[Ip-health] (Financial Times) Intellectual property: Patent lore

Thirukumaran Balasubramaniam thiru at keionline.org
Wed Dec 5 01:47:35 PST 2012


http://www.ft.com/intl/cms/s/0/2ae9cde8-31a7-11e2-92f0-00144feabdc0.html


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In the wake of the eBay v MercExchange case – which cast grave doubt on whether injunctive relief should be granted as a matter of course – it has become harder to win injunctions in situations like this in the US, Mr Flattmann says. As a result, “branded [drugs] companies will increasingly pursue the statutory remedy and can now use our case as a precedent under similar circumstances”, he adds.

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Other cross-border IP cases have presented bigger logistical challenges for companies trying to protect their rights. DuPont, the chemicals group, last year won an eye-catching $920m judgment against Kolon Industries, a South Korean company, for breach of trade secrets surrounding Kevlar, which is used in bulletproof vests. Crowell & Moring, acting for DuPont, had to obtain evidence from key witnesses in South Korea and prove evidence tampering by the defendant, which was found by a US court to have destroyed documents in the case. Despite the victory, DuPont has struggled to collect damages.

Other companies that have found new ways to overcome hurdles represented by foreign defendants are Bayer, the pharmaceutical group, and Cross Match Technologies, a US biometric scanning company. Bayer, in challenging an anti-flea treatment for pets from Indian pharmaceutical company Cipla, convinced a US court that it should be allowed to serve its complaint by email and by delivering it to a US law firm that had represented Cipla in an unrelated case. The moves saved Bayer (represented by Debevoise & Plimpton) a six-month delay.

In Cross Match’s patent infringement case, lawyers Latham & Watkins succeeded in serving papers on the chief executive of South Korean company Suprema while he was at a trade show in the US. Cross Match eventually prevailed in its case before the US International Trade Commission – a venue that is becoming increasingly popular among companies looking for a quick way to block offending products from entering the US.



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November 29, 2012 5:02 am
Intellectual property: Patent lore
By Richard Waters


Defences of essential intellectual property that featured near the top of the list of highly rated legal campaigns fought in IP cases this year sometimes involved the companies concerned themselves going on the attack. Or they combined a take-no-prisoners legal strategy with a business negotiation to reach the desired outcome.

One thread in these defensive actions was the challenges in overcoming hurdles that got in the way of countering foreign companies accused of trade secrets theft or patent infringement.
A cross-border case that tops the list of most innovative legal strategies is that of European dermatology company Galderma. It was forced to come up with a novel approach in the US courts to block US generic drugmaker Mylan.

According to one analyst, Mylan was on the brink of breaking into a market worth $240m a year when, in 2010, the Food and Drug Administration approved its generic version of Galderma’s market-leading Oracea, an oral treatment for the facial skin disease rosacea. The potential damage to the European company was immense.

“The worst-case scenario is that a branded company of a blockbuster [drug] could lose 80 per cent of profits as soon as the generic comes on market,” says Gerald Flattmann, a partner at Paul Hastings, which was brought in by Galderma.
The case was brought about a patent that was awarded on Oracea only after Mylan received its FDA approval. To carry the day, Paul Hastings had to build a new legal argument with no direct precedent.

In the wake of the eBay v MercExchange case – which cast grave doubt on whether injunctive relief should be granted as a matter of course – it has become harder to win injunctions in situations like this in the US, Mr Flattmann says. As a result, “branded [drugs] companies will increasingly pursue the statutory remedy and can now use our case as a precedent under similar circumstances”, he adds.

Other cross-border IP cases have presented bigger logistical challenges for companies trying to protect their rights. DuPont, the chemicals group, last year won an eye-catching $920m judgment against Kolon Industries, a South Korean company, for breach of trade secrets surrounding Kevlar, which is used in bulletproof vests. Crowell & Moring, acting for DuPont, had to obtain evidence from key witnesses in South Korea and prove evidence tampering by the defendant, which was found by a US court to have destroyed documents in the case. Despite the victory, DuPont has struggled to collect damages.

Other companies that have found new ways to overcome hurdles represented by foreign defendants are Bayer, the pharmaceutical group, and Cross Match Technologies, a US biometric scanning company. Bayer, in challenging an anti-flea treatment for pets from Indian pharmaceutical company Cipla, convinced a US court that it should be allowed to serve its complaint by email and by delivering it to a US law firm that had represented Cipla in an unrelated case. The moves saved Bayer (represented by Debevoise & Plimpton) a six-month delay.

In Cross Match’s patent infringement case, lawyers Latham & Watkins succeeded in serving papers on the chief executive of South Korean company Suprema while he was at a trade show in the US. Cross Match eventually prevailed in its case before the US International Trade Commission – a venue that is becoming increasingly popular among companies looking for a quick way to block offending products from entering the US.

In another prominent defensive move in the drugs industry, Onyx Pharmaceuticals went on the attack to protect its main source of revenue: its share of profits from a drug jointly developed with bigger partner Bayer. Bayer had developed its own alternative drug, almost identical to the earlier joint product, which threatened to cut off Onyx’s revenue.

Suing the company’s most significant partner presented its challenges: “We needed to fight and keep collaboration going at the same time,” says Suzanne Shema, general counsel at Onyx. “It was a tightrope to walk.”

The case was a week into trial when Bayer agreed to a settlement giving Onyx a significant share in the new drug, including 20 per cent of future net sales. Cooley, which represented Onyx, used two teams of lawyers: one to lead the court battle and one to handle simultaneous settlement discussions. Onyx could not let the legal battle threaten an essential business partnership. The aim was “to take a lawsuit – where most are zero-sum games – and craft a creative solution to form a positive [result]”, says Marty Schenker, a partner at Cooley.
Pharmaceuticals cases figured prominently among innovative actions this year but the information technology industry also had its fair share of interesting disputes. In part that reflected the continuing patent war in the smartphone industry – defences mounted by handset makers HTC and Apple and legal work on the sale of Motorola Mobility and Nortel’s patents all drew recognition.

One notable case was Facebook’s defence against a patent lawsuit from Yahoo, filed in the run-up to its initial public offering this year. Facebook at the time lacked the sort of strong defensive IP portfolio enjoyed by its older rivals.

“We assumed that it would happen eventually,” says Sam O’Rourke, Facebook’s deputy general counsel. “We figured a large company would make a strategic play to hamper our business; we just weren’t sure when.”

The social networking company had been buying patents for some time but cranked this up after the Yahoo attack. Facebook, which was represented by Cooley, came out with all guns blazing, firing back with a lawsuit of its own that took just 20 days to prepare. Its uncompromising defence came at a time when many observers had expected the company to seek a quick settlement rather than jeopardise its IPO.

“I think the public perception was that we were not prepared to defend ourselves,” says Mr O’Rourke.



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Thiru Balasubramaniam
Geneva Representative
Knowledge Ecology International (KEI)

thiru at keionline.org



Tel: +41 22 791 6727
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