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Undisclosed Chinese Hacking, Zippo, QVOD: Intellectual Property

May 22, 2014

Three U.S. public companies identified as Chinese hacking victims didn’t report the theft of trade secrets and other data to investors, despite rules designed to disclose significant events.

Two of the companies -- aluminum maker Alcoa Inc. (AA:US) and metals supplier Allegheny Technologies Inc. (ATI:US) -- said the thefts weren’t “material” to their businesses and therefore don’t have to be disclosed under Securities and Exchange Commission rules designed to give investors information that may affect share prices.

The Justice Department, in an indictment unsealed on May 19, alleged that five Chinese military officials conspired to steal information from the U.S. nuclear power, metals and solar industries that would be useful to competitors in China.

The military officials illegally breached computers at Alcoa, Allegheny Technologies and U.S. Steel Corp. (X:US) between 2006 and 2014, the Justice Department said in its indictment.

There is no explicit requirement under the federal securities laws that require companies to disclose when they have been hacked, said Bradley J. Bondi, a partner at Cadwalader, Wickersham & Taft who leads its securities enforcement group and previously worked at the SEC.

Under SEC rules, companies must disclose any information that would affect an investor’s willingness to own shares. The SEC told companies in October 2011 that cybersecurity risks and cyber-attacks might be material and may have to be disclosed if they affect other claims in a company’s public filings. .


Zippo Sues Lorillard Unit for Infringing ‘Blu’ Trademarks

Zippo Manufacturing Co., the maker of Zippo lighters, said in a statement it has sued Greensboro, North Carolina-based Lorillard Inc. (LO:US)’s LOEC unit for trademark infringement.

The suit, filed in federal court in California, is in response to the Lorillard unit’s April 7 suit filed in the same court, seeking a declaration it doesn’t infringe Zippo’s “Blu” trademarks used to convey the color of a lighter’s flame. Lorillard said in its complaint that it filed suit because of opposition from Bradford, Pennsylvania-based Zippo to the tobacco company’s application to register “blu cart” and “blu sigs.”

Lorillard’s case is LOEC Inc., v. Zippmark Inc., 2:14-cv-02596, U.S. District Court, Central District of California (Los Angeles).

For more trademark news, click here.


China’s Shenzen QVOD Technology Co. Hit With $47.7 Million Fine

Shenzhen QVOD Technology Co., a provider of online entertainment videos, was fined 260 million yuan ($47.7 million) for copyright infringement and for making pornography available to its 300 million users, South China Morning Post reported.

The company’s Internet business license was revoked in April by China’s National Office Against Pornographic and Illegal Publications, and its servers were shut down for copyright violation by that country’s National Copyright Administration, according to the newspaper.

University Warns Against Publishing Its Cease-and-Desist Letter

Australia’s University of Queensland sent a cease-and-desist letter May 15 to a blogger who allegedly had some of the university’s intellectual property in his possession.

In addition to warning him against publishing the data, the letter also advised the blogger that publishing the cease-and-desist letter would infringe the university’s copyright.

The blogger, Brandon Shollenberger, then immediately published the letter on his blog, which covers scientific studies of climate change and skeptics response the studies.

For more copyright news, click here.

For patent news, click here

To contact the reporter on this story: Victoria Slind-Flor in San Francisco at

To contact the editors responsible for this story: Michael Hytha at Charles Carter, Fred Strasser

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