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MARPA Member Super Savers – Register by May 27th!

Don’t forget to register today for the 2016 MARPA PMA Conference!  The Super Saver discount for renewing MARPA members expires May 27th, so register today and save!

The 2016 MARPA Conference has a lot of opportunities to offer!   Learn about the newest developments in  international PMA markets like Japan, Latin America, and Europe.  Dive into recent COS updates and Part 21 regulatory changes to educate your company.  Find the financial strategy you need to guide your company through the PMA landscape. Take advantage of built-in networking opportunities!  Your customers will be there… will you?

To register, just click here for a registration form and hotel information.  If you have any questions, contact MARPA by calling (202) 628-6777.  We look forward to seeing you at our NEW venue- The B Resort & Spa in Orlando, Florida.

New Trade Secret Law and Whistleblower Protection – How to Protect Your Business

Yesterday, we wrote about the new trade secret law, which provides a federal cause of action for trade secret infringement.  The new law, known as the Defend Trade Secrets Act of 2016 (DTSA), is identified as Public Law 114-153.

It is very normal for aerospace manufacturers to have (or at least claim) trade secrets, and to seek to protect them through agreements with their employees.  Such agreements often include confidentiality clauses.  They may address trade secrets like product design functions, as well as trade secrets like customer lists and financial data.  Provisions of the new law will impose some affirmative burdens on employers, and if you fail to meet those obligations then you could undermine your company’s intellectual property rights.

WHISTLE BLOWER PROTECTION

The DTSA provides whistleblower protection to certain employees who disclose trade secrets to the Government (including in a court filing).  The whistleblower immunity applies if the employee discloses a trade secret, but does so in one of these contexts:

  • A confidential disclosure to a Federal, State, or local government official, either directly or indirectly, or to an attorney (but only for the purpose of reporting or investigating a suspected violation of law); or
  • A disclosure made in a complaint or other document filed in a lawsuit or other proceeding, if such filing is made under seal.

NEW NOTICE REQUIREMENTS

But there is an even more important clause for employers to understand.  There is an additional clause in the law that requires employers to provide notice of the whistle blower immunity.  This clause says:

(3) NOTICE.—

(A) IN GENERAL.—An employer shall provide notice of the immunity set forth in this subsection in any contract or agreement with an employee that governs the use of a trade secret or other confidential information.

(B) POLICY DOCUMENT.—An employer shall be considered to be in compliance with the notice requirement in subparagraph (A) if the employer provides a cross-reference to a policy document provided to the employee that sets forth the employer’s reporting policy for a suspected violation of law.

(C) NON-COMPLIANCE.—If an employer does not comply with the notice requirement in subparagraph (A), the employer may not be awarded exemplary damages or attorney fees under subparagraph (C) or (D) of section 1836(b)(3) in an action against an employee to whom notice was not provided.

(D) APPLICABILITY.—This paragraph shall apply to contracts and agreements that are entered into or updated after the date of enactment of this subsection.

(4) EMPLOYEE DEFINED.—For purposes of this subsection, the term ‘employee’ includes any individual performing work as a contractor or consultant for an employer.

This imposes an affirmative duty on employers to notify their employee of the immunity in the DTSA.  This needs to be done in the confidentiality agreement that governs the use of the trade secrets.  So if your employees each sign a confidentiality agreement (or employment agreement that includes confidentiality obligations) at the time of hiring, then this should be modified to reflect the requirements of the law.  This new language should be reflected in every contract addressing confidentiality provisions that is entered into on or after May 12, 2016 (today).

Old and existing contracts (those entered-into before May 12, 2016) do not need to be modified to reflect this new language, unless they are updated in any way.  So if you make any sort of update to a pre-existing contract that addresses confidentiality, then please make sure the modifications also include the new immunity notice language.

There is an option to publish a policy document including the appropriate notice, and then to cross reference that document in the agreements with the employees, consultants and contractors.  If you do this, then you should be specific about the revision level of the policy document, to make sure that it includes the appropriate language.

Failure to provide notice can limit the company’s ability to collect certain damages and attorneys fees, to which the company might otherwise be entitled.  Eliminating the chance of recovering attorneys fees can make a valid lawsuit economically undesirable.

APPLIES TO CONTRACTORS AND CONSULTANTS, TOO

The definition of employee for these purposes includes contractors and consultants!

So your consulting agreements and other agreements with independent contractors need to reflect this new disclosure language as well.  This may be especially important when working with contractors who normally sign a non-disclosure agreement.

 

New Trade Secrets Law Provides Useful Language for MARPA Members

The President has signed into the law the new Defend Trade Secrets Act (DTSA).  The new law provides a federal private right of action for trade secret infringement – previously, such private actions were brought under state law.

For MARPA member, there is an important safe harbor – the DTSA specifically explains that trade secret infringement is limited to obtaining information by improper means, and limits the scope of “improper means” by excluding some normal methods used by PMA applicants, like reverse engineering and independent derivation:

the term ‘improper means’—

(A) includes theft, bribery, misrepresentation, breach or inducement of a breach of a duty to maintain secrecy, or espionage through electronic or other means; and
(B) does not include reverse engineering, independent derivation, or any other lawful means of acquisition

This is a valuable restatement of the common-law safe harbor.

But MARPA members are also holders of their own trade secrets, and this change permits MARPA members to sue in federal court when their trade secrets are infringed.

The existing statutes provide a definition of trade secret that will continue to control the new private right of action:

the term “trade secret” means all forms and types of financial, business, scientific, technical, economic, or engineering information, including patterns, plans, compilations, program devices, formulas, designs, prototypes, methods, techniques, processes, procedures, programs, or codes, whether tangible or intangible, and whether or how stored, compiled, or memorialized physically, electronically, graphically, photographically, or in writing if—

(A) the owner thereof has taken reasonable measures to keep such information secret; and

(B) the information derives independent economic value, actual or potential, from not being generally known to, and not being readily ascertainable through proper means by, the [public]{another person who can obtain economic value from the disclosure or use of the information};

18 U.S.C. 1839(3).  The square-bracketed [] language is the old text and the curly-bracketed language {} is the new replacement text that has been added by the new law.

This standard continues to provide important guidance to those who wish to retain their trade secrets – it is especially important to take reasonable measures to keep the information secret.  And where information cannot be kept secret, because it is already in the public domain or because it is required by law to be disclosed, then the possessor of that information may not have a trade secret, if there are no reasonable measures that may be taken to maintain secrecy.

The extent of the security measures taken by the owner of the trade secret need not be absolute, but must be reasonable under the circumstances, depending on the facts of the specific case.  The owner’s reasonable efforts can include advising employees that the information is a trade secret, limiting access to the information to those with a specific “need to know,” requiring employees or business partners to sign confidentiality agreements, and keeping secret documents secured (like in a safe).

For PMA applicants, this new law underscores the importance of documenting the processes associated with the development of PMA design data.  A PMA company that possesses that sort of development-process-documentation, and can offer it as a defense to an allegation of trade secret misappropriation, should be a more defensible position.

Join MARPA in Madrid for a Facility Tour of Iberia Maintenance

A very limited number of the 2016 MARPA EMEA PMA Parts Conference in Madrid are invited to a tour of the Iberia Maintenance facility in Madrid.   The facility is located at Madrid-Barajas airport.

Participants in the tour should meet in the lobby of the conference hotel, NH Madrid Ventas, at 8:45 am on May 25th.  A bus will depart at 9:00 am.

The bus is scheduled to arrive at Iberia Maintenance at about 9:45 am, with tour concluding at 10:45 am.  The bus will depart Iberia Maintenance at 11:00, arriving back at the hotel shortly before noon.

Iberia Maintenance asks to receive, no later than 6pm EST on May 9th 2016, the following information for each participant:

  • First and last name
  • Title
  • Company or organization affiliation
  • Email address
  • Country of passport issuance and passport number

MARPA will cover the costs of round trip bus transportation.  To take advantage of this opportunity, the attendee must be registered for the 2016 MARPA EMEA PMA Parts Conferece.  Space will be reserved on a first-come, first-served basis.  Please be sure to register for the Conference, then contact katt@washingtonaviation.com with the requested information in order to join the tour!

 

Jason Mahoney, Dir. of Engineering & Maintenance, TUI Group to Keynote 2016 MARPA PMA Parts Conference in MADRID

MARPA is extremely pleased to announce that Jason Mahoney Director of Engineering & Maintenance – TUI Group will serve as the Keynote speaker for the 2016 MARPA PMA Aircraft Parts Conference from May 23-24, 2016 in Madrid, Spain at the NH Madrid Ventas.

Jason Mahoney  Jason Mahoney was appointed Director of Engineering and Maintenance of TUI Group in 2014, charged with uniting the group’s five independent engineering and maintenance establishments – to create one pan-European organisation.

Previously, Jason was Director of Engineering for Thomson Airways having joined the business in 2011. Prior to joining TUI, Jason worked for bmi and British Airways, having joined BA as an engineering apprentice in 1989.

TUI Group is the world’s number one tourism business. The broad portfolio gathered under the TUI Group umbrella consists of strong tour operators, 1,800 travel agencies and leading online portals, six total airlines with a fleet of more than 130 aircraft, over 300 hotels with 210,000 beds, 13 cruise liners and countless incoming agencies in all major holiday destinations around the globe. This integrated offering will enables TUI Group to provide their 30 million customers with an unmatched holiday experience in 180 regions around the world. A key feature of their corporate culture is global responsibility for economic, environmental and social sustainability. This is reflected in more than 20 years of commitment to sustainable tourism.

MARPA wishes to extend its sincere thanks to our partners at the International Trade Administration for their ongoing support in partnering with our organization to encourage MARPA and FAA-PMA aircraft parts-focused events and trade missions, and for working to promote PMA worldwide.  The 2016 MARPA PMA Parts Conference provides an excellent opportunity for our members to meet and network with their international customers. It is also an opportunity to continue the ongoing discussion about the benefits and value of PMA parts.  MARPA looks forward to seeing our members in Madrid networking with the air carriers of not only Europe but also the Middle East and Asia.

For more information about the 2016 MARPA PMA Aircraft Parts Conference, visit us online!

MadridWe look forward to seeing everyone in Madrid!

FAA Draft Advisory Circulars Need Your Comment

Several draft FAA Advisory Circulars are currently open for comment of which MARPA members should take note.

Today the FAA’s Engine and Propeller Directorate released draft AC 33.15-3 Parts Manufacturer Approval (PMA) Metallic Part Material Compliance Using Comparative Test and Analysis Method for Turbine Engines or Auxiliary Power Units. This AC is intended to provide guidance to assist PMA applicants in developing tests to demonstrate the equivalence of materials with that of the type design materials.

We will provide a more detailed analysis of this draft AC in the coming days, but want to encourage each of our members to review it and submit comments to the FAA addressing any potential problems you identify–or offering praise if you feel it is a useful document.  MARPA will be offering its own comments, so if you do not wish to file on your own, please feel free to provide us with your thoughts and we will incorporate them into the association’s comments.  These comments are due to the FAA by July 20.

Two other draft ACs are also open for comment and bear review. The first is AC 39-xx Alternative Methods of Compliance. This AC is intended to provide guidance to those applicants seeking approval of an AMOC. This guidance formerly appeared in FAA Order 8110.103A but has since been removed to a stand-alone AC. Comments are due May 30.

The other is AC 23.10 FAA Accepted Means of Compliance Process for 14 CFR Part 23. This AC provides guidance on how to submit applicant proposed means of compliance to the FAA for acceptance by the Administrator in accordance with proposed § 23.10 (which is one section of the current Part 23 proposed rule revision). Comments are due May 13.

Each of these proposed Advisory Circulars should be reviewed for potential effects on the PMA industry. MARPA will be undertaking its own reviews, but we encourage each of our members to do the same, and file such comments as they believe helpful.  All draft materials and FAA contact information can be found at https://www.faa.gov/aircraft/draft_docs/ac/.

If you would like us to incorporate your comments, you should email them to VP  of Government and Industry Affairs Ryan Aggergaard at ryan@washingtonaviation.com

 

Join MARPA in Madrid May 23-24th! Book your hotel room today!

The MARPA 2016 EMEA (Europe, Middle East, Asia) PMA Parts Conference will be taking place in Madrid, Spain next month, on May 23-24, 2016 at the beautiful NH Madrid Ventas Hotel. But the deadline for making hotel reservations at the discounted rate is Friday, April 22nd!

We have negotiated a room rate of €99,34 per night (VAT included) for single/double occupancy. This rate applies on a limited basis for rooms up to two days before and after the event, for those who wish to extend their stay.

In order to qualify for this special rate, you must book your room by Friday, April 22nd. Click here for a link to the hotel for the MARPA room block. Clicking this link should automatically reference the MARPA discount code.

You can also call the hotel directly at +34 91 3610288. Make sure to ask for the “MARPA” rate in order to get our discounted rate!

FAA Draft Policy Statement on Modification Articles Open for Comment

The FAA has released a Draft Policy Statement related to Order 8110.42D that is directly applicable to the PMA community. PS-AIR-21-1601 – FAA Order 8110.42D, Parts Manufacturer Approval Procedures – Use of Parts Manufacturer Approvals (PMA) for Minor Modifications to Products establishes FAA policy for “the gray area when a modification to a product does not rise to the level of a major change . . .  and the producer of the modification article wishes to sell it in accordance with 14 CFR 21.9.”

The Draft Policy explains that historically there was not a consistent policy for issuing PMAs when the PMA made a modification that did not rise to the level of a major change under the regulations. Confusion existed as to whether a STC was appropriate for a modification article that did not constitute a major change to type design.

The Draft Policy clarifies the FAA’s position that:

PMA is a suitable method to approve an article, and provide for that article’s installation, in cases where the installation would not constitute introduction of a major change in a product’s type design.

The policy goes on to explain that the applicant must be able to identify the change resulting from installation of the article and justify it as not being a major change to the product and have the project ACO’s agreement.

On balance this looks like a positive policy for the PMA industry, clarifying modification PMAs that do not constitute a major change to a product’s type design can be approved through the PMA process and not require a STC. However we would still like to hear from our members to determine if there are any unintended consequences of this policy or ways in which the policy can be made more clear.

Comments on this policy statement are due May 1, 2016, so please email Ryan Aggergaard at ryan@washingtonaviation.com if you have any concerns about this policy or potential effects on the PMA industry.

Congress Proposes FAA Reauthorization that Poses Both Challenges and Opportunities for the PMA Community

Today, Congress published proposed legislation (known as the AIRR Act) to reauthorize the FAA.  The biggest headline in that bill is air traffic control privatization.  But there is plenty in this bill that could affect the PMA industry.

Typically, FAA Reauthorization Bills affect higher-level elements of the law and the FAA is more likely to directly affect PMA Manufacturers; but the AIRR Act has a large number of elements that could affect the PMA community:

Sec. 302. Safety Oversight and Certification Advisory Committee. Congress is establishing an advisory committee that will be responsible for advising the Secretary of Transportation on policy-level issues related to FAA safety certification and oversight programs and activities.

Sec. 311. Aircraft certification performance objectives and metrics. The FAA shall establish metrics for progress toward increasing certification efficiency, increasing accountability, “achieving full utilization of FAA delegation and designation authorities,” implementing risk management and systems safety principles, increasing transparency, training personnel in auditing systems and maintaining the leadership of the United States in international aviation and aerospace.  All of these foci could be good for the PMA community.

Sec. 312. Organization designation authorizations. Establishes a new provision in the US Code for ODAs. ODAs shall have a procedures manual, shall be entitled to full delegation of functions approved in the manual, but shall be subject to regular FAA inspection. ODA holders shall cooperate fully with the FAA oversight activities. FAA shall establish an ODA Office to coordinate ODA policy and oversight.

Sec. 314. Type certification resolution process. Requires FAA to set policies and timelines for resolving type certification issues, and for elevating them when they cannot be resolved at the lower levels of the FAA.  [*** It would be nice to see this provision expanded to all design approvals, including PMAs ***]

Sec. 315. Safety enhancing equipment and systems for small general aviation
airplanes. Requires FAA to streamline the installation of safety enhancing equipment and systems for small general aviation airplanes in a manner that reduces regulatory delays and significantly improves safety. This is something that the FAA has been working on already so they should be prepared to meet Congressional deadlines.

Sec. 317. Additional certification resources. If the FAA needs to travel to a foreign country to help expedite the process of acceptance or validation of a US certificate, then the US applicant can reimburse the FAA for travel expenses (which makes it easier for the FAA to contribute to such efforts). The FAA will have to keep metrics on this, including how often requests from US applicants to enter into such an arrangement were denied.

Sec. 351. Promotion of United States aerospace standards, products, and services abroad. This section gives the FAA promotion responsibilities, which were taken out of the law a number of years ago. This limited promotion authorization is focused on international promotion, like promoting United States aerospace safety standards abroad, and facilitating and vigorously defending approvals of United States aerospace products and services abroad. It will also reiterate our commitment to working with bilateral partners.

Sec. 352. Bilateral exchanges of safety oversight responsibilities. Includes a requirement for the FAA to accept foreign airworthiness directives (ADs) issued by bilateral partners. This could impose an unworkable burden on smaller US companies to track foreign AD proposals, because it will mean that the US companies will have to comment on the foreign AD, because it will have no reasonable opportunity to comment on a US version if the FAA is required to accept foreign ADs.  Because ADs can sometimes be worded to exclude PMA alternatives, it is important that the PMA community have some redress with respect to proposed ADs.

Sec. 353. FAA leadership abroad. This will require the FAA to better support US companies in foreign acceptance or validation projects. one clear element of this will be through increased US engagement with foreign authorities.

Sec. 615. Air transportation of lithium cells and batteries. The government will establish a committee, and try to make sure that people actually comply with lithium battery shipping requirements.

Reauthorization is often a slow process, but the last reauthorization bill was a six month extension that went into effect October 1, 2015. That means that the new reauthorization bill is needed by April 1, 2016. It is possible that this ATC privatization may be contentious (General Aviation groups contend that it is an effort to shift the expense of maintaining the system into their pockets) and that could slow down the progress of the AIRR Act. If the AIRR Act cannot be passed by April then we could see another temporary reauthorization (e.g. for another six months). But it is possible that the AIRR Act could move on a fast track, and become law, later this Spring.

FAA Reiterates That ICAs are Not Proprietary Data

The FAA has published an update to Advisory Circular (AC) 120-106A,on the Scope and Recommended Content for a Contractual Agreement Between an Air Carrier and a Contract Maintenance Provider.  This advisory circular provides guidance on the terms of the relationship between an air carrier and its contract maintenance providers.

The new revision expands on the guidance and includes elements that are important to the PMA community as well.

FAA Policy Statement PS-AIR-21.50-01 is an important FAA policy statement that precludes Design Approval Holder’s from using their monopoly over the Instructions for Continued Airworthiness to exact additional anti-competitive concessions.  A reason for this was because those anti-competitive concessions could undermine safety, as well as inhibiting third party development of safety improvements.

My mention of PS-AIR-21.50-01 is not the non-sequitur it might seem to be.  That guidance is now directly referenced in AC 120-106!  Section 5 of the guidance discusses elements of the contractual agreement between the air carrier and the maintenance provider.  Subsection 5(b)(4) recommends a contract clause on proprietary data, but makes it clear that this means the air carrier’s own data, and stresses that the ICAs are not proprietary data.

4) Proprietary Data. Many times, air carrier general maintenance manuals are designed for in-house maintenance. These manuals may contain proprietary or other confidential information that an air carrier may not want to share with an MP. In many cases, the MP also works on competitors’ aircraft. This has a tendency to make air carriers reluctant to share this information, and therefore they do not. The proper handling of proprietary data issues should be addressed in the contractual agreement between the air carrier and the MP.

NOTE: The proprietary or other confidential information referred to in this paragraph refers only to that information developed by an air carrier for purposes of its in-house maintenance. Proprietary or confidential information does not refer to other data to which the MP is entitled, such as instructions for continued airworthiness (ICA) under 14 CFR part 21, § 21.50(b), and in accordance with FAA Policy Statement PS-AIR-21.50-01, Type Design Approval Holder Inappropriate Restrictions on the Use and Availability of Instructions for Continued Airworthiness. Such data that is required to be made available under the regulations may not be restricted by design approval holders (DAH) with respect to an air carrier’s approved maintenance manuals, through restrictive language in the ICA, or through restrictive access or use agreements.

Some manufacturer have used ICA restrictions to preclude use of PMAs, and PS-AIR-21.50-01 helps to address those restrictions in a positives and pro-competitive manner.

Some air carriers find themselves getting conflicting information about whether ICAs are proprietary data.  We’ve written in the past about why ICAs cannot be proprietary data (e.g. they are required to be made available and this federal requirement preempts state-law trade secret protections).  Because they cannot be proprietary data, one shouldn’t use a license of that information to perpetrate anti-competitive restrictions.  This recently-published NOTE helps to emphasize the point.

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