Bloomberg News

‘The Godfather,’ Anti-Piracy: Intellectual Property

May 14, 2012

Proceeds from the sequel to Mario Puzo’s novel “The Godfather” published last week will be put in escrow while Paramount Pictures and the late novelist’s estate pursue litigation over the publishing rights.

“An interim agreement allows publication of the novel to go forward, pending resolution of this matter,” Richard Kendall, a lawyer for Los Angeles-based Paramount, said at a hearing May 11 in Manhattan federal court.

Paramount, a unit of New York-based Viacom Inc. (VIAB:US), sued Anthony Puzo, Mario’s son and the executor of his estate, in February to prevent the publication of a third sequel to “The Godfather,” claiming that it wasn’t authorized.

Puzo countersued in March, saying that Paramount disregarded contractual promises to his father and breached a 1969 agreement. Puzo said the contract between the late author and the studio excluded book publishing rights.

“It’s a question of fact, of how much importance it was to Puzo to reserve publishing rights,” Bertram Fields, a lawyer for the writer’s son, told U.S. District Judge Alison Nathan on May 11. “We’re seeking cancellation of the contract.”

The parties will attempt to resolve the dispute in mediation, the lawyers said.

Paramount said in its complaint that after Mario Puzo died in 1999, the company agreed to allow Bertelsmann AG’s Random House to publish a single Godfather sequel, “The Godfather Returns” in 2004. The estate published another novel, “The Godfather’s Revenge,” in 2006 without Paramount’s approval, the studio said. Paramount said the estate informed it last year of plans to publish a third sequel.

That volume, “The Family Corleone” by Ed Falco, was published on May 8, according to the website of Grand Central Publishing.

The case is Paramount Pictures v. Puzo, 12-01268, U.S. District Court, Southern District of New York (Manhattan).

Copyright

EU’s Highest Court Asked to Rule on Global Anti-Piracy Treaty

The European Union’s top court was asked to rule on the legality of a global anti-piracy treaty, delaying the region’s approval for the accord aimed at preventing counterfeiting worldwide.

The European Commission, the 27-nation bloc’s executive arm, asked the European Court of Justice to check if the agreement, known as ACTA, is compatible with EU treaties and the region’s Charter of Fundamental Rights, John Clancy, an EU spokesman, said in en e-mailed statement from Brussels on May 11.

“The Court’s opinion is vital to respond to the wide- ranging concerns voiced by people across Europe on whether ACTA harms our fundamental rights in any way,” Clancy said.

The Anti-Counterfeiting Trade Agreement is intended to set global rules for cracking down on the pirating of copyrighted materials, including illegal file sharing on the Internet. Protesters in Germany and other European countries have complained that the treaty may harm freedom of expression and information sharing online.

In addition to the EU, signatory countries include the U.S., Japan and South Korea. The accord needs to be ratified by all 27 EU governments before it can come into effect.

Germany’s government was at odds with national lawmakers over the ACTA agreement, the Passauer Neue Presse newspaper reported in February. Bulgaria refused to ratify ACTA in February pending a clear EU position on the accord. Finland also postponed its final approval on the treaty until the EU had ruled, the government said in March.

EBay Says Fines May Be Cut After Appeal on Sales of LVMH Fakes

EBay Inc. (EBAY:US) said it may win a reduction in fines after France’s high appeals court overturned part of a 2010 decision holding it responsible for sales of counterfeit LVMH Moet Hennessy Louis Vuitton SA (MC) goods on its website.

The Cour de Cassation on May 3 referred the case back for retrial by a Paris court of appeal. An earlier appeals court had maintained a Paris commercial court’s finding that EBay didn’t do enough to stop the sale of fakes, while slashing fines imposed by the tribunal.

“We are pleased that the ability of lower courts to impose an injunction against EBay has been lifted and that the damages against EBay are likely to be further reduced,” the world’s largest Internet marketplace said in an e-mailed statement.

EBay has been in a multi-year dispute with brand owners over how vigilant it is in policing its site for fakes. The San Jose, California-based company already claimed victory in 2010 when the appeals court cut the fines imposed by the commercial court in 2008 to 5.6 million euros ($7.4 million) from almost 40 million euros.

LVMH, the world’s largest maker of luxury goods, also called that decision a win, for maintaining the earlier finding that EBay was liable for fakes sold between 2001 and 2006 on its site.

Hugues Schmitt, an external spokesman for LVMH, said the company had no comment.

For more copyright news, click here.

Trials

Mitsubishi Electric Loses $124 Million Jury Verdict to Grail

Mitsubishi Electric & Electronics USA Inc. was told by a California jury to pay Grail Semiconductor Inc. $124 million in a breach-of-contract lawsuit.

Mitsubishi Electric disclosed Grail’s confidential information for a memory chip to an affiliate company, Mitsubishi-Japan, and a jointly owned Japanese company, Renesas, Raymond P. Niro, a lawyer representing Grail, said in a phone interview.

The May 10 verdict, issued by a state court jury in San Jose, is the seventh-largest jury award in the U.S. so far in 2012, according to data compiled by Bloomberg. The largest, for $900 million, was awarded by a Florida jury to a nursing home resident who suffered multiple injuries from untreated bed sores.

“We believe that the decisions on liability and damages are fundamentally flawed and that Mitsubishi Electric & Electronics USA Inc. will be fully vindicated,” David S. Elkins, a lawyer representing Mitsubishi Electric, a unit of Tokyo-based Mitsubishi Electric Corp. (6503), said in an e-mail.

Grail co-founder Donald Stern met with a team from Mitsubishi Electric in April 2001 in San Jose and “disclosed technology for a memory chip,” Niro said. Mitsubishi Electric “took the information, introduced it and captured the market,” Niro said.

Grail and Stern sued, claiming Mitsubishi Electric used the technology on memory chips it introduced in 2004, Niro said.

The case is Grail Semiconductor Inc. v. Mitsubishi Electric & Electronics USA Inc., 1-07-cv-098590, Santa Clara County Superior Court (San Jose).

Bankruptcy

Betsey Johnson Allowed to Sell Merchandise to Liquidators

Betsey Johnson LLC, the bankrupt women’s fashion retailer, won approval to sell all of its merchandise to a joint venture formed by liquidators Hilco Merchant Resources LLC and Gordon Brothers Retail Partners LLC.

U.S. Bankruptcy Judge James Peck in Manhattan on May 10 approved the deal after lawyers for the company said it was the best one achieved through an auction. Liquidating sales started May 11.

Betsey Johnson will get 102 percent of the merchandise’s cost value, estimated at as much as $6.7 million, according to court papers.

The deal was reached after nine rounds of bidding that started with an initial guaranteed percentage of 89 percent, James Wallack, a lawyer for Betsey Johnson with Goulston & Storrs PC, told Peck. Liquidators take on selling costs for merchants to quickly sell merchandise.

Betsey Johnson listed assets and debt of as much as $50 million each in its April Chapter 11 filing. Formed as B.J. Vines in 1978, the company sells clothing, footwear, handbags and a signature fragrance through 66 Betsey Johnson boutiques, according to the company’s website.

In 2010, Steven Madden Ltd. (SHOO:US) a footwear designer and marketer, swapped $27.6 million of secured debt for ownership of Betsey Johnson’s trademarks and intellectual property. The unit that filed for bankruptcy isn’t part of Steven Madden.

The case is In re Betsey Johnson LLC, 12-11732, U.S. Bankruptcy Court, Southern District of New York (Manhattan).

IP Moves

Greenberg Traurig Adds Shareholder in Orange County Office

J. Rick Tache, a registered patent attorney who represents clients in patent, trademark, copyright and trade secret litigation and transactional work, has joined Greenberg Traurig LLP in its Orange County, California, office as a shareholder.

Tache has more than 20 years of experience and has a longstanding patent and trademark prosecution practice serving the medical devices, aerospace, software, hardware and high-tech industries, according to a statement by the firm.

Prior to Prior to joining Greenberg Traurig, Tache was a partner with Snell & Wilmer LLP. Before that, he was executive vice president and general counsel of Northpole Ltd.

To contact the reporter on this story: Ellen Rosen in New York at erosen14@bloomberg.net

To contact the editor responsible for this story: Michael Hytha at mhytha@bloomberg.net


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