International News: COVID-19 - McDermott Will & Emery

International News: COVID-19


These extraordinary times are prompting an exceptional response from every field of business across every sector. There is often talk of constantly evolving regulatory and commercial landscapes, but there has never been a pace of change as rapid as this, with daily updates being made to what was previously considered immutable legislation. The European Commission has confirmed that the Coronavirus (COVID-19) crisis justifies derogation from normal conformity assessment procedures for certain items, the Medical Device Regulation has been postponed by a year, and EU antitrust and State aid rules have been relaxed.

Businesses are responding and adapting to the most immediate challenges, while also keeping an eye on longer term issues, such as data security when employees are working from home. There is, however, light at the end of the tunnel and, of course, there are other developments that have nothing to do with the current health crisis but still need to be understood and acted upon.

We explore all these issues and more, in our latest International News.


EU Antitrust and State Aid Rules Relaxed to Help Businesses

Sabine Naugès | Christian Krohs

The European Commission and European Competition Network (ECN) have taken unprecedented action to try and relieve the pressure on businesses and consumers.

On 8 April 2020, the European Commission issued a Temporary Framework Communication, providing guidance and criteria regarding competitor collaboration projects in response to the economic shocks caused by the Coronavirus (COVID-19) crisis. The focus is on collaboration projects aimed at mitigating or eliminating shortages of “essential scarce products and services”—especially critical medicines—even if such collaboration may otherwise risk infringing competition laws.

While companies remain responsible for assessing their own proposed conduct, the European Commission will provide informal, oral guidance to businesses or—exceptionally—a “comfort letter” to allow projects to be implemented quickly. At the same time, businesses are cautioned that opportunistic anticompetitive conduct, such as limiting supply or abusing a dominant position by charging excessive prices, will be targeted for enforcement.

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Working (Cyber) Safely From Home During COVID-19

Mark E. Schreiber

Amid the Coronavirus (COVID-19) pandemic, more people than ever before are working remotely from home. This raises new cyber security challenges for businesses but there are ways to mitigate the risk.

This sudden shift to working from home significantly increases cyber risks to businesses. The United States Department of Homeland Security and Cybersecurity and Infrastructure Security Agency, together with the United Kingdom’s National Cyber Security Centre, issued a joint alert on how COVID-19 is being exploited by malicious cyber actors. The French National Information Security Agency, the ANSSI, has also noted an increase in fraud related to the public health emergency and attempts to exploit COVID-19 for phishing or scams. There are, however, steps individuals and organisations can take to help reduce cybersecurity risks.

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Issuing and Responding to Force Majeure Notices

Lisa M. Richman | Tom Ryan | Andrew Savage

Some companies may be viewing force majeure provisions as a tool to respond to loss of revenue caused by the Coronavirus (COVID-19) pandemic. It is therefore crucial that businesses are aware of their contractual rights, potential exposures and legal remedies.

As recent news articles have made clear, the enforceability of contracts is coming into question owing to the pandemic. This uncertainty is partly caused by the various lock down orders that can prevent actual performance of the contract; plus companies may be invoking force majeure or similar provisions to either delay or avoid monetary expenditures. At a minimum, force majeure provisions are being used to renegotiate certain contracts.

It is crucial, given these developments, that businesses are aware of their contractual rights, potential exposures and legal remedies.

The extent to which a disruption that impacts performance under the contract and is outside the parties’ control constitutes a qualifying force majeure event is highly fact-specific and depends on, amongst other things, the terms of the contract, the specific facts, governing law, and how courts in the relevant jurisdiction(s) interpret force majeure provisions. In most instances, in order to excuse a party’s performance in whole or in part, it will be required to provide written notice of a force majeure event.

Parties should always take care before asserting force majeure to avoid a premature claim for breach of contract or anticipatory repudiation. The counterparty may also seek to terminate the contract or avoid its own performance after receiving a notice of a force majeure event. If a legitimate force majeure defence is asserted, the party asserting force majeure will not be liable for breach of contract.

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Fertile Opportunities

Hamid Yunis | Bella North

Investors in search of a healthy return are increasingly investing in the fertility services sector, as demonstrated by reports that the global market is expected to reach US$36.2 billion by 2026, representing a compound annual growth rate of 10.2%.

Investments in the healthcare sectors have historically proven themselves to be extremely resilient, regardless of the economic cycle, which is why investors have the confidence to pursue further opportunities in the wider health and social care sectors. This includes the in vitro fertilisation (IVF) sector and less well-known assisted reproductive technologies (ART), such as intracytoplasmic sperm injection. The ART sector is in part considered to be recession-proof and this has led to ART being considered as a potentially appealing sub-sector for investment.

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Importing and Exporting Alcohol Beverages

Alva C. Mather

Clients considering importing or exporting alcohol beverages to or from the United States must first understand the key US regulatory requirements.

In recent years, there has been a great deal of growth in alcohol beverage imports and exports between the United States and overseas markets. Alcohol producers on both sides of the Atlantic may be thinking about ways to maximise the opportunities provided by their brewery, winery, or distillery capacity. Companies that are not currently involved in the alcohol industry may be interested in breaking into the sector through the establishment of an importation or exportation business.

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IP and Data Protection After Brexit

The initial UK and EU negotiating positions have now been revealed. Unless a COVID-19-related extension is negotiated, businesses should prepare for a “No Deal” Brexit to occur on 31 December 2020.

As of the end of the Brexit transition period, EU Trade Marks and UK Registered Community Designs will no longer include the United Kingdom. The UK Intellectual Property Office will grant additional UK trademarks and designs, but any agreement or licence that refers to these intellectual property rights should be reviewed.

The rules relating to the international exhaustion of trademarks when products are first put into the market will also change. A business that sells products in both the United Kingdom and the European Union should consider the effect this could have on its distribution strategy and pricing.

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