Take Care When Drafting Limitations Of Liability To Exclude Lost Profits Damages

Two weeks ago, I posted Carefully Craft Your Arbitration Clause if You Want Some, But not All, Disputes Arbitrated. The recent case of Biotronik A.G. v. Conor Medsystems Ireland, Ltd., is a reminder to in-house counsel that specificity also can be critical if you want to limit the company's liability in the event of a breach.

In 2004 Biotronik and Conor Medsystems entered into an agreement that gave Biotronik the exclusive right to distribute the CoStar stent in a defined territory. Three years later, Conor Medsystems announced that FDA trials failed to establish that CoStar was equivalent to Taxus, a competing stent manufactured by Boston Scientific. As a result, Conor Medsystems recalled the CoStar stent and removed it from the worldwide marketplace.