Reflections of “Man’s Best Friend” in Protecting Client Interests

Most avid dog owners will admit their canine companions are creatures of habit, comfortable in their routines, yet still guided by instincts of which we as humans are basically clueless. The moment you “think” you have figured out all this instinctive behavior can often have surprising consequences. Fortunately for me and my dog Eddi, a German short-haired pointer, we haven’t become candidates quite yet for America’s Funniest Home Video, but there’s still time.

Early one morning recently, I let Eddi out in the backyard to do her normal “business,” something that generally takes about 2 or 3 minutes. When she didn’t return on time as usual, I became a little anxious. As it turns out, she was gathering an opossum — undoubtedly a valued gift for her master. I must note that I have received this same gift several times over already. Her strong instincts to hunt and track game don’t end with unsuspecting opossums, however.

This past summer, Eddi resorted to chasing small black bears. After numerous encounters with chasing these wild animals up trees and through the lowland forests, I knew I had to address her uncontrollable behavior, mostly for her own protection. So, I invested in a shock collar to help reinforce my stop commands, which she had obeyed previously, in addition to developing some new commands to help guard against her sometimes out-of control behavior.

By now, you’re probably wondering where I am headed with this personal tale. It’s simple. Out of love and fondness for our four-legged companions, we often assign them human traits, mostly the ability to think and reason, but what about man? Do we not sometimes exhibit that same lack of control of our behavior that we witness in our pets? We don’t have full reign over our lives entirely; we depend on others, much like our pets depend on us. Attorney-client relationships should be built on the premise of trust and dependence to consult with each other and openly discuss issues before chasing that proverbial bear up a tree.

My clients that have the most control over their businesses and the fewest legal conflicts are the ones that come to me early on to discuss potential problems before they escalate into legal dilemmas. In promulgating contractual relationships, we can modify documentation where necessary to protect clients’ interests, making sure they fully understand all pertinent issues beforehand. Those who instinctively feel they can handle their own legal matters or sign contracts without first consulting an attorney are the ones who usually end up in litigious situations because they don’t understand the ramifications of their decision.

Of course, I must confess that perhaps some of my clients occasionally gaze upon me unknowingly like my dog Eddi, asking herself, “What is he doing?” After the recent encounters with bears, she took on a new challenge a couple of times — herding elk. She gets behind the herd and chases them towards me, which is probably instinctual, encircling game and bringing it back to the hunter, waiting for the hunter to kill it. Well, I am no hunter, so she probably thinks I am the most inept owner in the world because she’s doing all the work and I’m not finishing the task. As Eddi’s master, though, it is my responsibility to protect her and safeguard her behavior as much as possible, particularly with new experiences, such as chasing elk. I have that same obligation to my clients.

Just as I have to constantly retrain Eddi to keep her clear of harmful encounters with other animals, I try to continually steer my clients in the right direction. In fact, it is often my role to discuss clients’ new business proposals. We review contract language; we talk about potential risks and rewards; we examine ways to avoid risk; and we look at how to increase the opportunities for more business and further benefits. I believe that all successful businesses, like pets and our selves, should require the same consideration of their well-being.

Deeper Into the Licensing Abyss

In an earlier post I touched upon the importance of proper contracting language, but I barely poked the surface. Today I thought I’d delve a little deeper so you can better understand some of the ways licensing agreements can affect a business.In life sciences, one area where attorneys can be particularly useful is helping Clinical Research Organizations (CROs) with licensing agreements.

A CRO, for those unfamiliar, is sort of a middle man. It contracts up with a sponsor, a company producing a new drug or device or what have you, and then contracts down with subcontractors to use and test the new technology. Subcontractors include clinics and clinical research assistants, who go to medical sites where the new drug or device is being used and make sure data are properly maintained.

Licensing agreements are made between the sponsor and its subcontractors — sometimes passing through the CRO as well — granting them the right to use the new technology for testing purposes, but without conveying any ownership interest in it.

For example, right now I’m dealing with a company that came up with technology that uses genetics to measure the rate at which an individual metabolizes a drug. To test its device, the company will grant a license to a clinic to use it, but the license won’t transfer any patent rights, or any intellectual property rights.

Where I also get involved with a CRO is when a sponsor sometimes tries to include some type of licensing fee, which, in my opinion, is inappropriate in the context of a licensing agreement for testing drugs or equipment. Think about it: CROs aren’t making a profit from the use of a new technology, they’re simply testing it. If they're being paid to test a device, why should they also have to pay a licensing fee while seeing if it works?

Attorneys can also make a big difference by ensuring that the contract language of a licensing agreement is consistent between biotech companies, CROs, vendors, clinics and clinical research assistants. In other words, if there is a licensing agreement between a CRO and sponsor company, the subcontractors need to be similarly bound to the terms of that licensing agreement. Otherwise, there could be situations where subcontractors are using a particular device or software and think they have ownership interest in it, maybe even modifying it and putting their name on it.

For instance, a client of mine was running a licensed biostatistical software program to process data on the efficacy of a particular experimental drug. The client hired a subcontractor, but didn't tell him about its licensing agreement. He started tweaking the software and wanted to use it for other clients.  This was not a good situation:  the client did not have a work for hire provision in its subcontractor agreement, so technically the subcontractor had ownership, but that ownership was adverse to the licensing agreement with the sponsor. 

Fortunately, I was able to negotiate a resolution to the competing claims of ownership, and draft licensing language for my client to avoid this situation in the future.  If you deal with licensing agreements in your particular line of work, make sure to get legal advice.