NEWS & INSIGHTS

How intellectual property lawsuits get resolved can be critically important to the parties to those lawsuits. The right to sell an allegedly infringing product or service; the price for that product or service; sometimes the very existence of the company: All can be at stake in an intellectual property case. But our judicial system generally leaves the outcome of these highly technical, complex disputes to randomly selected strangers — jurors, who may or may not have the appropriate technical and financial background correctly to understand, let alone correctly resolve, the issues in an intellectual property case.

On April 24, a bipartisan group led by Sen. Chris Coons, D-Del., introduced a bill intended to permit renewable energy projects to use a master limited partnership (MLP) structure currently available to nonrenewable projects. The proposed MLP Parity Act is a revision of a bill introduced by Coons and co-sponsors in the prior Congress.

Appellate briefs were recently filed in the case of U.S. v. AU Optronics Corporation pending before the United States Court of Appeals for the Ninth Circuit, which raise issues of critical importance in the prosecution of foreign cartel cases in the U.S.: (1) whether Section 1 of the Sherman Act applies extraterritorially to price-fixing meetings that occurred outside of the United States; and, if so, under what circumstances; and (2) in criminal cases involving foreign price-fixing activities, should the “rule of reason” apply, or should the per se rule apply? The resolution of these issues could have a major impact on a number of current U.S. Department of Justice investigations and in civil cases involving international cartels.

Maja C. Eaton is a global coordinator for the products liability and mass torts practice at Sidley Austin LLP, and the firmwide co-chairwoman of the committee for the retention and promotion of women. She has defended and tried products liability cases ranging from the defense of toxic tort litigation to cases and mass tort litigation involving pharmaceutical drugs and medical devices. Eaton has experience in the development of trial themes, expert witnesses and company defenses involving scientific and medical disciplines.

For pioneering biopharmaceutical companies, the ability to exclude a generic competitor from the marketplace is vital. The post-stay entry of a generic often permanently destroys the market pricing on which the pioneering company depends to recoup investment, provide appropriate reward for risk, and provide the funds for further research and development of new biopharmaceutical products.

The waste recycling sector has grown in recent years and an increasingly large number of companies from various sectors are tapping into its potential. As the economic importance of waste recycling grows, so does the likelihood of scrutiny from competition regulators. Inspections, inquiries and infringement proceedings have taken place in at least nine different member states.

In this issue we have a range of articles and perspectives on how interim measures can work in antitrust proceedings. Here, the author would like briefly to look at the simple fundamental question of whether the European Commission should be making more use of the powers it has in this field.

The Foreign Corrupt Practices Act (“FCPA”) was adopted in 1977 in the wake of revelations of bribery of foreign officials by United States companies. Those triggering events concerned allegations or admissions of companies making questionable payments directly or indirectly to traditional foreign government officials – Prime Minister, Prince, President, among others – or foreign political parties. From the FCPA’s passage in 1977 until roughly 2000, enforcement remained relatively dormant. Then, in the early 2000’s, the Department of Justice (“DOJ”) dusted off the statute and embarked on a campaign to root out international corruption, commencing a trend of increasing FCPA prosecutions. Around 2008, the DOJ began targeting the individual actors who allegedly authorized and/or paid the bribes. As the DOJ’s chief FCPA prosecutor reflected in September 2008, “The number of individual prosecutions has risen – and that’s not an accident. That is quite intentional on the part of the Department. It is our view that to have a credible deterrent effect, people have to go to jail. People have to be prosecuted where appropriate. This is a federal crime. This is not fun and games.”

Sidley lawyers wrote four of the chapters in this year's edition of "Getting the Deal Through — Vertical Agreements," a book recently published by Global Competition Review. The book is intended for in-house counsel and provides an overview of antitrust regulation of distribution arrangements in 36 jurisdictions worldwide.

Oceans of ink have been spilled in recent years on the exponential growth of electronically stored information in society and the corresponding impact that growth has had on discovery costs in litigation. All stakeholders in the litigation process—but especially those who find themselves frequently on the responding side of discovery— are looking for ways to harness those costs that are defensible and do not compromise the essential truth-seeking function on which our civil justice system is based. This is no easy task, as the truthseeking function in the United States is believed best to be served by allowing broad discovery of all matters potentially relevant to the claims and defenses in each case. And in a world where an estimated 89 billion business emails are sent each day, and large organizations are increasingly seeing their data stores break the petabyte barrier,“broad discovery” even in cases with relatively narrow facts and modest stakes can quickly encompass document counts in the tens or hundreds of thousands, or much more.

In laudable efforts to increase its output, the European Commission has developed three tools—leniency, settlements, and commitments—to help it discover infringements of EU competition law, to help it prove those infringements, and to help it bring cases to a speedy conclusion. Although these tools encourage cooperation and do reduce the resources needed to resolve cases, they also lack coherence and to some extent the Commission has needlessly tied its own hands. In some cases—even where parties are willing to cooperate—the Commission’s own procedures render it incapable of concluding cases quickly. This becomes most evident in cases with an international dimension where regulators in other jurisdictions can wrap up their own investigations of the same issues several years before the Commission.

Scott D. Andersen co-manages Sidley Austin LLP’s Geneva office. He litigates World Trade Organization disputes concerning agricultural and industrial actionable and prohibited subsidies, anti-dumping and countervailing duty orders, sanitary and phytosanitary measures, technical regulations and standards, and various forms of discrimination. In addition, he is currently managing a major new firmwide pro bono project providing legal assistance relating to trade, finance, investment, intellectual property and other business-related issues to small African and Asian agribusinesses.

John Treece is a partner in Sidley Austin LLP's Chicago office. His practice focuses on antitrust, patent, the intersection between antitrust and patent law, and general commercial litigation. He began his legal career in 1978 at the Chicago law firm of Isham Lincoln & Beale, and moved to Sidley as a partner in 1988. He is now a global coordinator of the firm's antitrust and competition practice and head of the Chicago office's commercial, competition and securities litigation group.

M. Patricia Thayer is a partner in Sidley Austin LLP's San Francisco office. She is the global coordinator of the firm's Intellectual Property Litigation group. For more than three decades, she has represented biotechnology, medical device, software, hardware and consumer retail companies in district court litigation and arbitration. She has tried IP cases in the Northern, Southern and Eastern Districts of California and the Western District of Wisconsin, and before the American Arbitration Association.

Stephen Kinsella is partner and head of the European antitrust group at Sidley Austin LLP, based in the Brussels office. He has almost 30 years experience of advising clients on all aspects of EU competition law with particular focus on cases in the media, technology and pharmaceutical sectors. He is past chairman of antitrust committees of the International Bar Association and the American Bar Association. In 2002, he was awarded an OBE by the Her Majesty the Queen of England for services to British commercial interests in Belgium.

Andrew W. Shoyer is a partner in Sidley Austin LLP's Washington, D.C., office. He chairs the firm's international trade and dispute resolution practice. Previously he spent seven years at the Office of the U.S. Trade Representative and with the World Trade Organization. He focuses his practice on the implementation and enforcement of international trade and investment agreements, regularly advising companies, trade associations and governments on the use of WTO, the North American Free Trade Agreement and other treaty-based trade and investment rules to open markets and resolve disputes. He also works with manufacturers and service providers on WTO compliance and on protection of intellectual property in bilateral and regional free trade negotiations.

Kimberly A. Dunne co-chairs Sidley Austin LLP's White Collar: Government Litigation and Investigations practice in Los Angeles. Her practice ranges from proactive compliance counseling and risk assessments, internal investigations, defense of criminal and civil False Claims Act investigations, to trials. She helps corporate and individual clients to navigate highly regulated industries such as health care, defense, and the financial arena. Prior to joining the firm, Dunne was chief of the Public Corruption and Government Fraud Section of the United States Attorney’s Office in the Central District of California.

Roger R. Martella Jr. is a partner in the environmental practice group at Sidley Austin LLP. He rejoined Sidley Austin after serving as the general counsel of the United States Environmental Protection Agency, concluding 10 years of litigating and handling complex environmental and natural resource matters at the U.S. Department of Justice and EPA. Martella advises companies on developing strategic approaches to achieve their goals in light of rapidly developing demands to address climate change, promote sustainability and utilize clean energy, and advises multinational companies on compliance with environmental laws in the United States, China, the European Union and other nations.

Joseph R. Guerra is a partner in Sidley Austin LLP's Washington, D.C., office and co-chairman of the firm's Appellate practice. Formerly a principal deputy associate attorney general for the U.S. Department of Justice, he focuses his practice on traditional appellate representation and on law-intensive, trial-level litigation, raising novel and often complex questions of federal or state law.

Jennifer Zargarof is a partner in Sidley Austin LLP's Los Angeles office. She is the global coordinator of the firm's Labor, Employment and Immigration group. Zargarof defends companies in wage and hour, discrimination, wrongful termination and other employment-related matters. She also counsels employers on the personnel policies and procedures and has trial experience before state and federal courts and in arbitration.

In December 2012 the Environmental Protection Agency (EPA) issued two new guidance documents on the use of institutional controls at contaminated sites regulated under the Comprehensive Environmental Response, Compensation and Liability Act, the Resource Conservation and Recovery Act, brownfields programmes and other federal programmes.

The long-awaited proposed rule to implement the "essential health benefits" provisions of the Affordable Care Act was published in late November 2012 with public comments due the day after Christmas. Even before the U.S. Department of Health and Human Services released this proposal, some states proceeded with their own proposals for implementing the required essential health benefits package for their states’ plans and exchanges.

In the “On the Spot” section of the February 2013 of Drillers and Dealers, Sidley partners Jim Rice and Cliff Vrielink were asked “What excites you most about the independent oil and gas sector in 2013 and what risks will present the greatest obstacles to growth?” Read their response here.

In December 2012 the Environmental Protection Agency (EPA) focused on finalising various priorities:

• Hydraulic fracturing progress report released;
• Boiler MACT final rule issued; and
• Portland cement MACT finalized.

Always on the look-out to raise the stakes, patent holders are becoming increasingly creative in seeking damages for sales outside the U.S. of products that are alleged to infringe U.S. patents. Particularly over the last decade, these efforts may be linked to the continued shift to overseas manufacturing by the majority of companies, particularly in the technology space, and the increased proportion of global sales for technology products that now occur outside the U.S.

Some practitioners and academics perceive a growing trend in patent infringement suits brought by patent assertion entities (“PAEs”) in the U.S. International Trade Commission. For example, in 2012, Colleen Chien, a professor at the Santa Clara University School of Law testified before the House Subcommittee on the Judiciary that “PAEs and product-producing companies alike have flocked to this once-obscure trade agency.” She also noted that today “nearly every patentee is a potential ITC complainant and nearly every patent defendant is a potential ITC respondent.” While to say that there is a dramatic shift would be an overstatement, some statistics do seem to suggest a moderate shift. For example, in the ITC, PAEs initiated five investigations against 18 respondents in 2010, 16 investigations against 140 respondents in 2011, and 12 investigations against 88 respondents from January through Oct. 10 of 2012. What may be motivating this perceived strategic shift in venue? This article examines some of the factors that may be contributing to PAEs favoring actions in the ITC rather than in district court.

Two Republican bicameral lawmakers – including Senator David Vitter, the likely incoming senior Republican on the Environment and Public Works Committee – have indicated that they will introduce and advance a concurrent resolution that would express the sense of Congress that a carbon tax is not in the best interest of the United States.

Authors Kristin Graham Koehler and Brian P. Morrissey say that creating a compliance program that conforms to the Sentencing Guidelines mandate can be a complicated task for companies in the retail industry who are required to comply with dozens of federal regulatory regimes enforced by numerous federal agencies. But the benefits are impressive, including cutting the likelihood that the company will ever face criminal liability and significantly reducing any penalties if a case is brought.

In 2012, the government recovered $4.9 billion from False Claims Act cases, a record $1.35 billion in criminal fines during the Antitrust Division’s 2012 fiscal year, and nearly $250 million in Foreign Corrupt Practices Act matters, down from over $1 billion in 2010. The U.S. Securities and Exchange Commission also recently released its annual enforcement statistics for 2012, touting recoveries exceeding $3 billion in penalties and disgorgement, an 11-percent increase from 2011. And these numbers do not include the myriad of other white collar enforcement actions!

With discussions of the fiscal cliff looming in the public’s mind, there is little doubt that visions of significant financial recoveries will be alluring to many government agencies this holiday season. To support its financial wish list, this article address five areas of focus that are likely to top the white collar enforcement agenda in 2013.

On December 3, 2012, in a widely anticipated ruling, the US Court of Appeals for the Second Circuit reversed the conviction of pharmaceutical sales representative Alfred Caronia for misbranding under the Federal Food, Drug and Cosmetic Act, based on alleged off-label promotion.

On November 16 2012 the Environmental Protection Agency (EPA) posted the PCB Bulk Product Waste Reinterpretation on the website. The reinterpretation addresses the regulatory status of building debris that has been in contact with non-liquid polychlorinated biphenyls (PCBs), such as PCB-containing caulk and paint. The reinterpretation was published in the context of increased awareness of the presence of PCB-containing caulk, sealants, paint and other materials in public and commercial buildings that were constructed between World War II and the mid-1970s. The EPA asserts that the presence of PCB-containing material in or on a building is an "unauthorized use" of PCBs.

On November 16 2012, as President Obama was preparing to head to Asia on a trip that included a six-hour stop in Burma, the US Departments of State and Treasury announced the issuance of a new general licence that waives a nearly decade-old US import ban on most Burmese-origin goods. The move represents the latest step in a process of targeted easing first proposed by Secretary of State Hillary Clinton in April 2012. On July 11 2012 the administration eased restrictions on new investment in Burma and on the exportation of financial services to Burma. Clinton committed to lifting the import ban in September, following visits to the United States by Nobel Peace Prize Laureate Aung San Suu Kyi and Burma's President Thein Sein.

There is no doubt that executives of pharmaceutical and medical device manufacturers face increasing risk of personal criminal liability and exclusion from the Federal health care programs should their companies run afoul of Federal health care laws—even if they personally have done nothing wrong. In recent years, the United States Department of Justice has increasingly threatened to prosecute individual corporate executives of companies that violate the Food, Drug & Cosmetic Act under the Responsible Corporate Officer (‘‘RCO’’) doctrine, which holds that ‘‘responsible’’ senior executives can be held criminally liable if they fail to prevent certain corporate criminal conduct. On a parallel track, the Department of Health and Human Services’ Office of Inspector General has threatened to exclude individual corporate officers in various circumstances simply because of their status and without proof of individual culpability. The severity and persistency of this risk is such that earlier this year at least one insurance company began offering policies that will cover the defense costs related to RCO prosecutions and administrative debarment/exclusion proceedings to companies in the health care and life science sectors. The availability of a commercial insurance product of this type reflects market recognition of the continued and ongoing risks faced by individual executives in light of the Government’s enforcement priorities.

Congress created the United States Court of Appeals for the Federal Circuit in 1982 to bring greater uniformity to certain areas of federal jurisdiction including, importantly, the patent law. In 2009, then-Chief Judge Paul Michel observed in an oral argument that, notwithstanding the 30-year lapse, the Federal Circuit’s decisions “are apparently lacking in clarity and unhelpful to reasonable royalty calculations” and that “[i]t’s kind of amazing, that since patent cases are heavily about damages, that at this late date, ... there still seems to be massive unclarity about how reasonable royalty damages are to be calculated.

In recent years, the European Commission has shown considerable reluctance to use its power to award interim measures in competition cases. Stephen Kinsella examines this issue and the impact it has on competition cases.