Federal Court Denies Motorola s Motion to Dismiss Apple s Appeal over SEPs

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APRIL 28-MAY 3, 2013 WRITTEN BY DANIEL P. WEICK AND KOREN W. WONG-ERVIN

PATENTS

Federal Court Denies Motorola’s Motion to Dismiss Apple’s

Appeal over SEPs

On May 3, the Federal Circuit denied Motorola Mobility LLC’s motion to dismiss Apple Inc.’s appeal in an antitrust and breach of contract dispute over Motorola’s standard-essential patents (SEPs). The court rejected Motorola’s argument that the court lacks jurisdiction because the claims are not patent-related, concluding that the “better course” is for the parties to address the court’s jurisdiction in their briefs. Apple alleges that Motorola breached its obligation to license its SEPs on FRAND terms. In November, U.S. District Court Judge Barbara Crabb dismissed the suit after Apple reserved its right to litigate infringement in the event that the

court-determined that the FRAND royalty exceeded $1 per phone. Sources:

Order, Apple Inc. v. Motorola Mobility LLC (Fed. Cir. May 3, 2013), available at http://articles.law360.s3.amazonaws.com/0438000/438501/AppMoto%207th.pdf. Ryan Davis, Fed. Circ. Nixes Motorola Bid To Toss Apple FRAND Appeal, Law360 (May 3, 2013), available at http://www.law360.com/competition/articles/438501/fed-circ-nixes-motorola-bid-to-toss-apple-frand-appeal (subscription required).

Motorola Seeks to Limit Microsoft’s Damages Theories in

Dispute Over Motorola’s SEPs

On May 1, Motorola Mobility LLC submitted a letter to Judge James Robart seeking to preclude Microsoft Corp. from raising new damages theories in a dispute over Motorola’s standard-essential patents (SEPs). According to Motorola, on April 3, 2013, Microsoft “supplemented its discovery responses to disclose brand new damages theories” more than two years after the action was filed and nearly nine months after the close of fact discovery. (Motorola Ltr. to the

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Court at 1.) Motorola contends that “[t]his late disclosure after the Court set discovery limitations and the schedule prejudices” Motorola’s ability to prepare for trial. (Id.)

Previously, Microsoft stated that it sought only attorney’s fees as damages for Motorola’s alleged breach of contract. Microsoft now claims, among other things, more than $11 million in

damages from its decision to move its European distribution facilities from Germany to the Netherlands purportedly as a result of an injunction Motorola requested in Germany (which never took effect). According to Motorola, “Microsoft moved its facilities in April 2012 but sat silent on this damages theory until April 3, 2013.” (Id.)

Motorola’s letter follows the court’s landmark ruling determining a RAND royalty rate and range for Motorola’s SEPs. The case is now set for trial in August to determine whether Motorola’s initial offer breached its obligation to license its SEPs on FRAND terms, and if so, the amount of damages owed to Microsoft.

Sources:

Ltr. from Motorola to Judge James Robart (May 1, 2013), available at

http://articles.law360.s3.amazonaws.com/0438000/438091/MS%20Moto%20Damages.p df.

Ryan Davis, Motorola Seeks Limit On Microsoft's SEP Damages Claims, Law360 (May 2, 2013), available at http://www.law360.com/ip/articles/438091/motorola-seeks-limit-on-microsoft-s-sep-damages-claims (subscription required).

A New Survey of In-House Counsel Suggests that the

Increasing Volume of Patent-Assertion Litigation is Having

a Broad Impact on High-Tech Companies

A new survey led by Santa Clara University Law Professor Colleen Chien found that patent-assertion entity (PAE) litigation is having broad effects on companies, ranging from

re-engineering of products and reduced hiring to distracting staff from the company’s core business. “These are impacts that go beyond the courtroom, that go beyond the pocketbook,” Chien said. Chien presented her preliminary findings on May 3 at a conference that included federal judges from the Northern District of California, as well as Federal Circuit Chief Judge Randall R. Rader. The conference focused on how to decrease the costs and increase the efficiency of patent litigation.

Chien surveyed more than 100 in-house counsel, about 70% of whom were at technology and Internet companies. Chien found that one-fourth had lost customers or were delayed in attaining an operational milestone, and about one in ten had either exited an area of business or been forced to change their business strategy as a result of PAE litigation. One potential solution that in-house and outside counsel favor to make patent litigation more efficient and less costly is the adoption of strategies to allow for earlier summary judgment rulings, as well as other strategies to streamline the case management process, such as an early limiting of the number of patent claims. Judge Lucy Koh, who presided over two patent and antitrust cases between Apple Inc.

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and Samsung Electronics Co., Ltd., stated that she supports limiting the number of patent claims, accused products, and prior art references as a way to streamline the evidentiary discovery phase of cases.

The conference included a panel with Erich Spangenberg, chairman of IP Navigation Group, a prominent PAE company based in Dallas. Spangenberg stated that many PAEs also want to see a more efficient, less costly patent litigation process.

Source:

Mike Swift, Federal judges ponder patent litigation reform, mLex (May 3, 2013),

available at http://www.mlex.com/US/Content.aspx?ID=376369 (subscription required).

PHARMACEUTICALS

Teva and Orchid Settle Antitrust and Patent Claims Over

Azilect

Teva Pharmaceutical Industries Ltd. and Orchid Chemicals & Pharmaceuticals Ltd. have reached a settlement resolving Teva’s claims that Orchid infringed Teva’s patent on Azilect, a treatment for Parkinson’s Disease. Teva had sued Orchid and several other generic manufacturers for patent infringement, and the generics counterclaimed alleging various patent defenses as well as claims that Teva violated the antitrust laws by asserting its patents.

As part of the settlement, Orchid admitted that it technically infringed Teva’s patent by filing an Abbreviated New Drug Application before the expiration of Teva’s patent. Other details of the settlement were not available, and the settlement is subject to approval by the U.S. antitrust agencies under the Medicare Prescription Drug Improvement and Modernization Act of 2003. On April 30, the district judge overseeing the litigation signed an order dismissing the litigation between Orchid and Teva. In that order, the court stated that the settlement “will afford Teva and Orchid the procompetitive opportunity to use more productively the money and other resources that would have been spent in the continued prosecution and defense of this action, to the benefit of the parties and consumers alike, such as by investing in pharmaceutical research and development.” (Order at 2-3.) Teva’s claims against Watson Laboratories Inc., Mylan Pharmaceuticals Inc., and Apotex Corp. remain pending, as do those companies’ counterclaims against Teva.

Sources:

Order, Teva Neuroscience, Inc. v. Watson Labs, Inc. (D.N.J. April 30, 2013), available at http://articles.law360.s3.amazonaws.com/0437000/437531//mnt/rails_cache/https-ecf- njd-uscourts-gov-cgi-bin-show_doc-pl-caseid-247414-de_seq_num-1449-dm_id-6701057-doc_num-475.pdf.

David McAfee, Teva, Orchid Settle Patent Dispute Over Azilect, Law360 (April 30, 2013), available at http://www.law360.com/competition/articles/437531/teva-orchid-settle-patent-dispute-over-azilect (subscription required).

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End-Payors File Additional Reverse-Payment Suits Against

AbbVie and Teva Over Niaspan

Last week, end-payors filed two additional reverse-payment suits against AbbVie Inc., Abbott Laboratories, Barr Pharmaceuticals, Teva Pharmaceuticals, and Duramed Pharmaceuticals over the drug Niaspan. The plaintiffs, City of Providence Rhode Island and Painters District Council No. 30 Health & Wealth Fund, allege that the defendants engaged in anticompetitive conduct that prevented a less expensive generic version of Niaspan from entering the market.

Specifically, the plaintiffs allege that, in 2001, defendant Barr (now part of Teva) filed an Abbreviated New Drug Application with the FDA seeking to bring a generic version of Niaspan to the market. AbbVie’s predecessor company, Kos Pharmaceuticals Inc., then sued Barr for patent infringement. According to the plaintiffs, during the course of the infringement litigation, Kos and Barr entered into an unlawful arrangement in which Kos agreed to pay Barr millions of dollars over an eight year period if Barr would refrain from competing in the U.S. with an extended release version of Niaspan until September 20, 2013. The plaintiffs further allege that the payments “were concealed in 2005 under bogus supply and promotion agreements.” (City of Providence Compl. ¶ 5.) The plaintiffs further allege that the defendants entered into the reverse payment agreements “to foreclose generic entry by strategically using Barr’s first filer status as a mechanism to block other generic companies from launching their own version of generic Niaspan.” (Id. ¶ 6.)

Sources:

Complaint, City of Providence v. AbbVie (D. R.I.), available at

http://articles.law360.s3.amazonaws.com/0437000/437518//mnt/rails_cache/https-ecf-rid-uscourts-gov-doc1-1611829002.pdf.

Complaint, Painters Dist. Council No. 30 Health & Welfare Fund v. AbbVie (E.D. Pa.),

available at

http://articles.law360.s3.amazonaws.com/0437000/437518/Painters%20Niaspan%20Com plaint.pdf.

Scott Flaherty, AbbVie, Teva Hit With 2 More Niaspan Pay-For-Delay Suits, Law360 (May 1, 2013), available at http://www.law360.com/competition/articles/437518/abbvie-teva-hit-with-2-more-niaspan-pay-for-delay-suits (subscription required).

English Court Delays Servier Reverse-Payments Litigation

Pending Appeal Over Whether Servier is at Liberty to

Disclose Confidential Information

On April 29, an English court delayed the National Health Service’s (NHS’s) reverse-payments lawsuit against Servier pending a separate court’s review over whether Servier is at liberty to disclose confidential information. The NHS brought suit in 2011, alleging that Servier paid rival generic drugmakers not to make generic versions of Perindopril, a drug used to treat high blood pressure. According to the NHS, as a result of Servier’s actions, it was forced to purchase the

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drug at inflated prices. The NHS is seeking more than 200 million pounds ($310 million) in damages.

Source:

Sille Ruubel, UK court delays Servier damage claim while appeal continues, mLex (April 29, 2013), available at http://www.mlex.com/EU/Content.aspx?ID=373450 (subscription required).

TRADEMARKS

Antitrust Dispute Over .XXX Web Domain Settles

Last week, one of the largest operators of pornographic websites settled its antitrust claims concerning the .xxx domain established by ICANN for adult websites. In Manwin Licensing International v. ICM Registry, 11-cv-9514 (C.D. Cal.), the plaintiff accused ICANN and ICM, a domain registration company, of conspiring to create and monopolize the .xxx domain in order to force websites to purchase duplicate domain names at monopoly prices. Sites that failed to purchase the .xxx equivalent of their existing domain names would run the risk of other sites registering duplicate names and thus diverting traffic from the main site.

Under the terms of the settlement, ICM has agreed to charge a discounted price for sites that register a .xxx domain within the next 30 days, offer future discounts to later registrants, and contribute $2.00 per registered domain to a fund to support the adult entertainment industry. The court had previously denied a bid by ICANN and ICM to dismiss Manwin’s antitrust claims and dismissed ICANN and ICM’s counterclaims against Manwin.

Sources:

Scott Flaherty, “Adult Website Operator Manwin Settles ‘.XXX’ Antitrust Row” (May 2, 2013), http://www.law360.com/competition/articles/438074/adult-website-operator-manwin-settles-xxx-antitrust-row (subscription required).

Ron Knoxx, “Discounts End Porn Site Dispute” (May 3, 2013), available at

http://www.globalcompetitionreview.com/news/article/33465/discounts-end-porn-site-dispute (subscription required).

UPCOMING PROGRAMS

Antitrust and Patent Assertion Entities: The DOJ-FTC

Joint Workshop

May 7, 2013 12:00-1:15 Eastern

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In December 2012, the DOJ and FTC held a joint workshop on patent-assertion entity (PAE) behavior. The DOJ and FTC also solicited comments from the public, which were submitted through April 5, 2013. In this program, panelists from the DOJ, FTC, in-house, and private practice will discuss the recent joint workshop and public comments, as well as explore the legal theories concerning PAE activity through a series of hypothetical scenarios.

To register and receive dial-in information, please visit

http://www.americanbar.org/content/dam/aba/marketing/20130507_at13507.authcheckdam.pdf

Identifying Antitrust Issues in IP Matters

May 22, 2013

Noon-1:15 PM Eastern

In this second of a two-part series of joint programs hosted by the ABA Section of Antitrust Law and the ABA Section of Intellectual Property Law, panelists from the government, in-house, and private practice will discuss how to identify possible antitrust issues in intellectual property matters. Topics will include acquisitions, enforcement, and standard setting.

To attend via teleconference, please register at

Patent Pools

June 14, 2013

Noon-1:15 PM Eastern

An in-depth discussion on patent pools, including analysis of the relevant DOJ Business Review letters, from the perspectives of government, economists, and private practitioners.

International Licensing Issues in the U.S., India, and Japan

June 19, 2013

9:30-10:45 AM Eastern

In this joint program hosted by the Intellectual Property and International Committees, panelists from the FTC, in-house, and private practice will explore licensing issues in the U.S., India, and Japan. The program will include an overview of existing law and new developments, as well as hypothetical questions aimed at providing a comparative analysis of the different jurisdictions.

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Visit our resources page at:

http://www.americanbar.org/content/dam/aba/publications/antitrust_law/at315000_resources_arc hived.authcheckdam.pdf