Counterfeits, Tracking Shoppers, Tessera: Intellectual Property

The U.S. seized 150 domain names of websites selling counterfeit goods -- including fake Ugg boots and Nike sneakers -- in a crackdown on retailers violating intellectual property laws, authorities said.

Law enforcement agencies disclosed the seizures yesterday to coincide with the so-called Cyber Monday online shopping day. Shoppers visiting the seized sites now see a banner saying authorities have taken over the websites.

“For these criminals, it’s the season to lure in unsuspecting holiday shoppers,” John Morton, director of U.S. Immigration and Customs Enforcement, said in a statement.

The seizures are part of a continuing operation that started in June 2010. On last year’s “Cyber Monday,” authorities seized 82 domain names.

To go after potential violators, federal agents made undercover purchases of products that included sports jerseys, handbags, sunglasses and shoes, said Assistant Attorney General Lanny Breuer, in a conference call with reporters. After conferring with manufacturers to confirm that the goods are fakes, the government sought court orders to shut down the sites.

Morton said that the “vast majority” of the sites operate overseas, adding that the merchandise is “predominantly from China.”

Congress is considering legislation to combat foreign websites that traffic in stolen and counterfeit goods and content. The measures would give the attorney general power to seek court orders requiring U.S. Internet-service providers, search engines, payment processors and ad networks to block or cease business with such websites.

Privacy

Cell-Phone Devices to Track Shoppers Halted After Complaints

A trial of technology that uses shoppers’ mobile phones to track their movements through shopping centers was halted amid U.S. Senator Charles Schumer’s concerns that the practice violated privacy.

The test, which was scheduled to run from Nov. 25 until Jan. 1, was stopped after one day, said Julia Yuryev, a spokeswoman at Forest City Commercial Management in Cleveland. Forest City owns the two centers where the trial occurred: Promenade Temecula in the California city of the same name and Short Pump Town Center in Richmond, Virginia.

FootPath Technology, manufactured by the U.K. company Path Intelligence Ltd., uses mobile-phone signals to track shoppers, who were notified by a sign near mall navigation maps. The only way people can opt out is to turn off their mobile phones, Yuryev said.

“FootPath would like to address the privacy concerns before moving forward,” Yuryev said in a telephone interview yesterday. “It’s unclear if they will publish the data they’ve already used.”

Path Intelligence, based in Portsmouth, England, has “temporarily suspended data collection at the two malls,” Chief Executive Officer Sharon Biggar said in an e-mail.

Schumer, a New York Democrat, criticized the technology, saying the malls were compromising patrons’ privacy. Schumer planned to ask the Federal Trade Commission to investigate, he said in a statement yesterday.

J.C. Penney tested the technology in one store and has no plans to implement it, Rebecca Winter, a spokeswoman for the chain, said in an e-mail yesterday.

Home Depot isn’t testing or using the technology, Stephen Holmes, a company spokesman, said yesterday in an e-mail.

Privacy Watchdogs Need Greater Powers, EU’s Justice Chief Says

Data-protection authorities in the European Union must have greater powers to better enforce privacy rules across the 27- nation region, the EU’s justice commissioner said.

“The authorities responsible for data protection must be provided with sufficient powers to enforce the law and they must have sufficient resources to exercise their powers,” Viviane Reding said in prepared remarks of a speech in Brussels yesterday. “We need legal certainty and a level-playing field for all businesses that handle personal data of our citizens.”

Reding last year proposed an overhaul of the EU’s 16-year- old data-protection policies to address online advertising and social-networking sites. The law, which the regulator intends to formally publish by February, may include stricter sanctions, such as criminal penalties, and the option for consumer groups to file lawsuits.

Companies, like consumers, need “a one-stop-shop when it comes to data-protection matters, one law and one single data protection authority for each business; that of the member state in which they have their main establishment,” said Reding.

Current rules mean any company operating in the EU has to abide by 27 different interpretations of the region’s rules on privacy.

The commissioner also reiterated her plans to introduce a general obligation for anyone controlling data to notify regulators and individuals when a data breach is discovered.

Patents

Tessera Wins Round in Patent Case as Court Rebuffs Qualcomm

The U.S. Supreme Court left intact a ruling that lets Tessera Technologies Inc. (TSRA) seek damages from Qualcomm Inc. (QCOM) and four other companies for infringing patents covering computer- chip packaging.

The justices yesterday turned away appeals in the case from Qualcomm, Spansion Inc. (CODE), STMicroelectronics NV (STM) and units of Freescale Semiconductor Holdings and Advanced Micro Devices Inc. (AMD)

The U.S. International Trade Commission said in 2009 that those companies, along with Motorola Inc. (MOT), infringed patents owned by Tessera. A federal appeals court upheld that finding last year. Motorola split into two companies earlier this year, Motorola Mobility Holdings Inc. and Motorola Solutions Inc.

Motorola dropped out of the legal fight by licensing the Tessera patents in 2009. The patents are now expired, leaving the companies still in the case to fight over damages for past infringement.

The cases are Spansion v. International Trade Commission, 11-127, and Qualcomm v. International Trade Commission, 11-128.

Gevo Challenges Validity of Butamax Patent Over Biofuels

Gevo Inc. said the U.S. Patent and Trademark Office is reconsidering a patent that the agency issued in August to Butamax Advanced Biofuels LLC for a fuel additive. The PTO upheld another patent as final

In a non-final action dated Nov. 25, the PTO said the patent claims were invalid, according to the agency’s website. Butamax will have a chance to respond to the agency’s findings, and by law the patent remains valid and enforceable during the review process.

Gevo, based in Englewood, Colorado, said in a statement it sought the review, adding that “substantial questions exist regarding whether others invented this technology first and that several scientific journal publications had described the technology before Butamax applied for the patent.”

Butamax, based in Wilmington, Delaware, is a joint venture of BP Plc (BP/) and DuPont Co., according to information on its website and has brought patent litigation against Gevo. CEO Paul Beckwith said, in a statement on its website, that “We are pleased that the U.S. Patent Office found Gevo’s attempts to invalidate our first patent to be without merit and we are confident that our second patent, which is a continuation of the first, will ultimately receive the same revalidation.”

IPCom Will Seek to Block HTC 3G Smartphone Sales in Germany

IPCom GmbH & Co. said it will seek to block sales of HTC Corp. 3G smartphones in Germany after HTC withdrew an appeal in a patent lawsuit.

“We will use the right awarded by the courts, likely resulting in HTC devices disappearing from shops during the crucial Christmas season,” IPCom managing director Bernhard Frohwitter said in an e-mailed statement.

HTC, the largest seller of smartphones in the U.S., dropped the appeal of a patent ruling won by IPCom in Germany because a separate German patent court partially invalidated the patent at issue, HTC lawyer Martin Chakraborty said Nov. 25.

IPCom, based in Pullach, Germany, is seeking royalties from a family of mobile-technology patents it acquired in 2007 from Robert Bosch GmbH, the world’s largest automotive supplier. IPCom bought the patents after Bosch failed to license them to Nokia in 2003.

“HTC considers that the appeal had become redundant as the German Federal Patents Court had previously held the relevant claim of the patent to be invalid,” HTC said in an e-mailed statement from an outside spokeswoman for the company in London.

HTC and Nokia Oyj (NOK1V) in December teamed up to overturn most of one of IPCom’s patents in Germany’s Federal Patent Court in Munich. The mobile-phone makers had sought to void the patent entirely. HTC is separately being sued by IPCom in Britain over claims its products violate a European patent.

Australia Appeals Judge Questions Fairness of Samsung Tablet Ban

An Australian appeals court judge questioned the fairness of a ruling that granted Apple Inc.’s request to ban the sale of the iPad2’s biggest rival in a legal dispute with Samsung Electronics Co. (005930) over patent infringement.

“The result looks terribly fair to Apple and not terribly fair to Samsung,” Federal Court Justice Lindsay Foster said last week at a hearing in Sydney on Samsung’s appeal for the ban to be overturned.

Federal Court Justice Annabelle Bennett issued an injunction Oct. 13 barring the sale of the Galaxy 10.1 Tab in Australia until Apple and Samsung resolve the patent dispute at trial. Bennett failed to consider the “dire consequences” of the ban on Samsung, which has been “entirely shut out” from marketing the device, Neil Young, Samsung’s lawyer, said Nov. 25.

The suit is part of a legal battle between the companies in at least four countries that began in April, when Apple accused Suwon, South Korea-based Samsung of “slavishly” copying its designs. Samsung plans to scrap Australian sales of the newest Galaxy tablet if it can’t meet the Christmas shopping season, since missing that will render the device “dead,” Young said at an Oct. 4 hearing.

Justice John Dowsett said the panel would try and rule this week on Samsung’s request to lift the injunction.

The case is Samsung Electronics Co. v. Apple Inc. (AAPL) NSD1792/2011. Full Court of the Federal Court of Australia (Sydney).

For more patent news, click here.

Copyright

Belgacom Can’t Be Told to Block File Sharing, EU Court Says

Belgacom SA (BELG)’s Internet-service provider Scarlet can’t be forced by a national court to block users from illegally sharing music and video files, the European Union’s highest court said.

“EU law precludes the imposition of an injunction by a national court which requires an Internet service provider to install a filtering system with a view to preventing the illegal downloading of files,” the EU Court of Justice in Luxembourg said in a statement after the Nov. 24 ruling.

A Belgian court last year sought the EU tribunal’s guidance on whether forcing an ISP to stop illegal file sharing on its network is in line with the 27-nation bloc’s rules. Belgian music-copyright group Sabam, which represents authors and musicians, started the legal fight over the use of so-called peer-to-peer software for file sharing.

Belgacom, the largest telephone company in Belgium, won antitrust approval to acquire Scarlet in 2008. Scarlet is appealing a June 2007 Belgian court order to “make it impossible” for users to violate copyright laws, saying it would entail breaching customers’ privacy rights.

The ruling “underlines the importance of the neutrality of ISPs with regard to the transmission of information, and reiterates that the economic and legal responsibility in the fight against illegal downloading of protected works should not solely be delegated to ISPs,” Belgacom said in an e-mailed statement.

The court last week ruled that while intellectual property owners can seek an injunction against companies such as ISPs whose services are used to breach their rights, an injunction forcing an ISP to install a filtering system that monitors all electronic communications would not be possible.

It would result in “serious infringement of Scarlet’s freedom to conduct its business” which would not strike a fair balance between the right to intellectual property and company’s freedom to do business, the court said.

The International Federation of the Phonographic Industry said the ruling “does not affect the forms of ISP cooperation that IFPI advocates, including graduated response and the blocking of rogue websites, which are already being implemented in countries across Europe.”

The case is: C-70/10, Scarlet Extended SA v. Societe Belge des auteurs, compositeurs et editeurs (SABAM).

For more copyright news, click here.

To contact the reporter on this story: Ellen Rosen in New York at erosen14@bloomberg.net.

To contact the editor responsible for this report: Michael Hytha at mhytha@bloomberg.net.

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