Gonzaga Intellectual Property Law Association Blog

“Who Dat” NFL

It’s OK folks, it looks like the NFL “Who Dat” IP claim is a big misunderstanding.  Just a big misunderstanding which evolved from the NFL probing and putting official vendors and non-official vendors alike on notice that sale of goods bearing the “who dat” slogan associated with the New Orleans Saints football team would result in prosecution.  It turns out the NFL’s beef is with vendors selling merchandise bearing official NFL trademarks in combination with the phrase “who dat.”

Legitimate concern?  Yes.  However, the concern lies with the use of official symbols trademarked by the NFL.  The chant – “Who dat say dey gonna beat dem Saints” – is often shortened to “Who Dat” on shirts and signs and has been a tradition at the Superdome since the 1980s.  Saints fans, still excited after the Saints’ win over the Minnesota Vikings for their first Super Bowl appearance, have voiced their dismay on radio talk shows, blogs and Web site posts. Many say it’s something that simply can’t be owned.

The Huffington Post reports, “The NFL doesn’t cut much slack when it believes it owns a trademark. This case is no exception.

In an e-mail, league spokesman Brian McCarthy said the NFL has sent a handful of letters in the past year asking vendors to stop selling “Who Dat” merchandise. The unlicensed shirts led fans to believe the Saints endorsed the product, he said.

“This helps protect the local businesses that are selling legitimate Saints merchandise and also the local printers that are making the licensed Saints apparel,” he said.

Meanwhile, WhoDat Inc., controlled by longtime Saints fans and brothers Sal and Steve Monistere, also claims rights to the phrase.

In 1983, Steve Monistere produced the song “Who Dat Say They Gonna Beat Dem Saints” with Aaron Neville and several Saints players.

In a statement Thursday, WhoDat Inc. said that before that recording, there were no branded items with the motto. The brothers said the company has the only federal trademark for “Who Dat.” Steve Monistere said he and his brother were at the Saints’ first game in 1967 and have been fans through all the ups and downs – mostly downs, of course.

Two members of Louisiana’s congressional delegation – Republican Sen. David Vitter and Democratic Congressman Charlie Melancon – took public umbrage at the NFL.

Vitter wrote NFL Commissioner Roger Goodell, urging the league to concede that “Who Dat” is in the public domain. Otherwise, Vitter said he will print and sell T-shirts with “WHO DAT say we can’t print Who Dat!” on them.

“Please either drop your present ridiculous position or sue me,” Vitter wrote.

Later Friday, NFL vice president Jeffery Miller told Vitter in a letter that the league is narrowly targeting Who Dat products “only when those products contain or are advertised using other trademarks or identifiers of the Saints.” - Huffington Post

Loyola Law School intellectual property professor Ray Arieaux said the ownership of ‘Who Dat’ may be a gray area.

“Is there some unfair trade taking place because maybe the public does associate that with the Saints? The question is what does the public associate with ‘Who Dat,’” Arieaux asked.

Posted by: Philip Matthews, Law Student at the Gonzaga School of Law

Links: ESPN, WWLTV

IP for Coco?

Conan O’Brien is no longer the host of “The Tonight Show,”  but his IP legacy lives on.  While on “Late Night” and “The Tonight Show,”  Conan introduced a litany of skits and characters such as: the Masturbating Bear, Pimpbot 5000, and Conando.  Triumph the Insult Comic Dog’s future is still uncertain since he may be the property of Conan’s longtime friend Robert Smigel.  Recurring segments such as In the Year 3000 and Desk Driving are now also property on NBC Universal. 

This type of IP severance is not new in the entertainment industry.  In 1993, David Letterman got into a fight with NBC when he departed “Late Night” for the CBS “Late Show.”  NBC attorneys attempted to prevent Letterman from taking intellectual property originated on “Late Night” to his new home.  Letterman responded by dropping certain bits and renaming other recurring segments: “Viewer Mail” became “CBS Mailbag” and frequent guest Larry “Bud” Melman began referring to himself by his real name, Calvert DeForest.  Letterman mocked the dispute on his first “Late Show” when NBC anchor Tom Brokaw interrupted the monologue and stole cue cards in the name of securing NBC’s intellectual property.

I’ll be looking for the Masturbating Bear to make an appearance on NBC’s Law & Order as an undercover officer, Biggest Loser as a contestant, or even Dateline as their newest anchor. 

Posted by: Philip Matthews, Student at the Gonzaga School of Law

Links: TMZ, tv.com 

Is Forum Shopping in the Eastern District of Texas in a Recession (Part II)?

On December 17, 2009, in In re Nintendo Co., __ F.3d __, 2009 WL 4842589, in another strongly worded opinion, the Federal Circuit held that “the district court clearly abused its discretion in denying Nintendo’s motion to transfer venue under 28 U.S.C. § 1404(a)” and granted a petition for a writ of mandamus to the defendant-petitioners’ preferred choice of venue—Western District of Washington.  Id. at *1. 

In finding that the district court “clearly abused its discretion,” the Federal Circuit summarized its high-level concerns with the district court’s decision:

As in Volkswagen, TS Tech, Genentech, and this court’s most recent decision, In re Hoffmann-La Roche Inc., Misc. No. 911, 2009 WL 4281965 (Fed.Cir. Dec. 2, 2009), this case features a stark contrast in relevance, convenience, and fairness between the two venues. See [In re] Volkswagen [of Am., Inc.], 545 F.3d 304 [(5th Cir. 2008)]; [In re] TS Tech [USA Corp.], 551 F.3d 1315 [(Fed. Cir. 2008)]; [In re] Genentech[, Inc.], 566 F.3d 1338 [(Fed. Cir. 2009)]. This court has held and holds again in this instance that in a case featuring most witnesses and evidence closer to the transferee venue with few or no convenience factors favoring the venue chosen by the plaintiff, the trial court should grant a motion to transfer. See, e.g., Hoffmann, 2009 WL 4281965; Genentech, 566 F.3d 1338; TS Tech, 551 F.3d 1315.

Id. at *2.  And, the Federal Circuit also summarized its specific issues with the district court’s decision:

As in TS Tech and Volkswagen, the district court clearly abused its discretion in denying transfer from a venue with no meaningful ties to the case. See TS Tech, 551 F.3d 1315; Volkswagen, 545 F.3d 304. The district court: (1) applied too strict of a standard to allow transfer; (2) gave too much weight to the plaintiff’s choice of venue; (3) misapplied the forum non conveniens factors; (4) incorrectly assessed the 100-mile tenet; (5) improperly substituted its own central proximity for a measure of convenience of the parties, witnesses, and documents; and (6) glossed over a record without a single relevant factor favoring the plaintiff’s chosen venue.

Id. at *5.

As to the specific issues, the Federal Circuit explained that “[t]he convenience and cost of attendance for witnesses is an important factor in the transfer calculus” and that

[b]ecause inconvenience for witnesses increases with distance from home, the Fifth Circuit established the “100-mile” guideline. Volkswagen, 545 F.3d at 317. Under this tenet, “[w]hen the distance between an existing venue for trial of a matter and a proposed venue under § 1404(a) is more than 100 miles, the factor of inconvenience to witnesses increases in direct relationship to the additional distance to be traveled.” Id.

All of the identified key witnesses in this case are in Washington, Japan, Ohio, and New York. No witnesses live in Texas. Even without including the four Japanese witnesses who would each have to travel an additional 1,756 miles or 7 hours by plane to Texas as compared with Washington State, the average travel required for each of the remaining six identified witnesses to Texas is approximately 700 miles more than to Washington. Furthermore, four of the identified witnesses live in Washington, and no witnesses live in Texas. The district court erroneously determined that the cost of attendance for willing witnesses only “slightly favors transfer.” On this record, this court does not agree with the district court’s assessment of the 100-mile tenet. See TS Tech, 551 F.3d at 1320 (holding that the district court’s refusal to considerably weigh this factor in favor of transfer was erroneous when the witnesses would need to travel approximately 900 more miles to attend trial in Texas than in Ohio). The cost of attendance for willing witnesses clearly favors transfer.

Id. at * 3. 

The Federal Circuit also pointed out that the district court “erred in considering as neutral the relative ease of access to sources of proof.”  Id. at *4.  This conclusion is not surprising given the facts as stated by the Federal Circuit: “Neither Motiva nor Nintendo have any relevant documentation or any other evidence in the Eastern District of Texas, the plaintiff’s choice of venue. Nintendo informed the district court that the majority of NOA’s relevant documents are located within the transferee venue. The record also shows that all of Nintendo’s research and development documents are located in Kyoto, Japan.”  Id.  The Federal Circuit explained the district court’s approach to neutralize this factor and its errors:

Notwithstanding this evidence, the district court assumed that Nintendo’s relevant documents were equally spread between its headquarters in Japan and Washington, and minor satellite offices in California and New York. By including these minor offices in the equation, the trial court hypothesized that the Eastern District of Texas could serve as a centralized location. This court has already questioned this type of reasoning in another case involving the Eastern District of Texas. See id. at 1344 (holding that it is improper to consider the centralized location of the Eastern District of Texas when no identified witness resides in the district). Because most evidence resides in Washington or Japan with none in Texas, the district court erred in not weighing this factor heavily in favor of transfer.

Id.

Lastly, the Federal Circuit highlighted that the district court apparently repeated another error that had resulted in the Federal Circuit granting a writ of mandamus in TS Tech—using “the plaintiff’s choice of venue as a factor in the analysis of a request to transfer for the convenience of the parties.”  Id. at *4.  The Federal Circuit explained:

the Fifth Circuit forbids treating the plaintiff’s choice of venue as a factor in the analysis of a request to transfer for the convenience of the parties. 551 F.3d at 1320. Instead, “the plaintiff’s choice of venue corresponds to the burden that a moving party must meet in order to demonstrate that the transferee venue is a clearly more convenient venue.” Id. This court held that the district court in that case gave too much weight to the plaintiff’s choice of venue by affording the plaintiff’s choice considerable deference. This court granted mandamus, determining that the petitioner met its burden to establish that the district court clearly abused its discretion in denying transfer. Id. at 1322-23. This case appears to repeat the erroneous methodology that led this court to grant mandamus in TS Tech. Id. The district court gave the plaintiff’s choice of venue far too much deference.

Id.

Time will tell if the Hoffmann-La Roche and Nintendo decisions put a dent in forum shopping directed at the Eastern District (or other venues perceived as plaintiff-friendly) or the district court’s amenability to forum non conveniens motions.  In any event, the cautionary tale for litigators is that it may be in our client’s best interest to choose a venue with enough factors to avoid a costly venue challenge rather than reach for the district viewed as the most favorable for plaintiff’s.

David W. Higer

Is Forum Shopping in the Eastern District of Texas in a Recession (Part I)?

It has been a bad month for plaintiffs and the United States District Court for the Eastern District of Texas.  I am sure that all of you who litigate patents are well aware of the plaintiff’s haven that the Eastern District has been for the last decade.  And I also am sure that many of you have pondered with colleagues and clients if there is some way to file your next patent lawsuit in the Eastern District.  Two recent decisions from the United States Court of Appeals for the Federal Circuit (applying Fifth Circuit law) serve as a stark reminder to plaintiffs (and district courts) that a plaintiff’s choice of venue is not assured of being upheld (or that it necessarily should be upheld) against a challenge from a defendant based on forum non conveniens grounds.

On December 2, 2009, in In re Hoffmann-La Roche Inc., __ F.3d __, 2009 WL 4281965, the Federal Circuit held that “the district court clearly abused its discretion in denying petitioners’ motion to transfer venue pursuant to 28 U.S.C. § 1404(a)” and granted a petition for a writ of mandamus to the defendant-petitioners’ preferred choice of venue—Eastern District of North Carolina.  Id. at *1. 

As the Federal Circuit explained, mandamus could issue “only upon a showing that the facts and circumstances underlying the district court’s application of the public and private forum non conveniens factors do not rationally support the district court’s decision, i.e., the district court reached a “patently erroneous” result or committed a “clear” abuse of discretion.”  Id. at *2 (citing In re Volkswagen of Am., Inc., 545 F.3d 304, 312 (5th Cir. 2008)(emphasis in original)).

The “private” interest factors include: (1) the relative ease of access to sources of proof; (2) the availability of compulsory process to secure the attendance of witnesses; (3) the cost of attendance for willing witnesses; and (4) all other practical problems that make a trial easy, expeditious and inexpensive. Piper Aircraft Co. v. Reyno, 454 U.S. 235, 241 n.6 (1981). The “public” interest factors to be considered are: (1) the administrative difficulties flowing from court congestion; (2) the local interest in having localized interests decided at home; (3) the familiarity of the forum with the law that will govern the case; and (4) the avoidance of unnecessary problems of conflicts of law or in the application of foreign law. Volkswagen, 545 F.3d at 315.  

Id. at *2 n.1.

In finding that the district court “clearly abused its discretion,” in a swipe at both plaintiff’s counsel and the district court, the Federal Circuit explained:

[T]here is a stark contrast in relevance, convenience, and fairness between the two venues. The accused drug was developed and tested within the Eastern District of North Carolina and documents and sources of proof remain there despite Trimeris now having moved its headquarters to the Middle District of North Carolina. Moreover, the Eastern District of North Carolina’s local interest in this case remains strong because the cause of action calls into question the work and reputation of several individuals residing in or near that district and who presumably conduct business in that community. In addition, there are at least four non-party witnesses residing within 100 miles of the Eastern District of North Carolina, all of whom could be compelled for both deposition and trial testimony if the case were transferred to the district. Furthermore, the district’s less congested docket suggests that the Eastern District of North Carolina may be able to resolve this dispute more quickly.

Meanwhile, there appears to be no connection between this case and the Eastern District of Texas except that in anticipation of this litigation, Novartis’ counsel in California converted into electronic format 75,000 pages of documents demonstrating conception and reduction to practice and transferred them to the offices of its litigation counsel in Texas. But, if not for this litigation, it appears that the documents would have remained a source of proof in California. Thus, the assertion that these documents are “Texas” documents is a fiction which appears to be have been created to manipulate the propriety of venue.

This type of tactic was clearly counseled against in Van Dusen v. Barrack, 376 U.S. 612 (1964). There, the Supreme Court explained that Section 1404(a) “should be construed to prevent parties who are opposed to a change of venue from defeating a transfer which, but for their own deliberate acts or omissions, would be proper, convenient and just.” Id. at 625. A plaintiff’s attempts to manipulate venue in anticipation of litigation or a motion to transfer falls squarely within these prohibited activities. The district court’s contrary position here has no legally rational basis and prevents § 1404(a) from carrying “out its design to protect litigants, witnesses and the public against unnecessary inconvenience and expense. . . .” Continental Grain Co. v. The FBL-585, 364 U.S. 19, 27 (1960).

Id. at *2–3.

The Federal Circuit went on to explain that the district court gave too much weight to one witness (Dr. Chang) residing in Texas because the witness was beyond the deposition subpoena power of the court and that the district court had misapplied controlling precedent regarding “absolute subpoena power.”  Id. at *3–4.

And, as the final deficiency in the district court’s approach, with respect to the local interest of the case the Federal Circuit explained that the district court also disregarded controlling precedent “in holding that the Eastern District of North Carolina had no more of a local interest in deciding this matter than the Eastern District of Texas.”  Id. at *4.  The Federal Circuit explained the difference in local interest and its impact:

The Eastern District of North Carolina’s interest in this matter is self-evident. Meanwhile, it is undisputed that this case has no relevant factual connection to the Eastern District of Texas. The district court ignored this significant contrast, reasoning that “where a number of private interest factors weigh heavily in one direction, that venue has a slightly greater local interest,” but “[w]here, however, the factors do not weigh heavily in one direction of [sic] the other, no one venue has more or less a meaningful connection to the case than any other.” By relying exclusively on how other forum non conveniens factors weigh, rather than assessing the locale’s connection to the cause of action, the district court essentially rendered this factor meaningless. Therefore, because the Eastern District of North Carolina has a meaningful local interest in adjudicating the dispute and no meaningful connection exists with the Eastern District of Texas, this factor also favors transfer.

Id.

Case two and the takeaway tomorrow . . ..

David W. Higer

TabletMac

Over the past year endless tech. articles have speculated the release of an Apple Tablet Computer.  Conjecture as to its amenities, size, and release date has run rampant.  Now, Apple fanatics have new news to salivate over.  Apple recently acquired the trademark “TabletMac” from Axiotron.

On the USPTO website, the description reads “[c]omputer accessories, namely, computer conversion kits and parts thereof, consisting primarily of enclosures, housings, frames and mounts, input and output components, and cable assemblies, adapters and connectors.”

A couple of years ago Axiotron developed an aftermarket modification for the MacBook that converted the laptop into a tablet.  This modification included removing the keyboard and display of a the MacBook and adding a Wacom pen-based screen.  The modification onlycosts $699 in addition to the price payed for the MacBook.  Ready to go units start at $1,199.

Axiotron still sells the modified MacBook, but under the name “ModBook.”  As usual, it is a mystery what Apple intends to do with its new trademark.  Don’t forget,  “MacPad” has also been trademarked by Apple.

Links (not the sausage kind):

-USPTO Registration

-Article

Posted by:  Philip Matthews, Student at the Gonzaga School of Law

“These Miller budlights are terrible…”

Have you seen the BudLight television commercial “The Breakup” using the “too light/too heavy” motif?  In the “too light” scenario, the man fails to realize he’s been dumped.  In the “too heavy” scenario, the woman pushes the man right out of the vintage BMW 2002 and onto the road.  Ejected, but not dejected, the man dusts himself off and shouts out at the girlfriend and her fleeing car “I’ll Facebook you…..”

I guess I prefer talking frogs to dating scenarios that hit close to home — but the IP point is:  Do you think Budweiser has permission to use the concluding line “I’ll Facebook you…”?  

If you were Facebook’s counsel would you (could you should you) grant this permission?  And if Budweiser didn’t ask permission, would you (should you) object to the line?

Trademark counsel often instruct their clients to use trademarks as adjectives – trademark adjectives modifying genus-name nouns — like Frisbee brand flying discs or BandAid adhesive bandages or Rollerblade brand inline skates.  Trademarks can lose distinctiveness if the public comes to adopt the trademark as the genus name — at which point the marks are vulnerable to Cancellation under 15 USC Section 1064(3) and to unenforceability.  Generic marks are per se ineligible for trademark protection at the state or federal level.

This slide into genericism is a paradox of popularity — a real risk especially if you pioneer a new product genus and the public adopts the trademark as the genus name.

XEROX is one example of a company fighting “genericide” by urging the public not to call the act of making copies “xeroxing” — even going so far as to run an ad campaign reminding the public not to use the XEROX trademark “as a noun or a verb, but only as an adjective.”  This is a copy of one of the XEROX educational and advisory ads.  Public mis-use of a trademark can lead to this genericide despite the good intentions of the mark holder.  For examples, see King-Seeley v. Aladdin, 321 F.2d 577 (2nd Cir. 1963); Kendall-Jackson v. Gallo, 150 F.3d 1042 (9th Cir. 1998); Union National Bank v. Union National Bank, 909 F.2d 839 (5th Cir. 1990) among the cases discussing verbs and adjectives and genericism.

Facebook, Inc. is the start-up darling of the decade.   Facebook owns several U.S. Trademark Registrations for FACEBOOK, including U.S. Registration No. 3,041,791 in Classes 35 and 38 for “social networking” among other services.

So, does Facebook, like Google and Bing, run the risk of genericism by people using their marks as a verb?  Is it even worse if they allow it?  “Google it?”  “Bing it?”  “Facebook me?”  

Back to the original question — if you were Facebook’s counsel could you even allow Budweiser the right to use this “I’ll Facebook you….” line?  Where is the quality control required of a true license?  Would any permission run the risk of genericism?  Or, if you were Facebook’s counsel would you insist that Budweiser delete the line (and sue them for infringement/dilution of Reg. No. 3, 041,791) – or should Facebook be happy with the free publicity even if it does risk genericide?

 Or maybe Facebook could use its undeniable power in social marketing to genericize BudLight.  Perhaps they could start a budlight group encouraging all members to use budlight as the generic term for any weak or watered down beer – “These Miller budlights are terrible…” 

 J. Christopher Lynch, December 2, 2009 

WIPOlovesdefamationin2009.com

The World Intellectual Property Office (“WIPO”) is a specialized agency of the United Nations.  October 12, 2009 marked the 10^th anniversary of WIPO’s significant new role in domain name disputes — in particular, the Uniform Domain Name Dispute Resolution Policy ”UDRP” which is the standard agreement that every commercial registrar of domain names must use and that every domain name buyer must agree to as part of the domain acquisition process.  If you own a domain name, chances are you have signed a UDRP form.

Domain name “cyber piracy” was common at the time of the initial domain name “land rush” in the mid-1990’s.  Many companies were slow to acquire domain names under their trademarks, and speculators were quick to scoop those up.

U.S. trademark law has developed to allow a mark holder to stop confusingly similar use of the mark by a junior user — but identical marks can be used by companies that don’t compete — for example, Delta Tools, Delta Airlines and Delta Faucets all can use and enforce “delta” against competitors whose use of a similar mark may create confusion.  But there can only be one “delta.com”  — for many years before the Airline acquired the domain it was owned by an accounting firm with a “text-only” webpage apologizing for the text-only format: “we receive thousands of mis-hits per day.

Domain name registrars are not required to engage in any “right to use” analysis (like your anti-confusion ombudsman the USPTO Trademark Examiner performs) in order to sell a domain name.  In other words, anyone can buy any domain name, and domain name registrars have very little express exposure for selling a domain later alleged to be used in trademark infringement (although the buyer may have exposure.)

In the wake of the domain name land rush, many parties who claimed their trademark rights had been infringed sued under traditional trademark infringement and unfair competition (Sections 32 and 43(a) of the Lanham Act) — but cyber pirates might be able to avoid “true infringement” by using the site for arguably descriptive fair use purposes (Panavision.com was first pirated by a gentleman who put up a web cam of Pana, Ohio.)  So, in 1999, both Congress and WIPO reacted with the similar 43(d) Anti-Cyber piracy statute and the UDRP, both of which prohibit acquisition or use of a domain name in bad faith — without the Lanham Act requirement of a showing of significant likelihood of confusion.

In particular, the UDRP proscribes domain name acquisition or use where: (i) the domain name is identical or confusingly similar to a trademark, (ii) the buyer has no legitimate interest in the name, and (iii) the domain has been registered or is being used in bad faith (Section 4.)  Bad faith includes: (i) selling the domain back to the trademark owner, (ii) registering the domain to prevent the mark owner from doing so,  (iii)  using the domain to disrupt the mark owners business, or (iv) commercially using the domain in a confusing manner (Section 5.)

WIPO has a streamlined procedure for resolving UDRP disputes — one or three arbitrators may be selected by the parties and the decision is final and non-appealable — and results in transfer or retention of the domain in question.  (If you want money — you need to use the Court system!)

Isaac Eiland-Hall of Florida acquired the domain “glennbeckrapedandmurderedaayounggirlin1990.com” earlier this year and put up a site making it clear that there was no evidence that Mr. Beck had engaged in such behavior, but that he had not otherwise denied it nor provided proof that he didn’t rape and murder a young girl in 1990.  Mr. Eiland-Hall all apparently put up the site to MOCK Mr. Beck’s “birther” style of journalism where aspersions are cast until otherwise negated — the opposite of journalism.

Mr. Beck has US Trademark Applications on file for his name in connection with entertainment and other services.  Using his name and these applications as a basis, Mr. Beck filed a WIPO UDRP action to recover this domain name.  Here is a copy of the Complaint alleging defamation and bad faith in the acquisition and use of the domain name.  Mr. Eiland-Hall defended that the domain was an “internet meme” or “esoteric inside joke” that had made the rounds of internet message boards prior to his acquisition of the domain and that his goal was to be a clearing house for Glenn Beck related rumors, myths and truths.  Mr. Eiland-Hall explained that his site was not commercial and that only a “moron in a hurry” would be confused as to source or sponsorship.  Mr. Eiland-Hall explained his First Amendment rights in exposing Mr. Beck’s rhetorical style and using this provocative domain name to do so.  Here is a copy of Mr. Eiland-Hall’s WIPO Response.

 WIPO ruled for Mr. Eiland-Hall — here is the Ruling.  The WIPO Panelist ruled that Mr. Eiland-Hall was engaged in political speech devoid of commercial intent and thus there was no bad faith as required to trigger the domain relinquishment penalty of the UDRP. 

But the WIPO ruling was only Mr. Eiland-Hall’s penultimate last laugh.  Following the ruling, Mr. Eiland-Hall VOLUNTARILY relinquished the domain to Mr. Beck with an acid-tongued letter explaining that his “criticism has been aptly made” and that Beck’s “rhetorical style is no laughing matter.”   See Eiland-Hall’s last laugh here. 

Bottom line:  “Gripe sites” are still alive and well – even after ten years of the UDRP.

J. Christopher Lynch, December 1, 2009

Nokia v. Apple

Nokia sued Apple in federal court in Delaware last week, claiming Apple willfully infringes 10 fundamental cell phone patents owned by Nokia — in essence, that every iPhone Apple has sold since launching the product in 2007 has infringed Nokia’s rights.

Nokia has been a player in the cell phone industry since the early 1980s, and has come to dominate the global cell phone market, with a whopping 38% market share last year.  Nokia also dominates the cell phone market in another way — it claims to have 10,000 patent families on telecommunications technology, and many of those patents cover technology that has become standard in the industry.  How standard?  Well, so standard that the major standard setting organizations for the telecommunications industry around the world have adopted the technology in Nokia patents for their members to use if they wish to be compatible with carriers in their geographic markets.  GSM is the dominant global standard for European & Asian networks, and for AT&T & T-Mobile in the U.S.  W-CDMA is the standard for 3G phones.  Wireless LAN standards allow Wi-Fi connectivity.  In its complaint againt Apple, Nokia asserts 10 patents that are necessary to meet these compatibility standards.  Nokia has licensed those 10 patents to approximately 40 cell phone manufacturers around the world. 

Enter Apple, the brash new kid on the block, selling its very first cell phone in 2007.  Apple hasn’t had decades of R&D to develop cell phone technology.  Nor does it enjoy a telecommunications patent portfolio anything like the 10,000 families of patents that Nokia holds.  So to market a cell phone, Apple has to employ cellular technology developed by others.  Because Apple promotes the iPhone as being compatible with GSM, W-CDMA and wireless LAN standards, it almost assuredly employs the technology in the ten Nokia patents.  To use that technology lawfully, like the other cell phone manufacturers, Apple requires a license from Nokia.  And that’s where the dispute arises. 

Outside of the standard setting context, when a patentee negotiates a royalty, they might try to hold up the potential licensee and demand an expensive license, maybe something in the neighborhood of 5-6%.  But one of the quid pro quos of getting your patented technology adopted as a “standard” by the standard setting organizations is your agreement to license that technology on “fair, reasonable and nondiscriminatory” [FRAND] terms and conditions to all comers, even your most bitter competitors.  The result for folks like Nokia is a patent royalty in the range of 1-2%.  So even if Apple is beginning to eat Nokia’s market share in the smartphone product category (sometimes called “converged devices”), as appears to be the case, Apple would nonetheless be entitled to pay the same low royalty rate as everyone else Nokia has licensed because FRAND terms and conditions don’t permit Nokia to discriminate against Apple.

The problem:  although Nokia has been negotiating with Apple about this very subject almost since the first iPhone shipped, Apple has refused to buy a license on terms akin to those entered into by the other 40 cell phone makers.  To the outside observer, it appears that Apple has concluded that the cost of doing business — payment of patent damages — is worth the market share it acquires by continuing to sell the iPhone with higher profit margins in the interim.  One consequence for Nokia of having its patents adopted as industry standards is that it loses the ability to recover lost profits for the market share that Apple takes away from it, and Nokia is left with a reasonable royalty as its only form of damages.  Even trebled, a reasonable royalty in the 1-2% ballpark may still leave Apple ahead of the game at the end of a case like this, enjoying extra market share it acquired without having to pay royalties, and a customer base that will be disinclined to dump their iPhones. 

A smart if predatory strategy for Apple.  I love my iPhone, but my IP sympathies lie with Nokia in this fight.

Sheri Engelken, October 27, 2009

Protection for your Font . . .

It seems that NBC has been hit with a infringement suit for using a Font from Font Bureau Inc.  Font Bureau says that NBC used its font design while promoting various NBC shows including the new Jay Leno variety show.  Font Bureau also says that NBC purchased on license to use the font which allows one user at one location to use the font.

Here is the link to the full story.  That link also has a copy of the complaint which was filed in Eastern District of New York on October 6th.

Seeing Through Walls

This past week researchers in the Electrical and Computer Engineering Department at the University of Utah have found a way to see through walls.  Joey Wilson and Neal Patwari have found that using WiFi signals, you can effectively see through walls to see who is inside a house.  While there are some obvious privacy concerns, Mr. Wilson says that the uses that the technology is being developed for focus primarily on the search and rescue, security, and smart home technologies.

I have been unable to find any information relating to the patentability of this technology or whether a patent has been filed, I would assume that this would be something that the University would want a patent for.  Below is a video of one of the experiments of the technology.

Radio Tomographic Imaging