Is ADR the Cure for COVID-19-Related Litigation?

JAMS ADR Blog by Chris Poole

As we continue our battle against COVID-19, one of the successes is the speed with which pharmaceutical companies have developed vaccines. For those not familiar with the science and the process of getting new drugs to market, this was truly done at “warp speed.” Indeed, the effort and resources that went into getting these vaccines to market in under a year, in a sense, rivals the development of technologies such as nuclear energy during World War II. And don’t forget all the other new technology that was developed over the last year to diagnose COVID-19 infections and then track them, as well as to make it possible to work remotely.

Now, just wait until you see the litigation that arises after the pandemic has passed, as people and companies seek to capitalize on the innovations and intellectual property that they created during this war on COVID. (And I won’t even begin discussing the product liability, insurance, wrongful death and government benefits litigation that will shortly ensue.)

First, for example, and quite unusually, these vaccines have arrived long before any patents on them could have made it through the patent office. Normally, new patent applications are not even published for review until 18 months after the invention, and even then, they don’t issue as enforceable patents for years after that. But because it takes even longer for new drugs to be approved, companies typically know the patent landscape long before they commercialize their drugs; thus, they can take steps either to work around others’ patents to avoid infringing them, or to acquire the rights they need before entering the market. In other words, expect a lot of patent litigation.

Second, there was a lot of collaboration during the development of these vaccines. For example, universities often share patent royalties pro rata with their university inventors, whether they are faculty, graduate students or research staff. Expect inventorship disputes where being named as a co-inventor can earn that person thousands of dollars of royalty share. Similarly, expect joint venture disputes as two companies argue over which one contributed more to a new technology.

Third, investors in companies developing these new technologies will want to receive any money that is due to them. For example, companies often set milestones that, if reached, will trigger large payouts. Expect breach of contract litigation where companies miss those milestones– or alternatively, assert that they missed the milestones or engage in some accounting which they say allows them to avoid the payout.

Fourth, consider that many employees in the life sciences industry have noncompete agreements, often with geographic limitations. Because working remotely has become widespread, a dispute may arise where a former employee accepts a position with an employer that is located in another geographic region but will be working from home in the same region to which his or her noncompete agreement applies. Expect a lot of employment litigation.

How will all this litigation get resolved when the court system has been largely shut down for nearly a year? Imagine the backlog when the courts do reopen.

There is no better time than now to consider alternative dispute resolution (ADR). For inventorship and patent disputes, the ADR professional will typically have a scientific or technical background, which will allow him or her to have a better understanding of the patent dispute. For contractual and employment disputes, the ADR professional will also typically have experience in the life sciences industry. And, most importantly, the ADR providers have continued serving clients during the pandemic and have been at the forefront of using videoconferencing platforms to conduct remote proceedings. With so much on the line, and where speed and certainty is often most important, ADR mediation and/or arbitration may be the best solution.

                       

Steven Bauer

Steven M. Bauer, Esq., joins JAMS after a distinguished career with Proskauer, a large NY-based international law firm, where he co-chaired the firm's Patent and Intellectual Property Group and was a member of its International Arbitration practice group. Mr. Bauer specializes in resolving life sciences and technology disputes, particularly those… MORE >