Samsung, Chipotle, Espinel, Elekta: Intellectual Property (1)

Samsung Electronics Co. (005930) may not get the sort of presidential reprieve Apple Inc. (AAPL:US) won earlier this month from an order limiting U.S. imports of some smartphones and tablet computers.

Samsung can’t make the public-policy arguments Apple used to sway President Barack Obama’s administration, which vetoed an import ban ordered by the U.S. International Trade Commission on certain iPhone 4 and iPad 2 models, according to lawyers and analysts. That makes it more likely a separate ban ordered on some Samsung products Aug. 9 will take effect after a presidential review period ends in October.

Apple could show its case dovetailed with the administration’s expressed interest in limiting the power of patents underlying fundamental technology used across an industry. Samsung’s products were ordered banned Aug. 9 for infringing two Apple patents on features that differentiate one phone from another — an issue between the two companies that doesn’t involve a widely used standard.

Samsung, the world’s largest smartphone maker, was ordered to stop selling phones and tablet devices that infringe Apple patents for multitouch technology and headphone jack detection.

The commission said Samsung products including Continuum and Transform models infringe the headphone jack patent, while the Galaxy Tab 7.0 tablet computer and Galaxy S II — the precursor to Samsung’s top-selling Galaxy S4 — do not.

The decision must be reviewed by U.S. Trade Representative Michael Froman, who is designated by the president to review ITC bans.

In his Aug. 3 letter stopping the import ban on certain older iPhones and iPads, Froman said he based his decision on Samsung’s ownership of standards patents being at the core of the case. Obama’s administration has expressed concerns that “potential harms” can result if patent holders use those as leverage against competitors, he said.

Froman repeated guidelines sent to the agency in January by the U.S. Justice Department and U.S. Patent and Trademark Office. He didn’t say whether he believed Samsung had misused its patents that relate to standards for how devices transmit data.

The administration could veto the Samsung import ban to push the two companies into ending their global litigation that’s lasted more than two years and cost hundreds of millions of dollars, said Jung Dong Joon, a patent lawyer with SU Intellectual Property.

The administration, by not blocking the Samsung ban, could open itself up to criticism that it was favoring an American company over a Korean one.

“The U.S. administration can’t just unconditionally use its power to veto the import ban on Apple’s products alone,” said Lee Sun Tae, an analyst at Seoul-based NH Investment & Securities. “Obama may issue the reprieve again for Samsung, and if not, it will only bring up even bigger international conflict.”


Chipotle, Jack in the Box Settle Dispute Over ‘Chipotle’ Mark

Chipotle Mexican Grill Inc. (CMG:US) and Jack in the Box Inc. (JACK:US) settled a trademark dispute over the term “chipotle,” according to an Aug. 7 court filing. Terms weren’t disclosed.

Denver-based Chipotle sued Jack in the Box in a Colorado federal court in September objecting to the fast-food chain’s use of “Chipotle” and “Chipotload” in connection with a chicken club sandwich menu item. Chipotle, which has been in business since 1993, registered its first “Chipotle” trademark in 1998. A chipotle is a smoke-dried jalapeno chili pepper commonly used in Mexican food.

Chipotle claimed that Jack in the Box was trying to trade on the Mexican-themed chain’s fame through its use of the term, and that the public would probably assume falsely that an affiliation existed between the two entities.

Chipotle asked the court to bar San Diego-based Jack in the Box from using “Chipotle” in connection with its products, and for awards of money damages, attorney fees and litigation costs.

The case is Chipotle Mexican Grill Inc. v. Jack in the Box Inc. (JACK:US), 12-cv-02511, U.S. District Court, District of Colorado (Denver).


‘Copyright Czar’ Victoria Espinel Departs From White House Job

Victoria Espinel, the Obama administration’s “copyright czar,” has left her post after four years, according to the Hollywood Reporter.

Espinel, who had widespread support from the content industries, helped develop strategies for intellectual-property policies and actions, the publication reported.

She came to her post from the Office of the U.S. Trade Representative and is a graduate of Georgetown University’s law school, according to the Hollywood Reporter.

In addition to her responsibilities with copyright issues, Espinel was involved in the development of the “America Invents Act,” a comprehensive overhaul of U.S. patent law, the newspaper reported.

E-Book Sellers to Share Customer Data With Anti-Piracy Group

The BREIN Foundation, a Dutch anti-piracy organization, will work with digital-book sellers to develop a system to identify customers who share their content on the Internet, the TorrentFreak anti-copyright news website reported.

Under the proposed system, if digital books show up on BitTorrent file-sharing networks, BREIN will be able to match embedded digital watermarks in the books to the customer who bought them, TorrentFreak reported.

Customers will be informed at the point of sale that this data will be shared if they attempt unauthorized sharing of the content, according to TorrentFreak.

Book vendors will be required to store customer transaction data and make it available to BREIN and copyright holders for a minimum of two years, TorrentFreak reported.

Trade Secrets/Industrial Espionage

Imax Brings Trade Secrets Case to California State Court

Imax Corp. (IMAX:US), the Canadian producer of large-screen film projection systems, sued a competitor in state court in Los Angeles for trade secret misappropriation.

Imax sued the same defendant in federal court on June 26. Mississauga, Ontario-based Imax said it voluntarily dismissed that case against GDC Technology LLC of Burbank, California, because of the “complex and apparently interwoven corporate relationships with and among the defendants.” GDC didn’t respond to the federal complaint, Imax said.

Imax claims a former employee stole proprietary technologies related to large-format digital projection systems and film conversion. The ex-employee allegedly provided the technology to a Chinese company where acted as chief engineer.

GDC acquired the trade secrets through its relationships with the Chinese competitor, Imax claims. Imax said it sued the ex-employee in both Canada and China and uncovered “voluminous conclusive proof” of the thefts, which included the source code for Imax’s 2D to 3D conversion process.

The ex-employee remains “an international fugitive,” Imax said. He worked for the Canadian company as a software engineer from July 1999 until he was terminated in November 2009, according to court papers. While working at Imax, he signed a confidentiality agreement, Imax said.

Imax said the ex-employee, while he still worked for Imax, formed a Chinese company that also provides projection technology. It was impossible for the new company to have developed the necessary technology independently, Imax said.

After he was terminated by Imax, the ex-employee allegedly fled to China and started a company known as Dmax, to compete with Imax, according to the complaint. The Chinese company and the ex-employee aren’t named defendants in this case.

Imax said that GDC has acquired and is using the Canadian company’s trade secrets in its large-screen format technology. It said GDC hasn’t responded to a cease-and-desist letter and continues its unauthorized use of the Imax trade secrets.

GDC didn’t respond immediately to an e-mailed request for comment on the suit.

Imax asked the court for awards of money damages, “reasonable royalties” for use of its trade secrets, extra damages to punish GDC for its actions and for awards of litigation costs and attorney fees.

The case is Imax Corp. (IMX) v. GDC Technology (USA) LLC, BC518132, California Superior Court, Los Angeles County (Los Angeles). The federal case was Imax Corp. v. GDC Technology (USA) LLC, 13-cv-04640, U.S. District Court, Central District of California (Los Angeles).

Elekta Says Trade Secrets Case Brought by Varian Is Settled

Elekta AB (EKTAB), Swedish maker of the Gamma knife and other cancer treatment devices and technologies, said it resolved a trade-secrets dispute with Varian Medical Systems Inc. (VAR:US) of Palo Alto, California.

Varian sued Elekta in Texas state court last August, claiming that two former Varian employees brought company trade secrets with them to their new jobs with Elekta.

Terms of the settlement weren’t disclosed by Elekta in a statement. Spencer Sias, a Varian spokesman, confirmed that the case had settled.

IP Moves

Sheppard Mullin Expands IP Practice With Foley & Lardner Hire

Sheppard Mullin Richter & Hampton LLP hired Lorna Tanner for its intellectual-property practice, the Los Angeles-based firm said in a statement.

Tanner, who does patent acquisition and portfolio management work, joins from Milwaukee’s Foley & Lardner LLP. She has represented clients in the pharmaceutical, life science and medical-device industries, with an emphasis on pharmaceutically active small molecules.

She has an undergraduate degree from the University of California at Berkeley and a law degree from Santa Clara University.


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