As “Standards-Essential” Patent Debate Expands, WLF Briefing Offers Some Perspective

PodiumPic1Last month, a Legal Pulse post discussed some important courtroom developments involving disputes over so-called standards-essential patents (“SEPs”). We noted in the post that federal agencies and elected officials were also expressing interest in and concern over SEPs. Since that post there has been a flurry of activity. In just the past week, we have seen:

  • A proposed settlement from the Federal Trade Commission in the context of a merger affecting automobile air conditioning equipment makers where the company being acquired, SPX Services, was a holder of SEPs and had been seeking injunctions against allegedly willing licensees of the patents.
  • Ericsson filing a patent infringement and breach of contract lawsuit against Samsung in the Eastern District of Texas where SEPs and alleged failure to offer a license on RAND terms is involved.
  • The U.S. International Trade Commission announcing it will review a USITC’s judge’s decision that Apple did not infringe Samsung patents. In the announcement, the Commission seeks public comment on several questions related to SEPs.

At a Washington Legal Foundation Media Briefing program yesterday, Standards-Essential Patents: Where Do IP Protections End and Antitrust Concerns Begin?, two academic experts on patents and antitrust, as well as a leading patent pool and standards practitioner, addressed these developments and the larger question of what role government can and should play in SEP controversies.

Speaker Professor Adam Mossoff referenced research on America’s first “patent war”, involving sewing machines, which led to an Arizona Law Review article. Professor Contreras based his presentation on a research paper available here.

Those attending the program in person also received copies of past WLF publications relevant to the topic being discussed.  Links to those papers appear below.

9th Circuit Ruling Is Critical Reminder to Pipeline Project Participants

Guest Commentary

by Jean-Cyril (JC) Walker and Gregory A. Clark, Keller and Heckman, LLP

Arguably, the October 22, 2012, decision by the U.S. Court of Appeals for the Ninth Circuit in Center for Biological Diversity v. Bureau of Land Management,merely clarifies existing law.  On the other hand, the decision, which vacated and remanded a Bureau of Land Management (BLM) decision granting approval for a natural gas pipeline running from Wyoming to Oregon, underscores how approvals granted by Federal land management agencies can be vulnerable to challenges under the Endangered Species Act (ESA) if the Fish and Wildlife Service does not provide a well-grounded Biological Opinion.

The pipeline at issue, the Ruby Pipeline Project, had been approved by the Federal Energy Regulatory Commission (FERC) and the BLM in 2010 and began operating in July 2011.  To gain approval for the project, which covered Federal lands, Ruby Pipeline LLC (“Ruby”) sought and received a Certificate of Public Convenience and Necessity from the FERC and rights of way and temporary use permits from the BLM under the Natural Gas Act (NGA) and the Mineral Leasing Act (MLA), respectively.  Both approvals were contingent on mitigation measures contained in a separate “conservation action plan” that would be carried out by Ruby.  The mitigation measures were developed by Ruby through negotiation with the Fish and Wildlife Service (FWS), the wildlife agency tasked by the Endangered Species Act (ESA) with reviewing the proposed project.  Continue reading “9th Circuit Ruling Is Critical Reminder to Pipeline Project Participants”

Annual Meeting Holdup: Securities Class Action Lawyers’ Latest Scheme

Cross-posted at WLF contributor site

You’re a publicly traded company, and it’s a week before your annual meeting.  The SEC had no objections to your proxy statement, and it’s been sent to shareholders. Your focus should be on final meeting details, but instead, you are working with your lawyers to fend off a class action lawsuit which threatens to forestall the meeting.

This is not a bad dream, but an awake nightmare that an increasing number of public companies are facing. It’s the latest securities class action lawsuit “innovation” — just before an annual meeting, allege that a company’s proxy statements omit “material” information and thus violate general state-law duties to disclose; demand trivial changes to the proxy and high-six-figure fees; and stalk your next victim.

As leading securities defense litigator Bruce Vanyo noted at D&O Diary, at least 20 companies have faced such suits this year, with most claims involving advisory “say on pay” votes and votes on other compensation issues such as stock purchases. The suits are a mutation of disclosure-oriented class actions that are routinely filed against companies going through mergers or acquisitions. These new proxy challenges are of the cookie-cutter ilk common in securities class actions, with the same law firm and often the same investor acting as the lead plaintiff. Continue reading “Annual Meeting Holdup: Securities Class Action Lawyers’ Latest Scheme”

Federal Court Rulings Reflect a “Commercial Speech” Doctrine in Need of Recalibration

Cross-posted at on WLF’s contributor site

In the past month, two different federal circuits held that Seattle’s Yellow Pages are noncommercial speech (Dex Media West v. Seattle) and a Texas trial lawyer’s website address is (probably) commercial speech (Gibson v. Tex. Dept. of Ins.). These divergent rulings, and the differing level of First Amendment protection they impose, reinforce Washington Legal Foundation’s long-held opinion that the U.S. Supreme Court must reconsider its “commercial speech doctrine.” Below, we offer some thoughts on a different approach.

Line Drawing. U.S. Supreme Court precedent requires judges to draw lines around speech when analyzing government restrictions. Court rulings in 1976 and 1980 determined that speech which does “no more than propose a commercial transaction” is entitled to less First Amendment protection than “pure” political speech. Some communications, such as advertisements, obviously fit on the “commercial” side of the line. But other speech isn’t so easily categorized, leading to needlessly convoluted judicial review which can silence or chill valuable speech.

What are the Yellow Pages? For instance, in Dex Media West, the Ninth Circuit had to categorize Seattle’s Yellow Pages, the distribution of which the city wanted to curtail for environmental reasons. Common sense may dictate that the Yellow Pages are quintessentially commercial. But the circuit court concluded that the existence of some noncommercial information – maps, individuals’ phone numbers, government office locations – in the Yellow Pages rendered the entire volume noncommercial. Continue reading “Federal Court Rulings Reflect a “Commercial Speech” Doctrine in Need of Recalibration”

Update: U.S DOJ & California Pursue Antitrust Claim vs. eBay on “Anti-Poaching” Agreement

In separate Legal Pulse posts last February and April, we noted developments in a private antitrust class action lawsuit, In re: High-Tech Employee Antitrust Suit. The suit piggybacked on a settlement the U.S. Department of Justice had reached with a number of companies who had entered into an agreement to avoid “poaching” each other’s engineering employees.

While that private suit advances towards trial, reports this past Friday indicated that DOJ and the California Attorney General have filed complaints against eBay for having an anti-poaching agreement with Intuit. Intuit was not named as a party to the complaints, according to DOJ, because it was one of the five companies to enter into the settlement in 2011. According to a Reuters story, the eBay complaint arose out of the earlier investigation which led to charges against Intuit.

One would expect a follow-on class action lawsuit against eBay (whose path to trial has been made easier by the April ruling in In re: High-Tech Employee) to be filed any day.

Arbitration Round Up: Some Courts Still Won’t Respect Voluntary Contracts

Cross-posted at WLF’s contributor site

Despite the Supreme Court’s recent affirmation that arbitration agreements must be enforced by their terms (AT&T Mobility v. Concepcion), some courts continue to go to great lengths to avoid them.  Take for instance the California Court of Appeal that recently held an arbitration agreement unenforceable because it wasn’t signed, despite that the employee was herself tasked with obtaining signed arbitration agreements from the other employees, she represented to the company that she had signed it, and the company had required she sign it as a condition of her employment.

Of course, the National Labor Relations Board (NLRB) made it easier for judges to flout the Supreme Court’s decision in Concepcion when it ruled in D. R. Horton Inc. that to include a mandatory class arbitration waiver in an employment agreement is to commit an unfair labor practice, as it violates the employees’ right to engage in “concerted activities for the purpose of collective bargaining or other mutual aid or protection..”.  Continue reading “Arbitration Round Up: Some Courts Still Won’t Respect Voluntary Contracts”

From Denmark to California, Diet Engineering by Sin Tax Fails

Cross-posted at WLF’s contributor site

It’s been a rough week for activists and government officials who support tax increases as a way to engineer “better” dietary choices. First, two California towns rejected increases in soda taxes by wide margins on Election Day. And then on November 10, the government of Denmark announced that it was repealing its sin tax on saturated fat and dropping plans for a tax on sugar. The Danish tax had been widely touted as a model for other nations.

The Danish government should be applauded for listening to its consumers and businesses, and for accepting economic realities. The tax on such dietary staples as butter, cream, oil, and cheese not only forced many Danes to purchase lower quality goods from neighboring nations, it also created an administrative nightmare for businesses, reportedly leading to 1,300 lost jobs. The Danish tax ministry conceded that the taxes had not altered citizens’ eating habits and “may be counterproductive at worst.”

We’re not seeing such refreshing candor and acceptance from government officials and their nanny state activists allies in the wake of the votes in California, however. Rather than finding more productive, less intrusive ways to battle obesity, sin tax proponents are busy whining about being outspent in the Richmond and El Monte tax campaigns and plotting ways to introduce soda tax initiatives in more localities and forcing simultaneous votes.

Developments such as those in Denmark, and respected studies showing that sin taxes must be imposed at level of at least 20% to impact obesity, won’t dissuade truly committed food nannies. Activists like The New York TimesMark Bittman will continue to believe: “I can’t think of a better way of reducing sugar consumption than a tax.”

We, on the other hand, can’t think of a better way to turn economically struggling Americans against their self-appointed consumer advocates than an increase in prices of the foods we choose and enjoy by 20% or more.