It is natural that the nation’s premier intellectual property law firm is also known as a premier antitrust law firm. There is a natural synergy between these two areas of law, for both are designed to promote competition for the public good. Our firm’s mission is uniquely based on that fundamental premise. As a result, Townsend clients achieve a competitive edge with experienced legal counsel who know where the boundaries between those complicated and technically challenging areas of law exist, interface and overlap, especially in a litigation context.
Over the years, Townsend attorneys have had a significant impact on antitrust jurisprudence. The firm’s lawyers have successfully litigated some of the most influential antitrust cases in the nation’s history, establishing innovative legal precedents that continue to define the scope of important doctrines of antitrust law.
As a former government attorney in the Antitrust Division of the Department of Justice, one Townsend attorney helped the U.S. Supreme Court establish the “essential facility” doctrine, which is still being taught in law schools and continues to be debated in current antitrust telecommunications litigation. Another attorney successfully persuaded the U.S. Supreme Court to expand the doctrine of “equitable tolling” in antitrust cases, resulting in a recovery of 20 years’ worth of damages notwithstanding a four year statute of limitations.
When retained after the appellate court had affirmed an adverse jury verdict, Townsend attorneys persuaded the Court to hold that their clients’ actions were protected from antitrust liability by expanding the reach of the Noerr-Pennington doctrine. Townsend attorneys also won an important ruling from the California Supreme Court that insurance companies are not exempt from California’s antitrust laws. In an innovative resolution of an important antitrust case in the health care industry, Townsend successfully and creatively negotiated a settlement for both cash and a business affiliation which allowed a major hospital to remain in business and continue to service its patients.
For more than 35 years, Townsend attorneys have been actively involved in either the prosecution or defense of class action lawsuits asserting claims of unfair competition in both state and federal court. These cases frequently can prevent enormous economic risk or challenge entrenched industry wide practices. Our trial attorneys are fully conversant with both the unique procedural and ethical rules that govern these cases and in effective strategies for winning these complex matters. In addition, we are fully-equipped either to assist in a negotiated resolution of the claims in innovative ways beneficial to all the parties or to fight the cases all the way to verdict.
More recently, Townsend’s highly acclaimed $1.1 billion class action recovery against Microsoft has been hailed as one of the biggest antitrust victories in history. The firm independently analyzed the facts and initiated the action well before findings issued in the government’s case. Over the next four years, Townsend attorneys resolutely pursued a fiercely opposed course of discovery that resulted in depositions of over 120 key witnesses and over six million pages of documents secured from Microsoft and numerous third parties. With an aggressive trial strategy and scrupulous dedication to their clients, they positioned the case for a meaningful resolution on the eve of trial.
In case after case, Townsend’s Antitrust & Unfair Competition Practice Group has demonstrated the courage and expertise to successfully undertake formidable assignments, to win the hardest cases and to identify innovative solutions for challenging situations. Recognized as leaders for our role in landmark cases and record-breaking recoveries, Townsend’s Antitrust & Unfair Competition Practice Group continues to establish groundbreaking precedent on a daily basis as it provides distinctive legal services to each and every client, whether that client is an inventor, a business, a class or the government.
Recent representative matters include:
Microsoft Class Action Litigation. Townsend represented the plaintiffs in this class action instituted against Microsoft under California's antitrust statutes. The lawsuit, which settled in 2003 for $1.1 billion after four years of litigation, was prosecuted on behalf of all California purchasers of Microsoft’s personal computer operating system and applications software and alleged that Microsoft used its monopoly power to overcharge California businesses and consumers for its software products. The case settled in early 2003 with Microsoft agreeing to pay $1.1 billion to the class and the bulk of any unclaimed funds to go to the California Department of Education for the purchase of computer products for California’s schools. This constitutes one of the largest monopoly overcharge recoveries in antitrust history.
After presiding over the California antitrust case, Townsend partners Gene Crew and Rick Grossman were asked to perform a leading role in trying the Minnesota antitrust class action against Microsoft in Minneapolis. Six weeks into trial, as they were about to rest their case-in-chief, Microsoft settled the Minnesota action on terms that were comparable to the settlement terms in California. Townsend was also retained to help Sun Microsystems and several other significant Microsoft competitors to recover the damages that Microsoft’s antitrust violations caused them as well, resulting in a settlement worth several billion dollars to Sun. Townsend was then hired by the State of California and all of its cities, counties and political subdivisions to recover the illegal overcharges they have been forced to pay Microsoft for computer software, resulting in a $70 million settlement for the State of California against Microsoft.
Grid Systems Corp. v. Texas Instruments, Inc. Townsend was retained as lead antitrust trial counsel for plaintiff Tandy Corporation (“Radio Shack”) in this patent/antitrust case against Texas Instruments (“TI”). Tandy alleged that TI violated the Sherman Act by (1) obtaining a key patent through fraud on the PTO and (2) using that fraudulently obtained patent to force Tandy to license TI’s entire portfolio of patents for $50 million. After plaintiffs obtained favorable rulings from Judge Lowell Jensen, the case was settled for a substantial (but confidential) sum.
Intergraph Corp. v. Intel Corp. Co-counsel for plaintiff in prosecuting antitrust, patent, contract and tort claims. Intel paid total of $450 million for settlement and bench trial verdict.
TriCom, Inc. v. Electronic Data Services Corporation (EDS). Townsend attorneys Jim Gilliland and Ted Herhold successfully defended against antitrust claims that EDS had unlawfully "tied" together the sale of computer software used to design cars for General Motors to the use of EDS’ computer hardware. After a seven-week trial in federal court in Detroit, the jury ruled unanimously in favor of EDS, finding that no violation had occurred and awarding no damages to the plaintiff.
LMP Corporation v. Universal Manufacturing Corporation, Alameda Superior Court, Case No. 590001-7. Plaintiffs were inventors of a patented energy saving electronic ballast technology which defendant licensed from plaintiffs, then shelved it for the purpose of eliminating competition from the market. Following a six month jury trial, Townsend obtained a $96 million verdict for plaintiffs which was affirmed “without reservation” on appeal. [unpublished decision]
St. Luke’s Hospital v. California Pacific Medical Center. St. Luke’s instituted a state court action under the Cartwright Act (Bus. & Prof. Code §16720) and the Unfair Competition Act (Bus. & Prof. Code §17200) against California Pacific Medical Center and its parent Sutter Health System, alleging that defendants had long term exclusionary contracts with Brown & Toland (the largest physician group in Northern California) for the purpose of eliminating St. Luke’s from the market. By preventing St. Luke’s from competing on the merits for managed care patients, defendants’ restraints threatened to shut down St. Luke’s — leaving a large portion of the San Francisco community needing medical care at risk. Townsend was successful in obtaining a settlement for St. Luke’s on the eve of trial which guarantees St. Luke’s the capital resources needed to allow it to continue its charity services to the needy of San Francisco for years to come.
The People of the State of California, Chinese Hospital Association, et al. v. California Pacific Medical Group dba Brown & Toland Medical Group, et al. In July of 2006, Townsend filed a state court action under California’s antitrust laws on behalf of the Chinese Hospital, Chinese Community Health Care Association (CCHCA) and Chinese Community Health Plan (CCHP) against the Brown & Toland Medical Group, alleging that Brown & Toland is using exclusionary contracts to induce physicians to abandon the health care system serving the Chinese Community. The parties have already reached a settlement in favor of the plaintiffs.
Theme Promotions, Inc. dba Theme Co-Op Promotions vs. News America Marketing FSI, Inc. In 2005, Townsend won a jury verdict for a small San Francisco marketing firm against a subsidiary of the $55 billion News Corporation empire, run by Rupert Murdoch. Led by partners Ted Herhold and Gene Crew, Townsend proved to the jury that News America used steep discriminatory price discounts to corner the United States market for promotional circulars that are distributed throughout newspapers around the nation. The federal court affirmed the jury's verdict as a violation of the California antitrust laws, which prohibit the use of discriminatory price discounts to lock out competitors.
Mt. Hood Stages, Inc. v. Greyhound Corp. Townsend represented Mt. Hood in this antitrust trial against Greyhound, resulting in the largest jury verdict in Oregon history. Townsend argued for affirmance of this unprecedented judgment before the United States Supreme Court. Persuading the Court to expand the equitable doctrine of tolling in antitrust cases, Townsend succeeded in recovering 20 years’ worth of antitrust damages for plaintiff – almost $25 million – despite a four year statute of limitations.