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Focus on Regulation

Student Privacy and Drone Policy: Vote for Hogan Lovells at SXSW 2016

Austin, Texas is renowned for its live music scene, clean air, college vibe … and of course its technology conferences. Two Hogan Lovells Lawyers—Bret Cohen and Lisa Ellman—have made the list of finalists for panels at the South by Southwest group of conferences this upcoming March, to talk about Student Privacy and Domestic Drone Policy.

Don’t let the audience miss out on these presentations by voting for them at the links below.

Practical Student Privacy
Vote here.

Over the past few years, much has been debated in policy circles about how we can best protect the privacy of student data. In the meanwhile, those on the front lines have had to handle daily questions about the safe and appropriate use technology in the classroom. Vote for Bret Cohen to host a conversation at SXSWedu 2016 with different members of the student data ecosystem – including educators, administrators, and EdTech – about how, practically, they navigate the thicket of federal and state laws, privacy pledges, and parental expectations on an everyday basis.

Participants will:

• Learn what policies districts and schools are adopting to make sure that they consider privacy before using new technology in the classroom.
• Understand the complexities EdTech vendors face to comply with laws as they deliver services on a nationwide basis.
• Participate in an exercise where panelists consider the possible use of technology in the classroom, from the perspective of schools and EdTech.

Game of Drones: Innovators and Policymakers Unite
Vote here.

We’re in the midst of drones fever. American companies can’t wait to use drones for everything from filmmaking to news gathering, package delivery to industrial inspections, wedding photography and more. For all their benefits, policymakers restrict drones in the public interest.

How can we enjoy the benefits of drones in a way that is safe, secure and protective of Americans’ privacy? Vote for Lisa Ellman, Obama Administration veteran and pioneering drones policy advisor, to talk at SXSW Interactive 2016 about how we can promote innovation while building the public’s trust. Lisa will detail what policymakers should be doing and challenge innovators to help move our government policymaking forward.

For a video of Lisa’s TEDx talk on drones, click here.

Western District Texas Court Grants Summary Judgment for PBPA Plaintiffs and Vacates Lesser Prairie Chicken Listing Decision

Prairie chickenIn a first-of-its-kind ruling and a significant victory for state wildlife agencies, landowners, ranchers, farmers, and the oil and gas industry in Texas, New Mexico, Oklahoma, Kansas, and Colorado, the U.S. District Court for the Western District of Texas, in Permian Basin Petroleum Association (PBPA) et al. v. Department of the Interior (DOI), et al., granted summary judgment in favor of PBPA and vacated the U.S. Fish and Wildlife Service (FWS) rule listing the lesser prairie chicken (LPC) as threatened under the Endangered Species Act (ESA).  In its September 1, 2015 opinion, the Court concluded that the decision to list the LPC was arbitrary and capricious under the Administrative Procedure Act (APA) and that the agency failed to properly apply its Policy for Evaluation of Conservation Efforts When Making Listing Decisions (PECE Policy) to conservation efforts already undertaken on millions of acres across five states to improve habitat for and diminish threats to the LPC.  Under the LPC Range-wide Conservation Plan, initially approved by FWS, more than 180 oil and gas, pipeline, electric transmission and wind energy companies have enrolled more than 14 million acres in conservation agreements to avoid, minimize, or mitigate impacts to the LPC from their operations. In the process, the industry participants in the Range-wide Plan have committed $45.9 Million in enrollment and impact fees to cover off-site mitigation actions for unavoidable impacts and conserve habitat.  Earlier this year, the Western Association of Fish and Wildlife Agencies, which oversees the conservation efforts under the Range-wide Plan, reported a 25 percent increase in the LPC’s population from 2014 to 2015, in part a result of industry’s conservation efforts.

The Western District of Texas decision is the first time a court has vacated an ESA listing decision on the grounds that FWS violated the APA by not properly evaluating conservation efforts as required by the PECE Policy (in this case the substantial efforts committed to under the Range-wide Plan).  Although the government had requested remand without vacatur, the Court vacated the LPC listing rule in its entirety. The Court’s decision in PBPA v. DOI impacts landowners and businesses in the five states containing LPC habitat: Texas, New Mexico, Oklahoma, Colorado and Kansas.  The decision also will impact four other district court cases (in the Northern District of Oklahoma and in the District Court of the District of Columbia) that challenge the LPC listing decision but which have not yet proceeded to briefing.  The FWS has 60 days to decide whether to appeal the decision to the Fifth Circuit.

The lead Plaintiff in the lawsuit is PBPA, the largest regional oil and natural gas association in the United States, with more than 1,000 member companies that produce oil and gas in the Permian Basin. The Permian Basin, which includes west Texas and eastern New Mexico, is the most prolific oil-producing region in the United States and produces approximately 20 percent of the oil produced annually in the U.S.  Joining PBPA as co-plaintiffs are Chaves, Eddy, Lea, and Roosevelt Counties in eastern New Mexico. The counties contain significant portions of LPC range and significant amounts oil and natural gas development, agriculture and farming.

Pending Proposals and the Purchase or Sale of a Government Contractor: What are the Bid Protest Risks?

Those involved with the purchase or sale of a government contractor should take note of a recent GAO protest decision overturning the award of a $210M contract because the agency failed to address the fact that the awardee’s proposal substantially relied upon the past performance, corporate experience, and resources of the awardee’s former parent company. As a result of the sale, the past performance, corporate experience, and resources of the former parent company arguably were no longer relevant or accessible, something the agency failed to consider. This decision underscores the need to carefully assess and take appropriate steps to minimize transaction-related risks relating to pending proposals.

On August 5, 2015, GAO overturned the Department of Homeland Security, U.S. Citizenship and Immigration Services’s (USCIS’s) award of a $210M field office support services contract to PAE Professional Services, Inc. (PAE). This decision is the second time that GAO has overturned USCIS’s decision to award the contract to PAE.

In a previous decision involving the same procurement, GAO ruled that USCIS had to more thoroughly consider allegations of fraud set forth in a civil complaint that the Department of Justice had brought against an entity that was then PAE’s parent company.  After GAO’s previous decision, PAE was acquired in a stock sale by a different company, which eliminated PAE’s affiliation with its former parent. USCIS then announced in April 2015 that PAE was a responsible contractor and that the agency had decided to proceed with contract performance based upon the prior evaluation results.

FCi Federal, Inc. (FCi) filed a new protest to challenge USCIS’s confirmation of the previous evaluation results. GAO ultimately agreed with FCi’s allegations that USCIS had unreasonably failed to reevaluate PAE’s proposal after its sale to a different entity. PAE’s proposal represented that its former parent company would be providing financial resources and back office support services to support PAE’s execution of the contract. Because PAE was no longer affiliated with the former parent company, GAO determined that PAE’s proposal was “outdated” because it no longer reflected how PAE intended to perform the contract.  In light of this conclusion, GAO ruled that USCIS’s failure to reevaluate PAE’s proposal was unreasonable.

GAO’s decision demonstrates that when the government knows that a pending proposal has been submitted by a company that is going to be bought or sold, the government must reasonably assess whether and how the purchase or sale impacts the evaluation of its proposal.

It may be possible for proposal teams to take proactive steps to potentially mitigate bid protest risk that can result from the contemplated purchase or sale of a government contractor. Proactive planning is important because contractors may not be given an opportunity after the common deadline for proposal submission to make proposal revisions to account for changes resulting from a sale. At a minimum, the proposal should not suggest reliance on the experience, resources, or past performance of an affiliate that no longer will be affiliated if the impending sale is consummated. Different factors in each procurement will impact decisions about whether to modify a proposal strategy, what details to provide the government about an anticipated transaction, and other potential steps to mitigate risk.

Antitrust in China’s pharma sector – Bengbu action following big-bang reform

On 26 August 2015, the National Development and Reform Commission (NDRC) made public its first antitrust enforcement decision in the pharmaceutical sector since launching the drug pricing reform earlier this year. Although the target of this enforcement action was a local government entity, pharmaceutical companies should expect continued antitrust intervention in parallel with the implementation of the pricing reform.

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FDA Announces Policy for Unique Nonproprietary Names for Biologics and Biosimilars

In a Federal Register notice, FDA announced its draft guidance, “Nonproprietary Naming of Biological Products,” in which the agency articulates the need “for biological products licensed under the Public Health Service Act (PHS Act) to bear a nonproprietary name that includes an FDA-designated suffix.” Described in an accompanying proposed rule, the Agency proposes that the proper name of all biologics includes a core name and a designated suffix. For originator products, the core name would be the name adopted by the United States Adopted Name (USAN) Council for the drug substance when available. Related, biosimilar or interchangeable products would include the core name of the relevant, previously licensed product and a designated, 4-letter suffix attached by a hyphen. Continue Reading

FCC Releases Waiver Order and Two Declaratory Rulings on TCPA Fax Rules

Today the Federal Communications Commission (“FCC”) released three Orders relating to the fax requirements under the Telephone Consumer Protection Act (the “TCPA”).

Under the TCPA, it is unlawful for a person to use a fax machine, computer, or other device to send an unsolicited advertisement to a telephone fax machine unless there is an established business relationship between the sender and recipient, the sender has obtained the recipient’s fax number through an acceptable method, and the sender provides certain opt-out notice language in the fax transmission.  Parties may also send faxes with the “prior express invitation or permission of the recipient,” subject to certain opt-out notice requirements.

In the three items released today, the FCC granted 117 retroactive waivers to the fax opt-out notice requirement, and issued Declaratory Rulings in response to a petition from Westfax, Inc. relating to efaxes, and from iHire, LLC relating to faxes sent in response to job postings.

FCC Grants Retroactive Waivers to Fax Opt-Out Notice Requirement Under the TCPA

The FCC today granted retroactive waivers of the opt-out requirement for faxes sent prior to April 30, 2015 to 117 petitioners due to previous uncertainty as to whether the FCC’s opt-out notice requirement applied to faxes sent with recipient consent.

The FCC previously found that a footnote in the order implementing the opt-out notice requirement caused confusion regarding the applicability of this requirement, and it granted retroactive waivers to petitioners who sent fax advertisements to recipients who provided prior express consent. The FCC explained that similarly situated parties could seek similar waivers. The initial waivers, as well as the waivers issued today do not extend to faxes sent after April 30, 2015, so even entities that received a waiver are required to be in compliance with the rule today.

The FCC explained that it will not conduct a factual analysis as to whether each petitioner in fact obtained consent – it will leave that a question for triers of fact in private litigation – and assumed for the purposes of the waivers that consent was obtained.

In this Order, the FCC also denied the Petition for Declaratory Ruling of Bijora, Inc., which sought clarification that text messages do not require opt-out notices pursuant to the fax opt-out notice requirement. The FCC said the plain language of the rule clearly applies to fax advertisements, and does not apply to text messages, and denied the petition.

FCC Clarifies that Efaxes are Subject to the TCPA

The FCC released a Declaratory Ruling in response to a petition from Westfax seeking clarification of several questions relating to facsimile messages sent as traditional fax messages and converted to e-mails, or “efaxes.” The FCC clarified that “efaxes” that are submitted via a conventional fax machine are subject to the TCPA, and consumers have the same protections from unwanted efaxes of this type as from unwanted conventional faxes.

The FCC clarified that the receipt of the fax message by a computer via e-mail meets the statutory requirements under the TCPA for a fax message, and is thus subject to the TCPA. Further, the FCC clarified that entities that convert faxes to e-mails are not the “recipients” of such faxes under the TCPA because they are not the intended audience of the fax.

The FCC noted that fax messages that begin as e-mails – where the fax is attached to an e-mail message – are not subject to the TCPA’s fax restrictions. The FCC also declined to determine at what point a fax broadcaster is “sufficiently involved in fax advertising to be liable for TCPA violations” or to establish a “safe harbor” opt-out notice language.

FCC Clarifies that Faxes Promoting Job Placement Services are Advertisements

The FCC released a Declaratory Ruling clarifying that faxes promoting a business’ job placement services are “advertisements” under the TCPA in response to a Petition for Declaratory Ruling from iHire, LLC. In response to job postings, iHire submits messages to employers with summary resumes, as well as information about iHire’s services, in response to job postings, and sought clarification that such fax messages are not advertisements under the TCPA.

In the Declaratory Ruling, the FCC emphasized that incidental advertisements in a communication (such as in a newsletter faxed to a recipient) or communications containing a de minimis amount of advertising information (i.e. a company logo on an account statement) do not convert an entire communication into an advertisement. In making the determination that a communication is an advertisement, the FCC will consider the amount of space devoted to advertising compared to the amount of space utilized for information, as well as the “primary purpose of the communication.”

In this case, the FCC stated that iHire’s faxes aimed to generate enough interest in job candidates to induce employers to visit iHire’s website and purchase access to full resumes and other iHire paid services. The FCC explained that because two thirds of the printed lines in the iHire faxes encouraged recipients to visit iHire’s website, and the primary purpose of the faxes was advertising, these faxes are advertisements under the TCPA.

SmallSats are Big in Logan, Utah

bannerEDITOR’S NOTE:  We are excited to present this entry in our new TMT2020 series, which reflects the key technology, media, and telecoms legal issues that are expected to impact today’s organizations and tomorrow’s marketplace.  It also provides an opportunity to highlight contributions by TMT associates across our global offices and practice areas. 

Fresh air, lush mountains and blue banners greeted an estimated 1,800 attendees to the 29th annual SmallSat conference in Logan, Utah this year.  The conference, which is organized every year by the American Institute of Aeronautics and Astronautics and Utah State University, is a forum for space enthusiasts to discuss all things “smallsat.”   Attendance at the event has grown considerably in the last few years, which is unsurprising.  Smallsats are slowly changing the way many in the industry and investment community view space and space missions by, in large part, offering a vastly lower cost alternative to conventional satellites and providing opportunities for space access previously only available to governments and large commercial entities.  Such changes are also introducing Internet-speed entrepreneurs and their investors to the slower moving, heavily regulated space industry.

ice creamThis year’s SmallSat conference attendees included:  faculty and students from academia; representatives from the U.S. federal government, such as the Air Force, the National Aeronautics and Space Administration (“NASA”), and the National Oceanic and Atmospheric Administration (“NOAA”); established satellite manufacturers, such as Lockheed Martin and Space Systems/Loral; commercial launch providers, such as Arianespace, ILS, Orbital ATK, and SpaceX; and entrepreneurs seeking to become a part of the burgeoning smallsat industry.   Other attendees at the conference included two attorneys from Hogan Lovells.  Although this is a first for the firm, Hogan Lovells is no stranger to the satellite business.  It has been advising the commercial satellite industry since the 1970’s and, today, represents the full range of satellite businesses from established global satellite companies to leading innovators in the smallsat industry.  Hogan Lovells has helped clients navigate through complex regulations and procedures imposed by various government agencies, including the Department of Commerce, Federal Aviation Administration, Federal Communications Commission, and NOAA, and has assisted clients in negotiating complex commercial and financing transactions.

Cubesat Basics

For those unfamiliar with the term “smallsat” and “NewSpace” more generally,[1] smallsats are small satellites, also known as picosatellites, nanosatellites, or cubesats.  A basic, standardized cubesat unit, a 1U cubesat, is comprised of a 10 x 10 x 10 cm cube with a mass of approximately 1.33 kg.  By contrast, a conventional geostationary orbit satellite can be as large as a school bus and have a mass of more than 1000 kg.  A cubesat is scalable along an axis in 1U increments, and common configurations include 3U cubesats (30 x 10 x 10 cm) and 6U cubesats (10 x 20 x 30 cm).

The use of standardized formats and commercial-off-the shelf equipment as components of a cubesat greatly reduces the design and construction costs of a cubesat relative to a conventional satellite – tens of thousands of dollars (U.S.) vs. potentially hundreds of millions of dollars.  Moreover, the size and mass of cubesats allows them to “piggyback” on launch vehicles as secondary payloads, greatly reducing the relative costs of launching cubesat systems into space – tens of thousands of dollars vs. tens of millions.  Under certain NASA programs, academic experimental programs may be eligible to catch a free ride into space!

satnewsSpace Entrepreneurs

One industry attendee at this year’s conference was A.C. Charania, the director of strategy and business development at Virgin Galactic.  Virgin Galactic recently announced the signing of a contract with OneWeb Ltd. to provide 39 launches for OneWeb’s 600+ smallsat constellation, which will provide broadband connectivity globally.  A.C., a satellite industry veteran, has been attending the SmallSat conference off and on for nearly a decade, and noted the dramatic change in attendance by entrepreneurs in recent years.  According to A.C., the atmosphere changed notably a few years ago – there was something in the air and “a certain swagger” in the crowd.  That was around the time that Skybox Imaging applied for and received its private remote sensing (i.e. imaging) license from NOAA – the first step in a complex legal, regulatory process to demonstrate that the company had a viable business case.  A.C. compares the current atmosphere and energy of the smallsat industry to that of Silicon Valley during the development of personal computers.  When asked what can be expected in the future, A.C. suggested that smallsats will grow bigger and conventional satellites will become smaller, and somewhere in the middle could be an industry-defining, new form factor.

Mission to Mars

Although many of the conference attendees are now commercial entities, a significant portion of the attendees are still from government and academia.  For example, Andrew Klesh, chief engineer at the Jet Propulsion Laboratory (“JPL”), a NASA facility located at the California Institute of Technology, presented JPL’s work regarding the interplanetary use of cubesats.  Andrew is part of the JPL team that has helped design and construct twin communications-relay cubesats, Mars Cube One or MarCO.  MarCO, travelling under their own propulsion systems, will accompany NASA’s Mars stationary lander in 2016 and relay information back to earth in real time.  A successful MarCO mission could have a profound impact on interplanetary missions, much like the development of cubesat technology for the Earth-based satellite industry.  Namely, verifying the viability of cubesat technology for deep-space travel could lead to shorter development timelines for interplanetary satellites and a reduction in launch costs for interplanetary missions.

rock-itThe Future of Smallsats

Only time will tell the full scope of the impact of smallsat development on the space industry, but the future looks promising.

We look forward to attending next year’s conference and hope to see you there (August 6-11, 2016).  One bit of advice for those attending for the first time, book your hotel room early!  Also, don’t forget to use #SmallSat2016!

Hogan Lovells

Hogan Lovells is a full service, international law firm with extensive experience in the satellite industry.  See, e.g., Hosted Satellite Payload Procurement: A Brief “How-To” Guide and Satellite Systems Procurement: A Brief “How-To” Guide.  Because of the depth and diversity of our experience, lawyers in this practice group bring to bear a deep understanding of the different legal and business issues that entities face in this industry, enabling us to identify and solve problems in creative and cost-effective ways.  If you need assistance in any such matters, please feel free to contact us.


[1] Hogan Lovells co-sponsored the Space Frontier Foundation’s NewSpace 2015 event in Silicon Valley earlier this summer.  Partner John Booher, who assists start-ups with private equity and capital transactions, moderated a panel at the conference.


Notification of draft Commission Delegated Regulation on the Implementation of Obligatory Safety Features for Medicinal Products

On 12 August 2015, the European Commission notified the World Trade Organisation (“WTO”) of its draft Delegated Regulation supplementing Directive 2001/83/EC of the European Parliament and of the Council by laying down detailed rules for the safety features appearing on the outer packaging of medicinal products for human use (hereafter “draft Commission Delegated Regulation”).

Directive 2011/62/EU of the European Parliament and of the Council amending Directive 2001/83/EC, as regards the prevention of the entry into the legal supply chain of falsified medicinal products introduced certain obligatory safety features on the packaging of medicinal products in order to determine their authenticity and impede the distribution of falsified medicinal products. In accordance with Article 54a(2) of the Community Code relating to medicinal products for human use, the European Commission is obliged to adopt delegated acts which are intended to establish rules corresponding to safety features of medicinal products. The current draft Delegated Commission Regulation reflects this requirement.

If the draft Delegated Commission Regulation is adopted in its current form, it would lead to the establishment of detailed rules in relation to the implementation of obligatory safety features for medicinal products that are subject to a marketing authorisation in the European Union (“EU”). Some of these rules are discussed below. Continue Reading

Merger, They Wrote: FTC Issues Merger Investigation Survival Guide

The Federal Trade Commission’s Bureau of Competition (FTC or Bureau) recently released a revised set of best practices for merger investigations. Despite the many similarities with previous guidance from the FTC and the Department of Justice (DOJ), these new best practices reemphasize several strategic and effective ways for parties to avoid a request for additional information (Second Request) or substantially minimize its burden

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