Bloomberg News

Apple, HTC, Hilfiger, Boeing, Inepar: Intellectual Property

December 20, 2011

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

Dec. 19 (Bloomberg) -- Apple Inc. and Samsung Electronics Co., which sued each other in a German court over technology used in tablets and mobile phones, both face hurdles in showing the patents they assert cover the methods used, a judge said.

Samsung sued Apple over mathematical coding procedures in processors. Apple sued Samsung over features for unlocking touch screens. Each may have trouble showing the other is violating the patents, Presiding Judge Andreas Voss in Mannheim, Germany, said Dec. 16 at two hearings.

“What you call an ingenious mathematical solution doesn’t seem to be reflected in the patent,” Voss told Samsung’s lawyers. To Apple’s he said, “Your patent speaks of a displayed pre-determined path on the touch screen, but where’s that displayed in the Samsung devices?”

Apple, based in Cupertino, California, and Samsung, the world’s largest maker of mobile phones, are clashing in German courts over smartphone devices. Apple, the world’s largest technology company, won a temporary ruling earlier this year banning sales ban of its competitor’s Galaxy 10.1 tablet, invoking a design right.

Both will also meet this week when a Dusseldorf appeals court hears the Galaxy 10.1 tablet case. A lower court is scheduled to hear another suit by Apple seeking a ban on sales of a Galaxy tablet model.

Samsung told the court Dec. 16 that it didn’t want its suit to extend to Qualcomm Inc. processors. Apple reacted by asking the court to consider that move as dropping part of the suit. The court hasn’t decided on that motion.

Earlier in the day on Dec. 16 Samsung expanded its suit by introducing two additional patents into the case. The court decided to handle them separately as two additional cases.

Apple may not be in violation of Suwon, South Korea-based Samsung’s patents because its devices read numbers from a table to get the same coding effects, Voss said, adding that the Samsung patent speaks about “generating” a code.

Apple’s patent protects screen saver designs that are used to unlock devices. Voss said the patent requires that the design follow a path that is displayed. Holding up a Samsung Tablet 1, the judge said the device uses two triangles that need to be connected by a swipe and no pre-determined path for that is displayed.

“Apple argues that those two points are the start and the finish so they are determining such a path,” he said. “Well, that’s like pointing from the parking lot at the start of a hiking trial to the top of a mountain and saying: now you know your hiking path, because you know the start and finish.”

The court scheduled a ruling in Samsung’s suit for March 2 and in Apple’s suit for Feb. 17.

The cases heard Dec. 16 are LG Mannheim 7 O 326/11 (Samsung v. Apple) and 7 0 247/11 (Apple v. Samsung).

HTC Says Dusseldorf Court Injunction Bans IPCom Legal Threats

HTC Corp., the world’s largest maker of mobile phones that use Google Inc.’s Android operating system, said a Dusseldorf, Germany, court has temporarily banned IPCom GmbH & Co. from threatening retailers of HTC products with legal action.

“The District Court of Dusseldorf granted HTC a preliminary injunction prohibiting the German licensing company, IPCom, from sending misleading warning letters threatening legal action against German retailers of HTC products,” HTC said in an e-mailed statement.

For more patent news, click here.

Trademark

Fake Hilfiger Jeans Seized, Given to Charity, Rebranded in U.K.

A U.K. charity has persuaded government authorities to donate about 90 percent of the fake designer clothing they seize in their anti-counterfeiting campaigns, the BBC reported.

Rather than burn or otherwise destroy the fakes, the government is handing them over to the His Church charity, which uses industrial sewing machines to patch over the pirated labels, according to the BBC.

Presently His Church is working on rebranding 1,600 pair of jeans bearing fake labels from PVH Corp.’s Tommy Hilfiger unit, according to the BBC.

The de-labeled clothing is then distributed to 250 women’s shelters and centers for the homeless, the BBC reported, with items that have too many brands to be patched over effectively sent to charities in Africa, the BBC reported.

For more trademark news, click here.

Copyright

Youku, Tudou Trade Claims of Infringement Over Online Videos

Youku.com Inc. and Tudou Holdings Ltd., China’s two largest operators of online video sites, are accusing each other of intellectual property infringements by running pirated videos.

Youku is illegally showing the entertainment program series “Kangxi is Coming,” whose online broadcast rights in China are owned by Tudou, Yu Bin, vice president of finance at Tudou, said in a phone interview today. Tudou has violated Youku’s rights on “more than 60 serials” including “The Emperor’s Harem,” Youku spokeswoman Jean Shao said in a separate phone interview.

The companies, both listed in New York, compete with each other by licensing content such as TV programs and films to win viewers in China, the world’s biggest Internet market by users. Neither has had an annual profit in at least three years, according to data compiled by Bloomberg.

Tudou “completely denies” the infringement allegations by Youku, Yu said. Youku’s Shao said Tudou’s claims were “unfair and misleading.”

An initial public offering by Shanghai-based Tudou in August raised $174 million after attracting investors including Sina Corp., operator of China’s most popular microblogging service. The IPO by Beijing-based Youku raised $233.3 million in December 2010.

House Panel Adjourns Debate on Hollywood-Backed Web Piracy Bill

The House Judiciary Committee adjourned its second day of debate of a Hollywood-backed anti-piracy bill Dec. 16 that Google Inc. and other Internet companies say will foster censorship.

Lobbying by the entertainment and Web industries intensified with the hearing. A website, engineadvocacy.org, said 9,788 telephone calls were made to Congress through its link to protest the measure, the Stop Online Piracy Act. The hearing will resume when Congress is next in session.

Movie studios, including Warner Bros. Entertainment Inc., want a crackdown on non-U.S. websites that sell illegally copied films and TV shows as Web companies say the measure spurs online censorship and harms technology innovation. Lawmakers on the panel said a provision on blocking websites may damage the security of the Internet’s domain-name system and requested a delay to hear technical testimony.

The bill would let the Justice Department ask courts to order Internet-service providers, search engines, payment services and advertising networks to block or cease business with non-U.S. websites trafficking in stolen content or counterfeit goods. The measure also gives private copyright holders the ability to seek court orders forcing payment and ad companies to cut ties with such sites.

“The criticism of this bill is completely hypothetical; none of it is based in reality,” said Lamar Smith, who leads the committee and introduced the measure.

U.S. Rep. Darrell Issa, a California Republican, and Senator Ron Wyden, an Oregon Democrat, released an alternative draft bill last week that would make the International Trade Commission the arbiter of complaints about non-U.S. websites linked to piracy. That proposal is backed by Google Inc., Facebook Inc., and other Web companies and opposed by the Motion Picture Association of America.

Issa, along with House Judiciary Committee members Zoe Lofgren, a California Democrat, Jared Polis, a Colorado Democrat, and Jason Chaffetz, a Utah Republican, submitted multiple amendments designed to alter components of the bill.

For more copyright news, click here.

Trade Secrets/Industrial Espionage

Ex-Employee Accused of Stealing Boeing Drone Trade Secrets

An ex-employee of a Boeing Co. subsidiary was charged with theft of trade secrets related to drone aircraft technology under development for the U.S. Navy.

According to court filings, Stephen Marty Ward downloaded a maintenance manual for existing drones at Boeing’s Insitu Inc. unit in Washington state’s rural Klickitat County.

After Ward was terminated by Insitu in October, he offered to sell back a copy of the Integrator Maintenance Manual, the government said in a filing.

Ward was employed by Corsair, an Insitu sub-contractor, and working at Insitu as a contract employee, according to court papers. The reason for his termination wasn’t disclosed in court filings.

The purloined manual contains “information that is the culmination of years of research and development” for the drones, which have flown more than 500,000 combat hours, the government said.

After Ward’s termination, his access to all Insitu systems was revoked. The government said he then contacted Corsair seeking compensation in return for the manual. The government alleged he also said he was planning to visit a foreign country to contact others interested in the drone technology.

The government recorded some of the phone conversation and e-mail Ward sent Corsair officials to indicate he was in possession of the manual, according to the government’s court filings.

Ward pleaded not guilty plea to the trade-secret charges Dec. 14. The court ordered him held without bail.

The case is U.S.A. v. Ward, 2:11-cr-02123-RMP, U.S. District Court, Eastern District of Washington (Spokane).

Inepar Unit Buys InnoVida Trade Secrets at Bankruptcy Auction

Inepar SA, a Brazilian industrial conglomerate, has acquired trade secrets related to a resin that can be used to build low-cost hurricane-resistant homes, the Miami Herald reported.

The Millport Associates unit of Inepar acquired the intellectual property from Miami Beach, Florida-based InnoVida Holdings LLC at an auction following InnoVida’s bankruptcy proceedings, according to the newspaper.

InnoVida founder Claudio Osorio had characterized the resin formula as his company’s equivalent of the Coca-Cola Co.’s closely guarded recipe for its soft drinks, the Herald reported.

Millport, which was the only bidder at the auction, was able to acquire the trade secrets for $500,000 and told the Herald they would be used to build lightweight composite panels for low-cost housing in Brazil.

--With the assistance of Edmond Lococo in Beijing, Mark Lee in Hong Kong, Aoife White in Brussels, Karin Matussek in Mannheim, Eric Engleman in Washington. Editors: Fred Strasser, 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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