Why wasn’t Epic v. Apple a jury trial like Epic v. Google? | 11/1/24

Epic’s antitrust cases against each of Apple and Google resulted in arguably inconsistent outcomes.  In both, Epic challenged app-store commission fees and in-app payment requirements as anticompetitive.  After a bench trial in Epic v. Apple, the district court largely ruled against Epic on its core antitrust claims, finding that, even if Apple’s practices were anticompetitive, Epic had not successfully demonstrated a viable, less restrictive alternative to achieve the pro-competitive justifications for Apple’s practices (e.g., security justifications).  The Ninth Circuit affirmed.  But in Epic v. Google, a jury found Google’s similar restrictions to violate the antitrust laws.

It’s notable that only the Apple case was tried to a jury: Both of Epic’s cases against Apple and Google started as a preliminary injunction complaint for purely equitable relief (so no jury trial right attached).  Both Apple and Google responded by filing contract-based counterclaims for damages and requesting a jury trial on those.  But in the Apple case, Apple subsequently withdrew that jury trial request with Epic’s consent.  See Dkt. 105 (Case No. 4:20-cv-05640) (“Epic and Apple have met and conferred, and the parties agree that Epic’s claims and Apple’s counterclaims should be tried by the Court, and not by a jury.”).  Epic’s Google case, however, was initially set to be tried concurrently with Match Group’s similar case against Google that included a request for damages.  The damages request entitled Match to a jury, but Match settled its case with Google shortly before trial.  Google never withdrew its contract-based counterclaims or its request for a jury trial.  Nonetheless, in a statement to the court on the eve of jury selection, Google requested that its contract-based claims be tried to a jury first, followed by a bench trial on the antitrust claims.  See Dkt. 499 (Case No. 3:20-cv-05671). The court denied that request, leaving Epic able to successfully present its antitrust case to the jury largely due to happenstance.

The right to tell a tale | 10/15/25

In today’s world of intricate, jargon-heavy litigation, it’s refreshing to come across a circuit court opinion sustaining the importance of storytelling at trial. In In re Diet Drugs Prods Liability Litigation, 369 F.3d 293 (3d Cir. 2004), the Third Circuit nicely summed up why a trial must be more than the rote presentation of evidence:

A trial is more than a matter of presenting a series of individual fact questions in arid fashion to a jury.  The jury properly weighs fact questions in the context of a coherent picture of the way the world works.  A verdict is not merely the sum of individual findings, but the assembly of those findings into that picture of the truth.  As the Supreme Court instructed in Old Chief v. United States, evidence “has force beyond any linear scheme of reasoning, and as its pieces come together a narrative gains momentum, with power not only to support conclusions but to sustain the willingness of jurors to draw the inferences, whatever they may be, necessary to reach an honest verdict.” 519 U.S. 172, (1997).  Unduly sterilizing a party’s trial presentation can unfairly hamper her ability to shape a compelling and coherent exposition of the facts.

Id. at 314.

Litigation funding documents are non-discoverable work-product | 10/1/24

J. Bibas of the Third Circuit, sitting by designation in the District of Delaware, recently denied a motion to compel litigation funding documents, concisely summarizing the relevant scope of the work-product doctrine:

[W]hatever work product’s precise scope, it includes [litigation funding documents].  They are confidential documents created by lawyers to evaluate the strengths, weaknesses, and strategy of an impending lawsuit. While those documents informed an investment decision, they did so by evaluating whether a lawsuit had merit and what damages it might recover. That is legal analysis done for a legal purpose.

See Design with Friends, Inc. v. Target Corp., No. 1:21-cv-01376-SB, 2024 WL 4333114 (D. Del. Sept. 27, 2024).

The court held that the the litigation funder—both before and after diligencing the matter—was the plaintiff’s representative for work-product purposes, and further underscored the flexibility of the work-product doctrine:

The final question is whether Validity created these documents as Design’s repre- sentative. The records cover two periods: before and after Validity agreed to fund the suit. In both periods, this element is met. . . . Work-product doctrine is “intensely practical ..., grounded in the realities of litigation in our adversary system.” Nobles, 422 U.S. at 238. In litigation finance, one of those realities is that financiers need to evaluate the strength of a case before agreeing to fund it.

Id.

Jarkesy 7th Amendment decision changes nothing for commercial civil disputes | July 28, 2024

The Supreme Court’s SEC v. Jarkesy decision held that when the SEC seeks civil penalties against a defendant for securities fraud, the Seventh Amendment entitles that defendant to a jury trial. This was based on a straightforward application of Granfinanciera, S. A. v. Nordberg, 492 U.S. 33 (1989), and Tull v. United States, 481 U.S. 412 (1987). Though civil litigants will likely cite the Chief Justice’s summary of the history and importance of the Seventh Amendment, the Court said nothing about what its decision means for civil cases not brought by the Government. The decision will undoubtedly be a sea change for Government attorneys enforcing civil penalty schemes against regulated parties (think FTC, CFTC, FDA, etc.). But for the rest of us, the decision gives lower courts no more or less room to deprive litigants of their jury trial rights.

Live Nation doesn’t like its venue | July 25, 2024

The DOJ and various state AGs filed their antitrust case against Live Nation in SDNY, seeking to unwind  its merger with Ticketmaster.  Today, Live Nation moved to transfer the case to D.C., arguing that the initial merger of Live Nation and Ticketmaster is subject to a 2020 consent decree that “includes a mandatory forum selection clause designating the D.C. Court as the forum for legal actions.”  Additionally, it argues that the suit will generally be more conveniently litigated there.  But the consent decree doesn’t suggest venue is exclusively proper in DC (see Section XIV.), and it’s unclear if the current suit is a dispute over the application of the decree.  Plus, Live Nation and Ticketmaster are both headquartered in California (where most relevant witnesses and documents presumably are), so it’s tough to see why DC makes any more sense than NY (where the defendants have offices), and why Live Nation overlooks CA as a more convenient venue.

So why seek to transfer at all?  The judge overseeing the Live Nation case is Judge Arun Subramanian, a former plaintiff-side antitrust litigator coming from a law firm that has a history of bringing (and winning) major antitrust suits.  So it’s not a stretch to assume that Live Nation isn't anticipating a favorable reception from J. Subramanian as the case unfolds, and DC is where it has the best chance of getting a more sympathetic judge who oversaw the finalization of the consent decree. 

Moelis stirs Delaware | July 18, 2024

On February 23, 2024, Vice Chancellor Laster issued a decision finding parts of an agreement between Moelis & Co. facially invalid. See West Palm Beach Firefighters’ Pension Fund v. Moelis & Co., C.A. No. 2023-0309-JTL (Del. Ch. Feb. 22, 2024).  

The stockholders had challenged the agreement between the investment bank and Ken Moelis, the bank’s founder.  Stockholders argued that certain provisions of the agreement were invalid under DGCL § 141 because the provisions granted Moelis extensive control over the company's governance (unbeknownst to most stockholder).  The control included certain pre-approval provisions giving Moelis the authority to limit the board's size, the designees on the board and its committees, and various other provisions to maintain his influence over the board.  Moelis & Co. argued that the stockholder agreement was based on market practice and otherwise valid.  VC Laster disagreed, concluding that “When market practice meets a statute, the statute prevails.”  The following week after the Moelis decision, Chancellor McCormick cited Moelis and similarly found invalid the Activision board’s approval of the Microsoft deal because its merger approval process violated both DGCL §§ 141 and 251.  See Sjunde AP-Fondemn v. Activision Blizzard, Inc., et al., C.A. No. 2022-1001-KSJM (Del. Ch. February 29, 2024).  

Reaction to these decisions was swift, with many commentators wondering whether previously executed agreements consistent with market practice were now subject to challenge.  In April, Delaware’s bar association sent over draft legislation to the General Assembly, which was overwhelmingly approved, and recently signed by the Governor.  

Why the swift (hasty) reactino?  One answer is that the decision undermined the primary value of Delaware as a corporate jurisdiction: certainty.  That is, the decision undermined the validity of an unknown number of agreements that entrenched founder authority over the board.  Another answer is that too intense of a spotlight was being shined on Delaware recently, with Musk looking to incorporate his companies in Texas, TripAdvisor looking to incorporate in Nevada, and general competition from other jurisdictions looking to topple Delaware’s dominance in the corporate formation market.  On the latter point, Texas even recently rolled out its own business court to incentivize the filing of more complex commercial litigation in its jurisdiction.  It’s probably a combination of these things, but it’s hard to imagine why any alleged harms caused by the Moelis and Activision decisions had to be addressed so quickly, before any appeals were even exhausted.  

Chancellor McCormick sent a letter to the executive committee of the Delaware State Bar Association that both defended the Moelis and Activison decisions and basically asked: Why the rush?  The answer, to my mind, is plain old political pressure. 

How “freely assignable” are antitrust claims? | June 15, 2024

Can federal antitrust claims be assigned? Yes.  See John Wiley & Sons, Inc. v. DRK Photo, 882 F.3d 394 (2d Cir. 2018).  Can the assignee of the claim substitute in for the assignor? Also yes.  See Cordes & Co. Fin. Servs., Inc. v. A.G. Edwards & Sons, Inc., 502 F.3d 91 (2d Cir.2007).  Will the assignee have standing to litigate?  That’s usually a yes too. See Silvers v. Sony Pictures Entertainment, Inc., 402 F.3d 881, 903 (9th Cir. 2005). 

But what if a litigation funder controls the assignee entity?  Seems that’s a no-go (or at least it’s not an abuse of discretion to deny the substitution request):

The Magistrate Judge exercised his discretion to deny the motions. He did not invalidate Sysco’s assignment of its claims to Carina, but denied the motions for substitution after reasoning that substitution would be contrary to the Federal Rules and public policy. (Magistrate Judge’s Order at 3, 14–15.) The Magistrate Judge was particularly concerned with the possibility that on the facts of this case, substitution would allow a litigation financer “with no interest in the litigation beyond maximizing profit on its investment to override decisions made by the party that actually brought suit.” (Id. at 3.) The Magistrate Judge concluded that Sysco and Burford’s assignment agreement and substitution request would allow Carina to stymie settlements for Burford’s gain, contravening public policy favoring party control over litigation and settlements. (Id. at 18–21.) Specifically, he wrote that “[t]he largest harm that condoning Burford’s efforts to maximize its return on investment would cause is the harm of forcing litigation to continue that should have settled.” (Id. at 17.)

See In re Pork Antitrust Litig., No. 18-cv-1776 (D. Minn. June 3, 2024).

It’s unclear why Sysco, as the assignor, still has standing to litigate a claim that it assigned away to Carina. 

Antitrust class action statistics | February 2, 2024

Some interesting stats buried in a law and economics article providing a normative critique of private antitrust class actions: 

• The overwhelming bulk of federal antitrust suits (92%) are brought by private parties. 

• Only 9% of private antirust suits are follow-on cases to government enforcement actions, i.e., the overwhelming majority of private antitrust action are for harms that the government mostly isn’t* addressing. 

• Average attorney contingency fee percentage is 25% (compared to the typical contingent fee percentage of 33% to 40% in individual litigation). 

• Fees were about 38% for recoveries below $1.1 million and 12% of recoveries over $175 million.

Choi, Albert H. and Sprier, Kathryn E., "Class Actions and Private Antitrust Litigation" (2020). Law & Economics Working Papers. 180. https://repository.law.umich.edu/law_econ_current/180

The Effect of Motions Practice on Settlement | January 28, 2024

Motions practice in business litigation can be expensive, with the key question often being “is it worth it?”  A recent study based on a sample of 585 federal district court cases provide some worthwhile findings on the interplay between filing non-discovery motions and the timing of settlement:

• The likelihood of settlement increases by 375% after a substantive motion is filed;

• A granted motion increases settlement speed by 270%;

• If the plaintiff’s motion is granted there will be a stronger effect on settlement timing (an increase of 450%) than a motion from the defendant;

• There is no statistically significant difference in settlement timing based on the type of substantive motion filed; and

• Motions that apply law to fact or are pleading-based show no statistically significant impact on settlement timing in the initial month after denial but both motion types exhibit a positive (though not statistically significant) effect on settlement timing after the first month.

In short, the study finds that that the initiation, content, and outcome of motions, as well as whether the plaintiff or defendant filed the motion, can significantly influence the timing of settlements.   See Boyd, Christina L. Boyd, Christina L. and Hoffman, David A., "Litigating Toward Settlement" (2013), https://scholarship.law.upenn.edu/faculty_scholarship/2551/

A FRAND Encumbrance May Not Necessarily Dampen Damages Under 35 U.S.C. § 284 | January 14, 2024

Patentees (and litigation funders) sometimes worry that a FRAND encumbered patent will necessarily command a lower damages figure under 35 U.S.C. § 284 than a non FRAND-encumbered patent.  Not so, for a few reasons:

1. A FRAND rate arguably only applies to a license (a release of future liability) not damages (remedy for infringement). For example, FRAND provisions say things like “[patentee must] grant a license under reasonable rates to an unrestricted number of applicants on a worldwide basis with reasonable terms and conditions that are demonstrably free of unfair discrimination.” So suing to recover a reasonable royalty doesn’t necessarily violate a FRAND commitment.  See Atlas Global v. TP Link, 2:21-cv-00430-JRG-RSP (ED Tex. July 28, 2023) (“The [IEEE] Letter of Assurance does not require a license or specific terms be offered before filing suit . . . [it] requires a commitment to grant a license under reasonable rates to an unrestricted number of applicants on a worldwide basis with reasonable terms and conditions that are demonstrably free of unfair discrimination.”); see also Ericsson Inc. v. D-Link Sys., Inc., No. 6:10-CV-473, 2013 WL 4046225, at *25 (E.D. Tex. Aug. 6, 2013) (“A patent holder does not violate its RAND obligations by seeking a royalty greater than its potential licensee believes is reasonable … Instead, both sides’ initial offers should be viewed as the starting point in negotiations.”).  

2. Entitlement to FRAND is an affirmative defense that may be waived if not pled. See Wi-Lan Inc. v. HTC Corp., No. 2:11-CV-68-JRG, 2013 WL 8811318, at *4 (E.D. Tex. Oct. 11, 2013) (holding that FRAND is an affirmative defense for which “Defendants have the affirmative burden of proof”); see also 3G Licensing, S.A., Koninklijke KPN N.V., Orange, S.A., v. HTC Corporation, No. 1:17-cv-00082-LPS (D. Del., Oct. 2, 2020). 

3. Entitlement to a FRAND rate may require the potential licensee to concede essentiality. See HTC Corp. v. Telefonaktiebolaget LM Ericsson, 12 F.4th 476, 481 (5th Cir. 2021) (“Companies seeking to license under these terms become third-party beneficiaries of the contract between the standard-essential patent holder and the standard setting organization. They are thus enabled to enforce the terms of that contract”); see also 3G Licensing, S.A., Koninklijke KPN N.V., Orange, S.A., v. HTC Corporation, No. 1:17-cv-00082-LPS (Delaware, Oct 2, 2020) (finding that alleged infringed failed to analyze infringement of the standard or essentiality, which is a necessary precondition to entitlement to a FRAND rate). 

4. Entitlement to a FRAND rate arguably requires the licensee to be “willing.” Particularly when there is a strong willfulness case, there is a decent argument that a licensee can’t claim entitlement to a FRAND rate as a nominal third-party beneficiary of a contract that it is arguably repudiating.  See In re Qualcomm Litig., 2019 WL 7834768, at *7 (S.D. Cal. Mar. 20, 2019) (finding unwilling licensee not entitled to a FRAND rate). 

The Basic Interplay Between SEPs and FRAND | January 7, 2024

Standard Essential Patents (“SEP”) and Fair, Reasonable, and Non-Discriminatory (“FRAND”) terms are key concepts in the context of standardization and technology development. SEPs are patents essential for implementing an industry or technology standards established by standard-setting organizations (“SSO”). SEPs ensure interoperability and compatibility among various technologies.

FRAND, by contrast, is a set of licensing terms to which SEP holders generally must commit when licensing their patents (and often in exchange for the SSO including their patent as part of the standard). And failing to comply with a FRAND obligation may lead to the the SSO to remove the technology from the standard. Courts employ various approaches, including competition law/dominance and contract approaches, to assess whether a SEP holders' licensing practices are FRAND-compliant. The cases addressing FRAND have generally adjudicated negotiation rules and the availability of injunctions against unwilling licensees.

In short, SEPs and FRAND licensing form the foundation of standardization. As the legal landscape continues to evolve, parties must navigate the complexities of licensing processes, consider leveraging patent pools, and engage in good-faith negotiations to balance compensation for the value-add of a SEP to and promoting incentives to innovate and rely on the standard.

The DOJ’s Merger Guidelines | December 18, 2023

Here is each guideline from the DOJ’s recently finalized (and highly anticipated) Final 2023 Merger Guidelines: 

• Guideline 1: Mergers Raise a Presumption of Illegality When They Significantly Increase Concentration in a Highly Concentrated Market.

• Guideline 2: Mergers Can Violate the Law When They Eliminate Substantial Competition Between Firms.

• Guideline 3: Mergers Can Violate the Law When They Increase the Risk of Coordination.

• Guideline 4: Mergers Can Violate the Law When They Eliminate a Potential Entrant in a Concentrated Market.

• Guideline 5: Mergers Can Violate the Law When They Create a Firm That May Limit Access to Products or Services That Its Rivals Use to Compete.

• Guideline 6: Mergers Can Violate the Law When They Entrench or Extend a Dominant Position.

• Guideline 7: When an Industry Undergoes a Trend Toward Consolidation, the Agencies Consider Whether It Increases the Risk a Merger May Substantially Lessen Competition or Tend to Create a Monopoly.

• Guideline 8: When a Merger is Part of a Series of Multiple Acquisitions, the Agencies May Examine the Whole Series.

• Guideline 9: When a Merger Involves a Multi-Sided Platform, the Agencies Examine Competition Between Platforms, on a Platform, or to Displace a Platform.

• Guideline 10: When a Merger Involves Competing Buyers, the Agencies Examine Whether It May Substantially Lessen Competition for Workers, Creators, Suppliers, or Other Providers.

• Guideline 11: When an Acquisition Involves Partial Ownership or Minority Interests, the Agencies Examine Its Impact on Competition.

Opening statement frameworks for patent cases | November 23, 2023

Patent infringement trials are perceived by many to be dry and technical.  Yet, many attorneys manage to move the jury with a compelling story that results in a significant damages award. Reading their opening statements, it’s clear that their structure falls within one of three categories:

The first category is the “inventory story.” This approach structures the opening statement around the story of the inventor and the “aha moment” preceding it.  The structure is compelling because it’s in consonance with how ordinary people perceive how inventions come about.  The approach was masterfully utilized in Voxer v. Meta (Case No. 1:20-cv-00655, WDTX), wherein the plaintiff’s attorney told a compelling story of a Yale-educated inventor who, while working as an special forces communications sergeant, came up with a patented invention concerning “live messaging” technology “on the battlefield of Afghanistan following 9/11.”  The plaintiff allege that Meta’s video streaming offerings infringed these patents.  After 2.5 hours of deliberation, the jury awarded $174.5 million in running royalties.

The second category is the “technology story.”  These opening statements tell a story about the societal value of the patented technology.  This approach is most often utilized by non-practicing entity (NPE) plaintiffs hoping to move the jury to conclude that the just result is requiring the defendant to pay their fair share for using the NPE’s ground-breaking technology.  The approach is also consistent with the public’s perception that a patent is only granted  for highly valuable inventions deserving of the property right. This approach was used in PanOptis  v. Apple (Case No. 2:19-cv-00066, EDTX) with a story about the value of LTE technology generally, and the value of plaintiff’s patents to the LTE standards specifically.  The opening statement told the story of how every company but Apple acknowledged the value of PanOptis’s patents, so it’s only right for Apple to have to pay too.  The trial resulted in a verdict of $506 million (and then retried the following year, resulting in $300 million verdict).

The third category is the “good guy vs. bad guy” story.  This approach works best when the defendant has not only refused to license a patent but has acted in bad faith during the parties’ dealings, allowing the plaintiff to present a story that highlights evidence that the defendant learned of the value of plaintiff’s intellectual property but never had a genuine intention of paying for it.  This was the case in Viasat v. Space Systems (Case No. 3:12-cv-00260, SD Cal.), where Viasat accused Space Systems of feigning interest in a partnership only to relay the information learned about Viasat’s technology to Viasat’s competitor (who later developed an infringing technology for Space Systems).  The opening statement hammered home the idea that the jury has the power to right the wrong inflicted on Viasat, resulting in a $284 million verdict ($181 million for patent infringement and $102 million for breach of contract).  See Edmond Cahn, 1949, The Sense of Injustice (“the most powerful call is not to do right, but to undo wrong.”).

These approaches highlight the importance of creating a compelling story around any patent infringement trial (and why there is no need for a patent infringement trial to be a dull affair). 

Implied contractual covenants should be stated explicitly | November 15, 2023

Certain contractual principles are considered “implied,” so-called because one need not state them explicitly to trigger their application.  These include the duty of good faith, the duty of fair dealing, and (in some contexts) the duty to make and maintain agreements and settle disputes.  Given their existence of by implication, many lawyers think that explicitly referring to them in a contract may be redundant.  But in FMLS Holding Co. v. Integris BioServices, LLC, the Delaware Chancery court’s analysis of a breach of contract claim suggests that an expressly stated obligation to not act in bad faith may provide more protection than relying on the background duty to act in good faith alone.  There, the purchase agreement required the acquirer to use“commercially reasonable efforts” to achieve an earnout and to not take any actions in “bad faith” that would undermine achieving the earnest. 

Reading the case, it’s notable how heavily the court relies on the the parties’ explicit “promises” via the good faith provision to work to achieve the earnout, particularly given how dismissive some courts are of breach of contract cases premised on the breach of the implied good faith covenant, often suggesting some unspecific degree of egregiousness is necessary for a plaintiff to avail itself of the covenant. But FMLS suggests that it may be worth making implied covenants more explicit, particularly if the implied covenant is key to receiving an ancillary post-closing payment. 

Full case here: https://courts.delaware.gov/Opinions/Download.aspx?id=355240

Commercial Courtwatch

Commercial Courtwatch | Week of 10/14/24

Chronicling business litigation from the Federal Courts of Appeals and Delaware

Copyright | Copyright infringement case can proceed in Utah against Chinese company because company consented to jurisdiction in any district where Amazon “may be found.”  Tenth Circuit.

Discovery | Irreparable harm based on compelled production of donor information warrants stay of district court order pending appeal.  Fifth Circuit.

Experts | Experts failed to identify a statistically significant link between chemical exposure and chronic conditions, a key element in proving general causation, making grain of Daubert appropriate.  Eleventh Circuit.

False Claims Act | First-to-file rule is not jurisdictional (en banc).  Ninth Circuit.

Patent | Award of fees under 35 U.S.C. § 285 because plaintiff continued to litigate case despite claim construction order undermining infringement position.  Federal Circuit.

Patent | Patent exhaustion doctrine bared party from suing infringing customers of licensee counterparty.  Tenth Circuit.

Privacy | Signing up for online newsletter to NBA website with a video streaming plausibly makes one subscriber of goods or services under the VPPA.  Second Circuit.

Securities | No 10b5 securities fraud if would have purchased company securities to cover short position even absent allegedly misleading public statements about crypto dividend.  Tenth Circuit.

Standing | Purchasers of sunscreen that included the toxic chemical benzene has justifiable injury-in-fact because she suffered economic harm due to overpayment for product.  Ninth Circuit.

Trademark | Purchasing a search engine keyword that is a competitor’s trademark not trademark infringement.  Second Circuit.

Trial | Abuse of discretion to not allow cross examination re past false statements unrelated to the case, warranting a new trial.  First Circuit.

Commercial Courtwatch | Week of 9/16/24

Chronicling business litigation from the Federal Courts of Appeals and Delaware

Contract | Modification of bilateral contract not valid because modification wasn’t supported by contract formation principles.  Ninth Circuit.

Contract | MA interest in enforcing non-compete agreements outweighed CA’s interest in enforcing its public policy against them re employer in California.  First Circuit.

Contract | Email not create contract but judicial estoppel functionally made it so.  Fifth Circuit.

ERISA | Allegations of health plan rebate retention not enough to support Art. III standing.  Third Circuit.

Jurisdiction | Chinese online marketplace subject to personal jurisdiction in New York given acceptance of orders from New York residents.  Second Circuit.

Jurisdiction | No Art. III injury if third-party didn’t understand defamatory significance of false statement.  Fourth Circuit.

Lanham Act: False claim that product was patented not claim not necessarily a claim of authorship or inventorship.  Federal Circuit.

Patent | District court erred in holding that meaning of independent patent claims must be internally consistent.  Federal Circuit.

Patent | An expert can acquire ordinary skill in the art later and still testify as a person of ordinary skill at the time of the invention. Federal Circuit.

Patent | Failure to secure advice of counsel not probative evidence of willfulness. Federal Circuit.

Procedure | Whether district court erred in categorizing complaint allegations as conclusory is reviewed de novo.  Federal Circuit.

Trial | Need proof of LLC citizenship at trial to maintain diversity jurisdiction.  Fifth Circuit.

Commercial Courtwatch | Week of 8/26/24

Chronicling business litigation from the Federal Courts of Appeals and Delaware

Antitrust | Dismissal of § 2 claim reversed for judge’s failure to consider anticompetitive effect of defendant’s otherwise lawful actions as a whole.  Fourth Circuit.

Copyright | District court imposed too high a burden when instructing the jury that a “causal relationship between the defendant's infringement and the defendant's revenues” were required for copyright infringement damages.  First Circuit.

Copyright | No “sophisticated plaintiff” exception to the discovery rule in copyright cases.  Second Circuit.

Foreign Discovery | District must provide reasons for granting and denying foreign discovery motion under 28 U.S.C. § 1782. Fifth Circuit.

Jurisdiction | Look-through rule applies to LLC members when analyzing diversity jurisdiction.  Second Circuit.

Jurisdiction | No appellate jurisdiction over denial of motion to join government entity that has sovereign immunity under collateral order doctrine.  Fourth Circuit.

Trademark | Parties’ relative size and financial resources not relevant to whether Lanham Act case “exceptional” and warranting of attorneys’ fees.  Third Circuit.

Patent | Application of patent misuse doctrine is question of law reviewed de novo after bench trial.  Ninth Circuit.

Patent | No Art. III standing to appeal IPR decision when patentee withdrew infringement suit.  Federal Circuit.

Patent | On-sale bar precluded ITC action for patented process that was “in secret use . . . and sold” one year before effective filing date of patent.  Federal Circuit. 

Preemption | Consumer’s state law mislabeling claims expressly preempted by the FDCA. Second Circuit.

Procedure | Forum non conveniens analysis gets case back to forum designated in unassented-to forum selection clause.  Tenth Circuit.

Commercial Courtwatch | (SCOTUS 2023-2024 Term Roundup Edition) 

Chronicling business litigation from the Federal Courts and Delaware.

APA | Statute of limitations for APA claims begins running from the date of plaintiff’s injury, not from the date of agency action (and interesting concurrence on the vacature vs. injunction remedy). Corner Post v. Board of Governors. 

APA | Chevron is overruled. Loper Bright v. Raimondo. 

Arbitration | Nature or employee’s job (not employer’s industry) controls applicability of FAA exemption for transportation workers. Bissonnette v. LePage Bakeries Park St. 

Arbitration | If two contracts conflict as to whether the parties’ dispute belongs in arbitration a court must decide which contract governs. Coinbase v. Suski. 

Arbitration | Court can’t dismiss case when party properly requests stay pending arbitration. Smith v. Spizzirri. 

Appropriations Clause | Congressional authority for CFPB to draw money from Federal Reserve satisfies appropriations clause. CFPB v. CFSA.

Banking | State law regulating bank activity preempted only if it significantly interferes with a national bank’s exercise of its powers. Cantero v. Bank of America. 

Bankruptcy | The bankruptcy code does not authorize a release and injunction that, as part of a plan of reorganization under Chapter 11, effectively seek to discharge claims against a nondebtor without the consent of affected claimants. Harrington v. Purdue Pharma.

Bankruptcy | Bankruptcy Clause’s fee uniformity requirement not violated by temporary past fee disparity between districts, so no refund due. Office of the U.S. Trustee v. John Q. Hammons Fall 2006, LLC.

Bankruptcy | Party-in-interest not limited to those whose obligations differ pre vs. post bankruptcy plan. Truck Insurance v. Kaiser Gypsum. 

Copyright | Three-year SOL not limit damages under Copyright Act.  Warner Chappell Music v. Nealy.

Securities | Pure omissions not actionable under Rule 10b-5. Macquarie Infrastructure Corp. v. Moab Partners, L.P.

Takings | Fifth Amendment takings clause not distinguish between legislative and administrative land-use permits. Sheetz v. County of Eldordo.

Takings | Unclear if Fifth Amendment takings clause requires federal private right of action for money damages.  DeVilliar v. United States.

Tax | Mandatory Repatriation Tax needn’t be apportioned. Moore v. U.S. 

Tax | Obligation to redeem shares not a corporate liability for tax purposes. Connelly v. United States. 

Trial | In civil penalties case against a defendant for securities fraud, the Seventh Amendment entitles the defendant to a jury trial. SEC v. Jarkesy.

Whistleblowers | Whistleblower need not prove retaliatory intent to be covered under SOA. Murray v. UBS. 

Commercial Courtwatch | Week of 7/15/24

Chronicling business litigation from the Federal Courts of Appeals and Delaware.

Antitrust | Plaintiff must plead/prove that antitrust exemption for union activity not apply. Second Circuit.

Arbitration | District court lacked power to compel Samsung to arbitrate consumers’ privacy claims after Samsung’s refusal to pay AAA’s fees.  Seventh Circuit. 

Arbitration | Forum non conveniens not defense to enforcement of foreign arbitral award in US district court. Third Circuit. 

Class Actions | Class representative had standing to represent absent class members even if unclear whether class representative’s harms were analogous to those of other circuit splits.  Fifth Circuit. 

Contract | Force majeure clause that impacted gas delivery during Winter Storm Uri didn’t require legal impossibility, but did require attempting to mitigate effect on performance. Fifth Circuit. 

Contract | Letter from public health department  requiring shutting down of public gathering (not Covid-19 pandemic itself) was basis force maejure-based termination. Sixth Circuit. 

Copyright | No copyright protection for model building codes that were ultimately incorporated into law in Canada.  Fifth Circuit. 

Copyright | No damages for copyright infringement based on foreign sales and damages need to be reduced by valued added to infringing products by infringer. Seventh Circuit. 

Debt | Whether foreign notes are valid hinges on law of issuer’s jurisdiction despite NY choice-of-law clause.  Second Circuit. 

ERISA | Insurer permissibly denied life insurance benefits to survivors of mountaineer whose dead body was never recovered because unclear if death was “caused solely by an accident.”  Eleventh Circuit. 

Ethics | Dismissal order vacated under 28 U.S.C. § 455 because judge’s wife owned stock in defendant corporation at inception of suit, but not at time of dismissal order. Second Circuit.  

Insurance | Only right of possession remains as insurable interest post-foreclosure proceeding.  Seventh Circuit. 

Patent | Dismissal reversed because drug label + public statements sufficient to survive MTD because induced infringement because how statements are perceived is a factual question.  Federal Circuit.  

Patent | Gaming patents found invalid under Alice. Federal Circuit.  

Personal Jurisdiction | Website subject to personal jurisdiction in state where it sent marketing messages to ISP’s customers. Tenth Circuit. 

Securities | Breach of fiduciary duty was close common law analogous to Exchange Act’s “short-swing” profit provision, so no Art. III standing problem. Second Circuit.  

Trade Secret | Preliminary injunction vacated because trade secret imprecisely defined and injunction scope suffered from similar lack of imprecision. Federal Circuit. 

Commercial Courtwatch | Week of 7/1/24

Chronicling business litigation from the Federal Courts of Appeals and Delaware.

Appellate | Interlocutory appeal of stay in PG&E securities litigation appropriate because district court’s sua spent stay both “lengthy and indefinite.”  Ninth Circuit. 

Arbitration | FAA not give federal courts jurisdiction to adjudicate petition to vacate arbitration award—need independent basis like diversity or federal question, but “a claim of manifest disregard of federal law doesn’t present a federal question.”  Fourth Circuit. 

Contract | Electronically “acknowledging” PIIA enough to make terms binding on employee as a matter of contract law in later copyright dispute. D.C. Circuit.  

Contract | No enforceable requirements contract without clear quantity, even with evidence of past purchase orders.  Sixth Circuit.  

Damages | Post-judgment interest accrues on total of judgment + pre-judgment interest.  Delaware Supreme Court. 

Injunctions | Irreparable harm no less important when movement shows likelihood of success on the merits.  Federal Circuit.  

M&A | Chancery court dismissal of BitGo’s claim for repudiation of merger agreement with Galaxy reversed  because meaning of “Company 2021 Audited Financial Statements” ambiguous, necessitating consideration of extrinsic evidence. Delaware Supreme Court.  

M&A | All members of special committee must be independent to cleanse spin-out transaction and avoid entire-fairness review.  Delaware Supreme Court. 

Patent | The same conditions for patentability that apply to utility patents apply to design patents, going back to applying 1966 Graham v. John Deere Co. SCOTUS decision.  En banc Federal Circuit.  

Patent | Section 284 damages for foreign infringement permitted if patentee shows "causal relationship" between the infringing act within the country, overruling Power Integrations.  Federal Circuit. 

Patent | Prior appeal revering district court’s grant of enhanced damages after jury verdict kept patents susceptible to attack before a “final judgment,” and interim patent invalidity ruling nullifies jury verdict of infringement.  Federal Circuit.  

Patent | Art. III standing not lost based on loan agreement agreement that provided patentee option to assign patents to lender upon default.  Federal Circuit. 

Securities | Anonymous criticism of management’s disclosures regarding acquisition insufficient to plead scienter for valid 10(b) claim.  Ninth Circuit. 

Summary Judgment | District court’s denial of summary judgment is not appealable after a trial on the merits.  Federal Circuit. 

Trademark | Lanham Act not preclude judicial review of PTO’s trademark grant.  Fourth Circuit.  

Commercial Courtwatch | Week of 12/3/23

Chronicling business litigation from the Federal Courts of Appeals and Delaware.

Insurance | No coverage for industrial service company for $222M verdict because company didn’t step into shoes of other subcontractor after its parent acquired previous subcontractor, Tenth Circuit hold. 

Class Actions | Approval of Mercedes-Benz paint defect class action not abuse of discretion even though 80% of class not receive any benefit because the district court’s review process sound, per Eleventh Circuit. 

Class Actions | CAFA’s “securities-related” exemption deprived federal court of jurisdiction over state court suit alleging breach of fiduciary duty to shareholders, per Second Circuit. 

MDLs | Ninth Circuit affirms dismissal of fraud and unfair conduct claims for Intel’s failure to disclose design defects due to poor pleading. 

Arbitration | Second Circuit reverses denial of motion to compel arbitration because consumer was on “inquiry notice” of whether an arbitration clause governed her contract. 

Arbitration | Coinbase’s arbitration delegation clause not unconscionable, and district court erred in holding otherwise, Ninth Circuit holds. 

Patents | Statutory requirement for PTAB to issue decision within 1 year no jurisdictional, and remedy for failure to issue is mandamus, per Federal Circuit in dispute between Purdue and Collegium Pharma. 

Patents | Federal Circuit vacates VLSI’s $2.2 B verdict against Intel. 

Securities | Former spouse may have claim to asset purchased by husband with illicit funds because childcare may count as consideration for the asset, First Circuit holds. 

Securities | Disclosing that a risk that’s already occurred “could” occur can support securities fraud claim, Ninth Circuit holds. 

Courtroom Chronicles | Week of 11/26

Getting caught up on business litigation from the Federal Courts of Appeals and Delaware, made easy. 

Corporate—An acquisition involving Jay-Z’s music streaming company may be “terrible business decision” and “by all accounts, a terrible deal,” but that doesn’t mean the board faced substantial liability  for approving it, so demand futility not apply.  Chancery dismissed case. DE Supreme Court affirmed. 

False Claims Act—Service of process clock under FRCP 4(m) only begins to run once the district court orders service of the unsealed complaint, per Second Circuit. 

Class Actions—Third Circuit rejects class settlement for $9 million in “gift cards” of which $2.9 million was claimed, which included $3mm for class counsel because district court erred in not considering appropriateness of using amount claimed as gauge of reasonableness of class fee. 

Jurisdiction—No specific jurisdiction over defendants’ actions that violated state privacy law because actions part of general business practices everywhere, Ninth Circuit holds. 

Securities—Board not required to approve sale of securities to issuer’s beneficial owner for specific purpose of exempting transaction from 16(b) liability in order to trigger exemption under SEC rule, Ninth Circuit holds. 

Trial—Damages verdict vacated because district court erred in letting plaintiff’s CFO testify as lay witnesses under FRE 701 about company’s projected profits without satisfying requirements of FRE 702, per Tenth Circuit. 

Patent—Federal Circuit vacates stipulated judgment of infringement vacated because district court failed to address extrinsic evidence that bore on meaning of patent term to POSITA during claim construction.  

Patent—Filing subsequent infringement suits in violation of Kessler doctrine justified deeming dismissal of subsequent suits “exceptional” and awarding $5mm in attorneys’ fees, Federal Circuit holds in 2-1 decision. 

Patent—No Art. III requirement for filing IPR, but you can’t appeal rejection of IPR to Federal Circuit. 

Courtroom Chronicles | Week of 2/22/23

Getting caught up on business litigation from the Federal Courts of Appeals and Delaware, made easy. 

Arbitration | Tenth Circuit holds effective vindication exception nixed applicability of arbitration provision in ERISA plan documents. 

Arbitration | Second Circuit unsure if FAA exemption applies to transportation workers or transportation industry.

Arbitration | Functus officio doctrine doesn't prevent district court from remanding case to arbitrator to issue a "reasoned" award.  See Second Circuit. 

Bankruptcy | No Texas Two Step for J&J, because bankruptcy court is for companies in financial distress.  See Third Circuit. 

Corporate Law | No chancery court jurisdiction over dispute about parties’s right to appoint arbitrator. 

Corporate Law | Caremark analysis applies to D&Os, and corporate officer breached duty of loyalty by sexually harassing an employee, Del. Chancery holds. 

Corporate Law | A conflicted acquirer underpays if merger price doesn’t account for acquirer’s breach of fiduciary duty, per Del. Chancery. 

Venue | District court should reassess forum non conveniens analysis now that civil defendants are also criminal defendants in the district.  See First Circuit. 

Patents | Court erred in claim construction by relying on dictionary meaning of “enlarged chamber” instead of meaning understood by a skilled artisan.  See Federal Circuit. 

Patents | Jury verdict set aside under prosecution laches due to "institutionalized abuse" of the patent system, per Federal Circuit.  

Patents | Low-data video streaming patent invalid under 101, per Federal Circuit. 

Courtroom Chronicles | Week of 1/12/23

Getting caught up on business litigation from the Federal Courts of Appeals and Delaware, made easy. 

Patent | Discovery order maintaining attorney eyes only designation on source code not reviewable collateral order.  Federal Circuit. 

Trial | District court not abuse discretion in excluding infringement theory that was disclosed four months before trial.  Federal Circuit. 

Insurance | DJ action seeking a duty to defend generally becomes justiciable earlier than DJ action for a duty to indemnify. Second Circuit.

Banking | Service members’s claims against banks under JASTA fails for failure to plead a direct link between bank activities and terrorism activities that turn on legal disputes are not cognizable under the FCRA, per Second Circuit. 

Corporate Law | Series A investor can't use "shady" tactic to disqualify a board candidate that would break deadlock yet claim a receiver needs appointing because of deadlock.  Del. Chancery. 

Corporate Law | Plaintiff entitled to fees under "corporate benefit doctrine" for writing unsolicited letter to SPAC board correctly advising on required stockholder vote.  Del. Chancery. 

Corporate Law | Can't infer that board demand futile because of chance of director liability if in separate litigation court found no liability on the merits. Del. Chancery. 

Securities | Mass solicitation of securities on social media can make you a 12(a) statutory seller under 33 Act.  Ninth Circuit. 

TCPA | Facebook not violate the TCPA by sending automated birthday messages because messages not involve autodialer that randomly or sequentially generated phone numbers. Ninth Circuit. 

Courtroom Chronicles | Week of 12/26/22

Getting caught up on business litigation from the Federal Courts of Appeals and Delaware, made easy. 

ERISA | In ERISA denial-of-benefits cases, factual disputes over administrative record should be resolved via Rule 52 bench trial, not quasi summary judgment proceeding employed by other circuits on the briefs. Fourth Circuit.  

FCA | Whistleblower going outside chain of command to document FCA violations triggered expanded retaliation protection in 2010 FCA amendments as "other efforts.”  Third Circuit. 

FCA | No attorneys fees for FCA whistleblower who received fee amount under private fee sharing agreement with co-whistleblower.  First Circuit. 

Bankruptcy | Bankruptcy Court not err in rejecting DCF analysis showing solvency in favor of liquidation analysis showing insolvency.  Second Circuit. 

M&A | No standing for security-holders of parent company to challenge misstatements by target company about itself prior to merger.  Second Circuit. 

Appeals | State supreme court decision holding that its new rule applies prospectively applies to pending appeals.  First Circuit. 

Patents | If whether prior art invalidates patent turns on credibility of prior art manufacturer then summary judgment improper even if non-movant failed to oppose.  Federal Circuit. 

Patents | Jury could conclude that "RFID for Dummies" disclosed patented claims, making MSJ grant improper.  Federal Circuit. 

Courtroom Chronicles | Week of 12/15/22

Getting caught up on business litigation from the Federal Courts of Appeals and Delaware, made easy. 

Jurisdiction | Attorney sanctions upheld because of "a veritable tsunami of decisions finding no Article III standing.” Tenth Circuit. 

Contracts | Email exchange didn't form valid contract because it lacked "essential term," and denial of motion to amend not error.  Eighth Circuit. 

Civil Procedure | Failure to update process server information nixed 60(b) arguments to set aside default judgment.  Eighth Circuit. 

Class Actions | Uber settlement not "coupon settlement" subject to CAFA attorney fee restrictions.  Ninth Circuit. 

False Advertising | "Flora-Bama Lodge" and MTV's Floribama not sufficiently confusing under Lanham Act. Eleventh Circuit. 

Energy | FERC must show its work.  DC Circuit. 

Arbitration | No jurisdiction to confirm/vacate arbitral award under FAA Section 9 based on look through rule, even if underlying dispute is ERISA federal question issue.  Eighth Circuit. 

Patents | Error for expert to rely on ordinary meaning of limitation even if it's consistent with meaning the parties agreed to.  Federal Circuit. 

Courtroom Chronicles | Week of 11/23/22

Getting caught up on business litigation from the Federal Courts of Appeals and Delaware, made easy. 

Venue | District court not have to transfer venue if it doesn't want to, and it doesn't matter if not transferring would make the case time-barred.  Fifth Circuit. 

Immunity | Military equipment sales from US to South Korea not "commercial activity" under FSIA exception to sovereign immunity.  Fourth Circuit. 

Jurisdiction | No Art III standing because at oral argument judge came up with hypothetical where plaintiffs wouldn't incur damages.  Fifth Circuit. 

Jurisdiction | Can't consolidate two cases if court lacks subject-matter jurisdiction over one of them, even if find out after trial.... Fourth Circuit. 

Human Remains | Human remains are "cargo" under Montreal Convention, preempting civil suit. Who knew. Second Circuit. 

Energy | Gotta present RFRA challenge to gas pipeline to FERC first.  Third Circuit. 

Insurance | Insured didn't bargain for but-for causation standard re police term of "because of.”  Ninth Circuit.