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MoFo Tech

A blog dedicated to information, trend spotting & analysis for science- & tech-based companies

Bribery, Twice Removed

Charles Duross is the head of Morrison & Foerster’s Global Anti-Corruption Practice. He is the former head of the Department of Justice’s Foreign Corrupt Practices Act unit, where he took a leading role in developing and implementing the government’s anti-bribery enforcement strategy. Here, he discusses how tech companies can avoid violating the FCPA.

We have been hearing about more companies running into problems related to the FCPA. Is this an increasing risk?

I don’t think bribery per se is increasing, but the risk of getting caught if you’re paying bribes is. The Department of Justice has been strengthening its FCPA enforcement for years. But at the same time, many countries are now part of the OECD [Organisation for Economic Co-operation and Development] Anti-Bribery Convention, and have created their own laws that are very much like the FCPA. Forty countries have signed on, the most recent one being Russia. The OECD’s Working Group on Bribery actively monitors enforcement of these laws, and there is a great deal of cooperation among countries about corruption cases. So enforcement is increasing— and not just by the U.S. government. Continue Reading

Government 2.0

With it spending up, federal agencies are finding they need to look outside their walls for qualified talent. This is presenting new public sector opportunities for private sector tech companies.

The U.S. federal government collects massive amounts of data. Everything from citizens’ health care information, details about nuclear power plants, and data on the U.S. electrical grid are gathered every day. With most agencies migrating to a cloud-based solution, securing the data and breaking it into manageable units has become a high federal government priority.

As a result, the 2014 Federal Budget allocates $75.9 billion to IT spending, and many federal agencies are continuing to turn to private companies for additional support to meet the demand. This presents private companies with a tremendous opportunity to gain new clients and contracts within various federal agencies.

“This is an area of the government that has been as affected by sequestration and reduced spending as other areas,” says Brad Wine, a partner in the Washington D.C. office of Morrison & Foerster. “Once a company is able to get its first government contract, especially with Homeland Security or one of the other three letter agencies and overcome barriers to entry in the federal sector, IT contracts generally and cybersecurity projects for the government in particular become a very lucrative area.” Continue Reading

Just What the Data Ordered

San Francisco-based software provider Splunk’s data collection and analysis product, Splunk Enterprise, was an almost instant hit upon its debut in 2006. The software, which collects and analyzes machine data generated by websites, applications, networks, and RFID assets, can identify traits like user transaction patterns and performance issues, making it useful for everyone from pizza companies to disaster relief agencies.

Companies can use Splunk Enterprise to identify fraudulent wire transfers while they’re happening, route telecommunication carrier calls more efficiently, understand order delivery delays, and improve dozens of other operations.

In its first five years, Splunk’s customer base swelled from 150 clients to more than 3,000. But it still relied exclusively on outside counsel to handle legal needs—until Splunk CEO Godfrey Sullivan met Lenny Stein. The former chief legal officer at winemaker Jackson Family Enterprises was introduced to Sullivan by mutual friends. Sullivan wasn’t looking for a GC, Stein says. But the two got along well, and within three weeks, Stein had joined Splunk. Continue Reading

Worn on the Sleeve

Watches that monitor sleep quality. Skullcaps that gauge head injury. An infant bodysuit that sends temperature and breathing updates to a mobile device. Ear buds that track your heart rate. These are just some of the innovations now emerging in the hot new field of wearable technology. Currently estimated at $1.6 billion, the wearable device market is expected to grow to $5 billion in revenue by 2016, according to Gartner. If upcoming releases like Google Glass (scheduled for mass distribution later this year) prove as popular as smartphones and tablets—whose combined revenue topped $66 billion in 2013, according to the Consumer Electronics Association—wearable devices stand to become a major new realm in technology.

But the technology is already garnering a lot of attention from lawyers and lawmakers with concerns about how the devices—and the information they collect—can be misused. Wearable devices are just one more example of how technology gets ahead of the law, says Gabriel Meister, a New York-based partner in Morrison & Foerster’s Technology Transactions Group. “Often, the legislative response to perceived risks is very blunt, until we figure out exactly what the risks are.” Continue Reading

Rooting Out Conflict Minerals

If your company manufactures consumer electronics, avionics, or any product incorporating even trace amounts of gold, coltan, cassiterite, or wolframite— including their derivatives, tantalum, tin, and tungsten—you may need to ask how well you know your conflict minerals story.

Under Dodd-Frank, public companies may soon be required to report on their use of any of these minerals originating from the Democratic Republic of the Congo and nine other African nations. “The SEC adopted the rule, but it has been subject to a legal challenge to the validity of its rulemaking,” says Morrison & Foerster securities partner David Lynn. “A decision was reached in April holding that the statute and the SEC rule violate the First Amendment of the Constitution. If the rule ultimately requires reporting, the practical implication is to be ready to tell your sourcing story.”

Compliance could be potentially costly and complicated. Lynn suggests that companies know the country of origin; ensure that downstream suppliers (including mines, smelters, and refiners) are conflict free; review and revise sourcing policies and contracts as necessary; and raise awareness of this issue with your entire supply chain.