Nortel, Starbucks, Sprinkles, Google: Intellectual Property

The Canadian government won’t review the sale of Nortel Networks Corp. patents under the country’s foreign-investment law, clearing the way for a group led by Apple Inc. (AAPL) to complete the $4.5-billion deal, Industry Minister Christian Paradis said yesterday.

“Based on the information provided by the investor and Nortel’s 2010 audited financial statements, the acquisition of the Nortel patents is not subject to review for net benefit under the Act,” Paradis said in an e-mailed statement.

Paradis had asked his department to determine whether the country’s foreign-investment review process applied to the sale of about 6,000 patents and patent applications, which cover wireless, Internet search and social-networking technologies.

Nortel said June 30 it agreed to sell the patent portfolio to a group composed of Apple, Research In Motion Ltd. (RIM), EMC Corp., Ericsson AB, Microsoft Corp. and Sony Corp. (6758)

Under Canadian law, foreign acquisitions of companies with assets worth more than C$312 million ($328 million) are reviewed by the federal government to determine whether the transaction would give a “net benefit” to the country.

In November, the Canadian government rejected a proposed takeover of fertilizer maker Potash Corp. of Saskatchewan Inc. by Australia’s BHP Billiton Ltd. The government also blocked a 2008 bid by Minneapolis-based Alliant Techsystems Inc. to acquire the aerospace division of Vancouver-based MacDonald, Dettwiler & Associates Ltd.

The two decisions are the only times Canada has blocked a foreign takeover bid since the Investment Canada Act came into force in 1985.

Boehringer, Bristol-Myers Negotiating With AIDS Patent Pool

Boehringer Ingelheim GmbH and Bristol-Myers Squibb Co. (BMY) have entered into negotiations with the Medicines Patent Pool for patents on drugs to treat people with AIDS in developing nations, according to a statement from the patent pool.

Established in 2009 by UNITAID to increase access to affordable drugs to treat AIDS in developing nations, the patent pool completed its first licensing agreement with a leading pharmaceutical company earlier this month.

Gilead Sciences Inc. (GILD) of Foster City, California, agreed July 12 to allow sales of generic versions of four AIDS treatments. That deal permits copies of Gilead’s Viread and Emtriva medicines in 111 countries, while two experimental drugs, cobicistat and elvitegravir, will be available in 102 and 99 nations, respectively, after they’re approved by regulators.

Patent pool officials are in talks with five additional entities about entry into the pool, according to the statement.

For more patent news, click here.

Trademark

Starbucks Seeks Declaration It Doesn’t Infringe SDN Trademarks

Starbucks Corp. (SBUX), the Seattle-based coffee-house chain, sued a South Dakota information-services company in a trademark dispute.

South Dakota Network LLC, which does business as SDN Communications, is owned by 17 telephone companies in South Dakota. The company offers business services on its fiber-optic network in 19 western states and is a telecommunications provider in 36 states, according to its website.

In the complaint filed in federal court in Omaha, Nebraska, Starbucks says the Sioux Falls, South Dakota-based company objected to Starbucks’ use of the acronym “SDN” to refer to the Starbucks Digital Network.

This network is accessible exclusively to Starbucks in- store customers who connect to free wireless access to the Internet provided by AT&T Inc. (T), Starbucks said in its pleadings. The network contains content provided free to Starbucks customers through the coffee chain’s partnership with Yahoo! Inc., the company says.

Even though Starbucks asserted that it uses “SDN” only in association with its Starbucks Digital Network, the company received several cease-and-desist letters from the South Dakota company. The letters accused the Seattle company of willful infringement of SDN Communications’ trademarks, according to court papers.

Starbucks said that negotiations between the two companies have come to naught and the allegations that it’s infringing “casts a cloud over Starbucks’ ongoing use and development of the Starbucks Digital Network.”

It asked the court to declare that it’s not infringing, and to order the South Dakota company to quit threatening to file an infringement suit. The company also requested litigation costs and attorney fees.

SDN Communications filed a request July 18 to extend the time for it to answer the complaint to mid-August.

Starbucks is represented by Patrick C. Stephenson, John P. Passarelli and Douglas W. Peters of Kutak Rock LLP of Omaha. SDN Communications’ lawyers are Bruce D. Vosburg and Gerald L. Friedrichsen of Omaha’s Fitzgerald, Schorr, Barmettler & Brennan PC LLO.

The case is Starbucks Corp. v. South Dakota Network LLC, 8:11-cv-00237, U.S. District Court, District of Nebraska (Omaha).

Sprinkles Cupcakes Frosted Over Pink Sprinkles’ Trademark Use

Sprinkles Cupcakes Inc., the Beverly Hills, California- based chain, sued a Fairfield, Connecticut, competitor for trademark infringement.

The California company, which has been featured on “The Oprah Winfrey Show,” “The Martha Stewart Show,” and “Entertainment Tonight,” operates in California, New York Washington, D.C., Illinois, Texas and Arizona. Its pastry chef and founder Candace Nelson is one of the judges on Scripps Networks Interactive’s Food Network’s “Cupcake Wars” reality television show.

Sprinkles sued Pink Sprinkles LLC in federal court in New Haven, Connecticut, on July 15, claiming to be harmed by the Connecticut baker’s name and Internet domain name. The public is likely to be confused by the similarity of the two companies’ names, it said, and accused Pink Sprinkles of trying to hitchhike on goodwill and reputation belonging to the California company.

In addition to asking for a court order barring the use of “Pink Sprinkles” and related names, Sprinkles asked to be transferred the Connecticut company’s Internet domain name.

It also seeks an order for the destruction of all infringing products and promotional materials, and for awards of money damages, attorney fees and litigation costs.

Pink Sprinkles didn’t respond immediately to an e-mailed request for comment.

Sprinkles is represented by Steven M. Coyle of Cantor Colburn LLP of Hartford, and John L. Slafsky and Hollis Beth Hire of Wilson Sonsini Goodrich & Rosati PC of Palo Alto, California.

The case is Sprinkles Cupcakes Inc., v. Pink Sprinkles LLC, 3:11-cv-01117-JCH, U.S. District Court, District of Connecticut (New Haven).

For more trademark news, click here.

Copyright

Google, Authors Get More Time to Discuss Scanning Settlement

Google Inc. (GOOG) and a group of publishers and authors got more time to discuss a possible settlement of a lawsuit over the search-engine company’s digital reproduction of books.

“We are not there yet,” Michael Boni, a lawyer for the authors, told U.S. Circuit Judge Denny Chin in Manhattan yesterday. “They are very complicated, complex issues, requiring us to delve into them in the dog days of summer.”

Google was sued in 2005 by authors and publishers who said the company was infringing their copyrights on a massive scale by digitizing books and allowing “snippets” of them to be seen online. Chin objected to an earlier, $125 million settlement, saying it would be unfair to authors.

Chin, who kept the case after he was elevated to the appeals court bench from the U.S. district court in April 2010, set a new hearing for Sept. 15.

“We’ve been working closely with the authors and publishers to explore a number of options,” Gabriel Stricker, a spokesman for Mountain View, California-based Google, told reporters after the hearing yesterday. She said “we asked the court for more time to discuss these options.”

The case is Authors Guild v. Google Inc., 05-CV-8136, U.S. District Court, Southern District of New York (Manhattan).

Baidu to Pay Labels for Beyonce, Lady Gaga Music in China

Baidu Inc., owner of China’s most popular Internet-search engine, agreed to pay record labels to offer songs by artists including Beyonce, Lady Gaga and Frank Sinatra, ending a six- year dispute over piracy.

Sony Corp., Universal Music Group and Warner Music Group Corp. (WMG) will receive undisclosed fees for allowing their content to be downloaded for free to users of Baidu’s Ting and MP3 services, the Chinese search-engine operator said in a statement yesterday. The four companies will end all outstanding litigation, according to the statement.

The deal paves the way for the Chinese company to ease concerns that led the U.S. Trade Representative to call Baidu a “notorious market” for helping sustain piracy. For the record labels, the accord allows them to capitalize on the world’s biggest Internet market, where almost all music downloads are estimated to be illegal.

“China has a long way to go yet, but the deal serves as a good baseline to work from,” said Ed Peto, managing director at Outdustry, which represents western music companies in China. “Baidu will need to show sustained commitment over the coming few years before this deal can be seen as a proper watershed.”

The Beijing-based company, which handles about 80 percent of the country’s Web-search traffic, expects the agreement to lead to a “precipitous drop” in the piracy rate, spokesman Kaiser Kuo said.

“This is a mutually profitable deal,” Kuo said by phone yesterday. Record companies will benefit from sales of advertising linked to their music, in addition to license fees, he said.

China has a music piracy rate of “virtually 100 percent,” the International Federation of the Phonographic Industry said in its 2011 report released in January.

One-Stop China -- a venture between Universal Music, Warner Music and Sony Music -- will license its catalogs and new releases, including songs in Mandarin and Cantonese, to Baidu, according to the statement.

Vivendi SA (VIV)’s Universal, Sony and Warner Music previously lost rulings in Chinese courts when seeking damages from Baidu for copyright infringement.

Baidu was named in the U.S. Trade Representative’s “notorious markets” list published in March for helping sustain piracy and counterfeiting. Google Inc., Baidu’s closest competitor in China’s search-engine market, started a music service in the country in 2009.

Baidu “won’t lose money” from the agreement with One-Stop China, as sales of advertising will more than offset the cost of license fees, Kuo said.

Google, owner of the world’s most-popular search-engine, accounted for 18.9 percent of revenue generated in China’s search-engine market during the second quarter, declining from 19.2 percent three months earlier, according to research firm Analysys International. Baidu’s market share increased to 75.9 percent from 75.8 percent, the researcher said.

Baidu is adding services and bolstering partnerships with technology companies including Microsoft Corp. (MSFT) to lure Web users in China from domestic rivals Tencent Holdings Ltd. (700) and Alibaba Group Holding Ltd.

For more copyright news, click here.

IP Moves

Knobbe Martens Hires Scott Smith for Silicon Valley Practice

Knobbe Martens Olson & Bear LLP hired Scott Smith for its Silicon Valley IP practice, the Irvine, California-based firm said in a statement.

Smith, who does patent work, previously served as vice president for intellectual property and legal affairs at Polmonx Corp. of Redwood City, California, a maker of medical devices.

He previously did in-house IP work at Align Technology Inc. (ALGN), Baxano Inc. and Acclarent Inc. before it was acquired by Johnson & Johnson (JNJ) in 2009. Before that, he practiced at the San Francisco firm then known as Townsend & Townsend, and at Phoenix’s Snell & Wilmer LLP.

Smith has an undergraduate degree from Northwestern University, a law degree from Ohio State University and a medical degree from the University of Arizona.

Jones Day Brings in Two German IP Lawyers from Hogan Lovells

Jones Day is hiring two intellectual-property specialists in Germany from rival Washington-based firm Hogan Lovells LP, according to a statement.

The new hires are Wolfgang Buchner and Undine von Diemar, both from Hogan Lovells’s office in Munich.

Buchner, a transactional lawyer, has represented clients in the information technology and media sectors.

Von Diemar’s area of expertise is cloud computing, and has advised clients in mergers and acquisitions in the information technology and intellectual property areas.

Clients the lawyers have represented include Texas Instruments Inc. (TXN), SAP AG (SAP), ADVA AG Optical Networking (ADV) and Parametric Technology Inc.

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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