Faced with a devastating court ruling, Xerox on Tuesday threw in the towel, firing its CEO and half of its board of directors to resolve a proxy contest.

It's a stunning victory for King & Spalding lawyers and their client Darwin Deason, the company's third-largest shareholder, as well as for its largest shareholder, Carl Icahn, who shared the cost of litigating the case. It was also a win for Grant & Eisenhofer, Bernstein Litowitz and Kessler Topaz representing a group of institutional holders of Xerox stock.

On Friday, Manhattan State Supreme Court Justice Barry Ostrager enjoined the company's “massively conflicted” merger with Fujifilm Holding Co., which would have provided no cash payment to Xerox shareholders. The judge also greenlighted the election of new board members at an upcoming shareholder meeting.

Xerox—citing “the significant risk and uncertainty of a prolonged litigation” (which by all indications, it was going to lose)—instead reached an agreement with Deason and Ichan.

“The Xerox Board of Directors determined that an immediate resolution of the pending litigation and proxy contest is in the best interest of our company and all stakeholders” the company said.

Under the agreement, Xerox will appoint six new board members and fire its CEO Jeff Jacobson. Keith Cozza, the CEO of Icahn Enterprises, is expected to be elected chairman of the Board of Directors of Xerox.

“[T]he new Board of Directors plans to meet immediately to, among other things, begin a process to evaluate all strategic alternatives to maximize shareholder value, including terminating or restructuring Xerox's relationship with Fujifilm and the proposed transaction with Fujifilm,” according to a press release announcing the settlement.

The Xerox board last fall was planning to replace Jacobson as CEO. Instead, he quickly negotiated a deal where Fuji would acquire a 50.1 percent controlling interest in Xerox, and he would get to stay on as chief executive. Multiple board members would get to keep their seats as well.

The settlement between Deason, Ichan and Xerox does not resolve Deason's claims against Fujifilm for aiding and abetting Xerox board members in breaching their fiduciary duties.

The King & Spalding team includes Israel Dahan, Richard Marooney Jr., Peter Isajiw and Robert Meadows.

“We believe Friday's decision and this agreement mark a watershed moment for corporate governance generally and for Xerox specifically,” Ichan said in a statement. “Thanks to our efforts and the courage and conviction of Darwin Deason, this is once again an exciting time to be a Xerox stakeholder.”

 

The Women Warriors Behind Gilead's Huge Federal Circuit Win

There was a moment before a recent high-stakes argument at the U.S. Court of Appeals for the Federal Circuit began when the lawyers for Gilead Sciences Inc. were huddled together and realized something.

The outside counsel—Fish & Richardson partners Juanita Brooks, Deanna Reichel and Betsy Flanagan—and the in-house Gilead lawyers—Lorie Ann Morgan, vice-president, intellectual property, and Andrea Hutchison, associate general counsel IP litigation—were all women.

And here's something telling: Brooks, a titan of the IP bar and The American Lawyer's 2014 Litigator of the Year, never had that happen in 40 years of practice.

“It was fabulous,” she said, describing the team dynamic as “unbeatable.”

Sure enough, the Federal Circuit on April 25 sided with Gilead in a fight with Merck & Co. over hepatitis C drug patents. In a precedential decision, the panel upheld the lower court's decision to wipe out a $200 million infringement verdict against Gilead because Merck's litigation and business misconduct constituted unclean hands.

It was a hard-fought win, with oral arguments that lasted two hours, and included a series of tough questions for Brooks from Judge Richard Taranto. (She credits Reichel and Flanagan for her preparation.) He went on to write the unanimous opinion, which Brooks called “very carefully, thoughtfully crafted,” and all but “bulletproof” against en banc or Supreme Court reversal.

Of course, if the Gilead team had been all men, no one would have batted an eye. “I hope there comes a time where it's not noteworthy to have an IP litigation team run by women,” said Gilead's Morgan. “Given the number of women in the legal profession, it should be closer to equal… But we're making some progress.”

In-house counsel like Morgan and Hutchison are helping to make it happen. “It troubles us when we see a team come in and it's four middle-aged white guys—and one junior associate to bring diversity, whether it's ethnic or gender,” Morgan said. “We don't hire people just because they are women or ethnic minorities … But you need diversity of thought, and for that, you need diversity of background.”

Hutchison added that they recognize there is “a limited number of senior people” who fit the bill, but that they do expect more diverse junior lawyers “to be given a serious role, not to be window dressing.”

Brooks is well-acquainted with that tactic. “So many times I'll enter my notice of appearance, and then the other side will enter a notice of appearance of a woman” too, she said. “They'll sit them at the counsel's table like a potted plant.”

She added, “We certainly don't have token women. We're the real deal.”

Laughing, she calls herself a triple threat—a woman, a Hispanic, and a member of the firm's management committee.

Brooks joined Fish & Richardson in 2000, and her star power has helped Fish attract the next generation of women IP litigators like Flanagan and Reichel in an especially male-dominated practice area.

“We have a real mentor and role model and inspiration,” Reichel said of Brooks.

Morgan of Gilead sings her praises as well.

“Juanita and I have worked on many, many cases,” she said. “I remember the first time I saw her in court. It was a Markman hearing in an ANDA case, and she was just awesome. I was blown away.”

Still, the full Gilead team outside the courtroom wasn't exclusively female. For example, Fish principals Craig Countryman, Jonathan Singer and Robert Oakes also worked on the briefs.

Flanagan stressed the “important role that our male colleagues play. They also encourage us to do good work and mentor us.”

Brooks added, “One reason we have been able to end up with an all-women team is because many of the men we are fortunate enough to work with are gender-blind. They don't pay attention to gender or the color of skin. It's simply the merits. It just happens organically. Hopefully, in a few years from now, this won't be news.”

 

Lateral Watch

Speaking of the next generation of women IP litigators, Tara Elliott—who got her start at Fish & Richardson—has left Wilmer Cutler Pickering Hale and Dorr to join Latham & Watkins.

According to my colleagues at The National Law Journal, her clients have included Dell, Microsoft Corp., Walmart Inc. and Bridgestone Americas Tire Operations.

Bonus cool fact: Before she went to law school at the University of Pennsylvania, she worked for the CIA.

For more, see Latham Poaches IP Litigator Tara Elliott From Wilmer

 

David Siegal has jumped to Mintz Levin in New York from Haynes and Boone, where he had co-chaired the firm's government enforcement and litigation practice for several years

Last year, we named him Litigator of the Week after the feds called off their securities fraud prosecution of his client, international financier Benjamin Wey

For more, see Mintz Levin Adds Practice Leader, White-Collar Pro From Haynes and Boone

 

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