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.

How Analytical Advances Reshape Biologic Patent Strategy

As regulators shift away from relying on comparative clinical efficacy studies in biosimilar development, and more toward analytical data, practitioners should pay closer attention to post-translational modifications when evaluating patentability, says Gina Nellesen at Global Patent Group.

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.

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.

How Cos. Using AI Agents Can Avoid Protected Data Incidents

For businesses whose deployed artificial intelligence agents could enter other companies' systems and steal protected data, deployers can take several steps before an incident to test the configured agent, such as limiting it to approved systems and destinations and requiring human escalation when tasks stall, says Steven Carlson at von Briesen & Roper.

FDA Classification Setback Bodes Well For Wound Care Cos.

A Georgia federal court's recent decision in MiMedx v. U.S. Food and Drug Administration constrains the FDA's analytical framework for classifying certain wound care products as biological products, carrying important ramifications for manufacturers seeking to avoid heightened regulatory requirements, say attorneys at Hyman Phelps.

Lessons For Cannabis Dispensaries From Web Tracking Suits

The trajectory of health-tracking litigation in Florida and elsewhere suggests that patient privacy claims will not disappear quickly, so dispensaries should audit their sites, tighten consent and align their disclosures with their actual practices, say attorneys at Buchanan Ingersoll.

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.

3 Eligibility Rulings Show Risks Of Broad Claim Constructions

Several recent decisions from the Federal Circuit, including its ruling in Berkeley v. W.W. Grainger, highlight the importance of identifying the inventive aspects of a patent early in the case so that patentees do not inadvertently read the inventive features out of their own claims, say attorneys at MoFo.

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.

DOJ Directive Gives Contractors A Fraud Risk Road Map

For government contractors, the 10 factors described in the U.S. Department of Justice's recent corporate fraud enforcement directive function as a de facto scoring rubric for internal audits that mirrors what prosecutors will prioritize, say attorneys at Spencer Fane.

Why Inter Partes Reviews May Be On The Rebound

Recent inter partes review data shows that rates of referrals and institution rates at the U.S. Patent and Trademark Office are increasing, potentially indicating, among other reasons, that patent challengers are adjusting to the USPTO's policy changes, say attorneys at Sterne Kessler.

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.