The EU’s New Green Claims Directive – It’s Not Easy Being Green

Highlights

  • On March 22, 2023, the European Commission proposed the Green Claims Directive, which is intended to make green claims reliable, comparable and verifiable across the EU and protect consumers from greenwashing
  • Adding to the momentum generated by other EU green initiatives, this directive could be the catalyst that also spurs the U.S. to approve stronger regulatory enforcement mechanisms to crackdown on greenwashing
  • This proposed directive overlaps the FTC’s request for comments on its Green Guides, including whether the agency should initiate a rulemaking to establish enforceable requirements related to unfair and deceptive environmental claims. The deadline for comments has been extended to April 24, 2023

The European Commission (EC) proposed the Green Claims Directive (GCD) on March 22, 2023, to crack down on greenwashing and prevent businesses from misleading customers about the environmental characteristics of their products and services. This action was in response, at least in part, to a 2020 commission study that found more than 50 percent of green labels made environmental claims that were “vague, misleading or unfounded,” and 40 percent of these claims were “unsubstantiated.”

 

This definitive action by the European Union (EU) comes at a time when the U.S. is also considering options to curb greenwashing and could inspire the U.S. to implement stronger regulatory enforcement mechanisms, including promulgation of new enforceable rules by the Federal Trade Commission (FTC) defining and prohibiting unfair and deceptive environmental claims.

According to the EC, under this proposal, consumers “will have more clarity, stronger reassurance that when something is sold as green, it actually is green, and better quality information to choose environment-friendly products and services.”

Scope of the Green Claims Directive

The EC’s objectives in the proposed GCD are to:

  • Make green claims reliable, comparable and verifiable across the EU
  • Protect consumers from greenwashing
  • Contribute to creating a circular and green EU economy by enabling consumers to make informed purchasing decisions
  • Help establish a level playing field when it comes to environmental performance of products

The related proposal for a directive on empowering consumers for the green transition and annex, referenced in the proposed GCD, defines the green claims to be regulated as follows:

“any message or representation, which is not mandatory under Union law or national law, including text, pictorial, graphic or symbolic representation, in any form, including labels, brand names, company names or product names, in the context of a commercial communication, which states or implies that a product or trader has a positive or no impact on the environment or is less damaging to the environment than other products or traders, respectively, or has improved their impact over time.”

The GCD provides minimum requirements for valid, comparable and verifiable information about the environmental impacts of products that make green claims. The proposal sets clear criteria for companies to prove their environmental claims: “As part of the scientific analysis, companies will identify the environmental impacts that are actually relevant to their product, as well as identifying any possible trade-offs to give a full and accurate picture.” Businesses will be required to provide consumers information on the green claim, either with the product or online. The new rule will require verification by independent auditors before claims can be made and put on the market.

The GCD will also regulate environmental labels. The GCD is proposing to establish standard criteria for the more than 230 voluntary sustainability labels used across the EU, which are currently “subject to different levels of robustness, supervision and transparency.” The GCD will require environmental labels to be reliable, transparent, independently verified and regularly reviewed. Under the new proposal, adding an environmental label on products is still voluntary. The EU’s official EU Ecolabel is exempt from the new rules since it already adheres to a third-party verification standard.

Companies based outside the EU that make green claims or utilize environmental labels that target the consumers of the 27 member states also would be required to comply with the GCD. It will be up to member states to set up the substantiation process for products and labels’ green claims using independent and accredited auditors. The GCD has established the following process criteria:

  • Claims must be substantiated with scientific evidence that is widely recognised, identifying the relevant environmental impacts and any trade-offs between them
  • If products or organisations are compared with other products and organisations, these comparisons must be fair and based on equivalent information and data
  • Claims or labels that use aggregate scoring of the product’s overall environmental impact on, for example, biodiversity, climate, water consumption, soil, etc., shall not be permitted, unless set in EU rules
  • Environmental labelling schemes should be solid and reliable, and their proliferation must be controlled. EU level schemes should be encouraged, new public schemes, unless developed at EU level, will not be allowed, and new private schemes are only allowed if they can show higher environmental ambition than existing ones and get a pre-approval
  • Environmental labels must be transparent, verified by a third party, and regularly reviewed

Enforcement of the GCD will take place at the member state level, subject to the proviso in the GCD that “penalties must be ‘effective, proportionate and dissuasive.’” Penalties for violation range from fines to confiscation of revenues and temporary exclusion from public procurement processes and public funding. The directive requires that consumers should be able to bring an action as well.

The EC’s intent is for the GCD to work with the Directive on Empowering the Consumers for the Green Transition, which encourages sustainable consumption by providing understandable information about the environmental impact of products, and identifying the types of claims that are deemed unfair commercial practices. Together these new rules are intended to provide a clear regime for environmental claims and labels. According to the EC, the adoption of this proposed legislation will not only protect consumers and the environment but also give a competitive edge to companies committed to increasing their environmental sustainability.

Initial Public Reaction to the GCD and Next Steps

While some organizations, such as the International Chamber of Commerce, offered support, several interest groups quickly issued public critiques of the proposed GCD. The Sustainable Apparel Coalition asserted that: “The Directive does not mandate a standardized and clearly defined framework based on scientific foundations and fails to provide the legal certainty for companies and clarity to consumers.”

ECOS lamented that “After months of intense lobbying, what could have been legislation contributing to providing reliable environmental information to consumers was substantially watered down,” and added that “In order for claims to be robust and comparable, harmonised methodologies at the EU level will be crucial.” Carbon Market Watch was disappointed that “The draft directive fails to outlaw vague and disingenuous terms like ‘carbon neutrality’, which are a favoured marketing strategy for companies seeking to give their image a green makeover while continuing to pollute with impunity.”

The EC’s proposal will now go to the European Parliament and Council for consideration. This process usually takes about 18 months, during which there will be a public consultation process that will solicit comments, and amendments may be introduced. If the GCD is approved, each of the 27 member states will have 18 months after entry of the GCD to adopt national laws, and those laws will become effective six months after that. As a result, there is a reasonably good prospect that there will be variants in the final laws enacted.

Will the GCD Influence the U.S.’s Approach to Regulation of Greenwashing?

The timing and scope of the GCD is of no small interest in the U.S., where regulation of greenwashing has been ramping up as well. In May 2022, the Securities and Exchange Commission (SEC) issued the proposed Names Rule and ESG Disclosure Rule targeting greenwashing in the naming and purpose of claimed ESG funds. The SEC is expected to take final action on the Names Rule in April 2023.

Additionally, as part of a review process that occurs every 10 years, the FTC is receiving comments on its Green Guides for the Use of Environmental Claims, which also target greenwashing. However, the Green Guides are just that – guides that do not currently have the force of law that are used to help interpret what is “unfair and deceptive.”

It is particularly noteworthy that the FTC has asked the public to comment, for the first time, on whether the agency should initiate a rulemaking under the FTC Act to establish independently enforceable requirements related to unfair and deceptive environmental claims. If the FTC promulgates such a rule, it will have new enforcement authority to impose substantial penalties.

The deadline for comments on the Green Guides was recently extended to April 24, 2023. It is anticipated that there will be a substantial number of comments and it will take some time for the FTC to digest them. It will be interesting to watch the process unfold as the GCD moves toward finalization and the FTC decides whether to commence rulemaking in connection with its Green Guide updates. Once again there is a reasonable prospect that the European initiatives and momentum on green matters, including the GCD, could be a catalyst for the US to step up as well – in this case to implement stronger regulatory enforcement mechanisms to crackdown on greenwashing.

Article By Bruce White of Barnes & Thornburg LLP

For more environmental legal news, click here to visit the National Law Review.

© 2023 BARNES & THORNBURG LLP

Consumer Fraud PFAS Lawsuits Update: Two Cases Dismissed

On several instances, we have written regarding consumer fraud PFAS class action lawsuits filed in several states. The number of product types targeted for these lawsuits are growing and diverse in terms of the industries targeted. While there has been at least one significant settlement in these lawsuits to date, recently two of the lawsuits that we previously reported on related to PFAS consumer fraud allegations were dismissed by separate courts.

While it is too early to say that these dismissals are a preview of a coming trend in the litigation, the rulings at least provide companies with assurance that there are defenses available in these cases. Nevertheless, with the number of consumer fraud lawsuits likely to continue increasing for the time being, consumer goods industries, insurers, and investment companies interested in the consumer goods vertical must pay careful attention to these lawsuits.

Consumer Fraud PFAS Lawsuits – Overview

The consumer fraud PFAS lawsuits filed to date follow a very similar pattern: various plaintiffs bringing suit on behalf of a proposed class allege that companies market consumer goods as safe, healthy, environmentally friendly, etc., or that the companies themselves market their corporate practices as such, yet it is allegedly discovered that certain products marketed with these buzzwords contain PFAS. The lawsuits allege that since certain PFAS may be harmful to human health and PFAS are biopersistent (and therefore environmentally unfriendly), the companies making the good engaged in fraud against consumers to entice them to purchase the products in question.

In the Complaints, plaintiffs typically allege the following counts:

  • Violation of state consumer protection laws and the federal Magnuson-Moss Warranty Act
  • Violations of various state consumer protection laws
  • Breach of warranty
  • Fraud
  • Constructive fraud
  • Unjust enrichment

The plaintiffs seek certification of nationwide class action lawsuits, with a subclass defined as consumers in the state in which the lawsuits are filed. In addition, the lawsuits seeks damages, fees, costs, and a jury trial. Representative industries and cases that have recently been filed include:

  • Cosmetics industry:
    • Brown v. Cover Girl, New York (April 1, 2022)
    • Anderson v. Almay, New York (April 1, 2022)
    • Rebecca Vega v. L’Oreal, New Jersey (April 8, 2022)
    • Spindel v. Burt’s Bees, California (March 25, 2022)
    • Hicks and Vargas v. L’Oreal, New York (March 9, 2022)
    • Davenport v. L’Oreal, California (February 22, 2022)
  • Food packaging industry:
    • Richburg v. Conagra Brands, Illinois (May 6, 2022)
    • Ruiz v. Conagra Brands, Illinois (May 6, 2022)
    • Hamman v. Cava Group, California (April 27, 2022)
    • Azman Hussain v. Burger King, California (April 11, 2022)
    • Little v. NatureStar, California (April 8, 2022)
    • Larry Clark v. McDonald’s, Illinois (March 28, 2022)
  • Food and drink products:
    • Bedson v. Biosteel, New York (January 27, 2023)
    • Lorenz v. Coca-Cola, New York (December 28, 2022)
    • Toribio v. Kraft Heinz, Illinois (November 29, 2022)
  • Apparel products:
    • Krakauer v. REI, Washington (October 28, 2022)
  • Hygiene products:
    • Esquibel v. Colgate-Palmolive Co., New York (January 27, 2023)
    • Dalewitz v. Proctor & Gamble, New York (August 26, 2022)
  • Feminine hygiene products:
    • Gemma Rivera v. Knix Wear Inc., California (April 4, 2022)
    • Blenis v. Thinx, Inc., Massachusetts (June 18, 2021)
    • Destini Canan v. Thinx Inc., California (November 12, 2020)

Recent Rulings In Consumer Fraud PFAS Cases

In California, the Yeraldinne Solis v. CoverGirl Cosmetics et al. case made allegations that cosmetics were marketed as safe and sustainable, yet were found to contain PFAS. The defendants in the lawsuit filed a Motion to Dismiss, arguing in relevant part that the plaintiff had no standing to file the lawsuit because she did not sufficiently allege that she suffered any economic harm from purchasing the product. The plaintiff put forth two theories to counter this argument: (1) the “benefit of the bargain” theory, under which the plaintiff alleged that she bargained for a product that was “safe”, but received the opposite. The court dismissed this argument because the product packaging did not market the product as safe, and the ingredient list explicitly named the type of PFAS found in testing; and (2) an overpayment theory, under which plaintiff alleged that if she knew the product contained PFAS, she would not have paid as much for it as she did. The Court dismissed this argument because the product packaging specifically listed the type of PFAS at issue in the case.

In Illinois, the Richburg v. Conagra Brands, Inc. alleged that popcorn packaging was marketed as containing “only real ingredients” and ingredients from “natural sources”, yet the popcorn contained PFAS (likely from the packaging itself), which was allegedly false and misleading to consumers. The defendant moved to dismiss the lawsuit on several grounds and the Court found in defendant’s favor on one important ground. The Court held that the statements on the popcorn packaging would not mislead an ordinary and reasonable consumer because a consumer would understand “ingredients” to mean those items that are required to be disclosed by the FDA and not materials that may have migrated to the food from the product packaging. In fact, the Court ruled that the FDA “exempts substances migrating to food from equipment or packaging;” and those “do not need to be included in the ingredients list.”  The defendant argued that reasonable consumers would not consider PFAS to be an “ingredient” under this regime.  In other words, whether or not PFAS migrated into the popcorn, the representations that the popcorn contained “only real ingredients” and “100% ingredients from natural sources” were “correct as a matter of law.” The court dismissed plaintiffs claims on this basis.

Conclusion

Several major companies now find themselves embroiled in litigation focused on PFAS false advertising, consumer protection violations, and deceptive statements made in marketing and ESG reports. The lawsuits may well serve as test cases for plaintiffs’ bar to determine whether similar lawsuits will be successful in any (or all) of the fifty states in this country. Companies must consider the possibility of needing to defend lawsuits involving plaintiffs in all fifty states for products that contain PFAS. It should be noted that these lawsuits would only touch on the marketing, advertising, ESG reporting, and consumer protection type of issues. Separate products lawsuits could follow that take direct aim at obtaining damages for personal injury for plaintiffs from consumer products. In addition, environmental pollution lawsuits could seek damage for diminution of property value, cleanup costs, and PFAS filtration systems if drinking water cleanup is required.

While the above rulings are encouraging for companies facing consumer fraud PFAS lawsuits, it is far too early to tell if the trend will continue nationally.  Different courts apply legal standards differently and these cases are very fact specific, which could lead to differing results.

It is of the utmost importance that businesses along the whole supply chain in the consumer products industry evaluate their PFAS risk. Public health and environmental groups urge legislators to regulate PFAS at an ever-increasing pace. Similarly, state level EPA enforcement action is increasing at a several-fold rate every year. Now, the first wave of lawsuits take direct aim at the consumer products industry. Companies that did not manufacture PFAS, but merely utilized PFAS in their manufacturing processes, are therefore becoming targets of costly enforcement actions at rates that continue to multiply year over year. Lawsuits are also filed monthly by citizens or municipalities against companies that are increasingly not PFAS chemical manufacturers.

Article By John Gardella of CMBG3 Law

For more environmental legal news, click here to visit the National Law Review.

©2023 CMBG3 Law, LLC. All rights reserved.

Inflation’s Effect on Taxes – The Good and the Bad

Many federal tax provisions are adjusted for inflation annually, but not all. Rising inflation may result in lower tax bills for many taxpayers in 2023. Unfortunately, the impacts of inflation on taxpayers will not lower their 2022 tax bills even though inflation is at the highest level in the past 40 years.

The standard deduction is indexed for inflation. In 2023, for married couples filing joint tax returns, the standard deduction increased by $1,800 to $27,700; and for single taxpayers the standard deduction increased by $900 to $13,850.

The tax rates for individual tax filers have not changed (with the highest tax rate remaining at 37%), but the income levels have increased between the brackets. For example, in 2023, the 32% tax bracket starts at $364,200 for married couples filing jointly (up from $340,100 in 2022); and the 35% bracket for married couples filing jointly starts at $462,500 (up from $331,900 in 2022).

Estates of decedents who die in 2023 will have an estate tax exemption of $12,920,000 (up from $12,060,000 in 2022). The gift tax exclusions also increased to the same amounts and the annual gift exclusion increased to $17,000 per donee, which allows a married couple to gift $34,000 using their annual exclusion with no limit on the number of donees.

Social security recipients will enjoy an 8.7% increase in their monthly benefits in 2023 compared to 2022.

Other increases, as a result of rising inflation, include higher maximum contributions to retirement plans, health savings accounts and flexible spending accounts.

Inflation will impact taxpayers, employees and employers negatively as well. Employees, employers and self-employed individuals will be subject to social security taxes on earnings of $160,200 (up from $147,000 in 2022).

The limitation on itemized deduction for state and local tax has not increased, although state and local taxes have generally increased and the personal exemption continues to remain at zero. Finally, there has been no reduction in the long-term capital gains tax rate or increase in the deduction for capital losses which remains limited to $3,000 per year in excess of capital gains.

Article By Edwin I. Josephson of Chuhak & Tecson, P.C.

For more tax legal news, click here to visit the National Law Review.

© 2023 Chuhak & Tecson P.C.

Sexual Harassment Prevention Training Deadline Approaches for Chicago Employers

As a reminder to employers in Chicago, anti-sexual harassment training is required by Chicago’s Human Rights Ordinance and must be completed by July 1, 2023.  This requirement applies to all Chicago employers, regardless of size or industry.

The training consists of one (1) hour of anti-sexual harassment training for all non-supervisory employees and two (2) hours of anti-sexual harassment training for supervisory employees.  Regardless of supervisory status, all employees must also undergo one (1) hour of bystander training.  Employers must provide training on an annual basis.  Additional information about training requirements can be found here. Employers who fail to comply may be subject to penalties.

Article By Audrey H. Shinn of Vedder Price

© 2023 Vedder Price

Privacy Tip #358 – Bank Failures Give Hackers New Strategy for Attacks

Hackers are always looking for the next opportunity to launch attacks against unsuspecting victims. According to Cybersecurity Dive, researchers at Proofpoint recently observed “a phishing campaign designed to exploit the banking crisis with messages impersonating several cryptocurrencies.”

According to Cybersecurity Dive, cybersecurity firm Arctic Wolf has observed “an uptick in newly registered domains related to SVB since federal regulators took over the bank’s deposits…” and “expects some of those domains to serve as a hub for phishing attacks.”

This is the modus operandi of hackers. They use times of crises, when victims are vulnerable, to launch attacks. Phishing campaigns continue to be one of the top risks to organizations, and following the recent bank failures, everyone should be extra vigilant of urgent financial requests and emails spoofing financial institutions, and take additional measures, through multiple levels of authorization, when conducting financial transactions.

We anticipate increased activity following these recent financial failures attacking individuals and organizations. Communicating the increased risk to employees may be worth consideration.

Article By Linn F. Freedman of Robinson & Cole LLP

For more communications, media, and internet legal news, click here to visit the National Law Review.

Copyright © 2023 Robinson & Cole LLP. All rights reserved.

How to Succeed in Environmental Marketing Claims

Environmental marketing claims often present something of a Catch-22—companies that are doing actual good for the environment deserve to reap the benefits of their efforts, and consumers deserve to know, while at the same time, heightened scrutiny from the Federal Trade Commission (FTC), the National Advertising Division (NAD), state regulators and the plaintiffs’ bar have made such claims increasingly risky.

In 2012, the FTC issued the Green Guides for the use of environmental marketing claims to protect consumers and to help advertisers avoid deceptive environmental marketing. Compliance with the Green Guides may provide a safe harbor from FTC enforcement, and from liability under state laws, such as California’s Environmental Marketing Claims Act, that incorporate the Green Guides. The FTC has started a process to revise the Green Guides, including a request for comments about the meaning of “sustainable.” In the meantime, any business considering touting the environmental attributes of its products should consider the following essential takeaways from the Green Guides in their current form:

    • Substantiation: Substantiation is key! Advertisers should have a reasonable basis for their environmental claims. Substantiation is the support for a claim, which helps ensure that the claim is truthful and not misleading or deceptive. Among other things, substantiation requires documentation sufficient to verify environmental claims.
    • General benefit claims: Advertisers should avoid making unqualified claims of general benefit because substantiation is required for each reasonable interpretation of the claim. The more narrowly tailored the claim, the easier it is to substantiate.
    • Comparative claims: Advertisers should be careful and specific when making comparative claims. For example, a claim that states “20% more recycled content” begs the question: “compared to what?” A prior version of the same product? A competing product? Without further detail, the advertiser would be responsible for the reasonable interpretation that the product has 20% more recycled content than other brands, as well as the interpretation that the product has 20% more recycled content than the advertiser’s older products.
    • General greenwashing terms: Advertisers should be very cautious when using general environmental benefit terms such as “eco-friendly,” “sustainable,” “green,” and “planet-friendly.” Those kinds of claims feature prominently in many complaints alleging greenwashing, and they should only be used where the advertiser knows and explains what the term means, and can substantiate every reasonable interpretation of the claim.

Putting it into Practice: Given the scrutiny that environmental claims tend to attract, advertisers should exercise care when making environmental benefit claims about their products and services. They should narrowly tailor their claims to the specific environmental attributes they want to promote, and perhaps most important, they should ensure they have adequate backup to substantiate their claims. While the FTC Green Guides are due for a refresh (which we will surely report on), for the time being, they will continue to serve as important guidance for advertisers seeking to inform consumers without exposing their business to FTC scrutiny or class action litigation.

To AI or Not to AI: U.S. Copyright Office Clarifies Options

The U.S. Copyright Office has weighed in with formal guidance on the copyrightability of works whose generation included the use of artificial intelligence (AI) tools. The good news for technology-oriented human creative types: using AI doesn’t automatically disqualify your work from copyright protection. The bad news for independent-minded AI’s: you still don’t qualify for copyright protection in the United States.

On March 16, 2023, the Copyright Office issued a statement of policy (“Policy”) to clarify its practices for examining and registering works that contain material generated by the use of AI and how copyright law’s human authorship requirements will be applied when AI was used. This Policy is not itself legally binding or a guarantee of a particular outcome, but many copyright applicants may breathe a sigh of relief that the Copyright Office has formally embraced AI-assisted human creativity.

The Policy is just the latest step in an ongoing debate over the copyrightability of machine-assisted products of human creativity. Nearly 150 years ago, the Supreme Court ruled at photographs are copyrightable. See Burrow-Giles Lithographic Company v. Sarony, 111 U.S. 53 (1884). The case involved a photographer’s claim against a lithographer for 85,000 unauthorized copies of a photograph of Oscar Wilde. The photo, Sarony’s “Oscar Wilde No. 18,” is shown below:

Sarony’s “Oscar Wilde No. 18"

The argument against copyright protection was that a photograph is “a reproduction, on paper, of the exact features of some natural object or of some person” and is therefore not a product of human creativity. Id. at 56. The Supreme Court disagreed, ruling that there was sufficient human creativity involved in making the photo, including posing the subject, evoking the desired expression, arranging the clothing and setting, and managing the lighting.

In the mid-1960’s, the Copyright Office rejected a musical composition, Push Button Bertha, that was created by a computer, reasoning that it lacked the “traditional elements of authorship” as they were not created by a human.

In 2018, the U.S. Court of Appeals for the Ninth Circuit ruled that Naruto, a crested macaque (represented by a group of friendly humans), lacked standing under the Copyright Act to hold a copyright in the “monkey selfie” case. See Naruto v. Slater, 888 F.3d 418 (9th Cir. 2018). The “monkey selfie” is below:

Monkey Selfie

In February 2022, the Copyright Office rejected a registration (filed by interested humans) for a visual image titled “A Recent Entrance to Paradise,” generated by DABUS, the AI whose claimed fractal-based inventions are the subject of patent applications around the world. DABUS’ image is below:

“A Recent Entrance to Paradise”

Litigation over this rejected application remains pending.

And last month, the Copyright Office ruled that a graphic novel consisting of human-authored text and images generated using the AI tool Midjourney could, as a whole, be copyrighted, but that the images, standing alone, could not. See U.S. Copyright Office, Cancellation Decision re: Zarya of the Dawn (VAu001480196) at 2 (Feb. 21, 2023).

The Copyright Office’s issuing the Policy was necessitated by the rapid and remarkable improvements in generative AI tools over even the past several months. In December 2022, generative AI tool Dall-E generated the following images in response to nothing more than the prompt, “portrait of a musician with a hat in the style of Rembrandt”:

Four portraits generated by AI tool Dall-E from the prompt, "portrait of a musician with a hat in the style of Rembrandt."

If these were human-generated paintings, or even photographs, there is no doubt that they would be copyrightable. But given that all four images were generated in mere seconds, with a single, general prompt from a human user, do they meet the Copyright Office’s criteria for copyrightability? The answer, now, is a clear “no” under the Policy.

However, the Policy opens the door to registering AI-assisted human creativity. The toggle points will be:

“…whether the ‘work’ is basically one of human authorship, with the computer [or other device] merely being an assisting instrument, or whether the traditional elements of authorship in the work (literary, artistic, or musical expression or elements of selection, arrangement, etc.) were actually conceived and executed not by man but by a machine.” 

In the case of works containing AI-generated material, the Office will consider whether the AI contributions are the result of “mechanical reproduction” or instead of an author’s “own original mental conception, to which [the author] gave visible form.” 

The answer will depend on the circumstances, particularly how the AI tool operates and how it was used to create the final work. This will necessarily be a case-by-case inquiry.” 

See Policy (citations omitted).

Machine-produced authorship alone will continue not to be registerable in the United States, but human selection and arrangement of AI-produced content could lead to a different result according to the Policy. The Policy provides select examples to help guide registrants, who are encouraged to study them carefully. The Policy, combined with near future determinations by the Copyright Office, will be critical to watch in terms of increasing likelihood a registration application will be granted as the Copyright Office continues to assess the impacts of new technology on the creative process. AI tools should not all be viewed as the “same” or fungible. The type of AI and how it is used will be specifically considered by the Copyright Office.

In the short term, the Policy provides some practical guidance to applicants on how to describe the role of AI in a new copyright application, as well as how to amend a prior application in that regard if needed. While some may view the Policy as “new” ground for the Copyright Office, it is consistent with the Copyright Office’s long-standing efforts to protect the fruits of human creativity even if the backdrop (AI technologies) may be “new.”

As a closing note, it bears observing that copyright law in the United Kingdom does permit limited copyright protection for computer-generated works – and has done so since 1988. Even under the U.K. law, substantial questions remain; the author of a computer-generated work is considered to be “the person by whom the arrangements necessary for the creation of the work are undertaken.” See Copyright, Designs and Patents Act (1988) §§ 9(3), 12(7) and 178. In the case of images generated by a consumer’s interaction with a generative AI tool, would that be the consumer or the generative AI provider?

Article By Nadia G. Aram and Dr. Christian E. Mammen of Womble Bond Dickinson (US) LLP

For more intellectual property legal news, click here to visit the National Law Review.

Copyright © 2023 Womble Bond Dickinson (US) LLP All Rights Reserved.

Health Care Immigration: Alleviating the U.S. Nursing Shortage

The nursing shortage has been a persistent problem in the United States for decades, with experts predicting it will only worsen in the coming years. Many factors contribute to the nursing shortage, including an aging population, the retirement of experienced nurses, and an increasing demand for healthcare services. One potential solution to the shortage is immigration law, which can help bring in qualified nurses from other countries to work in the United States.

The nursing shortage is a complex issue that affects the entire healthcare system. Nurses play a crucial role in providing high-quality care to patients, and their absence can have serious consequences for patient outcomes. According to McKinsey, the United States may have a gap of between 200,000 to 450,000 nurses available for direct patient care by 2025. This shortage is not limited to registered nurses; there is also a shortage of licensed practical nurses, nurse practitioners, and other healthcare professionals.

One way to address the nursing shortage is to attract qualified nurses from other countries. The United States has a long history of welcoming immigrants from all over the world, including healthcare professionals.

Employment Immigration Sponsorship to Meet U.S. Nursing Demands

Several immigration options are available for nurses who wish to work in the United States. The most common options are the H-1B visa, the TN visa, and the EB-3 visa:

  • The H-1B visa is a non-immigrant visa that allows employers to temporarily hire foreign workers in specialty occupations. Registered nurses qualify as workers in a specialty occupation, so they are eligible. The H-1B visa is valid for up to three years and can be extended for an additional three years. However, there is a cap on the number of H-1B visas issued each year and the competition for these visas is often high.
  • The TN visa is a non-immigrant visa available to Canadian and Mexican citizens under the North American Free Trade Agreement (NAFTA). Nurses who are citizens of Canada or Mexico and have the necessary qualifications can apply for the TN visa to work in the United States. The visa is valid for up to three years and can be renewed indefinitely.
  • The EB-3 visa is an immigrant visa available to foreign workers in skilled or unskilled positions. Nurses qualify as skilled workers and can apply for the EB-3 visa. The visa requires an employer to sponsor the nurse, who must have a permanent job offer in the United States. The EB-3 visa is subject to a lengthy application process and may take several years to obtain.

In addition to these options, certain state-specific programs allow foreign nurses to work in those states. For example, the Health Professional Shortage Area (HPSA) program allows foreign nurses to work in areas with a shortage of healthcare professionals. The Conrad State 30 program allows foreign nurses to work in certain states for up to three years if they agree to work in underserved areas.

It is important to note that each immigration option has its own set of requirements and limitations. Nurses who are interested in working in the United States and health care providers seeking foreign talent must consult with an experienced immigration attorney to determine the best option for their specific situation.

Overall, immigration law provides options for foreign nurses who wish to work in the United States. As they take advantage of these options, the nursing shortage in the United States can be alleviated, and patients can receive the high-quality care they need and deserve.

Immigration Policy Updates are Critical to Close the Nursing Shortage Gap

While there exist many employment immigration visas that help alleviate the pressure of the ongoing nursing shortage on the health care industry, immigration laws, regulations, and administrative policies can make it difficult for foreign nurses to work in the United States. Strategic updates to these laws, regulations, and administrative policies are critical to permit foreign nurses to enter the nursing labor market.

One change is to streamline the visa process for foreign nurses. Currently, the process of obtaining a visa to work in the United States can be time-consuming and complicated. Many foreign nurses face significant barriers such as language proficiency exams, educational requirements, and visa quotas. By simplifying the visa process and reducing these barriers, the United States could recruit more foreign nurses to work here.

Another change is to provide incentives for foreign nurses to come to the United States. For example, the government could offer financial assistance to help them cover the cost of their relocation and provide support services to help them adjust to their new home. Additionally, employers could offer signing bonuses, tuition reimbursement, and other benefits to attract foreign nurses.

Finally, immigration agencies can develop partnerships with other countries to increase the number of nurses trained abroad. Many countries, particularly developing nations, have large numbers of qualified nurses who are unable to find work in their home countries. By partnering with these countries, the United States could help train more nurses and provide them with opportunities to work in the United States.

The nursing shortage is a serious problem that requires innovative solutions. Immigration law already plays a crucial role in addressing the shortage. This role, however, can grow through streamlining the visa process, providing incentives for foreign nurses to come to the United States, and creating partnerships with other countries.

Article By Raymond G. Lahoud of Norris McLaughlin P.A.

For more immigration legal news, click here to visit the National Law Review.

©2023 Norris McLaughlin P.A., All Rights Reserved

H2 Production: A Shift Towards Electrolysis

Hydrogen production technology, according to the joint EPO-IEA report summarizing patent trends in the hydrogen economy (summarized here), accounts for the largest percentage of patenting activity since 2011 among the three primary stages of the hydrogen value chain (i.e., (i) production, (ii) storage, distribution, and transformation, and (iii) end-use industrial applications). Trends show a shift in hydrogen production from carbon-intensive methods to technologies that do not rely on fossil fuels. The bulk of recent increased patent activity is directed to electrolysis development, while patent activity related to production from biomass and waste has decreased.

Electrolysis

Electrolysis is attractive because it’s a low-emission source, meaning that hydrogen produced through electrolysis creates little to no greenhouse gas emissions. It is possible that water electrolyzers are powered by electricity derived from natural gas or fossil fuels, but unlike most other hydrogen production technology, electrolyzers do not produce greenhouse gas emissions and thereby offer the ability to produce hydrogen with net zero carbon emissions.

In this article, we will first briefly explain electrolysis and conventional concepts using electrolysis. Then, we will give an example of a technology that recently emerged from conventional electrolysis-based solutions. We will close with a brief description of alternative technologies for hydrogen production.

State of the Art

Electrolyzers use electricity to split water into hydrogen and oxygen. Specifically, an electrolyzer cell includes an anode and a cathode separated by a polymer electrolyte membrane. Water reacts at the anode to form oxygen and positively charged hydrogen ions. The hydrogen ions selectively move across the membrane to the cathode, where they combine with electrons from an external circuit to form hydrogen gas. A number of cells are assembled into a cell stack that efficiently produces hydrogen and oxygen. A standard electrolyzer stack includes membrane electrode assemblies, current collectors, and separator or bipolar plates.

Electrolyzers also range in size and type. Electrolyzer sizes range from small, appliance-size units to large-scale, central production facilities. Electrolyzer types include polymer electrolyte membrane (PEM) electrolyzers, alkaline electrolyzers, and solid oxide electrolyzers. Conventional electrolyzer stacks have capacities of 5 MW to 100 MW per stack, depending primarily on the membrane technology.

Emerging Technologies

EvolOh is a California-based startup planning to build the world’s largest hydrogen manufacturing plant in Massachusetts this year to manufacture its anion-exchange membrane (AEM) electrolyzers. The plant will be used for fabrication and assembly of the AEM electrolyzer stacks for producing green hydrogen1. These compact and high-power density electrolyzer stacks should allow for high-speed manufacturing using low-cost materials based on domestic supply chain and no precious metals. With anticipated power ratings of up to 5 MW for a single stack and 50 MW for a single module, EvolOH’s stacks are intended to be designed for large-scale facilities.

As disclosed in EvolOH’s IP, its electrolyzer stack features a bipolar plate assembly including a bipolar plate, a hydrogen seal, a water seal, and a fluid distribution frame. The fluid distribution frame serves multiple purposes within the electrolyzer stack, including containing a cathode flow field, distributing water flow from one water delivery window to a leading edge of the anode flow field, collecting water and oxygen flow from the anode flow field and distributing the flows to oxygen collection windows, and engaging and curing hydrogen seal between the frame and a bipolar plate adjacent to the cathode flow field and a water seal between the frame and a bipolar plate adjacent to the anode flow field.2 In contrast to conventional bipolar plates that include simple flow distribution channels, the bipolar plate assembly of the EvolOH electrolyzer stack is intended to provide for a scalable electrolysis cell that can be utilized in a variety of electrolyzer types.

Also as described in EvolOH’s IP, its electrolyzer stack includes a compression system having a lower wrap and an upper wrap connected at a joint to form a continuous vertical tension boundary around the cell stack and its end units while providing access to opposite lateral ends of the stack.3 Conventional electrolyzer stacks may apply a compressive load on the cell stack using end structural plates drawn together by tie rods and adjustable elements such as screws, nuts, and springs. Unlike the conventional tie rod compression, the compressive system of EvolOH’s electrolyzer stack is intended to maintain adequate compression on the stack over a range of temperatures taking into account thermal expansion and compression.

EvolOH is among many companies focused on the development of electrolyzer technology to scale-up hydrogen to reach a broader market. For example, Air Liquide and Siemens Energy recently teamed up to form a joint venture last year to produce large-scale hydrogen electrolyzers in Europe. Set to open in 2023, they intend to produce a large-scale electrolyzer with an intended capacity of 100 MW that may reduce costs per kW by 33% by 2030. The EPO-IEA study finds that Siemens is one of the leading applicants in electrolyzer patent families since 2011 and that Air Liquide is a top applicant in patent families directed to established hydrogen production technologies as well as hydrogen storage and distribution technologies.

Alternative Hydrogen Production Options

In addition to electrolysis, hydrogen can be produced from other methods such as biomass or waste via gasification or pyrolysis, recovery of by-product hydrogen from chlor-alkali electrolysis, and methane pyrolysis. Hydrogen can be produced from natural gas through methods such as steam reforming, which emits carbon dioxide in the process. Widespread natural gas infrastructure makes hydrogen production from natural gas appealing, and developments in carbon capture, utilization, and storage technology may make this option even more appealing.

In our next post on the EPO-IEA’s report, “Hydrogen Patents for a Clean Energy Future: A Global Trend Analysis of Innovation Along Hydrogen Value Chains,” we will dive into the second technology segment of the hydrogen value chain—hydrogen storage, distribution, and transformation.

Article By Jason A. Engel, Dr. Benjamin Fechner, and Clare Frederick of K&L Gates

For more energy and environment legal news, click here to visit the National Law Review.

Copyright 2023 K & L Gates

Lawyer Bot Short-Circuited by Class Action Alleging Unauthorized Practice of Law

Many of us are wondering how long it will take for ChatGPT, the revolutionary chatbot by OpenAI, to take our jobs. The answer: perhaps, not as soon as we fear!

On March 3, 2023, Chicago law firm Edelson P.C. filed a complaint against DoNotPay, self-described as “the world’s first robot lawyer.” Edelson may have short-circuited the automated barrister’s circuits by filing a lawsuit alleging the unauthorized practice of law.

DoNotPay is marketed as an AI program intended to assist users in need of legal services, but who do not wish to hire a lawyer. The organization was founded in 2015 to assist users in disputing parking tickets. Since then, DoNotPay’s services have expanded significantly. The company’s website offers to help users fight corporations, overcome bureaucratic obstacles, locate cash and “sue anyone.”

In spite of those lofty promises, Edelson’s complaint counters by pointing out certain deficiencies, stating, “[u]nfortunately for its customers, DoNotPay is not actually a robot, a lawyer, or a law firm. DoNotPay does not have a law degree, is not barred in any jurisdiction and is not supervised by any lawyer.”

The suit was brought by plaintiff Jonathan Faridian, who claims to have used DoNotPay for legal drafting projects, demand letters, one small claims court filing and drafting an employment discrimination complaint. Faridian’s complaint explains he was under the impression that he was purchasing legal documents from an attorney, only to later discover that the “substandard” outcomes generated did not comport with his expectations.

When asked for comment, DoNotPay’s representative denied Faridian’s allegations, explaining the organization intends to defend itself “vigorously.”

Article By Troy J. Chinnici of Wilson Elser Moskowitz Edelman & Dicker LLP

For more communications, media, and internet legal news, click here to visit the National Law Review.

© 2023 Wilson Elser

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