September 2011

patent reform billOn September 16, 2011, President Barack Obama signed into law the America Invents Act, a statute which may bring about the most comprehensive overhaul to our nation’s patent system since 1836.  The America Invents Act promises to bring United States patent law into conformity with international patent law (a necessity in a global-market).  One of the ways in which it will do so is by effectuating a change from a “first to invent” to a “first to file” system.  In addition, the Act restricts the way defendants may be joined in patent litigation.  The White House maintains that the changes in the patent system brought about by this Act will spur the creation of jobs, cut red tape, and reduce unnecessary patent-related litigation between competing innovators.  There are numerous critics, however, who believe the Act will, in fact, kill jobs, deter innovation, and harm small business at the expense of large corporations.

A patent is a set of rights furnished an inventor relative to a new object, process or design.   The patent system is intended to protect the inventor from competitors by providing the inventor the exclusive rights to market, manufacture, and sell the invention for the term of the patent.  This right is bestowed upon the inventor by the United States Patent and Trademark Office (“USPTO”), in exchange for making the invention available to the public.  In order to obtain a patent, the inventor must submit an application to the USPTO, and provide a list of “prior art” from which their invention was derived.   In order to receive a patent, an invention must be “novel” or take the “non-obvious” next step of a prior invention.

Although the America Invents Act touches on virtually every aspect of patent law, perhaps the most significant change in U.S. patent law will result from the enactment of a “first to invent” system of patent registration, a system currently employed internationally.   Under the current U.S. system, when there are rival patent applicants, the patent is awarded to the applicant who was first to invent the subject of the underlying patent, regardless of who filed their patent application first.  Although this system seems fair, it often leads to lengthy and expensive litigation, as both applicants attempt to prove that they first conceived the subject idea.   Moreover, the current system allows an inventor who conceived an idea, but who is not taking steps to realize their innovation, to stand in the way of other inventors who invest time and money to bring a similar idea to fruition.  In other words, many times the current system employed in the United States stands in the way of innovation rather than promoting it.  Under the “first to file” system, however, a patent is awarded to whomever first files their patent application.  The new system should provide a bright line rule which is expected to reduce litigation between competing applicants and diminish the backlog of applications, which currently stands at roughly 750,000.  In addition, by forcing inventors
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Co-authored by Brian Gross

Chances are, if you watch television, you’ve seen them – commercials in which attorneys promise financial compensation for those who have been diagnosed with an asbestos-related disease.  In their efforts to fulfill these promises, plaintiffs’ attorneys can pursue claims not only against solvent companies through the court system, but can also pursue claims against an ever-growing group of asbestos bankruptcy trusts.  These asbestos bankruptcy trusts – more than fifty in all – have billions of dollars with which to compensate asbestos claimants, and are becoming an increasingly important source of compensation for plaintiffs.  Just how important these trusts are as a source of compensation in each individual case, however, remains a mystery.  That is due to the fact that the current asbestos bankruptcy trust rules do not require the trusts to make public the payments they make to claimants.  That, combined with the fact that many courts have failed to require plaintiffs to disclose any information concerning trust claims, has resulted in a lack of transparency between the trusts and the tort system.  This lack of transparency creates an atmosphere for potential fraud, as it may allow a plaintiff to recover more than they would otherwise be entitled to collect from solvent companies in the tort system.  In an effort to combat this alleged “double recovery,” defendant companies in asbestos litigation, as well as their attorneys and insurance carriers, have called upon the federal government to take steps to create more transparency between the trusts and the tort system.

On Friday, September 9, 2011, the House Judiciary Committee’s Subcommittee on the Constitution held a hearing entitled, “How Fraud and Abuse in the Asbestos Compensation System Affect Victims, Jobs, the Economy and the Legal System.”  Led by Subcommittee Chairman Trent Franks, R-AZ, the Subcommittee heard testimony concerning alleged abuses associated with asbestos litigation, including forum shopping, witness coaching, and over-expansive legal theories. The heart of this debate, however, focused on the lack of transparency with respect to asbestos bankruptcy trusts, and how that lack of transparency harms companies which face asbestos claims.  Supporters of reform argue that plaintiffs should be required to disclose all bankruptcy trust filings so that payments by solvent defendants can be adjusted to reflect the compensation received from the trusts, and thus prevent double recovery by plaintiffs.

Under the current state of asbestos litigation, it is usually difficult for a defendant to obtain information concerning claims filed with bankruptcy trusts, which may include details of the claimants’ alleged asbestos exposure.  Defense attorneys argue that this information is vital to the defense of asbestos cases because it may uncover inconsistencies in plaintiffs’ testimony and could reduce the amount that a defendant may be required to pay if a plaintiff obtains a judgment.   This is especially true in several-liability states according to the most recent RAND report.

At this point, it is unclear whether Congress will act to help create the transparency sought by defense attorneys, insurance carriers, and asbestos defendants
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Co-authored by Brian Gross

Cargill Meat Solutions Corporation (“Cargill”) recently announced the voluntary recall of approximately 36 million pounds of ground turkey believed to be contaminated with salmonella.  The recall represents approximately 6% of the national production of ground turkey in a given year.  Federal Health authorities have attempted for several months to determine the source of a multi-drug resistant Salmonella Heidelberg outbreak that has killed one person and sickened 111 others in 31 states.  Authorities had previously traced the outbreak to ground turkey, but only recently determined that the contamination occurred in ground turkey products produced at Cargill’s Springdale, Arkansas plant between February 20 and August 2, 2011.   Cargill has suspended all production at its Springdale plant and is working with Federal authorities to determine the source of the contamination.

The Centers for Disease Control and Prevention (“CDC”) recently revealed that cultures of ground turkey taken between March 7 and June 27 from four different locations showed salmonella contamination, three of which were derived from the same source.  Additionally, a chart on the CDC’s website shows that multiple cases of illness have occurred each month since March, with the highest number of illnesses occurring in May and early June.   Despite determining that the illnesses of 77 individuals were related to the same strain of salmonella, Federal authorities were unable to prove a link to a specific source until now.

Salmonella is the most common bacterial form of food borne illness.  Symptoms typically include severe diarrhea, abdominal cramps and fever within 72 hours of consumption.  Salmonella is generally not life-threatening, though it can be to those with weakened immune systems.  It is safe to eat contaminated ground turkey provided it is cooked to an internal temperature of at least 165 degrees.  Consumers should be cognizant, however, of the potential risks of cross-contamination and be sure to wash their hands thoroughly as well as any surfaces which come into contact with meat.

As one can imagine, numerous lawsuits were recently filed by individuals allegedly sickened as a result of consuming the contaminated ground turkey processed by Cargill.  One such suit, brought by the law firm of Marler Clark on behalf of 2 Missouri residents, seeks punitive damages related to Cargill’s alleged failure to act despite knowledge that its product was contaminated.  An award of punitive damages, which is rare in food borne illness cases, would undoubtedly prompt increased litigation not only against Cargill, but also against any company whose contaminated products remain on the market for an extended period of time while government officials attempt to determine the source of the outbreak.  Such an award could also force manufacturers in future cases of potential contamination to take preemptive action and issue product recalls even before their product is definitively determined to be the source of the contamination.

 
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