Category: Uncategorized

The United States Patent and Trademark Office Remains Operational and Flexible During the COVID-19 Pandemic

In view of the COVID-19 pandemic, the United States Patent and Trademark Office (USPTO) recently announced that its offices will be closed to the public “until further notice.”[1] However, the USPTO also assured the public that USPTO “operations will continue without interruption.”[2] Accordingly, applicants can continue to file related documents with the USPTO (e.g., patent applications, trademark applications, and responses to USPTO communications). Applicants can also hold interviews and oral hearings with the USPTO by video or telephone.[3]

Additionally, the USPTO has provided numerous accommodations for applicants that have been affected by the COVID-19 pandemic. As explained in more detail below, such accommodations for affected applicants include:

(I) a 30-day extension of certain patent-related and trademark-related filing deadlines that fall between March 27 and April 30;

(II) waiver of revival fees for (a) abandoned patent applications, (b) terminated or limited re-examination proceedings, (c) abandoned trademark applications, and (d) cancelled/expired trademark registrations; and

(III) waiver of original handwritten signature requirements for (a) registration to practice before the USPTO in patent cases, (b) enrollment and disciplinary investigations, (c) disciplinary proceedings, and (d) non-electronic payments by credit card.[4]

I.  USPTO extends certain filing deadlines for those affected by COVID-19

The USPTO has exercised temporary authority provided by the Coronavirus Aid, Relief, and Economic Security Act (CARES Act) to provide a 30-day extension of various patent-related and trademark-related deadlines that fall between March 27 and April 30 for applicants affected by the COVID-19 pandemic.[5] Table 1 summarizes the patent-related and trademark-related deadlines that can be extended under USPTO’s temporary authority.

Extendible patent-related deadlines Extendible trademark-related deadlines
Reply to a USPTO notice issued during pre-examination proceedings by a small or micro entity[6] Response to an Office action, including a notice of appeal from a final refusal
Reply to a USPTO notice or action issued during examination[7] Statement of use or request for extension of time to file a statement of use
Reply to a USPTO notice or action issued during patent publication processing[8] Notice of opposition or request for extension of time to file a notice of opposition
Issue fee payment Priority filing basis
Numerous deadlines related to proceedings before the Patent Trial and Appeal Board (PTAB)[9] Transformation of an extension of protection to the United States into a U.S. application
Maintenance fee payment filed by a small or micro entity Affidavits of use or excusable nonuse
  Renewal application

Table 1.  Summary of patent-related and trademark-related deadlines that can be extended for 30 days for applicants affected by COVID-19.  The deadlines must fall between March 27 and April 30.

In order to obtain an extension of time for an applicable deadline, applicants must request the extension along with a statement that the delay was “due to the COVID-19 outbreak.”[10] Fortunately, the USPTO has broadly identified such COVID-19-related delays to include instances where “a practitioner, applicant, patent owner, petitioner, third party requester, inventor, or other person associated with the filing or fee was personally affected by the COVID-19 outbreak” through various occurrences, such as “office closures, cash flow interruptions, inaccessibility of files or other materials, travel delays, personal or family illness, or similar circumstances.”[11]

Unfortunately, extensions of time are not available for all deadlines affected by the COVID-19 pandemic.  For instance, original filing deadlines, PCT or national-stage filing deadlines, deadlines to file a non-provisional patent application claiming domestic benefit from a provisional patent application, and deadlines to file an inter-partes review petition are not covered.

II. USPTO waives revival fees for matters abandoned or affected due to COVID-19

The USPTO has also agreed to waive revival fees for the revival of matters that were abandoned or affected as a result of applicant’s inability to reply to a USPTO communication due to the COVID-19 pandemic.[12] Such abandoned or affected matters include: (1) abandoned patent applications, (2) terminated or limited re-examination proceedings, (3) abandoned trademark applications, and (4) cancelled/expired trademark registrations.[13] Table 2 provides a summary of the requirements and deadlines for requesting a waiver of revival fees for matters abandoned or affected due to COVID-19.

Matter abandoned or affected due to COVID-19

  Patent applications and re-examination proceedings Trademark applications and registrations
Requirements to waive revival fees
  • Reply to the outstanding Office communication
  • A petition to revive
  • A request for waiver of the petition fee
  • A statement that the delay in filing the reply required to the outstanding Office communication was because the practitioner, applicant, or at least one inventor was personally affected by the COVID-19 outbreak such that they were unable to file a timely reply
  • A petition to revive
    A statement explaining how the failure to respond to the Office communication was due to the effects of the COVID-19 outbreak
Deadline for requesting the waiver of revival fees
  • Two months from the issue date of the notice of abandonment of patent application or notice of termination or limitation of re-examination (“Notice”)
  • Six months from the date of patent application abandonment or termination/limitation of re-examination if the applicant did not receive the Notice.
  • Two months from issue date of the notice of abandonment or cancellation (“Notice”)
  • Six months after the date of abandonment, cancellation or expiration if the applicant did not receive the Notice

Table 2.  Requirements and deadlines for requesting a waiver of revival fees for matters abandoned or affected due to COVID-19.

III. USPTO waives original handwritten signature requirements until further notice

In view of the COVID-19 outbreak, the USPTO is also waiving the requirements for original handwritten signatures until further notice.[14] Accordingly, original handwritten signatures will not be required for the following documents that previously required them: (1) registration to practice before the USPTO in patent cases; (2) enrollment and disciplinary investigations; (3) disciplinary proceedings; and (4) payments by credit cards where the payments are not being made via the USPTO’s electronic filing systems.[15]

IV.  Conclusion

Even though the USPTO is currently closed to the public, the USPTO remains operational.  Furthermore, the CARES Act provides the Director of the USPTO with broad discretionary authority to “toll, waive, adjust, or modify, any timing deadline” established by patent or trademark statute or regulation.  The numerous accommodations already provided by the USPTO should provide applicants that have been affected by the COVID-19 pandemic with flexibility. However, applicants should appreciate that, since the COVID-19 outbreak is a fluid situation, additional changes to the USPTO’s operations and/or further accommodations could be forthcoming.

[1] https://www.uspto.gov/coronavirus

[2] Id.

[3] Id.

[4] Id.

[5] March 31, 2020 USPTO press release entitled “USPTO announces extension of certain patent and trademark-related timing deadlines under the Coronavirus Aid, Relief, and Economic Security Act”.

[6] Such extensions can include a Notice of Omitted Items, Notice to File Corrected Application Papers, Notice of Incomplete Application, Notice to Comply with Nucleotide Sequence Requirements, Notice to File Missing Parts of Application, and Notification of Missing Requirements.

[7] Such extensions can include a final or non-final Office Action and a Notice of Non-Compliant Amendment.

[8] Such extensions can include a Notice to File Corrected Application Papers issued by the Office of Data Management.

[9] Such extensions are: (a) the filing of a Notice of Appeal; (b) the filing of an Appeal Brief; (c) the filing of a Reply Brief; (d) payment of the appeal forwarding fee; (e) request for an oral hearing before the PTAB; (f) response to a substitute examiner’s answer; (g) amendment when reopening prosecution in response to, or request for rehearing of, a PTAB decision designated as including a new ground of rejection; (h) request for a rehearing of a PTAB decision; (i) request for rehearing of a PTAB decision; (j) a petition to the Chief Judge; and (k) a patent owner preliminary response in a trial proceeding, or any related responsive filings.

[10] See USPTO Patent and Trademark notices provided in the March 31, 2020 USPTO press release.

[11] Id.

[12] USPTO’s March 16, 2020 Notice entitled “Relief to Patent and Trademark Applicants, Patentees and Trademark Owners Affected by the Coronavirus Outbreak.”

[13] Id.

[14] FR 17502, Vol. 85, No. 61. March 30, 2020.

[15] Id.

© 2020 Winstead PC.

For more on USPTO operations, see the National Law Review Intellectual Property law section.

Patentability of COVID-19 Biotech, Pharma & Personal Protective Equipment Inventions

The innovative workforce has been redirected.  Spurred by the  Coronavirus pandemic, scientific research that once floundered from a lack of funding has been rejuvenated.[i]  The current innovation upsurge is not out of sheer interest for promoting the useful arts, however, but out of necessity.  Around the world, inventors are developing ways to cope with the new world engendered by COVID-19, from treatments for fighting disease to methods of predicting the next outbreak.

Alongside the proliferation of inventions and discoveries is the issue of financial rewards for these innovations.  Should inventions related to fighting COVID-19 be patentable? Many economists and lawmakers are critical of the exclusivity period granted by patents, especially in the case of vaccines and drugs.  Recently, several members of Congress requested “no exclusivity” for any “COVID-19 vaccine, drug, or other therapeutic.”[ii]

This article examines the patentability of developments in the Biotechnology, Pharmaceutical, and Personal Protective Equipment (PPE)  technology sectors related to COVID-19 and looks into the merits of patent criticism.   Part two of this series examines the Patentability of  COVID-19 Software Inventions – Artificial Intelligence (AI), Data Storage & Blockchain.

The Patentability of Inventions Related to COVID-19 – Biotechnology and Pharmaceutical Inventions

No doubt the most vociferous anti-patent sentiment is directed at the idea of patenting vaccines and treatments which enable companies to price their products well above the marginal cost of production.  Remdesivir, which was recently approved by the FDA for emergency COVID treatment, has a projected cost ranging from $390 to $4,460 per treatment course depending on the mortality benefit.[iii]  But an outright prohibition of patent protection for these inventions is an over-correction of these understandable concerns.  Patent protection has already been eroded over the last ten years and further erosion could lead to a decline in US leadership in the healthcare sector over time[iv]

Disclosure of Ideas

One of the basic principles of having patents is that a period of exclusivity is granted in return for inventors disclosing their inventions to the public, thereby probing further downstream studies and research into the disclosed art. Proponents of patent pools and “open science” argue that the free exchange of ideas will occur without the disclosure requirement that accompanies patent application, pointing to systems like the WHO’s Global Influenza Surveillance and Response System (GISRS).  Under GISRS, experts around the world collaborate to develop each year’s flu vaccine.[v]  GISRS is cited as proof that a patent-less system does not prohibit the disclosure of ideas and findings.[vi]

This type of open science system is not realistic for private companies, however.  GISRS is composed of national collaborating centers that collect data from participating public entities such as federal agencies and state public health laboratories.[vii]  The participants of GISRS have very little commercial stake when it comes to the disclosure of research findings.  A similar system cannot be expected to work in the realm of private enterprise especially in the long term.

Incentive to Innovate

Inventions related to the biotechnology and pharmaceutical spheres are already extremely difficult to patent as it is due to Mayo v. Prometheus Laboratories.[viii]  The Supreme Court found that a therapeutic treatment for a gastrointestinal disorder was not patentable whatsoever, believing that the diagnostics involved in the treatment was similar to patenting a “law of nature.”  The aftermath of Mayo was a significant increase in rejections against patent applications related to biotechnology and pharmaceuticals on the grounds of them being non-patentable subject matter.[ix]  The ongoing cost of prosecution in the face of these rejections was especially damaging to small and medium-sized companies that lack the financial means to repeatedly contend with the USPTO.[x]

Importantly, Mayo is a case related to diagnostics.  Therefore, inventions directed to diagnostics are even more difficult to patent.  It is no secret that the US has struggled when it comes to providing widespread and accurate COVID testing.  Judge Michel of the Federal Circuit believes that Mayo contributed to the country’s unpreparedness for the crisis by eliminating “incentives for private companies to develop diagnostic tests”.[xi]  There are many reasons for the failure of the test rollouts, but the US would have been better positioned to fight the pandemic had the proper innovative incentives been in place for the companies that we now rely on.

Recouping Cost

Currently, Gilead has not yet set a price for remdesivir but will be donating its initial supply of 1.5 million doses.[xii]  Ultimately, they will set a price that will most likely be above the marginal cost of $10 to produce a 10-day course of treatment per patient.  Remdesivir was in the process of R&D for over ten years.  Originally developed for SARS and MERS, the commercial price of remdesivir will not be commensurate with the cost of manufacturing but rather the overall investment towards developing the drug over time.[xiii]  The company also recently announced in a SEC filing that they could invest up to “$1 billion or more” in remdesivir in 2020.[xiv]  Pricing remdesivir marginally above cost will result in a substantial net loss for Gilead that will hurt the company’s incentive to develop further treatments.  This is an unwelcomed fact but ignoring it would be wrong and dangerous.

The Patentability of Inventions Related to COVID-19 – PPE 

Patents are not to blame for the shortage of PPE – Personal Protective Equipment and respirators.  PPE and respirators are primarily manufactured abroad and due to the current disproportionate balance between supply and demand, they are scarce commodities.  But for some reason, the Governor of Kentucky wants 3M to license its patents on the N95 mask so that “everybody else can manufacture it.”[xv]  Even Nobel laureates suggest that 3M’s patents over the N95 mask “have made it more difficult for new producers to manufacture medical-grade face masks at scale.”[xvi]

3M does not have a monopoly over the N95 mask.  No one does.  Honeywell, Kimberly-Clark Corporation, Moldex-Metric, GlaxoSmithCline are just a few companies among many that are listed by the CDC that make and manufacture NIOSH-approved N95 respirators.[xvii]

The Coalition for Breathing Safety forewarned the shortage of respirators in 2006.  Manufacturers of the N95 mask were forced to move offshore due to the cost of defending product liability suits over the tightly regulated masks.[xviii]  Again, patents are not to blame for the shortage and do not stand in the way of manufacturers other than 3M from making these products.

See the next segment: Artificial Intelligence (AI), Data Storage & Blockchain –  the patentability of COVID19 Software Inventions.

The opinions stated herein are the sole opinions of the author and do not reflect the views or opinions of the National Law Review or any of its affiliates.

[i] Robert Langreth and Susan Berfield, Famed AIDS Researcher Is Racing to Find a Coronavirus Treatment, Bloomberg Businessweek (March 20, 2020), https://www.bloomberg.com/news/features/2020-03-19/this-famous-aids-researcher-wants-to-find-a-coronavirus-cure.

[ii] Congressional Progressive Leaders Announce Principles On COVID-19 Drug Pricing for Next Coronavirus Response Package, (2020), https://schakowsky.house.gov/media/press-releases/congressional-progressive-leaders-announce-principles-COVID-19-drug-pricing (last visited May 10, 2020).

[iii] Melanie D. Whittington, PhD and Jonathan D. Campbell, PhD, Alternative Pricing Models for Remdesivir and Other Potential Treatments for COVID-19, Institute for Clinical and Economic Review (May 1, 2020), https://icer-review.org/wp-content/uploads/2020/05/ICER-COVID_Initial_Abstract_05012020-3.pdf.

[iv] Paul R. Michel, To prepare for the next pandemic, Congress should restore patent protections for diagnostic tests, Roll Call (April 28, 2020), https://www.rollcall.com/2020/04/28/to-prepare-for-the-next-pandemic-congress-should-restore-patent-protections-for-diagnostic-tests/.

[v] Joseph E. Stiglitz, Should patents come before patients? How drug monopolies hamper the fight against coronavirus, Project Syndicate (April 23, 2020), https://www.marketwatch.com/story/should-patents-come-before-patients-how-drug-monopolies-hamper-the-fight-against-coronavirus-2020-04-23?mod=article_inline

[vi] Id.

[vii]  U.S. Influenza Surveillance System: Purpose and Methods, Center for Disease Control, available at https://www.cdc.gov/flu/weekly/overview.htm (last accessed May 10, 2020).

[viii] Mayo v. Prometheus, 566 U.S. 66 (2012), available at https://www.supremecourt.gov/opinions/11pdf/10-1150.pdf.

[ix] Mateo Aboy, Mayo’s impact on patent applications related to biotechnology, diagnostics and personalized medicine, Nature Biotechnology (May 3, 2019), https://www.nature.com/articles/s41587-019-0111-5.

[x] Id.

[xi] Paul R. Michel, To prepare for the next pandemic, Congress should restore patent protections for diagnostic tests, Roll Call (April 28, 2020), https://www.rollcall.com/2020/04/28/to-prepare-for-the-next-pandemic-congress-should-restore-patent-protections-for-diagnostic-tests/.

[xii] Sydney Lupkin, Putting A Price On COVID-19 Treatment Remdesivir, NPR (May 8, 2020), https://www.npr.org/sections/health-shots/2020/05/08/851632704/putting-a-price-on-COVID-19-treatment-remdesivir.

[xiii] John F. Cogan, Remdesivir Affirms the American Way, Wall Street Journal (May 1, 2020), https://www.wsj.com/articles/remdesivir-affirms-the-american-way-11588368750.

[xiv] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934, Gilead Sciences Inc., available at http://investors.gilead.com/node/36926/html (last visited May 10, 2020).

[xv] The Netherlands Joins COVID-19 IP Pool Initiative; Kentucky Governor Requests 3M Release N95 Patent, Health Policy Watch (April 8, 2020), https://healthpolicy-watch.org/the-netherlands-joins-COVID-19-ip-pool-initiative-kentucky-governor-requests-3m-release-n95-patent/?mod=article_inline.

[xvi] Joseph E. Stiglitz, Should patents come before patients? How drug monopolies hamper the fight against coronavirus, Project Syndicate (April 23, 2020), https://www.marketwatch.com/story/should-patents-come-before-patients-how-drug-monopolies-hamper-the-fight-against-coronavirus-2020-04-23?mod=article_inline.

[xvii] NIOSH-Approved N95 Particulate Filtering Facepiece Respirators, Center for Disease Control, available at https://www.cdc.gov/niosh/npptl/topics/respirators/disp_part/N95list1-a.html (last accessed May 10, 2020).

[xviii]  Sandy Smith, Six Respirator Manufacturers Warn President of Shortage of Masks, EHSToday (June 22, 2006), https://www.ehstoday.com/emergency-management/article/21912885/six-respirator-manufacturers-warn-president-of-shortage-of-masks.

Copyright (C) GLOBAL IP Counselors, LLP

ARTICLE BY Wen Xie at Global IP Counselors.
For more on COVID-19 protective equipment, see the National Law Review Coronavirus News section.

Secretary DeVos Rejects Calls for Waivers – School Districts Must Comply with IDEA and Section 504

In the Coronavirus Aid, Relief, and Economic Security Act (CARES Act), Congress – among other things – directed U.S. Secretary of Education Betsy DeVos to report regarding waivers of children’s rights under the IDEA and Section 504 of the Rehabilitation Act. On April 27, DeVos announced she would not recommend that Congress pass any additional waivers concerning the requirements in those acts.

According to the announcement (available here), the secretary determined there is no reason a student’s access to FAPE cannot continue online, through distance education, or other alternatives. She did request that Congress consider additional flexibilities on administrative requirements under the Perkins Act, the Rehabilitation Act of 1973, and the IDEA (the full report containing the list of waivers is available here).

The importance of this announcement is that schools must continue to provide a FAPE to students in the least restrictive environment even during the current pandemic. Also, without a wholescale waiver, schools should anticipate continuing to hold timely IEP and 504 Team meetings and as stated by the secretary, provide for students’ needs online, through distance education, or other alternative means.

© 2020 Dinsmore & Shohl LLP. All rights reserved.

For more education news, see the National Law Review Public Education and Services law section.

Declaring National Emergency, President Trump Orders Restrictions on Electrical Equipment Supplied By “Foreign Adversaries”

In an Executive Order issued on May 1, 2020, President Trump declared that the unrestricted supply of electrical equipment from foreign countries represents an “unusual and extraordinary threat to the national security, foreign policy, and economy of the United States” because foreign adversaries may use such equipment to sabotage the nation’s electric power supply. While the scope of the order will not be clear until rules to carry it out are put in place, the order could prove disruptive to the supply chains for substations, transformers, and other equipment essential to operation of the nation’s electric power system, as well as to a new generation of “smart grid” devices that are transforming the electric grid, especially for devices that are manufactured in China.

The vulnerability of the electric system to malicious software and other threats embedded in equipment or components manufactured in the territory of hostile powers has long been recognized as a potential problem. In fact, the North American Electric Reliability Corporation, the entity responsible for promulgating and enforcing mandatory electric reliability standards, has developed a reliability standard (CIP-013-1) governing “Supply Chain Risk Management,” although the effective date for the standard was recently delayed by the Federal Energy Regulatory Commission due to the COVID-19 crisis.

In contrast to CIP-013-1, which requires each entity subject to the standard to develop its own plan for ensuring that relevant supply chains are free from cybersecurity risks, the new Executive Order contemplates a top-down approach, in which certain “foreign adversaries” would be identified and imports from those “adversaries” would be prohibited, although transactions with certain vendors would be allowed if they are on a “pre-approval” list. Notably, the Executive Order applies “notwithstanding any contract entered into or any license or permit granted prior to the date of this order” and authorizes the Secretary of Energy to act against “pending transactions” that might violate the order. Hence, the Executive Order could be applied retroactively, particularly to transactions that are now in process.

This aspect of the Executive Order is particularly troubling because it is likely to be at least several months before the exact reach of the Order is known. The Order directs the Secretary of Energy, in cooperation with other federal departments, to promulgate rules carrying out the Executive Order within 150 days. It is likely that the list of “foreign adversaries” will include China, which is an important link in the supply chain for many companies, as well as Russia, Iran, and North Korea. But that remains an unknown, as does the list of suppliers that might be included on the pre-approved list. The Executive Order is limited to the “bulk electric system”—high voltage transmission lines, substations, and related equipment – but contains a provision that could expand its reach to electric distribution systems, an area generally left to state regulation, based on recommendations from a security task force to be formed under the Executive Order.

The Executive Order creates new and potentially serious regulatory, contractual, and supply chain management issues for companies engaged in operation of the bulk electric system, in the manufacture of equipment necessary for operating the bulk electric system, and for emerging “smart grid” technologies that promise to improve the operation and efficiency of the bulk electric system.

© 2020 Beveridge & Diamond PC

For more on America’s electric infrastructure, see the National Law Review Environmental, Energy & Resource law section.

New Platform to Facilitate Development of COVID-19 Technologies

The United States Patent and Trademark Office (USPTO) has launched a new platform that could expedite the development of COVID-19 related technologies. As explained in the USPTO’s press release, the Patents 4 Partnerships web-based marketplace is designed to “facilitate the voluntary licensing and commercialization of innovations in a variety of key technologies” related to “the prevention, treatment, and diagnosis of COVID-19.”

The Patents 4 Partnerships IP marketplace platform currently lists 175 granted U.S. patents and pending U.S. patent applications, covering such diverse technologies as “Methods of Treating Coronavirus Infection,” “Air-Sampling Device and Method of Use,” “Rapid and Highly Fieldable Viral Diagnostic,” and “Dexterous Humanoid Robotic Wrist.” According to the press release, the initially listed items were “drawn from a variety of public sources, including the USPTO, the Federal Laboratory Consortium for Technology Transfer (FLC Business), the AUTM Innovation Marketplace (AIM), universities, and a number of federal agencies.”

Stakeholders wanting to add their U.S. patents or applications to the Patents 4 Partnerships platform can complete this simple form. As noted on the form, the technology should be “reasonably related to the prevention, treatment, diagnosis, protection from or alleviation of symptoms of coronaviruses in general.”

© 2020 Foley & Lardner LLP

For more in COVID-19 tech-development, see the National Law Review Coronavirus News section.

COVID-19 Layoff or Pretext for Age Discrimination?

The recent, unprecedented changes to our country and its workforce due to the COVID-19 pandemic have upended the lives of millions. The economic fallout continues and in many instances, employers simply have no choice but to lay off large swaths of their employees due to the lack of business/revenue. And these employers have legitimate reasons for doing so and view this as a heart-wrenching but necessary step.

At the same time, a small subset of employers may decide that, even though mass layoffs are not necessary, they will still lay off certain, older employees. In this scenario, there is no legitimate business need driving the termination but an opportunity to let go of older employees who often have higher salaries. Or the employer is concerned that older employees may trigger additional costs in terms of insurance or paid time off because of their susceptibility to COVID-19. Similarly, the employer may hold stereotypical views that older employees are less likely to function well in a virtual/remote work setting that requires technological skills.

As such, the employer’s claim that it had to lay off the older employee due to the pandemic could be a pretext for age discrimination. The question is, how do courts make this call? The answer to this question centers on how an employee can prove that the employer’s purported reasons were just a mask for illegal behavior.

Signs That The Layoff May Be Age Discrimination

Each case will be reviewed based on its own facts and merits, so no “one size fits all” approach can apply when analyzing age discrimination and pretext claims. In the context of COVID-19 layoffs, there are some red flags that may suggest that the employer is targeting an employee(s) because of their age rather than a legitimate business need to reduce the workforce. These red flags include:

  • The company institutes a relatively small-scale layoff, which includes a number of more experienced, older, and higher paid employees
  • Younger, less experienced, and less expensive employees are retained and in some cases take over the work of the departed, older workers
  • Comments by decision-makers reference (or had referenced) the experience level, age, higher salaries, nearness to retirement, etc. of the older employees
  • The employer hires new, younger employees within a relatively short period of time after the older employees are let go

Many companies will be required to provide laid off employees with specific, written information about the employees it chose to lay off, including their job titles and ages. This is helpful information to assess whether age discrimination may have motivated the termination decision. But often it will be necessary to dig deeper into the employer’s data about the laid off employees to see if a correlation between the termination decision and their ages emerges.

Legal Standards For Age Discrimination And Pretext Claims

The key federal law that prohibits age discrimination in employment is aptly named the Age Discrimination in Employment Act (ADEA). It prevents an employer from discharging or otherwise “[discriminating] against any individual… because of such individual’s age.” 29 U.S.C. § 623(a).

To win, a plaintiff “must prove by a preponderance of the evidence that age was the ‘but-for’ cause of the challenged employer decision.” Gross v. FBL Fin. Servs., Inc., 557 U.S. 167, 177-178 (2009). Circumstantial evidence, as opposed to direct evidence of discrimination (which is less frequently available to plaintiffs), is analyzed under a three-part test created by the Supreme Court in McDonnell Douglas Corp. v. Green, 411 U.S. 792 (1973).  Note that the Supreme Court clarified that federal employees have a less onerous legal burden to prove in age discrimination claims as compared to private sector employees. Babb v. Wilkie, No. 18-882 (2020).

The McDonnell Douglas framework for an ADEA claim for layoff due to age discrimination is as follows:

STEP 1/prima facie case (burden on plaintiff)

  • They belong to a protected class (older than 40 years old)
  • They were qualified for the job and performing in accordance with the expectations of their employer
  • Employer terminated their employment
  • The employer replaced plaintiff with an individual who was comparably qualified to the plaintiff, but substantially younger, or that they were laid off under circumstances that give rise to an inference of age discrimination

STEP 2 (burden on defendant)

  • Employer must produce evidence that its actions were the result of legitimate and non-discriminatory reasons

STEP 3 (burden on plaintiff)

  • Employee must prove that the non-discriminatory reason(s) offered by the employer in Step 2 were not true reasons, but were a pretext for discrimination based on age.

The Supreme Court held that “it is permissible for the trier of fact to infer the ultimate fact of discrimination from the falsity of the employer’s explanation.” Reeves v. Sanderson Plumbing Prods., 530 U.S. 133, 146-7 (2000). Also, Reeves allows the trier of fact to consider the evidence used to establish a prima facie case of discrimination (first prong of McDonnell Douglas) when they are deciding the final prong of McDonnell Douglas framework. How the employer treats similarly situated (but younger) employees plays a key role in age discrimination cases.

How Can Older Employees Protect Their Rights?

For employees in the private sector, a charge of age discrimination must be filed with the Equal Employment Opportunity Commission (EEOC) within 180 days of the discriminatory act (that is the notice of the layoff). The 180 calendar day filing deadline is extended to 300 calendar days if a state or local agency enforces a state or local law that prohibits employment discrimination on the same basis.

For age discrimination, however, the filing deadline is only extended to 300 days if there is a state law prohibiting age discrimination in employment and a state agency or authority enforcing that law. The deadline is not extended if only a local law prohibits age discrimination.

Note: federal employees have a different charge filing process. Visit www.eeoc.gov for more information.

 

© 2020 Zuckerman Law

ARTICLE BY Eric Bachman of Zuckerman Law.
For more on discrimination in hiring and firing, see the National Law Review Labor & Employment law section.

Jennifer Lopez Sued for Copyright Infringement

More and more often nowadays, celebrities are being sued for posting pictures of themselves on Instagram. While this does not make much sense to many of us, posting a picture on social media that you did not take without permission from the photographer can result in copyright infringement charges.

Actress and singer, Jennifer Lopez, is the latest celebrity to be hit with a copyright infringement suit. Lopez and her production company are being sued for over $150,000 in damages by photographer Steve Sands, who alleges that Lopez posted a photo taken by Sands on Instagram. Sands contends that Lopez and her production company did not license the photograph from Sands or have permission from Sands to post the photo.

While the average person may do something similar and get away with it, celebrities often will not, due to the significant number of likes the photo receives and the celebrity’s large number of social media followers. Some say celebrities post these images to brand themselves without permission from the taker of the photo.

This is not the first time Lopez has been sued for posting. Lopez was sued by Splash News and Picture Agency for $150,000 in October 2019, when she posted a photo taken by the company of her now fiancé, Alex Rodriguez, in her Instagram story in 2017. Splash News alleged they were the owner and exclusive copyright holder of the picture.

The Copyright Act protects the rights of Connecticut photographers by prohibiting others from using their photos for promotion without consent. However, there are exceptions that allow use of another’s photos in certain circumstances.

© 2020 by Raymond Law Group LLC.

New York City Ban on Pre-Employment Drug Testing Takes Effect May 10, 2020

Starting May 10, 2020, New York City employers may not require prospective employees to submit to testing for the presence of marijuana or tetrahydrocannabinols (or THC, the main psychoactive component of marijuana) in an individual’s system as a condition of employment. Currently, neither New York state nor New York City have any general ban on drug testing during employment.

The long-awaited ban, which was passed in April 2019 and is included as an amendment to the New York City Human Rights Law, outlines several exceptions based on the employer’s industry and the prospective position. These include, for example, police or peace officers, positions requiring a commercial driver’s license or those governed by Department of Transportation regulations, positions subject to testing under federal or state regulations or grant conditions, and positions requiring the supervision or care of children, medical patients or vulnerable persons. The new law also exempts positions that will be subject to a collective bargaining agreement that already addresses pre-employment drug testing for those prospective employees. The amendment also includes an exception for positions with the potential to impact the health or safety of employees or the public as identified by the New York City Commission.

In March 2020, the New York City Human Rights Commission issued proposed rules, which include proposed categories for safety sensitive roles, including positions that require regularly working on an active construction site, or power or gas utility lines, positions regularly operating heavy machinery, positions in which an employee operates a motor vehicle on an approximately daily basis, or positions in which impairment would pose an immediate risk of death or serious physical harm to the employee or others. The public comment period for the proposed rules has passed, but the expected finalizations of these rules has been delayed as a result of the COVID-19 pandemic.

The amendment bans only pre-employment testing for marijuana; it does not address testing for any other substance or mid-employment marijuana testing. However, all New York state employers should be mindful of the potential application of the New York medical marijuana law and applicable employment-related protections, including its relation to disability protections and accommodations under antidiscrimination laws.

Failure to adhere to the new ban on pre-employment screening can result in civil penalties up to $250,000 as well as consequential and punitive damages and attorneys’ fees.

Employers in New York City should review their existing drug-testing policies to confirm that they are in compliance with the new law, as well as contact their testing vendors to ensure any pre-employment tests comply with the new law.

 

© 2020 Faegre Drinker Biddle & Reath LLP. All Rights Reserved.

ARTICLE BY Nicole A. Truso of Faegre Drinker, legal clerk Kerry C. Zaroogian contributed.
For more on drug testing, see the National Law Review Labor & Employment Law section.

Ticketmaster, Live Nation Get Booed: Concert-Goers File Class Action for “Unchecked” Abuse of Market Power

Live Nation Threatens Anyone Who Doesn’t Play Along, Plaintiffs Allege

Concert-goers tired of paying “supracompetitive fees” on ticket purchases from Ticketmaster LLC filed a class action against the company and its parent, promoter Live Nation Entertainment, Inc., in U.S. District Court for the Central District of California on April 28 for abusing its more than 70% share of the primary ticketing market (i.e. where tickets are initially sold) for major concerts. The merged companies are also aggressively deploying anticompetitive tactics in pursuit of the lucrative “secondary ticketing” market where tickets are re-sold, typically at higher prices.

Ticketmaster achieved its dominant position through a “web of long-term exclusive dealing agreements” and other anticompetitive activity, the plaintiffs maintain. The companies merged in 2010, putting the ticketing giant together with the nation’s “most dominant concert promoter.” Live Nation controls 60% of the promotion business for major concerts. AEG Live is a distant number two, with 20% market share. Now, the plaintiffs say, Live Nation uses Ticketmaster as a loss leader to bludgeon its competitors and strong-arm venues (Iderstine v. Live Nation Entertainment, Inc. and Ticketmaster LLC, No. 1:20-CV-03888-PA-GJS, C.D. Calif., Western Div.).

“Subsidized by the supracompetitive profits Ticketmaster’s business generates from its domination of primary ticketing services for major concert venues, Live Nation Entertainment is able to keep a stranglehold on concert promotion services – losing tens of millions of dollars annually – by paying its clients exorbitant amounts,” the complaint reads. Live Nation “regularly threatens” concert venues with eliminating them from big-act tours if they use a Tickemaster competitor for ticketing services.

Live Nation has apparently become such an emboldened market bully that its CEO, Michael Rapino, openly boasted last year that if a venue doesn’t use Ticketmaster it will suffer economically because “we don’t hold the revenue.”  This stiff-arm anticompetitive style hasn’t been lost on the Department of Justice Antitrust Division or anyone who’s paying attention in the industry. It’s become the norm. The DOJ said U.S. venues have come to accept that if they don’t use Tickmaster they will lose big-star performers and significant revenue. “Given the paramount importance of live event revenues to a venue’s bottom line, this is a loss most venues can ill-afford,” the DOJ observed.

We recently wrote in our post — DOJ: Event Powerhouse Live Nation Punished Concert Venues for Using Competing Ticketers Despite Bar – of the government’s charge that Live Nation has been violating the DOJ-ordered ban on anticompetitive behavior for years. Now, Live Nation is operating under what the DOJ calls “the most significant enforcement action” of an existing antitrust consent decree in its history, one intended, at least, to secure stricter and longer lasting conditions designed to rein in the event conglomerate’s anticompetitive behavior. The DOJ action began more than a decade ago after the company acquired Ticketmaster. A 2010 final judgment permitted the merger but prohibited the company from retaliating against concert venues for using competing ticket companies, threatening concert venues, or taking other actions against concert venues for 10 years (United States v. Ticketmaster Entertainment, Inc., et al., Case No. 1:10-cv-00139-RMC [July 30, 2010]).

These are highly profitable companies. Live Nation’s 2018 revenues were $10.8 billion. Ticketmaster, a wholly-owned subsidiary following their merger in 2010, made $1.5 billion in 2018.

Despite the 2010 judgment, the DOJ announced earlier this year that Live Nation had been repeatedly violating it for years. The government hopes the modified and extended judgment clarifies for Live Nation what conduct is out of bounds and gives consumers and venues the relief the DOJ wanted in the first place.

Historically, structural remedies (such as divestitures) have been preferable to behavioral remedies (like consent decrees) in addressing antitrust concerns over proposed mergers. As Live Nation and Tickmaster are demonstrating, behavioral remedies are too easily ignored or abused by post-merger behemoths. Too often the benefits of violation outweigh the punishment. Their behavior also highlights the anticompetitive effects that can result from large-scale vertical mergers, which have been rampant in recent years. Bundling, tying, and exclusive contracts are just a few of the competitive concerns that we see playing out here, not to mention a stagnation in the entry of new competitors in various complementary markets.

Seeking relief under Sections 1 and 2 of the Sherman Act, Tickemaster and Live Nation, the Iderstine v. Live Nation complaint says:

  • Engage in anticompetitive exclusive dealing with concert venues;
  • Improperly wield the conditional copyright license Ticketmaster employs to grant access to its online platform, blocking, for example, purchases of a large number of tickets. This forces ticket brokers into exclusivity with Ticketmaster, and not its competitor;
  • Bar individuals from transferring tickets unless they use Ticketmaster to do so;
  • Prevent secondary ticket service providers from being able to do business – and charge consumers lower fees – by forcing venues to use both their concert promotion and concert ticketing services. In other words, tying. Ticketmaster enjoys double-digit annual growth as a result of its “unchecked” anticompetitive conduct, the complaint says.
  • Use “coercion of and threats against disloyal customers, ticket brokers, and others”;
  • Execute vertically arranged boycotts.

Ticketmaster has “clearly engaged in blatant, anti-consumer behavior for years,” the plaintiffs say. In addition to its “behind-the-scenes efforts to feed ticket brokers huge amounts of supply if they sold on Ticketmaster’s secondary platform,” the plaintiffs cite the DOJ’s extension of the 2010 consent decree. It’s only recently come to the attention of ticket-buyers that Live Nation has been “shamelessly” violating the consent agreement for years.  It also notes that the Federal Trade Commission ordered Ticketmaster to stop implying ticket prices were higher on its primary platform than its secondary re-sale platform, when the opposite is true.

The complaint seeks certification of two subclasses:

  1. Primary Ticketing Services Consumer Class. “All end-user purchasers in the United States who purchased a primary ticket and paid associated fees for primary ticketing services for an event at a major concert venue in the United States from Ticketmaster or one of its affiliated entities owned, directly or indirectly, by Live Nation Entertainment, Inc. at any point since 2010.”
  2. Secondary Ticketing Services Consumer Class. “All end-user purchasers in the United States who purchased a secondary ticket and paid associated fees for secondary ticketing services for an event at a major concert venue in the United States from Ticketmaster or one of its affiliated entities owned, directly or indirectly, by Live Nation Entertainment, Inc. at any point since 2010.”

© MoginRubin LLP

U.S. District Court Issues Temporary Restraining Order for Silver Products Fraudulently Promoted as a Treatment for COVID-19

On April 29, 2020, the U.S. District Court for the District of Utah issued a temporary restraining order (TRO) to halt the sale of a fraudulent coronavirus (COVID-19) treatment.  The U.S. Department of Justice (DOJ) announced the court’s decision in an effort to halt the sale of silver products fraudulently claimed to prevent and cure COVID-19.

DOJ filed a civil complaint on April 27, 2020, against defendants Gordon Pedersen of Cedar Hills, Utah and his companies, My Doctor Suggests LLC and GP Silver LLC.  The complaint alleges that defendants began fraudulently promoting and selling various silver products in early 2020 with claims that the silver products would treat and prevent COVID-19.  Some of the alleged false and misleading claims made by defendants include that having silver particles in the bloodstream would block the virus from attaching to cells, that silver would “usher” the virus out of the body, and that silver would destroy all forms of viruses and protect against COVID-19.

The U.S. Food and Drug Administration (FDA) issued a statement on the Utah case that “FDA will continue to help ensure those who place profits above the public health during the COVID-19 pandemic are stopped” and that FDA is “fully committed to working with the Department of Justice to take appropriate action against those jeopardizing the health of Americans by offering and distributing products with unproven claims to prevent or treat COVID-19.”

The enforcement action will be prosecuted in a coordinated action by the U.S. Attorney’s Office for the District of Utah and the DOJ Civil Division Consumer Protection Branch, with the assistance of the FDA’s Office of Criminal Investigations and Office of the Chief Counsel.  In addition to the TRO, prosecutors obtained a separate court order temporarily freezing the defendants’ assets in order to preserve the court’s ability to grant effective final relief and to maintain the status quo.  A hearing on the DOJ’s request for a preliminary injunction is set for May 12, 2020.  If the case proceeds to trial, the government will need to prove its allegations to obtain a permanent injunction against the defendants.

In another case, DOJ announced on April 17, 2020, that the United States District Court for the Southern District of Florida issued a TRO to halt the sale of an unapproved and potentially dangerous industrial bleach product being marketed as a “miracle” treatment for COVID-19.  The FDA and the U.S. Federal Trade Commission (FTC) had issued a warning letter to the defendant, Genesis II Church of Health and Healing, on April 8, 2020.  According to the FDA, oral ingestion of the defendant’s product called the Miracle Mineral Solution can cause nausea, vomiting, diarrhea, and severe dehydration.  The FDA and the FTC have issued nearly 40 separate warning letters in 2020 to companies selling unapproved or misbranded products with claims to prevent or to treat COVID-19.

Commentary

Particulate elemental silver and silver salts can be effective antimicrobial agents, and numerous products containing these active ingredients are currently registered for various antimicrobial uses.  The U.S. Environmental Protection Agency, along with other federal agencies, are working to ensure that necessary reviews and approvals of legitimate products intended to address COVID 19 are as expeditious as possible.  Products that need these regulatory reviews and approval, but that are marketed without them, are and will likely continue to be a current enforcement focus.

©2020 Bergeson & Campbell, P.C.

For more in COVID-19 fraud prevention, see the National Law Review Coronavirus News section.