Apple, Samsung, Kodak, Imation: Intellectual Property

Apple Inc. (AAPL) won’t have to publish a notice telling customers that Samsung Electronics Co. didn’t copy its tablet designs until after an appeal in the intellectual property dispute is heard in October, a U.K. court ruled.

Apple had been ordered on July 18 to put a message on its U.K. website and take out advertisements in British newspapers describing a London court ruling that Samsung’s Galaxy devices didn’t imitate the iPad.

That would have caused Apple “irreparable and disproportionate harm,” said the company’s lawyer Anthony Grabiner yesterday, arguing the order should be delayed pending an appeal. “If you were on the other side you would be jumping around with joy.”

Judge David Kitchin agreed in a ruling yesterday that the company would suffer lasting damage to its image. “It would not be right to condemn Apple to such a fate before it has had a chance to argue its case.”

Apple is fighting patent lawsuits around the globe against competitors including Google Inc., HTC Corp. (2498) and Samsung as it competes for dominance of the smartphone and tablet computer markets. The companies have accused each other of copying designs and technology in their mobile devices. Legal battles about the similarity of Samsung and Apple tablets are being fought in Germany, the Netherlands and the U.S.

The argument that Apple “will suffer some mortal hurt is frankly a nonsense” and the order should stand, Samsung’s lawyer, Robert Howe, said yesterday.

Judge Colin Birss said in a July 9 ruling that Samsung’s tablets were unlikely to be confused with the iPad because they are “not as cool.” They were distinctive enough not to infringe Apple’s registered designs, he said.

Patent

Apple Seeks to Move Kodak Patent Case Out of Bankruptcy Court

A U.S. district judge denied Apple Inc.’s request to transfer out of bankruptcy court Eastman Kodak Co. (EKDKQ)’s patent lawsuit against the iPhone-maker.

Apple told U.S. District Judge George Daniels at a court hearing yesterday in Manhattan that Kodak’s complaint over patent ownership should be considered in federal district court.

Kodak and Apple are grappling over 10 patents that are included in a portfolio of patents Kodak is planning to sell as part of its bankruptcy restructuring. Kodak sued Apple in June in bankruptcy court, seeking an order that Apple doesn’t own the assets.

Apple argued in court papers that the bankruptcy court doesn’t have the authority or “necessary expertise” to decide the dispute. Kodak opposes withdrawal of the case.

Daniels said that Apple can renew its request at a later date.

The Apple lawsuit is Eastman Kodak Co. v. Apple Inc., 12-01720, U.S. Bankruptcy Court, Southern District of New York (Manhattan).

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Entertainment

Lady Gaga Sued by Bratz Maker MGA Entertainment Over Dolls

Pop star Lady Gaga and her management company were sued by MGA Entertainment Inc., the maker of Bratz toys, over allegedly failing to approve a line of dolls in the singer’s image.

The Van Nuys, California-based company, alleging breach of contract in New York state court, is seeking more than $10 million in damages from the pop star, her management company, Culver City, California-based Atom Factory, and Los Angeles- based Bravado International Group, a merchandising company that works with musicians.

MGA Entertainment says in the complaint that it agreed to produce dolls in Lady Gaga’s image in December 2011 at Bravado’s “request and insistence” and paid the company a $1 million fee in anticipation of shipping the products to retailers this summer in time for the holiday selling season.

In April, Bravado Chief Executive Officer Tom Bennett, told MGA’s chief executive officer, Issac Larian, that Lady Gaga, the stage name of Stefani Germanotta, wanted to delay production and shipping of the dolls until her new album is released in 2013, according to the complaint. MGA says the defendants have continued to withhold final approval in order to delay marketing the dolls until next year and instead sell a licensed Lady Gaga perfume called “Fame.”

“Defendants’ conduct is egregious, in bad faith and is pretextual, especially in light of the fact that MGA has, among other things, paid Bravado a $1,000,000 advance, agreed to an excessively generous royalty rate, invested millions in the preproduction of the Lady Gaga dolls and put its reputation and goodwill on the line in order to secure distributors and retail shelf space,” MGA Entertainment said in the complaint.

New York State Supreme Court Justice Jeffrey K. Oing on Wednesday declined MGA Entertainment’s request for an order requiring Bravado, Atom Factory and Lady Gaga to immediately approve the samples that were submitted to them for review, said Amanda Silverman, a spokeswoman for Lady Gaga.

The two sides are scheduled to return to court Aug. 29, when Lady Gaga will ask the judge to dismiss the lawsuit, Silverman said.

Peter Lofrumento, a spokesman for Vivendi SA’s Universal Music Group, the parent company of Bravado, said in an e-mail that the claims in the suit are meritless and the company will defend itself in court.

A telephone message left at the headquarters of Atom Factory wasn’t returned.

MGA Entertainment last year won $310 million in damages and fees from Mattel Inc. (MAT) in a trial over ownership of the rights of the Bratz line of dolls. Mattel in February asked a federal appeals court to reverse the judgment.

The case is MGA Entertainment Inc. v. Bravado International Group Merchandising Services Inc., 652547/2012, New York State Supreme Court (Manhattan).

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Advertising

Dean Switch on Organic Milk Cartons Hailed by Scientist It Cited

The scientist at the center of a dispute over the content of advertising of Dean Foods Co. (DF)’s Horizon fortified organic milk said she’s satisfied by the company’s confirmation that it expects to stop referring to her work on the product’s cartons.

“I’m pleased that they’re not going to be citing our reference,” Penny Kris-Etherton, a professor of nutrition at Penn State University, said on July 25.

Cartons of Horizon organic milk fortified with the Omega-3 fatty acid DHA feature a picture of a young girl to illustrate the heart, eye and brain benefits of the additive and include a footnote to a paper by Kris-Etherton about sources of DHA in the American diet.

The use of the reference was “inaccurate. It’s really a marketing strategy to sell more of their milk,” said Kris- Etherton, who demanded the removal of the citation through the American Journal of Clinical Nutrition, which published the paper.

The reference to the paper “will likely be removed” when packaging is changed in 2013, Sara Loveday, a Dallas-based spokeswoman for WhiteWave Foods Co., a unit of Dean that controls the Horizon brand, said in a July 24 e-mail.

It’s not the first time Dean, the largest U.S. dairy processor, has drawn criticism for its advertising and health claims. The company last year toned down its advertising about claims made about the brain-supporting attributes of DHA, normally found in oily fish, in response to a complaint to the Federal Trade Commission. Dean also is the target of at least five class-action lawsuits filed by consumers alleging that the statement that DHA “supports brain health” is false.

“It’s appropriate to use published, scientific studies as references for support of a statement,” Loveday said. “However, per the author’s request, we are considering removal of the reference within our next round of packaging changes in 2013.

The Horizon brand accounts for about 40 percent of the organic milk market, according to Amit Sharma, an analyst who covers Dean for BMO Capital Markets in New York.

Organic milk and cream sales in the U.S. totaled $2.41 billion in 2011, up 12.9 percent from the previous year, according to the Brattleboro, Vermont-based Organic Trade Association, the main organic producers’ trade group.

Mary Engle, associate director of the FTC’s division of advertising practices, declined to comment on Dean’s use of Kris-Etherton’s work.

For more, click here.

Trademark

Interactive Media Sues Imation Over Name for Data Storage

Interactive Media Corporation is suing Imation Corp. (IMN) over the use of the name ‘‘Defender” for data storage.

Kanguru, a division of IMC, has been producing secure USB devices with the Defender name since June 2007, according to the complaint filed July 25 in federal court in Boston. The company, based in Millis, Massachusetts, is privately held.

According to the suit, in 2010 Imation entered into negotiations to acquire IMC and the two companies signed confidentiality agreements as part of the process.

IMC says that nonetheless, during those negotiations Imation filed applications to register “Defender” as a trademark. The suit doesn’t claim that IMC had already registered the mark.

The negotiations fell apart in June 2010 the complaint says, and Imation subsequently began selling storage devices “similar to those that it had attempted to acquire from IMC and branded these products using the DEFENDER mark.”

According to Nate Cote, the vice president for product management for Kanguru Solutions, the company “formally noticed Imation two years ago and it was pretty much ignored.” The suit was filed on Wednesday because “It took awhile to gather the supporting documentation” to file the lawsuit.

The suit claims unfair competition under federal and Massachusetts state law. It does not allege that IMC has a federal trademark in the name Defender.

Mary Rawlings-Taylor, a spokeswoman for Imation, said in an e-mail that “Imation is aware of the filing but we do not comment on pending litigation.”

The case is Interactive Media Corp. v Imation Corp., 1:12- cv-11364, U.S. District Court for the District of Massachusetts (Boston).

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Internet

China Hackers Hit EU Point Man and D.C. With Byzantine Candor

The hackers clocked in at precisely 9:23 a.m. Brussels time on July 18 last year, and set to their task. In just 14 minutes of quick keyboard work, they scooped up the e-mails of the president of the European Union Council, Herman Van Rompuy, Europe’s point man for shepherding the delicate politics of the bailout for Greece, according to a computer record of the hackers’ activity.

Over 10 days last July, the hackers returned to the council’s computers four times, accessing the internal communications of 11 of the EU’s economic, security and foreign affairs officials. The breach, unreported until now, potentially gave the intruders an unvarnished view of the financial crisis gripping Europe.

As Bloomberg News reports, the spies were themselves being watched. Working together in secret, some 30 North American private security researchers were tracking one of the biggest and busiest hacking groups in China.

Observed for years by U.S. intelligence, which dubbed it Byzantine Candor, the team of hackers also is known in security circles as the Comment group for its trademark of infiltrating computers using hidden webpage computer code known as “comments.”

During almost two months of monitoring last year, the researchers say they were struck by the sheer scale of the hackers’ work as data bled from one victim after the next: from oilfield services leader Halliburton Co. (HAL) to a Washington law firm to Kolkata-based tobacco and technology conglomerate ITC Ltd. (ITC)

The researchers identified 20 victims in all -- many of them organizations with secrets that could give China an edge as it strives to become the world’s largest economy.

“What the general public hears about -- stolen credit card numbers, somebody hacked LinkedIn (LNKD) -- that’s the tip of the iceberg, the unclassified stuff,” said Shawn Henry, former executive assistant director of the FBI in charge of the agency’s cyber division until leaving earlier this year. “This is the biggest vacuuming up of U.S. proprietary data that we’ve ever seen.”

For more, 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 story: Michael Hytha at mhytha@bloomberg.net

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