Monday, December 31, 2012

(BN) Apple, Samsung, Asahi Kasei, Stallone: Intellectual Property

(Bloomberg) Apple Inc. agreed to drop Samsung Electronics Co. (005930)'s Galaxy S III Mini from a patent-infringement lawsuit against the South Korea-based company, according to court records.

Apple said it agreed to withdraw the smartphone from its case because Samsung assured the court the phone won't be sold in the U.S., according to a Dec. 28 filing in federal court in San Jose, California. The filing, which follows an August verdict in the same court in Apple's favor on other infringement claims, comes in a second patent case between the two companies, scheduled for trial in 2014.

Apple will withdraw the Galaxy S III Mini "given Samsung's representation that it is not making, using, selling, offering to sell or importing that product into the U.S.," according to the filing. Apple claims that the smartphone is available for sale through (AMZN), and said it will agree to drop its claims against the Galaxy S III Mini only if Samsung's assurances remain true.

In the earlier case, a jury on Aug. 24 decided after a trial that Samsung should pay $1.05 billion for infringing six Apple patents. Apple awaits a decision from U.S. District Judge Lucy Koh on its request for additional damages against Samsung for infringement after the iPhone maker lost its bid to block U.S. sales on 26 of the Galaxy maker's devices. Apple failed to establish that consumer demand for Samsung products was driven by technology it stole, Koh ruled.

Samsung and Apple, the world's two biggest smartphone makers, have each scored victories in patent disputes fought over four continents since Cupertino, California-based Apple accused Asia's biggest electronics maker of "slavishly copying" its devices.

Samsung, facing an antitrust probe by European regulators, has said it will halt efforts to block sales of Apple products in Europe.

Newer smartphones made by both companies, including Samsung's Galaxy S III and Apple's iPhone 5, have been added to the case set for trial in 2014.

Adam Yates, a spokesman for Suwon, South Korea-based Samsung, declined to comment.

The case is Apple v. Samsung Electronics Co. Ltd., 12- cv-00630, U.S. District Court, Northern District of California (San Jose). The earlier case is v. Samsung Electronics Co. Ltd., 11-cv-01846, U.S. District Court, Northern District of California (San Jose).

Asahi Kasei Zoll Unit Sues Philips' Respironics Over Patent

Asahi Kasei Corp. (3407)'s Zoll unit sued Royal Philips Electronics (PHIA)' Respironics Inc., alleging infringement of a U.S. patent with equipment used to monitor patients being treated for sleep-disordered breathing.

Zoll, based in Chelmsford, Massachusetts, contends Respironics is wrongly using protected technology for data collection, covered by a 2004 patent, in its Philips EncoreAnywhere respirator, according to a complaint filed Dec. 27 in federal court in Wilmington, Delaware. In dispute is patent 6,681,003.

"Respironics does not have a license or permission to use the patent," and "Zoll will continue to suffer additional irreparable injury" if a judge doesn't stop the infringement, plaintiffs lawyers said in court papers.

The patent covers a system of data-collection and management for medical devices worn by patients, with electronic readings transmitted over the Internet to a doctor's office or other location.

A spokeswoman for Murrysville, Pennsylvania-based Respironics, Maryellen Bizzack, didn't immediately return voice and e-mailed messages seeking comment on the lawsuit.

The case is Zoll Medical Corp. v. Respironics Inc., 1:12- cv-01778-UNA, U.S. District Court, District of Delaware (Wilmington).

For more patent news, click here.


Topson Downs Gets Approval to Register 'Tinseltown' Trademark

Topson Downs of California Inc., a manufacturer of women's clothing, has won its battle to register "Tinseltown" as a U.S. Trademark.

The Culver City, California-based company filed an application with the U.s. Patent and Trademark Office in June 2012 to register the term for use with sportswear. The examiner rejected the application, saying it was a term indicating geographic origin.

Topson Downs is a private-label supplier to Macy's Inc. (M), Wal-Mart Stores Inc. (WMT), Target Corp. (TGT), Urban Outfitters Inc. (URBN) and Nordstrom Inc. (JWN), according to the company website.

The company appealed, and a patent office appeal board said that while "Tinseltown" is commonly understood to indicate the Hollywood section of Los Angeles, it has acquired additional meaning.

"The record clearly supports a finding that Hollywood denotes a section of Los Angeles once exclusively located in Hollywood and now located in various parts of Los Angeles, as well as the iconic styles associated therewith and its often desperate imitators," the board said in its ruling.

"Tinseltown" also denoted "the movie industry, its stars and the fashion and style trends they have made famous," according to the ruling.

The board said that the examiner, in making the initial rejection, had failed to establish the primary significance of "Tinseltown" as a geographic location.

Other applicants have successfully registered the term for other uses in the past. A Florida-based fragrance company registered "Tinseltown" in May for use with perfumes and cosmetics. In September, a U.K.-based restaurant company registered the term to use for restaurant services.

Cinemark USA Inc. registered "Tinseltown" in 1996 for use with movie theaters. An applicant from Ontario, California, registered the mark in January to use for online social- networking services.

Department of Defense Registers 'NORAD Tracks Santa' Trademark

The U.S. Department of Defense, whose North American Aerospace Defense Command every year provides "tracking" information on the whereabouts of Santa Claus, has registered "NORAD Tracks Santa" as a trademark, the Denver Post reported.

According to the Department of Defense Licensing Office, the trademark was sought to prevent its unauthorized use by others rather than as a money-maker, the newspaper reported.

The department does sell merchandise bearing the mark, with the biggest sellers a customized letter from Santa and a t-shirt that says "I tracked Santa 2012," according to the Post.

NORAD has been tracking Santa since 1955 and signed a licensing agreement in November with U.S. Allegiance Inc. of Bend, Oregon, which has produced other licensed products for the military in the past, the Post reported.

Apple Applies to Register Leaf Silhouette Trademark in EU

Apple Inc. (AAPL), maker of the iPhone and iPad, applied to register a leaf silhouette as a trademark.

According to application data published in the database of the European Union's trademark registration office, the leaf is a simple oval with two pointed ends, placed on a slant.

Cupertino, California-based Apple said in the application it plans to use the mark for a range of products far beyond electronic gear. Among the proposed uses are jewelry and clocks, desk accessories, bumper stickers, patterns for t-shirts and sweatshirts, and messages among computer users about concerts.

Apple submitted the application in March, and according to the database some of the initial processing of the application has been completed.

For more trademark news, click here.


Stallone's 'Expendables' Didn't Infringe Screen Play Copyright

Sylvester Stallone has defeated a copyright infringement claim brought by a Connecticut resident.

Marcus Webb of Stamford, Connecticut, sued Stallone in federal court in New York in October 2011, claiming that the actor/director's "Expendables" film infringed the copyrights for a screenplay he had written.

In June, U.S. District Judge Jed Rakoff ruled that Webb's claim couldn't go forward, and on Dec. 27 he filed an order outlining his reasons and entering a final judgment.

Webb said there were too many similarities between his "Cordoba Caper" screenplay and the film for copyright infringement not to have occurred. He said he had submitted the play to "various literary forums" through which it was widely available to the community of filmmakers.

In his ruling, Judge Rakoff said that Webb's screenplay was written after a script on which Stallone based some of the film was created, so it wasn't possible for Stallone to have copied. He also dismissed Webb's claims that there was substantial similarity between the two screenplays.

The judge also said that he had "carefully examined the entire litany of plaintiff's proffered 'striking similarities' and finds none of them remotely striking or legally sufficient." He ordered the case closed.

The case is Marcos Webb v. Sylvester Stallone, 1:11- cv-07517-JSR, U.S. District Court, Southern District of New York (Manhattan).


Thursday, December 20, 2012

(BN) Apple Appeals After Failing to Block Samsung Devices

Apple Inc. (AAPL), maker of the iPhone and iPad, appealed a judge's decision to turn down its request for a U.S. sales ban on 26 Samsung Electronics Co. devices after winning a patent-infringement lawsuit.

Apple is seeking a review of the ruling in a federal appeals court in Washington, according to a filing today in U.S. District Court in San Jose, California.

U.S. District Judge Lucy H. Koh said Dec. 17 that while a jury found that Suwon, South Korea-based Samsung infringed six Apple patents, the infringing elements were such a limited part of Samsung's device that a sales ban wasn't warranted. The jury awarded $1.05 billion to Cupertino, California-based Apple in August.

The case is Apple Inc. v. Samsung Electronics Co. (005930) Ltd., 11- cv-01846, U.S. District Court, Northern District of California (San Jose).

Thursday, December 06, 2012

Online tracking: social networking vs analytics

Hi-tech websites seem to use a lot more social networking tracking than business sites (figs below). For example, wired, VBeat, Cnet and other tech-oriented content services are more geared toward generating "buzz", while biz sites use good old spying techniques to sell ads.

Tracking on
(all four major social networks present)

 Tracking on
(no social tracking but extensive analytic  data collected)

tags: technology, media, control, detection, social, networking, business, model

(BN) BAT, Nike, Nestle, Chick-fil-A: Intellectual Property

British American Tobacco Plc (BATS)'s Zimbabwean unit denied allegations of "industrial espionage" and "illegal activity" after the country's president, Robert Mugabe, said that BAT had disrupted shipments by rivals.

Mugabe told a conference on empowerment of black Zimbabweans in Harare last week that his government had got information that the unit, British American Tobacco Holdings Zimbabwe Ltd. (BAT), had been working with groups in South Africa against Savanna Tobacco Co., a Zimbabwean tobacco company owned by a businessmen, Adam Molai. He said the information, which included the armed theft of tobacco from Savanna, "appears to be authentic."

BAT Zimbabwe "strongly denies any involvement in the industrial espionage and/or any illegal activity that may be linked to other local tobacco manufacturers," the Harare-based company said in an e-mailed response to questions yesterday.

Zimbabwe has passed a law to force foreign-owned companies to sell a 51 percent stake in their business to black Zimbabweans and is pushing for greater local participation in industries ranging from banks to mining.

State media carried reports that while trucks from competitors traveling to South Africa have been hijacked, BAT's vehicles have been spared.

"BAT Zimbabwe does not export any cigarettes," the company said. "Our operation does, however, export semi- processed tobacco leaf."

The company bases its competitive strategy on market research and hasn't resorted to "illegal tactics," it said.

"Those are the things that have been happening in order to kill competition and if you try to undo a competitor in that ugly way that's not acceptable," Mugabe said.

BAT, Zimbabwe's biggest cigarette maker, competes with closely-held companies like Savannah Tobacco (Pvt) Ltd and Cut Rag Tobacco (Pvt) Ltd. for domestic sales. Zimbabwe is Africa's biggest tobacco exporter.


Japan to Mandate Price Cuts for Off-Patent Brand-Name Drugs

Japan's Health Ministry has approved a rule cutting prices for off-patent name-brand drugs, thereby cutting health-care costs, Nikkei reported.

Generics make up only about 30 percent of the pharmaceutical market in Japan because the name brand drugs retain brand strength even after patent expiration, according to Nikkei.

The mandated price cuts would go into effect as early as April 2014.

Strategies pharmaceutical companies will employ to offset the lower prices include accelerated development of new products, or increasing the volume of sales of the off-patent brand-name drugs, according to Nikkei.

For more patent news, click here.


Nike Files Chinese Suit, Battling Adverse Liu Trademark Decision

Nike Inc. (NKE), the Oregon athletic-shoe company, filed suit in China, seeking to overcome government rejection of its application to register the name of Chinese track star Liu Xiang as a trademark, China Daily reported.

The application was rejected because the Chinese characters for Liu's name were registered 26 years ago by a Shanghai clothing company, according to the newspaper.

Beaverton, Oregon-based Nike has signed a contract with the athlete authorizing the use of his name and likeness and, while it's unable to register the characters for his name, does have several other Chinese trademarks related to Liu, China Daily reported.

The proprietor of the Shanghai-based clothing company that holds the mark said it may be possible to transfer the mark to Nike, depending on how much the shoe company is willing to pay, the newspaper reported.

Nespresso Sued in Paris by Ethical Coffee for 'Smear' Campaign

Nestle SA (NESN) was sued in Paris by capsule-coffee maker Ethical Coffee Co., which claimed the Swiss food company's Nespresso brand engaged in unfair competition practices to stymie its rival's growth.

Ethical Coffee filed a suit before the commercial tribunal Dec. 4 claiming a "systematic smear" effort by Nespresso to criticize its products and steer clients away from the competition, the Fribourg, Switzerland-based company said in a statement. Nespresso made such comments through its Nespresso Club, on the Internet and through machine distributors, Ethical Coffee said.

"It would have been fairer and far better if Nespresso had tried to beat the competition in terms of quality and price," Chief Executive Officer Jean-Paul Gaillard said in yesterday's statement. "However, where the consumer opted for our products, Nespresso clearly tries, even through unlawful means, to influence their decision."

Nespresso, one of Nestle's fastest-growing brands, faces increased competition as other food companies including D.E Master Blenders 1753 NV began offering coffee-filled capsules that work in its machines. Vevey, Switzerland-based Nestle has taken legal action against Ethical Coffee and other capsule makers in countries including France and Germany, as well as at home, arguing the rivals violate its patents.

"The allegations by ECC are without substance and we believe that the complaint has no merit," Nespresso General Counsel Daniel Weston said yesterday in an e-mail. "This is part of an on-going pattern and is not the first time that this company has made similar claims."

Ethical Coffee has asked the court to order Nespresso to cease such practices and is seeking unspecified "considerable compensation" for the financial harm it's suffered since entering the market, according to the statement.

Chick-fil-A Parody Site Not in Bad Faith, WIPO Panel Says

Chick-fil-A Inc., the Atlanta-based fast-food chain that had $4.1 billion in sales last year, filed a complaint in its battle against a parody website.

The company filed with the World Intellectual Property Organization's Arbitration and Mediation Center in August, objecting to the registration of the Internet domain name.

According to a Nov. 30 WIPO ruling, the disputed name was registered in 2011 by an opponent of the public stand Chick-Fil- A's owner has taken with respect to same-sex marriage. Dan Cathy, the chief executive officer of the Georgia chain, has expressed the view that homosexuality is both sinful and a chosen lifestyle, and he opposes same-sex marriage.

After Cathy's views became widely known last summer, gay, lesbian and transgender people and their allies called for a boycott of Chick-fil-A restaurants. In response, former Arkansas governor Mike Huckabee called for opponents of same-sex marriage to go out of their way to eat at Chick-fil-A restaurants.

The disputed website featured a photo of Huckabee, and a coupon purporting to offer a free Chick-fil-A sandwich to anyone who abandoned homosexuality. A notice that "this site is not affiliated with Chick-fil-A" appeared in very small type at the bottom of the page.

Other features of the disputed website were photos of the operator of a clinic that claimed to cure people of homosexuality, and former U.S. Senator Rick Santorum of Pennsylvania, a Republican candidate in the 2012 presidential race and an opponent of same-sex marriage.

The restaurant chain argued that its name was being used in bad faith on the parody website, and that the site didn't constitute the parody exemption to trademark infringement.

The WIPO panel said that while it was "questionable" about whether the disputes site qualified as parody, it was clear that the application wasn't filed in bad faith. For a bad faith claim to succeed, the site must have been created for commercial gain, and the panel said Chick-fil-A "failed to produce even a scintilla of evidence" that this why the site was created.

Because the panel couldn't find any proof of bad-faith registration, Chick-fil-A's complaint was denied.

The WIPO panel had a single member, M. Scott Donahey of Palo Alto, California.

The case is CFA Properties Inc., v. Domains By Proxy LLC, D2012-1618.

For more trademark news, click here.


EU Plans Work on Overhaul of Copyright Rules for Digital Age

European Union regulators plan to work on an overhaul of the bloc's copyright rules to "make them fit" for the digital age.

The European Commission decided yesterday to adapt the rules governing how copyrights are used and enforced across the 27-nation EU to meet challenges presented by the Internet. The regulator seeks to complete work by 2014.

The goal is to "work for a modern copyright framework that guarantees effective recognition and remuneration of rights holders in order to provide sustainable incentives for creativity" and combating piracy, the Brussels-based commission said in a statement.

EU lawmakers in July rejected a global anti-piracy treaty, known as ACTA, that would have established global rules for cracking down on piracy, including illegal file-sharing. Key goals in the new initiative are to improve enforcement of copyright rules across the EU and harmonize the fragmented way copyrights apply across the bloc's 27 nations.

The commission next year will have discussions with industry officials to tackle six "concrete problems." This includes how to solve the effect of copyright territoriality when consumers who have legally downloaded content such as music or e-books in one EU nation, can't access it in another EU country.


Wednesday, December 05, 2012

(BN) Disney’s Netflix Deal Gives Top Billing to Online Movies

Netflix Inc. (NFLX)'s deal with Walt Disney Co. (DIS) to stream new releases, including those from Pixar and Marvel, signals online viewing has become mainstream and poses a major threat to traditional pay TV.

Starting in 2016, Netflix gains exclusive U.S. TV rights to movies from Disney, the world's largest entertainment company, according to a statement yesterday. That gives Los Gatos, California-based video service new films in a time frame historically reserved for premium channels like Liberty Media Corp. (LMCA)'s Starz, as soon as seven months after theaters.

The accord underscores the shift away from a decades-old model in which studios prospered by offering blockbuster films to home viewers on DVD and on premium cable channels such as Starz, Disney's current pay-TV partner. Subscription and on- demand services such as Netflix are becoming an important source of revenue for studios coping with shrinking DVD sales.

"This is a big win for Netflix," Jaison Blair, an analyst with Telsey Advisory Group in New York, said in a telephone interview.

Financial terms weren't disclosed. Tony Wible, an analyst at Janney Montgomery Scott LLC who follows both companies, projects Netflix will pay Burbank, California-based Disney more than $350 million a year. Barton Crockett, an analyst with Lazard Capital Markets, estimated Disney gets about $200 million a year now.

Netflix gets immediate access to classic titles like "Alice in Wonderland" and "Dumbo." Next year, the service adds direct-to-video titles, while new films start in 2016. According to, Disney plans to release Marvel's "Dr. Strange" and Pixar's "Finding Nemo 2" that year. The studio hasn't announced any 2016 pictures.

Exclusive Programs

The deal is a coup for Netflix Chief Executive Officer Reed Hastings, who faces emerging competition in online video and pressure to sell the company from billionaire Carl Icahn. He said last month he expects Icahn, who controls almost 10 percent of the company through stock and options, to start a proxy battle.

Hastings has been pushing to make Netflix available around the world, arguing people will pay for near-instant access to content online instead of scheduled TV on premium outlets such as Time Warner Inc. (TWX)'s HBO or CBS Corp. (CBS)'s Showtime.

The agreement highlights efforts by Ted Sarandos, the chief content officer at Netflix, to obtain exclusive rights to films in the same pay-TV time frame as HBO, Showtime and Starz, or about seven months to a year after theaters.

Sony Rights

Netflix beat out several competitors for Disney pictures, Sarandos said, without identifying them. The company will bid aggressively for exclusive rights to Sony Corp. (6758) films when that studio's contract with Starz ends around 2016, he said.

"They negotiate a long way out and we'll be at the table for each of them," Sarandos said.

Paula Askanas, a Sony spokeswoman, said the company had no comment on Sarandos's remarks.

Netflix surged 14 percent to $86.65 yesterday in New York, its biggest gain since Jan. 26, and bringing the year-to- date advance to 25 percent. John Malone's Liberty Media slid 4.9 percent, the most since May 17, to $105.56. Disney, the world's biggest entertainment company, was little changed at $49.30.

Courtnee Ulrich, spokeswoman for Englewood, Colorado-based Liberty Media, didn't return a phone call seeking comment.

The deal doesn't include films from "Star Wars" creator Lucasfilm, which Disney is buying for $4.05 billion and doesn't yet own, according to Jonathan Friedland, a Netflix spokesman. He declined to say whether they would be added later.

Deeper Library

With Disney, Netflix will be able to stream current or catalog films from at least five studios. Viacom Inc. (VIAB)'s Paramount Pictures, home of the "Star Trek" series, Lions Gate Entertainment Corp. (LGF), owner of the "Hunger Games" films, and Metro-Goldwyn-Mayer Inc. (MGMB) sell to Netflix through the studios' jointly owned cable channel, Epix.

The Netflix agreement makes Disney the first major studio to bypass a traditional cable-TV outlet with its movies. Disney joins the much smaller DreamWorks Animation SKG Inc. (DWA), maker of the "Shrek" movies, as one of two studios providing their films exclusively to Netflix instead of a premium channel.

With pictures geared to children and families, Netflix can build a base of subscribers less likely to cancel for competing offerings, said Scott Devitt, an analyst with Morgan Stanley (MS) who has a buy rating on the shares.

"The company is focusing on building a highly differentiated content catalog aimed at kids, which is a demographic that has relatively homogeneous tastes," Devitt wrote in a research note.

With 30 million users worldwide, Netflix is extending its lead over competing video services by Inc. (AMZN) and Redbox Instant, from Verizon Communications Inc. (VZ) and Coinstar Inc. (CSTR), which begins public testing this month.

Domestic Customers

Netflix is also adding exclusive programs such as "Lilyhammer" and "House of Cards" as it seeks earlier and fuller home-video access to studio movies for its customers.

The company has about 25.1 million U.S. subscribers, compared with 20.7 million for Starz as of October.

Disney embraced online media sooner than its competitors, becoming the first major studio to sell and rent TV shows and movies through Apple Inc. (AAPL)'s iTunes. The company's largest shareholder is the trust of late Apple co-founder Steve Jobs.

One risk for Disney is that viewers will cancel their traditional pay-TV service, costing the company subscription revenue it gets for networks such as ESPN and the Disney Channel, according to Michael Morris, an analyst with Davenport & Co. in Richmond, Virginia.

"Disney has been clear they are platform agnostic," said Morris, who recommends the stock.

Content Costs

While Netflix bolsters its film lineup, the announcement doesn't settle a tug-of-war among investors over the company's prospects, said Arvind Bhatia, a Sterne, Agee & Leach analyst who has a neutral rating on the shares.

With about $4.5 billion in streaming content obligations due before the Disney films are available, and losses from international expansion, Netflix must increase subscribers or raise its $7.99-a-month price for unlimited viewing to remain viable long-term, Bhatia said.

"It's a big get, but clearly there are several unknowns out there to determine if it's a good get," Bhatia said. "Though we don't know the financial terms, it's clear this was not a cheap deal."

(BN) Location-Tracking Apps Would Need Permission in U.S. Bill

Smartphones, mobile applications and in-car navigation devices would be required to get permission from consumers before collecting and sharing location data under a bill to be considered by a Senate committee this week.

Senator Al Franken, a Minnesota Democrat who introduced the measure last year, released a revised version today that would let companies get one-time approval from users rather than seeking permission every time location data is collected or shared. The Senate Judiciary Committee is scheduled to consider the measure on Thursday.

Franken, the chairman of a Senate Judiciary subcommittee on privacy, technology and the law, is one of several lawmakers who have focused on how technology companies collect information on the location of users and share that data with third parties including advertisers and data brokers.

Franken held a hearing on mobile privacy last year with executives from Apple Inc. (AAPL) and Google Inc. (GOOG), following a report that the operating system of Apple's iPhones and iPads logged users' coordinates along with the time a location is visited. Apple later issued a software update to limit how much location information was being logged or let users turn off the feature.

The revisions by Franken contain additional language specifying that restrictions don't apply to law enforcement. The measure is co-sponsored by Democratic Senators Richard Blumenthal of Connecticut, Chris Coons of Delaware, Richard Durbin of Illinois, Robert Menendez of New Jersey and Dianne Feinstein of California, and independent Senator Bernie Sanders of Vermont.

The Senate Judiciary Committee last week approved a bill that requires authorities to get a search warrant to obtain older e-mails, updating a 1986 privacy law that in some cases lets police get access to e-mails that are more than 180 days old without a judge's permission.

The Franken bill is S. 1223.

Monday, December 03, 2012

(BN) Google Buys Shipping Service BufferBox to Buoy E-Commerce

Google Inc. (GOOG), owner of the world's most popular search engine, has acquired BufferBox Inc., a service for delivering e-commerce goods to physical kiosks.

Terms of the deal weren't disclosed. BufferBox, founded in Waterloo, Ontario, enables online shoppers to pick up parcels at grocery and convenience stores at any time in the Toronto area, according to its website.

"We want to remove as much friction as possible from the shopping experience, while helping consumers save time and money, and we think the BufferBox team has a lot of great ideas around how to do that," Mountain View, California-based Google said in an e-mailed statement without elaborating further.

Google is stepping up efforts in e-commerce after announcing earlier this year it would transition its product- search feature to a paid commercial model in the U.S., requiring retailers to purchase space on its new Google Shopping service. Earlier this month it unveiled new features for the service, including enhanced images of some toys and a new way to compile shopping lists.

Google rose less than 1 percent to $698.37 at the close in New York. The shares have gained 8.1 percent this year.

For BufferBox, it will be "business as usual" for its existing customers, the company said in a blog.

The sale comes after Aditya Bali, co-founder of BufferBox, said in August he was in talks to raise money from top-tier venture capital firms. While the company didn't really need the money, the funding could help it "go that much faster," he said at the time.

"As online shopping becomes a bigger part of how you buy products, we look forward to playing a part in bringing that experience to the next level," the company said in the blog.


(BN) Facebook Changing Zynga Terms in Social Games Competition

Facebook Inc. (FB) and Zynga Inc. (ZNGA) loosened terms of their longstanding alliance, making it easier for competing game developers to vie for users on the world's largest social-networking service.

The new terms eased log-in, payment and advertising requirements for Zynga, which makes most of its money by selling virtual goods in games played on Facebook.

While the agreement gives Zynga greater latitude to pursue growth on other sites, including its own, it also removes the special status that the social-gaming leader has enjoyed since 2010, when Facebook Chief Executive Officer Mark Zuckerberg and his Zynga counterpart, Mark Pincus, forged the five-year pact. Now, other game developers will have equal footing as they try to lure users of the social site, said Will Harbin, chief executive officer of game maker Kixeye Inc.

"Facebook is moving toward treating all developers as equal," Harbin said. "They are doing their absolute best to be a fair and open platform. They don't want to muddy the waters; they don't want to play favorites."

Zynga shares plunged 6.1 percent to $2.46 at the close in New York. Facebook shares rose 2.5 percent to $28.

Under the new contract terms, Zynga users will no longer have to use Facebook as the login for the gaming portal. Zynga can also elect not to use Facebook Payments as the way for users to make purchases on its site, and it can opt not to display ads served by Facebook. While the social network can now develop its own games, Facebook said that's not planned.

Zuckerberg's Meeting

As Facebook distances itself from Zynga, the social network has fostered closer ties with rival game makers. Zuckerberg and Sean Ryan, Facebook's director of game partnerships, held a dinner meeting in recent weeks with executives from top makers of social games to discuss ways for them to increase usage and sales on the social network, according to people with direct knowledge of the matter. No representatives of Zynga were present, the people said.

"The relationship between Facebook and Zynga has seemingly worsened," said Arvind Bhatia, an analyst at Sterne Agee & Leach Inc. "Whether or not they decide to be in the gaming business, they certainly have the option to do that if they so choose."

San Francisco-based Zynga is struggling with slowing growth as users spend more time on mobile devices. Shares have declined 75 percent since its December 2011 initial public offering. More than a half-dozen senior executives have left Zynga in recent months amid growing concern among investors about the company's ability to accelerate growth.

Zynga Flexibility

Zynga said the new deal with Facebook will create more opportunities to market its games more widely.

"Our amended agreement with Facebook continues our long and successful partnership while also allowing us the flexibility to ensure the universal availability of our products and services," Barry Cottle, Zynga's chief revenue officer, said in a statement.

Facebook said the revisions give other developers more scope to write applications for Facebook's 1 billion users.

"We have streamlined our terms with Zynga so that's use of Facebook Platform is governed by the same policies as the rest of the ecosystem," Facebook said in a statement. "We will continue to work with Zynga, just as we do with developers of all sizes, to build great experiences for people playing social games through Facebook."


(BN) Text Message’s 20th Anniversary Sees Users Turning to Facebook

Text messages turn 20 today and their use may rise 40 percent by 2016, even as mobile-phone owners increasingly rely on Facebook Inc. (FB) and WhatsApp to communicate.

The first SMS, or short message service, text was sent over Vodafone Group Plc (VOD)'s network on Dec. 3, 1992 with the message "Merry Christmas." By 2016, users may send 9.4 trillion texts, generating $127 billion in revenue, up from 6.7 trillion forecast for this year, according to researcher Informa Plc.

SMS became a key source of income for carriers worldwide, initially costing users a few cents per text and eventually becoming wrapped into unlimited voice and data plans. As more customers have switched to smartphones, with better access to the Internet and more applications, people are increasingly using chat features on Facebook and other websites.

"The concern for mobile operators is that the malaise that SMS faces in countries such as the Netherlands, Spain, China, South Korea and the Philippines, where SMS traffic and revenues are in decline, will inevitably spread, as the penetration of smartphones and mobile broadband grows," Informa said in a note.

Growth will come via emerging markets in Africa, Asia and Latin America where fewer users have smartphones and they rely on SMS for communication as well as services such as mobile banking, Informa said.

(BN) Nokia Speed Advantage Opens Way to Holiday Gain on IPhone

When Tommie Johansson was looking for a new smartphone in Stockholm last month, he quickly ruled out the iPhone 5. The reason: It's too slow.

The Apple Inc. (AAPL) handset can't connect to the newest networks of most European carriers. That creates a potential opening for Nokia Oyj (NOK1V) as it seeks to claw back lost market share with new phones that can take full advantage of the fastest networks.

Nokia is vying with Apple and South Korea's Samsung Electronics Co. (005930) for European shoppers' holiday budgets and an early foothold in the market for LTE smartphones, which are faster and often have bigger screens. For Nokia, facing falling revenue and mounting losses, winning over customers like Johansson would help it regain traction in a market dominated by Apple and phones using Google Inc. (GOOG)'s Android software.

"A fast Internet connection is a must so I knew I wanted a 4G phone," said Johansson, 41-year-old software developer in Stockholm. Nokia's top-of-the-line Lumia 920 "was the one."

LTE, or long-term evolution, is a wireless technology allowing quicker Web browsing, song downloads and video streaming. While the iPhone 5 can connect to the LTE networks of the biggest U.S. carriers, it can't do so in Europe because most operators there provide LTE service on a different frequency.

Holiday Shoppers

The fast LTE connection and Microsoft Corp. (MSFT)'s new Windows Phone 8 software are among the features Nokia is touting as it tries to lure back consumers who defected over the past five years. Apple and Android now control almost 90 percent of the European smartphone market, according to Strategy Analytics. Nokia, which once dominated global smartphone sales, competes for the rest with BlackBerry-maker Research In Motion Ltd. (RIM) and a handful of other also-rans.

"The Lumia's LTE connectability is going to help Nokia stand out to holiday shoppers," said Johan Eidhagen, general manager of Nokia in Scandinavia.

Nokia shares rose 21 percent in the past two weeks amid reports the Lumia 920 sold out in German stores soon after its debut, signaling good demand. The stock is still down almost 90 percent since the first iPhone was introduced five years ago. Nokia fell 0.8 percent to 2.53 euros at 10:19 a.m. in Helsinki.

"There is clearly strong demand among European consumers for 4G phones," said Neil Mawston, an analyst at Strategy Analytics in London. He predicts Nokia will sell 5 million Lumias in the fourth quarter, up from 2.9 million in the previous three months.

Apple 'Skepticism'

Nokia's Lumia 920 and Lumia 820 allow users to access the about two dozen LTE mobile networks in western Europe, according to Strategy Analytics. The iPhone 5 only works on the LTE network of two carriers -- Deutsche Telekom AG (DTE) in Germany and EE, a U.K. venture of Deutsche Telekom and France Telecom SA. (FTE)

Apple may have prioritized the U.S. in its design because LTE networks there offer broader coverage and there are more potential customers than in Europe, Mawston said. The company hasn't announced plans to update the iPhone 5 with more frequencies and officials of the Cupertino, California-based company declined to comment.

The U.S. focus means Apple is losing some early LTE adopters in an important market. Western Europe's smartphone shipments reached 28.1 million units last quarter, versus 26.7 million in the U.S., according to Strategy Analytics.

"There's more skepticism around Apple now since their new phone doesn't work with LTE," said Filip Ljuboje, a salesman at a mobile-phone store in Stockholm. "The 3G net is congested from so many users, so moving to LTE is a priority."

The speed advantage over the iPhone alone won't be enough to revive Nokia. The company, based in Espoo, Finland, also needs to lure customers away from rivals such as Samsung, which doesn't have an LTE speed handicap.

Loyalist Support

Samsung makes handsets running the Android operating system and has become the biggest maker of smartphones. It also sees LTE as a key part of its strategy, and its Galaxy S III and Note II work on European LTE networks.

"There is definitely the possibility of a boost for us," said Martin Cullberg, director of Samsung's telecom business for the Nordic region. "The focus right now is to show the benefit you get by using LTE that supports all available frequencies."

Samsung's "strong momentum" and consumer satisfaction with Apple and Android are among the key hurdles for any smartphone recovery for Nokia, according to Kai Korschelt, a Deutsche Bank AG analyst in London. German stores may have run out of new Lumia phones because of limited supply rather than overwhelming demand, Korschelt wrote in a note to clients last week.

"It seems that the initial interest and purchases are mainly from loyal Nokia users and electronics enthusiasts," said Korschelt, who advises selling the company's shares. "We continue to see limited consumer traction for Nokia's Windows 8 devices in a highly competitive and duopolistic smartphone market."

(BN) Shell to Offer LNG to Power Ships, Trucks on Cheap U.S. Gas

Royal Dutch Shell Plc (RDSA) is expanding plans to make liquefied natural gas a fuel for ships and trucks as Europe's largest energy producer looks to profit from the cheapness of U.S. gas compared with oil.

Shell, where gas production overtook oil for the first time this year, will increase LNG-for-transport projects to more than 5 million tons a year over the next decade, said Shell Chief Financial Officer Simon Henry. That's equivalent to about 120,000 barrels of oil a day, or 4 percent of the company's global production in the third quarter.

Shell will offer about half the volume to the trucking industry in Canada and the U.S. and the rest to shipping in the Great Lakes, Gulf of Mexico and the Baltic Sea.

"This is a global opportunity," Chief Executive Officer Peter Voser said last month in New York. "The current gas equivalent price per kilometer is double-digit percentage lower than for diesel in the U.S."

Gas prices in the U.S. plunged to a decade low this year after companies ramped up output from shale deposits to make the nation the world's largest producer. Today, U.S. crude oil costs four times more than natural gas on a per barrel basis, allowing Shell to profit from LNG transport projects even after the costs of turning gas into a liquid.

"Because cost of the equipment, the engines and the liquefaction and distribution is rapidly coming down, we do see better opportunities than we've actually thought originally," Henry said. "The world is refining long, but diesel short by large because the world's refining complex is producing too much gasoline and not enough diesel," creating an opportunity for LNG to power vehicles.

Green Corridor

Shell is working on the Green Corridor project with Flying J Inc. to supply 250,000 tons of LNG a year to trucks along the 900 mile (1,600 kilometer) highway from Alberta to the Pacific coast in Canada. It's also developing a plan to provide LNG fuel to the shipping industry with the help of its Norwegian distributor Gasnor and the Gate LNG terminal in Rotterdam, Voser said.

"What we are doing is developing multiple options that would be actually probably just a little bit more than the 5 million tons," Henry said on a conference call last month. "There are also opportunities for our own drilling rigs, our own mining trucks, our own demand is quite significant."

New Regulation

The Hague-based company is targeting European Union marine customers before new environmental regulations are introduced in 2015. It's already operating an LNG-propelled barge transporting petroleum products along the Rhine River, the first time such vessels have been used on inland waterways.

In EU shipping "we see LNG playing a leading role," Voser said.

Shell plans to start fuel production at its first small- scale gas liquefaction plant at Jumping Pound near the Canadian Green Corridor route's halfway point next year. In June, it agreed with TravelCenters of America LLC (TA) to sell LNG to heavy- duty trucks in the U.S.

"We've been surprised how quickly interest has accelerated," Henry said. "We are already looking at the Great Lakes Corridor and the Gulf coast for shipping and for trucking."

China has already developed capacity to offer 6 million tons of LNG a year for transportation, Henry said.

"This has been done under the radar by Chinese companies," he said. "They found the way of giving away free buses to customers" to create demand, which "can grow quite quickly because of the price arbitrage."

LNG Demand

Shell expects the world's demand for LNG to rise five times to 500 million tons a year in 2025 from 2000. Producers will need to invest $50 billion a year in the new capacity over 15 years to meet demand for the fuel.

Gas "long-term demand growth remains firm, driven by Asia," Jefferies International Ltd. wrote in a Nov. 27 report. "In North America, projects to export low-cost gas to premium markets are now becoming a reality, which should add considerable value to the otherwise stranded resource that has been unlocked from the continent's shale."

Shell is also examining several projects in the U.S. part of its integrated marketing approach. It's reviewing plans to build a gas-to-chemicals plant in Pennsylvania to use ethane from Marcellus Shale and to export LNG from Freeport site on the U.S. Gulf of Mexico coast. In Canada, Shell is developing a project to export 12 million tons of LNG a year from Kitimat, British Columbia.

"We are probably two years at least away from a final investment decision on LNG export and chemicals," Voser said. "We've got some decisions to make on how much capital to allocate to these opportunities."


(BN) LG, DuPont, Bank of America, GM: Intellectual Property

Three LG Electronics Inc. (066570) patents for front-end-loading washing machines were infringed by Daewoo Electronics Corp., a U.S. jury found.

Jurors in federal court in Wilmington, Delaware, also decided Nov. 30 that the three LG patents were valid, after hearing evidence in a week-long trial during which lawyers rolled out washing machines and displayed gears and metal moldings.

"People like LG try to make a better mousetrap," Richard Stroup, a lawyer for LG, told jurors during the trial. Daewoo infringed those efforts, he said.

LG sued Daewoo in 2008, alleging infringement of its patent-protected inventions for washer drum-drive components. Daewoo claimed that LG's patents weren't valid and were therefore unenforceable. Both LG and Daewoo are based in Seoul.

"Daewoo independently developed its washing-machine technology," attorney Mark Whitaker, representing Daewoo, said at trial.

A possible trial on damages wasn't immediately scheduled by U.S. District Judge Richard G. Andrews, who presided over the case.

John I. Taylor, a spokesman for LG Electronics USA Inc., and Daewoo attorney Rodger D. Smith II, didn't immediately return calls seeking comment on the verdict.

In dispute were patents 6,460,382, 6,914,363, and 7,418,843.

The case is LG Electronics Inc. v. Daewoo, 08-CV-828, U.S. District Court, District of Delaware (Wilmington).

DuPont 'Fraud' in Monsanto Seed Case Unsealed by U.S. Judge

DuPont Co., the most valuable U.S. chemical maker, lied to a federal court and investors about its right to use Monsanto Co. (MON) seed technology as a central part of its defense in a patent lawsuit, a judge ruled.

DuPont "knowingly perpetrated a fraud against the court," according to a Nov. 16 order by U.S. District Judge Richard Webber unsealing sanctions he levied last December that limited the company's defenses in the lawsuit brought by Monsanto.

E-mails from DuPont executives and lawyers show they knew the company didn't have an agreement allowing it to combine Monsanto's Roundup Ready soybeans with a second trait, while telling the court and public for years that it had such a right, Webber ruled. Because the sanction order was sealed, DuPont has "been able to continue their public relations spin," the judge wrote.

Webber will decide whether to uphold or increase the $1 billion award to Monsanto made in the patent case by a federal jury on Aug. 1 after 40 minutes of deliberations.

DuPont today asked Webber to unseal more documents that show "we told the truth," Thomas L. Sager, DuPont general counsel, said in a statement. "The sanctions ruling is dead wrong," he said.

Monsanto sued DuPont in 2009, claiming the company was infringing a patent for seeds that are genetically modified to tolerate application of the herbicide Roundup. Monsanto argued that DuPont wasn't allowed to combine its own seed trait with Monsanto's Roundup Ready trait.

DuPont in turn accused Monsanto of trying to monopolize the seed market. Webber split the dispute, with the patent issue tried first and the antitrust case scheduled for trial next year.

After ruling in December that DuPont had misled the court, Webber prevented the company from arguing to the jury that it acted within the terms of a 2002 licensing contract. The judge also ordered DuPont to pay some of Monsanto's legal bills.

Webber, in his November order, said he provided the Department of Justice's antitrust division with a copy of his fraud findings in February. The department announced last month it dropped its investigation into possible anti-competitive practices in the seed industry.

"DuPont, its employees, and its counsel throughout this litigation have adhered to the highest ethical standards," DuPont said in an earlier statement. "All of the company's representations to the court or the public regarding its claims and defenses in this case have been accurate."

Webber's orders "speak for themselves," said Kelli Powers, a Monsanto spokeswoman, who declined to comment further.

The case is Monsanto Co. v. E.I. du Pont de Nemours & Co., 09cv686, U.S. District Court, Eastern District of Missouri (St. Louis).

Gene Patents Draw U.S. High Court Review in Biotechnology Test

The U.S. Supreme Court agreed to consider whether human genes can be patented, taking up an issue that has split the medical community and will shape the future of personalized health care and the biotechnology industry.

The justices said Nov. 30 they will hear a challenge to Myriad Genetics Inc. (MYGN)'s patents on genetic material used in tests for breast and ovarian cancer. Doctors, researchers and patients are opposing the patents, arguing that Myriad's monopoly over the genes is blocking clinical testing and research.

The nation's highest court will hear arguments, probably in March, and rule by the end of June.

Biotechnology companies say they have been getting patents on genes for 30 years -- and can't attract investment dollars unless they can protect their research from competitors. A study published in 2005 by Science magazine found that 20 percent of human genes had some level of patent protection.

Any move to change that system, "particularly with the deeply settled reliance interests of the technology and investing communities at stake, should be addressed to Congress, not the courts," Salt Lake City-based Myriad argued in court papers that urged rejection of the appeal.

Those supporting the challenge to Myriad's patents include the American Society of Human Genetics, the American Medical Association and AARP, which represents older Americans.

Myriad's supporters in the litigation have included the Biotechnology Industry Organization and the U.S. unit of Novartis AG, Europe's biggest drugmaker.

The case is Association for Molecular Pathology v. Myriad Genetics, 12-398.

For more patent news, click here.


Bank of America Application Points to Social-Impact Bonds

Bank of America Corp. is seeking a U.S. trademark on a phrase to be used to describe social-impact bonds, according to a filing with the U.S. Patent and Trademark Office.

The Charlotte, North Carolina-based bank said in its application that it plans to use the mark with "financing services; project financing; funds investment; capital investment services; project financing for socially beneficial programs." The phrase is "Anything a Society Truly Wants Can Be Financed and Achieved."

In the U.K., frustrated by the difficulty of finding money to fund social programs, a group called Social Finance created a way to tap into private capital.

The idea is that nonprofit organization wanting to fund a project issues a "bond" that investors buy. The money raised funds the program, the results are measured and then, if certain metrics are met, the government refunds the investor -- with a return.

That group raised 5 million pounds ($8.1 million) to fund a pilot program at the prison in Peterborough. Inmates are offered an array of support services when they leave the prison, and their ability to stay out of prison is measured against the general U.K. prison population. If the recidivism rate falls by 7.5 percent, the government is to repay the investors a share of the long-term savings.

In a January opinion article in the Washington Post, James Q. Wilson, the late Ronald Reagan professor of public policy at Pepperdine University in California, cited social-impact financing as a better way to reduce income inequality than taxing the wealthy.

For more trademark news, click here.


Networks Ask Appeals Court to Shut Down Aereo Online Service

Television networks including Walt Disney Co. (DIS)'s ABC and Comcast Corp. (CMCSA)'s NBC asked an appeals court to shut down Aereo Inc., the online TV service backed by Barry Diller, claiming it violates their copyrights.

The broadcasters, which also include News Corp.'s Fox Television and CBS Corp. (CBS), made oral arguments today in federal appeals court in Manhattan, seeking to overturn a lower-court judge's refusal to put New York-based Aereo out of business. They said the judge erred in relying on an appeals court ruling in a case involving a Cablevision Systems Corp. (CVC) video recorder.

The networks sued in March, claiming Aereo infringed their copyrights by capturing over-the-air signals and retransmitting them without a license to subscriber smartphones and computers.

"Cablevision was a storage service, not a retransmission service," Bruce Keller, a lawyer for the networks, told the three-judge appeals panel Nov. 30. "Aereo is a retransmission service by its own design. Without a license, it violates copyrights. It sells our broadcasts, our performances, to its customers."

Aereo said in court papers that its service gives individual subscribers access to broadcast programming and lets them record it using remotely located individual antennas and digital video recorders. That constitutes a private performance under the law, according to Aereo.

U.S. District Judge Alison Nathan in Manhattan in July denied the networks' motion for an injunction, ruling that Aereo's retransmissions weren't public performances requiring a license under copyright law.

Aereo has argued that providing a copy of a program through an individual antenna that transmits to one subscriber and no others constitutes a private performance. Using one antenna to gather a signal before redistributing it to many subscribers would constitute a public performance requiring a license.

Before the service began, Aereo received support from Diller's digital media company IAC/InterActive Corp. (IACI), which led a $20.5 million round of financing. Diller, who is on Aereo's board, once ran News Corp. (NWSA)'s Fox Broadcasting. Chet Kanojia is the founder and chief executive officer of Aereo.

The appeals are American Broadcasting Cos. v Aereo, 12-2807, and WNET v. Aereo, 12-2786, U.S. Court of Appeals for the Second Circuit (Manhattan). The lower-court cases are American Broadcasting Cos. v. Aereo, 12-1540, and WNET v. Aereo, 12-1543, U.S. District Court, Southern District of New York (Manhattan).

'Monty Python' Producer Seeks More Royalties for 'Spamalot'

The producer of "Monty Python and The Holy Grail" is looking for more than a shrubbery from the 1975 film's six stars in a London lawsuit over a profit-sharing agreement tied to the hit musical "Spamalot."

Mark Forstater is entitled to a larger share of the royalties from the musical based on the film, which has been "a huge international commercial success," with runs on Broadway and in London's West End, his lawyers said at a London hearing.

Forstater, who was declared bankrupt in June, should be treated as the "seventh Python" for financial purposes, Tom Weisselberg, his attorney said in court Nov. 30. Three of the founders of the comedy troupe, Michael Palin, Eric Idle and Terry Jones, are scheduled to testify at the trial, which is expected to last five days.

"Spamalot" grossed $168 million before it closed at New York's Shubert Theater in January 2009, according to the Broadway League, a trade association of landlords and producers. The six Pythons each earn between $500,000 and $800,000 in royalties per year, according to a 2009 interview with Roger Saunders, the London manager of Python (Monty) Pictures Ltd.

Saunders couldn't be immediately reached for comment.

In the film, King Arthur gathers his knights for a quest to find the Holy Grail. Along the way, they encounter blood-thirsty villagers looking for witches to burn, French soldiers who toss cows and insults at them over battlements, and a huge knight who demands a shrubbery in order to let them pass.

Between 1975 and 2005 Forstater received one-seventh of half the merchandising and spinoff income from "Grail," his lawyers said in documents filed at the U.K. court. Lawyers for the Pythons argued he should get a smaller proportion.

For more copyright news, click here.

Trade Secrets/Industrial Espionage

Ex-GM Engineer, Husband Found Guilty of Trade Secrets Theft

An ex-General Motors Co. (GM) engineer and her husband were found guilty of stealing trade secrets on hybrid-car technology from the automaker to help develop such vehicles in China.

A federal court jury in Detroit reached the verdicts Nov. 30 after a trial that started Nov. 5. Jurors began deliberating yesterday.

The U.S. claimed Shanshan Du, the ex-GM employee, copied the Detroit-based company's private information on the motor control of hybrids and provided documents to her husband, Yu Qin. Prosecutors accused Qin of using the data to seek business ventures or employment with GM's competitors, including the Chinese automaker Chery Automobile Co.

Qin was convicted of all seven counts. Du was convicted on three counts, including conspiracy to possess trade secrets without authorization. She was acquitted on wire fraud charges.

General Motors contended that the secrets are worth more than $40 million, prosecutors said. Lawyers for both defendants, who pleaded not guilty, argued that the information didn't consist of trade secrets, wasn't stolen and was useless for other companies.

The U.S. alleged that Du, an electrical engineer who worked at GM from 2000 to March 2005, sought assignment to the company's hybrid work project to gain access to information on the motor control of such vehicles.

The U.S. claims that Du began providing GM documents to her husband for use in a company they had started, Millennium Technology International. Du copied material and Qin developed a plan to sell hybrid vehicle technology through a joint venture in China, the U.S. said.

The process accelerated after GM sought Du's resignation in late January 2005, according to the indictment. Prosecutors said at the beginning of the trial that 16,262 GM files were found on Du's computer.

After Du left the company, the couple uploaded GM documents containing secret information onto a computer at their home, the U.S. claimed. In July or August 2005, Qin "communicated with others, by e-mail and in person, about collaboration on a new business venture which would provide hybrid vehicle technology to Chery," the U.S. said in court papers.

The U.S. also alleged that Qin destroyed evidence during the government's initial investigation. In May 2006, the U.S. said, the defendants dumped bags of shredded documents in a Dumpster behind a grocery store.

The case is U.S. v. Qin, 10-cr-20454, U.S. District Court, Eastern District of Michigan (Detroit).

(BN) California Ports Strike Disrupts Holiday-Shopping Cargos

California ports handling about a third of U.S. container shipments were largely closed because of a strike, stranding vessels carrying last-minute cargos for the holiday-shopping season.

Seven of eight terminals at the Port of Los Angeles are shut, Phillip Sanfield, a spokesman for the city-owned facility, said yesterday. At the adjacent Port of Long Beach, three of six are closed, according to its website. Clerical workers walked out Nov. 27 amid an impasse in contract talks, and longshoremen represented by the same union refused to cross the picket lines.

The strike will disrupt shipments of clothes, furniture, electronics and other Asia-made goods during the year's busiest shopping period. The National Retail Federation trade group asked President Barack Obama to intervene, saying a 10-day West Coast ports lockout in 2002 cost the economy about $1 billion a day and disrupted supply chains for as long as six months.

"It's a logistics nightmare," said John C. Martin, an economist at Martin Associates in Lancaster, Pennsylvania. "The problems mount exponentially the longer this goes on."

If the strike lasts, ships will start diverting to Oakland, California, or Seattle, causing backups there as railroads, truckers and warehouse operators handle a surge in volume, Martin said. Perishables such as fruits and vegetables may begin to rot, and shipping lines will have to spend as much as $70,000 more a day to operate vessels, he said in a telephone interview.


The strike comes after the peak of the holiday-shopping cargo rush, Sanfield said. Still, some deliveries are yet to be made, said Stanley Shen, a spokesman for Orient Overseas (International) Ltd. (316) The Hong Kong-based container line's Long Beach terminal has been closed by the walkout.

"The Long Beach strike took us by surprise," he said. "It will have tremendous disruption for all the Christmas shipments that are yet to arrive and be unloaded."

Hanjin Shipping Co., whose Long Beach terminal closed yesterday, is still assessing the impact on operations, said Sonya Cho, a spokeswoman for the Seoul-based shipping line.

Los Angeles has 10 vessels at berth waiting to be serviced and more anchored nearby, according to Sanfield.

"We rarely have ships waiting, and more are due every day," he said by phone.

Trucking companies and Union Pacific Corp. (UNP) and Burlington Northern Santa Fe, the two biggest western U.S. railroads, haul cargos from the California ports to destinations across the country.

'Bargaining Table'

Los Angeles Mayor Antonio Villaraigosa sent a letter to the International Longshore & Warehouse Union, which represents the clerical workers, and the Los Angeles/Long Beach Harbor Employers Association, which negotiates for shippers, urging them to reach an agreement.

"The City of Los Angeles needs both of you to get back to the bargaining table this week, to work with a mediator, and to hammer out a settlement before further harm is done to our local economy," Villaraigosa said. "There is no time to waste."

Port Executive Director Geraldine Knatz echoed that call yesterday in a statement urging both sides to return to negotiations.

"We are starting to see ships divert to other ports, including to Mexico," she said. "This dispute has impacted not only our port workforce but all stakeholders who ship goods through our complex."

No Contract

The employers said in an update on the strike that clerical workers rejected a proposed increase in compensation to more than $190,000 in wages and benefits.

The 800 office and clerical employees have been working without a contract for 30 months, according to a statement on the union website.

Salaries aren't the issue, the union said. More than 51 positions have been lost in recent years because of outsourcing to other locations including Costa Rica and Dallas, according to the statement.

The shippers say no clerical jobs have been sent overseas or elsewhere. The employers say they have offered protection against such actions.

"The real purpose behind this claim is to promote 'featherbedding' -- requiring employers to call in temporary employees and hire new permanent employees even when there is no work to perform," the employers said in their statement.

Craig Merrilees, a spokesman for the longshoremen, said two of the 14 terminal operators working at the ports had signed agreements with the union and their facilities were operational. The two are Stevedoring Services of America and Pasha Stevedoring & Terminals.

Asked how long the strike would proceed, he said: "It will go on until the companies honestly face the issue of outsourcing and keep good jobs at home."

Fourteen ports on the U.S. East Coast and Gulf Coast, including New York and New Jersey, may also face a strike in January if a new contract with the International Longshoremen's Association isn't reached by year-end. The Federal Mediation and Conciliation Service is involved in those discussions.

(BN) Mercedes’s 2012 U.S. Luxury Lead Narrows After BMW Gain

(BN) Bayerische Motoren Werke AG (BMW)'s BMW U.S. sales rose 45 percent in November, further chipping away at Daimler AG (DAI)'s Mercedes-Benz in luxury-auto deliveries this year.

Sales for BMW increased to 31,213 vehicles last month, boosted by a 64 percent gain for its 5 Series sedan. Mercedes reported a 13 percent increase from a year earlier to 30,315, helped by sales of the E-Class sedan, which rose 59 percent to 8,126. Toyota Motor Corp. (7203)'s Lexus rose 17 percent to 22,719.

November's results narrowed Mercedes's lead to 1,849 vehicles, from 2,748 at the end of October. The two German automakers entered the final month of 2012 vying to be the top luxury-auto brand in the U.S. after BMW and Mercedes outsold Lexus last year. Lexus, hurt in 2011 by vehicle shortages following natural disasters in Asia, had been the top-selling luxury brand in the U.S. for 11 years.

"You got some very aggressive year-end pushes going on, especially on the luxury end, where there is one hell of a race going on," Paul Ballew, chief economist at Dun & Bradstreet in Short Hills, New Jersey, said in an interview.

Mercedes's U.S. sales through November rose 12 percent to 245,910, the Stuttgart, Germany-based automaker said yesterday. Munich-based BMW said sales rose 10 percent to 244,061. For all of 2011, BMW outsold Mercedes in the U.S. by 2,715 vehicles. Lexus's U.S. sales totaled 213,559 vehicles through November, a 23 percent gain from a year earlier.

The sales results don't include Daimler's cargo vans and Smart cars and BMW's Mini brand, which aren't luxury vehicles.

Sandy's Impact

Superstorm Sandy in October hit the U.S. mid-Atlantic region, which is home to about a quarter of U.S. luxury-vehicle sales, Jesse Toprak, vice president of market intelligence at, said yesterday in an interview. The need for replacement vehicles, coupled with a tightening sales race and typical holiday season deals, should lead to one of the best- selling Decembers on record, he said.

"When the industry got a boost from the storm, the luxury- auto makers got a bigger boost than everybody else," Toprak said. "That boost is going to continue into December, which is usually a good month anyway. But with all these factors combining, we'll probably finish the year with one of the best volume numbers we've ever seen."

General Motors Co. (GM)'s Cadillac rose 30 percent to 14,517 vehicles in November, helped by a 13 percent gain in sales of the SRX crossover sport-utility vehicle and the new XTS sedan, the Detroit-based automaker said in a statement.

Lincoln, Acura

Ford Motor Co. (F) sold 5,732 Lincolns in November, a 9.1 percent decrease from a year earlier, according to a statement from the Dearborn, Michigan-based automaker. Ford said separately it's starting a new ad campaign to try to revive the luxury brand. The campaign will include an ad during the 2013 Super Bowl football game to be broadcast by CBS.

Sales of Tokyo-based Honda Motor Co. (7267)'s Acura brand rose 24 percent to 12,246 last month, the company said in a statement.

Nissan Motor Co.'s Infiniti sold 11,897 vehicles last month, a 41 percent gain from a year earlier, the Yokohama, Japan-based company said in a statement.

Porsche AG, the Stuttgart-based automaker that is now part of Volkswagen AG (VOW), sold 3,865 vehicles in the U.S. last month, a 71 percent increase, the company said in a statement.

U.S. sales of Volkswagen's Audi brand rose 24 percent last month to 12,067, the company said in a statement.


(BN) Google Can’t Block Sales of Microsoft Products, U.S. Judge Rules

Google Inc. (GOOG), which bought Motorola Mobility to gain leverage in the global legal battle over smartphone and tablet computer inventions, can't use some of its patents to block sales of Microsoft Corp. products, a federal judge ruled.

U.S. District Judge James Robart in Seattle said in a Nov. 30 opinion that, because Motorola Mobility pledged to license some patents on fair and reasonable terms, it can't seek a court order to halt sales of products that use those inventions. The ruling applies to a group of Motorola Mobility patents that are deemed essential to industry standards for video decoding and Wi-Fi technologies.

"At all times during this litigation, the issue was not if, but when and under what terms, a license agreement would be established between Microsoft and Motorola," Robart wrote in the opinion. He ruled that Motorola Mobility won't be harmed if it can't block the sale of products that comport with industrywide specifications.

Niki Fenwick, a spokeswoman for Google, said the company had no comment on the ruling. David Cuddy, a spokesman for Microsoft, also declined to comment.

Mountain View, California-based Google spent $12.5 billion to buy Motorola Mobility and cited its history of innovations and patents on mobile phones as a key reason behind the purchase. Google has cited Motorola Mobility's patents to fight back against patent-infringement claims by Microsoft and Apple Inc. (AAPL) over devices running on Google's Android operating system.

Licensing Terms

Robart's ruling came in a breach-of-contract case brought by Microsoft over Motorola Mobility's licensing demands for the Xbox video-gaming system and Microsoft Windows. Robart had already ruled that Motorola Mobility had a contractual obligation to license its standard-essential patents on fair terms because it helped establish the standards.

A separate case in which Motorola Mobility is seeking to block imports of the Xbox is scheduled to begin this week at the U.S. International Trade Commission in Washington.

Two of the three patents in the ITC case relate to the standard for video decoding that were the subject of Robart's decision.

Motorola Mobility had demanded a royalty of 2.25 percent of the retail price of each product, a figure Microsoft called excessive. The Redmond, Washington-based software maker has said that would amount to $4 billion a year in royalties.

Essential Patents

Robart is evaluating testimony to determine a proper range for reasonable royalties on patents that are incorporated into standards designed to let products from different manufacturers work together. His ruling, expected early next year, would form the basis for a jury trial to determine whether Motorola Mobility's royalty demand violated its contractual commitments.

The judge had previously prevented Motorola Mobility from seeking sales bans of Microsoft products in Germany based on claims of infringement of standard-essential patents. That decision was upheld by a U.S. appeals court in September.

Apple had also accused Google of violating its commitments. That case, in a Wisconsin federal court, was thrown out after Apple said it wouldn't accept any rate set by the trial judge that exceeded $1 per unit.

The U.S. Federal Trade Commission and the European Union are investigating claims filed by Microsoft and Apple that Motorola Mobility is misusing its patents to thwart competition.

The case is Microsoft Corp. (MSFT) v. Motorola Inc., 10cv1823, U.S. District Court for the Western District of Washington (Seattle).

Saturday, December 01, 2012

2011 World R&D spending

I would like to see the number of high-tech startups per engineer or R&D investment. It would be a good measure of entrepreneurship in each country.