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AstraZeneca, Microsoft, Adidas: Intellectual Property

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Dec. 20 (Bloomberg) -- AstraZeneca Plc lost an appeals court ruling yesterday that clears sales by South Korea’s Hanmi Pharm Co. of a competing copy of the heartburn treatment Nexium.

AstraZeneca’s patent on the drug is limited to a specifically named salt, the U.S. Court of Appeals for the Federal Circuit in Washington said in an opinion posted on its website. AstraZeneca had conceded that Hanmi’s version wouldn’t infringe the patent if the appeals court ruled in that way.

Nexium is AstraZeneca’s second-biggest product, with sales of $918 million in the third quarter. Hanmi and partner Amneal Pharmaceuticals LLC have their own version of esomeprazole, the active ingredient in Nexium. Pharmacists can’t automatically swap out the Hanmi version for Nexium as they would if a generic drug were on the market, London-based AstraZeneca said in a Dec. 17 statement.

Hanmi had been banned from selling the drug pending the appeal, although the Federal Circuit lifted that order and Hanmi entered the market earlier this week.

AstraZeneca researchers found that certain types of salt worked better, and thus limited the patent to a specific class of salts, the three-judge panel ruled. Nexium is the magnesium salt of esomeprazole, while Hanmi’s version is the strontium salt.

The case is AstraZeneca AB V. Hanmi USA, 13-1490, U.S. Court of Appeals for the Federal Circuit (Washington).

Microsoft, Amazon Propel Washington to Most Innovative State

The most innovative state in the U.S. isn’t California, home of Google Inc. and Stanford University, according to data compiled by Bloomberg. It’s Washington, where Microsoft Corp. and Amazon.com Inc. are based.

California came in second and Massachusetts third in the ranking, which looked at criteria such as the percentage of professionals in science, technology, engineering and mathematics, and the number of patents and public technology companies in each state.

Washington, known for rainy Seattle, abundant greenery and fleece-clad citizens, had the highest total score, not by topping any of the categories -- California is highest in patent activity and five states have more skilled workers -- but by placing near the top. That’s due to the large technology workforce, high productivity rates and plethora of public companies in aerospace, biotechnology and computer technology.

Technology enterprises make up 21 percent of Washington’s public companies, according to the ranking, while they comprise 29 percent in California and Massachusetts.

The state’s strong engineering roots go back to Boeing Co., the airplane maker that was based in Seattle until 2001 and still has extensive manufacturing operations in the Puget Sound area. The company attracted not just employees but also suppliers to the area, said Ed Lazowska, who holds the Bill and Melinda Gates chair in computer science and engineering at the University of Washington in Seattle.

Microsoft’s 1979 move to the suburbs of Seattle from Albuquerque, New Mexico, attracted computer engineers throughout the 1980s and 1990s, as did other area companies such as Aldus Corp., the maker of publishing-software PageMaker. Nintendo Co. chose Redmond, Washington, as its U.S. headquarters, pulling in game developers, Lazowska said.

Former employees of these companies have gone on to found local startups in and around Seattle. The availability of top engineers has attracted technology firms such as Google, Facebook Inc. and Salesforce.com Inc., which have set up large offices in the area.

Washington state “arguably owns the cloud,” said Lazowska, referring to computing services delivered via the Web that are offered by companies such as Amazon and Microsoft. The area also boasts a strong presence in segments such as data analytics and storage.

For more patent news, click here.

Trademarks

Adidas Sues More Than 100 Online Stores Over Fakes

Adidas AG, the German maker of athletic gear, filed a trademark suit in the U.S. against more than 100 defendants, named and unnamed, for offering fake versions of its products.

In a complaint filed in federal court in Fort Lauderdale, Florida, the company said its Adidas, Reebok and Mitchell & Ness trademarks are being used without authorization on counterfeit items sold on websites, most of which are run from China or “other foreign jurisdictions with lax trademark enforcement.”

The fakes include shoes, shorts, shirts, socks, hats, jackets and track suits, according to the Dec. 16 complaint. Herzogenaurach-based Adidas said the public is likely to assume falsely that a connection exists between the sellers and the maker of legitimate products.

Adidas asked the court to bar further unauthorized use of its marks by the defendants, and to order the transfer of the domain names for the sites accused of promoting and selling counterfeit goods.

The company also requested money damages of $2 million for each mark that is infringed and $100,000 each for pirated domain names, along with all profits from the alleged infringement. Adidas also requested awards of attorney fees and litigation costs.

The case is Adidas AG v. adidasjeremyscottitalia.eu, 13-cv-62712, U.S. District Court, Southern District of Florida (Fort Lauderdale).

Cummins Sues T-Shirt Sellers for Logo Infringement

Cummins Inc., the Indiana-based maker of truck engines, sued three named and 10 unnamed defendants for trademark infringement.

The company claims the defendants are making and selling T-shirts bearing its trademarks without permission. Ready-made shirts are sold in kiosks in Indiana-area shopping malls, and they are also printed on demand through the use of iron-on transfers.

Cummins owns trademark registrations for its logo for purposes including use with clothing, the company said in its Dec. 13 complaint.

The defendants are deliberately infringing the trademarks, according to Columbus, Indiana-based Cummins. The company said it’s being harmed and customers are being misled.

Cummins asked the court for an order for the seizure and destruction of all offending merchandise, including promotional material and the iron-on transfers. The company also requested a court order barring further infringement, and awards of money damages, attorney fees and litigation costs.

The company requested that the damages by tripled to punish the defendants’ for their actions, and also seeks to be awarded all the profits derived from the alleged infringement.

The case is Cummins Inc., v. T’shirt Factory, 1:13-cv-01972, U.S. District Court, Southern District of Indiana (Indianapolis).

For more trademark news, click here.

Copyrights

Boundless Dispute With Textbook Publishers Reaches Settlement

Boundless Learning Inc., a Boston-based online education company, has settled a copyright suit with three publishers of college textbooks, according to a Dec. 19 court filing.

Pearson Plc’s Person Education unit, Cengage Learning Inc. and Verlagsgruppe Georg von Holtzbrinck GmbH’s MacMillan Higher Education unit sued Boundless in federal court in New York in March 2012, complaining that the company’s educational material infringed their copyrights.

In their complaint, the publishers said Boundless “replacement textbooks” copied the “distinctive selection, arrangement and presentation” of their own books, along with “other original text, imagery and protected expression” of the publishers and their authors. The publishers said Boundless gets “an F in originality.”

They asked the court for awards of money damages, attorney fees and litigation costs, and for an order barring further infringement of their works.

Arial Diaz, founder of Boundless, said in a Dec. 17 blog posting that there is a confidential settlement in the case, in addition to a public judgment and court order. He said the company now has a “clear path” for building and marketing its textbook alternatives, “without treading on” the publishers’ rights.

In a consent judgment filed Dec. 19, Boundless agreed to pay $200,000 to each of the three academic publishers, and to halt any use of any infringing content. Any Boundless versions of the disputed textbooks are to be removed from Boundless’s web and data servers and destroyed within 90 days of the court order.

The case is Pearson Education Inc. v. Boundless Learning Inc., 1:12-cv-01986, U.S. District Court, Southern District of New York (Manhattan).

NFL Says Photographers’ Copyright Suit Really About Royalties

The National Football League asked a federal court to throw out a copyright-infringement lawsuit brought by seven freelance sports photographers over the use of their work.

The NFL said in a filing on Dec. 18 in federal court in New York that the photographers failed to state a claim under which the case could proceed. The league said that “each and every” challenged use of the photos by the NFL was fully within the scope of its agreements with the Associated Press and Getty Images Inc.

The photographers say that the league, together with Getty and AP, were making unauthorized and uncompensated use of their pictures. According to the complaint, filed Oct. 21, the photographers got press credentials from the NFL under “speculation agreements” instead of being paid flat fees.

The photographers said that under these agreements, they retained ownership of the copyrights to their pictures and make money by licensing them. The suit pertains only to photos created under the agreement and doesn’t involve any they may have shot under day-rate or work-for-hire agreements.

Even though they licensed the photos through third-party licensing agents -- at first NFL Photos, later Getty Images and now AP -- the photographers said they never transferred the copyrights.

Getty and AP received the “broad right” to permit the NFL to use the photos, the league said in its filing.

The photographers had argued that the league’s license from AP was invalid and couldn’t be applied retroactively.

The league said such retroactive licenses are “entirely permissible and valid.” It also argued that the suit was really a claim for unpaid royalties, and that this can’t be the basis for a copyright-infringement suit.

The photographers said that licensing agreements notwithstanding, the use of their photos without permission is infringement. The pictures are being sold and used during NFL broadcasts and on the league’s websites without authorization, they said.

The photographers asked the court to bar unauthorized use of the photos, and to order the destruction of all infringing content. They’re also seeking money damages, attorney fees and litigation costs.

The case is Spinelli v. National Football League, 13-cv-07398, U.S. District Court, Southern District of New York (Manhattan).

Choice Foodservices Sues Competitor Nob Hill Over Website

Choice Foodservices Inc., a provider of pre-ordered lunches for schools and other institutions, sued a competitor and a website developer for copyright infringement.

The suit was filed Dec. 18 in federal court in San Francisco, against Nob Hill Catering Inc., of San Carlos, California, and Redwood City, California-based Elastic Teams LLC.

The company accuses Nob Hill of attempting to lure away its customers by using a copycat Web design and telling school administrators that Nob Hill’s new Lunchmaster website would look “just like” Choice Foodservices’.

Nob Hill took Choice Foodservices’ website to Elastic Teams and instructed the developer to copy it, according to court papers.

Choice Foodservices said it sent Nob Hill a cease-and-desist notice and filed an order under the Digital Millennium Copyright Act with Amazon.com Inc., which provided Web hosting services, asking that the site be taken down. Amazon is not a party to the litigation.

Choice Foodservices is seeking money damages, any profit from the alleged infringement, attorney fees and litigation costs.

Neither Nob Hill nor Elastic Teams responded immediately to e-mailed requests for comment in the lawsuit.

The case is Choice Foodservices Inc. v. Nob Hill Catering Inc., 13-cv-05872, U.S. District Court, Northern District of California (San Francisco).

For more copyright news, click here.

Trade Secrets/Industrial Espionage

Iowa Governor Calls for More Security After Seed Theft Charges

Following news of the arrest last week for trade secret theft of a Chinese national who had attended a state dinner in Iowa, Governor Terry Branstad said security at such events will be tightened, the Sioux City Journal reported.

The man arrested by federal authorities was charged with conspiracy to steal trade secrets from DuPont Co.’s DuPont Pioneer unit and Monsanto Co., the Journal reported.

Branstad said 1,600 people attended the dinner, and there’s no way state authorities would have been able to screen the guests well enough to detect everyone with a questionable background, according to the Journal.

The governor, who frequently visits China, said news of the plot to steal seed corn and take its secrets abroad could present future challenges to U.S.-China relations, according to the Journal.

To contact the reporter on this story: Victoria Slind-Flor in San Francisco at vslindflor@bloomberg.net

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