Red Hat, Google, Adidas, PepsiCo: Intellectual Property

The U.K.’s patent system is “broken,” a group of small and medium-sized businesses said in a letter to Prime Minister David Cameron.

The letter, sent May 5, was signed by 32 companies that are members of Small Medium-sized Entity Innovation Alliance. In the letter, the organization said most small businesses in the U.K. “know only too well the failure of the patent system and have given up.”

They claimed that their country offers “no effective means of patent enforcement” in the home country and no assistance for overseas patent enforcement.

They claim that large companies like the patent system “just the way it is” and that they will have more influence in patent reform.

Physicist Stephen Hawking, the director of research at Cambridge University’s Center for Theoretical Cosmology, is the patron of the organization.

A message from Hawking to the organization was posted on the SMEIA website May 5. In that message, Hawking noted that “patent theft is one of the big issues” faced by small companies. He noted that “my illustrious predecessor Galileo Gallilei had his design for a compass stolen by his one-time protégé.”

Hawking said that Galileo described the theft as “worse than murder,” depriving the victim of “honor and merited glory” obtained “from studies, hard work and long vigils.”

Red Hat Chief Says Company Sometimes Pays Instead of Fighting

Red Hat Inc. (RHT)’s Chief Executive Officer James M. Whitehurst told Network World that his Raleigh, North Carolina-based company sometimes settles with patent trolls because it’s not worth the expense to fight what may be invalid patent claims.

Whitehurst said some software patent cases brought in the Eastern District of Texas come before juries that are “not technically savvy” and are so complicated that even he, with a degree in computer science, finds them far over his head, according to Network world.

Whitehurst, an opponent of software patents, told Network World such patents prevent companies from moving into some areas of technology because they’re fearful of litigation and licensing fees.

Some patent claims the company has faced are “ridiculous,” merely covering something that shows up on common websites, Network World reported Whitehurst saying.

For more patent news, click here.

Copyright

Google Loses Copyright Appeal Over Belgian Newspaper Links

Google Inc. (GOOG) lost an attempt to overturn a Belgian ruling that blocked it from publishing links to local newspapers on its online news service.

The Court of Appeal in Brussels on May 5 upheld a 2007 lower court ruling that forced Google to remove links and snippets of articles from French- and German-language Belgian newspapers from Google.com and Google.be. Google, the owner of the world’s most-used search engine, faced a 25,000-euro ($36,300) daily fine for any delay in implementing the judgment.

Copiepresse, the group that filed the suit on behalf of the newspapers, said the snippets generated revenue for the search engines and that publishers should be paid for the content. The publications have a second suit pending in which they seek as much as 49.1 million euros for the period in which their content was visible on Google News.

“This case sets a precedent,” said Flip Petillion, a Brussels-based partner with Washington’s Crowell & Moring LLP, who wasn’t involved with the case. “Google has every interest in taking the debate to the highest level, they have no choice” other than to appeal, he said.

Google said it remains committed to further collaboration with publishers in finding “new ways for them to make money from online news.” Google has the option to appeal the ruling to the Cour de Cassation, Belgium’s highest court.

“We believe Google News to be fully compliant with copyright law and we’ll review the decision to decide our next course of action,” Mountain View, California-based Google said in an e-mailed statement. “We believe that referencing information with short headlines and direct links to the source -- as it is practiced by search engines, Google News and just about everyone on the web -- is not only legal but also encourages web users to read newspapers online.”

Copiepresse said in a statement it is pleased with the decision and “hopes Google will have the intelligence to look for a fair solution to end this situation.”

“This case will have serious consequences to the way information is searched and managed” on the Internet, Erik Valgaeren, a lawyer for Google, told the Court of Appeal at a Feb. 23 hearing. A negative ruling “would put at risk all referencing services, or even cause them to disappear.”

Lime Wire Founder Gorton to Testify on Infringement Damages

Lime Wire LLC founder Mark Gorton is set to testify today in a trial to determine how much he will have to pay the music recording industry for infringing copyrights.

Music labels owned by Warner Music Group Corp. (WMG), Sony Corp. (6758) Vivendi SA (VIV) and Citigroup Inc. are seeking hundreds of millions of dollars from Gorton after U.S. District Judge Kimba Wood ruled last May that Lime Wire induced the infringement of thousands of songs through its peer-to-peer file-sharing software on the Internet. The court ordered Lime Wire to shut its music service last year.

“The harm that Lime Wire has caused is truly staggering,” Glenn Pomerantz, a lawyer representing 13 labels, told a jury of eight women and one man in his opening statement on May 3. “Mark Gorton used other people’s property to make money for himself.”

Pomerantz told the jury the record industry’s revenue fell 52 percent from 2000, the year Lime Wire was founded, to 2010. Gorton’s lawyers will try to show that other factors were responsible for the drop besides peer-to-peer, or P2P, file- sharing.

“The record companies know and have known that their problems started well before Lime Wire,” Joseph Baio, a lawyer representing Lime Wire and Gorton, said in his opening statement to the jury.

Baio cited the record companies’ own past comments that he said showed factors other than file-sharing were more to blame for the plunge in revenue. These included counterfeit and copied CDs, the economic recession, bankruptcies of music wholesalers and retailers, the maturation of the CD market, competition from other forms of entertainment such as video games, and the industry’s own inability to exploit the new technologies.

The record labels haven’t made public how much they’re seeking from Gorton. The companies will try to get statutory damages under federal copyright law for 9,561 recordings released since 1972, according to court papers. If they seek maximum statutory damages of $150,000 for each recording, that could result in a $1.4 billion award. Other damages on pre-1972 recordings will also be sought, the companies said in court filings.

“We will ask you to consider whether Mark Gorton’s state of mind justifies the high end of the range,” Pomerantz said to the jurors.

Baio said the labels deserved far less. Gorton made only about $6 million from the songs the record companies have listed as infringed, the lawyer said. Lime Wire, which provided free software for file sharing, made money by selling a faster, premium version of the program.

The case is Arista Records LLC v. Lime Wire LLC, 06-05936, U.S. District Court, Southern District of New York (Manhattan).

For more copyright news, click here.

Trademark

Adidas Sues Lands’ End, Claims Shoes Infringe 3-Stripe Mark

Adidas AG (ADS), the sportswear company based in Herzogenaurach, Germany, sued Sears Holdings Corp. (SHLD)’s Lands’ End unit for trademark infringement.

The suit, filed May 5 in federal court in Portland, Oregon, alleges that some shoes sold by Lands’ End infringe Adidas’ three-stripe trademark.

The German company said in court papers that Lands’ End “intentionally adopted and used substantially indistinguishable and confusingly similar imitations” of the three-stripe marks on some of its men’s and boys’ shoes.

The public is likely to believe these shoes are “manufactured by, authorized by, or in some manner associated with Adidas,” according to the complaint.

Adidas said it has tried to “resolve this dispute short of litigation” to no effect. The company claims to have suffered “substantial injury” as a result of Lands’ End’s actions.

It asked the court to halt Lands’ End’s use of allegedly infringing marks and for the recall and destruction of all products and promotional material it says infringed.

Additionally, it seeks an award of money damages, and requested that the court triple those to punish Lands’ End for its actions. The company also asked for awards of attorney fees and litigation costs.

Adidas is represented by Stephen M. Feldman of Seattle- based Perkins Coie LLP and R. Charles Henn Jr., Charles H. Hooker III, and Nichole Davis Chollet of Atlanta’s Kilpatrick Townsend & Stockton LLP.

Michele Casper, a Lands’ End spokeswoman, said in an e-mail that her company doesn’t comment on current litigation.

The case is Adidas America Inc., v. Lands’ End Inc., 3:11- cv-00553, U.S. District Court, District of Oregon (Portland).

Coca-Cola Trademark Lawsuit Against PepsiCo Dismissed

Coca-Cola Co. (KO)’s trademark-infringement lawsuit over PepsiCo Inc.’s packaging of a new line of fruit juices was dismissed by a judge after the companies reached a settlement.

U.S. District Judge Sim Lake signed an order dismissing the case after the companies submitted a joint motion seeking to terminate it, according to a May 5 filing in federal court in Houston.

“All matters in dispute in this case have been fully and finally resolved by the parties,” lawyers for both sides said in court papers. Details of their agreement weren’t disclosed.

Coca-Cola, based in Atlanta, sued in October claiming that the new packaging for PepsiCo’s low-calorie Trop50 brand of fruit juices would “likely deceive consumers and dilute the quality” of Coke’s Simply brand of premium juices.

A trial had been set for June. Lake told lawyers for Coca- Cola and Purchase, New York-based PepsiCo in December that they should try to settle the dispute out of court to avoid the expense of trial.

Coca-Cola was represented by Karol A. Kepcharr, Michael Simons, and Steven Mark Zager of Washington’s Akin Gump Strauss Hauer & Feld LLP. PepsiCo’s lawyers were Scott F. Partridge, Paul Reilly, Susan Cannon Kennedy and Timothy Stuart Durst of Houston-based Baker Botts LLP.

The case is Coca-Cola Co. v. PepsiCo Inc., 10-04184, U.S. District Court, Southern District of Texas (Houston.)

Ukraine to Return ‘Magarach’ Mark to Government Institute

Ukraine’s Agrarian Policy and Food Ministry will return to a government institute a wine trademark that had been transferred to ownership of an Estonian company, the KyivPost reported.

The Magarach trademark will be returned to the Magarach Institute for Winegrowing and Winemaking, according to the newspaper.

The KyivPost reported that the Prosecutor’s Office of the Autonomous Republic of Crimea has begun to investigate the former head of the state-run Magarach Agricultural Co. on allegations that he illegally transferred the trademark to a company in Estonia.

The Magarach trademark “is the property of the institute and we will do everything possible to develop it, Mykola Prysiazchniuk, Ukraine’s Agriculture and Food Minister, said and the newspaper reported.

Beer-Drinkers’ Group Seeks Cancellation of DB’s ‘Radler’

A lawyer from New Zealand’s James & Wells IP specialty firm has taken on pro bono representation of an organization of beer drinkers against Singapore’s Asia Pacific Breweries’ DB Breweries unit trademark registration for the term “radler,” that country’s Waikato Times newspaper reported.

The firm’s name partner Ceri Wells is arguing that “radler” is generic for a citrus-flavored beer and that DB is in the wrong for threatening infringement action against Green Man Brewery of Dunedin, New Zealand, for using the term, according to the newspaper.

On behalf of the Society of Beer Advocates, Wells is seeking to have the trademark registration revoked and a declaration the term is generic, the Times reported.

DB has argued that while “radler” may be generic in other countries, the term was not known in New Zealand until the trademark was registered in 2003, according to the Times.

For more trademark news, click here.

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: Michael Hytha at mhytha@bloomberg.net.

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