2020

When is an invention disclosure or patent application a trade secret?

Philip Alford, MJLST Staffer

Patents and trade secrets are often presented as a dichotomy of legal protections, distinguished by disclosure versus secrecy. Under the patent bargain, the government offers patent protections in exchange for the public disclosure of new and useful inventions. 35 U.S.C. §101. Various trade secret protections, on the other hand, are available when a party has suffered harm from the misappropriation of secret information. See, e.g., 18 U.S.C. §1863 and Minn. Stat. § 325C et seq. While the two areas of law are complementary, they do not perfectly align. Although trade secrets generally refer to information, this information can be embodied by a patented article, a method, or in one case, a pineapple. See Del Monte Fresh Produce Co. v. Dole Food Co., 136 F. Supp. 2d 1271 (S.D. Fla. 2001).

Trade secret protections are lost as soon as the material is disclosed to the public, including the publication of patent applications by patent offices occurring 18 months after first filing. This is the case even if the patent application never matures into a patent. Inventors should be aware that giving up secrecy in exchange for pursuing a patent is not a guaranteed exchange. To obtain a patent, inventors need to convince the Patent Office that their invention is (1) new, (2) a useful and non-obvious contribution to the art, and (3) described in sufficient detail so that others would be able to make and use the invention. 35 U.S.C. §§101, 102, 103, 112. For this reason, inventors should undertake at least a preliminary analysis to determine whether the requirements for a patent are reasonable satisfied before making any decision to give up potential trade secrets. This analysis would typically involve finding a patent attorney, who can together with the inventors to conduct a search, review for potentially relevant art, and best understand the advantages of the invention before drafting the patent application.

Trade secret protection cannot be assumed as a default. Not all secret inventions are eligible for trade secret protections—even inventions that would otherwise satisfy the requirements for a patent. A secret invention is only eligible for trade secret protection if (1) it is secret, i.e., not generally known or readily ascertainable;  (2) it confers an economic or competitive advantage; and (3) it is subject to reasonable efforts to maintain secrecy. See 18 U.S.C. §1863 and Minn. Stat. § 325C et seq. If inventors are considering whether to forgo filing a patent application, or abandon an unpublished application in favor of maintaining secrecy, the inventors must consider whether the resulting secrecy will, in fact, afford any trade secret protections at all. On one hand, a patentable but unpublished disclosure will typically satisfy the secrecy requirement if it also satisfies the novelty and non-obviousness elements of patentability. Similarly, the type of subject matter for which a patent is pursued is typically of the type that would confer an economic or competitive advantage if withheld from competitors. On the other hand, trade secret protections require reasonable efforts to maintain trade secrecy. No part of patentability imposes a similar requirement.

The reasonable effort requirement for trade secret protection is not as likely to be satisfied in the normal course of invention. What exactly is meant by “reasonable efforts” in a trade secret context? Reasonable efforts differ based on the nature of the information, the field of endeavor, and the risks to secrecy. Generally, to show reasonable efforts, parties should plan in advance to protect their secrets, for example, by using confidentiality agreements, internal employee policies, vendor policies, and electronic information policies. Such policies should be monitor compliance, remind employees that information is secret, and limit access to the secret information, e.g., via locks, passwords, and security. The extent of effort deemed reasonable will be based on the value of the information, the cost of precautions, and the likelihood that secrecy will be lost. Maintenance of absolute secrecy is not required, nor is it necessary to take steps that will be ineffective to protect the secret. See E. I. du Pont de Nemours & Co. v. Christopher, 431 F.2d 1012 (5th Cir. 1970).

Inventors may intend to forgo patent or trade secret protection in favor of the other, only to subsequently learn that they lack the protection of either. Inventors and patent practitioners should be mindful that coverage gaps can arise due to the differing requirements for patent and trade secret protections.


COVID-19: Substantiating the Impacts of Environmental Racism

Jessamine De Ocampo, MJLST Staffer

The Coronavirus (COVID-19) Pandemic is highlighting the numerous socio-economic inequalities in America. Because of these inequalities minorities are dying at disproportionally high rates. In addition to various barriers to health care, minority communities are inequitably exposed to hazardous environmental conditions that may end up affecting their long-term health. Under-served communities, including communities of color and the poor, are disproportionately impacted by environmental problems. Under-served communities historically lack the political power to prevent new sources of pollution and eradicate existing ones. As a result, generations of inequity and unjust systems have placed certain communities at higher risk than others. For example, in Harris County, Texas, 40 percent of those who died from COVID-19 were African-American, though African-American’s accounted for only 20 percent of the county’s population. Similar COVID-19 fatality patterns can be seen in Georgia,  Detroit, Michigan, Minneapolis, Minnesota, and Chicago, Illinois. Environmental justice advocates have long argued that environmental racism is killing their communities, but COVID-19 brings new light into just how detrimental the severity of environmental racism can be.

Environmental justice advocates seek to shield low-income and minority communities from the worst impacts of air pollution and environmental degradation. A recent Harvard study analyzed thousands of US counties in order to find a link between air pollution and COVID-19 fatalities. The study reflects that coal plants, waste incinerators, refineries, landfills, mines, smelting plants, and other sites, often located in communities of color, have long emitted toxic pollutants into the water and particulate matter into the air, increasing air pollution which in turn leads to various pulmonary and cardiovascular diseases. These chronic health issues increase chances of contracting severe cases of COVID-19.

In Louisiana, between Baton Rouge and New Orleans, exists an industrial corridor stretching about 85 miles, containing more than 140 chemical factories and oil refineries. This area is commonly known as Cancer Alley. These chemical factories and oil refineries release large amounts of particulate matter, which has been listed as a known carcinogen by the International Agency for Research on Cancer. Cancer Alley is one of the most polluted places in America, and someone has died from cancer in almost every household in the area. In the community of Reserve, a predominantly African-American working class neighborhood nestled in the middle of Cancer Alley, the risk of cancer from air toxicity is 50 times the national average. Now, Cancer Alley has one of the highest COVID-19 death rates in the country.

Similarly, Native American Tribes have long held the burden of having their lands used for toxic dumping sites. Environmental injustice, among other facts, has led to varying risks of illness on Indian lands. Now, they are bracing for the worst impacts of COVID. Kevin Allis, chief executive of the National Congress of American Indians stated “When you look at the health disparities in Indian Country — high rates of diabetes, cancer, heart disease, asthma and then you combine that with the overcrowded housing situation where you have a lot of people in homes with an elder population who may be exposed or carriers — this could be like a wildfire on a reservation and get out of control in a heartbeat.” And then, there are the residents of Oakland, California where mainly low-income African American and Latino residents are exposed to a disproportionate amount of airborne toxins as compared to the rest of the surrounding Alameda County. East and West Oakland residents have higher rates of asthma, strokes and congestive heart failures and during the COVID pandemic, these communities are the hardest hit in Alameda County.

Robert Bullard, who some consider the “father of environmental justice” stated in a recent interview:

When you have poverty, lack of access to health care, [high rates of] uninsured, many who have no private automobiles and are dependent on the buses and public transportation, and neighborhoods in pollution sacrifice zones you’re going to get people who are vulnerable. The coronavirus is basically taking advantage of those vulnerabilities, and you’re seeing it play out in the deaths.

While the environmental movement has taken off in recent years with the growing certainty of climate change, environmental justice cases have almost slipped through the cracks. As organizations begin to plan for a new world shaped by lessons learned during the pandemic, the influence the environment has on health, and the disproportionate burden on minority communities, needs to bear a greater weight in our political discourse. As former democratic primary candidate and current Vermont Senator, Bernie Sanders stated, “access to a clean and healthy environment is a fundamental right of citizenship. To deny such rights constitutes an environmental injustice that should never be tolerated.” The death rates and disproportionate effect of the COVID-19 pandemic on minority groups only compounds the evidence that unhealthy environments are detrimental to society/humanity. In addition to monitoring the biological environmental consequences of our societies, we also need to be considering the social consequences.


A Rising Tool in International Climate Litigation: The Right to Life

Jessamine De Ocampo, MJLST Staffer

There has been a growing national and international trend placing environmental rights and environmental justice under the umbrella of human rights. The empirical data around climate change is vastly shaping the international human rights arena, allowing environmental rights to be considered and litigated amongst human rights. As of 2019, air pollution is estimated to have resulted in and continues to result in 7 million yearly premature deaths worldwide; of which 600,000 are children under the age of 5. Entire communities, particularly island nations, are being forced to relocate due to rising sea levels while climate variability and changing weather is resulting in severe food crises threatening food security.

Climate and environmental issues have been actively permeating the international human rights field. The UN Human Right Council entered a mandate for an investigation into the correlation between human rights and environmental rights, the Inter-American Commission of Human Rights commissioned their first special rapporteur on Economic, Social, Cultural and Environmental Rights, and the UN Human Rights Committee in a General Comment, recognized the relevance of climate issues in the context of the right to life. The Right to Life is a universally recognized fundamental human right. While it can be found in a multitude of international and regional doctrines, it is primarily referenced in relation to Article 3 of the United Nation’s Universal Declaration of Human Rights and Article 6 of the International Covenant on Civil and Political Rights. The right to life doctrine essentially states that every person has a right, protected by law, to live.

In the international courts, climate litigation cases have been decided under the Right to Life doctrine with growing success. A Pakistani farmer sued his country for failing to implement environmental legislation and won; a family of rural workers sued their home country of Paraguay for failing to protect them from severe environmental contamination in which the court held “the link between environmental protection and human rights is ‘undeniable.’ ” Finally, in December 2019, the Dutch Supreme Court held that the Dutch government must reduce emissions immediately in line with its human rights obligations.

As climate change and environmental justice concerns continue to pose an ever-growing multi-layered effect on our societies, these new tools may prove to be crucial in implementing liability. As the link tying climate change and human rights becomes stronger, individuals have more than before to establish a claim. The right to life doctrine can, and should, be used to enforce government liability for failing to regulate the harmful effects of climate change.


Coronavirus Accelerates the Switch to Remote Online Notarization

Stephen Wood, MJLST Staffer

The legal profession has been relatively quick to adapt to challenges posed by the COVID-19 pandemic. Despite widespread stay-at-home orders, technology enables lawyers and the courts to continue to conduct much of their business that has historically been required to be done in person. While telephonic U.S. Supreme Court oral arguments are unlikely to persist once things normalize, other changes may be here to stay. One example is the move to Remote Online Notarization. Official transactions such as the conveyance of real estate, granting of powers of attorney, and establishment of a prenuptial agreements must be certified by a notary for the purpose of preventing fraud and forgery. Before the pandemic, a majority of states still required this process to be conducted in person.

The first state to authorize RON was Virginia in 2011, and since then, twenty-one states had followed their lead. Nearly all the of the remaining states had laws introduced to authorize RON, but for one reason or another, they had not yet been passed. In the last few months, this has quickly changed. At least 44 states now authorize the process to be conducted remotely. Wisconsin is one state that has done so through state law rather than executive order. The Act, 2019 Wisconsin Act 125, was passed on March 3, 2020 and takes effect May 1, 2020. Until then, an emergency rule authorizes the same. However, there are limitations as to which documents apply. Meanwhile, the vast majority of states have authorized RON through executive orders or proclamations by their governors. Even before the pandemic, it was predicted that RON would become the norm, but COVID-19 is certainly speeding up the process.


COVID-19, Remote Technology, and Due Process in Administrative Hearings

Brent Murcia, MJLST Staffer

Wherever you look, it seems like COVID-19 is dominating all the headlines these days (even this blog!)—and with good reason. The pandemic is a public health crisis on a massive scale, forcing all of us to change our lives to “socially distance” and help “flatten the curve.”

As of April 7, 95% of Americans were under some sort of “stay at home” order. With life-as-usual on hold, many people are turning to technology to keep things running. For example, in Boston, some celebrated St. Patrick’s Day with virtual concerts. Some people  celebrated Earth Day by tuning into National Park webcams. And of course, everyone from Minnesota Law students to the UK Cabinet is holding meetings (and happy hours!) on Zoom.

The legal system, of course, is not immune from the effects of this pandemic. Staff at government agencies, private law firms, and nonprofits are working from home. Some state legislatures are allowing remote voting for the first time. Many prisons have suspended in-person visits, including legal visits. Courts across the country are closed, delayed, or operating remotely. In section 150002 of the recent COVID-19 relief bill (the “CARES Act”), Congress authorized emergency video and telephone hearings for a variety of court proceedings, including detention hearings and felony pleas and sentencing. Even the United States Supreme Court will be moving to argument over the phone in May.  

As with many things in society these days, a number of these changes would have been unthinkable two months ago. Who could have imagined that certain courts, many of which require paper filings and ban the use of electronic devices in courtrooms, would soon holdarguments via video conference? The Supreme Court itself has famously never allowed live broadcasts of arguments (a subject of considerable debate). But with arguments moving to the phone, the Court will now allow the public to listen in real time.

As one would expect, the rollout of these sudden changes has not been entirely smooth. In many courts, things have gone well, with only “momentary audio hiccups and minor glitches.” But in March, a D.C. Circuit judge was dropped from an argument and missed several minutes. Last week, a Florida judge complained of lawyers making court appearances shirtless or in pajamas. One Australian barrister described remote court hearings as follows: “The judge couldn’t see anyone; lines dropped out regularly; witnesses didn’t know where to go; … subpoenaed material could not be accessed by anyone; feedback made it impossible to proceed.”

Some of these problems are silly—in the grand scheme of things, we have bigger worries than appropriate Zoom dress codes. But others have the potential to fundamentally impact proceedings—possibly affecting parties’ due process rights. This blog post briefly explores some of the issues that COVID-19 has brought to the forefront, with a particular focus on administrative processes. (For a comprehensive listing of the ways in which different federal administrative agencies are holding their hearings, see this great blog post from the Yale Journal on Regulation).

 Remote Hearings—An Overview

Remote proceedings are not exactly new. Even before the pandemic took hold, CourtCall—a company that facilitates remote appearances—had hosted six million such appearances since 1996. Many courts have long allowed certain remote appearances (sometimes requiring the consent of the parties, sometimes not). According to the Administrative Conference of the United States (ACUS), some agencies already conducted thousands of video hearings a year even before the pandemic. Still, until recently, such appearances were the exception, not the norm. And the use of remote technologies has generated controversy, even before its sudden widespread adoption.

Problems with Remote Hearings

Some people have expressed skepticism about the use of remote hearings, emerging in part from evidentiary concerns. As the BBC recently reported, video calls can make it “harder to process non-verbal cues like facial expressions, the tone and pitch of the voice, and body language.” That BBC story also referred to a 2014 study which found that even a 1.2 second transmission delay on a videoconferencing system “made people perceive the responder as less friendly or focused.” These effects can matter, considering the importance of perception and non-verbal cues in courtrooms. Additionally, one 1996 study in the University of Michigan Journal of Law Reform (before the advent of video technology) found that “parties to telephone hearings are less likely to exercise their rights to submit evidence through witnesses and documents than are parties to in-person hearings.”

Remote hearings can be particularly problematic in immigration hearings, which often involve language interpretation and the recounting of traumatic events. In early March—even before COVID-19 closures began—immigration courts in Texas began a pilot program to hold more hearings for unaccompanied children over videoconference, attempting to reduce a backlog of cases. One immigration attorney, forced by the virus to work with clients remotely, described the difficulty of doing so: “[w]e’re asking kids to open up and talk about the most personal and traumatic experiences of their lives and not even be making direct eye contact with them.” Remote hearings can affect the outcome of cases; a 2017 Government Accountability Office (GAO) study found that video hearings caused difficulties with language interpretation and affected immigration judges’ assessments of respondents’ credibility. A study in the Northwestern University Law Review found that respondents in video hearings were more likely to be deported. The American Immigration Lawyers Association opposes the use of video hearings for immigration for these reasons.

Problems with remote hearings also arise in settings that require public participation—like rulemakings and permit applications. In Minnesota, for instance, the state Pollution Control Agency (MPCA) recently delayed publication of a proposed Clean Cars rule, recognizing the importance of in-person comment and“ensuring that the public has opportunity to participate in the rule-making process.” At the same time, the MPCA moved forward with public meetings about Clean Water Act permits for the controversial Line 3 pipeline project, holding the meetings over the phone. More than 1,600 people called into the meetings, but only 400 were able to speak due to high volume. Some local organizers collected video comments, attempting to put a face to the public input, and called for the agency to hold in-person meetings once the pandemic has passed.

Finally, depending on the circumstances, remote hearings can also run afoul of specific public process requirements and open meeting laws. Lawyers in New Jersey, for instance, have highlighted a number of legal concerns arising from virtual land use board hearings. Laws about when and how meetings may be held electronically vary state to state; and amidst the pandemic, governors and legislatures have taken varying steps to clarify that authority. In Minnesota, the state legislature amended the open meeting law to account for the pandemic, expanding the circumstances under which meetings may be held remotely.

Benefits of Remote Hearings

Despite all of these problems, some lawyers have actually long advocated for an increase in virtual hearings. One common argument is that online hearings can help improve access to justice, addressing backlogs of millions of cases in some courts and agencies. Some argue that our current legal process is built more around “serving a place than serving justice.” One paper surveyed a number of other reasons why remote hearings may help in some contexts. Remote hearings can help in international cases or cases where the parties and witnesses live far apart; they can help with safety and security for parties, witnesses, and judges; they can help alleviate scheduling issues; and they can help in cases where traveling to court presents a significant burden for an individual, perhaps for economic reasons or due to a disability. (For a thorough summary of some of the ways in which technology—not just remote hearings—can help improve access to justice, see this 2012 article in the Harvard Journal of Law & Technology). 

Further, while some arguments against remote hearings focus on the importance of non-verbal cues in proceedings, others have disputed that importance. Some research has pointed out that there can be as much pseudoscience as science in attempts to interpret witness behavior. Some have questioned whether witness demeanor is even useful at all for assessing credibility. And while non-verbal cues can and do shape judge and jury reactions, this may not always be a good thing—reactions to certain behaviors can be shaped by implicit bias, furthering racial and other disparities. More research is likely needed on whether these disparities are exacerbated or lessened by different types of virtual hearings.

Finally, remote court hearings can create significant cost savings. For example, according to ACUS, the Social Security Administration’s Office of Disability Adjudication and Review saved $59 million in 2010 from using video hearings. These savings matter to people who have to navigate the legal system. A 2014 NPR investigation found, for example, that “the costs of the criminal justice system in the United States are paid increasingly by the defendants and offenders.” Many defendants are required to pay hundreds or thousands of dollars in court costs, even for constitutionally required services. Reducing court costs could help lower fees, reducing the burden on low-income parties. Additionally, law firms are saving money from virtual hearings too, potentially reducing the cost of legal services and improving access to representation down the road.

The potential for improved access and reduced costs from virtual hearings is promising, but comes with an important caution. As British lawyer Richard Atkinson wrote for The Guardian in 2012: “A more efficient justice system is possible, but the government needs to recognise that speed does not always equate to efficiency and efficiency should never be promoted over justice.”

Looking Forward

 As the effects of social distancing wear on, many of us look forward to the day when we can finally go “back to normal.” Without question, it will be a happy day when we can be with our loved ones, our friends, and our coworkers again. Lawyers will also be happy to return to the office, meet with clients in person, and advocate in real courtrooms.

At the same time, questions about remote hearings will not go away. Looking backward, some litigators will likely contest whether certain remote hearings conducted during COVID-19 were permissible. Looking forward, others will use our social distancing experience to argue that we should expand or reduce the use of remote hearings in the future.

There are no universal answers to these questions—the appropriateness of remote hearings depends on the applicable laws and the context of the case. In some cases, remote hearings can adversely affect parties’ rights; in others, they can actually improve access to justice. As one English judge wrote recently, “[i]t remains the obligation of all involved and at all stages of the hearing, to continue to evaluate whether fairness to all the parties is being achieved. Fairness cannot be sacrificed to convenience.” Our task, in these unprecedented times, is to move forward as best and as fairly we can—and to learn from these new experiences to better inform our approach to technology in the courtroom in the future.


COVID-19: Detrimental to Humans, Beneficial to the Environment?

Janae Aune, MJLST Staffer

No one is a stranger to the virus that has quickly changed life from recognizable to socially distanced and isolated. COVID-19, generally known as coronavirus, has gripped the world since the end of 2019 when it was first discovered. The virus has caused cities and countries to shut down, people to self-isolate, and Purrell to experience an increase in demand like never before. With so many negative consequences of the virus, are there are any possible positives that could come from this? Some argue yes –look at the environment.

COVID-19 Generally

Coronaviruses are not uncommon or unknown in the world. Every person has likely had one type of coronavirus in their life as these viruses are responsible for the common cold. The novel coronavirus currently gripping the world is not like other common coronaviruses’ however. The CDC has dubbed the disease COVID-19 because of the novelty and its discovery in 2019. Common symptoms of COVID-19 are fever, dry cough, and shortness of breath. Because these symptoms are similar to other coronaviruses and common allergies, many have experienced difficulty in properly detecting early COVID-19 symptoms. COVID-19 becomes even harder to accurately detect because some who have been infected or exposed to the disease are asymptomatic and may never know they had the virus.

COVID-19 was first discovered in Wuhan, China back in November 2019. Many other people recognize the area of discovery from the SARS outbreak back in the early 2000’s. Both of the diseases have been traced back to the wet markets in China housing wild animals being sold for food. For more information on the background of these markets in China see the short Vox documentary discussing these markets and the roots within Chinese society. While the first case was discovered in China, the disease has now spread across the world affecting every continent except Antarctica.

Spread of COVID-19

Much of the spread of COVID-19 around the world is  attributed to international travel. Since the discovery of the virus, many countries have gone on social distancing and lockdown orders to slow or prevent community spread of the disease. Even with these measures, some countries like the United States have yet to hit their peak number of cases. Countries like Spain and Italy have been hit the hardest in the European Union, however the situation is hoped to be improving soon. South Korea was hit particularly early, however given the government’s intense response with testing the country was relative successful in slowing the spread of the disease. The travel industry has taken a large hit from the disease with many not traveling and some countries shutting down airports and banning flights from certain areas of the world.

Within the United States in particular some states have yet to practice social distancing effectively. Big cities like New York City, Los Angeles, and Washington D.C. have been on shelter-in-place orders for multiple weeks with little sign they will end soon. New York City in particular has been hit hard with deaths increasing every day and hospitals becoming over capacity. This week (April 6, 2020) is expected to be the peak week of deaths, however some experts speculate the number will continue to grow after this week. Many have been critical of the response of the government in the United States in not taking the disease seriously when it was first discovered and properly preparing the country, while others have found the government’s response adequate.

Does the environment benefit from COVID-19?

COVID-19 has dramatically changed human life from what it was at the beginning of the year, and usually for the worst. COVID-19 has not only changed human life however. With most of the world being told to stay inside or practice social distance, environments, cities, and ecosystems around the world have experienced an abrupt departure from how life used to be. The canals of Venice have cleared up with fish returning. Goats have roamed back into cities in Europe where tourists usually dominate. City skylines previously blocked by smog are now clearly visible. Research shows the changes big cities have experienced due to the decrease in air travel with major cities like Los Angeles having dramatically different air pollution rates. Is it possible that COVID-19 will have a lasting positive impact for the environment? The answers are split.

In addition to these obvious positive impacts, some argue the benefits extend beyond the cosmetic. Lower levels of CO2 in the air can contribute to decreasing how often people experience diseases. Greenhouse gasses suppress the atmosphere and air around people and decreasing those levels can improve air quality and, in turn diminish how often people experience some diseases.

Even given the positive impacts, some worry the impact will only be temporary. UN officials argue exactly that. While the rebuilding efforts have not begun, one UN official argues once they do, sweeping environmental policy changes are needed in order to maintain the positive impact. Without these radically different policies, the positive impacts currently happening will be fleeting and unsustainable. Additionally, the official argues sweeping policy changes and increased spending for green energy and technology will lower the possibility of diseases spreading like this again in the future.

While some argue the deadly disease has created positive consequences for the environment, others feel very differently. Many states and countries have put their recycling programs on hold to contain the spread of the virus. Additionally, many retailers, grocery stores, gas stations, etc. have banned the use of reusable cups to eliminate the amount of potential contamination. This means more plastic, Styrofoam, etc. is being used on a daily basis around the world. Even online retailers have arguably contributed to the negative environmental causes by shipping more than usual due to people being at home and shipping things in multiple containers rather than consolidating into fewer boxed. Finally, many legislatures and governments have put serious climate legislation on the backburner to deal with the COVID 19 crisis. This could stall progress and cause delays in legislation and projects that had been started prior to the pandemic.

 


Boeing Bailout: 737 Max Crashes and the Coronavirus

Bernard Cryan, MJLST Staffer

Boeing Overview

Boeing plays a major role in the aerospace industry—both domestically and internationally. Boeing employs over 160,000 people worldwide and had a revenue of $76 billion in 2019. According to Forbes’ 2019 Fortune Global List, Boeing is ranked as Fortune 100 company. In fact, Boeing is America’s largest manufacturing exporter. Boeing’s business operations are organized into three units: Commercial Airplanes; Defense, Space & Security; and Boeing Global Services. Boeing’s Commercial Airplanes division is responsible for producing “almost half the world fleet” with more than 10,000 Boeing-built jetliners in service worldwide and “about 90% of the world’s cargo is carried onboard Boeing planes.”

737 Max Crashes

Boeing’s popular commercial airplane—the 737 Max—was recently involved in two deadly crashes. In October 2018, 189 passengers were killed on a Lion Air flight taking off from Indonesia. Again, in March 2019, 157 passengers were killed on an Ethiopian Airlines flight just minutes after takeoff. In response, Boeing grounded all 737 Max airplanes around the world and created a $100 million relief fund “to meet the family and community needs of those affected by the accidents.” Nevertheless, Boeing has received harsh criticism and scrutiny over deficiencies in its product and training. The 737 Max airplanes are still not cleared to fly causing Boeing customers to revise or even cancel orders. Certain airlines have also demanded compensation from Boeing for flight cancellations that resulted from the grounding of 737 Max airplanes. Boeing’s stock price fell after the crashes and Boeing’s revenue fell from $101 billion in 2018 to $76 billion in 2019. Boeing even replaced its CEO after he was unable to stabilize the company following the crashes. In sum, the 737 Max crashes have forced Boeing into a vulnerable financial position.

Coronavirus

The recent COVID-19 outbreak has posed additional challenges for Boeing and the entire aerospace industry. Boeing has publicly acknowledged the struggles of the entire industry caused by the coronavirus. For example, coronavirus’ impact on travel has forced American Airlines to fly its first cargo-only flight in 36 years. Boeing is directly impacted by the coronavirus because struggling airlines are not currently in the position to place orders for new airplanes.

Government’s Response

Although there is fierce competition amongst airlines, there is little competition in the manufacture of commercial airplanes. Boeing and Airbus, a European company, are the two main global suppliers of large commercial aircraft and have almost complete market power. President Trump has recognized Boeing’s indispensable role in keeping America competitive in the global industry and has recently stated, “Yes, I think we have to protect Boeing. We have to absolutely help Boeing.” Boeing has publicly expressed support for the government’s plan to bailout the aerospace industry.

Boeing is requesting a bailout of the aerospace industry in the amount of $60 billion. Boeing has suspended paying dividends and CEO Dave Calhoun has given up his pay temporarily. Additionally, United Airlines has threatened to cut jobs if the bailout relief is not passed by Congress. The aerospace industry wants help from the government. Some, however, caution against using the term ‘bailout’ for this type of situation because the airlines did not cause the hardship resulting from the coronavirus. Although Boeing and the airlines are not responsible for the coronavirus, they are at least partly responsible for their current inability to survive through these challenging times—Boeing and the airlines have spent billions of dollars in recent years buying back their own stock. For example, airlines have spent $42.5 billion on buy backs between 2014 and 2019 which is almost identical to the amount the industry is now requesting from the government.

The Bailout and The Takeaway

A government bailout can be in the form of legislation providing money or resources to a company or even an industry to help that company or industry avoid bankruptcy. For example, Congress approved a $15 billion bailout to the airlines in response to the 9/11 terrorist attacks. Another example is the Emergency Economic Stabilization Act of 2008 where the government provided bailout relief to banks after the mortgage crisis. AIG initially received an $85 billion loan (later receiving more money totaling $150 billion) from the Treasury in exchange for 79.9% equity in AIG. The loan was to be repaid with interest; the U.S. government and taxpayers eventually made $22.7 billion from interest payments.

A government bailout of the aerospace industry appears imminent. Boeing is likely to be considered “too big to fail.” The main questions are how much money will go to Boeing and the aerospace industry, in what form, e.g., debt or equity, and what strings will be attached to that money. Will the government acquire some ownership of Boeing as they did with AIG? Boeing CEO has said Boeing may reject any relief from the government if the government demands stake in the company. Will Boeing be required to change any of its Commercial Airplane division business practices? Will there be more government oversight of Boeing’s operations? Will Boeing be required to cut emissions from its planes to help protect the environment? The aerospace industry bailout will be interesting to monitor as things should come together quickly in the next few weeks, or even days.


Can the Legal System Help Combat COVID-19

Amanda Jackson, MJLST Staffer

As the novel coronavirus, COVID-19, continues its global rampage, the United States has been hard hit.  Now third with respect to number of new cases, there is little evidence to show that the case count will decrease any time soon.  If Italy provides any indication of what is to come, the United States is only going to be hit harder by the life-threatening virus.  Both federal government and local governments have taken drastic measures to combat the spread of COVID-19, including state-wide shelter-in-place orders, closing schools and universities, banning dining in at bars and restaurants, and moving non-essential businesses to work-from-home models.

As the confirmed cases continue to rise, so does uncertainty and uneasiness among the nation and the world as a whole.  What will fix this crisis?  How long will these measures be in place?  How many more people will get sick and potentially pass away from the virus?  What will happen to the economy?  Will my loved ones be okay?  The questions never seem to end.  Luckily, however, there are some answers as to how different laws, administrative agencies, and regulations in place in the United States can aid in the fight against the quickly spreading coronavirus.

First, the Defense Production Act (DPA) can alleviate shortages in medical equipment.  As concern about the novel virus itself grows, concern for the availability of necessary supplies and equipment also seems to grow at record speeds.  A lack of masks and other personal protective equipment for healthcare workers, a shortage in ventilators and beds for sick patients, and even a need for healthcare workers and hospital space are becoming more prevalent as the COVID-19 crisis continues.   The DPA, a Korean War-era law, enables the federal government to require private companies to provide for the needs of national defense.  The DPA may not be able to satisfy the need for healthcare workers and hospital space, but it can allow the federal government to direct manufacturers to produce the desperately needed medical equipment for healthcare workers and patients.  However, the President must invoke the DPA in order for it to make a difference, and as of right now, the DPA has not been invoked to aid in the fight against coronavirus.  Although some companies have increased or altered production to help restock the necessary equipment, it remains unclear whether that alone, without invoking the DPA, will be enough to meet the needs of the United States in the coming weeks.  Even so, the DPA provides a robust option to fulfill the needs of the nation in the fight against the pandemic.

Second, the Federal Drug Administration’s (FDA) and the National Institute of Health’s (NIH) ability to fast track vaccines and therapeutic drugs can speed up development of a COVID-19 vaccine or therapy.  Called an Emergency Use Authorization (EUA), the FDA is able to authorize emergency use of an unapproved product or an unapproved use of an approved product under a declaration of a public health, domestic, or military emergency, or a material threat.  The evidence required for approval of an EUA is that the product “may be effective” to treat, diagnose, or prevent the conditions associated with the declaration.  This is a lower standard than the “effectiveness” standard used for typical FDA approvals, a process that takes on average twelve years to go from a new drug in a laboratory to a drug on a pharmacy shelf.  In determining whether to approve the EUA, the Commissioner has to determine that the known and potential benefits of the product outweigh the risks associated with the product, while also considering the threat prompting the emergency declaration.  Fortunately, the FDA has already issued multiple EUAs with respect to the novel coronavirus, such as for tests to detect COVID-19.  The FDA has also instituted flexible measures outside of EUAs that enable states to take a more prominent role than typically allowed.  For example, the FDA is now allowing states to approve COVID-19 tests without requiring FDA approval or an EUA.  Moreover, NIH is also fast-tracking development of a coronavirus vaccine, with a Phase I clinical trial of the vaccine candidate having already begun.

Third, declarations of major disaster areas will open up emergency funds to help states and local governments respond to an outbreak.  Major disaster area declarations are often requested when a disaster exceeds the response capabilities of state and local governments under extremely severe circumstances.  Major disaster area declarations enable a wide range of federal assistance for both individuals and public infrastructure.  With respect to coronavirus, the President has already declared New York and other hard-hit states as major disaster areas, the first time in United States history that a major disaster has been declared for a public health threat.  The declaration enables the federal government to pay for a majority of the states’ costs and mobilize the Federal Emergency Management Agency (FEMA) to deploy assistance in the state, among other methods of assistance.

Fourth, shelter-in-place orders by local governments may reduce the spread of the virus.  Shelter-in-place orders mandate that residents stay in their homes, except for essential trips (e.g., to the grocery store or a pharmacy).  Many shelter-in-place orders also force all non-essential businesses to close.  These orders are generally constitutional under a state’s police power.  At least eight states and many cities have issued shelter-in-place orders as a means to flatten the curve and reduce the impact of coronavirus on society and the healthcare system.  Some law enforcement officials appear to be taking the orders very seriously, breaking up parties in violation of the shelter-in-place rules or stating that the orders will be “strictly enforced.”

Moreover, there are multiple bills working their way through the federal government that will hopefully provide some more answers and relief for the American people.  Although those options are only a few of the tools in the government’s toolbox, if used properly, they can help the nation combat COVID-19.


#ChonkyBois: When It Comes to Running Shoes, How Thicc is too Thicc?

Molly Woodford, MJLST Staffer

Early last November, I wrote a blog post about the developing controversy surrounding the Nike Vaporfly NEXT%. At that time, the IAAF (track and field’s world governing body, which has now rebranded itself as “World Athletics”) had just announced that it was assembling a working group to examine the Vaporfly controversy and “find the right balance in the technical rules between encouraging the development and use of new technologies in athletics and the preservation of the fundamental characteristics of the sport: accessibility, universality and fairness.” The IAAF also announced that it expected the working group “to report back by the end of the year.”

True to its word, on January 31, 2020, the IAAF promulgated new rules governing footwear. Among other things, the new rules stated that all racing shoes could have a sole no thicker than 40mm and contain no more than one carbon plate. In addition, in order to prevent athletes from racing in prototypes that might otherwise comply with the rules, “any shoe that is first introduced after [April 30,] 2020 may not be used in competition unless and until it has been available for purchase by any athlete on the open retail market (i.e. either in store or online) for at least four months prior to that competition.” Since the first day of Olympic track and field is, for now, scheduled to begin on July 31, 2020, and the Olympics marathons are scheduled to take place on August 8 and 9, any racing shoe used in the Olympics must, therefore, be released for sale to the general public by the end of April.

The IAAF president, Sebastian Coe, stated that:

As we enter the Olympic year, we don’t believe we can rule out shoes that have been generally available for a considerable period of time, but we can draw a line by prohibiting the use of shoes that go further than what is currently on the market while we investigate further.

True to Coe’s words, under the new rules, the Nike Vaporfly NEXT% is legal, as is its successor, the AlphaFly Next%, which was announced by Nike on February 5, 2020, less than a week after the new IAAF rules. The “stack height,” or “the amount of material between your foot and the ground” of the AlphaFly is 39.5mm, versus 37mm in the Vaporfly Next%. By way of comparison, the stack height of the Nike Zoon Streak 7, a conventional marathon racing flat, is 26mm. Thus, the Next% line features a sole that is approximately 50% thicker than its traditional counterparts. “Running twitter” has taken to referring to the Alphafly as #ChonkyBois.

Nike made a limited number of Alphaflys available to Nike Plus members on February 29, 2020, to coincide with the United States Olympic Marathon Trials. In a genius marketing coup, Nike made the Alphafly available, for free, to all athletes competing in the Olympic Marathon Trials. According to Runner’s World, about 25% of competitors opted to wear the Alphafly, even though those who are not sponsored by Nike had just received the shoes days before the race (you generally do not want to try new things during a marathon, like shoes or nutrition). Runners were willing to take this risk because, while the Vaporfly boosts performances by ~4%, the Alphafly may help twice as much.  The previously-unheralded Jacob Riley intentionally chose to forgo pursuing sponsorship until after the Olympic Trials so that he could race in the Alphafly. His gamble paid off, with a personal best and an Olympic berth.

Nike’s competitors are working to match the effectiveness of the Alphafly, but they’re not there yet. With its legality no longer in doubt, the Alphafly is here to stay, for better or for worse.


Davos Attendees Seek Political Cover under 1 Trillion Trees

Noah Cozad, MJLST Staffer

At the World Economic Forum (otherwise known as Davos), the most popular subject was something called the Trillion Tree Initiative to help fight climate change. Nearly every attendee at the forum committed to the initiative. Including President Trump, who in the past has forcefully denied climate change’s existence, calling it a “hoax” invented by the Chinese. President Trump even mentioned the initiative in the State of the Union, and a GOP representative has introduced a bill that would commit the United States to planting 3.3 billion trees every year for the next 30 years. Davos describes the initiative as a “mass-scale nature restoration,” that hopes to provide up to one-third of the emission reductions necessary for the Paris Agreement targets. Practically, the initiative seeks to provide a single platform for a variety of reforestation projects and to mobilize funds and support.  This initiative was started by the UN as part of the New Decade of Ecosystem Restoration, 2021-2030. The UN says the initiative “is about, conserving, restoring, and growing trees. Indeed, the goal of 1 trillion trees by 2030 includes conservation of existing trees (i.e. avoided deforestation), the restoration and natural regeneration of previously degraded forest lands, including actual reforestation and tree-planting schemes on suitable agriculture land, . . . as well as urban tree planting.”

The idea of planting 1 trillion trees comes from a controversial 2019 article in Science. The article finds that global tree restoration is currently one of the most effective carbon drawdown solutions. Accordingly, planting 1 trillion trees has the potential to store 25% of the current atmospheric carbon pool. The study focuses on reforestation, as opposed to afforestation which is planting trees where none were before. Critics have argued that this is an unreliable way to fight climate change and is not a meaningful substitute for cutting back on emissions. Further, it is a very slow solution, for example it takes 25 years for a tree planting project to offset a single commercial flight.

While it is undeniable that planting large amounts of trees will help with climate change, there are still many issues with this idea. The initiative seems like a silver bullet, relatively apolitical, and very easy for people to grasp onto and understand (unlike climate change, which as a whole is extremely complex). But herein lies many of the problems. For one the initiative completely shifted the focus of Davos away from proven solutions like carbon taxes. While carbon taxes are difficult and very political, a trillion trees is a good way for banks and pension funds, that are financially exposed to fossil fuel companies for $1.4 trillion, to act as if they’re doing something. Further, simply planting tons of trees might be bad for an individual ecosystem. In fact the Coalition for Environmental Justice in India has had to ask Leonardo DiCaprio from going forward with a tree planting project as ecologists say the current plan will dry up rivers, harm the floodplains, destroy biodiversity, and eventually make the area uninhabitable for the trees in the first place. The UN itself has said that the project is NOT a silver bullet and should instead be one smaller part of a larger plan.

Perhaps the biggest issue is that the initiative provides political cover to those making climate change worse and distracts from better solutions. Absent other climate policies, the United States would need to plant an area over twice the size of Texas to offset emissions. Trees play a critical role in climate change, but the best way to utilize them is to protect current forests and let them grow back naturally. And the best way to do that is to provide protections for the indigenous peoples living there, according to University of Minnesota Natural Resources Professor Forrest Fleischman. Professor Fleischman stated, “people are getting caught up in the wrong solution. . . . Instead of the guy from Saleforce saying, ‘I’m going to put money into planting a trillion trees,’ I’d like him to go and say, ‘I’m going to put my money into helping indigenous people in the Amazon defend their lands.’. . . That’s going to have a greater impact.”

Overall, the Trillion Tree Initiative is a good start, but should not be allowed to provide political cover for those invested in fossil fuels, and climate deniers. For example, the folks at Davos continue to support President Bolsonaro of Brazil, who has rolled back protections of indigenous people and the Amazon, one of the world’s largest carbon sinks, thus allowing large swathes of the tropical forest to burn and the people who live there to be killed. The trillion tree initiative should not distract us from such actions that ultimately make climate change worse. Instead of one, simplistic solutions, we should push for multiple, better solutions such as protecting public lands, forests, and the rights of the indigenous peoples who live there and protect the environment, along with planting more trees.