Continuing the ASCAP theme, WB Music Corp., Milksongs, and Hunglikeyora Music filed suit against the owners and operators of Louie’s Lakehouse of Southwick Massachusetts, alleging infringement of the songs “Shut Up And Dance,” “And So I Know,” and “Drive” by allowing them to be performed in the restaurant on July 16, 2017. According to the complaint, ASCAP representatives tried on over sixty occasions since 2008 to contact the defendants to offer an ASCAP license, all of which were refused. This is one of six ASCAP-styled suits naming at least one of the same plaintiffs that were filed yesterday in Illinois, Louisiana Maryland, and Wisconsin as well as Massachusetts.
I would note that the performances of the Hendrix songs just referenced took place on July 14, 2017, and that the road from Southwick, located just west of Springfield, MA to Marlborough, home of the Bolton Street Pub, leads directly towards Boston – perhaps more such suits will arise in the coming days based on what appears to be a road trip taken by an ASCAP representative to explore unlicensed performance spots.
Experience Hendrix, which (according to its website) is owned and operated by members of Jimi Hendrix’s family, sued the owners and operators of the Bolton Street Pub of Marlborough, MA for allowing several copyrighted Jimi Hendrix’s songs to be performed without license. The Bolton Street Pub appears to offer entertainment most weekend nights in the form of cover bands. Experience Hendrix asserts that it is a member of ASCAP, an association that licenses performance rights to members’ copyrighted musical compositions, and that despite repeated requests, the Bolton Street pub have refused ASCAP’s license overtures. Experience Hendrix seeks an injunction preventing the Bolton Street Pub from publicly performing, causing, or permitting to be performed three particular Jimi Hendrix songs – “Fire,” “Purple Haze,” and “Stone Free” – and seeks statutory damages and attorneys’ fees.
Caris filed suit asserting that Foundation Medicine’s FoundationOne®, FoundationOne® Heme, and FoundationACT® products infringe five Caris patents covering systems for generating reports identifying therapeutic agents for cancer treatment based on molecular profiles of the tumor. Caris alleges willful infringement, citing to statements in Foundation’s 10-K SEC filings that identify Caris as a direct competitor and that indicates that competitors “may also use their patent portfolios, developed in connection with developing their tests, to allege that [Defendant’s] products infringe their patents, and [Defendant] could face litigation with respect to such allegations and the validity of such patents.”
Janssen Biotech brought this case asserting infringement of a patent related to the manufacture of Remicade®, a biologic medicine used to treat rheumatoid arthritis, plaque psoriasis, Crohn’s disease, and other disorders involving the immune response. Celltrion moved to dismiss, on the grounds that not all co-owners of the patent were joined as plaintiffs – the assignments from some of the inventors was to “the COMPANY,” which was defined elsewhere in the assignment agreement as Centocor, the predecessor to Janssen, and Johnson & Johnson and its existing and future subsidiaries, divisions and affiliates, none of whom were named as plaintiffs. Judge Wolf, interpreting the agreement under New Jersey law, found that this language did not apply to the assignment itself. The assignment clause required assignment of any invention made by the employee “during [his] employment with the COMPANY;” yet the inventors worked for only one company and did not work for Johnson & Johnson, which created ambiguity as to what was meant. Looking to extrinsic evidence to understand what the parties to the contract intended, Judge Wolf determined that the assignment was intended to be only to Centocor, making Janssen the sole assignee. Accordingly, the motion to dismiss was denied.
FWK Holdings brought this class action antitrust suit, alleging an illegal reverse payment settlement between Shire defendants and Actavis defendants relating to the drug Intuniv, which is used to treat hypertension and ADHD. Each defendant moved to dismiss the complaint for failure to state a claim. The case was reassigned to Massachusetts, as it was related to an existing Massachusetts case, Picone et al. v. Shire I.S., Inc. et al. (16-cv-12396). In the complaint, the plaintiffs allege that Actavis had introduced compelling evidence at an ANDA trial that Shire’s patents listed in the FDA’s Orange Book as covering Intuniv were invalid, and that in April, 2013, Actavis and Shire settled the litigation by having Actavis, the first generic to file an ANDA, agree to delay entry into the generic market until December of 2014 in return for Shire implicitly agreeing not to launch an “authorized generic” (“AG”) during the 180-day period of generic exclusivity for Actavis that followed. The agreement allowed Shire to market its own AG, but prevented it from marketing an AG through a third party; the defendants assert that Shire had in fact agreed not to market an AG itself but avoided putting that into the agreement to avoid antitrust scrutiny. The plaintiffs allege that this scheme constituted an anticompetitive reverse payment agreement, banned under prevailing law, that resulted in Shire earning $424 million in additional sales free from generic competition and in Actavis generating $84.5 million in profits during its period of generic exclusivity. This scheme purportedly cost American purchasers of the drug half a billion dollars. The complaint alleges restraint of trade in violation of Section 1 of the Sherman Act and monopolization in violation of Section 2 of the Sherman Act.
Judge Burroughs recognized that reverse payments, while potentially actionable, are not ipso facto antitrust violations. Courts are to make a rule of reason analysis, looking at the size of the payment in relation to anticipated future litigation costs, and existence, or lack thereof, of other convincing justification to determine whether the payment was made to prevent the risk of competition. She noted that the First Circuit had stated in dictum that no-AG agreements can constitute illegal reverse payments, a position expressly held by other courts, and determined that it formed a sufficient basis for an antitrust complaint here. Applying the rule of reason, Judge Burroughs noted that the plaintiffs had alleged that Shire’s alleged retention of the right to market an AG was illusory, given that common industry practice (and Shire’s own past practice) was to launch such products through bona fide third parties to avoid Medicaid pricing regulations, that Shire had, prior to the settlement, planned to launch an AG through a third party, and that following settlement, Shire never launched an AG. These allegations, combined with the allegation that the defendants settled the underlying litigation only following a trial at which Shire seemed poised to lose, plausibly alleged that an implicit no-AG agreement existed. Accordingly, the motion to dismiss was denied.
Caliper, a subsidiary of PerkinElmer, accuses Alere of willfully infringing six patents relating to microfluid analytical systems by sale of its epoc® Blood Analysis System. Four of the patents expired this year, and the other two are to expire in April, 2019 and April, 2020. Caliper asserts that it made Alere aware of the patents in February (as to some patents) or September (as to the rest), and that Alere’s infringement is thus willful. Direct and induced infringement are claimed, and damages, enhanced damages and attorneys’ fees are sought. Caliper does not, however, seek injunctive relief, despite two of the patents having more than two and more than three years of life remaining.
Magistrate Judge Boal granted in part and denied in part Plaintiff’s motion to compel in a case involving claims of patent infringement, correction of inventorship and breach of contract. With respect to requests relating to customer identification information, she determined such information was relevant to infringement and damages, as well as to the breach of the non-disclosure agreement alleged, but limited the scope of the interrogatories to exclude communications with third parties who were not customers, potential customers, or distributors, and limited the subject of the communications to the accused products. Similarly, Judge Boal allowed the motion to compel sales information that underlies the summary spreadsheets produced by the defendants, but limited other requests that sought “all documents and things pertaining to” requests and requests seeking sales information on non-accused products as overly broad – “[c]ourts may find requests overly broad when they are couched in such broad language as to make arduous the task of deciding which of numerous documents may conceivably fall within their scope.” Finally, Judge Boal denied requests for information on each named inventor’s contribution to the specification and drawings of the disputed patents, finding that, as the inventorship dispute focusses on the claims, evidence on contributions to the specification is not proportional to the burdens imposed by the request.