Insights

The settlement approval hearing in In re College Athlete NIL Litigation, No. 4:20-cv-03919 (N.D. Cal.) is set for April 7, 2025. Commonly known as the “House Settlement,” the pending resolution between plaintiffs and the NCAA, if approved by Judge Claudia Wilken, could have far-reaching implications for higher education NCAA-member institutions and student-athletes.

Last week, we discussed COVID-related developments in the federal courts of appeals and federal district courts, noting the wide variety of measures that those courts have taken to adjust their operations in light of the COVID-19 pandemic. The state courts have taken a similarly wide range of measures to address this crisis, drastically altering many of their operations. State courts have been even more varied in their approach than the federal courts, with different levels of courts within the same state taking different (and sometimes potentially conflicting) actions. For example, the California Supreme Court and six appellate divisions have automatically extended all deadlines set forth in the California Rules of Court by 30 days—but those extensions have different effective dates and will expire on different days in mid- to late April. Moreover, those blanket extensions do not appear to cover filing deadlines for notices of appeal or designations of the record in the superior court. To complicate matters further, some of the California courts do not allow e-filing, suggesting that filings may still need to be submitted at the court house drop box—despite the fact that many courts are ostensibly closed to the public.

On April 18, the U.S. District Court for the Northern District of New York unsealed an indictment accusing Zheng Xiaoqing, a former senior engineer for steam turbine design at GE, and Zhang Zhaoxi, a Chinese national, of conspiring to steal GE’s design data and models, engineering drawings, material specifications, configuration files, and other proprietary trade secret information related to GE’s turbine technology. The indictment provides yet another cautionary tale to companies trying to protect their trade secrets.

A recent decision from the Eighth Circuit serves as a reminder that trade secret holders must not sleep on their rights when presented with information that would put a reasonable person on notice of potential misappropriation. See CMI Roadbuilding, Inc. v. Iowa Parts, Inc., No. 18-1075, 2019 WL 1474022 (8th Cir. Apr. 4, 2019). The Eighth Circuit affirmed the district court’s grant of summary judgment in favor of the defendant, confirming that the plaintiff’s claims under the Defend Trade Secrets Act (DTSA) and Iowa Uniform Trade Secrets Act (UTSA) were time barred, and rejecting the plaintiff’s tolling argument as a matter of law.

In an indictment unsealed last week, the U.S. Department of Justice charged two companies – one based in China and the other in Taiwan – as well as three individuals, with trade secret theft, conspiracy to commit trade secret theft, economic espionage, and other related crimes. These charges are the latest in a recent string of similar prosecutions, as U.S. officials have sought to combat the threat of Chinese economic espionage against American technology companies, defense contractors, and other entities. 

Responding to a perceived uptick in anticompetitive agreements between companies over employment matters, the Department of Justice and Federal Trade Commission on October 20th issued its new Antitrust Guidance for Human Resources Professionals.

Today, the Federal Trade Commission sued Endo, Impax, Watson, and others for "anticompetitive reverse-payment agreements orchestrated by Endo to prevent lower-cost generic competition to its two most important branded prescription drug products," Opana ER, an opioid drug, and Lidoderm, a lidocaine patch. These two drugs represented approximately 64 percent of Endo's total annual revenues. According to the FTC, this is the first time the agency has brought a case "challenging an agreement not to market an authorized generic – often called a 'no-AG commitment' – as a form of reverse payment."

On June, 26, 2015, the U.S. Court of Appeals for the Third Circuit held that non-cash "payments" made by a patentee drug manufacturer to a prospective generic drug manufacturer in exchange for delayed entry of a generic drug is an actionable "reverse payment" and may be subject to antitrust scrutiny under the Supreme Court's decision in FTC v. Actavis, 133 S. Ct. 2223 (2013). King Drug Company of Florence, Inc. v. Smithkline Beecham Corp., et al., Case No. 14-1243 (Smithkline). 

The FTC announced on May 28, 2014 that, just days before trial, it had settled its long-running antitrust lawsuit against Cephalon, Inc. and its parent company Teva Pharmaceutical Industries, Ltd. In the suit, the agency alleged that Cephalon unlawfully protected its monopoly for the sleep-disorder drug Provigil through a set of so-called "reverse payment patent settlements" with potential generic entrants. According to the FTC, the payments were in the form of commercial contracts that were favorable to the generic companies and executed as part of the settlement agreements.    

On May 7, 2015, the California Supreme Court's ruling in In re Cipro made clear that so called "pay-for-delay" settlement agreements are subject to challenge under California state antitrust law. In re Cipro Cases I & II, No. S198616, 2015 WL 2125291 (Cal. May 7, 2015) (Cipro). The decision, the first for the California Supreme Court, represents the latest in a line of cases in various federal and state courts throughout the country that have sought to understand and apply the framework set forth by the U.S. Supreme Court in F.T.C. v. Actavis, Inc., 133 S. Ct. 2223 (2013) (Actavis). The ruling aligned California's position on these "reverse" settlement agreements between pharmaceutical companies with that of federal antitrust laws as set forth by the Supreme Court Actavis decision in 2013. 

On April 21, 2015, by a 7-2 vote, the Supreme Court affirmed the Ninth Circuit's ruling that state law antitrust claims are not preempted by the Natural Gas Act (NGA) (Oneok, Inc. v. Learjet, Inc., No. 13-271). The NGA provides rate-setting authority to the Federal Energy Regulatory Commission (FERC) over the interstate shipment and sale of natural gas for resale (i.e., wholesale sales),1 but the Supreme Court's decision in Oneok clearly imposes boundaries on that authority.2  

On March 26, the director of the Chicago regional office of the National Labor Relations Board (Board) issued a startling decision. The director granted a petition for an election filed by a labor union seeking to represent student athletes on Northwestern University's football team. The decision concludes that athletes who receive scholarships should be viewed as employees under Section 2(3) of the Labor Management Relations Act (LMRA) and thus eligible to form a union and engage in collective bargaining with the University. The ruling defines the appropriate bargaining unit as "all football players receiving grant-in-aid scholarship[s] and not having exhausted their playing eligibility," and excludes students who "walk-on" to the team. The university opposed the union's petition, arguing that scholarship athletes are not employees, but similar to graduate teaching assistants who receive stipends and whom the Board has historically held are not employees.

On August 30, the U.S. Court of Appeals for the Federal Circuit issued an en-banc decision affirming the International Trade Commission's ("ITC") holding that the "patent misuse" doctrine did not prevent U.S. Philips Corporation ("Philips") from enforcing its patent rights against Princo Corporation and Princo America Corporation (collectively "Princo").  The court's decision, Princo Corp. v. International Trade Comm'n, No. 2007-1386 (Fed. Cir. Aug. 30, 2010) confirms the narrow scope of the patent misuse doctrine, and underscores the broad protection afforded patent holders when licensing their patents.  The case also highlights the challenges that can arise when reconciling intellectual property and antitrust law.