Barnes & Noble, Emerson, Sturgis: Intellectual Property

March 14 (Bloomberg) -- Barnes & Noble Inc., the biggest U.S. bookstore chain, lost its bid for a federal judge to dismiss some claims it infringed Alcatel-Lucent patents related to Internet commerce.

Barnes & Noble, based in New York, sued Alcatel-Lucent in July 2010, seeking a ruling that it hasn’t infringed patents registered by the telecommunications company, which had warned of possible legal action. A federal jury in Texas has already ruled that some of the patents at issue weren’t infringed, Barnes & Noble said.

U.S. District Judge George Daniels today at a hearing in Manhattan allowed two claims to remain in litigation. He dismissed one infringement claim because Alcatel-Lucent licensed the patent to Microsoft Corp., whose products Barnes & Noble uses on its website.

Of six patents in the initial filing, three were at issue today. Two claims the judge allowed to remain included patents for technology related to checkout functions on e-commerce sites and the use of a search engine that, after the user types in a product search, returns results that don’t exactly match the specified product.

“They had their shot,” Gerard Haddad, a lawyer for Barnes & Noble, told the judge today, referring to the Texas verdict. “They asserted the same elements against Barnes & Noble in the same way.”

Daniels today rejected the company’s Texas ruling argument.

“It’s inappropriate for this court to try to decipher what issues” the Texas jury considered that may apply to this case, Daniels said.

Alcatel-Lucent, based in Paris, said the infringement occurred on the retailer’s website, Alcatel-Lucent has appealed the Texas verdict to the Court of Appeals for the Federal Circuit. Oral arguments in that case may be heard in May, said Thomas Mahlum, a lawyer for Alcatel-Lucent.

Mahlum argued today that the Texas verdict shouldn’t apply to the New York case.

“We’re talking about different systems,” Mahlum said. “The evidence is different and the functionality is different.”

Alcatel-Lucent sought a stay in the proceedings in New York until the appeals court rules. Daniels denied the stay.

“That’s not the way it works,” the judge said. Referring to the Texas verdict, he said, “Your claims continue to be invalid.”

The case is Barnes & Noble Inc. v. Alcatel-Lucent USA Inc., 10-cv-05759, U.S. District Court, Southern District of New York (Manhattan).

Emerson’s Artesyn Loses Bid to Overturn SynQor Patent Win

SynQor Inc.’s $95 million patent-infringement victory against nine manufacturers of power converters in computer systems, including Emerson Electric Co.’s Artesyn, was upheld yesterday by a U.S. appeals court.

The U.S. Court of Appeals for the Federal Circuit in Washington upheld a jury verdict won by SynQor and said the trial judge was correct to enhance the damage award. The decision was posted on the court’s website.

The dispute is over safety features that control how much electricity goes to large computer systems, as well as telecommunication and data communication equipment. The other companies that remained in the appeal are Emerson’s Astec, Delta America Ltd., Bel Fuse Inc. and Murata Manufacturing Co.

Emerson’s Artesyn and Astec were told to pay about $14 million; Delta $5.8 million; Murata about $18 million; and Bel Fuse $8.1 million, according to the final judgment issued by the judge in the case. The companies also were told to pay additional damages for infringement after the verdict, and $500,000 in sanctions were imposed on Delta for violating court rules.

The case is SynQor Inc. v. Artesyn Technologies Inc., 2011-1191, U.S. Court of Appeals for the Federal Circuit (Washington). The lower court case is SynQor Inc. v. Artesyn Technologies Inc., 07-cv-00497, U.S. District Court, Eastern District of Texas (Marshall).

Apple Decision in Samsung ITC Case Rescheduled to May 31

A final decision in Samsung Electronics Co.’s patent-infringement case against Apple Inc. was delayed by U.S. trade officials until May 31 as they seek input on the effect of a possible import ban of the iPhone and iPad.

The U.S. International Trade Commission said it wanted to know more about how a ban would affect the market for smartphones and tablet computers. The question pertains to one of the four patents that Samsung asserted against Apple, for a way that phones transmit data.

The notice could indicate the commission is considering a finding Apple violated that Samsung patent. The agency could be trying to fashion a compromise that would give Apple time to work around the patent, or to deny an import ban because of the impact on consumers, said Rodney Sweetland, a lawyer with Duane Morris in Washington who specializes in ITC cases.

“Were they not thinking about a violation, they would not need to ask for further information of this nature,” Sweetland said in a telephone interview.

The commission asked for comments on what type of later-generation products are available that are authorized by Samsung to use the technology covered by the patent, and whether they are acceptable substitutes to the iPhone and iPad.

The ITC last declined to issue an import ban on public policy grounds in 1984, when it decided that barring hospital beds designed for burn victims would harm patients who might not be able to get the equipment. In a patent case won by Apple against HTC Corp., the commission gave the Taiwanese handset maker time to design around the Apple invention.

Samsung’s case against Apple is In the Matter of Electronic Devices, Including Wireless Communication Devices, 337-794, and Apple’s case against Samsung is In the Matter of Electronic Digital Media Devices, 337-796, both U.S. International Trade Commission (Washington).

For more patent news, click here.


Sturgis Bike Rally Trademark Dispute Must Go to Jury, Judge Says

In a case involving South Dakota’s annual motorcycle rally and a company that sells souvenirs, a federal magistrate judge has said the dispute should be decided by a jury.

The suit was filed in South Dakota in June 2011 by Sturgis Motorcycle Rally Inc., organizers of the rally who are seeking to halt unauthorized use of its trademarks. The rally, held annually in Sturgis in August, has attracted as many as 600,000 bikers and motorcycle fans.

Rushmore Photo & Gifts Inc. was accused of offering merchandise to retailers falsely designated as officially licensed products. The rally sponsors also objected to applications the company has filed with the U.S. Patent and Trademark Office to register “Officially Licensed Sturgis” and “Sturgis Motor Classic” as trademarks.

Rushmore Photo, based in Custer, South Dakota, was acting in bad faith, the rally sponsors claimed, and has also registered and used domain names that violated the rally’s trademarks, according to the complaint.

Wal-Mart Stores Inc. was added as a defendant in April 2012, with rally organizers claiming the retailer was selling infringing merchandise.

In his March 6 ruling, U.S. Magistrate Judge John Simko said that there are genuine issues about material facts to be resolved by the jury. These facts relate to the classification of the term “Sturgis” as descriptive or generic, and to its secondary meaning if it’s classified as descriptive, he said.

The case is Sturgis Motorcycle Rally Inc., v. Rushmore Photo & Gifts Inc., 5:11-cv-05052-JLV, U.S. District Court, Western District of South Dakota (Sioux Falls).

For more trademark news, click here.


IPhone the Prize for Small Carriers Backing Unlocked Devices

Small wireless carriers see a new path to scoring users of Apple Inc.’s iPhone and other popular handsets: the legalization of unlocking mobile devices.

Regional and rural wireless providers are backing several bills in Congress that would let consumers unlock mobile phones and tablet computers without carriers’ permission. Big phone companies often land exclusive rights to offer the hottest devices, and U.S. rules currently prohibit altering software to let new phones from one carrier to work on other networks.

“Smaller carriers have a very difficult time getting access to smartphones and handsets,” said Steven Berry, president of the Competitive Carriers Association, which represents such companies as U.S. Cellular Corp. and Bluegrass Cellular.

The Washington-based trade group is seeking to undo a decision from the Copyright Office of the Library of Congress, backed by largest U.S. mobile providers Verizon Wireless and AT&T Inc., barring consumers from unlocking their handsets without their carrier’s approval. The rules change, which took effect Jan. 26, reversed an earlier exemption under copyright law.

The Library of Congress’s Copyright Office, as part of a periodic review, said changing software to let one carrier’s phones work on other networks wasn’t among activities expressly permitted under copyright law.

CTIA-The Wireless Association, with members including Verizon, AT&T, Sprint Nextel Corp. and T-Mobile USA Inc. had argued that “locking cellphones is an essential part of the wireless industry’s dominant business model” involving handset subsidies and contracts, Librarian of Congress James Billington said in the notice.

Senate Judiciary Committee Chairman Patrick Leahy, a Vermont Democrat, and Charles Grassley of Iowa, the panel’s top Republican, introduced a bill March 11 to overturn the Library of Congress’s decision and direct the agency to consider adding tablet computers to devices that consumers can unlock.

President Barack Obama’s administration said March 4 that consumers should be allowed to unlock smartphones and tablet computers without risking criminal penalties, citing a White House online petition endorsed by more than 114,000 people.

Handset makers and big-box retailers such as Best Buy Co. have begun selling unlocked devices that work with multiple carriers. Partly because consumers have that option, unlocking newly purchased devices doesn’t merit an exemption under copyright law, Billington said.

For more copyright news, click here.

Trade Secrets/Industrial Espionage

DuPont Trade-Secret Prosecutors Add 7 Charges Against Liew

California businessman Walter Liew was charged with seven new crimes, including filing false tax returns, in a revised indictment alleging he conspired to provide DuPont Co. trade secrets to a Chinese company.

Federal prosecutors filed the new charges today in a revised indictment in federal court in San Francisco.

China’s Pangang Group Co., Liew and two former DuPont employees were charged last year with conspiring to steal information about chloride-route titanium oxide, a white pigment used in paint, plastics and paper.

Pangang runs the largest titanium complex in China and is one of the country’s biggest titanium pigment producers, according to its website.

Liew, of Orinda, California, and the other defendants sold the confidential information to Pangang so it could develop a large-scale titanium-oxide factory in Chongqing, prosecutors allege.

Simona Agnolucci, an attorney for Liew, didn’t immediately respond to an e-mail message seeking comment on the new charges.

The case is U.S. v. Liew, 3:11-cr-00573, U.S. District Court, Northern District of California (San Francisco).

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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