(BN) Foxconn Workers Would Rather Boost Their Salaries Than Cut Hours

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Foxconn Workers Would Rather Boost Their Salaries Than Cut Hours

March 30 (Bloomberg) -- Foxconn Technology Group workers would rather boost their salaries, bonuses and training before cutting hours or improving conditions, according to an audit of Apple Inc.'s biggest manufacturer.

Current wages aren't sufficient to cover "basic needs," said 64 percent of the more than 35,000 employees surveyed at three Foxconn plants by the Fair Labor Association. When asked which changes they'd make first, 60 percent said they would raise salaries and 42 percent said they would increase bonuses or living allowances.

The average worker is 23 years old and is paid 2,536.85 yuan ($403) a month, the FLA survey found. When asked if they would change working hours and overtime, 72 percent said no. The association said long working hours were among the "most pressing problems," while acknowledging that employees volunteered for extra time to earn more money.

"They've been exceeding the overtime limits," FLA President Auret van Heerden said in an interview with Bloomberg Television. "They exceeded Apple's limits and those of Chinese labor law. This is the key finding, and the key remedial proposal: to get Foxconn down to 49 hours a week, which is the legal limit."

Foxconn Commitment

When asked their opinions about working hours, 48 percent said they were reasonable, 34 percent said they'd like to work more to increase pay and 18 percent said their hours were too long.

About 91 percent said there was no need for more rest days, and 94 percent saw no need to change shift arrangements.

FLA inspectors found at least 50 breaches of Chinese regulations as well as the code of conduct Apple signed when it joined the association in January after deaths of workers at suppliers, the monitoring group said today. Foxconn said it will bring hours in line with legal limits by July 2013 and compensate its more than 1.2 million employees for overtime lost because of the shorter work week.

"We are committed to work with Apple to carry out the remediation program," Foxconn said in a statement. "Our employees are our greatest asset and we are fully committed to ensuring that they have a safe, satisfactory and healthy working environment."

Hiring 'Challenge'

Apple Chief Executive Officer Tim Cook said last month that the company would start releasing data on working hours. In January, it found 84 percent compliance with the 60-hour limit on working hours, based on data collected from 500,000 workers.

That rose to 89 percent compliance in February, when workers averaged 48 hours per week even as the company ramped up production of the new iPad released this month.

The commitment to cut worker hours while keeping pay the same means Foxconn will need to recruit "tens of thousands of extra workers" in the next year, the association said in its report.

"In the long-term, hiring more workers will be a challenge for them to manage as they're already so large," said Taipei- based Vincent Chen of Yuanta Securities Co., the top-ranked analyst covering Hon Hai who recommends investors hold the stock.

The survey found that 20 percent of workers wanted more training and 15 percent wanted a greater voice in factory decisions.

About 53 percent of the workers surveyed said they don't live in company dormitories. About 29 percent said they get a company housing subsidy they consider inadequate, and 20 percent said they get no subsidy.

Concerning worker safety, 57 percent of those surveyed said they had never experienced or witnessed an accident. When asked if safe, healthy working conditions were a reason to stay at Foxconn, 75 percent said no.

About 15 percent of workers surveyed said they are considering leaving the factory in the next two months, while 85 percent said they weren't.

To contact Bloomberg News staff for this story: Edmond Lococo in Beijing at elococo@bloomberg.net Stanley James in Hong Kong at sjames8@bloomberg.net and Susan Li in Hong Kong at sli31@bloomberg.net

To contact the editor responsible for this story: Michael Tighe at mtighe4@bloomberg.net

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(BN) Hynix Submits Initial Proposal to Bid for Bankrupt Japan Chipmaker Elpida

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Hynix Submits Initial Proposal to Bid for Elpida

March 30 (Bloomberg) -- Hynix Semiconductor Inc., the world's second-largest maker of computer memory chips, submitted an initial proposal to bid for Elpida Memory Inc., the Japanese chipmaker that filed for bankruptcy last month.

The South Korean company will decide whether to make a final bid after due diligence, it said in a regulatory filing today. Toshiba Corp. also was considering a bid, a senior executive for the Tokyo-based company said today, asking not to be identified because the discussions are private.

Bidders for Elpida's assets may gain as much as 12 percent of the global market for dynamic random access memory, or DRAM, chips as the Tokyo-based company tries to revive itself after filing for bankruptcy with liabilities of 448 billion yen ($5.5 billion) on Feb. 27. Hynix is trying to narrow the gap with industry leader Samsung Electronics Co. and fend off Micron Technology Inc. as chip prices are damped by slowing PC sales.

"Participating in the initial stage of bidding was a must for Hynix because their competitors are known to be bidding," said Song Myung Sup, a Seoul-based analyst at HI Investment & Securities Co. "They need to be part of the process to assess Elpida's situation more clearly. Also, you need to go in there to have a better idea what competitors are looking for."

Hynix shares dropped 4.1 percent, the most in three months, to close at 29,250 won in Seoul trading, while South Korea's benchmark Kospi index was little changed. Toshiba declined 1.9 percent to 364 yen in Tokyo, while Japan's Nikkei 225 Stock Average lost 0.3 percent.

"The market is disappointed, as the DRAM business requires a lot of money," said Mitsushige Akino, who oversees about $600 million at Ichiyoshi Investment Management Co. in Tokyo.

Falling Prices

Falling chip prices and a stronger yen eroded Elpida's earnings, exacerbating the Tokyo-based company's troubles after it received financial support from the government and lenders in 2009. The chipmaker, whose customers include Apple Inc., was delisted from the Tokyo Stock Exchange on March 28.

DRAM prices plunged to a record low last year after PC shipments missed analyst forecasts. The price of the benchmark DDR3 2-gigabit DRAM declined to a record 71 cents in November, compared with $4.85 on Sept. 1, 2010, amid slowing personal- computer sales, according to DRAMeXchange, Asia's biggest spot market for the chips.

Elpida gained approval on March 23 for President Yukio Sakamoto to lead its revival plan after filing for Japan's biggest bankruptcy in two years. The company plans to submit a restructuring plan by Aug. 21.

Toshiba Investment

Toshiba may invest in Elpida alone or as part of a group, and isn't interested in all of the company's assets, the Toshiba executive said today. Elpida plans to choose a sponsor in May for its revival plan, the executive said.

"If Toshiba comes in and takes Elpida, they can be a serious competitor to Samsung and Hynix," said Brian Park, an analyst at Tong Yang Securities Inc. in Seoul. An investment would give Toshiba DRAM capacity in addition to its current production of NAND flash memory, he said.

Kaori Hiraki, a spokeswoman for Toshiba, declined to comment, and a spokesman for Elpida declined to comment or be named.

Boise, Idaho-based Micron has been in talks with Elpida since the end of last year and is considered a candidate to sponsor the Japanese chipmaker, the Nikkei newspaper reported earlier, without saying where it got the information.

'Worst Case'

Dan Francisco, a spokesman for Micron, declined to comment. Micron President Mark Adams also declined to comment on a possible investment in Elpida in a March 22 interview. The U.S. chipmaker will continue to look at developments in the industry to see if there are investment opportunities "that make sense for shareholders," he said at the time.

"The worst case for Hynix is Micron taking Elpida," Song at HI Investment said. "If Micron is bidding, there has to be some competition to boost bidding prices."

Elpida was formed through the 1999 merger of NEC Corp.'s and Hitachi Ltd.'s memory businesses. Toshiba Corp. announced its withdrawal from the DRAM business in 2001 to focus more on making NAND flash memory chips.

Suwon, South Korea-based Samsung controlled 45 percent of the DRAM market by value in the third quarter, according to Englewood, Colorado-based IHS Inc. Hynix held a 22 percent share, followed by Elpida's 12 percent, the researcher said.

SK Telecom Co., South Korea's largest mobile-phone carrier, completed a payment of 3.37 trillion won ($3 billion) in February to buy 21 percent of Hynix, following an agreement in November. The deal ended a two-year effort by Hynix shareholders to dispose of stakes they gained through a 2001 government-led bailout.

To contact the reporters on this story: Jun Yang in Seoul at jyang180@bloomberg.net Naoko Fujimura in Tokyo at nfujimura@bloomberg.net

To contact the editor responsible for this story: Michael Tighe at mtighe4@bloomberg.net

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(BN) RIM Charts Risky Survival Plan While Opening Door to Sale (2)

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RIM Charts Risky Survival Plan While Opening Door to Sale

March 30 (Bloomberg) -- Research In Motion Ltd., trying to ensure its survival as sales plunge, is charting a risky path of refocusing on business users while weighing strategic changes from licensing its BlackBerry software to selling itself.

Chief Executive Officer Thorsten Heins said yesterday the BlackBerry maker will concentrate on the market it once dominated following a fifth straight quarterly sales shortfall. He also said he would consider a sale of the company, though that is not the "main direction" at the moment.

Heins, who started as CEO in January, is retreating to serve enterprise users and "targeted consumer segments" after failing to stop continued market-share losses to Apple Inc.'s iPhone and devices running Google Inc.'s Android software. That means he's withdrawing from the faster-growing part of the market while trying to ward off Google and Apple's accelerating push into the workplace, fueled by companies allowing employees to bring in their own devices.

RIM "may have lost too much momentum to recover," RBC Capital Markets analyst Mike Abramsky, who cut his price target on the stock today to $13 from $16, said in a note to clients. "We are concerned RIM continues to misread the market."

Jim Balsillie, RIM's former co-CEO, resigned from the board and two other executives departed as part of the overhaul. The Waterloo, Ontario-based company said also it will discontinue giving financial forecasts.

Sale Possible?

RIM rose 4.5 percent to $14.35 at 12:47 p.m. New York time after jumping as much as 5.5 percent. The stock has plummeted 90 percent from its 2008 high and was down 76 percent in the past year before today.

Asked if he would consider selling the company, Heins said that he would have to weigh "any element that we detected during that strategic review that would lead us to consider it" while a sale is "not the main direction" at the moment.

RIM's price-to-earnings ratio, a measure of the stock's affordability, is less than 5, the lowest of its industry peers, according to data compiled by Bloomberg.

"This is an attractive valuation for anyone willing to fix the current strategy," said Pierre Ferragu, an analyst at Sanford C. Bernstein & Co. who rates RIM the equivalent of a hold. An acquisition of RIM "remains a remote but real possibility," he said.

'Substantial Change'

Heins yesterday acknowledged that he was wrong in January when he suggested that RIM didn't need "drastic change."

"The impression I had of RIM at day two of being the CEO is now pretty different from the impression, not the impression, from the facts I know after being 10 weeks the CEO," he said on a conference call. "It is now very clear to me that substantial change is what RIM needs."

While Heins vowed in January to persuade more customers to snap up new Bold, Curve and Torch models, which offer better touch-screen navigation and Web browsing, that isn't happening.

Plunging U.S. sales have left RIM's share of the global smartphone market at 8.2 percent in the fourth quarter, down from 14 percent a year earlier, according to research firm IDC. Apple's share in that period rose to 24 percent from 16 percent.

'Powerful Assets'

U.S. government agencies, oilfield-services provider Halliburton Co. and banks like Standard Chartered Plc have either stopped issuing BlackBerrys or let employees use their own iPhones and Android devices in the past 18 months.

Heins said yesterday that RIM was "late" to acknowledge the bring-your-own trend to the workplace that has contributed to falling sales.

To stop that trend from spreading, RIM needs to do a better job of reminding organizations that it can offer customers a dedicated network and secure servers, said Ted Schadler, an analyst with Forrester Research in Cambridge, Massachusetts. RIM operates data centers around the world through which all BlackBerry e-mails travel, a competitive edge that helped it win over corporate users after it first started offering its service and devices more than a decade ago.

"They need to focus on their strengths," said Schadler. "Those are two extremely powerful assets that they essentially ignored over the last three years while they've been fighting this battle for market share of devices."

Damage Done

Still, that advantage has started to erode as companies have installed technology that has made the use of iPhones and Android devices for corporate purposes more secure. Apple has also won over business users with its market-leading iPad tablet computer, a device which RIM has so far failed to challenge with its BlackBerry PlayBook product.

Because corporate users can increasingly use the devices they want, rather than the ones given to them by their information-technology departments, RIM's strategy of approaching the smartphone market from the enterprise point of view is risky, said Scott Sutherland, an analyst at Wedbush Securities Inc.

"It will be difficult to keep a hold on the enterprise without a major partnership with a more consumer focused company," such as Samsung Electronics Co., said Sutherland, who has the equivalent of a hold rating on RIM. "While the company accepts the fact that it was late to the bring-your-own-device market, we fear that the damage is already done" because it's consumers now driving the enterprise market, not IT managers, he said.

Eyes Wide Open

Heins told analysts on the call that he would consider licensing RIM's planned new BlackBerry 10 operating system to let other handset makers use the software as he focuses the company on businesses rather than the broader consumer market.

"We will strongly invest in enterprise, industrial design, high-end aspirational devices," Heins said. "BlackBerry cannot succeed if we try to be everybody's darling and all things to all people."

RIM's strategy has a chance to succeed, though any recovery is unlikely before the latter part of the year, said Nirav Parikh, senior vice president at Los Angeles-based TCW Group Inc., which manages about $30 billion in equities including RIM shares.

"Whether it turns out to be good or bad depends on how well they do it," Parikh said. "It doesn't change our opinion that there's a couple of difficult quarters ahead."

To contact the reporter on this story: Hugo Miller in Toronto at hugomiller@bloomberg.net

To contact the editor responsible for this story: Ville Heiskanen at vheiskanen@bloomberg.net

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(BN) The Era of Big Box Retail Dominance Is Coming to an End

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The Era of Big Box Retail Dominance Is Coming to an End

March 30 (Bloomberg) -- When Best Buy Co. said yesterday it was closing 50 big stores and opening 100 smaller ones, the world's largest electronics retailer was adjusting to reality: The era of big-box retail dominance is coming to an end.

The new mantra is small box. While Best Buy, Wal-Mart Stores Inc. and Target Corp. are still opening large stores, all are putting increasing emphasis on smaller ones. Best Buy plans to double the number of its smaller Best Buy Mobile stores by 2016. Wal-Mart is building as many as 100 small-format stores this year, while Target is opening five CityTarget locations.

After 50 years of putting mom and pops out of business, big-box retail is having a mid-life crisis. A slow economy has hurt same-store sales, narrowing margins at big stores. Meanwhile, consumers, armed with price-comparison technology, are visiting more stores seeking deals or exclusive merchandise rather than making one-stop, fill-the-cart excursions.

"We're undergoing a seismic shift," said Natalie Berg, an analyst with Planet Retail in London. "People are still cutting back. People are buying more products online so there is a real case for downsizing stores."

Big-box retailers essentially come in two flavors: so- called category killers such as Best Buy that focus on one type of merchandise, and discounters like Wal-Mart and Target, which sell a broader range of goods.

Declining Sales

Since the recession, big-box retailers have struggled. Until its third fiscal quarter last year, Wal-Mart had posted eight consecutive quarters of declining sales at stores open more than 12 months. Best Buy posted five straight quarters of profit decline before reporting a $2.6 billion loss on March 29, while analysts forecast declining same-store sales and profit for Target this year.

Since June 2009, when the recession officially ended, Wal- Mart shares have advanced 26 percent and Best Buy has dropped 28 percent, both trailing the 39 percent gain for the 32-company Standard & Poor's 500 Retailing Index. Target shares gained 48 percent in that time.

Big-box retail was born in 1962. That's the year that Wal- Mart, K-Mart and Target all opened their first large discount stores. As they grew, the new big boxes began offering broad selection and low prices to a growing population of suburbanites who had left the cities in their new cars, searching for their piece of the American Dream.

Big boxes boomed in the go-go 1990s. Fueled by an inflated stock market and loose credit, Americans expanded farther into the suburbs and filled their new homes with appliances and consumer goods, said John Lupo, a retired Wal-Mart executive who now sits on the board of AB Electrolux. The housing boom propelled the big-box retailers into the new millennium. Then came the crash and consumers pulled back.

Conspiring Forces

Other forces are conspiring against the big-box model. Baby Boomers no longer have kids at home and don't need to stock up on food and packaged goods. Their kids are marrying later and delaying having their own children, meaning fewer are buying houses that need to be updated and furnished.

"Right now you have a trough in the need for big-box retail," said Bryan Gildenberg, an analyst with the Cambridge, Massachusetts-based research firm Kantar Retail.

Hence the rush to open smaller stores. By 2016, Richfield, Minnesota-based Best Buy plans to have as many as 800 Mobile Stores, up from 305 now. It's part of Chief Executive Officer Brian Dunn's plan to generate revenue from warranties, accessories and connections between phones, tablets and other electronics.

The increasing emphasis on smaller stores still leaves room for big stores, according to Dunn.

Anytime, Anywhere

"We see those stores as an important part of a network in conjunction with our small-box stores, our online capabilities and our on-phone capabilities that allow customers to reach us anytime, anywhere, anyhow they choose," he said in a telephone interview. "While I don't see this as a decline of the big boxes, the multi-channel approach that we are taking will require less square footage."

Wal-Mart, which is based in Bentonville, Arkansas, is also sticking with big stores. While the company aims to add at least three times as many Neighborhood Markets as in 2011, it plans to add up to 150 supercenters, compared with 122 last year.

"The supercenter is still what works best for us," said Deisha Galberth Barnett, a Wal-Mart spokeswoman. "We will continue to work to grow the presence of supercenters."

Shoppers' stampede online is also hurting big-box chains. The biggest beneficiary of that shift is Amazon.com Inc., which is grabbing market share from Wal-Mart, Best Buy and Target.

Online Purchases

"The biggest challenge for big boxes is increasing consumer confidence in making online purchases," said Matt Arnold, an analyst at Edward Jones & Co. in Des Peres, Missouri, who rates Best Buy and Wal-Mart as buys. "Best Buy is arguably more exposed than the Wal-Marts of the world that are heavy in the food, apparel and consumables category. In the case of consumer electronics, it comes down to price."

If Best Buy and its big-box ilk are to survive, they'll have to evolve and do a better job of integrating their brick- and-mortar locations with their Web stores, Arnold said.

"While big-box retailers are struggling, they aren't going away," Arnold said in a telephone interview. "They are shifting to smaller formats and investing in online retailing."

To contact the reporters on this story: David Welch in Detroit at dwelch12@bloomberg.net Chris Burritt in Greensboro at cburritt@bloomberg.net Lauren Coleman-Lochner in New York at llochner@bloomberg.net

To contact the editor responsible for this story: Robin Ajello at rajello@bloomberg.net

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(BN) Nokia Recruits Vespa Rider to Boost Odds in Chinese Race Against Androids

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Nokia Recruits Vespa Rider in Race Against Androids in China

March 29 (Bloomberg) -- Adam Guli, a 35-year-old social media entrepreneur who commutes across Beijing on a Vespa scooter, is giving Nokia Oyj a ride in its race against Android handsets and Apple Inc.'s iPhone in China.

With a directory of a million restaurants, clubs and other consumer businesses in the country, Guli's Let's Powwow is among content providers Nokia is counting on to attract users in the world's biggest wireless market. Espoo, Finland-based Nokia is paying the two-year-old startup to create a Windows Phone application that Guli says is on a recommended software list as Nokia's Lumia handset made its debut in China.

"We have, I'm quite sure, the largest force of people who work with developers here in China over any of the other ecosystems," Nokia Chief Executive Officer Stephen Elop said yesterday in Beijing, where he unveiled versions of Lumia based on Microsoft Corp.'s software. "We have been focused on making sure the locally relevant applications get a lot of attention."

As many as 140 million smartphones will be sold in China this year, an increase of more than 80 percent, pushing the country past the U.S. as the world's largest market for the devices, according to researcher Gartner Inc. Local directory services integrated with maps are among applications that may give Lumia phones an edge and justify a higher price, particularly in sprawling cities such as Beijing.

'Up For Grabs'

"In China, the game is far from over," said Derek Ling, who runs Tianji, China's biggest professional networking site with 9 million users. "The iPhone is not nearly as dominant in China as it is in the U.S." Apple has been "having difficulty negotiating the right terms with the biggest provider in China, which is China Mobile, so everything is up for grabs."

Nokia yesterday showed versions of Lumia 800 and Lumia 610 to run on China Telecom Corp.'s network. It's also working on phones for networks operated by China Unicom Hong Kong Ltd. and China Mobile Ltd.

Nokia and Microsoft said this week they will offer grants for Windows Phone app startups through Finland's Aalto University. "We're doing the same type of thing here in China," Elop said.

Under the agreement with Let's Powwow, data about restaurants and clubs will be pushed to Nokia's map database for use in other apps, Guli said after an evening ride in Beijing, where his company is based.

Nokia gained access to geographic databases for China when it acquired mapmaker Navteq in 2008.

Dianping, Jiepang

Location-based apps already in the Windows Phone Marketplace include Dianping, a city directory that has coupons and supports check-ins; and check-in service Jiepang.

Jiepang has a new version using Nokia maps that will be exclusive on Lumia phones, said Leo Lee, a spokesman.

Android phonemaker Samsung Electronics Co., working with the three major carriers in China, was the country's leading smartphone supplier in the fourth quarter with a 24.3 percent share, according to Gartner. Nokia was second with 19.6 percent, while Apple had 7.5 percent.

"Nokia faces very stiff high-quality competition including local phone makers who offer a mobile experience plugged into all sorts of services," said Benjamin Joffe, who runs strategy consulting firm Plus Eight Star in Beijing. "So it depends how good an integration they can do with services like social networks and e-commerce."

Renren, Sina

China's biggest social media platforms already support Windows Phone. Renren Inc., a social networking service, is listed on the Windows Phone Marketplace, as is Sina Corp.'s Sina Weibo, a microblogging service, and the QQ instant messaging system from Tencent Holdings Ltd.

Renren and Sina have worked with phone maker HTC Corp. to offer handsets with preloaded apps and in some cases special buttons to access the services, while companies such as Xiaomi Corp., which sells high-end handsets running a customized version of Google Inc.'s Android for less than half the price of an iPhone 4S, aim to make money later on software and services.

Windows Phone integrates social networking with the user's contact list and photos, providing live updates to the screen. With Facebook Inc. and Twitter Inc.'s websites blocked in China, Nokia will need deeper integration with Chinese social networking applications to make the most of the platform's evolving abilities.

Windows Phones from all manufacturers had a 1.9 percent smartphone market share in the fourth quarter, according to Gartner, compared with more than 50 percent for Android and nearly a quarter for the iPhone.

'Last Shot'

"Windows Phone is Nokia's last shot if they want to maintain their smartphone share in China," said C.K. Lu, a Taipei-based analyst with Gartner.

China was still Nokia's biggest market last year, even as revenue for the greater China region, which includes Hong Kong and Taiwan, fell 18 percent as users were attracted to cheap Android smartphones competing against mid-priced Nokia devices.

Nokia will need smartphones priced as low as $150 to compete, Lu said. The company announced the 189-euro ($252) Lumia 610 in February and it is Nokia's cheapest Windows Phone. The price for the China version of the 610 hasn't been revealed.

"Right now both the iPhone and Android have such great momentum and Windows Phone is really swimming upstream and they have a lot to prove," said Ling, who hasn't yet committed to a Windows Phone app. "Ultimately we follow where the users are."

To contact the reporter on this story: Diana ben-Aaron in Helsinki at dbenaaron1@bloomberg.net

To contact the editor responsible for this story: Kenneth Wong at kwong11@bloomberg.net

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(BN) Heart Attack Victims Cut Risk With 2 Drinks, Harvard Study Says

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Heart Attack Victims Cut Risk With 2 Drinks, Harvard Study Says

March 28 (Bloomberg) -- Men who have two drinks a day after surviving a first heart attack have a lower risk of death from heart disease than non-drinkers, Harvard researchers said, adding to evidence that moderate alcohol use may be healthy.

Men who survived a heart attack and who drank two alcoholic drinks a day had a 42 percent lower risk of death from cardiovascular disease and 14 percent lower risk of death from any cause during the study compared with non-drinkers, according to a study led by Jennifer Pai, an assistant professor of medicine at Brigham and Women's Hospital and Harvard Medical School. The study followed 1,818 men for as many as 20 years from the time of their first heart attack.

The results, published today in the European Heart Journal, add to other studies that have observed the positive effects of moderate drinking. People who have one drink or fewer each day are 14 percent to 25 percent less likely to develop heart disease compared with those who don't imbibe, Canadian researchers said last year. Until now, data on whether it can also help heart attack survivors have been limited and conflicting, according to Pai.

Recommended Guidelines

"The findings of our study support the European Society of Cardiology recommended guidelines for long-term management of acute coronary syndromes that moderate alcohol consumption of 10 to 30 grams per day in men should not be discouraged and may be beneficial for long-term prognosis after a heart attack," Pai said in a statement.

Participants who drank between 10 and 29.9 grams (1.1 ounces) of alcohol content were categorized as moderate drinkers. A bottle or can of beer contains 12.8 grams, while a 4-ounce glass of wine has 11 grams of alcohol. Men who drank the most, 30 grams or more a day, had a risk of death from any cause that was similar to that of non-drinkers.

In previous studies, moderate alcohol intake has been associated with increased levels of HDL, or so-called good cholesterol, improved insulin sensitivity and other effects that reduce heart attack risk, Pai said in the study.

Europeans consume more alcohol, about double the global average at 12.5 liters (3.3 gallons) of alcohol content a year, than in any other part of the world, the World Health Organization said yesterday. That amounts to 27 grams of alcohol per day. Consumption is highest in central-eastern and eastern Europe at 14.5 liters a year.

While Pai's study only observed men, associations tend to be similar between chronic disease and lower quantities of alcohol for women, Pai said.

"An association is likely to be observed at five to 14.9 grams per day, or up to a drink a day for women," she said.

The study was funded by the U.S. National Institutes of Health.

To contact the reporter on this story: Makiko Kitamura in London at mkitamura1@bloomberg.net

To contact the editor responsible for this story: Phil Serafino at pserafino@bloomberg.net

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(BN) Symphony Technology Group Finishes $870 Million Private-Equity Fundraising

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Symphony Technology Raises $870 Million Private-Equity Fund

March 27 (Bloomberg) -- Symphony Technology Group, a private-equity firm focused on software and technology services, completed fundraising for a new $870 million investment fund.

As with previous funds, the largest investor is the firm's founder, Romesh Wadhwani, according to a statement today from the Palo Alto, California-based company. It currently has 14 companies in its portfolio.

Symphony acquires large stakes in public and private companies worldwide and then focuses on improving operations and boosting profit margins. The firm started buying shares of Finnish software developer Aldata Solution Oyj in 2007 and now owns about 90 percent of the company. In 2009, it acquired MSC Software Corp., the developer of simulation software for manufacturers.

Before starting Symphony, Wadhwani founded Aspect Development Inc., which was acquired for $5.6 billion in 2000. Before that, he started Cimflex Teknowledge Corp.

To contact the reporter on this story: Ari Levy in San Francisco at alevy5@bloomberg.net

To contact the editor responsible for this story: Tom Giles at tgiles5@bloomberg.net

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(BN) Facebook Says Negative Outcome of Yahoo Patent Lawsuit Could be Material

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Facebook Says Negative Outcome of Yahoo Suit Could be Material

March 27 (Bloomberg) -- Facebook Inc., the social- networking service that plans an initial public offering, said that an unfavorable outcome in a patent dispute with Yahoo! Inc. could have a material impact on its business.

Yahoo sued on March 12, alleging that Facebook products infringe Yahoo patents related to advertising, social networking, privacy, customization and messaging, Menlo Park, California-based Facebook said in a filing today.

"This litigation is still in its early stages," Facebook said in the filing with the U.S. Securities and Exchange Commission. "If an unfavorable outcome were to occur in this litigation, the impact could be material to our business, financial condition, or results of operations."

To contact the reporter on this story: Brian Womack in San Francisco at bwomack1@bloomberg.net

To contact the editor responsible for this story: Tom Giles at tgiles5@bloomberg.net

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(BN) Broccoli Banned by Bush Gets ‘Respect’ in Health-Care Arguments

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Broccoli Banned by Bush Gets 'Respect' in Health-Care Arguments

March 27 (Bloomberg) -- Broccoli, a nutrient-rich vegetable derided by President George H.W. Bush in 1990, regained some respect in Washington during U.S. Supreme Court arguments on the federal health-care law.

The often steamed cultivar, part of the cabbage family, was mentioned eight times today, as Justice Antonin Scalia, Chief Justice John Roberts and Solictor General Donald Verrilli argued about the reach of insurance mandates during a second day of debate on the law pushed by President Barack Obama.

The United Fresh Produce Association, a trade group for the fruit and vegetable industry, welcomed the attention without weighing in on the debate, an issue in the 2012 campaign. Eating more broccoli may lower medical costs because of its wealth of anti-oxidants, abundant Vitamin C and presence of cancer- fighting nutrients such as sulforaphane and diindolylmethane, said Ray Gilmer, a spokesman for the group.

"From banned in the White House to the chambers of the U.S. Supreme Court," he said. "Broccoli is getting respect."

Scalia and Roberts made references to broccoli as they questioned the requirement for consumers to buy insurance or face a tax. Along the same lines, they said food is something everyone has to buy sooner or later. "Therefore, you can make people buy broccoli," Scalia said, challenging the arguments made by the government's lawyer.

Verrilli, defending the law, said health care and broccoli differ because medical services, unlike food, often are needed unpredictably and often involuntarily.

Bush banned the vegetable from Air Force One and the White House in early 1990, telling reporters he disliked the food since he was "a little kid and my mother made me eat it."

"I'm president of the United States, and I'm not going to eat any more broccoli!" he declared on March 22, 1990.

To contact the reporter on this story: Alan Bjerga in Washington at abjerga@bloomberg.net

To contact the editor responsible for this story: Jon Morgan at jmorgan97@bloomberg.net

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(BN) Illumina, Myriad, Apple, Pinterest: Intellectual Property (1)

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Illumina, Myriad, Apple, Pinterest: Intellectual Property (1)

March 27 (Bloomberg) -- Columbia University's trustees sued the biotechnology analysis firm Illumina Inc. and accuse it of infringing five U.S. patents for gene sequencing used in medical research.

Illumina is wrongly using the protected technology, assigned to New York's Columbia, the school said in a complaint filed yesterday in federal court in Wilmington, Delaware.

The patents, awarded since 2009, "are important to ongoing genomics research and discovery, particularly in the emerging field of personalized medicine, which seeks to use a patient's own genomic DNA sequence information as the basis for individualized health care," the university said.

Illumina, based in San Diego, is the subject of a $5.7 billion hostile takeover bid by Switzerland's Roche Holding AG, an offer that expires on April 20, at $44.50 a share.

Columbia asked the court to award damages based on reasonable royalties and for an order to stop the infringement.

"We believe these claims are without merit, and we will defend against them vigorously," Jennifer Temple, an Illumina spokeswoman, said in an e-mailed statement.

The case is Columbia v. Illumina, 1:12-cv-00376, U.S. District Court, District of Delaware (Wilmington).

Myriad's Human-Gene Patent Rehearing Ordered by High Court

The U.S. Supreme Court ordered a lower court to revisit whether human genes can be patented in light of the justices March 20 decision that limited the ability to obtain legal protection for some diagnostic medical tests.

The justices yesterday ordered the U.S. Court of Appeals for the Federal Circuit to reconsider its decision that allowed patents on genetic material used in Myriad Genetics Inc.'s tests for breast and ovarian cancer.

The high court on March 20 said that patents shouldn't be allowed on tests that look at such things as the proper dosage for a medicine based on a body's reaction to a drug. The Federal Circuit, which specializes in U.S. patent law, must consider the effect of that ruling on the Myriad patents.

The March 20 decision involved a dispute between Nestle SA's Prometheus unit and units of the Mayo Clinic and whether certain types of diagnostic tests met the threshold of eligibility for a patent. A June 2010 decision by the Supreme Court also addressed what types of inventions qualify for legal protection.

Myriad said the case doesn't involve all of its patents that cover the screening tests. Still, the company said, it would defend the claims that are the subject of the lawsuit.

The Myriad case pits the biotechnology industry, which supports gene patents, against an array of opponents --including doctors, researchers and patients -- who say gene patents will stifle innovation and improperly permit a monopoly on part of the human body.

The opponent group, whose legal team includes the American Civil Liberties Union, is pressing a test case against Salt Lake City-based Myriad. The company makes tests for the hereditary risk of breast and ovarian cancer.

The central legal issue is whether so-called isolated DNA - - genetic coding that has been removed from the body and separated from other material -- is a product of nature and thus ineligible for patent protection under previous Supreme Court rulings.

In court papers, Myriad has argued that "human intervention" brings isolated DNA within the scope of the U.S. patent laws. The company says the U.S. Patent and Trademark Office has issued 2,645 patents for isolated DNA over the past 30 years.

The case is Association for Molecular Pathology v. Myriad Genetics, 11-725.

Egis Added as Defendant in AstraZeneca-Watson Laboratories Case

Egis Gyogyszergyar Nyrt, the Hungarian drugmaker owned by Laboratoires Servier, was added as a defendant in a 2010 U.S. patent litigation case between plaintiff AstraZeneca Plc and defendant Watson Laboratories Inc.

The case involved AstraZeneca's patented technology for its cholesterol-lowering drug Crestor. In dispute is AstraZeneca's patent RE37,314.

"Egis will vigorously defend the claims against it and further informs its business partners that the complaint does not seek a monetary damage award against Egis," the Budapest- based company said in a statement to the Budapest bourse.

The case is AstraZeneca UK Ltd. v. Watson Pharmaceuticals Inc., 1:10-cv-00915-LPS, U.S. District Court, District of Delaware (Wilmington).

3M Wins Right to Challenge Avery Dennison Road Sign Patents

3M Co.'s patent suit against Avery Dennison Corp. was improperly dismissed, a federal appeals court said yesterday.

The suit was part of a series of patent cases between the two companies related to reflecting sheeting for road signs. St. Paul, Minnesota-based 3M filed the suit in federal court in September 2010, seeking a declaration it didn't infringe some of Avery Dennison's patents.

The Washington-based U.S. Court of Appeals for the Federal Circuit, which hears appeals of patent cases, said the trial judge erred by dismissing the suit.

The appeals court said trial judge erred by saying the controversy between the two companies hadn't yet reached the point at which litigation was appropriate and by dismissing the case.

According to court papers, a lawyer for Pasadena, California-based Avery told a 3M lawyer in 2009 that 3M's DiamondGrade DG product line "may infringe" its patents, and that "licenses are available." 3M filed the suit in response.

Although Avery had argued that discussion alone wasn't enough to warrant the suit to challenge patents, the appeals court said the trial judge should consider the issue.

John A. Dragseth of Boston's Fish & Richardson PC argued the case for 3M. Avery's case was argued by David L. Bilsker of Los Angeles-based Quinn Emanuel Urquhart & Sullivan LLP.

The lower court case is 3M Co. v. Avery Dennison Corp. 0:10-cv-03849-MJD-FLN, U.S. District Court, District of Minnesota (Minneapolis). The appeal is 3M Co. v. Avery Dennis Corp, 11-01339, U.S. Court Of Appeals for the Federal Circuit (Washington).

For more patent news, click here.

Trademark

Tougher China Trademark Laws Might Have Hurt Apple's IPad Fight

China is proposing improvements to its 30-year-old trademark law that help household names from abroad better protect their rights. Apple Inc., in its dispute over the iPad name, might be better off without the reforms.

Government proposals for tackling "the rampant problem of trademark squatting" include doubling the maximum damages for infringers to 1 million yuan ($158,539). Since a court already ruled that Apple doesn't own the iPad name in China, the company would be on the wrong side of the sanctions, said Caroline Berube, an intellectual property lawyer in the southern Chinese city of Guangzhou.

The Apple case "is another example of why multinationals need to do their diligence and tread cautiously in China as domestic companies have become much more savvy about protecting and exploiting IP rights," Steve Rizzi, the former head of the China practice for Milwaukee-based Foley & Lardner LLP, said in an e-mail.

Apple's appeal that it, and not Hong Kong-listed display maker Proview International Holdings Ltd., owns the iPad name in China will hinge on contract law rather than trademark law, the lawyers said. A decision from a Guangzhou court is due by the end of May, and the new trademark law won't be voted on until next year's national legislature at the earliest, said Berube, of HJM Asia Law & Co.

Apple, which won a lawsuit against Shenzhen-based New Apple Concept Daily Technology Co. in 2008 for using an apple in its logo, started its legal battle with Proview in 2010, the same year it introduced the iPad tablet. A court in Shenzhen, across the border from Hong Kong, ruled against Apple last year, saying the purchase agreement for the trademarks featured the wrong Proview unit.

"As a company that generates a lot of intellectual property we would never knowingly abuse someone else's trademarks," Carolyn Wu, Apple's Beijing-based spokeswoman, said in a statement. She declined to comment on the proposed laws and how they would have affected the iPad case.

The Cupertino, California-based company argued that at least three employees of the Proview unit owning the trademarks had participated in negotiations leading to the sale.

Separately, Apple has sued Proview founder Rowell Yang in Hong Kong for conspiring with his companies to breach the sale agreement. That case is in the pre-trial phase.

For more trademark news, click here.

Copyright

Pinterest Revises Use Terms, Says It Won't Sell Users' Content

Pinterest, the Palo Alto, California-based social media company that provides a venue for users to share information about items of interest, has changed its terms of use to clarify the rights of users to the content they post.

In a March 23 blog posting, Pinterest said its original terms of use agreement allowed the company to sell content posted by users. The company said that "selling content was never our intention and we removed this from our updated terms."

Pinterest said it has developed "simpler tools" for anyone to report copyright or trademark infringement. And in wake of concerns about pro-anorexia "thinspiration" postings made by some, Pinterest said it won't allow postings "that explicitly encourage self-harm or self-abuse."

For copyright news, click here.

IP Moves

Former Righthaven CEO Steven Gibson Moves to Dickinson Wright

Dickinson Wright PLLC now has former Righthaven LLC chief executive officer listed as a partner, according to the Detroit- based firm's website.

Steven A. Gibson led Las Vegas-based Righthaven, which was formed to enforce copyrights for newspapers owned by Las Vegas- based Stephens Media Group. Although Righthaven filed about 200 copyright-infringement cases in 2010, courts generally took a dim view, finding that Stephens still retained control over some aspects of the copyright, and therefore that Righthaven lacked standing to sue.

According to his biography listed on the Dickinson Wright website, Gibson has represented media, software-development and gaming/casino companies in intellectual property and technology- related disputes. Before he was with Righthaven, Gibson practiced law in Japan and with Chicago's Sidley Austin LLP.

Gibson has an undergraduate degree from the University of Louisville and a law degree from Chicago-Kent College of Law.

To contact the reporter on this story: Victoria Slind-Flor in Oakland, California, at vslindflor@bloomberg.net.

To contact the editor responsible for this story: Michael Hytha at mhytha@bloomberg.net.

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(BN) On Track Innovations Sues T-Mobile Over Phone-Payment Patent (1)

Bloomberg News, sent from my iPhone.

On Track Innovations Sues T-Mobile Over Phone-Payment Patent (1)

March 27 (Bloomberg) -- On Track Innovations Ltd., a developer of digital payment technology, sued Deutsche Telekom AG's T-Mobile USA for allegedly infringing a patent for mobile transactions.

On Track Innovations said T-Mobile infringed a patent that lets mobile-phone users make payments, mine data and run other applications, according to the complaint filed yesterday in federal court in Manhattan.

"We believe in the strength and value of our intellectual property and have the resources to protect it," Oded Bashan, chief executive officer of Rosh Pina, Israel-based On Track Innovations, said in a statement.

The complaint describes the patent, registered in April 2000, as "a data transaction card having contact and contactless modes of operation." On Track Innovations claims that T-Mobile has been selling devices such as the HTC Amaze 4G and Nokia Astound that employ the data transaction patent.

"T-Mobile does not provide comment on pending litigation," Anna Friedges, a spokeswoman for the Bellevue, Washington-based company, said in an e-mail.

On Track Innovations rose 18 cents, or 12 percent, to $1.64 at 3:41 p.m. in New York. The shares had risen 25 percent this year before today.

The case is On Track Innovations Ltd. v. T-Mobile USA, 12-2224, U.S. District Court, Southern District of New York (Manhattan).

To contact the reporter on this story: Don Jeffrey in New York at djeffrey1@bloomberg.net

To contact the editor responsible for this story: Michael Hytha at mhytha@bloomberg.net

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(BN) Vestas Remains Top Wind Turbine Maker, Goldwind Is Second

Bloomberg News, sent from my iPhone.

Vestas Remains Top Wind Turbine Maker, Goldwind Is Second

March 26 (Bloomberg) -- The wind-power market is expected to grow more slowly than prior estimates, with Make Consulting and Navigant Consulting Inc. cutting forecasts through 2016.

Global installations will probably increase at a compound 7 percent a year in the next five years, Aarhus, Denmark-based Make said today in an e-mailed statement, down from its prior 10 percent figure. Navigant's BTM Consult unit cut its cumulative forecast for the five years through 2016 14 percent to almost 270,000 megawatts of turbines.

Turbine makers from Vestas Wind Systems A/S, the biggest, to Spain's Gamesa Corp. Tecnologica SA and India's Suzlon Energy Ltd. have been buffeted by the loss of subsidies in three of the seven biggest markets. In the U.S., a cash-grant program ended last year and a tax credit expires in December, while Spain suspended clean-energy incentives in January and an Indian tax break for wind farms is set to expire on March 31.

"The reasons for the downgrade are regulatory uncertainty in the U.S., India and Spain," Robert Clover, an analyst with Make, said today in a phone interview. In North America, the expiring U.S. incentives led to "a certain amount of demand being pulled forward, which will lead to a drop-off next year."

BTM forecast delays in extending or replacing the U.S. tax credit will cut 2013 installations by about 9 percent to 7,500 megawatts, said Aris Karcanias, one of the report's authors.

"We're anticipating an extension," Karcanias said today in an interview. "There will be a bit of a delay to activity in the U.S. until that's resolved."

Vestas on Top

Spain, which in 2009 was the top wind turbine installer in Europe, according to Global Wind Energy Council data, this year suspended subsidies to new renewable installations as it reins in spending. The European share of new wind power fell last year to 24.5 percent of the global total from more than half five years ago, according to BTM.

Vestas remained the world's largest wind turbine maker with 12.9 percent of the market in 2011, BTM said. It topped Xinjiang Goldwind Science & Technology Co. with a 9.4 percent share. General Electric Co. was third with 8.8 percent, Gamesa was next at 8.2 percent and Enercon GmbH ranked fifth at 7.9 percent, Ringkoebing, Denmark-based BTM said today in an e-mailed statement. Sinovel Wind Group dropped to seventh from second.

To contact the reporter on this story: Alex Morales in London at amorales2@bloomberg.net .

To contact the editor responsible for this story: Reed Landberg at landberg@bloomberg.net .

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(BN) Eating Chocolate Regularly May Make You Leaner, Survey Suggests

Bloomberg News, sent from my iPhone.

Eating Chocolate Regularly May Make You Leaner, Survey Suggests

March 26 (Bloomberg) -- A survey of about 1,000 Americans that suggests eating chocolate may help people get leaner deserves to be followed up with more study, according to a California-based researcher.

The survey found that those who ate chocolate about five times a week had a body mass index one point lower than those who didn't indulge, Beatrice Golomb, at the University of California, San Diego, wrote in a letter published in the Archives of Internal Medicine.

For someone who weighs 120 pounds and is 5 feet tall, one BMI point translates to about 5 pounds, Golomb said in a telephone interview. The report, the first to tie chocolate consumption to lower body mass index, doesn't say how much or what type of chocolate was eaten, nor does it control for diet and exercise, opening the way for more research.

While not definitive, the survey "does pose a very interesting question that researchers can jump on," said Nancy Copperman, director of Public Health Initiatives at North Shore- LIJ Health System in Great Neck, New York, who wasn't involved with the survey. "Lowering of BMI wasn't related to how much they ate but frequency."

The survey results suggest researchers looking at diet should consider the types, rather than number, of calories people are eating as foods such as cinnamon and chocolate are found to provide possible health benefits, said Golomb, an associate professor of family and preventive medicine at the university's School of Medicine.

"Chocolate has already shown favorable associations to heart disease, all-cause mortality, blood pressure and even cavities," she said "If you're eating a couple of squares of chocolate a number of times a week, it's probably just fine. Typically chocolate is consumed as a sweet and should have adverse applications for body mass index. In fact, it's the converse," according to the survey.

1,000 Surveyed

The researcher surveyed more than 1,000 men and women who didn't have any known heart disease or diabetes. Of those, 972 had their BMI calculated and 975 filled out a food frequency questionnaire. The relationship between chocolate and body mass index was true, even though those who ate chocolate actually consumed more calories, Golomb's letter said.

Golomb said a study where some people eat chocolate and some don't that controls for diet and exercise is needed to shore up the suggested link.

Based on previous research, Copperman said about 1 ounce of dark chocolate, the equivalent of one McLean, Virginia-based Mars Inc.'s Dove dark chocolate square, is fine to consume each day. People can also sprinkle cocoa powder on foods like oatmeal or fruit to get benefits of chocolate without the fat, she said.

The survey was funded by the U.S. National Institutes of Health.

To contact the reporter on this story: Nicole Ostrow in New York at nostrow1@bloomberg.net

To contact the editor responsible for this story: Reg Gale at rgale5@bloomberg.net

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(BN) Tougher China Trademark Laws Might Have Hurt Apple in Its IPad Legal Fight

Bloomberg News, sent from my iPhone.

Tougher China Laws Might Have Hurt Apple in IPad Dispute

March 26 (Bloomberg) -- China is proposing improvements to its 30-year-old trademark law that help household names from abroad better protect their rights. Apple Inc., in its dispute over the iPad name, might be better off without the reforms.

Government proposals for tackling "the rampant problem of trademark squatting" include doubling the maximum damages for infringers to 1 million yuan ($158,539). Since a court already ruled that Apple doesn't own the iPad name in China, the company would be on the wrong side of the sanctions, said Caroline Berube, an intellectual property lawyer in the southern Chinese city of Guangzhou.

The Apple case "is another example of why multinationals need to do their diligence and tread cautiously in China as domestic companies have become much more savvy about protecting and exploiting IP rights," Steve Rizzi, a New York-based attorney and former head of China for Foley & Lardner, said in an e-mail.

Apple's appeal that it, and not Hong Kong-listed display maker Proview International Holdings Ltd., owns the iPad name in China will hinge on contract law rather than trademark law, the lawyers said. A decision from a Guangzhou court is due by the end of May, and the new trademark law won't be voted on until next year's national legislature at the earliest, said Berube, of HJM Asia Law & Co.

'Never Knowingly'

Apple, which won a lawsuit against Shenzhen-based New Apple Concept Daily Technology Co. in 2008 for using an apple in its logo, started its legal battle with Proview in 2010, the same year it introduced the iPad tablet. A court in Shenzhen, across the border from Hong Kong, ruled against Apple last year, saying the purchase agreement for the trademarks featured the wrong Proview unit.

"As a company that generates a lot of intellectual property we would never knowingly abuse someone else's trademarks," Carolyn Wu, Apple's Beijing-based spokeswoman, said in a statement. She declined to comment on the proposed laws and how they would have affected the iPad case.

The Cupertino, California-based company argued that at least three employees of the Proview unit owning the trademarks had participated in negotiations leading to the sale.

Separately, Apple has sued Proview founder Rowell Yang in Hong Kong for conspiring with his companies to breach the sale agreement. That case is in the pre-trial phase.

Michael Jordan, Britney Spears

"It seems the problems have arisen because of the drafting of the agreement," said David Llewelyn, a professor of law at Singapore Management University.

Proview obtained the trademark in China in 2001 for a desktop terminal with touch-screen display called the Internet Personal Access Device, or IPAD, that the company developed starting in 1998.

"This doesn't seem to be a case in which a Chinese company has registered a foreign company's trademark in China to try and blackmail them into buying them off," said Llewelyn, the author of "Invisible Gold in Asia: Creating Wealth Through Intellectual Property."

Hall of Fame basketball player Michael Jordan and pop singer Britney Spears have been involved in disputes regarding the use of their names in China this year.

"In China, there is a lot of trademark hijacking, meaning someone files a trademark similar or identical to a trademark of another, especially something famous outside China," said Benjamin Bai, a partner of intellectual property law at Allen & Overy in Shanghai.

Widely Known in China

Jordan said Feb. 23 he had sued a southern China-based sportswear company for the unauthorized use of his Chinese name and his jersey number 23. Qiaodan Sports Co., which received regulatory approval in November to raise 1.06 billion yuan in an initial public offering, said its brand was registered according to Chinese law.

Spears failed in January to convince authorities to cancel a trademark for the Chinese translation of "Britney," obtained by a Shenzhen-based for use on alarm clocks and watches, domestic media, including the Beijing Morning Post, reported. The Beijing court refused to hear her case, saying the singer couldn't show she was widely known in China in 2001, when Shenzhen Wanfuda Trading Co. registered for the name.

Ken Hertz, a Beverly Hills-based lawyer for Spears, didn't comment on the dispute in China.

Sounds, Colors

There have been 8.3 million trademark applications made in China since 1979, with a record 1.2 million filed in 2010, according to intellectual property consultancy, Rouse. Disputes over trademarks rose almost eight-fold from 2004 to 2010, Rouse's data shows, and punishments have included criminal sentences.

China established specialized courts for trademark, copyright and patent issues after joining the World Trade Organization in 2002. The third planned revision of the trademark regime comes as more than half of the companies polled last year by the American Chamber of Commerce in Shanghai said intellectual property infringement hindered their business.

Proposed changes include allowing sounds and colors to be registered, as well as trademarks that cover more than one class of product. One proposal prohibits applicants from filing anything that they should know, through contractual or business relationships with the rights holder, already exists.

While the higher damages payable by infringers would be a deterrent, the changes don't do enough to prevent registrations of trademarks by parties who know the name is already in use, Berube said.

If Apple's iPad appeal in mainland China fails, it faces fines of three times the "volume of illegal business" in addition to damages for trademark infringement. China is Apple's biggest market outside the U.S.

While not strictly dealing with trademark issues, the Apple-Proview case has raised awareness of intellectual property issues in China, according to May Tai, a Beijing-based disputes lawyer with Herbert Smith LLP.

"This case certainly makes Chinese people think more about the value of a brand," Tai said.

To contact the reporter on this story: Debra Mao in Hong Kong at dmao5@bloomberg.net

To contact the editor responsible for this story: Douglas Wong at dwong19@bloomberg.net

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(BN) Google Told by Tokyo Court to Limit Autocomplete, Kyodo Says (1)

Bloomberg News, sent from my iPhone.

Google Told by Tokyo Court to Limit Autocomplete, Kyodo Says (1)

March 26 (Bloomberg) -- Google Inc. was ordered by the Tokyo District Court to suspend its autocomplete search function after a man alleged that it violated his privacy, according to a Kyodo News story published on the Japan Times website.

Google refused to suspend the feature, saying that its U.S. headquarters isn't regulated by Japanese law, according to the report.

The Mountain View, California-based company, owner of the world's most popular search engine, is reviewing the order, according to an e-mailed statement from Google to Bloomberg News.

"A Japanese court issued a provisional order requesting Google to delete specific terms from autocomplete," the company said. "The judge did not require Google to completely suspend the autocomplete function."

Autocomplete predicts searches for users as they start typing queries, in part by using the popularity of search terms, the company said. Google said it doesn't determine these terms manually -- suggested queries are drawn from items that have been typed in by other Google users.

To contact the reporters responsible for this story: Takehiko Kumakura at tkumakura@bloomberg.net; Brian Womack in San Francisco at Bwomack1@bloomberg.net

To contact the editor responsible for this story: Tom Giles at tgiles5@bloomberg.net

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(BN) Nokia to Sell $99.99 Windows Phone Via AT&T to Take On Apple (1)

Bloomberg News, sent from my iPhone.

Nokia to Sell $99.99 Windows Phone Via AT&T to Take On Apple

March 26 (Bloomberg) -- AT&T Inc. plans to start selling a Nokia Oyj smartphone with Microsoft Corp. software for half of what it charges for the iPhone, as the device's makers seek to break Apple Inc. and Google Inc.'s dominance of the U.S. market.

The Lumia 900, which runs on AT&T's network using faster, so-called long-term-evolution technology, will start selling for $99.99 on April 8, the second-largest U.S. wireless carrier said today in a statement. The latest iPhone and newest handsets running Google's Android software typically start at $199.

Nokia is counting on Microsoft's Windows Phone software to reignite sales in the U.S., where the iPhone, Android makers such as Samsung Electronics Co. and Research In Motion Ltd.'s BlackBerry control 92 percent of the market. Microsoft is trying to increase its share of the mobile software market to expand beyond the slower-growing personal-computer market.

"The pricing is aggressive," said Avi Greengart, an analyst at research firm Current Analysis in Teaneck, New Jersey. "They are hoping to use price to get people to buy a product with an operating system they aren't familiar with."

To get the $99.99 price, customers need to sign up to a two-year contract with AT&T. The Dallas-based carrier will also sell the phone without a contract for $449.99, said Steven Schwadron, an AT&T spokesman.

Those price points suggest that AT&T is subsidizing each Lumia by about $350. That compares with a $450 subsidy for the the cheapest version iPhone 4S, which sells for $199 with a contract and $649 without one.

Must Win

Nokia Chief Executive Officer Stephen Elop, a former Microsoft executive, started rebuilding the Espoo, Finland-based company's smartphone strategy around the Windows Phone operating system last year. Nokia had previously focused on its own MeeGo and Symbian operating systems.

Nokia and Microsoft have said they are willing to spend money to fuel sales. Microsoft said last year it would pay Nokia $1 billion to develop and promote Windows phones. Elop said in October that marketing spending on the Lumia series would be triple the money spent on previous product sales promotions.

Microsoft, based in Redmond, Washington, rose 1.8 percent to $32.59 at the close in New York. Nokia advanced 0.4 percent at 3.99 euros in Helsinki. AT&T added 0.9 percent to $31.79.

The Lumia 900 has a 4.3-inch (11-centimeter) screen, larger than that of the iPhone, and an 8-megapixel camera. Customers can order it online starting March 30, AT&T said.

To contact the reporter on this story: Scott Moritz in New York at smoritz6@bloomberg.net

To contact the editor responsible for this story: Peter Elstrom at pelstrom@bloomberg.net

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(BN) Nuclear Power Industry Says Back on Track After Fukushima ‘Speed Bump’

Bloomberg News, sent from my iPhone.

Nuclear Industry Says Back on Track After Fukushima 'Speed Bump'

March 26 (Bloomberg) -- Within months of the Fukushima nuclear disaster, the worst in 25 years, Germany, Belgium and Italy vowed to quit atomic energy. Twelve months on, the nuclear industry says it's almost back to business as usual.

"Fukushima put a speed bump on the road to the nuclear renaissance," Ganpat Mani, president of Converdyn, a company that processes mined uranium, said at a nuclear industry summit in Seoul last week. "It's not going to delay the programs around the world."

As Japan mourned this month for the 19,000 people killed or presumed dead from the earthquake and tsunami that also wrecked the Fukushima Dai-Ichi nuclear station, India last week overrode six months of local protests to approve the start of its Kudankulam plant. In February, the U.S. gave the green light to build the nation's first reactor in 30 years. China is "very likely" to resume approval of new nuclear projects this year, said Sun Qin, president of China National Nuclear Corp.

With 650 million people in China and India living without access to electricity, the nations are looking to the atom to provide power without raising emissions and fossil fuel costs. Nuclear is not the only alternative to fossil fuels, but the use of renewable energy for now is restricted by technology and costs, according to South Korea's Prime Minister Kim Hwang Sik.

Fifty Years

"It would be a more practical and viable solution, at least, for the next forty to fifty years, to make commitments to the safe use of nuclear energy," Kim told the industry summit before welcoming counterparts including U.S. President Barack Obama for a nuclear security meeting that starts today.

Indonesia, Egypt, and Chile are among more than a dozen nations planning to build their first nuclear station to join the 30 countries operating atomic plants. Sixty one reactors are currently under construction and a further 162 units are planned, according to the World Nuclear Association.

The planned reactors alone have a greater capacity than all of the 435 reactors that supply 13.8 percent of the world's electricity today. By 2030 at least 60 units will need to be retired, the WNA estimates. Still, global nuclear capacity may grow by about 50 percent to 600,000 megawatts by 2030, Areva SA Chief Executive Officer Luc Oursel told reporters in Seoul.

The nuclear industry has faced three major accidents in the last 32 years, with the first two delaying construction of atomic plants for decades in the countries where the disasters happened. The 1979 Three Mile Island core meltdown in the U.S. and the 1986 Chernobyl nuclear plant explosion in the former Soviet Union. And now Fukushima.

Waiting on Fukushima

After the quake and tsunami engulfed Japan's northeast coast the plant operated by Tokyo Electric Power Co. lost mains and battery power to cool its reactors, resulting in three core meltdowns and radiation leakage. About 160,000 people, or 8 percent of the Fukushima prefecture population, evacuated and about 132 square kilometers remain as a no-go zone around the station.

A unified report on Fukushima with an estimate of the total radiation fallout and the levels of food contamination will not be ready for at least another 14 months when the United Nations Scientific Committee on the Effects of Atomic Radiation issues its first global and independent assessment.

The industry has already learned lessons from Fukushima and they are incorporated into the safety systems of today's power plants and the new models, said John Welch, chief executive officer of USEC Inc., the U.S. uranium enricher.

Amazed

"One thing that never ceases to amaze me about the industry, especially in the U.S., is that they take their job of running those plants safely and continuing to self-evaluate" very seriously, Welch said in an interview in Seoul.

France's state-controlled nuclear company Areva will spend 2 billion euros ($2.65 billion) or a quarter of its investments over the next five years on safety improvements, Oursel said. U.S. utilities have installed an additional 300 piece of major equipment to boost safety since Fukushima, according to the Washington-based Nuclear Energy Institute.

The NEI, which represents companies including Exelon Corp. and Southern Co., is also doubling its advertising spending to roll out a campaign from this month to promote atomic power. The campaign is due to feature in media including "The Daily Show with Jon Stewart," the Emmy-award winning Comedy Central show, the Economist and Facebook.

Different This Time

"Different from past experiences in the U.S. nuclear industry we've spent a lot more time in the last year out in front of our stakeholders, the communities in which we operate, our elected officials, the citizens who work in our plants," Charles Pardee, chief operating officer of Exelon Corp., the biggest U.S. utility, told the Seoul forum.

"We've done this to make sure we're as transparent as we can possibly be about what we've learned from these experiences and what we'll do better going forward," he said.

Still, safety improvements and mass campaigns will not be the clincher for whether nuclear power succeeds or loses out to a glut of natural gas from shale rock deposits or renewables, said Helmut Engelbrecht, chief executive officer of Urenco Ltd., the uranium enrichment company owned by the U.K., Germany and the Netherlands.

"In the long run our industry will only be successful if we prove that we are a competitive alternative to other forms of electricity," Engelbrecht said in an interview in Seoul. That means competing on cost as much as proving its safety credentials. The industry is 10 years away from achieving this competitiveness, he said.

New Markets

Areva's market outlook is more positive. There are many tenders for new reactors and other contracts out there, Oursel said. "When we now look at the global situation, we think it's going to pick up very soon," he said.

The future of nuclear demand lies in expansion to new countries as well as ongoing construction in India, China and Russia, Converdyn's Mani said. India, which gets 3 percent of its power from nuclear energy, had targeted a 13-fold increase in capacity to 60,000 megawatts by 2030 prior to Fukushima.

China has 26 units under construction in addition to 15 operating reactors, according to the WNA. A further 51 units are planned and 120 proposed, meaning that China may account for a third of all the new construction, WNA data show.

The so-called nuclear renaissance isn't limited to Asia's economic growth. Countries including Poland and Turkey say that the risks and costs of rising fossil fuel prices and security of supply make nuclear generation a must for them.

Saving Money

Turkey's disagreement with Russia's OAO Gazprom over discounts led to the cancellation of a contract for as much as 6 billion cubic meters of annual gas purchases last year. By building two nuclear plants the country can cut its dependence on gas imports from Russia, its biggest fuel provider, and save as much as $7 billion over four years, Energy Minister Taner Yildiz said Dec. 15.

For companies like Kazatomprom, the state nuclear company of Kazakhstan, the world's largest uranium exporter, that bodes good profits. The company is a shareholder in Toshiba Corp.'s Westinghouse Electric, which is due to build the first new U.S. reactor in 30 years in Georgia State. Kazatomprom also has ventures with Russia's Rosatom Corp., which is due to build and run Turkey's first nuclear plant.

"If our plans come off then the partnerships will be very profitable," Kazatomprom president Vladimir Shkolnik said in an interview in Seoul. Both Rosatom and Westinghouse are going into new markets, which opens export avenues for the Kazakh company, he said.

The disaster at Fukushima has provided "many lessons, especially on how important nuclear safety is," Kim Jong Shin, chairman of Korea Hydro & Nuclear Power Co. told reporters at the Seoul summit.

Still, the technology has no alternative that can provide "clean and sustainable energy," Kim said. Given its role in medicine and national security, nuclear is "indispensable."

To contact the reporters on this story: Yuriy Humber in Seoul at yhumber@bloomberg.net Sangim Han in Seoul at sihan@bloomberg.net Shinhye Kang in Seoul at skang24@bloomberg.net

To contact the editors responsible for this story: Amit Prakash at aprakash1@bloomberg.net Rebecca Keenan at rkeenan5@bloomberg.net

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(BN) AOL Is Said to Hire Evercore to Find a Buyer for Its 800-Patent Portfolio

Bloomberg News, sent from my iPhone.

AOL Said to Hire Evercore to Find Patent-Portfolio Buyer

March 24 (Bloomberg) -- AOL Inc. hired Evercore Partners Inc. to find a buyer for its more than 800 patents and explore other strategic options, according to three people with knowledge of the situation.

Private-equity firms, including Providence Equity Partners Inc., TPG Capital and Silver Lake, have approached AOL about taking the company private, yet those overtures haven't resulted in a deal, said the people, who asked not to be identified because the matter hasn't been disclosed.

Evercore is trying to help the company wring value from a patent portfolio that AOL shareholder Starboard Value LP said may yield more than $1 billion in licensing income. AOL is exploring the options amid slow advertising growth and a decline in its dial-up Internet subscribers. The company's revenue has dropped 29 percent since its 2009 spinoff from Time Warner Inc.

"It could be that someone is trying to use their patent portfolio as a life preserver," said James Conley, a professor at Northwestern University's Kellogg School of Management. "The cash from the dial-up business is going away, and late in the game the leadership may be realizing that, 'Golly, we could get some money from these patents.'"

Many of AOL's patents cover Internet advertising and communications services, and the portfolio could fetch as much as $1 billion from a large technology company, said Christopher Marlett, co-founder of MDB Capital Group, an investment bank in Santa Monica, California, focused on intellectual property.

Google, Microsoft?

"More than likely the buyer on this would be someone like Google or Microsoft," Marlett said. AOL's "intellectual property could be a significant percentage of the overall value of the company," he said.

Maureen Sullivan, a spokeswoman for New York-based AOL, declined to comment, as did representatives of Evercore, Google Inc., Microsoft Corp. and the private-equity firms.

AOL's share price has climbed 81 percent since Aug. 10, when it reached its lowest level since the spinoff, amid speculation it might be sold to a private-equity firm. Shares of AOL rose 4.1 percent to $18.49 yesterday, giving the company a market value of $1.75 billion. AOL has become too expensive for the financing of a leveraged buyout, people familiar with the matter said.

Private-equity firms are often drawn by a company's ability to generate cash. AOL's appeal is diminishing as its dial-up business dries up, the people said. Sales in that division have plunged each of the past four quarters.

Shrinking Sales

The unit provided $803 million, or 36 percent, of total revenue in 2011. AOL's fourth-quarter net income declined 65 percent from a year earlier to $22.8 million on sales of $576.8 million. In the fourth quarter of 2009, AOL reported sales of $809.7 million.

AOL's portfolio includes "some of the foundation patents for the Internet," Chief Executive Officer Tim Armstrong said at a Barclays Capital conference this month.

"It's beachfront property in East Hampton," he said. "It's basically extremely valuable."

Armstrong said in a December interview that he was open to going private. It "doesn't matter" whether AOL remains public or goes private, he said. Remaining an independent entity is the "first desired course of action," he said.

Private-Equity Talks

Armstrong had been in talks with private-equity firms before, as recently as September, when the CEO approached potential financial partners about combining AOL with Yahoo! Inc., two people said at the time. AOL said in August that it had retained investment bank Allen & Co. and law firm Wachtell Lipton Rosen & Katz as advisers. Allen & Co. later gave up its mandate to be Yahoo's adviser, said one of the people.

Starboard, which increased its stake to 5.2 percent from 4.5 percent late last year, said in a Feb. 24 statement that it's "increasingly uncomfortable" with the direction the company and the board leadership are taking.

The investor nominated five directors -- including Jeffrey Smith, Starboard's co-founder and CEO -- to AOL's board at the time.

"We are troubled that the company remains closed-minded to alternative value creation initiatives," Smith said in a letter accompanying the statement. AOL could exploit its more than 800 patents covering Internet technologies such as e-commerce, which may generate "in excess of $1 billion of licensing income," he wrote.

AOL fired as many as 40 people in the group that includes its AOL Instant Messenger service, while executives Eric van Miltenburg and Jason Shellen departed, three people said earlier this month. The cuts in AIM were related to the division's underperformance, and they could be followed by the elimination of more staff in other departments, these people said.

To contact the reporters on this story: Serena Saitto in New York at ssaitto@bloomberg.net Cristina Alesci in New York at calesci2@bloomberg.net Douglas Macmillan in New York at dmacmillan3@bloomberg.net

To contact the editor responsible for this story: Tom Giles at tgiles5@bloomberg.net

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