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> We are working with some designers who are keen
> to use a particular Linotype font which is definitely
> copyrighted.

In which case you should probably contact Linotype, or at least browse their 
website.

http://www.linotype.com/

> Does anyone know any further information about font
> copyright on embedded devices ..[]..

Embedded or not. If the font is copyright, you will need to license it or at 
least know that you should have a license and be prepared for the outcome if you 
get caught. Have you got a Plan-B ?