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State AGs call for fee shifting, EC rule change to “dismay licensors”, Beastie Boys settle with GoldieBlox, Google ordered to pay $85 million – the week in IP

Nebraska and Vermont's attorneys general calling for fee shifting in patent reform, the EC adopting new rules for the assessment of technology transfer agreements, the Beastie Boys settling a copyright dispute with GoldieBlox, and Google being ordered to pay $85 million were among the intellectual property stories hitting the headlines this week

Managing IP this week revealed the winners of our Global Awards 2014 in London. Click here to find out the winners. We also collected all the best reactions to the awards in a Storify story here.

Getting shifty over patent reform

The attorneys general of Nebraska and Vermont have called on Senate Judiciary Committee leadership to include the ability to shift legal fees in patent reform.

Nebraska’s Jon Bruning (right) and Vermont’s William Sorrell, who have been big critics of patent trolls, wrote to Senators Patrick Leahy and Chuck Grassley to express support for their efforts to pass patent reform. The attorneys general said changes are needed to create “an environment in which abusers of the patent enforcement system cannot thrive”.

“One important reform to achieve this objective is to give courts greater ability to shift legal fees in appropriate cases,” the attorneys general wrote. “To this end, Vermont and Nebraska drafted an amicus brief in Octane Fitness, LLC v. Icon Health & Fitness, Inc before the Supreme Court this term, advocating for a more reasonable interpretation of the current ‘exceptional’ case standard. We were joined by a bipartisan group of 28 additional states. Notwithstanding these efforts, we believe that Congress is in the best position to address the issue directly and adopt a fee-shifting standard that discourages bad faith infringement assertions and litigation.”

The Innovation Act, passed by the House of Representatives in December, includes a fee shifting provision.

This was just one of many letters sent to the Senate Judiciary Committee this week. In contrast to the attorneys general, The National Venture Capital Association wrote to Senators Leahy and Grassley warning of the dangers of fee shifting, among other concerns.

“NVCA believes that proposals for mandatory fee shifting are overly simplistic responses to the patent troll problem, premised on the mistaken belief that trolls are going to lose most of the cases they bring,” wrote the association. “Well-funded trolls, however, know how to select the patents that they assert; thus undercutting the fundamental premise of the idea. Since the impact of a mandatory ‘loser pays’ rule will be bidirectional, it is likely to affect defendants as much as plaintiffs, perhaps more so.

“NVCA believes the biggest problem of the loser pays rule is that fee shifting will raise the risk level associated with patent litigation for BOTH parties, which places small companies actually using the patent system at a significant disadvantage against their larger competitors.”

In addition, Senate leaders were contacted by a group of entrepreneurs, investors and inventors urging passage of “comprehensive legislation that tackles the growing problem of patent trolls”. The Senate Judiciary Committee is scheduled to consider Senator Leahy’s patent reform bill on March 27.

EC rule change “will dismay licensors”

The European Commission has adopted new rules for the assessment of technology transfer agreements under EU antitrust rules. The goal is to enable companies to license the use of patents, know-how or software held by another company for the production of goods and services.

The revised rules facilitate such sharing of intellectual property, including through patent pools, and provide guidance on licensing agreements that stimulate competition.

“The regime adopted today provides better guidance to firms on how to license in ways that stimulate innovation and preserve a level playing field in the Single Market,” said the EC. “It consists of the Technology Transfer Block Exemption Regulation (TTBER), which exempts certain licensing agreements from antitrust rules, and the Technology Transfer Guidelines, which provide further guidance on the application of the rules.”

The main features of the new rules are: the revised regime continuing to reflect that licensing is in most cases pro-competitive; new guidance on "patent pools"; a more prudent approach on clauses that could harm competition and innovation, including certain types of clauses being no longer automatically exempted from antitrust rules but rather assessed case by case; and guidance on settlement agreements in light of the EC’s recent experience.

Licensors may not be too happy at the new rules. Pat Treacy, head of the competition practice at Bristows, commented that the new legislation “will shape the licensing landscape across the EU for years to come”.

“Despite much lobbying and debate, several of the changes will dismay licensors, who will have to consider more carefully some of the provisions they may want to include to protect themselves before licensing out their technology,” said Treacy. “There has been some shift in the Commission’s position though, with a change to ensure that SMEs are able to protect themselves when licensing to larger companies – this will particularly benefit small bio-tech firms and technology start-ups who will be able to terminate arrangements more easily if their IP is challenged.”

Google's $85 million loss

Google was this week ordered by a court in Texas to pay $85 million to SimpleAir for using technology that transmits data to computers and mobile devices without a licence. The amount was determined by a jury overseen by US District Judge Rodney Gilstrap for the Eastern District of Texas after a separate jury in January had decided Google had infringed the patent.

SimpleAir said that Google’s Cloud Messaging and Cloud to Messaging infringed a patent – US Patent No. 7,035,914 – issued in 2006. SimpleAir was seeking $146 million, while Google said the claims were worth no more than $6 million.

“The jury awarded far less than SimpleAir’s excessive demand, but we continue to believe we do not infringe and are considering our options,” Bloomberg quoted Matt Kallman, a Google spokesman, as saying.

SimpleAir sued the firm in September 2011. Microsoft, Nokia and Samsung were also sued but settled leaving Google to fight the case alone.

An end to ill communications

The Beastie Boys and toy company GoldieBlox have reached a settlement over a video that went viral in November featuring the hip hop act’s 1987 song Girls.

GoldieBlox had sued the Beastie Boys asserting its right to use the song in the video, which featured girls engaging in activities in the fields of science, technology, engineering and mathematics. The video featured lyrics changed from the original such as rewriting "Girls/To do my dishes/Girls/To clean up my room" to "Girls/To build a spaceship/Girls/To code the new app”.

The Beastie Boys countered that the video was an advertisement designed to sell a product and the group long ago decided never to allow its songs to be used for this purpose. Adam Yauch, one of the three Beastie Boys, died in 2012 but stipulated in his will that "in no event may my image or name or any music or any artistic property created by me be used for advertising purposes".

GoldieBlox took down the video in November but the Beastie Boys filed a copyright infringement suit in December.

This week it was revealed the suit was settled, with GoldieBlox posting a public apology at the bottom of the homepage on its website.

“We sincerely apologise for any negative impact our actions have had on the Beastie Boys. We never intended to cast the band in a negative light and we regret putting them in a position to defend themselves when they had done nothing wrong,” said the firm.

“As engineers and builders of intellectual property, we understand an artist's desire to have his or her work treated with respect. We should have reached out to the band before using their music in the video.”

Dot-Berlin stops Godaddy’s progress saw its share of the market for new gTLDs drop 5% this week after the launch of dot-Berlin, according to domains sales blog The Domains.

German domain registrar InterNetX said it had secured 81% of dot-Berlin preregistrations for its clients. Dot-Berlin’s nearly 32,000 of registrations account for 11% of the 294,000 new gTLD registrations.

However, is still by far the leading registrar of new gTLD registrations. According to The Domains, it holds a 34.2% share, well ahead of second-placed Enom’s 10% share.

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