Google, KLA-Tencor, Bacardi, SocGen: Intellectual Property

Google Inc., escalating a feud with Microsoft Corp. over patents, said Microsoft’s offer to join a bid for Novell Inc.’s intellectual property would have eliminated its ability to defend its Android mobile-phone operating system against legal attacks.

“A joint acquisition of the Novell patents that gave all parties a license would have eliminated any protection these patents could offer to Android against attacks from Microsoft and its bidding partners,” Google Chief Legal Officer David Drummond said yesterday in an updated blog posting. “Making sure that we would be unable to assert these patents to defend Android -- and having us pay for the privilege -- must have seemed like an ingenious strategy to them. We didn’t fall for it.”

KLA-Tencor Sued by Nanometrics Over Patents for Chip-Making

KLA-Tencor Corp., a maker of computer chip fabrication equipment, was sued in federal court in Delaware by rival Nanometrics Inc., which accused it of infringing two U.S. patents for alignment gear and seeks damages after a jury trial.

Milpitas, California-based Nanometrics, with $188 million in sales last year, contends KLA-Tencor knew of the patents, awarded in 2006 and 2007, and used the protected technology anyway.

“Nanometrics has suffered damages” to be determined at a trial, and KLA-Tencor, also of Milpitas, is “without a reasonable basis for believing” it doesn’t infringe, according to the complaint.

In dispute are patents 6,982,793 B1, issued in January 2006; and 7,230,705 B1, issued in June 2007.

KLA-Tencor reported $3.17 billion in sales last fiscal year. Meggan Powers, a KLA-Tencor spokeswoman, didn’t immediately return an e-mail message seeking comment on the allegations.

The case is Nanometrics Inc. v. KLA-Tencor Corp., 1:11-cv-00685, U.S. District Court, District of Delaware (Wilmington).

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Pernod Ricard Loses Ruling in Bacardi ‘Havana Club’ Fight

Pernod Ricard SA, the world’s second-biggest liquor maker, lost an appeals court ruling in its 17-year battle with Bacardi Ltd. over the right to use the name “Havana Club” on rum in the U.S. market.

The U.S. Court of Appeals in Philadelphia ruled yesterday that a lower-court correctly ruled that consumers wouldn’t be confused into thinking Bacardi’s Havana Club rum was made in Cuba because the label states it was made in Puerto Rico.

“No reasonable interpretation of the label as a whole could lead to the conclusion that it is false or misleading,” U.S. Circuit Judge Kent Jordan said in an opinion that affirms the 2010 ruling by the U.S. District Court in Wilmington, Delaware.

“We’re certainly disappointed with the decision,” David Bernstein, a lawyer representing Pernod Ricard, said in a telephone interview. “If there’s any basis for an appeal, we’ll consider it.”

Pernod has been fighting with Bacardi over rights to the name in the U.S. since 1994, when Bacardi applied for a U.S. trademark for Havana Club. That application was suspended by the U.S. Patent and Trademark Office pending the results of litigation, Bernstein said. Pernod, based in Paris, sells Havana Club throughout the world, except in the U.S.

“Our conclusion in this case says nothing of whether the words ‘Havana Club’ are eligible for registration as a trademark,” Jordan said in the opinion yesterday.

Pernod argued in its appeal that U.S. District Judge Sue Robinson “refused even to consider” the results of a Pernod-commissioned survey showing that about 20 percent of U.S. rum consumers were misled or confused by Bacardi’s Havana Rum bottle.

In yesterday’s opinion, the appeals court said, “Survey evidence has no helpful part to play on the question of what the label communicates regarding geographic origin.”

Bacardi, based in Pembroke, Bermuda, argued that the survey was “fatally flawed” and that the front of its liquor bottle clearly states “Puerto Rican rum.”

“Bacardi applauds the appellate court’s decision which reaffirms that Bacardi has accurately portrayed both the geographic origin and Cuban heritage of our Havana Club rum,” Patricia Neal, a spokeswoman for Bacardi USA, said in an e-mailed statement.

Cuban trademarks have importance in anticipation of an end to the 1963 embargo by the U.S. that blocks most trade between the countries. Cuban-made rum can’t be legally sold in the U.S.

The Havana Club trademark was first used in the 1930s by Cuba’s Arechabala family, whose distilling company was confiscated by Fidel Castro’s revolutionary government. After the trademark owned by the Arechabalas lapsed, the state-owned Cubaexport registered it in the U.S. in 1976 and assigned it to the Pernod joint venture in 1993.

In 1998, Congress passed legislation making trademarks confiscated by the Cuban government unenforceable in the U.S. The law has been applied only to the Havana Club mark.

The U.S. Court of Appeals for the D.C. Circuit in Washington upheld that law in March. It said the U.S. Treasury has the right to refuse to allow a Cuban state-owned group to renew its U.S. trademark for Havana Club. Pernod sells Havana Club throughout the world, except in the U.S., under that 1993 venture with Cubaexport.

Bacardi bought rights to the Havana Club name from the Arechabala family and distills rum in that name in Puerto Rico using the recipe of Jose Arechabala, court papers state. It has been available in the U.S. since 2006 only in Florida.

Pernod turned Cuba-made Havana Club into the world’s fourth-most-popular brand of standard rum, selling about 3.5 million cases a year, up from 400,000 cases sold in 1993, according to the research report.

Without access to the U.S. market, Pernod’s Havana Club had 5 percent of the world’s rum sales, according to the report. In the U.S., Bacardi’s brands led the rum market with about 40 percent of sales, according to court papers.

In Spain, Bacardi sued Pernod in 1999, claiming it was the rightful owner of the Havana Club trademark.

Two Spanish courts ruled that the joint venture with Pernod was the proper owner because the Arechabala family had neglected its rights, both in allowing its trademark to expire and waiting too long to challenge ownership. Spain’s Supreme Court ruled in Pernod’s favor in February, saying Bacardi had no claim to the Havana Club name in that country.

London-based Diageo Plc is the world’s largest distiller.

The appeal is Pernod Ricard USA LLC v. Bacardi USA Inc., 10-2354, 3rd U.S. Circuit Court of Appeals (Philadelphia). The Delaware case is Pernod Ricard USA LLC v. Bacardi USA Inc., 06-cv-505, U.S. District Court, District of Delaware (Wilmington).

Anheuser-Busch Loses ‘Bud’ Trademark Challenge in Bulgaria

Anheuser-Busch InBev NV lost a trademark battle to the Czech Republic’s Budejovicky Budvar NP, the Washington Post reported.

A city court in Sofia, Bulgaria, rejected Anheuser-Busch’s attempt to challenge Budvar’s registration of “Bud” as an indication of geographic origin, the Post reported.

Budvar said Anheuser-Busch then withdrew its appeal of a court ruling canceling two of its Bulgarian trademarks, “Bud” and “American Bud,” the Post reported.

The Czech brewer is still seeking cancellation of other Anheuser-Busch trademarks in Bulgaria, including “Anheuser-Busch Bud,” the newspaper reported.

USM Denied Trademark Registration for Golden Eagle Head Logo

The University of Southern Mississippi can’t register its golden eagle-head image as a trademark, a trademark appeals board ruled July 29.

The University of Iowa had opposed the registration, saying the image was too much like its Hawkeyes mark used in connection with its sports teams.

The board noted that when the Mississippi school replaced an elongated eagle head logo with one with a more rounded shape, the number of vendors selling marked products increased “dramatically” and items marked with the new logo became best sellers.

The likelihood that consumers would be confused by the two logos was increased because both schools’ merchandise is available on the same websites and through the same brick-and-mortar stores, including Wal-Mart Stores Inc., the board said. Both logos are yellow, and both are used with university sports teams.

The board said that while “the most enthusiastic fans” would be able to tell the difference between the two schools’ logos, “more casual purchasers” would not.

“In the normal marketing environment, purchasers would not usually have the luxury of examining marks in such minute detail” to be able to distinguish between the two, the board said.

Mambo Calls Off Opposition to ‘Mabo’ Trademark Registration

Australian surfwear company Mambo dropped its opposition to a trademark registration for “Mabo” by the son of native-rights activities Eddie Mabo, The Australian newspaper reported.

The company said it will also re-release a shirt with the “100 percent Mabo” design commemorating the 1992 land-rights decision for which the elder Mabo had campaigned, according to the Australian.

Proceeds of the sale of that shirt will go to Malcolm Mabo’s clothing company, established to promote indigenous people’s art, the newspaper reported.

Campaigners against Mambo’s opposition used Twitter Inc.’s short messaging service to get the world out, according to The Australian.

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U.K.’s Ofcom Looking at Reducing Cost of Infringement Appeals

The cost of processing appeals under the U.K.’s Digital Economic act could be about 400 British pounds each, according to a report released by the government regulatory authority for broadcast and telecommunications, known as Ofcom.

This could lead to an annual processing cost of 40 million pounds ($65 million), according to the report.

The high cost of pursuing these appeals could potentially provide a barrier to some copyright owners’ participation in the enforcement process, the report suggested. A “vexatious system of coordinated appeals” could bring this whole system down, if a lobby group were to be successful in attempts to persuade consumers to appeal every single infringement notification made under the act, according to the Ofcom report.

Ofcom said in the report it’s considering seeking bids from various entities that already operate adjudication and arbitration systems as a way of getting what it called “innovative and cost-focused bids.” Another cost-cutting possibility might be the removal of the right of appeal altogether, Ofcom said, noting that this could be “frustrating for subscribers.”

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Trade Secrets/Industrial Espionage

Societe Generale Suit Alleging Theft of Secrets Is Dismissed

Societe Generale SA agreed to dismiss a suit in which it claimed a former foreign-exchange trader misappropriated trade secrets before leaving the bank.

In a May 17 complaint in Manhattan federal court, the bank sought an order to force the ex-employee, Karma Tenzing, to return what it claimed was confidential material.

Tenzing “systematically sent to his home and to third parties confidential SG trade secrets about client trades and contacts, procedures, personal data, client identities, and business P&L information,” the bank alleged in the complaint.

Tenzing, described by Societe Generale as a junior salesman, offered the information to his employer-to-be, Credit Agricole SA, according to Societe Generale.

Tenzing said in a court filing that he didn’t provide a person at Credit Agricole “with a customer list as SocGen alleges.” He provided the names of two friends as references and “a generic list of mostly hedge funds and banks which trade widely in the industry,” he said.

“I have no intention of using the materials competitively and am trying to return them to SocGen,” Tenzing said in the May 23 filing.

Other documents he was accused of taking weren’t confidential or he sent home for his own use, he said.

Both sides agreed to dismissal of the suit, according to court papers filed July 7. The dismissal came after the Paris-based bank told U.S. District Judge George Daniels May 26 that the parties had reached “a settlement in principle” and were completing an agreement.

Settlement terms weren’t disclosed.

Societe Generale is the third-largest French bank by assets, and Credit Agricole is second. The largest is BNP Paribas SA.

Mitchell Cohen, Tenzing’s lawyer, didn’t reply to a voice-mail message yesterday. Andrez Carberry, a lawyer for Societe Generale reached by telephone Aug. 3, declined to comment on the dismissal of the suit. Anne-Sophie Gentil, a spokeswoman for Credit Agricole, didn’t immediately reply to a voice-mail message yesterday seeking comment on the Societe Generale allegations.

The case is Societe Generale v. Tenzing, 11-cv-3366, U.S. District Court, Southern District of New York (Manhattan).

Santa Ana Says DoubleLine System Should Be ‘Similar’ to TCW

DoubleLine Capital LP executive Cris Santa Ana testified that likenesses were to be expected between the firm’s proprietary system for analyzing mortgage bonds and the approach used at TCW Group Inc., where he formerly worked.

Santa Ana, an ex-managing director at the mortgage-backed securities group in the Los Angeles-based unit of Societe Generale SA, told jurors yesterday in California state court that DoubleLine’s analytical system was designed by some of the same people who built TCW’s system and went over to DoubleLine in December 2009.

“They should be similar,” Santa Ana said under questioning by TCW’s lawyer, John Quinn.

TCW alleges that DoubleLine was set up with proprietary information and trade secrets stolen by its ex-investment chief, Jeffrey Gundlach, along with Santa Ana and two others. The DoubleLine defendants haven’t denied downloading TCW data, including client portfolio information, starting in September 2009. They deny having used any of this information when they started DoubleLine in December of that year, after TCW fired them. They say TCW terminated them to avoid paying Gundlach’s group hundreds of millions of dollars in performance fees.

Santa Ana said yesterday that he downloaded TCW data at Gundlach’s request before they were fired. Co-defendant Jeffrey Mayberry, another executive who left TCW for DoubleLine, previously testified that he started downloading TCW information, including a mortgage-backed securities database and client portfolio holdings, on Sept. 3, 2009. He said that was when people in Gundlach’s unit thought TCW Chief Executive Officer Marc Stern was about to fire Gundlach.

Mayberry said Aug. 2 that he started downloading at the instruction of Santa Ana, who sat at a workstation next to him at TCW’s trading desk and used an external hard drive to download data on a daily basis.

The case is Trust Co. of the West v. Gundlach, BC429385, California Superior Court, Los Angeles County.

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