Contract Terms

A recent decision from the Federal Circuit highlights the importance of carefully considering the terms of an agreement prior to signing the document. In Nippon Shinyaku Co., Ltd. v. Sarepta Therapeutics, Inc., the parties entered into a confidentiality agreement with the intention of forming a business relationship.[1] The confidentiality agreement included a provision not to sue that included a provision noting validity challenges before the U.S. Patent and Trademark Office in included in the restrictions,[2] and a separate provision requiring all causes of action be brought in Delaware for a two-year period following the expiration of the agreement.[3]  Upon expiration of the agreement, Sarepta filed numerous IPR proceedings with the U.S. Patent and Trademark Office challenging the validity of Nippon Shinyaku’s patents.[4] The Federal Circuit analyzed the forum selection, noting “all Potential Actions” were required to be filed in the courts of Delaware, which included invalidity challenges.[5] The Court was unpersuaded by arguments that the interpretation of the agreement would effectively eliminate a party’s ability to bring an action before the U.S. Patent and Trademark Office, noting that parties can bargain away rights, such as contracting away IRP challenge rights.[6]

The Federal Circuit’s opinion highlights the criticality of understanding the terms of an agreement prior to signing.  Sarepta’s arguments relating to public policy of permitting a party access to all avenues of action fell flat, and the court countered that the parties were held to the terms that they agreed to, even if those terms restricted one party’s rights. Given the ubiquity of forum selection provisions in contracts- including many licensing agreements, joint ventures, confidentiality agreements, transfer agreements, etc.- parties must understand what they are signing and what rights the party is signing away in its contracts.

[1] Nippon Shinyaku Co., Ltd. v. Sarepta Therapeutics, Inc., No. 2021-2369; page 2 (Fed. Cir. February 8, 2022

[2] Id. at pages 2-3.

[3] Id. at page 3.

[4] Id. at page 4.

[5] Id. at pages 9-10.

[6] Id. at page 13.

2015 Florida Annual Report – How to Avoid Scams!

Its a new year! For Florida business owners, that means its time to file your 2015 Florida Annual Report with the Department of State, Division of Corporations.  The report is filed electronically on the state’s website, and must be completed between January 1, 2015 and midnight(EST) on May 1, 2015 in order to avoid the hefty $400 late fee.   Failure to file the Annual Report on time will also cause the state to administratively dissolve your company on September 25, 2015!  Need we say more?

As you navigate the Florida Annual Report filing process, please be vigilant of scams.  Florida’s public records law is superb and allows for easy access to information on Florida registered entities for legitimate purposes.  Unfortunately, the easy access to company information, also makes it easy for many scammers to pray on unsuspecting business owners.  Over the years, many such “companies” have come to existence.  However, most notably the green envelopes come to mind.  Every year those “official” green envelopes are sent to your place of business (we know at least some of you are nodding your heads right now) informing you of those important annual minutes you are required to file and asking you for money.  Don’t fall for it!

The scam generally goes like this:  you get an official looking letter in the mail that looks to be from the Division of Corporations telling you you must obtain a “Certificate of Status” or file annual minutes or some other required business license, and that this service costs $49, $85, $125, etc.  A Certificate of Status is actually a legitimate service offered by the state. However, it currently only costs $5 for LLCs and $8.75 for Corporations AND most importantly it is purely optional and completely unnecessary for most business entities in Florida!  Annual Minutes are an internal document kept by corporations and never needs to be filed with the state.

Here are 3 tips to keep you on track and avoid scams!

1. Division of Corporations will contact you by email!  They require each entity to keep a valid email address of file and they no longer send you notices regarding your Annual Report Filing using snail mail!  So avoid all official looking mail purportedly sent to you from the Division of Corporations and asking for money.

2. If you do get an email or an official looking letter that you are convinced comes from the state,  DO NOT respond via snail mail.  Go directly to the state’s website instead.  You can also email the state at [email protected] or call them at (850) 245-6056 for help.

3. When in doubt, contact a qualified Florida business attorney, they will know how to spot a fake!  A qualified attorney can also serve as your registered agent, help fill out your legitimate annual report, and answer any questions you might have about it!