K-V Pharmaceutical, Apple, Huawei: Intellectual Property

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Oct. 25 (Bloomberg) -- K-V Pharmaceutical Co., the drugmaker that blamed lax federal enforcement for its bankruptcy this year, filed a U.S. trade complaint accusing more than 40 compounding pharmacies of infringing its property rights.

New England Compounding Pharmacy Inc., the company linked to the fungal meningitis outbreak, was among those named in the complaint yesterday at the U.S. International Trade Commission in Washington. K-V claimed the companies are violating exclusivity rules for the active ingredient in Makena, a drug used to prevent premature births. The Bridgeton, Missouri-based company is seeking to block imports of the medicine.

K-V has made previous attempts to protect its market share from compounders, which are lightly regulated pharmacies that can make versions of brand-name drugs as long as they stick to individual prescriptions unavailable through regular avenues. A federal judge dismissed a lawsuit from K-V in September against the Food and Drug Administration after the agency refused to block compounding pharmacies that made versions of Makena.

The FDA caused “irreparable harm,” K-V said in its filing, by letting pharmacies sell cheaper versions of the drug, which has the active ingredient hydroxyprogesterone caproate.

Tony Herrling, a spokesman for K-V at Brainerd Communicators in New York, didn’t immediately respond to a phone call seeking comment.

The practices and oversight of compounding pharmacies have been thrust into the spotlight this year as a deadly fungal meningitis outbreak is being linked to tainted steroid shots traced back to New England Compounding Pharmacy, or NECC. The Framingham, Massachusetts-based company, which suspended operations, has been accused by state investigators of operating on a larger scale than would normally be allowed.

K-V, whose case isn’t directly linked to the meningitis infections, cited the outbreak in its complaint as an example of instances where compounding copies of FDA-approved drugs could harm public health.

The company had attempted to get the FDA to stop compounding pharmacies from selling versions of Makena by producing testing data of its own that called into question the purity and potency of compounded products. The FDA conducted its own testing and said in June that three of 26 samples failed the standard for potency and no major safety issues were identified.

The FDA said it has discretion to enforce laws against pharmacies to keep them from making versions of approved drugs.

The ITC is a quasi-judicial agency in Washington that investigates allegations of unfair trade practices. While the agency can’t award monetary damages like a regular court, it does have the power to block imports of products that infringe U.S. patents or other intellectual property rights.

Apple Loses Dutch Patent Case Against Samsung on Touch Screen

Apple Inc. lost a Dutch court ruling in a patent lawsuit over Samsung Electronics Co.’s Galaxy handsets.

Samsung’s Galaxy products using certain versions of Google Inc.’s Android operating system don’t infringe Apple patents concerning so-called multitouch flags, Judge Peter Blok said in a ruling yesterday in The Hague, Netherlands. Apple claims Galaxy smartphones and tablets infringe a patent for technology that interprets finger activity on touch screens.

The ruling is the latest in a long line of disputes in courts across the globe as rivals including HTC Corp., Apple and Samsung fight for dominance in the smart phone and tablet-computer markets. The Hague-based court said yesterday’s verdict follows similar rulings in the U.K. and Germany on the touch-screen patents.

Apple, based in Cupertino, California, was also ordered to pay Samsung about 325,000 euros ($420,000) in costs, the judge said. Steve Park, a spokesman for Apple in Seoul, declined to comment.

The court started a new round of trials between Apple and Samsung in the Netherlands in September, concerning multiple patents and proceedings as Apple seeks a ban on Galaxy devices in the country, where the Suwon, South Korea-based company has its distribution center for Europe. The companies compete in a global smart phone market that grew 62 percent to $219 billion last year, according to data compiled by Bloomberg Industries.

Samsung Infringes Four Apple Patents, U.S. Trade Judge Says

Samsung Electronics Co. infringes four Apple Inc. patents, including one for the design of the iPhone and one for touch-screen technology co-invented by Steve Jobs, a U.S. trade judge said in a decision that gives Apple another legal victory over its biggest smartphone competitor.

Two other patents, including one for the exterior shape of the iPhone, weren’t infringed, U.S. International Trade Commission Judge Thomas Pender said in a notice on the agency’s website. The judge’s findings are subject to review by the full commission, which has the power to stop goods that infringe U.S. patents at the border.

The agency has twice before forced companies to alter foreign-made smartphones if they wanted to keep selling them in the U.S. HTC Corp. phones were held up at the border in May after Apple won a trade case, and the Cupertino, California-based company has an enforcement action pending that accuses HTC of violating the trade agency’s exclusion order. Google Inc.’s Motorola Mobility unit was ordered to remove a feature to coordinate schedules from its phones after they were found to infringe a Microsoft Corp. patent.

The case in yesterday’s ruling is one of more than three dozen between the makers of about half of the world’s smartphones, who have run up hundreds of millions of dollars in legal bills. Samsung, which lost a $1 billion jury verdict in August against Apple, is challenging a different ITC judge’s findings that its own patents weren’t infringed by Apple.

The ITC, as an independent agency under the executive branch, isn’t bound by the legal standard used in that decision. Its job is to protect U.S. markets from unfair trade practices, including patent infringement, and its only power lies in the ability to keep products from entering the U.S.

Samsung has submitted documents to Pender about a way to change its designs to address the patent dispute, though the papers are confidential so it isn’t known what changes to its phones are involved. Apple is seeking to block U.S. imports of more than a dozen models of Samsung phones and tablets, including Galaxy Tab, Galaxy Nexus, Galaxy SII, and Galaxy Note.

The Apple case against Samsung is In the Matter of Electronic Digital Media Devices, 337-796, and Samsung’s case is In the Matter of Electronic Devices, Including Wireless Communication Devices, Portable Music and Data Processing Devices, and Tablet Computers, 337-794, both U.S. International Trade Commission (Washington).

For more patent news, click here.


UConn Sends Cease-and-Desist Letter Over Husky-Dog Logo Use

The University of Connecticut sent a cease and desist letter to a public school saying its Husky-dog logo too closely resembles the university’s, the San Francisco Chronicle reported.

Although the Morgan School of Clinton, Connecticut, has used a Husky-dog mascot for almost 80 years, the university has asked that it be redesigned, according to the Chronicle.

Michael Enright, a spokesman for the university’s athletic program, said no trademark-infringement case will be filed and the school will have some time to remove the objectionable logo from its uniforms and other uses, the newspaper reported.

After Jack Cross, superintendent of Clinton schools, said it could cost as much as $20,000 to remove the logo from a new artificial turf field, Enright responded that it doesn’t need to be changed until next time the turf is replaced, according to the Chronicle.

For more trademark news, click here.


AMSC’s Copyright Case Against Sinovel to Be Heard Oct. 26

American Superconductor Corp., a U.S. maker of wind-turbine components, said in a statement yesterday that its copyright case against Sinovel Wind Group Co. will be heard Oct. 26 by China’s Supreme People’s Court.

The case before China’s high court is Sinovel’s appeal of a lower court’s refusal to dismiss the case. Sinovel, which was formerly AMSC’s largest customer, is the target of four separate cases brought by the wind-turbine company. A total of more than $1.2 billion in damages is being sought.

In the copyright case, Denvens, Massachusetts-based AMSC is seeking both $6 million in damages and a court order barring further infringement of its intellectual property.

Underlying this case is the action of Dejan Karabasevic, a former AMSC employee who pleaded guilty in 2011 to trade secret misappropriation. Karabasevic, a Serbian software engineer, acknowledged that he used source code from an AMSC server to develop a program to run Sinovel’s turbines.

In June 2011, AMSC technicians discovered the purloined software in a Sinovel wind turbine in the Gobi desert.

AMSC, which was founded by four professors from the Massachusetts Institute of Technology, is “eager to complete our hearing on Oct. 26,” and is hopeful that the Chinese high court will “demonstrate that it is protecting the interests of all companies -- both domestic and foreign,” John Powell, AMSC vice president and general counsel, said in his company’s statement.

For more copyright news, click here.

Trade Secrets/Industrial Espionage

Huawei Says U.S. Concerns ‘Distorted’ as Australia Plans Blocked

Huawei Technologies Co., China’s largest maker of telephone equipment, said concerns about security threats from the company are “distorted” and offered Australian authorities access to its code and equipment.

The company is willing to offer “complete and unrestricted access” as part of its proposal to create a cyber-evaluation center, according to John Lord, chairman of Huawei’s Australian unit. All materials used in major Australian networks can be tested at the center, he said.

“Reading many media reports, you would get the impression that Huawei is in some sort of war with Australian security agencies -- we are not,” Lord said, according to the e-mailed text of a speech at the National Press Club in Canberra. “We sincerely hope that in Australia, we do not allow sober debate on cyber security to become distorted the way it has in the U.S.”

U.S. lawmakers last month urged domestic companies to steer clear of Huawei and fellow Chinese company ZTE Corp., citing concerns that the Chinese government could install malicious hardware or software in U.S. telecommunications networks. In March, the Australian government said Huawei was banned from bidding on a national broadband network because of “national interests.”

The U.S. report is a “missed opportunity to develop methods of countering” common security threats, Lord said yesterday. “This is why we are proposing a cyber-security evaluation center, where all equipment implemented into major or critical Australian networks can be subjected to the same thorough security assessment.”

Chinese companies like Huawei have been labeled as more willing to steal intellectual property than produce it, Lord said. In reality, Huawei was listed in the top five companies for new patent applications by the World Intellectual Property Organization and is out-pacing global rivals including Apple Inc., Samsung Electronics Co., Microsoft Corp. and General Electric Co., he said.

In Australia, the company is continuing to expand its business outside of the national broadband network, he said. It has increased staff to more than 900 from 200 three years ago, Lord said.

“Huawei is here in Australia for the long-haul,” he said. “Australia must reap the benefits offered by the globalized information and communication technology industry and the innovation pouring out of Asia and China. As we enter the Asian Century, anything less would risk Australia being left behind.”

Ex-BSkyB Employee Leaked Company Data, U.K. High Court Rules

Customer data belonging to British Sky Broadcasting Group Plc was leaked to a television repair business, the U.K.’s High Court of Justice ruled.

Judge Sir William Blackwell said that he was “unpersuaded” by arguments that the data was transmitted innocently to the repair business, which then went to solicit BSkyB customers in advance of the expiration of their warranties.

He said that the pay television provider was due damages, and that the case should also be referred to government authorities for possible criminal proceedings against those who leaked the data and gave misleading statements to the court about their actions.

The case is Between British Sky Broadcasting Group Plc and Digital Satellite Warranty Cover Ltd., [2012] EWHC 2642 (Ch), England and Wales High Court (Chancery Division).

To contact the reporter on this story: Victoria Slind-Flor in Oakland, California, at vslindflor@bloomberg.net.

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