My SERIUOS thoughts about ACACIA based upon sex.com litigations studies - GoFuckYourself.com

Serge_Oprano · 10-25-2003, 07:12 AM

Legal Eagles, correct me if I am wrong.

http://www.oprano.com/msgboard/index...=ST&f=1&t=6566

Serge_Oprano · 10-25-2003, 07:26 AM

with ADDITIONAL info added

KRL · 10-25-2003, 07:29 AM

Yes

Serge_Oprano · 10-25-2003, 07:34 AM

link to the similar case has been posted,
including the course of action the defendants took

Odin88 · 10-25-2003, 07:35 AM

It's one thing to spam your own forum a few times, but in EVERY thread?

Serge_Oprano · 10-25-2003, 07:44 AM

Quote:

Originally posted by Odin88
It's one thing to spam your own forum a few times, but in EVERY thread?

talk to Lensman and hear
"GoFuckYourself" twerp, leave SERGE alone,
he is the MAN and you are piece of shit,
from the horse's mouth...

Forest · 10-25-2003, 07:45 AM

Quote:

Originally posted by Serge_Oprano

talk to Lensman and hear
"GoFuckYourself" twerp, leave SERGE alone,
he is the MAN and you are piece of shit,
from the horse's mouth...

and his ass too

Odin88 · 10-25-2003, 07:46 AM

Quote:

talk to Lensman and hear
"GoFuckYourself" twerp, leave SERGE alone,
he is the MAN and you are piece of shit,
from the horse's mouth...

You only think I am a piece of shit because you know no better. I click on threads topics which sound interesting, and I am getting sick of clicking on one of your threads and seeing a link to your ugly (bad design) forum. Guess I will just add you to ignore.

Serge_Oprano · 10-25-2003, 07:47 AM

Quote:

Originally posted by Odin88

You only think I am a piece of shit because you know no better. I click on threads topics which sound interesting, and I am getting sick of clicking on one of your threads and seeing a link to your ugly (bad design) forum. Guess I will just add you to ignore.

please don't, I'll commit suicide if you do,
I can't live without the attention of the sig whore.....

Serge_Oprano · 10-25-2003, 07:48 AM

and also,
small correction,
you are NOT piece of shit,
you are a piece of very soft piece of shit,
BIG difference
;-)))

Odin88 · 10-25-2003, 07:49 AM

Quote:

please don't, I'll commit suicide if you do,

Yeah, with the amount you spam though - I doubt I will be the only one.

Forest · 10-25-2003, 07:49 AM

Quote:

Originally posted by Odin88

You only think I am a piece of shit because you know no better. I click on threads topics which sound interesting, and I am getting sick of clicking on one of your threads and seeing a link to your ugly (bad design) forum. Guess I will just add you to ignore.

try NOT CLICKING

i know its hard but...

Serge_Oprano · 10-25-2003, 07:50 AM

Quote:

Originally posted by Odin88

Yeah, with the amount you spam though - I doubt I will be the only one.

well,
I can commit a LOT of suicides...for your little pieces of shits amusement
;-)))

Odin88 · 10-25-2003, 07:51 AM

Quote:

try NOT CLICKING

i know its hard but...

Thats the point, I come here to see a thread and all I see is his one line of spam. Anyway, it's annoyed me long enough. No point bumping his useless spam anymore. Will just block him.

Serge_Oprano · 10-25-2003, 07:53 AM

Quote:

Originally posted by Odin88

Thats the point, I come here to see a thread and all I see is his one line of spam. Anyway, it's annoyed me long enough. No point bumping his useless spam anymore. Will just block him.

your peeppee is way to small to do ANYTHING about it, little piece of shit
;-)))

Markit · 10-25-2003, 07:59 AM

Quote:

Originally posted by Odin88
It's one thing to spam your own forum a few times, but in EVERY thread?

Serge_Oprano · 10-25-2003, 08:16 AM

link to Laches Defense Doctrine is added

Serge_Oprano · 10-25-2003, 08:25 AM

similarities between Acacia Case and Lemelson case links added,
and now I am off to shooting range for target practice
;-))

rebel23 · 10-25-2003, 08:35 AM

Serge, take no notice... your post is very informative and pertinent, more so than the crap you often get round here!

Serge_Oprano · 10-25-2003, 08:37 AM

Quote:

Originally posted by rebel23
Serge, take no notice... your post is very informative and pertinent, more so than the crap you often get round here!

that's why I used word SERIOUS, all others must be avoided
;-))

LadyMischief · 10-25-2003, 08:38 AM

Quote:

Originally posted by Odin88

You only think I am a piece of shit because you know no better. I click on threads topics which sound interesting, and I am getting sick of clicking on one of your threads and seeing a link to your ugly (bad design) forum. Guess I will just add you to ignore.

All this coming from a self-admitted post whore.. How much did you earn from THIS thread so far?

Thanks for coming out though.

LadyMischief · 10-25-2003, 08:38 AM

Quote:

Originally posted by Serge_Oprano
similarities between Acacia Case and Lemelson case links added,
and now I am off to shooting range for target practice
;-))

Better not teach your beautiful wife to shoot, just in case, sweetie

Serge_Oprano · 10-25-2003, 08:41 AM

Quote:

Originally posted by LadyMischief

Better not teach your beautiful wife to shoot, just in case, sweetie

actually, she is much better shooter than me...and can stay much longer at it
;-)))

LadyMischief · 10-25-2003, 08:45 AM

Quote:

Originally posted by Serge_Oprano

actually, she is much better shooter than me...and can stay much longer at it
;-)))

Better make sure she always gets her quota of orgasms, then, eh?

fiveyes · 10-25-2003, 08:46 AM

Sorry, you're wrong, Serge.

You're confusing prosecution of a patent with the enforcement of it. Prosecution is what happens during the time from the filing of the application until the granting of the patent. Once the patent is issued, it is no longer being prosecuted.

Reread all your cites and you'll see that the "Prosecution Lach Argument" deals solely with the amount of time that passed from the filing to the granting of the application, not from the time it was granted to the time enforcement of the patent was sought.

Serge_Oprano · 10-25-2003, 08:52 AM

maybe I am...I am a writer, not a readr,
but this is also very interesting:

JOINT DEFENSE ARRANGEMENTS RAISE ANTITRUST ISSUES
JOINT DEFENDANTS SHOULD AVOID CONDUCT THAT RESTRICTS THEIR FREEDOM TO SETTLE INDIVIDUALLY

by John E. Daniel
DEFENDING AGAINST patent infringement claims can be a long, disruptive and costly enterprise. It is not surprising that in cases involving several defendants, the defendants often enter into joint defense arrangements by which they share costs and information and develop litigation strategies. Such arrangements, however, have potential antitrust implications.

The patentee may charge that the defendants' joint activities constitute a group boycott against the patentee in violation of the antitrust laws. To protect against such claims, joint defense participants should avoid any conduct or agreement that restricts their freedom to negotiate settlement individually; or that, although not fully constituting such a restriction, has the effect of facilitating such a restriction as to a joint defense member-such as requiring notice to other joint defense members before conducting settlement discussions with the patentee.

Sec. 1 of the Sherman Act [FN1] is one of the fundamental provisions of federal antitrust law. It prohibits contracts, combinations or conspiracies in unreasonable restraint of trade. Such conduct by two or more entities acting together is generally called "concerted activity"-that is, parties acting in concert.

One form of concerted activity barred under Sec. 1 is the group boycott. A group boycott is group action to coerce a third party to conform to a pattern of conduct desired by the group or to secure the removal of the third party from competition. An example is an agreement by manufacturers not to buy from a particular supplier. Similarly, group action to refuse to take a patent license could violate Sec. 1.

It is not fully settled whether such a refusal constitutes a per se Sec. 1 violation or whether it should be examined under the more forgiving rule-of- reason analysis. The key analytical element in either approach, however, is determining whether a restriction was placed on the freedom of potential or actual defendants in a patent suit to negotiate settlement independently with the patentee.

If a defendant has that freedom, there is no antitrust violation. As that freedom is restricted-directly or indirectly-the risk of violating Sec. 1 increases. Three cases illustrate the development of antitrust law governing joint defense arrangements.

The Case in Briefs

In Jones Knitting Corp. v. Morgan, [FN2] John E. Morgan obtained a patent on knitted circular thermal fabric and garments. He sent a telegram to 17 large buyers of underwear. Twelve underwear companies attended a meeting at the Underwear Institute, where they decided to hire an attorney to conduct a search and render an opinion regarding the patent's validity. Each company pledged money to pay attorney fees and defense-related costs if a lawsuit ensued.

They also agreed that no member was to approach the patentee individually regarding a license until after the attorney's opinion had been received and without first consulting the other members. In addition, they agreed that in the event the patentee approached any member, that member would not act until the others were notified.

The patent attorney rendered an opinion that the patent was invalid. As a result, the members brought a declaratory judgment action against the patentee to declare the patent invalid. They then agreed further that no member would negotiate with the patentee without first notifying the others. This restriction was to remain in effect until the court ruled.

The patentee charged that the group action to refuse to take a license violated Sec. 1. of the Sherman Act. The district court agreed, finding that each party had "circumscribed his freedom by promising not to take a license until he had informed the others...thus a group was formed not only for purposes of bringing a suit, but also for purposes of refusing to negotiate with Morgan for licenses." [FN3]

The court also concluded that "[w]hether or not the plan was designed to allow the group to force a dissenter back into line-by peaceful persuasion or overt coercion-and whether or not any individual considered his freedom of action impeded, that freedom was in fact impeded. The freedom of each plaintiff to deal freely with Morgan was restrained by the requirement of giving notice." [FN4]

Based on then-existing antitrust law, this conduct was ruled a per se violation of Sec. 1.

Laissez Faire in Laser Case

In Gould v. Control Laser Corp., [FN5] patentee Gordon Gould charged that various laser industry companies, under the guise of a common defense fund, violated Sec. 1 by attempting to coerce him to license the conspirators on unfavorable terms. There had been a conference of all companies, at which contributions for a common defense fund were solicited.

Mr. Gould relied heavily on Jones Knitting. Although the court did not apply the per se test adopted in Jones-in light of intervening U.S. Supreme Court decisions concerning boycotts-it did agree with the Jones approach that a party's freedom to settle was the touchstone of the antitrust analysis.

Mr. Gould charged that the defendants, in order to present a united industry front, agreed not to accept licenses from him except upon terms agreeable to the entire group. The court held that if such an agreement had been executed, it would violate Sec. 1 because it "unquestionably restrained the freedom of each group member to act as an individual producer in the laser market, free to contract or not contract with whom it chooses." [FN6]

The court, however, went on to find that the facts did not demonstrate this type of restraint on the freedom of individual defense group members to negotiate licenses. In so doing, it made clear that the antitrust laws ordinarily would pose no barrier to agreements among competitors to share costs of litigation affecting their common interests.

A Contrived Conspiracy

The reasoning of Gould was adopted in Lemelson v. The Bendix Corp., [FN7] a case in which a well-known patent plaintiff, Jerome H. Lemelson, charged that Bendix, along with Brown & Sharpe Manufacturing Co., violated Sec. 1 by their joint activities in defending against his patent infringement claims. As in Gould, the court found it unnecessary to decide whether the activity should be analyzed under the per se rule or the rule of reason. Its decision was based instead on its view that there was no evidence of a restriction on the defendants' freedom to negotiate settlements independently.

Mr. Lemelson attempted to make various actions of the defendants and their joint counsel-actions reasonable under the circumstances-appear nefarious and conspiratorial. Among other things, he pointed out that the defendants shared settlement information, had the same trial counsel who made "joint" offers of settlement, had talked about presenting a "united front" and had never reached settlement.

The court rejected these as evidence of anti-competitive conduct because, ultimately, they did not-alone or together-demonstrate that the respective parties had subordinated their independent judgment to the collective judgment of the group in dealing with Mr. Lemelson.

In the court's view, sharing of information was insufficient unless it could be shown that the parties acted "in contradiction to their legitimate economic interests." Indeed, the court noted that "a plaintiff suing different parties for the same reason creates an incentive among the adverse parties to cooperate in the preparation of their respective defenses." [FN8]

The presence of a common counsel offering a joint settlement was inadequate as well, because there was no evidence that the the participants subordinated their independent judgment in dealing with the plaintiff. Thecourt noted that "the crucial concern for purposes of antitrust scrutiny is the locus of decision-making power and, as long as there is not evidence that a defendant has surrendered its decision-making capacity, there is no basis for antitrust liability." [FN9 ]

As for the "united front" language, the court pointed out that this was suggested by a third party and not specifically assented to by Bendix and Brown & Sharpe.

And as for the claim that the failure to settle showed that there had been an agreement not to deal with the plaintiff, the court stated, "[T]here is simply no rule of law which prohibits parties from spending more on their defense than it would take to settle the case, nor does such conduct provide a basis for inferring the existence of a conspiracy." [FN10]

Practical Guidance

In light of the case law, some practical guidance can be offered.

-- Joint defendants can contribute money to common funds to further their joint defense.

Serge_Oprano · 10-25-2003, 08:52 AM

continued:

-- Joint defendants can discuss the merits of their defense. Thus, there is no problem in discussing, or reaching agreement about legal theories of, claim interpretation, infringement and validity, in identifying and analyzing prior art or in addressing any other issue properly relating to the defense of a potential or actual patent suit.

-- Joint defendants ordinarily are free to exchange information relevant to their common defense. They must be cautious, however, about discussing proposed settlement amounts.

Once they begin to discuss amounts, the patentee may argue that this information was supplied to influence other members in granting or withholding clearance, which would evidence a restraint on their right to settle independently. So, although exchange of proposed settlement amounts theoretically is permissible, it can create the appearance of an antitrust violation and thus expose the parties to unnecessary risk.

By contrast, disclosure of actual settlement amounts already agreed upon and paid is less likely to raise such risk because it relates to a past event. Thus, it would have no impact on the decision-making of the party that already entered into such an agreement. A patentee might argue however, that the settlement amount was being disclosed to direct other defendants to settle on similar terms. So, even here there may be some antitrust risk.

-- Joint defendants should never agree to any kind of prior approval or veto arrangement under which one of them can prevent another from settling on terms the latter thought appropriate. A limited exception to this rule relates to confidential information exchanged in the joint defense pact.

Typically, joint defense agreements require signatories to promise to keep information exchanged within the group confidential. Thus, if it appears that a defendant's proposed settlement agreement would breach this provision, the members of the group would have a legitimate interest-which would not implicate the antitrust laws-in insisting that confidential information not be disclosed to the patentee.

-- Joint defendants should never agree to a requirement that before conducting negotiations with a patentee, they first notify other members of their intent to do so. Such prior notice could have a "chilling effect" on independent negotiations and thus may be seen as facilitating restrictions on negotiating freedom. The requirement of prior notice can be distinguished from simply volunteering to give notice, without being required to do so, before negotiating. The risk, however, is that the volunteering of notice could be characterized by the patentee as evidence of an agreement that notice was required under an informal agreement.

-- Joint defendants should be careful about the language they use in their discussions and documentation developed in connection therewith. For example, statements such as "we must present a united front" enable the patentee to argue that there was an unwritten agreement pursuant to which the defendants imposed restrictions on one another with regard to settlement.

-- If a joint defense agreement is executed, it should include a provision stating that each party fully retains its right to settle independently with the patentee. First, this makes it clear to all defendants that restrictions on settlement will not be tolerated and cannot be imposed. Second, this could be persuasive in rebutting a patentee's claim that restrictions were imposed.

-- Although some common positions may be adopted by members of a defendant group, it typically is preferable that each defendant present them to the patentee individually through its own counsel-that is, to avoid joint offers of settlement.

FNa. Mr. Daniel is a partner in the intellectual property and technology law department at New York's Kramer, Levin, Naftalis & Frankel, where he specializes in intellectual property and antitrust law. He is on the board of directors of the New York Intellectual Property Law Association and is a former chairman of the association's Antitrust, Inequitable Conduct and Misuse Committee.

fiveyes · 10-25-2003, 09:07 AM

You bring up a valid point there, especially regarding Acacia which has filed suit for exactly that against the companies that (have) prevailed (to date) against the V-Chip infringement claims. However, I'm certain the defense group and FightThePatent are aware of this possibility and are prepared to deal with it when it finally may become an issue.

Patent litigation is a long, drawnout process that is complex and expensive. There are a number of different strategies that are available to fight claims of infringement, each of them with their own advantages and risks. The advantage of pooling resources by a group of defendents is obvious. The risk is later to be found that they did so unfairly.

LadyMischief · 10-25-2003, 09:07 AM

Excellent article, Serge

fiveyes · 10-25-2003, 09:16 AM

Quote:

Originally posted by Serge_Oprano
maybe I am...

No maybe about this one, you are definitely wrong. With patents, prosecution has nothing to do with enforcement actions.

Serge_Oprano · 10-25-2003, 09:24 AM

Quote:

Originally posted by fiveyes

No maybe about this one, you are definitely wrong. With patents, prosecution has nothing to do with enforcement actions.

from my last post on Oprano:

well,
I am not a lawyer and upon futher thinking,
I have decided to take myself out of the entire Acacia discussion.

I don't wanna a bunch of GFY morons benefit from it in any shape and form...
http://www.gofuckyourself.com/showth...hreadid=189866

I seem to dislike MORONS much more than Acacia....

fiveyes,
I gotta read what I posted to either argue with you or agree with you and Saturday time is at the premium,
especially after I lost all interest in the matter...

corvette · 10-25-2003, 09:25 AM

good post serge

learned a new word

Kevin2 · 10-25-2003, 09:32 AM

Serge thank you for all your research and very interesting info it is greatly appreciated

fiveyes · 10-25-2003, 09:34 AM

Quote:

Originally posted by Serge_Oprano

from my last post on Oprano:

well,
I am not a lawyer and upon futher thinking,
I have decided to take myself out of the entire Acacia discussion.

I don't wanna a bunch of GFY morons benefit from it in any shape and form...
http://www.gofuckyourself.com/showth...hreadid=189866

I seem to dislike MORONS much more than Acacia....

fiveyes,
I gotta read what I posted to either argue with you or agree with you and Saturday time is at the premium,
especially after I lost all interest in the matter...

No problem, I just went by your word in the first posting of this thread. No harm, no foul.

10-25-2003, 07:12 AM	#1
Serge_Oprano So Fucking Banned Join Date: Feb 2002 Posts: 9,820	My SERIUOS thoughts about ACACIA based upon sex.com litigations studies Legal Eagles, correct me if I am wrong. http://www.oprano.com/msgboard/index...=ST&f=1&t=6566

10-25-2003, 07:29 AM	#3
KRL Entrepreneur Join Date: Oct 2002 Location: USA Posts: 31,429	Yes __________________ If you would like to develop your domains, you can lease inexpensive foreign labor from the leaders in the field at iWebmasters.com TO LOWER YOUR COSTS AND INCREASE YOUR PRODUCTION! * * * * * * * * * * * * Domains Adult News KRL's Newsletter Biz Tips Just Listed Domains

10-25-2003, 08:46 AM	#25
fiveyes Confirmed User Join Date: Aug 2001 Location: New Orleans Posts: 1,680	Sorry, you're wrong, Serge. You're confusing prosecution of a patent with the enforcement of it. Prosecution is what happens during the time from the filing of the application until the granting of the patent. Once the patent is issued, it is no longer being prosecuted. Reread all your cites and you'll see that the "Prosecution Lach Argument" deals solely with the amount of time that passed from the filing to the granting of the application, not from the time it was granted to the time enforcement of the patent was sought. __________________ <CENTER><A HREF="http://www.hot-off-bourbon.com/" target="_blank"><IMG SRC="http://www.hot-off-bourbon.com/images/hob-logosmall.jpg" border="0"></A> <FONT face="Comic Sans MS" SIZE="-1"><I>Mardi Gras, Spring Break, Wet-T, Night Club Action, UpSkirt, Oil Wrestling, Voyeur</I></FONT></CENTER> Last edited by fiveyes; 10-25-2003 at 08:49 AM..

10-25-2003, 09:07 AM	#28
fiveyes Confirmed User Join Date: Aug 2001 Location: New Orleans Posts: 1,680	You bring up a valid point there, especially regarding Acacia which has filed suit for exactly that against the companies that (have) prevailed (to date) against the V-Chip infringement claims. However, I'm certain the defense group and FightThePatent are aware of this possibility and are prepared to deal with it when it finally may become an issue. Patent litigation is a long, drawnout process that is complex and expensive. There are a number of different strategies that are available to fight claims of infringement, each of them with their own advantages and risks. The advantage of pooling resources by a group of defendents is obvious. The risk is later to be found that they did so unfairly. __________________ <CENTER><A HREF="http://www.hot-off-bourbon.com/" target="_blank"><IMG SRC="http://www.hot-off-bourbon.com/images/hob-logosmall.jpg" border="0"></A> <FONT face="Comic Sans MS" SIZE="-1"><I>Mardi Gras, Spring Break, Wet-T, Night Club Action, UpSkirt, Oil Wrestling, Voyeur</I></FONT></CENTER>

10-25-2003, 09:07 AM	#29
LadyMischief Orgasms N Such! Industry Role: Join Date: Sep 2002 Location: Oakville, Ontario Posts: 18,135	Excellent article, Serge __________________ ICQ 3522039 Content Manager - orgasm.com [email protected]

10-25-2003, 07:26 AM	#2
Serge_Oprano So Fucking Banned Join Date: Feb 2002 Posts: 9,820	with ADDITIONAL info added

10-25-2003, 07:34 AM	#4
Serge_Oprano So Fucking Banned Join Date: Feb 2002 Posts: 9,820	link to the similar case has been posted, including the course of action the defendants took

10-25-2003, 07:35 AM	#5
Odin88 Confirmed User Join Date: Jul 2003 Location: au Posts: 3,267	It's one thing to spam your own forum a few times, but in EVERY thread?

10-25-2003, 07:48 AM	#10
Serge_Oprano So Fucking Banned Join Date: Feb 2002 Posts: 9,820	and also, small correction, you are NOT piece of shit, you are a piece of very soft piece of shit, BIG difference ;-)))

10-25-2003, 08:16 AM	#17
Serge_Oprano So Fucking Banned Join Date: Feb 2002 Posts: 9,820	link to Laches Defense Doctrine is added

10-25-2003, 08:25 AM	#18
Serge_Oprano So Fucking Banned Join Date: Feb 2002 Posts: 9,820	similarities between Acacia Case and Lemelson case links added, and now I am off to shooting range for target practice ;-))

10-25-2003, 08:35 AM	#19
rebel23 Confirmed User Join Date: Dec 2002 Posts: 817	Serge, take no notice... your post is very informative and pertinent, more so than the crap you often get round here!

10-25-2003, 08:52 AM	#26
Serge_Oprano So Fucking Banned Join Date: Feb 2002 Posts: 9,820	maybe I am...I am a writer, not a readr, but this is also very interesting: JOINT DEFENSE ARRANGEMENTS RAISE ANTITRUST ISSUES JOINT DEFENDANTS SHOULD AVOID CONDUCT THAT RESTRICTS THEIR FREEDOM TO SETTLE INDIVIDUALLY by John E. Daniel DEFENDING AGAINST patent infringement claims can be a long, disruptive and costly enterprise. It is not surprising that in cases involving several defendants, the defendants often enter into joint defense arrangements by which they share costs and information and develop litigation strategies. Such arrangements, however, have potential antitrust implications. The patentee may charge that the defendants' joint activities constitute a group boycott against the patentee in violation of the antitrust laws. To protect against such claims, joint defense participants should avoid any conduct or agreement that restricts their freedom to negotiate settlement individually; or that, although not fully constituting such a restriction, has the effect of facilitating such a restriction as to a joint defense member-such as requiring notice to other joint defense members before conducting settlement discussions with the patentee. Sec. 1 of the Sherman Act [FN1] is one of the fundamental provisions of federal antitrust law. It prohibits contracts, combinations or conspiracies in unreasonable restraint of trade. Such conduct by two or more entities acting together is generally called "concerted activity"-that is, parties acting in concert. One form of concerted activity barred under Sec. 1 is the group boycott. A group boycott is group action to coerce a third party to conform to a pattern of conduct desired by the group or to secure the removal of the third party from competition. An example is an agreement by manufacturers not to buy from a particular supplier. Similarly, group action to refuse to take a patent license could violate Sec. 1. It is not fully settled whether such a refusal constitutes a per se Sec. 1 violation or whether it should be examined under the more forgiving rule-of- reason analysis. The key analytical element in either approach, however, is determining whether a restriction was placed on the freedom of potential or actual defendants in a patent suit to negotiate settlement independently with the patentee. If a defendant has that freedom, there is no antitrust violation. As that freedom is restricted-directly or indirectly-the risk of violating Sec. 1 increases. Three cases illustrate the development of antitrust law governing joint defense arrangements. The Case in Briefs In Jones Knitting Corp. v. Morgan, [FN2] John E. Morgan obtained a patent on knitted circular thermal fabric and garments. He sent a telegram to 17 large buyers of underwear. Twelve underwear companies attended a meeting at the Underwear Institute, where they decided to hire an attorney to conduct a search and render an opinion regarding the patent's validity. Each company pledged money to pay attorney fees and defense-related costs if a lawsuit ensued. They also agreed that no member was to approach the patentee individually regarding a license until after the attorney's opinion had been received and without first consulting the other members. In addition, they agreed that in the event the patentee approached any member, that member would not act until the others were notified. The patent attorney rendered an opinion that the patent was invalid. As a result, the members brought a declaratory judgment action against the patentee to declare the patent invalid. They then agreed further that no member would negotiate with the patentee without first notifying the others. This restriction was to remain in effect until the court ruled. The patentee charged that the group action to refuse to take a license violated Sec. 1. of the Sherman Act. The district court agreed, finding that each party had "circumscribed his freedom by promising not to take a license until he had informed the others...thus a group was formed not only for purposes of bringing a suit, but also for purposes of refusing to negotiate with Morgan for licenses." [FN3] The court also concluded that "[w]hether or not the plan was designed to allow the group to force a dissenter back into line-by peaceful persuasion or overt coercion-and whether or not any individual considered his freedom of action impeded, that freedom was in fact impeded. The freedom of each plaintiff to deal freely with Morgan was restrained by the requirement of giving notice." [FN4] Based on then-existing antitrust law, this conduct was ruled a per se violation of Sec. 1. Laissez Faire in Laser Case In Gould v. Control Laser Corp., [FN5] patentee Gordon Gould charged that various laser industry companies, under the guise of a common defense fund, violated Sec. 1 by attempting to coerce him to license the conspirators on unfavorable terms. There had been a conference of all companies, at which contributions for a common defense fund were solicited. Mr. Gould relied heavily on Jones Knitting. Although the court did not apply the per se test adopted in Jones-in light of intervening U.S. Supreme Court decisions concerning boycotts-it did agree with the Jones approach that a party's freedom to settle was the touchstone of the antitrust analysis. Mr. Gould charged that the defendants, in order to present a united industry front, agreed not to accept licenses from him except upon terms agreeable to the entire group. The court held that if such an agreement had been executed, it would violate Sec. 1 because it "unquestionably restrained the freedom of each group member to act as an individual producer in the laser market, free to contract or not contract with whom it chooses." [FN6] The court, however, went on to find that the facts did not demonstrate this type of restraint on the freedom of individual defense group members to negotiate licenses. In so doing, it made clear that the antitrust laws ordinarily would pose no barrier to agreements among competitors to share costs of litigation affecting their common interests. A Contrived Conspiracy The reasoning of Gould was adopted in Lemelson v. The Bendix Corp., [FN7] a case in which a well-known patent plaintiff, Jerome H. Lemelson, charged that Bendix, along with Brown & Sharpe Manufacturing Co., violated Sec. 1 by their joint activities in defending against his patent infringement claims. As in Gould, the court found it unnecessary to decide whether the activity should be analyzed under the per se rule or the rule of reason. Its decision was based instead on its view that there was no evidence of a restriction on the defendants' freedom to negotiate settlements independently. Mr. Lemelson attempted to make various actions of the defendants and their joint counsel-actions reasonable under the circumstances-appear nefarious and conspiratorial. Among other things, he pointed out that the defendants shared settlement information, had the same trial counsel who made "joint" offers of settlement, had talked about presenting a "united front" and had never reached settlement. The court rejected these as evidence of anti-competitive conduct because, ultimately, they did not-alone or together-demonstrate that the respective parties had subordinated their independent judgment to the collective judgment of the group in dealing with Mr. Lemelson. In the court's view, sharing of information was insufficient unless it could be shown that the parties acted "in contradiction to their legitimate economic interests." Indeed, the court noted that "a plaintiff suing different parties for the same reason creates an incentive among the adverse parties to cooperate in the preparation of their respective defenses." [FN8] The presence of a common counsel offering a joint settlement was inadequate as well, because there was no evidence that the the participants subordinated their independent judgment in dealing with the plaintiff. Thecourt noted that "the crucial concern for purposes of antitrust scrutiny is the locus of decision-making power and, as long as there is not evidence that a defendant has surrendered its decision-making capacity, there is no basis for antitrust liability." [FN9 ] As for the "united front" language, the court pointed out that this was suggested by a third party and not specifically assented to by Bendix and Brown & Sharpe. And as for the claim that the failure to settle showed that there had been an agreement not to deal with the plaintiff, the court stated, "[T]here is simply no rule of law which prohibits parties from spending more on their defense than it would take to settle the case, nor does such conduct provide a basis for inferring the existence of a conspiracy." [FN10] Practical Guidance In light of the case law, some practical guidance can be offered. -- Joint defendants can contribute money to common funds to further their joint defense.

10-25-2003, 09:25 AM	#32
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10-25-2003, 09:32 AM	#33
Kevin2 Confirmed User Join Date: May 2003 Location: Australia Posts: 1,429	Serge thank you for all your research and very interesting info it is greatly appreciated