E-Books, Sony Music, Glaxo, IBM: Intellectual Property

Facebook Inc. (FB), operator of the world’s most popular social-networking website, must convince a Chicago federal court jury that its Timeline feature isn’t trampling the trademark rights of the website Timelines.com.

Timelines Inc., the operator of that site, sued Facebook in September 2011, a week after the social network announced it was converting user-profile pages previously known as walls to individual chronologies and calling the new feature “Timeline.”

Announcing its new profile design, Facebook founder and Chief Executive Officer Mark Zuckerberg called Timeline “the heart” of a user’s experience. Facebook has more than a billion monthly users, according to its website.

Timelines, which has about 94,000 visitors a month, is scheduled to go to trial today seeking to stop Facebook from using the word “timeline,” contending it has held a federal trademark on the use of “timelines” in the realm of user-created Internet chronologies since 2009.

The Chicago-based company’s website allows user-members to create timelines and add events to existing ones including those for space exploration, sporting events, battles and assassinations.

Timelines is seeking damages equivalent to Facebook’s Timeline-derived ad revenue, plaintiff’s attorney Douglas Albritton said in a phone interview this month.

Facebook, based in Menlo Park, California, counter-sued, contending “timeline” is too generic for federal trademark protection and arguing that the registrations should be canceled.

“Plaintiff’s description of its services reflects the common understanding of the term ‘timeline’ in the English language,” defense lawyers said in a January court filing asking U.S. District Judge John W. Darrah for a ruling it its favor ending the case.

Darrah on April 1 denied Facebook’s motion, setting it on course for today’s trial in his court.

The case is Timelines Inc. v. Facebook Inc., 11-cv-06867, U.S. District Court, Northern District of Illinois (Chicago).

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Patent

Penguin Offers Changes to Settle EU’s E-Books Antitrust Probe

Pearson Plc (PSON)’s Penguin offered to overhaul pricing models for digital books to settle a European Union antitrust probe into whether they blocked competition.

Penguin won’t “restrict, limit or impede” e-book retailers’ discounts or their ability to “set, alter or reduce retail prices for e-books” for two years, according to details of the proposed changes as published in the EU’s Official Journal April 19. Apple Inc. (AAPL), the world’s biggest technology company, and four publishers previously offered similar remedies to allay European concerns.

The EU said Penguin, together with the four publishers and Apple, “may have breached EU antitrust rules that prohibit cartels and restrictive practices by jointly switching the sale of e-books from a wholesale model to agency contracts containing the same key terms,” the Brussels-based European Commission said in a statement. The companies “may have engaged in a concerted practice with the object of raising retail prices of e-books” or blocking lower prices in Europe, it said.

The EU’s antitrust regulator is giving competitors and customers until May 19 to comment on the proposed remedies, which could then become legally binding in a settlement that would end the investigation without imposing fines or determining that the companies violated competition rules. The commission said it will conduct another such market test “if substantial changes to the commitments are subsequently made.”

Penguin said that “subject to the market test currently under way, it has reached an agreement with the European Commission to settle its investigation,” according to an e-mailed statement on Friday.

“Penguin’s position that it has done nothing wrong remains unchanged and the company continues to believe that the agency pricing model operates in the best interests of consumers and authors,” the company said in the statement.

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Glaxo Gets OFT Complaint for Paying to Delay Seroxat Copies

GlaxoSmithKline Plc (GSK) was sent an antitrust complaint by U.K. regulators who say the company may have colluded with generic-drug makers to keep copies of its Seroxat antidepressant off the market.

Glaxo, the U.K.’s biggest drugmaker, may have paid Alpharma Ltd., Generics (U.K.) Ltd. and a unit of Teva Pharmaceutical Industries Ltd. (TEVA) to delay the release of cheaper, copycat versions of the drug, the U.K. Office of Fair Trading said on its website. Seroxat was one of Glaxo’s best-selling drugs from 2002 through 2004, when the agreements were in place, the OFT said.

“The introduction of generic medicines can lead to strong competition on price, which can drive savings for the NHS, to the benefit of patients and, ultimately, taxpayers,” said Ann Pope, a director at the OFT, referring to the U.K.’s publicly funded National Health Service.

Antitrust regulators on both sides of the Atlantic are focusing on how settlements between companies that make branded medicines and generics producers might harm consumers. Les Laboratoires Servier, H. Lundbeck A/S (LUN) and Teva, the world’s largest generic-drug maker, were sent statements of objections last year by the European Union’s antitrust watchdog over possible delays for generic drugs.

The OFT probe covers matters already examined by the EU without subsequent sanctions, David Daley, a spokesman for the London-based company, said by e-mail.

Glaxo “supports fair competition and we very strongly believe that we acted within the law, as the holder of valid patents for paroxetine, in entering the agreements under investigation,” Daley said in an e-mail, referring to the active ingredient in Seroxat.

Glaxo and the generic companies were sent so-called statements of objections, the OFT said. Daley said the company will need time to review the documents before considering any further action.

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Copyright

Songwriter Settles Suit Against Sony and Alicia Keys

Earl Shuman, who wrote the song “(Hey There) Lonely Girl” has settled a suit filed in December against Sony Music, Alicia Keys and several other defendants. He claimed that Keys’ latest hit, “Girl on Fire,” sampled several seconds of his song without authorization or payment. The song, which he co-wrote with Leon Carr, was a hit in 1969 and 1980.

The terms of the settlement weren’t disclosed.

Los Angeles attorney Philip Kaplan, who represented Shuman, didn’t return a call seeking comment. Sony Music, a division of Sony Corp. (SNE), declined to comment.

The case is Shuman v. Sony Entertainment, 2:12-cv-10572, U.S. District Court for the Central District of California (Los Angeles).

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Deals

Venture Capital Investments Drop in First Quarter of 2013

From January through March, according to the National Venture Capital Association, 863 companies received $5.867 billion in venture capital investments.

The amounts reflect a decline of 12 percent in dollar amounts and 15 percent in the number of deals from the fourth quarter of 2012, when $6.7 billion was invested in 1,013 deals.

The NVCA said that the life sciences and clean technology sectors faced the most severe decreases, while there were “notable” increases in the media and entertainment industry.

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Lenovo Said to Be in Talks to Buy Parts of IBM Server Unit

Lenovo Group Ltd. (992), the Chinese personal-computer maker, is the most likely bidder for parts of International Business Machines Corp. (IBM)’s server division, a person familiar with the matter said.

The business, which sells servers running x86 processors, may fetch $2.5 billion to $4.5 billion depending on what assets and liabilities are included, said the person, who asked to not be named because the talks are private. An agreement may still be several weeks away, the person said.

Lenovo used the 2005 purchase of IBM’s PC unit as a steppingstone to become the world’s second-largest producer.

The talks were previously reported in CRN, a publication aimed at technology integrators. In response to the story, Lenovo said it was in “preliminary” discussions about a potential acquisition with a third party, which it didn’t name.

Jeffrey Shafer, a Lenovo spokesman, said in an e-mail he had no additional comment beyond that statement.

IBM Chief Financial Officer Mark Loughridge said on his company’s earnings call that he wouldn’t comment on rumors. Ed Barbini, a spokesman for Armonk, New York-based IBM, also declined to comment on the Lenovo talks.

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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