‘Glee,’ Qualcomm, Lilly, StubHub: Intellectual Property

July 25 (Bloomberg) -- What does the television show “Glee” have in common with the musician Prince? A judge in London said that the Twenty-First Century Fox Inc. program, despite a ruling requiring a different title in the U.K., should be allowed to tell viewers that it was “formerly known as Glee.”

Comic Enterprises, which owns a chain of comedy clubs using the Glee name in the U.K., rejected the suggestion from Judge Roger Wyand at a hearing yesterday. The company won an injunction last week in a trademark case that required Fox to change the name of the program in the country.

“The whole logic of the injunction falls away if they’re allowed to use it in the title,” Douglas Campbell, a lawyer for Comic Enterprises, said at the hearing.

Wyand suggested that the program could be marketed as “McKinley High, Formerly Known as Glee,” to comply with the ruling, which is on hold pending an appeal by Fox.

“My intention here was to make it easier for the defendant to communicate to their fans this is what the program was formally known as,” Wyand said yesterday.

The singer-songwriter Prince, after a dispute with his record label in the 1990s, changed his name to a symbol and was often referred to as “the artist formerly known as Prince.” In May 2000, he began using the name Prince again.


NCAA’s $60 Million Video-Game Settlement Moves Ahead in Court

The National Collegiate Athletic Association and Electronic Arts Inc. won a judge’s preliminary approval of $60 million in settlements of athletes’ claims that their images were used in video games without permission.

The decision may mean that the judge will soon rule on whether the NCAA must change its rules to let students negotiate licenses for the use of their names and images in connection with $800 million in annual broadcast revenue from college games.

U.S. District Judge Claudia Wilken in Oakland, California, said yesterday that she would provisionally approve a $40 million settlement with Redwood City, California-based Electronic Arts and a $20 million settlement with the Indianapolis-based NCAA, the main governing body for U.S. college sports.

It’s the first time the association has agreed to a settlement that pays college athletes for acts related to their participation in school sports, lawyers for the players said at the time the NCAA accord was announced.

The NCAA is facing challenges in court and before the National Labor Relations Board from current and former college athletes seeking compensation, better medical benefits, control over their images and labor protections in a system that considers them amateurs.

The cases are O’Bannon v. NCAA, 09-03329, and Keller v. NCAA, 09-01967, U.S. District Court, Northern District of California (Oakland).

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Qualcomm’s Struggle to Collect Royalties in China Hurts Profit

Qualcomm Inc. shares fell as much as 7 percent after the chipmaker said it’s struggling to collect license revenue from handset makers in China, the world’s largest mobile-phone market, threatening profit growth.

Qualcomm on July 22 gave a quarterly earnings forecast that fell short of analysts’ average estimate. The company cited missed royalty payments for chips running on the new long-term evolution standard as manufacturers fail to report phone sales or refuse to sign contracts. Licensing is Qualcomm’s most profitable business.

The disclosure signals an escalation of Qualcomm’s challenges in China, a market the company has been touting as a main driver of future earnings growth.

Even as San Diego-based Qualcomm sells more chips in China, Chief Executive Officer Steve Mollenkopf must work to end the royalty disputes with phone makers and resolve a government investigation into its business to get licensing back on track in the world’s most populous country.

Qualcomm President Derek Aberle said in a phone interview that the company is in a dispute with a large customer over license revenue, and other customers are under-reporting the number of phones sold on which they should have paid license fees. Some other small companies in China haven’t yet agreed to pay, he said. He didn’t name any of the customers.

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Lilly Profit Beats Estimates Even With Patents Expiring

Eli Lilly & Co., the drugmaker experiencing a wave of sales losses as its patents expire, reported second-quarter profit that beat analysts’ estimates with better-than-expected sales of its diabetes drug Humalog.

Net income fell 39 percent to $734 million, or 68 cents a share, from $1.21 billion, or $1.11 a year earlier, the Indianapolis-based company said yesterday in a statement. Earnings beat by 3 cents the average of 15 analysts’ estimates compiled by Bloomberg. Revenue declined 17 percent to $4.9 billion.

The company has said 2014 will be its worst in a wave of sales losses as patents expire on its top drugs. In December, it lost exclusive marketing rights for Cymbalta, an antidepressant which sold $5.08 billion last year and is projected to sell $1.51 billion this year. Lilly’s osteoporosis drug Evista lost patent protection in March.

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StubHub Scam Leads to Arrests in U.S., London, Canada, Spain

StubHub, EBay Inc.’s online ticket exchange, was targeted by hackers who used stolen passwords and credit card numbers to buy and sell thousands of tickets for pop-music concerts and Yankees games, New York authorities said.

Six men were indicted July 23, including two Americans arrested in New York and New Jersey, a third American who is wanted, two Russians whose whereabouts are unknown and a third Russian awaiting extradition from Spain, where he was detained in front of a Barcelona hotel while on vacation, Manhattan District Attorney Cyrus Vance Jr. said at a press conference.

The scheme, including at least another four accused money launderers who were arrested separately in London and Toronto, shows that criminals’ “sophistication and speed” requires international cooperation, Vance said. “Cybercriminals know no boundaries -- they do not respect international borders or laws.”

The arrests follow last week’s report from New York Attorney General Eric Schneiderman that security breaches exposing customers’ personal information are growing and cost state businesses $1.37 billion last year. StubHub, based in San Francisco, was defrauded of more than $1 million, with the money laundered through U.K. banks, according to Vance.

The investigation was carried out in cooperation with the New York Police Department, City of London police and the Royal Canadian Mounted Police, Vance said.

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Trade Secrets

Manhattan’s Vance Cracks Down on IP Theft: Interview

Former federal prosecutor Frederick Tecce, of Panitch Schwarze Belisario & Nadel LLP, and Bloomberg News reporter Chris Dolmetsch, discuss a crackdown by the Manhattan District Attorney’s Office on intellectual property theft from financial firms.

To listen to the interview, click here.

To contact the reporter on this story: Ellen Rosen in New York at erosen14@bloomberg.net

To contact the editors responsible for this story: Michael Hytha at mhytha@bloomberg.net Andrew Dunn, Joe Schneider

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