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.
It seems scarcely a week goes by without a headline blaring news of a major cybersecurity breach. And with ongoing revelations about the data-tracking activities of the National Security Agency, the public isn’t growing less concerned about privacy. So it’s no surprise Congress has pressed the Securities and Exchange Commission on cybersecurity.
What does that mean for corporate disclosures? “The SEC continues to hear from Congress on cybersecurity disclosures, so it will continue to focus on the issue,” says David Lynn, a partner in Morrison & Foerster’s Washington office and co-chair of its Corporate Finance Practice. “That means companies need to be vigilant about their disclosures.” Continue Reading
The German Federal Government has given an important insight to its plans and future measures regarding taxation of the start-up- and VC-ecosystem in Germany by officially answer to a parliamentary request by several members of parliament. These plans are not only important for young companies and their investors, but also for Germany’s attractiveness as a start-up destination itself. This is especially true considering that Berlin is becoming Europe’s top start-up destination and the call for governmental support for the German start-up scene increased recently.
One encouraging trend set out in the Government’s recent statements is the announced tax exemption of the so-called INVEST-Subsidy for Venture Capital (INVEST – Zuschuss für Wagniskapital). Under this program, business angels get 20 percent of their investment reimbursed from a special governmental fund if certain conditions are met. Whereas currently such subsidy triggers German income tax, in the future its incentive effect as a tax-exempt gain will be much higher. Another positive highlight is that the government announced to adhere to the concept of a lower taxation of “carried interest” received by VC-fund initiators (40% exemption from income tax). Continue Reading
When a non-practicing entity (NPE) accused 16,000 small businesses of violating its patent by merely emailing scanned documents, the New York attorney general cracked down, forcing a settlement. Then the FTC threatened to sue for deceptive trade practices—prompting the NPE to file a preemptive suit against the FTC.
As NPEs (sometimes known as patent trolls) have grown more audacious, the drumbeat for action against them has grown, notes Scott Llewellyn, deputy chair of Morrison & Foerster’s IP Litigation Group. There’s been an onslaught of media coverage and a flurry of federal legislation, with one House bill passing by a large margin in December. In January, President Obama urged passage of a bill to reduce “needless litigation,” and the White House announced further executive actions. Continue Reading
Modern Technology has increasingly blurred the line between business and personal lives, thanks in large part to social media that can broadcast employees’ views to friends and the public in a heartbeat. Companies are increasingly tempted to move into what may be considered “personal” domains in order to maintain their reputation or control over employees’ time. And that has translated into some serious debates in courtrooms and legislatures over the limits of corporate conduct.
For example, several states have passed laws restricting access to the social media accounts of employees and job applicants. Several federal bills with similar requirements are in the works. Typically, these laws forbid employers from requesting the passwords to personal social media accounts. But some states also forbid employers from attempting to access the non-public sections of these personal accounts. Continue Reading