Bloomberg News

Apple, Zynga, Gruma, Dole, Jovani: Intellectual Property

October 16, 2012

Apple Inc. (AAPL:US) appealed a Tokyo ruling that said Samsung Electronics Co. didn’t infringe on the iPhone maker’s patent as the world’s top two smartphone sellers continue their global legal dispute.

Apple appealed an Aug. 31 ruling by Tokyo District Court that said Samsung didn’t violate Apple’s invention of technology for synchronizing music and video data with servers, Yutaka Sakai, a court spokesman, said by phone yesterday. Cupertino, California-based Apple was ordered by Tokyo District Judge Tamotsu Shoji at the time to pay costs of the lawsuit.

Samsung, based in Suwon, South Korea, and Apple have been suing each other over patent-infringement claims on four continents for more than a year since the U.S. company accused its rival and partner of copying some features of the iPhone and iPad. In August, Apple won more than $1 billion in damages in a jury trial in San Jose, California.

Carolyn Wu, a spokeswoman for Apple in Beijing, couldn’t be reached immediately for comment. Nam Ki Yung, a Seoul-based spokesman for Samsung, said the company didn’t have immediate comment.

The two companies lead the global market for smartphones estimated by Bloomberg Industries to be worth $219 billion last year. They also maintain commercial ties where Samsung gets about 4 percent in revenue from selling chips and displays used in Apple products, according to data compiled by Bloomberg.

For more patent news, click here.

Trade Secrets/Industrial Espionage

Zynga Sues for Trade Secret Theft After Ex-Employee Joins Kixeye

Zynga Inc., the San Francisco-based games company, has sued its former studio general manager for trade-secret misappropriation and breach of contract.

Alan Patmore took with him more than 700 files containing confidential Zynga information when he left the company in August to join competitor Kixeye, according to the complaint filed Oct. 12 in state court in San Francisco.

Zynga claims these files contained revenue information, and monetization strategy for its games, plus design documents for more than 10 unreleased games, in addition to 14 months of confidential e-mails reserved exclusively for Zynga’s executive staff.

The San Francisco games company alleges that Kixeye, which like Zynga, releases free-to-play online social games, has “failed to achieve success” because it lacks Zynga’s know-how. Zynga said that on Patmore’s final day of employment, he refused to confirm he had returned company data, and refused to sign a termination certification document.

According to a statement on the Kixeye website, Patmore joined the company, which is also based in San Francisco, as vice president of product on Aug. 23. Will Harbin, Kixeye chief executive officer, said in the statement that Patmore brought “a killer product instinct and an ability to deliver high quality games” to his new job.

Zynga asked the court to bar use of its trade secrets by Patmore and 50 unidentified defendants, and asked that the confidential information be returned immediately. Additionally, it asked for money damages, claiming Kixeye has been “unjustly enriched” through the use of the trade secrets. Zynga also seeks extra damages to punish Patmore and the other defendants for their actions, together with awards of litigation costs and attorney fees.

Kixeye “has nothing to do with the suit,” company spokesman Bryan Lam said in an e-mail. He said the suit “appears to be Zynga’s new employee retention strategy: suing former employees to scare current employees into staying. They’ve clearly exhausted other options in their employee retention playbook.”

The case is Zynga Inc. (ZNGA:US) v. Alan Patmore, CGC-12-525099, Superior Court of the State of California (County of San Francisco).

W.L. Gore Seeks Court Sanctions Against Ex-Company Scientist

W.L. Gore & Associates Inc., the maker of waterproof Gore- Tex fabric, asked a judge to punish one of its former top scientists, claiming he’s using company secrets to start his own business in violation of a court order.

Huey Shen Wu was ordered in 2006, following a lawsuit in Delaware Chancery Court, to refrain from developing any products for sale related to polymers he worked on while he was with Gore, the company said in a complaint filed yesterday in Wilmington, Delaware. Wu has established companies in Taiwan and China that will use trade secrets he learned while at Gore, the complaint alleges.

Wu “has told Chinese television reporters that the anticipated annual revenue of this enterprise will be approximately $95 million,” according to the court filing in Chancery Court.

The dispute involves the use of one of Gore’s signature products, material made from polymers known as PTFE. Gore makes military clothing designed to protect troops against chemical and biological weapons. Wu is planning to compete with Gore through various companies he is affiliated with, including Perfect Defense Technology, according to court papers.

Wu and other officials of Perfect Defense didn’t immediately reply to an e-mailed message seeking comment on the allegations.

Closely held Gore is based in based in Newark, Delaware. The company was founded by a former DuPont Co. (DD:US) scientist.

The case is W.L. Gore & Associates Inc. v. Huey Shen Wu, 7946, Delaware Chancery Court (Wilmington).

Trademark

Gruma’s ‘Mission’ Trademark Infringed, Appeals Court Rules

Gruma SAB, the maker of Mission brand tortillas, convinced a federal appeals court that a chain of Texas restaurants infringed its trademarks.

The tortilla company, based San Pedro Garza Garcia, Mexico, sued Mexican Restaurants Inc. in federal court in Sherman, Texas, in September 2009, claiming the Houston-based company’s Mission Burritos chain infringed the “Mission” trademark.

That case was dismissed after a judge found that that the similarities between the marks didn’t have a negative effect on the Mexican company, and that there was no infringement. Gruma appealed, and the U.S. Court of Appeals in New Orleans agreed.

In its Oct. 11 ruling, the appellate court said that there is a “great deal of similarity” between Gruma’s and the restaurant chain’s marks. Gruma’s mark “is distinctive, is in substantial exclusive use and has a high degree of recognition.” The restaurant’s Mission Burrito mark “dilutes the distinctive quality” of the Mexican company’s mark, the appeals court said.

The distinction between Gruma’s pre-packaged food products sold in retail stores and finished food products sold in the restaurants “is not enough to show that products are dissimilar,” the court found.

After reversing the trial court’s holding, the appeals court sent the case back for further proceedings.

The appeals court case is Gruma Corp. v. Mexican Restaurants Inc. (CASA:US), 11-41105, U.S. Court of Appeals for the Fifth Circuit (New Orleans). The lower court case is Gruma Corp. v. Mexican Restaurants Inc., 4:09-cv-00488-MHS-ALM, U.S. District Court, Eastern District of Texas (Sherman).

Dole Seeks ‘Ethical Choice’ New Zealand Trademark Registration

Dole Food Co. (DOLE:US) applied to register “ethical choice” as a trademark in New Zealand, Television New Zealand reported.

The mark is intended to be used with an ad campaign, “Supporting Dole’s ethics initiatives,” according to Television New Zealand.

Barry Coats of the Oxfam charity told Television New Zealand that if the term is registered, the producer of fresh fruit and vegetables could escape scrutiny about whether its practices were more ethical than its competitors.

In June, Dole removed “Ethical Choice” advertising from New Zealand, following a complaint from that country’s Commerce Commission that consumers were likely to believe mistakenly that Dole’s business practices were vetted by a third party, according to Television New Zealand.

For more trademark news, click here.

Copyright

Fiesta Fashion Didn’t Infringe Jovani Prom Dresses, Court Rules

Jovani Fashion Ltd., a New York-based maker of pageant and prom dresses, lost its copyright-infringement case against a competitor it claimed was making knockoff prom dresses.

The suit began in September 2010 when Jovani sued a number of dress manufacturers, claiming copies of more than 30 dresses it made and sold in its catalogs were being manufactured and sold. The knockoffs were being made in China, Jovani said in court papers.

In its Oct. 15 ruling, the U.S. Court of Appeals in New York affirmed a lower-court ruling dismissing the case against Fiesta Fashion Inc. of Los Angeles. Jovani argued that its frocks were entitled to copyright protection because they were comprised of a combination of features “that can be identified separately from and are capable of existing independently of, the utilitarian aspects of the article,” according to court papers.

Jovani argued that its arrangement of embellishment on the dress bodices, the layers of tulle fabric in the skirts and the treatment of fabric at the dress waistlines were elements that were copyrightable.

The appeals court said this wasn’t the case because none of these design elements could be removed from the dresses and sold separately. It agreed with a lower-court finding that removing any of these elements from the dresses would “certainly adversely affect the garment’s ability to function as a prom dress, a garment specifically meant to cover the body in an attractive way for a special occasion.”

All of the elements Jovani claims were separable and therefore protectable merged with functional elements that decide how to cover the body, the court said. The aesthetic and functional in the prom dresses at issue were inseparable, according to the appeals court’s opinion.

The appeals court case is Jovani Fashion Ltd. v. Fiesta Fashions, 12-598-CV, U.S. Circuit Court of Appeals for the Second Circuit (New York). The lower court case is Jovani Fashion Ltd. V. Cinderella Divine Inc., 1:10-cv-07085-JFK-FM, 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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