Robert L. Boehm, New York City (Morton Stavis, William M. Kunstler, Center for Constitutional Rights, Michael Rattner, David Scribner, New York City, of counsel), for plaintiffs-appellants.
Joel Lewittes, Asst. Atty. Gen. (Louis J. Lefkowitz, Atty. Gen., State of New York, Samuel A. Hirshowitz, First Asst. Atty. Gen., New York City, of counsel), for the State defendants-appellees.
T. Gorman Reilly, Asst. U. S. Atty. (Whitney North Seymour, Jr., U. S. Atty., for S. D. New York, Michael D. Hess, Asst. U. S. Atty., New York City, of counsel), for defendant-appellee, H. Kenneth Schroeder, Jr.
Before SMITH, FEINBERG and MANSFIELD, Circuit Judges.
This appeal raises the question of whether the federal judiciary should, at the instance of victims, compel federal and state officials to investigate and prosecute persons who allegedly have violated certain federal and state criminal statutes. Plaintiffs in the purported class suit, which was commenced in the Southern District of New York against various state and federal officers, are certain present and former inmates of New York State's Attica Correctional Facility ("Attica"), the mother of an inmate who was killed when Attica was retaken after the inmate uprising in September 1971, and Arthur O. Eve, a New York State Assemblyman and member of the Subcommittee on Prisons. They appeal from an order of the district court, Lloyd F. MacMahon, Judge, dismissing their complaint. We affirm.
The complaint alleges that before, during, and after the prisoner revolt at and subsequent recapture of Attica in September 1971, which resulted in the killing of 32 inmates and the wounding of many others, the defendants, including the Governor of New York, the State Commissioner of Correctional Services, the Executive Deputy Commissioner of the State Department of Correctional Services, the Superintendent at Attica, and certain State Police, Corrections Officers, and other officials, either committed, conspired to commit, or aided and abetted in the commission of various crimes against the complaining inmates and members of the class they seek to represent. It is charged that the inmates were intentionally subjected to cruel and inhuman treatment prior to the inmate riot, that State Police, Troopers, and Correction Officers (one of whom is named) intentionally killed some of the inmate victims without provocation during the recovery of Attica, that state officers (several of whom are named and whom the inmates claim they can identify) assaulted and beat prisoners after the prison had been successfully retaken and the prisoners had surrendered, see Inmates of Attica Correctional Facility v. Rockefeller, 453 F.2d 12 (2d Cir. 1971), that personal property of the inmates was thereafter stolen or destroyed, and that medical assistance was maliciously denied to over 400 inmates wounded during the recovery of the prison.
With respect to the sole federal defendant,2 the United States Attorney for the Western District of New York, the complaint simply alleges that he has not arrested, investigated, or instituted prosecutions against any of the state officers accused of criminal violation of plaintiffs' federal civil rights, 18 U.S.C. §§ 241, 242, and he has thereby failed to carry out the duty placed upon him by 42 U.S.C. § 1987, discussed below.
"The Court's prior decisions consistently hold that a citizen lacks standing to contest the policies of the prosecuting authority when he himself is neither prosecuted nor threatened with prosecution. See Younger v. Harris, 401 U.S. 37, 42, 91 S. Ct. 746, 27 L. Ed. 2d 669 (1971); Bailey v. Patterson, 369 U.S. 31, 33, 82 S. Ct. 549, 7 L. Ed. 2d 512 (1962); Poe v. Ullman, 367 U.S. 497, 501, 81 S. Ct. 752, 6 L. Ed. 2d 989 (1961). Although these cases arose in a somewhat different context, they demonstrate that, in American jurisprudence at least, a private citizen lacks a judicially cognizable interest in the prosecution or nonprosecution of another." 410 U.S. at 619, 93 S. Ct. at 1149.
The broad reach of this language would, at first blush, appear to preclude the plaintiffs here from seeking to contest the nonprosecution of third parties they accuse of criminal conduct. However, the present case is in some respects distinguishable from Linda R.S. Unlike the mother there the inmates here might be said to have sustained or be immediately in danger of sustaining direct personal injury as the result of nonenforcement of the criminal laws against the accused state officers. See 410 U.S. at 619, 93 S. Ct. 1146; Massachusetts v. Mellon, 262 U.S. 447, 488, 43 S. Ct. 597, 67 L. Ed. 1078 (1923). They allege that at least some of them suffered direct physical injury at the hands of those they seek to have prosecuted and that if the state officers accused of criminal conduct are not prosecuted, such conduct will continue.
Thus a more immediate and direct danger of injury resulting from nonenforcement is presented here than in Linda R.S., where the Court stressed that the only result of the relief sought by the illegitimate child's mother would be the jailing of the child's father, not the support of the child. Where a successful prosecution, however, would serve to deter the accused from harming the complainant rather than merely supply a penal inducement to perform a duty to provide assistance, the complaining person does show a more direct nexus between his personal interest in protection from harm and the prosecution. But in the present case this rationale in support of standing assumes that injunctive relief, which we conditionally authorized in Inmates of Attica Correctional Facility v. Rockefeller, supra, 453 F.2d at 22-25, restraining physical abuse, torture, beatings or other forms of brutality, or threats of such conduct, is ineffective to protect the plaintiffs from harm.
It may also be argued that since 37 inmates have been indicted for crimes relating to the events at Attica in September 1971, without any indictment having been filed against any of the accused state officials, the complaint alleges a sufficient threat of selective and discriminatory prosecution of the plaintiff inmates to meet the standing requirements discussed in Linda R.S. v. Richard D., supra. On the other hand, the challenge in the present case is not to any criminal statute, as construed, but to the failure of the prosecuting authorities to enforce the criminal laws against a particular group of individuals.
Thus in order to determine whether plaintiffs have standing to sue we would be required to resolve troublesome questions. However, we need not decide the issue of standing because we believe that even if they may properly present their claims for judicial resolution, they seek relief which cannot, in this case at least, be granted either against the state or federal prosecuting authorities.
With respect to the defendant United States Attorney, plaintiffs seek mandamus to compel him to investigate and institute prosecutions against state officers, most of whom are not identified, for alleged violations of 18 U.S.C. §§ 241 and 242. Federal mandamus is, of course, available only "to compel an officer or employee of the United States . . . to perform a duty owed to the plaintiff." 28 U.S.C. § 1361. And the legislative history of Sec. 1361 makes it clear that ordinarily the courts are " 'not to direct or influence the exercise of discretion of the officer or agency in the making of the decision,' " United States ex rel. Schonbrun v. Commanding Officer, 403 F.2d 371, 374 (2d Cir. 1968), cert. denied, 394 U.S. 929, 89 S. Ct. 1195, 22 L. Ed. 2d 460 (1969). More particularly, federal courts have traditionally and, to our knowledge, uniformly refrained from overturning, at the instance of a private person, discretionary decisions of federal prosecuting authorities not to prosecute persons regarding whom a complaint of criminal conduct is made. E. g., Milliken v. Stone, 16 F.2d 981 (2d Cir.), cert. denied, 274 U.S. 748, 47 S. Ct. 764, 71 L. Ed. 1331 (1927); Pugach v. Klein, 193 F. Supp. 630 (S.D.N. Y.1961); Powell v. Katzenbach, 123 U. S.App.D.C. 250, 359 F.2d 234 (1965), cert. denied, 384 U.S. 906, 86 S. Ct. 1341, 16 L. Ed. 2d 359, rehearing denied, 384 U.S. 967, 86 S. Ct. 1584, 16 L. Ed. 2d 679 (1966); Smith v. United States, 375 F.2d 243 (5th Cir.), cert. denied, 389 U.S. 841, 88 S. Ct. 76, 19 L. Ed. 2d 106 (1967). See also Confiscation Cases, 74 U.S. (7 Wall.) 454, 19 L. Ed. 196 (1868); Goldberg v. Hoffman, 225 F.2d 463 (7th Cir. 1955); United States v. Cox, 342 F.2d 167 (5th Cir.), cert. denied sub nom., Cox v. Hauberg, 381 U.S. 935, 85 S. Ct. 1767, 14 L. Ed. 2d 700 (1965); Newman v. United States, 127 U.S.App.D.C. 263, 382 F.2d 479 (1967).
This judicial reluctance to direct federal prosecutions at the instance of a private party asserting the failure of United States officials to prosecute alleged criminal violations has been applied even in cases such as the present one where, according to the allegations of the complaint, which we must accept as true for purposes of this appeal, see Inmates of Attica Correctional Facility v. Rockefeller, supra, 453 F.2d at 24 (and cases there cited), serious questions are raised as to the protection of the civil rights and physical security of a definable class of victims of crime and as to the fair administration of the criminal justice system. Moses v. Kennedy, 219 F. Supp. 762 (D.D.C. 1963), affd. sub nom., Moses v. Katzenbach, 119 U.S.App.D.C. 352, 342 F.2d 931 (1965); Peek v. Mitchell, 419 F.2d 575 (6th Cir. 1970).
The primary ground upon which this traditional judicial aversion to compelling prosecutions has been based is the separation of powers doctrine.
"Although as a member of the bar, the attorney for the United States is an officer of the court, he is nevertheless an executive official of the Government, and it is as an officer of the executive department that he exercises a discretion as to whether or not there shall be a prosecution in a particular case. It follows, as an incident of the constitutional separation of powers, that the courts are not to interfere with the free exercise of the discretionary powers of the attorneys of the United States in their control over criminal prosecutions." United States v. Cox, supra 342 F.2d at 171.
Accord, Pugach v. Klein, supra 193 F. Supp. at 634; Moses v. Kennedy, 219 F. Supp. at 764-765; Peek v. Mitchell, supra 419 F.2d at 577-578.
Although a leading commentator has criticized this broad view as unsound and incompatible with the normal function of the judiciary in reviewing for abuse or arbitrariness administrative acts that fall within the discretion of executive officers, K. C. Davis, Administrative Law Treatise Sec. 28.16(4) at 982-990 (1970 Supp.), he has also recognized, as have most of the cases cited above, that the manifold imponderables which enter into the prosecutor's decision to prosecute or not to prosecute make the choice not readily amenable to judicial supervision.
In the absence of statutorily defined standards governing reviewability, or regulatory or statutory policies of prosecution, the problems inherent in the task of supervising prosecutorial decisions do not lend themselves to resolution by the judiciary. The reviewing courts would be placed in the undesirable and injudicious posture of becoming "superprosecutors." In the normal case of review of executive acts of discretion, the administrative record is open, public and reviewable on the basis of what it contains. The decision not to prosecute, on the other hand, may be based upon the insufficiency of the available evidence, in which event the secrecy of the grand jury and of the prosecutor's file may serve to protect the accused's reputation from public damage based upon insufficient, improper, or even malicious charges. In camera review would not be meaningful without access by the complaining party to the evidence before the grand jury or U.S. Attorney. Such interference with the normal operations of criminal investigations, in turn, based solely upon allegations of criminal conduct, raises serious questions of potential abuse by persons seeking to have other persons prosecuted. Any person, merely by filing a complaint containing allegations in general terms (permitted by the Federal Rules) of unlawful failure to prosecute, could gain access to the prosecutor's file and the grand jury's minutes, notwithstanding the secrecy normally attaching to the latter by law. See Rule 6(e), F.R.Cr.P.
Nor is it clear what the judiciary's role of supervision should be were it to undertake such a review. At what point would the prosecutor be entitled to call a halt to further investigation as unlikely to be productive? What evidentiary standard would be used to decide whether prosecution should be compelled? How much judgment would the United States Attorney be allowed? Would he be permitted to limit himself to a strong "test" case rather than pursue weaker cases? What collateral factors would be permissible bases for a decision not to prosecute, e. g., the pendency of another criminal proceeding elsewhere against the same parties? What sort of review should be available in cases like the present one where the conduct complained of allegedly violates state as well as federal laws? See generally, Schwartz, Federal Criminal Jurisdiction and Prosecutors' Discretion, 13 Law & Contemp.Prob. 64 (1948). With limited personnel and facilities at his disposal, what priority would the prosecutor be required to give to cases in which investigation or prosecution was directed by the court?
These difficult questions engender serious doubts as to the judiciary's capacity to review and as to the problem of arbitrariness inherent in any judicial decision to order prosecution. On balance, we believe that substitution of a court's decision to compel prosecution for the U.S. Attorney's decision not to prosecute, even upon an abuse of discretion standard of review and even if limited to directing that a prosecution be undertaken in good faith, see Note, Discretion to Prosecute Federal Civil Rights Crimes, 74 Yale L.J. 1297, 1310-12 (1965), would be unwise.
Plaintiffs urge, however, that Congress withdrew the normal prosecutorial discretion for the kind of conduct alleged here by providing in 42 U.S.C. § 19874 that the United States Attorneys are "authorized and required . . . to institute prosecutions against all persons violating any of the provisions of [18 U.S.C. §§ 241, 242]" (emphasis supplied), and, therefore, that no barrier to a judicial directive to institute prosecutions remains. This contention must be rejected. The mandatory nature of the word "required" as it appears in Sec. 1987 is insufficient to evince a broad Congressional purpose to bar the exercise of executive discretion in the prosecution of federal civil rights crimes. Similar mandatory language is contained in the general direction in 28 U.S.C. § 547(1) ("each United States attorney, . . . shall-(1) prosecute for all offenses against the United States; . . ." (emphasis supplied)) and in other statutes in particular areas of concern, e. g., 33 U.S.C. § 413 ("it shall be the duty of United States attorneys to vigorously prosecute all offenders" of certain provisions of the Rivers and Harbors Act when requested to do so by the appropriate officials). See also 45 U.S.C. § 152 (Tenth).
Such language has never been thought to preclude the exercise of prosecutorial discretion. See Bass Angler's Sportsman's Society v. Scholze Tannery, Inc., 329 F. Supp. 339, 345-346 (E.D. Tenn. 1971). Indeed the same contention made here was specifically rejected in Moses v. Kennedy, 219 F. Supp. 762, 765 (D.D.C. 1963), aff'd. 119 U.S.App.D.C. 352, 342 F.2d 931 (1965), where seven black residents and one white resident of Mississippi sought mandamus to compel the Attorney General of the United States and the Director of the F.B.I. to investigate, arrest, and prosecute certain individuals, including state and local law enforcement officers, for willfully depriving the plaintiffs of their civil rights. There the Court noted that "considerations of judgment and discretion apply with special strength to the area of civil rights, where the Executive Department must be largely free to exercise its considered judgment on questions of whether to proceed by means of prosecution, injunction, varying forms of persuasion, or other types of action." See also Peek v. Mitchell, supra.
Nor do we find the legislative history of Sec. 1987 persuasive of an intent by Congress to depart so significantly from the normal assumption of executive discretion. In re Upchurch, 38 F. 25, 27 (C.C.N.C.1889), relied upon by plaintiffs, held only that a United States commissioner had the power under Sec. 1987 to appoint a person other than the marshal, or one of his deputies, to execute process. It may well be that the legislative background of Sec. 1987 would compel a reading that Congress intended that federal marshals have no choice but to execute warrants issued pursuant to that section, since it also provided for criminal penalties for those who refused to do so and for the appointment of other persons to execute warrants and make arrests. No such conclusion can persuasively be drawn with respect to the exercise by United States Attorneys of prosecutorial discretion, especially in the absence of any similar statutory deterrent against their failure or refusal to prosecute. See Note, Discretion to Prosecute Federal Civil Rights Crimes, 74 Yale L. J. 1297, 1306-07 and n. 46 (1965). Thus, we do not read Sec. 1987 as stripping the United States Attorneys of their normal prosecutorial discretion for the civil rights crimes specified.
It therefore becomes unnecessary to decide whether, if Congress were by explicit direction and guidelines to remove all prosecutorial discretion with respect to certain crimes or in certain circumstances we would properly direct that a prosecution be undertaken. Cf. Powell v. Katzenbach, supra, 359 F.2d at 235; Note, supra at 1305.
With respect to the state defendants, plaintiffs also seek prosecution of named and unknown persons for the violation of state crimes. However, they have pointed to no statutory language even arguably creating any mandatory duty upon the state officials to bring such prosecutions. To the contrary, New York law reposes in its prosecutors a discretion to decide whether or not to prosecute in a given case, which is not subject to review in the state courts. Hassan v. Magistrates Court, 20 Misc.2d 509, 191 N.Y.S.2d 238 (1959), appeal dismissed, 10 A.D.2d 908, 202 N.Y.S.2d 1002 (2d Dept.), leave to appeal denied, 8 N.Y.2d 750, 201 N.Y.S.2d 765, cert. denied, 364 U.S. 844, 81 S. Ct. 86, 5 L. Ed. 2d 68 (1960). Yet the federal district court is asked to compel state prosecutions and appoint an "impartial" state prosecutor and state judge to conduct them, as well as to require the submission of a plan for impartial investigation and prosecution of the alleged offenses, on the basis of 42 U.S.C. § 1983, in the context of a continuing grand jury investigation into criminal conduct connected with the Attica uprising, supra n. 1, and where the state itself on September 30, 1971, appointed a Special Commission on Attica which has now published its findings.5 The very elaborateness of the relief believed by plaintiffs to be required indicates the difficulties inherent in judicial supervision of prosecutions, federal or state, which render such a course inadvisable.
Plaintiffs point to language in our earlier opinion, Inmates of Attica Correctional Facility v. Rockefeller, 453 F.2d 12, 20 (2d Cir. 1971), to the effect that "the State has the duty to investigate and prosecute all persons, including inmates, who may have engaged in criminal conduct before, during and after the uprising." But the statement does not support their present demands. The existence of such a duty does not define its dimensions or imply that an alleged failure to perform the duty completely or equally, as between inmates and state officials, will support federal judicial supervision of state criminal prosecutions. The serious charge that the state's investigation is proceeding against inmates but not against state officers, if shown to be accurate, might lead the Governor to supplement or replace those presently in charge of the investigation or the state legislature to act. But the gravity of the allegation does not reduce the inherent judicial incapacity to supervise.
The only authority supporting the extraordinary relief requested here is the Seventh Circuit's recent decision in Littleton v. Berbling, 468 F.2d 389 (1972), cert. granted, 411 U.S. 915, 93 S. Ct. 1544, 36 L. Ed. 2d 306 (1973). There a class of black citizens of Cairo, Illinois, brought suit for damages and injunctive relief against a state prosecutor, an investigator for him, a magistrate and a state judge, charging that the defendants had "systematically applied the state criminal laws so as to discriminate against plaintiffs and their class on the basis of race, interfering thereby with the free exercise of their constitutional rights." Id. at 392. They alleged a long history indicating a concerted pattern of officially sponsored racial discrimination. In reversing the district court's dismissal of the complaint, a divided panel concluded that a state judge, while not subject to suit for damages under Sec. 1983, Pierson v. Ray, 386 U.S. 547, 87 S. Ct. 1213, 18 L. Ed. 2d 288 (1967), may be enjoined from unconstitutionally fixing bails and imposing sentences that discriminated sharply against black persons, and that the State Attorney's quasi-judicial immunity from suit for damages when performing his prosecutorial function, id. 468 F.2d at 410, "does not extend to complete freedom from injunction," id. at 411. Finding other possible remedies either unavailable or ineffective, the Court approved the possibility of some type of injunctive relief, not fully specified, but which might include a requirement of "periodic reports of various types of aggregate data on actions on bail and sentencing and dispositions of complaints." Id. at 415.
However, the decision in Littleton is clearly distinguishable. There the claim, unlike that here, alleged a systematic and lengthy course of egregious racial discrimination in which black persons were denied equal access to and treatment by the state criminal justice system. Furthermore, the Court's decision does not appear to have compelled the institution of criminal prosecutions, which is the principal relief sought here. In short, we believe that Littleton should be strictly limited to its peculiar facts, as apparently did the Court itself. See id. at 415. To the extent that it may be construed as approving federal judicial review and supervision of the exercise of prosecutorial discretion and as compelling the institution of criminal proceedings, we do not share such an extension of its views.
"The United States attorneys, marshals, and deputy marshals, the commissioners appointed by the district and territorial courts, with power to arrest, imprison, or bail offenders, and every other officer who is especially empowered by the President, are authorized and required, at the expense of the United States, to institute prosecutions against all persons violating any of the provisions of section 1990 of this title or of sections 5506 to 5516 and 5518 to 5532 of the Revised Statutes, and to cause such persons to be arrested, and imprisoned or bailed, for trial before the court of the United States or the territorial court having cognizance of the offense."
It is not appropriate for the judiciary to order prosecutors to bring criminal prosecutions.
During an prison uprising at the Attica Correctional Facility in New York, 32 inmates died and others were injured. The event led to a lawsuit against the state and the local U.S. Attorney by current and former inmates and the mother of an inmate who died. According to the allegations in the complaint, the U.S. Attorney and state prosecutors had failed to investigate and prosecute state officials who had committed crimes while they were subduing the uprising. The goal of the action was a writ of mandamus to compel investigations at the federal and state levels. The trial court granted the defendants' motion to dismiss the case, finding that the type of relief sought was improper.
The decision of prosecutors to investigate and prosecute a matter may not be mandated by a court, since it rests within the discretion of the prosecutor's office. To hold otherwise would infringe on the separation of powers between the judicial and executive branches, since prosecutors are part of the executive branch. Even in cases involving alleged civil rights violations under 42 U.S.C. Section 1987, Congress had not removed discretion from prosecutors entirely. No law cited by the plaintiffs provided a clear source of a legislative mandate to prosecute.
The doctrine of prosecutorial discretion is part of the separation of powers between the executive and judiciary branches. This case also raised federalism concerns because a federal court would have interfered with the duties of state administrative officials.


The Delaware Supreme Court’s holding in Williams Companies, Inc. v. Energy Transfer Equity, L.P.1 implies that contract drafters might want to specifically define “commercially reasonable efforts,” possibly as stated in this article, to reduce the risk that their clients will be caught unawares by a far-stronger commitment than they might have actually intended.
But what do clients expect?
Under the Delaware Supreme Court’s Williams Companies holding, it might be argued that the commercially reasonable efforts standard could be met only by driving 68 mph or higher.
Commercially reasonable efforts: (a)“Commercially reasonable efforts” refers to at least those efforts that people experienced in the relevant business would generally regard as sufficient to constitute reasonable efforts in the relevant circumstances. Other uses of the term “commercially reasonable” have corresponding meanings; and (b) A party does not fail to act in a commercially reasonable manner, or to take commercially reasonable action, solely because it gives preference to its own interests over those of another party.
Reasonable efforts: (a) “Reasonable efforts” refers to one or more reasonable actions reasonably calculated to achieve the stated objective; (b)Any assessment of reasonable efforts is to give due regard to the information reasonably available to the relevant person at the relevant time, for example, the likelihood of success of specific action(s), the likely cost of other actions, the parties’ other interests, the safety of individuals and property, and the public interest; (c) A requirement to make reasonable efforts: (1) does not necessarily require taking every conceivable reasonable action and (2) does not require the obligated party to put itself in a position of undue hardship; and (d) A party obligated to make reasonable efforts may consider potential cost and potential return when determining what actions it must take to satisfy that obligation.
What if it’s not possible to agree on a definition of “commercially reasonable efforts”? In that case, contract drafters can think about provisions to encourage settlement and reduce the chances of getting bogged down in litigation over the term. Such provisions might include, for example, a baseball arbitration provision,13 requesting the court in any litigation to select one of the parties’ two competing proposals, without modification.
… (b) The dispute is to be decided by “last-offer” arbitration, sometimes known as “baseball” or “pendulum” arbitration, in which: (i) each party submits no more than two proposed determinations of the particular issue; (ii) the tribunal is jointly requested (if a court) or directed (if an arbitral tribunal) to select, as its determination of the particular issue, exactly one of the parties’ proposed determinations, in its entirety, without modification; ….
Defining “commercially reasonable efforts” can help clients avoid unpleasant surprises. If an agreed-in-advance definition isn’t feasible, then provisions to help the clients reach agreement about specific proposals can advance their long-term business interests.
On October 1, 2018, the Delaware chancery court continued that state judiciary's trend of defining commercially reasonable efforts as meaning all reasonable efforts. Akorn, Inc. v. Fresenius Kabi AG, No. 2018–0300–JTL, slip op. (Del. Ch. Oct. 1, 2018). Vice-Chancellor Laster's opinion recognized the chasm between what deal practitioners think the term commercially reasonable efforts means, versus what courts have said it means. The court's decision highlights (again) the importance of defining “commercially reasonable efforts” in contracts. For more details, see the author's blog post about the case.
Williams Companies, Inc. v. Energy Transfer Equity, L.P., No. 330 , 2017 Del. LEXIS 128 (Del. March 23, 2017).
at *27 & n.45 (Strine, C.J., dissenting) (citation omitted).
Williams Companies, Inc., v. Energy Transfer Equity, L.P., No. 12168, 2016 Del. Ch. LEXIS 92 (Del. Ch. June 24, 2016) (emphasis added).
Indiana v. IBM Corp., 4 N.E.3d 696, 716 n.12 (Ind. App. 2014), aff’d, 51 N.E.3d 150 (Ind. 2016).
Atmospheric Diving Systems Inc. v. International Hard Suits Inc., 89 B.C.L.R. (2d) 356 (1994). Australian and British courts take a similar view. See, e.g., Shawn Helms, David Harding & John Phillips, Best Efforts and Endeavours—Case Analysis and Practical Guidance Under U.S. and U.K. Law, Jones Day, July 2007, http://www.jonesday.com/Best-Efforts-and-EndeavoursCase-Analysis-and-Practical-Guidance-Under-US-and-UK-Law-07-30-2007/; Janet T. Erskine, Best Efforts versus Reasonable Efforts: Canada and Australia, McCarthy Tetrault, Nov. 30, 2007, http://mccarthy.ca/article_detail.aspx?id=3779.
SeeRestatement (Second) of Agency § 13, comment a (1957), quoted in Corporate Lodging Consultants, Inc., v. Bombardier Aerospace Corp., No. 63-1467-WEB, 2005 U.S. Dist. LEXIS 9259 at *13 (D. Kan. May 11, 2005), quoting T.S.I. Holdings, Inc., v. Lawrence S. Jenkins & Roger W. Hood, M.D., 924 P.2d 1239, 1250 (Kan. 1996). See generally John Pavolotsky, Best efforts clauses—what buyers expect versus how suppliers respond, IACCM, May 29, 2015, http://www2.iaccm.com/resources/?id=8571.
Kevin M. Ehringer Enterprises, Inc., v. McData Services Corp., 646 F.3d 321, 327 (5th Cir. 2011) (reversing judgment on jury verdict; best-efforts pro-vision was “too indefinite and vague to provide a basis for enforcement”).
See Herrmann Holdings Ltd. v. Lucent Technologies Inc., 302 F.3d 552, 559-61 (5th Cir. 2002) (reversing dismissal under Rule 12(b)(6); citing cases).
CKB & Assoc., Inc. v. Moore McCormack Petroleum, Inc., 809 S.W.2d 577, 581-82 (Tex. App.—Dallas 1991);see also, e.g., Will Taylor, Laurens Wilkes, Joshua Fuchs, Basheer Ghorayeb & Roy Powell, Contracts Requiring “Best Efforts” and “Commercially Reasonable Efforts,” 2015 A.B.A. Sec. Pub. Energy Lit. at https://apps.americanbar.org/litigation/committees/energy/articles/spring2015-0515-contracts-requiring-best-efforts-commercially-reasonable-efforts.html.
Baseball arbitration is named for a procedure used in Major League Baseball to resolve salary disputes between teams and their eligible players. Importantly, the procedure “is designed to produce a settlement, not a verdict.” Thomas Gorman, The Arbitration Process: The Basics, Baseball Prospectus, Jan. 31, 2005, http://www.baseballprospectus.com/article.php?articleid=3732(emphasis added).
Justin Sievert, Breaking down the MLB salary arbitration process, SportingNews, Jan. 13, 2018, http://www.sportingnews.com/mlb/news/mlb-salary-arbitration-process-breakdown-spring-training-2016/4jkawqkczi8i17cb4rhqjxseh.
SeeHunter Atkins, George Springer bets on self, gets lucrative deal, Houston Chronicle, (Feb. 5, 2018), https://www.houstonchronicle.com/sports/astros/article/George-Springer-bets-on-self-gets-lucrative-12553722.php.
DELL CHARLES “D. C.” TOEDT III, is a member of the Texas and California bars, is an attorney and arbitrator in Houston and teaches contract drafting at the University of Houston Law Center. He was formerly a shareholder and member of the management committee at Arnold, White & Durkee, a 150-lawyer intellectual property litigation boutique. Toedt left the firm to join a client software company as vice president and general counsel, serving there until the company was acquired by the global leader in its field.
EDITOR’S NOTE Except for two italicized paragraphs, one at the beginning of this article and the other at the end that cites a recent legal case on this issue -- this article was previously published in both the Business Law News of the State Bar of California (a hard-copy magazine) and in the Texas Bar Journal (TBJ).


text:
The problems of integrating efforts of the state and business entities for favorable economic environment formation are considered. Achievement of economy sustainable development while interacting between government agencies and business entities is possible in case of simultaneous achievement of economic efficiency and social performance.
Keywords: interaction between government agencies and business agencies, efficiency, social responsibility.
Bari G. Khairov, candidate of Economics, Deputy Director for Science in Omsk branch of Financial University under the Government of the Russian Federation; Denis G. Khametov, a post-graduate student of Siberian Automobile and Highway Academy (SIBADI), Omsk.
ECONOMIC TRANSFORMATION OF THE PUBLIC SECTOR: SOURCE OF PROBLEMS OR OPPORTUNITIES?
Institutional changes of the Russian economy determined by the shift to neoliberal economic model are reflected in economic transformations of the public sector. The consequences of these transformations are under discussion. There are made some conclusions about the possible impacts on the economy.
Keywords: economic transformation, institutional changes, public sector.
Natalya L. Gagulina, candidate of Physical and Mathematical Sciences, associate professor, a post¬ graduate student of Saint-Petersburg State University.
Social aspects of the interaction between business and government are considered in terms of assessing the effectiveness of tools for solving social and environmental problems that determine the activity of companies on the territory of presence. According to Russian features the integrated model of interaction between business and government is developed in the framework of corporate social responsibility in the regional social policy on the territory of presence in large business-structures.
Keywords: business-structures, territory of presence, social responsibility, public authorities.
Olga V. Danilova, Doctor of Economics, Professor of Financial University under the Government of the Russian Federation.
Keywords: audit, internal audit, auditor, subjects of corporate relations, corporate management, company.
Natalya A. Filevskaya, a post-graduate student of Ulyanovsk State Technical University.
The solution methods of the current problems in industrial enterprise management by means of processes are considered.
Keywords: management, process approach to industrial enterprise management, functional approach to business management, quality management system, business processes, company management efficiency.
Tatyana A. Korneeva, Doctor of Economics, Professor; Anton S. Stepanov, a post-graduate student. - Samara State University of Economics.
The prospects of JSC "Russian Railways" power grid activities are under discussion. "Russian Railways" holding framework comprises various kinds of activities in terms of state regulation. The use of connecting and distributive networks of JSC "Russian Railways" for providing electricity transmission services to outside consumers allows the author to put forward a proposal to single out power grid into a separate activity.
Keywords: subsidiary, branch, power grid, tariff regulation, separate accounting.
Elena V. Aleshina, a post-graduate student, Financial University under the Government of the Russian Federation, Moscow.
The article covers theoretical and methodical aspects of functional-cost analysis for enterprise management system. Special attention is paid to the problematic issues of information support of analytic process.
Keywords: functional-cost analysis, enterprise management system, functional approach, systematic approach, modeling, functions, functional backups.
Natalya A. Arkhipova, candidate of Economics, associate professor of Samara State University of Economics; Valeriy L. Pozdeev Doctor of Economics, Professor of Volga State University of Technology, Yoshkar-Ola.
Makarov S. I., Solovyova E.V.
The process of rendering public services of registration is considered, performance indicators of Federal service for state registration activity, level of these indicators connection with consumers’ satisfaction, methodical approaches to the analysis of quality level of land and cadastre services and possibility of the theory of gaps application are analyzed.
Keywords: public services of registration, performance indicators, theory of gaps, GAP-analysis.
Sergey I. Makarov, Doctor of Pedagogics, Professor; Elena V. Solovyova, a post-graduate student. - Samara State University of Economics.
The article reveals some approaches to ecological-economic damage calculation when propellant components get into aerial environment.
Keywords: propellants, environment, atmosphere, ecological-economic damage.
Andrey V. Vasilyev, Doctor of Technical Sciences, Head of Chemistry and Engineering Ecology Institute of Togliatti State University.
The analysis of the most important transformations taking place in production process in a current firm is carried out. The main aspects characterizing innovative production are defined.
Keywords: innovative activity, innovative potential, innovative product, innovative firm, innovative production, innovative process.
Aleksandr M. Mikhaylov, Doctor of Economics, Professor of Samara State University of Economics; Elena A. Karova, candidate of Economics, a senior lecturer of International Market Institute, Samara.
Gurova G.A., Chudakova E.A., Samoylov P.V.
The authors suggest methodology of pricing for high-tech products in the framework of integrated economic structures and implementation of interstate scientific research programs and projects. The considered methods of transfer price identification are based on Walras-Pareto scientific school approaches.
Keywords: integration, strategy, pricing model, transfer price, technological coefficients, price mechanism, marginal costs, interstate programs, full costs, pricing factors.
Galina A. Gurova, candidate of Economics; Elena A. Chudakova, candidate of Economics, Voronezh branch of Plekhanov Russian University of Economics; Pavel V. Samoylov, candidate of Economics, senior lecturer of Voronezh State University of Engineering Technology.
The technological aspect of logistics managerial concept is considered. The advantages of product distribution clusters in logistic systems and supply chains are proved. The factors of an increasing role of logistic services suppliers are defined.
Keywords: logistics, supply chain management, distribution systems, trends and factors.
International economy globalization influence on logistic business development is considered. The features of national and international competition, development factors and obstacle for achievement of global competitiveness are pointed out. Logistic approach evolution under globalization influence of economic processes is demonstrated; logistics contribution change in achievement of competitiveness is reflected.
Keywords: international business, global market, globalization, competition, competitiveness, global competition, global logistics.
Larisa K. Kirillova, candidate of Economics, associate professor of Samara State University of Economics.
The article proves the need to maintain market positions of wholesale-intermediary organizations in distribution channels by means of unique competitive advantages formation. The directions of wholesale intermediary functions providing competitiveness increase are considered.
Keywords: wholesale intermediary enterprise, distribution channel, wholesale intermediary functions.
Natalya I. Voytkevich, Doctor of Economics, Professor. E-mail: vni63@list.ru; Natalya V. Abramova, a post-graduate student.
The features of automated warehouse logistic systems are described. The evolution of WMS-class system is provided. The usefulness of the development of material flows identification technologies and cloud computing in warehouse logistics computerization is defined.
Keywords: warehouse logistics, automated warehouse control system, information technologies in logistics.
Anna N. Agafonova, candidate of Economics, associate professor; Veronika N. Shumakova, a post-graduate student - Samara State University of Economics.
The author studies integration possibilities for securities market in CIS countries as well as problems in regulated securities market integration, depository, clearing and settlement systems.
Keywords: integration processes, securities market, depository system, clearing and settlement systems.
Areg M. Bagdasaryan, candidate of Economics, associate professor of Armenian National Agrarian University.
The special features of retail in Orenburg region are considered, development trends of network structures and contemporary retail formats are defined.
Keywords: retail, distribution network, contemporary retail formats, Orenburg region.
Natalya V. Skuzovatova, a senior lecturer of Orenburg State Management Institute.
The content of "marketing process concept" is studied. The attempt to define the initial cause of marketing process creation, course form and existence environment is carried out. The value of marketing process in formation of the territory marketing potential is emphasized.
Keywords: marketing potential, marketing process, institutional environment, territory consumers, territory marketing.
Tatyana N. Tselykh, a post-graduate student, lecturer of Omsk State Transport University.
Current problems of procurement management and enterprise supplies with the use of the logistic principles and approaches are considered. Their decision will allow business entities to consider changes in external environment and to form new competitive advantages by means of logistic expenses optimization.
Keywords: procurement management, supply process, logistic approach, material management, coordination.
Olga V. Yudakova, Candidate of Economics, associate professor; Aleksey A. Tokarev, a post-graduate student. - Samara State University of Economics.
The author discusses the features and significance of logistic outsourcing in cargo transportation, its development prospects concerning joint cargo.
Keywords: logistics, outsourcing, joint cargo, transportation, merchandizing, market, transportforwarding services.
Tamara I. Nikolaeva, Doctor of Economics, Professor of Plekhanov Russian University of Economics, Moscow.
The article is devoted to the research of reservation, which is a principle method of the budget planning. Being a method of budget planning, reservation consists of creation of reserves, which reduce the rate of risks arising in budget implementation. The problems of formation and use of two major funds, Reserve Fund and National Welfare Fund, are considered.
Keywords: budget, budget planning, budget risks, methodology, reservation, Reserve fund, National Welfare Fund, subsidies, expenses, control, program financing.
Tatyana M. Kovalyova, Doctor of Economics, Professor, the Head of Finance and Credit Department in Samara State University of Economics.
The author provides study results of motivating employees in an organization, having various degree of responsibility for their own life situations and different relevant needs. The article demonstrates that the subjects having interest in material wealth differ in internal locus of control. The relations of responsibility and anxiety about the future with the social requirements, desire for personal development etc. are reflected.
Keywords: motivation, responsibility, locus of control, internality of behavior, corporate relations, pattern and contents of requirements.
Svetlana L. Verbitskaya, candidate of Psychological Sciences, associate professor of Samara State University of Economics.
Formation of new ecological morals having crucial significance in contemporary natural science is discussed. According to N. Moiseyev’s paradigm, the current condition of the biosphere can lead to a disaster for all life. University education has to play an important role in the formation of ecological morals, therefore its ecologization is necessary.
Keywords: ecological morals, global environment science, higher education ecologization, collective behavior.
Lidiya Ya. Myachina, candidate of Biology, associate professor in Togliatti branch of Samara State University of Economics.
The western humanism which defines the Western cultural tradition currently is considered as a negative value in the Russian religious philosophy in the late 19th - early 20th centuries. Absolutely different cultural values opposite to the ideas of the western humanism form the basis of the Russian religious and philosophical traditions.
Keywords: humanism, worldview, religious and philosophical traditions, Christian values.
Aleksandr E. Makhovikov, candidate of Philosophy, associate professor of Samara State University of Economics.

matches: V. V. V. V. V. V. V. V.


In December 2016, during the twilight of President Barack Obama’s 44th presidency, the World Trade Organization (WTO) conducted a Trade Policy Review (TPR) of the United States of America. All members of the WTO are subject to review under the Trade Policy Review Mechanism (TPRM). The TPRM takes place in the “Trade Policy Review Body which is actually the WTO General Council — comprising the WTO’s full membership — operating under special rules and procedures” (Source: WTO, Trade Policy Reviews: Brief Introduction).
The questions raised by WTO members during the US TPR included, inter alia, Bayh-Dole provisions, the implementation of the WIPO Marrakesh Treaty for the Blind, compulsory licensing and government use provisions, US state practice on standards essential patents and the United Nations Secretary-General’s High-Level Panel (UN HLP). KEI obtained the 391 paged room document “unofficial room document” (RD/TPR/740, 19 December 2016) containing the advance written questions submitted by WTO Members and the responses provided by the United States.
Although the proceedings of the WTO TRIPS Council have received much scrutiny during discussions of the Trans-Pacific Partnership, the Paragraph 6 system, innovation and intellectual property, the Havana Rum case and tobacco plain packaging, the WTO’s trade policy reviews have not traditionally attracted the same level of attention. While discussions within the Trade Policy Review Mechanism are often routine in nature, this is not always the case – as this post will highlight. Perhaps a more diligent examination of the goings-on of the WTO’s Trade Policy Review Mechanism is merited, to provide more insight into how TRIPS flexibilities are treated in the WTO system.
The following piece is a walk-through of the December 2016 trade policy review of the United States in the context of IPRs and access to knowledge.
The following extracts are taking from room document RD/TPR/740.
16. The report notes that in April 2015, the U.S. House of Representatives’ Committee on the Judiciary completed its series of hearings to review the current state of U.S. copyright laws. Has the U.S. House of Representatives’ Committee on the Judiciary review of U.S. copyright law now concluded and, if so, what is the outcome of that review? In particular, has the Committee recommended any legislative action or policy measures to address any issues?
RESPONSE: The United States continuously seeks to improve its system for copyright protection and enforcement. The U.S. delegation is not aware of any developments beyond the public information provided by the Committee Chairman and Ranking Member of the House Judiciary Committee, available on the Committee’s website, dated December 8, 2016. The Committee has not proposed legislation related to the copyright review.
17. It is understood that the goal of the Committee’s review has been to determine whether the copyright laws are still working in the digital age to reward creativity and innovation. Has there been any noticeable trend (decline or increase) in the level of online copyright infringement in the U.S. in the past 12 to 18 months and, if so, what factors may have influenced this?
RESPONSE: The United States Government has not collected information on such a trend that would enable the requested analysis.
18. It is understood that (in the wake of the Committee’s review) the U.S. Copyright Office is currently conducting a study to evaluate the operation of the ISP safe harbor provisions of section 512 of title 17, United States Code. What is the estimated timeframe for the conclusion of this evaluation?
RESPONSE: The U.S. Copyright Office has commenced a study to evaluate the impact and effectiveness of the safe harbor provisions contained in section 512 of title 17, United States Code (for details, see https://www.copyright.gov/policy/section512/). This public study was initiated by a request for public comments issued on December 31, 2015. Public roundtables were held in May 2016 in San Francisco, California and New York City, New York. A second round of comments has been requested so that interested parties can reply or expand upon issues raised in written comments submitted in the first round of comments and during the roundtables; parties are also invited to submit empirical research studies assessing issues related to the operation of the safe harbor provisions on a quantitative or qualitative basis. These comments are due on February 6 and March 8, 2017, respectively. The Office will continue its work into 2017; an estimated date to deliver its final work product to Congress is not available at this time.
The United States is a member of the World Intellectual Property Organization (WIPO), and participates in a large number of international conventions and treaties related to intellectual property rights (IPRs).
35. The United States supported WIPO’s Marrakesh Treaty to Facilitate Access to Published Works for Persons Who Are Blind, Visually Impaired or Otherwise Print Disabled. Are there ongoing plans for its ratification?
RESPONSE: The President submitted the treaty to the United States Senate for ratification on February 10, 2016. We remind Members that TPRs are retrospective reviews. We look forward to keeping the Membership informed.
With respect to new legislation on copyright approved during the review period, in July 2014, the U.S. Congress passed the Unlocking Consumer Choice and Wireless Competition Act, which reestablishes a limited exemption to prohibitions on circumvention of certain technological protection measures for the purposes of “unlocking” wireless telephone handsets to allow cell phone owners to connect to different wireless network providers. The President signed the Act into law on 1 August 2014. In addition, the U.S. Copyright Office completed its sixth triennial rulemaking proceeding under Section 1201 of Title 17 of the U.S. Code. The primary responsibility of the Register and the Librarian of Congress in the rulemaking proceeding is to assess whether the implementation of access controls impairs the ability of individuals to make non-infringing uses of copyrighted works within the meaning of Section 1201(a)(1). The Register of Copyrights forwarded her Recommendation to the Librarian of Congress, who adopted the recommendations and issued the Final Rule which resulted in regulations adopting limited exemptions from the general prohibition against the circumvention of copyright protection systems for access controls.
38. Could the U.S. elaborate on the scope of the exceptions and limitations adopted to allow for the circumvention of technological protection measures?
RESPONSE: Section 1201 provides certain permanent exemptions to the prohibition on circumvention of access controls and, in some cases, copy controls. Separately, section 112 includes a limited permanent exception to section 1201 for purposes of making ephemeral recordings. In addition, section 1201 instructs the Librarian of Congress to make determinations in a rulemaking proceeding every three years, upon the recommendation of the Register of Copyrights, evaluating and, as appropriate, adopting limited exemptions for the ensuing three year period from the general prohibition against circumvention of access controls. The Copyright Office maintains a webpage that contains links to the public comments, the Register’s Recommendation, the Final Rule announcing the exemptions, and a document addressing Frequently Asked Questions about the rulemaking. An Introduction to the Register’s Recommendation summarizes the exemptions and the rulemaking process. Based on the Register’s recommendation, in this latest rulemaking the Librarian adopted exemptions covering twenty-two types of uses. All information related to the Sixth Triennial Rulemaking is available at: https://www.copyright.gov/1201/.
Section 3.3.6.1. Intellectual Property Rights – Overview (3.240) The Report mentions that the Bayh-Dole Act allows universities, non-profit institutions, and small businesses to obtain patents arising from research funded by the Federal Government.
50. What compensation do these entities provide to the Government in order to obtain title to inventions made with Federal funding?
RESPONSE: The Bayh-Dole Act enacted in 1980 enabled universities and other non-profits, as well as small businesses (called “contractors” in the Act), to own patents resulting from government-funded research. To protect the government interests, the Act reserves to the government certain rights in the results of federally funded R&D. These rights include a nonexclusive, nontransferable, irrevocable, paid- up license to practice or to have practiced the invention for or on behalf of the United States throughout the world. Also, the government retains march-in rights and, if certain statutory conditions are not met, can require a contractor to license the patents on reasonable terms. The government also has the right to file patent applications anywhere the contractor does not file and has the right to pursue any U.S. or foreign patent or application which the contractor elects to abandon. Furthermore, the government receives a number of indirect benefits from the commercialization of government-funded inventions by private entities in the form of taxes as a result of the creation of new jobs and new products.
51. What metric is used to determine whether a business qualifies as a “small business”?
RESPONSE: Bayh-Dole provides that small business concern shall be defined as provided at 15 U.S.C. 632 and implementing regulations of the Administrator of the Small Business Administration.
52. Will the Federal Government assist in any capacity an entity to defend against alleged patent infringement at any time during the commercialization of the patent before or after it has been transferred?
RESPONSE: A person that elects to retain title to a federally-funded invention and files patent applications – as the owner of any resulting patents – would expect to be responsible for enforcing its patent and for defending itself against any patent infringement claims.
The Report indicates that the STELA Reauthorization Act of 2014, signed into law in December 2014, extends until 31 December 2019 the statutory licence under which satellite carriers retransmit distant television broadcast stations to viewers who are unable to receive signals for such stations in their local market.
53. What are the remuneration requirements under the statutory licence?
RESPONSE: Under the STELA licenses, satellite carriers are required to deposit, on a semiannual basis, with the Copyright Office a royalty fee payable to copyright owners for the retransmission of distant signals in underserved markets. As of January 1, 2017, the royalty fee will be 27 cents per subscriber per month for carriage of each broadcast signal for private home viewing and 57 cents per subscriber per month for carriage of each broadcast signal for viewing in commercial establishments.
54. How are remuneration levels set?
RESPONSE: Where applicable under STELA, Copyright Royalty Judges, in the absence of a voluntary agreement among satellite carriers, distributors, and copyright owners, conduct a proceeding under sections 802 and 803 of the Copyright Act to determine the amount of remuneration in the form of royalty fees that represent the fair market value of secondary transmissions, taking into account information set forth in section 119(c)(1)(F)(ii) of the Copyright Act.
55. How does the U.S. use IP provisions in its trade agreements to encourage innovation, while balancing this goal with the need to ensure that IP protection in its trade agreements do not act as a barrier to innovation?
RESPONSE: The United States seeks to include provisions in trade agreements to protect intellectual property and to combat counterfeiting, piracy, and other infringement, including trade secret theft; obligations to facilitate legitimate digital trade, including trade in creative content; and provisions to promote development of, and access to, innovative and generic medicines. Examples of how the Trans-Pacific Partnership (TPP) Agreement promotes innovation and creativity can be found in the fact sheet at https://ustr.gov/wp-content/uploads/TPP-PromotingInnovation-and-Creativity-Fact-Sheet.pdf.
The Report explains a number of initiatives being carried out to improve U.S. domestic patent policies and processes, including patent quality.
58. What measures is the U.S. Government pursuing directly with a view of reducing law suits brought by “non-practising entities” also known as “patent trolls”?
RESPONSE: Without commenting on the characterization of “non-practicing entities” and “patent trolls,” there have been a number of recent changes to the patent litigation landscape in the United States including judicial decisions and amendments promulgated by the Judicial Conference of the United States to the Federal Rules of Civil Procedure in December 2015. The effects of these changes on the patent litigation landscape continue to be reviewed.
The Report explains that section 337 of the Tariff Act of 1930 investigations are instituted by the United States International Trade Commission (USITC); administrative law judges make an initial determination of whether there is an infringement/contravention of the law, which is then subject to review by the USITC. If the USITC determines that Section 337 has been violated, it may issue exclusion orders, cease and desist orders, or both, after considering the effect of the orders on four statutory public interest factors. Exclusion orders direct the CBP either to bar entry into the United States of infringing goods from whatever source (general exclusion orders) or to bar entry of imports from specifically identified entities (limited exclusion orders). The President may disapprove a USITC order within 60 days.
74. How many times as a U.S. President disapproved a USTITC order?
RESPONSE: For clarity, in 2005 the United States President delegated to the United States Trade Representative the authority to disapprove a USITC determination finding a violation of section 337. United States Presidents have invoked the authority on five occasions, from 1978 to 1986. The USTR disapproved a USITC determination on one additional occasion, in 2013. As noted in response to a different question, section 337 is only one of a range of IP enforcement avenues potentially open to parties.
Negotiations on the Trans-Pacific Partnership (TPP) Agreement were concluded in October 2015 and the Agreement signed in February 2016, but ratification is still pending. The United States is actively engaged in negotiations to liberalize trade further, notably in the form of the Environmental Goods Agreement (EGA) and the Trade in Services Agreement (TiSA).
1. U.S. President-elect Donald Trump said that he will issue an executive order to withdraw from the TPP on the first day that he is in office. In the U.S., what is the legal status of a trade agreement already signed but not yet ratified? What is the role of the U.S. President in the ratification process of a regional trade agreement, and what is the legal effect of the role?
RESPONSE: We remind Members that TPRs are retrospective reviews. We look forward to keeping the Membership informed as the new Administration comes into place.
2. If the U.S. withdraws from the TPP, will the original policies or commitments between the U.S. and the other TPP members, particularly policies on cross-border free data flow, remain in effect?
3.Donald Trump’s policies are casting shadows over the prospect of the TPP, NAFTA and the negotiations of many bilateral trade agreements. How does the U.S. view and assess the resulting effect on global trade and the multilateral trading system with the WTO at its core? How would the US comment on the potential impact on the open trade policy of America?
the Membership informed as the new Administration comes into place.
4. How would US comment on FTAAP and RCEP?
RESPONSE:There is no FTAAP to join. FTAAP is an aspirational goal of a free trade area inspired by APEC, a non-negotiating forum. FTAAP is not a separately negotiated FTA but is to be built on high-standard, comprehensive FTAs that address so-called next generation trade and investment issues. With respect to RCEP, we recognize that other WTO Members are pursuing bilateral and regional trade liberalization initiatives and, like other Members, await the results of that negotiation.
5. Is there any intention for U.S. to join RCEP and FTAAP?
RESPONSE: There is no FTAAP to join. With respect to RCEP, we remind Members that TPRs are retrospective reviews. We look forward to keeping the Membership informed as the new Administration comes into place.
110.Standard organizations in the U.S. are now formulating their own policies regarding standard essential patents without a unified rule, which increases the uncertainty andcost of the whole procedure. Does the U.S. have any consideration on the balance of interests of patent owners, standard enforcement organizations and the public? Will the U.S. consider promulgating a unified federal rule regarding standard essential patents?
RESPONSE: The private sector leads standards setting in the United States, including in the development of the policies of Standards Setting Organizations regarding standard essential and other patents. It is unlikely that there is a single approach to such policies that would best serve the wide range of standards setting organizations, and attendant circumstances that may change over time. Variation among SSOs’ patent policies could be beneficial to the overall standards setting process.
118.Up to now, how many SEP holders have initiated the 337 investigation procedures? How about the results? Please provide a list of all relevant cases and whether or not an exclusion order and/or cense and desist order is issued finally.
RESPONSE: A historical review of all section 337 investigations is beyond the scope of the current Trade Policy Review. Information on section 337 investigations is available at www.usitc.gov and https://pubapps2.usitc.gov/337external/.
119.In the 337 investigation procedures initiated by the SEP holder LSI against companies such as Realtek, ITC affirmed that the case did not meet the criteria required by Section 337 for “domestic industry”. As a result, ITC did not issue exclusion orders and/or cense and desist orders to Realtek. Please explain why the ITC considered that the domestic industry standard of the case was not met?
requirement and other issues are set out in the Commission’s Opinion in Certain Audiovisual Components and Products Containing the Same, Inv. No. 337-TA-837 (March 26, 2014). Information on section 337 investigations is available at www.usitc.gov and https://pubapps2.usitc.gov/337external/.
120.The U.S. domestic courts can issue exclusion order on infringing products. What are the standards for the issuance of injuction by the courts? What are the standards for the issuance of injunction on SEP? Please provide the list of all SEP infringement cases heard by the US courts and final rulings since 2006.
RESPONSE: The United States notes that Question 120 includes an inaccurate statement on the U.S. courts and exclusion orders and that a historical review of SEP infringement cases heard by U.S. Courts since 2006 is beyond the scope of this Trade Policy Review. The referenced standards are addressed in 19 U.S.C. § 1337, eBay Inc. v. MercExchange, L.L.C., (U.S. 2006) and Apple Inc.v. Motorola, Inc. (Fed. Cir 2014).
121.Is ITC’s standard of issuing the exclusion order the same as the US domestic courts’ standard for issuing injuction? Especially in the case of LSI against Realtek, what are the considerations of ITC and U.S. domestic court respectively? If the standards are the same, please explain why they are the same; if not, please explain whether this discrepancy will influence the imported products, because ITC has adopted remedy measures against imported products that infringe SEP according to Section 337.
RESPONSE: Please see the responses to Questions 119 and 120 above.
122.Exclusion order and cease and desist order issued by ITC only target imported goods but the domestic standard implementers/producers in the U.S. will never face 337 investigations. Some foreign enterprise outside the U.S. claim that ITC’s standard for issuing exclusive and cease and desist order is not the same as that of U.S. domestic courts. This leads to a certain level of discrimination against foreign goods. What is the U.S. response to the concern about and attention to the “different standards of U.S. courts and ICT on order issuance in terms of SEP infringement and the resulting discrimination against imported goods”?
RESPONSE: While the intention of Question 122 is not entirely clear, it appears to include inaccurate statements regarding the relationship between section 337 and domestic standard implementers (and an unclear statement regarding section 337 and “domestic standard . . . producers” (emphasis added)). The United States rejects the suggestion of discriminatory treatment.
123.In 2013, White House Task Force on High-Tech Patent Issues mentioned in ITC LEGISLATIVE PRIORITIES & EXECUTIVE ACTIONS that “Change the ITC standard for obtaining an injunction to better align it with the traditional four-factor test in eBay Inc. v. MercExchange, to enhance consistency in the standards applied at the ITC and district courts”. Please explain the background and reasons for the statement. Does the U.S. think there is discrepancy between the standards of U.S. courts and ICT on order issuance? When and how does the U.S. plan to address the discrepancy?
RESPONSE: The Task Force in question issued a factsheet fully articulating its conclusions and expectations: https://www.whitehouse.gov/the-press-office/2013/06/04/fact-sheet-white-housetask-force-high-tech-patent-issues.
66. US provides for statutory licenses under the Clean Air Act for use of patented technology that is mandated by the EPA also. What is the basis of fixing the terms of access to these technologies? Are there any guidelines to enable access?
RESPONSE: The United States recognizes that Article 31 of the TRIPS Agreement permits other use of the subject matter of a patent without the authorization of the rightholder under certain conditions. Please refer to 42 U.S.C. §7401 et seq., and related implementing regulations at 40 C.F.R. Subchapter C, Parts 50-98, for potentially relevant provisions to the question.
67. Does the US provide for mandatory or compulsory license under the 28USC 1498, Bayh Dole Act and on account of anti competitive practices? Mandatory licenses exist under other environmental and pesticide related legislations also.
Detailed information regarding the Patent and Trademark Law Amendments Act (also known as the Bayh-Dole Act) can be found in the U.S. Code at Title 35 (entitled “Patents”), Chapter 18 (entitled “Patent Rights in Inventions Made with Federal Assistance”). See 35 U.S.C. 201 et seq. The Act promotes the utilization of inventions arising from federally supported research or development.
Detailed information regarding Section 1498 (entitled “Patent and Copyright Cases”) of U.S. Code Title 28 (entitled “Judiciary and Judicial Procedure”), Chapter 91 (entitled “Court of Federal Claims”) can be found at 28 U.S.C. 1498.
Detailed information regarding U.S. competition law can be found in the Sherman Antitrust Act, the Clayton Antitrust Act, and the Federal Trade Commission Act. The Department of Justice and the Federal Trade Commission has also issued Antitrust Guidelines for the Licensing of Intellectual Property. Those guidelines are currently in the process of being updated. Information can be found at the Department of Justice website, at www.doj.gov.
68. What is the procedure for issue of these compulsory/mandatory licenses? Do they apply irrespective of the field of technology?
RESPONSE: The United States does not accept the characterization of the legal provisions referenced in this question. Additional detailed information on these legal provisions can be found under Question 67.
69. How many such cases of compulsory license have issued in the US especially in the context of USC 1498 and the “March in Rights”?
RESPONSE: The United States does not accept the characterization of the legal provision referenced in this question. Additional detailed information on this legal provisions can be found under Question 67.
US Government has remedies beyond legal provisions, to ensure that an action which is beneficial to the larger interest of the US economy and its consumers is taken. Executive Orders of the President can be issued to address specific situations and to overturn determinations made by judicial bodies. Some years ago a federal order overturned the determination of the USITC in the Apple Vs Samsung Case.
70. What forms the basis of such decisions? Can the concern that forms the basis of the decision go beyond health urgency and public safety?
RESPONSE: This response does not attempt to address inaccurate assertions found in the chapeau text introducing Questions 70 and 71. Based on the reference in the chapeau to the United States International Trade Commission (USITC), it appears that Questions 70 and 71 refer to the statutory authority of the United States President (delegated to the United States Trade Representative (USTR) in 2005) to disapprove certain determinations of the USITC under section 337 of the Tariff Act of 1930, as amended. The United States notes first that section 337 is only one of a range of IP enforcement avenues potentially open to parties. Information on the basis for the referenced decisions is provided at 19 U.S.C. section 1337 and S. Rep. No. 93-1298, 93d Cong. 2d Sess. 199 (1974). The bases for individual decisions to disapprove are set out in a notice from the United States President or the USTR to the USITC.
71. What is the due process that is followed before the order is brought out? Is it open for review-including judicial?
RESPONSE: Information on the procedures governing determinations under section 337 can be found at 19 U.S.C. section 1337 and 19 C.F.R. section 210. A USITC final determination is appealable to the U.S. Court of Appeals for the Federal Circuit.
76. Does the US provide data exclusivity protection from the date of first registration or from the date of registration in the US?
RESPONSE: The United States provides the following relevant information regarding applicable processes and periods relating to regulatory data protection in the United States. Detailed information regarding the Drug Price Competition and Patent Term Restoration Act can be found in U.S. code title 21 (entitled “Food and Drugs”), chapter 9 (entitled “Federal Food, Drug, and Cosmetic Act”), section 355 (entitled “New drugs”). Additionally, with respect to biological products, detailed information on the Biologics Price Competition and Innovation Act can be found in U.S. code title 42 (entitled “the Public Health and Welfare”), section 262 (entitled “Regulation of biological products.”). With respect to agricultural chemicals, detailed information on the Federal Insecticide, Fungicide, and Rodenticide Act can be found at U.S. code title 7 (entitled “Agriculture”), chapter 6 (entitled “insecticides and environmental pesticide control”).
77. Is there a specific period from the date of first registration within which protection must sought to enable data exclusivity protection?
RESPONSE: Please see the detailed information provided in response to question 76.
78. What is the process followed in case of agrochemical substances? What are the modalities that must be completed by generic suppliers of agrochemical substance?
RESPONSE: Please see the detailed information provided in response to question 76. A narrative description of the process and mechanisms for obtaining data protection are provided at https://www.epa.gov/pesticide-registration/about-pesticide-registration.
79. What is the difference between market exclusivity and data exclusivity? Can validity of market exclusivity outlast data exclusivity?
RESPONSE: The meaning of the terms “market exclusivity” and “data exclusivity” as used in this question are unclear from the question. Please see the detailed information provided in response to question 76.
80. What is the underlying basis for market exclusivity?
RESPONSE: Please see the detailed information provided in response to question 76. Additionally, relevant information can be found at the following links, among others: http://www.accessdata.fda.gov/scripts/cder/ob/default.cfm and https://www.epa.gov/pesticideregistration/petitions-filed-establish-new-exclusive-use-periods-specific-commodity.
125. The enactment of the Trade Facilitation Act by the USA in Feb 2016 can lead to imposition of sanctions if the countries categorized as “Priority Watch List” under Special 301 do not provide “adequate and effective” protection of intellectual property rights or “fair and equitable market access to United States persons that rely upon intellectual property rights”. Since under World Trade Organisation jurisprudence, legality of unilateral actions over sovereign countries is questionable, does this domestic legislation of the USA not go beyond the provisions of WTO?
RESPONSE: The protection and enforcement of IPR supports high-paying jobs, stimulates and promotes creative industries, and provides important solutions for pressing global challenges, for example including, clean energy technologies, new and improved medicines and health treatments, and technologies to improve agricultural yields. In that connection, Congress has charged the USTR to provide the annual the Special 301 Report provides an assessment of countries’ IPR regimes and identifies countries that do not provide adequate and effective protection of IPR or fair and equitable market access to United States persons that rely upon IPR protection. The United States encourages the listed countries to address the barriers and challenges identified in the Report. When countries make progress to address these barriers and challenges, those steps are highlighted as positive actions.
126. The U.S. invokes the Special 301 provisions to try and influence other countries’ IP laws, which are TRIPS compliant and are domestic in application. Further, among many of the recommendations of the United Nations Secretary-General’s High-Level Panel on Access to Medicines Report issued in September 2016, one of the recommendations specifies that countries “must refrain from explicit or implicit threats, tactics or strategies that undermine the right of WTO Members to use TRIPS flexibilities.” Under such circumstances, is the Special 301 TRIPS compliant?
RESPONSE: The Special 301 Report provides an assessment of countries’ IPR regimes in order to determine whether countries provide adequate and effective protection of IPR. Among the key areas highlighted in past Special 301 Reports are domestic laws in foreign countries that either fail to provide adequate and effective protection of IPR or deny fair and equitable market access to U.S. rights holders. The assessments set forth in the Special 301 Report are based on various critical factors, including, where relevant, the Doha Declaration on the TRIPS Agreement and Public Health. As affirmed in the Doha Declaration on the TRIPS Agreement and Public Health, the United States respects a trading partner’s right to protect public health and, in particular, to promote access to medicines for all. An effective, transparent, and predictable IPR system is necessary for both manufacturers of innovative medicines and manufacturers of generic medicines.
129. What are the views of the US on the issue of evergreening of patents, considering that the US itself restricts or invalidates patents on the basis of “secondary considerations”, and also in light of the United Nations Secretary-General’s High-Level Panel on Access to Medicines Report that has specifically recommended that countries should use measures to prevent evergreening of patents?
RESPONSE: The United States notes that there is no common understanding of the concept of “evergreening.” The United States strongly supports that patents be made available for all inventions, whether products or processes, in all fields of technology, provided that they are new involve an inventive step, and are capable of industrial application. Certain countries, including India, have applied patentability criteria, including through the application of India’s Section 3(d) “enhanced efficacy” standard, in a way that has led to rejections of patent applications for innovative pharmaceutical products that have received patents in other countries. Patents provide critical incentives for the biopharmaceutical industry to develop new and enhanced treatments that benefit patients worldwide. The United States supports ensuring that patents are available for eligible biopharmaceutical inventions, including for potentially beneficial innovations, which could include drugs with fewer side effects, decreased toxicity, improved delivery systems, or temperature or storage stability.
The United States is deeply disappointed with the Report of the High-Level Panel on Access to Medicines and it recommendations. Effective intellectual property rights and liberalized trade have played an important role in incentivizing the development of medicines and bringing them to new markets. The narrowly-focused mandate of the panel was flawed and did not produce outcomes that adequately address the complex issue of access to medicines. The United States Government remains committed to advancing access to existing and new medicines, including by supporting innovation through robust intellectual property protections and working with public and private partners to find new solutions to the world’s pressing public health challenges.
133. Recently, a German court has granted a CL to a US company. What are the views of the US in this regard, and whether such a CL is justified? How does the US differentiate such compulsory licenses issued in favour of US companies from those issued in other countries to non-US companies?
RESPONSE: There is no contextual information provided in this question, and it appears is more appropriate for Germany or the European Union.
134. As per testimony given before the USITC, any federal agency can rely upon 28 USC § 1498(a) to limit remedies for the infringement of patents, copyrights, plant variety rights [28 USC § 1498(d)], mask works [protection of semiconductor chips-chapter 9 of title 17] and designs (chapter 13 of title 17 [28 USC § 1498(e))] to compensation only. By removing the possibility of an injunction to enforce an exclusive right, the US government has the equivalent of a compulsory license on intellectual property rights covered by the statute. There are several examples in this regard. Thus, there is a compulsion involved in these actions; how are these then different from Compulsory Licenses (CL) issued under patent laws by various countries in accordance with the TRIPS Agreement and the Doha Declaration?
RESPONSE: The United States does not accept the characterization of the legal provision referenced in this question. Detailed information regarding Section 1498 (entitled “Patent and Copyright Cases”) of U.S. Code Title 28 (entitled “Judiciary and Judicial Procedure”), Chapter 91 (entitled “Court of Federal Claims”) can be found at 28 U.S.C. 1498.
135. In 2013, the United States Trade Representative through an Executive Order overturned the decision of the US International Trade Commission in the Apple Vs Samsung case, where infringement action had been initiated by Samsung Electronics for infringement of their US patent by Apple Inc. Does this mean that patent rights can be infringed on certain grounds; if so, what are these grounds? Does the US government have any plans to accord similar relief to foreign companies infringing US patents?
decision to disapprove this determination does not mean that the patent owner in this case is not entitled to a remedy. On the contrary, the patent owner may continue to pursue its rights through the courts.” USITC Section 337 cases are governed by standards established by law and regulation, the application of which is made without regard to the nationality of the parties involved.
136. The Bayh-Dole Act permits a university, small business or non-profit institution using federal funds for research leading to an invention, to retain the title on any patent issued for such inventions. Under 35 U.S. Code § 204 which relates to preference for United States industry, no small business firm or non-profit organization, or their assignee, which receives such title to the patent, shall grant to any person the exclusive right to use or sell any invention in the United States, unless such person agrees that any products embodying the invention or produced through the use of the invention will be manufactured substantially in the United States. Can preference be given to domestic manufacturing over imports, and is this TRIPS compliant? Will the US support other Governments’ initiatives to have local manufacturing provisions?
RESPONSE: The United States considers its trade obligations and the specific requirements of each technology to determine if the “substantial manufacture” requirement is met.
141. What is the reason for the U.S. not making its Copyright Act compliant with the WTO Agreement on Trade Related Aspects of Intellectual Property Rights (TRIPS), effectively limiting the scope of protection for sound recordings, despite sound recordings being recognised as “works” under US copyright law? This is despite losing a WTO case on the issue and settling the same with the EU.
RESPONSE: Without commenting on the accuracy of the question’s characterization of a decision of the Dispute Settlement Body, the United States continually seeks to improve its system for copyright protection and enforcement, including complying with decisions of the Dispute Settlement Body and providing robust copyright protection and enforcement, including to all foreign rightsholders, who thrive in the U.S. market The United States has resolved the vast majority of disputes in which the Dispute Settlement Body has issued recommendations with respect to a U.S. measure. As for the remaining few instances where U.S. efforts have not yet been successful, the United States has been working actively towards resolving such matters. The United States has a strong record of support for both the WTO dispute settlement system and the Agreement on Trade-Related Aspects of Intellectual Property Rights.
144. US Copyright law as interpreted by the US Supreme Court in the case of Kirtsaeng v. John Wiley & Sons which held that the “first sale doctrine” does apply to foreign made works, imperils foreign copyright holders who may wish to price their copyrighted products differently (i.e. higher) for the US market, since under the Judgement, lower priced works from foreign markets can be imported freely into the US. In the light of the above judgement, does the US law have national or international exhaustion of IP rights of Copyrights?
RESPONSE: The U.S. Supreme Court’s decision in Kirtsaeng v. John Wiley & Sons is available at https://www.supremecourt.gov/opinions/12pdf/11-697_4g15.pdf. The full impact of that decision is currently being interpreted by the judiciary. Congress has not made any changes to copyright law as a result of this decision.