Intellectual Asset M&A Due Diligence and Risk Management
March 29, 2006
In a typical corporate merger or acquisition, the associated intellectual assets exhibit several concurrent financial behaviors. On the balance sheet, intellectual assets behave like financial derivatives. On the asset side of the balance sheet, an intellectual asset creates the opportunity but not the obligation for an owner to capture above-average 'rents' from the sale of patented and/or branded goods and services ' a call option. An intellectual asset also creates the opportunity but not the obligation for an owner to assert patent rights against someone else, even if the owner is not using the rights otherwise ' a put option. On the liability side of the balance sheet, an intellectual asset holder may find himself targeted as a defendant where a host of incurred but not reported ('IBNR') historic events comprise a Pandora's box of expensive 'issues.' Hence, intellectual assets by their nature tend to generate volatile returns if the owner does not fully appreciate and manage associated risks.
Cameo Clips
March 29, 2006
Recent cases in entertainment law.
Medicare Liens
March 29, 2006
Faced with rising litigation costs and unpredictable juries, it is understandable that many product liability litigants ' on both sides of the courtroom ' eventually think about settlement in lieu of trial. In cases involving catastrophic injury, however, staggering medical expense liens often control the feasibility of reaching an acceptable agreement. Some lawyers have long dreaded settlement negotiations when Medicare is the major lien holder, because Medicare can be the proverbial 800-pound gorilla at the table. Unfortunately, with the enactment of the Medicare Prescription Drug, Improvement, and Modernization Act of 2003 (MPDIMA) the gorilla has only gotten bigger. To have any chance at taming the Medicare beast, lawyers on both sides need to understand the reach of a Medicare lien, as well as potential avenues for reducing or eliminating Medicare's interest in the settlement proceeds.
Snapshot Look At Current Adult Entertainment Biz
March 29, 2006
For a few days recently, I 'researched' the adult-entertainment industry for this article. I became curious as to just how big the industry was, what kind of money was being made and what companies owned, operated, managed and provided adult entertainment. In fact, there are multiple segments and sectors within the industry, with companies involved in movies, books and magazines, Web sites and software, nightclubs, adult-cable networks, pay-per-view services, telephone and online services, retail stores and catalogs.
Resolving U.S. Patent Disputes Outside of the U.S.
March 29, 2006
Patents, by their very nature, are territorial, granting a right to exclude in the country that issues them. Thus, a patentee seeking to enforce its U.S. Patent must do so in a federal district court or, if goods are being imported into the country, at the International Trade Commission ('ITC').
Music Industry Faces Tough Negotiations In Digital Music-Licensing Frontier
March 29, 2006
Howard Stern and Oprah Winfrey might have lent some serious star power to subscription-based satellite-radio networks XM and Sirius, but that doesn't mean the fledgling medium is ready for prime time. This year, XM Satellite Radio Holdings Inc. and Sirius Satellite Radio Inc. have to renegotiate their royalty agreements with record labels. Not only is the music industry intent on raising the licensing fees, it wants to stop the introduction of new satellite radio receivers that work more like an iPod than a radio.
Federal Circuit Finally Defines Materiality for Inequitable Conduct
March 29, 2006
After almost 15 years of admittedly dodging the issue, the Court of Appeals for the Federal Circuit in <i>Digital Control Incorporated v. Charles Machine Works</i>, ___ F.3d ___, 2006 WL 288075 (Fed. Cir., Feb. 8, 2006), finally determined that the U.S. Patent and Trademark Office Rule 56, as amended in 1992, does not supplement or replace existing case law in determining the threshold of materiality. The court stated that '[a]lthough we have affirmed findings of materiality based upon the new Rule 56, we have declined to address whether the Rule 56 standard replaced the old 'reasonable examiner' standard.' <i>Id.</i> at *4. Instead, the court found the Rule 56 standard merely 'provides an additional test of materiality' to the existing 'but for,' 'but it may have,' and 'reasonable examiner' tests.
Accidents Don't Just Happen
March 29, 2006
A well-intentioned journalist, who is not a physician, recently wrote an article in <i>The New York Times</i> asking why medical mistakes occur. There, the author advanced a theory that if doctors were better paid, there would be higher quality of care, and fewer misdiagnoses. This theory assumes that doctors are mainly motivated by money, which, in this author's opinion, is not the primary impetus for a doctor, or any other medical practitioner, to do the job right. The law defines medical negligence simply: the failure to do what a reasonably prudent practitioner would do in the same or similar circumstances. Medical negligence, in a legal sense, does not differ from other forms of negligence: When a person ' doctor or layman ' departs from the accepted standard of care, that is negligent conduct. Numerically, this vagary translates to mean that a practitioner has not deviated from the applicable standard of care if he or she does 'that which 51% of practitioners would do.'
Recognizing a Problem Is the First Step: Federal Circuit Acknowledges Unsettled Law, But Declines to Clarify
March 29, 2006
The tort of induced patent infringement codified in 35 U.S.C. '271(b) is a powerful tool that patent owners can use when it is not feasible or practical to sue a direct infringer. In order to prove this claim, a patent owner must establish that 1) its claim is directly infringed by a third party, 2) that the defendant induced that third party to infringe, and 3) that the defendant possessed intent to encourage that party to infringe.
