"Faster and Cheaper?"

In "Faster and Cheaper? A Current View of IP Litigation Reform", PatLit team member Michael Burdon gave his audience at CLT's Annual IP Conference at Holborn Bars today a very upbeat message concerning the current (post-Jackson and mid-UPLS) state of consensus and constructive discussion over improving the mechanics of IP litigation. The present dialogue between judges and practitioners, common lawyers and civilists, claimants and defendants has shown there is general agreement as to the main issues to be addressed and a huge willingness to tackle them.

Reviewing both "big ticket" and "streamlined" cases, Michael said that "faster and cheaper" is not the whole picture -- we should be cognisant of all other rights and remedies in addition to regular civil litigation: customs proceedings, mediation and arbitration were among the alternatives mentioned. Quality, too, is a commodity that stands apart from the criteria of speed and cost: British judges are generally recognised as producing high quality decisions.

Turning to Jackson and the proposals of the Intellectual Property County Court Users' Committee, Michael said it was acknowledged by all that the Patents County Court was a great idea but that it required a number of new features if it was to work better: both damages and costs would be capped so that all parties would know their maximum possible exposure to costs if they lose, and neither conditional fee arrangement nor insurance costs would be recoverable. Opportunities for domestic forum-shopping would be reduced and case management would be more precisely focused. The Jackson Review commented favourably on the degree of consensus among the IP communities concerning these proposals, noting that it was rare -- particularly where it involved a reduction of costs.

If you'd like to receive Michael's notes, materials and PowerPoints, just email PatLit here and we'll send them on to you in the next week or so.

Premature appeal gets buried

While the substantive grounds of this morning's decision of Mr Justice Kitchin in Medeva BV v The Comptroller General of Patents [2010] EWHC 68 (Pat) are likely to be discussed elsewhere (a comment is expected soon on The SPC Blog), there's an interesting procedural point too -- whether the appellant in this case had appealed too soon, before the unfavourable decision had in fact been made. The judge explained as follows:

"The procedural point

34. The Comptroller contends that the notice of appeal was filed by Medeva prior to any appealable decision having been made by the Intellectual Property Office ("IPO"). The relevant facts are these.

35. The SPC applications in issue were filed on 17 April 2009, some two months after the grant of the Patent. But it is also right to record that the applications were preceded by related SPC applications filed in 2005 which had generated a good deal of correspondence but no decision.

36. By letter dated 25 June 2009, the agents acting for Medeva wrote to IPO indicating that if they did not hear from it with a decision in relation to the applications by 31 July 2009 then Medeva would treat the failure to make a decision as a refusal of the applications.

37. By letters dated 31 July 2009, the examiner on behalf of the Comptroller responded in relation to each application. Each letter was headed "Examination as to formal and substantive requirements" and contained detailed reasons as to why the examiner considered the applications should be refused. The letters included this expression of opinion: "Consequently, it remains my opinion as the substantive examiner on behalf of the Comptroller that your application does not meet the requirements of Article 3(a) of the Regulation and that it should be refused under Article 10(2) of the Regulation". The letters invited a reply by 3 December 2009.

38. On 24 August 2009, the agents for Medeva wrote again, referring to their letter of 25 June 2009 and reiterating that Medeva would treat the failure to make a decision as a refusal of the applications and that it would bring the matter before the Patents Court as an appeal. They emphasised Medeva's concern to ensure that any dispute concerning the applications was resolved before the Patent expired. The letter concluded: "Please advise before 28 August 2009 if you do not accept our position that the refusal in your letters of 31 July 2009 is a final decision, failing which we will assume you agree".

39. By letter dated 1 September 2009, the examiner replied making clear that IPO's position was that the letters of 31 July 2009 contained the opinion of the substantive examiner acting for the Comptroller but did not constitute decisions actually to refuse the applications. Such decisions would have to be made by a hearing officer either after a hearing or, if Medeva so wished, on the basis of the papers on file.

40. In the meantime, on 29 August 2009, Medeva filed its notice of appeal. In its grounds of appeal, it stated that it regarded the letters of 31 July 2009 as a decision refusing the applications. This prompted an application by the Comptroller to strike the appeal out as having been made prematurely and on the basis there was no decision from which to appeal.

41. Subsequently the Deputy Director issued his decision and Medeva amended its notice of appeal to refer to it. Consequently it is accepted by all parties before me that the appeal can now be heard. Nevertheless the Comptroller requests that I decide whether the notice of appeal was properly filed on 28 August 2009 for the following reasons. First and most importantly, the Comptroller is concerned that unless this issue is resolved it will result in a series of premature and potentially speculative appeals. In that regard it seems that a number of third parties have inquired of IPO as to how Medeva's appeal has been heard so quickly after the decision of the Deputy Director. Second, the parties have expended costs in dealing with the issue, not least as a result of the Comptroller's decision to apply to strike out the appeal.

42. In my judgment the letters dated 31 July 2009 were not decisions against which appeals could properly be filed under s.97 of the Patents Act 1977. It is clear from the terms of the letters that they did not purport to be decisions. Rather they contained a statement of the opinion of the examiner and invited a response. Moreover, practitioners well know from the IPO Manual of Patent Practice that an examiner has no authority to make a decision on behalf of the Comptroller to refuse an SPC application.

43. Further, I do not accept the Comptroller was guilty of any actionable failure to make a decision or that any inaction by the Comptroller can properly be said to amount to a decision to refuse the applications or any other procedural impropriety. IPO did respond to the applications within the one month deadline set by the letter of 25 June 2009 and, moreover, did so in terms which were both clear and reasonable. Nothing further was heard from Medeva until their agents sent to IPO the letter dated 24 August 2009 with its four day deadline. The response from IPO by the letter dated 1 September 2009 was prompt, though just outside the deadline. Once again the terms of the letter were both clear and reasonable and provided no basis for treating the letters of 31 July 2009 as anything other than that which they purported to be, namely an expression of the opinion of the examiner. In the event, the Deputy Director, acting on behalf of the Comptroller, did issue his decision on 16 November 2009, some seven months after the filing of the applications.

44. For all these reasons I find that the appeal was indeed filed prematurely".

Indian pharma sector "fares well" in US disputes

India's Financial Express reports ("Domestic pharma cos fare well in patent litigation tests") on the pharma patent litigation success rates of India's leading pharmaceutical companies in US litigation over the past decade. Lupin Pharma has a success rate of 75%, while Sun Pharma (67%), Ranbaxy (63%) and Dr Reddy’s (61%) are not far behind. The article also gives a neat thumbnail sketch of the pharma patent litigation environment.

Ballad of the Patent Troll

General Patent Corporation may be a dull-sounding name, but from the company's Wealth of Ideas newsletter comes something worth watching and highly thought-provoking -- "The Ballad of the Patent Troll" (for which, click here). According to the text,

"Everyone knows about patent trolls and the mischief they wreak, keeping attorneys busy and flooding the courts with patent infringement litigation. Put that way, the "non-practicing entity" (meaning the "troll") is an unsympathetic figure indeed.

However, what few people stop to consider is that these "trolls" are legitimate patent owners with legitimate patent rights, and that there are some very valid reasons why an inventor or institution might patent inventions without bringing them to market.

To counter popular misconceptions about patent rights, we at GPC have produced a short video called "The Ballad of the Patent Troll." It is based on an article by GPC's Chairman and CEO, Alexander Poltorak, and that article is this month's newsletter feature.

"The Ballad of the Patent Troll" (in both video and article form) takes a humorous look at non-practicing entities and the truth about patent rights. The article originally appeared in Making Innovation Pay - Turning IP into Shareholder Value, ed. B. Berman, John Wiley & Sons Publishers, Inc., 2006".

For those who prefer the printed word, the text of the ballad goes like this:

"On the road of innovation
Sits an ugly Patent Troll.
From the largest corporations
He extorts a patent toll.

Armed with mighty patent claims,
Claiming willfulness and tort,
Treble damages and pains
He drags infringers into court.

Faster than a Rocket-docket
He sticks his hand into your pocket.
Troll, disguised as an inventor,
Will deprive you of your splendor.

First ignore him, then DJ him,
Try to motion him to death.
At the end you’ll have to pay him.
Troll will share in your wealth.

Casting wide a patent net,
All infringers he will get.
Faced with permanent injunction
Ask for Rule 11 sanction!

Raise your laches and estoppel,
102 and 103…
Your defenses Troll will trample –
You will end as licensee.

Your resistance is futile
Patent Troll is strong and vile.
Wielding claim as an ax
He’ll exact his patent tax.

Corporations, be united!
He who slays the Patent Troll,
By the Queen he will be knighted
And exalted by us all".

Alexander Poltorak then goes on to debunk the myths one by one, in masterly fashion. Nice one!

Okay to split costs where actions are joined, says CA

Actavis UK Ltd v Eli Lilly & Co. Ltd, 13 January 2010, doesn't seem to have found its way on to BAILII yet, but this ruling of the Court of Appeal for England and Wales (Lords Justice Jacob, Lloyd and Stanley Burnton) was caught by subscription service Lawtel. According to the keynote,

"An order for costs requiring two pharmaceutical companies, which had unsuccessfully applied for the revocation of a patent, to split equally the costs of the successful party could not be criticised as the two actions were indistinguishable and the bulk of costs incurred by the successful party arose from defeating both claims".

The two revocation actions -- each brought by a pharmaceutical company-- were originally independent, the second action being brought through the applicant's anxiety that the first applicant might obtain a market advantage. A case management conference directed that the two actions be heard simultaneously before the same judge, that the evidence given in the one case would serve as evidence given in the other. The two actions subsequently proceeded together but, before trial, one of the applicants for revocation discontinued its application.

The question of an order for consequential costs was stood over until the outcome of the trial was known. After the patent was held valid both at trial and on appeal, the patent owner stated that the substantial majority of its costs were incurred in seeking to defeat both actions, and that the additional costs incurred once the second revocation application was dropped were relatively small. The judge ordered that the costs of the patent owner's action be split equally between the two applicants for revocation since (i) it was impossible to distinguish between the two actions and (ii) the vast majority of its costs were attributable to both actions.

The Court of Appeal affirmed that this approach reflected the fact that the judge had a wide discretion and had exercised it properly. Nor was it contrary to the spirit of the Civil Procedure Rules to hold the applicants equally accountable for the costs -- though a different result might have occurred, had the two prepared their cases completely separately from each other.

The Jackson Review: some responses

PatLit has spotted quite a few early comments and responses to the Jackson Review, which was published in all its glory yesterday (see earlier post here). A selection of them are featured here.

Most of the Jackson Review is non-IP-specific [which is why, for example, Legal Week's and The Lawyer's early responses don't mention IP at all]. Thus Alasdair Poore (Mills & Reeve LLP) observes:

"Lord Justice Jackson makes a number of more general proposals which may impact on IP litigation. Some of these such as the abolition of recovery of the uplift on fees in conditional fee litigation and the "after the event" insurance premiums from the defendant will undoubtedly require further consultation. Others such as streamlining disclosure and expert witness evidence in high value disputes, and costs management and whether Counsel's fees which are very high should be fully recoverable, can probably be addressed by the Court Users Committee and guidance from the Courts".

He also notes that sheer bulk of the Review and the fact that IP forms only a very small part of the whole may act so as to slow down the IP reforms:

"A key issue is whether these proposals will be swamped by the other 450 pages of comments and proposals. Innovation is vital to the UK economy, there is almost complete consensus on introducing them. It will be appalling if implementation is delayed pending a debate over the very major issues on other areas of litigation, particularly personal injuries. Pressure needs to be brought to bear to push for these reforms as soon as possible".

Andy Millmore (Harbottle & Lewis) reminds readers that most of the Review's aims and proposals are not new, but concedes that their implementation can lead to radical changes. He adds:

"Overall, the initial reaction suggests that defendants are generally the winners, as the amount of costs recoverable by claimants can be restricted in some cases and in certain ways. On the other hand, there are changes proposed which may increase the likelihood of litigation, in particular the suggestion that lawyers should be able to undertake work on a true “contingency” basis, with their recovery directly linked to the recovery made by the claimant".

But if there are more cases and things look brighter for defendants, what will happen to costs overall? He predicts as follows:

"For smaller disputes, the costs should come down. For larger disputes, this will not necessarily be the case, but hopefully it will be the merits of the case which determine how it is resolved, rather than being driven by the level of legal fees which have been run up by the time that settlement is discussed".

From the Bar, Tom Mitcheson (3 New Square) focuses on what goes on before the trial gets into the courtroom. He says:

"The review refers to an IP Pre-Action protocol, and states that an earlier attempt to create one "ended in failure". That is not really fair -- considerable work was put into creating one, which can be found here. The "failure", if there was one, was on the part of the CPR Rules Committee to agree to adopt it as a formal protocol, because at that time it was thought that a proliferation of protocols was not desirable.

Even if the old protocol is not perfect, those considering the issue should find it a useful starting point if one is to be adopted following the Jackson review".

So far, there's no response on the websites of the Intellectual Property Lawyers' Association (IPLA), The Intellectual Property Lawyers' Organisation (TIPLO), the Chartered Institute of Patent Attorneys (CIPA), the IP Bar Association (IPBA) or the Institute of Trade Mark Attorneys (ITMA) -- but some careful analysis and constructive comment can be expected from those bodies in due course.

The Jackson Review: how will it affect patent litigation in England and Wales?

The Review of Civil Litigation Costs: Final Report (a.k.a. The Jackson Review), covering civil litigation in England and Wales, has just been published here. It's 584 pages in length and its thrust is summarised by one of the most no-nonsense Forwards you'll ever read. Writes Lord Justice Jackson:

"In some areas of civil litigation costs are disproportionate and impede access to justice. I therefore propose a coherent package of interlocking reforms, designed to control costs and promote access to justice".

What does it say about patent litigation? The following pointers may be of initial assistance here.

"5.1 Intellectual property litigation (chapter 24). The creation and use of intellectual property (“IP”) rights play a crucial role in economic activity and the owners of IP rights must be able to assert or defend them in the courts. The cost to SMEs (and larger enterprises) of resolving IP disputes can be significant. To reduce the costs of IP litigation, and particularly the cost to SMEs, I recommend that the Patents County Court (the “PCC”), which deals with lower value IP disputes, be reformed to provide a cost-effective environment for IP disputes. These reforms include (i) allowing costs to be recovered from opponents according to cost scales; and (ii) capping total recoverable costs to £50,000 in contested actions for patent infringement, and £25,000 for all other cases. I also recommend that there be a fast track and a small claims track in the PCC".

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"[p. 12] In the space of just 12 months, there have been major developments in relation to civil litigation costs", footnoting " ... "For example, ... the consultation exercise by the IP Court Users Committee on proposals for reform of the Patents County Court; the introduction of the new Practice Direction – Pre-Action Conduct in April 2009".

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"[p.24] 8. INTELLECTUAL PROPERTY CASES

8.1 Appendix 3. The data in appendix 3 to this report include a sample of 15 large intellectual property cases settled or taken to first instance trial by a leading IP department from a City law firm in the period from 1999 to 2007. Of these 15 cases, the firm acted for the claimant in ten cases and the defendant in five cases. The cases covered disputes over patents, trademarks, design and copyright. Of the 15 cases, three settled and 12 went to trial.

8.2 The adjusted costs incurred on these cases up to first instance judgment or settlement range from £196,957 to £1,540,933, with an average cost incurred per case of £696,742. The costs have been adjusted from actual costs to current costs by reference to the hours spent on the case at current hourly rates.

8.3 The data show the total costs incurred (profit costs and disbursements) up to various standardised stages in the litigation process (service of claim, defence, disclosure, witness statements, trial etc). This assists the law firm to estimate potential costs for clients up to various stages of the litigation process. The costs incurred up to a particular stage are cumulative, including the costs for all work up to that stage, not merely the costs incurred on performing tasks for that stage.

8.4 The data also include the number of weeks each case took to reach the various stages outlined above. The cases ranged between 36 weeks and 111 weeks from start to first instance judgement or settlement, with the average length being 66 weeks.

8.5 The law firm is also able to calculate the average monthly cost of the IP cases. The cases in the sample incurred average monthly costs ranging from £18,376 to £104,615, with the average being £45,542.

8.6 The costs incurred from the start of trial to judgment or settlement averaged nearly 20% of the total costs of the cases. The trial costs were a large proportion of the total costs due to the cross examination of the expert witnesses".

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"[p.170] 2.4 The majority of respondents oppose any fixing of costs in the multi-track. Both the Law Society and the Bar Council oppose any extension of the fixed costs regime above the fast track. The Bar Council writes:

“Save in relation to the Patents Court, we cannot see any justification for the implementation of a fixed costs regime in cases in the Chancery Division, Commercial Court or TCC48 depending on the value of the claim or the size or turnover of one or both claimants.”

2.5 In relation to intellectual property (“IP”) litigation, it is generally recognised that there is a case for limiting or fixing recoverable costs in respect of claims up to about £500,000. There is a groundswell of support amongst IP practitioners and court users for reforms along these lines: see chapter 24 below".

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Part 5 of the Report, dealing with specific types of ligitation, gives 10 pages to IP (pages 248 to 257) and recommends as follows:

"(i) Consideration should be given by the Patents Court judges and the IPCUC [Intellectual Property Court Users' Committee] to the question whether the Guide should be amended to include any of the proposals set out in paragraph 2.5 above [These relate to more robust case management].

(ii) The proposals in the IPCUC Working Group’s final report for reforming the PCC should be implemented [on which see PatLit here].

(iii) After reformation of the PCC, the Guide should be amended to give clear guidance on the requirements for statements of case, illustrated by model pleadings annexed to the Guide.

(iv) There should be a small claims track in the PCC for IP claims with a monetary
value of less than £5,000 and a fast track for IP claims with a monetary value of between £5,000 and £25,000.

(v) One or more district judges, deputy district judges or recorders with specialist
patent experience should be available to sit in the PCC, in order to deal with small claims and fast track cases.

(vi) There should be consultation with court users, practitioners and judges, in
order to ascertain whether there is support either for (a) an IP pre-action protocol or (b) the Guide to give guidance regarding pre-action conduct [i.e. as to whether there should be reform of the law currently governing groundless threats, which has implications for, inter alia, the drafting of letters before action]".

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On appeals, at p.337, the Review touches on the special position of IP disputes:

" ...the Intellectual Property Court Users’ Committee (the “IPCUC”) in its final report dated 31st July 2009 has proposed making radical reforms to the Patents County Court (the “PCC”). These reforms include imposing a cap upon recoverable costs, in order that SMEs should not be deterred from litigating by the fear of indeterminate liability for adverse costs. In relation to costs on appeal the IPCUC states:

“…we are confident that the Court of Appeal would be sensitive to the question of costs on appeal from the reformed PCC, and would be unlikely to award more by way of appeal costs than the first instance costs.”

There is an important issue here as to whether (a) this is a matter which should be left to the general discretion of the Court of Appeal or (b) the rules should make special provision for costs on appeals from the (reformed) PCC".

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Disclosure is mentioned at p.370: "3.9 After referring to the limited disclosure regime in patent cases, CLAN [the Commercial Litigation Association] looks at disclosure more widely. It states:

“... perhaps the default position should be that parties would disclose only those documents upon which a party wished to rely, but that it was open to either party to seek more general disclosure if appropriate. This was the approach adopted when the modern form of the county courts was being introduced in the 19th century.”

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PatLit is sure that there will be much discussion and welcomes readers' comments, both from at home and from abroad.

Are there too few patent litigators in Europe?

Writing on the IAM Magazine Blog earlier today ("A single patent can wait, Europe's priority should be more patent attorneys"), editor Joff Wild returned to a subject he previously addressed in September of last year: his thesis that the best way to get European SMEs to engage with the patent system is to ensue there more patent attorneys are seeking their custom. Citing a recent piece he wrote for the CIPA Journal, Joff develops his theme, which has repercussions for patent litigation too:

"... One of the stated aims of the European Union is to be the centre of the world's knowledge economy. That means creating and nurturing the innovative skills of the 500 million people who live within its borders so that the 20 million companies, the vast majority of them SMEs, which currently operate inside the EU can prosper and grow. If this happens, it should lead to more jobs, greater wealth-creation and higher standards of living. ...

... Logically, a relatively cheap single patent and less costly litigation should lead to more patenting among Europe's SMEs. And maybe it will, at the margins. ...

There are, I discovered, just 9,250 patent attorneys currently authorised to prosecute applications at the EPO. That's 9,250 out of a total population of 500 million Europeans. When you bear in mind that over half of these, 4,956 to be precise, are based in either the UK or Germany (there are, for example, more European patent attorneys in Munich than there are in the whole of France; and more in London than there are in all of Italy and Spain combined), then - quite frankly - that number becomes terrifying.

If Europe really is going to be at the heart of the 21st century's innovation economy, can we really do it on the back of the efforts of under 10,000 patent attorneys? I just can't see how. Not because there will be a shortfall in the number of people able to prosecute patents at the EPO, but because it is not possible to rely on just 9,250 people to give the accurate, patent-related business advice innovative European companies need in order to manage and exploit their IP rights to maximum effect. Remember, too, that at any one time a large proportion of that 9,250 is not going to be practising or will be working inside corporations and so not in a position to represent anyone but their employers. So, the reality is that we are talking about a far lower number actually being available for instruction.

... It seems to me that if we are really serious about patents in the EU, what we need to be talking about is how we get more patent attorneys on the ground. My belief is that patent attorneys are the people best placed to give SMEs business-focused, strategic IP advice. However, I also believe that many will only do so when they face more competition and so have to go out into the market to drum up business by offering something that their rivals do not.

... A Community patent and a single patent court are attractive to those who already use the patent system, but I am not sure how far they will encourage a whole new group of SMEs to start to engage. What might, though, is affordable advice tailored to their specific needs. And that, I believe, means getting a whole lot more patent attorneys out there in the field. Until this happens, I fear that there will continue to be a disconnect between the European SME sector and the patent system.

In short, we need more patent attorneys across Europe, because more will mean more competition between them; which, in the end, will mean a much better service for clients. If I were a European policy maker, working out how to do this is what I would be prioritising.

Joff's article addresses patent attorneys at the front end of the system, where SMEs and other clients first engage with the protection and exploitation of their innovations. However, the point may also be made with regard to patent litigators. As negotiators of the forthcoming Unified Patent Litigation System have recognised, patent litigation is not uniformly spread around the European Union: there are pockets of extraordinarily high-quality expertise plus vast expanses of patent litigation deserts. Further, while it is not easy to define precisely who may be described as a competent, qualified and experienced patent litigator, there is little doubt but that their total number is low, probably a great deal lower than that of front-end patent attorneys. If what Joff says of the competition imperative and the need to boost professional numbers is true for those who write patents and steer applications along the tricky path to grant, is it not equally true for those whose combination of legal, forensic and scientific skills enables patents to be competently litigated?

Civil Law Reform Bill: latest news

Last December the United Kingdom's Ministry of Justice published a consultation paper which invited comments on the draft Civil Law Reform Bill. Among the other things covered by the Bill are changes to the law of damages and to pre- and post-judgment awards of interest. Proposals dating back to 2001 for reform the law of limitation of actions are now no longer going forward.
The consultation ends on 9 February 2010. You can view the draft Civil Law Reform Bill in full here and the consultation paper here. The House of Commons' page on the draft Bill, including a chart showing its progress through Parliament, is here.

Under Clause 8 of the Bill:

"... Subsection (2) amends paragraph 12(4) of Schedule A1 to the Patents Act 1977. This Act extends to the whole of the United Kingdom and the Isle of Man. It provides that the power to award damages for providing false information applies whether the action is brought by an individual or a body corporate. This is necessary because in Collins Stewart Ltd and another v Financial Times Ltd [2005] EWHC 262 (QB) the Court of Appeal decided that aggravated damages were in principle not available to a corporate claimant because a company has no feelings to injure and cannot suffer distress and many claimants under the Patents Act 1977 will be companies. Subsection (2) also replaces the expression “additional damages” with “aggravated damages and such amount by way of restitution”. The term “additional damages” appears in no statute other than Schedule A1 to the Patents Act 1977 and the Copyright, Designs and Patents Act 1988 (see below) and has been the subject of criticism for uncertainty. The Bill therefore clarifies the nature of these damages in line with current case law.

... Subsection (3) makes equivalent amendments to those made by subsection (2) of the Bill to the Patents Act 1977 to section 97(2) of the Copyright, Designs and Patents Act 1988. This Act extends to the whole of the United Kingdom".

While most of the reforms relate to damages in general, the pre-Bill consultation sought views on whether exemplary damages in civil proceedings -- which are available in the UK for copyright infringement but not for infringement of patent (or other IP) rights -- should be extended through statute or continue to be a matter for the common law. Most respondents agreed at that time that there was no need for legislation on restitutionary damages and concurred with the Government's view that such issues were best left to the courts (only 17 of the 1o3 respondents addressed these issues, reflecting "a range of different views").

Click here for the consultation paper "The Law on Damages" and for the Government's response.