April 20 (Bloomberg) -- Facebook Inc., the biggest social-networking service, made an offer for AOL Inc.’s patent portfolio before losing out to Microsoft Corp.’s $1.06 billion bid, two people with knowledge of the matter said.
The proposal from Menlo Park, California-based Facebook was too low, said the people, who asked not to be identified because the discussions haven’t been disclosed. Facebook Chief Operating Officer Sheryl Sandberg led the negotiations to acquire AOL’s patents, one person said.
Microsoft intends to sell most of the newly acquired portfolio because it doesn’t consider all of the 800 patents and related applications essential to its intellectual property arsenal, according to another person with knowledge of the matter. The technology industry has been bulking up on patents amid a surge in disputes over ownership of rights to key breakthroughs in areas such as mobile communications.
Facebook said it’s buying the Instagram photo-sharing tool for $1 billion the same day Microsoft unveiled the AOL deal.
Larry Yu, a spokesman for Facebook, declined to comment, as did Kevin Kutz, a spokesman for Redmond, Washington-based Microsoft and Caroline Campbell, a spokeswoman for New York-based AOL.
Facebook has lined up $8 billion of available credit from its IPO underwriters. Like more established technology companies, such as Apple Inc. and Google, it is buying intellectual property to protect itself from patent-infringement litigation.
Facebook, which is in the midst of a patent dispute with Yahoo! Inc., acquired 750 patents from International Business Machines Corp., a person with knowledge of the matter said on March 22. Yahoo sued Facebook on March 12, alleging that the social network infringed patents covering such functions as Internet advertising and information sharing.
“If an unfavorable outcome were to occur in this litigation, the impact could be material to our business, financial condition or results of operations,” Facebook said in a March 27 filing.
Nestle Wins Backing in Europe Over Nespresso System Patent
Nestle SA’s Nespresso coffee brand won the backing of the European Patent Office over a disputed patent covering its coffee machine and capsules.
The regulator upheld the existing patent in an “amended form” by a committee of technical experts following objections made by companies including Sara Lee Corp., the office said yesterday in an e-mailed statement. The competing companies have the right to appeal the decision, the Munich-based body said.
Nespresso has sued companies including Sara Lee for alleged patent infringement while rejecting counterclaims. Rivals say their capsules don’t infringe on any patents, seeking to edge in on a market where retail sales may climb 47 percent globally from 2010 to 2015, according to Euromonitor International.
“The decision of the court was positive for our Nespresso” system, Nespresso Chief Executive Officer Richard Girardot said. “Obviously we are satisfied.”
Sara Lee is studying the office’s amendment to determine if it needs to take further steps, Ernesto Duran, a spokesman for Sara Lee based in the Netherlands, said by e-mail.
Nestle has built Nespresso into a brand worth more than 3.5 billion francs ($3.8 billion) after more than a decade of double-digit growth by marketing the coffee as an affordable luxury.
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Orthodox Union Sues MOOMilk for Using Mark Without Authorization
The Union of Orthodox Congregations of American, one of the organizations that provides Kosher certification for food in the U.S., sued a Maine organic dairy for trademark infringement.
The group’s complaint, filed in federal court in Boston April 11, claims Maine’s Own Organic Milk Company L3C used the Orthodox union’s trademark without authorization. The union’s mark, known as a “hechsher” is a circle containing the letter “U”, and is placed on food to indicate that it is certified as fit for consumption under Jewish law.
The Orthodox union said it initially contacted the dairy about its unauthorized use of the hechsher in June 2010. The dairy, known as MOOMilk, applied for certification that month and received its initial inspection in December 2010, according to the complaint.
The dairy never paid the fees and, continued to use the hechsher on its cartons without authorization, the Orthodox union said in its court papers.
The Orthodox union said it’s harmed by the unauthorized use of the mark, and that kosher consumers are likely to be confused and misled when they see it on MOOMilk’s products.
The group asked the court to bar further use of the hechsher without authorization and for awards of money damages, attorney fees and litigation costs.
Filed with the complaint is a series of letters between the union and the dairy in which an official of the Maine-based company said that it lacked the $5,500 necessary for certification.
MOOMilk’s executive director, William Eldridge, said in an e-mail that it’s pulling milk cartons off the shelf that contain the mark. With the union’s permission, that milk is being donated to the Boston Food Bank with the mark blacked out, and Eldridge said he is in settlement discussions with the Orthodox union’s legal counsel
The Orthodox union is represented by Charles L. Solomont and David J. Butler of Boston’s Bingham McCutchen LLP.
The case is Union of Orthodox Jewish Congregations of America v. Maine’s Own Organic Milk Co. L3c.
Greg Norman Gear Sold Outside Licensed Area Infringes Trademark
Australia’s Federal Court has dismissed an appeal of a trademark-infringement case involving marks associated with golf pro Greg Norman, the Australia SmartCompany website reported.
Paul’s Retail Pt. Ltd.’s Paul’s Warehouse unit, a discount retailer of sporting goods, was found to have infringed Norman’s trademarks by importing and selling goods that were licensed only to be sold within India, according to SmartCompany.
The court found that the trademark owner hadn’t consented to the use of its marks for goods that were to be delivered outside the territory covered by the license, SmartCompany reported.
Costs were awarded to the brand owner, according to SmartCompany.
Alfa Romeo Sets Return to U.S. as 4C Sports-Car Brand Filed
Fiat SpA’s Alfa Romeo division took a step closer to its return to the U.S. after registering the brand of its 4C compact sports car, the unit’s first model targeted for sale in the country in almost 20 years.
The Alfa Romeo 4C trademark, covering accessories such as clothing and toys as well as the vehicle and parts, was issued by U.S. Patent and Trademark Office on April 10, according to a release posted late April 18 on the U.S. Federal News Service.
The 4C is part of a revamp of Alfa Romeo that will include the new Giulia sedan, which will be based on the Dodge Dart platform of Fiat-controlled Chrysler Group LLC for a lineup developed and made in the U.S. starting in 2014, according to a person familiar with the matter.
The production version of the two-seat 4C may be displayed at the 2013 Geneva car show, said the person, who declined to be named as the plan is private.
Fiat Chief Executive Officer Sergio Marchionne plans to remake Alfa into a luxury brand to compete with industry leader Bayerische Motoren Werke AG. Developing a full range of models for Alfa and focusing on North America’s car-market growth are crucial to his strategy of boosting combined revenue at Turin, Italy-based Fiat and Chrysler to more than 100 billion euros ($131 billion) by 2014.
“The return of Alfa in the U.S. is critical for the group as a global player needs to have an upscale brand in a major market as North America,” Jeff Schuster, LMC’s senior vice president of forecasting in Troy, Michigan, said in a phone interview. “This is a real sign Alfa will come back to U.S.”
Gucci-Guess Trial Over ‘Studied Imitations’ Claim Concludes
Gucci America Inc., the maker of luxury clothing and accessories, made its final arguments in federal court yesterday in a lawsuit claiming that Guess? Inc. copied its trademarked designs.
U.S. District Judge Shira Scheindlin conducted a three-week nonjury trial of Gucci’s infringement claims in Manhattan. She reserved judgment yesterday and told lawyers for both sides after their closing arguments to submit post-trial documents “as quickly as you can. I want to get through this while it’s still fresh in my mind,” she said.
Gucci, a unit of Paris-based PPR, sued Guess in 2009 claiming that the Los Angeles-based clothing maker was selling apparel and accessories in stores and online with logos that are “studied imitations of the Gucci trademarks.” The imitations included a green-and-red stripe design, a square G, the designer’s name in flowing script and a diamond pattern with repeating interlocking G’s.
“This was in fact a calculated scheme to infringe on some of Gucci’s most iconic trademarks,” Louis Ederer, a lawyer for Gucci, said in his closing argument. He said in March that $221 million worth of Guess products infringed Gucci’s designs.
Guess said in court papers that Gucci has no right to claim infringement because it “sat on its rights” for at least seven years before suing.
Gucci is seeking monetary damages and other assessments totaling as much as $120 million, Ederer said in court.
Scheindlin interrupted Ederer’s closing at one point to ask why Gucci had waited years before filing the lawsuit.
“Millions of products were sold in the U.S. with Quattro G designs,” the judge said. “The advertisements were all over the place. How could they have missed it?”
Ederer replied, “Private investigators were looking for a lot of other things besides what other fashion designers were doing. We were focused on counterfeiting. No one came forward and notified anyone at Gucci America about this.”
The defendants also include Guess’s exclusive footwear licensee, Marc Fisher Footwear, Max Leather Group and Swank Inc.
“Gucci’s claims of a sophisticated and elaborate scheme are simply not supported by evidence,” Darren Saunders, a lawyer for Marc Fisher, said in his closing argument. “What are Gucci’s claims really about? They’re about a few shoes that, yes, came too close.”
The case is Gucci America v. Guess Inc., 09-4373, U.S. District Court, Southern District of New York (Manhattan).
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Sony-Led Group Wins EU Approval to Buy EMI Music Publishing
A Sony Corp.-led group won European Union approval for its $2.2 billion purchase of EMI Group’s music publishing unit after it agreed to sell rights to chart hits by Robbie Williams and Ozzy Osbourne.
The European Commission approved the deal after the Sony group offered to sell the global rights to EMI’s Virgin catalogs and Sony/ATV Music Publishing’s Famous U.K. portfolio, the regulator said in an e-mailed statement.
Sony and Mubadala Development Co. “have offered to divest valuable and attractive catalogs containing bestselling titles as well as works of successful and promising authors,” EU Competition Commissioner Joaquin Almunia said in the statement. “I am therefore satisfied that the competitive dynamics in the online music publishing business will be maintained.”
The deal will give the Sony group control of EMI’s publishing rights to classics such as “New York, New York” and “Stand By Your Man,” adding to a portfolio of songs by Elvis Presley, the Beatles and Bob Dylan. Sony/ATV, the joint venture formed in 1995 that is co-owned by Sony Corp. and Michael Jackson’s estate, will oversee the new business.
The Sony consortium, which includes billionaire David Geffen and Mubadala, an investment unit owned by the Abu Dhabi government, “is pleased that commission’s issues were addressed in its initial review period so that the transaction could be approved,” said Jimmy Asci, a spokesman for Sony/ATV in New York in an e-mailed statement.
The Sony group’s offer to sell the song catalogs eliminated antitrust concerns about the company’s control over online rights for chart hits by British and American artists, the EU said. “Anglo-American chart hits are an indispensable part of any online platform offering to consumers,” it said.
Dylan Jones, a spokesman for EMI, and Warner Music Group, an unsuccessful bidder for EMI, both declined to comment.
Citigroup Inc. agreed in November to sell EMI Group’s recorded-music and publishing businesses in separate transactions for a combined $4.1 billion. Universal will buy EMI’s record labels, home to Katy Perry and Coldplay, for 1.2 billion pounds ($1.9 billion), according to statements in November.
Impala, a Brussels-based group of independent record labels that opposed the deal, is convinced that “the impact of this merger on the livelihood of authors has been underestimated, while the ability of the remedies to secure future competition has been overestimated,” Helen Smith, the group’s executive chair, said in an e-mail.
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Honigman Miller Adds Former Patent Examiner to IP Practice Group
Honigman Miller Schwartz & Cohn LLP hired Paola Abi-Nader for its IP practice, the Detroit-based firm said in a statement.
Abi-Nader, who will be doing patent-application work for high-tech companies, previously was a patent examiner at the U.s. Patent and Trademark Office. Before she was a lawyer, she worked as an engineer in the auto-supply industry.
She has an undergraduate degree in electrical engineering from Wayne State University and a law degree from Detroit Mercy School of the Law.
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