Bloomberg News

Samsung, USPTO, Kraft, Abercrombie: Intellectual Property

November 18, 2011

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

Nov. 17 (Bloomberg) -- European Union regulators started an antitrust probe into Samsung Electronics Co. and Apple Inc.’s use of smartphone patents on their “own initiative” without waiting for a competitor to formally raise the issue.

Per Hellstroem, the head of the European Commission’s antitrust unit for consumer electronics, said in London yesterday that the EU’s “preliminary investigation” is trying to determine the underlying facts about phone makers’ use of patents.

“There’s no formal complaint,” Hellstroem said at a conference organized by IBC Legal. “When we see that there are issues that may” potentially “involve competition issues we have the power to send requests for information to various parties.”

Samsung and Apple were questioned by the commission about “the enforcement of standards-essential patents in the mobile- telephony sector,” regulators said earlier this month. Apple said in a filing in a California court case last month that Samsung faced an EU antitrust investigation into its “egregious” misuse of patents.

The lack of a formal complaint doesn’t necessarily mean that companies hadn’t “drawn the attention of the commission to this issue,” said Simon Hirsbrunner, a lawyer at Heuking Kuehn Lueer Wojtek in Brussels.

Hellstroem said regulators were “completely open-minded” on the use of patents and would intervene in commercial disputes “only in exceptional circumstances” where it was necessary “to enforce competition policy in the public interest.”

Apple and Samsung have filed at least 30 lawsuits against each other in 10 countries, according to Samsung.

Patent Office Can’t Keep User Fees Meant to Boost Agency

Companies poured more than $100 million in fees into the U.S. Patent and Trademark Office during 10 days in September, seeking to beat a surcharge mandated by the biggest change to the patent system since 1952.

That money was a windfall, not for the patent office, but for the U.S. Treasury because the agency had spent what Congress had allowed for fiscal 2011. An interim spending measure for fiscal 2012 failed to lift the spending limit, and unless lawmakers act this week the office may forfeit more fees.

Unilever NV and Tessera Technologies Inc. are among companies urging Congress to make sure that the patent office, reeling under a backlog of 670,000 applications, keeps all the money it collects. They say the patent overhaul signed by President Barack Obama two months ago fails to resolve long- standing budget uncertainties for the agency, which is funded entirely by user fees.

The agency was limited to spending $2.1 billion in the year that ended Sept. 30. It collected $208 million more than that in fees, including the more than $100 million in maintenance levies paid between Sept. 16, when the law was signed, and Sept. 26, when a 15 percent surcharge aimed at getting more money to the patent office took effect.

House and Senate negotiators have reached agreement on legislation, H.R. 2112, that would fund the patent office through the fiscal year that began Oct. 1.

The spending bill allots as much as $2.7 billion for the patent office in fiscal 2012 and specifies that the agency would be allowed to seek congressional approval to keep any fees it collects in excess of that amount.

The proposal doesn’t address the $208 million in excess fees collected by the agency in fiscal 2011, including the money that was paid during the 10-day window in September by companies wanting to avoid the surcharge.

The new law’s cornerstone was a provision aimed at letting the agency keep all fees it collects, ending a practice in which Congress diverted about $1 billion in user fees collected since a 1990 law required the agency to pay for itself.

The patent office has declined to comment on the funding issue. Many patent-office mandates don’t take place immediately, and Peter Pappas, the agency’s chief of staff, said the office is “moving full steam ahead with implementation” of the new requirements.

For more patent news, click here.

Trademark

Kraft Gets U.K. OK to Register Purple Color as Trademark

Kraft Food Inc.’s Cadbury unit won a trademark dispute with Nestle SA over the issue of a purple color in its packaging, Confectionery News reported.

Nestle had attempted to block Cadbury’s registration of a shade of purple described as “Pantone 2658C” as a trademark in the U.K., according to Confectionery News.

In a preliminary ruling the U.K.’s Intellectual Property Office said there was no doubt “that there is an association of some kind in the public’s mind between the color applied for and Cadbury,” Confectionery News reported.

Nestle told Confectionery News that Cadbury was granted registration to use the mark for only a limited range of products and the company “will assess the final decision once it has been issued.”

Abercrombie Sue for Trademark Infringement by ‘The Situation’

Abercrombie & Fitch Co., the specialty clothing chain known for its edgy ads, was sued for trademark infringement by reality-television star Michael Sorrentino.

The television personality, better known as “The Situation” on Viacom Inc.’s “Jersey Shore” reality show, filed the suit in response to an August statement by the clothing retailer that it would pay him not to wear their clothing.

According to the complaint filed Nov. 15 in federal court in Miami, he never received an offer from Abercrombie, and he claims the company produces and sells items that infringe his trademarks. According to the database of the U.S. Patent and Trademark Office, Sorrentino’s MPS Entertainment Inc. has one registered trademark and 37 pending applications for others.

Many of his applications are related either to “the Situation,” or to the trinity of “gym, tanning, laundry” to which he makes frequent reference on the show.

Accompanying the complaint are photos of several shirts sold by Abercrombie. One has “The fitchuation” across the front, and a second is printed with “GTL . . . You Know the Deal.” Sorrentino says these are “obviously intended to create a false association” between himself and the Abercrombie shirts.

He claims that New Albany, Ohio-based Abercrombie has “significantly profited” from what he says is a “false affiliation” with him and his likeness.

He asked the court to bar further infringement of his marks, and to order the destruction of all infringing products and promotional material. Additionally, Sorrentino asked for awards of a royalty of $1 million and $3 million in money damages.

Sorrentino is represented by Richard Charles Wolfe of Wolfe Law Miami PA, of Miami, Florida, and Darren Adam Heitner of Koch, Parafinczuk & Wolf PA of Ft. Lauderdale, Florida.

The case is MPS Entertainment LLC v. Abercrombie & Fitch Stores Inc., 1:11-cv-24110-JAL, U.S. District Court, Southern r For more trademark news, click here.

BAT Threatens Litigation Over Health-Warning Packaging

British American Tobacco PLC has threatened to sue legislators in Namibia over legislation that would mandate cigarette packaging include photos of health conditions caused by smoking, the AllAfrica.com news website reported.

The company claims the changes to packaging wouldn’t leave it enough room to display its trademarks, according to AllAfrica.com.

They threatened litigation is similar to a suit the London- based tobacco company filed in Australia, the website reported.

BAT warned that the packaging change would both be prejudicial to “the trade of a legal product” and stimulate the trade in illegal cigarettes in the country, according to AllAfrica.com.

Copyright

Aussie Designer Accused of Infringing Red-Frocked Kate Photo

Australian fashion designer Collette Dinnigan was accused of copyright infringement by a London-based photo agency over her use of a photo of Catherine Middleton wearing one of her frocks, the Sydney Morning Herald reported.

Ikon, the photo agency, objected to Dinnigan’s use of its photo of the wife of Prince William wearing the bright red dress to a wedding in September, according to the Newspaper.

The designer’s use of the photo in a press release allegedly harmed Ikon’s chance to sell the photo to an Australian publication, the Sydney Morning Herald reported.

Counsel for Dinnigan told the newspaper there was no infringement, Ikon was acknowledged as the author of the photo, and the press release made “appropriate use of the photo in question.”

Makeba Heirs Question Handling of Singer’s Copyrights, Royalties

The family of the late anti-apartheid singer Miriam Makeba complained about the management of the intellectual property rights to her music, Agence France Presse reported.

This would include the copyrights and royalties to more than 30 albums made by the South African singer, who died in 2008, according to AFP.

Graeme Gilfillan, her former manager, told AFP that while Makeba wanted her family to benefit from the trust managing her affairs, she didn’t want them to serve as trustees.

He claimed that by going public with their concerns about his management, members of the Makeba family have been “assassinating my character and denting my reputation,” AFP reported.

House Judiciary Chairman Says Google Obstructs Piracy Bill

House Judiciary Committee Chairman Lamar Smith accused Google Inc., owner of the biggest Internet search engine, of seeking to obstruct legislation aimed at curbing online piracy as his panel held a hearing on the bill.

The House measure and similar Senate legislation have pitted Internet companies against the film and music industries, which want the government to do more to fight intellectual- property theft. Google and Facebook Inc., the world’s biggest social network, are among Web companies that say the bill will lead to Internet policing and harm online innovation.

Smith introduced the House version of the legislation last month. The bill, H.R. 3261, would allow the U.S. attorney general to seek court orders requiring U.S. Internet-service providers, search engines, payment processors and ad networks to block or cease business with foreign websites linked to online piracy. It also gives private copyright holders a mechanism to try to cut off financial support to infringing websites.

The House legislation is too broad and could impose harsh sanctions on “innocent” websites, such as an e-commerce site targeted over goods offered by a single seller, Katherine Oyama, copyright counsel for Mountain View, California-based Google, said at the hearing.

Google, Facebook, Yahoo Inc., and EBay Inc. are among the U.S. technology companies that warned in a letter to the Judiciary Committee yesterday that the bill may threaten the growth of the U.S. technology industry.

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.

Representative Darrell Issa, a California Republican, said during the hearing that the U.S. International Trade Commission could play a role in handling complaints about foreign websites that infringe copyrights. He said he’s working on an alternative version of the bill.

Senator Ron Wyden, an Oregon Democrat, has threatened to block the Senate version, the Protect IP Act, from reaching a vote in the full Senate and is also working on alternative legislation, according to his spokeswoman, Jennifer Hoelzer. The Senate bill, S. 968, was approved by the Senate Judiciary Committee May 26.

For more copyright news, click here.

--With the assistance of Susan Decker and Kathleen Hunter in Washington, Aoife White in Brussels, Katie Linsell in London. Editors: Mary Romano, 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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