text:
59.17(2)(b)6. 6. Hire and supervise the number of employees that the county executive reasonably believes are necessary for him or her to carry out the duties of the county executive's office, subject to board approval of the county executive department budget.
59.17(2)(b)7. 7. Together with the commissioner of the opportunity schools and partnership program under subch. II of ch. 119, solicit private gifts and grants for use by the commissioner to further the purposes of the opportunity schools and partnership program under subch. II of ch. 119 and without oversight or approval of the county board.
59.17(2)(bm)1.a. a. The director of parks, recreation and culture under s. 27.03 (2).
59.17(2)(bm)1.b. b. The director of the county department of human services under s. 46.21 (1m) (a).
59.17(2)(bm)1.c. c. The director of the county department of administration under s. 59.52 (1) (a).
59.17(2)(bm)1.d. d. The director of personnel of the county civil service commission under s. 63.02 (2).
59.17(2)(bm)1.e. e. The director of transportation under s. 83.01 (1).
59.17(2)(bm)2. 2. Each appointment under subd. 1. is subject to the confirmation of the county board and is in the unclassified service, serving at the pleasure of the county executive and holding office until a new appointment is made by the county executive and confirmed by the board. An appointee of the county executive may assume his or her duties immediately, pending board action which shall take place within 60 days after the county executive submits the appointment to the board for confirmation. No prior appointee may serve longer than 6 months after the term for which he or she was appointed and confirmed expires, unless reappointed and reconfirmed. The term of each appointment is 4 years or less. The county executive shall comply with hiring policies set by the board when making appointments under subd. 1.
59.17(2)(br) (br) In any county with a population of less than 750,000, appoint and supervise the heads of all county departments except those elected by the people and except where the statutes provide that the appointment shall be made by other elected officers. Notwithstanding any statutory provision that a board or commission or the county board or county board chairperson appoint a department head, except s. 17.21, the county executive shall appoint and supervise the department head. Notwithstanding any statutory provision that a board or commission supervise the administration of a department, the department head shall supervise the administration of the department and the board or commission shall perform any advisory or policy-making function authorized by statute. An appointment by the county executive under this subsection requires the confirmation of the board unless the board, by ordinance, elects to waive confirmation or unless the appointment is made under a civil service system competitive examination procedure established under s. 59.52 (8) or ch. 63. Any department head appointed by a county executive under this subsection may be removed at the pleasure of the county executive unless the department head is appointed under a civil service system competitive examination procedure established under s. 59.52 (8) or ch. 63.
59.17(2)(c) (c) Appoint the members of all boards and commissions where appointments are required and where the statutes provide that the appointments are made by the county board or by the chairperson of the county board. All appointments to boards and commissions by the county executive are subject to confirmation by the county board.
59.17(3) (3) Administrative secretaries to county executive; staff. The county executive may appoint administrative secretaries using hiring procedures which shall be exempt from county civil service competitive examination procedures and such additional staff assistants as the board provides.
59.17(4) (4) Compensation of county executive, deputy, and staff assistants. The board shall fix the compensation of the county executive, the county executive's administrative secretary and the county executive's staff assistants, provided that the salary of the county executive shall be established at least 90 days prior to any election held to fill the office.
59.17(5) (5) Message to the board; submission of annual budget. The county executive shall annually, and otherwise as may be necessary, communicate to the board the condition of the county, and shall recommend such matters to the board for its consideration as he or she considers expedient. Notwithstanding any other provision of the law, he or she shall be responsible for the submission of the annual budget to the board and may exercise the power to veto any increases or decreases in the budget under sub. (6).
59.17(6) (6) County executive to approve or veto resolutions or ordinances; proceedings on veto. Every resolution adopted or ordinance enacted by the board shall, before it becomes effective, be presented to the county executive. If the county executive approves, the county executive shall sign it; if not, the county executive shall return it with his or her objections, which objections shall be entered at large upon the journal and the board shall proceed to reconsider the matter. Appropriations may be approved in whole or in part by the county executive and the part approved shall become law, and the part objected to shall be returned in the same manner as provided for in other resolutions or ordinances. If, after such reconsideration, two-thirds of the members-elect of the board agree to adopt the resolution or enact the ordinance or the part of the resolution or ordinance objected to, it shall become effective on the date prescribed but not earlier than the date of passage following reconsideration. In all such cases, the votes of the members of the board shall be determined by ayes and nays and the names of the members voting for or against the resolution or ordinance or the part thereof objected to shall be entered on the journal. If any resolution or ordinance is not returned by the county executive to the board at its first meeting occurring not less than 6 days, Sundays excepted, after it has been presented to the county executive, it shall become effective unless the board has recessed or adjourned for a period in excess of 60 days, in which case it shall not be effective without the county executive's approval.
59.17(7) (7) Removal from office; vacancy, how filled. The county executive may be removed from office by the governor for cause under s. 17.16. A vacancy in the office of county executive shall be filled temporarily, within 30 days of the date of the vacancy, by appointment by the chairperson of the board, subject to confirmation by the board, from among electors of the county. Within 7 days following the occurrence of the vacancy, the clerk shall order a special election to be held under s. 8.50 to fill the vacancy. If the vacancy occurs after October 31 but not later than 49 days before the day of the spring primary, the special election shall be held concurrently with the spring primary and election.
59.17(8) (8) Succession in office.
59.17(8)(a)(a) In the event of the inability of the county executive to serve because of mental or physical disease, the powers and duties of the office shall devolve upon the chairperson of the board until such time as the disability shall cease.
59.17(8)(b) (b) In the event that a vacancy in the office of county executive occurs, the chairperson of the board shall immediately succeed to the office and assume the duties and responsibilities thereof until the board has confirmed an appointment to the office under sub. (7).
59.17 History History: 1975 c. 264; 1977 c. 257, 259; 1979 c. 260; 1981 c. 217, 314, 329; 1981 c. 391 s. 210; 1983 a. 148; 1983 a. 192 ss. 116, 303 (2); 1983 a. 239, 484; 1985 a. 29 ss. 1150 to 1158, 1160, 3200 (56), 3202 (56); 1985 a. 135 s. 85; 1985 a. 176; 1989 a. 273; 1991 a. 269, 274, 316; 1995 a. 16 s. 2; 1995 a. 201 s. 101; Stats. 1995 s. 59.17; 2013 a. 14; 2015 a. 55; 2017 a. 207 s. 5.
59.17 AnnotationA county executive's partial-veto power is similar to the governor's power. 73 Atty. Gen. 92.
59.17 AnnotationThe powers of an elected county executive are discussed. 77 Atty. Gen. 113.
59.17 Annotation A county board may adopt an ordinance creating the office of county executive and make the ordinance contingent upon approval in a countywide referendum. The office of county executive is created at the time the results of the referendum become final. The first election for the office occurs at least 120 days after the creation becomes effective. The county executive takes office on the 3rd Tuesday in April of the election year. 78 Atty. Gen. 227.
59.17 Annotation The veto of an appropriation under sub. (5) does not restore the appropriation to its level in the county executive's proposed budget. 80 Atty. Gen. 214.
59.17 Annotation Section 33.28 (2) (a) provides that the county representative upon a public inland lake protection and rehabilitation board is to be a person appointed by the county board. By operation of sub. (2) (c), the power of appointing the county representative to a public inland lake protection and rehabilitation district is therefore transferred from the county board to the county executive once the office of county executive is created, subject to confirmation by the board. OAG 2-09.
59.17 Annotation A county board may require a county executive to clarify that he or she is not representing the position of the county when engaging in lobbying activities on behalf of a position that is not the position adopted by the county. A county board may require county department heads to submit reports to the county board, but it cannot require county department heads appointed and supervised by the county executive to report to the board in a supervisory sense. A county board is not authorized to demote, suspend, or discharge a department head or employee not appointed by the board unless that power is specifically conferred by statute. OAG 6-13.
59.17 Annotation The Milwaukee County Board may require confirmation of the county executive's appointments to any position in the unclassified service that is a department head. The Board may not require confirmation of the executive's or other administrators' appointments to positions in the unclassified service that are not department heads. OAG 7-13.
59.17 Annotation A county executive has the authority to reduce a line item budget appropriation from one specific dollar figure to another through the use of his or her partial veto. Constitutional amendments limiting the governor's veto authority in Art. V, s. 10 (1) (c) impose no corresponding limit upon the veto authority of the county executive under Art. IV, s. 23a. OAG 6-14.
59.18(1)(1) Appointment. Counties having a population of less than 750,000 may by resolution of the board or by petition and referendum create the office of county administrator. The county administrator shall be appointed by majority vote of the board. Such petition and election shall follow the procedure provided in s. 9.20 (1) to (6). If any member of the board is appointed as county administrator, his or her status as a member of the board is thereby terminated, except that in the case of a vacancy in the office of county administrator by reason of removal, resignation or other cause, the board may appoint any member of the board as acting county administrator to serve for a period of 15 days while the board is considering the selection of a county administrator.
59.18(2)(a) (a) Coordinate and direct all administrative and management functions of the county government not otherwise vested by law in boards or commissions, or in other elected officers.
59.18(2)(b) (b) Appoint and supervise the heads of all departments of the county except those elected by the people and except where the statutes provide that the appointment shall be made by elected officers; but the county administrator shall also appoint and supervise all department heads where the law provides that the appointment shall be made by a board or commission, by the chairperson of the county board or by the county board. Notwithstanding any statutory provision that a board or commission supervise the administration of a department, the department head shall supervise the administration of the department and the board or commission shall perform any advisory or policy-making function authorized by statute. Any appointment by the county administrator under this paragraph requires the confirmation of the county board unless the board, by ordinance, elects to waive confirmation or unless the appointment is made under a civil service system competitive examination procedure established under s. 59.52 (8) or ch. 63. Any department head appointed by a county administrator under this paragraph may be removed at the pleasure of the county administrator unless the department head is appointed under a civil service system competitive examination procedure established under s. 59.52 (8) or ch. 63.
59.18(2)(c) (c) Appoint the members of all boards and commissions where the statutes provide that such appointment shall be made by the county board or by the chairperson of the county board. All appointments to boards and commissions by the county administrator shall be subject to the confirmation of the county board.
59.18(3) (3) Administrative secretary to county administrator; staff. The county administrator may appoint an administrative secretary, and additional staff assistants, as necessary.
59.18(4) (4) Compensation of county administrator and staff. The board shall fix the compensation of the county administrator, the county administrator's administrative secretary and the county administrator's staff assistants.
59.18(5) (5) Message to the board; submission of annual budget. The county administrator shall annually, and otherwise as necessary, communicate to the board the condition of the county, and recommend such matters to the board for its consideration as the county administrator considers expedient. Notwithstanding any other provision of the law, the county administrator shall be responsible for the submission of the annual budget to the board.
59.18(6) (6) Qualifications for appointment. The county administrator shall be appointed solely on merit. In appointing the county administrator, the board shall give due regard to training, experience, administrative ability and general qualifications and fitness for performing the duties of the office, and no person shall be eligible to the office of county administrator, who is not by training, experience, ability and efficiency qualified and generally fit to perform the duties of such office. No weight or consideration shall be given by the board to residence, to nationality, or to political or religious affiliations.
59.18(7) (7) Removal. The board may remove the county administrator at any time that the county administrator's conduct of the county administration becomes unsatisfactory, and engage a successor. The action of the board in removing the county administrator shall be final.
59.18(8) (8) Vacancy, how filled. A vacancy in the office of the county administrator by reason of removal, resignation or other cause, shall be filled by appointment by majority vote of the board.
59.18 History History: 1983 a. 192 ss. 118, 303 (2); 1985 a. 29, 176; 1989 a. 273; 1991 a. 316; 1995 a. 201 s. 102; Stats. 1995 s. 59.18; 2017 a. 207 s. 5.
59.18 Annotation A county board can abolish the office of county administrator by majority vote. 61 Atty. Gen. 322.
59.18 Annotation Sub. (2) (b) transfers the authority to supervise the administration of county departments from boards and commissions to department heads appointed by the county administrator. Sub. (2) therefore entirely negates s. 59.70 (2) insofar as it provides that the board may “employ" a system manager. In a county with a county administrator, the solid waste management board is purely an advisory body to the county administrator and to the county board and a policy-making body for the solid waste management department as a whole. OAG 1-12.
59.19 59.19 Administrative coordinator. In any county which has not created the office of county executive or county administrator, the board shall designate, no later than January 1, 1987, an elected or appointed official to serve as administrative coordinator of the county. The administrative coordinator shall be responsible for coordinating all administrative and management functions of the county government not otherwise vested by law in boards or commissions, or in other elected officers.
59.19 History History: 1985 a. 29; 1995 a. 201 s. 103; Stats. s. 59.19.
59.19 Annotation A sitting member of a county board must resign the office of supervisor before being appointed to the permanent position of county administrative coordinator under this section. OAG 1-11.
59.20 59.20 County offices and officers.
59.20(1)(1) Eligibility for county office. No person may file nomination papers as a candidate for, have his or her name placed on a ballot for election to, or hold a county elective office who is not an elector of the county. No person may file nomination papers as a candidate for, have his or her name placed on a ballot for election to, or hold the office of county supervisor who is not an elector of the supervisory district from which he or she is chosen.
59.20(2) (2) County officers; terms.
59.20(2)(a)(a) Beginning in 2008 and quadrennially thereafter, a register of deeds, county clerk, and county treasurer shall be chosen at the general election by the electors of each county for the term of 4 years. Except as provided in this paragraph, beginning in 2008 and quadrennially thereafter, a surveyor shall be chosen at the general election by the electors of each county in which the office of surveyor is filled by election, for the term of 4 years. No surveyor shall be elected in counties having a population of 750,000 or more. The regular term of office of each register of deeds, county clerk, county treasurer, and county surveyor shall commence on the first Monday of January next succeeding his or her election and shall continue 4 years and until his or her successor qualifies.
59.20(2)(am) (am) Beginning in 2012 and quadrennially thereafter, a comptroller shall be chosen at the spring election by the electors of each county having a population of 750,000 or more for the term of 4 years. The regular term of office of each comptroller shall commence on the 3rd Tuesday in April next succeeding his or her election and shall continue 4 years and until his or her successor qualifies.
59.20(2)(b) (b) Beginning in 2006 and quadrennially thereafter, a sheriff shall be chosen at the general election by the electors of each county for the term of 4 years. Except as provided in this paragraph, beginning in 2006 and quadrennially thereafter, a coroner shall be chosen at the general election by the electors of each county in which there is a coroner, for the term of 4 years. No coroner shall be elected in counties having a population of 750,000 or more or in counties in which a medical examiner system is instituted. The regular term of office of each sheriff and coroner shall commence on the first Monday in January next succeeding his or her election and shall continue 4 years and until his or her successor qualifies.
59.20(2)(bm) (bm) Beginning in 2006 and quadrennially thereafter, a clerk of circuit court shall be chosen at the general election for the term of 4 years by the electors of each county, subject to removal as provided by law. The regular term of office of each clerk of circuit court shall commence on the first Monday of January next succeeding his or her election and shall continue 4 years and until his or her successor qualifies.
59.20(2)(c) (c) In counties that elect a surveyor, the surveyor shall be a professional land surveyor. In lieu of electing a surveyor in any county having a population of less than 750,000, the board may, by resolution, designate that the duties under ss. 59.45 (1) and 59.74 (2) be performed by any professional land surveyor employed by the county. Any surveyor employed by a county having a population of 750,000 or more shall be a professional land surveyor.
59.20(2)(d) (d) Except as provided in par. (b), in any county containing one town only, the county board may, by resolution, designate any county office a part-time position, combine 2 or more county offices, and, if concurred in by the town board, combine the offices of county clerk and town clerk and any other county and town offices, provided that the offices combined are not incompatible and the combination is not expressly forbidden by law. If the town board so concurs, the election may be for the combined office and no separate election for the town office shall be held until after the county board has by resolution decided to abandon the combination and the town board has concurred by resolution.
59.20(3) (3) Offices where kept; when open.
59.20(3)(a) (a) Every sheriff, clerk of the circuit court, register of deeds, treasurer, comptroller, register of probate, clerk, and county surveyor shall keep his or her office at the county seat in the offices provided by the county or by special provision of law; or if there is none, then at such place as the board directs. The board may also require any elective or appointive county official to keep his or her office at the county seat in an office to be provided by the county. All such officers shall keep their offices open during the usual business hours of any day except Sunday, as the board directs. With proper care, the officers shall open to the examination of any person all books and papers required to be kept in his or her office and permit any person so examining to take notes and copies of such books, records, papers, or minutes therefrom except as authorized in par. (c) and ss. 19.36 (10) and (11) and 19.59 (3) (d) or under ch. 69.
59.20(3)(b) (b) If any officer described in par. (a) neglects or refuses to comply with any of the provisions of this subsection, the officer shall forfeit $5 for each day that the noncompliance continues. Actions for the collection of a forfeiture under this paragraph may be brought upon the complaint of the district attorney of the proper county or of any party aggrieved by the officer's refusal or neglect.
59.20(3)(c) (c) Any board may, by ordinance, provide that the cutoff reception time for the filing and recording of documents shall be advanced by one hour in any official business day during which time the register of deeds office is open to the public, in order to complete the processing, recording, and indexing to conform to the day of reception. Any register of deeds may provide in his or her notice under s. 19.34 (1) that requests for inspection or copying of the records of his or her office may be made only during a specified period of not less than 35 hours per week. For all other purposes, the register of deeds office shall remain open to the public during usual business hours.
59.20(3)(d) (d) Any register of deeds who in good faith makes an erroneous determination as to the accessibility of a portion of a record, to members of the public under s. 19.36 (6), is not subject to any penalty for denial of access to the record under s. 19.37 (4).
59.20 History History: 1995 a. 201 ss. 248, 249, 251, 268; 1995 a. 225 s. 145; 1997 a. 35; 2003 a. 47, 321, 322; 2005 a. 41; 2007 a. 158; 2011 a. 62; 2013 a. 358; 2017 a. 59; 2017 a. 207 s. 5.
59.20 Note NOTE: 2003 Wis. Act 47, which affects this section, contains extensive explanatory notes.
59.20 Annotation Section 59.14, [now s. 59.20 (3)] is a legislative declaration granting those persons who come under its coverage an absolute right of inspection subject only to reasonable administrative regulations. State ex rel. Bilder v. Town of Delavan, 112 Wis. 2d 539, 334 N.W.2d 252 (1983).
59.20 Annotation A newspaper had the right to intervene to protect its right to examine sealed court files. State ex rel. Bilder v. Town of Delavan, 112 Wis. 2d 539, 334 N.W.2d 252 (1983).
59.20 Annotation Courts must apply the open records balancing test to questions involving disclosure of court records. Under the test, the party seeking nondisclosure must show that public interests favoring secrecy outweigh those favoring disclosure. C. L. v. Edson, 140 Wis. 2d 168, 409 N.W.2d 417 (Ct. App. 1987).
59.20 Annotation The appointment of a county surveyor under this section is constitutional. Ripley v. Brown, 143 Wis. 2d 686, 422 N.W.2d 608 (1988).
59.20 Annotation “Books and papers required to be kept" are not all those that the custodian is obliged merely to retain or preserve; rather they are only those that the custodian is obliged to maintain or engender. The requester has the burden of showing the authority requiring that the record be maintained or engendered. State ex rel. Schultz v. Bruendl, 168 Wis. 2d 101, 483 N.W.2d 238 (Ct. App. 1992).
59.20 Annotation To overcome the legislatively mandated policy favoring open records and to persuade the circuit court to exercise its inherent authority, the party seeking to close court records bears the burden of demonstrating, with particularity, that the administration of justice requires that the records be closed. Once documents are filed in the court they become a judicial record subject to the access accorded such records. Even the possibility that the parties may attempt to rescind a settlement agreement if the record is unsealed does not outweigh the public's right to inspect public documents. There are no requirements of a showing of harm to the public or that the inquiry must have indicia of public concern. Krier v. EOG Environmental, Inc. 2005 WI App 256, 288 Wis. 2d 623, 707 N.W.2d 915, 04-2670.
59.20 Annotation After a transcript of a court proceedings is filed with the clerk of court, any person may examine or copy the transcript. 68 Atty. Gen. 313.
59.20 Annotation A sheriff's criminal investigation files are not covered by a blanket exemption from the public records law. Denial of access may be justified on a case-by-case basis. 77 Atty. Gen. 42.
59.21 59.21 Official oaths and bonds.
59.21(1)(a) (a) Clerk, not less than $2,000.
59.21(1)(b) (b) Treasurer, if the bond is furnished by individual sureties, not less than the amount nor exceeding twice the amount of all taxes directed by the board to be levied therein and to be received by the treasurer during the ensuing year, with 3 or more sureties; or, if the bond is furnished by a surety company in an amount not less than 10 percent of all taxes directed by the board to be levied therein, and to be received by the treasurer during the ensuing year, or $500,000, whichever is smaller.
59.21(1)(c) (c) Sheriff, not less than $5,000 nor more than $25,000, with not less than 3 sureties.
59.21(1)(d) (d) Coroner, not less than $500 nor more than $10,000, with not less than 2 sureties.
59.21(1)(e) (e) Clerk of the circuit court, not less than $5,000, with 2 or more sureties.
59.21(1)(g) (g) Register of deeds, in counties containing less than 150,000 population, $3,000, with 2 or more sureties. In counties containing 150,000 or more population, not less than $3,000, with 2 or more sureties, conditioned for the accuracy of the register's work and the faithful, correct and impartial performance of the register's duties, and in addition thereto a bond of not less than $10,000, with 2 or more sureties, conditioned for the faithful accounting for and paying over to the treasurer all moneys which may come into the register's hands as register of deeds, or into the hands of the register's deputy or assistants.
59.21(1)(i) (i) County abstractor, $5,000, with 2 or more sureties.
59.21(1)(j) (j) Comptroller, not less than $5,000 nor more than $20,000 with not less than 3 sureties.
59.21(2) (2) Each official bond described in sub. (1) shall be in a sum fixed by law; or if not fixed by law, in a sum fixed by resolution of the board, within the limitations prescribed by law, if any, at the annual meeting in November prior to the commencement of the term of office of the particular officer. Both the bond and the sufficiency of the sureties thereto shall be approved by a committee consisting of the chairperson and not less than 2 other members of the board who shall report in writing their action on all bonds.
59.21(3) (3) Each bond described in sub. (1) shall be guaranteed by the number of personal sureties prescribed by law, or if not prescribed, by the number fixed by the board within the limitations, if any, prescribed by law, or by a surety company as provided by s. 632.17 (2). In the case of the clerk, treasurer and county abstractor the board may by resolution require them to furnish bonds guaranteed by surety companies and direct that the premiums be paid as provided in s. 19.01 (8).
59.21(4) (4) If it considers the bond of any officer insufficient, the board may by resolution require the officer to furnish additional bond in a sum to be named in the resolution, not exceeding $10,000 for the register of deeds of any county with a population of less than 150,000, and not exceeding the maximum sum, if any, fixed by law for additional bonds for other officers.
59.21 History History: 1975 c. 152, 199; 1975 c. 375 s. 44; 1983 a. 192 s. 303 (1); 1989 a. 31; 1991 a. 316; 1995 a. 201 s. 250; Stats. 1995 s. 59.21; 1995 a. 225 ss. 137 to 144; 1997 a. 35; 2003 a. 204; 2011 a. 62, 96.
59.21 Cross-reference Cross-reference: See s. 59.38 (3) for provision for a bond by the medical examiner.
59.22 59.22 Compensation, fees, salaries and traveling expenses of officials and employees.

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This summary of key lawsuits affecting medical devices is provided by the Health Care Law Group of Crowell & Moring LLP, in collaboration with the firm’s Torts, Antitrust and Intellectual Property Law Groups.
Southeast Missouri Hospital v. C.R. Bard, Inc.
Digene Corp. v. Third WaveTechnologies Inc.
Acumed LLC v. Stryker Corp.
Bard Peripheral Vascular, Inc. v. W.L. Gore & Associates, Inc.
Yanovich v. Zimmer Austin, Inc.
Miller v. DePuy Spine Inc.
Medical Supply Chain, Inc. v. Neoforma, Inc.
Masimo Corp. v. Tyco Health Care Group, L.P.
The United States District Court for the Eastern District of Missouri, interpreting the Supreme Court’s decision in Bell Atlantic Corp. v. Twombly, 127 S.Ct. 1995 (2007) (“Twombly”), has denied C.R. Bard, Inc.’s (“Bard”) motion to dismiss a class action complaint alleging that Bard conspired with Tyco International, Inc. (“Tyco”) to preserve the two companies’ market power in the urological catheter market. Tyco’s motion to dismiss, however, was granted.
Plaintiff’s first cause of action alleged that Bard and Tyco used their market power to enter into exclusive dealing agreements with group purchasing organizations (“GPOs”) and integrated delivery networks (“IDNs”) in violation of §1 of the Sherman Act. In considering Plaintiff’s §1 claim, the district court applied Twombly and analyzed the complaint to determine whether Plaintiff’s factual allegations raised “a suggestion of a preceding agreement, not merely parallel conduct that could just as well be independent action.” The district court first found that Plaintiff incorrectly treated the two companies as one competitor in order to aggregate their combined market share into “a more imposing figure”, but had failed to establish that Bard and Tyco had an agreement to act as one.
The district court next determined whether Plaintiff adequately pled its claims against the companies as separate competitors. Plaintiff alleged Bard, with 75-90% of the urological catheter market, and Tyco, with a maximum market share of 20%, used their market power to enter into exclusive dealing and bundling arrangements in violation of §1 of the Sherman Act. Citing Twombly, The district court held that these allegations against Bard were sufficient to “nudge’ [the] claim across the line from conceivable to plausible.” The district court dismissed the claims against Tyco, however, because Tyco’s alleged market share of 20% was too small to establish market power and Plaintiff could not “bootstrap its claims against Tyco by accumulating its market share” with Bard’s.
Plaintiff’s other claims, alleging violations of §2 of the Sherman Act, §3 of the Clayton Act, Missouri’s antitrust law, and civil conspiracy, were similarly upheld as to Bard and dismissed as to Tyco.
The Western District of Wisconsin recently granted summary judgment for Digene Corp. (“Digene”), rejecting the claims of Third Wave Technologies Inc. (“Third Wave”) that Digene unlawfully used monopoly power to exclude Third Wave from the human papilloma virus (“HPV”) testing market, via exclusive dealing and free equipment arrangements. Digene developed the first, and currently the only, FDA-approved commercial test for detecting certain types of high-risk human papilloma virus (“HPV”) and captures over 95% of the sales in the HPV testing market. Third Wave sells raw materials and testing components that laboratories can use to create their own HPV tests. Third Wave’s products do not require, and do not have, FDA approval.
Digene initially sued Third Wave for patent infringement; Third Wave counterclaimed with allegations that Digene used exclusive dealing contracts with long lock-in periods and cancellation penalties to exclude competitors from the market. On Digene’s motion for summary judgment, the district court found that none of Digene’s contracts prohibited customers from purchasing tests from other manufacturers, and that Third Wave had successfully and steadily increased its market share since coming into the market. In addition to competitive pressures imposed by Third Wave, the court also noted that Digene was further constrained from exercising monopoly power by the market power of its customers, and insurers and government programs who make reimbursements for diagnostic tests.
The court also dismissed Third Wave’s claims that Digene’s practice of providing customers with “free” equipment, which was necessary to perform Digene’s tests, violated the Robinson-Patman Act. The court held that the price of the equipment was built into the unit price of the test kits, and Third Wave had therefore failed to demonstrate that Digene engaged in predatory pricing. Additionally, Third Wave failed to establish that Digene was likely to recoup any losses resulting from the alleged predatory pricing, because it was not likely that Digene could maintain its monopoly long enough to do so.
The U.S. Supreme Court will soon decide whether federal medical device law preempts state tort claims against manufacturers whose products pass the Food Drug and Administration’s (FDA) pre-market approval (PMA) process. Under the Food Drug and Cosmetic Act, federal law bars the imposition of any state “requirements” that are “different from” or “in addition to” requirements established by FDA. The Supreme Court has previously held that this express preemption provision does not bar state law claims against makers of devices that have gone through FDA’s 501(k) process, also known as “pre-market notification”, because that process does not create device-specific federal requirements that trigger preemption. In Medtronic Inc. v. Lohr, 518 U.S. 470 (1996) the Supreme Court left unanswered the question of whether the PMA process—which is more rigorous that 510(k)—creates the kind of device-specific federal requirements that are needed to trigger preemption.
Petitioner Donna Riegel has argued that claims arising out of her husband’s injuries caused by the bursting of a balloon catheter during angioplasty should be allowed to go forward, even though the Evergreen Balloon Catheter used in surgery received PMA approval. Petitioner argues that the express preemption language governing medical devices was intended to preempt state regulatory activity, not litigation. Medtronic has argued that although FDA does not mandate design specifications pursuant to the PMA process, it can direct a manufacturer to make changes or to consider something different. Moreover, Medtronic argues, it is the FDA, not a lay jury, that is the designated agency with expertise to balance reasonable effectiveness and safety with medical device availability.
The case was dismissed on preemption grounds in federal district court, and that decision was affirmed by a divided Court of Appeals for the Second Circuit. The Second Circuit decision aligns with those in the majority. The Supreme Court heard oral arguments in the case on December 4, 2007.
Acumed LLC began this litigation in April 2004 accusing Stryker Corporation, Stryker Sales Corporation, Stryker Orthopaedics, and Howmedica Osteonics Corporation (collectively “Defendants”) of infringing the ‘444 patent with their T2 Proximal Humeral Nail (T2 PHN).
On September 20, 2005 a jury found that Defendants had willfully infringed the ‘444 patent. On February 22, 2006, the Court granted Acumed’s motion for a permanent injunction and denied Defendants’ motion for stay of injunctive relief pending appeal. Defendants’ appealed the District Court’s rulings to the Federal Circuit. On April 12, 2007 the Federal Circuit affirmed the finding of willful infringement but vacated the permanent injunction in light of the Supreme Court’s intervening decision in eBay Inc. v. MercExchange, LLC, 126 S. Ct. 1837 (2006). Defendants’ then appealed to the Supreme Court, which on November 13, 2007 denied Defendants’ Petition for Certiorari.
Acumed’s Motion for Permanent Injunction was granted by the District Court on November 20, 2007 and Defendants promptly filed a motion to stay the injunction pending yet another appeal to the Federal Circuit. Defendants’ argued that they would be irreparably harmed if the permanent injunction was not stayed and that the public interest would best be served by the stay. With respect to the public interest, Defendants argued that their product was superior to Acumed’s because it did not expose patients to the risks associated with screw back out. The motion to stay was denied on November 28.
In denying the motion to stay, the district court concluded that, contrary to Defendants’ assertions, there was not sufficient objective evidence of any public-health issue with respect to Acumed’s product to establish that the public interest would be served by staying the permanent injunction. In addition, the Court noted that Acumed established that it continues to lose sales and market share as a result of Defendants’ sales and would be substantially harmed by a stay of the permanent injunction.
On December 11, 2007 a jury awarded Bard Peripheral Vascular, Inc. and Dr. David Goldfarb $185 million in damages. The jury found that W.L. Gore & Associates, Inc. willfully infringed U.S. Patent No. 6,436,135. The products found to infringe included W.L. Gore’s standard grafts and stretch grafts, including grafts sold under the trade names Propaten, Intering, Acuseal, Viabahn, Excluder, Tag, and Viatorr. The jury also rejected Gore’s allegations that the patent was invalid.
On December 11, 2007, a Federal District Judge in Massachusetts entered a final order against Medtronic in the amount of $226.3 million for infringement of U.S. Patent No. 5,207,678 (the “‘678 patent”), relating to a pedicle screw for stabilization of spinal column segments. In doing so, the Court rejected Medtronic’s ensnarement defense.
Based on the doctrine of ensnarement, Medtronic unsuccessfully argued that DePuy could not have patented a hypothetical claim covering the accused products because such a claim would have been anticipated or rendered obvious by the prior art. The Court rejected this argument.
The Court of Appeals for the Sixth Circuit upheld the district court’s grant of summary judgment in favor of Zimmer Austin for a products liability manufacturing and defect claim concerning an artificial knee. Yanovich’s lawsuit alleged that Zimmer Austin defectively designed and manufactured the Intermedics Natural Knee II (“NK II”) System with defective patella button pegs, in violation of the Ohio Products Liability Act (“OPLA”).
Yanovich sued Zimmer Austin, Inc (“Zimmer”) after discovering that the pegs of her implanted patella button had fractured. In support of her products liability claim, Yanovich relied on one expert witness – a professor specialized in polymer engineering – who argued that Zimmer’s choice of plastic and hardening occasionally resulted in insufficiently strong products and defective patellas. The Northern District of Ohio District Court granted Zimmer’s motion for summary judgment, finding that Yanovich failed to introduce evidence to support a jury verdict in her favor.
On appeal, the Sixth Circuit affirmed the district court holding of summary judgment, reasoning that Yanovich introduced insufficient evidence that Zimmer’s NKII system was defective and caused a tortious injury under OPLA. The Sixth Circuit determined that Yanovich’s manufacturing defect claim failed because the expert witness failed to raise a genuine issue of material fact that the extracted patellas materially deviated from the sample patellas as required under OPLA. The Sixth Circuit also found that Yanovich’s design defect claim failed because the expert witness failed to inquire about the foreseeable risks associated with the design or formulation of the patellas, and failed to examine the benefits associated with the design or formulation of the patellas under Ohio law.
Plaintiff filed suit in Nevada state court against defendants DePuy Spine, Inc. and Johnson & Johnson, Inc., alleging various tort theories related to alleged defects of an artificial intervertebral disc implant Plaintiff received. Plaintiff alleged defendants breached FDA requirements through the defective design and manufacture of the implant, which constituted negligence per se. Defendants contend that the FDA has exclusive or primary jurisdiction over the matters asserted in the complaint. Plaintiff sought general damages, special damages, and exemplary damages each in excess of $10,000, as well as reasonable attorney’s fees.
Defendants removed the case to the U.S. District Court for the District of Nevada, asserting complete diversity among the parties and that the amount in controversy exceeds $75,000. Although Plaintiff did not specifically request damages in excess of $75,000, Defendants posited that because Plaintiff alleged a “progressively worsening” condition and “substantial pain, disability, and medical expense” that will require “more [i]nvasive medical treatment,” the compensatory and special damages alone would more likely than not exceed $75,000.
Defendants further asserted that Plaintiff’s claim for past and future loss of earnings should be sufficient to meet the jurisdictional amount in controversy, despite the fact that Plaintiff had not submitted any regarding his salary while he was employed, on the assumption that Plaintiff earned at least the median income in Clark County, Nevada.
Medical Supply Chain, Inc. filed a 115-page complaint in federal district court against a number of companies for an alleged conspiracy to shut out competition in the hospital supply market. The complaint alleged 16 causes of action, ranging from violations of the Sherman Act to prima facie tort.
Sifting through the claims, the district court issued an order on March 7, 2006 dismissing the case and explaining that “although plaintiff asserts many conspiracy theories, it does not allege any facts that support its allegations.” Further, the court warned the plaintiff and the attorneys that neither the district court nor the Tenth Circuit would tolerate frivolous claims. On March 16, 2006, Medical Supply filed several motions, including a motion for reconsideration. Later in March, it filed several other unrelated motions. The district court entered a final judgment as to the March 7, 2006 order on August 4, 2006. On August 7, 2006, the district court denied Medical Supply’s other motions and struck its motion for reconsideration.
On September 8, 2006, Medical Supply filed its notice of appeal to the Tenth Circuit, appealing the district court’s denial of its motion for reconsideration. The Tenth Circuit held that the August 7, 2006 order striking Medical Supply’s motion for reconsideration disposed of that motion. Under Federal Rule of Appellate Procedure 4(a)(1)(A) a party must file a notice of appeal “within 30 days after the judgment or order appealed from is entered.” Thus, Medical Supply filed its notice of appeal two days late, and the Tenth Circuit lacked jurisdiction to hear the case.
The United States District Court for the Middle District of Tennessee granted relator Fry’s motion to compel medical device manufacturer Guidant to produce documents sought by Fry in discovery requests that expanded the scope of the discovery in a False Claims Act qui tam action. The complaint alleged that Guidant engaged in a fraudulent scheme to conceal available refund credits from hospitals.
Fry’s motion sought to expand the scope of discovery to ten years prior to the date the complaint was filed, to include discovery regarding replacement of recalled devices, to expand discovery nationwide, and to include the production of business and training documents relating to product recalls. Fry also sought discovery sanctions against Guidant.
The district court granted Fry’s motion to compel Guidant to produce responsive documents, and denied Fry’s request for sanctions. The court first ordered production of documents ten years prior to the filing of the complaint, disagreeing with Guidant that the ten-year statute of limitations only applied to cases in which the government intervened. Second, the court ordered discovery relating to devices replaced as a result of recalls, because the complaint made numerous references to such devices. Third, the court granted nationwide discovery on the grounds that the complaint asserted nationwide claims. Finally, the court ordered that Guidant produce general and training documents relating to product recalls. Fry’s request for discovery sanctions was denied.
On October 25, 2007, the Seventh Circuit affirmed dismissal of a lawsuit filed by a patient with a hip implant, holding that his claims were barred by North Carolina’s six-year statute of repose. Plaintiff, who underwent surgery in September 1998, filed suit in federal district court in Indiana against DePuy and Johnson & Johnson, alleging that a defective prosthesis caused him to develop osteolysis. Plaintiff’s surgeon believed that the hylamer cup liner used in the hip replacement wore at a faster rate than predicted, causing debris to spread into the nearby femur area.
The district court dismissed the lawsuit, applying North Carolina’s statute of repose rather than Indiana’s 10-year statute of repose, over plaintiffs’ objection. The North Carolina statute prohibits the commencement of an “action for the recovery of damages for personal injury . . . based upon or arising out of any alleged defect or any failure in relation to a product . . .more than six years after the date of initial purchase for use or consumption.” On appeal, the Seventh Circuit affirmed, finding that the injury and physical harm occurred in North Carolina and that Indiana had few contacts in the case, although DePuy is headquartered there. Moreover, because Indiana did not have a general interest in the case, application of North Carolina’s law would not offend the public policy of Indiana. The Seventh Circuit also rejected plaintiff’s argument that the North Carolina Supreme Court would find an exception to the state’s statute of repose in this case, concluding that the plain language and history of the statute indicates that the statute does not allow for exceptions.
In 2002, Masimo Corporation filed suit against Tyco Health Care Group, L.P. and Mallinckrodt, Inc. (collectively, Tyco), for alleged anti-competitive business practices by Tyco in connection with its Nellcor pulse oximetry brand. Pulse oximetry products, the sales of which exceed $500 million in the United States, are used by hospitals to monitor blood oxygen levels of critically ill patients.
Masimo contended the Tyco shut it out of over 90% of the market for pulse oximetry sensors and patient cables in the United States. It argued that Tyco did so by engaging in a series of illegal exclusionary and anti-competitive acts designed to maintain its monopoly power, including entering into exclusive dealing contracts with purchasers, and in particular, Group Purchasing Organizations (GPOs), which negotiate contracts on behalf of their member hospitals.
After a four-week trial in 2005, the jury found that Tyco violated the antitrust laws by (1) providing market share discounts to hospitals, (2) entering into sole source contracts, (3) offering bundled rebates for its oximetry and other unrelated products, and (4) entering into co-marketing agreements with manufacturers. The jury found that Masimo was due $140 million in damages.
Tyco filed a motion for judgment as a matter or law and, in the alternative, a motion for a new trial. Considering that motion in March of 2006, the district court sustained the jury’s liability verdict based on the market share discounts and sole source contracts, but vacated the jury’s finding based on the other alleged anticompetitive practices. The district court also vacated the damages award as not “ly[ing] within the range sustainable by the proof.” In June, 2007, the district court separately considered the issue of damages and reduced Masimo’s total damages award to $14.5 million.
Tyco filed its notice of appeal to the Ninth Circuit shortly thereafter. The parties are currently briefing the issues on appeal.
This material was prepared by Crowell & Moring LLP attorneys Chandra Westergaard Snyder, Jennifer Burdman, Jessica Hall, Lauren Kim and Heather Good. It is made available on the Crowell & Moring website for information purposes only, and should not be relied upon to resolve specific legal questions. If you have questions or want additional information, please call your regular Crowell & Moring contact or you may contact the editor of Medical Device Lawsuit Watch.

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Justia › US Law › US Case Law › US Supreme Court › Volume 264 › Webster Elec. Co. v. Splitdorf Elec. Co.
1. Upon a review by certiorari, the Court is not called upon to consider questions not raised by the petition for the writ. P. 264 U. S. 464.
2. Clams 7 and 8 of Patent No. 1,280, 105, issued to Kane, September 24, 1918, for a rigid unitary and integral support for mounting parts of an electrical ignition device, held void because of laches in presenting them to the Patent Office. P. 465.
3. The rule that a reissue patent expanding the patentee's original claims will be invalidated by a delay of two years in applying for it unless special circumstance be proven justifying a longer delay is applicable also to patents issued on divisional applications. Chapman v. Wintroath, 252 U. S. 126, explained. P. 264 U. S. 469.
Certiorari to a decree of the circuit court of appeals, in a patent infringement suit, reversing the district court and directing dismissal of the bill.
of Illinois, 255 F. 907, and directing a dismissal of the bill. Three patents were involved. The decision in respect of two of them turned upon the question whether a license contract between the patentees, Henry and Emil Podlesak, and petitioner, had the effect of precluding an assignment of patent rights made by the Podlesaks to respondent. But the petition upon which the writ was granted challenged the decision below only in respect of the third patent, and we are not called upon to consider the contentions now advanced as to the others. Alice State Bank v. Houston Pasture Co., 247 U. S. 240, 247 U. S. 242.
The bill alleges that the Splitdorf Electrical Company had infringed Claims 7 and 8 of Kane patent, 1,280,105, issued September 24, 1918, for a rigid unitary and integral support for mounting the various parts of an electrical ignition device. The original application was filed by Kane February 2, 1910, on which patent No. 1,204,573 was granted November 14, 1916. On October 24, 1914, Kane endeavored to amend his application by introducing six claims copied from Milton's patent, issued May 12, 1914, for the purpose of securing an interference. The amendment was refused, and Kane was directed by the Examiner to file a divisional application if he desired to contest an interference with Milton. This was done. The Webster Company, however, acquired the rights of both Milton and Kane, and through their attorneys conducted the proceedings for both sides in the Patent Office, resulting in an award of priority in favor of Kane.
as already stated, patent issued September 24, 1918, to the petitioner, to whom all rights had been assigned. The original bill was filed in 1915, and Claims 7 and 8 were brought into the suit by a supplemental bill filed October 25, 1918.
originally sought. The repeated assertion of interferences in narrower terms, resulting in delays incident to their determination, affords no just excuse for the failure to assert the broader Claims 7 and 8 at an earlier date. The subject matter of these claims is not of such complicated character that it might not have been readily described in the original application or in one of the subsequent applications -- in 1915, for example -- as it was described in 1918, and the long delay of Kane and his assignee in coming to the point tends strongly to confirm the view that the final determination to do so was an exigent afterthought, rather than a logical development of the original application. We have no hesitation in saying that the delay was unreasonable, and, under the circumstances shown by the record, constitutes laches, by which the petitioner lost whatever rights it might otherwise have been entitled to.
"It follows from this that if, at the date of the issue of the original patent, the patentee had been conscious of the nature and extent of his invention, an inspection of the patent, when issued, and an examination of its terms, made with that reasonable degree of care which is habitual to and expected of men in the management of their own interests in the ordinary affairs of life, would have immediately informed him that the patent had failed fully to cover the area of his invention. And this must be deemed to be notice to him of the fact, for the law imputes knowledge when opportunity and interest, combined with reasonable care, would necessarily impart it."
"Not to improve such opportunity, under the stimulus of self-interest, with reasonable diligence constitutes laches which in equity disables the party who seeks to revive a right which he has allowed to lie unclaimed from enforcing it to the detriment of those who have, in consequence, been led to act as though it were abandoned."
slept upon his rights, and has thus led the public to rely on the implied disclaimer involved in the terms of the original patent, and that, when this is a matter apparent on the face of the instrument, upon a mere comparison of the original patent with the reissue, it is competent for the courts to decide whether the delay was unreasonable and whether the reissue was therefore contrary to law and void."
"This doctrine has been reiterated in many cases since, and at the present term has been reconsidered and emphatically repeated as the settled law in the case of Mahn v. Harwood, 112 U. S. 354, where it is said, by Mr. Justice Bradley, delivering the opinion of the Court:"
"We repeat, then, if a patentee has not claimed as much as he is entitled to claim, he is bound to discover the defect in a reasonable time, or he loses all right to a reissue, and if the Commissioner of Patents, after the lapse of such reasonable time, undertakes to grant a reissue for the purpose of correcting the supposed mistake, he exceeds his power, and acts under a mistaken view of the law, and the court, seeing this, has a right, and it is its duty, to declare the reissue pro tanto void, in any suit founded upon it."
"It was also there said that, while no invariable rule can be laid down as to what it reasonable time within which the patentee should seek for the correction of a claim which he considers too narrow, a delay of two years, by analogy to the law of public use before an application for a patent, should be construed equally favorable to the public, and that excuse for any longer delay than that should be made manifest by the special circumstances of the case."
had been infringed, but without infringing the patent as originally granted, an application for a reissue was made and allowed, it was held that the patentee was guilty of laches and the reissue came too late. The doctrine of Wollensak v. Reiher was restated (p. 119 U. S. 662) to the effect that, while no invariable rule can be laid down, a delay of two years, by analogy to the law of public use before an application for a patent, will be fatal unless excuse for a longer delay shall be made manifest by the special circumstances of the case. See also Topliff v. Topliff, 145 U. S. 156; Wollensak v. Sargent, 151 U. S. 221.
"Appellants contend, however, and we agree with the courts that have passed upon the question, that the effect of the holding [in the Wintroath case] is to fix the period during which such application must be filed at two years from the date of the issuance of the other patent. No other deduction can fairly or logically be drawn from the discussion of the question in that opinion."
But Chapman v. Wintroath is not to be so narrowly construed.
"Thus, through all of these statutes runs the time limit of two years for the filing of an application, there is no modification in any of them of the like provision in Rev.Stats. § 4886, as amended, and no distinction is made between an original and a later or a divisional application, with respect to this filing right."
"favored to the extent that, where an invention clearly disclosed in an application . . . is not claimed therein, but is subsequently claimed in another application, the original will be deemed a constructive reduction of the invention to practice and the later one will be given the filing date of the earlier, with all of its priority of right."
Reference is made to Wollensak v. Reiher, supra, and other reissue cases, which, as we have seen, adopt the two-year time limit by analogy to the law of public use before application for patent, and, while it is not said in terms, the plain import of the citation of and reliance upon these cases is that the effect of the two years' delay, as recognized in those cases, may be overcome where it "is accounted for and excused by special circumstances which show it to have been not unreasonable," and, properly understood, there is nothing in the opinion to the contrary.
Our conclusion, therefore, is that, in cases involving laches, equitable estoppel, or intervening private or public rights, the two-year time limit prima facie applies to divisional applications, and can only be avoided by proof of special circumstances justifying a longer delay. In other words, we follow in that respect the analogy furnished by the patent reissue cases.
* See also American Laundry Machinery Co. v. Prosperity Co., Inc., 294 F. 144, reversed by a decision of the Circuit Court of Appeals for the Second Circuit, cited supra.


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D Young & Co | SPCs for NPEs? UK thinks yes but does the CJEU agree?
SPCs for NPEs? UK thinks yes but does the CJEU agree?
Non-practising entities (NPEs), patent assertion entities, patent trolls – whatever you choose to call them, their activities are hotly debated in the IP world. Although they first came to attention in the US, some have recently made the move into supplementary protection certificates (SPCs) in Europe.
In the European Union (EU), SPCs are granted to patented medicinal and plant protection products which have required marketing authorisation (regulatory approval) prior to being placed on the market.
SPCs extend the lifetime of the patent (for the approved product) for up to five years (plus another six months if paediatric studies are carried out) – their value to industry is significant, as the term of the SPC is typically when the product achieves its peak sales.
An SPC can only be granted to the holder of the basic patent. However, there is nothing in the wording of the SPC Regulation which requires the SPC applicant to be the same as, or even have any connection with, the marketing authorisation holder. Companies regularly collaborate on the development of pharmaceutical products – in this situation it is common for the basic patent and SPC holder to be the licensor and the marketing authorisation holder its licensee. However, it has long been uncertain whether the SPC Regulation permits a party completely unconnected with the development of the product, but who simply owns a basic patent covering some aspect of the product, to obtain an SPC based on another party's marketing authorisation.
The majority of patent offices in European countries generally check only that both the SPC applicant and patent holder are the same: in most cases, they do not take into consideration who is the marketing authorisation holder.
A number of pharmaceutical companies have relied on this uncertainty to obtain SPCs based on a basic patent they own which covers a competitor's product, relying on the competitor's marketing authorisation. We have recently become aware that some NPEs have done the same, and a number of such SPCs have been granted by the UKIPO.
This practice may cause some concern to the research-based pharmaceutical industry: faced with a third party SPC on their own marketed product, they must decide whether to take a licence from the third party or challenge the grant of the SPC.
However, even if the wording of the SPC regulation is silent, there may be grounds for challenging such an SPC, on the basis its grant is contrary to the purpose of the SPC regulation, which is to encourage pharmaceutical research.
Some preliminary guidance on this issue may be found in the decisions of the UK High Court and the CJEU in the litigation between Eli Lilly and Human Genome Sciences. In its decision (C-493/12) the CJEU opined that, if a patent holder was not the holder of the medicinal product marketing authorisation, the grant of an SPC to such a patent holder may not be allowed. This is because, in their view, if a party had not made any investment in research, the grant of such an SPC to such a party could undermine the objective of the SPC regulation.
The UK High Court took a different view from the CJEU on this point, considering this issue not relevant to the question of whether or not an SPC should be granted. However, both the UK High Court's comments on the "third party issue" and those of the CJEU are asides – no decision was reached on this issue as it was not ultimately pursued before the courts.
We will continue to monitor developments in this area and report further in future editions of our patent newsletter. For further advice please contact your usual D Young & Co patent advisor.

matches: CJEU CJEU CJEU CJEU CJEU CJEU


Justia › US Law › US Case Law › US Supreme Court › Volume 288 › Heiner v. Diamond Alkali Co.
Heiner v. Diamond Alkali Co.
1. Allowance by the Commissioner of Internal Revenue of special assessment of profits taxes under § 328 of the Revenue Act of 1918, and his selection, for comparison, of representative corporations engaged in a like or similar trade or business to that of the taxpayer, are matters of administrative discretion which are not reviewable by the courts. Williamsport Wire Rope Co. v. United States, 277 U. S. 551. P. 288 U. S. 507.
taxpayer's net income and recompute the tax by applying to the new figure found as the net income the ratios of tax used by the Commissioner. P. 288 U. S. 507.
Certiorari, 287 U.S. 593, to review judgments of the Circuit Court of Appeals in three cases involving alleged overpayment of profits taxes. For findings of fact and conclusions of law of the District Court in Nos. 476 and 477, see 39 F.2d 645.
These cases present the question whether, where the Commissioner of Internal Revenue has granted special assessments of profits taxes pursuant to § 328 of the Revenue Act of 1918 (40 Stat. 1093), a court, in an action for a refund, may recalculate the taxpayer's net income and recompute the tax by applying to the corrected net income the rate percent used by the Commissioner in his computation of the tax.
328 of the act. The request was denied, and correspondence and conferences ensued between the Commissioner and the taxpayer in an effort to settle the disputed items. The demand for computation of the taxes pursuant to the special assessment sections was pressed by the company. Twice during the period of negotiation the Commissioner advised that, until the true net income was ascertained, the propriety of special assessment could not be determined. Finally, in July, 1927, as a result of audits and investigations, he found the company's net income, and decided that, owing to abnormal conditions affecting its capital or income, assessment according to the usual method under § 301 would work an exceptional hardship, and relief should be granted pursuant to §§ 327 and 328. He so notified the respondent, enclosing a calculation of the taxes made by him pursuant to § 328. The taxpayer protested on several grounds, amongst others, that the net income as determined under § 301 was excessive, and that the ratio of tax to net income obtained by the Commissioner by comparison with the taxes of other representative corporations, as provided in § 328, was too high. It did not, however, as was its right, appeal to the Board of Tax Appeals from the determination of new income.
and rendered judgment in favor of the respondent. Both parties appealed. The Circuit Court of Appeals increased the amortization allowance, made additional deductions from gross income for depreciation, found a net income much less than that fixed by the District Court, and held that the tax should be recomputed by applying the rate used by the Commissioner to the new figure found as the net income.
"Where, upon application by the corporation, the Commissioner finds and so declares of record that the tax if determined without benefit of this section would, owing to abnormal conditions affecting the capital or income of the corporation, work upon the corporation an exceptional hardship evidenced by gross disproportion between the tax computed without benefit of this section and the tax computed by reference to the representative corporations specified in section 328,"
"similarly circumstanced with respect to gross income, net income, profits per unit of business transacted and capital employed, the amount and rate of war profits or excess profits, and all other relevant facts and circumstances."
was further said that the selection for comparison of representative corporations engaged in a like or similar trade or business is also a question of discretion. The Commissioner cannot make an administrative finding upon the question for decision under § 327(d) or that under 328 until he has determined the net income of the taxpayer. See United States v. Henry Prentiss & Co., Inc., ante, p. 288 U. S. 73. He must compare the income of the taxpayer with that of corporations he deems representative in order to determine abnormality or gross disproportion between capital and income. When he comes to compute the ratio or rate of tax to be applied to the taxpayer's net income, as prescribed in § 328, he obviously will consider as a factor the ratio of tax to net income of the same representative corporations he examined for the purpose of deciding whether he should grant special assessment under § 327(d).
The parties are in agreement that the Williamsport Wire Rope Co. case, supra, precludes revision, correction, or abrogation of the Commissioner's administrative discretionary findings where, as here, there is no allegation of fraud. On the one hand, the petitioners claim that the decisions below amount to such abrogation and the making of a new finding as to the right of special assessment and a fresh computation of the tax upon revised net income; on the other, the respondent says that the courts recognized the binding character of the Commissioner's findings, enforced, rather than set aside his allowance of relief, and, adopting the rate found by him, applied it to the true statutory net income as judicially determined in accordance with law.
We think the petitioners' position is correct. The taxpayer's true net income was an essential factor in the problem. Until that was known, the Commissioner could make no proper or satisfactory comparison with conditions prevailing in other corporations similarly circumstanced.
We cannot say that, if the income had been substantially less than the figure he used, he would have granted special assessment under § 327(d). Moreover, with a different net income, he might well have had to compare the relevant conditions in respondent's business with the operating results of corporations other than those he selected on the basis of respondent's net income as found, and might have concluded that a different ratio of tax to net income was applicable in respondent's case.
The grant of special assessment and the ascertainment of the rate or ratio of tax to be applied to the net income of the taxpayer are indissolubly connected by the terms of the statute. The exercise of the discretion in both aspects is committed to the Commissioner, and to the Board of Tax Appeals upon review of his action. That discretion cannot be reviewed by the courts, nor exercised by them in place of the administrative officer designated by law. It is beyond the power of a court to usurp the Commissioner's function of finding that special assessment should be accorded, and equally so to substitute its discretion for his as to the factors to be used in computing the tax. The courts below were in error in adopting the rate chosen by the Commissioner and applying it to a net income other than that which he used in making his comparisons and arriving at the rate. The respondent's tax could only be computed in accordance with § 301 or under § 328. The former prescribes the elements to be considered, and error in the computation remains subject to judicial correction; the latter grants the taxpayer the benefit of discretionary action by the Commissioner, and precludes judicial revision or alteration of the computation of the tax.
The judgments must be reversed, and the cases remanded for further proceedings in conformity with this opinion.
* Together with No. 478, Lewellyn, Formerly Collector of Internal Revenue v. Diamond Alkali Co.