Bloomberg News

Amazon, Samsung, Qualcomm, Google: Intellectual Property

November 17, 2011

(This is a daily report on global news about patents, trademarks, copyright and other intellectual property topics. Adds Crocs Inc. item to patents section.)

Nov. 16 (Bloomberg) -- Amazon.com Inc., the world’s largest Internet retailer, and Discovery Communications Inc. settled their patent disputes over book readers and Internet shopping, according to court documents.

The companies filed requests yesterday to dismiss lawsuits in federal courts in Seattle and Wilmington, Delaware. Details of the agreement weren’t disclosed in the filings. Michelle Russo, a spokeswoman for Silver Spring, Maryland-based Discovery, said the company had no comment on the settlement.

The dispute began in March 2009, when Discovery claimed it had invented some basic technology used in Seattle-based Amazon’s popular Kindle book reader. Amazon hit back with accusations that Discovery’s online store infringed Amazon’s patents on ways consumers refine searches for products or obtain recommendations based on prior purchases.

Discovery, the owner of cable television’s Animal Planet and TLC, said it was seeking royalties on sales of the Kindle and Kindle 2 electronic book readers. The Discovery patent covers a way to distribute electronic text and graphics securely to subscribers and describes a “portable book-shaped viewer.” It was issued in November 2007, the same month that Amazon Chief Executive Officer Jeff Bezos began selling the Kindle.

Amazon began selling its newest version of the Kindle, the Fire tablet computer, yesterday. Officials with Amazon didn’t immediately return messages seeking comment.

The cases are Amazon.com Inc. v. Discovery Communications Inc., 09cv681, U.S. District Court for the Western District of Washington (Seattle); and Discovery Communications Inc. v. Amazon.com Inc., 09CV178, U.S. District Court, District of Delaware (Wilmington).

Wins Early Australia Trial on Apple Infringement Claim

Samsung Electronics Co., embroiled in patent disputes with Apple Inc. around the globe, won an early trial on its claim in Australia that the iPhone and iPad 2 infringe its patents on 3G wireless transmissions.

Australia Federal Court Justice Annabelle Bennett yesterday ordered that a trial on Samsung’s claims be held in March. Cupertino, California-based Apple had opposed an early trial, with its lawyer Stephen Burley saying the company needed more time to prepare the case and favored a hearing in August.

Samsung, the world’s biggest maker of smartphones last quarter, dropped its bid for a temporary injunction barring Apple from selling the iPhones and iPad 2 and instead is seeking an early hearing. The Australian trial will be a prelude for Samsung in its U.S. case before the International Trade Commission on similar claims, which Burley said will be heard in May and June.

Burley had sought to delay the Australian trial to August, after the ITC hearing. The ITC has the power to block imports of products found to infringe U.S. patents.

The world’s two biggest makers of smartphones and tablet computers have widened their litigation to Europe, Japan and Australia since Apple sued Samsung in the U.S. in April, claiming the Suwon, South Korea-based company “slavishly” copied the designs of iPhones and iPads.

Samsung and Apple had a “very close relationship” until April, Samsung’s lawyer Neil Young told the judge today, with Samsung adhering to an “informal policy” not to pursue patent claims to maintain the relationship.

That was terminated in April, Young said. Apple never sought to obtain a license from Samsung, although “other major players” have, he said, without identifying the companies.

Samsung sued Apple in Australia in September, claiming the iPhone 3GS, iPhone 4 and iPad 2 infringed its patents for wireless transmission. The lawsuit was in response to Apple’s request for a court order barring the sale of the Galaxy Tablet 10.1 in Australia, claiming the device infringed its patents. Bennett granted Apple’s request for an injunction on Oct. 13.

Samsung has appealed the ruling, with a hearing before the full court of the federal court scheduled for Nov. 25.

Samsung also sought an order from Bennett declaring that Apple’s patents, at issue in the Galaxy tablet dispute, be revoked. Samsung claims the Apple patents on touch screen technology, sliding to unlock, scroll bounce and scrolling photos aren’t new.

The case is: Apple Inc. v. Samsung Electronics Co. NSD1243/2011. Federal Court of Australia (Sydney).

Qualcomm Quizzed Again by EU Regulators Over Antitrust Complaint

Qualcomm Inc., the biggest maker of chips for mobile phones, was asked for information by European Union regulators investigating an antitrust complaint, two years after the EU dropped an investigation of the company.

The European Commission asked Qualcomm last month to supply “additional documents and information” related to a complaint filed last year by Icera Inc., a maker of wireless chips, the company said in a regulatory filing.

“We continue to cooperate fully with the commission’s preliminary investigation,” San Diego-based Qualcomm said in the filing.

The commission, the antitrust agency for the 27-nation EU, in 2009 dropped a four-year probe into the company that started after competitors complained the chipmaker was charging excessive royalties on patents. Qualcomm said last year the latest complaint is similar to previous ones.

Nvidia Corp., a maker of graphics chips, earlier this year bought closely held Icera for $367 million to add radio processors needed in phones and tablets.

Nvidia declined to comment immediately.

Crocs Files U.S. Patent-Infringement Suit Against Walgreen

Crocs Inc., maker of closed-cell resin shoes, sued Walgreen Co., accusing the drugstore chain of selling shoes that infringe two patents.

The “Caribbean Cartel” shoes sold at Walgreen infringe a design patent and a patent for “breathable footwear pieces,” according to the complaint. Crocs said this patent -- 6,993,858 B2 -- was the subject of a federal appeals court ruling in February 2010, which found all the elements of the patent were valid.

The design patent -- D610,784 -- allegedly infringed by the Walgreen shoes covers the design for Crocs’ “Crocband” shoe, which “combines the iconic look of crocs molded footwear with a sport midsole band evoking the retro sneaker style.” This shoe is one of Niwot, Colorado-based Crocs’ best-sellers, the company said in its complaint.

Crocs asked the court for an order barring the sale of infringing shoes, and for awards of money damages, profits derived from the sale of the allegedly infringing shoes, and attorney fees and litigation costs. Additionally, the shoe company argued it is entitled to have the damages award tripled because of what it says is “deliberate and willful infringement.”

Deerfield, Illinois-based Walgreen didn’t respond immediately to an emailed request for comment.

Crocks is represented by Edwin P. Aro of Washington-based Arnold & Porter LLP.

The case is Crocks Inc., v. Walgreen Co., 1:11-cv-02954- MSK, U.S. District Court, District of Colorado (Denver).

For more patent news, click here.

Trademark

Kellogg Gives to Mayan Archeology Group, Drops Trademark Dispute

Kellogg Co., maker of Cocoa Puffs, Froot Loops and Rice Krispies cereals, made a $100,000 contribution to a non- governmental group involved with the protection of the Guatemalan biosphere, according to a joint statement released yesterday.

The contribution follows a trademark dispute in which the cereal-maker accused the Walnut Creek, California-based Maya Archeology Initiative, to quit using a toucan as a logo. Battle Creek, Michigan’s Kellogg claimed the rainbow-billed toucan trademark it used on its Froot Loops package was infringed by MAI’s logo featuring a toucan standing in front of a Mayan pyramid.

The dispute has been settled, MAI spokesman Sam Haswell said in an e-mail yesterday. In addition to making the donation, the cereal company has pledged to provide space on the back of one million Fruit Loops cereal boxes in the next year to help educate American children and their parents about the Maya culture.

He said the donation was made as the result of a “discussion about the Maya culture and the difficulties faced by Maya children in Guatemala” and was separate from the legal dispute. The donation will go toward the establishment of a cultural center in a rural area near Guatemala’s eastern border with Belize, a priority project for MAI.

The organization continues to use its toucan image. “So long as MAI doesn’t start selling cereal, our logo should be safe,” Haswell said.

Kellogg said its concern with MAI began when the group filed an application to register its toucan as a trademark.

“Trademark laws require we have conversations with any party seeking to trademark a similar design for commercial purposes or we risk losing Toucan Sam as Kellogg’s Froot Loops trademark, in use since 1963,” company spokeswoman Kris Charles said in an e-mail yesterday

After the two groups entered into discussion, “we worked with them to identify an approach to refuse their trademark application that will enable them to continue using their logo for their not-for-profit fundraising efforts,” she said.

Kellogg is “pleased to support MAI in its mission to protect and extend the rich history and culture of the Mayan people through our contributions toward their cultural center,” Charles said in the e-mail.

For more trademark news, click here.

Copyright

Google Friends Facebook Against Hollywood-Backed Piracy Bill

Google Inc. and Facebook Inc. are among Web companies warning that legislation aimed at combating online piracy may threaten the U.S. technology industry.

The House Judiciary Committee is scheduled to hold a hearing today on the Stop Online Piracy Act, a measure that would give the U.S. attorney general and copyright holders new powers to cut off financial support to “rogue websites” accused of trafficking in goods spanning knockoff watches to fake pharmaceuticals to pirated movies.

The House bill and a similar Senate measure have pitted the nation’s top Internet companies against the U.S. film and music industries, which want the government to halt counterfeiting and intellectual-property theft. Web companies say the proposed legislation would require them to police the Internet, jeopardizing the growth of online services.

The House measure, introduced by Judiciary Committee Chairman Lamar Smith, a Texas Republican, would let prosecutors seek court orders requiring U.S. Internet-service providers, search engines, payment processors and ad networks to block or cease business with websites linked to online piracy.

The Motion Picture Association of America, the Recording Industry Association of America and the U.S. Chamber of Commerce are among the supporters of the legislation.

A study released Nov. 2 by the International Intellectual Property Alliance, an advocacy group of content owners, found that the publishing, software, film, music and television industries added more than $930 billion to the U.S. economy in 2010.

The House bill has broad and vague language and may extend to legitimate websites that are accused of facilitating infringement, such as those letting users comment, post blogs or share video, said David Sohn, a senior policy counsel at the Washington-based Center for Democracy and Technology, in an interview.

The center is financed in part by the technology industry and got almost 12 percent of its 2010 funding from Web companies including Google, Facebook and Yahoo.

Maria Pallante, director of the U.S. Copyright Office, and representatives of Google, Mastercard Inc., Pfizer Inc., the MPA and the AFL-CIO were scheduled to testify at today’s House hearing.

For more copyright news, click here.

Trade Secrets/Industrial Espionage

Motorola Engineer Stole Trade Secrets, U.S. Tells Judge

An ex-Motorola Inc. software engineer should be found guilty of stealing trade secrets from the company to benefit a business in China and that nation’s military, a U.S. prosecutor told a federal judge.

Hanjuan Jin, the former employee, faces as many as 15 years in prison if she is convicted on three counts of stealing secrets to benefit a foreign government. She also faces three trade-secret theft charges with a maximum sentence of 10 years.

“The government asks that you deliver the verdict that the evidence overwhelmingly supports,” Assistant U.S. Attorney Sharon Fairley said yesterday in her closing arguments to U.S. District Judge Ruben Castillo in Chicago.

Jin was indicted in 2008, one year after had she returned to the Schaumburg, Illinois-based company from a medical leave of absence and then quit. U.S. customs agents stopped her at Chicago’s O’Hare International Airport on Feb. 28, 2007. She was carrying more than 1,000 Motorola documents, $30,000 and a one- way ticket to China.

Jin waived her right to a trial by jury. Castillo will determine whether the U.S. has met its burden of proof beyond a reasonable doubt. The trial began Nov. 7.

Jin’s lawyer, John Murphy, told the judge she isn’t guilty.

“The government saw this case in a very specific way from the very first day,” Murphy, a member of the Chicago Federal Public Defender’s Office, said in his closing argument.

That viewpoint, he said, was based on the O’Hare incident in which officials became suspicious about the amount of U.S. currency she was carrying and the nature of the documents in her possession.

“They made the determination from that point, that Ms. Jin was a spy,” Murphy said.

The case is U.S. v. Jin, 08-cr-192, U.S. District Court, Northern District of Illinois (Chicago).

--With the assistance of Joe Schneider in Sydney, Eric Engleman in Washington, Andrew Harris in Chicago, Susan Decker in Washington and Aoife White in Brussels. Editors: Peter Blumberg

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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