Posts Tagged: "patent settlement"

Chief Judge Rader: “The patent system has a narrow focus. It is not a consumer affairs program. It is not a manufacturers guarantee compliance program. It’s not a competition program. It has one objective, summarized well by the Constitution: promote the progress of science and the useful arts. It’s there to create more investment and more incentive for innovation and invention. The things that the patent system is criticized for is not its job.”

The month of January started off quite busy, which in all likelihood was as the result of deals and announcements either held over or that simply couldn’t get done in the run up to closing out the year. There was a noticeable lull in news and announcements. This month some of the highlights included (1) an exclusive option to license drugs targeting Parkinson’s disease; (2) potential patent problems on the horizon for Facebook; (3) additional settlements in the Forest Laboratory’s BYSTOLIC® patent litigation; (4) the inevitable news from Acacia Research; plus more.

Without doubt, the biggest patent deal of the month related to Kodak’s sale of its non-core patent portfolio to Intellectual Ventures, RPX and others for $525 million. But there were other interesting patent business deals, including: (1) Microsoft and EINS Sign Android Patent Agreement; (2) NIH Awards Contract for Improved Anthrax Vaccine; (3) ARRIS To Acquire Motorola Home Business For $2.35 Billion; (4) Mylan Announces Comtan® Settlement Agreement; (5) Trovagene Licenses Duke University, Novartis; (6) Amgen Finalizes Agreement Resolving Federal Investigations; (7) GE Healthcare, CDI Agree to Sublicense for Cellular Assay Patents; and more.

On November 28, 2012, Forest Laboratories, Inc. (NYSE: FRX) and Forest Laboratories Holdings, Ltd. (collectively,“Forest”) announced that they entered into settlement agreements with Alkem Laboratories, Ltd. (“Alkem”), Indchemie Health Specialties Pvt. Ltd. (“Indchemie”), and Torrent Pharmaceuticals Ltd. and Torrent Pharma Inc. (collectively, “Torrent”) in patent infringement litigation brought by Forest in response to abbreviated new drug applications (ANDAs) filed by Alkem, Indchemie and Torrent each seeking approval to market generic versions of Forest’s BYSTOLIC® (nebivolol) tablets.

First, remember that Steve Jobs once referred to the smartphone patent wars as the patent equivalent of global thermonuclear war. But will this be more like the Cold War or the Apocalypse? The only patent war that I can recall that actually approximated a patent version of the Apocalypse was the battle between Polaroid and Kodak. That saw a $909 million verdict in 1990, and ultimately settled for $925 million about a year later, but required total aggregate attorneys fees in the neighborhood of $550 million. The war lasted 15 years and didn’t achieve the $2.5 to $5 billion that once upon a time was believed possible. This was also at a time when these numbers were real money.

According to the FTC’s complaint, Bosch’s acquisition of SPX’s Service Solutions business would give Bosch monopoly power in the U.S. market for ACRRR devices. Following the transaction as proposed, Bosch would control an overwhelming share of the market. Four other firms are in the market, each with a very small share. The acquisition also would eliminate the current direct competition between Bosch’s RTI and Bosch brands and SPX’s Robinair brand, and would allow the combined firm to raise prices by unilaterally exercising its newly gained market power, in violation of the FTC Act, the FTC alleged. The FTC complaint also alleges that SPX has been pursuing a strategy of suing to enjoin competitors from using patents that may be necessary to meet the standards for manufacturing ACRRR devices.

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. Meanwhile, HTC settles with Apple and more.

On November 8, 2012, Mylan Inc. (Nasdaq: MYL) announced that it, along with Famy Care Ltd., has entered into a settlement agreement with Janssen Pharmaceuticals Inc. that will resolve patent litigation related to Ortho Tri-Cyclen Lo® Tablets, which are indicated for the prevention of pregnancy in women who elect to use oral contraceptives as a method of contraception. Also on November 8, Research Affiliates, LLC and WisdomTree Investments, Inc. (NASDAQ: WETF) announced that Research Affiliates will withdraw its patent infringement lawsuit brought against WisdomTree and pay WisdomTree $700,000. On October 31, 2012, Acacia Research Corporation (Nasdaq:ACTG) announced that its subsidiaries settled patent litigation with Medtronic and Comcast Cable in unrelated cases.

This deal will give GSK exclusive rights to BENLYSTA, which is a human monoclonal antibody that inhibits B-cell activating factor (BAFF) approved for treatment of systemic lupus erythematosus. It is believed that BENLYSTA has blockbuster potential. According to Human Genome Sciences, the principle patents covering BENLYSTA will generally expire between 2016 and 2023 in the United States and between 2016 and 2021 in the rest of the world. For 2011 sales of BENYLYSTA were approximately $52 million, but there is great optimism that the drug will become a blockbuster as it continues to gain market share and as it may ultimately be approved for treatment of other autoimmune diseases.

This is an interesting development, and one that seems to make sense from both perspectives. When giant corporations are suing each other it is because they are in immature markets, such as we see with the enormous patent litigation surrounding various smart phones, tablet devices and the operating systems that power them. Lawsuits are the mark of an immature market because in the end no one really ever wins, that is except for the lawyers. The patent litigators make out handsomely, and there is absolutely nothing wrong with that. My patent attorney brethren thank you immensely I’m sure, and I am hardly going to take issue with capitalism at work. If you want to sue someone and you have the funds to hire an attorney then have at it!

Attendees agreed that it’s critical for companies to gain greater leverage to deter nuisance lawsuits and manage costs by reducing the cost of litigation defense. According to those surveyed this is accomplished, at least in part, through the use of joint defense groups (JDGs), where parties engage in shared co-counsel to reduce defense costs. JDGs have been used in approximately two-thirds of all NPE cases, and three-quarters of those surveyed reported working in some capacity with JDGs.

In trying to determine whether patent litigation is out of control it is worth looking at the numbers of patent cases terminated and how they are terminated. What becomes clear is that there is no statistically relevant increase in the number of trails over the last 30 years even with a significant increase in the number of cases commenced. The following charts show that while actual trials remains largely constant over the last 30 years there has been growth in the number of patent litigations terminated without any court action, as well as increase in cases terminated with court action and before pre-trial and the number of cases terminated between pre-trial and trial.

SellerBid, Inc. brought the patent infringement lawsuit (see complaint) demanding a jury trial, against Groupon and others on July 20, 2011. Somewhat surprisingly, the lawsuit was filed in the United States District Court for the Eastern District of Virginia. The Eastern District of Virginia is famously known by attorneys everywhere as “the Rocket Docket,” thanks to how fast cases go from filing to trial. Expect the defendants to seek to remove the case and the Eastern District of Virginia to be sympathetic to the defendants if there is any reason to suspect that SellerBid was merely attempting to manufacture jurisdiction and venue.

Overall there will be few large paydays for small and mid-size companies against the Fortune 1000, and fewer still for those who do not engage an appropriate strategy and simply rush head first into litigation or licensing negotiations. Notwithstanding, cultivating or acquiring a patent portfolio will allow small and mid-size companies to hold assets that are capable of being leveraged in the event a large corporation comes knocking. Additionally, as the business grows and revenues become available having a patent portfolio can enable small and mid-size companies to pursue litigation against Goliaths, but the odds of prevailing and having critical leverage go up if the plaintiff is a practicing entity. Simply stated, without the threat of a permanent injunction the Goliaths of the corporate world are exceptionally likely to just push you around.

The Patent Docs are reporting that on February 3, 2009, Senator Herb Kohl (D-WI) introduced legislation into the Senate titled the Preserve Access to Affordable Generics Act, which would prohibit brand name drug companies from compensating generic drug makers for delaying the entry of generic drugs into the market.  This bill is in response to a lawsuit initiated by the FTC…