DuPont, Makhteshim, Kodak, News Corp: Intellectual Property
China-based hackers rifled the computers of DuPont Co. (DD) at least twice in 2009 and 2010, hunting for technological secrets that made the company one of the world’s most successful chemical makers.
It’s not something investors would have learned from DuPont’s regulatory filings, or from those of other companies victimized by hackers.
Over the next three months, as publicly traded companies file 10-K’s, investors may see new admissions of corporate networks being hacked after the SEC said companies can’t continue to hold back the details of those incidents.
As cyberspies from China, Russia and other countries ransack the computer networks of one major U.S. and European firm after the next, the SEC in October offered its new interpretation of disclosure requirements as applied to cybercrime.
Daniel Turner, a spokesman for Wilmington, Delaware-based DuPont, said, regarding the previously-reported hack, “We let our disclosures speak for themselves.”
Mandiant Corp., an Alexandria, Virginia-based security firm that specializes in cyber-based industrial espionage, has responded to incidents at 22 Fortune 100 companies, said Richard Bejtlich, the firm’s chief security officer.
When Google Inc. (GOOG) announced in 2010 that China-based hackers had raided its networks, it was a rare example of a U.S. company publicly revealing a cyberburglary aimed at its intellectual property -- in this case, its source code.
Google, the world’s largest search-engine firm, said at the time that at least 34 other major companies were victims of the same attack. Only two -- Intel Corp. (INTC) and Adobe Systems Inc. (ADBE) -- stepped forward, and they provided few specifics.
The networks of more than 2,000 companies, research universities, Internet service providers and government agencies were hit over the past decade by China-based cyber spies, according to Joel Brenner, U.S. counterintelligence chief until 2009.
The companies, including firms such as Research In Motion Ltd. and Boston Scientific Corp. (BSX), range from some of the largest corporations to niche innovators in sectors like aerospace, semiconductors, pharmaceuticals and biotechnology, according to intelligence data obtained by Bloomberg News.
The oil and gas industry has been a frequent target of successful cyber-raids -- many originating from China, which is on a hunt for global oil reserves.
Beginning in 2009, the networks of at least six major U.S. and European energy companies were breached by China-based hackers. The victims included Exxon Mobil Corp., Royal Dutch Shell Plc, ConocoPhillips and BP Plc.
The oil companies’ financial filings from the period didn’t assess possible losses or mention the attacks, which became public through a report by Bloomberg News.
John Roper, a spokesman for ConocoPhillips, and Alan Jeffers, a spokesman for Exxon Mobil, said their companies don’t comment on security matters. Toby Odone, a London-based BP spokesman, and Kayla Macke, a Shell spokeswoman, declined to comment.
Investors haven’t done more to press for details and the impact of attacks because “they now look at an investing cycle as maybe a quarter or at most a year,” said Eden Chen, portfolio manager at Los Angeles-based Lightmark Capital. That’s too short a time for stolen technology to make a significant difference in many companies’ fortunes, he said.
“If you are looking at companies for 10 years down the line you would definitely ask those questions,” he said.
Makhteshim Wins BASF Insecticide-Patent Lawsuit in U.S.
Makhteshim-Agan Industries Ltd. (MAIN), the world’s largest maker of generic agrochemicals, said it won a lawsuit brought by BASF SE (BAS) that had accused the company of infringing insecticide patents.
Makhteshim’s insecticides using the chemical fipronil don’t infringe two BASF patents, U.S. District Judge William Osteen in Greensboro, North Carolina, ruled Jan. 9, according to a statement by Makhteshim. Ludwigshafen, Germany-based BASF, the world’s biggest chemical company, had claimed Makhteshim violated patents that cover the Termidor insecticide.
Termidor, which has been sold for more than 10 years, is the top-selling termite product in the U.S. Makhteshim, based in Israel, said it introduced the first generic version of fipronil in June with its Taurus and Prefurred pest-control products. BASF said in a statement it would appeal the ruling, and the decision doesn’t affect the validity or enforceability of its manufacturing patents for fipronil.
BASF also had sued Cheminova A/S over the same technology. The companies agreed to settle that case, BASF said, and Cheminova won’t make or sell its fipronil product until the patents expire. Further terms weren’t disclosed, BASF said.
China National Chemical Corp. bought a 60 percent stake in Makhteshim in an agreement that valued the agrochemical company at $2.4 billion.
The cases are BASF Agro B.V. Arnhem Wadenswil Branch v. Cheminova Inc., 10-cv-00274, and BASF Agro B.V. Arnhem v. Makhteshim Agan of North America, 10-cv-00276, U.S. District Court, Middle District of North Carolina.
Kodak Sues Apple, HTC Claiming Patent Infringement
Eastman Kodak Co., the 131-year-old imaging company that is turning to its patent portfolio to help fund a turnaround, sued Apple Inc. (AAPL) and HTC Corp. (2498) yesterday, claiming infringement of technology related to digital photographs.
The lawsuits in federal court in Rochester, New York, accuse the smartphone makers of using Kodak inventions covered by four patents related to image transmission, such as a way for users to share images directly from cameras. Kodak also claims HTC is infringing a fifth patent for an image preview feature, which is at the center of a U.S. International Trade Commission case against Apple and Research In Motion Ltd. (RIM)
Kodak, which is predicted by analysts to report its fourth straight annual net loss, has put the company’s more than 1,100 digital-imaging patents up for sale to help fund a turnaround. Chief Executive Officer Antonio Perez, who is now betting on digital printers for publishers, packagers, advertisers and households to lift Kodak, has said that the Apple-RIM trade commission case could generate $1 billion in new revenue.
The case instead has met with delays including the retirement of the judge handling the case, and a final decision isn’t expected until September. Kodak said it also filed new patent complaints at the trade commission today in Washington, seeking to block imports of products including Apple’s iPad and iPhone, and HTC’s Flyer tablet and Wildfire S phone.
“We’ve had numerous discussions with both companies in an attempt to resolve this issue, and we have not been able to reach a satisfactory agreement,” Laura Quatela, Kodak’s chief operating officer, said in a statement.
HTC, based in Taoyuan, Taiwan, had no comment on the complaints. Officials with Cupertino, California-based Apple didn’t immediately reply to a request for comment.
Kodak claims infringement by Apple’s iPad 2, iPhone and iPod Touch, and by HTC’s tablets and phones, including the Flyer, EVO View 4G, Jetstream, Vivid, Amaze 4g, Desire, Hero S, Rezound, Rhyme, Sensation 4G and Wildfire S.
The new case against Apple is Eastman Kodak Co. (EK) v. Apple Inc., 12cv6020, and the case against HTC is Eastman Kodak Co. v. HTC, 12cv6021, both in U.S. District Court for the Western District of New York (Rochester).
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Obscene Words on T-Shirts Draw University Trademark Suit
The suit, filed Jan. 6 in federal court in Clarksburg, West Virginia, accused t-shirt companies of producing and selling shirts that infringe on the school’s trademarks.
Many of the shirts, which are pictured in the complaint, are made in the school’s colors of blue and gold and feature texts in a font similar to that used on the school’s licensed products.
Texts on some of the allegedly infringing shirts contain an obscene word between “West” and “Virginia,” or feature the image of a hand with an upraised middle finger in place of the outline of the state. The defendants are also accused of selling other infringing products including temporary tattoos and portable coolers.
The school complains that if the public perceives “a lack of quality, or any impropriety” on the defendants’ products, the goods may mistakenly be attributed to the university. This inflicts “irreparable harm” to the school’s goodwill and reputation, according to court papers.
Also at issue are several Internet domain names where the allegedly infringing products are sold. The domain names also contain an obscene word between “West” and “Virginia,” according to the complaint.
The university asked the court to bar further infringement of its marks, and to order the recall and destruction of all infringing merchandise and promotional material.
Additionally, the school seeks money damages, including all profits defendants derived from their alleged infringement, and asked to be transferred the offending Internet domain names. The court is also asked for awards of attorney fees and litigation costs.
The case is West Virginia University Board of Governors v. Miviman LLC, 1:12-cv-00005-FPS, U.S. District Court, Northern District of West Virginia (Clarksburg).
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News Corp. Hires Williams & Connolly Partner as General Counsel
Zweifach, who joins from Washington’s Williams & Connolly LLP, is a litigator who has handled patent, antitrust, media, first amendment and securities disputes. Among the clients he has represented in patent disputes are Sony Corp., Eastman Kodak Co., Time Warner and Zenith Goldline Pharmaceuticals Inc., according to Bloomberg data.
He has an undergraduate degree from Brown University and a law degree from Yale University.
Jones Day Loses High-Profile Litigator Turner to McDole Kennedy
Turner, who joins from Washington-based Jones Day (1113L), is litigator who has handled patent, copyright, trade secret and trademark disputes. He’s also served as an arbitrator, special master, mediator, technical advisor, consultant or expert witness in various disputes.
He has represented clients whose technologies have included hospital identification bands, nuclear logging apparatus, water hose irrigation systems, consumer products, knee braces, oil- drilling equipment, pagers and speed controllers for hand tools.
Turner has an undergraduate degree from Rice Institute and a law degree from the University of Texas.
To contact the editor responsible for this story: Michael Hytha at email@example.com.