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Weekly Issues in the News

By Geisa Balla

E-books, Apple

Southern District of New York Judge Denise Cote has denied motions to dismiss filed by Apple Inc. and five other publishers in the e-books class action case. The lawsuit is related to Department of Justice (DOJ) charges in April 2012, accusing Apple and other e-book publishers of colluding to break up Amazon.com's dominance of the digital book market. HarperCollins Publishers Inc., Simon & Schuster Inc. and Hachette Book Group reached settlements with the DOJ. Apple, Macmillian and Penguin said in court last month that they want to go to trial to defend themselves of the charges. The consumers' main allegation in the class action suit is that the publishers worked together to raise prices and decrease competition, with Apple coordinating the agreement among them. The publishers moved to dismiss the complaint, but the judge was not persuaded. Judge Cote said that as alleged in the complaint, "it is presumed that the conduct by all parties would be unlawful under the rule of reason." In their motion papers, the defendants argued that the alleged pricing agreement was implausible, and that after the purported pricing agreement, prices became more varied, not less so. According to the DOJ's complaint, the price fixing took place in early 2010, as Apple was introducing its iPad, and e-book prices went up an average of $2 to $3 in a three-day period in early 2010.


Skechers Settlement

Skechers USA Inc. has agreed to pay $50 million to settle Federal Trade Commission (FTC) charges that it made unfounded claims when it advertised that its "toning shoes" would enable users to get stronger and lose weight. The FTC stated that Skechers was deceptive in the making of its Shape-ups, Resistance Runner, Toners and Tone-ups shoes. Skechers will pay $40 million to the FTC, which will return most of this settlement to consumers who bought the company's toning shoes. Skechers will pay an additional $5 million to 43 states and the District of Columbia, and another $5 million to the class action attorneys. David Vladeck, director of FTC's Bureau of Consumer Protection stated: "Skechers' unfounded claims went beyond stronger and more toned muscles. The company even made claims about weight loss and cardiovascular health." Skechers denied that its advertising was deceptive, saying that peer-reviewed journals had found fitness benefits from toning shoes. David Weinberg, the company's CFO, said in a statement: "We settled to avoid the cost and distraction of protracted legal battles so we could get back to doing what we do best." The FTC settled a similar claim with Reebok International Ltd. in 2011, where Reebok said it would pay $25 million for similar charges.


White et al v. West Publishing Corporation

On May 16, 2012, U.S. District Judge Jed Rakoff ruled that attorneys who did not register their works cannot sue West and LexisNexis for violating their copyrights. The decisions stems from a copyright infringement lawsuit brought in February 2012, accusing West and LexisNexis of unjustly profiting from selling attorneys' copyrighted filings. The class action lawsuit had two putative subclasses: attorneys with registered filings and attorneys with unregistered filings. Judge Rakoff stated that the subclass of lawyers who have not registered their filings with the U.S. Copyright Office do not have standing. He stated: "The statute is unequivocal that completing registration or pre-registration is a prerequisite to filing a claim."


Activision and Electronic Arts

Activision Blizzard Inc. settled a lawsuit with rival video game company Electronic Arts Inc. (EA), where Activision alleged that two of its former executives breached their employment contracts in develop games for EA. The two former executives developed the original "Call of Duty" game and several others in the series. After leaving Activision in 2010, the two former executives formed a new development studio, and signed an exclusive publishing and distribution agreement with EA. In a joint statement the companies stated: "Activision and EA have agreed to put this matter behind them." The details of the settlement were not disclosed.


Viacom and Time Warner

Viacom Inc. has settled a lawsuit with Time Warner Cable Inc. (TWC) over whether cable subscribers may watch shows on mobile devices such as iPads. Pursuant to the settlement, Viacom programming will become available over the TWC mobile app over the next several weeks. The companies said in a joint statement: "All of Viacom's programming will now be available to Time Warner Cable subscribers for in-home viewing via Internet protocol-enabled devices such as iPads." The terms of the settlement were not disclosed. Viacom settled a similar lawsuit over iPad streaming with Cablevision Systems Corp in August 2011. Viacom spokesman Mark Jafar said the settlement was "very good news for consumers."


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