Bloomberg News

Samsung, Winnie the Pooh, NFL, Disney: Intellectual Property

December 24, 2012

Samsung Electronics Co. (005930), the world’s biggest maker of smartphones, was sent an antitrust complaint from the European Union accusing the company of abusing its dominant market position in legal disputes with Apple Inc.

Samsung’s use of court injunctions seeking to block Apple’s products in relation to so-called standard-essential patents violates antitrust rules in the 27-nation bloc, the European Commission said Dec. 21 in an e-mailed statement.

While such injunctions can generally be challenged fairly in court, Samsung may be violating EU rules by seeking them in relation to essential patents when Apple has “shown itself to be willing to negotiate,” the Brussels-based commission said in the statement. EU Competition Commissioner Joaquin Almunia signaled that he would send the complaint by the end of this year.

“We are studying the statement and will firmly defend ourselves against any misconceived allegations,” Samsung, based in Suwon, South Korea, said in an e-mailed statement. “We will continue to fully cooperate with the commission.”

The company is “confident that in due course the commission will conclude that we have acted in compliance with European Union competition laws.”

Samsung failed to deflect the EU complaint when it announced on Dec. 18 it plans to withdraw injunctions in Europe that seek to block sales of Apple products.

Almunia said that such a move wasn’t enough to prevent regulators from sending a so-called statement of objections to the company, a formal charge sheet that may precede antitrust fines of as much as 10 percent of yearly sales.

The EU is probing whether Samsung violated agreements to license key patents to other mobile-phone manufacturers on fair terms.

Under phone industry agreements on standards, companies owning the rights to essential technology must usually license it to competitors on fair, reasonable and non-discriminatory terms, known as FRAND.

When the disputed mobile-phone technology was adopted in Europe as a standard, Samsung “gave a commitment that it would license the patents which it had declared essential to the standard on FRAND terms,” the commission said.

Samsung began seeking injunctions against Apple in courts in EU member countries in 2011, based on alleged infringement of patents for 3G technology, according to the Commission’s statement.

Alan Hely, a spokesman for Apple in London, declined to comment on the EU complaint against Samsung.

Samsung is withdrawing injunction requests against Apple in Germany, U.K., France, Italy and Netherlands involving key patents it holds for wireless communications, citing “the interest of protecting consumer choice.” The company will continue litigation that seeks damages in intellectual property disputes.

Cuban, Persson Donate $500,000 to EFF to ‘Fix’ Patent System

Mark Cuban, the owner of the Dallas Mavericks National Basketball Association team, and Swedish game developer Markus “Notche” Persson have donated $500,000 to a digital rights advocacy group to “fix” what Cuban says is a broken patent system.

The San Francisco-based Electronic Frontier Foundation said in a statement that the donations would provide “a major new boost” to the organization’s patent work.

Cuban’s donation funds the hiring of a new attorney experienced in patent reform and high profile patent litigation and a new title for EFF staff attorney Julie Samuels, “The Mark Cuban Chair to Eliminate Stupid Patents.”

Persson’s donation is aimed at “the systematic problem with software patents,” according to the EFF statement. The organization has already developed its “Defend Innovation” project, which promotes what the group says are seven improvements to the American patent system.

The Defend Innovation projects aims to shorten the term for software patents, allowing winning parties in litigation to recover fees and costs, and protect inventors who independently arrive at a patented idea.

For more patent news, click here.

Trademark

Disney Wins U.S. Appeals Court Ruling Over Pooh Trademark

Walt Disney Co., (DIS:US) the world’s largest entertainment company, won an appeals court ruling that protects its trademark rights to the Winnie-the-Pooh characters.

The U.S. Patent and Trademark Office was correct to throw out challenges to the trademark ownership filed by Stephen Slesinger Inc., which has waged a decades-long battle with Disney over ownership of the Pooh characters, an appeals court in Washington said Dec. 21. Slesinger had already litigated the issue and lost in district court, the U.S. Court of Appeals for the Federal Circuit said in an opinion posted on its website.

A.A. Milne, who wrote the Pooh books, transferred merchandising rights to Stephen Slesinger in 1930, and his widow licensed the rights to Disney in 1961. The Slesinger company and Disney have been fighting in court over royalties since at least 1991.

In 2009, a federal court ruled that Slesinger had transferred all of its rights in the Pooh works to Burbank, California-based Disney. The Federal Circuit on Dec. 21 said that, based on that 2009 ruling, the trademark office was right to bar Slesinger from seeking to cancel the Disney trademarks.

The case is Stephen Slesinger Inc. v. Disney Enterprises Inc., 2011-1593, U.S. Court of Appeals for the Federal Circuit (Washington).

For more trademark news, click here.

Copyright

NFL’s Scouting Report Copyright Not Infringed, Court Rules

The scouting arm of the National Football League lost a copyright case against a Washington State resident who wrote about its annual scouting reports for a sports-oriented website.

National Football Scouting Inc. filed suit in federal court in Tacoma, Washington, in September 2011, objecting to Rob Rang’s use of information from its Scouting Report for stories he wrote that were published on a blog operated by Sports X- change. The league also accused him of trade-secret misappropriation.

The court rejected the copyright claims. While the reports did constitute protectable subject matter, U.S. District Judge Robert B. Leighton said Rang’s work fell into copyright law’s area of permitted fair use. His use of the NFL information was sufficiently transformative, the court found.

The NFL had argued that the information Rang used constituted the “heart” of the reports. The court found it was a small amount of copyright and he used it as a jumping off point to provide original commentary on the players and their draft prospects. His stories weren’t in any meaningful sense a “market replacement” for the NFL reports, the court said.

The NFL’s trade secrets claim wasn’t dismissed. The court said a factual dispute exists over whether or not the NFL made reasonable attempts to protect the secrecy of its scouting- report information.

The case is National Football Scouting Inc. v. Rob Rang, 3:11-cv-05762-RBL, U.S. District Court, Western District of Washington (Tacoma).

Disney Wins EU Approval to Buy ‘Star Wars’ Producer Lucasfilm

Walt Disney Co. won European Union approval to buy George Lucas’s Lucasfilm Ltd. for $4.05 billion in cash and stock, combining two of Hollywood’s most lucrative film franchises.

The European Commission, the EU’s antitrust regulator, said overlaps were “very limited” for the two companies’ activities in home entertainment, gaming software, film production and distribution and licensing for both broadcast rights and merchandise, according to an e-mailed statement.

“The commission therefore concluded that the transaction would not significantly impede effective competition” in Europe, the Brussels-based authority said in the statement.

The deal, announced in October, will add “Star Wars” and “Indiana Jones” to Disney’s roster of film hits including “The Avengers” and “Finding Nemo.” The “Star Wars” films have generated $4.54 billion in worldwide ticket sales, second to Warner Bros.’ “Harry Potter,” according to Box Office Mojo. “Indiana Jones” pictures have collected $1.95 billion.

The acquisition complements Disney Chief Executive Officer Robert Iger’s focus on sequels and film franchises, fitting the same profile as its purchase of Marvel three years ago. Disney paid a combined $11 billion for Pixar and Marvel in the past decade.

Lucas, 68, the sole owner of Lucasfilm, will receive half of the purchase price in cash and the balance in stock, becoming a major investor in the film, theme-park and TV company, according to an Oct. 31 statement from Burbank, California-based Disney. Lucas will receive about 40 million Disney shares, becoming the second-largest non-institutional shareholder with about 2.2 percent of the company, data compiled by Bloomberg show. The largest is the trust of late Apple Inc. (AAPL:US) co-founder Steve Jobs, who sold Pixar to Disney in 2006.

Web Designer Liable for Infringement, Appeals Court Says

A Swedish appeals court has found that the designer of the now-defunct StudentBay website, through which book content was shared without authorization, committed copyright infringement, the TorrentFreak website reported .

The site designer had previously been cleared of infringement by the Sodertorn District Court in April, which found there was no evidence that he had actually operated the site, according to TorrentFreak, an anti-copyright website.

The appeals court said that even though he was only a designer, he must have known that the intent of the site was to infringe book publishers’ copyrights, TorrentFreak reported.

The designer was sentenced to 75 hours of volunteer work, a fine of 42,000 Swedish krona ($6,410) and ordered to surrender the money he made designing the site, according to TorrentFreak. For more copyright news, click here.

IP Moves

Yarbrough Law Group Adds Two Practitioners to IP Practice

The Yarbrough Law Group PC expanded its IP practice group with two new hires, the Dallas-based firm said in a statement.

Victor C. Johnson and Todd W. Shadle are new to the firm.

Johnson, who joins from Boston’s Fish & Richardson PC, does IP-related litigation involving trademarks, copyrights, anti- counterfeiting, brand protection, trade secrets and unfair competition.

He has an undergraduate degree from the University of New Mexico and a law degree from Loyola University New Orleans.

Shadle does trade-secrets and general corporate defense work. He has an undergraduate degree from Emory University and a law degree from Sothern Methodist University.

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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