Patent Trolls, Castel, Obamacare: Intellectual Property

A large number of trade groups have sent a letter to Congress supporting expansion of review of business method patents.

They said in the Oct. 28 letter that patent assertion entities -- known pejoratively as “patent trolls” -- that do not make or sell new products or develop new technologies are imposing “huge costs” on American businesses.

They noted that in 2011-2012, almost 7,000 businesses were sued by this category of patent holder and that the number of companies sued over business-method patents has increased an average of 28 percent a year since 2004.

Because of the high cost of patent litigation -- averaging $6 million per case -- small companies have little recourse but to settle, even if the patents asserted may be invalid, according to the letter. Small companies that have been targeted are in a no-win situation in which they must either pay lawyers to defend them or pay licensing fees to the patent owners.

They are asking that a patent office review program set up to look at finance-related patents be expanded to cover other classes of patents. Present programs at the U.S. Patent and Trademark Office don’t allow the office to consider whether a patent is abstract, vague or too broad, the group says, claiming that many of the business-method patents for which they are being sued by patent owners fall into these categories.

Among the signers of the letter are Airlines for America, American Hotel & Lodging Association, Food Marketing Institute and National Retail Federation, as well as the National Association of Realtors, the National Grocers’ Association and the American Public Power Association.

Additionally, San Francisco-based Electronic Frontier Foundation, a digital rights organization, signed the letter, as did New York’s Public Patent Foundation.

Digital Alley Says It Doesn’t Infringe Utility Associates Patent

Digital Ally Inc., a maker of digital security products for law enforcement, asked a court to declare it doesn’t infringe a patent belonging to Utility Associates Inc. of Tucker, Georgia.

At issue is a patent covering a mobile digital information system. Digital Ally makes digital recorders, including a police flashlight that records video whenever it is switched on.

According to the complaint filed Oct. 25 in federal court in Kansas City, Kansas, Utility Associates has sent letters to some Digital Ally customers, claiming that use or purchase of Digital Ally products infringe patent 6,831,556. Two of these customers are the state of Nebraska and the state of New York, Digital Ally says.

Officials from both states have contacted Digital Alley seeking information about the threat of litigation, according to court papers.

Digital Ally says that the patent at issue was issued in December 2004 and has changed hands multiple times. The systems made by Lenexa, Kansas-based Digital Ally said its products that are accused of infringement are essentially similar to devices the company has been selling since 2006.

The company claims that because the products have been on the market for this long, Utility and previous owners of the patent have “delayed and remained silent” about the alleged infringement until Digital Alley invested “substantial resources” into manufacturing and promoting its products.

If Digital Ally had been informed of the alleged infringement earlier, the company said it could have dedicated resources to “re-designing, as necessary, around the technology” claimed by the patent.

The Kansas company also said in its pleadings that it had met with a previous owner of the patent who “misled Digital Ally into believing” that the patent wouldn’t be used against it.

Digital Ally asked the court to declare that neither the company’s products nor its customers infringe the patent, and that the patent is unenforceable because of the owners’ delay in asserting it.

Additionally, the company asked for an order barring Utility from claiming Digital Ally’s products or their use infringe the patent.

Utility Associates didn’t respond immediately to an e-mailed request for comment.

The case is Digital Ally v. Utility Associates Inc., 3:13-cv-02550-SAC-KGS, U.S. District Court, District of Kansas (Kansas City).

For more patent news, click here.

Trademark

Castel Says it Will Take Trademark Dispute to China’s High Court

Castel Group, the French producer of wine, beer and soft drinks, has asked China’s Supreme Court to hear its trademark dispute with Panati Wine, Decanter.com, the beverage-industry magazine, reported.

Earlier this year Castel was ordered to pay $5.6 million in damages to Panati Wine, a Shanghai-based wine distributor, for infringing Panati’s “KaSiTe” trademark, according to Decanter.

Castel says the lower court ruling was erroneous, Decanter reported.

Castel has registered “Kasidaile” as a Chinese trademark, the company said and Decanter reported.

HR Firm Plans Commonwealth Bank Suit Over Name Confusion

HR Anywhere, a Melbourne-based human resources firm, said it will file a suit against Commonwealth Bank of Australia following a trademark dispute over the bank’s use of “HR Anywhere” as the name for its human resources Web portal, Smart Money reported.

Although the bank has already agreed to quit using the name, HR Anywhere says the name confusion cost the human resources company as much as A$200,000 ($191,000) in lost revenue, according to Smart Money.

Martin Nally, founder of the HR firm, said he learned of the problem in February when some of Commonwealth Bank’s 50,000 employees began to call his company seeking help with human resources problems, Smart Money reported.

A bank spokesman told Smart Money the bank is in the process of changing the name for its program.

Bankrupt AIDS Charity Sells Trademark to New Advocacy Group

A bankruptcy judge in Maryland has agreed to reopen a case involving an AIDS charity so that the charity’s trademark can be sold, the Washington Blade reported.

The mark “National Gay Men’s HIV/AIDS Awareness Day” will be sold for $3,000 to Health HIV, a new organization based in Washington, the Blade reported.

The mark was owned by the National Association of People With AIDS, which closed in February and filed for bankruptcy protection after its longtime president left with what court filings indicated was an unexplained accounts receivable claim, according to the Blade.

Brian Hujdich, executive director of Health HIV, told the Blade that no one from the National Association of People with AIDS would be involved in financial aspects of the new organization.

For more trademark news, click here.

Copyright

Obamacare Website Adds in Missing Copyright Notice, License

The website set up for people to sign up for the health-care program known as Obamacare has corrected a copyright oversight, the Weekly Standard reported.

The site -- Healthcare.gov -- had been failing to attribute a copyrighted Web script, according to the Weekly Standard.

The site now contains the copyright notice and license for its use, the publication reported.

The script was authored by SpryMedia, according to the Weekly Standard.

Pinterest to Take a License to Getty Images’ Photos and Data

Pinterest Inc., the social media site through which users share photos, ideas and recipes, signed an agreement with Getty Images Inc. for the use of its images, the Palo Alto, California-based company said in a statement.

The license covers data associated with the images as well as the images themselves, Pinterest said in the statement.

Under the terms of the agreement, Pinterest says it will pay fees to Seattle-based Getty for the data and images, and “will make sure their images get proper attribution.”

Pinterest Inc. said Oct. 24 it raised $225 million in a financing round that values it at $3.8 billion, as the Internet-scrapbooking startup seeks to expand and develop a model for generating revenue.

The company said it plans to use the new capital to expand internationally. The startup recently rolled out sites in the U.K., Italy and France, and is planning to start its service in 10 more countries this year,

In addition, Pinterest said it is working on investing in its mobile service, testing its advertising and revenue model, and spending on technical infrastructure. The company also said it may use the money on “strategic acquisitions of both talent and technology.”

Vkontakte Wins Copyright Suit, Will Start Paid Music Service

Vkontakte, the Russian social-networking site, has won a copyright case with the music label Soyuz, Billboard reported.

A court in St. Petersburg ruled that neither the site nor Vkontakte’s employees were liable for the music tracks uploaded by its users, according to Billboard.

In 2012 Vkontakte lost a similar suit brought by Gala Records, also a Russian label, Billboard reported.

According to Billboard, Vkontakte Deputy General Director Ilya Perekopsky has said his company is in negotiations with music companies to create a paid music service.

For more copyright news, click here.

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

Press spacebar to pause and continue. Press esc to stop.

Bloomberg reserves the right to remove comments but is under no obligation to do so, or to explain individual moderation decisions.

Please enable JavaScript to view the comments powered by Disqus.