REPOST: In patent dispute, Tesla plays offense

Tesla sues pointSET and denies infringing any of pointSET's patents, says this article.
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Image Source: Law.com

In-house lawyers at Silicon Valley darling Tesla Motors Inc. have taken a bold stance against patent infringement claims.

Rather than wait to be sued — and apparently without a general counsel in place — Tesla filed a complaint for declaratory judgment after receiving a demand letter from Los Angeles patent holder pointSET.

In a five-page suit filed June 6 in the Northern District of California, a trio of in-house lawyers argue the technology that allows Tesla owners to remotely control the temperatures of their cars doesn't infringe pointSET's patent directly or indirectly, "either literally or under the doctrine of equivalents."

It's an aggressive response to pointSET's letter, sent April 30, that proposes a licensing agreement. Invoking the jargon of a discount retailer, Global IP Law Group associate Nicholas Dudziak wrote, "For a limited time, pointSET is offering a one-time, fully-paid licensing flat fee of $500,000." The letter went on to note that because management wishes to complete licensing arrangements quickly — the passing of pointSET's president and one of its inventors, Jerry Iggulden, has prompted a review of the portfolio ­— it is offering lower fees for timely agreements.

According to a recent analysis by Mark Lemley, director of Stanford Law School's Program in Law, Science and Technology, declaratory judgment actions aren't totally uncommon, as they represent about 7 to 8 percent of all patent suits. But, he said in an email, "Relying on in-house counsel is a lot less common, and a much riskier strategy."

Tesla has not announced the appointment of a GC since Eric Whitaker, now general counsel at SanDisk Corp., left in November 2012. He had been the third GC in as many years when he was named in 2010.

This tangle with pointSET would not be the first time that Tesla has navigated significant hurdles without a general counsel: Following the December 2009 resignation of Jonathan Sobel, a former Yahoo GC who had spent only a few months at Tesla, the company completed its initial public offering before appointing Whitaker.

For this suit, Tesla is relying on a team that includes associate general counsel Jonathan Butler and Steven Cooper, as well as patent counsel Richard Soderberg.

Spokeswoman Alexis Georgeson said no one from the company could comment on the pending litigation.

Tesla's patent strategy has historically focused on building up its patent portfolio. Tesla noted in its spring 2012 investor presentation that it had been awarded more than 50 patents to date and had more than 230 applications pending.

A search of court records indicates this is the company's only IP litigation. Georgeson did not respond to a request to confirm that.

David Berten, partner and founder of Global IP Law Group, said that when he spoke via telephone to the team from Tesla this week, they declined to share their theory of noninfringement.

"Hey, if you've got a good noninfringement argument, we'll withdraw the letter," Berten said in an interview. "Our positions on this are pretty transparent. It's a little bit of a head-scratcher why Tesla decided to do this."

The parties are scheduled to have an initial case management conference before U.S. Magistrate Judge Nathanael Cousins in San Francisco in September.

More pertinent business litigation news can be accessed at this Twitter page for Evan Granowitz.

REPOST: Teva, Sun Pharma to pay $2.15 bln to settle Pfizer patent suit

Teva Pharmaceuticals Industries Ltd and Sun Pharmaceutical Industries Ltd settles a lawsuit against Pfizer and Takeda Pharmaceutical Co Ltd, says this article.
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Pfizer Inc said Teva Pharmaceuticals Industries Ltd and Sun Pharmaceutical Industries Ltd would pay $2.15 billion to settle a patent infringement lawsuit related to its acid-reflux drug Protonix.

Japan's Takeda Pharmaceutical Co Ltd, Pfizer's partner on the drug, will receive 36 percent or about $774 million from the settlement.

Pfizer won a protracted 10-year legal battle in April 2010 when a New Jersey jury ruled that Teva had infringed the Protonix patent. Teva started selling a generic version of the drug in 2007.

A trial to determine damages began on Monday.

The patent was held by Nycomed - now a Takeda subsidiary. Protonix was licensed to Wyeth, which is now owned by Pfizer.

Israel-based Teva, the world's largest generic drugmaker, will pay $1.6 billion - half this year and the rest by October 2014. India's Sun Pharma will pay $550 million this year.

Teva said in February that it may face legal losses of up to $2.07 billion to resolve the case.

Sun Pharma set aside 5.84 billion rupees, or about $100 million, last November towards potential damages to Pfizer. The company will now have to shell out a further $450 million as final settlement.

"This is not a very positive out-of-court settlement. The agreed amount is way too high for such a settlement," said Daljeet Kohli, head of research at brokerage IndiaNivesh in Mumbai. "It will also restrict Sun's ability to look for acquisitions."

Pfizer's shares were up about 1 percent at $28.66 before the bell, while Teva's U.S.-listed shares were down about 1 percent at $39.51.

Sun Pharma closed little changed at 980.70 rupees, while Takeda's stock closed down 1.4 percent at 4,355 yen.

($1 = 58.4950 Indian rupees)

Evan Granowitz is a civil litigator who was named a Super Lawyers Rising Star in 2009, 2010, and 2011. Visit this website for more information about him and his practice areas.

REPOST: Patent Board's SAP ruling is first under new AIA rules

This article talks about the Patent Board's first ruling under the new America Invents Act rules.

In the first ruling of its kind since the America Invents Act established a new system for reviewing patents, the U.S. Patent and Trademark Office’s Patent Trial and Appeal Board (PTAB) ruled Tuesday that a key patent used in a case brought by Versata Inc. against SAP America Inc. is too abstract and therefore invalid.

The dispute revolves around a business method patent related to dynamic pricing technology, which Versata alleged SAP infringed. In 2007, Versata sued, claiming SAP stole its patented technology, and said that demand for its product dropped precipitously after SAP started offering the same software.

But in the first case to be tried under the covered business method (CBM) post-grant review proceedings initiated under the under Leahy-Smith America Invents Act of 2011, the PTAB ruled that the patent, known as the ‘350 patent,’ is invalid. “Specifically, the claims recite unpatentable abstract ideas and the claims do not provide enough significant meaningful limitations to transform these abstract ideas into patent-eligible applications of these abstractions,” the written decision said.

The case had followed a parallel track in federal court, and in May, the U.S. court of Appeals for the Federal Circuit affirmed a lower court decision ordering SAP to pay Versata $345 million in damages for infringing Versata’s patent. SAP has petitioned the appellate court for a rehearing and that request is pending. The PTAB decision, however, means SAP may have a chance to get the infringement ruling overturned.

“We’re pleased with the decision and pleased for our client,” said Erika Arner, a partner at Finnegan, Henderson, Farabow, Garrett & Dunner, and one of the attorneys who represented SAP at the PTAB trial.

Versata will appeal the PTAB ruling to the Federal Circuit, said Scott Cole, a partner at McKool Smith who represents Versata. The company has also challenged the notion that the PTAB had authority in this proceeding on two separate grounds, Cole said. “We think the decision is completely off base, and we are confident that on review it will be flipped,” he said.

But the PTAB ruling, which was issued only 9 months after the case was first filed, could lead other companies to use this new system to challenge patents based on business methods, said Steven Baughman, a partner at Ropes & Gray who also represented SAP before the PTAB. Baughman, who is counsel on 15 of the 28 petitions that have been filed so far before the PTAB, said the speed with which such cases can be resolved, as well as the broad view of what qualifies as a business method patent, could encourage others to consider such a proceeding. “It’s a good alternative to district court, and we were pleased with the process and the way the board viewed the evidence,” he said. “I think others who were hesitant to go to the PTAB before will now begin to see its benefits.”

Senator Charles Schumer (D-NY) has introduced legislation that would allow other types of patent challenges to be heard by the PTAB—an effort to discourage patent assertion entities, or patent trolls, that use broad patents to sue.

More news and pertinent information about corporate litigation and legislation can be found at this Twitter page for Evan Granowitz.

REPOST: New York Post faces suit over Boston bomb article

This article talks about two men suing the New York Post for defamation and other damages.

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Two men have filed suit against The New York Post, accusing the paper of invading their privacy and inflicting emotional distress by publishing an article that made them look as if they were suspected in the Boston Marathon bombings case.

Salaheddin Barhoum, 16, a high school sophomore, and Yassine Zaimi, 24, a part-time graduate student who works for a financial firm, visited the finish line of the Boston Marathon on April 15 carrying backpacks with running gear because they are both avid runners, according to the lawsuit, which was filed Wednesday in Suffolk Superior Court in Boston. The two men chatted with others watching the marathon and left two hours before the bombings took place, the suit says.

When Mr. Zaimi and Mr. Barhoum discovered their images were circulating on online sites like Reddit as possible suspects, they both visited local police stations to answer questions. Court papers said they were both told that they were not suspects.

On April 18, The New York Post published a front-page photograph of both men carrying backpacks under the headline “Bag Men,” followed by an inside article with two additional photographs of the men. When Mr. Zaimi went to work that morning, his office manager showed him the article and “he immediately started shaking, his mouth went dry, and he felt as though he was having a panic attack,” according to the suit.

Mr. Barhoum learned about the case when he returned home from a track meet that morning and found his home swarmed by reporters, according to the suit. When he saw the newspaper, Mr. Barhoum “became terrified, began to shake and sweat, and felt dizzy and nauseous,” the suit says.

Max Stern, Mr. Barhoum’s lawyer, said the experience had a debilitating impact. “Everything he has attempted has suffered for this experience that has really changed his life and really shook him to his core,” Mr. Stern said.

Suzanne Halpin, a spokeswoman for The New York Post, declined to comment on the lawsuit and referred, instead, to a statement the paper issued on April 18. At the time, Col Allen, editor in chief of The New York Post, wrote: “We stand by our story. The image was e-mailed to law enforcement agencies yesterday afternoon seeking information about these men, as our story reported. We did not identify them as suspects.”

Mr. Stern said that his client never received an apology from The New York Post. “They have been unrepentant,” he said.

The lawsuit, which also claims defamation, seeks unspecified compensatory damages and payment of the men’s legal fees.

More litigation news and updates can be found at this Twitter page for Evan Granowitz.