2e09adf8690e4f9db8b02fa7c60a6637512009-11-06T16:10:00-06:00Japan-based Nichia Corp. has slapped Chinese solar products company Jiawei North America Inc. with a patent infringement lawsuit over light-emitting diode technology.
Nichia filed its complaint Thursday in the U.S. District Court for the Eastern District of Texas, alleging that Jiawei has infringed four LED-related patents, U.S. Patent Numbers 7,026,756; 5,998,925; 6,870,191; and 7,531,960.
“Upon information and belief, defendants have infringed and continue to infringe one or more of the claims of the [...] patent[s], directly, contributorily and/or by inducement, by making, using, selling, offering for sale and/ or importing in this country (and in this judicial district), and inducing others to use, without license, certain devices containing infringing LEDs,” the suit said.
Nichia also claims Jiawei has infringed the patents willingly and with full knowledge of its existing intellectual property.
In addition to an award of treble damages, Nichia is seeking a permanent injunction barring Jiawei from infringing any claim of the four patents.
Jiawei is a subsidiary of Shenzhen Jiawei Industries Co. Ltd., which is also named as a defendant in the lawsuit.
A representative for the defendants could not immediately be reached to comment on the lawsuit.
In February, Nichia ended a long-running battle over LED patents with Seoul Semiconductor Co., resolving almost all of the litigation and disputes related to patents and defamation claims in the United States, Europe, Japan and Korea.
The settlement resolved about 20 legal feuds spanning several countries, including one case in the United Kingdom over LED technology, district court cases and patent office disputes related to LED and laser diode technology in Japan and Korea, and a series of litigation spanning several jurisdictions in the U.S.
The agreement wrapped up a U.S. International Trade Commission case and a corresponding action in the U.S. District Court for the Eastern District of Texas, a separate Eastern District of Texas LED patent case, a Michigan LED patent suit, and California lawsuits, including one that was being appealed.
One of the California suits was filed by Seoul against Nichia in October for anti-competitive behavior, claiming Nichia was on a “litigation rampage," using baseless lawsuits to limit competition in the light-emitting diode market.
The action was lodged in the U.S. District Court for the Northern District of California, stemming from Nichia’s 2006 patent suit against Seoul, which resulted in a $250 award for infringement.
In that earlier case, the jury in the Northern District of California found in November 2007 that Seoul and its U.S. subsidiary had infringed Nichia's patents for its 902 series LEDs, which are used for liquid-crystal display backlight units in products such as cellular phones.
Nichia was awarded the statutory minimum damages of $250. An appeal by Nichia was pending related to the 2006 case in the U.S. Court of Appeals for the Federal Circuit.
The patents-in-suit in the current matter are U.S. Patent Numbers 7,026,756; 5,998,925; 6,870,191; and 7,531,960.
Nichia is represented by Ireland Carroll & Kelley PC and Foley & Lardner LLP.
Counsel information for the defendants was not immediately available.
The case is Nichia Corp. v. Jiawei North America Inc. et al., case number 2:09-CV-346, in the U.S. District Court for the Eastern District of Texas.
--Additional reporting by Samuel Howard, Ryan Davis, Shannon Henson, Erin Coe and Jacqueline Bell132710002009/12/05 00:00Nichia Puts Heat On Jiawei In LED Patent SuitFriday, Nov 06, 20092009/11/052009/11/05742009/11/061Japan-based Nichia Corp. has slapped Chinese solar products company Jiawei North America Inc. with a patent infringement lawsuit over light-emitting diode technology.477f38582ba3499289c4780c94c8d8c2532009-11-06T15:50:00-06:00A judge has certified a securities class action accusing circuit board maker Merix Inc. and its officers of misleading investors in connection with a 2004 stock offering, though he has approved a more limited class than the plaintiffs wanted.
Judge Michael W. Mosman, of the U.S. District Court for the District of Oregon, on Thursday certified a class of anyone who bought stock in a January 2004 offering based on a prospectus that allegedly misled consumers about the company's performance, but excluded investors that bought stock on the secondary market after the initial offering.
The suit, filed in 2004, alleges that Merix painted an “unrealistically positive” picture of its business in the prospectus for the offering. The suit also targeted Merix's underwriters, including UBS Securities LLC, Wells Fargo Securities LLC and others.
The judge said that because the claims of the investors that bought stock in the initial offering all hinged on whether the prospectus was misleading, they would be most efficiently resolved through a class action.
“[T]his case will turn on common questions of whether the January prospectus contained material misrepresentations or omissions and whether the alleged misrepresentations and omissions caused plaintiffs' shares to lose value,” the judge said. “It is more efficient to resolve these questions in a single class action than to continually relitigate the same issues and facts in a series of individual proceedings.”
However, he ruled that the problem of tracing purchases on the secondary market back to the initial offering would be too complex for a class action, especially since Merix already had a large number of shares outstanding when it made the offering.
“I conclude that individual questions of traceability will overwhelm the core common questions of liability if the class is certified to include plaintiffs who purchased Merix shares in the aftermarket after the date of the January offering,” Judge Mosman said.
The judge further ruled that the class was certified only as to claims under Section 11 of the Securities Act, but not Section 12, because the only named plaintiff in the case — the Central Laborers Pension Fund — lacked standing to pursue those claims against some of the underwriter defendants. He rejected the plaintiff's argument that other, as yet unknown class members could supply that standing.
“Central Laborers merely speculates that unnamed absent members of the class have standing to sue the underwriter defendants,” Judge Mosman said.
Attorneys for the CLPF and Merix could not immediately be reached for comment on Friday.
The CLPF is represented by Barroway Topaz Kessler Meltzer & Check LLP.
Merix is represented by Orrick Herrington & Sutcliffe LLP.
The case is Central Laborers Pension Fund v. Merix Corp. et al., case number 3:04-cv-00826, in the U.S. District Court for the District of Oregon.132739002009/12/05 00:00Merix Securities Plaintiffs Win Class CertificationFriday, Nov 06, 20092009/11/052009/11/05142009/11/061A judge has certified a securities class action accusing circuit board maker Merix Inc. and its officers of misleading investors in connection with a 2004 stock offering, though he has approved a more limited class than the plaintiffs wanted. 8cd85c78ff0f434dbaafbe92df0794a9902009-11-06T15:43:00-06:00Aruba Networks Inc. said Friday that it would pay $19.75 million to settle a patent dispute with Motorola Inc. and three of its subsidiaries over wireless networking technology.
In a filing with the U.S. Securities and Exchange Commission, Aruba said that as part of the settlement, the companies would provide one another with seven-year licenses to each of their respective 802.11 wireless local area network patent portfolios.
The parties also entered a covenant not to assert any patent claims against one another's current products and commercially reasonable extensions thereof for four years.
Motorola had accused Aruba of infringing four patents and Aruba had accused Motorola of infringing two patents, but the settlement purportedly resolves all intellectual property disputes between them.
Aruba said it would account for the $19.75 million payment as a one-time expense for the fiscal quarter ended Oct. 31.
Meanwhile, a letter agreement entered into Wednesday describes the procedures “that the parties must follow in the event that there is a claim made by either party related to the patents described in the settlement agreement as they relate to third parties with which either party is currently in active litigation.”
“We are delighted to put this legal dispute behind us,” said Keerti Melkote, Aruba's co-founder and chief technical officer. “We also look forward to working with Motorola on improving the all-wireless enterprise for the benefit of customers and to advance the state of technology.”
Gene Delaney, president of Motorola's enterprise mobility solutions business, said: “We are pleased to have reached an amicable business resolution outside of the courts. Additionally, we are actively exploring technical and business opportunities of mutual interest associated with the all-wireless enterprise.”
The dispute goes back to August 2007, when Motorola subsidiaries Symbol Technologies Inc. and Wireless Valley Communications Inc. sued Sunnyvale, Calif.-based Aruba in the U.S. District Court for the District of Delaware.
Symbol was the owner of two of the patents in question, titled “Multiple wireless local area networks occupying physical spaces” and “Security in multiple wireless local area networks.” Both patents, which cover WLAN switching architecture technology, were issued on Feb. 6, 2007.
Wireless Valley was the owner of the other two patents, titled “Method and system for designing or deploying a communications network which considers frequency dependent effects” and “System and method for design, tracking, measurement, prediction and optimization of data communications networks.” Those patents, which relate to WLAN site planning and RF management, were issued in September 2003 and December 2005, respectively.
A third Motorola subsidiary, AirDefense Inc., was added to the case later.
But in addition to defending against the lawsuit in court, Aruba asked the U.S. Patent and Trademark Office for re-examination. This February, the USPTO issued preliminary findings of invalidity with respect to two of the patents and most claims of a third patent. In March, it issued a preliminary finding of invalidity with respect to the fourth patent.
Aruba also filed counterclaims against the Motorola subsidiaries alleging infringement of two wireless network technology patents.
The patents asserted by Motorola are U.S. Patent Numbers 7,173,922; 7,173,923; 6,625,454; and 6,973,622.
The patents asserted by Aruba are U.S. Patent Numbers 7,295,524 and 7,376,113.
Schaumburg, Ill.-based Motorola is represented in the matter by Hogan & Hartson LLP and Potter Anderson & Corroon LLP.
Aruba is represented by Weil Gotshal & Manges LLP and Richards Layton & Finger PA.
The case is Symbol Technologies Inc. et al. v. Aruba Networks Inc., case number 1:07-cv-00519, in the U.S. District Court for the District of Delaware.
--Additional reporting by Brendan Pierson132788002009/12/06 00:00Motorola To Get $20M As Part Of WLAN Patent Deal Friday, Nov 06, 20092009/11/062009/11/06502009/11/061Aruba Networks Inc. said Friday that it would pay $19.75 million to settle a patent dispute with Motorola Inc. and three of its subsidiaries over wireless networking technology.d5e814e8b4b643e49a48322c93796b55722009-11-06T15:19:00-06:00A federal judge has dismissed a suit brought by auction Web site uBid Inc. that accused domain provider The Go Daddy Group Inc. of violating a cybersquatting law by allowing URLs registered by third parties containing uBid's trademarked name to appear on Go Daddy sites.
Judge Charles P. Kocoras of the U.S. District Court for the Northern District of Illinois ruled Thursday that uBid had failed to show that Arizona-based Go Daddy had enough of a presence in Illinois to subject it to general or specific jurisdiction.
The decision could have “a significant impact on the future of Internet companies,” according to a statement from Wilson Sonsini Goodrich & Rosati PC, which represents Go Daddy.
“For Internet companies who have a presence in a particular jurisdiction but operate a web site globally, there is no reason to haul [them] in to jurisdictions around the globe when they only have a true physical presence in one location,” Go Daddy general counsel Christine Jones told Law360 on Friday.
Attorneys for uBid did not immediately respond to a request for comments on the decision Friday.
UBid accused Go Daddy of violating the Anticybersquatting Consumer Protection Act by allowing domain names that contained uBid's trademarked name to appear on Go Daddy's parked pages — pages that Go Daddy maintains until domain registrants create their own page — as well as its cash parking and domain auction service pages.
The registrants who allegedly used the uBid trademark were Illinois residents, according to the opinion.
To establish general and specific jurisdiction in Illinois, uBid argued that Go Daddy maintained continuous and systematic contacts in the state because of its advertising and sales, the decision said.
However, uBid did not prove that Go Daddy had established a “tangible presence” within Illinois to merit the court's exercising of general jurisdiction, Judge Kocoras said.
The company has no offices, agents or employees in Illinois and provides its services with equipment located outside of the state, according to the ruling.
Go Daddy's advertising activities in Illinois were part of a national advertising campaign rather than one targeted specifically at the state's residents, and though Go Daddy earns 3.19 percent of its revenue from Illinois, “a not insignificant amount,” the company's sales of its services in the state are not enough to establish general jurisdiction, the judge said.
He also rejected uBid's argument that Go Daddy should be subject to specific jurisdiction because the company transacted business in Illinois with the two Illinois residents who registered and parked domain names containing variations of the word “ubid.”
UBid did not prove that Go Daddy had availed itself of the privileges and benefits of Illinois law and as a result established specific jurisdiction in the state, Judge Kocoras said.
“Thousands of customers from all over the United States and other countries contract with Go Daddy through its web site. Go Daddy should not reasonably expect to be haled into court in every one of those states as a result of these Internet-based transactions,” the opinion said.
UBid also did not prove that Go Daddy should be subject to specific personal jurisdiction under the “effects test” established in the U.S. Supreme Court case Calder v. Jones, the decision said.
The plaintiff had argued that Go Daddy's patent application, which indicates that Go Daddy is generally aware that third parties' register domain names that are similar to other trademarked names, evidenced that Go Daddy knew its actions would cause uBid harm in Illinois.
However, uBid did not prove that Go Daddy knew their conduct would cause harm to uBid in the state, the judge said.
Foote Meyers Mielke & Flowers LLC, Chavez Law Firm PC and The Law Firm of Peter L. Currie PC represent uBid.
Wilson Sonsini Goodrich & Rosati PC and Mandell Menkes LLC represent Go Daddy.
The case is UBid Inc. v. The Go Daddy Group Inc., case number 09-cv-2123, in the U.S. District Court for the Northern District of Illinois. 132730002009/12/05 00:00Judge Nixes UBid Cybersquatting Suit V. Go DaddyFriday, Nov 06, 20092009/11/052009/11/05742009/11/061A federal judge has dismissed a suit brought by auction Web site uBid Inc. that accused domain provider The Go Daddy Group Inc. of violating a cybersquatting law by allowing URLs registered by third parties containing uBid's trademarked name to appear on Go Daddy sites.cc1c479ece4d475980927b5a8df493b3902009-11-06T14:37:00-06:00The founders of Skype Ltd. have laid down their swords in a battle over eBay Inc.'s $2.75 billion sale of the majority of Skype to a group of private investors, agreeing to drop an intellectual property suit and other litigation in exchange for a stake in the Internet telephony company.
Under the terms of the settlement, Joost Inc. and Joltid Unlimited — both owned by Skype founders Niklas Zennstrom and Janus Friis — will join the investor group by making a “significant capital investment” in exchange for a 14 percent stake in Skype, eBay said Friday.
In addition, Skype will have ownership over all software previously licensed from Joltid, eBay said, adding that the deal ends all litigation currently pending against the investor group and eBay at the closing of the acquisition.
“Skype will be well-positioned to move forward under new owners with ownership and control over its core technology,” eBay President and CEO John Donahoe said. “At the same time, eBay continues to retain a significant stake in Skype and will benefit from its continued growth. We look forward to closing the deal and focusing on growing our core ecommerce and payments businesses.”
The Skype founders had sued eBay in September, alleging copyright infringement of technology for peer-to-peer software.
They claimed they own the intellectual property for a technology called Global Index Software, the peer-to-peer technology that Skype employs to allow users to make telephone calls between computers. Joltid licensed the GI software to eBay for its Skype service under the condition that it not be modified, the founders said, but discovered in late 2003 that Skype had in fact modified the software.
EBay acquired Skype from Zennstrom and Friis in 2005 for $2.6 billion in cash and eBay stock.
Zennstrom and Friis also sued Index Ventures and one of its partners, former Joost President and CEO Michaelangelo Volpi, claiming that Volpi breached his fiduciary duties by using his access to Skype's trade secrets to help investors secure what many in the technology industry saw as a surprisingly high winning bid for the company.
Index, one of the Skype auction's winning investors, has withdrawn from the consortium, eBay said Friday.
The remaining investors — including Silver Lake Partners, Andreessen Horowitz and the Canada Pension Plan Investment Board — will together hold a 56 percent stake in Skype, while eBay will retain 30 percent, according to eBay. The deal is expected to close in the fourth quarter of 2009.
Silver Lake managing director Egon Durban said the investor group was pleased to resolve the litigation.
“We remain confident in a great future for Skype, and we look forward to working with Niklas, Janus and the other investors as partners to help the company achieve its full potential,” he said.
Meanwhile, Danny Rimer of Index said that while Skype “has the potential to be a great investment,” the company decided not to participate in the transaction because “the deal terms changed for Index such that it no longer matches our investment criteria.”
“We are pleased that Skype will now be able to put litigation behind it,” he added.
Joost and Joltid are represented in the case against Index by Skadden Arps Slate Meagher & Flom LLP.
Index and Volpi are represented by Young Conaway Stargatt & Taylor LLP.
That case is Joost U.S. Inc. et al. v. Volpi et al., case number 1:09-cv-00708, in the U.S. District Court for the District of Delaware.
Joltid is represented in the copyright infringement case by Hennigan Bennett & Dorman LLP.
Skype is represented by Irell & Manella LLP. EBay is represented by Weil Gotshal & Manges LLP. Silver Lake is represented by WilmerHale LLP.
That case is Joltid Ltd. v. Skype Technologies SA Inc. et al., case number 3:09-cv-04299, in the U.S. District Court for the Northern District of California.132779002009/12/06 00:00Skype Founders, EBay Resolve Dispute Over SaleFriday, Nov 06, 20092009/11/062009/11/06142009/11/061The founders of Skype Ltd. have laid down their swords in a battle over eBay Inc.'s $2.75 billion sale of the majority of Skype to a group of private investors, agreeing to drop an intellectual property suit and other litigation in exchange for a stake in the Internet telephony company.66d33e9458f044348e08c6c89523500c612009-11-06T14:04:00-06:00Yahoo Inc. has settled a trademark lawsuit brought by cosmetics purveyor Mary Kay Inc. over Yahoo’s use of infringing pop-up links and advertisements that allegedly appeared in e-mails sent by Mary Kay beauty consultants.
The parties submitted a joint stipulation of dismissal to the U.S. District Court for the Northern District of Texas on Wednesday after reaching a confidential settlement Oct. 21.
Attorneys for Mary Kay reiterated that the settlement was confidential and declined to comment but said the company “is happy to have it resolved promptly.”
Attorneys for Yahoo could not immediately be reached for comment.
Mary Kay filed a complaint accusing Yahoo of trademark infringement, trademark dilution, misappropriation and unfair competition on July 6.
The beauty company, which sells its products through independent salespeople known as “beauty consultants,” claims that its Yahoo Mail e-mail service embeds all messages with hyperlinks and pop-ups, many of which contain advertisements using the Mary Kay marks.
“Yahoo’s use of the Mary Kay marks in connection with the Yahoo shortcuts, hyperlinks and associated pop-ups, which include ads likely to cause confusion among Yahoo Mail users as to the source, affiliation, sponsorship or approval of such hyperlinks, pop-ups, related retail Web sites and Yahoo’s commercial activities, [results] in direct and contributory infringement of the Mary Kay marks,” the complaint said.
Dallas-based Mary Kay was founded in 1963 and has grown immensely, boasting $2.4 billion in annual global sales and 1.8 million consultants worldwide. Mary Kay claims Yahoo’s policy hurts its business model, which “enrich[es] the lives of women by giving them the opportunity to build successful independent retail business,” it said.
Their practices also could cause Yahoo Mail users to associate the Mary Kay marks with lesser-quality goods and services offered by unauthorized resellers, it said.
“Yahoo’s conduct is likely to dilute the distinctiveness of, and to tarnish, the distinctive Mary Kay marks,” the complaint said.
Mary Kay claimed the alleged infringement caused irreparable harm to its trademarks and asked the court for an order halting Yahoo’s activities.
The cosmetics giant also asserted that Yahoo’s infringement was willful and that it had full knowledge of the Mary Kay marks.
It sought damages and an award requiring Yahoo to turn over any profits derived from the ads.
Mary Kay is represented in the matter by Vinson & Elkins LLP. Yahoo is represented by Brinks Hofer Gilson & Lione and Carrington Coleman Sloman & Blumenthal LLP.
The case is Mary Kay Inc v. Yahoo! Inc., case number 3:09-cv-01278, filed in the U.S. District Court for the Northern District of Texas.132849002009/12/06 00:00Yahoo Settles With Mary Kay Over E-mail Ads, Pop-UpsFriday, Nov 06, 20092009/11/062009/11/06892009/11/061Yahoo Inc. has settled a trademark lawsuit brought by cosmetics purveyor Mary Kay Inc. over Yahoo’s use of infringing pop-up links and advertisements that allegedly appeared in e-mails sent by Mary Kay beauty consultants.97745dcca1e54117935588ad40fc5f5f142009-11-06T13:52:00-06:00AT&T Inc. has completed its $944 million acquisition of Centennial Communications Corp. following conditional approval of the deal by the Federal Communications Commission, which demanded certain divestitures over competition concerns.
The telecommunications giant said Friday that it had finished up the acquisition, which will allow it to expand its wired network coverage to Puerto Rico.
“The addition of Centennial will enhance AT&T’s assets in wireless — a strategic priority and one of our biggest growth drivers — and service for customers of both companies,” said Ralph de la Vega, president and CEO of AT&T Mobility and Consumer Markets.
“We’ll also improve network reliability for our wireless subscribers who will be able to make on-network calls in the Centennial footprint. And as Centennial’s broadband network in Puerto Rico is integrated with AT&T’s extensive global network and advanced service offerings, we’ll offer corporations that operate in Puerto Rico the benefits of end-to-end service over a single network,” he said.
The FCC said Thursday that the acquisition would lessen competition in seven service areas in Louisiana and Mississippi, and ordered the same divestitures that the U.S. Department of Justice and Louisiana's attorney general called for in October.
AT&T's deal with the DOJ also requires an additional divestiture in Mississippi.
The telecommunications giant has already inked a deal to sell to Verizon Wireless five of the Centennial service areas covered under the DOJ's decision. The company announced that definitive agreement in May.
To address competitive concerns, the FCC also said it would accept several voluntary commitments made by AT&T, including obligations to honor Centennial's existing agreements. AT&T will also allow providers with fewer than 10 million subscribers to retain a Centennial roaming agreement for four years or the length of the agreement, whichever is longer.
AT&T also agreed to certain measures restricting the flow of competitive information between it and America Movil. AT&T is a minority shareholder in the company, which provides telecommunications services in Puerto Rico.
In a concurring statement, FCC Commissioner Michael J. Copps said the divestitures were an improvement on the original terms of the deal.
AT&T has said it is committed to moving Centennial customers to newer generation wireless technologies currently unavailable to many of them, he noted.
“I will be closely monitoring the implementation of this transaction with an eye to ensuring that Centennial subscribers do in fact experience the tangible benefits they are entitled to expect — next generation wireless services, accelerated provision of broadband, and other up-to-date customer services,” Copps said.
“That being said, I continue to be skeptical of commercial marriages based on pledges that big companies 'go rural' for better or for worse. Too many rural areas have been abandoned when the marriage didn’t produce the big company profits sought by the market,” he said.
In November 2008, AT&T announced its plan to acquire New Jersey-based Centennial, agreeing to pay Centennial stockholders $8.50 per share in cash. Including net debt, the transaction is valued at $2.7 billion, AT&T said.
According to the DOJ, AT&T is the second-largest mobile wireless telecommunications services provider in the U.S. ,with nearly 80 million subscribers.
Centennial is the eighth-largest provider of mobile wireless telecommunications services in the U.S., according to the agency, with approximately 1.1 million wireless customers in six states, Puerto Rico and the U.S. Virgin Islands.
AT&T had advised on this transaction by Sullivan & Cromwell LLP, Arnold & Porter LLP and Crowell & Moring LLP.
Centennial was represented by Skadden Arps Slate Meagher & Flom LLP.
--Additional reporting by Jacqueline Bell132911002009/12/06 00:00FCC Clears Way For $944M AT&T, Centennial DealFriday, Nov 06, 20092009/11/062009/11/06342009/11/061AT&T Inc. has completed its $944 million acquisition of Centennial Communications Corp. following conditional approval of the deal by the Federal Communications Commission, which demanded certain divestitures over competition concerns.d002ecf60dc941dabb1abaa1cc158490582009-11-06T13:39:00-06:00Realtime Data LLC has won court approval for a settlement and licensing deal with F5 Networks Inc. and one of its customers, putting to rest allegations that the companies infringed seven patents covering compression-based data acceleration technology.
Judge Leonard Davis of the U.S. District Court for the Eastern District of Texas signed off Thursday on a settlement and license agreement between Realtime, IT supplier F5 Networks and Averitt Express Inc.
The order dismisses all claims and counterclaims between Realtime and the defendants. Each party will pick up the tab for its own court costs and attorneys' fees, the ruling said.
The terms of the agreement, signed Oct. 19, will remain under wraps, and an attorney for F5 and Averitt declined to comment on the resolution, citing confidentiality provisions of the deal.
An attorney for Realtime did not immediately respond to a request for comment Friday.
Realtime filed suit against roughly a dozen companies in April, alleging the manufacturers and customers had infringed several of its patents by using or producing data compression products without Realtime's consent, according to the complaint.
“Realtime Data has suffered damages by reason of defendants’ infringement of the [patents] and will suffer additional damages and will be irreparably injured unless this court enjoins defendants from continuing such infringement,” the complaint said.
The plaintiff named four manufacturers, including F5, Citrix Systems Inc., Expand Networks Inc. and Packeteer Inc., a subsidiary of Blue Coat Systems Inc., as well as customers who allegedly purchased or leased their data acceleration products and services, including 7-Eleven Inc., DHL Express (USA) Inc. and Build-A-Bear Workshop Inc.
Realtime dropped DHL from the suit in August, after the parties stipulated that the shipping company had used only two of Citrix's products and only one created by Blue Coat, according to a stipulation of dismissal.
The patents-in-suit are U.S. Patent Number 6,601,104; U.S. Patent Number 6,604,158; U.S. Patent Number 7,321,937, all titled “System and methods for accelerated data storage and retrieval”; U.S. Patent Number 6,624,761, titled “Content independent data compression method and system”; U.S. Patent Number 6,748,457, titled “Data storewidth accelerator”; U.S. Patent Number 7,161,506, titled “Systems and methods for data compression such as content dependent data compression”; and U.S. Patent Number 7,352,300, titled “Data compression systems and methods.”
They were issued between July 2003 and April 2008.
Realtime followed the April suit with three other complaints, filed in July, against stock exchanges, financial institutions and news organizations over patented data compression technology.
Those suits, which name defendants CME Group Inc., NYSE Euronext, Bank of America Corp., Goldman Sachs & Co., Bloomberg LP, Thomson Reuters Corp. and others, allege infringement of the '761 patent and several others.
Realtime is represented by Potter Minton PC and Ropes & Gray LLP.
F5 Networks and Averitt are represented by Perkins Coie LLP and Ramey & Flock PC.
The case is Realtime Data LLC d/b/a IXO v. Packeteer Inc. et al., case number 6:08-cv-00144, in the U.S. District Court for the Eastern District of Texas.132731002009/12/05 00:00Realtime, F5 Networks Reach Deal In Data Patent SpatFriday, Nov 06, 20092009/11/052009/11/05892009/11/061Realtime Data LLC has won court approval for a settlement and licensing deal with F5 Networks Inc. and one of its customers, putting to rest allegations that the companies infringed seven patents covering compression-based data acceleration technology.7acf90ce91e24046bb0984c661772729802009-11-06T13:35:00-06:00A federal judge has dismissed two defendants from an optical drive patent dispute brought by Ricoh Co. Ltd. against rival Quanta Computer Inc., slimming down the case as it inches toward trial.
Judge Barbara Crabb of the U.S. District Court for the Western District of Wisconsin on Wednesday dismissed the case against defendants New Universe Technology Inc. and NU Technology Inc., after Ricoh indicated it would not proceed to trial against them.
Ricoh had accused the two, along with the much larger Quanta, of infringing four patents related to optical disc drives.
Ricoh's reason for dropping the companies from the dispute was not laid out in the order.
Quanta faces claims of contributory infringement after the U.S. Court of Appeals for the Federal Circuit revived Ricoh's case against it in December 2008.
Quanta once owned the dropped defendants, according to Ricoh. New Universe Technology is a Taiwanese manufacturer of optical drives that originated as the Consumer Division of Quanta, according to Ricoh. Nu Technology is the company's U.S. subsidiary, Ricoh said.
In a letter sent Thursday, Ricoh also offered to drop claims against Quanta's U.S. subsidiary, Quantum Computer USA Inc., to streamline the case, if its parent would stipulate that it knows the details of QCA's business.
As is, Ricoh is gearing up for trial against both entities, it said. The company seemed less interested in the smaller defendants.
The company had not even managed to successfully serve New Universe Technology with a complaint, it said in a letter to Judge Crabb dated Nov. 2. The letter informed the court Ricoh would not proceed to trial against it or NU, a statement Judge Crabb took to be a voluntary motion of dismissal.
Originally, Ricoh asserted four patents against Quanta: U.S. Patent Numbers 6,631,109; 6,172,955; 5,063,552; and 6,661,755.
A district court had dismissed all of Ricoh's claims against Quanta, but the U.S. Court of Appeals for the Federal Circuit reinstated part of the suit in late December.
The Federal Circuit vacated the district court’s grant of summary judgment of no contributory infringement and remanded that portion of the decision to the district court for further proceedings, saying that the lower court should examine whether Quanta’s optical disc drives contain components that could only be used in such a way that they would infringe on Ricoh’s patented technology.
The appeals court warned that "Quanta should not be permitted to escape liability as a contributory infringer merely by embedding that microcontroller in a larger product with some additional, separable feature before importing and selling it."
The Federal Circuit also said the lower court had incorrectly applied the law of active inducement when it considered Ricoh’s claims that Quanta had encouraged its customers to infringe the patents-at-issue, and it remanded that part of the lower court's decision as well.
The U.S. Supreme Court later declined to hear the case after Quanta appealed.
Kellogg Huber Hansen Todd Evans & Figel PLLC represents Ricoh.
Paul Hastings Janofsky & Walker LLP represents Quanta.
The case is Ricoh Co. Ltd. v. Quanta Computer Inc., case number 3:06-cv-00462, in the U.S. District Court for the Western District of Wisconsin.
--Additional reporting by Melissa Lipman132549002009/12/05 00:00Ricoh Dismisses 2 Defendants From Drive Patent SuitFriday, Nov 06, 20092009/11/052009/11/05502009/11/061A federal judge has dismissed two defendants from an optical drive patent dispute brought by Ricoh Co. Ltd. against rival Quanta Computer Inc., slimming down the case as it inches toward trial.65dc905a9d984b358b82f61134a1832d902009-11-06T13:28:00-06:00A video gamer in Canada has launched a putative class action against Sony Computer Entertainment America Inc. and Sony of Canada Ltd., seeking up to $35 million for alleged damage to PlayStation 3 consoles following the installation of a firmware update.
Sony knew or should have known of inherent defects in the 3.0 version of the PS3 firmware with the potential to seriously damage consoles, but the company nevertheless required PS3 users to install the program, causing major system damage, according to the statement of claim filed in the Ontario Superior Court of Justice on Thursday.
The electronics company made the firmware update available for download on Sept. 1, and shortly after installing it, users began to experience problems such as the console shutting down with an inability to restart, freezing of video games, loss of use of the handheld controller and problems using the optical disc drive, the suit alleges.
Problems were worsened by version 3.01 of the firmware, which was released on Sept. 15 in an attempt to rectify damage caused by the 3.0 update, plaintiff Greg Cowtan claims.
The firmware updates caused PS3 consoles to malfunction as a result of hardware damage, the statement contends, adding that Sony failed to perform adequate testing to detect the performance degradation and hardware failures caused by the updates.
The company failed to warn consumers of the updates' defects, and continued to distribute defective updates that caused and continue to cause widespread financial damage to thousands of users, according to the suit.
Users who reported the malfunctions to Sony were informed that the cost of repairing their unit would be roughly $190, that the cause of the malfunction was not related to the firmware updates and that a brand new PS3 could be purchased for under $300, the statement of claim says.
“People trusted Sony to develop firmware updates that would not damage their console, and that trust was violated,” attorney Joel P. Rochon of Rochon Genova LLP, who represents the named plaintiff, said Friday.
“This action seeks to deliver fair compensation to Canadian consumers with damaged consoles,” he said.
Many owners have spent hundreds of dollars repairing their consoles, because the alleged damage occurred outside the warranty period, according to Rochon.
Sony has refused to assume the cost of repair or assume responsibility for the problem, he said.
“Sony has an obligation to ensure that their required updates are fully compatible with all their machines, not just those in warranty,” Cowtan said Friday.
The suit is seeking class certification and the appointment of Cowtan as representative plaintiff, $25 million in general damages or disgorgement of profits and revenue, reimbursement for expenses related to the alleged damage, an additional $10 million in punitive damages, interest and costs.
The proposed class includes all users and owners of a PS3 who installed versions 3.0 or 3.01 of the firmware from the September release dates onward.
Cowtan, a 36-year-old software engineer from Oshawa, Ontario, has owned a PS3 since late 2006, the statement of claim says.
A similar putative class action was filed against Sony in the U.S. District Court for the Northern District of California in October.
Firmware is a type of software that controls how chips within an electronic system function, by themselves and with each other. Firmware usually facilitates a device's basic operations without which the device would be unable to operate, but may also enable higher-level functions.
Representatives for Sony did not immediately respond to requests for comment Friday.
Cowtan is represented by Rochon Genova LLP.
Counsel information for the defendants was not immediately available.
The case is Greg Cowtan v. Sony Computer Entertainment America Inc. and Sony of Canada Ltd., case number cv-09-390656, in the Ontario Superior Court of Justice.132796002009/12/06 00:00Canadian PS3 Player Sues Sony Over Faulty SoftwareFriday, Nov 06, 20092009/11/062009/11/06742009/11/061A video gamer in Canada has launched a putative class action against Sony Computer Entertainment America Inc. and Sony of Canada Ltd., seeking up to $35 million for alleged damage to PlayStation 3 consoles following the installation of a firmware update. d63625c4794e4c8695a869fc170dbe1e592009-11-06T13:25:00-06:00Advertising by Sony Electronics Inc. significantly overstates how long the batteries last in its Vaio series of laptop computers, according to a proposed class action alleging breach of contract and violations of Missouri and California consumer protection laws.
The suit, filed Thursday in the U.S. District Court for the Eastern District of Missouri by consumer Dennis Cardwell, seeks to represent a class of all those who purchased a Vaio computer between 2004 and the present.
The suit is the third in recent weeks filed against laptop computer makers for allegedly overstating battery life.
Cardwell's suit maintains that in order to get maximum battery life from Vaio batteries advertised by Sony, users cannot watch DVDs, use the Internet or use other similarly energy-intensive applications. Sony never informs consumers of this fact, the suit claims.
Advertised claims of battery life for Vaio products, which range from four to seven hours, are “false and overstated significantly,” the suit claims.
“Typically, the maximum number of hours represented by Sony for battery life is over twice the true maximum battery life of the computer laptop or notebook for normal uses of the product,” the suit claimed.
According to the suit, the allegedly misleading battery life estimates come from performing a test that involves darkening the computer screen, turning off the audio, disconnecting the computer from the Internet and, in the suit's words, “letting the computer sit there doing nothing.”
The suit claims that this “preposterous” test was developed by a Japanese electronics trade group, the Japan Electronics and Information Technology Industries Association, of which Sony is a member.
Cardwell claims that when he first took his Vaio out of the box and charged it fully, it ran out of power after just over two hours. Advertising claims for the model he purchased contained a battery life estimate, allegedly derived from the flawed test, of “up to six hours,” the suit claims.
The suit claims that Cardwell sent a letter to Sony last month, stating that he believed the company's battery life claims constituted breach of contract. Sony responded with an offer to resolve the claims, which was “unacceptable” and was rejected, the suit claims.
A representative of Sony could not be reached for comment on the suit.
In August, a consumer filed a proposed class action against Intel Corp. in the U.S. District Court for the Northern District of California, claiming that the company overstated battery life for laptops that run on Intel microprocessors.
According to that suit, Intel uses a test that assumes a computer is idle 90 percent of the time to arrive at its battery life estimates.
In October, another proposed class action was filed against Intel, Dell Inc. and Gateway Inc., making substantially similar allegations about the battery life of computers made by those companies.
On Wednesday, Judge G. Patrick Murphy of the U.S. District Court for the Southern District of Illinois told the plaintiffs in that suit to file a new version of their complaint properly establishing the court's jurisdiction under the Class Action Fairness Act, or face dismissal.
The suit did not properly allege that the proposed class contained at least 100 members, the judge ruled.
The Medler Law Firm is representing Cardwell in this matter.
The case is Cardwell v. Sony Electronics Inc., case number 09-cv-01823, in the U.S. District Court for the Eastern District of Missouri.
--Additional reporting by Ben James and Shannon Henson132820002009/12/06 00:00Sony Latest To Be Sued Over Laptop Battery LifeFriday, Nov 06, 20092009/11/062009/11/06502009/11/061Advertising by Sony Electronics Inc. significantly overstates how long the batteries last in its Vaio series of laptop computers, according to a proposed class action alleging breach of contract and violations of Missouri and California consumer protection laws.7075308e923041f48c1dcba86834e6e3242009-11-05T19:05:00-06:00Home Box Office is seeking cure amounts adding up to $6.4 million for unpaid affiliation agreements it held with bankrupt Charter Communications Inc., rejecting the cable provider's plan to offer HBO nothing for Charter's long-standing debt under its Chapter 11 reorganization plan.
In a motion filed Thursday in the U.S. Bankruptcy Court for the Southern District of New York, HBO objected to Charter's proposal to pay nothing to cure $1.4 million in overdue payments on licensing deals that allowed Charter to market and carry HBO channels, including movie programming from Cinemax and certain high-definition and on-demand services between September 2005 and November 2007.
On top of that, HBO is seeking an additional $4.78 million in accrued interest payments for overdue affiliation payments from February 2003 up until when Charter sought Chapter 11 protection in March 2009, and more than $265,000 for interest accumulated since then.
In the motion, HBO claimed that Charter could not assume its affiliation agreements post-petition unless it is able to pay the cure amounts, under Section 365(b) of the Bankruptcy Code. Its objections extend to Charter's plan to keep carrying the channels, should it not pay the demanded cure amount.
Specifically, Charter is seeking to continue five agreements currently held with HBO: a general HBO service affiliation agreement, Cinemax affiliation deal, HBO On Demand and Cinemax On Demand agreements, a Cinemax HDTV feed agreement and a marketing deal.
The unpaid principle amounts reflect charges for Charter's distribution of HBO and Cinemax television services to commercial facilities like hotel rooms, HBO said. Interest payments kicked in after payments were not made within 30 days of their due dates, according to HBO.
In its restructuring plan, which Judge James Peck said on Oct. 16 he would soon order confirmed, Charter proposed a cure amount of $0, while seeking to assume the five HBO agreements when it emerges from bankruptcy.
On Oct. 27, Turner Broadcasting System Inc., which offers channels including TBS and CNN, filed a motion objecting to Charter's proffered $0 cure amount for various affiliation agreements between the two companies, although it did not object to Charter's plan to assume the agreements.
It did, however, indicate that it would reserve its right to assert additional charges under the deal for services prior to and after Charter's bankruptcy filing.
A representative for Charter declined to comment on the motion.
Charter, the fourth-largest cable provider in the U.S., filed for Chapter 11 protection in March, listing $13.1 billion in assets and $24.2 billion in debt.
It had hoped to have a reorganization plan approved by the summer, but a slew of objections from federal regulators, investors and lenders forced it to continue tweaking the plan. With the tentative go-ahead from Judge Peck, the latest version is scheduled for a confirmation hearing on Nov. 17.
Charter is represented by Kirkland & Ellis LLP and Togut Segal & Segal LLP.
The case is In re: Charter Communications Inc. et al., case number 09-11435, in the U.S. Bankruptcy Court for the Southern District of New York.
--Additional reporting by Erin Marie Daly and Ben James132728002009/12/05 00:00HBO Demands $6.4M From Charter For Affiliate DealsThursday, Nov 05, 20092009/11/052009/11/051002009/11/051Home Box Office is seeking cure amounts adding up to $6.4 million for unpaid affiliation agreements it held with bankrupt Charter Communications Inc., rejecting the cable provider's plan to offer HBO nothing for Charter's long-standing debt under its Chapter 11 reorganization plan. 6599441913104550a828a22a0fd637f6902009-11-05T17:07:00-06:00British Telecommunications PLC has lodged a suit in federal court accusing an American subsidiary of semiconductor company MediaTek Inc. of infringing a data compression patent.
BT's complaint, filed Monday in the U.S. District Court for the District of Massachusetts, accuses Woburn, Mass.-based MediaTek Wireless Inc. of knowingly infringing U.S. Patent No. 5,153,591, entitled “Method and Apparatus for Encoding, Decoding and Transmitting Data in Compressed Form.”
The defendant's parent company is headquartered in Taiwan.
BT alleges that MediaTek Wireless has made, used, sold and imported products that practice inventions claimed by the '591 patent, which the U.S. Patent & Trademark Office issued in October of 1992.
MediaTek Wireless may also have committed contributory infringement by inducing others to infringe, according to the complaint.
Infringing products include the company's AD 20msp430 SoftFone baseband chipsets and accompanying software, and any product that enables compression and decompression of data to be transmitted over wireless networks using methods described by the patent.
James Shalek, an attorney for BT, said the '591 patent describes “a particularly beneficial” method for “compressing data for transmission in accordance with a particular standard that is in widespread use in the industry.”
BT has not shied away from licensing the patent, Shalek said, but expects those who use its methods to do so legally.
“It's a fundamental patent for which there are already 50 active licensees,” Shalek, of Proskauer Rose LLP, said Thursday. “BT has a program in place where it has been monitoring the market” for illegal use of information contained in the patent, he said.
BT reached out to MediaTek Wireless and placed it “on notice” when it learned of the infringement, the company says in the suit.
“We've had some discussions [with MediaTek Wireless] but they didn't move forward in a manner towards resolution, and it's resulted in a lawsuit,” Shalek said.
BT seeks monetary damages, prejudgment interest, attorneys' fees and costs, and punitive damages on the basis that the alleged infringement was willful, according to the complaint.
The company is also seeking a jury trial.
A representative for MediaTek Wireless could not be reached for comment by deadline Thursday. A MediaTek representative in Taiwan told Dow Jones the company denies the allegations, and that the patent-in-suit expired in October.
BT Group, one of the world's largest communications companies, last made waves in the legal world in 2007, when the European Union's competition watchdog investigated allegations that the company was receiving special treatment under government-guaranteed exemptions covering the company's pension liabilities.
MediaTek also made headlines in 2007, when it settled patent infringement cases brought against it by rival communications company Matsushita Electric Industrial Co. over optical disk controller chips and chipsets that allegedly infringed three patents.
Information on counsel for MediaTek Wireless was not immediately available Thursday.
BT is represented in the case by Proskauer Rose LLP.
The case is British Telecommunications PLC v. MediaTek Wireless Inc., case number 09-cv-11871, in the U.S. District Court for the District of Massachusetts.
--Additional reporting by Christine Caulfield and Brendan Pierson132539002009/12/05 00:00BT Sues MediaTek Over Data Transmission PatentThursday, Nov 05, 20092009/11/052009/11/051002009/11/051British Telecommunications PLC has lodged a suit in federal court accusing an American subsidiary of semiconductor company MediaTek Inc. of infringing a data compression patent.7ea85dcc0f0f4a8f9009f247f2f21793342009-11-05T16:03:00-06:00Mitsubishi Corp. apparently opted for an out-of-court settlement with a retired New York City professor over the alleged infringement of patented light-emitting diode technology, shortly after the professor resolved a wide-ranging dispute before the U.S. International Trade Commission over the same patents.
The Columbia University professor emeritus, Gertrude Neumark Rothschild, announced on Thursday that the Japanese conglomerate is the latest party with which she has inked a deal.
Although the terms of the agreement were not released, Rothschild granted Mitsubishi certain rights to U.S. Patent Number 5,252,499 on a global basis, according to her attorney, Albert Jacobs Jr. of Troutman Sanders LLP.
In the past, several companies had approached the professor to avoid litigation, Jacobs said, and Showa Denko, Seiwa Electric Manufacturing Co. Ltd., BenQ Corp. and Epistar Corp. have previously reached similar out-of-court deals.
Mitsubishi was the last to do so, and the parties were able to reach an “amicable solution,” Jacobs said.
A representative for the company did not immediately return a request for comment on Thursday.
Rothschild has hauled dozens of companies into proceedings before the ITC and in federal court. She has settled with LG Electronics, Motorola Inc., Samsung Electronics Co. Ltd., Sharp Corp., Sony Corp. and Koninklijke Philips Electronics, among others.
The sole owner of the '499 patent, Rothschild has now inked settlements or licensing agreements with more than 40 companies, generating more than $27 million, Jacobs said.
"Dr. Rothschild made a seminal breakthrough in the production of LEDs and LDs, especially the blue, violet and ultraviolet LEDs that are essential to a wide variety of consumer electronics products today," Jacobs said. "She richly deserves both scientific as well as commercial recognition for her work."
Rothschild recently dropped her ITC complaints against Toshiba Corp. and Panasonic Corp., according to documents released Monday, ending an investigation that involved more than 30 companies in allegations that they infringed one of the professor's LED patents.
While all the accused companies have settled Rothschild's claims, approximately 35 of them have also agreed to licensing agreements for her technology, which covers a type and method of making low-resistivity wideband gap semiconductors, according to Jacobs.
Rothschild also has pending litigation against Cree Inc. in the U.S. District Court for the Southern District of New York over the '499 patent and another patent assigned to her, U.S. Patent Number 4,904,618.
She is also pursuing a suit against Osram GmbH in Düsseldorf, Germany and proceedings against six Taiwanese companies in Taiwan over foreign patents that generally correspond to the two U.S. patents, Jacobs said.
Rothschild's patents include U.S. Patent Number 5,252,499, titled “Wide band-gap semiconductors having low bipolar resistivity and method of formation,” issued in October 1993, and the recently expired U.S. Patent Number 4,904,618, titled “Process for doping crystals of wide band gap semiconductors,” issued in 1990.
The patents cover methods for producing wide band-gap semiconductors for LEDs and LDs.
The methods are used in products such as Sony's Blu-ray format video players, Motorola Inc.'s Razr phones, Hitachi Ltd. camcorders, backlighting for computers, street lighting and optical storage, Rothschild claims.132655002009/12/05 00:00Mitsubishi Reaches Patent Deal With NYC ProfThursday, Nov 05, 20092009/11/052009/11/05502009/11/051Mitsubishi Corp. apparently opted for an out-of-court settlement with a retired New York City professor over the alleged infringement of patented light-emitting diode technology, shortly after the professor resolved a wide-ranging dispute before the U.S. International Trade Commission over the same patents.5392dd2252b54168a554da68c75e8383472009-11-05T15:42:00-06:00Negotiators from the European Parliament and the European Union's Council of Ministers have reached a deal on a controversial legislative provision to protect Internet freedom within the 27-member bloc, paving the way for a larger telecommunications reform package to take effect in early 2010.
Following "intense" negotiations mediated by the European Commission, representatives from the parliament and the council agreed in the early hours of Thursday morning to include the measure, which provides strong safeguards for Internet users' rights to online access.
Though EU legislators had overwhelmingly voted in favor of the reform package in May, the proposal's Internet freedom clause had provided a sticking point in negotiations between parliament and the council.
But based on a "strong request" from members of the parliament, negotiators from all three EU bodies unanimously agreed to include the protections, which bar restrictions on access to Internet services without prior ruling by judicial authorities
EU nations can only limit Internet access if the steps they take are "appropriate, proportionate and necessary within a democratic society," according to the legislation.
Though the agreement still requires final approval from the entire parliament and council, Thursday's deal means the reform package could take effect as early as 2010. Member nations would then have 18 months to integrate the new measures into their laws.
EU telecommunications commissioner Viviane Reding hailed the agreement as "very good news for Europe's citizens.
"This Internet freedom provision is unprecedented across the globe and a strong signal that the EU takes fundamental rights very seriously, in particular when it comes to the Information Society," Reding said.
The provision will prevent member countries from implementing "three-strikes-laws" like the one passed by French legislators earlier this year that bars Internet users from online access the third time they're caught illegally downloading music or movies.
Reding noted Thursday that such laws "could cut off Internet access without a prior fair and impartial procedure or without effective and timely judicial review" and vowed that they "will certainly not become part of European law."
In early May, members of the parliament voted 407-57 to reinstate the provision, altering an earlier agreement with the Council of Ministers, the other half of the EU’s legislative branch.
The European Commission had opposed the amendment, which some groups fear would make it more difficult to shut down access to people who illegally download copyrighted material.
Other reforms include a right for European consumers to quickly change mobile or landline phone services while keeping existing phone numbers; requirements for telecom companies to provide better information to consumers about communication service contracts; EU oversight over competition remedies in telecom markets; enhanced broadband and 3G mobile services and more consumer protections against data breaches and spam.
To help implement the reforms, the proposal would also create a new European telecoms authority to oversee the market named the Body of European Regulators for Electronic Communications, or BEREC.
The commissioner added that the broader reform "will substantially enhance consumer rights and consumer choice in Europe's telecoms markets," protect Internet neutrality, increase competition and investment in telecoms and make room for new mobile services.
The package has been in the works since the end of 2005, when the commission began consulting with the public on changes to the EU’s telecom rules, according to the EC.
The commission formerly adopted a set of proposals for telecom reform in November 2007.
--Additional reporting by Chrystie Smythe 132543002009/12/05 00:00EU Lawmakers Reach Deal On Telecom ReformThursday, Nov 05, 20092009/11/052009/11/051002009/11/051Negotiators from the European Parliament and the European Union's Council of Ministers have reached a deal on a controversial legislative provision to protect Internet freedom within the 27-member bloc, paving the way for a larger telecommunications reform package to take effect in early 2010.5331a50aeae14c1084fc99514193aa5a722009-11-05T15:37:00-06:00The Swiss Federal Competition Commission has hit state-owned telecommunications group Swisscom AG with a fine of 219 million Swiss francs ($216 million) for allegedly abusing its dominant position in the broadband market by overcharging competitors for high-speed Internet access.
Swisscom confirmed the commission's ruling in a statement Thursday, adding that the company has lodged an objection to the decision with the Federal Administrative Court.
“The company puts its chances in the appeal procedure as intact and based on its current assessment is not therefore setting aside any provisions,” Swisscom said.
Comco imposed the fine after determining that Swisscom's inflated prices for broadband connectivity services for some of its customers prevented competitors from operating their DSL businesses profitably, according to Swisscom.
The company called Comco's allegations unjustified, saying that a close infrastructure competition exists between various cable network providers in Switzerland and that Swisscom has shown that it can run a DSL end-customer business profitably.
“Swisscom improves its BBCS offerings continuously in terms of price and bandwidth, so that also in comparison with cable network offerings, competitive pricing is possible,” the company said.
The telecommunications company added that Comco's determination was premature because it came before the Federal Administrative Court issued its determination on Swisscom's contention questioning the authority of Comco to impose fines in connection with proceedings on termination rates.
“Swisscom is therefore very surprised that the Competition Commission chose not to await the fundamental ruling of the court and, despite the unclear legal situation, imposed another fine on Swisscom,” it said.
Comco could not be immediately reached for comment on Thursday.
The Swiss agency took up its Internet fees investigation in March 2007, less than a month after slapping Swisscom with a fine of 333 million Swiss francs ($270 million) for allegedly overcharging customers in relation to mobile phone termination fees.
Swisscom lashed out at that decision as well, saying it rejected the charge that it misused its dominant market position and appealing that ruling to the Federal Administrative Court.
Comco opened its mobile phone antitrust investigation in November 2002 against Swisscom and two other mobile phone operators, Sunrise and Orange, in order to examine the high termination charges in Switzerland as compared with other European countries.
According to Swisscom, it has historically charged the lowest mobile termination fees of any Swiss mobile provider and receives no advantage over the other mobile phone providers as a result of the termination fees.
The company also criticized Comco for classifying it as the only dominant mobile phone provider, arguing that Sunrise and Orange also have dominant market positions.
Swiss regulators had been threatening Swisscom with steep fines since April 2006, despite the company’s consistent denial of any wrongdoing.
Swisscom is an offshoot of state-owned PTT and is currently the largest operator in fixed-line and mobile telephony in Switzerland.
--Additional reporting by Erin Marie Daly132596002009/12/05 00:00Swiss Competition Agency Fines Swisscom $216M Thursday, Nov 05, 20092009/11/052009/11/05742009/11/051The Swiss Federal Competition Commission has hit state-owned telecommunications group Swisscom AG with a fine of 219 million Swiss francs ($216 million) for allegedly abusing its dominant position in the broadband market by overcharging competitors for high-speed Internet access.8e06d7fd9a1d445ab0fbd70b23591192722009-11-05T15:31:00-06:00A pension fund that sued VeriFone Holdings Inc. for allegedly overstating its income for three 2007 quarters by more than $37 million is opposing the U.S. Securities and Exchange Commission’s proposed settlement related to the alleged fraud.
The National Elevator Industry Pension Fund said in an amicus brief filed Wednesday in the U.S. District Court for the Northern District of California that the SEC’s proposed settlement of its claims against VeriFone and its former supply chain controller Paul Periolat “threatens to undermine the letter and spirit of the federal securities laws.”
The Silicon Valley technology company and Periolat both struck settlement deals, which remain subject to court approval, with the SEC in August.
VeriFone consented to a permanent injunction barring future violations of the reporting, internal controls and other provisions of federal securities laws, but no monetary penalty was assessed against it.
Periolat also consented to a permanent injunction against future violations of federal securities laws and agreed to pay a $25,000 civil penalty.
In its brief, the fund — which serves tens of thousands of elevator service workers, including construction and repair workers responsible for approximately 75 percent of the elevator work in the U.S. — called the deal “miniscule” and said it lacked a reasonable basis.
The fund is lead plaintiff in a separate securities fraud class action against VeriFone and its top officers that is currently pending in the same court.
National elevator workers, the fund claims in that case, suffered over $2 million in damages as a result of the alleged misconduct, while class members lost $1 billion.
According to the fund’s brief, the SEC has “inexplicably failed to charge the main culprits of the fraud” — VeriFone CEO Douglas Bergeron and Chief Financial Officer Barry Zwarenstein.
The two men “directed, encouraged and were aware of VeriFone’s fraudulent accounting manipulations at the time they certified VeriFone’s results and unloaded their VeriFone stock,” the brief said.
In addition, the fund took the SEC to task for failing to invoke the disgorgement and forfeiture remedies set forth in Section 304 of the Sarbanes-Oxley Act.
That section requires the CEO and CFO to forfeit and reimburse the company for any profits from stock sales and incentive-based compensation received during the 12-month period in which a company’s financial results were false and had to be restated due to misconduct.
In this case, the fund argued, the amount of potential reimbursements under Section 304 is upwards of $100 million.
“The SEC’s proposed settlement fails to explain the omission of this important remedial provision,” the fund said. “In fact, the SEC failed to even mention the massive insider trading occurring at VeriFone during the restatement period.”
The fund noted that under current law, private plaintiffs like the national elevator workers can’t invoke Section 304, making the SEC one of investors’ last lines of defense in imposing such remedies to obtain disgorgement of the executives’ insider-trading proceeds and bonuses.
Moreover, the fund said, SOX’s “Fair Funds for Investors” provision gives the SEC the power to impose civil penalties, and those funds can be “added to and become part of the disgorgement fund for the benefit of the victims of such violation.”
“The SEC’s insignificant $25,000 fine and failure to invoke these important Sarbanes-Oxley remedies deserves closer scrutiny,” the fund said.
According to the SEC, VeriFone altered its records in three consecutive quarters in 2007 to make up for an unexpected decline in gross margins, overstating its operating income by 129 percent. When those misrepresentations were unearthed in December 2007, VeriFone's stock price plummeted 46 percent.
Periolat then made large manual adjustments to inventory balances on VeriFone's books, improperly inflating the company’s income by more than $37 million, according to the SEC.
The fund is represented by Coughlin Stoia Geller Rudman & Robbins LLP. VeriFone is represented by Sullivan & Cromwell LLP. Periolat is represented by Shearman & Sterling LLP.
The case is U.S. Securities and Exchange Commission v. VeriFone Holdings Inc. et al., case number 09-4046, in the U.S. District Court for the Northern District of California.
--Additional reporting by Ben James132660002009/12/05 00:00Pension Fund Fights SEC’s Proposed VeriFone DealThursday, Nov 05, 20092009/11/052009/11/05732009/11/051A pension fund that sued VeriFone Holdings Inc. for allegedly overstating its income for three 2007 quarters by more than $37 million is opposing the U.S. Securities and Exchange Commission’s proposed settlement related to the alleged fraud.512260d131e34a3f95bbed2de8959188242009-11-05T14:56:00-06:00A bankruptcy court judge has approved bankrupt technology consulting firm BearingPoint Inc.'s disclosure statement, days after plaintiffs in a shareholder class action objected to the company's Chapter 11 liquidation plan.
In approving the disclosure statement Wednesday, Judge Robert E. Gerber of the U.S. Bankruptcy Court for the Southern District of New York set a hearing for the confirmation of the firm's liquidation plan for Dec. 17. The deadline for objections to the liquidation plan is Dec. 10, according to the order.
BearingPoint's plan, filed Oct. 5 along with the disclosure statement, would liquidate its assets, including the sale of its North American commercial operations to PricewaterhouseCoopers LLP for $1.76 billion.
Judge Gerber's approval of the BearingPoint disclosure statement came just days after lead plaintiffs in a securities fraud class action against the company filed an opposition to the liquidation plan in bankruptcy court, saying the plan doesn't take into account the impact of the litigation on the company's estate.
The shareholder plaintiffs argue that, among its defects, BearingPoint's Chapter 11 plan and disclosure statement fail to provide a status update on the class action, improperly release claims against nondebtor defendants in the suit and fail to provide for the preservation of company records, according to the objection, which was filed Friday.
Containing “broad and ambiguous provisions” that could mislead claim holders, the disclosure statement provides insufficient information to allow for an informed judgment on the plan, the plaintiffs claim.
Counsel for the shareholder plaintiffs could not be reached for comment.
The shareholders' class action against BearingPoint and its top executives was filed in the U.S. District Court for the Eastern District of Virginia more than four years ago, alleging that the “defendants defrauded the market by knowingly or recklessly publishing false financial information despite awareness of BearingPoint's 'lax internal controls' and dysfunctional accounting systems.”
The suit was dismissed with prejudice in November 2007 for failing to reach the pleading bar established by the U.S. Supreme Court's Tellabs ruling, but the U.S. Court of Appeals for the Fourth Circuit revived the case on July 31.
The appeals court agreed that the shareholders' first amended complaint had inadequately pled scienter under the heightened standard, but ruled that the district court had erred when it refused the plaintiffs' motion to correct the deficiencies in a second amended complaint.
The ruling was a major victory for the plaintiffs, which had won limited relief from the automatic stay protecting BearingPoint in Chapter 11 to hear the appeals court decision.
BearingPoint, formerly known as KPMG Consulting LLC, filed for bankruptcy March 6, after oral arguments were heard in the shareholders' appeal. The bankruptcy court modified the automatic stay on May 7 to allow the Fourth Circuit to issue its ruling.
The class action came in the wake of an April 2005 announcement that BearingPoint would take an impairment charge of between $250 million and $400 million due to accounting errors and that its financial statements for 2003 and 2004 would be affected by the errors.
BearingPoint is represented in the restructuring process by Weil Gotshal & Manges LLP, and in the class action by Skadden Arps Slate Meagher & Flom LLP.
The plaintiffs are represented in both cases by Gold Bennett Cera & Sidener LLP and Lowenstein Sandler PC.
The bankruptcy case is In re: BearingPoint Inc. et al., case number 09-10691, in the U.S. Bankruptcy Court for the Southern District of New York.
The class action is In re: BearingPoint Inc. Securities Litigation, case number 1:05-cv-454, in the U.S. District Court for the Eastern District of Virginia.
--Additional reporting by Christine Caulfield132460002009/12/04 00:00BearingPoint Disclosure Statement Gets Court OKThursday, Nov 05, 20092009/11/042009/11/04502009/11/051A bankruptcy court judge has approved bankrupt technology consulting firm BearingPoint Inc.'s disclosure statement, days after plaintiffs in a shareholder class action objected to the company's Chapter 11 liquidation plan. 9c95c6b8f35e43e08a46591d65a4ecbf902009-11-05T14:38:00-06:00Following a failed attempt more than a year ago, JDA Software Group Inc. signed a deal to acquire i2 Technologies Inc. for $434 million on Thursday, a deal the companies say will create a global leader in supply chain management software.
JDA will finance the definitive merger agreement with cash, debt and common stock, the companies said in a statement.
The combined revenue from the acquisition is expected to be $617 million on a trailing 12-month basis, and the companies expect that they will have an annual cost savings of $20 million because of operating synergies resulting from the merger, according to the statement.
The acquisition will give JDA 6,000 total customers, the companies said.
“Our strategic rationale for acquiring i2 is even more compelling today than it was a year ago,” JDA CEO Hamish Brewer said.
“The challenges of the economic crisis have focused the market’s attention on the disciplines of supply chain planning and JDA has established a leading role in this active market. Integrating i2’s solutions and expertise will only expand our opportunity to build substantial new shareholder value over the coming years,” Brewer said.
“This is a powerful combination,” i2 CEO Jackson L. Wilson Jr said. “Our customers will be supported by a team of supply chain professionals that is unmatched in the industry. Innovation will accelerate. Our expanded geographic footprint will enhance sales penetration and service delivery.”
“This is the right transaction for our customers, partners and employees,” he added.
JDA will try to raise $275 million in senior unsecured notes by Dec. 18 for the purchase, according to the statement.
If it can raise the necessary funds, each i2 share will be exchanged for $12.70 in cash and 0.256 JDA shares; if not, each i2 share will be exchanged for $6 in cash and 0.58 shares of JDA, the companies said.
The board of directors of each company has approved the transaction, and it is expected to close in the first quarter of 2010, the companies said. It still must be approved by i2’s stockholders and is also awaiting expiration of the applicable Hart-Scott-Rodino waiting periods.
JDA attempted to buy i2 in 2008, but that merger fell through, reportedly because of JDA’s concerns over the faltering credit market.
The deal's collapse left legal problems for one JDA executive in its wake.
The company's former communications director was fined $330 million by the U.S. Securities and Exchange Commission in September to put to rest allegations that she told her husband to dump thousands of shares of i2 stock worth $163,000 on learning about the merger's collapse.
DLA Piper represents JDA in the transaction, and Goldman Sachs serves as financial adviser.
Munsch Hardt Kopf & Harr PC represents i2, while Thomas Wiesel Partners serves as financial adviser.
--Additional reporting by James Armstrong132498002009/12/05 00:00JDA Snaps Up I2 Technologies For $434MThursday, Nov 05, 20092009/11/052009/11/05952009/11/051Following a failed attempt more than a year ago, JDA Software Group Inc. signed a deal to acquire i2 Technologies Inc. for $434 million on Thursday, a deal the companies say will create a global leader in supply chain management software.e8e47dc6ae83408eb3e5bcee361414af882009-11-05T13:45:00-06:00AT&T Inc., Sprint Nextel Corp. and other wireless communications heavyweights have been accused by patent-holding company Child Protect LLC of infringing two patents related to control communications between mobile devices.
California-based Child Protect LLC sued Sprint, AT&T, Verizon Wireless, Virgin Mobile USA LP and several of their affiliates in the U.S. District Court for the Eastern District of Texas on Wednesday, seeking an injunction, monetary damages, and the impoundment and destruction of all infringing products.
The patents-in-suit are U.S. Patent Number 7,046,782, titled “Telephone call control system and methods,” and U.S. Patent Number 7,515,700, titled “Methods for controlling telephone position
reporting,” which both describe systems through which incoming or outgoing calls can be controlled.
The defendants infringe the patents through user options offered to their cell phone customers, according to the complaint.
Sprint's Family Locator,AT&T's Family Map, Verizon's Chaperone, Alltel Corp.'s Family Finder, and Virgin Mobile and Helio LLC's Buddy Beacon all infringe the two patents, the complaint alleges.
By continuing to manufacture and sell infringing products, the defendants are causing irreparable harm and monetary damage to Child Protect, the suit claims.
A spokesperson for Virgin Mobile said the company did not generally comment on litigation, adding that it had yet to see this complaint.
Representatives for the other defendants did not respond to requests for comment Thursday.
Child Protect is affiliated with Acacia Research Corp., which is also the parent company of Celltrace LLC.
Celltrace filed a separate suit against many of the same defendants in July over patents related to cell phone networks.
Celltrace sued 22 companies, including AT&T, Sprint, T-Mobile and Verizon subsidiaries, alleging infringement of U.S. Patent Numbers 6,011,976 and 7,551,933.
Issued in 2000, the '976 patent relates to a telecommunications system with value-added service directory and a corresponding integrated circuit module. Issued in June, the '933 patent covers a module for controlling a subscriber unit in a telecommunications system through fixed memory locations and detection methods.
On Tuesday, the judge in that case ordered the parties to agree on a mediator, after setting a Nov. 4, 2010, date for the Markman hearing ahead of a jury trial scheduled for May 9, 2011.
Child Protect is represented in the current matter by the Albritton Law Firm.
Counsel information for the defendants was not immediately available Thursday.
The case is Child Protect LLC v. Sprint Nextel Corp. et al., case number 6:09-cv-00498, in the U.S. District Court for the Eastern District of Texas132502002009/12/05 00:00AT&T, Sprint, Others Hit With Cell Phone Patent SuitThursday, Nov 05, 20092009/11/052009/11/05742009/11/051AT&T Inc., Sprint Nextel Corp. and other wireless communications heavyweights have been accused by patent-holding company Child Protect LLC of infringing two patents related to control communications between mobile devices.