Sept. 8 (Bloomberg) -- HTC Corp., Asia’s second-biggest maker of smartphones, filed infringement claims against Apple Inc. yesterday, using patents obtained from Google Inc. last week.
The nine patents originated with Palm Inc., Motorola Inc. and Openwave Systems Inc., with Google taking ownership within the past year, according to U.S. Patent and Trademark Office records. Mountain View, California-based Google recorded transfer of the patents to HTC on Sept. 1, according to the agency’s website.
HTC sued Apple yesterday in federal court in Delaware, claiming infringement of four of those patents that originally were issued to Motorola. Taoyuan, Taiwan-based HTC also amended a complaint with the U.S. International Trade Commission in Washington, alleging infringement of three patents first issued to Openwave and two others originally owned by Palm.
Apple, the world’s biggest smartphone maker, has filed patent cases against handset makers using Google’s Android operating system, including Samsung Electronics Co., Motorola Mobility Holdings Inc. and HTC.
“We think competition is healthy, but competitors should create their own original technology, not steal ours,” Kristin Huguet, a spokeswoman for Apple, said yesterday, reiterating a statement Chairman Steve Jobs made last year when Apple sued HTC.
HTC and Apple “have to sit down and figure it out,” HTC Chief Financial Officer Winston Yung said in a July 26 telephone interview. “We’re open to having discussions,” he said.
The ITC case is In the Matter of Certain Electronic Devices with Communication Capabilities, Complaint No. 2841, U.S. International Trade Commission (Washington). The earlier civil case is HTC Corp. v. Apple Inc., 11-cv-715, U.S. District Court, District of Delaware (Wilmington).
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Oracle Says Talks to Resolve Google Patent Suit ‘Warranted’
Oracle Corp. said new settlement talks with Google Inc. to resolve its patent- and copyright-infringement lawsuit against the search engine company are “warranted” and proposed a mediation session for this month.
“An additional attempt at settlement of the case through mediation before a United States magistrate judge is warranted,” Michael Jacobs, an Oracle attorney, said in a filing yesterday in federal court in San Francisco. “Oracle has found previous efforts at settlement, including private discussions between the parties, frustrating for lack of follow-through, and believes that those efforts have not exhausted the possibilities for resolving the case.”
Google doesn’t object to participating in mediation, the Mountain View, California-based company said yesterday in a separate filing. The companies were responding to a judge’s suggestion that they pursue settlement talks.
Oracle, the largest maker of database software, sued Google last year, claiming the Internet search-engine company didn’t obtain a license for the patents that it says are infringed by the Android operating system. Besides seeking billions of dollars in damages, Oracle wants the court to order destruction of all products that violate its copyrights.
Aaron Zamost, a Google spokesman, said the company didn’t have any comment beyond the filing. Deborah Hellinger, an Oracle spokeswoman, declined to comment.
A trial is scheduled to begin Oct. 31.
The case is Oracle America Inc. v. Google Inc., 10-03561, U.S. District Court, Northern District of California (San Francisco).
Kodak’s Bondholders Seem Supportive of Plans to Sell Patents
Eastman Kodak Co.’s plan to sell patents is gaining traction with bond investors after derivatives last month suggested a 97 percent chance the 131-year-old camera maker would fail within five years.
The implied five-year default probability on Kodak was 73 percent on Sept. 2, according to data provider CMA, which compiles prices in the privately negotiated market. The Rochester, New York-based company’s $250 million of 7.25 percent debt due November 2013 yielded 14.7 percent on Aug. 31 after jumping to as high as 19.8 percent on Aug. 10.
Kodak, headed for its sixth annual loss in seven years, is following Motorola Mobility Holdings Inc. and Nortel Networks Corp. in marketing patents as the U.S. International Trade Commission delays a ruling on the company’s attempts to win $1 billion in licensing fees for image-preview technology used in cameras. Chief Executive Officer Antonio Perez said Aug. 29 that the company has signed confidentiality agreements with potential buyers of more than 1,000 Kodak patents.
“This has helped investors feel more comfortable with the name in that they know at least one of the two avenues the company is seeking for cash may pay out,” said Jody Lurie, a credit analyst at Janney Montgomery Scott LLC in Philadelphia. “Investors have been scared about the company’s cash levels, and as a result, any sort of good news that comes out about the company has improved investors’ fears.”
The sale may raise $1.5 billion to $3 billion for Kodak, giving the company between 18 and 24 months to improve its inkjet printers and other digital businesses, said David Novosel, an analyst at Gimme Credit LLC in Chicago.
Christopher Veronda, a spokesman for Kodak, said the company doesn’t comment on market movements in stocks or bonds. In August, Perez, CEO since 2005, said he’s seeking patent deals that give Kodak cash upfront as well as preserve licensing rights to its technology.
Kodak is selling “the part of the portfolio that does not apply to the core investments and the future of the company,” said Perez, who declined to disclose potential bidders and specifics of negotiations.
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Obama Agencies Try YouTube to IPad Hawking Patents in Job Push
President Barack Obama, stymied by his inability to replenish jobs lost during the recession, may find hope in retired Air Force General Klaus Schafer.
Schafer, partnering with DNA scientist Claude Tibbetts, found the seeds of a new business among the government’s thousands of patents. Zeroing in on research they were familiar with to identify bacteria, they set up TessArae LLC and licensed technology from the U.S. Naval Research Laboratory in 2007 to help doctors detect communicable and foodborne diseases.
“We decided it was better to license this technology than recreate it,” said Schafer, whose Potomac Falls, Virginia-based company now has 14 employees and plans to add more.
It’s the kind of job creation that government agencies are trying to foster -- turning for the first time to social media sites like Twitter and YouTube to get the word out -- as they heed Obama’s call to push more research into the hands of small businesses. The U.S. government had 10,913 active licenses for its intellectual property in fiscal 2009 and spent $114.5 billion on research and development that year, including grants and work done with universities, states and companies, according to the latest government data.
“We’re trying to think creatively about how we structure licenses, to reduce entry barriers and to provide incentives,” said Mark Rohrbaugh, director of the National Institutes of Health’s Office of Technology Transfer in Rockville, Maryland. “The administration wants agencies to be creative and enhance the way that we transfer technologies to the private sector, not just to fulfill our mission of improving public health, which is our primary mission, but to create jobs.”
“The effort is not so much to generate revenue from the licensing as it is getting the technology out of the government labs and creating more goods and services that can, in turn, create jobs,” said Doug Comstock, director of the Innovative Partnerships Program at NASA.
The federal government has owned 35,056 patents in its history, according to the U.S. Patent and Trademark Office. U.S. agencies made $154.3 million from licensing in fiscal 2009, according to the National Institute of Standards and Technology, which compiles data on U.S. licensing programs.
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FBI Proposes Expanding Use of Anti-Piracy Warning Seal
The Federal Bureau of Investigation is proposing a new regulation that would allow all eligible copyright holders to use its anti-piracy warning seal. The proposal was published yesterday in the Federal Register.
The seal was first approved for use in 2003 as part of a copyright anti-piracy awareness campaign. At the time, the FBI implemented a pilot program with five entertainment and software industry associations; members of these associations could request approval to use the seal from the associations.
The new rule proposes to replace the pilot program with a regulation allowing the seal to be downloaded for free on eligible works.
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Gundlach Says TCW Contracts Protected Him Against Firing
Jeffrey Gundlach testified in a trial against TCW Group Inc. over his 2009 firing that he had negotiated in contracts going back to 1992 specific conditions under which the firm could terminate him “for cause.”
“I wanted to make sure I couldn’t be fired out of the blue,” Gundlach told jurors yesterday in state court in Los Angeles. He also said that since 1989, he’s been entitled to accrued compensation if he was fired by TCW.
Gundlach, 51, who worked at TCW for 25 years and was named Morningstar’s Fixed Income Manager of the Year in 2006, claims the Los Angeles-based unit of Societe Generale SA fired him to avoid having to pay management and performance fees for the distressed-asset funds his group managed and that went “through the roof.” Gundlach seeks about $500 million.
Ten days after he was fired, Gundlach started his own money management firm, DoubleLine Capital LP. TCW sued in January 2010 alleging that Gundlach and three other former employees stole TCW’s trade secrets to start DoubleLine. TCW’s damages expert testified that the company suffered $344 million in damages from Gundlach’s alleged interference with contracts and $222 million from a claimed breach of fiduciary duty.
The case is Trust Co. of the West v. Gundlach, BC429385, California Superior Court (Los Angeles).
Computer Hacking Law Needs Tougher Penalties, Senate Panel Told
The U.S. needs tougher penalties for hackers who break into computers operating the nation’s critical infrastructure, such as power grids and financial networks, a Justice Department official told U.S. lawmakers.
The 1986 Computer Fraud and Abuse Act should be amended to create a mandatory minimum penalty of at least three years in prison for those who carry out cyber attacks on systems key to national and economic security, Associate Deputy Attorney General James Baker said yesterday in testimony to a Senate Judiciary Committee hearing.
Offenses under the computer-fraud law also should be subject to the Racketeering Influenced and Corrupt Organizations, or RICO, Act to target organized crime groups that hack into computer systems, Baker said.
“Our critical infrastructure, such as electrical grid, financial sector, and transportation networks that underpin our economic and national security, have suffered repeated cyber intrusions, and cybercrime has increased dramatically over the last decade,” Baker said in a statement at the hearing.
The testimony from Baker and Pablo Martinez, deputy special agent in charge at the U.S. Secret Service Criminal Investigative Division, echoed proposals from an Obama administration cybersecurity plan, announced in May, for protecting the nation’s critical infrastructure, including banks, power grids and government computers from cyber attacks.
Senate Majority Leader Harry Reid, a Nevada Democrat who is compiling comprehensive cybersecurity legislation on his side of Capitol Hill, solicited the administration’s proposal to guide Congress’s efforts on the issue.
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Economy Trumps Technology on U.S. Lawmakers’ Agenda, Group Says
The economy and upcoming elections may distract Congress from legislation to protect consumer privacy, promote innovation and maintain the Internet’s openness, a technology-policy group said.
“There’s going to be a laser-like focus on the economy and certainly on the Republican primary, and both are going to cast a fairly large shadow over the agenda this fall, but it’s not the whole story,” Leslie Harris, president of the Washington-based Center for Democracy and Technology, said yesterday during a call with reporters.
The attention those issues are getting means the technology agenda, which includes cybersecurity, copyright, and privacy bills “has received only sporadic attention,” she said. The inaction has negative “implications for technology innovation, for the privacy and free-expression rights of Internet users and ultimately for the Internet’s openness,” said Harris, whose group promotes civil liberties online.
House legislation to bolster intellectual property protections is expected soon, David Sohn, CDT’s senior policy counsel, said during the call. In May, the Senate Judiciary Committee approved a measure called the Protect IP Act, which targets websites that sell illegally copied music, movies, pharmaceuticals and consumer products.
The Senate measure would allow the U.S. attorney general to seek court orders requiring U.S.-based Internet-service providers to block access to infringing sites. CDT sent a letter objecting to the bill during the Senate markup.
Ordering Internet service providers to block access to infringing sites may lead other nations to take actions that “hinder online freedom of expression,” according to the letter that CDT and 12 other groups sent to the Senate Judiciary Committee in May.
Congress will also consider online privacy measures including legislation aimed at limiting law enforcement access to consumers’ e-mail and location-based information gathered on mobile devices, Nojeim said.
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