Progressive, Abbott, Tesla, Coach, Li Peng's Diary: Intellectual Property

Progressive Corp., the fourth- biggest U.S. auto insurer, sued Liberty Mutual Group Inc. in a patent-infringement dispute over accident-forgiveness programs.

The complaint, filed on June 18 in federal court in Cleveland, concerns a program run by Liberty Mutual’s Safeco called “Rewind,” which waives surcharges for qualifying drivers who get a speeding ticket or are involved in an accident, and the “Onboard Advisor” by Liberty Mutual’s Ohio Casualty unit.

The two units get data regarding location, mileage, speed and other information from an onboard computer to calculate a “safety score” on the driver. Progressive said in the complaint that both programs infringe a patent it obtained in 2000 for a motor vehicle monitoring system that can help determine auto insurance rates.

The company, based in Mayfield Village, Ohio, competes against Liberty Mutual, Allstate Corp. and Berkshire Hathaway Inc.’s Geico Corp., in selling auto insurance. Progressive reported June 15 that net income fell 19 percent in May on declines in the value of investments.

Liberty Mutual, led by Chief Executive Officer Edmund “Ted” Kelly, added car insurance clients with the acquisition of Safeco Corp. for more than $6 billion in 2008. The insurer, which is owned by policyholders, also sells commercial property, home and life insurance and is the fifth-largest U.S. property and casualty insurer.

Glenn Greenberg, a spokesman for Boston-based Liberty Mutual, said the company doesn’t comment on litigation.

Progressive is represented by James R. Wooley from Cleveland’s Jones Day.

The case is Progressive Casualty Insurance Co. v. Safeco Insurance Co. of Illinois, 10cv1370, U.S. District Court for the Northern District of Ohio (Cleveland).

Abbott Sues Novartis’ Sandoz Over Niaspan Patents

Abbott Laboratories sued Novartis AG’s Sandoz unit to block sale of a generic copy of Niaspan, a drug used to increase so- called good cholesterol, accusing its Swiss rival of infringing three patents. In dispute are patents 6,080,428; 6,469,035; and 6,818,229.

Abbott contends Sandoz has applied to the U.S. Food and Drug Administration for approval of the generic and wrongfully intends to market a version of the patent-protected drug, according to a complaint filed June 18 in federal court in Delaware.

Sandoz “had actual and constructive knowledge” of the patents, and “Abbott will suffer substantial and irreparable harm” unless the infringement is stopped, Abbott’s lawyers said in court papers.

Abbott said in April that first-quarter sales of Niaspan, a form of Vitamin B, rose 15 percent to $205 million. The Abbott Park, Illinois-based company reported revenue of $30.7 billion in 2009.

Officials of Basel, Switzerland-based Novartis weren’t immediately available to comment on the lawsuit.

The case is Abbott Laboratories v. Sandoz Inc., 10CV538, U.S. District Court, District of Delaware (Wilmington).

Tesla Brings Portfolio of Issued Patents, Applications to IPO

Tesla Motors Inc., the electric-car manufacturer planning an initial public offering on June 28, has amassed a portfolio of patents and pending patent applications on its technology.

According to the database of the U.S. Patent and Trademark Office, Tesla has 37 published and pending applications, many of them related to battery capacity and performance.

The company also has 17 U.S. patents, with the most recent one issued June 15. That patent -- 7,739,005 -- is for a control system for an all-wheel drive electric vehicle. According to the patent, most current traction-control systems aren’t satisfactory for either a hybrid or all-electric vehicle.

Many of the issued patents and pending applications are handled for Tesla by the Law Offices of David G. Beck of Mill Valley, California.

Tesla’s previous visibility in the IP arena came in its unsuccessful trade-secrets dispute with Fisker Coachbuild LLC, a custom car-design company in Irvine, California.

An arbitrator the two parties selected from the Judicial Arbitration and Mediation Service said in November 2008 that Tesla’s assertions that Fisker stole its trade secrets were “baseless and neither brought nor pursued in good faith,” according to a Fisker statement.

Tesla said May 27 it would buy for $42 million the recently closed New United Manufacturing Inc. factory in Fremont, California, vacant after Toyota Motor Corp. and General Motors shut down their joint-venture operations there in April.

Proposed Digital License Plate Covered by Multiple Patents

California’s state senate has endorsed a bill authorizing a study to replace metal auto license plates with a digital version that could display advertising messages when the vehicle is stopped. Sale of the ads could generate revenue for the cash- strapped state.

According to an analysis of SB 1453 posted on the California Senate’s web site, a patent for the technology exists and is held by Smart Plate of San Francisco. The aim of the bill is to allow Smart Plate or other companies “to investigate the creation and use of this type of license plate and report to the legislature on that investigation.”

The bill was sponsored by Senator Curren D. Price Jr., a Democrat representing parts of Los Angeles, Hollywood and surrounding towns.

“State governments are facing unprecedented budget shortfalls, and are actively rethinking the use of existing state assets to create new ongoing revenue opportunities,” Price said in a statement.

General Motors Co. holds patent 7,161,563 for an electronic vehicle registration and license plate. The patent, which was issued in January 2007, covers an electric license plate coupled to an onboard computer that can receive vehicle identification and registration information.

The GM patent makes no mention of the use of the technology for advertising purposes. Instead, the issued the patented technology is intended to address is the aesthetics of automobile design, the frequency with which metal license plates are stolen, and the cost of operating government offices for vehicle registration and licensing.

A patent for an electronic license plate was issued in June 2002 to Dean L. Naddeo of Oradell, New Jersey. His patent 6,404,327 also focuses on lowering the cost of license plate production and theft deterrence.

Harold Parker Sr. of Raleigh, North Carolina, also has a patent for a license plate with wireless tracking and data dissemination. Patent 7,096,102, issued in August 2006, emphasizes the use of the device for emergency notification system that could be activated if the car is stolen or carjacked.

For more patent news, click here.

Trademark

City of Chicago Targeted in Coach’s ‘Operation Turnlock’

Coach Inc., the leather goods-maker that filed at least 80 trademark-infringement suits in 2010, named the City of Chicago as defendant in one of the suits.

New York-based Coach announced its “Operation Turnlock” a national anti-counterfeiting program in May, saying it would sue companies and individuals that sold fake coach handbags and other branded items.

“We intend to pursue all infringers -- no matter how big or small -- using the strong state and federal laws to enforce our rights and protect against the devaluation of the brand,” Todd Kahn, Coach’s senior vice president and general counsel, said in a May 20 statement.

The program is principally focused on New York, California, Florida, Georgia and the Midwest, according to the statement.

In addition to the wholesale operators, small businesses, Internet sites, purse-party operators, street vendors and flea markets selling fakes, Coach targeted the City of Chicago in a complaint filed in federal court May 19.

The city was sued in its role as operator of the New Maxwell Street Market, an outdoor market along Chicago’s Desplaines Avenue. Once the largest open-air market in the country, the market was moved from its original site on Maxwell Street to Canal Street in the 1990s and then to Desplaines in 2008.

Coach investigators reported buying fake-Coach merchandise from vendors in the Maxwell Street market from August 2009 through March 2010. Purchases included counterfeit Coach bags and wallets.

Although the city was put on notice that branded knockoff items were sold in the market, the sales have continued, the leather-goods company said. In September 2009, criminal trademark charges were filed against two Maxwell Market vendors, with information about the case sent to the city “on an almost- monthly basis,” Coach said in its court papers.

Those two vendors are defendants with the city in this civil case. When searched during the criminal investigation, their Maxwell Market booths had respectively 135 and 216 fake Coach products, according to court papers.

Coach asked the court to bar sales of infringing merchandise at the market, for the recall and destruction of all fakes, and for an award of attorney fees and litigation costs. The company is also seeking damages of $2 million for each infringed trademark, and extra damages to punish the defendants for their conduct.

The leather-goods company is represented by Mariangela M. Seale and Steven Patrick McKey of St. Louis-based Bryan Cave LLP.

The case is Coach Inc. v. City of Chicago, 1:10-cv-03108, U.S. District Court, Northern District of Illinois (Chicago).

For more trademark news, click here.

Copyright

New Century Press Says Copyright Issues Cancel Li Peng Book

New Century Press, a Hong Kong-based publisher, canceled publication of a book about the Tiananmen Square uprisings in 1989 by former Chinese premier Li Peng, the South China Morning Post reported.

“Tiananmen Diary of Li Peng,” set for publication June 22, was withdrawn for “copyright reasons,” according to the Post.

Bao Pu, the political commentator who founded New Century Press and planned an initial run of 20,000 copies, told the Post that “relevant institutions” he declined to name gave him copyright information that made it impossible to bring out the book on time.

He received the manuscript from a “mysterious middleman” and never signed a copyright contact with anyone, Bao told the Post.

Apple Sued Over Use of Bird Calls in Application for IPhone

Apple Inc., maker of the iPhone and iPad, was sued for copyright infringement by a collector of bird calls.

Martyn Stewart of Redmond, Washington, said he has collected the sound of more than 3,500 birds in their natural setting, the result of 35 years of locating, identifying and recording the birds. In his complaint filed June 18 in federal court in Seattle, he said he was approached by software- application developer Mitchell Waite of Sausalito, California, about getting a license to his bird call recordings to be part of an application for Palm Pilot to be called “Winged Explorer.”

Waite and Stewart never completed a formal license agreement, according to court papers. Waite and his company Mitch Waite Group LLC are accused of incorporating Stewart’s recorded bird sounds into iBird software applications for Cupertino, California-based Apple’s iPhone without authorization.

Stewart claims Waite developed nine individual applications that use the bird sounds without authorization, and that they’re marketed by Apple for its iPhone. He said in his court papers that the iBird applications “explicitly identify” him as the recorder of the bird sounds.

Waite is a co-defendant with Apple.

Stewart asked the court for money damages, and attorney fees, litigation costs, and an order barring all unauthorized use of his work, and destruction of all articles used to create the infringing applications.

He’s represented by Philip P. Mann of Seattle’s Mann Law Group, and John E. Whitaker of the Whitaker Law Group, also of Seattle.

The case is Stewart v. Apple Inc., 2:10-cv-01012, U.S. District Court, Western District of Washington (Seattle).

For more copyright news, click here.

Trade Secrets/Industrial Espionage

CMI Told It Must Release ‘Trade Secret’ Breath-Test Codes

CMI Inc., maker of alcohol breath-test machines, has been told by a Florida appeals court it must make the computer code within its machines available to defendants in cases alleging they drove while drunk, the Sarasota Herald Tribune reported.

The Owensboro, Kentucky-based manufacturer claims the code is a trade secret and has refused to honor lower-court subpoenas, according to the Herald Tribune.

The company’s Intoxiliyzer 8000 machine, for which the code is sought, is the only breath-test machine approved in Florida, the newspaper reported.

CMI’s refusal to date has meant the dismissal or a reduction of the charges in “hundreds” of DUI cases in Florida, according to the Herald Tribune.

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

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