Sherlock Holmes, Zynga, Google: Intellectual Property

For Jonathan Kirsch, a Los Angeles attorney, it’s elementary: Sir Arthur Conan Doyle’s literary works published before 1923 are in the public domain.

Kirsch and Scott Gilbert of Chicago’s Hinshaw & Culbertson LLP are seeking to have the federal court in Chicago declare that most of Doyle’s books and stories involving his most famous creation -- Sherlock Holmes -- are no longer protected by copyright law.

The attorneys represent Leslie Klinger, an author who has written extensively on Holmes. Most recently, Klinger co-edited “A Study in Sherlock,” a Random House-published “collection of new and original short stories by prominent contemporary authors, all of which were inspired by” the Doyle stories, according to the complaint. He and his co-editor, Laurie King, are working on a sequel that is, according to the complaint, to be published by Pegasus Books and distributed by W.W. Norton.

The complaint alleges that while Random House agreed to a licensing agreement with the agent of the Conan Doyle estate, Pegasus Books hasn’t, spurring Klinger to file suit to clarify the copyright question.

“Part of the reason we’re litigating the question is because Sherlock Holmes has entered popular western culture in a fundamental way. Filmmakers and authors have a stock of material that they can innovate on -- like the Bible and Shakespeare. We believe that Sherlock Holmes has also entered that stock of public domain material that anyone can innovate on,” Kirsch said in a telephone interview on Feb. 15.

Benjamin Allison, an attorney with Sutin Thayer & Browne APC in Santa Fe, New Mexico, represents the Conan Doyle Estate. Allison didn’t respond to a call and e-mail seeking comment.

The case is Klinger v. Conan Doyle Estate, Ltd, 1:13- cv-01226, U.S. District Court, Northern District of Illinois (Chicago).

Zynga, Electronic Arts Agree to Settle Copyright Suit Claims

Electronic Arts Inc. and Zynga Inc. agreed to settle claims that Zynga’s “The Ville” game copied “The Sims Social,” an EA game that runs on Facebook.

“EA and Zynga have resolved their respective claims and have reached a settlement of their litigation in the Northern District of California,” Zynga spokeswoman Kelly Kunz and John Reseburg, an EA spokesman, said in separate e-mailed statements.

Electronic Arts, the second-biggest U.S. video-game publisher, had originally sued Zynga in August, claiming in a suit filed in federal court in San Francisco that senior executives who left for Zynga had details about “The Sims Social” strategy and development.

Zynga, the biggest developer of games played on Facebook, had countersued, seeking to bar Electronic Arts from threatening litigation or interfering with its hiring. It called the copyright claims meritless and said Electronic Arts’ suit breached the terms of an earlier settlement.

The settlement was first disclosed in a court filing in the lawsuit. Neither company would provide details of the accord.

The case is Electronic Arts v. Zynga, 12-4099, U.S. District Court, Northern District of California (San Francisco).

Megaupload Trying to Avoid Criminal Procedures, Prosecutors Say

Megaupload.com, the file-sharing website closed by the U.S., is trying to circumvent criminal procedure rules with claims including an accusation the government lied to get search warrants, prosecutors said.

The website’s claims are unfounded, they said in a filing Feb. 14 in federal court in Alexandria, Virginia. The U.S. accused Megaupload of generating more than $175 million in criminal proceeds from the exchange of pirated film, music, book and software files when it shut the site last year.

The U.S. and Megaupload are in dispute over the file- sharing site’s request to be allowed to take part in a civil lawsuit, filed by a U.S. man seeking to recover the data he stored on the website. Megaupload claims the U.S. misled the courts in obtaining warrants to shut down its websites, while the prosecutors argue the file-sharing site is seeking to illegally get information to defend itself in the criminal case.

“Megaupload has supplied nothing but a conspiracy theory,” in an attempt to be included in the civil lawsuit, the U.S. said in its filing. “Megaupload should not be able to use its participation in civil litigation as a sword to circumvent criminal discovery rules.”

Kyle Goodwin, who had started a business reporting on local high school sporting events in Ohio and stored videos on Megaupload, sued the U.S. to recover those files. The judge ruled he couldn’t make a decision without an evidentiary hearing.

Megaupload sought to intervene in the case, arguing it has relevant facts and is in the best position to retrieve Goodwin’s data. It said the issues of data preservation and consumer access are linked to its criminal defense.

Kim Dotcom, 39, the founder of Megaupload, was indicted in what U.S. prosecutors dubbed a “mega conspiracy.” If convicted, he faces as long as 20 years in prison for each of the racketeering and money-laundering charges in the indictment.

The U.S. shut down Megaupload without notice after charges against seven individuals, including Dotcom, were unsealed in court in January, 2012.

Megaupload’s lawyer Ira Rothken said in an e-mail Feb. 15 that the U.S. is trying to concoct a way out of taking responsibility for injuring millions of consumers.

The case is USA v. Dotcom. 12-cr-00003. U.S. District Court, Eastern District of Virginia (Alexandria). The extradition case is between Kim Dotcom and Attorney-General, Civ 2012-404-1928, High Court of New Zealand (Auckland).

For more copyright news, click here.

Patent

Apple, Samsung Name Allegedly Infringing Smartphones and Tablets

Apple Inc. and Samsung Electronics Co. identified products they allege infringe their patents for smartphones and tablet computers as part of a lawsuit in federal court in San Jose, California.

The filings Feb. 15 were made in a newer of two related patent cases. The lawsuit, scheduled for trial in March 2014, was filed last year and covers technology in newer smartphones made by both companies, including Samsung’s Galaxy S III and Apple’s iPhone 5.

In its filing, Cupertino, California-based Apple identified Samsung’s Galaxy Note smartphones and tablet computer. Samsung claimed “all generations” of Apple’s iPhone and iPads infringe at least three of its patents, according to its filing.

U.S. District Judge Lucy H. Koh last month rejected Apple’s request to add additional damages to the first patent infringement case between the two companies in San Jose. In that case, a jury awarded Apple $1.05 billion, finding the Suwon, South Korea-based company infringed six of the iPhone maker’s mobile-device patents.

Koh said last week she is considering freezing the more recent smartphone patent dispute scheduled for trial next year while an appeals court reviews the August verdict.

Last year’s case is Apple Inc. v. Samsung Electronics Co. Ltd., 11-cv-1846, the case scheduled for trial next year is Apple Inc. v. Samsung Electronics Co., 12-cv-630, U.S. District Court, Northern District of California (San Jose).

Intel Wins X2Y Patent Case Said to Imperil Chipmaker’s U.S. Jobs

Intel Corp. won a patent-infringement case some U.S. lawmakers said could have threatened jobs at the chipmaker’s U.S. manufacturing plants.

The U.S. International Trade Commission upheld, with modifications, trade Judge David Shaw’s findings that Intel didn’t violate the patent rights of closely held X2Y Attenuators LLC. Hewlett-Packard Co. and Apple Inc., which use Intel chips, were also named in the ITC complaint. Notice of the decision was posted Feb. 15 on the agency’s website.

X2Y asked the trade agency to block Intel’s chips using its technology from entering the U.S. The case drew the attention of lawmakers from both political parties who said a loss for Intel could harm U.S. jobs, because Intel does initial manufacturing work in the U.S. and final assembly in other countries.

The X2Y patents cover ways to overcome electromagnetic interference that can damage electronics. The company, which develops methods for improving the performance of circuits, licenses its inventions to Samsung Electronics Co., the world’s biggest maker of computer-memory chips. It doesn’t make any chips of its own.

Shaw said Intel didn’t infringe the three patents and two are invalid. The commission altered the judge’s interpretation of some patent terms without changing his underlying finding. The commission said it would more fully explain its reasoning in an opinion to be issued later.

“We’re gratified they upheld the judge’s opinion and now we can focus on defending ourselves in federal court in Pennsylvania,” said Chuck Mulloy, a spokesman for Santa Clara, California-based Intel.

Anne Standley of Edelman, a spokeswoman for X2Y’s law firm Alston & Bird, said the firm and company had no immediate comment.

The case is In the Matter of Microprocessors, Components Thereof, and Products Containing Same, 337-781, U.S. International Trade Commission (Washington).

Internet

Facebook Wins Ruling in Jurisdiction Fight With German Regulator

Facebook Inc. scored a court victory in Germany in a dispute with a local data regulator over which nation’s laws apply to its European operations.

The administrative court for Schleswig-Holstein suspended enforcement of an order saying Facebook must let users register under a pseudonym. The order is most likely illegal and shouldn’t apply while Facebook fights it, the court said on a statement on its website Feb. 15.

“The regulator wrongfully based its order on German data protection law,” the judges said. “Irish data protection law exclusively applies,” because Facebook handles the data in Ireland.

Facebook has been fighting orders from German regulators, arguing it’s only subject to Irish law which is generally less strict then German privacy rules. Facebook Ireland, in Dublin, is responsible for all the Palo Alto, California-based company’s users outside the U.S. and Canada.

Thilo Weichert, the state regulator who issued the pseudonym order, said he will appeal the ruling. German law clearly backs his order, he said in a statement on his website. Companies shouldn’t be allowed to withdraw to a European member state with “low data protection standard,” according to his statement.

European rules say German law doesn’t apply if the data is processed by a branch in another EU member state, the court said. Facebook’s German unit only works in marketing and sales and thus can’t trigger the application of German data protection law, the judges said.

Google May See Fine After Failing to Answer Privacy Concerns

Google Inc. may be fined by European Union data-protection agencies after failing to meet a deadline to say how it will bring its privacy policy in line with EU rules.

Google hasn’t provided “any precise and effective” responses to EU data-protection regulators’ recommendations, France’s National Commission for Computing and Civil Liberties, or CNIL, said in a statement yesterday.

EU regulators “are determined to act and continue their investigations” and take “repressive action” by summer, CNIL said, without defining what that may entail. CNIL led the probe on behalf of the other EU privacy agencies.

Google, operator of the world’s largest search engine, faces privacy investigations by authorities around the world as it debuts new services and steps up competition with Facebook Inc. for users and advertisers. Google changed its system to create a uniform set of policies for more than 60 products last year, unleashing criticism from regulators and consumer advocates concerned it isn’t protecting data it collects.

“Our privacy policy respects European law and allows us to create simpler, more effective services,” Mountain View, California-based Google said in an e-mailed statement yesterday. “We have engaged fully with the CNIL throughout this process and we’ll continue to do so going forward.”

Google also said it responded to the October letter on Jan. 8, listing changes already made to improve the privacy protections, and sought a meeting to discuss their findings. It said it hasn’t heard back.

CNIL spokeswomen didn’t immediately return calls and e- mails about Google’s response.

For more, click here.

In the Courts

Macy’s, Martha Stewart Living Head to Court Over Sales Agreement

Macy’s Inc., the second-largest U.S. department-store chain, will go to court in New York today to try to persuade a judge to permanently block Martha Stewart Living Omnimedia Inc.’s pact with J.C. Penney Co.

Macy’s sued Martha Stewart Living in New York State Supreme Court in Manhattan in January 2012 to stop it from proceeding with an agreement announced with J.C. Penney the previous month. Macy’s claims it has an exclusive right to sell Martha Stewart- branded products in categories such as bedding and cookware.

A nonjury trial in the case is set to start this morning before state Supreme Court Justice Jeffrey K. Oing in Manhattan, who in July granted Cincinnati-based Macy’s a preliminary injunction blocking Martha Stewart Living from taking any steps with J.C. Penney on products in the exclusive categories.

In August, Macy’s sued J.C. Penney in the same court, seeking to block it from proceeding with the Martha Stewart Living agreement. Oing denied Macy’s request in that case, saying that the company hadn’t proved it was likely to succeed on claims that J.C. Penney had engaged in tortious interference and unfair competition.

Macy’s said J.C. Penney and Martha Stewart Living “made a conscious business decision” not to disclose their talks to Macy’s until the contract was signed so it could avoid the risk of a restraining order that would bar the agreement.

Martha Stewart Living has defended its agreement with J.C. Penney, accusing Macy’s of breach of contract and saying the retailer stocked and priced Martha Stewart products in a manner that favors private-label brands. Martha Stewart Living also said Macy’s couldn’t have exercised a five-year renewal option on the agreement because of the breach.

For more, click here.

The cases are Macy’s Inc. v. Martha Stewart Living Omnimedia Inc., 650197/2012, and Macy’s Inc. v. J.C. Penney Corp., 652861/2012, New York State Supreme Court (Manhattan). The case is Macy’s Inc. v. Martha Stewart Living Omnimedia Inc., 650197/2012, New York state Supreme Court (Manhattan).

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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