(BN) J&J, Samsung, General Motors: Intellectual Property

April 5 (Bloomberg) -- Johnson & Johnson, the world's largest seller of health-care products, didn't infringe a doctor's patent on heart devices, a U.S. appeals court ruled in throwing out a $482 million jury verdict the man won.

The trial court erred in its interpretation of the patent owned by Bruce Saffran and, under the correct definition of key terms, J&J's Cordis unit wasn't using his invention, the U.S. Court of Appeals for the Federal Circuit in Washington said yesterday in an opinion posted on its website.

Saffran's patent deals with ways to treat injured tissue with the use of a permeable barrier. While Saffran's invention focused on broken bones, he argued the invention also was used in stents, the tiny mesh tubes that prop open heart arteries after they are cleared of fat. The Cordis stents, sold under the name Cypher, were a metallic mesh with a coating of the drug sirolimus that slows the regrowth of plaque.

The appeal focused in part on whether Saffran's invention was limited to a continuous sheet that contains the bone fragments and can be configured to deliver a drug to the treatment site. J&J said that its drug-coated stents weren't made that way.

The drug layer "is akin to paint on a chain-link fence, not a continuous sheet wrapped around the mesh, and open holes remain between the struts of the accused devices," the three- judge panel ruled.

J&J, the New Brunswick, New Jersey-based company that pioneered the market for heart stents, exited the business in 2011 after losing ground to Boston Scientific Corp. and Abbott Laboratories and amid falling prices for the devices.

Saffran had won a $431 million verdict against Boston Scientific over the same patent, which later increased to $501 million with interest. That case was later settled for about $50 million. Abbott, which had also been sued by Saffran, filed court papers urging the federal circuit court to overturn the J&J verdict. In its filing, Abbott said that if the appeals court adopted the patent interpretations requested by Cordis, "Saffran's infringement case cannot proceed against Abbott."

The case is Saffran v. Johnson & Johnson, 12-1043, U.S. Court of Appeals for the Federal Circuit (Washington). The lower court case is Saffran v. Johnson & Johnson, 07-cv-00451, U.S. District Court, Eastern District of Texas (Marshall).

Samsung Presses Apple Rivalry With Best Buy Mini Stores

Samsung Electronics Co., stepping up a battle with Apple Inc., will staff mini-stores at Best Buy Co.'s U.S. locations to showcase how its tablets, smartphones and televisions work together.

Starting April 8, the Suwon, South Korea-based electronics maker will open 500 Samsung Experience Shops inside Best Buy, taking up about 460 square feet of prime space near the front of the retailer's largest stores, Samsung said in a statement yesterday. Financial terms weren't disclosed.

Samsung, stung by Apple lawsuits accusing the company of "slavishly" copying products, is spending hundreds of millions of dollars this year to prove to consumers it can innovate as effectively as its U.S. competitor. Samsung will hire its own staff to demonstrate new features on the upcoming Galaxy S4 phone, and show how content can be transferred to its smart TVs, laptops and tablets, said Ketrina Dunagan, vice president of retail marketing for Samsung Mobile's U.S. unit.

"This effort is the last of a three-legged stool, from products to marketing and now retail," Dunagan said in an interview.

Best Buy's largest U.S. stores typically measure about 40,000 square feet. The companies plan to add smaller Samsung spaces by June at about 1,000 other Best Buy and Best Buy Mobile locations, Dunagan said.

The Samsung Experience Shops are a direct challenge to Apple, maker of the iPhone, which leads smartphones sales in the U.S. with 38 percent of the market versus 21 percent for Samsung, according to a March 6 research report from ComScore. Samsung leads worldwide with 40 percent of the 545.2 million smartphones shipped in 2012, according to researcher IDC.

Trademark

General Motors Again Seeks to Register 'Chevelle' Trademark

General Motors Co. filed applications at the U.S. Patent and Trademark Office for a brand that it last used in the 1970s.

From 1964 through 1977, GM's Chevrolet division used the name "Chevelle" for its mid-sized cars. The automaker submitted an application in October 1963 to register the mark for use with automobiles. That mark, which was registered in July 1964, is now defunct.

The new GM applications are for the use of the mark with badges for automobiles, clothing, floor mats and toy cars.

GM previously submitted an application to register "Chevelle" for automotive purposes in 2003 and later abandoned that application, according to patent office data.

The "Chevelle" mark was also registered in 2003 by a band.

BasicNet's 'Jesus Jeans' Mark Attacked by Jesus Surfed

BasicNet Spa's U.S. "Jesus Jeans" trademark should be canceled, a company that makes and sells religiously themed surf wear argued.

Jesus Surfed Apparel Co., based in Ormand Beach, Florida, filed an application to register "Jesus Surfed" as a trademark in May. BasicNet's Jesus Jeans unit opposed the registration, saying that the public would be confused by the name similarity.

On April 1, Jesus Surfed submitted its response, saying the opposition is dubious, noting that when BasicNet filed its trademark applications, it said the name "Jesus" was already "highly diluted" when it came to marks for clothing.

Jesus Surfed said BasicNet, based in Turin, Italy, told the patent office that consumers could readily distinguish between its marks and other registered "Jesus" marks for clothing.

Jesus Surfed is calling for the patent office to cancel trademark registrations for Jesus Jeans, saying the use of the brand is sacrilegious when used in the Italian company's ads that feature "sexually suggestive images adorned with parodied text from the Old and New Testaments."

Jesus Jeans' ads have been condemned by the Catholic Church, Jesus Surfed said in its filing. The "Jesus Jeans" trademark also makes a "'false connection with a person,'' which is barred under U.S. trademark law, the Florida company said.

Music Copyright Society's Royalty Collection Legal, Court Rules

Nigeria's Federal High Court ruled that the Music Copyright Society Nigeria is a lawful collector of copyright royalties, according to Nigeria's Guardian newspaper.

The court also said that a police raid on the society's office and the arrest and detention of its officials was unconstitutional and illegal, the Guardian reported.

The Nigerian Copyright Commission had been feuding with MCSN over royalty collections, according to the Guardian.

MCSN's status is related to both Nigeria's constitution, and to deeds of assignments, contracts and powers of attorney the original copyright owners have given to the society, the court ruled and the Guardian reported.

Copyright

Google, SACEM, Universal Music Reach YouTube Distribution Accord

Google Inc.'s YouTube video-sharing service reached an agreement with Universal Music Publishing Group and France's France's Society of Authors, Composers and Publishers of Music, MusicWeek reported.

The accord covers the use of Music in SACEM's and Universal Music Publishing's repertoire in videos to be distributed via YouTube in 127 countries, according to MusicWeek.

SACEM is the first authors' society to make an agreement on such a large scale with YouTube, MusicWeek reported.

Universal Music Chairman Zach Horowitz said the agreement will bring ''proper remuneration" to the artists it represents, according to MusicWeek.

Zookal's Textbook Rental Model Infringes, Publishers Claim

An Australian company that rents textbooks to college students is facing copyright-infringement claims from publishers, the Sydney Morning Herald reported.

Zookal, founded in 2011 by students from the University of Technology, Sydney, rents textbooks on a semester basis for less than half their retail price, according to the newspaper.

The Australian Publishers Association alerted its lawyers to its claims that Zookal is infringing copyrights, according to the Herald.

Zookal Chief Executive Officer Ahmed Haider told the Herald that he wasn't aware of any infringement and his company would be "happy" to rectify any problem, the newspaper reported.

Trade Secrets/Industrial Espionage

U.K. Agricultural Handbook No Longer Protected as Trade Secret

A U.K. seed handbook previously protected as a repository of trade secrets is now being made available to growers and industry, according to a statement from that country's National Institute of Agricultural Botany.

The handbook was previously limited to a number of members of NIAB and the Arable Group, the organization said.

It contains seed standards, seed certification areas and crop areas, historic meteorological data and other useful information for cereals, oilseeds, pulses, grasses, maize, potatoes and sugar beets.

The handbook's content was classified as a trade secret because it covered a wide range of information on seeds, agronomy and markets, according to the NIAB statement.

(BN) Estimated Pay-TV Cord Cutters Topped 1 Million in 2012

(Bloomberg ) About 1.08 million U.S. pay-TV customers canceled service in favor of Netflix Inc. (NFLX) and other online options last year, according to a report.

The estimate from Toronto-based Convergence Consulting Group Ltd. brings the total number of cord-cutters to 3.74 million since 2008. The total will reach 4.7 million this year, the group forecast. The number of people canceling service last year was equal to 1.1 percent of pay-TV accounts.

The pace of defections, along with younger viewers who never sign up, is slowing growth in pay television subscriptions, according to Brahm Eiley, president of Convergence Consulting. Cable, satellite and telephone-based video services added an estimated 31,000 U.S. accounts last year and are forecast to gain 98,000 this year.

"Even with the 'cord-nevers' it's still going to be a pay- TV dominated universe for a long time," Eiley said in an interview.

Program owners are putting more shows and movies behind a paywall, according to the report, titled "The Battle for the North American Couch Potato: Online and Traditional TV, and Movie Distribution."

About 18 percent of the TV audience watched free, online full-episode TV on network websites and destinations such as Hulu, according to the Convergence report. That's down from 19 percent in 2011.

Convergence forecasts a further decline to 17 percent this year and next, as content providers offer less for free. The firm bases its estimates on expected pay-TV subscriber growth and economic factors..

(BN) AstraZeneca, E.Digital, ‘Papples’: Intellectual Property

AstraZeneca, E.Digital, 'Papples': Intellectual Property

(Bloomberg ) AstraZeneca Plc (AZN), the U.K.'s second- biggest drugmaker, said it may appeal a U.S. court ruling that invalidated a patent on its Pulmicort Respules asthma treatment and cleared the way for generic competition.

The drugmaker "strongly disagrees with" the decision by the federal court in New Jersey that also said a second patent wasn't being infringed by producers of a generic version of the treatment. Actavis Inc. (ACT), whose generic form of the corticosteroid has been approved by the U.S. Food and Drug Administration, said separately that it will begin selling its version immediately.

AstraZeneca "has full confidence in the strength of its intellectual property rights," Paul Hudson, executive vice president of North America, said in the London-based company's statement.

The ruling, which AstraZeneca said is restricted to the U.S., doesn't change the drugmaker's forecasts for this year of a mid- to high-single-digit decline in revenue excluding currency shifts and core earnings per share to fall significantly more than revenue, the company said. The invalidated patent covered the drug's delivery method, while the second patent involved its formulation.

Generic competition will mean that royalty payments AstraZeneca receives from Teva Pharmaceutical Industries Ltd. (TEVA) will decline from $260 million last year, the U.K. company said. AstraZeneca struck an agreement with Teva in 2008 allowing the Petach Tikva, Israel-based company to sell a generic version of the drug beginning in December 2009 in exchange for an undisclosed lump sum and royalty payments.

Pulmicort Respules patents expire in 2018, with protection of the children's version extending to 2019, AstraZeneca said.

Actavis plans to begin marketing 0.25- and 0.5-milligram units of its asthma drug immediately, the Parsippany, New Jersey-based company said in an April 1 statement.

Another generic copy, from Apotex Inc., was approved in the U.S., though the Toronto-based drugmaker has been blocked from selling the product after AstraZeneca won an injunction.

AstraZeneca will lose patent protection on some of its best-selling drugs by 2016, including cholesterol treatment Crestor, which had sales of $6.3 billion last year.

E. Digital Files Patent Suits Against Tech Companies, Retailers

E.Digital Corp. (EDIG), a San Diego-based supplier of video-on- demand support technology, filed five new patent-infringement lawsuits in federal court in San Diego.

These filings bring to 21 the total number of recent patent cases the company has filed. The suits related to technology used in smartphones and tablets, such as file-management functionality, flash-memory integrity testing and noise suppression.

Defendants include Apple Inc. (AAPL), Huawei Technologies Co. and ZTE (USA) Inc. The company also sued retailers and distributors, including Wal-Mart Stores Inc. (WMT), Target Corp., and Verizon Communications Inc., E.Digital said in a statement.

Trademark

U.K. Royals Register Their Foundation's Name, Telegraph Says

While a charitable foundation set up by Prince William, his wife and his brother has registered the organization's name as a trademark for a wide range of products and services, there's no plan to bring out a line of logo-marked sportswear, the U.K.'s Telegraph reported.

The Royal Foundation of the Duke and Duchess of Cambridge and Prince Harry included "clothing, footwear and headgear" among the categories for which it registered the mark, according to the newspaper.

Some categories were chosen to bar others from using the name without permission on such things as T-shirts or running shoes, according to the Telegraph.

In 2011, the foundation raised 4.8 million pounds ($7.25 million) and made grants to a range of charities, with a particular emphasis on those for members of the U.K. military, the Telegraph said.

Worldwide Fruit Signs up for 'Papple' License, Website Says

Worldwide Fruit Ltd., a U.K.-based fruit packer and distributor, took a license to the "Papple" trademark program developed by the Associated International Group of Nurseries, the Fresh Plaza produce news website reported.

"Papple" is used for a variety of Asian pear that is round like an apple and tastes like a European pear, according to Fresh Plaza. Papples, which look like apples with an orange blush on a yellow background, are a cross between Chinese and Japanese varieties of Asian pears, according to Fresh Plaza.

The fruit is being marketed with the slogan "A papple a day keeps the doctor...baffled," Fresh Plaza reported.

Copyright

Jolie's 'Land of Blood and Honey' Doesn't Infringe, Judge Says

Angelina Jolie's 2011 film "In the Land of Blood and Honey" didn't infringe the copyright of a Croatian journalist, a federal judge in Los Angeles has ruled.

James J. Braddock, who also goes by Josip J. Knezevic, claimed in his complaint that Jolie's movie contained "similarities so substantial" to his Croatian-language book "The Soul Shattering" as to infringe his copyright. The suit was originally filed in federal court in Chicago and transferred to California in July.

Among the similarities Braddock cited were the fact that both the book and film are love stories set in Bosnia and Herzegovina in the early 1990s. The main female character in each is a Muslim who is abused and raped by soldiers and officers. He said that the main male character in both works is a high-ranking "Greater Serbian" nationalist and army officer.

In her March 29 ruling, U.S. District Judge Dolly M. Gee said the works weren't "substantially similar" and that some of the perceived similarities aren't entitled to copyright protection.

The common feature of the works' protectable elements, taken separately or together, wouldn't lead a trier of fact to conclude that the works are substantially similar,'' Gee wrote.

Braddock claimed that he met repeatedly with a Bosnian resident and film producer who is a co-defendant with Jolie and that they discussed making a film from his book. He learned of Jolie's film in 2010 and found out that the Bosnian film producer was "actively involved in its production."

Braddock was seeking damages, litigation costs and attorney fees. He also asked for an order barring the distribution and performance of the movie.

For more copyright news, click here.

Trade Secrets/Industrial Espionage

Wisconsin Researcher Accused of Economic Spying for China

A Medical College of Wisconsin researcher was charged with economic espionage for stealing a patented cancer-research compound to give to a university in China.

Hua Jun Zhao, 42, may have stolen the compound from a medical college office in Milwaukee and taken steps to deliver it to Zhejiang University, according to the Federal Bureau of Investigation.

"There is probable cause to believe that Hua Jun Zhao has committed the crime of economic espionage," FBI Special Agent Gerald Shinneman wrote in an affidavit in support of a criminal complaint. Theft of trade secrets to benefit a foreign government is punishable by as long as 15 years' imprisonment.

A preliminary hearing is set for April 11 before U.S. Magistrate Judge Patricia Gorence in Milwaukee. Dean Puschnig, a spokesman for Milwaukee U.S. Attorney James L. Santelle, declined to comment on the status of the case. Juval Scott, a federal public defender representing Zhao, couldn't immediately be reached for comment on the charges.

Zhao conducted pharmacology research at the medical college as an assistant to Dr. Marshall Anderson, according to Shinneman. On Feb. 22, Anderson told college security three bottles of a powdery compound identified only as C-25, for which he held the patent, had disappeared from his office, the FBI agent said. The vials were worth about $8,000, Shinneman said.

A review of security video showed Zhao was the only person to enter or leave Anderson's office around the time the bottles disappeared, according to the affidavit.

College security also learned Zhao had been in China from December to February and stated on his resume that he was an assistant professor at Zhejiang University, Shinneman said.

Zhao claimed on the website ResearchGate that he had discovered a cancer-fighting compound and wanted to bring it to China, the FBI agent said.

Federal agents, with a search warrant for Zhao's residence on March 28, found a receipt for a package sent to his wife in China a month earlier, together with plane tickets for a flight from Chicago to China, scheduled to depart yesterday, Shinneman said.

The case is U.S. v. Zhao, 13-mj-00220, U.S. District Court for the Eastern District of Wisconsin (Milwaukee).

Creativity Quote of the Day: the World Wide Web.

In preparation for The Greatest Innovations of Silicon Valley course (BUS 117, Stanford University CSP, Fall '13), I'm re-reading Weaving the Web, by Tim Berners-Lee et al (Harper. 2000). Here's what he had to say about the process of invention:

Journalists have always asked me what the crucial idea was, or what the singular event was, that allowed the Web to exist one day when it hadn’t the day before. They are frustrated when I tell them there was no “Eureka!” moment . . . Inventing the World Wide Web involved my growing realization that there was a power in arranging ideas in an unconstrained, weblike way. And that awareness came to me through precisely that kind of process. The Web arose as the answer to an open challenge, through the swirling together of influences, ideas, and realizations from many sides, until, by the wondrous offices of the human mind, a new concept jelled. It was a process of accretion, not the linear solving of one problem after another.

This is very similar to the events that resulted in Edison's "invention of the light bulb." There's no historical evidence that the famous "light bulb moment" occurred in his head. Instead, it was a steady progress toward finding a suitable light bulb filament.

Another major invention process that followed the "no eureka moment" pattern was the Integrated Circuit (Robert Noyce, 1959).

tags: creativity, quote, invention

(BN) EMC Losing Ground as Smartphones Displace RSA Tokens

(Bloomberg ) Security tokens used to safeguard computer networks risk going the way of the rotary phone as EMC Corp. (EMC)'s RSA unit, the top maker of the devices, is challenged by smartphones deployed as cyber-protection tools.

Vasco Data Security International Inc. (VDSI) and Gemalto NV (GTO), two companies with identification-software that runs on tokens, tablets and smartphones, saw their market share roughly double last year, reducing RSA's portion to 60 percent from 76 percent in 2011, according to WinterGreen Research Inc.

As an increasing number of consumers shop and bank online and more workers access corporate networks via mobile devices, global sales of identity-protection products will surge to $6.43 billion by 2016, from $4.51 billion last year, according to IDC. Software startups seized on an opening created after hackers compromised millions of RSA tokens two years ago to promise corporate customers better protection at a lower price.

"There's a lot of innovation going on right now because it's a dangerous world," Lee Congdon, chief information officer at Red Hat Inc. (RHT), said in an interview. "Malicious people are becoming more adept. Folks are actively trying to steal your secrets and money."

Red Hat, the biggest seller of Linux operating system software, began replacing RSA tokens with Gemalto's tools last month, Congdon said.

"It's considerably less expensive," Congdon said. Gemalto's tokens, paired with a free mobile application, cost less than half the price of protection from RSA, he said.

Mobile Features

Undercutting RSA's price -- which the company says starts at about $46 per user -- isn't difficult with software that harnesses mobile-device features like cameras and microphones for image and voice verification. RSA tokens generate a random numeric code every 30 to 60 seconds to enable access to corporate networks.

"RSA sold tokens for more than 25 years," said Sean Brady, director of product marketing at RSA. "We recognize that that solution is not the most cost-effective way anymore. We've sold software tokens since 2002."

In a push to keep competitors at bay, EMC is also adding new security features and offering mobile apps. It charges fees for the mobile services, which many of its rivals provide at little or no cost.

Token Alternatives

More affordable options are gaining traction as more workers use personal mobile devices to access corporate data, according to Sally Hudson, an analyst at IDC. Adding to demand for token alternatives is the growing popularity of mobile payments and the increasing number of small and mid-size companies that must safeguard financial records on the Internet.

"The market is going to get bigger, and the market dynamics are changing," Hudson said in an interview. "Enterprises have to accommodate these users, and tokens are just way too expensive."

EMC, the world's biggest maker of storage computers, posted net income of $2.89 billion last year on revenue of $21.7 billion. The Hopkinton, Massachusetts-based company agreed to buy RSA Security Inc. for about $2.1 billion in 2006. Sales (EMC) for the unit rose 7.3 percent to $888.7 million last year, about half the growth rate in 2011.

In June 2011, EMC said it would replace millions of SecurID tokens after what the company has described as a hacker attack that may have been aimed at the defense sector and government agencies. One client, defense contractor Lockheed Martin Corp. (LMT), said it was targeted in a cyber attack tied to the RSA breach. Other defense customers have included Northrop Grumman Corp. (NOC) and Raytheon Co. (RTN)

'Gradual Erosion'

"There has been a gradual erosion of confidence in the product since," Susan Eustis, president of WinterGreen, said in an interview. "Other companies were stimulated to make investment when RSA stumbled."

In one sign of the lasting impact of hackers, EMC's shares are trading at about a 22 percent premium to the Standard & Poor's 500 Index on a price-to-earnings basis. Before EMC announced its token replacement plan, the premium was 91 percent. The shares fell less than 1 percent to $23.73 at 9:31 a.m. in New York.

"At first blush, it would seem intuitive that after the March 2011 breach, a lot of competitors would go in there and eat our lunch," Jeff Carpenter, a product marketing manager at RSA, said in an interview. RSA said that didn't happen, though, and the company anticipates gaining customers as the overall market expands.

While EMC remains the market leader, growth is slowing and its share is slipping as competitors challenge RSA on price and tell potential customers that hardware tokens -- the gold standard for more than two decades -- aren't the safest option.

'Security Pain'

Nok Nok Labs was founded after RSA was hacked in 2011, promising to eliminate the need for user names and passwords responsible for "security pain," according to the Palo Alto, California-based company's website.

Applications for smartphones and tablets allow users to verify their identities by speaking into a microphone or snapping a picture of their face. The company expects to have 3 million users by the end of the year, said Brendon Wilson, director of product management.

"Cost would be significantly reduced versus RSA, due to our approach to leveraging the capabilities on the device the user already has," Wilson said in an e-mailed statement.

Many startups, including Duo Security Inc. and Authy Inc., offer no-cost security or free introductory rates.

Authy, which has won backing from the incubator Y Combinator, Box Inc. Chief Executive Officer Aaron Levie, and Salesforce.com Inc. (CRM), is competing against RSA on convenience, said founder Daniel Palacio.

'Two Minutes'

"With RSA, you have to contact a salesperson, get an account," Palacio said in an interview. "With us, you sign up on the website. We don't require a credit card for the smallest plan. It takes less than two minutes."

The simple online enrollment process appealed to Daniel Kivatinos, co-founder of customer Drchrono Inc., a provider of software that allows doctors to access medical records and write prescriptions on mobile devices.

"They were a completely mobile company, like us," Kivatinos said in an interview. "I didn't want an actual, physical piece of hardware."

Duo CEO Dug Song said sales surged more than 400 percent last year, aided by free tool for small businesses and a maximum $3 monthly fee per user at larger companies.

"Most of our customers are first-time users," Song said in an interview. "Many of them couldn't afford it before." 

(BN) Novartis, Facebook, Vivendi, Aereo: Intellectual Property

(Bloomberg ) India's Supreme Court denied Novartis AG (NOVN)'s request for patent protection for its Gleevec cancer treatment, allowing the nation's generic-drug makers to continue to sell copies of the drug at a lower price.

In a decision watched by non-profit groups seeking to expand access to medicine and drugmakers concerned about India's position on intellectual property, the court yesterday upheld regulatory rulings dating to 2006 that the drug wasn't sufficiently innovative to merit a patent. Basel, Switzerland- based Novartis argued that the molecule imatinib, on which Gleevec is based, required years of research and modification to make it an effective, safe leukemia treatment.

"Repetitive patent is not permissible on the same drug," Justices Aftab Alam and Ranjana Prakash Desai said in the court's ruling in New Delhi. "The drug is neither new nor complies" with provisions of the patent law, they ruled.

The decision may add to concern among Western pharmaceutical companies that India allows domestic generic-drug makers to profit from products that deserve patent protection. Scientists credit Gleevec with turning a deadly blood cancer into a chronic disease, and the drug was Novartis's best-selling product last year with sales of $4.7 billion.

The Indian Patent Office in 2006 denied a patent to Novartis, a decision upheld by the Indian Intellectual Property Appellate Board. The board cited a provision of Indian law that aims to prevent "evergreening," in which companies make an incremental change to a drug's chemical makeup, without any real medical benefit, to extend its patent life and prevent the introduction of low-cost generic copies.

Novartis appealed to the nation's highest court. Generic versions of the drug are on the market in India.

Novartis and aid groups agree that the drug itself is of secondary importance in the larger debate over intellectual property.

Sales of Gleevec in India are negligible, because more than 90 percent of volume in the country is donated through Novartis programs, available to the poor, Paul Herrling, who heads Novartis's Institute for Tropical Diseases in Singapore, said in an interview before the decision.

Besides denying a patent to Gleevec, India has angered pharmaceutical companies by allowing generic-drug makers to produce copies of patent-protected medicines to ensure they're available in the country at affordable prices. Drug companies say they have programs in place to make expensive medicines available to the poor.

Trademark

Facebook Must Face Trademark Trial Over 'Timeline' Feature

Facebook Inc. (FB), owner of the world's largest social- networking service, lost bid to end a trademark-infringement lawsuit over its use of "timeline" and related terms.

Timelines Inc. started a website in 2009 that lets users create chronologies tracing historical events such as wars, sporting events and advances in science. It sued Facebook for infringement and unfair competition in September 2011, a week after the social-network announced it was adding a "timeline" feature to its user pages.

Facebook counter-sued, claiming Timelines' registered marks weren't sufficiently distinctive to warrant protection and asking for judgments of non-infringement and a cancellation of the registrations.

Facebook "has failed to demonstrate, as a matter of law, that the marks are generic," U.S. District Judge John W. Darrah in Chicago wrote in a ruling yesterday. "At this stage in the proceedings, it is not unreasonable to conclude that as to this group of users, 'timeline(s)' has acquired a specific meaning associated with plaintiff."

The judge said Timelines had "more than nominal" sales and more than a thousand active users. A jury trial is set for April 22.

Andrew Noyes, a spokesman for Menlo Park, California-based Facebook, said in an e-mail that the company declined to comment on Darrah's decision.

"We're happy with the ruling," Douglas Albritton, an attorney for Chicago-based Timelines, said yesterday in a phone interview. His client is seeking damages equivalent to Facebook's timeline-derived ad revenue, he said.

The case is Timelines Inc. v. Facebook Inc., 11-cv-06867, U.S. District Court, Northern District of Illinois (Chicago).

Copyright

Vivendi Wins Copyright Ruling in Used-Digital-Song Case

ReDigi Inc., an online service that lets people buy and sell second-hand digital songs, violates the copyrights of Vivendi SA (VIV)'s Capitol Records, a federal judge ruled.

U.S. District Judge Richard Sullivan in Manhattan granted a motion by Capitol for judgment without a trial. In a filing dated March 30, Sullivan denied ReDigi's request to dismiss the case. The litigation will continue to determine whether the site will be shut down and monetary damages assessed.

"ReDigi vicariously infringed Capitol's copyrights," Sullivan said in his decision. "ReDigi exercised complete control over its website's content, user access and sales."

Capitol sued ReDigi in January 2012, claiming that it infringes song copyrights by allowing unauthorized copying of digital music files. Record companies have sued many online music services to prevent erosion of sales of CDs and digital songs.

"ReDigi offers a service whose very economic survival depends on the unauthorized reproduction and distribution of copyrighted sound recordings," Capitol said in its motion for summary judgment.

ReDigi, which is based in Cambridge, Massachusetts, argued in court papers that it makes no unauthorized copies of songs. It said it provides digital music storage and a marketplace for tracks legitimately bought from Apple Inc.'s iTunes.

"The technology behind our sale process does not involve the making of even a single copy," John Ossenmacher, the chief executive officer and a founder of ReDigi, said in a declaration filed with the court.

The case is Capitol Records v. ReDigi, 12-cv-00095, U.S. District Court, Southern District of New York (Manhattan).

Diller-Backed Aereo Beats Networks' Bid to Close TV Service

Major U.S. television networks failed to persuade an appeals court to shut down Aereo Inc., the Barry Diller-backed online TV service that they claim violates their copyrights.

Broadcasters including Walt Disney Co. (DIS)'s ABC and Comcast Corp. (CMCSA)'s NBC unsuccessfully petitioned the U.S. Court of Appeals in New York to overturn a lower-court order denying a preliminary injunction that would have put New York-based Aereo out of business.

The networks sued Aereo in March 2012, claiming that it infringed copyrights by capturing their over-the-air signals and retransmitting the programming to subscribers on computers and smartphones. Aereo's transmissions are public performances and require licenses, they said. Its service would devalue their programming and cut viewership, jeopardizing revenue from

In an earlier case, television networks sued pay-TV provider Cablevision Systems Corp. (CVC) for offering subscribers a remote digital video recording service for TV shows.

The broadcasters said the conditions of the Cablevision case don't apply to Aereo. Cablevision provided a storage service not a retransmission service, they said.

Dennis Wharton, a spokesman for the industry trade group National Association of Broadcasters, said in a statement the NAB was disappointed in the decision and that we "will be evaluating the opinions and options going forward."

The decision from the Second Circuit Court of Appeals "again validates that Aereo's technology falls squarely within the law, and that's a great thing for consumers who want more choice and flexibility in how, when and where they can watch television," Chet Kanojia, the founder and chief executive officer of Aereo, said in a statement.

Before the service began, Aereo received support from Diller's digital media company IAC/Interactive Corp. (IACI), which led a $20.5 million round of financing for the startup. Diller, who is on Aereo's board, once ran News Corp. (NWSA)'s Fox Broadcasting Co.

Other plaintiffs in the Aereo case include News Corp.'s Fox, CBS Corp. (CBS), WNET and the Public Broadcasting Service.

"Plaintiffs have not demonstrated that they are likely to prevail on the merits on this claim in their copyright infringement action," Droney said in the opinion.

The appeals are American Broadcasting Cos. v. Aereo, 12- 02807, and WNET v. Aereo, 12-02786, U.S. Court of Appeals for the Second Circuit (Manhattan). The lower-court cases are American Broadcasting Cos. v. Aereo, 12-cv-01540, and WNET v. Aereo, 12-cv-01543, U.S. District Court, Southern District of New York (Manhattan).

Trade Secrets/Industrial Espionage

Ex-Bud Worker Accuses Company of Shakedown Over Diluted Beer

A former Anheuser-Busch InBev NV (ABI) employee who claims the company sells watered-down beer told a judge the beer maker is out to punish his whistle-blowing with a lawsuit alleging he divulged trade secrets.

AB InBev sued James Clark, a former director of operations support, one week after the company was accused of overstating the alcohol content in several of its beers. The case, which accuses Clark of misappropriating trade secrets, should be dismissed because California law bars using so-called strategic lawsuits against public participation as a means of intimidation, Clark said in papers filed March 29 in federal court in Sacramento.

The lawsuit "is designed to silence Mr. Clark and to punish him for standing up for consumers," Clark's attorney Robert Carichoff said in the filing. "To allow AB to proceed with this vindictive litigation would empower all employers to punish former employees like Mr. Clark for reporting misconduct and for speaking out on behalf of consumers."

Beer drinkers have filed at least eight lawsuits accusing Anheuser-Busch InBev NV's St. Louis-based Anheuser-Busch Cos. of adding water to several products including Bud Ice, Budweiser, Busch Ice and Michelob. Lawyers for the consumers are seeking to have the suits consolidated in federal court in San Francisco and to proceed as group cases on behalf of customers nationwide who have purchased AB InBev products in the past five years.

Clark worked at Anheuser-Busch from 1998 until June, when he resigned to become a lawyer. He held several quality- assurance positions at the company before rising to director of operations support, according to court papers filed with his request to dismiss the case.

From 2008 to 2012, Clark said, he complained to about 20 senior managers at Anheuser-Busch about the company's practices regarding alcohol content. He became involved in the proposed class-action complaint shortly after his resignation, Clark said in court papers. He denied disclosing company trade secrets to any competitors or in connection with any regulatory approval process.

Terri Vogt, a spokeswoman for Anheuser-Busch, didn't return a phone call or e-mail seeking comment on Clark's allegations. Carichoff declined to comment beyond the filing. The case is Anheuser-Busch Cos. v. Clark, 13-cv-00415, U.S. District Court, Eastern District of California (Sacramento).

(BN) Apple, Wharton, Del Monte, DuPont: Intellectual Property

(Bloomberg ) Apple Inc. (AAPL)'s future iPhones may look very different from present models, if a recently published patent application is any indication.

The Cupertino, California-based company submitted an application, published in the database of the U.S. Patent and Trademark Office on March 28, for what it calls "an electronic device with wrap-around display."

According to application 20130076612, the mobile device will have a flexible display housing that is enclosed in a transparent housing. Apple said any portion of the display can show visual content.

The present configuration of most mobile devices leaves its sides and rear surfaces "unused or at best configured with buttons and switches with fixed location and functionality," according to the application. Because many of the device's buttons and switches have fixed functionality they can't always be incorporated into third-party applications, Apple said.

The aim of the new configuration would be to provide functionality on more than one surface, Apple said.

The company applied for the patent in September 2011. Unlike many Apple patent applications or patents related to the appearance of the company's products, the application doesn't name the late Steve Jobs, the company founder, as an inventor.

Trademark

Penn Accuses California Company of Being Wharton Imposter

The University of Pennsylvania filed a lawsuit accusing a California company of violating a trademark associated with the Wharton Business School.

The Wharton Business Foundation, which has locations in Beverly Hills, California, and Blue Bell, Pennsylvania, is using Penn's 132-year-old Wharton trademark without authorization, lawyers for the university said in a complaint made public March 28 in federal court in Philadelphia.

The company's use of the name "creates a likelihood of confusion in the marketplace," the University of Pennsylvania said in its complaint.

Wharton Business Foundation operates a website with the Wharton name and offers services including business education and business consultation through its Wharton Business Foundation University, according to the complaint. The company also advertises and has a toll-free phone number 888-4-WHARTON, the university said in its filing.

Penn has been using the Wharton registered mark for business education since as early as 1881 and for business consultation since 1953, lawyers for the university said in the filing. According to the school's website, the name comes from businessman and entrepreneur Joseph Wharton, who established "the world's first collegiate school of business" at the university in 1881.

The university is seeking a jury trial and a court order barring the misuse of its mark.

Officials at the Wharton Business Foundation didn't immediately return a phone message seeking comment on the complaint.

The case is The Trustees of the University of Pennsylvania v. Wharton Business Foundation, 13-cv-01616, U.S. District Court, Eastern District of Pennsylvania (Philadelphia).

Del Monte Barred From Some Labeling, Product-Dating Practices

Del Monte Foods Co., the maker of canned fruit and pet products controlled by KKR & Co., is barred from using its trademark on refrigerated food products containing five specified kinds of fruit.

A federal court in Manhattan told the San Francisco-based food company that it violated a licensing agreement with its 1989 spinoff Fresh Del Monte Produce Inc. (FDP), and falsely informed customers that some of its products that contained preservatives had to be refrigerated

The order came in resolution of the contract-dispute suit Fresh filed against Del Monte in 2008. Fresh, based in Coral Gables, Florida, claimed that the California company breached a trademark licensing agreement.

According to court papers, the agreement limited Del Monte Foods' exclusive use of the Del Monte mark to preserved produce and gave Fresh the rights to use it with fresh fruit and vegetables.

The dispute centered on the parties' different interpretations of a license agreement with respect to refrigerated pineapple, melons, berries, papayas and bananas regardless of whether they are fresh or preserved.

Following a jury verdict that Del Monte had violated trademark law with respect to some of the products, it gave Fresh a damages award of $7.2 million. Fresh then sought a court order controlling aspects of Del Monte's packaging and marketing.

In his March 28 order, U.S. District Judge Sidney H. Stein said Del Monte is barred from using the trademark on any product containing any of the five fruits that is intended to be refrigerated or chilled at the point of sale. If Del Monte's customers are refrigerating these products, the California company is required to tell them in writing that they aren't permitted to sell them under refrigeration.

The company is also barred from pasteurizing or adding chemical preservatives to its fruit products without saying so. The judge said that while Del Monte didn't have to add "'Contains Preservatives'' on the front label, it must state on the ingredient list that certain chemicals added are preservatives. Additionally, Del Monte cannot put ''best by'' or ''sell by'' dates on its products without test results that justify the existence of such a date, he said.

The case is Fresh Del Monte Produce Inc. v. Del Monte Foods Co., 08-cv-08718, U.S. District Court, Southern District of New York (Manhattan).

'Star Wars' Movie May Guide Big East on Selecting New Name

Darth Vader might serve as inspiration for the Big East Conference, which must change its name after the so-called Catholic Seven leaves in three months and takes the league's moniker with them.

Among the names suggested by the marketing firm Duffy & Shanley when the conference formed in 1979 was Galactic East, which the company said was inspired by the 1977 movie ''Star Wars.'' Other suggestions were the Empire Conference, Conference One, Eastern One, Olympic Conference and Eastern Compact, according to the plan, a copy of which was provided to Bloomberg News by Dave Duffy, a partner in the firm at the time.

Geographic-based suggestions were the Big East, Met-East and North Atlantic Alliance. Heritage-based suggestions were the Patriot Athletic Conference, Colonial League and Mayflower Compact.

The firm's principal recommendation was the Big East, which will be used by the seven departing schools that include Georgetown University, Villanova University and Providence College. Joseph Shanley, the father of current Providence College President Brian Shanley, was a partner in the marketing firm.

''All the great brands of the world -- General Electric, Coca-Cola, they have a lot of roots,'' Duffy, 73, said in a telephone interview from Florida. ''It would be hard for the new basketball league to start over and match that.''

Covington & Burling LLP attorney Marie Lavalleye, acting as a representative of the league, on March 6 filed an application with the U.S. Patent and Trademark Office for the term ''America 12 Conference.'' She didn't return a telephone calling seeking comment on the name change.

Duffy & Shanley, in the original marketing plan, said the conference's name, at least in the beginning, shouldn't include a number because conference members are sure to change, a recommendation he said is even more valid today with the realignment in college sports. Shanley, the Providence president, earlier this month said ''the landscape in college sports has not stopped morphing."

Since 2011, the Big East has lost 16 schools that were either members or dropped out before playing a game. The Pac-10 Conference, meantime, became the Pac-12 after adding two schools. The Big Ten Conference hasn't had 10 teams since Penn State University joined in 1990. While the Big Ten didn't change its name at the time, it did alter its logo to reflect an 11th team. The current Big Ten has 12 football members and is adding more.

DuPont Drops Trademark-Infringement Suit Against Easton-Bell

DuPont Co. (DD), the maker of Corian countertops and Tyvek packaging materials, dropped a trademark-infringement lawsuit against a California maker of sports equipment.

The suit, filed Jan. 28 in federal court in Wilmington, Delaware, accused Easton-Bell Sports Inc. of Scotts Valley, California, of infringing the chemical company's "Kevlar" trademark.

DuPont, based in Wilmington, said the size of the Kevlar trademark on Easton-Bell's packaging was even larger than the California company's own mark, according to the complaint

Easton-Bell has sold and marketed bicycle tires and locks in packaging displaying the Kevlar trademark since July, according to court papers. Such products are sold through retailers including Wal-Mart Stores Inc., Target Corp. (TGT) and Amazon.com Inc., DuPont said.

Easton-Bell sued in federal court in San Francisco on Jan. 18, seeking a court declaration that it didn't infringe the DuPont trademark.

In its pleadings, Easton-Bell said it has bought Kevlar from authorized distributors and resellers for at least six years and used it in bike tires and locks. Indicating on its packaging that the products contain Kevlar "has no likelihood of causing confusion," the company claimed.

On March 26, a magistrate judge refused to dismiss Easton- Bell's case and rejected DuPont's request that the dispute be transferred to Delaware. He said that DuPont's request for a transfer was inappropriate.

Dupont didn't give any reason for dropping its suit against Easton-Bell. According to the March 28 filing, Easton-Bell hadn't answered the complaint or asked that the case be dismissed.

The DuPont case is E.I. DuPont de Nemours & Co. v. Easton- Bell Sports Inc., 1:13-cv-00150, U.S. District Court, District of Delaware (Wilmington). The earlier case is Easton-Bell Sports v. E.I. DuPont de Nemours & Co, 3:13-cv-00283, U.S. District Court, Northern District of California (San Francisco).

Trade Secrets/Industrial Espionage

Obama Urged by Democrats to Act on China's Alleged Cyber Thefts

President Barack Obama's administration should take action to curb China's alleged cyber theft, two House Democrats said, after a top U.S. official accused the Asian nation of industrial espionage against American companies.

The U.S. Trade Representative's office needs to designate China as a top violator of intellectual property rights, which can lead to further trade restrictions, Representatives Sander Levin of Michigan and Charles Rangel of New York said March 28 in a letter to Acting USTR Demetrios Marantis.

"In the case of China, the government itself appears to be actively stealing the intellectual property of American businesses," the lawmakers, ranking Democrats on the House Ways and Means Committee, which deals with trade issues, wrote.

China's cyber espionage against U.S. businesses is adding tension between the governments of the world's two largest economies, Obama's National Security Adviser Thomas Donilon said in a March 11 speech in New York. In their letter, Levin and Rangel cited a February report by Mandiant Corp., an Arlington, Virginia-based information security firm, that concluded the Chinese government is probably the source of recent hacking attacks.

The lawmakers asked the USTR to list China in the annual assessment of intellectual property rights protection and enforcement in other nations, to be released about April 30.

"We have received the letter and are reviewing it," Carol Guthrie, a USTR spokeswoman, said in an e-mail.

The USTR will seek to toughen trade-secret protection through the annual assessment, the Obama administration said its strategy to mitigate violations, released in February.

Intellectual-property protection is among the issues being negotiated as the U.S. seeks trade deals with 10 Pacific-region governments and the 27-nation European Union. Companies including New York-based Pfizer Inc. (PFE) and Dow Chemical Co. (DOW) rely on enforcement of trade laws to protect their patents.

Intellectual-property provisions shouldn't be in a proposed U.S.-EU trade deal because they could raise health-care costs, limit free speech and restrict access to education materials, Washington-based consumer group Public Citizen said in a March 18 statement joined by other organizations.

Invention of the Day: Egyption Water Clock.

The Ctesibius clock was powered by water falling from a full tank through a pipe to an open cylinder. The cylinder had a floating piston with a rack that moved a pinion with a hand-shaped indicator that turned and pointed to the hour signs.
Ctesibius’s main improvement over previous water clocks was his adaptation to Egyptian hours, which were of a different duration according to whether it was day or night. This adaptation was achieved by a cone-shaped device to limit the flow to the cylinder, together with a pipe for discarding excess water. The disadvantage of the system was that the clock needed two manual adjustments every day, namely one in the morning and one in the evening.

 

Source: A Brief Illustrated History of Machines and Mechanisms, 2010.

Although both Egyptian day and night had 12 hours each (see picture above), the duration of a day-hour was different from a night-hour. It would be interesting to discuss with students why Egyptians  used a time system so different from ours.

tags: invention, problem, discussion, innovation

(BN) Next Facebook May Be Chinese as Sites Innovate, Not Copy

(Bloomberg )Instagram, the photo-sharing app bought by Facebook Inc. (FB) last year, offers special effects that can give pictures a weathered black-and-white cast or retro tints. In Beijing, Xu Chaojun's PaPa app does that, too. In addition, it lets users attach voice messages that can sound like robots or cats.

PaPa notched 10 million downloads in five months from iPhone and Android users and the company released an English- language version, Wave, on Apple Inc. (AAP)'s iTunes on March 10.

Chinese Internet companies, such as Alibaba.com Ltd. (1688), have been dismissed as imitators of successful U.S. enterprises like EBay Inc (EBAY) (EBAY). Some have been content to profit from their vast home market. Yet Xu's firm and others aim to compete globally and many Chinese entrepreneurs are improving on the Western products that inspired them, said Kai-Fu Lee, the former head of Google Inc. (GOOG)'s China operation and founder of venture capital fund Innovation Works.

"Innovation, if it's defined as inventing the light bulb, might still be a stretch for China," said Lee, who helped fund PaPa. "To be the first to conceive of the next iPhone may be still a little difficult, but the prospect of making a Facebook, a Twitter or an Instagram, I think that is now, for the first time ever, within reach for the Chinese startup."

Success Stories

The companies Lee says are closest to that kind of success -- two years away, he predicts -- aren't exactly startups. He points to WeChat, an instant-message app with 300 million users that's owned by Tencent Holdings Ltd. (700), and Weibo, a Twitter-like microblog with more than 500 million registered accounts, run by Sina Corp. (SINA) Tencent is China's largest Internet company by market value, and Sina is listed on the Nasdaq.

China's early Internet companies like Alibaba learned "a lot" from western companies like EBay, Lee said. Alibaba didn't simply copy any foreign model and came up with its own solutions like payment escrow services to address a lack of consumer credit cards in China, said John Spelich, an Alibaba spokesman.

Innovation Works, founded in September 2009, manages $500 million in assets, including funding from YouTube co-founder Steve Chen and Foxconn Technology Group. The fund is based in the Zhongguancun district of northwestern Beijing, China's equivalent of Silicon Valley. So far, Lee's invested in roughly 50 companies, with a goal of five success stories a year.

While Instagram is available in the country, through app stores including China Mobile Ltd (941).'s Mobile Market, Facebook isn't. The Menlo Park, California-based social network, along with Twitter and Google Inc (GOOG).'s YouTube, are censored and blocked from local users.

Instagram hasn't caught on in China because it was missing a key ingredient for local tastes, which was voice, said PaPa's Xu.

'Crowded Environment'

"Chinese people like to use their voices," Xu said. "You go to a Chinese restaurant and it's very noisy. You go to an American restaurant and it's very quiet. We live in a crowded environment so we are used to noise. We like noise."

Intel Corp (INTC).'s venture fund, Intel Capital, has invested about $670 million in more than 100 Chinese technology companies since 1998. Richard Hsu, managing director of Intel Capital China, said many of the roughly 40 companies in his portfolio have had to develop new business models to succeed.

Shanghai-based Uucun, which helps set up and run app stores for more than 300 smartphone makers, gives away its products, making money from ads and promotions embedded in the apps. The ads reach 30 million users and the company has attracted more than $10 million in investment from firms including Intel Capital and Vickers Capital, Uucun Chief Executive Officer Zhang Zhendong said.

Financing Access

China added 51 million Internet users last year, bringing its total to 564 million. In a speech on March 4, President Xi Jinping urged "boosting innovation-powered development in order to make China an economic heavyweight." Yet censorship by the government hampers entrepreneurs and keeps China from taking "its rightful place in terms of innovation," said Duncan Clark, chairman of BDA China, a technology consulting company.

Another problem: reduced access to financing abroad. The number of Chinese initial public offerings in the U.S. last year declined to three, less than one-tenth the peak in 2010, as allegations of accounting fraud weakened investor demand.

Still, China has become "a fast-paced entrepreneurial launchpad," Clark said.

PaPa's Xu, 33, said he and Li Xiaobao, 24, finished the first version of their photo- and audio-sharer a month after conception. Xu estimated that PaPa will hit 50 million users this year and 200 million within three years. That would outpace Instagram, which reached 100 million users in February, almost two and a half years after its introduction.

PaPa, a 30-employee company based in a reclaimed Mao-era factory, has raised more than $10 million from firms including Innovation Works and Sequoia Capital. It's already sold its first paid advertisements and Xu said it'll do even better once he hires a sales team.

Yet he's resisting urges to attempt an IPO.

"PaPa now is only at the start of our ambition," he said.

(BN) Cisco, Nikon, Redskins, Google: Intellectual Property

(Bloomberg ) Cisco Systems Inc. (CSCO), the world's largest maker of networking equipment, must pay patent-licenser XpertUniverse Inc. $70 million in civil fraud damages in connection with a failed partnership, a federal jury decided.

After a two-week trial, the jury of six women and two men in federal court in Wilmington, Delaware, also decided Cisco infringed two patents for contacting experts online to answer questions and owes more than $33,000 on those counts. In dispute were patents 7,366,709 and 7,499,903.

XpertUniverse, based in New York, sued San Jose, California-based Cisco in 2009, contending officials strung it along for more than six months, holding out the possibility of a lucrative partnership, without revealing that Cisco had rejected the deal.

Alleging "fraudulent concealment," XpertUniverse lawyer Charles Cantine told jurors Cisco's actions "led to destruction of the company," when it might have pursued potentially more- profitable alliances and survived.

Cisco's lawyer, Brett Schuman, told the jury that XpertUniverse "never had a product, customers or revenue," that Cisco was at first interested in a partnership and backed out after realizing the only result of the smaller company's research was "a demo" for a future product.

Schuman told the jury "mismanagement" and "lack of leadership" caused XpertUniverse's failure.

"XpertUniverse is a small company with intellectual property as its primary asset," it said in court papers. The software-development firm was founded in the 1990s by Ukrainian immigrant Victor Friedman as Homework911 to help schoolchildren. It changed its name as it switched to the richer corporate call- center market, Friedman testified when the trial began March 12.

Cantine said his client was "very happy that Friedman and the company were vindicated."

"We are surprised and extremely disappointed with the jury's verdict," Kristin Carvell, a Cisco spokeswoman, said Friday in an e-mailed statement. "We are confident that Cisco's conduct was appropriate throughout our relationship with XpertUniverse."

She said that Cisco didn't believe "the evidence presented at trial supports this verdict," and that the company may appeal.

The case is XpertUniverse Inc. v. Cisco Systems Inc., 09- cv-00157, U.S. District Court, District of Delaware (Wilmington).

Nikon LCD Patent Suit Brought by Anvik Revived by Appeals Court

Nikon Corp. (7731), Samsung Electronics Co. and other makers of electronics using liquid crystal displays must face a revived patent-infringement suit brought by Anvik Corp., a U.S. appeals court ruled Friday.

A lower court had ruled the three Anvik patents invalid for failing to describe the best way of emulating the inventions. The U.S. Court of Appeals for the Federal Circuit in Washington said there "remain disputed issues of material fact" on that issue, so remanded the case for further proceedings. The court's opinion was posted on its website.

Other companies named in the suit by Anvik included AU Optronics, Sharp Corp., LG Electronics Inc. (066570) and Chi Mei Optoelectronics Corp.

Anvik filed the first case in the series in March 2005. That case is Anvik Corp. v. Nikon Precision Inc., 1:05-cv-09891- AKH-LMS, U.S. District Court, Southern District of New York. The appeal is Anvik Corp. v. Nikon Precision Inc., 12-1320, U.S. Court of Appeals for the Federal Circuit.

Trademark

'Redskins' Trademark Cancellation Bill Sent to Congress

A non-voting delegate to the U.S. Congress has authored a bill that would cancel all trademark registrations for "Redskins."

Representative Eni Faleomavaega, an American Samoa Democrat, wrote H.R. 1278, which would amend the Trademark Act of 1946 regarding "the disparagement of Native American persons or peoples through marks that use the term 'redskin,' and for other purposes."

The measure has been referred to the House Committee on the Judiciary. The bill's introduction follows a hearing before a board at the U.S. Patent and Trademark Office March 7 at which a group of American Indians argued for the cancellation of the mark, which is used by Washington's National Football League team.

According to the patent office database, a number of the team's trademarks were at issue at this hearing, including "Redskinettes," "the Redskins," and "Washington Redskins."

The team has argued in its filings that the name was intended to honor American Indians, an honor that some representatives of various native groups find dubious.

In February, a symposium -- Racist Stereotypes and Cultural Appropriation in American Sports -- was held at the National Museum of the American Indian in Washington. The Washington Post reported that Robert Holden, deputy director of the National Congress of American Indians, said "Honors like that we don't need."

Rival Golf Club Will Oppose 'St. Andrews' Trademark Application

The director of a golf-course development in Scotland has characterized St. Andrews Links Trust's application to register "St. Andrews" as a trademark as farcical and arrogant, the U.K.'s Courier newspaper reported.

Ewan McKay, director of St. Andrews International Golf Club told the Courier his company will file objections to the registration for fear of possible restrictions to the name of his club.

McKay said the trust can't claim sole credit for the fame of St. Andrews in the golf world, according to the Courier.

Copyright

Google Clash With Publishers Pivots on Meaning of Snippet

As German authorities consider the exact definition of a snippet -- the short text from a website that's displayed alongside links in search results -- Google Inc. (GOOG) and other online aggregators in Europe face a potential squeeze on their profits in the region.

A landmark copyright bill that would allow publishers to charge for such online uses of their material is working its way through Germany's legislature and is being closely watched by neighboring countries. Although it's been watered down during its legislative journey, the bill may still leave room for a judge to side with publishers and allow them to charge for significant use of news articles, including in search.

The legislation, part of Chancellor Angela Merkel's coalition platform, pits Google against media conglomerates, such as Axel Springer AG (SPR), publisher of Die Welt and Bild, and Hubert Burda Media Holding GmbH & Co., which specializes in fashion and lifestyle magazines. It's seen by both Google and European media companies as a vital front in the search giant's battle with European newspapers.

The bill could allow publishers to form a royalty collection group for newspaper snippets -- akin to ASCAP (the American Society of Composers, Authors & Publishers) for journalism -- and gain leverage with Google, which has more than 85 percent of the search market in Germany.

Google's sales in the U.K., the only European market where the company breaks out revenue, rose 23 percent to $1.3 billion in the three months through December, more than Axel Springer's total revenue that quarter. Google shares have jumped about 15 percent this year, compared with 13 percent gain for French publisher Lagardere SCA (MMB) and a 6.2 percent increase at Axel Springer.

The search-engine operator notched an important victory days before the bill passed out of the German lower house on March 1, winning an exemption for "individual words or the smallest excerpts of text."

"Although the law creates some uncertainty," said Ralf Bremer, a Google spokesman in Germany, "we believe it makes clear that regular snippets remain legal."

Axel Springer public affairs head Christoph Keese said aggregators will still need permission to use text beyond headlines, and should the issue go to court, "we feel comfortable with what the legislative intent established."

Rihanna Costing 49% More as Australia Probes Apple Pricing

Rihanna's album "Unapologetic" is 49 percent more expensive to buy from iTunes in Australia than the U.S., prompting the nation's parliament to summon content owners including Apple Inc. (AAPL) and other technology companies to explain how they set prices.

Microsoft Corp. (MSFT) and Adobe Systems Inc. (ADBE) also were called by Australian lawmakers on threat of contempt proceedings to appear at a hearing today in Canberra. The companies previously declined to appear before the committee, Chairman Nick Champion said in an October speech.

Software and hardware products in Australia sell for a median 50 percent more than their U.S. equivalents, according to a 2012 survey of 186 songs, games, programs and computers by Choice, a not-for-profit consumer advocacy group. Companies could face restrictions on their ability to set prices in Australia under measures being considered by lawmakers.

"There's been price discrimination against Australian consumers," said Matthew Rimmer, a professor at Australian National University in Canberra, who specializes in copyright law. "If the distribution is digital, why are the prices so much higher?"

Rihanna's album costs A$22.99 ($23.98) in the Australian iTunes store, compared with the $15.99 that fans in the U.S. pay. Bruno Mars's "Unorthodox Jukebox," in the Top 10 of both nation's charts, costs 42 percent more.

Downloads of Microsoft's Office Professional 2013 software package cost A$599 in Australia, about 50 percent above the $399.99 charged in the company's U.S. Web store.

"We would love to see lower prices for content in the Australian store," Tony King, managing director of Apple's Australia unit, said at the committee hearing in the capital Canberra today. "We would urge the committee to talk to those folks who own the content."

The biggest difference in prices for music and films was due to the wholesale price set by music labels and film and television studios, he said.

Customers "will vote with their wallets" and buy alternative products if prices are too high, Pip Marlow, managing director of Microsoft's Australia division, told the committee.

Different packaging distinguished products sold in Australia from those sold elsewhere, Adobe's Australian managing director Paul Robson said.

"I'd consider a box that has different writing on it to be materially different," he said.

Sales taxes, different labor and rental costs, marketing spending and the decisions of third-party resellers can all cause Australian prices to be higher, Redmond, Washington-based Microsoft said in its filing to the committee. Even download sites incur costs for maintenance and support, the company said.

The strength of the Australian dollar has increased the contrast between local and international prices for software, music and entertainment.

Trade Secrets/Industrial Espionage

Telenor Target of Large-Scale Cyber Attack; Military Alerted

Telenor ASA (TEL), the Scandinavian region's largest phone operator, was the target of a large-scale industrial espionage attack, TechWorld reported.

The attacks were of sufficient severity that Norway's national emergency response team and Cyberforsvaret -- the nation's cyber-attack defense force -- were put on alert, according to TechWorld. The company, which hasn't revealed what has been stolen, said it became aware of the problem when it observed suspicious traffic from individual employees' computers to external destinations, TechWorld reported.

The attack was believed to have been initiated through links that installed what are known as "Trojans," that then stole filed and emails, according to TechWorld.

(BN) Chinese Hacking Is Made in the U.S.A.

(Bloomberg)  Ten years ago, while visiting International Business Machines Corp. (IBM)'s software-research lab in Beijing, I observed dozens of Chinese employees moving about seemingly free of any security-related limitations. I asked the lab's manager two questions: 

"Do you have any way of knowing whether any of your Chinese staff is also working for the Chinese government?

"Do you have any way of knowing whether any of your Chinese staff is a spy?"

The manager unhesitatingly answered "No" to both. He hastily added, "But you can be sure that we at IBM work very hard to protect our core intellectual property."

This episode could occur at any of the many U.S. corporate facilities in China. It highlights an underreported feature of recent cyberattacks: Much of China's hacking power was Made by the U.S.A.

For decades, U.S.-owned technology giants have set up state-of-the-art factories, laboratories and training programs in China. Their aim was to use a super-cheap, lightly regulated production base to supply Chinese and world markets, and to harness Chinese scientific talent. Greater profits were the top priority, but the companies also claimed that a more computer- and Internet-savvy China would become more peaceful and democratic.

Access Price

Chinese authorities demanded some technology as the price of access to their market. Yet most transfers were made voluntarily to Chinese partners. China's hacking prowess makes clear that, as critics warned, the government and military benefited from widespread sharing of know-how directly applicable to spying, sabotage and theft of business secrets.

Paradoxically, the first known victims of China's U.S.- enabled cybercapacities were Chinese citizens. These include dissidents who were tracked with technology sold by Cisco Systems Inc. (CSCO) and Yahoo! Inc. (YHOO) (YHOO), as well as ordinary people whose online content has been censored with products provided by Microsoft Corp (MSFT) (MSFT). and Google Inc (GOOG) (GOOG).

Those four companies, and many others, still supply official Chinese customers with capabilities easily used against U.S. government or business targets. (Google itself has repeatedly complained about attacks from China-based hackers.) These companies also continue to strengthen the technology base of a nation designated by the Defense Department as the greatest potential foreign threat to U.S. security.

Cisco, for example, says that its goals include maintaining "close relationships with government" and notes that the regime's "good will" is important for operations, "enforcement," sales and policy. IBM touts its capacity to "improve the way government" works, "solve problems and challenges in public administration," and aid China's "drive to build a harmonious society." Intel Corp. (INTC) says its mission includes "strategic technology collaborations" with the government. Microsoft considers itself "a partner in developing the local IT ecosystem with the Chinese government."

Like IBM, companies such as Cisco, Hewlett-Packard Co. (HPQ), Intel, Google, Microsoft, Oracle Corp. and Yahoo have established large research centers in China. Thousands of engineers are working to develop capabilities that could easily be drafted for cyberwarfare.

Innovation Center

IBM also runs a China-based Global Rail Innovation Center that "focuses on every aspect of modern rail systems, such as track surveillance and infrastructure." Undoubtedly, that knowledge could help disrupt U.S. transportation networks. IBM also has sold a wide range of advanced hardware and software to Huawei Technologies Co., whose reported extensive ties with the Chinese government and military led the House Intelligence Committee to brand it a national security threat.

Finally, U.S.-owned companies have nurtured Chinese talent. As of 2010, Cisco was on track to build 300 of its acclaimed Networking Academies to train 100,000 Chinese students, and planned to use its curriculum to build 35 Model Software Colleges with the Education Ministry. IBM has created partnerships with more than 60 Chinese universities, and Intel is working with Chinese schools to develop their "research program and talent pool." Texas Instruments Inc (TXN).'s worldwide Leadership University includes two leading Chinese technical institutions.

Google's China University Relations program has forged ties with at least 15 Chinese institutions. Microsoft has established research partnerships with more than 30 Chinese universities focused partly on "talent development" and programs that have trained, among others, more than 1,000 doctorate holders.

President Barack Obama's new cyberdefense program can help safeguard U.S. security and commercial secrets. But its effects will be limited if American companies continue to shower China with hacking-related know-how. Significant new restrictions must replace today's failed security controls.

Companies will complain about lost business opportunities. The U.S. should solicit the cooperation of other trade partners in limiting China's technology access. But even simply curbing the availability of America's world-leading capabilities would enhance U.S. security. And the White House should tell allies that efforts to take advantage of the limits on U.S. exports will be treated as unfriendly acts.

Before China's cyberoffensive, U.S. companies could legitimately argue that they, and America, would be enriched by technological engagement. The new security threats, however, now trump any plausible economic benefits. Doing business with China can continue. Business as usual can't.

(Alan Tonelson is a research fellow at the U.S. Business and Industry Council, which represents almost 2,000 domestic manufacturing companies. He is the author of "The Race to the Bottom: Why a Worldwide Worker Surplus and Uncontrolled Free Trade Are Sinking American Living Standards." The opinions expressed are his own.)

South Korea's R&D push since 2000

 

Source: The American Association for the Advancement in Science.

South Korea spends the most in the world on R&D (as the percentage of GDP).
China almost tripled its R&D investment since 1995 and caught up with most European countries.  

Invention of the Day: Taxes.

tags: invention, video, economics, history

Growing new body parts.

The March 22 issue of the WSJ reports that biologists have found a working solution to the problem of creating "spare" body parts for transplantation. Before diving into the solution, let's consider the core problem first.

Traditionally, doctors took organs from healthy donors (live or recently dead) and used them to replace failed organs in their patients. The method had (and still has) two major problems: 1) high-quality body organs are rare and expensive; 2) other people's organs can be rejected by the patient's immune system.
Although creating biological organs from scratch from the patient's own cells can address both aspects of the problem, such method would be extremely difficult and take a long time. Besides, the vast majority of people don't require transplants during their lives. Therefore, growing organs that nobody needs would be a tremendous waste.

The new solution allows to create one's "own" organs on demand. It uses sanitized cadaver organs as a scaffold that supports the patient's own stem cells that grow around it. (The figure above shows steps involved in building a heart.) As the result, we have an abundant supply of cheap "prototype" organs that in combination with the patient's stem cells have a great chance to be compatible with the host body. The method would probably work for most functional body parts, except the brain.

tags: trade-off, dilemma, problem, solution, biology

(BN) Biogen, HTC, Boston, MIT, Mary Bono: Intellectual Property

(Bloomberg ) Biogen Idec Inc. (BIIB), the fourth- largest U.S. biotechnology company by market value, won a U.S. patent that may guard its experimental multiple sclerosis pill from generic competition for eight more years than anticipated.

The company's patent 8,399,514, which expires in 2028, was issued on an application filed in February 2012 by Weston, Massachusetts-based Biogen, according to the U.S. Patent and Trademark Office's website. The Food and Drug Administration is expected to decide whether to approve the medicine, Tecfidera, by the end of the month.

The drug had been protected by three patents that expire from October 2019 to May 2020, according to Eric Schmidt, a New York-based analyst with Cowen & Co. who estimates Tecfidera could generate $3.2 billion in annual sales in 2017. The drug was tested in doses given twice a day and three times a day, and the patent today covers administration twice daily.

"They have a novel discovery here in that they were first to observe that the lower dose of the drug, maybe somewhat surprisingly, was as active as the high dose," Schmidt said yesterday in a telephone interview. "The burden of proof will be on anyone else to show this patent isn't valid."

Biogen already sells the MS treatments Avonex, given by injection, and Tysabri, administered intravenously. Tecfidera, formerly known as BG-12, would be Biogen's first pill for MS, a disease that affects more than 2.1 million people globally, according to the National Multiple Sclerosis Society.

"The patent for this dosing regimen is recognition of the remarkable innovation Tecfidera represents for the MS community," Biogen Chief Executive Officer George Scangos said in a statement. "The tremendous research investment required to study and validate the patented dosing regimen is an example of innovation that leads to meaningful benefits to patients."

HTC Loses German Patent Suit Over Nokia Battery-Life Patent

HTC Corp. (2498) lost a German lawsuit after a court said it violated Nokia Oyj (NOK) patents for technology that helps save battery life on mobile phones.

The Mannheim court yesterday ruled that it infringed the German part of Nokia's European patent, HTC said in an e-mailed statement. Taoyuan, Taiwan-based HTC said the patent is invalid and it will appeal the decision.

Nokia last year sued HTC, BlackBerry and ViewSonic Corp. in the U.S., U.K. and Germany over 45 patents. The Espoo, Finland- based mobile-phone maker, struggling to reverse a sales slide, settled with BlackBerry in December. A month earlier, HTC reached a global patent settlement with Apple Inc.

"This decision cannot be described as a 'win' for Nokia because it only applies to handsets that are no longer imported into Germany, and newer HTC handsets do not use the accused technology," HTC said. "As Nokia clearly went to great lengths to assert its strongest patents first, we are confident that its non-essential patent portfolio poses little threat to HTC."

Nokia is "pleased with this decision, which confirms the quality of Nokia's patent portfolio," Mark Durrant, a spokesman for the company, said in an e-mailed statement. "HTC must now respect our intellectual property and compete using its own innovations."

HTC said the power-saving technology in the disputed patent is "trivial" and "contributes only a negligible reduction in power consumption."

The company said it will continue to pursue separate lawsuits to invalidate the Nokia patents pending in German and U.K. courts.

For more patent news, click here.

Trademark

Minnesota Lawmakers Considering Ban on 'Trademark Bullying'

The Minnesota legislature is considering a bill that would bar so-called "trademark bullying."

HF 1116 defines trademark bullying as "the practice of a trademark holder using litigation tactics in an attempt to enforce trademark rights beyond a reasonable interpretation of the scope of the rights granted to the trademark holder."

The measure provides for the awarding of attorney fees to the prevailing party in exceptional cases. These would be cases in which a party brings suit for "harassment, malicious, fraudulent or willfully purposes, including trademark bullying,"

If the bill passes and is signed into law, it will go into effect Aug. 1 and will apply to actions arising from incidents occurring on or after that date.

For more trademark news, click here.

Copyright

Rock Band Boston Song Publisher Sues Leader Over Copyrights

A publisher of hit songs by the 1970s rock band Boston, including "More Than a Feeling" and "Don't Look Back," sued the group's leader and songwriter, Tom Scholz, to prevent the termination of his copyrights.

Paul Ahern, the plaintiff, said that Scholz assigned copyrights to the songs he wrote in a 1975 agreement. He claimed that in January Scholz said he planned to terminate those rights, according to a filing yesterday in federal court in New York.

The threat to end the copyrights "casts a pall on the assets of the compositions, diminishes their value and complicates the ability of plaintiffs Next Decade and Ahern to commercially exploit them," his lawyers said in the complaint.

Scholz, a graduate of the Massachusetts Institute of Technology, said that the U.S. Copyright Act of 1976 grants him the authority to terminate Ahern's copyrights, according to the suit. Those rights would end in 2015.

"Tom Scholz filed to reclaim his copyrights, as many artists have done recently," Craig Pinkus, his lawyer, said in an e-mail. "The lawsuit from Mr. Ahern apparently seeks to resolve those rights in court. Mr. Scholz is confident in his legal position."

Ahern, a Florida resident whose publishing firm is Pure Songs, said he employed Scholz in 1975 to write the songs that were included on Boston's first two albums. He seeks a judicial declaration that Scholz has no interest in the copyrights to those songs and that the notice of termination is invalid.

Boston recorded its first albums for Epic Records, a unit of Sony Corp. (6758)'s Sony Music Entertainment. The self-titled debut album sold 17 million copies, according to the Recording Industry Association of America, and the single "More Than a Feeling" reached number five on the Billboard Hot 100. The second album, "Don't Look Back," sold 7 million copies, the RIAA reported, and the single peaked at number four.

The case is Ahern v. Scholz, 1:13-cv-01812, U.S. District Court, Southern District of New York (Manhattan).

MIT Will Release Edited Documents Related to Aaron Swartz Case

The Massachusetts Institute of Technology said it would release edited documents related to the school's role in the prosecution of Aaron Swartz, who killed himself while facing charges that he broke into the university's network to download millions of research articles.

In a letter to the MIT community, President L. Rafael Reif said the information wouldn't include names or information about MIT's computer vulnerabilities. MIT must protect people from "a pattern of harassment and personal threats," he said.

MIT, which prides itself on a commitment to openness, and the Justice Department have faced harsh attacks for their roles in pursuing Swartz, considered a hero by many in the movement to make information available for free.

"At MIT, we believe in openness, and we are not afraid to re-examine our own actions," Reif said. "Openness must be balanced with reasonable concern for privacy and safety."

MIT will release the documents when it issues a report by Professor Hal Abelson on the events leading to Swartz's suicide, Reif said. Swartz, facing as long as 35 years in prison and a $1 million fine, hanged himself in his Brooklyn, New York, apartment on Jan. 11. He was 26.

On March 15, lawyers for Swartz's estate filed a motion in federal court in Boston asking that documents related to the case against Swartz be released to the U.S. Congress and the public. They are asking that the names and titles of all law enforcement personnel and MIT employees in the documents also be released.

In November 2011, a magistrate judge issued a protective order barring disclosure of documents to anyone other than the defense team or potential defense witnesses.

"Public interest in access to these materials in an intelligible form outweighs the limited privacy interest in the names and official titles of the individuals named therein," Swartz's lawyers said in the March 15 motion.

The U.S. Attorney's office in Boston has agreed to the release of documents but seeks to keep private the names of law enforcement people investigating the case and MIT employees, according to the motion.

The case is U.S. v. Swartz, 11-cr-10260, U.S. District Court, District of Massachusetts (Boston).

EBay Wins as High Court Backs 'Gray Market' Discount Goods

The U.S. Supreme Court ruled that publishers and manufacturers can't block imports of copyrighted items made and sold abroad, bolstering the multibillion-dollar "gray market" in a victory for EBay Inc. and discount chains.

The justices, voting 6-3, yesterday threw out a $600,000 jury award assessed against a graduate student who imported John Wiley & Sons Inc.'s textbooks from his native Thailand and sold them in the U.S. for a profit.

The case was one of the top business and consumer cases pending at the court, with implications for sales by Costco Wholesale Corp. and Wal-Mart Stores Inc. as well as on EBay, operator of the world's largest online marketplace.

The gray market is the annual trade in tens of billions of dollars in genuine products outside of their official distribution channels to exploit lower overseas prices. Supporters of the gray market -- retailers, distributors and consumer advocates -- were battling publishers and manufacturers, which say their U.S. sales are being illegally undercut.

Writing for the court, Justice Stephen Breyer said a ruling in favor of Wiley would have subjected retailers to "the disruptive impact of the threat of infringement suits."

Imports of gray market products to the U.S. cost manufacturers as much as $63 billion in sales a year, according to a 2009 Deloitte LLP analysis conducted for Bloomberg. American sales of copyrighted works, including books, music and movies, amount to more than $220 billion a year, Breyer said yesterday, citing retail industry estimates.

"The Supreme Court's ruling is a victory for all American consumers and businesses," EBay said in an e-mailed statement. "The decision protects your right to buy and sell authentic goods, regardless of where they were made."

The Association of American Publishers said the decision undercuts a law designed to let U.S. copyright owners set different prices around the world. The ruling "will discourage the active export of U.S. copyrighted works," Tom Allen, the group's chief executive officer, said in a statement.

Wiley's chief executive officer, Stephen M. Smith, called the ruling "a loss for the U.S. economy, and students and authors in the U.S. and around the world."

The Obama administration backed the copyright owners in both cases.

Bloomberg Press is an imprint of Wiley.

The case is Kirtsaeng v. John Wiley & Sons, 11-697. For more copyright news, click here.

IP Moves

Copyright Term Extension Act Sponsor Joins Lobbying Firm

Mary Bono Mack, the former Republican member of the U.S. Congress who was one of the sponsors of the Copyright Term Extension Act of 1998, has joined FaegreBD Consulting, according to a statement from the Washington-based consulting and lobbying firm.

FaegreBD is a unit of Faegre Baker Daniels LLP, a Minneapolis-based law firm.

She will be a senior vice president, focusing her advocacy and consulting practice on matters related to the entertainment, media and information-technology sectors. She is the widow of the musician Sonny Bono, and is now married to former U.S. Representative Connie Mack IV, a Republican from Florida.

Initially elected to Congress in 1998 after her husband was killed in a skiing accident, she served until her defeat by Democrat Paul Ruiz in the 2012 election. Under federal rules she will be barred from lobbying for one year.

The copyright-extension bill she sponsored is sometimes known as the "Sonny Bono Act," extended the copyright term to the life of the creator plus 70 years. The bill is also nicknamed the "Mickey Mouse Act," because of the extensive support the Walt Disney Co. (DIS) gave the legislation, which ultimately prevented the early Mickey Mouse films from entering the public domain.

(BN) Zynga Ends Requirement for Facebook Login on Web-Based Games

(Bloomberg ) Zynga Inc. (ZNGA) will let users play its Web-based games without having to provide a Facebook Inc. (FB) login, bolstering efforts to reduce its reliance on the world's largest social-networking service.

An updated version of the Zynga.com gaming portal, available to some visitors starting today, will let new users create an account without entering their Facebook name and password, Chief Technology Officer Cadir Lee said today in an interview.

Zynga, the largest maker of games played on Facebook, has struggled as competition has increased and users have shifted toward apps on mobile devices, away from Web-based titles. The company began planning a revamp of Zynga.com last year after renegotiating the terms of its agreement with Facebook, easing requirements for log-ins, payment and advertising, Lee said.

"It's a reflection of the work that we jointly undertook after discussions with Facebook," Lee said. "We both felt like there were some things that just didn't quite work about having an all-Facebook site on a non-Facebook destination."

The new login process could make it easier for Zynga to work with competing social networks including Google Inc. and Twitter Inc., Lee said.

Zynga generates revenue by selling virtual goods within its games -- for example, a gun in "Mafia Wars" or a brick oven in "ChefVille."

The company reported fourth-quarter profit and sales last month that beat analysts' estimates as it cut costs faster than demand fell for virtual goods.

The shares were little changed at $3.35 at the close in New York. The stock has jumped 42 percent this year, compared with an 8.4 percent gain in the Standard & Poor's 500 index.