Bloomberg News

Google, Apple, Oracle, Ocean Tomo: Intellectual Property

February 09, 2012

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

Feb. 8 (Bloomberg) -- Google Inc., the largest maker of smartphone software, plans to send a letter to standards organizations reassuring them it will license Motorola Mobility Holdings Inc. patents on a fair and reasonable basis, according to two people with direct knowledge of the situation.

The letter, to be signed by a senior Google lawyer, is likely to be sent by sometime today, according to the people, who asked not be named because the decision isn’t yet public. The move would come after a deadline passed for Google to submit remedies to the European Commission, which is evaluating the plan to buy Motorola Mobility for $12.5 billion.

Google, which faces scrutiny for its proposed acquisition of Motorola Mobility’s patents, plans to send the letter to several standards organizations, the people said. The groups would include the European Telecommunications Standards Institute, a nonprofit recognized by the European Union.

“Since we announced our agreement to acquire Motorola Mobility last August, we’ve heard questions about whether Motorola Mobility’s standard-essential patents will continue to be licensed on FRAND terms once we’ve closed this transaction,” said Google spokeswoman Niki Fenwick, referring to fair, reasonable and nondiscriminatory terms. “The answer is simple: they will.”

European regulators will rule on the deal by Feb. 13, Antoine Colombani, a spokesman for the commission in Brussels, said today. The agency could either clear the deal or open an in-depth probe that would last about 90 working days.

Google plans to use Motorola Mobility’s more than 17,000 patents to protect supporters of its Android software in licensing and legal disputes with rivals such as Apple Inc. The acquisition also would put Google in the hardware business.

The acquisition -- the largest wireless-equipment deal in at least a decade, according to data compiled by Bloomberg -- also makes Google a competitor to the other handset makers that make Android devices. In addition to running on Motorola Mobility phones, the software works on handsets made by companies such as Samsung Electronics Co. and HTC Corp.

CareFusion Argues Sigma International Infringed Pump Patent

CareFusion Corp. asked a jury to find that Sigma International General Medical Apparatus LLC infringed one of its patents used in intravenous infusion pumps and owes as much as $171 million in damages.

An attorney for CareFusion said in his closing argument yesterday in federal court in San Diego that the Sigma Spectrum pump uses technology that infringes CareFusion’s U.S. Patent 6,347,553. CareFusion seeks compensation including lost profits on the sales of its competing infusion pumps, lost sales of related products and services and a royalty on the remaining sales of the Sigma Spectrum pumps, according to court filings.

“The damages must be adequate to compensate CareFusion for this infringement,” CareFusion attorney John Allcock told jurors. “We are asking you to put CareFusion in the same financial condition had this patent not been infringed.”

Sigma has denied infringing the patent and disputed testimony by CareFusion’s financial expert witness on damages. Sigma’s financial expert testified that if the jury decides the patent was infringed, damages should be no more than $859,590.

Sigma’s attorney, Michael Bettinger, said in his closing argument yesterday that CareFusion is fighting over a 2002 patent it doesn’t use in an attempt to increase the company’s market share of infusion pumps.

“This patent is being used for strategic purposes,” Bettinger said. “They don’t use the technology.”

The disputed patent relates to a force-sensor assembly for infusion pumps used in the health-care industry, according to court filings. Both companies manufacture and sell infusion pumps, which control the amount and rate of the flow of fluid and drugs administered to a patient through intravenous tubes.

CareFusion, based in San Diego, also contends that Medina, New York-based Sigma has induced others to infringe the patent. Sigma denies that claim as well, according to court filings.

U.S. District Court Judge Dana Sabraw is presiding over the trial.

The case is CareFusion 303 Inc. v. Sigma International, 3:10-cv-0442, U.S. District Court, Southern District of California (San Diego).

For more patent news, click here.

Trademark

Apple Opposes New Zealander’s ‘DriPhone’ Trademark Application

Apple Inc., maker of the iPhone and the iPad, is opposing a New Zealander’s attempt to register “driPhone” as a trademark in his county, the Sydney Morning Herald reported.

Hayden Crowther, of Hamilton, New Zealand, wants to use the mark for the waterproof case he created for smart phones, the newspaper reported.

Cupertino, California-based Apple is asking Crowther to switch the name of his product to “dryPhone” instead of “DriPhone, saying the name he chose would create confusion in the marketplace” according to the newspaper.

So far Crowther has refused, saying the logo takes up less space when the word is spelled with an “i” instead of a “y,” according to the Sydney Morning Herald.

For more trademark news, click here.

Copyright

Oracle Wants New Trial Against SAP After Reduced Verdict

Oracle Corp. decided it would rather have a new trial against SAP AG for copyright infringement than accept a judge’s $1 billion reduction in a jury verdict it won against its competitor.

U.S. District Judge Phyllis Hamilton in Oakland, California, threw out a $1.3 billion verdict against SAP in September, calling it “grossly excessive” and not supported by the evidence. SAP, the biggest maker of business-management software, should get a new trial if Oracle rejects her decision to reduce the amount to $272 million, Hamilton said in her ruling.

“Oracle’s objective is to obtain clarification of the law and, if it is right about what the law is and what the evidence supports in this case, to vindicate the verdict of the jury and Oracle’s intellectual property rights as a copyright owner,” Oracle attorney Geoffrey Howard said in a filing Feb. 6 in federal court in Oakland.

In the 2010 trial, Oracle accused SAP’s TomorrowNow software-maintenance unit of making hundreds of thousands of illegal downloads and several thousand copies of Oracle’s software. Oracle said SAP’s aim was to avoid paying licensing fees and to steal customers.

SAP and Redwood City, California-based Oracle, the second- biggest maker of business software, are competitors in the market for programs that businesses use to automate payroll, human resources, accounting and other tasks.

SAP, based in Walldorf, Germany, didn’t contest that it was liable for the infringement by TomorrowNow, which it closed in 2008. Jurors based their award on the value of a hypothetical license that SAP would have needed to use Oracle’s software.

Hamilton said there was no evidence that Oracle had ever granted a license that would permit a competitor to use its software to compete for Oracle customers. Oracle can’t recover lost license fees because, without such evidence, any award would be subjective and speculative and not based on objective evidence, she said.

“We are disappointed that Oracle has passed up yet another opportunity to resolve this case,” Jim Dever, an SAP spokesman, said in an e-mail. “We will continue to work to bring this case to a fair and reasonable end.”

The case is Oracle v. SAP, 07-1658, U.S. District Court, Northern District of California (Oakland).

For copyright news, click here.

Trade Secrets/Industrial Espionage

Ocean Tomo Sues PatentRatings Ex-President in Trade Secret Fight

Ocean Tomo LLC, a self-described intellectual property merchant bank, has sued the former president of its PatentRating unit for trade secret misappropriation.

The suit, filed in federal court in Los Angeles, accuses Steve Lee of downloading Ocean Tomo data from a company laptop and saying he would disclose this information to Jonathan Barney and Barney’s company.

Lee was president of PatentRatings until his resignation in September. Before he came to Ocean Tomo, Lee was a management consultant for the Boston Consulting Group, and before that, a design engineer at Hughes Aircraft Co.

Barney, a patent lawyer who was the inventor of the Patent Ratings system, left Ocean Tomo in February 2011, following a dispute over the company’s expansion plans, according to a posting on the Intellectual Asset Management magazine blog.

Barney is the holder of patent 6,556,992, which covers the patent-rating system that he had licensed to Ocean Tomo. He was sued by Ocean Tomo in Illinois state court Jan. 27, accusing him of breach of contract, and destruction of the company’s confidential information.

On Jan. 24 Lee told Ocean Tomo he would disclose the company’s confidential information in connection with an arbitration proceeding against Barney and his company, now known as Patent Ratings International.

In its suit against Lee, Ocean Tomo said that the ex- employee knew its litigation strategies and had access to attorney-client privileged communications in addition to company trade secrets. The Chicago-based company asked the court for an order barring disclosure of its information.

U.S. District Judge James V. Selna granted that request, telling Lee he had to return all data taken from the hard drive within two days of his Feb. 3 order. He also barred Lee from disclosing any of Ocean Tomo’s confidential information to pending American Arbitration Association proceedings in the company’s dispute against Barney and his company.

Lee was ordered to file a response to the order by Feb. 10. Presently the court docket doesn’t list any counsel for Lee. Lee couldn’t immediately be located for comment.

Barney said in an e-mail yesterday that trade-secret allegations against him and Lee are “part of Ocean Tomo’s ‘fear and intimidation’ campaign to scare away witnesses from testifying” in an upcoming trial between the two companies that will begin in March.

The case against Lee is Ocean Tomo LLC v. Steve Lee, 8:12- cv-00146-JVS-MLG, U.S. District Court, Central District of California (Santa Ana). The case against Barney is Ocean Tomo v. Jonathan Barney, 2012-CH-02966, Illinois Circuit Court, Cook County, Chancery Division.

Symantec Says It Was Target of Extortion Attempt Over Code

Symantec Corp., the biggest maker of computer-security software, said a person claiming to be part of the Anonymous group tried to extort $50,000 to keep it from posting stolen source code on the Internet.

“Symantec conducted an internal investigation into this incident and also contacted law enforcement given the attempted extortion and apparent theft of intellectual property,” Mountain View, California-based Symantec said in a statement.

A group calling itself Lords of Dharmaraja, which claims an affiliation with hacker group Anonymous, has been publicly taunting Symantec for weeks in online forums, saying that it stole programming code for several Symantec products and was planning to leak it on the Web. Symantec said that code that was already posted is real, and was stolen in a 2006 incursion into its network, though most of it was for obsolete products, limiting the potential damage from a disclosure.

One vulnerable program is pcAnywhere, which corporate technical staff used to remotely control employees’ computers. Symantec said it has issued patches, or fixes for known security holes, for the product. Customers using older versions who don’t apply the patches face a slightly increased security risk, Symantec said. That means that hackers may find it easier to break into corporate networks that use the program.

Source code is valuable because it is a blueprint for how a company built a piece of software. Hackers who get their hands on it can hunt for weaknesses.

Security software is constantly probed for programming errors, and many legal, third-party programs exist to help security researchers find those flaws, without the need to examine source code, said Rich Mogull, chief executive officer of Securosis, a Phoenix-based security-research firm. That limits the source code’s usefulness in crafting attacks, especially for older products whose errors have already been fixed, Mogull said.

--With the assistance of Edmund Lee in New York, Brian Womack in San Francisco, Jordan Robertson in San Francisco. Editors: 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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