Anti-Piracy Patent Case|to Stay in New York City

(CN) - New York is the proper venue for a lawsuit accusing Warner Bros. Entertainment and others of stealing a Swiss company's patented idea for a special film print that can combat movie piracy, a federal judge in Manhattan ruled.

Medien Patent Verwaltung AG holds the European and U.S. patents for film prints that are branded with a "unique audio code" to allow any unauthorized copies to be traced back to the theater to which it was originally distributed.

"By using the invention a motion picture film print is individually and unmistakably marked," Medien says, helping the film industry combat the more than $6 billion a year lost due to piracy.

The inventor of the patent, Gerhard Lehmann, allegedly disclosed his anti-piracy invention in intricate detail to representatives of Warner Bros. at a meeting held in Potsdam, Germany in September 2003, under strict confidentiality.

A month later, the Swiss company claims, many of Warner Bros.' German releases for the first time contained the patented audio code for which Medien had since acquired the rights.

Warner Bros. also allegedly shared the secret information with film manufacturing company Technicolor.

By 2004, Warner Bros. began releasing movies incorporating the invention in prints throughout Europe, with most being produced by various European Technicolor subsidiaries, according to Medien's federal complaint.

Technicolor and fellow film manufacturer Deluxe Entertainment Services Group are named defendants, along with Warner Bros.

Technicolor is also accused of manufacturing and distributing thousands of motion picture film prints in the United States that violated patent, including the 2008 Warner Bros.-produced blockbuster "The Dark Knight," which grossed more than $530 million domestically.

U.S. District Judge Miriam Goldman Cedarbaum rejected the film defendants' request to transfer the case to Los Angeles.

"It is true that, in many cases, a foreign plaintiff's chosen forum in the United States will not be any more discernibly convenient than the alternatives," she wrote. "Here, however, [Medien] has articulated several legitimate reasons for selecting the Southern District of New York, including the ease and expense travel from Europe and the location of its preferred counsel."

She added that the studios and film companies "have not proffered any evidence that [Medien] had an improper motive in choosing this venue."

"That California is not the sole locus of operative facts weakens the case for transferring venue there," Cedarbaum wrote, citing the case's "transatlantic fact pattern."

Medien's patented process involves inserting a distinctive code in the soundtrack of a print, which Medien said is useful "since this individual mark is automatically transferred to any copy made from the marked print (regardless what media are used, e.g. camcorder tape, DVD or Internet file) and since distribution of every film print is recorded to identify the particular theater to which the print is distributed, it is possible to determine that the product is illegal and exactly which theater or other place a pirated copy originated from" (parentheses in original).

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