Bloomberg News

Finra, Samsung, Textron, Daimler: Intellectual Property

September 10, 2012

A California company that offers training for the Financial Industry Regulatory Authority examination denied misappropriating the agency’s trade secrets in a response to a lawsuit in federal court.

In a statement posted on its website Sept. 5, Training Consultants LLC of Santa Ana, California, said it will take “all available action to vigorously defend ourselves from these claims.” Training Consultants said it hired “the most qualified” attorneys to fight Finra and “looks forward to clearing our good name.”

Finra sued Training Consultants in federal court in Santa Ana on Aug. 28, accusing its employees of conspiring to misappropriate the trade secrets related to the Finra exams. Three of the defendants, children of Training Consultants founder Christina Leahy, allegedly failed the exam deliberately, repeating the test 64 times so they could memorize the questions.

The agency claims the defendants then distributed the memorized questions to Training Consultants clients for practice exams that gave the clients an unfair advantage over other test takers. The reproduction of the questions constituted copyright infringement, Finra claimed.

The agency asked for court orders barring further use of its proprietary information, together with awards of money damages, attorney fees and litigation costs.

Training Consultants’ legal counsel aren’t listed yet in case filings, according to data compiled by Bloomberg.

The case is Financial Industry Regulatory Authority Inc. v. Training Consultants LLC, 8:12-cv-01385-AG-JPR, U.S. District Court, Central District of California (Santa Ana).

Patents

Samsung Says Apple Patent Invalid as Court Hears Claim on Galaxy

Samsung Electronics Co. (005930) said Apple Inc. (AAPL:US)’s patent claim on so-called multitouch flags isn’t valid, as its main competitor in smartphones pursues an infringement case in the Netherlands to ban Samsung Galaxy handsets.

Apple claims Galaxy smartphones and tablets infringe the patent that interprets finger activity on touch screens. Cupertino, California-based Apple lost an earlier claim against HTC Corp. (2498) in the U.K. for infringing the patent, as a U.K. judge said it was invalid because it was too obvious, according to Bas Berghuis van Woortman, a lawyer for Simmons & Simmons LLP representing Samsung.

“The patent is just a marginal solution for a problem that doesn’t exist,” the Samsung lawyer said in court in The Hague.

The court started a new round of trials between Apple and Samsung Sept. 7 covering multiple patents and proceedings as Apple seeks a ban on Galaxy devices in the country, where the Suwon, South Korea-based company has its distribution center for Europe. The companies compete in a global smartphone market that grew 62 percent to $219 billion last year, according to data compiled by Bloomberg Industries.

In Germany, Apple started a similar action against both Google Inc. (GOOG:US)’s Motorola Mobility unit (MMI:US) and Samsung. A Mannheim court is scheduled to issue a verdict Sept. 21. Last year, Apple’s claims about several smartphone and tablet patents were dismissed in the Netherlands in preliminary proceedings.

Apple won a verdict of more than $1.05 billion in the U.S. Aug. 24 after jurors found Samsung infringed six of seven patents for mobile devices.

Textron Patent Case Against Eurocopter Revived on Appeal

Textron Inc. won an appeals court ruling that will let it pursue patent-infringement claims against Eurocopter SAS over helicopter landing gear assemblies.

A lower court was wrong to say that Eurocopter, a unit of European Aeronautic Defense & Space Co., didn’t infringe a Textron patent, the U.S. Court of Appeals for the Federal Circuit Sept. 7. The Washington-based appeals court, in a decision posted on its website, remanded the case for further proceedings.

Textron had sued Eurocopter in a Texas federal court in June, 2009, claiming its patent 5,860,621 was infringed.

The appeals court case is Textron Innovations v. Am Eurocopter, 11-01309, U.s. Court of Appeals for the Federal Circuit. The lower court case is Bell Helicopter Textron Inc. (TXT:US) v. American Eurocopter LLC, 4:09-cv-00377-A, U.S. District Court, Northern District of Texas (Fort Worth).

Daimler Defeats Patent Challenge Over Drowsiness Detection

Daimler AG (DAI)’s Mercedes-Benz unit won a U.S. lawsuit that accused the carmaker of infringing a patent for a monitor to detect when a motorist is drowsy.

The patent 6,313,749, owned by licensing company Ibormeith IP LLC, is invalid, U.S. District Judge Faith Hochberg ruled Sept. 5 in federal court in Newark, New Jersey. She said the patent owner never clearly described what the invention claimed to cover.

The lawsuit, filed in October 2010, targeted the Mercedes Attention Assist feature used in the E-Class and some S-Class vehicles. The feature monitors a driver’s behavior at the start of a trip and develops a profile for comparison throughout the journey. If the pattern alters, an alarm is sounded suggesting the driver take a break.

Patent law requires inventors to describe, in definite terms, the scope of their invention, much like a landowner must explain his property borders so others know where to avoid.

While the Ibormeith patent claims to cover an algorithm to compute the changes in a driver, it “fails to disclose the steps necessary to actually perform that suggested algorithm,” Hochberg ruled.

Patents are rarely ruled indefinite, according to a statement Sept. 7 by Shearman & Sterling LLP, the law firm that represented Stuttgart, Germany-based Daimler in the case.

The case is Ibormeith LLC v. Mercedes-Benz USA LLC, 10-cv- 5378, U.S. District Court, District of New Jersey (Newark).

For more patent news, click here.

Trademark

Wesfarmers’ Target Says Estee Lauder Suing Over Cosmetics (

Wesfarmers Ltd. (WES)’s Target department store chain in Australia said it is being sued by Estee Lauder Cos. (EL:US), which claims the retailer sold counterfeit cosmetics under its Mac brand name.

A hearing is scheduled in Sydney federal court on Sept. 10. Target said in an e-mailed statement it withdrew the products as a “gesture of goodwill.”.

Estee Lauder, based in New York, sells Mac products through authorized retailers, including Mac freestanding stores and Myer Holdings Ltd. (MYR) and David Jones Ltd. (DJS) stores, Estee Lauder’s Mac Cosmetics unit said in a statement on its website. Australian department store sales fell 10.2 percent in July, the biggest drop since April 2005.

Mac Cosmetics tested samples in U.S. laboratories and found the products sold at Target Australia were counterfeit, the company said in a statement on its website.

“We did not supply any Mac products to Target Australia,” Mac Cosmetics said in the statement.

Target Australia, which isn’t affiliated with the U.S. discount store chain of the same name, said it believes the Mac products were legally bought by a domestic supplier from an overseas wholesaler, allowing it to sell the cosmetics for 40 percent less than other Australian retailers.

“Sourcing genuine product in this way, a process known as parallel importing, is not illegal in Australia and can result in significant savings for our customers,” Target said.

The department chain is conducting further testing of the products, and until those tests are complete, it won’t sell any more Mac products, Target said.

A copy of Estee Lauder’s claim wasn’t immediately available from the court.

The case is Make-up Art Cosmetics Inc. v. Target Australia Pty. NSD1335/2012/Federal Court of Australia (Sydney).

For more trademark news, click here.

Copyright

Jolie Responds to ‘Land of Blood and Honey’ Infringement Suit

Angelina Jolie has responded to a suit alleging her 2011 film “In the Land of Blood and Honey” infringes the copyright of a Croatian journalist.

The suit, which was originally filed in federal court in Chicago, was transferred to California in July.

In the complaint, James J. Braddock claims Jolie’s film contains “similarities so substantial” to his Croatian- language book “The Soul Shattering” that his copyrights are infringed.

Among the instances he cites were the fact that both are love stories taking place in Bosnia and Herzegovina in the early 1990s, the main female character is Muslim, and in both works, she is subject to abuse and rape by soldiers and officers. He says that the main male character in both works is a high- ranking “Greater Serbian” nationalist and army officer.

Braddock claimed that he met repeatedly with a Bosnian resident and film producer who is a co-defendant with Jolie, and that they discussed making a film from his book. He learned of Jolie’s film in 2010, and that the Bosnian film producer was “actively involved in its production.”

Also known as Josip J. Knezevic, Braddock asked the court for money damages, and awards of litigation costs and attorney fees. Additionally, he asked for an order barring the distribution and performance of the film.

In her response filed with the court Sept. 4, Jolie said the film was created “independently without any influence” of Braddock’s work. She said that many of the elements Braddock claims are infringed aren’t protectable under U.S. copyright law.

She and her co-defendants asked the court to give nothing to Braddock and for awards of litigation costs and attorney fees.

The case is Braddock. v. Jolie, 2:12-cv-05883-DMG-VBK, U.S. District Court, Central District of California (Los Angeles).

Obama ‘Hope’ Artist Fairey Sentenced to Community Service

Shepard Fairey, the artist who created an iconic 2008 election poster of Barack Obama based on an Associated Press photo, was sentenced to 300 hours of community service for destroying documents and manufacturing evidence in a copyright suit with the AP over that image.

Fairey, of Los Angeles, was also ordered to pay a $25,000 fine by U.S. Magistrate Judge Frank Maas Sept. 7 in Manhattan federal court. Fairey pleaded guilty in February and faced as long as six months in jail.

The plea stemmed from a civil copyright case Fairey and the AP settled last year. Fairey had sued AP in 2009, seeking a ruling that his poster didn’t infringe the copyright because his use of the photograph was protected by “fair use.” The news organization countersued.

In addition to the fine and community service, Maas sentenced Fairey to two years’ probation, which he said may be reduced after a year once he completes the community work.

In support of Obama’s 2008 presidential campaign, Fairey made posters using a stylized likeness of the candidate with the words “Hope” and “Progress” below the images, relying on a photograph copyrighted by AP, according to the government.

In his complaint, Fairey claimed he used as a visual reference an AP photograph of then-Senator Obama and actor George Clooney taken at an April 2006 National Press Club event, according to prosecutors. In fact, Fairey used another image from the same event -- a tightly cropped image of Obama gazing up, which was also an AP photograph, the government claimed.

To cover up his false complaint, Fairey created multiple fraudulent documents attempting to show that he had used the photograph of Obama and Clooney, and he tried to delete electronically stored documents that demonstrated that he had used the tightly cropped image, prosecutors said.

The criminal case is U.S. v. Fairey, 1:12-cr-00180, and the civil case is Fairey v. Associated Press, 1:09-cv-01123, U.S. District Court, Southern District of New York (Manhattan).

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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