' Benjamin Black | MTTLR

On August 13, 2018, the Foreign Investment Risk Review Modernization Act of 2018 (FIRRMA) became law, radically expanding the jurisdiction of the Committee on Foreign Investment in the United States (CFIUS). CFIUS is an interagency committee chaired by the Department of the Treasury that is authorized to review transactions involving foreign investment in the United States in order to determine the effect of such transactions on national security. FIRRMA’s Pilot Program, which became effective November 10, 2018, outlines 27 industries on which critical technology reviews will be focused. These industries include defense-related technologies, such as aircraft and missiles, as well as high-tech fields like computer and semiconductor manufacturing, telecommunications, batteries, and nanotechnology. The Pilot Program will remain in effect until the issuance of the official implementing regulations for FIRRMA, likely in February 2020. Historically, CFIUS review primarily covered mergers, acquisitions or takeovers that could result in foreign control of a U.S. entity and where notifying CFIUS of foreign investment was optional. Now any amount of investment (even non-controlling investment) in industries covered by the Pilot Program have required filings and civil penalties—the amount of which could approximate the entire value of the transaction. Additionally, FIRRMA expanded CFIUS review to include U.S. real estate transactions. Although Chinese investment in U.S. real estate has dropped dramatically since China enacted tighter regulations on outbound investments, expanded CFIUS review serves as another lever in limiting Chinese control of assets in the United States. This enhanced CFIUS review represents one of the strongest tools in the U.S. arsenal against China in the ongoing U.S.-China trade war. FIRRMA received bipartisan support in both houses of...

Qualcomm v. Apple : Why We Should Strengthen Trade Secrets on Programming Code

Qualcomm and Apple are embroiled in legal feuds all over the world, including multiple separate litigations in the United States. Although there are several suits, both sides are probably coordinating these myriad efforts to create a unified front. Late October 2018, San Diego Superior Court Judge Jacqueline Stern issued a tentative ruling that granted Qualcomm’s request to amend its breach of contract countersuit against Apple to include claims of misappropriation of trade secrets. Specifically, Qualcomm alleged that Apple stole its broadband chipset source code and other software tools, sharing them with Qualcomm’s competitor Intel. This one slice of the feud between Apple and Qualcomm can be traced back nearly two years. Apple accused Qualcomm of unfair royalties and eventually added “double-dipping” on patents by charging both a royalty for Qualcomm’s chipsets and a licensing fee for the patented technology. Qualcomm countersued when Apple and its Asian manufacturers stopped paying royalties. Qualcomm recently asserted that Apple owes it $7 billion in royalties already. In September 2018, Qualcomm moved to amend its original countersuit to add the allegation of trade secret violation. Since 2011, Qualcomm shared its trade-secreted source code with Apple to help Apple engineers optimize the integration of Qualcomm’s broadband chipset in iPhones for high-speed connection to cellular networks. In 2016, Apple started using Intel broadband chipsets in some of its iPhones while continuing to use Qualcomm’s as well. However, Qualcomm’s chips allowed for higher connection speeds including next-generation gigabit-per-second speeds while Intel’s lagged behind; some speculate that Intel may even be a full generation behind. In the past, Apple addressed this discrepancy by throttling Qualcomm’s chips to ensure...