Apple, Costco, ‘Toxic People’: Intellectual Property

Paul G. Allen, a Microsoft Corp. co- founder who was once the second-richest American, was told his patent-infringement suit against 11 companies including Google Inc. and Apple Inc. can’t go forward.

U.S. District Judge Marsha J. Pechman said Allen didn’t provide enough details in his court filings to give rise to infringement allegations. She dismissed the case Dec. 10 and gave Allen until Dec. 28 to come back to court and state his claims with more specificity.

Allen, 57, co-founded Microsoft, the world’s largest software maker, with Bill Gates in 1975 and was once the second- richest American behind Gates, according to Forbes magazine. He now runs Vulcan Inc., a firm he uses to invest in more than 50 companies in the cable, television, telecommunications, sports and biotech industries.

Interval Licensing LLC, a business Allen controls, sued EBay Inc., AOL Inc., Facebook Inc., Netflix Inc., Office Depot Inc., OfficeMax Inc., Staples Inc., Yahoo! Inc. and Google’s YouTube for infringing patents for online-shopping technology. In the complaint filed in federal court in Seattle Aug. 27, Interval Licensing asked for an order to block further use of the inventions and order unspecified cash compensation.

Interval Licensing owns the patents of a defunct computer- science and communications research business Allen and David Liddle founded in 1992, according to a statement from the Seattle-based company. The four patents cited in the lawsuit are primarily common electronic-commerce applications for displaying and categorizing product information.

In her Dec. 10 order, Judge Pechman said Allen failed to say which of the various defendants’ products or devices infringe the disputed patents. She said the vagueness of Allen’s filing left the court and the defendants “to guess what devices infringe.” The claims were “too generic” and were “little more than labels and conclusions.”

Were Allen unrepresented by counsel, the judge said the court might have been more deferential to the vague claims. “Here plaintiff is represented by counsel and no deferential standard applies,” she said. The judge also demanded “greater factual detail as to the conduct or devices.”

Allen’s company is represented by Justin A. Nelson and Max L. Tribble Jr. from Houston’s Susman Godfrey LLP., and Michael F. Heim and Nathan J. Davis from Heim, Payne & Chorush LLP, also of Houston.

The case is Interval Licensing LLC v. AOL Inc., 2:10-cv- 01385-MJP, U.S. District Court, Western District of Washington (Seattle).

For more patent news, click here.

Trademark

Apple Seeks U.S. Trademark Registration for ‘Retina’

Apple Inc., maker of the iPad and iPhone, filed two applications to register “retina” as a trademark, according to the database of the U.S. Patent and Trademark Office.

The two applications filed by the Cupertino, California- based company are for the use of the term with electronic hand- held game units -- other than those for use with an external display screen or a television receiver -- and for computers and mobile electronic devices.

There are already several registered U.S. trademarks for the term. One, belonging to the Ophthalmic Communications Society, is for publications in the field of ophthalmology, including online editions.

Another is for musical sound recordings, including those that are downloadable. That registration belongs to a John E. Christgau of Novato, California.

ECompany LLC of Corona Del Mar, California, registered the “retinal” mark for computer software and computer software design development.

For more trademark news, click here.

Copyright

U.S. Supreme Court Divides in Costco Gray Market Case

The U.S. Supreme Court divided evenly in a clash over the multibillion-dollar “gray market,” leaving intact a ruling that lets manufacturers use copyright laws to keep some products out of U.S. discount stores.

The 4-4 high court split, which doesn’t set a nationwide precedent, upholds a federal appeals court decision favoring Swatch Group AG’s Omega unit in a dispute with Costco Wholesale Corp. over discounted Seamaster watches.

Retailers had sought to overturn the appeals court ruling because it exposes them to lawsuits if they try to exploit worldwide price differences on foreign-made products by importing them through unauthorized channels. In Costco’s case, the largest U.S. warehouse club acquired the Swiss-made watches at a discount and then sold them at $1,200, or $700 below Omega’s suggested retail price.

Yesterday’s high court action means that “if someone is selling goods 30 percent cheaper in some other country, any retailer who wants to pass that cost benefit on to the consumer would likely be denied,” said John Mitchell, a Washington lawyer who filed a brief backing Costco on behalf of trade groups that represent video-game, home-video and music retailers.

Whether that proves to be a permanent result may depend on Justice Elena Kagan, who stands to be the deciding vote should the justices revisit the issue in a later case.

Kagan didn’t take part in today’s high court action because she had participated in the case as President Barack Obama’s solicitor general. In that capacity, she filed a brief urging the court not to hear Costco’s appeal, arguing that the San Francisco-based 9th U.S. Circuit Court of Appeals had reached the right conclusion.

Copyright owners have reason to be “guardedly optimistic that if and when this issue did make it back to the Supreme Court, you’d win it,” said Charles Sims, a New York lawyer who filed a brief supporting Omega on behalf of the publishing industry.

The high court, as is its practice in evenly divided rulings, didn’t reveal which justices voted on which side of the issue.

The gray market, also known as parallel sales, costs manufacturers as much as $63 billion in sales a year, according to a Deloitte LLP analysis conducted for Bloomberg last year. A manufacturer with $10 billion in sales can lose as much as $450 million, Deloitte found.

The case turned on the scope of the first-sale doctrine, which says a copyright holder can profit only from the original sale of a product. In 1998, the Supreme Court unanimously ruled against copyright holders by saying the doctrine applies to U.S.-made products sold overseas. The court said copyright holders can’t block those goods from being brought back into the U.S. through unauthorized channels.

The latest question was whether that same reasoning applies to goods manufactured abroad, including Omega’s Seamaster watches, which carry a copyrighted logo on the back. The 9th Circuit sided with Omega on the issue, ruling that the first- sale doctrine doesn’t apply to foreign-made goods.

The case now returns to a federal trial court, where Costco will have a chance to mount additional arguments, including its contention that Omega engaged in so-called copyright misuse.

Roy Englert, who argued the case at the Supreme Court for Costco, and Aaron Panner, who argued for Omega, declined to make any immediate comment. Richard Galanti, Costco’s chief financial officer, didn’t immediately return a phone call and e-mail seeking comment.

Costco had support in the case from EBay Inc., Google Inc., Amazon.com Inc., GameStop Corp., Target Corp., Intel Corp., a consumer-advocacy group and six library associations. Omega had backing from the film and music industries and office equipment makers including Seiko Epson Corp.

The case is Costco v. Omega, 08-1423.

Lillian Glass Wins Infringement Case Against Arizona Author

Self-help author Lillian Glass won a copyright infringement award from a federal jury in Los Angeles.

According to a Dec. 9 court filing, the jury awarded her $31,000 for the unauthorized use of content from her work.

Glass sued Marsha Petrie Sue of Scottsdale, Arizona, in federal court in Los Angeles in November 2009, alleging the Arizona writer’s “Toxic People” contained verbatim content from her 1992 book “He Said, She Said.”

She said she became aware of the infringement when she found Sue’s book “Toxic People: Decontaminate Difficult People at Work.” Glass wrote “Toxic People: 10 Ways to Deal with People Who Make Your Life Miserable” in 1995.

In her complaint, Los Angeles-based Glass also alleged Sue infringed the “Toxic People” trademark.

Co-defendant with Sue was the Hoboken, New Jersey-based book publisher John Wiley & Sons Inc., which was dismissed from the case Dec. 2.

Glass was represented by Mark Karish and Alfred Eric Bjurgum of Karish & Bjorgum PC of Los Angeles.

The case is Dr. Lillian Glass v. Marsha Petrie Sue, 2:09- cv-08570-RGKL-SH, U.S. District Court, Central District of California (Los Angeles).

Myriad Group Sues Oracle America Over Java Licensing

Myriad Group AG, a Swiss software developer, sued an Oracle Corp. unit in the U.S. for at least $120 million in restitution for allegedly charging excessive license fees for the Java programming language.

Oracle America, known as Sun Microsystems before its acquisition in January by the Redwood City, California-based company, developed Java and agreed to license it on fair terms to industry partners, lawyers for Myriad said in court papers filed Dec. 10 in federal court in Wilmington, Delaware.

The company “has consistently failed to honor those licenses” and has made Myriad pay for the technology on “unfair, unreasonable and discriminatory royalty-based terms,” according to the complaint.

Java can be used on hundreds of millions of devices, including personal computers, consumer electronics and industrial robots, Myriad said in the lawsuit.

Myriad, based in Duebendorf, Switzerland, reported about $105.3 million in revenue last year, according to company filings. Oracle reported $26.8 billion in sales last fiscal year.

Deborah Hellinger, an Oracle spokeswoman, didn’t immediately return voice-mail and e-mail messages seeking comment today.

The case is Myriad Group AG v. Oracle America Inc., 10cv1087, U.S. District Court, District of Delaware (Wilmington).

For more copyright news, click here.

IP Moves

Honigman Miller Expands IP Practice With Two From Butzel Long

Honigman Miller Schwartz & Cohn LLP hired two IP litigators from Butzel Long, according to a firm statement. Both firms are based in Detroit.

The two new hires are J. Michael Huget and Deborah Swedlow.

Huget has done patent, trademark and copyright litigation for clients in the publishing, advertising, automotive, technology, media, entertainment and pharmaceutical industries, as well as representing some colleges and universities.

He has an undergraduate degree from the University of Michigan and a law degree from Michigan State University.

Swedlow has also represented clients in a wide range of intellectual property disputes as well as in media and entertainment-issue cases.

She has an undergraduate degree and a master’s degree from Bryn Mawr College and a law degree from Northeastern University.

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

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

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