Litigation newsletter >> winter 2008
One month into 2008 … have room for one more resolution? How about: "Avoid litigationthis year"?
Here is a brief update of some recent developments in the areas of intellectualproperty, commercial and employment lawand some practical advice as to what youcan do now to avoid litigation in the future. Ifyou are already facing litigation, these tipsmay benefit your litigation strategy or helpfacilitate a cost-effective settlement.
The Way We See ItCopying electronic publications is easy, but so is getting caught. We
recommend that our clients take some simple steps to prevent the illicit
copying of publications to which they subscribe. The penalty for
infringement, as we saw in the Lowry's Reports case, can be very steep.
First, appoint someone to manage subscriptions and channel them tothose employees who need them. The subscription manager must under-
stand the uses allowed under those subscriptions, and communicate the
Second, develop a clear written policy explaining potential copyright and
contractual violations in the context of subscription publications, warning
employees against illicit copying, and encouraging them to bring any
concerns to the subscription manager's attention.
Third, conduct periodic audits to determine the number of subscriptions
needed. If multiple subscriptions or an enterprise-wide subscription is tooexpensive, it is best to obtain hard-copy subscriptions that can be circulated via routing lists (making sure that no copies are made in the
RISKS OF COPYING SUBSCRIPTION PUBLICATIONS
In Lowry's Reports, Inc. v. Legg Mason, Inc., 302 F. Supp. 2d 455 (D. Md.
Finally, institute some internal monitoring mechanisms (such as searches
2004), a jury awarded $20 million in damages to the publisher of Lowry's
of the company's servers) to ensure that electronic publications are not
Reports for willful copyright infringement by one of its subscribers, Legg
being illicitly copied. These steps should reduce the chances of illicit
Mason, Inc. For more than a decade, Legg Mason paid for and received
copying and, if any such copying occurs, militate against a finding of willfulness.
a single copy of the daily and weekly editions of the reports, and postedthem on the company's intranet and distributed multiple copies through-out the organization. This was a violation of Lowry's copyright and of thesubscriber agreement between Lowry and Legg Mason. The publisher
THE HIDDEN COST OF WORKING WITH BIGPHARMA
learned about the infringement in a phone call with a Legg Mason's
On January 14, 2008, Merck/Schering-Plough Pharmaceuticals
employee; discovery revealed its full extent.
announced the results of a 2006 clinical trial that will cripple the sales ofits blockbuster drugs Zetia and Vytorin. Zetia, which has been prescribed
Once liability is established under the Copyright Act, a publisher is for millions of patients, had been shown in previous trials to reduce
entitled to seek damages - which can range from $750 to $30,000 per
cholesterol 15-20%. Zetia is a main component of Vytorin, another anti-
work infringed - and could add up to a substantial amount depending
cholesterol compound from Merck/Schering-Plough. According to the
upon the number of issues of the publication involved. Damages may be
recently-reported study, Zetia does not reduce fatty plaques in arteries
increased to a maximum of $150,000 if the infringement is found to be
and, therefore, does not reduce the risk of heart attacks or strokes.
willful, such as when there is a systemic pattern of copying, or a signedsubscription agreement in place that prohibits copying.
Zetia and Vytorin join a growing list of drugs grabbing unwanted attentionlately. This announcement came within weeks of the unsealing of a
Publishers depend on subscribers to pay for content, and they view
whistleblower action against Pfizer concerning its marketing of Lipitor,
illegal copying and distribution of their publications as a serious problem,
and hot on the heels of Merck's multi-billion dollar settlement of 27,000
particularly because it's so easy. Simply hitting "forward" on an email
which contains content (and not just a link to an article) can create anddistribute illegal copies. The Lowry's Reports case has encouraged Long after they first hit the market, drugs may come under fire for adversepublishers to enforce their copyrights and subscription agreements by
effects (as with Vioxx), or insufficient effects (as with Zetia and Vytorin).
hunting out infringers. Indeed, since the Lowry's Reports decision, a
It is too early to predict the fallout for Merck/Schering-Plough - patients
growing number of publishers of daily, weekly and monthly publications
taking Zetia and Vytorin have been advised to consult their doctors
(including several publications targeted to advertising, public relations
immediately, and the nearly two-year delay in reporting the results of theclinical trial is being investigated by Congress. We're hardly out on a limb
and marketing firms) have installed tracing software into the on-line ver-
in expecting that the manufacturer of Zetia, will ultimately be an attractive
sion of their publications that tracks each time their electronic publications
are copied, forwarded, or printed. Big Brother is watching and this hassharply increased the detection and exposure in the last several months.
Legal actions involving BigPharma come in many shapes, but their sizes
tend to start with large. There are investigations and criminal
the parties had negotiated most of the terms, Turner sent Jordan
prosecutions by U.S. Attorneys, as well as whistleblower actions in which
Panel a term sheet. The term sheet provided that Turner would not
a current or former employee sues on behalf of the government under the
be bound to anything, including any obligation to make payments
False Claims Act, alleging, for example, improper promotion of drugs for
for work performed, or for anticipated profits, until the parties
off-label uses. In addition, generic-drug manufacturers have brought
suits alleging improper efforts to extend patents or otherwise hobblesales of generic versions of a drug. There have also been individual or
Jordan Panel alleged that after Turner delivered the term sheet, the
class actions for personal injuries, alleging that, for example, the risks of
parties agreed on the only open issue (price), and with that detail
the drug were hidden from patients and that the drug caused injuries.
settled, Turner told Jordan Panel that it had been awarded the job.
Lastly, we have seen third-party payor complaints, in which insurance
Turner, according to Jordan, instructed the contractor to start work
companies try to recover what they paid out over the years for their
on the design phase of the project immediately. Ten days later,
insureds' prescriptions for the drug, now alleged to be ineffective or
Turner told Jordan Panel that it would not be entering into a
contract with Jordan Panel, but instead would go with another firm.
Jordan Panel sued Turner, charging that Turner had entered a binding contract. According to Jordan Panel, Turner waived the
What does this mean for the advertising, public relations and term sheet provision requiring execution of a written contract when,medical communications agencies that worked on promotional
after reaching agreement on all terms, it told Jordan Panel that it
campaigns for the drugs? The short answer is: subpoenas, sub-
had been selected for the job, and directed the company to start
poenas, subpoenas. Agencies have documents, and investigators
and plaintiffs want them. Unfortunately, in many instances, the onlysource of reimbursement for the costs and burden of dealing with
The court disagreed. According to the judges, the parties did not
these subpoenas will be the agency's client, the pharmaceutical
have an enforceable contract because the term sheet provided that
company itself. Faced with mounting defense costs, or after the
it was not binding prior to entering a written contract.
agency-client relationship has come to an end, a pharmaceuticalcompany may not agree to cover an agency's subpoena-related expenses. That's why an indemnification provision in the
agency-client agreement is vital, and the time to negotiate it is
When negotiating with a vendor on a substantial piece of work, you'd be
well advised at the outset of negotiations to note that you do not intend to
In calculating the risks of doing business with BigPharma, you
be bound to any terms until execution of a contract. On the flip side,
should not ignore the potentially high costs of compliance with
when you're the vendor, be sure that you execute a contract before you
subpoenas. A broad indemnification agreement can protect an
start the job if the prospective client has made the negotiations subject to
agency's bottom line from taking a hit when regulatory bodies or
such a term. Otherwise, you could find yourself in the same position asthe subcontractor in the Jordan case - believing that binding terms had
plaintiffs' attorneys start coming after drug manufacturers. An
been agreed, and commencing work at the client's request, but with no
indemnification agreement may not always be possible, but we'd be
pleased to assess your situation, and help in drafting/negotiatingsuch an agreement.
EMPLOYERS CAN OFTEN AVOID COSTLY
"NOT BINDING WITHOUT WRITTEN CONTRACT"
DISCRIMINATION TRIALS THANKS TO WRITTEN
MEANS JUST THAT
EMPLOYEE PERFORMANCE REVIEWS
A recent court decision affirming a grant of summary judgment to an
New York courts traditionally have held that when a party states in
employer defending against an employee's race discrimination and
writing that it will not be bound to any agreement until a written unlawful retaliation claims highlights the importance of maintaining contract is executed, no contract exists until a formal written written performance reviews for all employees. Such evaluations candocument is signed. This often becomes contentious when parties
mean the difference between having to endure a costly, messy and time-
agree to conditions set out in a term sheet or other such memo, and
consuming trial or having an employee's claims dismissed before trial.
one party starts living up to the understanding - but the parties
In Brown v. Illinois Dep't of Natural Resources,499 f.3d 675 (7th Cir.
never execute a written contract. The Appellate Division, First
2007), the employer produced a well-documented record of the
Department recently affirmed this long standing rule in Jordan
employee's performance problems and client complaints as justification
Panel Systems Corp. v. Turner Construction Co., 841 N.Y.S.2d 561
for firing him. The employee relied on his own opinions of his perform-
ance to make a case for discrimination. The court concluded that theemployee's documented performance problems provided sufficient
Jordan Panel had bid on a contract with Turner Construction. After
The Way We See ItThe Brown decision is a vivid reminder of how critical it is for employers
DAVIS & GILBERT’S LITIGATION PRACTICE GROUP
to maintain honest and candid employee performance reviews. In Brown,
1740 Broadway, New York, NY 10019 (212) 468-4800 www.dglaw.com
the employer avoided having to go to trial on a race discrimination claim,a case that would have put at issue comparisons between the plaintiff's
job performance and the performance of the four white employees with
Michael C. Lasky /email@example.com/ (212)468-4849
whom he compared himself. Discrimination claims alleging that anemployer treated "similarly-situated" employees more favorably than the
Howard J. Rubin /firstname.lastname@example.org/ (212)468-4822
plaintiff often unfairly expose innocent co-workers to public scrutiny attrial. Personnel files of co-workers may be introduced as evidence and
supervisors may be compelled to testify about events and salary
information that co-workers reasonably expected would remain private.
The Brown case shows how simple it can be, in some cases, to shut
Guy R. Cohen /email@example.com/ (212)468-4853
down meritless discrimination claims before they ever get to trial.
Documentation of performance issues does not have to be exhausting orelaborate. Straightforward written notes reflecting a supervisor's view of
Paul F. Corcoran /firstname.lastname@example.org/ (212)468-4825
an employee's performance can be enough. If an employee is givencopies of these evaluations, an employer will be in an even stronger
Sara L. Edelman /email@example.com/ (212)468-4897
Martin Garbus /firstname.lastname@example.org/ (212)468-4883
WHEN SHOW BUSINESS HAD NO BUSINESS…
Bruce M. Ginsberg /email@example.com/ (212)468-4820
Neal H. Klausner /firstname.lastname@example.org/ (212)468-4992
The November 2007 Broadway stagehands strike kept many of the houses on the Great White Way dark for several weeks, resulting in estimated losses to theater owners and producers of $35 million, or more
Jennifer Tafet Klausner /email@example.com/ (212)468-4827
than $2 million per day. And the stagehands were out of work and notbeing paid during that time as well. These losses might have been
Maureen McLoughlin /firstname.lastname@example.org/ (212)468-4910
averted had the parties used mediation at the start of the strike. But bothsides took a hard line, and did not engage in mediation until the eighth
Marc J. Rachman /email@example.com/ (212) 468-4890
day of the strike. By waiting more than a week to start formal negotia-tions, both sides lost the momentum they had created in pre-strike
Ina B. Scher /firstname.lastname@example.org/ (212) 468-4937
attempts to resolve their dispute. Had their last contract included amandatory mediation provision, they might have had a mechanism to
ensure that talks moved more quickly.
Shirin Keen /email@example.com/ (212) 468-4934
Cheryl Plambeck /firstname.lastname@example.org/ (212) 468-4965
There were a lot of losses as the strike wore on, much of which couldhave been avoided. At the end we saw how mediation and arbitration can
Scott M. Singer /email@example.com/ (212) 468-4971
play a key role in promoting a settlement. This little drama shows howimportant it is for all businesses to examine all their contracts to see if
For a full listing of all Davis & Gilbert litigation attorneys, please
they have the best mechanism to preserve their contractual rights. Many
companies are taking advantage of the growing array of arbitration andmediation providers to resolve disputes more efficiently and cheaply and
These summaries are provided for informational purposes only and are
with more goodwill than is typically seen in litigation.
not exhaustive. They should not be considered to be legal advice.
Accordingly, you should consult an attorney with any questions
You should view all of your employment, vendor, agency-client, and other
regarding any of the issues referenced in this report.
contracts through a "resolution" lens to ensure they have the right methodfor you to resolve any potential disputes - be it litigation, arbitration, or
Attorney Advertising. This report may be considered advertising under the rules of some states. Priorresults described in this report cannot and do not guarantee or predict a similar outcome with respect to
any future matter that we or any lawyer may be retained to handle.
Joseane AmesI,II Falsifi cação de medicamentos Daniele Zago SouzaIII no Brasil Counterfeiting of drugs in Brazil OBJETIVO: Identifi car os principais medicamentos falsifi cados apreendidos pela Polícia Federal brasileira e os estados em que houve a apreensão. MÉTODOS: Estudo retrospectivo descritivo dos laudos periciais elaborados por Peritos Criminais da Polícia Feder
Curriculum Vitae di Delia Romanò Nata il 20 Dicembre 1970 a Milano. Studio: corso Venezia 2, 20121 Milano Tel. e Fax: 02 78.16.57 e-mail: Istruzione e incarichi professionali Maturità Classica presso l’Istituto Suore Marcelline di Milano. Laurea in Medicina e Chirurgia presso l’Università degli Studi di Milano. 1996-2000 Diploma di Specializzazione in Ortopedia e Traumatolog