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On February 23, 2017, U.S., European and international regulators issued statements clarifying their expectations on compliance with the March 1, 2017, variation margin requirements for uncleared swaps. The variation margin requirements are already effective for the largest swap counterparties and become effective for all remaining counterparties on that date.
On February 22, 2017, in Life Technologies Corp. v. Promega Corp., the U.S. Supreme Court ruled that exporting a single component of a multicomponent invention for combination abroad does not give rise to liability for patent infringement. The Court’s ruling follows many reversals of Federal Circuit rulings favoring the patent owner or exclusive licensee. Future disputes will likely focus on the number or percentage of components required to be supplied from the U.S. in order to be considered a “substantial portion,” among other implications.
Most transactions under a public company’s equity-based compensation programs are intended to be exempt from the short-swing profit rule of Section 16(b) of the Securities Exchange Act. In light of recent challenges to customary exemptions, companies should consider taking steps to deter future claims or provide for more efficient avenues of defense in the event of litigation.
For the second time in just over a year, the U.S. Court of Appeals for the Sixth Circuit reversed the United States Tax Court and affirmed the right of a taxpayer to structure its affairs in a manner that takes into account tax advantages or benefits conferred by the plain text and meaning of the Internal Revenue Code. In Summa Holdings, Inc. v. Commissioner, the Sixth Circuit made clear that there are limits to the judicially created substance-over-form doctrine, rejecting an effort by the IRS to apply the doctrine to alter a result that both parties agreed was permitted by the plain language of the code.
On February 2, 2017, the Appellate Division of the New York Supreme Court, First Judicial Department, issued a decision in Gordon v. Verizon Communications, Inc. that addressed the standard to be applied by New York courts in approving disclosure-only settlements. The court's standard is less onerous than the approach taken by Delaware courts and may attract more merger litigation to the New York state courts.
We are pleased to present Inside the Courts (Volume 9, Issue 1), Skadden’s securities litigation newsletter. This quarter’s issue includes summaries and associated court opinions of selected cases principally decided between November 2016 and January 2017. The cases address developing trends in the U.S. Supreme Court as well as in auditor liability, class actions, collateral estoppel and due process, ERISA, fiduciary duties, forward-looking statements, initial public offerings, loss causation, misrepresentations, registration statement liability, scienter, Securities Exchange Act, SLUSA and statutes of repose/statutes of limitations.
On February 2, 2017, Skadden hosted a webinar titled “Key SEC Financial Reporting, Accounting and Enforcement Matters,” the third installment of our four-part Corporate Governance Series. The program addressed topics such as responding to auditor requests for information, accounting for contingent liabilities and related insurance recoveries, Securities and Exchange Commission focus on non-GAAP disclosure, other SEC enforcement trends, segment reporting, and insider trading enforcement and compliance.