Novartis, Tory Burch, Ashley Madison: Intellectual Property

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(Bloomberg) -- Novartis AG’s Sandoz unit may begin selling the first copy of Amgen Inc.’s cancer treatment Neupogen as soon as Sept. 2 after an appeals court ruling Tuesday rejected arguments that it failed to follow regulatory rules.

Sandoz didn’t violate the rules when applying to sell its drug Zarxio, the U.S. Court of Appeals for the Federal Circuit in Washington said in an opinion posted on its electronic docket. It’s the first time the appeals court specializing in patent law has applied rules for copying drugs derived from living organisms.

The case centered on interpreting a 2010 law for approving copies of biologic drugs, known as biosimilars. Sandoz in March was the first company to get U.S. Food and Drug Administration approval for such a drug, and the appeals court decision will help guide other drugmakers’ applications.

The appeals panel ordered the case sent back to the trial judge in San Francisco to consider whether Zarxio infringes an Amgen patent for use of filgrastim, Neupogen’s active ingredient.

Amgen can still ask the judge to halt the sales until the patent-infringement claim is decided. Neupogen was first approved by U.S. regulators in 1991. The company declined to comment on its next steps.

The case is Amgen Inc. v. Sandoz Inc., 15-1499, U.S. Court of Appeals for the Federal Circuit (Washington). The lower-court case is Amgen Inc. v. Sandoz Inc., 14-cv-04741, U.S. District Court, Northern District of California (San Francisco).

Patent Reform Legislation on Hold Until After Congress Returns

Legislation backed by some technology companies to curb nuisance patent suits will not be voted on in Congress this summer amid opposition from a conservative organization and demands for changes from some businesses.

“There is more work to be done,” House Majority Leader Kevin McCarthy, a California Republican, said Tuesday. He said no action will be taken on the bill, H.R. 9, before the month-long August recess.

John Cornyn of Texas, the Senate’s No. 2 Republican and a drafter of that chamber’s version, said a companion bill may face a vote “hopefully after August.”

Supporters of the legislation, including Google Inc., Cisco Systems Inc., Rackspace Hosting Inc. and retailers, had been hoping for passage as early as this week after a similar bill passed the previous session of Congress with overwhelming support.

Bills in both houses would require patent owners to provide more information on infringement claims and make the loser pay the winner’s legal fees. The goal is to make it cheaper and easier to fend off lawsuits in which owners of low-quality patents try to use the court system’s complexity to extract cash from businesses.

Universities and some patent-heavy tech companies such as Qualcomm Inc. warn that the provisions might be too onerous for small companies trying to protect products from copycats. Venture capital firms are split over the bill.

The drug and biotechnology industries are pushing for a separate provision that would insulate its members from reviews at the U.S. Patent and Trademark Office of already-issued patents. That procedure has been called a “death squad” due to its high rate of patent cancellations.

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Trademark

Tory Burch Award in Counterfeit Products Case Tops $41 Million

New York fashion house Tory Burch LLC was awarded damages and attorney fees in excess of $41 million in an infringement case against a New York-based jewelry company.

In a suit filed in federal court in May 2013, the company accused Lin & J International Inc. of making and selling knockoff clothing and jewelry bearing Tory Burch trademarks.

U.S. District Judge Denise Cote made the awards in light of what she called the defendant’s infringement fraud, altering of evidence, filing of “spurious counterclaims” and “substantial delay” of the litigation. She said the founder of the defendant company “repeatedly perjured herself -- not only before the court in this action” but also before the U.S. Patent and Trademark Office.

In a final judgment entered July 10, she awarded damages totaling $38.9 million, attorney fees of $2.29 million and pre-judgment interest of 3 percent. She also awarded litigation costs at an amount to be determined later and issued an order barring the manufacture and sale of any infringing products.

Additionally, she ordered the recall and destruction of all remaining infringing products and promotional material, telling the defendants they had to withdraw a pending trademark application.

The case is River Light V LP v. Lin & J International Inc., 1:13-cv-03669, U.S. District Court, Southern District of New York (Manhattan).

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Copyright

Ashley Madison Fights Hackers’ Data Breach With DMCA Notice

Operators of the Ashley Madison website that purports to help people have extra-marital affairs, is using the Digital Millennium Copyright Act to combat hackers who say they will post user information online, Fortune Magazine reported.

According to Fortune, the company has sent a notice under the DMCA to a site where the alleged hackers posted what they said was information about Ashley Madison users, demanding that user data be taken down.

Hackers have claimed that they have data on Ashley Madison’s 37 million users and will make it available to the public.

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Trade Secrets/Industrial Espionage

Macquarie Loses Appeal of U.S. Oil and Gas Trade Secrets Awards

Macquarie Group Ltd.’s Macquarie Bank unit failed to persuade a federal appeals court to reject a $2.3 million damages award in a trade secrets case.

The underlying case began in North Dakota state court when the Sydney-based banking group sued three out-of-state oil and gas companies and their owner, claiming trade secret misappropriation.

The defendants had the case moved to federal court, where Macquarie’s claims were dismissed, as were most of the oil companies’ counterclaims against the Australian company.

The court let stand a claim that Macquarie misappropriated trade secrets relating to the development potential of some oil and gas leases in North Dakota. The court awarded $2.3 million in damages and attorney fees. Macquarie appealed.

On July 17 the U.S. Court of Appeals for the Eighth Circuit said the lower court was correct in finding the Australian company used and disclosed trade secrets without the oil companies’ consent.

The appellate panel also agreed that the misappropriation was “willful and malicious” under North Dakota law. It affirmed the damages and fees totaling $2.3 million.

“We disagree with the ruling and are considering our options,” Macquarie said in an e-mailed statement, declining to elaborate further.

The lower court case is Macquarie Bank Ltd. v. Knickel, 3:08-cv-00048, U.S. District Court, District of North Dakota. The appeal is Macquarie Bank Ltd. v. LexMac Energy LP, 14-1684, U.S. Court of Appeals for the Eight Circuit.

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

To contact the editors responsible for this story: Heather Smith at hsmith26@bloomberg.net Andrew Dunn, Joe Schneider

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