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SIGA Technologies Inc. Message Board

  • csmclemore csmclemore May 26, 2013 5:00 AM Flag

    This is the question Parsons must struggle with to award expectation damages without the promissory estoppel crutch:

    What are the damages PharmAthene suffered as a result of SIGA’s failure to negotiate a license agreement in good faith.

    Hint: Parsons already stated that damages will not be based on what PharmAthene suffered because it did not obtain a license strictly conforming to the LATS. And sadly, PharmAthene’s briefs and expert evidence focus mostly on the damages that would have been due if a license in strict conformance with the LATS had been formed, which, as Parsons so carefully noted, provides only limited guidance in determining the precise bounds of an appropriate remedy.

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    • The only tangible amounts in the con tract are the upfront money and the milestones. Since the milestones might not have been achieved, as I recall that was 16 million payable to siga. That implies that PIP thought it was worth AT LEAST the upfront payment, so that's what they get.

    • Reliance, i.e. the value of the "assistance" that was given as the companies worked together to develop ST-246.

    • Maybe I was too coy with this post originally because it really does sum this whole thing up very neatly. Allow me to break it down because I still see a lot of folks out there who are under the mistaken impression that the LATS is, was, or ever will be binding (Jimmy Altucher, I'm looking at you). Parsons said in his original opinion that the LATS was not a binding contract The Supreme Court of Delaware, in its opinion, agreed with his conclusion regarding the non-binding nature of the LATS.

      Both Parsons and the Supreme Court did conclude that SIGA had a duty to negotiate a license agreement with PharmAthene having economic terms substantially similar to those agreed to in the LATS. SUBSTANTIALLY SIMILAR, not binding! What substantially similar economic terms would have been agreed to? They are impossible know under contract law. They are easy to make up under promissory estoppel where "if a party changes his or her position substantially either by acting or forbearing from acting in reliance upon a gratuitous promise, then that party can enforce the promise ALTHOUGH THE ESSENTIAL ELEMENTS OF A CONTRACT ARE NOT PRESENT"

      And that brings me back to my original question which I will expand a little to hopefully make more clear to those who are still struggling: What are the damages PharmAthene suffered as a result of SIGA’s failure to negotiate a license agreement-which does not have to strictly conform to the LATS-in good faith?

      Again, I stress that answers referring to speculative and unforeseeable damages will receive no credit from the Delaware Supreme Court.

    • Remember, no credit will be awarded for answers referring to damages that are speculative or unforeseeable.

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