Microsoft, Mohawk Industries, Nu-Image, ‘Old Spot’: Intellectual Property

The U.S. Supreme Court upheld a patent-infringement verdict that will cost Microsoft Corp. (MSFT) $300 million and already has forced changes in its Word software.

The justices yesterday unanimously rejected calls from Microsoft and its allies, including Apple Inc. and Google Inc. (GOOG), to overturn the award and make some patents more vulnerable to legal challenge.

The ruling is a victory for closely held I4i LP, which claimed in its 2007 lawsuit that its patented technology had been incorporated into Word, the word-processing program used by 500 million people. The award is the largest ever upheld on appeal in a patent case.

Microsoft, which had $5.2 billion in profit in the first quarter of 2011, hasn’t yet paid I4i any damages.

“While the outcome is not what we had hoped for, we will continue to advocate for changes to the law that will prevent abuse of the patent system and protect inventors who hold patents representing true innovation,” said Kevin Kutz, a Microsoft spokesman, in an e-mail.

Microsoft contended that the disputed patent was based on technology already in the marketplace. The question for the Supreme Court was whether, as a lower court concluded, Microsoft needed to make that showing by “clear and convincing” evidence to overcome the longstanding presumption that patents approved by the U.S. Patent and Trademark Office are valid.

Microsoft argued that a less-demanding standard should apply when a jury is presented with evidence about pre-existing technology that the patent examiner didn’t consider.

Writing for the Supreme Court, Justice Sonia Sotomayor said that the clear-and-convincing standard is a decades-old rule that Congress has repeatedly declined to revisit.

“Any recalibration of the standard of proof remains in its hands,” Sotomayor said.

The case is Microsoft v. I4i Limited Partnership, 10-290.

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Apple Seeks Patent on Movie-Finding Application for IPhone

Apple Inc. (AAPL), maker of the iPad and iPhone, applied for a patent on a technology that will make it easier for an iPhone user to find a movie at the right time and place.

Application 20110137690, published in the database of the U.S. Patent and Trademark Office yesterday, covers an application for an electronic device that can search variables before presenting movie information.

The variables include geographic proximity of the theater, the show start time closest to the current time of day, show finish time, and traffic conditions, according to the application. The variables also could be factored into use of the mobile electronic device to buy tickets for the movie or other event.

Apple, based in Cupertino, California, applied for the patent in December 2009. No outside counsel is named in the application.

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Copyright

Mohawk Seeks Declaration of Non-Infringement of Rug Design

Mohawk Industries Inc. (MHK), a rug manufacturer based in Calhoun, Georgia, asked a federal court to declare it isn’t infringing the copyright of a Maine-based design and licensing company.

In the complaint filed June 7 in federal court in Atlanta, Mohawk said it received notice from counsel for Angela Adams Licensing LLC that one of its carpets is “substantially similar” to an Adams design.

Included in the court filing is a letter from Margaret Minister O’Keefe of Portland, Maine’s Pierce Atwood, suggesting that any potential dispute can be resolved amicably.

Mohawk’s response to that letter, also included in the court filing, was sent by Michael D. Hobbs Jr. of Atlanta’s Troutman Sanders LLP. Mohawk “takes Angela Adams’ claims seriously” and carefully analyzed her design and the design of the carpet that allegedly infringes, he said.

He said that the geometric elements in Adams’s design “date back thousands of years and are not original to Angela Adams.” In the 1950s and 1960s, designers “commonly adopted those ancient geometric designs into ‘mod’ mid-century decor, rugs and fabrics.” The Mohawk rug at issue is a “retro” design based on “mid-century elements that have been popular for at least the last ten years,” he said.

Mohawk asked the court to declare that it doesn’t infringe the Adams design, and for awards of attorney fees and litigation costs. It also seeks a declaration that the Adams design “does not contain protectable originality.”

The Georgia is represented in the case by Sara Beth Myers of Nashville, Tennessee’s Riley Warnock & Jacobson Plc.

According to Bloomberg data, Angela Adams Licensing has filed 10 copyright-infringement cases since 2005. Mohawk is one of the defendants in a case filed June 8 in federal court in Portland.

That case is Angela Adams Licensing LLC v. Target Corp., 2:11-cv-00229-DBH, U.S. District Court, District of Maine (Portland). The Atlanta case is Mohawk Industries Inc., v. Angela Adams Licensing LLC, 4:11-cv-00155-HLM, U.S. District Court, Northern District of Georgia (Atlanta).

Nu Image’s Delay in Serving Subpoenas Wins Scolding from Judge

Nu Image Inc., a Los Angeles-based film studio, received a setback in a copyright-infringement case it filed against more than 23,000 unnamed defendants.

In an order issued June 7, a federal judge in Washington scolded the company for failing to serve “not a single subpoena” in the case more than two months after the court granted a request for the subpoenas

Nu Image filed the case Feb. 11, accusing the unnamed defendants of illegally downloading copies of its film “The Expendables” using the BitTorrent file-sharing protocol.

The film company had asked the court for permission to serve subpoenas on Internet service providers, seeking the identities of customers who allegedly did the unauthorized downloading.

U.S. District Judge Robert L. Wilkins wrote that the delay was “inexcusable.” If the studio was seeking information on claims that couldn’t properly be pursued in his court, it was “inappropriate and a waste of scarce judicial resources,” he said.

If his court isn’t the proper venue for the case, then it should either be dismissed or transferred to “any district or division in which it could have been brought,” Wilkins said.

The judge ordered Nu Image to show him why his court was the proper venue to serve all 23,433 defendants. He told the studio it must respond to his order by June 21.

He noted that at a June 2 conference, counsel for Nu Image said the subpoenas hadn’t been served because of issues the judge raised about venue and jurisdiction. Wilkins hadn’t raised those issued until May 25, he said.

Nu Image is represented by Nicholas A. Kurtz and Thomas Mansfield Dunlap of Washington’s Dunlap, Grubb & Weaver PLLC.

The case is Nu Image Inc., v. Does 1-23,322, U.S. District Court for the District of Columbia (Washington).

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Trademark

U.K. Swine Breeders Win Meatpacker’s Trademark Cancellation

Axle Associates, a Selkirkshire, U.K.-based meat-marketing company, lost its “Bramley Old Spot Pork” trademark following an action by that country’s Intellectual Property Office, the BBC reported.

The Gloucestershire Old Spots Pig Breeders’ Club argued for the invalidation of the trademark, claiming the meat Axle used for the product didn’t come from purebred swine, according to the BBC.

Gloucestershire Old Spots was added to the European Union’s list of protected agricultural names last year, according to the BBC.

Jim Ironside, director of Axle Associates, criticized the IP Office’s decision, telling the BBC that the country’s trademark law is inconsistent.

‘Pink Lady’ Growers Seek Consumer Reports of Bogus Labels

An association of growers of the Pink Lady variety of apples is developing a program to encourage consumers to report bogus stickers on apples that aren’t of that variety, according to the produce industry publication the Packer.

Pink Lady apples are of the “cripps pink” variety originating in Australia, and if the apple doesn’t bear a label with the Pink Lady trademark, “it doesn’t come with that trademark protection,” Alan Taylor, Pink Lady America LLC marketing director, told the Packer.

The Yakima, Washington-based trade group is using the social media sites run by Facebook Inc. and Twitter Inc. to promote the trademark and explain the quality conditions it represented, the Packer reported.

For more trademark news, click here.

IP Moves

Greenblum & Bernstein Hires Former Cargill IP Counsel

Greenblum & Bernstein LLP hired Harry Gwinnell, the Reston, Virginia-based intellectual-property specialty firm said in a statement.

Gwinnell joins from Cargill Inc. in Minneapolis, where he was vice president and chief IP counsel. He previously practiced IP law in-house at Eastman Chemical Co. (EMN) of Kingsport, Tennessee; Boston-based Cabot Corp. (CBT) and United Technologies Corp. (UTX) of Hartford, Connecticut. He also has served as a patent examiner with the U.S. Patent and Trademark Office.

He has an undergraduate degree in chemistry from Villanova University and a law degree from Catholic University of America.

Hiscock & Barclay Hires Patent Lawyers From Marjama Muldoon

Hiscock & Barclay LLP hired two patent counsel, Denis J. Sullivan and Michael J. Wasco, from defunct Marjama Muldoon Blasiak & Sullivan LLP, the Syracuse, New York-based firm said in a statement.

Sullivan, who also previously practiced at Chicago’s Kirkland & Ellis LLP, does patent litigation in federal district courts and before the U.S. International Trade Commission.

Before he became a lawyer, he was an electrical engineer and project manager in the Aviation Design Division of the Port Authority of New York and New Jersey. He has an undergraduate degree in electrical engineering from Manhattan College and a law degree from New York Law School.

Wasco, who does patent and trademark-acquisition work, has represented clients in the mechanical, electro-mechanical and electrical areas. He also has handled trademark disputes before the Trademark Trial and Appeal Board of the U.S. Patent and Trademark Office.

He has both an undergraduate degree and a master’s degree in mechanical engineering from Clarkson University and a law degree from the Franklin Pierce Law Center.

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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