prac member news · tozzinifreire assists viracon in glassec vidros stock acquisition ... drafting...

► CLAYTON UTZ Advises on Sandfire Equity Raising ►FMC Acts in Equity Funding Transaction for Existing Investors Celtic House Venture Partners ► GIDE LOYRETTE NOUEL Advises Areva on Innovative Manufacturing Joint Venture in China ► HOGAN LOVELLS Litigation Team Secures TRO for Harper Collins in Copyright Infringement Case ► KING & WOOD Bitauto lists on NYSE ► NAUTADUTILH Advises Eurand on Sale ► RODYK Advises in Issue S$300m Secured Fixed Rate Bonds ►TOZZINIFREIRE Assists Viracon in Glassec Vidros Stock Acquisition ►WILSON SONSINI Advises Ardian in Acquisition by Medtronic

P

AC

IFIC

RIM

AD

VIS

OR

Y C

OU

NC

IL

P R A C M E M B E R N E W S

►ABNR Partner Presents to UN General Assembly ►Allende & Brea Partner Promotion ►Carey Elect Three New Partners ►Clayton Adds to Partnership Talent ►Gide Launches New Finance Practice in London ►Hogan Lovells Launches Corporate Whistleblower Response Task Force ►King & Wood Opens New Beijing Office ►Luce Forward Announces New Partner Class of 2011 ►Mulla Opens Office in Ahmedabad ►NautaDutilh Choose FIRST Rotterdam Move ►Rodyk Appoints Four New Partners ►Simpson Grierson Expands Commercial Property Practice

►AUSTRALIA New South Wales Introduces Pre-Litigation Procedures - but what will they change? CLAYTON UTZ ►BRAZIL Mobile Virtual Network Operator Regulations Announced TOZZINI FREIRE ►CANADA Court Clarifies Voting Rights in Proxy Contests FMC ►CHINA New Provision Could Change Contract Law in China But Judges Remain Conservative KING & WOOD ►COLOMBIA Government Eliminates Tax Benefits Related to Foreign Loans BRIGARD URRUTIA ►NETHERLANDS European Pharmacovigilance Legislation Adopted by EU Council NAUTADUTILH ►NEW ZEALAND Search and Enforcement Under Financial Markets Authority SIMPSON GRIERSON ►TAIWAN Restrictions on Distributors Violate Fair Trade Act LEE and LI ►UNITED STATES ►Willfulness Allegations Post Seagate The Role of Actual Notice BAKER BOTTS ►New Disclosure Requirements for MRI, CT and PET Scans Begin Jan 1 DAVIS WRIGHT TREMAINE ►Federal Reserve Issues Proposed Rule on Volker Rule Transition Period HOGAN LOVELLS ►What Happened To Our Antiquated Mechanics Lien Law? LUCE FORWARD ►Delaware Supreme Court Invalidates Bylaw Amendment Shortens Directors on a Staggered Board By Amending Annual Meeting Date WILSON SONSINI GOODRICH & ROSATI

P R A C T O O L S T O U S E

• PRAC Contact Matrix PRAC Member Directory Conferences & Events

Visit us online at www.prac.org

C O N F E R E N C E S & E V E N T S

December 2010 e-Bulletin

MEMBER NEWS

● PRAC Members Gathering @ INTA San Francisco - April 15, 2011

● 49th International PRAC Conference - Amsterdam - May 21-24, 2011 Early Registration Open www.prac.org/events.php

● 50th International PRAC Conference - Singapore October 15-18, 2011 Details at www.prac.org/events.php

● PRAC Members Gathering @ IBA Dubai—October, 2011 details tba

PRAC Conferences and Events are open to PRAC Member Firms only

M E M B E R D E A L S M A K I N G N E W S COUNTRY ALERTS


Santiago, December 6, 2010

Carey y Cía., Chile’s largest law firm, announced that it has

elected three new partners: Alberto Cardemil, Cristián

Eyzaguirre and Felipe Moro.

Alberto Cardemil is a member of Carey y Cía.’s Natural

Resources and Environment Group. His professional practice

is focused on water law, natural resources transactions,

projects and litigation, corporate law and commercial law.

Cristián Eyzaguirre is a member of Carey y Cía.´s

Corporate Group. His practice consists chiefly of representing

local and foreign clients in various kinds of mergers and

acquisitions transactions (including tender offers, private

equity and asset acquisitions) and joint ventures. He also

advises clients on corporate governance issues and securities

regulation, assisting securities issuers, underwriters, brokers

and investors.

Felipe Moro is a member of Carey y Cía.´s Finance Group.

His practice focuses primarily in representing lenders,

investors and borrowers in transactions of every kind,

including secured and unsecured syndicated loan facilities;

equity and debt securities; public and private offerings and

placements; securitizations; project financings; structured

products; debt restructurings and derivative transactions. He

also has an extensive work representing clients in

acquisitions and sales of public and close corporations, asset

acquisition and disposition transactions, investments and

strategic alliances, and joint ventures.

Carey y Cía has currently 24 partners and three directors.

For additional information visit www.carey.cl

A B N R P A R T N E R P R E S E N T S T O U N G E N E R A L A S S E M B L Y

C A R E Y E L E C T S T H R E E N E W P A R T N E R S

ABNR's Partner and current Chairman of the International

Law Commission Successfully Presented the Report of the

Commission to the UN General Assembly

We are pleased to announce that our Partner and the

current Chairman of the International Law Commission

('ILC') Mr. Nugroho Wisnumurti recently returned from

New York after successfully presenting the report of the

Commission on the ILS's 2010 session to the Legal

Committee of the United Nations General Assembly.

Mr. Wisnumurti is a member of ILC for the period of 2007

– 2011. Mr. Wisnumurti is also a member of World Trade

Organization ('WTO') Dispute Settlement Panel on China –

Measures Related to the Exportation of Various Raw

Materials. He had served as the Indonesian Ambassador /

Permanent Representative to the United Nations in New

York and in Geneva, and to the WTO in Geneva.

Mr. Wisnumurti has extensive experience in negotiating

and concluding international agreements. His work in

ABNR involves international trade law, including WTO

related matters.

For additional information visit www.abnrlaw.com

Allende & Brea is pleased to announce the promotion of

JORGE I. MAYORA as partner of the firm as of January 1st,

2011

For additional information visit www.allendebrea.com.ar

A L L E N D E & B R E A P A R T N E R P R O M O T I O N

Sydney, 2 December 2010: Clayton Utz is pleased to announce the following new partnership appointments effective

1 January 2011.

They are:

Brad Allen (Banking, Sydney)

Rebecca Carroll (Energy & Resources, Brisbane)

Karen Ingram (Litigation & Dispute Resolution, Sydney)

Tony Lalor (Corporate / M&A, Brisbane)

Kathryn Pacey (Environment & Planning, Brisbane)

Claire Smith (Environment & Planning, Sydney)

Nick Tsirogiannis (Construction & Major Projects, Melbourne).

Congratulating the new partners, Clayton Utz Chief Executive Partner Darryl McDonough said their appointment reflected

the depth and excellence of the legal talent at the firm.

"We have outstanding people across a wide range of disciplines and offices within our firm. In particular, our talented law-yers are the reason we attain excellence in the legal services we provide to our clients." For additional information visit www.claytonutz.com

8 November 2010 Gide Loyrette Nouel is delighted to announce that Lucy Frew has joined the London Office to strengthen the Firm’s financial services regulatory capability and to launch an investment funds practice. Lucy is a senior financial services lawyer who has worked exclusively with financial sector clients since 2001, both in private practice and as in-house legal counsel at a leading global financial services provider. Prior to that, Lucy was called to the Bar in 1998 and practised there until entering private practice in 2001. She has also spent eight months seconded to the UK Financial Services Authority. Lucy has gained significant expertise advising financial institutions on UK and European financial services regulation. She has frequently been involved in advising investment fund managers and advisers on establishing and obtaining regulatory authorisation for their businesses and on the regulatory frameworks relevant to their ongoing management, including drafting and negotiating a variety of agreements and other documents for regulated and unregulated investment funds. Lucy has extensive experience of advising retail investment managers and advisers on UK and EU regulatory matters. She has acted in a number of high profile contentious regulatory investigations and has a well-established track record in complex international litigation and alternative dispute resolution experience for financial institutions clients and their insurers. Colin Mercer, Head of the London Office commented: “We are delighted that Lucy has joined the team in London. This hire is part of our strategy to strengthen and broaden our regulatory and funds capabilities, areas where we are seeing in-creased activity and which are key to the continued growth of the London office. We believe Lucy’s significant experience in these areas will only benefit Gide as we look to grow this international practice group. For additional information visit www.gide.com

C L A Y T O N U T Z A D D S T O P A R T N E R S H I P T A L E N T


G I D E L O Y R E T T E N O U E L L A U N C H E S N E W F U N D S P R A C T I C E I N L O N D O N

WASHINGTON, D.C., 1 December 2010 - Hogan Lovells US LLP has announced the formation of a Corporate Whistleblower

Response Task Force, which will assist corporations in complying with the whistleblower provisions of the Dodd-Frank Wall

Street Reform and Consumer Protection Act and the implementing rule that the Securities Exchange Commission (SEC) has

proposed.

The partners who are members of the task force have vast experience with corporate whistleblower programs and codes of

conduct and their interplay with federal and state employment laws. Several members of the task force, which includes

partners in the securities litigation and enforcement, corporate, and employment litigation practice groups, previously

served with the SEC or the United States Department of Justice (DOJ). The task force is designed to provide insights

regarding the likely perspectives of the SEC's Division of Enforcement and the DOJ regarding the effectiveness of a

corporation's internal programs and its response to individual whistleblower complaints.

"We are pleased to formally announce the formation of the Corporate Whistleblower Response Task Force," said Washing-

ton, D.C. partner Joseph Connolly, who prior to joining Hogan Lovells held various legal positions of increasing responsibility

at the SEC. "We believe this is a necessary entity to assist corporations with their compliance with the Dodd-Frank Act."

The Corporate Whistleblower Response Task Force includes partners Joseph Connolly, Alan Dye, Doug Fellman, and Doug

Paul in the Washington, D.C. office, Stanley Brown, Robert Buehler, Amy Freed, and George Salter in the New York office,

Paul Hilton and Daniel Shea in the Denver office, and Norman Blears, Howard Caro, and Michael Shepard in the Silicon

Valley office.

For more about Hogan Lovells visit www.hoganlovells.com

H O G A N L O V E L L S F O R M S C O R P O R A T E W H I S T L E B L O W E R R E S P O N S E T A S K F O R C E


PRAC 49th International Conference

May 21—24, 2011

Hosted by

NautaDutilh Register online at www.prac.org

I N


December 01, 2010

Luce Forward today announced it has elected four of the

firm’s attorneys, Amy Giannamore, Jennifer Renk,

Ryan Stottlemyer and Aaron Winn as partners, effective

January 1, 2011.

“Luce Forward’s newest partner class is particularly strong,

and each of the attorneys selected have been remarkably

successful in building their individual practices while also

contributing to the firm as a whole,” said Kurt L. Kicklighter,

the firm’s managing partner. “We value their dedication,

talents, and the services they provide to clients. They

embody the type of attorneys we hope to attract as we

continue to expand our presence.”

For more information visit us at www.luce.com

Mulla & Mulla & Craigie Blunt & Caroe is pleased to announce

that we now also have a presence in the city of Ahmedabad

in the State of Gujarat.

The address of Mulla & Mulla Ahmedabad is:

C-102, Shivalik Center,

Opp. Kensville Golf Academy,

behind Rajpath Club,

Off S.G. Highway,

Ahmedabad - 380 054

Tel: (+91 79) 40086194

Fax: (+91 79) 40086195

K I N G & W O O D O P E N S N E W B E I J I N G O F F I C E I N W O R L D F I N A N C I A L C E N T R E

L U C E F O R W A R D A N N O U N C E S N E W P A R T N E R C L A S S O F 2 0 1 1

BEIJING, December 3, 2010 -

King & Wood's Bankruptcy & Restructuring, Corporate,

Dispute Resolution, Intellectual Property and Japan Desk

practice groups have moved to the World Financial Center

in Beijing's Central Business District. All other practice

groups including Antitrust & Competition, Finance,

International Trade, and Securities & Capital Markets will

remain in Beijing Fortune Plaza.

Contact details:

For additional information visit www.kingandwood.com

Beijing Fortune Plaza (Antitrust &

Competition, Finance, International Trade,

40th Floor, Tower A, Beijing Fortune Plaza, Tel: 86 10

7 Dongsanhuan Zhonglu, Chaoyang, Fax: 86 10

Beijing, 100020, PRC

World Financial Centre (Bankruptcy &

Restructuring, Corporate, Dispute

Resolution, Intellectual Property and Japan

Desk)

20th Floor, East Tower, World Financial

Center

Tel: 8610

5878 5588

1 Dongsanhuan Zhonglu, Chaoyang, Fax: 8610

Beijing, 100020, PRC

M U L L A & M U L L A & C R A I G I E B L U N T & C A R O E O P E N I N A H M E D A B A D


November 15 2010 - To accommodate its Rotterdam office, NautaDutilh has once again opted for the Rotterdam Central

District. Next to NautaDutilh’s present office in the Weenapoint, a new, high-quality, sustainable building is to be built by

the Maarsen Group, the owner of the present building. The Maarsen Group announced its redevelopment plans and

launched the new name FIRST Rotterdam.

The building has been designed by Branimir Medic and Pero Puljiz of the Amsterdam firm Architekten Cie. The building is

expected to be delivered at the end of 2014. Until this time, NautaDutilh will continue in its present office on the Weena.

Click here for the press release in Dutch. You can find more information about FIRST Rotterdam at www.firstrotterdam.nl.

For additional information visit www.nautadutilh.com

Rodyk & Davidson appoints four new partners to beef up its corporate and finance practices, to fuel further

expansion of its Singapore and regional businesses

New hires include an equity capital markets specialist

SINGAPORE, 24 November 2010 – Rodyk & Davidson announced the additions of four newly joined partners.

Mrs Helen Yeo, the managing partner of the firm, due to change her status from equity partner to consultant at the end of

the year said, "Rodyk has been on a sustained growth path in Singapore, China, Indonesia and India, so these new

appointments will add to our thriving corporate and finance practices."

Of the four new hires, three will join the corporate finance practice headed by partner Valerie Ong. They are Kenneth Oh,

Evelyn Ang and Pun Ling Fung. "The addition of the new partners is 'strategically timely' given the current upswing in the

market for M&A transactions, and they will add to our further growth momentum," said Ms Ong.

Kenneth was named in the 2009/2010 edition of The Asia Pacific Legal 500 as an "equity capital markets specialist"

recommended by clients.

Kenneth and Evelyn each has more than a decade-long expertise in corporate finance. Ling Fung has been in the industry

for more than seven years. Evelyn and Ling Fung have strong track records in multi-million dollar M&A transaction projects.

The fourth new partner Carol Lim, has joined Rodyk's project finance practice, which concentrates on Indonesia; the

practice is helmed by Tan Joo Thye. Carol has extensive international experience in energy, infrastructure and project

finance projects.

Rodyk recently represented PT Delta Dunia Makmur in its leveraged buyout of Indonesia's second largest mining contractor,

PT Bukit Makmur Mandiri Utama (BUMA). This deal was named "Asia 2010 M&A Deal of the Year" by International Financial

Law Review.

Rodyk is Singapore's oldest law practice and celebrates its 150th anniversary in 2011

For additional information visit www.rodyk.com

N A U T A D U T I L H C H O O S E F I R S T R O T T E R D A M F O R M O V E

R O D Y K & D A V I D S O N A P P O I N T S F O U R N E W P A R T N E R S


06 Dec 2010

Simpson Grierson is delighted to welcome two new specialists to its Auckland commercial property team.

Ruth Bell (nee McLean) joins Simpson Grierson as an associate after establishing her legal career at another Auckland law

firm. Her commercial property focus ranges from small-scale property transactions and subdivisions to complex unit title

developments, acquisitions, disposals, and due diligence.

Associate Amy Johns has a diverse practice providing advice on all aspects of property law, with an emphasis on leasing,

acquisitions, disposals, due diligence, and the property aspects of finance transactions. Before joining Simpson Grierson,

Amy worked for a national law firm and in London where she was based at Bird & Bird LLP.

For additional information visit www.simpsongrierson.com

PRAC 49th International Conference

May 21—24, 2011

Hosted by

NautaDutilh Register online at www.prac.org

S I M P S O N G R I E R S O N E X P A N D S C O M M E R C I A L P R O P E R T Y P R A C T I C E


Perth, 25 November 2010: Clayton Utz is advising Perth based Sandfire Resources NL on its $102 million equity capital

raising.

Perth Corporate Advisory/M&A partners Matthew Johnson and Mark Paganin led the Clayton Utz team.

The raising comprises an underwritten $30 million institutional share placement to institutional and sophisticated investors,

to be undertaken via institutional bookbuild with an underwritten floor price of $7.00 per share. It also includes an

underwritten accelerated non-renounceable pro rata entitlement offer to raise $72 million at an offer price of $6.60 per

share.

The proceeds of the offer and placement will be used to assist funding feasibility studies for the DeGrussa Copper-Gold

Project, initial open pit development and allow for deposits for long-lead time items for plant construction and for other pre-

development activities. Proceeds of the raising, together with Sandfire's existing cash resources of $35 million, will also be

used to underpin continued exploration both in the near-mine environment and regionally.

For additional information visit www.claytonutz.com

12 November 2010 - Gide Loyrette Nouel (GLN) has assisted Areva NP’s subsidiary Compagnie Européenne du Zirconium

(CEZUS), the world’s largest producer of zirconium components for nuclear fuel, regarding the establishment in China of a

joint venture company with a subsidiary of China National Nuclear Corporation (CNNC). The joint venture company, called

CAST - CNNC Areva Shanghai Tubing Co., will manufacture M5™ zirconium cladding and guiding tubes for nuclear power

plants in the PRC.

GLN assisted the client in the drafting and negotiation of the transaction documents including the joint venture agreement,

articles of association and other related agreements (technology license agreement, equipment supply and purchase

agreements, land use rights transfer agreement, secondment agreements etc) and advised on the various legal and tax

aspects pertaining to the establishment and operation of the joint venture.

This is the first joint venture to be established in the PRC for the manufacturing of zirconium alloy tubes. The deal is a

further step in Areva NP’s long-standing cooperation with Chinese players in the nuclear sector and reinforces the overall

cooperation between France and China in the sector. Based in Shanghai, this joint venture company will be operational from

the end of 2012.

The GLN legal team advising Areva in this project was led by partner Stéphane Vernay from the Paris Office, with assistance

from senior associates Nadine Ganesan and Sun Jin.

For additional information visit www.gide.com

C L A Y T O N U T Z A D V I S E S O N S A N D F I R E E Q U I T Y R A I S I N G

G I D E L O Y R E T T E N O U E L A D V I S E S A R E V A O N I N N O V A T I V E M A N U F A C T U R I N G J O I N T V E N T U R E I N C H I N A


F R A S E R M I L N E R C A S G R A I N A C T S I N E Q U I T Y F U N D I N G T R A N S A C T I O N F O R E X I S T I N G I N V E S T O R S C E L T I C H O U S E V E N T U R E P A R T N E R S , I N O V I A A N D V E N T U R E L I N K F U N D S

Peraso is a fabless semiconductor company focused on the development of mm-wave, single-chip transceivers. Peraso's

60GHz transceivers, compliant with emerging 60GHz standards in the mobile consumer electronics market, are

characterized by low power consumption, small footprint and optimal system implementation., announced November 22,

2010 that it has raised CDN$8 million in equity funding led by Celtic House Venture Partners and including existing investors

iNovia Capital and VentureLink Funds. Joining the investment syndicate as a new investor is the Ontario Emerging

Technologies Fund (OETF), a C$250 million fund established by the Province of Ontario to co-invest alongside qualified

investors in innovative, high-growth, private Ontario companies.

For over 15 years, Celtic House Venture Partners has been Canada's most active investor in private information and

communications technology companies. Applying the deep domain expertise of its partners and capitalizing on a unique

architectural approach to investing, Celtic House has consistently provided superior financial returns to its investors. With

$315 million under management, Celtic House has collaborated with management teams and repeat entrepreneurs to

develop platform technology companies from the inception phase through to exit, generating over 20 initial public offerings

and successful acquisitions. For more information, please visit www.celtic-house.com.

iNovia provides venture capital to entrepreneurs who transform innovations into successful companies. The team comprises

sector experts focused on Mobile, Consumer Internet, Internet Communications, Software and Digital Media. iNovia has

$165M under management across two seed and early stage IT and Life Sciences funds. For more information, visit

www.inoviacapital.com or follow iNovia on Twitter at http://twitter.com/iNovia.

With over $230 million under management, VentureLink Funds is a diverse group of retail venture capital funds.

VentureLink Funds give investors access to dynamic industries like alternative energy as well as to well-diversified portfolios

of established companies operating in traditional industries such as financial, manufacturing and service. For more

information, please visit: www.venturelinkfunds.com.

The Ontario Emerging Technologies Fund (OETF) is a direct investment fund established in 2009 by the Province of Ontario

and administered by the Ontario Capital Growth Corporation (OCGC), an agency of the Ministry of Research and Innovation.

The OETF is a C$250-million fund that co-invests alongside qualified investors in innovative, high-growth, private Ontario

companies. The fund focuses on investments in Ontario companies in three sectors: clean technology, life sciences and

advanced health technologies, and digital media and information and communications technology. For more information,

visit www.ontario.ca/ocgc.

FMC lawyers David Little and James Hollingworth acted for the existing investors, Celtic House Venture Partners, iNovia

Capital and VentureLink Funds.

For additional information visit www.fmc-law.com


NEW YORK, 6 December 2010 – A team of lawyers from the New York office of Hogan Lovells US LLP has obtained a

temporary restraining order for client HarperCollins Publishers LLC (HarperCollins) against Gawker Media LLC (Gawker),

parent company of the media blog website Gawker.com. HarperCollins, publisher of the book America by Heart (the Book)

by former Alaskan Governor Sarah Palin, claimed copyright infringement when Gawker on 17 November posted 21 full and

exact pages of the Book on the website six days before it was set to be released to the public.

The Gawker posting, titled, "Sarah Palin’s New Book: Leaked Excerpts," contained little to no commentary by Gawker. On

19 November, after receiving no response from a cease and desist letter sent to Gawker, Hogan Lovells filed a copyright

complaint against Gawker. The same day, Gawker was told that HarperCollins intended to seek on the following day (a

Saturday) a temporary restraining order and a preliminary injunction, enjoining Gawker during the pendency of the action

from continuing to distribute, publish, or otherwise transmit pages from the Book. After HarperCollins advised Gawker on

Saturday that a conference with a federal judge had been scheduled for 3:00 that afternoon, Gawker amended its posting,

and portions of 12 pages from the Book remained on the website. Nevertheless, the Honorable Thomas P. Griesa of the

United States District Court for the Southern District of New York granted HarperCollins the temporary restraining order

against Gawker.

On 22 November Judge Griesa issued a decision explaining that HarperCollins "has, to say the least, a likelihood of success

on the merits in connection with its claim of copyright infringement, as against the defense of fair use." The Court further

found that HarperCollins would be irreparably harmed without the injunction because monetary damages for the

infringement would be difficult to calculate, and HarperCollins was attempting to "control the release of the Book. If this

exercise of rights cannot be enforced with the aid of the court, a commercial advantage is lost, for which plaintiff cannot

realistically be compensated in some later attempt to recover damages." Shortly after Judge Griesa issued his order on

Saturday, Gawker removed the posting from its website. It later stipulated that it would not re-publish or distribute the

posting or any of the pages from the Book in the posting. In connection with that stipulation, the parties agreed to dismiss

the case.

The Hogan Lovells New York team was led by Media Group partners Slade Metcalf and Katherine Bolger, with assistance

from associates Rachel Strom, Collin Peng-Sue, and Jason Porta.

For more information visit www.hoganlovells.com

On November 17, 2010, Bitauto.com successfully listed on the NYSE (Ticker: BITA), publicly issuing 10.6 million ADS priced

at USD 12 each, raising USD 127 million.

Bitauto was established under Cayman law, and the firm's domestic operational entity is a combination of two firms, Beijing

CIG and Beijing BBIT. Bitauto is the first Chinese auto company to list in America in recent years.

King & Wood provided services to the two underwriters, Citibank and UBS. The firm's legal team was led by Jing Gang.

For additional information visit www.kingandwood.com

H O G A N L O V E L L S L I T I G A T I O N T E A M S E C U R E S T R O F O R H A R P E R C O L L I N S I N C O P Y R I G H T I N F R I N G E M E N T C A S E

K I N G & W O O D B I A U T O . C O M L I S T S O N N Y S E


3 December 2010 - Dutch pharmaceutical company

Eurand N.V., listed on NASDAQ, and Axcan Holdings, a

pharmaceutical company specialised in pharmaceuticals

that treat gastrointestinal disorders, have reached an

agreement under which Axcan will acquire all the

outstanding shares of Eurand for USD 12.00 per share in

cash.

The transaction is worth approximately USD 583 million.

Under the terms of agreement, it is anticipated that a

wholly-owned subsidiary of Axcan will shortly commence

a tender offer for all of the outstanding shares of Eurand.

Private equity firm Warburg Pincus is the majority

shareholder of Eurand and private equity firm TPG is the

owner of Axcan.

A special committee consisting of independent non-

executive directors of Eurand, acting on behalf of the

Eurand Board, have approved the acquisition. The

transaction is expected to close in the second quarter of

2011.

On behalf of NautaDutilh, Gijs Gerretsen and Gosse

Oosterhoff, are acting as Dutch legal counse.

For additional information visit www.nautadutilh.com

On November 22, Medtronic, a global leader in medical

technology devices, and Ardian, a privately held

developer of catheter-based hypertension products,

announced a merger agreement through which Medtronic

will acquire Ardian for $800 million in cash and

commercial-revenue-based earnout payments.

For additional information about us visit www.wsgr.com

or to read more about this transaction read more

>>http://wwwp.medtronic.com/Newsroom/

NewsReleaseDetails.do?

itemId=1290456687048&lang=en_US

N A U T A D U T I L H A D V I S E S E U R A N D O N S A L E

R O D Y K & D A V I D S O N A D V I S E S O N I S S U E S $ 3 0 0 M S E C U R E D F I X E D R A T E B O N D S

Issue of S$300 million secured fixed rate bonds due

2013

Rodyk acted for Overseas Union Enterprise Limited in

respect of its issue of S$300 million secured fixed rate

bonds due 2013. The bonds are listed on the SGX-ST.

Standard Chartered Bank was the arranger and manager of

the bond issue, which was part of a S$750 million

syndicated loan facility.

Corporate partner Valerie Ong led the bond issue, which

closed on 20 October 2010, whilst finance partner

Lee Ho Wah led the firm's team in advising on the loan

facility.

For additional information visit www.rodyk.com

TozziniFreire assisted Viracon on the acquisition of 100

percent of the stock of Glassec Vidros de Seguranca Ltda,

the leading architectural glass fabricator in Brazil. Glassec

will become part of Viracon and be called Glassec Viracon.

The transaction is completed, it was announced and

executed on Nov 19, 2010, and its value is confidential.

Partner Mauro E. Guizeline and associates Francisco E.

Machado de Oliveira and Oduvaldo Lara Junior were

involved in the transaction.

For additional information visit www.tozzinifreire.com.br

T O Z Z I N I F R E I R E A S S I S T S V I R A C O N I N G L A S S E C V I D R O S S T O C K

W I L S O N S O N S I N I A D V I S E S A R D I A N I N A C Q U I S I T I O N B Y M E D T R O N I C


SEOUL 2007

October 20-24

PRAC Conference Materials Available online at www.prac.org

PRAC e-Bulletin is published monthly.

Member Firms are encouraged to contribute

articles for future consideration.

Send to [email protected].

Deadline is 10th of each month.

PRAC 48th International Conference Kuala Lumpur Oct 16—19, 2010

SKRINE

09 December 2010

New South Wales introduces pre-litigation procedures – but what will they change?New South Wales has introduced new pre-litigation requirements, but whether they go substantially beyond litigation best practice, or how they will operate, is still unclear.

What's changed for parties contemplating litigation?

The major changes introduced to the Civil Procedure Act 2005 by the Courts and Crimes Legislation Further Amendment Act 2010, which was assented to on Tuesday, are:

parties in a civil dispute must take reasonable steps, having regard to the person’s situation, the nature of the dispute (including the value of any claim and complexity of the issues) and any applicable pre-litigation protocol, to resolve the dispute, or narrow the issues;

•

"reasonable steps" include notification to the other party of the issues, exchanging information and documents critical to the resolution of the dispute, and considering negotiation or alternative dispute resolution (ADR);

•

pre-litigation protocols can be made either by regulation or by the courts as rules of court;•parties cannot unreasonably refuse to participate in genuine and reasonable negotiations or ADR;•if proceedings are then commenced the plaintiff must file a dispute resolution statement identifying what steps have been taken to avoid litigation;

•

lawyers must inform their clients about the new laws and advise on alternatives to litigation; •funders, or anyone directly or indirectly controlling litigation (such as insurers) must not cause a party to be in breach of these requirements; and

•

failure to comply can have implications for costs in any subsequent proceedings.•

What will this mean in practice?

It's clear that, as they stand now, the new requirements to some degree codify best practice for responsible litigators, and so do not introduce much novelty.

The Act however does lead to a great deal of flexibility, and thus uncertainty, because pre-litigation protocols have not yet been developed, and "reasonable steps" are not defined exhaustively, and a party's need to comply will depend in part upon their situation and resources and the nature of the dispute, so there is some scope for further explanation by the courts.

You might also be interested in…

Civil Dispute Resolution Bill - a genuine step towards more ADR?•NSW rolls back contentious cy-près rule in class actions bill•What you really need to know about alternative dispute resolution clauses•

Disclaimer Clayton Utz communications are intended to provide commentary and general information. They should not be relied upon as legal advice. Formal legal advice should be sought in particular transactions or on matters of interest arising from this bulletin. Persons listed may not be admitted in all states or territories.

December 1, 2010 - No 41/2010 www.tozzinifreire.com.br

Telecommunications, IT and Internet

RECENT NEWS

Mobile Virtual Network Operators Regulation On November 22, 2010, the Brazilian Telecommunications Agency (“Anatel”) published its Resolution No. 550, approving the regulations for mobile virtual network operators in Brazil (the “MVNO Regulation”). The MVNO Regulation creates two MVNO’s modalities, the accreditation and the authorization. Companies interested in operating as accredited companies shall accredit themselves with the current mobile telecommunication service providers, acting on their behalf and developing inherent, ancillary or complementary activities. Pursuant to the MVNO Regulation, the accredited companies will not render telecommunication services, which shall continue under the responsibility of the mobile telecommunication service providers. The accredited companies shall enter into a representation agreement with the mobile telecommunication service providers (which is not an agency agreement governed by Federal Law No. 4.886/65) and submit it to the homologation of Anatel. Annex I of the MVNO Regulation contains the mandatory provisions which shall be present in this representation agreement. Differently from accredited companies, authorized operators depend upon the obtainment of an authorization of Anatel for the rendering of mobile network telecommunication services. Such companies will be effectively treated as telecommunication services providers and shall be subject to all the rules contained on the regulation applicable to telecommunication services providers. The authorized operators, in addition to all the objective and subjective conditions imposed by Anatel for the granting of an authorization for the rendering of telecommunication services, shall also enter into a network sharing agreement with a current mobile telecommunication service provider, with no exclusivity, meaning that an authorized operator may enter into network sharing agreements with more than one provider of telecommunication services in the same area.

WWW.TOZZINIFREIRE.COM.BR T 55 11 5086-5000 F 55 11 5086-5555

© 2010 Fraser Milner Casgrain LLP

Focus OnSecurities | Corporate Finance

NOVEMBER 2010

1 The Grey Area of Proxies: Court Clarifies

Voting Rights in Proxy Contests

2 Contact Us

The Grey Area of Proxies:

Court Clarifies Voting Rights in Proxy Contests By Michael Schafler and Matthew Fleming

Overview: Until very recently, there was little if any guidance from the courts as to the scope of a proxy holder’s voting discretion in circumstances where the instruction is to “withhold” voting for the management slate of directors. This changed on September 27, 2010, when the Ontario Superior Court of Justice handed down its decision in Mason v. Augen Capital Corp. 2010 ONSC 5319. The proceeding was started immediately after a shareholder meeting of Augen Capital Corp. (“Augen”), during the course of which the chair had disregarded a ballot cast by a proxyholder (Mr. Mason). Consequently, the slate of directors favoured by management prevailed over an alternative slate proposed by Mr. Mason.

The Beginning: Management had delivered a customary information circular and management proxy to Augen shareholders, soliciting support for, among other matters, a resolution reducing the number of directors on the board of directors from six to four and, in anticipation of that resolution passing, for the election of management’s four nominees to the board. The management form of proxy included two options for the election of directors: “for” or “withhold”.

The Meeting: Mr. Mason held a clear majority of proxies. Once the meeting started, the resolution reducing the number of directors from six to four was defeated. Management then nominated two new candidates from the floor. Mr. Mason nominated

fmc‐law.com MONTRÉAL OTTAWA TORONTO EDMONTON CALGARY VANCOUVER

four new candidates. Mr. Mason received four ballots (representing all shareholders who had appointed him their proxy), each containing two choices beside the candidates’ names: “for” or “withhold.” Unlike on three of the ballots, on the fourth and disputed one, the scrutineer had pre‐selected the “withhold” option regarding the four management candidates. Mr. Mason checked off the “for” option beside each of his four nominees, which then made it a total of eight marks. The chair rejected this ballot on the basis that Mr. Mason had effectively cast eight votes – four “fors” and four “withholds.”

The Ruling: The Court disagreed with the chair’s characterization of the four “withholds” as equivalent to a vote cast. The Court reasoned that common sense and logic inferred a difference between withholding a vote and casting a vote. Therefore, an instruction to “withhold” is not the same as casting a vote. And, by marking the ballot “withhold” with respect to the four management nominees, Mr. Mason had not exhausted any of the six votes available to him. The Court also held that there was no established practice that once the proxy has been marked “withhold” the proxy holder is precluded from voting the shareholder’s shares for other nominees.

Significance: This case will have important ramifications in the context of proxy fights as, for the first time, the “amorphous concept” of “withhold” has been judicially clarified. In the future, management, their proxy solicitation agents and scrutineers will need to be careful to treat “withhold” proxy instructions as, in effect, blank voting instructions with respect to new nominations not contained in the circular materials. Contact Us

For further information, please contact a member of our National Securities | Corporate Finance Group.

http://www.fmc-law.com/AreaOfExpertise/Securities_Corporate_Finance.aspx

http://www.fmc-law.com/AreaOfExpertise/Securities_Corporate_Finance.aspx

China Law InsightPosted at 2:54 PM on November 17, 2010 by King & Wood

New Provision Could Change Contract Law in China but Judges Remain Conservative

By Susan Ning, Tao Huang, and Yang Yang

As was the case throughout the world, the global economic downturn beginning in 2008 caused many in the Chinese market to face difficulties in fully performing executory contacts which had been formed prior to the crisis. As such, many parties to such contracts requested modification or even rescission of their contracts under the changed circumstances. As a response to these trends, the Judicial Interpretation on Contract Law II was issued by the Supreme People’s Court of the People’s Republic of China (hereinafter the “SPC”) to further clarify certain legal rules under current Chinese Contract Law . In particular, Article 26, Chapter 4 of the Judicial Interpretation on Contract Law II (hereinafter “Article 26” or the “Fundamental Change in Circumstances” Provision") provides guidance on a party’s right to modify or rescind a valid contract when a Fundamental Change of Circumstances occurs after contract formation. A Fundamental Change of Circumstances in this regard is differentiated from a force majeure event and does not cover changes that may arise from normal commercial risks, and under which the purpose of the contract would be frustrated or performance will result in extreme unfairness.

Article 26 or the “Fundamental Change of Circumstances” Provision

The “Fundamental Change of Circumstances” doctrine was not originally included in the Contract Law, but wasissued as a judicial interpretation during the global economic downturn. The provision gives a contracting party the right to request for modification or rescission of a contract under “fundamental change of circumstances,” but also sets up very strict condition precedents. The Article 26 states:

“After a contract is legally formed, in view of objective circumstances not anticipated by the parties when the contract was formed, not caused by force majeure nor commercial risks, and significant changes occur so that continuing the performance of the contact is unfair and inequitable to one party or the objective of the contract cannot be fulfilled, then a party or both parties may request the people's court to modify or rescind this contact. The people’s court shall abide by the principle of fairness and consider the actual situations involved in this case before making a decision on modifying or revoking the contract at issue.”

Accordingly, there are four elements that must be present in order to establish a prima facie case so that a request may be made to a court to modify or rescind a valid contract:

A. objective circumstances exist that were not anticipated by the parties when the contract was formed; B. the change of circumstances is not caused by force majeure; C. the change of circumstances is not a result of a normal commercial risks; and D. the continuing performance of the contact would be unfair and inequitable to one party or the objective of the contract cannot be fulfilled.

In deciding whether to grant a request for modifying or revoking a contract, the people’s courts will primarily consider (1) the principle of fairness and (2) the surrounding facts involved in each individual case.

In addition, the SPC announced two other policies after Article 26 which further clarify the application of Article 26: (1) Guidance for Trials on Contract Litigation in the Current Environment ; and (2) Announcement on Serving the State and Communist Party by Correctly Applying Judicial Interpretation of the Application of Contract Law of the People’s Republic of China II . In particular, the Guidance for Trials on Contract Litigation in the Current Environment provides four policy objectives which we will be further discussed. These policies are very important in ensuring fair and unified application of Article 26.

A. Objective Circumstances Unanticipated by the Parties when the Contract was formed.

First, the Guidance for Trials on Contract Litigation in the Current Environment provides standards for the interpretation of “unanticipated” Based on a reasonable person in common society standard, whether the level of risks is beyond a reasonable person’ expectations, whether the risks can be avoided or controlled, and whether transactions are of a high risk or high return nature determine what is “unanticipated”. In addition, the people’s courts shall consider the situations involved in specific cases and make decisions on a case-by-case basis.

Second, some recent cases may provide insight on the meaning of “unanticipated objective circumstances.” InApril, the Beijing Municipal Government issued an announcement that prohibited banks from issuing mortgage loans to home purchasers who already owned two residential units. At the time of the issuance of this announcement, many real estate purchasers that already owned two or more units had entered into purchase agreements. Therefore, many residential unit purchasers filed lawsuits with the people’s courts claiming that due to this announcement, they could not obtain mortgage loans and subsequently could not afford to perform their end of the purchase agreements. In July, the Beijing Haidian District Court announced that they would recognize this development as an “unanticipated objective circumstance.”

B. What is Force Majeure

“Force majeure” under Chinese Contract Law means an extraordinary circumstance that is unforeseeable, unavoidable and out of the control of any Party. In practice, events of force majeure mainly include natural disasters, war, strikes, riot, civil commotion, fire, explosion, sabotage, terrorism or embargo. In 2003, the Chinese Supreme Court issued an announcement which recognized “SARS” as an event of Force Majeure.

Article 26 requires that the objective circumstance unanticipated by the parties is not caused by events of force majeure. However, Article 26 does not provide the difference between force majeure and fundamental change of circumstances. From the Beijing Haidian District Court’s decision referred to above, it seems that changes in laws may be recognized as a fundamental change in circumstances. Article 26 was issued last year, and more time is needed to fully understand the courts’ attitude in differentiating between the two.

C. Difference between “Fundamental Change of Circumstances” and “Commercial Risks”

Both Article 26 and the Guidance for Trials on Contract Litigation in the Current Environment stressed that a fundamental change of circumstances shall not include changes arising from normal commercial risks. Generally, common commercial risks can be reasonably anticipated and assumed by the parties.

During the global economic downturn, most disputes seeking application of Article 26 refer to changes in commercial markets, such as price fluctuations in raw materials or commodities. When distinguishing “fundamental change of circumstances” and “commercial risks”, the courts generally take a cautious approach and will consider whether the event could have been reasonably anticipated by the parties. The Guidance for Trials on Contract Litigation in the Current Environment provides that when it comes to a significant increase or decrease in prices of raw materials, changes in supply and demand, insufficient cash flow and other similar reasons, the people’s courts shall strictly abide by the principle of fairness and carefully scrutinize the objective circumstances alleged by one party. Generally, prices of raw materials, supply and demand, and cash flow issues usually contain lower or more manageable risks than other market factors such as currency fluctuations or interest risks. Market participants may conduct routine transactions involving the same raw materials in the same territories. Such risks are more likely to be routine commercial risks.For some higher-risk areas, the Supreme Court has called for a strict approach. The Guidance for Trials on Contract Litigation in the Current Environment requires much stricter inspection on commodities that are extremely active on the market such as petroleum, coal, nonferrous metals, or commodity price indexes and financial product contracts such as stocks and futures. In a recent arbitral award related to swap contracts, the China International Economic and Trade Arbitration Commission did not recognize the global economic crisis as a “fundamental change of circumstances.” This decision is based on two reasons:

(1) the global economic crisis was in many respects a gradual process instead of an abrupt event whichcaught market participants off guard. The rationale behind this reason is that as the downturn unfolded, market participants are able to anticipate and seek solutions to control risks; and (2) the underlying index of the swap contract involved in this arbitration was the Libor interest rate which was recognized as high risk derivative trading. All parties were aware of such high risks at the time of contract. The rationale behind this reason is that if parties are aware of higher risks through the reasonableness standard, they shall bear such anticipated risks. In addition, parties that enter into high risk transactions are hoping to achieve high returns and correspondingly they shall bear any losses that may arise in these transactions.

This arbitral decision implies that with the increased scrutiny the people’s courts will impose on the financial derivative contracts, the global economic crisis will generally not be recognized as an unanticipated circumstance because these transactions are considered by a reasonable person as containing high commercial risks.

D. Continuing Performance of Contact is Unfair and Inequitable to One Party or Objective of Contract Cannot be Fulfilled

This element is the same as that of mandatory rescission whereby one party is entitled to rescind a contract if the other party breaches ancillary debt obligations after the expiry of the performance period and such breach frustrates the objective of the contract. Generally, the contract purpose may be described in the contracts or inferred from the negotiations and execution between the parties.

On August 25, 2009, the Beijing Chaoyang District People’s Court issued a decision on an exclusive licence agreement suit brought by Song Ying, etc. against Beijing Chang Xiang Bang Pet Information Consultancy Service Center. In this case, the courts held that failure to obtain a required license which partially contributed to a default would be considered as a situation where “the objective of the contract cannot be fulfilled.”

This case provides guidance for what may frustrate the purpose of a contract such as failure to obtain a required licence by one of the parties. In addition, this case provides a basis whereby if a party’s fault partially contributed to any event which will frustrate the purpose of the contract, it would be unfair to have the other party perform the contract and incur losses.

E. Cautious Attitudes of People’s Courts on Applying Article 26

The Guidance for Trials on Contract Litigation in the Current Environment provides a policy objective where the people’s courts shall protect the interests of parties who have performed their contractual obligations in accordance with a valid contract. What’s more, the policy is for people’s courts to not permit debtors escape from performing their debt repayment obligations.

The SPC requires all people’s courts to conduct very strict reviews on the unanticipated circumstances alleged by parties seeking modification or rescission.

If based on the specific situations of individual cases, the court considers applying this provision, the trial court must first report this case to the high court at the provincial level for examination and approval. When necessary, the case may be reported to the SPC for examination and approval. Having the high court at the provincial level as the primary authority for applying Article 26 ensures unified application at least by province. King & Wood PRC Lawyers40th Floor, Office Tower A, Beijing Fortune Plaza,7 Dongsanhuan Zhonglu, Chaoyang DistrictBeijing 100020, China

.

The Colombian Government Eliminates Tax Benefits

Related With Foreign Loans

Tuesday, 09 November 2010 23:03

Tax News Flash Number: 95

The Colombian government eliminates tax benefits related with foreign loans and the debate about the executive regulation faculties and consolidated situations come again to life

In the past few days, the Colombian Government announced a number of measures seeking to thwart the Colombian peso revaluation against the American dollar. One of these measures consists in the abolishment of a tax benefit (a 0% rate on withholding tax over interest payments) applicable to private debts, in foreign currency, and obtained abroad. According to article 25, numeral 5, literals a) and c), of The Colombian Tax Code, they are not a national source income:

Interests derived from foreign loans obtained by national, foreign or mixed enterprises established in Colombia and by trust assets managed by trustee companies established in Colombia, whose activities are deemed valuable for the economic and social development of the country.

Rents originated in leasing contracts, signed directly or by means of a leasing company, with foreign enterprises without a domicile in the Colombian territory, looking for the financing of machinery and equipments related to exportation processes or with activities deemed valuable for the economic and social development of the country.

However, on November 5, 2010, the Colombian Economic and Political Council (from now on, CONPES), responsible for the definition of the expression “activities deemed valuable for the economic and social development of the country”, recommended in the Document 3687 to:1. Do not categorize any activity as an activity deemed valuable for the economic and social development of the country as long as the application of article 25 of the Colombian Tax Code is concerned. 2. To abolish Decree 2105 issued in 1996 that offers a definition of the term “activities deemed valuable for the economic and social development of the country” in order to apply article 25, numeral 5, literals a) and c), of the Colombian Tax Code.As a consequence, through Decree 4145 issued on November 5, 2010, (from now on, “Decree 4145”), published in the official journal No.47.884 of November 5, 2010, the Colombian Government abolishes Decree 2105 issued in 1996 and established a 33% rate withholding tax over interests payments originated in (i) foreign loans, signed and paid out after the coming into force of the mentioned decree, and; (ii) additional payments, different from the primary one, done after the date in which the decree becomes mandatory, but originated in foreign loans signed before this date. As far as the mentioned leasing contracts are concerned, Decree 4145 orders a 33% rate withholding tax over (i) rent payments originated in contracts signed after the Decree’s coming into effect, and; (ii) new payments originated in contracts signed before the Decree´s coming into effect. Apparently, these provisions do not affect foreign public debts, since the interest tax exemption related to this kind of loans is considered in article 218 of the Colombian Tax Code, which has not been derogated. On the contrary, the measure may affect private contracted debts and therefore it is important to look through the pertinent contracts’ clauses related with tax payments and withholdings, particularly, protection measures (e.g. “gross up provisions”) in order to define the practical consequences of the new withholding rule. In brief, it is correct to affirm, then, that article 25, literals a) and c) is no longer applicable. This is against the legislator will, since the latter´s aim was to recognize a benefit for the strategic activities with a particular importance for the economic and social development of Colombia. In view of the situation, double taxation treaties signed by Colombia and based on the OECD (Organization for economic cooperation and development) model, such as the ones signed with Spain and Chile (in firm), become relevant. This is because article 11 of these treaties, states that withholding tax applicable to interest payments in the source country is limited to 0%, 10% or 15% depending on the creditors characteristics. Anti-elution norms, limitation of benefits and the identification of the effective beneficiary, must be analyzed at the moment of implementing debt structures through jurisdictions that are subject to a double taxation treaty.

For further information, please contact:

Jose Andrés Romero [email protected] Carlos Fradique-Méndez [email protected] Jorge David Bedoya [email protected]

www.bu.com.co

Pharmacovigilance 30 November 2010This newsletter is sent from NautaDutilh

European pharmacovigilance legislation adopted by EU Council

On 29 November 2010 the Council of the European Union adopted new pharmacovigilance legislation. The decision follows a first reading agreement by the European Parliament on 22September 2010 and was taken without discussion.

The new legislation forms part of a three-piece "pharmaceutical package" and amendspharmacovigilance legislation contained in Directive 2001/83/EC and Regulation (EC) No.726/2004. The parts concerning counterfeit medicines and information to patients have not yetbeen adopted. The amendments entail new requirements as well as codification of various existingrequirements laid down in Volume 9A containing the European Commission's Guidelines onPharmacovigilance. Key changes include the possibility to impose obligations to conductpost-authorisation safety and efficacy studies and the fact that requirements concerning e.g. riskmanagement systems, post-authorisation safety studies ("PASS") and Periodic Safety UpdateReports ("PSUR") are tailored for individual medicinal products and are made proportionate to thespecific risks of the medicinal product.

Monitoring of safety data

As part of the obligation to continuously monitor the safety of medicinal products, marketingauthorisation ("MA") holders will be required to maintain a Pharmacovigilance System Master File("PSMF") permanently available for inspection. The PSMF shall be kept up to date and replacesthe current detailed description of the pharmacovigilance system ("DDPS"). The reportingresponsibilities include providing all information available, including the results of clinical trials orother studies, as well as reporting of off-label use. MA holders and Member States will have tosubmit data into the central Eudravigilance database.

Periodic Safety Update Reports (PSURs)

Routine reporting is no longer necessary for products with low risk or where reporting would beduplicative. PSURs will contain a scientific evaluation of the risk-benefit balance of the productrather than a detailed presentation of individual case reports. PSURs will have to be submitted tothe European Medicines Agency who will further distribute to the Member States. The frequencyfor submitting PSURs for medicinal products that contain the same active substance or samecombination of active substances may be harmonised to enable a single assessment.

Risk management systems

A risk management system is required for each new medicinal product or for existing products onthe basis of safety concerns. The risk management system should be proportionate to theidentified risks, potential risks, and the need for additional information on the medicinal product.For some products, a risk management system may consist solely of routine pharmacovigilanceactivities. In other cases, for example if there are concerns about the risks affecting the risk-benefit

http://www.newsletter-nautadutilh.com/?pname=saf&xzine=4495&type=2

balance, an applicant shall be required to submit a detailed description of the risk managementsystem which it intends to introduce.

Additional monitoring: post-authorisation safety and/or efficacy studies

Competent authorities may either at the time of granting of the MA or at a later moment require MAholders to conduct post-authorisation studies on safety and/or efficacy. For certain medicinalproducts, applicants may receive an MA under the condition that they perform additionalmonitoring. This includes all medicinal products with a new active substance and biologicalmedicinal products including biosimilars. In those cases the SmPC and the patient informationleaflet shall include the statement: 'This medicinal product is subject to additional monitoring'. Thatstatement shall be preceded by a black symbol, and followed by an appropriate standardisedexplanatory sentence, still to be selected by the Commission.

Inspections

Member States remain responsible for performing pharmacovigilance inspections. They willhowever strengthen their cooperation by sharing more information on the planning of inspectionsand on inspection findings.

Entry into force

Once signed by the President of the European Parliament and the President of the Council thelegislative act will be published in the Official Journal of the EU after which it will enter into forceafter 20 days. The Member States will have to implement the legislation and within 18 months ofentry into force and apply the legislation from that date onwards, which is expected for mid-2012.

Contact

For more information please contact:

Carla SchoonderbeekE: [email protected]: +31 20 7171 905

Bart JongE: [email protected]: +31 20 7171 908

Hein van den BosE: hein.vandenbos@ nautadutilh.comT: +31 20 7171 926

Privacy / General conditions / Disclaimer

This publication is intended to highlight certain issues. It is not intended to be comprehensive or toprovide legal advice. If you would like to unsubscribe please use the unsubscribe option on thenewsletter website. You can also send an e-mail to [email protected] make sure that you put the word 'unsubscribe' in the subject field of your e-mail.

mailto:[email protected]



http://www.newsletter-nautadutilh.com/EN/about.html?cid=9

http://www.newsletter-nautadutilh.com/EN/afmelden.html?cid=7

mailto:[email protected]?subject=Unsubscribe

Search and Enforcement Under the Financial Markets Authority (FMA)

01 Dec 2010

A new Financial Markets Authority (FMA) is to be created to monitor compliance with financial market legislation as well as the governance, reporting and supervision required by financial market participants. The Financial Markets (Regulators & Kiwisaver) Bill, which establishes the FMA is likely to be passed early next year.

The purpose of establishing the FMA is to provide "a single market regulator with a culture of visible, proactive, and timely enforcement", and to help rebuild the confidence of "mum and dad investors" in financial markets.

The FMA will take over the functions of the Securities Commission, as well as some of the responsibilities of the NZX, the Ministry of Economic Development and the Government Actuary and will monitor compliance with various Acts including the Securities Act 1978, the Financial Advisers Act 2008; Securities Markets Act 1998, Superannuation Schemes Act 1989, and some provisions of the Companies Act 1993 and the Crimes Act 1961. The FMA will regulate financial advisers, securities trustees, statutory supervisors, and auditors.

In order to carry out its functions, the FMA has been given wide ranging information gathering and enforcement powers, which are set out in part 3 of the Bill. There are two key areas of interest which relate to 1) the information gathering powers of the FMA (in particular its search powers) and 2) the ability of the FMA to take civil action on behalf of certain persons as part of its enforcement powers.

Information Gathering Powers

The FMA will be able to:

require any person to supply information, produce documents or appear to give evidence (clause 25); and

enter and search a place for the purpose of ascertaining whether a person has engaged in or is engaging in conduct that constitutes a contravention of any provision of the financial markets legislation (clause 29). The FMA must be satisfied that there are reasonable grounds to suspect that a person has engaged in conduct that constitutes a contravention and that the search will find evidential material. However, the FMA may only enter and search if the occupier consents or a warrant is obtained from a judge of either the High Court or the District Court.

Failure to comply with a request from the FMA, providing false or misleading information or obstructing the execution of a search warrant will be a criminal offence (with a maximum fine of $300,000) for either a company or an individual.

While the Securities Commission previously has had the power to require persons to supply information, it did not have the power to obtain and execute search warrants, and this is a significant extension to the information gathering powers.

There have been a number of public submissions on the Bill, some of which express concern about the scope of the information gathering powers that the FMA will have, and in particular with search warrants.

In general, the concerns are due to the fact that the FMA will have a wide range of functions spanning minor issues to criminal offences. The information gathering powers will apply to all of those functions. In its submissions on the Bill, the New Zealand Bankers Association has suggested a threshold be established which would exclude the search powers of the FMA in cases which involve less serious offences.

There is also a concern with the ability to require a person to provide information or evidence to the FMA where that person may face criminal charges (although a witness before the FMA will have the same privileges as they would have before a Court - clause 53).

Furthermore, the ability to challenge the exercise of these powers in Court will be dampened by clause 25, which allows the FMA to continue to require the information to be provided, evidence given or a search warrant executed until a final decision is given by the Court.

Enforcement Powers

Another issue that is causing particular controversy is the proposed ability of the FMA to exercise rights on behalf of investors, or others, either by commencing a civil action, or taking over a civil action that has already been commenced (clauses 34-41).

The FMA can even apply to the Court for an order that the person whose rights it is exercising meet the reasonable costs of the proceeding (clause 38).

There are some limits on the exercise of this power, including that it must be in the public interest and the FMA must consider the effect of the proceedings on future conduct in financial markets and whether it would be an efficient and effective use of the FMA's resources.

The power does not change the duties or liabilities of any person and its primary objective is to promote the public interest rather than to obtain redress for investors.

This is not a power that is currently available to any regulator in New Zealand and marks a significant change to enforcement, including for example enforcement of director's duties. The power is however similar to that available to the Australian Securities and Investment Commission.

It remains to be seen in what circumstances the FMA will exercise this power, but it has already created much controversy in the submissions process.

www.simpsongrierson.com

Restrictions on Distributors Violate the Fair Trade Act◎Yvonne Hsieh

At its 973rd meeting on June 30, 2010, the Fair Trade Commission (the "Commission") determined that Hong-Yin Multimedia Technology Corporation ("Hong-Yin") and Rui-Ying Corporation ("Rui-Ying") violated Article 19, Item 6 of the Fair Trade Act (the "Act") by prohibiting their distributors from carrying or dealing in other brand's MIDI karaoke machines, and by controlling the prices that distributors may charge for subletting the machines. Such conduct, the Commission determined, constituted "limiting trading counterparts' business activity improperly by means of the requirements of business engagement." Pursuant to this finding, the Commission issued an injunctive order and fined Hong-Yin and Rui-Ying, respectively, NT$ 700,000 and NT$ 1,000,000.

The Commission found that Hong-Yin and Rui-Ying, which together account for roughly 80% of the market in MIDI karaoke machines, have considerable market power. In September 2008, the two companies informed their distributors at a distributor meeting that they will terminate their relationship with a distributor if it carries or deal in other brands' MIDI machines. The two companies also communicated this restriction to their distributors in writing, and began including the same restrictive provision in contracts with regional contractors. The Commission found that such restriction has a materially adverse impact on market competition because it will prevent the companies' competitors from expanding or obtaining new sales channels.

In addition, the Commission found that Hong-Yin and Rui-Ying contractually restricted, at the pain of termination, the price that their regional contractors may charge for subletting MIDI karaoke machines. The Commission also found that when the regional contractors enter into an agreement to sublet the two companies' MIDI karaoke machines, they first pay a deposit, which is calculated based on the sublet price and the number of units agreed upon. The regional contractors will then deduct this deposit from actual subletting revenues. In other words, the regional contractors have assumed all of the business risks. Based on these facts, the Commission determined that such conduct prevented the regional contractors from exercising their independent business judgment, and constituted improperly limiting the business activity of counterparties. Moreover, this price control has the effect of harmonizing prices in the market and therefore hampering competition.

The Commission concluded that the two companies' conduct limited competition in the market of MIDI karaoke machines, in violation of Article 19, Item 6 of the Fair Trade Act. Pursuant to Article 41 of the Act, the Commission issued an injunctive order and fined Hong-Yin and Rui-Ying, respectively, NT$ 700,000 and NT$ 1,000,000.

Lee and Li Bulletin

Copyright © Lee and Li, Attorneys-at-Law, All rights reserved.

VOLUME 7 ISSUE 11 | NOVEMBER 2010

INTELLECTUAL PROPERTY REPORT

www.bakerbotts.com

Articles

Willfulness Allegations Post-Seagate - The Role Of Actual Notice Jason Finch

I. Introduction

Patent infringement lawsuits are often a major concern for defendants, primarily due to the potential for damage awards that are often some of the highest in private litigation, often ranging anywhere from tens of millions to hundreds of millions of dollars. As if this were not enough cause for concern, a defendant is also faced with the threat that a court may increase a damage award up to three times (and award plaintiff’s attorneys’ fees) upon a finding that the asserted patent was willfully infringed.1 Due to the potential for recovery of treble damages, it is highly likely that a defendant facing an allegation of patent infringement will also be faced with the allegation that the infringement was willful.2 Thus, it is particularly important to be aware of the factors a court will consider in addressing a claim of willful infringement. One of these factors is a defendant’s “actual notice” of an asserted patent.

II. Background -- The Pre-Seagate “Due Care” Standard For Willful Infringement

Under the “due care” standard for willful infringement laid out by the United States Court of Appeals for the Federal Circuit in Underwater Devices, Inc. v. Morrison-Knudson Co., Inc., an accused infringer would be found to have willfully infringed an asserted patent when: (1) the accused infringer had actual notice of the asserted patent, and (2) the accused infringer did not meet his “affirmative duty to exercise due care to determine whether or not he is infringing.”3 Because the “affirmative duty of due care” was typically satisfied by obtaining a competent noninfringement opinion from outside counsel prior to commencing the acts accused of infringement,4 actual notice of a patent typically played a clear role in the willfulness analysis under the “due care” standard -- it defined the point at which a party was effectively obligated to obtain a competent noninfringement opinion.

A failure to obtain such an opinion put the put the party at risk of a finding of willfulness in the event that the party was later accused of infringing the patent. Thus, under the “due care” standard for willful infringement, it was important for a party to know when actual notice of a patent had been received such that a competent noninfringement opinion could be obtained timely thereafter.

The Federal Circuit did not explicitly define actual notice in the Underwater Devices case; however, subsequent cases provided some clarification. For example, a notification of potentially infringing activity, such as a cease and desist letter, was held to constitute actual notice.5 However, a party could not simply sit back and wait to receive a cease and desist letter before seeking out a competent noninfringement opinion, as actual notice was also found in situations in which no explicit notification of potentially infringing activity was received (such as a situation in which a party’s attorney was merely established to have seen a reference to a patent in the USPTO Official Gazette).6

Although it was not exactly clear what constituted actual notice under the “due care” standard for willful infringement (the bar appears to have been fairly low, particularly in light of the decisions holding something less than notification of potential infringement could constitute actual notice), what was more clear was how a party should respond to actual notice to avoid a possible future finding of willful infringement -- by obtaining a competent noninfringement opinion.

III. Seagate And The “Objective Recklessness” Standard For Willful Infringement

In the 2007 In re Seagate en banc decision, the Federal Circuit overruled the above-discussed “due care” standard for willful infringement, replacing it with a recklessness standard.7 To prove willfulness under this new standard, a patentee must first show by clear and convincing evidence that an accused infringer acted despite an objectively high likelihood that its actions constituted infringement of a valid patent.8 A “totality of the circumstances” analysis applies,9 and the accused infringer’s “state

http://www.bakerbotts.com

of mind” is not relevant to the inquiry.10

If a patentee shows “objective recklessness” on the part of the accused infringer, the patentee must then show that the objectively-defined risk, determined by the record developed in the infringement proceeding, was either known or should have been known to the accused infringer.11 With regard to this second prong, the Federal Circuit did not define the factors governing whether an accused infringer “should have” known of the risk of infringement, but explained that the “standards of commerce would be among the factors a court might consider.”12 The concurrence by Judge Newman suggests that such standards are grounded in principles of fairness and the reasonableness of the accused infringer’s actions: “[t]he standards of behavior by which a possible infringer evaluates adverse patents should be the standards of fair commerce, including reasonableness of actions taken in particular circumstances.”13

In Seagate, the Federal Circuit did not discuss the role, if any, of actual notice under the new recklessness standard. In applying Seagate, some courts have treated actual notice as a prerequisite to an assertion of willful infringement.14 Some courts have even required notice of an infringement claim (not just notice of another’s patent rights) as a prerequisite to willful infringement.15 Even if actual notice is considered a prerequisite to a finding of willful infringement, however, Seagate does not appear to have affected the fairly low bar for what constitutes actual notice.16

Other courts view actual notice of another’s patent rights as one of a number of factors to be considered in determining, based on the totality of the circumstances, whether the accused infringer acted in an objectively reckless manner.17 Additional factors addressed by courts in assessing willfulness under the Seagate recklessness standard include the following:

the strength of invalidity and noninfringement arguments — developed before18 or during19 litigation

the closeness of key claim construction issues20

the need for a jury to resolve close factual questions21

evidence of copying by the accused infringer22

whether there was a degree of similarity between the patented and accused devices23

whether the infringer took efforts to avoid infringement24

whether the accused infringer was indemnified against infringement costs25

whether the accused infringer was aware of the patented device26

grant or denial of preliminary injunction27

knowledge of patentee’s enforcement efforts28

failed license negotiations29

attempts to design around the patented invention30

pre-sale patent analysis31

whether the asserted patent issued before the accused product was developed or sold32

widespread publicity of the patent or related licensing agreements33

knowledge that a product infringed34

attempts to copy or use the patent as a “roadmap” for the accused product35

In Seagate, the Federal Circuit did make one thing clear with regard to actual notice under the new recklessness standard for willful infringement -- an accused infringer is under no absolute affirmative obligation to obtain an opinion of counsel.36 However, obtaining an opinion of counsel before litigation may strengthen arguments against willfulness,37 and the failure to do so may be a factor that weighs in favor of a finding of objective recklessness.38 Despite the fact that the failure to obtain an opinion may weigh in favor of a finding of objective recklessness, courts have held that “it is improper to allow an adverse inference or evidentiary presumption that such an opinion would have been unfavorable.”39

Thus, under the “objective recklessness” standard for willful infringement, what a party should do in response to actual notice is less clear than under the previous “due care” standard. Because Seagate eliminated the affirmative duty to investigate possible infringement, it is tempting to conclude that it is no longer necessary to obtain a competent opinion of counsel in response to receipt of actual notice of another’s patent rights (particularly in light of the cost associated with such opinions). However, because the failure to obtain a competent opinion of counsel likely will in practice usually weigh to a not-insignificant degree in favor of a finding of objective recklessness, a decision not to obtain a competent opinion of counsel remains a risky strategy.

IV. Conclusion

Although the shift from the “due care” standard for willful infringement to the “objective recklessness” standard of Seagate eliminated the duty to obtain a competent noninfringement opinion in response to actual notice of another’s patent rights, obtaining such an opinion likely remains a good course of action to consider in most cases because: (1) obtaining an opinion before litigation may strengthen arguments against willfulness, and (2) the failure to obtain an opinion may be a factor that weighs in favor of a finding of objective recklessness.

1 35 U.S.C. § 284

2 See, e.g., Kimberly A. Moore, Empirical Statistics on Willful Patent Infringement, 14 Fed. Cir. B.J. 227, 232 (2004) (finding that willful infringement is alleged in over 90% of patent infringement cases). 3 Underwater Devices, Inc. v. Morrison-Knudson Co., Inc., 717 F.2d 1380, 1390 (Fed. Cir. 1983). 4 Ryco, Inc. v. Ag-Bag., 857 F.2d 1418, 1428 (Fed. Cir. 1988). 5 See Westvaco Corp. v. Int’l Paper Co., 991 F.2d 735, 739 (Fed. Cir. 1993). 6 Stryker Corp. v. Intermedics Orthopedics, Inc., 96 F.3d 1409, 1415 (Fed. Cir. 1996). 7 In re Seagate, 497 F.3d 1360, 1371 (Fed. Cir. 2007) (en banc). 8 Id. 9 See, e.g., Liquid Dynamics Corp. v. Vaughan Co., 449 F.3d 1209, 1225 (Fed. Cir. 2006); Honeywell Int’l Inc. v. Universal Avionics Sys. Corp., 585 F. Supp.2d 636, 641 (D. Del. 2008); Telcordia Technologies, Inc. v. Cisco Systems, Inc., 592 F. Supp.2d 727, 745-46 (D. Del. 2009). 10 In re Seagate, 497 F.3d at 1371. 11 Id. 12 Id. 13 Id. at 1377. 14 Anascape, Ltd. v. Microsoft Corp., No. 9:06-CV-158, 2008 WL 7182476, at *3 (E.D. Tex. April 25, 2008) (“‘To willfully infringe a patent, the patent must exist and one must have knowledge of it’”) (citing State Industries Inc. v. A.O. Smith Corp., 751 F.2d 1126, 1236 (Fed. Cir. 1985)); see also Jardin v. Datallegro, Inc., No. 08cv1462-IEG-RBB, 2009 WL 186194, at *7 (C.D. Cal. Jan. 20, 2009) (holding that Seagate did not change the pleading requirements for willful infringement and that the plaintiff need only plead the equivalent of ‘[the accused infringer acted] with knowledge of the patent and his infringement’ to meet the requirements of Rule 8) (quoting Sentry Prot. Prods. Inc. v. Eagle Mfg. Co., 400 F.3d 910, 918 (Fed. Cir. 2005)). 15 Creative Internet Advertising Corp. v. Yahoo! Inc., No. 6:07cv354, 2009 WL 2382132, at *5 (E.D. Tex. July 30, 2009) (stating that an accused infringer must be on notice of an infringement claim to have willfully infringed . . .”) 16 See Stryker, 96 F.3d 1409 at 1415 (holding that an attorney of the accused-infringer seeing a reference to a patent in the USPTO Official Gazette constituted actual notice of an asserted patent); see also i4iLimited Partnership v. Microsoft Corp., 598 F.3d 831, 860 (Fed. Cir. 2010) (upholding jury finding that Microsoft knew about the asserted patent, stating that “[t]he jury heard that Microsoft employees attended demonstrations of i4i’s software, which practiced the asserted ‘449 Patent. Further, the jury learned that Microsoft employees received i4i’s sales kit, which identified i4i’s software as “patented” technology and cited the ‘449 Patent. The jury then saw a series of e-mails between Microsoft employees discussing a marketing e-mail sent by i4i. One of those e-mails explained that the “heart” of i4i’s software was patented, again citing the ‘449 Patent. Based on this circumstantial evidence, the jury could have reasonably inferred that Microsoft knew about the ‘449 patent.” (emphasis supplied)). 17 But see Chisum On Patents, § 20.03[4][b][v][H] (expressing the view an accused infringer’s knowledge of an asserted patent is only a factor to be considered when assessing the second prong of the Seagate standard (i.e., whether the objectively-defined risk of infringing a valid patent “was either known or so obvious that it should have been known to the accused infringer”)). 18 In re Seagate, 497 F.3d at 1374 (“A substantial question about invalidity or infringement is likely sufficient not only to avoid a preliminary injunction, but also a charge of willfulness based on post-filing conduct.”). 19 Cohesive Techs. v. Waters Corp., 543 F.3d 1351, 1374 (Fed. Cir. 2008) (finding reasonable arguments that the accused products did not infringe, based on specification and prosecution history, evidence lack of an objectively high likelihood that actions constituted infringement); Black & Decker, Inc. v. Robert Bosch Tool Corp., 260 Fed. Appx. 284, 291 (Fed. Cir. 2008) (unpublished) (stating in dicta: “Under [Seagate’s] objective standard, both legitimate defenses to infringement claims and credible invalidity arguments demonstrate the lack of an objectively high likelihood that a party took actions constituting infringement of a valid patent.”); Cordance Corp. v. Amazon.com, Inc., 639 F. Supp. 2d 406 (D. Del. 2009) (citing Black & Decker); Honeywell, 585 F. Supp. 2d at 642 (citing Black & Decker); but see i4iLimited Partnership v. Microsoft Corp., 670 F. Supp. 2d 568 (E.D. Tex. 2009)

(stating that “the ‘objective’ prong of the Seagate standard focuses on an ‘objective’ view of the facts and circumstances surrounding an accused infringer at the time that it acts. As a consequence, the number of creative defenses that [the accused infringer] is able to muster in an infringement action after years of litigation is irrelevant to the objective prong of the Seagate analysis.”). 20 Cohesive Techs., 543 F.3d at 1374 (“Because ‘rigid’ was susceptible to a reasonable construction under which [defendant’s] products did not infringe, there was not an objectively high likelihood that [defendant’s] actions constituted infringement.”). 21 See Depuy Spine, Inc. v. Biedermann Motech GmbH, 567 F.3d 1314, 1337 (Fed. Cir. 2009) (“The jury could have reasonably found for either party on the question of equivalence. While the fact that an issue was submitted to a jury does not automatically immunize an accused infringer from a finding of willful infringement, the record developed in the infringement proceeding in this case, viewed objectively, indisputably shows that the question of equivalence was a close one . . . Accordingly, the district court was correct to rule on JMOL that an objectively high likelihood of infringement could not have been found under Seagate’s first prong.”). 22 Anascape, 2008 WL 7182476, at *4; see also Creative Internet Advertising, 2009 WL 2382132, at *2 (stating that “evidence of copying is relevant only to Seagate’s second prong, ‘as is may show what the accused infringer knew or should have known about the likelihood of its infringement’” (citing Depuy Spine, 567 F.3d at 1336) (emphasis supplied)). 23 Creative Internet Advertising, 2009 WL 2382132, at *2. 24 Id. 25 Id. 26 Mass Engineering Design, Inc. v. Ergotron, Inc., 633 F. Supp.2d 361, 379 (E.D. Tex 2009). 27 In re Seagate, 497 F.3d at 1375 (“A patentee who does not attempt to stop an accused infringer’s activities [by moving for a preliminary injunction] should not be allowed to accrue enhanced damages based solely on the infringer’s post-filing conduct. Similarly, if a patentee attempts to secure injunctive relief but fails, it is likely the infringement does not rise to the level of recklessness.”). 28 Telcordia Technologies, Inc. v. Cisco Systems, Inc., 592 F. Supp.2d 727, 746 (D. Del. 2009). 29 Id. 30 Cordance Corp., 639 F. Supp.2d at 417. 31 Honeywell, 585 F. Supp.2d at 643. 32 Cordance Corp., 639 F. Supp. 2d at 416. 33 Id. 34 Finjan Software, Ltd. v. Secure Computing Corp., No. 06-369, 2009 WL 2524495, at *8 (D. Del. August 18, 2009). 35 Cordance Corp., 639 F. Supp. 2d at 417; Finjan Software, 2009 WL 2524495 at *8. 36 Id. at 1371(“Because we abandon the affirmative duty of due care, we also reemphasize that there is no affirmative obligation to obtain opinion of counsel.”). 37 Finisar Corp. v. DirecTV Group, Inc., 523 F.3d 1323, 1339 (Fed. Cir. 2008) (“[A] competent opinion of counsel concluding either that [defendant] did not infringe the [asserted] patent or that it was invalid would provide a sufficient basis for [defendant] to proceed without engaging in objectively reckless behavior[.]”). 38 See Creative Internet Advertising, 2009 WL 2382132, at *5 (holding that “the lack of opinion of counsel is one factor of many that the jury could have taken into account in determining whether Defendant willfully infringed.”); see also Cordance Corp., 639 F. Supp. 2d at 417; but see Anascape, 2008 WL 7182476, at *4 (“While obtaining legal opinion on invalidity or noninfringement may negate a finding of objective recklessness, the failure to obtain opinion of counsel is not a factor supporting willful infringement.” (emphasis supplied)). 39 Creative Internet Advertising, 2009 WL 2382132, at *2 (citing Broadcom Corp. v. Qualcomm Inc., 543 F.3d 683, 699 (Fed. Cir. 2008)).

The materials in this document are made available by Baker Botts L.L.P. for informational purposes only and are not legal advice. The transmission and receipt of information contained in the document do not form or constitute an attorney-client relationship. If these materials are inconsistent with the rules governing attorney communications in a particular jurisdiction, and the materials result in a client contact in such jurisdiction, Baker Botts may be prohibited from assuming representation of the client contact.

Under the rules of certain jurisdictions, this communication may constitute 'Attorney Advertising'.

Abu Dhabi Austin Beijing Dallas Dubai Hong Kong Houston London Moscow New York Palo Alto Riyadh Washington

Copyright © 2010 Baker Botts L.L.P. All rights reserved.

New Disclosure Requirements for MRI, CT, and PET Scans Begin Jan. 1

12.06.10

By Heather B. Deixler and Ingrid Brydolf

Beginning Jan. 1, 2011, a physician who refers a patient for MRI, CT, or PET scans offered by the physician’s practice under the in-office ancillary exception to the Stark Law must provide notice to the patient of alternative area suppliers for the imaging services. The notices are mandated by the Patient Protection and Affordable Care Act (PPACA) and follow rules promulgated by the Centers for Medicare & Medicaid Services (CMS).

This month, physician practices that bill for MRI, CT, and PET scans should be (1) determining whether they offer these imaging services pursuant to the Stark Law in-office ancillary exception and, if so, (2) developing procedures and forms to make the appropriate disclosures to their patients, beginning Jan. 1. A failure to make appropriate disclosure can lead to a violation of the federal Stark Law and, with that, the potential for significant legal and financial risk.

Specific disclosure requirements

When:

• The written disclosure must be made to the patient by the referring physician at the time of referral for each imaging service.

Content:

• No specific form is required by CMS. • Notification to the patient that he or she may obtain the imaging service somewhere other than

from the physician. • A list of suppliers (MRI, CT, and PET) within a 25-mile radius of the physician’s office location.

The number of suppliers listed must be at least five, except where fewer than five exist within that geographic range. Physicians may add to this list (but not substitute other suppliers) by including providers, such as nearby hospitals. If no alternative suppliers exist within the 25-mile radius, a physician must still disclose to the patient that he or she may receive the service elsewhere.

• The name, address, and phone number of each supplier must be listed. CMS advises physicians to annually update the list of alternative suppliers to make sure it is reasonably current and accurate.

Style:

• The disclosure notice should be written in a manner sufficient to be “reasonably understood by all patients[.]”

Documentation:

• Although physicians need not obtain the patient’s signature on the written disclosure form, they must be able to demonstrate compliance with the disclosure rule. If a signature is not obtained, physicians should carefully consider what evidence they can present to CMS to prove that notice was given for a particular referral. If a signature is not obtained, one approach might be to include a checklist in the medical record, along with the disclosure form, where the physician checks a box indicating that the disclosure form was given to the patient at the time of the referral.

CMS’s final rules were published on Nov. 29, 2010, and can be found at 75 Fed. Reg. at 73586-7, 73616 (Nov. 29, 2010).

www.dwt.com

http://www.dwt.com/portalresource/12-10_FR75_CMS

Disclaimer

This advisory is a publication of Davis Wright Tremaine LLP. Our purpose in publishing this advisory is to inform our clients and friends of recent legal developments. It is not intended, nor should it be used, as a substitute for specific legal advice as legal counsel may only be given in response to inquiries regarding particular situations.

www.dwt.com

See note below about Hogan Lovells.

Federal Reserve issues proposed rule on Volcker Rule transition period On November 26, the Federal Reserve Board published a proposed rule setting forth a timeframe for compliance with the "Volcker Rule" provisions of the Dodd-Frank Wall Street Reform and Consumer Protection Act (Dodd-Frank). The proposed rule would, by default, allow two years from the Volcker Rule's effective date for compliance, and allow extensions of such time under certain circumstances, discussed below. Comments on the proposal must be submitted by January 10, 2011. Dodd-Frank directs the Federal Reserve to issue final rules on the transition period by January 21, 2011. The proposal is available at: http://edocket.access.gpo.gov/2010/pdf/2010-29277.pdf What the Volcker Rule does Section 619 of Dodd-Frank, commonly known as the Volcker Rule, generally prohibits banking entities1 from engaging in proprietary trading2 in securities, derivatives, or certain other financial instruments, and from investing in, sponsoring, or having certain relationships with a hedge fund or private equity fund3. (The statute also provides for a number of exceptions to that general rule.) The Volcker Rule will also restrict transactions between a banking entity and a hedge fund or private equity fund for which it serves, directly or indirectly, as the investment manager, investment adviser, or sponsor. Nonbank financial institutions that fall under Federal Reserve supervision – such as those that are deemed "systemically important" – also will have restrictions on proprietary trading and hedge fund and private equity investments, and will be subject to additional capital requirements to be determined by the Federal Reserve. These substantive restrictions of the Volcker Rule become effective 12 months after final regulations are issued or on July 21, 2012, whichever comes first.

Financial Institutions Group Alert 29 November 2010

Contacts

Laura R. Biddle Senior Attorney [email protected] +1 202 637 5419

Nancy L. Granese Senior Governmental Affairs Advisor [email protected] +1 202 637 5697

Henry D. Kahn Partner [email protected] +1 410 659 2780

Daniel Keating Partner [email protected] +1 202 637 5490

1

What you need to know While the Federal Reserve Board's proposed rule sets a timeframe for compliance, it does not address the substantive aspects of how to actually comply with the Volcker Rule. Those aspects will be addressed in future Volcker Rule rulemakings involving not only the Federal Reserve, but the other federal banking agencies, the Commodity Futures Trading Commission, and the Securities and Exchange Commission. No such rules have yet been proposed. Indeed, it is clear from public comments made by federal banking agency staff that, as yet, even they are not certain what it will take to comply with many aspects of the Volker Rule. The proposed transition period The Federal Reserve's proposed rule states that, generally, a banking entity would be required to comply with the Volcker Rule's provisions no later than two years after the effective date4. A nonbank financial company that becomes subject to supervision of the Federal Reserve would be required to comply with the Volker Rule no later than two years after the date the company became a nonbank financial company supervised by the Federal Reserve. Additionally, under the proposed rule, the banking entity or nonbank financial company may request up to three one-year extensions of the general conformance period. Banking entities would also be allowed to request one extension of up to five years to divest certain ownership interests in a hedge fund or private equity fund that qualifies as an "illiquid fund"5 under the statute and proposed rule and where the extension is necessary to fulfill a contractual obligation of the banking entity that was in effect on May 1, 2010. The extension would terminate automatically upon expiration of the contractual obligation, whether or not five years had yet passed. The proposed rule also lists the following criteria that the Federal Reserve may use in considering requests for extensions of time:

Whether the activity or investment: involves or results in material conflicts of interest between the banking entity and its clients, customers or counterparties would result, directly or indirectly, in a material exposure by the banking entity to high-risk assets or high-risk trading strategies would pose a threat to the safety and soundness of the banking entity would pose a threat to the financial stability of the United States

Market conditions The nature of the activity or investment The date that the banking entity's contractual obligation to make or retain an investment in the

Elizabeth A. Khalil Associate [email protected] +1 202 637 3649

Richard Schaberg Partner [email protected] +1 202 637 5671 Stuart G. Stein Partner [email protected] +1 202 637 8575

Visit us at www.hoganlovells.com

2

Note "Hogan Lovells" or the "firm" refers to the international legal practice comprising Hogan Lovells International LLP, Hogan Lovells US LLP, Hogan Lovells Worldwide Group (a Swiss Verein), and their affiliated businesses, each of which is a separate legal entity. Hogan Lovells International LLP is a limited liability partnership registered in England and Wales with registered number OC323639. Registered office and principal place of business: Atlantic House, Holborn Viaduct, London EC1A 2FG. Hogan Lovells US LLP is a limited liability partnership registered in the District of Columbia with offices at 555 13th Street, NW, Washington, DC 20004, USA.

Disclaimer This publication is for information only. It is not intended to create, and receipt of it does not constitute, a lawyer-client relationship.

fund was incurred and when such obligation expires The contractual terms governing the banking entity's interest in the fund The degree of control held by the banking entity over investment decisions of the fund The types of assets held by the fund The date on which the fund is expected to wind up its activities and liquidate, or the date on which its investments may be redeemed or sold The total exposure of the banking entity to the activity or investment and the risks that disposing of, or maintaining, the investment or activity may pose to the banking entity or the financial stability of the United States The cost to the banking entity of disposing of the activity or investment within the applicable period Any other factor that the Federal Reserve believes appropriate.

1 The term "banking entity" is defined to mean any insured depository institution (other than certain limited purpose trust institutions), any company that controls an insured depository institution, any company that is treated as a bank holding company for purposes of Section 8 of the International Banking Act of 1978 (12 USC. § 3106), and any affiliate or subsidiary of any of the foregoing. See 12 USC § 1851(h)(1). 2 "Proprietary trading" is defined as engaging as a principal for the trading account of the banking entity or nonbank financial company supervised by the Federal Reserve in any transaction to purchase or sell, or otherwise acquire or dispose of, any security, any derivative, any contract of sale of a commodity for future delivery, any option on any such security, derivative, or contract, or any other security or financial instrument as determined by regulation. 3 The terms "hedge fund" and "private equity fund" are defined to mean an issuer that would be an investment company, as defined under the Investment Company Act of 1940 (15 U.S.C. § 80a-1 et seq.), but for section 3(c)(1) or 3(c)(7) of that Act, or any such similar funds as the appropriate federal banking agencies, the Securities and Exchange Commission, and the Commodity Futures Trading Commission may, by rule, determine should be treated as a hedge fund or private equity fund. See 12 U.S.C. § 1851(h)(2). 4 "New banking entities" – those that were not banking entities, or subsidiaries or affiliates of banking entities, before July 21, 2010 – may start counting the two years from the date on which the company became a banking entity or a subsidiary or affiliate of a banking entity if that timeframe allows for a longer time for compliance. 5 "Illiquid fund" means a hedge fund or private equity fund that as of May 1, 2010: (1) was principally invested in illiquid assets; or (2) was invested in, and contractually committed to principally invest in, illiquid assets; and (3) makes all investments pursuant to, and consistent with, an investment strategy to invest principally in illiquid assets. The term "illiquid assets" means "any real property, security, obligation, or other asset that (a) is not a liquid asset; or (b) because of statutory or regulatory restrictions applicable to the hedge fund, private equity fund or asset, cannot be offered, sold, or otherwise transferred by the hedge fund or private equity fund to a person that is unaffiliated with the relevant banking entity[.]" However, any asset may be considered an illiquid asset under this latter definition "only for so long as such statutory or regulatory restriction is applicable."

3

So that we can send you this email and other marketing material we believe may interest you, we keep your email address and other information supplied by you on a database. The database is accessible by all Hogan Lovells' offices, which includes offices both inside and outside the European Economic Area (EEA). The level of protection for personal data outside the EEA may not be as comprehensive as within the EEA. To stop receiving email communications from us please click here. The word "partner" is used to refer to a member of Hogan Lovells International LLP or a partner of Hogan Lovells US LLP, or an employee or consultant with equivalent standing and qualifications, and to a partner, member, employee or consultant in any of their affiliated businesses who has equivalent standing. Rankings and quotes from legal directories and other sources may refer to the former firms of Hogan & Hartson LLP and Lovells LLP. Where case studies are included, results achieved do not guarantee similar outcomes for other clients. New York State Notice: Attorney Advertising. © Hogan Lovells 2010. All rights reserved.

4

WSGR ALERTDECEMBER 2010

DELAWARE SUPREME COURT INVALIDATES BYLAW AMENDMENTTHAT SHORTENS TERM OF DIRECTORS ON A STAGGERED BOARD

BY AMENDING ANNUAL MEETING DATE

Continued on page 2...

Summary

On November 23, 2010, the DelawareSupreme Court invalidated a bylawamendment that accelerated the next annualmeeting of Airgas by eight months and cutshort the term of directors serving on thecompany’s staggered board.

Air Products and Chemicals, a hostile bidderfor the company, proposed the bylawamendment at the Airgas annual meeting inSeptember 2010, at which Air Products’ slateof three directors was elected to the Airgasboard of directors. The bylaw amendmentwould have permitted Air Products to electanother slate of three directors to the Airgasboard (and to potentially obtain majoritycontrol of the board) just four months later, inJanuary 2011.

The Delaware Supreme Court held that theterm of a class of directors ending “at theannual meeting in the third year following itselection” means that the class of directors iselected to serve “a three-year term,” andcannot be cut short by a stockholder-approvedbylaw amendment.

Background

On October 8, 2010, the Delaware ChanceryCourt upheld the validity of a stockholder-approved bylaw amendment accelerating thetiming of Airgas’ annual meeting by eightmonths. In the context of Air Products’ hostilebid for Airgas, Air Products engaged in aproxy contest, and was successful in placingthree of its nominees on the Airgas nine-

member classified board at Airgas’September 2010 annual meeting. The Airgascharter provision providing for a classifiedboard, mirrored in the Airgas bylaws, statesthat each class of directors serves until the“annual meeting of stockholders to be held inthe third year following the year of theirelection.” At the 2010 annual meeting, AirProducts also proposed an amendment to theAirgas bylaws that would schedulesubsequent Airgas annual meetings forJanuary of each year, starting with the 2011annual meeting. The acceleration of theannual meeting schedule would havepermitted the election of three additional AirProducts directors to the Airgas board onlyfour months after the 2010 annual meeting.The bylaw amendment was approved by 51.8percent of shares voted at the annualmeeting, representing only 45.8 percent ofthe total number of shares entitled to vote.Airgas challenged the validity of the bylawamendment, claiming that it was inconsistentwith Section 141(d) and (k) of the DelawareGeneral Corporation Law (DGCL), and with theprovision in Airgas’ charter requiringsupermajority approval of any alteration,amendment, or repeal of Airgas’ staggeredboard provision. The Delaware Court ofChancery rejected Airgas’ claims, finding noconflict with the Airgas supermajority voteprovision or the DGCL. The DelawareChancery Court’s ruling was based on itsconclusion that the language in Airgas’staggered board provision was ambiguous,and that ambiguous terms should beconstrued “in favor of the stockholderelectoral rights” and against the board. Thus,

the court found that Airgas’ staggered boardprovision could not be interpreted to require athree-year term for directors.

Delaware Supreme Court’s Analysis

While agreeing with the lower court’s findingthat the staggered board language in theAirgas charter was facially ambiguous, theDelaware Supreme Court steered away fromthe Chancery Court’s reasoning in favor ofstockholder electoral rights. Instead, the courtturned to “overwhelming extrinsic evidence,”including industry practice and understandingof similar charter provisions, to reach itsconclusion that the provision “intends toprovide that each class of directors is electedfor a three-year term.” The court also notedthat a three-year term need not be “measuredwith mathematical precision.” The courtchose not to define what deviation from 365days would be permissible, but determinedonly that four months does not qualify as“annual.” The Delaware Supreme Courtconcluded that the bylaw amendment wouldimpermissibly shorten such a three-year term,and that, by shortening the time betweenannual meetings to four months, the proposedbylaw provision constituted a “de factoremoval” of Airgas’ directors without cause,which would be inconsistent with theunderlying intent of Section 141 of the DGCLand the supermajority vote required underAirgas’ charter.

Conclusion

This is an important decision by the DelawareSupreme Court to overturn a Chancery Court

Austin Hong kong new York pAlo Alto sAn Diego sAn FrAncisco seAttle sHAngHAi wAsHington, D.c.

Austin Hong kong new York pAlo Alto sAn Diego sAn FrAncisco seAttle sHAngHAi wAsHington, D.c. 2

Delaware Supreme Court Invalidates Bylaw Amendment . . . Continued from page 1...

decision and to prevent the substantial weakening of the defenses of companies withstaggered boards. If you have questions regarding this WSGR Alert or any related matter,please contact any member of the firm’s M&A practice listed below.

Martin W. Korman (650) 320-4656 [email protected] J. Berger (650) 320-4901 [email protected] S. Ringler (415) 947-2011 [email protected] T. Ishii (415) 947-2040 [email protected] L. Finkelstein (650) 565-3514 [email protected] B. Cleary (650) 849-3421 [email protected] M. Chu (415) 947-2014 [email protected] M. Sulman (415) 947-2012 [email protected]

Please visit http://courts.delaware.gov/opinions/download.aspx?ID=146690 to view thecourt’s opinion in Airgas, Inc. v. Air Products and Chemicals, Inc., C.A. No. 5817 (Del. Sup. Ct.Nov. 23, 2010).

Please visit http://courts.delaware.gov/opinions/download.aspx?ID=146990 to view thecourt’s opinion in Airgas, Inc. v. Air Products and Chemicals, Inc., C.A. No. 5817-CC (Del. Ch.Oct. 8, 2010).

This WSGR Alert was sent to our clients and interestedparties via email on December 6, 2010. To receive futureWSGR Alerts and newsletters via email, please contact

Marketing at [email protected] and ask to be added to our mailing list.

This communication is provided for your information onlyand is not intended to constitute professional advice as toany particular situation. We would be pleased to provideyou with specific advice about particular situations,

if desired. Do not hesitate to contact us.

650 Page Mill RoadPalo Alto, CA 94304-1050

Tel: (650) 493-9300 Fax: (650) 493-6811 email: [email protected]

www.wsgr.com

© 2010 Wilson Sonsini Goodrich & Rosati, Professional Corporation

All rights reserved.

prac member news · tozzinifreire assists viracon in glassec vidros stock acquisition ... drafting...

Documents