Blockading the Ports: U.S. Imposes 10% Global Tariff; Higher Reciprocal Tariff Rates by Country
On April 2, President Trump issued an Executive Order (EO) imposing global reciprocal tariffs (White House Fact Sheet). The EO drew enough parallels to the Smoot-Hawley Tariff Act that Trump mentioned it in his Rose Garden announcement. The EO imposes a 10% baseline tariff on all imports to the United States beginning April 3, 2025.
On top of that baseline, the EO also imposes country-by-country tariffs reciprocal tariffs represented in the chart below. Those amounts are based on what the United States Trade Representative (USTR) determined in its 2025 Foreign Trade Barriers report to be the current tariff rate imposed on U.S. goods for imports to that country. That rate includes official tariffs, as well currency manipulation and other “trade barriers.” The “kind” reciprocal tariffs for each country are roughly half of that amount.
Certain goods will not be subject to the reciprocal tariff. Those include the following:
Communications of no value, humanitarian donations, information materials and media, and personal luggage, subject to 50 USC 1702(b);
Steel/aluminum articles and autos/auto parts already subject to Section 232 tariffs;
Copper, pharmaceuticals, semiconductors, and lumber articles;
All articles that are or become subject to future Section 232 tariffs (e.g., steel, aluminum, autos and auto parts);
Bullion; and
Energy and other certain minerals that are not available in the United States.
For Mexico and Canada the existing tariffs imposed in March remain in effect. USMCA compliant goods will continue to see a 0% tariff, non-USMCA compliant goods will be subject to a 25% tariff, and non-USMCA compliant energy and potash will be subject to a 10% tariff. However, if the EO specific to Mexico and Canada were to be terminated, USMCA compliant goods would receive preferential treatment, and non-USMCA compliant goods would be subject to the 12% reciprocal tariff.
In addition to the universal tariff imposition, beginning on May 2, 2025, the 54% tariff rate on imports from China will also be applied to packages worth less than $800 coming to the United States from China or Hong Kong.
Because the new tariffs are imposed under the International Emergency Economic Powers Act (IEEPA), there does not appear to be a formal process for requesting a waiver to the tariffs or providing comments on their implementation. However, it is likely that actions will be filed in U.S. courts as well as before the World Trade Organization contesting the tariffs.
Additional Author: Marta Piñol Lindin
FinCEN Warns US Financial Institutions of Bulk Cash Smuggling Risks from Mexico-Based Cartels
Go-To Guide:
FinCEN recently issued an alert to warn U.S. financial institutions, particularly depository institutions and money services businesses (MBSs), of the risks and red flags associated with bulk cash smuggling by Mexico-based drug cartels and other transnational criminal organizations.
FinCEN’s alert highlights the role played by Mexican and U.S. armored car services in knowingly or unknowingly introducing cartel proceeds into the U.S. financial system.
The alert, together with several other policy announcements from the Trump administration, signals an increased regulatory and enforcement focus on the laundering of cartel funds through U.S. financial institutions.
Financial institutions and common carriers of currency should review and update, as necessary, their compliance programs to address the identified money laundering risks.
On Mar. 31, 2025, as part of its responsibilities in administering the U.S. Bank Secrecy Act (BSA), the Department of the Treasury’s Financial Crimes Enforcement Network (FinCEN) issued an alert urging financial institutions to be vigilant in identifying and reporting transactions potentially related to the cross-border smuggling of bulk cash from the United States into Mexico, and the repatriation of bulk cash into the U.S. and Mexican financial systems by Mexico-based drug cartels and other transnational criminal organizations (TCOs).
The alert highlights one particular money laundering typology that drug cartels have been observed using—namely, utilizing Mexico-based businesses as cover to repatriate smuggled bulk cash back into the United States via foreign and domestic armored car services and air transport. According to FinCEN, this bulk cash is then often delivered by an armored car service to a U.S. financial institution, typically a depository institution or MSB, and either deposited into accounts that are owned by the Mexico-based businesses or transmitted by the MSBs on the Mexico-based businesses’ behalf.
Highlights for US Depository Institutions and MSBs
The alert identifies several red flags for this money laundering typology that U.S.-based depository institutions and MSBs should monitor for, as appropriate, including:
a customer who owns a Mexico-based business receiving a large credit, either from a U.S.-based armored services (ASC) company or after the customer has deposited bulk cash into the bank’s vault at a U.S.-based ACS secure storage facility;
receipt of a large cross-border wire transfer from a Canada-based financial institution to the bank account of a customer that owns a Mexico-based business;
the transportation of large volumes of cash by an ACS company or passenger vehicles to a U.S.-based MSB located along the southwest border, followed by rapid transfer to Mexico; and
delivery of a large volume of cash to a U.S.-based financial institution via an ACS company on behalf of a customer that operates or is affiliated with a Mexico-based business, or a business located near the U.S. southwest border, followed by (i) rapid movement of funds to a financial institution based in Mexico, (ii) a transfer to another affiliated business in the United States, or (iii) transfer to purchase a large volume of goods.
Highlights for Armored Car Services
The alert also highlights red flags that ACS companies should monitor for, including, but not limited to, where a Mexico-based business or individual requests that bulk cash be transported into the United States and/or accepted by a U.S. financial institution, but (i) the funds are not commensurate with the size of the business or the business profile; (ii) the requestor is reluctant to provide information, or provides inconsistent information, on the currency originator; or (iii) the request does not provide a clear explanation of the funds’ source.
The alert also notes FinCEN’s view that certain armored car services and other common carriers of currency may be engaged in “money transmission” under the BSA, which would require FinCEN registration and the implementation of a BSA-compliant anti-money laundering (AML) compliance program. Earlier this year, FinCEN and the U.S. Department of Justice concluded parallel civil and criminal resolutions, respectively, against a major U.S.-based ACS for failure to register with FinCEN and failure to maintain an adequate BSA/AML compliance program.1
Recent Related Announcements and Actions
This alert follows several additional federal actions that, like the resolutions above, signal heightened regulatory and enforcement focus on the AML and counter-terrorism risks drug cartels pose, including the role U.S. financial institutions and ACS companies—knowingly or unknowingly—play. These include:
a Jan. 20, 2025, Executive Order in which President Donald Trump identified drug cartels as a national security threat, broadening the authority of the State Department to designate such cartels as Foreign Terrorist Organizations (FTOs);
the State Department’s designation, on Feb. 20, 2025, of several infamous Central American drug cartels, including Sinaloa, as FTOs under that Executive Order, creating additional legal risks for companies found to have provided financial services to cartels, including under the so-called “Material Support Statute” set forth in 18 U.S.C. § 2339B; and
the U.S. Attorney General’s identification of criminal activity connected to drug cartels, including the laundering of funds for cartels, as a DOJ enforcement priority.
Key Takeaways
Banks, MSBs, ACS companies, and other common carriers of currency should review their AML compliance programs (whether federally-mandated or voluntary) to ensure that the risks identified in the alert are appropriately analyzed and addressed, where necessary.
ACS companies and other common carriers of currency should review their operations with counsel to understand, and potentially respond to, the risk that FinCEN may deem certain activity to be BSA-regulated money transmission.
All companies, whether subject to the BSA or not, that are involved in cross-border cash shipments in any capacity should review their policies for filing Currency or Monetary Instruments Reports (CMIRs). CMIRs must be filed anytime a person attempts or actually does physically transport, mail, or ship, or cause to be physically transported, mailed, or shipped, currency or other monetary instruments in an aggregate amount exceeding $10,000 at one time into or out of the United States.
1 Although the BSA’s definition of “money transmission” includes an exception for certain currency transporters, a 2014 FinCEN administrative ruling stated that the exception does not apply when the consignee (i.e., the person appointed by the shipper to receive the currency or monetary instruments) is a third party.
USCIS Provides Updated Guidance on Venezuela TPS After Court Intervention
USCIS has issued guidance stating that the expiration dates for Venezuelan Temporary Protected Status (TPS) will revert to those in place on Jan. 17, 2025, when former Department of Homeland Security (DHS) Secretary Alejandro Mayorkas extended the designation by 18 months. The move is pursuant to the Mar. 31, 2025, district court order temporarily halting the DHS’s recission of TPS for Venezuelans. Employers should stay updated on the progress of the litigation.
Expiration dates under the Jan. 17, 2025, extension are as follows:
The 2021 designation currently expires Sept. 10, 2025. Work authorization documents with expiration dates Sept. 10, 2025, Apr. 2, 2025, Mar. 10, 2024, and Sept. 9, 2022, are auto-extended until Apr. 2, 2026, pending the outcome of litigation.
The 2023 designation is extended through Oct. 2, 2026. Work authorization documents with expiration dates Sept. 10, 2025, Apr. 2, 2025, Mar. 10, 2024, and Sept. 9, 2022, are auto-extended until Apr. 2, 2026, pending the outcome of litigation.
Accordingly, employees with Venezuela TPS must be re-verified by Apr. 3, 2026. Employers should enter an expiration date of Apr. 2, 2026, on Supplement B of the I-9 form.
10 Important Insights for Procurement Fraud Whistleblowers in 2025
If you have information about procurement fraud, providing this information to the federal government could lead to the recovery of taxpayer funds and put a stop to any ongoing fraud. It could also entitle you to a financial reward. In addition to providing strong protections to procurement fraud whistleblowers, the False Claims Act entitles whistleblowers to financial compensation when the information they provide leads to a successful enforcement action.
Whether you are interested in seeking a financial reward or you are solely focused on ensuring integrity and accountability within the federal procurement process, if you have information about procurement fraud, it will be important to make informed decisions about your next steps. While protections and financial incentives are available, whistleblowers who wish to expose procurement fraud must meet various substantive and procedural requirements, and they must come forward before someone else beats them to it.
“Federal procurement fraud is a pervasive issue, and whistleblowers play a critical role in the government’s fight against fraudulent bidding, contracting, and billing practices. For those who are thinking about serving as procurement fraud whistleblowers, understanding the federal whistleblowing process is critical for making informed decisions about their next steps.” – Dr. Nick Oberheiden, Founding Attorney of Oberheiden P.C.
So, what do you need to know if you are thinking about reporting procurement fraud to the federal government? Here are 10 important insights for whistleblowers in 2025:
1. Suspecting Procurement Fraud and Being Able to Prove Procurement Fraud Are Not the Same
Filing a whistleblower complaint for procurement fraud requires more than just suspicion of wrongdoing. To qualify as a federal whistleblower—and to become eligible for the protections and financial compensation that are available—you must be able to help the federal government prove that a contractor or subcontractor has violated the law, whether through false statements, bid rigging, overbilling, or other fraudulent actions.
As a result, if you just have general concerns about procurement fraud, these concerns—on their own—will generally be insufficient to substantiate a procurement fraud whistleblower complaint. However, if you have inside information about a specific form of procurement fraud, then this is a scenario in which filing a whistleblower complaint may be warranted.
2. You Don’t Need Conclusive Proof to Serve as a Procurement Fraud Whistleblower
To be clear, however, filing a whistleblower complaint does not require conclusive proof of government procurement fraud. Instead, to file a whistleblower complaint under the False Claims Act in federal court, you must be able to make allegations that “have evidentiary support or, if specifically so identified, will likely have evidentiary support after a reasonable opportunity for further investigation.” As a result, you do not need any specific type or volume of evidence to serve as a procurement fraud whistleblower. If you have reason to believe that government contract fraud has been committed (or is in the process of being committed), this is generally all that is required.
With that said, the more evidence you have, the better—and you will want to work closely with an experienced procurement fraud whistleblower lawyer to determine whether you can meet the federal pleading requirements. If you need additional information, your lawyer can advise you regarding the information needed and how to collect it, as discussed in greater detail below.
3. You Must Be the First to Come Forward with Material Non-Public Information
Another requirement for serving as a procurement fraud whistleblower is that you must be privy to non-public information. In most cases, you also need to be the first to share this information with the federal government, though certain exceptions may apply.
With this in mind, while it is important to make an informed decision about whether to file a procurement fraud whistleblower complaint under the False Claims Act, it is also important to act promptly. A lawyer who has experience representing federal whistleblowers should understand that time is of the essence and should be able to assist you with making an informed decision as efficiently as possible.
4. While You Should Protect Any Evidence You Have, You Should Be Cautious About Collecting Additional Evidence
If you have collected or copied any evidence from your employer’s facilities or computer systems, you should protect this evidence to the best of your ability. Keep any hardcopy documents in a secure location and keep any electronic files on a secure storage device (and not in the cloud). This is important for your protection and for helping to ensure that you remain eligible to secure federal whistleblower status.
At the same time, if you are aware of additional evidence that you have not yet collected, you will need to be cautious about collecting this additional evidence. Even when you are taking steps to expose fraud, it is important to avoid violating employment policies or non-disclosure obligations–as doing so could put you at risk. While there are rules on when employers can (and can’t) enforce these types of restrictions to prevent whistleblowing, here too, you need to ensure that you are making informed decisions. An experienced procurement fraud whistleblower lawyer will be able to help.
5. If You Come Forward with Qualifying Information, the Government Will Have a Duty to Investigate Further
A key aspect of the procurement fraud whistleblower process is that the government has a duty to investigate allegations that warrant further inquiry. This is due, in part, to the nature of the qui tam procedures under the False Claims Act. The government isn’t necessarily required to pursue an enforcement action—this decision will be based on the outcome of its investigation—but it is generally required to determine if enforcement action is warranted.
With that said, not all substantiated allegations of government procurement fraud will necessarily warrant a federal investigation. If the amount at issue is small, the U.S. Department of Justice (DOJ) may be justified in deciding not to devote federal resources to a full-blown federal inquiry. A whistleblower lawyer who has significant experience in qui tam cases will be able to assess whether the DOJ is likely to determine that your allegations warrant an investigation.
6. Federal Authorities Will Expect to Be Able to Work With You During Their Procurement Fraud Investigation
If you file a procurement fraud whistleblower complaint and the government decides to open an investigation, you will be expected to work with the government during the investigative process. Whether, and to what extent, you remain involved is up to you–but it is important to understand that federal agents and prosecutors will be expecting you to assist to the extent that you can. Your lawyer can advise you here as well, and can communicate with federal authorities on your behalf if you so desire.
7. Procurement Fraud Whistleblowers Are Entitled to Protection Against Retaliation and May Be Entitled to Financial Rewards
If you qualify as a procurement fraud whistleblower under the False Claims Act, you will be entitled to protection against retaliation in your employment (if you are currently employed by the contractor or subcontractor that you are accusing of fraud). Your employer will be prohibited from taking adverse employment action against you based on your decision to blow the whistle; and, if it retaliates against you illegally, you will be entitled to clear remedies under federal law.
If the information you provide leads to a successful enforcement action, you may also be entitled to a financial reward. Subject to certain stipulations, under the False Claims Act, whistleblowers who help the government recover losses from procurement fraud are entitled to between 10% and 30% of the amount recovered.
8. Hiring an Experienced Whistleblower Lawyer is Important, and You Can Do So at No Out-of-Pocket Cost
While filing a procurement fraud whistleblower complaint is a complex process, you do not have to go through the process on your own. You can—and should—hire an experienced whistleblower lawyer to represent you at no out-of-pocket cost. An experienced lawyer will be able to advise you of your options every step of the way, answer all of your questions, and interface with the federal government on your behalf.
9. There Are Several Reasons to Consider Blowing the Whistle on Procurement Fraud
If you have information about government procurement fraud, there are several reasons to consider coming forward. While the prospect of a financial reward is appealing to many, blowing the whistle is also simply the right thing to do. Contractors that engage in procurement fraud deserve to be held accountable, and helping federal and state governments recover taxpayer funds—while also helping to mitigate the risk of future losses—is beneficial for everyone.
10. It Is Up to You to Decide Whether to Blow the Whistle on Procurement Fraud
Ultimately, however, whether you decide to serve as a procurement fraud whistleblower is up to you. While an experienced whistleblower lawyer will help you make sound decisions, your lawyer should not pressure you into coming forward. It is a big decision to make, and it is one that you need to make based on what you believe is the right thing to do under the circumstances at hand.
As we mentioned above, however, time can be of the essence in this scenario. With this in mind, if you believe that you may have inside information, you should not wait to report fraud to the government. Your first step is to schedule a free and confidential consultation with an experienced procurement fraud whistleblower lawyer—and this is a step that you should take as soon as possible.
Opposition to Renewed COPA Application in Indiana Reveals FTC Leadership’s Views on Hospital Merger Enforcement
The Federal Trade Commission (FTC) recently submitted comments in opposition to a renewed application for a certificate of public advantage (COPA) that would, if granted, allow two hospitals in Indiana to merge despite potential antitrust concerns.
In its submission, the FTC suggested that it had no institutional bias against COPAs but routinely objects because of the price increases, declines in quality, and lower wages that the FTC argues result from most mergers subject to a COPA.
The FTC also said that it takes “failing-firm” defense arguments (i.e., the claim that one of the parties to the transaction will fail unless the merger is permitted) seriously and “never wants to see a valued hospital exit a community.” Furthermore, the FTC stated that it “has not challenged mergers with hospitals that are truly failing financially and cannot remain viable without the proposed acquisition.”
Nevertheless, the FTC noted the potential for cross-market harms as a reason to object to the Indiana hospitals’ COPA application. The FTC identified businesses with employees in counties not directly in the hospitals’ service areas who might be adversely affected by the transaction, the impact on the cost of health care for state employees, and the purported effect on patients insured by Medicare and Medicaid as reasons to object to the proposed application.
Trump Administration Announces “Reciprocal” Tariffs
On April 2, 2025, President Trump announced a minimum tariff of 10% on all imported goods, which take effect on April 5 at 12:01am EDT. He also announced “discounted reciprocal tariffs” higher than 10% for goods from several additional countries. In a separate order, the administration also announced the elimination of the de minimis exception to tariffs for goods coming from China.
Our Tariff Strategy team has distilled these latest orders into these important provisions:
Elimination of the de minimis exception – which exempts shipments of goods valued at less than $800 – for China unless sent through the international postal service. While de minimis was eliminated for China under a previous order, it was stayed due to challenges in its implementation. As this latest order is more specific regarding tariff collection mechanisms, it is more likely to be implemented on time. For those shipments through international postal services, de minimis will remain intact but other duties will come into effect, including 30% of shipment value OR $25 per item. Comes into effect May 2 and postal item duty escalates to $50 on June 1.
“Reciprocal tariffs” applicable to countries worldwide. These are the key provisions:
All countries: 10% tariff on all articles imported into the U.S. (not including services). Comes into effect at 12:01am EDT April 5, except goods loaded and in final mode of transit prior to 12:01am EDT on April 5.
Country-by-country: Country “reciprocal tariffs” – click here for the detailed list of countries. Comes into effect at 12:01 EDT on April 9.
Exemptions: These duties do NOT apply to a specific list of HTS codes, found here. This includes articles subject to the tariffs already imposed on steel, aluminum, copper, cars, and auto parts (those tariffs stand; these tariffs are not added on). Other exemptions include pharmaceuticals, semiconductors, lumber articles, certain critical minerals, and energy and energy products. Any future tariffs pursuant to Section 232 will replace these tariffs.
USMCA: Other than those subject to exemptions OR goods originating from Canada and Mexico (as defined by USMCA), these duties are in addition to existing tariffs. If the goods are from Canada and Mexico but do NOT qualify as originating under USMCA, they are already subject to 25% tariffs except energy, energy resources, and potash from Canada, which are 10%.
Origin: These duty rates apply only to the “non U.S. content” of the article, if at least 20% of the content originates in the U.S.
De minimis exceptions remain available (except for China under the other order) for an indefinite period of time until Customs has processes in place to collect it; once those processes are in place de minimis will be eliminated for all countries.
It’s important to note that any tariffs on China — both in these orders and going forward — apply to Hong Kong and Macau as well. As it currently stands, all imports from China carry a MINIMUM tariff of 54%.
The order makes clear that the U.S. is open to negotiation. The responses of U.S. primary trade partners have varied, from threats of retaliatory tariffs to indications they will enter into negotiations with the administration to see if they can reduce them or exempt particular goods. Some countries are considering “countermeasures” that might go beyond tariffs.
The Senate has signaled its discomfort with tariffs against Canada, passing a bill (including Republican support) to undo the Canada tariffs by invalidating the “national emergency” that was used as the presidential authority to impose the tariffs. While the vote is symbolic, as the House has already committed to maintaining the national emergency and the White House has said it would veto the bill in any event, the bill may signal that tariffs on Canadian goods will be eased.
Our Tariff Strategy team suggests that companies should:
Check your contracts: whether the buyer or the seller ultimately pays the tariffs usually hinges on contract language rather than statutory or administrative law, and multiple clauses might be applicable depending on how tariffs and duties are defined.
Revisit shipping terms: different INCOTERMS can shift responsibility for payment, so companies may want to consider whether they want to adjust their shipping terms.
Check the HTS code under which you import to see if your product is exempt, and review products to determine if they may qualify for a tariff reduction if they contain U.S. origin components.
Consider standing by and delaying high-value imports for the moment if possible, as some countries will negotiate with the U.S., so their tariffs may be delayed or reduced.
USPTO Memorandum Bifurcating PTAB Institution Process Signals Shift Toward Increased Discretionary Denials in IPR and PGR
New Interim Process for Patent Trial and Appeal Board Workload Management
The USPTO has fundamentally altered the PTAB institution decision framework through a March 26, 2025, memorandum from Acting Director Coke Morgan Stewart. In a significant departure from existing practice, the memorandum details the Acting Director’s decision to bifurcate discretionary denial determinations from merits-based reviews. This update analyzes the procedural changes and their implications for PTAB practice.
Understanding Discretionary Denial Authority
The Director of the USPTO has long claimed broad statutory authority under 35 U.S.C. §§ 314(a) and 324(a) to deny institution of IPR and PGR proceedings, even when petitioners meet the threshold showing of unpatentability. The US Supreme Court confirmed in United States v. Arthrex (2021) that “Congress has committed the decision to institute inter partes review to the Director’s unreviewable discretion.” This “discretionary denial” power allows the USPTO to decline review for reasons unrelated to the technical merits of the petition — such as parallel district court litigation timing (so-called Fintiv denials), serial petitioning (General Plastic denials), or prior consideration of the same arguments (Advanced Bionics/325(d) denials).
Historically, this discretionary denial authority has been delegated to the three-judge PTAB panel assigned to each petition, which considered both discretionary and merits-based grounds simultaneously when evaluating institution. The Acting Director’s new memorandum fundamentally changes this approach by removing responsibility for decisions on discretionary denial from the PTAB’s panels and vesting it in the Director herself.
The Complex Pre-Institution Timeline Under the New Process
The new bifurcated approach creates a complex pre-institution process with distinct phases for discretionary and merits considerations:
Notably, the statutory three-month clock for the PTAB’s institution decision begins running at the Preliminary Response filing date. This creates an unprecedented scheduling challenge. If the Director must personally decide discretionary issues for more than a hundred petitions monthly, the discretionary review process could take considerable time, even with the assistance of several APJs. This delay in addressing the petition’s merits will likely consume a significant portion of the statutory window between the Petitioner’s discretionary denial brief and the institution decision, leaving the merits panel with limited time to evaluate the case if the Director decides against discretionary denial. (If the Director grants Patent Owner a discretionary denial reply, this time period for evaluation on the merits is shortened even further.) The memorandum provides no guidance on how the PTAB will manage these overlapping timelines or what will happen if the Director’s discretionary review extends too close to the statutory institution deadline, delaying assignment of a case to a merits panel.
Workload Management: Justification and Context
The memorandum explicitly cites “current workload needs of the PTAB” as the driving force behind these procedural changes, with a stated aim to “improve PTAB efficiency, maintain PTAB capacity to conduct AIA proceedings, reduce pendency in ex parte appeals, and promote consistent application of discretionary considerations.” This workload concern appears directly connected to recent federal workforce policies affecting the USPTO.
The Trump administration’s “fork-in-the-road” deferred resignation program, government-wide hiring freeze, and return-to-office mandates have anecdotally led to significant attrition among Administrative Patent Judges (APJs). With approximately a dozen APJs taking the “fork” offer, and others announcing early retirement, a reasonable estimate is that the PTAB has already lost approximately 10 percent of its judge corps in recent months. While the USPTO memorandum characterizes this situation as “temporary,” it is unclear how the situation is likely to improve in the near term. In fact, PTAB Chief Judge Scott Boalick recently notified his organization to prepare for a reduction-in-force (RIF).
However, the Acting Director’s memorandum implementing an entirely new process for evaluating discretionary denials raises questions about how workload benefits will be realized by the PTAB. Realistically, more than three APJs will need to “consult” with the Director to keep pace with the 100-plus petitions filed each month, as it is reasonable to assume that patent owners will seek discretionary denial in almost every, if not every, case. Diverting these APJ resources to a separate discretionary denial process does not appear likely to free up resources to consider the merits of IPR/PGR challenges; rather, it merely moves those resources under the Director’s direct control. The only way the bifurcated process is likely to result in a significant reduction of the PTAB’s workload will be if the new procedure leads to an increase in discretionary denials. Thus, despite the memo’s workload justification, its practical effect will likely be to increase discretionary denials, which will, in turn, reduce the overall institution rate for petitions.
New Discretionary Considerations: Expanded Scope With Little Precedent
The Director’s memorandum also substantially expands the factors that may justify discretionary denial far beyond the established framework. The factors include:
Whether any forum has previously adjudicated the patent claims’ validity.
Post-issuance changes in law or precedent affecting patentability.
The strength of the unpatentability challenge.
The extent of the petition’s reliance on expert testimony.
“Settled expectations” of the parties, including how long the patent has been in force.
Compelling economic, public health, or national security interests.
The PTAB’s workload capacity and ability to meet statutory deadlines.
Unlike the Fintiv, General Plastic, and Advanced Bionics discretionary denial considerations — which developed incrementally through PTAB precedent, with case law citations and regulatory justifications — the new factors appear to be novel and lack traditional statutory or regulatory foundation. This immediate expansion of discretionary considerations with little accompanying commentary leaves practitioners with extremely limited guidance on how these factors will be applied or weighed in practice.
Several considerations may be particularly likely to lead to increased uncertainty. The “settled expectations” factor suggests older patents might be immune from PTAB review based on their age, but the memorandum provides no guidance as to how old a patent needs to be before its validity cannot be subject to IPR. Similarly, the prospect of discretionarily denying a petition because of “the extent of reliance on expert testimony” may make petitioners question whether a detailed, comprehensive expert declaration may counterintuitively lead to denial of the petition. And from an efficiency standpoint, the “strength of the challenge” consideration will require the Director to examine the merits of each petition’s validity grounds, an evaluation which the PTAB merits panel will have to later undertake as well — a potentially inefficient duplication of effort, now built into the process.
Most concerning for stakeholders may be the explicit acknowledgment that the Director may deny institution based solely on PTAB “workload capacity.” If the USPTO begins denying meritorious challenges purely for administrative convenience, this factor risks transforming discretionary denial from a policy-based consideration into a resource management tool. It also may severely diminish the predictability of the Director’s discretionary denial evaluation — it is difficult to see how a prospective petitioner could adequately anticipate the workload demands of the PTAB three to six months in the future, when the Director will be deciding whether to deny a particular petition due to workload capacity.
Immediate Application and Strategic Considerations
The procedures outlined in the Acting Director’s memorandum apply to all IPR and PGR proceedings where the patent owner preliminary response deadline has not yet passed. For cases where the discretionary denial briefing timeline has already elapsed, patent owners have a one-month window from the memo’s date to submit discretionary denial arguments. Practitioners, therefore, must immediately adapt to these changes on behalf of their clients.
Patent owners may wish to capitalize on this shift by attempting creative new discretionary denial arguments that test the limits of the new factors announced by the Director, particularly emphasizing patent age and PTAB workload concerns. Petitioners should carefully evaluate the extent of their reliance on expert testimony and consider challenging the application of any new discretionary denial justifications that are applied without notice. All practitioners should closely monitor early decisions under this framework to identify how the Director weighs these new factors and consider whether alternative forums may now provide more predictable paths for patent challenges.
Finally, it is critical to recognize that decisions whether to institute an IPR or PGR are unappealable, and thus parties will have no opportunity to seek review of the Director’s decision whether to discretionarily deny a petition. Moreover, appellate courts will not have the ability to provide direct feedback to the USPTO on the new discretionary denial doctrines announced in the memorandum. Given that the new bifurcated process and considerations announced by the Acting Director were not the product of traditional notice-and-comment rulemaking as required by the Administrative Procedure Act, this means that the sole opportunity for stakeholders to have a voice in these rapidly developing doctrines is through case-specific briefing during pending IPR or PGR petitions. This context only heightens the importance of strategically developing arguments and counterarguments on discretionary denial under the new briefing process.
While characterized in the memorandum as “temporary,” it is reasonable to expect that these procedures will significantly impact PTAB practice for the foreseeable future. The USPTO has promised a “boardside chat” with PTAB leadership to address implementation questions, which will hopefully provide additional clarity on these sweeping changes. We will continue to monitor the significant changes to the PTAB and provide updates as warranted.
Cross-Border Catch-Up: Japan’s Expanded Childcare and Caregiver Leave [Podcast]
In this episode of our Cross-Border Catch-Up podcast series, Carlos Colón-Machargo (Atlanta) and Goli Rahimi (Chicago) delve into the upcoming amendments to Japan’s childcare and caregiver leave laws. Goli and Carlos discuss how these changes aim to promote flexible work arrangements and expand leave entitlements, as well as the implications of these expanded entitlements for employers.
EdTech and Privacy of Student Information: A Case Study
On March 27, 2025, a class action lawsuit was filed against the education technology (EdTech) company Instructure, the parent company of Canvas, a popular learning management system. The complaint alleges that Instructure violated children’s federal and state privacy rights. According to the complaint, Instructure states that it collects various account information about children, including name, gender/pronouns, academic institution and student ID, as well as profile pictures. Instructure also reportedly collects student activity data, such as messages, discussion comments, test results and grades, search activity, and user-submitted content. User-submitted content includes uploaded files, such as essays, research reports, photo/video media, and creative writing. The complaint asserts that this amount of data surpasses what is traditionally considered an education record and allows Instructure to “build dynamic, robust, and intimate dossiers of children.”
Let’s dive deeper into various allegations within the complaint and consider several themes.
Words matter
According to the complaint, Instructure’s terms state that it uses and discloses student information to, among other purposes, personalize the user experience, analyze trends, and track users’ movements around products. Specifically, the plaintiffs claim that some of Instructure’s platforms are designed to assist colleges and employers with recruitment by providing them access to data-derived student “insights.”
Companies should consider whether their uses and disclosures pertaining to personal information are transparent. If data may be used for marketing or advertising purposes, that should be clear to the consumer. If the data may be used in other related contexts, policies and terms should also make that clear. Vague words could lead to allegations of misleading statements.
The complaint also compiles various statements by Instructure and its officers regarding the organization’s data practices, including the Data Protection Officer’s statement that “privacy standards are embedded in our corporate DNA” and that Instructure’s privacy approach is “built upon five key principles: transparency, accountability, integrity, security, and confidentiality.”
Companies should be able to back up their statements about privacy practices with their actual privacy approach, or such publicly-made statements could be used against them in litigation.
Clarity of third-party access
The complaint asserts that Instructure uses an application programming interface (API) to allow third-party developers to build integrations through Instructure’s product suite. An API allows software applications to communicate and exchange data. According to the plaintiffs, Instructure’s Live Event API enables third parties to “access granular, child-specific information, such as time taken to finish a test, when a student submits a test, how long a child uses a product at a time, ‘common patterns’ among a child’s product usage, [and] what assignments are most challenging.” Furthermore, the product-specific Canvas API reportedly allows third parties to access data relating to user communications and group discussions, quiz submissions, and grades.
The average consumer does not understand “API” and “live event” nor know how an API transfers information, even if a company discloses its API use. Companies should make clear, in plain language, the nature and extent of information they share with partner institutions to avoid unauthorized disclosure claims.
Reasonably understandable information and informed consent
The plaintiffs assert that users of Instructure products cannot provide informed consent because a reasonable person would not know what they were consenting to in agreeing to use these products. The complaint lists 19 separate policies on Instructure’s data practices available on its website – including terms of use, privacy notice, and acceptable use policy – noting that “information relating to Instructure’s data practices and those of its third-party partners are scattered across its sprawling website and others’ websites.”
Companies may consider making their website terms of use and related agreements more understandable and accessible to the average consumer of that product/service to minimize the risk of “no consent” claims. For example, consumers in states with opt-out rights should easily be able to access information to exercise those rights. Providing numerous forms across varying locations could leave room for allegations that the company hid the ball regarding privacy.
Evolving role of EdTech
Among other state law claims, the complaint sets forth claims under the Fourth and 14th Amendments to the U.S. Constitution. Though claims of constitutional violations can only be brought against government entities, plaintiffs allege that Instructure is authorized to “perform a function that is traditionally and exclusively a public function performed by the government, namely, the collection and management of public-school-related data, including education records and other student information,” thereby making the company subject to constitutional requirements as a “state actor.” When our parents and grandparents went to school, digital access to student information with the click of a button did not exist. The digital transformation has allowed public and private entities to outsource various functions to third-party technology companies. In the state actor context, this evolution of roles poses an interesting question of where to draw the line on whether private technology companies themselves should become subject to the same regulations imposed on public actors in the interest of protecting fundamental rights
‘Catch and Revoke’ Program Takes Off: State Department AI-Driven Visa Crackdown
The U.S. State Department’s “Catch and Revoke” program uses artificial intelligence (AI) to monitor foreign nationals, particularly student visa holders. The program aims to identify individuals who express support for Hamas, Hezbollah, or other U.S.-designated terrorist organizations through social media activity or participation in protests and revoke their visas. To date, approximately 300 foreign nationals have had their visas revoked under this initiative.
AI tools scan social media accounts, news reports, and other publicly available information to flag individuals on visas for further investigation. The U.S. government maintains the program is a national security measure to help identify foreign nationals who should have been denied visas based on support for designated terrorist organizations. Critics argue the AI-driven process may rely on basic keyword searches that are prone to errors, raising concerns about fairness and accuracy. Advocacy groups warn the initiative undermines First Amendment rights by specifically targeting political speech and activism.
Recent arrests by ICE have included doctoral candidate students at several universities, following revocation of their visas. Students identified under the program have reported receiving online notifications that their visas are being canceled and advised them to “self-deport” using the CBP Home mobile app. Schools may also be notified through the Student and Exchange Visitor Program (SEVP) of a visa revocation under national security-related grounds, in which case the school’s designated school official (DSO) may be required to either cancel or terminate the I-20 record.
This initiative arises out of two executive orders that President Donald Trump issued shortly after taking office:
1. Executive Order No. 14161, “Protecting the United States from Foreign Terrorists and Other National Security and Public Safety Threats,” directing the secretary of state, in coordination with the attorney general, the secretary of homeland security, and the director of national intelligence, to promptly “vet and screen” all noncitizens who are already inside the United States “to the maximum degree possible.”
2. Executive Order No. 14188, “Additional Measures to Combat Anti-Semitism,” directing the secretary of state, the secretary of education, and the secretary of homeland security to provide “recommendations for familiarizing institutions of higher education with the grounds for inadmissibility under 8 U.S.C. § 1182(a)(3),” related to national security and support for terrorist organizations, so that schools can monitor and report activities in violation of the law.
On Mar. 25, 2025, the Knight First Amendment Institute filed a lawsuit seeking to block the Trump Administration’s policy of arresting, detaining, and deporting noncitizen students and faculty, including the “Catch and Revoke” program. American Association of University Professors, et al. v. Rubio, et al., No. 1:25-cv-10685 (D. Mass.).
The Catch and Revoke program reflects the Trump Administration’s heightened scrutiny of foreign nationals and highlights the tension between national security measures and civil liberties.
CISA Issues Malware Analysis Report on RESURGE Malware
On March 28, 2025, the Cybersecurity and Infrastructure Security Agency (CISA) released a Malware Analysis Report (MAR) on RESURGE malware, which is associated with the product Ivanti Connect Secure.
According to the MAR, “RESURGE contains capabilities of the SPAWNCHIMERA malware variant, including surviving reboots; however, RESURGE contains distinctive commands that alter its behavior. These commands:
Create a web shell, manipulate integrity checks, and modify files.
Enable the use of web shells for credential harvesting, account creation, password resets, and escalating permissions.
Copy the web shell to the Ivanti running boot disk and manipulate the running coreboot image.”
To address the vulnerability, CISA recommends that users and administrators:
Consider a factory reset.
Follow Ivanti’s recommended recovery steps.
Reset credentials of all accounts.
Reset passwords for all domain users and local accounts.
Review access policies to temporarily revoke access for affected devices.
Reset account credentials or access keys.
Monitor related accounts, especially administrative accounts.
Report incidents and anomalous activity to CISA.
The MAR is an important read for any businesses using Ivanti Connect Secure, Policy Secure, and ZTA Gateways.
Understanding the U.S. Embassy Paris Certification Requirement
Last week, the U.S. Embassy in Paris issued a letter and certification form to multiple French companies requiring companies that serve the U.S. Government to certify their compliance with U.S. federal anti-discrimination laws. This certification request was issued in furtherance of President Trump’s Executive Order 14173 on Ending illegal Discrimination and Restoring Merit-Based Opportunities, issued on January 21, 2025. This Order addresses programs promoting Diversity, Equity and Inclusion (DEI) and requires that government contractors’ employment, procurement and contracting practices not consider race, color, sex, sexual preference, religion or national origin in ways that violate the United States’ civil rights laws.
Certification Contents
The certification requires U.S. Government contractors to certify that they comply with all applicable U.S. federal anti-discrimination laws and do promote DEI in violation of applicable U.S. federal anti-discrimination laws.
While the letter was issued by the U.S. Embassy in Paris and is arguably limited to contractors serving that embassy, the requirement under the Executive Order extends to all contractors doing business with any U.S. Government agency.
Any company submitting the certification with knowledge that it is false will be deemed to have violated the U.S. False Claims Act, which imposes liability on individuals and companies who defraud governmental programs.
Implications for French Companies
This letter raises questions about the extraterritorial application of U.S. laws to foreign companies and their reach. In particular, while the Executive Order clearly applies to companies (irrespective of nationality) that directly supply or provide services to the U.S. Government, it is unclear whether, for example, the French parent of a U.S. subsidiary providing services to the U.S. Government would be subject to the certification.
The issue is complicated by the fact that French law in some ways conflicts with the provisions of the Executive Order – for instance, requiring that mid-sized and large companies have a minimum percentage of women sitting on their boards.
Neither the Executive Order nor the documents mention any exemptions or carve-outs for suppliers and service providers.
Conclusion
The U.S. Embassy’s certification requirement underscores the current complexities faced by international businesses in dealing with the U.S. Government. French companies should consider carefully assessing their DEI programs and overall compliance with U.S. federal laws while continuing to adhere to their own legal obligations, striking a careful balance as best they can.