EchoStar, Nintendo, VirnetX: Intellectual Property

EchoStar Corp. (SATS)’s Sling Media, whose gadgets lets users watch live television shows on their mobile devices, filed a U.S. trade complaint seeking to keep its competitors out of the burgeoning market.

Sling Media claims Belkin International Inc.’s @TV Plus and @TV Premium and Monsoon Multimedia Inc.’s Vulkano and HAVA devices are using a technology it invented called place-shifting technology, which allows media stored on one device to be accessed on another. The company contends its rivals infringe six patents.

The EchoStar unit makes the Slingbox, a device that lets customers get their pay-TV channels “slung” to laptops, smartphones and tablet computers. The patented inventions are incorporated in the company’s new Slingbox 350 and Slingbox 500, as well as Dish Network Corp. (DISH)’s Hopper With Sling set-top box.

“Sling Media has invested tens of millions of dollars in research and development,” the company said in the complaint filed with the U.S. International Trade Commission.

Rachel Jones-Pittier, a spokeswoman for Playa Vista, California-based Belkin, didn’t immediately return a voice-mail message seeking comment. A phone message left with FortyThree PR, an agency that handles press inquiries for Monsoon according to the technology company’s website, also wasn’t immediately returned.

The ITC complaint, filed March 12 in Washington, also targets chips made by San Jose, California-based C2 Microsystems Inc. for the Belkin and Monsoon products. The company couldn’t immediately be reached for comment.

The devices allow consumers to watch their favorite show when it airs without being tied to the television or waiting for it to become available on cable companies’ on-demand services. Charlie Ergen, chairman of Englewood, Colorado-based EchoStar, bought Sling Media in 2007 and has used it as part of a strategy to push the satellite-technology company and Dish, which he also runs, into Internet and on-demand services.

Sling Media also filed a lawsuit against closely held Belkin and Monsoon in January over some of the same patents. That case is pending.

In addition to its Vulkano devices, San Mateo, California- based Monsoon makes circuit boards that are used in Belkin products, according to the complaint. Sling Media said the Monsoon and Belkin products are made in China.

The ITC is a quasi-judicial agency that investigates allegations of unfair trade practices, including patent infringement, and has the power to block products from entering the U.S. It typically completes investigations in 15 to 18 months.

The case is In the Matter of Certain Electronic Devices Having Placeshifting or Display Replication Functionality and Products Containing Same, Complaint No. 2943, U.S. International Trade Commission (Washington).

Nintendo Told by Jury to Pay $30 Million in 3-D Patent Suit

Nintendo Co. (7974) was ordered to pay $30.2 million to a former Sony Corp. (6758) employee after a jury in New York found the company’s 3DS machine infringed his patent.

The handheld 3DS game and video player infringed a 3-D technology patent held by Seijiro Tomita, the Manhattan jury found March 13, according to the office of U.S. District Judge Jed Rakoff, who tried the case.

Tomita, who worked for Sony for almost 30 years before quitting in 2002, sued Nintendo in June 2011. That year Nintendo, the world’s biggest video-game console maker, introduced the 3DS, which allows users to see 3-D images without special glasses. Nintendo said it will appeal.

“We believe we can win a ruling that our 3DS doesn’t infringe the patent,” Yasuhiro Minagawa, a spokesman for Nintendo, said by phone.

In April 2012 Rakoff denied Nintendo motions for judgment without a trial on the grounds that Tomita couldn’t prove either that Nintendo infringed the patent or that it had willfully infringed it.

“A reasonable jury could find, based on clear and convincing evidence, that Nintendo’s defenses are so unpersuasive that an objectively high likelihood of infringement in fact exists,” Rakoff said in a memo explaining his ruling.

Tomita said he met representatives of Nintendo in August 2003 to demonstrate his technology, according to court papers. A month later, he was asked to create a sample for the company, according to the filings. Tomita said he requested payment or a licensing agreement and received no response. He said he had no “direct communications” with Nintendo from September 2003 until the suit was filed in 2011.

“The same employees who attended the demonstration helped to develop the 3DS, and a reasonable jury could find that they would have understood the similarities between the 3DS and the prototype Mr. Tomita had shown them,” Rakoff wrote.

Nintendo released its latest home console, the Wii U, last year.

Tomita Technologies Ltd. is based in Yokohama, Japan.

The case is Tomita Technologies USA v. Nintendo Co., 1:11- cv-04256, U.S. District Court, Southern District of New York (Manhattan).

VirnetX Loses Patent Trial to Cisco Over Private Networks

VirnetX Holding Corp. (VHC) lost a patent-infringement trial against Cisco Systems Inc. (CSCO), as a jury cleared the networking- equipment maker of allegations it infringed inventions related to virtual private networks.

A jury in Tyler, Texas, said the company’s patents weren’t infringed. VirnetX was seeking $258 million in damages.

The dispute is over virtual private networks, through which a website owner can securely interact with a customer or an employee can work at home and have protected access to a company’s electronic files. Doug Cawley of McKool Smith, a lawyer representing VirnetX, said Cisco used the technology to improve security in its own networks.

VirnetX won a $368.2 million verdict against Apple Inc. (AAPL) in November over the same technology, including two of the same patents, before a different Tyler jury. In 2010, Zephyr Cove, Nevada-based VirnetX reached a $200 million settlement with Microsoft Corp. over the same inventions.

The case decided yesterday focused on Cisco routers, software and phones that have virtual-private-networking functions including its Unified Communications Manager product, Telepresence or AnyConnect. Cisco, whose products handle traffic over the Internet, reported sales of $12.1 billion in the quarter ended Jan. 26.

VirnetX relies on patent licensing for its revenue. The company is testing its Gabriel Connection Technology to create secure communications links, according to its annual report.

U.S. District Judge Leonard Davis, who is presiding over the Apple and Cisco cases, on Feb. 26 upheld the jury verdict against Apple. Davis denied a VirnetX request for an order that would have limited Apple’s ability to provide virtual private networks on its products.

The case is VirnetX Inc. v. Cisco Systems Inc., 10-cv- 00417, U.S. District Court, Eastern District of Texas (Tyler).

ISE Opts Out of CBOE Patent Trial in Favor of Appellate Path

International Securities Exchange LLC, an all-electronic options trading market, opted out of a patent trial against Chicago Board Options Exchange Inc. on the day its lawyers were to deliver opening statements to a jury.

U.S. District Judge Joan H. Lefkow, who was presiding over the lawsuit in federal court in Chicago, issued a series of adverse pre-trial rulings that compelled ISE to “cease pursuit of the case,” it said in a statement yesterday.

The Deutsche Borse AG unit alleged the Chicago exchange infringed an automated trading patent. CBOE, in a separately filed case, asked Lefkow to find the ISE patent was invalid.

“ISE strongly believes in the merits of its case that CBOE copied and continues to infringe ISE’s patented trading technology,” the New York-based company said. “ISE plans to immediately file an appeal to the Federal Circuit to reverse these rulings.”

The trial, which was set to start on March 11 and delayed for three days while Lefkow addressed the preliminary motions, was one of at least three legal disputes between ISE and Chicago-based CBOE Holdings Inc. (CBOE), operator of the biggest U.S. options exchange.

Jurors were discharged yesterday without ever hearing arguments or evidence in the trial Lefkow had told them on March 11 would last until early April.

Jonathan Marshall of New York’s Fish & Richardson PC, an attorney for the CBOE, said in a courtroom interview that lawyers for ISE asked the judge to enter a judgment of non- infringement, freeing ISE to appeal.

ISE concluded the “net effect of the rulings would make it impossible to make their case at trial,” Marshall said.

In one ruling, made public on March 11, Lefkow had barred ISE from presenting evidence of pre-suit damages to the jury, concluding that the exchange had failed to comply with a federal “marking statute,” requiring it to make public its patent claim.

“We are gratified that this case has reached the correct result,” CBOE Chairman and Chief Executive Officer William J. Brodsky said in a statement.

The cases are Chicago Board Options Exchange Inc. v. International Securities Exchange LLC, 07-cv-00623, and International Securities Exchange LLC v. Chicago Board Options Exchange Inc., 07-cv-04709, U.S. District Court, Northern District of Illinois (Chicago).

For more patent news, click here.

Trademark

Kweichou Mountai’s ‘National Liquor’ Trademark Draws Complaints

Kweichou Moutai Co. (600519), a Chinese distiller, registered “national liquor” as a trademark, generating protests from domestic competitors, People’s Daily reported.

Competing distillers have threatened to go to court and claim the issuance of the mark violated Chinese trademark regulations, according to the newspaper.

They claim issuing the mark gave Guizhou province-based Kweichou Moutai an unfair advantage, falsely suggesting the company produces the best quality product.

For more trademark news, click here.

Copyright

Universal Loses Appeal Bid to Restore Veoh Copyright Suit

Copyright claims by Universal Music Group and other studios against the Internet video-site operator Veoh Networks Inc. were properly dismissed, a federal appeals court ruled.

Veoh was protected from the claims by “safe harbor” provisions of the Digital Millennium Copyright Act, which shields Internet service providers that unknowingly post copyrighted material and remove it when alerted, a three-judge panel in San Francisco said yesterday.

The court previously ruled in favor of Veoh in 2011, granting the studio’s request for rehearing. It issued a new opinion yesterday. The lawsuit was filed in 2007 against Veoh and its backers. Most of Veoh’s assets were acquired in 2010 by Qlipso Media Networks Ltd.

Universal Music is a unit of Paris-based Vivendi SA. (VIV)

Steven Marenberg, an attorney for Universal, didn’t immediately reply to a voice-mail message seeking comment about the ruling.

The case is UMG Recordings Inc. v. Veoh Networks Inc., 10- 0955902, U.S. Court of Appeals for the Ninth Circuit (San Francisco).

Pirate Bay Founders’ Infringement Appeal Rejected by Court

The European Court of Human Rights held that the conviction of two founders of the Pirate Bay file-sharing site for criminal copyright infringement was justified.

In a March 13 ruling, the court said it rejected the argument of Frederik Neij and Peter Sunde Kolmisoppi that their sharing of content was permitted under guarantees of freedom of expression.

The material they shared was protected under copyright law and the conviction “pursued the legitimate aim of protecting copyright,” the court said.

The interference with the two defendants’ freedom of expression “had been necessary in a democratic society,” the court ruled, finding their appeal to be “manifestly ill- founded.”

Judge Says Filing in Downloading Case ‘Gamesmanship’

In a case involving unauthorized downloading of adult films, a federal judge in Los Angeles told counsel for the film company that one of its recent court filings lacked merit and “exemplified gamesmanship.”

U.S. District Judge Otis Wright II said a March 11 hearing “raised questions” about the conduct of counsel and other parties and suggested they may be culpable for sanctionable conduct and may have defrauded the court through their actions.

Counsel and other parties were ordered to appear at a March 29 hearing and show why they shouldn’t be sanctioned.

The case is Ingenuity13 LLC v. Doe, 12-cv-08333, U.S. District Court, Central District of California (Los Angeles). For more copyright news, click here.

To contact the reporter on this story: Victoria Slind-Flor in San Francisco at vslindflor@bloomberg.net

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

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