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Prior results do not guarantee a similar outcome.http://www.wilmerhale.com/pages/publicationsandnewsdetail.aspx?NewsPubId=10737421524Today, the White House announced several executive actions and legislative recommendations aimed at curbing aggressive patent assertion.Tue, 04 Jun 2013 04:00:00 GMThttp://www.wilmerhale.com/pages/publicationsandnewsdetail.aspx?NewsPubId=10737421535An article by Adam Raviv, a counsel in the firm's International Arbitration Department, published by Corporate Counsel in the May 30, 2013 edition.Thu, 30 May 2013 04:00:00 GMThttp://www.wilmerhale.com/pages/publicationsandnewsdetail.aspx?NewsPubId=10737421285Counsel Elizabeth Canizares and Senior Associate Julianne Harper have been named WilmerHale’s 2013 Pickering fellows.Mon, 29 Apr 2013 04:00:00 GMThttp://www.wilmerhale.com/pages/publicationsandnewsdetail.aspx?NewsPubId=10737421239A team of WilmerHale attorneys recently filed an amicus brief in the DC Circuit requesting that the court affirm a district court decision in favor of the Securities Investor Protection Corp. (SIPC). WilmerHale Partner Noah Levine, former Counsel Steven P. Lehotsky, Senior Associate Joshua S. Press and Associate Albinas J. Prizgintas filed the brief on behalf of former Securities and Exchange Commission (SEC) officials and professors of law in SEC v. SIPC, a case of first impression under the Securities Investor Protection Act (SIPA) arising out of Robert Allen Stanford’s Ponzi scheme. Law360 published news about the amicus brief in an April 23, 2013, article titled, “Stanford Victims Aren’t Owed SIPC Aid, Ex-SEC Chiefs Say.” The article highlights excerpts from the brief stating, “[t]he SEC’s proposed expansion of SIPC protection, absent even the most rudimentary consideration of any financial consequences, would radically transform SIPA and threaten SIPC’s ability to function as Congress intended.” The brief argues, among other things, that SIPC does not have authority to provide financial relief to investors who deposited funds with and received certificates of deposit from a foreign bank that was neither subject to SIPA nor a SIPC member.Wed, 24 Apr 2013 04:00:00 GMThttp://www.wilmerhale.com/pages/publicationsandnewsdetail.aspx?NewsPubId=10737420171This morning, a panel of the US Court of Appeals for the District of Columbia Circuit held that President Obama’s recess appointment of three members of the National Labor Relations Board (NLRB) violated the Constitution’s Recess Appointments Clause.1 The DC Circuit’s decision, which the Government will likely appeal, has significant ramifications for Director Richard Cordray of the Consumer Financial Protection Bureau (CFPB or the Bureau), who was appointed the same day as the NLRB members and whose appointment would also be invalid under the DC Circuit’s reasoning. Hence, it will likely have important implications for many recent and pending CFPB rulemaking and supervisory actions. If the decision were to be the last word on the issue, it would dramatically restrict the circumstances under which Presidents could make recess appointments. Thus, it seems highly likely the Government will seek review, either by the full court of appeals or by the Supreme Court. The Recess Appointments Clause provides that “[t]he President shall have Power to fill up all Vacancies that may happen during the Recess of the Senate, by granting Commissions which shall expire at the End of their next Session.”2 In an opinion by Chief Judge Sentelle, joined by Judges Henderson and Griffith, the court of appeals held that the Clause empowers the President to make recess appointments only during intersession recesses of the Senate—that is, recesses between formal sessions of the Senate—and not during intrasession recesses, which are breaks that occur during the course of a congressional session.3 Chief Judge Sentelle and Judge Henderson also held that the President may make recess appointments only to fill vacancies that actually arise during an intersession recess of the Senate, rejecting a practice the Executive Branch has followed since the nineteenth century.4 Because President Obama’s appointments of the NLRB officers occurred during (at most) an intrasession recess and because the vacancies for those appointments had not arisen during an intersession recess, the court held that the President’s appointments were unconstitutional.5 Judge Griffith filed an opinion concurring in part, saying he would have decided the case solely on the intersession/intrasession ground.6Although Mr. Cordray’s recess appointment was not directly challenged in this case, the DC Circuit’s reasoning would appear to apply equally to his appointment. Moreover, a challenge to the constitutionality of Mr. Corday’s appointment is already pending in the federal district court in DC, and that court would be bound by the DC Circuit’s decision.7 Today’s decision thus has significant ramifications for the legality of the actions of Mr. Cordray and the Bureau. Even if Mr. Cordray’s appointment were to be invalidated in a challenge to a particular action by the Bureau, additional analysis, and likely additional legal challenges, would be required to determine which actions during Mr. Cordray’s tenure could stand and which do not. First, there may be questions about which CFPB actions require the presence of an appointed director and which do not. For example, among the issues to be addressed may be whether the Bureau may continue to exercise its powers over non-bank institutions, such as check-cashing companies and payday lenders, and its powers to enforce the provisions prohibiting unfair, deceptive, or abusive acts or practices.8 Second, there may be issues raised over the validity of the CFPB’s (and the NLRB’s) actions under the “de facto officer doctrine.” The Government has 45 days to seek rehearing en banc by the full DC Circuit. If it decides to go directly to the Supreme Court, it will have 90 days to file its petition for writ of certiorari. 1See Noel Canning v. NLRB, No. 12-1115 (D.C. Cir. Jan. 25, 2013) (slip opinion), http://www.cadc.uscourts.gov/internet/opinions.nsf/D13E4C2A7B33B57A85257AFE00556B29/$file/12-1115-1417096.pdf.  2 U.S. Const., art. II, § 2, cl. 3.  3See Noel Canning, slip op. at 16-30. 4See id. at 30-39.  5See id. at 40-44. 6See id. at 47. 7See State National Bank of Big Spring et al. v. Geithner et al., No. 12-cv-1032 (D.D.C.). 8See, e.g., 12 U.S.C. §§ 5514(b), 5531-5532, & 5536.Fri, 25 Jan 2013 05:00:00 GMThttp://www.wilmerhale.com/pages/publicationsandnewsdetail.aspx?NewsPubId=10737420133In the last few months, there have been important developments relating to patent term adjustment (PTA) determinations by the U.S. Patent and Trademark Office (PTO) under 35 U.S.C. § 154(b) and judicial challenges to those determinations. The Deadline for Filing a Lawsuit Challenging a PTA Determination Both the courts and Congress have recently addressed the procedure for bringing judicial challenges to PTA determinations. First, in September 2012, the U.S. District Court for the District of Columbia affirmed a prior decision of the court holding that the 180-day deadline under 35 U.S.C. § 154(b)(4)(A) for filing a lawsuit challenging a PTA determination was tolled in the circumstances of that case by the patent holders’ timely requests for reconsideration of the PTA determinations set forth in the patents at issue. See Bristol-Myers Squibb Co. v. Kappos, 2012 WL 4127636 (D.D.C. Sept. 20, 2012) (denying reconsideration of the decision published at 841 F. Supp. 2d 238). The reasoning of the Bristol-Myers court was recently adopted by another judge of the D.C. District Court in a November 15, 2012 decision. See Novartis AG v. Kappos, 2012 WL 5564736 (D.D.C. 2012). (WilmerHale was counsel for Bristol-Myers Squibb Co. in its successful challenge.) Second, on January 14, 2013, President Obama signed into law H.R. 6621, which makes a number of “technical corrections” to the America Invents Act. Included within this law is a provision amending the PTA statute. Among other things, the provision changes the text of the provision of § 154(b) relating to lawsuits challenging PTA decisions. As amended, § 154(b)(4)(A) will include the following new language (in italics): An applicant dissatisfied with the Director’s decision on the applicant’s request for reconsideration under paragraph 3(B)(ii) shall have exclusive remedy by a civil action against the Director filed in the United States District Court for the Eastern District of Virginia within 180 days after the date of the Director’s decision on the applicant’s request for reconsideration. The new law provides that “the amendments made by this Act shall take effect on the date of enactment of this Act, and shall apply to proceedings commenced on or after such date of enactment.” PTA Calculation When an RCE Is Filed More Than Three Years After Application On November 1, 2012, the U.S. District Court for the Eastern District of Virginia held that the PTO has been improperly calculating PTA in cases where an RCE is filed more than three years after the patent application was submitted. See Exelixis, Inc. v. Kappos, 2012 WL 5398876 (E.D. Va. 2012). Subject to certain exceptions, a patent holder is entitled to a patent term adjustment if (among other things) the PTO fails to issue the patent within three years of submission of the patent application. See 35 U.S.C. § 154(b)(1)(B). The PTO has long taken the position in calculating this so-called “B delay” that “any time consumed by an RCE is subtracted from the PTA awarded under subparagraph (B), regardless of when the RCE is filed.” Exelixis, 2012 WL 5398876, at *5; see also 37 C.F.R. § 1.703(b). In a decision that could provide significant benefits to patent holders, however, the court in Exelixis rejected that interpretation. Applying the “plain and unambiguous language” of § 154(b), the Exelixis court explained that “subparagraph (B) does not address RCE’s filed after the running of the three year period nor does it require that the time consumed by an RCE filed after the running of the three year clock be deducted from the PTA.” Exelixis, 2012 WL 5398876, at *7. In other words, “RCE’s have no impact on PTA if filed after the three year deadline has passed.” Id. at *8. The reasoning of the Exelixis court was endorsed by the U.S. District Court for the District of Columbia in the November 15, 2012 Novartis decision. The Novartis court similarly found that “the PTO’s interpretation is contrary to the plain and unambiguous language of § 154(b)(1)(B), and that it contravenes the structure and purpose of the statute.” Novartis AG, 2012 WL 5564736, at *13. Since the decision in Exelixis, a number of complaints have been filed in the Eastern District of Virginia invoking the Exelixis court’s interpretation of § 154(b) and challenging PTA determinations in cases where RCEs were filed more than three years after the patent applications were submitted. * * *Taken together, these developments provide important opportunities for patent holders to ensure that they have received the entire PTA to which they are legally entitled.Wed, 23 Jan 2013 05:00:00 GMThttp://www.wilmerhale.com/pages/publicationsandnewsdetail.aspx?NewsPubId=10737419506WilmerHale Senior Associate Madhu Chugh, has been selected to receive the 2013 Outstanding Young Texas Ex Award from her alma mater, the University of Texas. Chugh is one of four University of Texas alumni who have been selected by the Texas Exes to receive the award for 2013. Fri, 11 Jan 2013 05:00:00 GMThttp://www.wilmerhale.com/pages/publicationsandnewsdetail.aspx?NewsPubId=10737419467We are pleased to announce the elevation of our new partners and special counsel in 2013.Fri, 04 Jan 2013 05:00:00 GMThttp://www.wilmerhale.com/pages/publicationsandnewsdetail.aspx?NewsPubId=10737419420The upward trends in False Claims Act (FCA) enforcement that we described in our 2011 Year-In-Review continued in 2012. In the fiscal year that ended on September 30, 2012, the U.S. Department of Justice (DOJ) secured $4.9 billion in FCA settlements and civil judgments, beating the previous record by more than $1.7 billion. Federal FCA recoveries since January 2009 add up to $13.3 billion, which is the largest four-year total in DOJ history. Our full review is available in PDF format.Wed, 02 Jan 2013 05:00:00 GMThttp://www.wilmerhale.com/pages/publicationsandnewsdetail.aspx?NewsPubId=10737419399The US Federal Trade Commission (FTC) has issued new rules under the Children’s Online Privacy Protection Act (COPPA) that strengthen existing restrictions on the online collection and use of personal information about children under the age of 13.1The new regulations will have a significant impact on the operation of websites, applications, plug-ins, and other online services and may make it more difficult to provide online content directed toward children. But they also afford content providers additional flexibility in complying with existing obligations, including COPPA’s parental consent requirement. The new regulations go into effect on July 1, 2013.The new rules make four fundamental changes to the prior regulations:Providers of websites and other online services will be considered “operators”—and therefore subject to COPPA if their website or service is directed to children—even if they have no actual knowledge that a third-party provider operating on their website or service (such as an application, plug-in, or advertising network) collects personal information from users of the site or service. Providers subject to COPPA will have several additional ways to obtain “verifiable parental consent” for the collection, use, and disclosure of children’s personal information. The definition of “personal information” will encompass a wider range of information, including persistent identifiers. Websites and other online services that are “directed to children” but that do not target children as their primary audience will be permitted to age-screen their users and apply COPPA’s protections only to those users who self-identify as under age 13.In addition, the FTC adopted several other rule changes that will affect online content providers.2Four Key Changes to the Existing RegulationsFirst, the FTC expanded the reach of COPPA to many websites that incorporate third-party applications, plug-ins, or advertising networks. COPPA generally prohibits an “operator” of a website “directed to children” from collecting a child’s “personal information” without parental notice and consent.3 An “operator” is an entity that collects personal information through a commercial website or that allows another entity to collect such information on its behalf.4 Under the new regulations, an entity will be an “operator” when it merely “benefits” from allowing a third party to collect personal information through the entity’s website, even without an agency relationship.5 The FTC found that websites generally benefit from incorporating third-party applications or plug-ins because those services “enhance the  functionality or content” of the host website.6The new regulations establish a “strict liability standard for child-directed sites and services.”7 That is, even if a website provider has no knowledge that a third-party application or plug-in that runs on the site is collecting personal information from children, that host website provider may be regulated as an “operator” of a website directed to children.8Second, the FTC’s new rules expand the definition of “verifiable parental consent.”9  COPPA generally requires that an “operator” of an online service “directed to children,” or an “operator” that has actual knowledge that it collects personal information from children, obtain “verifiable parental consent” for the collection, use, or disclosure of a child’s personal information.10 The revised regulations add the following new methods for obtaining “verifiable parental consent”:electronically scanned versions of signed parental consent forms;video conferencing;government-issued identification; anddebit cards and online payment systems used “in connection with a monetary transaction where … the operator provides notification of each discrete monetary transaction to the primary account holder.”11The FTC also confirmed that an operator may obtain verifiable parental consent in other ways that are not specifically listed. For example, digital signatures or platform-based methods may be permissible in some cases.12 The new rules also establish a voluntary advisory process for FTC review and approval of additional parental consent mechanisms.13Third, the new regulations clarify and broaden the definition of “personal information.”14  For example, personal information now expressly includes:photographs, videos or audio files containing a child’s image or voice, even if the files do not contain any other identifying data;15“persistent identifiers that can be used to recognize a user over time and across different websites or online services,” if the identifier is used for purposes beyond “support for the internal operations of the website or online service”;16street-name-level geolocation information, even without a specific address number;17 andscreen names or user names that “function[ ] in the same manner as online contact information” and enable direct contact with a person online, such as an email address, voice over Internet protocol identifier, instant messaging user identifier, or video chat user identifier.18Fourth, the new regulations allow websites that are “directed to children,” but that do not target children as their primary audience, to differentiate among their users and not treat all users as children.19 Such websites (i) may not collect personal information from any user before performing an age screen, and(ii) may not collect, use or disclose personal information from users who self-identify as under age 13 without complying with the rules’ notice and parental consent provisions.20Additional Changes to Existing RegulationsIn addition to the changes detailed above, the new FTC regulations made many other adjustments to existing rules, including:The new rules expressly require an operator to take “reasonable steps” to ensure that it releases personal information only to service providers and third parties capable of maintaining the information securely. Operators must “inquire about entities’ data security capabilities and, either by contract or otherwise, receive assurances from such entities about how they will treat the personal information they receive.”21The FTC broadened the types of online services that will fall under COPPA. For example, when considering whether a commercial online service is one “directed to children,” the FTC now will consider in its existing “totality of the circumstances” approach a service’s musical content, as well as the presence of child celebrities or celebrities who appeal to children.22  Additionally, the new regulations consider a third-party online service as one “directed to children” if the service’s administrators have actual knowledge that the service collects personal information from users on a host site that is “directed to children.”23The FTC will not consider a site to have “collected personal information” if the site takes “reasonable measures” (such as “sophisticated automated filtering technologies”) to delete all or virtually all personal information from a child’s posting before it is made public, and also deletes the information from its own records.24The new regulations permit a website to retain personal information collected from a child for only as long as reasonably necessary to fulfill the purpose for which that information was collected. They also require an operator to delete unnecessary information using reasonable measures to protect against unauthorized access.25 The FTC also made rule changes to streamline COPPA’s direct notice requirements and clarify the precise information that operators must provide to parents regarding their collection, use, and transfer of personal information.26 1 The FTC’s Federal Register notice and amended rules are available at http://www.ftc.gov/os/2012/12/121219copparulefrn.pdf (FTC Notice). The pre-amendment COPPA regulations can be found at 16 C.F.R. Part 312, and the statute is codified at 15 U.S.C. § 6501 et seq.2 The process leading to the new rules began in April 2010 with a request for public comment, see 75 Fed. Reg. 17089 (Apr. 5, 2010). The FTC issued a notice of proposed rulemaking in September 2011, see 76 Fed. Reg. 59804 (Sept. 27, 2011), and a supplemental notice in August 2012, see 77 Fed. Reg. 46643 (Aug. 6, 2012).315 U.S.C. § 6502(a); 16 C.F.R. § 312.3.415 U.S.C. § 6501(2); 16 C.F.R. § 312.2.5See FTC Notice at 15-24. The FTC implemented that change by adding the following language to the definitions section of its rules, particularly clause (b):Personal information is collected or maintained on behalf of an operator when: (a) it is collected or maintained by an agent or service provider of the operator; or (b) the operator benefits by allowing another person to collect personal information directly from users of such website or online service.FTC Notice at 154, Amended Rule § 312.2. Importantly, the FTC clarified that its new rules are not intended to encompass platforms that merely offer access to another party’s child-directed content, such as the Apple iTunes App Store or Google Play. See FTC Notice at 24.6See FTC Notice at 22. Commissioner Maureen K. Ohlhausen dissented from this proposed change, arguing that it is inconsistent with the statutory definition of “operator” and thus “exceeds the scope of the authority granted us by Congress in COPPA”:The proposed amendments construe the term “on whose behalf such information is collected and maintained” to reach child-directed websites or services that merely derive from a third-party plug-in some kind of benefit, which may well be unrelated to the collection and use of children’s information (e.g., content, functionality, or advertising revenue). I find that this proviso—which would extend COPPA obligations to entities that do not collect personal information from children or have access to or control of such information collected by a third-party—does not comport with the plain meaning of the statutory definition of an operator in COPPA, which covers only entities “on whose behalf such information is collected and maintained.”Dissenting Statement of Commissioner Maureen K. Ohlhausen, at 2, http://ftc.gov/os/2012/12/121219copparulestatement.pdf. 7See FTC Notice at 20.8See FTC Notice at 17-24. On the other hand, the rules also clarify that third-party providers of applications, plug-ins, and advertising networks are themselves subject to COPPA obligations only when those providers have “actual knowledge” that they are collecting personal information directly from users of a child-directed website or online service. See id. at 25-27.9See FTC Notice at 60-86; id. at 160-61, Amended Rule § 312.5(b).10 15 U.S.C. § 6502(b)(1)(A); 16 C.F.R. §§ 312.3(b), 312.5(a). Several exceptions to this requirement are detailed in § 312.5(c) of the amended regulations. See FTC Notice at 161-62.11See FTC Notice at 60-69; id. at 160-61, Amended Rule § 312.5(b).12See FTC Notice at 69-76. Importantly, the FTC encouraged the development of “common consent mechanisms” that could provide notice and obtain parental consent for multiple operators simultaneously. Id. at 72-75.13See FTC Notice at 81-85. Under the new rule, the Commission will seek public comment on applications for approval of additional consent mechanisms and either approve or deny the applicant’s request in writing within 120 days. Id. at 84; id. at 166, Amended Rule § 312.12.14See FTC Notice at 28-47; id. at 154-55, Amended Rule § 312.2.15See FTC Notice at 40-43.16See FTC Notice at 31-40. A “persistent identifier includes, but is not limited to, a customer number held in a cookie, an Internet Protocol (IP) address, a processor or device serial number, or unique device identifier.” Id. at 154, Amended Rule § 312.2. The new rules define “support for the internal operations of the website” to include many activities, including those necessary to “serve contextual advertising on the website … or cap the frequency of advertising” or to “maintain or analyze the functioning of the website.” Id. at 155, Amended Rule § 312.2.17See FTC Notice at 43-47.18 FTC Notice at 28-31; id. at 13-15 (discussing the meaning of “online contact information”). This broadens the existing rule, which defines “personal information” to include “a screen name that reveals an individual’s email address.” 16 C.F.R. 312.2(c).19See FTC Notice at 47-54. The scope of this category is not entirely clear. The FTC noted: “The Commission intends the word ‘primary’ to have its common meaning, i.e., something that stands first in rank, importance or value. This must be determined by the totality of the circumstances and not through a precise audience threshold cut-off.” Id. at 53 n.162.20See FTC Notice at 53; id. at 156, Amended Rule § 312.2 (definition of “website or online service directed to children”).21See FTC Notice at 92-96; id. at 163, Amended Rule § 312.8.22See FTC Notice at 52.23See FTC Notice at 25-27; id. at 156, Amended Rule § 312.2 (definition of “website or online service directed to children,” subsection (b)).24See FTC Notice at 8-12; id. at 152, Amended Rule § 312.2 (definition of “collects or collection,” subsection (b)).25See FTC Notice at 96-99; id. at 164, Amended Rule § 312.10.26See FTC Notice at 54-60; id. at 157-60, Amended Rule § 312.4.Thu, 27 Dec 2012 05:00:00 GMT