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EBay, Louis Vuitton, Foxconn: Intellectual Property

The U.S. Patent and Trademark Office should get as much as $279 million to help the agency deal with a backlog of patent applications, President Barack Obama said in a request for supplemental funding from Congress.

The patent office, which experienced a drop in fees last year because of the recession, is seeing a rebound in applications and wants to keep more of the money it collects. Otherwise, any money above its $1.89 billion fiscal 2010 budget would enter the general treasury to be spent by Congress on other programs.

Improving the patent office has been a key goal of the Obama administration, which has said that better protection for intellectual property will be a driver of economic growth. The patent office has said technology innovation is linked to three-quarters of U.S. growth since the end of World War II.

The additional funds would go toward salaries and expenses directed at improving efficiency at the agency. The patent office is struggling to reduce a backlog of more than 700,000 applications in the last fiscal year. On average, it takes 34.6 months to complete a patent application and the office is seeking to reduce that to 20 months by fiscal 2014.

The proposal would “support efforts to reduce backlogs in processing patent applications -- by spurring innovation and reforming U.S. Patent and Trademark Office operations to make them more effective,” Obama said in a letter yesterday to House Speaker Nancy Pelosi, a California Democrat.

Under Obama’s proposal, which must be approved by Congress, the agency would get $129 million that had been budgeted for the Census Bureau and be allowed to keep as much as $150 million above that if it collects more in fees, for a total budget of $2.17 billion in fiscal 2010.

Obama has proposed a $2.32 billion budget for the year beginning in October. The agency plans to hire 1,000 patent examiners in each of the next two fiscal years to reach its goal of reducing the application pendency rate.

The agency has developed a program to cut 12 months off the application process for technology that promotes renewable energy and environmental improvements and has told inventors the agency will expedite one application if another pending application is dropped, as a way of prioritizing inventions.

It has also proposed a three-track program that lets inventors have their applications reviewed more quickly if they pay higher fees. A public hearing on the proposal is scheduled for July 20 at the agency’s headquarters in Alexandria, Virginia.

Without increased funding and improvements, the patent office projects a backlog of more than 1 million applications and an average pendency of 40 months by fiscal 2015.

EBay Sued for $3.8 Billion Over XPRT Payment Patents

EBay Inc., the most-visited U.S. e-commerce site, and units including PayPal Inc. were sued by XPRT Ventures LLC for $3.8 billion over claims the online retailer infringed patents related to e-commerce payment systems.

EBay infringed six patents for online payments and stole trade secrets by sharing information in a patent application despite a confidentiality agreement, Greenwich, Connecticut- based XPRT said yesterday in a complaint in U.S. District Court in Wilmington, Delaware.

“XPRT asserts EBay unfairly stole the idea and method of payment used in EBay’s PayPal and similar electronic payment systems,” XPRT said in an e-mailed statement yesterday.

“We are reviewing the complaint filed today. We believe it is without merit, and intend to defend ourselves vigorously,” John Pluhowski, a spokesman for San Jose, California-based EBay, said in an e-mail.

The case is 10-cv-595, U.S. District Court, District of Delaware (Wilmington).

For more patent news, click here.


LVMH Says Court to Examine Google Keyword-Use in Fight Over Ads

LVMH Moet Hennessy Louis Vuitton SA said a French appeal court will examine Google Inc.’s possible liability in a dispute over sales of trademarked terms as keywords that link searches to advertisements.

The Cour de Cassation, France’s highest court, has asked the Paris appeals court to look at potential “wrongdoings” by Google “to the detriment of Louis Vuitton,” Paris-based LVMH said in an e-mailed statement yesterday.

The European Union’s highest court on March 23 ruled that while Google, owner of the world’s most-used search engine, doesn’t breach companies’ trademark rights by selling keywords, it may be liable for trademark breaches in adverts if it knew of, or had control over, ad data. The top French court had in 2008 sought the EU tribunal’s guidance in the case.

Google’s storage of ad content on its systems may make it liable for trademark breaches if national judges find it plays an “active role” in creating the promotions, the EU court said.

The Cour de Cassation “considers that Google can be held liable on the grounds of civil liability,” LVMH said in today’s statement. The decision “opens the possibility for the appeals court to decide on the civil liability of Google over the use of trademarks without the owner’s authorization.”

The French court “confirmed that Google has not infringed trademark law by allowing advertisers to select keywords corresponding to third party trademarks,” Benjamin Amaudric Du Chaffaut, a lawyer for Google, said in an e-mailed statement. “User interest is best served by maximizing the choice of keywords.”

WWE Hall of Famer Sues Political Candidate Over Trademark

Jerry “The King” Lawler, a member of World Wrestling Entertainment Inc.’s Hall of Fame, sued the Democratic candidate for clerk of Shelby County, Tennessee, for trademark and copyright infringement, the Memphis-based Commercial Appeal reported.

Lawler claims Corey Maclin’s actions have infringed the wrestler’s trademark and copyright interests in “Memphis Wrestling,” a Memphis-based wrestling promotion organization, according to the newspaper.

Maclin, a former wrestling promoter, told the Commercial Appeal that although he once employed Lawler, he no longer has any connection to the wrestling program.

The ex-promoter claims the infringement suit is politically motivated because Lawler is supporting the Republican candidate for county clerk, according to the newspaper.

Mike Love’s Trademark Claims Can’t Reach U.K. Beach Boy Promo

A founding member of the Beach Boys band was unsuccessful in his suit over promotional CDs and advertisements distributed in the U.K.

The 9th U.S. Circuit Court of Appeals said a trial court had properly tossed out all of Mike Love’s claims involving a promotional campaign for a band’s tour in the U.K. The band, with Beach Boys founder Brian Wilson, made a recording that was distributed along with a British newspaper.

Love claimed the distribution of 2.6 million copies of the CD infringed his right to use “The Beach Boys” trademark for live performances. He presented a declaration by a customer who bought one of the distributed CDs on eBay Inc.’s auction website because he thought it was an official Beach Boys product.

The trial court found that the eBay purchaser was a close associate of Love’s counsel, rejected the declaration and sanctioned Love’s lawyer. The court also rejected all other claims made by Love.

In his appeal, Love claimed he was harmed by actions in the U.K., that his trademark protections extended to that country, and that he should also be able to make a claim under California unfair-business statutes.

The appeals court disagreed, saying U.S. trademark law didn’t have a far enough reach to extend to the U.K., and neither did California’s unfair-business laws.

Paraphrasing a Beach Boy’s hit song, Judge Sidney Thomas wrote that while Love wanted to assert California claims on actions that occurred in the U.K., “Love wishes they could all could be California torts.”

In another reference to rock-and-roll history, Thomas also noted that Love “was concerned that a second British invasion and fearful return to touring might dampen enthusiasm for his own performances.”

The case is Love v. Sanctuary Records, 07-56568, U.S. Court of Appeals for the 9th Circuit (San Francisco).

For more trademark news, click here.

Trade Secrets/Industrial Espionage

Foxconn Asks Court to Toss Out Claims in BYD Countersuit

Foxconn International Holdings Ltd. urged a Hong Kong judge to throw out claims made by a Warren Buffett-backed company in a countersuit that accuses Foxconn of gathering false evidence.

The claims should be struck because BYD Co. failed to provide any “material” facts or allegations to back its case filed Oct. 2, 2009, Winston Poon, Foxconn’s lawyer, said at a hearing yesterday in the Court of First Instance in Hong Kong.

“Not only are the matters immaterial, they are also vexatious,” Poon said. “They will waste the court’s time and money.” Judge Louis Chan didn’t specify at the end of the hearing when he would rule on Foxconn’s request.

BYD, backed by billionaire Buffett, countersued after two Foxconn units filed a suit in 2007 that claimed BYD recruited Foxconn employees and stole the companies’ trade secrets. BYD, China’s largest maker of rechargeable batteries, doubled its revenue from its handset business in 2005, 2006 and 2007 as a result, Foxconn said in court documents.

In its countersuit, BYD accuses its rival of unlawful interference with its business, defamation and conspiracy to injure. Foxconn was involved in planting documents and coercing a former employee to confess he had stolen secrets, according to BYD’s filings.

“The Foxconn parties embarked upon a course of conduct of procuring and using false or fabricated evidence,” BYD said in its suit. Foxconn’s “ultimate objective” was to damage the business relationship between BYD and its investors and customers, BYD said.

In 2008, BYD failed to persuade a Hong Kong judge to order the case to be tried in Shenzhen, China, where BYD is based. Judge Thomas Au in Hong Kong ruled he wasn’t convinced Shenzhen was a preferable venue.

Liu Xiang Jun, former chief operating officer of one of the Foxconn units, joined BYD in 2005. In a separate proceeding, he was convicted in Shenzhen of infringing Foxconn’s business secrets, according to court documents. Si Shao Qing and Zhang Jian, who had worked for the same unit, were also convicted of infringing Foxconn’s business secrets.

Foxconn, the world’s largest contract-manufacturer of mobile phones, faces competition from BYD for orders of handset components from customers including Nokia Oyj.

The case is HCA2114/2007, BYD Co. and Shenzhen Futaihong Precision Industry Co. in the Hong Kong Court of First Instance.


Mary Blige Accused of Infringing “Take Me as I Am’ Copyright

Pop singer Mary J. Blige was sued for copyright infringement related to her hit song “Take Me as I Am.”

According to a complaint filed July 8 in federal court in Los Angeles, Utah-based songwriters Jay Brian Ballard and Kim Jones wrote “Take Me as I Am” in 1995, and registered the copyright. They claim Blige’s version is “substantially similar” to theirs and the two songs “coincide melodically, rhythmically and harmonically.”

The songwriters allege that Blige and her songwriters knew they infringed and never made any effort to get permission to use their work.

They asked the court to rule that their work was infringed, and for an award of money damages and profits flowing from the alleged infringement. Additionally, they seek orders for seizure of all infringing copies of their song and barring future infringement. They’ve always requested attorney fees and litigation costs.

The two songwriters are unrepresented by counsel.

The case is Jay Ballard v. Mary J. Blige, 2:10-cv-05015-CBM-RC, U.S. District Court, Central District of California (Los Angeles).

Scholastic Corp. Sued by Author for Harry Potter Similarities

The estate of U.K. author Adrian Jacobs sued Scholastic Corp. in New York alleging that the best-selling “Harry Potter” books are “substantially similar” to his 1987 book “Adventures of Willy the Wizard: Livid Land No. 1.”

The copyright infringement lawsuit filed in U.S. District Court in New York yesterday claims that J.K. Rowling, the author of the Potter books, which have sold more than 375 million copies worldwide, shared the same literary agent as Jacobs.

The estate sued Rowling’s British publisher, Bloomsbury Publishing Plc in June 2009 with similar allegations. At the time that suit was filed, Rowling said in a statement she’d “never heard of the author or the book” before the first accusations of plagiarism were made in 2004. “I have certainly never read the book,” she said.

Jacobs, an accountant and lawyer, died in 1997, ten years after a stroke left him unable to manage his affairs, according to his biography. Before he became ill, he wrote an unpublished sequel to “Willy the Wizard.”

The U.K. case is Paul Gregory Allen v. Bloomsbury Publishing Plc, HC091979, High Court of Justice, Chancery Division.

The new case is Paul Gregory Allen v. Scholastic Inc., 1:10-cv-05445, U.S. District Court, Southern District of New York

For more copyright news, click here.

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