(Bloomberg) Banning imports of products based on their use of patents in industry standards may not be in the public interest, President Barack Obama's administration said in a policy paper.
The paper, released yesterday by the Justice Department and U.S. Patent and Trademark Office, says that, in some instances, patent owners shouldn't be allowed to block sales or imports of products based on the use of standards that help products from different manufacturers work together. The U.S. Federal Trade Commission, which reached a consent agreement with Google Inc. last week restricting its use of standard-essential patents, has taken a similar position.
The paper puts added pressure on the U.S. International Trade Commission, which is considering the issue as part of a request by Samsung Electronics Co. to halt imports of Apple Inc. (AAPL) products made in Asia. A final decision is expected Feb. 6.
The ITC's approach "will be important to the continued vitality of the voluntary consensus standards-setting process and thus to competitive conditions and consumers in the United States," the two agencies wrote, without citing specific cases.
The agencies, in a joint policy paper, said that, while patent owners have the right to exclude others from using their inventions, the public benefit of allowing that is limited when it comes to so-called standard-essential patents.
The Washington-based trade commission is investigating other complaints filed by owners of standard-essential patents, including one by Google Inc. (GOOG)'s Motorola Mobility unit against Microsoft Corp., an InterDigital Inc. (IDCC) case against Huawei Technologies Co. and one filed by Ericsson AB (ERIC) against Samsung.
Companies participate in groups to establish technical specifications that can be used across platforms for things like how video images are transmitted or what type of plug is used for phone chargers. Those who establish the standards pledge to license any relevant patents on fair, reasonable and non- discriminatory terms, or FRAND.
The Justice Department and patent office laid out guidelines that should be met before an exclusion order is granted by the trade commission. The agencies said the standard also should apply in district court lawsuits. Judges in Seattle and Chicago have already said Motorola Mobility isn't entitled to orders halting U.S. sales of products based on the use of standard-essential patents.
Samsung Reins Apple's German Design Suits With Trip to Spain
For Germans, a trip to Spain means sunshine. For Samsung Electronics Co. (005930), it's a tactic to avoid adverse rulings from German courts on smartphones and tablet computers targeted by Apple Inc. lawsuits.
Cases covering five Samsung tablet and 10 smartphone models in Dusseldorf have been delayed for months by Samsung filings at the European Union Trademark Office in Alicante, Spain, in a bid to invalidate the intellectual property at the center of the dispute. The German suits over the design of the products are scheduled to be put on hold until the process in Spain is completed.
Apple scored one of its biggest victories in Germany as part of the global patent battle between makers of smartphones and tablet computers that also includes Microsoft Corp. (MSFT) and Google Inc.'s Motorola Mobility. A Dusseldorf court last year issued an EU-wide ban on Samsung's flagship Galaxy Tab 10.1 computer. While the order was later restricted to Germany, it allowed Apple to reiterate its claim that Samsung "slavishly" copies the iPad's design.
Apple disclosed the tablet injunction on Aug. 9, 2011. On the same day, Samsung filed invalidity motions against five design rights the iPad maker had registered for tablets and smartphones at the EU trademark agency. When Apple filed additional suits against its rival's smartphones, including the Galaxy S Plus and the S II, Samsung added another four cases. The litigation is listed as pending on the EU Trademark Office's website.
Samsung said Dec. 18 that it will unilaterally withdraw its request for injunctions to block some Apple sales in Germany, U.K., France, Italy and the Netherlands. On Dec. 21, the European Union sent Samsung a formal complaint outlining how the use of the injunctions violates antitrust rules by blocking the licensing of essential patents to other mobile-phone manufacturers on fair terms.
Samsung spokeswoman Rhee So-Eui declined to comment on the German design cases, as did Apple spokesman Alan Hely.
Trade Secrets/Industrial Espionage
Tupras Claims Iran Oil Import Data Is Trade Secret, Weekly Says
Tupras Turkiye Petrol Rafinerileri AS (TUPRS), Turkey's largest refiner and exporter of crude oil, claims that details of its imports of oil from Iran are a trade secret, the Turkish Weekly reported.
The company asked the Turkish Statistical Institute not to release data on the imports, according to Turkish Weekly.
In 2012, Turkey decreased imports of Iranian oil by 20 percent over U.S.-led embargoes on the Iranian fuel trade, according to Turkish Weekly.
Nigeria Market Shut Down Over Fake Drug Sales, Daily Trust Says
Government officials shut down a market in Nigeria's Kano state as part of efforts to curb the sale of fake and expired drugs, Nigeria's Daily Trust reported.
After the order was issued, 5,000 drug sellers who operated in the Sabon Gari Market demonstrated in the streets and got a court order that halted the shutdown, according to the Daily Trust.
The drug sellers, members of the Nigerian Association of Patent and Proprietary Medicines, contend that the government shutdown was the result of misinformation and that the group went to court only after officials refused to meet with them, according to the Daily Trust.
Rabiu Musa Kwankwaso, Kano's governor, said the government is trying to make sure that drugs that are sold in accordance with professional standards, the Daily Trust reported.
Colorado Judge Kicks Out Doe Defendants in Copyright Suit
A federal judge in Denver dismissed a lawsuit against more than 100 unidentified defendants who were accused of infringing the copyright to an adult film, "Buffy the Vampire Slayer XXX: A Parody."
PHE Inc. of Hillsborough, North Carolina, filed the suit Dec. 27, claiming all of the defendants infringed by using the BitTorrent file-sharing protocol to download and share copies of the film without authorization.
In his Jan. 4 order, U.S. District Judge William J. Martinez said he agreed with other federal courts that have rejected copyright suits involving multiple defendants and the BitTorrent protocol. He said the defendants may have varying defenses to the allegations based on their circumstances.
In other cases, defendants have included elderly grandparents who didn't know what BitTorrent is, parents whose Internet access was abused by their children, and people whose roommates may have used their computers without permission, Martinez said.
"The fact-intensive nature of these individualized defenses would require that the court give individualized attention to each claim against each defendant," he said in his ruling.
While the defendants were dismissed collectively, PHE has the option of filing a separate complaint for each one. PHE is the parent of Adam & Eve Inc., which sells condoms, sex toys and adult films on the Internet, according to the company's website.
Martinez said he was "troubled" by many aspects of the so-called swarm joinder model for copyright ligation. "Courts across the country have observed that the companies involved in this type of litigation do not seem interested in actually litigating their copyrights claims," he said.
He cited another court's pronouncement that "the federal courts are not cogs in the plaintiff's copyright-enforcement business model."
The referenced ruling came in the case Malibu Media LLC v. Does 1-10, 2:12-cv-03623, U.S. District Court, Central District of California (Los Angeles). The PHE case is PHE Inc., v. Does 1-105, 1:12-cv-03342, U.S. District Court, District of Colorado (Denver).
Chinese National Pleads Guilty to U.S. Software Piracy
A Chinese national pleaded guilty to U.S. charges that he sold pirated software from American companies including Agilent Technologies Inc. (A)
Xiang Li, 36, admitted Jan. 7 in federal court in Wilmington, Delaware, to one count each of conspiring to commit criminal copyright infringement and conspiring to commit wire fraud, according to court records. The case was handled by U.S. Immigration and Customs Enforcement's Homeland Security Investigations unit.
Li and his wife, of Chengdu, China, were accused of running a website called "Crack 99" that sold copies of software for which "access-control mechanisms" had been circumvented, the U.S. said in April when a 46-count indictment against them was unsealed. The pair was charged with distributing more than 500 pirated copyrighted works to more than 300 purchasers in the U.S. and overseas from April 2008 to June 2011.
Prosecutors said the retail value of the pirated software products was more than $100 million, according to a Jan. 4 court filing.
Li faces as long as 25 years in prison at his sentencing, which is set for May 3 before U.S. District Judge Leonard Stark.
Mingli Chen, a lawyer representing Li, said in a phone interview that Li already has spent 1 1/2 years incarcerated and that he will ask the judge to find that his client has served enough time in prison. He also said the judge may impose a prison term of five to eight years.
The software includes programs made by Santa Clara, California-based Agilent and Canonsburg, Pennsylvania-based Ansys (ANSS) Inc., according to the indictment.
Xiang Li's websites listed prices of $20 to $1,200 for products with retail values of several hundred dollars to $3 million, according to the government.
In connection with the charges, former National Aeronautics and Space Administration engineer Cosburn Wedderburn pleaded guilty to conspiracy to commit criminal copyright infringement.
Government agents said Wedderburn bought more than $1 million in pirated software from the couple's website.
Wronald Best, a scientist at a Kentucky-based government contractor, also pleaded guilty to purchasing 10 cracked software programs worth more than $600,000, according to the statement.
The case is U.S. v. Li, 10-cr-112, U.S. District Court, District of Delaware (Wilmington).