Intellectual Property Law Blog

Clinical trials are the lifeblood of biotech. Finding the right service providers (CROs, safety, IVRS, consultants, contract manufacturers and many others), as well as the right clinical investigators and sites, results in a complex web of legal obligations and potential liabilities. Limitation of liability clauses can reduce a party's exposure if a contractual obligation is breached. More often, limitations of liability provisions are used to shift risk to the sponsor of the clinical trial. But, if your contracts are well negotiated and drafted, the risks can be carefully and fairly allocated between the parties in a balanced and reasonable manner. Because of the complexity of the legal relationships and liabilities found in clinical trials, this article is limited to a brief description of limitation of liability clauses, and their general strengths and weaknesses.

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The pressure to cut production costs for media works is larger than ever. One expense that should not be slashed, however, is the expense of registering a copyright in the work soon after it is created — whether that work is a written script, motion picture, a television episode, a commercial or a song. Considering that the standard Copyright Office filing fee for registration is between $35 (if filing electronically) and $45 (if filing the old fashion way on paper, which many still do), registration arguably provides a substantial dollar- to-dollar return on investment.

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Internet addresses ending in ".Asia" will soon be available for the registration of domain names.  Trademark owners and businesses may wish to consider registering domains with the ".Asia" ending for their corresponding names.

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On May 15, 2007, in a divided decision, the United States Court of Appeals for the Ninth Circuit adopted a new and significantly narrower interpretation of the immunity from liability for online service providers provided by the Communications Decency Act.  In Fair Housing Council of San Fernando Valley, et al. v. Roommates.com, LLC, Appeal Nos. 04-56916 and 04-57173, (click here) Ninth Circuit holds that service providers may be liable for content originating from users if they solicit the unlawful information, or categorize, channel, and limit the distribution of the information.

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Today, more than ever, companies are confronted with a broad array of electronic document issues, including data retention policies and e-discovery during litigation. Failing to comply with rules regarding such electronic data can cost millions of dollars.

For instance, in United States Securities and Exchange Commission v. Morgan Stanley & Co., Inc., No. 06 0882 (D.C., May 12, 2006), the SEC alleged that defendant failed to produce tens of thousands of emails sought by the SEC in two investigations. The court entered an 8-page consent judgment against defendant. Three of the major points in the judgment are:

1. Defendant was ordered to pay $15,000,000
2. Defendant was permanently enjoined from violating Section 17(b) of the Securities Exchange Act of 1934 (requiring a prompt document production, including electronic documents); and
3. For one year, Defendant, at its own cost, was ordered to hire an independent consultant (acceptable to the SEC) to review and evaluate defendant's policies, procedures, and training in order to comply with the judgment. The independent consultant is to make recommendations which must, absent undue burden or impracticality, be adopted by Defendant.

The lesson learned is straightforward: the costs of non-compliance with rules regarding electronic data can be staggering.

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Because an IP license agreement is governed by state contract law, it is important to consider the relevant state's case law when drafting any such agreement. For instance, the California Supreme Court recently determined that jury waiver provisions in a contract are invalid unless the procedures set forth in section 631(d) of the California Code of Civil Procedure are followed. Grafton Partners v. Superior Court of Alameda County (2005) 36 Cal. 4th 944, 956. Section 631(d) enumerates six specific ways parties to a civil suit may waive the right to a jury trial. Prior to Grafton, California courts had enforced jury waiver provisions regardless of their compliance with this code section. Trizec Properties, Inc. v. Superior Court (1991) 229 Cal. App. 3d 1616, 1618.

In light of this new development, a company preferring to avoid a jury trial in the future may wish to add ADR provisions to their IP license agreements rather than simply rely on a jury waiver clause.

Regardless of a company's view on jury waiver provisions, it is essential to have IP license agreements drafted by a lawyer who is familiar with recent case law developments.

Grafton Partners L.P., et al. v. Super. Ct., 36 Cal. 4th 944 (2005).
Trizec Properties, Inc. v. Super. Ct. 229 Cal. App. 3d 1616 (1991).
Cal. Civ. Pro. Code § 631 (West 2003).

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