You have a brand—a trademark—for your business. Perhaps it is a word, phrase, symbol, design, or a combination of these that identifies and distinguishes the source of goods or services. At its heart, trademark law is designed to protect the link between your brand and consumers’ expectations. The moment you start using your brand, you unlock some level of that protection simply from your use. That base level of protection can go a long way, but federal trademark law can help you maximize the protection around your brand with a trademark registration. Here are five of the key benefits of registering your trademark at the federal level:

1. Nationwide Coverage

In the United States, registering your trademark with the U.S. Patent and Trademark Office (USPTO) provides nationwide protection. This is particularly important if you plan to expand your business beyond your local area. Without registration, your trademark rights may be limited to the geographic area where you operate.

2. Deter Infringement

A registered trademark serves as a public notice of your ownership, deterring potential infringers from using a similar mark. It is listed in the USPTO’s database, making it easier for others to identify and avoid infringing on your trademark. Registering your mark leaves little question for others that you take your brand’s protection seriously.

3. International Protection

If you plan to expand your business internationally, a registered trademark can be the basis for obtaining trademark protection in other countries through the U.S.’s treaties and multilateral conventions. Having your U.S. registration in place can help save time and expense when you begin expanding to foreign markets.

4. Enhanced Enforcement

With a registered trademark, you have stronger enforcement capabilities. You can prevent the importation of infringing goods into the U.S. by recording your trademark with U.S. Customs and Border Protection. This helps protect your brand from counterfeit products.

5. Defensive Protections

A registration can also help protect you from later claims of infringement by others. Once a trademark is registered and maintained for a number of years, it can become increasingly difficult to challenge your ownership of the mark and the validity of the mark. In time, the registration reinforces your ownership rights and reduces the likelihood of successful challenges by third parties.

Registering your trademark is a strategic investment in your business’s future. It provides legal protection, enhances brand recognition, and offers numerous other benefits that can help your business thrive in a competitive market. If you are considering trademark registration, consulting with a legal professional can provide valuable guidance tailored to your specific needs.

Pending expected approval from Gov. Ron DeSantis, Florida’s Contracts Honoring Opportunity, Investment, Confidentiality, and Economic Growth (CHOICE) Act (summary available here) is expected to go into effect on July 1, 2025. Once in place, the CHOICE Act will significantly strengthen the ability of employers to protect their workforce, confidential information, and other business interests.

Going against the strong current of recent state legislation and federal efforts to limit the enforceability of similar agreements, Florida’s CHOICE Act would further enhance Florida’s already favorable landscape for drafting and enforcing non-compete agreements. While the CHOICE Act is more employer-friendly than the general trend elsewhere, employers with operations or workers in Florida still must satisfy the CHOICE Act’s specific requirements to take advantage of its protections.

What does the CHOICE Act do?

The CHOICE Act allows covered non-compete and garden leave agreements in Florida to extend up to four years from separation of employment. Courts are required to issue preliminary injunctions to enforce covered agreements unless the employee or contractor demonstrates the agreement is unenforceable or unnecessary to prevent unfair competition. The CHOICE Act places a high burden on employees and prospective new employers who attempt to dissolve or modify an injunction enforcing a covered non-compete or garden leave agreement.

Importantly, the CHOICE Act does not modify Florida’s existing non-compete statute, so any non-compete agreements which do not meet the CHOICE Act’s requirements may still be enforceable if they contain reasonable restrictions and meet a legitimate business interest such as protecting trade secrets.

Who does the CHOICE Act apply to?

The CHOICE Act applies to:

  • Covered employers – Any business or individual that employs a covered employee.
  • Covered employees – Any employee or independent contractor, excluding health care professionals, “who earns or is reasonably expected to earn a salary greater than twice the annual mean wage of the county in this state in which the covered employer has its principal place of business.” Recent average annual wages for each Florida county can be found here.
    • Per the CHOICE Act, “salary” means the base compensation, calculated on an annualized basis, which a covered employer pays a covered employee, including a base wage, a salary, a professional fee, or other compensation for personal services, and the fair market value of any benefit other than cash.
    • Per the CHOICE Act, salary does not include health care benefits, severance pay, retirement benefits, expense reimbursement, distribution of earnings and profits not included as compensation for personal services, discretionary incentives or awards, or anticipated but indeterminable compensation, including tips, bonuses, or commissions.
  • Covered agreements – Covered garden leave and non-compete agreements with either a covered employee who maintains a primary place of work in Florida (regardless of any choice of law provision); or a covered employer whose principal place of business is in Florida and the agreement identifies Florida in its choice of law provision.

The CHOICE Act does not apply to standalone confidentiality or non-solicitation agreements that do not contain non-competition restrictions.

Covered Non-Compete Agreements

Covered non-compete agreements under the CHOICE Act can restrict a covered employee from working for another employer up to four years after separation of employment in any geographic area if the individual is providing services for their new employer similar to the services they performed for the covered employer. Under the CHOICE Act, non-compete agreements do not require a reasonable geographic scope so long as any geographic scope is specified in the agreement.

To be enforceable under the CHOICE Act, the covered non-compete provision must:

  • Not exceed four years.
  • Advise the covered employee, in writing, of their right to seek legal counsel prior to entering into the covered non-compete agreement and allow the covered employee at least seven days to consider the offer before it expires.
  • Include a written acknowledgment from the covered employee they will receive confidential information or customer relationships during the course of their employment.
  • If the non-compete also contains a garden leave provision, specify the non-compete period is reduced day-for-day by any non-working portion of the notice/garden leave period.

Covered Garden Leave Agreements

The CHOICE Act authorizes garden leave agreements, which allows employers to require covered employees to provide advance notice (up to four years) before employment is terminated. During this garden leave period, employees remain on their employer’s payroll at their base salary (though discretionary bonuses aren’t required) and continue to receive benefits. Employers may still require the covered employee to continue working during the first 90 days of the garden leave period. After the initial 90-day garden leave period, covered employees may engage in non-work activities for the remainder of the notice period, including working for another employer with permission from the covered employer.

Similar to covered non-compete agreements, garden leave agreements require:

  • Seven days’ notice before signing.
  • Written advice about seeking legal counsel.
  • A written acknowledgment of access to confidential information or customer relationships.

Employers may reduce the salary and benefits of employees who engage in undefined “gross misconduct” during the garden leave/notice period and such reduction will not be considered a breach by the employer. Relatedly, covered employers may reduce the notice period if they provide at least 30-days’ advance notice in writing to the covered employee.

Best Practices For Employers With Florida Operations Or Florida Employees

  • Identify any workers who meet the definition of a “covered employee” (i.e., meet the compensation thresholds based on county wage data) and are not currently subject to a non-compete clause, to determine if one is necessary.
  • Upon identifying “covered employees,” determine whether the individuals serve in a key role and should be subject to a non-compete or garden leave agreement.
  • Review existing form non-compete clauses with current and former employees to assess compliance with the CHOICE Act and revise agreements as appropriate to include required notices, acknowledgements, and counsel advisories.
  • Review and revise hiring practices to include compliance with the notice periods for covered agreements and a determination whether prospective employees are subject to a covered agreement.

FUNDamentals is a periodic digest of news and information specifically for investment funds and investment advisors. In this issue, we highlight some fundraising trends, new marketing rule FAQs, fund liquidity trends (limited partners (LPs) acting as lenders, secondaries and continuation funds), tax changes in the One Big Beautiful Bill Act, and new compliance rules for the new year.

Click here to read this issue.

We offer full-service counsel to private equity, venture, real estate, hedge, and registered investment funds; investment companies; small business investment companies (SBICs); and investment managers and their respective sponsors, managers, advisors, and investors on transactional and legal regulatory issues in the United States and internationally. Our team advises clients in major jurisdictions throughout the United States, Canada, Europe, and Asia.

You have a brand—a trademark—for your business. Perhaps it is a word, phrase, symbol, design, or a combination of these that identifies and distinguishes the source of goods or services. At its heart, trademark law is designed to protect the link between your brand and consumers’ expectations. The moment you start using your brand, you unlock some level of that protection simply from your use. That base level of protection can go a long way, but federal trademark law can help you maximize the protection around your brand with a trademark registration. Here are five of the key benefits of registering your trademark at the federal level:

1. Nationwide Coverage

In the United States, registering your trademark with the U.S. Patent and Trademark Office (USPTO) provides nationwide protection. This is particularly important if you plan to expand your business beyond your local area. Without registration, your trademark rights may be limited to the geographic area where you operate.

2. Deter Infringement

A registered trademark serves as a public notice of your ownership, deterring potential infringers from using a similar mark. It is listed in the USPTO’s database, making it easier for others to identify and avoid infringing on your trademark. Registering your mark leaves little question for others that you take your brand’s protection seriously.

3. International Protection

If you plan to expand your business internationally, a registered trademark can be the basis for obtaining trademark protection in other countries through the U.S.’s treaties and multilateral conventions. Having your U.S. registration in place can help save time and expense when you begin expanding to foreign markets.

4. Enhanced Enforcement

With a registered trademark, you have stronger enforcement capabilities. You can prevent the importation of infringing goods into the U.S. by recording your trademark with U.S. Customs and Border Protection. This helps protect your brand from counterfeit products.

5. Defensive Protections

A registration can also help protect you from later claims of infringement by others. Once a trademark is registered and maintained for a number of years, it can become increasingly difficult to challenge your ownership of the mark and the validity of the mark. In time, the registration reinforces your ownership rights and reduces the likelihood of successful challenges by third parties.

Registering your trademark is a strategic investment in your business’s future. It provides legal protection, enhances brand recognition, and offers numerous other benefits that can help your business thrive in a competitive market. If you are considering trademark registration, consulting with a legal professional can provide valuable guidance tailored to your specific needs.

On June 9, Deputy Attorney General Todd Blanche released a much-anticipated update to the Trump administration’s plans for enforcement of the Foreign Corrupt Practices Act (FCPA).

The Guidelines for Investigations and Enforcement of the Foreign Corrupt Practices Act (FCPA) demonstrate that FCPA enforcement will continue under the Trump administration, but the Department of Justice’s (DOJ) focus will be much different than under prior administrations. Further, the DOJ’s enforcement standards will be different, with guaranteed declination of enforcement for those companies that “voluntarily self-report, cooperate, and remediate,” as established in the revised Criminal Division Corporate Enforcement and Voluntary Self-Disclosure Policy (CEP) and articulated by Head of the DOJ’s Criminal Division Matthew Galeotti in his June 10 remarks.

Background

The guidelines follow a series of announcements by the administration in February regarding the FCPA. On February 5, Attorney General Pamela Bondi released a memorandum detailing the administration’s goal of pursuing the “total elimination of cartels and transnational criminal organizations (TCOs).”

Just five days later, on February 10, President Trump signed Executive Order 14209, Pausing Foreign Corrupt Practices Act Enforcement to Further American Economic and National Security, which detailed plans for revised guidelines to further the administration’s policy of “preserv[ing] the Presidential authority conduct foreign affairs and advance American economic and national security by eliminating excessive barriers to American commerce abroad.”

For an in-depth analysis of this Executive Order, see Troutman Pepper Locke’s February 18 alert, Trump Pauses FCPA Enforcement: Implications for Corporate Compliance Strategies.

On May 12, Galeotti released a memorandum on the Focus, Fairness, and Efficiency in the Fight Against White-Collar Crime as well as the revised CEP, which together highlighted the administration’s general white collar enforcement priorities and revised policy to guarantee declinations of enforcements where companies voluntarily self-reported.

For an in-depth analysis of this memorandum, see Troutman Pepper Locke’s May 14 alert, DOJ’s Criminal Division Announces Updates to White-Collar Enforcement and Corporate Policies.

The Guidelines

The guidelines affirm the Trump administration’s prior directives.

Specifically, the guidelines seek to “ensure that FCPA investigations and prosecutions are carried out in accordance with President Trump’s directive by (1) limiting undue burdens on American companies that operate abroad and (2) targeting enforcement actions against conduct that directly undermines US national interests.”

To accomplish this, the guidelines detail a series of non-exhaustive factors that the DOJ is to consider in evaluating whether to pursue FCPA investigations and enforcement actions:

  • Total Elimination of Cartels and TCOs

    In accordance with Bondi’s February 5 memorandum, the DOJ will pursue investigations and enforcement actions when the corrupt payment: (1) is associated with criminal operations of a cartel or TCO; (2) paid to cartels or TCOs through money laundering schemes, including the improper use of shell companies; or (3) is linked to foreign officials or state-owned entities who are known to take bribes from cartels or TCOs. This marks a shift in the DOJ’s use of the FCPA, from prior administrations, when payments to benefit cartels and TCOs were typically investigated and enforced under other criminal statutes. Such cartel and TCO-related violations are also a new priority area of focus for the DOJ’s Criminal Division’s Corporate Whistleblower Awards Pilot Program.

  • Fair Opportunities for U.S. Companies

    The DOJ will prioritize bribes that negatively impact U.S. business opportunities abroad and consider whether the alleged misconduct caused economic injury or deprivation of fair access to specific and identifiable U.S. entities.

  • U.S. National Security

    In line with the administration’s view of U.S. economic competitiveness as important to national security, the DOJ will prioritize enforcement where the misconduct implicates American national security interests in the form of key infrastructure or assets like critical minerals and deep-water ports.

  • Strong Indicia of Corrupt Intent Tied to Specific Individuals and Serious Misconduct

    The DOJ will also prioritize enforcement and investigation of specific individuals for serious instances of misconduct bearing “strong indicia of corrupt intent”— “substantial bribe payments, proven and sophisticated efforts to conceal bribe payments, fraudulent conduct in furtherance of the bribery scheme, and efforts to obstruct justice”— rather than routine business practice misconduct or de minimus corporate conduct. This policy shift flows directly from the priorities articulated in Executive Order 14209 to ensure that the FCPA is not “used against American citizens and businesses . . . for routine business practices in other nations” and demonstrates a movement away from enforcement of nonspecific corporate structure malfeasance or technical violations. Indeed, as Galeotti noted in his remarks on behalf of the DOJ, the guidelines focus on “specific misconduct of individuals, rather than collective knowledge theories.” These remarks signal that the DOJ may narrow its interpretation of the FCPA’s knowledge requirement in its corporate enforcement actions, potentially raising the threshold for corporate entity conduct that could constitute an FCPA offense.

Notably, the guidelines also explicitly direct prosecutors to consider an investigation’s impact to the target company’s business and potential disruption of business throughout the investigation, rather than just at resolution. This further signals the administration’s overarching policy goal of promoting American business and consideration of corporate impact.

Implications for Corporate Compliance

These guidelines also affirm that the DOJ intends to continue investigations and enforcement under the FCPA. Relatedly, the SEC, which conducts civil enforcement of FCPA anti-bribery and accounting provisions, has not announced any intent to change its enforcement, though its Deputy Director of Enforcement for the Northeast, Antonia Apps, remarked in April that the agency would follow the DOJ’s lead.

While the guidelines detail new priorities, the legal framework of the FCPA remains unchanged, and only Congress has the authority to amend or repeal the statute. Moreover, the FCPA’s anti-bribery provisions have a five-year statute of limitations, meaning that past violations can still be prosecuted, and future violations will likely outlive the current administration. Additionally, conduct that implicates the FCPA often implicates other U.S. criminal statutes—such as the Racketeer Influenced and Corrupt Organizations Act (RICO), the Travel Act, and other laws regarding campaign finance, wire fraud, and anti-money laundering, False Claims Act actions, and foreign criminal statutes.

In light of these guidelines, companies should consider:

  1. Maintaining Robust Compliance Programs: Companies should continue to uphold strong anti-bribery and anti-corruption policies. These Guidelines communicate that the Trump Administration does intend to continue FCPA enforcement and investigations.

  2. Issuing Guidance and Reminders to Internal Stakeholders: Companies should proactively issue communications to internal stakeholders about the FCPA’s impact on company compliance and reiterate that employees should continue to adhere to existing policies. Consider providing updated training to re-emphasize these points.

  3. Evaluating Risk Exposure: Companies currently under investigation or with active deferred prosecution agreements (DPAs) and non-prosecution agreements (NPAs) should assess their risk exposure. The DOJ’s review of existing actions may offer opportunities to seek closure or modification of ongoing matters.

  4. Considering Self-Disclosure When FCPA Priorities Are Implicated: The DOJ is encouraging voluntarily self-disclosure of misconduct and has promised to decline to bring an enforcement action where companies do self-disclose. While this is a greater benefit than that offered for self-disclosure under the Biden administration, companies still need to carefully evaluate their specific factual scenarios and how they fit with the Trump administration’s priorities.

If you are currently under investigation for an alleged violation of the FCPA or have questions on how the executive order will impact your business, please do not hesitate to contact a member of Troutman Pepper Locke’s White Collar Litigation and Government Investigations practice.

Scam notices are being sent to those who have filed trademark applications with the U.S. Patent and Trademark Office (USPTO) or already own a registered mark. The notices are designed to exploit publicly available information, and these fraudulent communications often create a false sense of urgency or appear to be official communications and typically request payment for services such as trademark monitoring, renewal, or registration in various directories. The USPTO does not send out notices like these or solicit payment in this way, and you should not respond to these scams.

Key Points to Remember:

  1. Verify the Source: Any official correspondence regarding your trademark application should come directly from the USPTO (and not an imposter like the World Trademark Registry) or your trademark agent. If you receive a notice that does not originate from the law firm or trademark agent handling your trademark application, please exercise caution. USPTO website addresses end in .gov, and emails directly from the USPTO end in @uspto.gov. Additionally, watch for any variations of “United States Patent and Trademark Office,” such as “Patent and Trademark Bureau” or “Trademark Renewal Service” – which are not part of the USPTO.

  2. Proceed with Caution. Some communications state that another entity or person is trying to register your exact mark and that the correspondent is confirming that you wish to allow this to happen. This is designed to create a false sense of urgency, and the information in the notice is not true. However, if you act quickly and without care, you can easily make a payment or disclose sensitive information when you had no reason to do so.

  3. Confirm with Your Trademark Agent: If you are uncertain about the authenticity of any notice, we strongly encourage you to contact your trademark agent directly. You can also contact our firm’s trademark team. We are here to assist you in verifying any suspicious communications. There is often a demand for immediate action or payment that is not actually due, and this is usually accompanied by a threat of losing your trademark rights if you do not pay. Resist the urge to respond immediately and confirm with your trademark agent or trusted legal advisor instead.

  4. USPTO Scam Warnings: The USPTO provides resources to help identify and avoid these scams. We recommend reviewing their guidance to better understand the nature of these fraudulent activities. Common scams include spoofing websites, spoofing phone numbers, emails from imposters, and fraudulent solicitations. You can find more information on the USPTO’s official scam warnings page here.

Action Steps:

  • Do not respond to or pay any invoices from unknown sources without verification from your trademark agent or law firm.

  • Contact Your Attorney or Paralegal Representative if you have any questions or need assistance in verifying a notice.

  • Stay informed by regularly checking the USPTO’s website for updates on known scams. Be sure to never share your password for your USPTO.gov account.

We are committed to ensuring the security and integrity of your trademark applications. Please do not hesitate to reach out to us for any further clarification or support.

Investment funds and other financial institutions should learn lessons from this case, including the risk of dealing with intermediaries.

On June 12, the U.S. Department of the Treasury’s Office of Foreign Assets Control (OFAC) imposed a civil penalty of approximately $216 million on GVA Capital Ltd., a venture capital firm based in San Francisco, for violations of OFAC’s Russia regulations and failing to fully comply with a subpoena. This is a rare instance of OFAC imposing its statutory maximum civil penalty, and signals the high compliance expectations that OFAC has of “gatekeepers” like investment funds and other financial institutions.

Background

GVA was accused of managing an investment for Suleiman Kerimov while aware that he was sanctioned by OFAC. Kerimov is a prominent Russian businessman who was sanctioned in 2018. The GVA investment was initiated before Kerimov was sanctioned, but OFAC accused GVA of continuing to manage it after the sanctions by working with Kerimov’s nephew, while allegedly aware that he “served as Kerimov’s proxy.”

In 2016, before Kerimov was sanctioned, GVA’s senior management met him in person to discuss an opportunity to invest in an early-stage U.S. company. The GVA team got positive feedback and were told to discuss the details with Kerimov’s nephew, Ruslan Gadzhiyev. Kerimov then made a $20 million investment in the U.S. company backed by GVA, with the funds coming from a Guernsey-based entity. There was press reporting in 2022 about such an investment in Luminar Technologies, and additional reporting in 2023 about another such investment in a former Catholic church property that was to become a GVA-backed incubator called the “Startup Temple.”

At the time of the investment, there were no applicable sanctions. Kerimov was sanctioned by OFAC two years later, in 2018, and Gadzhiyev in 2022. After OFAC sanctioned Kerimov in 2018, GVA got a legal opinion, which OFAC, remarkably, said “concluded incorrectly” that the Guernsey entity that had made the investment “was not itself” subject to sanctions “because it was not nominally owned 50 percent or more by a person on the SDN List.” OFAC seemed to hint that among the shortcomings with the legal opinion was an inadequate exploration of the entity’s links to Kerimov. OFAC’s sanctions can apply quite broadly when a “blocked” person like Kerimov has any “interest of any nature whatsoever, direct or indirect,” in an asset like this U.S. company’s shares.

OFAC stated cryptically that in April 2021 it somehow “learned” of an upcoming transfer of shares in the U.S. company and conducted an investigation. OFAC determined that the shares were owned by Heritage Trust, a Delaware trust. Then, in 2022, OFAC issued a rare Notification of Blocked Property to Heritage Trust, stating publicly that this trust held over $1 billion in assets that were connected to Kerimov.

OFAC could have learned of this planned share transfer and the potential sanctions connection in a variety of ways, including reporting by any one of the numerous financial institutions that presumably would have been involved. OFAC may have also learned about it from the litigation that apparently the parties were engaged in about the value of the interest in the U.S. company. OFAC did indicate that it was tracking that litigation.

OFAC determined that, after the sanctions were imposed on Kerimov in 2018, GVA continued to manage transactions by entities owned by Heritage Trust involving this U.S. company’s shares. GVA had a “formal” line of communication with the trust’s U.S.-based fiduciary and an “informal” line to Kerimov’s nephew, Gadzhiyev. OFAC found that GVA knew of Kerimov’s interest, with Gadzhiyev acting as his representative. On this basis, OFAC determined that GVA violated the sanctions applicable to Kerimov.

As part of the investigation, OFAC issued an administrative subpoena to GVA in June 2021, and GVA provided approximately 173 documents in response. Then, over two years later, after OFAC issued a pre-penalty notice to GVA, it suddenly produced another 1,300 or so documents to OFAC that it said were also responsive to the subpoena. OFAC found this 28-month delay in the full subpoena response to constitute 28 separate violations of its reporting regulations, which were in addition to the violations of the sanctions applicable to Kerimov.  OFAC’s Enforcement Guidelines state that additional penalties “may be imposed each month that a party has continued to fail to comply with the requirement to furnish information.”

Key Takeaways

Investment funds and others should take away the following key lessons from this case:

  • Shell games typically don’t work in OFAC’s world. Dealing with an intermediary, nominee, offshore company, complex trust structure, etc. often won’t provide any protection if an OFAC sanctions target is behind the scenes and information about that ultimate beneficiary is available. OFAC is not afraid to dig deeply into the facts and impose devastating penalties when it finds a violation, particularly when the agency deems the conduct to be “egregious,” as it did here.
  • An opinion from outside counsel won’t necessarily help if it’s not based on a thorough exploration of the facts and a clear understanding of the nuances of OFAC’s regulations.
  • If you get an OFAC subpoena, don’t play games with partial responses – provide a robust and well-vetted response the first time.

On June 4, 2025, the U.S. Securities and Exchange Commission (SEC) published a concept release soliciting public comment on the definition of a foreign private issuer (FPI) and whether changes are needed to reflect the current state of the U.S. markets. Concept releases typically outline a topic of concern, identify different potential approaches, and raise a series of questions for public input.

Currently, FPIs benefit from many accommodations that provide full or partial relief from certain disclosure requirements under U.S. federal securities laws. The population of companies that qualify as FPIs has changed significantly since 2003, which is the last time the SEC conducted a broad review of publicly-reporting FPIs and the eligibility criteria for FPI status. These trends led the SEC to publish the concept release to solicit public comments about whether the current definition should be amended to further protect U.S. investors, while still allowing flexible, practical standards for FPIs to promote capital formation.

Background on FPIs

Under the current definition, an FPI is any company that is a foreign issuer, other than a foreign government, except for an issuer meeting the following conditions as of the last business day of its most recently completed second fiscal quarter: (i) more than 50% of its outstanding voting securities are directly or indirectly held by U.S. residents, and any of the following: (A) a majority of its executive officers or directors are U.S. citizens or residents; (B) more than 50% of its assets are located in the U.S.; or (C) its business is administered principally in the U.S.

FPIs are exempt from certain SEC disclosure and filing requirements because FPIs are typically subject to robust disclosures in their home country jurisdictions where their securities are also publicly traded. The SEC’s policy has therefore historically considered it too burdensome and costly to require FPIs to fully comply with the same requirements as domestic public companies.

Overview of Findings in the Concept Release

The concept release contains extensive data about FPIs subject to reporting obligations under the Securities Exchange Act of 1934, as amended (Exchange Act), that was collected and analyzed by the SEC’s Staff (the Staff). The Staff’s findings show that there have been significant changes in the home country jurisdictions of FPIs since 2003. Specifically, the two most represented FPI jurisdictions in 2003 were Canada and the U.K. In 2023, however, the most common FPI jurisdiction of incorporation was the Cayman Islands, and the most common headquarters jurisdiction was China. Additionally, the SEC staff found a substantial increase in FPIs with disconnected jurisdictions of incorporation and headquarters — from 7% in 2003 to 48% in 2023.

The Staff concluded that global trading of equity securities of Exchange Act reporting FPIs has become increasingly concentrated in the U.S. capital markets over the last decade and, as of 2023, approximately 55% of these FPIs appear to have had little or no trading of their equity securities on exchanges outside the U.S. As a result, the U.S. is effectively the exclusive or primary trading market for many FPIs, which runs counter to the expectation that FPIs generally have their equity securities meaningfully traded outside the U.S. on a foreign exchange.

SEC’s Call for Public Comment on Amending the FPI Definition

Based on the findings of the Staff’s review, the SEC has published the concept release to solicit public comments on amending the FPI definition. Amending the FPI definition could potentially modify the current accommodations and exemptions from disclosure and reporting requirements under federal securities laws afforded to FPIs.

For example, the concept release seeks public input on the following possible approaches to amending the FPI definition:

  • Updating the existing FPI eligibility criteria. The existing FPI eligibility criteria could be updated, such as potentially reducing the existing 50% threshold of U.S. holders in the shareholder test, or adding new criteria for the business contacts test.

  • Adding a foreign trading volume requirement. Adopting a foreign trading volume requirement test could require FPIs to assess their foreign and U.S. trading volume on an annual basis and impose a minimum percentage of foreign trading volume to maintain FPI status.

  • Adding a major foreign exchange listing requirement. This change would require FPIs to be listed on a major foreign exchange, which would also require defining the criteria for a “major” foreign exchange.

  • Incorporating an SEC assessment of foreign regulation applicable to the FPI. This possible SEC assessment could require FPIs to (1) be incorporated or headquartered in a jurisdiction where the SEC has determined there is a robust regulatory and oversight framework for issuers; and/or (2) be subject to such securities regulations and oversight without modification or exemption.

  • Establishing new mutual recognition systems. The SEC could establish new mutual recognition systems with respect to registration under the Securities Act of 1933, as amended, and periodic reporting under the Exchange Act for FPIs from selected jurisdictions. These new mutual recognition systems would be similar to the mutual recognition approach under the current Multijurisdictional Disclosure System (MJDS) for Canadian issuers.

  • Adding an international cooperation arrangement requirement. An international cooperation arrangement requirement could require FPIs to certify that they are either incorporated or headquartered in a jurisdiction with a securities authority that has signed the International Organization of Securities Commissions Multilateral Memorandum of Understanding (MMoU) or Enhanced MMoU.

The public comment period will remain open for 90 days, or until September 8, 2025. The SEC is seeking comments on all aspects of the concept release, including potential regulatory responses, alternative approaches, and the costs, burdens, and/or benefits of any proposed changes.

Impact of a Change in the FPI Definition

SEC Chairman Paul S. Atkins noted in response to the publication of the concept release that “[a]ttracting foreign companies to U.S. markets and providing U.S. investors with the opportunity to trade in those companies under U.S. laws and regulations remains an objective, [but] that objective must be balanced with other considerations, including providing investors with material information about these foreign companies, and ensuring that domestic companies are not competitively disadvantaged with respect to regulatory requirements.”

The concept release also highlights that a potential impact of recent trends is that FPIs may not be subject to equivalent disclosure rules in their home jurisdictions, depending on the regulatory regimes in those jurisdictions. Instead, the Staff is concerned that FPIs may be benefitting from U.S. markets, while their home jurisdictions’ rules fail to provide equivalent transparency and accountability to investors. Given current U.S. foreign policy, we think the Staff appears to be especially concerned about FPIs that are incorporated in the Cayman Islands and headquartered in China — effectively bypassing their home country exchange rules and solely leveraging U.S. securities exchanges and markets. Changes to the FPI definition could disproportionally, and perhaps unintentionally, impact good-faith FPIs, especially companies in Australia, Canada, and the U.K., that are already subject to meaningful securities oversight in their home country jurisdictions.

Troutman Pepper Locke attorneys assess California’s collaboration with other foreign governments on promoting privacy rights and what this means for the future of data protection worldwide.

The California Privacy Protection Agency recently announced that it signed a declaration of cooperation on privacy protections or collaboration with the UK Information Commissioner’s Office, its latest collaboration with a foreign government.

Click here to read the full article on Bloomberg Law.

In the previous installment of the Cooler Wars, we explored how patents protect the functional aspects of a product and where those protections fall short. YETI, a well-established brand known for its premium outdoor products, initiated legal action against RTIC, a newer competitor, alleging in part that RTIC’s products too closely resembled YETI’s distinctive designs. One aspect of their dispute stemmed from YETI’s efforts to protect the unique visual identity it had cultivated in the highly competitive cooler market: their trade dress, which is our focus today.

While patents cover what a product does and how it works, trade dress protects how a product looks and feels. In competitive consumer markets, that distinction matters. Recent cases like Benefit and e.l.f. Cosmetics’ mascara showdown reinforced how courts evaluate these claims, including whether consumers are in fact confused, how products are packaged and sold, and if the alleged infringer actually intended to deceive. The court found no infringement on e.l.f.’s end, in part because its packaging prominently displayed its own branding, the products were sold in clearly separate channels, and beauty consumers were deemed savvy enough to tell the difference, despite some visual similarities.

Click here to read the full article on IP Watchdog.