The $4 billion Medical Data Breach Case That Lost It’s Way

By Nicolas Terry

Sutter Health v. Superior Court, 2014 WL 3589699 (Cal. App. 2014), is a medical data breach class action case that raises questions beyond the specifics of the Californian Confidentiality of Medical Information Act.

The stakes were high in Sutter — under the California statute medical data breach claims trigger (or should trigger!) nominal damages at $1000 per patient. Here four million records were stolen.

Plaintiffs’ first argued the defendant breached a section prohibiting unconsented-to disclosure. The not unreasonable response from the court was that this provision required an affirmative act of disclosure by the defendant which was not satisfied by a theft.

A second statutory provision argued by the plaintiffs looked like a winner. This section provided, “Every provider of health care … who creates, maintains, preserves, stores, abandons, destroys, or disposes of medical information shall do so in a manner that preserves the confidentiality of the information contained therein.” Continue reading

A Mixed Message on Obamacare from Two Federal Circuits

By Greg Curfman and Holly Fernandez Lynch

It was as if lightning had struck twice in the same place.

On Tuesday two pivotal federal circuit court opinions that could dramatically impact the future of Obamacare were unexpectedly issued within hours of each other. And what’s more, the two opinions reached opposite conclusions on the same question, setting the stage for further appeals and possible Supreme Court review, potentially bringing the Affordable Care Act (ACA) before the high court for the third time since its passage.

At issue in both circuit court cases was the legality of providing subsidies in the form of Internal Revenue Service tax credits for the purchase of health insurance on the federal exchange (Healthcare.gov).

In a decision that stunned Obamacare supporters–but elated opponents–a three-judge panel of the Federal Appeals Court for the DC Circuit ruled in Halbig v. Burwell that the purchase of health insurance on the federal exchange may not be subsidized by IRS tax exemptions. This judgment would leave millions of Americans with earnings between 133% and 400% of the federal poverty level without affordable health insurance, and it would also threaten the viability of the employer mandate.

In contrast, in a unanimous (3-0) opinion in a nearly identical case, King v. Burwell, the Federal Appeals Court for the Fourth Circuit in Richmond, VA, came to the opposite conclusion.

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Don’t Buy the Cooperative-Federalism-Makes-Halbig-Logical-Argument

By Abbe Gluck

Cross-posted at Balkinization and Election Law Blog

I had hope to take a day off blogging about Halbig and King (the ObamaCare Subsidies cases), but I cannot allow another new, and inaccurate, narrative about ObamaCare to take told. Over at Volokh, Ilya Somin argues that the holding in Halbig is not absurd because Congress uses statutory schemes all the time that try to incentivize states to administer federal law (and penalize them if they don’t).  It is true we see schemes like that all the time–Medicaid a prime example–but the insurance exchange design at issue in these cases is NOT one of them.  This federalism argument was made before the D.C. Circuit and even Judge Griffith didn’t buy it in his ruling for the challengers.  I tried to dispel this myth back in March, when I wrote the following on Balkanization. As I said there, this isn’t Medicaid—it’s the Clean Air Act.

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Pharmaceutical Pricing– The Story That Just Keeps Going

By Bob Bohrer

Cross-post from Pharmaceutical Policy

After last week’s foray into patents and pharmaceutical policy, which is perhaps the most technical and specialized area of pharmaceutical policy, I will return to the never-ending story of pharmaceutical prices and the controversy over Sovaldi, Gilead’s break-through Hepatitis C drug. Sovaldi has a “sticker price” of $84,000 for a 12-week course of treatment, at the end of which 90% or more of patients would be expected to be cured. Since Sovaldi is a pill that is given once a day, the 12-weeks of treatment means that there are 84 daily doses. The math is easy, even if the price, unlike the pill, is hard to swallow–$1,000 per pill. The drug has been a huge financial success for Gilead, which reported $2.274 billion in sales in just the first quarter of 2014.   However, the backlash has been equally huge. In a rare display of bipartisanship in Washington, Senator Ron Wyden (D.-Ore), the Chair of the Senate Finance Committee and Senator Chuck Grassley (R.-Iowa), the Ranking Member of the Finance Committee, sent a demand for information concerning the development costs of Sovaldi and Gilead’s pricing decision. However, even more than the investigation by two senior senators, the impetus for today’s post came from the blog RxObserver, which featured a post entitled Sovaldi: A Poster Child for Predatory Pricing [sic]. Before discussing the epithet “predatory pricing,” the perspective of RxObserver requires a bit of explanation. RxObserver is a site that primarily provides the views of pharmaceutical benefit managers (PBMs), or as the blog itself states its purpose: “the Clearinghouse of the Future for Pharmacy Benefits.” It is, in general, a very high-quality blog, with an editorial staff composed primarily of well-recognized academic and government experts in health care policy. I regularly read it and find it useful, although I was taken aback by that “predatory” epithet. Continue reading

Obama Administration to Revise Contraceptives Coverage Accommodation

In response to the SCOTUS decision granting Wheaton College a preliminary injunction against having to comply with the terms of the HHS accommodation available to non-profit religious organizations who object to covering contraceptives for their employees (i.e., submitting a form to their insurance providers), the Obama Administration has announced that it will revise the terms of that accommodation. Instead of requiring objecting employers to provide the form and notice to insurers or third party administrators of self-insured health plans so that they can jump in to provide free coverage directly to employees, HHS will issue new regulations in short order, the details of which remain to be worked out, but will likely allow nonprofit institutions to write a letter stating their objections, rather than filling out the form (see the WSJ story here). This will leave the government to make sure employees are not left without contraceptives coverage.

I may be oversimplifying things, but I think this extended accommodation really isn’t such a big deal.  It seems to just add the government in as a middleman between the objecting employer and the insurer or third party administrator that was responsible for providing coverage under the original accommodation.  In other words, before, nonprofit religious employers with an objection had to fill out the form and give it directly to their insurers; after the modification, those employers could just let the government know, and presumably the government will notify their insurers.  A bit more bureaucracy, but shouldn’t be too big of a problem – probably just a drop in the bucket of the massive ACA bureaucracy, and potentially unnoticeable by the women seeking free contraceptives.  That is unless the employers claim that even this approach leaves them complicit in violation of their religious beliefs.

Since SCOTUS’s substantial burden test as applied in Hobby Lobby focused on the hefty fines for noncompliance, rather than the extent to which the employers’ religious beliefs were directly v. indirectly burdened, the complicity point is an important one to keep an eye on.  Will religious employers be satisfied with simply adding another link to the causal chain?  Perhaps (and I hope).  Technically, all they would be asked to do is announce to the world that they have a religious objection.  What the government does with that information is beyond their control.  If this works out, the revised accommodation could also be extended to the closely held for-profit corporations with religious objections to contraceptives coverage that SCOTUS determined could not be forced to comply with the mandate, such that their employees too could retain access.

So let’s see what HHS can come up with.  Haters gonna hate, as they say, so I’m sure there will be more litigation on this, but hopefully we’re nearing a solution – and I think a good compromise.  The bigger issue will be dealing with all those other services that must be included as essential benefits or preventive services to which religious employers may object, and to which insurers are likely to object to providing free coverage.  But let’s see if the ACA lives to die another day after Halbig and King.

When Should you Be Able to Subpoena Clinical Trial Data? “Clinical Trials and the Right to Remain Silent” in JAMA Internal Medicine

Should litigants in products liability or other litigation be able to subpoena data from clinical trials to help prove their case? Does it matter whether the clinical trial is ongoing, finished recruiting but still analyzing data, or published? Michelle Mello and I have an invited commentary on this issue in JAMA Internal Medicine “Clinical Trials and the Right to Remain Silent” with our analysis and recommendations. We are discussing a real case from Yale where a subpoena was sought for data from a placebo-controlled trial of pioglitazone conducted there, where the person seeking the data had sued the manufacturer and believed she had been injured by pioglitazone but was not a clinical trial participant. In the same issue of JAMA IM, Yale gives its own account about how it handled the case here.  Dr. Kernan (the investigator) and I also have a nice interview podcast on the issue

The ObamaCare Subsidies Rulings–and the D.C. Circuit’s Disappointing Misreading of the ACA

By Abbe R. Gluck

As most readers know by now, two federal appeals courts on Tuesday reached the opposite conclusions about the validity of the critical financial subsidies on the ACA’s federal health insurance exchanges. The Fourth Circuit in Virginia upheld the subsidies—indicating the government had the better argument, but regardless applying the longstanding rule that when a statute is not clear, courts defer to the agency administering the statute (in this case, the IRS). The D.C. Circuit, however, ruled the other way, reading one provision of this massive and complex federal law out of context. That opinion not only misinterprets the statute—with enormous practical consequences—but also does a deep disservice to conservative jurists and lawyers who have spent the last 30 years arguing that text-based interpretation is sophisticated, not literalistic, and serves democracy.

The stakes are enormous: If the D.C. Circuit’s opinion ultimately carries the day, more than $36 billion dollars in financial relief will be denied to the approximately 7 million people expected to be insured with the help of this financial assistance. It also places Republicans in a real dilemma, especially as the election cycle heats up: The result, if the ruling stands, would be massive red-state/blue-state disparity, as millions of middle-class Americans are deprived in red states of access to medical care, because it is mostly the red states whose subsidies are now at issue.

As I wrote yesterday on Balkinzation, the opinion is terribly disappointing from a statutory interpretation perspective. It relies in part on irrelevant legislative history (from the HELP committee, whose bill wasn’t even the basis for these provisions–the Finance committee’s was) and gets it wrong anyway (as I argued here); it bends over backwards to come up with reasons why Congress might have intended this result (which we all know it certainly did not); and it attaches far too much significance to a line in the statute that expressly deems exchanges in the territories to be state exchanges and does not replicate the special deeming language for the federal exchanges. The territories language is boilerplate language used by Congress when talking about territories in statutes even beyond the ACA, and should have been attached no significance here.

For a more detailed legal and political analysis, check out my op-ed on the cases.

How En Banc Review Would Work in Halbig

This morning the D.C. Circuit ruled that the ACA “unambiguously restricts the section 36B subsidy to insurance purchased on Exchanges “established by the State.”  (See opinion here.)  In other words, the court ruled that the subsidies that make insurance on federally-operated exchanges affordable are illegal.

In the news and blog coverage this has already received, the possibility of this decision being reversed “en banc” has been mentioned.  (See here, here, and here for news, here and here for blogs.  For other blog reading on the opinion itself, see here and here.)  Having written a bit elsewhere about the logistics of the DC Circuit (see here), I thought I would chime in with specifics about exactly how the decision whether to rehear the case en banc, and en banc rehearing, would work.

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When you Can Shed Blood for your Country but not Donate it

Portsmouth, Va. (Jan. 5, 2005) - A hospital corpsman assigned to USS Bataan (LHD 5), donates a pint of blood during the blood drive held by the Blood Donor Team. The Blood Donor Team stationed at Portsmouth Naval Hospital visits multiple commands throughout the area in efforts to boost the blood supply for the U.S. Armed Forces around the world. U.S. Navy photo by Photographer’s Mate 3rd Class Jeremy L. Grisham (Image from Wikimedia Commons).

A hospital corpsman donates a pint of blood. U.S. Navy photo by Photographer’s Mate 3rd Class Jeremy L. Grisham (Image from Wikimedia Commons).

I have a new article in JAMA this week, “Reconsideration of the Lifetime Ban on Blood Donation by Men Who Have Sex With Men,” co-authored with my former student Jeremy Feigenbaum and my frequent co-author Dr. Eli Adashi (former Dean of Medicine at Brown). In the article we show that FDA’s current policy is morally, ethically, and legally problematic. We are out of step with our peer countries (including the UK, Canada, South Africa) who do delay when men who have sex with men can give blood but not for a lifetime, the way the U.S. does. It is remarkable that if you have sex with a female prostitute or a woman who is HIV+ you face only a 12-month deferral in the U.S. but if you have had sex with a man, just once, ever, no matter his HIV status you face a lifetime delay.

We are in a world where the Defense of Marriage Act was struck down as unconstitutional, where Don’t Ask Don’t Tell has been struck down so that gay men and lesbians can proudly serve their country and shed blood (their own, others) on the battlefield. It is time to change a 30-yr old policy prohibiting them giving blood. What’s more, given the the Windsor decision and the recent Ninth Circuit application of heightened scrutiny to the exclusion of gay jurors for jury duty, we think there are serious constitutional questions about FDA’s policy as well.

My preferred approach, and the one I think FDA should move towards, is the Italian “test and assess” which has no blanket classification of MSM but instead does individualized risk assessment. As we describe in our paper thus far has not increased the risk of HIV+ blood making its way into the blood supply.

The Williams Institute in 2010 estimated that 6% of men had at least once had sex with another man, meaning there are potentially 7.2 million men who could become blood donors but are excluded by FDA’s rule. We owe it not only to these men, but also to all those who could benefit from their blood donations to revisit this rule.

Update and Thoughts on Lawsuit Over Medicare Hearing Backlog

Several months ago, I promised to post my thoughts on the viability of the American Hospital Association’s threatened lawsuit against the Secretary of Health and Human Services challenging the growing backlog of coverage appeals.  (See my post here).  That issue has become timely, because the AHA and several providers filed suit in May in the District of Columbia, and a few days ago filed a motion for summary judgment.   (See here).  There has been some coverage of the suit.  (See here and here.)  In short, their argument is that the statute says that a hearing must be held in 90 days and Medicare officials admit that the plaintiffs will not get a hearing for years, so therefore the court should order “mandamus,” forcing compliance with the 90 day deadline.

When I was in practice before moving to academia, I represented the Secretary in cases like this, so keep in mind my view might be biased.  But the government’s response to the complaint is due (by my calculation) Monday, July 28, so I wanted to offer my quick reactions about the case and what sort of response we might hear from the government.  I’ve just read over the AHA’s motion for summary judgment and I think that in a case like this, with an admitted violation of a statutory requirement, you have to start with the presumption that things could go bad for the government.  But with that said, I don’t think that the government’s case is as gloomy as it might at first appear, so this could be an interesting case to watch going forward.

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Holly Fernandez Lynch: After Hobby Lobby, ACA Exceptions May Become The Rule

9.25.12StaffHLS0025In a video interview with Reuters in conjunction with Harvard School of Public Heath’s Health Reform Watch, Petrie-Flom Center Executive Director Holly Fernandez Lynch analyzes the impact of the Supreme Court’s recent decisions in Hobby Lobby and Wheaton College.

To watch the interview please click here.

Michelle Meyer: Misjudgements Will Drive Social Trials Underground

Michelle Meyer has a new piece in Nature – an open letter on the Facebook study signed by a group of bioethicists (including PFC’s Executive Director Holly Fernandez Lynch) in which she argues that a Facebook study that manipulated news feeds was not definitively unethical and offered valuable insight into social behavior.

From the piece:

“Some bioethicists have said that Facebook’s recent study of user behavior is “scandalous”, “violates accepted research ethics” and “should never have been performed”. I write with 5 co-authors, on behalf of 27 other ethicists, to disagree with these sweeping condemnations (see go.nature.com/XI7szI).

We are making this stand because the vitriolic criticism of this study could have a chilling effect on valuable research. Worse, it perpetuates the presumption that research is dangerous.”

Read the full article.

Petrie-Flom Center Launches New Book on Human Subjects Research Regulation

Human Subjects Research Regulations Book CoverThe Petrie-Flom Center is pleased to announce publication of Human Subjects Research Regulation: Perspectives on the Future (MIT Press 2014), co-edited by Petrie-Flom Center Faculty Director, I. Glenn Cohen, and Executive Director, Holly Fernandez Lynch.  This edited volume stems from the Center’s 2012 annual conference, which brought together leading experts in a conversation about whether and how the current system of human subjects research regulation in the U.S. ought to change to fit evolving trends, fill substantial gaps, and respond to identified shortcomings.

The book is currently available from MIT Press and Amazon, in hardcover and paperback.  We will be hosting a book discussion at Harvard Law School on October 22, and in Baltimore on December 5 at Public Responsibility in Medicine and Research (PRIMR)’s annual Advancing Ethical Research Conference.  Details will be announced shortly.

 From the book jacket:

 The current framework for the regulation of human subjects research emerged largely in reaction to the horrors of Nazi human experimentation, revealed at the Nuremburg trials, and the Tuskegee syphilis study, conducted by U.S. government researchers from 1932 to 1972. This framework, combining elements of paternalism with efforts to preserve individual autonomy, has remained fundamentally unchanged for decades. Yet, as this book documents, it has significant flaws—including its potential to burden important research, overprotect some subjects and inadequately protect others, generate inconsistent results, and lag behind developments in how research is conducted. Invigorated by the U.S. government’s first steps toward change in over twenty years, Human Subjects Research Regulation brings together the leading thinkers in this field from ethics, law, medicine, and public policy to discuss how to make the system better. The result is a collection of novel ideas—some incremental, some radical—for the future of research oversight and human subject protection.

After reviewing the history of U.S. research regulations, the contributors consider such topics as risk-based regulation; research involving vulnerable populations (including military personnel, children, and prisoners); the relationships among subjects, investigators, sponsors, and institutional review boards; privacy, especially regarding biospecimens and tissue banking; and the possibility of fundamental paradigm shifts.

Contributors
 Adam Braddock, Alexander Morgan Capron, Ellen Wright Clayton, I. Glenn Cohen, Susan Cox, Amy L. Davis, Hilary Eckert, Barbara J. Evans, Nir Eyal, Heidi Li Feldman, Benjamin Fombonne, Elisa A. Hurley, Ana S. Iltis, Gail H. Javitt, Greg Koski, Nicole Lockhart, Holly Fernandez Lynch, Michael McDonald, Michelle N. Meyer, Osagie K. Obasogie, Efthimios Parasidis, Govind Persad, Rosamond Rhodes, Suzanne M. Rivera, Zachary M. Schrag, Seema K. Shah, Jeffrey Skopek, Laura Stark, Patrick Taylor, Anne Townsend, Carol Weil, Brett A. Williams, Leslie E. Wolf

For a more information, including the full table of contents, check out the book on the MIT Press website

Introducing New Blogger Robert Field

FieldRobert Field is joining Bill of Health as a regular contributor.

Robert I. Field, JD, MPH, PhD is a nationally known expert in health care regulation and its role in implementing public policy.  He holds a joint appointment as professor of law at the School of Law and professor of health management and policy at the School of Public Health at Drexel University.  He is also a lecturer in health care management at the Wharton School of the University of Pennsylvania and a senior fellow of Penn’s Leonard Davis Institute of Health Economics.

Professor Field is the author of Mother of Invention: How the Government Created Free-Market Health Care, just released by Oxford University Press.  It presents an historical overview of four key health care sectors to demonstrate the underlying importance of government programs in creating and maintaining the health care system and to place health reform in the context of an ongoing evolutionary process.  He is also the author of Health Care Regulation in America: Complexity, Confrontation and Compromise, a comprehensive overview of health care regulation, also published by Oxford University Press.

Professor Field’s recent scholarly work has focused on health reform and is effects on the structure of the health care system, ethical issues in vaccines, and policy implications of genetic databases.  His work has appeared in the University of Pennsylvania Law Review, the Villanova Law Review, the Drexel Law Review, Health Affairs, Vaccine, and the Journal of Clinical Oncology.  He writes a blog for the Philadelphia Inquirer on health policy entitled the Field Clinic, which features 14 prominent Philadelphia health care leaders as regular contributors.

Professor Field speaks nationally on health care topics. He is frequently quoted in the press, including stories in the New York Times, Wall Street Journal, Washington Post, Boston Globe, Philadelphia Inquirer, and BusinessWeek and has discussed health policy issues on CNN, NPR, ABC, and numerous local television and radio stations.  He has also been a frequent commentator on WHYY, the NPR affiliate in Philadelphia.

Before joining the faculty of Drexel University, Professor Field founded and chaired the Department of Health Policy and Public Health at University of Sciences in Philadelphia, where he was also professor of health policy.  Previously, he led business planning and development for the primary care network of the University of Pennsylvania Health System. He has also conducted health policy research at the Institute of Medicine of the National Academy of Sciences and the Center for Law and Health Sciences at Boston University, practiced health law with the Philadelphia firm of Ballard Spahr, LLP, and directed public policy research for Cigna Corporation.

Professor Field earned a Ph.D. in psychology from Boston University, an M.P.H. from the Harvard School of Public Health, a J.D. from the Columbia Law School, where he was associate editor of the Columbia Journal of Environmental Law, and an A.B. magna cum laude from Harvard College.

Selected Publications

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Art Caplan New Op-Ed: When Does Human Life Begin?

Art Caplan has a new Op-Ed on The Council for Secular Humanism about when human life begin.

From the piece:

“When does human life begin? For those in the “personhood” movement in the United States, there is no doubt about when that happens—it is at conception, when the sperm meets the egg. The personhood movement has gained a foothold among antiabortion activists who are looking to pass laws that define embryos as people with full rights. Personhood advocates aim to outlaw all abortions, along with in vitro fertilization, embryonic stem-cell research, and emergency contraception. Granting embryos personhood would also mean that someone who killed a pregnant woman at any stage in her pregnancy would be at risk of prosecution for a double homicide. And in those states that restrict a woman’s right to utilize a living will if she is pregnant, no living will could apply from the moment of conception..”

Read the full article.

Introducing New Blogger Amanda C. Pustilnik

Amanda C. Pustilnik is joining Bill of Health as a regular contributor.

Pustilnik Amanda C. Pustilnik is an Associate Professor of Law at the University of Maryland School of Law, where she teaches Criminal Law, Evidence, and Law & Neuroscience. Her current research includes work on models of mind in criminal law, evidentiary issues presented by neuroscientific work on memory, and the role of pain in different legal domains. Prior to joining the University of Maryland, she was a Climenko fellow and lecturer on law at Harvard Law School. Before entering the legal academy, she practiced litigation with Covington & Burling and with Sullivan & Cromwell, where she focused on white collar criminal matters. Prof. Pustilnik also clerked for the Hon. Jose A. Cabranes on the United States Court of Appeals for the Second Circuit. She graduated Yale Law School and Harvard College, and has been a visiting scholar at the University of Cambridge, Emmanuel College, in the History and Philosophy of Science department. Prof. Pustilnik has also worked at McKinsey & Company as a management consultant and is a member of the board of directors of the John Harvard Scholarships. During Spring 2015, Professor Pustilnik will be serving as a Senior Fellow in Law & Neuroscience of the Center for Law, Brain & Behavior at Massachusetts General Hospital.  This Center is a collaboration between Massachusetts General Hospital and Harvard Law School.

Selected Publications
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Suits for nursing-home neglects sound in general negligence rather than medical malpractice, and are consequently not subject to damage caps

By Alex Stein

The West Virginia Supreme Court has recently delivered a super-important malpractice decision, Manor Care, Inc. v. Douglas, — S.E.2d —- (W. Va. 2014), holding that suits for nursing-home neglects sound in general negligence, rather than medical malpractice, and are consequently not subject to damage caps. This decision is very well reasoned and I expect it to be followed in other states that cap medical-malpractice damages.  Continue reading

New Medical Tourism Website with Info for Patients

My good friends and co-authors at Simon Fraser University have a nice new website aimed at Canadians (though useful for people from all countries) considering using medical tourism about what to think about, questions to ask, steps to take, etc (Full Disclosure: I participated in a feedback session on the website). Here is a story about the website in the National Post, and here is the website itself.

Limelight v. Akamai: Implications for Medical Method Patents

By Rachel Sachs

Last month, as it wrapped up the 2014 Term, the Supreme Court decided a patent law case that could have a major impact on method patents in the medical arena. No, I’m not talking about Alice Corp. v. CLS Bank, the most Rorschach-like of the Term’s many patent opinions. I’m talking about Limelight Networks v. Akamai Technologies, Inc., in which the Supreme Court unanimously reversed the Federal Circuit’s ruling on the scintillating question of divided infringement under 35 U.S.C. § 271(b).

In Limelight, a splintered en banc decision, a majority of the Federal Circuit had overturned prior case law in ruling that liability for induced infringement of a method claim under § 271(b) was possible where no single entity had performed all the steps of that claim, but where those steps were divided between two or more parties, one of whom had induced the other(s) to infringe. (Previously, various opinions had held that induced infringement under § 271(b) required a single actor, just like direct infringement under current § 271(a) precedent.) In a unanimous opinion by Justice Alito, the Supreme Court reversed, essentially reinstating the single entity rule by holding that direct infringement under § 271(a) is required for inducement liability under § 271(b). Continue reading

Worth Reading This Week

By Nicolas Terry