An arbitrator ordered Hasbro Inc. (HAS) to pay about $72.9 million in royalties to Atlanta-based Johnson Research & Development Co., one of its licensors, over the toymaker’s line of Nerf guns.
Johnson Research has a separate case pending in federal court in Atlanta which seeks royalties from Hasbro’s line of the popular Super Soakers, which were invented 25 years ago by Johnson’s founder, Lonnie G. Johnson, an engineer.
The royalties claimed are somewhat unusual. They relate to Hasbro products that are based on the appearance of products that are manufactured using technology licensed from Johnson Research.
Johnson initiated both the arbitration and the litigation in February. The allegations in both the arbitration and litigation are similar, Benjamin Easterlin IV, Johnson’s lawyer, said in a telephone interview yesterday. He said that the case in federal court is in the discovery phase.
Hasbro “strongly disagrees with the arbitrator’s ruling and is considering all possible appeals and challenges to the award,” according to a statement from the Pawtucket, Rhode Island-based company.
In the statement, the toymaker said it “anticipates taking an additional charge to its earnings for” the fiscal third quarter, which ended Sept. 29. Its stock closed yesterday at $51.65, a drop of one percent.
The arbitration award isn’t public yet.
The Super Soaker case is Johnson Research & Development Co. v. Hasbro Inc., 1:13-cv-00451, U.S. District Court, Northern District of Georgia (Atlanta).
Sequenom’s Patent for Prenatal Testing Invalidated by Judge
A prenatal test produced Ariosa Diagnostics Inc. doesn’t infringe a patent licensed by Sequenom Inc. (SQNM), a federal court ruled.
U.S. District Judge Susan Illston in San Francisco found that Ariosa’s Harmony test, which uses cell-free fetal DNA in a pregnant woman’s blood to determine fetal abnormalities, didn’t infringe Sequenom’s patent 6,258,540. The patent, according to the Oct. 30 opinion, relates to prenatal detection methods that are “non-invasive” and can be used instead of tests such as amniocentesis.
Illston, following Supreme Court decisions that prohibit the patenting of “laws of nature and natural phenomena,” found that Sequenom’s patent was invalid. The judge agreed with San Jose, California-based Ariosa that the methods contained in the patent were insufficient to find it valid.
In a filing with the Securities and Exchange Commission yesterday, San Diego-based Sequenom said it disagrees with the order and will appeal to the Federal Circuit Court of Appeals.
Sequenom yesterday dropped 23 percent to close at $1.92.
The case is Ariosa Diagnostics, Inc. v. Sequenom, Inc., 11-06391, U.S. District Court, Northern District of California (San Francisco).
Victoria’s Secret, Delta Websites Caught in Translation Spat
MotionPoint Corp., a maker of technology that translates business websites into foreign languages for customers such as Victoria’s Secret Stores LLC and Delta Air Lines Inc. (DAL), is asking a judge not to block its core product in a patent lawsuit brought by a rival.
A federal jury in Oakland, California, found in July that closely held MotionPoint, whose customers also include the U.S. Centers for Disease Control, directly infringed a patent held by TransPerfect Global Inc. and should pay $1 million in damages. New York-based TransPerfect, whose customers include Home Depot Inc. (HD) and American Airlines Inc., is seeking a permanent injunction barring the sale or use of MotionPoint technology that directly or indirectly infringes the patent.
The two companies have competed head-to-head for customers, with closely held TransPerfect losing clients to MotionPoint and at times lowering its prices as much as 20 percent to compete, Michael Eisenberg, TransPerfect’s lawyer, said in a court filing.
“TransPerfect would risk losing potential new customers for its entire range of products and services, which is a recognized harm found to support an injunction,’ Eisenberg said in the filing.
‘‘I would not enjoin your entire system,’’ U.S. District Judge Claudia Wilken said at a hearing yesterday. ‘‘What I would enjoin is the infringing portion. I think it is the kind of case that would involve an injunction.’’
Wilken ordered both companies to file arguments about what an injunction should include and enter mediation to try to settle the dispute. She didn’t rule on whether to grant an injunction.
If an injunction isn’t granted, TransPerfect may seek a running royalty rate of more than 4 percent of sales of infringing technologies.
‘‘We are not seeking an injunction of what they are not infringing,” Douglas Lumish, an attorney for TransPerfect, said during the hearing. “We would be happy to negotiate it with them.”
MotionPoint, based in Coconut Creek, Florida, provides translation services for more than 1,800 websites, its lawyers said in a court filing. An injunction targeting its services on customer websites would “deny hundreds of thousands, if not millions, of foreign language speakers access to translated versions of websites,” Matt Robson, MotionPoint’s attorney, said in a court filing.
The case is TransPerfect Global Inc. v. MotionPoint Corp., 10-cv-02950, U.S. District Court, Northern District of California (Oakland).
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Tiffany Wins Injunction, Damages Against Counterfeiters
Tiffany & Co. (TIF) won a trademark case filed earlier this year against 78 companies that sold counterfeit Tiffany jewelry on their websites.
U.S. District Judge Kenneth Marra in Miami awarded the company $2.18 million in damages on Oct. 29 along with a permanent injunction.
The 78 defendants sold counterfeit Tiffany goods via websites which also infringed Tiffany’s trademarks, such as salestiffany.net, shoptiffanyco.com, tiffanyandcomall.com and bluejewelrybox.com. The judgment required that the website operators’ domain names be transferred to Tiffany.
Michael Kowalski, chairman and chief executive officer of Tiffany, said in a statement, “Trademark counterfeiting severely damages brand owners and consumers alike. The way to stop it is to take aggressive action against the counterfeiters and make them pay, civilly.”
Tiffany operates jewelry stores and manufactures products through its subsidiaries and doesn’t authorize the sale of its merchandise through any third-party websites. Authentic Tiffany merchandise can only be purchased online through www.tiffany.com.
Tiffany was represented by Stephen Gaffigan, a Fort Lauderdale, Florida, lawyer who specializes in counterfeiting suits.
In February, Tiffany accused Costco Wholesale Corp. (COST) in a lawsuit of selling counterfeit Tiffany diamond engagement rings. Costco isn’t authorized to sell Tiffany items, the New York-based jewelry retailer said in its complaint.
The case is Tiffany (NJ) LLC v 925jewelryonline.com, 13-cv-61311, U.S. District Court, Southern District of Florida (West Palm Beach).
Nestles Sued for Trademark Infringement Over Pet Food Line
Nestle Purina PetCare Co., a unit of Nestle SA (NESN), was sued by Nature’s Variety Inc., a closely held pet food company, for trademark infringement.
The lawsuit, filed Oct. 30 in federal court in New York, alleges that Nestle’s Purina One Smart Blend True Instinct Pet food is packaged “bearing a mark that is confusingly similar” to Nature’s Variety Instinct mark for its pet food products. The complaint says that Instinct brand is Nature’s Variety best-selling brand, “formulated to approximate the ancestral diet of dogs and cats, consisting primarily of proteins, and are grain-free and gluten-free.”
While the complaint doesn’t disclose revenues, it says that 80 percent of the company’s sales come from the brand, which is sold at independent retailers as well as Petco Animal Supplies Inc.
Keith Schopp, a spokesman for St. Louis-based Nestle, said in an e-mail that the company is “aware of the lawsuit filed by Nature’s Variety. We are confident it is without merit and will vigorously defend ourselves.”
Weil, Gotshal & Manges LLP represents St. Louis-based Nature’s Variety.
The case is Nature’s Variety Inc. v. Nestle Purina Petcare Co., 13-CV-07676, U.S. District Court, Southern District of New York (Manhattan).
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Marvin Gaye’s Children Countersue Over Hit ‘Blurred Lines’
Two of Marvin Gaye’s children, Nona Marvisa Gaye and Franklin Christian Gaye, sued singer Robin Thicke, his co-producers Pharrell Williams and Clifford Harris Jr. and others Oct. 30 over the summer’s blockbuster hit “Blurred Lines.”
The Gaye family claims that the song infringed their father’s classic “Got to Give It Up” because of the “substantial similarities.” They also allege that other Thicke songs copied Gaye’s “After the Dance” and “I Want You,” and they name music publishers as well as the recording artists.
The suit was filed as a counterclaim to the case Thicke and others filed in August seeking a judgment that the song didn’t infringe Gaye’s classic. Both cases are in federal court in Los Angeles.
Howard King, who represents Thicke, Williams and Harris, said the counterclaim wasn’t a surprise. He said in a telephone interview yesterday that after the Gaye family initially complained about the song, they attempted to reach a settlement, “not out of a sense of responsibility, but because we didn’t need the controversy. But we couldn’t make the Gaye children happy.”
The complaint also accuses music publisher EMI of breach of contract and fiduciary duty for allegedly failing to protect the copyrights for the Gaye songs. EMI, now owned by Sony/ATV Music Publishing, a division of Sony Corp., (SNE) publishes music produced by Williams.
Sony-ATV, which has hired Donald Zakarin of Pryor Cashman LLP for the litigation, said in a statement, “While we have not yet seen the claims by the Gaye family against EMI, we have repeatedly advised the Gaye family’s attorney that the two songs in question have been evaluated by a leading musicologist who concluded that ‘Blurred Lines’ does not infringe ‘Got To Give It Up.’”
King said that his clients hired three separate musicologists who also said that the song didn’t infringe.
King & Ballow and Wargo French LLP represent the Gaye family.
The Gaye’s case is Gaye v Williams, 2:13-cv-06004, U.S. District Court, Central District of California (Los Angeles). The original declaratory judgment case is Williams v. Bridgeport Music, Inc., 2:13-cv-06004, U.S. District Court, Central District of California (Los Angeles).
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