Rolls Royce, Apple, Righthaven, LVMH: Intellectual Property

Rolls-Royce Group Plc must lower the $3.7 billion in damages sought in a patent lawsuit against United Technologies Corp.’s Pratt & Whitney because the jet-engine maker overstated the effect of competition, a judge ruled.

Estimates for engine prices, units sold and the value of service contracts are “based on misstatements of the law, a lack of sound evidence, and unsupported economic assumptions,” U.S. District Judge Leonie Brinkema in Alexandria, Virginia, said in a May 4 ruling. Brinkema didn’t say what the damages can be should Rolls-Royce prove during trial that Pratt used a patented design for engine fan blades without permission.

Rolls-Royce claims Pratt’s GP7200 Fan Stage violates patent rights issued in 2000 for a Rolls-Royce Trent engine used on Airbus SAS A380s. London-based Rolls-Royce argued that it should be entitled to $1.35 billion for the lower prices it said it was forced to charge on engines, plus $2.3 billion in profit lost because of engines sold by a venture of Pratt and General Electric Co.

The list price for the Trent engine is $20 million, which was discounted an average of 87.3 percent to $2.54 million, the judge said, citing company data. She rejected Rolls-Royce arguments that without competition from East Hartford, Connecticut-based Pratt’s GP7200 engine, the discount would have been 77 percent, for a price of $4.6 million, the filing shows.

A damages consultant hired by Rolls-Royce “cannot just simply assume that airlines would happily pay millions of dollars more per engine,” Brinkema wrote in throwing out the consultant’s report. “It is not even clear whether Airbus would have undertaken the project of producing the Airbus 380 in the first place if it had only one engine supplier to rely upon.”.

“Rolls-Royce takes protection of its technology and intellectual property very seriously and will vigorously pursue legal action against any attempts to infringe it,” Mia Walton, a spokeswoman for Rolls-Royce in the U.S., said in an e-mail.

Pratt told the judge it plans to install different blades on further engines that design around the Rolls-Royce invention.

As an alternative to the $3.7 billion in damages, Rolls-Royce said it could instead be entitled to $1.3 billion as a lump sum of royalties owed. The company based that claim on interest from the consultant’s estimate that a royalty agreement with Pratt would have been signed for $493 million in 2000.

Brinkema said Rolls-Royce could ask for $493 million at most, and Pratt can challenge that figure because it equals almost the entire amount Pratt invested in the joint venture with GE and is “highly speculative.”

Pratt in November filed its own patent-infringement case against Rolls-Royce with the U.S. International Trade Commission in Washington. A trial is scheduled for October before the agency, which has the power to block imports of products found to violate U.S. patents.

The case is Rolls-Royce Plc v. United Technologies Corp., 10cv457, U.S. District Court for the Eastern District of Virginia (Alexandria).

Apple, HP, Aruba Accused by Linex of Infringing Wi-Fi Patents

Hewlett-Packard Co. and Apple Inc. were among five companies accused by closely held Linex Technologies Inc. of infringing patents for wireless communications used in laptop computers.

Aruba Networks Inc., Meru Networks Inc. and Ruckus Wireless Inc., all based in Sunnyvale, California, were also named in the May 6 complaint with the U.S. International Trade Commission in Washington, which has the power to block imports of products found to infringe patents. Linex also filed suit in federal court in Wilmington, Delaware, the same day, seeking cash compensation.

Linex, a Palm Beach Gardens, Florida-based licenser of technology, claims two of its patents cover inventions used in the standard for wireless communication, including a way to limit the fading of signal strength in buildings. The complaint cites at least nine models by Palo Alto, California-based HP, including the Pavilion and Envy laptops, as well as Cupertino, California-based Apple’s MacBook Air, MacBook Pro, Airport Extreme and Time Capsule products.

The case is In the Matter of Certain Wireless Communication Devices and Systems, Complaint No. 2802, U.S. International Trade Commission (Washington). The civil case is Linex Technologies Inc. v. Hewlett-Packard Co., 11cv400, U.S. District Court for the District of Delaware (Wilmington).

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Righthaven Brings in Dale Cendali for Copyright Dispute

Righthaven LLC, the Las Vegas-based company that has filed more than 200 cases attempting to enforce copyrights for Stephens Media Group, has turned to a marquee name for one of its suits.

According to a May 4 filing, Righthaven hired Kirkland & Ellis LLP’s Dale Cendali to help litigate a case against the Pahrump Life website on which an article from the Las Vegas Review-Journal was posted without authorization.

Cendali replaces Righthaven’s in-house counsel John Charles Coons, who withdrew from the case Feb. 2, according to court records.

Cendali may be best known for her successful representation of Harry Potter’s U.S. publisher Scholastic Corp. in a trademark case. She has also represented Associated Press in the copyright infringement case involving the photo of President Obama against artist Shepard Fairey.

When she was with Los Angeles-based O’Melveny & Myers LLP she represented the Martha Graham Center of Contemporary Dance in a trademark suit involving the name of the late Martha Graham. Cendali moved from O’Melveny to Chicago-based Kirkland & Ellis in March 2009.

Righthaven hasn’t been faring well with its suits. In the case against Pahrump Life, U.S. District Judge James C. Mahan noted in an April 27 order that the company’s ownership of the newspaper’s copyrights is presently being contested in another case, and may not have standing to sue anyone for copyright infringement.

The case is Righthaven LLC v. Pahrump Life, 2:10-cv-01574-JCM-PAL, U.S. District Court, District of Nevada (Las Vegas).

‘Origami Series’ Painted by Sarah Morris Infringes, Designers Say

Six designers of origami figures have sued a New York artist for copyright infringement.

The designers, who have created diagrams for creating complex folded-paper figures such as weasels and praying mantises, accuse Sarah Morris of using their designs without authorization in her paintings.

According to an art-auction website, Morris uses household gloss paint on square-format canvasses based on an exploration of “the grid forms that result from the creasing and folding” of paper or other materials.

A press statement for a 2008 exhibition of her work in London that is quoted on the auction website says that Morris based her origami series “on found origami diagrams.”

The six artists, one of whom is Livermore, California-based physicist Robert J. Lang, say the so-called “found” diagrams are their original work for which they didn’t give Morris permission to use.

The case was filed federal court in San Francisco March 22, and, so far, Morris is unrepresented by counsel and has made no court filings herself. An e-mail to New York’s Friedrich Petzel Gallery, which has shown work from the Morris Origami series, didn’t receive an immediate response.

The six origami designers are represented by Andrew K. Jacobson of the Bay Oak Law Firm APLC and Caroline Noel Valentino of Haims MacGowan Valentino & Peebles LLP, both of Oakland, California.

The case is Robert J. Lang v. Sarah Morris, 3:11-cv-01366-EMC, U.S. District Court, Northern District of California (San Francisco).

Lime Wire’s Gorton Tells Jury He Didn’t ‘Appreciate’ Risk

Lime Wire LLC founder Mark Gorton told a jury yesterday he hadn’t “fully appreciated” the damages he might have to pay for copyright infringement in case of litigation over the free downloading of songs through the company’s website.

Gorton was testifying in a trial in U.S. District Court in New York on the amount of money he will be assessed because of a ruling that Lime Wire induced the infringement of thousands of songs through its peer-to-peer file-sharing software on the Internet.

“You went into Lime Wire with your eyes wide open about the risks,” Glenn Pomerantz, a lawyer for music companies such as Warner Music Group Corp., told Gorton. He cited a memo to potential Lime Wire investors in 2001 raising the possibility of “substantial” damages from copyright litigation.

“I don’t believe I fully appreciated them,” Gorton replied.

Music labels owned by Warner, Sony Corp., Vivendi SA and Citigroup Inc. are seeking hundreds of millions of dollars from Gorton. The trial judge, U.S. District Judge Kimba Wood, also ordered Lime Wire to shut down its music service last year.

Pomerantz told the jury of eight women and one man in opening statements May 3 that the record industry’s revenue fell 52 percent from 2000, the year Lime Wire was founded, to 2010.

Gorton, 44, was called by the record labels. His testimony will resume today.

In 2005, the Recording Industry Association of America, the labels’ trade group, sent Gorton a letter demanding that he shut down his site.

“At the time I didn’t think we were intentionally inducing copyright infringement, but I understand the court has found otherwise,” Gorton said.

Pomerantz told Wood with the jury out of the room that the defense shouldn’t be allowed to argue that other file-sharing services would have replaced Lime Wire because that was inconsistent with her ruling last year.

Wood agreed and told the panel when it returned that Gorton’s testimony on that point will be stricken from the record.

Gorton’s lawyers are trying to convince the jurors that events unrelated to file sharing caused the drop in music industry revenue.

The record companies accused Gorton of making a fraudulent transfer of assets into family limited partnerships to shield the funds from liability. Pomerantz told the jurors in his opening that Gorton transferred the money three days after the U.S. Supreme Court ruled in 2005 that file-sharing service Grokster could be held liable for copyright infringement.

Gorton’s lawyers have said the asset transfer resulted from estate planning and that the closing date was set before the Supreme Court’s decision.

The case is Arista Records LLC v. Lime Wire LLC, 06-05936, U.S. District Court, Southern District of New York (Manhattan).

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Louis Vuitton Rises, Gucci Slips in Brand-Valuation Study

Louis Vuitton, the French maker of laminated canvas handbags, is the world’s most-valuable luxury brand for the sixth consecutive year, a research group said.

The brand, owned by Paris-based LVMH Moet Hennessy Louis Vuitton SA, has a value of $24.3 billion, an increase of 23 percent from 2010, according to Millward Brown Optimor’s 2011 BrandZ study published yesterday. That’s almost as much as the combined values of Hermes, Gucci and Chanel, which ranked second, third and fourth in this year’s luxury-brand standings.

Vuitton’s value amounts to almost 28 percent of LVMH’s market capitalization. The brand is benefiting from demand for status symbols in developing markets such as Brazil, Russia, India and China, and the perception in Europe and the U.S. that its products are exclusive, said Cristiana Pearson, a director at Millward Brown Optimor who led the study.

“As we continue to come out of the recession, people will continue to spend more on luxury, and the BRIC countries don’t look like they’re slowing,” with growth in Brazil and China particularly strong, Pearson said by phone from London.

Hermes International SCA, in which LVMH holds a 20.2 percent stake, posted the biggest increase in brand value in the luxury industry with a 41 percent jump to $11.9 billion, according to the BrandZ study. Florence, Italy-based Gucci’s value declined 2 percent to $7.45 billion, affected by French parent PPR SA’s financial performance, Pearson said. Chanel advanced 23 percent to $6.82 billion.

Hennessy, Moet & Chandon and Fendi placed seventh, eighth and ninth in the study, respectively, with values of $3.42 billion to $5 billion, meaning LVMH, the world’s largest luxury-goods maker, owns or has a stake in five of the industry’s 10 most-valuable brands.

The Cartier and Rolex brands ranked fifth and sixth in the luxury-brand ranking, while Burberry replaced Tiffany as No. 10. The brand values of Burberry, Chanel and Vuitton benefited from investment in technology, Millward Brown Optimor said.

Vuitton placed 26th worldwide among 100 companies across 13 industries in the BrandZ study. Apple Inc., maker of the iPad tablet, is the world’s most valuable brand, with its estimated value surging 84 percent from a year earlier to $153 billion, according to Millward Brown Optimor.

The study was based on interviews with consumers as well as analysis of company performance.

Taiwan Lawmakers Looking at Revisions to Trademark Law

A measure under consideration by Taiwan lawmakers would expand the scope of that nation’s trademark law, the China Post reported today.

Holograms, three-dimensional shapes and movements such as the startup animations in some mobile phones would receive protection, Wang Mei-hua, director-general of Taiwan’s Intellectual Property Office told the China Post.

A ban on the online listing of fake items would be barred under the proposed bill, the newspaper reported

Minimum limits for trademark infringement fines would be reduced under the bill, according to the China Post.

For more trademark news, click here.

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