Historically, there has been a tension between making post-issuance patents too hard or expensive to challenge and making such patents so easy to challenge that they create harassment opportunities for those who wish to extract undue settlements. Prior to the passage of the America Invents Act (AIA), ex parte and inter partes reexamination were often used as a tool to prolong or complicate litigation. When an alleged infringer was being sued, the reexamination process offered a quick way to increase the transaction cost for the patentee, perhaps effect a stay in the corresponding litigation and, with luck, invalidate some claims in the process. While a post-grant system that encourages the review of patents for legitimate reasons is an important tool to guarantee high-quality patents, the system must also discourage its use for mere harassment purposes. One of the significant goals of the AIA was the rebalancing of the post-grant processes to better address this problem.
This advisory discusses another provision of the AIA that could have the unintended consequence of nullifying much of the gains made in rebalancing the review process, as well as a possible solution to this issue.
September 17, 2012
Advisories
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This advisory discusses the United States Supreme Court’s recent granting of a writ of certiorari in Standard Fire Insurance Company v. Knowles, No. 11-1450, to address the issue of whether a class plaintiff can defeat federal jurisdiction under the Class Action Fairness Act of 2005 (CAFA) by filing a stipulation limiting the amount of damages the plaintiff will seek on behalf of the putative class to less than $5 million. Currently, there is a conflict in the circuits: the Eighth Circuit permits a named plaintiff to plead around CAFA by filing such a stipulation, while the Tenth Circuit has held that a named plaintiff’s attempt to limit damages in the complaint is not dispositive and that removal under CAFA is proper if a defendant proves jurisdictional facts by a preponderance of the evidence, including that the amount in controversy may exceed $5 million.
September 14, 2012
Advisories
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Construction Cite is a bi-monthly publication by Alston & Bird’s Construction Group highlighting recent trends and developments in construction law and in the construction industry. In this issue Alston & Bird’s Construction Group discusses utilizing various strategies to effectively mediate a construction dispute, a notable 7th Circuit decision addressing the scope of liability construction managers may face depending on their actual role on a project and a recent 11th Circuit decision analyzing whether “stigma” costs resulting from of physical damage to a building constitute “direct physical loss or damage” as articulated in common insurance policies.
September 2012
Publications
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On April 5, 2012, President Obama signed into law the Jumpstart Our Business Startups Act (the “JOBS Act”), which was designed to facilitate the raising of capital by small businesses. Section 201(a) of the JOBS Act called for a significant relaxation of the current restrictions on general solicitation and general advertising (hereinafter referred to together as “general solicitation”) in connection with private offerings made pursuant to Rule 506 of Regulation D of the Securities Act of 1933, as amended (the “Securities Act”). This advisory discusses recent Securities and Exchange Commission (SEC) proposed amendments to Rule 506 (the “Proposed Amendments”) to implement these changes mandated by the JOBS Act.
September 11, 2012
Advisories
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This advisory discusses the California Department of Toxic Substances Control’s (DTSC) recent issuance of the fourth iteration of its Safer Consumer Products draft regulations. These stringent regulations, implementing California’s Green Chemistry program, have a broad reach and impact across the industrial spectrum. Although concern is widespread across industries that make consumer products sold in California, the pharmaceutical industry is largely missing from the dialog. On first blush, the regulations, like the federal Toxic Substance Control Act (TSCA), appear to exempt drug, devices and food—products regulated by the United States Food and Drug Administration (FDA). However, the regulations only exempt “dangerous drugs,” a term defined to include prescription (Rx) drugs, but not over-the-counter (OTC) drugs. Therefore, the entire gamut of OTC drug products and their packaging—from aspirin to sunscreen—is susceptible to regulation. Although the pharmaceutical industry has a strong argument that the Safer Consumer Product regulations, as they apply to OTC drugs, are preempted by FDA regulations, it should act quickly to raise these concerns by October 11, 2012, the close of the public comment period.
September 10, 2012
Advisories
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The Patient Protection and Affordable Care Act (the “Act”) includes provisions that promote research to evaluate and compare health outcomes and the clinical effectiveness, risks and benefits of medical treatments, services, procedures, drugs and other strategies or items that treat, manage, diagnose or prevent illness or injury (“clinical effectiveness research” or “CER”). One such provision relates to the establishment of the private, nonprofit corporation, the Patient-Centered Outcomes Research Institute (the “Institute”). The Institute is funded through the Patient-Centered Outcomes Research Trust Fund (the “Trust”). The Trust, in turn, is funded through fees, discussed in this advisory, imposed on certain insurers and self-funded plan sponsors (the “CER Fees”).
The rules governing the amount of the CER Fees and the entities to which the CER Fees apply were added to the Internal Revenue Code (the “Code”) by Section 6301 of the Act, which added new Code Sections 4375, 4376 and 4377. Section 4375 applies to insurance policies, Section 4376 applies to self-insured plans and Section 4377 provides definitions and special rules applicable to the other sections.
September 10, 2012
Advisories
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This advisory discusses the Second Circuit Court of Appeals’ reversal of a district court’s determination that a single color can never function as a trademark in the fashion industry. Christian Louboutin S.A. v. Yves St. Laurent Am. Holding, Inc., No. 11- 3303-cv (2d Cir. Sept. 5, 2012) (“Louboutin”). The appeals court also held that the signature red lacquered sole of Christian Louboutin’s shoes constitutes a valid and enforceable trademark—but only when used as a contrasting color to the remainder of the shoe (known as the “upper”).
September 10, 2012
Advisories
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"Unilateral Benefits Modification Allowed When Vesting Not Apparent," Employee Benefit News, September 7, 2012.
September 7, 2012
Publications
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September 6, 2012
Publications
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This advisory discusses a recent, highly fractured en banc decision where the Federal Circuit ruled 6-5 that inducement of patent infringement no longer requires proof that a single entity directly infringes the patent. Limiting its analysis to method patents, and overruling a 2007 decision, the court held “that all the steps of a claimed method must be performed in order to find induced infringement, but that it is not necessary to prove that all the steps were committed by a single entity.” This new rule eases a patentee’s burden for proving induced infringement and is already having an immediate and dramatic impact on patent litigation. The new standard will affect claim drafting as well, as earlier concerns about structuring method claims to capture infringement by a single party are now less worrisome.
September 6, 2012
Advisories
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The Jumpstart Our Business Startups Act (JOBS Act) required the Securities and Exchange Commission (SEC) to revise its current rules to allow companies issuing securities in a private offering pursuant to Rule 506 of Regulation D of the Securities Act of 1933 (Securities Act) and Rule 144A of the Securities Act to use general solicitation and general advertising—such as newspaper advertisements, communications over television or radio, public websites or seminars in which attendees are invited through a general advertisement—in their offering efforts, as long as the actual purchasers of the securities are accredited investors or reasonably believed to be qualified institutional buyers (QIBs). This advisory discusses the SEC rules proposed to implement this directive.
September 5, 2012
Advisories
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This advisory discusses LTR 201222014, which ruled that persons contributing property to a new corporation in exchange for stock can form a control group with other persons contributing the stock of another corporation (target), and therefore enjoy Section 351 nonrecognition treatment. This might seem obvious to practitioners familiar with combined reorganization/351 contributions that were first treated favorably under Section 351 by LTR 9143025. The transaction often takes the form of a double dummy drop down, whereby a new holding company puts the contributed property in one subsidiary and holds the acquired target corporation as the other subsidiary.
September 4, 2012
Advisories
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“Recent Developments in Chapter 11,” Norton's Annual Survey of Bankruptcy Law, September 2012.
September 2012
Publications
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“How the Proposed Patent Fee Schedule Diminishes the Benefits of the AIA, and a Possible Solution,” The Federal Lawyer, September 2012.
September 2012
Publications
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“NEW YORK: Arbitrating with states and state entities under ICC rules,” Global Arbitration Review, September 2012.
September 2012
Publications
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"Current Issues With Respect to Safe Harbors for Swaps and Repo Agreements," Norton Annual Survey of Bankruptcy Law, 2012 Edition.
2012
Publications
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August 28, 2012
Publications
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This advisory discusses the New York Supreme Court’s recent holding that the Metropolitan Commuter Transportation Mobility Tax (“MTA payroll tax”) was passed unconstitutionally and thus is invalid. This decision potentially impacts all companies with operations in the New York City area and its development should be closely monitored.
August 28, 2012
Advisories
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August 27, 2012
Publications
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This advisory discusses the U.S. Securities and Exchange Commission’s (SEC) adoption of final rules related to “conflict minerals” that originate in the Democratic Republic of Congo (DRC) or the countries adjoining the DRC (collectively “Covered Countries”). Companies that file reports with the SEC, including domestic issuers, foreign private issuers and smaller reporting companies, are subject to the rules if conflict minerals are “necessary to the functionality or production” of a product manufactured by a reporting company. Companies that are subject to the conflict minerals rules must determine, following a “reasonable country of origin inquiry,” whether their conflict minerals did in fact originate in a Covered Country. If they did, the company is required to submit a certified report to the SEC that includes a description of the measures the company has taken to exercise due diligence regarding the source and chain of custody of such minerals. The term “conflict minerals” includes columbite-tantalite, cassiterite, gold, wolframite, their derivatives or any other mineral or its derivatives determined by the Secretary of State to be financing conflict in the Covered Countries. Many of these minerals are commonly used in products such as cellphones, light bulbs and jewelry. The SEC has previously estimated that approximately 6,000 companies will be affected by this rule.
August 24, 2012
Advisories
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