TAKING CARE OF BUSINESS

27th annual Convocation addresses corporate scandals, bioinformatics

Left to right:

Lynn A. Clarke, John M. Curran, Garry M. Graber, Paul Gonson, Mark D. Rasch, Robert J. Genco, Shubha Ghosh, Jeffrey Skolnick and Hon. Joseph G. Makowski           

            “Ethics for the Computer Age: Corporate Accountability and Bioinformatics” was the cutting-edge title of the 27th annual Convocation of the UB Law Alumni Association – coming off a year of corporate scandals and celebrating the possibilities of the emerging biomedical field of bioinformatics.

            Held Nov. 2, 2002, in the Hyatt Regency Buffalo, the Convocation featured UB Law-affiliated expects in many aspects of both corporate topics.

            First at the podium was Garry M. Graber ’78, who practices bankruptcy and corporate restructuring law at the Buffalo firm Hodgson Russ. Graber spoke of “the basics: how the leaders of our business community are supposed to act, and how we are supposed to advise them.”

            For solvent entities, he said, there are two basic requirements: the duty of care and the duty of loyalty. The duty of care, he said, “requires officers and directors to run their entities with some degree of care and not be negligent. It is an ordinary prudent person standard.

            “The duty of loyalty is more often violated. It says that directors and officers must put the interest of the corporation first, ahead of their own.”

            When a corporation becomes insolvent, Graber said, special rules apply: The duties of the firm’s officers and directors are expanded to include the creditors. “There are very few cases where you have to look out for the interests of the creditors first,” Graber said. “They and the corporation join together in a community of interest.”

            Paul Gonson ’54, a former chief appellate lawyer for the federal Securities and Exchange Commission, spoke next about new rules that agency is developing for corporate attorneys. This action, he said, comes in “response to the perception that many lawyers involved in the scandals we have heard about were quiescent: that they didn’t do enough to mitigate the unfortunate financial consequences and pensioners in these enormous financial catastrophes – that they engaged in what is sometimes referred to as deliberate or willful blindness.”

            The Sarbanes-Oxley Act of 2002, Gonson said, includes an amendment, known as Section 307, that deals with the conduct of corporate lawyers. “This section,” he said, “has no legislative history or any statements from the sponsors at all, yet it is extremely broadly worded.” He quoted Sen. John Edwards during debate on the amendment: “Sometimes lawyers forget that they owe their loyalty to the corporation and the shareholders and instead decide they are working for the chief executive officer or the chief operating officer who hired them. They get to thinking that playing squash with the CEO every week is more important than keeping faith with the shareholders every day. So the lawyers may not view their duty to say to their pal the CEO, ‘No, you cannot break the law.’

            “This is such a basic concept that it is alarming to see statements like that work their way into legislation.”

            John M. Curran ’84 gave “a New York litigator’s perspective on electronic discovery,” noting that 93 percent of new information is created in digital format.

            In 2001, he said, U.S. businesses generated more than 1.4 billion e-mails, and such traffic is only going to increase. “E-discovery is here to stay,” he said, “and it is going to get bigger, and the sooner we get comfortable with it, the better litigators we are going to be and the better we can serve our clients.”

            Electronic traffic, though, raises issues of confidentiality, Curran said. “We all need to start thinking, because it is here to stay,” he said. “What about your PDAs? What about your cell phones? The bar associations are starting to talk about the confidentiality of cell phone conversations. You had darn well better have digital.”

            Good client representation, he said, “means knowing what kind of electronic resources are out there. Technological dysfunction can no longer be a source of pride.”

            Mark D. Rasch ’83, an internationally known expert in cyberlaw and computer crime, also spoke about the discovery process in detail. “When you are seeking discovery of electronic records,” he advised, “the first thing you want to do is write a definition of ‘document.’ Because if you do not ask for it, it will not be produced. Think about things like, what about telecommuters? The guy is at home, he is not on the network all the time, and he has documents in his possession. What about a personal computer with corporate files on it? Include in your definition of ‘document’ deleted files.

            “Two basic rules is that delete doesn’t and restore won’t. By definition, when you write an e-mail there are already two copies, because you’re writing to someone else. I have learned from experience that the four worst words a lawyer can hear is, ‘Oh, by the way ...’ ”

            Also on the dais as an interlocutor was Hon. Joseph G. Makowski ’79, a State Supreme Court justice and former commercial litigator.

            The Convocation’s second half celebrated the innovative biomedical science of bioinformatics, including the newly established Center of Excellence in Bioinformatics at UB. The director of that center, Jeffrey Skolnick, gave an overview of the science involved and its commercial potential.

            “What the sequencing of the human genome has done is provide a parts list for proteins,” Skolnick said. “Of these 35,000 or so proteins, we know something about the function of about half.

            “Ultimately what you would like to be able to do is to have personalized medicine. The problem is that people are different in very, very subtle ways. What we would like to be able to do is to understand the differences between human beings and target medicines to individuals. This is not going to happen tomorrow. It will happen in stages.”

            Skolnick compared the genome information to parts of a car. “I have 35,000 parts,” he said, “and at least 350,000 interactions and ways that cells can be modified. Can we figure out which proteins are responsible for specific diseases, and how we can regulate them?”

            For commercial applications, Skolnick said, speed is a prime mover. “Currently,” he said, “it takes eight to 10 years, and anywhere from half a billion to a billion dollars, to design a drug. Perhaps we can do a little bit better.”

            UB Vice Provost Robert J. Genco, head of UB’s office of science, technology transfer and economic outreach, spoke next about maximizing the return on technology created by the University’s scientists.

            “What is happening at the University is very exciting, and we need to be proactive in this area,” Genco said. “Once a piece of intellectual property is developed, we have to act in a nimble fashion. In the last six months, we have evaluated 53 total technologies and decided to patent or copyright 37. Of those 37 we decided to go ahead with, eight of them seem to be start-up possibilities.” One example, he said, is a better compound for photodynamic therapy for cancer.

            “We have wonderful opportunities because of the research and collaborations that we have here,” Genco said, “but more importantly, the community is speaking with one voice. The state, federal and city governments – they all want this to happen. I believe this is putting down deep roots. I think of this as a generational effort.”

            Finally, Law School Associate Professor Shubha Ghosh, a specialist in intellectual property law, spoke of the legal implications of bioinformatics.

            “This whole area of intellectual property and securities will become very important,” Ghosh said. Because of a shift in policy, he said, government-funded research can now be patented, leading to commercial applications: “Academics can now become sort of independent contractors.”

            Ghosh discussed three principles of intellectual property law that come into play: the idea that “building-block ideas or fundamental principles” can be owned, such as computer programs; the understanding that copyright and patent law benefit the public by allowing property rights eventually to enter the public domain; and the idea that “things in nature cannot be owned as intellectual property. This has led to some very interesting questions about what is man-made and what is natural.”