Comprehensive economic analysis performed by Secretariat expert Dr. Anup Malani and the Secretariat team demonstrates that a permanent injunction is warranted.
Natera, Inc., which specializes in cell-free DNA testing technology, sought a permanent injunction against competitor Invitae Corp. At a trial held in Delaware district court earlier this year, Invitae was found to infringe Natera’s patents. Revolutionary cell-free DNA detection methods have the potential to detect cancer prior to conventional diagnostic methods, and thereby have the potential to significantly improve patient outcomes. Secretariat* and attorneys at McDermott Will & Emery presented a comprehensive analysis in support of a permanent injunction on Invitae’s PCM product.
After considering Secretariat’s analysis and the legal arguments of Natera’s attorneys, U.S. District Court Judge Gregory B. Williams granted Natera a permanent injunction.
For a permanent injunction to be granted, the patent holder must demonstrate that (1) it faces irreparable injury, (2) there is no adequate remedy under the law to cure the irreparable injury, (3) the balance of hardships favors the patent holder, and (4) the public interest would not be harmed if an injunction is granted. Secretariat evaluated each of these factors.
For irreparable injury and lack of adequate remedies under the law (factors 1 and 2), Secretariat evaluated harms that Natera would face in the absence of an injunction and whether those harms were quantifiable and compensable via an award of damages. Secretariat’s analysis involved evaluation of the complex and unique dynamics of the marketplace in which PCM competes, first-mover advantages, the competitive relationship between the parties, and the nexus between the alleged infringement and the harms faced. Based on the analysis performed, Secretariat determined that Natera would face irreparable injury in the absence of an injunction and that remedies under the law were insufficient to compensate Natera for the irreparable injury. Judge Williams agreed, noting that “Natera would suffer irreparable injury if the legacy PCM is not enjoined. The PCM market is nascent, and there are significant first-mover advantages. … That Natera and Invitae are competitors and Natera has lost market share strongly suggests irreparable harm.” Judge Williams also determined that “the remedies available at law are unable to adequately compensate Natera.”
For the balance of harms (factor 3), Secretariat evaluated the harm Natera would face in the absence of an injunction relative to the harm Invitae would face if an injunction was granted. Secretariat determined that the balance of harms favored Natera. Judge Williams agreed, noting that “[w]hen the harms an infringer faces are ‘almost entirely preventable’ and triggered by a ‘calculated risk to launch its product pre-judgment,’ the balance of hardships strongly tilts in favor of the patentee.”
For the public interest (factor 4), Secretariat evaluated if an injunction would harm patients and if there were alternative treatment options available to patients should the injunction be granted. Secretariat determined that the public interest would not be harmed by an injunction on PCM, in large part, because Natera’s competing product, Signatera, could be substituted in place of PCM. Judge Williams agreed, noting that Natera’s competitive product, Signatera, appears to be equally accurate, covers all the same diseases, and has sufficient capacity to meet the market’s needs.”
Invitae was allowed to continue using PCM in ongoing clinical trials, for updating old studies, for quality control purposes, and for patients already using PCM.
The permanent injunction follows a $19 million infringement verdict against Invitae where Secretariat expert Dr. Ryan Sullivan provided expert testimony at deposition and at trial relating to damages. Dr. Malani and Dr. Sullivan were supported by Managing Director Aminta Raffalovich, Vice President Dr. Anushree Subramaniam, Vice President Dr. Matt Farber, Director Dr. Stephanie Khoury, Director Robert Flanagan, Economist Dr. Kyle Kost, Manager Maxwell Urman, and Senior Associate Nathaniel Tolles.
Law360 coverage and a link to the Order granting the permanent injunction (subscription may be required) is available here.
*Work was performed by team members at Intensity LLC. Intensity is part of Secretariat.
We are pleased to announce the expansion of our Dubai office by establishing a new team focused on global investigations and compliance services. The team is led by the recent additions of recognized global experts Bhavin Shah, Stephen Millington, and May Mhanna, each joining as a Managing Director.
Bhavin Shah’s career spans more than 20 years, helping clients navigate intricate legal matters, conduct multi-jurisdictional investigations, steer regulatory negotiations, manage crises, and implement robust anti-money laundering (AML) strategies. His global experience includes working with Boards of Directors, CXOs, government regulators, and leading law firms that span multiple industries, including financial services, sovereign wealth funds, public sector entities, and governmental institutions. He has advised on high-profile corporate failures, enforcement actions, regulatory monitorships, and regulatory remediation plans for well-known global brands and financial institutions.
Stephen Millington is an expert in forensic accounting, financial investigations, and disputes with more than 20 years of experience. Working internationally throughout his career, including being based in the Middle East for more than a decade, he has led numerous cross-border investigations requiring the unraveling of complex structures and transactions, including tracing those transactions through multiple entities and jurisdictions. He has advised executives, Boards of Directors, regulators, and government bodies on the best strategies for approaching these investigations and recovering funds. Having worked across a range of industries he is known for his methodical approach to solving complex financial problems, achieving effective resolutions, and recovering funds.
May Mhanna brings more than 17 years of experience advising clients across the Middle East and North Africa (MENA) region on financial and operational engagements. Her expertise spans a range of clients, including governmental bodies and national and multinational enterprises, predominantly within financial services and public sectors. Her expertise covers forensic investigations and monitorships, crisis management and special situations, large-scale remediation reviews, financial crimes and anti-money laundering (AML), corporate strategy, and public policy advisory.
“The addition of this distinguished and talented team is a natural expansion of our ability to address clients’ complex risk, regulatory, and legal challenges with world-class investigative and compliance skills that span industries and geographies,” says Secretariat Managing Director Don Harvey. “Each team member is a trusted advisor to their renowned law firm, corporate, and institutional clients, adding great depth to the dynamic talent we have at Secretariat.”
Speaking on behalf of the team, Managing Director Bhavin Shah says, “Secretariat’s stellar reputation and multidisciplinary capabilities are second to none. The firm is the ideal platform for us as we expand how we help clients address the high-stakes investigative and regulatory matters they face daily.” Managing Director Stephen Millington adds, “The opportunities for our team to put their expertise to work and grow their careers are endless with Secretariat. We are excited to help the firm grow in the MENA region and beyond.”
The team will operate from a new office located in the Dubai International Finance Centre (DIFC) at Unit 1207, Index Tower.
Secretariat is proud to serve as a Gold Sponsor for the 5th Edition of LawInSport’s Sports Law Arbitration Moot.
The SLAM Grand Finals of the competition take place on 12-13 April 2024 at the Court of Arbitration for Sport in Lausanne, Switzerland. The SLAM is a student moot competition, organised to promote greater knowledge of the values and rules of international sports arbitration, the go to dispute resolution mechanism in the sector.
On December 18, 2023 the Federal Trade Commission and Department of Justice (collectively, the Agencies) released the 2023 Merger Guidelines.[1] The new guidelines are a modification of the draft Merger Guidelines published in July 2023 and replace the 2010 Horizontal Merger Guidelines and the 2020 Vertical Merger Guidelines. A previous Secretariat client alert described changes in the Agencies’ approach to market definition that were contemplated in the draft Merger Guidelines. That previous Note is available here.
This note provides an update to our previous discussion. While the details of the hypothetical monopolist test have been moved out of an appendix and into the body of the document, the approach to market definition changed very little between the July 2023 draft and the final versions. Thus, our earlier Note’s analysis holds as much for the final Merger Guidelines as it did for the July 2023 draft Merger Guidelines. We will not repeat all that we said in that earlier Note, so for readers interested in those details we recommend our previous Note. Here we will only touch on the most significant points.
Broadly speaking, the new Merger Guidelines allow more leeway in how the Agencies can define relevant antitrust markets.[2] In a discussion piece, Susan Athey and Aviv Nevo (respectively, the Chief Economist of the Antitrust Division and the Director of the Federal Trade Commission’s Bureau of Economics), state that this “gives the Agencies the option to focus on the loss of competition between the parties rather than fight over how narrowly a market could be properly defined.”[3] Aviv Nevo explained in an FTC/DOJ workshop that the benefit of this approach is that in cases where market definition is difficult, the new merger guidelines allow the Agencies to define a broad market and focus on the competitive effects.[4] Nevertheless, in our experience, the agencies rarely challenge a horizontal merger where the shares in the claimed market do not meet the threshold for a presumptive concern. It is not clear to us that the 2023 Guidelines make merger challenges easier when mergers that fall below the relevant market share thresholds.
Our view, articulated in the previous Note, is that the added discretion over market definition is not necessarily an advantage for the Agencies or private plaintiffs, who bear the burden to substantiate their claimed markets.[5] While we understand that in the 2023 Merger Guidelines the Agencies seek to argue that there is not necessarily a unique antitrust market for a particular case,[6] in antitrust cases courts commonly view market definition as one of the primary areas of dispute. As it is well established in the case law, that view will be slow to change. Less specificity in the 2023 Merger Guidelines might increase the scope for dispute potentially making it harder for plaintiffs to establish that their market definition is correct.
More specifically, the new Merger Guidelines no longer include the smallest market and circle principles. The smallest market principle (described in the 2010 Horizontal Merger Guidelines §4.1.1) allowed practitioners to distinguish among several potentially valid markets and identify a relevant antitrust market by establishing that it should be no bigger than necessary to satisfy the test. Removing the smallest market principle potentially opens the door to broader markets.
The circle principle holds that for any two products (A and B) in an antitrust market, other products should also be included in the market if they are closer substitutes to A than B is to A. In contrast to the potential effect from removing the smallest market principle, removing the circle principle potentially opens the door to narrower market definitions by excluding some products that would have otherwise been included in the market.
The removal of both principles takes away some of the specificity that had been previously included. Other changes to the Agencies approach to market definition in the 2023 Merger Guidelines include the addition of One-Stop markets and markets involving bundled goods as potentially relevant antitrust markets. While such markets were sometimes defined in practice, it is not clear to us how their inclusion in the Guidelines will affect merger enforcement going forward.
[1] See, U.S. Department of Justice & Federal Trade Commission, Merger Guidelines, (2023) (henceforth Merger Guidelines), available at https://www.ftc.gov/system/files/ftc_gov/pdf/P234000-NEW-MERGER-GUIDELINES.pdf ; Federal Trade Commission, Federal Trade Commission and Justice Department Release 2023 Merger Guidelines, December 18, 2023, available at https://www.ftc.gov/news-events/news/press-releases/2023/12/federal-trade-commission-justice-department-release-2023-merger-guidelines.
[2] The new Merger Guidelines also introduced the concept of a small but significant and non-transitory increase in price or other worsening of terms (“SSNIPT”). Merger Guidelines supra note 1, §4.3.A. It replaces the small but significant and non-transitory increase in price (“SSNIP”) from previous guidelines that was used to describe the change in price used in the hypothetical monopolist test. While perhaps not explicit in previous guidelines, we believe it was well understood by antitrust economists and lawyers that, even under previous guidelines, one could perform the hypothetical monopolist test by adjusting the non-price terms of trade if the situation warranted it. Thus, it is not clear to us that this change will have much of a practical effect on the implementation of the hypothetical monopolist test.
[3] See, Susan Athey & Aviv Nevo, DOJ and FTC Chief Economists Explain the Changes to the 2023 Merger Guidelines, ProMarket, December 19, 2023, available at https://www.promarket.org/2023/12/19/doj-and-ftc-chief-economists-explain-the-changes-to-the-2023-merger-guidelines/
[4] See,DOJ/FTC 2023 Draft Merger Guidelines Workshop, September 5, 2023. Video available at https://www.ftc.gov/media/draft-merger-guidelines-workshop-september-5-2023
[5] The burden of proof is closely tied to the ability to infer loss of competition from evidence and facts by using analytical tools, such as probability and statistics. See, for example, Merger Guidelines supra note 1, §1 & ft. 7.
[6] See, for example, Merger Guidelines supra note 1, §4.3. “Market definition ensures that relevant antitrust markets are sufficiently broad, but it does not always lead to a single relevant market.”
40 Secretariat experts have earned the distinction of being included in the Who’s Who Legal Arbitration 2024 report, the industry’s leading list of arbitration professionals.
Overall, this outstanding performance positions Secretariat as the No. 2 ranked Expert Firm with the same top position in WWL’s high-profile categories of Global Elite Thought Leaders and Future Leaders. WWL’s Arbitration 2024 report highlights the world’s leading arbitration experts through an analysis of the market and references given by clients.
Global Elite Thought Leaders
Mike Allen
Alexander Demuth
Amit Garg
Howard Rosen
Mike Saulsbury
Kiran Sequeira
Recommended
Chaitanya Arora
Drew Baiter
Ben Burley
Neil Gaudion
Don Harvey
Terry Hawkins
Liam Holder
Mrinal Jain
Mehmet Karakoc
Julius Koo
Michael Kling
Chris Larkin
Chris Milburn
Nishad Morjaria
Alexandre Rivière
Paul Roberts
Garrett Rush
Ted Scott
Joe Skilton
George Taft
Mark Taylor
Travis Taylor
Eddie Tobis
Meera Wagman
Future Leaders
Kagan Aktas
Paul Baez
Conrad Bromley
Bryan D’Aguiar
Stuart Dekker
Miao Gu
Abi Harris
Gregory Johnson
Alexander Messmer
Stephanie Tombling
Three Secretariat experts have been honored with the 2024 Lexology Client Choice Award. Congratulations to the members of our team who have earned recognition in the following categories:
Drew Baiter
Arbitration Expert Witnesses (Mexico)
Joel Glover
Construction – Expert Witnesses (Australia)
Howard Rosen
Energy – Experts (Canada)
Established in 2005, Lexology’s Client Choice Awards recognize the excellent client care the recipients provide, the quality of their service, and their ability to add real value to clients’ business. This year’s winners were chosen from a pool of more than 2,000 individual client assessments.
We are proud to announce Secretariat has been named the Construction Expert Witness Firm of the Year 2023 by Who’s Who Legal (WWL). Each year, WWL issues awards that recognize the very best in the international legal and expert witness profession across dozens of practice areas and jurisdictions.
“This is a significant milestone in Secretariat’s history,” said Secretariat Managing Director Don Harvey. “It has been made possible through the dedication, unwavering client service, and deep expertise of the best talent in the business. It also reflects the values we instilled in the firm when we were founded, including a commitment to collaboration and delivering the highest quality work. These are the qualities that define our culture and make me proud of our team every day.”
Originally founded as a specialized construction delay advisory firm, today Secretariat has grown to become one of the most trusted firms handling complex construction dispute matters around the world. The firm’s extensive global team specializes in large-scale construction disputes with a focus on delay and quantum analysis, international arbitration and litigation, as well as standard of care, government contracting, and forensic and economic damages. This includes 43 professionals recognized by WWL for their excellence in construction, including 13 in the most prestigious category of Global Elite Thought Leaders – more than any other expert services firm.
This year’s WWL Awards ceremony was held at the Honourable Artillery Company on 9 November in London. Proceeds from the awards are donated to the Swawou School for Girls in Sierra Leone.
Secretariat is pleased to welcome delay expert Nelson Gallardo to the firm’s Construction practice. Joining as a Managing Director based in Atlanta, Gallardo’s addition significantly expands the firm’s experience addressing construction and infrastructure projects in the United States and Latin America.
Nelson is a construction expert witness specialized in international arbitration and dispute resolution regarding large industrial, infrastructure, and commercial projects typically ranging from $100 million to $5 billion in construction costs. He brings more than two decades of experience of advising contractors, owners, and governmental entities in infrastructure projects in the United States and Latin America, including Mexico, Honduras, El Salvador, Dominican Republic, Panama, Colombia, Peru, Chile, Brazil, and Uruguay. He has provided expert testimony on schedule delay, lost productivity, disruption, contract terminations and economic damages in multiple international arbitration forums including ICC, ICSID, UNCITRAL, AAA, AMCHAM and the Chambers of Commerce of Bogota, Lima, and Santiago.
Recognized for years as a “Global Leader – Construction Expert Witness” by Who’s Who Legal, clients and peers have said Nelson “has extensive experience in delay analysis of infrastructure and construction projects” and “possesses the ability to analyze many criteria and fact in a logical way.”
According to Secretariat Managing Director Don Harvey, “I couldn’t be more excited to welcome Nelson as the latest addition to Secretariat’s top-notch construction practice. He has an impressive track record of helping clients understand the intricacies of large-scale construction and infrastructure disputes. Adding Nelson to the team is proof of how deep and talented Secretariat’s industry-leading Construction practice in truly is today.”
The settlement of United States of America v. Teva Pharmaceuticals USA, Inc. and Glenmark Pharmaceuticals Inc., USA, a price-fixing case that involved numerous generic drugs, including pravastatin, was described by DOJ as “the largest to date for a domestic antitrust cartel.”* Under the settlement, Teva is to pay a $225 million criminal penalty and donate $50 million worth of drugs, and Glenmark is to pay $30 million. In addition, Teva and Glenmark will be required to divest their respective versions of a generic cholesterol drug, pravastatin, that was part of the alleged conspiracy.
Secretariat Economists (SE) played a major role in estimating damages for this matter. In particular, SE economists Philip Nelson, Paul Godek, and Stephanie Mirrow worked with Professor John Mayo of Georgetown University, DOJ economists, Evan Gee and Peter Woodward, and DOJ Financial Analyst Joanne Legomsky to evaluate the damages associated with the alleged collusion. SE economists also worked with DOJ attorneys Matthew Lunder, Thomas Tynan, Michael Sawers, Barry Joyce, Mark Grundvig, and Julia Maloney in preparation for the presentation of damages estimates at the trial, which was scheduled to occur in May 2024.
Dr. Jennifer Vanderhart provided trial testimony on behalf of Moonbug in copyright litigation involving the copying of CoComelon characters, songs, and more.
Secretariat was retained by Tyz Law Group PC on behalf of Moonbug Entertainment in a copyright litigation alleging BabyBus (Fujian) Network Technology Co. Ltd. built an entertainment brand that copied numerous Moonbug copyrights including CoComelon characters, plot devices, and songs. The jury found BabyBus willingly infringed dozens of Moonbug’s copyrights and awarded a total of $23,568,114. During its work, Intensity calculated economic damages from disgorged profits and also from actual damages stemming from lost YouTube advertising and lost licensing and merchandising profits.
Dr. Jennifer Vanderhart submitted numerous reports and provided expert testimony at deposition and at trial. Dr. Vanderhart’s work was supported by Vice President Karthik Padmanabhan, Economist Kira Stearns, Manager Max Urman, and Associate Peter Hawkins.
Following a nearly four-week trial in the Northern District of California, the jury delivered a verdict in favor of Moonbug Entertainment.
The case is Moonbug Entertainment Ltd. v. BabyBus Co., Ltd., Case No. 3:21-cv-06536-EMC.
Law360 (subscription may be required) and Bloomberg Law coverage may be found here and here.
Secretariat Managing Director Keith Waehrer and Professor Carl Shapiro (University of California, Berkeley, Haas School of Business) authored the chapter “Using and Misusing Microeconomics: Federal Trade Commission v. Qualcomm” in the recently published book “ANTITRUST ECONOMICS AT A TIME OF UPHEAVAL: Recent Competition Policy Cases on Two Continents” from Competition Policy International.
With significant changes in competition policy happening on both sides of the Atlantic over the past decade, antitrust economics has played an increasingly prominent role in the reasoning of regulators and courts. This book features contributions from leading antitrust economists who have been involved first-hand in groundbreaking merger, monopolization, and anticompetitive-agreement cases that have shaped this era.
Edited by John Kwoka, Jr., Tommaso M. Valletti, and Lawrence J. White, eds, the volume is available here.
Managing Directors Stuart Dekker, Joe Skilton, and Eddie Tobis authored the chapter “Compensation for Expropriation” in the 8th Edition of The Investment Treaty Arbitration Review.