Toshiba, DHL, Privacy, Copyright, Bank of America: Intellectual Property

Toshiba Corp., a Japanese electronics maker, settled a patent-infringement fight with contract manufacturer Wistron Corp. over technology used in notebook computers, legal filings show.

Each agreed to license the other’s patents, and Wistron will make a payment of an unspecified amount to Tokyo-based Toshiba, according to a redacted copy of the settlement agreement filed with the U.S. International Trade Commission in Washington. The companies also submitted a filing seeking dismissal of a civil suit in federal court in California.

Toshiba, which said it sold the world’s first notebook computer in 1985, claimed Wistron was infringing its patents. Wistron countered that Toshiba was violating its patents. In the ITC case, Toshiba sought to block imports of Wistron computers, including the Acer Aspire 4810T notebook computer made by Hsinchu, Taiwan-based Wistron for Acer Inc.

The ITC case is In the Matter of Notebook Computer Products, 337-705, U.S. International Trade Commission (Washington). The civil case is Toshiba Corp. v. Wistron Corp., 10cv74, U.S. District Court, Central District of California (Santa Ana).

Trademarks

DHL’s French Trademark Ruling Valid Across EU, Court Aide Says

Deutsche Post AG’s DHL Express unit should face the consequences of a French trademark-infringement ruling and fines across the 27-nation European Union, an adviser to the region’s highest court said.

An order of a national court barring an infringer from using a registered trademark has effect “in principle” across the EU, Advocate General Pedro Cruz Villalon, an adviser at the European Court of Justice in Luxembourg, said in a non-binding opinion yesterday. The court follows such advice in a majority of cases.

The case dates back to a trademark dispute DHL Express’s French unit lost against La Poste’s express delivery service Chronopost in a 2007 ruling by the Paris appeals court. The court at the time said that DHL Express had breached Chronopost’s EU trademark rights for the name Webshipping by using the same word for online courier services.

The Cour de Cassation, France’s top court, in June 2009 sought the EU tribunal’s guidance whether such a ruling is valid across the 27-nation EU or only in France.

Jorg Wiedemann, a spokesman for DHL, said by e-mail that the company doesn’t comment on pending litigation.

The case is C-235/09, DHL Express France SAS v Chronopost SA.

Privacy

Privacy Rights Questioned in Government Contract Case

U.S. Supreme Court justices signaled they are prepared to give the federal government broad latitude to ask questions about the background of independent contractors who work at federal facilities.

Hearing arguments Oct. 5 in Washington, a majority on the court voiced skepticism about a ruling limiting government inquiries about contract workers at a California jet propulsion laboratory owned by the National Aeronautics and Space Administration.

The case offers the court a chance to say whether the Constitution protects against the disclosure of private information, though several justices suggested they wanted to skirt that issue. The court could say that the questions, including one asking references for adverse information, were a reasonable way to protect against security risks, regardless of any privacy right.

“Look at the private employment sphere,” Justice Anthony Kennedy said to the lawyer for 28 workers who are challenging the policy. For sensitive positions, “the employer could be sued and would be remiss if it did not ask this question.”

The case concerns policies developed after the 2001 terrorist attacks. A San Francisco-based federal appeals court said the government was going too far in asking contract workers about drug treatment and counseling within the previous year. The appeals court also said the government couldn’t ask a worker’s references open-ended questions about the job applicant’s suitability for employment.

Justice Sonia Sotomayor said the court couldn’t resolve those issues without addressing the scope of constitutional privacy protections. She questioned whether the government had unlimited authority to ask about a job applicant’s sexual activity and other topics that concern “fundamental rights.”

Acting U.S. Solicitor General Neal Katyal, the federal government’s top litigator, said the court didn’t need to reach that issue to resolve the case before it. He said the disputed questions were legitimate ones that many private employers ask.

Justice Antonin Scalia made clear he was willing to go further and reject the notion of a constitutional protection for so-called informational privacy. He said the issue was one for Congress to decide.

Other justices signaled they were more interested in a narrow ruling, saying the disputed questions seemed legitimate. Justice Ruth Bader Ginsburg said open-ended questions are “routinely used in employment situations.” Justice Samuel Alito said he didn’t know “what the alternative as a practical matter is.”

Justice Elena Kagan isn’t taking part in the case because she was involved in it as a government lawyer. The federal government will need the votes of five of the other eight justices to overturn the lower court ruling.

The workers’ lawyer, Dan Stormer, said the Pasadena, California, facility is on a low-security campus where visitors can come and go with little scrutiny. He said many of the employees being scrutinized have been working at the facility, which is operated by the California Institute of Technology, for 20 or 30 years and weren’t in sensitive positions.

That line of argument drew resistance from Chief Justice John Roberts, a onetime Justice Department official. “It’s a big government, and they can’t tailor every inquiry, every form, to the individual applicant,” Roberts said.

He voiced a degree of concern about the question concerning drug treatment and counseling.

“It’s one thing to say I had a drink. It’s another to say I’m in AA,” he said, referring to Alcoholics Anonymous.

The justices will rule by July in the case, NASA v. Nelson, 09-530.

Copyright

Commerce Department Seeking Input on Copyright and Internet

The U.S. Commerce Department’s Internet Policy Task Force on Oct. 5 issued a notice of inquiry seeking comment from all copyright holders, Internet service providers, and consumers on the protection of copyrighted works online.

The agency is also inviting comments on the relationship between copyright law and innovation in the Internet economy.

According to the agency’s website, the initiative seeks to identify policies that will generate benefits for those who own copyrights while maintaining the flow of information online.

Commerce Secretary Gary Locke launched the Internet Policy Task Force in April. The Task Force comprises staff members from the National Telecommunications and Information Administration, the International Trade Administration, the National Institute of Standards and Technology and the Patent and Trademark Office, and is coordinated through Commerce’s Office of Policy and Strategic Planning.

For the link to the Task Force’s website, click here.

MGM Lenders to Vote on Streamlined Bankruptcy Plan

Metro-Goldwyn-Mayer Inc. began soliciting votes from lenders for a streamlined bankruptcy plan that would turn over management of the struggling film studio to Spyglass Entertainment.

Creditors would exchange more than $4 billion in debt for about 95 percent of the equity when MGM emerges from bankruptcy, the Los Angeles-based company said yesterday in a statement. Spyglass and its affiliates would get about 5 percent of the equity in exchange for some assets.

Spyglass Entertainment Co-Chairmen Gary Barber and Roger Birnbaum, who produced the supernatural thriller “The Sixth Sense” and “Seabiscuit,” previously signed a non-binding letter of intent to operate the studio and swap the rights to their film library for a stake in MGM, people with knowledge of the situation said.

MGM will seek bankruptcy court approval for the two men to assume the top management roles at the studio. Votes on the proposal are due by Oct. 22, the company said. Voting is limited to holders of secured debt as of Oct. 4 under MGM’s April 8, 2005, credit agreement, the company said.

Trade Secrets

Bank of America Sues Ex-Programmer for Stealing Files

Bank of America Corp. sued a former employee, claiming he stole 21 confidential files that included profit-and-loss figures, current securities trading positions and company risk assessments.

Rao Chalasani, a computer programmer, e-mailed the files to himself the night before the company was to announce it was firing 400 people, including him, Bank of America said in a complaint filed in federal court in Manhattan today. Chalasani worked in New York for its global markets portfolio management group, according to the bank.

“It appears that defendant stole key documents from the company with the intent of causing harm to Bank of America’s business and reputation,” the bank said.

Bank of America is seeking a court order requiring Chalasani to return the files, plus unspecified damages.

Chalasani didn’t immediately return a voice-mail message left at his home in New Jersey.

On Sept. 30, as part of a security review of large files sent by employees outside the company, Bank of America discovered that on Sept. 20 at 9:32 p.m., the night before the firings were to be announced, Chalasani sent the 21 files from his company e-mail address to a personal address, the bank claimed.

Bank of America said Chalasani was told on Sept. 22 that he was to be fired. He was being considered for a position with a different department, Chalasani was told, although it wasn’t certain he’d get the job, Bank of America said in the complaint.

The case is Banc of America Securities LLC v. Chalasani, 1:10-CV-7681, U.S. District Court, Southern District of New York (Manhattan).

To contact the reporter on this story: Ellen Rosen in New York at erosen14@bloomberg.net

To contact the editor responsible for this story: David E. Rovella at drovella@bloomberg.net.

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