Bloomberg News

Software Patents, NFL, Tesla, Reddit: Intellectual Property (1)

August 23, 2013

Software patents are the biggest reason for a rise in litigation over inventions, especially against companies that use the technology, the U.S. Government Accountability Office found.

Its study, required under a law passed in 2011 that overhauled the U.S. patent system, said the revisions and court rulings made it easier to invalidate questionable patents and limited damages that can be collected on a minor feature. The report recommended that the U.S. Patent and Trademark Office do more to improve the review process.

The GAO found almost half, or 46 percent, of lawsuits filed from 2007 to 2011 involved software-related patents, and more than one-third of those, or 39 percent, were against companies outside technology fields. Those included retailers and drugmakers who were sued over features on their websites. Companies told the agency that it’s often difficult to determine what the patents cover.

“Although there is some inherent uncertainty associated with all patent claims, several of the stakeholders with this opinion noted that claims in software-related patents are often overly broad, unclear or both,” according to the report.

Companies whose main business is to extract royalty revenue, called patent monetization entities or PMEs, filed about 19 percent of all lawsuits from 2007 to 2011, while operating companies brought 68 percent, the study found.

The number of defendants sued by patent monetization entities more than tripled, to 3,401 in 2011 from 834 in 2007, the study found.

For more patent news, click here.

Trademark

NFL Sued by Former Players Over Use of Their Images by NFL Films

The National Football League was sued by 10 retired players who claim the NFL unfairly violates their rights of publicity by using their images to sell NFL Films products.

Five Hall of Fame players joined the suit filed Aug. 20 in federal court in Camden, New Jersey. The complaint claims that a settlement reached this year in a similar case in Minnesota doesn’t go far enough to compensate former players.

In March, the NFL settled a class-action lawsuit, filed by Fred Dryer and others, and agreed to put $42 million in a fund to help retired players and set up a licensing agency to market their publicity rights. The new case involves players who opted out of that settlement, which has preliminary approval of U.S. District Judge Paul Magnuson in St. Paul, Minnesota.

“NFL Films’ continued use of former players’ images is unauthorized, and not consented to,” according to the complaint. NFL Films uses raw footage of former players taken from a vast archive of games and develops promotional and marketing products, according to the complaint. It films every game, apart from commercial broadcasts, so that it can assemble promotional materials to help the NFL brand, the players said.

An NFL spokesman, Brian McCarthy, said the league is “disappointed that a few retired players believe that additional litigation will be productive in the face of Judge Magnuson’s decision in April finding that the settlement” is “fair and reasonable.”

In an April 5 order, Magnuson criticized players who rejected the settlement, which he said is a “thoughtful, beneficial” resolution to the case.

“It is the height of disingenuousness for these same plaintiffs to now complain, like children denied dessert, that the settlement does not benefit enough the individuals who brought the lawsuit,” he wrote.

The case is Culp v. NFL Productions LLC d/b/a NFL Films, 13-cv-04999, U.S. District Court, District of New Jersey (Camden). The Minnesota case is Dryer v. National Football League, 09-cv-02182, U.S. District Court, District of Minnesota (St. Paul).

Philip Morris Leads Plain-Packs Battle in Global Trade Arena

The war between the tobacco industry and anti-smoking forces is heating up as cigarette makers intensify efforts to use treaties to block labeling constraints.

Philip Morris International Inc. (PM:US) has pressed the U.S. for language that would make it tougher for countries in a proposed Pacific Rim trade accord to require plain packaging or other limits on company logos. Australia’s packaging law is being challenged at the World Trade Organization, and U.S. senators from tobacco-growing states, including Senate Minority Leader Mitch McConnell, recently warned the European Union that the smoking controls it’s considering might endanger a U.S. trade deal.

Cigarette makers defend the efforts as necessary to safeguard the intellectual property protections embedded in treaties. To antismoking forces, the tobacco lobby is working a strategy of intimidation.

“They are in this to convince governments it’s not worth the cost” to enact laws to reduce tobacco’s appeal, said Chris Bostic, deputy director for policy at Action on Smoking and Health, a Washington-based nonprofit organization.

The Trans-Pacific Partnership being negotiated by Australia, the U.S., Japan, Chile and eight other nations will be a test of sovereign states’ freedom to regulate tobacco, said Gary Fooks, a University of Bath research fellow who has written about the industry’s efforts to influence the pact. The next round of talks is scheduled to begin today in Brunei.

Anti-smoking activists were encouraged last year when the Obama administration wrote a draft proposal to strengthen protections for anti-smoking regulations from challenges. It would have created “a safe harbor” for U.S. Food and Drug Administration tobacco rules, according to a government summary of the draft.

The safe harbor proposal died last week after running into opposition from lawmakers, former trade representatives and business groups, including the Grocery Manufacturers Association. They contended it would set a bad precedent that could lead to other products’ being singled out in trade pacts.

Instead, the U.S. will ask for a clause requiring that before a case against a tobacco regulation can be filed under the treaty, health authorities of the countries involved must discuss the measure.

Companies including New York-based Philip Morris International, which sells Marlboro outside the U.S., and British American Tobacco Plc (BATS), whose brands include Dunhill and Lucky Strike, are in a global battle against moves to curtail branding and make cigarettes unappealing.

Tesla Motors Trademark Application May Be for Mass-Market Car

Tesla Motors Inc. (TSLA:US) this month filed an application with the U.S. Patent and Trademark office to use the name Model E for an automobile.

Shanna Hendriks, a Tesla spokeswoman, declined to comment on whether that’s intended for a still-unnamed mass-market electric car.

Chief Executive Officer Elon Musk said the electric-car maker intends to add factories in Europe and Asia, anticipating volume gains from a planned mass-market battery car.

The company this year plans to make at least 21,000 of its $70,000 Model S premium sedans at its Fremont, California, plant, and double that in 2014. While the factory has capacity to produce as many as 500,000 vehicles a year, the addition of a smaller electric car priced about half that of Model S will require additional plants, Musk said.

Tesla, named for inventor Nikola Tesla, has seen its shares surge more than fourfold (TSLA:US) and its market value exceed some established carmakers such as Fiat SpA (F), the majority owner of Chrysler Group LLC. The Palo Alto, California-based company reported its first profitable quarters this year, excluding some items, and has seen demand for the Model S outstrip its ability to build the car.

Among the company’s accolades, Model S was named 2013 “Car of the Year” by Motor Trend magazine; Consumer Reports in a May review rated it among the best it’s ever tested; and this week Tesla said it received top crash and safety ratings in tests by the National Highway Traffic Safety Administration.

‘Gaymer’ Trademark Relinquished, Reddit Players Can Use the Term

A Georgia resident surrendered a trademark he claimed was infringed by a group of gay participants in computer games.

According to a July 22 filing with the U.S. Patent and Trademark Office, Chris Vizzini voluntarily gave up his registration for the term “gaymer.”

The patent office’s Trademark Trial and Appeal Board said Aug. 21 that the registration will be canceled “in due course.”

Earlier Vizzini sent a cease-and desist notice to Advance Publication Inc.’s Reddit social-media unit, saying that the use of “gaymer” by the 16,000-member group of gay participants infringed his trademark.

He registered the term in March 2008 for use with computer services, online games and games-related social networking.

San Francisco’s Electronic Frontier Foundation and Seattle-based Perkins Coie LLP then took on the representation of the Reddit gaymers, seeking cancellation of the trademark. After discussions, Vizzini decided to surrender his trademark, according to a statement from EFF, a digital-rights group.

Star Belly Stitcher Application Properly Rejected, Board Says

A trademark application filed by Star Belly Stitcher Inc., a sportswear maker, was properly rejected, an appeals panel of the U.S. Patent and Trademark Office said.

The company, based in Ooltewah, Tennessee, filed the application in February 2011 for a mark to be used with a range of products, including golf shirts, baseball caps, sweatshirts, and hunting vests.

The application was rejected on the grounds that it was objectionable or immoral matter. In June 2012, the company filed an appeal. The appeals board said the examiner made the proper determination.

For more trademark news, click here.

Copyright

Gallery Show Honoring Indian Director Runs Afoul of Copyrights

An exhibition that includes photographs of sketches of set designs and costumes done by the late Satyajit Ray has become a copyright issue between the art gallery where they are shown and the Satyajit Ray Society, which is the custodian of the Indian filmmaker’s legacy, the Times of India reported.

The exhibition at the Delhi Art Gallery and the catalog of the show were created without obtaining permission from the Ray estate, according to the newspaper.

Arup De, chief executive officer of the Satyajit Ray Society, told the Times that his organization didn’t object to the photographs of the filmmaker himself, but the estate has copyrights on the Ray sketches, which cannot be published without written permission.

Although the gallery has since removed the objectionable photos from the show, the photos remain in the exhibition catalog, to be removed in the future, according to the 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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