The medical device industry is, without question, one of the most litigious industries. Medical device companies are constantly engaging in high-stakes patent or trade disputes, defending against product liability claimants, or fending off new market entrants. Patent verdicts and settlements routinely run into the hundreds of millions of dollars. So when a seemingly harmless communication becomes a major piece of evidence in a case brought against your company, you do not want to be the one who hit “Send.”
Sometimes these lawsuits can be drastically influenced by a single document. The document does not even need to be an admission of wrongdoing. Rather, it may simply contain an overzealous pitch from a medical sales rep. or a private email between colleagues. But these types of otherwise explainable statements can be misinterpreted or spun by an opponent arguing a lawsuit. At the very least, the communication can damage your credibility and integrity.
Today, communications between executives and other staff occur without much thought to wording or context. While there may be a perfectly good explanation for the communication, jurors in a long and boring patent infringement lawsuit hunger for drama. The communication may give the misimpression of a scheming conspiracy or a damning admission or it may appear to contradict other important pieces of evidence. Even where the parties to a lawsuit understand the correct meaning of a statement, a jury may not. And with rare exception, it is the jury that will decide the trial’s outcome.
Following are five tips for avoiding common pitfalls found in internal corporate communications. Understanding these will help ensure that a lawful and ethical medical device company does not inadvertently find itself having to explain its way out of a poorly worded or incorrect statement (of course, none of these tips should be used in an attempt to hide or avoid incriminating evidence or to break the law).
1. Understand that all documents or communications are potential evidence
All corporate employees should be aware that anything they say can and will be used against the company. A communication does not need to be a formal report or memoranda to be admissible as evidence in a lawsuit; it can be an email, text message, instant message, voicemail, or even a post-it note. Companies embroiled in a lawsuit frequently are required to search and produce hundreds of thousands or even millions of pages of both electronic and hard copy documents. In the medical device industry, the complete Design History File for a device is typically exchanged, as well as all memoranda, meeting minutes, and emails relating to a product’s development, manufacture, marketing, etc. Every communication or document, no matter how seemingly informal, should be written with care and attention to detail, context, and language.
Similarly, corporate employees should be aware that there is no such thing as a “private” email at work. For example, emails between friendly co-workers complaining about a manager, discussing some aspect of a project, or disclosing confidential information may one day be used in a lawsuit. Internal communications, even among friends, should always be professional and avoid the appearance of impropriety.
2. Avoid conducting ad hoc legal analysis or using legal terms
The medical device industry is rife with potential legal issues that can come up on a day-to-day basis for an engineer or a senior executive. Non-lawyer employees will often comment on the reasonableness or fairness of contract terms, infringement, or validity of a competitor’s patent or compliance with a regulatory body. This can lead to problems because these non-lawyers may not have an accurate understanding of the law or certain legal terms. An executive may, for example, conclude that a contract term is “reasonable” without appreciating the applicable contract validity law or speculate that a patent is “infringed” without understanding patent law. Also, where such communications do not involve an attorney or an attorney’s advice, they will not be protected from disclosure in a lawsuit.
At the same time, corporate employees should have at least a working familiarity with key legal concepts that may arise in the scope of their duties. For example, an engineer or inventor should be familiar with basic concepts such as “invention,” “obviousness,” “novelty,” “disclosure,” and the like. Similarly, executives should take care when using words like “monopoly,” “market power” and “false advertising,” among others. Careless use of a legal term could unintentionally give meaning to an innocent statement the author never intended.
3. Do not guess about “facts”
Any corporate document or statement is assumed to be accurate. Important dates, descriptions of how a medical device operates, and financial numbers may be a critical item of proof in a lawsuit. It will be difficult to explain to a jury that, “Yes, that is what I wrote at the time, but it was a mistake,” or “Yes, I wrote that, but it’s not what I meant.” Rather, it is important even in quick, informal communications to be as accurate as possible. If the author is unsure about a fact, he or she should clearly state so in the document.
4. Be careful of exaggeration
Common sources of seemingly damaging documents in a lawsuit are the overzealous statements of executives, marketing personnel, or salespeople. Executives will attempt to rally employees by proclaiming that the company will “bury” a competitor. A marketing employee trying to hype up a new medical device may characterize it as “identical” to a competitor’s popular patented device. Or a salesperson may mistakenly represent a device’s features or parts. In many of these instances, the author of the statement did not literally mean what was said. At face value, however, the document or communication can appear damaging. If possible, always say just what you mean.
5. Always be professional
Finally, it may seem like common sense, but every corporate communication should be treated as such. An email that is full of profanity or vulgar statements about a competitor or a coworker can sometimes be one of the most damaging pieces of evidence in a lawsuit. Both the author of the document and the company may lose credibility and integrity in front of a judge and jury.
So before hitting send, think about what you are saying and how a jury might interpret it. Do not let a thoughtless email define the face of your otherwise reputable medical device company.
For more information, visit www.mcandrews-ip.com.