Philip Brooks' Patent Infringement Updates

Astellas Pharma Sues Toyo Pharmar and Aska Pharmaceutical for Patent Infringement

Japan's Corporate News Network reported today:

Astellas Pharma announced on November 29 that it has filed a lawsuit against Toyo Pharmar and  Aska Pharmaceutical for infringement on Astellas' patents on tamsulosin hydrochloride in the Tokyo District Court. The suit seeks monetary damages and an injunction of infringing products, namely Restream Capsules 0.1mg/0.2mg currently marketed by the two respective companies.

Astellas Pharma claims that it holds a formulation patent of tamsulosin hydrochloride that expires in March 2006. Tamsulosin hydrochloride is a selective alpha-1 blocker indicated for the treatment of urinary disturbance.

Currently, Astellas Pharma is marketing a sustained-release formation of tamsulosin hydrochloride under the trade name of Harnal 0.1mg/0.2mg Capsules.

Supreme Court to Hear eBay Patent Case

Michael Bazeley of Mercury News reported today in the San Luis Obispo Tribune:

The U.S. Supreme Court has agreed to hear a patent dispute between online auctioneer eBay and a Virginia inventor, setting the stage for a ruling next summer that could reverberate through the technology, pharmaceutical and other industries.

The court granted eBay's request to review the original ruling in the case, in which a district court judge concluded that eBay's ``Buy It Now'' feature violated a patent held by a small e-commerce company called MercExchange.

An appeals court upheld the ruling in March, saying that an injunction forcing eBay to halt its patent infringement might be warranted.

In taking on the case, the Supreme Court is wading into the question of whether trial courts should be compelled to automatically order injunctions against companies found to be infringing on patents.

The answer to that question -- also being debated in Congress as part of patent reform -- is crucial to technology and pharmaceutical companies. If eBay prevails, pharmaceutical companies might find it harder to persuade courts to halt infringements of their patents. Tech companies, on the other hand, worry that a tougher stance on injunctions would require them to modify their products because of companies or individuals who file opportunistic patent suits.

``It's by far the most important patent case the court has agreed to hear in years,'' said Harold Wegner, an intellectual property attorney with Foley & Lardner based in Washington, D.C. The case dates back more than four years to a lawsuit brought by Thomas Woolston, a former Central Intelligence Agency technology officer who had applied for several technology patents six months before Pierre Omidyar launched eBay in 1995.

Woolston accused eBay of infringing on several patents. But just one is at the center of the current dispute. Woolston alleges that eBay is using his invention to power its fixed-price feature, called ``Buy It Now,'' which allows its members to buy an item at a certain price instead of competing in an auction.

Read the full article here.

Ranbaxy to Fight Pfizer Patent at Trial

Red Herring reported on November 24, 2005:

Ranbaxy Laboratories, India’s largest drug maker, vowed to fight Pfizer at a trial in the U.S. courts over the validity of the American company’s patent on a popular blood pressure medication.

Ranbaxy’s announcement followed a U.S. Court of Appeals ruling that upheld a preliminary injunction barring Ranbaxy from marketing the medication under the name Quinapril in the United States. A trial is now planned to take place in New Jersey to determine if the ban should be made permanent. The market for the drug is estimated at about $500 million.

A U.S. District Court imposed the preliminary injunction in March against Ranbaxy’s Jacksonville, Florida-based subsidiary after Pfizer, which sold the drug as Accupril, filed a patent infringement case against Ranbaxy and Teva Pharmaceuticals of Israel, seeking $387 million in lost sales for 2004. The appeals court upheld that ruling this week.

In the last few years Ranbaxy has emerged as the most aggressive patent challengers worldwide, a strategy that it says is built into its business model.

Earlier this week, it was sued by the third-largest drug maker of Europe, AstraZeneca, for “willful infringement” of its patent on the ulcer pill Nexium, which had sales of over $3.8 billion in 2004. Ranbaxy had filed an application with the U.S. Food and Drug Administration last month to begin manufacturing a generic version of Nexium.

Last month, a U.K. court upheld one of the two key patents on Pfizer’s blockbuster drug Lipitor, preventing Ranbaxy from launching a generic copy of the drug before its patent expires. While Pfizer won the basic patent on the $12-billion-a-year Lipitor, which will expire in 2011, it lost the more specific patent expiring in 2010. Both parties plan appeals in that case.

See also the interesting article from the November 14 print issue of Red Herring titled, "IP Law Slows Indian Pharma."

India has the world’s fourth-largest pharmaceutical industry in terms of volume behind the United States, the European Union, and Japan. It is worth $7 billion now and is projected to grow to $35 billion by 2010, according to McKinsey and Co.; two-thirds of its exports go to developing countries.

“The new Act with its clauses will be susceptible to varying interpretations and endless litigation,” warns Utkarsh Palnitkar, a health sciences analyst at Ernst & Young’s Hyderabad office. 

Under the new law, more than 8,900 drug patent applications filed since 1995 will have to be tested for compliance with the Trade Related Intellectual Property Rights (TRIPS) treaty, which so narrows the definition of patentability that litigation looks set to explode.

Open Source Software - IP Rights at Risk?

As previously noted in my November 9 post, the Legal Publishing Group of Strafford Publications is offering a live interactive 90-minute teleconference on Wednesday, November 30, 2005 at 1:00 p.m. Eastern Time discussing the risk open source software poses to IP rights.

Open source software is changing business strategies around IP assets. Open source code is available to interested users in exchange for the users' acceptance of contractual conditions concerning its use. Some of the advantages include cost savings and peer review via access to, and collaboration with, others utilizing the code.

But disadvantages abound. Many open source licenses preclude users from incorporating elements of the source code into proprietary software and licensing the software to others. Your software developers might even incorporate open source code in your products without your knowledge.

What risks and challenges are IP owners and users of open source software facing? What are the legal and business ramifications associated with using open source in proprietary software products? Counsel must understand the complexities posed by open source software.

The program outline is available here and you can register here.

Austin Company's Patent Infringement Suit and ITC Complaint Impacts Chinese Chip Manufacturer's IPO

The Austin American-Statesman reported on Tuesday:

Actions Semiconductor Co. Ltd., a Chinese chip-design company, postponed its initial public stock offering in this country, Reuters news service reported this morning.

Actions, which competes directly with Austin-based SigmaTel Inc., had sought to raise $85 million. Late last week, the company proposed to scale back the offering from 13 million to 10 million shares and to reduce the price range to $8 to $9 a share, from the original range of $9.50 to $11.50.

Actions has won rapid growth in sales with a low-cost chip that controls portable MP3 music players. SigmaTel has sued the company for infringement of its U.S. patents and it is seeking to have the International Trade Commission ban Actions chips from being imported into the United States.

Actions, which is based in the southern China province of Guangdong, reported a profit of $53.7 million on sales of $109.5 million for the first nine months of 2005, up from a profit of $9.8 million on sales of $23.1 million in the same period of 2004.

Red Herring reported that Actions subsequently postponed the IPO.

Some observers say the disappointing news could indicate future decline for investment in Chinese companies in general. Actions is the second Chinese company to withdraw from an IPO this week, following fabric maker China Ting Group’s cancellation of its planned listing on the Hong Kong Stock Exchange.

See also Red Herring's discussion of the ITC complaint and patent infringement suit here.  The ITC Docket is No. 2419 and was filed by James B. Coughlan of Kirkland & Ellis.

Is GIS Patent a House Hunting Roadblock?

Adena Schutzberg wrote on November 18, 2005 in Directions Magazine, "Will Patent Threat Bust Real Estate Boom in Geospatial?"

Geospatial solution providers have looked at the real estate industry as a huge potential market for years. What could be better than GIS to sift through locations, prices, demographics, school ranking and proximity to the train station all at the same time? During the past few months, GIS applications for this sector has been revitalized. Recently, Prudential Preferred Properties of Chicago jumped on the Google Maps/Earth bandwagon and other, similarly powered sites have appeared. A few weekends ago the New York Times highlighted online tools for researching real estate in its Technology section.

But there is a threat to all this progress in the form of a patent. U.S. Patent Number 5,032,989 assigned in 1991, describes "a method for locating available real estate properties for sale, lease or rental using a database of available properties at a central location and remote stations which use a graphic interface to select desired regions on a map of the areas in interest. The user begins with a region where they are interested in acquiring property and select an inner area within this region by using a pointing device such as a mouse to designate boundaries on a map displayed on screen. This is then zoomed in on and a second area is selected within the zoomed region. The second area is then cross-referenced with the database of available properties whose approximate locations are then pictorially displayed on screen. Information about the properties can then be obtained in textual form."

The ‘989 patent described above is held by Mark Tornetta and assigned to a holding company formed specifically to license the patent: Real Estate Alliance Ltd., or REAL Ltd. Its URL is realpro989.com which has been unavailable in the weeks during which I researched this article. REAL was relatively quiet for several years, but in 2002 "a major investor, Andrew Rooke" joined and became president.

One company did step forward and license the ‘989 patent. Equias Technology Development is the exclusive USA licensee of ‘989 "Real Estate Search Method and System."

CEO Scott Tatro, the company’s CEO, wants to "make the technology legally available to the real estate community through its portal, FindAHome.com." (The domain is owned by a company in Denmark, though Tatro claims control of it.) The website is just a place keeper at this time; further developments are expected by the end of the year. According to an article in Red Herring, "Subscribers to Equias' site will be able to wipe the legal slate clean of any past or present liability."

Tatro contacted Directions to suggest we cover the story of the patent and the "huge industry cover-up." Tatro is making the rounds for his case this fall. In this RIS Media interview from October he tells his story in some detail.

Peter Zura has been following this issue on his 271 Patent Blog and is cited in the article.

Free China Intellectual Property Rights Advisory Program

The U.S. Department of Commerce, in cooperation with the American Bar Association, the National Association of Manufacturers, and the American Chamber of Commerce in China, have established a new China Intellectual Property Rights Advisory Program. Through this program, American small and medium-sized enterprises (SMEs) can request a free, one-hour consultation with a volunteer attorney experienced in both IPR issues and the Chinese market to learn how to protect and enforce intellectual property rights (IPR), such as trademarks, patents or copyrights, in China.The SME China IPR Advisory Program seeks to:

• Help American businesses understand the steps they must take to develop an intellectual property protection strategy for the Chinese market;
• Help U.S. companies facing China-related IPR disputes pursue resolution to their problems; and
• Reinforce the message that it is essential for U.S. companies to take action to protect and enforce their IPR in accordance with China’s civil, administrative and criminal laws, and that failing to act can have devastating consequences for future business.

To request a free consultation with a volunteer attorney or obtain additional information regarding this Program, please contact Christina Heid of the American Bar Association preferably by email at introl@staff.abanet.org, with the subject line “SME China IPR Advisory Program-Request for Assistance,” or by telephone at (202) 662-1034.

AstraZeneca Sues Ranbaxy for Willful Infringement

Yahoo Finance, Singapore announced today that:

Global pharma firm AstraZeneca on Tuesday said it had filed a lawsuit in the United States District Court of New Jersey against India's biggest drug maker Ranbaxy Laboratories for "willful infringement" of its patent for acidity drug esomeprazole magnesium (marketed as Nexium).

The company in a statement on its website said the lawsuit was in response to an Abbreviated New Drug Application (ANDA) filed by Ranbaxy with the US Food and Drug Administration regarding its intent to market a generic version of AstraZeneca's Nexium in America prior to the expiration of six of its patents.

Danger of Paper Patents to End Users

Derek Stettner, a partner with the Michael Best & Friedrich law firm, wrote in yesterday's Wisconsin Technology Network:

In the past, most patent lawsuits involved competitors, each making and selling products containing proprietary technology into the same market suing each other. But patent enforcers often sue retailers or end users of products or technologies, not the manufacturers. In addition, patent enforcers often do nothing other than buy or otherwise procure patents.

So, the classic scenario has changed. Patent owners are suing purchasers rather than manufacturers or direct competitors.

End users often have no involvement in the creation of the technology that is alleged to infringe, don’t know the details of how the technology or products they use or sell work, and lack the technical or legal savvy to defend against infringement allegations. In addition, many end users have found that they do not enjoy legal warranties or indemnities concerning infringement. Even when they are fortunate to enjoy warranties or indemnities, end users and retailers may still have to spend time and money to defend themselves against or settle patent infringement claims.

The U.S. and many foreign countries do not require an inventor to actually build or implement his or her invention. An inventor need only create a design. Patents issued on designs are sometimes referred to as “paper patents,” because the inventor never builds a prototype before filing the patent application and may never actually build a product or implement a process embodying the invention.

Knowing that patent lawsuits can be very expensive and have devastating effects (e.g., an injunction) on a losing defendant, and having seen the success of other enforcement efforts, some individuals started companies with the sole or main purpose of finding patents of broad (or purportedly broad) applicability and then enforcing them against entire industries.

There are some other consequences of that model. First, since they don’t manufacture or provide any products or services, patent enforcers are generally not interested in a cross-licensing arrangement, where the defendant licenses its patent or patents in exchange for a license to the plaintiff’s patent or patents. Second, long-term business relationships and other commercial considerations are not always important to patent enforcers, because they are generally not, other than by enforcing their patents, participants in the marketplace.

Read the full article here and check back for the second part of the article next week.

Top Ten Supreme Court Patent Cases

As reported in today's I/P Updates Weekly newsletter, see Bill Heinze's post on Professor Wegner's Top Ten Supreme Court Patent Cases.