Next Steps for Companies Following the Latest U.S. Government Export Ban
A recent change in U.S. export control regulations requires all U.S.-based entities (including subsidiaries of foreign-headquartered companies) to immediately stop exporting most technologies to Huawei and several of its related entities. Violations of these regulations can result in fines and/or imprisonment. U.S.-based entities that export technology and products, as well as overseas companies that receive U.S.-based technology, need to be aware of which technologies are covered by the new regulations, the nature of the restrictions, and what kinds of risk mitigation strategies may be used to avoid running afoul of U.S. export law. Below we summarize the new regulation as well as potential risk mitigation actions companies may take.
On May 16, 2019, the U.S. government added Huawei Technologies and 68 of its affiliates around the world in 26 countries to the “Entity List” with little warning. This list essentially bans exports of most U.S.-originated technologies and products to Huawei, unless an export license is obtained from the U.S. Bureau of Industry and Security (BIS). Further, there is a presumption of denial for obtaining such licenses, and further, exports to the listed Huawei entities are not eligible for license exceptions. As a result, any company that makes, sells or ships technology to the listed Huawei entities needs to immediately determine whether their technology is subject to export control, and if so, take the necessary countermeasures to avoid violation of the ban.
As a first step in the process, companies will want to determine whether their U.S.-origin technology or products are “exports” covered by the ban. An export may be subject to the ban in one or more of the following ways:
Miku H. Mehta is a Partner in Procopio’s Silicon Valley office, leads the firm’s Asia-Pacific Cross-Border Practice Group, and is a member of its Intellectual Property practice. He advises clients on intellectual property, patent prosecution and counseling, as well as trademarks and copyrights. Miku’s practice focuses on the preparation and prosecution of patent applications, due diligence projects, including preparation of opinions in the areas of patentability, validity, infringement and product clearance, and patent licensing. He has extensive experience in technology including computer software and hardware, networks, internet-related applications, environmental technologies, optics, mechanical engineering, business processes and medical devices, as well as registration and renewal of trademarks.
Michael C. Jones is a Senior Associate at Procopio in its Silicon Valley office and is a member of its Intellectual Property practice. He works with a wide variety of clients on export control matters. He also prepares and prosecutes applications relating to semi-conductor, electrical and mechanical arts in the areas of display devices, medical imaging, image processing, tire technology and sports equipment; network and database management software, network infrastructure, multimedia distribution systems, memory storage devices, data encryption and decryption, mobile communications and semi-conductor devices and microelectromechanical sensors; and image processing, video archiving, medical diagnostic equipment, industrial processing equipment and hard disk drives.
About Procopio’s Intellectual Property Team
Procopio’s Intellectual Property team believes developing a deep understanding of our clients’ industries is essential to providing the guidance needed to manage intricate and complicated legal intellectual property (IP) challenges. Our IP practice team includes seasoned and award-winning patent, trademark, copyright, trade secret and licensing attorneys as well as patent agents with technical degrees and experience in a wide array of industries. Our services include selection, development, registration, licensing, protection, portfolio management and litigation in the United States and worldwide.