Addressing international legal and ethical issues
This memo seeks to outline several major issues that should not be new to you. It will focus especially on the reasons why Gentura is likely to be in breach of the contract between them and CadMex Pharma. It also seeks to discuss the solutions likely to efficiently address such a breach. Apart from that, the memo is also intended to forward recommendation on the best way to handle the Gentura situation. The memo will also give an analysis of how to select a proper dispute resolution forum. This will be outlined by giving an explanation and supporting the recommendations for dispute resolution while at the same time analyzing the underlying situation in accordance to a legal, ethical and business perspective.
You may be aware that CadMex Pharma licensed its technology in exchange for Gentura know-how and in turn, Gentura gave it the ProPez’s worldwide licensing rights. Gentura operates under Candore’s laws and it is a separate legal entity. Thus it can contract, sue and be sued in its own name yet most of its stake is owned by the Candorean government. International arbitration was chosen for any contract disputes between Gentura and CadMex Pharma. Besides, the contract specifies that a law clause will be chosen in regard to Candorean Regulations for Technology Import Contracts.
Gentura’s decision to subsidize ViroBlax is clearly a violation of the payment terms of contract, which are very specific. The Trade-Related Aspect of International Property Rights (TRIPS) stipulates that CadMex Pharma’s patent has a twenty year protection but TRIPS also allows compulsory licensing in health emergency declaration by a government.
Since the Candorean government has the largest stake in Gentura, it is implausible that the provisions of Candorean Regulations for Import Contract, as the choice of law, will be followed. The political pressure on CadMex Pharma’s patent enforcement is heightened by the TRIP’s clause for health emergencies. Thus, CadMex could call for international arbitration against Gentura for breach of contract. This would lead Gentura into bankruptcy and at the same time damage the relations between CadMex Pharma and Gentura as well as the Candorean government. CadMex Pharma could on the other hand avoid taking legal action and instead seek compensation or shared marketing rights of any other Gentura drug.
Nevertheless, Gentura does not seem ready to offer marketing rights for another drug to CadMex Pharma. Besides, it is not clear whether CadMex Pharma would benefit from getting the marketing rights hence compensation seems like a more viable solution in this case. This is because it will prevent the potential expenditure of costly legal fees and retain the company’s goodwill that would otherwise get tainted by a lawsuit. Furthermore, it will prevent the ambiguities that usually couple attainment of marketing rights. Therefore, compensation seems like the most ethical step to take, that is from a business, legal and ethical view point.
An analysis of the choice of law clause presents two options; Contracts for the International Sale of Goods (CISG) and Candorean Regulations for Technology Import Contracts. The options for the forum selection clause are binding or non-binding international arbitration, Candorean courts and U.S courts.
Candorean Regulations for Technology Import Contracts was picked since it is specific in its technology transfer provisions and the Candorean government would most likely enforce it. Furthermore, CISG does not cover patent and intellectual property laws and Candore is not its signatory. For forum selection, arbitration is considered a quick and cost effective method as compared to litigation therefore, non-binding international arbitration was picked. However, binding arbitration could have worked best as it would have brought about finality to the dispute settlement process. U.S courts were not chosen because Gentura argued that it would have been expensive and time consuming. Candorean courts on the other hand would have favored Gentura since it is situated in Candore.
The choices made for law and forum selection clauses put into consideration the business, legal and ethical concerns of the underlying case. CadMex Pharma looked into the impacts that its business was likely to face and also weighed how appropriate and efficient the legal alternatives would be during its decision making process. What is more, CadMex Pharma also embraced its ethical standpoint by backing the processes that would be fair for both Gentura and them. Besides, it did not force Gentura into taking up options like the binding arbitration, U.S courts or working with international law terms since they held the fact that Gentura was not familiar with these options and it would be unfair to impose them on Gentura.
Reference
JARG (2007). Legal and Ethical Issues in the International Transactions of Donor Sperm
and Eggs. Journal of Assisted Reproduction and Genetics. Springer Netherlands. Volume 24, No. 4 April 2007.
UNESCO (2000). Infoethics 2000: 3rd Congress on International and Legal Ethical
Issues. Final report and proceedings. Available at
http://unesdoc.uneso/image0012/0012333/123352m.pdf
Accessed on October 5, 2008.
