LJN Newsletters

Last month A&FP examined the dangers of considering profitability metrics in isolation ("Matter Profitability: When Metrics Mislead" by Steve Campbell). Board member Ed Wesemann now provides a similarly fresh look at the pitfalls of using "business-like" industrial cost accounting to make managerial judgments in a law firm. Ed's most recent book ' Creating Dominance: Strategies for Law Firms ' was featured in our June 2005 edition.

Recent rulings of importance.

Senate Majority Leader Bill Frist (R-TN) has publicly defended himself against allegations of insider trading by insisting that he was not aware of inside information when he sold his stock in Hospital Corporation of America (HCA), the hospital chain founded by his father and brother. He has also stated, numerous times since his election to the Senate, that because his HCA securities were in a "qualified blind trust," he could not even be certain about the extent of his holdings at any given time. Frist's civil and criminal exposure under the securities laws is likely to turn on interpretations of SEC Rule 10b5-1, which addresses trading "on the basis of" material nonpublic information in insider trading cases.

The June 2005 acquittal of HealthSouth founder and Chief Executive Officer Richard M. Scrushy on all charges in a high-profile federal corporate fraud prosecution was widely considered a surprising setback for the Department of Justice (DOJ). But even before the final acquittals in Scrushy, the trial judge's finding that the government's civil and criminal investigations had "improperly merged" resulted in the suppression of Scrushy's SEC deposition and the dismissal of three perjury charges based upon that testimony. United States v. Scrushy, 366 F. Supp.2d 1134, 1137 (N.D.Ala. 2005). Judge Karon Bowdre's decision provides an opportunity to review the law governing the proper conduct of parallel proceedings, and to ask when co-operation between civil enforcement and prosecutorial authorities contravenes those standards.

National rulings of interest to you and your practice.

As recently as 6 months ago, many commentators were proclaiming the demise of the attorney-client privilege and work product protection in the context of corporate internal investigations. It now appears that these predictions were premature. Law enforcement officials are becoming more sensitive to the legitimate reasons for protecting a corporation's ability to assert these privileges. Although, from the viewpoint of business, there's still a long way to go, companies have reason to be hopeful.

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

The day you have been waiting for has finally come. The patent application that your company believes covers key technology has issued. Your company may be, for example, a startup with its first marketable product or an established business trying to extend its presence in a niche market or enter into a new one. The patent provides your company the desired protection of the marketplace. There's just one problem. It appears that the scope of the patent may need to be altered to improve your position in the marketplace. For instance, a competitor may have successfully designed around the scope of your patent's claims. In some such instances, there may not be a pending application by which you, the patent owner, can capture the competitor, and post-issuance practice is the only mechanism. So, amending your claims, eg, to read on your competitor's products may seem like a sure way to capture him as an infringer and strengthen your position.