Tag: COVID-19

Department of Banking and Insurance Mandates Insurance Premium Refunds

On May 12, 2020, the New Jersey Department of Banking and Insurance issued Bulletin No. 20-22.  As a result of the COVID-19 pandemic and the resulting reduction in loss exposure for insurers, the Department has ordered insurers to make an initial premium refund or other adjustment for certain specified lines of insurance.  Premium refunds are required for the following types of insurance: (1) medical malpractice insurance; (2) commercial liability insurance; (3) commercial multiple-peril insurance; (4) workers compensation insurance; (5) commercial automobile insurance; (6) private passenger automobile insurance; and (7) any other line of coverage where the measures of risk have become substantially overstated as a result of the COVID-19 pandemic.

The premium refund may be provided as a premium credit, a reduction in premium, a return of premium, dividend, or other appropriate premium adjustment.  The premium refunds must be implemented “as quickly as practicable,” but in no event later than June 15, 2020.

Insurers may also provide additional premium relief to individual policyholders on a case-by-case basis for recent, current, and upcoming policy periods or any portion thereof.  Examples of reclassifications set forth in the Bulletin include, but are not limited to: (1) reclassifying a personal automobile exposure from “commute use” to “pleasure use”; (2) reclassifying a physician practice to part-time status; or (3) excluding payroll for employees who are being paid but not actively working.

Insurers are required to notify each affected policyholder no later than June 15, 2020 regarding the amount of the refund or adjustment.  In addition, insurers are required to provide an explanation of the basis for the adjustment, including a description of the policy period that was the basis of the premium refund and any changes to the classification or exposure basis of the affected policyholder.

While the across the board initial premium refunds referenced above will not require any action by individual policyholders, businesses and individuals should review their current and projected activities and reach out to their insurer to see if there is an opportunity for an additional “case-by-case” premium reduction.  For example, if a physician practice has reduced hours for its physicians so that all physicians are working part-time, this may provide the opportunity for a further reduction in medical malpractice premiums.

The text of the bulletin can be found here.

 

© 2020 Giordano, Halleran & Ciesla, P.C. All Rights Reserved
For more on COVID-19s effects on Insurance, see the Insurance Reinsurance and Surety section of the National Law Review

Immigration and Compliance Briefing: COVID-19 Summary of Government Relief and Potential “Public Charge Rule” Impact on Nonimmigrant and Immigrant Visa Applications

Public Charge Rule

The “Public Charge Rule” implemented by the Department of Homeland Security (“DHS”) on February 24, 2020 mandates that certain individuals applying for U.S. immigration status are generally inadmissible into the U.S. if they are found likely to become a public charge at any time. Individuals inside or outside the U.S. who seek to either obtain Lawful Permanent Resident status (apply for immigrant visas and “green cards”) or to extend or change nonimmigrant status (temporary visas) must now demonstrate that they have not received public benefits, or have received limited public benefits, with some exceptions. This requires individuals to provide with their applications for immigration status additional detailed information regarding finances (such as income, assets, credit scores, bank accounts, taxes, debts, etc.). Public benefits received prior to February 24, 2020 will not weigh heavily against these individuals. Immigration case impact and processing trends are still being determined given the fairly recent implementation of the Public Charge Rule.

Available guidance notes that public benefits considered for a public charge determination include, but are not limited to, the following: any federal, state, local, or tribal cash assistance for income maintenance. Examples include Supplemental Security Income (SSI) and Cash Temporary Assistance for Needy Families (TANF), Supplemental Nutrition Assistance Program (SNAP), Section 8 Housing Assistance & Project-Based Rental Assistance, Public Housing; and Medicaid. In contrast, the following are not considered for a public charge determination: tax credits; unemployment benefits; disaster relief assistance; certain forms of nutritional support, including Special Supplemental Nutrition for Women Infants and Children (WIC) and school breakfast and lunch; and certain Medicaid benefits, including emergency medical care, school-based services and benefits, and Medicaid for individuals under 21 years of age.

As a reminder, many non-immigrants (temporary visa holders) are not eligible to receive public benefits. Eligibility for public benefits depends on immigration status, age, and other factors. Use of public benefits to which an individual is not entitled may have adverse immigration consequences beyond the public charge determination. All individuals should carefully review eligibility criteria prior to applying for and/or using public benefits.

COVID-19 Relief Measures

In response to COVID-19, the federal government has enacted broad economic relief policies. These measures include direct financial aid to families through tax credit rebates, expanded unemployment benefits and new relief programs as well as indirect aid through increased federal funding for businesses and healthcare providers. Generally, the use of disaster relief assistance will not impact a public charge determination for individuals seeking immigration benefits. However, the use of public benefits during COVID-19 can still be considered in the public charge analysis.

Healthcare Measures

Federal legislation passed in response to COVID-19 provides additional federal funding for COVID-related testing and treatment, including increased funding for Community Health Centers and for testing and treatment of uninsured and underinsured individuals. USCIS is encouraging anyone experiencing COVID-19 symptoms to seek medical treatment and/or preventative care. Seeking testing, prevention, or treatment of COVID-19 will not factor into a public charge determination for purposes of seeking an immigration benefit, even if the testing/prevention/treatment is federally funded. However, eligibility for Medicaid has not changed, and enrollment in Medicaid during COVID-19 may still be used as a factor for determining an immigration benefit under the Public Charge Rule.

Stimulus Bill Rebate Payments

The CARES Act authorized the federal government to issue one-time tax credit rebate payments to certain taxpaying individuals and households, including certain temporary nonimmigrants. Depending on income, eligible individuals can receive up to $1,200 while eligible households can receive up to $2,400. In addition, eligible individuals with children can receive $500 per dependent child under 17 years of age.

The rebate payments authorized by the CARES Act are considered tax credit payments, which will not factor into a public charge determination.  However, note the following:

  • Eligibility for tax-credit rebate payments depends on filing 2018 and/or 2019 taxes and tax residency status and requires all recipients to possess a valid social security number with limited exceptions for certain military households and adopted dependent children. This means that many mixed-status families (families with individuals in different immigration statuses) may not be eligible for the stimulus check.
  • Receiving tax credit payments in error may lead to an individual or household owing taxes, which could be used in a public charge determination for purposes of seeking an immigration benefit. It is very important that any individual receiving a tax credit rebate check ensure that they are in fact eligible to receive it.

Food and Nutritional Assistance

The Families First Act authorizes states to provide supplemental SNAP benefits to SNAP households and creates a new program, Pandemic EBT (“P-EBT”), authorizing states to provide meal assistance to children who are out of school due to COVID-19 and who would otherwise receive free or reduced school lunches. P-EBT is considered disaster relief assistance and will not factor into a Public Charge determination. However, eligibility for SNAP has not changed and enrollment in SNAP may still be used as a factor for determining an immigration benefit under the Public Charge Rule.

Unemployment Benefits

When individuals become unemployed through no fault of their own, they may qualify for relief through unemployment benefits. Unemployment benefits pay out a portion of an individual’s prior income while the individual is unemployed, and are administered by states with oversight from the Department of Labor (DOL). The benefits program is funded through taxes paid by employers. Although the federal government has set a few eligibility requirements, states are largely able to determine their own individual eligibility criteria and benefit levels for basic unemployment benefits.

While eligibility requirements for unemployment benefits vary by state, generally someone must be considered “able and available to work” before s/he is eligible to collect unemployment benefits. Since many temporary nonimmigrant work visas (such as H-1Bs and L-1s) require employer sponsorship prior to employment authorization, most people with these types of visas are not considered to be able and available to work. Individuals with other types of work authorization, such as an unrestricted EAD (Employment Authorization Document), may be eligible for unemployment benefits.

The CARES Act expands on basic unemployment benefits through three programs: Pandemic Unemployment Compensation (PUC), Pandemic Emergency Unemployment Compensation (PEUC), and Pandemic Unemployment Assistance (PUA). These programs increase coverage and availability, but eligibility criteria are still determined by individual states.   Some states have temporarily waived eligibility requirements due to COVID-19, including the able and available requirement. This waiver may expand the types of non-U.S. workers who qualify for unemployment benefits in those states. Additionally, some states have waived waiting periods and increased payments.

Unemployment benefits are considered earned benefits and will not factor into a public charge determination.

SBA Loans

COVID-19 relief packages provide funding for small businesses in the form of loans, interest relief for certain loans, and waivers of certain fees.  Certain non-U.S. citizens who own or share ownership in qualifying businesses may apply for an SBA (Small Business Administration) loan.

SBA loans are unlikely to impact a public charge determination because generally disaster relief programs are not considered in the analysis. Also, an SBA loan is granted to a company rather than to an individual, while a public charge determination focuses on an individual

Given that this is a rapidly changing situation, please also refer to the following online resources, and be sure to review the “last updated” date:

© 1998-2020 Wiggin and Dana LLP

For more on the public charge rule, see the National Law Review Immigration law section.

Sellers Beware – The COVID-19 Pandemic Has Opened the “Price-Gouging” Pandora’s Box

As the Covid-19 emergency goes on, both federal and New Jersey authorities have begun to enforce anti-price gouging and anti-hoarding provisions of federal and state law. A wide range of businesses, including but going beyond the sellers of medical equipment, should be aware of the limits imposed by these statutes and the dangers posed by enforcement.

A.        The New Jersey Consumer Fraud Act

As has been widely reported in the media, the State of New Jersey is aggressively enforcing the anti-price gouging provisions of the Consumer Fraud Act, N.J.S.A. 56:8-107 through 109, during the current coronavirus emergency. Enforcement of the statute by the Division of Consumer Affairs or by private civil action under the Consumer Fraud Act poses a risk to the sellers of a broad variety of goods. However, it also poses a potential remedy for business purchasers for end use whose ordinary supply chain has been disrupted by the emergency.

During a state of emergency declared by the Governor, N.J.S.A. 56:8-109 declares it to be an “unlawful commercial practice” for any person to sell or offer for sale “any merchandise which is consumed or used as a direct result of an emergency or which is consumed or used to preserve, protect, or sustain the life, health, safety or comfort of persons or their property for a price that constitutes an excessive price increase.”  In turn N.J.S.A. 56:8-108 defines an “excessive price increase” as more than 10 percent greater than the seller’s price in the usual course of business immediately before the declaration of emergency, unless the price increase is attributable either to the seller passing through increased prices from its supplier or costs imposed by the emergency. In that case, the statute defines an excess price increase as an increase of more than 10 percent beyond the seller’s customary pre-emergency markup.

The statutory language sweeps broadly and may be applied to price increases of almost any product where demand has increased or the supply chain has been disrupted by the coronavirus emergency. A recent news story reports that more than 3,600 complaints of alleged price-gouging have been made to the Attorney General’s Division of Consumer Affairs, against more than 2,100 business, involving not only medical supplies but food and commodities in short supply like toilet paper and disinfectants. The Division is urging the public to remain “vigilant” and is actively soliciting complaints on its website. As it investigates complaints, the Division is issuing subpoenas for the seller’s pre-emergency and current cost, price and markup information. The defense of passing through increased costs requires the seller to document both higher charges from suppliers and other costs, such as hazard pay for employees, imposed by the emergency.

Penalties for violation of the Consumer Fraud Act include civil penalties of up to $10,000 for a first offense. There are additional penalties if the violation was directed against senior citizens or persons with disabilities. In addition, the Attorney General may obtain an injunction against future violations. The courts may order restitution to consumers of money obtained in violation of the Act, and twice the amount obtained in the case of senior citizens. Failure to make restitution as ordered is punishable as contempt of court.

In addition to the enforcement powers of the Attorney General, N.J.S.A. 56:8-19 gives any person who has suffered an “ascertainable loss of moneys or property . . . as a result of any practice declared unlawful” under the Consumer Fraud Act as amended or supplemented a private right of action to recover treble damages and attorneys’ fees, either directly or as a counterclaim in a suit by the seller. No reported decision decides whether this private right of action would apply to a violation of the Act’s anti-price gouging provisions, but it is reasonable to anticipate that creative counsel are contemplating private class actions on behalf of retail purchasers.

The private right of action under the Consumer Fraud Act extends not only to individual consumers but to businesses that purchase supplies or equipment for use in the business. Hospitals, medical practices and other large scale purchasers of supplies and equipment affected by the coronavirus emergency may wish to explore that possibility.

B.        The Federal Defense Production Act

The Korean War vintage Defense Production Act (“DPA”) gives the President broad powers to direct the production of essential goods and to prioritize their distribution during periods of declared national emergency. Section 101 of the DPA, 50 U.S.C. § 4511, authorizes the President or his delegate to designate goods as scarce materials critical to the national defense. Section 102 of the Act, 50 U.S.C.§ 4512, the anti-hoarding provision, prohibits any person from accumulating “1) in excess of the reasonable demands of business, personal, or home consumption, or (2) for the purpose of resale at prices in excess of prevailing market prices, materials which have been designated by the President as scarce materials or materials the supply of which would be threatened by such accumulation.”  Designations are required to be published in the Federal Register. Section 103 of the DPA, 50 U.S.C. § 4513 makes the violation of § 102 a federal crime subject to a $10,000 fine and one year imprisonment. In addition § 706, 50 U.S.C. § 4556, authorizes the federal courts to enjoin violations of the DPA at the suit of the government. Other provisions, not relevant here, authorize the government to provide incentives and subsidies to increase production of essential goods.

The DPA is based on the War Powers Acts of World War II. It is designed to authorize the kind of command economy in place during that war, in which the armed forces were the sole end user, the government controlled production by placing contracts, fixing priorities and allocating raw materials, and the government directly controlled prices in the civilian market. It empowers the federal government to become the sole buyer and allocator of materials critical to the national defense. However, the President has chosen not to take the responsibility for centralized purchasing and allocation of critical medical supplies. Instead, the federal government has decided to allow states and other end users to compete for limited resources while using the DPA’s criminal provisions to try to curb the more egregious examples of exploitation.

On March 23, 2020, the President issued Executive Orders 13909 and 13910, which invoke his authority under DPA § 101 to declare ventilators and medical personal protective equipment as scarce materials critical to the national defense. Under authority designated by the Executive Orders, on March 25, 2020 the Secretary of Health and Human Services designated a variety of masks, gloves, gowns, face shields and other personal protective equipment, as well as respirators, sterilization materials, and ventilators as scarce materials subject to the anti-hoarding section of the DPA.  The designation was published in the Federal Register at 85 FR 17592 (Mar. 30, 2020). It enumerates the types of short-supply equipment but does not provide guidance as to what constitutes accumulation in excess of reasonable demand for consumption or what prices are considered in excess of the prevailing market price.

The Department of Justice has created a joint federal-state anti-hoarding task force under the leadership of the United States Attorney for the District of New Jersey, and several criminal prosecutions of alleged hoarders have been instituted. However, the prohibitions in DPA § 102 of accumulation “in excess of reasonable demands” for the holder’s consumption or for resale at a price “in excess of prevailing market prices” appear to impose a rather vague standard of criminal liability, and there do not appear to be any reported decisions interpreting them. Unlike the New Jersey statute, there is no definite markup that would be allowed.

DPA § 104, 50 U.S.C. §4514, prohibits the President from imposing wage or price controls without Congressional authorization. Perhaps for that reason, the government has not set permissible prices for short-supply equipment at any time since the HHS designation. Instead, the government is taking the position that prevailing prices are either prices in effect in January and February of 2020, before the coronavirus crisis began in the United States, or that they are “benchmark” prices of a major private manufacturer. Whether either of those standards provides fair advance notice sufficient to support criminal liability is, to say the least, contestable.

In addition, the government’s position appears to criminalize what may be entirely legitimate economic activity. Experience has shown that there were large amounts of masks and other designated short-supply medical equipment scattered in pockets of inventory around the United States and abroad. Middlemen perform the valuable service of finding these supplies, marshaling them and making them available to end users. That takes effort, which will not be undertaken without the prospect of compensation. Unlike the New Jersey statute, the DPA does not on its face recognize the costs incurred by accumulators to obtain otherwise unavailable goods, either those passed through from upstream sellers, the expenses of search, or reasonable compensation for the effort involved.

In conclusion, the government has not used the Defense Production Act to set prices directly. Its criminal anti-hoarding provisions  are a very blunt instrument for regulating economic activity in a time of shortage, especially because the federal government is not acting as the sole buyer or allocator of goods or fixing prices but is instead requiring end users of short-supply equipment to compete against each other. These criminal provisions have never been tested in court, and they leave open the possibility of vigorous defense based on the lack of a clear standard of criminal liability, on the need to attract scarce goods into the market, and on the pass-through of legitimate costs incurred to do so, including a reasonable profit.

© Copyright 2020 Sills Cummis & Gross P.C.

For more on COVID-19 related price issues, see the National Law Review Coronavirus News legal section.

Temperature Screening: New Guidance From the CDC, FAQs, and Best Practices

With states beginning to ease stay-at-home orders, employers are formulating plans to return employees to the workplace. As part of this process, many employers are considering implementing regular employee temperature checks in an effort to keep employees safe. While this measure may have seemed unthinkable and fraught with risks even just a couple of months ago, we expect that health screenings, including temperature checks, will become increasingly prevalent in the workplace. In fact, just last week, the Centers for Disease Control and Prevention (“CDC”) issued guidance on how employers and businesses can safely conduct temperature checks. Key portions of that guidance are summarized below, along with a list of common questions and best practices employers should consider before requiring employees to undergo regular temperature checks.

1. Are employers required to screen employees’ temperatures before they enter the workplace?

The answer depends on the state(s) in which the employer operates.  Some states are now requiring employers to conduct regular temperature checks on employees.  For example, Colorado requires certain critical and noncritical businesses to conduct daily temperature checks and monitor employees’ symptoms, and employers with 50 or more employees at one location must implement stations for symptom screenings and temperature checks.  Other states such as Indiana require all employers to implement a COVID-19 response plan, which includes implementing a health screening process for employees that may include regular temperature checks.  Additionally, employers may be subject to different temperature check requirements based on industry.  For example, Washington requires construction contractors to screen all workers at the beginning of their shift by taking their temperature and asking them if they have symptoms.  Any worker found to have a temperature of 100.4 degrees or higher must be sent home.  That said, many states currently have no temperature check mandate, including–for now–Illinois (with limited exceptions such as certain health care and long-term care employees), giving many employers some flexibility to determine how best to screen employees for symptoms, if at all.  Employers should consult and keep a close eye on ever-changing state and local guidelines to determine if and when temperature checks are required.

2. Even if there is no state or local mandate, can employers still require employees to submit to routine on-site temperature checks as a condition of employment?

Yes, provided that temperature checks are administered safely, consistently and in a non-discriminatory manner.  The Equal Employment Opportunity Commission (“EEOC”) has issued guidance confirming that temperature checks are a permissible screening mechanism to use during the COVID-19 pandemic. However, to avoid discrimination claims, employers generally should not pick and choose who is subject to temperature screening unless it is part of a nondiscriminatory plan (e.g., screening only that portion of the workforce where social distancing measures may not be feasible, such as warehouses or manufacturing plants).  Note that if employers choose to screen every employee entering a facility, employers may need to conduct such checks on anyone entering the workplace–not just employees–to minimize the risk of discrimination claims and to reduce the risk of transmission.

3. What are the key CDC guidelines for conducting on-site temperature screenings?

The CDC outlines two options for on-site screenings. The first approach relies on barrier/partition controls and personal protective equipment (“PPE”) and the second approach relies exclusively on PPE.

Under the first approach, the screener stands behind a physical barrier, such as a glass or plastic window or partition.  Using disposable gloves, the screener checks the employee’s temperature by reaching around the partition or through the window.  It is critical that the screener’s face remain behind the barrier at all times during the screening.

Under the second approach, the screener uses a face mask, eye protection (goggles or disposable face shield that fully covers the front and sides of the face), disposable gloves and a gown (if physical contact with an employee is anticipated) when taking employees’ temperatures.

When conducting temperature checks on multiple employees, the screener should use a clean pair of gloves for each employee and ensure that the thermometer is thoroughly cleaned after each use.  If the screener is using a disposable or non-contact thermometer (i.e., non-contact infrared thermometers, tympanic thermometers, and thermal scanners) and he or she does not make physical contact with the employee, then the CDC states that the screener need not change his or her gloves after each check.

Under either approach, the CDC confirms that employees found to have a temperature of 100.4 degrees or higher should be sent home immediately and instructed to promptly contact their doctor.  Employers should follow up with employees who are sent home with additional information about any available benefits and return-to-work protocol.  The CDC further recommends that employees maintain social distancing when waiting for their turn to be screened, and to the extent possible, screening should take place before an employee enters the physical workplace.

The CDC guidance can be found here:  https://www.cdc.gov/coronavirus/2019-ncov/community/general-business-faq.html

4. How should the temperature screeners be selected and trained?

An obvious first choice for a screener is often a medical officer or nurse, if such an employee is available and on staff.  If not, employers should carefully select an appropriate screener, ensure that the individual is comfortable with the role, and consider providing such individual with additional compensation or hazard pay.  Alternatively, there are third-party vendors who now offer these types of services, though such vendors should be carefully vetted.  Finally, employers are even turning to robots or robotic arms to conduct screens in order to reduce the risk of exposure during the screening process.

No matter who is selected, screeners should be trained on how to safely complete temperature screens, the proper use and disposal of PPE, and maintaining employee privacy.  As a best practice, we recommend that employers retain a medical professional to train screeners on how to safely and effectively conduct a temperature check, or at a minimum, employers should consult a medical professional to provide and confirm such information.  We also recommend that screeners sign a document establishing the protocol, requiring confidentiality of employee medical information, and confirming that the individual has been informed of and consents to the risks of serving as a screener.

5. What kind of thermometer should be used?

As a practical matter, we strongly advise that employers use a disposable or no-contact thermometer to prevent the spread of the virus. In fact, without a disposable or contactless device, employers may want to consider abandoning temperature checks altogether (if doing so will not run afoul of state or local law) and instead rely on other screening measures.  The risk of inadvertently using a contaminated device may outweigh any potential benefits gained from implementing a screening protocol in the first place.

However, if an employer uses a sophisticated device, including robots, to screen employees’ temperatures, Illinois employers should be aware of yet another potential legal pitfall.  Some devices and robots rely on artificial intelligence, including in some cases, facial recognition capabilities.  Such equipment could implicate the Illinois Biometric Information Privacy Act (“BIPA”), which has strict notice, disclosure and consent requirements.  Employers should discuss these risks with counsel before using any such devices.

6. If employees are required to undergo a temperature screening before clocking into work, must the employer compensate them for that time?

In most cases, yes.  While the answer to this question may depend, in part, on state law, we generally recommend that employers compensate employees for any time spent waiting to be screened and participating in the screening process in order to comply with the Fair Labor Standards Act (“FLSA”) and state wage and hour laws.  Running afoul of these laws by not paying employees for otherwise compensable pre-shift activities can be much more costly in the long run than paying employees for the time spent in the screening process itself.

7. What are the privacy concerns related to temperature checks?

The Americans with Disabilities Act (“ADA”) requires employers to maintain the confidentiality of all information obtained through disability-related inquiries and medical examinations.  Temperature screening is a medical examination under the ADA. Accordingly, any information collected as part of the screening process must be treated as a confidential medical record and maintained separately from the employee’s personnel file.  It may be disclosed only in limited circumstances. Employers should also consider how to best protect the privacy of those employees who are found to have an elevated temperature and need to be sent home (e.g., allowing for an inconspicuous exit, private screening, drive-through screening, etc.).

8. What if an employee refuses to participate in on-site temperature checks?

As a general matter, employees can be required to undergo temperature checks as a condition of employment, and those who refuse to do so should be sent home.  Employers should communicate the requirements for temperature checks and the consequences for failing to cooperate in a clearly written notice or policy that is distributed to all employees in advance of the implementation of the screening protocol.  Employees who refuse to adhere to those requirements may be disciplined, provided that any such discipline is administered in a consistent and nondiscriminatory manner.  However, for a variety of reasons (including employee morale), employers should consider whether discipline is truly necessary.  The better option may be to simply send the employee home or deny them access to the workplace.  When in doubt, employers should consult counsel before implementing discipline.

9. Is fever alone a reliable indicator of COVID-19?

According to the medical community, no.  Unfortunately, an elevated temperature is not a definitive indicator of the illness, and an employee may be contagious even without a fever. For that reason, and as discussed further below, employers should consider implementing other screening mechanisms either in lieu of on-site temperature screening (if allowed under applicable law) or in addition to temperature screening.

10. If fever is not a reliable indicator of COVID-19, why are employers implementing temperature screening?

Employers are looking for concrete steps they can take to reduce the risk of exposure in the workplace.  Unlike most COVID-19 symptoms, body temperature can be objectively screened and verified.  While temperature screening will not effectively identify asymptomatic cases, it still has the ability to catch positive cases and help prevent a potential outbreak in the workplace.  In many instances, employers are implementing temperature screening in an attempt to alleviate employee anxiety.  Some employers are reporting that employees actually want to have temperature checks in place to know that their employer is taking meaningful, proactive steps to keep them safe.  In other words, temperature screening may be as much of an employee relations (and public relations) tool as it is a prevention mechanism. In weighing the decision to implement on-site screening, employers should consider whether employees will be comforted by the process of temperature checks or if it will instead stoke fear and panic.

11. How should employees be notified of on-site screening measures?

We recommend that employers provide employees with advance, written notice of temperature checks and any other screening measures.  The notice or policy statement should explain the basis and method for conducting the screening, the steps the employer is taking to protect employee safety and privacy, and the consequences for failing to comply.  To avoid a false sense of security, the notice should also make clear that just because someone does not have a fever does not necessarily mean that the person does not have the virus.  The notice should explain that many people who test positive for COVID-19 are asymptomatic, and that employees should continue to take appropriate precautions and self-monitor and report to the employer the presence of any other symptoms.

12. What are the alternatives to on-site temperature screening?

As discussed above, on-site temperature screening presents potential logistical and legal issues that may steer some employers away from taking such measures.  As an alternative to on-site temperature screening, many employers are instead considering and implementing some type of employee self-assessment or self-monitoring protocol.  This can be accomplished through completion of daily self-assessment and/or certification forms in which the employee is asked to self-report temperature, other symptoms, or potential exposure events.  Other employers are relying on a one-time policy document whereby employees acknowledge and agree that by reporting to work each day, they are certifying that they have no symptoms.  Some employers are even incorporating the daily certification into timekeeping software (without disclosing medical information).

According to the CDC, it is reasonable to ask employees to take their own temperature before arriving to work.  This helps reduce the risk that those who are experiencing symptoms of COVID-19 will expose others to the virus by traveling to or reporting to work.  Therefore, some employers may opt to have employees conduct their own temperature checks before arriving at work, which alleviates some of the logistical and legal concerns.  However, note that employers in some states, like California and Illinois, may need to foot the bill for supplying employees with thermometers needed to complete any such self-assessment.

Regardless of the approach taken, we believe that employers should implement some type of symptom screening mechanism, even if it is not an on-site temperature check. And if an employer does decide to conduct on-site temperature screening (or is required to do so by law), we believe temperature checks should be used in conjunction with other screening efforts such as requiring employees to identify other symptoms or potential exposure incidents.  In other words, temperature screening should be just one of many potential tools in the employer’s arsenal to combat COVID-19 in the workplace.

© 2020 Vedder Price

For more on the return to work after COVID-19 process, see the National Law Review Coronavirus News legal section.

Patentablity of COVID19 Software Inventions: Artificial Intelligence (AI), Data Storage & Blockchain

The  Coronavirus pandemic revved up previously scarce funding for scientific research.  Part one of this series addressed the patentability of COVID-19 related Biotech, Pharma & Personal Protective Equipment (PPE) Inventions and whether inventions related to fighting COVID-19  should be patentable.  Both economists and lawmakers are critical of the exclusivity period granted by patents, especially in the case of vaccines and drugs.  Recently, several members of Congress requested “no exclusivity” for any “COVID-19 vaccine, drug, or other therapeutic.”[i]

In this segment, the unique issues related to the intellectual property rights of Coronavirus related software inventions, specifically, Artificial Intelligence (AI), Data Storage & Blockchain are addressed.

Digital Innovations

Historically, Americans have adhered to personalized healthcare and lacked the incentive to set up a digital infrastructure similar to Taiwan’s which has fared far better in combating the spread of a fast-moving virus.[ii]  But as hospitals continue to operate at maximum capacity and with prolonged social distancing, the software sector is teeming with digital solutions for increasing the virtual supply of healthcare to a wider network of patients,[iii] particularly as HHS scales back HIPAA regulations.[iv]  COVID-19 has also spurred other types of digital innovation, such as using AI to predict the next outbreak and electronic hospital bed management, etc.[v]

One area of particular interest is the use of blockchain and data storage in a COVID/post-COVID world.  Blockchains can serve as secure ledgers for the global supply of medical equipment, including respirators, ventilators, dialysis machines, and oxygen masks.[vi]  The Department of Homeland Security has also deemed blockchain managers in food and agricultural distribution as “critical infrastructure workers”.[vii]

Patentability

Many of these digital inventions will have a hard time with respect to patentability, especially those related to data storage such as blockchains.  In 2014, the Supreme Court found computer-related inventions were “abstract ideas” ineligible for patent protection in Alice v. CLS Bank.[viii]  Because computer-implemented programs execute steps that can theoretically be performed by a human being but are only automated by a machine, the Supreme Court concluded that patenting software would be patenting human activity.  This type of patent protection has long been considered by the Court to be too broad and dangerous.

Confusion

The aftermath of Alice is widespread confusion amongst members of the patent bar as well as the USPTO as to how computer-related software patents were to be treated henceforth.[ix]   The USPTO attempted to clarify some of this confusion by a series of Guidelines in 2019.[x]  Although well-received by the IP community, the USPTO’s Guidelines are not binding outside of the agency, meaning they are have little dispositive effect when parties must bring their cases to the Federal Circuit and other courts.[xi]  Indeed, the Federal Circuit has made clear that they are not bound by the USPTO’s guidance.[xii]  The Supreme Court will not provide further clarification and denied cert on all patent eligibility petitions in January of this year.[xiii]

The Future

Before the coronavirus outbreak, Congress was working on patent reform.[xiv]  But the long-awaited legislation was set aside further still as legislators focused on needed measures to address the pandemic.  On top of that, both Senator Tillis and Senator Coons who have spearheaded the efforts for patent reform are now facing reelection battles, making the future congressional leadership on patent reform uncertain.

Conclusion

Patents receive a lot of flak for being company assets, and like many assets, patents are subject to abuse.[xv]  But patents are necessary for innovation, particularly for small and medium-sized companies by carving out a safe haven in the marketplace from the encroachment of larger companies.[xvi]  American leadership in medical innovations had been declining for some time prior to the pandemic[xvii] due to the cumbersome US regulatory and legal environments, particularly for tech start-ups seeking private funding.[xviii]

Not all data storage systems should receive a patent and no vaccine should receive a patent so broad that it snuffs out public access to alternatives.  The USPTO considers novelty, obviousness and breadth when dispensing patent exclusivity, and they revisit the issue of patent validity downstream with inter partes review.  There are measures in place for ensuring good patents so let that system take its course.  A sweeping prohibition of patents is not the right answer.

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

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

[ii] Christina Farr, Why telemedicine has been such a bust so far, CNBC (June 30, 2018), https://www.cnbc.com/2018/06/29/why-telemedicine-is-a-bust.html and Nick Aspinwall, Taiwan Is Exporting Its Coronavirus Successes to the World, Foreign Policy (April 9, 2020), https://foreignpolicy.com/2020/04/09/taiwan-is-exporting-its-coronavirus-successes-to-the-world/.

[iii] Joe Harpaz, 5 Reasons Why Telehealth Is Here To Stay (COVID-19 And Beyond), Forbes (May 4, 2020), https://www.forbes.com/sites/joeharpaz/2020/05/04/5-reasons-why-telehealth-here-to-stay-COVID19/#7c4d941753fb.

[iv] Jessica Davis, OCR Lifts HIPAA Penalties for Telehealth Use During COVID-19, Health IT Security (March 18, 2020), https://healthitsecurity.com/news/ocr-lifts-hipaa-penalties-for-telehealth-use-during-COVID-19.

[v] Charles Alessi, The effect of the COVID-19 epidemic on health and care – is this a portent of the ‘new normal’?, HealthcareITNews (March 31, 2020), https://www.healthcareitnews.com/blog/europe/effect-COVID-19-epidemic-health-and-care-portent-new-normal and COVID-19 and AI: Tracking a Virus, Finding a Treatment, Wall Street Journal (April 17, 2020), https://www.wsj.com/podcasts/wsj-the-future-of-everything/COVID-19-and-ai-tracking-a-virus-finding-a-treatment/f064ac83-c202-40f9-8259-426780b36f2c.

[vi] Sara Castellenos, A Cryptocurrency Technology Finds New Use Tackling Coronavirus, Wall Street Journal (April 23, 2020), https://www.wsj.com/articles/a-cryptocurrency-technology-finds-new-use-tackling-coronavirus-11587675966?mod=article_inline.

[vii] Christopher C. Krebs, MEMORANDUM ON IDENTIFICATION OF ESSENTIAL CRITICAL INFRASTRUCTURE WORKERS DURING COVID-19 RESPONSE, Cybersecurity and Infrastructure Security Agency (March 19, 2020), available at https://www.cisa.gov/sites/default/files/publications/CISA-Guidance-on-Essential-Critical-Infrastructure-Workers-1-20-508c.pdf.

[viii] Alice v. CLS Bank, 573 U.S. 208 (2014), available at https://www.supremecourt.gov/opinions/13pdf/13-298_7lh8.pdf.

[ix] David O. Taylor, Confusing Patent Eligibility, 84 Tenn. L. Rev. 157 (2016), available at https://scholar.smu.edu/cgi/viewcontent.cgi?article=1221&context=law_faculty.

[x] 2019 Revised Patent Subject Matter Eligibility Guidance, United States Patent Office (January 7, 2019), available at https://www.federalregister.gov/documents/2019/01/07/2018-28282/2019-revised-patent-subject-matter-eligibility-guidance.

[xi] Steve Brachmann, Latest CAFC Ruling in Cleveland Clinic Case Confirms That USPTO’s 101 Guidance Holds Little Weight, IPWatchDog (April 7, 2019), https://www.ipwatchdog.com/2019/04/07/latest-cafc-ruling-cleveland-clinic-confirms-uspto-101-guidance-holds-little-weight/id=107998/.

[xii] Id.

[xiii] U.S. Supreme Court Denies Pending Patent Eligibility Petitions, Holland and Knight LLP (January 14, 2020), https://www.jdsupra.com/legalnews/u-s-supreme-court-denies-pending-patent-55501/.

[xiv] Tillis and Coons: What We Learned At Patent Reform Hearings, (June 24, 2019), available at https://www.tillis.senate.gov/2019/6/tillis-and-coons-what-we-learned-at-patent-reform-hearings.

[xv] Gene Quinn, Twisting Facts to Capitalize on COVID-19 Tragedy: Fortress v. bioMerieux, IPWatchDog (March 18, 2020), https://www.ipwatchdog.com/2020/03/18/twisting-facts-capitalize-COVID-19-tragedy-fortress-v-biomerieux/id=119941/.

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

[xvii] Medical Technology Innovation Scorecard_The race for global leadership, PwC (January 2011), https://www.pwc.com/il/en/pharmaceuticals/assets/innovation-scorecard.pdf.

[xviii] Elizabeth Snell, How Health Privacy Regulations Hinder Telehealth Adoption, HealthITSecurity (May 5, 2015),https://healthitsecurity.com/news/how-health-privacy-regulations-hinder-telehealth-adoption.

Copyright (C) GLOBAL IP Counselors, LLP

ARTICLE BY Wen Xie at Global IP Counselors.
For more on patentability, see the National Law Review Intellectual Property law section.

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

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

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

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

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

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

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

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

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

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

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

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

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

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

Matter abandoned or affected due to COVID-19

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

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

III. USPTO waives original handwritten signature requirements until further notice

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

IV.  Conclusion

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

[1] https://www.uspto.gov/coronavirus

[2] Id.

[3] Id.

[4] Id.

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

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

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

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

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

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

[11] Id.

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

[13] Id.

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

[15] Id.

© 2020 Winstead PC.

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

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

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

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

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

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

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

Disclosure of Ideas

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

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

Incentive to Innovate

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

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

Recouping Cost

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

The Patentability of Inventions Related to COVID-19 – PPE 

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

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

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

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

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

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

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

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

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

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

[vi] Id.

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

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

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

[x] Id.

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

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

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

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

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

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

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

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

Copyright (C) GLOBAL IP Counselors, LLP

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

New Platform to Facilitate Development of COVID-19 Technologies

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

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

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

© 2020 Foley & Lardner LLP

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

COVID-19 Layoff or Pretext for Age Discrimination?

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

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

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

Signs That The Layoff May Be Age Discrimination

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

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

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

Legal Standards For Age Discrimination And Pretext Claims

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

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

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

STEP 1/prima facie case (burden on plaintiff)

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

STEP 2 (burden on defendant)

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

STEP 3 (burden on plaintiff)

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

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

How Can Older Employees Protect Their Rights?

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

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

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

 

© 2020 Zuckerman Law

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

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

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

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

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

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

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

Commentary

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

©2020 Bergeson & Campbell, P.C.

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