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Androvett Blog

by Robert Tharp at 2:43:44 pm

Forbes has an interesting take on how the need for companies to protect brand reputation has become increasingly important in this information age. Consider this little factoid courtesy of Thomsn Reuters and Interbrand: in the 1970s, 95 percent of a corporation's value consisted of tangible assets, compared to just 25 percent today. In other words, a business's most valuable asset is its good name, its brand and reputation. In a recent survey released jointly by the World Economic Forum and the Fleishman-Hillard public relations firm, three-fifths of chief executives said they believed corporate brand and reputation represented more than 40% of their company's market capitalization.

But along with that shift in value away from assets, there are now more opportunities than ever for a company's hard-earned reputation to come under attack more than ever.

Consider the nearly 370 million users of Facebook and Twitter alone. Corporate America can no longer afford to sit on the social media sidelines, hoping their intellectual poperty is not being compromised. Increasingly, IP owners are monitoring social content for keywords attributable to their companies. If abuse is detected, the owner should take immediate action, says Jason Fulmer of Gardere Wynne Sewell LLP. "There are legal remedies to pursue, but it often is more effective to approach the specific social media site to try to settle the matter under the site's own dispute-resolution procedures," says Fulmer. "These sites all have different policies, but all operate under a common desire not to be sued because of a user's infringing content." If a company fails to act, the site could be charged with being complicit in the infringement.


by Robert Tharp at 4:52:54 pm

After nearly a decade of intense opposition, one of the country's highest-profile and most controversial wind energy projects - a wind farm just offshore from Cape Cod -- may be poised for approval to move forward. The long and difficult path faced by the project provides some teaching opportunities as renewable energy projects pick up momentum with the vocal support of the Obama administration. Attorney Scott Deatherage of the Dallas office of Thompson & Knight says that the Cape Wind project illustrates the need to mitigate any environmental concerns or perceived intrusions by offshore wind farms. To assuage neighbors' concerns, Cape Wind developers have proposed painting the massive wind turbines so that they will blend in with the horizon, among other things.

"Increasingly both the public and the government want to promote renewable energy and address concerns about greenhouse gas emissions and climate change. Projects like Cape Wind and what we're seeing along the Texas Gulf Coast suggest that wind energy production and any impact on aesthetics and the environment can be balanced," Deatherage says. 

Indeed, the U.S. wind power industry grew by a staggering 39 percent in 2009, according to the New York Times.

by Robert Tharp at 4:04:00 pm

Elizabeth Durso Branch was well on her way to making a name for herself in the world of Family Law by the time she arrived at McCurley Orsinger McCurley Nelson & Downing in 2004. By then, she had already put in time as a prosecutor in Bexar County, an assistant county attorney in Guadalupe County and served more than four years as an assistant attorney general in the AG's child support litigation division. At the AG's office Elizabeth penned the brief that led to the adoption of a com community caretaking exception by the 4th Court of Appeals in Ortega v. State, 974 S.W.2d 361 (Tex.App.-San Antonio 1998).

At McCurley Orsinger, Betsy has built a strong practice, often focusing on cases that include issues involving the well-being of children caught in the middle of divorce disputes. She and other McCurley Orsinger attorneys took the lead in the unprecedented pro bono effort representing hundreds of minors removed by authorities following the 2008 federal raid on the Yearning for Zion Ranch in West Texas. Firm founder Mike McCurley announced today that Betsy is the firm's newest partner. "Betsy has always been a staunch advocate for her clients in and out of the courtroom," McCurley says. "That tenacity has earned her the respect of her clients and peers, and helped make her an invaluable member of our firm. We are very pleased to be able to introduce her as a partner."







by Robert Tharp at 2:49:18 pm

If you needed any additional reason to worry about the state of the commercial real estate market, consider today's bipartisan statement from 79 U.S. House members to the Federal Reservey. The statement urges the Fed to take a more active role in propping up the commercial real estate market and averting an economic disaster.

According to the New York Times, the congressmen are calling for the agencies to make clear public statements encouraging lenders to continue to make credit available for performing assets, even if the value of the property has taken a hit in its value. More than $1.4 trillion in commercial mortgages will come due by 2013, and as much as 65 percent of those deals will have trouble getting refinanced because of the drop in property values, according to Deutsche Bank. By encouraging lenders to refinance the deals, the lawmakers are hoping that commercial real estate values will stabilize. But that assumes commercial real estate owners will even want to refinance their properties. In many cases, the debt payments exceed the rent roll, making it uneconomical to hold on to the property.

Commercial real estate attorney Thad Armstrong, a partner in Thompson & Knight'sHouston offices, says that while 2009 was the year of residential foreclosures, the boton is passing to commercial real estate. "As loans mature and lenders and borrowers fail to reach agreements on modifications, extensions or workouts, more large-scale, high-value retail and office developments are being faced with foreclosure, and we expect those numbers to continue to rise for the next 12 to 24 months," Armstrong says. "With the sheer number of properties that will be changing hands, there will be attractive business opportunities for investors, tenants, property managers, brokers, and title companies." Armstrong notes that lenders should engage legal counsel with particular expertise in foreclosure laws, which can vary by state. "One misstep could jeopardize the validity of an entire sale."

by Robert Tharp at 1:09:16 pm

As Toyota scrambles to fix an accelerator defect that has idled manufacutirng plants and caused sales of popular models to come to a screeching halt, a Texas law firm has filed a class-action lawsuit on behalf of a Corpus Christi man whose January 2010 crash has been blamed on the faulty pedal.

Attorney Robert Hilliard of the Corpus Christi, Texas-based law firm of  Hilliard Muńoz Guerra LLP represents Slyvia and Albert Peña III. Mr. Peña was driving his 2008 Toyota Avalon last month when the car crashed after suddenly accelerating through a stop sign.

The lawsuit charges that Toyota used defective "Electronic Throttle Control"(ETC) systems in its Toyota and Lexus vehicles. These faulty ETC systems cause sudden acceleration. Mr. Hilliard says that Toyota has long been aware of the problem and even installed a mechanical failsafe device to prevent the unintended acceleration, but discontinued the practice in 2001.

The New York Times notes today that Toyota has known about the problem with the gas pedals for some time, but only last week did the company finally appear to come to terms with the scope of the problem - after expanding a series of recalls to cover millions of vehicles around the world, incalculable damage to its once-stellar reputation for quality and calls for Congressional hearings.

At almost every step that led to its current predicament, Toyota underestimated the severity of the sudden-acceleration problem affecting its most popular cars. It went from discounting early reports of problems to overconfidently announcing diagnoses and insufficient fixes. As recently as the fall, Toyota was still saying it was confident that loose floor mats were the sole cause of any sudden acceleration, issuing an advisory to millions of Toyota owners to remove them. The company said on Nov. 2 that “there is no evidence to support” any other conclusion, and added that its claim was backed up by the federal traffic safety agency.

But, in fact, the agency had not signed on to the explanation, and it issued a sharp rebuke. Toyota’s statement was “misleading and inaccurate,” the agency said. “This matter is not closed.” The effect on Toyota’s business is already being felt. Its sales in the United States in January are expected to drop 11 percent from a year earlier, and its market share in the United States is likely to fall to its lowest point since 2006, according to, an automotive research Web site.

“Toyota has long known about the defect with their throttle control, and has done too little, too late to correct it,” says Mr. Hilliard. “Much like their cars, this problem is speeding out of control and Toyota is having a hard time slamming on the brakes.”

by Robert Tharp at 2:46:40 pm

The battle for a competitive edge among rivals in the highly competitive luxury hotel market has turned ugly between Starwood Hotels and Hilton Worldwide, and shines an important light on the value that businesses place on trade secrets and the lengths they'll go to protect them.

Last April, Starwood sued Hilton for bringing in two former Starwood executives who reportedly defected from Starwood with more than 100,000 internal documents. Starwood claims that Hilton executives at the highest levels condoned the use of the stolen information as Hilton worked to create a luxury hotel to compete with Starwood's `W' hotel chain. Additionally, federal prosecutors are reportedly considering whether Hilton and two former executives should face criminal charges for stealing trade secrets. The Wall Street Journal reports that Starwood's demands go beyond monetary damages and also wants to place Hilton in a "penalty box," preventing the company from developing its own luxury brand for a period of time.

Key employees at successful companies will always be highly coveted hires by industry rivals, but as the Starwood/Hilton saga shows, a worker's knowledge may prove invaluable to their new employers but bringing along actual company secrets can spell real trouble. "When you leave a job, especially when you work in an industry in as much turmoil as the hospitality industry, you have to leave all the confidential material behind," says attorney Richard Barrett-Cuetara of Dallas' Cowles & Thompson.. "And if you learn your new employee has ‘hot goods' you must contact the former employer immediately and quarantine the data until you can return it. A delay on any of those fronts may only help ensure that you will find yourself embroiled in a lawsuit."

by Robert Tharp at 4:38:03 pm

Media outlets devoted to the video game industry are lit up today over a bitter contract dispute unfolding in a Dallas County courtroom. On Friday, following a 12-day trial involving claims of fraud, tortious interference and breach of contract, a jury ordered casual game maker PopCap to pay $4.6 million in damages to former business partner, MumboJumbo.

Writes Gamasutra: The two companies signed a game retail distribution agreement in July 2006, in which Dallas-based MumboJumbo was meant to provide sales and distribution services for PopCap and its games. That deal eventually went sour, with PopCap suing MumboJumbo for payments allegedly owed under the agreement, and MumboJumbo countersuing.

The jury found PopCap liable for fraud, tortious interference, and breach of contract, according to the lawyers for MumboJumbo, which is responsible for games such as Midnight Mysteries: The Edgar Allan Poe Conspiracy and Luxor Adventures.

Through the use of trial testimony and exhibits, MumboJumbo's attorneys from Dallas-based Rose•Walker showed that PopCap committed fraud and tortious interference when it severely damaged a key business relationship between MumboJumbo and a key retailer. Rose•Walker attorneys Marty Rose, Mike Richardson, Ross Cunningham and Bryan Rose used PopCap's own internal e-mail communications to show jurors how PopCap employed a calculated use of false and misleading statements to sour that relationship.

The jury's verdict includes $4.6 million in actual damages, and a separate hearing will be held to decide on the amount of attorneys' fees to add to the damages.

"The law allows you to do plenty of things to be successful in business," says Rose•Walker co-founder Marty Rose. "However, it does not allow you to commit fraud or interfere with a company's business relationships. The jury's verdict is a clear signal that this type of business conduct is not going to be tolerated."

Headquartered in Dallas, Texas, MumboJumbo LLCTM ( is a worldwide publisher, developer and mass marketer of premium casual games for PCs and game consoles. MumboJumbo games are downloadable at its website as well as key game portals, or purchased at retail through mass merchants, computer retailers and specialty outlets.

by Robert Tharp at 3:48:06 pm

New Braunfels resident Ernesto Tamez was supervising a job at BP America's refinery in Texas City, Texas, when the unthinkable happened. A crane operator lifted a heavy oil burner without waiting on a signal from workers on the ground that the area was clear. The oil burner struck him, causing serious crushing injuries to his ribs, back, neck and shoulder.

On Friday -- more than four years after the tragedy -- a Galveston County jury found that Bridgeville, Pa.-based Maxim Crane Works was completely liable for causing the injuries that Mr. Tamez suffered. Jurors found Maxim Crane Works 100 percent liable for the injuries sustained by Mr. Tamez. The $1.72 million verdict includes $300,000 in lost wages, $550,000 in medical expenses and $170,000 to the injured worker's wife. Prior to trial, Maxim Crane Works made no settlement offers. Attorneys for Houston trial law firm Arnold & Itkin LLP presented evidence that the crane operator lifted the oil burner before receiving any signals from workers on the ground that the area below was safe. Additionally, trial evidence revealed that the crane's boom had been moved in such a away that it was no longer aligned. Mr. Tamez and his wife were represented by Arnold & Itkin attorneys Cory Itkin and Michael Pierce.

"Maxim Crane Works' Web site says ‘zero accidents is the only goal,' but sadly in this instance they failed," says Mr. Itkin. "It has taken four years to get to this point, but our hope is that this verdict will help our client and his family move on with their life."

"The greatest tragedy of this case is that the pain and suffering experienced by Mr. Tamez and his wife easily could have been prevented," says Mr. Pierce. "We are pleased that the jury stood up and held this company accountable."


by Robert Tharp at 4:26:55 pm

A plucky response has been filed in one of the most unusual trademark infringement lawsuits of 2009. Apparel manufacturer The North Face has sued 19-year-old University of Missouri freshman James Winkelmann for trademark infringement and dilution. At issue is James Winkelmann's small business, The South Butt, which utilizes a logo and tagline that are similar to -- and arguably parodies of -- The North Face's marks.
As The American Lawyer notes: Last week Winkelmann and his attorneys filed an irreverent reply brief along with a motion to dismiss the suit. According to his filing -- as well as his Web site and his attorney, Albert Watkins of St. Louis firm Kodner, Watkins, Muchnick, Weigley & Brison -- Winkelmann started the clothing line as a joke. Winkelmann says he was inspired to do so after noticing that all his friends were buying North Face gear even though they weren't mountaineers. He decided to poke fun at the idea by coming up with a "South Butt" logo; slapping it on T-shirts, jackets and sweatshirts; and selling the clothes via a Columbia, Mo., pharmacy and the Web.
North Face didn't find the joke funny. The company learned that Winkelmann had moved to trademark the South Butt name, and in August sent him a cease-and-desist letter. Winkelmann -- who Watkins claims had sold less than $5,000 worth of South Butt merchandise by that point -- ignored the demand.
Winkelmann's answer is clearly intended to play to the sympathies offered by the particular defendant, referred to in the filing as "Little Jimmy Winkelmann." It's also intended to draw smiles.
Trademark attorney  Dyan House of Munck Carter in Dallas says that while there is a parody defense, it may not be successful in this case. "What makes this different is that The South Butt sells fleece jackets and other clothing and therefore competes directly with The North Face. That may be reason for a jury to go against the defendant." By contrast, House says Louis Vuitton lost to a company making "Chewy Vuiton" toys primarily because the latter company makes pet toys and not designer handbags. In this case, the relatedness of the goods offered under the marks will likely be a key element in the analysis.

by Robert Tharp at 11:32:31 am

The Psychology Today blog has an interesting take on the perennial uptick in divorce filings every January.
It may be because the holidays are over or that people want a fresh start at the New Year. Some couples who've been planning to break up choose to avoid disrupting their families during the holidays. Others may be hoping that their situation or their partner's behaviors will change, and when nothing shifts, they opt for dissolution, which at best is a sad thing.
Family law attorney  Brad LaMorgese from the Dallas office of McCurley Orsinger McCurley Nelson & Downing, agrees. "People make it through the pressures of the holidays, then decide that they don't want to face those same arguments or disappointments again," says LaMorgese. "There are greater opportunities for conflicts involving finances or relatives this time of year, plus it's also a time when it's normal to think about and make plans for the future."

by Robert Tharp at 4:42:08 pm

Beginning next year, the Internal Revenue Service plans to regulate paid tax preparers by requiring them to register with the government, pass competency tests and commit to a code of ethics. The agency's stated goal is to reduce the chance of errors and fraud by tax preparers, and provide an increased assurance of proper advice in preparing returns. "This represents a major expansion of the IRS role as a regulator of tax preparers," says Emily Parker of Thompson & Knight, a former IRS Acting Chief Counsel and Deputy Chief Counsel. "But there are also significant challenges due to the large number of preparers and the limited resources the IRS inherently has to enforce such regulations." It's estimated that as many as 1.4 million people work as paid tax preparers, and most are unregulated.

According to the New York Times, more than 80 percent of taxpayers use a paid tax preparer or tax software to complete their yearly returns. However, paid tax preparers are unregulated in many states, unless they are also lawyers, certified public accountants or enrolled agents who represent taxpayers before the I.R.S. Lawyers, certified public accountants and enrolled agents will not be affected by the new regulations. Though the new regulations will not be in place this year, IRS Commissioner Douglas Shulman said the I.R.S. was stepping up enforcement of preparers this tax season. He said the agency would send notices to 10,000 preparers who had had frequent errors. He said agents would also visit thousands of tax preparers. Some of the visits will be announced ahead of time; others will not. In some visits, agents will pose as taxpayers to see if they get accurate advice from preparers, Mr. Shulman said. Mr. Shulman said taxpayers should avoid preparers who promise larger refunds, or those who charge fees based on the size of the refund.

by Robert Tharp at 4:09:11 pm

John Reed Stark, the former Chief of the SEC's Office of Internet Enforcement, has been named Managing Director and head of international digital forensics firm Stroz Friedberg LLC.
As Securites Docket recently noted, Stark played a central role in bringing the SEC into the digital age: Stark was among the first at the SEC to identify the imminent, newfangled threat of online securities fraud. He was instrumental in establishing the SEC's first informal "office" of people interested in Internet-related investigations and litigation, and became the first Chief of the SEC Office of Internet Enforcement when it was created in July 1998. The OIE evolved over time to handle cases running the gamut from conventional manipulation and insider trading to sophisticated account intrusions, hedge fund short sale violations, major offering disclosure violations, and violations of anti-money-laundering rules.
Mr. Stark successfully oversaw scores of investigations and dozens of major Internet and online-related securities prosecutions at the SEC. "We pioneered the Internet Sweep and cracked some of the online world's most challenging cases," he notes, "including groundbreaking matters involving network hacking, identity theft, unauthorized intrusions into brokerage accounts, and money laundering matters, while also handling an array of traditional SEC cases such as those involving insider trading, hedge fund fraud, violations of the Foreign Corrupt Practices Act, and market manipulations." Additionally, Mr. Stark is a preeminent commentator on securities, cyberspace, and other technology issues pertaining to white-collar crime and to regulation and cyber law.
Stroz Friedberg is the leading global consulting firm for managing digital risk and uncovering digital evidence. The company specializes in digital and mobile device forensics, electronic discovery, data breach and cybercrime response, anti-money laundering, and cyber and traditional investigations. Working at the cutting edge of law, policy, and technology, we provide technical assistance and strategic advice to help clients effectively manage electronic information: its sources, its trails, and its implications.  

by Robert Tharp at 3:06:46 pm

We all know what they say about death and taxes, but there is now some question about whether the estate tax will or won't be around for 2010. As of now, there is no estate tax after Congress failed to extend the Tax Act for 2010, allowing the estate tax to lapse. But Allen B. Craig III, head of the tax practice group at Gardere Wynne Sewell LLP, says it is certain that Congress will seek a retroactive amendment in 2010, however any such amendment will likely result in lawsuits challenging the constitutionality of retroactivity for transactions and deaths that occurred before enactment

The Economic Growth and Tax Relief Reconciliation Act of 2001 imposes a 45 percent tax on estates valued over $3.5 million($7 million per couple). If Congress fails to amend the law in 2010, the Tax Act will automatically reinstate the estate tax in 2011 with an exemption amount of $1 million, not $3.5 million, and a maximum tax rate of 55 percent.

Writes the Wall Street Journal yesterday:
President-elect Barack Obama and congressional leaders plan to move soon to block the estate tax from disappearing in 2010, suggesting the levy might outlive the "Death Tax Repeal" movement that has tried mightily to kill it.
The Democratic stance on the estate tax contrasts with Mr. Obama's reluctance to press forward with his campaign pledge to raise income-tax rates on top earners, which he worries could have an adverse economic impact during a recession.

But Democrats are determined to act quickly to prevent the estate tax's scheduled repeal. Elimination of the levy on big inheritances was approved by Congress under President George W. Bush in 2001, with rollbacks phased in slowly and its full elimination slated to take effect next year.
The Senate Finance Committee will move within weeks on legislation to reverse that law, and Mr. Obama is expected to detail his estate-tax preservation proposal in his budget next month, congressional tax writers said.


by Robert Tharp at 4:39:29 pm

Dallas law firm  Shackelford, Melton & McKinley, LLP is expanding its corporate transactions and corporate securities practice with the addition of attorney  Henry Exall IV. Exall joins the firm with more than two decades of corporate and legal experience. He will assist clients with corporate transactions and negotiations, as well as matters involving financial and operational issues. Mr. Exall previously worked as a managing director at a merchant banking corporation where he was responsible for all in-house legal matters, including contracting, capital raising and corporate structuring.

Many industry watchers expect corporate trasactions and securities cases to be legal industry bright spots in 2010. Law 360, among many others, reports an expected uptick in litigation in the coming year:
With U.S. stocks rising and jobless claims down, legal industry experts are cautiously optimistic that a return to normal levels of business activity will translate to a modest increase in litigation spending after more than a 10 percent dip in 2009.
"Our research shows that litigation spending is going to go up only slightly," said Michael B. Rynowecer, president of BTI Consulting Group Inc. "That's good news, because it was down last year."
Overall, spending on corporate litigation could increase by about 2.3 percent this year, according to data on corporate litigation spending compiled in BTI's Premium Practices Forecast 2010, and litigation attorneys would welcome such results.

by Robert Tharp at 4:07:44 pm

Take a look at oil well and pipeline inspector John Williams' time cards and pay stubs and two things quickly become apparent: 1) Williams keeps an exhausting work schedule, often working as much as 160 hour in a single pay period and 2) His employer, Moody International Americas Inc., rarely pays him any overtime compensation. Last week, Williams and two former co-workers filed a federal class-action lawsuit charging that Moody International required them to work more than 40 hours per pay period but failed to pay them overtime as mandated by federal law.

Dallas attorney Charles W. "Trey" Branham III of the Law Offices of  Charles W. Branham, III, L.P. filed the Fair Labor Standards Act class-action lawsuit in the U.S. District Court for the Eastern District of Texas in Lufkin on behalf of Williams and former co-workers Herbert "Jay" Fontenot and Tye Adair. The federal Fair Labor Standards Act mandates that employers pay overtime to non-exempt hourly employees who work more than 40 hours per pay period at a rate equal to one-and-a-half times their regular straight-time pay rate. Mr. Fontenot and Mr. Adair worked as inspectors and technicians for the company, and have asserted similar claims. Moody International is a subsidiary of UK-based Moody International Limited, which provides services to companies in oil and gas, power, mining and other industries.

"I'm concerned that what happened to John and the others in this case happened to other Moody International employees as well," Mr. Branham says. "With thousands of technical workers in the U.S., it could be that these three are just the tip of the iceberg."

Mr. Branham says Moody International's own employee handbook may become a key piece of evidence, including statements about the payment of overtime that may run counter to federal law. More information is available at


by Robert Tharp at 3:27:46 pm

Law firms fortunate enough to find themselves on The American Lawyer's short list for "IP Litigation Firm of the Year" can typically point to a certain case or a specific line of work that is responsible for the national recognition. Some score gigantic monetary awards against household name corporations, some post a consistent string of legal victories or take the lead in litigation that ends up setting precedent or influencing policy. Finally, some firms successfully defend corporations against IP attacks.

The editors at The American Lawyer cited a little of everything in selecting Fish & Richardson as a finalist for the 2009 award.

The judges singled out the "extraordinary perseverance its lawyers have shown in turning big verdicts against its clients to dust," and specifically its success in reversing over $2 billion in damages awards against Microsoft Corp. According to the magazine, Fish's "2007 obliteration of Alcatel-Lucent's $1.5 billion win against Microsoft for allegedly infringing MP3 digital music patents" was upheld on appeal in 2008, which "started a series of defense wins that effectively ended Alcatel-Lucent's patent war against Microsoft - with the latter clearly on top." Fish also reversed a $388 million jury verdict against Microsoft in a patent infringement suit brought by Uniloc Corp.

The publication also highlighted Fish & Richardson's strong performance before the International Trade Commission, where the firm won five cases in the last two years and played a role in roughly one in every four cases filed in 2008. Finally, the publication recognized Fish's impressive work in the U.S. district court for the Eastern District of Texas, where the firm was responsible for two rare summary judgment motions. The magazine concluded that Fish is "on track to dominate two of the nation's hottest patent venues."

Also this month, the firm has been recognized by Law 360 as one of only six finalists for its "IP Law Firm of the Year" awards. Editors at Law 360 praised Fish for "setting the pace with massive verdicts and settlements, and key roles in policy changes." In addition to the reversals of the verdicts against Microsoft, Fish played an important role in creating new law through its defense of Bose Corp.'s WAVE trademark before the Trademark Trial and Appeal Board and the Federal Circuit. The appellate court determined that in order to force the cancellation of a trademark alleged to have been obtained by fraud, plaintiffs need to prove intent to deceive the U.S. Patent and Trademark Office. This precedent-setting case established a clear standard in a controversial, grey area of trademark law.

Meanwhile, IP Law & Business has named F&R a top IP law firm in its "Who Protects Innovation in America" survey of law firms used by Fortune 100 companies. Fish ranked second overall - with one less mention than the top firm - meaning that the firm is one of the most sought-after firms for both patent prosecution and patent litigation services among the Fortune 100.

by Robert Tharp at 10:39:24 am

McKool Smith's patent litigation on behalf of i4i Inc. literally brought Microsoft's flagship software, Microsoft Word, to its knees in the last half of 2009. Just days before Christmas 2009, a federal upheld the judgment, tacked on an additional $90 million in damages and interest and ordered an injunction on the sales of Word.

That monumental case alone may have been enough to place McKool Smith on Law 360's list of the top six IP Firms of the Year. But as is custom for this growing and dynamic firm, 2009 was full of important patent cases. Besides the Microsoft verdict, Law 360 also noted the firm's $139 million verdict for Versata Software Inc against enterprise software provider SAP, a $267.5 million settlement for Visto Corp. against Blackberry maker Research in Motion and a $19 million verdict for OPTi Inc. against Apple Inc.

The Law 360 selection is only the latest honor for McKool Smith, which also represents clients in commercial litigation, white collar investigations and defense, and bankruptcy matters. The firm recently was recognized in Corporate Counsel magazine as a 2010 "Go-To Law Firm" for Fortune 500 companies. McKool Smith also was named to the inaugural "Midsize Hot List" published in The National Law Journal, and recognized in the same publication for winning more of the Top 100 U.S. Verdicts than any other law firm in the nation during the most recent survey period.

by Robert Tharp at 3:57:15 pm

San Antonio attorney Allan B. Polunsky has been appointed to a new six-year term on the Texas Public Safety Commission, the state board responsible for formulating and overseeing enforcing criminal, traffic and safety laws, for preventing and detecting crime, for apprehending law violators and for educating citizens about laws and public safety.

Mr. Polunsky is the only person to serve as chairman of the state's top two criminal justice agencies - the Texas Public Safety Commission and the Texas Board of Criminal Justice. He has served as Chairman of the Public Safety Commissoin since 2007. He previously served 13 years on the state Board of Criminal Justice, including five years as chairman.

"The safety and security of our state is a key concern of Gov. Perry and Texans everywhere," says Mr. Polunsky. "I am honored to assist the governor and law enforcement officials in assuring that all our resources are properly supported and coordinated in making Texas the safest state in the nation."

Mr. Polunsky is managing partner and founder of Polunsky & Beitel, LLP, a law firm that specializes in real estate and mortgage lending with offices in San Antonio and Dallas. He was among the first 50 attorneys in Texas to be Board Certified in both Residential Real Estate Law and Commercial Real Estate Law by the Texas Board of Legal Specialization.

Mr. Polunsky also has served the City of San Antonio as Chairman of the city's Zoning Commission, President of the Industrial Development Authority and member of the Planning Commission. He also served on the San Antonio River Authority Board of Directors for 12 years. Mr. Polunsky is a past board member of the Texas Lyceum Association, Special Olympics of Texas and San Antonio Food Bank.



by Robert Tharp at 1:59:23 pm

White-collar defense attorney Bill Mateja has penned an interesting op-ed analysis published in the Dallas Morning News regarding the federal honest services statute. Following oral arguments earlier this month in which the Supremes expressed grave concerns about the statute's constitutionality, it's widely believed that the Court will strike down this widely used statute.

Mateja, a former head of the DOJ's Corporate Fraud Task Force and now in practice at Fish & Richardson's Dallas offices, writes: What began in 1988 as a law targeting mail and wire fraud by making it a crime to deprive an employer or the government of the "intangible right of honest services" quickly has become a favorite tool of federal prosecutors targeting not just public officials but employees in the private sector.
In many cases, it's the charge prosecutors turn to when nothing else will stick, a way to secure a fraud conviction without proving financial gain or any quid pro quo deal. And, it's been used to criminalize conduct that could be construed as nothing more than self-serving acts, conflicts of interest and slight ethical transgressions, including failing to give your employer an honest day's work.
Undoubtedly, were the Supreme Court to strike down the statute, defendants previously convicted under the statute would come out of the woodwork asking to have their convictions overturned. Additionally, prosecutors who depend on the statute to prosecute worthy public corruption cases would be hamstrung.
In Dallas, the statute was used just last October to obtain high-profile convictions against some of those involved in the Dallas City Hall corruption scandal, although those convictions were coupled with other charges that are safe from Supreme Court review. Striking down the statute, however, would have voided convictions obtained against three Baylor men's basketball coaches in the mid-1990s for scheming to obtain credits and scholarships for junior college transfers. The coaches' actions may have violated NCAA rules, but no law was broken except for this so-called honest services statute.
Notwithstanding these potential shockwaves, the Supremes should strike down the honest services statute because its use leads to selective prosecutions and makes federal prosecutors omnipotent in interpreting the law. When a prosecutor's mere discretion (or whim) wields that kind of power, it can hardly be said that the rule of law is alive and well.
While we're at it, our justice system should revisit the more than 4,000 federal offenses scattered throughout the federal criminal code, as well as untold numbers of federal regulatory criminal provisions. Enforcement of this ever-growing criminal code has contributed to a backlogged judiciary, overflowing prisons and the incarceration of innocent individuals who are persuaded to plead guilty not because they are guilty, but because exercising their constitutional right to a trial is all too risky.
To this end, Congress heard testimony last summer from strange bedfellows who have formed a coalition to bring "overcriminalization" to lawmakers' attention, namely, the American Bar Association, American Civil Liberties Union, Cato Institute, Constitution Project, Federalist Society, Heritage Foundation, National Association of Criminal Defense Lawyers, and Washington Legal Foundation.
Unquestionably, neither fraud nor public corruption can be tolerated, but relying upon flawed laws and an overcriminalized justice system are not solutions we can live with.


by Robert Tharp at 11:38:08 am

As a noted appellate attorney working for a highly respected Texas-based appellate firm, you'd expect Ryan Clinton of Hankinson Levinger to be the kind of guy who has passion for a cause. That drive extends outside the courtroom as well. Clinton has been named one of just six people nationwide honored by a national animal welfare organization for his work promoting no-kill animal shelters.

No Kill Advocacy Center, an organization committed to ending euthanasia at animal shelters, conferred its Henry Bergh Leadership Award on Mr. Clinton and five other individuals at animal welfare organizations across the country. The award is named for the 19th century animal advocate who founded the American Society for the Prevention of Cruelty to Animals. Among other things, Clinton was instrumental in the movement to place a no-kill item on the Austin City Council agenda. As a result of his work, the elected officials voted unanimously to direct the city manager to formulate a plan for Austin to implement no-kill policies and procedures.

"This is a tremendous honor, especially when you consider the other people that were named and the outstanding work they have done," Clinton says. "My hope is that this award will help inspire animal lovers all over the country to demand the enactment of life-saving policies and programs at their community animal shelters."
Mr. Clinton is the founder of, a grass-roots, non-profit organization dedicated to ending the killing of lost and homeless pets in Austin. The group has served as a national model for other such efforts in California, Florida, Oregon and North Carolina. Mr. Clinton also serves as volunteer legal counsel for Austin Pets Alive, a non-profit pet adoption group responsible for saving 2,500 lost and homeless pets from the city's shelter in less than two years.
Prior to joining Hankinson Levinger, where he provides appellate services to a wide range of business clients, Mr. Clinton served six years as an Assistant Solicitor General for the State of Texas. He has successfully argued cases in state and federal appellate courts, including four arguments before the Supreme Court of Texas. He also has been named as one of the top young lawyers in Texas five different times in the Texas Rising Stars list published in Texas Monthly magazine.


by Robert Tharp at 3:40:13 pm

While the Seattle Post Intelligencer rates it as only the No. 7 biggest Microsoft-related news story of 2009, the stunning David vs. Goliath patent case involving i4i Inc.(represented by McKool Smith and Tyler, Texas-based Parker, Bunt & Ainsworth) is certainly one of the top IP stories of the year.

Writes the Seattle PI: Though the lawsuit was filed in 2007, the hubbub started in August when a judge slapped Microsoft with an injunction that said it could no longer sell Word. i4i Inc. had sued Microsoft for patent infringement, alleging the ubiquitous word-processor incorporated custom-XML technology owned by the small Canadian company. A Texas jury agreed that Microsoft was liable for willful infringement and awarded i4i $200 million in damages.
Microsoft, determined to prove i4i's patent invalid, was granted an appeal and a temporary stay on the injunction. In September, the companies fought over the case in a Washington, D.C., federal appeals court - Microsoft arguing that i4i was out for easy money, and i4i arguing that Microsoft killed its business model. Just days before Christmas, a three-judge panel upheld the Texas ruling, reinstating the injunction and imposing $290 million in damages after fees and interest. Microsoft has until Jan. 11 to strip the custom-XML editor from Word - or stop selling Word altogether.


by Robert Tharp at 3:14:18 pm

Thanks to the recession and heightened vigilance following Bernard Madoff's 2008 arrest, Ponzi scheme investigations really spiked in 2009, according to an excellent Associated Press analysis. In fact, the AP is declaring 2009 the year of the Ponzi scheme.
The AP reports that 2009 saw four times as many Ponzi schemes unravel than in 2008. Writes the AP: Tens of thousands of investors, some of them losing their life's savings, watched more than $16.5 billion disappear like smoke in 2009, according to an Associated Press analysis of scams in all 50 states.
In all, more than 150 Ponzi schemes collapsed in 2009, compared to about 40 in 2008, according to the AP's examination of criminal cases at all U.S. attorneys' offices and the FBI, as well as criminal and civil actions taken by state prosecutors and regulators at both the federal and state levels.
A Ponzi scheme depends on a constant infusion of new investors to pay older ones and furnish the cash for the scammers' lavish lifestyles. This year, when the pool of people willing to become new investors shrank and existing investors clamored to withdraw money, scams collapsed across the country.
They're also resulting in a spike in federal class-action filings. "Increasingly common are class actions based on what a bank should have known, even if the institution acted as a passive custodian of the funds," says  Kenneth Johnston of Dallas's Kane Russell Coleman & Logan. "Banks may face costly claims for failing to identify that, for example, one of its customers was in fact a Ponzi scheme." Johnston also notes that SEC receivers and bankruptcy trustees are aggressively pursuing fraudulent transfer claims against both banks and investors who merely held or received Ponzi scheme distributions.

by Robert Tharp at 2:04:41 pm

Social media guru Brian Solis posts some very interesting numbers regarding the explosive growth and our collective embrace of social media networks. Time spent on social networks tripled over the last year and now accounts for 17 percent of the time we spend online. As a result, we are now spending more time on social networks and blogs than e-mail.

Writes Brian: As a result of our online interaction, advertisers are following our activities attempting to capture our attention where it is focused. The same report also found that online display advertising in top social networks has more than doubled year-over-year, increasing 119 percent. The jump represents an increase in spending from approximately $49 million in August 2008 to roughly $108 million in August 2009. Also of note, the share of estimated spend in social networks as also increased, expanding from seven percent in August 2008 to 15 percent in August 2009.


by Robert Tharp at 3:41:06 pm

Commercial bankruptcy has been one of 2009's hot spots in the legal industry, and McKool Smith's new bankruptcy practice group continues to expand with some of the industry's top legal minds. After forming its bankruptcy group and opening Houston offices led by noted bankruptcy specialist Hugh Ray, the firm has hired bankruptcy litigator Basil A. Umari

Umari, who comes to the firm from Andrews Kurth, represents debtors, creditor committees, secured and unsecured creditors, and other parties in virtually every type of bankruptcy proceeding. He has represented clients from a variety of industries, including banks, oil and gas producers, healthcare entities, ship manufacturers, and many others.

by Robert Tharp at 4:46:03 pm

Here's something for business owners to look forward to in 2010 ... random IRS audits of payroll tax practices. With an estimated $14 billion in corporate tax underpayments every year, the IRS is ramping up an enforcement plan that will identify and target businesses with the greatest compliance risks. Those companies will be targeted for future audits. The IRS reportedly has its sites set on everything from executive compensation to fringe benefits, and some businesses have already received requests for documents.
"The major focus will be the traditional hot-button issues - worker classification, fringe benefits, reimbursed expenses and executive compensation," says  Elizabeth Schartz of Thompson & Knight's Dallas office. "You can expect increased activity from both federal and state agencies that are looking to increase revenues in a difficult economic environment. Employers need to get ahead of the issue now by conducting a preemptive self-audit to correct any problems."
Reports Reuters: The audits will begin in February 2010 and stretch across all types and sizes of companies. The exams will be deeper than typical audits, and also look at the use of independent contractors and other worker classification issues.
IRS Commissioner Douglas Shulman has said the agency will focus on the wealthy and large corporations as it seeks to recover billions that go unpaid in taxes each year.

by Robert Tharp at 3:45:58 pm

It's now easier than ever for would-be Santas to research a toy's safety before hitting the check-out line. The new Web site,, allows shoppers to avoid common hazards and report potential dangers they find on toy store shelves, right from their mobile phones or home computers.
Reports the Washington Post, despite stricter laws, toys containing dangerous chemicals are still prevalent on stores shelves. The Post note: In a report released Tuesday called "Trouble in Toyland," the U.S. Public Interest Research Group (U.S. PIRG) found that while many manufacturers and retailers are complying with the new law, a handful are not, and it is hard for consumers to tell the difference.
"This year's dangerous toy list is divided into three categories: choking hazards, chemicals - such as lead paint - and noisy toys that can harm a child's ears," says Dallas attorney Angel Reyes of Reyes Bartolomei Browne. He notes that safety advocates have made it easy for parents to check on toy safety even while shopping, with the new Web site, "Beyond that, parents need to use common sense and remember that they are on the front lines in the battle to keep their kids safe."

by Robert Tharp at 3:15:33 pm

Did the Florida Judicial Ethics Advisory Committee go too far when it advised judges and lawyers to no longer "friend" each other on Facebook and other social media networking sites? The harm, according to a majority on the committee, is that such connections might create the impression of favoritism and special influence.

FindLaw columnist Anita Ramasastry sums it up this way: Judges may use Facebook for political campaigns (since many states require judges to run for election), for communicating with the public, or simply to communicate with friends and acquaintances. The Committee felt that the "friending" of lawyers by judges could send the wrong message to the public -- suggesting that certain attorneys have cozy relationships with a given judge, and thus have the power to influence his or her decisions. A person who is on Facebook might have dozens, hundreds, or even thousands of "Facebook friends." Some legal ethics experts thus conclude that being a Facebook "friend" conveys very little, and that the Committee got it wrong.
And indeed, a minority of the Committee's panel would have allowed Facebook friendship between lawyers and judges, because the minority characterized being a Facebook "friend" as a status that is actually more like that of "a contact or acquaintance," one that does not convey the notion of "feelings of affection or personal regard."
But there is a strong basis for the Committee's ruling: Judges hold a very special position of trust. They must take extra pains to avoid even the appearance of impropriety or conflicts of interest.

Thompson & Knight partner  Greg Curry, president of the Texas Association of Defense Counsel, says that while the committee's intentions are well-placed, such passive and low-level contact is not likely to create ethical problems. However, lawyers with cases before a judge should rethink their on-line relationships. "The decision properly highlights that if you have an ongoing matter before a judge, then you should evaluate and properly limit any inappropriate contact." In such cases, Curry advises that it may be best for lawyers to remove a judge as a friend, and vice-versa.



by Robert Tharp at 1:27:37 pm

In-house counsel at Fortune 500 companies have selected the national law firm of McKool Smith as a "Go-To Law Firm" for litigation involving business and intellectual property. The firm, which maintains offices in Texas, New York, and Washington, D.C., will be recognized in the upcoming legal guide, "In House Law Departments at the Top 500 Companies."

This marks only the latest in a long line of accolades and accomplishments earned by the attorneys at McKool Smith. In the last year alone, the firm has added new practice areas, opened an office in Houston and beefed up recently opened offices in D.C. and New York City. The firm was recognized in The National Law Journal as having won more of the nation's Top 100 verdicts in 2008 than any other U.S. law firm. The firm also was named as one of the country's most innovated law firms in The National Law Journal's "Midsize Hot List."

In 2009 litigation, the firm successfully took on some of the tech sector's biggest household names, including winning a $200 million patent-infringement verdict against Microsoft and a $139 million verdict against SAP AG. Meanwhile, McKool Smith attorneys turned heads in a closely watched class-action, winning a $20 million class-action jury verdict on behalf of more than 170 Texas cities.


by Robert Tharp at 1:30:16 pm

The clock is ticking for potential members of a $4.6 million class-action settlement related to former First City Bancorporation workers whose retirement plans were mishandled. Eligible former employees have until Friday, Dec. 18, 2009, to submit claims and join the class, says business attorney  David Furlow of Thompson & Knight LLP and counsel for the class.
A Houston judge has approved a settlement in the case that would distribute approximately $4.6 million to former First City workers. The case centers around a defined-benefit retirement plan established and funded solely by First City for employees in 1976. First City cancelled the plan for being overfunded 10 years later. The company then made lump-sum payments to some participants and purchased long-term annuities on behalf of other employees from the Prudential Insurance Company.  After First City was declared insolvent in 1992 and went through an involuntary bankruptcy, successor corporations took the position that the former First City employees should receive nothing from the annuity investments. Former First City employees who have questions about their eligibility should review the information on the Class Administrator's Web site at
Lead Class Counsel Robert S. MacIntyre, Jr. of Houston's MacIntyre & McCulloch, LLP, emphasizes that these payments will not affect anyone's right to receive pension benefits.
"These beneficiaries are likely to be retirees in their 70s and 80s for whom this financial settlement could be very welcome," Furlow says. "There remain several hundred former First City employees who have not responded to our efforts to contact them about their rights to receive a distribution from the settlement fund, and the deadline to do so is approaching."

by Robert Tharp at 4:16:16 pm

The folks over at the Legal Bytes blog have an interesting take on the recent settlement struck by NetMass regarding a cloud computing patent held by inventor Mitchell Prust. Says Legal Bytes: This may be just the beginning of a wave of intellectual property lawsuits as cloud computing begins to evolve and become part of a commercial operational toolkit around the globe - not much different from those surrounding ATMs, online banking, networking and other once-emergent technology platforms. Stay tuned. You will be hearing more from us about clouds in the year ahead.

According to the settlement signed off on by Judge T. John Ward of the U.S. District Court for the Eastern District, NetMass admitted to infringing three online storage and computing patents(specifically U.S. Patent Numbers 6,714,968; 6,735,623 and 6,952,724) held by Prust and permanently enjoining NetMass from infringing on those patents in the future.

"We are extremely pleased to have resolved this matter in favor of Mr. Prust," says Christopher D. Banys of The Lanier Law Firm , who represtented Mr. Prust. "The patents in this litigation represent the building blocks for some of today's most sophisticated online applications, and we will continue to help our client protect his interests in these valuable patents."

IP Law 360 weighed in on the case, writing: Cloud storage and cloud computing technology has to do with moving away from storing information in physical locations like hard drives and instead keeping that data "in the ether," Banys said. Prust has been working on cloud technology for some time, but the technology "is just now catching fire."
Prust also is asserting the three patents against Apple Inc. in a separate case pending in the U.S. District Court for the Northern District of California.
The stipulated judgment and request for permanent injunction filed on behalf of Prust and NetMass in the Texas court on Monday said NetMass admitted every allegation in the complaint, except to the extent that willful infringement is alleged or exceptional case status was sought.
The case is ongoing with respect to Softlayer Technologies Inc., which Prust also named as a defendant when he filed the suit Aug. 5, though the parties are in settlement talks.
Prust's case against Apple was filed in the Texas court in April, and Judge Ward granted a motion to transfer the case to California in October.

by Robert Tharp at 3:07:51 pm

Lots of jaws have been dropping over law professor Brent T. White's recent academic paper in which he advises beleaguered homeowners to stop feeling guilty about walking away from their underwater mortgages.

Writes the LA Times: Go ahead. Break the chains. Stop paying on your mortgage if you owe more than the house is owrth. And most important: Don't feel guilty about it. Don't think you're doing something morally wrong.

The main point is that too often people's emotions get in the way of clear financial thinking about mortgages, turning them into what he calls "woodheads" - "individuals who choose not to act in their own self-interest." Most owners are too worried about feeling so f shame and embarrassment after a foreclosure, and ignore the powerful financial reasons for doing so."

Real estate attorney  Robert Miller of Dallas-based Prager & Miller says Texas' situation is less dicey than that of areas that saw dramatic home value run-ups, but much hinges on the economy. "If people have jobs and can afford the payment, they won't walk away," Miller says. "But if you're in a house with no equity and it's overvalued by 50 percent, people are deciding that there's no reason to continue, unless it's cheaper than renting." Against that backdrop, more mortgage lenders are participating in so-called short sales, selling foreclosed properties for less than the value of the foreclosed mortgage. In fact, the Obama administration is trying to reduce what has been described as a contentious, time-consuming short-sale process by requiring lenders and others to use nationally uniform documents, timelines and financial incentives. 

by Robert Tharp at 2:36:54 pm

Holiday parties are more dangerous than ever, thanks to the always-connected social media world we not inhabit. No longer are our embarrassing excesses limited to whispered comments around the water cooler - your drunken holiday party gaffs could become the next viral Internet sensation.

With party season in full swing, revelers should remember that these functions are rife with peril. "A work party is just that, an extension of work, and one false step can jeopardize your job," says Austin employment litigator Geoff Weisbart. "As a practical matter, you should never say or do anything at an office party that would not be permitted at the office." Weisbart notes that technology makes it increasingly easy to document events in any setting, and executives may be particularly susceptible to everything from embarrassment to sexual harassment claims when their bad behavior is immortalized in a worldwide YouTube video. "There is obviously a little relaxing of the lines of authority at a work party, but remember that the lines are not extinguished."

by Robert Tharp at 3:05:57 pm

As if environmental attorney Richard O. Faulk's CV isn't long and distinguished enough, the well-known litigator will soon add "working journalist" to his work history. Faulk, chair of Gardere's Environmental Practice Group and Climate Change Task Force, is one of the few U.S. lawyers traveling to Copenhagen for the United Nations Climate Change Conference. His presence in Copenhagen provides a ringside seat as countries hammer out a new international climate change agreement that would take the place of the Kyoto Protocol set to expire in 2012. But he's not just a passive observer, Faulk has secured a press pass as a credentialed journalist and plans to supply coverage of the proceedings to business and legal publications.

President Barack Obama is among world leaders representing more than 75 nations scheduled to attend the two-week conference, which begins Dec. 7 in Copenhagen, Denmark. Many nations and delegates believe that a global climate change agreement is necessary to limit the negative man-made effects on the climate system for future generations. Faulk says U.S. business interests need an agreement that's fair and includes industrialized and emerging nations. "This conference must produce an equitable international agreement to avoid the destructive effects of unilateral climate change measures on the United States economy. Even massive reductions in American greenhouse gas emissions will not be sufficient to impact climate in the absence of a universal agreement that binds all nations, including developing nations like China and India," he says.

That concern will be front-and-center in the conference, reports the Washington Post.  

That critical question -- to what extent China and India, which are not bound by the same obligations as industrialized countries under the U.N. process, would cut their emissions as part of a global pact -- remains unanswered. The top leader of each nation, both of whom met with Obama over the past week and a half, are expected to announce their own climate plans within days. Ned Helme, president of the Center for Clean Air Policy, said Obama is "walking a knife's edge" to encourage China and India to act without alienating Congress."

Faulk says such a comprehensive approach to climate change is vital to its success. "In the absence of universal and verifiable international accords, American industry will suffer major competitive disadvantages - and, more importantly, climate changes will not be effectively redressed," he says. "However important climate issues may be, we must have comprehensive tools to solve the situation as opposed to unilateral platitudes." 

by Robert Tharp at 4:19:03 pm

Enormous off-shore oil discoveries are positioning Cuba as the oil industry's next big regional player. Indeed, a growing number of non-U.S. energy companies are making big investments in Cuba. The lure is the discovery of a vast oil filed off the Cuban coast, which the U.S. Geological Survey estimates at 4.6 billion barrels or more. "The Cuban government has already awarded production-sharing contracts with foreign corporations representing more than $3 billion in capital investments, and more deals are likely," says Scott Schwind of the Houston office of Thompson & Knight. "Some sources estimate that Cuban deep waters may hold as much as 20 billion barrels of recoverable, high-quality oil. Success in developing these resources will depend on Cuba's ability to manage a number of significant challenges, such as legal and economic restrictions, technological deficiencies, environmental concerns and, perhaps most of all, the current U.S. trade embargo."

As USA Today notes, Cuban drilling could be uncomfortably close to Florida beaches: One day soon an oil rig will maneuver into position in waters less than 100 miles from the coast of Florida. A drill will plunge into the inky sea and begin chewing its way into the ocean floor, hunting for oil.
But the drilling rig won't belong to an American company, and any petroleum it discovers won't do a thing to curb the USA's addiction to foreign oil. Instead, any new sub-sea gusher will belong to Cuba.
That's right: Cuba. The island nation long has been known for its aromatic cigars and sweet rums. But after years of limited oil production on lands around Havana and in neighboring Matanzas province, Cuba is poised for a significant expansion of its oil program into the waters that separate it from the United States. And thanks to U.S. law, Cuba's drilling partners will be working closer to Florida beaches than any American company ever could.

by Robert Tharp at 4:25:35 pm

Joe Jackson's attempt to have the administrators of his son's will removed due to conflicts of interest is just the latest twist to the tangled mess that has followed Michael Jackson's death. But Steve Spitzer, head of the Probate Litigation Section at Cowles & Thompson, says the time to challenge the selection of an administrator is before the court appointment. "Prior to the executor being appointed, the claim that they are ‘unsuitable' can be made successfully for any number of reasons, but afterwards, it is very difficult to remove the executor," he says. Under Texas probate code, for example, proof of gross misconduct is among the only reasons a change would be made. "It comes down to the wishes of the deceased. If they knew of the conflict, there are no grounds for removal."

by Robert Tharp at 3:57:25 pm


Cell phone companies have been scrambling to reduce the amount of dangerous radiation produced from phones and headsets, but a Texas-based company says many telecom companies left something out: credit for a ground-breaking patent now in wide use.

The Dallas litigation firm of Reyes Bartolomei Browne has filed patent-infringement litigation on behalf of Tyler, Texas-based DownUnder Wireless, LLC, against 21 companies. Defendants in the lawsuit including Samsung, as well as service providers including AT&T, Sprint Nextel, T-Mobile and Verizon. Retailers named in the litigation include, Best Buy, Target, Wal-Mart and others.

According to the lawsuits, DownUnder invented a design that calls for cell phone antennas to be placed in the base of the phone rather than the traditional placement in the earpiece near the user's head. DownUnder's design, which was awarded U.S. Patent No. 6,741,215, also angles the antenna away from the user. Both features work together to reduce the amount of potentially harmful radiation that could be transmitted into an individual's brain.

Researchers have already linked cell phones to a biological effect on the brain. Before the end of the year, the World Health Organization (WHO) is expected to publish the results of a decade-long investigation into links between cell phone radiation and brain cancer. Published reports say the WHO study will show a "significantly increased risk" of some brain tumors related to long-term usage of mobile phones.

Writes Wired magazine: The effect of cellphone radiation on users has become an important issue for scientists, environmental organizations and cellphone industry groups. In the United States, the Federal Communications Commission sets the acceptable radiation standards for cellphones. As part of the device certification process, all handset makers have to offer a certificate from an independent lab that show how the device rates.

Children have much thinner skull bones and their brains have a lot more fluid, so their brain tissues would likely absorb twice more radiation compared to an adult’s brain. But cellphone radiation standards set by the government remains the same for both groups.


by Robert Tharp at 4:56:37 pm

People love to bash the Eastern District's "Rocket Docket" as a plaintiff-friendly venue where defendants don't have a chance. The National Law Journal recently called it "ground zero" in the controversy over venue-shopping. Apparently someone forgot to tell the folks at Munck Carter, LLP.

The firm earned a hard-won defense factory late last week after jurors unanimously agreed that Plano, Texas, based Applied Optical Systems Inc. did not infringe on three patents owned by Amphenol Fiber Systems International. The verdict clears the way for AOS to continue manufacturing and distributing its copyrighted line of military specification complaint TFOCA-II style fiber optic connectors and trademarked EZ-MATE connector.

Amphenol, represented by Greenberg Traurig, first sued AOS in November 2006 over the ‘849 patent, seeking monetary and injunctive relief. As part of AOS' defense, Munck Carter sought reexamination of the ‘849 patent in the U.S. Patent and Trademark Office. During reexamination, Amphenol was forced to narrow its claims and pursue damages only for products sold after March 31, 2009, the day the USPTO issued its re-examination certificate.

"We always believed that this case was about an industry leader using its patent portfolio to restrain its competitors," says William Munck, managing partner of Munck Carter. "Our initial defense strategy was to narrow the patent's scope through the reexamination and then show how AOS' connectors did not infringe the narrower patent. The correct verdict was reached."


by Robert Tharp at 4:38:32 pm

In a tight economy, it may not be just retailers who view this Christmas as a make-or-break season. Many salespeople, especially those on commissions, are under intense pressure also. As a result, these workers may be more than willing to skip breaks and work late without being compensated for the extra hours. However, employment attorney Carrie Hoffman of Gardere Wynne Sewell LLP cautions that not keeping an eye on the payroll clock could cost everyone. A federal report on judicial business of the United States courts notes that lawsuits under the labor standards act for misclassification, off-the-clock work and other violations jumped to 7,310 cases in 2007(the most recent year for which data is available) compared with 4,207 the previous year, and more than four times the 1,580 filings in 1995. The numbers for 2008 and 2009 will almost certainly reflect an increase. "It's problematic enough if the employees do it on their own, but worse if it is encouraged," she says. "In a down economy, payroll budgets have been slashed, leaving managers in need of more man-hours than the budget allows. Forcing off-the-clock work is not the answer though. What you may save will come back to cost you in the long run."

by Robert Tharp at 4:09:24 pm

Thompson & Knight attorney Russell Gully says GINA law will have broad impact for insurers and employers
What the NY Times calls the "most important antidiscrimination law in two decades" quietly takes effect next weekend(Nov. 21). The so-called Genetic Information Nondiscrimination Act forbids health employers from delving into an individual's family medical history in hiring, firing and promotions. It prohibits health insurers from considering such information - such as an individual's family history of heart disease - to deny coverage or set premiums or deductibles.

Writes the NY Times: The new law (called GINA) was passed by Congress last year because many Americans feared that if they had a genetic test, their employers or health insurers would discriminate against them, perhaps by firing them or denying coverage. In a nationwide survey, 63 percent of respondents said they would not have genetic testing if employers could see the results.

"The law is quite broad in its definitions," says Russell Gully in the Dallas office of Thompson & Knight. "When referring to family members the regulations are not just referring to those covered by the plan, but a wide range of individuals who may not even be full-blood relatives. These risk assessments can be used after enrollment, but any financial incentive or penalty to the employer or the individual is prohibited."

by Robert Tharp at 2:54:31 pm

Labor & employment attorney Mark Shank credits improved training, recognition of warning signs with safer wrokplace environment.
Despite heavily publicized incidences of workplace violence in recent months, such tragedies are actually on the decline according to federal statistics. Indeed, while stories of workplace violence have certainly grabbed the headlines lately - the Fort Hood tragedy, the San Diego bus mechanic who killed two co-workers or the unemployed man in upstate New York whose 12 shooting victims included a receptionist and a teacher - workplace violence has dropped over the last decade.

Part of the reason is that employers have learned the value of training and implementing safeguards that can prevent such tragedies. "Employers have become increasingly focused on training to recognize and report the potential for violence, while also making investments in electronic security and other safeguards," says Dallas employment attorney Mark Shank of Gruber Hurst Johansen & Hail. While the weak economy has boosted financial anxieties and stress levels, workplace homicides last year were the lowest in 16 years of tracking by the U.S. Labor Department - half the rate seen in the early 1990s - and most did not involve current or former employees. "Reporting concerns about a co-worker typically don't lead to a firing, but rather to counseling and other support programs that companies and insurers have created."

by Robert Tharp at 4:24:31 pm

Outsourcing is by now an established and attractive tool for businesses trying to increase productivity, but outsourcing and near sourcing guru Jeff Andrews has important advice for businesses to ensure that working agreements remain profitable throughout the lifetime of an outsourcing agreement.

In a column penned for, Andrews describes how problems can arise in just about any long-term service agreement. However, a well-defined

contract can address the kind of problems that typically arise in service agreements. Andrews writes: Disagreements over the scope of the services, static pricing that fails to remain competitive, and the service provider’s failure to deliver promised innovation and performance improvements can lead to increased costs that erode the profitability gains achievable through outsourcing. To address these problems, customers should include provisions in their contracts that comprehensively define the scope of the outsourced services, provide for service evolution and continuous improvement, and provide for pricing resets tied to changes in market prices.

Andrews, a partner in the Houston office of the global law firm of Thompson & Knight LLP, notes in Industry Today magazine the rise in so-called near sourcing as a competitive and attractive option for U.S. companies that have traditionally looked to India and China for services. The outsourcing of functions from the United States is shifting again – and a growing number of those jobs are returning to the Western Hemisphere. The emergence of a growing middle class in India, spurred in large part by the growth of the outsourcing industry, has meant that outsourcing providers are now rigorously competing with other service and technological industries for labor. Outsourcing providers in the subcontinent have been compelled to increase wages to attract and retain employees, and these profitability pressures are leading companies, including Indian-based providers, to establish service centers in Central American and South American countries.

by Robert Tharp at 11:47:46 am

Arnold & Itkin attorneys representing 28 who used controversial pain pumps following shoulder surgery
Interesting article in yesterday's Wall Street Journal highlights the FDA's increasing concern regarding so-called "pain pumps" that deliver pain killers directly to joints after surgery. Mounting complaints that these pain pumps are to blame for severe and often irreversible cartilage damage led the FDA last week to order the manufacturers to change warning labels on the devices.

Writes the WSJ: The Food and Drug Administration said from 2006 to 2008 it received 35 reports of severe cartilage damage in patients who were given pain pumps after joint surgery. Nearly all the reports involved patients who had shoulder surgery; more than half needed additional surgery, including joint replacement.
Pain pumps are small plastic tubes that deliver and regulate pain medicine constantly, usually for two to three days. The anesthetics in the FDA's alert include bupivacaine, marketed as Sensorcaine or Marcaine, and lidocaine. These anesthetics, the FDA noted, have been used safely in single injections for many years without any reports of cartilage decay.
The new notice says the FDA did not clear pain pump infusion devices using the anesthetics for "intra-articular" or joint surgery. The pumps are approved to be used after abdominal and other surgeries, such as hysterectomies. They are considered a better way to deliver pain-relieving medications because they target specific areas and don't involve narcotics.

Attorneys at the Houston trial law firm, Arnold & Itkin LLP, have filed five lawsuits on behalf of individuals injured using pain pumps following shoulder surgery. "The dangers of these pumps have been known for years, and even the FDA knew it was a bad idea to use them in shoulder joints," says Arnold & Itkin attorney Mike Pierce, who represents the plaintiffs. "Many of our clients have undergone multiple surgeries, all trying to fix a problem caused by these faulty pumps."
Named as defendants are several pain pump manufacturers, including Portage, Mich.-based Stryker Corp. (NYSE: SYK), London-based Orthofix Inc. (Nasdaq: OFIX), Lake Forest, Calif.-based I-Flow Inc. (Nasdaq: IFLO), East Aurora, N.Y.-based Moog Inc. (NYSE: MOG.A), San Jose, Calif.-based Sgarlato R.P. Inc., Vista-Calif.-based Breg Inc., Largo, Fla.-based Linvatec Corp., and Vista-Calif.-based DJO Inc. The lawsuits also name several leading pharmaceutical companies, including London-based AstraZeneca (NYSE:AZN), Abbott Park, Ill.-based Abbott Laboratories (NYSE:ABT), Schaumburg, Ill.-based APP Pharmaceuticals and Lake Forest, Ill.-based Hospira Worldwide (NYSE:HSP).

by Robert Tharp at 4:39:06 pm

Corporate Chapter 11 bankruptcy filings are way up in 2009, but recently released data from show that the real story behind 2009 bankruptcies is the emergence of the so-called PrePack.

Consider: Prepacks have tripled compared to YTD 2008 figures. And the rate appears to be increasing, with five of the last 10 public companies that filed for bankruptcy protection choosing to go the prepack route. Think Six Flags, Lear Corp., CIT and Charter Communications, among others. In a prepackaged bankruptcy, companies and their creditors agree on a reorganization plan prior to the bankruptcy filing and creditors have even voted on the plan. In a pre-negotiated bankruptcy creditors are able to agree on some aspects of a plan, but it is not as formal as a "prepack." The multi-year traditional bankruptcy is now often referred to as a "free fall."

"Because of the lengthy time and expense involved in traditional Chapter 11 proceedings, it's not surprising that the number of prepacks are rising," says Rhett Campbell of Thompson & Knight. Mr. Campbell and a legal team from Thompson & Knight recently concluded a prepack bankruptcy plan in just 25 days, one of the fastest on record.

by Robert Tharp at 3:39:12 pm

To state the incredibly obvious, litigation is expensive. Afterall, the average cost and duration of patent litigation is two years and $3 million, according to Managing Intellectual Property. Need an appeal? That'll be another $2 million. It's especially painful for smaller companies and solo inventors faced with the daunting prospect of trying to protect and enforce their patents, often against household name tech companies with large legal staffs. 

The Lanier Firm, a national litigation firm led by Mark Lanier, has created a unique, contingency-fee approach to IP litigation where clients pay no fees up front, and the firm gets paid only if it wins. Patent litigation veteran Christopher Banys heads The Lanier Law Firm's Intellectual Property Practice Group out of the firm's Palo Alto, Calif., offices. "We're extremely confident in the cases we're handling, and we are committed to helping inventors and companies whose intellectual property rights are infringed, and often outright stolen," Mr. Banys says. The firm already is going up against tech heavyweights including Nintendo, Apple, as well as St. Jude Medical, one of the world's leading medical equipment producers.

by Robert Tharp at 3:47:38 pm

Criticism is mounting against Yaz, the world's No. 1 selling birth control. Among other things, the FDA has admonished the makers of Yaz three times in recent years for its misleading ad campaigns. Meanwhile, more than 100 lawsuits have been filed related to medical complications blamed on the drug. Dallas attorney Angel Reyes of Reyes Bartolomei Browne says women taking this medication should consider speaking with their doctors about alternatives.

While most oral contraceptives carry a risk of blood clots, stroke or heart attack, studies show that women taking Yaz suffer such side effects in much greater proportion than do those taking more traditional birth control pills. "Women have the right to know the truth about Yaz," Reyes says. "Bayer marketed these pills to women in a way that the FDA says minimized the risks associated with the drug. Women need to understand those risks and make decisions based on the best information." Yaz is the top-selling oral contraceptive in the U.S., including 2008 worldwide sales of $1.8 billion.

by Robert Tharp at 3:01:40 pm

Despite flawed initial response, Family Law attorney Betsy Branch says criminal courts are proper venue for abuses uncovered at secretive West Texas compound

Texas child-abuse investigators were roundly criticized for the removal of hundreds of children from a West Texas polygamist sect last year. One of those early critics, Family Law attorney Betsy Branch of Dallas-based McCurley Orsinger McCurley Nelson & Downing, says that while the state's initial response went too far, the subsequent misdemeanor and felony charges are a proper outcome of the investigation. Testimony is now underway in the first criminal trial for Yearning For Zion sect member Raymond Jessop for the offense of sexual assault of a child. "The Supreme Court of Texas agreed that the state went too far with the wholesale removal of children from their parents at this compound," Branch says. "But at the same time, the action by Child Protective Services exposed evidence of very serious sexual offenses against some of the sect's teenage girls."

Authorities allege the girl, now 21, was married to Jessop at age 15 and gave birth at 16. Church records that defense attorneys are fighting to keep out of the trial indicate the girl had previously been married to Jessop's brother before being reassigned to Jessop, who authorities allege has nine wives, many of whom were underage when when they married. According to the Assoicated Press, forensic expert Amy Smuts testified Monday that the probability of Jessop being the father of the alleged victim's daughter was 99.999998 percent.

Jessop's trial is the first since Texas authorities raided the YFZ Ranch in April 2008, sweeping 439 children into foster case. The children have all been returned to parents or other relatives, but thousands of pages of documents and DNA tests taken in the raid have been used to build criminal cases against Jessop and 11 other sect men. The FLDS have historically been based around the Arizona-Utah line but purchased a ranch in Eldorado about six years ago, building numerous sprawling log homes and a towering limestone temple. The sect is a breakaway of the Church of Jesus Christ of Latter-day Saints, which renounced polygamy more than a century ago and does not recognize the sect.

by Robert Tharp at 11:22:57 am

It's hard not to sympathize with 67-year-old Grand Prairie resident Willis Willis. The Vietnam vet was a regular Texas lottery player, known on a first-name basis by the lottery agents/clerks at the Lucky Mart where he bought his numbers...That is, until one of the clerks stole his winning ticket. The Texas Lottery Commission is now taking a curious position: while fully acknowledging that Mr. Willis purchased the winning ticket, commission lawyers say the indicted lottery agent who stole Mr. Willis's ticket and fled the country is the ticket's rightful owner.

Lottery: Grand Prairie man won't get $1 million prize

07:27 AM CST on Tuesday, November 3, 2009
By AVI SELK / The Dallas Morning News
As if things weren't confusing enough for a man named Willis Willis.
During a meeting on Monday, the Texas Lottery Commission told the 67-year-old Grand Prairie man that he is not the rightful winner of a $1 million prize - even though its own investigators have told police he bought the winning ticket.
The real winner, the commission said, is the convenience store clerk who was indicted on charges that he cheated Willis out of his ticket in May. The clerk, 25-year-old Pankaj Joshi, is believed to have fled the country.
"I feel like I've been stolen from twice," a crestfallen Willis remarked, according to his lawyers.
The clerk "did it once - now the lottery's done it again."
But even as Willis' attorneys discussed whether they should sue the lottery commission for the prize, the case took another twist.
The Travis County district attorney's office jumped into the fray Monday evening, saying in no uncertain terms that Willis won the lottery.
"That's Mr. Willis' money. He was the true winner," said Assistant District Attorney Patty Robertson.
And the office promises to put its money where its mouth is - Robertson said $365,000 that has been seized from the store clerk's bank accounts will be turned over to Willis as soon as the paperwork goes through.
But that's not enough for Willis, whose lawyers claim the commission owes him the full prize, regardless of what Joshi did.
A lottery spokesman wouldn't comment about anything, citing pending litigation.
Litigation is not quite pending but distinctly possible, Willis' lawyers said.
"We're looking at all the alternatives we have," said attorney Randy Howry. "And a lawsuit is certainly one alternative."
The debacle began in May when, according to police and lottery investigators, Willis unsuspectingly walked into the Lucky Food Store in Grand Prairie with a winning Mega Millions ticket.
Joshi told Willis that his ticket was a loser and later cashed the prize himself.
Joshi has been indicted on a charge of claiming a lottery prize by fraud, but while police search for him, Willis' lawyers are demanding the commission pay their client the full million - less taxes - right away.
They say the commission was negligent to unquestioningly allow Joshi, "one of its own agents," to walk off with the prize.
That argument didn't fly with the commission.
According to Howry, lottery lawyers said they empathized with the out-of-work maintenance man but that Willis had "no recourse" with them.
The ticket bearer is the winner, they said. Indicted or otherwise.

by Robert Tharp at 11:06:16 am

Entire cottage industries are devoted to helping dissect the common traits of successful attorneys and judges. Here's one not-so-secret trait shared by most who have risen in the legal ranks: a genuine respect for the roles played and the work done by paralegals. Talk about underappreciated - try to think of a great attorney or law firm that doesn't also have a great paralegal or an entire team of them.

Justice Linda Thomas, who retires from the bench October 31 after nearly 15 years as chief justice of the 5th Court of Appeals in Dallas, has long appreciated the paralegal's role in the legal industry. In fact, she began her career as one(then called a "legal assistant"). Linda went on to earn her law degree and have a long and illustrious career on the bench. She shepherded the development of the paralegal profession as Chair of the State Bar of Texas Standing Committee on Paralegals. She also wrote the first Texas appellate opinion on the recovery of fees for work performed by paralegals.

Today marks the Seventh Annual Paralegal Day, and the State Bar's Paralegal Division, the Dallas Area Paralegal Association and the North Texas Paralegal Association honors Linda's commitment to the industry today with an award for her service.


by Robert Tharp at 2:39:57 pm

The rock-bottom price of natural gas has caused many oil & gas production companies to look elsewhere for better returns. Many of these companies are taking the drilling and extraction innovations developed in the U.S. in hotspots like the Barnett Shale in Tarrant County and northern Louisiana's Haynesville Shale to developing natural gas markets where production is less costly and natural gas brings higher prices.

"We're seeing significant interest from U.S. producers in developing unconventional gas resources in Europe and Asia," says Scott Schwind of the Houston office of Thompson & Knight. "Exploration and production is cranking up in China, India, Poland and France, in many cases using the imaging and extraction technologies developed in Texas and Pennsylvania. Until demand and prices increase, pursuing new domestic reserves may not be a sound fiscal decision. However, overseas investments may be a different story."

Writes the WSJ: The development of the Barnett Shale almost single-handedly reversed the decline in U.S. natural-gas production. Last year, the Barnett produced four billion cubic feet of gas a day, making it the largest field in the U.S. Other companies such as Newfield Exploration Co., Southwestern Energy Co. and Range Resources Corp. found shale fields across the U.S.

by Robert Tharp at 4:44:48 pm

When Thompson & Knight helped guide Baseline Oil & Gas through Chapter 11 bankruptcy proceedings in 25 days, it marked one of the top 10 fastest bankruptcies to be completed in the U.S. Such is the value of increasingly popular prepackaged bankruptcies, which allow companies to streamline bankruptcies by negotiating with creditors before formally filing for reorganization. "Through the use of a pre-packaged Chapter 11 plan and a concentrated effort, we were able to receive confirmation of this reorganization plan in less than a month, with the confirmation hearing lasting only 60 minutes, which is truly extraordinary for this type of transaction," says Rhett Campbell of Thompson & Knight, who led Baseline's legal team. A publicly traded company that controls energy-producing properties in Texas and Indiana, Baseline's bankruptcy confirmation hearing was held and the order of confirmation was signed on the same day.

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