Yearly Archives

2013

Jul 04

CHESTER pllc Declares Independence

By Innovation, Internet / eCommerce, News

In keeping with the spirit of July 4th, Dallas-based business & innovation law firm CHESTER pllc is “declaring independence … from paper.”

The Dallas-based global business & innovation law firm of CHESTER pllc is pleased to announce that it will begin to exclusively (to the extent possible) use e-signatures starting July 4, 2013.   These e-signatures will be used on all firm documents.

For the past several months, the firm has been beta testing various services, and chose July 4th to formally adopt an e-signature based system.

The firm has been low-paper since its inception, and has evaluated new paperless technologies once they have become available and been proven reliable.  Hosted servers, scan and shred policies, paperless invoicing, and other similar paper-free options have been adopted over the years.  Using e-signatures will further transform the way the company handles documents that need to be signed and move it one step closer to become a truly “paperless” law firm.

Jim Chester, CHESTER pllc’s CEO and founding principal, says, “The practice of law is constantly changing, and we are proud to be pioneers in that regard. We seek to offer 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. Adopting state-of-the-art technology maximizes the quality of service that we can provide to our clients and helps us cut costs, which translate into savings that are passed onto our clients.”

“Going paperless helps us reduce costs, space, and our environmental footprint, while creating a document control system that is reliable, searchable, and scalable” said the attorney.

In addition to its adoption of cutting-edge paper-reduction technologies, CHESTER pllc also utilizes cloud-based servers, hosted phone service, AppleTV based presentation screens that can beam wirelessly from Macbook Airs. Breaking from traditional law practices, CHESTER pllc keeps all client records in a digital format, which makes files easy to sort and search, and ultimately maximizes efficiency.

This step towards becoming a ‘paperless’ law firm reinforces the CHESTER pllc mantra of being ‘innovative legal counsel for innovative companies,” Chester adds.

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, contracts, ecommerce and dispute resolution.  Additional information about the firm and its attorneys may be found at www.chester-law.com.

Jun 03

US Cyber-Sting Catches Chinese National Attempting to Export Sensitive Technology

By Export

A Chinese citizen pleaded guilty last Thursday at the federal courthouse in Brooklyn to violating the International Emergency Economic Powers Act by attempting to export weapons-grade carbon fiber from the United States to China. The guilty plea follows an investigation by U.S. Immigration and Customs Enforcement’s (ICE) Homeland Security Investigations (HSI), the Defense Criminal Investigative Service and the U.S. Department of Commerce Office of Export Enforcement.

Lisong Ma, 34, was arrested after attempting to close a deal to acquire and export the specialized materials, which have applications in the defense and aerospace industries and are therefore controlled for export by the United States.

“The defendant tried to circumvent laws that protect our national security by preventing specialized technologies from falling into the wrong hands. The defendant was bent on exporting to China up to five tons of weapons-grade carbon fiber — enough carbon fiber to stretch from Brooklyn to the Pacific Ocean,” stated United States Attorney Loretta E. Lynch. “Today’s conviction should leave no doubt that the United States will use every available technique, including covert cyber operations, to maintain the superiority of our nation’s armed forces.”

During the investigation, federal agents tasked with protecting sensitive technology maintained a covert cyber-presence on web sites related to the brokering, purchase and sale of controlled commodities. In February 2013, the defendant, using the name “Ma Li,” e-mailed an undercover agent and indicated that he was interested in acquiring several different types of high-grade carbon fiber. Then, through various online communications, the defendant attempted to negotiate the purchase of five tons of carbon fiber. Based on a review of Internet Protocol log-in information, investigators discovered that the defendant was communicating from the People’s Republic of China.

On March 12, 2013, the defendant and undercover agents engaged in an online video teleconference session, which was recorded. During the teleconference, the defendant and the undercover agents discussed the license requirement to export certain types of carbon fiber from the United States. One of the agents told the defendant: “We can’t send this to China without an export license, otherwise we risk going to jail.” The defendant then told agents that he would soon be traveling to the United States, and arranged a meeting to further discuss the terms of a deal. On March 27, 2013, the defendant met with undercover agents in the United States. During the meeting, which was covertly recorded, the defendant requested a sample of carbon fiber, because it was “easier” and “safer” to ship, and later commented: “There is a greater chance that the authorities will arrest you if you get a third party involved. That is why it’s better to go directly from the U.S. to China.”

The defendant ultimately decided to ship a sample of weapons-grade, Toray-type T-800 carbon fiber from the United States to China. He paid the undercover agents and placed the material into a plain brown box. Ma falsely indicated on the waybill and invoice that the package contained “clothing.” After the defendant finished packing the box and completing the shipping forms, the package was transported to a courier service, to be shipped to China. The package was thereafter intercepted by agents before it could be exported. Agents also intercepted and arrested the defendant shortly thereafter, as he transited Los Angeles International Airport on his way to Shanghai. He was then removed in custody to Brooklyn.

When sentenced, Ma faces up to 20 years in prison, as well as forfeiture and a fine of up to $1 million.

SOURCE: ICE

Jun 03

$1 Million Counterfeit Merchandise Seized from Baton Rouge Store

By Customs IP Enforcement

U.S. Immigration and Customs Enforcement’s (ICE) Homeland Security Investigations (HSI), along with the Louisiana Attorney General’s Office, seized 3,082 counterfeit items with a manufacturer’s suggested retail price of more than $1 million from a Baton Rouge business last week. The seized items included counterfeit designer clothing and electronics.

HSI and the Attorney General’s office executed a search warrant at Fashion Express, located on Airline Highway, following an HSI investigation that included multiple undercover buys of counterfeit merchandise. HSI served at least two warning letters to the business regarding the illegal sale of counterfeit merchandise prior to the seizure operation.

“Criminals who sell counterfeit products are parasites on the legitimate businesses that drive our economy,” said Special Agent in Charge of HSI New Orleans Raymond R. Parmer Jr. “The profits of black-market counterfeit sales are routinely diverted to support further criminal activity such as drug trafficking, money laundering and even potential terrorism.” Parmer oversees a five-state area of responsibility including Louisiana, Alabama, Arkansas, Mississippi and Tennessee.

Some of the counterfeit trademarked items seized during the operation include Michael Kors, Nike, Louis Vuitton, Prada, Coach and Polo merchandise. While searching the premises, HSI special agents also discovered thousands of counterfeit name-brand tags and labels that indicate counterfeit merchandise was being assembled inside the store.

SOURCE: ICE
Jun 03

One of World’s Largest Digital Currency Companies Charged with Money Laundering

By Internet / eCommerce, Technology Transactions

U.S. attorney and representatives from several law enforcement agencies announced an indictment charging Liberty Reserve, one of the world’s largest digital currency companies, and seven of its principals and employees with money laundering and operating an unlicensed money transmitting business. The charges stem from an investigation by the Global Illicit Financial Team which consists of U.S. Immigration and Customs Enforcement’s (ICE) Homeland Security Investigations (HSI), the U.S. Secret Service and the Internal Revenue Service’s (IRS) Criminal Investigations Division.

Law enforcement officials arrested five defendants. Arthur Budovsky, 39, the principal and founder of Liberty Reserve, and Azzeddine El Amine, 46, a manager of Liberty Reserve’s financial account, were both arrested in Spain. Vladimir Kats, 41, the cofounder of Liberty Reserve, was arrested in Brooklyn. Mark Marmilev, 33, and Maxim Chukharev, 27, both who helped design and maintain Liberty Reserve’s technological infrastructure, were arrested in Brooklyn and Costa Rica, respectively.

The defendants are each charged with one count of conspiracy to commit money laundering, which carries a maximum term of 20 years in prison, one count of conspiracy to operate an unlicensed money transmitting business, which carries a maximum term of five years in prison, and operation of an unlicensed money transmitting business, which carries a maximum term of five years in prison.

Two other defendants, Ahmed Yassine Abdelghani (“Yassine”) and Allan Esteban Hidalgo Jimenez (“Hidalgo”) are at large in Costa Rica.

The defendants are accused of structuring Liberty Reserve as a criminal bank-payment processor, designed to help users conduct transactions anonymously and launder the proceeds of their crimes. Liberty Reserve is alleged to have had more than one million users worldwide, including more than 200,000 users in the United States, who conducted approximately 55 million transactions – virtually all of which were illegal. Law enforcement officials believe that more than $6 billion in suspected criminal proceeds have been laundered via Liberty Reserve because it provided an infrastructure that enabled cyber criminals around the world to conduct anonymous and untraceable financial transactions.

The defendants also protected the criminal infrastructure of Liberty Reserve by, among other things, lying to anti-money laundering authorities in Costa Rica and pretending to shut down the company after learning it was being investigated by U.S. law enforcement. They continued operating the business through a set of shell companies, moving millions of dollars through shell company accounts maintained in Cyprus, Russia, China, Hong Kong, Morocco, Spain, Australia and elsewhere.

In addition to the criminal charges brought in the indictment, law enforcement seized the Liberty Reserve domain name and the domain names of four exchanger websites that were controlled by one or more of the defendants. They also restrained or seized 45 bank accounts. Prosecutors filed a civil action against 35 exchanger websites seeking the forfeiture of the exchangers’ domain names because the websites were used to facilitate the Liberty Reserve money laundering conspiracy and constitute property involved in money laundering.

The U.S. Department of the Treasury and its Financial Crimes Enforcement Network also named Liberty Reserve as a financial institution of primary money laundering concern under Section 311 of the Patriot Act.

“The actions of the U.S. Secret Service, IRS and HSI in dismantling the Liberty Reserve operation are critical because transnational criminal organizations can succeed only so long as they can funnel their illicit proceeds freely and without detection,” said HSI New York Special Agent in Charge James T. Hayes Jr. “HSI is proud of its partnership through the Global Illicit Financial Team and will continue to aggressively target financial institutions that deliberately enable businesses and individuals to evade global financial systems in furtherance of criminal schemes.”

The investigation and takedown involved law enforcement action in 17 countries, including: Costa Rica, the Netherlands, Spain, Morocco, Sweden, Switzerland, Cyprus, Australia, China, Norway, Latvia, Luxembourg, the United Kingdom, Russia, Canada and the United States.

Several international law enforcement agencies also participated in the investigation, including: the Judicial Investigation Organization in Costa Rica, the National High Tech Crime Unit in the Netherlands, the Spanish National Police, the Swedish National Bureau of Investigation’s Financial and Economic Crime Unit and Cyber Crime Unit, and the Swiss Federal Prosecutor’s Office.

SOURCE: ICE

May 23

Legislation for Internet Sales Tax

By Internet / eCommerce

Congress is deciding on a bill that requires internet sellers with annual sales of $1 million or more of annual sales outside of their home states to collect all the states’ sales tax. The legislation passed the Senate earlier this month on a 69-27 vote, and the House will vote on it in the near future.

According to the Wall Street Journal, although the bill has not passed yet, Maryland and Virginia have both passed transportation bills that are counting on the extra revenue that would come in from internet sales. If more states follow their lead, this could be a way to force Congress to vote a certain way. If the legislation doesn’t pass, the wholesale gas price in Virginia could jump up over 2% in two years and Maryland drivers may have to pay an extra 7 cents per gallon in taxes in two years. The District of Columbia is considering the option of spending the $49 million it would collect from the tax on housing the homeless. The National Conference of State Legislatures estimates that states lost a collective $23 billion in uncollected taxes from online shopping that occurred in 2012.

Small business owners oppose the legislation, arguing that it is a huge burden to comply with the rules in so many different tax jurisdictions. The Senate legislation addresses this issue by requiring the states to adopt standards and exempting businesses with annual revenue that is less than $1 million.

 

May 17

CBP Intercepts Khapra Beetles at DFW Airport

By Import

U.S. Customs and Border Protection (CBP) agriculture specialists stationed at the Dallas/Fort Worth International Airport recently intercepted Khapra beetles in personal effects from passengers arriving from Sudan and India.

“CBP agriculture specialists remain vigilant in safeguarding our agriculture industry by preventing the introduction of invasive, harmful pests and plant diseases into the country,” said Houston CBP Director of Field Operations Judson W. Murdock II. “The introduction of harmful pests, such as this beetle, into the U.S. can have devastating effects on our agriculture production because it will demolish stored grains such as rice, wheat and oats.”

These are some of the intercepted Khapra beetles intercepted at DFW airport.

Khapra beetle is a serious pest of stored grain products in Africa, the Middle East, the Near East and pockets of Europe and eastern Asia. The U.S. Department of Agriculture considers the Khapra beetle one of the 100 worst invasive species worldwide. If the beetle is left undisturbed in stored grain it can cause significant grain loss, and in case of seeds, it may lead to significant reduction in seed viability. Once identified, the Khapra beetle may be killed through fumigation. The USDA will determine if fumigation is feasible. In many cases such as in these cases where Khapra beetle was found in passenger’s personal effects, the infested product is simply destroyed by incineration or steam sterilization.

The Khapra beetles were found in three separate passenger inspections arriving from countries known to host the beetle. Upon inspection of the passengers’ luggage, CBP agriculture specialists discovered the pests in containers of seeds and dried beans. The prohibited items were immediately safeguarded for further examination.

CBP agriculture specialists submitted sample specimens of the pests to a local U.S. Department of Agriculture entomologist for identification and learned May 8, that the pests were in fact Trogoderma granarium Everts, which is the scientific name for the Khapra beetle.

May 10

CBP Ensures Mother’s Day Bouquets Are Safe

By Import

With Mother’s Day celebrations this weekend, U.S. Customs and Border Protection officers and agriculture specialists working at U.S. ports of entry are busy making sure that flower imports are free from insects, pests and diseases that could harm the agricultural and floral industries of the United States.

“Travelers need to declare all items acquired in a foreign country to the CBP officer upon entry to the United States,” said San Diego Director of Field Operations for CBP, Pete Flores. “It is an important part of the CBP mission to identify and stop pests and diseases at the border before they can be spread elsewhere.”

Chrysanthemums, gladiolas, and orange jasmine from Mexico are prohibited through the passenger ports of entry. Travelers cannot bring arrangements with those flowers into the country through a passenger port of entry, like the San Ysidro border crossing.

With the current restrictions, CBP is trying to prevent funguses called “Chrysanthemum White Rust” and “Gladiolus Rust” from entering the U.S. Additionally, some cut greenery, which are the plants used to fill a bouquet, may have pests or diseases. For example, Murraya (common name “orange jasmine”) is a host for Asian citrus psyllid, a dangerous pest of citrus. If any portion of a bouquet has pests, the entire bouquet will be confiscated.

Roses, carnations, and most other flowers are allowed into the U.S. after they pass inspection. However, plants potted in soil cannot be brought from Mexico. Travelers must declare all flowers and plants to CBP officers.

If a traveler declares a bouquet with prohibited plants, it will be seized, but travelers can avoid possible penalties by ensuring that they declare the items. After a traveler declares a bouquet with no prohibited items, CBP agriculture specialists will inspect cut flowers and plants for any sign of insects, pests or diseases.

SOURCE: CBP

May 07

Sophilia Hsu Speaks at NEC Corporation of America’s International Trade Compliance Conference

By News

Sophilia Hsu, associate attorney in the Dallas-based global business & technology law firm of CHESTER pllc, recently presented on protecting intellectual property at the NEC Corporation of America’s International Trade Compliance Conference, which was held at NEC’s offices in Irving, Texas.

The title of the presentation was, “Protecting Intellectual Property in International Markets.” Hsu addressed the key elements of intellectual property asset protection. Participants and speakers of the conference came from across the county and the world. Other speakers at the event included Shin Takahashi, President and CEO of NEC Corporation of America; Gerry Kenney, Senior Vice President and General Counsel of NEC Corporation of America; and Mark Herlach, partner at Sutherland Asbill & Brennan LLP.

NEC Corporation of America was established in 2006 and combined operations of NEC America, NEC Solutions America and NEC USA. NEC Corporation of America is a leading technology provider of strategic IT and communications solutions. Serving carrier, small-to-medium business and large enterprise clients across multiple vertical industries, NEC Corporation of America provides its customers greater access to a rich portfolio of technology and professional services, enhanced opportunities and competitive solutions.

Of the event, Hsu reports, “The protection of intellectual property plays an integral role in the success of individual businesses and the U.S. economy. This is an important topic and I am glad that NEC Corporation of America is addressing this issue.”

About CHESTER pllc

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 www.chester-law.com.

May 07

India’s Supreme Court Decides to Provide Generic Drugs to the Poor Instead of Enforcing Patent

By Intellectual Property, International IP

Earlier last month, the Supreme Court in India ruled on whether or not Novartis, a pharmaceutical company, should be given a patent for Glivec, a cancer drug. The Court decided a patent should not be given because the formula in question was too similar to Novartis’ earlier version of the drug.

The India Patents Act prevents pharmaceutical companies from gaining a monopoly on patent protection on updated drugs that are not demonstrably more effective than previous versions.  India’s laws prevent patent holders from extending the duration of a patent by making small changes to existing patented formulas, a concept known as “evergreening.”

Chapter II of The Patents Act states: “3. What are not inventions? The following are not inventions within the meaning of this Act” and lists several items.

Section 3(d) states: “the mere discovery of a new form of a known substance which does not result in the enhancement of the known efficacy of that substance or the mere discovery of any new property or new use for a known substance or of the mere use of a known process, machine or apparatus unless such known process results in a new product or employs at least one new reactant.”

Novartis argued that the new drug is more effective than its predecessor because it is 30% easier for the body to absorb the drug. However, the Supreme Court of India decided that Novartis did not prove that the new drug provided the “enhanced efficacy” required.

As a result of the Court ruling, India’s generic drug manufacturers can continue to make generic version of Glivec. The impact for the sick in India is huge: a year’s supply of Novartis’ Glivec can cost about $70,000 while a year’s supply of a generic version costs around $2,500 a year. This ruling has no impact on the price of Glivec in the United States.

May 07

Customs Targets Illegally Imported Land Rover Defender Vehicles

By Import

U.S. Customs and Border Protection is on the lookout for illegal imports of Land Rover Defender vehicles that do not meet federal safety standards, including the standard that requires airbags. This year, CBP has identified dozens of illegal shipments at various ports of entry across the United States, including Baltimore, Charleston, S.C., Jacksonville, Fla., and Savannah, Ga.

Most recently on March 5, CBP officers at the port of Norfolk, working closely with the U.S. Department of Transportation’s National Highway Traffic Safety Administration, seized a shipment of two imported Land Rover Defender vehicles. CBP officers seized the shipment following the determination that the vehicle identification numbers on the vehicles were found to be fraudulently manipulated. The VINs were changed to make the vehicles appear older than they are to take advantage of an exemption that allows vehicles that are at least 25 years old to be imported without regard to whether they comply with federal motor vehicle safety standards. The shipment arriving from Great Britain had been targeted for examination by CBP’s Commercial Targeting and Analysis Center in Washington, D.C.

“Ensuring the safety of imported products is a top priority for CBP,” said Allen Gina, CBP’s assistant commissioner for international trade. “The concerted targeting efforts of CTAC and the vigilance of CBP officers and import specialists at our ports of entry will help ensure that unsafe vehicles from overseas markets do not reach our roadways.”

NHTSA regulates imported motor vehicles. Illegally imported vehicles can pose potential safety hazards to drivers and all road users.

“Safety is the Department of Transportation’s top priority,” said NHTSA Administrator David Strickland. “Those who illegally import Defenders and fraudulently offer the vehicles for sale are motivated by profit and do so at the expense of U.S. consumers and legitimate U.S. businesses that follow the law. We continue to work with our partners at CBP and the CTAC to prevent the importation of illegal vehicles and to inform consumers about the presence of and potential safety risks associated with these vehicles.”

Since October 2012, CBP has seized more than a dozen illegal Land Rover Defender vehicles for violating NHTSA and Environmental Protection Agency regulations, for a total value of approximately $250,000. The overseas value for this model of vehicle is approximately $25,000. However, the resale value in the U.S. can run as much as $150,000 per vehicle depending on its model year, condition, and because these vehicles cannot be lawfully imported into the U.S. unless they are at least 25 years old. A significant portion of those shipments arrived into the U.S. via sea cargo from Great Britain.

Prospective buyers of imported vehicles can confirm the validity of the vehicle by checking the VIN in a vehicle history report. Buyers who suspect a vehicle is being illegally imported are encouraged to report suspected trade violations. All information submitted to CBP is voluntary and confidential. To report a possible trade violation, please visit eAllegations. ( eAllegations )

The CTAC combines resources and staff from several government agencies, including NHTSA and EPA, to protect the American public from harm caused by unsafe imported products. For additional information on the CTAC and import safety, please visit CBP.gov/Trade, and click on the “Priority Trade Issues” tab.