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MICROSOFT SETTLES SUIT WITH LINDOWS Lindows Inc. is banking on its $20 million settlement with Microsoft Corp. and proceeds from its forthcoming initial public offering to support its operations for the next two years. In a filing with the Securities and Exchange Commission on Monday, Lindows reported that Microsoft agreed to pay it $20 million and drop a trademark infringement suit in exchange for Lindows changing its name to Linspire. The San Diego-based company had taken the Linspire name in Europe in response to litigation in several European countries. Had the case gone to trial, a jury would have decided if Microsoft had the right to trademark the word Windows. A Seattle federal judge ruled in February that he would instruct a jury to consider whether the mark was generic in November 1985 when Microsoft Windows 1.0 entered the market. In an amendment to its registration statement, Lindows said an independent public accounting firm had expressed doubt that the company could stay in business given its historical losses and negative cash flows. But the company said it believes that either the Microsoft settlement or its IPO proceeds “will be sufficient to fund our operations for at least the next 24 months.” Lindows said it expects to raise approximately $40 million based upon an assumed IPO offering price of $10 per share for 4.4 million shares. Microsoft filed suit against Lindows in 2001, claiming that the Lindows name infringed its Windows trademark. Lindows markets an operating system called Lindows OS that can run software applications developed for both Linux and Windows operating systems. Lindows is also in litigation with St. Paul Fire and Marine Insurance Co., which claims it should not have to cover the Microsoft litigation. According to the SEC filing, as of March 31, the carrier had paid approximately $3.2 million of Lindows’ legal fees and costs in the Microsoft litigation. — Brenda Sandburg CONVENTION PROTESTERS WILL GET SOME PRIVACY NEW YORK — New York City police officers cannot search the bags and backpacks of demonstrators at the Republican National Convention later this summer without showing both a specific threat to public safety and an indication of how blanket searches could reduce the threat, according to a federal judge. But Southern District Judge Robert Sweet also ruled that “less intrusive searches,” such as metal-detecting wands, would not violate the Fourth Amendment and would not be banned under a preliminary injunction he issued on police practices Monday. The ruling was one of several by Sweet in three demonstration-related cases filed by the New York Civil Liberties Union (NYCLU) Foundation. The lead case is Stauber v. The City of New York, 03 Civ. 9162. Sweet also ruled on the use of “pens” by police to corral demonstrators during the Aug. 30 to Sept. 2 Republican National Convention, finding that pens may be used, but they may not unreasonably restrict “access to and participation in demonstrations through the use of pens.” He also ruled on general access to any of several designated demonstration sites, blocking the New York Police Department “from closing streets and sidewalks at demonstrations without making reasonable efforts to notify persons how they can otherwise access the demonstration sites.” — New York Law Journal 3RD CIRCUIT SAYS LAW GIVES LAWYER IMMUNITY PHILADELPHIA — A lawyer hired by a union to represent one of its members in an arbitration hearing cannot later be sued by the worker for malpractice because the federal Labor Management Relations Act effectively immunizes the lawyer from such a claim, the Third Circuit U.S. Court of Appeals has ruled. In Carino v. Stefan, a unanimous three-judge panel upheld a New Jersey federal judge’s decision to dismiss a malpractice suit against attorney Marc Stefan and his firm, Bustavage & Associates of Washington, D.C., after finding that the LMRA “immunizes attorneys employed by or hired by unions to perform services related to a collective bargaining agreement from suit for malpractice.” Writing for the court, Judge Marjorie Rendell found that although Gisela Carino’s appeal presented a question of first impression in the Third Circuit, several other federal appeals courts have already extended the LMRA’s immunity to include lawyers. Carino’s lawyer urged the appellate court to carve out an exception in her case, arguing that Stefan allegedly deceived her into withdrawing her grievance and therefore had not performed any activity that was entitled to immunity. Rendell disagreed, saying “the fact that [Stefan] did not take the matter to arbitration is insufficient to distinguish it from the activity by union attorneys which has consistently been found to be immune.” — The Legal Intelligencer

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