Monthly Archives: April 2014

Mattel and MGA Fight over “Bratz” Dolls

A federal judge in California has ruled that Mattel Inc. may no longer delay paying MGA Entertainment Inc. $137 million for attorneys’ fees and costs incurred in a dispute between the companies over “Bratz” dolls.

Mattel had sought an injunction to stop the payment, expressing concern that the money was subject to competing claims from others, including MGA’s former attorneys.

MGA recently settled a fee dispute with its former lawyers and also reached an agreement with its insurance carrier over coverage for its legal fees.

The lawsuit arose from a dispute between Carter Bryant, a toy designer, and Mattel over whether Byrant invented Bratz dolls while working at Mattel, or whether he came up with the idea before he signed a contract with Mattel.
Bryant later brought the idea to MGA, which has sold Bratz dolls since 2001.  A decrease in sales of Mattel’s Barbie dolls has been attributed to the increasing popularity of the Bratz brand.

Mattel claimed that Bryant stole its copyrights and trade secrets when he brought Bratz to MGA.  Mattel alleged that it lost $300 million in profits as a result.

Mattel sued MGA and in 2008 and was awarded $100 million in damages by a California federal court jury.  However, major parts of the decision were struck down by the Ninth Circuit Court of Appeals in 2010.

In 2011, another jury found that MGA had not stolen Mattel’s trade secrets but that, to the contrary, Mattel had misappropriated MGA’s Bratz-related trade secrets.  MGA was awarded $108 million in attorneys’ fees and $202 million for damages and other costs.

But in January of 2013, the Ninth Circuit threw out this second jury award, holding that MGA’s counterclaim of trade secret theft should not have reached the jury.  The Ninth Circuit let stand the jury’s award of $137 million for attorneys’ fees and costs incurred by MGA in successfully defending itself against Mattel’s copyright claims.

Stay up-to-date on the latest Intellectual Property Law news from Sheldon Mak & Anderson

WIPO Launches “Green” Intellectual Property Marketplace

The World Intellectual Property Organization (WIPO) has launched a new online marketplace to connect buyers and sellers of “green” technologies.

The “WIPO GREEN” database and network is designed to match owners and inventors of green technologies with people or companies seeking to commercialize or license such technologies.

WIPO’s goal is to accelerate innovation and use of green technologies in order to address climate change.

Green technologies listed on the site include those dealing with:

  • Alternative energy production
  • Energy-saving technologies
  • New forms of transportation
  • More sustainable agriculture and forestry
  • Greener waste management

Those who are looking for green technologies can search the site for “assets.”

According to WIPO,

The database offers green technology providers greater visibility for their products, services and IP assets (including inventions, patents, technologies and know-how) for sale or license, helping to attract partners and finance.

Providers of green technologies can search for “needs” – including specific technologies and IP, funding, and professional services such as training.

The database is targeted at “investors, entrepreneurs and licensing managers looking to construct and execute deals in the green technology space.”

The service is free for all parties but registration is required.

The WIPO GREEN site is also a gateway to other WIPO services, such as WIPO’s IP Arbitration and MediationCenter.

WIPO is an agency of the United Nations.  It is a “global forum for intellectual property services, policy, information and cooperation” established in 1967.  It now has 186 member states.

More information on WIPO GREEN is available at https://webaccess.wipo.int/green/.

If you are the owner or developer of a green technology invention, or if you are seeking to license green technology IP rights, identifying a partner is just the first step.

Stay up-to-date on the latest Intellectual Property Law news from Sheldon Mak & Anderson.

AT&T Appeals to Federal Circuit after Patent Lawyers Blow Deadline

After its patent law firm missed a deadline for challenging a $40 million patent infringement verdict against it, AT&T has asked the Federal Circuit for more time to appeal.

On February 6, US District Judge Orlando Garcia denied a motion by AT&T seeking an extension of time to appeal a March, 2013 verdict that it infringed patents owned by Two-Way Media LLC.

The patents at issue include a “Multicasting method and apparatus” and relate to technology for live-streaming audio and video over the Internet.

A Texas jury found that AT&T and its subsidiaries infringed seven claims of two of the patents and that AT&T had failed to prove that the patents were invalid.

The deadline to appeal the jury verdict passed in December.  AT&T claimed that docket notices emailed from the court did not make it clear that all post-trial motions had been resolved by November, which started the clock ticking on the 30-day period for filing an appeal.

AT&T said that its attorneys only realized in January that the motions had been resolved when one of them happened to actually read the orders while looking for something else.

Judge Garcia did not consider that a good enough reason to grant an extension, saying that it was “very troublesome” that none of AT&T’s 18 patent attorneys at two law firms “bothered to read the orders issued by the court, check the docket for activity, or check on the status of the case” – especially given how much money was involved.

AT&T has agreed to post a $40 million bond while it appeals the decision prohibiting it from appealing the verdict.

Stay up-to-date on the latest Intellectual Property Law news from Sheldon Mak & Anderson.

 

Company Must Pay Legal Fees for Ex-Employee Charged with Stealing Trade Secrets

A federal judge has ruled that Goldman Sachs must pay the legal costs of a former employee accused of theft of Goldman’s proprietary source code.

Sergei Aleynikov is a programmer who worked on Goldman’s high-frequency trading software.  In 2009, just before he went to work for a Chicago start-up, Aleynikov downloaded the Goldman source code in order to use it at his new company.

Aleynikov was charged with theft of trade secrets, in violation of the federal Electronic Espionage Act, and also with transportation of stolen property.  He was sentenced to 97 months in prison but his conviction was overturned in February of 2012 and he was released – only to be arrested again by New York authorities for state-law trade secret offenses.

The Second Circuit’s reversal of his conviction led to the passage of the Theft of Trade Secrets Clarification Act of 2012.

Aleynikov sued Goldman in New Jersey federal court in September 2012, seeking indemnification for his legal fees.

In October of 2013, the district court ordered Goldman to advance Aleynikov’s legal fees (about $700,000 so far) for defending himself in the state law case.  Goldman was also required to pay Aleynikov’s legal fees (over $1 million) in the indemnification suit.

Among other things, the district court judge noted that Aleynikov (along with 12,000 other Goldman employees) had the title of “Vice President,” and Goldman’s bylaws on indemnification of officers defined “officer” broadly.  Goldman had previously paid legal fees for 51 out of 53 employees who had incurred them – including 15 with the title of “Vice President.”

Aleynikov will be “required” to pay back the legal fees if he loses in state court.  However, since he has no job and no money, it is unlikely that Goldman would be able to collect.

Goldman has appealed the district court’s order.

Stay up-to-date on the latest Intellectual Property Law news from Sheldon Mak & Anderson.

Music Companies Say Grooveshark Destroyed Records in Copyright Case

Music companies involved in litigation against Grooveshark have asked a federal judge to sanction the music streaming service’s owner for destroying records the plaintiffs say would have shown the extent to which Grooveshark engaged in copyright infringement.

Universal Music Group (UMG), Warner Bros. Records, and Sony Music say that Escape Media Group Inc., which owns Grooveshark, destroyed records even though copyright infringement litigation was pending.

Grooveshark’s on-demand music streaming service allows users to listen, for free, to songs from a playlist of more than 15 million tracks.  The company’s revenue model is based on advertising.

UMG initially sued Grooveshark in New YorkState court in 2011.  In April, 2013, a New York court of appeals ruled against Grooveshark for its posting of pre-1972 song recordings, including songs by Buddy Holly and Chuck Berry.  The New York court concluded that the music was not covered by the safe harbor provisions of the Digital Millennium Copyright Act (DMCA). The DMCA, under some circumstances, shields internet service providers from copyright infringement liability if they promptly remove copyrighted works from their websites when asked to do so by the copyright owners.

Grooveshark has agreements with owners of many sound recordings, but also allows its 35 million users to upload songs.  Thus, it cannot be certain that all of its content is non-infringing.

Some artists, including Robert Fripp of King Crimson, have complained that their music remained on Grooveshark despite several takedown notices.  Music label executives said that they had sent hundreds of thousands of takedown notices to Grooveshark only to see the songs reappear within seconds.

UMG and the other plaintiffs also sued Grooveshark in federal court, saying that the service engaged in copyright infringement on a large scale.  The suit cited emails from Grooveshark executives that appeared to boast of “achieving all this growth without paying a dime to any of the [music] labels.”

If Grooveshark and its executives are found guilty of willful copyright infringement, the maximum penalty could be $150,000 for each work infringed.

The plaintiffs claim that missing information includes evidence of Grooveshark’s Chief Technology Officer’s uploads, even though the plaintiffs demanded that these records be maintained.

Stay up-to-date on the latest Intellectual Property Law news from Sheldon Mak & Anderson.

Sherlock Holmes Enters the Public Domain

A federal judge has ruled that the character of Sherlock Holmes (along with his faithful sidekick Watson and his evil nemesis Moriarty) is now in the public domain under US copyright law.

Holmes was introduced by Scottish author and doctor Sir Arthur Conan Doyle in the novel A Study in Scarlet published in 1887.  Three more novels and 56 short stories followed, with the last published in 1927.

Holmes has appeared in at least hundreds (perhaps thousands) of works in print and other media.  According to Guinness World Records, Holmes is the “most portrayed movie character” ever.  More than 70 actors have played the part in over 200 films, from Sherlock Holmes Baffled (1900) to the BBC’s Sherlock, starring Benedict Cumberbatch, which starts a new season on PBS on January 19, 2014.

The copyright for Conan Doyle’s works expired in the UK in 1980.  In the US, his works published before 1923 are also in the public domain.

In February of 2013, Holmes scholar Leslie S. Klinger sought a declaratory judgment that the characters of Holmes and Watson (along with 221B Baker Street and any other story elements first published before January 1, 1923) are also in the public domain.

Klinger and Laurie R. King (author of a mystery series starring Holmes and his wife) were the editors of “In the Company of Sherlock Holmes,” a collection of new Holmes stories.

Klinger and King had paid $5,000 to the Conan Doyle estate to license the right to publish a previous Holmes-based collection.  The estate demanded an additional fee for the new work.

The estate’s copyright lawyers claimed that the characters remained under copyright protection in the US because they were not “completed” until 1927, when Conan Doyle published his last Holmes story.

In December of 2013, the district court rejected this argument and ruled in Klinger’s favor.

Stay up-to-date on the latest Intellectual Property Law news from Sheldon Mak & Anderson.