Tuesday, 14 July 2020

Act Now! Listerine Royalty Share Available for Purchase!

This is absolutely fantastic!  An opportunity from Royalty Exchange to purchase at auction a share of the royalties from the famous Listerine mouthwash contract.  The Listerine case is one that is still taught in IP classes in the United States as a BEWARE case.  You only have three hours left to bid and it's over $300,000!  Details are below.

Starting Price:

Bidding Increment:
End Date:
Jul 14, 2020, 3:00 PM MDT
Dollar Age:
139 Years
Last 12 Months' Royalties:
Investment Term:
Perpetual (See Note Below)
Johnson & Johnson
Rights Included:
Sales Royalties (See Note Below)
Interests Included:
Royalty Holder (World)
First Distribution (paid 30 days from receipt):
July 15, 2020
Distribution Frequency:
Buyer Fees:
1% of closing price or $500 (whichever is greater)‡§

Investors placing the opening bid on any listing pay no buyer fee if they win the resulting auction, a savings of 1% off the final price (minimum $500). All Access members who already receive this discount will be rewarded with a cash rebate equal to the buyer fee.

§ Become a Royalty Exchange All Access Investor to waive auction fees and enjoy additional exclusive benefits.


Up for bid is a very unique asset with a nearly 140-year earning history, generating monthly payments for the lifetime of the brand.

It’s an opportunity to collect royalty income derived from what has been called one of the most remarkable business transactions in U.S. business history. As the winning bidder, you’ll own a royalty interest in the gross global sales of Listerine Antiseptic mouthwash. 


  • 139-Year Dollar Age
  • Monthly Payments
  • Perpetual investment term, as long as Listerine is sold


Annual earnings for this asset have remained remarkably consistent over the past 5 calendar years — averaging just over $30,000/year from 2015 to 2019. What’s more, looking at the last three years of monthly payments, there is a very low variance year to year. 

U.S. generated royalties are paid monthly, based on the prior months’ sales. Royalties from sales in all other countries are paid on a quarterly basis. 

As a result, you’ll notice a spike in payments in the first month of every quarter (January, April, July, and October) due to those quarterly foreign royalty payments.


The history of Listerine brand royalties is one of contract law legend. 

In 1881, Dr. JJ Lawrence invented Listerine and licensed the secret formula to J.W. Lambert and Lambert Pharmaceutical Co., ultimately settling on a royalty based on the number of ounces sold, to be paid to him and his “heirs, executors, or assigns” for as long as Listerine was sold.

For the next 75 years, the Lawrence family collected these royalties, with the ownership stake splintering between various heirs, some of whom sold portions of their stake to additional owners (such as New York real estate broker John J. Reynolds, who acquired half of the share of these royalties from the Lawrence heirs in 1950). 

After Lambert Pharmaceutical merged with Warner-Hudnut in 1955, the newly merged management contested the $1.5 million a year they were paying in royalties in court… a case they famously lost in a decision that remains cited in contract law cases and classes today. 

As a result of this decision, the Listerine royalty payments will remain in force for the lifetime of the brand, paid to whoever owns a share. Today, those entities include not only the heirs of the Lawrence family, but also various pension funds, universities, hospitals, and multiple individuals. 

This is your chance to be part of this exclusive group. 

Key Drivers

Consumer Staple. The royalty interest being sold is derived from an 1881 agreement between the inventor of the Listerine formula and the original distributor of the Listerine product. The royalty agreement calls for a flat rate royalty based on the ounces of Listerine sold worldwide, for as long as Listerine is sold. 

According to Statista, Listerine is the leading mouthwash/dental rinse brand in the U.S., with 2018 sales of $354 million. That’s nearly twice that of the second-place brand.

It's important to take into consideration that this income stream will only continue to pay out for as long as the Listerine Antiseptic mouthwash is sold. 

Dollar Age. This asset has a Dollar Age of 139 years, with payments made consistently since 1881. A high Dollar Age like this suggests stability and longevity.

What’s more, this asset has already survived a landmark court case contesting this royalty payment. In 1959, a federal court ruled that Listerine’s distributor— Warner-Lambert Pharmaceutical—must continue to abide by the original 1881 royalty agreement despite the fact that Listerine’s formula had previously been made public. 

So unlike music royalties, the copyright for which lasts the lifetime of the last surviving author plus 70 years, these royalties will pay in perpetuity for as long as Listerine is sold.

Monthly Payments. These sales royalties are calculated on the gross sales of Listerine Antiseptic and paid on a monthly basis (for U.S. sales) by Johnson & Johnson. This is something noteworthy to prospective investors, as you’ll continue to collect income from this asset each month.


A royalty interest in gross sales of Listerine Antiseptic. The royalty interest is derived from an 1881 agreement between the inventor of the Listerine formula and the original distributor of the Listerine product. The royalty agreement calls for a flat rate royalty on each gross of Listerine sold worldwide, for as long as Listerine is sold. The agreement has been in effect since 1881, and in 1959 its perpetual nature was upheld in U.S. federal court.

About the Royalty Distributor

Johnson & Johnson is an American multinational corporation founded in 1886 that develops medical devices, pharmaceutical, and consumer packaged goods. The corporation includes some 250 subsidiary companies with operations in 60 countries and products sold in over 175 countries. Johnson & Johnson's brands include numerous household names of medications and first aid supplies, including the Listerine brand. 

Free U.S. Judicial Panel on Halo, Alice and FRAND

Winston and Strawn are cohosting a free webinar titled, “Judicial Panel: Grappling with the Uncertainties Created by Halo, Alice and Frand” on July 28, 2020 at 3:00 pm EDT.  The description and registration information follows: 

Please join Kathi Vidal, managing partner of Winston & Strawn’s Silicon Valley office, the Federal Circuit Bar Association, and the Berkeley Center for Law and Technology in cooperation with The Sedona Conference® for a panel discussion on the hard topics confronting the patent system today.

Sign up for this event here.

Federal Circuit Appellate Judge Kathleen M. O’Malley and Federal District Court Judges Alan D. Albright (TXWD) and Cathy Ann Bencivengo (CASD) will join The Sedona Conference Patent Litigation Working Group Chairs Matt Powers and Eric Hutz for an engaging discussion on the current state of play for willfulness, patent eligibility, FRAND, and ways to manage the uncertainty of each.

Topics of discussion may include: 

  • How should Halo be applied at the pleading stage, at summary judgment and at trial?  
  • Is 101 the best way to weed out weak patents early, efficiently, and accurately? 
  • Are U.S. courts ceding global FRAND determinations to courts of other countries?

A webinar is a complimentary interactive seminar offered by Winston & Strawn LLP over the Internet. You'll watch and listen to the presentation at your own computer.

Winston & Strawn LLP is an accredited CLE provider in California, Illinois, New York, and Texas.

Friday, 10 July 2020

New US $1 Billion Fund to Finance Development of Antibiotics

The Biotechnology Innovation Organization has issued a press release announcing the creation of essentially a US $1 billion fund to finance the development (particularly late stage) of antibiotics.  The press release states: 

Today more than 20 leading biopharmaceutical companies announced the creation of an estimated $1 billion fund to help support the pipeline for new antibiotic treatments. The AMR Action Fund was launched as the threat of antimicrobial resistance, or AMR, continues to grow and claim more lives. In response to today’s launch of the fund, BIO issued the following statements celebrating the news:

“Antimicrobial resistance is one of the largest and looming public health threats we face today,” said BIO President and CEO Dr. Michelle McMurry-Heath. “Even as the world’s scientists work tirelessly to fight COVID-19, we must not ease up on our battle against antimicrobial resistance. Just as we’ve seen our industry step up during the pandemic, I applaud these biopharmaceutical leaders and partners for committing to the development of new antibiotics. The AMR Action Fund will provide critical support for the development of new medicines, but it is up to policymakers to enact the long-term changes needed to support healthy, sustainable markets for the future development of new and effective antibiotics.”

“For years, we’ve watched antimicrobial-resistance infections rapidly rise around the world, while the market has slowly shrunk for new medicines to fight them,” said Greg Frank, Director of Infectious Disease Policy at BIO & Director of the Working to Fight AMR campaign. “Today’s new AMR Action Fund will have a tremendous impact on the development of new antimicrobials, but we still need government to implement new policies and incentives so companies can successfully develop, test, and launch new antimicrobial products.”

Biopharmaceutical companies and foundations supporting the fund are:

Almirall, Amgen, Bayer, Boehringer Ingelheim, Chugai, Daiichi Sankyo, Eisai, Eli Lilly and Company, GlaxoSmithKline, Johnson & Johnson, LEO Pharma, Lundbeck, Menarini, Merck, MSD, Novartis, Novo Nordisk, Novo Nordisk Foundation, Pfizer, Roche, Shionogi, Takeda, Teva, and UCB

For more details on the AMR Action Fund, visit www.AMRActionFund.com.

Thursday, 9 July 2020

Third QMIPRI Webinar on IP Responses to Covid-19: Co-ordinating Access

Third QMIPRI Webinar on IP Responses to Covid-19: Co-ordinating Access

Webinar Details 

Date: Tuesday 14 July 2020
Time: 12:00 - 13:15 BST

The panel will examine mechanisms for co-ordinating access via international IP agreements, how international investment protection might interfere with national access measures, why it is important to adequately manage the public interest in technology transfer agreements, and how 3D printing can help fight the pandemic.

Duncan Matthews, Professor of Intellectual Property Law and Director of the Queen Mary Intellectual Property Research Institute
Roya Ghafele, Director of OxFirst
Rochelle C. Dreyfuss, Pauline Newman Professor of Law, New York University School of Law and Arthur Goodhart Visiting Professorship in Legal Science (2019-20), University of Cambridge
Henning Grosse Ruse-Khan, Reader in International and European Intellectual Property Law and Co-Director of Centre for Intellectual Property and Information Law, University of Cambridge
Dinusha Mendis, Professor of Intellectual Property and Innovation Law and Co-Director of the Centre for Intellectual Property Policy and Management, Bournemouth University
Book Here for Free:

US FTC and DOJ, Antitrust Division, Release Vertical Merger Guidelines

The U.S. Federal Trade Commission and the Department of Justice, Antitrust Division, have released updated vertical merger guidelines.  The Press Release concerning the guidelines states, in relevant part: 

Vertical mergers combine two or more companies that operate at different levels in the same supply chain. A primary goal of the new Vertical Merger Guidelines is to help the agencies identify and challenge competitively harmful mergers while avoiding unnecessary interference with mergers that either are competitively beneficial or likely will have no competitive impact on the marketplace. To accomplish this, the guidelines detail the techniques and main types of evidence the agencies typically use to predict whether vertical mergers may substantially lessen competition. The Guidelines will help businesses, antitrust practitioners and other interested persons by increasing transparency into the agencies’ principal analytical techniques, practices, and enforcement policies for evaluating vertical transactions.

The new Vertical Merger Guidelines reflect the agencies’ analysis of vertical mergers. The revised guidelines:

  • Explain that mergers often present both horizontal and vertical elements, and the agencies may apply both the Horizontal Merger Guidelines and the Vertical Merger Guidelines in their evaluation of a transaction, as part of a fact-specific process that involves a variety of tools to determine whether a merger may substantially lessen competition.
  • Clarify that its analytical techniques, practices, and enforcement policies apply to a range of non-horizontal transactions, including strictly vertical mergers, “diagonal” mergers, and vertical issues that can arise in mergers of complement.
  • Clarify that when the agencies identify a potential competitive concern in a relevant market, they will also specify one or more related products. A related product is a product or service that is supplied or controlled by the merged firm and is positioned vertically or is complementary to the products and services in the relevant market.
  • Provide detailed discussions, including multiple diverse examples, of the “raising rivals’ costs” and “foreclosure” theories of harm. In recent decades, these theories of harm have been the principle theories investigated in merger reviews.
  • Identify conditions under which a vertical merger would not require an extensive investigation, because the merger does not create or enhance the merged firm’s incentive or ability to harm rivals.
  • Emphasize that analyzing efficiencies is an important part of reviewing vertical mergers.
  • Explain in detail the analysis of the elimination of double marginalization (“EDM”), which economists emphasize is a frequent procompetitive result of vertical transactions.

The guidelines address the usage of confidential information in vertical mergers: 

b. Access to Competitively Sensitive Information

In a vertical merger, the transaction may give the combined firm access to and control of sensitive business information about its upstream or downstream rivals that was unavailable to it before the merger. For example, a downstream rival to the merged firm may have been a premerger customer of the upstream firm. Post-merger, the downstream component of the merged firm could now have access to its rival’s sensitive business information. In some circumstances, the merged firm can use access to a rival’s competitively sensitive information to moderate its competitive response to its rival’s competitive actions. For example, it may preempt or react quickly to a rival’s procompetitive business actions. Under such conditions, rivals may see less competitive value in taking procompetitive actions. Relatedly, rivals may refrain from doing business with the merged firm rather than risk that the merged firm would use their competitively sensitive business information as described above. They may become less effective competitors if they must rely on less preferred trading partners, or if they pay higher prices because they have fewer competing options.

The guidelines are available, here

Tuesday, 7 July 2020

Nonimmigrant F-1 and M-1 Students Must Leave United States if Enrolled in Fully Online Course Program

The US Department of Homeland Security will release rules stating that nonimmigrant students must leave the country if enrolled in a fully online course program.  The Press Release below outlines the rules.  Notably, Harvard University and USC will be online or mostly online.  Several law schools have announced a move to online for the Fall of 2020, including UC Hastings and UC Berkeley.  It will be interesting to see if this rule announcement results in changes to a hybrid mode for some classes directed to foreign students at those universities. 

Temporary exemptions for the fall 2020 semester include:

  1. Nonimmigrant F-1 and M-1 students attending schools operating entirely online may not take a full online course load and remain in the United States. The U.S. Department of State will not issue visas to students enrolled in schools and/or programs that are fully online for the fall semester nor will U.S. Customs and Border Protection permit these students to enter the United States. Active students currently in the United States enrolled in such programs must depart the country or take other measures, such as transferring to a school with in-person instruction to remain in lawful status. If not, they may face immigration consequences including, but not limited to, the initiation of removal proceedings.
  2. Nonimmigrant F-1 students attending schools operating under normal in-person classes are bound by existing federal regulations. Eligible F students may take a maximum of one class or three credit hours online.
  3. Nonimmigrant F-1 students attending schools adopting a hybrid model—that is, a mixture of online and in person classes—will be allowed to take more than one class or three credit hours online. These schools must certify to SEVP, through the Form I-20, “Certificate of Eligibility for Nonimmigrant Student Status,” certifying that the program is not entirely online, that the student is not taking an entirely online course load this semester, and that the student is taking the minimum number of online classes required to make normal progress in their degree program. The above exemptions do not apply to F-1 students in English language training programs or M-1 students pursing vocational degrees, who are not permitted to enroll in any online courses.

Schools should update their information in the Student and Exchange Visitor Information System (SEVIS) within 10 days of the change if they begin the fall semester with in-person classes but are later required to switch to only online classes, or a nonimmigrant student changes their course selections, and as a result, ends up taking an entirely online course load. Nonimmigrant students within the United States are not permitted to take a full course of study through online classes. If students find themselves in this situation, they must leave the country or take alternative steps to maintain their nonimmigrant status such as a reduced course load or appropriate medical leave.

Due to COVID-19, SEVP instituted a temporary exemption regarding online courses for the spring and summer semesters. This policy permitted nonimmigrant students to take more online courses than normally permitted by federal regulation to maintain their nonimmigrant status during the COVID-19 emergency.

Monday, 6 July 2020

Where will the Great Brand Odwalla Land?

In a past post, I wrote about how great brands and products never die.  I provided two examples: the first, was Sesame Street; and the second, was Hostess products.  There’s another example of a great brand and product that is on the chopping block: Odwalla smoothies and juices.  Coca-Cola has announced that it is terminating the Odwalla brand.  According to CNN, this is a reaction, in part, to changing consumer demand and simplifying their supply chain.  Those smoothies do have a lot of sugar!  

Notably, Coca-Cola has over 500 brands.  Unlike Hostess, which was in bankruptcy, it will be interesting to see whether Coca-Cola will sell the brand.  If Coca-Cola truly wants to exit the smoothie business, then perhaps they won’t be concerned about a future competitor in that business line.  Coca-Cola does have other juice products.  However, even if demand for smoothies is falling off, I do wonder whether the demand will pick up again.  Interestingly, last year, Coca-Cola offered a zero calorie smoothie—perhaps they didn’t invest enough in marketing the new product.  For sure, it does take a while for trademark abandonment to kick in.  We’ll have to wait and see what happens.  Oh, and by the way, Odwalla was purchased for US $181 million almost two decades ago.  (And, if you are curious about my children's politics--now 15, 12 and 11--they think "cancel culture" is very troubling (everybody makes mistakes, redemption and what happened to free speech). They would vote for Biden if they could, but are relatively lost about what he stands for except that he's the alternative to President Trump--I think some debates will help.  They are concerned about Biden's comments about how if African Americans don't vote for him then they're not black and are somewhat mollified by his back-tracking.)

Saturday, 4 July 2020

More Trademark Bullies, Please -- At Least in the Charitable Space

Over the years I’ve come to the conclusion that trademark law and policy in the United States is likely the least appreciated area of intellectual property law, but also likely the most important.  Trademarks importantly allow the benefits of goodwill to be realized.  Consumer perception guides the development of U.S. trademark law for better or worse, as demonstrated by the U.S. Supreme Court’s recent Booking.com case.  This makes the boundaries of the legal protection provided by trademark law somewhat difficult to cabin-in and may facilitate over-reaching and over-enforcement with the danger of squelching free speech, competition and innovation.  

A benefit of intellectual property is its ability to allow owners to give it away.  The recent Open COVID Pledge is a good example of IP philanthropy.  So, how do trademarks aid in philanthropy?  One way trademarks facilitate philanthropy is by allowing people and entities to donate money to what they believe are worthy causes.  In the United States, we’ve had issues with people choosing trademarks similar to the trademarks of well-regarded charities and profiting from confusion from those marks.  I’ve written about that, here.  It seems that related problems have arisen from the Black Lives Matter movement—particularly given its non-hierarchical structure.  MarketWatch has a helpful article discussing the issues, here.  Charitable causes seem to be an area where greater trademark enforcement would be needed and welcome.