RIM, Boeing, Warner, Apple, Bayh-Dole, Evergreen : Intellectual Property

Research In Motion Ltd., maker of the BlackBerry smartphone, agreed to pay Motorola Inc. an undisclosed amount to settle their battle over patents to wireless technology.

RIM will make an upfront payment to Motorola and pay royalties for future use of the technology, the companies said in a joint statement June 11, without providing specific terms. The companies also agreed to license each other’s patents related to industry standards for wireless phones and e-mail.

RIM and Motorola, which is preparing to spin off its handset business, have been suing each other since a license agreement that ran from 2003 to 2007 expired and the two were unable to reach a new deal. The litigation included cases in the U.K., a dispute over imports before the U.S. International Trade Commission and a half-dozen lawsuits in federal court in Texas.

Disputes among makers of smartphones, which can surf the Web and play video, have increased as sales of the devices outpace the rest of the handset market. Apple Inc.’s iPhone and RIM’s BlackBerry overtook Motorola in global unit sales last quarter, according to researcher ISuppli Corp. Motorola makes the Droid, which runs on Google Inc.’s Android software.

“It behooves them to come to terms and settle,” said Ashok Kumar, an analyst with Rodman & Renshaw Inc. in New York, who has a “market perform” rating on RIM. “The reality of the market is that eventually they will be stepping on each other’s toes.”

RIM, which had $15 billion in sales last year, said in a regulatory filing that the settlement isn’t expected to affect its fiscal first-quarter results “or to have a material impact on operating results going forward.”

RIM last year agreed to pay $267.5 million to end a patent dispute with mobile-phone software maker Visto Corp., and in 2006 paid $612.5 million to settle a suit filed by patent owner NTP Inc. over e-mail technology.

RIM is also fighting a patent complaint before the ITC brought by Eastman Kodak Co. over digital-camera technology, and last month, FlashPoint Technology Inc. filed a case against RIM, Nokia Oyj, HTC Corp. and LG Electronics Inc. over focus and flash settings in cameras. RIM is also part of a case involving Samsung Electronics Co. memory chips used in the BlackBerry.

In all three cases, the trade agency has the power to block imports of products found to infringe U.S. patents.

The most recent development in the Motorola and RIM dispute came in February when the ITC said it would look into claims that BlackBerry devices infringe five patents.

Motorola filed the complaint Jan. 22, targeting the BlackBerry Pearl, Curve, Bold, Storm and Tour, as well as their battery packs. The patents relate to some early stage innovations developed by Motorola in areas such as Wi-Fi access, application management, user interface and power management.

RIM’s share of industrywide sales climbed to 3.6 percent, and Apple’s rose to 3.04 percent last quarter, according to El Segundo, California-based ISuppli. Motorola’s market share during the period shrank to 3 percent from 3.6 percent. Smartphone sales may climb 46 percent this year worldwide, more than triple the pace of the overall market, according to researcher Gartner Inc.

The ITC case is in the Matter of Wireless Communication System Server Software, 337-706, U.S. International Trade Commission (Washington). The civil cases are 08cv1545; 10cv480; 09cv72; 09cv464; 08cv317; and 08cv284, all U.S. District Court for the Northern District of Texas (Dallas).

Genzyme Sues Anchen to Halt Generic Version of Kidney Drug

Genzyme Corp., a biotechnology company that develops drugs for rare chronic diseases, sued generic drugmaker Anchen Pharmaceuticals Inc. alleging infringement of a patent for the kidney drug Hectorol. The drug is used to treat advanced kidney disease.

Anchen, based in Irvine, California, is seeking U.S. Food and Drug Administration approval to sell copies of Hectorol, according to a complaint filed yesterday in federal court in Wilmington, Delaware. Genzyme wants approval blocked until the 5,602,116 patent expires in 2014.

“The sale or offer for sale of Anchen’s proposed generic products” would induce infringement, Genzyme’s lawyers said in court papers. Genzyme is entitled to “exclusivity” under patent law, they said.

“Anchen has no comment at this time” on the lawsuit, spokesman John Mooney said in an e-mailed message.

Genzyme, which reported sales of $4.52 billion last year, said last month it would pay $175 million to the U.S. government for manufacturing violations in a Boston plant.

Cambridge, Massachusetts-based Genzyme is represented in the patent suit by Jack B. Blumenfeld of Wilmington’s Morris, Nichols, Arsht & Tunnell LLP.

The case is Genzyme Corp. v. Anchen Pharmaceuticals Inc., 10CV512, U.S. District Court, District of Delaware (Wilmington).

Trade Secrets/Industrial Espionage

Evergreen Trade Secret Claims Against Boeing Stand, Judge Says

Although a federal judge in Seattle dismissed breach of contract claims brought against Boeing Co. by one of its suppliers, he left standing the trade-secret misappropriation claims.

Evergreen Holdings Inc.’s Evergreen International Airlines unit sued Boeing in federal court in Seattle in April. In the complaint the airline said its contract to ferry components of Boeing’s 787 Dreamliner passenger jet was broken without cause in favor of Atlas Air Inc. of Purchase, New York.

Closely held Evergreen of McMinnville, Oregon, also claimed that the Chicago-based aerospace company impermissibly released confidential aircraft-performance information to Atlas.

Disclosure of this data would give valuable confidential information regarding Evergreen’s fleet practices to Atlas, a competitor, according to court papers.

In a June 9 order, U.S. District Judge John C. Coughenour said that while Evergreen failed to state a claim for breach of contract, the company did adequately plead that Boeing had violated confidentiality provisions of its contract with Evergreen. The judge said that part of the suit can go forward.

Evergreen is represented by C. Dana Hobart and Mary H. Chu from Los Angeles-based Hennigan Bennett & Dorman LLP, and Allyssa Jayne Hale and Donald H. Mullins from Seattle’s Badgley Mullins Law Group PLLC.

Chicago-based Boeing is represented by Cori Gordon Moore and Michael Haldon Himes of Seattle’s Perkins Coie LLP, and John C. O’Quinn, Daniel Aaron Bress and Craig S. Primis of Chicago’s Kirkland & Ellis LLP.

The case is Evergreen International Airlines Inc. v. Boeing Co., 2:10-cv-00568-JCC, U.S. District Court, Western District of Washington (Seattle).

Copyright

Warner Says No to Release of Unofficial World Cup Song

Warner Music Group Corp. has barred the release and uploading of an unofficial World Cup anthem originally written for a children’s soccer team in London, the U.K. Press Association’s Community Newswire website reported.

The song, “There May be Glory Ahead,” is a reworking of Irving Berlin’s “Let’s Face the Music and Dance,” recorded by the Dulwich Ukulele Club as a fundraiser for the Athenlay Football Club, according to the website.

New York-based Warner gave no reason for its refusal and didn’t respond to inquiries from the Community Newswire.

The video of the ukulele club’s performance of the song with the kids from the team uploaded to Google Inc.’s YouTube video-sharing website received more than 10,000 hits by June 11.

Trademark

Apple Faces Trademark Infringement Suit Over ‘iAd’ Platform

Despite Steve Jobs’s contention that Apple Inc. has commitments of more than $60 million for its iAd platform, the Cupertino, California-based company may have to get a trademark- infringement suit out of the way first.

Apple was sued May 21 by Innovate Media Group LLP of Costa Mesa, California, owner of two registered U.S. trademarks for “iAd.”

Innovate, founded in 2002 by Yahoo! Inc. alumnus John Cecil, registered the trademarks for use with Internet advertising in October 2008, according to the database of the U.S. Patent and Trademark Office. The company has used the terms since 2006, it said in the complaint filed in federal court in Los Angeles.

Jobs, Apple’s chief executive officer, revealed the iAd program at an April 8 press conference. Afterwards, Innovate contacted Jobs and Quattro Wireless, a company acquired by Apple in January that produces ads for mobile phones.

Innovate informed both Jobs and Quattro of its trademarks, and received no response, the company said in its court filings.

Instead, the computer company continued to make unauthorized use of the mark, including at a new website, www.iadtoday.com. That website informs readers that “iAd is Apple’s mobile advertising platform for targeting iPhone, iPad and iPod touch users.”

Innovate claims that Apple’s use of the “iAd” mark “is just another sequence in a pattern of conduct by Apple, of ignoring and tramping the intellectual property rights of others.”

The complaint noted that “iPhone,” “iPad” and even the name “Apple” were all marks held by third parties, “which Apple used without the owners’ permission, and ultimately took over.” Innovate made reference to trademark disputes with the Beatles-founded record label Apple Corp. and Cisco Systems Inc.’s iPhone mark.

Innovate claimed it has suffered “irreparable harm” and notes that Apple has applied for to register “iAd” as a trademark in Canada. It asked the court to bar Apple from using “iAd,” and for an award of money damages and all profits realized by Apple relative to its alleged infringement.

Additionally, Innovate requested awards of litigation costs and attorney fees, and extra damages for what it said is deliberate infringement by Apple.

Apple hasn’t yet made any court filings in response to Innovate’s allegations.

Innovate is represented by Laura D. Castner, Olivier A. Tallieu, Sarah S. Brooks and Yuri Mikulka of Los Angeles-based Zuber & Taillieu LLP.

The case is Innovate Media Group LLC v. Apple Inc, 2:10 cv- 03866-SVW-JC, U.S. District Court, Central District of California (Los Angeles).

University Technology Transfer

Bayh-Dole Act Needs to be Reformed, House Subcommittee Told

A subcommittee of the U.S. House of Representatives’ Science and Technology Committee heard a recommendation for a major restructuring of 30-year-old legislation that gave universities and non-profits title to IP developed from research funded with federal dollars.

Speaking to the Subcommittee on Research & Science Education on technology transfer July 4, Neil Kane of Advanced Diamond Technologies Inc. suggested that the 1980 Bayh-Dole Act be modified to require that any license agreement be publicly accessible. “Universities will vigorously oppose it, but it will level the playing field and reduce transaction costs across the board,” Kane said in a prepared statement to the committee.

He said that in order to attract private capital, licenses to the university-developed IP “need to be exclusive, even if they are for a limited field of use.”

Kane also recommended that each university publish its license template and financial expectations for license agreements. Presently the process is “opaque,” he said, giving universities the advantage due to “their knowledge of what others have paid for their technologies.”

He claimed that the cost of executing licenses from universities and federal laboratories is too high, and “deep- pocketed investors interested in starting a company” will walk away because they couldn’t secure the rights to the technology on “reasonable (in their eyes) license terms.” The institutions “always underestimate the time and money needed to turn their innovations into commercial products.”

Kane, whose company was spun off from technology developed at Argonne National Laboratory, is a former regional business development manager for Microsoft Corp., and was the executive director of the Illinois Technology Enterprise Center at Argonne.

Others who testified at the hearing include Keith L. Crandell of Chicago-based Arch Venture Partners; W. Mark Crowell, executive director and associate vice president for innovation partnerships and commercialization at the University of Virginia and past president of the Association of University Technology Managers; Wayne Watkins, associate vice president for research at the University of Akron; Lesa Mitchell, vice president of Advancing Innovation at the Ewing Marion Kauffman Foundation; and Thomas W. Peterson, assistant director, Directorate for Engineering of the National Science Foundation.

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

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