USPTO INCREASES FOCUS ON DIVERSITY IN PATENTING WITH NEW REPORT ON WOMEN INVENTORS

The U.S. Patent and Trademark Office’s (“USPTO”) Office of the Chief Economist released a new report last week examining women inventor trends in the United States from 1976 to 2016.  The study showed that only 21 percent of U.S. patents granted during that 40-year period include at least one woman listed as an inventor.  Despite growing rates of women earning science, technology, engineering, and mathematics (“STEM”) degrees, and increasing participation rates among women in nearly all science occupations, women do not patent technology at the significant rates of their male counterparts.  A 2016 report from the Institute for Women’s Policy Research (“IWPR”) reported a similar gender gap in patenting, finding that only 18.8 percent of U.S. patents listed a woman inventor.

Notably, the USPTO study does not discuss the inventing rates of women of color.  Like previous studies by other researchers, because the USPTO does not currently collect demographic data from patent applicants, this study determined the gender of inventors by matching the first names of listed inventors to recognized databases of male and female names.  However, this approach has limitations, including inaccurate results for gender-neutral names, names that correspond to different genders in different languages, and translation of names that have no English equivalent.  These limitations also make it difficult for researchers to analyze patenting rates of inventors according to race and other characteristics.

Although the aggregate patent gap is significant, the USPTO report found an even starker gap in the number of individual women inventors.  In 2016, for example, only 12 percent of all unique inventors granted a patent in the U.S. were women.

In addition to the low rates of patenting among women inventors generally, the study did report a number of other findings:

  • Women working in “technology-intensive states” tend to patent at higher rates. Delaware, with 18 percent, and the District of Columbia and New Jersey with 17 percent each, are home to the highest rates of women inventors, while patent-intensive California, Massachusetts, and New York also have high rates of women inventors at about 15 percent each.
  • Women who live in states that have a higher percentage of women participation in the workforce also tend to patent at higher rates.
  • Women who work on larger, mixed-gender teams also tend to patent at higher rates. Although the report does not provide much detail on this finding, it does suggest that the gender dynamics of collaborative inventor networks has an impact on patenting rate on mixed gender teams.  This conclusion is consistent with the findings of the 2016 IWPR report, as well as studies conducted by other scholars who have found that women in private industry, which tends to employ more collaborative research teams, patent inventions at higher rates than women in academia, where individual research and teaching take priority over patenting and commercialization.

USPTO Director Andrei Iancu has publicly emphasized the importance of encouraging full participation in the innovation ecosystem across demographic groups.  This report is the first of two the USPTO is expected to release this year addressing underrepresentation in patenting and commercializing innovations.  The other report, required by the 2018 Study of Underrepresented Classes Chasing Engineering and Science Success (SUCCESS) Act (Pub. Law No. 115-273), will be delivered to Congress later this year.  That study directs the USPTO, in consultation with the Small Business Administration, to study disparities in patenting by race, income, and veteran status, in addition to gender, and to make recommendations to Congress and the Administration for closing the gaps in patenting and entrepreneurship experienced by these underrepresented groups.

Towards a European Army?

Until recently, even those in Europe who favour the development of an autonomous EU defense capability avoided referring to the setting up of a “European army”.

When the Common Security and Defense Policy (CSDP) was included in the Nice treaty in December 2000, the British government of Tony Blair was adamant about the exclusion of a European army as a final objective, even if he had been the one to launch the project in August 1998 as part of an effort to get the UK closer to the EU mainstream.

It was therefore surprising to hear French president Emmanuel Macron use the words in a radio interview in November 2018: “We have to protect ourselves with respect to China, Russia and even the United States of America, he said, “we will not protect the Europeans unless we decide to have a true European army”. Even more surprising was hearing Angela Merkel a week later endorse the formulation in a speech to the European Parliament: “The times when we could rely on others is past,” she said, “we have to look at the vision of one day creating a real, true European army.” And a few weeks later, the German defense minister Ursula Von der Leyen went even further: “Europe’s army”, she declared, “is already taking shape”.

Should these comments just be dismissed as wishful thinking or political posturing? Are we talking of a “paper army”, to quote “the Economist”? Or are we already there, as Ursula Von Der Leyen seems to believe?

The question needs to be looked at under three different angles:

  • The current political context
  • Changes in the institutional framework
  • Joint procurement and “pooling and sharing” of capabilities

*   *   * Continue Reading

The Week Ahead in the European Parliament – February 15, 2019

Summary

Next week will be a committee week in the European Parliament.  Members of the European Parliament (“MEPs”) are expected to vote and debate on interesting matters.

On Tuesday, the Committee on International Trade (“INTA”) will vote on Recommendations for Opening of Trade Negotiations between the EU and the U.S.  In the draft motion for a resolution, prepared by MEP Bernd Lange (S&D, DE), it is recommended not to engage in trade negotiations since it believes that these negotiations will produce an outcome that is not in the interest of European citizens.  It stresses that the EU should not negotiate under threat – referring to the still-in-force steel and aluminum tariffs and the recent countervailing duties on Spanish olives.  Another major prospect is whether President Trump will introduce tariffs on automotives under Section 232.  He is considering to do so based on the forthcoming conclusions of the investigation of the Department of Commerce that are set to be published on Sunday, February 17, 2019.  See the draft recommendation here.

On Wednesday, the Parliament’s Committee on Internal Market and Consumer Protection (“IMCO”) is expected to approve the compromise text agreed with the Council of the EU during trilogue negotiations on the Commission’s proposal for a Digital Content Directive.  The proposal seeks to expand the protection of consumers who are required to disclose data as a condition for the supply of “digital goods”.  The proposed directive also strives to make sure that the so-called “free services” are subject to the same protection for the consumers when they do not pay a monetary price for a service or for content.

On the same day, IMCO is expected to vote on the compromise text, agreed in trilogue, on the Commission’s proposed Directive on the Online Sales of Goods.  This proposal, along with the proposed Digital Content Directive, form another pillar of the European Commission’s Digital Single Market Strategy (“DSM”).  They aim to tackle the challenges to cross-border e-commerce in the EU, including fragmentation of the legal regimes in the EU that made it problematic for SMEs to conduct business across borders, and the low level of consumer trust when buying online from another EU Member State. Continue Reading

Defense Department Releases Artificial Intelligence Strategy

On February 12, 2019 the Department of Defense released a summary and supplementary fact sheet of its artificial intelligence strategy (“AI Strategy”). The AI Strategy has been a couple of years in the making as the Trump administration has scrutinized the relative investments and advancements in artificial intelligence by the United States, its allies and partners, and potential strategic competitors such as China and Russia. The animating concern was articulated in the Trump administration’s National Defense Strategy (“NDS”): strategic competitors such as China and Russia has made investments in technological modernization, including artificial intelligence, and conventional military capability that is eroding U.S. military advantage and changing how we think about conventional deterrence. As the NDS states, “[t]he reemergence of long-term strategic competition, rapid dispersion of technologies” such as “advanced computing, “big data” analytics, artificial intelligence” and others will be necessary to “ensure we will be able to fight and win the wars of the future.” Continue Reading

The Week Ahead in the European Parliament – February 8, 2019

Summary

Next week will be a plenary week in the European Parliament.  Interesting votes and debates are expected to take place.

On Tuesday, February 12, the next debate in the series on the Future of Europe will be held featuring Italian Prime Minister Giuseppe Conte.  His visit comes admits a diplomatic spat between France and Italy earlier this week and ongoing tensions between Brussels and Rome on Italy’s budget deficit.  It will be interesting to see what vision Conte will present to the Members of the European Parliament (“MEPs”) for the future of the European Union ahead of the upcoming elections, by then only a 100 days away.

On Wednesday, February 13, MEPs will vote on the EU-Singapore Free Trade Agreement and EU-Singapore Investment Protection Agreement.  MEPs will have had a debate on the approval of these agreements the previous day.  Negotiations of the EU-Singapore FTA were concluded back in 2013, but the process was delayed to obtain a legal Opinion of the Court of Justice of the European Union.  The Court ruled that certain provisions relating to investment protection were outside the exclusive competence of the EU.  It was therefore decided to carve out these provision into a separate EU-Singapore Investment Protection Agreement that needs to be ratified by the individual Member States according to their constitutional requirements (in contrast to the EU-Singapore FTA that only needs approval of the Council and European Parliament).  The EU-Singapore FTA seeks to greatly enhance the EU’s access to the Singaporean market while it protects labor and environmental standards.  This is the first agreement of the EU with an ASEAN nation and the EU has previously expressed its ambitions to conclude a region-to-region trade agreement.  See the EU-Singapore Trade and Investment agreements here.

On Wednesday, February 13, MEPs will have their vote on a Framework for Screening of Foreign Direct Investments (“FDI”) into the European Union.  Since national security is an exclusive national competence, this legislative proposal will only attempt to set up a EU-level framework to coordinate the national screening of FDI in strategic sectors in the EU.  The proposal was based on an initiative of the current rapporteur Frank Proust (FR, EPP) in response to a surge in Chinese FDI in Europe in 2016.  The proposal will give the Commission the competence to render non-binding opinions on individual screening cases and requests Member States to share relevant information with each other.  The European Parliament and the Council agreed on a provisional text, on December 5, 2018, and the International Trade Committee of the European Parliament (“INTA”) endorsed the text on December 10, 2018.  See the draft proposal here, and Covington’s detailed client alert here.

Meetings and Agenda

Monday, February 11, 2018

Plenary session 

17:00 – 23:00

Debates

  • Program for single market, competitiveness of enterprises and European statistics
    • Rapporteur: Nicola Danti (IT, S&D)
  • EU Anti-Fraud Programme
    • Rapporteur: José Ignacio Salafranca Sánchez-Neyra (ES, EPP)
  • Multiannual plan for stocks fished in the Western Waters and adjacent waters, and for fisheries exploiting those stocks
    • Rapporteur: Alain Cadec (FR, EPP)
  • Fisheries Partnership Agreement between Côte d’Ivoire and the EU (2018-2024)
    • Rapporteur: João Ferreira (PT, GUE-NGL)
  • Fisheries Partnership Agreement between Côte d’Ivoire and the EU (2018-2024) (resolution)
    • Rapporteur: João Ferreira (PT, GUE-NGL)
  • Implementation of the Treaty provisions related to EU Citizenship
    • Rapporteur: Maite Pagazaurtundúa Ruiz (ES, ALDE)
  • Implementation of the Treaty provisions concerning enhanced cooperation
    • Rapporteur: Alain Lamassoure (FR, EPP)
  • Implementation of the Treaty provisions on Parliament’s power of political control over the Commission
    • Rapporteur: Mercedes Bresso (IT, S&D)
  • The state of the debate on the Future of Europe
    • Rapporteur: Ramón Jáuregui Atondo (ES, S&D)
  • A comprehensive European industrial policy on artificial intelligence and robotics
    • Rapporteur: Ashley Fox (UK, ECR)

Special committee on financial crimes, tax evasion and tax avoidance (“TAX3”)

19:00 – 21:00

  • Exchange of views with Owen Bonnici, Minister for Justice of Malta
  • Public hearing on “Alleged financial crimes, tax evasion and tax avoidance in Malta” More information here

Committee on Civil Liberties, Justice and Home Affairs (“LIBE”)

19.00 – 20.00

Vote

  • European Border and Coast Guard (COD) – adoption of draft report and vote on the decision to enter into inter-institutional negotiations and composition of the negotiating team
    • Rapporteur: Roberta METSOLA (EPP, MT)

20.00 – 21.00

Debate

  • Rule of Law Monitoring Group (ROLMG) – resolution on the activities of the Working Group with a general mandate to monitor the situation as regards rule of law and fight against corruption within the EU and address specific situations, in particular Malta and Slovakia – consideration of a motion for a resolution
    • Rapporteur: Sophia in ‘t VELD (ALDE, NL)

Tuesday, February 12, 2018

100 days until the elections

Plenary session

9:00-12:20

Debates

  • EU-Singapore Free Trade Agreement
    • Rapporteur: David Martin (UK, S&D)
  • EU-Singapore Free Trade Agreement (resolution)
    • Rapporteur: David Martin (UK, S&D)
  • EU-Singapore Investment Protection Agreement
    • Rapporteur: David Martin (UK, S&D)
  • EU-Singapore Investment Protection Agreement (resolution)
    • Rapporteur: David Martin (UK, S&D)
  • EU-Singapore Partnership and Cooperation Agreement
    • Rapporteur: Antonio López-Istúriz White (ES, EPP)
  • EU-Singapore Partnership and Cooperation Agreement (resolution)
    • Rapporteur: Antonio López-Istúriz White (ES, EPP)
  • Sustainable use of pesticides
    • Rapporteur: Jytte Guteland (SE, S&D)
  • Implementation of the cross-border Healthcare Directive
    • Rapporteur: Ivo Belet (BE, EPP)
  • Minimum requirements for water reuse
    • Rapporteur: Simona Bonafè (IT, S&D)

12:30 – 14:30

Votes, followed by explanations of votes

  • Agreement to prevent unregulated high seas fisheries in the Central Arctic Ocean
    • Rapporteur: Norica Nicolai (RO, ALDE)
  • VAT: Definitive system for the taxation of trade between Member States
    • Rapporteur: Fulvio Martusciello (IT, EPP)
  • Protocol to the EU-Mexico Economic Partnership, Political Coordination and Cooperation Agreement (accession of Croatia)
    • Rapporteur: Inmaculada Rodríguez-Piñero Fernández (ES, S&D)
  • Approval and market surveillance of agricultural and forestry vehicles
    • Rapporteur: Nicola Danti (IT, S&D)
  • Roma integration strategies

15:00 – 17:00 

Debates

  • Situation in Syria
  • Follow up taken by the EEAS two years after the EP Rapporteur on EU strategic communication to counteract propaganda against it by third parties
    • Rapporteur: Anna Elżbieta Fotyga (PO, ECR)

17:00 – 19:30 

Debates

  • Debate with the Prime Minister of Italy, Giuseppe Conte, on the Future of Europe

19:30 – 23:00 

Debates

  • Exchange, assistance and training program for the protection of the euro against counterfeiting for the period 2021-2027 (Pericles IV program)
    • Rapporteur: Dennis de Jong (NL, GUE-NGL)
  • Deliberations of the Committee on Petitions 2018
    • Rapporteur: Cecilia Wikström (SE, ALDE)
  • Experiencing backlash in women’s rights and gender equality in the EU
  • Policy challenges and strategies against women’s cancers and related comorbidities
  • Use of cannabis for medicinal purposes

Wednesday, February 13, 2018

Plenary session 

09:00 – 11:50 

Debates

  • Common provisions on the European Regional Development Fund, the European Social Fund Plus, the Cohesion Fund, and the European Maritime and Fisheries Fund and financial rules for those
    • Rapporteurs: Constanze Krehl (DE, S&D) Andrey Novakov (BU, EPP)

12:00 – 14:00 

Votes, followed by explanations of votes

  • Treaty establishing the Transport Community
    • Rapporteur: Karima Delli (FR, Greens-EFA)
  • European Fisheries Control Agency
    • Rapporteur: Lidia Joanna Geringer de Oedenberg (po, s&d)
  • Computerizing the movement and surveillance of excise goods
    • Rapporteur: Kay Swinburne (UK, ECR)
  • Law applicable to the third-party effects of assignments of claims
    • Rapporteur: Pavel Svoboda (CZ, EPP)
  • The state of the debate on the Future of Europe
    • Rapporteur: Ramón Jáuregui Atondo (ES, S&D) 

15:00 – 17:00 

Debates

  • Establishment of the European Monetary Fund
    • Rapporteurs: Pedro Silva Pereira (PT, S&D), Vladimír Maňka (SK, S&D)

17:00 – 18:00

Votes (oral explanations of votes will be taken on Thursday)

  • Cooperation between the courts of the Member States in the taking of evidence in civil or commercial matters
    • Rapporteur: Emil Radev (BU, EPP)
  • Service in the Member States of judicial and extrajudicial documents in civil or commercial matters
    • Rapporteur: Sergio Gaetano Cofferati (IT, S&D)
  • EU-Morocco Sustainable Fisheries Partnership Agreement
    • Rapporteur: Alain Cadec (FR, EPP)
  • EU-Morocco Sustainable Fisheries Partnership Agreement (resolution)
    • Rapporteur: Alain Cadec (FR, EPP)
  • Streamlining measures for advancing the realization of the trans-European transport network
    • Rapporteur: Dominique Riquet (FR, S&D)
  • Insurance of motor vehicles
    • Rapporteur: Dita Charanzová (CZ, ALDE)

18:00 – 23:00

Debates (or at the end of the votes)

  • Framework for screening of foreign direct investments into the European Union
    • Rapporteur: Franck Proust (FR, EPP)
  • Interoperability of electronic road toll systems and facilitating cross-border exchange of information on the failure to pay road fees in the Union
    • Rapporteur: Massimiliano Salini (IT, EPP)
  • Mutual recognition of goods lawfully marketed in another Member State
    • Rapporteur: Ivan Štefanec (SK, EPP)
  • Charges on cross-border payments in the Union and currency conversion charges
    • Rapporteur: Eva Maydell (BU, EPP)
  • Regulations and general conditions governing the performance of the Ombudsman’s duties (Statute of the European Ombudsman)
    • Rapporteur: Paulo Rangel (PT, EPP)
  • Implementation of the legal provisions and the Joint Statement ensuring parliamentary scrutiny over decentralized agencies
    • Rapporteur: György Schöpflin (HU, EPP)
  • Implementation of the Charter of Fundamental Rights of the European Union in the EU institutional framework
    • Rapporteur: Barbara Spinelli (IT, GUE-NGL) 

Thursday, February 14, 2018

Plenary session

09:00 – 11:50 

Debates

  • Protection of animals during transport within and outside the EU
    • Rapporteur: Jørn Dohrmann (DK, ECR)
  • Strengthening the competitiveness of the Internal Market by developing the EU customs union and its governance
    • Rapporteur: Virginie Rozière (FR, S&D) 

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 135)

Committee on Budgets

8:30 – 10:00

  • Estimates of revenue and expenditure for the financial year 2020 – Section I – European Parliament (BUD)
    • Rapporteur: Vladimír MANKA (S&D, SK)
  • Exchange of views in the presence of Vice-Presidents of the European Parliament responsible for the budget and the Secretary General

Committee on Regional Development

9:00 – 12:00

  • European Regional Development Fund and on the Cohesion Fund (COD) – adoption of draft report by Andrea Cozzolino (S&D, IT)

A Look at February on Capitol Hill

Washington, D.C., is absorbing President Donald Trump’s first State of the Union address to Congress since the Republican Party lost the House of Representatives in the midterm election last fall, amid concerns that the ongoing budget impasse over a potential southern border wall and related immigration issues might lead to the year’s second government shutdown. The date of the State of the Union was delayed due to the first government shutdown. Congress must act very soon to extend government funding past Feb. 15 with legislation that the president is willing to sign, or the country could face a second costly shutdown.

The State of the Union gave the president an opportunity to strike a new conciliatory tone, and in some respects he chose policy pronouncements that could bridge the partisan divide — such as asking Congress to take up an infrastructure improvements bill. The speech also gave the president an opportunity to dig in his heels for a protracted battle over a southern border wall, and to make more ideologically sharp statements about abortion legislation and what he considers to be overly hostile congressional investigations. In short, the speech was a hybrid of the two approaches: bridge-building and confrontation.

Congressional leaders in both parties are mostly seeking to avoid another government shutdown, and for now they are principally relying on the 17 negotiators working to resolve the remaining issues in the Homeland Security appropriations bill, even as the rest of the remaining appropriations bills are ready to proceed to final passage. Senate Appropriations Committee Chair Richard Shelby, R-Ala., a key negotiator, expressed pessimism over the weekend that negotiators could resolve the remaining issues. Another key negotiator, Sen. John Hoeven, R-N.D., stated publicly that the border wall impasse might lead President Trump to have to declare the need for the wall a national emergency, setting up a potential showdown with the federal courts over such a use of presidential power.

House Speaker Nancy Pelosi, D-Calif., indicated on Wednesday that she has informed Sen. Shelby that she can support whatever bipartisan compromise the conference committee can generate. Time is running short for resolving the border security impasse, and negotiators likely need to produce a compromise by Friday, Feb. 8, or very soon thereafter, in order for Congress to have time to process the compromise through both chambers before the Feb. 15 expiration of the current continuing resolution.

The Senate begins its February work period with two important cabinet nominations to consider. The first, that of William Barr to be United States Attorney General, was voted out of the Senate Judiciary Committee favorably on Thursday, allowing Senate Majority Leader Mitch McConnell, R-Ky., to file a motion to invoke cloture on Barr’s nomination. That trajectory sets up the Barr nomination for final confirmation by the full Senate sometime next week.

Once it disposes of the Barr nomination, the Senate may take up the nomination of acting U.S. Environmental Protection Agency administrator Andrew Wheeler to be confirmed to that post. The Senate Environment & Public Works Committee approved the Wheeler nomination earlier this week on an 11-10 party-line vote, queueing up that nomination for consideration by the full Senate sometime later in the work period.

The Senate has approved S. 1, a bill to make improvements to certain defense and security assistance provisions and to authorize the appropriation of funds to Israel, to reauthorize the United States-Jordan Defense Cooperation Act of 2015, to assert concern over the administration’s planned withdrawal from Syria and further sanction the Syrian government, and for other purposes. This Middle East security package, introduced by Sen. Marco Rubio, R-Fla., enjoyed strong support among Republicans, but initially divided Senate Democrats. The bill is not expected to be taken up anytime soon by the House of Representatives.

The Senate is now considering a fairly noncontroversial bipartisan public lands package, but one sticky remaining issue is the desire of Senator Mike Lee, R-Utah, to carve his state out of the reach of the Antiquities Act. Utah Republicans for years have lamented the actions taken by successive Democratic presidents to designate national monuments in Utah.

The Trump administration’s Department of the Interior took actions during the last Congress to unilaterally scale back two such Utah national monuments, the Obama-designated Bears Ears National Monument and the Clinton-designated Grand Staircase-Escalante National Monument, leading to ongoing litigation, and an outcry from Democrats on Capitol Hill and a wide variety of outside stakeholders. Lee appears unlikely to make headway on his Antiquities Act effort, and the public lands package is likely to clear the Senate by the end of this week.

The House of Representatives also kicks off its February work period this week. The House will focus on a number of bills reported out of the House Transportation & Infrastructure Committee and the House Judiciary Committee under suspension of its rules, before turning to a bill introduced by Rep. Julia Brownley, D-Calif., entitled the Veterans’ Access to Child Care Act.

This article also was published in Law360.

Top Ten Issues to Watch in Africa in 2019

  1. Africa’s Growth Prospects. Africa’s gross domestic product (GDP) is expected to grow at 3.8 percent in 2019, which is a significant improvement over last year’s regional growth rate of 2.6 percent. Excluding the continent’s largest economies (Angola, Nigeria and South Africa), which are growing collectively at an average of 2.5 percent, the aggregate growth rate for the region would be a healthy 5.7 percent. According to Foresight, about half the of world’s fastest growing economies are in Africa, with 20 economies expected to grow at five percent or more over the next five years. This includes Burkina Faso, Tanzania, Uganda, Kenya, Senegal, Benin, Cote d’Ivoire, Ethiopia, Ghana and Rwanda. We will be watching whether commercial debt, both from the issuance of Eurobonds and Chinese loans, starts to be a drag on growth. Good governance and transparency will also impact the economic performance across the region.
  2. African Continental Free Trade Agreement. While some of the world’s leading economies struggle to grow due to the implementation of protectionist trade policies, the leadership of the African Union (AU) is working to create the world’s largest free trade zone since the formation of the World Trade Organization. Concerns about an increasingly bureaucratic AU did not prevent 50 of the 55 African nations from signing the AfCFTA. To date, 18 of the required 22 countries have ratified the framework designed to eliminate tariffs on a large variety of goods and significantly boost intra-Africa trade. Non-tariff barriers to trade—including burdensome customs controls, high settlement payments, deficient distribution channels, and corruption—may prove to be the most difficult hurdles to a more prosperous Africa and deserve close scrutiny as the AfCFTA progresses toward implementation. Furthermore, collaboration between the private sector and governments will be critical in areas of intra-African trade infrastructure, trade finance, trade information, and logistics services for the AfCFTA to be successful.
  3. Enhancing Africa’s Connection to World-Class Computing. Africa’s economic growth in 2019, which will be accelerated by technological innovation across all sectors, coincides with global trends toward digital and shared economies. A growing focus on efficient and scalable utilization of assets will lead to innovative, high growth, and high impact opportunities in Africa. Critical to this transformation is the commitment by leading cloud computing companies to build data centers on the continent, which will enable broader access to advanced computing resources and services driven by artificial intelligence, machine learning, and the Internet of Things (IoT). Cloud computing resources will lead to more productive and knowledge-based economies and help Africa’s young and fast-growing population create innovative opportunities while addressing challenges in key sectors like healthcare, transportation, trade, and education. How African policy makers collaborate with the private sector to enact enabling and harmonized privacy, cybersecurity, and related policies and regulations that protect individual and institutional data is one of the key issues to watch in this space.
  4. Development Finance in Africa. Leveraging the power of the private sector through development finance is an increasingly popular complement to traditional foreign aid around the world. In October, the United States took steps to modernize its approach to development finance with the passage of the Better Utilization of Investment Leading to Development (Build) Act, which was signed into law by President Trump on October 5, 2018. The Act creates a new institution—the U.S. International Development Finance Corporation (USDIFC)—which will merge the Overseas Private Investment Corporation (OPIC) and several USAID facilities, including the Development Credit Authority (DCA), the Office of Private Capital and Microenterprise (OPCM), and enterprise funds. With $60 billion dedicated to USIDFC, the new entity will have twice the amount of money to invest as compared to OPIC’s current lending cap of $29 billion. OPIC’s president and chief executive was explicit about one of the primary motivations behind USIDFC: to be “a financially sound alternative to the state-directed initiatives pursued by China that have left many countries deep in debt.” It is estimated that China leverages $40 billion through is varied development finance institutions, monies implemented with no political conditionalities attached under the umbrella of China’s One Belt One Road initiative. According to the Washington-based Atlantic Council, between 2012 and 2016, projects in sub-Saharan Africa accounted for the largest share of DFI commitments ($14.2 billion), followed by East and South Asia ($10.5 billion), and Latin America ($10.2 billion). Monitoring the implementation of USDIFC, and assessing how its offerings affect China’s DFIs, if at all, will be of interest to corporations and public policy makers alike.
  5. A Continuing Trend of Anti-Corruption Enforcement. Last January, we noted that anti-corruption initiatives were on the rise on the continent, with 2018 declared the “African Anti-Corruption Year” by the African Union. If 2018 is any indicator, we expect that this trend will continue in 2019 and beyond. While the sheer volume of anti-corruption enforcement actions involving conduct in Africa in 2018 was not particularly significant, recent developments suggest that companies operating in Africa can expect heightened scrutiny from anti-corruption enforcers in the coming year. As we have previously described, France’s arrival on the international enforcement scene is likely to be particularly notable in this regard, given the large number of French companies operating in Francophone Africa. On the domestic enforcement front, in South Africa we will be watching developments in the sprawling “State Capture” matter, which is focused on allegations of widespread corruption and conflicts of interest in the government of former president Jacob Zuma. We can also expect U.S. enforcers to continue to be active on the continent, as evidenced by the successful prosecution of Chinese national Patrick Ho in a case involving alleged bribes on behalf of a Chinese energy company in Chad and Uganda, and the early 2019 indictments of a number of individuals in connection with Mozambique’s “Tuna Bond” scandal. Finally, as we have previously discussed, multilateral development banks will continue to play an important enforcement role in Africa. The World Bank, which has aggressively enforced its sanctions and debarment procedures for several years, initiated 28 investigations in Africa in its 2018 financial year alone, representing 41 percent of all new investigations. With this enforcement activity in the background, we expect that companies operating in Africa will need to continue to focus on developing and implementing effective anti-corruption compliance programs. In the coming weeks and months, we will be further analysing anti-corruption developments on the continent, and providing insights on how companies can best mitigate corruption risk in their operations in Africa.
  6. Project Finance. Based on the African Development Bank’s estimate that there remains a $68–$108 billion financing gap to meet Africa’s infrastructure needs, which is estimated to be in the range of $130–$170 billion annually, we expect to see continued growth in project finance projects during 2019. Lending from development finance institutions (DFIs) continues to play a crucial role in project finance across Sub-Saharan Africa, particularly in the infrastructure sector. Power projects will also be a key driver of project finance work on the continent. Today, an estimated 600 million people in Africa lack access to electricity. This power deficient on the continent coincides with the increasing interest and investment in renewable energy sources, and thus we expect to see more renewable energy projects on the continent in 2019. In particular, we anticipate a higher volume of smaller scale power projects due to the demand for less complex projects that can be implemented quickly.
  7. Climate Change, Energy, and Business. Climate change will remain a key issue for countries and companies in 2019, as we continue to see impacts globally from fires in California to a faster melting glaciers in Antarctica. The Intergovernmental Panel on Climate Change has declared Southern Africa a “climate change hot spot.” In 2019, we expect there will be more focus on types of fuel for new projects that are being developed in Africa. The financial impacts and outlook for renewable (wind, geothermal, hydro, and solar) and thermal (gas, coal, diesel, and HFO) energy will be impacted by improvements in technology as well as regulatory and economic issues. The handling of these issues (price, intermittency, base load, land rights, and tax incentives) will be key to financing these projects. There will be increasing pressure from the development finance institutions to finance more renewables projects, but economic factors will determine most fuel sources such as fuel availability, grid stability and strength, and overall project cost. All of this will add complexity and time for completion of these projects. Notably, there are potential wind and geothermal projects in Kenya and Ethiopia, while South Africa is likely to implement the next round of bids for the REIPPP wind projects.
  8. South Africa. With elections expected in May, the Ramaphosa government needs to deliver on economic growth which the World Bank indicates was 1.3 percent in 2017, rising only to 1.4 percent in 2018, due to high levels of unemployment, low business confidence, and policy uncertainty. While the issue of expropriation without compensation looms large, UBS, the world’s largest wealth manager, believes that the South African government will manage the land reform issue “sufficiently well.” Reform of key parastatals including, Eskom and South African Airways, is a pressing matter. The ongoing prosecution of Jacob Zuma and his former officials will be a constant reminder of the corruption and lack of transparency that characterized his tenure. On the positive side, Ramaphosa’s campaign to attract $100 billion in new investments in five years is starting to show results. The South African government is also hopeful that last year’s Job Summit will be a stimulus for the creation of over 10,000 jobs.
  9. Ethiopia. Perhaps the most exciting leader on the continent, 42-year old Dr. Abiy Ahmed has raised expectations that Ethiopia will become the next economic powerhouse on the continent. Not only is Ethiopia the second most populous country, with 100 million people, but it is the fastest growing economy in Africa with a GDP of 8–10 percent. Abiy’s unprecedented reforms include normalized relations with Eritrea after 20 years of hostility, the release of thousands of political prisoners, lifting the state of emergency, and cutting the number of ministries from 28 to 20 while ensuring half of all cabinet positions are filled by women. Some of the challenges that Abiy will face in coming months include managing the influx of refugees from Eritrea (which are arriving at an estimated 10,000 per month), decreasing ethnic tensions and competing factions within the ruling Ethiopian People’s Revolutionary Democratic Front (EPRDF), and preparing for local elections this year and national elections next year. The World Bank’s commitment of $1.2 billion in budget support is an important vote of confidence in Abiy’s reform process from the international community.
  10. Nigeria. When elected in 2015, President Buhari promised to realize 10–12 percent annually GDP growth, secure the territorial integrity of the nation, and combat corruption. However, for 2019 the World Bank forecasts 2.2 percent growth for Nigeria, the Boko Haram insurgency in the northeastern part of the country persists despite significant progress, and the country continues to score lower than average for Sub-Saharan African nations on the Corruption Perception Index. These three fundamental issues will frame the presidential election scheduled for February 16, 2019. President Buhari may have an advantage given the power of incumbency but Atiku Abubakar, who was Vice President under President Obasanjo, will present a stiff challenge given his strong ties to business across the country. With 91 political parties and 35 presidential aspirants, there could be a run off given the spirited campaigns of Professor Kingsley Moghalu (former Deputy Governor of the Central Bank), and Donald Duke (a successful former governor of Cross Rivers State), and others.

A version of this blog was first published by African Law & Business. If you have questions about Covington’s Africa Practice, please contact Witney Schneidman at wschneidman@cov.com.

This post can also be found on CovAfrica, the firm’s blog on legal, regulatory, political and economic developments in Africa.

Will the 116th Congress Improve Retirement Security? Democrats Move to Shore Up Troubled Multiemployer Pension Plans   

With the 116th Congress recently underway, some lawmakers on Capitol Hill are making it clear that retirement security is one of their top priorities.  On Wednesday, February 6, 2019, the House Ways & Means Committee will hold one of its first hearings in the new Congress, which will examine an array of retirement security issues facing American works—including the growing solvency concerns facing certain multiemployer pension plans and their members.

In March 2018, the bipartisan Joint Select Committee on Solvency of Multiemployer Pension Plans convened to devise recommendations and legislative language designed to “significantly improve the solvency of multiemployer pension plans and the Pension Benefit Guaranty Corporation.”  But after holding a series of hearings throughout the Summer, the Joint Select Committee failed to reach an agreement by its November 30th statutory deadline.  As a result, the issues facing the multiemployer pension system—and the search for solutions—now return to the committees of jurisdiction in the U.S. House and Senate.

With Democrats in control of the House after the 2018 midterm elections, proponents of a federal loan program may find greater support in the lower chamber than in recent years.  Notably,  Rep. Richard Neal (D-MA), an active member of the Joint Select Committee and a strong advocate of a loan program for certain distressed plans, is now Chair of the powerful House Ways & Means Committee.  In the first week of the 116th Congress, Rep. Neal introduced the Rehabilitation for Multiemployer Pensions Act (H.R. 397), a bipartisan bill that would establish a new agency within the Treasury Department authorized to issue bonds in order to finance loans to troubled multiemployer pension plans.  One of the co-sponsors of H.R. 397 is Rep. Bobby Scott (D-VA), another member of the Joint Select Committee and the new Chairman of the House Education & Labor Committee, which also exercises jurisdiction over pension issues.  Under Chairman Scott, the Education & Labor Committee is expected to make the multiemployer pension solvency crisis one of its top legislative priorities.

In the upper chamber, Senate Democrats are taking steps to address the impending insolvency facing the United Mine Workers of America (UMWA).  On January 3, 2019, Sen. Joe Manchin (D-WV), along with five other Senate Democrats, introduced the American Miners Act of 2019 (S. 27), which would amend the Surface Mining Control and Reclamation Act of 1977 to transfer excess funds to the UMWA 1974 Pension Plan to fend off its insolvency.  The bill also would amend the Coal Act to include 2018 bankruptcies in the miners’ healthcare fix that passed in 2017, and would extend the tax that funds the Black Lung Disability Trust Fund at 2018 levels for ten years.  Absent congressional action, the UMWA 1974 Pension Plan is projected to become insolvent in 2022.

In light of the Joint Select Committee’s inability to reach consensus last year, it remains to be seen whether lawmakers can craft any multiemployer pension bill that can pass both chambers.  But as certain large multiemployer pension plans continue to advance closer to insolvency, the pressure on Congress to act will only increase.

The Week Ahead in the European Parliament – February 1, 2019

Next week, there will be committee and political group meetings in the European Parliament.

Most Members of the European Parliament (“MEPs”) will be preparing the plenary session that will be held from February 11 to 14, in Strasbourg.  However, interesting debates and hearings will take place.

On Monday, February 4, the Committee on Civil Liberties, Justice, and Home Affairs (“LIBE”) will debate the draft report on Preventing the Dissemination of Terrorist Content Online, prepared by MEP Daniel Dalton (ECR, UK).  MEP Dalton has expressed concern about the Commission’s proposal, which includes an obligation for social media platforms to take down flagged terrorist content within one hour.  The draft report reduces the scope of the proposed regulation to apply only to publically available content.  The one-hour deadline, however, remains in play.  The report also weakens the monitoring obligations for social media platforms but does not exclude any pro-active measures that platforms are required to take.  See the draft report here.

Also on Monday, the Special Committee on financial crimes, tax evasion and tax avoidance (“TAX3”) will hold a public hearing on Deutsche Bank.  The Committee will hear from representatives from BaFin (“Bundesanstalt für Finanzdienstleistungsaufsicht“) and Deutsche Bank. See the program here.

On Thursday, February 7, the Committee on Budget (“BUDG”) will hold a joint meeting with the Committee on Economic and Monetary Affairs (“ECON”) to discuss the draft report on Guidelines for the 2020 Budget – Section III (i.e., the Commission budget), prepared by MEP Monika Hohlmeier (EPP, DE).   According to the rapporteur, the political priorities in Section III for the next EU budget are, to keep financing research and innovation that enhance economic competitiveness and fuel economic growth, which will contribute to public security, citizens’ work and living conditions, and the fight against climate change. See the draft report here.

Also during that meeting, the Commission will present a proposal for a Council Regulation for Measures to Accommodate the Implementation and Financing of the General Budget of the EU post-Brexit.  The proposal attempts to avoid, or at least mitigate, any disruption in funding for recipients of EU spending programs and other actions when Brexit will occur.  The Commission also expects that this proposal will foresee in a financial settlement between the EU and the UK.  See the proposal here.

Meetings and Agenda

Monday, February 4, 2019

Committee on Culture and Education

15:00 – 18:30

Meeting

  • Establishing the European Solidarity Corps programme (COD) – adoption of draft report.
    • Rapporteur: Michaela Šojdrová (EPP, CZ)
  • Exchange of views with the Commission on a proposal for a legally binding act – Erasmus+ contingency planning for a no-deal Brexit

Joint meeting: Civil Liberties, Justice and Home Affairs and Legal Affairs committees

16:15 – 16:35

Vote

  • Justice programme (COD) – adoption of draft report.
    • Co-rapporteurs: Josef WEIDENHOLZER (S&D, AT) and Heidi HAUTALA (Greens/EFA, FI)

Committee on Civil Liberties, Justice and Home Affairs

15:00 – 17:30

 Debate (15.00-15.30)

  • Preventing the dissemination of terrorist content online (COD) – consideration of draft report.
    • Rapporteur: Daniel DALTON (ECR, UK)

 Votes (16.35-17.30)

  • Draft Agreement on Cooperation between Eurojust and Georgia (CNS) – vote on simplified procedure (Rule 50(1) – with amendment): report.
    • Rapporteur: Sylvia-Yvonne KAUFMANN (S&D, DE)
  • Council of Europe Convention for the protection of individuals: automatic processing of personal data. Protocol: ratification by Member States (NLE) – adoption of draft recommendation (consent).
    • Rapporteur: József NAGY (EPP, SK)
  • Establishing an exchange, assistance and training programme for the protection of the euro against counterfeiting for the period 2021-2027 (the ‘Pericles IV programme’) (COD) – adoption of draft report.
    • Rapporteur: Dennis de Jong (GUE/NGL, NL)
  • Visa Information System (VIS): visa processing (COD) – adoption of draft report.
    • Rapporteur: Carlos COELHO (EPP, PT)

Special committee on financial crimes, tax evasion and tax avoidance

18:30 – 20:00  

Public Hearing

  • Public hearing on Deutsche Bank

Tuesday, February 5, 2019

Special committee on financial crimes, tax evasion and tax avoidance

09:00 – 12:00

Public Hearing

  • Public hearing on the “Impact of tax evasion and money laundering on local real estate markets, in particular in European cities.”

European Parliament Press Seminar – The Digital Single Market – achievements and challenges

12:30 – 20:00

Special event

  • The EP press service is organizing a seminar for journalists on “The Digital Single Market – achievements and challenges”. MEPs will present rules adopted during this term and ongoing files in this area, including on copyright reform, as well as discussing challenges for the next Parliament, particularly on artificial intelligence.
    • Contacts: Eva EGIDO

Wednesday, February 6, 2019

European Parliament Press Seminar – The Digital Single Market – achievements and challenges

09:00 – 12:30

Special event

  • The EP press service is organizing a seminar for journalists on “The Digital Single Market – achievements and challenges”. MEPs will present rules adopted during this term and ongoing files in this area, including on copyright reform, as well as discussing challenges for the next Parliament, particularly on artificial intelligence.
    • Contacts: Eva EGIDO

Thursday, February 7, 2019

Committee on Budgets

09:00 – 11:30

Joint meeting with the Committee on Economic and Monetary Affairs

  • Guidelines for the 2020 Budget – Section III (BUD) – Consideration of draft report
    • Rapporteur: Monika HOHLMEIER (EPP, DE)
  • Proposal for a Council Regulation on measures concerning the implementation and financing of the general budget of the Union in 2019 in relation to the withdrawal of the United Kingdom from the Union (APP)
    • Presentation by the Commission

Committee on Agriculture and Rural Development

09:00 – 11:00

Meeting

  • Study on “A comparative analysis of global agricultural policies: lessons for the future CAP”. Presentation by Simone Sterly (IFLS – Institut für ländliche Strukturforschung, Germany) and Rael Jongeneel (Wageningen University and Research, the Netherlands). Study requested by the AGRI Committee, commissioned and managed by Policy Department B

Committee on Civil Liberties, Justice and Home Affairs

10:30 – 12:15

Votes (12.00-12.15)

  • Community statistics on migration and international protection (COD) – vote on the provisional agreement resulting from inter-institutional negotiations.
    • Rapporteur: Cecilia WIKSTRÖM (ALDE, SE)
  • Establishing a Community Code on Visas (Visa Code) (COD) – vote on the provisional agreement resulting from inter-institutional negotiations
    • Rapporteur: Juan Fernando LÓPEZ AGUILAR (S&D, ES)

 

UK Consumer Protection Regulator (“CMA”) Extracts Undertakings from Social Media Influencers to Increase Transparency in Sponsored Posts

On January 23, 2019, the UK’s Competition and Markets Authority (“CMA”) announced that it had secured undertakings from 16 social media influencers, including well-known names such as Ellie Goulding, Rosie Huntington-Whiteley and Rita Ora, that commit each influencer to increased transparency when they promote or endorse brands or services on social media on behalf of businesses.The CMA stressed that applicable UK consumer law requires that it be made clear when posts are sponsored (i.e., paid or incentivized).  The CMA also disclosed that it has sent warning letters to other (unidentified) influencers and celebrities, and indicated it will continue to consider the role of social media platforms in this issue.This enforcement action, together with the CMA’s recent success in court against secondary ticketing website Viagogo, and more recent threat to take Viagogo to court again, is evidence that consumer protection enforcement remains high on the CMA’s agenda.

Below, we summarise key elements of the undertakings in more detail, and also refer to further available UK regulatory guidance on how to advertise on social media.

Consumer Law and the Requirements of the Undertakings

The relevant legislation under which the CMA is seeking to enforce is the Consumer Protection from Unfair Trading Regulations 2008 (“CPRs”).  Under the CPRs, promoting a product in the media without disclosing that the promotion has been paid for by the trader of the product is a prohibited unfair commercial practice.  The undertakings secured by the CMA therefore require social media influencers:

  • For each post that endorses or reviews products:  to clearly identify (i) if the influencer has or will be paid for the post; and (ii) if the influencer has within the last year prior to the post received or been promised any payment by the relevant brand or business.
  • For each paid-for post:  to not (i) falsely claim or create the impression they are acting outside their profession or represent themselves as a consumer; or (ii) claim the product can achieve particular results where they have not personally used the product and achieved those results.

The undertakings also require influencers to comply with the UK Code of Non-Broadcasting Advertising, Sales Promotion and Direct Marketing, and in particular section 2 on the Recognition of Marketing Communications (which sets out rules to ensure marketing materials are clearly identified as such) and section 3 on Misleading Advertising (which sets out rules to ensure advertisements are not materially misleading), and associated guidelines published by the Advertising Standards Authority (“ASA”).

Further guidance

In September 2018, the CMA, ASA and the Committee of Advertising Practice (“CAP”), published guidelines for social media influencers on advertising.  The guidelines specify which rules apply to advertising on social media, and which social media posts will be deemed advertising.  The guidelines also illustrate how social media influencers can make clear to consumers that a post is sponsored, e.g., by including labels such as “#Ad” or “Advertising”.  The guidelines warn against using “riskier labels” such as “Sponsor”, or “in association with,” or simply mentioning the brand name.

The CMA has also published further guidelines for social media influencers on transparency with followers.  In the guidelines, the CMA sets out examples of practices which it does believe sufficiently identify the post as sponsored, but also practices that the CMA considers do not go far enough.  The CMA notes that the use of the tag “#ad” is valid, but warn that the tag should not be “hidden at the end of or among other text and/or hashtags.”  This suggests the CMA may not consider the current (frequent) practice, of merely putting “#ad” at the end of each sponsored post description (often after a string of other tags), as sufficient.

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