Bloomberg News

Fiserve, EPO, IHOP, One Less, Netflix: Intellectual Property

June 03, 2011

(This is a daily report on global news about patents, trademarks, copyright and other intellectual property topics. Updates with Target item in Trademark section.)

June 3 (Bloomberg) -- Fiserv Inc., the manager of check- processing and cash machines, will have to defend itself again in a patent-infringement lawsuit brought by Advanced Software Design Corp. after an appeals court revived the case.

A trial judge erred in her reasoning when she said Brookfield, Wisconsin-based Fiserv wasn’t infringing an Advanced Software patent, the U.S. Court of Appeals for the Federal Circuit in Washington said in an opinion on its website yesterday. The case was remanded to the lower court for review.

Disputed patent 6,792,110 covers a way to encrypt and decrypt checks to prevent fraud. Closely held Advanced Software, based in Richmond Hill, Ontario, filed the lawsuit after licensing negotiations failed, according to court papers. The companies offer competing products that encrypt selected information on a check that can be matched with visible data.

The three-judge panel of the court also said the trial judge erred in her interpretation of a key term describing the invention. The panel dismissed Fiserv’s appeal of a ruling that rejected challenges to the validity of the patent, saying that issue hadn’t been fully resolved by the lower court and so wasn’t subject to appellate review.

The case is Advanced Software Design Corp. v. Fiserv Inc., 2009-1585 and 2010-1011, both U.S. Court of Appeals for the Federal Circuit (Washington). The lower court case is Advanced Software Design Corp. v. Federal Reserve Bank of St. Louis, 07cv185, U.S. District Court, Eastern District of Missouri (St. Louis).

EPO Reports 11 Percent Increase in 2010 Patent Filings

Patent filings at the European Patent Office in 2010 increased 11 percent from the previous year, according to an EPO statement.

In 2010, the EPO received 235,000 European patent filings, the highest number in the office’s 24-year history. More than 58,000 patents were granted that year.

Residents of the U.S. filed 60,588 applications with the EPO in 2010; followed by Japan, with 41,917; Germany, with 33,129; China, with 12,698; and France, with 11,692, according to the EPO.

The technical field with the greatest number of applications filed in 2010 was medical technology, for which 10,479 applications were received. Other top fields were computer technology, with 8,257 applications; electrical machinery, with 8,241; digital communications, with 7,951; and biotechnology, with 7,435 applications.

Siemens AG filed the most applications, followed by Royal Dutch Philips NV, BASF SE, Samsung Electronics Co. and Qualcomm Inc.

For more patent news, click here.


IHOP Files Second Trademark Infringement Suit Against Church

DineEquity Inc.’s International House of Pancakes unit filed a second trademark-infringement lawsuit against a Missouri-based evangelical group.

The first suit, filed in September 2009 in federal court in Los Angeles, stated the pancake chain’s objection to the International House of Prayer’s use of IHOP-KC to refer to itself.

In December, the pancake chain filed papers with the court asking that the case be dropped, saying the parties were negotiating. The church made no written filings in the first case, according to the court docket.

The new case was filed in federal court in Kansas City, Missouri, on May 27. The allegations made by the pancake chain are similar to those in the earlier case, which isn’t mentioned in the new complaint.

The pancake chain asked the court to bar the church group from using the IHOP acronym. Other than asking for awards of attorney fees and litigation costs, the pancake chain doesn’t request money damages.

In the new case, the pancake chain is represented by Mark D. Hinderks, Mark M. Iba and Elizabeth A. Tassi of Stinson Morrison Heckler LLP of Kansas City.

The new case is IHOP LLP v. International House of Prayer, 4:11-cv-00548-JTM, U.S. District Court, Western District of Missouri (Kansas City). The previous case is IHOP IP LLC v. International House of Prayer, 2:10-cv-06622-SJO-SH, U.S. District Court, Central District of California (Los Angeles).

Target Enters Mediation in Canadian Naming Rights Dispute

Target Corp. and a Canadian clothing retailer entered formal mediation in a dispute over whether the second-largest U.S. discount chain can use its name north of the border.

Target, the 1,750-store company, and Fairweather Ltd. of Toronto are suing each other, alleging trademark infringement and seeking injunctions to prevent the other from using the Target name in Canada.

Target, based in Minneapolis, said in January it planned to start opening about 150 Canadian outlets in 2013 after agreeing to pay C$1.83 billion ($1.87 billion) for 220 store leases of discount chain Zellers from Hudson’s Bay Co.

The mediation, which began yesterday in Toronto under Federal Court of Canada Justice Roger Hughes, is closed to outsiders and the participants were prevented from talking to reporters. If a settlement isn’t reached, the Federal Court trial isn’t scheduled to begin until November 2012.

Closely held Fairweather, controlled by Isaac Benitah, argues that it bought the Canadian rights to the Target name in 2001 from defunct retail group Dylex Ltd. Fairweather said it has operated a Target Apparel store in Toronto since 2005 and has additional locations under the banner in place or planned in other cities.

Student Anti-Bullying Campaign Runs Afoul of T-Shirt Company

One Less Nemesis LLC, a Woodinville, Washington-based t- shirt company, objected to an anti-bullying campaign started by a group of Maryland high school students, the Gaithersburg, Maryland Gazette reported.

The t-shirt company claims trademark rights to “One less” in opposing the “One Less Bully, One More Friend” campaign begun by students from Oxon Hill High School, according to the Gazette.

The students have sold about $500 worth of t-shirts they created to promote the campaign, according to the Gazette.

The school system’s attorney recommended that the student group behind the campaign quit using the name, the newspaper reported.

For more trademark news, click here.


China Spent $22 Million on Government Software, Xinhua Says

Chinese government agencies spent 140.9 million yuan ($22 million) to buy 176,763 legitimate software packages in the October-May period to ensure they are using authorized and legitimate programs, Xinhua News Agency said, citing the National Copyright Administration.

The purchases include 24.9 million yuan for domestically produced software and 116.03 million yuan for software from overseas companies, the official news service said.

Illegal Streaming May Be Felony, Benefiting Netflix, Studios

Hollywood studios including Warner Bros. and Sony Pictures and online movie companies such as Netflix Inc. may benefit from U.S. government efforts to toughen penalties for illegal video streaming.

Congress should change copyright laws to make illegal streaming of video over the Internet a felony offense, Maria Pallante, director of the U.S. Copyright Office, told a House Judiciary subcommittee June 1. Illegal streaming is currently treated as a misdemeanor, and prosecutors have little incentive to file charges in such cases, she said.

Piracy of digital movies, music and software cost businesses between $30 billion and $75 billion in 2008 in the Group of 20 leading global economies, according to a February report commissioned by the International Chamber of Commerce from Frontier Economics, a London-based consulting firm.

Illegal streaming of movies represents a growing threat to Netflix, which rents licensed movies and TV programs to subscribers, David Hyman, the company’s general counsel, said in a May 30 letter to the subcommittee on intellectual property, competition and the Internet.

Streaming technology is quickly becoming the most popular way to transmit stolen content, Michael O’Leary, executive vice president for government affairs for the Motion Picture Association of America, said in testimony at the June 1 House hearing. His group represents leading Hollywood studios including Time Warner Inc.’s Warner Bros., Sony Corp.’s Sony Pictures and Comcast Corp.’s Universal Pictures.

The MPAA backs the idea of felony treatment for illegal streaming, O’Leary said.

A Senate bill introduced on May 12 would make illegal video streaming a felony offense if the website profits from direct sales or advertising of the content and the value of the material exceeds $2,500.

The Senate Judiciary Committee approved a bill May 26 targeting so-called rogue websites, which sell or distribute illegally copied music, movies and consumer products. The measure would allow the U.S. attorney general to seek court orders requiring U.S.-based search engines to stop providing links to infringing sites, among other things.

Within hours of the Senate committee’s vote, Senator Ron Wyden, an Oregon Democrat, said he would use a procedural move to block the bill from reaching a vote in the full Senate, saying the measure takes an “overreaching approach to policing the Internet.”

Google Inc., the world’s largest search engine, has said it has “real concerns” about provisions of the “rogue website” bill, known as the Protect IP act, including the impact that blocking websites would have on free expression. Yahoo Inc., EBay Inc., Visa Inc. and American Express Co. have also objected to aspects of the bill.

The Obama administration on March 15 released a set of recommendations for fighting the illegal sale of pirated software and online content, including changes in laws to make illegal streaming of video a felony “in appropriate circumstances.”

German ISPs Hand Over Subscriber Information, Says

German internet service providers are giving copyright owners identifying information on more than 300,000 subscribers per month, the news website reported.

File-sharers in Germany then receive demand letters from content owners seeking as much as $1,700 to avoid litigation, according to

The enforcement campaign has led to a decline in piracy in Germany and caused legal downloads in the country to increase by 30 percent, reported.

For more copyright news, click here.

IP Moves

DLA Piper Hires Two Patent Litigators From Pillsbury Winthrop

DLA Piper LLP hired Claudia Wilson Frost and Jeffrey L. Johnson for its Houston-based intellectual-property practice, the Chicago-based firm said in a statement.

Both joined from San Francisco’s Pillsbury Winthrop Shaw Pittman LLP. Frost has litigated cases in Texas state courts, federal trial and appeal courts, before the International Trade Commission and the U.S. Supreme Court.

She has an undergraduate degree from the University of Texas and a law degree from the University of Houston.

Johnson, who does both litigation and IP-related counseling, has represented clients in the oil and natural-gas industries, as well as chemical processing, software, polymer chemistry and mineralogy.

He has an undergraduate degree from East Texas Baptist University, a doctorate in organic chemistry and mechanical engineering from Texas A&M University and a law degree from the University of Houston.

--With assistance from Susan Decker and Eric Engleman in Washington and Gary Norris in Toronto. Editor: Stephen Farr.

To contact the reporter on this story: Victoria Slind-Flor in Oakland, California, at

To contact the editor responsible for this story: Michael Hytha at

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