Legal Roundup, Part 1…

Maybe there’s something in the water, but the filings lately have included a number of recent disclosures about ongoing litigation. Although none of them really merits a separate post, we thought it might be interesting to peek at some of the disputes that are keeping the companies and their attorneys hopping.

Because there are so many, though, we—ll devote one post to the topic today and add more tomorrow afternoon. Here’s Part 1:

Appealing to Some, Less So to Others: Yesterday the U. S. Court of Appeals for the Federal Circuit reversed in part, vacated in part, and remanded a prior decision that the Massachusetts District Court rendered in favor of Haemonetics Corp (HAE). As a brief summary, Haemonetics had filed a patent infringement suit against Baxter Healthcare Corp. and Fenwal, Inc., claiming that Fenwal’s ALYX centrifugal system (which separates red blood cells from drawn blood) violated its patent.

The appellate court’s decision means that Haemonetics may not get more than $15.6 million in lost profits and royalties, and another $2.3 million in prejudgment interest that it referenced in its June 1 annual report. The court also sent the case back to the District Court with instructions to make a —correct claim construction in order to reach a proper verdict. Thus, the case isn—t over.

However, there’s more to report. Haemonetics disclosed (again, in its annual report) that there’s a second case between the parties, based on the following dispute:

—On December 7, 2009, Fenwal had announced that it began shipping a red cell collection kit with a modified separation chamber, and that it is discontinuing sales of its original ALYX consumable kit. We believe this new collection kit also infringes our patent. On December 14, 2009, we filed a new infringement suit in Massachusetts federal district court seeking an injunction and damages from Fenwal’s sale of this new consumable.

Where’s Mom When You Need Her? Transatlantic Holdings, Inc. (TRH) disclosed in a recent 8-K that it had filed a demand for arbitration against various AIG (AIG) companies on behalf of itself and its subsidiaries. It alleges that it incurred more than $350 million in losses ——arising from its participation in a securities lending program administered and managed by AIG during the period that TRH was controlled by AIG. TRH’s participation in such securities lending program ended in the fourth quarter of 2008. While the final outcome cannot be predicted with certainty, TRH believes this arbitration, when resolved, will not have a material adverse effect on TRH’s consolidated results of operations, financial position or cash flows.

What’s the Cost of Coming Clean? In its annual report, Universal Corp. (UVV) disclosed that it has reached an agreement —in principle with the SEC and the DOJ to resolve the alleged Foreign Corrupt Practices Act (FCPA) violation that the company discovered and voluntarily reported in 2006. The alleged violation involved about $2 million paid over seven years by some of UVV’s tobacco subsidiaries. The settlement must be approved by the DOJ, the SEC, and a federal district judge, and UVV states —We have been given no assurance that the settlements will be approved by the DOJ, SEC, or federal district courts. The company has been accruing money to pay for the settlement, which it does not think will have a material effect on its bottom line. Yet it expects that the resolution will include —injunctive relief, disgorgement and prejudgment interest, fines, penalties, and the retention of an independent compliance monitor. (This is the second FCPA case we’ve written about recently. In the FootnotedPro report we published May 27, 2010, we looked at some other FCPA disclosures, including one by a company revealing troubling new developments in a previously settled case.)

A “Vigorous” – and Expensive – Fight: Late last week,, inc. (CRM) filed a quarterly report disclosing that Microsoft Corporation (MSFT) filed suit against it on May 18, 2010. Microsoft alleges that infringed nine patents that relate to —certain aspects of [its] products and services, and it’s seeking damages, attorneys— fees, costs, and injunctive relief. As all filings that mention litigation are wont to say, the company plans to defend the matter —vigorously. It further states that although it doesn—t believe the case will have a material adverse effect on its financial condition, ——it could be material to the net income or cash flows (or both) of a particular quarter.

Green Light to Govern: Finally (for today), Orient-Express Hotels Ltd. (OEH) filed an 8-K to report that on June 1 the Supreme Court of Bermuda threw out a petition filed by three shareholders that challenged the validity of the company’s dual class corporate governance structure. The court found that the company’s voting structure is not unlawful, the filing stated. The shareholders have the right to appeal the case, although there is no indication whether they will do so.

Check back with us tomorrow afternoon for Part 2 of the legal roundup.

Image source: Wikimedia Commons


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