Bloomberg News

Google, Apple, ‘The Bachelor’: Intellectual Property

June 08, 2012

Google Inc.’s bid to block imports of Microsoft Corp. (MSFT:US)’s Xbox gaming system and Apple Inc. (AAPL:US)’s iPhone based on patents owned by its Motorola Mobility unit may hurt competition, the U.S. Federal Trade Commission said.

Weighing in on cases before another U.S. agency, the International Trade Commission, the FTC said in filings yesterday that companies should be limited in their ability to win orders blocking imports of competitors’ products over the use of patents built into industrywide standards.

Motorola Mobility is citing its standard-essential patents to persuade the ITC to stop imports of Apple and Microsoft devices made in Asia. The ITC is gathering comments on whether such an import ban would be in the public interest. Final decisions in the cases are scheduled for August.

“We are concerned that it might be hindering innovation,” FTC Chairman Jon Leibowitz said in an interview with Bloomberg Government yesterday in Washington.

The FTC’s position would limit the power of companies like Motorola Mobility, Samsung Electronics Co. and InterDigital Inc. (IDCC:US) to use the international trade agency as a forum in patent disputes. Each company has asserted patents that cover aspects of industry standards they helped establish.

Companies participating in standard-setting groups pledge to license patents that cover aspects of the standards on “reasonable and non-discriminatory” terms. Such patents should be treated differently from other patents, Leibowitz said. Patents convey the power to exclude others from using an invention.

“A royalty negotiation that occurs under threat of an exclusion order may be weighted heavily in favor of the patentee in a way that is in tension with the RAND commitment,” the FTC wrote.

The result could be royalty rates that would lead to higher prices for consumers and less participation in standard-setting groups, the agency said. It suggested the ITC refrain from imposing an import ban or delay imposition until both sides mediate in good faith.

“The FTC joins a growing chorus of regulators from around the world who recognize the danger posed by companies who try to use standard-essential patents to block the sale of products,” David Howard, Microsoft’s deputy general counsel, said in an e- mailed statement.

The European Union is investigating complaints by Microsoft and Apple that Motorola Mobility is unfairly using standard- essential patents to block competition. Samsung also is being probed by the EU. Huawei Technologies Co. filed a complaint over royalty demands by InterDigital over third-generation technology on mobile phones.

There’s no clear definition of fair and reasonable, said Andrew Updegrove, a lawyer with Gesmer Updegrove in Boston who advises standards boards.

The Business Software Alliance, a trade group whose members include Apple and Microsoft, and computer maker Hewlett-Packard Co. (HPQ:US) also filed comments saying there shouldn’t be an import ban.

The ITC has more than a dozen pending cases involving smartphones and tablet computers, and lawsuits have spanned four continents with Apple and Microsoft going against makers of Android devices. Most don’t involve standard-essential patents.

Apple Seeks to Block Sales of Samsung’s New Galaxy Phone

Apple Inc. is seeking to block sales of Samsung Electronics Co. (005930)’s latest Galaxy smartphones in the U.S., deepening their worldwide patent dispute and raising pressure on the maker of the biggest iPhone competitor.

Apple asked a federal judge in San Jose, California, to include the Galaxy S III in its request to block sales of Samsung products in the U.S., according to a June 5 filing by the Cupertino, California-based company. The Samsung phone was to go on sale in the U.S. this month following the U.K. release in May, Apple said.

The filing reflects the failure of court-ordered talks between Apple Chief Executive Officer Tim Cook and his Samsung counterpart Choi Gee Sung last month. The world’s two biggest makers of high-end phones have accused each other of copying designs and technology for mobile devices and are fighting patent battles in four continents to retain their dominance in the $219 billion global smartphone market.

Apple’s request is without merit and Samsung will start selling the Galaxy S III in the U.S as planned, the Suwon, South Korea-based company said in a statement yesterday.

Samsung released the Galaxy S III in the U.K. on May 29 and U.S. carriers have announced they will start selling the smartphone in the U.S. on June 21, Apple said in the filing, saying it obtained the product in the U.K.

The June 5 filing was made in a companion suit related to Apple’s first patent infringement case filed against Samsung in federal court in San Jose. In the primary case, Judge Lucy Koh last week denied Apple’s renewed request for a ban on U.S. sales of the Galaxy Tab 10.1 tablet computer while the case is still before a federal court of appeals.

Samsung and Apple have been involved in more than 30 cases on four continents since the iPhone maker accused Samsung of “slavishly” copying its products in April last year to expand its patent battle against rival phone makers. Even as they fight in court, Apple remains the biggest buyer of Samsung’s chips and displays.

This week, Apple also filed an enforcement action at the U.S. International Trade Commission in Washington, seeking an emergency order that would block imports of HTC Corp.’s (2498) newest phones and tablet computers.

The case involving the June 5 filing is Apple Inc. v. Samsung Electronics Co. Ltd.,12-cv-00630, U.S. District Court, Northern District of California (San Jose). The first case is Apple Inc. v. Samsung Electronics Co., 11-01846, U.S. District Court, Northern District of California (San Jose).

For more patent news, click here.

Trade Secrets/Industrial Espionage

‘Bachelor’ Producers Settle Secrets Case Against ‘Reality Steve’

The producers of “The Bachelor” reality television program settled a lawsuit against the Texas-based operator of a “spoiler” website that discloses secrets about the program.

In the complaint filed Dec. 6 in federal court in Los Angeles, Burbank, California-based NZK Productions Inc. and Horizon Alternative Television Inc. accused Stephen Carbone of revealing “non-public information regarding events that transpired on the Bachelor series episodes prior to their broadcast.” Carbone operates the “Reality Steve” website.

“The Bachelor” and its spinoff “Bachelorette,” which are broadcast on Walt Disney Co.’s ABC network, each feature a principal character who chooses a potential marriage partner from among 25 contestants selected by the producers. The identity of the chosen person -- who is given the “final rose” -- isn’t revealed until the final show of the series.

According to the complaint, Carbone contacted participants and cast and crew members of “The Bachelor” and induced them to breach their confidentiality agreements. He then allegedly posted the information on his website. In many cases his “spoilers” accurately predicted the outcome of the show on a week-by-week basis and identified the winner well in advance of the show’s conclusion, according to the complaint.

The producers claimed Carbone offered at least one participant $2,500 to reveal information about the show.

Although Carbone was sent a cease-and-desist letter in August, and a second in November, he continued to solicit confidential information from participants in the program, according to court papers.

In a statement posted on his website, Carbone acknowledged that he did approach three former contestants and “offered them compensation in return for information regarding the show.” He said all three refused and that he never paid for any advance information he revealed about the program.

On June 1, the producers filed court papers saying they sought to dismiss the suit. Under terms of the agreement signed by Carbone, he cannot initiate contact with the cast, crew or other employees of the program concerning any non-public details of the show.

In his website posting, Carbone said that although he will abide by the agreement, it “does not prevent me from spoiling the show, and I will continue to do so like I have for the past three years.”

The case is NZK Products Inc., v. Stephen Carbone, 2:11-cv- 10118-GHK-E, U.S. District Court, Central District of California (Los Angeles).

For trademark news, click here.

Copyright

Music License Fees Waived for Diamond Jubilee Street Parties

The U.K.’s Performing Rights Society, which collects royalties for music performances, gave nonprofit groups a pass for certain events held in connection with this week’s diamond jubilee celebration for Queen Elizabeth.

According to a statement on the PRS website, license fees were waived for local community events with fewer than 300 attendees that were organized and run by unpaid volunteers.

More than 10,000 such parties were held in the U.K. this week to celebrate the jubilee, the Telegraph newspaper reported.

Copyright Opponents Likened by Filmmaker to Gay-Marriage Foes

A U.S. filmmaker likened opponents of the copyright system to foes of same-sex marriage.

Both employ similar arguments, David Newhoff said in blog post for the Copyright Alliance -- an advocacy group of content owners and rights societies. Copyright opponents claim enforcement of copyrights threatens free speech in the same way that opponents of same-sex marriage claim that allowing gays to marry threatens freedom of religion, he wrote.

Newhoff is known for “Gone Elvis,” a film about a homeless female veteran.

For more copyright news, click here.

Trademarks

Angie’s List Sues IAC/Interactive Unit for Infringing Trademark

Angie’s List Inc., an Indianapolis-based provider of product and company reviews, sued a competitor for trademark infringement.

The suit, filed June 1 in federal court in Indianapolis, accuses IAC/Interactive Corp. (IACI:US)’s ServiceMagic unit of infringing the “Angie’s List” trademarks.

According to court papers, ServiceMagic of Golden, Colorado, has made unauthorized use of the mark in its sponsored links accessed through Google Inc. (GOOG:US)’s search engine. Google is not a party to the suit.

Angie’s List claims that when potential customers search for “Angie’s List” on Google, ads for ServiceMagic pop up because the Colorado company has bought the term as a keyword. Because those who do a Google search most often click on the first link that comes up, according to the complaint, Angie’s List is losing customers to ServiceMagic that had intended to go to Angie’s List’s website.

That causes Angie’s List to incur “unnecessary and excessive expenses to combat and mitigate the effects” of this alleged infringement, the company said in its pleadings.

Angie’s List asked the court to order ServiceMagic to halt its alleged infringement, and for an award of money damages.

ServiceMagic is “not able to comment on pending litigation,” spokeswoman Brooke Gabbert said in an e-mail.

The case is Angie’s List Inc. (ANGI:US), v. ServiceMagic Inc, 1:122- cv-00755-SEB-TAB, U.S. District Court, Southern District of Indiana (Indianapolis).

IP Moves

Wolf Greenfield Expands IP Litigation Group With New Hires

Wolf, Greenfield & Sacks PC added three IP specialists to its litigation group, the Boston-based firm said in a statement.

Gregory F. Corbett joined from Chicago’s Kirkland & Ellis LLP. He has represented clients whose technologies include semiconductors, chemical products and processes, pharmaceuticals, medical devices, computer interfaces and wireless and cellular communication.

He has an undergraduate degree in chemistry from Harvard University and a law degree from Boston College. He served as a judicial clerk to Judge Arthur J. Gajarsa of the U.S. Court of Appeals for the Federal Circuit, the Washington-based court that hears appeals of patent cases. He also was a judicial clerk for U.S. District Judge Edward F. Harrington in Massachusetts.

D. Alexander Ewing joined from Boston’s Wilmer Cutler Pickering Hale & Dorr LLP. He served as a judicial clerk for Judge Robert H. Henry of the U.S. Court of Appeals for the 10th Circuit and for U.S. District Judge William G. Young in Massachusetts.

Ewing has represented clients in the wireless, alternative energy, semiconductor manufacturing and testing-equipment industries. His undergraduate and law degrees are from Harvard University.

Nathan Speed also joined from WilmerHale. Like Corbett, he served as a judicial clerk for the Federal Circuit’s Gajarsa. He has an undergraduate degree from Brandeis University and a law degree from Boston University.

To contact the reporter on this story: Victoria Slind-Flor in San Francisco at vslindflor@bloomberg.net

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


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