Litigation

6th Circuit Aligns With 7th Circuit on Data Breach Standing Issue

November 13, 2016
Class Action, Cyber Security, Data, Litigation, Privacy

John Biglow, MJLST Managing Editor

To bring a suit in any judicial court in the United States, an individual, or group of individuals must satisfy Article III’s standing requirement. As recently clarified by the Supreme Court in Spokeo, Inc. v. Robins, 136 S. Ct. 1540 (2016), to meet this requirement, a “plaintiff must have (1) suffered an injury in fact, (2) that is fairly traceable to the challenged conduct of the defendant, and (3) that is likely to be redressed by a favorable judicial decision.” Id. at 1547. When cases involving data breaches have entered the Federal Circuit courts, there has been some disagreement as to whether the risk of future harm from data breaches, and the costs spent to prevent this harm, qualify as “injuries in fact,” Article III’s first prong.

Last Spring, I wrote a note concerning Article III standing in data breach litigation in which I highlighted the Federal Circuit split on the issue and argued that the reasoning of the 7th Circuit court in Remijas v. Neiman Marcus Group, LLC, 794 F.3d 688 (7th Cir. 2015) was superior to its sister courts and made for better law. In Remijas, the plaintiffs were a class of individuals whose credit and debit card information had been stolen when Neiman Marcus Group, LLC experienced a data breach. A portion of the class had not yet experienced any fraudulent charges on their accounts and were asserting Article III standing based upon the risk of future harm and the time and money spent mitigating this risk. In holding that these Plaintiffs had satisfied Article III’s injury in fact requirement, the court made a critical inference that when a hacker steals a consumer’s private information, “[p]resumably, the purpose of the hack is, sooner or later, to make fraudulent charges or assume [the] consumers’ identit[y].” Id. at 693.

This inference is in stark contrast to the line of reasoning engaged in by the 3rd Circuit in Reilly v. Ceridian Corp. 664 F.3d 38 (3rd Cir. 2011). The facts of Reilly were similar to Remijas, except that in Reilly, Ceridian Corp., the company that had experienced the data breach, stated only that their firewall had been breached and that their customers’ information may have been stolen. In my note, mentioned supra, I argued that this difference in facts was not enough to wholly distinguish the two cases and overcome a circuit split, in part due to the Reilly court’s characterization of the risk of future harm. The Reilly court found that the risk of misuse of information was highly attenuated, reasoning that whether the Plaintiffs experience an injury depended on a series of “if’s,” including “if the hacker read, copied, and understood the hacked information, and if the hacker attempts to use the information, and if he does so successfully.” Id. at 43 (emphasis in original).

Often in the law, we are faced with an imperfect or incomplete set of facts. Any time an individual’s intent is an issue in a case, this is a certainty. When faced with these situations, lawyers have long utilized inferences to differentiate between more likely and less likely scenarios for what the missing facts are. In the case of a data breach, it is almost always the case that both parties will have little to no knowledge of the intent, capabilities, or plans of the hacker. However, it seems to me that there is room for reasonable inferences to be made about these facts. When a hacker is sophisticated enough to breach a company’s defenses and access data, it makes sense to assume they are sophisticated enough to utilize that data. Further, because there is risk involved in executing a data breach, because it is illegal, it makes sense to assume that the hacker seeks to gain from this act. Thus, as between the Reilly and Remijas courts’ characterizations of the likelihood of misuse of data, it seemed to me that the better rule is to assume that the hacker is able to utilize the data and plans to do so in the future. Further, if there are facts tending to show that this inference is wrong, it is much more likely at the pleading stage that the Defendant Corporation would be in possession of this information than the Plaintiff(s).

Since Remijas, there have been two data breach cases that have made it to the Federal Circuit courts on the issue of Article III standing. In Lewert v. P.F. Chang’s China Bistro, Inc., 819 F.3d 963, 965 (7th Cir. 2016), the court unsurprisingly followed the precedent set forth in their recent case, Remijas, in finding that Article III standing was properly alleged. In Galaria v. Nationwide Mut. Ins. Co., a recent 6th Circuit case, the court had to make an Article III ruling without the constraint of an earlier ruling in their Circuit, leaving the court open to choose what rule and reasoning to apply. Galaria v. Nationwide Mut. Ins. Co., No. 15-3386, 2016 WL 4728027, (6th Cir. Sept. 12, 2016). In the case, the Plaintiffs alleged, among other claims, negligence and bailment; these claims were dismissed by the district court for lack of Article III standing. In alleging that they had suffered an injury in fact, the Plaintiffs alleged “a substantial risk of harm, coupled with reasonably incurred mitigation costs.” Id. at 3. In holding that this was sufficient to establish Article III standing at the pleading stage, the Galaria court found the inference made by the Remijas court to be persuasive, stating that “[w]here a data breach targets personal information, a reasonable inference can be drawn that the hackers will use the victims’ data for the fraudulent purposes alleged in Plaintiffs’ complaints.” Moving forward, it will be intriguing to watch how Federal Circuits who have not faced this issue, like the 6th circuit before deciding Galaria, rule on this issue and whether, if the 3rd Circuit keeps its current reasoning, this issue will eventually make its way to the Supreme Court of the United States.

Solving the “Patent Troll” Problem

October 21, 2016
Litigation, Patents

Travis Waller, MJLST Managing Editor

“Dovre: What’s the distinction between troll and man?

Peer: So far as I know, there is none, by my score.

The big want to roast you, the small ones to scratch you; —

same as with us, if they dare but catch you.”

Henrik Ibsen, Peer Gynt, Act II, ll. 903–06 (John Northam, trans., 2007) (1876).

In recent events, internet “trolling” has become something of a hot issue. This discussion will not address internet trolling (even tangentially), but will instead endeavor to shed light upon a different, often craftier member of troll-kind: the patent troll.

To begin, what is a “patent troll?” The term has taken a somewhat expansive usage since its original appearance in a 1990’s educational video released to corporations. Today, the term can refer to a broad range of practices, but most commonly is understood as the practice of an individual or corporation (sometimes with a large patent portfolio) that abusively uses the threat of enforcement litigation for overly broad, and probably invalid, patents that it has acquired to essentially extort licensing agreements from companies (often quite small) that do not necessarily have the resources to devote to patent litigation, and are likely not even infringing on the “trolls” patented invention to begin with.

Since that was a mouthful, let me provide an example:

Company A (the “troll”) purchases a patent on invention A3;

Company B independently creates invention ABC123, and acquires a patent;

Company A claims that patent A3 reads on patent ABC123, because it claims elements A3 are contained in Company B’s patent ABC123;

Company A sends a letter to Company B demanding that it licenses patent A3, or will face a “prompt” litigation action.

In this example, Company B, fearing that Company A may actually be within it’s legal rights, agrees to pay Company A the fee to license patent A3 for fear of Company A filing expensive patent litigation against Company B, even though a court would almost certainly find that invention ABC123 is nothing like patent A3, and therefore that Company B is not infringing on Company A’s rights (for a few “real world” examples, as well as a dash of technology industry gossip, see this article by Business Insider).

The question arising from situations like this that many courts and lawmakers have hemmed and hawed over is this: who is right? On the one hand, federal patent law strives to protect the rights of the legitimate inventor, and incentivize the very “progress of the useful arts”. On the other hand, how can the law protect companies and individuals like Company B from being bullied by the aggressive assertion of patent rights by companies like Company A?

The answers have manifested themselves mostly through federal and state law making, starting first with the enactment of the Lahey-Smith America Invents Act (the “AIA” for those in the know). This Act modified existing US patent law to allow for a process called “post-grant opposition,” which essentially allows individuals to challenge the validity of a patent after it has been issued by the USPTO, but without having to set foot in a courtroom (theoretically creating a much cheaper option than trial for individuals seeking to invalidate broad patents) (for more info on the process, see here).

The AIA is still relatively new (enacted in 2012), and it is hard to say for certain how this procedure has affected the act of “patent trolling”, however some have made the claim that the AIA has not had the effect of “starving patent trolls” that the lawmakers hoped it would (see here for more discussion on this point).

As such, individual states have taken the fore in this fight against the patent troll, and it is often the case that state consumer protection agencies make up the front lines, by way of various state unfair trade practice laws. However, many state legislatures have taken a much more targeted strategy, and have begun to arm their agencies with the ability to specifically bring actions against individuals and corporations for the “bad faith assertion of patent rights” (as of 2016, Minnesota became one such state).

This action gives state agencies a huge benefit in targeting “troll-like” behavior in the patent industry, but at what cost? Federal patent law preemption issues aside for right now (and yes, they are out there), how exactly will an agency define what “trolling” is? How will state agencies determine that the assertion of the patent right was “in bad faith?” Moreover, how will this effect an otherwise uniform protection that patent holders have across the US?

These questions, and many more, will no doubt need to be addressed by states adopting the “bad faith assertion of patent rights” statutes. For now, since I don’t have an answer off-hand to this incredibly intricate legal and policy question, I will simply eco the words of Henrik Ibsen: “what is the distinction between troll and man?” What is the distinction between patent troll, and legitimate inventor? And finally, are these definitions really something we want to leave in the hands of state agencies, which may or may not be relatively unsophisticated in the intricacies of federal patent law?

My initial impression is one of skepticism, but if the willingness of a great deal of state legislators to adopt such measures can be taken as some indication of a nationwide public demand for a new way to address these issues, maybe this is the start of a conversation that should have happened some time ago.

Halo Electronics v. Pulse Electronics: More Discretion of District Courts in Granting Enhanced Damages

September 25, 2016
Intellectual Property, Litigation, Patents

Tianxiang (Max) Zhou, MJLST Staffer

The recent US Supreme Court case, Halo Electronics v. Pulse Electronics, grants district courts more discretion in determining “enhanced damages.” The previous clear standard of the enhanced damages became murkier after this case and left much room for lower courts to decide what constitutes enhanced damages.

Section 284 of the Patent Act provides that, in a case of infringement, courts “may increase the damages up to three times the amount found or assessed.” Enhanced damages are appropriate only when the patentee proves, by clear and convincing evidence, that the infringer “willfully” infringed the patent. Prior to Halo, courts adopted a bifurcated approach to enhanced damages established in In re Seagate: First, the patentee must show the infringer’s recklessness by clear and convincing evidence, that “the infringer acted despite an objectively high likelihood that its actions constituted infringement of a valid patent.” If the objective standard of recklessness is satisfied, then patentee must demonstrate that the risk was either known or so obvious that it should have been known to the accused infringer.

In Halo, the jury in the district court found a high probability that the infringement was willful. However, the district court refused to grant an enhanced damages based on the two-part test, and found as a matter of law, that the patentee did not prove objective recklessness of the infringer. The Federal Circuit Court affirmed the decision.

However, the Supreme Court reversed the Appeal Court’s decision, and rejected the two-part test set forth in In re Seagate. Specifically, the Supreme Court, citing Octane Fitness LLC v. ICON Heath & Fitness, Inc, found that the test is “unduly rigid, and it impermissibly encumbers the statutory grant of discretion to district courts.” Though rejecting the two-part test, the Supreme Court did not give a clear guideline for lower courts to follow. Halo provides that, “[a]s with any exercise of discretion, courts should continue to take into account the particular circumstances of each case in deciding whether to award damages, and in what amount.” According to the Supreme Court, district courts are “‘to be guided by [the] sound legal principles’ developed over nearly two centuries of application and interpretation of the Patent Act.” Besides, the Supreme Court found that the prior two-part test, which requires a finding of objective recklessness, excludes discretionary punishment of “wanton and malicious pirate” who intentionally infringes another’s patent, and a district may grant enhanced damages even in the absence of a finding such objective recklessness.

Overall, Halo broadened district courts’ discretion in evaluating facts of patent infringement and granting enhanced damages. While the Halo decision will definitely increase the unpredictability of patent infringement lawsuits, it is still unclear whether the broad discretion of district courts will open the gate of flood of enhanced damages. Besides, before we think about the standard of enhanced damages, it is also worthy to consider the policy implications of enhanced damages, and to ask whether and when enhanced damages are appropriate. Anyway, it would be exciting to see a clearer standard of enhanced damages in future cases, or amendments of laws and regulations.

Akamai Techs. v. Limelight Networks: An Expansion of the Scope of Patent Direct Infringement

October 13, 2015
Intellectual Property, Litigation, Patents

Tianxiang (“Max”) Zhou, MJLST Staffer

This August the Federal Circuit Court delivered an en banc opinion of Akamai Techs. v. Limelight Networks, affirming the jury decision awarding $40 million in damages. The per curium opinion provided that the Court “unanimously set forth the law of divided infringement under 35 U.S.C. § 271(a)” and there was substantial evidence “support[ing] the jury’s finding that Limelight directly infringed U.S. Patent No. 6,108,703.” Accordingly, the Federal Circuit reversed the District Court’s grant of Limelight’s motion for judgment of non-infringement as a matter of law.

The issue in this case is whether Limelight should be liable for direct infringement of the patent by inducing consumers to infringe the patent and should thus be jointly and directly liable under 35 U.S.C. §271(a). The Supreme Court held that induced infringement under §271(b) requires a single direct infringer. According to the Supreme Court, Limelight should not be liable as the it only performed some but not all of the infringement steps.

The Federal Circuit expanded the scope of direct infringement and held Limelight liable. The Federal Circuit held that Direct infringement under §271(a) occurs where “all steps of a claimed method are performed by or attributable to a single entity.” According to the Federal Circuit, when there are two or more actors from a joint enterprise, all can be charged with the acts of the other, “rendering each liable for the steps performed by the other as if each is a single actor.” The Court further cited the definition of joint enterprise in Restatement (Second) of Torts and provided four factors in determining whether there is joint enterprise.

The case is important because it set forth the rule that the actors in a joint enterprise can be liable for the other actors. The case prevented a possible way to dodge the direct infringement liability by inducing the consumers to perform some of actions of infringement.

I’m Not a Doctor, But…: E-Health Records Issues for Attorneys

March 20, 2015
Cyber Security, Healthcare, Healthcare Reform, Intellectual Property, Litigation, Privacy

Ke Huang, MJLST Lead Articles Editor

The Health Information Technology for Economic and Clinical Health Act of 2009 (HITECH Act) generally provides that, by 2015, healthcare providers must comply with the Act’s electronic health record (EHR) benchmarks, or, the government would reduce these providers’ Medicare payments by one percent.

These provisions of the HITECH Act are more than a health policy footnote. Especially for attorneys, the growing use of EHRs raises several legal issues. Indeed, in Volume 10, Issue 1 of the Minnesota Journal of Law, Science & Technology, published six years ago, Kari Bomash analyzes the consequence of EHRs in three legal-related aspects. In Privacy and Public Health in the Information Age, Bomash discusses how a Minnesota Health Records Act amendment relates to: (1) privacy, especially consent of patients, (2) data security (Bomash was almost prescient given the growing security concerns), and (3) data use regulations that affect medical doctors.

Bomash’s discussion is not exhaustive. EHRs also raise legal issues running the gamut of intellectual property, e-discovery, to malpractice. Given that software runs EHRs, IP industry is very much implicated. So much so that some proponents of EHR even support open source. (Another MJLST Article explains the concept of open source.)

E-discovery may be more straightforward. Like other legal parties maintaining electronic stored information, health entities storing EHR must comply with court laws governing discovery.

And malpractice? One doctor suggested in a recent Wall Street Journal op-ed that EHR interferes with a doctor’s quality of care. Since quality of care, or lack thereof, is correlated with malpractice actions, commentators raised the concern that EHR could raise malpractice actions. A 2010 New England Journal of Medicine study addressed this topic but could not provide a conclusive answer.

Even my personal experience with EHRs is one of the reasons that lead me to want to become an attorney. As a child growing up in an immigrant community, I often accompanied adult immigrants, to interpret in contract closings, small-business transactions, and even clinic visits. Helping in those matters sparked my interest in law. In one of the clinic visits, I noticed that an EHR print-out of my female cousin stated that she was male. I explained the error to her.

“I suppose you have to ask them to change it, then,” she said.

I did. I learned from talking to the clinic administrator the EHR software was programmed to recognize female names, and, for names that were ambiguous, as was my cousin’s, the software automatically categorized the patient as male. Even if my cousin’s visit was for an ob-gyn check-up.

Driving Under the Influence: Recent Legal Developments in Cellulosic Ethanol Industry

January 16, 2015
Environment, Food and Agriculture, Litigation

Ke M. Huang, MJLST Lead Articles Editor

As a second-year law student, I met an energy law attorney who told me that sometimes his job felt like mediating between two parents. Two parents butting heads.

The more recent legal developments in the cellulosic ethanol industry since the publication of my student note in the Volume 15, Issue 2 of the Minnesota Journal of Law, Science & Technology echo the words of the attorney I met. In the note–published in Spring 2014 and entitled A Spoonful of Sugarcane Ethanol–I argue that the U.S. should enact tax benefits to spur cellulosic ethanol based on existing Brazilian tax benefits for sugarcane ethanol. Ethanol, or ethyl alcohol, is a fuel fermented from renewable resources. In the case of cellulosic ethanol, the resource is vegetative and yard waste; in the case of sugarcane ethanol, the resource is sugarcane juice.

Unlike the note, which focuses on tax benefits, the recent developments in the cellulosic ethanol industry center on blending mandates, both in the U.S. and Brazil. Under these mandates, motor fuel–which contains mostly gasoline–must be blended with a certain amount of ethanol. The U.S. motor fuel mandate is the Renewable Fuel Standard (RFS). RFS, which generally requires the petroleum industry to blend in motor fuel specific amounts for cellulosic ethanol, was already subject to litigation in American Petroleum Institute v. EPA, 706 F.3d 474 (D.C. Cir. 2013). However, the concerned industries of that case, primarily the petroleum industry and the cellulosic ethanol industry, continue to disagree. Broadly speaking, as further elaborated in this Bloomberg BNA blog entry, the petroleum industry takes the position that the RFS is unworkable. To much the vexation of the cellulosic ethanol industry. What makes the recent development more interesting is that, since early 2014, the cellulosic ethanol production seemed to have increased. Extending the metaphor of fighting parents, it is as if the ethanol parent continues to grasp the motor fuel teen, a teen that has grown bulkier in size, when the petroleum parent is ready to send the teen off to college.

In Brazil, a similar “family tale” ensues. In late 2014, Brazilian President Dilma Rousseff signed the legislation to increase Brazil’s blending percentage of ethanol from 25% to 27.5%. Still, the semi-public petroleum producer Petrobras expressed concern that, before the change in the mandate can be put in effect, more study is needed. These articles further explain these events (1)(2). As such, in this “family,” the parents are at a deadlock.

On a more serious tone, as I reread my student note, I would like to make two corrections. I apologize for the misspelling of Ms. Ruilin Li’s name on page 1117, and for the missing infra notations on page 11141 (notes 218 to 221).

The Benefits of Juries

October 22, 2014
Litigation

Steven Groschen, MJLST Staff Member

Nearly 180 years ago Alexis de Tocqueville postulated that jury duty was beneficial to those who participated. In an often quoted passage of Democracy in America he stated that “I do not know whether the jury is useful to those who have lawsuits, but I am certain it is highly beneficial to those who judge them.” Since that time many commentators, including the United States Supreme Court, have echoed this belief. Although this position possesses a strong intuitive appeal, it is necessary to ask whether there is any evidentiary basis to support it. Up until recently, the scientific evidence on the effects of serving on a jury was scant. Fortunately for proponents of the jury system, the research of John Gastil is building a scientific basis for the positive effects of jury duty.

One of Gastil’s most extensive studies focused on finding a correlation between serving on a jury and subsequent voting patterns. For purposes of the study, Gastil and his colleagues compiled a large sample of jurors from various counties–8 total–across the United States. Next, the research team gathered voting records for jurors in the sample–examining each juror’s voting patterns five years prior and subsequent to serving on a jury. Finally, regression analyses were performed on the data and some interesting effects were discovered. Individuals who were infrequent voters prior to serving as a juror on a criminal trial were 4-7% more likely to vote after serving. Interestingly, this effect held for the group of previously infrequent voters regardless of the verdict reached in the criminal trials they served on. Further, for hung juries the effect held and was even stronger.

Despite these findings, the jury is still out on whether the scientific evidence is substantial enough to support the historically asserted benefits of jury duty. More evidence is certainly needed, however, important policy questions regarding jury duty are already implicated. As researchers begin correlating jury participation with more aspects of civic life, there remains a possibility that negative effects of serving on a jury may be discovered. Would such findings serve as a rationale for modifying the jury selection process in order to preclude those who might be negatively affected? More importantly, do further findings of positive effects suggest more protections are needed during the voir dire process to ensure certain classes are not excluded from serving on a jury and thus receiving those benefits?

The Importance of Appropriate Identification Within Social Networking

November 17, 2013
Litigation, Social Media

by Shishira Kothur, UMN Law Student, MJLST Staff

Social networking has become a prominent form of communication and expression for society. Many people continue to post and blog about their personal lives, believing that they are hidden by separate account names. This supposed anonymity gives a false sense of security, as members of society post and upload incriminating and even embarrassing information about themselves and others. This information, while generally viewed by an individual’s 200 closest friends, is has also become a part of the courtroom.

This unique issue is further explained in Writings on the Wall: The Need for an Authorship-Centric Approach to the Authentication of Social-
Networking Evidence, Volume 13, Issue 1 of the Minnesota Journal of Law, Science and Technology. Professor Ira P. Robbins emphasizes that since social media provides an easy outlet for wrongful behavior, it will inevitably find its way as evidence in litigation. Her article focuses on the courts’ efforts to authenticate the evidence that is produced from Facebook, Twitter and other social media. Very few people take care to set appropriate privacy settings. The result from this practice is an easy way for anyone to find important, personal information, which they can use to hack accounts, submit their own postings under a different name, and incriminate others. Similarly, the creation of fake accounts is a prominent tool to harass and bully individuals to the point of disastrous and suicidal effects. With results such as untimely deaths and inappropriate convictions, the method of proving the authorship of such postings becomes a critical step when collecting evidence.

Professor Robbins comments that currently a person can be connected to and subsequently lawfully responsible for a posting without appropriate proof that the posting is, in fact, theirs. The article critiques the current method the court applies to identifying these individuals, claiming that there is too much emphasis on testimonials of current access, potential outside access, and other various factors. It proposes a new method of assigning authorship to the specific item instead of the account holder. She suggests a specific focus on the type of evidence when applying Federal Rule of Evidence 901(b)(4), which will raise appropriate questions such as the account ownership, security, and the overall posting that is related to the suit. The analysis thoroughly explains how this new method will provide sufficient support between the claims and the actual author. As social media continues to grow, so do the opportunities to hack, mislead, and ultimately cause harm. This influx of information needs to be filtered well in order for the courts to find the truth and serve justice to the right person.

The “Loss of Chance” Doctrine after Dickhoff

September 19, 2013
Healthcare, Litigation

by Alison Key, UMN Law Student, MJLST Staff

In May 2013, the Minnesota Supreme Court recognized a new cause of action against healthcare providers for medical malpractice. In Dickhoff ex rel. Dickhoff v. Green, A11-0402, 2013 WL 2363550 (Minn. May 31, 2013), Minnesota joined a growing group of states that permit medical malpractice claims for “loss of chance.”

Under traditional principles of tort law, the elements of a tort include existence of a duty, breach of the duty, causation, and injury, all of which a plaintiff must prove to the standard of “more likely than not.” This standard of proof has posed problems for plaintiffs in medical malpractice suits where the patient had less than a 50% chance of survival before the alleged negligence occurred. If the patient is already “more likely than not” going to suffer the injury of death from a condition before the negligence of a physician, it is impossible to argue that any physician conduct, even if negligent, was the but-for cause of the patient’s ultimate death.

Courts across the country have long grappled with this issue, but have struggled to find a solution. From a patients’ rights perspective, states are uncomfortable with the notion that there is virtual immunity from malpractice liability for physicians who begin treating patients after they are already terminally ill. At the same time, courts have been unwilling to hastily depart from traditional principles of tort causation and standards of proof that require a physician to be the but-for cause of the patient’s injury.

States have confronted this issue in a few ways. One is to adhere to traditional principles of tort causation and not recognize a cause of action for a patient who brings a claim of medical malpractice (generally failure to timely diagnose) after an illness was already “more likely than not” the cause of death. This would not necessarily preclude a patient from bringing an action if she had a greater than 50% chance of survival (whose condition will not “more likely than not” cause death) but due to a physician’s negligence, her chance of survival was reduced to below 50%. In such a case, the physician can be said to have caused by his negligence the injury that is “more likely than not” going to cause the patient’s death. This is the approach Minnesota took before Dickhoff.

Another “solution” is the relaxed causation/substantial factor approach. Similar to the way that tort law deals with concurrent causation, some jurisdictions have held that if the physician’s negligence and the patient’s condition are concurrent causes of death, a jury will determine whether the physician was a “substantial factor” in the injury, and award damages accordingly. This acknowledges, but “relaxes,” the causation requirements in malpractice claims with terminally ill patients, permitting recovery for the whole injury.

A final approach is the doctrine of “loss of chance.” Rather than address the causation problems when a patient is already “more likely than not” going to suffer death, the loss of chance doctrine changes the nature of the compensable injury. Instead of regarding the injury as death, the court acknowledges that any loss of chance of survival is a compensable injury itself for which the physician must be held accountable. Under this doctrine, a patient who sees a physician when her illness is already terminal, let’s say 40% chance of survival, would be permitted to recover if the physician’s negligent failure to timely diagnose her injury reduced her likelihood to 30% before treatment was administered. Under the traditional approach, there would be no way to prove that the physician “more likely than not” caused death, because the illness was always 60% likely to cause death. But under the “loss of chance” doctrine, her 10% loss of opportunity to recover is itself the injury for which the patient can recover. This is the position that the Minnesota Supreme Court took in Dickhoff, permitting patients to recover for a “loss of chance” at life.

While this doctrine has intuitive appeal, it is not without its criticisms. While the Anderson opinion rightly champions patients’ rights, physicians in “loss of chance” jurisdictions raise legitimate concerns. Subjecting physicians to liability under this standard is an imposition that no other professional organization subject to malpractice faces, payment for a loss in the likelihood of success. Such a departure from professional malpractice norms should be seriously considered before imposed. Particularly as physicians are faced with limitless options for testing and treatment, all of which may be reasonable, and for all of which another physician is willing to testify that he would have taken a different course of action. Further, many raise concerns about how loss of chance can be measured, and whether juries will be able to evaluate “likelihood” claims from experts to arrive at reasonable conclusions. There is also the effect of rising healthcare costs that often comes with an increase in liability expenses for healthcare providers.

But the Minnesota Supreme Court assures that these concerns are outweighed by adopting the loss of chance doctrine, which “will advance, not undermine, the fundamental purposes of tort law: deterrence and compensation.” There is an argument that these two justifications will not outweigh the concerns of the medical community. Aside from being offended at the notion that a physician needs a lawsuit as deterrence to responsibly treat a terminally ill patient, the issue with a deterrence justification is that most medical malpractice cases claim negligence in diagnosis. In such cases, the physician is unaware the patient is terminally ill and he has “immunity” to liability. Therefore, physicians argue that the deterrence mechanism is insufficient to warrant such an imposition and uncertainty on health law and the practice of medicine as a whole. Further, the “compensation” rationale does not sit well with many physicians who claim that compensating patients for injury and treatment that was likely to occur anyway will be a windfall for the patient at the expense of the healthcare system (the treatment and outcome for 40% likelihood of success is often the same as the treatment and outcome for 30% likelihood of success). The Dickhoff case was remanded back to the district court for further proceedings after determining that “loss of chance” was a legitimate cause of action. Further cases will show how the patients’ rights issues and the physicians concerns with this system will play out.

For further discussion of the “loss of chance” doctrine, see Tory A. Weigand, Loss of Chance in Medical Malpractice: The Need for Caution, 87 Mass. L. Rev. 3 (2002), reprinted here.

Apple & Samsung Litigation Shows Need for Patent Reform

December 3, 2012
Intellectual Property, Litigation, Patents

by Thomas Manewitz, UMN Law Student, MJLST Managing Editor

In the past two years, two of the world’s mobile technology leviathans, Apple and Samsung, have engaged in multibillion dollar patent infringement litigation. Specifically, Apple has been seeking damages and fighting for injunctions on several of Samsung’s mobile products in markets across the globe. On August 24, 2012 in the United States, Apple won a 1.049 billion dollar damages award for Samsung’s “willful patent infringement.” In the same lawsuit, Samsung counter sued and won zero damages. In the wake of this trial, Apple is seeking an injunction for 20 Samsung products.

Samsung provides the market with a popular Apple alternative that does not come close to dominating the market share. In the context of the litigation, both Samsung and Apple were forced to release their U.S. sales numbers. Samsung, who is at risk of having its products blocked from the U.S. markets, sold 21 million smart phones and 1.4 million tablets, while Apple sold 86 million smart phones and 34 million tablets. New and different products are now at risk from being removed from consumer markets because of our patent litigation structure. I will not argue that this case alone will temper innovation; however, it does beg the question as to whether or not high profile patent litigation, and the patent system as it currently stands, optimizes the production societal good and innovation. Perhaps the United States patent system should be reorganized based on different principle. For a discussion of the reorganization of the patent system see the United States patent system see Liza Vertinsky’s article in the Minnesota Journal of Law, Science & Tehcnology, “An Organizational Approach to the Design of Patent Law.”

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