Bloomberg News

Fox-Hopper, Electronic Arts, Monsanto: Intellectual Property (2)

July 25, 2013

Fox Broadcasting Co. lost a second bid to halt Dish Network Corp. (DISH:US)’s AutoHop ad-skipping feature, as a California federal appeals court refused to overturn a lower-court ruling that allowed the service to continue.

U.S. District Judge Dolly Gee in Los Angeles rejected Fox’s motion last year for a preliminary injunction against Dish and Fox appealed. Fox argued that its contract with Dish, a pay-TV provider, doesn’t allow services that skip commercials. Fox also claimed that its copyrights for TV programming are infringed by the feature.

“The district court did not abuse its discretion in holding that the broadcaster failed to demonstrate a likelihood of success on its copyright infringement and breach of contract claims,” the appeals court said in its opinion yesterday.

Fox Broadcasting, Comcast Corp. (CMCSA:US)’s NBC and CBS Corp. (CBS:US) sued Dish last year in California, claiming that the ad-skipping feature would diminish their revenue from advertising. Dish sued the broadcast networks in New York seeking a declaration that its ad-skipping service doesn’t infringe copyrights.

“We are disappointed in the court’s ruling, even though the bar to secure a preliminary injunction is very high,” Scott Grogin, a spokesman for Fox, said in an e-mail. “This is not about consumer choice or advances in technology. It is about a company devising an unlicensed, unauthorized service that clearly infringes our copyrights and violates our contract.”

The decision “is a victory for American consumers, and we are proud to have stood by their side in this important fight over the fundamental rights of consumer choice and control,” Stanton Dodge, Dish’s general counsel, said in a statement.

Fox Broadcasting is a unit of Twenty-First Century Fox Inc. (FOXA:US)

The appeal is Fox Broadcasting v. Dish Network, 12-57048, U.S. Court of Appeals for the Ninth Circuit (Pasadena). The lower-court case is Fox Broadcasting v. Dish Network, 12-cv-04529, U.S. District Court, Central District of California (Los Angeles).

Electronic Arts Must Pay $11 Million After ‘Madden NFL’ Verdict

Electronic Arts Inc. (EA:US) must pay more than $11 million to a former programmer who wrote code for the earliest versions of the company’s “Madden NFL” video game, according to the plaintiff’s lawyer.

A federal court jury in San Francisco on July 23 found that the company broke a 1986 contract by failing to pay Robin Antonick royalties on works derived from his code, Rob Carey, a lawyer for Antonick, said in an e-mailed statement.

Carey said the verdict is a “good omen” for another phase of the litigation to determine whether EA must pay Antonick for games published from 1997 to now, and for which revenue exceeds $3 billion. The verdict, not the damages, was confirmed by a court filing.

A jury found June 21 that Antonick proved he didn’t know before 2005 that EA allegedly used his work on later Madden games. That allowed the trial to proceed to a second phase over breach of contract and damage claims (EA:US).

EA has sold more than 85 million copies of the software, resulting in revenue of more than $4 billion. The company, the second-largest video-game publisher, has denied using Antonick’s code and has said other company programmers developed later Madden NFL games independent of Antonick’s work.

“While we’re disappointed with the jury’s verdict and will appeal, this has always been a case about games from the early 1990s, and it has no impact on today’s Madden NFL franchise,” John Reseburg, a spokesman for Redwood City, California-based EA, said in an e-mail.

The case is Antonick v. Electronic Arts Inc., 11-cv-01543, U.S. District Court, Northern District of California (San Francisco).

For more copyright news, click here.

Patent

Monsanto Offers Soybean Discount to End Brazilian Patent Dispute

Monsanto Co. (MON:US), the world’s largest seed company, is offering Brazilian farmers a 16 percent discount on its newest genetically modified soybeans if they drop claims that patents on older beans expired years ago.

Monsanto’s insect-fighting Intacta soy went on sale yesterday in Brazil, the St. Louis-based company said in a statement. Farmers who agree to release Monsanto from patent claims will pay a reduced amount for the next four years, it said.

Grower groups have argued that the patent on Monsanto’s older Roundup Ready soybean seeds expired in 2010 and the company should repay royalties collected since then. Monsanto says Brazilian law extends the patent to late 2014.

The Mato Grosso State Growers Federation, which represents farmers in the Brazilian state, said yesterday in an e-mailed statement they agreed to drop their patent claims.

Introduced in the 1990s, Roundup technology lets crops survive applications of Roundup herbicide. Monsanto has excluded Brazilian royalties on Roundup Ready soybeans from its 2013 earnings forecast because of the dispute.

For more, click here.

For more patent news, click here.

Trademark

Use of Competitor’s Mark in Google Doesn’t Create Confusion

The use of a competitor’s service mark as a trigger for Google’s AdWords program won’t by itself cause trademark infringement, the U.S. Court of Appeals for the Tenth Circuit ruled last week.

In a case involving contact lens retailers Lens.com and 1-800 Contacts, the Tenth Circuit in large part affirmed an award in favor of Lens.com, whose affiliates purchased the service mark of 1-800 Contacts as a Google ad trigger.

“Traditional analysis and actual marketplace data reveal that the keyword use by Lens.com and its affiliates was highly unlikely to divert consumers,” the court held in its July 16 opinion.

The court affirmed the denial of liability under agency law, but held there could be “contributory infringement because the evidence could support a reasonable finding that Lens.com did not take reasonable steps to halt the display of 1-800’s marks in affiliate ads once it learned of such display.”

Google Inc. (GOOG:US), which operates the popular Internet search engine, permits advertisers to pay to have their advertisements triggered by certain keywords.

1-800 Contacts was represented by Mark A. Miller of Holland & Hart LLP, Salt Lake City. Lens.com was represented by Scott R. Ryther of Phillips Ryther & Winchester, Salt Lake City.

The case is 1-800 Contacts Inc. v. Lens.com Inc., 11-4114, U.S. Court of Appeals for the Tenth Circuit (Denver)

For more trademark news, click here.

In the News

California Seeks to Enforce Bridgepoint Subpoena on Sales Info

The state of California asked a court yesterday to compel Bridgepoint Education Inc. (BPI:US), the college company majority-owned by Warburg Pincus LLC, to produce information about its sales efforts.

Bridgepoint, based in San Diego, has refused to produce data from a computer system that collects information about its telemarketing, state Attorney General Kamala Harris’s office said yesterday in a petition filed in state court in Sacramento.

Harris subpoenaed the information in January, according to a court filing.

“This information is critical to evaluating whether Bridgepoint has violated California law by making false or misleading statements during telephone calls, including telemarketing calls and in other marketing and sales communications,” Deputy Attorney General Angela Munoz said in the petition, a copy of which was supplied by her office.

For-profit colleges have faced scrutiny by Congress and state and federal prosecutors who allege that the schools use high-pressure sales tactics to mislead applicants about costs and job-placement, leaving them with loans they can’t repay.

Bridgepoint digitally records its telemarketing calls and has stored more than 400,000 recordings of calls to Californians, Munoz said in the petition. Company lawyers argued it would be unduly burdensome to comply with the subpoena for those records because students would have to notified, she said.

The company “has been cooperating with the California Attorney General’s Office regarding the investigation,” Marianne Perez, a Bridgepoint spokeswoman, said in an e-mail. “However, during this process, there have been requests by the California Attorney General’s Office that are overly broad and unduly burdensome, and Bridgepoint’s legal team is in communication with the Attorney General’s Office to narrow the request as best as possible while meeting our obligations to federal regulations.”

The case is People of the State of California v. Bridgepoint Education Inc., 34-2012-00147260, California Superior Court, Sacramento County (Sacramento).

Time Warner Cable Threatening to Drop CBS From Channel 2 Spot

Time Warner Cable (TWC:US) Inc. is threatening to drop CBS from its position as the first broadcast station on its TV menu if the entertainment company demands higher licensing fees to carry its programming.

The second-largest U.S. cable provider is talking to several competitors about taking CBS’s place, Maureen Huff, a Time Warner Cable spokeswoman, said in an interview. CBS, the highest-rated broadcast network, said it won’t give up the real estate. The slot is one of the first viewers see when they turn on a cable box and search the menu.

“CBS obviously won’t make any deals that require us to change our channel position,” Dana McClintock, a spokesman for CBS in New York, said in a phone interview.

The threat by New York-based Time Warner Cable is an attempt to put pressure on CBS to lower the amount of money it wants for giving access to its owned-and-operated affiliate networks in New York, Los Angeles and Dallas. Time Warner Cable claims New York-based CBS asked for prices 600 percent higher than the network’s affiliates in other markets receive for the same programming.

Penguin Settlement in E-Books Antitrust Probe Approved by EU

Bertelsmann SE’s Penguin Random House settled a European Union antitrust case into e-books after regulators accepted its offer to overhaul its pricing system.

Apple Inc. (AAPL:US), the world’s biggest technology company, and four publishers previously offered similar remedies to allay European concerns.

“After our decision of December 2012, the commitments are now legally binding on Apple and all five publishers including Penguin, restoring a competitive environment in the market for e-books,” Joaquin Almunia, the EU’s competition chief, said in an e-mailed statement today.

Facing EU pressure, Apple last year promised to terminate so-called agency agreements with the four companies, CBS Corp.’s Simon & Schuster, News Corp.’s HarperCollins, Verlagsgruppe Georg von Holtzbrinck GmbH’s Macmillan unit and Lagardere SCA (MMB)’s Hachette Livre, and Pearson Plc. (PSON)

Penguin offered earlier this year to stop restricting or impeding e-book retailers from offering discounts or to allow them to “set, alter or reduce retail prices for e-books” for two years.

Bertelsmann’s Random House publishing unit agreed in October to merge with Pearson’s Penguin to create the largest book publisher in the U.K. and the U.S.

If a company breaks EU settlement commitments, the commission can impose a fine of as much as 10 percent of its annual global sales.

On July 10, a federal judge in New York ruled that Apple “played a central role” in conspiring with five publishers to fix the prices of electronic books. Apple now faces a trial in the U.S. to set damages.

Books Taken by Suicide Librarian Return to Sweden From U.S.

Two precious books stolen by an employee from Sweden’s Royal Library were returned yesterday at a ceremony in New York after the antique book seller in Baltimore who purchased them agreed to hand them over to the FBI.

The chief of the Royal Library’s Manuscript Department, Anders Burius, stole at least 56 rare or one-of-a-kind volumes in his 10 years of employment, the U.S. Attorney for the Southern District of New York said in a statement.

The two books recovered were a 1683 description of Louisiana in French written by Louis Hennepin, including maps and produced on the orders of the king; and a 19th-century illustrated volume about the Mississippi valley in German. Their combined value is about $255,000, according to Herrick, Feinstein LLP in New York, a law firm acting for the library.

The books “offered the world some of the first glimpses of the extraordinary American landscape and people,” Manhattan U.S. Attorney Preet Bharara said in yesterday’s statement. “We hope this recovery will prompt others to return antique books in their possession that were stolen from the Library.”

Loewentheil cooperated fully with the U.S. authorities once he discovered the volumes were stolen, the office said.

For more, click here.

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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