Letter from Amerikat: Happy Bunny Day!

The AmeriKat has been enjoying the warmth of the sunbeams that have danced across her numerous files, spreadsheets and bundles this past week. The warmer weather brings out the summer clothes and English smiles, but also insects. Almost this time last year the AmeriKat was in the throws of a biblical scale warfare with swarms, floods, and drought inflicting her house. She had hoped that the spring and summer of 2010 was a blip in the calendar of insect infestations she would have to deal with, but alas, with the warmer weather the ants are back. She has now found the gap in her floorboards were the pesky insects have been arriving from, but like plugging a hole in a leaky boat, the water will always find somewhere else to spill in from. So instead of lounging out in the sun, dying eggs, eating chocolate and drinking lemonade on Easter Sunday, she is instead attacking any small six-legged body racing across her floor. (picture, left- the AmeriKat inspecting an alleged Easter bunny) Happy Easter from the AmeriKat!

Bratz Beats Barbie with $89 million jury-award

From pesky six-legged insects, to perky two-legged dolls. Last week a Californian federal jury issued their verdict in favor of Bratz (picture, right) in the now-famous copyright and trade secret battle between Barbie and Bratz (see previous reports here). Barbie's maker, Mattel, had alleged that the maker of the Bratz doll - MGA Entertainment- stole the idea for the Bratz doll by entering into a deal with the designer of the doll, Carter Bryant, who had previously worked for Mattel. Mattel subsequently filed a lawsuit for copyright infringement and trade secret violations, while MGA alleged unfair competition and also trade secret theft. This case was heard by first by Judge Larson who ruled in favor of Mattel, but that $100 million verdict was overturned on appeal. The Court of Appeals for the Ninth Circuit held that the federal court judge had erred in ruling that Mattel automatically owned the designer's sketch of the doll under the terms of the 'Employee Confidential and Inventions Agreement' between Mattel and the designer and remanded the case back to the federal court.

Bryant's employment agreement had assigned all rights, titles and interests in any such inventions, patents and copyrights to Mattel. The contract defined "inventions" as including, but not limited to, discoveries, improvements, processes, designs and know-how. The district court had held that this agreement assigned Bryant's ideas to Mattel despite 'ideas" not being included on the list or mentioned anywhere else. Mattel argued that the list of examples in the contract were illustrative not exclusive, but the Court held that "ideas" are "markedly different from the list of examples including discoveries, improvements and designs" (People ex rel Lungren v superior Court (1996)). (picture, left - no amount of law school could prepare Lawyer Barbie for the cruelty of a jury verdict) The Court of Appeals stated that the contract was arguable capable of either including or not including ideas, but that the trial court did not recognize this ambiguity and thus did not examine the extrinsic evidence before it on this issue.The Appeals Court concluded that the agreement could be interpreted to cover ideas, but that the text of the agreement did not compel that reading and thus remanded the issue back to the district court. They stated that:

"Designs, processes, computer programs and formulae are concrete, unlike ideas which are ephemeral and often reflect bursts of inspiration that exist only in the mind."

At the end of last year, Mattel and MGA applied for summary judgment on the issue of copyright infringement for the first and second generation Bratz dolls. Judge Carter granted summary judgment in MGA's favor in respect of the second generation Bratz dolls, but the remaining issues, including breach of copyright for the first generation of Bratz dolls and the breach of confidence/trade secret claims, remained for trial. The court was tasked with determining whether the Inventions Agreement entitled Mattel to Bryant's ideas for names like "Bratz" together with sketches that he created outside working hours. Also, ripe for ruling was MGA's trade secret claim against Mattel through a campaign of corporate espionage, whereby MGA alleged that Mattel's employees gained access to regulated private MGA toy showrooms by deceptive means.

On Thursday, a federal court jury in Santa Anna, California, found in favor of MGA and following the Court of Appeals opinion held that Mattel did not own the sketches or ideas for the Bratz dolls. The jury verdict also held in favor of MGA's counterclaim that Mattel had willfully misappropriated trade secrets and slammed Mattel with a $88.5 million damages price tag. A slight saving grace, albeit an insulting one, was that the federal jury also found that MGA had interfered with Bryant's contract with Mattel and issued Mattel a $10,000 award for the interference.

Although the battle may not be over with reports that Mattel will file a motion for a retrial within two weeks and will reserve the right to appeal, the case does remind everyone of the importance of carefully drafted employee contracts, as well as taking the business decision to litigate over seven or so years even if it costs your shareholders $400 million (see MSN money report here). However, if Mattel's intention was to quash the rival dollmaker, the litigation may have just done that. MGA's CEO, Isaac Larian is reported as saying that the Bratz brand "will never be the same level it was before."

The IPKat will keep you posted on any further developments in the case.

Tony Duquette seeing Spots with J.Crew sweater

Tony Duquette, Inc, the proprietor of the various IP rights associated from the late namesake artist and designer filed a trade mark infringement suit against clothing retailer and AmeriKat favorite, J.Crew in a New York federal court last week. For those not in the know, the late Tony Duquette was a Tony award-winning designer and artist who counted Elizabeth Arden and the Duke and Duchess of Windsor as clients. Tony Duquette allege that J.Crew has infringed the DUQUETTE name and trade mark by producing and selling a sweater with the style name the "J.Crew Duquette Factory Leopard Print". The complaint alleges that J.Crew knowingly and willfully used the DUQUETTE trade mark in connection with their leopard print sweater because of Duquette's alleged unique association with leopard prints, in particular with woven and printed textiles including carpets and tapestries. (picture, left - a fabric design by Duquette) The AmeriKat is seeing more and more product descriptions that use trade marked words become the subject of trade mark disputes. In the UK, one can always invoke the fun game of whether the product description is being used as a function (of many, many functions) of a trade mark. In the U.S., the case is arguably little more straightforward.

Albeit having not read the complaint, the AmeriKat's gut instinct is that there is not enough here to satisfy the test of trade mark infringement. i.e., namely where is the confusion and whether Duquette has enough reputation in his name associated with leopard print textiles to claim dilution? Further live trade mark registration for DUQUETTE the AmeriKat found on USPTO is for tapestries of textiles, carpets and rugs - not apparel (Reg No. 3863326). The AmeriKat perused J.Crew's website today and found one leopard print sweater which is called the "Wild spots cardigan" - a very un-J.Crew product name - so her guess is that J.Crew has already taken steps to change the name of the contentious product. The Amerikat predicts this lawsuit to die a quickish death, just like the animal print trend of last season.

Apple v Samsung v Apple v Samsung v Apple....

Last year the AmeriKat was constantly up-to-date reporting on the latest of the patent mobile phone wars. She has now officially lost track, except for the latest of the battles now between Samsung and Apple. Apple sued Samsung two weeks ago in California federal court for trade dress, design patent, trade mark and patent infringement against Samsung's Galaxy line of smartphones and tablets. Apple allege that Samsung's products are copies of the iPhone and iPad designs including the "icons with the rounded corners."

The incestuous ties of the smartphone and tablet manufacturers and retailers are felt in this case. In 2010 Samsung earned a reported $5.7 billion revenue from Apple by way of their purchase of Samsung semidconductors. Tim Cook, Apple's CEO, told the Wall Street Journal that Apple is

"Samsung's largest customer, and Samsung is a very valued component supplier to us, and I expect the strong relationship will continue. Separately from this, we felt the mobile communication division of Samsung had crossed the line, and after trying for some time to work the issue, we decided we needed to rely on the courts."

The litigator in the AmeriKat sensed a nice little bargaining chip for Apple in this suit, however not to be uncharacteristic in this type of litigation Samsung then "countersued" Apple last week, but not in the U.S. Samsung filed patent infringement lawsuits against Apple in Korea, Japan and Germany alleging violations of patents filed in each of those jurisdictions. The allegedly infringed patents involve "transmission optimization and reduction of power usage during data transmission, 3G technology for reducing data-transmission errors and a method of tethering a mobile phone to a PC to enable the PC to utilize the phone's wireless data connection." The speed in which these lawsuits were filed indicate that Samsung may have been preparing itself for this counter-attack for sometime.

This latest chapter in the mobile patent war saga again demonstrates that when it comes to litigation surrounding smartphone technology, the best defence that is repeatedly being employed by parties is that of pursuing offensive litigation strategies on a global level. Whether or not that will prompt the parties to settle sooner is not a certainty, but the more complicated and more jurisdictions in which a company has to battle, the more attractive it becomes to resolve the dispute before litigation costs rocket and stated commercial relationships are massively affected.

Tuesday Tiddlywinks

Another dreary day in Londontown, but the IPKat Team is here to wish you a very happy day filled with intellectual property goodness.

US Supreme Court to hear Stanford v Roche patent fight: Yesterday the US Supreme Court justices agreed to hear Stanford University's claim against Roche Holding AG in respect of patents for methods of testing the effectiveness of AIDS treatments by measuring the HIV concentration in blood plasma. Scientists at Stanford created the invention while under a contract to promise to assign the inventions to the university. However, one of the inventors, Professor Mark Holodniy, had also, prior to the invention, actually assigned his rights in future inventions to Cetus (now Roche). Stanford filed a patent application and demanded a royalty from Roche for their use of the patent. The case reached the US Court of Appeals for the Federal Circuit (the appeals court where all the appealed patent cases go to from the federal district courts) who held that Roche was not liable for patent infringement because they held ownership rights derived from Holodniy's assignment. In their appeal to the Supreme Court, Stanford are arguing that because they were beneficiaries of federal funding for the research, under Sections 200-212 of the Bahy-Dole Act their rights trump that of Roche. The university's question to the Supreme Court reads as follows:

Whether a federal contractor university's statutory right under the Bayh-Dole Act, 35 U.S.C. §§ 200-212, in inventions arising from federally funded research can be terminated unilaterally by an individual inventor through a separate agreement purporting to assign the inventor's rights to a third party.

The US Department of Justice (DoJ) filed an amicus curiae brief in support of Stanford's writ and argue that the Bahy-Dole Act does indeed trump the general proposition that ownership of a patent vests first with the inventor. This case will be a somewhat obscure but important case for university and federally funded research institutions. The lesson being, make sure your researchers and scientists have entered into strict assignment agreements with your institution. Thanks to Dr. Ward for alerting the AmeriKat to this story.

UK MP to "bang heads" of ISPs and music industry: The UK Minister for Culture, Communications and Creative Industries, Ed Vaizey, (picture, left)has called for a joint meetin between music industry and ISP representatives to progress the implementation of the Digital Economy Act (DEA). Readers will note that the crucial piece to this legislative nightmare is Ofcom's final "Initial Obligations Code", which is still missing. Ofcom received a further three month extension for the Code in September to allow for consultation about its costs provisions with the EU. Judicial review of the DEA applied for by BT and TalkTalk is expected any time. For more information see this report from MusicWeek. This IPKat has searched online to find any further information about the agenda for this meeting without joy. If anyone has any info on this, please let the IPKat know.

Apple sues Motorola: This Kat has just given up trying to follow who is suing who in the mobile patent wars (see previous posts here). As of Friday, Apple has again gotten into the mix by filing two complaints (here and here) in the the US District Court for the Western District of Wisconsin against Motorola for infringement of a number of patents of its android handsets. The patents, for the most part, are for touchscreen technology. Motorola, maybe anticipating the descending cloud of Apple, filed four separate complaints against Apple as well as applying to the court to invalidate over 20 iPhone patents for want of novelty. It hasn't been a good month for Motorola who was on the receiving end of another lawsuit from Microsoft earlier last month. For more information see this report in the Wall Street Journal and CNet.

Court of Appeal Judgment Alert! Mr Justice Kitchen, sitting in the Court of Appeal with Lord Justice Jacob and Longmore, dismissed the appeal in the case of Softlanding Systems Inc v KDP Software Limited and Unicom Systems Inc ([2010] EWCA Civ 1172) last week. The case was on appeal from Mr Justice Wilcox of the Technology and Construction Court for England and Wales (see previous 1709 blog post by IPKat Jeremy). This Kat has not had an opportunity to digest the judgment, but there will be a full IPKat report on the judgment soon!

Letter from AmeriKat I: Patents (Microsoft, HTC, Bilski)

Last weekend readers may have noticed a slightly auspicious absence of the AmeriKat. The AmeriKat prides her reputation on ensuring that she delivers reports on the latest and greatest of that week's US IP news irrespective of the external elements that may be inflicting her - through sickness and health, 60 hour working weeks, or exams. However, last weekend, the AmeriKat encountered a hurdle that even she could not leap over like the feline beast of prey that she is. Entering her cat-flap Saturday morning after her morning chai tea latte run, she experienced a dripping then pouring of water on her head through the ceiling and light fixtures thanks to a water fault in the flat above. (picture, top left - the AmeriKat soaking and not happy about it) Like all Kats, the AmeriKat did not take to well to this and so with her fur and paws soaked and the water and electricity off all weekend her weekly report sunk to the bottom of her flat-cum-aquarium.

Is Microsoft one bad day away from a Supreme Court petition in the i4i battle?

While the rain was literally and figuratively coming down on the AmeriKat's head, the storm clouds that have been nestled over Microsoft's i4i saga over the past three years may have finally burst. Last Tuesday, i4i announced that the USPTO confirmed the validity of all the claims in one of the patents subject to the dispute in the i4i v Microsoft litigation which saw i4i receive a $290 million jury award (see previous IPKat posts here). The large jury award was later upheld by the Circuit Court of Appeals and Microsoft's subsequent appeals to the US Court of Appeals for the Federal Circuit were not granted. Prior to the original jury verdict, Microsoft had requested that the USPTO re-examine i4i's patent related to the customization and processing of extensible markup language, or XML (No. 5,787,449) in the hope that the patent would be declared invalid.

Kevin Kutz, Microsoft's Director of Public Affairs stated

"We are disappointed, but there still remain important matters of patent law at stake, and we are considering our options to get them addressed, including a petition to the Supreme Court."

Microsoft's potential petition for a grant of certiorari would most likely be based on the scope of discretion that appeals courts should give to jury verdicts. Readers may recall, that Microsoft's first (of many) appeals in the Eastern District of Texas focused on the issue of damages and remittitur (where the jury award is unreasonable, a party can apply for a judge to lower the award) of damages. It is clear that the sting of the jury's high award of damages has been seemingly long-lasting for Microsoft.

i4i's Chairmain, Loudon Owen stated in a press release that the

" '449 patented invention infuses life into the use of Extensible Mark Up Language (XML) and dramatically enhances the ability to structure what was previously unstructured data. As the magnitude of data grows exponentially, this is a critical technological bridge to controlling and managing this sprawling octopus of data and converting it into useful information."

According to the AmeriKat's calculations Microsoft has apparently until 30 June 2010 to file their petition to appeal to the Supreme Court. Anyone want to place a bet that they do?

HTC: Quietly brilliant...(but not so quietly suing Apple!)

A few weeks ago the AmeriKat wrote about the latest in the patent mobile wars (see post here) and explained that the mobile patent litigation has become so complex she has had to draw a diagram.

Well this week, she has had to add another arrow to her diagram - this time from HTC to Apple. Last Wednesday, HTC announced that it filed a complaint with the US International Trade Commission (ITC) to prohibit the importation and sale of the iPhone, iPad and iPod in the U.S. The complaint involves 5 of HTC's patents which are allegedly infringed by the Apple products, but which have yet to be disclosed. Jason Mackenzie, VP of HTC North America stated:

"As the innovator of the original Windows Mobile PocketPC Phone Edition in 2002 and the first Android smartphone in 2008, HTC believes the industry should be driven by healthy competition and innovation that offer the consumers the best, most accessible mobile experiences possible. We are taking this action against Apple to protect our intellectual property, our industry partners, and most importantly our customers that use HTC phones."

Some may think "Gutsy!", others who have been following this saga will be saying "Unsurprising!". In March, Apple sued HTC for violating its patents. Two weeks ago, Microsoft and HTC announced a licensing deal of Microsoft's patents relating to the mobile technology to HTC. So, diagram at the ready...could it be, that Microsoft's patents which are subject to the licence agerement with HTC could also be subject of the HTC complaint against Apple? Is this a roundabout way for Microsoft to go after Apple? Speculation across the Internet abounds, but no concrete information has yet to be placed in the AmeriKat's paws.

The AmeriKat has not been able to find any further details of the ITC complaint as of yet, but will keep readers posted. For further information see this report in PC World.

UPDATE: Courtesy of IPKat friend Pamela Chestek please see a copy of the HTC ITC complaint here .

Re Bilski, Bilski! wherefore art thou Bilski?

Not at thy Supreme Court decision table yet, so it seems. The IPKat and AmeriKat's good friend, Technollama, likens waiting for the Bilski decision to Waiting for Godot and the AmeriKat cannot agree more! The AmeriKat is anticipating the much-anticipated Supreme Court decision in Bilski any day now so keep your eyes and ears tune in to IPKat.

Microsoft and HTC make love, not mobile war

The mobile phone wars have reached such a level of complication that the IPKat has resorted to drawing diagrams to show who is suing who. The schematic interestingly sees Apple and HTC at the heart of the recent battles (see previous posts here). However, recent news sees Microsoft getting into the mix. But Microsoft is seemingly making love not war after entering into a licensing agreement with HTC, the Taiwanese handset maker of Google's Android operating system. The licence apparently acknowledges Microsoft's broad "patent portfolio" claims over the technology associated with the Android mobile platform. HTC manufactures phones for Google, including the Nexus One, that use the Android technology and is currently embroiled in patent litigation brought by Apple in March. Some commentators have suggested that Apple's litigation against HTC was really directed towards Google.

The details of the licence, announced Tuesday, have not been disclosed save for this statement from Microsoft's vice president and head of IP and Licensing, Horacio Gutierrez who stated that:

“HTC and Microsoft have a long history of technical and commercial collaboration, and today’s agreement is an example of how industry leaders can reach commercial arrangements that address intellectual property. We are pleased to continue our collaboration with HTC.”

The long historical relationship referred to is that of HTC being one of the main producers of smartphones that run the Windows operating system.

If you, like the IPKat, are confused as to who owns what in these phones you are not alone. Gutierrez (left) writing in his blog last March stated that with all innovation, especially for inventions in nascent technology markets, there is a period of time where rights holders grapple and litigate in order to sort out who owns what. He said:

"The smartphone market is still in a nascent state; much innovation still lies ahead in this field. In all nascent technology markets, there is a period early where IP rights will be sorted out. This is particularly true in a market, such as smartphones, in which a number of different technologies previously offered on a standalone basis now converge into a single device. Indeed, smartphones are a product of the ‘open innovation’ paradigm – device manufacturers do not do all of their development in-house, but add their own innovations to those of others to create a product that users want. Open innovation is only possible through the licensing of third party IP rights, which ensures that those who develop the building blocks that make a new technology possible are properly compensated for their investments in research and development."

How will Microsoft and HTC's licensing agreement impact Apple's court and ITC complaints that claim HTC infringes 20 of Apple's patents in their Android phones? The blog-o-sphere is lighting up with conspiracy theories as to what has motivated the license deal. Some say that Microsoft believed that the Android technology infringed their patents, while others say that Microsoft is coming to the rescue of the patent-poor HTC in their battle against the Apple empire. This Kat believes the truth may lie somewhere in the middle of these two extremes.

Although the Android operating system is proving to be very popular in the market right now, if the IPKat was a mobile phone manufacturer she would not be raising her head above the parapet until the mess of IP ownership over this technology is untangled.

Today, HTC has introduced a new handset named the Incredible, based on Google's Android operating system.

For more information see these articles in the Financial Times, Seattle Post Intelligencer, Wall Street Journal and CNET.

Letter from AmeriKat - Apple and the mobile wars

A typical week for the AmeriKat usually includes several trademark occurrences, such as absentmindedly reading the Evening Standard, getting newspaper ink on one's paws, then wiping the ink all over one's face and nose leather. Or, sitting across from someone on the Tube who she is sure she knows from somewhere and so therefore spends the entire journey scowling at them trying to place them (only frightening them instead) (left -the AmeriKat in the Tube). Or, having good intentions to use the lovingly bought Waitrose food in the fridge to prepare healthy dinners, only to grow so tired at the end of the day that she resorts to lapping up a bowl of cereal instead. These hallmarks of the AmeriKat's week have become such a mainstay that they actually provide her some comfort in an otherwise unpredictable world.

Apple takes a bite out of key Google partner

A mainstay of patent litigation over the past few weeks has been the frequent occurrence of litigation over mobile technology which some are dubbing the "Mobile Wars". The AmeriKat previously reported about the ping-pong Nokia v Apple patent litigation (here and here). Last week saw Apple filing a patent infringement law suit and US International Trade Commission (ITC) complaint against HTC, a key Google Inc. partner in the mobile technology market. HTC, a Taiwan-based company, manufactures several Google smart phones including the Nexus One. Phones like Nexus One use Android technology.

The federal lawsuit filed in Delaware last Tuesday alleges that HTC has infringed 20 patents used in Apple's iPhone. Many of the patents are related to the iPhone's touch-screen technology, including a method for unlocking a handset on a touch screen with a finger swipe. Apple's ITC filing complained about 10 patents which in particular emphasized android phones as violating their patents. In a statement, Apple's Chief Executive Steve Jobs stated that

"We can sit by and watch competitors steal our patented inventions, or we can do something about it. We've decided to do something about it. We think competition is healthy, but competitors should create their own original technology, not steal ours."

HTC spokesperson, Keith Novak, stated that the company "values patent rights and their enforcement but is also committed to defending its own technology innovations." Google, which is not party to this litigation, proactively put forward a press statement declaring that they supported their "Android operating system and the partners who have helped us to develop it." Google's statement is indicative of what many commentators are considering Apple's litigation to really be about. According to TechCrunch's MG Seigler

"[W]e're all well aware [that] this suit is much more about Google's Android operating system than HTC. And it seems that Google is well aware of that too."

The Wall Street Journal states that Apple declined to comment on whether the suit was targeted at Google. However, the two Silicon Valley Goliaths have been vying over who will inevitably control how users access the internet from hand-held devices. Previously, Google and Apple collaborated on map, search and mail functions prior to iPhone's July 2007 release. YouTube, a Google subsidiary, also made its YouTube video service compatible with Apple's technology. It now appears that the former collegiality between these two companies is waning.

The new Google android phone manufactured by HTC was due to launch in a few weeks, which makes Apple's lawsuit aptly timed to cause HTC the most damage. Bloomberg reports that HTC dropped 2 percent to close at NT$323.5 on the Taiwan Stock Exchange after Apple filed their complaints. This represented the biggest decline since February 8.

It seems to the AmeriKat that in suing HTC, Apple has sent a clear signal to all mobile phone manufacturers that the iPhone's patent empire is expansive and they better ensure that their iPhone 'mimics' are not infringing, or they will be next...

For an fun article discussing what a Google phone would look like if Apple got their way, see this article from Wired. For further information see these articles from CNN, Wall Street Journal, PC World, and The Times.