Farney Daniels, Time Warner: Intellectual Property

Oct. 3 (Bloomberg) -- A cease-and-desist letter by Nebraska’s attorney general to a law firm representing a patent owner isn’t enforceable, a federal judge in Omaha ruled.

In a July 18 letter to Georgetown, Texas-based Farney Daniels LLP, the state’s Attorney General Jon Bruning said the firm is making infringement assertions that “are unsubstantiated and contain false, misleading or deceptive statements.”

Its actions may violate the Nebraska Consumer Protection Act, Bruning said, demanding that Farney Daniels “immediately cease and desist the initiation of any and all new patent infringement enforcement efforts within the state.”

Bruning accused Farney Daniels’s client, Activision TV Inc., of being a “patent troll,” a pejorative term for a patent owner who doesn’t make goods or provide services covered by the patents it seeks to enforce.

Farney Daniels said in response that while Bruning “may have concerns about the U.S. patent system and how it works or particular types of patent owners,” the firm had lawfully represented its clients in upholding their rights, according to court papers.

Bruning’s actions “should be of concern to every firm in the country that works to protect and enforce the lawful rights of U.S. patent owners,” Farney Daniels said.

The firm then asked the court to determine whether it could represent Activision without running afoul of the cease-and-desist order and if the court had the jurisdiction to determine the constitutionality of the cease-and-desist order.

The underlying suit was filed July 12. Naples, Florida-based Activision had claimed that Pinnacle Bancorp Inc., of Central City, Nebraska, infringed two patents relating to a remote control display system.

In dispute are patents 8,330,613, and 7,369,058. Activision filed suits in other judicial districts claiming additional defendants also infringed the two patents.

In his Sept. 30 ruling, U.S. District Judge Joseph F. Bataillon said that Activision’s right to hire counsel of its own choosing “is clearly impeded by the cease-and-desist order.” He also said that allowing the attorney general to interfere in the case might be “harmful to the patent process.”

Bruning would be free to return to court to seek a lifting of the court order if the evidence supports a finding that the suit was filed in bad faith, the judge said.

Bruning said in an Oct. 1 statement that nothing in the court order stops “our ongoing investigation into patent trolls and law firms that represent them, specifically Farney Daniels.”

Among the companies Activision sued over the two patents are Pernod Ricard SA’s Dunkin Donuts unit, Cinemark Holdings Inc., MGM Resorts International Inc., Cianbro Corp., Tedeschi Food Shops Inc., and Harley Davidson Inc., according to Bloomberg data.

The case is Activision TV Inc., v. Pinnacle Bancorp Inc., 8:13-cv-00215-JFB-TDT, U.S. District Court, District of Nebraska (Omaha).

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Warner Brothers Applies to Register New Quidditch Trademarks

Time Warner Inc.’s Warner Brothers unit, which already registered a number of trademarks relating to the sport of Quidditch popularized in the Harry Potter books and films, has filed a spate of new Quidditch-related applications.

The studio filed five applications Sept. 11 to register “Quidditch Through the Ages.”

According to the database of the U.S. Patent and Trademark Office, the studio will use the marks with books, films, television programs, computer games, clothing and toys.

The studio presently possesses registered U.S. trademarks for “Quidditch” for use with a range of products including bed linens, jewelry, notebooks, decorative magnets and toys.

ExxonMobil Sues FX Networks Over Interlocking XX Trademark

ExxonMobil Corp. sued FX Networks LLC and its studio affiliates to block their use of a logo the oil company says infringes on its interlocking XX logo.

“ExxonMobil has invested many millions of dollars for more than four decades in advertising and promoting” the logo, David Beck, ExxonMobil’s attorney, said in the filing yesterday in Houston federal court.

FX Networks and its studio affiliates, Twentieth Century Fox Film Corp. and Twenty-First Century Fox Inc., started the FXX TV network last month with a logo featuring an interlocking XX design, according to the complaint.

The network refused to drop the interlocking Xs when the oil company requested the change, according to the complaint.

ExxonMobil’s filing includes several citations to Internet postings in which viewers question whether there is a relationship between FXX and the world’s largest publicly traded oil company because of the similarities between the logos.

ExxonMobil, based in Irving, Texas, is seeking a court order barring the network from using the design “and any other mark confusingly similar,” along with treble damages.

John Solberg, a spokesman for Los Angeles-based FX Networks, didn’t immediately reply to telephone or e-mail messages seeking comment on the suit.

The case is ExxonMobil Corp. v. FX Networks LLC, 4:13-cv-02906, U.S. District Court, Southern District of Texas (Houston).

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Magnum Photos to Set Up Paid On-Line Membership Program

Magnum Photos Ltd., the U.K. photo archive that last year did away with placing virtual watermarks on its images, is setting up a paid membership program that will allow its more than 800,000 members to download and use the images for non-commercial purposes, the British Journal of Photography reported.

Clement Saccomani, Magnum’s Paris-based editorial director, told the publication that trying to prevent people from downloading won’t stop them, but with the membership -- costing $20 to $40 per year -- the company hopes to transfer those who have been downloading images illegally into “a new community.”

Members will also receive discounts on books, and will be able to participate in portfolio reviews, the British Journal of Photography reported.

Massimo Moggi, who heads Magnum’s licensing and technology efforts in New York, told the journal that his company looked to the sports industry for inspiration for its membership scheme, which the company hopes to leverage the way pro soccer teams clubs work with their members.

South Africa’s Proposed IP Policy Said to Be ‘Incoherent’

The South African government’s draft policy on intellectual property issues was called “an incoherent stream of consciousness” by the intellectual property law department of Stellenbosch University, South Africa’s Business Day reported.

The policy statement was released for public comment by South Africa’s Department of Trade and Industry Sept. 4, according to Business Day.

Professor Owen Dean, who heads the university’s IP law department, told Business Day his unit found the policy displays an “alarming lack of understanding or knowledge” of existing intellectual property law.

Sidwell Medipe of the Department of Trade and Industry said public comments would be analyzed by his agency and any necessary changes in the policy would be made, according to Business Day.

Boston Court Enters Default Judgment Against Adult-Film Company

In an adult-film copyright case, a federal judge in Boston allowed a default judgment against the film company.

AF Holdings LLC sued Sandipan Chowdhury in November 2012, accusing him of using the BitTorrent file-sharing protocol to download the film “Sexual Obsession.”

Chowdhury responded by saying the law firm that filed the suit represented a “straw plaintiff” with no standing to pursue the case. Additionally, Chowdhury said that the IP address of the entity that distributed “Sexual Obsession” indicated that the law firm representing the film maker may actually have put the film out on the Internet for others to download.

He said in his pleadings that the firm “represents an entire in-house copyright trolling monopoly, not designed to promote works for distribution and sale, but to allege infringement and reap profits from the threat of litigation.”

Chowdhury asked the court to order the film company to post a $60,000 bond so that he could recover damages, attorney fees and litigation costs if he prevailed in the litigation.

On June 19 the court ordered the company to post the bond, which it failed to do. Chowdhury then requested that the court enter a default judgment, which was allowed by U.S. District Judge Joseph L. Tauro on Sept. 30.

The case is AF Holdings LLC v. Sandipan Chowdhury, 1:13-cv-12105-JLT, U.S. District Court, District of Massachusetts.

For more copyright news, click here.

Trade Secrets/Industrial Espionage

Kyoto Hostess Club Investigated as Potential Espionage Site

A hostess club in Kyoto’s Gion district is under investigation in an industrial espionage case, according to the Tokyo Reporter news website.

The club was patronized by executives and engineers from more than five technology companies, who discussed their company’s marketing strategy for China and technology advances, the website reported.

The club’s female manager is a Chinese national, who reportedly had familial connections to high-level members of the Chinese Communist Party, according to Tokyo Reporter.

The club manager has denied being a spy, saying that customers never talked about their work when they were at the club, the news website reported.

IP Moves

Norton Rose Fullbright Grabs David Ben-Meir for IP Group

Norton Rose Fullbright LLP hired David Ben-Meir for its IP practice, the London-based firm said in a statement.

Ben-Meir, who joins from Atlanta’s Alston & Bird LLP, is a patent litigator. He has represented clients in the consumer electronics, communications and software industries. Before he was a lawyer, he was a research and development engineer for Litton Industries.

He has an undergraduate degree from Rensselaer Polytechnic Institute, a master’s degree from California State University Northridge, and a law degree from Loyola Law School of Los Angeles.

Baker Botts Hires Weil Gotschal & Manges’ Nicholas Barzoukas

Baker Botts LLP hired Nicholas Barzoukas for its IP practice group, the Houston-based firm said in a statement.

Barzoukas has represented patent-holders in the pharmaceutical industry in Hatch-Waxman litigation related to the entry of generic drugs. His clients’ technologies have also included medical devices, biotechnology, electronics, chemistry, lasers and mechanical systems.

He joins Baker Botts from New York’s Weil Gotshal & Manges LLP, where he has practiced since 2006. Before that, he was with the now-defunct Washington firm Howrey LLP.

Barzoukas has an undergraduate degree and a master’s degree in business administration from Baylor University and a law degree from the University of Texas.

To contact the reporter on this story: Victoria Slind-Flor in Oakland, California, at vslindflor@bloomberg.net.

To contact the editor responsible for this story: Michael Hytha at mhytha@bloomberg.net.

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