Bloomberg News

Microsoft, Porsche, Heineken: Intellectual Property

December 11, 2012

(Corrects Pirate Bay copyright item to delete reference to court order.)

Microsoft Corp., the world’s biggest software maker, asked a U.K. judge to invalidate Motorola Mobility’s European patent protection for synchronizing message statuses across multiple devices.

Microsoft sued Google Inc.’s Motorola Mobility last December in a preemptive challenge to a 2002 patent it claims shouldn’t have been issued because the technology was obvious to experts in the field at the time, Microsoft’s lawyers said at a weeklong trial scheduled to end yesterday in London.

“We’re grateful for the chance to demonstrate that Motorola’s claims based on this patent are unfounded,” David Howard, a deputy general counsel at Microsoft, said in an e-mail statement about the latest salvo in a global dispute.

The companies are locked in legal battles over patents for smartphone technology and Xbox gaming software in the U.S. and Germany. Microsoft claims all devices that run on Google’s Android operating system use its technology and is seeking royalties from Motorola Mobility. Motorola Mobility, which Mountain View, California-based Google acquired in May, says it is owed royalties on the Xbox for use of the company’s Wi-Fi and video-compression technology.

Motorola’s lawyer, Zoe Butler of Powell Gilbert in London, declined to comment. The company’s press office didn’t immediately respond to a phone message.

While the patent in the U.K. trial relates to pager technology from the 1990s, the arguments center on its application to newer mobile devices and computers.

The case is running parallel to Motorola’s lawsuit against Microsoft over the same patent in Germany, where the companies are awaiting a decision from a judge. Google has said it bought Motorola Mobility in part because of its patents and history of innovation in mobile phones.

The case is Microsoft Corporation v. Motorola Mobility Inc., HC11C04536, High Court of London, Chancery Division (London).

Apple-Google Team Up for $500 Million-Plus Kodak Patents Bid

Apple Inc. (AAPL:US) and Google Inc. have joined forces to offer more than $500 million to buy Eastman Kodak Co. (EKDKQ:US)’s patents out of bankruptcy, said people familiar with the situation.

The two companies, competing for dominance of the smartphone market, have partnered after leading two separate groups this summer to buy some of Kodak’s 1,100 imaging patents, said the people, who asked not to be identified because the process is private.

Unlikely partnerships are typical in patent sales because they allow competitors to neutralize potential infringement litigation. A group including Apple, Microsoft Corp. (MSFT:US) and Research in Motion Ltd. bought Nortel Networks Corp.’s more than 6,000 patents for $4.5 billion out of bankruptcy last year. Google lost the auction for those patents after making an initial offer of $900 million.

The Apple-led group pursuing Kodak’s patents included Microsoft and Intellectual Ventures Management LLC as of July, the people said, while Google’s partners included patent- aggregation company RPX Corp. and Asian makers of Google’s Android phones. The two groups had separately offered less than $500 million for Kodak’s portfolio. They now teamed up to offer more together, said two of the people.

Niki Fenwick, a spokeswoman for Mountain View, California- based Google, said the company doesn’t comment on rumor or speculation. Christopher Veronda, a spokesman for Rochester, New York-based Kodak, declined to comment on the patent sale, citing a court-ordered confidentiality agreement. Kristin Huguet, a spokeswoman for Cupertino, California-based Apple, declined to comment.

The patents for sale relate to the capture, manipulation and sharing of digital images. Kodak is selling them to fund a turnaround after seeking Chapter 11 protection in January. At the same time, it’s pursuing a plan to shrink the company and focus less on photography and more on commercial, packaging and functional printing and enterprise services.

In court documents, Kodak has said the patents may be worth $2.21 billion to $2.57 billion, based on an estimate by patent advisory firm 284 Partners LLC. Kodak said it has generated more than $3 billion in revenue by licensing some of the digital- imaging patents to users, including Samsung Electronics Co., LG Electronics Inc., Google Inc. (GOOG:US)’s Motorola Mobility unit and Nokia Oyj.

“The portfolio is actually worth much less because it has been widely licensed,” said Richard Ehrlickman, former vice president of Intellectual Property at International Business Machines Corp. and president of IPofferings, a patent brokerage and consulting company in Boca Raton, Florida.

The 132-year-old photography company listed $5.1 billion in assets and $6.75 billion in debt in its bankruptcy filing. It plans to exit bankruptcy in the first half of 2013.

The case is In re Eastman Kodak Co., 12-10202, U.S. Bankruptcy Court, Southern District of New York (Manhattan).

For more patent news, click here.

Trademark

Matthew Inman Sued by Excelsior Printing Over ‘Oatmeal’ Marks

Matthew Inman, the Seattle-based computer programmer who posts cartoons and humorous commentary on his “The Oatmeal” website, was sued for trademark infringement by a Massachusetts printing company.

His website gets more than 2 million page views a month, and Inman is the author of “5 Very Good Reasons to Punch a Dolphin in the Mouth” and the “How to Tell If Your Cat Is Planning to Kill You” calendar.

Co-defendant with Inman is Papyrus-Recycled Greetings Inc. of Chicago, the publisher of greeting cards based on Inman’s cartoons.

According to court papers, Excelsior Printing Co. of North Adams, Massachusetts, bought Oatmeal Studios Inc. in January 2011. The acquired company had produced greeting cards and other items under the “Oatmeal Studios” for more than 35 years, and Excelsior says it continues in the use of the mark and the greeting card business.

The products are promoted through the oatmealstudios.com website, Excelsior said.

The company objects to the items produced by Papyrus- Recycled that are sold under “The Oatmeal” name. It says customers are likely to assume mistakenly that an affiliation exists between its products and Inman’s “The Oatmeal” merchandise.

Excelsior asked the court to bar further infringement of its trademarks, and for awards of money damages, attorney fees and litigation costs. The printing company also requested that the damages be tripled to punish the defendants for their actions.

Neither Inman nor Papyrus-Recycled responded immediately to an e-mailed request for comment.

The case is Excelsior Printing Co. v. Matthew Inman, 3:12- cv-30200, U.S. District Court, District of Massachusetts (Springfield).

Porsche’s ‘919’ Trademark Application May Hint at New Model

Porsche Automobil Holding SE (PAH3), the Stuttgart, Germany-based maker of luxury cars, has applied to register “919” as a trademark in Germany, the Motorward.com automotive news website reported.

According to the website, while Porsche doesn’t comment on future activities, there is speculation in the automotive world that this mark will be used for a new sports vehicle to compete with Ferrari SpA’s 458 Italia.

Heineken Wins Dismissal of Appeal of Russian Trademark Ruling

Heineken NV (HEIA)’s Heineken Ceska unit has prevailed in a trademark dispute over unauthorized imports of its products into Russia, the Russian Legal Information Agency has reported.

The Netherlands-based brewer persuaded Russia’s Supreme Commercial Court to deny Elitvoda.Ru’s appeal of a ruling awarding Heineken damages for importing Heineken’s Krusivice beers into the country without permission, according to the news agency.

Heineken acknowledged that the goods were legitimate, but had argued that under Russia law, trademark goods can’t be imported without the consent of the trademark owner, according to the news agency.

The Dutch brewery, which has several Russian units, had argued that unauthorized shipments of trademarked goods must be seized by customs, the news agency reported.

For more trademark news, click here.

Copyright

Mattel Returns to Appeals Panel That Threw Out Bratz Verdict

Mattel Inc. (MAT:US) is asking the same appeals court panel that two years ago concluded the Barbie doll would thrive on competition to now reverse a $310 million jury verdict won by Bratz dollmaker MGA Entertainment Inc.

Mattel was scheduled to present its case yesterday in Pasadena, California, before the three-judge U.S Court of Appeals panel that undid Mattel’s earlier trial victory giving the company almost complete ownership of its rival’s Bratz dolls. The panel ruled then that the world’s largest toymaker couldn’t claim a monopoly “over fashion dolls with a bratty look or attitude.”

This time, El Segundo, California-based Mattel no longer argues, after two trials and more than eight years of litigation, that MGA infringes its copyright because the first Bratz sketches were made by a Mattel designer. Mattel now contends the “jaw-dropping” $137.2 million in legal fees it was ordered to pay MGA for having to defend the copyright claim is unjustified.

“Mattel knows of no copyright fee and cost award that was similarly shifted on a claim that had been successful before one jury, had resulted in substantial relief from a federal district judge, and was remanded by a court of appeals before being unsuccessful before a second jury,” the company said in its Feb. 27 appeal.

In 2010, the appeals court panel said that, even if Mattel were to convince a jury that it owned the original Bratz sketches made by its former employee, Carter Bryant, it would only entitle it to ownership of that particular expression of the bratty-doll type, not to the idea itself. That decision overturned a $100 million jury verdict.

A jury in Santa Ana, California, last year rejected Mattel’s claim that MGA stole the idea for Bratz dolls. It also found Mattel liable for stealing MGA’s trade secrets and awarded closely held MGA $88.5 million.

U.S. District Judge David Carter, who reduced that verdict to $85 million, later added $85 million in punitive damages.

Carter also awarded MGA $2.52 million in fees and costs for its trade-secret claim, in addition to $105.6 million in lawyer fees and $31.6 million in costs for Mattel’s copyright claim, which the judge said “imperiled free expression, competition, and the only serious competitor Mattel had faced in the fashion doll market in nearly 50 years.”

MGA, based in Van Nuys, California, said the $310 million verdict is “but a drop in the bucket” compared to the harm Mattel caused MGA through “its litigation strategy of destroying Bratz.”

The case is Mattel Inc. v. MGA Entertainment Inc., 11-56357, U.S. Court of Appeals for the Ninth Circuit (San Francisco).

U.K. Pirate Party Prepares for Copyright Suit From BPI

The U.K. branch of the Pirate Party, the international political group opposed to many copyright restrictions, has refused a request from an organization representing content owners to take down a proxy server leading to the Pirate Bay website which has been implicated in illegal downloading cases, TechWeek Europe reported.

British Phonographic Industry, which represents music copyright holders, had asked the U.K. Pirate Party to take down the site in November at the risk of being sued, according to TechWeek Europe.

The Pirate Party has responded to the request by saying that “Censorship is never the right answer,” and if it has to go to court, it will argue that this kind of blockage does “irreparable harm” to search engines, service providers and others, TechWeek Europe reported.

Alexa, a Web metrics company, reported that the U.K. Pirate Party’s proxy site is the 140th most visited Internet destination in that country, according to TechWeek Europe.

Pirate Party UK “has never been issued a court order to take down our Pirate Bay proxy, much less refused to comply with one,” spokesman Jack Allnutt said in an e-mailed statement.

VimpelCom Sued Over Copyright by Russian Music Publisher

VimpelCom Ltd. (VIP:US), the Netherlands-based telecommunications company, was sued for copyright infringement by a unit of Russia’s Gala Records, the Moscow Times reported.

The suit, filed in Moscow Arbitration Court, relates to what the music publisher says is unauthorized use of one of its songs in a VimpelCom ad campaign last summer, according to the newspaper.

A spokeswoman for VimpelCom told the Moscow Times that the company didn’t post to the Internet the video in which the song was performed, and that it was footage of a singer performing at a company promotional event.

The music publisher is seeking damages of 500,000 rubles ($16,268) in compensation, according to the Moscow Times.

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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