Monday, April 08, 2013

(BN) Waistline Index Grows as Emerging Markets Eat Fast Food

April 4 (Bloomberg) -- Fast food and expanding waistlines are not just an American health concern.

Even as McDonald's Corp., Yum! Brands Inc. and Domino's Pizza Inc. work to placate anti-obesity advocates at home, they're taking high-calorie offerings to other parts of the globe and hooking a new generation in emerging markets. Their target customers, often part of a rising middle class with a more sedentary lifestyle, are in turn putting on the pounds.

Eating less home cooking, and consuming more processed snacks and sugary drinks, the average man is gaining weight in Mexico, Brazil and Chile faster than the worldwide average, according to the Waistline Index compiled by Bloomberg. The women are too, except in Brazil, where they are holding to the global average. In all three countries, fast food is a relatively new option.

The foreign influx is in some ways similar to the one 300 years ago, when the conquistadors brought smallpox and measles to native civilizations in Central and South America, said Tim Lobstein, director of policy and programs at the International Association for the Study of Obesity in London.

"The parallel now is the big transnational corporations also setting foot in these remote areas and bringing non- communicable diseases," such as obesity, diabetes and heart disease, Lobstein said in an interview.

Increases in these diseases, the rising cost of medical care and worries about childhood obesity may force the food companies to change some practices abroad and push them into new markets to achieve their desired growth. Already, legislators in Brazil are considering restrictions on marketing by fast-food companies.

Weight Gains

Men in Mexico gained an average of more than 15 pounds (6.8 kilograms) from the opening of the first U.S. fast-food outlet in 1985 through 2010, while the nation's women added more than 19 pounds, according to the research conducted by Bloomberg. In Chile, men have gained 14 pounds on average since the first American chain opened in 1989, while women's weight has increased 18 pounds.

Those figures top the global average. Around the world, men gained about 11 pounds in the 30 years through 2010 and women about 10 pounds, according to the data.

Health problems related to changes in diet and lifestyle have been well documented. Death rates in Brazil and Mexico from cardiovascular disease and diabetes surpassed those in the U.S. in 2008, the most recent data available from the World Health Organization. Chile trails those two with a death rate from the diseases close to that of the U.S.

Diabetes Rates

The diseases are also affecting Asian nations, though obesity rates are lower there. In China, where Yum has more than 5,200 locations, the rate of diabetes will surpass that of the U.S. by 2030, according to the International Diabetes Federation in Brussels. KFC, which sells a fried sausage burger and popcorn chicken in China, is expanding to smaller cities in the Asian nation.

"The science clearly links eating out with obesity," said Margo Wootan, nutrition policy director at the Center for Science in the Public Interest, a Washington-based advocacy group. "Restaurants need to realize that eating out is a big part of people's diets and they have an important role to play."

It's not just fast-food companies that are responsible, said Michael Schaefer, the Chicago-based head of global consumer foodservice research at Euromonitor International. People also are consuming more processed and packaged foods from grocery stores and moving to cities, where they lead hectic lives and don't have time to exercise, he said.

"Fast-food chains, because they're so heavily branded, are not surprisingly going to come to be identified with that," Schaefer said. "But it's not the sole driving factor."

McDonald's Visits

The companies point to other influences on diet.

"The average McDonald's customer visits us two to three times per month, therefore the vast majority of meals are eaten elsewhere," Becca Hary, a McDonald's spokeswoman, said in an e- mail.

McDonald's rose 1.4 percent to $100.63 at the close in New York. The shares have gained 14 percent this year, compared with a 9.4 percent gain for the Standard & Poor's 500 Index.

U.S. fast-food chains accelerated their overseas expansion in the 1980s and 1990s as their home market grew saturated. The recession that ended in 2009 spurred more store openings abroad, especially in emerging markets with growing middle classes. Yum gets about three-quarters of its revenue from outside the U.S., while McDonald's gets more than 60 percent from its international business.

Lifelong Customers

The cheap, high-calorie fare and advertising strategies aimed at creating lifelong customers that worked so well in the U.S. have proved effective abroad as well. In Chile, the McDonald's menu includes a 949-calorie, two-patty Angus burger, three cheese empanadas with 357 calories and an Oreo-cookie frappe.

Andrea Xavier's six-year-old son is among the new Brazilian devotees of American fast food.

"He'd eat here every day if he were allowed; he asks all week," Xavier, a 34-year-old maid, said during an interview at a McDonald's in Rio De Janeiro. "He always sees the television ads, sees all the boys there getting Happy Meals: 'Let's go there!'"

The restaurant in Rio de Janeiro was decorated with balloon animals, cut-out butterflies and bunny masks. A poster advertising a live show by Ronald McDonald hung on the wall.

Yum Brazil

Yum recently hired a general manager to open a Sao Paulo office and accelerate growth beyond its 100 restaurants in the most-populous South American nation, where the company's KFC chain sells black beans, double-decker chicken sandwiches and chocolate mousse sundaes. Muktesh Pant, head of Louisville, Kentucky-based Yum's international business, said the company sees Brazil as a "huge opportunity."

Pizza chains also are expanding their presence in Central and South America. Domino's, which has more international than domestic locations, is Mexico's biggest U.S. brand, with 19 percent of the market, according to the data compiled by Bloomberg. The Ann Arbor, Michigan-based chain sells pizza, chicken wings and baked ham baguette sandwiches and offers canelazo bites -- biscuits baked with cinnamon -- for dessert.

Domino's, which had 5,327 international shops and 4,928 in the U.S. at the end of last year, could "easily" add 2,700 stores in its 10 most developed international markets, Chief Executive Officer J. Patrick Doyle said at an investor conference last month.

"It's going to be a long time before we're going to hit any kind of a cap on our ability to grow in international," Doyle said.

African Market

Along with South and Central America, fast-food chains have been heavily focused on Southeast Asia and India. Africa may be next. KFC, with 700 locations in South Africa, is expanding in Lesotho, Namibia and Zambia. Domino's is opening in Nigeria and Macedonia, and Yum has said it plans to accelerate growth with its Pizza Hut and Taco Bell chains in South Africa.

Still, the food chains may face resistance from health authorities. Brazil, where men gained almost 19 pounds from 1980 to 2010, is considering a law that would prohibit toys from being given away with kids' meals at restaurants.

"We need to have the law approved," Fabio da Silva Gomes, an officer for the Brazilian Ministry of Health's National Cancer Institute in Rio de Janeiro, said in a telephone interview. Children go to fast-food chains for the toys and are "hooked by the hyper-palatable food," he said.

Menu Changes

The companies have already been forced to make changes in menus and tactics in the U.S. McDonald's, the world's largest dining chain by sales, will later this month start selling an egg-white breakfast sandwich with just 250 calories. Burger King Worldwide Inc. began selling a veggie burger in March.

In 2011, McDonald's began putting apple slices and smaller packets of fries in its kids' Happy Meals, reducing the calorie count by 20 percent. The chain also was forced by a city ordinance to stop giving away toys with its Happy Meals in San Francisco.

In Latin America, McDonald's has cut the sodium in its kids' meals, which have less than 600 calories a meal, by 10 percent, said Hary, the company's spokeswoman.

"We believe that all food can be part of a balanced diet with appropriate exercise," Virginia Ferguson, a Yum spokeswoman, said in an e-mail. KFC uses trans-fat free cooking oil and has lower-calorie and lower-fat items in Latin America, she said.

'A Treat'

"Pizza is not an everyday meal, it is a treat," Tim McIntyre, a Domino's spokesman, said during an interview. "Consumers have full control of determining how indulgent that treat is" because they can customize crusts and toppings, including the amount of cheese, he said.

American consumers will have to do a lot more to undo the damage of the last few decades. American men have gained about 19 pounds, on average, from 1980 to 2010 and women are about 18 pounds heavier, among the fastest weight gains in the world.

(BN) Apple, Ford, Chilling Effects: Intellectual Property

April 8 (Bloomberg) -- Apple Inc., the maker of the iPhone and iPad, is seeking a patent on a technology that will make it possible to present street-level imaging in a mobile device.

Application 20130083055, published in the database of the U.S. Patent and Trademark Office April 4, is for position- tracking subsystems and onboard sensors that enable a mobile device's virtual navigation of a location in panoramic imagery.

When the device is moved through space, translation data can be used to move up or down a street, or even into a commercial establishment, or navigate a turn at an intersection.

Cupertino, California-based Apple filed its patent application in September 2011.

Google Seeks U.S. Probe of Patent Privateering Defended by Nokia

Google Inc., joined by BlackBerry, urged U.S. regulators to investigate whether some competitors violate antitrust laws by hiring companies to file patent-infringement suits for them.

There's been a rise of so-called privateers, which obtain patents from technology companies and then file infringement lawsuits against the sellers' competitors, Google and BlackBerry said in an April 5 filing with the U.S. Federal Trade Commission and Department of Justice. Internet service provider EarthLink Inc. and Red Hat Inc., the largest seller of Linux operating- system software, also joined the submission.

The filing was part of broader comments by the companies on so-called patent assertion entities, which obtain patents for the sole purpose of extracting royalties. Such companies "impose an ever-rising tax on innovative industries," Google, owner of the most widely used search engine, said in the filing.

"We are also concerned with, and suggest that the agencies should seriously examine, the outsourcing of patent enforcement by operating companies -- companies that develop technology and sell products -- to PAEs and the competitive implications of such activities," Google and BlackBerry wrote. "So-called privateering amplifies the threat to innovation and competition already posed by PAEs."

Nokia Oyj, Microsoft Corp., BT Group Plc's British Telecom and Alcatel-Lucent are among companies connected with these licensing firms. Companies that would, in the past, assert their patents in lawsuits to protect their property now say they work with privateers to make money from past research.

In a typical lawsuit, competing companies accuse each other of infringing patents and then reach a cross-licensing agreement, which lowers the amount of money that has to change hands. That type of resolution isn't possible when one side doesn't make any products, and therefore doesn't have to fear a retaliatory lawsuit.

By transferring patents to such a firm, for a cut of any revenue from a settlement or fees, a manufacturer can get a financial reward while insulating itself and its products from infringement claims and limiting its legal costs, Google and BlackBerry said.

Google said assertion entities can increase the cost of licensing because a portfolio can be split among multiple privateers, each demanding a royalty. That's especially true when the larger company has patents that relate to technology used across the industry.

"These arrangements (and others) between operating companies and PAEs can, depending on the facts, transgress the antitrust laws," Google and BlackBerry wrote.

Trademark

Ford Seeks to Register 'Inflatable Light Urban Vehicle' Mark

Ford Motor Co., the 110-year-old U.S. automaker, has filed an application to register the term "inflatable light urban vehicle (iLuv)" as a trademark, according to the database of the U.S. Patent and Trademark Office.

There is also a separate "iLuv" application filed on the same date in mid-March. The company said both will be used with autos.

Ford, based in Dearborn, Michigan, may be considering making a foldable car or a small three-wheeled electric vehicle for crowded cities, the Ford Inside News blog suggested.

Harare Dynamos Soccer Team's Trademark Awarded to Creditor

A soccer club in Zimbabwe lost its trademark name and logo to a Cypriot financial company to which it owes money, the Harare Herald reported.

A civil court in Zimbabwe granted Qotho Finance a default judgment against the Harare Dynamos, according to the newspaper.

The debt is only $4,900, and club officials told the newspaper that the debt issue "is being attended to" and should be resolved within a week.

The order giving Qotho the trademark was handed down in mid-March, according to the Herald.

Bar Owner Drops 'Husker' Moniker After Complaint From University

The owner of Barry's, a sports bar in the University of Nebraska's home town of Lincoln, was told he had to drop the use of the university's "Husker" nickname in the bar's name, the Lincoln JournalStar reported.

Kevin Fitzpatrick told the JournalStar that while he is removing all references to "Husker," he wonders why other businesses in the state -- including a crematorium, a steakhouse and a law firm -- are permitted the use of the term.

Michael Drucker of Atlanta-based Collegiate Licensing Co., which licenses the school's trademark, told the newspaper the issue with permitted use is whether customers might mistakenly think a 'Husker' business has a relationship to the university.

Because the bar is two blocks from campus, its use of the school colors and the "Husker" mark were more likely to give people the impression the school endorsed the bar, the JournalStar reported. 

Copyright

Chilling Effects Clearinghouse Targeted in Takedown Requests

The Chilling Effects Clearinghouse, a project of San Francisco's Electronic Frontier Foundation and several law schools, is the target of a number of takedown requests filed by Microsoft Corp. and other content owners.

Function of Chilling Effects is the reporting of takedown requests made under the Digital Millennium Copyright Act. Those who have received cease-and-desist requests from content owners have been forwarding those notices for posting on the Chilling Effects blog.

According to Google Inc.'s Transparency Report, the search- engine company receives an average of two requests per week to take down content from the Chilling Effects website.

Google statistics indicate that Chilling-Effects takedown request have been received from Microsoft Corp., NBCUniversal, Warner Brothers Entertainment Inc., and the brand-protection company Marketly LLC.

Prometheus, Penske Media Settle Source-Code Copyright Dispute

Prometheus Global Media LLC, a content company operated by Guggenheim Partners LLC, has settled a copyright-infringement suit brought by Penske Media Corp., according to a court filing.

The case was filed in federal court in Los Angeles in September 2011. Penske, which does business as PMC and is the published of Variety, accused Prometheus of copying the computer source code used on PMV's TVLine.com website.

In the complaint, PMC alleged that Prometheus -- publisher of the Hollywood Reporter -- not only misappropriated the source code. The company also filed to remove the "digital fingerprints that identified the content as PMC's.

In settlement of the case, Prometheus agreed to pay Penske $162,5000. Additionally, Prometheus was given the option of releasing a statement acknowledging that it had copied the source code, apologized, compensated PMC, and the dispute has been resolved. Each party was to pay its own attorney fees and litigation costs.

The case is Penske Media Corp. v. Prometheus Global Media LLC, 2:11-cv-07560-FMO-MRW, U.S. District Court, Central District of California (Los Angeles).

Vkontakte to Appeal Infringement Damages Award to Singer Maksim

Vkontakte, Russia's largest social network, said it will appeal an order requiring it to pay damages to the Russian singer Maksim for unauthorized use of her music on the Vkontakte website, the Russia Beyond the Headlines news website reported.

Vkontakte has been the target of copyright-enforcement activities by Recording Industry Association of America, a music-industry trade group that has called the social media site one of the world's worst pirates, according to the news website

The social media site blocks unauthorized file-sharing only after receiving a complaint from the owner of the content, Beyond the Headlines reported.

Saturday, April 06, 2013

(BN) SEC Approves Using Facebook, Twitter for Company Disclosures (1)

April 3 (Bloomberg) -- U.S. companies will now be able to post their earnings on Twitter or update their status on Facebook as long as investors have been told in advance where to look.

The U.S. Securities and Exchange Commission issued guidance yesterday permitting companies to use social media sites including Facebook Inc. and Twitter Inc. to communicate company announcements. The guidance came as part of a report detailing its investigation into Netflix Inc. Chief Executive Officer Reed Hastings, who in July posted monthly viewership results on his Facebook page rather than in an SEC filing or news release.

The SEC refrained from bringing an enforcement action against Hastings or Netflix, which runs a subscription service for watching television programs and movies, because rules around using social media for company disclosures had been unclear, the agency said.

"Most social media are perfectly suitable methods for communicating with investors, but not if the access is restricted or if investors don't know that's where they need to turn to get the latest news," George Canellos, acting director of the SEC's enforcement division, said in a statement.

The SEC confirmed that a regulation prohibiting companies from disclosing material information to select investors applies to social media and other emerging means of communication the same way it applies to company websites. Company communications made through social media channels could constitute a violation of the fair disclosure rule known as Regulation FD if investors had not been told in advance where the information would be posted, the SEC said.

'A Good Thing'

Social media "has tremendous potential to level the playing field for participants in the markets," said Stephen Diamond, a securities law professor at Santa Clara University's School of Law. The report "shows a commission that's being flexible and responsive, and it shows a government agency that actually thinks innovation is a good thing."

Some investor advocates are less sanguine about the policy change. Lynn Turner, a former chief accountant at the SEC, called it "bad policy" because it will disadvantage investors who don't use Facebook and Twitter.

'Dumber' Idea

"Many investors, especially those over 50, who in the aggregate have the most invested, still do not use social media," Turner said in an e-mail. "Telling someone who does not use Twitter to go to Twitter for significant investment information is one of the dumber ideas I have heard."

Jim Prosser, a spokesman for San Francisco-based Twitter, declined to comment.

"We welcome, and certainly agree with, the SEC's finding that Facebook is an established means for companies and individuals to share and disseminate information broadly," Menlo Park, California-based Facebook said in a statement.

While the agency didn't explain exactly how a company should inform investors about social media use, the new guidance will give companies greater comfort in communicating with investors via Facebook and Twitter, said David Katz, a partner at law firm Wachtell, Lipton, Rosen & Katz.

"Do I see it as a sea change? No," Katz said in a telephone interview. "But investor relations has moved into the 21st century and the SEC has caught up."

Facebook Post

Hastings stirred controversy over SEC disclosure guidelines when he wrote in a July 3 post on Facebook's website that viewing on Netflix's video-streaming service had "exceeded 1 billion hours for the first time" in June. The incident led to calls for the SEC to broaden its rules to allow social media to be used to communicate to investors.

In December, Hastings and Netflix each received a Wells Notice, indicating SEC staff intended to pursue enforcement action in the matter. That same month, Hastings said that posting to his Facebook contingent of 200,000 followers "is very public."

Netflix said it welcomed the SEC's guidance. "We appreciate the SEC's careful consideration and resolution of this matter," spokesman Joris Evers said in a statement.

Gene Goldman, a partner at law firm McDermott Will & Emery LLP, said the report provides companies a road map for staying out of trouble.

"But the next time material information is disclosed on an executive's Facebook page without the company alerting all shareholders to look there for information, the matter will likely be met with an SEC lawsuit instead of a report," Goldman said.

(BN) Cyberattacks Abound Yet Companies Tell SEC Losses Are Few

April 4 (Bloomberg) -- The 27 largest U.S. companies reporting cyber attacks say they sustained no major financial losses, exposing a disconnect with federal officials who say billions of dollars in corporate secrets are being stolen.

MetLife Inc., Coca-Cola Co., and Honeywell International Inc. were among the 100 largest U.S. companies by revenue to disclose online attacks in recent filings with the Securities and Exchange Commission, according to data compiled by Bloomberg. Citigroup Inc. reported "limited losses" while the others said there was no material impact.

Those mixed messages have triggered a debate over whether Washington is overstating the damage from cyber attacks or whether companies are understating its impact -- or not disclosing the attacks at all. It also raises questions about whether some companies are painting more alarming scenarios for politicians than for their investors.

"There is a clear discrepancy between what companies are reporting to their stockholders and what they're declaring to policy makers," said Sascha Meinrath, vice president of the New America Foundation, a Washington-based policy group. The confusion harms the ability of legislators and agency officials to understand cybersecurity, Meinrath said.

Representative Mike Rogers, a Michigan Republican who leads the House Intelligence Committee, has said foreign intruders "are stealing literally billions" of dollars from companies. Army General Keith Alexander, head of U.S. Cyber Command and the National Security Agency, called cybercrime "the greatest transfer of wealth in history."

SEC Guidance

After a wave of cyber attacks hit a Federal Reserve website, the New York Times and other news outlets, and U.S. banks, President Barack Obama issued an executive order in February to better protect businesses and critical assets, such as pipelines and power grids.

The challenge for companies is that regulators want more information about cyber attacks yet businesses don't want to provide hackers with a road map to their networks.

The SEC issued guidance in October 2011 telling companies to disclose cyber attacks or risks if that information is material, meaning it would affect an investor's willingness to buy, hold, or sell the company's stock. The business may have to describe the financial fallout of an attack if it's "reasonably likely" to lead to reduced revenue or higher costs, the guidance states.

'Appropriate Disclosure'

Decisions about material impact are made by companies, though SEC staffers may ask how they made those calls. Agency officials say the guidance is working. "We don't think there is a need for a rule requirement at this time," James Daly, SEC associate director, said in a phone interview.

More than 70 percent of investors are interested in reviewing company cybersecurity practices, according to a survey of 405 investors released in February by the security firm HBGary Inc.

"For the sake of investors, the SEC needs to figure out a way of enforcing the appropriate disclosure of material cyber attacks," said Jacob Olcott, who led a congressional review as counsel to Senator Jay Rockefeller, a West Virginia Democrat, that resulted in the SEC guidance.

Olcott is now a principal at Good Harbor Security Risk Management, a Washington-based consulting firm.

Cyber attacks are more likely to be material for some companies than others, Brian Lane, a former SEC corporation finance director, said in an interview. "Ask yourself which company's stock would plummet if investors learned a hacker had access to company files?" said Lane, a partner at Gibson, Dunn & Crutcher LLP.

Disrupted Operations

Almost all of the top 100 U.S. companies by revenue said they rely on technology that may be vulnerable to security breaches, theft of proprietary data and disrupted operations, according to a review of their most recent annual reports.

"I would bet some are just not being forthcoming," Lance Hoffman, director of George Washington University's Cyber Security Policy and Research Institute, said in an interview.

Companies including Amazon.com Inc., Comcast Corp. and Verizon Communications Inc. have been asked by the SEC over the past year to disclose more about cyber attacks than they volunteered in 2011 annual reports.

H. Roger Schwall, SEC assistant director for corporation finance, wrote to ConocoPhillips Chief Financial Officer Jeff Sheets on Sept. 26 asking the company to disclose "actual and attempted breaches" and provide a cyber risk section.

Attack Targets

ConocoPhillips, one of at least six major U.S. and European energy companies reported by Bloomberg to have been breached by China-based hackers beginning in 2009, said in its 2012 annual report no cyber breaches "had a material effect."

Daren Beaudo, a spokesman for ConocoPhillips, declined to comment beyond the filings.

Coca-Cola acknowledged its "information systems are a target of attacks," in its 10-K and said the disruptions "to date have not had a material effect on our business, financial condition or results of operations."

The company was told by the FBI that hackers broke into its computers to steal files about its aborted $2.4 billion bid for China Huiyan Juice Group in 2009, Bloomberg reported in November. Coca-Cola didn't mention the incident in SEC filings.

Coca-Cola doesn't comment on security matters, said Petro Kacur, a company spokesman.

Material Analysis

If a company doesn't disclose an attack in an SEC filing that was reported in the news media, "don't be surprised if we ask you to provide us with a materiality analysis," Jim Lopez, an SEC branch chief for disclosure operations, said at a Washington conference in February.

David Kepler, an executive vice president for Dow Chemical Co., said in prepared testimony for a March 7 Senate hearing the company is "regularly" attacked "from sources that are advanced, persistent and targeting our intellectual property."

Dow only made passing reference to cyber threats in its annual report Feb. 15, putting the risks on par with severe weather events.

"There is a disconnect," Stewart Baker, a former Homeland Security Department official and now a Washington-based partner at Steptoe & Johnson LLP, said in an interview. "All that intellectual property that the government sees leaving the country is coming from somewhere."

Dow's annual report documents principal risks in keeping with the SEC guidance, Rebecca Bentley, a spokeswoman, said in an e-mail. "Our 10K information is structured to provide the appropriate balance and level of detail regarding Dow's most significant risk drivers," she said.

Expensive Fixes

While Verizon said in its 2012 10-K the cyber attacks it experienced haven't been material, the company said the potential costs of a major assault include "expensive incentives" to keep customers, a jump in security spending, lost revenue and damage to the company's reputation.

Spokesmen Ed McFadden of Verizon, Mark Costiglio of Citigroup; Victoria Streitfeld of Honeywell International and John Calagna of MetLife declined to comment.

Marty Mosby III, a bank analyst and managing director at Guggenheim Securities LLC, said the SEC disclosures show cyber attacks are no greater threat than hurricanes or natural disasters. Bank management teams say strikes are disruptive to customers without being a financial drain, Mosby said in a phone interview.

Larry Ponemon, chairman of the Ponemon Institute, a data protection research firm in Traverse City, Michigan, has been reviewing the SEC filings. "A majority of companies are taking a minimalist approach and they're disclosing a bare minimum so they don't get in trouble," he said.

(BN) VirnetX, Reuters, DreamWorks: Intellectual Property

April 4 (Bloomberg) -- VirnetX Holding Corp. said it filed a request for a new trial after losing a patent-infringement lawsuit against Cisco Systems Inc.

In a statement yesterday, VirnetX Chief Executive Officer Kendall Larson said the company hopes that "with a new trial, a jury can decide the issues of infringement and damages based on the judge's instructions and the merits of our claim."

In March, a jury in Tyler, Texas, cleared the networking- equipment maker of allegations it infringed inventions related to virtual private networks. VirnetX was seeking $258 million in damages.

Doug Cawley of McKool Smith PC, a lawyer representing VirnetX, argued Cisco used the technology to improve security in its own networks. A virtual private network allows a website owner to interact securely with a customer or give an employee working remotely protected access to a company's electronic files.

VirnetX won a $368.2 million verdict against Apple Inc. in November over the same technology, including two of the same patents, before a different Tyler jury. In 2010, Zephyr Cove, Nevada-based VirnetX reached a $200 million settlement with Microsoft Corp. over the same inventions.

The case against Cisco focused on the San Jose, California- based company's routers, software and phones that have virtual- private networking functions including its Unified Communications Manager product, Telepresence or AnyConnect.

VirnetX relies on patent licensing for its revenue. The company is testing its Gabriel Connection Technology to create secure communications links, according to its annual report.

The case is VirnetX Inc. v. Cisco Systems Inc., 10- cv-00417, U.S. District Court, Eastern District of Texas (Tyler).

Thomson Reuters Patents System to Rank Lawyers, Professionals

Thomson Reuters Corp., the New York-based specialty publishing house, received a patent on a method of rating lawyers and other professionals.

Patent 8,412,564, was issued April 2, according to the database of the U.S. Patent and Trademark Office. It covers a "system and method of identifying excellence within a profession."

The patented technology depends on peer nomination and the peer evaluation of the top-ranking candidates scored in an independent research and objective evaluation process.

Thomson Reuters applied for this patent in April 2008, with the assistance of Boston's Edwards Wildman Palmer LLP.

Trademark

Danish Games Company Can Use 'Opus Dei' Trademark, Court Says

Opus Dei, the organization of Catholic clergy and laity that was heavily featured in "The DaVinci Code," failed in its attempt to stop a Danish games company from using "Opus Dei" for the name of one of its games, the Copenhagen Post reported.

A Danish court said Dema Games Asp's "Opus Dei --Existence After Religion" game doesn't fall into any categories that would conflict with the religious group's trademark, according to the newspaper.

Initially the Danish patent office rejected Opus Dei's challenge to the games company's mark. When that was unsuccessful, took it the issue to the Danish court that specializes in IP disputes, the Post reported.

In addition to losing the case, Opus Dei was ordered to pay the games company's 45,000 Danish kroner ($7,756) legal fees, according to the Post.

Suffolk County Raid Nets $10 Million in Counterfeit Goods

Authorities in Suffolk County, New York, charged five people with trademark counterfeiting, racketeering, conspiracy and money laundering in connection with a haul of fake goods so big a tractor trailer and seven box trucks were needed to cart the goods away, the Suffolk County District Attorney said.

The seized goods included fake handbags, sunglasses, shoes, and machinery used to create fake counterfeit designs, according to a statement by prosecutors.

District Attorney Thomas J. Spota said the accused defendants were buying fake made-in-China handbags for $2 each and selling them for as much as $25. If the handbags were sold on the street or at an at-home handbag party, they would have fetched as much as $100, according to the statement.

Among the brands featured on the fake products was LVMH Moet Hennessy Louis Vuitton SA's Louis Vuitton. Spota said a genuine Louis Vuitton bag costs from $1,000 to $4,000.

Among the other brands that showed up on the counterfeit goods were Coach, Tory Burch, Michael Kors, Jimmy Choo, Nike, Oakley, Prada, Chanel and Kate Spade. The retail value of the seized merchandise is in excess of $10 million, prosecutors said.

The defendants laundered their profits by buying jade and other jewels, and real estate, with some of the rest of the money sent to banks in China and to pay for real estate investments there and in Manhattan, Florida and California.

Estee Lauder Sued by Texas Cosmetics Company Over 'Shy' Mark

Estee Lauder Cos.' Clinique Laboratories unit was sued for trademark infringement by a Texas-based cosmetics company.

Sara Cosmetics Inc., of Richardson, Texas, objects to Clinique's use of "Shy" in connection with some of its lipstick and blush products. Sara Cosmetics registered the term as a U.S. trademark in February 2011, according to the complaint filed April 2 in federal court in Dallas.

Clinique is also accused of using look-alike packaging that includes "adornments of green aloe leaves" that are allegedly substantially similar to the packaging used by Sara Cosmetics. Packaging design is protected under U.S. trademark law.

The Texas company said customers are likely to be confused and that it is harmed by Clinique's actions.

Sara Cosmetics asked the court to bar further infringement of its mark and packaging, and for awards of money damages, including lost profits. Additionally, the Texas company asked the court for extra damages for what it claims is "oppression, fraud, malice and gross negligence" on Clinique's part, and also seeks awards of attorney fees and litigation costs.

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

The case is Sarah Cosmetics Inc. v. Clinique Laboratories LLC, 3:13-cv-01362-M, U.S. District Court, Northern District of Texas (Dallas).

Copyright

DreamWorks Fails to Win Dismissal of 'Kung Fu Panda' Suit

DreamWorks Animation SKG Inc. has to face a copyright infringement suit over its "Kung Fu Panda" film, a federal judge in Boston ruled.

U.S. District Judge Joseph L. Tauro, rejecting the Glendale, California-based film studio's bid to have the suit dismissed, ruled that Boston artist Jayme Gordon raised enough genuine issues of material fact in the February 2011 case to bar an early end to the litigation.

Gordon contends he first created his Kung Fu-fighting panda in "the early 1990s" and registered his copyright in 2000. He began selling clothing items featuring his characters through a retail store in the 1990s and had costumes made depicting some of them. The characters appeared at promotional events in and around Boston and were displayed on his website, luckylizard.com, he said.

Gordon said he sent his illustrations and stories to the animation division of DreamWorks in the 1990s. He received a rejection letter in October 1999 acknowledging receipt of the work, according to his complaint.

Gordon claimed that DreamWorks' "King Fu Panda" films and other products feature "characters, character depictions, character personality traits, illustrations, expression, settings, story elements, plot and sequences of events that are unlawful copies and derivatives" of his "Kung Fu Panda Power" work.

He asked the court to order DreamWorks to pay him money damages, attorney fees and litigation costs and to acknowledge he is an author and creator of the "Kung Fu Panda" products.

The judge said in his March 28 ruling that DreamWorks Chief Executive Officer Jeffrey Katzenberg provided "conflicting testimony" about his procedure for handling unsolicited submissions made to the studio. He also said it was unusual that Gordon never got back his submitted material.

These discrepancies need to be addressed by the court, the Tauro said. A court must decide whether DreamWorks independently developed the film or was influences by Gordon's submissions, he said.

The case is Jayme Gordon v. DreamWorks Animation SKG Inc., 1:11-cv-010255-JLT, U.S. District Court, District OF Massachusetts (Boston).

St. Louis University May Sue Professors for Infringement

The American Association of University Professors' St. Louis University chapter may face copyright-infringement allegations if it releases a survey aimed at measuring the mood on campus, the St. Louis Post-Dispatch reported.

The professors group had taken exception with a survey released by SLU administrators that contained only one question about the school's president, about whom they claimed there was much campus discontent, according to the newspaper.

General counsel for the school sent an e-mail to the president of the faculty organization warning that its survey is too similar to the administration's, and that the school may file an infringement suit, and have to pay money damages and the school's attorney fees, the Post-Dispatch reported.

In response, the president of the faculty group has filed a complaint with the American Civil Liberties Union, saying its free-speech rights are being violated, the newspaper reported.

(BN) Google Seeks Probe of Patent Privateers Defended by Nokia

April 5 (Bloomberg) -- Google Inc., joined by BlackBerry, today urged U.S. regulators to investigate whether some competitors violate antitrust laws by hiring companies to file patent-infringement suits for them.

There's been a rise of so-called privateers, which obtain patents from technology companies and then file infringement lawsuits against the sellers' competitors, Google and BlackBerry said in a filing with the U.S. Federal Trade Commission and Department of Justice. Internet service provider EarthLink Inc. and Red Hat Inc., the largest seller of Linux operating-system software, also joined the submission.

The filing was part of broader comments by the companies on so-called patent assertion entities, which obtain patents for the sole purpose of extracting royalties. Such companies "impose an ever-rising tax on innovative industries," Google, owner of the most widely used search engine, said in the filing.

"We are also concerned with, and suggest that the agencies should seriously examine, the outsourcing of patent enforcement by operating companies - companies that develop technology and sell products - to PAEs and the competitive implications of such activities," Google and BlackBerry wrote. "So-called 'privateering' amplifies the threat to innovation and competition already posed by PAEs."

Nokia Oyj, Microsoft Corp., BT Group Plc's British Telecom and Alcatel-Lucent are among companies connected with these licensing firms. Companies that would, in the past, assert their patents in lawsuits to protect their property now say they work with privateers to make money from past research.

Privateer Arrangements

In a typical lawsuit, competing companies accuse each other of infringing patents and then reach a cross-licensing agreement, which lowers the amount of money that has to change hands. That type of resolution isn't possible when one side doesn't make any products, and therefore doesn't have to fear a retaliatory lawsuit.

By transferring patents to such a firm, for a cut of any revenue from a settlement or fees, a manufacturer can get a financial reward while insulating itself and its products from infringement claims and limiting its legal costs, Google and BlackBerry said.

Google said assertion entities can increase the cost of licensing because a portfolio can be split among multiple privateers, each demanding a royalty. That's especially true when the larger company has patents that relate to technology used across the industry.

"These arrangements (and others) between operating companies and PAEs can, depending on the facts, transgress the antitrust laws," Google and BlackBerry wrote.

Google, FTC

Mountain View, California-based Google has been the target of an FTC investigation over the patent-licensing practices of its Motorola Mobility unit, which was accused of demanding unfairly high royalties for patents on industry standards. Google reached a settlement with the FTC on the issue in January.

In the filing, Google and BlackBerry singled out a pledge Nokia made to license all of its patents for mobile-phone standards at a 2 percent royalty. Were a company like Nokia to split some of its standard patents among three different entities, it would increase the total cost to 8 percent, Google said.

An investigation into the privateering model "would provide a foundation for the antitrust agencies to assess whether the solutions to the competitive concerns patent outsourcing arrangements pose lie in antitrust enforcement, in changes in the patent laws (where the antitrust enforcement agencies might play an important advocacy role), or elsewhere."

'Important Channel'

In a Dec. 10 hearing held by the FTC and DOJ, Espoo, Finland-based Nokia defended the practice.

"Often we do not have the resources or otherwise are not best positioned ourselves to exploit those inventions, either through our own products or through our own licensing activities," Paul Melin, Nokia's chief intellectual property officer, said on a panel. "Divestments of patents have become a very important channel for us to monetize and realize the value of our research and development."

Waterloo, Ontario-based BlackBerry and Nokia signed a patent-licensing deal in December to resolve disputes between the two companies. That agreement didn't end a suit against BlackBerry by MobileMedia Ideas LLC, a licensing company that holds former Nokia and Sony Corp. patents. MobileMedia also won a December trial against Apple Inc., which has a patent agreement with Nokia, too.

It can be difficult to identify who is profiting from a patent suit. One lawsuit against Google is by Suffolk Technologies, whose owners include Goldman Sachs Group Inc., General Atlantic Partners LP and Boston Consulting Group Inc., according to a Dec. 7 court ruling on the ownership question.

The patents originated with BT's British Telecom, which transferred them with an agreement it would get at least half the proceeds from the patent, the judge said.

Google retaliated by suing British Telecom in February, accusing it of infringing four patents. Google had bought three of the patents from International Business Machines Corp. and the fourth from Fujitsu Ltd. It marked the first time Google had sued any company for patent-infringement.

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

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

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

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

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

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

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

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

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

Samsung Presses Apple Rivalry With Best Buy Mini Stores

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

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

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

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

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

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

Trademark

General Motors Again Seeks to Register 'Chevelle' Trademark

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

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

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

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

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

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

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

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

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

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

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

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

Music Copyright Society's Royalty Collection Legal, Court Rules

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

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

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

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

Copyright

Google, SACEM, Universal Music Reach YouTube Distribution Accord

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

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

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

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

Zookal's Textbook Rental Model Infringes, Publishers Claim

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

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

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

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

Trade Secrets/Industrial Espionage

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

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

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

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

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

Wednesday, April 03, 2013

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

E. Digital Files Patent Suits Against Tech Companies, Retailers

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

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

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

Trademark

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

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

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

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

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

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

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

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

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

Copyright

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

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

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

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

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

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

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

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

For more copyright news, click here.

Trade Secrets/Industrial Espionage

Wisconsin Researcher Accused of Economic Spying for China

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

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

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

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

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

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

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

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

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

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

Tuesday, April 02, 2013

Creativity Quote of the Day: the World Wide Web.

In preparation for The Greatest Innovations of Silicon Valley course (BUS 117, Stanford University CSP, Fall '13), I'm re-reading Weaving the Web, by Tim Berners-Lee et al (Harper. 2000). Here's what he had to say about the process of invention:
Journalists have always asked me what the crucial idea was, or what the singular event was, that allowed the Web to exist one day when it hadn’t the day before. They are frustrated when I tell them there was no “Eureka!” moment . . . Inventing the World Wide Web involved my growing realization that there was a power in arranging ideas in an unconstrained, weblike way. And that awareness came to me through precisely that kind of process. The Web arose as the answer to an open challenge, through the swirling together of influences, ideas, and realizations from many sides, until, by the wondrous offices of the human mind, a new concept jelled. It was a process of accretion, not the linear solving of one problem after another.
This is very similar to the events that resulted in Edison's "invention of the light bulb." There's no historical evidence that the famous "light bulb moment" occurred in his head. Instead, it was a steady progress toward finding a suitable light bulb filament.

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

tags: creativity, quote, invention

Monday, April 01, 2013

(BN) EMC Losing Ground as Smartphones Displace RSA Tokens

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

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

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

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

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

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

Mobile Features

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

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

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

Token Alternatives

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

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

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

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

'Gradual Erosion'

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

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

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

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

'Security Pain'

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

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

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

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

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

'Two Minutes'

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

Trademark

Facebook Must Face Trademark Trial Over 'Timeline' Feature

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

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

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

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

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

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

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

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

Copyright

Vivendi Wins Copyright Ruling in Used-Digital-Song Case

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

Trade Secrets/Industrial Espionage

Ex-Bud Worker Accuses Company of Shakedown Over Diluted Beer

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

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

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

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

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

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

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

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

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

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

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

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

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

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

Trademark

Penn Accuses California Company of Being Wharton Imposter

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

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

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

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

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

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

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

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

Del Monte Barred From Some Labeling, Product-Dating Practices

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

DuPont Drops Trademark-Infringement Suit Against Easton-Bell

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

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

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

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

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

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

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

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

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

Trade Secrets/Industrial Espionage

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

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

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

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

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

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

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

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

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

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

Invention of the Day: Egyption Water Clock.

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


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

tags: invention, problem, discussion, innovation