Zynga, Abercrombie & Fitch, Dollywood, N.Y. Times: Intellectual Property

Zynga Inc., the largest developer of games for Facebook Inc.’s social network, was sued by Agincourt Gaming LLC for infringing two patents covering features of online games including “FarmVille” and “Mafia Wars.”

Zynga, which is preparing for an initial public offering, has a history of copying rather than devising its own games, Susman Godfrey LLP, the law firm representing Agincourt, said yesterday in a statement.

In a September 2010 story in the San Francisco Weekly, Zynga is characterized as “FarmVillains” and Zynga founder Marck Pincus is said to have told an employee “You’re not smarter than your competitor. Just copy what they do and do it until you get their numbers.”

In its lawsuit, filed in federal court in Wilmington, Delaware, Agincourt seeks unspecified damages and a court order barring the conduct. In dispute are patents 6,758,755, issued in July 2004; and 6,306,035, issued in October 2001.

The patents cover processes for credit-based online gaming and a prize-redemption system based on the outcome of game play, according to Dallas-based Agincourt’s complaint.

“Agincourt’s patents cover the most lucrative aspects of online social gaming -- including those comprising the bulk of Zynga’s revenues -- as they contain the crucial ‘link’ that allows for global, interactive prize redemption over the Internet,” Bill Carmody, a senior partner at Susman Godfrey, said in the statement.

“We’re not commenting” on the lawsuit, Adam Isserlis, a spokesman for San Francisco-based Zynga, said in an e-mailed statement.

The infringing Zynga games also include FishVille, CafeWorld, CityVille, Vampire Wars, PetVille, YoVille, FrontierVille, Treasure Isle, Empires & Allies and Poker, according to the complaint.

The suit is at least the second against Zynga in less than a month. Segan LLC, based in Long Island City, New York, sued July 29 in Delaware federal court alleging patent infringement.

Founded in 2007, Zynga turned profitable last year with net income of $90.6 million. The company, which filed July 1 to raise $1 billion in an IPO, owns four of the most popular applications on Facebook.

Zynga said in July that it has more than 232 million monthly active users, making it the biggest developer of social games.

The case is Agincourt Gaming LLC v. Zynga Inc., 11-00720, U.S. District Court, District of Delaware (Wilmington).

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Trademark

Abercrombie Will Pay ‘The Situation’ to Take Off Its Clothes

Abercrombie & Fitch Co. (ANF), the retailer whose 119-year-old brand was once associated with high-end sporting goods, has asked a character on MTV’s Jersey Shore reality show to quit wearing its clothing.

According to an Aug. 16 statement, the New Albany, Ohio- based company has offered Michael “the Situation” Sorrentino compensation to shed his Abercrombies. The association with Sorrentino “is contrary to the aspirational nature of our brand and may be distressing to many of our fans,” the company said in its statement.

Although the amount of compensation offered wasn’t disclosed, Abercrombie said it was a “substantial payment.” The company has made similar offers to others in the cast and said it is “urgently awaiting a response.”

“Jersey Shore” focuses on the activities of eight young people largely of Italian-American ethnicity, who spend most of their time focused on doing laundry, working out, getting tans and drinking. The show has been criticized for its exaggerated portrayal of the so-called Guido Italian-American culture, and in May, New Jersey Governor Chris Christie said it should leave his state.

Abercrombie, which is known for its edgy ads often featuring shirtless men, was criticized earlier this year for offering a padded bikini top for girls ages 7-14, according to the Atlanta Journal Constitution.

In March 2008, Abercrombie Chief Financial Officer Michael Kramer told Bloomberg “we’re always pushing the envelope with regards to what we call that casual American sexuality.”

Dollywood Sues Pigeon Forge Businesses for Infringing Trademarks

The Dollywood Co., which is associated with country singer Dolly Parton, sued three Tennessee businesses for trademark infringement.

According to the complaint filed Aug. 12 in Knoxville, Tennessee, three companies based in that state’s town of Pigeon Forge are accused of using the Dollywood marks to promote their tourism-related businesses.

Dollywood, an amusement park complex in Pigeon Forge, Tennessee, that became associated with Parton in 1986, has multiple registrations for the term with the U.S. Patent and Trademark Office, according to court papers. The company objects to the use of its marks by Guesthouse International Inn, Rivergate Inn and Winter Hospitality.

The amusement park company claims it’s harmed and the public is confused by the three companies’ actions, and asked the court to bar them from any use of the Dollywood or Dolly trademarks. Additionally, it seeks awards of profits the companies derived from their alleged infringement, and asked to be given any infringing domain names.

Dollywood also asked for money damages, destruction of all infringing promotional materials, and for awards of attorney fees and litigation costs.

The company is represented by Mark S. Graham and Michael J. Bradford of Luedeka, Neely & Graham PC of Knoxville.

The case is Dollywood Co. v. Ashin and Rupal Shah, 3:11-cv- 00378, U.S. District Court, Eastern District of Tennessee (Knoxville).

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Copyright

Freelance Writers, Publishers Accord Tossed by Appeals Court

A federal appeals court rejected a settlement between publishers, including New York Times Co., and freelance writers who accused the companies of copyright infringement.

The U.S. Court of Appeals in New York vacated a lower court order approving the agreement, finding a group of freelance authors with certain claims weren’t adequately represented, according to a decision filed yesterday.

“We conclude that the district court abused its discretion in certifying the class and approving the settlement, because the named plaintiffs failed to adequately represent the interests of all class members,” the appeals panel said.

The writers claimed in a class-action, or group, lawsuit that publishers violated their copyrights by electronically reproducing and posting their work in databases. A judge in 2005 approved the settlement, which was valued at as much as $18 million for the writers.

Danielle Rhoades Ha, a spokeswoman for New York Times Co. (NYT), didn’t immediately comment on the appeals court ruling. Patrick Kerr, a spokesman for Reed Elsevier Inc., another publisher in the case, didn’t immediately respond to an e-mail seeking comment.

The appeals court case is In re Literary Works In Electronic Databases Copyright Litigation, 05-5943, 2nd U.S. Circuit Court of Appeals (Manhattan).

Village People Member Sued by Scorpio Over Claims to Copyrights

Victor Willis, one of the members of the 1970s disco group the Village People, was sued by a French music publisher over his attempt to gain control of the copyrights for the songs the group performed, including the hit Y.M.C.A.

According to the complaint filed July 14 in federal court in San Diego, Paris-based Scorpio and its New York affiliate, Can’t Stop Productions Inc., hired Willis in the late 1970s to create new English lyrics for some French songs. In January, Willis filed papers asking that the rights of others to these songs, which were performed by the Village People, be terminated.

He made the request under a provision of U.S. copyright law that allows musicians and writers to regain control of their work.

Scorpio says Wills has “no legitimate right” to see termination of its ownership of the music copyright, and that the compositions fell under copyright law’s “work for hire” section.

The company asked the court to order Willis to stop making claims to the copyright, or, if he is found to have some legitimate claims, to limit those to the same percentage of ownership for which he presently receives as compensation for their use. Scorpio also seeks awards of attorney fees and litigation costs.

Scorpio is represented by Robert S. Besser of the Law Offices of Robert S. Besser in Santa Monica, California.

The case is Scorpio Music SA v. Willis, 3:11-cv-01557-BTM- RBB, U.S. District Court, Southern District of California (San Diego).

Music Publishing Group Ends YouTube Infringement Suit Appeal

An association of music publishers dropped its appeal of a court ruling that found Google Inc. (GOOG)’s YouTube didn’t infringe copyrights when it displayed videos without authorization. An agreement was made with the website.

The resolution of the suit will allow music publishers to form licensing agreements with YouTube and receive royalties, the National Music Publishers Association said in a statement.

“We are pleased to have resolved NMPA’s litigation claims and to work with YouTube in providing a new licensing opportunity for songwriters and publishers,” David Israelite, the chief executive of the Washington-based trade group, said in the statement.

The NMPA was a plaintiff in a companion suit to one filed in 2007 by Viacom Inc., which charged that YouTube violated copyrights by allowing users to upload videos of music, TV shows and sports events without permission. A district court ruled last year that YouTube wasn’t liable for infringement because it removed unauthorized videos when informed about them.

The agreement “offers more choice for rights holders in how they manage use of their songs,” YouTube said in a blog posting on its site yesterday. “While this deal is only with publishers, it will also benefit recording artists and record labels.”

The appeal of the district court ruling by New York-based Viacom, which owns MTV Networks and Comedy Central, remains in effect.

The NMPA, along with YouTube and music publishers including the Rodgers & Hammerstein Organization, agreed to “voluntary dismissal” of the appeal, according to a filing yesterday in appeals court in Manhattan.

The music publishing appeal is The Football Association Premier League Ltd. v. YouTube Inc., 10-3342, 2nd U.S. Circuit Court of Appeals (New York). The Viacom appeal is Viacom v. YouTube, 10-03270, 2nd U.S. Circuit Court of Appeals (New York).

For more copyright news, click here.

Trade Secrets/Industrial Espionage

Gundlach Says He, TCW Managers Opposed Stern’s 2009 Return

DoubleLine Capital LP’s Jeffrey Gundlach told a jury he and other group managers at TCW Group Inc. opposed the appointment of Marc Stern as chief executive officer in June of 2009, six months before Gundlach was fired.

Gundlach, testifying for a third day in the trade secrets trial that pits him and three other former TCW employees against the asset-management firm, said he told Stern, who had stepped down as the company’s president in 2005, and TCW founder Robert Day that they couldn’t just “breeze” back in, after he and the other managers had kept TCW going through the financial crisis.

Mark Attanasio, who co-ran TCW’s leveraged finance group that separated from the firm last year, was “even more negative than me” about the appointment, Gundlach said. Five TCW managers said in a letter to Societe Generale (GLE) SA, TCW’s parent company, that bringing an executive back from retirement would be a “major step backward,” Gundlach testified.

Los Angeles-based TCW fired Gundlach, 51, in December 2009 and sued him the following month after more than half of its fixed-income professionals joined his new firm. TCW seeks $375 million in damages, claiming Gundlach stole its trade secrets, including client portfolio data, to start DoubleLine.

Gundlach, who had worked at TCW for 25 years and who was named Morningstar’s Fixed Income Manager of the Year in 2006, countersued, saying TCW fired him to avoid having to pay management and performance fees for the distressed-asset funds his group managed and that went “through the roof.” Gundlach seeks about $500 million.

TCW alleges that Gundlach had become increasingly difficult to work with and was openly hostile to Stern. The company says it put Gundlach on leave Dec. 4, 2009, the day it announced that it had acquired Metropolitan West Asset Management LLC to manage the fixed-income portfolios of Gundlach’s group. DoubleLine contends Gundlach was fired Dec. 4, not just put on leave.

Gundlach said under cross-examination from DoubleLine lawyer Mark Helm that at the time of a Sept. 3, 2009, meeting with Stern, when he thought he was about to get fired, he told members of his mortgage-backed securities group, to make copies of files that might be useful if he were fired, including client holdings and contact information.

Gundlach, whose group managed more than half of TCW’s $110 billion assets under management, testified that he immediately reversed himself as he realized that they could get the information from the clients directly.

The money manager, whose new firm has about $14 billion under management, testified earlier yesterday that he was “furious” when he learned an employee had failed to immediately turn over a device belonging to TCW in violation of DoubleLine’s policy to return all TCW devices and information.

TCW argues that Gundlach wouldn’t have been able to get DoubleLine started within weeks after he was fired if he hadn’t had access to TCW trade secrets and confidential information.

Gundlach said that from when DoubleLine started on Dec. 14, 2009, the policy had been not to use any TCW files they still had and to return them to TCW.

The case is Trust Co. of the West v. Gundlach, BC429385, California Superior Court, Los Angeles County.

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: Andrew Dunn at adunn8@bloomberg.net.

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