Legal Roundup: Bayer’s Problematic Weedkiller, Facebook Gets Phished, Medical Fraudsters Dupe Roche

A look at some of the recent court cases and legal decisions that have an impact on the industry.
By: | March 31, 2019 • 4 min read

Jury: Roundup Weed Killer Caused Man’s Cancer

The Case: A jury in San Francisco federal court has ruled that exposure to popular weed killer Roundup led to a man’s non-Hodgkin lymphoma diagnosis. Edwin Hardeman used the weed killer for 26 years before falling ill. Liability and damages will be decided in a second phase of the trial. Roundup is owned by Monsanto — which was acquired by Bayer for $63 billion last year.

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“The case was only the second of some 11,200 Roundup lawsuits to go to trial in the United States. Another California man was awarded $289 million in August after a state court jury found Roundup caused his cancer. That award was later reduced to $78 million and is on appeal,” reported Reuters. The company denied that Roundup causes cancer and said it was disappointed in the ruling.

Scorecard: Bayer stock dropped 12 percent on the news and was still falling slightly on Friday. Business Insider explained: “Bayer’s stock has slumped by a third in the past year, wiping more than $20 billion off its market value. Headwinds remain, as the company faces lawsuits from more than 11,000 farmers, home gardeners and landscapers. It’s set to appear in six more trials in federal and state courts this year.”

Takeaway: When you acquire a company, you’re acquiring not only their assets but also their liabilities. Review your deals and make sure to add appropriate M&A and/or R&W covers where they apply.

Man Pleads Guilty to $121 Million Facebook Theft From Fake Invoices

The Case: A Lithuanian man has pleaded guilty to a brazen scheme to steal money from some of the biggest tech companies in the world. Evaldas Rimasauskas used email phishing and fake invoices to get Facebook and Alphabet (Google’s parent company) to send him more than $100 million.

Bloomberg explained: “Prosecutors alleged that Rimasauskas, along with some unidentified co-conspirators, helped orchestrate a scheme in which fake emails were sent to employees and agents of the two tech giants. The thieves pretended to represent Taiwanese hardware maker Quanta Computer. They told Facebook and Google workers that the companies owed Quanta money and then directed payments be sent to bank accounts controlled by the scammers.”

Scorecard: Facebook said it recouped the “bulk” of the $98 million it lost in the scheme, according to Bloomberg. Google lost $23 million and the company declined to comment to Bloomberg.

Takeaway: Cyber attacks can be prevented through extensive employee training. Investing in cyber defense is more imperative today than ever before, as well, since even the big tech giants can face the wrath of a phishing email scam. 

‘Grey Market’ for Diabetes Test Strips Leads to Lawsuit

The Case: Roche, a Swiss maker of diabetes test strips, is suing a number of individuals and companies who allegedly obtained low-cost test strips meant for mail-ordering, then re-sold them at a profit. Roche claims that it had to “wrongfully pay over $87 million in rebates” and lost a similar amount of retail sales because of the alleged scheme, according to Reuters.

Utah’s Alliance Medical Holdings is one company named in the lawsuit. Roche alleges that from 2011 to 2017 Alliance Medical “sought fraudulent reimbursements for 1.84 million 50-count boxes of Roche diabetes test strips.”

Scorecard: Alliance Medical filed for bankruptcy protection in 2017 and there’s no telling how this particular case will turn out just yet.

Takeaway: Health care fraud is a big issue — and companies and authorities are becoming increasingly diligent about sniffing it out.

Nirvana vs. Marc Jacobs: Who Owns That Squiggly Smiley Face?

The Case: Back in December, Nirvana LLC sued fashion designer Marc Jacobs, alleging copyright infringement over the designer’s use of a squiggly smiley face that’s eerily similar to the rock band’s logo. Nirvana alleged copyright infringement, unfair competition, false designation of origin and trademark infringement.

Now, Marc Jacobs has asked the case to be dismissed. Billboard explained: “The designer’s lawyers argue Nirvana does not own the copyright to the smiley face design, that the registration is invalid and, further, that there are pronounced differences between the material covered by Nirvana’s registration and the artwork used by Marc Jacobs.”

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Scorecard: There’s no victor just yet. Some key questions are whether the Marc Jacobs design is different enough than the Nirvana logo (the company changed the “X”s in the eyes to an “M” and “J”) and how the copyright for Kurt Cobain’s design was transferred to Nirvana LLC.

Takeaway: Even something seemingly small, like a logo design, could lead a business into murky waters. Review new designs before they go out to see if they are similar to competitors’ products. Also check your general liability policy to ensure copyright infringement debates are covered just in case.

Jared Shelly is a journalist based in Philadelphia. He can be reached at [email protected]

Risk Matrix: Presented by Liberty Mutual Insurance

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The R&I Editorial Team can be reached at [email protected]