Central District of California (Los Angeles).
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Gateway Gaming Claims Slot-Machine Game Copyrights Infringed
Gateway Gaming LLC of Piedmont, South Carolina, a creator of games for casino slot machines, sued a Texas-based competitor for copyright infringement.
Game Systems Inc., of Sansom Park, Texas, is accused of marketing and selling games that infringe Gateway’s copyrights on its “Lucky Duck,” “Mother-in-Law,” “Stars and Stripes,” “Mayan Lost City,” “Texas Gold” and “Cool 7’s” games.
Gateway said it began employing its games in 2007, and that Game Systems is marketing and selling infringing games “Bucks Ducks,” “Jennie in the Bottle,” “All America,” “Mayan Gold,” “Wild Cat Gold” and “Arctic 7’s.”
The allegedly infringing games contain copies of the icons, graphics, images and screens covered by Gateway’s copyrights, the company said in its pleadings. These have been deliberately copied without permission, the company said.
Gateway asked the court for both temporary and permanent orders barring the sale and distribution of the infringing products. Additionally, it seeks money damages, and extra damages to punish Game Systems for its actions.
The company also asked for an order for destruction of all infringing products and for awards of profits derived from the alleged infringement, litigation costs and attorney fees.
Game Systems didn’t respond immediately to an e-mailed request for comment.
Gateway is represented by Neil C. Jones and Nichole Andrighetti of Nelson Mullins Riley & Scarborough LLP of Columbia, South Carolina, and Wesley Hill of the Ward & Smith Law Firm of Longview, Texas.
The case is Gateway Gaming LLC v. Game Systems Inc., 4:11-cv-00432-RAS-DDB, U.S. District Court, Eastern District of Texas (Sherman).
Infringement Claims Providing Rioters’ Identification to Police
Making copyright-infringement claims against those who posted videos of the riots in Vancouver following the Vancouver Canucks loss of the final game in the Stanley Cup playoffs has backfired against the claimants, the CKNW radio station said on its website.
Dave Texeira who uploaded a video of a man being hit in the crotch by a police stun gun grenade said the man in the video claimed copyright infringement and demanded that Google Inc.’s YouTube video-sharing site remove it, according to CKNW.
He told CKNW that the copyright complaint contains identifying information about the man in the video, and that he plans to turn it over to the police.
Texeira created a website to help identify the rioters, and said that YouTube had been taking down some of his videos of the riots following infringement claims by people who appeared in them, CKNW reported.
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To contact the reporter on this story: Victoria Slind-Flor in Oakland, California, at firstname.lastname@example.org.
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