Freescale, MedCo, Columbia: Intellectual Property

Freescale Semiconductor Inc., the chipmaker planning a $1.15 billion share sale, settled patent fights with Panasonic Corp. over integrated circuit chips.

Two cases before the U.S. International Trade Commission in Washington should be dismissed because a settlement has been reached, the companies said in joint filings to the agency on Feb. 11. Additional information wasn’t made public.

Each company had made patent-infringement claims against the other, with a trial on Panasonic’s claims scheduled to have begun Feb. 14 before the ITC in Washington.

Freescale, bought out in 2006 by a group led by Blackstone Group LP, TPG Inc. and Carlyle Group, said last week it plans to raise $1.15 billion in a public offering. The initial share sale would be the biggest by a U.S. technology company since Google Inc. in 2004.

Panasonic, the world’s largest maker of plasma televisions, was seeking to bar imports of Freescale chips into the U.S. Freescale, the largest supplier of chips to the U.S. automobile industry and a maker of semiconductors used in phone networks and consumer devices, was asking the ITC to block imports of Panasonic televisions, Blu-ray video players and cameras.

The dispute began when Osaka, Japan-based Panasonic and Austin, Texas-based Freescale failed to reach a cross-licensing agreement after three years of talks, the companies have said. An earlier agreement ended in 2007.

“There are still some aspects of the matter that remain unresolved, so Panasonic declines to comment,” Jim Reilly, a Panasonic spokesman, said in an e-mail. Officials with Freescale didn’t immediately return messages seeking comment.

The Freescale complaint also included Funai Electric Co., maker of Magnavox and Sylvania televisions, and retailers Wal- Mart Stores Inc. and Best Buy Co. A trial related to Funai TVs and media players that don’t use Panasonic chips and the retailers was held last week.

The Panasonic case is In the Matter of Large Scale Integrated Circuit Semiconductor Chips, 337-716 and the earlier case is In the Matter of Integrated Circuits, Chipsets and Products Containing Same including Televisions, Media Players and Cameras, 337-709, both U.S. International Trade Commission (Washington).

MedCo, WilmerHale Reach Accord Over Angiomax Patent Extension

Medicines Co. reached a settlement valued at as much as $232 million with law firm WilmerHale LLP over the company’s Angiomax anti-coagulant drug.

The U.S. Patent and Trademark Office refused to extend the drug’s patent, 5,196,404, because the application for the extension “was not timely filed,” Parsippany, New Jersey-based Medicines Co. said in a statement.

WilmerHale’s insurers will pay Medicines Co. $18 million up front. The remaining $214 million is for damages should a generic version of Angiomax be sold in the U.S. before June 15, 2015, Medicines Co. said.

Of that amount, about $99 million would be paid by the firm’s insurers and the remaining $115 million by WilmerHale, after the insurance payments are exhausted. The settlement limits the Boston-based firm’s payout to $2.88 million a quarter.

In August, a federal court in Alexandria, Virginia, ordered the patent office to grant a one-year extension on the patent. U.S. District Judge Claude Hilton said the agency misinterpreted federal law in calculating the deadline. The government declined to appeal that ruling.

In its statement, Medicines Co. said WilmerHale stood by the company “in an honorable and exemplary way.” The firm didn’t respond immediately to an e-mailed request for comment.

The patent-extension case is Medicines Co. v. Kappos, 1:10- cv-00286-CMH-JFA, U.S. District Court, Eastern District of Virginia (Alexandria).

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Trademark

Columbia Seeks Non-Infringement Declaration Over Sock Design

Columbia Sportswear Co., the maker of Pacific Trail outdoor clothing, asked a court to declare it isn’t infringing a trademark of Goldtoemoretz LLC.

According to the complaint filed Feb. 11 in federal court in Portland, Oregon, the dispute involves Goldtoemoretz’s three chevrons mark. Closely held Goldtoemoretz, based in Newton, North Carolina, uses the mark for socks and clothing.

Columbia, based in Portland, said it received a cease-and- desist notice from the North Carolina company on Jan. 15, objecting to women’s hiking socks bearing an ornamental design featuring “three equally space inverted triangles inside a dark rectangular border.”

The two companies exchanged e-mails and Columbia said it offered to quit selling the socks once its inventory was depleted. Goldtoemoretz instead demanded an immediate end to the sale of the objectionable socks and sought information about Columbia’s sales volume, according to court papers.

Columbia said it filed the suit “in an effort to remove the cloud” that the North Carolina company’s “threats have cast over Columbia’s business operations.”

The use of the three triangles in the sock design “is mere ornamentation that serves no source identifying purpose,” Columbia said. The company said it doesn’t intend for the design to function as a trademark and has no intention of creating customer confusion.

Goldtoemoretz is represented by Larry C. Jones of Atlanta’s Alston & Bird LLP. In an e-mail, Jones said that Columbia’s lack of intent “is not a defense to trademark infringement.”

Instead of “cooperatively” providing information about sales of its infringing products, “Columbia decided instead to file a lawsuit in its hometown,” Jones said. The validity of the three chevron mark has been successfully tested in litigation before, and “Goldtoemoretz will not tolerate its infringement,” he said.

Columbia asked the court to declare it isn’t infringing and to award litigation costs and attorney fees.

The Oregon company is represented by Michael A. Cohen and Matthew R. Wilmot of Portland’s Schwabe Williamson & Wyatt PC.

The case is Columbia Sportswear Co. v. Goldtoemoretz LLC, 3:11-cv-00181-MO, U.S. District Court, District of Oregon (Portland).

For more trademark news, click here.

Copyright

Electronic Arts, Ex-Athletes Fight Over Images in Games

Electronic Arts Inc., publisher of the “Madden NFL” and “NCAA Football” video games, asked a U.S. appeals court to overrule a judge who refused to throw out a lawsuit over the use of an ex-college player’s likeness.

Electronic Arts argues that, under the First Amendment of the U.S. Constitution, it doesn’t need permission for the alleged use of former Arizona State University quarterback Sam Keller’s likeness if it makes a product with enough creative elements to make it more than just a depiction of a celebrity.

A three-judge panel of the U.S. Court of Appeals heard arguments yesterday in Pasadena, California, on Keller’s suit and a related case brought by actor and former National Football League player Jim Brown, who is appealing the dismissal of claims he brought over use of his likeness in “Madden NFL.”

U.S. District Judge Claudia Wilken in Oakland, California, last year refused to dismiss Keller’s lawsuit.

Electronic Arts, based in Redwood City, California, argues that Wilken incorrectly applied a test of whether the alleged use of the likeness was “transformative,” which would have given the company constitutional protection, by looking only at Keller’s likeness rather than “NCAA Football” as a whole.

Movie studios, represented by the Motion Picture Association of America, and newspaper publishers have filed briefs with the appeals court in support of Electronic Arts. Labor unions and Hollywood guilds filed a brief in support of the former athletes.

Keller sued Electronic Arts, the second-largest U.S. video- game publisher, and the National Collegiate Athletic Association in 2009. He sought to represent other NCAA athletes in a class- action lawsuit. His case has been consolidated with similar ones brought by other former student football and basketball players.

He seeks to recoup profits from the games for the players and seizure of games that infringe athletes’ rights.

Brown, a former Cleveland Browns running back, also sued Electronic Arts in 2009. He accused the company of false endorsement based on unauthorized use of his likeness in “Madden NFL.” U.S. District Judge Florence-Marie Cooper in Los Angeles agreed with Electronic Arts that its alleged use of Brown’s likeness was protected by the First Amendment.

Brown said in his appeals court filing that Cooper incorrectly relied on a case that actress Ginger Rogers lost when she sued for false endorsement over the title of Federico Fellini’s film “Ginger and Fred.”

That case established the so-called Rogers test to consider whether public interest in avoiding consumer confusion outweighs its interest in free expression, according to Cooper’s ruling.

The Rogers case doesn’t apply because it pertained to the title of a movie that wasn’t about the actress but about two fictional Italian dancers, Brown said.

Kelli Sager, a lawyer representing Electronic Arts, said at yesterday’s hearing that the Rogers test should also be applied to the Keller case to determine whether the alleged use of his likeness is protected by the First Amendment.

“It’s like apples and oranges to try to compare Electronic Arts’ video games with placing someone’s image on a T-shirt or a coffee mug,” Sager said.

The cases are Brown v. Electronic Arts, 09-56675, and Keller v. Electronic Arts, 10-15397, U.S. Court of Appeals for the Ninth Circuit.

Ontel, CJ Products Sue Plushez Over ‘Pillow Pets’ Copyrights

Ontel Products Corp., known for its range of “As Seen On TV” products, and CJ Products LLC of Oceanside, California, sued a maker of plush animal toys for copyright infringement.

Snuggly Plushez LLC of Valley Cottage, New York, is accused of selling knockoffs of CJ’s “Pillow Pets” line of plush toy animals. According to the complaint filed Feb. 14 in federal court in Brooklyn, New York, Ontel is the exclusive licensee of CJ’s Pillow Pets line.

CJ said it has spent $1 million a month since March 2010 advertising its Pillow Pets, and that they have won many awards as high-quality toys.

A line of products “nearly identical” to the CJ Pillow Pets is sold by Snuggly Plushez, according to court papers. The products, also sold as Pillow Pets, infringe copyrights, trademarks and trade dress, Ontel and CJ claim.

The knockoffs are made without the consent of either Ontel or CJ, they said in their court papers. The companies claimed the public is confused and that the New York company has “unfairly profited” from its alleged infringement.

CJ and its licensee asked the court for an order barring further infringement of the copyrights and other intellectual property, and for awards of money damages, attorney fees and litigation costs. Additionally, they asked for awards of Plushez’s profits attributable to the alleged infringement, and for extra damages to punish Plushez for its actions.

Ontel and CJ are represented by Jason M. Drangel, Robert L. Epstein and William C. Wright of New York’s Epstein Drangel LLP.

Plushez didn’t respond immediately to an e-mail seeking comment on the litigation.

The case is CJ Products LLC v. Snuggly Plushez LLC, 1:11- cv-00715-RRM-SMG, U.S. District Court, Eastern District of New York (Brooklyn).

For more copyright news, click here.

Trade Secrets/Industrial Espionage

Coca-Cola Secret Formula Revealed, According to NPR Program

National Public Radio says its “This American Life” program revealed Feb. 12 what has been regarded as one of the most closely held trade secrets of all time, the formula for Coca-Cola Co.’s Coca-Cola.

In a news story posted on the NPR website yesterday, the formula’s ingredients were listed. In addition to sugar, water and extract of coca, they included a number of fruit and spice oils, such as lemon oil, nutmeg oil, coriander oil and neroli oil, which is produced by the flower of a type of orange tree.

Mark Pendergrast, author of “For God, Country and Coca- Cola,” a book about the Atlanta-based company, said the recipe listed by the radio program is the same as one he saw in the formula book belonging to Dr. John Pemberton, Coca-Cola’s inventor.

Pendergrast said that the formula “is not exactly the same formula that is used for Coca-Cola today,” and that one with “even better measurements” was published in the Atlanta Journal-Constitution in 1979.

Once a trade secret has been revealed, it no longer has protected status. Coca-Cola said in an e-mailed statement that “the ingredients used in our beverages are listed on the product labels and many third parties -- including ‘This American Life’ -- have tried over time to crack the secret formula of Coca-Cola. Try as they might to crack that formula, there truly is only one ‘real thing.’”

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: John Pickering at rvanvoris@bloomberg.net.

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