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AOL, Sanofi, Rosetta Stone, Google: Intellectual Property

April 10 (Bloomberg) -- AOL Inc., under shareholder pressure to make changes as revenue falls, will sell and license patents to Microsoft Corp. in an agreement worth $1.06 billion.

The Internet company will sell more than 800 patents and related applications to Microsoft and grant the software maker a nonexclusive license to its retained patent portfolio, the companies said yesterday in a statement. AOL will hold more than 300 patents and applications after the transaction.

The arrangement lets New York-based AOL generate additional funds amid slow advertising growth and a decline in dial-up Internet subscribers. The company, whose revenue has dropped 29 percent since it was spun off from Time Warner Inc. in late 2009, has faced pressure from shareholder Starboard Value LP to consider moves such as a patent deal.

Microsoft, the world’s biggest software maker, is adding the patents as it battles with Motorola Mobility Holdings Inc. to protect intellectual property rights related to the Windows mobile-phone operating system and Xbox video-gaming consoles. The AOL deal comes as technology giants including Apple Inc. and Google Inc. are building patent war chests in efforts to fend off litigation and defend sales of top products.

Tim Armstrong, AOL’s chief executive officer, said he expects the license arrangement with Microsoft to generate $100 million over the life of the patents.

AOL reached the agreement late on April 5 after an open auction, with many companies submitting bids, Armstrong said. He declined to identify other bidders. AOL said it plans to return a “significant portion” of the sale proceeds to shareholders

Starboard, which started pushing for change last year, had said AOL’s patent portfolio could yield more than $1 billion. Patent-advisory firm M-Cam Inc. estimated that AOL’s patent portfolio would be valued at about $290 million in a sale.

Microsoft has accused Motorola Mobility, the mobile phone maker being bought by Google, of infringing seven patents and is seeking to block U.S. imports of devices that violate its intellectual property rights.

Separately, Motorola Mobility has demanded $4 billion a year in patent royalties for use of technology critical to functioning of the Xbox video-gaming system, Microsoft said in a March 30 filing.

Sanofi’s Patents on Cancer Drug Taxotere Invalidated

Sanofi’s two patents on the cancer drug Taxotere were ruled invalid and unenforceable by a U.S. court yesterday in a victory for generic-drug makers Hospira Inc. and Apotex Inc.

The U.S. Court of Appeals for the Federal Circuit upheld a lower court finding on patents 5,714,512 and 5,750,561. The decision was posted on the court’s website.

Taxotere, the successor to the cancer drug Taxol, generated 922 million euros ($1.2 billion) last year for Paris-based Sanofi. That’s a 57 percent drop from the year before because of generic-drug competition, Sanofi said Feb. 8.

The Federal Circuit, which specializes in U.S. patent cases, said a judge was correct to rule that the two patents were obvious variations of earlier research, and that the inventor misled the U.S. Patent and Trademark Office to obtain the patents by withholding that earlier know-how.

Sanofi was disappointed by the Court of Appeals decision on the patents for Taxotere and is evaluating its options, said Carrie Brown, a spokeswoman.

The case is Aventis Pharma SA v. Hospira Inc., 11-1018, U.S. Court of Appeals for the Federal Circuit (Washington). The lower court case is Aventis Pharma SA v. Hospira Inc. and Apotex Inc., 07CV721, U.S. District Court, District of Delaware (Wilmington).

For more patent news, click here.


Rosetta Stone Trademark Claims Against Google Revived

Rosetta Stone Inc. had some trademark-infringement claims against Google Inc., the world’s largest Internet search company, restored by a federal appeals court and returned to the trial court for further consideration.

Rosetta Stone had asked the U.S. Court of Appeals in Richmond, Virginia, to overturn U.S. District Judge Gerald Bruce Lee’s decision in 2010 that Google’s sales of Rosetta Stone’s trademarked phrases as keywords in Web searches wouldn’t confuse customers. Rosetta Stone, a maker of language-learning software, claimed the keywords were sold to rivals and counterfeiters.

“A reasonable trier of fact could find that Google intended to cause confusion in that it acted with the knowledge that confusion was very likely to result from the use of its marks,” the appeals judges said in yesterday’s ruling.

Google sells advertisers the rights to use certain words or phrases as keywords for the paid ads, known as sponsored links, on its search site. The links direct users to the advertisers’ websites. Advertisers bid what they will pay Google for each click on an ad triggered by the keyword. The highest bid and other factors determine whether the keywords can be used. Google, based in Mountain View, California, derives most of its revenue from ad sales.

The keywords that Google sold to other businesses include “Rosetta Stone” and “”

“Each time Rosetta Stone informed Google that a particular advertiser was selling counterfeit Rosetta Stone products, Google promptly took action including removing the advertisement,” Google said in its appeal brief.

Diana Adair, a spokeswoman for Google, said, “We think that the legitimate use of trademarks as keyword triggers helps consumers to make more informed choices. For what remains of the case, we’re confident that we will prevail on both the merits and the law.”

“We are very pleased with the opinion, and we think it is an important precedent,” Clifford Sloan, a lawyer for Rosetta Stone, said in an e-mail.

The appeals court vacated three summary-judgment claims that had gone against Rosetta Stone and affirmed two rulings that that went in Google’s favor.

There was no evidence that Google “acts jointly with any of the advertisers to control the counterfeit Rosetta Stone products,” the judges said.

Rosetta Stone, founded in 1992, provides software for learning more than 30 languages.

The case is Rosetta Stone v. Google, 10-2007, U.S. Court of Appeals for the Fourth Circuit (Richmond, Virginia).

Fake Products Costly to Pakistan’s Economy, Citizens’ Health

Counterfeit products cost Pakistan’s economy at least 21 billion Pakistani rupees ($232 billion), according to a report in Pakistan’s Daily Times.

In addition to the financial losses, the Daily Times reported the fake products have the potential to be hazardous if not lethal for consumers, particularly medical patients.

The Overseas Investors Chamber of Commerce and Industry, whose members represent 189 foreign companies doing business in the country, held a seminar April 2 at which a judicial official said the courts are aware of the need for more serious punishment for violation of IP rights, the Daily Times reported.

The president of the Overseas Investors Chamber said at the conference that new legislation strengthening IP enforcement needs to be passed on a priority basis, according to the newspaper.

Board Longyear, Hayden Diamond Bit Settle Trademark Dispute

Board Longyear Ltd., the world’s largest mineral exploration drilling company, settled a trademark-infringement suit with Hayden Diamond Bit Industries Ltd., a Richmond, British Columbia-based drilling company.

Board Longyear, based in South Jordan, Utah, filed suit in federal court in Helena, Montana in October 2010, accusing Hayden of infringing the “Q” and “RQ” trademarks it uses for its wireline drilling system.

The suit was filed after negotiations between the companies failed, according to court papers. Board Longyear claimed Hayden’s unauthorized use of the marks damaged the Utah company’s market, reputation and goodwill.

The parties came to an agreement and the case was dismissed, according to court filings. Each side is to pay its own litigation costs and attorney fees. Board Longyear said in an April 9 statement that Hayden had agreed to quit using the “Q” and “RQ” trademarks in connection with its earth drilling goods and services. Hayden didn’t respond immediately to an e-mailed request for comment on the agreement.

Other terms of the settlement weren’t disclosed.

The case is Longyear TM v. Hayden Diamond Bit Industries, 6:10-cv-00047-RKS, U.S. District Court, District of Montana (Helena).

For more trademark news, click here.


Google Seeks Mona Lisa as Online Art Embraces Van Gogh, Monet

Google Inc. has expanded its virtual tours to more than 150 of the world’s major museums, featuring high-resolution close-ups of many masterworks -- but not the Mona Lisa.

The latest additions that went online this month include the Musee d’Orsay in Paris and Jerusalem’s Israel Museum. The Louvre in the French capital, home of the Da Vinci masterpiece, isn’t taking part in the website, dubbed Art Project.

“Everyone asks me if we have Leonardo’s Mona Lisa,” Amit Sood, who heads the project, said at a news briefing in Paris. “We’re talking to people from the Louvre. Maybe they’ll be part of the next phase,” he said.

When contacted by telephone by Bloomberg News, a spokeswoman at the Louvre press office declined to comment and wouldn’t give her name.

The site went up in February 2011 with works from the Tate Britain, New York’s Museum of Modern Art and 15 others from nine countries. More than 40 of the museums have now allowed Google to digitalize one artwork at a resolution of 7 billion pixels, or 1,000 times the average digital camera.

The Mountain View, California-based Internet company has sent robot-like devices equipped with cameras to roll around museums from Sao Paulo to Istanbul over the past year, snapping pictures of as many as 30,000 works.

By striking deals only with the museums, and not with artists, their heirs nor foundations, Google avoids having to deal with copyright issues, Sood said. The company has included image security technology in the database to protect the photos, he also said.

Among other museums taking part include the Uffizi Gallery in Florence and the State Hermitage Museum in St. Petersburg.

For more copyright news, click here.

Trade Secrets/Industrial Espionage

General Linen Service Inc. Sues Competitor Over Hacked Computer

General Linen Service Inc. of Newburyport, Massachusetts, sued a similarly named competitor for trade secret misappropriation.

The suit, filed in federal court in Concord, New Hampshire, accuses General Linen Service Co. of Sommersworth, New Hampshire, of hacking into its computer database and using the Massachusetts company’s invoices as a marketing strategy. General Linen Service Inc. claims that as a result of the New Hampshire company’s actions, it has had to lower its prices and lost some customers altogether.

According to court papers, General Linen Service Inc.’s database, which is licensed through Alliant Systems Inc., was hacked by someone from General Linen Service Co., which also uses Alliant. Both companies rent tablecloths and other textile items to restaurants and other food-service entities.

The Massachusetts-based company said it was able to use publicly available databases to identify the hacker.

It claims it has suffered economic harm as a result of General Linen Service Co.’s actions and asked the court for awards of money damages, litigation costs and attorney fees. It also asked the court to triple the damages.

General Linen Service Co. didn’t respond immediately to an e-mailed request for comment.

The case is General Linen Service Inc., v. General Linen Service Co., 1:12-cv-00111-SM, U.s. District Court, District of New Hampshire (Concord).

Customs Says Trade Secrets May Have Been Revealed in Document

U.S. Customs and Border Patrol has posted a notice on the government website that two documents placed in its online “Virtual Reading Room” contains information that may have been a commercial trade secret.

According to the notice, the documents were related to the upgrade of a remote video surveillance system for Arizona, including tribal lands. CBP said it temporarily withdrew public access to the entire Virtual Reading Room, and the two documents were to be removed entirely from the site.

Additionally, DBP said it has a list of everyone who “accessed, viewed or downloaded” the documents, and that it will be contacting each person individual to request that any copies of those documents be deleted and/or destroyed. Those who have done so will be asked to self-certify their actions in writing.

To contact the reporter on this story: Victoria Slind-Flor in Oakland, California, at

To contact the editor responsible for this story: Michael Hytha at

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