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The National Law Forum - Page 479 of 753 - Legal Updates. Legislative Analysis. Litigation News.

FDA Issues Final Guidance on Biosimilars

Shortly after approving the first biosimilar under the abbreviated approval pathway created by the Biologics Price Competition and Innovation Act of 2009 (“BPCIA”), the FDA has recently issued 3 final guidances regarding biosimilars. Biological products, or “biologics,” are pharmaceutical products created from biological sources. Unlike chemically synthesized pharmaceuticals, biologics are isolated from natural sources, and are typically more complex than conventional pharmaceutical drugs.

The BPCIA provides abbreviated pathways for the FDA to approve two types of follow-on biologics: biosimilar and interchangeable biological products. Similar to the 1984 Hatch-Waxman Act’s abbreviated pathway for pharmaceuticals, the BPCIA allows a sponsor to seek approval of a “biosimilar” product under section 351(k) of the Public Health Service Act (“PHS Act”) by relying on certain existing scientific knowledge about the safety, purity, and potency of the reference product. The BPCIA defines “biosimilar” as (1) “highly similar to the reference product notwithstanding minor differences in clinically inactive components” and (2) having “no clinically meaningful differences between the biosimilar product and the reference biological product in terms of the safety, purity, and potency of the product.” To meet the higher standard of “interchangeability,” the application must further show (1) the biosimilar is expected to produce the same clinical result as the reference product and (2) a patient can switch back and forth between the biosimilar and the reference product with no adverse effects.

The BPCIA provides abbreviated pathways for the FDA to approve two types of follow-on biologics

The FDA has been slow to accept and approve biosimilar applications, which has left open questions about how to establish biosimilarity and interchangeability under the statutory definitions. On April 28, 2015, the FDA finalized three draft guidances originally published in 2012:

  • Biosimilars: Questions and Answers Regarding Implementation of the Biologics Price Competition and Innovation Act of 2009

  • Scientific Considerations in Demonstrating Biosimilarity to a Reference Product

  • Quality Considerations in Demonstrating Biosimilarity of a Therapeutic Protein Product to a Reference Product

The new guidances provide insight into the FDA requirements for establishing biosimilarity.

Biosimilars: Questions and Answers Regarding Implementation of the Biologics Price Competition and Innovation Act of 2009

This final guidance addresses three categories of commonly asked questions regarding FDA implementation of the BPCIA: (1) biosimilarity or interchangeability; (2) definitions relevant to the BPCIA; and (3) exclusivity. With regard to biosimilarity or interchangeability, the guidance states that a proposed biosimilar may have a different formulation, delivery device, or container closure than the reference product under certain circumstances. Additionally, the guidance discloses conditions permitting an applicant to obtain licensure for fewer than all routes of administration, presentations, and conditions of use for which the reference product is licensed. Further, the guidance describes conditions in which a sponsor may support biosimilarity using comparative data with a non-U.S.-licensed product or extrapolated clinical data designed to support a different condition of use. The guidance additionally instructs applicants how to describe the “strength” of a proposed injectable biosimilar. Finally, the guidance states that a biosimilar product that cites a reference product subject to the Pediatric Research Equity Act must include a pediatric assessment unless the applicant initially seeks approval as an interchangeable biological product.

With regard to the BPCIA’s definition of “biological product,” the guidance discloses the FDA’s regulatory definitions of “protein” and “chemically synthesized polypeptide.” Additionally, it defines when a proposed biological product is considered to be within the same “product class” as previously approved protein products.

With regard to exclusivity, the guidance instructs applicants and sponsor to search an online database to identify whether the reference product is subject to unexpired orphan exclusivity. The FDA will not approve a biosimilar during the 7-year exclusivity period.

Scientific Considerations in Demonstrating Biosimilarity to a Reference Product
This final guidance provides an overview of the FDA’s recommendations for establishing biosimilarity and discusses in detail relevant scientific principles for designing data and information to show biosimilarity. The FDA stresses that it will apply a totality-of-the-evidence approach in its assessment of biosimilarity and will use a risk-based approach to evaluate all data and information submitted. The FDA further emphasizes that the information sufficient to demonstrate biosimilarity will be determined on a product-specific basis.

The BPCIA requires an application to include analytical, animal, and clinical studies demonstrating that the biological product is “biosimilar” to a single reference product. As discussed above, the application must establish the product is “highly similar” to the reference product and has “no clinically meaningful differences.” Although the reference product must be U.S.-licensed, the application may rely on data from comparative studies with a non-U.S. licensed comparator product if the data is scientifically relevant. Because the FDA has discretion to determine what data is required to establish biosimilarity in a particular application, it encourages sponsors of the application to meet with the FDA early during product development to discuss adequate scientific justifications.

The FDA encourages sponsors to use a three step approach to develop evidence necessary to establish biosimilarity.

First, the sponsor should characterize the structural and functional aspects of both the proposed product and the reference product to identify potentially clinically relevant safety or efficacy risks. Structural analyses must use “state-of-the-art technology” to analyze multiple representative lots and show the proposed product will encode the same primary amino acid sequence as the reference product. Any minor modifications must be explained by the sponsor. The structural analyses for all relevant characteristics of the protein product (such as primary, secondary, tertiary, and quaternary structure; posttranslational modifications; and biological activities) must also be included. The FDA further recommends structural analysis of the finished dosage form to assess the effect of excipients or any other formulation effects. In vitro and/or in vivo functional assays must also be used to evaluate the pharmacologic activity of protein products.

Second, the sponsor should demonstrate safety and biosimilarity through animal studies. These studies generally do not establish safety, but are relevant to support the demonstration of biosimilarity through evidence of PK and PD measures. Nevertheless, animal toxicity and immunogenicity studies may be useful where uncertainty about safety remains after the initial structural and functional characterization.

Third, the sponsor should conduct comparative human PK and PD studies and a clinical immunogenicity assessment of the two products in an appropriate study population. The sponsor should discuss study proposals and overall clinical development plan with the FDA before initiating such studies. A sponsor should provide adequate scientific justification for choices in study design, population, endpoints, and other parameters. Human PK and PD measures comparing the proposed product to the reference product are typically fundamental to demonstrate biosimilarity. Even where relevant PD measures are not available, sensitive PD endpoints may be assessed. The FDA further expects at least one comparative clinical study regarding immunogenicity in order to assess the safety and effectiveness of the proposed product. The overall immunogenicity assessment should consider the nature of the immune response, the clinical relevance and severity of consequences, the incidence of immune responses, and the population being studied. Generally, the FDA expects studies to present statistical evidence that the proposed product is neither significantly inferior nor superior to the reference product. An applicant may provide sufficient scientific justification to extrapolate clinical data to support a determination of biosimilarity for various indications.

If there is uncertainty at each step, the sponsor should evaluate the uncertainty and consult with the FDA to adequately address it.

Quality Considerations in Demonstrating Biosimilarity of a Therapeutic Protein Product to a Reference Product

This guideline relates to the biosimilarity of therapeutic protein products and describes nine factors that are relevant in developing analytical studies to show a proposed product is “highly similar” to a reference product.

1. Expression System. The application should seek to minimize differences between the proposed and referenced expression systems. The FDA expects the expression construct for a proposed product encodes the same primary amino acid sequence as its reference product. However, minor modifications (such as N- or C- terminal truncations) that are not expected to change the product performance may be justified.

2. Manufacturing Process. The application should demonstrate its manufacturing process does not result in significant differences between the proposed product and its reference product.

3. Assessment of Physiochemical Properties. Physicochemical assessments are designed to maximize the potential for detecting differences between the proposed and reference products. The sponsor should consider all relevant characteristics of the protein product and design tests to account for the heterogeneity of the proposed product and the reference product as well as the ranges of variability for each.

4. Functional Activities. Functional assays are designed to complement physicochemical analyses and evaluate the function of the protein product. Sponsors should perform appropriate assays to evaluate the range of relevant functional activities for a product.

5. Receptor Binding and Immunochemical Properties. Sponsors should analyze specific binding or immunochemical properties when they are part of the activity attributed to the protein product.

6. Impurities. Sponsors should characterize, identify, and quantify impurities in the proposed product and reference product. Sponsors should further perform a risk-based assessment regarding any differences in process-related impurities between the proposed and reference products.

7. Reference Product and Reference Standards. Sponsors should provide a broad comparison of the proposed product to the reference product that is not strictly limited to analysis of each product in isolation. For example, the biosimilarity analysis may further consider applicable reference standards and relevant publicly available information.

8. Finished Drug Product. Product characterization studies should be performed on the most downstream intermediate best suited for each analytical procedure. Thus, sponsors should analyze the finished drug product if it is best suited for a particular analysis. If the analysis is performed on an earlier intermediate, sponsors should provide additional information. Additionally, sponsors should clearly identify excipients used in the proposed product that differ from those in the reference product.

9. Stability. Sponsors should include comparative studies conducted under multiple stress conditions to establish degradation profiles of the proposed and reference product.

Conclusion

The recently issued final guidances provide insight into how the FDA will evaluate biosimilarity and directions for sponsors throughout product development. However, many additional questions surrounding the BPCIA remain. For example, the currently issued guidances do not address how the FDA will determine “interchangeability.” Interchangeable drugs are likely to be more profitable than mere biosimilars because they can be sold in place of the reference drug without a prescribing doctor’s approval.

Upcoming draft guidances plan to provide additional information regarding the required scientific requirements for establishing biosimilarity and interchangeability as well as naming and labeling requirements for approved biosimilars. In January, the FDA’s Center for Drug Evaluation and Research (CDER) announced plans to publish five draft guidances on biosimilars in 2015:

  • Biosimilars: Additional Questions and Answers Regarding Implementation of the Biologics Price Competition and Innovation Act of 2009

  • Considerations in Demonstrating Interchangeability to a Reference Product

  • Labeling for Biosimilar Biological Products

  • Nonproprietary Naming for Biological Products

  • Statistical Approaches to Evaluation of Analytical Similarity Data to Support a Demonstration of Biosimilarity

ARTICLE BY Imron T. Aly, Sailesh K. Patel, John K. Hsu and Helen H. Ji of  Schiff Hardin LLP
© 2015 Schiff Hardin LLP

First Look At False Marking Under The AIA – America Invents Act

In Sukumar v. Nautilus, Inc., the Federal Circuit took its first look at the standing requirements to bring a false marking case under the American Invents Act (AIA). The court rejected Nautilus’ arguments that only “market participants” could bring suit, but required plaintiffs to at least have taken action to enter the market in order to possibly have suffered a “competitive injury.”

The AIA Changes To Private False Marking Suits

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The AIA amended the false marking statue (35 USC § 292) to limit private actions for false marking:

(b) A person who has suffered a competitive injury as a result of a violation of this section may file a civil action in a district court of the United States for recovery of damages adequate to compensate for the injury.

According to the effective date provisions, these amendments were retroactive, and “shall apply to all cases that are pending on or commenced on or after the date of the enactment of this Act.” The Federal Circuit affirmed their retroactivity in a nonprecedential opinion issued in 2012.

The False Marking At Issue

Sukumar commenced its false marking case before the AIA was enacted, but the case still was pending when the revised statute took effect. Thus, although the district court already had found that some Nautilus machines were “falsely marked” with patents that did not cover the products, the district court granted summary judgment in Nautilus’ favor because Sukumar had not suffered a “competitive injury.”

Sukumar’s Business Plans

According to the Federal Circuit opinion, Sukumar became interested in the Nautilus machines when he was “caring for his aging father” and found the machines unsuitable for “frail seniors.” He contacted Nautilus, “ordered Nautilus machines and asked for certain modifications to cater to elderly users’ needs.” Eventually he founded Southern California Stroke Rehabilitation Associates (another plaintiff in this case) and seemed to intend to open “senior rehabilitation facilities” that would use “modified Nautilus fitness machines.”

To support his claim of competitive injury,” Sukumar alleged that he developed the intent to compete with Nautilus in the mid- to late-1990s. In response, Nautilus alleged that Sukumar at best “intended to operate senior rehabilitation centers” that “would use modified Nautilus fitness machines, which would make Sukumar a customer of Nautilus’, not a competitor.”

The Federal Circuit Opinion 

The Federal Circuit opinion was authored by Chief Judge Prost and joined by Judges Newman and Reyna. The opinion frames the issue on appeal as “whether (or to what extent) an entity that has not entered the relevant market can suffer ‘competitive injury.’”

The court applied the plain meaning of “competitive injury,” the legislative history of the amendments to § 292, and policy rationales and arrived at the following test:

We hold that a potential competitor may suffer competitive injury if it has attempted to enter the market. An attempt is made up of two components: (1) intent to enter the market with a reasonable possibility of success, and (2) an action to enter the market.

Turning to the record on appeal, the Federal Circuit found that “Sukumar’s evidence of his intent to compete with Nautilus is weak.” Moreoever, the Fedearal Circuit found that “even if Sukumar subjectively intended to enter the market for fitness machines, he took insufficient action to pursue that intent” to satisfy the test for “competitive injury.” For example, the court noted:

[T[he list of basic steps Sukumar did not take is long:
Sukumar did not develop a business plan.
Sukumar did not attempt to design a prototype.
Sukumar did not hire any employees.
Sukumar did not gain engineering knowledge.
Sukumar did not investigate developing manufacturing capacity.

Thus, the Federal Circuit affirmed the district court’s grant of summary judgment in favor of Nautilus “because Sukumar lacks standing to bring a claim for false marking under § 292.”

ARTICLE BY Courtenay C. Brinckerhoff of Foley & Lardner LLP

© 2015 Foley & Lardner LLP

DOS June 2015 Visa Bulletin – Department of State

The Department of State’s June Visa Bulletin on a whole brought relatively few changes of note.

Progress was made in the EB-2 category, where priority dates for Indian nationals advanced six months from April to October 1, 2008. Similarly, Chinese nationals experienced forward movement of one year in priority dates, with the Department of State (DOS) now processing cases with priority dates of June 1, 2013 or before.

The EB-3 category remains virtually unchanged across all areas, with the exception of the Philippines which retrogressed nearly two and half years from July 2007 to January 2005. Filipinos whose immigrant petitions were filed under the EB-3 skilled and professional workers category are now subject to a ten-year retrogression backlog.

In the EB-5 category, Chinese nationals with approved I-526 petitions carrying a priority date of May 1, 2013 or earlier are now current.  Those with later priority dates will have to wait until their number is called and there are no timeline estimates available at this time.

Those individuals that have been impacted by a visa retrogression of any kind are encouraged to check the DOS Visa Bulletin each month in order to see if visa processing dates have moved under their approval category.

DOS Visa Bulletin june 2015

ARTICLE BY Shaun K. Staller of Greenberg Traurig, LLP
©2015 Greenberg Traurig, LLP. All rights reserved.

Could Train Control Technology Have Prevented the Amtrak Derailment?

An Amtrak train that derailed on May 12, traveling more than 100 miles per hour on a known dangerous curve, has an unfortunate similarity to the Spuyten Dyvil crash in December 2013. In that incident, a Metro North train traveling at 82 miles per hour derailed on a treacherous curve, traveling at nearly three times the allowed speed.

Four passengers died in the Spuyten Dyvil derailment. Operator fatigue was deemed to be the cause for that accident. This most recent crash killed at least eight people and eight are listed in critical condition. In both cases, National Transportation Safety Board (NTSB) experts contend that a safety measure called “positive train control” (PTC) could have prevented the disasters.

Robert Sumwalt, a member of the NTSB, explained during a press conference on Wednesday that Amtrak already has a system in place called the Advanced Civil Speed Enforcement System (ACES), which is installed throughout most of the Northeast Corridor. “However, it is not installed where the accident occurred,” Sumwalt said. “That type of a system, we call it a positive train control system, is designed to enforce the civil speed, to keep the train below its maximum speed. We have called for positive train control for many years, it’s on our most wanted list. Congress has mandated that it be installed by the end of this year.”

Sumwalt continued, “Based on what we know right now, we feel that, had such a system been installed in this section of track, this accident would not have occurred.”

He said that a thorough walk-through of the accident site was conducted yesterday and that investigators will be looking into the track, the train control signal system and the operations of the train. “Our mission is to not only find out what happened, but why it happened to prevent it from happening again,” he said.

The looming question is why this safety measure was not in place, even though PTC has been called for since a collision in Chatsworth, California killed 25 people. The Rail Safety Improvement Act of 2008 mandates that PTC for passenger and freight trains be operational by the end of 2015. But because of high costs and the complexity of the system, Congress has been considering an extension until 2020.

According to the NTSB website:

In the aftermath of the Chatsworth tragedy, Congress enacted the Rail Safety Improvement Act of 2008. The Act requires each Class 1 rail carrier and each provider of regularly-scheduled intercity or commuter rail passenger service to implement a PTC system by Dec. 31, 2015. Progress is being made toward this lifesaving goal. Metrolink became the first commuter rail system to implement PTC, when it began a revenue service demonstration on the BNSF Railway. This demonstration project is a step in the right direction, and Metrolink reports it will implement PTC fully throughout its entire system before the Congressionally-mandated deadline.

It has been more than 45 years since the NTSB first recommended the forerunner to PTC. In the meantime, more PTC-preventable collisions and derailments occur, more lives are lost, and more people sustain injuries that change their lives forever.

Yet there is still doubt when PTC systems will be implemented nationwide as required by law.

Each death, each injury, and each accident that PTC could have prevented, testifies to the vital importance of implementing PTC now.

ARTICLE BY Caroline McDonald of Risk and Insurance Management Society, Inc. (RIMS)
Copyright 2015 Risk and Insurance Management Society, Inc. All rights reserved.

EU Investigating Geo-Blocking of Online Video Games

On May 6, 2015, the European Competition Commission released a new Digital Single Market Plan, and simultaneously launched a broad antitrust investigation into e-commerce.  The DSM plan, consisting of sixteen proposals, seeks to create a single digital European market where access to digital goods and services is unfettered across all 28 member states.  The European Competition Commission will investigate whether firms’ restrictions on cross-border online trade violate the EU competition laws, and attempt to remedy them through enforcement mechanisms.  High on the list is the geo-blocking of online content, including video games.  The impending probe will likely target some large U.S. technology companies.

Geo-blocking is a technical barrier that allows online merchants to charge different prices or restrict users’ access based on physical location or credit card information.  For example, a German resident may have to pay more for a pair of shoes purchased online from an Italian retailer than someone living in Italy.  With respect to gaming, the investigation will focus on the geo-blocking of video games that are sold online for use on personal computers.  The Digital Single Market plan is highly critical of geo-blocking―which it describes as violating the EU’s goal of free movement of commerce within its borders―and proposes to eliminate the practice altogether.  But the Competition Commission cannot seek to change a firm’s business practice unless it violates EU antitrust law, necessitating a rigorous investigation.

To determine whether certain geo-restricting practices are anticompetitive, the Commission will analyze game publishers’ business practices, probing into their contractual limitations on the distribution of online video games.  EU Competition Chief Margrethe Vestager said that geo-restrictions “are often the result of arrangements that are included in contracts between manufacturers and content owners on one side and their distributors on the other.”  Accordingly, the Commission is willing to go as far as “examining the clauses in their contracts.”  But the Commission also recognizes that companies use geo-blocking for legitimate and procompetitive reasons, like restricting information to paying customers and protecting copyrighted material.

The probe will begin with comprehensive questionnaires sent to companies involved in e-commerce within the EU and could potentially lead to formal inquiries and enforcement actions.  Commissioner Vestager hopes to have preliminary findings by mid-2016.

The probe may target large U.S. technology companies, especially if they are suspected of abusing their dominant position to restrict trade.  EU competition law places certain duties on companies that are “dominant” in their markets (a fairly low bar compared to US standards), and abuse of a dominant position can be illegal.  American technology companies tend to be larger and more successful than their European counterparts, so they may trigger the Commission’s scrutiny.  Accoring to Vestager, “every company that sells products online, including their suppliers and their technology providers, will be affected. Potentially, the scope will be very wide.”  On the gaming front, the probe may affect large online game developers.

The Commission hopes that the creation of a single digital market will boost European startups by making it easier for them to launch and grow quickly across borders, similar to the advantage American companies have to rapidly gain a national user base in the U.S.  “We want companies in Europe to use the Digital Single Market to scale up, not move out,” said Andrus Ansip, the EC’s Vice President of Digital Single Market.  So it’s not surprising that the proposal and investigation come on the heels of the EU’s crackdown on American tech giants, the re-opening of the Google investigation being the most recent example.  Indeed, some commentators have characterized the move as protectionist, given Europe’s recent concerns over the increasing power of large U.S. web companies.

The ramifications of the DSM plan are not yet clear, but game companies that use geo-blocking may have to look for other solutions in the future.

ARTICLE BY

Nadezhda Nikonova of Sheppard, Mullin, Richter & Hampton LLP

Senators Booker and Hoeven Introduce the Commercial UAS Modernization Act to Streamline Drone Integration

Today, Senator Cory Booker (D-NJ) and John Hoeven (R-ND) introduced the Commercial UAS Modernization Act, legislation designed to streamline the integration of commercial unmanned aircraft systems (UAS) in the United States. The legislation would establish an interim rule governing small UAS operations, provide the Federal Aviation Administration (FAA) with some flexibility on issues like visual-line-of-sight (VLOS), reduce the regulatory burden for commercial operators, create a new deputy administrator position at the FAA focused on UAS and encourage maximum use of current FAA UAS test sites.

The FAA has already taken several steps in 2015 to expedite commercial use of UAS, including releasing the Notice of Proposed Rulemaking focused on the Operation and Certification of small UAS (UAS NPRM), approving blanket Certificate of Waiver Authorizations (COAs) and altering the Section 333 exemption process to reduce the burden on operators. While the Section 333 exemption process has resulted in nearly 300 approvals for UAS operations to date, the FAA’s proposed regulatory program may not be finalized until 2016 or even 2017.   The Commercial UAS Modernization Act would put a regulatory program in place before that time period, allowing the U.S. to take advantage sooner of what is expected to be $82 billion in expected economic impact over the next decade.

Commercial UAS Modernization Act

In general, the Commercial UAS Modernization Act:

  • Creates an interim rule for commercial use and testing of small UAS while the FAA finalizes rules covering commercial UAS.

  • Builds a framework for the registration and use of UAS for commercial purposes.

  • Strengthens the FAA’s oversight authority by creating a new position, the Deputy Associate Administrator for Unmanned Aircraft and by streamlining regulations.

  • Ensures that FAA test sites are being used to the maximum extent to facilitate research into new technologies, in partnership with industry and other relevant government entities.

The primary goal of the Commercial UAS Modernization Act is to create a regulatory gap filler until the FAA’s UAS NPRM is finalized. The legislation would allow small UAS operations without an airworthiness certificate. Many of the conditions set forth in the legislation are the same as what is found in the FAA’s UAS NPRM, including registration, certification and operator testing requirements. As for operations, the VLOS standard is still in place as well as the flight ceiling of 500 feet. Small UAS operators would also be required to obtain liability insurance covering operations and provide proof of that insurance to the FAA.

Interestingly, Section 338(e) of the legislation includes a requirement that the FAA “expedite and expand exemptions from the interim operating restrictions.” This appears to be the flexibility that many stakeholders had hoped for with the UAS NPRM. Under Section 338(e), the FAA may consider exemptions relating to (1) beyond VLOS operations; (2) programmatic exemptions based on previous analysis; (3) extension of VLOS and marginal visual flight rules weather conditions; (4) heavier unmanned vehicles.

The Commercial UAS Modernization Act would also create a new position, the Deputy Associate Administrator for Unmanned Aircraft. The new Deputy Administrator would be tasked with addressing some of the more challenging issues facing commercial UAS operations, including (1) aircraft spectrum issues; (2) barriers to beyond VLOS operations; (3) barriers to payload carriage; and (4) barriers to utilizing automated unmanned aircraft systems. The legislation also makes research a priority, including identifying safety standards for detect and avoid, command and control, autonomous aircraft systems, and air traffic management for beyond VLOS operations.

What has the FAA Done in 2015 to Expedite Integration

Small UAS Proposal

Earlier this year, the FAA released its Notice of Proposed Rulemaking focused on the Operation and Certification of small UAS within the United States. The UAS NPRM applies to small UAS defined UAS weighing less than 55 pounds. The UAS NPRM proposes to add a new Part 107 to Title 14, which would prescribe “rules governing the registration, airman certification, and operation of civil small UAS within the United States.” The public comment period for the NPRM ended on April 24, 2015. Now, the FAA will consider input from stakeholders while developing a final rule. That final rule may not arrive until 2016-2017. In the interim, commercial operators are left with the Section 333 exemption process.

Summary Grant Process

Speaking of the Section 333 exemption process, as of May 2015, the FAA has approved nearly 300 petitions for exemption. The pace of the FAA’s Section 333 approvals has increased as the agency tweaks the process. Recently, the FAA introduced a “summary grant” process. With the summary grant process, the FAA looks to see if a new Section 333 petition request is similar to a previously approved petition request. If the new request is similar to an already approved Section 333 petition, the FAA will rely on its prior analysis and issue a summary grant. The FAA has indicated that most of the Section 333 petitions that it has received are either for film and television production or for the collection of aerial data and that future similar petitions will be handled via the summary grant process. The FAA will still perform a detailed analysis for unique Section 333 petitions. Unique Section 333 petitions will also be subject to public comment.

The FAA has modified other pieces of the Section 333 approval process to reduce the barriers to approval. For example, in most Section 333 approvals to date, the FAA required operators to at least have a private pilot certificate. The FAA recently modified this requirement and now may approve operations by people who hold a recreational or sport pilot certificate.   Recreational and sport pilot certificates are generally easier to obtain than a private pilot certificate. Also, the FAA previously required UAS operators to have a third class medical certificate. The FAA eliminated that requirement as well. Now, an operator will only need a valid driver’s license to satisfy the medical requirement.

“Blanket” COA

Finally, one other streamlining tool the FAA adopted in the first part of 2015 is the concept of a “blanket COA”. In the past, once the FAA granted a Section 333 Exemption, the exemption holder would also have to file for a separate COA to fly the UAS in a particular block of airspace. The COA approval process can take 60-days.   To cut down on that time, the FAA announced in March that companies with current Section 333 approvals and all future such approvals would be covered by a “blanket” COA as long as operations were at or below 200 feet.

The “blanket” COA applies to any UAS operator that has been granted a Section 333 exemption for aircraft that weigh less than 55 pounds, that operate below 200 feet, during daytime Visual Flight Rules (VFR) conditions, within VLOS of the pilots, and that stay certain distances away from airports or heliports. UAS operations outside of these parameters still require the standard COA.

ARTICLE BY Michael Weller of Bracewell & Giuliani LLP
© 2015 Bracewell & Giuliani LLP

USCIS Changes Policy on the Use of Loan Proceeds as a Source of Fund

During the past two USCIS Stakeholder’s Meetings on EB-5 issues, EB-5 stakeholders, have questioned USCIS on its policy of allowing loans to be a source of an investor’s lawful capital.  For many years, USCIS has allowed investors to secure a loan by a relative’s property, so long as that relative gifted the use of the real property as collateral for the loan.

USCIS, however, has recently changed its policy through the course of adjudicating I-526 Petitions and many stakeholders have reported that I-526 Petitions are being denied when the investor does not wholly own the real property used to collateralize a loan.  Following its April 22, 2015, stakeholders call, USCIS issued a written summary of the Immigrant Investor Program Office’s (IPO) Deputy Chief’s remarks on the issue.  USCIS now is stating that proceeds from a loan may qualify as capital of the investor provided that: (1) the investor is personally and primarily liable for the loan and (2) the value of the collateralized asset actually owned by the investor must meet or exceed the value of the loan.  In practice, many stakeholders are reporting Requests for Evidence (RFEs), Notices of Intent to Deny (NOIDs) and denials of petitions stating that where the investor does not personally own the entire property, it cannot be used as the collateral for a loan.  In other words, USCIS seems to be stating that the investor may only use loan proceeds as a source of funds if the loan is collateralized by the investor’s property and the investor solely owns the property, i.e. not jointly with a third party such as a parent, sibling or child.  USCIS seems to be continuing to approve cases where investor owns the property with his or her spouse.

Unfortunately, not only does this shift in policy change more than a decade of adjudications allowing for these loans to be secured by assets of other individuals, but it also does not square with the statute, the regulations, or immigration precedent decisions, all of which allow such a scenario.  The Immigration and Nationality Act does not require cash invested in an enterprise to be secured by assets of an investor.  In the fact scenario described above, the investor is investing cash, as there is no debt arrangement between the investor and the new commercial enterprise. The Code of Federal Regulations only requires promissory notes contributed as “capital” to the new commercial enterprise to be secured by the assets of the investor.  Binding case precedent, particularly Matter of Izummi, also does not require cash invested to be secured by assets of an investor and define “indebtedness” as a “promise to pay,” i.e. a promissory note between the investor and the new commercial enterprise.  Additionally, the EB-5 Policy Memorandum only requires promissory notes to be secured by assets of the investor.  So long as the investor has demonstrated a lawful loan secured by assets that were lawfully obtained, either by the investor himself or from a giftor, investor should have satisfied the burden of proof that the funds were lawfully obtained capital.

USCIS, however, disagrees with this interpretation.  As a practical matter, it may be best to refrain from filing an I-526 petition where the source of funds is a loan that is secured by an asset that is not owned by the investor until this matter is resolved at a policy level or through litigation with USCIS.

Additionally, USCIS warned that loan agreements that are used as the source of funds often contain a provision that state the loan cannot be used for the purchase of investments or securities.  The IPO Deputy Chief stated that a restriction on the use of proceeds contained in a loan agreement is relevant evidence and will be considered in determining whether the investor/petitioner has demonstrated, by the preponderance of evidence, a lawful source of funds.  The Deputy Director further stated that where the petitioner obtains a loan from a lawful source (such as a reputable bank), the loan proceeds may, nevertheless, be unlawful if the capital was obtained by unlawful means (such as fraud on a loan application).  Accordingly, if a loan contains any restrictions on the use of funds, it is best for the investor to deal with the bank ahead of time to remove any such restriction that may conflict with the stated use of funds of the loan.  Additionally, the investor may get a letter from the bank that issued the loan confirming that the bank knew the investor was using the loan for EB-5 purposes when the loan was extended to the investor.

With this policy change, it is important to carefully examine investor strategy with source of funds documentation.  If an investor chooses to take out a loan for the source of the EB-5 investment, it is important to examine the collateral and its ownership carefully.  Equally important is having the bank’s permission to use the loan as the source of an EB-5 investment.

ARTICLE BY

Jennifer Hermansky
Greenberg Traurig, LLP

©2015 Greenberg Traurig, LLP. All rights reserved.

OSHA Secures Robust Injunctive Relief for Whistleblower

Zuckerman Law

On May 7, 2015, OSHA obtained a preliminary injunction in a Section 11(c) whistleblower case barring Lear Corporation from further retaliating against the whistleblower, Kimberly King. The injunction is a significant win for whistleblowers because the court’s order broadly construes the scope of protected whistleblowing to include disclosures to the media, and it signals OSHA’s stepped up enforcement of whistleblower protection laws.

oSHA whistleblower case, preliminary injunctionKimberly King worked for Lear Corporation at a plant in Alabama that produces foam cushions that are used in car seats and headrests. King raised concerns about the health effects of exposure to a chemical called toluene diisocyanate (“TDI”).   Based on internal tests and tests conducted by OSHA, Lear concluded that TDI levels were within legal limits. King, however, remained concerned that she developed asthma because of her exposure to elevated TDI levels at the plant, and King shared her concerns with media outlets. An article on nbcnews.com described how TDI and other workplace chemicals correlate with certain respiratory conditions like asthma, and the article cited a physician who concluded that King is in the top 25 percent in terms of the levels of isocyanate antibodies in her blood.  King also participated in a YouTube video accusing Lear of exposing employees to TDI.

Lear suspended King and another employee from work without pay for participating in the video on the ground that King should have known that the plant was not exposing employees to elevated levels of TDI.   In addition, Lear demanded that King recant her statements to the media. King continued to raise her concerns by going to Hyundai in March 2015 to deliver a letter asking it to fix the conditions at the plant. Lear then suspended King for seven days without pay, and upon King’s return, Lear terminated her employment and sued her for defamation and interference with business relations.

After an evidentiary hearing, Judge Callie V.S. Granade concluded that King’s participation in the YouTube video, her disclosures to the press, and her disclosures to OSHA constitute protected activity. In addition, she issued an order providing broad preliminary relief, including:

  • enjoining Defendants from terminating, suspending, harassing, suing, threatening, intimidating, or taking any other discriminatory or retaliatory action against any current or former employee based on Defendants’ belief that such employee exercised any rights he or she may have under the Occupational Safety and Health Act;

  • enjoining Defendants from telling any current or former employee not to speak to or cooperate with representatives of the Secretary of Labor;

  • enjoining Defendants from obstructing any investigation by the Secretary of Labor or its designee; and

  • enjoining Defendants from suing current or former employees because those individuals complained about health and safety or because they engaged in protected activity under the Occupational Safety and Health Act.

In assessing whether OSHA’s injunction serves the public interest (one of prerequisites for granting a preliminary injunction), Judge Granade made a critical observation about the public policy undergirding whistleblower protection laws: “The public retains an interest in safe and healthy workplace environments for all employees, and protecting employees who speak up about perceived dangers in the workplace. This preliminary injunction may also help prevent future violations of section 11(c) and inform current employees of their rights under this section.” This order is a great example of the type of vigorous enforcement required to effectively protect whistleblowers.

Register for the Thomson Reuters Legal Executive Institute 5th Annual Law Firm CFO/CIO/COO Forum – NYC June 3

The 5th Annual Law Firm CFO/CIO/COO Forum
Data Privacy, Security & the Globalized Law Firm

Early Bird Rate Ends 5-14!

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Register Now

The Thomson Reuters Legal Executive Institute proudly presents the 5th Annual Law Firm CFO/CIO/COO Forum on June 3, 2015 in New York City at the Crowne Plaza Times Square Manhattan.

Our program will address the twin specters of data privacy and cyber security and their impact on US and international law firms in 2015. Delegates will hear from non-legal industry CISOs and world-renowned cyber security experts on emerging threats and innovative strategies affecting modern day law firm operations. Come prepared with questions and ideas as you engage both thought leaders and peers throughout a series of collaborative discussions.

This year’s program highlights include:

  • Enemies at the Gate: Responses to Data Security Threats Across Industries
  • Red Corner: The Rise of Corporate Espionage & the Problem with China
  • From Russia with Love: APT28 and the Soviet Spector
  • Preparing for a Client Security Audit: A Peer-to-Peer Workshop
  • A Briefing on Data Security Concerns in the Cloud and Tablet Technology
  • And more

Special Offers

Early Bird Discount: Save 15% when you enter CFO15 at checkout for individual registrations.  Expires 05.14.15

Group Discounts: Save 30% on when you register 2 or more delegates, please call 1-800-308-1700

Why You Should Attend

  • This is the only professional conference in existencedevoted to the unique cyber security concerns of law firms.
  • Stay Informed about the current threats to enterprise security at your firm from our elite faculty of thought leaders.
  • Network across industries as we welcome Chief Information Security Officers (CISOs) from numerous sectors to the Forum.
  • Gain Practical Takeaways for adoption at your firm or organization and build powerful connections with the premier thought leaders in the profession.
  • Be prepared to handle any future incidents at the completion of the Forum.
  • Did you know? Many law firm CIOs and security analysts believe that mobile technology and tablet technology will be the primary target of attacks in 2015. Our forum dispenses crucial advice on how to avoid falling prey to such forces.
  • Did you know? Many analysts believe international law firms will easily double their operation and insurance costs in 2015 as a result of increased data security attacks on US and Western businesses. Are you well-versed in the latest threats from Asia, Russia and beyond?
  • Did you know? The 2015 federal regulatory, legislative and enforcement landscape will force many organizations to thoroughly assess their current security infrastructure and comply with myriad new quality controls. Have you done your proper due diligence?

LinkedIn For Lawyers: The Publishing Tool

Jaffe

There is no question that LinkedIn is a powerful networking tool that can potentially turn online connections into real-world clients. That won’t happen overnight, however, and those efforts will only thrive with proper care, maintenance and pruning.

Writing Your LinkedIn Profile

Most likely you already have a basic profile, but one of the biggest obstacles lawyers face is distinguishing themselves online. Bios sound the same from one attorney to the next, and, while they might showcase a long list of achievements, they often don’t say much about the person and how he or she is a problem solver. It’s important to remember that your profile is your front door to the world. Spruce it up, and lay out the welcome mat.

Need some tips when writing your LinkedIn profile? To reach influencers, gain a following and develop a reputation as someone “in the know,” use actionable language, and try to be more lively and specific. Identifying clearly how you provide a solution will make it infinitely easier for potential clients to understand what you do and why you are the perfect fit for their job. If you think revising your online profile will easily drop to the bottom of your “to do” list, schedule it on your calendar.

Blogging on LinkedIn

With a progressive profile in place, you’re now ready to harness the power of LinkedIn. In addition to providing opportunities for connecting with colleagues, friends, and potential prospects; joining groups; and posting, LinkedIn has recently unveiled a new publishing platform. It was designed to provide users with a sophisticated, yet easy-to-use, blogging tool. For those who work at law firms that do not have blogging resources, or if you want to prove the viability of a blog before adding it to your law firm website, using LinkedIn publishing is a good option.

To help you use the blogging platform, LinkedIn provides a built-in template that comes up when you click on the orange “Publish a post” icon at your home screen. From there, it is easy to add a photo, draft an engaging headline, drop in the text and click Publish.

Blog posting through LinkedIn allows you to share quality content on a regular basis with a built-in audience and group of followers. You can share posts with specific groups or individual connections. Another bonus of the LinkedIn blogging tool is that the pages encourage two-way conversation and discussion. Each post is equipped with social-sharing buttons, so it’s easy for other users to share, like, repost and retweet across all social networking platforms. Unlike cumbersome email campaigns or formal alerts, you can easily point and click your way to becoming a thought-leader on specific topic. And, the tool catalogs all your posts in one area for easy reference.

LinkedIn Blogging Best Practices

Successful bloggers publish at least twice a month, and more frequently to accommodate new developments or interesting news. Content should be relevant, entertaining, engaging and brief. It should include a call to action. If at all possible, it should tell a story. But most importantly, you should write about topics that affect your clients and help to position you as a valuable resource.

In fact, according to Bloomberg’s Big Law Business Report, there seems to be a sea change among in-house counsel about how to handle client development. Fancy dinners and tickets to sporting events might be nice, but it’s also important to show that you have your finger on the pulse of the market and are watching (and can report on) trends. Blogging ticks this box.

It is also important to note that, as lawyers become more and more proficient on LinkedIn, they also need to be aware of the various state bar rules. While the ABA has not yet published comprehensive guidelines on social media usage, some state bars have, including New York.

In fact, in March 2015, the New York County Lawyers Association Professional Ethics Committee released an opinion recommending that attorneys in New York with LinkedIn profiles that include information about their practice areas, skills, endorsements or recommendations – essentially, anything more than the straightforward biographical information in their profiles – should now include attorney advertising statements at the end of the “Summary” section of their LinkedIn profiles, similar to “Attorney Advertising – Prior results do not guarantee a similar outcome.”

While this doesn’t mean that LinkedIn should be abandoned as a powerful networking tool, it just will require that attorneys periodically monitor and review the content of their LinkedIn profiles for accuracy and compliance with bar guidelines.

The Confluence of Content and Social Media

Lawyers and legal marketers seem to have an ever-growing number of marketing tools and tactics at their disposal. Technology has provided us with a number of new avenues to reach our desired audiences, but just using these channels is not enough. They have to be leveraged strategically.

Lawyers should take the time to populate their LinkedIn profiles with quality information that positively reflects their personal brands. They should also make it a habit to continually update their profiles to capture recent successes, promotions, organizational affiliations, pro bono activities and published articles. Finally, with the LinkedIn publishing tool, lawyers can maximize the benefits of the social network by crafting and distributing relevant thought leadership materials to a targeted audience of engaged professionals.

ARTICLE BY

Kathy O’Brien
Jaffe