Bloomberg News

Siemens, Technicolor, Google, IBM: Intellectual Property

May 30, 2012

The U.S. Supreme Court let stand a jury verdict that will cost Cie. de Saint-Gobain SA’s ceramics and plastics business more than $44 million in a patent fight with a Siemens AG (SIE) unit.

Rejecting a Saint-Gobain appeal in a dispute over a crystal used in medical-imaging devices, the justices yesterday refused to question a federal appeals court ruling that upheld the verdict. The appeals court also told a trial judge to consider increasing the $44.9 million award to account for additional products that infringed Siemens’s patent 4,958,080.

The Supreme Court rebuff came at the urging of the Obama administration, which told the justices that the appeals court reached the right conclusion.

The dispute was over the composition of crystals that convert gamma rays into light to produce a three-dimensional image of the body to test for diseases. Siemens, based in Munich, makes crystals for its positron emission tomography, or PET, tests. Saint-Gobain, based in Courbevoie, France, produces the crystals for products made by Royal Philips Electronics NV. (PHG:US)

Siemens Medical Solutions USA was awarded $44.9 million after it sued in 2007 over the sale of crystals for 61 scanners made by Philips Medical Systems. The U.S. Court of Appeals for the Federal Circuit in Washington said the trial court should have included a royalty award on 18 additional scanners. Philips wasn’t named in the lawsuit.

Saint-Gobain is Europe’s biggest supplier of building materials and Siemens is Europe’s largest engineering company.

The case is Saint-Gobain Ceramics & Plastics v. Siemens Medical Solutions USA, 11-301.

Technicolor Dissects IPhones in Hunt for Patent Payoff

When Apple Inc. (AAPL:US)’s next iPhone hits store shelves, Technicolor SA (TCH)’s engineers will rush to get the handset -- not to make calls or play games, but to rip it apart.

Technicolor, an unprofitable French company that invented the process for color movies used in “The Wizard of Oz” and countless other classics, plans to cash in on its 40,000 video, audio and optics patents to turn its fortunes around. The company has a team of 220 people dissecting every new smartphone and tablet from industry goliaths such as Apple, Samsung Electronics Co. (005930) and HTC Corp. (2498) for patent infringements.

Google Inc., creator of the market-leading Android mobile- phone technology, this month completed the $12.5 billion takeover of Motorola Mobility Holdings Inc.’s mobile-phone business and its 17,000 patents. Equipment vendor Ericsson AB expects to increase revenue from its 27,000 patents, while rival Alcatel-Lucent SA (ALU) says it plans to generate several hundred million euros this year alone from its 29,000 rights.

Prompted by surging demand for patents that regulate functions such as sliding gestures on touchscreens or the rendering of graphics for games and applications, lawsuits over smartphone and tablet technology have been filed worldwide.

Patent licensing is Technicolor’s most profitable business. The licensing division had a 76 percent operating profit margin last year, helped by 1,200 contracts with television, computer and handset makers

Third Point LLC and Apollo Management Holdings, which together own 13.4 percent of Technicolor according to data compiled by Bloomberg, have been pushing for a sale of the company’s patent portfolio, Le Figaro newspaper reported April 19. Third Point and Apollo representatives declined to comment.

While the patent licensing business is lucrative, it often takes time before a company can cash in. Patent negotiations often last between one and four years, de Russe said.

The company is currently fighting in U.S. courts with Taiwanese manufacturers over patents used in LCD computer monitors, after it filed a complaint with the International Trade Commission. The process was started after several years of failed discussions.

“We’ve got a reputation for charging reasonable licensing fees and preferring friendly negotiations,” Beatrix de Russe said. She is a lawyer and the executive vice president of intellectual property at Technicolor. “That doesn’t mean we don’t drag people to court from time to time,” she said.

For more patent news, click here.

Copyright

Google’s YouTube Wins French Case Over Copyrighted TV Clips

Google Inc. (GOOG:US)’s YouTube video-sharing website won a French copyright lawsuit filed by broadcaster TF1, which had sought more than 140 million euros ($175 million).

YouTube can’t be held responsible for videos posted by users because it merely hosts the content, the Paris Tribunal de Grande Instance said in a ruling yesterday. The court dismissed TF1’s claims and ordered it to pay YouTube 80,000 euros in costs.

TF1 sued Google in 2008, seeking damages for broadcasts illegally uploaded by users, including the Oscar-winning film “La Vie En Rose” and “Grey’s Anatomy,” a U.S. medical drama for which it holds the French broadcast rights. The case is similar to a U.S. lawsuit by Viacom Inc. (VIAB:US) that seeks $1 billion in compensation for illegal uploads of its programs.

Christophe Muller, Google’s head of YouTube partnerships for southern Europe, said the decision meant Google could host content posted by users “without fearing a giant liability.”

“The end result will be more videos posted on the net, more revenue generated for creative artists, and more exposure to a global audience for these artists,” Muller said in a blog post.

Juliette Dumas, a spokeswoman for TF1 in Paris, didn’t immediately respond to an e-mail seeking comment on the ruling. The decision can be appealed to a higher court.

Kim Dotcom Can Return to Luxury Mansion, New Zealand Court Says

Megaupload.com founder Kim Dotcom, accused of orchestrating the biggest copyright-infringement conspiracy in U.S. history, can return to his leased luxury mansion after a New Zealand court relaxed bail terms.

The judge ruled yesterday that Dotcom was no longer a flight risk, granting the removal of electronic tags the Internet tycoon was required to wear, according to a report on stuff.co.nz. Dotcom had been staying in a smaller home next to the mansion in an Auckland suburb. Ministry of Justice spokespeople were unable to obtain a copy of the ruling for Bloomberg News.

Dotcom, 38, was indicted in what U.S. prosecutors dubbed a “Mega Conspiracy,” accusing his file-sharing website of generating more than $175 million in criminal proceeds from the exchange of pirated film, music, book and software files. He faces as long as 20 years in prison for each of the racketeering and money-laundering charges in the indictment.

German-born Dotcom was arrested at his residence in late January and spent four weeks in jail before being released to await an extradition hearing, currently scheduled for Aug. 20. When police raided the mansion in Coatesville, north of Auckland, they seized 18 luxury vehicles, including a Rolls Royce Phantom Drophead Coupe and a 1959 pink Cadillac.

The Dotcom mansion is valued at NZ$30 million ($23 million), according to an article on the stuff.co.nz website. The property is also known as the “Chrisco mansion,” because it was built by the founders of the Christmas hamper company, Chrisco Hampers Australia Ltd.

Dotcom last month said that New Zealand politician John Banks, leader of the one-seat ACT party in coalition with Prime Minister John Key’s government, incorrectly reported that donations of NZ$50,000 from Dotcom toward his failed 2010 bid for the Auckland mayoralty were anonymous.

Dotcom then lampooned the politician in a rap song he recorded at Crowded House singer Neil Finn’s recording studio in Auckland, along with an accompanying music video.

For more copyright news, click here.

Trade Secrets/Industrial Espionage

China Supreme Court to Hear AMSC Intellectual-Property Suit

American Superconductor Corp. (AMSC:US), a U.S. maker of wind-turbine components, said China’s highest court agreed to hear an intellectual-property suit against Sinovel Wind Group Co.

The case is seeking $200,000 in damages and is the smallest of four suits AMSC is pursuing in China against its former largest customer, the Devens, Massachusetts-based company said in an e-mailed statement yesterday.

AMSC is seeking a total of more than $1.2 billion in damages from China’s biggest turbine maker for allegedly violating sales contracts and stealing its technology. Sinovel stopped accepting contracted shipments in March 2011. A former AMSC employee in Austria pleaded guilty in September to charges including economic espionage for passing software to Sinovel.

A provincial court dismissed the $200,000 case in February and AMSC filed its appeal with China’s Supreme People’s Court in April. The copyright infringement suit also names Dalian Guotong Electric Co. as a defendant.

AMSC said in the statement that there is a “significant amount of evidence that its copyrighted software is being infringed.”

IBM Sets Guidelines to Prevent Data Loss on Employees’ Devices

International Business Machines Corp. (IBM:US)’s “bring your own device” policy has some downsides, Jeanette Horan, the company’s chief information officer, said in an interview published in the Massachusetts Institute of Technology’s Technology Review magazine.

She said many employees, who are using their own smartphones and tablets, were “blissfully unaware” of potential security risks some popular apps could pose, according to Technology Review.

IBM, based in Armonk, New York, has set up guidelines for apps that should be avoided, including public file-transfer services Horan said could potentially let confidential company information out for public viewing, Technology Review reported.

All employee-owned devices used to access IBM networks must be configured by the company’s information-technology department so the memory can be purged remotely if the device is stolen, Horan told Technology Review.

Trademark

Ownership Claim for ‘Hon’ Mark All a Mistake, Festival Head Says

Even though Baltimore restaurateur Denise Whiting abandoned her attempts to register “hon” with the U.S. Patent and Trademark Office last year, promotional material for the annual “HonFest” celebration of Baltimore’s favorite term of endearment warned would-be users of the term that they were in danger of trademark infringement, the Baltimore Sun reported.

Festival paperwork for HonFest, which centers around Whiting’s Café Hon, warned that items bearing the word “hon” without permission would be subject to confiscation as counterfeit merchandise, according to the newspaper.

Lisa Davis, who headed “HonFest,” told the Sun it was all a mistake and said the warning was included because she hadn’t noticed it was still included in the promotional material.

Tissue Paper Rings Violate Olympics Marks, London Florist Warned

A London florist was told her display of five tissue paper rings was a trademark violation and that she could be sued by the committee organizing the London 2012 Olympic Games and Coca- Cola Co., the games’ sponsor, This Is Staffordshire news website reported.

The florist said she had only intended to “help people get into the Olympic spirit,” and “was just trying to support” her nation’s team rather than advertise her own products, according to the website.

A spokesman for the London Organizing Committee of the Olympic and Paralympic Games said that each case of potential infringement will be dealt with “on an individual basis,” but the committee’s preference was for education about trademark rights rather than litigation, the website reported.

For more trademark 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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