Devoted to Corporate Attorneys, Corporate Lawyers, and Corporate Counsel

Lots to report on the IP front:

• U.S. Under Secretary of Commerce for Intellectual Property Jon Dudas and U.S. Representative Darrell Issa (CA-49) yesterday addressed a group of California small business owners at a conference. Under Secretary Dudas and Representative Issa warned the small business community "that they are increasingly at risk of overseas intellectual property theft -- even if they do not export." Read the press release, U.S. Government Brings Anti-Counterfeiting and Piracy Program to Southern California, for more information.

• William F. ("Bill") Heinze of I/P Updates reports on a discussion by a panel of international experts in his post, Asian Licensing Negotiating Tips. The panelists, hosted by the Licensing Executives Society, offered tips and advice. Read Bill's post for the details.

• The Electronic Frontier Foundation announced the filing of an amicus brief in a suit brought by major record labels against an individual for file-sharing. The brief focuses on the decision by the labels to sue "file-sharers for infringing both the reproduction right (for downloading) and the distribution right (for uploading)," arguing "P2P file sharing does not infringe a copyright owner's 'distribution right.'" Read Transmission + Reproduction != Distribution for more.

• The US Patent & Trademark Office announced a rule change affecting reexamination proceedings. Read Patently-O's post, PTO Rule Change: Reexamination Filing Date, for the details.

• William Patry of The Patry Copyright Blog reports on a copyright infringement case involving the insurance industry. Read Insurance Policies for William's take on American Family Life Insur. Co. of Columbus v. Assurant Inc., a district court opinion holding that defendants could not copy plaintiff's insurance policies verbatim.

The Supreme Court issued a much anticipated opinion in Texaco Inc. v. Dagher, a case challenging the pricing practices of a joint venture among oil companies. Shell Oil and Texaco formed a joint venture, Equilon Enterprises, to refine and sell gasoline in the western US under the two companies' original brand names. When Equilon set the price for both brand names, Texaco and Shell Oil service stations sued and alleged per se unlawful price fixing.

The district court granted summary judgment in favor of Texaco and Shell Oil. It held that the rule of reason, not the per se rule, applied. As the plaintiffs failed to assert a rule of reason claim in their complaint, they could not possibly win. The Ninth Circuit reversed, holding that Equilon's pricing decision was a per se unlawful price-fixing agreement between two competitors.

Much to the relief of businesses everywhere, the Supreme Court unanimously reversed. It held that a lawful, economically integrated joint venture obviously must be able to set prices for its own products. Duh.

It's been busy. The court has issued three precedential opinions in the last five days. They are:

• M. Eagles Tool Warehouse, Inc. v. Fisher Tooling Co., Inc.: The Federal Circuit reversed the grant of summary judgment in favor of M. Eagles, holding that "there was no clear and convincing evidence demonstrating an intent to engage in inequitable conduct" by Fisher Tooling. For more on this case, read CAFC: Gross Negligence Does Not Constitute Inequitable Conduct.

• Smithkline Beecham Corp. v. Apotex Corp.: The court affirmed the trial court's decision to award summary judgment in favor of Apotex, agreeing that an earlier patent anticipated the one at issue in the case. For an analysis of this case, read Earlier Patent on Paxil Anticipated Product by Process Claims for Making Paxil.

• Lawman Armor Corp. v. Winner Int'l, LLC: The court upheld a finding of no infringement by the lower court "because each of the alleged 'points of novelty' of the patented design was disclosed in the prior art." The appellate court rejected the patentee's contention that the combination "of the many non-novel 'points of novelty' itself was an additional 'point of novelty.'" For more on this case, read Design Patent Fails Point of Novelty Test, and Combination of Visual Elements from Prior Art Does Not Create New Point of Novelty for Design Patent.

• ProfessorBainbridge.com's post, SOX Relief, and Truth on the Market's post,  Can the SEC Exempt Small Companies from Sarbanes-Oxley 404? (Part 2), both address the SEC's draft report regarding the application of Sarbanes-Oxley to smaller companies;
• TheCorporateCounsel.net Blog's post, FEI's Staff Notes from the PCAOB's SAG Meeting: Auditor Liability Limits, offers detailed notes taken by Financial Executives International staff at the PCAOB's Standing Advisory Group February 9th meeting;
• ISS Corporate Governance Blog's post, 2006 Preview: Continental Europe, offers a detailed outlook of corporate governance issues expected to be addressed in Europe during this proxy season.
• Read the WSJ.com's Law Blog's post, Symbol Technology Trial: Was the Mistrial a Mistrial?, and ISS Securities Litigation Watch's post, Why Didn't You Tell Me I Was Acquitted? You Never Asked!, for some bizarre news related to a criminal trial involving Symbol Technology executives.
  

No matter how near or far, the SEC will get you. Today, the agency announced a settled action against NetEase.com, Inc. and two of its former officers. All three are based in China. The government's complaint states: 

The complaint includes details on the techniques used by NetEase to improperly inflate revenues. Included in NetEase's bag of tricks: artificially bifurcating advertising contracts to inflate revenues.

Wal-Mart has a champion: The Retail Industry Leaders Association (RILA). According to this article, Retail Group Sues to Block Laws Targeting Wal-Mart, RILA filed two lawsuits in US District Courts in Baltimore and Brooklyn challenging statutes passed in Maryland and Suffolk County, New York that require Wal-Mart "to spend more on employee health care." A RILA press release asserts the statutes "target specific companies, and require them to pay a special health care payroll assessment."

The Maryland complaint challenges the Fair Share Health Care Fund Act. This statute requires companies with 10,000 or more employees to spend "on employee health insurance for their Maryland employees [] at least 8 per cent of the 'total compensation' they provide Maryland employees." Companies failing to make the requisite expenditures must pay a mandatory civil penalty of $250,000.

Citing numerous press reports, RILA alleges the statute was passed initially to target Wal-Mart because the retail giant is only one of four private employers having 10,000 or more employees in Maryland and is the only such employer "expected to be required to make additional payments--either to health care costs or to the State--as a result of the Act." According to the complaint, the statute violates both the Equal Protection Clause of the US Constitution and the Employee Retirement Income Security Act of 1974 (ERISA).

The US Supreme Court heard oral arguments on February 21, 2006 in Rapanos v. United States and Carabell v. US Army Corps of Engineers, which arise under the Clean Water Act. In both cases, developers seeking to develop wetlands next to tributaries of navigable waterways challenge federal regulations that bar development of "adjacent wetlands." They argue that the regulations violate the Clean Water Act and exceed the scope of Congressional authority under the US Constitution.

After the oral argument, the Environmental Law Institute co-hosted a panel discussion with two Georgetown Law Center institutes. C-SPAN broadcast the event. A video is available on-line here.

While you're over at C-SPAN's website, you might want to check out this video of a press conference also held on February 21. The League of Conservation Voters 2005 National Environmental Scorecard.

Today, US District Judge James R. Spencer heard oral arguments on NTP Inc. v. Research in Motion Ltd. (RIM). In this patent infringement case, NTP successfully argued that RIM, the maker of the BlackBerry wireless e-mail service, infringed on its patents and now the issue is whether NTP is entitled to a permanent injunction against RIM. According to this AP report, Judge Ends BlackBerry Hearing; No Decision, the Judge Spencer ended the hearing without issuing a decision and apparently without giving a hint of how he might rule. Those interested in following this case also should read:

• "Judge Hears Arguments in Blackberry Case" at How Appealing

• Judge hears arguments on BlackBerry's fate at Reuter's.com

• As court case looms, RIM and NTP fight war of words at Computerworld

The Securities and Exchange Commission (SEC) today announced a settlement agreement with four KPMG LLP partners responsible for auditing the financial statements of Xerox Corporation when Xerox allegedly was engaged in a fraudulent scheme to manipulate its earnings statements. Three partners will pay the largest civil penalties ever imposed against an individual auditor: two will each pay $150,000, the other will pay $100,000. The three partners also agreed to permanent injunctions and suspensions from practice before the SEC. The fourth partner agreed to be censured. More details are available in Litigation Release No. 19573.

On the trade regulation front, the Federal Trade Commission (FTC), the Better Business Bureau Serving Metropolitan New York, and the Consumer Affairs Committee of the New York City Bar announced a workshop on complying with truth-in-advertising laws. The workshop will be held on Thursday, April 27, 2006.

Finally, the Criminal Division of the US Department of Justice announced a deferred prosecution agreement with the Williams Power Company (WPC) in connection with commodities trading. WPC admitted to knowingly submitting inaccurate reports related to natural gas trades for its own benefit. These reports, provided to industry publications, were used by natural gas traders to price and settle physical and over-the-counter financial derivative natural gas transactions. WPC will pay a $50 million penalty.

American CEOs make a lot of money. That's been true for a long time--a very long time--so why has this become such a hot-button issue? Is it because American executives are lazy? Not so, suggests Gordon Smith of the Conglomerate Blog: Business, Law, Economics & Society Blog. Read his post, Lazy CEOs, commenting on a Wall Street Journal article and taking issue with the notion that American CEOs "just show up and don't do anything but reap rich rewards."

Let's say laziness isn't the problem. What explains the outrage over executive compensation? Articles like a 'Holy Cow' Moment in Payland' (paid subscription required) by New York Times columnist, Gretchen Morgenson, might shed some light on this question. The article discusses an Analog Devices proxy statement in which the company disclosed that its CEO received $145 million in deferred compensation last year. That'll get the tongues wagging, won't it?

Do journalists do the public any favors by writing articles like this? Should companies have to disclose this kind of information at all? For two very different points of view on these questions, check out Broc Romanec's post, A 'Holy Cow' Moment for Analog Device's Deferred Compensation Practices, at the  TheCorporateCounsel.net Blog, and Geoffrey Manne's post, On disclosure: Hands-tying, at Truth on the Market.

Talk about a busy day for employment and labor lawyers! Workplace Prof Blog discusses how the Supreme Court's newly released opinion in Buckeye Check Cashing, Inc. v. Cardegna, a case addressing arbitration clauses, might affect employment arbitration agreements. For a thoughtful and thorough analysis, read Professor Richard Bales' post, Buckeye, Separability, and Employment Arbitration Agreements.

For another great read, take a look at Howard Bashman's How Appealing blog. Howard has a report on a New York court decision holding "illegal aliens can recover lost wages." The post includes a link to the decision.

Finally, SCOTUSblog has a post about an employment discrimination opinion released today by the Supreme Court. It is a per curiam opinion in Ash v. Tyson Foods, Inc. In this opinion, the Court takes issue with the standard applied by the Eleventh Circuit when deciding whether an employer's proffered justification for its hiring decisions is pretextual. The Supreme Court wasn't too keen on the Eleventh Circuit's you know it's a pretext when the disparity in the qualifications of the favored and disfavored employee "is so apparent as virtually to jump off the page and slap you in the face" standard. Gee, what a surprise.