GT Newsletter | Competition Currents | January 2025
United States
A. Federal Trade Commission (FTC)
1. Competitor collaboration guidelines withdrawal.
On Dec. 11, 2024, the FTC and DOJ Antitrust Division withdrew the Antitrust Guidelines for Collaborations Among Competitors. The agencies determined the Collaboration Guidelines, issued in April 2000, no longer provide reliable guidance on how enforcers assess the legality of collaborations involving competitors due to the subsequent development of Sherman Act jurisprudence, rapid evolution of technologies and business combinations, and reliance on outdated policy statements and analytical methods. The FTC voted 3-2 to withdraw the guidelines. Commissioners Andrew Ferguson and Melissa Holyoak issued separate dissents highlighting the absence of replacement guidance.
2. Trump names Andrew Ferguson as next FTC chair.
President-elect Donald Trump has named FTC Commissioner Andrew Ferguson as the next FTC chair. Sworn in on April 2, 2024, Commissioner Ferguson was one of two Republican FTC Commissioners President Biden appointed. He previously served as Virginia solicitor general, chief counsel to U.S. Sen. Mitch McConnell, and U.S. Senate Judiciary Committee counsel. Ferguson earned undergraduate and law degrees from the University of Virginia before clerking for the D.C. Circuit and U.S. Supreme Courts. The president-elect also announced his intention to nominate Mark Meador, a partner at law firm Kressin Meador Powers and former antitrust counsel to U.S. Sen. Mike Lee, as an FTC Commissioner to fill current FTC Chair Lina Khan’s seat.
B. U.S. Litigation
1. Borozny v. RTX Corp., Case No. 3:21-CV-01657 (D. Conn.).
On Jan. 3, 2025, the Honorable Judge Sarala V. Nagala initially approved a $34 million settlement for a nationwide “no-poach” class action against several aerospace companies. The proposed $34 million settlement from the principal defendant, RTX, settles claims that RTX entered into agreements with several suppliers and competitors to not hire one another’s aerospace engineers—a highly skilled profession. This civil suit ran parallel to the DOJ’s criminal case, which was dismissed by another court. If approved, the $34 million settlement from RTX would augment the $26.5 million settlement previously negotiated with other alleged conspirators.
2. 2311 Racing LLC, et al. v. National Association for Stock Car Auto Racing, LLC, Case No. 3:24-CV-886 (W.D. N.C.).
On Dec. 20, 2024, defendant National Association for Stock Car Auto Racing, LLC (NASCAR) sought to stay a preliminary injunction that prevents NASCAR from barring various racing teams who initiated an antitrust lawsuit from competing in the 2025 season. Initiated by 2311 Racing, the lawsuit alleges that NASCAR exercises monopoly power over racetracks and requires all NASCAR teams not to participate in competing events. According to 2311, NASCAR then barred its participation in the upcoming 2025 season because, among other things, 2311 would not sign contracts that require the teams to relinquish all rights to bring antitrust claims. The Honorable Judge Kenneth D. Bell granted 2311’s preliminary injunction requiring NASCAR to allow the teams to compete, which NASCAR intends to appeal in the Fourth Circuit.
3. SmartSky Networks, LLC v. Gogo Inc., Case No. 3:24-CV-01087 (W.D. N.C.).
On Dec. 17, 2024, airplane technology company SmartSky Networks, LLC brought a $1 billion lawsuit against competitor Gogo, Inc. and Gogo Business Aviation, LLC (collectively, Gogo). SmartSky alleges Gogo unfairly blocked it from selling its in-flight Wi-Fi services to private aircraft customers. According to the lawsuit, Gogo engaged in a systematic campaign to create “fear, uncertainty and doubt” about SmartSky’s allegedly superior services while falsely promoting a future Gogo alternative that never launched. As a result of this campaign, SmartSky claims it failed after nearly 10 years of trying to enter the market.
Mexico
A. COFECE discovers possible collusion in radiological material sales to the government.
COFECE’s Investigating Authority has issued a Probable Liability Opinion against several companies and individuals accused of rigging public tenders for radiological material, an illegal act under the Federal Economic Competition Law.
In Mexico, public health institutions perform more than 20 million x-rays a year. The Mexican Social Security Institute conducts approximately 19 million of these studies annually, while the Institute of Security and Social Services for State Workers conducts an additional 1.6 million.
In its announcement, COFECE highlighted that when companies agree not to compete in tenders, they not only affect public finances, but also compromise Mexicans’ access to essential medical services. COFECE further emphasized that transparency, equity, and efficiency are fundamental principles that should govern government procurement, especially in the health sector. A trial will follow.
B. COFECE investigates lack of effective competition in live entertainment events.
COFECE’s Investigating Authority (AI) has initiated an investigation into live entertainment markets to determine if there are obstacles that limit competition in these markets, which could negatively impact the millions of live entertainment event consumers.
Between 2023 and 2024, half of adults in Mexico attended live entertainment events, such as concerts, live music or dance performances, plays, and art or history exhibitions. In 2023 alone, Mexicans spent more than MEX 7 billion on online tickets for music events. This positions Mexico as the largest Latin American market for the sale of tickets to musical events and the 16th largest market worldwide.
Through its investigation, the AI seeks to identify and eliminate the barriers that prevent competition in these markets. If the AI identifies barriers to competition or essential inputs, the COFECE Plenary may order eliminating those barriers, issue recommendations and guidelines for their regulation, and/or order divestment to improve efficiency.
The Netherlands
Dutch ACM Statement
Further investigation into KPN joint venture’s acquisition of DELTA needed.
The Dutch Authority for Consumers and Markets (ACM) has decided that further investigation is required for Glaspoort’s (a joint venture of KPN and APG) acquisition of a portion of Delta Fiber Nederland’s fiber optic network. KPN is the incumbent telecommunications operator in the Netherlands, while Delta is currently KPN’s largest competitor in the fiber optic market.
According to the ACM, the acquisition may significantly reduce competition in the areas where KPN and Delta operate, potentially leading to higher prices for consumers. The ACM also points out that KPN already has a substantial market position, and the acquisition could further strengthen this position, putting smaller providers at a disadvantage. Finally, while each individual small acquisition may have a limited impact, the cumulative effect of KPN’s multiple, small acquisitions could significantly undermine competition in the long term, which may weaken smaller providers’ negotiating positions.
Before the acquisition can be finalized, Glaspoort and Delta must apply for an acquisition license – the equivalent of a Phase II or in-depth investigation in other jurisdictions – after which the ACM will continue its investigation.
Poland
A. The UOKiK President questions consortium agreements and other competitor practices accompanying tenders.
The Polish Office of Competition and Consumer Protection (UOKiK) has fined 11 geodesy and cartography companies PLN 1.8 million (approximately EUR 422,000 / USD 436,000) for bid-rigging in cartographic services contracts with the Geodesy and Cartography Agency.
The investigation found that these companies engaged in anticompetitive practices through several coordinated actions. The companies formed unnecessarily large consortia, submitted coordinated bids, and divided awarded contracts among themselves. Some participating companies performed no actual work, serving only as nominal consortium members. UOKiK determined that smaller consortia could have completed the projects independently, indicating the larger groups were formed solely to eliminate competition.
In a separate case, UOKiK has initiated antitrust proceedings against seven laundry service providers suspected of bid-rigging in hospital service contracts. The investigation uncovered evidence of potential price-fixing across multiple provinces and coordinated withdrawal of bids. During court-approved searches conducted with police assistance, investigators discovered mobile app communications showing companies exchanging specific price information to influence tender outcomes. The investigation revealed that participants strategically withdrew lower bids to ensure higher-priced bids would win, likely resulting in increased costs for hospitals and patients. This investigation remains ongoing.
Companies found engaging in bid-rigging face severe penalties under Polish law. Organizations can be fined up to 10% of their annual turnover, while individual managers may face personal fines up to PLN 2 million. These regulations apply regardless of company size, as there are no exemptions for companies with small market share. Any anti-competitive provisions in contracts are automatically void under law. Furthermore, affected parties retain the right to seek damages through private antitrust litigation. Notably, bid-rigging stands as the only form of competition-restricting agreement that may result in criminal penalties, including imprisonment.
B. The UOKiK President investigates ENEA Group’s potential abuse of dominant position in renewable energy market.
The Polish Office of Competition and Consumer Protection (UOKiK) has launched an explanatory investigation into the ENEA Group, a major Polish energy conglomerate responsible for electricity generation, distribution, and trading. The investigation focuses on ENEA Operator, the group’s distribution arm, which holds a natural monopoly in its regional distribution network.
The investigation stems from allegations that ENEA Operator may have provided unfair advantages to renewable energy installation (OZE) applications from its own group companies and select third-party businesses. Following these concerns, UOKiK conducted searches at three ENEA Group facilities. Complaints UOKiK received indicate that ENEA Operator may have shown preferential treatment by issuing connection approvals to certain entities that failed to meet formal requirements or by disregarding the chronological order of application submissions. These practices allegedly resulted in other entities being unfairly denied network connections for their renewable energy installations.
UOKiK suspects that this preferential allocation of connection capacity may have depleted available capacity at crucial balancing nodes, leading to the rejection of other companies’ connection requests due to claimed technical limitations. This issue is particularly significant because network access is fundamental for participation in the electricity trading market.
The investigation is examining whether these actions constitute an abuse of dominant market position, particularly regarding the selective restriction of access to essential infrastructure, discriminatory access conditions, or intentional delays in providing access. Additionally, UOKiK is investigating potential illegal agreements between ENEA Operator and the entities receiving preferential treatment for renewable energy installations.
Should the investigation yield sufficient evidence, UOKiK may initiate formal antitrust proceedings against the involved parties. Under Polish law, companies found to have abused their dominant position face fines of up to 10% of their previous year’s turnover. This penalty may extend to entities exercising decisive influence over the company engaged in such practices. Furthermore, any anti-competitive contractual provisions are automatically void, and affected parties maintain the right to pursue damages through court proceedings.
Italy
Italian Competition Authority (ICA)
1. ICA launches investigation into alleged cartel in copper cable manufacturing industry.
On Dec. 3, 2024, ICA opened an investigation against the Italian main copper cable producers for an alleged restrictive competition agreement aimed at coordinating prices and commercial conditions for producing and selling low-voltage copper cables in violation of Article 101 TFEU.
The proceeding started after a company submitted an application for leniency that disclosed the cartel to benefit from a reduced penalty.
The leniency applicant provided evidence to ICA about price coordination between the different parties. According to the applicant, this coordination started in 2005 when the parties aligned their list prices and initial discounts. Later, in 2008, they created a shared system within their association to adjust prices when copper costs changed. The system included a common way to calculate copper prices. This made the copper component a fixed price that was the same for all producers in the association.
2. Investigation against Booking.com (Italy) closed for allegedly abusing dominant position.
On Dec. 17, 2024, ICA closed its investigation against Booking.com S.r.l. (Italy), Booking.com B.V., and Booking.com International B.V. (Booking) for alleged abuse of dominant position after it accepted Booking’s proposed commitments.
ICA had initiated the proceedings because of Booking’s potentially abusive conduct that allegedly limited Italian hotel facilities’ autonomy to differentiate their rates between Booking.com and other online sales channels by adhering to certain programs Booking promoted, such as the Partner Preferiti and Preferiti Plus programs, which give search result visibility advantages in exchange for higher commissions, and the so-called Booking Sponsored Benefit, which allows Booking to apply – without the hotels’ consent – a discount to align the offer on its platform with the best among those available online.
The group submitted a commitment package that would seek to ensure that prices facilities charge on online sales channels, other than booking.com, would not be taken into account at any stage of its operation and program promotions. In addition, greater transparency around the Preferred Partner, Preferred Plus, and Booking Sponsored Benefit program operations allows facilities to make informed decisions regarding the costs and benefits of participating in them. According to ICA, Booking’s commitments are suitable both for removing competitive concerns and for ensuring the commercial autonomy of Italian hotel facilities.
3. ICA imposed penalties exceeding EUR 2 million on Hera S.p.A. and ComoCalor S.p.A. for excessive and unjustified district heating prices.
Between May and June 2023, ICA initiated three proceedings into the networks of Ferrara (operated by Hera S.p.A.), Como (operated by ComoCalor S.p.A.), and Parma and Piacenza (operated by Iren Energia S.p.A.) to investigate whether and to what extent the three companies had passed on an excessive and unjustified burden to the users of district heating networks between 2021 and 2022, when there had been natural gas price increases.
On Nov. 26, 2024, ICA stated that the conduct that Hera S.p.A. and ComoCalor S.p.A. engaged in from Jan. 1-Dec. 31, 2022, consisting of applying unjustifiably burdensome prices to district heating users, constitutes abusive conduct of their dominant position.
ICA imposed a penalty of EUR 1,984,736 on Hera S.p.A. and EUR 286,600 on ComoCalor S.p.A., arguing that the companies prevented consumers from benefiting from available and affordable renewable sources to produce an essential good (heat), and imposed prices that were unfair in relation to costs (including a fair return on investment).
ICA found no violations related to the Parma and Piacenza networks that Iren Energia S.p.A. operates.
European Union
A. European Commission
1. European Commission fined Pierre Cardin and Ahlers EUR 5.7 million for limiting cross-border clothing sales.
The European Commission fined Pierre Cardin and its licensee Ahlers EUR 5.7 million for violating EU antitrust rules. Pierre Cardin, a French fashion house, licenses its trademark to third parties for producing and distributing clothing branded with its name. Ahlers was Pierre Cardin’s largest licensee of clothing in the EEA during the relevant period. Between 2008 and 2021, both companies participated in anti-competitive agreements and coordinated practices that safeguarded Ahlers from competition within its licensed EEA area. This included preventing other licensees from selling Pierre Cardin clothing outside their territories or to low-price retailers. The Commission calculated the fines based on the severity, geographic scope, and duration of the infringement, with Pierre Cardin receiving a EUR 2,237,000 fine and Ahlers being fined EUR 3,500,000.
2. European Commission approves Nvidia’s acquisition of Run:ai.
The European Commission has unconditionally approved Nvidia’s below-threshold acquisition of Run:ai, concluding that it raises no competition concerns. This decision follows a referral by the Italian Competition Authority under Article 22 of the EU Merger Regulation (EUMR), which allows member states to request deal reviews that fall below national turnover thresholds, following concerns about Nvidia’s potential “super-dominance” in the advanced GPU market.
A recent ruling from the European Court of Justice influenced the European Commission’s review; the case invalidated its previous approach to Article 22 EUMR. In its recent assessment, the European Commission determined that the acquisition would not impair competition, as Nvidia would not have the incentive to make its GPUs less compatible with competitors’ software. The European Commission also found Run:ai’s position in the software market for GPU orchestration to be not significant, with sufficient alternative providers available.
B. ECJ Decision
Preliminary CJEU ruling in ongoing proceedings between Tallinna and KIA Auto.
The Court of Justice of the European Union (CJEU) provided a preliminary ruling on the interpretation of Article 101(1) TFEU (the EU’s cartel prohibition provision), following questions from the Administrative Regional Court of the Republic of Latvia. The case involved Tallinna Kaubamaja Grupp AS and KIA Auto AS, which were fined for a vertical agreement that imposed restrictions on car warranties. The national competition authority determined that this agreement hindered access to the Latvian market for independent repairers and restricted independent spare parts manufacturers. The CJEU stated that Article 101(1) TFEU should be interpreted to mean that a national competition authority does not need to demonstrate the existence of concrete and actual competition-restricting effects when investigating an agreement that imposes restrictions on car warranties. It is sufficient to establish the existence of potential competition-restricting effects, provided they are sufficiently appreciable. Now the proceedings shall resume, and the national court will have to evaluate if the Latvian competition authority’s decision demonstrated sufficiently appreciable effects on competition.
Alan W. Hersh, Rebecca Tracy Rotem, Sarah-Michelle Stearns, Miguel Flores Bernés, Hans Urlus, Robert Hardy, Chazz Sutherland, Gillian Sproul, Manish Das, Robert Gago, Filip Drgas, Anna Celejewska-Rajchert, and Ewa Głowacka also contributed to this article.
Employment Law This Week – PAGA in California, NLRB Authority, New Employment Laws in 2025 [Video, Podcast]
This week, while recognizing that it’s far from “business as usual” in California and keeping our friends and clients in mind, we look at a new ruling in California regarding Private Attorneys General Act (PAGA) arbitrations.
We also examine a federal appeals court decision limiting the authority of the National Labor Relations Board (NLRB) and the flurry of new employment laws taking effect in 2025.
2024 Hatch-Waxman Year in Review
Introduction
In 2024, the Hatch-Waxman Act continued to play a critical role in the U.S. pharmaceutical landscape, driving the dynamics between brand-name drugmakers and generics. This landmark legislation, enacted to encourage innovation while ensuring access to affordable medications, remained a focal point for numerous legal battles and regulatory shifts. Key decisions throughout the year have refined interpretations of its provisions, influencing patent challenges, market exclusivities, and the pathway for generics. As the pharmaceutical sector navigates evolving market pressures, agency action, and possible legislation, the legal contours of the Hatch-Waxman Act continued to impact both the business and legal strategies of pharmaceutical companies in 2024.
The Year By Numbers
In the year 2024, 312 complaints were filed initiating Hatch-Waxman litigation (compared to 259 in 2023)1:
As evident above, the overwhelming majority of ANDA complaints were filed in the District of Delaware and the District of New Jersey. This common trend remains consistent for the same reasons these district courts have always been hubs for ANDA litigation: most pharmaceutical companies are incorporated in Delaware and are commonly headquartered in New Jersey. Furthermore, because these two jurisdictions handle the majority of ANDA litigation, the local patent rules and proclivities of judges within these districts generally account for the unique procedural complexities that large-scale Hatch-Waxman litigation can impose on these dockets.
Given that Hatch-Waxman litigation is statutorily decided at the bench if it goes to trial, it behooves all litigants to have matters handled by judges experienced in the technical subject matter. As shown above, almost 50% of all ANDA complaints filed were assigned to one of five judges, ensuring that those judges have familiarity with common Hatch-Waxman substantive and procedural issues, and usually leading to a rapport between those judges and the attorneys that frequently litigate in front of them.
In 2024, 283 on-going Hatch-Waxman litigations were either resolved or terminated.2 There was a slight decrease in settlements in 2024: 39% of terminated matters in 2024 compared to 50% in 2023.3 Innovator companies (i.e., NDA & patent holders) were considered to have prevailed on issues 20% of the time, whereas generic companies were considered to have prevailed on issues only 2% of the time (i.e., those decisions excluding settlements and procedural resolutions). While these statistics may suggest that innovator companies find favorable resolutions more frequently than generic manufacturers, generics generally may be more inclined to seek settlement when perceiving a likely favorable outcome, rather than continue litigation. This trend existed in 2023 and remained in 2024.
Looking at patent findings from 2024 (below4), evidently very few ANDA cases were decided at summary judgment in 2024, a frequency from which few conclusions can be drawn. When cases went to trial, however, we saw a finding of infringement more frequently than noninfringement, and validity was upheld more frequently than not. Of those that were held invalid at trial, most were decided on obviousness grounds. Granted, however, these numbers don’t consider invalidity positions that were dropped due to case narrowing prior to trial, rather than on the merits.
This contrasts slightly to the results from 2023 (below5):
Namely, judges were seemingly more reticent to find patents invalid at summary judgment in 2024, while they did so three times in 2023 – again, however, a small sample size. In good news for innovator companies, district courts not only held patents invalid at trial far less frequently in 2024 compared to the year prior: 4 of 17 (24%) and 9 of 15 (60%), respectively. District courts also found infringement of valid patents at trial slightly more in 2024 compared to the year prior: 9 of 13 (69%) versus 6 of 10 (60%), respectively.
Federal Circuit Decisions and the Greater Context In Which They Fit
We saw a slight uptick in Hatch-Waxman decisions from the Federal Circuit last year (7 in 2024 compared to 5 in both 2023 and 2022), some of which significantly affect going forward how practitioners and in-house counsel manage and plan their IP strategies, expand their portfolios through prosecution, and preserve existing exclusivities in the federal courts and in front of the Patent Trial and Appeal Board. Some of the decisions we’ve seen from the Federal Circuit in 2024 were also germane to broader agency and legislative proposals that could come to fruition in 2025, as discussed below.
Edwards Lifesciences v. Meril Life Sciences6& the Safe Harbor Provision
Holding: The Hatch-Waxman safe harbor applied to the importation of two demonstration samples to a medical conference for the purpose of recruiting clinical investigators to support FDA approval.
Although not a decision surrounding the filing of an ANDA, the Federal Circuit began their 2024 Hatch-Waxman jurisprudence addressing the safe harbor provision, 35 U.S.C. § 271(e)(1): a valuable mechanism for fostering innovation in the pharmaceutical space. Federal Circuit precedent has interpreted the provision as broad, applying “as long as there is a reasonable basis for believing that the use of the patented invention will produce the types of information that are relevant to an FDA submission,”7 and even extending to activities which may be promotional rather than regulatory, but “where those activities are consistent with the collection of data necessary for filing an application with the FDA.”8 Here, Judges Stoll, Cunningham, and Lourie (dissenting) addressed whether the importation of two demonstration-only transcatheter heart valves for a conference during the process of pre-market approval was protected by the safe harbor, and ultimately affirmed precedent.9 As Judge Stoll put it, the question is not why or how the devices were imported or used, but whether the importation was for a use reasonably related to submitting information to the FDA.10 It was here. On appeal from a grant of summary judgment of no infringement, the Federal Circuit affirmed that there was no genuine dispute of material fact that Meril imported the devices for purposes reasonably related to recruiting investigators during pre-market approval processes and thus was covered by the safe harbor provision.11 For innovator companies, especially those in crowded commercial spaces where the risk of “brand-to-brand” litigation is higher, the safe harbor’s broad applicability to a variety of pre-approval activities under the ”reasonably related” standard offers peace of mind throughout early stages of product development; however, practitioners should advise their clients that the safe harbor is less helpful post-FDA approval, where routine submissions aren’t generally afforded the same protection.12
While courts may view the Hatch-Waxman safe harbor as offering a “wide berth,”13 U.S. patent law generally has a particularly narrow experimental use defense to patent infringement.14 The Edwards decision was followed months later by a request for public commentary by the United States Patent and Trademark Office (USPTO) on the potential legislative codification of the experimental use exception.15 To date, statutory experimental use defenses are confined in the U.S. to the Hatch-Waxman Act16 and the Plant Variety Protection Act,17 but are codified in a much broader fashion in other leading IP countries, such as Germany, China, and India. Feedback to the USPTO’s request was mixed; proponents of further codification suggested the exception was overly narrow, vague, or detrimental to US innovation on the global scale, whereas those with opposing viewpoints generally suggested the status quo was sufficient. At this time, the USPTO has not taken any further public action on the topic, but don’t be surprised if we see legislation promoting American innovation in 2025, such as an expanded codification of the experimental use defense.
Salix Pharmaceuticals v. Norwich Pharmaceuticals,18Post-trial Section VIII Carve-outs, and the Obviousness of Polymorph Patents
Holding: The district court did not err in denying the generic’s motion to modify judgment after amending its ANDA to remove an infringing indication after trial; the district court also did not err in finding that a person of ordinary skill in the art would have a reasonable expectation of success obtaining certain polymorph forms of rifaximin.
One month later, the first ANDA decision came from the Federal Circuit from Judges Lourie, Chen, and Cunningham (dissenting in part), who issued a surprising decision in light of (but not contradictory to) previous rulings on polymorph patents, while also addressing a unique post-trial tactic by the ANDA filer to gain earlier entry into the market. With respect to the former, Federal Circuit precedent has made it clear that finding polymorph claims obvious is a tall task given the unpredictability of chemical polymorphism and therefore the lack of reasonable expectation of success, as discussed in Grunenthal GMBH v. Alkem19 (2019) and Pharmacyclics v. Alvogen20 (2022). However, unique to this case were the “distinct factual predicates” that justified the district court’s obviousness finding.21 The prior art here contained examples which disclosed in detail the process that would produce the claimed polymorph, turn demonstrating a reasonable expectation of success in doing so.22 Therefore, unlike in previous § 103 decision on polymorphs, those at issue here was appropriately found to be obvious. Separately, Norwich’s ANDA sought to market generic Xifaxan for three indications: travelers’ disease, hepatic encephalopathy (HE) and irritable-bowel syndrome with diarrhea (IBS-D).23 However, when the district court ordered that the ANDA would not be approved until the expiry of the HE patents (which were found infringed), Norwich amended its ANDA post-trial to remove the infringing HE indication and sought to modify the judgment and gain earlier market entry.24 Both the district court and Federal Circuit rejected this attempt.25 The latter held that “it [was] not the potential use that of the drug for HE that is the relevant infringement,” but instead “the submission of the ANDA that included an infringing use,” and therefore “[t]hat the ANDA further recited a non-patent-protected indication does not negate the infringement resulting from the ANDA’s submission.”26 Further, allowing amendment of an ANDA at the Rule 60 stage is in the discretion of the district court, and the Federal Circuit’s affirmation of the district court’s decision created strong precedent that determining “whether an ANDA applicant has successfully carved out language from a label to turn infringement into non-infringement” “would essentially be a second litigation,” and is “inequitable and inappropriate.”27
This decision offers two key takeaways for counsel for both innovators and generics: for the former, the nonobviousness of polymorph patents is not a guaranteed, despite the unique, unpredictable nature of the science and the general position of related jurisprudence. While finding polymorph patents obvious is still a significant challenge given their general nature, it is possible for the right facts to line up correctly in a § 103 analysis. For generic companies, future tactical attempts to carve out infringing indications post-trial now must overcome cut-and-dry precedent suggesting the futility of the practice to gain earlier market entry.
Amarin Pharma v. Hikma Pharmaceuticals28 & Skinny Labels
Holding: The complaint plausibly pleaded induced infringement based on the label and public statements made by the generic manufacturer.
The next panel from the Federal Circuit (Moore, Lourie, Albright) next dealt with what seemed like a section viii carve out ANDA case, but was rather a “run-of-the-mill induced infringement case.”29 The generic product, an icosapent ethyl already on the market, was approved for only one of the two indications (treatment of severe hypertriglyceridemia) that the NDA product (Vascepa) had been approved for, but included no limitation of use as to the second indication, and the generic manufacturer had made repeated public statements referring to itself as the “generic Vascepa,” despite being approved for only half the indications.30 Unique to this case was that it was appealed from the motion to dismiss stage, and thus discovery had not occurred.31 Not in dispute however was that the complaint sufficiently alleged direct infringement, knowledge, and intent, and thus the Federal Circuit’s decision focused on whether an “inducing act” was sufficiently alleged – it was.32 Reversing the district court’s dismissal, the Federal Circuit managed to walk along the “careful balance struck by the Hatch-Waxman Act regarding section viii carve-outs,” emphasizing that this decision did not “effectively eviscerate section viii-carveouts,” as argued by Hikma, and was instead “limited to the allegations” and “guided by the standard of review appropriate for this stage of the proceedings.”33 Given those explicitly limiting statements, this decision does little to affect true section viii jurisprudence under the Hatch-Waxman Act, and thus for practitioners, reliance on cases such as GlaxoSmithKline v. Teva (2021)34 is still appropriate for skinny label analyses.
Following the Salix and Amarin decisions in 2024 we saw new related agency action from the FDA and year-end legislation. In July 2024, the FDA rejected a citizen’s petition from Novartis requesting the FDA reject ANDAs for generic Entresto, instead allowing generic manufacturers to add new language to their label, not included in the currently approved indication, that would effectively narrow the subset of patients for which use of the generic product is appropriate.35 In this case, inclusion of the language “patients with…reduced ejection fraction” was permissible as it therefore excluded “patients with…preserved ejection fraction,” which is patent protected.36 This decision was affirmed by the District Court for the District of Columbia.37 To wrap up 2024, we also saw the introduction of a bill titled the “Skinny Labels, Big Savings Act” on December 17, which seeks to provide safe harbor protection to generics and biosimilars using skinny labels in certain contexts.38
Allergan USA v. MSN Laboratories39 & Obviousness-type Double Patenting
Holding: First-filed, first-issued, later-expiring patent claims were not invalid for obviousness-type double patenting over later-filed, later-issued, earlier-expiring reference claims.
In August, the Federal Circuit clarified its 2023 In re Cellect decision40 which, at the time, served to massively upheave the doctrine of obviousness-type double patenting (ODP), patent term adjustments (PTA), and terminal disclaimers. However, Judges Lourie, Dyk, and Reyna reeled the impacts of that decision back in. Although the district court considered itself “bound” by the In re Cellect holding, the Federal Circuit distinguished the two as addressing different questions.41 Here, the question was “can a first-filed, first-issued, later-expiring claim be invalidated by a later-filed, later-issued, earlier-expiring reference claim having a common priority date,” to which the Court decided “no.”42 The Cellect decision, however, was boiled down to establishing the rule that “when it comes to evaluating ODP on a patent that has received PTA, the relevant expiration date is the expiration date including PTA—not the original expiration date measured twenty years from the priority date.”43 Practitioners now know that Cellect does not require a patent to be invalidated by reference patents simply because it expires later. The doctrine of obviousness-type double patent serves to prohibit the extension of a first patent by subsequently filed patently indistinct patents; it does not serve to cut short first-filed patents with duly received PTA, simply because later-filed patents expire first.
This decision also follows a May proposal from the USPTO to implement a new rule on terminal disclaimers, such that a terminal disclaimer would include a provision aiming to reduce the costs associated with challenging patent families under ODP.44 The rule proposed that when filing a terminal disclaimer, a patentee must agree that a patent subject to a terminal disclaimer would only be enforceable if it was not tied through such a disclaimer to a patent which had otherwise been held unpatentable or invalid.45 The rule avoids the issue of having to invalidate multiple related patents separately, and if implemented, may significantly impact how practitioners approach continuation patents and handle large patent families within a portfolio. We may see a decrease in continuation applications, and instead see applications claiming much broader scopes and an increase in divisional applications.
Astellas Pharma v. Sandoz46 & Patent Eligibility
Holding: Courts may not sua sponte consider patent eligibility as grounds for patent invalidity.
In September, the Federal Circuit made clear that issues of patent eligibility under Section 101 cannot be decided sua sponte by district courts. Known as the principle of party presentation, there are circumstances in which a court may take “a modest initiating role” in shaping litigation,47 but addressing patent eligibility when not raised by a party is not one such circumstance. Here, patent eligibility was never raised during the course of the litigation, but the court considered it anyway in its final decision.48 While the district court phrased its decision in such a manner that parties may not “consent around the bounds of patent eligibility,” the Federal Circuit Judges Lourie, Prost, and Reyna made clear that patent eligibility is not a threshold issue akin to subject-matter jurisdiction, but instead is entitled to the presumption of validity, as is the case with other grounds of validity.49 While perhaps this decision offers greater direction to courts than counsel, it serves as a polite reminder to practitioners that any invalidity defense not raised is waived.
The topic of patent eligibility was particularly ripe in 2024, and continuing into 2025, especially with the growth of artificial intelligence (AI). Although not a topic that is overly adjacent to Hatch-Waxman litigation, counsel for both innovator and generic companies should remain cognizant of updated guidance from the USPTO, such as that which issued in July.50 A full summary of the guidance can be found here. Generic companies do appear to be raising § 101 invalidity grounds less frequently in recent years; however, counsel should nonetheless stay informed on both procedural and substantive developments in patent eligibility jurisprudence.
Galderma Laboratories v. Lupin51 & Bioequivalence Data and In Vitro Testing
Holding: The district court did not err in holding that the plaintiff had not proven infringement by relying on its in vitro testing and bioequivalence.
As one of two December ANDA decisions in 2024, the Federal Circuit analyzed whether in vitro testing and bioequivalence were sufficient to establish literal infringement or infringement under the doctrine of equivalence. The result? They aren’t. Although likely not a hard-and-fast rule that in vivo and in vitro results are not comparable, the Federal Circuit found no clear error in the district court’s conclusion as such in this particular case, finding that Galderma improperly drew conclusions about in vivo behavior from in vitro testing.52 Evidently, the issue was a failure of proof, rather than scientific incomparability.53 Further, unique to the facts of this case, although with a slightly broader applicability generally, under a doctrine of equivalents analysis, a showing of bioequivalence, at most, shows substantially the same result, but fails to show substantially the same function or substantially the same way, as is required under the “function, way, result” test.54 This decision highlights the importance of accurate and reliable testing to prove infringement, as well as fulsome expert testimony relaying as such.
Teva v. Amneal Pharmaceuticals55 & Orange-Book Listings
Holding: Patents directed towards inhaler devices were improperly listed in the Orange Book.
Wrapping up 2024, the Federal Circuit addressed a key issue pressing innovator pharmaceutical companies: the propriety of Orange Book listings. In this case, Teva had listed patents directed to inhaler devices in the Orange Book in order to delay the entry of generic products to the market.56 Because such patents “contain no claim for the active ingredient at issue,” Judges Prost, Taranto, and Hughes affirmed the district court’s delisting order.57 In what ultimately came down to issues of statutory interpretation, the Federal Circuit rejected arguments that a patent is properly listed if it “reads on” the approved drug or claims any component of a drug.58 Practitioners now know this is not the case. First, “the fact that an NDA could infringe a patent does not mean that the patent ‘claims’ the underlying drug within the meaning of the listing provision.”59 And second, “[t]o list a patent in the Orange Book, that patent must, among other things, claim the drug for which the applicant submitted the application and for which the application was approved,” i.e., the active ingredient.60 While NDA holders are keen to protect their products from generic entry into the market, this decision from the Federal Circuit affirms that there is a limit to the Orange Book, and NDA holders would be wise to ensure any such listings do in fact claim the active ingredient at issue.
This decision comes in the wake of threats by the Federal Trade Commission and new de-listing policies. For example, in September 2023, the FTC issued a new policy61 stating that improper Orange Book listings may constitute a violation of Section 5 of the FTC Act, and in November 2023, the FTC announced a plan62 to challenge over 100 Orange Book Listings and a further 300 listings in April 202463. Many companies have received warning letters from the FTC, only some of whom have voluntarily delisted at-risk Orange Book patents however. The financial detriment of doing so is clear, and other companies have therefore pushed back, arguing compliance with the listing provisions. The FTC appears to be predominantly targeting medical device patents, such as those in Teva v. Amneal, but for the most part, action by the FTC remains limited to issuing policies and sending letters to NDA holders. Further, it has yet to be determined whether this is an appropriate exercise of agency power, especially in the wake of the Supreme Court’s goodbye to Chevron deference.64
To conclude, many of the Federal Circuit’s Hatch-Waxman decisions in 2024 reshaped how pharmaceutical companies and their counsel address patent prosecution, litigation, and portfolio management, especially in view of the broader regulatory, legislative, agency-based changes that may occur in 2025 and beyond. As patent law continues to evolve, these cases will serve as critical touchstones in understanding the future of pharmaceutical patents and the broader implications for drug pricing and accessibility in the years to come.
1 LexMachina stats showing 312 federal district court cases with “Patent:ANDA” case tag, filed between ”2024-01-01 and 2024-12-31″) (Compare with LexMachina stats showing 259 federal district court cases with ”Patent:ANDA” case tag, filed between ”2023-01-01 and 2023-12-31″.2 LexMachina stats showing 283 federal district court cases with “Patent:ANDA” case tag, terminated between ”2024-01-01 and 2024-12-31″.3 Compare supra with LexMachina stats showing 284 federal district court cases with “Patent:ANDA” case tag, terminated between ”2023-01-01 and 2023-12-31″.4 LexMachina stats showing 91 findings in cases with “Patent:ANDA” case tag, with ”Infringement, Invalidity, No Infringement, No Invalidity, No Unenforceability, or Unenforceability” as patent findings, with findings decided between ”2024-01-01 and 2024-12-31″.5 LexMachina stats showing 91 findings in cases with “Patent:ANDA” case tag, with ”Infringement, Invalidity, No Infringement, No Invalidity, No Unenforceability, or Unenforceability” as patent findings, with findings decided between ”2023-01-01 and 2023-12-31″.6 Edwards Lifesciences Corp. v. Meril Life Scis. Pvt. Ltd., 96 F.4th 1347 (Fed. Cir. 2024).7 Amgen Inc. v. Hospira, Inc., 944 F.3d 1327, 1338 (Fed. Cir. 2019).8 Momenta Pharm., Inc. v. Teva Pharm. USA Inc., 809 F.3d 610, 619 (Fed. Cir. 2015).9 Supra, note 6, at 1351.10 Id. at 135311 Id. at 1355.12 Classen Immunotherapies v. Biogen IDEC, 659 F.3d 1057, 1070 (Fed. Cir. 2011).13 Merck KGaA v. Integra Lifesciences I, Ltd., 545 U.S. 193, 202 (2005).14 See, e.g., Madey v. Duke Univ., 307 F.3d 1351 (Fed. Cir. 2002).15 89 Fed. Reg. 53963.16 35 U.S.C. § 271(e)(1).17 7 U.S.C. § 2544.18 Salix Pharms., Ltd. v. Norwich Pharms. Inc., 98 F.4th 1056 (Fed. Cir. 2024).19 Grunenthal GMBH v. Alkem Lab’ys Ltd., 919 F.3d 1333 (Fed. Cir. 2019).20 Pharmacyclics LLC v. Alvogen, Inc., No. 2021-2270, 2022 WL 16943006 (Fed. Cir. Nov. 15, 2022).21 Supra, note 18, at 1065.22 Id. at 1066-67.23 Id. at 1060.24 Id. at 1068-69.25 Id. at 1069.26 Id. at 1068.27 Id. at 1069.28 Amarin Pharma, Inc. v. Hikma Pharms. USA Inc., 104 F.4th 1370 (Fed. Cir. 2024).29 Id. at 1377.30 Id. at 1372-74.31 Id. at 1377.32 Id. at 1378.33 Id. at 1381.34 GlaxoSmithKline LLC v. Teva Pharms. USA, Inc., 7 F.4th 1320 (Fed. Cir. 2021).35 Final Response Letter from FDA CDER to Novartis Pharmaceuticals Corporation, Docket FDA-2022-P02228 (24 Jul. 2024), https://downloads.regulations.gov/FDA-2022-P-2228-0015/attachment_1.pdf. 36 See id.37 Novartis Pharms. Corp. v. Becerra, No. 24-CV-02234 (DLF), 2024 WL 4492072 (D.D.C. Oct. 15, 2024).38 Sens. Hickenlooper, Welch, Cotton, & Collins, Skinny Labels, Big Savings Act, https://www.hickenlooper.senate.gov/wp-content/uploads/2024/12/Skinny-Labels.pdf.39 Allergan USA, Inc. v. MSN Lab’ys Priv. Ltd., 111 F.4th 1358 (Fed. Cir. 2024).40 In re: Cellect, LLC, 81 F.4th 1216 (Fed. Cir. 2023).41 Supra, note 39, at 1368.42 Id. at 1366.43 Id. at 1369.44 89 Fed.Reg. 4043945 Id.46 Astellas Pharma, Inc. v. Sandoz Inc., 117 F.4th 1371 (Fed. Cir. 2024).47 United States v. Sineneng-Smith, 590 U.S. 371, 376 (2020).48 Supra, note 46, at 1376.49 Id. at 1378.50 89 Fed.Reg. 5812851 Galderma Lab’ys, L.P. v. Lupin Inc., 122 F.4th 902 (Fed. Cir. 2024).52 Id. at 908.53 Id. at 908.54 Id. at 910.55 Teva Branded Pharm. Prods. R&D, Inc. v. Amneal Pharms. of New York, LLC, No. 2024-1936, 2024 WL 5176737 (Fed. Cir. Dec. 20, 2024).56 Id. at *5-*6.57 Id. at *7, *17.58 Id. at *10-*11.59 Id. at *12.60 Id. at *15.61 Federal Trade Commission, “Federal Trade Commission Statement Concerning Brand Drug Manufacturers’ Improper Listing of Patents in the Orange Book,” (14 Sept. 2023), https://www.ftc.gov/system/files/ftc_gov/pdf/p239900orangebookpolicystatement092023.pdf.62 Federal Trade Commission, “FTC Challenges More Than 100 Patents as Improperly Listed in the FDA’s Orange Book,” (November 7, 2023), https://www.ftc.gov/news-events/news/press-releases/2023/11/ftc-challenges-more-100-patents-improperly-listed-fdas-orange-book.63 Federal Trade Commission, “FTC Expands Patent Listing Challenges, Targeting More Than 300 Junk Listings for Diabetes, Weight Loss, Asthma and COPD Drugs,” (April 30, 2024), https://www.ftc.gov/news-events/news/press-releases/2024/04/ftc-expands-patent-listing-challenges-targeting-more-300-junk-listings-diabetes-weight-loss-asthma.64 Loper Bright Enterprises v. Raimondo, 603 U.S. 369 (2024).
Nasdaq Rule Change Lengthens Reverse Stock Split Notice Period
Last November, Nasdaq proposed a rule change that would lengthen the notification period for companies conducting reverse stock splits from five business days to 10 calendar days. The rule change became effective immediately and will become operative on January 30.
In November 2023, the US Securities and Exchange Commission approved new listing requirements for Nasdaq, including Rule 5250(e)(7). Rule 5250(e)(7) currently requires a company conducting a reverse stock split to notify Nasdaq of the stock split by submitting a Company Event Notification Form no later than 12:00 PM, ET five business days prior to the proposed market effective date of the reverse stock split.
However, Rule 10b-17(a)(2) and (b) of the Securities Exchange Act of 1934, as amended, requires that a company notify the Financial Industry Regulatory Authority no later than 10 calendar days prior to the date of record to participate in a reverse stock split, unless that notice is compliant with the procedures of a national securities exchange whose requirements are “substantially comparable” with the 10-day requirement.
Because Nasdaq’s five-business-day requirement may not be considered “substantially comparable” to the 10-calendar-day requirement under Rule 10b-17, Nasdaq has proposed the modified rule (to 10 calendar days) in order to conform to the requirements of Rule 10b-17. Nasdaq also submitted a modified Company Event Notification Form that will reflect the new notice requirement.
Takeaways
Beginning January 30, companies seeking to effectuate reverse stock splits will be required to provide 10 calendar days’ notice by submitting a Company Event Notification Form.
The Company Event Notification Form will continue to require disclosure of information such as the effective date of the split, the split ratio, confirmation of Depository Trust Company eligibility of the post-split Committee on Uniform Securities Identification Procedures number, and dates of board and shareholder approval.
Failure to provide timely notice could result in a halt in stock trading.
Nasdaq is not proposing any changes to the two-day public disclosure requirement outlined in Rule 5250(b)(4).
FDA Proposes New Front-of-Pack Nutrition Label for Packaged Foods
The FDA has announced a proposal to require a new nutrition label on the front of packages for most packaged foods. The label design, shown below, would give consumers readily visible information about a food’s saturated fat, sodium, and added sugars content—three nutrients the FDA states are directly linked with chronic diseases when consumed in excess. The proposed “Nutrition Info box” rates packaged food as being “Low,” “Med,” or “High” in saturated fat, sodium, and added sugars. It was designed after the FDA conducted an experimental study in 2023 of nearly 10,000 U.S. adults to further explore consumer responses to three different types of front-of-pack labels. The new Nutrition Info box is intended to complement the FDA’s existing Nutrition Facts label.
If finalized, the proposed rule would require food manufacturers to add the Nutrition Info box to most packaged food products three years after the final rule’s effective date for businesses with $10 million or more in annual food sales and four years after the final rule’s effective date for businesses with less than $10 million in annual food sales. Comments on the proposed rule can be submitted electronically to http://www.regulations.gov by May 16, 2025.
What’s Next for OFCCP Under The Second Trump Term?
With President Trump’s second administration set to begin on January 20, 2025, federal contractors and subcontractors are anxiously awaiting what he might do with respect to the Office of Federal Contract Compliance Programs (“OFCCP”) and the employment obligations imposed on federal government contractors. While the Trump transition team has not signaled exactly what is in store, it seems likely that changes are coming. Below we provide some thoughts on what might occur.
Of course, once President Trump takes office, we will be monitoring developments closely and alerting our readers here. Stay tuned!
Looking Back at Trump 1.0
To set the stage, when President Trump first took office in 2017, many predicted the end of OFCCP. In some ways, the precise opposite occurred. Under then-Director Craig Leen, OFCCP was incredibly active during the Trump Administration, issuing over a dozen Directives and multiple new regulations, instituting new types of audits, and obtaining record recoveries for employees.
Even so, OFCCP during President Trump’s first term took an approach that was widely seen as contractor-friendly, establishing procedures that provided contractors with more transparency and consistency in their dealings with OFCCP. Many of those efforts were rescinded by the Biden administration.
Other efforts during this period were more controversial. OFCCP expanded the existing exemption to religious entities’ compliance with the anti-discrimination provisions of Executive Order 11246 by adding new definitions to “clarify the scope” of EO 11246’s religious exemption. In addition, toward the end of his administration, President Trump issued Executive Order (“EO”) 13950, which prohibited federal contractors from including certain concepts in their diversity trainings, including concepts commonly covered in unconscious bias and social privilege trainings. Both of these measures were eliminated by the Biden administration.
What Could Happen During Trump 2.0?
As noted above, the Trump transition team has not revealed plans for OFCCP in the new administration, and predictions about what President Trump would do to OFCCP at the outset of his first administration proved to be wrong. However, there are a number of potential outcomes contractors should look out for.
The End of Executive Order 11246?
Project 2025, a policy blueprint prepared “by over 100 respected organizations from across the conservative movement,” and which has been popularly associated with the incoming administration, proposes several measures to limit OFCCP’s scope – including rescinding EO 11246. This is something President Trump could do with a stroke of a pen on Day 1, and in so doing eliminate OFCCP’s race and sex equal employment and affirmative action obligations imposed on federal contractors.
It is also possible President Trump may not rescind EO 11246, but instead limit its scope. Currently, employment obligations are imposed on contractors with contracts as low as $10,000, and more onerous requirements – such as creating affirmative action programs – are triggered by contracts as low as $50,000. Raising those limits, which have been in place for decades, would lessen the burden on smaller contractors and allow the agency to focus its resources on larger contractors.
In addition, some have speculated that OFCCP under the new Trump Administration may pivot to focus on discrimination with respect to traditionally advantaged groups (i.e., men and whites).
Reinstatement of Executive Order 13950
Many speculate that President Trump will reinstate the controversial Executive Order on Combating Race and Sex Stereotyping, which President Biden rescinded shortly after taking office in January 2021. As we previously reported, this order required that new contracts entered into with the federal government include a clause prohibiting federal contractors from including certain concepts in their diversity and awareness trainings – including concepts “that:
One race or sex is inherently superior to another race or sex;
An individual, by virtue of his or her race or sex, is inherently racist, sexist, or oppressive, whether consciously or unconsciously;
An individual should be discriminated against or receive adverse treatment solely or partly because of his or her race or sex;
Members of one race or sex cannot or should not attempt to treat others without respect to race or sex;
An individual’s moral character is necessarily determined by his or her race or sex;
An individual, by virtue of his or her race or sex, bears responsibility for actions committed in the past by other members of the same race or sex;
Any individual should feel discomfort, guilt, anguish, or any form of psychological distress on account of his or her race or sex; or
Meritocracy or traits such as a hard work ethic are racist or sexist, or were created by a particular race to oppress another race.”
The order referenced various existing government DEI trainings as examples of trainings that “perpetuate racial stereotypes and division and can use subtle coercive pressure to ensure conformity of viewpoint… [and] have no place in programs and activities supported by Federal taxpayer dollars.” This is also something President Trump could do on Day 1, and seems likely given statements made by President Trump and his transition team regarding DEI initiatives.
Reinstatement of Religious Exemption Rule
Another likely possibility under the incoming administration is the DOL’s reinstatement of the final rule, “Implementing Legal Requirements Regarding the Equal Opportunity Clause’s Religious Exemption.” As we previously reported, the rule clarified the scope of OFCCP’s religious exemption and arguably expanded the scope of EO 11246’s existing exemption for religious entities’ compliance with its anti-discrimination provisions.
Return to Contractor-Friendly Enforcement Provisions
If OFCCP survives, it may reinstitute contractor-friendly enforcement procedures. For example, under the first Trump administration, OFCCP issued a rule – Nondiscrimination Obligations of Federal Contractors and Subcontractors: Procedures To Resolve Potential Employment Discrimination – which set forth procedures before OFCCP could issue notices of violation (“NOV”) aimed at increasing the transparency of the process and providing contractors with adequate time and information to respond to initial findings prior to the issuance of any NOV. That rule, along with other administrative actions aimed at increasing transparency and fairness, were eliminated by the Biden administration. It is likely OFCCP under the next administration will reinstitute those policies and procedures.
Potential OFCCP-EEOC Merger
It is possible that OFCCP may find a new home within another department or be dismantled altogether. As we previously reported, President Trump’s last term included a failed budget proposal to combine OFCCP and the Equal Employment Opportunity Commission (“EEOC”).
Conclusion
While we do not know what exactly will happen to OFCCP once President Trump re-takes office, it seems all but assured that changes are coming. It is important for federal contractors to stay on top of developments and make any necessary adjustments.
J-1 Exchange Visitors From 30+ Countries No Longer Subject to Two-Year Foreign Home Residency Requirement
The Department of State (DOS) revised the J-1 Skills List, which lists home countries to which foreign nationals are subject to a two-year foreign home residency requirement.
The 37 countries that have been removed from the J-1 Skills List are: Albania, Algeria, Argentina, Armenia, Bahrain, Bangladesh, Bolivia, Brazil, Chile, China, Colombia, Costa Rica, Dominican Republic, Gabon, Georgia, Guyana, India, Indonesia, Kazakhstan, Laos, Malaysia, Mauritius, Montenegro, Namibia, Oman, Paraguay, Peru, Romania, Saudi Arabia, South Africa, South Korea, Sri Lanka, Thailand, Trinidad and Tobago, Turkey, United Arab Emirates, and Uruguay.
This change applies retroactively. J nonimmigrant exchange visitors who were subject to the two-year foreign residency requirement based upon the Skills List at the time of their admission to the United States in J status will no longer be subject to the residency requirement if their country has been eliminated from the list.
This change is particularly impactful for professionals who often face significant career disruptions and personal hardships due to the two-year foreign home residency requirement. Exempted individuals will be able to pursue further training and employment in the U.S. without disruption.
The elimination of this requirement for certain countries may make the United States a more attractive destination for top talent.
The change, however, does not affect individuals who are subject to the two-year requirement on other grounds, such as government funding or physicians in the United States for graduate medical training.
J-1 visas are work-and-study-based exchange visitor programs established by DOS. The Skills List that became part of that program was established to identify countries with a shortage of certain skills and then ensure that those who gained those skills in the United States would return to their home countries to ensure that knowledge and skills gained during the exchange program would be shared with the individual’s home country. From time to time, DOS revises the list to ensure it is accurately accomplishing the goal that foreign nationals return to their home country when most needed. In this revision, DOS is updating the countries included on the Skills List, but not updating the skills listed.
HHS OCR Settlements: Last Week in Review
During the week of January 6, 2025, the U.S. Department of Health and Human Services’ Office for Civil Rights (“OCR”) entered into resolution agreements and corrective action plans with Elgon Information Systems (“Elgon”), Virtual Private Network Solutions, LLC (“VPN Solutions”) and USR Holdings, LLC (“USR”) for violations of the Health Insurance Portability and Accountability Act of 1996 (“HIPAA”) Security Rule.
The proposed resolutions with Elgon and VPN Solutions are the eighth and ninth ransomware investigation settlements announced by OCR. Elgon is required to pay $80,000 to OCR and will be subject to its monitoring for three years to ensure compliance with HIPAA. VPN Solutions is required to pay $90,000 and will be subject to one year of monitoring. The corrective action plans also lay out certain steps each entity is required to take to resolve potential violations of the HIPAA Privacy and Security Rules.
The proposed resolution with USR, announced on January 8, 2025, stems from a data breach, during which an unauthorized third party/parties were able to access a database containing the electronic protected health information (“ePHI”) of over 2,900 individuals and able to delete ePHI in the database. The resolution agreement requires USR to pay $337,750 to OCR and take steps to resolve potential violations of the HIPAA Privacy and Security Rules. USR will be subject to OCR monitoring for two years to ensure compliance with HIPAA.
Last week’s flurry of settlements is in keeping with a broader trend of OCR Security Rule enforcement activity in the past year. These agreements underscore how it is critical that organizations of all sizes that handle ePHI ensure their compliance with the HIPAA Security Rule, which requires administrative, physical and technical safeguards to ensure the confidentiality, integrity and availability of ePHI.
Frequently Asked Questions About the New Jersey Data Protection Act, Effective January 15, 2025
The New Jersey Data Protection Act (NJDPA), N.J. Stat. § 56:8-166.4 et seq., will go into effect on January 15, 2025, as New Jersey joins eighteen other states with comprehensive data privacy laws.
The Garden State’s Division of Consumer Affairs Cyber Fraud Unit recently posted answers to twenty-four frequently asked questions (FAQs) that offer a comprehensive summary of the law, outline definitions, and explain consumer rights and business responsibilities.
Quick Hits
The New Jersey Data Protection Act (NJDPA) takes effect on January 15, 2025, as New Jersey joins eighteen other states with comprehensive data privacy laws.
The NJDPA defines a “consumer” as a New Jersey resident acting in an individual or household context, excluding those acting in commercial or employment contexts.
The New Jersey Division of Consumer Affairs will provide a grace period for enforcement of the NJDPA until July 1, 2026.
Our prior article laid out the obligations the statute entails and the relatively small universe of companies that are covered under the NJDPA. (The statute does not have a specific title, and as a result, it has been referred to in different publications by various names, such as the “New Jersey Data Protection Act,” the “New Jersey Data Privacy Act,” or the “New Jersey Data Privacy Law.”) The FAQs offer some insight and further clarification as to the scope and application of the law.
Who Is a ‘Consumer’ Under the NJDPA?
The FAQs state an important distinction regarding the scope of the NJDPL, namely, that the NJDPL does not cover employment records. In the statute, “consumer” is defined as a person who is a New Jersey resident acting only in an individual or household context. In contrast, the definition of consumer does not include a person acting in a commercial or employment context. For example, a New Jersey resident who has his or her personal data collected by a retailer while making a purchase for the consumer’s household is protected under the NJDPL. However, a New Jersey resident who has his or her personal data collected by a potential employer while applying for a job is not protected under the NJDPL. (See FAQ #5.)
Are There Special Protections for Children and Minors?
The FAQs indicate that in New Jersey, controllers must obtain consent before processing personal data of consumers aged thirteen to sixteen. This requirement is broader than the statute, which only mandates consent for targeted advertising, selling personal data, or profiling with significant effects, and applies when the controller knows or willfully disregards that a consumer is thirteen to seventeen years old. Although nonbinding, the FAQs suggest the Division of Consumer Affairs may adopt a stricter approach to children’s privacy, using a “should know” standard rather than the statute’s “actual knowledge or willful disregard” standard. (See FAQ #18.)
Will Enforcement Begin Immediately When the NJDPA Becomes Effective?
The FAQs clarify that even though businesses and other entities that are controllers of personal data are expected to comply with the NJDPL when the law becomes effective, there will be a grace period for bringing enforcement actions. Specifically, until July 1, 2026, if the Division of Consumer Affairs identifies a potential violation that the controller can remedy, the division will send a notice to the controller to give them the chance to fix the problem. If the controller does not fix the problem within thirty days, the division can proceed with an enforcement action. (See FAQ #23.)
Does the New Jersey Division of Consumer Affairs Intend to Adopt Regulations?
The division stated in its answer to FAQ #24 that regulations would be issued in 2025. “In the meantime,” the division noted, “controllers and processors are required to comply with the [NJDPA] starting on January 15, 2025.”
Ohio Streamlines Unemployment Insurance Reporting for Commonly Controlled, Concurrent Employers
New for January 1, 2025, Ohio has streamlined its unemployment insurance reporting process to allow employers that control multiple corporate entities to report unemployment insurance for their concurrent employees in a single account.
Quick Hits
Ohio now allows commonly controlled, managed, or owned companies—or companies reorganized in such a way—to apply for a single unemployment insurance account for reporting purposes.
Companies must file a “transfer of business form,” which began to be accepted on January 1, 2025.
On December 11, 2024, the Ohio Department of Job and Family Services (ODJFS) adopted revisions to Ohio Administrative Code Rule 4141-11-13 that rescinded the prior prohibition on common paymaster reporting, where one entity reports unemployment insurance for a group of related entities with concurrent employment. This change allows Ohio unemployment insurance reporting to be more closely aligned with the Internal Revenue Service’s “common paymaster” employment tax reporting.
Under the new Ohio rule, commonly controlled, managed, or owned companies, or companies reorganized in such a way, may apply for a single unemployment insurance account to report all employees. The rule is currently being interpreted to include registered professional employer organizations in which shared employees are coemployed. Companies meeting the rule’s definition must file a “transfer of business form … identifying the concurrent employers, and whether the employees will be reported on the primary account due to concurrent employment or transfer.”
The rule defines “concurrent employment” as the employment of an individual with at least two substantially commonly owned, managed, or controlled employers during the same time period.” According to ODJFS, commonly owned companies may further reorganize their structure to “create a new commonly owned entity” or may “use one of their existing commonly owned businesses as the primary-wage-reporting entity.”
The changes significantly streamline the unemployment insurance reporting process for commonly owned companies. Under the prior Rule 4141-11-13, each corporate entity was required to report payments for employees regardless of whether it was controlled by another entity under a “common paymaster arrangement” or similar.
The rule also makes clear that common paymaster reporting is an exception to the rule that one legal entity may not report another legal entity’s employees for Ohio unemployment insurance purposes without transferring the direction and control of the employees to the legal entity that will report the employees for Ohio unemployment insurance. Thus, common paymaster reporting is more than just an administrative election to report unemployment insurance under a particular entity.
Next Steps
The ODJFS began accepting applications for a single unemployment insurance reporting account on January 1, 2025. Employers must file a “Transfer of Business” form (JFS 20101), which can be found on the ODJFS website here.
If the primary account does not have an employer ID, ODJFS requires the employer to open a new account online or file “Report to Determine Liability” form (JFS 20100), which can be found on the ODJFS website here.
California May Soon Require Companies To Submit Elder Abuse Prevention Plans
California legislators are introducing the first bills in the current biennium. One of these bills, AB 83 (Pacheco), would add an entirely new division to the California Financial Code. This new division would consist of a single section and this single section would consist of a single sentence:
The Department of Financial Protection and Innovation shall require companies to submit to the department an elder abuse prevention plan.
Although it has been said that brevity is the soul of wit,* sometimes brevity is simply witless – like this bill. Will all companies be subject to this requirement or only those licensed or directly regulated by the DFPI? How will an out-of-state company know whether it is subject to this requirement? Is this a one-time requirement or must companies file plans annually or on some other periodic basis? Will the DFPI simply receive the submitted reports or will it review the reports? What are the penalties, if any, for failure to file?
Given that this bill is so scant on important details, I suspect that it is a placeholder for some larger, and perhaps, even markedly different legislation.
_______________________________*Wm. Shakespeare, Hamlet Act 2, Sc. 2.
OSHA Increases Penalty Amounts for 2025
On January 15, 2025, the Occupational Safety and Health Administration (OSHA) increased the penalty amounts for violations in accordance with the Federal Civil Penalties Inflation Adjustment Act Improvements Act. Employers should take this time to review all safety policies and procedures to ensure they are up to date and complaint.