The U.S. Supreme Court today overruled Dr. Miles Medical Co. v. John D. Park & Sons, Inc., 220 U.S. 373 (1911), holding that the rule of reason (and not the per se rule) shall henceforth apply to antitrust claims alleging minimum resale price maintenance — as where a manufacturer forces retailers to agree to charge at or above a certain price.  If people can imagine a colorable reason why keeping retail prices high promotes competition, they may now get a pass.  Justice Kennedy wrote the 5-4 majority opinion; Justice Breyer authored the dissent.     Leegin Creative Leather Products, Inc. v. PSKS, Inc., No. 06-480 (June 28, 2007).  WSJ story here.

And, yes, Blawgletter — sadly — told you so.

Barry Barnett

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Today, the Texas Court of Criminal Appeals affirmed dismissal of a conspiracy charge against ex-House Majority Leader Tom DeLay.  The conspiracy charge related to a substantive charge that DeLay and two of his aides criminally violated the Texas Election Code by accepting unlawful political contributions.  The Court held that the conspiracy statute applied to felonies punishable under the Texas Penal Code but not under any other Texas statute, including the Election Code.  State of Texas v. Colyandro, No. PD-826-06 (Tex. Crim. App. June 27, 2007).

Four of the nine judge dissented.  And at least five, including a concurring judge, seemed to agree that the precedents on which the majority relied didn’t make sense.  Story from The Dallas Morning News here.

Barry Barnett

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The WSJ reports today that the Securities and Exchange Commission may have tabled the idea of letting a majority of public companies’ shareholders force arbitration of claims — effectively immunizing the companies and their insiders from class actions in court:

Mr. Cox also said at the widely anticipated hearing, involving testimony of all five SEC commissioners, that the SEC didn’t have "pending any proposal or other mature rule" to allow companies to move shareholder disputes into arbitration, instead of courts. SEC staff had explored allowing such a move as part of a broader look into giving holders more choice in the proxy process, an idea independent advisory groups recommended.

Read story here.  See also SEC May Grant License to Kill Securities Lawsuits.

Barry Barnett

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The Federal Circuit today decried the difficulty of steering a true path between the Scylla and Charybdis of patent law — infringement and validity.  In the case before it, the court focused on claim construction, an exercise that often determines which, if either, monster gets to eat you.  A broad construction tends to make a finding of infringement more likely (good for the patent holder) and validity less so (bad), and a narrow construction has the opposite tendencies.

The court’s ambivalence comes through in one paragraph especially:

While we reverse the district court on the issue of claim construction, we do not suggest that the resolution of the claim construction issue presented in this case, or in similar cases, is easy or that the outcome is dictated by straightforward application of patent law principles. . . . In many such cases, as in this one, we and the district court are required to draw sometimes conflicting inferences from different sources of guidance as to proper claim construction and to weigh those conflicting inferences in reaching a conclusion as to the proper construction.  After engaging in that process in this case, we reach a different result from that reached by the district court, but not easily.

The Saunders Group, Inc. v Comfortrac, Inc., 06-1576, slip op. at 14-15 (Fed. Cir. June 27, 2007).

Blawgletter says don’t worry about it.  Appellate courts disagree with trial judges all the time about the "plain" meaning of contracts; why should something different happen when the "contract" consists of an exclusive license (the patent)?

Barry Barnett

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(c) 2007 Barry Barnett.

Blawgletter has noticed that The New York Times reporters inject opinion into their news articles.  An article today, for example, interprets poll results as showing that young people support "liberal ideas" more than their elders — despite the fact that the poll reflects that most kids (unlike older folks) believe the war in Iraq will turn out okay.

We don’t blame the NYT for its views.  But we do wonder why its editors allow so much journalistic mingling of facts with the writers’ point of view.  Step back into the light, we plead.  A lot more Christopher Wren and Alan Cowell and far less Adam Nagourney.

At least the WSJ reports facts — and puts its zany opinions on the op-ed pages.

Barry Barnett

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Today the Sixth Circuit affirmed a judgment awarding a music publisher statutory damages and attorneys’ fees for willful infringement of its copyrights.  The defendant infringed by recording the melodies on a compact disk and adding graphics to allow projection of the lyrics on a screen.  Zomba Enterprises, Inc. v. Panorama Records, Inc. , No.s 06-5013 & 06-5266 (6th Cir. June 26, 2007).

Barry Barnett

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The Second Circuit today affirmed dismissal of a libel claim for lack of personal jurisdiction under the New York long-arm statute.  The court held that defamatory website statements about a Brooklyn moving company didn’t subject the Iowa website owner to jurisdiction in the Empire State.  The court also detailed New York’s general reluctance to take jurisdiction over defamation claims.  Best Van Lines, Inc. v. Walker, No. 04-3914 (2d Cir. June 26, 2007).

Barry Barnett

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Groundskeeper Willie.

Blawgletter’s firm started a Climate Change Litigation practice area last year.  Now it’s become a trend.  See today’s The Dallas Morning News story here.

We also noted this morning, with a smile, "Oil Companies Hope Grease Is the Word for Fuel" in The Wall Street Journal.  The story reminds us of an episode of The Simpsons, the one where Homer and Bart try to make money by collecting and selling animal fat.  They break into Bart’s school to drain the kitchen grease trap of its oleaginous bounty — only to have Groundskeeper Willy confront them for trying to steal his "retirement grease."  YouTube has the clip here.

Barry Barnett

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Blawgletter has noted that the U.S. Supreme Court ends its public sessions for the 2006 Term tomorrow, June 25, 2007.  [The Court announced that it will sit again on Thursday, June 28.]  We’ve also pointed out that the Court retains one big bidness law case to decide before the summer adjournment — Leegin Creative Leather Products v. PSKS, Inc., No. 06-480.  The outcome turns on whether enough, um, assertiveness animates a majority of the nine current Justices to overturn a nearly century-old precedent in which the Court declared minimum resale price maintenance illegal per se under federal antitrust law.  See Dr. Miles Medical Co. v. John D. Park & Sons Co., 220 U.S. 373 (1911).

Blawgletter doubts not that Their Honors do indeed possess ample assertiveness to overcome their previous brethrens’ notions about anti-competitive behavior.  Nor do we question the ascendancy of Chicago-style economics in antitrust analysis, however much we may differ with it.  But the impending rejection of Dr. Miles strikes us as an unnecessary whack at honest markets.

We just don’t buy the idea that a manufacturer’s coercion of retailers to furnish knowledgeable salespeople justifies forcing the retailers also to charge high prices.  The concept that other retailers will free ride on the helpfulness of in-store Willy Lomans seems to us as very near absurd, especially in this age of that Internet thing.  Fixing prices still equals fixing prices.

We draw comfort from Robert Frost, who expressed longing for the rightness of things:

The woods are lovely, dark and deep.
But I have promises to keep,
And miles to go before I sleep,
And miles to go before I sleep.

Barry Barnett

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