(BN) Mobile-Network Traffic Growth Falls Short Amid Carrier Use Caps

(Bloomberg ) Mobile-network traffic growth was hampered in North America and Western Europe last year as companies including AT&T Inc. and Vodafone Group Plc adopted pricing policies that discouraged heavy use, according to research by Cisco Systems Inc.

Mobile traffic in North America rose 64 percent in 2012, shy of the 70 percent projected a year ago by Cisco, according to a report released today. Western European traffic increased 44 percent, about half the 81 percent predicted pace, Arielle Sumits, a senior analyst at Cisco, said in an interview.

Traffic in these regions was affected after carriers imposed caps on usage and offered tiered pricing, charging more for large amounts of data. Slowing growth and reduced consumer spending in Europe also played a role there, according to Cisco.

"We see a little bit more regional variation this year," Sumits said.

Mobile-service providers are using new price structures to help them better manage demands placed on wireless networks amid a surge in use of tablets and smartphones, said Thomas Barnett, Cisco's director of service-provider thought leadership.

"The carriers are definitely looking for ways to maximize and optimize their infrastructure investment," Barnett said in an interview.

Japan topped Cisco's expectations. Its mobile traffic more than doubled, compared with 89 percent growth Cisco projected.

Wireless carriers' capital expenditures will contract 7 percent to $98.6 billion this year, amid economic tumult and maturing network technology in Western Europe, according to ABI Research.

Mideast, Africa

Reduced spending on telecommunications gear has implications for equipment makers including Cisco, Alcatel- Lucent SA and Ericsson AB.

Western European mobile traffic will recover to a 50 percent annual growth rate through 2017, Cisco predicted. Driving the recovery will be the continued growth in the number of mobile devices used and the introduction of shared data plans, which make owning multiple mobile devices more convenient, Sumits said.

North America's compound annual growth rate will continue to decelerate, to about 56 percent, Sumits said.

The Middle East and Africa will see compound annual traffic growth of 77 percent through 2017, Cisco said. The Asia-Pacific region will continue to enjoy mobile traffic growth averaging 76 percent annually, Cisco said.

Total worldwide mobile traffic will increase 13-fold in the next five years through 2017, at a compound annual rate of 66 percent, Cisco estimated.

(BN) Twitter Acquires Bluefin Labs to Add Social TV Tools

(Bloomberg ) Twitter Inc., the microblogging service that features 140-character status updates, is paying about $100 million to acquire startup Bluefin Labs, according to a person familiar with the matter.

San Francisco-based Twitter announced the deal today in a blog posting. The person asked not to be identified because the price isn't being disclosed. Bluefin Labs, based in Cambridge, Massachusetts, makes software that lets advertisers, agencies and networks monitor and analyze social-media comments about TV shows and commercials.

Twitter, which plans to boost sales to a projected $1 billion in 2014, is building relationships in TV, where the bulk of advertising budgets are spent. Bluefin's technology may help Twitter expand a partnership formed in December with television- ratings provider Nielsen Holdings NV to measure the amount of Web discussion generated by TV programs.

"As millions of people around the world experienced during Sunday's Super Bowl broadcast, Twitter is an amazing complement to live television viewing," Ali Rowghani, Twitter's chief operating officer, wrote in a blog posting about the Bluefin purchase today. "We look forward to working with Bluefin and our partners in the television industry to make the experience of Twitter and television even better."

Jim Prosser, a spokesman for Twitter, declined to comment on the terms of the deal.

TV Link

In June, a third of active Twitter users posted on the site about something they watched on TV, up from 26 percent of Twitter users at the beginning of the year, Nielsen said in a report on social media last year. Adults aged 35 to 44 are the most likely to discuss TV shows on social sites, the report found.

Twitter bolstered its entertainment ties in November by naming Peter Chernin, a former News Corp. president, to its board. The appointment was intended to help the company navigate the media industry, Twitter Chief Executive Officer Dick Costolo said at the time.

(BN) Stryker, Kraft, Bridgestone: Intellectual Property

(Bloomberg ) Zimmer Holdings Inc. was told to pay $70 million to Stryker Corp. for infringing patents related to a device that removes damaged tissue and cleans bones during joint-replacement surgery.

Zimmer infringed three Stryker patents, a federal jury in Stryker's hometown of Kalamazoo, Michigan, said yesterday. The jurors found that a 25 percent royalty rate should apply to covered sales of infringing Zimmer products.

The jury also found the infringement was willful, meaning the U.S. District Judge Robert Jonker can further increase the award.

Stryker sued Zimmer in December 2010, claiming its patents were infringed by Zimmer's Pulsavac Plus wound debridement system.

The case is Stryker Corp. v. Zimmer Inc., 1:10-cv-01223- RJJ, U.S. District Court, Western District of Michigan.

Trademark

'IPhone' Owner in Brazil 'Open' to Selling Rights to Name

The owner of the iPhone trademark in Brazil, IGB Eletronica SA, said it would consider selling the naming rights to Apple Inc.

"We're open to a dialogue for anything, anytime," Eugenio Emilio Staub, chairman of IGB, said in an interview in Sao Paulo, adding that the company hasn't been contacted by Apple. "We're not radicals."

IGB's Gradiente brand filed to register the trademark in 2000 and was awarded the rights in 2008. While Apple has sold its globally known mobile phone in Brazil for several years, Gradiente started selling its iPhone in December.

Folha de S.Paulo newspaper reported yesterday that the institute responsible for granting trademarks in Brazil confirmed that the exclusive rights to the name for mobile phones still belong to Gradiente, without saying where it got the information. The decision, originally set to be published yesterday, will be announced on Feb. 13. Staub said he hasn't been informed of any decisions regarding the trademark.

Marcelo Chimento, the spokesman for the institute known as INPI, confirmed in a telephone interview that a ruling had been made, though he declined to disclose the decision. He said it's "difficult" to grant approval to Apple's request to use the trademark.

Apple spokesman Steve Dowling declined to comment.

Google Faces New EU Antitrust Complaint From Technology Group

Google Inc. faces another antitrust complaint from a group of rivals as it seeks to settle the European Commission's two- year probe into claims its search results discriminate against competitors.

ICOMP, a coalition including Microsoft Corp., said it submitted a new dossier to the European Commission on Jan. 30, alleging that the world's largest search engine obtained its dominance through unfair agreements with other companies in the Internet and advertising industry.

"By creating an illegal network of exclusive relationships with these important partners, Google achieved its key objective: gaining scale for itself while preventing its rivals from doing the same," ICOMP said in a statement on its website.

Google last week submitted an offer to regulators to settle the antitrust probe after Joaquin Almunia asked the Mountain View, California-based company to January to address allegations that the company promotes its own specialist search-services, copies rivals' travel and restaurant reviews, and has agreements with websites and software developers that stifle competition in the advertising industry. He first told Google in May that he wanted to settle the case.

If regulators decide that the company's concessions could allay antitrust concerns, they can send it to rivals and customers for comments. If this market test is successful, the EU can make the commitments legally binding. Such a settlement would avoid possible fines against Google.

Microsoft is among ICOMP members that already complained to the EU about Google's behavior. The Brussels-based commission confirmed today it received the ICOMP complaint last week.

"We continue to work co-operatively with the commission," said Al Verney, a spokesman for Google in Brussels, on the new complaint.

ICOMP members Foundem, Hot-Map.com and Streetmap.co.uk previously asked regulators to investigate whether Google's search results unfairly shut out rival products.

Kraft Sues Cracker Barrel Old Country Store for Infringement

Kraft Foods Group Inc., producer of Jello, Cheez Whiz and Planters Peanuts, sued a Tennessee restaurant chain for trademark infringement.

The suit is related to a licensing agreement Cracker Barrel Old Country Store Inc. signed with Smithfield Foods Inc.'s John Morrell Food unit in November 2012.

Kraft, based in Northfield, Illinois, objects to the license agreement, saying that the sale of ready-to-eat food products under the restaurant chain's "Cracker Barrel" mark will encroach on its business and cause customer confusion.

Kraft has used its Cracker Barrel brand for cheese since 1954, and said in its complaint that until now, the restaurant chain has "maintained a distance from Kraft both with respect to goods sold and channels of trade used."

The company seeks a court declaration that any use by the restaurant chain of the "Cracker Barrel" mark in connection with food products sold through third-party retail food channels would constitute trademark infringement.

Lebanon, Tennessee-based Cracker Barrel Old Country Store is "reviewing and evaluating" the court papers and "may comment in the future," company spokeswoman Jeanne Ludington said in an e-mail yesterday.

Kraft said that over the past six decades, it has sold more than $1 billion worth of cheese products under the Cracker Barrel mark, and that the products are sold in all 50 states.

The company did license its brand to Frito Lay Inc. for cheese-flavored potato chips and pretzels. Kraft claims its "Cracker Barrel" mark is "vital" to the company and that it would suffer irreparable harm if the restaurant chain is able to go ahead with the license arrangement.

Kraft contends that because the restaurant chain has never sold any products under the "Cracker Barrel" brand anywhere other than its combination restaurant/country store properties, it has never established the right to the mark for use in retail sales.

Smithfield and Morrell aren't parties to the suit.

In addition to a court order barring the use of its "Cracker Barrel" mark for sale of food products, Kraft also asked for awards of litigation costs and attorney fees. Kraft also requested a court order mandating that the restaurant chain conduct national advertising that will prominently disavow a connection with Kraft.

The case is Kraft Foods Group Brands LLC v. Cracker Barrel Old Country Store Inc., 1:13-cv-00780, U.S. District Court, Northern District of Illinois (Chicago).

Bridgestone Trademark Infringement Win Upheld by Chinese Court

Bridgestone Corp. said in a statement that it has won a trademark suit against a Chinese competitor.

The tire maker said it successfully sued Guangzhou Bolex Tyre Ltd. in the Tianjin Binhai New Area People's Court in March 2011. Tokyo-based Bridgestone had objected to Bolex's sale of tires under the "Gemstone" trademark, saying it was too familiar to "Bridgestone."

Bolex filed an appeal to the Tianjin No. 2 Intermediate People's Court, which upheld the lower court's ruling, Bridgestone said.

The Japanese tire company said Bolex was ordered to quit making and selling Gemstone tires and to pay damages to Bridgestone.

Bolex didn't respond immediately to an e-mailed request for comment.

Copyright

Tetris Wins Order Barring Competitor Infringing Computer Game

Tetris Holding Co., which holds the rights to the popular computer game Tetris, won a copyright case against a New Jersey- based game company.

The suit was filed in federal court in Trenton, New Jersey, in December 2009 against Xio Interactive Inc. Tetris objected to Xio's Mino game, which it said was "brazenly" copied by the New Jersey company's game.

In her Jan. 30 order, U.S. District Judge Freda L. Wolfson barred the production, sale and licensing of Xio's Mino. She dismissed trade-dress infringement, and unfair competition charges against Xio.

In May 2012 Judge Wolfson found that Xio had infringed the Tetris copyrights. Although Xio had acknowledged copying elements of the Tetris game, the company had argued that the elements it copied were functional and not entitled to protection under U.S. copyright law.

The judge disagreed. In that ruling she said Xio had "infringed a substantial amount of the overall copyrighted work." Elements that Xio had argued were functional were, instead, "aesthetic choices designers of Tetris made to show or express game play."

The case is Tetris Holding LLLC v. Xio Interactive Inc., 3:09-cv-06115-FLW-DEA, U.S. District Court, District of New Jersey.

(BN) Amazon Debuts Virtual Currency for Purchases on Kindle Fire

(Bloomberg ) Amazon.com Inc. (AMZN), the world's largest online retailer, plans to introduce virtual currency that can be used for purchases on the Kindle Fire Tablet, a move aimed at enticing more developers to create programs for the device.

Starting in May, consumers will be able to use Amazon Coins to buy apps, as well as to acquire virtual merchandise sold within games, the Seattle-based company said today in a statement. The currency will be accepted in the Amazon Appstore and offer programmers an opportunity to boost downloads and increase revenue from their apps.

"Now we have another way to help developers reach even more of our millions of customers," Paul Ryder, vice president for apps and games at Amazon, said in the statement.

(BN) Samsung Boosting Venture-Capital Funding to $1.1 Billion

(Bloomberg ) Samsung Electronics Co. (005930), the world's largest maker of mobile phones, said it was boosting venture- capital funding by $100 million to help create new businesses for its unit making memory chips and electronics parts.

The company unveiled the Catalyst Fund for early stage startups, as well as a strategy and innovation center in Menlo Park, California, at an event near the site on Sand Hill Road. The company and affiliates also run the $1 billion Samsung Ventures America Fund.

"We must reach out to global hot spots and global talent," Young Sohn, president and chief strategy officer of device solutions for Samsung, said at the event. "This is the epicenter of disruptive forces."

Like other companies such as Intel Corp. (INTC), Google Inc. and Microsoft Corp., Samsung is trying to use its cash to encourage the development of technology that will benefit its business in the future. Traditional venture-capital investors aren't investing in basic science and technology startups, creating a gap that Samsung intends to help fill, Sohn said.

Samsung's venture arm, now headquartered in Seoul, has more than $1 billion in assets under management and did 20 deals worth $160 million last year, Sohn said. Investments by the new funds will be in the areas of Internet-connected devices, mobile health, computer-human interface, cloud-data centers and mobile privacy, he said.

(BN) Siemens Tackles U.S. Skills Gap with Apprenticeships

(Bloomberg ) Siemens AG (SIE) said it had to start extensive apprenticeship programs in the U.S. as a shortfall of adequately qualified workers made it difficult to staff its gas- turbine factory in North Carolina.

"This is really helping to fill the skills gap that we've seen," Siemens' head of U.S. operations Eric Spiegel said in an interview with Bloomberg Television today. "We've also worked closely with one of the local universities to develop our engineers who can help us in our gas plant."

The management board of Europe's biggest engineering company is meeting in the U.S. this week to examine how to benefit from the increased use of hydraulic fracturing, or fracking, of shale rock to extract natural gas. The Charlotte gas-turbine plant, which Spiegel said has taken on at least 800 new workers since its opening in March 2010, will eventually employ more than 1,800 when completed.

An estimated 7.67 trillion cubic feet of U.S. natural gas was extracted using fracking in the U.S. last year. That's 17 times more than a decade earlier, according to the Energy Information Administration, which forecast production will reach 13.6 trillion cubic feet in 2035, accounting for 49 percent of gas output.

"We see this as a big driver of growth over the next few years," Spiegel said in the interview, which was carried out jointly with Chief Executive Officer Peter Loescher. "Our managing board is over here from Germany this week, taking a look at how we can take advantage of this opportunity."

Taking Advantage

Siemens, based in Munich, generated 21 percent of its annual 78.3 billion-euro ($106 billion) revenue in the U.S. with about 57,000 employees at the end of September.

Siemens has tied up with the University of North Carolina's Energy Production and Infrastructure Center, where it funds scholarships, and the Central Piedmont Community College, according to the company website. The generators and turbines produced at the Charlotte site range from 150 megawatts to 1,600 megawatts in size.

The company also has recruited high school students to work part-time at the Charlotte facility, Spiegel said.

(BN) Facebook Is Said to Create Mobile Location-Tracking App

(Bloomberg ) Facebook Inc. (FB) is developing a smartphone application that will track the location of users, two people with knowledge of the matter said, bolstering efforts to benefit from growing use of social media on mobile computers.

The app, scheduled for release by mid-March, is designed to help users find nearby friends and would run even when the program isn't open on a handset, said one of the people, who asked not to be identified because the plans aren't public.

Facebook is adding features to help it profit from the surging portion of its more than 1 billion users who access the service via handheld devices. The tracking app could help Facebook sell ads based on users' whereabouts and daily habits. It may also raise the hackles of consumers and privacy advocates concerned about the company's handling of personal information.

Regulators in the U.S. and Europe have already scrutinized Menlo Park, California-based Facebook amid concerns that it doesn't do enough to keep data private. Apple and Google have similar tools for continuously keeping tabs on user whereabouts.

Derick Mains, a spokesman for Facebook, declined to comment.

The team developing Facebook's location software is being led by Peter Deng, a product director who joined from Google Inc. in 2007, one person said. The group also includes engineers from Glancee, a location-tracking startup Facebook acquired in May, and Gowalla, a location-based social network whose assets were purchased in December 2011, the person said.

Facebook fell 5.5 percent to $28.11 at the New York close. It has climbed 59 percent since slumping to a record on Sept. 4

'Mobile First'

Chief Executive Officer Mark Zuckerberg emphasized the need for new mobile products in a Jan. 30 call with analysts.

"A lot of what we had to do last year was simply to improve our mobile development process," Zuckerberg said. "The next thing we're going to do is get really good at building new mobile-first experiences."

Facebook already records the GPS coordinates of users when they post status updates or photos from their phones, or check in to a venue. With the new app, the company would go a step further by tracking user whereabouts in the "background" of Apple Inc.'s mobile operating system, even when other programs are running or the phone isn't in use, one person said.

While Facebook would likely need to ask permission from users to track their location to be in accordance with Apple's guidelines for developers, Facebook may have already gotten consent from its users to run such a feature.

Friends, Events

Facebook's data-use policy tells users that the company may use information on location "to tell you and your friends about people or events nearby, or offer deals to you that you might be interested in." The company said it may also put together data "to serve you ads that might be more relevant."

"When we get your GPS location, we put it together with other location information we have about you (like your current city)," the data use policy reads. "But we only keep it until it is no longer useful to provide you services, like keeping your last GPS coordinates to send you relevant notifications."

A host of apps, including Apple's Find My Friends and Math Camp Inc.'s Highlight, constantly track user locations to help them find friends or places of interest. Many of the programs have failed to gain wide audiences because of privacy concerns and the heavy toll such apps have on the battery life of mobile phones.

(BN) St. Petersburg Bars Ships Without Ice Reinforcement From Passing

(Bloomberg ) St. Petersburg's main port barred ships without sufficient anti-ice protection from entering without icebreakers because of floe buildup in the Gulf of Finland outside Russia's second-largest city.

Ice thickness in the port area grew more than 30 centimeters (1 foot), the port's administration said on its website today. Seven cargo vessels were waiting to enter the port and nine were waiting to steam away, it said.

The St. Petersburg port is the second-biggest general cargo port in Russia and the biggest port in the country's northwest. It handled 57.8 million tons of cargo in 2012, 4 percent less than a year earlier.

In February-March 2011, the ice grew to 1-meter thick, hindering the passage of as many as 45 cargo vessels. Toyota Motor (7203) Corp. and Ford Motor (F) Co. local plants suspended production for several days because of delays in the delivery of car components.

(BN) Facebook Predicting Revenue Per User Slump

(Bloomberg ) Worldwide, Facebook generated an average revenue of $5.32 per user last year, an increase of 6 percent from 2011, the Menlo Park, California-based company said in a regulatory filing. Global growth will decline in the first quarter of 2013, "driven by seasonality," and may continue to slump as membership gains are bigger in Asia and other markets where ad spending lags behind the U.S., Facebook said.

(BN) Oracle Agrees to Buy Acme Packet for $2.1 Billion in Cash

(Bloomberg ) Oracle Corp. (ORCL), the second-largest maker of business applications, agreed to acquire Acme Packet Inc. (APKT) for $2.1 billion, gaining networking gear that helps corporations securely transmit information over the Internet.

Oracle Chief Executive Officer Larry Ellison has spent more than $50 billion on more than 80 acquisitions since 2005 to expand in the market for software and hardware that deliver computing over the Internet, moving beyond the company's traditional applications that run on corporate servers. Acme's tools to transmit voice and video via the Web may help Oracle challenge Cisco Systems Inc. in networking -- a market that's benefiting from the boom in mobile devices.

"Either the total addressable market is on the verge of a huge, transformational inflection point and will quickly balloon into a multi-billion dollar market, or Oracle senses that the future of its business model is in the control of communications data flow, and this acquisition, pricey as it is, is a sure beachhead into a new leg of growth," Greg Mesniaeff, an analyst at Maxim Group, wrote in a research note.

Steep Premium

Net of cash, Oracle's offer for Acme is more than six times the target company's sales over the last 12 months, according to data compiled by Bloomberg. That's a steep premium for Acme, a leader in a market for so-called Internet-session border control that is worth less than $1 billion, Mesniaeff said.

Acme's gear may help revive slumping sales of hardware Oracle gained through the $7.4 billion 2010 purchase of Sun Microsystems, Ross MacMillan, an analyst at Jefferies & Co., wrote in a note to clients. Net of cash Oracle paid $5.7 billion for Sun, or about half trailing 12 month sales, according to Bloomberg data.

`Sun Hardware'

"We see the acquisition bolstering demand for Sun hardware, expanding Oracle's unified communications portfolio, and expanding Oracle's relationship with large telco service providers," MacMillan wrote in a note to clients.

Oracle or another company focused on corporate customers might consider buying BroadSoft, Richard Valera, an analyst at Needham & Co., said in an interview.

Acme and BroadSoft have equipment that's complementary, he said. "Acme makes the pipe; BroadSoft makes the application that runs through the pipe," Valera said. "If Oracle's taking the plunge, maybe other big historically enterprise-focused companies might be looking."

Acme, based in Bedford, Massachusetts, will help speed the transition to cloud computing by enabling secure communications from any device, across any network, Oracle said. Acme has more than 1,925 customers in 109 countries.

`Dramatic Shift'

"The communications industry is undergoing a dramatic shift as users become more connected and dependent on mobile applications and devices," Bhaskar Gorti, senior vice president and general manager of Oracle Communications, said in the statement. "Service providers and enterprises need a comprehensive communications solution that will enable them to more effectively engage with their customers."

Networking Gear

Transitioning to cloud software lets companies save money by renting applications online rather than installing and updating it themselves. The switch is also driving up demand for hardware that directs traffic and moves networking capacity where it's needed.

In July, Oracle paid an undisclosed sum for Xsigo Systems Inc. to gain tools for managing Web traffic. Oracle in December agreed to buy cloud-computing company Eloqua Inc. for about $871 million, or more than 9 times trailing 12 month sales.

In two previous large cloud-computing deals last year, Redwood City, California-based Oracle paid 6.3 times trailing 12 month sales for HR tools maker Taleo Corp. in April, and 7.1 times the revenue of customer support software maker RightNow Technologies Inc., which it acquired in January.

(BN) Brookings, A&E, Google, Valve: Intellectual Property

(Bloomberg ) Most of the U.S. patents issued since 1980 are to residents of only 20 metropolitan areas in the U.S., according to a study released Feb. 1 by the Brookings Institution.

Silicon Valley's San Jose has the highest per capita number of patents, with 5,066 issued per million residents between 2007 and 2011, according to the study. Other patent-intensive regions are the San Francisco/Oakland, California, area, with 1,638 patents per million; the Austin, Texas, region with 1,503 patents per million; Poughkeepsie/Middleton, New York, with 1,820 per million; Seattle/Bellevue, Washington, with 1,174 per million; and the Research Triangle Park area of North Carolina, with 1,164 patents per million.

The study also looked at metropolitan areas with the lowest growth in patents from 1990 to 2010, and the biggest losers were New Orleans and Baton Rouge, both in Louisiana. Baton Rouge had a loss of 5.3 percent, followed by New Orleans, with a 2.5 percent loss, according to the study.

Apple Gets Patent on Shake-to-Charge Tech for Mobile Devices

Apple Inc. (AAPL), maker of the iPad and iPhone, received a patent on a method of recharging mobile devices through the user's movement, according to the database of the U.S. Patent and Trademark Office.

Patent 8,362,751, issued Jan. 29, covers the use of printed coils that can harness power through electro-magnetic induction.

The magnets move along a circuit board when the user moves the device, creating en electromotive force along the printed coils. Cupertino, California-based Apple said this could be done by shaking the device or from movement generated when the user walks or runs.

Apple applied for this patent in June 2012, with the assistance of Womble Carlyle Sandridge & Rice LLP of Winston- Salem, North Carolina.

Trademark

A&E Can't Stop Repeat of History in U.K. Dispute With Discovery

A&E Television Networks LLC, which airs the History channel, lost a U.K. court bid to prevent a Discovery Communications Inc. (DISCA) unit from using the word in the name of its rival documentary television station.

Judge Peter Smith said evidence from viewers didn't show they were likely to mistake Discovery History for A&E's History, which used to be known as the History Channel.

"I do not see that any clear picture emerged from these witnesses to show there was any possible confusion," he said in a written decision.

Discovery, which owns TLC and has a joint partnership with Oprah Winfrey's OWN cable network, is adding channels and programming in new markets to counter slowing growth in the U.S. Its international business, which accounts for a little more than a third of annual sales, is growing faster than its U.S. business, Chief Executive Officer David Zaslav said in December.

A&E argued at a July trial that it lost viewers and advertising revenue because Discovery had tricked people into watching its channel. Discovery filed a counterclaim to strike out the trademark, saying that New York-based A&E wanted a monopoly on the word history. The counterclaim was also rejected by Judge Smith.

Michael Feeney, a spokesman for A&E in New York, declined to comment. Jeremy Dickerson, Discovery's lawyer, didn't immediately respond to an e-mail requesting comment on the ruling.

Judge Smith, who said during the trial he enjoyed watching historical television stations featuring "documentaries about tanks trundling across the Russian steppe," criticized evidence presented by A&E.

The company's lawyers interviewed viewers without telling them until afterwards the information would be used in a trial.

"It seems blatantly unfair to the witness," Smith said in his judgment. "It is clear that statements were 'finessed' to present them in a more favorable light," without witnesses understanding what was happening, he said.

Discovery, which also broadcasts the Animal Planet and TLC channels, has 1.8 billion subscribers in 209 countries, according to its website. A&E also produces the Hoarders and Storage Wars television shows.

Google Submits Settlement Offer, EU Antitrust Chief Says

Google Inc. (GOOG) submitted an offer to European Union regulators in a bid to settle a probe into whether the world's largest search engine operator discriminates against rivals, the EU's antitrust chief said.

"It has arrived," EU Competition Commissioner Joaquin Almunia told reporters in Brussels Feb. 1. He said his officials would now study the proposal.

Almunia had asked Google to submit concessions by the end of January to address allegations that the company promotes its own specialist search-services, copies rivals' travel and restaurant reviews, and has agreements with websites and software developers that stifle competition in the advertising industry. He first told Google in May that he wanted to settle the case.

Google sent a "detailed proposal," said Antoine Colombani, a spokesman for Almunia. He said he couldn't anticipate if the offer was sufficient to allay antitrust concerns or whether it would be sent to rivals and customers for comments. If this market test is successful, the EU can make the commitments legally binding. Such a settlement would avoid possible fines against the Mountain View, California-based company.

Google continues "to work co-operatively with the commission," the company's Brussels-based spokesman Al Verney said in an e-mailed statement.

An EU settlement avoids any decision on whether a company broke antitrust rules. Companies can be fined as much as 10 percent of their yearly revenue if they break the terms of a legally binding settlement.

"Any settlement must include explicit acceptance by Google of its dominance and that it has damaged European businesses through its anti-competitive practices," David Wood, legal counsel at ICOMP, a Brussels-based industry coalition that includes Microsoft Corp. (MSFT), owner of the Bing search engine, said in an e-mailed statement. Microsoft is one of the companies that complained to the EU about Google's search practices.

The EU is continuing to investigate Google over Motorola Mobility's use of injunctions, saying the situation in Europe "is not the same" as in the U.S.

Microsoft and Apple Inc. have complained to the EU about the company's use of legal actions to seek sales bans of their products. Regulators are also probing Google's Android operating system for mobile phones and tablets.

In 2010, the EU began investigating claims Google discriminated against other services in its search results and stopped some websites from accepting competitors' ads. While Microsoft and partner Yahoo! Inc. (YHOO) have about a quarter of the U.S. Web-search market, Google has almost 95 percent of the traffic in Europe, Microsoft said in a blog post in 2011, citing data from regulators.

Copyright

Valve Sued in Germany Over Restrictions on Resale of Games

Valve Corp., the Kirkland, Washington-based maker of the Steam computer games, was sued by the Federation of German Consumer Organizations because of technology elements that make it impossible for users to re-sell their games, according to the PC Advisor computer news website.

A spokesman for the federation told PC Advisor that the games are, in most cases, linked to a specific account and are unplayable online without the key to that account.

The federation views this restriction as a limit on the ownership of a game, according to PC Advisor.

The suit was filed in Berlin Jan. 30 after the company didn't comply with demands made by the federation in September, PC Advisor reported.

Lunch Talk: (@TED) Re-engineering mosquitos

In a single year, there are 200-300 million cases of malaria and 50-100 million cases of dengue fever worldwide. So: Why haven't we found a way to effectively kill mosquitoes yet? Hadyn Parry presents a fascinating solution: genetically engineering male mosquitoes to make them sterile, and releasing the insects into the wild, to cut down on disease-carrying species.

Youtube link.

Mosquito is the deadliest animal in the history of the world!


tags: lunchtalk, health, innovation, problem, solution,

(BN) Stowaway Killer TB Travels Globe Fueling Screening Sales

(Bloomberg ) Tuberculosis, the deadly lung disease purged from most rich nations decades ago, is hitching a ride back in unsuspecting migrants. Most cases go undetected, quietly spreading TB from Stockholm to Sydney.

A latent form of the bug that isn't detectable by standard X-ray screening can hide in bone marrow, lying dormant for years, researchers said in a study published last week. After the infection springs back to life, its carriers can spread it anew via sneezing and coughing. As global migration accelerates, an increase in cases of TB among immigrants has prompted governments to review screening procedures. It's also boosting sales for Dutch-based Qiagen NV (QGEN), whose test for latent TB has become its fastest-growing product.

"If we go on doing what we've always done, which is just to treat active TB, we'll go on getting what we've always got, which is more and more TB," said Ajit Lalvani, chair of infectious diseases at Imperial College London. "We're not stemming the tide or tackling the root cause, which is the latent TB," he said in a telephone interview.

Latent TB was the most-commonly diagnosed infection among migrants globally, and was found in almost half of those headed for the U.S., researchers from the Atlanta-based Centers for Disease Control and Prevention said in December.

'Off-Radar'

The resurgence in TB is a growth opportunity for Qiagen, based in Venlo, Netherlands, which got the QuantiFERON TB test with its $361 million acquisition of Australia's Cellestis Ltd. in August 2011. The product is tapping a global market that JPMorgan Chase & Co. estimates at more than $500 million a year, supported by immigration screening and mandatory TB testing of U.S. health-care workers.

Sales of the test expanded more than 20 percent last year on a constant currency basis from $55 million in 2011, Qiagen said when reporting earnings on Jan. 29, without being more specific.

Revenue from the product will continue at that pace for the next few years, and will probably overtake sales of Qiagen's test for human papillomavirus, the pathogen that causes cervical cancer, Chief Executive Officer Peer Schatz said on a call with analysts. The HPV diagnostic has been the company's biggest seller since 2007.

Qiagen forecast 2013 earnings that exceeded analysts' estimates, based partly on sales prospects for QuantiFERON. The stock has climbed 27 percent in the past year, including reinvested dividends, compared with a 16 percent gain in the Stoxx 600 Health Care Index. Qiagen has a market value of 3.7 billion euros ($4.9 billion).

QuantiFERON is "a bit off-radar" for investors, Adrian Howd, an analyst at Berenberg Bank in London, said in a telephone interview. "It could have more significant growth potential than the market currently assumes."

False Positive

The test identifies latent TB by reacting with a chemical called interferon gamma in a person's blood. It's designed to supersede the 120-year-old Mantoux skin test, which can return a false positive result in people who've been vaccinated against TB, and sometimes leaves permanent scarring.

While most countries in the Organization for Economic Cooperation and Development test migrants for active TB, only about half screen for the latent form, Lalvani and colleagues wrote in the journal Emerging Infectious Diseases in September.

The U.K., where TB is 20 times more common among immigrants than those born in Britain, changed its screening guidelines in 2011 to recommend that immigrants from countries where TB is widespread be offered a latent TB test, either with QuantiFERON or a rival product made by Abingdon, U.K.-based Oxford Immunotec Ltd., the company Lalvani founded.

African Immigrants

Other European nations with large groups of immigrants from Africa such as France, Sweden and Denmark will be the next big markets for the test, said Christian Stoeckigt, Qiagen's associate director of scientific affairs for QuantiFERON in Europe and the Middle East.

Among the European Union's 27 member countries, all but six recorded an increase in TB among immigrants in 2010, according to a report last year.

More countries may follow suit. Governments in the Middle East are considering latent TB screening for foreign laborers, many of whom come from the Indian subcontinent, he said.

In a survey of almost 8,000 migrants, latent TB was detected in 22 percent, and 43 percent of those headed for the U.S., CDC researchers wrote in the journal Clinical Infectious Diseases in December. Latent TB is "the largest challenge to TB elimination," researchers from the CDC wrote in a separate study last year.

Cost Cutting

While Qiagen's $20 test costs more than the Mantoux test, its higher reliability reduces false positive results, eliminating unnecessary follow-up visits and cutting costs, said Stoeckigt.

A trial at the University of Chicago found that QuantiFERON helped save $80,000 in its first year of use, he said.

About 16 million latent TB tests were performed in the U.S. last year, including about 1.9 million QuantiFERON tests, Stoeckigt said. Most of the rest involved the Mantoux skin test.

Tuberculosis sickened about 8.7 million people in 2011 and killed 1.4 million, making it the second-deadliest infectious disease behind AIDS, according to the World Health Organization.

Infection Risk

About one third of the world's population has latent TB, in which the immune system walls off the bacteria that cause the disease, according to the Geneva-based WHO. Investigators writing in the journal Science Translational Medicine last week found that the bacteria that cause the disease hide out in stem cells in bone marrow, evading detection by the immune system.

In about 10 percent of those people, the bug activates, causing disease and raising the risk the carrier will infect others through coughing and sneezing.

Activation can be caused by HIV infection, organ transplantation, diabetes or the use of drugs that suppress the immune system, such as AbbVie Inc. (ABBV)'s rheumatoid arthritis treatment Humira, the world's second-best selling drug. In many other cases, scientists don't know what rouses the pathogen, Lalvani said.

Ridding the body of TB -- active and latent -- is key in stopping its spread, especially as new drug-resistant strains emerge. In Australia, patients with hard-to-treat TB spend about six months in the hospital, costing an average of A$250,000 ($260,000) per case, said Justin Denholm, an infectious diseases doctor and TB researcher at the Royal Melbourne Hospital.

Australia had 1,222 cases of active TB in 2011, of which more than 90 percent were among people who were born abroad and almost certainly brought latent TB with them, Denholm said.

"If you want to reduce TB incidence from where we are now, you have to tackle latent TB," Denholm said. "It's the critical missing piece of the puzzle." 

(BN) Land Battles Rise as U.S. Eyes 450,000 Miles of New Pipe

(Bloomberg ) When a power company tried to run cables over land owned by Larry Salois's mother near Cut Bank, Montana, the native American fought the $400 million project.

He lost when the state passed a law forcing him to sell a right-of-way. Typical of U.S. property battles sparked by the quest for energy security, Tonbridge Power Inc. said it needed the most direct path for its electric line to wind farms, even though it would run across land holding a historical icon.

"They were going to put it right through the middle of a teepee ring," said his attorney, Hertha Lund of Bozeman. The cluster of stones marked a foundation for ancient settlements left behind by the Plains and other Indians. They're an irreplaceable cultural heritage to many native Americans.

With the gas industry estimating that 450,000 miles of pipelines need to be built in the next 25 years, a distance to the moon and almost back to earth, conflicts will multiply over eminent domain, or the legal power to condemn private property.

Land owners increasingly are pit against private businesses in state legislatures and courts as the U.S. confronts the new transmission lines, pipelines and compressor stations needed to reduce oil imports and produce clean energy at home. Lines between pro-green energy Democrats and pro-economic development Republicans can blur as farmers and ranchers object to being handed lease agreements and a pen, with little room to negotiate.

"Eminent domain is an emotional issue," says Lund, whose client eventually settled. "Up here, it's caused a real crossover in politics."

Transmission Corridors

A 2011 study conducted for the National Renewable Energy Laboratory estimates that between 17,000 and 22,000 miles of new transmission lines, plus the corridors to accommodate them, would be required for the eastern half of the U.S. alone if the nation were to provide 20 percent of its electricity with wind power by 2030.

In the oil and gas industry, much more land will be needed as pipelines are built to connect growing production from shale fields to refineries and markets. Just one facet of the network -- long-haul natural gas pipelines -- may grow by 23 percent by 2035, according to a report from the Interstate Natural Gas Association of America.

That much pipeline could require thousands of square miles for easements and right of way. The exact amount is unclear, since builders will follow existing routes and re-use old pipelines as much as possible, Don Santa, the trade group's president, said in an interview.

Respecting Landowners

"There's a recognition on the part of the pipelines that it's in our best interest to respect the landowners, have good relations with them," Santa said in an interview.

In Salois' case, he asserted that the power line's owner, Montana Alberta Tie Line LTD., didn't have the right of eminent domain because it wasn't a public utility. The company, whose owner Tonbridge was later acquired by Canada's Enbridge Inc. (ENB), said it needed to build the 130-mile line, known as MATL, to connect Montana wind farms to the electric grid.

After a Montana court sided with Salois, the state Legislature passed a 2011 law saying merchant power companies such as MATL had the same right to condemn land as other utilities in the state. The law was backdated to cover electric lines permitted in 2008, including MATL.

95 Percent Negotiated

Typically, pipeline companies negotiate 95 percent of right-of-way agreements, Santa said. About 5 percent require some type of court proceeding, in which the company invokes its eminent domain power and asks a court to set a fair price for the land it needs.

Because eminent domain laws vary from state to state, no central clearing house tracks the number of eminent domain cases.

Private companies have had eminent domain power since at least the 1800s. Most state and federal law allows private property to be taken for "common carriers," meaning projects that serve the public by carrying power or providing transportation for all customers.

The U.S. Federal Energy Regulatory Commission holds hearings to determine the routes for interstate gas pipelines. Most other eminent domain disputes, including disputed interstate oil and liquids pipelines, are handled in local courts under state law.

Shifting Power

States have tried to shift the balance of power in landowners' favor after the 2005 U.S. Supreme Court decision known as Kelo vs. the City of New London. The court decided 5- to-4 that the Connecticut city had a right to seize private property for a hotel, condos and offices.

More than 40 states have enacted laws limiting or prohibiting property seizures for economic development since the Kelo decision. The states have been slower to act on the issue of using eminent domain for energy projects on private property. Since 2011, at least 13 states have drafted some form of legislation dealing with the subject, often taking different approaches, according to research from the Denver, Colorado- based National Conference of State Legislatures.

While Montana was granting MATL eminent domain rights, Wyoming, after a landowner backlash, put eminent domain powers for wind companies on hold. Oklahoma in 2011 explicitly outlawed eminent domain in developing wind farms on private property.

Pennsylvania Decision

Pennsylvania, which holds a good portion of the Marcellus Shale gas field, has determined that private pipelines, including the gathering lines that take shale gas from fields to larger transmission lines, can't employ eminent domain unless they're open to all customers, Patrick Henderson, an aide to Governor Tom Corbett, said in an e-mail.

North Dakota, home of the Bakken Shale formation, allows gathering pipelines to be considered common carriers, although it's unclear how many have tried to register that way, says Pat Fahn, director of compliance for the state's Public Service Commission.

In Texas, the biggest oil-and-gas producing state, legislators in 2011 required pipeline companies and other private entities to make a good faith offer before condemning private property, and provide landowners with copies of appraisals used to determine the value of the offer.

Lund and other lawyers say they're seeing more eminent domain cases in court.

"It's increased at a level I've never seen in the past 10 years," says Justin Hodge, a Houston attorney who specializes in eminent domain cases there.

Group Negotiations

Farmers and ranchers in the Mountain West, who often oversee miles of pipelines on their property, have tried negotiating as groups to gain better terms from pipeline companies, Frank Falen, an attorney in Cheyenne, Wyoming, said. It's more productive than trying to block the pipelines, since states usually give pipelines clear authority to take private land.

"Because of the way the condemnation laws are in Wyoming we knew the odds of keeping the pipeline from coming were very, very small," said Pat Wade, a Wyoming rancher who worked with Falen on the right-of-way for OneOk Inc. (OKE)'s Bakken Natural Gas Liquids pipeline.

Landowners have had little luck with direct challenges to eminent domain laws.

In 2011, the Texas Supreme Court ruled that Denbury Green Pipeline, a Plano, Texas company, had overstepped the law when it used eminent domain to acquire a right-of-way for a carbon dioxide pipeline across the land of Texas Rice Land Partners in Beaumont.

Common Carrier?

The farm's owners argued that the pipeline, though it crossed from Texas to Louisiana and received permits from Texas regulators, was not a common carrier because only Denbury would be served by it. The court ruled that Denbury needed to do more to prove it was a common carrier -- including proving it was carrying carbon dioxide for third parties -- and sent the case back to a lower court for more review.

Subsequently, Julia Trigg Crawford, a Paris, Texas farmer, argued that the Denbury ruling prevented TransCanada Corp. (TRP)'s disputed Keystone XL oil pipeline from seizing a 50-foot right- of-way on her property. A judge determined that Keystone meets the Texas common carrier definition. Crawford is appealing that verdict.

Bitumen Challenge

Michael Bishop, a 64-year-old retired chemist, is also suing TransCanada in state court to keep Keystone off his 20- acre farm near the small town of Douglass, Texas. He contends he granted the company an original easement under duress and that TransCanada misrepresented the pipeline as a crude oil project when it primarily will transport liquefied Canadian bitumen, a form of thick crude oil, to Texas refineries.

The company denies his claims. A judge decided in January that Bishop's bid to rescind the Keystone easement contract belonged in a different court and dismissed his case. Bishop vows to continue the litigation.

"I've told those Keystone people from the beginning, 'I don't like your bully tactics. I just want you to leave my homestead alone,'" Bishop said.

Reinventing the horse

link

Innovation and fertility rates

(WSJ, Feb 2, 2013) Low-fertility societies don't innovate because their incentives for consumption tilt overwhelmingly toward health care. They don't invest aggressively because, with the average age skewing higher, capital shifts to preserving and extending life and then begins drawing down. They cannot sustain social-security programs because they don't have enough workers to pay for the retirees.

 I don't believe this claim because over the last two hundreds of years fertility rates kept falling while innovation rates kept going up. The process of long-term innovation depends on invention development (e.g. science) and  investment. Once the government guarantees retirement benefits, there are fewer incentives to invest in one's own children. The society as a whole has to learn how to invest in "somebody else's" children and how to attract immigrants willing to invest in their own children.

tags: problem, demographics, trend, innovation

(BN) Baidu Chief Li, Politburo’s Yu Join China’s Top Advisory Body

(Bloomberg ) Baidu Inc. Chairman Robin Li, China's third-richest man, and Yu Zhengsheng, No. 4 in the Communist Party hierarchy, were named to the country's top political advisory body as a new generation of leaders prepares for power.

Yu, former Communist Party secretary of Shanghai, is the only member of the Politburo's seven-man standing committee to be appointed as one of the 2,237 members of the National Committee of the Chinese People's Political Consultative Conference, indicating he will replace Jia Qinglin as chairman of the body next month.

The new list of members was published yesterday by the official Xinhua News Agency as the nation prepares to hold its annual session of parliament next month that will complete a once-a-decade leadership transfer. Xi Jinping, who took over from Hu Jintao as general secretary of the Communist Party in November, is set to consolidate his power by taking over as president while Li Keqiang, No. 2 in the party hierarchy, will replace Wen Jiabao as premier.

Ling Jihua, formerly the top aide of Hu Jintao, was also appointed to the CPPCC's national committee. He was replaced as head of the office that oversees security for the country's top leaders and took over the United Front Work Department, which handles relations with non-party organizations, according to a Xinhua report on Sept. 1.

Baidu, Mo Yan

Robin Li, 44, whose Chinese name is Li Yanhong, is also co- founder and chief executive of Baidu, the nation's biggest search engine. He has a current estimated net worth of $8 billion, according to the Bloomberg Billionaires Index. Li's appointment was confirmed by Baidu spokesman Kaiser Kuo in an e- mail yesterday.

Mo Yan, 57, winner of the 2012 Nobel Prize in Literature also becomes a member of the CPPCC national committee along with Yao Ming, 32, former basketball player with the Houston Rockets. Hong Kong movie star Jackie Chan's Chinese name Cheng Long also appears on the list. Phoenix New Media reported his appointment on Jan. 31.

People's Bank of China Governor Zhou Xiaochuan and Commerce Minister Chen Deming become new members of the national committee, a further indication that they will leave their current posts.

Geely, Lenovo

Li Shufu, the founder of China's first private carmaker Zhejiang Geely Holding Group Co., Yang Yuanqing, Lenovo Group Ltd. (992)'s chairman and chief executive officer, and Li Xiaolin, chairman and chief executive officer of China Power International Development Ltd. (2380) and the daughter of former Premier Li Peng, are among those reappointed to the committee.

Billionaire Liu Yonghao, chairman of New Hope Liuhe Co., China's biggest poultry supplier, was among the names omitted from the list.

The CPPCC advises the National People's Congress, the country's legislature, and has committees that include economic affairs, population, and ethnic and religious affairs. It is made up of delegates from political parties, quasi-government organizations such as the All-China Federation of Industry and Commerce, business people and independent members with no political affiliation. Delegates are usually appointed for a five-year term.

The first annual session of the new national committee of the CPPCC will start on March 3 and the NPC will begin two days later.

A potential technology for ultra hi-res MRI machines.

MTR reports on an early stage research in nanoscale magnetic field detectors.

(MIT Tech Review. Feb 1, 2013) Currently, researchers have limited tools to study the molecular structure of proteins. X-ray diffraction can give them an atomic-level view of some proteins, but many copies of the protein must be crystallized into a rigid lattice, a process that does not work for all proteins and results in an averaging of protein shape. Conventional MRI, which can be used by doctors to peek inside the body, doesn’t let researchers see anything smaller than a few micrometers in size because the detectors aren’t sensitive enough to pick up magnetic field signals from very small structures.

Two reports published online in Science on Thursday open up the possibility that researchers may be able to determine the structure of individual proteins in living cells. ...the researchers show how specially modified diamond flakes can be used as nanoscale magnetic field detectors.
These tiny sensors can elucidate the structure of single organic molecules. With nanoscale MRI, researchers may one day be able to directly image proteins and other molecules at the atomic scale.

It would be amazing to trace individual proteins in live cells. For example, we could see how specific medicines work in real time, or how DNA decoding results in signalling, etc.

tags: health, biology, detection, packaged payload, control, science, research

Lunch Talk: (@Discovery) Spy gear, fact and fiction

A Discovery documentary about the toys and gadgets of secret agents and spies.

tags: lunchtalk, discovery, innovation

(BN) Apple, Time Warner, Super Bowl: Intellectual Property

(Bloomberg ) Apple Inc. failed to persuade a U.S. appeals court to review its decision that lets Samsung Electronics Co. (005930) continue selling the Galaxy Nexus smartphone while a patent-infringement case is pending.

An October decision, which said Apple needed to show that the patented search feature was a key reason consumers bought the Samsung smartphone, will stand, the U.S. Court of Appeals for the Federal Circuit said in an order posted on its electronic docket yesterday.

Apple sought to have the earlier decision by a three-judge panel considered by all active judges of the appeals court, which specializes in patent law.

In a separate dispute before the Federal Circuit involving Samsung, Apple is trying to halt sales of Samsung products that were the subject of a trial Apple won in August. The federal judge in California declined that request, citing legal reasoning in the Federal Circuit's October ruling.

The standard would make it "essentially impossible for a patentee to halt a direct competitor's deliberate and successful copying of the patentee's innovative designs and features for use in competing products," Apple told the Washington-based court in a filing Jan. 16.

Spokesmen Kristin Huguet of Apple and Adam Yates of Samsung said their companies had no comment.

In a Jan. 11 filing in the Galaxy Nexus case, Samsung said the October ruling, requiring a link between the patented feature and consumer demand, is "an inherent, well- established" part of legal analysis used to determine whether a patent owner would be harmed if an infringing product stays on the market.

A trial in the Galaxy Nexus cases is scheduled for next year, and the issue before the appeals court was whether to halt sales before any violation is found.

The second case, still before the Federal Circuit, involves what standard to use after a jury has found infringement. Apple won a $1 billion verdict against Samsung in August. U.S. District Judge Lucy Koh, who had declined to block the sales of more than two dozen models of Samsung products that were the subject of the trial, on Jan. 29 denied Samsung's request to throw out the verdict.

The Galaxy Nexus case is Apple Inc. (AAPL) v. Samsung Electronics Co., 12-1507, U.S. Court of Appeals for the Federal Circuit (Washington). The lower court case is Apple Inc. v. Samsung Electronics Co., 12-630, U.S. District Court for the District of California (San Jose).

J&J Gets EU Complaint With Novartis on Pay-for-Delay Deal

Johnson & Johnson (JNJ) and Novartis AG (NOVN) were sent antitrust objections by European Union regulators over a pay-for-delay deal that may have hampered the sale of generic versions of the painkiller fentanyl in the Netherlands.

The European Commission said the Dutch units of both companies struck a so-called co-promotion agreement in July 2005 to avoid competing with each other. This deprived Dutch fentanyl customers of access to a cheaper painkiller for 17 months, it said in an e-mailed statement.

"The commission is determined to fight undue delays in the market entry of generic medicines so that European citizens have access to affordable health care," EU Competition Commissioner Joaquin Almunia said in the statement.

Antitrust regulators on both sides of the Atlantic are focusing on how settlements between companies that make branded medicines and generics producers might harm consumers. Les Laboratoires Servier, H. Lundbeck A/S (LUN) and Teva Pharmaceutical Industries Ltd. (TEVA), the world's largest generic drugmaker, were last year sent statements of objections in probes over possible delays for generic drugs.

Johnson & Johnson and its unit Janssen-Cilag "will carefully examine the statement of objections and want to stress that it does not represent the commission's final decision," said Stefan Gijssels, a spokesman for Janssen in Beerse, Belgium, in an e-mailed statement. Johnson & Johnson is based in New Brunswick, New Jersey.

"Janssen continues to believe that these arrangements were legitimate," Gijssels said. "We are cooperating fully" with the commission.

Novartis, based in Basel, Switzerland, said it and its Sandoz unit would examine the EU complaint and "avail themselves of their rights of defense," spokesman Eric Althoff said by e-mail. The EU statement allows the company "the opportunity to comment on the factual and legal issues that led the commission to believe that an infringement of the EU competition rules may have occurred."

Trademark

TWX's DC Comics Opposes 'Superman' Mark for Fitness Services

Time Warner Inc. (TWX)'s DC Comics unit asked an Australian court to overturn a trademark decision related to its "Superman' franchise, Australia's 9News National website reported.

The registrar of trademarks permitted registration of ''Superman Workout" by a fitness company despite DC Comics' argument that its cartoon character is the first thing that comes to mind when people hear the word "Superman," according to 9News National.

Turning instead to the dictionary definition of superman and a definition authored by 19th-century German philosopher Friedrich Nietzsche, the registrar of trademarks said the fitness company's use of the term wasn't likely to confuse people, 9News National reported.

Counsel for DC comics told the court that the use of the term in connection with health and fitness services would call up the "Superman" image because "my client enjoys a reputation in Superman," according to 9News National

Saul Zaentz Seeks 'Middle-Earth' Trademark For Amusement Park

Saul Zaentz Co., the Berkeley, California-based film- production company, filed two new trademark applications related to its IP rights to J.R.R. Tolkien's "Hobbit" and "Lord of the Rings" books.

According to the database of the U.S. Patent and Trademark Office, Zaentz is seeking to register "Middle-Earth" as a trademark for vegetable salads, and for management of campground facilities, organization of sightseeing tours, booking of campground accommodations, and amusement services, including pay areas, rides, booking for special events at an amusement park, and the provision of theme-park services.

Previously, the company registered the mark for a wide range of other uses, including jewelry boxes, online retail store services, computer games, online chat rooms, pewter and glass goblets, and jigsaw puzzles.

Government Seizes Counterfeit NFL Merchandise Worth Millions

More than $13.6 million worth of fake National Football League merchandise has been seized since Sept. 1 as part of a U.S. Immigration and Customs Enforcement operation.

According to a statement from ICE, "Operation Red Zone," begun on that date, was set up to interdict international shipments of fake merchandise. Warehouses, stores, flea markets, online vendors and street vendors selling counterfeit game- related merchandise were targeted.

Confiscated items included fake jerseys, ball caps, t- shirts, jackets and souvenirs, according to the statement. More than 160,000 fake Super Bowl-related items were seized.

The operation will continue through Feb. 6, three days after the Super Bowl game is played in New Orleans.

Homeland Security Investigations worked with EBay Inc. (EBAY)'s PayPal payment processor to identify bank accounts used to facilitate the transfer of money to the illegal counterfeiting operations, the government said in the statement.

Additionally, the government seized 313 websites trading in counterfeit goods. Visitors to those sites will now find a banner informing them that the domain name has been seized by the federal government.

(BN) Apple Overtakes Samsung With 34% of U.S. Mobile Market

(Bloomberg ) Apple Inc. (AAPL) passed Samsung (005930) Electronics Co. to become the top mobile-phone maker in the U.S. for the first time, scoring a victory in the companies' battle for global dominance of the mobile-device market.

Apple sold 17.7 million mobile phones in the U.S. during the fourth quarter, a 38 percent jump from a year earlier, research firm Strategy Analytics said today in a statement. That gave it 34 percent of the market, topping Samsung, which sold 16.8 million handsets for a 32 percent market share. Total shipments grew 4 percent in the quarter to 52 million phones.

The U.S. market is a stronghold for Apple as it faces intensifying competition from Samsung and other smartphone makers using Google Inc. (GOOG)'s Android operating system. Samsung, which also makes cheaper handsets with less sophisticated functions, is the global leader in mobile phones with more than 100 million units sold last quarter.

"Apple's success has been driven by its popular ecosystem of iPhones and App Store, generous carrier subsidies, and extensive marketing around the new iPhone 5 model," said Neil Mawston, an analyst at Strategy Analytics in London.

LG Electronics Inc. (066570) remained the third-largest vendor in the U.S., shipping 4.7 million mobile phones for a 9 percent market share, Boston-based Strategy Analytics said.

Slowing Growth

Apple introduced the iPhone in 2007, and the product became the Cupertino, California-based company's biggest source of revenue as consumers embraced its touch screen and ability to download games and other applications. Apple has fueled demand by introducing a new version approximately every year, and cutting the price of older models at the same time.

Still, broader product portfolios from Samsung and other rivals have begun to eat into Apple's growth globally. Last month, Apple posted the slowest profit growth since 2003 and the weakest sales increase in 14 quarters, fueling concern about Chief Executive Officer Tim Cook's ability to keep producing hit products more than a year after the death of co-founder Steve Jobs.

Even in the U.S., Samsung may regain the top spot in 2013 by releasing new mobile-phone models such as the Galaxy S4, Mawston said. While Apple relies on just the iPhone, Suwon, South Korea-based Samsung's offering includes cheaper, more basic phones, as well as larger-screen, more expensive devices.

Tablet Rivalry

Samsung fell 0.5 percent to 1,441,000 won in Seoul trading, extending its decline this year to 5.3 percent. Apple fell 0.3 percent to $455.49 in New York yesterday, extending its drop this year to 14 percent.

Apple and Samsung have also emerged as the dominant rivals in tablet computers, after Apple pioneered the market with its iPad. Samsung more than doubled its share of the tablet sales in the fourth quarter, gaining on leader Apple.

Worldwide tablet sales surged 75 percent to 52.5 million units in the period, research firm IDC said in a statement yesterday. Samsung's market share jumped to 15 percent from 7.3 percent a year earlier, while Apple's dropped to 44 percent from 52 percent.

(BN) Granola Bars Replace Candy as U.S. Limits School Snacks

(Bloomberg ) Candy bars in school vending machines will be replaced by granola and dried fruit under a U.S. plan that sets nutrition requirements for snacks, sodas and other food sold outside of regular meals.

Schools will have to limit unhealthy fare sold separately from federal school meals, according to a proposal released today by the U.S. Department of Agriculture. The U.S. says snacks peddled in vending machines can be no more than 200 calories and must meet other nutrition criteria, such as limits on fat and sugar.

The government about a year ago revamped nutrition standards for school lunches and breakfasts as it seeks to reduce child obesity. Even before the standards were changed, parents' groups raised concerns that food outside the meals program -- such as student-run bake sales -- would be outlawed. While today's proposal regulates areas such as vending machines, the department avoided that issue by leaving it up to states.

"Parents and teachers work hard to instill healthy eating habits in our kids, and these efforts should be supported when kids walk through the schoolhouse door," Agriculture Secretary Tom Vilsack said in a statement. "Good nutrition lays the groundwork for good health and academic success."

The proposal doesn't apply to foods brought to school in bagged lunches. It also doesn't cover food sold at concession stands after school ends or items children bring in to celebrate birthdays or special events.

Pizza Sales

Foods sold by the school that aren't also provided as part of the regular meal program must meet the nutrition criteria of lunch fare, according to the proposed rules, which have a 60-day comment period.

The nutrition standards for vending machines and food sold outside of the U.S.-provided meals are welcome, said Margo Wootan, nutrition policy director at the Center for Science in the Public Interest, a Washington consumer advocacy group.

"This is great news for the country, for children, for families," Wootan said. "It's a step toward getting junk food out of vending machines and schools."

The proposal is part of the Healthy, Hunger-Free Kids Act of 2010, which seeks to curb child obesity by changing food in schools and promoting healthy eating. The law required the Agriculture Department to set nutrition standards for items sold during the school day, known as "competitive foods." The agency has jurisdiction as it oversees the federal school-lunch program, which provides low-cost and free lunches in public and non-profit private schools.

Nutritional Standards

The proposal released today sets nutritional limits for food and beverages in vending machines, such as PepsiCo Inc. (PEP)'s Doritos, and may apply to fast-food items sold in the cafeteria, such as Domino's Pizza (DPZ) slices students buy with pocket money. There will also be limits on beverages, such as sports drinks sold in high schools.

All schools may sell plain, low-fat milk, chocolate fat- free milk, as well as fruit and vegetable juice. The proposal also sets calorie limits on other beverages.

"With many students consuming up to half of their daily calories at school, these guidelines could make a real difference in the health of our nation's kids," Jessica Donze Black, a dietician and director of the Washington-based Kids' Safe and Healthful Foods Project, which provides analysis on school foods, said in a statement.

Unhealthy Snacks

Almost half of elementary school students were able to buy unhealthy snacks in the 2009-2010 year, according to a study published Feb. 6 in the Archives of Pediatrics and Adolescent Medicine.

"For decades, the school lunch loophole has given our kids access to junk food through school vending machines, snack bars, and school stores, undermining not only their health, but also taxpayers' investment in nutritionally-balanced school meals," Democratic Senator Tom Harkin of Iowa, said in a statement. "USDA's proposed nutrition standards are a critical step in closing that loophole."

Some changes already have been made. Coca-Cola Co. (KO), PepsiCo and Cadbury Schweppes Plc in 2006 agreed to halt almost all soft drink sales in elementary and middle schools and to limit soda sales in high schools to diet drinks, under a deal brokered by former President Bill Clinton and the American Heart Association.

(BN) Netflix’s Hastings Says Viewer Data Underpins Programming

(Bloomberg ) Netflix Inc. (NFLX) will test whether Machiavelli and math are a winning formula as the world's largest subscription-video service debuts "House of Cards," its most ambitious step yet into original online-TV programs.

Netflix will make the political thriller, starring Kevin Spacey, available today to its 33 million streaming subscribers worldwide. Chief Executive Officer Reed Hastings, looking to extend the company's lead in online TV, likens the show to "West Wing," the NBC series that ended in 2006, if it were done by Machiavelli.

"We're on the cusp of something that will change television forever," Hastings said in an interview at Bloomberg's New York headquarters. "Our view is that over the next couple of years as Internet TV really grows, people will look back and say that this was the turning point."

Hastings, 52, is placing big financial bets to secure Netflix's future as the dominant player as more viewers move online. He says efforts like "House of Cards" and the revived "Arrested Development" cement relationships in Hollywood and help fend off competitors like Amazon.com Inc. Netflix's Silicon Valley roots analyzing viewer habits also give it an edge as cable channels like HBO move online, he said.

"Relative to HBO, we're much deeper on the tech side, and relative to Amazon, we're much deeper on the creative side," Hastings said. "We're able to do more and more calculations and big-data statistics so that what we do is represent Netflix more and more as a place where you come for relaxation, escape."

90 Million

Hastings, whose company has 27.2 million U.S. subscribers, says Netflix can grow to as many as 90 million over the next two decades -- a challenge made harder as online competitors like Amazon, Hulu LLC and Redbox Instant by Verizon pile in, and traditional channels expand with digital offerings like HBO Go from the Time Warner Inc.-owned channel.

"If you look at the content gap over the last two years, it has closed to some degree," said Michael Olson, an analyst with Piper Jaffray Cos. in Minneapolis, pointing out that movies from the Epix channel, which Los Gatos, California-based Netflix had exclusively online, are now with Seattle-based Amazon as well. "The game over the next couple of years is going to be about Amazon and maintaining a content gap."

To stay ahead, Hastings is sacrificing short-term profit to spend more on original content. The company said this week it would borrow $500 million to refinance about $225 million in debt and spend more on original programming. The company has committed more than $5 billion to streaming content, including movies from DreamWorks Animation SKG Inc. (DWA), Epix and Walt Disney Co. (DIS)

Debt Hazard

There are risks. Standard & Poor's changed its outlook on Netflix's speculative BB-minus level debt to negative, citing cash flow levels this year and next, increasing debt leverage and "risks associated with original programming."

The company's content costs are rising faster than profit, said Michael Pachter, an analyst at Wedbush Securities in Los Angeles who has an underperform rating on the shares.

"Netflix will continue to generate negative cash flow going forward, driven by the company's ever-increasing streaming commitments," said Pachter.

This year, Netflix also will offer a new series by "Weeds" creator Jenji Kohan called "Orange Is the New Black," the thriller "Hemlock Grove" and comedic actor Ricky Gervais's "Derek," slated for summer. "Arrested Development" brings back the canceled Fox show.

Subscriber Retention

"Lilyhammer," about a gangster who goes into hiding in Norway, will return for a second season in the fall after a "warm-up run" last year that Netflix used to learn about financing and marketing original content, Hastings said.

The shows may help Netflix keep subscribers, Olson said.

"I don't know whether it will drive new additions right out of the gate but it could over the longer term," he said.

As it did with "Lilyhammer," Netflix will offer immediate access to all 13 episodes of "House of Cards." By contrast, networks like HBO roll out dramas such as "Game of Thrones" one episode a week to keep the viewer hooked.

While Hastings expects customers to find more that they like to keep them on the site, there's a risk that they may take advantage of Netflix's policies, which offer a free first month and make it easy to quit. A user could sign up, watch all of "House of Cards" or "Lilyhammer" and then quit.

"We just have amazingly broad content," Hastings said.

Viewer Feedback

Hastings gains confidence from the number-crunching that went into choosing new shows. The company financed "House of Cards" after seeing many subscribers watched Oscar-nominated director David Fincher's movies and that others are fans of its protagonist, Spacey. It resurrected the canceled series "Arrested Development" after similar analysis.

Netflix paid about $100 million for two seasons of "House of Cards," Deadline.com reported. Netflix hasn't discussed the cost publicly, said Jonathan Friedland, a spokesman.

The company will measure this and its other originals a success if a large percentage of subscribers watch entire seasons, Hastings said. Research also will reveal whether non- members hear about the original programming and are more likely to subscribe, he said.

"What they're really doing is going, 'What are the genetics of the shows, the types of shows that people want to use our platform to watch,'" said Richard Greenfield, co-head of fundamental equity with BTIG LLC in New York.

HBO Threat

Investors including Carl Icahn, who holds a 10 percent stake of Netflix stock and options, are showing confidence in the company's strategy. The shares, which Icahn purchased for about $58 each in September and October, have almost tripled. They closed at $165.24 yesterday in New York, down 1.5 percent.

Should its exclusive programming succeed, Netflix might in the future use its content clout to force Internet carriers to share a portion of their broadband-access revenue, Greenfield said. For now, HBO, which had about 39.5 million U.S. subscribers including its Cinemax channel at the end of 2011, doesn't have to break itself off from the cable system.

"If it gets to 40 million or 50 million subscribers you wonder if HBO starts to reconsider," Greenfield said.

Lunch Talk: Human Computer Interaction (UC Berkeley)

This is lecture 13 from UC Berkeley Computer Science 10 (CS 10) course.

tags: interface, computers, interaction, lunchtalk,

(BN) Gilead Seeks Blood Cancer Drugs to Bolster HIV Business

Gilead Sciences Inc. (GILD), the world's largest maker of HIV drugs, has spent $1.2 billion in two years to buy blood cancer drugs. It's looking for more.

Treatment for leukemia and other blood cancers is one of the fastest growing markets for cancer drugs. Gilead's recent string of four deals is intended to tap into that market and set the stage for the company's growth for years.

In the last year, 11 of 39 new drug therapies approved in the U.S. involved stopping cancers by targeting their underlying genetic structure. As of October 2012, investors were focused on at least 14 medicines in final testing for blood malignancies with the potential to move stocks, according to a report by Cowen & Co. analysts.

Gilead Chief Operating Officer John Milligan said the company is eying possible new deals in this universe.

"Oncology is entering an era where significant advances are going to be made, far above and beyond what's been made previously," Milligan said. "It's a field where there's always the possibility of acquiring other molecules and companies as their technology or pipelines mature. We're certainly keeping our eye on it."

"There is a massive amount of untapped potential in the hematological malignancy space," said Selvaraju, who is head of health-care equity research at the New York-based company.

Potential Targets

Ariad, with a market value of $3.6 billion, had a leukemia drug approved for sale in December and is in final testing on a second. Infinity, valued at $1.6 billion, is in early trials on a therapy for leukemia.

While Milligan wouldn't discuss possible acquisitions, they may include Ariad Pharmaceuticals Inc. (ARIA) and Infinity (INFI) Pharmaceuticals Inc., said Raghuram Selvaraju, at Aegis C drug, acquired for $10.8 billion last year in its purchase of Pharmasset Inc.

Analysts share that optimism. Twenty-six of 32 analysts have a "buy" rating on the stock with a price target of $44.39, according to data compiled by Bloomberg. The shares closed yesterday at $39.45 in New York.

If approved, the hepatitis C treatment may generate as much as $3.8 billion in sales by 2020, according to an estimate from Ravi Mehrotra, an analyst with Credit Suisse Group AG in New York. That would make it the biggest product for Gilead, which generated $8.4 billion in revenue in 2011.

Acquisition Strategy

The move into hepatitis C is just one part of a strategy that included acquisitions of three blood-cancer companies in the 28 months prior to its December pickup of YM BioSciences for $510 million, according to Gilead's Milligan. The little-noted acquisitions should give investors another reason to be positive about the company's growth in the future, he said.

"That's why we started to participate, acquiring assets and bringing in people," Milligan said. "For us, it's a very nascent early investment in something that will probably play out over the next decade or so."

It can't hurt, said Michael Yee, an RBC Capital Markets analyst in San Francisco.

"HIV and hepatitis C are going to lead an enormous growth phase from 2014 to 2018" for the company, he said in an e-mail. "Meanwhile, Gilead is quietly building a hematology franchise as another additional growth driver" to take the company further into the future.

The science behind blood-cancer treatments has been advancing steadily since 2001, when the leukemia treatment Gleevec, made by Novartis AG (NOVN), first proved that precisely aiming drugs at the genetic underpinnings of cancer can work.

Oncology Market

In the last year, four drugs have been approved by U.S. regulators to attack various forms of blood cancer, a section of the targeted oncology market that Gilead is suited to advance in, Aegis's Selvaraju said.

Gilead's most-advanced experimental blood-cancer product is aimed at chronic lymphocytic leukemia, or CLL, a slow-moving disease that can require treatment over years, opening up an opportunity for billions of dollars in revenue. The company acquired the medicine, called idelalisib, in its February 2011 purchase of Calistoga Pharmaceuticals Inc. for $375 million.

CLL is one of four main types of blood cancer, along with acute myeloid leukemia, acute lymphoblastic leukemia and chronic myeloid leukemia that was responsible for 23,720 deaths last year, according to the National Cancer Institute.

Pharmacyclics Therapy

Gilead's main competitor in the CLL market may be Pharmacyclics Inc. (PCYC), of Sunnyvale, California, which also has an experimental therapy in the final stage of testing needed for U.S. approval. Gilead's drug, though, is being tested in combination with other medicines, while Pharmacyclics' treatment is taken alone.

There's likely to be room for both treatments, said Gregory Wade, an analyst at Wedbush Securities Inc. in San Francisco.

"There's about 115,000 people in U.S. alone with CLL," Wade said in a telephone interview. "With common prices for these type drugs at $80,000 to $90,000 a year, it's easy to see how you get to a very big number."

Together, these drugs from Gilead and others "have the potential to completely change the landscape, where treating CLL with just targeted therapies, as opposed to the chemotherapies of the past," said John Byrd, leukemia research professor at Ohio State University Medical Center, in a telephone interview.

'Promising Future'

"The Phase 3 studies are going to tell us if the end points justify that," Byrd said. "But if I had to guess, the future looks really promising for this possibility."

Other blood cancers being pursued by Gilead as a result of its acquisitions include indolent non-Hodgkin's lymphoma, which develops in the lymphatic system from a type of white blood cell that helps the body fight infections, and myelofibrosis, a bone marrow disorder where excessive scar tissue impairs the body's ability to produce normal blood cells.

The former is being targeted in a drug from Arresto Biosciences, which Gilead acquired for $225 million in December 2010, the latter by an experimental medicine from YM BioSciences Inc. (YM), Gilead's latest purchase.

The push into blood-cancer research has helped redefine the lives of people who have these diseases, said Hildy Dillon, senior vice president of patient services at the Leukemia & Lymphoma Society

"I've been in oncology for over 30 years, and people did not survive these diseases," Dillon said. "And now, as we develop newer therapies, we are extending the life of these patients."