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Google, Merck, Gruyere, Newzbin2: Intellectual Property

Google Inc. owes its creation partly
to a patented software algorithm for ranking documents in a
database, issued to company founder Larry Page and owned by
Stanford University.

The world’s largest search-engine company contends that too
many other software patents hurt innovation more often than they
lead to viable businesses. Google, along with JPMorgan Chase
Co.
and the Yelp Inc. business-review site, say they need to be
able to quickly resolve cases in which a patent owner sues a
large number of companies over widely used software features.

An appeals court specializing in U.S. patent law will
consider the issue today, in arguments about when software
programs represent legitimate innovations and when they simply
computerize ideas that couldn’t otherwise be patented.

“The patent system has had a hard time figuring out what
patents are valid when you are using a computer to make
something easier,” said Lynn Pasahow, who represented
Amazon.com Inc. in its 1999 lawsuit alleging Barnes Noble Inc.
violated a patent for one-click shopping. “There’s an idea out
there that it’s like pornography, you know it when you see it,
or when the Federal Circuit or Supreme Court rules on it.”

The case before the U.S. Court of Appeals for the Federal
Circuit in Washington has divided technology companies that have
filed legal arguments with the court.

Google, Facebook Inc. and Red Hat Inc. say patent standards
are too lax. International Business Machines Corp. warns that
stringent rules could stifle innovation. Computer software was
the fastest-growing area of patents between 1980 and 2005,
according to a report this month by the Brookings Institution, a
Washington research group.

The patents before the Federal Circuit concern a
computerized method for using an intermediary to make sure
buyers and sellers meet their obligations in stock and currency
trading. Patent owner Alice Corp., an Australian company jointly
owned by National Australia Bank Ltd. and Alice Ventures Pty,
filed infringement claims in 2007 against CLS Bank
International
, which settles about $4.5 billion foreign-exchange
transactions daily.

A federal judge in Washington ruled in 2011 that the idea
of using an intermediary to settle trades isn’t eligible for a
patent, and computerizing the notion didn’t make it patentable.

In a 2-1 decision in July, the appeals court reversed that
decision, ruling that Alice’s suit should proceed because the
patents cover “practical applications of the invention” and
not an abstract idea.

The Federal Circuit agreed to have all active judges on the
court rehear the case tomorrow, with a focus on how to determine
if a computer-implemented invention can be patented.

The case is CLS Bank v. Alice Corp., 11-01301, U.S. Court
of Appeals for the Federal Circuit.

Merck Wins Ruling to Block Mylan’s Copy of Zetia, Vytorin

Merck Co. won a U.S. appeals court ruling that will
prevent Mylan Inc. from selling a generic version of the Zetia
and Vytorin cholesterol medicines before April 2017.

The U.S. Court of Appeals for the Federal Circuit in
Washington denied an appeal by Mylan over the patent for the
active ingredient in the drug, ezetimibe. The court posted
notice of its decision to affirm a trial judge’s ruling on its
website yesterday, two days after it heard arguments.

Together, the drugs had about $2 billion in U.S. sales last
year, with Zetia generating $1.33 billion and Vytorin bringing
in $764 million, said Ron Rogers, a Merck spokesman. Sales of
Vytorin, which combines Zetia with Merck’s Zocor cholesterol
pill, have been falling because of questions about its
effectiveness.

“The appellate court appropriately upheld the lower
court’s ruling in April 2012 that found the patent for Zetia and
Vytorin is valid and enforceable,” Rogers said. “We invest
heavily in the research and development that is needed to
discover innovative medicines like Vytorin and Zetia, and we
will vigorously defend our intellectual property rights.”

According to Merck’s third-quarter report, the Whitehouse
Station, New Jersey-based company also sued Impax Laboratories
Inc. and Actavis Inc. over their plans to sell generic versions
of Vytorin. Those cases were put on hold pending the outcome of
the Mylan case, Merck said in the filing.

Mylan, based in Canonsburg, Pennsylvania, conceded that it
infringed the patent, leaving only the issue of whether it was
valid and enforceable. Officials with the company didn’t respond
to e-mail queries seeking comment.

The case is Merck Sharp Dohme Corp. v. Mylan
Pharmaceuticals Inc., 12-1434, U.S. Court of Appeals for the
Federal Circuit (Washington). The lower court case is Schering
v. Mylan, 09cv6383, U.S. District Court, District of New Jersey
(Newark).
BlackBerry Maker Seeks Two U.S. Patents on Retractable Keyboards

BlackBerry, the Canadian maker of BlackBerry mobile devices
formerly known as Research In Motion Ltd., filed two patent
applications for retractable keyboards.

The applications, published in the database of the U.S.
Patent and Trademark Office Feb. 7, cover devices with a
keyboard that can be pulled out from beneath the screen.

The company says making the keyboard retractable will make
it possible for devices to be smaller and yet retain
functionality of the traditional QWERTY keyboard. “As the size
of such handheld devices has decreased, the more important it
has become to utilize the entire keyboard surface as efficiently
as possible,” the company said in its application.

The technology is covered by the 20130033432 and
20130033431 applications.

Last month, the Waterloo, Ontario-based company released
information about its new BlackBerry 10 products, one with a
touch screen and the other with a physical keyboard. The
products will be available in the U.S. beginning in March.

For more patent news, click here.

Trademark

French Gruyere Label Must Include ‘France,’ Commission Rules

“Gruyere” is now a protected geographic designation for a
type of cheese produced in France, according to a Feb. 6
publication
in the Official Journal of the European Union.

French cheese producers will be required to append their
country name to “Gruyere” in the wake of objections lodged by
Australia, New Zealand, the U.S. Dairy Export Council and the
National Milk Producers Federation of the U.S. They had objected
to the registration, saying the term was generic.

Following those objections the European Commission asked
France and the objectors to try to reach agreement. No accord
was reached within a designated time frame, so the commission
made the decision about whether to grant the registration.

The commission found that the evidence submitted by the
objectors wasn’t relevant because it didn’t relate to the use of
the name within the European Union. The commission consulted
with France and Switzerland to determine whether additional
labeling measures would be necessary to avoid misleading
consumers.

The commission determined that “it appeared necessary to
indicate the country of origin, in this case France, on the
label in the same field of vision as the name ‘Gruyere’ in
letters of the same size as those of the name.”

The registration goes into effect Feb. 26, according to the
journal.

For more trademark news, click here.

Copyright

U.K. Court Viewed Infringement Facilitator as ‘Trespasser’

In a case related to unauthorized downloading of copyright-
protected content, a U.K. court ruled that the copyright owners
don’t have the right to profits realized from those who
facilitated the infringement.

Film studios sued the owner of the Newzbin2 website, which
indexed film files posted on Usenet. The studios said the
website facilitated infringement and sought the assets of its
owner.

In 2012, a court found that Newzbin was liable for
infringement, and the site was ordered closed. The studios then
sought the Newzbin owner’s profits.

In a Feb. 5 decision, the U.K. High Court of Justice’s
Chancery Court ruled that no textbook case has suggested that
“that a copyright owner can advance a proprietary claim to the
fruits of a breach of copyright.”

The court used an example of stolen coins and said that
under that scenario, the owner from whom the coins were stolen
was entitled to recover them. In the case of a copyright, the
court said, the copyright owner still owned the copyright, and
the infringer is more akin to a trespasser than an actual thief.

The property owner isn’t entitled to the fruit of the
trespass under U.K. law, and neither is the copyright owner
entitled to proprietary rights in the infringers profits,
according to the opinion.

The case is Twentieth Century Fox. v. Harris, [2013]EWHC
159.

Google Receives 13.6 Million Takedown Requests in January

Google Inc., operator of the world’s most-used search
engine, received requests to remove 13.6 million websites in
January, according to the Mountain View, California-based
company’s data.

The company posts a “transparency report’ on its website,
listing the number of takedown requests it receives under the
Digital Millennium Copyright Act or under trademark law. Last
month, in addition to the removal of the URLs, copyright and
trademark owners sought removal of 43,015 specific Internet
domain names.

Degban Ltd., a multimedia copyright-protection agency,
filed the greatest number of removal requests last month, 2.8
million. The Recording Industry Association of America, a music-
industry trade group, came in second, with 1.9 million takedown
requests.

For more copyright news, click here.

To contact the reporter on this story:
Victoria Slind-Flor in San Francisco at
vslindflor@bloomberg.net

To contact the editor responsible for this story:
Michael Hytha at mhytha@bloomberg.net

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Mystic Maggie

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