Draft of Decree for Patent Linkage by the Mexican Government.
On February 12, 2025, the Federal Commission for Protection against Health Risks (COFEPRIS) and the Mexican Institute of Industrial Property (IMPI) published a draft of the technical collaboration mechanism between both entities, with the intention to comply with the United States-Mexico-Canada Agreement (USMCA).
It mainly establishes two “formats” that each authority will publish in their web page and specifies the information to be included in the Allopathic Medicines Gazette and information of the communication before COFEPRIS and IMPI.
It also mentions that COFEPRIS’ “format” for the technical cooperation must include the opposition format, along with the information provided by the patent owner or its licensee and/or sublicensee.
This implies that the notice and opposition opportunity will take place before COFEPRIS and not IMPI and we assume that it is going to be described in further formats or in any other law or regulation.
In conclusion, we consider that there are some positive considerations from this draft, as follows:
This was due since 2020; therefore, it is a good sign that they are moving forward.
Although there is not an express language including use patents, the wording is more positive than the current linkage regulation to include use claims, by IMPI or through litigation.
It clarifies the information to be included in both formats by each authority.
The negative aspect is that we consider that still there are no rules for an appropriate notice to the title holder. From the draft, it seems that neither the notice nor a described process. Additionally, it seems that it will take place before COFEPRIS and not IMPI, which in our view is not the best venue for a notice to be heard by the patent holder.
Definitively, at least in this publication, apparently no compliance with the USMCA of a proper notice is expressly considered.
Personal Jurisdiction Considerations for International Biosimilars Companies
The Federal Circuit recently issued decisions in a pair of appeals that provide guidance about when international filers of abbreviated Biologics License Applications (aBLAs) are subject to jurisdiction in the United States. Specifically, the Federal Circuit held that international biosimilars companies are subject to jurisdiction in the United States when they have submitted an aBLA with the intent to market the finished product in the forum state.
1. Regeneron’s Patent Infringement Lawsuits
The plaintiff in each case is Regeneron Pharmaceuticals, Inc., which holds Biologics License Application (BLA) No. 125387 for EYELEA®, which is approved by the U.S. Food and Drug Administration (FDA) for the treatment of patients with angiogenic eye diseases—Wet Age-Related Macular Degeneration (AMD), Macular Edema following Retinal Vein Occlusion (RVO), Diabetic Macular Edema (DME) and Diabetic Retinopathy (DR)—via injection into the body of the eye.
Regeneron sued several companies, including Samsung Bioepis Co., Ltd. (SB) and Formycon AG (Formycon), that had filed aBLAs with the FDA seeking approval under the Biologics Price Competition and Innovation Act (BPCIA) to market EYLEA® biosimilars. The cases were consolidated in the U.S. District for the Northern District of West Virginia and the district issued preliminary injunctions against SB and Formycon, barring them from offering for sale or selling the products described in their aBLAs, which have been approved by the FDA. SB appealed the preliminary injunction on several grounds, including that they were not subject to personal jurisdiction, which is the focus of this article.
2. SB’s Connections to the United States
SB is a biosimilar-products company headquartered in Incheon, South Korea. SB argued it has no facilities or employees in the United States; is not registered to do business and has no registered agent in West Virginia; and does not do business with entities in West Virginia. SB also argued that although it would sell its finished product to Biogen MA Inc. (a U.S. company) in a state other than West Virginia, it would not distribute, market or otherwise sell the product in the United States.
3. Formycon’s Connections to the United States
Formycon is a biopharmaceutical company based in Bavaria, Germany. Formycon argued that it has no “direct” ties to West Virginia; is not registered to do business and has no registered agent there; has no assets or employees there; and that it had contracted with manufacturers and packaging partners who would produce the finished product and related materials in other states. Formycon further argued that having developed the product pursuant to an agreement with another German company, it had no plans or rights to itself commercialize the product in the United States. Instead, the product would be sold to another company for marketing and distribution, and Formycon would have no control over the selection of that company or its decisions regarding commercialization.
4. The Federal Circuit’s Jurisdiction Analysis
When evaluating if a defendant is subject to personal jurisdiction in the forum of a particular state, the court looks to (1) whether the state’s long-arm statute permits service of process and (2) whether the assertion of jurisdiction would be inconsistent with due process under the U.S. Constitution. In many states, including West Virginia, the long-arm statutes are “coextensive with the full reach of due process,” so the questions collapse into one constitutional inquiry.
Under the U.S. Constitution, a court in a state may exercise jurisdiction over a defendant that has sufficient “minimum contacts” with the state that it would not “offend traditional notions of fair play and substantial justice.” This standard requires that the defendant’s suit-related conduct create a “substantial connection” with the forum state. The application of the standard in these cases is not necessarily straightforward because patent infringement cases based on an aBLA filing are not easily analogized to other types of actions or even traditional patent infringement cases.
The Federal Circuit, therefore, relied on its precedent in Acorda Therapeutics Inc. v. Mylan Pharmaceuticals Inc., 817 F.3d 755 (Fed. Cir. 2016), which considered the jurisdictional question in the context of a suit arising out of the filing of an Abbreviated New Drug Application (ANDA). In Acorda, the court had held that “minimum contacts” were satisfied by planned future interactions with the state. The submission of an ANDA with the intent to distribute the generic product in a state was held sufficient to support exercising jurisdiction.
Extending Acorda to aBLA cases, the Federal Circuit found similar evidence of conduct sufficient to exercise jurisdiction. Specifically as to SB, the court observed that SB had filed an aBLA; had served Regeneron with a Notice of Commercial Marketing, which communicates an intent to market upon FDA approval; had engaged various partners within the United States; and had entered into a nationwide distribution agreement with a U.S. company, through which SB retained “significant involvement” in commercialization activities.
Notwithstanding the apparent differences in involvement in commercialization activities, the Federal Circuit also found that Formycon intended to market the finished product in West Virginia and other states. As with SB, the court relied on Formycon’s filing of the aBLA, service of Notice of Commercial Marketing, and partnering with U.S. companies to manufacture, package and label its product. Although it had not yet entered into an agreement with a marketing partner, the court found Formycon intended to ultimately distribute the finished product nationwide.
Thus, filing an aBLA, providing Notice of Commercial Marketing, and having more than speculative plans to market the finished product throughout the United States appears sufficient to subject an international biosimilar company to jurisdiction in any state having a long-arm statute coextensive with the U.S. Constitution. The stronger the relationship to commercialization plans, the stronger the argument will be for jurisdiction, although these factors appear to primarily support a finding of jurisdiction as opposed to playing a significant role in the analysis in the first instance.
5. Guidance for International Biosimilars Companies
International biosimilars companies that file aBLAs in the United States with plans to market the finished product should expect a high likelihood of being subject to jurisdiction for related patent infringement cases. Some steps may mitigate the risk, however, and increase the likelihood of avoiding jurisdiction:
Reduce contact with the United States as much as possible. For example, perform all development, sourcing, manufacturing, packaging and labeling outside the United States.
Introduce layers between the aBLA filer and the ultimate marketer. For example, the aBLA filer may contract with other international companies that, in turn, independently contract with a marketing partner in the United States. If the agreement between the aBLA filer and the second international company is not limited to marketing rights in the United States, that may further help.
Carve out particular states. If there are states in which the international biosimilar company does not want to be subject to jurisdiction, expressly exclude those states from commercialization agreements.
These and other factors can significantly affect whether a company is ultimately subject to jurisdiction in the United States, and similar considerations may affect other partners in the international supply chain.
What Every Multinational Company Should Know About … The New Steel and Aluminum Tariffs
What Has President Trump Announced?
On February 10, 2025, President Trump signed proclamations titled Adjusting Imports of Steel Into the United States and Adjusting Imports of Aluminum into the United States. The proclamations cover both steel and aluminum tariffs, which will be raised to a flat 25%. In particular, the steel and aluminum proclamations establish the following tariff principles:
The Section 232 aluminum tariffs, which the Trump administration imposed in his first administration, are raised from 10 percent to 25 percent.
The Section 232 steel tariffs, which already were set at 25 percent but which contained significant carveouts for most major sources of steel products, including steel from Brazil, Canada, and South Korea, will be implemented “without exceptions or exemptions.”
All product-specific exemptions that had been granted under the prior Section 232 tariffs are eliminated.
The steel and aluminum proclamations apply not only to products previously identified in Proclamation 9705 (2018) and Proclamation 9980 (2020) but also to additional derivative steel products and derivative aluminum products to be identified in forthcoming annexes to the proclamations.
The United States will set up a process to allow U.S. industry groups and U.S. producers of steel and aluminum to request that other derivative products be added to the annexes.
The steel and aluminum proclamations include exemptions only for derivative steel products “melted and poured” in the United States and derivative aluminum products “smelted and cast” in the United States, to curb imports of minimally processed metals from other countries that circumvent the prior tariffs. In other words, derivative products that are produced from steel and aluminum that originated in the United States, which then were processed abroad into a derivative product, would be exempt from the new 25 percent tariffs.
The full impact of these tariffs will take time to work through the market. Nonetheless, the announcements sent major shock waves through the manufacturing community. To help companies sort out the potential impact of these new tariffs, this article works through the top-of-mind questions for most major aluminum and steel importers. It then provides some strategies for companies looking to manage tariff-related risks, including by buttressing supply chains and building in contractual flexibility.
Our expectation is that these are the opening salvos in a likely international trade war, not the last shot. Notably, after the issuance of the steel and aluminum proclamations, a White House official confirmed these tariffs would “stack” on any other tariffs. For example, if the currently suspended 25% increase in tariffs for Canada and Mexico are implemented, then imports of Canadian and Mexican aluminum and steel would face new 50% tariffs.
What Are the Key Open Questions and Ambiguities in the Announcement?
What products are covered? The coverage of the presidential proclamation is broad, covering all basic forms of steel and aluminum. In addition to steel and aluminum products subject to previous Section 232 duties, the proclamations will include forthcoming annexes incorporating further derivative steel and aluminum products.
How far downstream does the proclamation extend? The coverage likely extends to numerous downstream products such as pipes, tubes, and aluminum extrusions. The full list of derivative products covered by the proclamations will be listed in yet-to-be-published annexes.
How does this interact with the prior Section 232 duties imposed in President Trump’s first term? The effect of the steel and aluminum proclamations is basically to replace the prior Section 232 duties — including all their exemptions and negotiated alternative quota arrangements — with new, uniform duties under the current proclamations, including to a potentially larger set of products to be covered in the forthcoming annexes. This has the effect of both broadening the scope of the prior duties and also extending them to countries that had negotiated alternative measures to the prior Section 232 tariffs, such as by imposing quotas for exports of steel and aluminum to the United States in exchange for having the tariffs dropped. The proclamations also eliminate all the product-specific exemptions granted under both the prior Trump and Biden administrations. Thus, the proclamations represent a level-setting of the prior Section 232 tariffs, bringing everything to a uniform 25% rate for all countries and for all products.
What about the Section 301 duties? The Section 301 duties applicable to Chinese-origin products remain fully in place. Because those tariffs (recently increased by an additional 10%) cover basically all imports from China, including aluminum and steel products, the new aluminum and steel tariffs ladder on top of the Section 301 duties. Thus, there can be duties as high as 60% for Chinese aluminum and steel, in addition to the normal Chapter 1–97 tariffs, of the Harmonized Tariff Schedule of the United States (HTSUS) that generally apply to imports from all countries.
What about all the antidumping and countervailing duty orders on various steel and aluminum products? In addition to Section 232, Section 301, and standard Chapter 1–97 duties, in situations where there are antidumping or countervailing duty orders on steel or aluminum products, these duties also would be added on. Because antidumping and countervailing duty orders are placed on products from a particular country or countries, the analysis of whether such additional duties are due for steel and aluminum imports would depend on the country at issue, as well as whether the product being imported falls within the written scope of the antidumping and countervailing duty orders. But because of the large number of antidumping and countervailing duty orders, an appreciable number of products will be covered by these tariffs as well. It accordingly is essential for steel and aluminum importers to be carefully scrutinizing the potential applicability of such orders to their steel and aluminum products.
Would the USMCA allow us to avoid these duties by importing first into Canada or Mexico? Merely transshipping products through a third country, such as Canada or Mexico, does not alter the tariffs to be paid on that product if it eventually comes into the U.S. customs territory. Further, the steel and aluminum proclamations impose a new U.S. melt-and-pour requirement for steel and a smelting requirement for aluminum in order to claim an exemption from the Section 232 tariffs.
Can we avoid the tariffs by doing a moderate amount of processing before importing the steel and aluminum? This would depend on whether the processing is sufficient to take the product out of the HTS classifications listed in the forthcoming annexes of derivative steel/aluminum products.
Are the trade courts likely to strike this measure down? The imposition under Section 232 of aluminum and steel tariffs in the first Trump administration was appealed to both the Court of International Trade and the Court of Appeals for the Federal Circuit. The end result was that the prior use of Section 232 to invoke national security grounds to impose tariffs to protect the U.S. aluminum and steel industries was upheld. While a challenge to the new proclamations is likely, these precedents will make it difficult for such a challenge to succeed.
Don’t these special tariffs violate the WTO Agreements? WTO agreements will not provide relief from these tariffs for steel and aluminum importers. Several countries have already brought a WTO challenge or indicated that they will be doing so soon. But the WTO’s dispute resolution process has been effectively brought to a standstill in recent years, as multiple U.S. administrations have blocked appointments of panelists to the WTO’s Appellate Body, which is the final stage of any dispute resolution. Also, WTO dispute resolution takes years to finish.
Will major importing countries negotiate a resolution to these tariffs? It is likely that they will try. Australia already has indicated it will seek to negotiate an alternative to the imposition of the tariffs. Australia is viewed as being better positioned than most countries for such a resolution because it maintains a trade deficit with the United States, whereas other major steel and aluminum exporters to the United States have trade surpluses. That said, it would not make sense to eliminate the prior settlements through the new imposition of aluminum and steel tariffs if the end goal were to put something similar back in place. Because the U.S. aluminum and steel industries were viewed as having their relief undermined by prior negotiated alternative provisions, as well as the grant of hundreds of product-specific exemptions, it is expected that negotiated alternatives to the tariffs will be much more difficult to achieve this time around.
How will we get clarity regarding the scope of these new tariffs? The new Section 232 tariffs are to go into effect on March 12, 2025. Additional information — including the publication of the annexes — will need to be provided so these tariffs can be applied. We expect that the publication of the proclamations in the Federal Register will provide at least some further clarification as to the scope of the measures — including the annexes — as well as subsequent guidance from U.S. Customs & Border Protection.
Are there any other trade- or tariff-related measures we need to be monitoring? Yes. Speaking from the Oval Office, President Trump said the steel and aluminum tariffs were “the first of many” to come. In particular, he said his international trade team would be meeting over the next four weeks to discuss potential new tariffs on cars, chips, pharmaceuticals, and other goods. He already has imposed 10-percent tariffs on Chinese-origin imports (on top of the existing Section 301 duties from the first Trump administration, which apply to around half of all goods imported from China and impose tariffs up to 25 percent). He has threatened tariffs of up to 25 percent on all goods from Canada and Mexico, which are currently suspended for 30 days to give negotiators time to work out an agreement to address unauthorized immigration and illegal trafficking in fentanyl and other drugs. And he has threatened reciprocal tariffs, which would raise U.S. tariff rates on any products from countries that impose higher tariffs on the same goods when exported from the United States. Finally, he also has vowed to raise U.S. tariffs still further on any country that retaliates against the U.S. tariffs.
What Should Our Company Do to Cope With These Potentially Costly New Duties?
Gather information on importing patterns to determine tariff-related vulnerability. Importers should gather information regarding their steel and aluminum products, and their importing patterns related to those products, to pinpoint tariff-related risks and vulnerabilities. Supply chain mapping, the process of documenting all suppliers and the flow of goods and products in a supply network, can be an important tool for importers looking to gain proper insight into their network. A clear picture of one’s supply chain allows importers to identify tariff-saving opportunities and to proactively address pressure-points creating vulnerabilities.
Gather contracts and determine tariff-related flexibility. Global trade dynamics necessitate flexible supply chain contracts for both suppliers and purchasers. The starting point is to identify goods facing high tariff rates and to gather all of your supply- and sell-side contracts and determine how they handle tariff-related risks for these goods. In general, when it comes to tariff-related risks, these contracts generally fall into two buckets: (1) ones that contain no provision relating to tariffs or that contain pricing-related provisions, which may indirectly allocate risks relating to tariffs but not provide any real flexibility to deal with unexpected tariff changes; and (2) ones that include clear tariff-related provisions. To the extent possible, in any situation where your company bears tariff-related risks (generally, where your company has agreed to act as the importer of record), you want to be in the posture of moving contracts toward the second scenario.
Look for ways to update supply-side contracts for supply chain flexibility and sharing of risk. Fixed-price contracts typically assign cost risk to the seller. If tariffs increase costs, suppliers cannot unilaterally demand price adjustments unless the contract allows for cost-sharing mechanisms. An example of price adjustment protection language would be as follows: Supplier reserves the right to adjust prices to reflect the impact of any tariffs, duties, or similar governmental charges imposed after the date of this proposal. These adjustments will be calculated to ensure fair allocation of the increased costs. Supplier will provide advance notice of any such adjustments along with documentation supporting the changes.
Look for ways to update sell-side contracts for allowing surcharges and pricing flexibility. Sellers wanting to protect themselves and to have added flexibility should seek to include price adjustment rights in their contracts. Some contracts tie prices to commodity indexes, mitigating the impact of sudden market changes. If a supplier anticipates tariff risks, an indexed pricing structure may provide some protection.
Incorporate procedures to regularly review new contracts and contracts coming up for renewal to incorporate tariff flexibility and tariff-sharing provisions. Regularly reviewing new contracts and contracts up for renewal allows companies the opportunity to amend their standard terms and conditions and to incorporate provisions that can lead to more flexibility and an equal tariff-sharing burden. An example of contract language to create flexibility in a tariff-changing environment would be: If new tariffs, duties, or similar government-imposed charges are introduced after contract execution, the parties will renegotiate pricing in good faith to reflect the impact of such charges.
Look for ways to create commercial leverage to share tariff-related risks. The imposition of additional tariffs can be just as devastating for sellers as it is for buyers. Look for contractual leverage points relating to contract renewals or potential expansion of purchasing patterns. Consider moving up contract renewals to combine term extensions with tariff-related risk sharing. By proactively addressing these issues in supply chain agreements, businesses can better navigate economic volatility while maintaining contractual clarity and financial stability.
Foley Automotive Update 19 February 2025
Foley is here to help you through all aspects of rethinking your long-term business strategies, investments, partnerships, and technology. Contact the authors, your Foley relationship partner, or our Automotive Team to discuss and learn more.
Key Developments
Automakers and suppliers are delaying certain investment decisions and considering a range of scenarios to adjust production and supply chains in response to President Trump’s tariff policies that include a 25% tariff on certain automobile and semiconductor imports that could be announced as soon as April 2, the potential for broader “reciprocal tariffs” on all countries that tax U.S. imports, 25% levies on steel and aluminum imports, and uncertainty over proposed 25% tariffs on all U.S. imports from Mexico and Canada that were paused for a “one month period” as of February 3.
Major automakers are reported to be increasing their lobbying efforts over concerns certain tariff and trade policies of the Trump administration will lead to higher manufacturing costs and job losses in the U.S.
Foley & Lardner partner Greg Husisian provided insights in Manufacturing Dive on the potential ramifications of President Trump’s 25% tariffs on steeland aluminum imports, as well as commentary in CNN here and here regarding the Trump administration’s proposed “reciprocal tariffs” on numerous trading partners. Visit Foley & Lardner’s 100 Days and Beyond: A Presidential Transition Hub for more updates on policy analysis and the business implications of the Trump administration across a range of areas.
Vehicle imports represented 53% of 2024 U.S. new light-vehicle sales, according to analysis from GlobalData featured in CNBC. The top three nations for U.S. vehicle imports last year were Mexico (16.2%), Korea (8.6%) and Japan (8.2%).
Canada accounts for roughly 20% of U.S. steel imports and 50% of aluminum imports. The U.S. exported over $16 billion of steel and aluminum products to Canada in 2024.
Environmental Protection Agency Administrator Lee Zeldin on February 14 announced plans to submit certain California emissions waivers for Congressional review. The action could result in a repeal of waivers approved under the Biden administration that supported California’s Advanced Clean Cars II, Advanced Clean Trucks, and Omnibus NOx rules. Earlier this month, the U.S. Supreme Court denied the Trump administration’s request to pause three cases so the EPA could reevaluate Biden-era regulations that include the decision to grant California a Clean Air Act waiver allowing the state to implement its own greenhouse gas emissions standards for vehicles.
OEMs/Suppliers
Ford informed suppliers it will delay the launch of its next-generation F-150 pickup truck, according to a report in Crain’s Detroit.
Ford reported 2024 net income of $5.9 billion on total revenue of $185 billion, representing year-over-year increases of 37% and 5%, respectively. The automaker projected its 2025 operating profit could decline by 17% to 31% YOY due to challenges that include pricing competitiveness, lower sales volumes, and the expectation for up to $5.5 billion in losses for its EV and software operations.
Private equity firm KKR and Taiwanese electronics giant Hon Hai Precision Industry (Foxconn) were reported to be considering investments in Nissan following the automaker’s breakdown of merger discussions with Honda.
GM laid off 79 hourly workers at its CAMI Assembly plant in Ingersoll, Ontario. The plant produces the BrightDrop electric commercial van.
Isuzu will invest $280 million to establish a commercial truck manufacturing plant in South Carolina.
GM intends to close a plant in Shenyang, China, as part of a broader restructuring in the nation in response to declines in market share, according to unnamed sources in Reuters.
Market Trends and Regulatory
The Wall Street Journal provided a breakdown of the U.S. market share and production of certain overseas automakers that could be affected by new import tariffs.
The Alliance for Automotive Innovation expressed its support for the nomination of Jonathan Morrison to serve as Administrator of the National Highway Traffic Safety Administration. Morrison most recently held a position at Apple, and he previously served as NHTSA’s Chief Counsel during the first Trump administration.
A Rhode Island federal judge ruled on February 10 that substantive effects have persisted for the now-rescinded January 27 Office of Management and Budget memorandum (M-25-13) that called for a freeze on certain federal grants, loans and other financial assistance. The judge also “rejected the administration’s argument that some funds — including assistance under the Inflation Reduction Act (IRA) and the Infrastructure Investment and Jobs Act (IIJA) — have remained properly frozen in an effort to ‘root out fraud,’ writing that his order required all frozen funding to be restored.”
Automakers are among the entities lobbying the Trump administration to pursue a gradual phaseout of certain EV tax credits rather than an abrupt end.
A Massachusetts federal judge ruled against automakers that sought to block implementation of the state’s “right-to-repair” law. In the lawsuit filed in 2020, automakers had cited concerns that included cybersecurity risks and the potential for inconsistencies with certain federal laws.
Automotive News provided an overview of the manufacturing investments that could beat risk if the IRA or large portions of it are repealed.
Auto insurance costs may rise for consumers if vehicle repair costs are impacted by tariffs on auto parts.
A report in Automotive News predicts an increase in automotive plants with the flexibility to produce multiple propulsion systems.
BYD is reported to be pursuing discussions to sell European automakers carbon credits to help mitigate the effects of stricter emissions standards in the European Union. The European Commission could announce an action plan next month in response to automakers’ concerns over the compliance costs associated with 2025 CO2 emissions targets in the bloc.
The Trump administration agreed to pause additional layoffs at the U.S. Consumer Financial Protection Bureau, according to a February 14 court order. However, the future of the lending institutions’ regulator is currently unclear.
Autonomous Technologies and Vehicle Software
BYD will include advanced driver-assistance systems as a standard feature in many of its future models sold in China at no additional cost to buyers. Capabilities of BYD’s “God’s Eye” system will vary depending on the vehicle classification. The automaker is also developing plans to integrate software from Chinese AI startup DeepSeek.
GM announced a goal for its Super Cruise hands-free driver-assist system to reach $2 billion in annual revenue within five years.
Industry stakeholders at the 5g Automotive Association symposium emphasized the importance for automakers to invest in vehicle-to-everything (V2X) connectivity.
Lyft plans to debut driverless rides in Mobileye-powered robotaxis as soon as next year, beginning in Dallas.
Electric Vehicles and Low Emissions Technology
J.D. Power predicts 2025 U.S. EV market share will hold at 9.1%,to match last year’s sales levels of 1.2 million units.
Toyota plansto begin shipping batteries for North American electrified vehicles from its Battery Manufacturing North Carolina plant in April 2025. This is Toyota’s first in-house battery manufacturing plant outside Japan and it represents nearly a $14 billion investment.
Electric truck maker Nikola filed for Chapter 11 bankruptcy protection.
Automaker-backed EV charging company Ionna plans to continue adding infrastructure at pace without relying on NEVI funding, with a priority on hubs around cities to serve drivers that are not able to install a home charger.
Rivian’s electric van is now available for purchase by any entities with a fleet of commercial vehicles. The vehicles were previously exclusively sold to Amazon.
A group of Republican senators introduced legislation to establish a $1,000 tax on new EV purchases to fund federal road repairs.
Analysis by Julie Dautermann, Competitive Intelligence Analyst
Federal Circuit Clarifies § 101 Patent Eligibility for Composition-of-Matter Claims
In a significant decision, the Federal Circuit reversed the U.S. International Trade Commission’s (ITC) finding that claims of U.S. Patent No. 10,508,502 (502 Patent) were invalid under 35 U.S.C. § 101. The opinion addresses critical issues in patent eligibility jurisprudence, particularly regarding composition-of-matter claims and provides additional clarity for patent owners facing § 101 challenges.
Background of the Case
The case, US Synthetic Corp. v. ITC, involves petitioner’s allegations that various companies violated Section 337 of the Tariff Act by importing products that infringed its 502 Patent. The 502 Patent pertains to polycrystalline diamond compacts (PDCs) used in drilling applications.
At issue was Claim 1 of the 502 patent, which describes the structural and magnetic properties of the PDC as follows:
A polycrystalline diamond compact, comprising:
a polycrystalline diamond table, at least an un-leached portion of the polycrystalline diamond table including:
a plurality of diamond grains bonded together via diamond-to-diamond bonding to define interstitial regions, the plurality of diamond grains exhibiting an average grain size of about 50 μm or less; and
a catalyst including cobalt, the catalyst occupying at least a portion of the interstitial regions;
wherein the un-leached portion of the polycrystalline diamond table exhibits a coercivity of about 115 Oe to about 250 Oe;
wherein the un-leached portion of the polycrystalline diamond table exhibits a specific permeability less than about 0.10 G∙cm3/g∙Oe; and
a substrate bonded to the polycrystalline diamond table along an interfacial surface, the interfacial surface exhibiting a substantially planar topography;
wherein a lateral dimension of the polycrystalline diamond table is about 0.8 cm to about 1.9 cm.
The ITC’s Ruling
The ITC’s Administrative Law Judge (ALJ) ruled the claims were patent-ineligible under § 101, reasoning that while the claimed PDC was a physical product, its claimed magnetic properties—coercivity, specific permeability, and specific magnetic saturation—were merely side effects of the manufacturing process and did not define structural elements. The ALJ concluded that the claims were directed to an abstract idea, namely: unintended “results or effects” of the manufacturing process. A divided Commission affirmed, rejecting petitioner’s argument that magnetic properties are structural or indicative of structure, and instead agreeing with the ALJ that the claimed properties were not a sufficiently concrete structure but rather a reflection of natural phenomena.
The Federal Circuit’s Analysis
The Federal Circuit’s decision, delivered by Judge Chen, reversed the ITC’s ruling on patent eligibility, holding that the claimed invention was not directed to an abstract idea but instead to a specific, non-abstract composition of matter, namely, a PDC defined by its constituent elements.
The court rejected the ITC’s reasoning that the magnetic properties were merely side effects of a manufacturing process, and instead found that the relationship between the measured properties and the structure of the PDC was sufficiently disclosed in the patent specification and magnetic properties such that the claimed magnetic properties further define the structural characteristics of the claimed product. In this regard, the Federal Circuit clarified that patent claims do not need a “perfect proxy” for structural properties to survive § 101 scrutiny. The court noted, “The disclosed relationship here is sufficient for § 101, where we are trying to ascertain as a matter of law whether a patent claim is directed to a specific implementation of an idea or merely just the idea itself.”
The ruling also noted that the ITC’s reliance on cases involving software and algorithmic patents, was inappropriate. Unlike those cases, which involved performing functions using generic computer components, the 502 Patent’s composition-of-matter claim defined a tangible, physical product. The Federal Circuit drew a clear distinction, stating, “The claimed PDC is not an abstract result of generic computer functionality, but instead is a physical composition of matter defined by its constituent elements, dimensional information, and inherent material properties.”
Why this Case is Important
This decision has significant implications for composition-of-matter claims. It provides another foothold for protecting physical inventions, particularly in materials science, chemistry, and engineering. Had the ITC’s ruling stood, it could have set a dangerous precedent, casting doubt on patents that define materials by their measurable properties rather than their physical structure. The ruling also provides additional clarity on how § 101 considerations apply to composition-of-matter patents, pushing back against overbroad interpretations of the “abstract idea” exception.
This decision also draws a line against extending the applicability of software and business method jurisprudence into cases where patents define physical structures or claimed parameters that are concrete, objective measurements for defining the invention.
Ultimately, this case serves as an important precedent for patent owners, particularly those in industries where innovations are defined by measurable material properties. By reaffirming the eligibility of composition-of-matter patents, the Federal Circuit provided a clearer path for protecting physical innovations under § 101.
Key Takeaway
The Federal Circuit makes clear that the broader context of the entire patent is important in the analysis. When including claims using non-structural properties, be sure that the specification describes a sufficient correlation between the claimed effects/results and any unclaimed physical characteristics. These correlations should be concrete and meaningful, rather than merely speculative. The specification should sufficiently disclose the relationship between the claimed properties and the structure.
For further details, patent professionals are encouraged to review the full court opinion and consider how this decision may influence their current and future portfolio and/or litigation strategies.
AI and Blockchain – 1+1 =3
Individually, AI and blockchain are among the hottest, most transformative technologies. Collectively, they are incredibly synergistic – hence the 1+1=3 concept in the title. We are seeing more examples of how the two will interact. Over time, the level of interaction will be extensive. Many projects are being developed that bring the power of AI to blockchain applications and vice versa. One of these projects that has garnered significant attention is the Virtuals Protocol. The project launched in October 2024 via integration with Base, an Ethereum layer-2 network. Just recently, the project announced that it is expanding to Solana.
The Virtuals Protocol is a decentralized platform for buying, trading, and creating AI agents. It transforms AI agents into tokenized, revenue-generating assets. By leveraging blockchain technology, Virtuals Protocol enables the creation, co-ownership, and interaction with AI agents, expanding their potential across various applications.
AI agents are software programs that can interact with their environment, collect data, and use the data to perform self-determined tasks to meet predetermined goals. Humans set goals, but an AI agent independently chooses the best actions it needs to perform to achieve those goals. See “What are AI Agents?” for more information.
How Virtuals Protocol Works
The Virtuals Protocol integrates AI agents, blockchain infrastructure, and tokenization to create a scalable, decentralized ecosystem. Here’s a breakdown of how it operates:
Agent Tokenization: AI agents are minted as ERC-20 tokens with fixed supplies, paired with $VIRTUAL in locked liquidity pools. These tokens are deflationary through buyback-and-burn mechanisms.
G.A.M.E Framework: Agents utilize multimodal AI capabilities, such as text generation, speech synthesis, gesture animation, and blockchain interactions. This framework allows agents to adapt in real-time.
Revenue Routing: Agents earn revenue through inference fees, app integrations, or user interactions. The proceeds flow into their on-chain wallets for buybacks or treasury growth.
Memory Synchronization: Agents retain cross-platform memory through a Long-Term Memory Processor, ensuring user-specific, contextual continuity.
Decentralized Validation: Contributions and model updates are governed by a Delegated Proof of Stake (DPoS) system, ensuring agent performance aligns with community standards.
On-Chain Wallets: Each agent operates an ERC-6551 wallet, enabling autonomous transactions, asset management, and financial independence.
What Virtuals Do
The Virtuals Protocol redefines digital engagement across gaming, entertainment, and decentralized economies. By simplifying AI adoption, rewarding contributors, and lowering barriers for non-experts, it creates a scalable ecosystem that delivers value for stakeholders. The platform’s agents collectively hold a valuation of over $850 million at the time of publishing, led by Mentigent and aidog_agent. Ownership of these two tokenized AI agents is fractionalized; each is held by more than 200 owners who receive a share of the revenue generated.
Sample Legal Issues Associated with Virtuals
As with any emerging technology, Virtuals Protocol faces several legal challenges:
Intellectual Property Rights: The creation and use of AI agents raise questions about the ownership and protection of intellectual property. Ensuring that creators and users have clear rights and protections is crucial;
Data Privacy: AI agents collect and process vast amounts of user data, raising concerns about data privacy and security. Robust safeguards are necessary to protect user information;
Liability and Safety Standards: Ensuring the safety and reliability of AI agents is essential. Legal frameworks must address potential liabilities and establish safety standards to protect users; and
Regulatory Compliance: As AI and blockchain technologies evolve, regulatory compliance becomes increasingly complex. Virtuals Protocol must navigate various legal requirements to ensure its operations remain lawful and ethical.
Securities Laws: The tokenization of AI agents as ERC-20 tokens and the fractionalized ownership of high-value AI agents may attract scrutiny under securities laws. If the SEC deems these tokens to be investment contracts under the Howey Test, the project could face enforcement actions, requiring registration. See here for our discussion on the SEC’s gameplan for crypto under Trump.
Consumer Finance Laws: The collection and processing of user data by AI agents could subject the project to data privacy and consumer protection regulations. Furthermore, if promotional efforts are perceived as deceptive or unfair to users or investors, this could lead to enforcement actions under federal or state consumer protection laws. To the extent revenue-sharing models are subject to consumer protection laws, this could trigger requirements for fair and clear disclosures to fractionalized owners.
AI-Specific Regulations: The Federal Trade Commission (FTC) has issued guidance emphasizing the importance of transparency and honesty in the use of AI, and cautioning against deceptive practices such as making misleading claims about AI capabilities or results. Overstating the capabilities or revenue generating potential of AI agents to attract users or investors could lead to increased regulatory scrutiny and enforcement. Proposed federal legislation, such as the Algorithmic Accountability Act, would require projects like Virtuals to assess the impacts of bias and discrimination on automated decision-making systems, including AI. AI agents may require audits for bias, transparency, and accountability, particularly given their use in user interactions and decision-making.
Despite the novel legal issues Virtuals Protocol presents, the project represents an exciting and significant advancement in the integration of AI and blockchain technologies. By transforming AI agents into tokenized assets, it creates new opportunities for digital engagement and revenue generation. However, addressing the associated legal issues is essential to ensure user trust and the platform’s sustainable growth.
Noncompete Bans – Next Up: Ohio
This month, Ohio joined the list of states with pending legislation to ban noncompetes.* With the FTC noncompete ban blocked on a nationwide basis last year, Ohio lawmakers introduced a bill on February 5, 2025, that would ban noncompete contracts as a condition of employment in the state. If enacted as written, Ohio would become the fifth state with such a ban, following California, Minnesota, North Dakota, and Oklahoma.
Ohio S.B. No. 11 seeks to prohibit employers from entering into, attempting to enter into, presenting or attempting to enforce an agreement that prohibits or penalizes a “worker” for competing. The law defines “employer” as anyone “who hires or contracts with a worker to perform services for the person.” “Worker” is defined very broadly to include employees, independent contractors, externs, interns, volunteers, and apprentices.
The Ohio bill goes a step further to address choice of law and forum provisions in employment contracts. It provides that, for agreements entered into or modified after the law’s effective date, an employer cannot enforce a non-Ohio venue or forum provision against a worker who primarily resides and does business in the state. Nor can employers deprive such workers of any substantive legal protections provided by Ohio laws, such as through a non-Ohio choice of law provision. There is an exception, however, if a worker is individually represented by counsel to negotiate the agreement and it is the worker who chooses the non-Ohio choice of law or venue.
Finally, the bill provides a private right of action to employees and authorizes the state attorney general to bring an action against the employer, with costs and fees available to the prevailing worker or attorney general, as well as actual damages, punitive damages up to $5,000, and injunctive relief.
The Ohio bill does not address confidentiality or non-solicitation agreements. The proposed law is also silent on whether the bill would apply retroactively to invalidate existing noncompete agreements that Ohio employees have already signed with their employers.
Employers expecting to enter (or those with existing) noncompete agreements with employees in Ohio or any of the other states with pending legislation, bans, or penalties should work with counsel to consider any implications of the pending legislation. We will continue to monitor and report on developments in this area of the law.
*Maine and Rhode Island failed to pass their respective legislation in April and June 2024, respectively, after their governors vetoed the bills that would have banned all employee noncompetes in those states.
Steel and Aluminum Import Tariffs of 25% to Take Effect March 12; Reciprocal Tariffs Announced
President Donald Trump reinstated 25% tariffs on global steel imports in a Feb. 10, 2025, proclamation, “Adjusting Imports of Steel Into the United States.” In a second proclamation, Trump raised tariffs on global aluminum imports from 10% to 25%. These duties will take effect at 12:01 a.m. Eastern Standard Time on March 12, 2025, and are in addition to any antidumping (AD) or countervailing (CV) duties on products of China, or other applicable duties that may apply, impacting the construction, energy, food and beverage, and consumer product sectors.
Round 2 Terminates Agreements and Exemptions and Raises the Bar on Aluminum
In the steel and aluminum proclamations, Trump refers to the continued increase in imports and decrease in domestic production as threatening to impair U.S. national security to reinstate duties on global imports under section 232 of the Trade Expansion Act of 1962 (“section 232”).
The February proclamations terminate any prior arrangements with Argentina, Australia, Brazil, Canada, Japan, Mexico, South Korea, the European Union, and the United Kingdom that effectively suspended the section 232 duties on steel imports and those made with Argentina, Australia, Canada, Mexico, the EU, and the UK on aluminum imports.
The product exclusion process is terminated such that no new product requests may be considered and no renewals of previously granted requests are permitted. Holders of previously granted exclusions can benefit from the exemption until it expires or until the excluded product volume is imported, whichever occurs first. General approved exclusions are also terminated.
The proclamations cover steel and aluminum derivative products such as steel nails and tacks and aluminum cables and wire. The appendices to the proclamations, released Feb. 14, 2025 (Adjusting Imports of Steel Into the United States and Adjusting Imports of Aluminum Into the United States), contain an expanded list of derivative products including steel columns, beams, stranded wire, tubes, pipes, door and window frames, scaffolding, modular building units, containers for liquified gas, and aluminum household articles, doors and window frames, hinges and parts designed for motor vehicles, and more. Domestic producers and industry associations may request that additional products be covered if they establish imports have increased in a manner that threaten to impair national security.
Any covered steel product that is classified in Chapter 73 of the Harmonized Tariff Schedule of the U.S. (HTSUS) will carry the additional 25% tariff on the value of the declared product; covered steel products in other HTSUS chapters will carry the additional 25% tariff only on the steel component of the imported product.
Any covered aluminum product that is classified in Chapter 76 of the HTSUS will carry the additional 25% tariff on the value of the declared product; covered aluminum products in other HTSUS chapters will carry the additional 25% tariff only on the aluminum component of the imported product.
The proclamations exempt from the 25% duties downstream articles that were melted and poured, in the case of steel articles, or smelted and cast, in the case of aluminum articles, in the United States. Importers of downstream articles must show proof to receive exemption under new U.S. Customs and Border Protection (CBP) requirements.
CBP must prioritize evaluating classifications of covered steel and aluminum products and “assess monetary penalties in the maximum amount permitted by law and shall not consider any evidence of mitigating factors in its determination.”
Duty drawback, which enables importers and exporters to recover already paid duties, will not be allowed on the steel and aluminum tariffs. For shipments going to a foreign trade zone (FTZ), the date of arrival of shipments into the FTZ will be the date that determines any owing duty when the merchandise enters the commerce of the United States. This callout for FTZs obviates one of the major benefits of using an FTZ.
Key Takeaways: Steel
1)
Effective at 12:01 a.m. EST on March 12, 2025, steel products and certain downstream steel articles will be subject to a 25% tariff on entry or withdrawal from warehouse for consumption. The 25% duty is in addition to any other duties, fees, exactions, and charges applicable to the imported article.
2)
Section 232 arrangements with specific countries are terminated as of March 12, 2025, and as of 12:01 a.m. EST on March 12, 2025, imports will be subject to a 25% duty on entry or withdrawal from warehouse for consumption.
3)
The product exclusion process is terminated, effective Feb. 10, 2025. Granted product exclusions remain effective until their expiration date or until excluded product volume is imported, whichever occurs first.
4)
The exemption for steel articles imports from Ukraine is terminated and imports will be subject to the 25% duty.
5)
Additional downstream steel articles will be subject to the 25% duty, “except for derivative steel articles processed in another country from steel articles that were melted and poured in the United States.” Importers of steel derivative articles must provide any information necessary (i.e., melt and pour certification on mill test certificate or other proof) to identify the steel content used to manufacture the steel derivative articles being imported.
Key Takeaways: Aluminum
1)
As of 12:01 a.m. EST on March 12, 2025, aluminum products and certain derivative aluminum articles will be subject to a 25% tariff on entry or withdrawal from warehouse for consumption. The 25% duty is in addition to any other duties, fees, exactions, and charges applicable to the imported article.
2)
Section 232 arrangements with specific countries are terminated as of March 12, 2025, and as of 12:01 a.m. EST on March 12, 2025, imports will be subject to a 25% duty on entry or withdrawal from warehouse for consumption.
3)
Extends the 25% tariff to apply to additional derivative aluminum articles, unless the derivative aluminum article processed in another country was smelted and cast in the United States.
4)
Imports of derivative aluminum articles that contain “any amount of primary aluminum used in the manufacture of the derivative aluminum articles is smelted in Russia, or the derivative aluminum articles are cast in Russia,” are subject to a duty of 200%.
5)
Importers of aluminum derivative articles shall provide to CBP any information necessary to identify the aluminum content used in the manufacture of aluminum derivative article imports covered by the proclamation.
Reciprocal Tariffs in Sight
The rules-based principle of the “most favored nation” (MFN) approach is that countries treat all trading partners equally. The lowest duty on a product granted to one country must be granted to imports of like products from all countries. The United States historically has abided by this cornerstone principle along with all trading partners who are World Trade Organization members.
On Feb. 13, 2025, President Trump issued a memorandum on “Reciprocal Trade and Tariffs” to the Secretary of Commerce and the U.S. Trade Representative to “initiate…all necessary actions to investigate the harm to the U.S. from any non-reciprocal trade arrangements adopted by any trading partners.” Upon completion, they are to submit a report to the President “detailing proposed remedies in pursuit of reciprocal trade relations.” Based on comments from the incoming Secretary of Commerce, any reciprocal tariffs may be imposed as early as April 2, 2025. The White House released examples of unfair trade: The U.S. tariff on ethanol is 2.5% and Brazil charges U.S. ethanol exports a tariff of 18%. The EU imposes a 10% tariff on imported cars; the U.S. tariff is 2.5%. Trump’s announcement also focuses on nontariff barriers, such as the EU’s value added tax (VAT) and Canada’s digital service tax.
Reciprocal tariffs effectively would raise tariffs on exports to the United States based on the level of tariffs or non-tariff barriers that the country imposes on U.S. imports. Aspects to follow include how Commerce proposes quantification of tariffs on a country-specific basis, particularly as to nontariff barriers; whether certain countries, like India, may negotiate their way out of reciprocal tariffs; how any reciprocal tariffs would apply to countries with which the United States has free trade agreements, and CBP enforcement considerations regarding tariff implementation.
A More Business-Friendly Approach to Innovation, Risk Management and Derivatives Regulation: What to Expect From Incoming CFTC Chairman Brian D. Quintenz
President Donald Trump’s nomination of Brian D. Quintenz to serve as Chairman of the Commodity Futures Trading Commission (CFTC or Commission) portends a potential shift towards a more business-friendly regulatory approach to overseeing US derivatives markets and CFTC-regulated products. Informed by his years of private sector and public service experiences,1 Mr. Quintenz will return to the CFTC with helpful insights into how regulations practically impact market participants.
As a CFTC commissioner from 2017 to 2021 under the first Trump administration, Mr. Quintenz consistently focused on addressing actual market risks while promoting innovation and technology. Mr. Quintenz’s record suggests that he will be a chairman who embraces technological innovation while insisting on practical safeguards, seeks targeted rather than sweeping regulatory solutions, and works closely with other regulators both domestically and abroad. In each area, he has emphasized that the CFTC should seek to address real market impacts and consider the practical implications of the agency’s rulemakings and guidance. Drawing from his past public statements both while he was a CFTC commissioner and in the years following his government tenure, this advisory briefly examines how Mr. Quintenz’s regulatory worldview will likely influence several key CFTC initiatives, from market innovation to international harmonization efforts.
Following President Trump’s February 12 nomination, Mr. Quintenz will need to secure Senate confirmation before assuming the chairmanship. While the Senate has not yet scheduled confirmation hearings, the process typically extends several weeks or months after nomination as the Senate conducts its review.
Innovation and Technology
Mr. Quintenz’s approach to innovation and technology reflects a pro-business, pro-innovation stance moderated by practical risk management considerations. Rather than supporting blanket or vague regulations that inadvertently engulf a wide array of technologies, Mr. Quintenz has advocated for a more tailored approach that first identifies specific risks, then examines existing market-based solutions, and finally determines whether additional regulation can effectively address remaining concerns.2 Mr. Quintenz has argued “the Commission should not adopt . . . regulations to address amorphous, hypothetical concerns or simply for the sake of having them on the book.”3
Mr. Quintenz’s philosophy aligns with the CFTC’s mandate as set forth in the Commodity Exchange Act (CEA) for the agency to promote responsible innovation.4 Mr. Quintenz has consistently followed this mandate in his various leadership roles at the agency. For instance, as sponsor of the CFTC’s Technology Advisory Committee, he demonstrated this balanced approach by driving the broader integration of financial technology in derivatives markets while seeking appropriate safeguards through state-of-the-art risk control mechanisms and scalable cybersecurity programs.5
In the context of his record on supporting or challenging Commission rulemaking, his stance on the ultimately withdrawn Regulation Automated Trading (Reg AT) further illustrates his philosophy regarding innovation and risk management. Mr. Quintenz opposed the various iterations of Reg AT because in his view each proposal departed from promoting responsible innovation, arguing that the proposals would have imposed rigid, one-size-fits-all risk controls while failing to address specific market risks posed by automated trading.6 He particularly criticized one of Reg AT’s requirements to disclose proprietary source code without a subpoena, viewing this as an example of unnecessary regulatory overreach that would stifle innovation without providing corresponding regulatory benefits.7
Digital Assets. Drawing on his experience as both a CFTC commissioner and private fund advisor, Mr. Quintenz has demonstrated that he is a strong advocate for functional and well-regulated digital asset markets. He also has pushed for the agency to take a balanced and pragmatic perspective towards fraud concerns. In his public statements, Mr. Quintenz highlighted how digital assets can reduce settlement times from days to minutes and enable 24/7 market access — innovations he has argued could reduce costs for market participants while expanding global market accessibility.8
Notably, Mr. Quintenz has advocated for equal regulatory treatment for all financial products at the CFTC, arguing that regulators should focus on enforcing market integrity and preventing fraud rather than deciding which new products are worthy of investment through the adoption of additional regulatory requirements. He has maintained that federal regulators should avoid adopting regulations and imposing requirements with the goal of influencing investment decisions. In his view, investment decisions are best left to markets, investors, and consumers.9 At the same time, Mr. Quintenz has taken a firm stance on fraud and market manipulation, supporting enforcement actions to significantly penalize market misconduct by bad actors.10
Event Contracts. With respect to other innovative products, Mr. Quintenz has raised concerns about the current regulatory framework of CEA section 5c(c)(5)(C) and CFTC Regulation 40.11 covering event contracts,11 which are a type of swap that allow market participants to take positions on the outcomes of specific events. Under this regulation, the CFTC may prohibit a CFTC-regulated contract market or swap execution facility from offering certain event contracts if the contract:(1) involves terrorism, assassination, war, gaming, or an activity that is unlawful under any state or federal law; and (2) the CFTC determines that offering the contract would be against the public interest.12 The CFTC may also prohibit contracts involving similar activities that it determines by rule or regulation to be contrary to the public interest.13
In his March 2021 statement on the CFTC’s consideration of certain sports futures contracts, Mr. Quintenz argued that Congress, not the CFTC, must either ban these contracts outright or establish clear criteria for their review and approval.14 His dissent specifically challenged the CFTC’s decision-making process in the case, questioning both the Commission’s methodologies and statutory authority in evaluating whether the contracts are contrary to the public interest.15
Risk Management
Mr. Quintenz’s views on risk management have centered on targeted approaches rather than broad-sweeping regulations. He has advocated for “smart regulation” that diverges from one-size-fits-all proposals, instead prioritizing thoughtful analysis of policy goals, regulatory costs and impacts on incentives.16 Mr. Quintenz has applied this same principle to regulatory relief, supporting the codification of no-action relief in specific cases to enhance transparency and simplify compliance.17 This strategy reflects his broader commitment to creating clear, practical regulatory frameworks that address real rather than theoretical risks.
Enforcement
Mr. Quintenz has emphasized that “enforcement is not a substitute for guidance” in financial regulation.18 While supporting targeted action against clear violations, he has argued that using enforcement cases to establish regulatory policy — particularly for emerging technologies like digital assets — fails to provide market participants with the clarity they need.19 As he stated in June 2023, “Litigating whether specific tokens are securities through enforcement actions against third parties . . . is inappropriate and does little to protect consumers or provide markets with clarity.”20 To the contrary, Mr. Quintenz has advocated for a collaborative approach where regulators work with market participants to develop clear rules before pursuing enforcement actions.21
Collaboration on Domestic and International Issues
A central tenet of Mr. Quintenz’s regulatory approach has been his emphasis on enhanced coordination among domestic and international regulators. His previous work with Securities and Exchange Commission (SEC) Commissioner Hester Peirce reinforces his commitment to interagency coordination.22 It is likely that Mr. Quintenz will seek to collaborate with incoming SEC Chairman Paul Atkins and other SEC commissioners (including Commissioner Peirce) on areas of overlapping jurisdiction between the agencies, including digital asset classification and the regulation of joint registrants.
On the international front, Mr. Quintenz has advocated for regulatory deference and respect for sovereign regulatory frameworks.23 He has supported a robust deference regime that would limit duplicative regulation while protecting US interests, as evidenced by his support for exemptive relief for non-US derivatives clearing organizations.24 During his time as a CFTC commissioner, he consistently reiterated Congress’s statutory directive that the CFTC has authority to only regulate those foreign activities that have “a direct and significant connection with activities in, or effect on commerce, of the United States.”25
Mr. Quintenz also has advocated for increased reliance on substituted compliance and mutual recognition between jurisdictions as key tools to prevent market fragmentation.26 As a CFTC commissioner, Mr. Quintenz argued that mutual recognition between jurisdictions would preserve market liquidity while respecting different regulatory frameworks. Moreover, he supported a flexible, outcomes-based framework for future comparability determinations that will evaluate the goals of the CFTC’s regulations against the standards of its foreign counterparts’ regimes, as opposed to a rigid prescriptive comparison.27
Conclusion
With the proliferation of new and emerging technologies in US financial markets (such as digital assets, event contracts and generative artificial intelligence (Gen AI)), Mr. Quintenz’s vision for the CFTC will likely result in more pragmatic regulatory policy and enforcement. His support for innovation, emphasis on targeted risk management, and commitment to regulatory coordination will likely shape his approach as CFTC chairman. Under his leadership, the CFTC is likely to pursue a regulatory agenda that balances innovation with investor protection, emphasizing practical, actionable solutions. This approach, combined with his commitment to working with market participants and other regulators, will help guide the Commission through an increasingly complex and interconnected global financial system. For financial services firms, Mr. Quintenz’s chairmanship may signal a period of more pragmatic and targeted regulation, with an emphasis on addressing specific and identifiable risks.
1 Mengqi Sun, Trump Picks Brian Quintenz to Be CFTC Chairman, Wall St. J. (Feb. 13, 2025, 1:47 PM), https://www.wsj.com/articles/trump-picks-brian-quintenz-to-be-cftc-chairman-3e23352d.
2 Brian D. Quintenz, Comm’r, CFTC, “Statement of Commissioner Brian D. Quintenz on the End of His Term and Future Plans” (Aug. 19, 2021), available at: https://www.cftc.gov/PressRoom/SpeechesTestimony/quintenzstatement081921.
3 Brian D. Quintenz, Comm’r, CFTC, “Opening Statement of Commissioner Brian D. Quintenz before the Technology Advisory Committee” (Feb. 14, 2018), available at: https://www.cftc.gov/PressRoom/SpeechesTestimony/quintenzstatement021418.
4 7 U.S.C. § 5(b).
5 See Press Release, CFTC, “Commissioner Quintenz Named Sponsor of the Technology Advisory Committee” (Sept. 18, 2017), available at: https://www.cftc.gov/PressRoom/PressReleases/7611-17.
6 Supra note 3.
7 Brian Quintenz, Comm’r, CFTC, “Keynote Remarks Before the Symphony Innovate 2017 Conference” (Oct. 4, 2017), https://www.cftc.gov/PressRoom/SpeechesTestimony/opaquintenz1.
8 Supra note 6.
9 Brian D. Quintenz, Comm’r, CFTC, “Remarks at the Technology and Standards: Unlocking Value in Derivatives Markets Conference” (Nov. 30, 2017), https://www.cftc.gov/PressRoom/SpeechesTestimony/opaquintenz4.
10 Brian D. Quintenz, Comm’r, CFTC, “Statement of Commissioner Brian D. Quintenz Regarding the Commission’s Enforcement Action against BitMEX” (Oct. 1, 2020), available at: https://www.cftc.gov/PressRoom/SpeechesTestimony/quintenzstatement100120.
11 Brian D. Quintenz, Comm’r, CFTC, “Statement of Commissioner Brian D. Quintenz on ErisX RSBIX NFL Contracts and Certain Event Contracts” (Mar. 25, 2021), available at: https://www.cftc.gov/PressRoom/SpeechesTestimony/quintenzstatement032521.
12 7 U.S.C. § 7a-2(c)(5)(C).
13 Id.
14 Brian D. Quintenz, Comm’r, CFTC, “Statement of Commissioner Brian D. Quintenz on ErisX RSBIX NFL Contracts and Certain Event Contracts” (Mar. 25, 2021), available at: https://www.cftc.gov/PressRoom/SpeechesTestimony/quintenzstatement032521.
15 Id.
16 Brian D. Quintenz, Comm’r, CFTC, “Keynote Address of Commissioner Brian D. Quintenz before the Smart Financial Regulation Roundtable” (Nov. 2, 2017), available at: https://www.cftc.gov/PressRoom/SpeechesTestimony/opaquintenz3.
17 Id.
18 Brian D. Quintenz, Comm’r, CFTC, “Statement of Commissioner Brian D. Quintenz Regarding the Commission’s Enforcement Action against BitMEX” (Oct. 1, 2020), available at: https://www.cftc.gov/PressRoom/SpeechesTestimony/quintenzstatement100120.
19 Id.
20 Former CFTC Commissioner: Enforcement Is Not a Substitute for Guidance, N.M. Sun (June 8, 2023), https://newmexicosun.com/stories/644420239-former-cftc-commissioner-enforcement-is-not-a-substitute-for-guidance.
21 Id.
22 Supra note 2.
23 Id.
24 Id.
25 Brian D. Quintenz, Comm’r, CFTC, “Supporting Statement of Commissioner Brian D. Quintenz Regarding the Cross-Border Application of the Registration Thresholds and Certain Requirements Applicable to SDs and MSPs – Final Rule” (July 23, 2020), available at: https://www.cftc.gov/PressRoom/SpeechesTestimony/quintenzstatement072320.
26 Id.
27 Id.
President Trump Imposes Sanctions on the International Criminal Court
On February 6, 2025, President Donald Trump issued an Executive Order titled “Imposing Sanctions on the International Criminal Court” (the “E.O.”). The E.O. was issued in reaction to the International Criminal Court’s (ICC) assertion of jurisdiction over non-member states, their leaders and personnel.
The ICC
The ICC (not to be confused with the United Nations International Court of Justice) is a treaty-based entity established in 2002 under a multilateral treaty known as the Rome Statute. The ICC has 124 member countries. About 40 countries, including the United States, China, Russia, Egypt, Israel, Saudi Arabia, Sudan, Singapore, Turkey, India, and Indonesia are not members.
The ICC has asserted jurisdiction over, and has opened preliminary investigations into personnel of, the United States and Israel (both of which are non-member states), and has issued arrest warrants for Israeli Prime Minister Benjamin Netanyahu and Former Minister of Defense Yoav Gallant.
The E.O.
The E.O. finds that the ICC has engaged in “illegitimate and baseless actions” that target the United States and certain allies, including Israel. The E.O. notes that “[t]he ICC has no jurisdiction over the United States or Israel, as neither country is party to the Rome Statute or a member of the ICC.” The E.O. further notes that “[n]either country has ever recognized the ICC’s jurisdiction[.]”
The E.O. cites the American Servicemembers Protection Act of 2002, 22 U.S.C. 7421 et seq., which Congress enacted “to protect United States military personnel, United States officials, and officials and military personnel of certain allied countries against criminal prosecution by an international criminal court to which the United States is not a party.”
The E.O. declares that the ICC’s actions set a dangerous precedent, endangering U.S. military and other personnel by exposing them to harassment, abuse, and possible arrest, which threatens U.S. sovereignty and undermines U.S. national security and foreign policy.
The E.O. cautions that “the ICC and parties to the Rome Statute must respect the decisions of the United States and other countries not to subject their personnel to the ICC’s jurisdiction, consistent with their respective sovereign prerogatives.”
The Sanctions
The E.O. imposes sanctions on Karim Kahn, the Chief Prosecutor of the ICC, and authorizes the imposition of sanctions on additional persons that “have directly engaged in any effort by the ICC to investigate, arrest, detain, or prosecute a protected person without consent of that person’s country of nationality[.]”
A ”protected person” is defined to include any U.S. person (unless the United States formally consents to the exercise of jurisdiction over that person or becomes a party to the Rome Statute); any foreign person who is a citizen or lawful resident of a U.S. ally that is not a party to the Rome Statute and that has not consented to the exercise of jurisdiction over that person; and officials of the U.S. government and U.S. allies.
The principal sanctions imposed on Khan (and to be imposed on future designees) are:
Blocking (i.e., freezing) of property and interests in property of the sanctioned person(s) that are in the United States, or that are or come within the possession/control of any U.S. person; and
Prohibiting any U.S. person from providing funds, goods, or services to the sanctioned person(s), or from receiving funds, goods, or services from the sanctioned person(s).
U.S. sanctions are potent tools that lie at the intersection of law, commerce, and international relations. While this particular deployment of sanctions is noteworthy because of its unusual nature, there are thousands of sanctions rules and regulations that govern many facets of international commerce. U.S. and foreign companies should be mindful of their compliance obligations.
2025 Global Franchise & Supply Network Report
We are pleased to present our 2025 Global Franchise & Supply Network Report detailing key legal developments, strategies and insights into the evolving landscape of franchising, licensing, distribution and supply chain management. This report explores various topics, including:
FTC Franchise Rule amendments
Noncompete covenants
Considerations when merging franchise systems
Mediation trends
Considerations for Item 18 of the FTC Franchise Rule
California’s Franchise Investment Law
Recommendations to reduce misclassification, joint employment and vicarious liability risks
Resources
Read the full report
Ex-Schwab Employee Prohibited from Using Client Information
In the case of Charles Schwab & Co., Inc. v. Roberto Ivan Ortega (Case No. 4:24−cv−04962), the United States District Court for the Southern District of Texas issued a Stipulated Preliminary Injunction Order on February 12, 2025.
Charles Schwab alleges that Roberto Ivan Ortega misappropriated its trade secrets and client information to solicit the business of former customers after joining a competitor. After Ortega refused Schwab’s requests to return its information, Schwab filed suit and moved for a preliminary injunction preventing the use or disclosure of its information.
Faced with the reality that a court would likely enter an injunction, Ortega’s counsel agreed to an injunction that prohibited Ortega from using, disclosing, or disseminating Schwab confidential information or soliciting Schwab customers. Ortega is also required to give Schwab access to his computing devices for Schwab to conduct discovery to uncover the scope of the misappropriation.
Courts continue to stress the need to maintain the status quo in cases involving the theft of information. Employers must take the necessary steps to prevent the theft of their information and in the cases where their information has been taken, prevent the use or disclosure of that information by filing a lawsuit and seeking an injunction.