Friday, 18 October 2019

Reducing Costs in the Fast-Changing Regulations of Foreign Direct Investment

I think this is a fascinating idea.  Latham & Watkins has released a free app that covers the regulations of several countries concerning foreign direct investment.  Here is the press release

Latham & Watkins LLP1 is pleased to announce the launch of the Foreign Direct Investment Regimes (FDI) app, an interactive tool designed to summarize key aspects of the Committee on Foreign Investment in the United States (CFIUS) and other foreign direct investment regimes around the world. The FDI app is available as a free download in the Apple App Store and Google Play that can be used on iPhone, iPad, and Android devices.

The Latham FDI app is organized by select countries around the world, including the US, Australia, China, France, Germany, Italy, Spain, Russia, Saudi Arabia, Singapore, United Arab Emirates, and the UK. After choosing a country, users can click through to read summaries of information pertinent to the respective jurisdiction, such as:

  • Legal authority responsible for foreign investment review
  • Mandatory filings
  • Voluntary filings
  • Timelines
  • Filing fees
  • Penalties
  • Definitions of key words and phrases

“Businesses looking at cross-border investments must consider and be prepared for national security reviews by the jurisdictions in which the business has or would have operations,” said Les Carnegie, a partner in Latham & Watkins’ Washington, D.C., office and co-leader of the firm’s CFIUS & US National Security Practice. “We are excited to launch this first-of-its-kind app that will bring enormous value to foreign investors around the world by summarizing information and procedures that have become increasingly fundamental to successfully executing cross-border transactions.”

Steven Croley, a partner in Latham & Watkins’ Washington, D.C., office and co-leader of the firm’s CFIUS & US National Security Practice, added, “Latham aims above all to provide exceptional service to our clients. We are therefore constantly looking for creative and innovative ways to address their most pressing business needs. Clients are increasingly focused on the growing prominence of regulatory programs and foreign investment review both in and outside the US, and our goal in developing the FDI app is to provide a summary that is quickly and easily accessible.”

“Evaluating and preparing for reviews by CFIUS and other foreign direct investment regimes has become a critical component to cross-border deal-making in today’s geopolitical environment,” said Luke Bergstrom, Global Vice Chair of Latham’s Mergers & Acquisitions Practice. “Latham’s CFIUS and national security lawyers are deeply experienced in helping clients navigate the CFIUS process and related agency reviews. This offering is part of the firm’s global, integrated approach to helping clients achieve market-leading transactional results.”

The Latham FDI app is the latest addition to a suite of information produced by the firm on the topic of CFIUS and other foreign direct investment regimes.

A summary and analysis of the US Department of Treasury’s recently-proposed regulations to implement changes that the Foreign Investment Risk Review Modernization Act (FIRRMA) made to CFIUS’ jurisdiction and processes is available here. A comprehensive primer, “Key Questions Answered on CFIUS,” is also available here.

For additional resources and more information about Latham’s CFIUS & US National Security Practice, please visit

Improving the Allocation of Resources: Artificial Intelligence to Predict Future Clinical Success of Basic Research

In a new paper published on October 10, 2019 titled, “Predicting Translational Progress in Biomedical Research,” authors B. Ian Hutchins, Matthew T. Davis, Rebecca A. Meseroll, and George M. Santangelo describe a new way to use artificial intelligence to measure and predict which basic research type findings are likely to be translated into clinical advances.  The abstract states: 

Fundamental scientific advances can take decades to translate into improvements in human health. Shortening this interval would increase the rate at which scientific discoveries lead to successful treatment of human disease. One way to accomplish this would be to identify which advances in knowledge are most likely to translate into clinical research. Toward that end, we built a machine learning system that detects whether a paper is likely to be cited by a future clinical trial or guideline. Despite the noisiness of citation dynamics, as little as 2 years of postpublication data yield accurate predictions about a paper’s eventual citation by a clinical article (accuracy = 84%, F1 score = 0.56; compared to 19% accuracy by chance). We found that distinct knowledge flow trajectories are linked to papers that either succeed or fail to influence clinical research. Translational progress in biomedicine can therefore be assessed and predicted in real time based on information conveyed by the scientific community’s early reaction to a paper.

The full paper is available, here.  This appears to have the promise of mitigating some significant investment risk.  

OxFirst Conference: Globalization and FRAND

OxFirst is hosting a very interesting conference on FRAND and globalization on October 18, 2019 at the University of Oxford.  The press release states: 

The decisions of national courts on fair, reasonable, and non-discriminatory (FRAND) licensing rates have the potential to impact the licensing and litigation of standard essential patents (SEPs) internationally, according to speakers at OxFirst’s 4th intellectual property (IP) and competition forum.

“The global FRAND licensing framework is meant to strike a balance between the rights of the Standard Essential Patents (SEPs) holders and the needs of downstream innovators,” says Dr Roya Ghafele, founder and CEO of OxFirst.

“Decisions made at the national level, by national courts, bear the potential to affect licensing negotiations in other jurisdictions. It is therefore important that such decisions take into account the increasingly global nature of commerce,” Ghafele adds.

SEPs have become central to patent wars in information and communications technology because the use of these patents is essential for compliance with technical standards. Standards such as 3G, 4G, GSM or UMTS have been instrumental for the establishment of wireless communication. The advent of 5G bears the potential to be a crucial element for the internet of things. (IoT) As such, there is a lot at stake.

OxFirst’s conference, titled “Globalisation and FRAND: Coming to grips with the interplay of IP and competition law”, addresses issues facing the various players in these patent wars.

The conference, held Oct 18 at St Cross College, at the University of Oxford, is attended by academics, government officials, and IP experts in the commercial world.

Among the speakers at the conference are Hon Judge Fabian Hoffman, a judge of the Bundesgerichtshof (Federal Court of Justice of Germany); Prof Eric Sergheraert, from the University of Lille; Prof Valerio Sterzi, from the University of Bordeaux; and Prof Thomas Cotter, from the University of Minnesota.

OxFirst is scheduled to host its next IP and competition symposium in Brussels in February 2020. OxFirst Conferences are fully accredited for continuous legal professional education for the legal profession.

About the conference:

Wednesday, 16 October 2019

Patent Eligible Subject Matter Reform in the United States: The Pendulum Will Swing Too Far (again)?

In the United States, the law of patent eligible subject matter has become a big mess.  There are many different ways to frame how we got to this point.  One narrative tracks the concern with so-called patent trolls and the issuance of poor patents by the USPTO.  For sure, many have had concerns about the enforcement of patents and there have been a number of issued poor quality patents by the USPTO.  Part of the problem with the reform effort may have been that there were just too many proposals adopted to confront the issues.  In a perfect world, I suppose that a proposal would be enacted and then we would gather data and try to assess its impact.  We essentially made many policy changes creating perhaps an even larger mess with different problems--perhaps to the detriment of innovation.  Indeed, perhaps the changes to patent eligible subject matter law by Alice and Mayo may have gone too far—in light of other changes to the U.S. patent system designed to curb troubling enforcement and poor patent quality.  

One of the main current problems seems to be the application of the Alice/Mayo test and the failure to achieve consistency in its application.  Unfortunately, one casualty of Alice/Mayo may be collegiality amongst U.S. Court of Appeals for the Federal Circuit judges and the institution itself—the recent opinion, American Axle & Manufacturing v. Neapco Holdings, issued on October 3, 2019 is an interesting example.  Basically, Judge Moore writing the dissent is accusing Judge Dyk, author of the majority opinion, for engaging in judicial activism among other things.  I believe that most think that judges should “call it as they see it.”  However, the problem may be the test itself—it’s just too difficult to apply with consistency and that a reasonable application could result in problems, particularly if there is an underdeveloped record.  For sure, the attempt to utilize patent eligible subject matter as a way to eliminate cases early has been eroded by some panels of the Federal Circuit.  Does this mean that the main value of the test has been lost?  Should we stick to obviousness as the gatekeeper of patentability?  Can Congress actually fix this without overshooting eligibility resulting in more and different problems?  What about the concern with drug pricing?  Is the current test for patent eligible subject matter unfixable?  Do we need to think harder about different patent eligible subject matter rules for different industries?  Does it look like the Federal Circuit is properly using doctrines as policy levers across different industries?  I do think we would likely agree that keeping the Federal Circuit is a good idea (there are some that disagree).  

Friday, 11 October 2019

A Greater Appreciation for the Contribution and Value of Some Intangibles (particularly "free" intangibles)?

In a recent speech titled, “Trucks and Terabytes: Integrating the 'Old' and 'New' Economies,” at the 61st Annual Meeting of the National Association for Business Economics, Federal Reserve Chairman Jerome H. Powell challenged the underlying data concerning measurements of economic growth.  He asks: “with terabytes of data increasingly competing with truckloads of goods in economic importance, what are the best ways to measure output and productivity? Put more provocatively, might the recent productivity slowdown be an artifact of antiquated measurement?”  In considering the question, here are his comments: 

How Should We Measure Output and Productivity?
Let's now turn to the second question of how to best measure output and productivity. While there are some subtleties in measuring oil output, we know how to count barrels of oil. Measuring the overall level of goods and services produced in the economy is fundamentally messier, because it requires adding apples and oranges—and automobiles and myriad other goods and services. The hard-working statisticians creating the official statistics regularly adapt the data sources and methods so that, insofar as possible, the measured data provide accurate indicators of the state of the economy. Periods of rapid change present particular challenges, and it can take time for the measurement system to adapt to fully and accurately reflect the changes in the economy.

The advance of technology has long presented measurement challenges. In 1987, Nobel Prize–winning economist Robert Solow quipped that "you can see the computer age everywhere but in the productivity statistics."6 In the second half of the 1990s, this measurement puzzle was at the heart of monetary policymaking.7 Chairman Alan Greenspan famously argued that the United States was experiencing the dawn of a new economy, and that potential and actual output were likely understated in official statistics. Where others saw capacity constraints and incipient inflation, Greenspan saw a productivity boom that would leave room for very low unemployment without inflation pressures. In light of the uncertainty it faced, the Federal Open Market Committee (FOMC) judged that the appropriate risk‑management approach called for refraining from interest rate increases unless and until there were clearer signs of rising inflation. Under this policy, unemployment fell near record lows without rising inflation, and later revisions to GDP measurement showed appreciably faster productivity growth.8

This episode illustrates a key challenge to making data-dependent policy in real time: Good decisions require good data, but the data in hand are seldom as good as we would like. Sound decisionmaking therefore requires the application of good judgment and a healthy dose of risk management.

Productivity is again presenting a puzzle. Official statistics currently show productivity growth slowing significantly in recent years, with the growth in output per hour worked falling from more than 3 percent a year from 1995 to 2003 to less than half that pace since then.9 Analysts are actively debating three alternative explanations for this apparent slowdown: First, the slowdown may be real and may persist indefinitely as productivity growth returns to more‑normal levels after a brief golden age.10 Second, the slowdown may instead be a pause of the sort that often accompanies fundamental technological change, so that productivity gains from recent technology advances will appear over time as society adjusts.11 Third, the slowdown may be overstated, perhaps greatly, because of measurement issues akin to those at work in the 1990s.12 At this point, we cannot know which of these views may gain widespread acceptance, and monetary policy will play no significant role in how this puzzle is resolved. As in the late 1990s, however, we are carefully assessing the implications of possibly mismeasured productivity gains. Moreover, productivity growth seems to have moved up over the past year after a long period at very low levels; we do not know whether that welcome trend will be sustained.

Recent research suggests that current official statistics may understate productivity growth by missing a significant part of the growing value we derive from fast internet connections and smartphones. These technologies, which were just emerging 15 years ago, are now ubiquitous (figure 3). We can now be constantly connected to the accumulated knowledge of humankind and receive near instantaneous updates on the lives of friends far and wide. And, adding to the measurement challenge, many of these services are free, which is to say, not explicitly priced. How should we value the luxury of never needing to ask for directions? Or the peace and tranquility afforded by speedy resolution of those contentious arguments over the trivia of the moment?

Researchers have tried to answer these questions in various ways.13 For example, Fed researchers have recently proposed a novel approach to measuring the value of services consumers derive from cellphones and other devices based on the volume of data flowing over those connections.14 Taking their accounting at face value, GDP growth would have been about 1/2 percentage point higher since 2007, which is an appreciable change and would be very good news. Growth over the previous couple of decades would also have been about 1/4 percentage point higher as well, implying that measurement issues of this sort likely account for only part of the productivity slowdown in current statistics. Research in this area is at an early stage, but this example illustrates the depth of analysis supporting our data-dependent decisionmaking.

The full speech is available, here.  The paper concerning measuring value using volume of data, titled, "Accounting for Innovations in Consumer Digital Services: IT Still Matters," is available, here.  

OxFirst Webinar featuring Professor Peter George Picht: "Injunctions in SEP/Frand Cases"

Our friends at OxFirst have another interesting free webinar titled, “Injunctions in SEP/Frand Cases,” scheduled for October 24, 2019, starting at 16:00 BST (14:00 CET).  The speaker is Professor Peter George Picht.  Here is his bio: 

Prof Peter Georg Picht studied law at Munich University and Yale Law School, did his PhD (summa cum laude) at Munich University/the Max Planck Institute for Innovation and Competition, and holds a masters degree from Yale Law School.

He has been working, i.a., with the EU Commission’s DG for Competition, as a Senior Research Fellow with the Max Planck Institute for Innovation and Competition, as well as with two international law firms.

Prof. Picht now holds a chair for Economic Law at the University of Zurich and is head of the University’s Center for Intellectual Property and Competition Law (CIPCO). He remains affiliated to the Max Planck Institute as a Research Fellow and is an Of Counsel with the law firm Schellenberg Wittmer. His further affiliations include board memberships in the Academic Society for Competition Law (ASCOLA), the Association Europ√©enne du Droit √ąconomique (AIDE), and the Munich IP Dispute Resolution Forum. In 2019, he will be a Visiting Professor at King’s College, London.

Prof. Picht’s academic teaching and writing, as well as his counseling activity, focus on

· intellectual property law

· competition law

· international private and procedural law, in particular commercial arbitration (mainly IP and Competition), trusts and estates.

In these fields, he advises governments, companies, foundations, trusts, as well as private persons and families. Prof. Picht is admitted to the bar in Germany and Switzerland (Art. 28 BGFA).

For further information, see:

Here is a link to register:, and here are the details concerning registration: 

Attention, please sign up with your professional email account. We don’t accept registrations from personal email addresses. Participation is limited at 100 participants. We reserve the right to eliminate participants.

Saturday, 28 September 2019

US Treasury Department CFIUS Proposed Regulations Released

The U.S. Treasury Department has recently issued new regulations for review concerning the Committee on Foreign Investment in the United States (CFIUS).  CFIUS reviews transactions implicating national security concerns.  The Fact Sheet concerning the new proposed regulations from the U.S. Treasury Department states: 

FIRRMA Provisions on Non-Controlling Investments

FIRRMA expands CFIUS’s jurisdiction beyond transactions that could result in foreign control of a U.S. business to also include a non-controlling investment, direct or indirect, by a foreign person that affords the foreign person: 

access to any material nonpublic technical information in the possession of the U.S. business;  membership or observer rights on the board of directors or equivalent governing body of the U.S. business or the right to nominate an individual to a position on the board of directors or equivalent governing body; or any involvement, other than through voting of shares, in substantive decisionmaking of the U.S. business regarding— the use, development, acquisition, safekeeping, or release of sensitive personal data of U.S. citizens maintained or collected by the U.S. business; the use, development, acquisition, or release of critical technologies; or the management, operation, manufacture, or supply of critical infrastructure.  

This new authority only applies to a non-controlling investment in a U.S. business that:  produces, designs, tests, manufactures, fabricates, or develops one or more critical technologies;   owns, operates, manufactures, supplies, or services critical infrastructure; or maintains or collects sensitive personal data of U.S. citizens that may be exploited in a manner that threatens national security.

FIRRMA also requires that CFIUS prescribe regulations that further define the term “foreign person” in the context of non-controlling investments by specifying criteria to limit its applicability over certain categories of foreign persons.

Key Aspects of the Proposed Regulations Regarding “Covered Investments”

Types of investments covered:  Non-controlling investments that afford a foreign person certain access, rights, or involvement in certain U.S. businesses (referred to as “covered investments”).

Largely a voluntary process:  Process remains largely voluntary, where parties may file a notice or submit a short-form declaration notifying CFIUS of a covered investment in order to receive a potential “safe harbor” letter (after which CFIUS does not initiate a review of a transaction except in certain limited circumstances).  In some circumstances, filing a declaration for a transaction is mandatory.  In particular, FIRRMA creates a mandatory declaration requirement for specified covered transactions where a foreign government has a “substantial interest”.  Additionally, FIRRMA authorizes CFIUS to mandate declarations for covered transactions involving certain U.S. businesses that produce, design, test, manufacture, fabricate, or develop one or more critical technologies.  

U.S. businesses covered:  The new provisions on covered investments only apply to investments in U.S. businesses involved in specified ways with critical technologies, critical infrastructure, or sensitive personal data—referred to as “TID U.S. businesses” for technology, infrastructure, and data.  

 Critical technologies:  CFIUS may review transactions related to U.S. businesses that design, test, manufacture, fabricate, or develop one or more critical technologies.  “Critical technologies” is defined to include certain items subject to export controls and other existing regulatory schemes, as well as emerging and foundational technologies controlled pursuant to the Export Control Reform Act of 2018.  

 Critical infrastructure:  CFIUS may review transactions related to U.S. businesses that perform specified functions—owning, operating, manufacturing, supplying, or servicing—with respect to critical infrastructure across subsectors such as telecommunications, utilities, energy, and transportation, each as identified in an appendix to the proposed regulations.  

 Sensitive personal data:  CFIUS may review transactions related to U.S. businesses that maintain or collect sensitive personal data of U.S. citizens that may be exploited in a manner that threatens national security. “Sensitive personal data” is defined to include ten categories of data maintained or collected by U.S. businesses that (i) target or tailor products or services to sensitive populations, including U.S. military members and employees of federal agencies involved in national security, (ii) collect or maintain such data on at least one million individuals, or (iii) have a demonstrated business objective to maintain or collect such data on greater than one million individuals and such data is an integrated part of the U.S. business’s primary products or services.  The categories of data include types of financial, geolocation, and health data, among others.  Genetic information is also included in the definition regardless of whether it meets (i), (ii), or (iii).  

 Foreign person and excepted investor:  The regulations create an exception from “covered investments” for certain foreign persons defined as “excepted investors” based on their ties to certain countries identified as “excepted foreign states,” and their compliance with certain laws, orders, and regulations.  The regulations do not except these persons from control transactions previously subject to CFIUS jurisdiction; investments from all foreign persons remain subject to CFIUS’s jurisdiction over transactions that could result in foreign control of a U.S. business.

FIRRMA Provisions on Real Estate Transactions

In FIRRMA, Congress authorized CFIUS to review “the purchase or lease by, or a concession to, a foreign person of private or public real estate that”

“is, is located within, or will function as part of, an air or maritime port…” 

“is in close proximity to a United States military installation or another facility or property of the United States Government that is sensitive for reasons relating to national security;”

 “could reasonably provide the foreign person the ability to collect intelligence on activities being conducted at such an installation, facility, or property; or”

 “could otherwise expose national security activities at such an installation, facility, or property to the risk of foreign surveillance.”

 Pursuant to FIRRMA, this authority does not extend to “a single ‘housing unit.’”  This authority also does not apply to “real estate in ‘urbanized areas’ . . . except as otherwise prescribed by [CFIUS] in regulations in consultation with the Secretary of Defense.” (emphasis added)

 FIRRMA directs CFIUS to “prescribe regulations to ensure that the term “close proximity” refers only to a distance or distances within which the purchase, lease, or concession of real estate could pose a national security risk.”

 FIRRMA also requires that CFIUS prescribe regulations that further define the term “foreign person” for real estate transactions by specifying criteria to limit its applicability over certain categories of foreign persons.

The full text of the regulations is available, here