New Crowdfunding Site Seeks to Protect Backers of Industrial Design

Entrepreneur Jamie Siminoff wants to build more credibility into crowdfunding — so he’s launching a new platform that takes responsibility for ensuring the viability of new projects.

The crowdfunding process, pioneered by sites like Kickstarter, has had its share of huge successes, as well as failures. The problem, says Siminoff, is that when a venture fails, the funders are left holding the bag. That’s all well and good if you were investing in an artist’s crazy project. It’s much more of a problem if you thought you were pre-ordering a nearly finished gadget.

The biggest culprit for these kinds of issues are physical products. Witness the anger unleashed when Kickstarter darling Pebble announced a further delay alongside underwhelming color choices.

This kind of issue is why Kickstarter recently made some changes, undertaking a combination of education and rule revision. They reminded consumers that Kickstarter is not a store while requiring that all projects disclose risks and challenges, as well as forbidding renderings and concept videos in hardware products.

Siminoff’s answer is Christie Street, a crowdfunding site devoted exclusively to physical products. The promise of Christie Street is that it will vet the projects that it launches carefully, and provide guarantees of progress along the way. The idea is that these protections will make consumers feel safer about the products they’re backing. “We built something that we felt we needed,” he says.

Christie Street, named for the New Jersey road where Edison’s workshop was located, will require that all funders go through an auditing process before they are allowed to go live. Siminoff says that the idea will be to check for basic viability, a kind of sanity test.

“You look at the chips they say they want to use, the size of components that will need to fit in, and so on,” he says, “You check that things conform to what’s available on the market.” From there, they also perform third-party audits of the places where the product will be manufactured, and look at things like production cost and likely shipping time, to ensure that all of this seems realistic.

It’s an all-or-nothing audit. Either the new project meets Christie Street’s approval or it doesn’t. “Our feeling is that the customer that’s buying doesn’t have the sophistication to make the right decision [about whether a design's production targets are reliable],” says Siminoff, “The only way is create a place where you can trust to buy.”

Even after the initial approval, Christie Street stays involved in the project. Successfully funded projects get their money in stages, with Christie Street holding the rest in escrow. Inventors get one-third of the money on funding, one-third of the money once they have a production-ready prototype, and the final one-third when they have a golden prototype, which means they are ready for full manufacturing.

If at any time along the way the project fails, Christie Street will can the project and refund the remaining money to investors.

What constitutes failure? Siminoff ticks off four conditions.

First, the inventor could for whatever reason announce that they couldn’t finish.

Second, if the project ends up more than six months late. “This forces people to be more careful with their delivery dates,” says Siminoff.

Third, if the product falls short of what was promised. “If the pre-production sample is more than 15 percent worse than what was promised, we will not allowed you to manufacture the product,” says Siminoff. (For example, if you promised me 512GB and only delivered 256.)

Last, says Siminoff there are other nuances that they’ll have to work out as the site develops. For example, if a product ends up requiring significant redesign, then Christie Street might end up withholding funds. “Design is a tougher one to quantify,” he says, “but it’s important that the design overall fits what was promised to the customer.”

For the extra cautious, Christie Street goes even further than the refund of remaining money. For 10 percent of their pledge value, backers can insure their entire pledge. If the project goes wrong they’ll get all of it back. Combine that with a pledge from inventors that the product will retail for at least 10 percent more than the pledge amount, and you can either take a 10 percent discount for some additional risk or pay full retail, with a money-back guarantee.

In effect, Christie Street is navigating a space between crowfunding sites like Kickstarter and Indiegogo, which expect backers to handle a lot of their own due diligence while allowing the inventors to be entrepreneurs, and crowdsourcing design sites like Quirky, which handles all of the business elements in-house.

Christie Street is an effort at drawing the lines of trust in a new way, one tied directly to the realities of post-industrial product design. Rather than a blanket ban on renderings and early designs, or a Wild West ‘anything goes’ approach, they instead seeks to tame the parts where production can go really wrong, in the devilish details of prototyping and manufacturing. It leaves questions of whether or not the thing is cool to the wisdom of the crowds, while taking on the question of whether or not the thing is possible.

This is obviously a lot more intervention between middleman and inventor than you’d see on a site like Indigegogo or Kickstarter. Siminoff says that they can still take the same 5 percent cut as their competitors because physical products tend to be involved higher dollar-value projects from the start. “If all goes well, we’ll be doing 10 to 15 live projects a months a year from now,” he says, “We think we can be profitable in the product world.”

“We’re not trying to make it where inventors are just be a name on a product,” says Siminoff, “We still want them to be entrepreneur and build this thing. We just want to make sure that they don’t fail in a way that hurts the customer.”

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“Freaks and Geeks” revisited: “Everybody was so talented and nobody knew it yet”

LOS ANGELES (TheWrap.com) – Looking back on “Freaks and Geeks,” Linda Cardellini – who led the (now) star-studded cast as Lindsay Weir – sums up the short-lived NBC series in one simple sentence: “Everybody was so talented and nobody knew it yet.”

Thanks to Judd Apatow, the director of “Knocked Up” and sort-of-sequel “This Is 40,” everybody knows it now.

And Vanity Fair’s in-depth oral history of the coming-of-age comedy by the likes of Seth Rogen, James Franco and Jason Segel details just how hard they worked (even on the weekends) to develop that talent.

“We would get the script on a Friday, and Seth and James and I would get together at my house every Sunday, without fail, and do the scenes over and over and improve them and really think about them,” says Segel, who played Nick Andopolis. “We loved the show. And we took the opportunity really, really seriously.”

Franco – who admits he may have taken himself a bit “too seriously” as a young actor – went to such great lengths to capture the character of bad boy Daniel Desario, that he tracked down and visited the high school that creator Paul Feig (“Bridesmaids”) attended.

“I knew that Paul had grown up just outside of Detroit, and I found his high school,” Franco explains. “I saw all the kids at summer school, and there was this guy the teacher pointed out to me, this kind of rough-around-the-edges-looking kid. He had a kind face, but he looked like he’d been in a little bit of trouble. And I remember thinking, ‘Ah, there’s Daniel.’”

When the trio wasn’t studying “SCTV” alum Joe Flaherty (Mr. Weir) to perfect their improv techniques – a hallmark of the many Apatow comedies – they were working on their writing skills.

“I was interested in the writing,” Franco fondly remembers. “So after hounding Judd and Paul they said, ‘You want to see how it’s written?’ They took me into Judd’s office, and they wrote a scene right in front of me, just improvising as the characters out loud. That was really important for me.”

Apatow and Feig’s influence was, perhaps, more important for Rogen and Segel since writing proved to be a hobby that would eventually elevate their career to the next level. Segal broke through as a screenwriter with 2008′s “Forgetting Sarah Marshall,” but Rogen did it first with his own brand of raunchy, yet heartfelt humor in 2007′s “Superbad” – a movie he began writing when he wasn’t filming “Freaks” scenes as Ken Miller.

“I dropped out of high school when I started doing the show,” Rogen reminisces. “I told them I was doing correspondence school from Canada and just wrote ‘Superbad’ all day.”

They aren’t the only writers to graduate from McKinley High either. John Francis Daley, who portrayed 13-year-old Sam Weir, has written a number of movies currently in production since the success of 2011′s “Horrible Bosses.

TV News Headlines – Yahoo! News

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Doping at U.S. Tracks Affects Europe’s Taste for Horse Meat

PARIS — For decades, American horses, many of them retired or damaged racehorses, have been shipped to Canada and Mexico, where it is legal to slaughter horses, and then processed and sold for consumption in Europe and beyond.

Christinne Muschi for The New York Times

A slaughterhouse in Saint-André-Avellin, Quebec, where meat is processed for sale in Europe.

Lately, however, European food safety officials have notified Mexican and Canadian slaughterhouses of a growing concern: The meat of American racehorses may be too toxic to eat safely because the horses have been injected repeatedly with drugs.

Despite the fact that racehorses make up only a fraction of the trade in horse meat, the European officials have indicated that they may nonetheless require lifetime medication records for slaughter-bound horses from Canada and Mexico, and perhaps require them to be held on feedlots or some other holding area for six months before they are slaughtered.

In October, Stephan Giguere, the general manager of a major slaughterhouse in Quebec, said he turned away truckloads of horses coming from the United States because his clients were worried about potential drug issues. Mr. Giguere said he told his buyers to stay away from horses coming from American racetracks.

“We don’t want them,” he said. “It’s too risky.”

The action is just the latest indication of the troubled state of American racing and its problems with the doping of horses. Some prominent trainers have been disciplined for using legal and illegal drugs, and horses loaded with painkillers have been breaking down in arresting numbers. Congress has called for reform, and state regulators have begun imposing stricter rules.

But for pure emotional effect, the alarm raised in the international horse-meat marketplace packs a distinctive punch.

Some 138,000 horses were sent to Canada or Mexico in 2010 alone to be turned into meat for Europe and other parts of the world, according to a Government Accountability Office report. Organizations concerned about the welfare of retired racehorses have estimated that anywhere from 10 to 15 percent of the population sent for slaughter may have performed on racetracks in the United States.

“Racehorses are walking pharmacies,” said Dr. Nicholas Dodman, a veterinarian on the faculty of Tufts University and a co-author of a 2010 article that sought to raise concerns about the health risks posed by American racehorses. He said it was reckless to want any of the drugs routinely administered to horses “in your food chain.”

Horses being shipped to Mexico and Canada are by law required to have been free of certain drugs for six months before being slaughtered, and those involved in their shipping must have affidavits proving that. But European Commission officials say the affidavits are easily falsified. As a result, American racehorses often show up in Canada within weeks — sometimes days — of their leaving the racetrack and their steady diets of drugs.

In October, the European Commission’s Directorate General for Health and Consumers found serious problems while auditing the operations of equine slaughter facilities in Mexico, where 80 percent of the horses arrive from the United States. The commission’s report said Mexican officials were not allowed to question the “authenticity or reliability of the sworn statements” about the ostensibly drug-free horses, and thus had no way of verifying whether the horses were tainted by drugs.

“The systems in place for identification, the food-chain information and in particular the affidavits concerning the nontreatment for six months with certain medical substances, both for the horses imported from the U.S. as well as for the Mexican horses, are insufficient to guarantee that standards equivalent to those provided for by E.U. legislation are applied,” the report said.

The authorities in the United States and Canada acknowledge that oversight of the slaughter business is lax. On July 9, the United States Food and Drug Administration sent a warning letter to an Ohio feedlot operator who sells horses for slaughter. The operator, Ronald Andio, was reprimanded for selling a drug-tainted thoroughbred horse to a Canadian slaughterhouse.

The Canadian Food Inspection Agency had tested the carcass of the horse the previous August and found the anti-inflammatory drug phenylbutazone in the muscle and kidney tissues. It also discovered clenbuterol, a widely abused medication for breathing problems that can build muscle by mimicking anabolic steroids.

Because horses are not a traditional food source in the United States, the Food and Drug Administration does not require human food safety information as it considers what drugs can be used legally on horses. Patricia El-Hinnawy, a spokeswoman for the agency, said agency-approved drugs intended for use in horses carried the warning “Do not use in horses intended for human consumption.”

She also said the case against Mr. Andio remained open.

“On the warning letter, the case remains open and no further information can be provided at this time,” Ms. El-Hinnawy said.

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Ebony Looks to Its Past as It Modernizes

Nathan Weber for The New York Times

Desirée Rogers, left, and Linda Johnson Rice in the archives at Ebony.

DESIRÉE ROGERS, the C.E.O. of Johnson Publishing, which owns the magazines Ebony and Jet, and Fashion Fair, a makeup line aimed at women of color, can see many sights from her 21st-floor corner office across from Millennium Park. “This is a good view of Chicago,” Ms. Rogers told a recent visitor, gesturing at a panorama of Lake Michigan, Grant Park, Navy Pier, the Adler Planetarium and Soldier Field. But the sight that holds the most personal meaning for Ms. Rogers may be a portrait by Robin Harper just above her purple retro sofa, depicting the boxer Jack Johnson with a soft, wounded expression.

The portrait, Ms. Rogers said, reminded her of looking at pictures of Muhammad Ali in the pages of Ebony with her grandfather as a little girl growing up in New Orleans. “My grandfather really liked fighters,” she said. As they flipped through the magazines, she said, he’d tell her: “I hope you’re great. And I hope one day you’ll be in those pages.”

Ms. Rogers, 53, has been in the pages of Ebony many times since her first appearance in April 1989 in a photo from George H. W. Bush’s inauguration. Her name now sits atop the magazine’s masthead, just below that of her best friend, Linda Johnson Rice, chairwoman of the company.

Ms. Johnson Rice’s father, the late John H. Johnson, founded Johnson Publishing in 1942 with a $500 loan he secured against his mother’s furniture when he was 24. Since then, Ebony (the name was the suggestion of Ms. Johnson Rice’s mother, Eunice Johnson) has gone on to become one of the most recognizable African-American publications in the world. The Harper image was part of the huge art collection of Mr. and Mrs. Johnson (no relation to the boxer), and it graced the cover of the magazine in March 1978.

Ms. Rogers joined Johnson Publishing just over two years ago after a short, controversial run as White House social secretary for President Obama. Among the tasks she has set for herself is making Ebony a lifestyle brand.

“We started looking at the assets that we have and also to really think about the Johnsons and what they were creating,” Ms. Rogers said. “We have incredible loyalty and love from the community. We have great relationships with our clients, who have been rooting for us to turn around and modernize.”

In early November, Ebony.com introduced The Ebony Collection, an online shop that sells framed prints of 2,000 photos selected from the magazine’s million-image archive. Reprinted from the original negatives stored in a climate-controlled room, the images were selected by Ms. Johnson Rice, who spent months poring over her father’s original commissions. “We kept everything,” Ms. Johnson Rice said. “Every major event that’s happened to African-Americans since 1945, with Ebony as a repository for all those photographs and as a voice for all that happened.”

Paying respect to history is a theme repeatedly invoked in the Johnson Publishing offices, so much so that it was no surprise running into Henry Louis Gates Jr., the director of the Harvard W. E. B. Du Bois Institute for African and African American Research, in a conference room. Professor Gates was there with a film crew shooting a PBS series, “Many Rivers to Cross: The History of the African American People,” and was being shown images from the archives by Ms. Johnson Rice for an episode that will cover 1940 to 1980. “My family got Ebony,” he said later. “Every family subscribed to Ebony and Jet if they were black.

“They still have cultural resonance among all classes of African-Americans,” Professor Gates said. “Very few organs of journalism reach a wider swath of the African-American community than Ebony and Jet.”

In 2013, that community will once again welcome the Ebony Fashion Fair, which began bringing high fashion to 160 cities across the country in 1958, but has been on hiatus since Eunice Johnson’s death in 2010. (“It’s the No. 1 question I get as I travel the country,” Ms. Rogers said. ‘When is the show coming back, Desirée?’ ”)

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U.S. undertakes review of border officers' use of force

U.S. Customs and Border Protection has launched what it calls a comprehensive review of its officers' use of force amid a sharp increase in fatal confrontations along the Southwest border.

The initiative, which appears to be the most far-reaching of its kind in recent years, calls for an assessment of current tactics and the participation of an independent outside research center.

Mexican government officials, who have condemned the shootings, will also be provided briefings on closed investigations involving force, according to a memorandum prepared for Homeland Security Secretary Janet Napolitano and obtained by the Los Angeles Times.

The memorandum, dated Oct., 24, 2012, is from David V. Aguilar, the agency's deputy commissioner.

Since 2010, 16 people have been killed in fatal confrontations with Border Patrol agents and customs officers, prompting unprecedented levels of scrutiny and criticism from some U.S. Congress members and border activists. Agency guidelines permit agents to fire weapons against people suspected of throwing rocks, a practice that critics consider excessive.

Recent incidents that stirred protests include the shooting in October of a 16-year-old suspected rock thrower in Nogales, Mexico, and the September shooting of a man on the banks of the Rio Grande in Nuevo Laredo, Mexico. Mexican authorities say the man was picnicking with his family.

In San Diego, protests erupted over the 2010 death of a man who suffered a fatal heart attack after being Tasered in a scuffle. About half of the fatal incidents in recent years involved rock throwers. In most cases the agents involved were cleared of wrongdoing.

The Homeland Security's Office of Inspector General is also conducting a review of the incidents. U.S. authorities will ramp up efforts to improve coordination with Mexican authorities in high-risk areas, according to the memorandum. They are also pressing Mexico to establish a specially trained border unit.

Among the most significant elements in the review, experts and officials said, is the involvement of an unspecified third party, described as a federally funded research and development center.

"Any time you can get an independent party to do a review, that is really the best way to go," said Alonzo Pen¿a, a former Department of Homeland Security attache at the U.S. Embassy in Mexico City. "There will never be confidence in a review being done by the agency itself," he said.

Vicki B. Gaubeca, the director of the regional center for border rights for the ACLU of New Mexico, said she welcomed "anything they can do to prevent unnecessary deaths, so agents resort to the lethal use of force only as a last resort."

Among rank-and-file agents, the new measures were greeted with a mix of resentment and cautious optimism. In recent weeks, supervisors have distributed the use of force guidelines to agents to refresh their knowledge of the policy. Chief patrol agents from across the Southwest were summoned to Washington, D.C., in October to discuss the policy.

Some agents questioned the role of the Mexican government, saying their actions contributed to the violence. "They refuse to police their northern border and they allow free rein by criminal organizations," said Shawn Moran, vice president of the National Border Patrol Council, the union representing Border Patrol agents. "But when one of their citizens is killed after assaulting a border patrol agent, they raise hell."

Customs and Border Protection officials said the review should be completed by the end of January.

richard.marosi@latimes.com

brian.bennett@latimes.com

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Feds Charge Anonymous Spokesperson for Sharing Hacked Stratfor Credit Cards

A Dallas grand jury has brought charges against Anonymous spokesman Barrett Brown stemming from the 2011 hack of intelligence vendor Stratfor Global Intelligence.

Brown isn’t charged with committing the hack; just with possessing and transmitting credit card numbers that were stolen in the incident.

He has been in prison since he was arrested in dramatic and public fashion three months ago after posting a threatening video to YouTube. Brown was talking with acquaintances during a Sept. 12 TinyChat session when the feds burst in and took him away. The chat session was later posted to the internet.

The Anonymous spokesman was charged the next day with threatening a federal officer.

This time the charges are are related to a different incident: the 2011 Stratfor hack where credit card numbers and internal e-mail messages were stolen.

According to the grand jury indictment, dated Tuesday, Brown posted a link to a zipped version of the documents stolen in the Stratfor hack on Christmas day 2011 — that counts as trafficking in “stolen authentication features,” the indictment claims. He’s also charged with possessing stolen credit card numbers, Card Verification Values, and other information related to those credit card numbers.

Brown, 31, has been in custody since his Sept. 12 arrest, the U.S. Department of Justice said Friday in a press release announcing the 12-count indictment. He could face a maximum of 15 years in prison if convicted on the most serious of these charges.

The self-proclaimed Anonymous spokesman said he was expecting to face fraud charges after his apartment was raided back in March. He mentioned them in a long, rambling video posted to YouTube the day on the same day he was arrested in September. “I bring in no money. I have $25,000 I brought in the last year from this fucking book deal. that’s it.” he said. “A fucking fraud charge for a fucking writer activist who has no fucking money.”

Later in the video, Brown railed against FBI Agent Robert Smith, saying that he was going to “ruin” Smith’s life “and look into his fucking kids.” The Anonymous activist said he was angry that feds were contemplating obstruction of justice charges against his mother.

The indictment is below.

Gov.uscourts.txnd.226354.1.0

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Billionaire Aldi heir dies aged 58

FRANKFURT (Reuters) – German billionaire Berthold Albrecht, heir to the Aldi supermarket chain and one of Germany‘s richest men, has died aged 58, his family announced on Friday.

Together with his brother Theo Jr, Albrecht’s fortune was estimated at $ 17.8 billion, according to Forbes. That placed them at 32 in the list of Forbes billionaires and second for Germany.

“Berthold was a fighter, and full of hope to the end,” his wife, Babette, wrote in a full-page notice published in several German newspapers.

The notice from the notoriously reclusive family said that the funeral had taken place in November, but it did not give further details of the circumstances of his death.

Berthold was the son of Aldi co-founder Theo Albrecht, who died at the age of 88 in July 2010.

After the Second World War, Theo and his brother Karl turned the small grocery store their mother operated in Essen into one of the nation’s largest food retail chains, with a focus on a limited range of goods at bargain prices.

Aldi was split into two divisions covering north and south Germany in 1960. Theo took the north and Karl the south. Karl, aged 92, is classified by Forbes as the richest man in Germany with a fortune of $ 25.4 billion.

The Aldi empire, which has estimated worldwide annual turnover of about 50 billion euros ($ 65 billion), also owns the Trader Joe’s grocery chain in the United States. In Europe it competes with the likes of Tesco, Carrefour and Metro.

Berthold worked on the board of directors at Aldi North. ($ 1 = 0.7700 euros)

(Reporting by Victoria Bryan; Editing by David Goodman)

Celebrity News Headlines – Yahoo! News

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Justices to Take Up Generic Drug Case

WASHINGTON — The Supreme Court said on Friday that it would decide whether a pharmaceutical company should be allowed to pay a competitor millions of dollars to keep a generic copy of a best-selling drug off the market.

Stephen Crowley/The New York Times

Ralph Neas, head of the Generic Pharmaceutical Association, said the case would alter the marketing of new generics.

The case could settle a decade-long battle between federal regulators, who say the deals violate antitrust law, and the pharmaceutical industry, which contends that they are really just settlements of disputes over patents that protect the billions of dollars they pour into research and development.

Three separate federal circuit courts of appeal have ruled over the last decade that the deals were allowable. But in July a federal appeals court in Philadelphia — which covers the territory where many big drug makers are based — said the arrangements were anticompetitive.

Both sides in the case supported the petition for the Supreme Court to decide the case, each arguing that the conflicting appeals court decisions would inject uncertainty into their operations.

By keeping lower-priced generic drugs off the market, drug companies are able to charge higher prices than they otherwise could. Last year, the Congressional Budget Office estimated that a Senate bill to outlaw those payments would lower drug costs in the United States by $11 billion and would save the federal government $4.8 billion over 10 years.

Senator Charles E. Grassley, an Iowa Republican who co-sponsored the Senate bill, which never came to the floor for a vote, praised the decision.

The Federal Trade Commission first filed the suit in question in 2009. Jon Leibowitz, chairman of the F.T.C., said, “These pay-for-delay deals are win-win for the drug companies, but big losers for U.S. consumers and taxpayers.”

Generic drug makers say that the payments preserve a system that has saved American consumers hundreds of billions of dollars.

“This case could determine how an entire industry does business because it would dramatically affect the economics of each decision to introduce a new generic drug,” Ralph G. Neas, president of the Generic Pharmaceutical Association, said in a statement. “The current industry paradigm of challenging patents on branded drugs in order to bring new generics to market as soon as possible has produced $1.06 trillion in savings over the past 10 years.”

The case will review a decision by the United States Court of Appeals for the 11th Circuit, based in Atlanta, which in the spring ruled in favor of the drug makers, Watson Pharmaceuticals and Solvay Pharmaceuticals. Watson had applied for federal approval to sell a generic version of AndroGel, a testosterone replacement drug made by Solvay.

While courts have long held that paying a competitor to stay off the market creates unfair competition, the pharmaceuticals case is different because it involves patents, whose essential purpose is to prevent competition.

When a generic manufacturer seeks approval to market a copy of a brand-name drug, it also often files a lawsuit challenging a patent that the drug’s originator says prevents competition.

Last year, for the third time since 2003, the 11th Circuit upheld the agreements as long as the allegedly anticompetitive behavior that results — in this case, keeping the generic drug off the market — is the same thing that would take place if the brand-name company’s patent were upheld.

Two other federal circuit courts, the Second Circuit and the Federal Circuit, have ruled similarly. But in July, the Third Circuit Court of Appeals said that those arrangements were anticompetitive on their face and violated antitrust law.

The agreements are also affected by a peculiar condition in the law that legalized generic competition for prescription drugs. That law, known as the Hatch-Waxman Act, gives a 180-day period of exclusivity to the first generic drug maker to file for approval of a generic copy and to file a lawsuit challenging the brand-name drug’s patent.

Brand-name drug companies have taken advantage of that law, finding that they can settle the patent suit by getting the generic company to agree to stay out of the market for a period of time. Because that generic company also has exclusivity rights, no other generic companies can enter the market.

Michael A. Carrier, a professor at Rutgers School of Law-Camden, said that while there were provisions in the law under which a generic company could forfeit that exclusivity, “they really are toothless in practice.”

One wild card could still prevent the Supreme Court from definitively settling the question. In granting the petition to hear the case, the Supreme Court said that Justice Samuel A. Alito Jr. recused himself, taking no part in the consideration or decision.

That opens the possibility that a 4-4 decision could result, upholding the lower court case that went against the F.T.C. and in favor of the drug makers. But it would leave the broader question for another day.

The case is Federal Trade Commission v. Watson Pharmaceuticals et al, No. 12-416.

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Judge may lower Apple's award in Samsung patent case

By Jessica Guynn, Los Angeles Times

December 6, 2012, 8:42 p.m.

SAN JOSE — A federal judge signaled Thursday that she might reduce Apple Inc.'s $1-billion jury award in its patent infringement case with Samsung Electronics Co.

U.S. District Judge Lucy Koh did not specify by how much she might shave the award, but during a marathon afternoon hearing in federal court in San Jose she said it did appear that the jury had miscalculated damages.

In August, after three days of deliberations in the complex patent case, a jury awarded Apple more than $1 billion.

In the months since the verdict, Samsung has mounted an aggressive campaign to overturn the verdict, raising a host of legal issues including juror misconduct. Apple hotly contested those issues during the hearing Thursday and sought to increase the damage award.

Lawyers for the world's two largest smartphone makers sparred for more than three hours over a bevy of legal issues in the dispute that produced one of the largest damage awards in an intellectual property case. Koh said she would issue rulings in the coming weeks.

Samsung argued that the damage award should be reduced because the jury incorrectly calculated the amount. Apple asked the court to award $535 million more in damages because the jury found that Samsung had willfully infringed Apple's patents.

Both sides seemed to be gearing up for years of legal appeals despite the judge's plea for "global peace." The case is likely to go before the U.S. Federal Circuit Court of Appeals, the Washington court that decides patent disputes, and perhaps the U.S. Supreme Court.

Apple also asked the judge to ban some Samsung products. The judge did not rule on whether the infringing Samsung products should be taken off store shelves.

The products are older models and would not dent Samsung sales, but the ban would give Apple a win in its high-stakes patent war against the South Korean company that is playing out around the globe.

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jessica.guynn@latimes.com

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<em>Apple v. Samsung</em> Judge: 'It's Time for Global Peace'

SAN JOSE, California — Everybody settle down. Sorting out the Samsung v. Apple verdict is gonna take awhile, even if the judge presiding over the trial might trim the $1.05 billion award and said it’s time for the tech giants to make peace.

The epic Apple v. Samsung patent-infringement case was back in San Jose Federal Court on Thursday, and federal judge Lucy Koh said she’s too busy with another patent trial to issue a sweeping ruling on the sales bans Apple is seeking and the question of whether Samsung should pay more, or less, than the $1.05 billion in damages a jury awarded in August. Instead, she’ll issue a series of rulings in the next few months and wrap this up.

“I think it’s time for global peace,” the judge said from the bench. “I think it’d be good for consumers, the industry, and the parties.”

It was the first time the two sides have been in court since a nine-member jury on Aug. 24 awarded Apple a $1.05 billion award after ruling that Samsung violated Apple product design and essential user interface elements. The hearing was largely procedural, with lawyers ponderously quibbling over intricacies. At one point, Koh called a particular point moot, prompting an Apple lawyer to reply, “It’s different shades of moot.”

At issue are three points: whether the damages were appropriate; whether as many as 26 Samsung products should be banned from sale in the U.S.; and whether the jury decision should be thrown out altogether because of alleged misconduct from the jury foreman, who failed to disclose his involvement in a lawsuit. Although only three of the products at issue in the case are still on the market, a sweeping ban would substantially hurt the Korean company financially, make an example of the Android handset maker, and could affect the types of products retailers are willing to put on their store shelves.

In a nutshell, Apple wants to tack another $500 million onto the verdict and additional Samsung products added to the injunction. “Hopefully after an injunction they will be deterred from getting this close to the line and we will not be back in front of you in the future,” Apple attorney Michael Jacobs told Judge Koh.

Samsung, of course, wants the verdict dissected after a few anomalous calculations were examined, including a seemingly exorbitant charge of $58 million on the Samsung Galaxy Prevail smartphone. “You should reverse-engineer (the damages), make sure jury verdict is causally related to the evidence based on legal theory,” Samsung lawyer Kathleen Sullivan said. “We’ve given you two legal errors that you can correct with mathematical certainty.”

Koh indicated that she might trim the award granted in the Prevail, noting the figure was “way beyond reasonable royalty or lost profit.”

Samsung feels Apple is actively engaging in a smear campaign and reiterated its point that the jury foreman in the trial had incentive to be vindictive against Samsung. Even so, Samsung counsel Charles Verhoeven said the company is willing to talk. “The ball’s in [Apple's] court,” he said. Koh was surely happy to hear that, as she appears exasperated by the growing length and complexity of the case.

“When is this case going to resolve?” she asked at one point. “This is not a joke, I’m being serious.”

It may not end even when Koh signs off on it. The case is expected to be appealed to the U.S. Federal Circuit Court of Appeals in Washington, D.C.

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