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New PwC Report: Age Diversity in the Boardroom

Corporate Compliance Insights -

Corporate boards that want to increase their diversity usually focus on gender and race. But are they paying enough attention to age diversity? PwC’s Census of Directors 50 and Under uncovers how younger directors may be setting the pace on specific areas inside the boardroom and explores what catalysts may lead to more age diversity. Areas The post New PwC Report: Age Diversity in the Boardroom appeared first on Corporate Compliance Insights.

(This is only a summary. Click on the headline to view the entire article at Corporate Compliance Insights and participate in the discussion.)

NIST Releases an Updated Version of its Cybersecurity Framework

Program on Compliance and Enforcement, New York University School of Law -

by Sabastian V. NilesMarshall L. Miller, and Jeohn Salone Favors

Last week, the U.S. Department of Commerce’s National Institute of Standards and Technology (NIST) released an updated Cybersecurity Framework that revises NIST’s baseline recommendations for the design of cybersecurity risk management programs.  In announcing its release, Commerce Secretary Wilbur Ross described the updated Framework as “a must do for all CEOs” and recommended that “every company” adopt the Framework as its “first line of defense.”  As with the prior version, the updated NIST Framework provides a useful tool to guide and benchmark company approaches to cybersecurity risk and will impact how regulators evaluate cybersecurity programs and incident responses across sectors.

The updated Framework, entitled Version 1.1, is intended to clarify and refine (rather than replace) NIST’s original 2014 Cybersecurity Framework, Version 1.0, and builds on the original version’s five core cybersecurity functions—Identify, Protect, Detect, Respond, and Recover—and tiered implementation system.  Instead of a “one-size-fits-all” approach, the Framework continues to be a flexible platform that can be customized to address the particular cybersecurity risks faced by any company.  

Of broader import, the updated Framework encourages companies to integrate cybersecurity objectives into strategic planning and governance structures and to ensure that cybersecurity is a central part of overall risk management.  In terms of other specific changes, Version 1.1 provides new guidance on how to use the Framework to conduct self-assessments of internal and third-party cybersecurity risks and mitigation strategies, includes an expanded discussion of how to manage cyber risks associated with third parties and supply chains, advances new standards for authentication and identity proofing protocols, and addresses how to apply the Framework to a wide range of contexts, such as industrial controls, the use of off-the-shelf software, and the Internet of Things.  

Though use of the Framework is voluntary for private sector entities and not intended to impose heightened regulatory burdens, the Federal Trade Commission has adopted and utilized the Framework as a benchmarking tool to assess the reasonableness (or inadequacy) of select companies’ responses to cybersecurity breaches in enforcement actions.  In a similar vein, the Securities and Exchange Commission has itself utilized the Framework and endorsed it as an aid to guide corporate cybersecurity policies, disclosures, and risk management. 

As the NIST Framework continues to develop into an important benchmark for cybersecurity policies and programs, public companies should review the updated Framework and consider how to use it to improve cybersecurity risk oversight and management (see the cybersecurity sections of our March 2018 memo on Risk Management and the Board of Directors for additional recommendations).

Sabastian V. Niles is a partner, Marshall L. Miller is of counsel, and Jeohn Salone Favors is an associate at Wachtell, Lipton, Rosen & Katz.

The views, opinions and positions expressed within all posts are those of the author alone and do not represent those of the Program on Corporate Compliance and Enforcement (PCCE) or of New York University School of Law.  PCCE makes no representations as to the accuracy, completeness and validity of any statements made on this site and will not be liable for any errors, omissions or representations. The copyright of this content belongs to the author and any liability with regards to infringement of intellectual property rights remains with the author.

Breaking News in the Industry: April 24, 2018

Loss Prevention Media -

Suspect in multi-million dollar credit card fraud ring arrested

A suspect in 48 credit/debit card fraud cases has been arrested in Miami, according to the Pasco County Sheriff’s Office. Daniel Santos, 22, was arrested through a coordinated effort with the U.S. Marshalls Service and the Miami Dade County Police. Santos is currently held on no bond. He is charged with organized fraud and possession of stolen credit or debit card, among other related charges. Pasco deputies said Santos also has a history of violence to include battery, throwing a deadly missile, felon in possession of a firearm, lewd and lascivious sexual battery on a victim under 16, assault on law enforcement, fleeing to elude, and multiple drug arrests. Santos’ fraud crimes have been occurring since March 2015. Deputies said Santos obtains credit/debit cards by either buying them from people, stealing them, or obtaining them through “mail box hopping.” His fraudulent activity with other criminal associates has become a multi-million dollar fraud ring.

Pasco sheriff’s Detective Spencer Hubbell received his first case as an Economic Crimes Unit detective in 2016, which was a Santos case. Over the course of the next year, he was assigned numerous other fraud cases. Hubbell was able to link many of the cases together as being committed by Santos. Hubbell arrested Santos several times since receiving the first case, however, Santos was always able to make bond and continue his lifestyle of criminal activity, deputies said. With a total of 48 fraud cases, Hubbell said he was determined to locate Santos and put a stop to his crime spree. During the past week, Hubbell and Pasco sheriff’s Detective Darren Hill put their computer skills to use to locate where Santos was hiding, as Santos knew there were active warrants for his arrest. These detectives watched Internet videos Santos posted and noted specific geographical details regarding the surroundings where Santos was hiding. They were able to successfully identify the exact condominium building seen in the videos. That led to Santos’ arrest.   [Source: Tampa Bay Reporter]

Customer captures Apple store grab and run on smartphone [Viral Video]

Like other large retail outlets, Apple stores have their fair share of thefts, but it’s not often that such incidents are caught on a customer’s smartphone. Police are investigating a robbery that took place at one of the Cupertino company’s stores on the Plaza in Kansas City. One shopper, Margs Dickinson, managed to capture the crime while she was in the store buying an Apple Watch. She later posted the video on her Facebook page. Dickenson told the Kansas City Star that she happened to have her phone out and started recording on SnapChat. The three men are seen grabbing devices from the store as the alarms ring. It appears that one of them is holding an iPad—possibly an expensive 12.9-inch Pro, judging from its size. There’s also a tether dragging along the floor, which could have been what set the alarms off. The men then grab a number of iPhones before fleeing the scene on foot. Back in 2016, Apple started removing the security cords on its iPhones in a small number of stores in the UK and Canada. The untethered handsets have a ‘kill-switch’ that mean when they leave the outlet’s WiFi range, they can’t do anything but ring for Find My iPhone until the battery dies. They are also Activation Locked using iCloud as a deterrent. The thefts were a lot more brazen than a technique used a couple of years ago, which involved criminals wearing blue shirts like those worn by Apple store workers and posing as employees, enabling them to stealing goods from the stores. Anyone who has information on the robbery should call the TIPS Hotline at 816.474.TIPS.  [Source: TechSpot]

Fraudster pleads guilty to $179K credit card fraud scheme

A 22-year-old Queens, New York man pleaded guilty to his role in a $179,000 credit card fraud scheme that spanned the East Coast, federal prosecutors said Thursday. Xia Bin Xu, of Bayside, was part of a fraud ring that stole credit card information from more than 100 cardholders to create fake credit cards, which they used to buy luxury goods from retail shops up and down the East Coast and sell them on the black market from July 2014 to April 2015, court records show. The scheme was headed by two Flushing men – ringleader Mei Bao Lu and his second-in-command Yang-Shi Lin – who skimmed credit card information from dozens of cardholders to create fake credit cards, said U.S. District Attorney John Durham. Lu distributed the fake credit cards to several “buyers” – including Xu – with instructions to purchase gift cards and luxury merchandise. He then sold the goods at a discount to be put on the black market, Durham said. The group used 120 counterfeit credit cards – issued by 18 unknowing financial institutions – to make around $179,000 fraudulent purchases in Connecticut, Florida, Maine, Massachusetts, New York, New Jersey, Pennsylvania and West Virginia, court records show. In addition to being a buyer, Xu recruited other members to buy for the fraud ring, Durham said.

Cops began investigating the scheme in February 2015 when Connecticut police departments began receiving complaints about unauthorized charges to their credit and debit cards, court records show. The investigation found many of the fraud complaints came from people who’d dined in the same Clinton, Connecticut restaurant earlier that month, authorities said.  Xu was arrested on Sept. 10, 2015 for his role in the credit card fraud scheme and later released on bond. On Wednesday, he pleaded guilty in a Connecticut federal court to one count of access device fraud. He will be sentenced to up to 10 years in prison for the crime on July 24. Xu was one of several members of Lu’s group to be convicted on similar credit-card related charges in Maine, New Jersey, New York and West Virginia state and federal courts. Lu and Lin also pleaded guilty to similar charges and were sentenced in early February – Lu to a year and a half in prison and Lin to a year and a day.   [Source: Bayside Patch]

Employee charged with theft from cash registers

Franco Smith, 18, of the 300 block of Englewood Avenue, Bellwood, Illinois, was charged with misdemeanor theft after an internal investigation at Home Depot,  where he worked, found he had stolen as much as $1,750 from various cash registers over a three-month period, police said. He is to appear for a hearing May 15 in Maybrook Court.  [Source: Chicago Tribune]

Woman charged in $7,000 Victoria’s Secret underwear theft

A California woman who allegedly stole more than $7,000 in underwear and other merchandise from Victoria’s Secret was captured by Medford, Oregon, police after she took a cab to her motel room. Harmonie Jewel Taylor, 25, faces two felony theft charges in Jackson County Circuit Court, accusing her of shoplifting more than $7,000 worth of merchandise from Victoria’s Secret at Rogue Valley Mall early Wednesday afternoon, then taking about $3,500 worth of items from Safeway stores later that evening, according to court documents filed in her case. At about 12:30 p.m. Wednesday, surveillance video at the lingerie chain allegedly showed Taylor filling several bags with underwear, according to Medford police. Mall security attempted to stop her, but she was able to flee the parking lot on foot, according to police. Taylor, who has a San Francisco address listed in court records, allegedly used a cab service to get from the mall to her motel room, court documents say. After obtaining surveillance photo stills from mall security, the cab company confirmed it gave a ride to a woman fitting Taylor’s description from the mall to the Motel 6 on Biddle Road, and motel staff identified her. At 9:18 p.m. Wednesday,

Medford police witnessed Taylor returning to her motel room via taxi, where she allegedly had in her possession two Victoria’s Secret bags filled with items taken from two Medford Safeway stores. The stolen merchandise, listed only as a “large amount of miscellaneous items” in Medford police reports, was valued at about $3,599. Taylor allegedly attempted to provide police with a false identity before her identity was confirmed through fingerprint records, according to court documents filed in the case. She has at least one California fugitive warrant charging her with robbery out of San Francisco. Taylor made her first court appearance Friday in the theft cases, along with the fugitive case. She remained in the Jackson County Jail without bail. A call to Medford police wasn’t immediately returned, but records show that Victoria’s Secret has been a frequent target of multi-thousand dollar thefts — with most going unsolved. In May of last year, about 130 bras were reported stolen from the store, amounting to losses valued at $7,854; another Medford case that same month reported quantities of bralettes, push-up bras and panties stolen, totaling $4,536. Similar Medford thefts involving thieves brazenly stealing armfuls of women’s underwear have been reported since at least 2015, according to previous news stories. Medford police have noted that company policies bar employees from physically stopping shoplifters. News stories in similar Victoria’s Secret thefts around the country also point to store layouts that place registers at the back of the store, rather than near the exit. [Source: Mail Tribune]

The post Breaking News in the Industry: April 24, 2018 appeared first on LPM.

Suspected Shoplifter Jumps into Car; Injures Police Officer

Loss Prevention Media -

A suspected shoplifter who jumped into a car injured a police officer before driving out of the parking lot at Giant Eagle’s Market District store in Pittsburgh’s Shadyside neighborhood, police said. A cashier told the police officer assigned to work security detail at the grocery store near Centre and Negley avenues about a man believed to have been shoplifting, Department of Public Safety spokeswoman Alicia George said. The man was getting into his car when the officer approached him on foot. Then, the suspect began to drive away and struck the officer with an open car door, “throwing the officer to the ground,” George said. The officer, whose name was not released, suffered injuries to his hand and leg, according to George. He was taken to UPMC Mercy hospital, where he was “in good condition and receiving treatment.: Police are seeking the public’s help to identify and find the suspect involved in the incident. Officials did not provide a description of the suspect. They described the suspect’s getaway vehicle as a “newer model, maroon SUV” whose license plate ends with “1-9-3-3.” Police asked anyone with information to call detectives at 412.323.8800. Tips can remain anonymous.  [Source: Trib Live]

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First in HR: Know Your Numbers in Hiring

The Compliance & Ethics Blog -

By Ashley Lipman Outreach Manager Before making a hire, it is essential for hiring managers and human resources to crunch some numbers and understand the costs associated. Some costs will be fixed based on your business needs; others will be variable depending on who you choose to hire. Employee turnover and replacement can cost the […]

All of Your Fiduciary Duty in One Place

Compliance Building -

Of the trio of regulatory releases from the Securities and Exchange Commission last week, the one targeted at registered investment advisers is a little weird. It sets out the fiduciary duty of investment advisers, sort of, and proposes some new regulations.

One of the problems with the fiduciary duty is that it is not explicitly written into the statutes or regulations of the Investment Advisers Act. The SEC latched on to Section 206 and court cases have followed along. But if you look through the Act or the regulations you will not find a fiduciary duty stated.  Last week’s regulatory release, at least in part, was to “reaffirm – and in some cases clarify – certain aspects of the fiduciary duty that an investment adviser owes to its clients under section 206 of the Advisers Act.”

Of course, if this reaffirmation and clarification don’t get codified in the regulations, they are just a secondary source and will stay harder to find. The SEC did ask for comment on whether it would be beneficial to codify this interpretation. I would give that a resounding “yes.”

What does the SEC think are the obligations of an investment adviser’s fiduciary duty?

The Duty of Care and the Duty of Loyalty.

The release draws heavily from the 1963 Supreme Court case SEC v. Capital Gains Research Bureau, Inc. that was the landmark case holding that the Investment Advisers Act imposes a fiduciary standard on registered investment advisers.

Duty of Care

The SEC breaks down the duty of care into three prongs.

  1. the duty to act and to provide advice that is in the best interest of the client,
  2. the duty to seek best execution of a client’s transactions where the adviser has the responsibility to select broker-dealers to execute client trades, and
  3. the duty to provide advice and monitoring over the course of the relationship.

Acting in the best interest of the client is the big prong and the SEC gives lots of examples of what advisers should be doing.

  • duty to make a reasonable inquiry into a client’s financial situation, level of financial sophistication, experience, and investment objectives
  • duty to provide personalized advice that is suitable for and in the best interest of the client based on the client’s investment profile
  • update a client’s investment profile in order to adjust its advice to reflect any changed circumstances
  • have a reasonable belief that the personalized advice is suitable for and in the best interest of the client based on the client’s investment profile.
  • Take into account the costs of an investment strategy
  • Take into account the liquidity, risks and benefits, volatility and likely performance in determining if the strategy is in the best interest
  • Conduct a reasonable investigation into the investment sufficient to not base its advice on materially inaccurate or incomplete information.
  • Independently or reasonably investigate securities before recommending them to clients
Duty of Loyalty

“The duty of loyalty requires an investment adviser to put its client’s interests first. An investment adviser must not favor its own interests over those of a client or unfairly favor one
client over another.”

The SEC makes a point that in not unfairly favoring one client over another, an adviser is not locked into making pro rata allocations of opportunities.

An adviser has to try to avoid conflicts of interest with its clients, and make full and fair disclosure to its clients of all material conflicts of interest that could affect the investment advisory relationship. But disclosure of a conflict alone is not always sufficient to satisfy the adviser’s duty of loyalty. The disclosure must be clear and detailed enough for the client to understand and make an informed decision.


What do I see as the problems with these standards?

The first is its application to private funds and private fund advisers. The proposal is targeted at retail investors and separately-managed accounts. It skips any mention of the issues related to pooled investment vehicles like private funds. In those cases the client is the fund. For some advisers, there may also be a client that invests in the fund. The needs of the various investors in a fund may vary. The fund is a client and the fund investors may not be clients.

The SEC has danced around the private fund issues of the fiduciary duty and registration requirements for a decade. With the passage of Dodd-Frank, a bigger portion of the SEC’s registered investment advisers are private funds. It seems strange to have omitted them from this release.

I also think this release fails to clarify issues around the disclosure of conflicts in dealing with the duty of loyalty. The SEC hedges its statements. I expect we will see a fair amount of comments on this issue.



Innovation in Compliance Episode 6: Understanding the Fraud Pentagon with Jonathan Marks

FCPA Compliance & Ethics -

Jonathan Marks is a leading fraud expert. He’s helped companies across multiple markets uncover fraud. Jonathan has innovated compliance by creating the Fraud Pentagon. His innovation builds upon work that was done years ago, the fraud triangle. Jonathan takes it to new levels that are in line with today’s sophisticated, technology-saturated world. Today, he and [...]

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United Technologies Proxy Voting Guide

Corporate Governance -

United Technologies (UTX) provides technology products and services to building systems and aerospace industries worldwide. Most shareholders do not vote because reading through 100+ pages of the proxy is not worth the time for the small difference your vote will make. Below, I tell you how I am voting and why. If you have read […]

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How to Pay Millions in GDPR Fines

Corporate Compliance Insights -

10 Behaviors That Will Put Your Organization at Risk If your company isn’t ready to comply with the GDPR, then you may need to sound the alarm. Fines for noncompliance could be 4 percent of your company’s annual global revenue. This is not a joke. If you don’t want to be responsible for putting your company The post How to Pay Millions in GDPR Fines appeared first on Corporate Compliance Insights.

(This is only a summary. Click on the headline to view the entire article at Corporate Compliance Insights and participate in the discussion.)

Loss Prevention Certification: Recently Certified – April 2018

Loss Prevention Media -

Professional excellence requires dedication and responsibility, and is something that the best continuously strive to achieve. In order to maximize potential, it is essential that professional development is seen as an ongoing process. We should always be looking for ways to improve our skills, abilities, and base of knowledge as a means to maximize performance. Loss prevention certification is a means of establishing and validating that standard of excellence.

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We are pleased to recognize and congratulate those industry leaders who recently obtained their LPC certification. Despite their demanding schedule and having other impressive educational credentials, they still saw the value and took the time to obtain this industry-leading LPC credential.

In order to achieve the highest standards of excellence, loss prevention professionals must embrace the importance of continuing education as a gateway to higher performance and achievement within the profession. The best way to invest in our future is to invest in ourselves, and each of us holds the responsibility to maximize our talents and abilities to best serve our professional ambitions.

Loss prevention certification is an investment that we make in ourselves. It is not simply a commitment to higher learning, but also a dedication to reach a higher standard. Each of these individuals is helping to raise the bar for the profession; and has earned both their designation and respect of the loss prevention community.

The Loss Prevention Foundation is pleased to recognize and congratulate the following individuals who have successfully completed all of the requirements set forth by the board of directors to be LPQualified (LPQ) and/or LPCertified (LPC):

Lucio Amicci, LPC Zone Manager, APP Sears Holdings Charles Bailey, Jr. LPC CFI Regional Asset Protection Manager Hibbett’s Sporting Goods Shawn Bradley, LPC Loss Prevention and Safety Manager Lowe’s David Chartrand, LPQ Area LP Manager Goodwill Industries of Seattle Miranda Collins, LPC Ecommerce Fraud Investigator PETCO Animal Supplies Michael D’Antonio, LPQ LP Manager Stew Leonard’s Darlene De Francesco, LPC Area Security & Loss Prevention Manager FedEx Office Nathan Dowling, LPQ Director of Surveillance & Security Buffalo Run Casino Nicholas Ferris, LPC Asset Protection District Manager Rite Aid Tyler Grandy, LPC Loss Prevention Analyst Dick’s Sporting Goods Michael Hawkins, LPC Loss Prevention Manager Lowe’s Aaron Henderson, LPC CFI Director Loss Prevention Penske Bruce Herritt, LPC Auto Center Manager Walmart Stores Ciera Hilton, LPQ Regional Loss Prevention Manager Protos Security Robert Jevarjian, LPQ LP Manager Stew Leonard’s Slade Jordan, LPC Asset Protection Coordinator Walmart Stores Arron Knight, LPC Regional EHS & Loss Prevention Manager FleetPride Erin Koons, LPQ AP Operations Manager Walmart Stores Lincoln LeFebvre, LPC Senior Manager – Field AP The Home Depot Alan Lott, LPC Project Manager Investigations 7-Eleven Kate McGorty, LPQ Loss Prevention Specialist L.L. Bean Kevin Mgrdichian, LPC District Loss Prevention Manager Sears Holdings Brian Naughton, LPQ Loss Prevention Ambassador Nordstrom Pankaj Patel, LPQ Loss Prevention Analyst Indigo Kelley Portner, LPQ Asset Protection District Manager Rite Aid R. Bryant Price, LPC Regional Director Loss Prevention Gabriel Brothers Donald Satterfield, LPC LP Process Mgr The Home Depot Steven Smith, LPC Area Loss Prevention Manager ULTA Beauty Steffen Steudte, LPQ Asset Protection Manager Sears Holdings Mandie Wells, LPQ Corporate LP Supervisor KPH Healthcare Services Ashley Winkelmann, LPC Corporate Investigator 7-Eleven

It is our responsibility to manage the process; driven by individual learning experiences and carrying a personal signature for success. Continuing education, training and skills development, lifelong learning activities, intellectual nourishment and exposure to new ideas all contribute to that plan. Are you taking the necessary steps?

To view the Recently Certified for March 2018, click here.

For more information on loss prevention certification and the certification process, contact the Loss Prevention Foundation at

The post Loss Prevention Certification: Recently Certified – April 2018 appeared first on LPM.

CCO Leadership in an Age of Dynamism

FCPA Compliance & Ethics -

One of the most constant things about the compliance profession is its dynamism. Compliance programs are not static and the compliance profession is not static. Today’s cutting edge in compliance will be tomorrow’s best practice which will be next month’s standard expectation. While this drives those who focus on the law around compliance batty, properly [...]

The post CCO Leadership in an Age of Dynamism appeared first on Compliance Report.

Corporate Intellectual Property Is Being Devalued by Washington

BRINK News -

This is the second piece in a week-long series on intellectual property. You can read the previous piece here.

Not many years ago, business leaders concerned themselves with only a business’s tangible assets. Those days are long gone. Today, intangibles make up the majority of corporate assets, sometimes up to 80 percent. Intangible assets include patents, trademarks, copyrights and trade secrets—with patents alone comprising 20 percent to 30 percent or more of a company’s market value.

Savvy business executives now regularly monitor patent values. Business transactions involving a patent portfolio can affect stock values and have significant financial consequences.

Determining patent values is inherently challenging. Unlike stock markets, there is no open market for patents and thus no ongoing quantification of value. But the business leader’s job has become all the more difficult because Washington, like the proverbial “thief in the night,” has upended the system, vastly depressing patent values by as much as 60 percent in just the last three years, according to some economic studies.

In 2011, the U.S. Congress passed the America Invents Act (AIA), creating a unique procedure for cancelling patents, even after a patent is examined by experts at the U.S. Patent and Trademark Office (PTO). Under the AIA, any patent can be attacked—by anyone and at any time. Imagine if a neighbor—or even a stranger—could repeatedly challenge title to your home, year in and year out. Could you get a mortgage? Certainly not. The lender would run from the high risk.

Business investors, such as venture capitalists and hedge fund managers, and internal company managers are in the same boat as the mortgage lender. Why invest in a new product if the patent protecting it from competitive poaching can forever be challenged in AIA proceedings, especially when the rate of patent cancellation is so high?

Well, the AIA reviews have cancelled some of the best patents—those with high commercial value being enforced in expensive lawsuits—in all technology areas, including pharmaceutical, biotechnology, and computer technology. AIA reviews cancel patents at rates of 60 percent or higher. In courts of law, it is half of that. Why the difference? Simply put, AIA reviews require less evidence, and they never hear from live witnesses. Congress also allows anyone to challenge a patent—whether a competitor or not, a stock short seller, or merely a zealot campaigning against all patents.

The patent office aggravated Congress’ AIA design defects. Contrary to courts, the Patent Trial and Appeal Board applies a broad patent interpretation, called the “Broadest Reasonable Interpretation” (BRI). Despite the name, nothing is reasonable about it, particularly when it conflicts with the patent interpretation used by the courts. The BRI was intended for use during initial patent application examination, when the inventor could freely amend the claims, which is not allowed in AIA reviews.

The current U.S. patent environment is starving its own companies while funding those of major foreign competitors.

Sen. Christopher Coons, D-Del., the only patent lawyer in Congress, introduced a bill to correct these and other procedural deficiencies. But the bill has not been given a hearing. David Kappos, the PTO director when the AIA procedures were adopted, has explained that the intent was always to improve the rules, as the PTO learns from actual experience. The new PTO Director, Andrei Iancu, is currently reviewing the procedures, so we may see some relief in the near term.

Contemporaneously, the Supreme Court upended the settled law about what inventions are eligible for patenting. Between 2010 and 2014, the court undermined the breadth and clarity of the U.S. patent statute, imposing its own vague notions and ignoring the four classes in the statute: “processes, machines, compositions of matter and manufactures.” The court used undefined terms, such as “abstract,” leaving the business community and the patent office guessing what was meant. The result: Thousands of patents plainly eligible under those words were invalidated. Even worse, hundreds of thousands were cast under a cloud of possible invalidity, left with little or no value.

The impact of the court’s incursion compounded the massive uncertainty from the AIA reviews. Money managers “voted with their feet,” diverting funds from U.S. R&D into safer domestic investments such as entertainment and to overseas R&D. No wonder, for the scope of eligibility was broadened in Europe and Asia and even China, just as the U.S. narrowed it.

Not surprisingly, the annual Chamber of Commerce ranking of national patent systems shifted dramatically. From 2012-2015, the U.S. consistently ranked first. Then in 2016, the U.S. fell to 10th, tied with Hungary. In 2017, the U.S. dropped two more places. The U.S. dropped off the top 10, for the first time ever, in Bloomberg’s 2018 ranking of innovation systems.

So, the current U.S. environment is starving its own companies while funding those of major foreign competitors. Startups were hit particularly hard because they are more dependent on patents to secure funding. Their formation rate fell 40 percent to a half-century low, with more failing than being created in one recent year—a first in U.S. history.

This is especially worrisome because U.S. startups create the most net new jobs, the most economic growth, and the most technological breakthroughs, as documented by studies of the Kauffman Foundation on Entrepreneurship and the U.S. Census Bureau. I explained this to the U.S. Congress when I testified, but they seemed not to have noticed, instead creating AIA reviews that make it unaffordable for startups and small technology companies to protect their inventions.

This was ironic indeed, because the Congress had intended the reviews to be “an alternative to expensive litigation.” Instead, in many cases, the AIA is an expensive, sometimes insurmountable, obstacle to fighting against patent infringement. So, despite my testimony and those of others, no corrections have been legislated in the seven years since the AIA was passed.

Congress, the Supreme Court, and the PTO have all defaulted on their leadership responsibilities to protect the U.S. innovation economy. Their failure is dangerous because our main competitive advantage over foreign rivals is our innovation/invention system.

The future fortunes of both individual companies and our entire nation have thus been put at risk by Washington. Unfortunately, so far, corporate leaders have not been informed or active in pressing Washington to repair the enfeebled innovation system.

CEO Transitions: From Shared Accountability to Culture Change Success

Culture University -

There is nothing more exciting than the moment a new leader is announced. Employees Google her/his name, wondering what she/he will do to change the organization. A new leader brings new ideas. She/he offers a new vision. They may even help the organization imagine better ways to remain relevant and thrive in the future. CEOs […]

The post CEO Transitions: From Shared Accountability to Culture Change Success appeared first on Culture University.

LPM Insider Survey: What Is the Greatest Public Misperception of ORC?

Loss Prevention Media -

Organized retail crime and the dramatic growth of ORC incidents have drawn significant attention both within the loss prevention industry and throughout the retail community in general as businesses search for ways to manage the threats and address the issues.

Whether dealing directly with professional shoplifters or otherwise battling the related fencing operations, cargo theft incidents, Internet crimes, or other associated offenses, tremendous effort and resources are being waged against those associated with these sophisticated criminal networks.

Retailers have established dedicated task forces to specifically deal with ORC issues. Industry associations have invested significant resources to combat organized retail crime efforts through education, awareness, and political channels. Organized retail crime associations (ORCAs) have been founded across the country.

There are efforts to influence leaders on Capitol Hill to continue to search for legislative solutions, enact stronger statutes, increase penalties, and encourage enforcement. There are also sponsored events in select markets where professionals can learn and network with law enforcement agencies and other retailers to enhance engagement and build stronger partnerships.

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Yet despite these focused efforts, the public perception of organized retail crime is typically not viewed in the light that we might expect. Often perceived as a minor distraction in the larger scheme of things, theft and theft-related crimes—to include organized retail crime incidents—are not seen as a primary concern in the eyes of those outside of retail.

In the eyes of many, this is nothing more than a petty sidebar that pulls us away from other “real” or “more important” issues.

There’s often little or no separation between “minor” offenses and criminal networks. In fact, such perceptions can often spark sympathy for the perpetrators while ignoring larger concerns and the true impact of these crimes.

So how do we change this perception? What can we do to increase public awareness and influence a different way of thinking? Perhaps the starting point is to identify where the breakdown is taking place.

What do you think?

We look forward to your insights and opinions! Please feel free to candidly share your thoughts. All responses to the survey will remain anonymous.

Look for the results of the survey to appear in next Monday’s LPM Insider.


The post LPM Insider Survey: What Is the Greatest Public Misperception of ORC? appeared first on LPM.


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