2 Del. Rulings Show Postclosing Earnout Arrangement Risks

Two recent Delaware Court of Chancery decisions illustrate the contractual and fiduciary duty risks associated with earnout provisions in M&A transactions, offering lessons on allocating postclosing control, drafting enforceable earnout covenants and managing executives whose pay depends on the outcome, says Chris Brown at Taft.

Opinion

Judges Must Turn To Merits Earlier To Fix Civil Justice System

The U.S. justice system is long overdue for a cultural shift that encourages judges to engage with the merits of a case from the outset, which would help to cut through procedural complexities and deliver high-quality justice efficiently and at lower cost, says Steven Kayman at Rottenberg Lipman.

Series

Open-Water Swimming Makes Me A Better Lawyer

Swimming long distances in open waters is not necessarily an escape from my intellectual property practice, but a complementary discipline that similarly rewards sustained attention, intellectual curiosity, resilience and the ability to pursue a distant objective without losing command of the immediate task, says Christina MacDougall at Morgan Lewis.

How Groq-Nvidia Suit Tests Venture Capital Exit Math

A recent Delaware Court of Chancery suit concerning Nvidia's acquihire of certain Groq employees highlights that when such deals are challenged, the economic dispute turns on reconciling technology, people, cash and continuing ownership rather than on the headline number, says Ben Dubin at VC Expert Services.

A Lesson On How Courts Approach Impossible Patent Claims

The Federal Circuit's recent decision in Satius v. Samsung, concluding that a scientifically impossible patent claim lacks enablement, underscores important considerations when drafting patent claims with potentially incompatible alternatives, and highlights an uncommon strategy for attacking patent validity via claim construction, say attorneys at Buchanan Ingersoll.

Opinion

The Invisible AI Danger That May Undermine Legal Profession

A public database tracking cases involving hallucinations generated by artificial intelligence recently surpassed 2,200 entries, but the bigger risk underlying attorneys’ use of such tools is that they will slowly surrender their judgment to AI and lose analytical skills, says Massachusetts District Court Associate Justice Brian Palmucci.

10 Ways AI Labs Can Limit Antitrust Risks Of Safety Pacts

The OpenAI CEO’s recent call for artificial intelligence laboratories to collectively slow development to allow safety research to catch up invites antitrust scrutiny, but the risks to coordinating competitors can be managed by carefully structuring pacing agreements and layering their approach to compliance, say attorneys at Holland & Knight.

How AI Could Help Judges Spot Their Own Biases

In close cases where there’s room for discretion, artificial intelligence could challenge judges’ implicit biases by running counterfactual tests at scale — but any judicial use of such tools would need guardrails, say Arnold Peter at Peter Law and Nancy Rapoport at University of Nevada.

Coinbase Ruling Showcases A Texas Reincorporation Benefit

The Texas Business Court's recent decision in Guillaume v. Armstrong, finding that a shareholder's claims against Coinbase, originally incorporated in Delaware, are nonetheless subject to Texas presuit demand law if made after reincorporation, provides a procedural advantage for companies that have made the move, say attorneys at Cleary.

3 Strategies To Reduce AI Sycophancy In Legal Work

The tendency of generative artificial intelligence models to tell users what they want to hear can reinforce attorneys’ confirmation bias when testing the strength of arguments, and it can’t simply be prompted away — but a few practices can help mitigate it, says Michael Ott at Ice Miller.

Open Issues After 2nd Circ.'s Airport Phone Search Ruling

While the Second Circuit’s recent U.S. v. Alisigwe decision confirms border agents' broad authority to conduct routine manual cellphone searches at ports of entry, significant questions remain about more wide-ranging forensic searches at the border, say attorneys at Baker Botts.

2nd Circ. EFAA Ruling Shifts Employer Litigation Strategy

In Diaz-Roa v. Hermes Law, the Second Circuit recently held that, under the Ending Forced Arbitration of Sexual Assault and Sexual Harassment Act, employers can't carve out nonharassment claims and send them to arbitration, which has implications for discovery, litigation costs and resolution strategy in EFAA-covered disputes, say attorneys at Krevolin Horst.

3rd Circ. Ruling Opens Door For Fraud-On-The-Market Rethink

The Third Circuit's recent decision in Ocugen, holding that a stable stock price after publication of restated financials does not prove immateriality, could be a vehicle for the U.S. Supreme Court to overturn the doctrine undergirding certification of securities class actions, says Jonathan Richman at Brown Rudnick.

5 Issues To Watch As Fed. Circ. Hears Moderna Vax IP Case

Upcoming oral arguments before the Federal Circuit in Arbutus v. Moderna will test whether patent liability protections for government contractors extend to vaccines distributed to the public, and the resolution of certain questions, such as how to define “for the government,” may be key to the outcome, say attorneys at Honigman.

Series

Being In The Peace Corps Made Me A Better Lawyer

When I served in the Peace Corps, the people of the West African village where I was stationed helped me acclimate to my new surroundings and enabled me to develop problem-solving, teamwork and empathy skills that have bolstered my legal practice far beyond the ability to offer technical advice, says Brian Bewley at McGuireWoods.