Microsoft, Meggitt, W.L. Gore: Intellectual Property

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Microsoft Corp.’s efforts to change the balance of power in patent negotiations with Google Inc. is fueling a court fight that has splintered the electronics industry.

Microsoft claims, and a federal jury agreed, that Google’s Motorola Mobility violated an obligation to offer fair terms on a patent license regarding Wi-Fi and video compression, two technologies used in most modern devices.

The two sides made arguments to the U.S. Court of Appeals in San Francisco Wednesday in a case that’s part of a global debate over how to find the proper value for patents related to fundamental technology used across industries.

This dispute began when Motorola Inc., then a standalone company, wrote to the maker of the Xbox in October 2010 proposing that it pay patent royalties equal to 2.25 percent of the retail price of the video-gaming system.

Microsoft claimed that would amount to $4 billion a year, a violation of Motorola’s obligation to license its patents on standard-essential technology on fair and reasonable terms. Motorola disputed whether Microsoft’s figure was correct and said its 2010 letter was just a boilerplate communication meant to open negotiations.

Google inherited the fight when it bought Motorola Mobility. While it has sold the unit’s handset business, Google retains ownership of the patents.

The case is Microsoft Corp. v. Motorola Mobility Inc., 14-35393, U.S. Court of Appeals for the Ninth Circuit (San Francisco).

W.L. Gore Request for Rehearing of Patent Appeal Is Rejected

In a patent suit that had its origins in the early 1970s, a federal appeals court has rejected a request to rehear the case.

In January, the U.S. Court of Appeals for the Federal Circuit upheld a lower-court ruling that W.L. Gore & Associates Inc. willfully infringed patent 6,436,135, which covers prosthetic vascular grafts used as artificial blood vessels. Royalties paid to Bard over the life of the patent have exceeded $1 billion. The application for the patent was filed in October 1974 and the patent didn’t issue until August 2002.

In the appeal, Gore argued the court needed to address its standard for willfulness while Bard Peripheral Vascular Inc. said a different standard of review wouldn’t change the outcome.

The appeals court rejected without comment the request for what is known as an en banc hearing, before all its judges.

The case is Bard Peripheral Vascular v. W.L. Gore & Associated, 14-1114, U.S. Court of Appeals for the Federal Circuit. The lower court case is Bard Peripheral Vascular v. W.L. Gore & Associates, 2:03-cv-00587, U.S. District Court, District of Arizona (Phoenix).

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Trade Secrets/Industrial Espionage

Meggitt Asks Court for Trade-Secrets Trial Solely on Damages

Meggitt Plc’s Meggitt San Juan Capistrano Inc. unit has asked a Los Angeles federal court to proceed with a trial on damages only in a trade-secrets case against an ex-employee in China and the company he founded.

The case was filed in February 2013 against Nie Yongzhong and his Xiamen Niell Electronics Co. Ltd. Nie was accused of taking trade secrets, including specifications for sensor products. According to court filings, a short time after Nie, an engineer, left Meggitt, his company began offering for sale “highly sophisticated sensor products” that were virtually identical to Meggitt’s.

In September 2013, U.S. District Judge David O. Carter issued a temporary order barring the sale of the allegedly infringing products, saying the facts supported Meggitt’s contention that its trade secrets were being used by Nie’s company.

In a motion filed April 6, Meggitt said the “litigation process has gone off the rails” because of the defendants’ alleged litigation misconduct and asked for a judgment in its favor. Meggitt said Nie deliberately violated court orders requiring production of technical documents related to the allegedly infringing products.

Meggitt, a U.K. defense contractor, called “laughable” Nie’s contention that sanctions were being sought because Meggitt feared a trial.

At various points in the proceedings, the defendants have argued that Chinese law governs the dispute and that the Chinese government had declined to waive trade-secret protections for products produced by Nie’s company.

In an April 6 filing, Nie accused Meggitt of gamesmanship and failing to produce documents in a timely fashion. Meggitt is “using the discovery process as a sword and shield,” Nie said.

The case is Meggitt San Juan Capistrano v. Nie Yongzhong, 8:13-cv-00239, U.S. District Court, Central District of California (Santa Ana).


Red Wing Stoneware Sues Collectors Society for Infringement

In a dispute related to functional and decorative ceramics made in a small town in Minnesota since the 1860s, Wells Valley Enterprises Inc. sued the Red Wing Collectors Society Foundation for trademark infringement.

Wells Valley, which does business as Red Wing Stoneware and Pottery, objects to the name under which the Collectors Society operates, Pottery Museum of Red Wing. Both parties are based in Red Wing, Minnesota.

In its March 3 pleadings, Red Wing Stoneware claims the “Red Wing Pottery” brand was established in 1877 and that it registered “Red Wing” as a U.S. trademark in 2001. The company claims it and its predecessors have used the “Red Wing Stoneware” trade name and mark since the late 1800s. In May 2014, the company said it filed an application to register “Red Wing Stoneware” as a trademark.

It says the collectors’ society lists itself as the “Red Wing Pottery Museum” on its website and used a red wing symbol almost identical to the red wing insignia the company has historically used.

It also objects to the sale of pottery pieces at the museum that are stamped with a logo that “deliberately mimics” the one used on Red Wing Stoneware. The company claims the museum offers ceramics classes and permits the use of the allegedly infringing pottery stamp on pieces they make in class.

The museum filed its answer to the complaint April 6, saying it denies the marks in dispute have been used continuously since the late 1800s. It also denies that it is under any obligation to remove the phrase “the Red Wing Pottery Museum” from its website.

Antique Red Wing pottery is offered for as much as $6,400 on EBay.

The case is Wells Valley Enterprises Inc. v. Red Wing Collectors Society Foundation, 0:15-cv-01146, U.S. District Court, District of Minnesota.

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South Africa Considering Indigenous Knowledge Protection Measure

South Africa’s Minister of Science and Technology has published the text of a bill that would establish an office for the protection of indigenous knowledge systems.

The National Indigenous Systems Office would manage the rights of indigenous knowledge holders, and establish systems and conditions for access to knowledge of their communities.

It would also provide for the registration, accreditation and certification of indigenous knowledge holders and practitioners, and provide for the “facilitation and coordination of indigenous knowledge systems-based innovation.”

The office is seeking public comment through May 20.

Among the categories of indigenous knowledge the bill addresses are literary, performing and artistic works; movable cultural property; immovable cultural property; scientific, technical and spiritual knowledge; and knowledge of and management of biological resources and ecosystems.

According to the bill, those who wish to have access to indigenous knowledge systems for the purpose of scientific, commercial and industrial applications must ask the office for consent. That consent can be granted by the office only after consultations with the relevant indigenous community.

If there is a commercial or an industrial application, a benefit-sharing agreement must be made between the relevant community and the third party, guaranteeing “equitable distribution of any benefits.”

Violations of the act could incur a range of penalties including fines, seizure of all infringing products and suspension of their sales, loss or reduction of funding incentives, and prohibition of entering into contracts with government departments for as long as five years.

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