It turns out that baseball and football have more in common than one might think.  Last month, the two leagues teamed up with one another and joined forces with a group of television's biggest broadcasters to put up a fight against web TV startup Aereo.  Barely 2 years old, Aereo allows users with web-enabled-devices to stream—and even record—live over-the-air TV broadcasts, care of individually-rented remote antennas that users can control via their Aereo subscription.The TV networks have already attempted to shut down the Internet video service by suing the company for copyright infringement in March 2012.  Their claim was that Aereo illegally profits from broadcasting licensed programming without paying the retransmission fees that are normally required of cable providers and other carriers who wish to air copyrighted material.  However, judges have repeatedly decided in Aereo's favor, refusing to issue injunctions that would pull the plug on the service.  The courts found that Aereo's lacking a "license to operate" was irrelevant, since, due to the nature of the streaming technology, their customers are viewing unique, private transmissions of the licensed content, much like individuals with "rabbit ears," or antennas on their own rooftops watch broadcast TV.  As a result of these decisions, the networks have appealed to the US Supreme Court to review the lower court rulings, and have found powerful allies in Major League Baseball and the National Football League, who have jointly filed an amicus brief declaring their support for the petition.

As part of their statement, the leagues argue that Aereo poses a real threat to broadcasters' business models.  They declare that if the startup is legally allowed to continue "hijacking" proprietary content from over-the-air broadcast channels without authorization or paying retransmission royalties, then sports affiliates—and TV networks, in general—will feel compelled to migrate their programming to pay-for-TV outlets, instead of continuing to broadcast via the free public airwaves.  Whether or not these broadcasters will feel the need to make good on this threat will likely be determined by the high court, should it choose to take on this case.  Until then, it's business-as-usual for Aereo and the Monday Night Football devotees who depend on it.

The new packaging of an upstart distiller’s white whiskey has been getting the unwanted attention of a leading Brown-Forman brand in the industry.  The trademark owners for Jack Daniel’s Tennessee Whiskey have sued J&M Concepts LLC and Popcorn Sutton Distilling LLC for an unspecified sum, claiming that the small, Nashville-based distillery’s redesigned packaging is “confusingly similar” to their iconic square bottle and black-and-white label.  Popcorn Sutton’s previous “trade dress,” as demonstrated on Ellen, was a Mason jar.

The defendant’s product traces its origins back to the tradition of Marvin “Popcorn” Sutton, the Appalachian moonshiner whose unapologetic stance on making “likker” made him a local legend, and somewhat of a posthumous folk hero.  Rather than serving an 18 month sentence in Federal prison for brewing “white lightning,” Popcorn committed suicide at the age of 62 in March 2009.  His colorful and controversial history inspired quite a few artists to record songs in tribute to his memory, including Hank Williams III, the son of country music star Hank Williams Jr, who is a financial backer of the Popcorn Sutton brand.

In order to maintain a legal hold on its trademarks, Jack Daniel’s (which has also recently started selling its own white whiskey) must vigorously defend any suspected infringements.  That being said, many wonder why more widely-distributed brands such as Evan Williams—a bigger fish to fry than relative newcomer Popcorn Sutton—weren’t their first targets for a lookalike lawsuit.  In the meantime, Brown-Forman’s flagship brand is demanding that Popcorn Sutton discontinue packaging their moonshine in a manner that will “deceive and confuse the public.”

In 1990, Stephen Kimble invented a Spider-Man toy that allowed a child to “role play” as Spider-Man by mimicking Spider-Man’s webshooting abilities with foam string.  Kimble filed a patent for his invention and, around the same time, met with Marvel to discuss licensing his patent and other ideas.  Kimble and Marvel did not have a written agreement but Kimble claims that Marvel agreed to compensate him if any ideas were used.  Marvel subsequently told Kimble that it was not interested in his ideas. Despite its supposed lack of interest, Marvel began manufacturing a similar Spider-Man role-playing toy.  In the meantime, Kimble's patent application issued and Kimble sued Marvel for patent infringement and breach of contract.  The parties settled in 2001 and Marvel bought the patent from Kimble for a lump sum and a 3% running royalty based on net sales.

Peace reigned until 2006, when a royalty dispute resulted in Kimble filing a new lawsuit for breach of contract.  Marvel counterclaimed for a declaration that it was no longer obligated to pay Kimble based on the sale of products after the expiration of his patent.  The Ninth Circuit reluctantly agreed with Marvel, finding that a  Brulotte v. Thys Co., a 1964 Supreme Court decision forbidding patent holders from collecting royalties after the expiration date of the patent controls.  Many judges and scholars have criticized Brulotte as making little economic sense.  But unless the Supreme Court revisits its earlier precedent, Mr. Kimble's stream of web-shooting royalties has run out.  Check out a commercial for the toy here:

On September 12, Twitter informed the world (through a tweet, naturally) that it is beginning the process of filing for an initial public offering.  What made this announcement different is that Twitter took advantage of a provision in the newly-enacted JOBS Act to file its initial paperwork confidentially with the SEC.   The JOBS Act allows what it defines as “emerging growth companies” to take advantage of reduced regulation during and after an IPO.  Congress defined an emerging growth company as one with less than $1 billion in revenue.

Companies that don't meet the emerging growth criteria must release their IPO filings, usually with pages of detail about their financial condition, risk factors and ownership and management structure, months before they sell their shares.  This gives investors, financial analysts and journalists a lot longer to analyze the company's prospects.

Twitter and other emerging growth companies can delay the release until 21 days before a roadshow to investors.  The roadshow precedes the offering of shares by a few weeks.  The JOBS Act was intended to help startups test the regulatory process for an IPO without worrying about bad publicity if they decide to withdraw their offering.

This American Life, a wonderful weekly radio show returned to the patent system last week with the episode "When Patents Attack....Part Two!".  The program includes interviews with Nathan Myhrvold and Peter Detkin, both founders of Intellectual Ventures.  Peter Detkin explains how he came up with now-famous term "patent troll" when he was at Intel (it was inspired by his daughter's toys) and the reporters attempt to track down information about East Texas patent-owning companies.  The podcast also examines the litigation brought by Personal Audio LLC against Adam Carolla and the Discovery Channel’s podcasting arm.  While the reporting has a decidedly anti-patent troll slant and tends to overly simplify some very complex issues, it is entertaining and worth a listen.

You can read the response of Intellectual Ventures to the podcast here.