January 2012

January 24, 2012, by Mandour & Associates, APC

San Diego – Apple recently lost another major battle in a patent infringement lawsuit against Motorola Corp. when the United States International Trade Commission (ITC) ruled in favor of Motorola, saying that it did not infringe on three Apple patents.

In its patent infringement complaint, Apple contended that Motorola’s Droid, Droid 2, Droid X, Cliq, BackFlip, Devour and Charm phones infringed on three of its patents, two of which are related to touch screen technology. The third patent allegedly infringed expires in 2013 and covers technology for components being added without the need for installation programs.

Apple’s complaint, filed with the ITC in October 2010, was in response to the Illinois-based Motorola filing civil lawsuits and ITC complaints against Apple, targeting its iPhone, iPad, and MacBook technologies. Both companies are also currently wrapped up in several patent infringement disputes with other manufacturers of smartphones.

Details were not made available on the reasoning for the ITC ruling for Motorola and has yet to be reviewed by a six-person commission, which retains the power to overturn it. The decision is usually upheld by the commission, however it is not uncommon for it to make a change or changes.

It appears that this dispute is just one factor in Apple’s efforts in a much larger strike to thwart Google’s Android platform and the smartphone manufacturers running it. Apple is also embroiled in patent infringement lawsuits against HTC and Samsung over their alleged infringement of Apple technology in use of the Android operating system. Much of the ambition behind these lawsuits reportedly comes from late Apple Cofounder Steve Jobs, who was once quoted as saying he was planning to wage “thermonuclear war” against the Android platform, which he believed was stolen technology.

Regarding the ITC patent infringement complaints the tech world has waged against one another, these types of lawsuits tend to level the playing field for intellectual property disputes because they can be less costly. However, they can also take years to reach a conclusion. The filings with the ITC are simply administrative hearings which can be quickly resolved. Many technology giants are increasingly using this platform as a way to hit the competitor where it hurts the most, by attempting to stop the importation of infringing products.

No comments were available from Apple and Motorola regarding the latest dispute.

January 16, 2012, by Mandour & Associates, APC

San Diego – Just days after reports swirled speculating that the Eastman Kodak Company will file for Chapter 11 bankruptcy protection, the pioneer of photo processing products has filed a lawsuit against Apple and HTC Corporation alleging patent infringement.

The complaint, filed with the United States International Trade Commission (ITC), involves certain Kodak patents related to digital imaging technology. According to the lawsuit, Kodak is alleging that certain Apple iPhones, iPads, and iPods, and certain HTC smartphones and tablets infringe Kodak patents that involve image transmitting technology. Also, Kodak claims that some HTC smartphones infringe a patent that covers technology for a method of previewing images, which is already the subject in another lawsuit against Apple. Furthermore, Kodak filed separate lawsuits against Apple and HTC in U.S. District Court for Western New York, on the same grounds of infringement.

In a statement from Kodak President and Chief Operating Officer Laura G. Quatela, she said, “Kodak is the leader in digital imaging innovation and we have invested hundreds of millions of dollars creating our pioneering patent portfolio. We’ve had numerous discussions with both companies in an attempt to resolve this issue, and we have not been able to reach a satisfactory agreement.”

In order to raise the funds to prevent the flailing Rochester-based company from going under, Kodak has licensed its portfolio of patents related to digital imaging technology to more than thirty companies, including LG, Motorola, Samsung, and Nokia, to use in their mobile media device products. All of the companies pay royalties to Kodak for use of the technology covered in the patents.

In its patent infringement lawsuit against Apple and HTC, Kodak is asking the ITC for an exclusion order that would prohibit the importation of infringing devices, which includes cellular phones and wireless communication devices with digital cameras. In the U.S. District Court cases against Apple and HTC for the same alleged infringement, Kodak is seeking a permanent injunction to prevent further infringement from the two companies, as well as recovery of monetary damages.

“We remain open to negotiating a fair and amicable agreement with these companies, which has always been our preference and our practice with other licensees,” stated Timothy M. Lynch, Kodak’s Chief Intellectual Property Officer.

Perhaps a royalty-based licensing agreement will be in the works. In the increasingly litigious technology world, large companies must decide whether long, drawn out, expensive legal battles and possible import bans outweigh the cost of signing an agreement with a company and paying a fee to use its patented technology.

January 9, 2012, by Mandour & Associates, APC

San Diego – This month, the U.S. Supreme Court heard oral arguments for a lawsuit between Prometheus Laboratories and Mayo Collaborative Services. The Court’s decision could define the patentability of natural phenomena in the realm of diagnostic testing.

Prometheus alleged infringement of two patents used in a medical test that Mayo licensed, then independently offered based on its own statistical findings. The patents, U.S. Patent Numbers 6,680,302 and 6,355,623, encompass the correlation between metabolite levels and the efficacy and toxicity of thiopurine drugs. Prometheus claimed the exclusive license to methods for calibrating the correct dosage of thiopurine drugs, used for treating gastrointestinal and non-gastrointestinal autoimmune diseases.
Prometheus sued Mayo for patent infringement on June 15, 2004 in the U.S. District Court for the Southern District of California. The court granted Mayo’s motion for summary judgment on March 28, 2008. It held the claim’s first two steps of administering a drug to a subject and determining metabolite levels to be unpatentable as necessary data-gathering steps. The third step, the warning of a dosage adjustment was an unpatentable mental step. The district court also found the correlations to be unpatentable natural phenomena resulting from “a natural body process,” and that the inventors did not “invent” the claimed correlation.

Prometheus appealed the district court’s grant of summary judgment on May 16, 2008. The Court of Appeals reviewed the decision and held that the district court erred in finding the asserted claims to be drawn to non-statutory subject matter. It reversed the grant of summary judgment and upheld the patent in Prometheus because the preparatory steps of administering a drug and determining a metabolite level involved “transformations” of matter as the body’s natural reaction to ingestion of drugs. “[D]etermining metabolite levels in the clinical samples taken from patients” was transformative because “determining metabolite levels” included the extraction and measurement of metabolite concentrations.

In so holding, the Court of Appeals applied the Supreme Court’s machine-or-transformation test articulated in earlier cases and concluded that the disputed method fell squarely within the realm of patentable subject matter because its central purpose was to transform an article into a different state.

Mayo appealed the decision to the Supreme Court, which granted a petition for certiorari. However, the Supreme Court remanded the case to the Court of Appeals, stating that the machine-or-transformation test was not the sole test for what constitutes a process under §101, but “a useful and important clue, an investigative tool…” On remand, the Court of Appeals again held the asserted claims were statutory subject matter under §101, because the inventive nature of the claims recited “a particular application of the natural correlations: the treatment of a specific disease by administering specific drugs and measuring specific metabolites [,]” and did not preempt all uses of natural correlations.

Once again, Mayo appealed the decision to the Supreme Court, resulting in the present case.

January 5, 2012, by Mandour & Associates, APC

San Diego – Eli Lilly and Co., the 10th largest pharmaceutical company in the world, will need to overcome several key patent expirations as several of its products have come off patent or will in the future.

In November 2010, Gemzar, a drug used for treating lung cancer, had its method of use claims invalidated by the US Court of Appeals for the Federal Circuit and its matter of composition claims expired that same month. Gemzar previously yielded $750 million in annual revenues for Eli Lilly. The biggest blow to Eli Lilly’s portfolio, however, is their best selling product. Zyprexa, a $5 billion a year drug used for treating schizophrenia, came off patent in October of this year and will now have to compete against cheaper generics. In the coming years, Cymbalta, an anti-depressant drug, comes off patent in 2013 and Evista, an osteoporosis drug, comes off patent in 2014. Further, Alimta, Strattera and Cialis, also come off patent in 2017. Thesedrugs represent more than half of Eli Lilly’s total revenues.

Needless to say, Eli Lilly’s Chief Executive John Lechleiter, recognizes the challenges in front of them. “It may be one of our most challenging periods in our history because, as the way fate would have it, we lose patent protection on a number of products between now and 2014,” said Lechleiter.

At present, Eli Lilly has no plans for a merger with another company or acquiring a smaller company’s products. Lechleiter commented on the potential of future acquisitions, “You can’t just order up a new menu item like it’s McDonald’s. It’s a longer-term cycle. Investors understand that.”

The effects of these patent expirations, however, are already being felt. Eli Lilly was forced to cut thousands of staff worldwide and its stock price has stagnated the past three years. However, Eli Lilly remains optimistic that their product pipeline will help them ride through the coming lean years. Lechleiter notes that they have 66 molecules in human testing in their pipeline. Another potential area of area of optimism for Eli Lilly may be in diabetes treatment. Earlier this year, they sold their rights to Bydueon, a diabetes drug, to Amylin for $1.5 billion. By ending their partnership with Amylin, Eli Lilly freed up its obligations so they could pursue all types of diabetes products. Eli Lilly expects to be competitive in insulin and oral diabetes medicines as well as drugs that stimulate insulin release when glucose levels are too high.