Bloomberg News

Facebook, PerkinElmer, Daimler, Nike: Intellectual Property

March 29, 2012

Facebook Inc. (FB:US), the social- networking service that’s planning an initial public offering, said a patent dispute with Yahoo! Inc. (YHOO:US) could have a material impact on its business.

Yahoo (YHOO:US) sued Facebook on March 12, alleging that the site infringes Yahoo patents related to advertising, social networking, privacy, customization and messaging, Facebook said yesterday in a filing. The Menlo Park, California-based company said it hasn’t yet issued a response to the lawsuit.

“This litigation is still in its early stages,” Facebook said in the filing. “If an unfavorable outcome were to occur in this litigation, the impact could be material to our business, financial condition or results of operations.”

Facebook, the world’s most popular social-networking service, is grappling with more lawsuits over intellectual property. The company, which had about 60 U.S. patents at the end of last year, is aiming to defend itself by bolstering its portfolio. Facebook acquired 750 patents from International Business Machines Corp. (IBM:US), a person familiar with the matter said earlier this month.

Yahoo (YHOO:US), the largest U.S. Web portal, has demanded that Facebook license its technology, saying that other companies have done so. In the complaint, Yahoo asked for an order barring Facebook from infringing 10 patents and for triple damages. At the time, Facebook said it was “disappointed” in the lawsuit and would defend itself against “these puzzling actions.”

Facebook plans to raise $5 billion in its IPO, making it the biggest Internet offering on record. The company, which had almost $4 billion in revenue last year, could have a valuation of $75 billion to $100 billion, according to people with knowledge of the situation.

PerkinElmer Sues Agilent in Mass Spectrometer Royalty Dispute

PerkinElmer Health Sciences Inc. (PKI:US) sued Agilent’s Technologies Inc. yesterday in federal court in Boston for patent infringement. The suit claims that Agilent’s mass spectrometry devices infringe patents 5,686,726 and 5,581,080.

According to court papers, Santa Clara, California-based Agilent had been paying royalties until June 30, and is now in breach of a licensing agreement. PerkinElmer claims 6100 Series Quadrupole, 6200 Series TOF, 6300 Series Ion Trap, 6400 Series Triple Quad and 6500 Series Q-TOF mass spectrometry devices infringe the patent.

The Waltham, Massachusetts-based company asked the court to stop further unauthorized use of its technology and for an award of cash compensation.

The case is PerkinElmer Health Sciences Inc. v. Agilent Technologies Inc. (A:US), 1:12-cv-10562, U.S. District Court, District of Massachusetts (Boston).

Daimler Promotes New Mercedes by Bragging About Patents It Holds

Daimler AG (DAI) is taking a novel, IP-related tack in the promotion of its new Mercedes-Benz E-Class car.

A television commercial for the car presently running on U.S. television claims that the car is covered by “over 80,000 patents.”

The commercial claims that “to hold a patent that has changed the modern world” defines the patent holder as an innovator, and to hold more than one patent of a certain quality “would define you as a true leader.”

Google Willing to Pay $2.8 Million to Oracle Over Java Patents

Google Inc., fighting a patent lawsuit filed by Oracle Corp., said it is willing to pay $2.8 million in damages.

The revelation came in a March 27 joint filing proposing streamlining the litigation. The filing also requested that the evidence phase of the trial be reduced from 12 hours to eight hours, and that the parties waive their right to a jury trial.

Google also said it would be willing to pay a 0.5% royalty of Android revenue through expiration of one of the disputed patents.

Oracle said in the filing that it’s willing to consider the truncation of the evidence phase that Google suggested. If it is shortened, Oracle said the damages phase should be lengthened.

The company is opposed to giving up its right to a jury trial, and said that the damages Google suggests “are lower than Oracle contends are appropriate.”

The case is Oracle America Inc. v. Google Inc., 3:10-cv- 03561-WHA, U.S. District Court, Northern District of California (San Francisco).

For more patent news, click here.

Trademark

Nike Sues Reebok Over Use of Tebow’s Name on Jets Clothing

Nike Inc. sued Adidas AG (ADS)’s Reebok International over its use of quarterback Tim Tebow’s name on New York Jets-related clothing, days before Nike is to become the official supplier of licensed National Football League apparel.

Reebok, whose licensing agreement with the NFL ends March 31, illegally tried to capitalize on Tebow’s March 21 trade from the Denver Broncos to the Jets to sell Tebow-related shirts and other clothes, Nike said in a complaint filed yesterday in federal court in Manhattan. Nike claims it, not Reebok, has rights to use Tebow’s name.

Nike, the world’s biggest sporting-goods company, is seeking an order barring Reebok from selling the Tebow items, plus unspecified damages. The company claims Reebok is improperly taking away sales that Nike would otherwise make when it begins its five-year contract with the NFL April 1.

“The opportunity to sell the first Tebow-identified Jets apparel is a unique and short-lived opportunity,” Nike said in its complaint. “It is unlikely that a consumer who purchases an unauthorized Tebow-identified NFL jersey or t-shirt from Reebok this week will purchase an authorized Tebow jersey or t-shirt from Nike the following week.”

An Adidas spokesman, Jan Runau, didn’t immediately reply to a voice-mail message seeking comment on the suit. Joanna Hunter, an NFL spokeswoman, said the league didn’t have an immediate comment.

Tebow, 24, helped lead the Broncos to the National Football League playoffs after taking over as the team’s starting quarterback last year. He was named the most popular professional athlete in the U.S. in an ESPN poll this year. His Broncos jersey was the second-highest selling of all NFL players last season, Nike said in the complaint

According to Nike, a representative of Tebow notified Reebok that it was using his name without authorization and demanded it remove Tebow clothing from stores.

George Atallah, a spokesman for the NFL Players Association, didn’t immediately return an e-mail seeking comment. Jimmy Sexton, Tebow’s agent, didn’t immediately return a phone message.

Nike said it plans to introduce its new line of uniforms for all 32 NFL teams at an event in New York April 3.

The case is Nike Inc. (NKE:US) v. Reebok International Ltd., 12- cv-2275, U.S. District Court, Southern District of New York (Manhattan).

Gucci Accuses Guess of Massive Design ‘Knock Off’ Scheme

Gucci America Inc., the maker of luxury clothing and accessories, told a federal judge that Guess? Inc. (GES:US)’s products infringe Gucci’s trademarked designs.

U.S. District Judge Shira Scheindlin began conducting a trial without a jury on Gucci’s infringement claim yesterday in Manhattan.

Gucci, a unit of Paris-based PPR (PP), sued in 2009 claiming that Los Angeles-based Guess was selling items in stores and online with logos that are “studied imitations of the Gucci trademarks.” The trademarks include a green and red stripe design and a diamond pattern with repeating interlocking G’s, according to Gucci’s court filings.

“It’s about a massive, complicated scheme to knock off Gucci’s best-known and iconic designs,” Louis Ederer, Gucci’s lawyer, told the judge yesterday. The company claims $221 million in Guess products infringed Gucci designs.

Guess said in court papers that Gucci can’t claim infringement because it “sat on its rights” for at least seven years before suing. Guess also said Gucci’s surveys failed to prove that consumers would be misled by the designs.

Daniel Petrocelli, a lawyer for Guess, said in his opening remarks that of 1,495 Guess products Gucci claimed were infringing, 99 percent “could never be confused with Gucci.”

“If there was a scheme, it failed miserably,” he said.

Gucci is seeking monetary damages and other assessments totaling more than $124 million, according to court papers.

Defendants also include Marc Fisher Footwear, the Max Leather Group and Swank Inc. (SNKI:US) The trial is expected to last at least two weeks.

The case is Gucci America v. Guess Inc., 09-4373, U.S. District Court, Southern District of New York (Manhattan).

For more trademark news, click here.

Copyright

German Court Rules That Rapidshare’s Business Model Is Legal

Rapidshare, one of the largest online file-locker sites in the world, is legal, a German court has ruled, PC World reported.

GEMA, Germany’s music-rights organization, sued Rapidshare for copyright infringement, seeking a judicial determination of the duties the company has to content owners, according to PC World.

Even though the court found Rapidshare’s business model legal, it did say the company must monitor incoming links from external sites to the files it hosts, and remove any illegal files it identifies, PC Magazine reported.

Rapidshare is planning to appeal the section of the court’s ruling that mandated proactive monitoring of foreign sites, Alexandra Zwigli, the company’s chief executive told PC Magazine.

Take My Film, Steal My Film, Filmmaker John Thomas Says

Independent filmmaker John Michael Thomas has called for fans to pirate his movie as a way of getting it seen by a wider audience.

In a March 26 blog posting, he said his film “Corpse Run,” which “made it into a few big film festivals, had a 500 person standing ovation” at its first showing, is languishing on the shelf. Its sole release is through Amazon.com as a print- on-demand title, Thomas said.

His posting included links to torrents through which the movie can be found. “Torrents” are content files shared through the BitTorrent protocol.

Thomas said while the film “is no ‘Citizen Kane,’” he’s proud of it and says it’s an entertaining movie to watch. “Corpse Run” is a film about a particular video game and how it has affected the “twenty-something generation,” he said.

For more copyright news, click here.

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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