Bloomberg News

Alice, Butamax, Redskins, Righthaven: Intellectual Property (1)

May 13, 2013

The nation’s top patent court issued a deeply divided opinion May 10 on how to determine if software is eligible for legal protection, reflecting the broader debate that has split the computer industry.

The U.S. Court of Appeals for the Federal Circuit in Washington, which handles all patent appeals, issued a 135-page decision by 10 circuit judges that included five viewpoints and “additional reflections” from Chief Judge Randall Rader.

“We have propounded at least three incompatible standards, devoid of consensus, serving simply to add to the unreliability and cost of the system of patents as an incentive for innovation,” Circuit Judge Pauline Newman wrote.

Google Inc. (GOOG:US), Facebook Inc. and JPMorgan Chase & Co. (JPM:US) are among the companies that argued that patent standards for software are too lax. A group whose members include software makers Microsoft Corp. (MSFT:US) and Oracle Corp. (ORCL:US) warned the appeals court that limiting protection for software could hurt the nation’s economy.

The case centered on patents owned by Melbourne-based Alice Corp. over ways to minimize risk in certain computerized-trading platforms. The court ruled CLS Bank International won’t have to face patent-infringement claims by Alice, which is owned by National Australia Bank Ltd. (NAB) and Alice Ventures Pty.

A majority of the 10 judges said aspects of Alice’s patents covering a method of performing the idea weren’t eligible for protection, while the court was evenly split regarding systems to implement that idea. Five of the judges said they would send all or part of the case back to the trial judge for further review.

The U.S. Supreme Court also has struggled to determine what types of innovations qualify for patent protection. In 2010, the court issued a 5-4 decision on patents for methods of conducting business, and last year limited patents for diagnostic medical tests. With such a fractured ruling on software, the issue probably is headed to the high court again.

Although the court issued the full ruling as a precedential opinion, Rader said the decisions were so split that “nothing said today beyond our judgment has the weight of precedent.”

The case is CLS Bank v. Alice Corporation, 11-01301, U.S. Court of Appeals for the Federal Circuit (Washington). The lower-court case is CLS Bank International v. Alice Corp., 07-cv-00974, U.S. District Court, District of Columbia (Washington).

Butamax Grapples With Gevo Over Biofuels Patent Case Claims

Butamax Advanced Biofuels LLC said a federal judge dismissed a patent-infringement case filed against it by rival Gevo Inc. (GEVO:US), while Gevo said May 10 the dismissal is temporary and other cases continue.

Butamax, a joint venture of DuPont Co. (DD:US) and BP Plc (BP/) based in Wilmington, Delaware, denies using the patented technology, Chief Executive Officer Paul Beckwith said in a May 10 statement.

Gevo “has agreed to temporarily dismiss its lawsuit” because Butamax at the present time doesn’t have a chemical plant in which to infringe, according to a statement from Gevo Executive Vice President Brett Lund.

Gevo, based in Englewood, Colorado, is a joint venture to make specialty chemicals with the oil refiner Total SA (FP) and Lanxess AG. (LXS)

Claims in the patent suit were dismissed and Gevo can’t refile the complaint against Butamax “until a final certificate of reexamination is issued” by the U.S. Patent and Trademark Office, wrote U.S. District Judge Sue L. Robinson in an order May 6 in Wilmington.

At least 13 patent cases have been filed by Butamax and Gevo against each other since 2011, according to court electronic records.

The case is Gevo v. Butamax, 12-cv-00070, U.S. District Court, District of Delaware (Wilmington).

For more patent news, click here.

Trademark

NIH Marks Barred From OMICS Open-Source Journals, U.S. Says

The U.S. Department of Health and Human Services sent a cease-and-desist letter to a Los Angeles publisher of open-access journals related to the use of trademarks belonging to the National Institutes of Health.

In the letter written by Senior Attorney Dean Landis, OMICS online is warned that it isn’t authorized to use the names of the NIH, its institutes, or PubMed Central, which is the NIH’s archive of papers.

A link to the letter was posted on Science Magazine’s Science Insider website. Science Magazine is published by the American Association for the Advancement of Science.

Science Insider also published a response from Srinubabu Gedela, the director of the OMICS Publishing Group, in which he says that his legal team is “solving the problem” with HHS, and has initiated legal proceedings for defamation against those who have characterized his organization as a “predatory publisher.”

Alabama Clothing Vendors Battle Over Houndstooth Trademark

Although legendary University of Alabama football coach Paul “Bear” Bryant has been dead for 30 years, the houndstooth fabric pattern on the fedora hat he wore on the sidelines remains strongly associated with Alabama football and the subject of a trademark dispute.

The holders of a trademark for a houndstooth elephant image, who sell related merchandise at Alabama football games, sued a Tuscaloosa, Alabama-based clothing store for trademark infringement.

According to the complaint filed May 7 in Alabama federal court, Richard Diaz of Enterprise, Alabama, and his Gamedawg LLC object to merchandise sold at Glen Plaid LLC’s Original Houndstooth store in Tuscaloosa. The mark used at Original Houndstooth is “confusingly similar” to its own, Gamedawg claims.

Glen Plaid’s use of a houndstooth elephant on its page on Facebook Inc. (FB:US)’s social-media site and its use of “@OHoundstooth” with Twitter Inc.’s short-messaging service are also infringing, Gamedawg says in its pleadings. The company claims that consumers are confused and that Glen Plaid has continued its use of the allegedly infringing mark despite having been sent a cease-and-desist letter in November 2011.

Gamedawg asked the court to bar further infringement of its marks, and for awards of money damages and profits Glen Plaid derived from its infringing actions. Gamedawg also asked for damages to be tripled and for awards of litigation costs and attorney fees.

Glen Plaid didn’t respond immediately to an e-mailed request for comment.

The case is Richard Diaz v. Glen Plaid LLC, 7:13-cv-00853-TMP, U.S. District Court, Northern District of Alabama (Birmingham).

Redskins Owner Says He Will Never Change the Name of His Team

Regardless of the outcome of proceedings at the U.S. Patent and Trademark Office, the owner of the Washington Redskins National Football League team told USA Today that he will never change the team’s name.

Daniel Snyder told the newspaper that his team’s fans understand the tradition and what the name means.

Meanwhile, a measure was introduced in the U.S. Congress that would amend the Trademark Act of 1946 to bar registration of terms that disparage Native American people. That bill --H.R. 1278 -- which has been referred to the House Committee on the Judiciary, specifically lists “redskin” as a term that is offensive.

According to the patent office database, requests for the cancellation of the Redskins marks are pending.

For more trademark news, click here.

Copyright

Righthaven’s Lack of Standing to Sue Confirmed by Appeals Court

Righthaven, the organization attempting to enforce the copyrights of Las Vegas-based Stephens Media Group, received no support for its position from a federal appeals court.

Ruling in two cases Las Vegas’s Righthaven brought against two men who posted articles from Stephens’ Las Vegas Review-Journal on their websites without authorization, the Ninth U.S. Circuit Court of Appeals said Righthaven had no standing to pursue the cases.

The court noted that the agreement that purported to assign the copyrights to Righthaven contained restrictions on how Righthaven could use those rights. A later agreement between Righthaven and Stephens after the cases had been filed didn’t cure the problem, the court said, noting that “in general, jurisdiction is based on facts that exist at the time of filing.”

Under either the original or the amended agreement between Righthaven and Stephens, Righthaven lacked standing to sue for infringement, the appeals court ruled, saying the lower court properly granted motions to dismiss the case.

The appeals court then rejected lower court rulings with respect to copyright law’s “fair use” provisions. The court agreed with Righthaven and two content-owners’ trade organizations that filed friend of the court briefs, the Association of American Publishers and the Recording Industry Association of America.

All had argued that if Righthaven lacked standing to pursue the infringement actions, than the court had no power to address the issue of fair use. The appeals court agreed, saying it was “not appropriate” for it to address the issue or for the lower court’s finding of fair use to stand.

Previously a federal court in Nevada had awarded Righthaven’s assets to one of the defendants in the two infringement cases. That court found at Wayne Hoehn hadn’t infringed the copyrights, and awarded him attorney fees.

In the wake of Righthaven’s non-payment, Hoehn was given the firm’s assets, and a receiver was set up to enforce the payment. That case was Righthaven LLC v. Hoehn, 11-cv-00050, U.S. District Court, District of Nevada (Las Vegas).

The appeals court cases are Righthaven LLC v. Wayne Hoehn, 11-16751, and Righthaven LLC v. Thomas A DiPiase, 11-16776, U.S. Court of Appeals for the Ninth Circuit (San Francisco).

For more copyright news, click here.

Trade Secrets/Industrial Espionage

Spain Refuses to Extradite Ex-HSBC Employee for Data Access

Spain’s high court has barred the extradition of a former HSBC Holdings employee to Switzerland, where he is accused of stealing data from accounts that European authorities are investigating over possible tax evasion, the International Business Times reported.

The court determined that the actions of Herve Falciani, who has billed himself as a whistle-blower against Swiss bank practices, weren’t a crime under Spanish law, according to the Times.

Data provided by Falciani has been used by tax authorities in France, Italy, Spain and Germany to collect 250 million Euros and to look for other lost taxes, the newspaper reported.

Swiss authorities have accused Falciani of trade secret violations, and violating bank secrecy, in addition to unauthorized access to data, according to the Times.

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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