(BN) Lupin, Google, China Copyright: Intellectual Property

July 3 (Bloomberg) -- Lupin Ltd. won an appeals court ruling yesterday that lets it continue selling a generic version of the Shionogi Pharma Inc. diabetes drug Fortamet.

The U.S. Court of Appeals for the Federal Circuit said Lupin had raised a substantial question of the validity of Shionogi's patent 6,866,866, and overturned a lower court ruling that blocked sales while a patent-infringement case is pending.

The appeals court case is Sciele Pharma v. Lupin Ltd. 12- 01228, U.S. Court of Appeals for the Federal Circuit (Washington). The lower court case is Sciele Pharma Inc. v. Lupin, 1:09-cv-00037-RBK-JS, U.S. District Court, District of Delaware (Wilmington).

Top Patent Area Silicon Valley Getting Its Own Satellite Office

Apple Inc., Google Inc. and Intel Corp. soon won't have to travel across the U.S. to get patent protection on their latest inventions.

Silicon Valley, Dallas and Denver have been selected as the new homes for regional patent offices as part of an effort to cut down on a backlog of applications awaiting review, the U.S. Patent and Trademark Office said yesterday.

The agency, which is opening a satellite office in Detroit on July 13 and has declared a "critical need for electrical engineers," is trying to hire more examiners to cut into the 640,000 applications awaiting a first review. By expanding beyond its Alexandria, Virginia, campus, the patent office is seeking to take advantage of a pool of engineers who understand technology and can work closer to where inventors are located.

The additional offices were authorized under an overhaul of the patent system signed into law last year. About 600 applications were submitted, and the selections were based on geographic diversity, economic impact, the local workforce and proximity to companies that are submitting applications.

"The single most important step we can take to support an economy built to last is to bring new inventions to market as quickly as possible," said David Kappos, director of the Patent and Trademark Office.

The regional offices -- one for each time zone -- would become hubs with "a tangible impact on each city's innovation economy," he said.

The four offices also could develop their own expertise to reflect local communities -- Detroit for automotive, metallurgy and paints; Dallas for energy; Denver for aerospace; and Silicon Valley for electronics and biotechnology. Denver also was selected in part because it has a large number of veterans with advanced degrees, and President Barack Obama's administration has a policy to hire more veterans, Kappos said.

The Silicon Valley area, which also includes Sunnyvale and Santa Clara, is the top recipient of patents, with more than 10,000 issued in 2010, agency figures show. The region comprising San Francisco, Oakland, and Fremont adds another 6,290 patents, the third-most behind the New York and northern New Jersey region.

The Detroit office will add about 120 jobs to the region, and the plan is for at least one of the other offices to be online within two years, said Vikrum Aiyer, a spokesman for the patent office. Michigan residents received 3,964 patents in 2011, the sixth-highest.

The agency is hiring 1,500 examiners this fiscal year, to bring the total to 7,800 from 6,800 plus filling in for turnover.

AVT Gets Patent for Managing Vending Machines, Will Enforce It

AVT Inc., the Corona, California-based vending machine company, received a patent that covers the technology for remote control of multiple vending machines, and said it's considering enforcing the patent against possible infringers, the Vending Times trade publication reported.

Patent 8,191,779, which was issued June 5, covers "any system that is managing multiple machines wirelessly via a control center," AVT Chairman Shannon Illingworth told Vending Times.

AVT is in the process of sending out cease-and-desist letters to companies it thinks may be infringing the patent, according to Vending Times.

Illingworth said that it would prefer to license infringing companies because "the more operators out there with multiple machines using credit cards and being managed efficiently is good for all of us," Vending Times reported.

For more patent news, click here.

Trademark

Google Outlines Proposals to EU to End Antitrust Probe

Google Inc. outlined proposals to European Union regulators in an effort to end an antitrust investigation into allegations that the operator of the world's largest search engine discriminates against rivals.

Google Executive Chairman Eric Schmidt sent EU antitrust chief Joaquin Almunia a letter responding to the probe, the EU said in a statement. The settlement offer addresses the "four areas the European Commission described" as potential concerns, Google spokesman Al Verney said in a separate e-mail. Details of the proposals weren't disclosed.

Almunia in May asked Google to make an offer to settle concerns it promotes its own specialist search services, copies rivals' travel and restaurant reviews, and that agreements with websites and software developers stifle competition in the advertising industry. He said last month he would send Google an antitrust complaint, that could lead to a fine or limits on conduct, if the proposal was unsatisfactory.

"Three of the four areas are relatively easy to address," Greg Sterling, a senior analyst at Opus Research, said in a statement. "The 'concern' about placement of 'Google content' in search results is more problematic given that it goes to the heart of Google's ability to control its search experience and algorithm."

Google, based in Mountain View, California, is under increasing pressure from global regulators probing whether the company is thwarting competition in the market for Web searches. The U.S. Federal Trade Commission and antitrust agencies in Argentina and South Korea are also scrutinizing the company.

In 2010, regulators began investigating claims Google discriminated against other services in its search results and stopped some websites from accepting competitors' ads.

While Microsoft Inc. and partner Yahoo! Inc. have about a quarter of the U.S. Web-search market, Google has almost 95 percent of the traffic in Europe, Microsoft said in a blog post last year, citing data from regulators.

Microsoft, maker of the Bing search engine, Foundem, a U.K. shopping website, and other companies filed complaints with the EU that triggered the probe.

"We hope the proposals reflect a greater willingness to end Google's anti-competitive behavior than has its consistent rejection of the concerns that Mr. Almunia identified after collecting evidence for nearly two years," said Thomas Vinje, a lawyer for the FairSearch Coalition, a group that represents Microsoft, Expedia Inc. and Foundem.

Riverina Citrus Marks May Be Acquired by Commercial Entity

Although New South Wales' regional citrus growers' body is in the process of liquidation, some commercial entities have expressed interest in acquiring the Riverina Citrus trademarks, Australia Broadcast Corp. reports.

The State Primary Industries Minister will have the power to decide what happens to the marks that had belonged to the group that produces 30 percent of Australia's citrus, according to ABC.

A liquidator handling the Riverina Citrus windup told ABC the growers' group's IP "has created a little bit of interest out there in the market as to whether it is available for purchase."

Sustainable Palm Oil Group Seeks Wider Adaption of Trademark

The Roundtable on Sustainable Palm Oil is seeking to expand the adoption of its trademark beyond the 61 licenses already issued to 13 countries, the Borneo Post reported.

Those who use the mark certify that oil palm cultivation doesn't damage the tropical forests from which it is harvested or the people who live in those regions, according to the Borneo Post.

The growing demand for palm oil, which is used in a wide range of products including cosmetics, soap, margarine, cookies and chocolate and, potentially, biofuels, has created risks to habitat protection, according to the Borneo Post.

Darrel Webber, secretary general of the roundtable, said the use of the trademark brings an awareness of the environmental issues to consumers and can boost the demand for the certified product, the Borneo Post reported.

For more trademark news, click here.

Copyright

China Copyright Center Expands Offerings, Licenses Staged Works.

The Beijing International Copyright Trade Center has expanded to provide copyright licensing and protection for staged performances, the AsiaOne website reported.

While Chinese older performers didn't worry about the protection of their work, younger performers have expressed "irritation and frustration" when seeing their work copied without authorization, according to AsiaOne.

The trade center lists plays on its website that are available for licensing, as well as casts of performers and crews, Asia One reported.

Directors of various Chinese performing arts groups told AsiaOne they are now encouraging their members to seek copyright protection for their work.

Samsung loses bid to lift ban on U.S. tablet sales - Yahoo! Finance

(Reuters) - A U.S. judge on Monday rejected a request by Samsung Electronics Co. to lift a ban on U.S. sales of its Galaxy Tab 10.1, another setback for the South Korean firm in its tablet patent battle with iPad maker Apple Inc.

http://finance.yahoo.com/news/judge-rejects-samsungs-request-allow-012324971.html


Eugene.

(BN) Microsoft Writing Down $6.2 Billion After AQuantive Sputters

Microsoft Corp. (MSFT) is taking a $6.2 billion writedown for almost the entire amount it paid for Internet-advertising company AQuantive Inc., signaling that its online division will perform worse than the company projected.

The non-cash charge means the company will probably post a loss for the quarter, which ended in June. Before the statement, analysts had predicted that Microsoft would report profit of $5.3 billion in the period, data compiled by Bloomberg show.

Microsoft bought AQuantive for about $6.3 billion in 2007 to catch Google Inc., amid an acquisition spree for companies that specialize in online advertising. The deal failed to accelerate growth as much as anticipated at the company's money- losing online division, Microsoft said. The company won't reverse losses as quickly as it intended, said a person with knowledge of the matter, who's not authorized to speak publicly.

"Online services is the biggest drag on the company right now," said Colin Gillis, an analyst at BGC Partners LP in New York, who has a buy recommendation on Microsoft.

Even as the AQuantive deal didn't meet projections, Microsoft said its online division has shown improvement in other areas, including revenue per search and market share gains for the Bing search engine.

Operating losses in online services narrowed to $1.45 billion in the nine months through March 31, from $1.91 billion a year earlier, Microsoft said in April. Sales gained 11 percent to $2.13 billion in the period.

'Slow Improvement'

"It's the classic come-from-behind, slow, incremental improvement," Gillis said. "Bing has made incremental gains."

Microsoft agreed to buy AQuantive weeks after Google said it would acquire DoubleClick Inc., which also handles online advertising.

The company had to take the writedown because the online business isn't growing as quickly as forecast, and it's taking longer to turn around than Microsoft expected, said the person. The company hasn't boosted revenue per search as much as it had projected. What's more, distribution deals in which Microsoft pays companies like Dell Inc. (DELL) and Verizon Wireless have added customers -- though at a high cost, the person said.

"This is an accounting decision that the company made based on how the business is performing relative to the projections we had made during the past five years," Microsoft Chief Executive Officer Steve Ballmer and online unit President Qi Lu, wrote in an e-mail to employees obtained by Bloomberg.

"We want to be very clear that we are strongly committed to a strong and financially successful" online division, according to the memo, whose authenticity was confirmed by Microsoft.

Microsoft was little changed at $30.56 at the close today in New York. It has climbed 18 percent this year.

tags: mousetrap, 4q diagram

(BN) DNA Mapping of Alzheimer’s Patients Gives Deep Dive View

Over the past 18 months, 81-year-old Bill Bunnell has visited the doctor a half-dozen times to take memory tests, provide blood samples, and undergo a spinal tap and imaging scans. It's all part of the most extensive study ever conducted on Alzheimer's.

Now researchers are about to take an even closer look at Bunnell, a retired engineer from Madison, Connecticut.

Working with $2 million in new grants to be announced this week, the researchers for the Alzheimer's Disease Neuroimaging Initiative will, for the first time, start mapping the DNA of 800 participants in a study attempting to find the root causes of memory loss. The goal is to see if physical changes from Alzheimer's can be matched to genetic disparities, which can then be compared with findings from healthy people like Bunnell.

"If there's ever to be progress in the discovery of the fundamentals that lead to Alzheimer's, this is the way to do it," said Aubrey Milunsky, director of the Boston University Center for Human Genetics, which isn't involved in the research.

The grants are split evenly from the Alzheimer's Association, a nonprofit health group focused on the care and treatment of people with the disease, and the nonprofit Brin Wojcicki Foundation, a charitable organization created by 23andMe Inc. co-founder Anne Wojcicki and her husband Sergey Brin, co-founder of Mountain View, California-based Google Inc.

The research initiative, funded by the U.S. government, nonprofit groups and private industry, began tracking physical and mental changes in people ages 60 and older in 2004. Alzheimer's is an irreversible disease that destroys brain cells and makes it difficult for patients to think, remember and function. It afflicts 5.1 million Americans, a number that may grow to 16 million by 2050, according to the U.S. National Institutes of Health.

Finding Connections

The ADNI study has sought to tie the development of symptoms to physical changes in people with Alzheimer's, including deposits of protein tangles and plaque in the brain over time.

By diving deeply into the genetics of healthy people and those with the disease, scientists may find differences that either spur the buildup of the amyloid plaque that's a hallmark of the disease, or protect people from it.

The genetic samples have already been gathered, the researchers said. They'll be sequenced at Illumina Inc. (ILMN), the gene-mapping company based in San Diego that fought off a $6.7 billion takeover bid from Roche Holding AG (ROG) earlier this year.

It will take 16 weeks to get the results, which will generate so much information that the data on each participant will be sent to the researchers on separate hard drives. The team is working on ways to share the raw data when it emerges, and is considering alternatives like lending them to investigators the way libraries lend books.

Dozen Genes

Researchers plan to study the genetic makeup of the participants. While roughly 10 genes are already linked to the condition, crucial details about genetic variations and how they interact remain unknown, said Robert Green, associate director of medicine in the Division of Genetics at Brigham and Women's Hospital and at Harvard Medical School in Boston.

"Alzheimer's is one of the many diseases that is starting to reach the point where we can benefit from the explosion of genomic information that's becoming available," Green said in a telephone interview. "We still don't know the entire pathway of what causes it. There are mysteries that likely have to be solved before we have truly effective treatments."

Open Access

The results of the genetic tests, as with all the other information gathered by the program investigators, will be available to anyone studying Alzheimer's, said Mike Weiner, the leader of the initiative from the University of California, San Francisco, in a telephone interview. That promises to speed progress, he said.

Open access helped draw funding to expand the program into genetic testing, said Wojcicki, also chief executive officer of Mountain View, California-based gene-testing company 23andMe.

"For something like Alzheimer's disease, where there is such a critical need, and where it is so urgent and will impact so many of us, we need as many smart minds as we can find working on it," Wojcicki said. "I'm a big believer that if we have more data, we can solve our health care problems."

The 8-year-old program is already a watershed in the history of Alzheimer's, leading to the publication of nearly 500 research reports, said William Thies, chief medical officer of the Alzheimer's Association, an early contributor to the initiative.

Integrated Data

The integration of patients' medical history with their genetic makeup will provide an unprecedented view of how Alzheimer's disease emerges and eventually dominates the mind, Thies said by telephone.

"Until you understand the relationship between basic blocks of genetics and the clinical condition of the patient, you're not going to get very far," Thies said. "We believe this is the biggest project of whole genome sequencing in a single disease."

Most people don't realize Alzheimer's is strongly inherited, often because their relatives died before developing it, Weiner said. Existing research looks mainly at snippets of the genetic code where variations are thought to exist, an approach that's been productive but "hasn't nailed it," he said. Looking at the whole genome will provide more answers.

"This is a disease that has the potential to wreck our health-care system, our economy and ruin the lives of increasing numbers of people in the next 50 years," Thies said. "All that can be avoided if we invest appropriately in research and we have the public volunteering for clinical opportunities."

Trade-off of the Day: Flavor vs Color.

NYT, June 28, 2012:

But now researchers have discovered a genetic reason that diminishes a tomato’s flavor even if the fruit is picked ripe and coddled.

The unexpected culprit is a gene mutation that occurred by chance and that was discovered by tomato breeders. It was deliberately bred into almost all tomatoes because it conferred an advantage: It made them a uniform luscious scarlet when ripe. 

Now, in a paper published in the journal Science, researchers report that the very gene that was inactivated by that mutation plays an important role in producing the sugar and aromas that are the essence of a fragrant, flavorful tomato. And these findings provide a road map for plant breeders to make better-tasting, evenly red tomatoes.

Soon, we are going to get the best of both worlds: flavor AND color!

tags: trade-off, problem, solution, recipe

(BN) Samsung Requests Stay of Nexus Sales Ban in Apple Lawsuit (1)

July 2 (Bloomberg) -- Samsung Electronics Co.'s request to stay a court order barring sales of its Galaxy Nexus smartphone in the U.S. will be ruled on "shortly," a federal judge said today at a court hearing in San Jose, California.

U.S. District Judge Lucy Koh wasn't more specific about when she'll issue her ruling. Samsung, the world's biggest maker of mobile phones, asked Koh for the stay of her June 29 order while the company pursues an appeal.

In granting the ban on Nexus sales, Koh ruled last week that although Samsung will be harmed by the order, "the harm faced by Apple absent an injunction is greater." That decision followed Koh's June 26 order blocking U.S. sales of Samsung's Galaxy Tab 10.1 computer.

The world's two biggest makers of high-end phones have accused each other of copying designs and technology for mobile devices and are fighting patent battles on four continents to retain their dominance in the $219 billion global smartphone market. To win its request, Samsung must demonstrate it will suffer irreparable harm from the injunction.

William Price, a lawyer for Samsung, told Koh in court today that Nexus sales represent 0.5 percent of the smartphone market, and that the balance of hardships Koh must weigh in deciding whether to stay her injunction tips in favor of Samsung.

'Lost Sale'

Under the injunction, "every sale to us is a lost sale," Price said. "Every sale of that phone in the market is not a lost sale to Apple -- there's no evidence of that. It impacts us much more."

Josh Krevitt, a lawyer for Cupertino, California-based Apple, told Koh that there is "loads" of evidence proving Apple is suffering direct harm from Nexus sales. In Samsung documents shared in an exchange of pretrial evidence gathering, the company shows the Nexus is "designed to take sales from the iPhone," Krevitt said.

Apple is "the only competitor identified by Samsung in document after document after document," Krevitt said. "Their sales cause Apple irreparable and immediate harm."

Samsung accounts for 29.1 percent of global shipments of smartphones, according to market research firm IDC. Apple is second with 24.2 percent, IDC said.

Outside courtroom battles, Samsung and Apple have a close business relationship. Samsung is one of Apple's biggest suppliers, making parts including semiconductors and screens. About 7.6 percent of Samsung's revenue comes from Apple, according to data compiled by Bloomberg.

The case is Apple Inc. v. Samsung Electronics Co. Ltd., 12- cv-00630, U.S. District Court, Northern District of California (San Jose). The tablet case is Apple Inc. v. Samsung Electronics Co. Ltd., 11-cv-1846, U.S. District Court, Northern District of California (San Jose).

(BN) Apple Loses Bid for Emergency Ban on HTC Phone Imports

July 3 (Bloomberg) -- HTC Corp. can continue to bring its newest smartphones into the U.S. while a trade agency investigates whether the phones violate an order that the Taiwanese company stop infringing an Apple Inc. patent.

The U.S. International Trade Commission yesterday instituted an investigation into Apple's claim that HTC continues to infringe a patent in violation of an order issued in December. The agency denied an emergency request to have the HTC phones, including the One X and EVO 4G LTE, detained at the U.S. border. Notice was posted on the agency's electronic docket.

HTC's phones were held up at the border in May, delaying plans by Sprint Nextel Corp. to sell the HTC EVO 4G. The phones, made in Taiwan, were allowed into the U.S. after HTC assured U.S. Customs and Border Protection that it had worked around the Apple patent.

The patent covers a system to detect telephone numbers in e-mails so, when the number on the screen is tapped, they can be stored in directories or called without dialing.

Apple filed a complaint last month, accusing HTC of making inaccurate representations to customs officials to bypass the import ban, known as an exclusion order.

"The commission finds that Apple has not demonstrated the propriety of temporary emergency action here," the Washington- based agency wrote. "The commission will not direct Customs to detain all subject HTC products because the commission does not have the information necessary to determine whether the respondents are currently violating the commission's limited exclusion order."

Legal Arguments

HTC said its mobile devices and software were redesigned, and that Apple was making legal arguments regarding infringement it hadn't made in the original case.

Apple, based in Cupertino, California, had asked that all HTC phones that run on Google Inc.'s Android operating system be stopped at the border.

HTC, Asia's second-largest smartphone maker, is counting on its One series of phones to improve its share of a market that reached $312 billion last year, according to Bloomberg Industries data.

The Taoyuan, Taiwan-based company had 4.5 percent of the global smartphone market in the first quarter, down from a peak of 10.7 percent in the second quarter of 2011, as it lost to competition from Apple's iPhone and Samsung Electronics Co.'s Galaxy line.

The case is In the Matter of Certain Personal Data and Mobile Communications Devices and Related Software, 337-710, U.S. International Trade Commission (Washington).

Eugene.

(BN) McDonald’s New CEO Focuses on Chicken Amid Shaky Economy

July 2 (Bloomberg) -- McDonald's Corp.'s new chief executive officer is playing chicken with the menu.

As Don Thompson, 49, steps into the CEO role at the world's largest restaurant chain, customers may see more new chicken items instead of beef. Thompson is pulling from McDonald's 160- item recipe book, which includes bone-in chicken wings and cashew teriyaki salads with chicken, to sell new food and attract cash-conscious consumers amid a shaky global economy. It's a "tremendous opportunity," Thompson said during a consumer conference on May 30.

"Some great examples include our large wrap in Europe and snack items like Chicken McBites," he said. "Our customers have given us permission to stretch our brand, so we are entering new categories with new products."

McDonald's is looking to draw budget-minded Americans with chicken items, which can be priced lower than other proteins, according to Bryan Elliott, an analyst at Raymond James & Associates in St. Petersburg, Florida. "The consumer is expressing some recent signs of distress" and chicken costs are "cheap relative to beef right now by a lot," he said.

McDonald's, along with other fast-food operators, is facing government austerity programs in Europe, declining consumer confidence in the U.S. and slowing economic growth in Asia. Sales at McDonald's stores open at least 13 months rose 3.3 percent worldwide in May, trailing analysts' estimates for growth of 5.2 percent.

McDonald's fell 0.5 percent to $88.08 at the close in New York. The company's shares have slumped 12 percent this year, compared with a 3 percent gain for the Bloomberg U.S. Quick- Service Restaurant Index.

Healthier Perception

Chicken also is "perceived to be healthier," Elliott said. "That could certainly be a factor in their thinking."

A Big Mac has 550 calories, while a six-piece order of Chicken McNuggets has 280 calories.

Last week, the Oak Brook, Illinois-based company began selling 410-calorie Spicy Chicken McBites in the U.S. At the same time, Americans are expected to eat more poultry. Chicken consumption in the U.S. will increase 1.7 percent to 82 pounds (37 kilograms) a person in 2013, while beef consumption may decline 2.2 percent next year to 54.5 pounds, according to data from the U.S. Department of Agriculture.

Thompson, who introduced Americans to McCafe specialty coffees and smoothies, started at McDonald's 22 years ago as an electrical engineer. He's managed regions including Denver, San Diego and the Midwest, and was president of McDonald's USA from 2006 to 2010, before being named chief operating officer. After Jim Skinner, the previous CEO, Thompson was the company's highest paid executive last year -- making $4.07 million, including an $829,000 salary.

Strategic Plans

"I've kind of led a lot of strategic planning and initiatives," Thompson said during a telephone interview earlier this year. He brought McCafe drinks from Australia to the U.S. in 2009 and is now introducing them in Canada. As COO, he also led remodeling efforts, added double-lane drive-throughs to stores and extended restaurant hours -- about 40 percent of U.S. locations are open 24 hours a day.

The chain has introduced snack wraps, 290-calorie oatmeal and McCafe fruit smoothies during the past five years to appeal to more health-conscious consumers and draw afternoon traffic. McDonald's is also promoting chocolate-dipped ice cream cones and s'mores pies for a limited time in the U.S. and may test new dessert items this year, Phillip Juhan, an analyst at BMO Capital Markets in Atlanta, said in an interview.

"Dessert is going to be an area of opportunity for them and one that they're going to push" at U.S. stores, he said.

Recipe Book

McDonald's recipe book "can be a core strength, but it can also be a detriment if you get to be too broad with your menu," Darren Tristano, executive vice president at Chicago-based researcher Technomic Inc., said in an interview. They have to make sure that new food can be made quickly at thousands of locations, he said.

There is no change from McDonald's strategy -- the company's so-called Plan to Win, Thompson said in the interview.

"A transition in leadership is not a change in strategy at McDonald's," Thompson said.

McDonald's has more than 33,500 stores worldwide, of which about 80 percent are franchised.

(BN) Twitter Must Turn Over Information on Protester’s Posts

July 2 (Bloomberg) -- Twitter Inc. must turn over information about an Occupy Wall Street protester's posts, a New York judge ruled, comparing the duties of social media sites to those of witnesses to a street crime.

State Supreme Court Judge Matthew A. Sciarrino Jr.'s June 30 ruling denied Twitter's request to quash a subpoena from Manhattan District Attorney Cyrus Vance Jr. The company must turn over tweets posted by Malcolm Harris from Sept. 15, 2011, to Dec. 30, 2011.

"What you give to the public belongs to the public. What you keep to yourself belongs only to you," Sciarrino said in a ruling that addressed the difficulty of setting law in the evolving world of social media.

The case will determine whether Twitter faces the burden of responding to subpoenas for its users, the San Francisco-based company has said. The outcome is significant throughout the U.S. as law enforcement becomes more aggressive in seeking information about what people do and say on the Internet, the American Civil Liberties Union said in a May 31 court filing.

Sciarrino said the duties of Twitter and other social media companies are similar to those of witnesses to street crimes.

'Information Superhighway'

"Today the street is an online, information superhighway, and the witness can be the third party providers like Twitter, Facebook, Instagram, Pinterest, or the next hot social media application," Sciarrino wrote.

Twitter provides real-time messaging and allows users to make posts that are broadcast to people who sign up to follow them. Facebook Inc., based in Menlo Park, California, owns the world's largest social-networking service.

"We are disappointed in the judge's decision and are considering our options," Carolyn Penner, a Twitter spokeswoman, said in a statement. "Twitter's terms of service have long made it absolutely clear that its users own their content. We continue to have a steadfast commitment to our users and their rights."

Twitter had asked Sciarrino to reverse an April ruling denying Harris's request to quash a subpoena from Vance. Sciarrino ordered Twitter instead to comply with the subpoena, saying its users don't have standing to argue the issue, while the company does.

After the judge's April 20 decision, Twitter updated its terms effective May 17 to say that users retain their right to any content they submit, post or display.

Warrant Required

Sciarrino partly agreed with the company's motion to quash his April ruling, by finding that content less than 180 days old requires a search warrant. As a result, Dec. 31 tweets by Harris won't have to be turned over without a warrant.

"We are pleased that the court has ruled for a second time that the tweets at issue must be turned over," Chief Assistant District Attorney Daniel R. Alonso said in an e-mailed statement. "We look forward to Twitter's complying and to moving forward with the trial."

Samuel Adams, Benjamin Franklin, Alexander Hamilton and Thomas Jefferson would have loved to post their opinions on Twitter as much as they loved to write for the newspapers of their day, Sciarrino wrote in his opinion.

"Those men, and countless soldiers in service to this nation, have risked their lives for our right to tweet or to post an article on Facebook; but that is not the same as arguing that those public tweets are protected," he said.

Constitutional Rights

The ACLU had said Harris should be able to argue against the subpoena because his First Amendment right to free speech and his Fourth Amendment right to privacy are implicated.

Twitter said that if the first court order stood, it would be "put in the untenable position of either providing user communications and account information in response to all subpoenas or attempting to vindicate its users' rights by moving to quash these subpoenas itself." The company said it would probably know nothing about the underlying facts in such cases to determine whether the subpoenas were improper.

The company said it had the right to oppose the prior court order under the federal Stored Communications Act, a law enacted in 1986 which governs disclosure of electronic communications, and argued that the finding would place an undue burden on the company.

Vance's subpoena seeks past Twitter posts and user information linked to the "@destructuremal" account of Harris, who was arrested with about 700 protesters on the Brooklyn Bridge on Oct. 1, according to court filings.

Location Sought

The information sought covers about 3 1/2 months, including Harris's arrest date, as well as Internet Protocol addresses corresponding to each post -- something that would allow prosecutors to see Harris's location at the time the posts were sent.

Twitter had asked that prosecutors be forced to request a search warrant for the records, calling its prior subpoena "unlawful" because the posts aren't readily accessible to the public. Twitter said prosecutors can't argue that Harris's posts are public because they can't access his old posts themselves.

"Otherwise the government would have already obtained the subject's tweets itself and avoided wasting all the time and resources it has trying to enforce an unlawful subpoena issued to Twitter," the company said in court papers.

Martin Stolar, an attorney with the National Lawyers Guild who had filed the request to invalidate the subpoena on Feb. 6 on behalf of Harris, called it "unusual" for Twitter to become involved in such a case.

'Neutral Arbiter'

"Most people who host things like this just say, 'I'm a neutral arbiter here, the source through which communications go,'" Stolar said in a phone interview before a hearing before Sciarrino on the issue last month.

There was no indication Harris had a conspiratorial role or did anything out of the ordinary, Stolar has said.

Morrison & Foerster LLP said in a June newsletter on legal issues in social media that the court's ruling essentially meant that Harris's posts weren't his. The court further found that Harris's Fourth Amendment rights weren't an issue because the Internet isn't a physical "home" -- and a search warrant wasn't therefore required, the law firm said.

"In short, the court has made it clear that users of social media who also find themselves charged with a criminal offense should have no expectation that potentially relevant information will be considered private or beyond the reach of a subpoena," Morrison & Foerster wrote.

The case is People of the State of New York v. Harris, 11-80152, Supreme Court of the State of New York (Manhattan).

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(BN) Jive Bids Seen Spurred by Microsoft-Yammer Deal: Real M&A

July 3 (Bloomberg) -- Jive Software Inc. is poised to lure acquirers with the fastest sales growth in the applications software industry after Microsoft Corp. agreed to purchase its competitor Yammer Inc. for $1.2 billion.

Jive, which like Yammer provides businesses with social- networking software that helps employees communicate and collaborate on projects, may post a 157 percent increase in revenue through 2014, according to analysts' estimates compiled by Bloomberg. That would be the steepest gain in the Bloomberg Industries Global Application Software Index, the data show.

The $1.3 billion company's sales growth may entice Microsoft's competitors from SAP AG to Oracle Corp. to pursue an acquisition, said Robert W. Baird & Co. and Citigroup Inc., even as the Palo Alto, California-based company trades at a multiple that's twice as expensive as the industry median relative to 2014 revenue. Since its initial public offering in December, Jive has surged 72 percent, the fourth-best performance for any U.S. IPO of more than $100 million, the data show.

"If Microsoft buys a company in the space, it forces Microsoft's peers to look around and see what they should now buy," Walter Pritchard, a San Francisco-based analyst for Citigroup, said in a telephone interview. "Everyone is questioning whether or not the social wave of interaction is going to make its way into enterprise in a big way. Jive brings a new way of doing that. If you want to buy into a new trend, you want to see a company that's growing fast."

Facebook Capabilities

"We can't comment on rumors or speculation," Kyle Arteaga, a spokesman for Jive, said in an e-mailed statement. "However, we would like to point out that Jive has a real opportunity to change the way people work, and thus, lots of room to grow. Transformative companies such as Jive tend to remain independent."

Jive provides businesses with social-networking software -- similar to Facebook Inc.'s platform for consumers -- that helps employees interact more efficiently than traditional e-mail services. E*Trade Financial Corp., Nike Inc., Starbucks Corp. and Verizon Communications Inc. are among Jive's largest customers, according to its annual regulatory filing.

Jive is "a very souped-up version of Facebook for enterprise use," Karl Keirstead, a New York-based analyst for BMO Capital Markets, said in a phone interview. "The younger generation is using e-mail less and less and using their social networks to collaborate with their communities more and more. Why wouldn't that trend also take place in business if it were a better way to communicate? The market could be massive."

Sales Growth

The market for social enterprise applications and related services is projected to expand to $6.4 billion in 2016 from an estimated $900 million in 2011, according to a November report from Cambridge, Massachusetts-based Forrester Research Inc.

While Jive has yet to make a profit, the company offers suitors the chance to grab the fastest-growing application software maker of its size.

Jive's revenue will climb to $199 million in 2014, a 157 percent gain since 2011, according to analysts' estimates compiled by Bloomberg. That's a bigger sales increase than all of the 31 other public companies in the Bloomberg Industries Global Application Software Index and almost three times the group's average, data compiled by Bloomberg show.

Jive's losses are "vastly outweighed by the growth profile," BMO Capital's Keirstead said in the interview. "Most investors are tolerant of Jive investing aggressively to grab market share while it can."

'Holy Grail'

Microsoft agreed to buy San Francisco-based Yammer last week and its Facebook-like business capabilities will join Microsoft's Office division, which includes the SharePoint, Office 365 and Skype products. It will still be maintained as a standalone product. Yammer is on track to post revenue of about $23 million this year, indicating Microsoft valued it at about 50 times revenue when including net cash, according to a June 26 note from Keirstead.

The Yammer purchase "validates that someone is willing to pay" for corporate social-networking software similar to Jive's, said Ed Maguire, a New York-based managing director and analyst at CLSA Asia-Pacific Markets. "Collaboration and improving communication has been something of a holy grail."

Shares of Jive have risen 23 percent since June 13, when Bloomberg News reported Microsoft was in talks to buy Yammer.

SAP and Oracle could bolster their social business communication services and complement their current software offerings by buying Jive, said Steve Ashley, a Milwaukee-based analyst at Robert W. Baird.

Needing Jive

"All of the major software platform vendors need this service," Ashley said in a phone interview. "Microsoft needed it. Oracle needs it. SAP needs it. Software companies are faced with the very question of do they build their own offering from scratch, which can take years, or do you try to acquire that capability? That capability is only in a handful of hands, and Jive is the most substantial."

Jive's competitors include Salesforce.com Inc.'s Chatter product, International Business Machines Corp.'s Connections and closely held companies such as Lithium Technologies Inc., Socialtext Inc. and Telligent Systems Inc. SAP's venture arm has invested in Lithium.

SAP focused on routine enterprise tasks such as payroll and supply-chain management for the first 35 years of its existence until starting to branch out in 2007 into business analytics and cloud computing. The company said last year that it wants to add a new field of business every 12 to 18 months and singled out collaborative software as the next category.

Short Sellers

Jim Dever, a spokesman for Walldorf, Germany-based SAP, said the company doesn't comment on speculation, when asked whether it is considering a takeover of Jive. Deborah Hellinger, a spokeswoman at Redwood City, California-based Oracle, also wouldn't comment.

Short sellers are betting a deal won't happen any time soon. Last week, a record 6.2 million shares of Jive were sold short, or 10.1 percent of the stock outstanding, according to data from Markit, a London-based research firm. In a short sale, traders sell borrowed stock assuming the price will drop, enabling them to profit by buying it back at a lower price.

Chief Executive Officer Tony Zingale, 56, and the rest of Jive's managers, which include co-founders Bill Lynch, 34, and Matt Tucker, 33, may not want to sell the company right away, said Cindi Profaca, an analyst at Green Brook, New Jersey-based IPOfinancial.com.

"The management team is very young, and I am sure there are many things, innovations, that they want to come up with before they just say, 'We want to sell,'" Profaca said in a phone interview. "But if the price is right, anyone would be willing to sell their company."

'In Play'

Jive closed yesterday at $20.65 a share, 6.4 times estimated 2014 sales, making it the second-most expensive stock in the Bloomberg Industries Global Application Software Index, data compiled by Bloomberg show. Companies in the index trade at a median of 3.1 times sales for that year.

While the management team may not want to sell before the social-enterprise industry expands, Jive is still probably attracting takeover interest from SAP and Oracle, said BMO Capital's Keirstead.

"My guess is Jive has been in play for a while now," he said. "Just given that a lot of these social assets have been acquired now, I have no doubt that the CEO's phone has been ringing from interested buyers."

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(BN) Top Inventor Silicon Valley to Get Own U.S. Patent Office

July 2 (Bloomberg) -- Apple Inc., Google Inc. and Intel Corp. soon won't have to travel across the U.S. to get patent protection on their latest inventions.

Silicon Valley, along with Dallas and Denver, have been selected as the new homes to regional patent offices as part of an effort to cut down on a backlog of applications awaiting review, the U.S. Patent and Trademark Office said today.

The agency, which is opening a satellite office in Detroit on July 13 and has declared a "critical need for electrical engineers," is trying to hire more examiners to cut into the 640,000 applications awaiting a first review. By expanding beyond its Alexandria, Virginia, campus, the patent office is seeking to take advantage of a pool of engineers who understand technology and can work closer to where the inventors are located.

"This is a big win for San Jose and California that will directly benefit the U.S. economy," Representative Zoe Lofgren, a California Democrat, said in a statement.

The additional offices were authorized under an overhaul of the patent system signed into law last year. About 600 applications were submitted, and the selections were based on geographic diversity, economic impact, the local workforce and proximity to companies that are submitting applications.

Innovation Hubs

"The four offices will function as hubs of innovation and creativity, helping protect and foster American innovation in the global marketplace, helping businesses cut through red tape, and creating new economic opportunities in each of the local communities," the patent office and U.S. Commerce Department said in a statement.

The Silicon Valley area, which also includes San Jose, Sunnyvale and Santa Clara, is the top recipient of patents, with more than 10,000 issued in 2010, agency figures show. The region comprising San Francisco, Oakland, and Fremont adds another 6,290 patents, the third-most behind the New York and northern New Jersey region.

California inventors were named in 28,148 patents, more than a quarter of the 108,626 patents issued to U.S. inventors in 2011. Texas was the second-highest recipient, at 7,584, and Colorado was 14th with 2,102, according to patent office statistics.

The Detroit office will add 120 jobs to the region, and the plan is for at least one of the other offices to be online within two years, said Vikrum Aiyer, a spokesman for the patent office.

The agency is hiring 1,500 examiners this fiscal year, to bring the total to 7,800 from 6,800 plus filling in for turnover. It said it expects to hire a comparable number next year, depending on a budget getting approved by Congress.

(BN) Deutsche Telekom Joins Telefonica on Mozilla Mobile-Phone System

July 2 (Bloomberg) -- Deutsche Telekom AG and Sprint Nextel Corp. will join Telefonica SA in developing an open mobile operating system powered by Mozilla Corp. to build out a range of cheaper smartphones and take on Google Inc.

Telefonica, Spain's biggest phone company, will offer the first handsets running the software in Brazil in early 2013 after previously saying the devices will be available this year, according to an e-mailed statement today. Chinese manufacturers ZTE Corp. and TCL Communication Technology Holdings Ltd. will build the devices, the statement said.

Telefonica teamed up with Mozilla, the developer of the Firefox web browser, on a rival operating system to Google's Android system to regain more control over the software that powers smartphones. By adding operators, the partners are seeking to build out a viable platform. Deutsche Telekom, Sprint Nextel, Telecom Italia SpA, Telenor ASA and Etisalat are backing the open Firefox system, according to today's statement.

"Firefox OS will deliver a higher performance than current low cost smartphones can achieve," said Matthew Key, chief executive officer of Telefonica's digital unit. "This is crucial for us to accelerate the adoption of smartphones in developing markets."

(BN) Adobe, EarthGrains, Megaupload: Intellectual Property

July 2 (Bloomberg) -- Adobe Systems Inc., the largest maker of graphic-design software, won't have to pay more than $7 million in royalties after a federal jury decided June 29 it didn't infringe a patent owned by Tarkus Imaging Inc. of San Jose, California.

The jury of seven women in Wilmington, Delaware, deliberated about four hours following a two-week trial before also deciding Tarkus's patent 6,628,823 is valid.

The suit, which was filed in 2010, accused Adobe and several camera manufacturers of patent infringement. Tarkus was founded in 2009 by an ex-employee of the Hewlett-Packard Co. to commercialize the color processing technology he invented.

According to court papers, Tarkus founder Jack M. Holm had an understanding with HP that he was the owner of the invention covered by the patent, which he then licensed to his employer on a non-exclusive basis.

The case is Tarkus Imaging Inc. v. Adobe Systems Inc., 1:10-cv-00064-LPS, U.S. District Court, District of Delaware (Wilmington).

EU Chiefs Reach Agreement on Patent System, Van Rompuy Says

European Union leaders cleared the final hurdle to an agreement on a common patent system, paving the way for improved and cheaper enforcement of intellectual-property rights.

"After 30 years of discussions on a European patent, we reached an agreement on the last outstanding issue, the seat of the Unified Patent Court," EU President Herman Van Rompuy said June 29 in Brussels after a two-day summit of European leaders.

The U.K., France and Germany each had lobbied to be the host of the seat of the court. The final compromise splits the court among the three nations.

The seat of the court's central division, along with the office of the court's president, would be located in Paris, while other departments dealing in more specialized work will be based in London and Munich. The first president of the court should come from France, the leaders said.

"The stalemate has been broken and that is a good thing," said Geert Glas, head of the intellectual-property practice at law firm Allen & Overy LLP. "With a central seat in Paris, the unitary court has a good chance to combine the best practices of the common-law -- U.K. -- and civil-law -- Germany -- traditions."

Creating a lower-cost European patent is one of several reforms that could aid innovation and economic growth, EU Internal Market Commissioner Michel Barnier said on May 16. Under the current system, companies can pay as much as 18,000 euros ($22,600) for a patent valid in only 13 countries, including 10,000 euros for translation, according to the European Commission.

The number of patents filed in the EU lags far behind other parts of the world, Barnier said. Some 135,000 patents were filed with the European Patents Office in 2009, compared with 459,000 in the U.S., 348,000 in Japan and 315,000 in China.

The EU said that the common system "will bring down patent litigation costs for businesses significantly." The European Commission has calculated that, with the single court, litigation expenses incurred by European companies can be reduced by about 289 million euros a year, it said.

Google Said to Face U.S. Antitrust Probe for Motorola Patent Use

A U.S. antitrust regulator is investigating whether Google Inc.'s Motorola Mobility unit is honoring commitments made to license industry-standard technology for mobile and other devices on fair terms, three people familiar with the situation said.

The Federal Trade Commission has issued a civil investigative demand, which is similar to a subpoena, to the owner of the Android mobile operating system as it scrutinizes whether Google is improperly blocking rivals' access to patents for key smartphone technology, one of the people said.

The agency is also seeking information from companies including Microsoft Corp. and Apple Inc. as it probes whether Google intends to license technology under patents that help operate 3G wireless, Wi-Fi and video streaming on fair and reasonable terms, another one of the people said. The people declined to be identified because they weren't authorized to speak publicly about the matter.

Another focus of the FTC probe, the person said, is Google's decision to continue litigation started by Motorola Mobility over industry-standard patents after Google bought the company. Those lawsuits could end up blocking imports of popular consumer products such as Microsoft's Xbox and Apple's iPhone and iPad.

Industry-standard technology helps ensure that different manufacturers' products, such as mobile phone antennas and global-positioning system software, work together. Companies that create technology that helps develop the agreed-upon industry standard pledge to license patents for those inventions on reasonable terms.

FTC Chairman Jon Leibowitz said March 30 the agency was "looking at" the legality of companies seeking to prevent rivals from using patents that cover technology considered essential for an industry.

Dominic Carr, a spokesman for Redmond, Washington-based Microsoft, confirmed the company received a civil investigative demand from the FTC, declining to comment further. Steve Dowling, a spokesman for Apple, based in Cupertino, California, and Cecelia Prewett, an FTC spokeswoman, declined to comment on the investigation.

"We take our commitments to license on fair, reasonable and non-discriminatory terms very seriously and are happy to answer any questions," Niki Fenwick, a Google spokeswoman, said.

For more patent news, click here.

Trademark

EarthGrains Gets Trademark Infringement Damages Doubled by Court

EarthGrains Baking Cos., a maker of packaged bread and bakery products, persuaded a federal judge in Utah that the jury award in a trademark-infringement case was insufficient.

In a June 26 order, U.S. District Judge Dale Kimball doubled the $2.3 million damages award made by a jury in April. The judge found "substantial evidence" of Leland Sycamore and his Sycamore Family Bakery Inc.'s "deliberate and intentional disregard for EarthGrains' trademark rights."

Judge Kimball said this evidence alone would justify a doubling and tripling of the damages award. The jury award was "much lower" than what EarthGrains had sought, and "the equities in the case favored EarthGrains," he ruled.

The disputed trademarks had originally belonged to Sycamore and were sold in 1998, leaving Sycamore with a limited license to use them, if he was given written approval. The marks' new owners objected, and after Sycamore continued their use, the infringement suit was filed in June 2009. The marks eventually were acquired by EarthGrains.

In April the jury found infringement and made its award. EarthGrains then filed papers seeking an increase in the award.

The case is EarthGrains Baking Cos. Inc. v. Sycamore Family Bakery Inc, 2:09-cv-00523-DAK, U.S. District Court, District of Utah (Salt Lake City).

For more trademark news, click here.

Copyright

Megaupload Judge Defers Decision on Seizure of Users' Data

A U.S. judge deferred a decision on whether the government should set up a way for Megaupload.com users to regain access to millions of gigabytes of data the company managed before being shut down as part of a criminal copyright-violation case.

U.S. District Judge Liam O'Grady in Alexandria, Virginia, heard arguments June 29 over a request by a Megaupload user, Kyle Goodwin, to order the government to create a mechanism allowing those who used the website for legitimate purposes to retrieve their data.

"We'll look at it a little further and issue an order shortly," O'Grady said at the end of the 1 1/2-hour hearing.

Investigators in January executed more than 20 search warrants in the U.S. and eight other countries and seized about $50 million in assets associated with Megaupload. Company founder Kim Dotcom was arrested in New Zealand.

Megaupload reproduced copyrighted works directly from websites including Google Inc.'s YouTube for illegal sharing and to give the false impression that a related video-sharing website hosted user-generated, rather than copyrighted, content, prosecutors allege.

Since September 2005, the conspiracy generated more than $175 million in criminal proceeds by distributing millions of copies of copyrighted works, including movies, television programs, music, books, video games and software, according to the indictment.

Of that, more than $150 million came from premium subscriptions and $25 million from online advertising, according to the indictment. A lifetime subscription cost about $260, the indictment said.

A New Zealand judge ruled June 28 that Kim Dotcom had his home searched illegally by police as part of the investigation. Dotcom is free on bail and awaiting an extradition hearing scheduled for August.

Prosecutors argued that users who had data stored with Megaupload should be required to act as unsecured creditors and file civil actions against Megaupload or Carpathia Hosting Inc., the Dulles, Virginia-based company that Megaupload paid to store the data.

Assistant U.S. Attorney Andrew Peterson compared Megaupload's data storage to that of a service provider, rather than a holder of property.

"A file-copying service is what Megaupload provided," he said.

Goodwin isn't "asking that service be restored," O'Grady responded. "He's asking for his data back, and that's property, right?"

The case is U.S. v. Dotcom, 12-00003, U.S. District Court, Eastern District of Virginia (Alexandria).

For more copyright news, click here.

Trade Secrets/Industrial Espionage

Corinthian Colleges Seeks Trade-Secret Shield During Probe

Corinthian Colleges Inc., an operator of for-profit schools, sued Illinois Attorney General Lisa Madigan seeking a state-court order shielding its confidential data while she investigates its practices.

Madigan, a Democrat, has been investigating for-profit schools for evidence they misled enrollees about post-graduation career prospects.

The company, based in Santa Ana, California, said she has asked for employee compensation data, internal policy, training and marketing manuals, strategic planning documents, personal information on ex-students and other data.

"The school desires to cooperate with defendant and at the same time protect its valuable confidential and proprietary information from disclosure to third parties and competitors," Corinthian said in a complaint filed in Chicago.

Corinthian operates more than 100 schools in the U.S. and Canada, including Everest College, Heald College and WyoTech, with an enrollment of 96,000 students according to its website.

Claiming the attorney general's procedures violate Illinois' Trade Secrets Act, the company asked for a court finding that her treatment of confidential business records is invalid and orders barring those practices and directing Madigan to protect the company's data.

The company has been unable to negotiate an agreement with the attorney general, according to its complaint.

Maura Possley, a spokeswoman for Madigan, declined to comment immediately on the company's claims. The attorney general sued Denver-based Alta Colleges Inc. in January, for allegedly violating state consumer fraud laws.

The case is Corinthian Colleges Inc. v. Illinois Attorney General, 12-CH-23872, Cook County, Illinois, Circuit Court, Chancery Division (Chicago).

(BN) Intel Planning Booming Touch Screen Demand for New Laptops: Tech

July 2 (Bloomberg) -- With demand for tablets and smartphones surging, Intel Corp. is betting that supplies of touchscreens will start to run short just as PC makers begin to introduce touch-enabled laptops and other devices.

To ensure that PC manufacturers don't get squeezed out, the chipmaker last month said it had agreed to pay four Taiwanese touch-screen makers to secure supplies of the parts.

Intel's deals reflect the difficulty of getting key components as the tablet market is poised to jump 48 percent to $66.4 billion in 2012, according to researcher DisplaySearch.

Shares of Intel partners Hewlett-Packard Co. and Dell Inc. have sagged this year as they play catch-up with Apple Inc. and Samsung Electronics Co., which together hold more than half the smartphone and tablet market. With the PC makers adding tablets and similar devices, Intel's move will prevent suppliers from favoring Apple and Samsung in selling screens.

"What's growing is tablets and smartphones," said Vinita Jakhanwal, an analyst at IHS ISuppli Corp. "It makes sense to make sure that you put your resources behind growth markets."

From 2011 to 2016 the market for tablets will grow an average of 42 percent annually, versus 9 percent average growth for notebooks, IHS predicts. In 2015, tablets, with some 314 million shipments, will overtake laptops. The smartphone market will average 22 percent growth to reach 1.27 billion units in 2016, according to the researcher.

With its strength in tablets and smartphones, Apple's shares have jumped 44 percent this year, while Samsung's are up 14 percent. By contrast, Hewlett-Packard is down 22 percent and Dell has slipped 14 percent. Intel's shares are up 10 percent.

Costly Components

Touch screens range in size from 3.5 inches to 27 inches or more. They can cost as much as $100 for smaller devices and $200 for bigger ones, making them one of the priciest elements in a computer, said Linn Huang, an analyst at IDC. Designed to respond to a user's finger and hand swipes, the screens are increasingly being used in personal computers.

Intel's projection of a possible dearth of touch-screen parts is at odds with most estimates. Huang, for example, said supply appears healthy because a flurry of smaller companies have entered the market. In addition, production has been getting more efficient.

"There are definitely more touch screens being produced than there are being shipped in to customers hands," Huang said.

Intel, the largest semiconductor maker, isn't taking any chances as it plans for the introduction of Microsoft Corp.'s Windows 8, the software maker's first mainstream computer operating system designed around a touch-screen interface.

Windows 8

The new software is aimed at stemming the inroads into computing made by smartphones and Apple's iPad. It will probably run mainly on devices powered by Intel chips.

On June 5, Intel said it had reached supply agreements with four touch-screen sensor manufacturers: TPK Holding Co., Wintek Corp., HannsTouch Solution Inc. and Cando Corp.

Under the arrangement, the touch-screen makers will provide a certain number of screens to PC makers specified by Intel. While Intel isn't paying for the screens, it will foot the bill for any unused capacity, meaning that the screen makers can set aside production without any risk. Intel and the Taiwanese companies declined to give details on the money or number of screens involved.

"We believe there's going to be more demand than current forecasts," said Bill Calder, a spokesman at Intel. "We're ensuring our customers get enough supply."

Intel's Challenge

Intel, whose processors run more than 80 percent of the world's computers, has struggled to achieve comparable success in the market for chips that run phones and tablets. The company is pushing a new line of thinner and lighter notebook computers -- called Ultrabooks -- to rekindle demand for its chips. It's also seeking to sell its products to phone and tablet makers.

While touch-screen makers have enough capacity to cope with smartphone growth, according to DisplaySearch analyst Richard Shim, laptop screens are at least three times the size of those used in phones. That means growing sales of touch-enabled notebooks would significantly increase demand. And as touch screens get larger, there's a greater chance they will have defects, Shim said.

Underpinning Intel's attempts to help its PC customers are concerns that the success of Apple and Samsung in phones and tablets strengthens their ability to jump to the front of the queue for parts.

Apple's 'Power'

"The Intel action is slightly unusual and is indicative of Apple's power over the technology supply chain," said Andrew Dailey, managing director at MGI Research in Mill Valley, California. "Intel really understands supply-chain relationships, and the fact that they are going out of their way to do this says a lot."

Apple Chief Executive Officer Tim Cook said last year that his company would spend $3.9 billion over two years on components. He said Apple had identified a critical part that it would be spending heavily on to secure supplies, though he wouldn't disclose details. Some analysts, including Katy Huberty of Morgan Stanley, have speculated the money is being used for touch panels like those Intel is now trying to secure.

South Korea's Samsung, the world's biggest smartphone maker, is also the largest manufacturer of memory chips and LCD displays. Touch screens are currently assembled separately, then layered on top of the display itself. That cumbersome process is increasingly going to be replaced by a technique where the touch capabilities are built into the display in the manufacturing process, according to Rhoda Alexander, an analyst at IHS.

'Chess Game'

Increasing integration of components and attempts to lock up supply through advance purchases are reversing the 30-year history of specialization among parts manufacturers, said Horace Dediu, an industry analyst at Asymco. According to Dediu, Apple now buys the machines used to manufacture phones and tablets and installs them in the plants of its contract manufacturers.

"The supply-chain chess game has moved beyond writing these big checks to be sure that you have right of first refusal," said Dediu.

With the help of Intel -- a company that has $13.8 billion in cash and generates about $3 billion a quarter -- the PC industry may be able to keep pace with technology and supply.

"It's very encouraging that you have a heavyweight like Intel to come in and help drive proliferation and adoption of touch technology," said Freddie Liu, chief financial officer at touch-screen sensor maker TPK. "We welcome such a strategic move."

(BN) Apple Pays $60 Million to End China IPad Dispute With Proview

July 2 (Bloomberg) -- Apple Inc. paid $60 million to settle a two-year-old legal dispute with Proview International Holdings Ltd. regarding the iPad trademark in China.

The terms of the settlement agreement were reached on June 25 and Apple has transferred the funds as agreed, the Higher People's Court of Guangdong Province announced in a statement on its website today. Apple spokeswoman Carolyn Wu didn't immediately return calls to her office and mobile phones.

The dispute had centered on whether Proview's Taiwan unit, which Apple paid 35,000 pounds ($54,800) in 2009 to use the iPad name in mainland China, had the right to sell it or whether that rested with Proview's Shenzhen unit, which held the mark. Apple sued Proview Shenzhen in 2010 claiming ownership of the iPad trademark in China and lost. Its appeal of that case was heard on Feb. 29, and the two sides had engaged in court-sponsored mediation since then.

Before the agreement, Proview had applied to Chinese customs to block shipments of Apple's iPad tablets in and out of China, and asked local retailers to stop sales of the product.

Invention vs Innovation: a "Martian" approach.

A critically important move that enables V. Propp to make a breakthrough in his analysis of the structure of fairy tales:

... можно сказать, что функций чрезвычайно мало, а персонажей чрезвычайно много. Этим объясняется двоякое качество сказки: ее поразительное многообразие, ее пестрота и красочность, с другой стороны — ее не менее поразительное однообразие, ее повторяемость.

Итак, функции действующих лиц представляют собой основные части сказки, и их мы прежде всего и должны выделить.

Для выделения функций их следует определить. Определение должно исходить из двух точек зрения. Во первых, определение ни в коем случае не должно считаться с персонажем — выполнителем. Определение чаще всего представит собой имя существительное, выражающее действие (запрет, выспрашивание, бегство и проч.). Во вторых, действие не может определяться вне своего положения в ходе повествования. Следует считаться с тем значением, которое данная функция имеет в ходе действия.

 We can use a similar approach to analyze the process of innovation. In human societies the name of the inventor/innovator matters because we motivate people by allocating resources, e.g. property and/or attention, to an individual or a group. For a "martian" who doesn't see people, but sees technologies and ideas, the names don't matter. What matters, though, is the function an invention plays in the evolution of a system.

tags: method, invention, innovation, system,

(BN) Samsung Drops After U.S. Court Blocks Nexus Phone Sales

Samsung Electronics Co. (005930), the world's top handset maker, fell the most in a week in Seoul trading after Apple Inc. (AAPL) won a court ruling blocking sales of the Galaxy Nexus smartphone in the U.S.

Samsung dropped as much as 2.4 percent to 1,172,000 won, headed for the biggest decline since June 25. The stock traded 1.9 percent lower as of 10:12 a.m., while the benchmark Kospi (KOSPI) index gained 0.2 percent.

The world's two biggest makers of high-end phones have accused each other of copying designs and technology and are fighting patent battles on four continents to retain their dominance in the $219 billion global smartphone market. Apple has sought to bar as many as 25 Samsung smartphones in addition to the Nexus model covered by the June 29 ruling, including the latest, the Galaxy S III.

"If this leads to a ban on the Galaxy S III, it could be a big problem for Samsung," Lee Sun Tae, a Seoul-based analyst at NH Investment & Securities Co., said by phone.

Sales of the Galaxy S III, the latest version in Samsung's best-selling smartphone series, started in the U.S. last month.

The ruling by U.S. District Judge Lucy Koh in San Jose, California, follows her June 26 order blocking U.S. sales of Samsung's Galaxy Tab 10.1 computer in the patent and trademark- infringement lawsuit over smartphones and tablets. On June 7, Koh expedited evidence sharing for Apple's bid to block sales of Samsung's Galaxy S III.

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(BN) Carbon Polluters, Coal Miners Pay in Australian Tax Overhaul

Australia is charging its largest polluters for carbon emissions and taxing profits of iron ore and coal producers starting today in the biggest change since 2000 in how the government collects and spends money.

The country will assess almost 300 of its largest polluters a fixed price of A$23 ($23.42) a metric ton for their greenhouse gases. Mining companies including BHP Billiton Ltd. and Rio Tinto Ltd. face a separate levy on 30 percent of earnings from iron starting today.

Prime Minister Julia Gillard, who pushed her climate law through Parliament last year, is trailing in opinion polls behind the Liberal-National coalition led by Tony Abbott, who has vowed to repeal carbon pricing. Gillard is counting on payouts and credits worth about A$30 billion over the next four years to placate Australian business and households facing higher power bills.

"When the dust settles following the furious debate that we've had about carbon pricing, I think Australians will come to see that this has been an important reform at the right time," Gillard said yesterday, according to an e-mail from her office.

Carbon pricing is Australia's main tool for meeting its target of a 5 percent cut in emissions from 2000 levels by 2020. The levy will be fixed until 2015, when the country plans to introduce a market-based system.

'No Discernible Impact'

The Treasury estimates the carbon tax will reduce gross domestic product and employment growth by less than a quarter percentage point in the fiscal year beginning July 1, and have "no discernible impact" on the nation's unemployment rate, which has hovered just above 5 percent for the past year.

The economy "will continue to prosper as Australia moves to a clean-energy future," Treasury said in its budget papers released May 8. "Around A$100 billion of investment in new clean-energy sources such as solar, wind and geothermal will be unleashed over the period to 2050."

Gillard's law creates a new tradable commodity. Each permit carries the right to emit one metric ton of greenhouse gases in Australia. While a fixed price on carbon is different from a tax, which is used in some Scandinavian countries, Abbott has accused Gillard of imposing a "toxic tax" that will be a "wrecking ball" for the economy in Australia, the world's largest exporter of thermal coal.

"On day one of a new government, the carbon tax repeal process will begin," Abbott said yesterday in Melbourne in a speech to the Federal Council of the Liberal Party, according to a transcript from his office. "On day one of a new Parliament, the carbon-tax repeal legislation will be introduced."

Higher Power Prices

Australia expects to raise A$24.7 billion over four years from the carbon levy, the government said in budget documents. Electricity prices will climb by as much as 10 percent, or an average of A$3.30 a week per household, according to Climate Minister Greg Combet, who cited Treasury modeling.

The government will provide A$9.2 billion over three years in the form of free permits to help businesses such as aluminum smelters, steelmakers and pulp manufacturers. Power generators will get A$5.5 billion, while consumers will receive A$14.9 billion through tax changes and benefits.

Australia's mining tax will raise less than half the amount forecast by its Treasury in the next two years and reduce profit estimates for groups including BHP and Rio, UBS AG said in a report dated June 22. Companies will pay A$1.8 billion in the 2013 fiscal year and A$1.4 billion in 2014, compared with government forecasts for revenue from the tax of A$6.5 billion in both years, said Glyn Lawcock, a Sydney-based analyst at UBS.

"Together with the introduction of the mining tax -- labeled the minerals resource rent tax by the Commonwealth -- this represents the largest change to the tax system since 2000," according to Kieran Davies, chief economist at Barclays Capital in Sydney.

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(BN) GE Targets Africa to Asia With Off-Grid Power Generators

General Electric Co. (GE) is focusing on developing economies from Africa to Asia as it seeks to boost sales of electrical turbines derived from jet engines and generators that can provide power by burning landfill gas.

The company is changing the way it markets and sells equipment that can provide power independent of a nation's electrical grid in an effort to increase its appeal to customers in emerging markets that may need as little as 1 megawatt of generation capacity, said Darryl Wilson, GE's president of aeroderivative gas turbines, in an interview.

The market for off-grid power equipment, from rooftop solar panels to fuel cells, that can be brought online quickly in remote areas, may grow to $100 billion a year, Fairfield, Connecticut-based GE has said. Its energy division accounted for 31 percent of the company's $142.2 billion in revenue last year, making it the largest industrial division.

"There's a significant opportunity to address these needs around the world," Wilson said by telephone yesterday from the Africa Energy Forum conference in Berlin. "In the past, customers might not have come to us unless they needed large increments of power, but now they'll be thinking of us much sooner."

GE is bundling products from its Jenbacher gas engines to its TM2500+ jet engine-derived turbines and diesel generators under a new PowerXpand-branded portfolio, the company said in a statement yesterday.

The company sold a pair of Jenbacher gas-powered engines to Diageo Plc (DGE), the maker of Guinness beer, for its breweries in Nigeria, Diageo said in a statement on June 26. Its first jet- engine derived turbine in Algeria began operation earlier this week, Wilson said.

GE, the world's biggest maker of jet engines, power generation equipment and health-care imaging devices, is increasing its focus on faster-growing, resource-rich countries from Mozambique to Peru and Australia. These markets may provide 50 percent of industrial sales by 2020, up from 37 percent last year, according to a presentation to investors in Rio de Janeiro in March.

(BN) Abound Failure Revives Debate Over Obama Solar Policies

The failure of a second solar manufacturer that received loan guarantees from the U.S. Energy Department adds to pressure on President Barack Obama to justify incentives for the clean-energy industry that's being undercut by Chinese competition.

Abound Solar Inc., a U.S. solar manufacturer that was awarded a $400 million loan guarantee in 2010, said yesterday it will suspend operations and file for bankruptcy next week.

Abound said its thin-film panels couldn't compete against Chinese products, the same reason cited by Solyndra LLC, which closed its doors in August after receiving a $535 million guarantee from the same program. Half of the four solar manufacturers that received loan guarantees have failed, supporting the argument that backing clean-energy is a mistake, according to Representative Cliff Stearns.

"We know why they went bankrupt. We warned them they would go bankrupt," Stearns, a Florida Republican, told reporters yesterday. "The larger question is why the administration was pursuing a green-energy policy in which companies are going bankrupt and wasting taxpayer money."

Stearns is chairman of the House Energy and Commerce Committee's oversight panel that has held hearings on the Energy Department's loan guarantee program.

Representative Jim Jordan, an Ohio Republican and chairman of the House Oversight and Government Reform Committee's stimulus oversight panel that has investigated loan guarantees to solar companies, said Abound's failure is further proof the Energy Department program was a mistake.

"It just adds to the weight of how ridiculous this was," Jordan told reporters.

Taxpayer Losses

Abound plans to file for bankruptcy in Wilmington, Delaware, next week and will fire about 125 employees, according to a statement yesterday.

The company, based in Loveland, Colorado, borrowed about $70 million against its guarantee. U.S. taxpayers may lose $40 million to $60 million on the loan after Abound's assets are sold and the bankruptcy proceeding closes, Damien LaVera, an Energy Department spokesman, said in a statement.

"When the floor fell out on the price of solar panels, Abound's product was no longer cost competitive," LaVera said.

Abound stopped production in February to focus on reducing costs after a global oversupply and increasing competition from China drove down the price of solar panels by half last year.

"Aggressive pricing actions from Chinese solar-panel companies have made it very difficult for an early stage startup company like Abound to scale in current market conditions," the company said in the statement.

Unbuilt Factory

Abound was awarded the loan guarantee to build two factories to make thin-film panels using cadmium telluride. It completed one plant, in Longmont, Colorado, and never began construction on the second, which was planned for Tipton, Indiana. The company last received money from the Energy Department in August, before Solyndra's collapse.

Representative Dan Burton, an Indiana Republican, said he supported Abound because he thought the company would boost his state's economy.

"We had a terrible economic problem. Plants were closing there in that area," Burton told reporters yesterday. "We thought this would be a great way to create jobs. If I had known that Abound, or Solyndra, had been in the fiscal situation it was in, I certainly would have never supported it."

No Surprise

"This is not surprising at all," Anthony Kim, an analyst at Bloomberg New Energy Finance in New York, said in an interview. "They were trying to sell to a competitive, over- supplied market with limited production. That keeps costs high."

The Energy Department has provided almost $35 billion in loans, loan guarantees and conditional commitments to renewable- energy companies. About 35 percent of that is for solar- generating projects, which benefit from falling panel prices, compared with less than 4 percent for solar manufacturers, according to LaVera.

Besides Abound and Solyndra, two other solar manufacturers received loan guarantees. 1366 Technologies Inc. won approval to borrow as much as $150 million to produce polysilicon for solar panels and SoloPower Inc. was awarded a $197 million guarantee to make rolls of flexible solar panels using a copper-indium- gallium-selenide composite.

Neither 1366 nor SoloPower have drawn funding under the Energy Department program, LaVera said.

(BN) Japan Clean Energy Funding to Double as Incentives Start

Renewable energy investments in Japan may double as companies from mobile phone provider Softbank Corp. (9984) to battery maker GS Yuasa Corp. (6674) take advantage of government payment incentives beginning July 1.

The government initiative will require utilities to buy power from renewable energy providers at premium prices under so-called feed-in tariffs. As a result, investment in solar, wind and other forms of clean energy may jump to $17.1 billion from $8.6 billion in 2011, Bloomberg New Energy Finance estimates.

"The level of interest in clean energy is at its highest ever," Yugo Nakamura, an analyst at New Energy Finance said. "The national government has shown strong commitment to renewables by setting generous feed-in tariff rates."

The tariffs are part of efforts to cut Japan's dependence on nuclear power following the Fukushima disaster last year, which forced the closure of all reactors in the country for safety checks. They also aim to curb a surge in imports of fossil fuels to switch on non-nuclear plants that cost utilities an additional 2.3 trillion yen ($29 billion) in the year ended March 2012 and pushed the country into a trade deficit for the first time since 1980.

Industry researchers and business lobby groups say the generosity of the subsidy, which is paid for by consumers in higher electricity bills, will require frequent reviews to prevent a boom and bust scenario that played out in Europe.

Scaling Back

Germany, Italy, Spain, France and the U.K. are scaling back feed-in tariffs for solar energy after a bigger than expected boom in installations made the subsidies unsustainable.

Japan should consider cutting solar tariffs every month or two, setting a cap on installations and matching tariffs with international levels, said Kenji Asano, a researcher who studies renewable energy at the Central Research Institute of Electric Power Industry in Tokyo.

"It is important not to introduce too much solar power," Asano said. Geothermal power is the most ideal source of clean energy for Japan, he said.

The earthquake and tsunami that crippled the station at Fukushima last year caused radiation leaks, mass evacuations and power shortages, splitting politicians and industry leaders about the future of atomic energy.

New Plan

Noda on June 16 approved restarting two reactors. No timetable has been set for restarting any of the country's 48 other reactors offline.

The government in Tokyo is debating long-term policies on where it will derive power, with a final decision due in August.

"The new energy blue print will paint an ambitious plan to increase power supply from renewables from 10 percent in 2010 to 25-35 percent by 2030," BNEF said in a report.

For solar, the subsidized rate utilities pay is 42 yen (53 cents) a kilowatt-hour for 20 years, about triple the rate industry users pay for conventionally-generated power. Wind gets 23.1 yen per kilowatt-hour for 20 years. The incentives also cover biomass, geothermal and small hydroelectric plants.

"There should be a regular review of the program including the possibility of scrapping the program," Keidanren, Japan's most powerful business lobby, said on June 1 in reference to the feed-in tariffs.

Softbank, Japan's third largest mobile phone company, will begin operations at a 2.1 megawatt-facility in Kyoto prefecture and a 2.4-megawatt station in Gunma July 1. It plans to build several plants with more than 200 megawatts of solar capacity, according to the company's renewable energy unit SB Energy Corp.

"We are getting more and more inquiries," said Yasushi Yamamoto, a spokesman for GS Yuasa, which makes power conditioners that convert direct current from solar panels into alternating current suitable for the power grid. "We are preparing to produce about twice as much as last year."

Worker Shortage

Solar projects could be delayed by shortages of workers and power conditioners, Takashi Watanabe, who led research on feed- in tariffs for Goldman Sachs Group Inc. in Tokyo, said in a June 18 report. There are a limited number of manufacturers of power conditioners used in large-scale projects and delivery is three to six months, the note said.

The majority of solar projects will begin in the second half of the fiscal year, between October and March, the Goldman report said.

"There could be a shortage of workers" because work on other projects that depend on government funding hits peak between January and March, the Goldman Sachs analysts said.

The current tariffs will be good until March 31, 2013.

The industry minister will set the terms and rates paid each year, or every six months if necessary. Costs will be passed on to consumers in the form of surcharges, which the government estimates will total 87 yen ($1.10) a month for average households.

"Feed-in tariff is the first step," said BNEF's Nakamura. "But that is not enough," he said, adding that the cost of clean energy must decline, deregulation is needed and grid infrastructure needs to be upgraded.

"Geothermal has the potential if Japan pushes through deregulation," Asano said. "It is good for Japan because it is not intermittent" like power from solar and wind.

(BN) Toyota Seeks BMW Sports-Car Expertise in Technology Links

Toyota Motor Corp. (7203) said it will seek to gain from Bayerische Motoren Werke AG (BMW)'s expertise in sports cars as a partnership on new powering systems expands to include auto components and high-performance vehicles.

The carmakers will collaborate on developing fuel cells, lightweight materials and electric powertrains under a memorandum of understanding signed today, they said at a press conference at BMW's Munich headquarters.

"BMW knows how to make a car perform," Toyota President Akio Toyoda said at the briefing with Norbert Reithofer, the German company's chief executive officer. Toyota's strength in hybrid-powered models and fuel cells will help BMW, and "I am the one who is most looking forward to a sports car that is environmentally friendly," Toyoda said.

BMW, the world's biggest luxury carmaker, is already spending 530 million euros ($667 million) to develop the I sub- brand of electric cars to keep its worldwide sales lead over Volkswagen AG (VOW)'s Audi division and Daimler AG's Mercedes-Benz. The BMW i3 electric compact and i8 hybrid supercar will go on sale in 2013 and 2014, respectively.

It's too early to say whether the cooperation between BMW and its Toyota City, Japan-based partner will develop into any joint ventures, and any possibilities will be evaluated in coming months, Reithofer said.

Agreement Terms

Toyota is the world's biggest maker of hybrid vehicles, which can operate on both electricity and gasoline or diesel fuel. It signed an agreement on Dec. 1 to work with BMW on boosting performance of lithium-ion batteries, which are used in hybrid or all-electric vehicles. The companies said they would explore other projects to develop technology for reducing fuel consumption and emissions.

BMW ended talks on fuel-cell cooperation with Detroit-based General Motors Co. (GM), the German company said on June 27. Fuel cells make electricity in a chemical process that combines hydrogen and oxygen, with water vapor as the only exhaust.

Toyota's hybrid Prius became the world's third-best-selling car in the first quarter as 247,230 were delivered, propelling the Japanese manufacturer back into the global auto sales lead ahead of GM. Since the Prius went on the market in Japan in 1997, Toyota has sold 4 million hybrid-electric vehicles worldwide, including 1.5 million in the U.S., the company said May 22.

The Japanese manufacturer introduced a gasoline-powered sports car, the 86, in Japan in April. The model is sold as the Scion FR-S in the U.S.

Joint Research

Research partnerships have become standard in the auto industry as manufacturers look to reduce development expenses to meet stricter emissions regulations.

"For the BMW group, strategic partnerships are an essential part of our strategy," Reithofer said. "It is one way of securing long-term access to customers and technologies."

BMW works with PSA Peugeot Citroen (UG) on engines for the Mini brand and on components for hybrid vehicles. Those projects are under review after GM took a stake in the Paris-based manufacturer as part of a broader alliance.

Same technology, different S-curves, different results.

Using solar power in areas where there's no power grid, e.g. in Asia and Africa, looks a lot more promising and cost-effective than introducing the same solar power technology in mature energy systems in the US or Europe.

(MIT Tech Review, June 8, 2012). Diesel is a major source of power in south Asia and Africa, where many areas lack access to the grid and frequent blackouts prompt those who can afford it to install backup generators. These markets could help a solar industry that’s struggling with low profit margins due to an oversupply of panels. In turn, the lower prices for solar power could speed up deployment in poor countries by providing a more economical alternative to diesel-powered pumps and generators, and a much faster path to electrification than waiting for grid infrastructure.

One of the first economical applications for solar is replacing diesel-powered irrigation pumps, Gopalan says. These pumps don’t have to run at night, so batteries aren’t needed, keeping costs down. “The total available market in India alone is 15 to 20 gigawatts, and irrigation pumping is a massive application in all of Asia and Africa,” he says. For perspective, the current total installed capacity for solar power is 65 gigawatts, according to the management consulting firm McKinsey.

In Asia and Africa, introduction of the technology does not depend on infrastructure investment. Furthermore, as recent power outages in the US show, the bottleneck in the energy system is not power generation, but power distribution.  Also, Germany's introduction of "green" energy involves massive investment into new distribution lines. As a result, adoption of the same technology in different areas produces dramatically different economic outcomes.

This difference is obvious to me on the personal level as well. Every day I walk my dog by our local high school. Two years ago it used a government subsidy and a local bond to install solar panels to cover its parking lot. Paradoxically, during the summer months when the largest amount of solar power is generated, the school is not in session. Therefore, the power cannot be used locally and has to be distributed through the grid - with losses - to remote users. In other words, there's a fundamental mismatch between the power generation and the power use patterns.

In contrast, the MIT article cited above talks about a solar panel installation in Asia that feeds irrigation pumps. Because the pumps have to work the hardest when there's a lot of sunshine, solar-based power generation and power consumption by the pumps are almost perfectly synchronized. Therefore, there's no need to store or distribute the power - with inevitable losses - to other users.

As we can see, economic efficiency of the same technology is quite different in these two cases. Here in California, we face a trade-off: the "greener" the energy, the more expensive it is. Opposite to that, in Asia the trade-off is broken: the "greener" the energy, the cheaper it is. Clearly, the technology's upside is much greater there.

tags: s-curve, synthesis, growth, distribution, infrastructure, niche construction, 4q diagram, market

(BN) News Corp. Publishing Profit Drop Tests Murdoch Strategy

June 29 (Bloomberg) -- News Corp. Chairman Rupert Murdoch's fondness for newspapers won't be enough for investors to overlook declining profit at the publishing company he plans to spin off.

Operating income at the company's publishing unit, which includes the Wall Street Journal, New York Post and Times of London, dropped 32 percent from fiscal 2008 to 2011, according to data compiled by Bloomberg. A shift to the Web has cut industry advertising and circulation revenue, while News Corp.'s entertainment units, including Fox networks and the Twentieth Century Fox film studio, increased profit by 13 percent.

"It's pretty clear that the publishing assets are an ice cube," said Don Yacktman, president of Austin, Texas-based Yacktman Asset Management Co., the fourth-largest holder of News Corp.'s Class A nonvoting shares with a 4.8 percent stake. "If you look at what's happened in classified advertising with the Internet, the whole industry is hurting."

While the new company will start with cash reserves and no debt, analysts project revenue and profit declines. For the year that ends this month, sales at the publishing unit will drop 7 percent to $8.2 billion, estimates Brett Harriss, an analyst with Gabelli & Co. in Rye, New York. Earnings before interest, taxes, depreciation and amortization will slide 18 percent to $1.13 billion, he says. The New York Post loses as much as $110 million annually, he estimates.

"Times of London loses money, and so does the New York Post," Ken Doctor, an analyst with Outsell Inc., a research firm focused on the publishing industry. "Even with cash reserves to start, they'll have to make cuts."

Newspaper Values

The publishing company is being spun out without debt because it doesn't generate enough profit to support interest payments, according to a person familiar with the planning discussions.

In an interview yesterday, Murdoch, 81, projected optimism for the publishing group, suggesting that news is a valuable commodity and mobile devices such as Apple Inc.'s iPad and Amazon.com Inc.'s Kindle Fire will create new revenue sources. While the company will cut jobs at its Australian newspapers, overall he's looking to invest in the business to make it grow.

'More Valuable'

"Our publishing business is more valuable than people give us credit for," Murdoch said by telephone. "There are great digital opportunities in publishing, and net-net, around the world, we'll be increasing our numbers and increasing our costs and hopefully increasing revenues as well."

Murdoch said Dow Jones & Co., the publisher of the Wall Street Journal, will be the "center of this whole thing."

"We think the Wall Street Journal, which we may call the WSJ, will be a really great global brand," Murdoch said on CNBC yesterday.

News Corp. shares rose 1.4 percent to $22.29 at the close in New York. The shares had gained 11 percent in the two days after the New York-based media company first announced it was considering a breakup.

Murdoch had long resisted splitting off the declining publishing business, said two people familiar with the matter. He told his lieutenants at News Corp. they hadn't proven to him that a standalone publishing company could survive on its own, pointing out the company had said the opposite for months.

Newspaper Rivals

Other newspaper operations haven't fared well on their own. Shares of publisher A.H. Belo Corp. are off 75 percent, and E.W. Scripps Co. has lost 0.7 percent since splitting from their television siblings in 2008, according to data compiled by Bloomberg.

Discussions to spin off News Corp. publishing picked up in the last few months, according to the people. After three straight quarters that internally were viewed as evidence of strong operations, News Corp. shares continued to lag behind rivals. Chief Operating Officer Chase Carey, Chief Financial Officer David DeVoe and others concluded investors would always discount the company due to the newspapers, said these people.

Carey and others also made the point in meetings that the company had grown so large that high-priority decisions were being delayed or slipping through the cracks, according to these people. A separate newspaper and publishing company could get more attention with a dedicated CEO, they said.

In recent months, Murdoch embraced the idea that there were investors for a standalone publishing company, such as Vanguard Group Inc. and Alden Global Capital Ltd., which own stock in McLean, Virginia-based Gannett Co., the largest U.S. publisher, and McClatchy Co., based in Sacramento, California.

New CEO

Murdoch, who will lead the entertainment unit as chief executive officer and is searching for a CEO for the publishing group, also told colleagues he'd be happy not to answer any more questions from analysts or investors about why he was spending money on newspapers, these people said.

It was apparent in meetings that Murdoch wanted to be able to argue publicly the move wasn't a concession to critics, regulators or investors, said the people.

Dan Berger, a spokesman for News Corp., declined to comment on the company's internal discussions.

Bloomberg LP, the parent of Bloomberg News, competes with News Corp. units in providing financial news and information.

Murdoch said breaking up News Corp. had nothing to do with the phone-hacking scandal at the company's U.K. newspaper unit, which has threatened the company's holdings in satellite-TV company British Sky Broadcasting Group Plc. Ofcom, a U.K. media regulator, is considering whether News Corp. should be allowed to keep its 39 percent stake in BSkyB.

"This was purely a business decision that the company would be better this way," Murdoch said on Bloomberg Television.

(BN) LinkedIn Says Twitter Posts No Longer Displayed on Site

June 29 (Bloomberg) -- LinkedIn Corp., owner of the world's biggest professional-networking website, said posts from Twitter Inc. will no longer be displayed on its site, as the microblogger encourages users to visit its own services.

LinkedIn users had been able to show the posts, known as tweets, on their accounts since 2009, the Mountain View, California-based company said on its blog. LinkedIn said members can still send updates to Twitter from their LinkedIn accounts by checking a box for tweets when they compose updates.

Twitter has been increasing its focus on getting more users to look at tweets through its own website and on mobile applications, as it seeks to boost advertising revenue. The company expects to generate at least $1 billion in advertising revenue in 2014, two people familiar with the forecast said this month.

"They don't want people to consume and interact with Twitter in places where they probably have no ability to put ads," said Greg Sterling, an analyst at Opus Research.

Twitter, in an earlier blog post today, said the company is focused on helping users.

"We're building tools for publishers and investing more and more in our own apps to ensure that you have a great experience everywhere you experience Twitter, no matter what device you're using," the company said on its blog.

The changes come as San Francisco-based Twitter is expanding the content users can post on its service, known for its 140-character tweets.

LinkedIn, citing Twitter's blog, said the switch was motivated by Twitter's efforts to create a "consistent set of products and tools" for its microblogging service.

"We know many of you value Twitter as an additional way to broadcast professional content beyond your LinkedIn connections," LinkedIn said on the blog. "Moving forward, you will still be able to share your updates with your Twitter audience by posting them on LinkedIn."

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