The Big Story: USMCA, China trade deals move forward. The Trump administration and Congress made significant progress this week on two critical trade deals, with President Donald Trump signing a phase one trade deal with China and the Senate passing the United States-Mexico-Canada Agreement (USMCA).
Both trade agreements will have an impact on the startup and technology communities. USMCA also includes critical provisions that will provide startups with the certainty they need to grow their businesses abroad, including around intermediary liability and intellectual property protections.
The phase one deal with China requires the country to end forced technology transfers and commit to certain intellectual property protections. Many of the remaining tech and cybersecurity concerns remain to be addressed in the phase two agreement, which President Trump said will likely not be reached until after the 2020 presidential election. Tariffs on billions of dollars of Chinese goods will remain in place until the phase two deal is reached, a decision that will continue to impact U.S. startups that are not as well positioned as their larger competitors to absorb the costs associated with lingering tariffs.
Policy Roundup:
DOJ pushes encryption narrative. Attorney General William Barr is continuing to attack Apple over company’s use of encryption following the FBI’s request for help unlocking two iPhones that belonged to the shooter in last month’s deadly shooting at a naval air base in Pensacola, Florida. Despite the fact that the two recovered iPhones can already be accessed using existing tools, the Department of Justice is using the situation to portray encryption as a hinderance to law enforcement investigations. As we previously noted, mandating that startups and other tech companies create special government “front doors” or “backdoors” would undermine encryption protections at large and be especially harmful to startups that want to protect their users.
Tech rallying behind open use of software interfaces. Many in the tech industry are speaking out as the U.S. Supreme Court prepares to hear oral arguments later this year in the long-running dispute over the permissible use of application programming interfaces (APIs), which startups and other companies rely on to promote interoperability and reduce costs. Engine submitted an amicus brief in the case, Google v. Oracle, arguing that APIs should not be protected through copyright, and that Oracle's attempt to extend copyright protection to APIs represents “an end-run around the carefully constructed requirements and limitations of patent law” in a way that would unduly harm startups and entrepreneurs.
Administration releases draft of vertical mergers guidelines. The Trump administration released draft guidelines for how federal regulators should access vertical mergers for any anticompetitive concerns. While the Federal Trade Commission and Department of Justice have existing guidelines for horizontal mergers, the agencies have not updated the rules for vertical mergers—when one company acquires another company or startup further down in the supply chain process—since 1984.
Engine submits comments to USPTO on AI and IP. Engine submitted comments to the U.S. Patent and Trademark Office in response to the agency’s request for comment on how artificial intelligence impacts intellectual property law and policy. In our comments, we explain how the current law applies to allow startups to use data to train AI without running afoul of copyright law, and we urge policymakers to think carefully about the needs of innovative startups before making any changes.
Record number of patents issued in 2019. IFI Claims, a global data patent platform, said in a report that the U.S. Patent and Trademark office granted 333,530 patents last year, a 15 percent increase from 2018 and a new record-high. The study found that China—led by telecoms firm Huawei, which was tenth among the top 50 companies to be granted patents—received the fourth-most U.S. patents of any country last year.
Startup Roundup:
#StartupsEverywhere: Daphne, Alabama. MyTaask, a new Alabama-based project management tool, is using machine learning to help workers of all ages plan and fulfill their projects. We recently spoke with Thkisha Sanogo, the Founder and CEO of MyTaask, to learn a little more about her company and the Alabama startup ecosystem.
