I slogged through the new SA article today written by the Pip pumper. Parsons is supposed to go by contract law, yet look at what he says in the transcript:
"I'll look at all the damages information again and decide whether I think that there's enough there that I should award money damages. Just a set number, money damages. If I conclude that I . . . (can't) because it's too speculative, then I'll have to decide whether I'm going to award some equitable relief similar to what I already did, or give nothing, which is . . . you know, what SIGA wants" (p. 5)."
"As far as I'm concerned, I am completely unconstrained, and I could award money damages of whatever number I set. What did . . . (PharmAthene) ask for? Between $400 million and a billion dollars. . . . Maybe it could be nothing, because you say it's too speculative. . . . (That's) a serious issue, the speculative nature of it, and I've made comments before relating to it. . . . So, number one, I think I have to look at what the Supreme Court said, and go back and address in the context solely of a breach of contract. . . . I'm taking a fresh look at expectation damages. And if I conclude that I can't do expectation damages, I'll take a fresh look at what equitable relief, if any, I can grant in the circumstances. (pp. 12-13)"
Yes, he did use the words "or give nothing" and "what equitable relief, IF ANY [my emphasis] I can grant." But if he can't award expectation damages then it seems that rather than just award reliance damages, he will do what he did before (despite getting reversed on it once already) and rely on equity law to give Pip what they want (although he will come up with some justification other than promissory estoppel). Pip wants to submit new evidence of what is now known regarding the BARDA contract. Siga will be allowed to respond, but given Parsons' obvious anti-Siga bias, he will probably allow it and that's how he will get around the "speculative" issue. My q is, can he do this?
No, you have to order it. Here's the instructions from the SA article, I just got the excerpts for my post from the article.
"My report is based on the transcript of the meeting, which you can order by calling 302-255-0523, asking for the June 26, 2013 transcript for Civil Action No. 2627-VCP, and paying $4/page during the first week, and $2.50/page thereafter. The meeting provided food for thought with respect to the five issues described below."
Delaware Supreme Court did not issue directive regarding his determination of a remedy, apart from dismissing use of promissory estoppel as justification, and remanding it to him to craft remedy. He may use expectation damages (as Delaware Supreme Court made clear in its decision and set new precedent in Delaware Law in doing so) but wording means he may not either. Parsons believes remedy as constructive trust, equitable lien is appropriate and now Delaware Supreme Court has given him ability to use expectation damages as justification if he chooses. Point of this matter was raised in language of his earlier decision (p.99 of Parsons 9/22/11 opinion):
"Under these facts, expectation damages in the form of an equitable payment stream akin to a constructive
trust or an equitable lien on a share of the proceeds from ST-246 deserves serious consideration. Applying the equitable principles and remedies discussed supra to the facts of this case, I conclude that an appropriate remedy would be to afford PharmAthene a stream of future payments if and when commercial sales of ST-246 commence, after accounting for certain marginal expenses. Such a remedy would operate somewhat similarly to an award of a constructive trust or of an equitable lien on a partial interest in the proceeds derived from the patents and related intellectual property for ST-246. A remedy of this sort would comport with the Court’s authority to provide relief 'as justice and good conscience may require' and the requirement to avoid speculative damages."
He summarizes (p100) "Absent SIGA’s failure to negotiate a license agreement in good faith, PharmAthene would have controlled the ST-246 patents and product. Yet, due to its misconduct, SIGA currently controls those items and will in the future. In these circumstances, as in the case of an equitable lien, it is appropriate to recognize PharmAthene’s legitimate claim to share in the proceeds of ST-246."
It's not so much IMHO, anti Siga bias at this juncture. Parsons found Siga negotiated with PIP in bad faith and that finding was upheld by the SC. So there is real liability on the part of Siga. The issue comes down to the remedy. Pretty hard to give PIP a lump sum judgment since Siga has never shown a profit to date and may never show a profit under the Phase 1 Barda contract.
But...He wants to give PIP something, but it can't be 50-50 because the facts under general contract law simply will not support it. He could give them reliance damages, but that would be like throwing them a bone since it wouldn't amount to much.
That's why I'm leaning towards the license fee remedy. A 7%-10% license fee on worldwide gross sales of ST-246 could amount to a nice tidy sum for a little company like PIP. And if sales took off worldwide it could be a significant sum. We'll just have to wait and see.
I have no idea, but he seems to be entrenched on pip's side. I also like the authors part on foreign sales. He believes that an adjustment on the lats % in siga's favor to give incentive for siga to execute sales or something like that. Isn't that making things up as to how negotiations would go? Isn't that speculative?
International is highly unlikely to amount to much regardless what the court decides. United States has taken the lead on biodefense, both in terms of research as well as creating stockpile. Most of developed nations have chosen to bury their heads in the sand and play the fact that odds are extremely small such a risk ever develops into reality. As primary focus of those (i.e. Ummah-believing Islamists) who view all westerners as infidels, our government has actually been one of the few to take proactive measures. Not to mention the anthrax attacks raise specter of home-grown bioterror that should be evidence of risk all nations face from rogue scientists/experts. Unfortunately, the rest of the developed/western world is relying on our gracious tendencies and hoping somehow the collective intelligence community gains insight into emerging risk of these bioterror threats before they actually emerge.
Despite record of short comings (Oklahoma, Twin Towers '93, 9/11, London Tube attacks, Madrid train, Boston, etc.) most of the world would rather bury their heads in the sand and hope for the best rather than make adequate preparations for a response to the worst. As a result, no shareholder, not PIP, not SIGA, not EBS, should hold their breath in expectation of large international orders unless their is a significant increase in the perceived threat/risk level of bioterror attack.