California Patent Attorney® Blog

March 2013 Archives

ITC Sides with Microsoft in Patent Claim

March 28, 2013,

game-controller.jpgCalifornia - The long, on-going battle between Microsoft Corp. and Motorola Mobility, Inc. (owned by Google) over the Xbox 360 gaming console could be coming to end based on the most recent decision by the International Trade Commission. Last Friday, Administrative Law Judge David P. Shaw announced that Microsoft was not in violation of Motorola's wireless connectivity patent, No. 6,069,896.

Motorola, obviously unhappy with the decision, still has a chance to convince the ITC to alter the decision by submitting a response. However, the decision will stand unless the ITC modifies it by July of this year.

Motorola has been seeking an import ban on the Xbox due to the alleged patent infringement. The Xbox is a video game console released by Microsoft on November 15, 2001. It represents Microsoft's first foray into the gaming console market.

Microsoft believes Motorola's patents fall into the area of licensing rules called "FRAND" or "fair, reasonable and non-discriminatory terms." FRAND forces businesses with patents to license certain technologies if they constitute a general standard in a particular industry. Microsoft did not deny that it used technology patented by Motorola. Instead Microsoft took the position that Motorola wasn't allowing Microsoft to license the technology at the reasonable rates set out by FRAND. Motorola was insisting that Microsoft pay a 2.25 percent royalty on every Xbox 360 sold, at a cost of approximately $4 billion per year.

The original lawsuit was filed with the International Trade Commission in November of 2010. Motorola based its claims against Microsoft on a total of five patents. Initially Judge Shaw invalidated one of the patents. Now all the patents cited in the action except one have been invalidated or dropped from the complaint.

Regarding the determination, Microsoft's corporate vice president and deputy general counsel made the following statement: "We are pleased with the Administrative Law Judge's finding that Microsoft did not violate Motorola's patent and are confident that this determination will be affirmed by the Commission. The ITC has already terminated its investigation on the other four patents originally asserted by Motorola against Microsoft."

The two companies will still face one another in two subsequent Federal lawsuits which have been put on hold pending the ITC's decision in this matter.

Frito-Lay Loses SCOOPS! Tortilla Chip Patent Fight

March 7, 2013,

chips-guacamole.jpgCalifornia - A Texas jury sided with BOWLZ chips maker Medallion Foods, Inc. saying that the company did not infringe Tostitos SCOOPS! manufacturer Frito-Lay North America Inc.'s patent for bowl-shaped tortilla chips.

PepsiCo, Inc. subsidiary Frito-Lay alleged that Ralcorp Holdings subsidiary Medallion had stolen its patented design for making the unique bowl-shaped tortilla chips and claimed that it purposely tried to confuse consumers by using similar packaging design and colors.

"Defendants' bowl-shaped tortilla chips and accompanying package are an apparent intentional effort to imitate the famous, successful trademark and packaging of Frito-Lay's Tostitos SCOOPS! tortilla chips," the complaint read.

However, the jury found that Frito-Lay had failed to prove that Medallion's store brand of chips sold at Wal-Mart stores infringed its method for making the chips, that it had infringed the packaging of the product, that Medallion's product would dilute the SCOOPS! brand in any way, or that Medallion was engaging in unfair competition by using similar packaging designs.

The food fight started when Frito-Lay sent a cease and desist letter to Medallion in early February 2012 accusing the company of infringing its intellectual property and demanding that it stop producing the BOWLZ chips within two days because of the purported infringement.

Medallion refused to comply because it believed it had not done anything wrong. When the cease and desist deadline passed, Medallion filed a lawsuit against Frito-Lay in Arkansas federal court requesting a declaratory judgment that its chip does not infringe on Frito-Lay's trademarks and patents. The case was dismissed later that year.

Frito-Lay responded to Medallion's lawsuit by filing a separate lawsuit that same month in Texas federal court, which resulted in the trial that concluded Friday. The complaint accused Medallion of infringing its patent-protected method for making the bowl-shaped chips and also accused Medallion of copying it packaging.

The jury, however, found that Medallion's methods for making its chip are different than the methods described in Frito-Lay's patent and disagreed that the packaging would cause confusion among consumers. Frito-Lay had requested $4.5 million in damages and an injunction preventing the company from continuing to make the BOWLZ chips.