Justia Antitrust & Trade Regulation Opinion SummariesArticles Posted in Civil Procedure
Neurelis, Inc. v. Aquestive Therapeutics, Inc.
Neurelis, Inc. (Neurelis) and Aquestive Therapeutics, Inc. (Aquestive) were pharmaceutical companies developing their own respective means to administer diazepam, a drug used to treat acute repetitive seizures (ARS). Neurelis was further along in the development process than Aquestive. According to Neurelis, Aquestive engaged in a “multi-year, anticompetitive campaign to derail the Food and Drug Administration” (FDA) from approving Neurelis’s new drug. Based on Aquestive’s alleged conduct, Neurelis sued Aquestive for defamation, malicious prosecution, and violation of the unfair competition law. In response, Aquestive brought a special motion to strike the complaint under the anti-SLAPP (Strategic Lawsuit Against Public Participation) statute. The superior court granted in part and denied in part Aquestive’s motion, finding that the defamation cause of action could not withstand the anti-SLAPP challenge. However, the court denied the motion as to Neurelis’s other two causes of action. Aquestive appealed, contending the court erred by failing to strike the malicious prosecution action as well as the claim for a violation of the UCL. Neurelis, in turn, cross-appealed, maintaining that the conduct giving rise to its defamation cause of action was not protected under the anti- SLAPP statute. The Court of Appeal agreed that at least some of the conduct giving rise to the defamation action was covered by the commercial speech exception and not subject to the anti-SLAPP statute. Accordingly, the Court held the superior court erred in granting the anti-SLAPP motion as to the defamation action. Some of this same conduct also gave rise to the UCL claim and was not subject to the anti-SLAPP statute too. However, the Court noted that Neurelis based part of two of its causes of action on Aquestive’s petitioning activity. That activity was protected conduct under the anti-SLAPP statute, and Neurelis did not show a likelihood to prevail on the merits. Thus, allegations relating to this petitioning conduct had to be struck. Finally, the Court found Neurelis did not show a probability of success on the merits regarding its malicious prosecution claim. As such, the Court held that claim should have been struck under the anti-SLAPP statute. View "Neurelis, Inc. v. Aquestive Therapeutics, Inc." on Justia Law
Mallet & Co., Inc. v. Lacayo
In 2019, Mallet learned that Bundy was its newest competitor in the sale of baking release agents, the lubricants that allow baked goods to readily separate from the containers in which they are made. Bundy was well-known for other commercial baking products when it launched a new subsidiary, Synova, to sell baking release agents. Synova hired two Mallet employees, both of whom had substantial access to Mallet’s proprietary information. That information from Mallet helped Synova rapidly develop, market, and sell release agents to Mallet’s customers.Mallet sued, asserting the misappropriation of its trade secrets. The district court issued a preliminary injunction. restraining Bundy, Synova, and those employees from competing with Mallet. The Third Circuit vacated and remanded for further consideration of what, if any, equitable relief is warranted and what sum Mallet should be required to post in a bond as “security … proper to pay the costs and damages sustained by any party found to have been wrongfully enjoined or restrained.” A preliminary injunction predicated on trade secret misappropriation must adequately identify the allegedly misappropriated trade secrets. If the district court decides that preliminary injunctive relief is warranted, the injunction must be sufficiently specific in its terms and narrowly tailored in its scope. View "Mallet & Co., Inc. v. Lacayo" on Justia Law
Ellison v. American Board of Orthopaedic Surgery
Ellison, an orthopedic surgeon who practices in California, wants to move to New Jersey and practice in the RWJBarnabas Health system. In order to obtain staff privileges, Ellis sought certification by the American Board of Orthopaedic Surgery (ABOS) around 2012. ABOS only certifies surgeons who successfully complete its multistep certification examination. Ellison passed the first step of ABOS’s exam, but ABOS prohibited him from taking the second step until he first obtained medical staff privileges at a hospital. Ellison has yet to apply for staff privileges. He believes the New Jersey hospitals where he desires to practice will reject his application, as their bylaws provide that they generally grant privileges only to physicians who are already board certified. Ellison sued ABOS in 2016. ABOS removed the matter to federal court. Ellison amended his complaint to allege that ABOS violated the Sherman Act, 15 U.S.C. 1. The District Court dismissed Ellison’s complaint for failure to state a claim for relief.The Third Circuit vacated with instructions to dismiss the case for lack of standing. Ellison has not attempted to apply for medical staff privileges or taken any concrete steps to practice in New Jersey. His assertions that ABOS has injured him are speculative. View "Ellison v. American Board of Orthopaedic Surgery" on Justia Law
Hetronic International v. Hetronic Germany GmbH, et al.
Hetronic International, Inc., a U.S. company, manufactured radio remote controls, the kind used to remotely operate heavy-duty construction equipment. Defendants, none of whom were U.S. citizens, distributed Hetronic’s products, mostly in Europe. After about a ten-year relationship, one of Defendants’ employees stumbled across an old research-and-development agreement between the parties. Embracing a “creative legal interpretation” of the agreement endorsed by Defendants’ lawyers, Defendants concluded that they owned the rights to Hetronic’s trademarks and other intellectual property. Defendants then began manufacturing their own products—identical to Hetronic’s—and selling them under the Hetronic brand, mostly in Europe. Hetronic terminated the parties’ distribution agreements, but that didn’t stop Defendants from making tens of millions of dollars selling their copycat products. Hetronic asserted numerous claims against Defendants, but the issue presented on appeal to the Tenth Circuit centered on its trademark claims under the Lanham Act. A jury awarded Hetronic over $100 million in damages, most of which related to Defendants’ trademark infringement. Then on Hetronic’s motion, the district court entered a worldwide injunction barring Defendants from selling their infringing products. Defendants ignored the injunction. In the district court and before the Tenth Circuit, Defendants focused on one defense in particular: Though they accepted that the Lanham Act could sometimes apply extraterritorially, they insisted the Act’s reach didn’t extend to their conduct, which generally involved foreign defendants making sales to foreign consumers. Reviewing this matter as one of first impression in the Tenth Circuit, and after considering the Supreme Court’s lone decision on the issue and persuasive authority from other circuits, the Tenth Circuit concluded the district court properly applied the Lanham Act to Defendants’ conduct. But the Court narrowed the district court’s expansive injunction. Affirming in part, and reversing in part, the Court remanded the case for further consideration. View "Hetronic International v. Hetronic Germany GmbH, et al." on Justia Law
Quadvest, LP v. San Jacinto River Authority
Plaintiffs Quadvest and Woodland Oaks filed suit against SJRA, a state entity, alleging that SJRA violated Section 1 of the Sherman Act when it entered into and enforced contracts relating to the purchase of wholesale water in Montgomery County, Texas. The district court denied SJRA's motion to dismiss.The Fifth Circuit affirmed, concluding that, for the purposes of the court's jurisdictional analysis, SJRA invokes state-action immunity as a state entity. Therefore, this interlocutory appeal is proper under the court's precedent. On the merits, the court concluded that the Texas Legislature did not authorize SJRA’s entry into and enforcement of the challenged groundwater reduction plan (GRP) contract provisions with the intent to displace competition in the market for wholesale raw water in Montgomery County. Therefore, SJRA is not entitled to state-action immunity at this stage in the proceedings. View "Quadvest, LP v. San Jacinto River Authority" on Justia Law
Reorganized FLI v. Williams Companies
In 2005, Appellee Reorganized FLI, Inc.1 (“Farmland”) brought an action against Appellants alleging violations of the Kansas Restraint of Trade Act (“KRTA”). Farmland sought, amongst other things, full consideration damages pursuant to Kan. Stat. Ann. section 50-115. In 2019, Appellants moved for summary judgment on Farmland’s claims, arguing the repeal of section 50-115 operated retroactively to preclude Farmland from obtaining any relief. The Kansas District Court denied the motion for summary judgment but granted Appellants’ motion for leave to file an interlocutory appeal with the Tenth Circuit Court of Appeals. Appellants sought reversal of the district court’s denial of summary judgment and a ruling ordering the district court to enter judgment in their favor. After review, for reasons different from the district court, the Tenth Circuit concluded 50-115 applied retroactively to foreclose Farmland from recovering full consideration damages, Farmland was entitled to other relief if it prevailed on the merits of its claims. Thus, the repeal of 50-115 did not leave Farmland without a remedy and Appellants were not entitled to summary judgment. View "Reorganized FLI v. Williams Companies" on Justia Law
Lee v. Luxottica Retail North America, Inc.
Lee, a San Francisco independent optometrist, sued corporate affiliates operating optical retail stores in California that offer competing eyeglass products and optometry services, on behalf of a putative class of independent optometrists. He alleged that the chain stores operated in a manner that violated state laws regulating the practice of optometry and the dispensing of optical products, constituting unfair and/or unlawful business practices in violation of California’s Unfair Competition Law (UCL). He claimed that “adults are, on average, willing to drive more than 20 miles for routine medical care” and that “[i]f patients had not been able to visit illegal optometry locations, a statistically significant and statistically ascertainable percentage of such patients would have instead visited at least one member of the Class. The complaint sought a judgment “[o]rdering the restitution/disgorgement of all sums obtained by Defendants through improper taking of market share from Class Members through violations of the UCL.”The court of appeal affirmed the suit's dismissal. Compensation for lost market share is not a remedy authorized by the UCL, because it does not constitute restitution, the only form of nonpunitive monetary recovery authorized under the UCL. Compensation for expected but unearned future income to which the plaintiff has no legal entitlement is not recoverable as restitution under the UCL, regardless of how it is characterized. View "Lee v. Luxottica Retail North America, Inc." on Justia Law
Chandler v. Phoenix Services LLC
In 2006 Heat On-The-Fly began using a new fracking technology on certain jobs. Heat’s owner later filed a patent application regarding the process but failed to disclose 61 public uses of the process that occurred over a year before the application was filed. This application led to the 993 patent. Heat asserted that patent against several parties. In 2014, Phoenix acquired Heat and the patent. Chandler alleges that enforcement of the 993 patent continued in various forms. In an unrelated 2018 suit, the Federal Circuit affirmed a holding that the knowing failure to disclose prior uses of the fracking process rendered the 993 patent unenforceable due to inequitable conduct.Chandler filed a “Walker Process” monopolization action under the Sherman Act, which required that the antitrust-defendant obtained the patent by knowing and willful fraud on the patent office and maintained and enforced that patent with knowledge of the fraudulent procurement, and proof of “all other elements necessary to establish a Sherman Act monopolization claim.” The Federal Circuit transferred the case to the Fifth Circuit, which has appellate jurisdiction over cases from the Northern District of Texas. The court concluded that it lacked jurisdiction because this case does not arise under the patent laws of the United States. View "Chandler v. Phoenix Services LLC" on Justia Law
Derma Pen, LLC v. 4EverYoung Limited
After years of litigation, Plaintiff-Appellant Derma Pen, LLC (“Derma Pen”) was granted a permanent injunction against Stene Marshall and three related corporations that he had formed. Shortly thereafter, Derma Pen moved for a contempt order against Marshall, alleging that he had violated the injunction. Derma Pen also sought a contempt order against Marshall’s brother and sister- in-law, Joel and Sasha Marshall, and DP Derm, LLC, a corporation Joel and Sasha owned (collectively, the “Related Parties”). Movant-Appellant Derma Pen IP Holdings LLC (“DPIPH”), Derma Pen’s successor in interest, joined Derma Pen’s motion shortly before the contempt hearing. In its motion, Derma Pen asserted that the Related Parties had acted in concert with Marshall to violate the injunction. The Related Parties prevailed in the contempt proceeding and subsequently moved for attorney’s fees under the Lanham Act, 15 U.S.C. 1117(a). The court granted the motion for fees, and Derma Pen and DPIPH appealed that award. The Tenth Circuit found that in its award of attorney’s fees to the Related Parties, the trial court relied upon a statutory provision in the Patent Act as interpreted by the Supreme Court in Octane Fitness, LLC v. ICON Health & Fitness, Inc., 572 U.S. 545 (2014). The issue presented for the Tenth Circuit’s review was whether the term “exceptional case” in the Patent Act differed in meaning from the same term used in the Lanham Act to a degree that required reversal. The Court concluded the exceptional case standard in the Lanham Act paralleled the standard in the Patent Act and affirmed. View "Derma Pen, LLC v. 4EverYoung Limited" on Justia Law
Gem State Roofing, Incorp. v. United Components, Inc.
Beginning in the 1980s and 1990s, two Idaho businesses did roofing work under substantially similar names: one, Gem State Roofing, Inc., performed work primarily in Blaine County (Gem State-Blaine); the other was a corporation operating under the name Gem State Roofing and Asphalt Maintenance, which also did business as Gem State Roofing. The latter was based in Boise, Idaho, and performed work in a significantly larger area. In 2011, Gem State Roofing and Asphalt Maintenance was succeeded in interest by United Components, Inc. (UCI.) Notwithstanding its change of name, it continued to do business as Gem State Roofing. In 2005, prior to UCI’s name change, the two businesses with similar names entered into a Trademark Settlement Agreement (TSA), prohibiting UCI from advertising, soliciting, or performing business in Blaine County, with exceptions for certain services (i.e., warranty, maintenance work, or work performed for previous customers). In addition, UCI agreed that if it received a request for work it was contractually unable to fulfil because of the TSA, it would refer the work to Gem State-Blaine. In 2018, Gem State-Blaine sued UCI, alleging it had breached the TSA when it advertised, solicited, bid on, and performed roofing work in Blaine County, and had failed to refer requests for work as required under the TSA. After a bench trial, the district court concluded that, despite UCI’s breach of the TSA and the implied covenant of good faith and fair dealing, Gem State-Blaine had failed to prove damages or that it was entitled to a permanent injunction. The district court further found that Gem State-Blaine had no protectable common-law trademark. Finally, the district court concluded that there was no prevailing party and declined to award attorney fees and costs. Gem State-Blaine timely appealed. UCI timely cross-appealed the district court’s denial of its request for attorney fees and costs. After review, the Idaho Supreme Court reversed in part, affirmed in part, vacated in part, and remanded for further proceedings. The district court’s refusal to enter a permanent injunction was reversed, and the court directed to enter a permanent injunction to enjoin UCI from any further breach of the TSA. The district court’s refusal to award attorney fees and costs as a sanction for UCI’s discovery violations, and the district court’s conclusion that Gem State-Blaine did not have a protectable common-law trademark against UCI were also reversed. The Supreme Court vacated the district court’s determination that neither party prevailed. The matter was remanded for the district court to determine whether there was a prevailing party, and to determine if attorney fees and costs should be awarded. The district court’s decision denying damages was affirmed. View "Gem State Roofing, Incorp. v. United Components, Inc." on Justia Law