Kodak, Pussy Riot, News Corp.: Intellectual Property

The U.S. Trustee overseeing Eastman Kodak Co. (EKDKQ)’s bankruptcy was asked to probe the photography pioneer’s patent auction by a New York hedge fund, which said the “unusually secretive” bidding process wasn’t likely to benefit creditors.

Esopus Creek Value Series Fund LP, which holds Kodak’s 9.75 percent Senior Secured Notes, said press reports about Apple Inc. (AAPL) and Google Inc. (GOOG) joining forces as lead bidders led the fund “to be concerned as to the integrity of the bidding process,” according to a letter e-mailed to Tracy Hope Davis, the U.S. trustee who supervises bankruptcies in the New York region.

Under bankruptcy law, “we note that the trustee is entitled to avoid any sale resulting from collusive bidding,” Esopus said in the letter, which was obtained by Bloomberg News. The fund cited a Wall Street Journal article on Aug. 16 titled “Kodak Auction Makes Odd Bedfellows.”

A voice-mail message seeking comment on Esopus’s letter from Davis at the U.S. Trustee’s office wasn’t immediately returned after regular business hours. Google doesn’t comment on “rumor and speculation,” said a spokesman, Jim Prosser.

“The auction procedures were approved by the court, which also ordered that all parties should maintain confidentiality, as we are doing,” Christopher Veronda, a spokesman for Kodak, said in an e-mail.

Kristin Huguet, an Apple spokeswoman, didn’t immediately return an e-mail seeking comment

Rochester, New York-based Kodak said Aug. 16 it was continuing an extended auction of its digital-imaging patents and may not sell them if it concludes that creditors will benefit more if it holds them.

The patents for sale relate to the capture, manipulation and sharing of digital images. Kodak is selling the patents to fund a turnaround after filing for bankruptcy in January, pursuing a plan to shrink the company and focus on printing more than photography. Chief Executive Officer Antonio Perez is pushing ahead with the sale amid legal fights with device makers, including Apple, over the ownership and validity of some of the patents.

The patents are collateral for a $950 million bankruptcy loan arranged by Citigroup Inc. (C)

In court documents, Kodak has said the patents may be worth $2.21 billion to $2.57 billion, based on an estimate by patent advisory firm 284 Partners LLC. Kodak said it has generated more than $3 billion in revenue by licensing some of the digital- imaging patents to users, including Samsung Electronics Co., LG Electronics Inc. (066570), Google Inc.’s Motorola Mobility unit and Nokia Oyj. (NOK1V)

The bankruptcy case is In re Eastman Kodak Co., 12-10202, U.S. Bankruptcy Court, Southern District of New York (Manhattan).

For Apple-Samsung Jury, More Than 600 Questions Need Answers

The jurors who will decide the outcome of the intellectual- property trial between Apple Inc. and Samsung Electronics Co. must answer more than 600 questions simply to get to the end of their verdict form.

The trial over smartphone and tablet patents, which concluded yesterday in federal court in San Jose, California, produced dozens of exhibits, 50 hours of argument and testimony over three weeks, and a multitude of calculations to arrive at estimated potential damages of billions of dollars.

That was before U.S. District Judge Lucy Koh started reading 109 pages of jury instructions to guide the nine-member jury through the labyrinthine 20-page verdict form. The exercise, done yesterday before lawyers gave closing arguments, required more than two hours, including court-ordered “stand up” breaks to make sure everyone stayed alert.

The verdict form is a “whopper,” Stanford Law School professor Mark Lemley said in an interview. Asking jurors to parse three different sets of legal rules for the claims at issue -- utility patents, design patents and trade dress, or how a product looks -- “will be particularly hard,” he said.

“The jury needs to figure out what category to put each patent in, and then remember to apply some of the rules” contained in the judge’s instructions “to some of the patents, and other rules to other patents,” he said.

Koh said the jury will start deliberating today. Federal rules require that for either side to win, the jury verdict must be unanimous.

Apple, based in Cupertino, California, sued Samsung in April 2011, and Suwon, South Korea-based Samsung countersued. The case is the first to go before a federal jury in a battle being waged on four continents for dominance in a smartphone market valued by Bloomberg Industries at $219.1 billion.

Apple alleges infringement of seven of its patents and seeks $2.5 billion to $2.75 billion in damages. The world’s most valuable company also seeks to make permanent a preliminary ban it won on U.S. sales of a Samsung tablet computer, and extend the ban to Samsung smartphones.

Samsung claims infringement of five of its patents and seeks as much as $421.8 million in royalties.

The trial, which began July 30, wrapped up yesterday with two hours of closing arguments by each side.

A lawyer for Apple, Harold McElhinny, said Samsung was so desperate to catch up with Apple’s smartphones and tablets in February 2010 that the South Korean company began “three intense months of copying” the iPhone maker.

Samsung’s lawyer, Charles Verhoeven, framed the jury’s decision as one that could shape the future of the technology industry. If the jury rules in Apple’s favor, he said, big conglomerates with large patent portfolios would stifle innovation by blocking out competitors.

The jury’s decision “could change the way competition works in this country,” he said. “Rather than compete in the marketplace, Apple is seeking to gain an edge in the courtroom. It’s seeking to block its biggest and most serious competitor from even attending the game.”

The case is Apple Inc. v. Samsung Electronics Co. (005930) Ltd., 11- cv-01846, U.S. District Court, Northern District of California (San Jose).

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Trademark

Steelers Settle Suit Involving Italian-Language ‘Terrible Towel’

The Pittsburgh Steelers LLC’s trademark infringement suit against a seller of Italian-language versions of the team’s “terrible towel” has settled, according to court papers.

The National Football League team and the Allegheny Valley School Foundation sued Nicholas Rossi of Rector, Pennsylvania, in federal court in Pittsburgh Aug. 14, claiming his “‘Ufficiale di Italia asciugamano terribile Un Oroginale de Pittsburg’’ infringed the ‘‘terrible towel’’ mark identified with the team for 35 years.

The mark is licensed to the team and belongs to the foundation, a nonprofit group that provided services to intellectually and developmentally disabled people. In the complaint, the team and foundation said that to no avail cease- and-desist letters were sent to Rossi beginning in June 2011.

They claimed they were harmed by the promotion and sale of the allegedly infringing towels, both through websites and on EBay Inc.’s auction site. They asked the court for money damages and profits derived for the sale of the Italian-language towels, together with awards of attorney fees, litigation costs and extra damages intended to punish the defendant for the infringement.

According to an Aug. 20 court filing, the parties reached an amicable resolution of the dispute. The court is retaining jurisdiction of the closed case to enforce the settlement, the terms of which were not disclosed in the filing.

Sports Illustrated reported that Rossi said made the towels to raise money for Italian earthquake victims and agreed to change the design to eliminate the word ‘‘terrible.’’

A federal appeals court last month rejected an appeal of a trademark-infringement decision involving the same trademark. In December 2011, a federal court in Pittsburgh found that a T- shirt company that had attempted to register ‘‘The Terrible T- shirt’’ as a trademark had infringed. In that case the company had actually printed up shirts bearing that mark, according to court papers.

The T-shirt maker filed an appeal with the 3rd U.S. Circuit Court of Appeals Jan. 10. The appeals court dismissed that case on July 18, saying no brief had been filed.

The case was AVS Foundation V. Eugene Berry Enterprise LLC, 11-cv-01084, U.S. District Court, Western District of Pennsylvania (Pittsburgh). The appeal was AVS Foundation V. Eugene Berry Enterprise LLC, 12-1039, U.S. Court of Appeals for the Third Circuit.

The newly settled case is AVS Foundation V. Rossi, 12- cv-01159, U.S. District Court, Western District of Pennsylvania (Pittsburgh).

Pussy Riot Seeking Russian Trademark on Name to Protect Its Use

Pussy Riot, the all-female Russian band sentenced to two years in jail after its protest in a Moscow cathedral, has begun the process of registering its name as a trademark, the Moscow News reported.

Mark Feigin, the feminist band’s lawyer, said the registration was undertaken to avoid the name of the group being used for ‘‘all sorts of questionable events and projects,’’ according to Moscow News.

He said the band didn’t mind that their songs were performed or items were produced using the group’s themes as long as the proceeds are used to fight the political system’s shortcomings, the Moscow News reported.

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Copyright

New Corp.’s Kim Williams Calls for Tougher Copyright Laws

Kim Williams, who heads News Corp. (NWSA)’s News Ltd., says tougher copyright laws are needed to combat the theft of digitized media, the Australian reported.

Williams, speaking to the Australian International Movie Convention, said a high level of piracy is occurring and Australia’s planned high-speed National Broadband Network will only exacerbate the problem, according to the Australian.

Williams said the NBN must take responsibility to ‘‘provide a safe super-highway for our digital economy,” and its mandate should include taking steps to halt illegal downloading, the Australian reported.

He claimed in his speech that those who persistently engage in illegal downloading are much less likely to go to the movies, or acquire content from legal sources, according to the newspaper.

Independent News Services Unit Didn’t Infringe, Court Rules

An Indian court ruled that the use of a small portion of a song in a television broadcast doesn’t constitute copyright infringement, IndiaTelevision.com reported.

The Delhi High Court ruled in a case filed by filmmaker Yash Raj Films, which had objected to the use of a portion of the “Salaam Namaste” song on a program on Independent News Services Pvt Ltd.’s India TV, according to IndiaTelevision.com.

The court said this minimal use of the content fell into “fair use” provisions of India’s copyright law, Indian Television.com reported.

Group Seeks Leave to Argue About Pornography’s Protectability

The First Amendment Lawyers Association has asked a federal court in Massachusetts for permission to file a friend-of-the court brief in a copyright case involving films with adult content.

The Chicago-based association is seeking permission to address an opinion expressed in an Aug. 10 order about legal protections afforded pornography. Magistrate Judge Leo T. Sorokin said that the law is “unsettled’ in many federal judicial circuits as to whether pornography ‘‘is entitled to protection against copyright infringement.’’

The brief was authored by Marc J. Randazza of Las Vegas, who is representing makers of adult-content films in copyright- infringement cases in multiple states. In his request for permission to file the brief, he argued that the organization ‘‘has been involved in many landmark cases defending erotic expression and adult entertainment,’’ and has been ‘‘on the front lines of defending free expression.’’

He also submitted the proposed brief in which he said pornography is both ‘‘legal and copyrightable, undermining any notion that it suffers from disfavor under the Copyright Act.’’

The case is Discount Video Center Inc. v. Does 1-29, 12- cv-10805, U.S. District Court, District of Massachusetts.

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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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