Sega of America (SOA) and its ad agency Leagas Delaney settled copy infringement suit filed by Nike in Feb. Suit contended ad for new Sega game NBA 2K2 that aired for first time in Jan. was nothing more than “virtual scene-by-scene reenactment” of Nike’s “Frozen Moment” 1996 TV ad depicting Chicago Bulls-L.A. Lakers NBA basketball game sequence featuring Michael Jordan (CED Feb 11 p2). Nike said SOA agreed to not run ad again, pay Nike’s legal fees and donate $100,000 in Nike’s name to Boys & Girls Clubs of Portland, Ore., and Memphis, Tenn., with each chapter receiving $50,000.

Alcatel signed separate agreements with SES Global and Gilat Satellite Networks to implement 2-way global satellite system. Plans call for Alcatel to use SES’ Broadband Interactive System (BBI) technology. SES will transfer industrial responsibility for technological development of BBI to Alcatel. Alcatel will endorse SES’ DVB-RCS standard for large-scale implementation of 2-way broadband system. SES developed DVB-RCS standard to provide 2-way satellite broadband access to professional users. Alcatel also promised to continue development of system and is guaranteeing supply of gateway and terminal products. Company’s name, board of directors and management team will be announced in coming weeks. Project will be funded by $43.8 million cash and $175 million of in-kind contributions. Gilat and SES will own 40%, Alcatel 20%.

Microsoft asked U.S. Dist. Court, Seattle, to reconsider preliminary injunction against Lindows.com. Judge John Coughenour last month denied request by Microsoft to block San Diego software company from calling itself Lindows.com and its Linux-based programs LindowsOS. Microsoft’s complaint charged Lindows.com with trademark infringement and unfair competition under Lanham Act. Software giant argued use of names Lindows.com and LindowsOS traded off goodwill of Windows trademark and would cause confusion among prospective buyers of Windows products and dilute ability of Microsoft’s trademark to distinguish its products from competing products. But Coughenour said “at most, Microsoft has raised serious questions about the validity of its trademark, but has fallen short” of showing Lindows.com should be prevented from using names as part of its business. He also said “there is indirect evidence that Microsoft considered Windows to be generic at the time it began using the trademark” -- so much so that when company first released Windows in 1985 it referred to operating system as “Microsoft Windows 1.0.” In asking court to reconsider decision, Microsoft said “a fundamental misapprehension of the test for ‘genericness’ led the court to conclude ‘Lindows.com has presented sufficient evidence [of genericness] to rebut the presumption of validity of the Windows [trademark].’ Whether the term ‘windows’ was generic in the mid- 1980s for one of many features shared by different software products is not the question the court must reconsider. Rather, the appropriate question is whether ‘Windows’ is generic for operating system software.”

Videogame maker Bam Entertainment, San Jose, announced Mon. what it admitted was “a significant reduction” in its revenue expectation for 3rd quarter ended March 31. Bam said it now expected to report revenue of $6.5-$8.5 million, down from $18- $20 million it announced in Jan. when posting 2nd quarter results (CED Jan 23 p5).

Napster judge laid out schedule Tues. for extensive discovery, going into 2003, on whether major record labels had misused copyrights anticompetitively. U.S. Dist. Judge Marilyn Patel, San Francisco, imposed some constraints, although Napster lawyer Celia Barenholtz argued against any, mainly in limiting Internet company to depositions of 2 executives from each of 5 plaintiff record companies. But Patel generally rejected pleas by industry lawyer Russell Frackman to expedite discovery, and by extending issue into next Jan. prolonged case even further than Napster had asked. Judge said she was taking cognizance of inevitable delays and taking care that depositions be done properly to avoid recalling witnesses and in recognition of fact that pretrial misuse question could turn into issue at any trial on record companies’ copyright infringement claims.

Federal appeals court Mon. let stand lower court ruling shutting down Napster. In unanimous decision, 3-judge panel of 9th U.S. Appeals Court, San Francisco, said Chief U.S. Dist. Court Judge Marilyn Patel’s preliminary order requiring Napster to police its file-sharing system for copyrighted songs and, later, her order closing service for failure to comply, were proper. They said modified preliminary injunction “correctly reflects the legal principles of contributory and vicarious copyright infringement that we previously articulated.”

Consumer intentions on buying TV sets fell significantly in March from Feb. for 2nd straight month, according to preliminary data in Conference Board monthly survey. Of 5,000 households polled, 6.1% said they planned to buy TV set in next 6 months, vs. 6.8% in Feb., 7.4% in Jan., 7.3% in March 2001 . Nevertheless, Consumer Confidence Index rose more than 15 points in March, bolstered by improvement in business and labor market conditions, Conference Board said: “This new boom in confidence should translate into increased consumer spending and stronger economic growth ahead.”

Assuming FCC will declare Thurs. how cable modem service should be classified, Commission also is poised to adopt Notice of Proposed Rulemaking (NPRM) examining who has jurisdiction to regulate service. Question is important because, if FCC classifies cable modem service as “information service,” as is widely expected, cable operators could be vulnerable to additional demands from local franchising authorities (LFAs) for new taxes, fees, etc., Cable Bureau Chief Kenneth Ferree, who soon will head up new Media Bureau, said in interview Mon. He said NPRM would take “granular” look at implications of particular classification, whether it be as “information service,” “telecom service,” “cable service” or some other animal. He declined to say which it would be, but gave some insight into NPRM that’s expected at FCC’s agenda meeting: “The second step is, well, what does that [classification] mean? What are the implications?” Specifically, NPRM will seek to determine who has jurisdiction and what role FCC and LFAs will have in overseeing cable modem service. Ferree said he would like to see issue resolved before end of 2002.

EchoStar’s “I Like 9” promotion won’t be resumed. Promotion, which offered 100 channels of video for $9 monthly, wasn’t attractive to customers who wanted service for multiple TVs because it lacked equipment subsidy, CEO Charles Ergen said. Package appeared cheaper than cable’s typical $30-$40 monthly fee for enhanced programming packages but it didn’t prove to be less expensive than even some of EchoStar’s other program packages, largely because it didn’t offer $200 subsidy on dish and receiver. Promotion ended Jan. 31… Temporary restraining order has been issued barring DirecTV from taking action against retailers that don’t sign new dealer agreement by March 4 deadline, said Allen Stewart, attorney for retailers. Dealers filed suit in L.A. Superior Court last fall alleging that DirecTV was withholding compensation from them by using accounting methods “designed to underpay or overcharge,” Stewart said. Superior Court Judge Victoria Chaney, who issued temporary order Feb. 28, set hearing for March 8 on request for preliminary injunction. Stewart said DirecTV agreed to pay dealers commission on new subscriber installations and residual on monthly fee charged to customers. Suit seeks more than $300 million in damages. DirecTV, in effort to cut down on subscriber churn, has moved in recent months to pay retailers based on activations rather than sales. DirecTV officials weren’t available for comment.

Ubi Soft Entertainment claimed victory Fri. in first part of its legal dispute with competitor Take-Two Interactive. Paris- based Ubi Soft said that “in a critical legal development” in case involving its Red Storm division and Take-Two Interactive Software Europe, only 2 weeks before preliminary issues were to be taken up by High Court, Take-Two conceded certain “crucial issues.” Dispute involves distribution rights Take-Two received from Red Storm for games in Europe and other markets outside U.S. before Ubi Soft’s purchase of Red Storm.