April 2010 Client Alerts

May 1, 2010

Authored by: Jeannie Osborne

IRS Releases Guidance on Tax Treatment of Employer-Provided Health Care Coverage for Children under Age 27.

On April 27 the IRS issued Notice 2010-38 discussing the tax treatment of employer-provided medical care coverage for employees’ adult children up to age 27.  For more information please click here for a copy of the Employee Benefits and Executive Compensation Bulletin which discusses the Patient Protection and Affordable Care Act enacted in late March and outlines the guidance provided in the IRS Notice.

Cobra Premium Subsidy Extended

On April 15 President Obama signed into law H.R. 4851, the Continuing Extension Act of 2010 extending the eligibility period for the COBRA subsidy until May 31, 2010.  For more information, please click here for a copy of the Employee Benefits and Executive Compensation Client Bulletin which provides an overview of the extension provisions and highlights what group health plan sponsors need to know.

Antitrust Agencies Propose New Merger Guidelines

On April 20 the Federal Trade Commission released provisions of the Horizontal Merger Guidelines.  Last updated in 1997, the Proposed Guidelines provide the business community with an overview of how antitrust agencies analyze proposed mergers between competitors.    Click here for a copy of the Antitrust, Franchise & Consumer Law Client Bulletin which outlines the signficant changes proposed to the guidelines.

Tiffany Blue: eBay Not Liable For Sale of Counterfeit Goods

In Tiffany Inc. v. eBay Inc., 08-3947-cv (April 1, 2010), the United States Court of Appeals for the Second Circuit affirmed the trial court’s ruling that eBay had neither directly nor contributorily infringed Tiffany’s trademark rights through the sale of counterfeit Tiffany merchandise on eBay’s site. For more information, please read the client alert published by Bryan Cave’s Intellectual Property Client Service practice on April 7, 2010.

FDA Seeks Comments, Information, and Data on Front-of-Pack Labeling and Shelf Tag Symbols

FDA is continuing its efforts to maximize the number of consumers who use point-of-purchase information to make nutritious choices for themselves and their familes.  For more information, please read the Food Regulatory & Policy Bulletin published by the Food and Drug Administration practice on April 29, 2010.

IOM Calls on FDA to Change GRAS policy on Salt

In response to a Congressional request in 2008, The Institute of Medicine (IOM) released a report on Tuesday, April 20, 2010, Strategies to Reduce Sodium Intake in the United States, concluding that “Americans consume unhealthy amounts of sodium in their food.” For more information, please read the Food & Regulatory Policy Bulletin dated April 27, 2010 published by the Food & Drug Administration practice on April 27, 2010.

FDA to Undertake Home Device Initiative

The FDA has announced that it is undertaking a new initiative to ensure that caregivers and patients safely use complex medical devices in the home. Under the initiative, the agency will develop guidance for manufacturers who intend to market a device for home use, provide for postmarket surveillance, and put in place other measures to encourage safe use of these products. For more information, please read the Drugs & Devices Regulatory & Policy Bulletin published by the Food & Drug Administration practice on April 27, 2010.

Industry Reps: FDA Interacting Less with Industry

In their comments regarding ways in which the FDA can improve its openness to industry, industry representatives commented that they have noticed a trend of the FDA being more reluctant to interact with them. To learn more, please read the Drugs & Devices Regulatory & Policy Bulletin published by the Food & Drug Administration practice on April 20, 2010.

Senate Once Again Delays Food Safety Vote

After much anticipation that the Senate, having finally passed health care reform, would take up the food safety bill (S.510) , the vote was once again postponed. Wall Street reform will be the next issue to occuply the Senate floor and is anticipated to last for two weeks. For more information, please read the Food Regulatory & Policy Bulletin published by the Food & Drug Administration practice on April 19, 2010.

Device Industry Pushes for Preemption on Payment Reporting

Representatives of the device industry have indicated that they support the new federal mandate requiring disclosure of payments to physicians, but are pushing for federal preemption, so as to ensure only one set of regulations govern such reporting. For this and other news, please read the Drugs & Devices Regulatory & Policy Bulletin published by the Food and Drug Administration practice on April 16, 2010.

FDA to Increase Prosecutions

The FDA has stated that it will increase prosecutions against corporate officials as part of a drive to improve its Office of Criminal Investigations. For more information and other news, please read the Drug & Devices Regulatory Policy Bulletin published by the Food and Drug Administration practice on April 16, 2010.

FDA Issues Proposed DTC Advertising Rule

The FDA has indicated that it intends its new proposed rule on direct-to-consumer prescription drug advertising to be consistent with a more flexible approach and that it does not intend to prescribe a set formula for “clear, conspicuous and neutral” statements of risk because there is more than one way to meet the agency’s standards.  For more information on this and other news, please read the Drug & Devices Regulatory Policy Bulletin published by the Food and Drug Administration practice on April 9, 2010.

Tax Credit in Health Reform in Law May Benefit BioPharmas

In addition to establishing a legal framework for biosimilars and allowing for 12 years of marketing exclusivity for innovative products, the new health reform law also established other mechanisms which could provide benefits to pharmaceutical and biotech companies, including tax credits and research funding.  For more information and other news, please read the Drug & Devices Regulatory Policy Bulletin published by the Food and Drug Administration practice on April 7, 2010.

FDA Faces Allegations of Retaliation

The FDA is finding itself under fire regarding allegations of retaliation and misconduct by FDA device center managers toward agency scientists and physicians who expressed concerns about a product.  To read more about this and other news, please read the Drug & Devices Regulatory Policy Bulletin published by the Food and Drug Administration Practice on April 2, 2010.

400 Experts Meet in DC to Discuss Food Safety

On March 31, 2010, FDA, CDC and USDA’s FSIS hosted a joint public workshop, Measuring Progress on Food Safety:  Current Status and Future Directions, in Washington, D.C. that drew 400 experts, including leaders in public health, science, the food industry, and public advocacy.  Food Safety News reported extensively on the conference.   To read more about the conference and other news, please read the Drug & Devices Regulatory Policy Bulletin published by the Food and Drug Administration Practice on April 2, 2010.

White House Rhetoric Points to Energy and Climate Bill

The Obama Administration is making the case for congressional action on the next large plank of the President’s domestic agenda — capping carbon emissions.  For more information on this and other news, please read the Bryan Cave Energy Update Issue 35 published April 16, 2010 by the Energy Industry Team.

Administration Takes on Energy Bill

The Obama administration made a tandem effort between the White House climate advisor, Carol Browner, and National Economic Council director, Lawrence Summers, to shape the growing climate debate week.  By stressing a bill that caps emissions is “beneficial to a battered economy,” the administration hopes to achieve a “comprehensive legislation.”  For more information on this and other news, please read the Energy Industry Team’s Energy Update Issue 34 published April 9, 2010.

White House Finalizes Fuel Standards

This week the Obama Administration released new gas mileage standards for cars and trucks, which calls for vehicles releated in 2016 to meet fuel efficiency targets of 34.1 miles per gallon (mpg), an increase of 10 mpg over current requirements.  The new rules are expected to reduce carbon dioxide emissions by 960 million metric tons over the lifetime of covered vehicles.  For more information on the new fuel standards and other news, please read the Energy Industry Team’s Energy Update Issue 33 published April 2, 2010.

Companies with Distribution or Franchising Operations in the European Union – Adoption of Regulation 330/2010/EC (on the application of Article 101(3) to categories of vertical agreements and concerted practices)

Under EU antitrust law, Article 101(1) of the Treaty on the Functioning of the European Union prohibits agreements and concerted practices among firms which may affect trade between Member States and “have as their object or effect the prevention, restriction or distortion of competition within the internal market.”  For more information, please read the Briefing published by the Antitrust Client Service Group dated April 28, 2010.

New UK Equality Act

The Equality Act 2010 received Royal Assent on 8 April 2010.  The majority of the provisions under the Act are due to come into force in October 2010.  The Act, which replaces existing separate legislation for each strand of discrimination law (for example, sex, race, sexual orientation, etc.), purports to unify and harmonise the law surrounding discrimination and equality.  For more information on the new Act, please read the Briefing published by the Labor and Employment Client Service Group dated April 20, 2010.

U.S. and Brazil Avoid Trade Retaliation in Cotton Dispute

On April 6, 2010, the United States and Brazil reached an agreement on a negotiated solution toward settling the long-standing cotton subsidies dispute.  The agreement comes one day before Brazil was to begin implementation of up to $830 million in trade sanctions authorized by the World Trade Organization.  For more information on the agreement, please read the Bulletin published by the International Trade group on April 7, 2010.

New Considerations for Importers of Plant and Plant Products Under Lacey Act

The Lacey Act (16 U.S.C. Sec. 3371 et seq.) is the oldest wildlife protection statute in the united States and the primary tool to combat illegal trafficking of wildlife, fish and plants.  First enacted in 1900, the Lacey Act underwent significant changes in 1981 and 1988.  In 2008, the Lacey Act was expanded to include tougher enforcement of plant and plant products, and to require declarations covering plant products to the U.S. Department of Agriculture (USDA) upon importation.  For more information, please read the International Regulatory Bulletin published April 15, 2010 by the International Trade group.

Export Control Developments – Malaysia Prepares to Implement Control of Strategic Trade

Malaysia has long been considered a “loophole” for export control in Asia, representing a high risk of diversion of strategic items to Iran and Libya.  To reflect Malaysia’s commitment to the United Nations Security Council Resolution 1540 and to prevent design, development and production of weapons of mass destruction (“WMD”) and their delivery systems, in early April 2010, Malaysia’s House of Representatives passed the Strategic Trade Bill 2010.   For more information, please read the April 2010 Asia Trade Alert published by the International Trade group.

China Customs in Pursuit of “Assists”

In the first quarter of 2010, China Customs’ tax revenue gains from valuation reviews alone amounted to more than USD 300 million.  This is an indication of the zealousness of China Customs in pursuing extra revenue through valuation.  For more information, please read the April 22, 2010 Asia Trade Alert published by the International Trade group.

China Issues Draft Rules on National Indigenous Innovation Product

China’s National Development and Reform Commission (“NDRC”), the Ministry of Science and Technology and the Ministry of Finance recently issued draft rules on the accreditation of indigenous innovation products.  The scope of the products covered by the accreditation includes:  computing and application hardware, telecommunications hardware, modern office equipment, software, new-energy products, and highly efficient energy-reducing products.  For more information, please read the International Regulatory Bulletin dated April 19, 2010 published by the International Trade group.

China Customs Focuses on Royalties & Related Party Transactions in 2010/11

We have welcomed the year of the Tiger and all that it will bring to the business community in China in 2010.  In 2009, we witnessed the increase in enforcement actions by the State Administration of Taxation, with the chanes in transfer pricing legislation and the requirement for self audits by named companies.  In 2010/11, the focus for China Customs is likely to be on related company transactions and royalty payments.  For more information, please read the Asia Trade Alert published by the International Trade group dated April 6, 2010.