IP SOLUTIONS BLOG

The loss of patent protection on blockbuster drugs for Pfizer Inc. and Eli Lilly & Co. weighed on the drug makers’ latest earnings results, The Wall Street Journal reported today.  Pfizer said its earnings fell 50% amid a prior-year tax settlement and as U.S. market exclusivity for its top-selling cholesterol drug Lipitor ended in late November.  Eli Lilly’s earnings fell 27% as recent patent expirations, namely on antipsychotic drug Zyprexa, hurt its margins and revenue.
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John Arrowsmith, Scientific Director, IP Solutions: Patent expirations are largely built into the market and earnings expectations on the street, but those reports do not reflect the amazing activity and innovation in the industry.  The pharmaceutical industry has officially started its drug discovery metamorphosis.  While the change may not immediately win the hearts of Wall Street, R&D in pharma is transitioning to a much more targeted, patient-specific  approach that incorporates repurposed drugs, biopharmaceuticals and the use of Biomarkers to target increasingly specialized, patient-specific treatments.  As we forecast in our end-of-year 2011 research report The Changing Role of Chemistry in Drug Discovery, the pharmaceutical industry has moved on from its blockbuster mindset to a more science driven approach of being first or best in class in delivering differentiated and reimbursable drugs to patients.

For evidence of the trend, look no further than this chart, which shows the increase in the use of Biomarkers related to drug development over the past three years:

This is an interesting time for our business as we provide much of the content, technology and expertise to support our customers in their migration to developing therapies for more targeted populations of patients, use of biomarkers, and efforts to repurpose drugs.

John Arrowsmith Innovation

CBS News Seattle catapulted a single patent into a national news story when it dubbed Microsoft’s new GPS technology the “avoid ghetto feature.”  The patent in question protects technology that allows users to plot a route to avoid an “unsafe neighborhood or being in an open area that is subject to harsh temperatures.”  It uses crime statistics and weather data and includes them when calculating a route.
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Laura Gaze, Senior Marketing Manager, IP Solutions: This news story has created a fair amount of controversy focused on the technology’s potential to hurt the reputations – and economies – of certain neighborhoods as well as the political correctness of the concept.

For those of us at the intersection of data and IP, it seems the bigger question this new patent raises is: What are the implications of technology that can use objective data to make subjective determinations?

The Microsoft patent determines “safety” by cross-referencing against crime and temperature statistics.  The fact is, we’ve come to a point in our ability to store and rapidly query vast databases that all manner of subjective interpretations can now be made by technology.

Industry analyst Rob Enderle summarized the phenomenon in an interview with NPR:

“The new GPS feature has nothing to do with race or income — it’s about technology doing for us what it’s supposed to be doing. ‘It’s part of an overall effort to make navigation systems more intelligent so they keep you out of danger, whether you’re driving or you’re on foot.’”

How will this forward march of data-based decision support influence future patent development?  It’s hard to know for sure, but the path is sure to be littered with many more controversial inventions as the lines between objective and subjective continue to be blurred by technology.

Laura Gaze, Senior Marketing Manager, IP Solutions Innovation

On Tuesday, the famous French shoemaker Christian Louboutin SA stepped into the U.S. 2nd Circuit Court of Appeals in Manhattan to make the case that it should own the exclusive right to use a shade of red called “China Red” to coat the bottoms of its popular high heels. The case pits the shoemaker against famous designer Yves Saint Laurent (YSL), which sells a line of shoes whose tops and bottoms are red.  Louboutin was granted a trademark to use the red for its shoe soles in 2008 but a recent court ruling suggests that registration was granted in error. The Wall Street Journal reports on the case which could be an important step in trademark law.
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Bob Stembridge, Customer Relations Manager, IP Solutions: Christian Louboutin’s lawyers have based their case on the argument that the brand has created one of the more iconic trademarks of the 21st century. Much like Tiffany’s hold on robin’s egg blue, the red sole of a shoe is an instant identifier to any footwear fan (both fashion insiders and major city pedestrians).

Susan Scafidi, a law professor at Fordham University and an expert in law and fashion summed up the current issue with intellectual property and the fashion industry when she stated that the Louboutin case showcases the fact that fashion designs “really have no protection,” even though “the industry has been trying for 100 years, but intellectual property law still stops right at fashion’s door.”

In the initial ruling, Manhattan Federal Judge Victor Marrero questioned “whether a color could ever be trademarked for use in fashion,” because within the fashion industry “color . . . performs a creative function; it aims to please or be useful, not to identify and advertise a commercial source.”

If Louboutin was the only shoe designer to use a red sole, does that mean the use of color is a unique element to the Louboutin trade dress? Did Judge Marrero properly interpret trademark law? Are additional findings required around the likelihood of confusion between the two brands? We are curious to see what the appeals court finds; it will be sure to have a big impact on the fashion industry.

Bob Stembridge, Customer Relations Manager, Thomson Reuters Innovation

At last week’s Consumer Electronics Show (CES), Motorola Mobility Holdings, Inc. and Lenovo Group Ltd. announced plans to introduce new smart phones using Intel chips.  The Wall Street Journal reports that the move could be a crucial step for Intel to moving its chip technology into the smartphone market.
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Bob Stembridge, Customer Relations Manager, IP Solutions: While this is an interesting step for Intel, the bigger story here may be in what this move will mean for the continued march of convergence in the smartphone industry.  As our own Bob Schukai, global head of mobile technology at Thomson Reuters, told Investor’s Business Daily when asked about the recent spate of smartphone patent lawsuits:

In many ways this is a rerun of what we saw in the 1990s when GSM patent wars took place. They were suing each other left and right and eventually figured out a way to license patents back and forth… Today the litigation has exploded in ways that are hard to fathom.  So much innovation is happening so fast – in patent systems that have not kept up.

Our research on this topic has echoed Shukai’s comments.  Nearly every smartphone that enters the consumer market is using technology licensed from as many as dozens of other manufacturers.  As this trend continues, expect continued innovation and litigation inspired by convergence.

Bob Stembridge, Customer Relations Manager, Thomson Reuters Innovation

Laura Gaze, Senior Marketing Manager, IP Solutions: The Wall Street Journal reported last week that Detroit automakers are making a bold push to innovate in the small and midsize car market.  Reporters Jeff Bennett and Neal E. Boudette explain:

After gut-wrenching restructurings—GM and Chrysler in government-backed bankruptcies, and Ford on its own—the Detroit Three are all making money. Instead of having to spend a lot on labor costs and retiree benefits, they are pouring money into engineering and designing cars that can go head to head with the best in the industry.

Armed with good-looking, fuel-efficient and technology-packed cars, Detroit’s revived auto makers insist they have a historic opportunity…

It’s a great come-back story, but we have to ask the question: When it comes to innovation, is Detroit really putting its money where its mouth is?

For insight, we turned to our annual State of Innovation report, which tracks patent activity in bellwether technology areas using the Thomson Reuters Derwent World Patents Index®.  The full report for 2012 will be released later this month, but an early peak at the auto industry data suggests that the Detroit come-back story may have some real merit.

Combined, the top 10 North American patent assignees filed 86,788 patents in 2011, with the bulk of them (19,078) focused on alternative powered vehicles.  Another 11,413 patents were focused on transmission technology and 11,279 were focused on navigation systems.  “Fuel-efficient and technology-packed cars” indeed.

Our full report, due in late January, will contain detailed break-outs by manufacturer and comparisons with European and Asian manufacturers.  To receive a copy, please contact us here.  In the meantime, keep an eye on Detroit as a reemerging hotbed of innovation; if IP strategy, marketing campaigns and consumer preferences continue to align in this manner, the Big Three may be on their way to some big wins.

Laura Gaze, Senior Marketing Manager, IP Solutions Innovation