Apple v. Samsung  et al.

In the leading edge of dozens of disputes worldwide between Apple Inc. and Samsung Electronics Co. Ltd. over smartphone features, a federal jury in San Jose awarded Apple $1.05 billion on August 24. If the award stands—Samsung has appealed—it will rank as the largest patent verdict in history.

Since Apple filed its claims in U.S. district court in San Jose in April 2011, Samsung has filed counterclaims against Apple in Japan, Germany, the United Kingdom, the U.S. district court in Delaware, and the U.S. International Trade Commission. Apple, for its part, has a separate claim against Samsung before the San Jose court alleging that 17 more of Samsung’s products violate Apple patents. (On the day of the San Jose verdict, a South Korean court ruled that Samsung had not infringed some Apple patents in dispute in the San Jose case.)

In the San Jose trial, Apple claimed that 15 Samsung products included technology patented by Apple, violating seven patents. The patents in dispute included features such as the arrangement of text messages on the touch screen, "bounce back" scrolling, and the flat black face that the iPhone is known for. The company sought $2.75 billion in damages and a court-ordered halt to the sale of the offending Samsung devices, which include 14 smartphones and the popular Galaxy tablet. Samsung countersued, alleging that Apple had infringed five of its patents.

The Apple trial team was led by Harold McElhinny at Morrison & Foerster and William Lee at Wilmer Cutler Pickering Hale and Dorr. Charles Verhoeven at Quinn Emanuel Urquhart & Sullivan led Samsung’s trial team.

After two-and-a-half days of deliberation, the jury found that amsung had infringed six of the seven patents and rejected all of Samsung’s counterclaims. Apple has moved to stop the sale of Samsung products with the infringing technology; at press time a hearing was scheduled for December 6.

For plaintiff Apple Inc. (Cupertino, California)

Morrison & Foerster: Jason Bartlett, Richard Hung, Harold McElhinny, Michael Jacobs, Rachel Krevans, Jennifer Lee Taylor, and Alison Tucher. (All are in San Francisco.) The firm would not comment, but it has represented Apple in the past, winning a dismissal of infringement claims brought by SP Technologies Inc. against the company in May 2008.

Wilmer Cutler Pickering Hale and Dorr: Lauren Fletcher, Peter Kolovos, William Lee, Joseph Mueller, Mark Selwyn, and S. Calvin Walden. (Selwyn is in Palo Alto; Walden is in New York; and the rest are in Boston.) The firm is representing Apple in other ongoing cases against Samsung, and has represented the company in past patent suits, including one against Nokia Corporation at the ITC in which Apple won $600 million.

For defendants Samsung Electronics Co. Ltd. (Seoul) et al.

Quinn Emanuel Urquhart & Sullivan: Susan Estrich, Kevin Johnson, Victoria Maroulis, William Price, Kathleen Sullivan, Charles Verhoeven, and Michael Zeller. (Johnson and Maroulis are in Redwood Shores, California; Sullivan is in New York; Verhoeven is in San Francisco; and the rest are in Los Angeles.) The firm represents Samsung in other cases against Apple, including another in California and two ongoing ITC investigations. —Julie McMahon

U.S. v. Apple et al.

On September 5, U.S. District Judge Denise Cote in Manhattan approved a price-fixing settlement between the U.S. Department of Justice and three publishers of e-books. Cote signed off on the deal with Hachette Book Group, Simon & Schuster Inc., and HarperCollins ­Publishers Ltd. over objections of a fourth defendant, Apple Inc., which has been accused by both prosecutors and class action lawyers of conspiring with five leading publishers to jack up e-book prices.

At press time the other defendants—Apple, Macmillan Holdings LLC, and Penguin Group (USA) Inc.—had opted to fight on.

The Justice Department sued Apple and the five publishers in April, alleging that in 2010 they violated the Sherman Act when they switched from a so-called wholesale model for e-books (in which retailers sold books at whatever price they wanted) to an agency model (in which retailers agree to sell for a fixed price set by publishers in exchange for a fixed cut of the profits). Since that shift, e-book prices have jumped dramatically.

Under the terms of the deal, the three publishers will terminate their agreements with Apple and refrain from entering any contracts that restrict a retailer’s ability to set e-book prices for the next two years. The same three publishers also struck a separate $69 million settlement with a coalition of state attorneys general. At press time all five publishers and Apple still faced a proposed consumer antitrust class action before Judge Cote.

Apple filed a motion on August 15 urging Cote to reject the settlement—or at least to defer her decision until after a scheduled June 2013 trial. The deal, which forces publishers to tear up contracts with Apple, constitutes an "unprecedented" violation of due process rights, they argued. Many booksellers have also voiced opposition to the settlement, insisting that reverting to a wholesale model will allow Amazon.com Inc. to drive competitors out of business.

While Cote didn’t consider the merits of the price-fixing allegations in approving the settlement, she rejected an argument Apple raised in its defense: that the switch to an agency model was procompetitive because it broke up Amazon’s e-book stranglehold.

For plaintiff the United States of America

In-House: At the U.S. Department of Justice: director of litigation Mark Ryan and trial attorneys Lawrence Buterman, Laura Collins, and Stephanie Fleming.

For defendant Hachette Book Group (New York)

In-House: General counsel Carol Ross.

Freshfields: Walter Stuart, Paul Yde, and associates Hiram Andrews, Bryan Bloom, Samuel Rubin, and Richard Snyder. (Stuart and Rubin are in New York; the rest are in Washington, D.C.) Yde was hired in the Justice and state attorneys generals matters. Stuart joined when the class actions were consolidated.

For defendant HarperCollins Publishers Ltd. (London)

Skadden, Arps, Slate, Meagher & Flom: Clifford Aronson, Paul Eckles, and Shepard Goldfein. (They are in New York.) Skadden has long represented HarperCollins’s parent company News Corporation, including advising on its plan to split the media business into two companies, according to the firm’s website. The firm did not comment.

For defendant Simon & Schuster Inc. (New York)

In-House: Executive vice president and general counsel David Hillman .

Weil, Gotshal & Manges: Yehudah Buchweitz, James Quinn, andassociates Joseph Adamson, Jeff White, and Eric Wolfish. (White is in Washington, D.C.; the rest are in New York.) The firm, a regular outside counsel to parent company CBS Corporation, was lead counsel.

Proskauer Rose: Helene Jaffe and counsel Alan Kusinitz. (They are in New York.) Weil brought in Jaffe, a former partner, to assist in the case.

For defendant Apple Inc. (Cupertino, California)

O’Melveny & Myers: Andrew Frackman and counsel Edward Moss. (They are in New York.) The firm, which has represented Apple for years, was cocounsel.

Gibson, Dunn & Crutcher: Daniel Floyd, Daniel Swanson, counsel Jay Srinivasan, and asso­ciate Hane L. Kim. (Swanson is in Brussels and Los Angeles; Kim is in New York; and the others are in Los Angeles.) This was the first antitrust representation of Apple for the firm, which was cocounsel.

For defendant Holtzbrinck Publishers LLC d/b/a/ Macmillan Holdings LLC (New York)

Sidley Austin: John Lavelle, Joel Mitnick, and associate Alexandra Shear. (They are in New York.) The firm had no comment.

For defendant Penguin Group (USA) Inc. (New York)

In-House: Senior vice president–legal affairs and corporate counsel Alex Gigante.

Akin Gump Strauss Hauer & Feld: Daniel McInnis, Patricia Millett, Reginald Steer, Larry Tanenbaum, counsel David Donohoe, Allison Sheedy, and associates Gregory Granitto, Hyland Hunt, and James Tysse. (Steer is in San Francisco; Hunt is in Dallas; and the rest are in Washington, D.C.) The firm has been a regular U.S. antitrust counsel to Penguin since 1990. —Jan Wolfe, with Tom Coster

Lawrence v. Philip Morris USA

On August 21 New Hampshire’s highest court threw out a rare class certification in a consumer claim on behalf of state residents who bought Marlboro Lights.

A unanimous three-judge panel of the New Hampshire Supreme Court held that a class could not be certified because common issues didn’t predominate.

Lead named plaintiff Karen Lawrence sued the tobacco company in 2002, alleging that Philip Morris USA Inc. violated the New Hampshire Consumer Protection Act by falsely representing that Marlboro Lights would deliver less tar and nicotine than other cigarettes. Lawrence asserted that the light cigarette was worth less than the product Philip Morris promised, and sought damages for this difference in value.

In 2010 the trial court certified a class. In an interlocutory appeal, Philip Morris detailed all the information about light cigarettes available to consumers from 1976 to 1995.

In the court’s decision, Chief Judge Linda Dalianis noted that a variety of information was available during the period that indicated that light cigarettes were as harmful as regular cigarettes. As a result, she found, the court couldn’t assume that all people who bought the light cigarettes shared the same understanding of the risk.

For plaintiffs Karen Lawrence et al.

Korein Tillery: Max Gibbons and Stephen Tillery. (Gibbons is in Chicago; Tillery is in St. Louis.) On August 21 the firm filed a motion to reinstate a $10.1 billion lights class action verdict against Philip Morris in Third Judicial Circuit Court in Madison County, Illinois.

Douglas, Leonard & Garvey: Charles Douglas III, Jason Major, and C. Kevin Leonard. (They are in Concord, New Hampshire.) The firm was local counsel.

For defendant Philip Morris USA Inc. (Richmond)

Arnold & Porter: Judith Bernstein-Gaeta, Philip Curtis, John Massaro, and associate Michael Tye. (Curtis is in New York; the rest are in Washington, D.C.) The firm has long represented Philip Morris in smoking and health matters.

McLane, Graf, Raulerson & Middleton: Wilbur Glahn III. (He is in Manchester, New Hampshire.) The firm was local counsel.—Susan Beck, with T.C.

 

In Re TFT-LCD Antitrust Litigation

When does $30 million look like pocket change? Perhaps when the sum wipes out a $261 million trial verdict.

That damages reduction—scored by lawyers at White & Case on September 10 on behalf of Toshiba Corporation—marks the latest development in long-running multidistrict class action litigation over price-fixing in the LCD flat-panel market.

Both sides said the $30 million settlement avoids the uncertainty of further litigation.

The class actions were filed against a wide variety of LCD screenmakers beginning in 2007, sparked by a U.S. Department of Justice price-fixing investigation [Big Suits, November 2011]. The actions were originally lodged on behalf of the direct purchasers—consumers who bought products directly from the LCD screenmakers—and indirect purchasers, or consumers who bought products with the LCD screens via a retailer like Costco. Both groups claimed that the companies conspired to inflate prices of the panels. That litigation was consolidated as a multidistrict litigation in April 2007 before U.S. District Judge Susan Illston in San Francisco. Illston certified classes for both sets of plaintiffs.

Initial agreement with Toshiba was reached in August, a month after a jury trial ended with an $87 million verdict. (That amount would have been trebled under antitrust laws.) In posttrial motions, Toshiba’s lead trial and appellate lawyer, Christopher Curran of White & Case, argued that the company wouldn’t have to pay a cent once the verdict was offset by prior settlements with other defendants. Toshiba separately agreed to pay $21 million to settle claims brought by indirect purchasers of LCD panels.

The settlement was conditioned upon the court setting aside the jury verdict.

For direct purchaser plaintiff class

Lieff, Cabraser, Heimann & Bernstein: Eric Fastiff, Brendan Glack­in, Richard Heimann, Michele Jackson, Joseph Saveri, and associate Marc Pilotin. (Jackson and Saveri have left the firm; the rest are in San Francisco.) The firm was co–lead counsel.

Pearson, Simon, Warshaw & Penny: Clifford Pearson, Bruce Simon, Daniel Warshaw, counsel Robert Retana, and Aaron Sheanin, and associates Thomas Boardman and Veronica Glaze. (Pearson and Glaze are in Sherman Oaks, California; the rest are in San Francisco.) The firm was co–lead counsel.

Girard Gibbs: Elizabeth Pritzker. (She is in San Francisco.) The firm was liaison counsel.

For indirect purchaser plaintiff class

The Alioto Law Firm: Joseph Alioto. (He is in San Francisco.)

Zelle Hoffman: Francis Scarpulla. (He is in San Francisco.) The two firms did not comment. The firms were co–lead counsel.

For defendant Toshiba Corporation (Tokyo)

In-House: At Toshiba America Inc.: senior vice president and general counsel Thomas Gallatin . At Toshiba America Electronic Components Inc.: senior vice president and general counsel Julius Christen­sen and managing counsel–litigation Win Hwangbo.

White & Case: John Chung, Christopher Curran, J. Mark Gidley, and Martin Toto. (Curran and Gidley are in Washington, D.C.; the others are in New York.) Toshiba became acquainted with Curran when he represented another client in a different cartel case. —Vanessa Blum, with T.C.

Wilson et al. v. 7-Eleven et al.

The Kansas City Star triggered a wave of class actions across the country in 2006 when it estimated that expanding gas volumes in hot weather were costing consumers billions in hidden costs at the pump. On September 24 jurors in Kansas City, Kansas, delivered the first verdict in the resulting federal litigation, absolving three retailers at the center of the "hot fuel" mess.

In a win for the retailers’ counsel, Shook, Hardy & Bacon partners Tristan Duncan and Bradley Bodamer, the jury found that three retailers—QuickTrip Corporation, 7-Eleven Inc., and Kum & Go, L.C.—did not violate the Kansas Consumer Protection Act by failing to disclose the effects of temperature on the gas they sell.

Triggered by the media report, plaintiffs lawyers brought 52 putative class actions in 28 states and territories. The actions alleged that 80 retailers and oil refiners violated state laws by selling gas at temperatures well above the industry standard of 60 degrees Fahrenheit—without explaining to consumers that "hot fuel" contains less energy per gallon.

The cases were consolidated into multidistrict litigation before U.S. District Judge Kathryn Vratil in Kansas City. Lawyers for the putative consumer class voluntarily dismissed 21 of the 52 cases, and the MDL got whittled down even further in June, when 10 refiners and retailers, including Texaco Inc. and ­Exxon Mobil Corporation, reached a proposed settlement valued at $21 million. (That settlement, which at press time had not yet been approved, calls for some retailers, including Sam’s West, Inc. and Casey’s General Stores Inc., to convert their pumps to automatically modify prices to reflect temperature changes.)

In 2010 Vratil certified a class of Kansas gas purchasers for purposes of determining liability. After the plaintiffs voluntarily dismissed their claims for unjust enrichment, the trial kicked off on September 5. The jury took just one day to find for the retailers.

For plaintiff consumer class

Horn Aylward & Bandy: Robert Horn, K. Christopher Jayaram, and Joseph Kronawitter. (They are in Kansas City, Missouri.) The firm was court-appointed co–lead plaintiffs class counsel.

Girardi & Keese: Christopher Aumais, Thomas Girardi, Graham LippSmith, and Howard Miller. (They are In Los Angeles.) The firm was also appointed co–lead plaintiffs class counsel.

Walters Bender Strohbehn & Vaughan: Thomas Bender, J. Brett Milbourn, Kip Richards, counsel Amii Castle, and asso­ciate Garrett Hodes. (They are in Kansas City, Missouri.) The firm was appointed liaison counsel. The three firms did not return inquiries asking for comment.

For defendants QuickTrip Corporation (Tulsa) et al.

In-House: At QuickTrip: General counsel and chief financial officer Stuart Sullivan. At 7-Eleven: senior counsel–complex litigation Shawn Shearer. At Kum & Go: General counsel Charley Campbell.

Shook, Hardy & Bacon: A. Bradley Bodamer, Amy Crouch, Tristan Duncan, and James Muehlberger. (They are in Kansas City, Missouri.) The firm was selected by 13 corporate defendants involved in various hot-fuel litigation matters at a group beauty contest. —Jan Wolfe, with T.C.
 

WesternGeco v. Ion Geophysical

A federal district court jury in Houston returned a verdict on August 16 that a marine seismic surveying company, Ion Geophysical Corporation, willfully infringed four patents relating to geological analysis owned by a rival, a unit of oil field services company Schlumberger Limited. Jurors awarded Schlumberger’s WesternGeco LLC $93.4 million in lost profits and $12.5 million in reasonable royalties. An Ion customer named in the suit, Fugro N.V., settled with WesternGeco for a confidential amount during the trial.

The verdict is a resounding win for Schlumberger’s lawyers at Kirkland & Ellis, who were led by Washington D.C. partner Gregg LoCascio. Lee Kaplan of Smyser Kaplan & Veselka primarily handled the damages part of the case.

The case arose out of the lucrative business of providing underwater geological maps to oil and gas companies. In 2009 WesternGeco brought an infringement complaint against ION, which manufactures equipment for companies that perform seismic surveys. The dispute involved an ION product that keeps seismic imaging machines in place as they are towed across the ocean floor by exploration vessels. WesternGeco claimed that the product copied its patented steering technology.

ION’s lawyers at Porter Hedges moved for summary judgment in March, arguing that there was no evidence that ION or its customers used WesternGeco’s patented technology in U.S. territory. U.S. District Judge Keith Ellison in Houston wasn’t convinced, setting the stage for a four-week jury trial that kicked off July 23.

For plaintiff WesternGeco LLC (Houston)

In-House: At Schlumberger: Deputy general counsel, government affairs and litigation Dianne Ralston , managing counsel–IP enforcement Jaime Castaño, and counsel–IP enforcement Mitchell Blakely. At WesternGeco: managing counsel–intellectual property Kevin McEnaney.

Kirkland & Ellis: William Burgess, Timothy Gilman, Gregg LoCascio, John O’Quinn, Sarah Tsou, and associates Ryan Kane, Simeon Papacostas, Lauren Sabol, Leslie Schmidt, and Joyce Tam . (Burgess, LoCascio, and O’Quinn are in D.C.; the rest are in New York.) The firm has handled intellectual property cases for Schlumberger for some time.

Smyser Kaplan & Veselka: Lee Kaplan. (He is in Houston.) The firm was local counsel and has worked with Kirkland before .

For defendant ION Geophysical Corporation (Houston)

Porter Hedges: David Burgert, Jonathan Pierce, and Ray Tor­gerson. (They are in Houston.) The firm did not comment. —Jan Wolfe, with T.C.

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