Deputy Assistant Attorney General Okuliar Delivers Remarks to the Telecommunications Industry Association

Promoting Predictability and Transparency in Antitrust Enforcement and Standards Essential Patents 

 

  1. The Importance of Predictability and Transparency to Antitrust Enforcement

Good afternoon.  It’s a pleasure to join you today, thank you for the invitation.  I’d like to begin with some prepared remarks addressing the importance of predictability and transparency to antitrust enforcement, particularly as it relates to standards-essential patents, give an overview of the Division’s recent activity in this space, and then turn to some questions.

Antitrust law can be a very powerful tool to promote economic dynamism and innovation.  It establishes important rules regarding how firms may operate in marketplaces across the economy.  Firms, in turn, rely on these rules when making all sorts of strategic decisions, from day-to-day concerns to overall operating plans, from pricing or discounting strategies to long-term growth strategies.

For any economy to realize meaningful long-term growth, firms (and consumers) must have confidence in the underlying legal rules governing their existence and behavior.  Starting and growing a company is often expensive and risky.  Maintaining a business is also costly, and firms are constantly assessing their ongoing viability and potential for growth. Confidence in the basic legal system is, of course, critical.  Confidence in specialized regulatory regimes is likewise important.  Firms are more likely to engage in costly R&D, and in the kind of expensive, time-consuming experimentation that innovation tends to require, when they are confident they will be rewarded for these investments—that, for example, antitrust laws will not change in the interim between investment and return in a way that deprives the firm from being able to recoup and benefit from its investments.

This innovation and dynamic competition are critical to our modern economy.  So the more that we, as enforcers, can do to ensure the basic competition law rules of the road are clear and predictable, the more we can help to preserve competition and to spur economic growth.  Not only do firms benefit from this, but so, too, do consumers.  They are the beneficiaries of the increased R&D and innovation that can thrive in a reliable regulatory and enforcement regime.  Moreover, clear and foreseeable enforcement empowers consumers, who can then more readily understand when unlawful conduct may be occurring, and be better-positioned to identify violations and to protect themselves and others.

Predictability and transparency in antitrust enforcement are important across markets and industries, but are often particularly important at the intersection of antitrust and intellectual property.  Both competition and IP laws seek to foster long-term innovation and dynamic competition—which, again, depend on firms continuing to engage in risky and costly efforts today in the hopes of achieving rewards tomorrow.  This is true for owners of various IP rights, including standards-essential patent holders.

As competition law regimes have proliferated across the globe, it has become ever more important for antitrust enforcers to be clear regarding applicable rules and standards.  As one of the oldest competition law regimes in the world, we at the Antitrust Division realize we have an important duty to provide an example of a transparent and predictable competition law system to which others may turn as a model.  We use many tools to help raise awareness and build a better public understanding of our competition laws and policies.  Of course, we primarily build transparency and predictability through the discrete law enforcement actions we bring.  We supplement these actions with a host of efforts including: (1) guidelines and policy statements, like our Horizontal and Vertical Merger Guidelines and our Joint Policy Statement on Remedies for Standards-Essential Patents Subject to Voluntary F/RAND Commitments; (2) business review letters, which provide insights to the requesting parties and to the public regarding factors the Division considers when analyzing certain conduct; (3) amicus briefs and statements of interest in courts, where we can assist generalist judges in analyzing important and developing competition law issues; and (4) speeches—like this one—which provide an opportunity for Division leadership to discuss with the public key issues and developments.

Today, I’d like to focus on two particular areas in which this administration has made significant strides to enhance transparency and predictability in the competition and IP space. First, I’ll address our efforts to ensure that our business review process continues to benefit requesting parties and the public and that it is not misused or misinterpreted by parties or other stakeholders. Second, I’ll turn to the importance of predictability and transparency regarding the enforcement and licensing of standards-essential patents (SEPs).

  1. Promoting Transparency and Predictability through the Business Review Process  

One way the Antitrust Division can provide transparency into our enforcement intentions is through our business review process.  Some of you may have heard of the business review process and others may not be familiar, so let me provide a little background.  The process for a business review is set out in the Code of Federal Regulations. [1]  Under this procedure, parties may seek the Antitrust Division’s enforcement intentions with respect to proposed conduct (that is, conduct that has not yet been implemented by the parties).  The Department will review the conduct based on the materials the parties provide, do a limited investigation, and determine whether it would likely take action—bring an enforcement action—should the conduct begin.  The Division may also decline to state its enforcement intentions, although this outcome is fairly rare.[2]  

Business review letters have provided guidance to the parties and the business community in important areas at the intersection of intellectual property and antitrust such as patent pooling[3] and standards development.[4]  Regarding the latter, in 2006 and 2007, for example, the Division issued positive business review letters (no present intention to enforce) to the VMEbus International Trade Association (VITA) and the Institute of Electrical and Electronics Engineers (IEEE) respectively, which amended their patent policies to include provisions permitting the ex ante disclosure of maximum licensing terms for standards-essential patents.[5]  We also issued a favorable review to the GSM Association after it amended its standards development policies to include more stakeholders in the process.[6]  More recently, the Department also issued several expedited business review letters that addressed information sharing and collaborations related to COVID-19 response.[7]  Thus, the business review process can be a useful way to understand the Antitrust Division’s thinking on certain novel conduct or complex business arrangements.  The process also furthers the Department’s goal of promoting transparency and predictability with respect to our antitrust enforcement policies.

With that background, I would like to discuss a recent example in which the Antitrust Division took the step of issuing a supplement to a business review letter that we issued several years prior.  I am referring to the Antitrust Division’s letter to IEEE in September of this year.  

By way of background, in 2014, IEEE-SA again proposed to amend IEEE’s patent policy to clarify the scope of IEEE’s patent licensing obligations by, among other ways, requiring patent holders to license their standards-essential patents for “any Compliant Implementation,” defining one mandatory and other recommended factors for reasonable patent royalty calculations, and placing certain limitations on injunctions.[8]  Before doing so, as in 2007, IEEE sought a business review from the Antitrust Division, inquiring whether the Division would challenge the patent policy changes as anticompetitive.[9]  Our task was to determine whether if implemented these policy changes would harm competition, for example, by anticompetitively reducing royalties and diminishing incentives to innovate.  The Antitrust Division issued a favorable review thereafter, indicating it had no present intention to challenge the proposed changes based on law and Antitrust Division policy at the time.[10]  Significantly, our 2015 Letter to IEEE indicated on the very first two pages that the Division’s review was not an endorsement of the IEEE’s patent policy itself.[11] 

Despite this, over the years, the Antitrust Division heard repeated concerns that IEEE and other stakeholders used or referred to the IEEE business review letter as a DOJ endorsement of the policy.  Whether these statements were misinterpretations or affirmative misrepresentations, they were causing confusion in the business community and among foreign competition enforcers.  Indeed, in examining these complaints, we found that confusion about the 2015 IEEE Letter “appear[ed] to extend around the world and may have influenced foreign enforcement activity.”[12] 

These developments were concerning.  As I explained, a business review letter provides guidance to the requesting parties, but also generally to the business community at large, and any misinterpretation or misrepresentation is of great interest to us.  Consequently, this past September, the Antitrust Division issued an update to the 2015 IEEE Letter.  Indeed, this is the first time in the history of the business review process that the Division felt compelled to issue a supplementary letter to address the misinterpretation of a favorable review. 

You may be wondering what authority the Division has to supplement a business review letter.  The Antitrust Division’s authority to take subsequent action comes from the business review process itself, which states that “the Division remains completely free to bring whatever action or proceeding it subsequently comes to believe is required by the public interest.”[13]  We determined that in this unusual circumstance a supplementary letter to IEEE was in the public interest because there was widespread confusion about the meaning of the Department’s 2015 review.  In addition, material developments had taken place in the law and policy surrounding SEPs that called into question aspects of the analysis in the 2015 Letter.  We asked the IEEE to address the misrepresentation and urged it to “ensure that neither it nor its members characterize the 2015 Letter as an endorsement of IEEE’s Policy.”[14] 

In addition, we believed it was in the public interest to address some other developments related to the IEEE’s policy changes.  Our supplemental letter notes that the patent policy changes have been criticized by some for resulting in less patent holder participation.  IEEE is in the best position to evaluate these complaints.  Therefore, we encouraged IEEE to consider whether changes to its patent policy may be warranted in order to address this potential issue.  Our supplemental letter emphasized the importance of a balanced standards development process that considers the views of different groups of stakeholders, including implementers and patent holders.  Standards development can only benefit from participation by a diverse group, many with different technologies that may compete for inclusion in a standard.  To be sure, competition allows for the inclusion of the best technical solutions in very complex interoperability standards.  These standards form the backbone of our global economy and will facilitate the wide-spread adoption of 5G technologies and the proliferation of IoT devices desired by consumers. 

Finally, we believed it was in the public interest to point out recent changes to U.S. law and policy that rendered aspects of the 2015 IEEE review outdated, particularly with respect to the availability of injunctions, reasonable royalty calculation, and the concept of hold up.  Regarding injunctions, the supplementary letter discusses an important change in Executive Branch policy set forth in the 2018 Joint Policy Statement on Remedies for Standards-Essential Patents Subject to Voluntary F/RAND Commitments (Joint Statement), which I will discuss more fully in a few moments.[15]  While IEEE’s patent policy limits injunctive relief for SEP holders (unless a potential licensee refuses to comply with the outcome of infringement litigation, “including an affirming first-level appellate review,”)[16] the Joint Statement counsels against placing special limitations on injunctions.  It advocates that no special damages rules apply to SEPs and that courts should apply e-bay’s four factor test to determine whether an injunction is appropriate.[17]  In addition, the Antitrust Division’s 2015 IEEE Letter focuses on how the IEEE’s patent policy can address licensing hold up by patent holders that might harm competition, when today concerns over hold up as a competition problem have largely dissipated.  Indeed, the Ninth Circuit in FTC v. Qualcomm recognized the evolution of the law in this specific area, and “note[d] the persuasive policy arguments of several academics and practitioners with significant experience in SSOs, FRAND, and antitrust enforcement, who have expressed caution about using the antitrust laws to remedy what are essentially contractual disputes between private parties. . . .”[18]  The 2015 Letter also discussed hold up without considering the possibility of “hold out” by patent implementers.  Citing other academics, our supplement explains that hold out can also have detrimental effects on innovation.  Indeed, there are sophisticated parties on both sides of the negotiation and therefore it is important not to give greater consideration to hold up than hold out.  One last point about reasonable royalty calculation.  IEEE’s patent policy also recommends the use of the smallest saleable patent practicing unit (SSPPU) as the appropriate royalty base for SEPs.  The Antitrust Division’s 2015 Letter found this limitation consistent with “the direction of current U.S. law interpreting [F]RAND commitments” or U.S. patent damages law.[19]  Again, our supplement points out that the caselaw has evolved since 2015 and SSPPU is not the absolute rule for determining a reasonable royalty for complex products.  Thus, in clarifying the current state of the law, and the Department’s antitrust enforcement policies and priorities, we hope to promote further transparency and predictability for the business community, including for standards implementers and standards-essential patent holders.

One final note.  You may be wondering whether supplementing prior business reviews will become common practice at the Division, and if so, how can the business review process continue to promote transparency and predictability.  We do not anticipate there will be an increased need to issue more supplemental letters to correct misrepresentations or misunderstandings about a particular review.  As I mentioned, the misapplications and mischaracterizations of the 2015 IEEE Letter, necessitated a step never before required in the history of the process.  In addition, we wrote a supplemental letter to align the now outdated analysis in the 2015 Letter with current U.S. law and policy, which have evolved in important ways over the last five years in relation to the licensing of SEPs and the governance of SDOs.  Great care goes into issuing these letters by the Division staff, and I am confident that this circumstance will remain an outlier.

  1. Predictability in SEP Enforcement

Now I’d like to address the importance of predictability and transparency in the enforcement and licensing of standards-essential patents, which also benefits consumers of the products and services of which such patents are a part. 

What do I mean by predictable and transparent?  It is important for licensors and licensees to understand the rules that will govern their negotiations and how licensing disputes might be resolved.  This makes the process better for everybody.  Without some measure of certainty, licensors may be unwilling to let their technology be incorporated into standards, or less willing to license their technology after it is standardized.  Licensees also may be less willing to take a license.  We all benefit when this process runs efficiently, when standards reflect the best technology we have to offer, and when standards are accessible to more potential competitors.                                                              

We understand that many policy makers around the globe and experts in their field are thinking about these issues, which illustrates how important they are to the marketplace.  For example, we are watching with interest developments in Europe.  The European Commission is considering whether it should institute a procedure that will assess the essentiality of patents declared essential to certain standards, including 5G, that could provide more certainty to licensing negotiations depending on how the process is implemented.[20]  Patent pools, such as Avanci, already perform these essentiality checks for patents relevant to their platforms.[21]  A similar practice has been developed by the Japanese Patent Office but it has not been widely utilized.[22]  In addition, as a result of a referral from the Dusseldorf Regional Court in Germany, the European Court of Justice will consider the competition implications of a patent holder choosing where in the supply chain to license its SEPs.[23]  

Of course, we are thinking about these issues in the United States as well.  This is certainly not the first time you have heard me or others at the Division address the need for efficient licensing that appropriately compensates standards-essential patent owners for their inventions.  AAG Delrahim, for example, recently emphasized that imposing antitrust liability for a patent owner’s refusal to license their patents—standards-essential or otherwise—“dramatically shifts bargaining power between patent holders and implementers in a way that distorts the incentives for real competition on the merits through innovation.”[24]  By contrast, when parties negotiate against the backdrop of contract law, they do so “on equal terms . . . because there is no threat of treble damages skewing the negotiations in favor of the implementer.”[25]  This is a key part of AAG Delrahim’s “New Madison” approach.[26]  Predictability and transparency encourage negotiation, on equal footing, between licensors and licensees, from which we all benefit.   

The Antitrust Division has also emphasized these principles in statements of interest and amicus briefs.[27]  For example, we have stressed the importance of providing licensors and licensees predictable, transparent, and flexible rules.[28]  We have also reiterated our view, increasingly adopted by courts, that offering a royalty rate that the licensee thinks is too high, or seeking to enjoin unwilling licensees, does not violate the antitrust laws.[29]  Nor should it.  Both sides need leverage for negotiations to work.   If you take away the possibility of injunctions against unwilling licensees, or introduce the specter of treble damages, this makes negotiations less efficient.       

As I mentioned earlier, the Antitrust Division also issued a Joint Statement, along with the United States Patent and Trademark Office and the National Institute of Standards and Technology. This Joint Statement discusses the importance of injunctive relief for standards-essential patent owners.[30]  Before issuing this statement, we heard from several different stakeholders that there was real confusion about the United States’ view on whether injunctive relief was available to standards-essential patent owners.  The Policy Statement provides a clear answer.  There is no special set of rules for patents and standards-essential patents.  Patent owners have a right to exclude others from using their invention, and an important part of that right is the ability to get an injunction when licensing negotiations break down.  This makes it easier for licensors and licensees to predict how their disputes will be resolved—using the same rules of the road that govern other types of licensing and infringement disputes.  It also promotes transparency, providing a clear message to all stakeholders, including our international allies, from the Executive Branch.   

Outside of the United States, courts have begun adopting many of the same principles we have advocated here at home.  The UK Supreme Court decision in Unwired Planet is a good example.  There, the lower court enjoined the defendants from selling products in the UK unless they accepted a license to the plaintiffs’ patent portfolios on fair, reasonable, and non-discriminatory (FRAND) terms set by the court.  In affirming, the UK Supreme Court made several points worth highlighting.

First, the Court rejected the idea that injunctive relief is inconsistent with a FRAND commitment.  As the Court explained: “[I]f the patent-holder were confined to a monetary remedy, implementers who were infringing the patents would have an incentive to continue infringing until, patent by patent, and country by country, they were compelled to pay royalties. It would not make economic sense for them to enter voluntarily into FRAND licences.”[31]  Instead, the Court recognized that “[t]he possibility of the grant of an injunction by a national court is a necessary component of the balance which [ETSI’s intellectual property rights (IPR)] Policy seeks to strike, in that it is this which ensures that an implementer has a strong incentive to negotiate and accept FRAND terms for use of the owner’s SEP portfolio.”[32]  Put another way, the threat of an injunction helps balance the negotiation process and ensure that both sides come to the table and negotiate.  The Court added that the defendants’ arguments for subjecting standards-essential patents to special rules “attache[d] too much weight to the protection of implementers against ‘holding up’ . . . and fail[ed] to give due weight to the counterbalancing purpose” of protecting standards-essential patent owners “against ‘holding out’” by licensees.[33]  

Second, the Court acknowledged that licensing intermediaries can play an important role in licensing negotiations.  As the Court explained, “the assignment of rights to a [non-practicing entity] . . . may be the most straightforward means by which a [standards-essential patent] owner can obtain value from its intellectual property which is the fruit of its research and innovation.”[34]  The Court therefore rejected the argument that the availability of injunctions should depend on whether the plaintiff makes products or not, concluding that if the right to an injunction is “treated as qualified in the hands of the [non-practicing entity] the consequence will be that the [standards-essential patent] owner will not receive the reward which its investment merits.”[35] 

Finally, the Court emphasized the importance of relying on “real world” evidence in examining whether a particular licensing offer complies with a patent owner’s FRAND commitment.[36]  This sort of flexible approach gives parties room to negotiate using precedent but also their own experience, like prior licenses, as a guide.

Taken together, Unwired Planet reflects many of the same principles the Division has advanced.  Parties benefit from transparency rather than a system where special rules govern depending on whether the patent owner has made a FRAND commitment or manufactures products.  When it comes to licensing, a level playing field benefits licensors and licensees, and a patent owner’s right to obtain an injunction is an important part of ensuring that these negotiations remain balanced.  These rules make licensing predictable, more transparent, and ultimately more efficient for licensors, licensees, and consumers. 

These developments make me optimistic.  But, as is so often the case, new debates have emerged that could undermine this progress.  I’d like to focus on two of these issues here.

The first issue is forum shopping.  Courts in the United States, United Kingdom, Germany, and China, among others, have taken different approaches in interpreting the rights of standards-essential patent owners.  Some variation is expected, and it serves as a kind of international dialogue that develops thinking on these issues for which we all benefit.  For example, the Court in Unwired Planet cited several cases from the United States, Germany, and China in its decision.  But if certain jurisdictions adopt more plaintiff-friendly or defendant-friendly rules, “intra-jurisdiction competition” can fuel a “race to the courthouse” as parties rush to have their disputes heard in the forum with the rules most favorable to them before the other side files suit in their preferred forum.[37]  This makes dispute resolution less predictable.  It also makes negotiations less predictable.  Now both sides have an incentive to negotiate less and litigate more, and earlier.[38]  That is worse for everyone involved, including consumers. 

There are some natural limits on forum shopping in patent cases.  For example, a patent issued by the United States Patent and Trademark Office generally gives you exclusive rights in the United States and it can only be invalidated by a court in the United States.  Some recent court decisions have undermined this process, however, by requiring parties to accept global licenses in resolving local patent disputes.  Once they do so, “there is little reason for courts in other jurisdictions to calculate either global FRAND rates or even FRAND rates for patents in their own jurisdictions.  Thus, the first court to set a FRAND royalty rate for a particular set of parties will likely be the only one that will actually do so.”[39]  That reinforces both sides’ incentive to rush to the courthouse before they have tried to resolve their disputes across the negotiating table. 

The second issue I would like to talk about is a related problem—the rise of antisuit injunctions.[40]  An antisuit injunction is an “interlocutory remed[y] issued by a court in one jurisdiction to prohibit a litigant from initiating or continuing parallel litigation in another jurisdiction.”[41]  I think of it as not just a race to the courthouse, but an arms race.  For example, let’s say as licensing negotiations start to break down the patent owner files a lawsuit in its preferred forum.  That’s the race to the courthouse at work.  Now imagine that the licensee files another lawsuit in its preferred forum.  Next, it asks this new court to enjoin the plaintiff from continuing to litigate its already filed case.  That is the antisuit injunction.  Confronted with this practical mess, courts have taken different approaches to issuing antisuit injunctions.[42]

So, why is this an arms race to the courthouse?  Well, the next obvious step is that parties will file anti-antisuit injunctions to stop the other side from getting an antisuit injunction, and so on.  All of this before a judge even reached the merits of their licensing dispute.  These races have already begun in litigation involving important next generation technology and threaten to become a common practice.   

This process does not encourage parties to negotiate with each other.  It does not make licensing more transparent.  Or more predictable.  Or better for consumers.  Instead, it leaves both sides unsure of where their disputes will be resolved or how.  Nobody is better off. 

I am still an optimist, however.  Courts have rendered decisions that have created a race to the courthouse, or in some cases an arms race, but these are solvable problems.  And I am raising them here because I think standards development organizations like yours can be a key part of the solution.  For example, SDOs could help resolve some of these issues before they spill over into court by adopting forum selection clauses in their IPR policies.  TIA’s current patent policy requires patent owners to make a FRAND commitment, but it does not say anything about what happens next.[43]  As the Court noted in Unwired Planet, the same is true for ETSI and many other SDOs. 

Adopting some guidance about the way licensing disputes should be resolved—so long as those rules are adopted through a process that is driven by consensus, balance, and transparency and provides for due process[44]—could bring a significant measure of clarity to patent licensing.  It could curb forum shopping and the arms race of antisuit injunctions.  It could also encourage licensors and licensees to use litigation as a last resort, when good-faith negotiations fail.  This can make licensing, and ultimately the implementation of standards, more efficient, to the benefit of downstream competition and consumers.  The alternative is continuing an arms race to the courthouse that undermines the hard work of developing and implementing standards.  That is a race nobody will win. 

Thank you for the opportunity to speak today.  I am happy to take questions.

 


[1] 28 C.F.R. § 50.6.

[3] See, e.g., Letter from Makan Delrahim, Ass’t Att’y Gen., Antitrust Div., U.S. Dep’t of Justice, to Mark H. Hamer, Esq., Baker & McKenzie, at 9-10 (July 28, 2020), https://www.justice.gov/atr/page/file/1298626/download.

[4] Letter from Thomas O. Barnett, Ass’t Att’y Gen., Antitrust Div., U.S. Dep’t of Justice, to Robert A. Skitol, Esq., Drinker, Biddle & Reath, LLP (Oct. 30, 2006) [hereinafter “VITA letter”] ; Letter from Makan Delrahim, Ass’t Att’y Gen., Antitrust Div., U.S. Dep’t of Justice, to Timothy Cornell, Esq., Clifford Chance US LLP (Nov. 27, 2019) [hereinafter “GSMA Letter”].

[5] Vita Letter; Letter from Renata B. Hesse, Ass’t Att’y Gen., Antitrust Div., U.S. Dep’t of Justice, to Michael A. Lindsay, Esq., Dorsey & Whitney LLP (Feb. 2, 2015) [hereinafter “2015 IEEE Letter”].

[6] GSMA Letter.  The business review process typically takes anywhere from three months to over a year.

[7] See, e.g., Letter from Makan Delrahim, Ass’t Att’y Gen., Antitrust Div., U.S. Dep’t of Justice, to Thomas O. Barnett, Covington & Burling (July 23, 2020).

[8]  Letter from Michael A. Lindsay, Esq., Dorsey & Whitney LLP, to William J. Baer, Ass’t Att’y Gen., Antitrust Div., U.S. Dep’t of Justice, at 16 (Sept. 30, 2014) [hereinafter “IEEE Request Letter”].

[9]  IEEE Request Letter.

[10] 2015 IEEE Letter.

[11] 2015 IEEE Letter ( “The Department’s task in the business review process is to advise the requesting party of the Department’s present antitrust enforcement intentions regarding the proposed conduct. It is not the Department’s role to assess whether IEEE’s policy choices are right for IEEE as a standards-setting organization (“SSO”). SSOs develop and adjust patent policies to best meet their particular needs”).

[12]  Letter from Makan Delrahim, Ass’t Att’y Gen., Antitrust Div., U.S. Dep’t of Justice, to Sophia A. Muirhead, Gen. Counsel & Chief Compliance Officer, IEEE, at 3 (Sept. 10, 2020) [hereinafter “2020 IEEE Letter”] (citing an action in Korea and EC policy paper).

[13] 28 C.F.R. § 50.6(9).

[14] 2020 IEEE Letter, at 3.

[15] U.S. Dep’t of Justice, U.S. Pat. & Trademark Off., & Nat’l Inst. of Sci. & Tech., Joint Policy Statement on Remedies for Standards-Essential Patents Subject to Voluntary F/RAND Commitments, at 6 (Dec. 19, 2019), https://www.justice.gov/atr/page/file/1228016/download [hereinafter “Joint Policy Statement”].

[16] 2015 IEEE Letter, at 9.

[17] See Joint Policy Statement.

[18] FTC v. Qualcomm Inc., 969 F.3d 974,  39 (9th Cir. 2020); 2020 IEEE Letter at 4-5.

[19] 2015 IEEE Letter, at 8.

[20] See generally Rudi Bekkers et al., Pilot Study for Essentiality Assessment of Standard Essential Patents (2020), https://ec.europa.eu/jrc/en/publication/pilot-study-essentiality-assessment-standard-essential-patents.

[21] See Letter from Makan Delrahim, Ass’t Att’y Gen., Antitrust Div., U.S. Dep’t of Justice, to Mark H. Hamer, Baker & Mckenzie (July 28, 2020).

[22] See Rudi Bekkers et al., Pilot Study for Essentiality Assessment of Standard Essential Patents 51-54 (2020), https://ec.europa.eu/jrc/en/publication/pilot-study-essentiality-assessment-standard-essential-patents (discussing Hantei-E).

[26] See also Makan Delrahim, Assistant Att’y Gen., Antitrust Div., U.S. Dep’t Justice, The “New Madison” Approach to Antitrust and Intellectual Property Law, Keynote Address at University of Pennsylvania Law School (Mar. 16, 2018), https://www.justice.gov/opa/speech/file/1044316/download.

[28] See, e.g., Br. for the United States as Amicus Curiae in Support of Neither Party, HTC Corp. v. Telefonaktiebolaget LM Ericsson, No. 19-40566 (5th Cir. Oct. 30, 2019).

[29] See, e.g., Statement of Interest of the United States at 9-11, Cont’l, No. 3:19-CV-02933-M (N.D. Tex. Feb. 27, 2020); Cont’l, 2020 WL 5627224, at *12 (N.D. Tex. Sept. 10, 2020) (adopting this argument). 

[30] Joint Policy Statement, at 6.

[31] Unwired Planet Int’l Ltd. & Other Respondents v. Huawei Technologies Co Ltd. & Another [2020] UKSC 37 167.

[34] Id. at 89; see also Statement of Interest for the United States in Apple v. Fortress at 3 (“Ensuring that [licensing] intermediary activity is not unduly constrained . . . can help ensure that . . . inventors are properly rewarded for beneficial research and development efforts—and are incentivized to proceed with them.”). 

[35] Unwired Planet Int’l Ltd. & Other Respondents v. Huawei Technologies Co Ltd. & Another [2020] UKSC 37 89.

[36] Compare id. at 62 (“[C]ommercial practice in the relevant market is likely to be highly relevant in an assessment of what terms are fair and reasonable for these purposes.”), with Br. for the United States in HTC v. Ericsson at 18–19 (discussing the role of “market-based evidence” in evaluating whether licenses are fair and reasonable). 

[37] Jorge L. Contreras, The New Extraterritoriality: Frand Royalties, Anti-Suit Injunctions and the Global Race to the Bottom in Disputes over Standards-Essential Patents, 25 B.U. J. Sci. & Tech. L. 251, 280–283 (2019).

[38] Id. at 283 (“[A] ‘race to the courthouse’ . . . may prematurely drive parties to litigation rather than negotiation or settlement.”). 

[40] See, e.g., Br. of the United States, Lenovo v. IPCom, N. 5:19-cv-01389-EJD (N.D. Cal. filed Oct. 2019), https://www.justice.gov/atr/case-document/file/1213856/download (arguing that there was no antitrust basis for granting an anti-suit injunction that would have prevented IPCom from enforcing its patents and seeking an injunction in the United Kingdom, as the US had no policy interest in preventing an injunction or resolving the alleged FRAND breach under antitrust law). 

[42]Jorge L. Contreras, The New Extraterritoriality: Frand Royalties, Anti-Suit Injunctions and the Global Race to the Bottom in Disputes over Standards-Essential Patents, 25 B.U. J. Sci. & Tech. L. 251, at 277-278 (2019).

More from: December 9, 2020

Hits: 6

News Network

  • Consumer Privacy: Better Disclosures Needed on Information Sharing by Banks and Credit Unions
    In U.S GAO News
    Banks and credit unions collect, use, and share consumers' personal information—such as income level and credit card transactions—to conduct everyday business and market products and services. They share this information with a variety of third parties, such as service providers and retailers. The Gramm-Leach-Bliley Act (GLBA) requires financial institutions to provide consumers with a privacy notice describing their information-sharing practices. Many banks and credit unions elect to use a model form—issued by regulators in 2009—which provides a safe harbor for complying with the law (see figure). GAO found the form gives a limited view of what information is collected and with whom it is shared. Consumer and privacy groups GAO interviewed cited similar limitations. The model form was issued over 10 years ago. The proliferation of data-sharing since then suggests a reassessment of the form is warranted. Federal guidance states that notices about information collection and usage are central to providing privacy protections and transparency. Since Congress transferred authority to the Consumer Financial Protection Bureau (CFPB) for implementing GLBA privacy provisions, the agency has not reassessed if the form meets consumer expectations for disclosures of information-sharing. CFPB officials said they had not considered a reevaluation because they had not heard concerns from industry or consumer groups about privacy notices. Improvements to the model form could help ensure that consumers are better informed about all the ways banks and credit unions collect and share personal information. Excerpts of the Gramm-Leach-Bliley Act Model Privacy Form Showing Reasons Institutions Share Personal Information Federal regulators examine institutions for compliance with GLBA privacy requirements, but did not do so routinely in 2014–2018 because they found most institutions did not have an elevated privacy risk. Before examinations, regulators assess noncompliance risks in areas such as relationships with third parties and sharing practices to help determine if compliance with privacy requirements needs to be examined. The violations of privacy provisions that the examinations identified were mostly minor, such as technical errors, and regulators reported relatively few consumer complaints. Banks and credit unions maintain a large amount of personal information about consumers. Federal law requires that they have processes to protect this information, including data shared with certain third parties. GAO was asked to review how banks and credit unions collect, use, and share such information and federal oversight of these activities. This report examines, among other things, (1) what personal information banks and credit unions collect, and how they use and share the information; (2) the extent to which they make consumers aware of the personal information they collect and share; and (3) how regulatory agencies oversee such collection, use, and sharing. GAO reviewed privacy notices from a nongeneralizable sample of 60 banks and credit unions with a mix of institutions with asset sizes above and below $10 billion. GAO also reviewed federal privacy laws and regulations, regulators' examinations in 2014–2018 (the last 5 years available), procedures for assessing compliance with federal privacy requirements, and data on violations. GAO interviewed officials from banks, industry and consumer groups, academia, and federal regulators. GAO recommends that CFPB update the model privacy form and consider including more information about third-party sharing. CFPB did not agree or disagree with the recommendation but said they would consider it, noting that it would require a joint rulemaking with other agencies. For more information, contact Alicia Puente Cackley at (202) 512-8678 or CackleyA@gao.gov or Nick Marinos at (202) 512-9342 or MarinosN@gao.gov.
    [Read More…]
  • Former DeSales University Priest Indicted on Child Pornography Offenses
    In Crime News
    A former DeSales University priest was charged by indictment with three counts of child pornography offenses.
    [Read More…]
  • Texas Woman Charged with Fraudulently Obtaining Nearly $2 Million in COVID Relief Funds
    In Crime News
    A Texas woman has been taken into custody on allegations she fraudulently obtained more than $1.9 million in Paycheck Protection Program (PPP) loans, announced Acting Assistant Attorney General Brian C. Rabbitt of the Justice Department’s Criminal Division and U.S. Attorney Ryan K. Patrick of the Southern District of Texas.
    [Read More…]
  • Judiciary Employees Find Ways to Help During Pandemic
    In U.S Courts
    Learn about the countless Judiciary employees across the court system who have volunteered to help people in need in their communities during the COVID-19 pandemic.
    [Read More…]
  • Wisconsin Pain Management Companies To Settle False Claims Act Allegations
    In Crime News
    The Department of Justice announced today that Advanced Pain Management Holdings Inc. (APMH), its wholly-owned subsidiaries,  APM Wisconsin MSO (“APM MSO”) and Advanced Pain Management LLC (APM LLC); and Advanced Pain Management S.C. (APMSC) (collectively the “APM Entities”) have agreed to pay $885,452 to settle claims that they violated the False Claims Act by paying kickbacks and by performing medically unnecessary laboratory tests.  The APM Entities are headquartered in the Milwaukee, Wisconsin area. 
    [Read More…]
  • Ensuring Our Safety and Security through a 90-Day Suspension of the Direct Access Program for U.S.-Affiliated Iraqis
    In Crime Control and Security News
    Daniel B. Smith, Acting [Read More…]
  • Global Coalition to Defeat ISIS Meeting on ISIS Threats in West Africa
    In Crime Control and Security News
    Office of the [Read More…]
  • Michigan Man Pleads Guilty to Conspiring to Defraud the IRS and to Steal Crash Reports from the Detroit Police Department
    In Crime News
    A Birmingham, Michigan, resident pleaded guilty today to conspiring to defraud the IRS and to steal from an organization receiving federal funds, announced Acting Deputy Assistant Attorney General Stuart M. Goldberg of the Justice Department’s Tax Division.
    [Read More…]
  • Comparative Effectiveness Research: Patient-Centered Outcomes Research Institute and HHS Continue Activities and Plan New Efforts
    In U.S GAO News
    GAO found that the Patient-Centered Outcomes Research Institute (PCORI)—a federally funded, nonprofit corporation—and the Department of Health and Human Services (HHS) have continued to perform comparative clinical effectiveness research (CER) activities required by law since our prior report issued in 2015. CER evaluates and compares health outcomes, risks, and benefits of medical treatments, services, or items. The requirements direct PCORI and HHS to, among other things, fund CER and disseminate and facilitate the implementation of CER findings. GAO's analysis of PCORI and HHS documents show that they allocated a total of about $3.6 billion for CER activities and program support during fiscal years 2010 through 2019 from the Patient Centered Outcomes Research Trust Fund (Trust Fund). Specifically, PCORI allocated about $2 billion for research awards and another $542 million for other awards, to be paid over multiple years. HHS allocated about $598 million for activities such as the dissemination and implementation of CER findings. PCORI and HHS also allocated about $470 million for program support. PCORI and HHS Allocations for Comparative Clinical Effectiveness Research (CER) Activities, Fiscal Years 2010 through 2019 aTotals may not add up due to rounding. bPCORI and HHS allocated $457 million and $13 million for program support, respectively. PCORI assessed the effectiveness of its activities using performance measures and targets. Since fiscal year 2017, when early CER projects were completed, PCORI officials reported that the institute met its performance targets, such as an increased number of research citations of its CER findings in news and online sources. HHS described accomplishments or assessed the effectiveness of its dissemination and implementation activities. PCORI and HHS officials told GAO they are planning comprehensive evaluations of their CER dissemination and implementation activities as part of their strategic plans for the next 10 years. The 2010 Patient Protection and Affordable Care Act (PPACA) authorized establishment of PCORI to conduct CER and improve its quality and relevance. PPACA also established new requirements for HHS to, among other things, disseminate findings from federally funded CER and coordinate federal programs to build data capacity for this research. To fund CER activities, PPACA established the Trust Fund, which provided a total of about $3.6 billion to PCORI and HHS for CER activities during fiscal years 2010 through 2019. The Further Consolidated Appropriations Act, 2020, added new CER requirements and extended funding at similar levels through fiscal year 2029. PPACA and the Appropriations Act 2020 included provisions that GAO review PCORI and HHS's CER activities. This report describes (1) the CER activities PCORI and HHS carried out to meet legislative requirements, (2) how PCORI and HHS allocated funding to those CER activities, and (3) PCORI and HHS efforts to evaluate the effectiveness of their CER dissemination and implementation activities, such as changes in medical practice. GAO reviewed legislative requirements and PCORI and HHS documentation and data for fiscal years 2010-2019. GAO also interviewed PCORI and HHS officials and obtained information from nine selected stakeholder groups that were familiar with PCORI's or HHS's CER activities. These groups included payer, provider, and patient organizations. GAO incorporated technical comments from PCORI and HHS as appropriate. For more information, contact John Dicken at (202) 512-7114 or dickenj@gao.gov.
    [Read More…]
  • Two Bizarre Brown Dwarfs Found With Citizen Scientists’ Help
    In Space
    Data from NASA’s [Read More…]
  • Vermont Man Charged with Hiring Person to Kidnap and Kill a Man in a Foreign Country, and Producing and Receiving Child Pornography
    In Crime News
    A federal grand jury in the District of Vermont returned a third superseding indictment today against a Burlington man for conspiring to kidnap and kill a man in a foreign country, murder for hire, and five child pornography offenses.
    [Read More…]
  • French West Indies Travel Advisory
    In Travel
    Reconsider travel [Read More…]
  • Request Denied for Preliminary Injunction on the Administration’s Landmark New Regulations Implementing under the National Environmental Policy Act
    In Crime News
    On Friday, Sept. 11, Judge James T. Jones of the U.S. District Court for the Western District of Virginia denied a request for a preliminary injunction against the Administration’s landmark new regulations implementing under the National Environmental Policy Act (NEPA), which will modernize environmental review, enhance the information-gathering process, and facilitate more meaningful public participation in the protection of our environment. These regulations had not been subject to a major revision since 1978, when they were first promulgated, and they were in need of modernization to improve the infrastructure permitting process.
    [Read More…]
  • Canadian Man Extradited from Spain to Face Charges for Massive Psychic Mail Fraud Scheme
    In Crime News
    A Canadian citizen accused of operating a decades-long psychic mail fraud scheme was extradited to the United States and made his initial appearance today in federal court in Central Islip, New York, the Department of Justice and the U.S. Postal Inspection Service announced.
    [Read More…]
  • State Department Terrorist Designation Reviews and Amendments
    In Crime Control and Security News
    Office of the [Read More…]
  • 2020 Census: Key Areas for Attention Raised by Compressed Timeframes
    In U.S GAO News
    In response to the COVID-19 pandemic and an August decision to end data collection about 30 days earlier than planned, the Census Bureau (Bureau) has made late design changes to the 2020 Census. The Bureau also announced it would accelerate its response processing operations, which improve the completeness and accuracy of census results. According to the Bureau, late design changes introduce risk to census quality and costs. The compressed time frames for field operations and data processing raise a number of issues that will require the Bureau's attention. It will be important for the Bureau to hire and retain a sufficient workforce, manage operational changes to the Nonresponse Follow-up operation, ensure census coverage at the local level, evaluate risks in streamlining response processing, and ensure timely and quality processing of census responses. As the 2020 Census continues, GAO will monitor the remainder of field operations and the Bureau's response processing operations.  Like the rest of the country, the Bureau has been required to respond to COVID-19. Resulting delays, compressed time frames, implementation of untested procedures, and continuing challenges could undermine the overall quality of the count and escalate census costs. GAO was asked to testify on its ongoing work on implementation of the 2020 Census. This testimony examines the cost and progress of key 2020 Census operations critical to a cost-effective enumeration. Over the past decade, GAO has made 112 recommendations specific to the 2020 Census. To date, the Bureau has implemented 92. As of September 2020, 19 of the recommendations had not been fully implemented. For more information, contact J. Christopher Mihm at (202)512-6806 or mihmj@gao.gov.
    [Read More…]
  • Secretary Pompeo’s Call with NATO Secretary General Stoltenberg 
    In Crime Control and Security News
    Office of the [Read More…]
  • Designation of a United States Special Coordinator for Tibetan Issues
    In Crime Control and Security News
    Michael R. Pompeo, [Read More…]
  • Attack on Kurdistan Democratic Party Baghdad Office
    In Crime Control and Security News
    Morgan Ortagus, [Read More…]
  • Nepal Travel Advisory
    In Travel
    Reconsider travel [Read More…]
  • Washington Man Charged With COVID-Relief Fraud
    In Crime News
    A Washington man was charged in a criminal complaint unsealed today for fraudulently seeking over $1.1 million in COVID-19 relief guaranteed by the Small Business Administration (SBA) through the Economic Injury Disaster Loan (EIDL) and the Paycheck Protection Program (PPP) under the Coronavirus Aid, Relief and Economic Security (CARES) Act.
    [Read More…]
  • Morocco Travel Advisory
    In Travel
    Reconsider travel to [Read More…]
  • Climate Change: A Climate Migration Pilot Program Could Enhance the Nation’s Resilience and Reduce Federal Fiscal Exposure
    In U.S GAO News
    GAO identified few communities in the United States that have considered climate migration as a resilience strategy, and two—Newtok, Alaska, and Isle de Jean Charles, Louisiana—that moved forward with relocation. Newtok, for example, faced imminent danger from shoreline erosion due to thawing permafrost and storm surge (see figure). Literature and experts suggest that many more communities will need to consider relocating in coming decades. Shoreline Erosion at Newtok, Alaska, from July 2007 to October 2019. Federal programs provide limited support to climate migration efforts because they are designed to address other priorities, according to literature GAO reviewed and interviews with stakeholders and federal officials. Federal programs generally are not designed to address the scale and complexity of community relocation and generally fund acquisition of properties at high risk of damage from disasters in response to a specific event such as a hurricane. Unclear federal leadership is the key challenge to climate migration as a resilience strategy. Because no federal agency has the authority to lead federal assistance for climate migration, support for climate migration efforts has been provided on an ad hoc basis. For example, it has taken over 30 years to begin relocating Newtok and more than 20 years for Isle de Jean Charles, in part because no federal entity has the authority to coordinate assistance, according to stakeholders in Alaska and Louisiana. These and other communities will rely on post-disaster assistance if no action is taken beforehand—this increases federal fiscal exposure. Risk management best practices and GAO's 2019 Disaster Resilience Framework suggest that federal agencies should manage such risks before a disaster hits. A well-designed climate migration pilot program that is based on project management best practices could improve federal institutional capability. For example, the interagency National Mitigation Investment Strategy—the national strategy to improve resilience to disasters—recommends that federal agencies use pilot programs to demonstrate the value of resilience projects. As GAO reported in October 2019, a strategic and iterative risk-informed approach for identifying and prioritizing climate resilience projects could help target federal resources to the nation's most significant climate risks. A climate migration pilot program could be a key part of this approach, enhancing the nation's climate resilience and reducing federal fiscal exposure. According to the 13-agency United States Global Change Research Program, relocation due to climate change will be unavoidable in some coastal areas in all but the very lowest sea level rise projections. One way to reduce the risks to these communities is to improve their climate resilience by planning and preparing for potential hazards related to climate change such as sea level rise. Climate migration—the preemptive movement of people and property away from areas experiencing severe impacts—is one way to improve climate resilience. GAO was asked to review federal support for climate migration. This report examines (1) the use of climate migration as a resilience strategy; (2) federal support for climate migration; and (3) key challenges to climate migration and how the federal government can address them. GAO conducted a literature review of over 52 sources and interviewed 12 climate resilience experts. In addition, GAO selected and interviewed 46 stakeholders in four communities that have considered relocation: Newtok, Alaska; Santa Rosa, California; Isle de Jean Charles, Louisiana; and Smith Island, Maryland. Congress should consider establishing a pilot program with clear federal leadership to identify and provide assistance to communities that express affirmative interest in relocation as a resilience strategy. The Departments of Homeland Security and Housing and Urban Development provided technical comments that GAO incorporated as appropriate. For more information, contact Alfredo Gómez at (202) 512-3841 or gomezj@gao.gov.
    [Read More…]
  • American Contractor Sentenced to Prison for Theft of Government Equipment on U.S. Military Base in Afghanistan
    In Crime News
    An American military contractor was sentenced today to more than three years in prison for his role in a theft ring on a military installation in Kandahar, Afghanistan.
    [Read More…]
  • The Republic of Kenya’s National Day
    In Crime Control and Security News
    Michael R. Pompeo, [Read More…]
  • DRL FY19 Countering Corruption Amid COVID-19
    In Human Health, Resources and Services
    Bureau of Democracy, [Read More…]
  • Chemical Assessments: Annual EPA Survey Inconsistent with Leading Practices in Program Management
    In U.S GAO News
    The Environmental Protection Agency's (EPA) Integrated Risk Information System (IRIS) Program has not produced timely chemical assessments, and most of its 15 ongoing assessments have experienced delays. As we reported in March 2019, the IRIS Program has taken some actions to make the assessment process more transparent, such as increasing communication with EPA offices and releasing supporting documentation for review earlier in the draft development process, but the need for greater transparency in some steps of the assessment process remains. Specifically, the IRIS Program does not publicly announce when assessment drafts move to certain steps in their development process or announce reasons for delays in producing specific assessments. Without such information, stakeholders who may be able to help fill data and analytical gaps are unable to contribute. This could leave EPA without potential support that could help overcome delays. Delays of Milestones by Quarter for a Selection of the Integrated Risk information System's Assessments in Development 2019 - 2024 In mid-2018, EPA's Office of Research and Development (ORD) instituted changes to the way it solicits nominations for chemical assessments prepared by the IRIS Program but did so without providing sufficient guidance or criteria, raising questions about its ability to meet EPA user needs. For example, ORD issued a new survey to EPA program and regional offices but did not provide them with guidance for selecting chemicals for nomination, and ORD did not make explicit the criteria it was using for selecting nominations to include in the IRIS Program's list of assessments in development. Furthermore, despite a significant decline in survey participation between 2018 and 2019, EPA did not indicate whether the agency has assessed the quality of information generated by the survey. Leading program management practices state that agency management should internally communicate the necessary, quality information to achieve the entity's objectives and should monitor and evaluate program activities. Without evaluating the quality of the information produced by the survey, ORD cannot know if the survey is achieving its intended purpose and whether ORD has the information necessary to meet user needs. EPA's IRIS Program prepares chemical toxicity assessments that contain EPA's scientific position on the potential human health effects of exposure to chemicals; at present, the IRIS database contains more than 570 chemical assessments. In March 2019, GAO reported on the IRIS Program's changes to increase transparency about its processes and methodologies, including the use of systematic review. However, GAO also found that EPA decreased the number of ongoing assessments in December 2018 from 22 to 13 and continued to face challenges in producing timely assessments. This report evaluates (1) EPA's progress in completing IRIS chemical assessments since 2018; and (2) EPA's recent actions to manage the IRIS Program, and the extent to which these actions help the Program meet EPA user needs. GAO reviewed and analyzed EPA documents and interviewed officials from EPA; GAO also selected three standards for program management, found commonalities among them, and compared ORD's management of the IRIS Program against these leading practices. GAO is making five recommendations, including that EPA provide more information publicly about where chemical assessments are in the development process; and issue guidance for selecting chemicals for nomination and criteria for selecting nominations for assessment. EPA partially agreed with two of our recommendations and disagreed with the other three. For more information, contact J. Alfredo Gómez at (202) 512-3841 or gomezj@gao.gov.
    [Read More…]
  • Sudan Travel Advisory
    In Travel
    Reconsider travel to [Read More…]
  • Hear Audio From NASA’s Perseverance As It Travels Through Deep Space
    In Space
    The first to be rigged [Read More…]
  • NASA Wins 4 Webbys, 4 People’s Voice Awards
    In Space
    Winners include the [Read More…]
  • Man Convicted of Multiple Obscenity Crimes Involving Children
    In Crime News
    A Texas man was convicted by a federal jury today for operating a website dedicated to publishing writings that detailed the sexual abuse of children.
    [Read More…]
  • Data Security: Recent K-12 Data Breaches Show That Students Are Vulnerable to Harm
    In U.S GAO News
    A cybersecurity incident is an event that actually or potentially jeopardizes a system or the information it holds. According to GAO's analysis of K-12 Cybersecurity Resource Center (CRC) data from July 2016 to May 2020, thousands of K-12 students were affected by 99 reported data breaches, one type of cybersecurity incident in which data are compromised. Students' academic records, including assessment scores and special education records, were the most commonly compromised type of information (58 breaches). Records containing students' personally identifiable information (PII), such as Social Security numbers, were the second most commonly compromised type of information (36 breaches). Financial and cybersecurity experts say some PII can be sold on the black market and can cause students significant financial harm. Breaches were either accidental or intentional, although sometimes the intent was unknown, with school staff, students, and cybercriminals among those responsible (see figure). Staff were responsible for most of the accidental breaches (21 of 25), and students were responsible for most of the intentional breaches (27 of 52), most frequently to change grades. Reports of breaches by cybercriminals were rare but included attempts to steal PII. Although the number of students affected by a breach was not always available, examples show that thousands of students have had their data compromised in a single breach. Responsible Actor and Intent of Reported K-12 Student Data Breaches, July 1, 2016-May 5, 2020 Notes: The actor or the intent may not be discernible in public reports. For this analysis, a cybercriminal is defined as an actor external to the school district who breaches a data system for malicious reasons. Of the 287 school districts affected by reported student data breaches, larger, wealthier, and suburban school districts were disproportionately represented, according to GAO's analysis. Cybersecurity experts GAO spoke with said one explanation for this is that some of these districts may use more technology in schools, which could create more opportunities for breaches to occur. When a student's personal information is disclosed, it can lead to physical, emotional, and financial harm. Organizations are vulnerable to data security risks, including over 17,000 public school districts and approximately 98,000 public schools. As schools and districts increasingly rely on complex information technology systems for teaching, learning, and operating, they are collecting more student data electronically that can put a student's information, including PII, at risk of disclosure. The closure of schools and the sudden transition to distance learning across the country due to the Coronavirus Disease 2019 (COVID-19) pandemic also heightened attention on K-12 cybersecurity. GAO was asked to review the security of K-12 students' data. This report examines (1) what is known about recently reported K-12 cybersecurity incidents that compromised student data, and (2) the characteristics of school districts that experienced these incidents. GAO analyzed data from July 1, 2016 to May 5, 2020 from CRC (the most complete source of information on K-12 data breaches). CRC is a non-federal resource sponsored by an educational technology organization that has tracked reported K-12 cybersecurity incidents since 2016. GAO also analyzed 2016-2019 Department of Education data on school district characteristics (the most recent available), and interviewed experts knowledgeable about cybersecurity. We incorporated technical comments from the agencies as appropriate. For more information, contact Jacqueline M. Nowicki at (617) 788-0580 or nowickij@gao.gov.
    [Read More…]
  • Secretary Pompeo’s Meeting with French President Macron
    In Crime Control and Security News
    Office of the [Read More…]
  • Statement by Attorney General William P. Barr on Mexico’s Proposed Legislation
    In Crime News
    Attorney General William P. Barr gave the following statement in response to Mexico's proposed legislation:
    [Read More…]
  • Health Care Company Indicted for Labor Market Collusion
    In Crime News
    A federal grand jury returned a two-count indictment charging Surgical Care Affiliates LLC and its related entity (collectively SCA), which own and operate outpatient medical care centers across the country, for agreeing with competitors not to solicit senior-level employees, the Department of Justice announced today. These are the Antitrust Division’s first charges in this ongoing investigation into employee allocation agreements.
    [Read More…]
  • Medical Device Maker Merit Medical To Pay $18 Million To Settle Allegations Of Improper Payments To Physicians
    In Crime News
    Medical device maker Merit Medical Systems Inc. (MMSI), of South Jordan, Utah, has agreed to pay $18 million to resolve allegations that the company caused the submission of false claims to the Medicare, Medicaid, and TRICARE programs by paying kickbacks to physicians and hospitals to induce the use of MMSI products, the Department of Justice announced today. 
    [Read More…]
  • Sudan’s State Sponsor of Terrorism Designation Rescinded
    In Crime Control and Security News
    Michael R. Pompeo, [Read More…]
  • Japan Travel Advisory
    In Travel
    Reconsider travel to [Read More…]
  • Designation of Iraqi Militia Leader in Connection with Serious Human Rights Abuse
    In Crime Control and Security News
    Michael R. Pompeo, [Read More…]
  • Financial Stability: Agencies Have Not Found Leveraged Lending to Significantly Threaten Stability but Remain Cautious Amid Pandemic
    In U.S GAO News
    In the years before the economic shock from the COVID-19 pandemic, the Financial Stability Oversight Council (FSOC) and others assessed the potential risks to financial stability that leveraged loans and collateralized loan obligation (CLO) securities may pose. Generally, leveraged loans are those made to businesses with poor credit and high debt, and CLO securities are backed by these loans. FSOC and others found that riskier borrower profiles and looser underwriting standards left leveraged lending market participants vulnerable to losses in the event of a downturn. After the COVID-19 shock in March 2020, loans suffered record downgrades and increased defaults, but the highest-rated CLO securities remained resilient. Although regulators monitoring the effects of the pandemic remain cautious, as of September 2020, they had not found that leveraged lending presented significant threats to financial stability. Based on regulators' assessments, leveraged lending activities had not contributed significantly to the distress of any large financial entity whose failure could threaten financial stability. Large banks' strong capital positions have allowed them to manage their leveraged lending exposures, and the exposure of insurers and other investors also appeared manageable. Mutual funds experienced redemptions by investors but were able to meet them in part by selling leveraged loan holdings. While this may have put downward pressure on already-distressed loan prices, based on regulators' assessments, distressed leveraged loan prices did not pose a potential threat to financial stability. Present-day CLO securities appear to pose less of a risk to financial stability than did similar securities during the 2007–2009 financial crisis, according to regulators and market participants. For example, CLO securities have better investor protections, are more insulated from market swings, and are not widely tied to other risky, complex instruments. FSOC monitors leveraged-lending-related risks primarily through its monthly Systemic Risk Committee meetings, but opportunities exist to enhance FSOC's abilities to respond to financial stability threats. FSOC identified leveraged lending activities as a source of potential risk to financial stability before the COVID-19 shock and recommended continued monitoring and analysis. However, FSOC does not conduct tabletop or similar scenario-based exercises where participants discuss roles and responses to hypothetical emergency scenarios. As a result, FSOC is missing an opportunity to enhance preparedness and test members' coordinated response to financial stability risks. Further, as GAO reported in 2016, FSOC does not generally have clear authority to address broader risks that are not specific to a particular financial entity, such as risks from leveraged lending. GAO recommended that Congress consider better aligning FSOC's authorities with its mission to respond to systemic risks, but Congress had not done so as of September 2020. GAO maintains that changes such as broader designation authority would help FSOC respond to risks from activities that involve many regulators, such as leveraged lending. The market for institutional leveraged loans grew from an estimated $0.5 trillion in 2010 to $1.2 trillion in 2019, fueled largely by investor demand for CLO securities. Some observers and regulators have drawn comparisons to the pre-2008 subprime mortgage market, noting that loan origination and securitization may similarly spread risks to the financial system. These fears are being tested by the COVID-19 pandemic, which has significantly affected leveraged businesses. This report examines assessments by regulators, FSOC, and others—both before and after the COVID-19 shock to the economy—of the potential risks to financial stability stemming from leveraged lending activities, and the extent to which FSOC monitors and responds to risks from broad-based activities like leveraged lending, among other objectives. GAO examined agency and private data on market size and investor exposures; reviewed agency, industry, and international reports; and interviewed federal financial regulators and industry participants. GAO recommends that the Secretary of the Treasury, as Chairperson of FSOC, conduct scenario-based exercises intended to evaluate capabilities for responding to crises. GAO also reiterates its 2016 recommendation (GAO-16-175) that Congress consider legislative changes to align FSOC's authorities with its mission. FSOC neither agreed nor disagreed with the recommendation, but said that it would take further actions if it determined necessary. For more information, contact Michael E. Clements at (202) 512-8678 or ClementsM@gao.gov.
    [Read More…]
  • Justice Department Settles with the Commissioner of the Revenue for Caroline County, Virginia to Resolve Disability Discrimination Complaint
    In Crime News
    The Justice Department today announced that it reached an agreement with the Commissioner of the Revenue for Caroline County, Virginia, in his official capacity (the “Commissioner”) to resolve the department’s lawsuit alleging disability discrimination in violation of Title I of the Americans with Disabilities Act (ADA).
    [Read More…]
  • Suburban Chicago Businessman Charged with Illegally Exporting Arms to Ukraine
    In Crime News
    A suburban Chicago businessman has been indicted on federal criminal charges for allegedly illegally exporting gun parts and other defense articles from the United States to a company in Ukraine.
    [Read More…]
  • Our Deepest Condolences on the Passing of His Highness Sheikh Sabah Al Ahmad Al Sabah
    In Crime Control and Security News
    Michael R. Pompeo, [Read More…]
  • Assistant Attorney General Makan Delrahim Delivers Opening Remarks at the 2020 Life Sciences Workshop
    In Crime News
    “Light My Fire”: [Read More…]
  • Opening Remarks by Secretary of State Michael R. Pompeo Before the Senate Caucus on International Narcotics Control
    In Crime Control and Security News
    Michael R. Pompeo, [Read More…]
  • Ready-Mix Concrete Company Admits to Fixing Prices and Rigging Bids in Violation of Antitrust Laws
    In Crime News
    Argos USA LLC, a producer and seller of ready-mix concrete headquartered in Alpharetta, Georgia, was charged with participating in a conspiracy to fix prices, rig bids, and allocate markets for sales of ready-mix concrete in the Southern District of Georgia and elsewhere, the Department of Justice announced today.  
    [Read More…]
  • Boeing Charged with 737 Max Fraud Conspiracy and Agrees to Pay over $2.5 Billion
    In Crime News
    The Boeing Company (Boeing) has entered into an agreement with the Department of Justice to resolve a criminal charge related to a conspiracy to defraud the Federal Aviation Administration’s Aircraft Evaluation Group (FAA AEG) in connection with the FAA AEG’s evaluation of Boeing’s 737 MAX airplane.
    [Read More…]
  • Michigan Man Pleads Guilty to Using Threats to Obstruct Free Exercise of Religious Beliefs
    In Crime News
    The Justice Department today announced that Ronald Wyatt, 22, pleaded guilty today in U.S. District Court for the Eastern District of Michigan to intentionally threatening physical harm to a female victim, T.P., to obstruct T.P.’s free exercise of religion. As part of his plea agreement, Wyatt admitted that he targeted T.P., who is African-American, because of her race. 
    [Read More…]
  • Anniversary of Protests in Iran
    In Crime Control and Security News
    Michael R. Pompeo, [Read More…]
  • The United States of America and The Republic of Korea on Working Together to Promote Cooperation between the Indo-Pacific Strategy and the New Southern Policy
    In Crime Control and Security News
    Office of the [Read More…]
  • Senior State Department Officials Briefing to Traveling Press
    In Crime Control and Security News
    Istanbul, Turkey [Read More…]
  • Assistant Attorney General Beth A. Williams Delivers Remarks to the National Association of Attorneys General on Responsible Encryption and Lawful Access
    In Crime News
    Good afternoon, everyone.  First, I would like to thank Amie Ely and the wonderful team at NAAG for all of their amazing work, and for hosting this event on such an important topic.  Thank you as well to everyone in the audience for taking the time to join virtually for what should be a truly interesting conversation.  Perhaps it’s fitting that we are having a discussion — via webcam — that highlights the importance of digital evidence.
    [Read More…]
  • On Intra Afghan Negotiations and the Road to Peace
    In Crime News
    Morgan Ortagus, [Read More…]
  • Two Individuals And Two Companies Sentenced In Scheme To Fraudulently Sell Popular Dietary Supplements
    In Crime News
    A federal court in Texas sentenced two former dietary supplement company executives to prison and ordered two companies to pay a combined $10.7 million in criminal forfeiture for their roles in fraudulently selling popular workout supplements, the Justice Department announced today.
    [Read More…]
  • Chemical Security: Overlapping Programs Could Better Collaborate to Share Information and Identify Potential Security Gaps
    In U.S GAO News
    Eight federal programs addressing chemical safety or security from four departments or agencies that GAO reviewed contain requirements or guidance that generally align with at least half of the Department of Homeland Security's (DHS) 18 Chemical Facility Anti-Terrorism Standards (CFATS) program standards. At least 550 of 3,300 (16 percent) facilities subject to the CFATS program are also subject to other federal programs. Analyses of CFATS and these eight programs indicate that some overlap, duplication, and fragmentation exists, depending on the program or programs to which a facility is subject. For example, six federal programs' requirements or guidance indicate some duplication with CFATS. CFATS program officials acknowledge similarities among these programs' requirements or guidance, some of which are duplicative, and said that the CFATS program allows facilities to meet CFATS program standards by providing information they prepared for other programs. more than 1,600 public water systems or wastewater treatment facilities are excluded under the CFATS statute, leading to fragmentation. While such facilities are subject to other programs, those programs collectively do not contain requirements or guidance that align with four CFATS standards. According to DHS, public water systems and wastewater treatment facilities are frequently subject to safety regulations that may have some security value, but in most cases, these facilities are not required to implement security measures commensurate to their level of security risk, which may lead to potential security gaps. The departments and agencies responsible for all nine of these chemical safety and security programs—four of which are managed by DHS, three by the Environmental Protection Agency (EPA), and one each managed by the Bureau of Alcohol, Tobacco, Firearms and Explosives (ATF) and the Department of Transportation (DOT)—have previously worked together to enhance information collection and sharing in response to Executive Order 13650, issued in 2013. This Executive Order directed these programs to take actions related to improving federal agency coordination and information sharing. However, these programs have not identified which facilities are subject to multiple programs, such that facilities may be unnecessarily developing duplicative information to comply with multiple programs. Although CFATS allows facilities to use information they prepared for other programs, CFATS program guidance does not specify what information facilities can reuse. Finally, DHS and EPA leaders acknowledged that there are differences between CFATS requirements and the security requirements for public water systems and wastewater treatment facilities, but they have not assessed the extent to which potential security gaps may exist. By leveraging collaboration established through the existing Executive Order working group, the CFATS program and chemical safety and security partners would be better positioned to minimize unnecessary duplication between CFATS and other programs and better ensure the security of facilities currently subject to fragmented requirements. Facilities with hazardous chemicals could be targeted by terrorists to inflict mass casualties or damage. Federal regulations applicable to chemical safety and security have evolved over time as authorizing statutes and regulations established programs for different purposes, such as safety versus security, and with different enforcement authorities. GAO has reported that such programs may be able to achieve greater efficiency where overlap exists by reducing duplication and better managing fragmentation. GAO was asked to review issues related to the effects that overlap, duplication, and fragmentation among the multiple federal programs may have on the security of the chemical sector. This report addresses the extent to which (1) such issues may exist between CFATS and other federal programs, and (2) the CFATS program collaborates with other federal programs. GAO analyzed the most recent available data on facilities subject to nine programs from DHS, EPA, ATF, and DOT; reviewed and analyzed statutes, regulations, and program guidance; and interviewed agency officials. GAO is making seven recommendations, including that DHS, EPA, ATF, and DOT identify facilities subject to multiple programs; DHS clarify guidance; and DHS and EPA assess security gaps. Agencies generally agreed with six; EPA did not agree with the recommendation on gaps. GAO continues to believe it is valid, as discussed in the report. For more information, contact Nathan Anderson at (206) 287-4804 or AndersonN@gao.gov.
    [Read More…]
  • Sint Maarten Travel Advisory
    In Travel
    Reconsider travel to [Read More…]
  • Special Representative for Afghanistan Reconciliation Zalmay Khalilzad Travel to Afghanistan, Bulgaria, Norway, Pakistan, and Qatar
    In Crime Control and Security News
    Office of the [Read More…]
  • Columbia Class Submarine: Delivery Hinges on Timely and Quality Materials from an Atrophied Supplier Base
    In U.S GAO News
    The Navy's schedule for constructing the first submarine of the new Columbia class is threatened by continuing challenges with the computer-aided software tool that Electric Boat, the lead shipbuilder, is using to design the submarine. These challenges will likely impede construction because the shipbuilder is late in completing design products used for building the submarine. To ensure construction begins on schedule, the Navy modified its design contract with Electric Boat to include an option for constructing the first two submarines and requested sufficient authority from Congress for fiscal year 2021 to exercise it. Navy officials stated, however, that the Navy's budget request is lower than its current cost estimate, and it is not informed by an independent cost assessment. As a result, the program will likely need more funding to reflect the increased estimate. Quality problems with supplier materials caused delays during early construction. These quality problems included missile tubes (depicted below) with defective welds. As the shipbuilders expand outsourcing to suppliers, quality assurance oversight at supplier facilities will be critical for avoiding further delays. Quad Pack of Four Submarine Missile Tubes However, the Navy has not comprehensively reassessed when to seek additional inspections at supplier facilities that could better position it to identify quality problems early enough to limit delays. The Navy plans to invest about $128 billion in 12 Columbia class nuclear-powered ballistic missile submarines. The shipbuilders will construct the Columbia class at the same time as the Virginia class attack submarines. They plan to rely on materials produced by a supplier base that is roughly 70 percent smaller than in previous shipbuilding booms. Congress included a provision in statute for GAO to examine the program's status. This report assesses the Navy's efforts to complete the design for the lead Columbia class submarine and actions the shipbuilders and the Navy have taken to prepare for construction and ensure the lead submarine is delivered according to schedule and quality expectations. GAO assessed Navy and shipbuilder design progress against cost and schedule estimates, reviewed documents, and interviewed officials about supplier readiness and quality assurance. This is a public version of a sensitive report that GAO issued in November 2020. Information that the Department of Defense (DOD) deemed sensitive has been omitted. GAO recommends that the Navy (1) provide Congress with updated cost information, (2) include information on supplier readiness in its annual report to Congress, and (3) reassess when to seek additional inspections at supplier facilities. DOD concurred with the recommendations but disagreed with some of the report's details. GAO incorporated DOD's comments as appropriate and maintains the validity of the findings, as discussed in the report. For more information, contact Shelby S. Oakley at (202) 512-4841 or oakleys@gao.gov.
    [Read More…]
  • The United States Imposes Sanctions on Chinese and Hong Kong Persons for Activities Related to Supporting the Islamic Republic of Iran Shipping Lines
    In Crime Control and Security News
    Michael R. Pompeo, [Read More…]
  • American Contractor Pleads Guilty to Conspiracy to Steal Government Equipment from U.S. Military Base in Afghanistan
    In Crime News
    An American military contractor pleaded guilty today to her role in a theft ring on a military installation in Kandahar, Afghanistan.
    [Read More…]