Bloomberg News

Apple-Samsung, NCAA, IP Enforcement: Intellectual Property (1)

June 24, 2013

Apple Inc. won a patent lawsuit in Japan on June 21, when a Tokyo judge ruled that Samsung Electronics Co. (005930) smartphones and a tablet computer infringed on its visual effects for touch panels.

Tokyo District Court Judge Shigeru Osuga hasn’t ruled on the amount of damage compensation and didn’t give a timeframe for providing one, according to a statement from the court.

Samsung and Apple, the world’s two biggest smartphone makers, have each scored victories in patent disputes fought over four continents since the maker of the iPhone accused Asia’s biggest electronics maker of “slavishly copying” its devices. The companies are competing for dominance of a global mobile-device market estimated by researcher Yankee Group at $346 billion in 2012.

A Samsung spokesman, Nam Ki-yung, said the company would review the ruling and then decide whether it will appeal. Takashi Takebayashi, a Tokyo-based spokesman for Apple, didn’t immediately return a call seeking comment on the ruling.

Samsung infringed Apple’s patent on the way an iPad or iPhone screen seems to bounce when a user scrolls to the end of a file, the Cupertino, California-based company said in the lawsuit.

In August, Tokyo District Judge Tamotsu Shoji ruled against Apple in a lawsuit that claimed Samsung smartphones and tablet computers infringe on an invention for synchronizing music and video data with servers.

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Chivas Regal Resists Offer Francis Ford Coppola Couldn’t Refuse

For the winery started by the director of “The Godfather,” it was a matter of paying for protection.

Sued for patent infringement in 2012 over the laminated boxes used for its bottles of Sofia Mini Blanc de Blancs, Francis Ford Coppola’s vintner decided quickly to settle rather than rack up legal bills.

Other companies refused to pay royalties to Lamina Packaging Innovations LLC, a patent-licensing entity, and now face a possible ban on U.S. imports of their products. These include Hasbro Inc. (HAS:US)’s Bop It XT toy, Pernod Ricard SA’s Chivas Regal Scotch whisky and Remy Cointreau SA (RCO)’s Remy Martin cognac.

The case at the U.S. International Trade Commission in Washington has become central to a broader debate over whether to limit complaints by companies whose sole business is to obtain patents and seek royalties on them.

“The ITC was not designed to protect the theoretical patent rights of people who were not developing products in commerce or moving society or civilization forward,” said lawyer Claude Stern, who represented Francis Ford Coppola Presents LLC in the settlement.

Congress, the U.S. Federal Trade Commission, and President Barack Obama have proposed to curb litigation by companies known as non-practicing entities or by the pejorative “trolls.” One proposal would restrict cases such companies could pursue at the agency, which defends U.S. markets from unfair competition.

After Lamina filed claims against 15 companies in February, the ITC ordered an expedited hearing on whether Lamina met its requirement that patent owners who file complaints prove the existence of a domestic industry. Lamina, instead of citing a manufacturing plant or products, argues its settlements are that proof.

Lamina, which told the ITC it has two employees and five consultants, shares a Longview, Texas, office building with a church, radio station, debt-collection agency and landscaping company.

It was created in 2010 by Medici Portfolio Acquisition LLC, a licensing company based in a Washington suburb that acquired the patents of a Wisconsin businessman who, according to Lamina’s ITC complaint, was “unable to make significant progress in commercialization” because of rampant copying of his ideas.

Michael Connelly, Medici’s chief executive officer, had no immediate comment for this story. Lamina’s lawyer, Gregory Love of Stevens Love in Longview, didn’t return a message seeking comment.

In May, ITC Judge Theodore Essex heard testimony from both sides on whether Lamina meets the standard for a domestic market. His findings are due July 5. A ruling against Lamina could end the case. Otherwise, a trial on the patents will be held in December.

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Copyright

NCAA Lawyer Claims Student Athletes Can’t Sue Over Broadcasts

The rights of student athletes aren’t infringed by game broadcasts, lawyers for the National Collegiate Athletic Association told a judge last week. The arguments were made at a hearing over whether a class comprised of student athletes could be certified.

The NCAA doesn’t make student athletes give up the rights to their names, likenesses or images and, just like cheerleaders or mascots at broadcast sporting events, the student players have consented to be filmed and can’t sell their images, said Greg Curtner, an attorney for the association at the June 20 hearing.

“If you go out in public you are fair game to be put on TV, you are consenting to be broadcast,” Curtner said at a hearing June 20 in federal court in Oakland, California. “There is no right of publicity for appearing in a live unscripted event.”

U.S. District Judge Claudia Wilken is presiding over a four-year-old lawsuit by ex-student basketball and football players against the NCAA and video-game maker Electronic Arts Inc. (EA:US) The judge is considering whether to expand the lawsuit into a class action, or group case, allowing current and former NCAA basketball and football players to seek damages from the NCAA, its licensing arm and Redwood City, California-based Electronic Arts.

The athletes allege a conspiracy to prevent them from being paid for the use of their images in broadcasts and games.

“There is no question that absent any pro-competitive justification, the restraints imposed by these bylaws and policies that foreclose athletes from participating in the marketplace” are a violation of antitrust laws, said Michael Hausfeld, an attorney for the plaintiffs.

“Do professionals not convey their rights?” Hausfeld said. The NCAA’s position is that student athletes “retain their rights but they can’t exercise them.”

The case is Keller v. Electronic Arts Inc., 09-cv-01967, U.S. District Court, Northern District of California (Oakland).

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Enforcement Efforts

IP Enforcer Issues Strategic Plan for Piracy, Trade Secrets

The U.S. Intellectual Property Enforcement Coordinator for the Obama administration, Victoria A. Espinel, last week published a blueprint for the government’s continuing efforts to combat infringement and piracy.

The “Joint Strategic Plan for Intellectual Property Enforcement,” introduced June 20, suggests focusing on online piracy, trade secrets and economic espionage.

“We need to be thoughtful and forceful,” Espinel, said at a press conference announcing the release of the 88-page document.

The plan lists a number of concerns, including abusive patent litigation tactics, particularly by so-called patent trolls. Another concern is the tactic of foreign governments that “condition market access or the ability to do business on the transfer of trade secrets or proprietary information.”

The plan also cited “new challenges and opportunities” present in new technologies, especially mobile computing and 3D printing. Mobile apps may be counterfeited and other apps “will be used to distribute infringing digital goods,” according to the plan.

The administration’s efforts are still in formation. In a blog post Espinel wrote that the government is seeking public contributions in two areas.

“First, we want to make sure that enforcement of patents at the border is as efficient and transparent possible so we are seeking views on how to improve that process,” she wrote. “Also, we want to know if the voluntary initiatives we have encouraged to reduce online infringement are working well and having a positive impact.”

Apple Awaits E-Book Decision With State, Private Suits in Wings

Apple Inc. (AAPL:US) will find out sometime in the coming weeks whether it’s legally responsible for an alleged scheme to fix prices for electronic books, after an unusual three-week civil antitrust trial in Manhattan.

U.S. District Judge Denise Cote, who heard the trial without a jury, will rule on U.S. claims that Apple, the world’s biggest technology company, led a conspiracy of five publishers to raise the retail price of e-books and to force Amazon.com Inc. (AMZN:US), the No. 1 e-book seller, to change its pricing model.

At stake for Cupertino, California-based Apple is a possible court finding that, as the government claims, it broke the law and forced its customers to pay more for e-books than they would in a free market. States and consumers could use the judge’s findings to bolster their own cases against the company.

The U.S. sued Apple and the five publishers in April 2012. The government claims Apple pushed publishers to sign agreements letting it sell digital copies of their books under what’s known as the agency model. Under that model, publishers, and not retailers, set prices for each book, with Apple getting 30 percent.

Orin Snyder, Apple’s lawyer, told Cote in his closing argument that a ruling for the Justice Department would be “unprecedented and dangerous” for companies. Apple didn’t conspire with any publishers to fix prices and its entry into the e-book market lowered prices overall and helped consumers by bringing innovation and competition, he said.

The case is U.S. v. Apple Inc., 12-cv-02826, U.S. District Court, Southern District of New York (Manhattan).

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Google Seeks ‘Sensible Solution’ in EU Antitrust Probe of Search

Google Inc. (GOOG:US) said it looks forward to “reaching a sensible solution” to the European Union’s antitrust probe into the way the company operates its search engine.

“We know that scrutiny comes along with success, and we have worked hard to answer their questions thoroughly and thoughtfully,” Kent Walker, Google’s senior vice president and general counsel, said in a blog posting today.

The European Commission, the EU’s antitrust regulator, has said Google is dominant in Web search and search advertising in Europe and that the Mountain View, California-based company may harm competition. EU Competition Commissioner Joaquin Almunia has sought a deal with Google to end the antitrust case, while competitors have urged regulators to force Google to change its practices.

Almunia said last month that he would almost certainly seek improvements to Google’s initial settlement offer and also extended until this week a market-test period for consumers and rivals to comment.

“We don’t want to hamper the very innovations that people like best about Google’s services,” Walker said in today’s blog posting. “That’s why we focused on addressing the commission’s specific concerns, and we think we did a pretty good job.”

Courts

Gawker’s Unpaid Interns Sue After Fox Searchlight Wage Ruling

Gawker Media LLC was sued by unpaid interns who allege the online publisher violated minimum-wage law, days after a federal judge ruled in a similar case that interns at Fox Searchlight Pictures Inc. should have been paid.

In the Gawker case, filed June 20 in Manhattan federal court, three former interns said they each spent at least 15 hours a week working on blogs affiliated with the New York media company and were “not paid a single cent.”

“Gawker employs numerous other ‘interns’ in the same way, paying them nothing or underpaying them and utilizing their services to publish its content on the Internet, an enterprise that generates significant amounts of revenue for Gawker,” the plaintiffs said in the complaint, which was filed on behalf of all of the company’s unpaid interns.

The lawsuit, which also names company founder Nick Denton as a defendant, seeks unpaid wages and overtime. Representatives for Gawker didn’t respond to a request for comment.

U.S. District Judge William H. Pauley in Manhattan this month ruled in the Fox Searchlight case that unpaid internships must adhere to U.S. Labor Department criteria to be exempt from minimum wage requirements.

Under those factors, which are based on a 1947 U.S. Supreme Court ruling, the position must be structured for the intern’s benefit and shouldn’t displace regular workers. The employer also shouldn’t derive immediate advantages from the intern’s activities.

The case is Mark v. Gawker Media LLC, 13-cv-04347, U.S. District Court, Southern District of New York (Manhattan). The Fox case is Glatt v. Fox Searchlight Pictures Inc., 1:11-cv-06784, U.S. District Court, Southern District of New York (Manhattan).

To contact the reporter on this story: Ellen Rosen in New York at erosen14@bloomberg.net

To contact the editor responsible for this story: Michael Hytha at mhytha@bloomberg.net


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