Patent Litigation Settlement Roundup – Nov. 16, 2012

Below is summary of some of the patent deals from the last week that caught my eye.  If you have any “patent business”, “patent deal” or patent litigation settlement news story or press release you would like to share please send me a message using our contact form.

Acacia Settlement & Stock Repurchase

On November 15, 2012, Acacia Research Corporation (Nasdaq: ACTG) announced that its Criminal Activity Surveillance, LLC subsidiary has entered into a license and settlement agreement with UDP Americas, Inc. The agreement resolves litigation that was pending in the United States District Court for the Eastern District of Texas.

Meanwhile, on November 16, 2012, Acacia announced that the Company’s Board of Directors has authorized a program for repurchasing shares of the Company’s outstanding common stock. The stock repurchase program will be put into effect immediately.

Under the stock repurchase program, the Company is authorized to purchase in the aggregate up to $100 million of its common stock through the period ending May 15, 2013. Repurchases may be made from time to time by the Company in the open market or in block purchases in compliance with applicable Securities and Exchange Commission rules.

Acacia Research Corporation CEO, Paul Ryan, commented, “The Board authorization to repurchase shares is an attractive opportunity to enhance stockholder value. Acacia’s strong balance sheet with $410 million in cash and investments and no debt provides us with plenty of capital to grow the business while also reducing the share count. Acacia has invested $214 million in new patent assets during 2012 and has generated record revenues of $185 million for the first 9 months of 2012, which already surpasses our previous full-year record revenue of $172 million generated last year. Acacia continues to see an acceleration of opportunities to grow its business and as the market leader its subsidiaries now control 250 different patent portfolios.”

[Patent-Litigation]

HTC and Apple Settle Android Patent Litigation

On Saturday, November 10, 2012, HTC and Apple® announced that the two companied had reached a global settlement that includes the dismissal of all current lawsuits and a ten-year license agreement. The license extends to current and future patents held by both parties. The terms of the settlement are confidential and, therefore, not disclosed by the companies.

There has been much written already about this settlement, as you can imagine. Some are wondering whether it will be possible for Android phone makers to be able to continue to sell phones at a profit given that they now have to pay Apple an undisclosed royalty, and are already paying Microsoft a royalty. See Apple Goes for Android’s Jugular. Others, however, think that the settlement signals a softening of Apple’s stance and perhaps a sign of weakness.  See Apple Softening It’s Approach to Patent Litigation?

Despite the fact that Apple’s battle with Samsung continues, I firmly believe this is a sign that the end is near.  Apple has already won a $1 billion jury verdict against Samsung, which will be appealed, of course. While many continue to focus on Apple, the focus really should be on Samsung. It is Samsung that stands to lose big. They should want to find a way to exit this lawsuit and put the Android wars behind them. Once that happens, as it virtually always does, lookout for rapid expansion in smartphone technology.

Hatch-Waxman Acetadote® Patent Litigation Settles

Perrigo Company (Nasdaq: PRGO) announced on November 13, 2012, that it agreed to settle its Hatch-Waxman litigation relating to Acetadote® (acetylcysteine) injection brought by Cumberland Pharmaceuticals, Inc. (Nasdaq: CPIX). Under the terms of the settlement, Perrigo can launch a generic version of Acetadote® (acetylcysteine) injection upon expiration of the patents in May 2026.

Yes, you read that correctly — 2026!  Seems more like a total capitulation than it does a settlement. The original composition of matter patent covering the Acetadote® formulation and was issued in April 2012.

In addition, Perrigo entered into an agreement with Cumberland wherein Perrigo can distribute Cumberland sourced authorized generic product upon generic market formation.

Acetadote® (acetylcysteine) injection, administered intravenously within 8 to 10 hours after ingestion of a potentially hepatotoxic quantity of acetaminophen, is indicated to prevent or lessen hepatic injury and has annual sales of approximately $41 million, as measured by Wolters Kluwer.

Alnylam and Tekmira Settle All Litigation and an Interference at USPTO

On November 12, 2012, Alnylam Pharmaceuticals, Inc. (Nasdaq: ALNY)and Tekmira Pharmaceuticals Corporation (Nasdaq: TKMR) that the two companies restructured their relationship with a new licensing agreement, which will also resolve all litigation between the parties. Additionally, the parties have also agreed to a resolution of the interference proceeding related to Alnylam-owned US Patent No. 7,718,629 directed to an siRNA component in ALN-VSP.

Under a new license agreement, Alnylam and Tekmira have agreed to consolidate certain IP elements related to LNP technology for the systemic delivery of RNAi therapeutic products. Specifically, certain patents and patent applications, including the MC3 lipid family, will be assigned by Alnylam to Tekmira. Alnylam retains full rights to use this IP for advancing RNAi therapeutic products to the market, including the rights to sublicense IP on a product-by-product basis. Alnylam has also agreed to grant five additional non-exclusive therapeutic licenses to Tekmira.

In addition, Alnylam has elected to buy out its manufacturing obligations to Tekmira with respect to its LNP-based pipeline programs. Alnylam will make a one-time payment of $30 million to Tekmira in order to have the rights to manufacture its own LNP-based products going forward, either itself or through a third-party contractor.

Furthermore, Alnylam has elected to buy-down certain future potential milestone and royalty payments due to Tekmira for its ALN-VSP, ALN-PCS, and ALN-TTR02 LNP-based products. Specifically, Alnylam will make a one-time payment of $35 million to Tekmira in association with the termination of the prior license agreements between the companies and the significant reduction in milestone and royalty payments for its ALN-VSP, ALN-PCS, and ALN-TTR02 products. Tekmira will also be eligible to receive an additional $10 million in aggregate in contingent milestone payments related to advancement of ALN-VSP and ALN-TTR02 products, which now represent the only potential milestones for ALN-VSP, ALN-PCS and ALN-TTR02 products.

Alnylam will incur a $65 million charge to operating expenses during the fourth quarter of 2012 related to the restructuring of its license agreements with Tekmira. As a result of the payments being made in connection with this restructuring, Alnylam is revising its financial guidance to end 2012 with greater than $215 million in cash.