Nokia, Borders, Firehouse, Angels: Intellectual Property

Nokia Oyj (NOK1V) transferred about 2,000 patents and patent applications to Mosaid Technologies Inc. (MSD), a Canadian owner of intellectual property in electronics, in a move that may reduce administration costs.

Mosaid will keep one-third of revenue from the patents and give two-thirds to Nokia and Microsoft Corp. (MSFT), John Lindgren, chief executive officer of the Ottawa-based company, said in an interview. Microsoft has a partnership with Espoo, Finland-based Nokia, which is using its software in smartphones.

“We pay nothing up front but we are responsible for all the operating costs of the licensing activities,” Lindgren said. “The compensation for this is our success in licensing these patents in the market.”

Nokia, the world’s largest maker of mobile phones by units, still has more than 30,000 patents and patent applications from a research and development program that ranges from handset design to nanotechnology. The assets sold to Mosaid include about 1,200 patents classified as essential for current wireless technologies and another 800 for implementations, Mosaid said in a statement.

“This could be seen as Nokia outsourcing the management of this collection of patents, with Mosaid taking care of any lawsuits,” said Michael Schroeder, a Helsinki-based analyst with FIM Bank. “It’s probably not Nokia’s core business to put pressure on everyone else in the industry and collect licenses and fight in court.”

The Finnish company retains a license to use the transferred patents without paying royalties, said Mark Durrant, a spokesman.

Mosaid expects that revenue from the intellectual-property assets will exceed the Canadian company’s lifetime sales to date of about $1 billion, Lindgren said. The patents are good for an average of 10 to 11 years, he said.

Mosaid, founded in 1975, has earned all revenue since 2007 exclusively from licensing patents that it acquires and develops through its own research, the CEO said.

“This portfolio is very deep and there is more than a critical mass of fundamental IP here,” Lindgren said. “We believe it’s as strong if not stronger than the recent Nortel portfolio that was sold.”

Nortel Networks Corp., which a decade ago was North America’s biggest maker of telephone equipment, was broken up earlier this year after filing for bankruptcy in 2009. The Mississauga, Ontario-based company agreed on June 30 to sell a set of about 6,000 patents and patent applications to a group composed of Microsoft, Apple Inc. (AAPL), Research In Motion Ltd. (RIM), EMC Corp., Ericsson AB and Sony Corp. (6758) for $4.5 billion.

The Nortel portfolio included about 500 essential patents, Lindgren said.

“Licensees whose agreements are made before such divestments will continue to benefit from their licenses,” Durrant said in a statement. “The purchasers of Nokia standards-essential patents must also assume the obligation to grant licenses under fair, reasonable and non-discriminatory terms.”

For more patent news, click here.

Trade Secrets/Industrial Espionage

Borders Group Sues Next Jump Inc. Over Use of Website

Borders Group Inc., the bankrupt book retailer, sued Next Jump Inc. for trade-secret misappropriation and trademark infringement over the use of a website.

Borders contends it had a contract with New York-based Next Jump to operate the Borders rewards site and that Next Jump, armed with a Borders client list, set up the OO.com website to gain customers.

“There is a danger of imminent, irreparable harm to the debtors’ estates” as a result of Next Jump’s use of the list and infringement of Borders’ trademarks, lawyers for the company said in a complaint filed Aug. 31 in U.S. Bankruptcy Court in Manhattan. Borders asked a New York bankruptcy judge to award punitive damages in the case.

Borders, based in Ann Arbor, Michigan, filed for protection from creditors Feb. 16, listing debt of $1.29 billion and assets of $1.28 billion. The company is liquidating its assets.

The retailer lost business as customers switched to e- readers such as Amazon.com Inc. (AMZN)’s Kindle, introduced in 2007. Barnes & Noble invested in its own Nook device to attract customers.

Officials of Next Jump weren’t immediately available to comment on the lawsuit.

The case is Borders Group Inc. v. Next Jump Inc., 11ap2567, U.S. Bankruptcy Court, Southern District of New York (Manhattan). The bankruptcy case is In re Borders Group Inc., 11-10614, U.S. Bankruptcy Court, Southern District of New York (Manhattan).

Trademark

Firehouse Subs Got Trademark Through Fraud on USPTO, Jury Says

Firehouse Restaurant Group Inc., a Florida-based restaurant chain with more than 350 outlets, lost an attempt to enforce various Firehouse trademarks against a South Carolina restaurant owned by a firefighter.

A jury in federal court in Florence, South Carolina, also found that the Florida company obtained its Firehouse trademark by fraud.

Scurmont LLC, which does business as Calli Baker’s Firehouse Bar & Grill in Myrtle Beach, South Carolina, claimed it had been threatened with the possibility of trademark infringement litigation by Firehouse Restaurant Group of Jacksonville, Florida. Firehouse Restaurant Group does business as Firehouse Subs.

In the complaint filed in March 2009, Scurmont said the term Firehouse was generic and used by many other food-service operations in places such as Arizona, Massachusetts, Wisconsin and Pennsylvania. Scurmont has used the term for more than 20 years, it claimed.

The jury agreed and in an Aug. 19 verdict found that Scurmont hadn’t infringed any of the marks belonging to the Florida chain, and that the Firehouse Restaurant Group’s Firehouse trademark was obtained through fraud on the U.S. Patent and Trademark Office.

Scurmont filed papers with the court Aug. 29 seeking $484,986 in attorney fees and $16,947.53 in litigation costs.

The South Carolina company was represented by Ammon T. Lesher, Bernard S. Klowski Jr., and Sarah Day Hurley of Turner Padget Graham & Laney PA of Greenville, South Carolina.

The case is Firehouse Restaurant Group Inc., v. Scurmont LLC, 4:09-cv-00618-RBH, U.S. District Court, District of South Carolina (Florence).

First Fake Versions of Winnipeg Jets’ Jerseys Seized by RCMP

In advance of the Winnipeg Jets’ home season opener Oct. 9, Canada’s border service agents and the Royal Canadian Mounted Police seized a shipment of fake jerseys bearing the hockey team’s new logo, the Vancouver Sun reported.

Other fakes that made it into the country are presently being sold on various websites, according to the Sun.

Jets spokesman Scott Brown told the Sun that law enforcement informed the team earlier this summer that its jerseys would be popular counterfeit items.

The official jerseys are to be released shortly, and after that, Brown said, it will be “very clear” which ones are authentic and which ones are fakes, according to the Sun.

Hells Angels Sue Wildfox Couture for Trademark Infringement

Hells Angels Motorcycle Club, which last year sued fashion design house Alexander McQueen and retail chain Saks Inc. (SKS) for trademark infringement, filed a new infringement suit against a Los Angeles-based sportswear company.

The Oakland, California-based motorcycle club aggressively enforces its intellectual property rights. According to Bloomberg data, the club has brought at least 15 trademark infringement cases in the past decade against a wide range of defendants including, in a 2006 dispute, the Walt Disney Co. (DIS)

In the newest case, filed Aug. 23 in federal court in San Jose, California, the club is objecting to a t-shirt it says is manufactured by Wildfox Couture LLC of Hollywood, California. The shirt, identified on the Wildfox website as the “Hells Angel Hippie Crewneck T,” featured a wing design on the back. A text on the front of the shirt reading “My boyfriend’s a Hells Angel,” according to the complaint.

Co-defendants with Wildfox are four named retailers -- including Amazon.com Inc. -- and 20 unnamed defendants. The club claims it’s suffered “irreparable harm” from the manufacture and sale of the shirt. When the wildfoxcouture.com website was accessed Sept. 1, the Hells Angel shirt couldn’t be seen. Other t-shirts, including one showing a rose-wreathed skull and listed as “Dead Head” were listed for $77 to more than $100.

The club asked the court to order recall and destruction of the allegedly infringing shirts, and for awards of money damages, defendants’ profits attributable to the alleged infringement, attorney fees and litigation costs.

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

The case against Alexander McQueen’s design house was settled in March, according to court filings. Co-defendants in that case -- Saks and Amazon’s Zappos unit -- settled in February.

That case was Hells Angels Motorcycle Corp. v. Alexander Mc Queen Trading Ltd., 2:10-cv-08029-CBM-MAN, U.S. District Court, Central District of California (Los Angeles).

The club is represented in its trademark disputes by Fritz Clapp of Beverly Hills, who is general counsel for the Hells Angels.

The new case is Hells Angels Motorcycle Corp. v. Wildfox Couture LLC, 5:11-cv-04141-PSG, U.S. District Court, Northern District of California (San Jose).

For more trademark news, click here.

Copyright

SAP Wins Bid to Reject $1.3 Billion Oracle Copyright Award

SAP AG (SAP), the business software maker, won its bid to overturn a $1.3 billion jury verdict awarded to Oracle Corp. (ORCL) in a copyright infringement lawsuit.

U.S. District Judge Phyllis Hamilton in Oakland, California, yesterday granted SAP’s motion to throw out the award, finding it “grossly excessive.” She ruled that SAP should get a new trial for damages if Oracle rejects her decision to lower the award to $272 million.

Oracle, based in Redwood City, California, won a lawsuit in November accusing SAP’s TomorrowNow software-maintenance unit of making hundreds of thousands of illegal downloads and several thousand copies of Oracle’s software to avoid paying licensing fees and to steal customers. The award was the largest ever for copyright infringement.

Oracle maintained at trial that its damages should represent the value of a hypothetical license that the unit would have had to pay for the software it infringed.

Such a license would never have existed between two fierce competitors, so the damage award should have been based on profits Oracle lost and SAP gained as a result of the infringement, Walldorf, Germany-based SAP said in court filings. That number is from $28 million to $407.8 million, SAP said.

The case is Oracle Corp. v SAP AG (SAP), 07-01658, U.S. District Court, Northern District of California (Oakland).

FHRAI Challenge to Special Copyright Licensing Fees Rejected

An Indian hotel and restaurant industry group has lost its challenge to special licensing fees performing rights groups charge to license sound recordings for special events beyond the annual license fee, the Financial Express reported.

India’s Supreme Court rejected the Federation of Hotels and Restaurants Association of India’s request that the rights societies be limited to charging only 15 percent for special events above the regular annual license fee, according to the Financial Express.

Lalid Bhasin, who represented the FHRAI in the case, had argued that the law permitting the societies to charge the rates it chose was unconstitutional as it gave the society “uncontrolled, unregulated and unbridles powers,” the Financial Express reported.

The federation had asked the court to strike down as unconstitutional some sections of the copyright act related to the rights groups and to withdraw their registrations, according to the Financial Express.

NZ’s Copyright Law Puts Liability on Internet Account Owner

New Zealand’s new copyright law placing liability for infringement on the owner of an Internet account went into effect Aug. 1, the New Zealand Herald reported.

The new law, The Copyright Amendment Act 2011, requires Internet service providers to issue warnings at the request of content owners to customers accused of copyright infringement, according to the Herald.

The mayor of Wellington, New Zealand, which began providing free Internet access Sept. 1 in its central business district, told the Herald that even though her city is funding the free access, it’s not an ISP as defined by the new law.

Wellington is the first city in New Zealand to provide free wireless Internet access in its business district, according to the Herald.

For more copyright news, click here.

IP Moves

Chadbourne & Parke Expands IP Practice, Hires Brian Pollack

Chadbourne & Parke LLP hired Brian R. Pollack for its IP practice, the New York-based firm said in a statement.

Pollack, who does IP litigation and strategy counseling, joins from Boston’s Edwards Angell Palmer & Dodge LLP. He has also previously practiced at Chicago’s Winston & Strawn LLP and New York’s now-defunct Morgan & Finnegan LLP.

Before he was a lawyer, he was an engineer working at the Massachusetts Institute of Technology Plasma Science and Fusion Center, the Joint European Torus Nuclear Fusion Facility, the Indian Point Nuclear Facility and Pacific Northwest National Laboratory.

He has represented clients whose technologies have included financial services systems, renewable and alternative energy systems pollution control systems, polymer properties and production, and mechanical and medical devices.

He has an undergraduate degree in mechanical engineering from Manhattan College, masters degrees in nuclear engineering and mechanical engineering from Massachusetts Institute of Technology and a law degree from Boston College.

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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