This week in IP: Starbucks faces trade secrets suit, Kanye West IP meltdown
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This week in IP: Starbucks faces trade secrets suit, Kanye West IP meltdown

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Novartis reveals details of HQ raid; sustainable energy patenting tails off; Ford to pay $105m for trade secrets misappropriation; ‘Doctor Zhivago’ copyright claim fails; UK ‘counterfeit street’ to be bulldozed

How Spain’s IP police busted cyber criminals ring

It was a routine day in early 2020 at the anti-piracy unit of the Spanish National Police.

For regular officers, this may have meant patrolling the streets. But in this department, officers were on ‘cyber patrol’.

The head of the investigation, speaking to Managing IP on the condition of anonymity, explained how the unit completed one of the first investigations of its kind into sellers using ‘hidden links’ to push fakes.

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Other stories published by Managing IP this week include:

EPO digital updates welcome but not deadline moves: attorneys

Lawyers predict bleak future for defensive TM filing in China

Exclusive: Peppa Pig owner slams 'groundless' Vietnam lobbying

Court of Appeal upholds landmark Apple v Optis ruling

In-house want more IP efficiencies in forecasted recession

Counsel: war and economic woes behind sharp EUTM dip

‘Creative’ Dutch judges tipped to shine at UPC

UPC judge conflicts could lead to ‘ugly’ spats, warn counsel

USIPA 2022: Use data and programmes to enhance D&I

USIPA 2022: Vidal says policy now her focus

Starbucks hit with trade secrets suit over Frappuccino lip gloss

A Los Angeles company sued Starbucks at the US District Court for the Western District of Washington on Friday, October 21, for violating its trade secrets to create a coffee-flavoured lip balm.

Balmuccino alleged that its trade secrets were revealed to Mesh Gelman, Starbucks’s head of product development and senior vice president, during a meeting between the parties in 2017.

Balmuccino claimed that it had shared “substantial information” concerning its trade secrets during the meeting.

In 2018, Balmuccino learned that Starbucks had contacted one of its suppliers to enquire about coffee-flavoured lip balms and that the specifications received by the prospective manufacturer to create prototypes were identical to those shared by Balmuccino during the meeting.

In 2019, Starbucks announced the launch of the S’mores Frappuccino Sip Kit.

The plaintiff had previously filed a version of the latest lawsuit in the Superior Court of California, County of Los Angeles in 2019. The forum dismissed the suit because of lack of jurisdiction. That ruling was also upheld on appeal.

In its filing before the Washington court, Balmuccino alleged that Starbucks breached its confidence, misappropriated its trade secrets, and violated oral and implied-in-fact contracts between the parties.

It has also claimed an unspecified amount in damages.

Novartis links HQ raid to patent feud with Eli Lilly

Novartis revealed in a financial report published on Tuesday, October 25, that its patent enforcement tactics to protect psoriasis drug Cosentyx from competing products prompted Swiss authorities to raid its Basel headquarters last month.

In April 2020, the Swiss Competition Commission (COMCO) began investigating Novartis' acquisition of certain patents from Genentech, a subsidiary of Swiss pharma company Roche.

COMCO was concerned about Novartis’ enforcement of these patents against Eli Lilly and other competitors, according to the report.

The antitrust watchdog has been investigating whether Novartis’ enforcement of the patents violated the Swiss Cartel Act.

In addition to the Swiss authorities, the European Commission had requested information from Novartis on the patent enforcement issue, according to this week’s report.

“Novartis is cooperating with the authorities and will vigorously contest these allegations,” claimed the drugmaker in its report.

Novartis earned $1.27 billion in the third quarter of 2022 from Cosentyx. The total sales for the drug until September this year have amounted to $3.71 billion.

Renewable energy innovation 'tailing off', says report

Innovation in the field of sustainable energy has been tailing off, analytics company Clarivate concluded in a report published on Wednesday, October 26.

The report claimed this has happened because some of the technologies, including solar photovoltaic and wind, had reached maturity.

Patent activity for renewable energy in mainland China was strengthening but not keeping pace with its overall patenting in other areas, according to the report.

The report also noted that the US was facing a decline in renewable energy patenting.

The report found that China, Saudi Arabia, Canada, the US and Switzerland were the top five jurisdictions for inventive impact.

Ed White, chief analyst and vice president of IP and innovation research at Clarivate in London, said securing a habitable, sustainable planet for future generations was one of the world’s most pressing concerns.

“Our study provides innovation intelligence to bridge the information gap between ambition and action – so that funders, corporations, governments and researchers can better understand the state of the current research and innovation ecosystem for renewable energy sources and its likely future shape.”

Ford ordered to pay $105m in trade secrets suit

A jury at the District Court for the Eastern District of Michigan ordered Ford to pay Versata Software nearly $105 million on Wednesday, October 26, for breaching a licensing contract and misappropriating trade secrets.

Around $82.2 million of the damages was for breach of contract while the rest was for the trade secret misappropriation. Ford said it would appeal the decision.

Versata claimed that it licensed its software to the car company from 1998 to 2015, but that the automotive business started to copy its software and rejected an offer to get a renewed licence to Versata’s software.

The trial lasted 15 days, with jury deliberation taking two days. Judge Matthew Leitman presided over the dispute.

Winston & Strawn advised Versata Software.

Copyright suit over ‘Doctor Zhivago’-inspired novel fails

A descendant of 'Doctor Zhivago' author Boris Pasternak lost a copyright claim against the writer of a novel about her great-uncle on Tuesday, October 25.

Anna Pasternak’s complaint against Lara Prescott, author of a novel called 'The Secrets We Kept', failed in part because she admitted she had not read the allegedly infringing book.

The suit accused Prescott of lifting elements of Anna Pasternak’s book 'Lara', which chronicled the life of Olga Ivinskaya, who was a friend of Boris Pasternak.

But England and Wales High Court judge Mr Justice Edwin Johnson said a level of similarity was inevitable when two works drew on the same historical sources.

Johnson drew attention to Pasternak’s admission that she hadn’t read 'The Secrets We Kept'.

“It struck me as extraordinary that an author could bring a copyright claim, claiming infringement of the copyright in their own book, without actually having read the book which is alleged to infringe their copyright,” Johnson wrote.

However, Pasternak was successful on one ground. The court found Prescott had infringed copyright by using the translation of a quote without acknowledging the translator.

Adidas claims to own design rights after cutting ties with Ye

Adidas said on Tuesday, October 25, that it is the sole owner of all design rights stemming from its partnership with Ye, also known as Kanye West, after cutting ties with the artist.

The shoe company terminated the partnership with the artist after he made anti-semitic comments and wore a “White Lives Matter” shirt at a fashion show in Paris earlier this month.

The shoe business obtained design patents, in 2017 and 2018, which covered the Yeezy Boost 350 shoes. Ye obtained a design patent for the Yeezy Slide in 2020.

In its statement, Adidas stated that it would terminate the partnership with Ye immediately, end production of Yeezy- branded products and stop all payments to Ye and his companies.

UK ‘counterfeit street’ to be bulldozed

Authorities in Manchester, UK, will seize and demolish buildings on the city’s notorious road dubbed ‘counterfeit street’, police announced this week.

Greater Manchester Police will begin an operation next week to provide what it calls a radical solution to the high levels of criminal activity on Bury New Road.

The street is dotted with shops known to sell counterfeit merchandise. It is also associated with prostitution, drug-dealing and gang-related crime.

Commenting on the plan to revamp the area, Neil Blackwood, a detective superintendent, said: “We are going for closure orders, with Manchester City Council, then compulsory purchase orders.”

Blackwood said the counterfeit stores provided an outlet for criminal gangs to raise funds which were linked to money-laundering, gun crime, drugs, and prostitution.

"Counterfeiting has been around for a very long time but the criminality has shifted into prescription drugs, sexual exploitation, and illegal immigration,” he said.

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