Daily Archives: April 4, 2011

Janus Capital Group v. First Derivative Traders: Supreme Court to Decide Key Questions Regarding Secondary Actor Liability

The scope of securities fraud liability for service providers to publicly held companies (such as investment advisers and attorneys) may increase depending on the forthcoming decision of the U.S. Supreme Court in Janus Capital Group v. First Derivative Traders.  Oral arguments were heard on December 7, 2010, and the Supreme Court will soon decide whether a service provider may be held primarily liable in a private securities fraud action for (1) “helping” or “participating in” another company’s publicly available misstatements or (2) publicly available misstatements that were not directly and contemporaneously attributed to the service provider.

Background

Janus Capital Management Group, Inc. (Janus Capital) is a publicly traded asset management firm that, directly or through subsidiaries, sponsors and markets mutual funds and provides investment advice and other services to those funds.  Janus Capital Management LLC (Janus Management) is a wholly owned subsidiary of Janus Capital that acts as the primary operating company for Janus Capital.  Janus Management serves as the investment adviser for and administrator of various Janus mutual funds.

Shares in the Janus funds were offered for sale by prospectuses that Janus Capital and Janus Management allegedly caused to be issued and made available to the investing public.  The prospectuses for a number of the Janus funds stated that the funds discouraged market-timing trades.1  However, in 2003, the New York State Attorney General charged a hedge fund with market-timing trading in certain Janus mutual funds.  This disclosure allegedly caused investors to withdraw nearly $14 billion from various Janus funds and, as a result, the stock price of Janus Capital fell considerably.

Several Janus Capital shareholders filed private securities fraud actions—which were subsequently consolidated in the District of Maryland—against both Janus Capital and Janus Management.  Specifically, plaintiffs sued Janus Capital and Janus Management, seeking to hold them liable for fraud under Section 10(b) of the Securities and Exchange Act of 1934 and under the Securities and Exchange Commission (SEC) Rule 10b-5.  Plaintiffs alleged that Janus Capital and Janus Management were primarily liable for unlawfully making misleading statements in prospectuses about various Janus funds, most notably that Janus funds’ managers did not permit, and took active measures to prevent, “market timing” of the funds.  Plaintiffs also alleged a “control person” claim against Janus Capital, asserting that Janus Capital controls Janus Management and is responsible for Janus Management’s claimed violations.

Janus Capital and Janus Management argued in response that they were mere outside service providers or “secondary actors,” so they could not be held liable for unattributed misstatements made by the Janus funds in the funds’ respective prospectuses, even if they helped to draft or distribute such misstatements.  The district court dismissed the complaint, holding that the plaintiffs failed to state a claim.

The U.S. Court of Appeals for the Fourth Circuit reversed.  First, the Fourth Circuit found the allegation that Janus Capital and Janus Management “caused mutual fund prospectuses to be issued for Janus mutual funds and made them available to the investing public” to be sufficient to plead that Janus Capital and Janus Management “made” the misleading statements in the prospectuses.  See In re Mutual Funds Inv. Litig., 566 F.3d 111, 121 (4th Cir. 2009).  Second, the Fourth Circuit held that if an interested investor could have attributed the alleged misstatement to the defendant service provider, then it is unnecessary for a plaintiff to allege that the misleading statements were contemporaneously attributable to the service provider.  See id. at 127.  This test is to be applied on a case-by-case basis to determine whether investors “would attribute to the defendant a substantial role in preparing or approving the allegedly misleading statement.”  Id. at 124.  The Fourth Circuit held that Janus Management had a substantial management role and had inherent responsibilities with the Janus mutual funds; therefore, the Fourth Circuit reasoned that an investor could have reasonably assumed that Janus Management had control over the allegedly misleading content placed in the Janus funds’ prospectuses.  Id. at 127.

Issues and Potential Impact

It has long been held that there is no aiding-and-abetting liability in private actions under Section 10(b) of the Securities Exchange Act of 1934.  See Central Bank of Denver, N.A. v. First Interstate Bank of Denver, N.A., 511 U.S. 164 (1944).  When Congress passed the Private Securities Litigation Reform Act of 1995, it allowed the SEC to prosecute aiders and abettors under Section 10(b), but Congress did not provide a private cause of action.  Therefore, a service provider, such as an auditor, attorney, bank or investment adviser, that provides assistance to a company that makes a public misstatement cannot be held liable in a private securities fraud action for that misstatement.  See Stoneridge Inv. Partners, LLC v. Scientific-Atlanta, Inc., 552 U.S. 148 (2008).

If the Supreme Court upholds the decision of the Fourth Circuit, primary liability under Section 10(b) of the of the Securities and Exchange Act of 1934 will extend to an investment adviser where such adviser exercises day-to-day management over a mutual fund.  Taken further, if the Supreme Court upholds the Fourth Circuit decision, the amount of litigation against service providers—such as bankers, lawyers, auditors and accountants who review a company’s public statements—may increase.  Indeed, if the Supreme Court adopts the Fourth Circuit’s test, a private plaintiff may only need to allege that a service provider played a “substantial role” in the drafting, making or disseminating of a misleading public statement in order to sufficiently allege a private securities fraud cause of action against that provider.  On the other hand, if the Supreme Court overturns the Fourth Circuit decision and adopts a more stringent pleading standard for service providers’ liability, that may greatly reduce litigation against and liability of secondary actors in several different fields.

E-discovery since Zubulake – Litigation Holds

The identification and production of electronically stored information (“ESI”) is now part of the everyday landscape of both civil and criminal litigation. In some cases, ESI is printed and provided in paper format to opposing counsel. But as the volume of ESI continues to grow, so does the burden of production. Some surveys indicate that as much as 93% of all business records are stored electronically, and of that amount, less than 30% are ever printed to paper. The average worker receives approximately 55 e-mails every day. For a small business of 100 employees, this translates into approximately 1,375,000 e-mails annually. (See Microsoft, Survey Finds Workers Average Only Three Productive Days Per Week (Mar. 15, 2005) (http://www.microsoft.com) (U.S. workers reported they receive an average of 56 e-mail messages per day).)

The Federal Rules of Civil Procedure concerning the preservation of ESI were amended effective December 1, 2006. The amendments incorporated a number of concepts that were described by Judge Shira A. Scheindlin of the United States District Court for the Southern District of New York, in the case commonly referred to as Zubulake. Zubulake v. UBS Warburg LLP, 220 F.R.D. 212 (S.D.N.Y. 2003).

A number of cases have interpreted these rules changes, but the underlying message is always the same. A litigation hold to preserve ESI must be put into place as soon as litigation is reasonably anticipated. The failure to preserve has resulted in the largest number of cases granting sanctions. “In 230 cases in which sanctions were awarded, the most common misconduct was failure to preserve ESI, which was the sole basis for sanctions in ninety cases.” Sanctions For E-Discovery Violations: By The Numbers, Duke Law Journal, Vol. 60: 789, 803 (2010).

Litigation Holds

The duty to preserve relevant evidence – either paper or electronic – is triggered when civil litigation is commenced or reasonably anticipated. Zubulake, 220 F.R.D. at 216. In the case of Plaintiff, the obligation typically arises when plaintiff anticipates the possibility of litigation. With respect to a plaintiff’s duty, it is more often triggered before litigation commences, in large part, because plaintiffs control the timing of litigation. Pension Comm. of the Univ. of Montreal Pension Plan v. Banc. Of Am. Sec. LLC (“Pension Committee”), 685 F. Supp. 2d 456 (S.D.N.Y. 2010).

The duty to preserve often does not arise until the defendant is served with the complaint. NuCor Corp. v. Bell, 251 F.R.D. 191, 197 (D.S.C. 2009). In most cases, the duty to preserve evidence is triggered by the filing of a lawsuit. Cache La Poudre Feeds LLC v. Land O’Lakes, Inc., 244 F.R.D. 614, 621 (D. Colo. 2007). This means that a formal discovery request is not necessary to trigger the duty to preserve. Krumwiede v. Brigton Assocs., LLC, No. 05-C-2003, 2006 (WL 1308629 (N.D. Ill. May 8, 2006)).

The emerging trends suggest that the duty to preserve evidence may also extend to that period before the litigation when a party reasonably knows that the evidence may be relevant to litigation. Silvestri v. General Motors, 271 F.3d 583, 589 (4th Cir. 2001). For example, prior to filing a complaint, plaintiff’s counsel asks defendant by letter to preserve relevant evidence. Sampson v. City of Cambridge, 251 F.R.D. 172, 181 (D. Md. 2008); PML North America v. Hartford Underwriters Insurance Co., 2006 U.S. Dist. LEXIS 94456 (E.D. Mich. 2006).

In the event the duty to preserve is triggered, outside counsel should take the following steps to comply with his/her obligations and to assure that the client is complying with its preservation obligations.

  1. Outside counsel must immediately issue a Litigation Hold Letter to the client. The Litigation Hold Letter should identify the nature of the claims asserted in the lawsuit, the category of documents that must be preserved, the time period for which the hold should be implemented and the steps that must be taken to implement the hold.
  2. Outside counsel must meet with the client to discuss the nature of the claims and to identify the “key players” who may have been involved with the underlying claims. In addition, outside counsel should meet with the information technology (“IT”) director to determine how the ESI is stored, where it is stored, the ability to retrieve the stored information and the method of producing the data in its native form – the form in which it is stored.
  3. Outside Counsel must coordinate with the client the issuance of a Litigation Hold Notice (the “Notice’) to the key employees who may have been involved in the underlying claim. This Notice must (a) describe the documents that are to be preserved, (b) the location of the documents, (c) the applicable time period during which the documents would have been created or stored, and (d) the identification of the steps that each of the key players must take to comply with the preservation obligation. In some cases, different Notices may need to be issued to different departments to target the hold in more particularity. Outside counsel must also consider notices to former employees who have left the company or transferred out of the department to which the Notice has been issued. These employees and former employees may also have ESI that is relevant to the underlying lawsuit.
  4. Once the Notice is issued, the client should ask its IT director to meet with each of the key players to make copies of their computer hard drives, install the copies on their computers and take custody of the original hard drives. The IT director should also make a backup of any servers including copies of all e-mails created by any of the key players during the applicable time period.
  5. Once the preservation of the hard drives has occurred, outside counsel should conduct interviews with each key player to discuss the nature of the claims and the scope of the litigation hold as it pertains to each individual. The interviews should be designed to determine the extent and scope of documents in the custody or control of each the key players. In particular, counsel should determine what ESI was created by each key player and how each one stored the information they created and maintained. In addition, counsel should determine if there is any ESI that may potentially be the subject of a privilege. The interview must also be designed to determine if there are additional employees who should be designated as key players. Any additional individuals who are identified must be provided with the Notice, their hard drives copied, and they must be interviewed for compliance purposes. Outside counsel should use an interview form that is completed during the interview process. Following the interview, counsel should obtain the signature of the key player to document the interview and the key player’s compliance with the litigation hold obligations.
  6. Outside counsel must send a preservation of evidence letter to opposing counsel. The Preservation Letter should describe the category of documents that must be preserved, the time period for which the hold should be implemented and the steps that must be taken to implement the hold.
  7. Outside counsel must periodically confirm with the client that the ESI which is the subject of the Litigation Hold is continuing to be maintained.

Sanctions for Failure to Preserve Relevant Evidence

The failure to implement the Litigation Hold and to assure that the client is complying with its preservation obligations can result in sanctions. The following is a sampling of recent cases in the Sixth Circuit involving a motion for sanctions for failure to properly implement a Litigation Hold or to assure that the client has continued to preserve documents that are the subject of the litigation hold.

  1. John B., et al., v. M. D. Goetz, Jr., et al., Civil No. 07-6373, 531 F.3d 448, 459 U.S. App. LEXIS 13459 (6th Cir. June, 26, 2008).

    Plaintiffs asserted claims to enforce provisions of the Social Security Act. The parties entered into a consent decree. Plaintiffs sought electronically stored information that was to be provided by Defendants in accordance with the terms of the consent decree. Plaintiffs subsequently moved the Court to enter a contempt order based upon the assertion that Defendants violated the consent decree.

    Sanctions: The Court held that “it is beyond question that a party to civil litigation has a duty to preserve relevant information, including ESI, when that party has notice that the evidence is relevant to litigation … or should have known that the evidence may be relevant to future litigation.” In denying the motion for sanctions, the Court adopted The Sedona Principles: Best Practices, Recommendations & Principles for Addressing Electronic Document Production, Second Edition (The Sedona Conference Working Group Series, 2007) at 70, “noting that sanctions should be considered only if the Court finds a clear duty to preserve, a culpable failure to preserve and produce relevant ESI, and a reasonable probability of material prejudice to the adverse party.”

  2. Anthony Mohrmeyer v. Wal-Mart Stores East, L.P., Civil No. 09-69-WOB, 2009 U.S. Dist. LEXIS 109076 at 8 (E.D. Ky. November 20, 2009).

    Plaintiff sustained a fall in the men’s room in a Wal-Mart Supercenter on March 3, 2008. Plaintiff moved for sanctions when Wal-Mart failed to produce the maintenance log from the restroom. According to Wal-Mart procedures, the maintenance log is a transient document that is destroyed on a weekly basis. Wal-Mart asserted that the document is destroyed according to its routine policy unless it becomes aware of the possibility of litigation.

    Sanctions: The Court denied the motion for sanctions applying Goetz stating, “[i]t is debatable whether the principle recently articulated by the Sixth Circuit in Goetz concerning ESI can be generalized to establish a broader pre-litigation ‘duty to preserve’ all evidence no matter how speculative future litigation may be. Even in Goetz, the court was careful to state that the pre-litigation duty applies only when a party has been put on notice that evidence is relevant to pending litigation, or when the party ‘should have known’ that the evidence may be relevant to future litigation.” The Court went on further to state that “[t]his opinion is not meant to imply that some type of formal notice of the likelihood of litigation must be received in every case before a duty to preserve arises. In the case of an airline disaster, for example, the ‘trigger date’ for the preservation of evidence clearly would be the date of the disaster, because of the high likelihood of litigation following such events.”

  3. KCH Services, Inc. v. Vanaire, Inc., et al., Civil No. 05-777-C, 2009 U.S. Dist. LEXIS 62993 (W.D. KY. July 22, 2009)

    Plaintiff’s president telephoned the defendant, Guillermo Vanegas, Sr., in October 2005 notifying Vanegas of his belief that co-defendant, Vanaire, a competitor, was using KCH’s software without its permission. Following the telephone conversation, Vanegas instructed the Vanaire employees to delete from the Vanaire computers any software that Vanaire did not own or purchase. KCH filed its Complaint a month later and followed up with an evidence-preservation letter to Vanaire.

    Sanctions: The Court held that the October 2005 telephone call was sufficient to put Vanaire on notice of the potential litigation involving KCH’s software. The fact that Vanegas directed the Vanaire employees to delete the software following the telephone call was adequate proof to establish that Vanaire was aware of the problem and the potential for litigation. Following the filing of the Complaint and receipt of the preservation letter, Vanaire failed to preserve e-mails and other electronic evidence by continuing to delete and overwrite the electronically stored information. The Court granted KCH’s motion for an adverse inference instruction concerning the deleted e-mails and software.

Survey of Wrongful Death Verdicts for the Very Young and Very Old

Cook County verdict values for wrongful death cases involving the very young and very old show that there is still large exposure for the right case despite the decedent’s age.  Age has typically been a mitigating factor keeping down verdicts and settlements for cases involving the very young and elderly.  However, after undertaking a review of all verdict results for Cook County in the last five years, the data reveals some very large verdicts despite the age.

It is difficult to make sweeping conclusions from verdict reports alone especially in Cook County because there is such a wide variation from case to case, and of course, each case is dependent upon its own facts and the quality of the defense.  Additionally, it is important to note that the defense is still meritorious about two thirds more often than plaintiff at trial.  Even in Cook County it is still an up hill battle for any plaintiff.  There are also many, many reported settlements much lower than the values listed on the tables below.  However, of the cases that actually went to verdict in the last five years, it is clear there is still significant exposure in the cases that end up as a plaintiff verdict.  Below is a summary of the data for all wrongful death claims in a medical negligence case from 2005 to January, 2011, for children ages 0-9 and adults over the age of 80.

Wrongful Death Ages 0-9

Year Age Type of Case Verdict
2010 7 Days Failure to admit child from ER despite heart desaturations $4,000,000
2010 2 Failure to monitor during CT scan $3,662,221
2009 9 Failure to diagnose necrotizing blastomycosis $4,016,929
2009 Neonate,
14 days		 Failure to diagnose HELLP syndrome in mother (severe pre-eclapsia) $6,171,119
2008 7 Inappropriate conscious sedation $3,000,000
2008 4 Failure to diagnose meningitis $7,000,000 (High/Low by doctor $985K – $1.8)
2007 0, Stillbirth Failure to admit and perform c-section secondary to placental abruption $1,651,166
2007 0, Stillbirth Failure to diagnose placental abruption $1,800,000
2006 2 Failure to advise mother of proper medication instructions $75,000

Of forty-two verdicts reviewed that matched our search criteria of wrongful death between 2005 and 2011 of a child under 9, thirty-three had a not guilty verdict.

Wrongful Death Ages 80+

Year Age Type of Case Verdict
2008 89 Failure to administer proper hypothyroidism medication $1,750,000
2007 84 Failure to monitor while eating/choked $500,000
2007 91 Fall at nursing home/head trauma $454,762
2007 88 Negligence related to off label use of
medication		 $75,000 (after 50% off
$150,000 due to contributory
negligence)

Of thirteen verdicts reviewed that matched our search criteria of wrongful death between 2005-2011 of an elderly adult age 80 or older, nine were a not guilty verdict.

After review of these end of the spectrum wrongful death verdicts, it is encouraging to the defense that the majority of these verdicts were not guilty verdicts.  Also, many more were settled in a range well under $1 million dollars.  However, to dismiss a case as insignificant in value based upon the age of the decedent would be a mistake.  As shown above, hospitals and other health care providers still face significant damage exposure, despite the age of the decedent, in certain scenarios.  To best position our clients litigating these geriatric and pediatric cases, we make every effort to aggressively work up the cases from all angles and mount a reasoned defense supported by well qualified experts early in the litigation process.  We find this aggressive litigation strategy best positions us to be able to resolve the case in a reasonable range and to obtain a not guilty verdict should the case be tried.

International Profit Associates to Pay $8 Million for Sexual Harassment of Eighty-Two Women

First Checks Being Mailed Under Decree Ending One of Longest-Running Sexual Harassment Cases in EEOC History

CHICAGO – The U.S. Equal Employment Opportunity Commission (EEOC) has announced that checks are now being distributed pursuant to an $8 million consent decree entered by federal district judge Joan Gottschall in what is believed to be one of the longest-running sexual harassment cases in EEOC history. Defendant International Profit Associates (IPA), the employer responsible for the sexual harassment of its female employees, is a telemarketer of small business consulting packages, located in Buffalo Grove, Illinois.

The decree provides for payment and distribution of the full $8 million in installments over three years. IPA made initial payments totaling $2.5 million into a professionally administered settlement fund on March 7, 2011, and checks are now being mailed to 82 women who were the victims of the harassment. The decree also provides for wide-ranging injunctive relief against IPA. The company’s compliance with the decree will be overseen by two court-appointed monitors.

“”All employees are entitled to a workplace that is free of sexual harassment,” said EEOC General Counsel P. David Lopez. “Unfortunately, there is a continuing need for law enforcement in this area, and this consent decree makes an important contribution to our mission to eradicate sexual harassment with its strong injunctive relief provisions and the relief provided to the individual women.”

The case (EEOC v. International Profit Associates, N.D. Ill. No. 01-CV-4427), was filed in federal court in Chicago on June 12, 2001 under Title VII of the Civil Rights Act of 1964. The amount of the payments being made today varies with the severity of the harassment suffered by each of the victims, with the highest payments being $70,000 and the average payment being in the range of $30,000. When the final installment payments are made and distributed, the average of all payments per victim will be approximately $100,000 per person.

According to the EEOC, IPA had a pattern or practice of sexually harassing its female employees, and the court made a formal finding to that effect, upon IPA’s concession, on June 14, 2010, prior to trial. The EEOC had alleged that the harassment involved a systemic pattern of sexual assaults and propositions, inappropriate touching, and crude sexual comments. EEOC had also contended that the highest ranking officers of IPA not only fostered a pattern and practice of sexual harassment but personally engaged in the harassment themselves.

There were extended delays in the more than nine year course of the litigation, as IPA filed numerous motions which the EEOC described as frivolous. These included a series of unsuccessful motions for sanctions by which IPA asked the court to punish EEOC in connection with the agency’s pursuit of the case. Trial of the case began on July 6, 2010. On the first day, in the middle of jury selection, IPA advised the EEOC and the court that it was willing to meet EEOC’s demands.

The balance remaining due on the $8 million decree is being personally guaranteed by the principal founder, owner, and chief executive of IPA He has, in addition, secured his personal guaranty by signing mortgages on certain of his personal real estate interests.

John Hendrickson, EEOC regional attorney in Chicago, said, “We are convinced that the $8 million consent decree in this case—yielding more dollars per person that either our Mitsubishi or Dial sexual harassment cases—is an excellent result, but we cannot find anything positive to say about the fact that an employer strung out a piece of civil rights litigation in the federal courts for almost 10 years.”

“But whatever the employer’s strategy,” Hendrickson continued, “the EEOC never waivered. We were determined to pursue a just result which provided appropriate relief for the victims of IPA’s discrimination and served the public interest no matter how long it took. We were not going to go away. IPA’s obstruction and delay never really figured in our expectations in the case, and that will continue to be true, just as it is in all of our cases.”

Diane Smason, the EEOC supervisory trial attorney responsible for the case, said “The claims in this case were based on allegations of absolutely egregious sexual harassment. We wanted the relief provided for in the consent decree to be appropriate in that context. We also wanted the relief to reflect the fact that the court itself made a specific finding that IPA had engaged in a pattern or practice of discrimination. The decree and the fact that that sizeable checks are going out to the victims of IPA’s discrimination are signal achievements. It’s going to be a better day for all the women covered by the decree.”

The consent decree includes injunctions against sexual harassment and retaliation, and measures designed to promote the eradication of harassment and accountability on the part of managers. It requires that IPA pay for two monitors who will review its policies and practices with respect to sexual harassment, assess its compliance with the training, prevention, and other measures being imposed, accept complaints of sexual harassment from employees, and report to the EEOC and the court. IPA must also report regularly to the EEOC on its handling of sexual harassment complaints. In the event IPA fails to measure up to the legal standards memorialized in the decree EEOC is authorized to return to court to seek additional court enforcement.

In addition to Hendrickson and Smason, the case was litigated by Chicago trial attorneys Jeanne Szromba and Ann Henry, with trial attorney Aaron de Camp joining the team prior to the scheduled trial.

Microsoft V. i4i – Prosecution And The “Variable Proof Regime”

The Government recently weighed in on this important appeal with its amicus brief, signed by Neal Katyal, Acting Solicitor General.  The question posed is simply: “Whether, when the defendant [here Petitioner i4i] in an infringement suit asserts as a defense that the relevant patent is invalid, the defendant must prove invalidity by clear and convincing evidence.”

The major portion of the brief argues “clearly and convincingly” that both precedent and legislative history compel a finding that the clear and convincing (C&C) standard is the appropriate burden of proof for the defendant to meet, even when the defendant introduces evidence of invalidity that was not before the PTO during the examination process – even though the new evidence may “carry more weight and go further toward sustaining the attacker’s unchanging burden.” American Hoist & Derrick Co., 725 F.2d 1350, 1360 (Fed. Cir. 1984).

However, as is often the case, some of the most interesting writing is found in the footnotes, or toward the end of the brief, when the “mechanics” and practical implications of lowering the C&C standard to the “examination standard” of a preponderance of the evidence are discussed. In footnote 7, the Solicitor considers the situation in which some of the evidence was previously considered and some was not:

“If the heightened evidentiary standard was treated as a sort of ‘bursting bubble’ that converts to a preponderance standing if the defendant introduces any new evidence of invalidity, the exception would swallow the rule, since the party [asserting invalidity] will almost always be able to identify some arguably relevant prior art that was not presented to the PTO Examiner…..And even if the defendant … relied exclusively on materials that were not before the PTO examiner, difficult questions might arise as to whether those materials differed substantively from information that the examiner did consider. Any regime in which the standard of proof turns on whether particular evidence was before the PTO could also hinder the examination process by encouraging applicants to indiscriminately submit prior art references to the PTO, without regard to relevance.”

This footnote is so loaded with practical wisdom, it seems like someone in the Solicitor’s office must have actually prosecuted a patent application at some point! Particularly in the case of clients who self-generate lots of prior art, such as university inventors, an attacker will almost always be able to find one more abstract or even a popular local article reporting the invention. Even if the abstract or article is less detailed than the full papers the prosecuting attorney sent in, it may well contain a sentence or two of additional results, or even speculation as to “theoretical solutions” (See Duramed v. Watson).

Now the new art it is not “cumulative” and may be arguably material to at least one claim. Oh, and by the way, Mr. Solicitor, I am sorry to say that we prosecutors are already highly motivated to “indiscriminately submit prior art references to the PTO” by decisions such as McKesson and Therasense. Believe me, we are not ignoring “relevance” entirely, but if it is “analogous art” (which seems nearly borderless these post-KSR days), it is going in on a 1449. The Examiner may not read every word, but we know that the defendants will.