Bloomberg News

Rolls-Royce, Vibram, Harry Potter: Intellectual Property

July 19, 2011

(This is a daily report on global news about patents, trademarks, copyright and other intellectual property topics. Updates with response from Fila in Vibram patent story.)

July 19 (Bloomberg) -- Rolls-Royce Holdings Plc, the world’s second-largest maker of jet engines, settled a patent dispute with United Technologies Corp.’s Pratt & Whitney unit.

Terms weren’t disclosed. The companies requested in July 15 court filings dismissal of two civil lawsuits against each other. The settlement also covers a related case before the U.S. International Trade Commission that threatened to delay delivery of Boeing Co.’s 787 Dreamliner passenger airplanes.

The companies “reached an amicable, confidential settlement agreement resulting in dismissal of all patent litigation,” East Hartford, Connecticut-based Pratt and London- based Rolls-Royce, said in e-mailed statements.

In May Rolls-Royce lost the case it had brought against Pratt over engine-fan technology, while Pratt’s lawsuit had been on hold pending the outcome of the ITC complaint. Rolls-Royce makes the Trent 1000, which has been designated for Boeing’s newest passenger jet, and the Trent 900 for the Airbus SAS A380, which competes with the GP7200 engine sold by a venture of Pratt and General Electric Co.

A federal judge ruled in May that Pratt’s GP7200 Fan Stage doesn’t violate a patent issued to cover technology in the Trent engine for the A380. Pratt’s lawsuit accused Rolls-Royce of unfairly using patent litigation to keep it from re-entering the biggest segment of the commercial-airline market. Pratt filed an ITC complaint in which the agency is investigating whether the Trent 900 and Trent 1000 infringed a Pratt patent.

The ITC case is In the Matter of Certain Turbomachinery Blades and Engines, 337-751, U.S. International Trade Commission (Washington).

The September case is United Technologies Corp. v. Rolls- Royce Plc, 10cv1523, U.S. District Court for the District of Connecticut (New Haven). The earlier case is Rolls-Royce Plc v. United Technologies Corp., 10cv457, U.S. District Court for the Eastern District of Virginia (Alexandria).

Vibram Claims Fila’s Skeletoes Infringe ‘Five Fingers’ Patents

Vibram SpA, a maker of specialty soles for hiking boots, sued a unit of Fila Korea Ltd. for patent infringement.

The lawsuit, filed July 6 in federal court in Boston, is related to technology used in Vibram’s Five Fingers shoes having a separate compartment for each toe.

According to court papers, Fila USA Inc.’s Skeletoes shoes infringe patents 7,805,860, D579,181 and D582,134. Vibram calls Fila’s sale of the Skeletoes products “objectively reckless,” claiming the South Korean company knew it infringed the Vibram patents.

An ordinary observer would be deceived into thinking the Skeletoes are the same as the designs covered by the three disputed patents, Vibram said in its pleadings.

Fila said it will “vigorously defend itself” against the suit. The company has determined the allegations in the complaint are without merit, Lauren Mallon, Fila’s senior global marketing manager, said in an e-mail.

“Though Vibram is generally credited with launching the minimalist trend in the footwear industry,” Mallon said her company’s product “joins a long history of shoes with articulated toes and represents a more accessible approach to this rapidly expanding minimalist footwear category.”

Vibram asked the court for both temporary and permanent orders against future infringement of the disputed patents, and an award of money damages “no less than a reasonable royalty.”

The company is represented by Michael J. Rye of Cantor Colburn LLP of Hartford, Connecticut.

The case is Vibram SpA v. Fila USA Inc., 1:11-cv-11192-PBS, U.S. District Court, District of Massachusetts (Boston).

HTC Shares Fall in Taipei After ITC Ruling on Apple Patents

HTC Corp. fell in Taipei trading after the U.S. International Trade Commission ruled its Android-based mobile phones infringed two Apple Inc. patents.

Asia’s second-biggest maker of smartphones declined 4 percent in the first day of trading in Taipei following the July 15 ruling. HTC says it will appeal and is subject to review by the full commission.

HTC has its own patent complaint against Apple at the commission, which could ban imports of some HTC phones that run on Google Inc.’s Android operating system if the decision is upheld.

“We expect HTC’s share price to be volatile in the next 12 to 18 months due to these lawsuits,” said Daniel Chang, an analyst at Macquarie Group Ltd. in Taipei. “Longer term, the cost of Android phones is likely to rise gradually and impact either market share or margin.”

In its complaint, Cupertino, California-based Apple had accused HTC of violating 10 patents involving how operating systems work on mobile phones. Administrative Law Judge Carl Charneski found it infringed two of them.

“While this is not the best outcome, the ITC ruling should still beat the market’s expectations,” Chialin Lu, a Samsung Securities Co. analyst, wrote in a report July 18. “The two violated patents are less critical and are seemingly unrelated to the usage of multitouch and the core of the Android operating systems.” Lu kept a “buy” rating on the stock.

HTC, based in Taoyuan, northern Taiwan, will purchase as many as 20 million of its own shares by Sept. 17, it said July 16, a day after the patent ruling was announced.

Half of the repurchased shares will be transferred to employees, and the remainder canceled. The company will also pay a 2010 cash dividend of NT$37 per share, and 50 shares for each 1,000 currently held, on July 20.

HTC agreed on July 6 to buy S3 Graphics Co. for $300 million after the maker of video-game graphics chips won an infringement ruling at the trade agency against Apple. The findings in HTC’s patent complaint against Apple at the commission are scheduled to be released Sept. 16.

The ITC is a quasi-judicial arbiter of trade complaints that has become the venue of choice for resolving patent disputes. Nokia Oyj, which had been targeted in the same ITC complaint, reached a settlement with Apple last month. Mountain View, California-based Google wasn’t a party in the case.

For more patent news, click here.

Trademarks

Galaxy Pageants Accused of Infringing Internal Pageants’ Marks

Galaxy Pageants Inc., a Troy, Michigan-based company that presents beauty pageants in the U.S., Canada, the U.K. and the Bahamas, was sued for trademark infringement by a competing organization.

International Pageants Inc., of Roanoke, Virginia, claims Galaxy has deliberately made unauthorized uses of its trademarks, and has deliberately set one of its pageants at the same site International uses in the Chicago area.

Galaxy’s website indicates upcoming Mrs. Galaxy, Ms. Galaxy, Miss Galaxy and Miss Teen Galaxy pageants in Illinois, with entry fees of $450. A Mrs. International pageant sponsored by International Pageants is set for July 22-23 in Illinois with contestants from the U.S., Russia, the Philippines and India.

According to the complaint filed July 15 in federal court in Roanoke, the public is likely to be confused by the unauthorized use of International Pageants’ marks.

International Pageants asked the court to order Galaxy to halt infringing the marks and to bar it from conducting any pageants in the facility in Skokie, Illinois, International used.

It also seeks awards of money damages, including profits Galaxy derived from its alleged infringement, together with attorney fees and litigation coasts. It also asked for an order for the seizure and destruction of all products and promotional material that allegedly infringes the marks.

Maria Torres, Galaxy’s chief executive officer, said she was forwarding Bloomberg’s request for comment to her trademark attorney.

International Pageants is represented by William B. Poff, Joshua Forrest Pescud Long and Michael J. Hertz of Woods Rogers Plc of Roanoke, Virginia.

The case is Richardson v. Galaxy Pageants Inc, 7:11-cv- 00343-MFU, U.S. District Court, Western District of Virginia (Roanoke).

For more trademark news, click here.

Copyright

Harry Potter British Plagiarism Case Dropped Over Court Costs

J.K. Rowling, the world’s richest author, and her publishers won a bid to dismiss a U.K. lawsuit alleging she copied part of a children’s book about a wizard when writing “Harry Potter and The Goblet of Fire.”

The estate of deceased English author Adrian Jacobs was unable to pay 1.4 million pounds ($2.2 million) to the court as security for costs. The estate claimed Rowling copied concepts and themes such as wizard prisons, wizard hospitals and wizard colleges from Jacobs.

“J.K. Rowling outspent the estate,” Max Markson, spokesman for the estate of Adrian Jacobs, said in a telephone interview yesterday. “If the case had its day in court, the result might be totally different.”

Jacobs’s estate sued Bloomsbury Publishing Plc in London in 2009, alleging part of his 1987 book “The Adventures of Willy the Wizard: No. 1 Livid Land,” was copied by Rowling. In October, Judge David Kitchin declined to dismiss the case.

The case is Paul Gregory Allen v. Bloomsbury Publishing Plc, case no. 09-1979, High Court of Justice, Chancery Division (London).

Australia Ombudsman Not Immune From Copyright Infringement Suit

The ombudsman’s office in the Australian state of New South Wales isn’t protected from copyright infringement lawsuits, a judge ruled, dismissing its request to throw out a U.K. software developer’s complaint.

Micro Focus International Plc’s U.S. unit claimed in a suit filed in May that the New South Wales ombudsman installed illegal copies of its ViewNow computer software. The ombudsman’s office argued a 1974 law gives it immunity from lawsuits and sought to have the suit dismissed or put on hold.

“The immunity conferred on the NSW ombudsman and its officers is limited in scope and extent,” Federal Court Judge Jayne Jagot wrote in a July 15 ruling, made available yesterday on the court’s website.

The ombudsman’s office installed ViewNow for 25 users, according to court documents. Micro Focus claims the ombudsman didn’t have a license for the installations and infringed its copyright.

Jagot’s ruling allows Newbury, U.K.-based Micro Focus to pursue compensation claims against the ombudsman’s office for the alleged copyright infringement. Officials from the ombudsman’s office didn’t immediately respond to a request for comment.

Ombudsman staff use the software to access records of the New South Wales police force under a system known as Computerized Operational Policing System, or COPS.

The ombudsman uses the system to investigate complaints against the police, monitor police investigations and provide reports to parliament, according to the court records.

The case is Micro Focus (US) Inc. vs. State of New South Wales. NSD640/2011. Federal Court of Australia (Sydney).

For more copyright news, click here.

Trade Secrets/Industrial Espionage

Corning Accuses Hebei Dongxu of Misappropriating Trade Secrets

Corning Inc. filed suit in the Beijing Second Intermediate People’s Court against Hebei Dongxu Investment Group Co., alleging misappropriation of certain trade secrets related to process for manufacturing active matrix liquid crystal displays, according to a July 18 company filing.

Corning and Samsung Corning Precision Materials also filed suits in Korea’s Daejeon District Court against Beijing-based Hebei Dongxu, one of that company’s officers, and two other named individuals, for related trade secret misappropriation.

The company said it is seeking monetary damages, and an order restraining Hebei Dongxu from using, disclosing, or permitting others to use misappropriated technology.

Two individuals named in Korean suit were previously convicted in Seoul Southern District Court on Jan. 22, 2009, for theft of certain Corning LCD glass technology that was being used by Samsun Corning Precision Materials.

IP Moves

Jones Day Hires DLA Piper Litigator Robert Kantner for IP Group

Jones Day hired Robert Kantner for its IP practice, the Washington-based firm said in a statement.

Kantner, a litigator, joins from Chicago’s DLA Piper LLP.

He’s handled copyright, patent, trademark, antitrust and contract disputes, mainly for clients in the telecommunications, software and 3electronic-payment industries. He’s also represented law and accounting firms in malpractice cases, including those related to intellectual property.

Kantner has an undergraduate degree from the University of Virginia and a law degree from Harvard University.

--With assistance from Joe Schneider in Sydney; Weiyi Lim in Singapore; Yu-Huay Sun in Taipei; Brian Welcher in Atlanta; Ben Moshinsky in London; Rachel Layne in Boston; and Susan Decker in Washington. Editors: Glenn Holdcraft, Mary Romano.

To contact the reporter on this story: Victoria Slind-Flor in Oakland, California, at vslindflor@bloomberg.net.

To contact the editor responsible for this story: Michael Hytha at mhytha@bloomberg.net.


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