Monthly Archives

November 2012

Iranian National Charged for Illegally Exporting Military Antennas from US

By Export, International Business

Amin Ravan, a citizen of Iran, and his Iran-based company, IC Market Iran (IMI), have been charged in an indictment unsealed today with conspiracy to defraud the United States, smuggling, and violating the Arms Export Control Act (AECA) in connection with the unlawful export of 55 military antennas from the United States to Singapore and Hong Kong. The charges are the result of an investigation by U.S. Immigration and Customs Enforcement’s (ICE) Homeland Security Investigations (HSI) and its federal law enforcement partners.

According to the indictment, which was returned under seal by a grand jury in Washington Nov. 16, Ravan was based in Iran and, at various times, acted as an agent of IMI in Iran and an agent of Corezing International Pte Ltd, a company based Singapore that also maintained offices in Hong Kong and China.

On Oct. 10, 2012, Ravan was arrested by authorities in Malaysia in connection with a U.S. provisional arrest warrant. The United States is seeking to extradite him from Malaysia to stand trial in Washington. If convicted of the charges against him, Ravan faces a potential 20 years in prison for the AECA violation, 10 years in prison for the smuggling charge and five years in prison for the conspiracy charge.

According to the indictment, in late 2006 and early 2007, Ravan attempted to procure for shipment to Iran export-controlled antennas made by a company in Massachusetts, through an intermediary in Iran. The antennas sought by Ravan were cavity-backed spiral antennas suitable for airborne or shipboard direction finding systems or radar warning receiver applications, as well as biconical antennas that are suitable for airborne and shipboard environments, including in several military aircraft.

After this first attempt was unsuccessful, Ravan joined with two co-conspirators at Corezing in Singapore so that Corezing would contact the Massachusetts company and obtain the antennas on behalf of Ravan for shipment to Iran. When Corezing was unable to purchase the export-controlled antennas from the Massachusetts firm, Corezing then contacted another individual in the United States who was ultimately able to obtain these items from the Massachusetts firm by slightly altering the frequency range of the antennas to avoid detection by the company’s export compliance officer.

In March 2007, Ravan and the co-conspirators at Corezing agreed on a purchase price of $86,750 for 50 cavity-backed antennas from the United States and discussed structuring payment from Ravan to his Corezing co-conspirators in a manner that would avoid transactional delays caused by the Iran embargo. Ultimately, between July and September 2007, a total of 50 cavity-backed spiral antennas and five biconical antennas were exported from the United States to Corezing in Singapore and Hong Kong.

According to the indictment, no party to these transactions – including Ravan or IMI – ever applied for or received a license from the State Department’s Directorate of Defense Trade Controls to export any of these antennas from the United States to Singapore or Hong Kong.

Two of Ravan’s co-conspirators, Lim Kow Seng, aka Eric Lim, and Hia Soo Gan Benson, aka Benson Hia, principals of Corezing, have been charged in a separate indictment in the District of Columbia in connection with this particular transaction involving the export of military antennas to Singapore and Hong Kong. The two Corezing principals were arrested in Singapore last year and the United States is seeking their extradition.

This investigation was jointly conducted by HSI special agents in Boston and Los Angeles; FBI agents and analysts in Minneapolis; and Department of Commerce, Office of Export Enforcement agents and analysts in Chicago and Boston.

Substantial assistance was provided by the U.S. Department of Defense, U.S. Customs and Border Protection, the State Department’s Directorate of Defense Trade Controls, and U.S. Department of Justice, Office of International Affairs.

The prosecution is being handled by Assistant U.S. Attorney Anthony Asuncion of the U.S. Attorney’s Office for the District of Columbia and Trial Attorney Richard S. Scott of the Counterespionage Section of the Justice Department’s National Security Division.


Customs Targets Websites Selling Counterfeits for Cyber Monday

By Customs IP Enforcement, Intellectual Property

U.S. Immigration and Customs Enforcement’s (ICE) Homeland Security Investigations (HSI), law enforcement agencies from Belgium, Denmark, France, Romania and the United Kingdom, and the European Police Office (Europol) seized 132 domain names today that were illegally selling counterfeit merchandise online to unsuspecting consumers.

The 132 domain names seized are part of Project Cyber Monday 3 and Project Transatlantic. These websites were set up to dupe consumers into unknowingly buying counterfeit goods as part of the holiday shopping season. The operation was coordinated by the ICE HSI-led National Intellectual Property Rights Coordination Center (IPR Center) in Washington, D.C.

This is the third year that the IPR Center has targeted websites selling counterfeit products online in conjunction with Cyber Monday. An iteration of Operation In Our Sites (IOS), Cyber Monday 3 seized 101 websites and yielded one arrest. Additionally, recognizing the global nature of Internet crime, this year the IPR Center partnered with Europol, who, through its member countries, executed coordinated seizures of foreign-based top-level domains such as .eu, .be, .dk, .fr, .ro and .uk. This effort is titled Project Transatlantic and resulted in 31 domain name seizures.

“This operation is a great example of the tremendous cooperation between ICE and our international partners at the IPR Center,” said ICE Director John Morton. “Our partnerships enable us to go after criminals who are duping unsuspecting shoppers all over the world. This is not an American problem, it is a global one and it is a fight we must win.”

The IPR Center and Europol received leads from various trademark holders regarding the infringing websites. Those leads were disseminated to eight investigating HSI field offices in Baltimore, Buffalo, Denver, El Paso, Newark, San Antonio, San Diego, and Ventura (Calif.) and to the investigating Europol member countries including Belgium, Denmark, France, Romania and the United Kingdom.

“Europol became a member of the IPR Center this year and I am glad to be able to announce these operational successes,” said Rob Wainwright, Director of Europol. “IPR theft is not a harmless and victimless crime. It can cause serious health and safety risks and it undermines our economy.”

The domain names seized are now in the custody of the governments involved in these operations. Visitors typing those domain names into their Web browsers will now find a banner that notifies them of the seizure and educates them about the federal crime of willful copyright infringement.

In addition to the domain name seizures, officials identified PayPal accounts utilized by the infringing websites. Proceeds received through the identified PayPal accounts, in excess of $175,000, are currently being targeted for seizure by the investigating HSI field offices.

“We couldn’t be more pleased with the opportunity to work closely with HSI to shut down criminals targeting our customers and our brand just as the holiday season takes off,” said Tod Cohen, Vice President and Deputy General Counsel of Government Relations for eBay Inc. “PayPal and eBay Inc. pride ourselves in going above and beyond in the fight against the illegal online trafficking of counterfeit goods by partnering with law enforcement and rights owners globally, and we hope that this is fair warning to criminals that the Internet is not a safe place to try and sell fake goods.”

During this operation, federal law enforcement officers made undercover purchases of a host of products; including professional sports jerseys, DVD sets, and a variety of clothing, jewelry and luxury goods from online retailers who were suspected of selling counterfeit products. If the copyright holders confirmed that the purchased products were counterfeit or otherwise illegal, seizure orders for the domain names of the websites that sold these goods were obtained from federal magistrate judges.

IOS is a sustained law enforcement initiative that began more than two years ago to protect consumers by targeting the sale of counterfeit merchandise on the Internet. The 101 domain names seized under Project Cyber Monday 3 bring the total number of IOS domain names seized to 1,630 since the operation began in June 2010. Since that time, the seizure banner has received more than 110 million individual views.

Of the 1,529 previous domain names seized, 684 have now been forfeited to the U.S. government. The federal forfeiture process affords individuals who have an interest in seized domain names a period of time after a “Notice of Seizure” to file a petition with a federal court and additional time after a “Notice of Forfeiture” to contest the forfeiture. If no petitions or claims are filed, the domain names become the property of the U.S. government. Additionally, a public service announcement, launched in April 2011, is linked from the seizure banner on each of the 684 forfeited websites.

The banner and video educate the public about the criminal consequences of trafficking in counterfeit goods and the economic impact that crime has on the U.S. and global economies.

U.S. Attorney’s Offices in the Districts of Maryland, Colorado, New Jersey, Southern District of California, Central District of California, Western District of New York, and the Western District of Texas issued the warrants for the seizures. Significant assistance was provided by the Department of Justice’s Computer Crime and Intellectual Property Section.

The IPR Center is one of the U.S. government’s key weapons in the fight against counterfeiting and piracy. Working in close coordination with the Department of Justice Task Force on Intellectual Property, 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. Through this strategic interagency partnership, the IPR Center protects the public’s health and safety, the U.S. economy and the war fighters.

To report IP theft or to learn more about the IPR Center, visit


Homeland Security’s Operation Fashion Faux Pas

By Customs IP Enforcement, Intellectual Property

Photo by ICE

Special agents with U.S. Immigration and Customs Enforcement’s (ICE) Homeland Security Investigations (HSI) executed state search warrants this week against five local vendors and seized more than $200,000 worth of goods, capping a six month crackdown on Orange County retailers suspected of selling counterfeit merchandise called Operation Fashion Faux Pas.

This week’s enforcement actions are the culmination of investigative activities initiated by Orange County HSI special agents in May to identify retailers involved in the theft of intellectual property. Over the course of Operation Fashion Faux Pas, investigators conducted a total of 18 warranted and consensual searches resulting in the seizure of more than $820,000 worth of counterfeit goods. That figure is based on the estimated retail value of the merchandise had it been genuine. The seized goods, including purses, jewelry, sunglasses, cosmetics and perfume, bear the counterfeit trademarks of more than two dozen well-known brands, such as Louis Vuitton, Gucci, Rolex, Hermes and Chanel.

Among the vendors targeted in this week’s enforcement actions were a Tustin hair salon, a Garden Grove shoe store and several retail kiosks near the Huntington Beach pier. HSI special agents also executed warrants at private residences in Newport Beach and Westminster linked to individuals suspected of selling counterfeit items.

“As we remind consumers, buying knockoffs doesn’t pay off,” said Claude Arnold, special agent in charge for HSI Los Angeles. “The vendors who sell counterfeit merchandise are robbing from the legitimate companies, many of them U.S.-based, that make these products. And perhaps most important, they’re hurting the men and women who depend on those companies for their livelihood.”

HSI received assistance with the execution of this week’s search warrants from the Huntington Beach, Newport Beach, Westminster, Tustin and Garden Grove police departments. HSI also worked closely on the cases with Investigative Consultants, a private brand protection firm that provides expertise on the identification of counterfeit merchandise. The evidence is being turned over to the Orange County District Attorney’s Office for review to determine if criminal charges are warranted.

So far, four Orange County vendors have been indicted on state criminal charges as a result of Operation Fashion Faux Pas. Those charged include the suppliers and proprietors of a Laguna Beach shop, Cobbler’s Corner, and a Westminster beauty salon and retail outlet, Spa by Mode. Searches of both businesses turned up significant quantities of counterfeit designer accessories, including leather goods, hats and sunglasses. The August enforcement action involving Cobbler’s Corner was worked jointly by HSI and the Laguna Beach Police Department.

In fiscal year 2011, intellectual property rights enforcement by HSI and U.S. Customs and Border Protection led to more than 24,000 seizures, a 24 percent increase compared to the previous year. The seized goods had a total value of more than $1.1 billion, based upon the manufacturer’s suggested retail price had the products been legitimate.

According to the International Anti-Counterfeiting Coalition, product counterfeiting costs U.S. businesses $200 to $250 billion a year in lost revenue.


Battle Over Michigan State Highway M-22 Trademark

By Intellectual Property

Brothers Matt and Keegan Myers are kiteboarding royalty. (Kiteboarding is a sport in which a person’s feet are strapped to a small surfboard and is propelled by a kite to which the person is harnessed.)  They traveled the world in search of the perfect winds and waves. They realized that the ideal conditions had been right in front of them all along in Michigan, their homestate. Together, they started a kiteboarding company called Broneah, Inc. Later, in 2003, the brothers started printing T-shirts and bumper stickers with the logo of Michigan’s scenic State Highway M-22 for local surfers and kiteboarders. In 2006, the brothers were featured on the cover of the local Traverse Magazine in which Keegan wore a T-shirt with the M-22 logo. Immediately, there was a high demand for M-22 T-shirts and in November 2007, the brothers opened the M-22 Inc store in Traverse City, Michigan. The brothers trademarked the words “M 22” in 2008 and the M-22 state highway logo in 2011.

To the brothers, M-22 symbolizes an outdoorsy, active way of life that is exemplified in the northern shore of Lake Michigan. They have been aggressively protecting their trademark by sending cease an desist letters to businesses using the M-22 logo. Later, they started asserting the right to images of other Michigan state highways. They and their lawyers argue that the concept of using Michigan’s highway logo (small, black, stylized letter “M” above a large, black number “22”, within a white diamond, on a black square background) on clothing, sporting goods, and novelty items was exclusively theirs.

Other local businesses, like Carolyn Sutherland, owner of Good Hart General Store, disagree. Good Hart General Store is a souvenir shop that sits on M-119 and has been selling items bearing the M-119 logo for decades. This past March, Sutherland appealed to her state representative and put together a 140 page document for him to present to the attorney general. In May, Michigan’s Attorney General Bill Schuette sided with Sutherland and stated, “one person or company cannot claim to have produced all of the goodwill associated with the particular highway-route marker design that represents the region.” However, the brothers are planning on defending their trademark, arguing that trademarks are a matter of federal law, so the attorney general’s opinion is of little significance.

Sources: WSJAmerican Public Media

“Made in USA” Basics

By White Papers

The Federal Trade Commission (“FTC”) is responsible for preventing deception and unfairness in the marketplace.  The Federal Trade Commission Act grants the FTC the ability to bring enforcement actions against false or misleading claims that a product is of US origin.[1] Additionally, the FTC interprets the Buy American Act, which requires that a product manufactured in the United States for more than fifty percent of its parts be considered “Made in USA” for government procurement purposes. [2] The FTC also interprets the American Recovery and Reinvestment Act of 2009.[3] Its law enforcement efforts pursue fraudulent marketers who wrongfully capitalized on the Act.

1. Although the “All or Virtually All” Standard Has No Bright Line, the Commission Will Consider Several Factors

The FTC formally announced in 1997 that it would require that a product advertised in an unqualified “Made in USA” claim must be “all or virtually all” made in the United States.[4] When a manufacturer claims that a product is “Made in USA,” it should possess and rely on a “reasonable basis” that the product is in fact all or virtually all made in the United States at the time the representation is made. This means a manufacturer needs to be able to substantiate its claims through competent and reliable evidence.[5]

A product that is all or virtually all made in the United States will ordinarily be one in which all significant parts[6] and processing that go into the product are of US origin. In other words, where a product is labeled or otherwise advertised with an unqualified “Made in USA” claim, it should only contain negligible amounts of foreign content.[7] The FTC has said that although there is no “bright line” to establish when a product is or is not “all or virtually all” made in the United States, it will consider a number of factors in making this determination.

A. To Make an Unqualified “Made in USA” Claim, The First Factor Requires That The United States Be the Site of Final Assembly or Processing

The first factor that the FTC takes into account is a prerequisite requirement. For a product to be considered “all or virtually all” made in the United States, the final assembly or processing of the product must take place in the United States. Because consumer perception evidence has indicated that the country in which a product is put together or completed is highly significant to consumers in evaluating where the product is made, the FTC has made this a minimal threshold requirement that must be fulfilled before it considers any other factors.

Regardless of the extent to which a product has other parts or processing in the United States, to meet the “all or virtually all” made in the United States standard, the product must be “substantially changed” in the United States. For example, even if a product imported into the United States has a very high proportion of US manufacturing costs, the US Customs Service will not consider it to have been last substantially transformed in the United States. In these cases, the product would be required to be marked with a foreign country of origin and an unqualified US origin claim could not be appropriately be made for the product.[8] Another example is a product that was manufactured primarily in the United States (and last substantially transformed there) but sent to Canada or Mexico for final assembly. This product can have a US origin claim, but it should be qualified to disclose the assembly that took place outside the United States.[9]

B. The Second Factor is the Proportion of US Manufacturing Costs

If the product is assembled or otherwise completed in the United States, the FTC will also examine the percentage of total cost of manufacturing that is attributable to US costs, such as parts and processing, and to foreign costs.  Where the percentage of foreign content is very low, it is more likely for the FTC to consider the product all or virtually all made in the United States. However, there is no fixed point at which products suddenly meet the “all or virtually all” standard. Instead, the FTC conducts the inquiry on a case-by-case basis and balances the proportion of US manufacturing costs with the other factors discussed. The FTC also considers the nature of the product and the consumers’ expectations in determining whether an enforcement action is warranted.[10] When a product has an extremely high amount of US content, potential consumer deception resulting from the unqualified “Made in USA” claim is unlikely. Therefore, the costs of bringing an enforcement action would likely outweigh any benefit that might accrue to consumer and competition.

To calculate manufacturing costs, manufacturers should ordinarily use as their measure the cost of goods sold or finished goods inventory cost, because those terms are used in accordance with generally accepted accounting principles.  Such costs will generally include (and be limited to) the cost of manufacturing materials, direct manufacturing labor, and manufacturing overhead. In determining the percentage of US content, marketers should look far enough back in the manufacturing process that a reasonable marketer would expect that it had accounted for any significant foreign content. [11]

C. The Final Factor is the Remoteness of Foreign Content

The FTC will also consider how far removed from the finished product the foreign content is. For this analysis, raw materials[12] are neither automatically included nor automatically excluded in the evaluation or whether a product is all or virtually all made in the United States. Whether or not a product whose parts and processing are of US origin would meet the “all or virtually all” standard because the product incorporated imported raw materials, like any other input, depends on what percentage of the cost of the product the raw materials constitute and how far removed from the finished product the raw materials are.[13]

For example if gold in a gold ring or clay used to make ceramic tile was imported, an unqualified “Made in USA” claim for the ring or tile would be inappropriate because of the significant value the gold and clay are likely to represent relative to the finished product because gold and clay are only one step back from the finished articles and are integral components for those articles.[14]

However, contrast this with plastic that was made from imported petroleum in the plastic case of a clock radio that was otherwise met the “all or virtually all” standard.  Suppose the petroleum was far enough removed and was an insignificant input. In this case, it is still likely appropriate to label the clock radio with an unqualified “Made in USA” claim.

Additionally, because raw materials, unlike manufactured inputs, may be inherently unavailable in the United States, the FTC will also look at whether or not the raw material is indigenous to the United States, or available in commercially significant quantities. When the material is not found or grown in the United States, consumers are likely to understand that a “Made in USA” claim on a product that incorporates such materials means that all or virtually all of the product, except for those materials not available here, originated in the United States. However, if the imported material constitutes the whole or essence of the finished product, for example the rubber in a rubber ball or the coffee beans in ground coffee, it would likely mislead the consumers to label the final product with an unqualified “Made in USA” claim.

[1]  Federal Trade Commission Act, 15 U.S.C. §§ 41-58.

[2] Buy Amerian Act, 41 U.S.C. §§ 10a-10c, the Federal Acquisition Regulations at 48 C.F.R. Part 25, and the Trade Agreements Act at 19 U.S.C. §§ 2501-2582.

[3] Pub. L. 111-5.

[4] A qualified “Made in USA” claim describes the extent, amount, or type of a product’s domestic content or processing; it indicates that the product isn’t entirely of domestic origin. (E.g., “60% U.S. content.” “Made in USA of U.S. and imported parts.” “Couch assembled in USA from Italian Leather and Mexican Frame.”) FTC, “Complying With the Made in USA Standard,” at 10 (1998).

[5] Complying with the Made In USA Standard, 6 (1998).

[6] The word “parts” is used in its general sense throughout the FTC’s Enforcement Policy Statement to refer to all physical inputs into a product, including, but not limited to subassemblies, components, parts, or materials. Complying with Made in the USA Standard, 36 (1998).

[7] Complying with the Made in USA Standard, 26 (1998).

[8] Complying with the Made in USA Standard, 37 (1998).

[9] Complying with the Made in USA Standard, 26-27 (1998).

[10] Complying with the Made in USA Standard, 27 (1998).

[11] Complying with the Made in USA Standard, 27 (1998).

[12] The FTC considers “raw materials” to be products such as minerals, plants, or animals that are processed no more than necessary for ordinary transportation.

[13] Complying with Made in USA Standard, 27 (1998).

[14] Complying with the Made in USA Standard, 29 (1998).

CHESTER pllc Announces Opening of New Office

By News

CHESTER pllc is pleased to announce the opening of its new office in Dallas, Texas. The new space is located in Lakewood Towers near White Rock Lake, and overlooks the historic Lakewood Theater and downtown Dallas (located less than four miles away).

Locating the new office in East Dallas was not an accident.

According to founding principal Jim Chester, a long-time Lakewood neighborhood resident, “East Dallas is home to a number of innovative companies and entrepreneurs, which is precisely the type of client our firm was built to serve.  Although we serve clients located throughout DFW and the U.S., as well as in other countries, we are excited to have been able to find great space in such a vibrant and dynamic area of Dallas.”

Like his entrepreneurial and innovation-based clients, Chester brings his own style to his firm and to the practice of law – and this new office is no exception.  The office exudes a sleek, modern style and confident environment reflective of CHESTER pllc’s clientele: tech-savvy, innovation-based companies.

“In addition to the modern décor, we employed the latest technologies at every turn: from cloud-based servers and hosted phone service to AppleTV based presentation screens beamed wirelessly from our Macbook Airs,” Chester added.  “Adopting state-of-the-art tools allows us to deliver legal services to our client more effectively and efficiently.”

The opening of this new office marks a significant step toward achieving Chester’s dream of creating a boutique law firm that meets the comprehensive, mission-critical legal needs of a select type of client: start-ups, entrepreneurs, and small to mid-sized intellectual property and technology based companies.

“Our firm seeks to provide an alternative to large, expensive firms by providing quality legal services for the core legal issues faced by technology and innovation-based clients at a reasonable cost,” notes Chester.  “This new location, combined with our existing staff and resources located in Atlanta, Chicago and Canada, allows us to attract and deliver value to the types of clients this firm was built to serve.”

Jim Chester Speaks at National Center for Policy Analysis Seminar

By News

J. F. (Jim) Chester, founding partner in the Dallas-based global business & technology law firm of CHESTER pllc, recently presented on how to protect innovation and technology to an audience of students at an event sponsored by the National Center for Policy Analysis (NCPA).

The event was the annual Sumners Scholars Public Policy Seminar, which is hosted by the NCPA and funded by the Hatton W. Sumners Foundation for recipients of student scholarships to become informed about today’s most important and complex public policy issues from some of the nation’s leading experts. It was held at the HiltonAnatole Hotel in Dallas, Texas, over the weekend of November 2-3, 2012. Other presenters included Steve Kroft, an Emmy Award-winning correspondent for 60 Minutes, NCPA Senior Economist Barry Asmus, which was named by USA Today as one of the five most requested speakers in the United States, Mara Liasson, a National Political Correspondent for NPR, and Admiral Patrick Walsh, former Commander of the U.S. Pacific Fleet. The title of Chester’s presentation was “Innovation: America’s Most Critical and Vulnerable Resource.” He discussed how important innovation and emerging technologies are to the success of the U.S. economy, but how vulnerable they are to attack.

The best way to pre-emptively protect innovation from infringement is to take advantage of legal protections offered by the U.S. Patent and Trademark Office. Of the event, Chester said, “I was honored to be asked to speak at this prestigious event.  These students represent some of the brightest minds in the country, and they asked thoughtful, provocative questions that really kept me on my toes.”

The National Center for Policy Analysis (NCPA) is a nonprofit, nonpartisan public policy research organization, established in 1983. Their goal is to develop and promote private, free-market alternatives to government regulation and control, solving problems by relying on the strength of the competitive, entrepreneurial private sector. They bring together the best and brightest minds to tackle the country’s most difficult public policy problems — in health care, taxes, retirement, small business, and the environment. They propose reforms that liberate consumers, workers, entrepreneurs and the power of the marketplace.

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 e-commerce matters.  Additional information about the firm and its attorneys may be found at