May 2006

Law Firm's "Cynical Shenanigans" Draw Wrath of Massachusetts Judge

May 17, 2006

What Were They Thinking? Even the least experienced Massachusetts lawyer knows that when an answer to a lawsuit is not filed within the requisite 20 days and a default judgment is issued, the default is easily set aside as a matter of course based on even the flimsiest excuse. And, if the answer is filed only one day late professional courtesy mandates that the plaintiff permit the defendant to file late. Apparently some lawyers in a large Boston law firm (unidentified) never got this message: they refused to agree to set aside a default under these circumstances, forcing the defendant (who filed his answer one day late) to file a motion to remove the default. After reviewing the law and (predictably) setting aside the default, Superior Court Judge Mitchell Sikora slammed the plaintiff’s lawyers hard: Beyond the letter and purpose of the legal standards, conscientious judges and attorneys attempt to implement our litigation system with reasonable efficiency, civility, and common sense. This episode illustrates an egregious breach of those professional and cultural values. Counsel for Perrina Construction Company, a large Boston firm, has engaged in a mean-spirited and wasteful tactic. It has wasted the time and effort of an opposing attorney practicing in a small office. It has wasted the time and effort of the Superior Court. If one were to dramatize the public’s worst image of the contemporary litigator,…

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Supreme Court Swats "Patent Trolls"

May 16, 2006

Patents. “Patent trolls” or “patent litigation firms” — companies which buy patents not to produce a product or service, but solely to enforce them in the courts — must be quaking under their bridges this morning. In yesterday’s decision in eBay v. MercExchange the Supreme Court appears to have bought the anti-troll argument whole hog, giving the federal trial courts the discretion to enjoin a patent infringer, and to include in its decision factors such as whether a patent holder practices the patent, is a self-made inventor or university researcher (factors favoring an injunction) or instead has purchased the patent from the inventor to obtain license fees (a factor disfavoring an injunction). Before this case there was a more-or-less presumptive rule that a patent owner successful in proving infringement was entitled to stop continued use by the defendant, regardless of the identity of the patent owner. The eBay decision abolishes that rule; instead, the courts have been instructed to apply the traditional four-factor test for permanent injunctions, which weighs various equitable factors. This decision will make it much more difficult for a patent litigation firm to obtain a permanent injunction against an infringer, especially in cases where the threat of an injunction is used as a holdup device by patent holders who exploit the leverage they have when a patent covers only one component that is part of a multi-component…

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Surprise Victory for eBay

May 15, 2006

In what comes as something of a surprise decision, the Supreme Court today ruled in favor of eBay in eBay v. MercExchange, holding that judges do not have to automatically enjoin companies from using patents that they have been shown to have violated. This decision shifts the balance of power in patent litigation away from patent enforcers in favor of defenders. The decision comes as a surprise because, based on comments by the Justices during oral argument, it appeared that the Justices were leaning in the opposite direction. A link to the decision is [here]. An article discussing this case that I wrote for the April 28, 2006 issue of the Boston Business Journal while the case was pending is linked [here].

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Is It Defamatory To Call Someone a "Dumb Ass"?

May 5, 2006

What Were They Thinking? Three California appeals judges thought not. In dismissing a defamation suit by two politicians who were listed as numbers one and two on a list of “Top Ten Dumb Asses,” the Court observed: The accusation that plaintiffs are top-ranking “Dumb Asses” cannot survive application of the rule that in order to support a defamation claim, the challenged statement must be found to convey “a provably false factual assertion.” . . . A statement that the plaintiff is a “Dumb Ass,” even first among “Dumb Asses,” communicates no factual proposition susceptible of proof or refutation. It is true that “dumb” by itself can convey the relatively concrete meaning “lacking in intelligence.” Even so, depending on context, it may convey a lack less of objectively assayable mental function than of such imponderable and debatable virtues as judgment or wisdom. To call a man “dumb” often means no more than to call him a “fool.” One man’s fool may be another’s savant. Indeed, a corollary of Lincoln’s famous aphorism is that every person is a fool some of the time. Here defendant did not use “dumb” in isolation, but as part of the idiomatic phrase, “dumb ass.” When applied to a whole human being, the term “ass” is a general expression of contempt essentially devoid of factual content. Adding the word “dumb” merely converts “contemptible person” to “contemptible fool.”…

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Of eBay, "Patent Trolls" and the Right to an Injunction

May 5, 2006

Patents. I wrote an article under the above title [link] which was published in the Boston Business Journal on April 28, 2006.

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Supreme Court Weighes in on Joint Ventures and Price Fixing

May 3, 2006

Antitrust. While most people don’t know a lot about antitrust law, they do know that price fixing is illegal. And, if you asked them whether two large oil companies, such as Texaco and Shell, could form a joint company to sell oil throughout the western U.S. at a single price, they’d probably say that the “joint venture” was a technicality, and that it was no different than if Texaco and Shell got together and decided to sell gas at the same price individually. Well, the Supreme Court would not agree. In Texaco v. Dagher [link] a case decided earlier this year, the operators of 23,000 service stations selling under the Texas or Shell brands of gasoline challenged the western states joint venture of the two giant oil companies for marketing gasoline, with the product still sold under both the Texaco and Shell brands but at the same price. The Court held that such a joint venture is not “per se” illegal (illegal on its face and indefensible), because Texaco and Shell did not compete directly in the market, but participated jointly through their investment in the joint venture corporation. “As such, though [the joint venture's] pricing policy may be price fixing in the literal sense, it is not price fixing in the antitrust sense,” wrote Justice Thomas. This case is important law for joint ventures — it gives parties the…

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