It's a lot like litigation. Take the outcome of three cases previously featured in Lit Daily—the IP fight over Facebook's Oculus Rift, where a team from Skadden, Arps, Slate, Meagher & Flom handed Beth Wilkinson her first-ever trial loss, and the water war between Florida and Georgia, for which we awarded the seeming victors from Kirkland & Ellis “Litigators of the Week.” Both saw dramatic reversals of fortune last week, as did a still unfolding fight over hair dye . In the Oculus case, Wilkinson—the founding partner of Wilkinson Walsh + Eskovitz—wasn't fully vindicated, but she came close. On Thursday, U.S. District Judge Ed Kinkeade in Dallas slashed a $500 million jury verdict in half and rejected the plaintiff's request for injunctive relief, allowing Wilkinson's client Facebook to use the disputed technology. Granted, Wilkinson had some help post-trial. In December, Gibson, Dunn & Crutcher partner Ted Olson entered a notice of appearance for Facebook, according to the (largely sealed) court docket. At issue in the trial: Did Facebook steal trade secrets and IP rights for the Oculus Rift virtual reality headset from video game maker ZeniMax Media Inc., which claimed $6 billion in damages? The jury rejected ZeniMax's allegations about trade secret theft and unfair competition—in many ways, the heart of the case put forward by ZeniMax counsel from Skadden led by P. Anthony Sammi and co-counsel from Haynes and Boone. But in a “Jurors do the darndest things” move, the nine members awarded ZeniMax $250 million for “ false designation ,” a trademark violation. Wilkinson told me at the time that she anticipated making a strong argument to set the award aside in a motion for judgment notwithstanding the verdict. ZeniMax lawyers “never even said the word 'false designation,'” she said, nor did the plaintiffs present damages evidence about it. Sure enough, that's just what happened. “Plaintiffs simply did not present any evidence establishing they suffered actual damages as a result of defendants' unauthorized use of their mark in the promotional items,” Kinkeade wrote in striking the award. He did let stand the rest of the verdict—$50 million for copyright infringement, and $200 million for violating a non-disclosure agreement. Both sides promptly entered notices of appeal. |

Slippery When Wet

The outcome of the water war between Florida and Georgia was even more unpredictable. Last year, it seemed like Florida, represented by Latham & Watkins, would be left high and dry. In 2014, the U.S. Supreme Court agreed to hear Florida's lawsuit against Georgia—a rare original jurisdiction case for the high court—and appointed Ralph Lancaster Jr. of Pierce Atwood to be special master. He held a six-week “evidentiary hearing”—similar to a bench trial—to consider each state's claim to the use of water in the Apalachicola-Chattahoochee-Flint River Basin. Florida wanted to cap Georgia's water use, arguing that it needed sufficient downstream flow to support its river ecosystems. Georgia countered that it needed the water for the Atlanta metropolitan region and farmers to the south. One wrinkle: The Army Corps of Engineers, which through its system of dams ultimately controls the water flow, declined to waive sovereign immunity and get dragged into the case. In a 137-page report issued on February 14, 2017, the special master sided with Georgia, which was represented by a 20-lawyer team from Kirkland led by Craig Primis, along with partners K. Winn Allen and Devora Allon. “Without the ability to bind the Corps, I am not persuaded that the court can assure Florida the relief it seeks,” Lancaster wrote—a ruling that Primis at the time said reflected how the team “framed the case from the outset …We continued to press this issue of the central role of the Army Corps.” But rather than rubber stamp Lancaster's findings, the Supreme Court opted for oral argument. Latham partner Gregory Garre, a former U.S. solicitor general, argued for Florida, which was also represented by partners Philip Perry, Jamie Wine, Abid Qureshi, Claudia O'Brien, and Paul Singarella. On June 27, the high court threw Florida a lifeline and remanded the case to the special master. In a 5-4 decision, Justice Stephen Breyer writing for the majority ruled that Lancaster “applied too strict a standard” and “put the cart before the horse” when he determined that the court wouldn't be able to come up with workable decree unless the Army Corps was a party in the case. If nothing else, the ruling was a refreshing reminder that the justices don't always vote in ideological lockstep. The dissenters were an unlikely quartet: Clarence Thomas, Samuel Alito, Neil Gorsuch—and Elena Kagan. |

This Fight Is Getting Hairy

There's a big tangle in another case I recently covered —an IP fight over breakthrough hair dye technology. Tiny startup Olaplex, represented by a team from Quinn Emanuel Urquhart & Sullivan, claimed industry giant L'Oréal, represented by Paul Hastings, was infringing its patent for a process for bleaching hair without damaging it. Quinn Emanuel partner Joseph Paunovich spun a compelling David-and-Goliath story about how his client literally invented the product working out of a garage. On June 21, Paunovich appeared before U.S. District Judge Sherry Fallon in Delaware to argue Olaplex deserved a preliminary injunction to stop L'Oréal from selling competing products. Not so fast, argued L'Oréal's team from Paul Hastings—Dennis Ellis, Katherine Murray, Adam Reich, Naveen Modi, Joseph Palys, Daniel Zeilberger and Scott Peachman, and Frederick Cottrell III, Jeffrey Moyer and Katharine Mowery of Richards Layton & Finger. They warned the court that Olaplex's patent was “more likely than not” to be invalidated by the Patent Trial and Appeal Board. They were right. On June 27, the PTAB found claim 1 of the key patent at issue (as well as claims 2-8 and 10) unpatentable. “As such, plaintiffs can no longer have a good faith basis to maintain their motion,” the L'Oréal lawyers wrote. Still, the Olaplex team isn't giving up. In a letter to the judge on June 28, they wrote that their client “intends to vigorously appeal” the PTAB decision to the U.S. Court of Appeals for the Federal Circuit, that the board's ruling isn't binding on the court, and “is certainly not dispositive of Olaplex's motion for preliminary injunction.” In other words, this game of “Chutes and Ladders” isn't over yet. |

What I'm Reading

From Boom to Bust, Big Law CFPB Practices Tank Under Trump Great for the clients. For the lawyers, not so much. Labaton Calls Report Railing Against Lawyers' Conduct in State Street Case 'Unmoored' The report recommends Labaton Sucharow return as much as $8.1 million of its share of a $75 million fee award to the class. Countdown to the Nomination: Who Will Fill Kennedy's Seat? A look at who is in contention, what will become of Kennedy's clerks and other Kennedy headlines from the National Law Journal. LGBT Workplace Cases Arrive at SCOTUS as Kennedy Punches Out Despite progress in the courts and from the business community, sweeping federal protection against discrimination for gay and lesbian workers remains unclear. Appeals Court Shoots Down $2.4B Whistleblower Suit Against Citi The court rebuffed an Indiana University economics professor-turned-whistleblower, ruling that his allegations that Citigroup underpaid its taxes are in the public domain—and thus, his suit isn't justified. Six White & Case IP Partners Join Fenwick in New York Fenwick managing partner Rodger Cole said the team is “known as one of the most successful IP litigation groups in the country.”