The Week Ahead in the European Parliament

By Sebastian Vos on Posted in EU Law and Regulatory

Summary

Next week, the European Parliament’s agenda includes debates on the Amazon forest fires, plant patents, and EU aid for the 2018 floods.  MEPs will also discuss political upheavals worldwide, with discussions scheduled on Brexit, foreign electoral interference, and the latest developments in Hong Kong.  Tying it all together is the expected finalization of Christine Lagarde’s appointment as ECB President.

On Monday, MEPs will question the European Commission about plant patenting.  Concerns raised by vocal activists, such as Greenpeace, may influence the tone of the debate.  MEPs are likely to call for the EU to ensure that products derived from essentially biological processes cannot be patented.  This debate precedes the October 1st deadline for the submission of statements to the EPO’s final appellate instance concerning the patentability of naturally obtained plants.

After Boris Johnson described himself as “cautiously optimistic” at the prospects of getting a deal, MEPs will get the chance to hear Michel Barnier’s side of the story on Wednesday.  This will be followed by a vote on a resolution which might give an indication of the likelihood of a no-deal Brexit.  On Wednesday and Thursday, MEPs will debate foreign electoral interference in Europe.  They will vote on a resolution calling disinformation a destabilizing threat to European cohesion and democratic processes.

This is also an interesting week for the EU’s monetary affairs, as the 2020 Budget and Lagarde’s recommendation will both be subject to plenary session votes.

Meetings and Agenda

Monday, September 16, 2019

Plenary Session

17:00 – 19:00

Debates

  • Resumption of session and order of business
  • One-minute speeches (Rule 172)

Committee on Economic and Monetary Affairs

19:00 – 19:30

  • Election of the Chair

Committee on Civil Liberties, Justice and Home Affairs

19:00 – 20:45

 Vote

  • ECR objection to the coordinators’ recommendation regarding the possibility of drafting a legislative own-initiative report on the “Revision of the European Arrest Warrant”. (19.00-19.10)

Debates

  • Exchange of views with Dimitris AVRAMOPOULOS, Commissioner for Migration, Home Affairs and Citizenship (19.10-20.45)

Tuesday, September 17, 2019

Plenary Session

09:00 – 11:50   

Debate

  • (possibly) Votes on requests for urgent procedure (Rule 163)

12:00 – 14:00

Votes followed by explanations of votes

  • Appointment of the Vice-Chair of the Supervisory Board of the European Central Bank.
    • Report: Roberto Gualtieri
  • Launch of automated data exchange with regard to vehicle registration data in Ireland.
    • Report: Juan Fernando López Aguilar
  • Texts on which debate is closed

15:00 – 19:00

  • Debates on foreign affairs issues in the presence of the Vice-President of the Commission/High Representative of the Union for Foreign Affairs and Security Policy (to be defined)

Wednesday, September 18, 2019

Plenary Session

09:00 – 14:00

Votes followed by explanations of votes

  • Draft amending budget No 1/2019: surplus from 2018.
    • Report: John Howarth
  • Draft amending budget No 2/2019: reinforcement of key programmes for EU competitiveness: Horizon 2020 and Erasmus+
    • Report: John Howarth
  • Mobilisation of the European Union Solidarity Fund to provide assistance to Romania, Italy and Austria.
    • Report: Siegfried Mureşan
  • Draft amending budget No 3/2019: proposal to mobilise the European Union Solidarity Fund to provide assistance to Romania, Italy and Austria.
    • Report: John Howarth
  • Mobilisation of the European Globalisation Adjustment Fund – EGF/2019/000 TA 2019 – Technical assistance at the initiative of the Commission.
    • Report: Bogdan Rzońca

15:00 – 18:00

  • Topical debate (Rule 162)
  • Presentation by the Council of its position on the draft general budget – 2020 financial year

Thursday, September 18, 2019

Plenary Session

09:00 – 11:50   

Debates

  • Debates on cases of breaches of human rights, democracy and the rule of law (Rule 144)

12:00 – 14:00

Votes followed by explanations of votes

  • Motions for resolutions concerning debates on cases of breaches of human rights, democracy and the rule of law (Rule 144)
  • Texts on which debate is closed

15:00 – 16:00

  • Major interpellations (Rule 139)

Committee on Transport and Tourism

9:00 – 9:30

Vote

  • Vote on use of Rule 61 in relation to the three Mobility Package I files

Committee on Legal Affairs

9:00 – 11:00

  • Examination of potential or actual conflict of interests of the Commissioners-designate

The Inevitability Challenge

By Eric Robinson on Posted in Asia, International Strategy

The Government of the Islamic Republic of Iran has, on account of its dismal human rights record and decades of aggression towards its neighbors, earned the derision it often receives from American and allied and partner countries’ officials. This public condemnation, however, entered a somewhat new phase on August 30 when President Trump broadcast an image of the smoking wreckage of a failed launch related to Iran’s space program along with a taunt of sorts directed at Iran’s leadership.

The enmity expressed and means of broadcasting it to the world is fairly standard for this president, but the image told several larger, and much more important, stories than any spat between Washington and Tehran. The image the president employed was allegedly taken from an overhead satellite, a program that produces classified material on issues of global importance. The president has absolute authority to declassify material as he did in this case, but in communicating to the Iranians and the world at large he revealed the photographic capacity of the satellite in question, enough information to determine the location of the satellite in orbit, as well as the fact that the Iranian space program’s launch was of sufficient interest to the US that a “national technical means” had been assigned to observe the test. While Iran was clearly the target of the message, Russia, North Korea, China, and other countries certainly took note of the incident for their own purposes.

While the long-term consequences to America’s constellation of reconnaissance satellites is uncertain, the president’s release of the image brought a difficult policy challenge into focus: non-proliferation. At the heart of Iran-US tension is the Iranian government’s interest in developing a nuclear capacity that could be weaponized and a strategic missile arm that could be employed to carry these nuclear weapons. The incident President Trump highlighted may have been cloaked under the guise of scientific development, but launching satellites requires similar ballistics to launching warheads, so that the United States was watching cannot be a surprise to any observer.

In monitoring Iranian activity, and in trying to disrupt or degrade their capacity to build missiles or nuclear weapons, the US and its allies face a considerable structural challenge: human ingenuity. Essentially, the US is trying to prevent a country from developing technology first fielded in the 1940s and perfected by the mid-1960s. Therefore, no amount of sanction, covert action, diplomatic isolation, or strategic communication can prevent Iran from eventually fielding these technologies if developing these technologies is in their strategic interest. Non-proliferation, at its heart, is faced with an inevitability challenge.

Take the Democratic People’s Republic of North Korea (“DPRK”), for example. A society built around slave labor and a degree of totalitarianism witnessed in no other country on Earth, with an economy marginally larger than that of the state of Vermont, has produced a nuclear program and an equivalent series of delivery systems that threaten not only the Republic of Korea, Japan, and other regional states, but the US itself. Decades of sanctions, covert action, diplomatic isolation, and strategic communication did not prevent the DPRK from developing these capabilities because the DPRK knew having these capabilities was in its strategic interest. By way of comparison, Iran is hardly as isolated and while its government is autocratic, it cannot be fairly compared to the DPRK. With an economy fourteen times larger than that of the DPRK, and also having a strategic interest in developing advanced weapons, Iran stands as a useful demonstration of non-proliferation’s inevitability challenge.

While this is a simplified analysis, the United States faces a significant obstacle in trying to prevent states like Iran from developing nuclear or missile capabilities. The DPRK has offered no indication that it plans to give up its weapons or even stop the development of new systems, so that is hardly a model for the US and its allies to employ. The US has also abandoned the framework of the Joint Comprehensive Plan of Action, which promised to at least slow Iran’s development of nuclear capacity, so the Trump Administration is unlikely to embrace multilateral mechanisms to push against the inevitability challenge Iran poses, even if alternative mechanisms were available.

The inevitability challenge does not leave the US without options, however. Focusing on the means of weapons delivery, or the weapons themselves, can theoretically be effective, but this analysis shows the limitations of such an approach. It must be said that concepts from the Cold War like nuclear deterrence obviously exist, but this does not exhaust the options the US has available, either. At the end of 2019, the world has at least eight nuclear states, but this number could have – at various junctures – been much higher. In certain cases, the breakup of the Soviet Union created additional de facto nuclear states, but this was a temporary aberration (perhaps to Kyiv’s detriment). Next, Japan and Germany have all the technical means required to deploy these weapons, they simply need not have them, largely due to their alliances with the US. In other cases, however, like that of South Africa and Sweden, states decided they no longer had a strategic interest in developing a nuclear deterrent (Sweden’s case) or that their existing weapons no longer served a purpose (South Africa had a limited arsenal prior to the end of apartheid). Simply stated, the strategic calculus that made these weapons essential to these states was no longer valid, so the weapons programs ended.

Therein lies the opportunity to avoid the inevitability challenge. With human ingenuity evenly distributed, and even desperately poor countries showing they can overcome technical obstacles (again, obstacles successfully overcome 70 years ago), a focus on weapons and delivery systems alone cannot hope to forestall proliferation. However, nations can change their leaders, their strategic goals, their alliances and partnerships, and re-consider their place in the world.

While it would be excessively naïve to suggest Tehran is ready simply to walk away from the development of advanced weapons technologies, it would also be a folly to assess that Tehran (or any other state for that matter) considers these weapons to be an absolute, eternal necessity. A deal that fundamentally shifts the strategic calculus of Tehran, especially considering the state of leadership in Washington and Jerusalem, is clearly not likely, but it is perhaps more likely than collapsing Iran’s capacity to develop weapons via sanctions, covert action, or diplomatic pressure. It is conceivable that a US president could shift assumptions in the Middle East in a manner that leads Tehran to re-consider its strategic approach, rather than entrench its existing assumptions. In doing so, a deal with Tehran and other regional partners could moot the inevitability challenge of non-proliferation and enable the intelligence community to orient its constellation of satellites to other, equally dire, global challenges.

Navy Modifies Acquisition Supplement to Tighten Cybersecurity Requirements and Implement the Geurts Memorandum

By Susan B. Cassidy, Ashden Fein, Moriah Daugherty and Ian Brekke on Posted in Cybersecurity, Defense Issues

Almost a year after Assistant Secretary of the Navy James Geurts issued his September 28, 2018 memorandum (Geurts Memo) imposing enhanced security controls on “critical” Navy programs, the Navy has issued an update to the Navy Marine Corps Acquisition Regulations Supplement (NMCARS) to implement those changes more formally across the Navy.  Pursuant to this update, a new Annex 16 in the NMCARS provides Statement of Work (SOW) language that must be added into Navy solicitations and contracts where the Navy has determined “the risk to a critical program and/or technology warrants its inclusion.”  In addition to the technical requirements reflected in the Geurts Memo, the Navy has added Subpart 5204.73 to the NMCARS that, among other things, instructs Contracting Officers (COs) to seek equitable reductions or consider reducing or suspending progress payments for contractor non-compliance with the Annex 16 and DFARS 252.204-7012 (DFARS clause) requirements.

SUBPART 5204.73

Equitable Price Reductions/Suspension and Reduction of Progress Payments.  The Navy added Subpart 5204.73 “Safeguarding Covered Defense Information and Cyber Incident Reporting” to the NMCARS.  This Subpart provides direction to COs in three areas.  First, it provides that Annex 16 must be included in the SOWs of relevant solicitations, contracts and task or delivery orders.  Second, the Subpart directs COs to consider the DFARS clause, Annex 16 and the Geurts Memo as material requirements.[1]  Finally, if COs accept supplies or services with “critical or major non-conformances (e.g., failure to comply with material requirement)” they are directed to impose an equitable price reduction.  The Subpart identifies a “reasonable amount” for this reduction as 5% of the total contract value.  That amount can be increased if there is an increased risk from the non-conformance.  If the CO decides to require correction of nonconforming services or supplies rather than acceptance, the CO is directed to withhold/reduce or suspend progress payments if correction is not made in a timely manner.

This revision to the NMCARS represents a powerful enforcement mechanism for the Navy.  Until now, DOD has stated that the failure to comply with the DFARS clause requirements would be treated as a contract performance issue.  Although that basic concept continues, the Subpart explicitly defines the DFARS clause, Annex 16 and the Geurts Memo as “material requirements” of the contract.  A failure to comply with a material requirement would make contractors potentially liable for significant equitable reductions or for a suspension or reduction of progress payments.  Read literally, a contractor that reports a cyber incident 76 hours (and not 72 hours) after discovery may be violating a material requirement of the contract. Contractors may derive some comfort from the NMCARS’ reliance on FAR 32.503-6, “Suspension or reduction of payments,” which at least requires COs to “act fairly and reasonably” and “base decisions on substantial evidence.”  However, the nonconforming supplies or services provision  in FAR 46.407 does not impose a similar fairness requirement on COs.

ANNEX 16

The Navy’s Annex 16 covers five areas: (1) System Security Plans (SSPs) and Plans of Action and Milestones (POA&Ms) Reviews; (2) Compliance with NIST Special Publication (SP) 800-171; (3) Cyber Incident Response; (4) Naval Criminal Investigative Service (NCIS) Outreach; and (5) NCIS/Industry Monitoring.  The requirements of Annex 16 are similar to various requirements that have been included in various Navy solicitations over the past year.  As described below, although the Annex provides more detail than the Geurts Memo, significant questions remain about how each of these requirements will be interpreted by the Navy going forward. Continue Reading

DoD Releases Public Draft of Cybersecurity Maturity Model Certification and Seeks Industry Input

By Susan B. Cassidy, Samantha Clark, Ryan Burnette and Ian Brekke on Posted in Cybersecurity, Defense Issues

On September 4, the Office of the Assistant Secretary of Defense for Acquisition released Version 0.4 of its draft Cybersecurity Maturity Model Certification (CMMC) for public comment.  The CMMC was created in response to growing concerns by Congress and within DoD over the increased presence of cyber threats and intrusions aimed at the Defense Industrial Base (DIB) and its supply chains.  In its overview briefing for the new model, DoD describes the draft CMMC framework as a “unified cybersecurity standard” for DoD acquisitions that is intended to build upon existing regulations, policy, and memoranda by adding a verification component to cybersecurity protections for safeguarding Controlled Unclassified Information (CUI) within the DIB.  As discussed in a prior post, the model describes the requirements that contractors must meet to qualify for certain maturity certifications, ranging from Level 1 (“Basic Cyber Hygiene” practices and “Performed” processes) through Level 5 (“Advanced / Progressive” practices and “Optimized” processes), with such certification determinations to generally be made by third party auditors.

The CMMC establishes a new framework for defense contractors to become certified as cybersecurity compliant.  DoD has stated that it intends to release Version 1.0 of the CMMC framework in January 2020 and will begin using that version in new DoD solicitations starting in Fall 2020.  Notwithstanding the pendency of these deadlines, a large number of questions remain outstanding.  DoD is seeking feedback on the current version of the model by September 25, 2019.

Overview of the Current CMMC Framework Draft

At its core, the current version of the CMMC framework consists of a matrix, composed of “Domains,” “Capabilities,” and “Practices and Processes.”  Domains are comprised of Capabilities, and Capabilities are comprised of Practices and Processes.  The model contains 18 different Domains of “key sets of capabilities for cybersecurity,” 14 of which use the same terminology as the security requirement families in NIST Special Publication (SP) 800-171.  The model adds Asset Management, Cybersecurity Governance, Recovery, and Situational Awareness to the NIST SP 800-171 security requirement families.  The 18 Domains are:

  • Access Control
  • Asset Management*
  • Awareness and Training
  • Audit and Accountability
  • Configuration Management
  • Cybersecurity Governance*
  • Identification and Authentication
  • Incident Response
  • Maintenance
  • Media Protection
  • Personnel Security
  • Physical Protection
  • Recovery*
  • Risk Assessment
  • Security Assessment
  • Situational Awareness*
  • System and Communications Protection
  • System and Information Integrity

* – Domain is not one of the 14 NIST SP 800-171 security requirement families.

Each Domain lists certain Capabilities, which are “achievements to ensure cybersecurity within each domain.”  In total, to achieve the highest level of certification — Level 5 — contractors must comply with more than 80 different individual Capabilities, such as the ability to “detect and report events” and the ability to “implement threat monitoring based on defined requirements.”

Capabilities are comprised of much more detailed “Practices” and “Processes” that contractors must adhere to.  Practices are similar to security controls, and DoD has described them as “activities required by level to achieve a capability.”  Processes, by contrast, are intended to detail the maturity of the institutionalization of the practices.

Although the NIST SP 800-171 controls are referenced in the model (and “coverage” of all NIST SP 800-171 rev 1 security controls is a requisite for meeting Level 3 certification), many of the practices have been informed by other sources, such as ISO 27001:2013, AIA NAS 9933, and the CERT Resilience Management Model, in addition to best practices gathered from DIB members.  Many of requirements, particularly for Level 5 certification, would be new for contractors, and cite to DIB best practices as a source.  Noticeably absent are citations to NIST SP 800-171B, which NIST published in draft form in June 2019 with enhanced security requirements designed to protect designated “high value assets” or “critical programs” that contain CUI of interest to advanced persistent threats.  Accordingly, there remain questions about how these controls should be interpreted and whether additional guidance for implementation will accompany future versions of the model.

Unlike NIST SP 800-171, which is implemented through a regulation — i.e., DFARS clause 252.204-7012 — DoD plans to implement the requirements of the model on a purely contractual basis.  The required CMMC level applicable to a procurement will be listed in the solicitation in sections L and M and will be a “go/no-go decision.”

DoD has stated that the model is still being refined, that practices within the model have not yet been cross-referenced across Domains, and that it anticipates a reduction in size of the model as it is further developed.  DoD indicated in the overview briefing accompanying the model that it intends to use independent third party organizations to conduct audits and certify contractors.  DoD has released neither the methodology to handle maturity level trade-offs, nor the assessment guidance for these third-party certifiers.  Nonetheless, as stated above, DoD plans to have a final version of the CMMC framework released in January 2020, included in RFIs starting in June 2020, and included in RFPs starting in Fall 2020.

Open Questions and Issues for Contractors

The draft CMMC framework provides significant information about the specific requirements that DoD may impose on contractors seeking certain certification thresholds, but leaves open many important questions for contractors.

  • Implementation Deadlines. The CMMC introduces a significant number of new controls and requirements.  Even the most sophisticated of contractors will likely find compliance difficult and the continued maturation of the model will make compliance with DoD’s ambitious deadlines a challenge across the DIB.
  • Determination of Appropriate CMMC Level for Contracts. The guidance offers no insight into how DoD will determine the CMMC certification level required for each contract solicitation or whether it intends to standardize a process for making such determinations across the Departments or even within requiring activities.  Existing FAQs on DoD’s CMMC website only state that “[t]he government will determine the appropriate tier (i.e. not everything requires the highest level) for the contracts they administer.”
  • Allowable Costs. DoD has consistently said that the costs of compliance with the CMMC would be allowable.  Presumably these costs would be recovered in contractors’ overhead rates.  However, to the extent that commercial item contractors — including many small business — contract with the government on a price basis, the costs of implementation would not be separately reimbursable by the government.
  • Meeting a Certification Level. The CMMC framework does not provide guidance on  how each of the Capabilities within the various Domains are to be weighed against one another, and similarly, how compliance with each of the respective Practices within Capabilities are to be weighed against one another.  It is unclear, for example, whether compliance with each Practice or Capability will be given equal weight, whether DoD will assign some relative level of importance to each Practice or Capability, or whether this will be largely left to the discretion of the auditor.  Although DoD has stated that “[a] methodology to handle maturity level trade-offs is planned” and that “[d]etailed assessment guidance is still under development,” it is not apparent whether the forthcoming guidance will address any of these points.  Nor is it clear the extent to which prior guidance on Reviewing System Security Plans and the NIST SP 800-171 Security Requirements Not Yet Implemented (i.e., Impact Guidance, which we previously discussed here) may apply to the model.
  • Audit Determinations. It is not clear what recourse, if any, contractors might have to challenge a CMMC certification determination by an auditor.  Although DoD has stated that “[s]ome of the higher level assessments may be performed by organic DoD assessors within the Services, the Defense Contract Management Agency (DCMA) or the Defense Counterintelligence and Security Agency (DCSA),” for lower-level assessments, auditors appear to be vested with a great deal of discretion.  For example, DoD recognized “the challenges of being 100% compliant with some practices,” and suggested that an “[a]ssessment of process institutionalization helps to mitigate this concern.”  However, it is not clear how auditors are expected to balance overall compliance with Practices against efforts that contractors have taken towards process institutionalization (e., Procedures).
  • Subcontractor Compliance Requirements. DoD has not yet issued any guidance on the certification level required for subcontractors, including whether the prime contractor is responsible for making this determination or if all subcontractors must meet the level assigned to a particular contract regardless of the data that flows to those subcontractors.
  • Implementation by Policy vs. Regulation. Ordinarily, we would expect these types of requirements for DoD contracts to be addressed through the regulatory process.  Making the change through policy allows DoD to implement the requirements more quickly, but does leave open the possibility of divergence among the Departments such as what the DIB has seen over the past year with the unique cybersecurity requirements being issued by the Navy and other Departments.
  • Protest Considerations. It is not clear whether contractors will have any ability to appeal or successfully protest the CMMC level at which DoD has designated a contract, and if so, whether this will be the only mechanism available to contractors to ensure that agencies give second thought to a particular CMMC level.  For example, in the pre-award context, prospective offerors may consider protesting the level assigned to a particular procurement as overly restrictive of competition.  Although deference is usually provided to agencies in the area of national security, the viability and success of this and other protest grounds remains to be seen.

As stated above, contractors have until September 25, 2019 to comment on the current version of the model.  Given the number of issues outstanding, only some of which are discussed here, interested contractors should offer their comments as early as possible in the process.  There is a comment matrix available on the CMMC website, along with instructions for submitting comments.

The Week Ahead in the European Parliament –  September 06, 2019

By Sebastian Vos on Posted in EU Law and Regulatory

Summary

Next week will be a short week in the European Parliament.  Members of the European Parliament (“MEPs”) will gather in Brussels for Parliamentary committee meetings and political group meetings.

On Tuesday, the President-elect of the European Commission, Ursula von der Leyen, will present her new College of Commissioners and MEPs are expected to react.  The Parliament must approve the appointments before the new Commission takes office on November 1st.  Over the last few weeks, the Member States have announced their nominees for Commissioners, but the hierarchal structure and distribution of portfolios within the College remains unknown.

On Thursday, EU chief negotiator Michel Barnier will discuss the state of play of Brexit with the Conference of the President – i.e. the President of the European Parliament, David Sassoli, and leaders of the political groups.  On September 5, Barnier has already warned the European capitals that the talks with the U.K. are in a state of “paralysis”, as Prime Minister Boris Johnson is seeking new elections.  He also claimed that the Johnson government has not provided any alternatives to the infamous backstop that would ensure the seamless border on the island of Ireland in case a future free trade agreement is not concluded during the transition period.

Throughout the week, MEPs will be preparing and deliberating in political group meetings on the important plenary session that will take place the following week.  During this plenary, MEPs will vote on the position of the Council of the EU on the proposal of the EU 2020 budget.  They will also vote on whether to recommend Christine Lagarde as new President of the European Central Bank (“ECB”).  Last week, the Parliament’s Committee on Economic and Monetary Affairs (“ECON”) already recommended her nomination.

 Meetings and Agenda

Monday, September 9, 2019

Subcommittee on Human Rights

15:00 – 17:45

Debates

  • Discussion with Eamon Gilmore, EU Special Representative for Human Rights
  • Discussion with Lotte Knudsen, Managing Director Global – Human Rights, Global and Multilateral Issues, EEAS

Votes

  • General budget of the European Union for the financial year 2020

Subcommittee on Security and Defense

15.00 – 18.30

Debates

  • Discussion with Pedro Serrano, Deputy Secretary-General, European External Action Service (EEAS) and Maj.-Gen. Giovanni Manione, Deputy Director-General, EU Military Staff (EUMS)
  • Discussion with Rory Keane, Head of the United Nations Liaison Office for Peace and Security (UNLOPS)
  • Discussion with Antonio Missiroli, Assistant Secretary General for Emerging Security Challenges at NATO

Thursday, September 12, 2019

Committee on Budgetary Control

09.00 – 12.30

Debates

  • T.B.A.

Committee on Civil Liberties, Justice and Home Affairs

09.00 – 18.30

Debates

T.B.A.

Section 889 Update: First Wave of Acquisition Prohibitions Take Effect

By Jeff Bozman, Samantha Clark and Susan B. Cassidy on Posted in Defense Issues

The FAR Council released an Interim Rule in August implementing part of Section 889 of the John S. McCain National Defense Authorization Act for Fiscal Year 2019.  In this briefing, we highlight points where the Interim Rule provides clarity; definitional issues that remain unresolved; and new procedural requirements that government contractors should track.

The Interim Rule covers the portion of Section 889, subsection (a)(1)(A), that prohibits the federal government from acquiring certain telecommunications equipment/services from Huawei, ZTE, and other Chinese companies.  Specifically: “The head of an executive agency may not … procure or obtain or extend or renew a contract to procure or obtain any equipment, system, or service that uses covered telecommunications equipment or services as a substantial or essential component of any system, or as critical technology as part of any system.”

Section (a)(1)(A) took effect on August 13, 2019, although a 60-day window remains open for stakeholders to submit comments to be considered in the development of a final rule.  Comments on the (a)(1)(A) Interim Rule are due by October 15, 2019.

The second part of Section 889 implementation, sections (a)(1)(B) and (b)(1), go into effect on August 13, 2020. Regulations for those sections remain pending within the government, but the definitions and waiver process established by (a)(1)(A) will be instructive for those regulations as well.

Concurrently, all of Section 889 is subject to a legal challenge in U.S. District Court for the Eastern District of Texas.  Huawei has sued to invalidate the entire provision, with the most prominent argument that Section 889 is an unconstitutional Bill of Attainder.  The case is in a relatively early stage, with another round of briefing due on September 10 and a hearing scheduled for September 19, 2019.

I.                Clarifications 

As expected, the rule adopts statutory text to define “covered telecommunications equipment or services,” with no changes.  It does, however, import an expansive definition of “critical technology,” borrowed from the Foreign Investment Risk Review Modernization Act (“FIRRMA”).  The Interim Rule concedes that the definition is overbroad – it includes “select agents and toxins” that are unlikely to apply to telecommunications – but used it in the interest of government-wide consistency as both the changes to the foreign investment review process contained in FIRRMA and Section 889 are being implemented simultaneously.  The law applies – as expected – at all dollar values (i.e., below the Simplified Acquisition Threshold) and to purchases of commercial and commercially available off-the-shelf items.

II.             Open Questions

“Substantial or essential component” is defined, but broadly and only at a high level: “any component necessary for the proper function or performance of a piece of equipment, system, or service.”  Each agency will have to determine which components meet that definition for purposes of compliance.  This is an area where seeking additional clarification through the comment period could be important.

“Critical infrastructure” is not defined at all, even though the definition of “covered telecommunications equipment” includes equipment produced by Hytera, Hikvision, or Dahua used for “physical security surveillance of critical infrastructure.”  Based on the approach to defining “critical technology,” however, we expect that the government would likely borrow the definition of “critical infrastructure” from FIRRMA: “systems and assets, whether physical or virtual, so vital to the United States that the incapacity or destruction of such systems or assets would have a debilitating impact on national security.”

III.           Important New Requirements

The Interim Rule describes two sets of compliance obligations that deserve close attention from current and prospective government contractors.

A.              “Representations”

The Interim Rule imposes a two-step certification process that presents serious new risks for government contractors.

  1. First, in connection with work after August 13, and later as part of the System for Award Management profile, contractors will be required to represent whether they sell material or services that include covered telecommunications equipment or services.
  1. Second, if they respond that they do, then they must make separate, detailed, offer-by-offer disclosures in connection with bids for contracts and for task/delivery orders.

This system of certifications meaningfully expands the scope of risk associated with due diligence in acquisitions, and broadens potential exposure to the False Claims Act and other anti-fraud statutes.

The representations could also have a potential upside in terms of justifying an exclusion or waiver.  The preamble explains that the information provided in the “representation will assist the Government in appropriately assessing the presence of any covered telecommunications equipment or services that may be present … to determine if the items in question will be used as a substantial or essential component, or to determine if a waiver request may be appropriate.”  The head of an executive agency may, on a one-time basis, waive the requirements for section (a)(1)(A) for up to two years if the entity seeking the waiver provides a “compelling justification” for the additional time needed for the entity to implement the requirements under the law.

Entities that seek a waiver will also be required to submit to the head of the executive agency for which they are intending to contract with a “full and complete laydown” of the presences of covered equipment or services in the supply chain and a “phase-out” plan to eliminate those elements from the supply chain.  The process for submitting a waiver will be determined by each agency.

B.              Reporting Requirements 

The Interim Rule creates a severe reporting regime with aggressive deadlines:  “In the event the Contractor identifies covered telecommunications equipment or services used as a substantial or essential component of any system, or as critical technology as part of any system, during contract performance, or the Contractor is notified of such by a subcontractor at any tier or by any other source, the Contractor shall report the information … to the Contracting Officer … [and] in the case of the Department of Defense, the Contractor shall report to the [DIBNET].”

An initial report is due within one business day, with a follow-up report due in 10 business days.  The contractor must report any covered equipment/systems/services discovered during contract performance in a fairly high level of detail, and must flow this requirement down to subcontractors.

The “notified” prong of this reporting requirement is broad, and is not qualified by thresholds like “credible” information.  Because it captures notification by “any other source,” it is conceivable that the government could impose a constructive notice requirement on contractors, or could take the position that open-source news reporting triggers the reporting requirements.

IV.           Applicability Dates 

The prohibitions take effect on August 13, 2019, and apply to new solicitations issued on/after that date and any resulting contracts, as well as to contracts that are awarded on/after August 13, 2019, even if the solicitations preceded that date.  The Interim Rule requires contracting officers to include the corresponding FAR clause in any future orders under an indefinite delivery (“ID/IQ”) contract, and in any extension of existing contracts or task/delivery orders (including an option).

Contracting officers must also include the representations provision in all solicitations or notices of intent under an existing ID/IQ contract, whenever performance will occur on/after August 13, 2019.

The Week Ahead in the European Parliament –  August 30, 2019

By Sebastian Vos on Posted in EU Law and Regulatory

Summary

Next week, the Members of the European Parliament (“MEPs”) will return to Brussels from recess to hold Committee Meetings.  Several interesting debates and votes are set to take place.

On Tuesday, the Committee on International Trade (“INTA”) will have an exchange of views with the Director General for Trade, Sabine Weyand. She has been Director General since July 1, 2019, and this will be her first appearance in the European Parliament and before the International Trade Committee.

On Wednesday, the Committee on Economic and Monetary Affairs (“ECON”) will have an exchange with Christine Lagarde, candidate for the Presidency of the European Central Bank.  They will grill her on her credentials as chief of the International Monetary Fund and as lawyer.  A point of discussion will be the fact that she, in stark contrast to the previous Presidents of the ECB, doesn’t hold a PhD in economics or has had any formal economic training.  MEPs will also inquire into her plans and ambitions for the Eurozone.  Analysts expect her to resume the legacy of the incumbent ECB President, Mario Draghi, by cutting interest rates and continuing the bond-buying program – called quantitative easing.  She will, however, support the incorporation of environmental considerations in the ECB’s portfolio. ECON will subsequently vote on her appoint.  Their vote is a nonbinding recommendation, but a necessary step in her formal appoint by the European Council, consisting of the European heads of government or state.

Throughout the week, several committees will continue to hold hearings with Finnish ministers on the priorities of the Finnish Presidency of the Council of the EU.  Finland has taken up the rotating Presidency as of July 1 and will remain the President until the end of 2019.  Their priorities can be found, here.

Meetings and Agenda

Monday, September 2, 2019 

Committee on the Internal Market and Consumer Protection

15:00 – 18:30

Debates

  • Draft Presentation of the Council Presidency’s programme with Ms. Katri Kulmuni, Finnish Minister Minister of Economic Affairs and Mr. Timo Harakka, Finnish Minister of Employment

Votes

  • General budget of the European Union for the financial year 2020 

Committee on International Trade

15.00 – 18.30

Debates

  • General budget of the European Union for the financial year 2020
  • State of play of International Trade Negotiations : Exchange of views with Sabine Weyand, Director General for Trade, Commission
  • State of play on the implementation of Trade and Sustainable Development chapter of the EU-Korea Free Trade Agreement

Committee on Foreign Affairs

15.30 – 18.30

Debates

  • Exchange of views with Gunnar Wiegand, Managing Director for Asia and Pacific, EEAS, on the situation in Kashmir
  • Exchange of views with Pekka Haavisto, Minister for Foreign Affairs of Finland, on the priorities of the Finnish Presidency
  • General budget of the European Union for the financial year 2020

Tuesday, September 3, 2019 

Committee on Industry, Research and Energy

09:00 – 12:30 and 14.30 – 18.30

Debates

  • Exchange of views with Director General Eric Paquet on the strategic planning process of Horizon Europe
  • Presentation of Policy Development Study: In-depth analysis of 5G deployment
  • Presentation of Policy Development Study: Europe – the global centre for excellent research
  • Exchange of views with Mr Juhan Lepassaar, Executive Director candidate of the European Union Agency for Cybersecurity (ENISA)
  • Presentation by the Commission by Ms Ditte Juul-Jørgensen, Director-General in DG Energy, on the State of the Energy Union and the state of play as regards the National Energy and Climate Plans (NECPs) for 2021-2030

Votes

  • General budget of the European Union for the financial year 2020

Committee on International Trade

09.00 – 12.30 and 15.00 – 17.00 and 17.00 – 18.30

Debates

  • Presentation by Ville Skinnari, Minister for Development Cooperation and Foreign Trade, representing the President-in-Office of the Council, on the priorities of the Finnish Presidency in the area of International Trade Policy
  • Presentation of the Trade and Investment Barriers report for the year 2018
  • Presentation by the Commission of the outcome of the trade related aspects of the G20 Summit in Osaka, 28 – 29 June 2019
  • Recent developments in the EU investment policy
  • The Union’s Trade Dispute Settlement
  • Presentation of the joint communication “European Union, Latin America and the Caribbean: joining forces for a common future” – trade related aspects
  • Presentation on “EU preferential rules of origin”
  • Presentation of the report on the implementation of macro-financial assistance (MFA) to third countries in 2018

Votes

  • General budget of the European Union for the financial year 2020

Committee on Foreign Affairs

09.00 – 12.30

Debates

  • Exchange of views with Johann Sattler, newly appointed Head of EU Delegation to Bosnia and Herzegovina (in compliance with the Declaration on Political Accountability of the HR/VP)
  • Exchange of views with Hans Grundberg, newly appointed Head of EU Delegation to Yemen (in compliance with the Declaration on Political Accountability of the HR/VP)
  • Exchange of views with Ignacio Ybáñez Rubio, newly appointed Head of EU Delegation to Brazil (in compliance with the Declaration on Political Accountability of the HR/VP)
  • Exchange of views with Meglena Kuneva, Head of the EU Delegation to the Council of Europe
  • Debriefing on the Parliamentary elections in Ukraine of 22 July 2019
  • Exchange of views with Matti Maasikas, newly appointed Head of EU Delegation to Ukraine (in compliance with the Declaration on Political Accountability of the HR/VP)
  • Exchange of views with Aude Maio-Coliche, Head of the EU Delegation to Argentina

Votes

  • General budget of the European Union for the financial year 2020 

Committee on Constitutional Affairs

09.00 – 11.00 and 11.00 – 12.30 and 14.30 – 16.00

Debates

  • Election of the second Vice-Chair
  • Election of the third Vice-Chair
  • Election of the fourth Vice-Chair
  • General budget of the European Union for the financial year 2020
  • Presentation of the programme of the Finnish EU Council Presidency by Ms Tytti Tuppurainen, President of the Council of the European Union, Minister for European Affairs

Votes

  • General budget of the European Union for the financial year 2020
  • Commission Delegated Regulation replacing Annex I to Regulation (EU) 2019/788 of the European Parliament and of the Council on the European citizens’ initiative

Committee on Regional Development

10.00 – 12.30 and 15.00 – 18.30

Debates

  • General budget of the European Union for the financial year 2020
  • Commission Delegated Regulation amending the Annexes to Regulation (EC) No 1059/2003 of the European Parliament and of the Council on the establishment of a common classification of territorial units for statistics (NUTS)
  • Introduction to the work of Policy Department B and presentation of a study “The agenda for cohesion policy in 2019-2024: Key issues for the REGI committee”
  • Exchange of views with Marc Lemaître, Director-General for Regional and Urban Policy (REGIO), European Commission

Committee on Employment and Social Affairs

09.00 – 12.30 and 15.30 – 19.30

Debates

  • General budget of the European Union for the financial year 2020
  • Employment and social policies of the euro area
  • Exchange of views with Joost Korte (Director General of DG EMPL)
  • Presentation of study “EU and ILO: Shaping the Future of Work”
  • Exchange of views with Marianne Thyssen (Commissioner) on the state of play regarding the revision of the EU rules on the coordination of social security systems

Votes

  • General budget of the European Union for the financial year 2020

Wednesday, September 4, 2019

Committee on Civil Liberties, Justice and Home Affairs

09.00 – 12.30 and 14.30 – 15.30 and 15.30 -18.30

Debates

  • Presentation of the priorities of the Finnish Council Presidency
  • Presentation of the tasks and activities of Europol by Catherine De Bolle, Executive Director
  • Presentation of the JHA Agencies network
  • Presentation of the EU Terrorism Situation and Trend Report (TE-SAT) 2019
  • Council implementing decision on the launch of automated data exchange with regard to vehicle registration data in Ireland
  • Discharge 2017: European Asylum Support Office (EASO) – Hearing with Nina Gregori, Executive Director of EASO
  • Presentation of the tasks and activities of Eurojust by Ladislav Hamran, President
  • Presentation of the tasks and activities of the EMCDDA by Alexis Goosdeel, Director
  • Presentation of the tasks and activities of CEPOL by Detlef Schröder, Executive Director
  • Implementing decision approving the conclusion by Eurojust of the Agreement on Cooperation between Eurojust and Serbia
  • Election of the third Vice-Chair

Committee on Economic and Monetary Affairs

09.00 – 18.30

Debates

  • Public Hearing with Andrea ENRIA, Chair of the Supervisory Board of the ECB
  • Appointment of the President of the European Central Bank – Exchange of views with the candidate for the position.
    • Rapporteur: GUALTIERI (S&D, IT)
  • Economic dialogue and exchange of views with Mika LINTILÄ, ECOFIN Chair and Minister for Finance of Finland
  • Appointment of the Vice-Chair of the Supervisory Board of the European Central Bank – Exchange of views with the candidate for the position
    • Rapporteur: GUALTIERI (S&D, IT)

Votes (18:00 – 18:30)

  • Appointment of the President of the European Central Bank (NLE) – Vote on a draft report
  • Appointment of the Vice-Chair of the Supervisory Board of the European Central Bank (NLE) – Vote on a draft report
  • General budget of the European Union for the financial year 2020 – all sections (BUD) – Vote on a draft opinion and budgetary amendments 

Committee on the Environment, Public Health and Food Safety

09.00 – 12.30 and 14.30 – 18.30

Debates

  • Exchange of views with the Commission on the latest developments concerning CORSIA
  • Exchange of views with the Commission on the findings of the Fitness Check of the most relevant chemicals legislation (excluding REACH) and identified challenges, gaps and weaknesses
  • Exchange of views with the European Court of Auditors on “EU actions for cross-border healthcare: significant ambitions but improved management required”
  • Exchange of views with Karmenu Vella (Commissioner for Environment, Maritime Affairs and Fisheries)

Votes

  • General budget of the European Union for the financial year 2020

Thursday, September 5, 2019

Committee on Civil Liberties, Justice and Home Affairs

09.00 – 12.45  and 15.00 – 18.30

Debates

  • Strengthening the rule of law within the Union – A blueprint for action
  • Presentation of the tasks and activities of European Asylum Support Office (EASO) by Nina Gregori, Executive Director
  • Presentation of the tasks and activities of eu-LISA by Krum Garkov, Executive Director
  • Hearing of the candidate selected for the post of Deputy Executive Director of Europol, Mr Jürgen Ebner
  • Presentation of the tasks and activities of the FRA by Michael O’Flaherty, Executive Director
  • Presentation of the tasks and activities of the EDPS
  • Agreement between Canada and the European Union on the transfer and processing of Passenger Name Record data

Votes

  • General budget of the European Union for the financial year 2020

Committee on the Environment, Public Health and Food Safety

09.00 – 12.30

Debates

  • Exchange of views with the Commission on the Communication on “Stepping up EU action to protect and restore the world’s forests”
  • Exchange of views with the Commission on climate change (recent developments in decarburization and adaptation policies)
  • Exchange of views with the Commission on the Environmental Implementation Review 2019 : A Europe that protects its citizens and enhances their quality of life

An Alignment for Afghan Peace

By Eric Robinson on Posted in Asia, International Strategy

It sounds like the start to a bad joke, but what do the Kremlin, the Chinese Communist Party, the Government of the Islamic Republic of Iran, the Taliban, al-Qa‘ida, the Haqqani Network, the Islamic State, the Pakistani intelligence services, exhausted members of NATO, nearly every Democratic candidate for president in the 2020 election, and the current President of the United States all have in common? They all want the United States to end its military campaign in Afghanistan.

On virtually every other issue, these parties would not be aligned, but despite their vastly different interests in the conflict, there is a growing recognition that the American-led war has achieved few, if any, of its strategic objectives and a peace agreement with once unthinkable compromises is starting to take shape.

Afghans, suffering continual war since the 1970s, cannot fairly be listed as part of this growing consensus, given the great diversity in political interests among Afghans and that the Government of the Islamic Republic of Afghanistan has not even been a party to the talks at times. While Afghanistan has witnessed extraordinary improvements in public health, repatriation of refugees, and women’s access to education, the country remains mired in conflict and the American and NATO presence is ill-equipped to mitigate the harm, is causing its own damage, and is generally oriented towards counterterrorism and security sector assistance, not building a free, stable, and prosperous Afghanistan.

With negotiations between the United States and the Taliban underway, it is too soon to assess specific provisions of the agreement. Overall themes, however, have already emerged. The United States and NATO will apparently begin to pare down their military contingent and, in turn, the Taliban are expected to renounce their ties to al-Qa‘ida (a pledge of loyalty from one dead man, Osama bin Laden, to another, Mullah Mohammed Omar, remains binding on the parties but is clearly up for discussion) and – whether this is officially stated or not – will continue their military campaign against elements of the Islamic State in Afghanistan. In short, the United States is assuming an element of the armed opposition will remain able and willing to mitigate an authentic Afghanistan-based terrorist threat.

While a broad alignment around ending American involvement in the war exists, the concept the United States’ principal negotiator is pursuing is not without its critics. While national security hawks’ views are not surprising, it is an inescapable reality that Afghanistan hosts threats to Afghans, threats to countries throughout the region, and even threats to Europe and North America. The proposed agreement will not even likely lead to a real peace, it will simply change the structure of the conflict. As previously noted, Afghans are not uniform in their view on the proposals. Afghans who committed themselves to fighting the Taliban, ethnic and religious minorities like the Hazara, and Afghan women all stand to suffer if the Taliban is granted the political legitimacy these proposals will confer.

Ultimately, nations, terrorist groups, international organizations, and other actors all have shifting interests, so this overarching alignment may only be a temporary curiosity. However, the alignment of two of these entities – President Trump and a range of possible successors – will likely remain in place, despite the actions of these other actors. The war in Afghanistan is deeply unpopular in the United States, and there is little constituency for continuing it in its current form outside of national security circles or op-ed pages, so the United States is witnessing an unintentional connection between actors that could not be more dissimilar.

Whether President Trump or a successor commits to end the American intervention in Afghanistan, and whether the Taliban agrees to pursue the Islamic State, are uncertainties. What is certain is that Afghans have now witnessed more than four decades of continual conflict and are almost bystanders to discussions to conclude the war. Regrettably for the Afghan victims of war, the end to this conflict currently being discussed remains predicated on assumptions so broad that any precise prediction about the next phase of Afghan history should be treated skeptically.

 

The Re-Imagined National Counterterrorism Center

By Eric Robinson on Posted in Defense Issues, Uncategorized

President Trump’s nomination of Vice Admiral (Ret.) Joe Maguire to become the country’s next Director of National Intelligence both elevated the profile of the decorated Navy SEAL and the organization he currently leads, the National Counterterrorism Center (NCTC).  The nomination comes in the wake of the El Paso Attack that claimed 22 lives and the acknowledgement that NCTC had started analyzing domestic terrorism, a departure from the first fifteen years of the organization’s history.

Established in 2004, and in response to a recommendation from the 9-11 Commission, NCTC is designed to assemble analytic and policy expertise in one organization and build a comprehensive, national-level approach to counterterrorism.  The model has not always worked, and there are intentional limits to NCTC’s mission, but NCTC’s intelligence analysis is likely as strong as any other segment of the Intelligence Community (IC), NCTC is an integral part of the President’s Daily Brief process, and NCTC’s Directors have exerted real influence over national-level decision making.

Despite these successes, analyzing domestic terrorism is not a perfect fit for NCTC.  First, the IC orients its intelligence collection activities towards international threats.  This means that the reporting NCTC professionals use to shape their understanding of the world is going to be less robust for domestic terrorism analysis than for Lebanese Hizballah or al-Qa‘ida, for example.  Next, the IC is insular by nature, by Executive Order, and by statute.  Sharing information within the IC is dramatically better now than in 2001, but the requirements of security clearances and secure facilities and computing keeps IC reporting and IC analysis primarily within the federal government, and information shared with state, local, and tribal authorities is often so sanitized that it is not operationally useful.  NCTC has structures in place, like Domestic Representatives, to help address this challenge, but classification remains a serious structural issue that will prevent local law enforcement from taking day-to-day advantage of NCTC’s new domestic terrorism analysis.

These obstacles acknowledged, no new domestic terrorism laws, updated classification guidelines, or other wide-ranging reforms are necessary to provide NCTC’s domestic terrorism analysis to a willing and interested audience, however.  NCTC, like other elements of the IC, can use the so called “Five Eyes” agreement among the United States, Canada, the United Kingdom, Australia, and New Zealand to share certain forms of intelligence reporting with key allies with much greater ease than sharing the same reporting with state or municipal police.  Additionally, NCTC has a pre-existing network of international partners it can rely upon, like the Joint Terrorism Analysis Centre in the UK or the Integrated Terrorism Assessment Centre in Canada, to employ NCTC’s new domestic terrorism-oriented analytic products.

Dylann Roof, while clearly a domestic terrorist, was not purely American in his ideological origins.  He mixed nostalgia for the Confederacy with images of the Rhodesian and apartheid-era South African flags, indicating an interest in committing violence on behalf of white nationalism internationally, not just in Charleston, SC.  More recently, the attacker in Christchurch, NZ specifically cited Roof in his written manifesto prior to mass murdering civilians at worship.  Another white nationalist, the Norwegian Anders Breivik, appeared both in the Christchurch attacker’s writings as well as the research of Christopher Hasson, a Coast Guard Officer accused of massing weapons in advance of a possible attack against prominent Americans.  A full list of the international ties among violent white nationalists is beyond the scope of this assessment, but it is clear that domestic terrorism, as considered in the United States, is part of an world-wide ideological network in the same way as international terrorism is understood to be.  Therein lies an opportunity for the National Counterterrorism Center.

Through using existing means of intelligence collection, the written product of experts already assigned to the organization, and employing decades-old information sharing protocols with allies facing similar threats, NCTC is well-positioned to lead the government response to a major domestic threat with significant international ties.  No act of Congress is necessary to give NCTC this authority, either, all that is required is the will of its current – and outgoing – Director, which has already been demonstrated, as well as the next Director’s commitment to re-imagining NCTC’s role and pushing the organization to take on an additional pressing threat to the country.

Bipartisan, Bicameral IDEA Act Seeks to Improve Diversity of Patent Applicants

By Holly Fechner, Jason G. Everett and Matthew Shapanka on Posted in Congressional Action, Intellectual Property Protection

A bipartisan, bicameral group of members of Congress introduced the Inventor Diversity for Economic Advancement (IDEA) Act to ensure that policy makers and researchers have the tools they need to study diversity among inventors holding U.S. patents.  Representative Nydia Velázquez (D-NY), Representative Steve Stivers (R-OH), Senator Thom Tillis (R-NC) and Senator Mazie Hirono (D-HI) introduced the IDEA Act on the heels of a U.S. Patent and Trademark Office (USPTO) report released earlier this year finding that as of 2016 only 20 percent of U.S. patents list a woman as an inventor, and that only 12 percent of inventors seeking a patent were women.  A 2016 study by the Institute for Women’s policy research reached similar conclusions, finding that only 18 percent of U.S. patents list a woman inventor.

In addition to the USPTO and IWPR studies on gender disparities in patenting, other scholars have studied race and income gaps in patent rates.  For example, Professor Lisa Cook at Michigan State University has found that African Americans and Hispanic Americans hold roughly half the number of patents that white Americans do, and that African Americans and Hispanic Americans also apply for patents at significantly lower levels than white men. Separately, Alex Bell and his colleagues at Harvard, found that a person born into a family in the top one percent of income is ten times more likely to receive a patent than someone born into a family in the lower fifty percent of income. Even at the very top income levels, children born into the top one percent are 22 percent more likely to patent an invention in their lifetime than those born into the top five percent.

Because the USPTO does not collect data on the gender, race, income, and other characteristics of inventors, all research today relies on software algorithms or other survey data to estimate the demographics of inventors.  The IDEA Act would change this.  The bill would require the USPTO, for the first time, to collect demographic data—gender, race, ethnicity, national origin, sexual orientation, age, military or veterans status, disability, education level, and income level—from patent applicants on a voluntary basis. The USPTO would be required to keep this information separate from the patent application itself, and to make the data available publicly.  According to the sponsors, the bill will help close the patent gaps by helping the USPTO and the public to monitor diversity among inventors on an ongoing basis.

The IDEA Act is the latest in a series of congressional action to promote diversity in the patent system.  The Study of Underrepresented Classes Chasing Engineering and Science Success (SUCCESS) Act (Pub. L. No. 115-273) became law in October 2018.  That legislation requires the USPTO to work with the Small Business Administration to study the gender, race, and income gaps in patenting and report to Congress on its findings by October 31st of this year.  In furtherance of that report, the USPTO has held a series of hearings to take public testimony on this topic.

In addition, both the House and Senate Judiciary Committees held hearings this past spring on diversity in patenting, taking testimony from inventors, academics, and industry representatives on the extent of the disparities and best practices for closing the gaps.  The IDEA Act follows from these hearings, where witnesses testified that the difficulty of studying the diversity gaps in patent gaps makes it difficult to track progress.

 

 

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