The Sweet Smell of Suing Preferred Fragrance Inc.

Brooklyn-based Preferred Fragrance Inc. is being sued by Prada and Summit Entertainment for trademark infringement (LanhamAct).

Preferred Fragrance sees itself as a creator of “products that combine the same premium quality of a designer fragrance with affordable pricing and mass availability”. This sounds a lot like “they make it, we fake it”.

Prada produces Prada Candy, an eau de perfum that is sold for $82. The knockoff Party Candy can be ordered online for a mere $3.99. The look and feel of both fragrances are very similar. Prada has filed its lawsuit in the New York Southern District Court with Judge RonnieAbrams.

Summit Entertainment is also suing Preferred Fragrance for infringing on it Twilight IP. That lawsuit was filed in theCalifornia Central District Court with Judge Andrew J. Wistrich.

It is not the first time the company has been sued. In 2008 Estee Lauder Inc. and Clinique Laboratories Inc.  filed a lawsuit in the Manhattan federal court for trademark infringement, unfair competition, false advertising and dilution.

Although Preferred Fragrance has a mere annual revenue of $5 to 10 million, its parent company International Flavors & FragrancesInc. (NYSE:IFF) has deep pockets, so expect similar lawsuits in the (near) future.

Judge Rejects Twitter’s Attempt To Move Patent Lawsuit To Californian Court

Internet companies such as Twitter, Google (NASDAQ:GOOG) and Facebook are hit with patent suits regularly, often in inconvenient venues. They would therefore want those lawsuits to be heard in the relatively tech-friendly courthouses of Northern California.

However, it looks like that is not going to happen anytime soon. Twitter raised a novel argument. It asked to move the most recent patent lawsuit against it to move from Virginia to San Francisco. Titter claimed that the plaintiff in this case, Dinesh Agarwal, is a Twitter user himself. He therefore agreed to Twitter’s terms of service. Those terms include a clause that states that all lawsuits must be brought against the Company in San Francisco.

US District Judge Henry Morgan however ruled against Twitter. He concluded that his own court in Alexandria (VA) is the appropriate place to hear the lawsuit. He stated that Twitter’s contract clause referring o where lawsuits must be heard, does not necessarily apply to patent suits.

The judge also did not want to create a precedent. Allowing Twitter to transfer its court case would enable other social networking companies to start similar disputes. This would potentially foster satellite litigation in every patent case involving a social networking market participant.

Twitter move was smart. If the judge had accepted its argument, companies such as Twitter or Facebook would be in a strong position to move their patent disputes to their “home court.”

In this case, Mr. Agarwal is suing in the district he has been living in for the last 25 years. He is therefore not seeking a location foreign to both parties (like East Texas). Interesting enough, Agarwal’s twitter account shows that he has zero tweets. His profile states that he is a patent lawyer as well as an aspiring screenwriter. Agarwal signed up for Twitter in January 2010 mainly for the purpose of determining whether the service infringes his patent. Later that year, he founded VS Technologies, a shell company that hold the disputed patent and he then pursued lawsuit against Twitter.

Agarwal’s patent is based on a “method and system for creating an interactive virtual community of famous people”. As a patent lawyer, Agarwal handled all the paperwork for this patent application himself. He used patents to demand royalty payments from the tech industry. This increasingly common situation is called “patent trolling”

Federal court records show that Twitter has been sued for patent infringement at least four times. In addition to this lawsuit brought by VS Technologies, Twitter is facing an ongoing patent lawsuit filed by Cooper Notification in 2009.

Twitter settled a patent lawsuit brought by TechRadium in 2009. A fourth lawsuit, filed in 2010 by lawyer-controlled patent-holding company Stragent LLC, the lawsuit was dropped without explanation.

Federal Lawsuit between Cybermoguls over Control of OMGFacts Twitter Account


Twitter is Serious Business – just ask Cybermoguls 17-year-old Adorian Deck and by 24-year-old Emerson Spartz.

In 2009, Deck started the Twitter account OMGFacts where he tweeted trivial facts. He gained 300,000 followers within one year. Last year, Spartz approached Deck for a business partnership.

Spartz is the owner of Spartzinc, a network of websites that receives over 6 million unique monthly visitors and has more than 3 million followers on Facebook and Twitter. His portfolio include Mugglenet, one of the most popular Harry Potter fansites, the Twitter account Givesmehope and the high school dating site Flirtlocker.

Deck and Spartz signed a contract that gave Spartz all the rights to the OMGFacts brand and content. Spartz was able to gain over 1.8 million followers for OMGFacts. He also launched an OMWFacts website and YouTube account.

Up till now, Deck only made $100 on the deal. He is striking back at Spartz with a lawsuit, stating that the contract is "predatory" solely aimed to get full control of the account. Deck’s attorney, Glenn Peter, claims that the contract was a ploy to dupe Deck into transferring his rights to the OMGFacts trademark without realizing what he was doing.

Under California law, individuals can disavow any contracts signed when they were minors. But Spartz counters that Deck’s mother co-signed the contract as his legal guardian, and that Deck is trying to exploit SpartzInc for financial gain.

“Among other things, this agreement was designed to protect against Mr. Deck walking away with what we created, which is exactly what he’s trying to do,” Spartz said.

The OMGFacts lawsuit also addresses the question of who legally owns a tweet. How does copyright apply to a tweet?

According to Eric Goldman, a professor of Internet and intellectual property law at Santa Clara Law School: “Because tweets are so short, it can be hard to compose them in a way that earns them full copyright protection. Copyright protects the ways in which we express ourselves; it doesn’t protect the underlying facts or ideas we are expressing.”

To complicate copyright matters even more, Twitter includes a button to “retweet” or repost another user’s tweet, which implies a right to reuse someone else’s material. Collection of tweets or brand identities are also in legal limbo.

Top tweeters/brands like Kim Kardashian (7.4 million followers) can command $10,000 per tweet to endorse a product, and when rapper 50 Cent (4.5 million followers) posted praise of a penny stock in which he was an investor in January 2011, shares of H & H Imports Inc. skyrocketed.

The law is trying to catch up. But as Goldman pointed out: “We’ve had 600 years to develop the rules on books; we’ve had less than five years to develop how those rules apply to tweets.”

Google's Chinese Legal Trouble

Google finds itself in hot water again – this time from a Chinese novelist. Mian Mian, a counterculture writer known for her lurid tales of sex, drugs and nightlife, has filed a lawsuit against Google for scanning her latest novel "Acid House" without permission and putting it in its online library. Mian Mian is quite a colorful character (the pic is a file photo). Based in Shanghai, she shot to fame in 2000 when she published the novel "Candy," which caused a stir with its graphic depiction of heroin use. Most of her work is banned in China, though pirated copies are widely available. “Candy” is translated into English and widely available for purchase online.

At the court session, which consisted of a two-hour hearing, a Beijing judge told the two sides to hold talks on a settlement. Mian Mian is seeking damages of 61,000 yuan ($8,950) and a public apology.

A Google spokeswoman in Beijing, Marsha Wang, said the company removed Mian Mian's works from its library as soon as it learned of the lawsuit, adding that Google had no further comment on the suit or Tuesday's hearing. She added that Mian Mian's lawsuit was the first that she knew of in China over the scanning plan. The company has removed Mian Mian's works from its libraray.

Mian Mian’s lawyer stated that a negotiated settlement was a possibility and the court set no deadline, adding "we think even if they remove Mian Mian's work, their previous behavior is a violation of her rights. We demand a public apology."

This is the latest snag in Google's efforts to crate an online library, where printed works are available online. Previously, Google was under attack from writers in the United States and Europe (among others). Google reportedly has already scanned more than 10 million books, many of them still under copyright. Google negotiated a $125 million settlement last year with American authors and publishers, and it trying to avoid potential copyright infringement in Europe by only books scanning books over 150 years old. The European Commission said in October 2009 that it might change copyright law to make it easier for companies such as Google to scan books and distribute copies over the Internet.

In China, the China Written Works Copyright Society (a government-affiliated group) is taking on Google and negotiating compensation for Chinese authors whose work is scanned into its library. Mian Mian however, doesn have any connection to the Chinese writers' group. Commenting on Mian Mian's lawsuit, the group called on Chinese writers to band together to negotiate terms with Google instead of suing. It said it is due to hold settlement talks with the company in January. According to the group, Google has scanned more than 80,000 works by Chinese authors into the library.
It will be interesting to see how the Google’s Chinese troubles will pan out….