Lawsuit Suite:Transformer Prime, BlackBerry Messenger, HTC/iPhone & Motorola/Microsoft

As the world spreads holiday cheer, technology companies are busy battling trademark and patent infotainment cases in court. The wireless world has been involved in a suite of lawsuits and legal battles recently, including RIM, Asus, HTC, iPhone and Motorola. Asus Transformer Prime Primed for Infringement of Hasbro Transformer Toys & More The most popular tablet of the holidays is the Asus Transformer Prime. Hasbro, the maker of the Transformer toys doesn't like the trademark infringement by Asus. Hasbro has filed a suit against Asus for the use of the "Transformer" name. Hasbro is suing Asus for trademark infringement, unfair competition, and trademark dilution. Hasbro is asking for financial damages and an order preventing Asus form using the "Transformer" name, which has been used for a line of tiny robotic toys since 1984. The toys are then featured in comic books, cartoons and motion pictures. "Hasbro continues to aggressively protect its brands and products and the specific actions we are taking today against Asus underscores yet again Hasbro's willingness to pursue companies who misappropriate our intellectual property for their own financial gain," the company said in a statement quoted in various news reports. Trademark Blues for BlackBerry RIM is being sued by BBM Canada, a sixt-year old broadcasting association for using BBM for the BlackBerrry Messenger. RIM's response included the following: "Since its launch in July 2005, the BlackBerry Messenger has become a tremendously popular social networking service. In 2010, RIM started to formally adopt the BBM acronym, which had, at that point, already been organically coined and widely used by BlackBerry Messenger customers as a natural abbreviation of the BlackBerry Messenger name." Apple/HTC Win/Win? HTC called their loss a win in the 647 patent infringement case in which the International Trade Commission ruled that HTC was copying some elements of the iPhone. HTC said they have removed the infringing feature. Apple's patent (647 patent) is for data detection that enables users to tap on a telephone number or address contained in an e-mail to immediately call the number or find the address on a map. Apple Photo Patent vs. Motorola Android Motorola and Apple are in a patent "war of attribution" in a German court for the "zoom in" mode in the Android photo gallery in relation to a photo patent. Experts expect Motorola to remove the offending features. Legal M & Ms - Microsoft and Motorola Microsoft won a small victory in a preliminary ruling by the ITC. ITC found that Motorola's Android devices infringed on aspects of a Microsoft patent, even though Motorola did not violate six of the seven patents. A final decision will be made in April 2012.

Cablevision and Verizon settle broadband speed ad lawsuit

Despite some strong rhetorical volleys, Cablevision and Verizon have settled their lawsuit over Verizon's broadband speeds ads which Cablevision argued were misleading. The central issue was Verizon's depiction of an FCC study which detailed slow speeds on Cablevision's network — although the study had been conducted in March and was published in August, Verizon's ads described it as "just released." Since that time, Cablevision had made progress in upgrading and improving its network, hence the lawsuit. Neither company provided details on the settlement beyond saying that they had "reached an agreement to resolve this dispute without further need for litigation." However, Reuters notes that Verizon told the court it would alter its ads to remove references to "new" and "recent." More to the point, the ads are no longer running, though not necessarily as a direct result of the suit or settlement. Verizon spokesman Bill Kula told FierceCable that the ads "ran their course, and ended Dec. 17th." Assuming the company's next campaign doesn't include references to the FCC's report, this little saga has come to a quiet close.

IPCom, Broadcom, Apple, Facebook: Intellectual Property

IPCom GmbH & Co. sued stores of Metro AG’s Media-Saturn unit in Germany for selling HTC Corp. 3G mobile phones that it says violate IPCom patents. IPCom sued about 25 stores, said Thomas Empt, a spokesman for the Pullach, Germany-based patent-licensing company. “Since the retailers are fully aware of the court decisions of patent infringement against HTC, and continue to sell the handsets despite our request to stop doing so, the retailers risk being held liable themselves for willfully infringing our patent,” Bernhard Frohwitter, managing director of IPCom, said in a statement. HTC hasn’t seen a complaint or been contacted by retailers about any IPCom lawsuit and “is committed to protecting its partners’ and customers’ interests,” according to a statement from an outside spokeswoman in London. Taoyuan, Taiwan-based HTC is still involved in litigation over the validity of the patent. Dusseldorf, Germany-based Metro’s consumer-electronics chains Media Markt and Saturn didn’t return a phone call and an e-mail seeking comment on the suits. Rambus, Broadcom Settle Patent Litigation for Undisclosed Terms Rambus Inc., a technology licensing company, settled patent disputes with Irvine, California’s Broadcom Corp., the Sunnyvale, California-based company said in a statement yesterday. The agreement ends all litigation, including claims related to Broadcom’s alleged past use of patented Rambus technology, according to the statement. The offending products are in Broadcom’s broadband communications, mobile and wireless, and network infrastructure lines, according to the court papers. The license runs for five years, with undisclosed financial terms, Rambus said in the statement. Rambus had sued Broadcom for patent infringement and also filed a complaint with the U.S. International Trade Commission, a body that has the authority to bar the importation of infringing products. The dispute between the two companies dates back to 2006, when Rambus made its first approach about a license. Rambus filed the trade complaint in December 2010, alleging that Broadcom infringed patents through its sale of semiconductors known as dynamic random access memory controllers. At that same time Rambus filed the patent infringement suit against Broadcom in federal court in San Francisco. That case is Rambus Inc. v. Broadcom Corp., 3:10-cv-05437- RS, U.S. District Court for the Northern District of California (San Francisco). For more patent news, click here. Trademark Apple Unlikely to Win German Ban on Samsung Galaxy 10.1N Apple Inc. is unlikely to win a ban on sales of Samsung Electronics Co.’s Galaxy 10.1N tablet computer, a modified version introduced after sales of the original tablet were blocked, a German court said. The Dusseldorf court that banned sales of the Galaxy 10.1 on Sept. 9 is unlikely to grant Apple an injunction against the Galaxy 10.1N, Presiding Judge Johanna Brueckner-Hofmann said at a hearing yesterday. Samsung has changed the device’s design sufficiently to distance it from the iPad, she said, adding that the view is preliminary. A ruling was scheduled for Feb. 9. “Consumers are well aware that there is an original and that competitors try to use similar designs, so buyers are vigilant when looking at products,” Brueckner-Hofmann said. Apple has faced setbacks in its legal fight against Samsung, its closest rival in tablet computers, since its initial September success in Germany. The iPad maker failed to convince an Australian court on Dec. 9 to reinstate a ban in that country and two days ago, a Dusseldorf court voiced doubts about the reach of Apple’s European Union design right that was the basis for the company’s Sept. 9 injunction. The new Samsung tablet has thicker edges and the front screen has speakers which distinguish it from the iPad, the court said. There is also a broad Samsung label that ensures consumers aren’t confused, according to the judges. Apple’s lawyer Matthias Koch argued that Samsung is still exploiting the reputation of the iPad. “That’s the typical strategy: You try to come as close as possible to the original and if you can no longer do it you introduce marginal changes,” Koch said. Samsung lawyer Thomas Musmann argued that Cupertino, California-based Apple is trying to monopolize the tablet format. “It’s not that there were no other tablets around and that all that came after the iPad are an illicit copy,” Musmann said. Yesterday’s case is LG Dusseldorf, 14c O 292/11. Mark Zuckerberg v. Mark Zuckerberg Facebook Case May Be Filed An Israeli entrepreneur who Facebook Inc. threatened to sue because he set up a service commercializing the social network’s “like” functions has changed his name to that of the Palo Alto, California-based company’s founder. Rotem Guez said on his website that he’s officially changed his name to Mark Zuckerberg following his receipt of a letter from Facebook’s counsel telling him to cease and desist operating his Like Store business. Businesses could use this service to offer incentives to Facebook users in return for their clicking the “like” button on the business’s listing. Counsel for Facebook told Guez that he was violating the terms of service for the use of the social-media site, and demanded he close down his company and never again access the Facebook site, he said on his website. Guez, now known as Mark Zuckerberg, left visitors to his website with a cliffhanger question: “Will Facebook sue Mark Zuckerberg? Or maybe the opposite? Stay tuned!” For more trademark news, click here. Copyright Electronic Arts Must Defend Activision Contract Claims at Trial Electronic Arts Inc., the second-biggest U.S. video-game publisher, lost a court bid to dismiss the $400-million contract-interference claims by its larger rival Activision Blizzard Inc. California Superior Court Judge Elihu Berle, at a hearing Dec. 21 in Los Angeles, denied Electronic Arts’ request to throw out the claims, saying Activision had provided sufficient evidence that a jury should decide whether Electronic Arts broke the law by talking to two creators of Activision’s “Call of Duty” franchise while they were still under contract. Berle rejected Electronic Arts’ argument that it was perfectly lawful for the two top executives of Activision’s Infinity Ward studio, Jason West and Vince Zampella, to explore future employment opportunities. It was “a whole different scenario” if Electronic Arts approached the two executives while there was still more than two years left on their contract, the judge said. Activision, based in Santa Monica, California, last year added Electronic Arts as a cross-defendant to a lawsuit that was initially brought by West and Zampella after they were fired. They had sued for $36 million, saying Activision fired them to avoid paying the royalties they were owed for “Call of Duty: Modern Warfare 2,” the top-selling game the previous year. Robert Klieger, a lawyer for Redwood City, California-based Electronic Arts, declined to comment after the hearing. “We’re pleased with the ruling and look forward to proving our case at trial,” Steven Marenberg, a lawyer for Activision, said after the hearing. Activision’s lawyers said in court filings that Electronic Arts wanted to lure away the “Call of Duty” developers because the game had displaced “Medal of Honor” by Electronic Arts as the dominant combat-game franchise, helping Activision to overtake its rival as the largest video-game publisher. “EA dangled before West and Zampella a lucrative deal that incentivized them to terminate their Activision contracts prematurely, either by quitting or by behaving so badly that Activision had no choice but to fire them, which, of course, is exactly what happened,” Activision said in its opposition to Electronic Arts’ request to throw out its claims. After they were fired, West and Zampella set up an independent studio, Respawn Entertainment. Electronic Arts said in court papers that it has no involvement with Respawn beyond an agreement to publish and distribute the studio’s games. In addition, about 40 current and former employees of Infinity Ward sued last year, alleging they weren’t paid bonuses and royalties for their work on “Modern Warfare 2.” Their case has been consolidated with the case by West and Zampella against Activision. The case is West v. Activision, SC107041, California Superior Court (Los Angeles County). For more copyright news, click here. Trade Secrets/Industrial Espionage Ex-Dow Scientist Who Stole Secrets Gets 7 Years, 3 Months Prison An ex-Dow AgroSciences LLC researcher who stole trade secrets from his former employer to benefit a Chinese university was sentenced to seven years and three months in prison, prosecutors said. Kexue Huang, 46, was sentenced Dec. 21 by U.S. District Judge William T. Lawrence in Indianapolis, according to an e- mailed statement from U.S. Attorney Joseph Hogsett’s office. “The United States Attorney’s Office takes seriously its obligation to protect Hoosier businesses from economic espionage,” Hogsett said in the statement. Hoosier is a nickname for people from Indiana. Huang, a Chinese national, pleaded guilty in October to economic espionage. He also admitted to stealing trade secrets from the Minneapolis-based grain distributor Cargill Inc., the U.S. Justice Department said in October. Financial losses from his conduct exceed $7 million, the U.S. said. It’s the first such prosecution in Indiana under a provision of the Economic Espionage Act that bans trade-secret theft to benefit a component of a foreign government, the government said. Eight such cases have been brought since the law was enacted in 1996, the U.S. said. James Edgar, Huang’s attorney, didn’t immediately respond to a voice-mail message seeking comment on the sentencing. Huang has been in federal custody since he was indicted and will begin serving his sentence immediately, said Tim Horty, a spokesman for the U.S. Attorney’s office in Indianapolis. The government will seek to deport him after his sentence, Horty said in a phone interview. Huang worked for the Indianapolis-based unit of Midland, Michigan-based Dow Chemical Co., where he researched the development of organically derived pesticides, from 2003 to 2008. While at Dow, he shared confidential information with at least two people, one of whom conducted research first at the Hunan Normal University in China and later in Dresden, Germany, according to a plea agreement, which didn’t name the people. In 2008 Huang went to work for Cargill as a biotechnologist. He admitted that while at Cargill he stole one of the company’s trade secrets -- a key component in the making of a new food product -- which he gave to a student at Hunan Normal University, the U.S. said in a statement yesterday. The cases are U.S. v. Huang, 10-cr-102 and 11-cr-163, U.S. District Court, Southern District of Indiana (Indianapolis). IP Moves Perkins Coie Hires Transactional Specialist for Licensing Group Perkins Coie LLP hired Jacob S. Farber for its licensing and technology practice, the Seattle based firm said in a statement. Farber joins from Washington’s Dickstein Shapiro LLP. He has represented clients in the telecommunications, cable, wireless, Internet service provider and broadcast industries. His transactional work includes licensing, outsourcing and mergers and acquisitions. Farber has an undergraduate degree from the University of Michigan and a law degree from George Washington University.

The next broadband battle: AT&T/Dish and Verizon/Cable

The business model for standalone wholesale wireless network operators, such as LightSquared or what Clearwire hoped to be, is broken. But in the coming year, a new and ultimately more successful model is poised to emerge, one that will transform the entire communications landscape as we know it, and pit Verizon and cable TV on one side against AT&T and satellite TV on the other. Back in September, I wrote an article for GigaOM pointing out that it was “increasingly difficult to see a sustainable place in the market for dedicated wholesale players like Clearwire and LightSquared.” Since then, Clearwire has threatened to default on its interest payments in order to secure further commitments from Sprint, and LightSquared is reportedly close to running out of cash. These guys don’t look like winners. The new model However, it appears that a new and much more sustainable model of wholesale access is now poised to emerge, solving the problem that LightSquared claimed to address — namely that rolling out multiple high capacity LTE networks on a national scale is simply unaffordable. Verizon’s purchase of SpectrumCo was the first indicator of this new model, with the cable companies being granted wholesale access to Verizon’s LTE network in four years time so they can offer their own wireless services. Now, after the collapse of the proposed AT&T/T-Mobile merger, all eyes are focused on AT&T’s potential purchase of DISH Network, which could enable the buildout of an LTE Advanced network across 52MHz of spectrum. Such a deal would also have to address the way forward for T-Mobile, which admittedly does not have a clear route to LTE. Thus it seems very likely that T-Mobile would be granted wholesale access to this new 4G network to complement its 3G roaming agreement with AT&T. Of course, while worries about monopolies will be ever-present, we can expect both Verizon and AT&T to commit to a very extensive and rapid LTE network buildout, bringing 4G wireless to 97 percent or 98 percet of the population in line with the objective set out by President Obama in his State of the Union address last February. The role of government regulations in this new era In this new environment, the FCC and DoJ will have to emphasize retail competition instead of the facilities-based competition that has been the focus of FCC policy ever since the 1996 Telecommunications Act. The only way to do that will be through making the initial wholesale commitments ventured by Verizon and (I assume) AT&T into a much broader framework for supplying wholesale LTE network access to other wireless providers. It’s therefore unsurprising that the DoJ is reportedly now mounting a probe into the Verizon-SpectrumCo acquisition. However, the FCC needs both the AT&T/DISH and Verizon/SpectrumCo deals to proceed in parallel, in order to impose a uniform set of rules on both companies. As a result, the FCC is likely to approve DISH’s waiver requests to permit terrestrial-only use of its recently acquired 40MHz of satellite spectrum in the very near future, perhaps even as soon as this Friday. The ripple effects of such a transformational change to the telecom landscape are almost too numerous to mention. They range from what happens to DirecTV and Cablevision if they are left on their own once the other cable companies and DISH choose sides, to whether Sprint’s Network Vision plan can compete with second rate spectrum and limited scale against retail-focused providers with access to AT&T or Verizon’s far superior 4G network infrastructure. However, even more important in the near term will be the reaction of Congress (which thinks it decides how the telecommunications landscape should be structured) in a polarized election year environment. Commitments on the part of AT&T and Verizon to large scale wireless deployment would in themselves be a clear win for President Obama, but imposing wholesale access commitments on the telecom industry will undoubtedly be viewed by many as akin to “European-style” socialism. Thus, the actions of the FCC and DoJ with respect to these deals could very well become a hot button issue in the November 2012 election.

Lawmakers Rally Support for Cyber-Security Bill

Lawmakers are rallying support for anti-hacking legislation, as news of Chinese hackers breaching the U.S. Chamber of Commerce raises privacy concerns. House Intelligence Committee Chairman Mike Rodgers (R., Mich.) said the intrusion at the business-lobbying group highlights the need for the very legislation that passed out of committee earlier this month. The House Intelligence Committee approved the Cyber-Intelligence Sharing and Protection Act of 2011, by a 17-to-1 vote, which exempts companies from liability for voluntarily disclosing hacking incidents and gives corporations access to data from the National Security Administration to help protect their networks. The Act continues this summer’s NSA pilot program. Telecommunications companies support the bill, hailing its legal protections as strong incentives for the private sector to cooperate with the government, but the White House and organizations like the ACLU warn the measure will let the government peruse citizens’ private information and insulate companies against consumer advocate lawsuits. As the debate over cyber-security and privacy rages on, details of attacks continue. Investigators determined intruders, likely located in China, had access to the Chamber’s three million corporate members, accessed 300 Internet addresses and stole emails of four employees who worked on Asia policy issues, increasing pressure on China to curb its alleged espionage, particularly industrial espionage. Today, after news of the hack leaked, Chinese Foreign Ministry spokesman Liu Weimin denied his country’s involvement. “There’s nothing to be said about the baseless whipping up of so-called hacking and it won’t come to anything,” he told the press. “Chinese law bans hacking.” The Chamber breach follows other high-profile hacks on government contractor Lockheed Martin, financial giant Citigroup, and tech giant Google, all coming at a time when governmental agencies are trying to balance data security with civil liberties. Balancing these two values is proving exceedingly difficult, as the controversy over the Cyber-Intelligence Act and news of the Chamber of Commerce breach suggest. But as attacks increase in both number and severity, pressure mounts to respond definitively and cohesively to ward off the immediate threat and prevent future ones.

Sprint fires off lawsuit at cable giants

In separate lawsuits filed yesterday, Sprint alleged that Comcast, Time Warner Cable, Cox Communications, and the Washington Post's Cable One all infringed on 12 patents related to digital phone technology it secured in the '90s. The lawsuits represent just the latest development in an increasingly rocky relationship. Sprint and the cable providers were once strong allies, partnering up to buy spectrum and resell wireless service, and taking part in an investment in 4G wholesaler Clearwire. The cable companies were also significant customers of Sprint's wireline business. But in recent years, the cable companies have moved to distance themselves from Sprint. They are no longer Sprint customers, representing a blow to the carrier's landline revenue. The cable providers recently struck a deal with Verizon Wireless to sell their spectrum to the Sprint rival for $3.6 billion. As part of the deal, the cable companies will resell Verizon's 4G LTE service, and end their wholesale agreements with Clearwire. The cable companies have long provided Internet phone service as part of their "triple play" bundle of phone, video and Internet services. Those services compete more against the larger telcos Verizon and AT&T than the more wireless-centric Sprint. Representatives from Time Warner Cable, Comcast, Cox, and the Washington Post declined to comment on the lawsuit. The patents allow companies to use inexpensive and efficient data packets to carry voice traffic, which reduces the cost of phone service and provides the backbone for voice-over Internet protocol technology. The various patents go as far back as 1994. "Sprint invested significant amounts of time and resources in the technology covered by these voice over packet patents," according to a company representative. The patents are the same as the ones used by Sprint to extract a $80 million settlement from Vonage, which also delivers Internet phone service.

BT sues Google over Android patent infringements

It's becoming more of a case of who isn't suing Google than who is, as phone and broadband provider BT has filed a lawsuit that claims the Android operating system infringes on a number of its patents. The six patents that have allegedly been infringed upon don't just include Android, but also Google's Music and Maps services. According to T3, BT is seeking financial reimbursement and for injunctions to be put in place. Although Google has been on the receiving end of lawsuits before with regard to Android, BT represents one of its larger legal adversaries, which will make the ensuing war of words more interesting to behold.

AT&T ends bid to buy T-Mobile

So much for thinking big. AT&T Inc. is bowing out of its $39 billion bid to buy smaller wireless provider T-Mobile USA after the U.S. government tried to block the deal over concerns it would raise prices, reduce innovation and give customers fewer choices. Monday's announcement came as little surprise after the Justice Department sued to block the merger on Aug. 31. The deal looked further in jeopardy when the Federal Communications Commission's chairman also came out against it. The companies withdrew their FCC application last month. Bernstein analyst Craig Moffett said the announcement was "a bit of an anticlimax." "This is like receiving the divorce papers for a couple that's been separated for years," he said. If so, it's a divorce that's left scars. AT&T said this afternoon that in walking away from a possible combination with T-Mobile, "customers will be harmed and needed investment will be stifled." In punting on the deal, AT&T chief executive officer CEO Randall Stephenson said that the company appeared to suggest that the government had gotten in the way of private enterprise. To meet the needs of our customers, we will continue to invest. However, adding capacity to meet these needs will require policymakers to do two things. First, in the near term, they should allow the free markets to work so that additional spectrum is available to meet the immediate needs of the U.S. wireless industry, including expeditiously approving our acquisition of unused Qualcomm spectrum currently pending before the FCC. Second, policymakers should enact legislation to meet our nation's longer-term spectrum needs. The mobile Internet is a dynamic industry that can be a critical driver in restoring American economic growth and job creation, but only if companies are allowed to react quickly to customer needs and market forces." As part of the break-up with Deutsche Telekom, AT&T said it would take a $4 billion charge. The companies had agreed to this break-up fee when they announced the deal in March. AT&T's purchase of T-Mobile from Deutsche Telekom of Germany would have made it the largest cellphone company in the U.S. AT&T is currently the country's second-largest wireless carrier, while T-Mobile is the fourth-largest. An AT&T/T-Mobile combo: Good for consumers? Do you think an AT&T-T-Mobile combination would have led to improved service and lower prices for consumers? YesNoUndecidedVOTE NOWView ResultsPresented By: To be sure, this saga has seemingly lasted forever. Here are the key dates in the chronology: March 20, 2011: AT&T says it is offering $39 billion in cash and stock to buy T-Mobile USA from German telecom company Deutsche Telekom AG. Such a combination would make it the largest cellphone company in the U.S. AT&T is currently the country's second-largest wireless carrier, while T-Mobile is the fourth-largest. Hoping to appease regulators, AT&T promised to spend an additional $8 billion to grow its ultrafast wireless broadband network in rural areas. The company now plans to cover 95 percent of the country with its so-called Long Term Evolution, or LTE, network, rather than 80 percent as was initially planned. March 28: Sprint Nextel Corp., the nation's third-largest wireless carrier, urges the government to stop the proposed deal. Sprint Nextel argues that it would create a duopoly market with AT&T and Verizon Wireless - currently the largest cellphone company - taking the lion's share of customers. April 7: In response to industry consolidation, the Federal Communications Commission approves rules that will require large wireless carriers to open their data networks to smaller regional carriers in areas where they don't have their own systems in place. The big carriers will have to offer reasonably priced network access, and the FCC will resolve any disputes. July 20: The chairman of a Senate subcommittee on antitrust and consumer rights asks federal regulators to block the proposed deal. Sen. Herb Kohl, D.-Wis., says it would result in increased wireless service prices and fewer choices for consumers. He says there would be only three national cellphone companies left, and two of them - AT&T and Verizon - would control almost 80 percent of the market. Aug. 31: AT&T promises to bring 5,000 wireless call center jobs back to the country if regulators allow the deal to go through. The company says that doing so won't mean job cuts for call center employees that are already located in the U.S. Later in the day, the Justice Department files a lawsuit to halt the deal, arguing that it would raise prices for consumers and reduce their wireless choices. AT&T says it will fight the lawsuit and asks for an expedited court hearing. Sept. 16: Justice says seven state attorneys general - from New York, Washington, California, Illinois, Massachusetts, Ohio and Pennsylvania - have joined in its lawsuit. Sept. 21: A judge sets Feb. 13 as the trial date. Nov. 22: Julius Genachowski, the chairman of the Federal Communications Commission, comes out against the merger. He recommends sending the case to an administrative law judge for review and a hearing, which is what the FCC does when it opposes a merger. Nov. 23: AT&T and T-Mobile withdraw their FCC application to focus on the Justice Department's lawsuit. The withdrawal was made "without prejudice," meaning the companies could resubmit it later. Nov. 25: AT&T says it plans to take a pretax accounting charge of $4 billion in the current quarter to reflect the break-up fees that would be due to Deutsche Telekom if regulators block the deal. Dec. 9: The Justice Department says it wants to withdraw or postpone its antitrust case. A government official says there's no real deal to review until the companies file again with the FCC. Dec. 12: AT&T and the Justice Department agree to put off their upcoming antitrust trial while the wireless carriers determine the fate of the deal. A federal judge approves their request to cancel a February trial. Dec. 13: AT&T and two of its rivals agree to postpone their lawsuits. Sprint Nextel Corp., the nation's third-largest cell phone company, and a smaller phone company, C Spire Wireless, had sued to stop the T-Mobile deal. Monday: AT&T says it is ending its bid after "a thorough review of options."

Class Action Filed in Google Books Case

The long delayed lawsuit over the Google Book project took a significant step toward court action and potentially farther away from a settlement with the filing of a motion for Class Certification by the Authors Guild and several individual authors. With the filing, the authors are asking the court to move the case forward as a class action lawsuit, with the Guild and authors representing a class of thousands or more individual authors. This could increase the possibility of significant damages against Google if they are found to have infringed on the authors’ copyrights. Google is expected to oppose the motion to certify the class, and is also expected to ask the court to dismiss the case outright. The lawsuit began more than 6 years ago when authors and publishers objected to what was then called the “Google Library Project.” In an effort to digitize “the world’s collective knowledge,” Google entered into agreements with a number of libraries to scan out-of-print books from their collections. Many of these books were and are protected by copyright. Google provided a digital copy of the work to the library but also stored digital copies of the works on their own servers. When a Google search of the internet was executed, the search also encompassed these books—now known as Google Books—and provided the searcher with a “snippet” of the book, a “few sentences showing (the) search term in context.” As Google had neither sought nor obtained permission from the copyright owners for this copying and use, the authors and publishers filed copyright infringement lawsuits, later merged into a single action. Google responded by indicating that its use of “snippets” was a fair use, permitted by Section 107 of the U.S. Copyright Act. After several years of initial discovery, a settlement was announced that would have allowed Google to develop and market a subscription database containing the digitized works in return for royalty payments to the copyright owners. The settlement was hailed as a means of making available vast resources previously consigned to “dusty library shelves.” Notwithstanding the praise, however, objections arose that the settlement violated fundamental principles of copyright law by taking rights without prior permission—allowing authors to “opt-out,” rather than “opt-in,” and that it gave Google a monopoly over the scanned works. In March 2011, a federal court judge rejected the proposed settlement, saying that it was not for the courts to stretch copyright law so far as to cover the settlement—that was up to Congress. The court also objected to Google’s monopoly over the works and the use of full texts of the works rather than “snippets,” and raised concerns about international copyright and privacy issues. In the wake of the settlement’s rejection, the parties continued to discuss a revised settlement, but in September 2011 the court began to move the case forward toward a trial. The Authors Guild’s motion to pursue a class action suit is the first of what are expected to be several legal salvos by all of the parties as the case moves forward. The lawsuit was initially filed by three individual authors, plus the Authors Guild as an association representing the interests of its 8,000 members. As an association, the Guild could represent its membership in seeking an injunction against the Google Books project, as well as a declaration that Google’s actions constituted copyright infringement. However, as the Guild does not specifically own the copyrights in the works, those are owned by individual authors (or publishers—which will be addressed shortly), the Guild could not obtain damages on behalf of the authors. In seeking a class action, the Guild and the individual authors would represent all authors who “hold a United States copyright interest in one or more Books reproduced by Google...who are either (a) natural persons who are authors of such Books or (b) natural persons, family trusts, or sole proprietorships who are heirs...of such authors.” By representing all of the authors as a class, the lawsuit is not limited to the members of the Guild and could obtain infringement damages all of the authors in the class. With damages possibly topping $150,000 for each infringement, the damage potential becomes enormous. In order to be certified as a class, the authors must show that the legal and factual issues are common throughout the class; that the claims and defenses of both the named plaintiffs and the defendant (Google) are typical of the class; and that the representative authors can fairly and adequately protect the members of the class. They must also show that the legal issues and facts that are common to the class members “predominate” over any individual member’s particular legal issues or facts. Google is, of course, expected to contest the motion to convert the case to a class action. Google has also indicated that they will ask the court to dismiss the case outright. What some commentators have found interesting in this latest burst of activity is the absence of the publishers who joined into the original lawsuit. At a pre-trial conference in September 2011, the publishers indicated that they were “close” to a separate settlement of their claims. It could be that the publishers, as owners or license-holders of large groups of copyrights, as well as being corporate entities in their own right, may be in a better position to find common ground with Google on a scheme to make their content available. Prior to, and over the course of the litigation, a number of publishers have reached licensing agreements that could serve as a settlement model. Adding to the complexity is a separate lawsuit filed in September 2011 by the Authors Guild against the HathiTrust and several libraries who participated in the scanning and have begun to post some of the scanned works on the HathiTrust and individual library websites. While that case is in its early stages, at least one commentator has suggested that the suit may be intended, at least in part, to put pressure on Google. The class action and dismissal motions will likely be heard early in 2012. Stay tuned.

Judge postpones Sprint, C Spire suits against AT&T deal

Lawsuits from Sprint Nextel Corp. and regional carrier C Spire Wireless against the AT&T Inc. merger with T-Mobile USA were postponed by a federal judge Tuesday, one day after she delayed a Justice Department lawsuit against the $39 billion deal. U.S. District Court Judge Ellen Huvelle put on hold any court proceedings until Jan. 18, while AT&T weighs the future of the deal, which has been opposed by the Justice Department, Federal Communications Commission and several wireless companies. AT&T said Monday that it is considering "whether and how" to proceed with the proposed merger, which needs both FCC and DoJ approval to move forward. AT&T and T-Mobile representatives were unavailable for immediate comment Tuesday. Both Sprint and C Spire sued to block the deal, citing the potential for it to raise consumers' prices and damage competition. AT&T has said a takeover of T-Mobile, a unit of Deutsche Telekom AG is necessary to bring wireless broadband to more Americans. AT&T and T-Mobile also asked the California Public Utilities Commission to postpone its investigation into the merger until after the Jan. 18 hearing in federal court. The CPUC has held hearings on the deal and could rule it anticompetitive in the state or request further divestitures. "The best course is to suspend further actions in this proceeding as well, pending future developments," AT&T and T-Mobile said in their request in California. AT&T recently added 16 cents to $29.17.

OpenBand files suit against Loudoun County Board of Supervisors

In the latest development in the lengthy saga involving Loudoun County and OpenBand, the cable and broadband provider filed a complaint against the Board of Supervisors on Dec. 2 — a retort to the board’s Nov. 2 vote to deny the renewal of a franchise agreement with the Dulles-based firm. The lawsuit, filed in Loudoun Circuit Court, appeals the board’s decision on the grounds that the denial was “indefensible” and illegal, and it cites OpenBand’s compliance with the existing agreement and industry standards, high approval ratings, a successful audit via an independent consultant and the company’s flexibility during the contract negotiation process. “The Board’s decision to deny OBM’s franchise application is not reasonable . . . and thus is violative of the law of the Commonwealth of Virginia,” the complaint states. The board’s long-anticipated vote followed years of complaints about the company’s service from residents of several Ashburn and Lansdowne communities served by OpenBand. The complaints were amplified this year, as county leaders considered renewal of OpenBand’s contract, a prospect that was met with tense negotiations, a barrage of negative testimony from OpenBand customers and two federal lawsuits filed against the company by homeowners associations in Ashburn. Those lawsuits alleged that exclusive property easements established in contracts between OpenBand and the communities’ developers had resulted in a monopoly that effectively made it impossible for competing cable companies to provide service to the neighborhoods. Ben Young, spokesman for OpenBand, said the company is not seeking material damages and filed the complaint to avoid forfeiting its right to appeal the board’s decision. “It was something we did reluctantly,” Young said. “We still hope that we can reach a reasonable agreement with the county. Our hope is that the lawsuit never has to come to fruition.” OpenBand plans to re-submit its renewal application to the county, Young said. He declined to say how soon that might happen. Residents of communities served by OpenBand expressed concern about the possibility of a new application coming before the new Board of Supervisors for approval, noting that several newly elected supervisors accepted sizable campaign donations from OpenBand’s parent company, M.C. Dean. Returning Supervisor Eugene A. Delgaudio (R-Sterling), who alone opposed the denial of OpenBand’s franchise renewal, has maintained that donations he received from M.C. Dean, which totaled more than $7,000, within days of the Nov. 2 board meeting had no impact on his vote. Before the election, Young said that donations from M.C. Dean were used by critics as “political fodder” but that the contributions made up only about 3 percent of the total donations in the Loudoun races. Erika Hodell-Cotti, president of the Southern Walk Homeowners Association, which filed one of the two federal lawsuits against OpenBand in August, said OpenBand’s lawsuit against the board was a transparent attempt to “strong-arm the county” into reversing the denial. Given the amount of cash and in-kind donations given to five members of the incoming county board, “it does raise many questions,” she said. “Unfortunately, OpenBand’s thuggish tactics continue to make an already volatile situation worse,” Hodell-Cotti said. “Our HOA has stated that our homeowners simply want reliable telecom services at a reasonable rate, something that OpenBand is incapable of providing.” Loudoun officials said that the county does not comment on pending litigation.

Judge Postpones Sprint, C Spire Suits Against AT&T Deal

Lawsuits from Sprint Nextel Corp. (S) and regional carrier C Spire Wireless against the AT&T Inc. (T) merger with T-Mobile USA were postponed by a federal judge Tuesday, one day after she delayed a Justice Department lawsuit against the $39 billion deal. U.S. District Court Judge Ellen Huvelle put on hold any court proceedings until Jan. 18, while AT&T weighs the future of the deal, which has been opposed by the Justice Department, Federal Communications Commission and several wireless companies. AT&T said Monday that it is considering "whether and how" to proceed with the proposed merger, which needs both FCC and DoJ approval to move forward. AT&T and T-Mobile representatives were unavailable for immediate comment Tuesday. Both Sprint and C Spire sued to block the deal, citing the potential for it to raise consumers' prices and damage competition. AT&T has said a takeover of T-Mobile, a unit of Deutsche Telekom AG (DTEGY, DTE.XE) is necessary to bring wireless broadband to more Americans. AT&T and T-Mobile also asked the California Public Utilities Commission to postpone its investigation into the merger until after the Jan. 18 hearing in federal court. The CPUC has held hearings on the deal and could rule it anticompetitive in the state or request further divestitures. "The best course is to suspend further actions in this proceeding as well, pending future developments," AT&T and T-Mobile said in their request in California. AT&T recently added 16 cents to $29.17.

Justice Moves to Pull AT&T Suit Out of Cour

The Justice Department said on Friday that it would suspend its lawsuit against the proposed merger of AT&T and T-Mobile USA, and the federal judge hearing the case said she’d be happy to entertain that motion. AT&T's skirmishes with the Federal Communications Commission have endangered the antitrust suit against the deal, both DOJ and U.S. District Judge Ellen Huvelle agreed. She lectured AT&T's attorneys, calling the company's actions "presumptuous". "The landscape has changed," Huvelle said at a status conference in court on Friday. “We don’t have any confidence that we are spending all this time and effort and the taxpayers' money and that we’re not being spun." Justice Department lawyer Joseph Wayland told the court that the department wants to delay the case until AT&T again seeks approval at the FCC. Wayland said the government will file a motion on Tuesday to stay the case or a motion to withdraw it without prejudice until AT&T refiles at the FCC. "It's not a real transaction until they file at the FCC," Wayland said. AT&T will respond on Wednesday and they will meet in court again on Thursday. AT&T had withdrawn its merger application from the FCC after Chairman Julius Genachowski moved to block it. The company hoped to win against DOJ in court and then refile at the FCC. But Huvelle said this strategy gave the impression that AT&T was "using" the court. AT&T needs the approval process to move quickly because T-Mobile can back out under certain scenarios. The proceeding is expedited in court, set for a Feb. 13 trial date, but now Huvelle has to decide if that will happen. Refiling at the FCC could be uncomfortable for AT&T. The company tangled with the agency over the last two weeks, threatening to sue and saying its rejection of the merger was unfair. AT&T general counsel Wayne Watts said in a statement that AT&T is "eager to present our case in court." The $39 billion merger of AT&T and T-Mobile would reduce the number of national wireless companies from four to three. AT&T says it needs the merger to expand capacity on its mobile broadband network. The FCC moved to block the deal, saying it would reduce competition and won't serve the public interest. FCC officials have also said jobs would be lost in a merger. The DOJ agrees that the deal would be anticompetitive, and says it could lead to higher prices for consumers.

Microsoft's Xbox Video Upgrade Arrives Alongside Walled Gardens and Eroded Legal Rights

Microsoft this week released their much-ballyhooed Xbox 360 dashboard update, which includes a significant emphasis on "new" video content. In reality the update is largely aesthetic in nature, with most of the video upgrades not offering new content for those shelling out $60 a year for an Xbox Live Gold subscription. Netflix, Hulu Plus and other existing services got a redesign, but new additions like Epix simply redirect you to paywalled VOD options. Promised integration of FiOS and Comcast content (available only if you subscribe to both broadband and TV services from those companies) have also yet to materialize. One thing that did show up was new terms of service language that prohibits users of Xbox Live from participating in class action lawsuits against the company. You'll recall that nearly every company under the sun has been including this language in their terms of service after the Supreme Court recently told AT&T that eroding consumer legal rights in fine print was perfectly acceptable. Microsoft is circulating a press statement saying you cannot opt out if you want to continue using the service: Users must agree to the new clause to the Terms of Use in order to continue using Xbox LIVE. Changes to the Terms of Use are designed to ensure that our customers have an easy way to file a dispute without requiring formal legal action. They may now bring a dispute to our attention by filling out a simple Notice of Dispute form found at www.xbox.com/notice and mailing in documentation in support of their claim. As we've noted previously, such language has nothing to do with making things "easier" on customers, and everything to do with forcing users into binding arbitration -- where arbitration companies hired by Microsoft (or AT&T, or Sony, or Cablevision) rule in favor of their employers a significant majority of the time. While there's certainly a debate to be had over the disproportionate benefits lawyers enjoy in class actions, eroding a customer's legal options solely benefits the corporation. That aside, it remains interesting that the highlight Microsoft's hyped broadband-video improvements so far involves obnoxious fine print that erodes your legal options. Customers complain that many of the GUI options (particularly the Netflix redesign) fix things that aren't broken, while the new video options -- aren't really particularly new. The cable and broadcast industry is terrified that Internet video will erode their legacy cash cow, and continues to ensure that every new product released is as uninteresting as possible -- unless you subscribe to traditional television.

Countryside Alliance questions Government broadband claims

Government plans to ensure the UK has Europe's best super-fast broadband network by 2015 have been questioned by rural campaigners. Research using Freedom of Information requests carried out by the Countryside Alliance shows none of the four local authorities chosen for pilot schemes have received funding from the Treasury, selected a provider or started work. Last October government agency Broadband Delivery UK (BDUK) chose the Highlands and Islands of Scotland, Herefordshire, Cumbria and North Yorkshire as test areas for the commercial rollout of a £530m exchequer cash pot. The areas are receiving between £5m-10m and the project aims to deliver at least 90% superfast broadband coverage in each county area, with final hard to reach 10% areas receiving a minimum standard broadband of 2Mbps, with capability to upgrade to superfast in the future. But Alice Barnard, chief executive of the Countryside Alliance said rural people have seen no improvement in areas of no or unreliable broadband coverage in the year since the pilots were established. In response, the Department for Culture for Media and Sport (DCMS) spokesman said: 'The money for these projects has been allocated and will be provided to the local authorities when they begin spending on the projects. This is standard practice in provision of capital grants.'

OpenBand Files Lawsuit Over Franchise Denial

A lawsuit by OpenBand Multimedia against the Board of Supervisors over its denied cable franchise agreement was filed Dec. 2 only to preserve the rights of the company to sue, according to representatives of its Dulles-based parent company MC Dean. "It was very reluctantly that we decided to file the lawsuit," Ben Young, director of government affairs for MC Dean, said Thursday. "We have not yet served the county. And we don't intend to serve the county." Under Virginia law a company or person has 30 days from an action's date to sue a municipality. To "err on the side of caution" OpenBand chose to file its lawsuit Friday, Dec. 2, exactly 30 days after the Board of Supervisors voted to deny its franchise agreement. The company could serve the county, and move forward with the lawsuit at anytime in the year following the filing. But OpenBand says it hopes the case never ends up in court, and instead said it plans to resubmit its franchise agreement in January-before a new Board of Supervisors. Young said the company believes that politics and the November election "frustrated our efforts this year," as many of the sitting supervisors who voted on the franchise agreement were seeking reelection at the time of the vote. While county supervisors were reviewing the application, MC Dean, and owner Bill Dean, made significant campaign contributions to Republican board candidates, all of whom were successful in winning seats in November. Young said the lawsuit is really just a "placeholder" in case litigation needs to move forward, but he said that OpenBand hopes to avoid ending up in court. "We are trying to find the best path forward," he said. The suit is the latest step the long-running drama surrounding the OpenBand franchise and the television, telephone and Internet services it provides on an exclusive basis to several Loudoun neighborhoods. For two years the county reviewed the OpenBand franchise, a process that was complicated by a discovery that the existing franchise under which the company still operates had lapsed in June 2009 without the county's knowledge, two lawsuits in federal courts filed by Southern Walk and Lansdowne on the Potomac, and a Board of Supervisors' request for an anti-trust determination and possible investigation by State Attorney General Ken Cuccinelli. Under the previous franchise agreement, OpenBand has the right to provide service for up to three years after it ends, a time period that is up in June. OpenBand serves around 4,200 homes in the county in four different communities: Southern Walk at Broadlands, Lansdowne on the Potomac, Lansdowne Village Green and Leisure World. With the exception of Leisure World, where each building has a separate competitive contract, the communities receive bundled service from OpenBand through 25-year contracts, with the option to extend up to 10 years four times. Critics say those contracts, along with the developers' granting of exclusive easements in their communities to OpenBand, prevent residents from getting access to other cable providers like Verizon and Comcast. Critics also say OpenBand's technology and a customer service lags behind that offered by would-be competitors. The franchise review process started out as a renewal, but when it was discovered the franchise agreement had lapsed, the negotiations started from scratch. The result was a new contract that included a number of new requirements aimed at addressing some of the residents' concerns, but which the company representatives said would make it party to the most stringent agreement in the county. In the weeks before the board's Nov. 2 vote, HOA representatives of the three communities urged supervisors to deny the franchise agreement, hoping it would be the first step toward removing their neighbors from agreements they say hold them hostage to OpenBand. OpenBand representatives said this week that they have been working to engage "the management of the company and the stakeholders in the county" to find the best solution. While details of what the franchise agreement brought forward in 2012 would look like are not yet known, it would restart the negotiations between the company and the county and so likely would "wipe the slate clean entirely." Meaning the provisions already agreed to by OpenBand and the county would be open for renegotiation, and Young said OpenBand would be seeking input from the new supervisors as to what they would like to see in the franchise agreement. With seven new supervisors taking to the dais in January it is possible they could be seen as more favorable to an OpenBand franchise-at least that was a concern of many residents served by the company in the final weeks before the election as they reviewed campaign contributions. Bill Dean, owner of MC Dean, contributed $7,500 to Algonkian District Republican Suzanne Volpe, $5,000 to Blue Ridge District Republican Janet Clarke, $5,000 to Ashburn District Republican Ralph Buona, and $2,500 to Dulles District Republican Matt Letourneau. MC Dean has given $3,000 to Letourneau, and $500 each to Buona and Clarke. Incumbent Supervisor Eugene Delgaudio (R-Sterling), received $10,000 from MC Dean. OpenBand said it wants to continue to negotiate with the county in good faith and find the best solution for all parties, without the need of a lawsuit to settle it. "It is our sincere hope that the lawsuit will ultimately be unnecessary," Young said.

AT&T May Face Judge’s Questions on Plans for T-Mobile Purchase

AT&T Inc. may be questioned at a federal court hearing in Washington on whether it plans to move ahead with its proposed $39 billion purchase of T-Mobile USA Inc. in the face of growing resistance from U.S. regulators. AT&T will appear in U.S. District Court today for the first time since the company withdrew its application to the Federal Communications Commission seeking approval for the deal. The company said it abandoned the FCC bid after the agency signaled it might try to block it to focus on winning clearance from the Justice Department or revising its proposal. Today’s hearing in the Justice Department’s lawsuit to stop the T-Mobile takeover was called by U.S. District Judge Ellen Segal Huvelle as she seeks to ensure both sides will be ready for trial on Feb. 13. Huvelle will also assess the status of lawsuits by Sprint Nextel Corp. and Cellular South Inc., which are separately trying to block the transaction. “The Justice Department may try to persuade the judge to press AT&T to take a position on whether it still plans to move forward,” said Andrew Gavil, an antitrust professor at Howard University School of Law in Washington. “They may say ‘We think this deal is dead and we shouldn’t be litigating a case that, in effect, is moot.’” The retreat from review by the FCC, which would have to approve the merger, has led opponents of the deal to challenge the legitimacy of AT&T continuing to defend itself in court. AT&T Subpoena Earlier this week, LightSquared Inc., a wireless broadband company, asked the court to block AT&T’s subpoena seeking testimony from company officials on its business plans, arguing in court papers that without a pending FCC application, AT&T has no path to complete the merger and the Justice Department lawsuit might be irrelevant. LightSquared was brought into the case as a competitor as AT&T seeks to counter allegations the T- Mobile deal is anticompetitive. LightSquared said comments by Jim Cicconi, AT&T’s senior executive vice president of external and legislative affairs, supported its position. Cicconi said on AT&T’s website on Nov. 29 that a company might withdraw an FCC merger application for two reasons: Either it intends to abandon the transaction or it plans to submit a new application “reflecting changes to the transaction or materially changed circumstances.” Jennifer Giordano, a lawyer for LightSquared, wrote in court filings, “AT&T’s public statements suggest that the transaction as currently structured may be substantially altered or not proceed at all.” ‘Changed Circumstances’ A lawyer for AT&T wrote to Giordano that a court victory would constitute “materially changed circumstances” that would be submitted to the FCC, according to court filings. Huvelle’s special master, Richard Levie, said in his ruling on LightSquared’s request that the Justice Department interpreted Cicconi’s comments to mean “the current litigation may, in fact, not present a live case or controversy.” Still, Levie ordered the deposition go ahead, saying that while the FCC withdrawal “raises the specter of an alteration of the course of the proposed merger” it didn’t change the status of the litigation. “Although FCC approval is necessary for the proposed merger, so, too, is a favorable ruling from the federal court in this case,” Levie said in the Dec. 6 decision. Michael Balmoris, a spokesman for AT&T, declined to comment on the company’s trial strategy. Gina Talamona, a Justice Department spokeswoman, declined to comment on what the agency’s lawyers plan to say at today’s hearing. Case on Hold Under federal law, Huvelle has the authority to put the case on hold until a decision from the FCC is rendered, said Herbert Hovenkamp, a professor and antitrust expert at the University of Iowa College of Law. “Usually the court, which is of general jurisdiction, would defer to the agency that is considered to have more expertise,” Hovenkamp said. “The agency can produce fact findings that could inform the antitrust court down the road.” The Justice Department sued Dallas-based AT&T and Deutsche Telekom AG’s T-Mobile unit on Aug. 31, saying a combination of the two companies would “substantially” reduce competition. Seven states and Puerto Rico joined the effort to block the deal, which would make AT&T the biggest U.S. wireless carrier. Sprint, the third-biggest U.S. wireless carrier, filed its antitrust lawsuit on Sept. 6, saying the proposed merger would weaken its ability to compete with AT&T, the second-biggest, and Verizon Communications Inc., the market leader. Less Competition Cellular South, based in Ridgeland, Mississippi, sued on Sept. 19, claiming the merger threatened to “substantially” cut competition. Huvelle last month dismissed several claims in the suits by Overland Park, Kansas-based Sprint and Cellular South. She limited the cases to Sprint’s allegations regarding access to mobile devices and Cellular South’s complaints regarding roaming fees as well as devices. No trial has been set for the Sprint and Cellular South cases. The parties agreed it should take place after the trial of the government’s case. The government’s case is U.S. v. AT&T Inc., 1:11-cv-01560; Sprint’s case is Sprint Nextel Corp. v. AT&T Inc., 11-cv-01600; and Cellular South’s case is Cellular South Inc. v. AT&T Inc., 1:11-cv-01690, U.S. District Court, District of Columbia (Washington).

FCC Faces Suits over Broadband Fund

The Federal Communications Commission is facing two lawsuits over its mammoth order that creates a multibillion-dollar fund to expand Internet access and results in other substantial reforms. The Pennsylvania Public Utility Commission filed a suit in the Third Circuit Court of Appeals in Philadelphia and a small phone company named Core Communications has sued the FCC in the 4th Circuit in Richmond, Va., The Hill reported. Both lawsuits contend the FCC's order was "arbitrary and capricious" and a "departure from reasoned decision-making," while the PUC further argues that the order violates the 10th Amendment, according to the report. The litigation comes in the wake of one of the most comprehensive rulemaking proceedings in the modern history of the agency. The FCC released a 759-page order last month, putting in motion several major telecommunications reforms including the creation of a $4.5 billion dollar fund – the Connect America Fund – to subsidize high-speed Internet service. The agency has said the $4.5 billion fund to support telecommunications service in high-cost areas is plagued with problems, including the fact that recipients of such funds have no obligation to advance broadband infrastructure. Groups seeking to block the order must file their cases by tomorrow, and a lottery will determine which appeals court hears the cases, The Hill reported.

Top Ten Flaws in FCC's AT&T/T-Mobile Competition Analysis

The unprecedented release of a FCC draft staff analysis opposing the proposed AT&T/T-Mobile transaction could backfire legally, undermining its intent to backstop the DOJ’s pending lawsuit against the merger. The FCC’s staff analysis could backfire because it: is not credible or fair; is replete with arbitrariness, bias and illogic; and suffers from glaring omissions of relevant exculpatory evidence. If the FCC’s staff’s duplicative antitrust competition analysis is any indication of the strength of the DOJ’s Clayton Act case against the transaction, the Government’s case is much weaker than most appreciate. When one reviews the many serious flaws in the FCC’s competition analysis it is clear why AT&T and T-Mobile eagerly await their day in court. Legally, the FCC staff analysis has hurt, not helped, the DOJ’s antitrust case and it makes the FCC’s signalled negative public interest determination much more vulnerable upon appeal. I. Summary of Top Ten Flaws in FCC’s AT&T/T-Mobile Competition Analysis Totally ignored the Internet’s impact on wireless competition. Totally ignored international competitive comparisons that repudiate its conclusion. Assumed away all existing wireless competition that does not support its conclusion. Totally ignored the financial/investment facts of Deutsch Telecom, T-Mobile’s parent. Totally ignored the competitive impact of the FCC-described “looming spectrum crisis.” Overplayed the maverick impact of T-Mobile by ignoring Sprint’s maverick incentives. Turned a blind eye to the fundamental high-capital intensity of wireless competition. Silent about Open Internet presumption that competition can’t protect consumers. Totally misunderstood where the real market power resides in wireless devices. The proposed Verizon-Cable spectrum sale and cross-marketing arrangement blows up the staff analysis’ central assumption that Verizon and AT&T will not compete fiercely going forward. II. Top Ten Flaws in FCC’s AT&T/T-Mobile Competition Analysis 1. FCC staff totally ignored the Internet’s impact on wireless competition. The most glaring omission of evidence, fact and context is the staff’s total blind eye to the huge competitive substitution effect and downward price pressure of free Internet voice, texting, and video on all wireless providers. Incredibly, if one does an Adobe Acrobat word search of the FCC’s 157-page staff analysis PDF, there is no mention of the following words: “Internet,” “bandwidth,” “wireless broadband,” “WiFi,” “WiMax,” “Android,” “Netflix,” “iChat,” “Facetime,” “Google,” “Apple,” “Facebook,” “Microsoft,” or “Skype.” (In stark contrast for example, the FCC’s July Wireless Competition Report mentioned the “Internet” 186 times, “wireless broadband” 47 times, “Wimax” 67 times, “Android” 65 times, etc.) How can FCC staff ignore the exculpatory blue whale in the room? Many tens of millions of American wireless consumers use free communications apps like Microsoft-Skype, Google-Voice, Apple iChat/Facetime, Facebook messages or Vonage Mobile? How can the FCC, whose top “competition” institutional priorities of the last three years supposedly were the National Broadband Plan and Open Internet regulations, claim their analysis here is credible, fair, fact-based, expert, or thorough without any competitive analysis of the Internet or wireless broadband phenomena that most everyone else recognizes are revolutionizing wireless communications? 2. FCC staff totally ignored international competitive comparisons that repudiate its conclusion. Incredibly again, FCC staff totally ignored exculpatory international comparisons of competitive concentration of national wireless markets among industrialized nations, despite the FCC’s intense competitive interest in such international comparisons when the FCC sought to prove the U.S. was falling behind the world in broadband deployment in order to discredit competition policy and advance its National Broadband Plan. International comparisons from Merrill Lynch, that are well-known to FCC staff, indicate the U.S. currently has the least concentrated wireless market. Moreover, the post-merger, HHI market-concentration scores of AT&T/T-Mobile, still would not make the U.S. wireless market as concentrated as most all other major industrialized markets. Excluding this critically relevant international comparison data is exceptionally prejudicial, misleading and arbitrary, because the international comparison data devastates the central premise of the DOJ/FCC case — that the U.S. wireless market must have four major competitors to be competitive when most all other nations have only three major competitors. If the FCC somehow believes the international comparison data is somehow wrong or irrelevant, a fair process dictates that the FCC must prove why that is so. 3. FCC staff assumed away all existing wireless competition that does not support its conclusion. Incredibly yet again, FCC staff assumed away exculpatory evidence of actual and potential competitors that did not fit the DOJ’s new gerrymandered national market definition. First, the FCC used circular illogic to assert that regional competitors, like Metro PCS, Leap Wireless, and U.S. Cellular are not significant competitors to AT&T or T-Mobile. After the FCC’s latest wireless competition report stated that ~90% of American consumers have a choice of five or more wireless choices in their local market, the FCC now claims wireless is a national market. This means that the regional competitors that the FCC long considered as wireless competitors are no longer competitors for the purposes of this transaction because they do not have national scale and scope necessary to fit into the new gerrymandered market definition. This circular illogic conveniently excludes about ~8% or 20+m American wireless consumers as irrelevant because they did not choose one of the national wireless providers that the Government thinks they should have chosen. Second, FCC staff summarily excluded Clearwire as a competitor or disruptive maverick force, despite mentioning “Clearwire” 142 times and “WiMax” 67 times in the FCC’s fifteenth wireless competition report just five months ago, and despite the fact that Clearwire has built a fifth national wireless broadband network that already covers 82 million Americans. Third, FCC staff summarily excluded a potential sixth facilities based wireless competitor, LightSquared, whose pending 4G LTE wireless broadband network is not considered by the FCC to be potential competition, despite an innovative effort proposing a wholesale only model utilizing a combination of mobile and satellite technologies, and despite the extraordinary exemption and support the FCC staff provided LightSquared to get it’s effort off the ground. Fourth, it is ironic that FCC staff’s summarily excludes all MVNO resellers like Tracfone as relevant competitors that buy wholesale and compete in retail offerings, when the FCC pushes wholesale-resale as key to competition in giving LightSquared special help and in considering reclassification of broadband as a Title II service to promote wholesale resale as a way to increase competition to benefit consumers. It appears FCC staff only view Government-driven wholesale resale as “real” competition and not the sixty odd actual market-driven resellers as ‘real” competition. The FCC’s national market definition appears arbitrary and unfair given how much competition that the FCC previously-recognized and advanced is excluded from the competitive analysis of this transaction. 4. FCC staff totally ignored the financial/investment facts of Deutsch Telecom, T-Mobile’s parent. The FCC staff omitted any discussion of the critical factual context that T-Mobile must exit the U.S market because T-Mobile’s parent, Deutsch Telecom which is partly owned by the German Government, is financially unable and unwilling to fund a fourth 4G wireless broadband competitor in the U.S. when the German Government’s financial resources must be allocated to propping up the sovereign debt of Euro partners in financial crisis: Greece, Italy, Portugal and Spain. If the FCC staff contacted the U.S. Departments of Treasury or State, the German Embassy, the IMF, or the Federal Reserve, they could easily have learned that their expectation that the German Government would and should fund a fourth 4G infrastructure in the U.S. (when Germany has not fully built out one), is not a credible, responsible or accurate competitive policy assumption for this transaction. 5. FCC staff totally ignored the competitive impact of the FCC-described “looming spectrum crisis.” Spectrum is the essential resource and foundation of wireless competition. While the FCC is fully-aware of the seriousness of the “looming spectrum crisis,” and fully-aware that AT&T is justifying its acquisition of T-Mobile in large part to gain scarce spectrum, it is inexplicable that the 157-page FCC staff analysis never mentions or discusses the competitive context and implications of the looming “spectrum crisis,” “spectrum shortage,” or “spectrum scarcity.” Without question a very material competitive legal fact here is that in a spectrum-constrained market, it is necessary, logical, and beneficial for there to be market consolidation and/or spectrum sharing in order to optimize the efficient utilization of this scarce resource. Omitting these material economic facts and critical investment context from this FCC competitive analysis is not fair, objective or accurate. 6. FCC staff overplayed the maverick impact of T-Mobile by ignoring Sprint’s maverick incentives. The FCC asserts without evidence that #3 competitor Sprint is not a disruptive maverick force when Sprint competes aggressively on price, unlimited usage, bundles, and network innovation. FCC staff don’t explain why if neither Sprint and T-Mobile have the scale and scope of Verizon and AT&T, why only T-Mobile and not Sprint would have the competitive incentive to be a market maverick? 7. FCC staff turned a blind eye to the fundamental high-capital intensity of wireless competition. The FCC and DOJ, in attempting to unilaterally move the acceptable antitrust boundary back from three competitors to four-plus, are turning a blind eye to how a market’s competitive intensity can be very different in capital-intensive markets than in non-capital intensive markets. Verizon and AT&T each individually invest more capital annually than any other American corporation and must spend more on advertising to maintain and grow their businesses than most any other corporation in the U.S. This is because of wireless market’s capital intensity, competitive intensity and because of cannibalization from Internet substitution of free apps. Excluding the fundamentally important capital intensity dimension of wireless economics in its competitive analysis is not expert, fair or accurate. 8. FCC staff is silent about their Open Internet presumption that competition can’t protect consumers. The FCC staff analysis makes no mention of the very material FCC bias here that the FCC does not believe that market competition can protect consumers’ economic interests without FCC economic regulation. The premise of the FCC’s Open Internet Order, which just went into force, is that competition and market forces were insufficient to protect consumers from potential discrimination unless the FCC preemptively economically regulated broadband and banned Internet discrimination by broadband providers. This was the FCC’s view before the proposed AT&T/T-Mobile transaction while the U.S. had the most facilities-based wireless competition in the world. To be fair and open, the FCC should caveat its staff analysis with a transparent disclosure that the FCC has ruled implicitly in its Open Internet Order that competition can no longer work to generate lower prices, more choice, and innovation without the intervention and oversight of the FCC. 9. FCC staff totally misunderstood where the real market power resides in wireless devices. The FCC asserts without evidence or understanding of the device market that a combined AT&T/T-Mobile could have monopsony buying power in devices when the market reality is that Apple with its wildly popular, iconic, high-end iPhone/iPad, and Google-Android with its dominant 53% share of the mobile operating system market, have the real market power over wireless devices. Failure to analyze the effect of the whole ecosystem on device competition is not fair or accurate analysis. 10. The proposed Verizon-Cable spectrum sale and cross-marketing arrangement blows up the staff analysis’ central assumption that Verizon and AT&T will not compete fiercely going forward. Fundamental to the FCC’s conclusion that they must avoid a wireless “duopoly” is that the two biggest wireless players, Verizon and AT&T, will not compete fiercely going forward. It appears that Verizon is serving as a maverick competitor in a highly-competitive wireless marketplace. The Verizon-Comcast/Time Warner Cable/Bright House deal greatly accelerates wholesale and retail wireless competition as their cable/broadband/phone bundles will enable cable to offer retail wireless service at a retail price closer to the wholesale rate than most any competitor – benefiting competition and saving consumers money. This new outside-the-box thinking and cross-marketing arrangement will increase wireless competition, put further downward pressure on prices, and sustain fierce competitive rivalry between Verizon and AT&T/T-Mobile. III. Conclusion In sum, FCC staff has deemed this merger to not be in the public interest with one-sided analysis and without due process. Like everyone in America, AT&T and T-Mobile are due their day in court. Despite what the DOJ and FCC have asserted publicly, AT&T and T-Mobile have much precedent, evidence, and merit on their side. Looking ahead, If AT&T prevails in court against the DOJ, much of the FCC’s duplicative antitrust staff analysis becomes legally moot. Then if the FCC still tries to block the merger at the FCC under its public interest standard, and AT&T ultimately appeals that public interest ruling to Federal Court, the FCC’s prospects upon appeal will be much weaker as a result of the unprecedented release of this obviously flawed, fact-challenged, and arbitrary FCC staff analysis.

Carrier IQ, HTC, Samsung hit with class-action lawsuits

The lawsuit was filed by Erin Janek, the owner of an HTC Android phone from Sprint. It charges Carrier IQ and HTC of surreptitiously monitoring and collecting data from Janek's private communications on the phone without Janek's permission or knowledge. The complaint notes that Carrier IQ and HTC's actions raised questions about whether the data collected from Janek's phone was protected under Federal Wiretap law and whether the interception of the data was intentional within the meaning of the law. The other lawsuit was filed on behalf of four smartphone users from California and names HTC, Samsung and Carrier IQ as defendants. The lawsuit leaves the door open for other carriers and device makers to be included in the complaint later. That particular lawsuit was filed in District Court for the Northern District of California and accuses the companies of violating the Federal Wiretap Act as well as California's Unfair Business Practice Act. HTC and Samsung are two of the handset vendors that yesterday admitted to installing Carrier IQ's software on handsets. Both companies have insisted that they did so only at the specific request of their carrier customers. Carrier IQ has been at the center of what has very quickly ballooned into a full blown privacy firestorm over the use of its software by wireless carriers. Earlier this month, Trevor Eckhart, a security researcher from Connecticut published a report disclosing how the company's software could be used for extensive user tracking by wireless service providers. Carrier IQ and several of the carriers that have admitted using the technology, including AT&T and Sprint, insist that the technology is nothing more than a useful diagnostic tool for collecting certain network and device data for service and quality assurance purposes. Eckhart, however, showed how the software can also be used to collect virtually any other metric from a user's mobile device. In an 18-minute YouTube video, he demonstrated how the software can be hard to detect, harder to remove and can be used to capture a lot of data -- including the keystrokes he made on his handset. In his research, Eckhart said that phone carriers could program the software to send user data whenever certain triggers or actions were completed. Carrier IQ has consistently downplayed the research and has insisted Eckhart's claims misrepresent the true capabilities of its software. Even though its own marketing materials appear to undercut its claims , since the controversy broke Carrier IQ has described its software as doing little more than diagnosing operational network and device issues. In a email today, Carrier IQ once again reiterated that its software does not log or understand keystrokes. "It is only looking for numeric sequences that trigger a diagnostic cue within the software. If that cue requires communication with the carrier then the diagnostics are transmitted," the company said. Carrier IQ's software knows what content has been accessed but not the nature of it. For example, the software will know the URL of a website that has been visited but not the content of the site, the company said. The company downplayed a query by Computerworld about the claimed ability of the software to report collected data back to operators in real time. "The software has the ability to report real time but it isn't used that way," The company said the timing of the reporting function was a decision left to the carriers. Typically, Carrier IQ's software is used to report on a pre-determined daily or weekly schedule, the company said.

Ally, Apple, Madoff, AT&T, Altria, JPMorgan in Court News

Ally Financial Inc.'s GMAC Mortgage unit stopped buying home loans in Massachusetts after the state accused the five biggest providers of conducting illegal foreclosures. “Recent developments have led mortgage lending in Massachusetts to no longer be viable,” Detroit-based Ally said in a statement. Ally, owned mostly by the U.S. government after being bailed out during the 2008 financial crisis, is ranked fifth this year among the nation's mortgage lenders. Massachusetts Attorney General Martha Coakley sued Ally and four other mortgage lenders Dec. 1 for allegedly trying to seize homes when they didn't hold the mortgage on the properties. Failure to obtain valid mortgage assignments before foreclosure has affected titles to “hundreds, if not thousands, of properties” in the state, she said. “The company is disappointed that it can no longer participate in offering certain financing options in Massachusetts,” Ally said in its statement. “However, it has an obligation to manage risks and deploy capital in an appropriate manner and in a way that protects the investment of the U.S. taxpayer.” Ally will continue making direct loans in the state, according to Gina Proia, a spokeswoman for Ally. The lender will honor any commitments through Dec. 5 and continue servicing existing customers, the statement said. Mortgage servicers send out and collect bills, and handle foreclosures if borrowers don't pay. Matt Anderson, a spokesman at the U.S. Treasury Department, which owns 74 percent of Ally, declined to comment. Coakley's lawsuit also named Bank of America Corp., JPMorgan Chase & Co., Citigroup Inc. and Wells Fargo & Co. The case is Commonwealth of Massachusetts v. Bank of America NA, 11-4363, Suffolk County Superior Court (Boston). For more, click here. SEC's Data Crunchers Find Clues Leading to Hedge-Fund Cases Four hedge-fund fraud cases filed in the past three weeks by the U.S. Securities and Exchange Commission are the first products of the agency's initiative to build cases on data analysis instead of outside tips, Bloomberg News' Jesse Hamilton reports. With a system the SEC calls an “aberrational performance inquiry,” analysts use data-mining to scrutinize hedge-fund returns and other factors. When they identify outliers, investigators can conduct a further review, the agency said in a statement Dec. 1. As a result the SEC took action against three separate hedge fund firms and six people in the past month for misconduct including improper use of fund assets, fraudulent valuations and misrepresenting fund returns. “Hedge-fund managers depend on valuation and performance for both their compensation and marketing,” Bruce Karpati, co- chief of the SEC's asset-management enforcement unit, said in an interview. “These managers have either manipulated performance or engaged in other falsehoods in order to line their own pockets at the expense of investors.” “The significant thing about these types of analytics is that we can detect these types of frauds without a complaint or tip,” Karpati said. “So now we're able to get to conduct earlier.” For more, click here. Apple Wins Extension on Samsung Tablet Ban in Australia Apple Inc. won a one-week extension of a ban on Samsung Electronics Co.'s sales of its latest tablet computer in Australia, delaying pre-Christmas sales, in a battle that began in April in the U.S. and spread to four continents. High Court Justice John Dyson Heydon extended the ban Dec. 2 on the release of Samsung's Galaxy Tab 10.1 to Dec. 9. On that day, the country's top court will consider Apple's request for permission to appeal a lower court's order issued earlier this week, which lifted a ban on the product that has been in place since mid-October. “A stay for one week will cost Samsung, in effect, one week's trade,” Heydon said, following a 90-minute hearing in Sydney. The extension will hurt Samsung “but not to extend the status quo is likely to be injurious to Apple,” he said. The decision scuttled Samsung's plan to begin importing the Galaxy Tab 10.1 into Australia over the weekend and take advantage of the pre-Christmas shopping season. The company had said if it can't sell the tablet in Australia before Christmas it would scrap its release in the country. “This is a critical period of time,” Katrina Howard, Samsung's lawyer, told Heydon Dec. 2. “Even one day can make a difference.” The battle between the companies began in April, when Apple sued Samsung in the U.S. and accused it of “slavishly” copying the designs of iPhones and iPads. The appeal case is Samsung Electronics Co. v. Apple Inc. NSD1792/2011. Full Court of the Federal Court of Australia (Sydney). For more, click here. Madoff Associate Kohn Has $42 Million Frozen by U.K. Judge A London judge froze 27 million pounds ($42 million) of Sonja Kohn's assets and ordered the former associate of Bernard Madoff to move funds to the U.K. as the administrators of Madoff's European operation seek recoveries for victims of his fraud. Judge Julian Flaux said Kohn should repatriate as much of the 27 million pounds as possible to the U.K. within 56 days, adding it may be at risk as a result of “the nature of the wrongful conduct which is alleged against her.” Liquidators of Madoff's estate are pursuing Kohn and the directors of Madoff Securities International Ltd., the company's English unit, for the return of assets. “This freezing order is a routine measure for such cases under English procedures and it is actually a good result in light of the entire case,” her lawyer, Clemens Trauttenberg, said by phone from Vienna. The former chairwoman of Bank Medici AG, according to a prior ruling from Flaux, made at least $56 million introducing clients to Madoff, who pleaded guilty in 2009 to using money from new investors to pay off old ones in a Ponzi scheme, sparking investigations and dozens of lawsuits. He is serving 150 years in prison in North Carolina for the fraud that caused his New York-based firm to collapse in December 2008. Kohn, who is suffering from health problems, has a house in Switzerland and fund investments worth at least 15 million pounds as well as bank accounts as far away as Israel, lawyers said Dec. 2. Steve Akers, one of the administrators of Madoff Securities International, declined to comment. The case is Madoff Securities International Ltd. v. Stephen Ernest John Raven, 10-1468, High Court of Justice, Queen's Bench Division (London) For the latest lawsuits news, click here. New Suits AT&T, Sprint Sued Over Carrier IQ Tracking Software AT&T Inc., Sprint Nextel Corp., Apple Inc. and T-Mobile USA were sued by mobile phone customers who claim that Carrier IQ Inc. tracking software installed on their phones violates U.S. wiretapping and computer fraud laws. The lawsuit cites a YouTube report by a technology blogger that purported to show that Carrier IQ software collects information on phone users' locations, applications and Web browsing and even the keys they press. Four consumers filed a complaint Dec. 2 in federal court in Wilmington, Delaware, seeking to block the carriers and phone makers from using the software. Carrier IQ software logs user activity and runs in the background of mobile devices. After the YouTube report, the U.S. Senate Judiciary Committee contacted the company seeking information and alleging that the software may violate federal privacy laws, according to a copy of the complaint supplied by David Straite, an attorney for the plaintiffs. The filing of the lawsuit couldn't be confirmed Dec. 2 through electronic court records. AT&T and Sprint, the second- and third-largest U.S. wireless providers, said in e-mailed statements on Dec. 1 that the software data is used to improve service performance. Apple stopped supporting Carrier IQ in most products and will remove it completely in a future software update, Natalie Harrison, an Apple spokeswoman, said in a Dec. 1 e-mail. The customers who sued seek compensatory and punitive damages on behalf of all others whose devices contain the so- called rootkit software from Mountain View, California-based Carrier IQ, which is also named as a defendant in the suit. The software is currently installed on 150 million phones worldwide, according to the complaint. Violations of the federal wiretap laws, which prohibit willful interception of wire or electronic communication, can result in damages of $100 a day per violation, according to the complaint. Carol Roos, a spokeswoman for Dallas-based AT&T, declined to comment on the lawsuit. Tom Neumayr, a spokesman for Cupertino, California-based Apple; Leigh Horner, a spokeswoman for Overland Park, Kansas- based Sprint Nextel; and T-Mobile USA representatives didn't return calls seeking comment after regular business hours on Dec. 2. Carrier IQ spokeswoman Mira Woods didn't respond to an e-mailed request for comment. The case is Pacilli v. Carrier IQ, U.S. District Court, District of Delaware (Wilmington). Oracle Accuses HP of False Advertising in Revised Itanium Suit Oracle Corp., accusing Hewlett-Packard Co. of false advertising in a revised countersuit, said HP secretly paid Intel Corp. to continue producing the Itanium computer chip. Oracle claims HP “made false and deceptive statements” to Oracle and the public regarding the future of the chip to induce Oracle to continue to build software that runs on HP servers that use the Itanium chip, according to an amended complaint provided by Deborah Hellinger, an Oracle spokeswoman. Filing of the document couldn't be immediately confirmed through electronic state court records Dec. 2. HP and Intel had an Itanium collaboration agreement under which Intel would prolong Itanium instead of discontinuing the chip, according to the complaint. The agreement was kept secret until Oracle uncovered it in a lawsuit first filed by HP against Oracle in June. HP alleged then that Oracle used “strong arm tactics” to force customers to shift away from HP's Itanium server hardware to Oracle's own server hardware. Details of the Itanium agreement, such as the date it was signed and how much HP paid Intel, are blacked out of the document. Oracle, based in Redwood City, California, seeks to rescind an agreement that settled litigation over Oracle's hiring of former HP Chief Executive Officer Mark Hurd, as well as unspecified damages. “Oracle is in breach of its contractual commitments to HP, and it has failed to honor its promises to customers,” Michael Thacker, a spokesman for Palo Alto, California-based HP, said Dec. 2 in an e-mailed statement responding to Oracle's new claims. “Oracle should be addressing and rectifying this conduct rather than making up claims against HP.” The case is Hewlett-Packard Co. v. Oracle Corp., 111- cv-0203163, California Superior Court (Santa Clara County). Pfizer, Teva Accused of Keeping Generic Drug Off Market Pfizer Inc.'s Wyeth unit and Teva Pharmaceuticals USA Inc. were accused by a group of prescription drug retailers of illegally keeping a generic version of the Effexor XR antidepressant off the market. “Wyeth engaged in an overarching anticompetitive scheme to prevent and delay the approval and marketing of generic versions of Effexor XR,” the retailers, including Walgreen Co. and Kroger Co., said in a complaint filed Nov. 30 in federal court in Trenton, New Jersey. The retailers allege that Wyeth fraudulently obtained patents and engaged in “sham litigation” to delay generic versions of the extended release drug. They also alleged that Wyeth and the U.S. unit of Israel-based Teva Pharmaceuticals Industries Ltd. colluded to keep Teva's generic version off the market until June 2010. Joan Campion, a spokeswoman for New York-based Pfizer, and Denise Bradley, a spokeswoman for Teva North America, didn't immediately return calls seeking comment on the lawsuit after regular business hours Dec. 1. The case is Walgreen v. Wyeth, 11-6985, U.S. District Court, District of New Jersey (Trenton). Apple Loses Bid for Order in Effort to Block Samsung Galaxy Apple Inc. lost a request for a court order in its bid to block sales of Samsung Electronics Co.'s 4G smartphone and Galaxy Tab 10.1 tablet computer, according to a ruling that was posted on a court docket and then removed. The iPad maker, in its lawsuit filed in federal court in San Jose, California, sought an order blocking Samsung from selling its Galaxy line of mobile devices products in the U.S. based on claims they violate Apple patents. The lawsuit is part of a legal battle between the companies being fought in 10 countries. Samsung said in an e-mailed statement that the ruling confirms its long-held view that Apple's arguments lack merit. “In particular, the court has recognized that Samsung has raised substantial questions about the validity of certain of Apple's design patents,” according to the statement. “We are confident that we can demonstrate the distinctiveness of Samsung's mobile devices when the case goes to trial next year.” The two companies have filed at least 30 lawsuits against each other, according to Samsung. The conflict began in April, when Apple filed the San Jose lawsuit claiming the Suwon, South Korean company's Galaxy devices copied the iPhone and iPad. “It's no coincidence that Samsung's latest products look a lot like the iPhone and iPad, from the shape of the hardware to the user interface and even the packaging,” Kristin Huguet, a spokeswoman for for Cupertino, California-based Apple, said Dec. 3 in an e-mail. “This kind of blatant copying is wrong and, as we've said many times before, we need to protect Apple's intellectual property when companies steal our ideas.” According to the court docket in San Jose, the ruling, which was posted temporarily in error late Dec.2, was later filed under seal. The case is Apple Inc. v. Samsung Electronics Co., 11-01846, U.S. District Court, Northern District of California (San Jose). For the latest new suits news, click here. For copies of recent civil complaints, click here. Verdicts/Settlements Altria Unit Must Pay $47.7 Million to Oregon, Court Rules Altria Group Inc.'s Philip Morris USA must pay $47.7 million to Oregon, the state's Supreme Court ruled, rejecting arguments from the biggest U.S. cigarette maker that the tobacco industry's landmark 1998 settlement with 46 states barred the recovery. The Oregon Supreme Court decided Dec. 2 that Philip Morris, a unit of Richmond, Virginia-based Altria, must pay the state 60 percent of a $79.5 million punitive damages award, plus interest, in a smoking-related wrongful death claim. A jury in 1999 awarded that amount, in addition to compensatory damages, to the estate of Jesse Williams, a smoker who had died of lung cancer. An Oregon law cited in the court's ruling requires that 60 percent of punitive damages awards go to the state. Philip Morris claimed the state released its claim by signing the $206 billion multistate settlement agreement resolving health-care cost-recovery lawsuits against U.S. cigarette makers. “We believe that the Oregon Supreme Court misapplied the law and reached an erroneous result,” said Murray Garnick, Altria Client Services senior vice president and associate general counsel. “As the lower court recognized, the state released its claims to any punitive damages when it signed the Master Settlement Agreement.” The case is Williams v. R.J. Reynolds, SC S059014, Oregon Supreme Court (Salem). UniCredit Has $331 Million Asset Ruling Overturned A UniCredit SpA unit won an appeal overturning a 245 million-euro ($331 million) verdict related to assets of the former East German Communist Party and the case was returned to a lower court for a new trial. The Zurich Court of Cassation on Nov. 30 overturned a lower Swiss court's ruling that the bank must pay the amount to the German government, Vienna-based UniCredit Bank Austria said in a statement Dec. 2. The lower Zurich court in 2010 ruled in favor of Germany, which argued Bank Austria's former AKB Privatbank Zuerich unit helped embezzle funds from companies in the former East Germany. It will now have to reconsider the case. When the dispute first went to court in 1994, Germany said the bank helped launder 250 million deutsche marks ($173 million) that vanished from the accounts of two former East German trading companies after communism fell. Germany said the funds were East German state assets that AKB helped shift to the Austria Communist Party in the 1990s after German reunification. Germany is also seeking interest on the amount dating from 1992. Germany is being represented by Bundesanstalt fuer vereinigungsbedingte Sonderaufgaben, the legal successor of the group that was in charge of managing the assets of the former East Germany. The BvS didn't reply to an e-mail by Bloomberg News requesting a comment. For the latest verdict and settlement news, click here. For the latest trial and appeals news, click here. Court Filings Bayerische Landesbank Suit Against JPMorgan Most Popular A lawsuit against JPMorgan Chase & Co. for fraud by German lender Bayerische Landesbank, over losses on about $2.1 billion in mortgage-backed securities, was the most-read litigation docket on the Bloomberg Law system last week. JPMorgan units concealed the truth about the poor quality of the loans underlying the securities and knew that credit ratings misrepresented their risk, BayernLB said in a lawsuit filed Nov. 21 in New York State Supreme Court. The lender said it believed the mortgage securities were safe investments based on representations about the quality of loans and credit ratings when it invested almost $2.1 billion in 57 offerings from 2005 to 2007, according to the complaint. The lawsuit names JPMorgan and units of the New York-based bank as defendants. The case is Bayerische Landesbank New York Branch v. Bear Stearns & Co., 653239/2011, New York State Supreme Court, New York County (Manhattan).

T-Mobile, other carriers named in Carrier IQ lawsuits

Three of the "big four" wireless carriers, including AT&T, Sprint and Bellevue-based T-Mobile, have been named in a new lawsuit that claims software embedded on many phones carried by the companies invades customers' privacy. The software is developed by Carrier IQ, a mobile intelligence firm that was slapped with two separate class-action suits last week. The company provides diagnostic software that can be installed on handsets to provide carriers and hardware manufacturers information to improve phone service. On its website, Carrier IQ says it gives "wireless carriers and handset manufacturers unprecedented insight into their customers' mobile experience." It's that "unprecedented insight" that has landed Carrier in some hot water, with plaintiffs claiming the company collects far more information than necessary, including "data about a user’s location, application use, Web browsing habits, videos watched, texts read and even the keys they press." Apple, HTC, Samsung and Motorola Mobility have also been named in the suits. Carrier IQ issued a statement last week to clarify the way it uses customer data from the software, which is installed on approximately 140 million mobile phones worldwide. The California company said any information collected is used to help operators determine why service problems are occuring, why calls are dropped and how to extend battery life. The company said the data it collects is determined by its customers and the software doesn't "record, store or transmit the contents of SMS messages, email, photographs, audio or video." "For example, we understand whether an SMS was sent accurately, but do not record or transmit the content of the SMS. We know which applications are draining your battery, but do not capture the screen," the company said in the statement. Some security experts have weighed in, including Rebecca Bace of Infidel, who said she believes "allegations of keystroke collection or other surveillance of mobile device user’s content are erroneous." The suit claims the software violates the Federal Wiretap Act, among others, and demands monetary compensation and a permanent injunction against installing software on cell phones that could track user data, reports Ars Technica. As mobile devices have proliferated, so have privacy concerns surrounding the use of customer data by software companies and hardware makers. A number of companies have been targeted in recent lawsuits claiming privacy violations, including Microsoft, Apple and HTC.