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It is not every day that a Circuit Court of Appeals sets aside as unconstitutional a federal tax statute. When the taxability of untold millions of dollars of personal injury settlements and verdicts is affected, people generally take note. The U.S. Court of Appeals for the Fifth Circuit on Aug. 22 struck down as unconstitutional an amendment made to Code ' 104(a)(2) (All references to the Code are to the Internal Revenue Code of 1986 as amended). If the decision stands, it could be one of the most significant tax developments in decades.

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In September, the Institute of Medicine of the National Academy of Sciences, a congressionally created entity dedicated to the study of policy matters pertaining to the public health, issued the results of the study of federal drug safety policy commissioned by the Food and Drug Administration (FDA). The resulting report, titled 'The Future of Drug Safety, Promoting and Protecting the Health of the Public' and published in the Archives of Internal Medicine, has been widely anticipated in light of recent publicity surrounding Vioxx' and other drugs that, subsequent to FDA-approval, proved more dangerous than thought.

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Two Supreme Court rulings, <i>Daubert v. Merrill Dow Pharmaceuticals Inc.</i> and <i>Kumho Tire v. Carmichael</i>, have had a profound effect on the treatment of expert testimony in the courts. In 1993, the Supreme Court, in Daubert, articulated guidelines for admissibility of scientific expertise as testimony. Later, in 1999, in <i>Kumho</i>, the Court focused on the admissibility of clinical expertise as testimony. More recently there has been increasing recognition of the inconsistency of trial courts in their construction and articulation of evidentiary standards to medical testimony. One proposed remedy is that 'Physicians should respond by correcting courts' misinterpretations of medical practice and assisting in the development of legal standards that encourage thoughtful and informed consideration of medical testimony by judges and juries.'

The effect of the Supreme Court's May 2006 opinion in <i>eBay v. MercExchange</i> is already visible in the world of intellectual property litigation. A handful of subsequent district court opinions relating to damages and permanent injunctive relief for patent infringement have been handed down with outcomes substantially outside of what would have normally been expected less than even a year ago, using the <i>eBay</i> decision as precedent. Although the true and long-lasting effect of this decision on litigation remains to be seen, its directional influence is clear. However, what is unclear is the effect that <i>eBay</i> will have on real-world intellectual property management and investment. The appropriate manner in which to react to these recent changes in the litigation realm is currently an area of much discussion by corporate IP departments, patent licensing and enforcement companies (P-LECs) and financiers.

<i>'It has now been surprisingly discovered ' '</i>With these words in Purdue Pharma's U.S. Patent Nos. 5,656,295, 5,508,042 and 5,549,912, Endo Pharmaceuticals asserted a basis to challenge the enforceability of Purdue's controlled-release oxycodone formulations due to inequitable conduct. <i>Purdue Pharma L.P. v. Endo Pharms., Inc.</i>, 438 F.3d 1123 (Fed. Cir. 2006).

On Oct. 25, New Jersey stopped short of becoming the second state in the nation to legalize same-sex marriage by judicial fiat. The state's high court, while declaring unconstitutional state laws that deny same-sex couples the financial and social benefits and privileges given to married heterosexuals, held that fixing the problem is a legislative task ' and gave lawmakers 180 days in which to do it.

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New York's Dewey Ballantine and San Francisco's Orrick, Herrington &amp; Sutcliffe have taken another step toward completing a merger. According to a statement released Wednesday morning, the management and executive committees at both firms announced to their respective partners that they intend to recommend approving the combination. A full partnership vote at both firms is expected before the end of the year.

Highlights of the latest intellectual property news from around the country.