Apple, Nokia, Nippon Steel, AIG: Intellectual Property

As Apple Inc. (AAPL), Microsoft Corp. (MSFT) and Motorola Mobility Holdings Inc. (MMI) keep trying to prove who violated each other’s patents, the companies may be motivated to prevent a possible ban on imports of Xboxes and iPhones.

Apple Chief Executive Officer Tim Cook, in the wake of a preliminary finding April 24 that it infringed one of four Motorola Mobility smartphone patents, said the company would “highly prefer to settle versus battle” over patents.

Cook’s comments follow remarks by Google Inc. (GOOG) CEO Larry Page, who called the spate of litigation over smartphones a “sad thing” in a Bloomberg Businessweek interview published April 4.

“It’s getting to the point where it is now seriously in the way of business,” Victor Siber, former chief intellectual property counsel for International Business Machines Corp. (IBM) who’s now with Baker & Hostetler LLP, said yesterday.

Lawsuits have spread across four continents as companies vie for a greater share of a market for smartphones that researcher Gartner Inc. said rose 47 percent in the fourth quarter.

A U.S. International Trade Commission judge said Apple products including the iPad and iPhone infringe a Motorola Mobility patent, while another said the Xbox infringed four patents. Both determinations announced this week are subject to review by the six-member commission, which can block the Asia- made products from entering the U.S.

Apple filed the first large-scale patent case over smartphone technology in March 2010 with a case against HTC Corp. (2498) Apple’s first strike reflected a pledge by the late Steve Jobs, as told in his authorized biography last year, that he would “spend every penny” of the company’s cash to prove that Android’s features were copied from the iPhone and iPad.

In the interview with Google’s Page published this month, he said the legal wrangling was taking its toll, with “a lot of money going to lawyers and things, instead of building great products for users.”

After this week’s rulings, the next step in both cases is for Microsoft and Apple to petition the commission with arguments they said will undermine Motorola Mobility’s case. Microsoft and Apple have said they will challenge Motorola Mobility’s right to seek import bans on the patents, as well as whether there was infringement and if the patents are valid.

The case against Apple is In the Matter of Wireless Communication Devices, Portable Music and Data Processing Devices, Computers and Components Thereof, 337-745, and the case against Microsoft is In the Matter of Gaming and Entertainment Consoles, 337-752, both U.S. International Trade Commission (Washington).

Nokia, HTC Win Ruling Revoking IPCom 3G Technology Patent

Nokia Oyj (NOK1V) and HTC Corp. won a ruling revoking a patent that IPCom GmbH relied on to get injunctions in Germany against the sales of some third-generation wireless phones.

The European Patent Office revoked the intellectual property protection yesterday, the agency’s spokesman Rainer Osterwalder said by telephone. IPCom said it will appeal.

A Dusseldorf court on April 24 banned Deutsche Telekom AG (DTE) and Vodafone Group Plc (VOD) from selling HTC and Nokia devices using the technology in a case brought by IPCom. The phone companies and manufacturers can appeal the ruling.

The patent, called “100A” by its owner, is a central piece of the portfolio IPCom used in its effort to make Nokia and HTC pay royalties for mobile technology it acquired from Robert Bosch GmbH in 2007. The companies are entangled in patent litigation across Europe. The patent was filed for methods used to connect devices to 3G wireless networks and prioritize them.

Thomas Empt, a spokesman for Pullach, Germany-based IPCom, said in an e-mail the patent remains valid during these proceedings and thus yesterday’s ruling won’t influence cases the company won in Germany and the U.K..

Nokia and HTC took the opposing view. The EPO’s decision means that the Dusseldorf court’s April 24 ruling isn’t expected to stop the sales of their products in Germany, the two companies said in separate e-mailed statements.

“IPCom needs to recognize its position and end its unrealistic demands for what remains of this significantly diminished portfolio,” said Paul Melin, vice president for intellectual property at Nokia.

HTC called the EPO decision a “grave setback” for IPCom and said it is hoping that the “cost driving” patent litigation will now end.

Imax Tests Laser Projector Prototype Built With Kodak Patents

Imax Corp. (IMAX), the pioneer of large-screen cinema, has begun testing a prototype laser-projection system, based on patents licensed from Eastman Kodak Co. (EKDKQ) that improves picture quality with brighter light.

The system, which uses two projectors and incorporates Mississauga, Ontario-based Imax’s image-enhancing technology, will allow movies to be shown on screens 120 feet wide or more. It will be available in the fourth quarter of 2013, said Greg Foster, chairman and president of filmed entertainment. The company demonstrated the prototype to studios last week, using clips including Warner Bros.’ “The Dark Knight Rises,” the final Batman movie from director Christopher Nolan.

The new system gives Hollywood studios and cinema chains another potential tool to keep moviegoers in theaters as competition mounts from large-screen televisions and Web-based options. With the additional “horsepower” provided by laser’s focused light, theaters can improve the picture quality, including in newer formats such as 3-D.

“We’re very pleased with where we are at this point, and pleased with the reaction from our key partners,” Foster said in an interview.

Nolan showed clips from “The Dark Knight Rises,” at the exhibitors’ trade show, Cinemacon, April 24 in Las Vegas. One- third of the movie was shot using Imax cameras, he said.

Warner Bros., owned by Time Warner Inc. (TWX), also showed early clips of Peter Jackson’s “The Hobbit: An Unexpected Journey,” filmed at the faster rate of 48 frames per second, which makes the image clearer and easier on the eyes. The movie will be released in December with Metro-Goldwyn-Mayer Studios Inc.

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Copyright

Bavaria to Publish German ‘Mein Kampf’ Before Copyright Expires

In efforts to demystify Adolf Hitler’s “Mein Kampf” manifesto, the German state of Bavaria plans to publish a German-language edition of the book before the copyright expires in 2015, 70 years after Hitler’s death, the BBC reported.

While publication of the book has never been specifically banned in Germany, because of its ownership of the copyright, Bavaria has managed to prevent others from publishing it, the BBC reported.

Markus Soeder, Bavaria’s finance minister, told the BBC that by publishing the book “we want to make clear what nonsense is in there.”

In March a court in Munich barred a British publisher from putting out without authorization a book containing German- language extracts from “Mein Kampf,” according to the BBC.

For more copyright news, click here.

Trade Secrets/Industrial Espionage

Nippon Steel Sues Posco for $1.2 Billion for Using Secrets

Nippon Steel Corp. (5401), Japan’s largest steelmaker, said it sued Posco in Tokyo’s District Court seeking 100 billion yen (1.2 billion) in damages from the South Korean company for allegedly using trade secrets acquired illegally by a former employee.

Nippon Steel also sued its former employee, the Tokyo-based steelmaker said yesterday in a statement. It also sued Posco and a subsidiary in the U.S. for infringements of certain patents, it said, without providing further details of that lawsuit.

“Nippon Steel has given warnings and requests to Posco alleging misappropriation of Nippon Steel’s property rights,” the company said. It’s asking the Tokyo Court for an injunction against Posco’s manufacturing of certain high-end electrical steel products, according to the statement.

Japanese steel mills are battling a strong currency which is reducing their competitiveness against rivals in South Korea and China. Some customers, such as shipbuilders, are paying 30 percent less for steel from South Korean yards, one person familiar with the matter said in October.

Nippon Steel is taking every measure possible to boost earnings as it battles higher costs, Credit Suisse Securities Japan Ltd.’s Shinya Yamada said yesterday. Nippon Steel and Posco began a partnership in 2000 to collaborate on some research, technology and buying raw materials.

“Nippon Steel was aware that the move might worsen relations with Posco, its long-term alliance partner, but they made a decision,” said Yamada.

Posco hasn’t infringed Nippon Steel’s steel sheet technology, and will respond to the suit, spokeswoman Kim Ji Young said yesterday. Nippon Steel said in the statement that its strategic alliance with Posco will continue, and won’t harm its relationship with the Korean producer.

Nippon Steel last year won regulatory approval to buy Sumitomo Metal, Japan’s third-largest steelmaker, to compete with international rivals, including Posco, China’s Baoshan Iron & Steel Co. and ArcelorMittal. (MT)

AIG Claims Ex-International Lease Executives Stole Trade Secrets

American International Group Inc. (AIG) sued the former chief executive officer of its International Lease Finance Corp. aircraft lending business, saying he misappropriated confidential information when he left the company and started Air Lease Corp. (AL)

AIG filed a complaint April 24 in Los Angeles Superior Court accusing Steven Udvar-Hazy and 10 other former International Lease Finance executives of breach of fiduciary duty and stealing trade secrets, among other claims, when they left the company in 2010.

“We regret having to file this suit, but the defendants’ misconduct left us no choice but to go to court to protect our rights and the rights of our shareholders, including our largest shareholder, the American taxpayer,” Mark Herr, a spokesman for New York-based AIG, said in an e-mailed statement.

AIG said Udvar-Hazy tried to buy all or part of International Lease Finance, the Los Angeles-based company he started in 1973 and sold to AIG in 1990 for $1.3 billion. AIG was soliciting bids for International Lease Finance in 2008 when the insurer needed to raise capital to repay an $85 billion U.S. government loan, according to the complaint.

Udvar-Hazy couldn’t reach an agreement in January 2010 to buy a fleet of planes from International Lease Finance to start his business because he wouldn’t be allowed to solicit other executives or use confidential data, according to AIG’s complaint. He “resigned from ILFC, and then stole what ILFC refused to sell,” according to the complaint.

Air Lease said in a statement that International Lease Finance resorted to filing a lawsuit because it hasn’t been able to compete and perceives Air Lease as a growing threat. International Lease Finance has “struggled with an aging fleet, heavy debt load, and loss of talent,” Air Lease said.

Herr said in a follow-up statement that Air Lease’s allegations were “spurious” and a “smoke screen to distract attention from it illegal conduct.”

The case is AIG v. Air Lease, BC483370, Superior Court of California (Los Angeles).

Penney Sued for Trade Secret Theft by Store-Fixture Manufacturer

J.C. Penney Co. (JCP), the retail chain with roots that go back to 1902, was sued for trade-secret misappropriation by a New York-based maker of store fixtures.

The suit, filed yesterday in federal court in Manhattan, comes in the wake of Plano, Texas-based Penney’s new “Fair and Square” ad campaign.

Hudson & Broad Inc. alleged that it was retained to design and manufacture a three-dimensional symbol that would give Penney brand identification akin to the star used by Macy’s Inc. (M) and Target Corp. (TGT)’s target logo.

The store-fixture company said in court papers that it repeatedly told Penney officials that it wasn’t a design firm, and didn’t want a “design fee” for its work. Instead it planned to manufacture the LED-illuminated square device it designed.

Penney promised that if it accepted the design, it would order the product only from Hudson & Broad, according to the complaint. The office-fixture company said it sent a quote to Penney to deliver almost 2,000 devices to Penney for a total of $25.6 million.

Instead, it learned at a trade show that the sole U.S. supplier of a matte acrylic to be used to make the device had been approached by other vendors to fill a large order from Penney. When the office-fixture company approached Penney, it learned that another vendor had submitted a lower bid to make the devices and would receive the contract.

Hudson & Broad said Penney is making unauthorized use of its intellectual property, and is owed at least $19 million in damages. It also asked the court for extra damages to punish Penney for its actions and for awards of litigation costs and attorney fees.

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

The case is Hudson & Broad Inc., v. J.C. Penny Corp., 1:12- cv-03239, U.S. District Court, Southern District of New York (Manhattan).

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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