Tag Archives: business law

Merck’s patent win over Gilead reversed over false testimony

Merck & Co.’s $200 million jury verdict against Gilead Sciences Inc. was voided in a patent dispute over a breakthrough for hepatitis C because of misconduct by a witness at the companies’ trial.

A federal judge concluded Monday that dishonest and duplicitous testimony by a retired Merck scientist before and during a March trial played into the jury’s finding that the company was responsible for early discoveries that led to the development of Gilead’s Sovaldi and Harvoni medicines.

The scientist “intentionally fabricated testimony” and Merck supported his “bad faith conduct,” U.S. District Judge Beth Labson Freeman in San Jose, California, said in her ruling.

The reversal of the fifth-largest U.S. verdict this year vindicates Gilead in its refusal to share royalties with Merck on the more than $20 billion revenue the hepatitis C drugs generated from 2013 through 2015 in the U.S. The Foster City, California-based company’s sales have started to slow this year as competition for the liver disease market intensifies among drugmakers.

“This is a nice little bump for Gilead who’d already accounted for the $200 million,” said Bloomberg Intelligence analyst Asthika Goonewardene. “But of course, this is a big win and will be beneficial to Gilead and how they can claim ownership of the drug in the long run.”

Merck vowed to appeal Monday’s ruling, saying it “does not reflect the facts of the case.”

“In its decision, the jury recognized that patent protections are essential to the development of new medical treatments,” the company said in an email. “The compounds and methods at issue in this case facilitated significant advances in the treatment of patients with HCV infection, and achieving these advancements required many years of research and significant investment by Merck and its partners.”

Gilead said it “has always believed Merck’s patents are invalid and unenforceable.”

“We are pleased the court has ruled in Gilead’s favor and determined that Merck’s patents are unenforceable against Gilead, and therefore, Merck is not entitled to recover any damages,” the company said in an email.

Labson Freeman re-opened the case in April after Gilead alleged that ex-Merck scientist Phil Durette gave conflicting statements about his participation in a key phone call some 15 years earlier when the drug’s basic composition was first presented to Merck.

Durette initially said in a pretrial deposition he wasn’t on a phone call in which secrets about the compound’s basic chemistry were discussed while Merck was exploring a take-over of Pharmasset Inc., a company that was later acquired by Gilead. When testifying to the jury after checking his notes, Durette admitted to playing a role in the meeting.

“Dr. Durette’s lying at his deposition, recanting that testimony at trial without proper prior notice to Gilead, and further untruthful testimony at trial all support the court’s conclusion that Merck did intend to deceive Gilead and the court,” the judge wrote.

She said Merck’s actions were “even more egregious” because Durette was acting as the company’s patent attorney.

Merck’s victory at trial had set the stage for it to seek future royalty payments from Harvoni and Sovaldi, which sells for $1,000-a-pill in the U.S., before discounts and rebates.

While Gilead continues to dominate the market, the lull in its hepatitis C treatment revenue opened the door to Amgen Inc. retaking its place as the world’s top biotech firm by market capitalization.

The case is Gilead Sciences Inc. v. Merck & Co., 13-cv-04057, U.S. District Court, Northern District of California (San Jose).

Full Article – http://www.theindianalawyer.com/mercks-patent-win-over-gilead-reversed-over-false-testimony/PARAMS/article/40559

Merely doing business in Delaware not enough for lawsuit

, The News Journal 11:44 a.m. EDT April 21, 2016

High court overturns decision regarding whether Delaware has legal oversight over businesses registered in state

STORY HIGHLIGHTS

  • The Delaware Supreme Court has issued a ruling over a decades-old decision regarding jurisdiction.
  • It overturns a ruling that says corporations registered in Delaware are subject to state jurisdiction.
  • The ruling was 4-1 and involves an Atlanta auto-parts supplier.

An out-of-state company can no longer be sued in Delaware merely because it does business within the state, the Delaware Supreme Court has ruled.

Under a 1988 state Supreme Court ruling, a plaintiff could sue a company in Delaware for a personal injury or other tort claim that occurred in another state. That meant a large retail chain operating a store in Delaware or a company with an office in the state could be vulnerable to a Delaware lawsuit simply because it did business here.

However, in this week’s rare 4-1 split decision, the Supreme Court reversed that holding in Genuine Parts Co. v. Cepec. The opinion was authored by Delaware Supreme Court Chief Justice Leo E. Strine.

“This is a positive for companies not incorporated in Delaware, but do business in Delaware,” said Donald W. Durandetta, a professor of business at Wilmington University. “It is increased protection for doing business in Delaware.”

Plaintiffs Ralph and Sandra Cepec are Georgia residents who sued automobile equipment supplier Genuine Parts Co., the parent company of NAPA AutoParts. Genuine is a Georgia corporation headquartered in Atlanta and operates more than 60,000 retail stores throughout the nation, including about 15 in Delaware.

Ralph Cepec worked for Genuine Parts in a Jacksonville, Florida, warehouse between 1988 and 1991. He filed a personal injury lawsuit in Delaware saying he was exposed to asbestos during his employment, causing mesothelioma and other illnesses.

Last year, the Cepecs sued Genuine Parts in Delaware, despite that than 1 percent of its stores and employees are based in Delaware and less than 1 percent of its revenue comes from the state, according to the court’s opinion. Genuine Parts is registered to do business in Delaware, giving the state’s court system general jurisdiction over the company under Delaware law.

The case started in the Delaware Superior Court, which upheld the state’s jurisdiction over Genuine Parts, citing the state Supreme Court’s 1988 decision in Sternberg v. O’Neil. Genuine Parts appealed to the Supreme Court, which reversed the lower court. In the decision, the high court ruled plaintiffs can only file a lawsuit against a company in Delaware if the claim resulted from the defendant’s connection to the state. A plaintiff no longer pursue a claim in Delaware just because a company does business here.

Plaintiffs can still file lawsuits in Delaware against national corporations if the injury occurred in the state or there is some other connection.

Read Full Article – http://www.delawareonline.com/story/news/2016/04/20/merely-doing-business-delaware-not-enough-lawsuit/83293736/

Paramore, former bassist embroiled in legal battle

, nrau@tennessean.com 8:54 p.m. CST March 4, 2016

Paramore and former bassist Jeremy Davis are locked in a legal dispute over whether Davis was an employee for the Nashville pop-rock band or a partner in the underlying business entitled to a share of royalties and touring revenue.

bass

Varoom Whoa, the business entity that operates Paramore, preemptively sued Davis in Nashville Chancery Court in February. According to the lawsuit, Varoom Whoa is fully owned by front woman Hayley Williams.

Davis left the band in December 2015 in a seemingly amicable separation announced on the band’s Facebook page.

But Davis asserts that he was a partner in the company and entitled to a split of royalties, touring revenue and other income earned by the band. Davis wanted to examine financial documents, which he was not provided. Williams and Varoom Whoa say he was a paid employee, not a partner.

Williams is the one signed to a record contract with Atlantic Records, and she pays her band members as employees.

“Nevertheless, because she wanted to foster a feeling of camaraderie within the band, at her direction, the band members’ salaries included a portion of Williams’ earnings,” the initial lawsuit says.

Davis filed a counterclaim on Friday naming Varoom Whoa, along with Williams and fellow band member Taylor York. The band’s business managers were also named as defendants.

Davis claims Paramore was founded as a partnership between him and Williams. Prior to 2008, York was an employee, until he joined as a partner in the group.

Davis says that he was responsible for decision making, including hiring advisers, musicians, stage crew and equipment managers, plus creating and managing staging and lighting and an array of other duties.

“Thereafter, and at all times relevant hereto, Davis, Williams and York shared equally in all net profits generated by the partnership, from any and all sources, including but not limited to the Atlantic agreement,” Davis claims in his countersuit.

Davis previously left the band in 2004, but rejoined a year later. In December of last year, the band posted a message on its Facebook page about Davis’ departure.

Davis isn’t the first Paramore member to leave amid acrimony. In 2010, guitarist Josh Farro and drummer Zac Farro left the band amid some drama.

“We’re hopeful for Paramore’s future and we’re also excited for what Jeremy’s going to do next. Thank you all for your support and your belief in us,” Paramore said in December. “It’s kept us going.”

Varoom Whoa is seeking for a judge to declare Davis an employee who is ineligible to enjoy the benefits of a business partnership, while Davis is seeking for the company to be recognized as a partnership that entitles him to unspecified damages.

Reach Nate Rau at 615-259-8094 and on Twitter @tnnaterau.

Sourced From – http://www.tennessean.com/story/money/industries/music/2016/03/04/paramore-former-bassist-embroiled-legal-battle/81341824/

Neopets accused of violating California business law

Hoang Tran

Nov. 4, 2015, 9:53am

LOS ANGELES (Legal Newsline) – A virtual pet game service is facing a lawsuit over allegations it violated California business codes.

John Doe, on behalf of himself and those similarly situated, filed a class-action lawsuit on Oct. 27 in the California Central District Court against Neopets, Inc. for allegedly violating California’s Automatic Renewal Law and California’s Unfair Competition Law, as well as for failure to obtain consumers’ consent and provide acknowledgement of automatic renewal.

The plaintiff alleges that Neopets, which provides a subscription for its virtual pet and games products/services, made automatic renewal or continuous service offers to consumers throughout California, but failed to present the terms in a clear and conspicuous manner and in visual proximity to the request for consent to the offer before the subscription or purchasing agreement was fulfilled. The plaintiff also alleges that the defendants charged the plaintiff’s credit or debit card, or third-party account without first obtaining the plaintiff’s consent. The plaintiff argues that the defendant failed to provide an acknowledgment that includes the automatic renewal or continuous service offer terms, cancellation policy, and information regarding how to cancel.

The plaintiff is suing for damages and full restitution in the amount of the subscription payments already made. He also wants injunctive relief, attorney costs and any other rewards deemed just by the court. The plaintiff is represented by Scott J. Ferrell, Richard H. Hikida, David W. Reid and Victoria C. Knowles of the office of Newport Trial Group in Newport Beach, California.

U.S. District Court, California Central District Court Case number 2:15-cv-08395-DMG-PLA

Full Article – http://legalnewsline.com/stories/510646459-neopets-accused-for-violating-california-business-law

Small-business legal group urges Supreme Court to hear property case

By Lydia Wheeler – 10/19/15 11:23 AM EDT

The National Federation of Independent Business (NFIB) Small Business Legal Center is urging the Supreme Court to take a case out of California that questions whether a city can constitutionally force developers to sell certain housing units below market rates.

The case, California Building Industry Association v. City of San Jose, Calif., centers on a city rule that requires developers to set aside 15 percent of all newly constructed residential units for the city to use as affordable housing stock or opt out by paying a fee.

NFIB Small Business Legal Center is asking the Supreme Court to hear the case and reverse the California Supreme Court decision upholding the housing rule.

“Here we have the city of San Jose trying to use its power to bully landowners,” Karen Harned, the group’s executive director said in a news release. “Clearly, the constitution protects private property and the right of landowners to exercise their right to use and sell their property at market rate. The court should stop San Jose and other cities with similar schemes.”

The legal arm of the nation’s leading small-business association said the court should settle the lower court split and follow the legal precedence it set in Nollan v. California Coastal Commission. In that case, the court held that the government couldn’t require a landowner to dedicate property as a condition of a permit approval.

Read Full Article – http://thehill.com/regulation/court-battles/257306-small-business-legal-group-urges-supreme-court-to-hear-property-case