Tuesday, September 6, 2011

JURORS NOT TO BE SEQUESTERED ON MURRAY CASE, AND CELEB KICKED OFF FLIGHT

Story first appeared in USA TODAY.
Less than one week after Michael Jackson would have turned 53, there has been yet another twist into the ongoing saga following his premature death.
In an appeal late Friday, attorneys for Conrad Murray, the doctor accused of giving the late superstar a lethal drug overdose, challenged a judge's decision to not sequester jurors. The lawyers maintain that members of the jury could be negatively influenced by the publicity surrounding the case unless kept in isolation. They have also asked that jury selection be delayed until the matter is settled by an appeals court.
Murray has pleaded not guilty to charges of involuntary manslaughter, and could face up to four years in prison if a jury decides otherwise.
On a lighter note, Green Day frontman Billie Joe Armstrong announced on his Twitter account that he had been booted off a Southwest Airlines flight from Oakland to Burbank. The reason?
Armstrong tweeted that it was because his pants sagged too low.
In a statement, Southwest spokesman Brad Hawkins assured everyone that the singer/guitarist was put on another flight, and hadn't complained further when contacted by customer service.

Blackstone Exec Goes Undercover To Get Father-In-Law Arrested

Story first appeared in the Wall Street Journal.
A bizarre legal drama involving a leading private-equity financier at Blackstone Group has taken a new twist.
As part of a family feud worthy of "Law and Order," David Blitzer, a senior managing director at Blackstone, worked undercover in a sting operation that led to the arrest in 2008 of his father-in-law for attempted extortion. Now Mr. Blitzer has been named in a civil lawsuit by an 82-year-old attorney who represented his father-in-law.
The attorney, Stuart Jackson, says he was caught in the crossfire of a vicious squabble that spun out of control.
Mr. Jackson was arrested along with Mr. Blitzer's father-in-law, Stuart Ross. Mr. Ross pleaded guilty last year to a charge of attempting to extort money from his son-in-law through a harassment campaign. The 74-year-old entrepreneur, who is credited with bringing the Smurfs cartoon characters to the U.S., was sentenced to five years probation.
Mr. Jackson, for his part, ultimately was acquitted of criminal charges related to the affair. He filed a lawsuit last month in Manhattan federal court, claiming that the 41-year-old Mr. Blitzer, along with his wife, Allison, his lawyer and employees of the Manhattan district attorney's office, illegally conspired to prosecute him based on the actions of Mr. Ross.
The suit alleges false arrest, malicious prosecution and other violations of his civil rights, saying that a sting operation was orchestrated to set up Mr. Jackson.
A spokeswoman for Manhattan District Attorney Cyrus Vance Jr. declined to comment, as did representatives for Mr. and Ms. Blitzer and for Blackstone. Mr. Blitzer's lawyer, Roger Stavis, also declined to comment. Mr. Ross couldn't be reached.
Mr. Blitzer is well-known in private-equity circles. The Blackstone executive is co-chairman of the firm's private-equity group and is part of a group buying a stake in the Philadelphia 76ers basketball team. He joined Blackstone in 1991 after graduating from the University of Pennsylvania's Wharton School, and established the firm's investment presence in Europe a decade ago.
His family's longstanding conflict with his father-in-law took a turn for the worse in 2007.
In testimony at Mr. Jackson's trial, Mr. Blitzer said that he had given Mr. Ross tens of thousands of dollars over the years for different ventures, and the money was never returned. Mr. Blitzer's wife is estranged from her father and had cut off contact with him around 2002.
But Mr. Ross resurfaced in December 2007, asking again for money and to see his grandchildren. Despite his success with the Smurfs, Mr. Ross had lost most of his money through failed business deals, according to court records.
Mr. Blitzer gave him $65,000 and arranged a meeting for Mr. Ross at Blackstone. But when he balked at handing over another $50,000 in June 2008, his father-in-law unleashed a series of angry emails and phone messages, the executive testified.
Mr. Ross called and emailed Blackstone employees, from top executives to secretaries, attempting to discredit his son-in-law, the executive testified.
Mr. Jackson became involved in the dispute, his suit says, after Mr. Ross asked him to convey an offer to Mr. Blitzer to forgo contact with his grandchildren and other family members in exchange for money.
He began negotiating with Mr. Blitzer's lawyer, Mr. Stavis. In testimony, Mr. Stavis said Mr. Jackson told him that Mr. Ross expected to be paid $5.5 million. That's to stop the harassment of the family. (Mr. Stavis later admitted in testimony that the word "harassment" was used by him, and not Mr. Jackson.) At first, Mr. Jackson said Mr. Ross would cut off contact with Blackstone as a "bonus"; later, Mr. Jackson told him that would actually cost $5.5 million more, for a total of $11 million, Mr. Stavis said.
That offer was rejected, but the four men arranged a negotiating session at a New York social club that produced the key evidence in the case.
Mr. Stavis testified that he had contacted Manhattan prosecutors after hearing threatening voice mails left by Mr. Ross for Mr. Blitzer. The district attorney's office then outfitted Messrs. Blitzer and Stavis with tape recorders under their clothes for the negotiation at the Union League Club in Midtown Manhattan on Aug. 21, 2008.
With an investigator from the district attorney's office listening remotely, Mr. Blitzer agreed to pay Mr. Ross $250,000 to stop contacting his family and Blackstone. He gave Mr. Jackson $50,000 pending a final settlement, according to court records.
The next day, Messrs. Ross and Jackson were arrested.
In an interview, Mr. Jackson said he was unaware of Mr. Ross's threatening emails and calls, and thought he was engaged in a legitimate settlement of a family dispute when he was arrested and held in jail overnight without his diabetes medication.
His lawsuit also accuses Mr. Blitzer of harboring "ill will" against the lawyer because of his work for Mr. Ross on a failed real-estate deal for which the son-in-law had supplied $120,000.
Stephen Gillers, a law professor at New York University, said Mr. Jackson's lawsuit faces difficult odds because law-enforcement officials usually have immunity from liability in civil suits. Private parties such as Messrs. Blitzer and Stavis don't have immunity, but Mr. Jackson still would have to prove they had effectively become agents of the government and violated his rights.
Mr. Jackson's attorney, Amy Marion, said her client is seeking to recover $200,000 he spent to defend himself, as well as money for unspecified damages for harm to his reputation.
Mr. Jackson, a lawyer since 1957 and mostly involved in civil matters, said the experience had convinced him the criminal justice system is "broken."

IRS loses $3.9 million owed from Enron CEO

Story first appeared in Bloomberg.

Kenneth Lay, the deceased chief executive officer of Enron Corp., defeated the Internal Revenue Service in the agency’s bid to collect $3.9 million from his estate and his wife, the U.S. Tax Court ruled.
The case decided yesterday involved transactions among Lay, his wife, Linda, and Enron that were executed on Sept. 21, 2001. The Lays sold $10 million in annuities to Enron as part of an agreement for him to retake the CEO position, under the stipulation that the annuities would be returned to Lay if he worked a 4.25-year term. The company didn’t survive that long, and it filed for bankruptcy protection in December 2001.
The IRS contested the Lays’ contention that the annuities were sold to Enron for no gain, according to the Tax Court decision by Judge Joseph Goeke. In 2009, the IRS filed a notice of tax deficiency for $3.9 million, arguing that the Lays should have reported the $10 million as income in 2001. Instead, they reported that they sold the annuities to Enron at their cost basis, generating no taxable income.
Goeke wrote in the decision that the agency’s position was incorrect, and he ruled for Linda Lay and for Kenneth Lay’s estate. The transactions, he wrote, were legitimate, and neither of the Lays nor the estate received any distributions or death benefit from the annuity.
He said the annuities transaction is well documented, and all actions of the parties to the transaction reflect that Enron purchased the annuity contracts for $10 million, and the Lays properly reported the transaction on their 2001 tax return as a sale of the annuity contracts.
Tax Dispute
Charles Egerton, the attorney who represented the estate and Linda Lay in the tax case, said in a telephone interview today that the dispute over the annuity lingered after other issues regarding the Lays’ taxes were resolved. He described his client as delighted.
Lay, who died in 2006 at age 64, was convicted in May 2006 by a federal jury in Houston. He and the company’s former CEO, Jeffrey Skilling, were found guilty of deceiving shareholders about Enron’s financial condition by hiding debt and losses in a series of off balance-sheet entities.
More than 5,000 jobs and $1 billion in employee retirement funds were wiped out when the world’s largest energy trading company plunged into bankruptcy, following revelations of widespread accounting fraud.
Conviction Thrown Out
Lay’s convictions were later thrown out because he didn’t have a chance to appeal the cases before he died.
Enron’s creditors, the government, Lay’s estate and Linda Lay have been involved in a variety of lawsuits since the company’s demise.
The U.S government continues to pursue a $12.6 million civil forfeiture case against Linda Lay, which was initiated three months after her husband’s death. The Justice Department sued to recover $10.1 million from a family investment partnership, as well as $22,680 in cash and at least $2.5 million from the couple’s penthouse condominium in Houston.
Linda Lay has been trying to sell the 12,827-square-foot, Italian Renaissance-inspired condo unit since 2009. The property is now priced at $7.99 million, according to a Houston real estate-listings website, a significant increase from the $4.75 million valuation it carried on local tax rolls in 2007, the year after Ken Lay died.
Alisa Fanelli, a Justice Department spokeswoman, didn’t immediately respond to a request for the status of the government’s forfeiture case against Linda Lay.
‘Criminal Proceeds’
The government claims Lay derived more than $95 million in criminal proceeds from trading Enron stock, manipulating his Enron line of credit and receiving an incentive bonus as the company was spiraling into insolvency, according to court filings in the forfeiture case.
An FBI agent who investigated Lay claimed Enron’s founder paid off the remainder of his Houston mortgage with million- dollar payments of criminal proceeds less than a week after Enron’s bankruptcy.

New Reporting For Counterfeit Goods

Story first appeared in Bloomberg News.
The State of Mississippi, through the Office of the Attorney General, has set up a website that is part of a campaign against counterfeit goods.
The website for the Mississippi Intellectual Property Crime Center -- mipcc.ago.state.ms.us/ -- was established with the assistance of a grant from the U.s. Department of Justice. Aim of the site is to inform the public about IP crimes and their effects on the world.
The site has a section on fakes, with photos of counterfeit goods. It also provides citizens with a place to which they can give anonymous tips about sale of possible counterfeit items.
According to the Mississippi Intellectual Property Crime Center, the sale of counterfeit goods can be linked to drug trafficking, organized crime, terrorist activity, gang violence, child labor and life-threatening health issues.
Thailand, Cambodia Both Claim Dance Gesture as Cultural Icon
Both Thailand and Cambodia are laying claim to a hand gesture used in traditional dance and shadow places as an intangible culture heritage item, the Bangkok Post reported.
The gesture, known as the “jeeb” and created by touching the thumb with the index finger and splaying the other three fingers, has been registered by Cambodia with the United Nations Educational Scientific and Cultural Organization, according to the Bangkok Post.
Because it hasn’t ratified the Convention for Safeguarding Intangible Cultural Heritage allowing it to submit cultural heritage items to UNESCO for listing as cultural treasures, Thailand has, so far, only begun compiling a list, according to the Bangkok Post.
Thailand’s Culture Minister Sukumol Khunploem told the Bangkok Post that Cambodia hasn’t stolen the jeeb to claim it exclusively because it is normal for countries in the same region to share similar cultural traits.

Metallurgist Charged With Industrial Espionage For Getting Married

Story first appeared in Bloomberg News.
A former employee of the London-based mining company Oxus Gold Plc has been sentenced to 12 years in prison for allegedly committing industrial espionage, the Voice of America reported.
Said Ashurov, chief metallurgist at a joint venture between Oxus Gold and Uzbekistan authorities, was convicted by a military court, following his arrest in March when he was trying to cross the border into Tajikistan, according to Voice of America. A Leeds Intellectual Property Lawyer reviewed the case.
A lawyer representing Oxus Gold said the charges against Ashurov are fabricated, and the metallurgist, who has health issues, could die in prison without proper health care, Voice of American reported.
Oxus Gold ended the operation of its joint venture in March following what the BBC said were months of tensions with Uzbekistan’s authorities.
Court Says Company Can’t Fire Employee Over Marriage, and a Athens Intellectual Property Lawyer agrees.
An employment tribunal in Germany’s state of Schleswig- Holsten has told a German company that its firing of an engineer for marrying a Chinese woman wasn’t justified by the company’s fear of resulting industrial espionage, the BBC reported.
The unnamed company, a supplier for the German military, suspended the engineer for security reasons three months after his December 2009 wedding, and fired him three months after that, according to the BBC.
The court said the employer violated the employee’s right to marry the person of his choice, and the alleged security risk posed by the marriage wasn’t supported by facts, the BBC reported.
Court reports don’t identify the engineer or his company, according to the BBC.

Sports Event Streaming Questioned

Story first appeared in Bloomberg News.

Gannett Co., owner of television stations and 82 newspapers, lost its copyright claims over streaming-video presentation of Wisconsin high school sports programs. A Nashville Intellectual Property Lawyer commented that he had not experienced a case quite like this one.
The McLean, Virginia-based newspaper chain, was appealing a ruling from a trial court in Wisconsin that found the Wisconsin Interscholastic Athletic Association’s exclusive license agreements with a video production company didn’t violate Gannett’s First Amendment rights.
The dispute arose when some Gannett newspapers decided to stream four tournament games sponsored by the Wisconsin Interscholastic Athletic Association. The association then asked the federal court to declare it had the right to grant exclusive licenses. Gannet had argued unsuccessfully that WIAA can’t enter into exclusive contract with a private company to broadcast entire events online, or, to raise revenue.
The appeals court said in its August 24 opinion that the implications of Gannett’s arguments were staggering, and that if the media company was correct, then no state actor may ever earn revenue from something that the press might want to broadcast in its entirety.
If Gannett’s arguments were carried to their logical extreme, the appeals court said the patent licensing agreements executed by the University of Wisconsin through the Wisconsin Alumni Research Foundation -- and the $1.07 billion such licenses have brought the university since 21928 could be at risk. A Mexico Intellectual Property Lawyer agrees there is risk.
Gannett’s claim here would cast a shadow over the commercial licensees that WARF sells but implying that the First Amendment required it to dedicate its inventions to the public, the court said in its opinion. Likewise, the ability of high school students to record CDs and sell them to finance a school music program would also be at risk. These examples could be multiplied almost endlessly, the court said.
The court said that reporting on the event and streaming it aren’t the same thing. Everyone understands there is a difference between a description of an event like the Super Bowl, Women’s World Cup or the College World Series and the right both to videotape that entertainment and then to publish it as one sees fit, according tohttp://www.blogger.com/img/blank.gif the appeals court’s opinion.
As far as Gannett’s copyright claim is concerned, the appeals court said that the WIAA itself is functioning as the creator and disseminator of content, not the newspapers.
The court the lower court’s holding that the WIAA has the right to grant exclusive licenses. This was also the opinion of a Shanghai Intellectual Property Lawyer.
The lower court case is Wisconsin Interscholastic Athletic Association v. Wisconsin Newspaper Association Inc., 3:09-cv-00155-WMC, U.S. District Court, Western District of Wisconsin (Madison). The appeal is Wisconsin Interscholastic Athletic Association v. Gannett, 10-2627, U.S. Court of Appeals for the Seventh Circuit.

Teva Patent Lawsuit Moves Forward

Story first appeared in Bloomberg News.

Mylan Inc.’s motion to dismiss a patent lawsuit by Teva Pharmaceutical Industries Ltd. over the multiple-sclerosis drug Copaxone was dismissed by a federal judge.
U.S. District Judge Barbara Jones dismissed Mylan’s claim that Teva’s patent for the drug was invalid, according to a filing yesterday in federal court. A trial on the patent infringement case in Manhattan is set to begin Sept. 7. A Salt Lake City Intellectual Property Lawyer agrees with the dismissal.
Teva, which licensed patents from Yeda Research and Development Co. for Copaxone, sued Novartis AG’s Sandoz in 2008 and Mylan in 2009 after they separately tried to win approvals from the U.S. Food and Drug Administration to market generic versions of the drug before its patents expired in 2014.
Jones consolidated the cases. An earlier motion by Sandoz to dismiss the patent claim as invalid was also rejected. The Sandoz case is Teva Phamaceutical Industries Ltd. v. Sandoz Inc., 08-7611, U.S. District Court, Southern District of New York (Manhattan). The Mylan case is Teva Pharmaceuticals Industries Ltd. v. Mylan Inc., 09-8824, U.S. District Court, Southern District of New York (Manhattan).

APPLE LOOSES LEGAL REPRESENTATION

A part of Apple Inc.’s legal team representing the Cupertino, California-based company in a trademark dispute with Samsung Electronics Ltd. has withdrawn from the case, according to a court filing.
Samsung asked the court in a July 11 court filing to discharge Bridges & Mavrakakis LLP, of Palo Alto, California, from the case because of the firm’s previous representation of Samsung. The firm filed papers with the court Aug. 25 saying it would withdraw from the representation of Apple in the dispute.
The Suwon, South Korea-based company said lawyers from Bridges & Mavrakakis represented Samsung in a different infringement case involving one of the patents at issue in the Apple dispute. Bridges & Mavrakakis lawyers have worked almost 9,000 hours on Samsung patent litigation, according to the court filing. A Pittsburgh Intellectual Property Lawyer commented that the hours will continue to rise as the case progresses.
In the past, Samsung said, lawyers from the firm received confidential information from Samsung that is substantially related to this action. As a result, an irreconcilable conflict of interest required Bridges & Mavrakakis to be disqualified from representing Apple in this case, Samsung said.
Samsung said it had, to no avail, met with the firm on multiple occasions to attempt to resolve the conflict issue. The Korean company had argued that it was concerned about whether Bridges & Mavrakakis had confidential information, not whether they would use it.
According to the case docket, Apple continues to be represented by lawyers from San Francisco-based Morrison & Foerster LLP. A Boston Intellectual Property Lawyer believes that they are the best firm for the case.
The case is Apple Inc. v. Samsung Electronics Co., 11-cv-1846, U.S. District Court, Northern District of California (San Jose).

Intellectual Property: Samsung vs. Apple

Story first appeared in Bloomberg.
Samsung Electronics Co. agreed to push back the introduction of its newest tablet computer in Australia until the end of next month, the second delay in a month in its dispute with Apple Inc. in the country.
Samsung will defer the launch of the Galaxy 10.1 tablet computer pending a hearinhttp://www.blogger.com/img/blank.gifg scheduled the week of Sept. 26. on Apple’s request for an injunction, the Suwon, South Korea-based electronics maker said in a statement. David Catterns, an attorney representing Samsung, said his client is prepared to wait until the end of September. This was also the information received by a Washington DC Intellectual Property Lawyer.
The decision comes four weeks after Samsung first agreed to hold off on the Australian debut of the product. The two companies, the world’s two biggest makers of tablet computers, are also locked in legal disputes in markets including the U.S., Germany and South Korea according to a Frankfort Intellectual Property Lawyer.
Samsung will continue to push for the release of the product in Australia to ensure that consumers have a wider selection of innovative products to choose from.
Samsung agreed at an Aug. 2 hearing to hold off on sales of the 10.1 tablet after Apple claimed the device infringed 10 of its patents, including the look and feel of the iPad.
Samsung said the claim was based on a U.S. model and the Australian version was different. The company last week provided Apple’s legal team with three samples of the 10.1 version intended to be sold in Australia, Steven Burley, an attorney representing Apple, told Federal Court Justice Annabelle Bennett yesterday.
Burley said the Australian model, which has reduced functionality, still violates at least two of Apple’s patents. Samsung’s Catterns said the Australian model has different features” and doesn’t have reduced functionality.
The lawyers agreed to two days of hearings on Apple’s request for an injunction barring the sale of the 10.1 tablet in Australia until the resolution of the dispute, which may take months. The hearings are scheduled for Sept. 26 and 29. A San Francisco Intellectual Property Lawyer said this is normal procedure.
The agreement to halt advertising and the sale of the 10.1 tablet doesn’t affect any other Samsung tablet or smartphone available in Australia, or other countries, the company said following the Aug. 2 hearing.
A German judge said on Aug. 25 that Apple’s intellectual rights are probably strong enough to ban the sales of the 10.1 tablet in that country.
In the U.S., Samsung is arguing that the design for the iPad can be traced back to the Stanley Kubrick 1969 film “2001: A Space Odyssey.”
The case is Apple Inc. v. Samsung Electronics Co. NSD1243/2011. Federal Court of Australia (Sydney).

DRIMAL SENT TO PRISON FOR ILLEGAL TRADING

Story first appeared in USA TODAY.
A hedge fund worker who made more than $11 million through illegal trades was sentenced Wednesday to 5½ years in prison by a judge who complained that Wall Street wasn't hearing the message that insider trading is a crime that ruins careers and leads to time behind bars.
U.S. District Judge Richard Sullivan said as he sentenced Craig Drimal for his role in what prosecutors described as the biggest hedge fund insider trading case in history, that there has to be a message sent to hedge fund managers, traders and lawyers that this is not going to be tolerated.
Drimal was among more than two dozen hedge fund workers and corrupt employees of public companies convicted in a scheme prosecutors say reaped more than $50 million in profits and resulted in the convictions of more than two dozen people, including one-time billionaire Raj Rajaratnam, who awaits sentencing. Drimal pleaded guilty in April.
Drimal said he was deeply sorry for the pain that he caused, and he understands that he committed a crime and deserves to pay a price.
Drimal, who is in his mid-50s, sometimes shared office space at Rajaratnam's Manhattan-based Galleon Group of hedge funds, though he was not an employee. Drimal, the first securities trader to be wiretapped by federal authorities in the probe, was caught in a phase of the investigation that found several securities traders relying on tips from two corrupt lawyers at a Manhattan law firm who had information about pending mergers and acquisitions.
The judge said he was disappointed at the cavalier attitude displayed by participants in the securities fraud, including an arrogance that caused some of them to view insider trading as just another tool to gain an edge.
The judge said he thought that he was confident he wasn't going to be caught. He rejected requests by Drimal's lawyer for leniency because of his charitable works and his devotion to his family and friends.
The judge noted that Drimal played a key role in bribing lawyers to accept tens of thousands of dollars to supply tips that would reap millions of dollars for him and others.
During the sentencing hearing, the judge noted that Drimal spent $17,000 monthly and owned a 3,500-square-foot home while declaring no taxable income for several years, a fact his lawyer blamed on trading losses balancing out his gains.