UPDATE 1-Barnes & Noble sued by eReader maker Spring Design

By Alexandria Sage SAN FRANCISCO, Nov 3 (Reuters) - Spring Design, a maker of electronic readers, is suing Barnes & Noble Inc, claiming the bookseller's newly launched Nook reader illegally copied its dual-screen design after the two discussed a possible partnership. Spring Design said Barnes & Noble used its proprietary design to better compete with Amazon.com's market-leading Kindle, while failing to disclose its intentions to make its own device. In a lawsuit filed on Monday in U.S. District Court in San Jose, California, Spring Design said it had shared the design of its Alex eReader with Barnes & Noble under protection of a nondisclosure agreement, hoping to strike a deal to bring a device to market. According to Spring Design, Barnes & Noble praised the features of the Alex eReader, but did not say that it intended to use them until it publicly unveiled its Nook eReader last month. Spring Design said on Tuesday that it expects to launch its Alex reader in January. A Barnes & Noble spokeswoman said the company does not comment on litigation. Spring Design said it first filed patents for its Alex reader, which features a dual screen and runs on Google Inc's Android operating system, in 2006. The Nook also runs on Android and features two screens, one of which is used for reading and the other for browsing. "We showed the Alex e-book design to Barnes & Noble in good faith with the intention of working together to provide a superior dual screen e-book to the market," Eric Kmiec, Spring Design's vice president of sales and marketing, said in a statement. The complaint says that Spring had been working with book stores, publishers and newspapers over the past two years "to educate them about the capabilities and advantages of the interactive dual-screen navigation design." Spring Design claimed that executives from Barnes & Noble said they were looking to create a product that would "effectively compete with Amazon's Kindle." According to the lawsuit, William Lynch, president of BarnesandNoble.com, "warned Spring's Albert Teng that he should not consider Amazon as a content partner, because Amazon was likely to steal Spring's unique idea without ever buying anything from Spring." "Spring believed that it was disclosing the confidential features of its Alex device in exchange for Barnes & Noble's implicit promise that it would seriously consider acquiring Spring's product," according to the lawsuit. Spring Design is suing for damages and injunctive relief. Barnes and Noble shares closed up 12 cents at $16.77 on the New York Stock Exchange on Tuesday. The case is Spring Design Inc v. Barnesandnoble.com LLC, U.S. District Court, Northern District of California, No. 09-05185. (Reporting by Alexandria Sage; Editing by Steve Orlofsky) Keywords: BARNES&NOBLE/LAWSUIT ([e-mail]; Reuters Messaging: [e-mail]) COPYRIGHT Copyright Thomson Reuters 2009. All rights reserved.

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