CJEU Recognizes Cross-Border Jurisdiction of National Courts, Long-Arm Jurisdiction of UPC
The Court of Justice of the European Union (CJEU) issued a decision significantly expanding the capabilities of both the Unified Patent Court (UPC) and the national courts in EU Member States to issue cross-border injunctions and adjudicate on patent infringement acts in countries (seemingly) outside their respective jurisdiction. Case C-339/22 (CJEU, Grand Chamber Feb. 25, 2025) ECLI:EU:C:2025:108.
Background
German company BSH Hausgeräte GmbH owns a European patent that is validated in several EU Member States and non-EU countries such as Turkey. BSH sued Swedish company Electrolux AB before a Swedish court for infringement of all national parts of the European patent (including the Turkish part).
Electrolux argued that the parts of the patent validated outside Sweden were invalid and that the Swedish court accordingly lacked jurisdiction to rule on these infringement claims. Electrolux relied on Article 24(4) of Regulation (EU) 1215/2012, the Brussels I bis Regulation, which confers exclusive jurisdiction for questions of patent validity on the courts of the state where a patent is registered.
The Swedish court of first instance declared that it did not have jurisdiction to rule on infringement of any non-Swedish parts of the patent. BSH appealed, and the Swedish Court of Appeal referred key questions to the CJEU about the interplay between Articles 4(1) and 24(4) of the Brussels I bis Regulation. Article 4(1) of the Regulation grants the courts of EU Member States general jurisdiction over all infringement actions committed by a person or company domiciled in their territory (regardless of where the infringement occurred). One of the relevant questions in this case was whether, in light of Article 24(4) of the Regulation, the court hearing the patent infringement action loses jurisdiction when an invalidity defense is raised.
Long-Arm Jurisdiction and Invalidity Defense
The CJEU clarified that Article 24(4) of the Regulation must be interpreted narrowly. According to the CJEU, the “validity of patents” mentioned in Article 24(4) of the Regulation only pertains to validity challenges that would lead to the annulment of the patent with effect erga omnes. Such erga omnes validity proceedings must still be brought before the courts of the forum of registration (e.g., the German Federal Patent Court in the case of the German part of a European patent). However, the CJEU considers that Article 24(4) of the Regulation does not apply to an inter partes invalidity defense raised in patent infringement litigation. Consequently, according to Article 4(1) of the Regulation, a court of an EU Member State in which the infringement case is being heard can decide on patent infringements in another EU Member State or in a third (non-EU) country and does not lose its jurisdiction if an invalidity defense is raised. Patent proprietors can therefore obtain cross-border injunctions in national courts of EU Member States (as well as before the UPC, even in states that do not take part in the UPC), and the courts remain jurisdictionally competent even if the infringer imposes an invalidity defense.
Where a third country outside of the European Union is concerned (e.g., the United Kingdom, Switzerland, or Turkey), the EU infringement court may even have jurisdictional competence to rule on an invalidity defense with inter partes effect. This means that a defendant can obtain a decision dismissing the infringement action on the basis of its invalidity defense (but not resulting in the patent being revoked in whole or in part, as there is no erga omnes effect of such invalidity decision).
Practical Implications
This decision marks a shift from the CJEU’s previous jurisprudence, according to which a cross-border injunction was blocked if the defendant raised an invalidity defense. The decision will also have significant implications for global patent litigation strategies:
Defendants cannot simply escape the forum chosen by the patentee by raising an invalidity defense. They may still file a separate nullity action in the country in which the patent or the relevant national part of a European patent is registered, but the EU infringement court will retain jurisdiction over the question of whether the defendant infringed the patent.
Patent proprietors can sue any defendant based in the European Union for patent infringement in any country (potentially worldwide) before the national courts of domicile. The question of patent infringement would then have to be decided on the basis of the applicable foreign law. This could require multinational litigation teams and expert opinions on foreign law (on matters such as claim construction) as well as possible uncertainty as to how an EU national court might interpret and apply foreign law, such as US or Chinese law. At least in principle, the CJEU’s decision allows EU courts to rule on patent infringement cases globally.
The owner of a non-opted-out European patent can now sue any defendant domiciled in a UPC contracting state for patent infringement, even with regard to infringing acts in European Patent Convention states that are not part of the UPC system (e.g., Spain or Turkey). There is already precedent on this issue (published even before the CJEU decision) in the decision of the UPC Local Division Düsseldorf of January 28, 2025, in the case UPC_CFI_355/2023. Here, the UPC recognized its long-arm jurisdiction regarding the alleged infringement of a European patent in the United Kingdom, even though an invalidity defense was raised and even though the United Kingdom is not part of the UPC system.
While the CJEU granted extensive jurisdiction to national courts and the UPC, it accepted that the infringement court must consider a nullity action in another EU Member State, which may lead to a stay of the infringement proceedings – in particular where the national court sees a “reasonable, non-negligible possibility of that patent being declared invalid” in the pending nullity action. As a result, defendants may have to file multiple nullity actions simultaneously before national courts if a patent owner decides to bring an action for patent infringement in several countries before only one national court. This could exert significant pressure on the defendant, which would have to advance considerable corresponding legal costs.
Practice Note: The CJEU decision strengthens the UPCs power to rule on allegations of infringement occurring in non-UPC countries. However, it also allows national courts in the EU to compete with the UPC in certain cross-border cases, particularly where a defendant domiciled in one country infringes in several countries. In its ruling, the CJEU confirmed the long-arm jurisdiction of both the national courts in the EU Member States and the UPC, and confirmed that raising an invalidity defense does not remove the jurisdiction of the infringement court.
A patent proprietor now can seek a cross-border injunction from a national court in the European Union without the risk of having several parts of its asserted European patent invalidated in a single counterclaim for revocation as in the UPC, but with a greater risk of a stay of infringement proceedings. Accordingly, the UPC has become an even more attractive venue for patent owners but could face additional competition from national courts. Patent proprietors will now be able to choose between EU national courts and the UPC when bringing infringement actions concerning multiple national designations and seeking cross-border injunctions, which translates into increased forum shopping possibilities. The CJEU’s decision may also lead to parallel proceedings in multiple jurisdictions, increasing the complexity of litigation for both parties.
This is where the UPC offers less costly and faster decisions. Because the CJEU confirmed the UPC’s competence to adjudicate on infringement issues related to European patents validated in non-UPC countries (such as the United Kingdom, Spain, Switzerland, and Turkey), the UPC is the more attractive option, especially for patentees with global patent portfolios. Overall, the CJEU’s decision strengthened the role of the UPC in European patent litigation but also introduced new dynamics that may influence cross-border patent litigation strategies.
The decision strengthens the relevance of EU-based courts in global patent litigation and underscores the need for cross-border strategies. Only time will tell whether non-EU courts will also affirm long-arm jurisdictions.
Copper Crisis? The Economic Impacts of a Copper Import Tariff
On February 25, 2025, President Trump signed an executive order directing the Secretary of Commerce to investigate an alleged national security threat to the copper supply chain under Section 232 of the Trade Expansion Act and to report his findings and remediation recommendations.[1]
Why Copper?
Copper is crucial for defense, infrastructure, electronics, and emerging technologies, making it the U.S. Defense Department’s second-most used material. While the United States maintains significant copper reserves, it only produces half of the refined copper it consumes, making it heavily reliant on foreign suppliers. China controls approximately 50% of global smelting and refining capacity, although the United States sources the majority of its foreign copper from Canada, Chile, and Mexico.[svc2] This reliance, along with potential foreign market manipulation, is believed to pose a national security risk to America’s supply of raw copper, copper concentrates, refined copper, copper alloys, scrap copper, and copper derivative products.[3] Currently, no tariffs or quotas exist on copper imports.
What is Section 232?
Section 232 of the Trade Expansion Act of 1962 (19 U.S.C. § 1862) specifically allows the President of the United States to impose import restrictions if certain imports are found to threaten national security. The U.S. Government relies on the Section 232 investigation process to evaluate the threat posed by imports. An application from an interested party or a request from a government department or agency or the Secretary of Commerce can initiate 232 investigations.
Investigative Process
The 232 investigation will evaluate several key aspects of the U.S. copper supply chain. These include the current and projected demand for copper in critical sectors like defense, energy, and infrastructure, as well as the ability of domestic production, smelting, refining, and recycling to meet this demand. The investigation will also examine the role of foreign supply chains, particularly major exporters, and the risks associated with the concentration of U.S. copper imports from a small number of suppliers. It will assess the impact of foreign government subsidies, overcapacity, and predatory trade practices on U.S. competitiveness, as well as the economic effects of artificially suppressed copper prices through dumping and overproduction. The investigation will explore the potential for foreign nations to restrict exports or weaponize their control over refined copper, and whether increasing domestic copper mining and refining capacity could reduce reliance on imports. Finally, it will review the impact of current trade policies and whether measures such as tariffs or quotas are necessary to safeguard national security.
Under U.S. law, the Commerce Department must consult with the Secretaries of Defense, Interior, and Energy, as well as other relevant agencies, during the investigation. Once initiated, the Secretary of Commerce has 270 days to present findings on whether copper import dependence threatens national security, along with recommendations to mitigate these risks, including tariffs, export controls, or incentives for domestic production. The Secretary will also provide policy suggestions for strengthening the copper supply chain through strategic investments, permitting reforms, and enhanced recycling efforts. While the public may have an opportunity to comment on the investigation, it is not required by statute; the Department of Commerce may gather additional information from surveys of industry stakeholders and other external resources. If the Secretary concludes that imports threaten national security, the President has up to 90 days to decide whether to implement trade restrictions based on these findings.
Potential Outcomes
If President Trump decides to act on the 232 investigation results, adjusting imports of copper to mitigate the perceived national security threat, all measures must be implemented within 15 days. Possible actions include new tariffs and quotas, which would not ban the importation of copper, only limit the import amounts and make them more expensive. The 232 investigation results will help determine the tariff rate.
If President Trump seeks to limit or restrict imports, and either no agreement is reached within 180 days or an agreement fails to address the national security threat, he may take additional actions under Section 232. The President must submit a written statement to Congress explaining his decisions within 30 days and publish notice of all actions in the Federal Register.
If President Trump decides action is unnecessary, he must submit a written statement to Congress within 30 days explaining his reasons. He must also publish this determination and the accompanying explanation in the Federal Register.
Correlating Policies and Next Steps
As part of his America First Trade Policy, President Trump signed proclamations to close loopholes and exemptions, restoring a true 25% tariff on steel and raising the aluminum tariff to 25%. He also raised the general tariff on Chinese imports to 20% in response to China’s alleged role in the fentanyl crisis. Shifting focus to protect a strategic mineral like copper appears consistent with this administration’s trade strategy.
While publishing the executive order signals a meaningful action, it merely initiates the 232 investigation. However, given the administration’s current approach to trade strategy, it seems likely this exercise will lead to additional tariffs—potentially reaching the 25% rate applied to steel and aluminum. New tariffs will almost certainly prompt foreign governments to protest and likely bring challenges before the World Trade Organization. And make no mistake – copper import tariffs will impact the U.S. economy. From defense to electronics to automotive, all major U.S. corporations that depend on copper will feel the pinch.
[1] https://www.federalregister.gov/documents/2025/02/28/2025-03439/addressing-the-threat-to-national-security-from-imports-of-copper
[2] https://www.statista.com/statistics/254877/us-copper-imports-by-major-countries-of-origin/
[3] The definition of copper derivate products will likely be the same used for steel and aluminum derivative products found in Section 232 of the Trade Expansion Act of 1962.
Important Update on U.S. Tariffs Impacting Ontario Businesses
The United States has announced the imposition of new tariffs on Canadian goods, effective immediately as of March 4, 2025. These tariffs include a 25% surcharge on a wide range of products imported from Canada. The products include but are not limited to: steel and aluminum products; automotive parts and vehicles; agricultural products such as dairy, beef, and pork; consumer goods like appliances, electronics, and apparel; raw materials and chemicals.
In response to the announcement, Ontario Premier Doug Ford stated on March 4, 2025, that Ontario would implement a reciprocal 25% surcharge on all energy exported by Ontario to the United States. He stated further that it was expected by the Ontario government that the tariffs would have a significant impact on multiple industries including, in particular, manufacturing.
The Purpose and Potential Impact of the Tariffs
The U.S. government has stated that tariffs are intended to protect American industries and jobs over the long term. However, the immediate impact on businesses and customers will be significant. For Canadians, the tariffs are likely to increase the cost of exporting goods to the U.S., potentially leading to reduced demand for Canadian products, and increasing the overall price of goods for citizens. This could result in financial strain on businesses and may necessitate adjustments to the workforce.
Legal Considerations for Workforce Reduction
The imposition of tariffs will pose challenges for many businesses and the workforce. But as we saw with COVID-19, the fact that there are significant and sometimes societal level impacts on the economy, or a particular industry, will not automatically remove or lessen an employer’s obligations to their employees in Ontario. In this regard, some of the major legal considerations to keep in mind as you contemplate how to weather this storm and manage your workforce are as follows:
Compliance with Employment Standards: Ensure that any workforce reductions comply with Ontario’s Employment Standards Act, 2000 (ESA), including proper notice periods and severance pay requirements. There are options short of termination for temporary reductions in work, including layoffs, which may be available.
Human Rights Legislation: Be mindful of the Ontario Human Rights Code, ensuring that layoffs or terminations are not targeted towards any particular group of employees.
Collective Agreements: If your workforce is unionized, review your collective bargaining agreements to understand the rules and procedures for layoffs or terminations. Many collective agreements contain provisions which deal with temporary interruptions of work, voluntary leaves/layoffs, and notice and severance obligations.
Constructive Dismissal: Although there may be an avenue to lay off employees under the ESA, the common law in Ontario does not automatically allow an employer to layoff an employee. It is important to consider, and avoid, how your actions could be construed as a constructive dismissal which could lead to legal claims from employees.
Record Keeping: It is important that you maintain thorough documentation of the reasons for workforce reductions and the steps taken to comply with your legal obligations. This can be crucial in defending against potential legal claims.
It is recommended that you review your employment agreements, collective agreements, and policies, and formulate a plan now that will allow you to respond quickly to changing economic conditions over the coming weeks. As always, and prior to implementing major changes in your workplace, it is important that you obtain advice and comply with your legal obligations.
Cross-Border Catch-Up: Employer Considerations for International Secondments [Podcast]
In this episode of our Cross-Border Catch-Up podcast series, Shirin Aboujawde (New York) and Maya Barba (San Francisco) discuss an important global mobility topic: international secondments. Maya and Shirin focus on key issues for employers to consider, including immigration compliance, employment law considerations in both the home and host countries, as well as obligations related to income tax, social security, and corporate taxation.
Premier Li Qiang Delivers China’s 2025 Work Report – Strengthen the Protection of Intellectual Property
On March 5, 2025, Premier Li Qiang delivered the 2025 government work report on behalf of the State Council at the third session of the 14th National People’s Congress. The work report set up economic and development tasks for 2025 providing insights on how China plans to achieve its economic goals. Excerpts relating to science, technology, and intellectual property follow. More insight into intellectual property goals for 2025 will presumably follow in the Supreme People’s Court’s work report scheduled for March 8, 2025.
The opening ceremony of the third session of the 14th National People’s Congress was held in the Great Hall of the People in Beijing.
The first part of the report, the 2024 work report, mentioned:
We will vigorously promote innovation-driven development and promote the optimization and upgrading of the industrial structure. We will advance the construction of a strong country in science and technology , fully launch and implement major national science and technology projects , accelerate the improvement of major science and technology infrastructure systems , and strengthen the training of top innovative talents .
Part II, the overall requirements and policy orientations for economic and social development in 2025, mentions:
Promote the integrated development of scientific and technological innovation and industrial innovation .
Part III of the 2025 government work tasks mentioned:
We will develop new quality productive forces in accordance with local conditions and accelerate the construction of a modern industrial system. We will promote the integrated development of scientific and technological innovation and industrial innovation , vigorously promote new industrialization, expand and strengthen advanced manufacturing, actively develop modern service industries, and promote the accumulation of new momentum and the renewal and upgrading of traditional momentum.
Cultivate and expand emerging industries and future industries. Deepen the integrated cluster development of strategic emerging industries. Carry out large-scale application demonstration actions for new technologies, new products and new scenarios, and promote the safe and healthy development of emerging industries such as commercial aerospace and low-altitude economy. Establish a mechanism for the growth of investment in future industries, and cultivate future industries such as biomanufacturing, quantum technology, artificial intelligence, and 6G . Deepen the pilot program for the integrated development of advanced manufacturing and modern service industries, and accelerate the development of service-oriented manufacturing. Strengthen the overall layout of industries and capacity monitoring and early warning, and promote the orderly development of industries and healthy competition. Accelerate the innovative development of national high-tech zones. Gradual cultivation of innovative enterprises , promote the development and growth of specialized, refined and new small and medium-sized enterprises, support the development of unicorn enterprises and gazelle enterprises , and allow more enterprises to accelerate in new fields and new tracks.
Stimulate the innovative vitality of the digital economy. Continue to promote the “artificial intelligence +” action , better combine digital technology with manufacturing advantages and market advantages, support the widespread application of large models, and vigorously develop a new generation of intelligent terminals such as intelligent networked new energy vehicles, artificial intelligence mobile phones and computers, and intelligent robots, as well as intelligent manufacturing equipment. Expand the large-scale application of 5G, accelerate the innovative development of the industrial Internet, optimize the national computing power resource layout, and create a digital industry cluster with international competitiveness. Accelerate the improvement of the basic data system , deepen the development and utilization of data resources, and promote and standardize the cross-border flow of data. Promote the standardized and healthy development of the platform economy , and better play its positive role in promoting innovation, expanding consumption, and stabilizing employment.
We will implement the strategy of rejuvenating the country through science and education, and improve the overall efficiency of the national innovation system. We will insist on innovation-driven development, promote education development, scientific and technological innovation, and talent cultivation in an integrated manner, and build a solid foundation and strategic support for China’s modernization.
Promote high-level scientific and technological self-reliance and self-improvement. Give full play to the advantages of the new national system , strengthen key core technology research and development and cutting-edge and disruptive technology research and development, and accelerate the organization and implementation of major scientific and technological projects . Optimize the layout of national strategic scientific and technological forces, promote the reform of scientific research institutes, explore new scientific research organization models of national laboratories, and enhance the radiation and driving capacity of international and regional scientific and technological innovation centers. Promote the tilt of scientific and technological expenditure towards basic research, improve the investment mechanism that combines competitive support with stable support, and improve the degree of organization of basic research. Give full play to the leading role of science and technology leading enterprises, strengthen the deep integration of industry, academia and research led by enterprises, and institutionally guarantee that enterprises participate in national scientific and technological innovation decision-making and undertake major scientific and technological projects. Improve the allocation and management and use mechanism of central fiscal science and technology funds. Improve the support policies and market services for the transformation of scientific and technological achievements, promote the reform of empowerment of official scientific and technological achievements and separate asset management , and improve the efficiency of scientific and technological achievements transformation. Strengthen the protection and application of intellectual property rights. Accelerate the construction of concept verification, pilot verification and industry common technology platforms. Improve the differentiated supervision system of venture capital funds, strengthen policy-based financial support, accelerate the development of venture capital, and strengthen patient capital. Expand scientific and technological openness and cooperation. Strengthen science popularization work and improve citizens’ scientific literacy. Carry forward the spirit of scientists and promote the formation of an innovative environment that encourages exploration and tolerates failure.
The full text is available here (Chinese only).
A Summary of China’s Retaliation Actions Since The Trump Administration
This summary helps to navigate the various retaliation actions China has taken in the past 50 days after President Trump took office on January 20, 2025, to counter the US trade restrictions, including (i) imposing additional tariff on certain US origin products, (ii) adding 12 US companies to the Unreliable Entity List, (iii) control of export of certain precious minerals, (iv) adding 15 US companies to the export control related Controlled Party List and (v) launching anti-circumvention investigation against US fiber optic products.
1. Tarriffs
The following additional tariffs has been imposed on US origin products:
Effective Date
Tariffs on Goods Originated from the US
February 10, 2025
15% on coal and liquefied natural gas10% tariff on crude oil, agricultural machinery, large-displacement cars, and pickup trucks No reduction or exemption.
March 10, 2025
15% on chicken, wheat, corn and cotton10% on sorghum, soybeans, pork, beef, aquatic products, fruits, vegetables and dairy products No reduction or exemption. *Goods that were departed before March 10, 2025, and imported between March 10, 2025 and April 12, 2025 are not subject to the additional tariffs.
2. Unreliable Entity List
The Unreliable Entity List (UEL) is a blacklist administrated by the China Ministry of Commerce (MOFCOM) pursuant to the Regulation on Unreliable Entity List. Companies placed on the UEL may be subject to the following measures:
Restricted or prohibited from import or export from China
Restricted or prohibited from investing in China
Restricted or prohibited from entering into China
Its personnel may be denied of work permits or residency permits
Be imposed with a fine
Since January 20, 2025, China has added 12 companies to the UEL with the list and the applicable restriction as follows.
Effective Date
Unreliable Entity List
Restrictive Measures
February 4, 2025
PVH group* lllumina, Inc. Reasons of Addition – Discriminatory actions against Chinese companies. Termination of normal business with Chinese companies. *As previously reported, MOFCOM launched an investigation against PVH likely in connection with UFLPA. See our previous post. PVH Facing the Risk of Being Placed on China’s Unreliable Entities List | The Trade Practitioner
PVH – Specific restrictive measures to be announced. Illumina – Prohibited its exporting of gene sequencers to China.
March 4, 2025
TCOM, Limited PartnershipStick Rudder Enterprises LLCTeledyne Brown Engineering, Inc.Huntington Ingalls Industries Inc.S3 AeroDefenseCubic CorporationTextOreACT1 FederalExoveraPlanate Management Group. Reasons of addition were not announced.
Prohibited from import and export with China Prohibited from making new investment in China
3. Export Control of Certain Minerals
On March 4, 2025, MOFCOM released an announcement (10th Announcement) to control certain products relating to tungsten, tellurium, bismuth, molybdenum and indium. The 10th Announcement also updates and supplements the Dual-Use Items Control List that was published December 2024.
To facilitate businesses in making classification and assessment of products, the 10th Announcement includes the HS code of each item under control.
For more information about China’s dual-use control and control list, please refer to our previous article: China Releases Consolidated Dual – Use Items Control List | Publications | Insights & Events | Squire Patton Boggs.
4. Controlled Party List (管控名单)
The Controlled Party List (CPL) was first created under the Export Control Law and supplemented under the new Regulations on the Export Control of Dual Use Items that took effect on December 1, 2024. Companies on ECPL are not allowed to purchase any controlled items without a special approval from MOFCOM.
For more information about Controlled Party List, please refer to our previous article: China Released the First Comprehensive Dual-use Items Export Control Regulations | Publications | Insights & Events | Squire Patton Boggs
On March 4, 2025, MOFCOM, for the first time, used the tool of ECPL and added 15 companies to ECPL.
Effective Date
Controlled Party List
Restrictive Measures
March 4, 2025
LeidosGibbs&Cox, Inc.IP Video Market Info, Inc.Sourcemap, Inc.Skydio, Inc.Rapid Flight LLCRed Six SolutionsShield AI, Inc.HavocAINeros TechnologiesGroup WAerkomm Inc.General Atomics Aeronautical Systems, Inc.General Dynamics Land SystemsAero Vironment Reasons of Addition – Protect national security and interest, perform non-proliferation and other international obligations.
Export of dual-use items to the listed companies are prohibited All ongoing export must be stopped immediately If export is necessary under special circumstances, the exporter shall make an application to MOFCOM
5. Anti-circumvention Investigation
On March 4, 2024, MOFCOM announced an anti-circumvention investigation into certain cut-off shifted single-mode optical fiber, marking the first time that China has initiated such an investigation.
The investigation was initiated after receiving an application from Changfei Fiber Optic Cable Co. alleging suspected circumventing of China’s anti-dumping measures. China currently imposes a 33.3%-78.2% anti-dumping duty on US-originated fiber optic products.
The investigation may affect Corning Incorporated, OFS Fitel LLC, and Draka Communications Americas, Inc., and other related US exporters.
French Senators Propose Repealing or Postponing the Implementation of CSRD Requirements Under French Law
On 26 February 2025, the European Commission published its Omnibus simplification package which aims at simplifying several ESG-related legislations.
In the context of this publication, we offered insight on the proposals announced by the Commission, which notably included i) a proposal for a Directive amending the implementation and transposition deadlines of the Corporate Sustainability Reporting Directive (CSRD) and the Corporate Sustainability Due Diligence Directive (CSDDD), and ii) a proposal for a Directive amending the scope and requirements of the CSRD and CSDDD.
The postponement of the CSRD reporting requirements would only concern companies that are not yet subject to reporting. We offer advice on what should companies do on CSRD while they wait for the EU to make up its mind.
Some stakeholders have not waited for the EU to make final decisions before attempting to change companies’ sustainability obligations. While the CSRD was transposed into French law by an Order published in December 2023, several senators proposed on 4 March 2025 to repeal the Order, “in order to avoid major difficulties for companies”.
The same senators also proposed a 4-year postponement on the implementation of sustainability reporting requirements under French law. They argue that the current timeline for the entry into force of the CSRD reporting requirements is already causing significant operational difficulties to French companies. Postponing the implementation of the sustainability reporting obligations for four years would allow companies to better prepare for these new rules, giving them the time needed to structure their reporting effectively, according to these senators.
This position could change and is not definitive insofar as these amendments have been tabled in the Senate on first reading of a bill and are due to be debated in public session on March 10 and (possibly) 11 2025.
These amendments echo the French position published in January 2025, calling for an indefinite delay of the CSDDD, a two-year delay on the CSRD, and well as a significant reduction on the scope of sustainability reporting. However, they may come as a surprise from a country which had already transposed the CSRD and that was a forerunner on the duty of care.
Adèle Bourgin contributed to this article.
UK ICO Publishes 2025 Tech Horizons Report
On February 20, 2025, the UK Information Commissioner’s Office (“ICO”) published its annual Tech Horizons Report (the “Report”), which explores four key technologies expected to play a significant role in society over the next two to seven years. These technologies include connected transport, quantum sensing and imaging, digital diagnostics and therapeutics, and synthetic media. The Report also discusses the ongoing work of the ICO in addressing data protection and privacy concerns related to the emerging technologies featured in their previous Tech Horizons reports.
The Report provides an overview of how key innovations are seeking to reshape industries and everyday life, the privacy and data protection implications of such innovations, and the ICO’s proposed recommendations and next steps. Below are examples of some of the potential privacy and data protection implications identified by the ICO, along with certain recommendations:
Connected Transport
Connected vehicles collect extensive and wide-ranging personal data for various purposes in a “complex ecosystem” of controllers and processors. Those organizations with transparency obligations must ensure they provide clear, concise and accessible privacy notices to individuals (including passengers); however, the ICO acknowledges that providing privacy notices in the connected transport environment may be a challenge.
Organizations should identify the correct lawful bases for processing personal data and remember that, in addition to the UK General Data Protection Regulation (“UK GDPR”), the Privacy and Electronic Communications Regulations also may apply in the context of connected transport and may require consent for certain activities.
Biometric technology may be used in connected transport for purposes such as fingerprint scanners to unlock vehicles. This technology requires the processing of biometric data which must comply with the requirements to process special category data.
When vehicles are shared, privacy concerns arise regarding access to data from previous users, such as location or smartphone pairings.
The ICO recommends embedding privacy by design into hardware and services related to connected vehicles to demonstrate compliance with the UK GDPR and other data protection legislation.
Quantum Sensing and Imaging
The ICO acknowledges that in the case of novel quantum sensing and imaging for medical or research purposes, a key benefit is the extra detail and insights provided by the technology. This could be deemed as conflicting with the principle of data minimization. The ICO states that the principle “does not prevent healthcare organisations processing more detailed information about people where necessary to support positive health outcomes,” but that organizations must have a justification for collecting and processing additional information, such as a clear research benefit.
The ICO states that it will continue to find opportunities to engage with industry in this area and to explore any potential data protection risks. The ICO also encourages embedding privacy by design and default when testing and deploying quantum technologies that involve processing personal information.
Digital Diagnostics and Therapeutics
Organizations working in health care are a target for cyber attacks for a number of reasons, including the nature of data held by such organizations. The adoption of digital diagnostics and therapeutics will only increase this risk. Organizations engaged in this space must comply with all applicable security obligations, including the obligation to ensure the confidentiality, security and integrity of the personal information they process in accordance with the UK GDPR.
According to the ICO, while the use of artificial intelligence (“AI”) and automated decision-making (“ADM”) “could improve productivity and patient outcomes,” there is a risk that their use to make decisions could “adversely affect some patients.” For example, bias is a key risk when considering AI and ADM. Organizations should use appropriate technical and organizational measures to prevent AI-driven discrimination. Another material risk is the lack of transparency regarding how AI tools process patient data. The ICO states that lack of transparency in a medical context could result in patient harm, and that the use of AI does not reduce an organization’s responsibility to comply with transparency obligations under the UK GDPR.
The ICO recommends providers implement privacy by design and ensure that any third parties they are engaged with have in place appropriate privacy measures and safeguards. In addition, providers should also ensure they follow guidance regarding fairness, bias and unlawful discrimination.
Synthetic Media
Data protection laws apply to personal data used in creating synthetic media, even if the final product does not contain identifiable information.
If automated moderation is used, the ICO confirms that organizations must comply with the ADM requirements of the UK GDPR.
The ICO intends to develop its understanding of synthetic media, including how personal data is processed in the context. The ICO also will work with other regulators and continue to engage with other stakeholders such as the public and interest groups.
Cross-Border Catch-Up: USAID’s Stop-Work Order—Strategies for Global Employers [Podcast]
In this episode of our Cross-Border Catch-Up podcast series, Patty Shapiro (shareholder, San Diego) and Maya Barba (associate, San Francisco) discuss the effect of the recent United States Agency for International Development (USAID) stop-work order on global employers. Patty and Maya delve into the challenges that impacted organizations are facing as a result of the stop-work order and discuss strategies to manage workforce disruptions in compliance with local labor and employment laws. The speakers explore options such a furloughs, pay reductions and terminations, and also touch on the ongoing legal developments related to the USAID stop-work order. [The legal developments discussed in this episode are current as of February 21, 2025.]
China Issues Measures on Data Protection Compliance Audits
The Cyberspace Administration of China (“CAC”) recently released requirements regarding data protection audits, titled “Administrative Measures on Compliance Auditing of Personal Information Protection” (the “Measures”). The Measures will go into effect on May 1, 2025.
The Measures were promulgated in accordance with the Personal Information Protection Law (“PIPL”) and Administrative Regulations on the Security of Network Data. The Measures set forth the: (1) conditions that would trigger an audit of a data handler’s compliance with relevant personal information protection legal requirements; (2) selection of third-party compliance auditors; (3) frequency of compliance audits; and (4) obligations of data handlers and third-party auditors in conducting compliance audits. An Appendix to the Measures, titled “Guidelines on Personal Information Protection Compliance Auditing” (the “Guidelines”), contains additional compliance audit requirements.
Voluntary and Mandatory Compliance Auditing
The Measures will require data handlers that process the personal information of more than 10 million individuals to conduct compliance auditing at least once every two years.
The Measures will permit cyberspace administration and other relevant authorities to request data handlers to conduct third-party audits where:
the data handler’s processing activities pose a great risk to the rights and interests of individuals;
the data handler lacks sufficient security measures;
the data handler’s processing activities may infringe on the rights and interests of a large number of individuals; or
the data handler experiences a data breach that results in the leakage, tampering, loss or destruction of the personal information of more than one million individuals or the sensitive personal information of more than 100,000 individuals.
For the above scenarios, the data handler will need to complete a compliance audit in accordance with the Measures’ requirements and submit an audit report to the data handler’s competent authority, with any requested corrections submitted within 15 business days to the authority.
Additionally, the Measures specify that data handlers may conduct compliance audits on a voluntary basis, either internally or through the use of a third-party auditor.
Specific Requirements for Certain Types of Data Handlers
Pursuant to the Measures, data handlers processing the personal information of more than one million individuals will need to designate a person in charge of the protection of personal information (referred to herein as the “Designated Data Protection Personnel”). Data handlers providing key online platform services with a significant number of users and a complex business model will need to establish an independent organization consisting mainly of external members to monitor compliance audits.
Requirements for Third-Party Auditors and Designated Data Protection Personnel
Third-party auditors will be required to be equipped with audit staff, premises, facilities and funds appropriate to the services provided, and to protect the confidentiality of data reviewed during compliance audits. Additionally, third-party auditors will be prohibited from using subcontractors.
The Measures will prohibit data handlers from using the same third-party auditor (or its affiliates) or the Designated Data Protection Personnel to conduct compliance audits on the same subject more than three times in a row.
Guidance on Compliance Audits
The Guidance will require data handlers to evaluate the following factors in compliance audits:
the legal basis for processing the personal information;
the relevant personal information processing rules;
whether the data handler has fulfilled its individual notification obligations;
the data handler’s joint processing activities;
the vendors processing personal information on the data handler’s behalf;
whether there has been a transfer of personal information due to a merger, reorganization, separation, dissolution, bankruptcy or other reason;
whether the data handler has shared personal information with other data handlers;
whether the data handler engages in automated decision-making activities;
whether the data handler publicly publishes personal information (including instances in which the data handler obtains individuals’ consent to do so);
whether the data handler has installed surveillance devices that may be used to identify individuals in public places;
whether the data handler processes sensitive personal information;
whether the data handler processes personal information of minors under 14 years old;
whether the data handler transfers personal information outside of China;
how the data handler complies with the right to erase personal information;
how the data handler protects the rights of individuals in its processing activities;
how the data handler responds to individuals’ data protection inquiries and explains its personal information processing activities;
the data handler’s internal management policies and operating procedures;
the technical security measures the data handler has implemented to protect personal information;
the data protection education and training programs provided by the data handler to its workforce;
the performance of the Designated Data Protection Personnel;
whether the data handler conducts personal information protection impact assessment where required;
the data handler’s incident response plan and its implementation of the plan; and
for data handlers providing key online platform service with a significant number of users and a complex business model, the data handler’s social responsibility report on personal information protection.
President Trump’s 4 March Tariffs Against Canada, Mexico, and China
Today, President Trump announced the implementation of new tariffs targeting imports from Canada, Mexico, and China, making good on his promise last month in the event measures were not taken by these countries to stem the tide of fentanyl and illegal migration into the United States.
Details of the Tariffs
The newly enacted tariffs are as follows:
CanadaA tariff of 25% will be imposed on all imports from Canada. This includes a broad range of goods, notably steel, aluminum, and various manufactured products, significantly impacting industries that rely on Canadian materials and components.
Mexico Similar to Canada, imports from Mexico will face a 25% tariff. This measure affects key sectors, including automotive parts, electronics, and agricultural products, posing challenges for businesses that have integrated supply chains spanning both countries.
ChinaAll imports from China will now be subject to a 20% tariff which will be in addition to the Section 301 and Section 232 tariffs. This figure reflects an increase of an additional 10% on top of the 10% duty that was already imposed on Chinese goods last month. This elevated rate applies to various goods, including electronics, machinery, and consumer products, signaling the administration’s intensified focus on addressing unfair trade practices and protecting American manufacturing.
Key Implications for Businesses
Supply Chain Disruptions: The tariffs may cause disruptions to existing supply chains. Companies should assess their current sourcing strategies to identify alternative suppliers and mitigate risks associated with higher costs and import delays.
Compliance and Regulatory Challenges: Importers must navigate new compliance requirements associated with the tariffs. Businesses should ensure they have the correct documentation for customs and be prepared for increased scrutiny regarding product classifications and valuations.
Potential for Retaliation: These tariff measures will likely lead to retaliatory actions from Canada, Mexico, and China, potentially impacting US exports to these markets. Companies should anticipate possible trade barriers that could disrupt their international operations.
Recommendations
Assess Impact on Cost Structures and Explore Supply Chain Alternatives: Consider diversifying your supplier base to include domestic sources or suppliers from other countries, reducing reliance on imports from Canada, Mexico, and China and minimizing exposure to tariffs.
Monitor Trade Developments: Stay informed about future regulatory changes and potential retaliatory measures from Canada, Mexico, and China that could further impact your business landscape and operations.
Conclusion
The implementation of tariffs against Canada, Mexico, and China represents the core tenants imbedded in the America First US Trade Policy with broad implications for businesses engaged in imports. Companies must quickly adapt to these changes to mitigate risks and seize potential opportunities.
Treasury May Be Shifting CTA Reporting Rule Away from Domestic and Toward Foreign Reporting Companies
On March 2, 2025, the United States Department of Treasury announced that it will not enforce fines or penalties based on the existing deadlines for reporting beneficial ownership information under the CTA beneficial ownership reporting rule.[1] This follows earlier guidance issued by FinCEN.[2]
Treasury further announced that it will be engaging in proposed rule-making to limit the CTA reporting rule to foreign reporting companies, noting that even after the new rules are in effect, it will not enforce any fines or penalties on any U.S. citizens, domestic reporting companies or their beneficial owners. No other details of the proposed rule-making or its timing were announced, including whether any changes might be proposed as to the definitions of domestic[3] or foreign[4] reporting companies under the reporting rule or any exemptions.
Treasury noted that this action is “in the interest of supporting hard-working American taxpayers and small businesses and ensuring that the rule is appropriately tailored to advance the public interest.”
[1] See Treasury Department Announces Suspension of Enforcement of Corporate Transparency Act Against U.S. Citizens and Domestic Reporting Companies | U.S. Department of the Treasury.
[2] On February 18, 2025, the Financial Crimes Enforcement Network of the Department of Treasury (FinCEN) issued a notice extending beneficial ownership reporting deadlines for most reporting companies to March 21, 2025. See FinCEN Notice, FIN-2025-CTA1, FinCEN Extends Beneficial Ownership Information Reporting Deadline by 30 Days; Announces Intention to Revise Reporting Rule (February 18, 2025) and an updated FinCEN Alert (February 19, 2025) Beneficial Ownership Information Reporting | FinCEN.gov. Subsequently, on February 27, 2025, FinCEN announced that it was suspending enforcement of the CTA reporting rule, including any fines or penalties, pending its further extension of reporting deadlines in an interim reporting rule to be issued not later than December 21, 2025. See FinCEN Not Issuing Fines or Penalties in Connection with Beneficial Ownership Information Reporting Deadlines | FinCEN.gov.
[3] A “domestic reporting company” is currently defined under the CTA and the reporting rule as any entity that is formed by filing a document with a secretary of state or similar office under the laws of a State or Indian tribe (including, for example, most LPs, LLPs and statutory, business and other trusts if the laws of a state or tribal jurisdiction require such filing to create the entity), subject to exemptions from the definition included in the CTA and the reporting rule. See 31 U.S.C. § 5336(a)(11)(A)(i) and 31 CFR 1010.380(c)1(i)).
[4] A “foreign reporting company” is currently defined under the CTA and the reporting rule as any entity that is formed under the laws of a foreign country and registered to do business in the United States by the filing of a document with a secretary of state or similar office under the laws of a State or Indian tribe subject to exemptions from the definition included in the CTA and the reporting rule. See 31 U.S.C. § 5336(a)(11)(A)(ii) and 31 CFR 1010.380(c)(1)(ii).