Colorado Business Litigation Lawyer Blog

In the 1990s, the "patent troll" carried a negative connotation, a person or company that aggressively enforced its patents through assertive lawsuits. However the troll of the 2000s translates into an entirely different hobgoblin.

Frenzy in the research, software and technology fields has ensued as forward thinking businesspersons are buying up struggling companies no longer solely for the product or idea itself, but for multiple strategic reasons.

In a defensive chess move to protect itself from its competitors, companies are being purchased for their collection of patents, in an effort to shelter themselves from competing companies' lawsuits. Most recently, Google wrangled a deal with Motorola Mobility for its 17,000 patents in an attempt to protect itself from competitors' potential lawsuits against companies who have purchased Google's Android software.

Conversely, Eastman Kodak is looking to sell its patents during a two-stage auction. Its lucrative patent settlements dried up recently prompting Kodak's sale. It is rumored that an undisclosed buyer may be interested in purchasing these patents for defensive protection. The speculation over this potential transaction resulted in a positive spike in Kodak's share price this week, closing at $2.69, a 26% increase.

There is also significant money to be made in the patent business. If it is diligent, a company that has acquired a patent portfolio can go about filing infringement lawsuits to defend its patents. Many times defendants will settle patent lawsuits due to the high cost of litigation or fear of jury verdicts. Consequently, due to the high prices of licensing fees and defending lawsuits, smaller independent companies or individuals have decided to simply throw in the towel rather than play the high stakes game.

So is the troll term misapplied? Are companies using lawsuits as a profit center? It appears there is still a great argument to be made between the terms "exploitation" and "opportunity" as it relates to the patent world.

Artist Christo Vladimirov Javacheff, "Christo", famous for suspending huge curtains of orange fabric over bridges, buildings and other public spaces throughout the world, has embarked on yet another art project. Christo and his wife Jeanne-Claude have targeted Colorado for a second time (the first time being in 1972) with plans to hang silvery, translucent fabric over the Arkansas River for two weeks in August 2014 for their "Over the River" project. Their original plan entailed a 42-mile stretch of river, however the Bureau of Land Management (BLM) agreed to an approximately 6 mile area.

Unfortunately for Christo, his vision has been met with opposition as the citizens group "Rags Over the Arkansas River" (ROAR) and two fly-fishing businesses, The Arkansas River Fly Shop and ArkAnglers, filed a lawsuit July 22, 2011 in Denver District Court. They are opposing the artist's project pointing out the possible adverse impact on park values and requirement of a state permit.

The feared environmental harms would potentially impact wildlife including the bighorn sheep population, birds and elk, not to mention an unfavorable impact to fishing, rafting and other popular activities along this scenic river.

ROAR claims that in order to support the cables and fabric, Over the River would have to use heavy industrial equipment to drive thousands of industrial rock bolts into the canyon walls all the while damaging public lands and resources, not to mention creating noise, dust and causing hundreds of highway closures.

In June, an agreement with park officials was approved pending the Bureau of Land Management granting a federal permit. In exchange, Christo's team would pay $550,000 in fees and expenses. The Colorado Wildlife Commission initially opposed the project before legislation married the two agencies.

While the BLM was analyzing the project over the last several years, it received thousands of public comments prompting an $11million dollar study paid for by Christo out of his approximately $50 million dollar budget. The BLM's final Environmental Impact Statement addresses the various wildlife and traffic concerns over the narrow 2-lane canyon highway during the five year project's construction and demolition.

Opponents state that they will continue to fight the project because of the devastation they foresee occurring to this area.

To read the BLM's Environmental Impact Statement go to: http://www.blm.gov/co/st/en/fo/rgfo/planning/otr/otr_final_eis/otr_final_eis_documents.html

It was announced March 7, 2011 that CaridianBCT, a Lakewood, Colorado-based medical technology company is being acquired by Tokyo-based Terumo Corp., for a price of $2.63 billion. CaridianBCT, with operations in over 30 countries and sales in more than 96 countries throughout the world, manufactures automated blood component processing technology and medical specialty products.

The company was founded by two individuals in 1964 as Cobe Laboratories. It was acquired by Gambro AB, a publicly traded multinational health care company based in Sweden, in 1990. In 2008, the company was purchased by Indap, a private equity firm.

CaridianBCT, combined with Terumo Corp., will continue to be based in Lakewood, which will remain the hub of the company’s R&D and manufacturing operations. It employs about 1,600 in Lakewood and more than 2300 worldwide.

The company, under the leadership of David Perez, president and CEO and member of the board of directors of CaridianBCT, is known as a very progressive and dynamic organization. Perez said it is unlikely that there will be job cuts in Lakewood.

The acquisition is expected to be completed in late April to early May, 2011.

We wrote back on April 2, 2010 about some members of the Westboro Baptist Church of Topeka, Kansas who picketed and chanted hateful slogans near the 2006 Maryland funeral of a veteran of the Iraq war. Some of the signs displayed contained statements such as “Thank God for Dead Soldiers,” “Fags Doom Nations,” “America is Doomed,” “Priests Rape Boys,” and “You’re Going to Hell.”

The father of the deceased veteran sued the church and some of its members for intentional infliction of emotional distress, intrusion upon seclusion, and civil conspiracy. A federal jury awarded the father $2.9 million in compensatory damages and $8 million in punitive damages. The trial judge reduced the punitive damages award to $2.1 million. On appeal, the Fourth Circuit Court of Appeals threw out the verdict, holding that the church and its members were exercising protected First Amendment speech rights. The court ordered the veteran’s father to pay court costs of $16,510.

On March 2, 2011, the U.S. Supreme Court agreed with the Fourth Circuit, holding that the church’s conduct constituted “speech” on a public issue and that the picketing was done peacefully in a public place, in compliance with the direction of local police officials, and was indeed protected by the U.S. Constitution. The court said that the church’s belief that God hates the U.S. for its tolerance of homosexuality, particularly in the military, and its condemnation of the Catholic Church for scandals involving priests, were matters of public, not private, concern, and that the Westboro church and its members were properly communicating their beliefs on those issues.

Continue reading "Supreme Court: Hateful and Hurtful Picketing by Westboro Baptist Church at Vet’s Funeral is Protected Speech" »

A bookkeeper at Impact on Education, a Boulder, Colorado-based charity, was arrested January 22, 2011, and charged with forgery and embezzlement of at least $160,000 of the charity’s funds. According to Boulder police, she forged more than 60 checks over several years. She remains in jail in lieu of $100,000 bail.

The charity’s website says Impact on Education (then The Foundation for Boulder Valley Schools) was founded in 1983. Its mission statement says it “leverages community resources to impact student learning, create opportunities, and build support of public education in the Boulder Valley School District.” The charity’s 2009 financial statement shows an income of about $1.5 million and net assets of almost $1 million.

A charity spokesperson, in speaking of the alleged embezzlement, says,” I could not understand it. I feel violated. It’s an unconscionable act.” The organization and independent auditors are carefully scrutinizing the records back to 2004, when the bookkeeper began working for the charity.

We would like to know if there were any internal or outside audits done on a regular basis and, if so, why the alleged shortages were not discovered. After all, that is one of the purposes of an audit. We can only speculate on what effect the alleged shortages will have on future contributions. Donors to nonprofit organizations have a right to expect that their gifts will be used for charitable purposes and not diverted to an employee. They also should expect that the organization will make reasonable efforts to see that the charity carries out the donors’ expectations.

We hope that Impact on Education will come forward with answers. The bookkeeper remains in jail in lieu of $100,000 bond. She is presumed innocent until and unless proven guilty through the legal process.

More fraud related postings:
"Colorado Man Indicted for Obtaining Fraudulent Mortgages," Colorado Business Litigation Lawyer Blog, posted 06/22/2010

"Colorado Victim Advocate Accused of Victimizing Victims," Colorado Business Litigation Lawyer Blog, posted 10/19/2010

Although the recent killings of six and the wounding of 14 others, including a member of U.S. Congress, at a political event outside a supermarket in Tucson has no direct connection to Colorado or the purpose of this blog, we would like to make some observations.

Here are some of the things that we believe no “liberal” or “conservative” political party or pundit or anyone else really knows about the incident at this time:

1. Did “targeting” of the congressional district by a political party somehow cause the shootings?
2. Did national political divisiveness or dissension have anything to do with the shooter’s decision process or his state of mind?
3. Did the shooter have any “rational” basis for his actions?
4. Would more restrictive gun control laws have prevented the tragedy?
5. Did constitutionally protected speech by any television or radio talk show personality influence or provoke the shooter’s actions and, if so, can or should anything be done about it?
6. Is it feasible or even possible to provide adequate protection to elected officials in public places that would prevent the same kind of tragedy in the future?
7. Can any state or federal law absolutely prevent a deranged person from gaining access to a deadly weapon and using it against an elected official or the public at large?

Everyone seems to have opinions on at least some of the issues raised by the questions. It is our belief that there are no ready or simple answers to the questions. The issues will be the subject of vigorous debate for quite some time.

One thing we do know is that we must allow our justice system to run its course, hopefully in an atmosphere of objectivity and calm. And irrespective of why the tragedy occurred, we want to extend our deepest sympathy to the victims, their families and friends. The killing or shooting of any innocent person diminishes us all.

The Associated Press reports that 23 percent of recent high school graduates nationwide can’t pass the Army’s entrance exam. Figures varied widely by state. In Colorado, for example, the figure was less than 20 percent while Hawaii had an ineligibility rate of almost 40 percent. The exam consists of basic math, science and reading questions. To make matters even worse, the Marines, Air Force, Navy and Coast Guard all require a higher passing score than the Army does.

The Education Trust, a children's advocacy group, says that the study examined scores of 350,000 high school graduates, ages 17 through 20, who took the Army entrance test between 2004 and 2009. This is the first time the Army has publicly released this test data.

Equally alarming is the fact that 75 percent of applicants, 17 to 24 years of age, don’t even qualify to take the test because of physical unfitness, a criminal record, or failure to graduate from high school.

As one might expect, both educators and the Defense Department expressed concern that our nation’s high schools are turning out graduates who can’t pass such a relatively easy test of basic skills. And while current recruitment goals are being met, there is a potential for a decline in our military readiness, according to the group Mission: Readiness, a coalition of retired military leaders.

Irrespective of one’s views on the political issue of whether or not the U.S. needs a large military presence in today’s world, it is nevertheless a sad commentary on our education system that it apparently requires less knowledge to graduate from high school than it does to get into the Army. If this is true, as it appears to be, what kind of civilian labor force can we reasonably expect?

As a first step in attempting to solve the problems, shouldn’t we all demand higher standards from our school boards, school administrators and teachers? Or should the Army just make its entrance exam easier? Just a perverse thought.

Back on July 6, 2010, we blogged here about the dismissal by a Denver, Colorado District Court Judge of serious felony charges against a defendant based on the fact that a Denver police officer apparently lied in an arrest warrant affidavit. We wondered at that time whether or not the officer involved would be disciplined or charged criminally for his under-oath departure from the truth.

The case had now taken a strange turn.

A Denver grand jury recently investigated the series of possibly racially motivated 2009 lower downtown Denver assaults and robberies, in which the defendant mentioned in our July 6 article purportedly was involved. Unnamed police sources say that the grand jury decided not to charge the involved police officer with perjury or other possible criminal activity. The grand jury did, however, decide to issue a written report, which state law allows it to do.

Here’s the twist: The Denver District Court judge supervising the grand jury has decided to seal the grand jury’s report. Even stranger still, the judge sealed her own order explaining why she had sealed the grand jury report. Thus, we don’t know what the grand jury said about the incidents or even why the judge won’t permit us to know.

The specially appointed district attorney assigned to work with the grand jury vowed to appeal the judge’s sealing orders. He said that nothing like this had ever happened to him before, and that the orders frustrated the public’s right to know.

We hope the judge --who is a legal scholar-- had some compelling reason for her action. We won’t know the reason until an appellate court rules on the matter. And if the appeals court upholds the sealing orders, we may never know.

Stay tuned.

The Globe and Mail, Canada’s fourth largest newspaper, has selected Denver, Colorado as the best city in the world for holding a business convention.

The selection panel consisted of airline chiefs, frequent fliers, meeting experts and business travel pros.

According to Zane Kerby, senior VP of the National Business Travel Association, Denver’s central U.S. location, cheap flights into DIA, and the proximity of most hotels to the Colorado Convention Center all were factors in choosing Denver. In addition, Denver’s travel taxes – a measure of accommodation, rental car and airport taxes – are among the lowest in the U.S

New York City was picked as Best for Business over all. Other categories and selections were: Pro-business (Sao Paolo, Brazil), Best Sightseeing (Istanbul), Most Exotic (Mumbai, India), Best Buzz (London), Freshest Downtown (Los Angeles), Best Comeback (New Orleans), City to Watch (Shenzhen, China) and Best Music Scene (Nashville).

Bottom line: Denver is among some pretty good company.

Continue reading "Denver Selected as World’s Best Convention Location" »

As another year draws to an end, we would like to extend our wishes for a healthy and prosperous new year to those who visit our website, either intentionally or by sheer accident, and to past, present and future clients.

This past year has been marked by economic distress experienced by far too many individuals and families, often due to unemployment and underemployment. A large percentage of our citizens are living at or below the poverty level, mostly because of conditions totally beyond their control.

Many small businesses have closed their doors, thus losing their hard-earned incomes and often their entire investment. Numerous large corporations have been forced to reorganize in order to help recover from or prevent huge economic loss and additional massive unemployment.

The causes of the severe downturn in our economy have been debated and analyzed to death and will no doubt continue to be disputed for years to come. At this point, do the political and other causes of the recession really matter to all those unfortunate persons who have been so adversely affected by the downward-spiraling economy?

This we know: our good countrymen and countrywomen have proven time and time again over our history that we have the resiliency and the determination to confront and to overcome adversity of all sorts. Economic conditions will improve. Jobs will be created. In the meantime, government and healthy industries must use their best efforts to ensure adequate assistance to those in immediate need. And those of us who are able should give generously to charity.

Hope is on the horizon; help is on the way; our great country will endure.

GJSentinel.com reports that Mesa County in Western Colorado announced on December 2, 2010, that thousands of official computer records were mistakenly made available on the internet from April until November 24.

The records included such information as the names of confidential informants in drug cases, home addresses and family members’ names and other personal information of employees of the county sheriff’s office, emails between sheriff’s office employees about crime victims and homicide and other investigations, some of which included names, telephone numbers and addresses of involved persons.

An investigation has revealed that the information was first accessed from the internet on October 24. It was accessed “numerous” times after that by personal computers in the U.S. and Europe, and perhaps across the world. Nobody knows how many times, if at all, the information was downloaded for storage on a computer.

The sheriff has asked the FBI to assist in determining computer users who may have downloaded the highly sensitive information.

The person who released the information was working in the Mesa County Information Technology Department. Apparently, he mistakenly believed the website where the sheriff’s department information was stored was password-protected and encrypted. The unnamed person is no longer employed by the county.

As readers might expect, the potential civil liability of the county is mind-boggling. Informants’ very lives may be jeopardized. The sheriffs’ employees and their family members are exposed to identity theft and other criminal activity. This unfortunate event will likely have a long-lasting effect on every person whose name or other identifying information was released.

In an earlier post (Part I - 11/30/2010), I introduced the background of this case. It involves a nonresident passenger severely injured in an auto accident who was omitted in the settlement by the driver's insurance company. Claiming that the insurance company refused in bad faith to settle with her for the $100,000 in remaining insurance coverage, the nonresident passenger then sued the driver. The insurance company undertook defense of the case.

While the case was pending, the plaintiff and the driver entered into an agreement whereby an agreed judgment in the amount of $4 million was entered against the driver and the driver assigned (transferred) to the passenger any bad faith claim he had against his insurance company. The agreement provided that the passenger would not attempt to enforce the judgment against the driver. The insurance company, which had internally evaluated the passenger’s damages at between $2 million and $5 million, authorized its insured driver to enter into the agreement.

The passenger then sued the driver’s insurance company for an alleged bad faith refusal to settle her claim within the insurance policy limits. One of the insurance company’s defenses was that even assuming there was any bad faith on its part, the passenger could not prove that the insured driver suffered any monetary damage-- a fundamental requirement for a successful bad faith claim-- since the passenger had agreed that she would not enforce the $4 million judgment against the driver. On that basis, the trial court dismissed the passenger’s claim and the Colorado Court of Appeals affirmed the judgment.

The Colorado Supreme Court overturned the court of appeals decision by a 4-3 vote, saying that the pretrial assignment of the alleged bad faith insurance claim and the entry of the agreed judgment, with an agreement not to enforce the judgment, were recognized as valid in Colorado, assuming the judgment amount was reasonable and not collusive. The mere entry of the agreed judgment was sufficient to satisfy the requirement of proof that the driver was damaged, assuming that the other elements of bad faith refusal to settle within policy limits can be proved. And even if the amount was not reasonable, the injured plaintiff still has the right to prove the actual amount of damages in a trial.

The case will be returned to the trial court for further proceedings, which may result in a settlement or a trial before a jury.

The Colorado Supreme Court decided November 22, 2010, that the Colorado Court of Appeals committed error when it upheld the trial court’s grant of summary judgment (a decision on the law without a trial) in favor of an insurance company in a bad faith case brought by a severely injured vehicle passenger.

The vehicle’s driver lost control, seriously injuring five passengers, including one passenger who was rendered paraplegic (complete paralysis form the waist down) in the accident. The driver’s insurance provided coverage of $100,000 per person and $300,000 per accident. The company deposited the full $300,000 with the court and filed what is known as an interpleader case, naming all of the injured passengers as defendants and asking the court to decide how the insurance proceeds should be apportioned.

The insurance company settled with four of the injured passengers for a total of $200,000. Because the insurance company could not serve the remaining passenger, who resided in Florida, with legal process, the court had no jurisdiction to litigate the nonresident’s claim.

The nonresident passenger, claiming that the insurance company refused in bad faith to settle with her for the $100,000 in remaining insurance coverage, then sued the driver. The insurance company undertook defense of the case, as it was legally obligated to do.

In a later post (Part 2 - 12/02/2010), I will elaborate on the outcome of this case.

In 1966, the Colorado Constitution was amended to provide for the appointment of judges by the governor. Before that, judges of the county, district and appellate courts were elected in the same manner as any other elected official.

Advocates of electing judges have long argued that taking judges “out of politics” stripped the electorate of a basic right to determine who shall serve in the judicial branch of government, just as the people decide who serves in the legislative and executive branches of government.

Unfortunately, the “good old days” of electing judges oftentimes resulted in the election of a political party’s “good old boys,” rather than the persons who were the best qualified. After all, on what unique platform can a candidate for judicial office run?

Predictably, all candidates promised to enforce the constitution and statutory law in a fair and impartial manner. Some even said they would “get tough on crime” Still others said their decisions would never be influenced by partisan politics.

Oftentimes the candidate was a lawyer who was a long and faithful member of one of the two major political parties. Common sense and political reality tell us that there was at least a perception that a lawyer’s odds of winning or losing a case in that judge’s courtroom might be affected in proportion to the lawyer’s degree of support for the winning candidate.

After 1966, trial judge candidates must first have their names submitted to the governor by a judicial nominating commission. Each judicial district’s commission is made up of seven persons residing in the district, no more than four of whom can be from the same political party, and a majority of whom are not lawyers. The commission interviews each candidate and submits two or three names to the governor, who must appoint one of those whose name is submitted. Initial appointment is for two years. Those appointed must stand for retention at the next general election. A judicial performance commission evaluates each judge candidate’s performance and makes a recommendation to retain, not to retain, or gives no opinion. These results are publicized. The ballot question is along the lines of “shall judge ______ be retained in office, yes or no?

Since 1966, only a handful of judges have not been retained in office.

Which system is better calculated to obtain the most qualified judges?

Bloomberg.com reports that a former officer and general counsel for GlaxoSmithKline (GSK), a London-based drug manufacturer, was indicted on November 8, 2010, for making false statements to the FDA and with obstructing an FDA investigation.

In 2002-2003, the FDA was investigating the promotion of Wellbutrin SR, an antidepressant drug, for possible uses not approved by the FDA. The attorney, Lauren Stevens, now residing in North Carolina, is charged with making false statements in a series of correspondence with the FDA and with withholding documents that could have proved that Wellbutrin SR was being promoted for uses such as weight loss, which had not been approved by the FDA.

Among other things, Stevens had sent letters to various doctors and had learned about the improper and illegal promotion of the drug. GSK had paid at least two doctors to give about 1,000 promotional talks to other doctors promoting the off-label (non-approved) use of the drugs. The indictment alleges that Stevens knew about the off-label promotions but concealed such materials from the FDA and made false statements concerning her knowledge of the off-label promotion activity.

If convicted on each of the six counts of the indictment, Stevens could be sentenced to a total jail term of up to sixty years. Stevens’ attorneys say that she is innocent of all charges and that she relied on the advice of a nationally prominent law firm that had expertise in working with the FDA.

We wait with bated breath to see whether or not any other officers of GSK will be charged or indicted. And of course, under our law, Stevens is presumed to be innocent of all charges.

Continue reading "GlaxoSmithKline in Spotlight Again" »