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BREACH OF CONTRACT Drugmaker and hospital settle royalties dispute Boston (AP)-Drugmaker Amgen Inc. has agreed to pay Massachusetts General Hospital $186 million to settle a dispute over royalties that the hospital was paid for its role in helping develop Enbrel, a drug used to treat rheumatoid arthritis and psoriasis. The one-time payment will free Amgen from obligations to pay future royalties from North American sales of Enbrel, the hospital said in a news release. The hospital will continue to earn royalties on sales of Enbrel made outside North America. The arthritis drug’s creation stems from research done at Massachusetts General led by a Harvard University researcher. The hospital signed a licensing agreement with Immunex Corp., the Seattle-based company that initially developed Enbrel in the 1990s. Amgen, based in Thousand Oaks, Calif., acquired Immunex in 2001 and began reviewing its licensing contracts. Defense contractor ends DoD dispute for $283M Hartford, Conn. (AP)-United Technologies Corp. said that it had agreed to pay $283 million to settle litigation over cost accounting for engine parts sold to the government from 1984 through 2004. The settlement between the company’s Pratt & Whitney aircraft engine business and the U.S. Department of Defense ends a dispute over allocation of overhead costs between commercial and government programs. CONSUMER PROTECTION Travel club told to pay $64M over hidden fees Dallas (AP)-A Texas state jury has returned a $64 million verdict against a travel club that sold “free” vacations that included hidden fees and falsely claimed that its activities were approved by the Texas attorney general and the Better Business Bureau. The jury ruled that Sun Country Travel Ltd. and its principals should pay $15.2 million in civil penalties and $49 million in restitution. The state Attorney General’s Office said the company had sold about 6,000 memberships at up to $4,000 apiece. The agency sued in 2003 after getting consumer complaints and sending undercover agents to company presentations. COPYRIGHTS Infringement suit yields $47.4M in punitives San Diego (AP)-A federal jury in California awarded Nortel Networks Corp. $47.4 million in punitive damages in a copyright infringement case against telecommunications retailer Platinum Networks and its president. Ontario, Canada-based Nortel sued San Diego-based Platinum in 2004 alleging that the company had stolen software that unlocks certain premium features in Nortel’s phone systems. Nortel claimed that Platinum and its president, Gerald Medina, then bought less expensive phone systems from Nortel, unlocked the features using the “Genkey” software, and resold them for premium prices. The jury found in favor of Nortel on the copyright infringement claim, but not on the trade secrets theft claim. RACE DISCRIMINATION FedEx drivers awarded $61M over racial slurs San Francisco (AP)-A California state jury has awarded $61 million to two FedEx Ground drivers of Lebanese descent who claimed that a manager harassed them with racial slurs for two years. Edgar Rizkallah, 43, and Kamil Issa, 36, claimed that they were called “terrorists” and “camel jockeys” and other epithets in 1999 and 2000 by Stacy Shoun, terminal manager for the Oakland, Calif., FedEx Ground facility where the two men were contract drivers. The jury awarded the men $50 million in punitive damages, on top of $11 million in compensatory damages that the jury had awarded them on May 24. REGULATORY ACTION Bank to pay $675M to settle fraud charges New York (AP)-Austria’s Bawag PSK bank will pay at least $675 million to avoid prosecution and to settle bankruptcy claims after admitting its role in the collapse of commodities brokerage Refco Inc. The bank, together with the Austrian Trade Unions Association, which owns Bawag, will forfeit $337.5 million to the United States to be distributed to victims of fraud at Refco. Bawag bought a 10% interest in New York-based Refco in 1999. The losses were revealed only two weeks after Refco went public in 2005, and led to the company filing for bankruptcy protection. Verizon pays $48.9M to settle pregnancy-bias suit New York (AP)-Verizon Communications Inc. will pay $48.9 million to settle charges that its predecessor companies Nynex and Bell Atlantic discriminated against employees who were pregnant or on maternity leave. The U.S. Equal Employment Opportunity Commission had alleged that the companies denied female employees service credit related to pregnancy and maternity leave taken between July 1965 and April 1979 and leaves for care of newborn children taken between July 1965 and December 1983.

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