Bloomberg News

Rackspace, Cartier, Disney, Intel: Intellectual Property

October 15, 2013

Rackspace Hosting Inc. (RAX:US) lawyer Van Lindberg is fed up with what he considers dubious patent-infringement lawsuits -- such licensing company Rotatable Technologies LLC’s demand for $75,000 to settle a February case.

Many companies negotiate to pay the plaintiff to go away, since it’s cheaper than what may become a lengthy court battle.

Using a procedure called inter partes review created by the 2011 America Invents Act, Lindberg instead petitioned the U.S. Patent and Trademark Office for a new examination of the computer-image display patent. If Rackspace persuades the agency the patent never should have been issued, the suit will be dismissed. Rotatable says in court documents its patent is valid. Its lawyer, Austin Hansley in Dallas, didn’t return calls seeking comment on the dispute.

“We said, ‘No thanks’” to Rotatable’s demand, said Lindberg, head of the intellectual property section of the San Antonio-based Web computing services provider.

Companies including Google Inc., NetApp Inc. (NTAP:US) and Oracle Corp. (ORCL:US) see the new review as a way to fend off royalty demands by patent-assertion entities -- sometimes derided as trolls. They like the process for the reasons patent-licensing firms don’t: they offer quicker rulings at less cost than litigation and shift the burden of proof to patent owners.

Tech companies say patent lawsuits -- especially targeting end users or one aspect of a business -- drain resources and innovation. Patent-licensing companies say litigation protects inventions, though Congress is considering curbs on abuse.

At least 592 petitions have been filed since reviews began a year ago, exceeding the 520 the agency expected. Two cases were decided as of Oct. 3, as the patent office stayed open during the partial government shutdown.

Under the new patent law, the Arlington, Virginia-based patent office set up processes to look at some finance-related business methods, such as SAP AG (SAP)’s challenge of Versata Software Inc.’s patent for customized pricing, and to streamline the older procedure for anyone challenging a patent’s validity.

Decisions on whether a patent is valid are required within 12 months. Patent reexaminations under the old rules ordinarily can take years. Patent office officials had no comment for this story, said Paul Fucito, an agency spokesman.

For more patent news, click here.

Trademark

Luxury-Goods Makers Win Order Against Tradekey’s Websites

Cartier International, Montblanc-Simplo GmbH, Alfred Dunhill Ltd. and three other manufacturers of luxury goods persuaded a federal judge in Los Angeles to issue an order against a company that enabled the sale of counterfeit goods through three different websites.

U.S. District Judge Gary Allen Fees said Oct. 8 he would issue an order barring Tradekey Pvt. Ltd. from permitting the use of any of the plantiffs’ trademarks or imitation of their marks on the www.Tradekey.com, www.saudicommerce.com and www.b2bfreezone.com websites. He also said the company wouldn’t be able to use the plaintiffs’ marks as keywords, adwords or any other type of metadata.

The suit began in May 2011 in federal court in Los Angeles. The luxury goods companies hired an investigator who found that 6,000 sellers were offering unauthorized versions of the plaintiffs’ goods on Tradekey websites.

The investigator bought counterfeit products falsely branded as made by Cartier and the other defendants from sellers who were promoting their goods on Tradekey websites, according to court papers.

He also paid a $3,000 fee for a Tradekey membership through which he purported to want to sell counterfeit merchandise. According to court papers, the Tradekey employee told the investigator that it wasn’t a problem selling fakes through the websites.

Tradekey had argued that the investigation process was sloppy and unreliable. The court said that it was worth nothing that the investigators in the case had a “substantial track record” in federal court litigation, and that evidence the investigator produced in the past “has been relied on by multiple courts finding in favor of the famous plaintiff brand owners such as Louis Vuitton, Chanel, Microsoft, Gucci and others.”

The case is Chloe SAS v. Sawabeh Information Services Co., 2:11-cv-04147-GAF-MAN, U.S. District Court, Central District of California (Los Angeles).

For more trademark news, click here.

Copyright

‘Escape From Tomorrow’ Filmmakers Waiting for Disney Suit

The official website for the black-and-white film “Escape From Tomorrow” contains a digital clock counting down the weeks, days, hours and minutes since the film’s release that its producers haven’t been sued by the Walt Disney Co. (DIS:US)

The film, shot clandestinely inside the Disney theme parks in Florida and California, was shown at the Sundance Festival and went into general release earlier this month. The film trailer opens with the message, “The following motion picture has not been approved for all audiences by the Walt Disney Company.”

Roy Abramsohn, who plays the lead role in the film, was interviewed in a “behind the scenes” video available on Google Inc. (GOOG:US)’s YouTube video-sharing website. Abramson said that he and his fellow actors were “hiding in plain sight” when shooting the film.

Director Randy Moore said in that same video that filming in the park wasn’t all that difficult because “everyone brings in camera equipment” and is shooting videos.

The film’s trailer features background shots of many of the iconic Disney theme park attractions, including the swirling teacup ride, Sleeping Beauty’s castle, the flying Dumbo elephant ride, the Epcot sphere and the “Small World” family ride.

One of the posters for the film contains an image of the four-fingered gloved hand associated with Mickey Mouse. Blood drips from all four fingers. Another shows two women running from what seems to be a giant eye centered by the Epcot sphere.

The film was scored by Abel Korzeniowski, instead of using familiar Disney theme music, such as the accompaniment to the Small World ride, and the background music to the jungle-themed Tiki Room.

This was done in an attempt to sidestep any possible copyright claims, according to an article by Peter Sciretta on the SlashFilm.com website. Sciretta’s piece, posted in January after the film’s debut at the Sundance Festival, predicted that “Escape From Tomorrow” would never go into general release because of the number of potential intellectual-property issues Disney lawyers could raise.

For more copyright news, click here.

Trade Secrets/Industrial Espionage

Intel Sued, Accused of Trade Secret Misappropriation by Zettaset

Zettaset, a maker of database-management software and systems, filed a trade-secrets misappropriation case against Intel Corp. (INTC:US)

The complaint, filed Oct. 10 in California state court, accuses the Santa Clara, California-based chipmaker of extracting trade secrets from Zettaset’s products and technology.

Mountain View, California’s Zettaset said in a statement yesterday that the misappropriation was so extensive that an Intel product -- Apache Hadoop Software -- “now mirrors the features and functionality of Zettaset’s Orchestrator software.”

Zettaset President and Chief Executive Officer Jim Vogt said in the statement that the company had “no alternative but to take legal action.”

Intel spokesman Chuck Malloy said in an e-mail that his company is aware of the suit and “in the process of developing our defense.”

According to Zettaset, a pretrial conference for the dispute has been set for Feb. 14.

The case is Zettaset v. Intel Corp., 1-13-cv-254447, California Superior Court, Santa Clara County.

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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Companies Mentioned

  • RAX
    (Rackspace Hosting Inc)
    • $31.85 USD
    • -1.84
    • -5.78%
  • NTAP
    (NetApp Inc)
    • $37.13 USD
    • 0.49
    • 1.32%
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