Bloomberg News

IBM, LVMH, Bahamas Copyright Fund: Intellectual Property

December 29, 2011

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

Dec. 29 (Bloomberg) -- International Business Machines Corp., the world’s largest computer-services company, received a patent on a method of paying people to eat more healthily.

Patent 8,078,492, issued by the U.S. Patent and Trademark Office Dec. 13, covers a computer system that can detect a consumable item and provide the consumer with an electronic monetary incentive based on the item and the consumer’s health history.

The system could also include exercise records for the individual and recipes for healthy items, according to the patent.

The patent has taken more than 10 years to be issued. Armonk, New York-based IBM applied for the patent in October 2001, according to the database of the U.S. Patent and Trademark Office.

For more patent news, click here.

LVMH Sues Over Use of Fake Vuitton Luggage in ‘Hangover’ Film

LVMH Moet Hennessy Louis Vuitton SA sued Time Warner Inc.’s Warner Brothers Entertainment unit for trademark infringement.

The suit, filed Dec. 22 in federal court in New York, is related to Warner’s “The Hangover: Part II” movie. The French luxury-goods maker claims that a travel bag used in the film and referred to as a genuine piece of Louis Vuitton luggage is a fake.

By referring to the fake as a Louis Vuitton bag, Warner Brothers is “explicitly misleading the public about the source” of the counterfeit product, Vuitton said in its pleadings. While the fake uses the color scheme of genuine Vuitton bags, it lacks the LV trademark, the company said in its pleadings.

The bag used in the movie is actually from a company against which Vuitton brought an action before the U.S. International Trade Commission, a body with the power to ban the import of infringing items, the luxury-goods company said.

Vuitton does authorize product placement in movies, only with its permission and only with genuine products, according to court papers. Warner is accused of stepping outside the general practice in the movie industry of clearing the use of a branded product with the brand owner.

In addition to seeking an order barring the advertising, promotion and distribution of the film containing any scenes with the allegedly infringing bag, Vuitton asked the court to order the destruction of all copies of the film that contain images of the counterfeit bag and represent it as a genuine Louis Vuitton product.

Additionally, Vuitton asked for an award of Warner Brother’s profits related to its alleged false designation or origin, money damages, litigation costs and attorney fees.

This isn’t the first time the film has been the target of an infringement suit. In April, the tattoo artist who created Mike Tyson’s distinctive tattoo sued over the use of that design in the film. That case settled in June for undisclosed terms.

That case was Whitmill v. Warner Bros. Entertainment Inc., 4:11-cv-00752-DCP, U.S. District Court, Eastern District of Missouri (St. Louis).

In the new case, Vuitton is represented by Theodore C. Max of Los Angeles-based Sheppard Mullin Richter & Hampton LLP, and Robert E. Shapiro, Wendi E. Sloane and Vito S. Solitro of Chicago’s Barack Ferrazzano Kirschbaum & Nagelberg LLP.

The case is Louis Vuitton Malletier SA v. Warner Bros. Entertainment Inc., 1:11-cv-09436-ALC, U.S. District Court, Southern District of New York (Manhattan).

Japanese Police Say China Source of Most Counterfeit Goods

Japan’s National Police Agency has identified almost 450 websites advertising in the Japanese language counterfeit fashion items such as handbags, with most of them originating in China, the Mainichi Daily News reported.

Most of the sites use such phrases as “It’s a super copy - - looks just like the original,” according to the newspaper.

While the police have shut down 28 websites in Japan, 14 of them reappeared soon after having changed from domestic servers to overseas, the newspaper reported.

Before 2006, most of the fake fashion items originated in Korea. China now leads, producing 92 percent of all seized counterfeit items in 2010, according to Mainichi News.

For more trademark news, click here.

Copyright

Singapore Press Says Yahoo! ‘Deliberately’ Committed Plagiarism

Singapore Press Holdings Ltd., embroiled in a legal tussle with Yahoo! Inc. as both accused each other of copyright infringement, said the Internet company “deliberately” reproduced its news content without permission.

“Yahoo had over an extended period of time consistently and deliberately committed plagiarism by substantially reproducing the words and expressions used in SPH’s articles without permission,” Singapore Press said in a statement to the stock exchange yesterday. Yahoo was “free-riding” on the newspaper publisher to boost its website page views and advertising revenue, according to the statement.

Singapore Press sued Yahoo’s Southeast Asia unit Nov. 18, claiming the company reproduced 23 articles from newspapers including the Straits Times from November 2010 to October 2011 without authorization. On Dec. 13, Yahoo denied breaching copyright laws and counter-sued Singapore Press for wrongly using its images and articles on a website.

“SPH is determined to pursue this suit vigorously and to protect its copyrighted works,” the newspaper publisher said after filing its defense to the Singapore High Court yesterday in response to Yahoo’s countersuit.

Yahoo said in a defense filed to the Singapore court Dec. 13 the articles that Singapore Press claimed were reproduced without authorization were insubstantial and insignificant.

“There is an important public interest in respect of the right of the public to be informed of current events in Singapore,” the Sunnyvale, California-based Internet company said. “Copyright law does not protect facts and information.”

Yahoo approached Singapore Press in April 2009 for a license to reproduce news content, and negotiations between the two companies broke down last year, according to the publisher’s lawsuit. The Internet company relied on Singapore Press’s articles to provide content on its website to raise traffic and build readership without having to expend financial resources, according to the lawsuit.

“These acts of infringement were committed by Yahoo to direct and maximize traffic to its website in order to drive up its page views and advertising revenue,” Singapore Press said today. “This was not done for the public interest, as claimed by Yahoo, but instead in furtherance of its own vested financial interest.”

Singapore Press deliberately kept silent until a letter from its lawyers Nov. 4, causing Yahoo to continue with the alleged infringement for a year as it believed the publisher had no complaints, according to the Internet company’s filing.

The case is Singapore Press Holdings Ltd. v Yahoo! Southeast Asia Ltd., S831/2011, Singapore High Court.

Japanese Court Upholds Acquittal of Software Developer

Japan’s highest court upheld a lower court’s ruling clearing the developer of the Winny file-sharing software of enabling criminal copyright infringement, the Mainichi News reported.

The court said the users are the ones who decide whether to use the program legally or illegally, according to the newspaper.

Isamu Kaneko, 41, was first accused of aiding criminal infringement in 2003 and was found guilty in 2006 and fined 1.5 million yen ($13,000), Mainichi News reported. The guilty verdict was reversed by an intermediate court.

Kaneko’s case was the first in Japan to test the liability of a software developer for illegal use of the file-sharing software he created, according to Mainichi News.

Korean Music Companies Win Damages in U.S. Court Against Aussie

A federal court in San Jose, California, entered a $645,000 judgment against an Australian defendant in a copyright infringement suit brought by a group of Korean music companies.

Six Korean music companies sued Kenny Tran, the operator of the 1honeyjoo.com and 1honedew.com websites, for copyright infringement in March 2011.

They accused Tran, an Australian defendant, of operating websites to disseminate unauthorized copies of their music, calling him “one of the biggest illegal uploaders and free download link providers of Korean music in the world.”

They filed court documents in March attesting that Tran had properly been served with a copy of the complaint. Tran has never responded to the filing, according to the case docket.

In her order granting the music companies a default judgment against Tran, U.S. District Judge Lucy H. Koh addressed the issue of whether her court was an appropriate forum for a dispute between the two foreign defendants.

She said that Tran used California companies -- including Facebook Inc., Google Inc.’s YouTube and Twitter Inc. -- to advertise and direct people to his websites, and that his sites encouraged Californians to download music without authorization. She also noted that Tran had failed to come forward and ask for an alternative forum.

She found her court to be appropriate and issued a permanent order barring Tran from further infringement of the companies’ copyrights, and awarded the companies the $645,000 in damages they requested.

The case is DFSB Kollective Vo. Ltd. v. Tran, 5:11- cv-01049-LHK, U.S. District Court, Northern District of California (San Jose).

Bahamas Copyright Fund to Get Royalty-Payout Regulations

While the Bahamas Copyright Royalty Fund hasn’t paid performers any royalties in its 11 years of existence, the situation is about to change with the establishment of regulations governing payment rates, the Bahamas Tribune newspaper reported.

The Bahamas Attorney General’s Office has appointed an IP specialist to develop the regulations and rates so the Copyright Royalties Tribunal could begin to make payments from the fund, according to the Tribune.

The fund was established in 2000 to provide payments to television performers and artists by Cable Bahamas, the newspaper reported.

The London-based Performing Rights Society for Music, which represents Bahamian music creators and rights holders, sent the chairman of the tribunal a letter raising concerns about the lack of payouts from the fund, according to the Tribune.

For more copyright news, click here.

Trade Secrets

Synthes Accuses Stryker of Raiding California Sales Force

A unit of Synthes Inc., the world’s largest maker of bone- related medical devices, accused Stryker Corp. in a lawsuit of raiding its San Francisco sales force and using confidential information from former employees.

Stryker seeks to obtain “an improper competitive advantage” in the industry for medical implants and instruments used in spinal surgery, Synthes USA Sales LLC said in the complaint filed yesterday in federal court in Philadelphia. Synthes also accused three former sales employees of misappropriating trade secrets and breaching their contractual and fiduciary obligations to the company.

The former employees resigned from Synthes from August to early October, according to the complaint. They immediately began working for Stryker, one of the company’s direct competitors, and are soliciting former customers, according to the court filing.

Representatives of Kalamazoo, Michigan-based Stryker didn’t immediately respond to an e-mail and phone message at the company headquarters seeking comment on the lawsuit.

Even though all three employees live and work in California, the suit alleged the three ex-employees violated Pennsylvania trade-secrets law rather than California’s. Courts in California have tended to look less kindly than those in other states on employment contracts that limit future employment in the same industry.

Johnson & Johnson agreed to buy Synthes, based in West Chester, Pennsylvania, in April for $21.3 billion to become the leader in the $5.5 billion market for devices to treat trauma victims.

The case is Synthes USA Sales LLC v. Stryker Corp., 2:11- cv-07876-TJS, U.S. District Court, Eastern District of Pennsylvania (Philadelphia).

--With the assistance of Andrea Tan and Shamim Adam in Singapore. 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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