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Microsoft, Amazon, Tiffany, EBay, Knoll-Alphaville: Intellectual Property

Microsoft Corp. failed to persuade a U.S. appeals court to take a second look at a patent- infringement case that forced it to change the company's popular Word software and resulted in a damage award that has grown to more than $290 million.

The U.S. Court of Appeals for the Federal Circuit on April 1 rejected a request that the Dec. 22 ruling won by closely held I4i LP of Toronto be heard by the full 12-member court. The decision was announced in a notice on the court's Web site.

Microsoft has called the case the largest patent- infringement verdict ever upheld on appeal. The request for a rehearing centered on testimony related to damages, whether Microsoft's infringement was intentional, and whether Microsoft should have been forced to remove what the company called an "obscure functionality" or stop selling Word.

I4i's invention is related to customizing extensible markup language, or XML, a way of encoding data to exchange information among programs. Microsoft issued an update to Word to comply with the court order.

Word is part of Microsoft's Office software, used by more than 500 million people. Redmond, Washington-based Microsoft is testing Office 2010 with customers. The completed version is scheduled to be released by June. The unit that sells Office is Microsoft's biggest, with $18.9 billion in sales in the year ended June 30.

XML is a common way of encoding data, and nothing in the order prevented Microsoft from continuing to offer that feature in Word, or for allowing customized XML when it's used in plain text. The disputed feature is one used by large companies to add special data to Word files, such as information in forms submitted by customers. I4i's patent was issued in 1998.

The case is I4i LP v. Microsoft Corp., 2009-1504, U.S. Court of Appeals for the Federal Circuit (Washington). The lower-court case is I4i LP v. Microsoft Corp., 07-cv-113, U.S. District Court, Eastern District of Texas (Tyler).

Amazon.com Gets U.S. Patent for Order Tracking by Video

Amazon.com Inc., the largest online retailer, received a patent for video tracking of order processing.

Patent 7,689,465, issued March 30, covers the capture of images of an order being processed, and the sending of those images to the customer.

The technology can also be used to notify third parties, who pay to have their promotional material included in a shipment, according to the patent. A customer will be able to see her own name and address put on the order, and what is included in the order, before it is shipped.

The invention also may be used to verify customer complaints about an order, according to the patent.

Amazon applied for the patent in March 2005 with assistance from Meyertons, Hood, Kivlin, Kowert & Goetzel PC of Austin, Texas.

New Zealand Lawmakers Propose Barring Software Patents

New Zealand lawmakers are considering changing that country's patent code to outlaw software patents.

Parliament's Commerce Select Committee made its final recommendation in a 197-page report released at the end of March.

The committee said the patenting of software is "inconsistent" with the open-source model. Permitting software patents would "stifle innovation and competition," the committee said in its report.

The report noted that the issue of embedded software is problematic and urged the Intellectual Property Office of New Zealand to develop guidelines for inventions containing embedded software.

In addition to software, the new law would ban the patenting of plant varieties, human beings and biological processes for their generation, methods of treating humans by surgery and therapy, and methods of diagnosis practiced on human beings.

New Zealand's present patent law, enacted in 1953, was based on a 1949 U.K. patent bill that has since been repealed.

Existing New Zealand patent law "has a low threshold for patentability compared with most other countries," according to the committee's report. This low threshold "can lead to broader patent rights" in New Zealand than in other countries.

As a result, technology that may be freely available in other countries may be protected by patents in New Zealand. Lawmakers said this has the potential to discourage innovation and inhibit growth in productivity and exports.

Trademark

EBay Wins Tiffany Trademark Appeal, Faces Ad Claim

EBay Inc. didn't infringe Tiffany & Co.'s trademark because of fake goods sold on its Web site, an appeals court ruled, while returning Tiffany's lawsuit to the trial court for further action on a false-advertising claim.

EBay's ads promoting Tiffany merchandise may be misleading and in violation of federal law, the New York-based appeals court said April 1.

"The law prohibits an advertisement that implies that all of the goods offered on a defendant's Web site are genuine when, in fact, as here, a sizeable portion of them are not," a three- judge panel wrote.

The ruling may force EBay to change its advertising policy to include disclaimers that some trademark goods, like Tiffany jewelry, may be counterfeit. The judges said they "rather doubt that the consequences will be so dire" that advertising will be deterred because sellers can't confirm the authenticity of goods for sale as EBay maintained.

Tiffany said in a statement that it is "very disappointed" by the ruling and considering an appeal.

"EBay knew that counterfeit merchandise was being sold on its site -- and EBay took no effective steps to stop it," Tiffany Chief Executive Officer Michael J. Kowalski said in the statement. "EBay deliberately misled consumers for profit, and unfortunately the court has justified its actions."

Tiffany, based in New York, and other retailers have said online sales of fake brands of clothes, bags and jewelry cost the industry about $30 billion a year. EBay, the most-visited U.S. e-commerce site, said the ruling validates its "leading efforts to fight counterfeiting."

"We continue to support cooperation, rather than litigation, as the best way to address these issues in everyone's best interests," Michael R. Jacobson, general counsel of the San Jose, California-based company, said in a statement, predicting an EBay victory on the false-ad claim.

The case is Tiffany v. EBay, 08-3947, U.S. Court of Appeals for the Second Circuit (Manhattan).

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Boeing Ready With Tanker Bid, Has Trademark Application

Boeing Co., whose quest to gain the U.S. Air Force's $35 billion air-tanker contract was set back with the extension of the bidding deadline to July 9, already has a pending application for a trademark for the aircraft.

Chicago-based Boeing, which is presently the only known bidder for the contract, applied to register "KC-767" as a trademark in March 2006, according to the database of the U.S. Patent and Trademark Office. The mark is to be used for aircraft, Boeing said in its application.

According to the designations-systems.net Web site, the Air Force approved the KC-767 in September 2002 for a Boeing tanker based on its 767 aircraft. Boeing is the maker of the KC-135 tanker the Air Force first ordered in 1954, which the new tanker is intended to replace.

The Department of Defense said March 31 it was extending the bidding deadline to July 9 if the European Aeronautic Defence and Space Co. decides to submit a bid. Netherlands-based EADS asked for an extension after partner Northrop Grumman Corp. dropped out of the competition on March 8, saying the bidding contest favored the Boeing aircraft.

Knoll Settles 'Barcelona' Trademark Dispute with Alphaville

Knoll Inc., a maker of office furniture, settled a trademark dispute with Alphaville Design Inc., according to a company statement.

Alphaville, a furniture wholesaler based in Fremont, California, sued Knoll in federal court in San Francisco in November 2007, seeking a declaration it wasn't infringing the "Barcelona" trademarks used for furniture designed by Mies van der Rohe.

The California company claimed Knoll's trademarks were invalid. In settling the dispute, Alphaville and its owners acknowledged the validity of the trademarks and Knoll's rights to them.

In return, East Greenville, Pennsylvania-based Knoll granted Alphaville the right to sell similar products for a limited amount of time, according to the statement.

U.S. District Judge Marilyn Hall Patel signed the dismissal order on March 29. No damages, litigation costs or attorney fees were awarded to either party, according to the order.

The case is Alphaville Design Inc., v. Knoll Inc. 3:07-cv- 0569-MHP, U.S. District Court, Northern District of California (San Francisco).

Copyright

Nature Publishing Group Recalls Biofuel Article for Plagiarism

A scholarly article about the use of biofuel was retracted for plagiarism by the journal Nature Reviews Genetics, The Scientist.com reported.

This is first such action for any of the 15 journals published by Nature Publishing Group, according to The Scientist.com

The article, "Plant genetic engineering for biofuel production: towards affordable cellulosic ethanol," was by a plant scientist from Michigan State University,

Professor Miriam B. Sticklen of the university's Department of Crop & Soil Sciences submitted her retraction notice to Nature Publishing, which placed it on the publication's Web site.

She said she had paraphrased without attribution an article to which she had access as a peer reviewer. The article she reviewed, on plant cell wall reconstruction, was published in the journal Plant Science.

The Scientist.com Web site reported that Sticklen told her university's research-integrity investigation committee she suffered from a medical condition that affected her memory.

She is the named inventor on a number of U.S. patents related to transgenic plants and plant reproduction, according to the database of the U.S. Patent and Trademark Office.

IP Moves

Sheppard Mullin Hires Patent Litigator Hill from Howrey

Sheppard, Mullin, Richter & Hampton LLP hired Russell B. Hill for its intellectual-property practice, the Los Angeles- based firm said in a statement.

Hill, a patent litigator, joins from Washington's Howrey LLP. Before he was a lawyer, he served in the U.S. Marine Corps in aviation electronic systems and controls.

He has represented clients whose technologies include electrical engineering, biotechnology, software and mechanical processes. Among Hill's clients were Electronics for Imaging Inc., Lenovo Group Ltd. and TDK Corp.

Hill has undergraduate degrees from Chapman University and Grantham University, a master's degree from Baylor University and a law degree from the University of California's Berkeley School of Law.

To contact the reporter on this story: Victoria Slind-Flor in Oakland, California, at vslindflor@bloomberg.net.

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