Monthly Archives

October 2012

Homeland Security Seizes Nearly 800 Counterfeit Sports Team Hats and Jerseys

By Customs IP Enforcement, Intellectual Property, International Business

Photo by ICE

U.S. Immigration and Customs Enforcement’s (ICE) Homeland Security Investigations (HSI) seized 795 counterfeit items in New Orleans Tuesday with a manufacturer’s suggested retail price (MSRP) of $29,630. The seized items include counterfeit National Football League jerseys, hats bearing the logos of National Football League, Major League Baseball, National Basketball Association and National Hockey League teams, and several counterfeit designer bags.

Last year HSI New Orleans led the nation in counterfeit NFL seizures with more than 7,100 items at an MSRP of more than $1 million. As the host city of the upcoming Super Bowl, Raymond R. Parmer Jr., special agent in charge of HSI New Orleans, said HSI special agents are particularly focused on the identification and seizure of counterfeit sports memorabilia ahead of the game.

“The bottom line is counterfeit goods steal revenue from legitimate businesses and shortchange buyers who think they’re getting the real deal,” said Parmer. “Criminals should take note that we are actively looking for contraband on a daily basis and counterfeit goods will be seized and violators prosecuted to the fullest extent of the law.”

During a routine operation HSI learned the counterfeit goods seized Tuesday were being shipped from an overseas location into New Orleans. HSI then intercepted the shipment and seized the contraband items. Although there were no arrests, the HSI investigation is ongoing.

HSI and partner National Intellectual Property Rights Coordination Center (IPR Center) continually work to keep counterfeit goods off the streets and bring those responsible for producing and distributing them to justice.

The IPR Center is one of the U.S. government’s key weapons in the fight against criminal counterfeiting, piracy and commercial fraud. As a task force, the IPR Center uses the expertise of its 21-member agencies to share information, develop initiatives, coordinate enforcement actions and conduct investigations related to IP theft and commercial fraud. Through this strategic interagency partnership, the IPR Center protects the public’s health and safety, the U.S. economy and our war fighters.


Paraguayan Authorities and Homeland Security Seize More Than $34 Million in Counterfeit Goods

By Blog, Customs IP Enforcement, Intellectual Property, International Business, International IP

Over the past 15 months, U.S. Immigration and Customs Enforcement’s (ICE) Homeland Security Investigations (HSI) has provided extensive training and capacity building to Paraguay’s customs office and other Paraguayan law enforcement partners. This training has been very successful, as Paraguayan authorities, working closely with the HSI Buenos Aires attaché, are making extensive seizures of counterfeit goods.

“Partnerships with international customs agencies and border security agents are essential to combating intellectual property theft,” said Raul O. Aguilar, HSI Buenos Aires attaché. Aguilar oversees HSI throughout the southern cone of South America. “HSI is proud to support our Paraguayan colleagues with our expertise in disrupting criminal organizations that import counterfeit products and goods. Fighting these organizations demands a response that is transnational and well-coordinated. I am truly proud of the collaboration we have built with our counterparts.”

Two major recent seizures include:

On Oct. 16, Paraguayan authorities, working collaboratively with HSI, seized counterfeit merchandise with a manufacturer’s suggested retail price (MSRP) of $34 million. On Oct. 11, Paraguayan authorities received information about counterfeit products being smuggled out of Silvio Pettirossi International Airport in Asunción. A criminal organization was attempting to smuggle these goods out of the country — possibly destined for the United States. Law enforcement discovered multiple high-quality counterfeit brand name watches of Swiss origin. Among the various brands were watches from Patek Philippe, Tissot, Tag Heuer, Bulgari and Hublot. In addition, approximately 12,500 counterfeit Samsung cellular phones were discovered. The products were ultimately seized by law enforcement.

On Sept. 26, Paraguayan Customs, working with HSI, identified and searched a shipment of containers sent to Ciudad del Este, Paraguay, from Uruguay. The three containers and their contents included counterfeit Xbox, PlayStation and Nintendo gaming systems. The shipment, with an MSRP of $741,041, was subsequently seized by Paraguayan authorities. This specific case has been presented to the Paraguayan Public Ministry for prosecution.

“HSI will continue to provide training exercises and build strong partnerships with our Paraguayan counterparts in order to assist in the targeting and interception of shipments containing smuggled and illicit cargo,” added Aguilar. “Such training has been instrumental in increasing the abilities of the various agencies within the Republic of Paraguay, and has contributed to an increase in seizures.”

These seizures are the result of HSI’s Illicit Pathways Attack Strategy (IPAS). Over the last two decades, transnational organized crime (TOC) has transformed in size, scope and impact — posing a significant threat to national and international security. TOC networks are proliferating, striking new and powerful alliances, and engaging in a range of illicit activities as never before. The result is a convergence of threats that have evolved to become more complex, volatile and destabilizing. HSI’s response was the creation of the IPAS to break TOC strongholds.

HSI takes very seriously the threat to national security that TOC represents. HSI designed IPAS to focus its resources in a manner that best targets, disrupts and dismantles TOC while maximizing efficiency. IPAS provides a methodology and mechanism for HSI to prioritize threats and vulnerabilities within its mission and to coordinate its own efforts internally and among federal partners. IPAS enhances HSI’s and host country partners’ abilities to investigate and prosecute individuals involved in TOC organizations that threaten the stability and national security of the host countries and pose continuing threats to the homeland security of the United States. Prioritization allows HSI to strategically focus enforcement and capacity building efforts along the continuum of crime within and beyond U.S. borders. IPAS provides a structure for engagement with host country partners — including Paraguay — to increase joint investigations, enhance exchange of information, and support foreign and domestic prosecutions. The IPAS strategy is extremely important in the tri-border area of Paraguay, Brazil and Argentina, where the propensity for TOC organizations is immense.

Source: ICE

US Trade Relations and the Presidential Debates

By Blog

Its time to brush up on what is going on in US trade relations. The second presidential debate will be taking place tonight at 9:00-10:30pm Eastern time and the topic is foreign and domestic policy. And according to an article published by the New York Times, China and Its Trade Tactics Are Coming to the Debates.

Robert E. Scott wrote an interesting report called The China Toll: Growing US trade deficit with China cost more than 2.7 million jobs between 2001 and 2011, with job losses in every state. He provides a history lesson about US trade relations with China and makes an interesting argument.

Recent developments in terms of US trade relations include conflicts with:

  • MEXICO: “The United States Department of Commerce signaled it might be willing to end  a 16-year-old agreement between the United States and some Mexican growers that has kept the price of Mexican tomatoes relatively low for American consumers. American tomato growers say the price has been so low that they can barely compete.”- NYT: Ammunition for a Trade War Between the US and Mexico
  • CHINA: China and the US keep filing complaints against each other in the World Trade Organization. Read Bloomberg Businessweek’s WTO to Probe US Anti-Subsidy Duties on Chinese Imports to learn more about what each country’s complaints.



Homeland Security Seizes 686 Websites Selling Counterfeit Medicine

By Customs IP Enforcement, Intellectual Property, International IP, Internet / eCommerce

In the largest operation of its kind, 100 countries took part in an international week of action targeting the online sale of counterfeit and illegal medicines. U.S. Immigration and Customs Enforcement’s (ICE) Homeland Security Investigations (HSI), in coordination with the Department of Justice, seized 686 websites this week that were illegally selling counterfeit pharmaceuticals. The seizures were part of Project Bitter Pill, the current effort under of Operation In Our Sites (IOS). Bitter Pill was part of the INTERPOL-led Operation Pangea V.

A global enforcement effort, Pangea is an annual operation aimed at disrupting the organized crime networks behind the illicit online sale of fake drugs. Worldwide, preliminary results show Pangea has accounted for 79 arrests and the seizure of 3.7 million doses of potentially life-threatening counterfeit medicines worth an estimated value of $10.5 million. Additionally, approximately 18,000 websites engaged in illegal sale of counterfeit drugs were taken down.

During Pangea V, which ran from Sept. 25 to Oct. 2, operations were conducted in Europe and throughout the United States at websites linked to the illegal Internet supply of medicines. U.S. Customs and Border Protection (CBP) intercepted packages that were believed to contain fake or illicit drugs. Various payment processing companies supported the operation by identifying and blocking payments connected to illicit online pharmacies, identifying individuals responsible for sending spam emails and identifying abuse of electronic payment systems.

“These international partnerships are essential in the global fight against the trafficking of counterfeit drugs,” said ICE Director John Morton. “Instead of taking potentially life-saving medicines, customers are duped into purchasing drugs that are fake or untested and could ultimately do them more harm than good.”

Pangea is coordinated by INTERPOL, the World Customs Organization, the Permanent Forum of International Pharmaceutical Crime, the Heads of Medicines Agencies Working Group of Enforcement Officers, Pharmaceutical Security Institute, and Europol. For the first time, Pangea was also supported by the Center for Safe Internet Pharmacies which brings together 12 of the world’s leading Internet and e-commerce companies.

“When someone is sick, can’t afford to purchase expensive medicine or is just trying to save money, they are more likely to take a chance and buy medicines online, making themselves vulnerable to purchasing fake, illicit or spurious medical products and thus harming themselves,” said INTERPOL Secretary General Ronald K. Noble. “Organized, sophisticated criminals and rogue pharmacies are unfortunately using the Internet to defraud innocent consumers, to place them in harm’s way, to steal their identities and to engage in credit card fraud.”

The goals of this operation were to disrupt the illegal distribution of medicines and to raise public awareness about the significant health risks associated with buying medicines online and the increased risk of becoming a victim of identity and credit card fraud.

Bitter Pill, the U.S. operation, was managed by the National Intellectual Property Rights Coordination Center (IPR Center), including HSI Baltimore, CBP, the U.S. Attorney for the District of Maryland, and the Computer Crime Intellectual Property Section of the Department of Justice Criminal Division. The Food and Drug Administration, Office of Criminal Investigations and the Federal Bureau of Investigation also participated in Pangea and supported Bitter Pill.

“Interdiction of illegal pharmaceuticals is one of CBP’s top priorities,” said CBP Deputy Commissioner David V. Aguilar. “The rise of Internet pharmaceutical sale sites has resulted in increases of imported packages containing illegal medications, which is a risk to U.S. consumers. CBP is proud to be a part of this effort.”

IOS is a sustained law enforcement initiative that began two years ago to protect consumers by targeting the sale of counterfeit merchandise on the Internet. Those websites are now shut down and their domain names are in the custody of the federal government. Visitors to the websites will find a seizure banner that notifies them that the domain name has been seized by federal authorities and educates them about the federal crime of trafficking in counterfeit goods. The 686 domain names seized during Bitter Pill bring the total number of IOS domain names seized in the last two years to 1,525. The domain names are subject to forfeiture under federal laws that afford individuals who have an interest in the seized domain names a period of time after the “Notice of Seizure” to file a petition with a federal court and additional time after the “Notice of Forfeiture” to contest the forfeiture. If no petitions or claims are filed, the domain names become property of the U.S. government.

During this project, HSI special agents made undercover purchases of counterfeit drugs from multiple websites. The counterfeit drugs seized during Bitter Pill included anti-cancer medication, antibiotics and erectile dysfunction pills as well as weight loss and food supplements. Investigations are ongoing as special agents continue to connect shipments and websites with organized criminal networks.

The IPR Center is one of the U.S. government’s key weapons in the fight against criminal counterfeiting, piracy and commercial fraud. As a task force, the IPR Center uses the expertise of its 21-member agencies to share information, develop initiatives, coordinate enforcement actions and conduct investigations related to IP theft and commercial fraud. Through this strategic interagency partnership, the IPR Center protects the public’s health and safety, the U.S. economy and our war fighters. For more information on the IPR Center please visit


Beware of the Dangers of Counterfeit Air Bags

By Blog

WASHINGTON – Following investigations by U.S. Immigration and Customs Enforcement’s (ICE) Homeland Security Investigations (HSI), the U.S. Department of Transportation’s National Highway Traffic Safety Administration (NHTSA) issued a consumer safety advisory today to alert vehicle owners and repair professionals to the dangers of counterfeit air bags.

While the counterfeit air bags seized in the investigations look nearly identical to certified, original equipment parts – including bearing the insignia and branding of major automakers – NHTSA testing showed consistent malfunctioning ranging from non-deployment of the air bag to the expulsion of metal shrapnel during deployment. The agencies are not aware of any deaths or injuries connected to counterfeit air bags at this time.

While the full scope and scale of the problem of counterfeit air bags is uncertain from currently available data, ICE and U.S. Customs and Border Protection (CBP) have identified certain vehicle makes and models for which these air bags may be available based on seizures and investigations to date. NHTSA believes this issue affects less than 0.1 percent of the U.S. vehicle fleet and only vehicles which have had an air bag replaced within the past three years by a repair shop that is not part of a new car dealership may be at risk.

“Organized criminals are selling dangerous counterfeit and substandard airbags to consumers and suppliers with little to no regard to hazardous health and safety consequences,” said ICE Director John Morton. “We will continue to aggressively investigate criminal supply chains with our law enforcement and private industry partners and bring these criminals to justice.”

Consumers who believe they may be at risk should contact the call center that has been established by their auto manufacturer to have their vehicle inspected at their own expense and their air bag replaced if necessary. The full list of call centers and additional information is available at

“Anytime equipment that is critical to protecting drivers and passengers fails to operate properly, it is a serious safety concern,” said Transportation Secretary Ray LaHood. “We want consumers to be immediately aware of this problem and to review our safety information to see if their vehicle could be in need of inspection.”

NHTSA has been working with a number of government agencies – including ICE, CBP, and the Intellectual Property Rights Coordination Center (IPR Center) to better understand the issue of counterfeit air bags and how to prevent them from being purchased and installed in vehicles. To view the video of the performance tests of the counterfeit air bags, please visit

“We expect all motor vehicle equipment to meet federal safety standards – and air bags in particular play a central role in keeping drivers and passengers safe in the event of a crash,” said NHTSA Administrator David Strickland. “That’s why it’s critical that vehicle owners work with their automotive dealers and repair professionals to ensure they use the appropriate, original equipment parts in the event they need to replace their air bag.”

The IPR Center, who assisted in the investigations, is one of the U.S. government’s key weapons in the fight against criminal counterfeiting, piracy and commercial fraud. As a task force, the IPR Center uses the expertise of its 21-member agencies to share information, develop initiatives, coordinate enforcement actions and conduct investigations related to IP theft and commercial fraud. Through this strategic interagency partnership, the IPR Center protects the public’s health and safety, the U.S. economy and our war fighters. For more information on the IPR Center please visit


Russians Indicted for Illegal Export of High-Tech Microelectronics from US to Russia

By Export, International Business

An indictment was unsealed today in United States District Court for the Eastern District of New York charging 11 members of a Russian military procurement network operating in the United States and Russia, as well as a Texas-based export company and a Russia-based procurement firm, with illegally exporting high-tech microelectronics from the United States to Russian military and intelligence agencies.1 Alexander Fishenko, an owner and executive of the American and Russian companies, is also charged with operating as an unregistered agent of the Russian government inside the United States by illegally procuring the high-tech microelectronics on behalf of the Russian government. The microelectronics allegedly exported to Russia are subject to strict government controls due to their potential use in a wide range of military systems, including radar and surveillance systems, weapons guidance systems, and detonation triggers.

The charges were announced by Loretta E. Lynch, United States Attorney for the Eastern District of New York; Lisa Monaco, Assistant Attorney General, National Security Division, Department of Justice; Stephen L. Morris, Special Agent in Charge, Federal Bureau of Investigation, Houston Field Office; Under Secretary of Commerce Eric L. Hirschhorn, Department of Commerce; and Timothy W. Reeves, Special Agent in Charge, Naval Criminal Investigative Service, Central Field Office. The arrested defendants will be arraigned later today before United States Magistrate Judge George C. Hanks, Jr., at the U.S. Courthouse in Houston, Texas, where the government will seek their removal to the Eastern District of New York.

In addition to the unsealing of the charges, search warrants were executed today at seven residences and business locations associated with the defendants, and seizure warrants were executed on five bank accounts held by Fishenko and defendant Arc Electronics, Inc., the Texas-based export company. In conjunction with the unsealing of these charges, the Department of Commerce has added 165 foreign persons and companies who received, transshipped, or otherwise facilitated the export of controlled commodities by the defendants to its “Entity List.” This designation imposes a license requirement before any commodities can be exported from the United States to these persons or companies, and establishes a presumption that no such license will be granted.

The Scheme

As alleged in the indictment, between approximately October 2008 and the present, Fishenko and the other defendants engaged in a surreptitious and systematic conspiracy to obtain advanced, technologically cutting-edge microelectronics from manufacturers and suppliers located within the United States and to export those high-tech goods to Russia, while carefully evading the government licensing system set up to control such exports. The microelectronics shipped to Russia included analog-to-digital converters, static random access memory chips, microcontrollers, and microprocessors. These commodities have applications, and are frequently used, in a wide range of military systems, including radar and surveillance systems, missile guidance systems and detonation triggers. Russia does not produce many of these sophisticated goods domestically.

According to the indictment and a detention motion filed by the government today, defendant Alexander Fishenko was born in what was, at the time, the Soviet Republic of Kazakhstan, and graduated from the Leningrad Electro-Technical Institute in St. Petersburg, Russia. He immigrated to the United States in 1994, and became a naturalized citizen of the United States in 2003. In 1998, he founded defendant Arc Electronics, Inc. (“Arc”) in Houston. Between 2002 and the present, Arc has shipped approximately $50,000,000 worth of microelectronics and other technologies to Russia. Fishenko and his wife are the sole owners of Arc, and Fishenko serves as the company’s President and Chief Executive Officer. Fishenko is also a part owner and executive of defendant Apex System, L.L.C. (“Apex”) a Moscow, Russia-based procurement firm. Apex, working through subsidiaries, served as a certified supplier of military equipment for the Russian government. Between 1996 and the present, Fishenko has regularly traveled back and forth between the United States and Russia. Defendant Alexander Posobilov entered the United States from Russia in 2001, and became a naturalized citizen in 2008. He joined Arc in 2004, and serves as its director of procurement. Posobilov was arrested at George Bush Intercontinental Airport in Houston on his way to Singapore and Moscow.

The defendants allegedly exported many of these high-tech goods, frequently through intermediary procurement firms, to Russian end users, including Russian military and intelligence agencies. To induce manufacturers and suppliers to sell them these high-tech goods, and to evade applicable export controls, the defendants often provided false end user information in connection with the purchase of the goods, concealed the fact that they were exporters, and falsely classified the goods they exported on export records submitted to the Department of Commerce. For example, in order to obtain microelectronics containing controlled, sensitive technologies, Arc claimed to American suppliers that, rather than exporting goods to Russia, it merely manufactured benign products such as traffic lights. Arc also falsely claimed to be a traffic light manufacturer on its website. In fact, Arc manufactured no goods and operated exclusively as an exporter.

According to the court documents, the defendants went to great lengths to conceal their procurement activities for the Russian military. For example, on one occasion, defendants Posobilov and Yuri Savin, the Director of Marketing at another Russian procurement firm, discussed how best to conceal the fact that certain goods Savin had purchased from Arc were intended for the Russian military. Savin asked Posobilov, “What can we do if a client is military all over?” Posobilov replied, “We can’t be the ones making things up. You should be the ones.” Similarly, on another occasion defendant Fishenko directed a Russian procurement company that, when the company provided false end user information, to “make it up pretty, correctly, and make sure it looks good.” On yet another occasion, Posobilov instructed a Russian procurement company to “make sure that” the end use certificate indicated “fishing boats, and not fishing/anti-submarine ones . . . Then we’ll be able to start working.”

Despite this subterfuge, according to the documents, the investigation revealed that the defendants were supplying Russian government agencies with sophisticated microelectronics. For example, the investigation uncovered a Russian Ministry of Defense document designating an Apex subsidiary as a company “certified” to procure and deliver military equipment and electronics. The FBI also recovered a letter sent by a specialized electronics laboratory of Russia’s Federal Security Service (“FSB”), Russia’s primary domestic intelligence agency, to an Apex affiliate regarding certain microchips obtained for the FSB by Arc. The letter stated that the microchips were faulty, and demanded that the defendants supply replacement parts.

In addition, in anticipation of an inquiry by the Department of Commerce regarding the export of certain controlled microelectronics, defendants Fishenko, Posobilov, and Arc salesperson Viktoria Klebanova allegedly directed Apex executives Sergey Klinov and Dmitriy Shegurov, as well as other Apex employees, to alter Apex’s website and forge documents regarding certain transactions to hide Apex’s connections to the Russian military. In connection with the cover-up, Apex removed images of Russian military aircraft and missiles and other links to the Russian Ministry of Defense from its website.

The Arc Defendants

In addition to Fishenko, Posobilov, and Klebanova, the indictment charges Arc salespersons Lyudmila Bagdikian, Anastasia Diatlova, Sevinj Taghiyeva, and Svetalina Zagon, as well as Arc shipping manager Shavkat Abdullaev, with one count of conspiring to violate and twenty-one counts of violating the International Emergency Economic Powers Act (“IEEPA”) and the Arms Export Control Act (“AECA”), and with conspiring to commit wire fraud. According to the indictment, these defendants obtained controlled microelectronics by lying and submitting false information regarding the true nature, users, and intended uses of the high-tech goods, then exporting the goods, without the required licenses, to procurement firms in Russia. The defendants’ principal port of export for these goods was John F. Kennedy International Airport in the Eastern District of New York.

The Foreign Defendants

According to the indictment, in addition to owning and controlling Arc, Fishenko is also a controlling principal of the Russian procurement firm Apex, the defendant Sergey Klinov is the chief executive officer of Apex, and the defendant Dmitriy Shegurov is an employee of Apex. Apex and its affiliates supplied microelectronics to Russian government agencies, including Russian military and intelligence agencies. The defendant Yuri Savin was the Director of Marketing at Atrilor, Ltd., another Russian procurement firm. Klinov, Shegurov and Savin conspired with Fishenko and the Arc defendants to obtain controlled U.S.-origin microelectronics and to export those technologically sensitive goods to Russia without the required export licenses by falsifying information to hide the true nature, users and intended uses of the goods. In addition, Fishenko, Posobilov, Klebanova, Klinov and Shegurov were charged with obstruction of justice, and Fishenko and Arc were charged with conspiring to commit money laundering.

The individual defendants face maximum terms of incarceration of five years for the conspiracy charge, twenty years for each of the substantive IEEPA and AECA charges, and twenty years for the obstruction of justice charge. In addition, Fishenko faces a maximum term of incarceration of twenty years for conspiring to commit money laundering, and ten years for acting as an unregistered agent of the Russian government. The corporate defendants face fines of up to $500,000 for the conspiracy count and $1,000,000 for each of the substantive IEEPA and AECA counts.

“As alleged in the indictment, the defendants spun an elaborate web of lies to evade the laws that protect our national security. The defendants tried to take advantage of America’s free markets to steal American technologies for the Russian government. But U.S. law enforcement detected, disrupted, and dismantled the defendants’ network,” stated United States Attorney Loretta E. Lynch. “We will not rest in our efforts to protect the technological advantage produced by American ingenuity. And, we will expose and hold responsible all who break our counter-proliferation laws, particularly those, like Fishenko, who serve foreign governments.” Ms. Lynch thanked the United States Attorney’s Office for the Southern District of Texas for its assistance in this matter.

“Today’s case underscores the importance of safeguarding America’s sensitive technology and our commitment to disrupt and prosecute networks that attempt to illegally export these goods,” said Lisa Monaco, Assistant Attorney General for National Security. “I applaud the many agents, analysts, and prosecutors who worked on this extensive investigation.”

“In this day and time, the ability of foreign countries to illegally acquire sensitive and sophisticated U.S. technology poses a significant threat to both the economic and national security of our nation,” said Houston FBI Special Agent in Charge Stephen L. Morris. “While some countries may leverage our technology for financial gain, many countries hostile to the United States seek to improve their defense capabilities and to modernize their weapons systems at the expense of U.S. taxpayers. The FBI will continue to work aggressively with our partners in the U.S. Intelligence Community to protect this technology and hold accountable those companies that willfully choose to violate our U.S. export laws.”

“Today’s action is a perfect example of two of the core benefits of the Administration’s export control reform effort – higher enforcement walls around controlled items and extensive coordination and cooperation among the enforcement agencies. I applaud our special agents who worked with the Justice Department in the interagency effort that led to today’s actions,” said Under Secretary of Commerce Eric L. Hirschhorn.

“The receipt of U.S.-made, cutting-edge microelectronics has advanced Russia’s military technological capabilities. NCIS and the Department of the Navy have worked closely with the FBI, the Department of Justice, and the Department of Commerce in this investigation due to the potential for significant enhancement of Russian naval weapons systems that would result from the illegal acquisition of these export-controlled technologies,” said Special Agent in Charge Timothy W. Reeves, NCIS Central Field Office.

As a result of this case, there may be victims and witnesses who need to contact the agencies involved in the investigation. If your business has been approached by one of the defendants, or by someone trying to obtain export-protected, sensitive technology who appeared not to be legitimate, please report that information to[email protected]. The information will remain confidential and will be handled by the appropriate authorities.

The government’s case is being prosecuted by Assistant United States Attorneys Daniel Silver, Hilary Jager, and Claire Kedeshian, as well as Trial Attorney David Recker of the Counterespionage Section of the Department of Justice.

The Defendants:

Arc Electronics, Inc.
Principal Place of Business: Houston, Texas

Apex System, L.L.C.
Principal Place of Business: Moscow, Russia

Alexander Fishenko
Age: 46

Shavkat Abdullaev
Age: 34

Lyudmila Bagdikian
Age: 58

Anastasia Diatlova
Age: 38

Viktoria Klebanova
Age: 37

Sergey Klinov:
Age: 44

Alexander Posobilov
Age: 58

Yuri Savin:
Age: 36

Dmitriy Shegurov
Age: Unknown

Sevinj Taghiyeva
Age: 32

Svetalina Zagon
Age: 31


1The charges contained in the indictment are merely allegations, and the defendants have not yet been convicted of these offenses.


Sophilia Hsu Joins CHESTER pllc

By News


Sophilia Hsu joins CHESTER pllc

The global business and technology law firm of CHESTER pllc is pleased to announce that Sophilia Hsu has joined the firm as an associate.

Sophilia handles a range of commercial of intellectual property matters, including copyright, trade secret, and trademark registration, licensing and enforcement.  She also assists clients with technology transactions, e-commerce and international business and trade matters.

Sophilia received her bachelor of business administration degree in Marketing and graduated from the prestigious Business Honors Program at the University of Austin at Texas.  She obtained her law degree from Baylor University School of Law.

“In addition to having an excellent academic background and experience, our team members must be innovative, problem-solving ‘servant leaders,’” said firm founder and managing partner, Jim Chester.  “Sophilia fits this description very well, and we expect great things from her.”

CHESTER pllc is a Dallas, Texas law firm providing comprehensive legal services to innovation-based companies doing business in the US, around the world, and on the web.  Its mission (and passion) is helping entrepreneurs and emerging companies solve problems and protect their interests. CHESTER pllc delivers value by providing business-savvy, cost-effective solutions to legal challenges.  The firm offers a wide array of business legal solutions, such as business entity formation (LLCs, corporations, etc.), trademarks and other intellectual property, technology transactions, domestic and international contracts, and ecommerce matters.  Additional information about the firm and its attorneys may be found at

India’s Supreme Court: Enforce Patents or Provide Generic Drugs for the Poor?

By Blog, International Business, International IP
“A child suffering from cancer in New Delhi, India. This week, India’s Supreme Court hears arguments in a case that will affect how many poor people can afford cancer drugs. Novartis is defending a patent on its cancer medication, Gleevec.”- American Public Media’s (Photo by Sajjad Hussain/AFP/Getty Images)

According to Reuters, Swiss drug maker Novartis is trying to secure patent protection for one of its drugs, Glivec, in India. Its taken the case up to India’s Supreme Court because patent protection was denied protection in the lower courts which found that the drug wasn’t a new molecule, but rather an amended version of a known compound.

According to America Public Media’s Marketplace, Novartis first developed Glivec in the 1990s. Since then, it has modified its drug, which is why Novartis believes it deserves a patent. Ranjit Shahani, a company president, says “Glivec is widely recognized as a medical breakthrough and has been granted a patent in more than 40 countries, including China, Russia, and Taiwan.” However, India’s courts denied the patent in 2006 because its not really new under Indian law, which prevents pharmaceutical companies from from continually renewing patents on existing drugs by making slight changes to original medications.

However, what’s at stake isn’t really about getting Indian patent protection for Glivec in India at all. Reuters explains that India only accounts for a small fraction of Novartis’ total global sales. And Glivec is only used to treat chronic myeloid leukaemia and some gastrointestinal cancers. The issue is much bigger than that. Its really all about the global production of generic drugs.

India is the world’s largest exporter of cheap generic drugs. In fact, India is considered the pharmacy of developing world. Leena Menghaney, who is with the aid organization Doctors Without Borders, told Marketplace that generic versions of Glivec in India cost 96 percent less than in the United States, where the drug is patented and costs $70,000 for a year’s supply. Megnhaney explains, “If Novartis wins, the generic industry will possibly move back from producing some of the drugs they produce today. So this will have a chilling effect on generic competition.”

Novartis and other large drug makers are concerned that a ruling against patent protection would cement India’s status as a country in which patents are extremely hard to protect. Critics of big Western drug makers say that a win for Novartis would jeopardize the supply of cheap generic drugs to hundreds of millions of poor people around the world.

So one the one hand, there are millions of poor people who can’t afford to pay for drugs that are protected by patents. On the other, pharmaceutical companies are fighting for the exclusive rights to produce the drugs that they invented, in which they have invested countless years and resources.