Bits Blog: Judge Slashes Jury Award in Apple-Samsung Case

8:45 p.m. | Updated

A federal judge on Friday weakened the blow from Apple’s legal victory in a patent case against Samsung, lopping more than 40 percent off the damages a jury awarded Apple last year.

The ruling did not shift the case — one of the most closely watched in the high-tech industry — in Samsung’s favor. While Apple has lost other skirmishes against Samsung in courts around the world, the jury award in this case has been the biggest victory for either side so far.

Even at a reduced level, these would be among the highest damages in a patent dispute.

The judge ordered a new trial to recalculate a portion of those damages, leaving open the possibility that some of them could be restored.

She also indicated that Apple was entitled to additional damages for sales of Samsung products that have occurred since the jury’s decision last summer, which could further swell the amount Apple is owed by Samsung.

Tech companies around the world are waging legal battles over patents as they compete for supremacy in the lucrative smartphone market. Apple and Samsung are the most prominent combatants in that war; the two companies divide most of the profits in the surging mobile phone market.

Samsung has soared to the No. 1 spot in the smartphone business in recent years, but Apple says that it is, in part, because the company has swiped many of Apple’s ideas.

In her review of the jury’s decisions, which originally awarded Apple more than $1 billion for patent violations by Samsung in its mobile products, Judge Lucy H. Koh of the United States District Court in San Jose, Calif., knocked those damages down by $450 million, to $599 million. The new trial will determine how much of the $450 million, if any, should be restored.

“It will be years before the parties exhaust all of their litigation avenues and options,” said Alan M. Fisch, an intellectual property lawyer with Fisch Hoffman Sigler in Washington, who is not involved in the case. “Still, some form of patent cross-license between the two would not be an unsurprising final result.”

None of Judge Koh’s opinion changed the jury’s finding that Samsung violated a series of Apple patents in its smartphone and tablet products. But the judge took issue with how the jury calculated the damages Apple was entitled to from the Samsung devices named in the case, more than two dozen of them in all.

In her 27-page opinion, Judge Koh said that the jury failed to follow her instructions in calculating damages for a certain class of patents, known as utility patents.

She also decided in Samsung’s favor in a dispute between the two parties over when Apple notified Samsung that it was infringing Apple’s intellectual property. Evidence of such notice dates are important because they help determine how hefty the damages are in a court case, once the party being notified is found guilty of infringement.

Judge Koh chided Apple for using an expert in the case who used an “aggressive notice date” — meaning, an early one — to calculate damages.

“The need for a new trial could have been avoided had Apple chosen a more circumspect strategy or provided more evidence to allow the jury or the court to determine the appropriate award for a shorter notice period,” she said in her ruling.

Steve Dowling, a spokesman for Apple, declined to comment.

In a statement, Adam Yates, a Samsung spokesman, said that the company was pleased with the judge’s decision and that it intended to seek further review of the remaining award.

Apple and Samsung, meanwhile, continue to fight ferociously in the smartphone market, where Samsung has steadily worked its way to the No. 1 position over the last few years. In the fourth quarter, Samsung accounted for 29 percent of global smartphone shipments, while Apple accounted for 21.8 percent, according to IDC.

Mark A. Lemley, a professor at Stanford Law School, called the judge’s decision “an extremely careful and thorough opinion on a very difficult and interrelated set of issues.”

Mr. Lemley predicted that Samsung would eventually win some reduction in the original $1 billion award, but “almost certainly” less than the $450 million that Judge Koh reduced it by on Friday.

“We’ll need a new trial to figure that out,” said Mr. Lemley, who has done legal work in the past for Google, maker of the Android operating system involved in the Samsung case and others. “Judge Koh has encouraged both sides to appeal first. That may clarify some questions, but it is unlikely to prevent a new trial, just delay it some.”

Read More..

U.S. Aid to Syria Shows Obama’s Cautious Approach to Crisis

ROME — The food rations and medical supplies that Secretary of State John Kerry said Thursday would be provided to the Free Syrian Army mark the first time that the United States has publicly committed itself to sending nonlethal aid to the armed factions that are battling President Bashar al-Assad.

But the nature of the assistance also illustrates the Obama administration’s caution about getting involved in the Syrian crisis.

At each stop of his first foreign trip as secretary of state, Mr. Kerry has emphasized that one of his principal goals was to change Mr. Assad’s calculations about his ability to remain in power.

Mr. Assad is “out of time and must be out of power,” Mr. Kerry asserted after meeting here with Moaz al-Khatib, the leader of the Syrian opposition coalition.

The announcement of the supplies fell well short of the weapons and equipment Syrian rebels have requested and left unclear why Mr. Assad, who has fired Scud missiles at the city of Aleppo, would now conclude that he could no longer stand up to his opponents.

The nonlethal aid was just one element of the American program of assistance that Mr. Kerry unveiled on Thursday.

The United States is also providing $60 million to help the political wing of the Syrian anti-Assad coalition improve the delivery of basic services like sanitation and education in areas it has already wrested from the government’s control.

A covert effort to program to train rebel fighters, which State Department officials here were not prepared to discuss, has also been under way. According to an official in Washington, who asked not to be identified, the Central Intelligence Agency since last year has been training groups of Syrian rebels in Jordan.

The official did not provide details about the training or what difference it may have made on the battlefield, but said that the C.I.A. had not given weapons or ammunition to the rebels. An agency spokesman declined to comment.

Defending the limited program to provide medical supplies and military rations known as Meals Ready to Eat, or M.R.E.’s, to the military wing of the Syrian resistance, Mr. Kerry said that other countries would also provide help. He said that the “totality” of the effort would make an impression on Mr. Assad.

“We’re doing this, but other countries are doing other things,” Mr. Kerry said. But neither he nor any diplomats at a meeting here of the so-called Friends of Syria countries that support the Syrian resistance provided details about that effort.

Britain is planning more substantial nonlethal aid, which could include vehicles, bulletproof vests and night vision equipment, according to an American official. British officials have been consulting with European counterparts about what sort of nonlethal aid might be allowed under the terms of European Union decisions.

There is speculation that the Obama administration might expand its program of support to the Free Syrian Army to include nonlethal equipment if rebel fighters use the initial assistance effectively and do not allow any to fall into the hands of extremists.

“We’re in the Middle East. It’s all about the bargaining,” said Mona Yacoubian, a Middle East expert at the Henry L. Stimson Center in Washington. “It could be this is part of a strategy of deliberately trickling in aid, to sort of see how things are going on the ground. You start with harmless things, like M.R.E.’s. Is this a conversation starter? We might think of it that way.”

But Mr. Kerry provided no indication that the White House was committed to such a phased expansion of nonlethal support.

“I am going back to Washington with a number of thoughts and ideas that were put on the table today, and I’m confident we’re going to have a robust and ongoing conversation,” he said.

Some members of the Syria opposition said they were disappointed by the Rome session.

“It is obvious that the real support is absent,” said Walid al-Bunni, a spokesman for the anti-Assad coalition. He said what the resistance needed most was weapons. “What we want is to stop the Scuds launched on Aleppo, to stop the warplanes that are bombing our towns and villages.”

Mr. Khatib, for his part, delivered an emotional statement in which he urged establishment of a humanitarian corridor to the besieged city of Homs, and complained that many in the West were too quick to judge some members of the opposition as Islamic extremists because of “the length of a beard of a fighter.”

“Bashar Assad, for once in your life, behave as a human being,” Mr. Khatib said. “Bashar Assad, you have to make at least one wise decision in your life for the future of your country.”

One aim of the $60 million in aid is to help the Syrian Opposition Coalition, the umbrella group led by Mr. Khatib that the United States backs and has helped shape, in building credibility within the country and contesting the influence of extremist groups like the Al Nusra Front, an organization affiliated with Al Qaeda.

American officials have become increasingly concerned that the Al Nusra Front is making inroads among the Syrian population by dispersing assistance in the areas it controls.

The American assistance could also help the Syrian coalition develop the governance skills it will need to play a role in any post-Assad political transition.

The funds are to be used in areas controlled by the Syrian opposition coalition to improve education, sanitation and security. Another goal is to strengthen the rule of law in these areas and discourage vigilante justice or revenge killings. To carry out the program, the United States plans to send technical advisers to the headquarters of the Syrian opposition in Cairo. The advisers will be drawn from nongovernmental organizations.

The $60 million is on top of more than $50 million in assistance, including communications equipment, that the United States has already provided to local councils and civil activists. The new funds need to be approved by Congress, which is caught up in politics over how to cut the American budget deficit. But Mr. Kerry said that he expects Congressional approval soon.

Reporting was contributed by Mark Mazzetti from Washington, Anne Barnard and Hwaida Saad from Beirut, Lebanon, and Christine Hauser from New York.

Read More..

AP Source: Salary cap increases to $123 million

The NFL salary cap for the 2013 season will rise to $123 million from $120.6 million in 2012, an NFL Players Association official familiar with negotiations over the figure told The Associated Press on Thursday.

The official spoke to the AP on condition of anonymity because no formal announcement had been made.

The increase, which is larger than some in the NFL had anticipated, is a result of greater-than-expected revenues last season — primarily from NFL Properties — and a jump in projected league revenues, according to the official.

The league and the union work together to establish a cap number, based on parameters established under their collective bargaining agreement. The current 10-year CBA was signed in August 2011, ending the owners' lockout of the players.

One of the main areas of contention during that labor dispute was how to divide the more than $9 billion in annual league revenues, a figure that will keep rising, particularly once the NFL's new television contracts kick in for the 2014 season. Those additional revenues will be reflected in the salary cap for 2015, which is expected to see a more significant increase than the roughly 2 percent uptick from 2012 to 2013.

There was no salary cap in 2010, the final year of the old CBA. In 2011, the first year under the present deal, the figure was $120.375 million.

Over the next four seasons, from 2013-16, each of the NFL's 32 clubs will be required to spend an average of at least 89 percent of the salary cap in contract dollars, while overall league spending must average 95 percent in that span. That sort of minimum cash spending did not exist under the old CBA.

Another significant change under this agreement: owners and players divide types of revenues at different rates. Players receive 55 percent of revenue from the league's national TV and other media deals; 45 percent of licensing and national sponsorship deals, including NFL Properties; and 40 percent of local club revenues.

Read More..

Doctor and Patient: Why Failing Med Students Don’t Get Failing Grades

Tall and dark-haired, the third-year medical student always seemed to be the first to arrive at the hospital and the last to leave, her white coat perpetually weighed down by the books and notes she jammed into the pockets. She appeared totally absorbed by her work, even exhausted at times, and said little to anyone around her.

Except when she got frustrated.

I first noticed her when I overheard her quarreling with a nurse. A few months later I heard her accuse another student of sabotaging her work. And then one morning, I saw her storm off the wards after a senior doctor corrected a presentation she had just given. “The patient never told me that!” she cried. The nurses and I stood agape as we watched her stamp her foot and walk away.

“Why don’t you just fail her?” one of the nurses asked the doctor.

“I can’t,” she sighed, explaining that the student did extremely well on all her tests and worked harder than almost anyone in her class. “The problem,” she said, “is that we have no multiple choice exams when it comes to things like clinical intuition, communication skills and bedside manner.”

Medical educators have long understood that good doctoring, like ducks, elephants and obscenity, is easy to recognize but difficult to quantify. And nowhere is the need to catalog those qualities more explicit, and charged, than in the third year of medical school, when students leave the lecture halls and begin to work with patients and other clinicians in specialty-based courses referred to as “clerkships.” In these clerkships, students are evaluated by senior doctors and ranked on their nascent doctoring skills, with the highest-ranking students going on to the most competitive training programs and jobs.

A student’s performance at this early stage, the traditional thinking went, would be predictive of how good a doctor she or he would eventually become.

But in the mid-1990s, a group of researchers decided to examine grading criteria and asked directors of internal medicine clerkship courses across the country how accurate and consistent they believed their grading to be. Nearly half of the course directors believed that some form of grade inflation existed, even within their own courses. Many said they had increasing difficulty distinguishing students who could not achieve a “minimum standard,” whatever that might be. And over 40 percent admitted they had passed students who should have failed their course.

The study inspired a series of reforms aimed at improving how medical educators evaluated students at this critical juncture in their education. Some schools began instituting nifty mnemonics like RIME, or Reporter-Interpreter-Manager-Educator, for assessing progressive levels of student performance; others began to call regular meetings to discuss grades; still others compiled detailed evaluation forms that left little to the subjective imagination.

Now a new study published last month in the journal Teaching and Learning in Medicine looks at the effects of these many efforts on the grading process. And while the good news is that the rate of grade inflation in medical schools is slower than in colleges and universities, the not-so-good news is that little has changed. A majority of clerkship directors still believe that grade inflation is an issue even within their own courses; and over a third believe that students have passed their course who probably should have failed.

“Grades don’t have a lot of meaning,” said Dr. Sara B. Fazio, lead author of the paper and an associate professor of medicine at Harvard Medical School who leads the internal medicine clerkship at the Beth Israel Deaconess Medical Center in Boston. “‘Satisfactory’ is like the kiss of death.”

About a quarter of the course directors surveyed believed that grade inflation occurred because senior doctors were loath to deal with students who could become angry, upset or even turn litigious over grades. Some confessed to feeling pressure to help students get into more selective internships and training programs.

But for many of these educators, the real issue was not flunking the flagrantly unprofessional student, but rather evaluating and helping the student who only needed a little extra help in transitioning from classroom problem sets to real world patients. Most faculty received little or no training or support in evaluating students, few came from institutions that had remediation programs to which they could direct students, and all worked under grading systems that were subjective and not standardized.

Despite the disheartening findings, Dr. Fazio and her co-investigators believe that several continuing initiatives may address the evaluation issues. For example, residency training programs across the country will soon be assessing all doctors-in-training with a national standards list, a series of defined skills, or “competencies,” in areas like interpersonal communication, professional behavior and specialty-specific procedures. Over the next few years, medical schools will likely be adopting a similar system for medical students, creating a national standard for all institutions.

“There have to be unified, transparent and objective criteria,” Dr. Fazio said. “Everyone should know what it means when we talk about educating and training ‘good doctors.’”

“We will all be patients one day,” she added. “We have to think about what kind of doctors we want to have now and in the future.”

Read More..

DealBook: As Losses Mount, R.B.S. Unveils Plan to Sell Assets

LONDON – The Royal Bank of Scotland, hammered by losses, announced plans on Thursday to sell assets and pare back its investment banking business, in an effort to appease regulators and its biggest shareholder, the British government.

R.B.S. said it planned to sell a stake in the Citizens Financial Group, the American lender it bought in 1988, through an initial public offering in two years. The bank will also continue to reduce its investment banking operations, with plans to cut risky assets and eliminate jobs.

The moves are designed to help bolster the bank’s capital levels and refocus its operations, part of a multiyear turnaround effort initiated by its chief executive, Stephen Hester. In the end, R.B.S. will emerge a much smaller bank, largely focused on Britain.

“R.B.S. is four years into its recovery plan,” Mr. Hester said in a statement, “and good progress has been made. We are a much smaller, more focused and stronger bank. Our target is for 2013 to be the last big year of restructuring.”

Like many rivals, R.B.S. is struggling with the legacy of the financial crisis and a spate of legal issues. On Thursday, it reported a bigger-than-expected loss, in part tied to its legal troubles.

The bank, in which the British government holds an 82 percent stake after a bailout in 2008, posted a net loss of £5.97 billion ($9 billion) in 2012, much larger than the £2 billion loss recorded in 2011. Analysts had been expecting a loss of £5.1 billion. For the last quarter of 2012, R.B.S. reported a £2.6 billion loss, up from a £1.8 billion loss in the period a year earlier.

The rising losses reflect the bank’s regulatory and legal problems.

R.B.S. said on Thursday that it had set aside an additional £1.1 billion to compensate clients to which it improperly sold insurance products, bringing the total provision to £2.2 billion. It also estimated it would have to pay £700 million to compensate small businesses to which it improperly sold some interest-rate hedging products.

The bank agreed this year to pay $612 million to British and American authorities to settle accusations of rate-rigging. Since then, Mr. Hester has promised to tighten controls at the bank to limit the risk of future rate manipulation.

The head of R.B.S.’s investment banking division, John Hourican, resigned at the beginning of February as a result of the scandal related to manipulating the London interbank offered rate, or Libor. The bank plans to pay its fine with money clawed back from bonuses.

‘‘Along with the rest of the banking industry we faced significant reputational challenges,’’ Mr. Hester said in the statement. ‘‘We are determined to overcome the cultural and reputational baggage of precrisis times with the same focus we have applied to the financial cleanup from that era.’’

Eager to get back some of the £45.5 billion it invested in R.B.S., the British government recently increased pressure on the bank’s management to speed up the reorganization.

Some analysts said the government could start selling parts of its investment in the bank, even at a loss, before the next general election, which is set for 2015. R.B.S.’s shares are still trading at about half what the government paid for them in 2008. Some lawmakers said they would favor handing out shares to the public instead of a possible sale of the stake on the open market.

Richard Hunter, head of equities at Hargreaves Lansdown Stockbrokers, said there were signs that Mr. Hester’s efforts to turn around the bank had started to pay off, but that “the ongoing absence of a dividend and overhang of the government stake are negatives which need to be resolved.”

Read More..

The Lede: Video of Pope Benedict’s Public Farewell

During his final farewell address, Pope Benedict XVI describes the joys and challenges of his papacy via CNN on YouTube.

As our colleagues, Rachel Donadio and Alan Cowell report, Pope Benedict XVI held his final general audience in St. Peter’s Square on Wednesday, a day before he withdraws from the public for a cloistered life of prayer and meditation.

Before tens of thousands of people gathered in the square, the pope acknowledged the difficulties he faced during his papacy, describing “moments of joy and light but also moments that were not easy.” At times, when the “seas were rough”, he said that “the Lord seemed to sleep.”

From the full text of his address:

When, almost eight years ago, on April 19th, [2005], I agreed to take on the Petrine ministry, I held steadfast in this certainty, which has always accompanied me. In that moment, as I have already stated several times, the words that resounded in my heart were: “Lord, what do you ask of me? It a great weight that You place on my shoulders, but, if You ask me, at your word I will throw out the nets, sure that you will guide me” – and the Lord really has guided me. He has been close to me: daily could I feel His presence.

[These years] have been a stretch of the Church’s pilgrim way, which has seen moments joy and light, but also difficult moments. I have felt like St. Peter with the Apostles in the boat on the Sea of Galilee: the Lord has given us many days of sunshine and gentle breeze, days in which the catch has been abundant; [then] there have been times when the seas were rough and the wind against us, as in the whole history of the Church it has ever been – and the Lord seemed to sleep. Nevertheless, I always knew that the Lord is in the barque, that the barque of the Church is not mine, not ours, but His – and He shall not let her sink. It is He, who steers her: to be sure, he does so also through men of His choosing, for He desired that it be so. This was and is a certainty that nothing can tarnish. It is for this reason, that today my heart is filled with gratitude to God, for never did He leave me or the Church without His consolation, His light, His love.

An English translation from the Vatican of Pope Benedict XVI’s last general audience before his formal resignation on Thursday.

On Twitter, the pope’s account, @Pontifex, which has more than 1.5 million followers, posted:

If only everyone could experience the joy of being Christian, being loved by God who gave his Son for us!

— Benedict XVI (@Pontifex) 27 Feb 13

Shortly after he announced his resignation, he asked on Twitter for people “to pray for me and for the church, trusting as always in divine providence.”

From St. Peter’s Square, people posted photographs from the crowd, including a shot of the pope arriving in the so-called popemobile, on his way to deliver his final farewell.

St. Peter’s Square completely full of people! #vatican #pope #last #speaking http://t.co/m2RBoGNDJy

— Marko Style (@MarkoStyle44) 27 Feb 13

This is how close I got to the Pope http://t.co/BfOXkddkrE

— Becca Liudzius (@becksky123) 27 Feb 13

As my colleague, Laurie Goodstein reports, the church faces, among its many challenges as cardinals gather to select a new pope, the wounds caused by sexual abuse cases involving minors all over the world that have been mishandled for years.

In St. Peter’s Square, the pope also spoke briefly in English to the crowd.

The pope spoke in English, and asked Catholics to pray for both him and the new pope.

I offer a warm and affectionate greeting to the English-speaking pilgrims and visitors who have joined me for this, my last General Audience. Like Saint Paul, whose words we heard earlier, my heart is filled with thanksgiving to God who ever watches over his Church and her growth in faith and love, and I embrace all of you with joy and gratitude. During this Year of Faith, we have been called to renew our joyful trust in the Lord’s presence in our lives and in the life of the Church. I am personally grateful for his unfailing love and guidance in the eight years since I accepted his call to serve as the Successor of Peter. I am also deeply grateful for the understanding, support and prayers of so many of you, not only here in Rome, but also throughout the world.

The decision I have made, after much prayer, is the fruit of a serene trust in God’s will and a deep love of Christ’s Church. I will continue to accompany the Church with my prayers, and I ask each of you to pray for me and for the new Pope. In union with Mary and all the saints, let us entrust ourselves in faith and hope to God, who continues to watch over our lives and to guide the journey of the Church and our world along the paths of history. I commend all of you, with great affection, to his loving care, asking him to strengthen you in the hope which opens our hearts to the fullness of life that he alone can give. To you and your families, I impart my blessing. Thank you!

The identity of the new pope will revealed from this balcony after the conclave, likely within 2 weeks. http://t.co/40Q9oWAz3f

— Eric Reguly (@ereguly) 27 Feb 13

Read More..

Penn State upsets No. 4 Michigan 84-78

STATE COLLEGE, Pa. (AP) — Jermaine Marshall scored 25 points and Penn State upset No. 4 Michigan 84-78 on Wednesday night for its first Big Ten win of the season.

The Nittany Lions (9-18, 1-14) had lost 18 straight regular-season conference games dating to last season, but they roared back from a 15-point deficit with 10:39 left behind the energetic play of Marshall. The junior guard scored 19 in the second half, including four 3s that whipped Jordan Center fans into a frenzy.

D.J. Newbill added 17 points for Penn State, which hit a season-high 10 3-pointers. Marshall's twisting drive to the basket gave the Nittany Lions a three-point lead before Michigan's Glenn Robinson III misfired on a 3 with 17 seconds left.

Sasa Borovnjak had a memorable Senior Night, hitting two foul shots with 15 seconds left to seal the win. Moments later, Penn State fans rushed the court in delight.

Tim Hardaway Jr. scored 19 points for the Wolverines (23-5, 10-5).

Read More..

Global Health: After Measles Success, Rwanda to Get Rubella Vaccine

Rwanda has been so successful at fighting measles that next month it will be the first country to get donor support to move to the next stage — fighting rubella too.

On March 11, it will hold a nationwide three-day vaccination campaign with a combined measles-rubella vaccine, hoping to reach nearly five million children up to age 14. It will then integrate the dual vaccine into its national health service.

Rwanda can do so “because they’ve done such a good job on measles,” said Christine McNab, a spokeswoman for the Measles and Rubella Initiative. M.R.I. helped pay for previous vaccination campaigns in the country and the GAVI Alliance is helping to finance the upcoming one.

Rubella, also called German measles, causes a rash that is very similar to the measles rash, making it hard for health workers to tell the difference.

Rubella is generally mild, even in children, but in pregnant women, it can kill the fetus or cause serious birth defects, including blindness, deafness, mental retardation and chronic heart damage.

Ms. McNab said that Rwanda had proved that it can suppress measles and identify rubella, and it would benefit from the newer, more expensive vaccine.

The dual vaccine costs twice as much — 52 cents a dose at Unicef prices, compared with 24 cents for measles alone. (The MMR vaccine that American children get, which also contains a vaccine against mumps, costs Unicef $1.)

More than 90 percent of Rwandan children now are vaccinated twice against measles, and cases have been near zero since 2007.

The tiny country, which was convulsed by Hutu-Tutsi genocide in 1994, is now leading the way in Africa in delivering medical care to its citizens, Ms. McNab said. Three years ago, it was the first African country to introduce shots against human papilloma virus, or HPV, which causes cervical cancer.

In wealthy countries, measles kills a small number of children — usually those whose parents decline vaccination. But in poor countries, measles is a major killer of malnourished infants. Around the world, the initiative estimates, about 158,000 children die of it each year, or about 430 a day.

Every year, an estimated 112,000 children, mostly in Africa, South Asia and the Pacific islands, are born with handicaps caused by their mothers’ rubella infection.

Thanks in part to the initiative — which until last year was known just as the Measles Initiative — measles deaths among children have declined 71 percent since 2000. The initiative is a partnership of many health agencies, vaccine companies, donors and others, but is led by the American Red Cross, the United Nations Foundation, the Centers for Disease Control and Prevention, Unicef and the World Health Organization.

This article has been revised to reflect the following correction:

Correction: February 27, 2013

An earlier version of this article misstated the source of the vaccine and some financing for the campaign. The vaccine and financing is being provided by the GAVI Alliance, not the Measles and Rubella Initiative.

Read More..

DealBook: Court Approves Dewey Bankruptcy Plan, Officially Dissolving Firm

Nine months ago, when it filed the largest law firm bankruptcy case in United States history, Dewey & LeBoeuf effectively ceased to exist. But its carcass has languished in court, as restructuring experts handled the messy task of unwinding the firm and negotiating a plan to pay back its creditors.

On Wednesday, a federal bankruptcy judge confirmed that plan, a decision that officially dissolved Dewey, the once-venerable law firm that collapsed after financial problems led to an exodus of its partners.

“The court is very pleased,” said Judge Martin Glenn at the end of a three-hour hearing before a packed courtroom. “I want to congratulate all the professionals.”

Dewey’s liquidation plan lays out how its estate will compensate creditors, which have claims totaling about $550 million. At the heart of the proposal is an innovative arrangement under which about 450 former Dewey partners agreed to return a portion of their pay, raising about $72 million for creditors.

By accepting the deal, former Dewey partners insulate themselves from future lawsuits connected to the firm’s demise.

Al Togut, Dewey’s lead bankruptcy lawyer, who has been involved in a number of law firm bankruptcies, said that the winding down of Dewey had moved far more swiftly — and less contentiously — than previous liquidations of other large law firms.

“Here we are about to make history,” said Mr. Togut, just before Judge Glenn approved the plan. “This the diametric opposite of Finley Kumble, which took 20 years, or Shea & Gould, which took nine years, and even the modern-day Coudert Brothers case, which still isn’t done.”

Also not done is a criminal investigation into possible financial misconduct at Dewey. Steven H. Davis, the firm’s former chairman, and Stephen DiCarmine, the former executive director, are the focus of an investigation by the Manhattan district attorney’s office.

Prosecutors recently indicated that the inquiry was still active when it raised the issue that Mr. Davis’s criminal lawyer, Barry A. Bohrer, had a conflict of interest in representing him, according to a person with direct knowledge of the investigation.

The unusual situation arose earlier this month after Mr. Bohrer left his law firm, Morvillo, Abramowitz, Grand, Iason, Anello & Bohrer, for another firm, Schulte Roth & Zabel. That posed a conflict of interest, the district attorney’s office advised, because Schulte Roth represented JPMorgan Chase, a Dewey lender and possible victim, in the criminal inquiry, this person said.

Mr. Bohrer declined to comment, and Mr. Davis has previously denied any wrongdoing. Ned Bassen, a lawyer for Mr. DiCarmine, said that his client had done nothing wrong, either criminally or civilly.

While the government investigation continues, the judge’s ruling is the coda of the Chapter 11 case.

Trustees will now begin the process of returning money to Dewey’s creditors, which include the firm’s lenders Citigroup and JPMorgan, as well as a car service company and an executive recruiter. A large portion of the recovery, in addition to the former Dewey partners’ contributions, will come from collecting Dewey’s outstanding legal invoices.

The hearing lacked the drama that many participants had expected after a number of onetime Dewey partners filed protests to the plan this month. Two former Dewey partners accused Martin J. Bienenstock, the former head of Dewey’s bankruptcy practice, of devising a plan that paid him $6 million in 2010 while the pay of rank-and-file partners was deferred and ultimately was subject to being clawed back.

That objection, along with a handful of others, was withdrawn just hours before the session, allowing for a smooth confirmation hearing.

In an e-mail, Mr. Bienenstock, now a partner at the law firm Proskauer Rose, congratulated the advisers on what he called “the most successful and fastest law firm bankruptcy case.” But he criticized those who tried to block the plan.

“A small number of former partners tried to get special deals for themselves by making vicious accusations of fraud against the executive committee that structured the bankruptcy, having zero basis in fact, and predictably no wrongful conduct was proven,” Mr. Bienenstock said.

During the court session, Mr. Togut praised the former Dewey lawyers who signed on to the so-called partnership contribution plan, which he called “a template for future cases.”

The deal forced them to return a portion of their pay, in amounts based on a complex formula tied to their compensation. Those payments range from a minimum of $5,000 for retired partners to $3.5 million for the firm’s highest-paid lawyers.

“What makes this case so important is that this is the first time that such a large and diverse group of law partners accepted responsibility for their failed firm,” Mr. Togut said. “And they did it while they were still hurting, just after the firm failed, while they were trying to start their career and soothe unhappy spouses.”

Most former partners of Dewey, a firm that at its peak had nearly 1,400 lawyers across 26 offices globally, have landed on their feet. About 300 Dewey partners sought new employment as the firm failed; nearly all of them found homes at other large corporate firms. Winston & Strawn hired 23, led by the sports-industry litigator Jeffrey Kessler. Proskauer brought on 13 former Dewey partners.

Though the formal bankruptcy process has ended, the legal fallout from Dewey’s implosion is not over. In addition to the criminal investigation, several Dewey-related civil lawsuits are wending their way through the courts. One former partner has sued Citigroup, accusing the bank of conspiring with Dewey to hide the law firm’s true financial condition in the months before its collapse. A Citigroup spokeswoman declined to comment.

While most of the firm’s lawyers have found other employment and the bankruptcy process was declared a success, Mr. Togut on Wednesday acknowledged the sadness of Dewey’s demise.

“They say that a good settlement is where no one is happy,” Mr. Togut said. “Well, I can assure you, no one is happy.”

Read More..

U.S. Officials Propose Sharing Drone Surveillance Data With Algerian Forces

Hussein Malla/Associated Press

In a cave in Idlib Province, Free Syrian Army fighters did a traditional dance and sang songs critical of President Bashar al-Assad.

 WASHINGTON — The American ambassador to Algeria and senior counterterrorism officials have proposed sharing more information with Algerian security forces to help them kill or capture militants in their own country and in areas just across their borders.

Their approach reflects the growing support within the administration for more forceful action against extremists in the area since the attack on a gas field in eastern Algeria last month left 37 dead, including three Americans, and focused new concerns on terrorist activity in Africa.

Under one plan, information from American surveillance drones would be provided to Algerian forces to enable them to engage in operations both inside Algeria and possibly, in a limited way, across its borders. The United States is already providing surveillance information to the French-led military operation in Mali to help combat militants there who last year seized the northern half of the country.

In a cable to the State Department last week, according to administration officials, Henry S. Ensher, the United States envoy in Algiers, urged that the pursuit of the Algerian militant Mokhtar Belmokhtar, the mastermind of the gas field attack, be made a priority. Toward that end, he recommended that the Obama administration tell the Algerians that if they allowed the United States to fly unarmed drones over the border area of Algeria as well as over Mali, the Americans would share the information with the Algerian government.

There was broad agreement among policy makers and intelligence officials at a meeting of President Obama’s top national security deputies at the White House last week that Mr. Belmokhtar and members of Al Qaeda in the Islamic Maghreb should be aggressively pursued, according to one senior American official who insisted on anonymity so he could discuss internal deliberations. But no decision appears to have been reached on whether to make a formal proposal to the Algerians.

The idea of taking stronger action in the region has been supported in recent months by Michael Sheehan, the senior counterterrorism official at the Pentagon, and Daniel Benjamin, who until December was the senior State Department counterterrorism official. In the past, State Department lawyers have questioned whether the military action approved by Congress against Al Qaeda after the Sept. 11, 2001, attacks authorized efforts to target extremists who were not clearly linked to the group. But according to some officials, those legal arguments  have recently been overcome.  

The United States has long sought Algeria’s cooperation in antiterrorism efforts, and sharing information with a government that has jealously guarded its sovereignty would be a significant step toward that goal. During the siege of the gas plant at In Amenas, Algeria permitted the United States to fly a Predator surveillance drone over the complex, though it insisted that the drone be withdrawn after the assault was over.  

Mr. Obama announced last week that about 100 American troops had arrived in Niger in West Africa, next to Mali, to set up a new drone base to conduct surveillance flights in the region.

American officials also sense a possible change of heart by Algerian officials to move away from their longstanding policy not to conduct military operations outside the nation’s borders. Algerian officials recently told the United States that they were prepared to conduct operations in border areas, one American official said.

Mr. Belmokhtar, 40 — sometimes known as “Laaouar,” or the one-eyed, after he lost an eye to shrapnel —  was deemed to be a menace long before he drew international attention for last month’s attack. As the Algerians pressed their campaign against the militants, he took refuge in Mali, where he engaged in smuggling and kidnapped foreigners for ransom, including Robert Fowler, a Canadian diplomat and United Nations special envoy who was abducted in 2008.

By the spring of 2012, northern Mali had become a gathering place for Al Qaeda in the Islamic Maghreb. Other militant factions in northern Mali included Ansar al-Dine, a group largely made up of members of Mali’s nomadic Tuareg minority. Its leader, Iyad ag Ghali, has been officially designated as a global terrorist, the State Department announced  Tuesday.  The growing extremist presence in Mali became an increasing concern for Mr. Ensher as well as for Gen. Carter F. Ham, the head of the Africa Command, and counterterrorism officials at the Pentagon and the State Department.

Michael R. Gordon and Eric Schmitt reported from Washington. Mark Landler contributed reporting from Washington and Adam Nossiter from Lagos, Nigeria.

Read More..