Category

Customs IP Enforcement

Over $1.5 Million Seized from Online Sale of Counterfeit Sports Apparel manufactured in China

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

The Department of Justice seized more than $1.5 million in proceeds from the distribution of counterfeit sports apparel and jerseys, following an investigation into the sale of counterfeit goods on commercial websites conducted by the National Intellectual Property Rights Coordination Center (IPR Center), which is led by U.S. Immigration and Customs Enforcement’s (ICE) Homeland Security Investigations (HSI).

The developments are the latest result of Operation In Our Sites, a law enforcement initiative targeting online commercial intellectual property crime announced by HSI in June 2010. Operation In Our Sites targeted online retailers of a diverse array of counterfeit goods, including sports equipment, shoes, handbags, athletic apparel, sunglasses and DVD boxed sets. To date, 761 domain names of websites used in the sale and distribution of counterfeit goods and illegal copyrighted works have been seized as a result of Operation In Our Sites.

“ICE will continue to target those who traffic in counterfeit goods by attacking the financial profits of counterfeiting sites and shutting them down,” said ICE Director Morton. “Operation In Our Sites and the tireless work of the National Intellectual Property Rights Coordination Center protect consumers from fraud on the Internet and combat intellectual property theft which exacts a toll on our economy and industries.”

Last month, more than $896,000 in proceeds from the sale of counterfeit sports apparel on commercial websites was seized as part of Operation In Our Sites. According to court documents, investigation by federal law enforcement officers revealed that subjects whose domain names had been seized in a November 2010 In Our Sites operation continued to sell counterfeit goods using new domain names. In particular, the individuals, based in China, sold counterfeit professional and collegiate sports apparel, primarily counterfeit sports jerseys. Law enforcement officers made numerous undercover purchases from the websites associated with the new domain names. After the goods were confirmed to be counterfeit or infringing, seizure warrants for three domain names used to sell the infringing goods were obtained from a U.S. magistrate judge in U.S. District Court for the District of Columbia.

The individuals conducted sales and processed payments for the counterfeit goods using money service business accounts and then wired their proceeds to bank accounts held at a Chinese bank, the court documents state.

Pursuant to warrants issued by a U.S. district judge, law enforcement officers seized $1,455,438.72 in proceeds that had been transferred from the money service business accounts to various bank accounts in China. The funds were seized from correspondent, or interbank, accounts held by the Chinese bank in the United States. Pursuant to additional seizure warrants issued by a U.S. magistrate judge, law enforcement officers also seized $94,730.12 in funds remaining in six money service business accounts used by the subjects.

“The seizures … are another step forward in our efforts to disrupt and disable those engaged in intellectual property crime,” said Assistant Attorney General Lanny A. Breuer. “By seizing the domain names and profits of online counterfeit goods operations, we are protecting consumers and sending a message to criminals that we will use every tool at our disposal to stop them.”

“Within a matter of weeks, this law enforcement operation has seized more than $2.4 million in proceeds from individuals overseas who are preying on the American economy and consumers with their sales of counterfeit goods,” said U.S. Attorney Ronald C. Machen Jr., District of Columbia. “We will continue to work with our law enforcement partners to target these unscrupulous operators where it hurts them the most – at the bank.”

Over $47 million in Counterfeit Goods Seized at Flea Market

By Customs IP Enforcement, Import, Intellectual Property, International IP

A very productive enforcement action at the end of April at the Patapsco Flea Market in Baltimore conducted by special agents with U.S. Immigration and Customs Enforcement’s (ICE) Homeland Security Investigations (HSI) resulted in the agency’s largest counterfeit seizure at a flea market.

On Sunday, April 22, HSI special agents executed a federal search warrant at the Patapsco Flea Market at 1400 W. Patapsco Avenue in Baltimore as part of an ongoing criminal investigation. The enforcement operation was based on specific information developed during a two and a half year long investigation by HSI Baltimore involving violations of intellectual property rights law. Over the course of numerous days, HSI special agents, with assistance from law enforcement and industry partners, seized nearly 220,000 counterfeit items including clothing, shoes, jewelry, handbags, DVDs, CDs, perfume, make-up and other personal care items. If those items were legitimate, the total manufacturer’s suggested retail price would be approximately $47.3 million.

The HSI Baltimore investigation identified numerous vendors selling counterfeit goods with brand names such as M∙A∙C, Louis Vuitton, Gucci, Coach, Kate Spade, NFL, Nike, Dolce & Gabbana, Dooney & Bourke, Ralph Lauren Polo, Lacoste, North Face, Rocawear, Ed Hardy, Chanel, Tiffany, Timberland, Uggs, Sony, Apple, Coogi, Black Label, Under Armour and Affliction, among others. The multi-day operation also netted the seizure of approximately $1.5 million in suspected criminal proceeds.

“The illegal importation and sale of counterfeit goods is a significant problem that affects our economy, impacts American jobs and innovation, puts the public’s health and safety at risk and at times threatens our national security,” said William Winter, special agent in charge for HSI Baltimore. “Consumers should know that if they buy pirated and unlicensed products, they are hurting legitimate businesses and they may also be facilitating criminal activity.”

The following law enforcement and industry partners also participated in the operation: Maryland State Police, Baltimore Police Department, Under Armour, Estee Lauder, the Recording Industry Association of America (RIAA) and the Motion Picture Association of America (MPAA). Blazer Investigations, representing numerous trademarked brand names, was also on site assisting with the identification of counterfeit goods.

Nearly $1 Million Worth of Counterfeit Movies and Music Seized

By Customs IP Enforcement, Intellectual Property, International IP

Two Mexican nationals made their initial appearance in federal court this week on charges of trafficking in counterfeit goods after U.S. Immigration and Customs Enforcement’s (ICE) Homeland Security Investigations (HSI) agents executed a search warrant at a rural Fresno (California)-area home, seizing more than 70,000 pirated copies of music and movies.

Alberto Campos-Limon, 24, and Jose Jeronimo-Jimenez, 32, both of Fresno, were taken into custody by Fresno HSI agents. They are charged in a criminal complaint with conspiracy; copyright infringement; and trafficking in counterfeit labels. The illegal activities allegedly occurred between Feb. 28 and April 24. Each offense carries a maximum penalty of up to five years in prison.

A third suspect, Arnoldo Chavez-Mendoza, 50, a Mexican national who currently resides in Tulare, was arrested on state charges of copyright infringement after agents conducting the enforcement action observed him purchasing several hundred audio CDs from the two defendants.

The suspects were taken into custody at a rural Fresno-area residence where investigators discovered the bulk of the counterfeit music and movie disks. During a search of the home, investigators also found a variety of equipment commonly used to mass produce DVDs and CDs.

“Commercial piracy and product counterfeiting undermine the U.S. economy, rob Americans of jobs, stifle American innovation and promote other types of crime,” said Clark Settles, special agent in charge who oversees HSI Fresno. “Intellectual property theft amounts to economic sabotage, which is why HSI will continue to aggressively pursue product counterfeiters and those who sell counterfeit products.”

This enforcement action is the culmination of a probe that began in February. According to the criminal complaint in the case, during the ensuing investigation agents made multiple undercover purchases of counterfeit DVDS, including films such as “Safe House,” “In Time,” “Haywire” and “Red Tails.” Among the titles seized Tuesday at the residence were numerous first run movies, including “Hunger Games” and “American Reunion.” All told, agents have seized more than 70,000 counterfeit DVDs and CDs in connection with the investigation. Authorities estimate the retail value of those disks at more than $900,000.

HSI received substantial assistance with the investigation from the Fresno County Sheriff’s Office, the Motion Picture Association of America and the Recording Industry Association of America (RIAA).

“The United States government has made intellectual property protection a priority,” said Dallas international trade and intellectual property attorney Jim Chester.  “It seems as if every week we see a new seizure of counterfeiting imports.  These efforts are helpful and worthwhile, but U.S. officials and law enforcement can only do so much.  Seizure of trademark and copyright infringing imports will hardly make a dent in the global piracy of intellecual property rights.”

SOURCE:  DHS

ICE Seizes $4 Million Worth of Counterfeit Athletic Apparel

By Customs IP Enforcement, Intellectual Property, International IP

A massive cache of counterfeit athletic apparel was recently found in a Sacramento, California warehouse.

Agents with U.S. Immigration and Customs Enforcement’s (ICE) Homeland Security Investigations (HSI) are currently working to inventory the contents of a warehouse on the city’s southeast side that yielded one of the largest single seizures of counterfeit apparel ever made in the area.

HSI agents executed a search warrant at the building on Berry Avenue Tuesday morning as part of a long-term investigation. Inside, investigators found multiple rows of shelving 40 feet high and more than 400 feet long stacked with apparel. Some of the merchandise was packed in boxes, other items were individually wrapped in plastic.

Agents still do not have a final count on the total number of items, but they say it will run into the tens of thousands. The bulk of the clothing was athletic apparel bearing a counterfeit Adidas trademark, including sports jerseys, shorts and shoes. In addition to the apparel, agents also discovered an array of counterfeit sports memorabilia, such as commemorative clocks and soccer balls.

“Commercial piracy and product counterfeiting undermine the U.S. economy, rob Americans of jobs, stifle American innovation and promote other types of crime,” said Dan Lane, assistant special agent in charge for HSI Sacramento. “Intellectual property theft amounts to economic sabotage, which is why HSI will continue to aggressively pursue product counterfeiters and those who sell counterfeit products.”

An investigative consultant who works with Adidas on issues involving intellectual property violations estimates if the seized merchandise had been genuine it would have retailed for more than $4 million.

HSI officials advise the probe is ongoing and no arrests have yet been made. HSI is receiving substantial assistance with the investigation from U.S. Customs and Border Protection (CBP), including CBP personnel with specialized expertise in identifying counterfeit merchandise who were on site for the execution of Tuesday’s search warrant. The Sacramento Police Department also provided support for the enforcement action.

It is believed the seized merchandise was destined for distribution to retail outlets throughout the United States. Once the items are inventoried, they will be transported to a secure facility for storage while the case is ongoing.

Crime of the Century? Software Pirates Steal $100 Million in Revenue from US Companies

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

Two Chinese nationals have been charged in a 46-count superseding indictment for a variety of charges including software piracy and illegally exporting technology to China. Additionally, a Maryland man, and former NASA employee, has pleaded guilty to charges of criminal copyright infringement. Both investigations are being conducted by U.S. Immigration and Customs Enforcement’s (ICE) Homeland Security Investigations (HSI).

Xiang Li, 35, and Chun Yan Li, 33, of Chengdu, China, have been charged by a federal grand jury. Xiang Li was arrested by HSI agents June 7, 2011, in Saipan, Northern Mariana Islands. Chun Yan Li remains an at large fugitive in Chengdu.

“Counterfeiting and intellectual property theft are seriously undermining U.S. business and innovation — more than $100 million in lost revenue in this one case alone,” said ICE Director John Morton. “Homeland Security Investigations is committed to protecting American industry and U.S. jobs from people like Xiang Li, the leader of this criminal organization who believed he could commit these crimes without being held accountable for his actions. Li thought he was safe from the long arm of U.S. law enforcement, hiding half way around the world in cyberspace anonymity. He was sorely mistaken. Whether in China or cyberspace, this arrest is proof that HSI and our partners at the National Intellectual Property Rights Coordination Center are committed to identifying, infiltrating and disrupting these criminal enterprises wherever they exist.”

“These cases demonstrate our vulnerability to foreign acquisition of American technology,” said U.S. Attorney Charles M. Oberly III, District of Delaware. “I applaud our law enforcement partners for their exceptional dedication in pursuing this major investigation.”

The indictment charges that Xiang Li and Chun Yan Li engaged in a course of criminal conduct relating to the unauthorized access to, reproduction and distribution of copyrighted software between April 2008 and June 2011. This copyrighted software stolen by Xiang Li and Chun Yan Li was produced by more than 150 manufacturers, mostly American.

The charges arise out of the defendants’ operation of a website called Crack 99 that sold pirated copies of software in which the access control mechanisms had been “cracked” or circumvented. An international investigation was initiated by HSI after discovering the Crack 99 website, which advertised the sale of pirated software.

During the course of the conspiracy, more than 150 manufactures lost retail value of the pirated software in excess of $100 million.

In particular, the indictment charges that Xiang Li, Chun Yan Li and others conspired and engaged in software cracking. This is considered the willful circumvention of digital license files and access control software created to prevent unauthorized access to copyrighted software products.

Xiang Li, Chun Yan Li and others also conspired and engaged in the unauthorized international distribution and reproduction of cracked copyrighted computer software over the Internet.

Commercial software is often designed with security features embedded in the software code for the purpose of preventing the unauthorized access or reproduction of the software. Software in which the access controls have been circumvented — and is sold without authorization of the copyright owner — is considered pirated software. The superseding indictment charges that Xiang Li unlawfully distributed this pirated software over the Internet by selling the copyrighted material on the websites: crack99.com, cad100.net and dongle-crack-download.com.

These websites advertised over 2,000 different cracked software products for sale at a fraction of their retail prices. The advertised pirated software, most of which was created and copyrighted by companies based in the United States, is used in numerous applications including: engineering, manufacturing, space exploration, aerospace simulation and design, mathematics, storm water management, explosive simulation and manufacturing plant design. The prices listed for the pirated software on the websites range from $20 to $1,200. The actual retail value of these products ranges from several hundred dollars to over one million dollars.

The indictment charges that between April 2008 and June 2011, Xiang Li distributed over 500 pirated copyrighted works to at least 325 purchasers located in Delaware, at least 27 other states and over 60 foreign countries. More than one-third of these purchases were made by individuals within the United States.

Xiang Li faces up to 20 years in federal prison and an extensive fine — a $500,000 fine or twice the loss from this case — per charge

Former NASA employee pleads guilty

Cosburn Wedderburn, 38, of Windsor Mill, Md., a former NASA employee, has pleaded guilty to conspiracy to commit criminal copyright infringement. This case was investigated by HSI with the assistance of the NASA Office of Inspector General.

According to court documents, Wedderburn was a customer of Xiang Li. He purchased over $1 million of cracked stolen software.

Wedderburn faces up to five years in federal prison and an extensive fine — a $250,000 fine or twice the loss from this case.

SOURCE:  DHS

I.C.E. Seizes more than $896,000 in proceeds from the online sale of counterfeit sports apparel manufactured in China

By Customs IP Enforcement, Import, Intellectual Property, International IP, Internet / eCommerce, Technology Transactions

The U.S. Immigration and Customs Enforcement (ICE)-led National Intellectual Property Rights Coordination Center (IPR Center) and the Department of Justice recently seized more than $896,000 in proceeds from the distribution of counterfeit sports apparel as the result of an investigation into the sale of counterfeit goods on commercial websites. The investigation also resulted in the seizure of seven domain names engaged in the sale of counterfeit goods. The funds were seized from interbank accounts and three PayPal accounts.

The investigation by ICE’s Homeland Security Investigations (HSI) is a result of Operation In Our Sites, which targets online commercial intellectual property crime, and began in June 2010. Operation In Our Sites targets online retailers for a diverse array of counterfeit goods, including sports equipment, shoes, handbags, athletic apparel, sunglasses and DVD boxed sets. To date, 758 domain names of websites engaged in the sale and distribution of counterfeit goods and illegal copyrighted works have been seized as a result of Operation In Our Sites.

“Counterfeiting and intellectual property theft are seriously undermining U.S. business and innovation,” said ICE Director John Morton. “Consumers are at risk, American industry is harmed and U.S. jobs are lost. As a country, we can ill afford the toll that intellectual property theft exacts on our economy and industries. Operation In Our Sites and the related efforts of the National Intellectual Property Rights Coordination Center are critical to combating intellectual property crime and consumer fraud over the Internet.”

According to court documents, investigation by federal law enforcement officers revealed that several subjects whose domain names had been seized in November 2010 through Operation In Our Sites continued to sell counterfeit goods using new domain names. In particular, the individuals, based in China, sold counterfeit professional and collegiate sports apparel, primarily counterfeit sports jerseys. Law enforcement officers made numerous undercover purchases from the websites associated with the new domain names. After the goods were confirmed to be counterfeit or infringing, seizure warrants for seven domain names used to sell the goods were obtained from a U.S. magistrate judge in U.S. District Court for the District of Columbia.

The individuals conducted sales and processed payments for the counterfeit goods using PayPal accounts and then wired their proceeds to bank accounts held at Chinese banks. Pursuant to warrants issued by a U.S. district judge, law enforcement officers seized $826,883 in proceeds that had been transferred from PayPal accounts to various bank accounts in China. The funds were seized from correspondent, or interbank, accounts held by the Chinese banks in the United States. Pursuant to additional seizure warrants issued by a U.S. magistrate judge, law enforcement officers also seized $69,504 in funds remaining in three PayPal accounts used by the subjects.

“We are working hard to protect American businesses and consumers from the damaging effects of intellectual property crime,” said Assistant Attorney General Lanny A. Breuer. “This investigation disrupted an online counterfeit goods operation, and also struck at the heart of the criminal enterprise by seizing hundreds of thousands of dollars in illegal profits. The Justice Department, together with our partners at ICE, will continue to do all that we can to punish and deter the sale and distribution of counterfeit goods.”

“Those who traffic in counterfeit goods harm the American economy as well as the consumers who purchase the substandard merchandise,” said U.S. Attorney Ronald C. Machen Jr., District of Columbia. “Seizing the domain names of these unscrupulous operators was one big step, and seizing their ill-gotten proceeds should send them another message that these counterfeit sales will not be tolerated.”

The investigation was conducted by the IPR Center and HSI. The case is being prosecuted by Assistant U.S. Attorneys Jonathan Hooks and Diane Lucas, and Special Assistant U.S. Attorney Katharine Wagner of the District of Columbia; Senior Trial Attorney Pamela Hicks of the Asset Forfeiture and Money Laundering Section in the Justice Department’s Criminal Division; and Trial Attorney Thomas Dougherty of the Computer Crime and Intellectual Property Section in the Justice Department’s Criminal Division.

As the largest investigative arm of the Department of Homeland Security, HSI plays a leading role in targeting criminal organizations responsible for producing, smuggling and distributing counterfeit products. HSI focuses not only on keeping counterfeit products off our streets, but also on dismantling the criminal organizations behind such illicit activity.

HSI manages the IPR Center in Washington. The IPR Center is one of the U.S. government’s key weapons in the fight against criminal counterfeiting and piracy. As a task force, the IPR Center uses the expertise of its 20 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 www.IPRCenter.gov.

SOURCE:  DHS

Importer of Pirated Software Gets “Clicked” . . . into Handcuffs

By Customs IP Enforcement, Import, International IP, Internet / eCommerce

A California, man was recently arrested by U.S. Immigration and Customs Enforcement’s (ICE) Homeland Security Investigations (HSI) special agents for importing more than 1,000 counterfeit Microsoft Office CD-ROMs and selling them to unsuspecting customers over the Internet.

Collier Bennett Harper, 30, was taken into custody late Friday (April 6). He is charged in a four-count federal indictment following the seizure of two shipments of Microsoft Office Professional Edition 2007 software CD-ROMs. Specifically, the indictment charges Harper with two counts of trafficking counterfeit goods and two counts of smuggling. If convicted of all charges, Harper faces a maximum sentence of 60 years in federal prison. The case is being prosecuted by the U.S. Attorney’s Office for the Central District of California.

“With the advent of the Internet, counterfeiting now threatens nearly every consumer in the nation and it also harms the valuable intellectual property of our manufacturers,” said U.S. Attorney André Birotte Jr., Central District of California. “That is why we are working with our partners at HSI to crack down on the illegal sales and distribution of counterfeit products like the software packages seized in this case.”

HSI’s investigation revealed that, as part of the alleged scheme, Harper would contact reputable dealers on eBay and hire them to sell the counterfeit software. According to investigators, the defendant allegedly instructed the sellers how to list the software, describing the product as “new” and authentic. The sellers would provide Harper with the payment and the customers’ addresses, and the defendant would ship the counterfeit software to the unsuspecting buyers. Based on evidence gathered during the probe, investigators believe nearly 1,000 counterfeit software packages were sold.

“The sale of counterfeit goods is not a victimless crime,” said Claude Arnold, special agent in charge for HSI Los Angeles. “These activities undermine our economy, rob Americans of jobs, stifle American innovation and promote crime. Intellectual property theft amounts to economic sabotage, which is why HSI will continue to aggressively pursue product counterfeiters and those who sell counterfeit products.”

Investigators estimate, based upon the manufacturer’s suggested retail price, the seized software would have retailed for approximately $150,000 had it been genuine.

 

SOURCE: DHS / ICE

Stop Infringing Imports at the United States Border

By Customs IP Enforcement, Import, Intellectual Property, International IP, White Papers

Trademark and copyright piracy (i.e., the production and sale of counterfeit merchandise) is a multi-billion dollar global industry. According to US government reports, pirated and counterfeit products cost US companies up to $250 billion annually and are directly responsible for the loss of 750,000 US jobs.  US law provides a number of remedies to owners of intellectual property (IP) such as trademarks, copyrights, trade names and patents.

 

Trade & Innovation Law Blog Archive Thru March 1, 2012

By Blog, Customs IP Enforcement, Export, FCPA, Import, Intellectual Property, International Business, International IP, ITAR No Comments

T&I Blog

ZONE DEFENSE: Counterfeit NBA Gear Seized

By TechTradeAttorney posted in Intellectual Property on Saturday, March 3, 2012

I.C.E. Agents confiscate thousands of counterfeit goods at NBA All-Star Weekend

More than 2,500 counterfeit items were confiscated as the result of a joint operation by U.S. Immigration and Customs Enforcement’s (ICE) Homeland Security Investigations (HSI), the Orlando Police Department and the Orange County Sheriff’s Office during the 2012 NBA All-Star Weekend in Orlando.

“Counterfeiters prey on sports fans at events like the NBA All-Star Game,” said Susan McCormick, special agent in charge of HSI Tampa. “I urge buyers to beware. Counterfeiting is not a harmless crime. Counterfeiting costs U.S. businesses more than $200 billion each year and accounts for the loss of more than 750,000 American jobs.”

During the days leading up to the NBA All-Star Game, HSI special agents operated in teams throughout the Orlando area, targeting suspicious activity that might lead them to counterfeiters. HSI special agents seized counterfeit items including t-shirts, caps and jerseys. The items are valued at more than $69,000. Ten individuals were arrested for possessing or offering to sell counterfeit NBA merchandise in violation of Florida state law.

“The NBA is committed year-round to protecting both our fans and legitimate, tax-paying retailers from being victimized by counterfeiters seeking to profit illegally from the public’s enthusiasm for the NBA,” said Ayala Deutsch, senior vice president and chief intellectual property counsel for the NBA. “We greatly appreciate the tireless efforts of HSI, the Orlando Police Department and the Orange County Sheriff’s Office throughout All-Star Weekend and are pleased to have their support in working to address this important issue.”

SOURCE: I.C.E.

Tags: Jim Chester, all-star, attorney, austin, bis, business, chester-law, commerce, copyright, counterfeit goods, customs, dallas, department, export, game, gear, houston, import, infringe, international, international trade, law, lawyer, nba, penalty, seize, seizure, state, texas, trad, trade law, trademark, violation

Comments: Leave a comment

 

SWEET SMELL OF SUCCESS – CBP Seizes $51 Million in Knock-off Perfume in 2011

By TechTradeAttorney on Wednesday, February 29, 2012

U.S. Customs and Border Protection (CBP) seized imports of counterfeit perfume valued at nearly $51 million during fiscal year 2011.

Counterfeit perfumes are a form of theft from the brand owner, and protecting American intellectual property is a priority for CBP. In addition to the economic harm, counterfeit perfumes are also often contaminated with unknown chemicals that can cause serious injury.

The fake perfume that CBP most frequently intercepted was labeled “Sex in the City” perfume, which is related to the highly popular HBO movie and television series. CBP has been working with the right holder to crack down on these illegal imports.

In fiscal year 2011, CBP’s Intellectual Property Rights (IPR) National Targeting and Analysis Group (NTAG) in Los Angeles targeted 138 commercial shipments of perfumes for possible trademark infringement. These shipments were examined and 52 were seized for infringing a trademark, including the “Sex and the City” trademark. The domestic value of the seized shipments, which contained more than one million pieces, was nearly $8 million. If the trademark had been genuine, the manufacturer’s suggested retail price of the perfume would have been more than $45 million.

The IPR-NTAG provides a national strategic perspective on trade through risk analysis and multi-disciplined trade strategies; develops and applies risk management techniques to support trade security and trade compliance; supports national trade strategies and field enforcement operations; and monitors the effectiveness of trade criteria and the targeting process.

In the past year, the IPR-NTAG uncovered more than 30 entities involved in the importation of counterfeit perfume,

U.S. ports of entry and the IPR-NTAG continue to target for counterfeit perfumes and to work with Immigration and Customs Enforcement investigators to assist in enforcement actions and develop criminal cases. CBP also works closely with right holders in intellectual property rights enforcement.

In fiscal year 2011, 24,792 seizures of counterfeit and pirated goods with a total domestic value of $178.9 million and a manufacturer’s suggested retail price of $1.1 billion were intercepted before entering the United States.

Tags: Jim Chester, attorney, austin, bis, business, chester-law, commerce, copyright, counterfeit goods, customs, dallas, department, export, houston, import, infringe, international, international trade, law, lawyer, penalty, seize, seizure, state, texas, trad, trade law, trademark, violation

Comments: Leave a comment

 

Wonder if they have WiFi in Federal Prison

By TechTradeAttorney posted in Intellectual Property on Wednesday, February 29, 2012

A North Texas man was sentenced on Tuesday to nearly five years in federal prison, and ordered to pay $402,417 in restitution, following his June 2011 guilty plea on copyright infringement, announced U.S. Attorney Sarah R. Saldaña of the Northern District of Texas.

U.S. District Judge Reed C. O’Connor sentenced James Clayton Baxter, 28, of Wichita Falls, Texas, to 57 months in prison. Baxter must surrender to the Bureau of Prisons by March 29.

According to documents filed in the case, from June 8, 2006 through April 9, 2007, Baxter infringed upon the copyrighted works of Adobe Systems Inc. by reproducing copies of its computer software for his financial gain. The investigation into Baxter’s activities began in May 2007 when U.S. Immigration and Customs Enforcement’s (ICE) Homeland Security Investigations (HSI) was notified by investigators working for Adobe that they had purchased infringing computer software from TechKappa.com, a website that sold copies of software titles via download from the Internet. The investigation led investigators to Baxter’s residence on Lou Lane in Wichita Falls.

Also in 2007, the FBI received a separate lead from the Wichita Falls Police Department (WFPD) regarding Baxter’s involvement in selling pirated software. WFPD encountered Baxter selling infringing software in 2004 while investigating him for credit card abuse; he was warned that he could not sell pirated software on his websites. WFPD executed a search warrant at Baxter’s residence in October 2007, and seized computers and external storage media.

The investigation revealed that Baxter owned and operated various websites, including Amerisoftware.com, Costfriendlysoftware.net, TechKappa.com, Ultrabackup.net, Superbuysoftware.net and Go-E-Soft.com. These sites, which he advertised online, offered “backup” copies of software, owned by Adobe, Microsoft and Autodesk Inc., for sale at about one-fifth of the manufacturer’s retail value. Baxter also provided counterfeit product registration codes (serial numbers) that were distributed with the software so that the customer could install the software.

Between June 8, 2006, through April 9, 2007, Baxter caused more than 90 infringed copies of copyrighted software to be reproduced and distributed, for which he received more than $66,000. These included copies of the following copyrighted computer software: Adobe’s Photoshop CS2, Adobe Illustrator CS2 and Adobe Photoshop 7.

Baxter admits that he knew the “backup” copies of Adobe software were illegal reproductions and that he willfully infringed on their works for his personal financial gain. Baxter and the government agree that the government can prove an actual loss of between $400,000 and $1 million.

Between 2004 and 2007, Baxter established at least 17 assumed business names with accompanying merchant bank accounts to process credit card payments for software orders. For example, during the brief time period between Aug. 7 and Aug. 18, 2006, Baxter received $18,036 in his PayPal account. Records further show that these merchant bank accounts processed 3,089 approved software orders that totaled $384,380.

The conviction and sentencing of James Clayton Baxter is the latest in a series of investigations initiated by the National IPR Coordination Center involving defendants from Wichita Falls, Texas. Six other men have also been convicted of operating websites used to sell pirated Adobe software:

Thomas C. Rushing III, William Lance Partridge and Brian C. Rue all pleaded guilty to criminal copyright infringement in U.S. District Court in Austin, Texas, on Aug. 22, 2008.
Timothy K. Dunaway pleaded guilty to criminal copyright infringement in U.S. District Court in Wichita Falls, Texas, on Oct. 20, 2008.
Robert and Todd Cook pleaded guilty to criminal copyright infringement in Alexandria, Va., on March 11, 2010.
Sentences for the seven defendants ranged from 12 months and a day to 57 months imprisonment with restitution totaling more than $2 million ordered to be paid to Adobe Systems Inc., a U.S. corporation based in San Jose, Calif. Combined, the counterfeit Adobe software sold by these individuals had a retail value of more than $15 million.

Tags: Jim Chester, attorney, austin, bis, business, chester-law, commerce, copyright, counterfeit goods, customs, dallas, department, export, houston, import, infringe, international, international trade, law, lawyer, penalty, seize, seizure, sentence, state, texas, trade law, trademark, violation

Comments: Leave a comment

 

BLOWOUT – CBP Seizes $2.5mill worth of unsafe Hair Dryers

By TechTradeAttorney posted in Trade & Technology Law on Tuesday, February 28, 2012

U.S. Customs and Border Protection (CBP) seized thousands of hair dryers recently that were determined to constitute a “substantial product hazard” under U.S. law for failing to have adequate immersion protection. The potentially dangerous hair dryers were identified through a nationwide targeting operation by the CBP Import Safety Commercial Targeting and Analysis Center (CTAC). CBP Stops Thousands of Unsafe Hair Dryers

 click for hi-res
Hair dryer seized by CBP

 

 

As a result of the targeting operation, CBP officers in the port of Los Angeles seized an entire shipment of 9,768 hair dryers that lacked shock protection for consumers. Lack of proper shock protection could lead to an electrocution if contact is made with a water source. The port of Miami had a notable seizure of 3,614 hair dryers that also lacked proper shock protection for consumers. These two shipments, containing a total of 13,382 hair dryers, had an estimated domestic value of approximately $229,998 with a manufacturer’s suggested retail price of $2,506,517.

“Ensuring the safety of imported merchandise 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 at our ports of entry will help ensure that products like hair dryers are safe for consumers and that substandard product from overseas does not reach store shelves.”

Hair dryers seized by CBP

 

 

The joint targeting operation with the U.S. Consumer Product Safety Commission (CPSC) concentrated on identifying and stopping the importation of unsafe hair dryers intended for consumer use. CPSC reports that since adoption of industry voluntary standards for immersion protection in its regulations, there has been a significant decline in electrocutions or electrical shock incidents.

“This is another example of how U.S. consumers benefit from the close collaboration between CPSC investigators and CBP officers at some of the largest U.S. ports of entry,” said Carol Cave, CPSC’s Director of the Office of Import Surveillance. “Using data provided by CBP, CPSC is able to target and interdict dangerous and violative consumer goods before they enter the stream of commerce.”

To ensure the safety of imported electrical products, CPSC is working closely with CBP to identify potentially unsafe shipments for CBP to check at ports of entry. CPSC has established permanent staffing at the CTAC in Washington, DC, and is working with CBP at ports to stop unsafe imports from entering the commerce of the U.S.

The CTAC combines resources and personnel from various government agencies to protect the American public from harm caused by unsafe imported products. The center accomplishes this through better communication, information-sharing, and by reducing redundant inspection activities.

Tags: Jim Chester, attorney, austin, bis, business, chester-law, commerce, copyright, counterfeit goods, customs, dallas, department, electronic, export, houston, import, infringe, international, international trade, law, lawyer, penalty, safety, seize, seizure, sentence, state, texas, violation

Comments: Leave a comment

 

 

Funny – I thought “ROLEX” only had one “L” in the Name. . . .

By TechTradeAttorney on Monday, February 27, 2012

Top Story: HSI special agents seize $825,570 worth of counterfeit goods

You never know what you’ll find at a flea market – antiques, toys or even a deal of a lifetime. But special agents with U.S. Immigration and Customs Enforcement’s (ICE) Homeland Security Investigations (HSI) warn that those deals of a lifetime may be too good to be true.

Across the country, flea markets have become notorious hot spots for selling counterfeit goods. That was the case Feb. 13, when HSI special agents identified vendors peddling counterfeit purses, shoes and jewelry items at a flea market just outside Tampa, Fla.

“We had received tips that individuals were fraudulently selling trademarked items here,” said Sue McCormick, special agent in charge of HSI Tampa.

That day, special agents seized more than 6,200 items with a manufacturer’s suggested retail price of $825,570. The items falsely exhibited trademarks of Hello Kitty, Gucci, Rolex, Coach, Louis Vuitton, Nike and Perry Ellis.

“A good rule of thumb is for buyers to beware. When you purchase these items you’re not getting a quality product from the trademark-holder. You’re getting a substandard one,” said McCormick. “You’re also contributing to the loss of American jobs.”

This seizure follows on the heels of an operation that took place earlier this month. On Feb. 1, HSI Tampa special agents seized nearly $1.2 million worth of fake designer purses, perfume, scarves and sunglasses from an individual already awaiting sentencing for trafficking in counterfeit goods.

ICE is the lead agency investigating intellectual property theft. The International Anti-Counterfeiting Coalition estimates that counterfeiting costs U.S. businesses between $200 and $500 billion each year and more than 750,000 American jobs.

Learn more about intellectual property theft at www.iprcenter.gov.

Tags: Jim Chester, attorney, austin, bis, business, chester-law, commerce, copyright, counterfeit goods, customs, dallas, department, export, houston, import, infringe, international, international trade, law, lawyer, penalty, seize, seizure, sentence, state, texas, trade law, trademark, violation

Comments: Leave a comment

 

IP Infringement Can Kill – The Threat to Our Soldiers

By TechTradeAttorney posted in Intellectual Property on Thursday, February 16, 2012

California business owner sentenced for conspiring to sell counterfeit microelectronics to the US military

A business owner from Newport Coast, Calif., was sentenced yesterday to 30 months in prison for conspiring to sell counterfeit integrated circuits to the U.S. military, defense contractors and others.

The case was investigated by U.S. Immigration and Customs Enforcement’s Homeland Security Investigations and the Naval Criminal Investigative Service.

Mustafa Abdul Aljaff, 32, pleaded guilty in January 2010 to federal charges of conspiracy to traffic in counterfeit goods and defraud the United States, and trafficking in counterfeit goods.

Upon completion of his prison term, Aljaff will be placed on three years of supervised release and be required to perform 250 hours of community service.

“Counterfeit electrical components destined for use by our military service members put those troops, and our national security, at great risk,” said John P. Torres, special agent in charge, HSI Washington. “That is why HSI will continue to prioritize the investigation of companies and individuals who attempt to engage in this type of criminal act.”

As part of the plea agreement, Aljaff agreed to forfeit industrial machinery which is designed to be used in the examination, testing, packaging, de-marking and marking of integrated circuits; computers and computer network servers; and his integrated circuit inventory. These items were seized from his business in connection with the execution of a search warrant on Oct. 8, 2009.

Aljaff also must pay $177,862 in restitution to the semiconductor companies whose trademarks were infringed as a result of his criminal conduct.

Co-defendant Neil Felahy, 34, the operations manager for Aljaff’s company and his brother-in-law, is awaiting sentencing on Feb. 22 after pleading guilty to charges in the case.

“Today’s prison sentence sends a message to the unscrupulous counterfeiters who put us all at risk by selling phony integrated circuits that end up in our military systems, medical devices and consumer products,” said U.S. Attorney Ronald C. Machen, Jr., for the District of Columbia. “We will continue to prosecute, convict and seek prison sentences for the criminals who threaten our health, safety and national security with their greed.”

“Counterfeit parts pose a grave threat to both the operational readiness and safety of our military forces,” said John F. Wagner, special agent in charge of the Washington, D.C. office of NCIS. “These prosecution results embody the effectiveness of interagency law enforcement cooperation.”

Aljaff pleaded guilty soon after his arrest and cooperated with authorities as the investigation continued. He owned MVP Micro and a host of other companies operating from the same location in Irvine, Calif. According to the government’s evidence, he was the mastermind and leader of the highly sophisticated fraud scheme to import, sell, manufacture and distribute, in interstate and international commerce, counterfeit integrated circuits. The conspiracy took place between September 2007 and August 2009.

An integrated circuit is a high-tech device, incorporated into a computer board, which acts as a switch. Integrated circuits control the flow of electricity in the goods or systems into which they are incorporated. They are used in a variety of applications, including industrial, consumer electronics, transportation, infrastructure, medical devices and systems, spacecraft, and military.

Counterfeit integrated circuits can result in product or system failure or malfunction, and can lead to costly system repairs, property damage and serious bodily injury, including death. They also raise national security concerns because their history is unknown, including who has handled them and what has been done to them. In addition, the devices can be altered and certain devices can be preprogrammed. Counterfeits can contain malicious code or hidden “back doors” enabling systems disablement, communications interception and computer network intrusion.

Markings on integrated circuits indicate a part is “commercial-grade,””industrial-grade,” or “military-grade.” Military-grade markings signify that the part has been specially tested to withstand extreme temperature ranges and high rates of vibration.

According to the government’s evidence, Aljaff and others sold the counterfeit devices, which included military-grade parts, through a cleverly designed web of corporations to unsuspecting customers in the United States and abroad. MVP and related companies sold and distributed counterfeit integrated circuits to approximately 420 buyers in the United States and abroad, including the U.S. Department of the Navy, defense contractors, other broker/distributors and numerous industry sectors, including transportation, medical services and aerospace.

During his guilty plea, Aljaff agreed that on more than 20 separate occasions, he and others imported into the United States from China and Hong Kong, approximately 13,073 integrated circuits bearing counterfeit trademarks, including military-grade markings, valued at about $140,835. Those counterfeit integrated circuits bore the purported trademarks of a number of legitimate semiconductor manufacturers.

One of the two counts to which Aljaff pleaded guilty involved a counterfeit, military-grade integrated circuit that he had purchased from a Florida-based company, Vision Tech Components, LLC. The owner of Vision Tech, Shannon Wren, was indicted in the U.S. District Court for the District of Columbia on conspiracy and other charges related to the firm’s own sales of counterfeit integrated circuits. Also indicted in that case was Stephanie McCloskey, Vision Tech’s administrative manager. Wren died pending trial. McCloskey pled guilty in November 2010 to charges of conspiracy to traffic in counterfeit goods and to commit mail fraud and was sentenced in October 2011 to a prison term of 38 months.

SOURCE:  ICE / CBP

Tags: Jim Chester, attorney, austin, bis, business, chester-law, commerce, copyright, counterfeit goods, customs, dallas, department, export, houston, import, infringe, international, international trade, law, lawyer, penalty, seize, seizure, sentence, state, texas, trade law, trademark, violation

Comments: Leave a comment

 

Remember to Check the “Bad Guy” Lists – or Find Yourself on Them

By TechTradeAttorney on Friday, February 10, 2012

A former manager of a Netherlands-based freight-forwarding company pleaded guilty for conspiring to defraud the United States by facilitating the illegal export of goods to Iran, New Jersey U.S. Attorney Paul J. Fishman announced.

Ulrich Davis, 50, a Dutch citizen of Pumerend, The Netherlands, pleaded guilty to an Information charging him with conspiracy to defraud the United States through the violation of a U.S. Department of Commerce Temporary Denial Order (“TDO”). Davis entered his guilty plea before U.S. District Judge Claire C. Cecchi in Newark federal court.

According to the Information to which Davis pleaded guilty, other documents filed in this case and statements made in court:

Davis was the sales and business development manager for a company described in the Information as the “Netherlands Freight Forwarding Company” in 2007 and 2008. The Netherlands Freight Forwarding company was affiliated with a New York-based freight-forwarding company.

During that time, Davis facilitated shipments to be made to Iran without the necessary authorization from the United States government and in violation of the law.

In October 2007, an assistant secretary of commerce for export enforcement – at the behest of the U.S. Department of Commerce, Bureau of Industry and Security (“BIS”) through its Office of Export Enforcement – issued a Temporary Denial Order (TDO) denying export privileges to the company of Davis’ coconspirator under the Export Administration Regulations (“EAR”). The TDO prohibited any person, which included Davis, from directly or indirectly exporting or reexporting to or on behalf of the coconspirator, among others.

The coconspirator, who was located in another country, purchased U.S. origin goods from a New Jersey company, among other companies, for businesses and governmental agencies of Iran. The New Jersey company was in the business of reselling chemicals, lubricants, sealants and other products used in the aircraft industry.

As part of the conspiracy, Davis and his coconspirator directed the New York Freight Forwarding company to arrange for a trucking company to pick up commodities from the New Jersey company and transport them to New York on behalf of the coconspirator’s company.

Davis admitted that in November 2007, he completed an air waybill that represented certain acrylic adhesives and spray paint coatings obtained from a New Jersey company were to be forwarded on behalf of the co-conspirator’s company to a company in Iran after issuance of the TDO.

In a January 2008 e-mail regarding the shipments, Davis noted that, “99% of these goods were destined to be send [sic] to Teheran [sic]/Iran, which was and still is a very difficult destination due to political reasons. We have handled shipments to Teheran [sic] for various customers who had to shut down their operation because they were doing business with Teheran [sic]/Iran and inspite [sic] of the risk we take we always handled your shipments in a good manner.”

Davis acknowledged that at no time was any relief, exception, or other authorization sought from the TDO.

The count to which Davis pleaded guilty carries a maximum penalty of five years in prison and a $250,000 fine. Sentencing is currently scheduled for May 15, 2012.

Tags: J. F. Chester, Jim Chester, anti-boycott, antiboycott, attorney, austin, bad guy, bis, boycott, business, chester-law.com, commerce, dallas, denied, department, export, houston, import, infringe, international, international trade, law, lawyer, list, penalty, seize, seizure, sentence, state, texas, trade law, violation

Comments: Leave a comment

 

WHEN CAN INFORMATION GET YOU IN TROUBLE? Ask these 3 Companies about Anti-boycott Penalties

By TechTradeAttorney posted in Export Enforcement on Thursday, February 9, 2012

THREE COMPANIES SETTLE ANTIBOYCOTT CHARGES

U.S. Department of Commerce Assistant Secretary for Export Enforcement, Bureau of Industry and Security, David W. Mills announced today that three companies agreed to pay a total of $ 35,200 in civil penalties to settle allegations that each violated the antiboycott provisions of the Export Administration Regulations (EAR). The companies are: Weiss-Rohlig USA LLC, JAS Forwarding (USA) Inc. (Los Angeles), and Rexnord Industries LLC.

Case summaries and additional information:

Weiss-Rohlig USA LLC (W-R), located in Cranford, NJ, has agreed to pay a civil penalty of $8,000 to settle two allegations that it violated the antiboycott provisions of the EAR. The Bureau of Industry and Security (BIS), through its Office of Antiboycott Compliance (OAC), alleged that during the year 2006, in connection with transactions involving the sale and/or transfer of goods or services (including information) from the United States to Kuwait, W-R on one occasion, furnished prohibited information in a statement regarding the blacklist status of the carrying vessel, in violation of the antiboycott provisions of the EAR and, on one occasion, failed to report to the Department of Commerce the receipt of a request to engage in a restrictive trade practice or boycott, as required by the EAR. Further information is available at: http://efoia.bis.doc.gov/antiboycott/violations/tocantiboycott.html

JAS Forwarding (USA) Inc. (Los Angeles) (JAS) has agreed to pay a civil penalty of $ 19,200 to settle three allegations that it violated the antiboycott provisions of the EAR. The Bureau of Industry and Security (BIS), through its Office of Antiboycott Compliance (OAC), alleged that during the year 2006, in connection with transactions involving the sale and/or transfer of goods or services (including information) from the United States to Lebanon and Kuwait, JAS, on three occasions, furnished prohibited information in statements certifying that the goods were neither of Israeli origin nor contained Israeli materials and in a statement regarding the blacklist status of the insurance company. Further information is available at: http://efoia.bis.doc.gov/antiboycott/violations/tocantiboycott.html

Rexnord Industries LLC (Rexnord), located in Milwaukee, WI, has agreed to pay a civil penalty of $ 8,000 to settle five allegations that it violated the antiboycott provisions of the EAR. The Bureau of Industry and Security (BIS), through its Office of Antiboycott Compliance (OAC), alleged that during the years 2007 through 2009, in connection with transactions involving the sale and/or transfer of goods or services (including information) from the United States to Qatar, Pakistan and Bangladesh, Rexnord, on one occasion, furnished prohibited information in a statement certifying that the goods were neither of Israeli origin nor contained Israeli materials and, on four occasions, failed to report to the Department of Commerce the receipt of a request to engage in a restrictive trade practice or boycott, as required by the EAR. Rexnord voluntarily disclosed the transactions to BIS. Further information is available at: http://efoia.bis.doc.gov/antiboycott/violations/tocantiboycott.html

BACKGROUND

The antiboycott provisions of the EAR prohibit US persons from taking certain actions with intent to comply with, further or support unsanctioned foreign boycotts, including furnishing information about business relationships with or in a boycotted country or with blacklisted persons. In addition, the EAR requires that persons report their receipt of certain boycott requests to the Department of Commerce. For more information, please visit BIS’ Online Training Room at http://www.bis.doc.gov/seminarsandtraining/seminar-training.htm or contact the OAC Advice Line at (202) 482.2381.

SOURCE: BIS

Tags: Internet, J. F. Chester, Jim Chester, anti-boycott, antiboycott, attorney, austin, bis, boycott, business, commerce, dallas, department, export, houston, import, infringe, international, international trade, law, lawyer, penalty, seize, seizure, sentence, state, texas, trade law

Comments: Leave a comment

 

BAD SPORTS: 300+ Websites Seized for Sports-Related IP Infringement

By TechTradeAttorney posted in eCommerce/Internet on Tuesday, February 7, 2012

Furthering the US government’s efforts to combat counterfeiting and piracy online, special agents recently seized a total of 307 websites. Sixteen of the sites illegally streamed live sporting telecasts over the Internet, including NFL games. Two hundred ninety-one website domain names were illegally selling and distributing counterfeit merchandise.

Additionally, Yonjo Quiroa, 28, of Comstock Park, Mich., was recently arrested by special agents with HSI. He is charged with one count of criminal infringement of a copyright related to his operation of websites that illegally streamed live sporting event telecasts and pay-per-view events over the Internet. Quiroa operated nine of the 16 streaming websites that were seized, and he operated them from his home in Michigan until yesterday’s arrest.

The website seizures during Operation Fake Sweep represent the 10th phase of Operation In Our Sites, a sustained law enforcement initiative targeting counterfeiting and piracy on the Internet. The 307 websites have been seized by law enforcement and are now in the custody of the federal government. Visitors to these websites will then find a seizure banner that notifies them that the domain name has been seized by federal authorities and educates them that willful copyright infringement is a federal crime.

American business is threatened by those who pirate copyrighted material and produce counterfeit trademarked goods. Criminals are attempting to steal American ideas and products and sell them over the Internet, in flea markets, in legitimate retail outlets and elsewhere. Intellectual property (IP) thieves undermine the U.S. economy and jeopardize public safety. American jobs are being lost, American innovation is being diluted – and organized criminal enterprises are profiting from their increasing involvement in IP theft.

Since the launch of Operation In Our Sites in June 2010, the HSI-led National Intellectual Property Rights Coordination Center (IPR Center) has seized a total of 669 domain names.

Tags: Internet, J. F. Chester, Jim Chester, NFL, attorney, austin, bis, business, commerce, copyright, counterfeit goods, customs, dallas, department, domain, ecommerce, export, houston, import, infringe, international, international trade, law, lawyer, penalty, seize, seizure, sentence, state, texas, trade law, trademark, web, website

Comments: Leave a comment

 

INTERCEPTION !! ICE Seizes nearly $5 Million in fake NFL Gear

By TechTradeAttorney posted in Customs IP Enforcement on Thursday, February 2, 2012

Speaking at a National Football League (NFL) news conference on Thursday (2 Feb 2012), U.S. Immigration and Customs Enforcement (ICE) Director John Morton, U.S. Customs and Border Protection (CBP) Director of Field Operations in Chicago David Murphy and NFL Vice President for Legal Affairs Anastasia Danias announced the record-breaking results of a nationwide enforcement operation targeting stores, flea markets and street vendors selling counterfeit game-related sportswear throughout the country. Special agents and officers also targeted illegal counterfeit imports into the United States, and seized hundreds of websites engaged in counterfeiting and piracy online. The initiative, dubbed Operation Fake Sweep, commenced Oct. 1, 2011.

Fake jerseys, ball caps, t-shirts, jackets and other souvenirs are among the counterfeit merchandise and clothing confiscated by teams comprised of: ICE’s Homeland Security Investigations (HSI), U.S. Customs and Border Protection (CBP), U.S. Postal Inspection Service (USPIS), Indianapolis Metropolitan Police Department and the Indiana State Police – all in partnership with the NFL.

‘Hard goods’ seizures

Special agents from HSI and officers with CBP operated in multiple teams with the NFL and various law enforcement agencies throughout the nation to identify illegal shipments imported into the U.S., as well as stores and vendors selling counterfeit trademarked items. With three days left before Super Bowl XLVI, these teams have already seized 42,692 items of phony Super Bowl-related memorabilia along with other counterfeit items to date for a total take of more than $4.8 million – up from $3.72 million last year.

During this operation, an additional 22,570 items of counterfeit merchandise and clothing representing other sports leagues, including Major League Baseball, National Basketball Association and National Hockey League were seized by law enforcement. In total, this operation netted 65,262 counterfeit items worth $6.4 million.

“While most people are focusing on whether the Patriots or Giants will win on Sunday, we at ICE have our sights on a different type of victory: defeating the international counterfeiting rings that illegally profit off of this event, the NFL, its players and sports fans,” said ICE Director Morton. “In sports, players must abide by rules of the game, and in life, individuals must follow the laws of the land. Our message is simple: abiding by intellectual property rights laws is not optional; it’s the law.”

“The NFL is committed to protecting fans and local businesses from being victimized by counterfeiters who are looking to profit illegally off of the public’s enthusiasm for the NFL,” said NFL Vice President Danias. “We are grateful for Homeland Security Investigations’ tireless efforts in combating intellectual property theft and are pleased to be working along with them and the Indianapolis Metropolitan Police Department on this important issue.”

Source: CBP

Tags: J. F. Chester, Jim Chester, NFL, attorney, austin, bis, business, commerce, copyright, counterfeit goods, customs, dallas, department, export, houston, import, infringe, international, international trade, law, lawyer, penalty, seize, seizure, sentence, state, texas, trade law, trademark

Comments: Leave a comment

 

CBP Donates Nearly $1.3 Million worth of Merchandise to Charities

By TechTradeAttorney posted in Customs IP Enforcement on Wednesday, February 1, 2012

U.S. Customs and Border Protection recently announced the donation of more than $1 million worth of abandoned and unclaimed merchandise to charities across the nation. Partnering with storage warehouses and local municipalities, several ports of entry were able to donate items to local charities over the last few weeks.

 
CBP officers in Tampa, Fla. help transfer donated merchandise to an organization set up to assist victims of domestic violence.

 

 

Some of the donations included clothes and bedding to an organization assisting women of domestic abuse in Tampa; men’s and women’s clothing to a Mission in Ft. Worth, Texas; and clothing and linens to the Salvation Army in Savannah, Ga. Donations made include more than $1.25 million worth of various articles, including apparel, toys, bedding and footwear.

“During these difficult economic times, charities are on the front lines of serving those in need and CBP is proud to support them by donating unclaimed items in our possession,” said Acting Assistant Commissioner Kevin McAleenan. “We especially appreciate the support from our local partners as these donations would not have happened with out their assistance.”

CBP relies on the strong partnerships it maintains with both the warehouses, who agreed to waive the storage fees on items that were donated, as well as the local governments and municipalities who worked with CBP to ensure federal rules and regulations were followed. While CBP, as a federal entity, is prohibited from donating General Order merchandise to specific individuals, the agency was able to transfer the merchandise to local municipalities who would make the determination as to the recipient of the goods.

When items arrive at a port of entry without proper contact information for the shipper or recipient, or lack certain other documentation needed to make legal entry into the United States, the goods enter the ranks of General Order merchandise. After six months with no claim, the merchandise then becomes abandoned/unclaimed and property of the U.S. government. These items are then eligible to be sold at monthly auctions, however sometimes CBP is able to donate this property to worthy causes.

While the donation of General Order merchandise is not something CBP is able to do on a regular basis, the agency does have a history of donating seized property. Ports of entry work with points of contact they maintain within their local municipalities to ensure that if a need arises, seized property that meets safety and trademark regulations, can be donated as necessary.

Tags: CBP, attorney, customs, export, houston, import, international, international trade, law, law firm, lawyer, merchandise, penalty, seized, sentence, state, texas, trade law

Comments: Leave a comment

 

Mixed Signals: Scientist faces Jail for Illegal Antenna Export Scheme

By TechTradeAttorney posted in Export Enforcement on Saturday, January 28, 2012

Rudolf L. Cheung, 57, a resident of Massachusetts, recently pleaded guilty in federal court in the District of Columbia to conspiracy to violate the Arms Export Control Act in connection with the unlawful export of 55 military antennae from the United States to Singapore and Hong Kong.

Cheung serves as the head of the Research & Development Department at a private company that manufactures antennae. Over the past 17 years, he has designed or supervised the development of a full library of antennae made by the firm, many of which have military applications and are used by defense contractors. Some of Cheung’s inventions are used in the U.S. space program.

According to court documents filed in the case, in June 2006, a company in Singapore sent an inquiry to the firm that employs Cheung seeking a quotation for two types of antennae that are classified by the U.S. government as defense articles and may not be exported without a license or approval from the State Department. After receiving the query, the export compliance officer at Cheung’s firm advised the firm in Singapore that neither antenna could be exported unless they filled out a U.S. government form attesting that the goods would not be transferred. The firm in Singapore refused and the order was stopped.

After learning that the export compliance officer at his company had blocked the export, Cheung admitted that he discussed with an individual outside his company (co-conspirator C) a plan to bypass the export controls at his company and arrange for the antennae to be exported to Singapore through co-conspirator C. Under the plan, co-conspirator C, who operated his own company in Massachusetts, would purchase these goods from Cheung’s company and then export them on his own to the firm in Singapore, with Cheung’s knowledge.

Subsequently, co-conspirator C contacted the firm in Singapore and offered to broker the deal with Cheung’s company. Co-conspirator C then negotiated the purchase of the antennae with employees of the firm in Singapore and, later, with another company called Corezing International in Singapore. Between July and September 2007, co-conspirator C purchased 55 military antennae from Cheung’s company, which he then exported to Corezing addresses in both Singapore and Hong Kong.

According to court documents, Cheung was aware that the purchases by Co-conspirator C were intended for export from the United States and that these exports had previously been blocked by his export compliance manager. Yet Cheung took no action to stop the sale of these antennae from his company or their subsequent export from the United States, even though he knew a license was required for such exports. Cheung neither sought nor obtained any license from the State Department to export these items outside the United States.

At sentencing, Cheung faces a maximum potential sentence of five years in prison, a fine of $250,000 and a 3-year term of supervised release.

Corezing, based in Singapore, has been charged in a separate indictment in the District of Columbia in connection with the export of these particular military antennae to Singapore and Hong Kong. Corezing and its principals have also been charged, and the United States is seeking their extradition, in connection with the export of 6,000 radio frequency modules from the United States to Iran via Singapore, some of which were later found in improvised explosive devices in Iraq.

Tags: ITAR, J. F. Chester, Jim Chester, aeca, attorney, austin, bis, business, commerce, customs, dallas, department, export, houston, import, international, international trade, law, lawyer, penalty, sentence, singapore, state, texas, trade law, traffic in arms regulations, violation

Comments: Leave a comment

 

Think Their Insurance Will Cover This?

By TechTradeAttorney posted in FCPA on Thursday, January 26, 2012

Aon Corporation  to Pay Over $16 Million in Penalties to Resolve Violations of the Foreign Corrupt Practices Act

 

Aon Corporation, a publicly traded corporation headquartered in Chicago and one of the largest insurance brokerage firms in the world, has entered into an agreement with the Department of Justice to pay a $1.76 million penalty to resolve violations of the Foreign Corrupt Practices Act (FCPA).

 

According to the non-prosecution agreement, Aon’s United Kingdom subsidiary, Aon Limited, administered certain training and education funds in connection with its reinsurance business with Instituto Nacional De Seguros (INS), Costa Rica’s state-owned insurance company.   The supposed purpose of the funds was to provide education and training for INS officials.   However, between 1997 and 2005, Aon Limited used a significant portion of the funds to reimburse INS officials for non-training related activity, including travel with spouses to overseas tourist destinations, or for uses that could not be determined from Aon’s books and records.   Many of the invoices and other records for trips taken by INS officials did not provide any business purpose for the expenditures, or showed that the expenses were clearly not related to a legitimate business purpose.

 

As part of the agreement, Aon admitted that Aon Limited’s accounting books and records related to the funds, which were consolidated into Aon’s books and records, did not accurately and fairly reflect the purpose for which the expenses were incurred.   Aon also admitted that it failed to devise and maintain an adequate system of internal accounting controls with respect to foreign sales activities sufficient to ensure compliance with the FCPA.

 

In addition to the monetary penalty, the agreement requires that Aon Corporation adhere to rigorous compliance, bookkeeping and internal controls standards and cooperate fully with the department.

 

The department entered into a non-prosecution agreement with Aon as a result of Aon’s extraordinary cooperation with the department and the U.S. Securities and Exchange Commission (SEC); its timely and complete disclosure of improper payments in Costa Rica and other countries that it discovered during its thorough investigation of its global operations; its early and extensive remedial efforts; the prior financial penalty of £5.25 million that Aon Limited paid to the United Kingdom’s Financial Services Authority (FSA); and the FSA’s close and continuous supervisory oversight over Aon Limited.   These factors also led to a substantially reduced monetary penalty.

 

In a related matter, Aon Corporation reached a settlement with the SEC and agreed to pay approximately $14.5 million in disgorgement and prejudgment interest.

Tags: Chester, Costa Rica, FCPA, Foreign Corrupt Practices Act, J. F. Chester, Jim Chester, atttorney, austin, bribery, corrupt, dallas, houston, insurance, law, lawyer, million, penalty, texas, trade law

Comments: Leave a comment

 

FCPA to European Telecom Giants: “Can You Hear Me Now?”

By TechTradeAttorney posted in FCPA on Tuesday, January 24, 2012

Magyar Telekom Plc., a Hungarian telecommunications company, and Deutsche Telekom AG, a German telecommunications company and majority owner of Magyar Telekom, have agreed to pay a combined $63.9 million criminal penalty to resolve a Foreign Corrupt Practices Act (FCPA) investigation into activities by Magyar Telekom and its subsidiaries in Macedonia and Montenegro, announced Assistant Attorney General Lanny A. Breuer of the Justice Department’s Criminal Division and U.S. Attorney Neil H. MacBride for the Eastern District of Virginia.
The department filed a criminal information against Magyar Telekom and a two-year deferred prosecution agreement in U.S. District Court for the Eastern District of Virginia today. The three-count information charges Magyar Telekom with one count of violating the anti- bribery provision of the FCPA and two counts of violating the books and records provisions of the FCPA. At the time of the charged conduct, Magyar Telekom’s American Depository Receipts (ADRs) traded on the New York Stock Exchange (NYSE). As part of the deferred prosecution agreement, Magyar Telekom agreed to pay a $59.6 million penalty for its illegal activity, implement an enhanced compliance program, and submit annual reports regarding its efforts in implementing the enhanced compliance measures and remediating past problems.

According to court documents, Magyar Telekom’s scheme in Macedonia stemmed from potential legal changes being made to the telecommunications market in that country.    In early 2005, the Macedonian government tried to liberalize the Macedonian telecommunications market in a way that Magyar Telekom deemed detrimental to its Macedonian subsidiary, Makedonski Telekommunikacii AD Skopje (MakTel). Throughout the late winter and spring of 2005, Magyar Telekom executives, with the help of Greek intermediaries, lobbied Macedonian government officials to prevent the implementation of the new telecommunications laws and regulations.
Magyar Telekom eventually entered into an agreement with certain high-ranking Macedonian government officials to resolve its concerns about the legal changes. In the secret agreement, a so-called “protocol of cooperation,” Macedonian government officials agreed to delay the entrance of a third mobile license into the Macedonian telecommunications market, as well as other regulatory benefits. Magyar Telekom executives signed two copies of the protocol of cooperation, each with high-ranking officials of the different ruling parties of Macedonia. The Magyar Telekom executives then kept the only executed copies outside of Magyar Telekom’s company records.

According to court documents, in order to secure the benefits in the protocol of cooperation, the Magyar Telekom executives engaged in a course of conduct with consultants, intermediaries and other third parties, including through sham consultancy contracts with entities owned and controlled by a Greek intermediary, to pay €4.875 (approximately $6 million) under circumstances in which they knew, or were aware of a high probability that circumstances existed in which, all or part of such payment would be passed on to Macedonian officials. The sham contracts were recorded as legitimate on MakTel’s books and records, which were consolidated into Magyar Telekom’s financials. Deustche Telekom, which owned approximately 60 percent of Magyar Telekom, reported the results of Magyar Telekom’s operations in its consolidated financial statements.

Additionally, the criminal information charges Magyar Telekom with falsifying its books and records in regard to its activity in Montenegro. According to the court filing, Magyar Telekom made improper payments in connection with its acquisition of a state-owned telecommunications company in Montenegro. These payments were documented on Magyar Telekom’s books and records through the execution of four bogus contracts. For example, two of the contracts were backdated and concealed the true counterparties, and no legitimate services were provided under the contracts even though the contracts were for €4.47 million.

The US DOJ also entered into a two-year non-prosecution agreement with Magyar Telekom’s parent company, Deutsche Telekom, for its failure to keep books and records that accurately detailed the activities of Magyar Telekom. Deutsche Telekom, which is headquartered in Germany, agreed to pay a $4.36 million penalty in connection with the inaccurate books and records and to enhance its compliance program. At the time of the conduct, Deutsche Telekom’s ADRs traded on the NYSE.

Both agreements acknowledge Magyar Telekom and Deutsche Telekom’s voluntary disclosure of the FCPA violations to the department and the leadership of Magyar Telekom’s audit committee in pursuing a “thorough global internal investigation concerning bribery and related misconduct.” In addition, the agreements highlight that the companies have already undertaken remedial measures and have committed to further remedial steps through the implementation of an enhanced compliance program.
In a related matter, the U.S. Securities and Exchange Commission (SEC) announced civil charges against Magyar Telekom and Deutsche Telekom as well as three former Magyar Telecom executives. Magyar Telekom and Deutsche Telekom consented to the entry of a permanent injunction against FCPA violations. Magyar Telecom agreed to pay $31.2 million in disgorgement and prejudgment interest.
Additional information about the Justice Department’s FCPA enforcement efforts can be found at www.justice.gov/criminal/fraud/fcpa.

Tags: FCPA, Foreign Corrupt Practices Act, J. F. Chester, Jim Chester, SEC, atttorney, austin, bribery, business, corrupt, customs, dallas, export, houston, illegal, import, international trade, justice, law, lawyer, million, payment, penalty, telecommunications, texas, trade law, violation

 

 

Ninjavideo.net Founder Gets 14-months in Prison for Copyright Violations

By TechTradeAttorney posted in Customs IP Enforcement on Friday, January 20, 2012

A founder of NinjaVideo.net, a website that provided millions of users with the ability to illegally download high-quality copies of copyright-protected movies and television programs, was sentenced today to 14 months in prison. The sentence is the result of an investigation conducted by U.S. Immigration and Customs Enforcement’s (ICE) Homeland Security Investigations (HSI)-led National Intellectual Property Rights Coordination Center (IPR Center).

Matthew David Howard Smith, 24, of Raleigh, N.C., was sentenced today in Alexandria, Va., by U.S. District Judge Anthony J. Trenga also ordered Smith to serve two years of supervised release following his prison term, to pay $172,387 and to forfeit to the United States five financial accounts and various computer equipment involved in the crimes. Smith pleaded guilty on Sept. 23, 2011, to conspiracy and criminal copyright infringement.

Smith was one of the founders of the NinjaVideo.net website, which operated from February 2008 until it was shut down by law enforcement in June 2010. NinjaVideo.net provided millions of website visitors with the ability to illegally download infringing copies of copyright-protected movies and television programs in high-quality formats. Many of the movies offered on the website were still playing in theaters, while others had not yet been released. According to court documents, Smith designed many operational elements of the website, including an “applet” that was required to view infringing content on the NinjaVideo.net website. Smith admitted that he made agreements with online advertising entities to generate income for the website, and he and his co-conspirators collected more than $500,000 during the website’s two-and-a-half years of operation. Smith kept $172,387 of the illegal proceeds for himself.

On Sept. 9, 2011, Smith was indicted along with four of the other top administrators of NinjaVideo.net. Co-defendant Hana Amal Beshara was sentenced on Jan. 6, 2012, to 22 months in prison and ordered to repay nearly $210,000 for her role as another co-founder of NinjaVideo.net. Two additional co-defendants are awaiting sentencing. An arrest warrant remains outstanding for the fourth indicted co-defendant, Zoi Mertzanis of Greece. Another co-founder of NinjaVideo.net who was charged separately has also pleaded guilty.

NinjaVideo was seized during the first phase of “Operation In Our Sites,” a sustained law enforcement initiative to protect consumers by targeting counterfeiting and piracy over the Internet.

Tags: Chester, Customs, Customs IP Enforcement, ICE, J. F. Chester, Jim Chester, NinjaVideo, atttorney, austin, dallas, houston, illegal, intellectual property, internet, ipr, law, lawyer, texas, trade law

Comments: Leave a comment

 

Megaupload Faces Mega-Problems for Alleged Copyright Infringement

By TechTradeAttorney posted in eCommerce/Internet on Friday, January 20, 2012

US Justice Department Charges Leaders of Megaupload with Widespread Online Copyright Infringement

 

Seven individuals and two corporations have been charged in the United States with running an international organized criminal enterprise allegedly responsible for massive worldwide online piracy of numerous types of copyrighted works, through Megaupload.com and other related sites, generating more than $175 million in criminal proceeds and causing more than half a billion dollars in harm to copyright owners, the U.S. Justice Department and FBI announced recently.

 

This action is among the largest criminal copyright cases ever brought by the United States and directly targets the misuse of a public content storage and distribution site to commit and facilitate intellectual property crime.

The individuals and two corporations – Megaupload Limited and Vestor Limited – were indicted by a grand jury in the Eastern District of Virginia on Jan. 5, 2012, and charged with engaging in a racketeering conspiracy, conspiring to commit copyright infringement, conspiring to commit money laundering and two substantive counts of criminal copyright infringement. The individuals each face a maximum penalty of 20 years in prison on the charge of conspiracy to commit racketeering, five years in prison on the charge of conspiracy to commit copyright infringement, 20 years in prison on the charge of conspiracy to commit money laundering and five years in prison on each of the substantive charges of criminal copyright infringement.

 

The indictment alleges that the criminal enterprise is led by Kim Dotcom, aka Kim Schmitz and Kim Tim Jim Vestor, 37, a resident of both Hong Kong and New Zealand. Dotcom founded Megaupload Limited and is the director and sole shareholder of Vestor Limited, which has been used to hold his ownership interests in the Mega-affiliated sites.

 

In addition, the following alleged members of the Mega conspiracy were charged in the indictment:

  • Finn Batato, 38, a citizen and resident of Germany, who is the chief marketing officer;
  • Julius Bencko, 35, a citizen and resident of Slovakia, who is the graphic designer;
  • Sven Echternach, 39, a citizen and resident of Germany, who is the head of business development;
  • Mathias Ortmann, 40, a citizen of Germany and resident of both Germany and Hong Kong, who is the chief technical officer, co-founder and director;
  • Andrus Nomm, 32, a citizen of Estonia and resident of both Turkey and Estonia, who is a software programmer and head of the development software division;
  • Bram van der Kolk, aka Bramos, 29, a Dutch citizen and resident of both the Netherlands and New Zealand, who oversees programming and the underlying network structure for the Mega conspiracy websites.

Dotcom, Batato, Ortmann and van der Kolk were arrested today in Auckland, New Zealand, by New Zealand authorities, who executed provisional arrest warrants requested by the United States. Bencko, Echternach and Nomm remain at large. Today, law enforcement also executed more than 20 search warrants in the United States and eight countries, seized approximately $50 million in assets and targeted sites where Megaupload has servers in Ashburn, Va., Washington, D.C., the Netherlands and Canada. In addition, the U.S. District Court in Alexandria, Va., ordered the seizure of 18 domain names associated with the alleged Mega conspiracy.

 

According to the indictment, for more than five years the conspiracy has operated websites that unlawfully reproduce and distribute infringing copies of copyrighted works, including movies – often before their theatrical release – music, television programs, electronic books, and business and entertainment software on a massive scale. The conspirators’ content hosting site, Megaupload.com, is advertised as having more than one billion visits to the site, more than 150 million registered users, 50 million daily visitors and accounting for four percent of the total traffic on the Internet. The estimated harm caused by the conspiracy’s criminal conduct to copyright holders is well in excess of $500 million. The conspirators allegedly earned more than $175 million in illegal profits through advertising revenue and selling premium memberships.

 

The indictment states that the conspirators conducted their illegal operation using a business model expressly designed to promote uploading of the most popular copyrighted works for many millions of users to download. The indictment alleges that the site was structured to discourage the vast majority of its users from using Megaupload for long-term or personal storage by automatically deleting content that was not regularly downloaded. The conspirators further allegedly offered a rewards program that would provide users with financial incentives to upload popular content and drive web traffic to the site, often through user-generated websites known as linking sites. The conspirators allegedly paid users whom they specifically knew uploaded infringing content and publicized their links to users throughout the world.

 

In addition, by actively supporting the use of third-party linking sites to publicize infringing content, the conspirators did not need to publicize such content on the Megaupload site. Instead, the indictment alleges that the conspirators manipulated the perception of content available on their servers by not providing a public search function on the Megaupload site and by not including popular infringing content on the publicly available lists of top content downloaded by its users.

 

As alleged in the indictment, the conspirators failed to terminate accounts of users with known copyright infringement, selectively complied with their obligations to remove copyrighted materials from their servers and deliberately misrepresented to copyright holders that they had removed infringing content. For example, when notified by a rights holder that a file contained infringing content, the indictment alleges that the conspirators would disable only a single link to the file, deliberately and deceptively leaving the infringing content in place to make it seamlessly available to millions of users to access through any one of the many duplicate links available for that file.

 

The indictment charges the defendants with conspiring to launder money by paying users through the sites’ uploader reward program and paying companies to host the infringing content.

 

The case is being prosecuted by the U.S. Attorney’s Office for the Eastern District of Virginia and the Computer Crime & Intellectual Property Section in the Justice Department’s Criminal Division. The Criminal Division’s Office of International Affairs, Organized Crime and Gang Section, and Asset Forfeiture and Money Laundering Section also assisted with this case.

 

The investigation was initiated and led by the FBI at the National Intellectual Property Rights Coordination Center (IPR Center), with assistance from U.S. Immigration and Customs Enforcement’s Homeland Security Investigations. Substantial and critical assistance was provided by the New Zealand Police, the Organised and Financial Crime Agency of New Zealand (OFCANZ), the Crown Law Office of New Zealand and the Office of the Solicitor General for New Zealand; Hong Kong Customs and the Hong Kong Department of Justice; the Netherlands Police Agency and the Public Prosecutor’s Office for Serious Fraud and Environmental Crime in Rotterdam; London’s Metropolitan Police Service; Germany’s Bundeskriminalamt and the German Public Prosecutors; and the Royal Canadian Mounted Police – Greater Toronto Area (GTA) Federal Enforcement Section and the Integrated Technological Crime Unit and the Canadian Department of Justice’s International Assistance Group. Authorities in the United Kingdom, Australia and the Philippines also provided assistance.

 

This case is part of efforts being undertaken by the Department of Justice Task Force on Intellectual Property (IP Task Force) to stop the theft of intellectual property. Attorney General Eric Holder created the IP Task Force to combat the growing number of domestic and international intellectual property crimes, protect the health and safety of American consumers, and safeguard the nation’s economic security against those who seek to profit illegally from American creativity, innovation and hard work. The IP Task Force seeks to strengthen intellectual property rights protection through heightened criminal and civil enforcement, greater coordination among federal, state and local law enforcement partners, and increased focus on international enforcement efforts, including reinforcing relationships with key foreign partners and U.S. industry leaders. To learn more about the IP Task Force, go to www.justice.gov/dag/iptaskforce .

 

SOURCE:   US DOJ

Tags: Chester, Copyright, Copyright Infringement, Infringement, J. F. Chester, Jim Chester, atttorney, austin, dallas, houston, internet, law, lawyer, online, piracy, texas, trade law

Comments: Leave a comment

 

2011 Another Record Year for Counterfeit/Infringing Imported Goods Seizures

By TechTradeAttorney posted in Customs IP Enforcement on Saturday, January 14, 2012

According to a recently-released report from U.S. Customs and Border Protection (CBP) and U.S. Immigration and Customs Enforcement (ICE), counterfeit and pirated goods seizures during fiscal year (FY) 2011 totaled almost 25,000 – a 24 percent increase over 2010.

Many fake goods seriously threaten the health and safety of American consumers and our national security. With this in mind, CBP and ICE continued to step up enforcement against these dangerous products resulting in a 44 percent increase in the number of seizures of health and safety products that could have harmed Americans. The value of these seizures soared to more than $60 million due to increases in pharmaceutical and perfume seizures.

Despite the significant increase in the number of seizures, the domestic value for seizures in fiscal year 2011 decreased by five percent to $178.9 million and the manufacturer’s suggested retail price declined slightly to $1.1 billion. This is primarily due to a shift toward using international mail, express courier, and consolidated shipping services to import counterfeit and pirated goods.

“The growth of websites selling counterfeit goods directly to consumers is one reason why CBP and ICE have seen a significant increase in the number of seizures at mail and express courier facilities,” said Acting CBP Commissioner David V. Aguilar. “Although these websites may have low prices, what they do not tell consumers is that the true costs to our nation and consumers include lost jobs, stolen business profits, threats to our national security, and a serious risk of injury to consumers.”

“I’m very proud of the unrelenting efforts of the ICE-led National Intellectual Property Rights Coordination Center and our law enforcement partners,” said ICE Director John Morton. “IP enforcement is a high priority for ICE and CBP because the trade in counterfeit and pirated goods robs Americans of jobs and puts their safety at risk, costs legitimate businesses billions of dollars in revenue, and fuels criminal activity. In fiscal year 2012, ICE and CBP will continue to focus on keeping these goods off the streets and bring those responsible for producing and distributing them to justice.”

China continues to be the number one source country for counterfeit and pirated goods seized, accounting for 62 percent or $124.7 million of the total domestic value of seizures.

For the first time since FY 2005, footwear was not the top commodity seized in fiscal year 2011. Consumer electronics were the top commodity seized, and approximately one-third of this category was represented by IPR infringing cellular phones.

The top 10 categories of IPR-infringing products seized were pharmaceuticals, health/personal care, eyewear/parts, critical technology components, electronic articles, cigarettes, perfumes/colognes, batteries, exercise equipment and transportation/parts.

As the federal agency responsible for the management, control and protection of U.S. borders, CBP is on the frontline of IPR enforcement. The men and women of CBP protect our nation’s economy, the safety of its people, and our national security against harm from counterfeit and pirated goods. The continued vigilance of CBP personnel protects United States citizens and businesses every day.

As the largest investigative arm of the Department of Homeland Security, ICE Homeland Security Investigations (HSI) plays a leading role in targeting criminal organizations responsible for producing, smuggling, and distributing counterfeit products. ICE HSI focuses not only on keeping counterfeit products off our streets, but also on dismantling the criminal organizations behind such illicit activity.

The National Intellectual Property Rights Coordination Center (IPR Center) is one of the U.S. government’s key weapons in the fight against criminal counterfeiting and piracy. The IPR Center uses the expertise of its 19 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 www.IPRCenter.gov.

Source:  CBP/ICE

Tags: 2011, CBP, China, Customs, ICE, IP Enforcement, IPR, J. F. Chester, Jim Chester, atttorney, austin, business, copyright, countrfeit, customs, dallas, export, goods, houston, import, infringement, international trade, law, lawyer, piracy, seizure, texas, trade law, violation

Comments: Leave a comment

 

GIVES NEW MEANING TO “DAYGLO” COLORS Ex-Managing Director of Paint Company Pleads Guilty to Conspiring to Illegally Export
High-Performance Coatings to Nuclear Reactor in Pakistan

By TechTradeAttorney posted in International IP on Friday, December 9, 2011

Xun Wang, a former Managing Director of PPG Paints Trading (Shanghai) Co., Ltd., a wholly-owned Chinese subsidiary of United States-based PPG Industries, Inc., pled guilty to conspiring to violate the International Emergency Economic Powers Act.

Wang, 51, faces a maximum sentence of five years of incarceration and a fine of up to $250,000.

Concurrently, Wang has settled an administrative proceeding brought by the Department of Commerce regarding the same subject matter as her criminal case. As part of her settlement agreement, Wang has agreed to pay a civil penalty of $200,000 with another $50,000 payment suspended, and to be placed on the Department of Commerce’s Denied Persons List for a period of five years with an additional five years suspended. As a Denied Person, Wang will be prohibited from directly or indirectly participating in any transaction involving a commodity, software or technology exported, or to be exported, from the United States that is subject to Department of Commerce regulations.

In both the criminal and administrative cases, Wang is accused of conspiring to export, reexport, and transship high-performance epoxy coatings to the Chashma 2 Nuclear Power Plant (Chashma II) in Pakistan, a nuclear reactor owned and/or operated by the Pakistan Atomic Energy Commission (PAEC), an entity on the Department of Commerce’s Entity List.

The Pakistan Atomic Energy Commission is the science and technology organization in Pakistan responsible for Pakistan’s nuclear program, including the development and operation of nuclear power plants in Pakistan. In November 1998, following Pakistan’s first successful detonation of a nuclear device, the Commerce Department’s Bureau of Industry and Security added the Pakistan Atomic Energy Commission, as well as its subordinate nuclear reactors and power plants, to the list of prohibited end users under the Export Administration Regulations.

As a restricted end-user, a United States manufacturer seeking to export, reexport or transship any items subject to the Export Administration Regulations to the Pakistan Atomic Energy Commission, or its nuclear power plants or reactors, would first need to obtain a license from the Department of Commerce in the District of Columbia.

SOURCE: BIS

Tags: None

Comments: Leave a comment

 

SLAP SHOT: Pennsylvania Man Charged with Copyright Infringement of Hockey Broadcasts

By TechTradeAttorney posted in Intellectual Property on Wednesday, December 7, 2011

Seven charges of copyright infringement against a Pennsylvania man for allegedly infringing on copyright protected broadcasts of hockey games.  Michael Moore, 44, of Chadds Ford, Penn., allegedly infringed the copyright protected works during seven six-month periods between May 2006 and June 2010.

 

The indictment alleges that HDHOCKEY.TV was a website that offered for sale DVDs containing recordings of copyrighted television broadcasts of hockey games and other copyrighted works such as team and player profiles, from the National Hockey League (NHL) and other professional hockey leagues.   It also alleges that BROADSTREETBULLY.COM was a website offering for sale monthly subscriptions that enabled subscribers to download an unlimited number of video clips of copyrighted television broadcasts of hockey games, and other copyrighted works such as team and player profiles, from the NHL and other professional hockey leagues.   The indictment alleges that neither site had the permission of the NHL or any other professional hockey league to reproduce or distribute these recordings.

 

The maximum penalty for each count of copyright infringement is five years in prison.   The indictment also seeks forfeiture.

 

Source: DOJ

Tags: J. F. Chester, Jim Chester, atttorney, austin, business, customs, dallas, export, houston, import, international trade, law, lawyer, texas, trade law, violation

Comments: Leave a comment

 

GUESS WHO SANTA JUST ADDED TO THE “NAUGHTY LIST” Seizure of 150 Website Domains Involved in Selling Counterfeit Goods

By TechTradeAttorney posted in Intellectual Property on Monday, December 5, 2011

Seizure orders have been executed against 150 domain names of commercial websites engaged in the illegal sale and distribution of counterfeit goods and copyrighted works as part of Operation In Our Sites. The 150 seized domains are in the custody of the federal government.  Visitors to the sites will now find a seizure banner that notifies them that the domain name has been seized by federal authorities and educates them that willful copyright infringement is a federal crime.

 

During this operation, federal law enforcement agents made undercover purchases of a host of products, including professional sports jerseys, golf equipment, DVD sets, footwear, handbags and sunglasses, representing a variety of trademarks from online retailers who were suspected of selling counterfeit products.  In most cases, the goods were shipped directly into the United States from suppliers in other countries.  If the trademark holders confirmed that the purchased products were counterfeit or otherwise illegal, seizure orders for the domain names of the websites that sold the goods and associated websites were obtained from federal magistrate judges.

 

This operation is the eighth phase of Operation In Our Sites, a sustained law enforcement initiative to protect consumers by targeting counterfeit and piracy on the Internet.   This is the second year that a phase of Operation In Our Sites has coincided with Cyber Monday.  In November 2010, 82 websites were seized during the Cyber Monday-related operation.

 

Since the operation’s June 2010 launch, the IPR Center has seized a total of 350 domain names, and the seizure banner has received more than 77 million individual views.

 

Of the 350 domain names seized, 116 have now been forfeited to the U.S. government. The federal forfeiture process affords 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.

 

Additionally, a public service announcement (PSA), launched in April 2011, appears on each of the 116 forfeited domain names. This video educates the public about the economic impact of trademark counterfeiting and copyright infringement.

SOURCE: DOJ and ICE

Tags: Operation In Our Sites

Comments: Leave a comment

 

CARGILL GETS STEAMED AND DOW SAYS “OW” Chinese National Guilty of Economic Espionage

By TechTradeAttorney posted in Trade & Technology Law on Wednesday, November 16, 2011

Kexue Huang, a Chinese national and a former resident of Carmel, Ind., pleaded guilty to one count of economic espionage to benefit a component of the Chinese government and one count of theft of trade secrets.

 

Since its enactment in 1996, there have been a total of eight trade secret theft cases nationwide under the Economic Espionage Act, where the intended beneficiary was a component of a foreign government.

 

In July 2010, Huang was charged in an indictment filed in the Southern District of Indiana for misappropriating and transporting trade secrets to the People’s Republic of China (PRC) while working as a research scientist at Dow AgroSciences LLC.  A separate indictment charged Huang with stealing a trade secret from a second company, Cargill Inc.

 

From January 2003 until February 2008, Huang was employed as a research scientist at Dow, a leading international agricultural company based in Indianapolis that provides agrochemical and biotechnology products.  In 2005, Huang became a research leader for Dow in strain development related to unique, proprietary organic insecticides marketed worldwide.

 

As a Dow employee, Huang signed an agreement that outlined his obligations in handling confidential information, including trade secrets, and prohibited him from disclosing any confidential information without Dow’s consent. Dow employed several layers of security to preserve and maintain confidentiality and to prevent unauthorized use or disclosure of its trade secrets.

Huang admitted that during his employment at Dow, he misappropriated several Dow trade secrets.  From 2007 to 2010, Huang transferred and delivered the stolen Dow trade secrets to individuals in Germany and the PRC.  With the assistance of these individuals, Huang used the stolen materials to conduct unauthorized research with the intent to benefit foreign universities that were instrumentalities of the PRC government.  Huang also admitted that he pursued steps to develop and produce the misappropriated Dow trade secrets in the PRC, including identifying manufacturing facilities in the PRC that would allow him to compete directly with Dow in the established organic pesticide market.

 

After Huang left Dow, he was hired in March 2008 by Cargill, an international producer and marketer of food, agricultural, financial and industrial products and services.  Huang worked as a biotechnologist for Cargill until July 2009 and signed a confidentiality agreement promising never to disclose any trade secrets or other confidential information of Cargill.  Huang admitted that during his employment with Cargill, he stole one of the company’s trade secrets – a key component in the manufacture of a new food product, which he later disseminated to another person, specifically a student at Hunan Normal University in the PRC.

 

The aggregated loss from Huang’s criminal conduct exceeds $7 million but is less than $20 million.

At sentencing, Huang faces a maximum prison sentence of 15 years on the economic espionage charge and 10 years on the theft of trade secrets charge.

 

SOURCE: DOJ

Tags: Cargill Inc., Dow AgroSciences LLC, J. F. Chester, Jim Chester, atttorney, austin, business, customs, dallas, export, houston, import, international trade, law, lawyer, texas, trade law, trade secret theft, violation

Comments: Leave a comment

 

HIS FUTURE BRIBES WILL BE PAID IN CIGARETTES Longest Prison Term Ever Imposed in an FCPA Case

By TechTradeAttorney posted in FCPA on Monday, November 14, 2011

Joel Esquenazi, the former president of Terra Telecommunications Corp. was sentenced to 15 years in prison for his role in a scheme to pay bribes to Haitian government officials at Telecommunications D’Haiti S.A.M. (Haiti Teleco), a state-owned telecommunications company.  This is the longest sentence ever imposed in a case involving the Foreign Corrupt Practices Act (FCPA).   Carlos Rodriguez, the former executive vice president of Terra, was also sentenced to 84 months in prison for his role in the bribery scheme.  The defendants were also ordered to forfeit $3.09 million.

 

Esquenazi and Rodriguez were convicted in August 2011 of one count of conspiracy to violate the FCPA and wire fraud; seven counts of FCPA violations; one count of money laundering conspiracy; and 12 counts of money laundering.

At trial, the evidence showed that the defendants participated in a scheme to commit foreign bribery and money laundering from November 2001 through March 2005, during which time the telecommunications company paid more than $890,000 to shell companies to be used for bribes to Teleco officials.  Esquenazi and Rodriguez authorized these bribe payments to successive directors of international relations at Teleco.  To conceal the bribe payments, the defendants used various shell companies to receive and forward the payments.  In addition, they created false records claiming that the payments were for “consulting services,” which were never intended to be performed or actually performed.

 

Source: DOJ

Tags: Terra Telecommunications Corp.

Comments: Leave a comment

 

IT WAS BOUND TO HAPPEN U.S. Components Exported Illegally to Iran – Later Found in Bombs

By TechTradeAttorney posted in Export Enforcement on Friday, November 11, 2011

Five individuals and four of their companies have been indicted as part of a conspiracy to defraud the United States that allegedly caused thousands of radio frequency modules to be illegally exported from the United States to Iran, at least 16 of which were later found in unexploded improvised explosive devices (IEDs) in Iraq.   Some of the defendants are also charged in a fraud conspiracy involving exports of military antennas to Singapore and Hong Kong.

 

Authorities in Singapore arrested Wong Yuh Lan (Wong), Lim Yong Nam (Nam), Lim Kow Seng (Seng), and Hia Soo Gan Benson (Hia), all citizens of Singapore, in connection with a U.S. request for extradition.  The remaining individual defendant, Hossein Larijani, is a citizen and resident of Iran who remains at large.

The indictment includes charges of conspiracy to defraud the United States, smuggling, illegal export of goods from the United States to Iran, illegal export of defense articles from the United States, false statements and obstruction of justice.

 

IEDs caused roughly 60 percent of all American combat casualties in Iraq between 2001 and 2007.  The first conspiracy alleged in the indictment involved radio frequency modules that have several commercial applications, including in wireless local area networks connecting printers and computers in office settings.   These modules include encryption capabilities and have a range allowing them to transmit data wirelessly as far as 40 miles when configured with a high-gain antenna.   These same modules also have potentially lethal applications.   Notably, during 2008 and 2009, coalition forces in Iraq recovered numerous modules made by the Minnesota firm that had been utilized as part of the remote detonation system for IEDs.

 

According to the indictment, the defendants profited considerably from their illegal trade.   The defendants allegedly made tens of thousands of dollars for arranging these illegal exports from the United States through Singapore to Iran.

 

The indictment alleges that several of the 6,000 modules the defendants routed from Minnesota to Iran were later discovered by coalition forces in Iraq, where they were being used as part of the remote detonation systems of IEDs.   In May 2008, December 2008, April 2009, and July 2010, coalition forces found no less than 16 of these modules in unexploded IEDs recovered in Iraq, the indictment alleges.

 

SOURCE: BIS and DOJ

Tags: IEDs, export of radio frequency modules to Iraq

Comments: Leave a comment

 

CAUGHT STEALING I.C.E.’s ‘Operation Strike Out’ – Nets Counterfeit Sports Paraphernalia

By TechTradeAttorney posted in Customs IP Enforcement on Wednesday, November 9, 2011

Operation Strike Out, which commenced at the beginning of the American League and National League Championship Series, has resulted in the seizure of 58 commercial websites that sold and distributed counterfeit sports paraphernalia. ICE special agents have also seized 5,347 items with a manufacturer’s suggested retail price (MSRP) of $134,862.

 

The seizure of the 58 domain names is the seventh phase of “Operation In Our Sites,” a sustained law enforcement initiative to protect consumers by targeting counterfeiting and piracy over the Internet. In June 2010, the IPR Center began “Operation In Our Sites.” Since the launch of this operation in June 2010, the IPR Center has seized a total of 200 domain names and redirected those domain names to a seizure banner.

 

The 58 domain names seized in this phase of “Operation In Our Sites,” were all commercial websites engaged in illegally selling and distributing counterfeit sports paraphernalia. Once the materials were confirmed to be counterfeit or otherwise illegal, ICE HSI special agents obtained seizure orders from federal magistrate judges for the domain names of the websites that sold or distributed the items. The seized counterfeit items infringed on the copyrights or trademarks owned by: Major League Baseball, the National Basketball Association, the National Football League and the National Hockey League.

 

ICE HSI special agents operated in multiple teams to identify stores and vendors selling counterfeit trademarked items. These teams – operating in Dallas; Detroit; Milwaukee, Wis.; and St. Louis – have seized 5,347 items of phony World Series-related memorabilia along with other counterfeit Major League Baseball and sports related items to date totaling $134,862. Ball caps, t-shirts, jackets, tickets and other souvenirs are among the counterfeit merchandise and clothing confiscated. Three individuals were also arrested on federal and state counterfeiting violations.

 

SOURCE: ICE

Tags: ICE, Operation Strike Out

 

IT’S THE BEST PLACE IN D.C. TO GET “LOCALLY-PRODUCED” FRUITS, VEGETABLES. . . .AND HIGH-END FASHION ACCESSORIES Washington DC Farmers Market Bust Nets $3 Million in Counterfeit Goods

By TechTradeAttorney posted in Intellectual Property on Monday, October 31, 2011

Nearly $3 million worth of counterfeit goods were seized at the D.C. Farmers Market.  Agents and officers seized 18,640 pieces of counterfeit merchandise from four vehicles and 16 locations operating within the D.C. Farmers Market on the corner of Fifth Street Northeast and Neal Place Northeast.  They served seven search warrants and conducted 13 plain view searches at the flea market.  The manufacturer’s suggested retail price for seized counterfeit goods totaled nearly $3 million.  Additionally, law enforcement officers seized two cargo vans and one 2011 Dodge Charger, allegedly used to facilitate the trafficking of counterfeit goods.

 

MPD arrested 11 people on state criminal charges for trademark counterfeiting.  Saidou Zongo, 41, was one of the 11 individuals arrested on criminal charges.  He was residing in Silver Spring, Md., and has an outstanding INTERPOL notice from the Burkina Faso government for misappropriated funds.

 

Agents seized counterfeit items, including: purses, wallets, perfume, watches, hats, shoes, shirts, jackets, sweatshirts, pants, music and movies.

 

The counterfeit brands included, but were not limited to, the following trademarks: Nike, Timberland, Prada, Gucci, New Balance, Reebok, The North Face, True Religion, Louis Vuitton, Polo Ralph Lauren, Ugg, Lacoste, Coogi, Affliction, Lifted Research Group (LRG), Akademiks, Jimmy Choo, Coach, Hugo Boss, Helly Hansen, Burberry, Chanel, Armani, Silver 985, City Life, Valentino, Spyder, Greg Norman, Tory Birch, Dooney and Bourke, Fendi, Juicy Couture, Kate Spade, Versace, Marc Jacobs, Lacoste, G Star Raw, Ed Hardy, Calvin Klein, Rock N Republic, Black Label, Evisu, NFL, NBA, MLB, music members of the Recording Industry Association of America (RIAA), and movie members of the Motion Picture Association of America (MPAA).

 

SOURCE: ICE

Tags: counterfeit goods in D.C. Farmer’s Market

Comments: Leave a comment

 

CUSTOMS IP ENFORCEMENT NEWS

By TechTradeAttorney posted in Customs IP Enforcement on Friday, October 28, 2011

The CBP strategic approach to intellectual property rights enforcement is multi-layered and includes seizing counterfeit goods at the border, pushing the border outward through audits of infringing importers and cooperation with our international trading partners, and partnering with industry and other government agencies to enhance these efforts.  CBP officers and import specialists are aggressively working together to intercept shipments containing counterfeit and pirated items.

Recent CBP IP counterfeit seizures at the US border include:

 

– Los Angeles CBP Seize $4.5 Million in Counterfeit Sunglasses

U.S. Customs and Border Protection officers and import specialists assigned to the Los Angeles/Long Beach seaport discovered and seized 30,300 pairs of sunglasses in violation of the Lacoste trademark in a shipment arriving from China.

 

CBP officers seized the infringing shipment with a domestic value of $48,000. If the sunglasses had genuine Lacoste trademarks, the manufacturer’s suggested retail price of the shipment would have been $4.5 million.

 

Cincinnati CBP Seize $5.3 Million in Counterfeit Merchandise

U.S. Customs and Border Protection has just concluded an extremely successful Intellectual Property Rights enforcement operation. Operation Summers End seized hundreds of counterfeit items being imported into the United States. CBP officers assigned to the DHL hub, with the support of Import Specialists from Cleveland, have been targeting and seizing arriving parcels containing IPR violations.

 

As a result of the five-day special operation conducted by CBP staff at the DHL hub, 289 seizures of intellectual property rights-infringing merchandise were initiated. The total manufacturers’ suggested retail price on items seized, if they had been legitimate, during Operation Summers End was $5,390,671.73.

 

Source: CBP

Tags: Customs IP Enforcement

Comments: Leave a comment

 

DOJ CRACKS SHELL OF TURTLE WIRELESS Two Texans Guilty of Trafficking Counterfeit Goods at Mall Kiosks

By TechTradeAttorney posted in Intellectual Property on Thursday, October 27, 2011

Shiraz Sherali Odhwani, 54, pleaded guilty to conspiracy to traffic in counterfeit goods and Umair Salman Khan, 29, pleaded guilty to conspiracy to traffic counterfeit goods.

 

Odhwani owns and operates a company known as Turtle Wireless, a wholesale outlet and retail point of sale for cellular telephones and wireless device accessories located in Dallas.  In 2008, Turtle Wireless began selling counterfeit cellular telephone accessories purchased from suppliers in China.  Through Turtle Wireless, Odhwani sold counterfeit products to customers within the Eastern District of Texas and elsewhere.  In connection with this case, law enforcement officers seized counterfeit items with an estimated value of $5 million from Odhwani’s store and leased storage space.

 

Khan worked at a cellular telephone kiosk in the San Jacinto Mall in Baytown, Texas.  The kiosk was owned and operated by individuals in East Texas who had similar kiosks in Austin and Longview.  Beginning in August 2009, Khan sold counterfeit merchandise out of the Baytown kiosk.  The counterfeit items, which were shipped to Khan in Baytown on a monthly basis, were purchased by co-conspirators.

 

Odhwani and Khan each face up to 5 years in federal prison. Sentencing dates have not been set.

 

SOURCE: DOJ

Tags: Turtle Wireless, counterfeit cell phones

Comments: Leave a comment

 

HE HOPED REGULATORS WOULDN’T “SHIH” HIM New Yorker Pleads Guilty to Conspiracy to Export Computer-Related Equipment to Iran

By TechTradeAttorney posted in Export Enforcement on Wednesday, October 26, 2011

Jeng “Jay” Shih and his Queens, N.Y., company, Sunrise Technologies and Trading Corporation, recently pleaded guilty to conspiracy to illegally export U.S.-origin computers from the United States to Iran through the United Arab Emirates (UAE).

 

Shih and his company each pleaded guilty to conspiracy to violate the International Emergency Economic Powers Act (IEEPA) and to defraud the United States.  The maximum sentence is five years in prison and $1 million in criminal fines.  Sentencing has been scheduled for Jan. 13, 2012.

 

Under the terms of the plea and related civil settlements with the U.S. Department of Commerce’s Bureau of Industry and Security and OFAC, Shih and his company have agreed to forfeiture of a money judgment in the amount of $1.25 million.  In addition, Shih and Sunrise are denied export privileges for 10 years, although this penalty will be suspended provided that neither Shih nor Sunrise commits any export violations.

 

Shih was arrested on a criminal complaint on April 6, 2011.  He and his company were later indicted on April 21, 2011.  According to court documents filed in the case, beginning as early as about 2007, Shih conspired with a company operating in Dubai, UAE, and Tehran, Iran, to procure U.S.-origin computers through Sunrise and export those computers from the United States to Iran, through Dubai, without first obtaining a license or authorization from OFAC.

 

Specifically, in April 2010, the defendants caused the illegal export of 368 units of computer-related goods to Dubai, which were later sent to Iran.  Later that month, the defendants caused the illegal export of 158 additional units of computer-related goods to Dubai, which were later sent to Iran.  The defendants subsequently caused an additional 185 units of computer-related goods to be illegally exported to Iran via Dubai.

 

SOURCE: DOJ

Tags: IEEPA, Sunrise Technologies

Comments: Leave a comment

 

“THAT EXPLAINS THE $2,000 CHARGE ON MY VISA FOR KATY PERRY TICKETS” 21 Year Old Identity Thief Gets 14 Years for Selling Counterfeit Credit Cards Resulting in $3Million+ in Losses

By TechTradeAttorney posted in Intellectual Property on Friday, October 14, 2011

Tony Perez III was sentenced to 14 years in prison for operating an online business that sold counterfeit credit cards encoded with stolen account information.  In addition to his prison term, Perez was ordered to pay $2.8 million in forfeiture and a $250,000 fine and to serve three years of supervised release.  Perez pled guilty on April 4, 2011, to one count of wire fraud and one count of aggravated identity theft.

In his plea, Perez admitted that he ran an online business that sold counterfeit credit cards encoded with stolen account information.  Perez utilized multiple online personas in criminal “carding forums,” Internet discussion groups set up to facilitate buying and selling stolen financial account information and other goods and services to promote credit card fraud.  In these forums and in other electronic communications over the Internet, Perez regularly purchased or received stolen credit card account information.

U.S. Secret Service special agents executing a search warrant in June 2010 at Perez’s apartment found a counterfeit credit card manufacturing operation and nearly 21,000 stolen credit card numbers and related information in his computers and email accounts.   Credit card companies have identified thousands of fraudulent transactions using the card numbers found in Perez’s possession, totaling more than $3 million.

 

SOURCE: DOJ

Tags: Counterfeit Credit Card manufacturing operation

Comments: Leave a comment

 

FLOWSERVE GETS “SERVED” Texas Firm to Pay $2.5 Million to Settle 288 Charges of Unlicensed Exports and Reexports

By TechTradeAttorney posted in International IP on Tuesday, October 11, 2011

Flowserve Corporation and ten of its foreign affiliates have agreed to pay a civil penalty totaling $2.5 million to settle 288 charges for violating the Export Administration Regulations by making unlicensed exports and reexports of pumps, valves and related components to Iran and Syria and other countries. Flowserve is headquartered in Irving, Texas, and is a supplier of goods and services to the oil, gas, chemical, and other industries.

BIS alleged that between 2002 and 2008, Flowserve and six of its foreign affiliates made unlicensed exports and reexports to a variety of countries, including China, Singapore, Malaysia and Venezuela, of items classified under Export Control Classification Number 2B350 and controlled for reasons of chemical and biological weapons proliferation. BIS also alleged that six of Flowserve’s foreign affiliates caused the transshipment of EAR99 items to Iran and/or the reexport of EAR99 items to Syria without the required U.S. Government authorization.

In a related case, the Department of Treasury’s Office of Foreign Assets Control (OFAC) settled charges with Flowserve alleging a total of 58 violations of its Iranian, Cuban and Sudanese sanctions programs. Flowserve agreed to pay a $502,408 civil penalty to resolve the OFAC charges.

 

“FLOWSERVE voluntarily disclosed the export violations which led to the above-referenced penalties.”

SOURCE: BIS

Tags: Export Administration Regulations, Flowserve Corporation, OFAC

Comments: 1

 

“WAIT – ‘LEGITIMATE’ FASHION SALES REPS DON’T SELL OUT OF THE BACK OF AN IMPALA?” Virginia Store Owner Arrested for Selling Counterfeit Goods

By TechTradeAttorney posted in Trade & Technology Law on Monday, October 10, 2011

Belal Amin Alsaidi, the owner of two retail stores was arrested on charges related to his alleged sale of counterfeit goods.  Alsaidi was charged with one count of conspiracy and three counts of trafficking in counterfeit goods.  Between May 2007 and April 2009, Alsaidi allegedly purchased apparel and shoes that he knew were counterfeit from an individual in New York and then sold this merchandise at his two stores in Petersburg.  The indictment alleges that he sold goods bearing fake trademarks for companies such as Nike, NFL, Lacoste, True Religion and Coogi.

 

The conspiracy charge carries a maximum penalty of five years in prison and a $250,000 fine.  Each count of trafficking in counterfeit goods carries a maximum penalty of 10 years in prison and a $2 million fine.   The indictment also seeks forfeiture of profits from illicit trafficking in counterfeit goods as well as the seizure of the goods.

SOURCE: DOJ

Tags: counterfeit goods, fake trademarks

Comments: Leave a comment

 

 

SOURCE: DOJ

Tags: Honduran bribes, Inc. FCPA, Latin Node

Comments: Leave a comment

 

NINJAVIDEO FOUNDER NOT STEALTH ENOUGH

By TechTradeAttorney posted in Intellectual Property on Thursday, October 6, 2011

Matthew David Howard Smith, 23, pled guilty for his role in founding a website that provided millions of users with the ability to illegally download copyright-protected movies and television programs.

Smith pled guilty to conspiracy and criminal copyright infringement. At sentencing, Smith faces a maximum penalty of five years in prison on each count.

Smith was one of the founders of NinjaVideo, which operated from February 2008 until it was shut down by law enforcement in June 2010.  He admitted that he designed many of the operational elements of the website that enabled millions of visitors to illegally download infringing copies of movies and television programs in high-quality formats.  Many of the movies offered on the website were still playing in theaters, while others had not yet been released.  While visitors to the website were permitted to download infringing content for free, they were also invited to make donations, which provided them access to private forum boards that contained a wider range of infringing material.  A premium member obtained the rights to request specific infringing content, which the NinjaVideo administrators would then locate and add to the website.

Smith admitted that he made agreements with online advertising entities to generate income for the website, and he and his co-conspirators collected more than $500,000 during the website’s two-and-a-half years of operation.

On Sept. 9, 2011, Smith was indicted along with four other alleged co-conspirators associated with NinjaVideo. The remaining defendants are scheduled for a jury trial on Feb. 6, 2012.

 

SOURCE: ICE

Tags: DVD copyright infringement, Matthew David Howard Smith, NinjaVideo

Comments: Leave a comment

 

 

Customs IP Enforcement News

By TechTradeAttorney posted in Customs IP Enforcement on Monday, October 3, 2011

$1 Million in Counterfeit Goods Seized in Detroit

More than 30,000 counterfeit items worth an estimated $1 million were seized from two warehouses in metro Detroit by U.S. Immigration and Customs Enforcement (ICE) agents and officers from the Detroit Police Department.

The seized counterfeit items include: articles of clothing, purses and wallets, winter coats and gym shoes. The estimated street value of the items is close to $1 million. If the items had sold at the Manufacturers Suggested Retail Price (MSRP) of the genuine brand merchandise, the estimated value is more than $3 million.

The seized counterfeit items represent various name brands, including Air Jordan, Gucci, Coach, Coogi, Nike, True Religion, Sean John and other designer name brands.

Counterfeiting, piracy and other intellectual property rights (IPR) violations have grown in magnitude and complexity as technology facilitates this crime, costing U.S. businesses billions of dollars in lost revenue. Industry and trade associations estimate that counterfeiting and piracy cost the U.S. economy between $200 billion and $250 billion per year, and more than 750,000 American jobs. This impact is not just on the business community. In some instances, this crime poses a direct threat to public health and safety.

 

Source: CBP/ICE

 

OFF TO THE “BIG HOUSE”: RECENT CRIMINAL IP ENFORCEMENT ACTIONS Michigan Woman Gets 2 Years for Selling Counterfeit Software

By TechTradeAttorney posted in Intellectual Property on Friday, September 30, 2011

A Michigan woman was sentenced to two years in prison for selling more than $400,000 worth of counterfeit computer software after an extensive investigation by IPR Center in Washington.

Jacinda Jones was also ordered to serve three years of supervised release following her prison term and to pay $441,035 in restitution.  Jones pleaded guilty on April 20, 2011, to one count of criminal copyright infringement.

Jones grossed more than $400,000 between July 2008 and January 2010 by selling more than 7,000 copies of pirated business software at discounted prices through the website cheapdl.com. The software had a retail value of more than $2 million and was owned by several companies, including Microsoft, Adobe, Intuit and Symantec.

Jones’ activities came to the attention of special agents with Homeland Security Investigations (HSI), who made several undercover purchases of the pirated business and utility software.

– – – – – – — —  –

Maryland Man Gets 30 Months for Counterfeit Goods Conspiracy

 

Donald H. Cone was sentenced to 30 months in prison for his role in a sophisticated conspiracy to import and sell counterfeit Cisco-branded computer networking equipment.

 

Cone was also ordered to pay $143,300 in restitution and to serve three years of supervised release following his prison term.  A federal jury convicted Cone and a co-conspirator, Chun-Yu Zhao in May 2011 after a three-week trial.

 

According to the evidence introduced at trial, Zhao, Cone and Zhao’s family members in China operated a large-scale counterfeit computer networking equipment business under the names of JDC Networking Inc. and Han Tong Technology (Hong Kong) Limited.  JDC Networking Inc. altered Cisco products by using pirated software, and created labels and packaging in order to mislead consumers into believing the products it sold were genuine Cisco products.  To evade detection, Zhao used various names and addresses in importation documents, and hid millions of dollars of counterfeit proceeds through a web of bank accounts and real estate held in the names of family members in China.

 

SOURCE:  ICE & DOJ

Tags: DOJ, ICE

Comments: Leave a comment

 

GOOGLE “D-OH!” Search Engine Goliath Forfeits $500 Million Generated by AdWords

By TechTradeAttorney posted in Customs IP Enforcement on Thursday, September 29, 2011

Online search engine Google Inc. has agreed to forfeit $500 million for allowing online Canadian pharmacies to place advertisements through its AdWords program targeting consumers in the United States, resulting in the unlawful importation of controlled and non-controlled prescription drugs into the United States.  The forfeiture, one of the largest ever in the United States, represents the gross revenue received by Google as a result of Canadian pharmacies advertising through Google’s AdWords program, plus gross revenue made by Canadian pharmacies from their sales to U.S. consumers.

An investigation by the U.S. Attorney’s Office in Rhode Island and the FDA/OCI Rhode Island Task Force revealed that as early as 2003, Google was on notice that online Canadian pharmacies were advertising prescription drugs to Google users in the United States through Google’s AdWords advertising program.  Although Google took steps to block pharmacies in countries other than Canada from advertising in the U.S. through AdWords, they continued to allow Canadian pharmacy advertisers to target consumers in the United States.  Google was aware that U.S. consumers were making online purchases of prescription drugs from these Canadian online pharmacies, and that many of the pharmacies distributed prescription drugs, including controlled prescription drugs, based on an online consultation rather than a valid prescription from a treating medical practitioner.  Google was also on notice that many pharmacies accepting an online consultation rather than a prescription charged a premium for doing so because individuals seeking to obtain prescription drugs without a valid prescription were willing to pay higher prices for the drugs.

 

Further, from 2003 through 2009, Google provided customer support to some of these Canadian online pharmacy advertisers to assist them in placing and optimizing their AdWords advertisements, and in improving the effectiveness of their websites.

In addition to requiring Google to forfeit $500 million, the agreement also sets forth a number of compliance and reporting measures, which must be taken by Google in order to insure that the conduct described in the agreement does not occur in the future.

 

The investigation of Google had its origins in a separate, multimillion-dollar financial fraud investigation unrelated to Google, the main target of which fled to Mexico.  While a fugitive, he began to advertise the unlawful sale of drugs through Google’s AdWords program.  During the ensuing investigation of Google, the government established a number of undercover websites for the purpose of advertising the unlawful sale of controlled and non-controlled substances through Google’s AdWords program.

 

SOURCE: DOJ

Tags: AdWord, Canadian Pharmacy Ads, Google, drug importation

Comments: Leave a comment

 

“FLOAT LIKE A BUTTERFLY, STING LIKE . . . I.C.E. ?! Website Operator Arrested for Streaming Copyrighted Sporting Events

By TechTradeAttorney posted in Intellectual Property on Wednesday, September 28, 2011

Mohamed Ali, 19, was taken into custody and charged with one count of criminal infringement of a copyright. He was the operator of HQ-STREAMS.COM and HQ-STREAMS.NET. Both of those domain names were seized by HSI on Feb. 1, 2011, as part of an ongoing HSI investigation into websites that illegally streamed copyrighted sporting telecasts and pay-per-view events.

The investigation into Ali revealed he made more than $6,000 in profits from online merchants who paid subscription fees to view copyrighted material. Since the seizure, both sites have received more than 50,000 hits combined.

From approximately February 2010 to January 2011, Mohamed Ali used HQ-STREAMS.COM and HQ-STREAMS.NET to allegedly infringe on copyrighted material from the World Wrestling Entertainment (WWE), Ultimate Fighting Championship and (UFC) and boxing events for purposes of commercial advantage and private financial gain.

Visitors to HQ-STREAMS.COM and HQ-STREAMS.NET paid a subscription fee of $6, $12 and up to $25 to click on one of a number of links to begin the process of downloading or streaming illegal broadcasts of sporting events to their computers. During the investigation leading to the Feb. 1, 2011, seizures, HSI agents downloaded portions of live and taped copyrighted telecasts of these events from HQ-STREAMS.COM and HQ-STREAMS.NET.

SOURCE: ICE

Tags: HSI, ICE, illegal streamed sporting events

Comments: Leave a comment

 

Transshipment is a routine and growing part of legitimate world trade with logistical benefits, but also can be used illegally to disguise the actual country of ultimate destination. Transshipment practices may also create a risk that items are diverted to unauthorized end-users or end-uses.

The following new best practices will help exporters, re-exporters, freight forwarders and other parties to comply with US export control regulations and laws and augment BIS’s Export Management and Compliance Guidelines. BIS is encouraging industry to:

•              Pay heightened attention to BIS’s Red Flag Indicators and communicate red flag concerns internally. 

•              Seek to utilize only those trade facilitators and freight forwarders that administer sound export control management and compliance programs that include transshipment trade best practices.

•              Obtain detailed information on the credentials of foreign customers to assess diversion risk.

•              For routed transactions, establish and maintain a trusted relationship with parties to mitigate risks.

•              Communicate export control classification and destination information to end-users and consignees on government and commercial export documentation.

•              Provide the ECCN or the EAR99 classification to freight forwarders for all export transactions and report the classifications in the Automated Export System (AES), if applicable.

•              Use information technology to the maximum extent feasible to augment “know your customer” and other due-diligence measures in combating the threats of diversion and increase confidence that shipments will reach authorized end-users for authorized end-uses.

 

This set of best practices, aimed at U.S industry, encourages the industry to develop stronger internal compliance programs, conduct focused outreach, and raise awareness of export control obligations.

The 2011 “Best Practices for Preventing Unlawful Diversion of U.S. Dual-Use Items Subject to the Export Administration Regulations, Particularly through Transshipment Trade” are posted on the BIS website http://www.bis.doc.gov/complianceandenforcement/bestpractices.htm

 

SOURCE: BIS

Tags: BIS, Best Practices

Comments: Leave a comment

 

In 2007 and 2008, Davis also procured various materials from a New Jersey company – including adhesive primer, peroxide, and aerosols – that were sent to Iran in multiple shipments between August 2007 and January 2008. The shipments were made by the New York-based freight forwarding company, via another country. At least one of the shipper’s export declarations filed by the New York freight forwarder falsely identified The Netherlands as the ultimate destination. Davis had instructed an employee of the New York freight forwarder to falsely list The Netherlands as the country of ultimate destination for the exports. The address in The Netherlands was a post office box.

In a January 2008 email regarding the shipments, Davis noted that, “99% of these goods were destined to be send to Teheran [sic]/Iran, which was and still is a very difficult destination due to political reasons.”

If convicted of the charge, Davis faces a maximum potential penalty of 20 years in prison and a $1 million fine.

Source: BIS

Tags: Amsterdam Export Conspiracy, BIS

Comments: Leave a comment

 

CUSTOMS IP ENFORCEMENT NEWS

By TechTradeAttorney posted in Customs IP Enforcement on Tuesday, September 20, 2011

The CBP strategic approach to intellectual property rights enforcement is multi-layered and includes seizing counterfeit goods at the border, pushing the border outward through audits of infringing importers and cooperation with our international trading partners, and partnering with industry and other government agencies to enhance these efforts.  CBP officers and import specialists are aggressively working together to intercept shipments containing counterfeit and pirated items.

Recent CBP IP counterfeit seizures at the US border include:

 

– Laredo CBP Seize $881,000 in Counterfeit DVD Players

U.S. Customs and Border Protection officers from Laredo Port of Entry on August 24th seized a shipment of DVD players valued at $881,000 that infringed on two trademarks recorded with CBP.

 

CBP officers assigned to the World Trade Bridge Export Lot targeted a shipment containing DVD players bound for export for an enforcement examination. During the examination, CBP officers discovered that the DVD players contained the DVD and Dolby Digital brand names, which are trademark recorded with CBP.

 

The merchandise seized included a combined total of 1,160 packages containing 5,800 DVD players. The estimated domestic value of the DVD players is about $113,000 and the manufacturer’s suggested retail price, if the trademark had been genuine, would have been $881,000.

 

Source: CBP

Tags: CBP, Customs IP Enforcement, DVD Players, Laredo

Comments: Leave a comment

 

BRAND/IP OWNERS ARE HOT! Top Level Domain “.XXX” Opens for Business

By TechTradeAttorney posted in Intellectual Property on Thursday, September 15, 2011

.XXX, the new sponsored top-level domain (sTLD) for the adult entertainment industry, is open for registration to brand and IP holders inside and outside of the sponsored community.

.XXX registrations begin with a 50 day Sunrise period that gives businesses both inside and outside of the adult industry an exclusive timeframe to register or exempt themselves from .XXX.

Running concurrently, Sunrise A registers interest from the sponsored adult community, while Sunrise B has been specifically designed for companies outside the adult industry.  During this time-frame, businesses have a cost-effective solution which permanently safeguards their Intellectual Property (IP) within the .XXX registry.  Sunrise applicants, using registered marks to qualify, will be required to own a subsisting trade or service mark registration of national effect.

Subrise B applicants can block their existing trademarks from .XXX registration, for a one time fee, for at least the next 10 years.

To ensure the extension is launched responsibly, each .XXX site will be scanned daily by McAfee for malware. .XXX web addresses are the only domains in the world to benefit from this as standard, making .XXX sites amongst the safest on the internet.  Every .XXX site will also come with a Metacert “electronic label” making it easier for users and parents to adjust their browser settings to choose which family members can get access to labeled adult sites.  In addition .XXX will be overseen by The International Foundation for Online Responsibility, a global non-profit entity that will serve as the policy-making body for the new extension.

For more information, please see http://www.icmregistry.com.

SOURCE: ICM Registry

Tags: Domain Names .XXX, ICM Registry

Comments: Leave a comment

 

DUDE, I’M JUST TRYING TO FINANCE MY HOME-GROWN “GLAUCOMA MEDS” International Computer Hacker / Marijuana Grower Sentenced to 13 Years

By TechTradeAttorney posted in Intellectual Property on Wednesday, September 7, 2011

Federal judges in two cases have imposed sentences totaling 13 years in prison against Kenneth Joseph Lucas, II, 27, who was the leader of the domestic arm of an international “phishing” operation that used spam emails and bogus websites to collect personal information that was used to defraud American banks.

 

In the case stemming from the phishing scheme, United States District Judge Valerie Baker Fairbank sentenced Lucas on Friday to 11 years in prison after he pleaded guilty to 49 counts of bank and wire fraud, aggravated identity theft, computer fraud, and money laundering conspiracy charges.

 

Lucas, the lead defendant in a 53-defendant indictment, returned in the fall of 2009 as part of Operation “Phish Phry,” a multinational investigation conducted in the United States and Egypt that led to charges against 100 individuals – the largest number of defendants ever charged in a cybercrime case. As a result of Operation Phish Phry, 47 people have been convicted in federal court in Los Angeles.

 

Operation Phish Phry revealed how Egyptian hackers obtained bank account numbers and related personal identification information from an unknown number of bank customers through phishing – a technique that involves sending e-mail messages that appear to be official correspondence from banks or credit card vendors. Bank customers who received the spam emails were directed to fake websites purporting to be linked to financial institutions, where the customers were asked to enter their account numbers, passwords and other personal identification information. Because the websites appeared to be legitimate – complete with bank logos and legal disclaimers – the victims did not realize that the websites were not related to legitimate financial institutions. Armed with the bank account information, members of the conspiracy hacked into accounts at two banks. Once they accessed the accounts, the individuals in Egypt coordinated transfers of funds from the compromised accounts to newly created fraudulent accounts and other accounts used as part of the scheme.

 

In the narcotics case, which resulted in an additional 2 year sentence, Lucas oversaw the construction of an indoor marijuana grow operation at his residence in 2009. After installing an irrigation system, ventilation equipment, indoor lights and fans, Lucas posted videos on YouTube that showcased the grow operation. On October 7, 2009, authorities found 100 marijuana plants in the grow room, and Lucas admitted to having grown and sold a prior crop, which netted him $45,000.

 

SOURCE: DOJ

Tags: DOJ, International phishing operation, Operation Phish Phry

Comments: Leave a comment

 

HOW DID I GET ON THE BIS “ENTITY LIST”? I RAN (and IRAQ) Six Companies Added to Entity List for Supplying Iraq and Iran with Components for Improvised Explosive Devices

By TechTradeAttorney posted in Intellectual Property on Monday, September 5, 2011

The U.S. Department of Commerce’s Bureau of Industry and Security (BIS) announced that it will add two companies in Hong Kong and four companies in Lebanon to the BIS Entity List.  The six companies are being added based on evidence that they purchased electronic components from foreign subsidiaries of U.S. firms and then resold the components to persons in Iran and Iraq.  The same components were later found in Iraq in unexploded improvised explosive devices and related materials.

 

The companies added to the Entity List are Biznest Ltd., and Yeraz Ltd. in Hong Kong and Micro Power Engineering Group, Narinco Micro Sarl, Serop Elmayan and Sons Lebanon and Serpico Offshore Sarl in Lebanon. These six companies are being added based on evidence that they have engaged in actions that are contrary to the national security or foreign policy interests of the United States.

 

SOURCE: BIS

Tags: BIS, US DOC

 

BIS ACTION SHOWS COMPANIES THAT US ANTI-BOYCOTT LAWS MEAN BUSINESS Three Companies Settle Antiboycott Charges

By TechTradeAttorney posted in Export Enforcement on Friday, September 2, 2011

Three companies have agreed to pay a total of $ 50,900 in civil penalties to settle allegations that each violated the antiboycott provisions of the Export Administration Regulations (EAR). The companies are Applied Technology Inc., Lynden Air Freight doing business as (dba) Lynden International, and Smith International Inc.

Applied Technology Inc (ATI), located in Raleigh, NC, has agreed to pay a civil penalty of $10,000 to settle two allegations that it violated the antiboycott provisions of the EAR. During 2006, ATI, in connection with a transaction involving the sale and/or transfer of goods or services (including information) from the United States to Libya, furnished prohibited information in a statement that the goods did not contain any components of Israeli origin and failed to report to the Department of Commerce the receipt of a request to engage in a restrictive trade practice or boycott, as required by the EAR.

Lynden Air Freight dba Lynden International (Lynden), located in Seattle, WA, has agreed to pay a civil penalty of $20,400 to settle three allegations that it violated the antiboycott provisions of the EAR. During 2006, in connection with transactions involving the sale and/or transfer of goods or services (including information) from the United States to Libya, Lynden’s Houston office, on three occasions, furnished prohibited information in a statement certifying that the goods were neither of Israeli origin nor contained Israeli materials.

Smith International Inc., (Smith), located in Houston, TX, has agreed to pay a civil penalty of $20,500 to settle eleven allegations that it violated the antiboycott provisions of the EAR. During 2006 through 2008, in connection with transactions involving the sale and/or transfer of goods or services (including information) from the United States to Libya and United Arab Emirates, Smith, on one occasion, agreed to refuse to do business with another person pursuant to a request from a boycotting country; on one occasion, furnished prohibited information in a statement certifying that no materials were of Israeli origin nor had Israeli content; and, on nine occasions, failed to report to the Department of Commerce the receipt of a request to engage in a restrictive trade practice or boycott or boycott, as required by the EAR.

 

SOURCE:  BIS

Tags: Applied Technology Inc, Department of Commerce, EAR, Lynden Air Freight, Lynden International, Smith International Inc.

Comments: Leave a comment

 

CHINESE COMPANY THINKS AMERICAN KIDS DON’T GET ENOUGH LEAD IN THEIR DIET: CBP Seizes Shipment of Imported Toy Jewelry

By TechTradeAttorney posted in Customs IP Enforcement on Wednesday, August 31, 2011

U.S. Customs and Border Protection, working closely with the U.S. Consumer Product Safety Commission, seized last month a shipment of imported children’s toy jewelry for hazardous levels of lead. The manufacturer’s suggested retail price of the shipment was approximately $340,000.

 

The shipment was examined by CBP officers at the port of Chicago, in coordination with the local CPSC compliance investigator. CBP seized the shipment when a sample tested by CPSC was found to contain an amount of lead that exceeded levels allowed by CPSC requirements for children’s products.

 

The shipment of toy jewelry coming from China was considered high-risk and had been targeted by the Import Safety Commercial Targeting and Analysis Center in Washington, D.C.

 

The Consumer Product Safety Improvement Act of 2008 requires importers to test and certify that imports of children’s products are in compliance with CPSC requirements. It is unlawful to import into the U.S. any children’s product that contains lead with more than 90 parts per million of lead paint or more than 300 parts per million of total lead content.

 

CBP and CPSC work in close collaboration to help protect public safety by examining, sampling and testing imported products that may be hazardous. The CTAC combines resources and manpower from several government agencies–in addition to CBP and CPSC–to protect the American public from harm caused by unsafe imported products.

 

Source: CBP

Tags: US Consumer Product Safety Commission, US Customs and Border Protection

Comments: Leave a comment

 

COUNTERFEIT DRUGS ON I.C.E.: National IPR Center Takes Down 22 Drug Counterfeiters

By TechTradeAttorney posted in Intellectual Property on Monday, August 29, 2011

As counterfeit drugs have hit the market, ICE has worked even more diligently to get these drugs out of the stream of commerce and make sure that individuals and organizations that manufacture and market counterfeit drugs are prosecuted.  In the last 18 months, investigations conducted by ICE Homeland Security Investigations (HSI), in concert with industry partners and the Food and Drug Administration (FDA), resulted in 22 criminal convictions for individuals involved in counterfeit pharmaceuticals.

 

One of ICE HSI’s most significant cases involved Houston resident Kevin Xu. Xu’s company sold counterfeit drugs online and distributed them throughout the United States and United Kingdom, primarily through the mail and courier services. Legitimate wholesalers began selling these counterfeit drugs, not realizing that the products weren’t the real thing. Ultimately, this led to three recalls of nearly $9 million of medication in the United Kingdom. Xu was prosecuted in 2009, ordered to serve 78 months in prison and pay restitution of $1.28 million.

 

SOURCE: ICE

Tags: FDA, HSI, ICE, National IPR Center, counterfeit drugs

Comments: Leave a comment

 

ARMOR HOLDINGS UNABLE TO SHIELD ITSELF FROM FCPA PENALTY: Company to Pay $15+ Million FCPA Penalty

By TechTradeAttorney posted in FCPA on Friday, August 26, 2011

Armor Holdings Inc. has entered into an agreement with the Department of Justice to pay a $10.29 million penalty to resolve violations of the Foreign Corrupt Practices Act (FCPA).  The company manufactured security products, vehicle armor systems, protective equipment and other products primarily for use by military, law enforcement, security and corrections personnel.   On July 31, 2007, Armor was acquired by BAE Systems Inc. and is currently a subsidiary of BAE.

 

According to the agreement, Armor accepts responsibility for its subsidiary’s payment of more than $200,000 in commissions to a third-party sales agent, a portion of which it knew was to be passed on to a U.N. procurement official to induce the official to award two separate U.N. contracts to Armor’s subsidiary.   The contracts were for the sale of approximately $6 million of body armor.   Armor also acknowledged that it falsely recorded the commission payments on its books and records.   In addition, Armor admitted that it kept off its books and records approximately $4.4 million in additional payments to agents and other third-party intermediaries used by its Products Group to assist it in obtaining business from foreign government customers.

Armor acknowledged that it failed to devise and maintain an appropriate system of internal accounting controls.

 

In a related matter, Armor reached a settlement today with the U.S. Securities and Exchange Commission (SEC) and agreed to pay more than $5.69 million in disgorgement of profits, including pre-judgment interest, and a civil money penalty.

 

The Justice Department’s agreement recognizes Armor’s complete voluntary disclosure of the conduct; its internal investigation and cooperation with the department and the SEC; the fact that the conduct took place prior to the acquisition of Armor by BAE; and Armor’s extensive remedial efforts undertaken before and after its acquisition by BAE.  Due to Armor’s implementation of BAE’s due diligence protocols and review processes, its application of BAE’s compliance policies and internal controls to all Armor businesses, its extensive remediation and improvement of its compliance systems and internal controls, as well as the enhanced compliance undertakings included in the agreement, Armor is not required to retain a corporate monitor.

SOURCE: DOJ

Tags: Armor Holdings, BAE Systems Inc., Department of Justice, FCPA, Inc, SEC, military

Comments: Leave a comment

 

CRIMINAL’S NAME WAS AN OBVIOUS GIVEAWAY: Hacker Gets 10 Years for Stealing 675,000 Credit Card Numbers – $36 Million in Losses

By TechTradeAttorney on Wednesday, August 24, 2011

Rogelio Hackett Jr., 25, of Lithonia, Ga., was sentenced to 120 months in prison for trafficking in counterfeit credit cards and aggravated identity theft.

Hackett was also ordered to pay a $100,000 fine.  According to court documents, U.S. Secret Service special agents executing a search warrant in 2009 at Hackett’s home found more than 675,000 stolen credit card numbers and related information in his computers and email accounts.   Hackett admitted in a court filing that since at least 2002, he has been trafficking in credit card information he obtained either by hacking into business computer networks and downloading credit card databases, or by purchasing the information from others using the Internet through various “carding forums.”   These forums are online discussion groups used by “carders” to traffic in credit card and other personal identifying information.

 

Hackett also admitted that he sold credit card information, manufactured and sold counterfeit plastic cards, and used the credit card information to acquire gift cards and merchandise.   According to court documents, credit card companies have identified tens of thousands of fraudulent transactions using the card numbers found in Hackett’s possession, totaling more than $36 million.

 

SOURCE: DOJ

Tags: Department of Justice, counterfeit credit cards

Comments: Leave a comment

 

WHAT, NO “8 TRACKS”? Jury Convicts Member of Counterfeit DVD and CD Trafficking Group

By TechTradeAttorney posted in Intellectual Property on Monday, August 22, 2011

Charles Ndhlovu was convicted for his participation in a counterfeit DVD and CD ring.  A federal jury convicted Ndhlovu of one count of trafficking in counterfeit labels and three counts of criminal copyright infringement.  Ndhlovu and his co-defendants were originally indicted in May 2009.

 

The jury returned its verdict after three days of trial and six hours of deliberation.  The evidence at trial established that other defendants named in the May 2009 indictment rented space at a warehouse on Metropolitan Parkway in Atlanta, where they “burned,” or copied DVDs and CDs and produced counterfeit labels and packaging.  According to the evidence at trial, Ndhlovu purchased labels and blank digital media for use in manufacturing the infringing DVD and CD copies of copyrighted material and distributing them to retail outlets.  The entire criminal enterprise was responsible for the distribution of illegal products that, if legitimate, would have been valued at more than $12 million.  The charges each carry a maximum sentence of five years in prison.  In addition, the defendant faces a fine of up to $250,000 on each count.

 

SOURCE: DOJ

Tags: CD Trafficking, DVD trafficking

Comments: Leave a comment

 

JUST DON’T DO IT: Nike Sues Importer Over 16 Trademarks for $32 Million

By TechTradeAttorney posted in Customs IP Enforcement on Friday, August 19, 2011

Nike filed a lawsuit in July against Eastern Ports Customs Brokers, Inc. and various John Does, Jane Does and XYZ Companies for claiming trademark infringement, false designation of origin, trademark dilution, importation of goods bearing infringing marks and violation of the tariff act.

 

Nike claims that the defendants filed fraudulent entry documents with U.S. Customs and Border Protection, which allowed for the importation of 20,320 pairs of counterfeit Nike footwear.  The entry documents falsely described and identified the import to contain ceramic tile.  The counterfeit footwear, valued at $688,586.00 was seized by Customs.

 

Among other relief, Nike seeks statutory damages in the amount of $2 Million per mark for each type of good in connection with which Defendant used counterfeits of Nike’s 16 trademarks.

 

SOURCE: US District Court – District of New Jersey

Tags: Nike Lawsuits, Nike Trademarks, US District Court of New Jersey

Comments: Leave a comment

 

The Buck Stops Here: CEO Fined for Export Violations

By TechTradeAttorney posted in Export Enforcement on Wednesday, August 17, 2011

BIS announced that Mohammed El-Gamal, also known as Moe Zayed El-Gamal, President and CEO of Applied Technology Inc. (ATI), located in Kenansville, NC, has agreed to pay a civil penalty of $340,000 to settle allegations that he committed four violations of the Export Administration Regulations (EAR) related to the export of controlled networking equipment to Libya without the required export licenses.

BIS alleged that on three occasions during June and July 2006 El-Gamal sent networking equipment, controlled for Anti-Terrorism reasons, to the General Electric Company of Libya, without the required Department of Commerce licenses.  In connection with one of these shipments, agents searched an ATI employee flying from Detroit, MI, to Libya and found three computer cards hidden in his carry-on luggage.  In addition, BIS alleged that El-Gamal made false or misleading statements to agents in the course of the investigation.

On February 14, 2011, El-Gamal pleaded guilty in the District Court for District of Columbia, to one count of Material False Statements.  On May 16, 2011, he was sentenced by United States District Judge Colleen Kollar-Kotelly to pay a fine of $5,000, to perform 100 hours of community service, and to serve two years supervised probation.  The judge also ordered El-Gamal to provide monthly reports to the Department of Commerce regarding his export activities during the probationary period.
 To settle the administrative case, El-Gamal agreed to conduct a compliance audit of ATI covering the first year of exports following the settlement, put in place a compliance program, attend BIS export compliance training, and complete an audit for past exports.

 

SOURCE: BIS

Tags: Applied Tecnology Inc. CEO, BIS, Export Violations

Comments: Leave a comment

 

Eight Men Out: Added to “Bad Guys” List for Export Violations

By TechTradeAttorney posted in Export Enforcement on Monday, August 15, 2011

BIS recently announced that it added eight parties to the BIS Entity List that are associated with an international procurement network supplying Iran with U.S. military aircraft components.

BIS added the following companies and individuals to the list: in France, Aerotechnic France SAS, Luc Teuly and Philippe Sanchez; in Iran, Hassan Seifi, Reza Seifi and Sabanican Company; and in the United Arab Emirates, Aletra General Trading and Syed Amir Ahmed Najfi.  These eight entities were added based on evidence that they have engaged in actions that could enhance the military capability of Iran, a country designated by the U.S. Secretary of State as having repeatedly provided support for acts of international terrorism.  These entities are also added because their overall conduct poses a risk of ongoing EAR violations.

The additions of these eight companies to the Entity List is part of a coordinated U.S. Government enforcement action against this procurement network.  The Department of Justice announced that these same eight persons, and others, have been indicted in the Middle District of Georgia for their alleged roles in a conspiracy to illegally export military components for fighter jets and attack helicopters from the United States to Iran.

 

SOURCE:  BIS

 

Tags: BIS, Export Violations, Iran

Comments: Leave a comment

 

He’ll be the Best-dressed Man in Prison: Baltimore Man Receives 30 Year Sentence for Selling Counterfeit Goods

By TechTradeAttorney posted in Intellectual Property on Friday, August 12, 2011

A Maryland man was sentenced to 30 months in prison followed by three years of supervised release for selling counterfeit items with brand names such as Coach, Louis Vuitton, Dolce & Gabbana, Prada, Chanel, Gucci, Polo and Nike. The sentence is the result of an investigation conducted by U.S. Immigration and Customs Enforcement’s (ICE) Homeland Security Investigations (HSI), Maryland State Police and Baltimore County Police Department.

Marvin Anthony Johnson, 47, of Baltimore, was sentenced by U.S. District Judge Catherine C. Blake for trafficking in counterfeit goods. Johnson is also required Johnson to forfeit $23,957 in unlawful proceeds seized by law enforcement in September 2010.

According to his guilty plea, Johnson owned and operated a retail store known as “Prestigious Fashions” located at 501-A Pennsylvania Avenue in Baltimore; a sales booth known as “Marvin’s Prestigious” located within the North Point Flea Market on North Point Road in Baltimore; and another sales booth within Hunter’s Sales Barn, located on Jacob Tome Memorial Highway in Port Deposit, Md. From July to Sept. 3, 2010, Johnson sold counterfeit luxury apparel and accessories from those stores that bore trademarks identical to trademarks used by Coach, Louis Vuitton, Dolce & Gabbana, Prada, Chanel, Gucci, Polo and Nike.

In August 2010, undercover Baltimore County Police officers twice purchased counterfeit goods from Johnson at the two sales booths. Johnson said the items were “fake” and also told undercover officers that he hosts “purse parties” in order to sell the counterfeit items. Baltimore County police officers observed Johnson selling other counterfeit goods.

On Sept. 2 and 3, 2010, law enforcement executed search warrants at six locations and vehicles associated with Johnson and seized approximately 3,600 items of counterfeit luxury wearing apparel and accessories with the above stated brand names, among others. The lost retail value, or infringement amount, of the goods seized is estimated to be between $400,000 and $1 million. Officers also seized approximately $23,957 in cash. Also located in Johnson’s van was a cease and desist letter from Coach, directed at the owners/operators of a flea market, and outlines the illegalities of selling counterfeit goods. Johnson’s handwriting appeared on the back of the letter in which he made notations regarding further sales of counterfeit goods.

 

SOURCE: ICE

 

Tags: Homeland Security Investigations, Immigration and Customs Enforcement, counterfeit items

 

 

Golfers must avoid Traps and Hazards

By TechTradeAttorney posted in Customs IP Enforcement on Wednesday, August 10, 2011

U.S. Customs and Border Protection is seizing an increasing number of counterfeit golf products ordered by consumers over the Internet. Seizures of counterfeit golf goods have increased by 33 percent from fiscal years 2009 to 2010 and 37 percent in 2009 compared to 2008.

 

Today, the typical golf seizure consists of a set of clubs, a bag, head covers, and maybe a cap. The items usually arrive from China via mail or courier addressed to an individual in the U.S.

Through May of fiscal year 2011, CBP has made 265 counterfeit golf seizures with a total domestic value of $192,000, and an estimated manufacturer’s suggested retail price of $589,000.

Traditionally, counterfeit golf products entered the country inside sea containers with other goods. But with the rising popularity of internet shopping, CBP has increasingly seen the ability of counterfeiters to sell directly to consumers. Consumers looking for less expensive products are going online, ordering directly from Chinese suppliers, and shipping the goods home.

To avoid the purchase of counterfeit golf equipment, consumers should consider the following tips:

•              Purchase from a reputable dealer

•              Contact brand owner for list of authorized dealers

•              Be skeptical of “too good to be true” deals

•              Be aware of return policy if not satisfied with product

•              Be aware of money-back policies

•              Research legitimacy of foreign websites

•              Request references

•              If purchasing from an overseas retailer, know import requirements or contact a local CBP office.

 

SOURCE: CBP

Tags: US Customs and Border Protection, counterfeit golf products

Comments: Leave a comment

 

Stopping Counterfeits: A Matter of National Security

By TechTradeAttorney posted in Customs IP Enforcement on Monday, August 8, 2011

The National Intellectual Property Rights Coordination Center (IPR Center) has announced “Operation Chain Reaction,” a new comprehensive initiative targeting counterfeit items entering the supply chains of the Department of Defense (“DoD”) and other U.S. government agencies.

 

Nine of the 18 IPR Center members are participating in “Operation Chain Reaction.”They include:

•                              U.S. Immigration and Customs Enforcement (ICE), Homeland Security

Investigations (HSI)

•                              U.S. Customs and Border Protection (CBP)

•                              Federal Bureau of Investigation

•                              Naval Criminal Investigative Service

•                              Defense Criminal Investigative Service (DCIS)

•                              U.S. Army Criminal Investigative Command, Major Procurement Fraud Unit

•                              General Services Administration, Office of Inspector General

•                              Defense Logistics Agency, Office of Inspector General

•                              U.S. Air Force, Office of Special Investigations

 

While individual agencies have focused in the past on counterfeit and misbranded items entering the federal supply chain, “Operation Chain Reaction” is the first time that IPR Center participants have come together to collectively address this ongoing problem.

 

Some examples of recent investigations involving counterfeit products entering the federal supply chain include:

 

An investigation uncovered the purchase of counterfeit Cisco Gigabit Interface Converters by an individual – since sentenced to prison – who intended to sell them to the Department of Defense for use by the Marine Corps to transmit troop movements, relay intelligence and maintain security for a military base.

 

An investigation uncovered a global procurement and distribution network based in California that provided counterfeit integrated circuits to various governmental agencies, including the military and prime DoD contractors. Agents conducted undercover purchases from individuals within the company under official Navy contracts and were provided counterfeits for weapons platforms.

 

An investigation identified a Florida-based electronics broker providing counterfeit integrated circuits to DoD prime contractor fulfilling a Navy contract for components destined for implantation into ship and land-based antenna.

 

The IPR Center is one of the U.S. government’s key weapons in the fight against criminal counterfeiting and piracy. As a task force, the IPR Center uses the expertise of its 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.

 

ICE HSI investigated nearly 2,000 intellectual property cases last fiscal year, which resulted in 365 arrests, 216 indictments and 170 convictions. ICE HSI and CBP also made 19,959 IPR seizures topping $1.4 billion MSRP in FY 2010 – a 34 percent increase from the previous fiscal year. Computer hardware was one of the top commodities seized, increasing five-fold from FY 2009 to FY 2010, including a $2.3 million ICE HSI seizure that included counterfeit military-grade semi-conductors.

 

To report IP theft or to learn more about the IPR Center, visit http://www.iprcenter.gov/.

 

SOURCE: ICE

Tags: IPR Infringement, Immigration and Customs Enforcement

Comments: Leave a comment

 

CUSTOMS IP ENFORCEMENT NEWS

By TechTradeAttorney posted in Customs IP Enforcement on Friday, August 5, 2011

The CBP strategic approach to intellectual property rights enforcement is multi-layered and includes seizing counterfeit goods at the border, pushing the border outward through audits of infringing importers and cooperation with our international trading partners, and partnering with industry and other government agencies to enhance these efforts.  CBP officers and import specialists are aggressively working together to intercept shipments containing counterfeit and pirated items.

Recent CBP IP counterfeit seizures at the US border include:

 

-Los Angeles, Ca – $14.3 Million Worth of Fake Designer Clothing Seized

U.S. Customs and Border Protection import specialists and officers assigned to the Los Angeles/Long Beach seaport discovered and seized 47,184 pieces of clothing in violation of Chanel, Polo, Gucci, Coogi and Dior trademarks in three shipments arriving from China over the past three months.

 

The combined manufacturer’s suggested retail price for all three shipments is $14.3 million with a combined domestic value of $173,034.56.

 

In fiscal year 2010, CBP at Los Angeles/Long Beach seaport accomplished a record breaking year with 863 trade seizures with a domestic value exceeding $34 million. This is a 42 percent increase in the number of seizures from fiscal year 2009.

 

– Louisville, IL CBP Seize Counterfeit High End Designer Watches

CBP recently seized a shipment of counterfeit watches with a Manufacture’s Suggested Retail Price of $933,318 at the UPS express consignment facility. The shipment, imported from China, infringed upon the intellectual property rights of Armani, Cartier, Lacoste and Breitling corporations.

 

– Boston CBP Seize $87,000 in Music CDs

U.S. Customs and Border Protection officers at the port of Boston identified and seized a shipment of counterfeit music CDs for intellectual property rights violations. The suggested retail price of the pirated CDs bearing images of the Marvel Entertainment character is estimated to be $87,664.

 

On May 23, CBP officers targeted a shipment containing 2,925 boxed sets of music CDs at the Container Examination Station for an enforcement examination. During the examination, CBP officers observed the boxes bearing the image of what appeared to be Marvel Entertainment’s “Dr. Doom” character, which is a trademark recorded with CBP.

 

After further inspection the goods were detained for a thorough investigation. When CBP sought a letter of authorization for use of the CD trademark from the importing party, the importer signed and submitted a CBP Form 4607, Notice of Abandonment. Subsequently, all 183 boxes were seized for IPR violations on June 20.

 

Source: CBP

Tags: CBP, Customs IP Enforcement News

Comments: Leave a comment

 

BIS Shoots down Airplane Exporter – Imposes Full $15 Million in Penalties

By TechTradeAttorney posted in Intellectual Property on Wednesday, August 3, 2011

For allegedly failing to comply with the terms of a settlement agreement related to export violations, Balli Group, PLC and Balli Aviation (collectively, “Balli”) have been ordered to pay the full amount due on a record $15 million export penalty.

The U.S. Department of Commerce’s Bureau of Industry and Security (BIS) charged that between 2005 and 2008 Balli conspired with an Iranian airline to export or re-export U.S.-origin Boeing 747 aircraft to Iran without the required U.S. Government authorization.  BIS also charged that from July 2008, through September 2008, Balli took actions prohibited by a BIS order temporarily denying its export privileges. Balli conducted negotiations with persons, including another person subject to the Temporary Denial Order, concerning financing, receiving and/or using three additional U.S.-origin aircraft that had been exported from the United States and are subject to the EAR.

BIS and the Treasury Department’s Office of Foreign Assets Control (OFAC) entered into an agreement with Balli in February 2010, with civil penalties totaling $15 Million, regarding allegations that Balli conspired to export or re-export commercial aircraft from the United States to Iran in violation of the Export Administration Regulations (EAR) and the Iranian Transactions Regulations (ITR).  Of the total penalty, $2 Million was suspended, and the remainder was to be paid in installments.

Citing Balli’s failure to abide by the terms of the arrangement, BIS recently issued an order revoking the suspension of a $2M civil penalty and invoking the acceleration clause for the remaining $5.2 Million (which was originally to be paid in installments).  The order made a combined $7.2 Million payment due within 15 days.  This case represents the largest civil penalty ever imposed by BIS.

In his revocation order, Assistant Secretary Mills stated: “[Balli] failed in my judgment to arrange its business and financial affairs in such a manner as to ensure compliance with its civil penalty payment obligations – obligations that were imposed, moreover, as a result of Balli’s egregious conduct that violated U.S. export control laws and provided support to Iran and its proliferation efforts.”

SOURCE: BIS

Tags: None

Comments: Leave a comment

 

Former U.S. CEO Pleads Guilty to Foreign Bribery Conspiracy

By TechTradeAttorney posted in FCPA on Monday, August 1, 2011

Jorge Granados, the former chief executive officer of Miami-based telecommunications company Latin Node Inc. (LatiNode), pled guilty to conspiracy to violate the anti-bribery provisions of the Foreign Corrupt Practices Act (FCPA) by conspiring to pay bribes to government officials in Honduras.  To date, four former senior executives of LatiNode have pleaded guilty to conspiring to pay bribes to the Honduran officials.

LatiNode provided wholesale telecommunications services using Internet protocol technology to countries throughout the world, including Honduras.   In December 2005, LatiNode learned that it was the sole winner of an “interconnection agreement” with Empresa Hondureña de Telecomunicaciones (Hondutel), the wholly state-owned telecommunications authority in Honduras.  The agreement permitted LatiNode to use Hondutel’s telecommunications lines in order to establish a network between Honduras and the United States, and to provide long distance services between the two countries.

 

Granados and other LatiNode executives agreed to a secret deal to pay bribes to Hondutel officials, including the general manager, a senior attorney for Hondutel and a minister of the Honduran government who became a representative on the Hondutel Board of Directors.  Between September 2006 and June 2007, LatiNode executives paid more than $500,000 in bribes to the Honduran officials, concealing many of the payments by laundering the money through LatiNode subsidiaries in Guatemala and to accounts in Honduras controlled by the Honduran government officials.  Granados admitted that he authorized bribe payments.

 

At sentencing, scheduled for Aug. 22, 2011, Granados faces up to five years in prison and a fine of the greater of $250,000, or twice the value gained or lost.

SOURCE: DOJ

Tags: FCPA, Intellectual Property, telecommunications bribery

Comments: Leave a comment

 

Apple Targeted Once Again in Section 337 Investigation

By TechTradeAttorney posted in Intellectual Property on Friday, July 29, 2011

Nokia Corporation of Finland; Nokia, Inc., of White Plains, NY; and Intellisync Corporation of White Plains, NY filed a complaint with the U.S. International Trade Commission (USITC) requesting an investigation pursuant to Section 337. The complaint alleges violations of Section 337 of the Tariff Act of 1930 in the importation into the United States and sale of certain electronic devices, including mobile phones, mobile tablets, portable music players, and computers, and components thereof that infringe patents asserted by the complainants.

 

The USITC has identified the following as respondents in this investigation:

Apple Inc. of Cupertino, CA

 

By instituting an investigation, the USITC has not yet made any decision on the merits of the case. One of the USITC’s six administrative law judges (ALJ) will make an initial determination as to whether there is a violation of Section 337; that initial determination is subject to review by the Commission. The USITC will set a target date for when the investigation will be complete within the first 45 days of the investigation. USITC remedial orders in Section 337 cases are effective when issued and become final 60 days after issuance unless disapproved for policy reasons by the U.S. Trade Representative within that 60-day period.

 

A Section 337 victory for a party could possibly mean a complete U.S. ban on the importation of the infringing product, by stopping the affected products at the border.

 

SOURCE: USITC

Tags: 337 Investigation, Apple, IP Law

Comments: Leave a comment

 

U.S. Firms Report Losing Sales, Profits, Royalties, and Brand Reputations Due to Intellectual Property Infringement in China

By TechTradeAttorney posted in Intellectual Property on Wednesday, July 27, 2011

Despite broad success in the China market, many U.S. companies have reported that the infringement of their intellectual property rights (IPR) in China and China’s indigenous innovation policies have undermined their competitive positions, reports the U.S. International Trade Commission (USITC).

In response to a USITC survey, many U.S. firms reported lost sales, profits, and license and royalty fees, as well as damaged brand names and product reputation, as a result of IPR infringement in China, according to the report. U.S. firms reported losses associated with China’s indigenous innovation policies as well but noted greater concern about the future implications of these evolving policies.

The report, the second of two reports on IPR infringement and indigenous innovation policies in China and their effects on the U.S. economy and employment, was released today. The USITC, an independent, nonpartisan, factfinding federal agency, conducted the studies at the request of the U.S. Senate Committee on Finance.

As requested, the Commission report estimates the size and scope of reported Chinese IPR infringement; provides a quantitative analysis of the effect of IPR infringement in China on the U.S. economy and its sectors; and assesses the effects of China’s indigenous innovation policies on the U.S. economy and employment. Highlights of the report follow.

•              Based on survey information, the USITC estimates that U.S. IP-intensive firms’ losses from IPR infringement in China were approximately $48 billion in 2009. The survey was sent to over 5,000 U.S. firms in the IP-intensive part of the U.S. economy, which is the sector most likely to be affected by IPR infringement in China. Firms in this segment of the U.S. economy also spent approximately $4.8 billion in 2009 to address possible Chinese IPR infringement in 2009. These figures may be understated because they do not reflect losses incurred by firms in the rest of the economy.

 

•              Firms reported that among the losses they incurred as a result of IPR infringement in China, those associated with copyright infringement were the largest monetarily, and those associated with trademark infringement were the most widespread. The “information and other services sector” represented the segment within the U.S. IP- intensive sector with the highest amount of reported losses associated with IPR infringement in China.

 

•              U.S. firms in the IP-intensive economy reported that an improvement in China’s IPR protection and enforcement to levels comparable to the United States’ would likely increase employment in their U.S. operations by approximately 923,000 jobs.

 

•              To complement the survey results, the USITC used a statistical and simulation analysis to estimate the U.S. economic effects of an improvement in China’s IPR protection to levels comparable to the United States’. This analysis found the following effects: (1) a $21.4 billion increase in U.S. exports of goods and services, (2) a $87.8 billion increase in sales to U.S. majority-owned affiliates in China, (3) a potential 2.1 million increase in net U.S. employment under conditions of prolonged and high unemployment, and (4) some reallocations within the U.S. workforce towards more IP-intensive services sector jobs.

 

•              Respondents to the USITC survey also expressed concerns about China’s indigenous innovation policies, especially: (1) preferential support for Chinese firms in the form of tax incentives, subsidies, and preferential lending; and (2) China-specific technical standards. The USITC’s case studies in the wind energy, telecommunications equipment, software, automotive, and aircraft sectors provide a fuller picture of the effects of China’s indigenous innovation policies on these selected sectors.

 

China: Effects of Intellectual Property Infringement and Indigenous Innovation Policies on the U.S. Economy (Investigation No. 332-519, USITC Publication 4226, May 2011) will be available on the USITC’s Internet site at http://www.usitc.gov/publications/332/pub4226.pdf.

SOURCE:  USITC

 

Tags: IP law, IPR Infringement

Comments: Leave a comment

 

CUSTOMS IP ENFORCEMENT NEWS

By TechTradeAttorney posted in Customs IP Enforcement on Thursday, July 7, 2011

CUSTOMS IP ENFORCEMENT NEWS

The CBP strategic approach to intellectual property rights enforcement is multi-layered and includes seizing counterfeit goods at the border, pushing the border outward through audits of infringing importers and cooperation with our international trading partners, and partnering with industry and other government agencies to enhance these efforts.  CBP officers and import specialists are aggressively working together to intercept shipments containing counterfeit and pirated items.

Recent CBP IP counterfeit seizures at the US border include:

– Chicago CBP Seize Counterfeit Drivers Licenses
Since the beginning of this year, Chicago Customs and Border Protection (CBP), Office of Field Operations officers working at the International Mail Facility at O’Hare Airport have seized more than 1,700 counterfeit state drivers licenses coming in to this country from China.

The seized licenses are high quality counterfeits of identification for the states of Illinois, Ohio, South Dakota, New Jersery, Florida, Georgia and Pennsylvania. The majority of the fake license shipments were addressed to college students throughout the United States. Federal, state and local law enforcement agencies are conducting investigations regarding some of the intended recipients.

“Our greatest concern is the ease at which these high quality fakes can be ordered over the internet,” said David Murphy, CBP director of Field Operations in Chicago. “CBP will continue to work closely with our federal, state and local law enforcement partners to ensure the security of our nation and assist in ongoing investigations or prosecutions.

This year, CBP officers seized shipments ranging from two drivers licenses to 48 in various concealment methods. In some cases, the counterfeit licenses were shipped in envelopes, in others they were hidden inside shipments of various electronic and gift items.

Source: CBP

Tags: CUSTOMS IP ENFORCEMENT, IP, attorney, cbp, copyright, counterfeit, customs, import, imports, infringement, law, lawyer, seize, trademark

Comments: Leave a comment

 

FCPA: Tenaris S.A. $9 Million in Penalties for FCPA Violations

By TechTradeAttorney posted in FCPA on Thursday, July 7, 2011

Tenaris S.A., a publicly traded corporation headquartered in Luxembourg, has agreed to pay a $3.5 million penalty for violations of the Foreign Corrupt Practices Act (FCPA), and has entered into a non-prosecution agreement with the Department of Justice.

Tenaris, a global manufacturer and supplier of steel pipe products and related services to the oil and gas industry throughout the world, admitted that its employees and agents offered and made improper payments to officials of OJSC O’ztashqineftgaz (OAO), an Uzbekistan state-controlled oil and gas production company, and failed to record such payments accurately in Tenaris’s books and records.  In connection with four public bids to provide oilfield pipe and related services for energy extraction and transportation projects, Tenaris retained an agent to obtain competitors’ bid information, which Tenaris then used to secretly submit revised bids to its advantage.  Tenaris agreed to pay the agent 3.5 percent of the value of four separate contracts, while being aware or substantially certain that the agent would pay all or a portion of the money to one or more OAO employees.

According to the agreement, Tenaris voluntarily disclosed this conduct to the department in a timely and complete manner, conducted an internal investigation, provided thorough, real-time cooperation to the department and the U.S. Securities and Exchange Commission (SEC), and undertook extensive remediation, including voluntary enhancements to its compliance program. The criminal penalty in this case constitutes a substantially reduced monetary penalty and reflects the department’s commitment to providing meaningful credit to Tenaris for its extraordinary cooperation with the department.  As outlined in the agreement, Tenaris has agreed to fully cooperate with investigations by law enforcement authorities of the company’s corrupt payments and to adhere to a set of enhanced corporate compliance and reporting obligations.

In a related matter, Tenaris reached a settlement with the SEC in which Tenaris entered into a deferred prosecution agreement and agreed to pay $5,428,338 in disgorgement and prejudgment interest.  Tenaris also agreed to comply with certain undertakings regarding its FCPA compliance program.
http://www.kk-llp.com/international-trade.asp

SOURCE: DOJ

Tags: FCPA, million, penalties, violation

Comments: Leave a comment

 

Individuals/Companies Indicted for Conspiracy to Export Computer Equipment to Iran

By TechTradeAttorney posted in Export Enforcement on Thursday, July 7, 2011

Three Individuals and Two Companies Indicted for Conspiracy to Export Millions in Computer-Related Equipment to Iran

One individual and his company in New York and two others and their company in California were indicted on charges of illegally exporting millions of dollars worth of computer-related equipment from the United States to Iran via the United Arab Emirates (UAE).

Jeng “Jay” Shih, 53, a U.S. citizen, and his Queens, N.Y. company, Sunrise Technologies and Trading Company, were indicted in the District of Columbia on 27 counts relating to the illegal export of computer-related equipment to Iran without first having obtained the required license from the Department of Treasury.  If convicted, he faces a maximum sentence of 20 years in prison and a $1 million fine for each of the IEEPA counts and five years for each false statement count.

Massoud Habibion, 48, aka “Matt Habibion” and “Matt Habi,” and Mohsen Motamedian, 43, aka “Max Motamedian” and “Max Ehsan,” both U.S. citizens, and their Costa Mesa, Calif., company, Online Micro LLC, were indicted in the District of Columbia on 32 counts relating to the illegal export of computer-related equipment to Iran without the required license from the Department of Treasury.  If convicted, both defendants face a maximum sentence of 20 years in prison and a $1 million fine for each of the IEEPA counts, and five years for each false statement and 20 years for each obstruction of justice count.

In 2006, Commerce Department agents conducted an outreach visit to Shih’s business in New York where they met Shih and informed him about U.S. laws governing the export of goods from the United States to other countries, particularly embargoed countries like Iran.   In April 2010, ICE-Homeland Security Investigations (HSI) agents seized hundreds of laptop computers that originated from Sunrise and were destined for Dubai, UAE.  Communications related to these shipments indicated that the purchasers were located in Iran, according to the affidavit.

The agent for the Dubai company, who was arrested, pleaded guilty, and began cooperating with the government, told federal agents that Habibion and Motamedian sold roughly $300,000 worth of computers to the Dubai company each month and that Habibion and Motamedian fully understood that the computers were destined for Iran.

In December 2010, the cooperating individual met with Habibion and Motamedian, wherein these defendants allegedly instructed the cooperating individual to make fake invoices to conceal that Iran was the destination of the shipments and to indicate that the end-users were in Dubai.   In addition, the affidavit alleges that in a Jan. 5, 2011, meeting, Habibion told the cooperating individual to lie to federal agents about conducting business in Iran, stating, “If they ask you, for instance, ‘Do you do business in Tehran?’ ‘No, I don’t have any business in Tehran.  I go there to visit my family, but I have no business there.’ They will ask such questions, it is part of their routine.”

SOURCE:  BIS

 

IP Infringement in China Costs US Companies

By TechTradeAttorney posted in International IP on Tuesday, June 7, 2011
Despite broad success in the China market, many U.S. companies have reported that the infringement of their intellectual property rights (IPR) in China and China’s indigenous innovation policies have undermined their competitive positions, reports the U.S. International Trade Commission (USITC).

In response to a USITC survey, many U.S. firms reported lost sales, profits, and license and royalty fees, as well as damaged brand names and product reputation, as a result of IPR infringement in China, according to the report. U.S. firms reported losses associated with China’s indigenous innovation policies as well but noted greater concern about the future implications of these evolving policies.

The report, the second of two reports on IPR infringement and indigenous innovation policies in China and their effects on the U.S. economy and employment, was released today. The USITC, an independent, nonpartisan, factfinding federal agency, conducted the studies at the request of the U.S. Senate Committee on Finance.

As requested, the Commission report estimates the size and scope of reported Chinese IPR infringement; provides a quantitative analysis of the effect of IPR infringement in China on the U.S. economy and its sectors; and assesses the effects of China’s indigenous innovation policies on the U.S. economy and employment. Highlights of the report follow.

·              Based on survey information, the USITC estimates that U.S. IP-intensive firms’ losses from IPR infringement in China were approximately $48 billion in 2009. The survey was sent to over 5,000 U.S. firms in the IP-intensive part of the U.S. economy, which is the sector most likely to be affected by IPR infringement in China. Firms in this segment of the U.S. economy also spent approximately $4.8 billion in 2009 to address possible Chinese IPR infringement in 2009. These figures may be understated because they do not reflect losses incurred by firms in the rest of the economy.

·              Firms reported that among the losses they incurred as a result of IPR infringement in China, those associated with copyright infringement were the largest monetarily, and those associated with trademark infringement were the most widespread. The “information and other services sector” represented the segment within the U.S. IP- intensive sector with the highest amount of reported losses associated with IPR infringement in China.

·              U.S. firms in the IP-intensive economy reported that an improvement in China’s IPR protection and enforcement to levels comparable to the United States’ would likely increase employment in their U.S. operations by approximately 923,000 jobs.

·              To complement the survey results, the USITC used a statistical and simulation analysis to estimate the U.S. economic effects of an improvement in China’s IPR protection to levels comparable to the United States’. This analysis found the following effects: (1) a $21.4 billion increase in U.S. exports of goods and services, (2) a $87.8 billion increase in sales to U.S. majority-owned affiliates in China, (3) a potential 2.1 million increase in net U.S. employment under conditions of prolonged and high unemployment, and (4) some reallocations within the U.S. workforce towards more IP-intensive services sector jobs.

·              Respondents to the USITC survey also expressed concerns about China’s indigenous innovation policies, especially: (1) preferential support for Chinese firms in the form of tax incentives, subsidies, and preferential lending; and (2) China-specific technical standards. The USITC’s case studies in the wind energy, telecommunications equipment, software, automotive, and aircraft sectors provide a fuller picture of the effects of China’s indigenous innovation policies on these selected sectors.

China: Effects of Intellectual Property Infringement and Indigenous Innovation Policies on the U.S. Economy (Investigation No. 332-519, USITC Publication 4226, May 2011) will be available on the USITC’s Internet site at http://www.usitc.gov/publications/332/pub4226.pdf.

SOURCE: USITC
More Info

Tags: China, IP, ITC, attorney, copyright, counterfeit, infringement, intellectual property, international, international IP, law, lawyer, trademark

Comments: Leave a comment

 

College Student Could Face 20+ Years for Internet Coupons

By TechTradeAttorney posted in eCommerce/Internet on Tuesday, June 7, 2011

Lucas Henderson, a 22 year old college student from Lubbock, Texas, is charged with wire fraud and trafficking in counterfeit goods, in connection with his creation, dissemination and use of counterfeit online coupons for consumer and electronic goods ranging from Tide laundry detergent to PlayStations.  As a result of Henderson’s conduct, retailers and manufacturers paid out on the coupons and lost hundreds of thousands of dollars through the scheme.

Since July 2010, Henderson allegedly created fraudulent coupons designed to look like legitimate online print-at-home coupons available to consumers on the Internet at www.SmartSource.com.  These counterfeit coupons, which ranged from lower-priced consumer items such as energy drinks, beer and cigarettes, to more expensive consumer products such as X-Box and PlayStation, all made unauthorized use of the “Powered by SmartSource” logo, as well as a distinctive border, both of which are registered trademarks belonging to News America Marketing, a subsidiary of Manhattan-based News Corporation.

Between July 2010 and March 2011, Henderson made a number of the counterfeit coupons he had created available on the Internet by anonymously posting on two message boards devoted to the discussion of online coupons – using the nicknames “Anonymous 123,””Anonymous234,”and “Anonymous345.”  In addition to creating and disseminating fake coupons himself, Henderson also wrote tutorials, which he posted online, providing instructions to others for creating counterfeit coupons using their own computers.

Henderson’s actions have resulted in substantial losses not only to the manufacturers of various affected products but also to retailers and consumers themselves.  For example, in or about December 2010, $200,000 worth of counterfeit coupons for Tide laundry detergent were redeemed by consumers over a two to three week period.  Proctor & Gamble, which manufactures Tide and is the single largest coupon issuer in the United States, has never issued a single online print-at-home coupon.  The costs associated with the redemption of those counterfeit coupons were subsequently borne by Proctor & Gamble and the various retailers victimized by the fraud.

Henderson is charged with one count of wire fraud, which carries a maximum sentence of 20 years in prison, and one count of trafficking in counterfeit goods, which carries a maximum sentence of 10 years in prison.

SOURCE: DOJ

http://www.kk-llp.com/legal-ecommerce.asp

Tags: ecommerce, internet

Comments: Leave a comment

 

Welcome to Our Trade & Technology Law Blog

On behalf of Klemchuk Kubasta, LLP on Friday, May 20, 2011

When you are in need of legal representation, an experienced and passionate lawyer can be of great assistance and look out for your rights. An attorney who understands the law and the process can help you evaluate your options and make the right decisions.

At Klemchuk Kubasta, LLP, we assist clients throughout the world who have a wide variety of business, technology and innovation-related legal needs.

Contact our office by e-mail or call us at 214-367-6000 to discuss your situation with an attorney.

Our Trade & Technology Blog

We established this blog to provide valuable information to individuals and companies regarding intellectual property, ecommerce and technology transactions, and international business & trade matters. We will regularly update this blog, posting on a wide range of intellectual property and international business topics, including import and customs, export, FCPA, intellectual property (trademarks, patents, copyrights, etc.), eCommerce.

We welcome your participation in the discussions on this blog. Feel free to comment on posts that interest you.

Contact Our Office

Contact our office by e-mail or call us at 214-367-6000 for more information.

Tags: None

Comments: Leave a comment

 

CHESTER’S Trade & Technology Law Update – May 2011 Edition

On behalf of Klemchuk Kubasta, LLP posted in Trade & Technology Law on Thursday, May 12, 2011

Joint Venture Accumulates $1.5 Billion in Penalties to Date for FCPA Violations

JGC, Kellogg Brown & Root Inc. (KBR), Technip S.A. and Snamprogetti Netherlands B.V. comprised the four-company TSKJ joint venture that was awarded four EPC contracts by Nigeria LNG Ltd. (NLNG) between 1995 and 2004 to build LNG facilities on Bonny Island, Nigeria. The government-owned Nigerian National Petroleum Corporation (NNPC) was the largest shareholder of NLNG, owning 49 percent of the company. The EPC contracts to build liquefied natural gas (LNG) facilities on Bonny Island were valued at more than $6 billion.
JGC Corporation, the last of the four-company joint venture to reach an agreement, has agreed to pay a $218.8 million criminal penalty to resolve charges related to the Foreign Corrupt Practices Act (FCPA) for its participation in a decade-long scheme to bribe Nigerian government officials to obtain engineering, procurement and construction (EPC) contracts.

Kellogg Brown & Root LLC, pleaded guilty in February 2009 to charges related to the FCPA for its participation in the scheme to bribe Nigerian government officials. Kellogg Brown & Root LLC was ordered to pay a $402 million fine and to retain an independent compliance monitor for a three-year period to review the design and implementation of its compliance program. In another related criminal case, the department filed a deferred prosecution agreement and criminal information against Technip in June 2010. According to that agreement, Technip agreed to pay a $240 million criminal penalty and to retain an independent compliance monitor for two years. In July 2010, the department filed a deferred prosecution agreement and criminal information against Snamprogetti, which also agreed to pay a $240 million criminal penalty.
SOURCE: DOJ

Hackers Steal Private Data of 77 million PlayStation Network Users from Sony Servers

As widely reported by most major news outlets, online hackers recently compromised Sony’s PlayStation Network, prompting Sony to shut down the PlayStation Network. Sony later admitted that before the PlayStation Network was shut down, “external intruder(s)” were able to access names, addresses, passwords, and possibly financial data, including credit card information for up to 77 million PlayStation Network users.

What is of most concern is that it took Sony almost a week to inform users of the breach in security, and Sony’s failure to take reasonable steps to adequately protect personal information is sure to result in not only lawsuits, but also in regulatory penalties. Sony’s Privacy Policy specifically notes, “While SCA cannot guarantee that unauthorized access will never occur, rest assured that SCA takes great care in maintaining the security of your personal information and in preventing unauthorized access to it through the use of appropriate technology and internal procedures.” Failure by Sony to encrypt all of its customer’s personal information could be seen as violating its own Privacy Policy.

It is important for companies to draft Privacy Policies that accurately reflect its actual practices. This is commonly where companies run into problems and open themselves up to liability. When a company fails to strictly follow its posted Privacy Policy in its day-to-day operations, its actions may be seen as deceptive trade practices leading to enforcement actions. Thus, it is important to avoid simply borrowing language from another’s Privacy Policy or a standard template. Rather, a company should disclose their actual collection and maintenance practices in a clear and concise manner.

CUSTOMS IP ENFORCEMENT NEWS

The CBP strategic approach to intellectual property rights enforcement is multi-layered and includes seizing counterfeit goods at the border, pushing the border outward through audits of infringing importers and cooperation with our international trading partners, and partnering with industry and other government agencies to enhance these efforts. CBP officers and import specialists are aggressively working together to intercept shipments containing counterfeit and pirated items.

Recent CBP IP counterfeit seizures at the US border include:

– Chicago CBP Seize Counterfeit Rare Coins
Chicago U.S. Customs and Border Protection officers assigned to the International Mail Branch last week made an interesting discovery of a shipment of U.S. Trade Dollar coins arriving from China.

Suspicion was raised by the officers when they noticed an anomaly on the X-ray of a heavy package intended for a residence in Illinois. Further examination of the package revealed 361 coins that appeared to be U.S. Trade Dollar coins with dates between 1873 and 1878. The original U.S. Trade Dollar coin was minted from 1873 to 1878 and in proof form from up until 1885. Research of collector coins revealed that some of these coins can be sold for as much as $2,000.

A sample coin was turned over to CBP Laboratory and Scientific Services in Chicago for analysis. The result revealed the coins were made of brass with a thin sliver plated coating. Ironically the consignee contacted CBP inquiring about his shipment indicating he was going to sell them on a popular internet auction site. Based upon the laboratory results the shipment was seized.
Source: CBP

Nintendo Targeted in New Section 337 Investigation

Creative Kingdoms, LLC, of Wakefield, RI, and New Kingdoms, LLC, of Nehalem, OR filed a complaint with the U.S. International Trade Commission (USITC) requesting an investigation pursuant to Section 337. The complaint alleges violations of Section 337 of the Tariff Act of 1930 in the importation into the United States and sale of certain video game systems and wireless controllers and components thereof that infringe patents asserted by the complainants.

The USITC has identified the following as respondents in this investigation:

Nintendo Co., Ltd., of Japan; and Nintendo of America, Inc., of Redmond, WA.
By instituting an investigation, the USITC has not yet made any decision on the merits of the case. One of the USITC’s six administrative law judges (ALJ) will make an initial determination as to whether there is a violation of Section 337; that initial determination is subject to review by the Commission. The USITC will set a target date for when the investigation will be complete within the first 45 days of the investigation. USITC remedial orders in Section 337 cases are effective when issued and become final 60 days after issuance unless disapproved for policy reasons by the U.S. Trade Representative within that 60-day period.

A Section 337 victory for a party could possibly mean a complete U.S. ban on the importation of the infringing product, by stopping the affected products at the border.
SOURCE: USITC

Abuse of Police Power Leads to Intrusion of Online Database Privacy

Former Montgomery County Police officer Delores Culmer, age 37, of Silver Spring, Maryland pleaded guilty to obtaining unauthorized information from protected government computers for her personal financial gain or commercial advantage.
According to Culmer’s guilty plea, on at least 20 occasions from August 2008 to April 2010, Culmer, then a Montgomery County Police officer, used her police powers to access law enforcement databases to obtain unauthorized information. For example Culmer inappropriately accessed the National Crime Information Center (NCIC) database, as well as the Maryland Inter- agency Law Enforcement System (MILES) database, to conduct wanted persons checks on her boyfriend, a person with whom her sister was having a dispute, and a friend of Culmer’s boyfriend. Culmer also performed unauthorized registered motor vehicle checks on Culmer’s boyfriend’s brother and a person with whom Culmer’s boyfriend was having a dispute.

Culmer faces a maximum sentence of five years in prison and a $250,000 fine.
SOURCE: DOJ

New Tool Highlights Tariff Benefits For American Businesses

America’s Free Trade Agreement (FTA) partners offer attractive markets for many U.S. companies looking to expand into new markets or export for the very first time. Through these agreements, the U.S. has negotiated the elimination of tariffs, the removal of non-tariff barriers, and secured non-discriminatory treatment of U.S. goods and services. Originally trade and tariff information could only be accessed by sifting through the actual text of the agreements. The FTA Tariff Tool streamlines the search process.

Small and medium sized enterprises (SMEs) stand to benefit from exporting to FTA partner markets. Many small business owners would benefit from exporting but might not have the time or resources to get started. Giving small business owners a simple way to navigate the complexities of tariffs and international trade is a crucial step in ensuring they have what they need to grow their business and create jobs.

The FTA Tariff Tool has three functions: 1) to provide a searchable database to find the tariff treatment of industrial goods covered under the U.S. trade agreements; 2) to create market access reports and charts across industrial sectors or product groups; and 3) to create a snapshot of current and tariff and trade trends under different U.S. trade agreements. Businesses are able to see the current and future tariffs applied to their products, as well as the date on which those products become duty free. By combining sector and product groups, trade data, and the tariff elimination schedules, users can also analyze how various sectors are treated across various trade agreements.

Trade data will be updated on an annual basis and future trade agreements will be incorporated as they are negotiated. The website also provides an instructional video, quick start guide and user’s manual. For more information, please visit http://www.export.gov/FTA/FTATariffTool/.

SOURCE: Export.gov

ABOUT THE EDITOR

Jim Chester is a Senior Partner at Klemchuk Kubasta LLP in Dallas, Texas. He advises entrepreneurs, start-ups and privately-held companies of all sizes in a variety of industries regarding commercial intellectual property matters, including trademark, copyright, and trade secret protection, licensing & enforcement in the US and abroad. He also assists companies in international business transactions and trade matters, and has advised clients on business deals involving over 100 countries. He is also an adjunct professor of law at Baylor University Law School, where he teaches courses on international trade law and international business transactions. He is a licensed US Customs broker, and holds and LL.M. degree in international economics law.

ABOUT KLEMCHUK KUBASTA LLP

Klemchuk Kubasta LLP is an IP boutique law firm offering a full array of intellectual property related services, including litigation and enforcement of all forms of intellectual property, as well as registration and licensing of patents, trademarks, trade dress, and copyrights. The firm also provides legal services relating to trade secrets, unfair competition, domain names, e-commerce, privacy policies, Internet law, commercial litigation, business litigation, technology transactions and international business & trade. Located in Dallas, Texas, Klemchuk Kubasta LLP supports a diverse client base ranging from individuals and startups to established market-leading companies. Through its Virtual IP Counselsm and Virtual General Counselsm programs, the firm also has experience with technology incubators and pre-first round financing technology start-ups. Klemchuk Kubasta LLP also serves as local counsel for IP and commercial litigation cases pending in Texas, including the federal courts in the Northern and Eastern Districts of Texas. Additional information about the firm and its attorneys may be found at www.kk-llp.com.

Tags: None

Comments: Leave a comment

 

CHESTER’S Trade and Technology Law Update – April 2011

On behalf of Klemchuk Kubasta, LLP posted in Trade & Technology Law on Tuesday, April 12, 2011

Government Seeks to Further Expose Notorious Markets List to Curb Global Piracy and Counterfeiting

Global piracy and counterfeiting continue to thrive due in part to marketplaces that deal in infringing goods. The Notorious Markets List identifies selected markets, including those on the Internet, which exemplify the problem of marketplaces dealing in infringing goods and helping to sustain global piracy and counterfeiting. These are marketplaces that have been the subject of enforcement action or that may merit further investigation for possible infringements of intellectual property rights. The Notorious Markets List will now be published separately in an effort to further expose these markets.

The Notorious Markets List does not purport to reflect findings of legal violations, nor does it reflect the United States Government’s analysis of the general climate of protection and enforcement of intellectual property rights in the countries concerned. That broader analysis of IPR protection and enforcement is contained in the annual Special 301 report, published at the end of April every year.
Some key categories contained in the list are as follows:

B2B and B2C
Business-to-business (B2B) and business-to-consumer (B2C) websites have been cited by the industry as offering a wide range of infringing products (such as cigarettes, clothing, manufactured goods, pharmaceutical products and sporting goods) to consumers and businesses while maintaining intellectual property policies that are inconsistent with industry norms.

BitTorrent indexing
BitTorrent indexing sites can be used for the high speed location and downloading of allegedly infringing materials from other users. The sites identified below illustrate the extent to which some BitTorrent indexing sites have become notorious hubs for infringing activities, even though such sites may also be used for lawful purposes.

ThePirateBay
ThePirateBay recently ranked among the top 100 websites in both global and U.S. traffic, and has been the target of a notable criminal prosecution in Sweden.

IsoHunt
Canada-based IsoHunt, which has been the subject of civil litigation in both Canada and the U.S., recently ranked among the top 300 websites in global traffic and among the top 600 in U.S. traffic.

Btjunkie: This site is among the largest and most popular aggregators of public and non-public “torrents,” which find and initiate the downloading process for a particular file.

Live sports telecast piracy
Live sports telecast piracy affects amateur and professional sports leagues by making these protected telecasts and broadcasts freely available on the Internet.

TV Ants: This peer-to-peer service, which reportedly operates from China, exemplifies this problem.

Smartphone software
A number of websites are making Smartphone software applications available to the public without compensating rights holders.

91.com: This site is reportedly responsible for more than half of all downloaded applications in China.
Physical Markets around the World

China Small Commodities Market (Yiwu, China)
The China Small Commodities Market in Yiwu reportedly sells mostly consumer goods. Industry has cited the market as a center for wholesaling of infringing goods, making this market the origin of many counterfeit goods available internationally.

Harco Glodok (Jakarta, Indonesia)
This market is one of many in Indonesia known for counterfeit and pirated goods, and is particularly notorious for pirated optical discs.

Ladies Market (Mongkok, Hong Kong)
This well-known tourist shopping area is one of several markets in Hong Kong that have been targeted for anti-counterfeiting enforcement by Hong Kong Customs.

Luowu Market (Shenzhen, China)
Shenzhen and Guangzhou provinces are reportedly home to dozens of markets offering counterfeit or pirated goods. The display of signs prohibiting the sale of such goods has not served as an effective deterrent, as exemplified by the Luowu market.

Nehru Place (New Delhi, India)
Nehru Place is reportedly one of the many markets in major cities throughout India that are known for dealing in large volumes of pirated software, optical media and counterfeit goods.

Silk Street Market (Beijing, China)
Industry has cited Beijing’s Silk Street Market as a particularly prominent example of the counterfeiting of consumer and industrial products that is endemic in many retail and wholesale markets throughout China.

Tepito (Mexico City)
Tepito is reportedly the main warehousing and distribution center for pirated and counterfeit products sold at numerous informal markets throughout Mexico.

The list can be found at http://www.ustr.gov/webfm_send/2595, but is by no means an exhaustive listing of all notorious markets around the world. Rather, the list highlights with concern some of the most prominent examples of notorious markets in each of the categories referenced above.

SOURCE: USTR

CUSTOMS IP ENFORCEMENT NEWS

The CBP strategic approach to intellectual property rights enforcement is multi-layered and includes seizing counterfeit goods at the border, pushing the border outward through audits of infringing importers and cooperation with our international trading partners, and partnering with industry and other government agencies to enhance these efforts. CBP officers and import specialists are aggressively working together to intercept shipments containing counterfeit and pirated items.

Recent CBP IP counterfeit seizures at the US border include:

– Laredo CBP Seize $290,000 in Counterfeit Handbags and Electronics
CBP import specialists from the Laredo port of entry discovered 102 boxes containing 1,466 card players, 368 woofers and subwoofers and 3,598 handbags infringing on a variety of trademarks and copyrights recorded with CBP. The merchandise has a combined domestic value of more than $6,000 and a manufacturer’s suggested retail price of $289,710.

CBP import specialists from the Laredo Import Specialist Enforcement Team (ISET) team recently targeted a shipment containing handbags and electronics for an enforcement examination. During the examination, conducted at the Colombia-Solidarity Bridge, CBP import specialists and officers noted that the merchandise carried various brand names that are either trademark or copyright recorded with CBP, including brands such as SD, LG, iPod, LV, Hello Kitty, Louis Vuitton, Abercrombie and Fitch, Mickey Mouse, Winnie the Pooh and the Love L ve, L ve interlocking hearts trademark.

– CBP in Laredo, Tx. Seize over $70,000 in Counterfeit Bags and Shirts
Members of the Import Specialist Enforcement Team at U.S. Customs and Border Protection’s Laredo Port of Entry recently targeted and seized handbags that were confusingly similar to Burberry and counterfeit shirts infringing on well-known brands such as Polo Ralph Lauren, Hollister, and Abercrombie and Fitch for a combined value of more than $70,000 in two separate enforcement actions.

CBP determined the handbags to be confusingly similar to the Burberry check design trademark, and on March 3 seized the shipment of 120 handbags. The shipment had a domestic value of $700 and a manufacturer’s suggested retail price of nearly $60,000.

ISET members also recently selected an air cargo shipment of wearing apparel for further examination. During the examination, ISET members discovered shirts that appeared to infringe on previously recorded trademarks with CBP, including Polo Ralph Lauren, Hollister and Abercrombie and Fitch. CBP obtained confirmation from the trademark holders that the shirts were counterfeit and on March 2, seized 155 purported Abercrombie and Fitch shirts, 92 purported Hollister Shirts and two purported Polo Ralph Lauren shirts. The shirts had a domestic value of $1,700 and a manufacturer’s suggested retail price of about $12,000.
SOURCE: CBP

NuvaRing Prescription Drug at Issue in New Section 337 Investigation
Femina Pharma Incorporated of Miami, FL filed a complaint with the U.S. International Trade Commission (USITC) requesting an investigation pursuant to Section 337. The complaint alleges violations of section 337 of the Tariff Act of 1930 in the importation into the United States and sale of certain vaginal ring birth control devices that infringe a patent asserted by Femina Pharma.

The USITC has identified the following as respondents in this investigation:

Merck & Co., Inc., of Whitehouse Station, NJ;
Schering Plough Corporation of Kenilworth, NJ;
Organon USA, Inc., of Durham, NC;
N.V. Organon of the Netherlands;
CVS Caremark Corporation of Woonsocket, RI;
CVS Pharmacy, Inc., of Woonsocket, RI;
Wal-Mart Stores, Inc., of Bentonville, AR;
Walgreens Co. of Deerfield, IL;
The Canamerican Drugs Inc. D/B/A www.77Canadapharmacy.com, www.medcentercanada.com, and www.tigerdrugs.com of Canada;
The Canamerican Global Inc. D/B/A www.canamericanglobal.com of Canada;
Canadian Med Service D/B/A www.canadianmedservices.com of Canada;
Panther Meds Inc. D/B/A www.panthermeds.com of Canada;
Canada Drugs Online D/B/A www.Canadadrugsonline.com of Canada;
Drug World Canada D/B/A www.drugworldcanada.com of Canada;
CanDrug Health Solutions Inc. D/B/A www.candrug.com of Canada;
Big Mountain Drugs D/B/A www.bigmounntaindrugs.com of Canada;
BestBuyRx.com D/B/A www.bestbuyrx.com of Canada;
Blue Sky Drugs D/B/A www.Blueskydrugs.com of Canada;
ABC Online Pharmacy D/B/A www.abconlinepharmacy.com of Canada;
Canadadrugs.com LP D/B/A www.Canadadrugs.com of Canada;
North Drug Store D/B/A www.northdrugstore.com of Canada; and
Canada Pharmacy D/B/A www.CanadaPharmacy.com of Blaine, WA.

By instituting an investigation, the USITC has not yet made any decision on the merits of the case. One of the USITC’s six administrative law judges (ALJ) will make an initial determination as to whether there is a violation of Section 337; that initial determination is subject to review by the Commission. The USITC will set a target date for when the investigation will be complete within the first 45 days of the investigation. USITC remedial orders in Section 337 cases are effective when issued and become final 60 days after issuance unless disapproved for policy reasons by the U.S. Trade Representative within that 60-day period.

A Section 337 victory for a party could possibly mean a complete U.S. ban on the importation of the infringing product, by stopping the affected products at the border.
SOURCE: USITC

Export Related Podcasts Aimed at Helping Small/Medium Sized Businesses
The Small Business Administration (SBA) has made available a number of podcasts that offer expert insight and guidance to assist small and medium sized companies. While their topics range from marketing and sales, human resources, and the technology that can be employed to keep business functioning smoothly; they also have a number of podcasts to assist companies with export related matters, including:

  • Intellectual Property Rights: Protecting and Enforcing Your IPR in Foreign Markets
  • Where Will Your Next Customer Come From? Look Around the World
  • Competing in the Global Market: SBA’s International Trade Programs
  • Exporting to Russia
  • Exporting to Uganda
  • Exporting to Bahrain
  • Exporting to Cameroon

SOURCE: Export.gov and SBA

Antitrust Cooperation Agreement Signed with Chile

The agreement signed between the U.S. and Chile will enable the antitrust agencies in the two countries to improve their law enforcement relationship. The new agreement contains provisions for antitrust enforcement cooperation and coordination, conflict avoidance and consultations with respect to enforcement actions, and technical cooperation and is subject to effective confidentiality protections.

The U.S. antitrust agencies and Chile’s Office of the National Economic Prosecutor, the agency that enforces Chile’s competition law, have steadily improved their ties, both bilaterally and under the terms of the U.S.-Chile Free Trade Agreement.

Highlights of the new agreement include:

· Mutual acknowledgment of the importance of antitrust cooperation, including information sharing and possible coordination of enforcement actions when pursuing enforcement activities with regard to related matters;
· Agreement to take each others’ important interests into account in order to minimize possible conflicts arising out of antitrust enforcement actions; and
· Agreement to maintain the confidentiality of any sensitive information provided by the other party.
The agreement does not change existing law in either country. Chile has had a law dedicated to the preservation of competition since 1973. This cooperation agreement is similar in substance to those previously signed by the U.S. antitrust agencies with Brazil, Canada, the European Union (EU), Israel, Japan and Mexico.
SOURCE: DOJ

Michigan Company Fined for Illegal Exports

BIS announced that ArvinMeritor of Troy, Michigan, has agreed to pay a $100,000 civil fine to settle allegations that it committed 14 violations of the Export Administration Regulations.

ArvinMeritor voluntarily disclosed that on two occasions between August 2005 and November 2006, ArvinMeritor shipped products, including various vehicle axles and seal assemblies controlled for national security reasons, to China and France. Additionally, on twelve occasions between December 2005 and May 2006, ArvinMeritor engaged in prohibited conduct by exporting technical data, controlled for national security reasons, to Italy, India, China, Mexico, South Korea, and Brazil.

SOURCE: BIS

Pennsylvania Company Fined for Export Violations Involving China and Israel
The Commerce Department’s Bureau of Industry and Security (BIS) announced that TW Metals, Inc. of Exton, Pennsylvania, has agreed to pay a $575,000 civil penalty to settle allegations that it violated the Export Administration Regulations (EAR) related to the export of titanium alloy and aluminum bar to China and Israel without the required export licenses. TW Metals voluntarily disclosed the violations, which mitigated the administrative settlement.

BIS alleged that between April 2004 and August 2007, TW Metals made 48 exports of titanium alloy, controlled for reasons of nonproliferation, through Canada to the People’s Republic of China without the required Department of Commerce licenses. Additionally, TW Metals engaged in conduct prohibited by the EAR in July 2007 by exporting aluminum bar, also controlled for reasons of nuclear nonproliferation, through Canada to Israel without the required Department of Commerce license.

SOURCE: BIS

Jim Chester advises entrepreneurs, start-ups and privately-held companies of all sizes in a variety of industries regarding commercial intellectual property matters, included trademark, copyright, and trade secret protection licensing and enforcement in the US and abroad. He also assists companies in international business transactions and trade matters, and has advised clients on business deals involving over 100 countries. He is also an adjunct professor of law at Baylor University Law School, where he teaches courses on international trade law and international business transactions. He is a licensed US Customs broker and holds and LL.M. degree in international economic law.

ABOUT KLEMCHUK KUBASTA LLP Klemchuk Kubasta LLP is an IP boutique law firm offering a full array of intellectual property related services, including litigation and enforcement of all forms of intellectual property, as well as registration and licensing of patents, trademarks, trade dress, and copyrights. The firm also provides legal services relating to trade secrets, unfair competition, domain names, e-commerce, privacy policies, Internet law, commercial litigation, business litigation, technology transactions and international business & trade. Located in Dallas, Texas, Klemchuk Kubasta LLP supports a diverse client base ranging from individuals and startups to established market-leading companies. Through its Virtual IP Counselsm and Virtual General Counselsm programs, the firm also has experience with technology incubators and pre-first round financing technology start-ups. Klemchuk Kubasta LLP also serves as local counsel for IP and commercial litigation cases pending in Texas, including the federal courts in the Northern and Eastern Districts of Texas. Additional information about the firm and its attorneys may be found at www.kk-llp.com.
Sincerely,

Jim Chester
Klemchuk Kubasta LLP

Tags: None

Comments: Leave a comment

 

CHESTER’S Trade & Intellectual Property (TIP) Law Update – March 2011

On behalf of Klemchuk Kubasta, LLP posted in Trade & Technology Law on Wednesday, March 9, 2011

Homeland Security Shuts Down Sports For Some, Website Operator Arrested

Seizure warrants have been executed against 10 websites (ATDHE.NET, CHANNELSURFING.NET, HQ-STREAMS.COM, HQSTREAMS.NET, FIRSTROW.NET, ILEMI.COM, IILEMI.COM, IILEMII.COM, ROJADIRECTA.ORG and ROJADIRECTA.COM) that illegally streamed live sporting telecasts and pay-per-view events over the Internet, as part of an ongoing investigation by U.S. Immigration and Customs Enforcement’s (ICE) Homeland Security Investigations (HSI). The websites were among the most popular on the Internet for illegally distributing copyrighted sporting events.

In a related action, the operator of a website that illegally streamed live, copyrighted sporting events on the Internet was arrested by agents with U.S. Immigration and Customs Enforcement’s (ICE) Homeland Security Investigations (HSI). Bryan McCarthy, 32, of Deer Park, Texas, was taken into custody at his home and is charged with one count of criminal infringement of a copyright.
The investigation into McCarthy revealed that he made more than $90,000 in profits from online merchants who paid him to advertise on the website. Since the seizure of the site, it has received more than 1.3 million hits.

According to the criminal complaint and the seizure affidavit, McDarthy’s channelsurfing.net was an online portal to pirated telecasts of sporting events of the National Football League (NFL), the National Basketball Association (NBA), the National Hockey League (NHL), World Wrestling Entertainment (WWE), and the Ultimate Fighting Championship (UFC). All of these organizations hold the copyrights to the televised broadcasts of their respective sporting events.
If convicted on the charge of criminal infringement of a copyright, McCarthy faces a maximum of five years in prison.

This is not the first time HSI has shut down websites. In June 2010, authorities executed seizure warrants against nine domain names of websites offering pirated copies of first-run movies. In November 2010, 82 domain names of commercial websites engaged in the illegal sale and distribution of counterfeit goods and copyrighted works were seized.
SOURCE: U.S. Immigration and Customs Enforcement

Tyson Foods Inc. to Pay $4 Million for FCPA Violations

Tyson Foods Inc. has agreed to pay a $4 million criminal penalty to resolve an investigation into improper payments by company representatives to government-employed inspection veterinarians in Mexico.

“Tyson Foods used false books and sham jobs to hide bribe payments made to publicly-employed meat processing plant inspectors in Mexico,” said Assistant Attorney General Breuer. “The penalty and resolution announced today reflect the company’s disclosure of this conduct, its cooperation with the government’s investigation and its commitment to implementing enhanced controls.”

A criminal information charges Tyson with conspiracy to violate the Foreign Corrupt Practices Act (FCPA) and with violating the FCPA. Tyson, which is headquartered in Springdale, Ark., produces prepared food products. As part of a deferred prosecution agreement with the department, Tyson acknowledged responsibility for the actions of its subsidiaries, employees and agents who made improper payments to government-employed veterinarians who inspected two of its chicken processing plants in Gomez Palacio, Mexico.

Any company that exports meat products from Mexico must participate in an inspection program, supervised by the Mexican Department of Agriculture. According to court documents, the inspection program at each facility is supervised by an on-site veterinarian employed by the government of Mexico to ensure that all exports conform to Mexican health and safety laws.

Tyson’s Mexican subsidiary, Tyson de Mexico, paid approximately $90,000 between 2004 and 2006, to two publicly-employed veterinarians who inspected its Mexican plants, resulting in profits of approximately $880,000. The payments were made both directly to the veterinarians and indirectly through their wives, who Tyson de Mexico listed on its payroll, although neither performed any services for Tyson. According to court documents, the bribe payments were made to keep the veterinarians from disrupting the operations of the meat-production facilities. When payments to the spouses were terminated in 2004, Tyson representatives agreed to increase the amount paid to the veterinarians to match the amount previously paid to their spouses.

The agreement requires that Tyson pay a $4 million penalty, implement rigorous internal controls, and cooperate fully with the department. The agreement recognizes Tyson’s voluntary disclosure and thorough self-investigation of the underlying conduct. If Tyson abides by the terms of the agreement for the two-year term, the department will dismiss the criminal information.

In a related matter, Tyson reached a settlement today with the U.S. Securities and Exchange Commission, under which it agreed to pay more than $1.2 million in disgorgement of profits, including pre-judgment interest.
SOURCE: DOJ

CUSTOMS IP ENFORCEMENT NEWS

The CBP strategic approach to intellectual property rights enforcement is multi-layered and includes seizing counterfeit goods at the border, pushing the border outward through audits of infringing importers and cooperation with our international trading partners, and partnering with industry and other government agencies to enhance these efforts. CBP officers and import specialists are aggressively working together to intercept shipments containing counterfeit and pirated items.

Recent CBP IP counterfeit seizures at the US border include:

– CBP in Los Angeles, Ca. Seize $2.5 Million in Fake Glasses
U.S. Customs and Border Protection import specialists and officers assigned to the Los Angeles/Long Beach seaport discovered and seized 13,200 sunglasses and reading glasses in violation of Givenchy and Giorgio Armani trademarks in a shipment arriving from China. CBP officers seized the infringing shipment containing 9,600 pairs of counterfeit Givenchy sunglasses and 3,600 pairs of confusingly similar Georgio Armani reading glasses. The combined estimated manufacturer’s suggested retail price is $2,585,340 with a domestic value of $11,141. Along with the negative effect on legitimate manufacturers and on the U.S. economy, counterfeit sunglasses may not be impact resistant, may cause injury by shattering and may fail to provide UV protection.

– CBP Unmasks $112,000 in Fake Make-up Brushes
Cracking down on counterfeit commodities arriving from China, U.S. Customs and Border Protection import specialists and officers at Los Angeles International Airport discovered and confiscated five parcels containing counterfeit MAC/Estee Lauder make-up brushes with an estimated manufacturer’s suggested retail price of $112,500. The infringing merchandise comprised of 5,400 brushes in 225 kits arrived in Los Angeles. CBP import specialists and officers targeted and seized the counterfeit merchandise at an air cargo express consignment location. The domestic value of the five shipments is $22,488.

– CBP and the FDA Team Up
U.S. Customs and Border Protection (CBP) and the Food and Drug Administration (FDA) work closely to prevent the importation of harmful counterfeit prescription drugs and tainted products marketed as dietary supplements.

In recent years, counterfeiters have become more sophisticated in deceiving consumers. It can be difficult, if not impossible, to tell the real product from an imposter without sophisticated equipment. Counterfeit drugs may look exactly like real FDA-approved medicines, but their quality and safety are unknown. For example, counterfeit products could contain the wrong ingredients and/or varying amounts of the supposed active ingredient.

In addition to counterfeit prescription drug products, CBP and FDA have seen an increase in tainted male sexual enhancement products being purchased on-line and imported into the United States. Although these types of products are being marketed as “all natural” or “100% herbal,” these products often contain undeclared pharmaceuticals such as sildenafil, vardenafil and tadalafil (the active ingredients in Viagra, Cialis and Levitra). Use of these tainted male enhancement products pose a threat to consumers because the manufacturing of most of these products is entirely unknown. In addition, these products may interact with nitrates found in some prescription drugs (such as Nitroglycerin) and may lower blood pressure to dangerous levels.

Please review the following safety tips when considering purchasing medication on-line or using any “herbal” or “natural” products:

· Consult with your doctor prior to taking any medication; self-diagnosis places the purchaser at risk of drug interactions, incorrect dosage and allergic reactions.
· Fill your prescriptions at your local pharmacy or through a reputable on-line retailer.
· Beware of websites that claim to sell prescription drugs without a prescription – this is against the law!
· Don’t be misled by claims of “all natural” ingredients. “Herbal” sexual enhancement products promising rapid effects such as working in minutes or hours, or long-lasting effects such as 24 hours to 72 hours are likely tainted with prescription drug.
SOURCE: CBP

LG Takes on Sony

LG Electronics, Inc., (LG) of Korea filed a complaint with the U.S. International Trade Commission (USITC) requesting an investigation pursuant to Section 337. The complaint alleges patent infringement of certain electronic devices having a Blu-ray disc player and components thereof and certain digital televisions and components thereof.

The USITC has identified the following as respondents in this investigation:

Sony Corporation of Japan;
Sony Corporation of America of New York, NY;
Sony Electronics, Inc., of San Diego, CA;
Sony Computer Entertainment, Inc., of Japan; and
Sony Computer Entertainment America LLC of Foster City, CA.
By instituting an investigation, the USITC has not yet made any decision on the merits of the case. One of the USITC’s six administrative law judges (ALJ) will make an initial determination as to whether there is a violation of Section 337; that initial determination is subject to review by the Commission. The USITC will set a target date for when the investigation will be complete within the first 45 days of the investigation. USITC remedial orders in Section 337 cases are effective when issued and become final 60 days after issuance unless disapproved for policy reasons by the U.S. Trade Representative within that 60-day period.

A Section 337 victory for a party could possibly mean a complete U.S. ban on the importation of the infringing product, by stopping the affected products at the border.
SOURCE: USITC

Massachusetts Antique Dealer Sentenced to 33 Months

David L. Place, owner of Manor House Antiques Cooperative in Nantucket, Mass., was sentenced to 33 months in prison for illegally importing and trafficking in Narwhal tusks and Sperm Whale teeth.

A federal jury in Boston convicted Place of eight counts including conspiracy, Lacey Act violations and smuggling for buying and illegally importing Sperm Whale teeth and Narwhal tusks into the United States, as well as selling the teeth and tusks after their illegal importation. The market value of the teeth and tusks illegally imported and sold by Place was determined to be between $200,000 and $400,000. One of Place’s co-conspirators, Andrei Mikhalyov of Odessa, Ukraine, pleaded guilty in federal court in Boston on related charges. Mikhalyov served a nine month prison sentence and was deported to the Ukraine.

Sperm Whales are listed as “endangered” under the Endangered Species Act (ESA), and are listed on Appendix I of the Convention on International Trade in Endangered Species of Wild Fauna and Flora (CITES). Narwhals are listed as “threatened” under the ESA, and are listed on Appendix II of CITES. It is illegal to import parts of either the Sperm Whale or the Narwhal into the United States without the requisite permits/certifications, and without declaring the merchandise at the time of importation to U.S. Customs and Border Protection and the U.S. Fish and Wildlife Service.
SOURCE: DOJ

Former UBS Client Sentenced for Hiding Millions in Offshore Bank Accounts – Paid $2.1 Million Penalty

Arthur Joel Eisenberg of Seattle was sentenced today to three years probation by U.S. District Court Judge John Coughenour, the Justice Department and the Internal Revenue Service (IRS) announced today. Eisenberg pleaded guilty in December 2010 to willfully filing a false individual income tax return.

Eisenberg admitted to filing a false tax return for 2004 in which he failed to report that he had an interest in or signature authority over financial accounts at UBS AG, one of Switzerland’s largest banks. He also admitted failing to report the income earned on his UBS financial accounts on his tax return. At the end of 2004, the total balance of Eisenberg’s various UBS financial accounts exceeded $3.1 million.

As part of his guilty plea, Eisenberg admitted that he opened a bank account at UBS in the Islands as early as 1983. The assets held in the account were later transferred to UBS AG in Zurich. In May of 2004, Eisenberg authorized and caused the formation of a Hong Kong corporation named East West Universal Limited and promptly transferred his assets from his existing UBS account to a new UBS account in the name of the corporation. However, Eisenberg continued to be the beneficial owner of the account and earned income from it through 2008. In 2008, Eisenberg instructed UBS to close the account and transfer the funds in the account to another large global Swiss bank headquartered in Zurich. The highest year-end balance of Eisenberg’s various accounts occurred in 2007 and exceeded $4.2 million.

Eisenberg paid a $2.1 million penalty for failing to file a Report of Foreign Bank or Financial Account (FBAR) form. An FBAR is a form separate from an income tax return that a taxpayer is required to file with the IRS every June to disclose additional information about foreign financial accounts over which the taxpayer has signature authority or other control over, and which had an aggregate value exceeding $10,000 at any time during the year.
SOURCE: DOJ

____________________________________________________________________
About Editor-In-Chief Jim Chester

Jim Chester advises entrepreneurs, start-ups and privately-held companies of all sizes in a variety of industries regarding commercial intellectual property matters, including trademark, copyright, and trade secret protection, licensing & enforcement in the US and abroad. He also assists companies in international business transactions and trade matters, and has advised clients on business deals involving over 100 countries. He is also an adjunct professor of law at Baylor University Law School, where he teaches courses on international trade law and international business transactions. He is a licensed US Customs broker, and holds an LL.M. degree in international economic law. He can be reached at 214.367.6000 or at www.kk-llp.com

 

Tags: None

Comments: Leave a comment

 

CHESTER’S Trade & Tech Law Update – Feb 2011

On behalf of Klemchuk Kubasta, LLP posted in Trade & Technology Law on Friday, February 11, 2011

Incoterms® of a New Decade

Incoterms®, the International Commercial Terms which are the internationally recognized standard and are used worldwide in international and domestic contracts for the sale of goods, underwent a major update this past year. Launched in mid-September 2010, the eighth edition of Incoterms®, aptly named “Incoterms® 2010″, became effective January 1, 2011. Some interesting changes in the new rules are described below:

1. New Terms Two new Incoterms® were introduced, replacing four old Incoterms®. The new Incoterms® DAT, Delivered at Terminal, and DAP, Delivered at Place, may be used irrespective of the agreed mode of transport. Under both new rules, delivery occurs at a named destination: in DAT, at the buyer’s disposal unloaded from the arriving vehicle (as under the former DEQ rule); in DAP, likewise at the buyer’s disposal, but ready for unloading (as under the former DAF, DES and DDU rules).

The new rules make the Incoterms® 2000 rules DES and DEQ superfluous. The named terminal in DAT may well be in a port, and DAT can therefore safely be used in cases where the Incoterms® 2000 rule DEQ once was. Likewise, the arriving “vehicle” under DAP may well be a ship and the named place of destination may well be a port: consequently, DAP can safely be used in cases where the Incoterms® 2000 rule DES once was. These new rules, like their predecessors, are “delivered”, with the seller bearing all the costs (other than those related to import clearance, where applicable) and risks involved in bringing the goods to the named place of destination.

2. Classification The 11 Incoterms® 2010 rules are presented in two distinct classes: (1) Rules for any mode or modes of transport, which includes EXW, FCA, CPT, CIP, DAT, DAP, and DDP; and (2) Rules for sea and inland waterway transport, which includes FAS, FOB, CFR, and CIF.

The first class includes the seven Incoterms® 2010 rules that can be used irrespective of the mode of transport selected and irrespective of whether one or more than one mode of transport is employed. They can be used even when there is no maritime transport at all. It is important to remember, however, that these rules can be used in cases where a ship is used for part of the carriage.

In the second class of Incoterms® 2010 rules, the point of delivery and the place to which the goods are carried to the buyer are both ports, hence the label “sea and inland waterway” rules. Under the last three Incoterms® rules, all mention of the ship’s rail as the point of delivery has been omitted in preference for the goods being delivered when they are “on board” the vessel. This more closely reflects modern commercial reality and avoids the rather dated image of the risk swinging to and fro across an imaginary perpendicular line.

3. Domestic Trade While Incoterms® rules have traditionally been used in international sale contracts where goods pass across national borders, Incoterms® 2010 rules formally recognizes that they are available for application to both international and domestic sale contracts.

4. Insurance Cover Incoterms® 2010 rules are the first version of the Incoterms® rules since the revision of the Institute Cargo Clauses and take account of alterations made to those clauses. The Incoterms® 2010 rules place information duties relating to insurance in articles A3/B3, which deal with contracts of carriage and insurance. These provisions have been moved from the more generic articles found in articles A10/B10 of the Incoterms® 2000 rules. The language in articles A3/B3 relating to insurance has also been altered with a view to clarifying the parties’ obligations in this regard.

5. Security Clearances There is heightened concern nowadays about security in the movement of goods, requiring verification that the goods do not pose a threat to life or property for reasons other than their inherent nature. Therefore, the Incoterms® 2010 rules have allocated obligations between the buyer and seller to obtain or to render assistance in obtaining security-related clearances, such as chain-of-custody information, in articles A2/B2 and A10/B10 of various Incoterms® rules.

6. Terminal Handling Charges Under Incoterms® rules CPT, CIP, CFR, CIF, DAT, DAP, and DDP, the seller must make arrangements for the carriage of the goods to the agreed destination. While the freight is paid by the seller, it is actually paid for by the buyer as freight costs are normally included by the seller in the total selling price. The carriage costs will sometimes include the costs of handling and moving the goods within port or container terminal facilities and the carrier or terminal operator may well charge these costs to the buyer who receives the goods. In these circumstances, the buyer will want to avoid paying for the same service twice: once to the seller as part of the total selling price and once independently to the carrier or the terminal operator. The Incoterms® 2010 rules seek to avoid this happening by clearly allocating such costs in articles A6/B6 of the relevant Incoterms® rules.

7. String Sales In the sale of commodities, as opposed to the sale of manufactured goods, cargo is frequently sold several times during transit “down a string”. When this happens, a seller in the middle of the string does not “ship” the goods because these have already been shipped by the first seller in the string. The seller in the middle of the string therefore performs its obligations towards its buyer not by shipping the goods, but by “procuring” goods that have been shipped. For clarification purposes, Incoterms® 2010 rules include the obligation to “procure goods shipped” as an alternative to the obligation to ship goods in the relevant Incoterms® rules.

One additional item of note with respect to changes in the Incoterms® rules, is that the INCOTERMS trademark has now been registered with the U.S. Patent and Trademark Office. Thus, the International Chamber of Commerce has also issued guidance on how the ® symbol should be included after each use of the term “INCOTERM.”

If you have questions about Incoterms® 2010 or domestic and/or international trade, Contact Us.

SOURCE: International Chamber of Commerce

CUSTOMS IP ENFORCEMENT

The CBP strategic approach to intellectual property rights enforcement is multi-layered and includes seizing counterfeit goods at the border, pushing the border outward through audits of infringing importers and cooperation with our international trading partners, and partnering with industry and other government agencies to enhance these efforts. CBP officers and import specialists are aggressively working together to intercept shipments containing counterfeit and pirated items.

Recent CBP IP counterfeit seizures at the US border include:

– CBP in Los Angeles Seize 4.4 Million Counterfeit Cigarettes U.S. Customs and Border Protection import specialists and officers at the Los Angeles/Long Beach seaport complex intercepted and seized a shipment of counterfeit Marlboro cigarettes arriving from China with an estimated manufacturer’s suggested retail price of $1.1 million. As an attempt to mislead CBP and circumvent U.S. federal laws, smugglers falsely invoiced the shipment as “hang tags and hang plugs”. Examination of the merchandise revealed a total of 22,170 cartons equivalent to over 4.4 million individual cigarettes in violation of the Marlboro Light 100′s and Marlboro Gold Pack trademarks.

– Detroit CBP Seize $2 Million in Fake Goods Over 10-week Period U.S. Customs and Border Protection officers at the Detroit Metropolitan Airport port of entry made 192 seizures of fake merchandise worth more than $2 million during a 78-day period beginning Nov. 1, 2010 and ending Jan. 17. On Nov. 1, CBP officers working air cargo operations at Detroit Metropolitan Airport seized a shipment of counterfeit sunglasses with a manufacturer’s suggested retail price of $17,200. And then they got busy. During the next 77 days they made another 191 seizures of fake or counterfeit merchandise being shipped through the airport with an MSRP of more than $2 million. Included in the goods were counterfeit Coach purses, DVDs, Wii and XBox accessories, cell phones, car parts (including airbags) and counterfeit sports jerseys representing the National Basketball Association, Major League Baseball, National Football League, National Hockey League and several collegiate programs.

If you have questions about protecting or enforcing intellectual property rights or complying with international trade laws, Contact Us.

SOURCE: CBP
Iranian National Charged With Illegally Exporting Specialized Metals

Milad Jafari, 36, a citizen and resident of Iran has been indicted for illegally exporting and attempting to export specialized metals from the United States through companies in Turkey to several entities in Iran, including some entities that have been sanctioned for involvement in ballistic missile activities.

The indictment charges Jafari with one count of conspiracy to illegally export materials to Iran and to defraud the United States; five separate counts of illegal export and attempted illegal export of materials to Iran and five additional counts of smuggling materials. The indictment also seeks forfeiture of $177,867.92 in connection with these offenses. Jafari remains at large and is believed to be in Iran. He faces a maximum potential sentence of five years in prison for the conspiracy count, 20 years in prison for each count of illegal exports to Iran, and 10 years in prison for each smuggling count.

The U.S. Department of the Treasury also announced the designation of Jafari, several of his family members and associates, and several corporate entities in Iran and Turkey, under Executive Order 13382, which targets for sanctions proliferators of weapons of mass destruction and their supporters – thereby isolating them from the U.S. financial and commercial systems. According to the Treasury Department, Jafari and his associates operate a procurement network that provides direct support to Iran’s missile program by securing metal products, including steel and aluminum alloys, for subordinates of Iran’s Aerospace Industries Organization (AIO).

The federal indictment alleges that Jafari and others operated Macpar Makina San. Ve Ticaret A.S. (Macpar), a Turkish and Iranian business with locations in Istanbul and Tehran. Jafari and others also operated Standart Teknik Parca San. Ve Ticaret A.S. (STEP), a Turkish business with locations in Istanbul and Tehran.

From about February 2004 through about August 2007, the indictment alleges, Jafari engaged in a conspiracy to defraud the United States and to cause the export of goods to Iran in violation of the U.S. embargo and without the required U.S. government licenses for such exports. In carrying out the conspiracy, Jafari and his conspirators allegedly solicited orders from customers in Iran and purchased goods from U.S. companies on behalf of these Iranian customers. Jafari and others allegedly wired money to the U.S. companies as payment, concealed from the U.S. companies the end-use and end-users of the goods, and caused the goods to be shipped to Turkey and later to Iran.

If you have questions about complying with export laws and international trade, , Contact Us.

SOURCE: DOJ
Sony v. LG
Another ITC Section 337 Battle of Titans: Sony v. LG

Sony Corporation of Japan filed a complaint with the U.S. International Trade Commission (USITC) requesting an investigation pursuant to Section 337. The complaint alleges infringement by certain mobile telephones and modems, that include such features as audio recording, digital cameras, and display of facial images associated with a specific contact, that infringe patents asserted by Sony.

The USITC has identified the following as respondents in this investigation:

LG Electronics, Inc., of South Korea;
 LG Electronics U.S.A., Inc., of Englewood Cliffs, NJ; and 
 LG Electronics Mobilecomm U.S.A., Inc., of San Diego, CA.

By instituting an investigation, the USITC has not yet made any decision on the merits of the case. One of the USITC’s six administrative law judges (ALJ) will make an initial determination as to whether there is a violation of Section 337; that initial determination is subject to review by the Commission. The USITC will set a target date for when the investigation will be complete within the first 45 days of the investigation. USITC remedial orders in Section 337 cases are effective when issued and become final 60 days after issuance unless disapproved for policy reasons by the U.S. Trade Representative within that 60-day period.

A Section 337 victory for a party could possibly mean a complete U.S. ban on the importation of the infringing product, by stopping the affected products at the border.

If you have questions about Section 337 Investigations or protecting and enforcing intellectual property rights, Contact Us.

SOURCE: USITC

Strides in Facilitating High-Tech Trade with India

The Department of Commerce took the first steps to implement the export control policy initiatives announced by President Obama and Indian Prime Minister Singh on November 8, 2010.

Commerce’s Bureau of Industry and Security published a Federal Register Notice which updates the Export Administration Regulations (EAR) in several ways, including:

· Removing several Indian space- and defense-related companies from the Entity List. Removal from the Entity List eliminates a license requirement specific to the companies, and results in the removed companies being treated the same way as any other destination in India for export licensing purposes.

· Removing India from several country groups in the EAR resulting in the removal of export license requirements that were tied to India’s placement in those country groups.

· Adding India to a country group in the EAR that consists of members of the Missile Technology Control Regime, to recognize and communicate India’s adherence to the regime, the U.S.-India strategic partnership, and India’s global non-proliferation standing.

In February, Secretary Locke will lead 24 U.S. businesses on a high-tech trade mission to India. The delegation, which also includes senior officials from the Export-Import Bank (EX-IM) and the Trade Development Agency (TDA), will make stops in New Delhi, Mumbai and Bangalore.

If you have questions about foreign trade, Contact Us.

SOURCE: BIS

Illegally Exporting Electronics

Massachusetts Resident Sentenced to 36 Months Imprisonment for Illegally Exporting Electronics

The manager of a Massachusetts electronics company was sentenced to 36 months imprisonment for conspiring over a period of 10 years to export military electronics components and sensitive electronics used in military systems to the People’s Republic of China (PRC). The Waltham, Mass., company she managed, Chitron Electronics, Inc., (Chitron-US) was fined $15.5 million stemming from their convictions last year. Several Chinese military entities were among those to whom the defendants exported the equipment.

In May 2010, Yufeng Wei, 46, of Belmont, Mass., was convicted of illegally exporting U.S. Munitions List parts and export restricted sensitive technology to the PRC over a period of 10 years, illegally exporting electronics to the PRC (between 2004 and 2007), and conspiring to file, and filing, false shipping documents with the U.S. Department of Commerce (2005-2007).

Also in May 2010, Chitron-US was convicted of unlawfully exporting military electronics and exporting restricted electronics to the PRC and illegally exporting such parts to the PRC on 26 occasions between 2004 and 2007. Earlier this week, Zhen Zhou Wu, Wei’s ex-husband and the Chinese national who owned Chitron-US, was sentenced to 97 months imprisonment for his role in the illegal export conspiracy.

On May 17, 2010, following a five-week trial, Wei and Chitron-US, along with Wu, were convicted of conspiring from 1997 to 2007 to unlawfully export to the PRC military electronics and export restricted electronics components and illegally exporting such parts to the PRC on numerous occasions between 2004 and 2007. The defendants’ illegal enterprise involved the use of Chitron-US as a front company for its parent company, Chitron, headquatered in Shenzhen, PRC. Wei used Chitron-US to procure export restricted equipment from U.S. suppliers and then export the goods to China, through Hong Kong. The exported equipment is used in electronic warfare, military radar, fire control, military guidance and control equipment, missile systems, and satellite communications.

Chitron-US sought to market electronics to Chinese military factories and military research institutes, including numerous institutes of the China Electronics Technology Group Corporation, which is responsible for the procurement, development, and manufacture of electronics for the Chinese military, including the People’s Liberation Army.

If you have questions about complying with export laws and the U.S. Munitions List, Contact Us

SOURCE: DOJ

Jim Chester

Jim Chester advises entrepreneurs, start-ups and privately-held companies of all sizes in a variety of industries regarding commercial intellectual property matters, including trademark, copyright, and trade secret protection, licensing & enforcement in the US and abroad. He also assists companies in international business transactions and trade matters, and has advised clients on business deals involving over 100 countries. He is also an adjunct professor of law at Baylor University Law School, where he teaches courses on international trade law and international business transactions. He is a licensed US Customs broker, and holds an LL.M. degree in international economic law.
——-

ABOUT KLEMCHUK KUBASTA LLP Klemchuk Kubasta LLP is an IP boutique law firm offering a full array of intellectual property related services, including litigation and enforcement of all forms of intellectual property, as well as registration and licensing of patents, trademarks, trade dress, and copyrights. The firm also provides legal services relating to trade secrets, unfair competition, domain names, e-commerce, privacy policies, Internet law, commercial litigation, business litigation, technology transactions and international business & trade. Located in Dallas, Texas, Klemchuk Kubasta LLP supports a diverse client base ranging from individuals and startups to established market-leading companies. Through its Virtual IP Counsel and Virtual General Counsel programs, the firm also has experience with technology incubators and pre-first round financing technology start-ups. Klemchuk Kubasta LLP also serves as local counsel for IP and commercial litigation cases pending in Texas, including the federal courts in the Northern and Eastern Districts of Texas. Additional information about the firm and its attorneys may be found at www.kk-llp.com

Sincerely,

Jim Chester
Klemchuk Kubasta LLP

Tags: None

Comments: Leave a comment

 

CHESTER’S Trade & Tech Law Update – January 2011

On behalf of Klemchuk Kubasta, LLP posted in Trade & Technology Law on Wednesday, January 5, 2011

Alcatel-Lucent to Pay $92 Million to Resolve FCPA Investigation

Alcatel-Lucent S.A. and three of its subsidiaries have agreed to pay a combined $92 million penalty to resolve a Foreign Corrupt Practices Act (FCPA) investigation into the worldwide sales practices of Alcatel S.A. prior to its 2006 merger with Lucent Technologies Inc.

Alcatel-Lucent was formed in late 2006 after Lucent Technologies merged with Alcatel, a French telecommunications equipment and services company. Starting in the 1990s and continuing through late 2006, Alcatel pursued many of its business opportunities around the world through subsidiaries like Alcatel CIT and Alcatel de Costa Rica using third-party agents and consultants who were retained by Alcatel Standard. This business model was shown to be prone to corruption, as consultants were repeatedly used as conduits for bribe payments to foreign officials and business executives of private customers to obtain or retain business in many countries.

Alcatel-Lucent’s three subsidiaries paid millions of dollars in improper payments to foreign officials for the purpose of obtaining and retaining business in Costa Rica, Honduras, Malaysia and Taiwan. In addition to the improper payments, Alcatel-Lucent also admitted that it violated the internal controls and books and records provisions of the FCPA related to the hiring of third-party agents in Kenya, Nigeria, Bangladesh, Ecuador, Nicaragua, Angola, Ivory Coast, Uganda and Mali. Overall, Alcatel-Lucent admitted that the company earned approximately $48.1 million in profits as a result of these improper payments.

Specifically, Alcatel CIT won three contracts in Costa Rica worth a combined total of more than $300 million as a result of corrupt payments to government officials and from which Alcatel reaped a profit of more than $23 million. Alcatel CIT wired more than $18 million to two consultants in Costa Rica, which had been retained by Alcatel Standard, in connection with obtaining business in that country. According to court documents, more than half of this money was then passed on by the consultants to various Costa Rican government officials for assisting Alcatel CIT and Alcatel de Costa Rica in obtaining and retaining business. As part of the scheme, the consultants created phony invoices that they then submitted to Alcatel CIT. According to court documents, senior Alcatel executives approved the retention of and payments to the consultants despite obvious indications that the consultants were performing little or no legitimate work.

In a related case, two former Alcatel executives, Christian Sapsizian, a French citizen and Alcatel CIT executive, and Edgar Valverde Acosta, a Costa Rican citizen and president of Alcatel de Costa Rica, were charged in March 2007 with conspiring to violate the FCPA, making corrupt payments in violation of the FCPA, and laundering the bribe payments through a third-party. Sapsizian was arrested in Miami in late 2006 and pleaded guilty on June 6, 2007, to FCPA violations. He was sentenced on Sept. 23, 2008, in the U.S. District Court for the Southern District of Florida to 30 months in prison. Sapsizian admitted that from February 2000 through September 2004, he conspired with Valverde and others to make millions of dollars in bribe payments to Costa Rican officials in order to obtain a telecommunications contract on behalf of Alcatel. Valverde remains a fugitive, and is considered innocent until proven guilty in a court of law.

In a related matter, the U.S. Securities and Exchange Commission (SEC) reached a settlement in which Alcatel-Lucent consented to the entry of a permanent injunction against FCPA violations and agreed to pay $45,372,000 in disgorgement and prejudgment interest. Alcatel-Lucent also agreed with the SEC to comply with certain undertakings regarding its FCPA compliance program.

In January 2010, Alcatel-Lucent also agreed to pay $10 million to settle a corruption case brought by the government of Costa Rica arising out of the bribery of Costa Rican officials by the company. The settlement marked the first time in Costa Rica’s history that a foreign corporation agreed to pay the government damages for corruption.

SOURCE: DOJ

CUSTOMS IP ENFORCEMENT NEWS

The CBP strategic approach to intellectual property rights enforcement is multi-layered and includes seizing counterfeit goods at the border, pushing the border outward through audits of infringing importers and cooperation with our international trading partners, and partnering with industry and other government agencies to enhance these efforts. CBP officers and import specialists are aggressively working together to intercept shipments containing counterfeit and pirated items.

Recent CBP IP counterfeit seizures at the US border include:

-Children’s Ride-On Toy Vehicles Bumped Off Santa’s List Los Angeles, Ca. CBP Seizes $4.7 Million in Toy Vehicles U.S. Customs and Border Protection officers seized 55,080 children’s ride-on toy vehicles, containing batteries underneath the seats, with counterfeit Underwriters Laboratories component certification “RU” markings. CBP officers discovered the infringing merchandise in 14 shipments arriving from China. The manufacturer’s suggested retail price for the 55,080 units is $4,708,954 with a domestic value of $2,034,636.

-CBP Seize More Than 10,000 Poor Quality, Counterfeit Toys Before Christmas U.S. Customs and Border Protection officers and import specialists at the Otay Mesa cargo port of entry identified and seized 13,843 counterfeit toys that violated intellectual property rights in the months leading up to the December holiday season. Beginning with a shipment during the last week of October, and ending with a shipment stopped at the beginning of December, import specialists identified 5,472 counterfeit Barbie dolls, 24 counterfeit Cinderella dolls, 12 counterfeit Bratz dolls, 4,692 counterfeit Barbie medical playsets, 1,600 counterfeit hand-held Tetris electronic games, 36 counterfeit Lego blocks sets, 20 Chargers Bolt masks, 10 Superman mask/cape combinations, nine Spiderman mask/cape combinations, 816 toy cell phones with counterfeit Barbie, Mickey Mouse, and Winnie the Pooh images, and 1,152 counterfeit Disney’s 101 Dalmatians toy dogs. Together, the toys had an estimated domestic value of about $26,700, the value of the toy to the company, and a manufacturer’s suggested retail price of $198,000, the approximate price of what the toys would sell for to consumers in the United States.

– Milwaukee CBP Seize $400,000 in Counterfeit Jerseys, Jewelry and More U.S. Customs and Border Protection (CBP) officers recently seized over $400,000 worth of counterfeit merchandise during an Intellectual Property Rights (IPR) enforcement operation during the last month. CBP staff at DHL and FedEx facilities made 83 seizures of IPR infringing merchandise including NFL and NBA jerseys, counterfeit Tiffany jewelry, footwear, handbags, DVDs and workout equipment. The Manufacture Suggested Retail Price (MSRP) of the items seized totaled $431,587.

– CBP in Portal, N.D. Seize over $445,000 in Counterfeit Glasses U.S. Customs and Border Protection officers at the Portal, N.D. port of entry seized a shipment of counterfeit goods with an estimated domestic value of $6,718 and a manufacturer’s suggested retail price of $446,486. On November 15, a rail shipment was targeted and examined for possible trademark violations. During the examination of the rail container, 3,309 pieces of counterfeit sunglasses and reading glasses were discovered. The merchandise, which violated intellectual property rights, was seized by CBP.

If you have questions about protecting or enforcing intellectual property rights or complying with international trade laws, Contact Us. SOURCE: CBP

UK Citizen Pleads Guilty to Bribery, Faces 60 Months and Forfeits over $725,000

Wojciech J. Chodan, a former commercial vice president and consultant to a United Kingdom subsidiary of Kellogg, Brown & Root Inc. (KBR), recently pleaded guilty to conspiring to violate the Foreign Corrupt Practices Act (FCPA) for his participation in a decade-long scheme to bribe Nigerian government officials to obtain engineering, procurement and construction (EPC) contracts. The EPC contracts to build liquefied natural gas (LNG) facilities on Bonny Island, Nigeria, were valued at more than $6 billion.

Chodan, 72, a U.K. citizen, was extradited from the United Kingdom to the United States on Dec. 3, 2010, and pleaded guilty in U.S. District Court in Houston before U.S. District Judge Keith P. Ellison to one count of conspiracy to violate the FCPA. Chodan was originally charged on Feb. 17, 2009. Sentencing has been scheduled for Feb. 22, 2011. Chodan faces a maximum penalty of 60 months in prison on the conspiracy charge. As part of his plea agreement, Chodan agreed to forfeit $726,885.

KBR, Technip S.A. (Technip), Snamprogetti Netherlands B.V. (Snamprogetti) and a Japanese engineering and construction company were part of a four-company joint venture that was awarded four EPC contracts by Nigeria LNG Ltd. (NLNG) between 1995 and 2004 to build LNG facilities on Bonny Island. Chodan admitted that from approximately 1994 through June 2004, he and his co-conspirators agreed to pay bribes to Nigerian government officials, including top-level executive branch officials, in order to obtain and retain the EPC contracts. Chodan recommended and agreed to the joint venture’s hiring of two agents, Jeffrey Tesler and a Japanese trading company, to pay the bribes. During the course of the bribery scheme, the joint venture paid approximately $132 million to a Gibraltar corporation controlled by Tesler and more than $50 million to the Japanese trading company. At crucial junctures preceding the award of EPC contracts, Chodan and his co-conspirators met with successive holders of a top-level office in the executive branch of the Nigerian government to ask the office holders to designate a representative with whom the joint venture should negotiate the bribes to Nigerian government officials.

In related cases, KBR’s former CEO, Albert “Jack” Stanley, pleaded guilty in September 2008 to conspiring to violate the FCPA for his participation in the bribery scheme, while KBR’s successor company, Kellogg Brown & Root LLC, pleaded guilty in February 2009 to FCPA-related charges for its participation in the scheme to bribe Nigerian government officials. Kellogg Brown & Root LLC was ordered to pay a $402 million fine and to retain an independent compliance monitor for a three-year period to review the design and implementation of its compliance program. In addition, Tesler was indicted in February 2009 on FCPA-related charges for his alleged participation in the bribery scheme, and the United States has requested his extradition from the United Kingdom.

In another related criminal case, the department filed a deferred prosecution agreement and criminal information against Technip on June 28, 2010. According to that agreement, Technip agreed to pay a $240 million criminal penalty and to retain an independent compliance monitor for two years. On July 7, 2010, the department filed a deferred prosecution agreement and criminal information against Snamprogetti Netherlands BV, which also agreed to pay a $240 million criminal penalty.

If you have questions about the Foreign Corrupt Practices Act, Contact Us SOURCE: DOJ

Dallas Parties Among Those Targeted by Louis Vuitton in a USITC Complaint

Louis Vuitton Malletier S.A. of France and Louis Vuitton U.S. Manufacturing Inc. of San Dimas, CA filed a complaint with the U.S. International Trade Commission (USITC) requesting an investigation pursuant to Section 337. The complaint alleges trademark infringement of certain handbags, luggage, accessories, and related packaging that bear certain monogram designs.

The USITC has identified the following as respondents in this investigation:

T &T Handbag Industrial Co., Ltd., of China; Sanjiu Leather Co., Ltd. of China; Meada Corporation (d/b/a Diophy International) of El Monte, CA; Pacpro, Inc., of El Monte, CA; Jianyong Zheng (a/k/a Jiu Gao Zheng, Jiu An Zheng, Jian Y ong Zheng, Peter Zheng) of Arcadia, CA; Alice Bei Wang (a/k/a Alice B. Wang) of Arcadia, CA; Trendy Creations, Inc., of Chatsworth, CA; The Inspired Bagger of Endicott Lane, Dallas, TX; House of Bags of Los Angeles, CA; Ronett Trading, Inc. (d/b/a Ronett Wholesale & Import) of New York, NY; EZ Shine Group, Inc. of New York, NY; Master of Handbags of Los Angeles, CA; Choicehandbag.com, Inc. (d/b/a Choice Handbags) of Los Angeles, CA; and Rasul Enterprises, LLC (d/b/a The Handbag Warehouse) of Dallas, TX.

By instituting an investigation, the USITC has not yet made any decision on the merits of the case. One of the USITC’s six administrative law judges (ALJ) will make an initial determination as to whether there is a violation of Section 337; that initial determination is subject to review by the Commission. The USITC will set a target date for when the investigation will be complete within the first 45 days of the investigation. USITC remedial orders in Section 337 cases are effective when issued and become final 60 days after issuance unless disapproved for policy reasons by the U.S. Trade Representative within that 60-day period.

A Section 337 victory for a party could possibly mean a complete U.S. ban on the importation of the infringing product, by stopping the affected products at the border.

If you have questions about Section 337 Investigations or protecting and enforcing intellectual property rights, Contact Us SOURCE: USITC

RAE Systems to Pay $1.7 Million Criminal Penalty to Resolve FCPA Violations

RAE Systems Inc. has entered into an agreement with the Department of Justice to pay a $1.7 million penalty for violations of the Foreign Corrupt Practices Act (FCPA).

RAE Systems developed and manufactured rapidly deployable, multi-sensor chemical and radiation detection monitors and networks. From 2005 to 2008, the company had significant operations in the People’s Republic of China (PRC), and sold its products and services primarily through two subsidiaries organized as joint ventures with local Chinese entities: RAE-KLH (Beijing) Co. Limited (RAE-KLH) and RAE Coal Mine Safety Instruments (Fushun) Co. Ltd. (RAE Fushun). A significant number of RAE-KLH’s and RAE Fushun’s customers were PRC government departments and bureaus, and large state-owned agencies and instrumentalities, including regional fire departments, emergency response departments and entities under the supervision of the provincial environmental agency.

RAE Systems accepted responsibility for violating the internal controls and books and records provisions of the FCPA arising from and related to improper benefits corruptly paid by employees of RAE-KLH and RAE Fushun to foreign officials in the PRC. As a result of due diligence conducted by RAE Systems before acquiring the majority of the joint venture that became known as RAE-KLH, RAE Systems was aware of improper commissions, kickbacks and “under table greasing to get deals” by employees. Yet, the company chose to implement internal controls only “halfway” so as not to “choke the sales engine and cause a distraction for the sales guys.” As a result, improper payments continued at RAE-KLH. In acquiring the majority of RAE Fushun, RAE Systems did not conduct any pre-acquisition corruption due diligence in spite of a number of red flags. It was later confirmed that corrupt benefits were also being provided by RAE Fushun. In both instances, RAE Systems learned of corrupt practices at RAE-KLH and RAE Fushun and knowingly failed to implement effective systems of internal controls and failed to properly classify the improper payments in its books and records.

If you have questions about the Foreign Corrupt Practices Act, Contact Us. SOURCE: DOJ

ICANN: New Generic Top-Level Domains and .XXX Top-Level Domain

ICANN’s Board of Directors plans an extended meeting with its Governmental Advisory Committee (GAC) to resolve the remaining concerns of the committee’s members over ICANN’s plans to expand the current number of 21 generic top-level domains (gTLDs), such as .com, .net and .gov.

The GAC is made up of representatives of more than 100 governments and is intended to give governments from around the world a voice in ICANN’s multi-stakeholder, bottom up model of policy formation.

“The GAC has made clear to the Board that it has concerns about some issues needing resolution before the launch of new gTLDs,” said Peter Dengate Thrush, ICANN’s Chair of the Board. “So we have set up a consultation in February where Directors and GAC members can engage face-to-face. We hope this will help expedite the resolution of these outstanding issues.”

Dengate Thrush said it is imperative that the launch of new gTLDs be handled cautiously and thoughtfully, and that all voices are heard and considered. For this reason, prior to launching the new gTLD program, ICANN will, in addition to consulting with the GAC:

· Take into account public comment on the final draft of the Applicant Guidebook, the economic analyses, and the final written proposals regarding issues affecting morality and public order, and make revisions to the guidebook as appropriate;

· Provide a thorough and reasoned explanation of ICANN decisions, the rationale thereof and the sources of data and information on which ICANN relied.

“We would rather do it right than do it fast,” Dengate Thrush said. ICANN’s Board also said it wants to consult with the GAC on ICM Registry’s controversial application for approval of a .xxx top-level domain. ICM Registry has stated that the domain could be used by those who produce online adult entertainment content.

SOURCE: ICANN

________________________________________

Jim Chester

Jim Chester advises entrepreneurs, start-ups and privately-held companies of all sizes in a variety of industries regarding commercial intellectual property matters, including trademark, copyright, and trade secret protection, licensing & enforcement in the US and abroad. He also assists companies in international business transactions and trade matters, and has advised clients on business deals involving over 100 countries. He is also an adjunct professor of law at Baylor University Law School, where he teaches courses on international trade law and international business transactions. He is a licensed US Customs broker, and holds an LL.M. degree in international economic law.
Read on…

ABOUT KLEMCHUK KUBASTA LLP Klemchuk Kubasta LLP is an IP boutique law firm offering a full array of intellectual property related services, including litigation and enforcement of all forms of intellectual property, as well as registration and licensing of patents, trademarks, trade dress, and copyrights. The firm also provides legal services relating to trade secrets, unfair competition, domain names, e-commerce, privacy policies, Internet law, commercial litigation, business litigation, technology transactions and international business & trade. Located in Dallas, Texas, Klemchuk Kubasta LLP supports a diverse client base ranging from individuals and startups to established market-leading companies. Through its Virtual IP Counselsm and Virtual General Counselsm programs, the firm also has experience with technology incubators and pre-first round financing technology start-ups. Klemchuk Kubasta LLP also serves as local counsel for IP and commercial litigation cases pending in Texas, including the federal courts in the Northern and Eastern Districts of Texas. Additional information about the firm and its attorneys may be found at www.kk-llp.com

Sincerely,

Jim Chester
Klemchuk Kubasta LLP

email: [email protected]
phone: 214-367-6000
web: http://www.kk-llp.com

Tags: None

Comments: Leave a comment

 

CHESTER’S Trade & Tech Law Update eNewsletter – December 2010

By TechTradeAttorney posted in Trade & Technology Law on Tuesday, December 14, 2010

Federal Courts Order Seizure of 82 Website Domains Involved in Selling Counterfeit Goods

Seizure orders have been executed against 82 domain names of commercial websites engaged in the illegal sale and distribution of counterfeit goods and copyrighted works as part of “Operation In Our Sites v. 2.0.”

The coordinated federal law enforcement operation targeted online retailers of a diverse array of counterfeit goods, including sports equipment, shoes, handbags, athletic apparel and sunglasses as well as illegal copies of copyrighted DVD boxed sets, music and software.

During the course of the operation, federal law enforcement agents made undercover purchases from online retailers suspected of selling counterfeit goods. In many instances, the goods were shipped directly into the United States from suppliers in other countries using international express mail. If the goods were confirmed as counterfeit or otherwise illegal, seizure orders for the domain names of the websites that sold the goods were obtained from U.S. magistrate judges. Individuals attempting to access the websites will now find a banner notifying them that the domain name of that website has been seized by federal authorities.

The operation builds upon “Operation in Our Sites I,” which was announced in June 2010. In that first action of this broader law enforcement initiative, authorities executed seizure warrants against nine domain names of websites offering pirated copies of first-run movies.

If you have questions about copyright or trademark infringement, Contact Us.

SOURCE: DOJ

Companies Agree to Pay over $236 Million in FCPA Penalties

A global freight forwarding company, as well as five oil and gas service companies and subsidiaries, have agreed to pay a total of $156,565,000 in criminal penalties. Also the SEC announced its settlements with these companies, which involve civil disgorgement, interest and penalties totaling approximately $80 million. The matters stem from an investigation that focused on allegations of foreign bribery in the oil field services industry.

Panalpina World Transport (Holding) Ltd., a global freight forwarding and logistics services firm based in Basel, Switzerland, and its U.S.-based subsidiary, Panalpina Inc., admitted that the companies, through subsidiaries and affiliates (collectively “Panalpina”), engaged in a scheme to pay bribes to numerous foreign officials on behalf of many of its customers in the oil and gas industry. They did so in order to circumvent local rules and regulations relating to the import of goods and materials into numerous foreign jurisdictions. Panalpina admitted that between 2002 and 2007, it paid thousands of bribes totaling at least $27 million to foreign officials in at least seven countries, including Angola, Azerbaijan, Brazil, Kazakhstan, Nigeria, Russia and Turkmenistan. Panalpina’s customers, including Shell Nigeria Exploration and Production Company Ltd. (SNEPCO), Transocean Inc. and Tidewater Marine International Inc., admitted that the companies approved of or condoned the payment of bribes on their behalf in Nigeria and falsely recorded the bribe payments made on their behalf as legitimate business expenses in their corporate books, records and accounts.

As part of the agreed resolution, the department today filed a criminal information charging Panalpina World Transport with conspiring to violate and violating the anti-bribery provisions of the FCPA. The department and Panalpina World Transport agreed to resolve the charges by entering into a deferred prosecution agreement. The department also filed a criminal information charging Panalpina Inc. with conspiring to violate the books and records provisions of the FCPA and with aiding and abetting certain customers in violating the books and records provisions of the FCPA. Panalpina Inc. has agreed to plead guilty to the charges. The agreements require the payment of a $70.56 million criminal penalty.

In related civil enforcement actions brought by the SEC, Panalpina Inc. agreed to pay approximately $11.3 million in disgorgement of profits; Royal Dutch Shell and a U.S. subsidiary, Shell International Exploration and Production Inc., agreed to pay approximately $18.1 million in disgorgement of profits and prejudgment interest; Transocean agreed to disgorge approximately $7.2 million in profits and prejudgment interest; Tidewater Inc. agreed to pay approximately $8.3 million in disgorgement of profits, prejudgment interest and civil penalties; Pride International agreed to pay approximately $23.5 million in disgorgement of profits and prejudgment interest; Noble Corporation agreed to pay approximately $5.5 million in disgorgement of profits and prejudgment interest; and GlobalSantaFe Corp. agreed to pay approximately $5.85 million in disgorgement of profits and prejudgment interest.

If you have questions about the Foreign Corrupt Practices Act, Contact Us. SOURCE: DOJ

Customs Rescinds Proposal to swap “First Sale” for “Last Sale” Valuation Rule

The U.S. Customs and Border Protection (CBP) recently withdrew its proposed interpretation of the expression “Sold For Exportation to the United States” as being valuated based on the “last sale” in a series of sales importation scenarios. The following account is a timeline of events concerning the proposed change in interpretation by the CBP from the “first sale” rule to a “last sale” rule.

The “first sale” rule, established over 15 years ago by the Court of Appeals for the Federal Circuit in Nissho Iwai American Corp. v. United States, dictates that the transaction value of the first or earlier transaction is the appropriate value for customs purposes, provided the importer can establish by sufficient evidence that the transaction was at arm’s length and that, at the time of the transaction, the merchandise was clearly “destined for exportation” to the United States.

On January 24, 2008, the Bureau of Customs and Border Protection published “Proposed Interpretation of the Expression ‘Sold for Exportation to the United States’ for Purposes of Applying the Transaction Value Method of Valuation in a Series of Sales.” In the document, CBP proposed that in a transaction involving a series of sales, the price actually paid or payable for the imported goods when sold for exportation to the United States is the price paid in the last sale occurring prior to the introduction of the goods into the United States, instead of the first (or earlier) sale. Under this proposal, transaction value will normally be determined on the basis of the price paid by the buyer in the United States. This proposed interpretation reflects the conclusions of the Technical Committee on Customs Valuation as set forth in Commentary 22.1, entitled “Meaning of the Expression ‘Sold for Export to the Country of Importation’ in a Series of Sales.” On August 21, 2008, CBP advised the trade community of new reporting requirements: effective August 20, importers are required to provide CBP with an “F” indicator next to the declared value when the declared transaction value of the imported merchandise is determined on the basis of the price paid by the buyer in a sale occurring earlier than the last sale prior to the introduction of the merchandise into the United States. Due to the complexity of the programming changes required, CBP also announced that it was delaying the reporting of the First Sale Declaration Requirement for 30 days to allow the industry time for software programming changes. Congress also passed a non-binding “sense of Congress” that no change be made before January 1, 2011.

The U.S. House of Representatives on May 14, 2008 and the U.S. Senate on May 15 adopted the conference report on H.R.2419, the “Farm Bill.” The report directed CBP to undertake a one-year monthly study of importers’ usage of the “first sale” basis for determining value prior to implementing any change to CBP’s interpretation of the term “sold for exportation to the US.”

On August 25, 2008, CBP published “First Sale Declaration Requirement; Interim Rule; Solicitation of Comments.” This document establishes an importer declaration requirement to assist CBP in gathering information for all goods entered for consumption or withdrawn from warehouses for consumption on the transaction valuation of goods imported into the United States. Effective for a one-year period beginning August 20, 2008, all importers were required to provide a declaration to CBP at the time of filing a consumption entry when, in a series of sequential sales, the transaction value of the imported merchandise is determined on the basis of the “first or earlier sale” of goods-the first sale in which the goods are “sold for exportation to the United States” or any other sale earlier than the last sale prior to the introduction of the merchandise into the United States.

On January 2, 2009, the U.S. International Trade Commission published “Investigation No. 332-505 Use of the ‘First Sale Rule’ for Customs Valuation of U.S. Imports.”

On December 23, 2009, the U.S. International Trade Commission announced the publication of “Use of the “First Sale Rule” for Customs Valuation of U.S. Imports: Investigation No. 332-505,” USITC Publication 4121.

Finally on September 29, 2010, CBP published its notice of withdrawal of the proposed interpretation of “Sold For Exportation to the United States.”

. . .and there was much rejoicing in the importing community!

If you have questions about Customs valuations and/or importing, Contact Us SOURCE: DOJ

CUSTOMS IP ENFORCEMENT NEWS

The CBP strategic approach to intellectual property rights enforcement is multi-layered and includes seizing counterfeit goods at the border, pushing the border outward through audits of infringing importers and cooperation with our international trading partners, and partnering with industry and other government agencies to enhance these efforts. CBP officers and import specialists are aggressively working together to intercept shipments containing counterfeit and pirated items.

Recent CBP IP counterfeit seizure news at the US border include:

– CBP in Champlain, NY Donates $35,000 in Seized Children’s Clothing

U.S. Customs and Border Protection recently donated over 2,300 pieces of seized children’s clothing to the St. Mary’s Mission Center, a non-profit organization in Champlain. St. Mary’s Mission Center supports families in and around the North Country. The items were seized at the Champlain Port of Entry in February after CBP officers and Import Specialists targeted a shipment of clothing destined to Hollywood. Inspection of the shipment revealed that the children’s clothing, which included shirts and pants bearing the logos of Sponge Bob Square Pants, Tweety Bird and Sylvester, contained counterfeit trademarks. The manufacturer’s suggested retail price of the clothing was $35,000.

If you have questions about protecting or enforcing intellectual property rights or complying with international trade laws, Contact Us SOURCE: CBP

Canada and India Launch Free Trade Negotiations

Canada and India launched free trade negotiations last month in New Delhi. Prime Minister Stephen Harper and Prime Minister Manmohan Singh of India announced the start of free trade negotiations during the G-20 Summit in Seoul earlier this month. That announcement and last year’s visit to India by Prime Minister Harper underscore the dedication of both countries to their bilateral trade relationship.

A recent joint study concluded that free trade could boost Canada’s economy by $6 to $15 billion, increase bilateral trade with India by 50 percent, and directly benefit Canadian sectors ranging from primary agricultural, resource-related and chemical products to transport equipment, machinery and equipment, and services. A free trade agreement would also help Canada and India meet a mutual goal of increasing bilateral trade to $15 billion annually within the next five years.

If you have questions about international trade, Contact Us. SOURCE: Foreign Affairs and International Trade Canada

Apple Targets Motorola in a USITC Complaint

Apple, Inc., f/k/a Apple Computer, Inc. of Cupertino, CA filed a complaint with the U.S. International Trade Commission (USITC) requesting an investigation pursuant to Section 337. The complaint alleges patent infringement of certain mobile devices and related software.

The USITC has identified the following as respondents in this investigation:

Motorola, Inc. of Schaumberg, IL; and Motorola Mobility, Inc., of Libertyville, IL

By instituting an investigation, the USITC has not yet made any decision on the merits of the case. One of the USITC’s six administrative law judges (ALJ) will make an initial determination as to whether there is a violation of section 337; that initial determination is subject to review by the Commission. The USITC will set a target date for when the investigation will be complete within the first 45 days of the investigation. USITC remedial orders in section 337 cases are effective when issued and become final 60 days after issuance unless disapproved for policy reasons by the U.S. Trade Representative within that 60-day period.

A Section 337 victory for a party could possibly mean a complete U.S. ban on the importation of the infringing product, by stopping the affected products at the border.

If you have questions about Section 337 Investigations or protecting and enforcing intellectual property rights, Contact Us. SOURCE: USITC

___________________________________________________
About Jim Chester

Jim Chester advises entrepreneurs, start-ups and privately-held companies of all sizes in a variety of industries regarding commercial intellectual property matters, including trademark, copyright, and trade secret protection, licensing & enforcement in the US and abroad. He also assists companies in international business transactions and trade matters, and has advised clients on business deals involving over 100 countries. He is also an adjunct professor of law at Baylor University Law School, where he teaches courses on international trade law and international business transactions. He is a licensed US Customs broker, and holds an LL.M. degree in international economic law.
Read on…

ABOUT KLEMCHUK KUBASTA LLP Klemchuk Kubasta LLP is an IP boutique law firm offering a full array of intellectual property related services, including litigation and enforcement of all forms of intellectual property, as well as registration and licensing of patents, trademarks, trade dress, and copyrights. The firm also provides legal services relating to trade secrets, unfair competition, domain names, e-commerce, privacy policies, Internet law, commercial litigation, business litigation, technology transactions and international business & trade. Located in Dallas, Texas, Klemchuk Kubasta LLP supports a diverse client base ranging from individuals and start-ups to established market-leading companies. Through its Virtual IP Counsel and Virtual General Counsel programs, the firm also has experience with technology incubators and pre-first round financing technology start-ups. Klemchuk Kubasta LLP also serves as local counsel for IP and commercial litigation cases pending in Texas, including the federal courts in the Northern and Eastern Districts of Texas. Additional information about the firm and its attorneys may be found at www.kk-llp.com

Sincerely,

Jim Chester
Klemchuk Kubasta LLP

email: [email protected]
phone: 214-367-6000
web: http://www.kk-llp.com

Tags: None

Comments: Leave a comment

 

CHESTER’S Trade & Technology Law Update – November 2010

On behalf of Klemchuk Kubasta, LLP posted in Trade & Technology Law on Tuesday, November 16, 2010

DOJ Anti-Poaching Agreement Complaint

Apple, Google, Pixar and others Settle DOJ Anti-Poaching Agreement Complaint

The Department of Justice announced that it has reached a settlement with six high technology companies – Adobe Systems Inc., Apple Inc., Google Inc., Intel Corp., Intuit Inc. and Pixar – that prevents them from entering into no solicitation agreements for employees. The department said that the agreements eliminated a significant form of competition to attract highly skilled employees, and overall diminished competition to the detriment of affected employees who were likely deprived of competitively important information and access to better job opportunities.

The six companies entered into agreements that restrained competition between them for highly skilled employees. The agreements between Apple and Google, Apple and Adobe, Apple and Pixar and Google and Intel prevented the companies from directly soliciting each other’s employees. An agreement between Google and Intuit prevented Google from directly soliciting Intuit employees.

In the high technology sector, there is a strong demand for employees with advanced or specialized skills, the department said. One of the principal means by which high tech companies recruit these types of employees is to solicit them directly from other companies in a process referred to as, “cold calling.” This form of competition, when unrestrained, results in better career opportunities, the department said.

The complaint alleges that the companies’ actions reduced their ability to compete for high tech workers and interfered with the proper functioning of the price-setting mechanism that otherwise would have prevailed in competition for employees. None of the agreements was limited by geography, job function, product group or time period. Thus, they were broader than reasonably necessary for any collaboration between the companies, the department said.

According to the DOJ complaint:

Beginning no later than 2006, Apple and Google executives agreed not to cold call each other’s employees. Apple placed Google on its internal “Do Not Call List,” which instructed employees not to directly solicit employees from the listed companies. Similarly, Google listed Apple among the companies that had special agreements with Google and were part of the “Do Not Cold Call” list;

Beginning no later than May 2005, senior Apple and Adobe executives agreed not to cold call each other’s employees. Apple placed Adobe on its internal “Do Not Call List” and similarly, Adobe included Apple in its internal list of “Companies that are off limits”;

Beginning no later than April 2007, Apple and Pixar executives agreed not to cold call each other’s employees. Apple placed Pixar on its internal “Do Not Call List” and senior executives at Pixar instructed human resources personnel to adhere to the agreement and maintain a paper trail;

Beginning no later than September 2007, Google and Intel executives agreed not to cold call each other’s employees. In its hiring policies and protocol manual, Google listed Intel among the companies that have special agreements with Google and are part of the “Do Not Cold Call” list. Similarly, Intel instructed its human resources staff about the existence of the agreement; and

In June 2007, Google and Intuit executives agreed that Google would not cold call any Intuit employee. In its hiring policies and protocol manual, Google also listed Intuit among the companies that have special agreements with Google and are part of the “Do Not Cold Call” list.

The proposed settlement, which if accepted by the court will be in effect for five years, prohibits the companies from engaging in anticompetitive no solicitation agreements. Although the complaint alleges only that the companies agreed to ban cold calling, the proposed settlement more broadly prohibits the companies from entering, maintaining or enforcing any agreement that in any way prevents any person from soliciting, cold calling, recruiting, or otherwise competing for employees. The companies will also implement compliance measures tailored to these practices.

SOURCE: DOJ

Combating Global Counterfeiting

After three years, and ten rounds of negotiations, a draft text of a comprehensive global counterfeiting agreement, the Anti-Counterfeiting Trade Agreement (ACTA) was recently released. The United States helped lay the foundation for the progress in Tokyo. It chaired an extra round of negotiations in Washington during August, supported the work of the Government of Japan to organize the final round at the Vice-Ministerial level, and worked hard to establish consensus on the outstanding issues.

Consistent with the Administration’s strategy for intellectual property enforcement, the ACTA negotiations aim to establish a state-of-the-art international framework that provides a model for effectively combating global proliferation of commercial-scale counterfeiting and piracy in the 21st century. The agreement will include innovative provisions to deepen international cooperation and to promote strong enforcement practices. These will ultimately help sustain American jobs in innovative and creative industries.

The participants agreed in Tokyo to work expeditiously to resolve the small number of outstanding issues that require further examination in their own countries with a view to finalizing the text of the agreement as promptly as possible. The draft Agreement will undergo final legal review and relevant domestic processes before signature.

The ACTA participants include: Australia, Canada, the European Union (EU) represented by the European Commission and the EU Presidency (Belgium) and the EU Member States, Japan, Korea, Mexico, Morocco, New Zealand, Singapore, Switzerland and the United States of America.

China, the United States’ top trading party for intellectual property rights violations, is not an ACTA participant.

The legal framework of the agreement includes the following provisions:

  • general obligations by the parties to provide effective enforcement procedures;
  • civil enforcement provisions to cover damage awards, injunctions against further infringements, recovery of legal and other costs, and destruction of infringing goods;
  • customs and other border procedures regarding import and export shipments;
  • criminal enforcement provisions, including remedies related to commercial-scale copyright piracy, remedies for the use or importation of packaging labels for counterfeit goods, and commitments regarding seizure and destruction of counterfeit goods and seizure of equipment and materials used to manufacture them as well as criminal proceeds, among other provisions; and
  • intellectual property rights enforcement in the digital environment, including requirements to provide legal regimes concerning circumvention of digital security features, among other measures.

If you have questions about complying with the Global Counterfeiting, Contact Us. SOURCE: USTR; U.S. Department of Chamber

Texas Software Pirate Sentenced to 18 Months in Prison

Todd Alan Cook, 24, of Wichita Falls, Texas, was sentenced to 18 months for selling more than $1 million worth of pirated computer software through the Internet, in violation of criminal copyright infringement laws. Cook was also sentenced to three years of supervised release and was ordered to pay restitution in the amount of $599,771.

From July 2006 through May 2008, Cook, his father Robert D. Cook and another individual operated several websites that sold large volumes of counterfeit software with a combined retail value of approximately $1 million. Cook admitted that he and his co-conspirators used these websites to sell downloadable counterfeit software without authorization from the copyright owners.

Including Todd Cook’s guilty plea, the department has obtained 46 convictions involving online auction and commercial distribution of counterfeit software.

If you have questions about copyright laws and copyright infringement, Contact Us SOURCE: DOJ

Two DVD and CD Counterfeiters Convicted

Mamadou Sadio Barry and Moussa Baradji were convicted for their involvement in a counterfeit DVD and CD ring. A federal jury found Sadio Barry and Baradji each guilty of two counts of criminal copyright infringement.

The evidence at trial established that Baradji and Sadio Barry used space in warehouses located on Metropolitan Parkway in Atlanta to “burn” or copy DVDs and CDs. Baradji and Sadio Barry produced and paid others to produce counterfeit labels and packaging and to assemble the final product, which Baradji and Sadio Barry sold through their retail stores. According to the evidence at trial, the defendants’ warehouse operation reproduced thousands of CDs and DVDs per week for distribution. The retail value of the corresponding authentic CDs and DVDs is at least $12 per CD and $19 per DVD.

The criminal copyright infringement charge carries a maximum sentence of five years in prison per count. In addition, the defendants could be fined up to $250,000 on each count.

Six of the defendants charged in the May 2009 indictment have pleaded guilty and one defendant is scheduled to begin trial in 2011. Two defendants, Alphadio Bah and Mamadou Simakha, are fugitives. The charges against two defendants who were on trial with Barry and Baradji, Sulaiman Jalloh and Bademba Barry, were dismissed by the court during trial. The jury acquitted a fifth defendant, Oumar Diallo, who was charged with trafficking in counterfeit labels for copyrighted materials.

If you have questions about copyright laws and copyright infringements, Contact Us SOURCE: DOJ

CUSTOMS IP ENFORCEMENT NEWS

The CBP strategic approach to intellectual property rights enforcement is multi-layered and includes seizing counterfeit goods at the border, pushing the border outward through audits of infringing importers and cooperation with our international trading partners, and partnering with industry and other government agencies to enhance these efforts. CBP officers and import specialists are aggressively working together to intercept shipments containing counterfeit and pirated items.

Recent CBP IP counterfeit seizures at the US border include:

– CBP in Dallas, Tx. Seize over $1 Million in Electronics U.S. Customs and Border Protection officers at Dallas/Fort Worth International Airport seized 150 cartons of digital cameras bearing counterfeit SanDisk markings and in a separate instance seized three shipments of RCA stereos with iPod markings. The counterfeit digital cameras, seized Oct. 14, containing the SanDisk markings have an manufacturer’s suggested retail value of $291,000. The other three shipments, seized Oct. 19, consisted of 5,040 RCA stereos with the iPod trademark with an suggested retail value of $1,002,960.

– Los Angeles CBP Seize $60,000 in Counterfeit NFL, NBA, and MLB Jerseys U.S. Customs and Border Protection (CBP) officers and import specialists confiscated fifteen parcels from China containing counterfeit NFL, NBA and MLB jerseys with an estimated manufacturer’s suggested retail price (MSRP) of $61,333.

The trade in these illegitimate goods is associated with smuggling and other criminal activities, and often funds criminal enterprises. In Fiscal Year 2009, 14,841 seizures of counterfeit and pirated goods with a domestic value of $270.7 million were intercepted at U.S. ports of entry.

If you have questions about protecting or enforcing intellectual property rights or complying with international trade laws, Contact Us. SOURCE: CBP

No Deal Reached Between the U.S. and South Korea

United States Trade Representative Ron Kirk and Korean Trade Minister Kim Jong-hoon concluded their meeting to discuss the U.S.-Korea trade agreement. The officials are working to resolve the beef and auto issues the Group of 20 nations summit meeting in Seoul on November 10.

The United States and South Korea signed the trade pact in 2007. Since taking office, President Obama has expressed his desire to correct issues with the pact. These issues are primarily concerns that U.S. automakers Ford and Chrysler have about the agreement, and restrictions on U.S. beef imports that still remain after several cases of mad cow disease found in the United States years ago.

South Korea exports more than 600,000 cars to the United States every year, but imports less than 10,000 American cars. Ford and Chrysler complain the pact fails to tear down regulatory and other hidden barriers it says have caused the huge imbalance in auto trade.

The two trade officials are purported to meet again before the G20 summit.

If you have questions about international trade, Contact Us. SOURCE: USTR

LG and Vizio’s Section 337 Battle Continues

Following the complaint filed by Vizio, Inc., of Irvine, CA, LG Electronics, Inc., (LG) of Korea filed its own complaint with the U.S. International Trade Commission (USITC) requesting an investigation pursuant to Section 337. The complaint alleges patent infringement of certain digital televisions and components thereof.

The USITC has identified the following as respondents in this investigation: Vizio, Inc., of Irvine, CA; AmTRAN Technology Co., Ltd., of Taiwan; and AmTRAN Logistics, Inc., of Irvine, CA.

By instituting an investigation, the USITC has not yet made any decision on the merits of the case. One of the USITC’s six administrative law judges (ALJ) will make an initial determination as to whether there is a violation ofSection 337; that initial determination is subject to review by the Commission. The USITC will set a target date for when the investigation will be complete within the first 45 days of the investigation. USITC remedial orders in Section 337 cases are effective when issued and become final 60 days after issuance unless disapproved for policy reasons by the U.S. Trade Representative within that 60-day period.

A Section 337 victory for a party could possibly mean a complete U.S. ban on the importation of the infringing product, by stopping the affected products at the border.

If you have questions about ection 337 Investigations or protecting and enforcing intellectual property rights, Contact Us. SOURCE: USITC

Illegal Trade in Elephant Ivory and Cuban Cigars

Joseph Barringer, 55, the owner of a Florida pool cue company, pleaded guilty in federal court in Orlando to violating the Endangered Species Act in connection with the illegal export of African elephant ivory through an online auction site.

Barringer, the owner of Cue Components, located in New Smyrna Beach, Fla., manufactured custom pool cues and parts, including parts made from elephant ivory. Although his company’s Web page stated that he did not sell overseas because it was illegal, he sold ivory laden pool cues to an undercover police officer of the London Metropolitan Police (Scotland Yard) who was working in coordination with special agents from the U.S. Fish and Wildlife Service and U.S. Immigration and Customs Enforcement.

Federal agents seized 197 pounds of elephant ivory and cut ivory pieces, according to documents filed in court, including 24 elephant tusk tips. Agents also seized more than 1,800 Cuban cigars which are considered smuggled because they are prohibited in the U.S. and can only be brought into the country via clandestine means.

According to the plea agreement, there is not evidence enough to establish whether or not the ivory was illegally smuggled into the United States, although the defendant made a practice to obtain statements from sellers indicating that the ivory he purchased was lawful. However Barringer sent an email in November 2007 to his customers, including the foreign undercover police officer stating: “We’re loaded up and I do mean loaded up with beautiful Elephant ivory right now. We have 6 pairs of tusks sitting here (actually in storage). We’ve been buying and hoarding it because we don’t know when or where the next ones will come from. And for some reason, we’ve been fortunate in buying a lot of tusks this past year. I think we are to the point where we can now safely sell in some quantity.”

Barringer was charged with a misdemeanor violation of the Endangered Species Act for knowingly engaging in trade of ivory specimens, contrary to the provisions of the Convention on International Trade in Endangered Species of Wild Fauna and Flora (CITES), and without a CITES export permit and re-export certificate as a result of his sale of the pool cue containing ivory to the undercover officer in England. The maximum penalty carries a maximum sentence of one year of imprisonment, one year of supervised release, and a fine of up to $100,000, or twice the gross gain accruing from the crime.

If you have questions about ccomplying with U.S. export laws, Contact Us. SOURCE: DOJ

 

CHESTER’S World of Trade & Technology Law – October 2010

On behalf of Klemchuk Kubasta, LLP posted in Trade & Technology Law on Monday, October 18, 2010

Company to Pay $58 Million + FCPA Penalties

ABB Ltd. and two of its subsidiaries have resolved charges related to violations of the Foreign Corrupt Practices Act (FCPA). ABB Ltd’s U.S. subsidiary, ABB Inc., pleaded guilty to a criminal information charging it with one count of violating the anti-bribery provisions of the FCPA and one count of conspiracy to violating these provisions of the FCPA. The court imposed a sentence that included a criminal fine of $17.1 million. As part of ABB Inc.’s plea, it admitted that one of its business units based in Sugar Land, Texas, ABB Network Management (ABB NM), paid bribes from 1997 to 2004 that totaled approximately $1.9 million to officials at Comisión Federal de Electricidad (CFE), a Mexican state-owned utility company. ABB NM’s primary business was to provide products and services to electrical utilities, many of them foreign state-owned utilities, for network management in power generation, transmission and distribution. In exchange for the bribe payments ABB NM received contracts worth more than $81 million in revenue. ABB Inc. admitted that the bribe payments were made through various intermediaries, including a Mexican company that served as ABB NM’s sales representative in Mexico on its contracts with CFE. ABB Ltd. and ABB Inc. voluntarily disclosed the misconduct to the Department of Justice and have cooperated fully with the investigation.

ABB Ltd. entered into a deferred prosecution agreement and agreed to the filing of a criminal information charging its Jordanian subsidiary, ABB Ltd – Jordan, with one count of conspiracy to commit wire fraud and to violate the books and records provisions of the FCPA, and agreed to pay a criminal penalty of $1.9 million.

In a related matter, ABB Ltd. recently reached a settlement with the SEC on a complaint, and agreed to pay more than $39 million in disgorgement, pre-judgment interest and civil penalties.

If you have questions about complying with the Foreign Corrupt Practices Act, Contact Us. SOURCE: DOJ

Customs IP Enforcement News

The CBP strategic approach to intellectual property rights enforcement is multi-layered and includes seizing counterfeit goods at the border, pushing the border outward through audits of infringing importers and cooperation with our international trading partners, and partnering with industry and other government agencies to enhance these efforts. CBP officers and import specialists are aggressively working together to intercept shipments containing counterfeit and pirated items.

Recent CBP IP counterfeit seizures at the US border include:

– CBP in Cincinnati, Oh., along with ICE Seize over $21 Million in Counterfeit Articles U.S. Customs and Border Protection and U.S. Immigration and Customs Enforcement concluded an extremely successful Intellectual Property Rights enforcement operation. Operation Safe Summer ran from Sept. 7-17 seizing hundreds of counterfeit items being imported into the U.S.

As a result of the two week special operation conducted by CBP staff at the DHL hub, 611 seizures of intellectual property rights infringing merchandise were initiated. The total manufacturer’s suggested retail price of the goods seized during Operation Safe Summer was $21,475,735.38.

The products ranged from electrical articles such as power cords and lights that can catch fire or shock consumers, to medications with unknown ingredients, to batteries that may explode or leak mercury, to personal care items such as toothpaste and shampoo that may contain harmful bacteria, to computer network components, semiconductors, and machinery and parts that can cripple infrastructure vital to national security, including financial, telecommunications, defense and other essential systems.

– Los Angeles CBP Seizes $12 Million in Sham Sunglasses U.S. Customs and Border Protection officers at Los Angeles/Long Beach seized sunglasses valued at the combined manufacturer’s suggested retail price of more than $12 million. The sunglasses, in three different shipments coming from China, were confusingly similar to Coach, Gucci and Emporio Armani designer protected trademarks. CBP officers seized a total of 78,600 pairs with the domestic value of $79,920.

If you have questions about protecting or enforcing intellectual property rights or complying with international trade laws, Contact Us. SOURCE: CBP

Cracking Down on Online Counterfeiters

Trademark owners won a key victory in a recent decision issued by the Second Circuit. A major hurdle when suing counterfeiters that sell merchandise online has been the inability of a court in one jurisdiction to exercise personal jurisdiction over the counterfeiters residing in another jurisdiction. This was the issue in the case of Chloe v. Queen Bee of Beverly Hills.

In Chloe v. Queen Bee of Beverly Hills, Queen Bee and its co-owner Ubaldelli, of California, operated an online website which sold counterfeit luxury handbags. Chloe purchased a handbag via the online website and it was shipped to New York. Upon determination that the handbag was counterfeit, Chloe brought suit in New York, its North American headquarters and the location of its U.S. flagship store. The lower court dismissed the case against Ubaldelli for lack of personal jurisdiction. The U.S. Court of Appeals for the Second Circuit disagreed, stating that the facts of the present case, a highly interactive website, a shipment to the jurisdiction combined with other sales in the jurisdiction, provided a sufficient basis to show that Ubaldelli was subject to the jurisdiction of New York. The Court suggested further that in future cases, a single act of shipping a counterfeit article might be sufficient to subject defendants to the jurisdiction of a New York court.

This decision is particularly beneficial for trademark owners attempting to fight online counterfeiters, because the trademark owner may be able to successfully hail the counterfeiter into a court of a jurisdiction where the counterfeiter has sold its products, without having to face a jurisdictional challenge.

SOURCE: Chloe v. Queen Bee of Beverly Hills, 2010 U.S. App. LEXIS 16192

Freight Forwarding Companies Agree to Pay $50 Million+ for Price-Fixing

Six international freight forwarders have agreed to plead guilty and to pay criminal fines totaling $50.27 million for their roles in several conspiracies to fix a variety of fees and charges in connection with the provision of freight forwarding services for international air cargo shipments. These are the first charges filed as a result of the department’s antitrust investigation of the freight forwarding industry.

Six companies-EGL Inc., a Houston-based company; Kühne + Nagel International AG, based in Schindellegi, Switzerland (K+N); Geologistics International Management (Bermuda) Limited, based in Hamilton, Bermuda; Panalpina World Transport (Holding) Ltd., based in Basel, Switzerland; Schenker AG, based in Essen, Germany; and BAX Global Inc., a Toledo, Ohio-based company-engaged in one or more separate conspiracies to impose certain charges or fees on customers purchasing international freight forwarding services for cargo freight destined for air shipment to the United States during various periods between 2002 and 2007.

Freight forwarders manage the domestic and international delivery of cargo for customers by receiving, packaging, preparing and warehousing cargo freight, arranging for cargo shipment through transportation providers such as air carriers and steamship lines, preparing shipment documentation, and providing related ancillary services.

According to the charges, the companies carried out the various conspiracies by, among other things, agreeing during meetings and discussions to coordinate various charges and fees on customers purchasing international freight forwarding services for cargo freight destined for air shipment to the United States. The six alleged conspiracies being charged are:

  • A global conspiracy that took place from March 2003 to October 2007, to impose an Air Automated Manifest System (AAMS) fee on international air shipments of cargo to the United States, in which EGL, Geologistics and Panalpina and others participated;
  • A conspiracy that took place from July 2004 to October 2007, to impose an AAMS fee on shipments from Germany to the United States, in which K+N, Schenker and others participated;
  • A conspiracy that took place from March 2004 to October 2007, to impose an AAMS fee on shipments from Switzerland to the United States, in which K+N and others participated;
  • A conspiracy that took place from October 2002 to October 2007, to impose a New Export System (NES) fee on international air shipments from the United Kingdom to the United States, in which EGL, K+N, BAX and others participated;
  • A conspiracy that took place from July 2005 to June 2006, to impose a Currency Adjustment Factor (CAF) on international air shipments from China to the United States, in which K+N, Panalpina, Schenker, BAX and others participated; and
  • A conspiracy that took place from August 2005 to December 2007, to impose a Peak Season Surcharge (PSS) on shipments from Hong Kong to the United States, in which K+N, Panalpina, Schenker, BAX and others participated.

Each company is charged with price fixing in violation of the Sherman Act, which carries a maximum fine of $100 million per offense for corporations. The maximum fine may be increased to twice the gain derived from the crime or twice the loss suffered by the victims of the crime, if either of those amounts is greater than the statutory maximum fine.

If you have questions about complying with international trade laws, Contact Us SOURCE: DOJ

Nexus Technologies Inc. Ordered to Turn Over Assets and Cease All Operations

Three former employees and a partner of Nexus Technologies Inc. (Nexus), a Philadelphia-based company, were sentenced for their roles in a conspiracy to bribe officials of the Vietnamese government in exchange for lucrative contracts to supply equipment and technology to Vietnamese government agencies, in violation of the Foreign Corrupt Practices Act (FCPA).

The president and owner of the company, Nam Nguyen, was sentenced to 16 months in prison and ordered to serve two years of supervised release following the prison term. His sibling, An Nguyen, was sentenced to nine months in prison, followed by three years of supervised release. His other sibling, Kim Nguyen, was sentenced to two years of probation and ordered to pay a $20,000 fine. Joseph Lukas, a former partner with Nexus, also was sentenced to two years of probation and ordered to pay a $1,000 fine.

In connection with the guilty pleas, Nexus and the Nguyens admitted that from 1999 to 2008 they agreed to pay, and knowingly paid, bribes to Vietnamese government officials in exchange for contracts with the agencies and companies for which the bribe recipients worked. The bribes were falsely described as “commissions” in the company’s records. In pleading guilty, the corporation, Nexus, also acknowledged that it operated primarily through criminal means and agreed to cease operations.

If you have questions about complying with the Foreign Corrupt Practices Act, Contact Us. SOURCE: DOJ

CA Company Indicted for Bribery of Mexican Officials

Sales Agents for CA Company Indicted for Bribery of Mexican Officials

Two intermediaries were indicted for their alleged roles in a conspiracy to pay and launder bribes to Mexican government officials at the Comisión Federal de Electricidad (CFE), a state-owned utility company.

Enrique Faustino Aguilar Noriega, 56, of Cuernavaca, Mexico, was charged in a seven-count indictment returned by a federal grand jury in Los Angeles on Sept. 15, 2010, with conspiracy to violate the Foreign Corrupt Practices Act (FCPA), FCPA violations, money laundering conspiracy and money laundering. Angela Maria Gomez Aguilar, 55, of Cuernavaca, was charged with money laundering conspiracy and money laundering. The indictment alleges that Enrique and Angela Aguilar were directors of Grupo Internacional de Asesores S.A. (Grupo), which purported to provide sales representation services for companies doing business with CFE. Grupo was hired by an Azusa, Calif.,-based company to serve as its sales representative in Mexico and to obtain contracts for it from CFE.

From approximately February 2002 until March 2009, Enrique Aguilar and his co-conspirators allegedly orchestrated a scheme in which Enrique Aguilar was paid a 30 percent commission on all the goods and services the Azusa-based company sold to CFE, even though this was a significantly higher commission than previous sales representatives for the company had received. The indictment alleges that Enrique Aguilar’s co-conspirators understood that all or part of the 30 percent commission would be used to pay bribes to Mexican officials in exchange for CFE awarding contracts to the Azusa-based company. The costs of goods and services sold to CFE allegedly were increased by 30 percent to ensure that the added cost of paying Enrique Aguilar was absorbed by CFE and not the Azusa-based company.

Enrique and Angela Aguilar allegedly then laundered the money in the Grupo brokerage account to make concealed payments for the benefit of CFE officials. According to the indictment, Enrique and Angela Aguilar purchased a yacht for approximately $1.8 million and a Ferrari for $297,500 for a CFE official. According to the indictment, Enrique and Angela Aguilar also paid more than $170,000 worth of American Express bills for a CFE official and sent approximately $600,000 to relatives of a CFE official. The FCPA conspiracy charge carries a maximum penalty of five years in prison and a fine of the greater of $250,000 or twice the value gained or lost. Each of the four FCPA counts carries a maximum penalty of five years in prison and a fine of the greater of $100,000 or twice the value gained or lost. The conspiracy and substantive money laundering counts each carry a maximum penalty of 20 years in prison and a fine of the greater of $500,000 or twice the value of the property involved in the transaction. The indictment also gives notice of criminal forfeiture.

If you have questions about complying with the Foreign Corrupt Practices Act, Contact Us. SOURCE: DOJ

Sony Targeted in Section 337 Investigation

Chimei-Innolux Corporation of Taiwan, Chi Mei Optoelectronics USA, Inc., of San Jose, CA, and Innolux Corporation of Austin, TX filed a complaint with the U.S. International Trade Commission (USITC) requesting an investigation pursuant to Section 337. The complaint alleges patent infringement of certain liquid crystal display devices and products interoperable with the same, including LCD televisions, LCD computer monitors and notebook computers with LCD displays, digital cameras with LCD displays, and video gaming consoles.

The USITC has identified the following as respondents in this investigation: Sony Corporation of Japan; Sony Corporation of America of New York, NY; Sony Electronics Corporation of San Diego, CA; and Sony Computer Entertainment America, LLC of Foster City, CA.

By instituting an investigation, the USITC has not yet made any decision on the merits of the case. One of the USITC’s six administrative law judges (ALJ) will make an initial determination as to whether there is a violation of section 337; that initial determination is subject to review by the Commission. The USITC will set a target date for when the investigation will be complete within the first 45 days of the investigation. USITC remedial orders in section 337 cases are effective when issued and become final 60 days after issuance unless disapproved for policy reasons by the U.S. Trade Representative within that 60-day period.

A Section 337 victory for a party could possibly mean a complete U.S. ban on the importation of the infringing product, by stopping the affected products at the border.

If you have questions about Section 337 Investigations or protecting and enforcing intellectual property rights, Contact Us. SOURCE: USITC

Four Companies Settle Antiboycott Charges

Four Companies, including a Dallas-based Company Settle Antiboycott Charges

Four companies agreed to pay $80,700 in civil penalties to settle allegations that each violated the antiboycott provisions of the Export Administration Regulations (EAR). The antiboycott provisions of the EAR prohibit US persons from taking certain actions with intent to comply with, further or support unsanctioned foreign boycotts, including furnishing information about business relationships with or in a boycotted country or with blacklisted persons.

MultiCam, Inc. (MultiCam) located in Dallas, TX, has agreed to pay a civil penalty of $28,800 to settle eight allegations that it violated the antiboycott provisions of the EAR. The Office of Antiboycott Compliance (OAC) alleged that from 2005 through 2007, MultiCam furnished four certificates regarding the carrying vessel’s blacklist status, in violation of the antiboycott provisions of the EAR. OAC also alleged MultiCam received four requests to take an action which would have the effect of furthering or supporting a restrictive trade practice or unsanctioned foreign boycott and that MultiCam failed to report to the Department of Commerce its receipts of these requests, as required by the antiboycott provisions of the EAR. The transactions giving rise to the alleged violations involved the sale and/or transfer of goods or services (including information) from United States to UAE.

OAC Shipping Company Inc (SCI), located in Miami, has agreed to pay a civil penalty of $6,600 to settle two allegations that it violated the antiboycott provisions of the EAR. The Bureau of Industry and Security (BIS), through its OAC, alleged that during the year 2006, SCI, furnished two certificates regarding the carrying vessel’s blacklist status, in violation of the antiboycott provisions of the EAR. The transactions giving rise to the alleged violations involved the sale and/or transfer of goods or services (including information) from United States to Qatar.

Mashreqbank PSC, located in New York City, has agreed to pay a civil penalty of $12,800 to settle four allegations that it violated the antiboycott provisions of the EAR. OAC alleged that during 2008 through 2009, Mashreqbank PSC furnished four Certificates of Origin certifying that the goods were not of Israeli origin, in violation of the antiboycott provisions of the EAR. The alleged violations occurred in letter of credit transactions involving the sale and/or transfer of goods or services (including information) from the United States to Dubai. Mashreqbank PSC voluntarily disclosed the transactions to BIS and cooperated fully with the investigation.

Thermon Manufacturing Company (Thermon US), headquartered in San Marcos, Texas, has agreed to pay civil penalties totaling $32,500 to settle allegations that three subsidiaries violated the antiboycott provisions of the EAR. Thermon US voluntarily disclosed the transactions and cooperated fully in the investigation.

If you have questions about complying with Export Administration Regulations, Contact Us. SOURCE: BIS

Jim Chester

Jim Chester advises entrepreneurs, start-ups and privately-held companies of all sizes in a variety of industries regarding commercial intellectual property matters, including trademark, copyright, and trade secret protection, licensing & enforcement in the US and abroad. He also assists companies in international business transactions and trade matters, and has advised clients on business deals involving over 100 countries. He is also an adjunct professor of law at Baylor University Law School, where he teaches courses on international trade law and international business transactions. He is a licensed US Customs broker, and holds an LL.M. degree in international economic law.
Read on…

ABOUT KLEMCHUK KUBASTA LLP

Klemchuk Kubasta LLP is an IP boutique law firm offering a full array of intellectual property related services, including litigation and enforcement of all forms of intellectual property, as well as registration and licensing of patents, trademarks, trade dress, and copyrights. The firm also provides legal services relating to trade secrets, unfair competition, domain names, e-commerce, privacy policies, Internet law, commercial litigation, business litigation, technology transactions and international business & trade. Located in Dallas, Texas, Klemchuk Kubasta LLP supports a diverse client base ranging from individuals and startups to established market-leading companies. Through its Virtual IP Counselsm and Virtual General Counselsm programs, the firm also has experience with technology incubators and pre-first round financing technology start-ups. Klemchuk Kubasta LLP also serves as local counsel for IP and commercial litigation cases pending in Texas, including the federal courts in the Northern and Eastern Districts of Texas. Additional information about the firm and its attorneys may be found at www.kk-llp.com

Sincerely,

Jim Chester
Klemchuk Kubasta LLP

email: and[email protected]
phone: 214-367-6000
web: http://www.kk-llp.com

Tags: None

Comments: Leave a comment

 

CHESTER’S Trade & Technology Law Update – September 2010 Issue

On behalf of Klemchuk Kubasta, LLP posted in Trade & Technology Law on Friday, September 10, 2010

Barclays to Forfeit $298 Million for US Sanctions Violations

Barclays Bank PLC, a UK corporation headquartered in London, has agreed to forfeit $298 million to the United States and to the New York County District Attorney’s Office in connection with violations of the International Emergency Economic Powers Act (IEEPA) and the Trading with the Enemy Act (TWEA). The violations relate to transactions Barclays illegally conducted on behalf of customers from Cuba, Iran, Sudan and other countries sanctioned in programs administered by the Office of Foreign Assets Control (OFAC). Barclays agreed to forfeit the funds as part of the deferred prosecution agreements reached with the Department of Justice and the New York County District Attorney’s Office. In light of the bank’s remedial actions to date and its willingness to acknowledge responsibility for its actions, the department will recommend the dismissal of the information in two years, provided Barclays fully cooperates with, and abides by, the terms of the deferred prosecution agreement.

From as early as the mid-1990s until September 2006, Barclays knowingly and willfully moved or permitted to be moved hundreds of millions of dollars through the U.S. financial system on behalf of banks from Cuba, Iran, Libya, Sudan and Burma, and persons listed as parties or jurisdictions sanctioned by OFAC in violation of U.S. economic sanctions. Barclays followed instructions, principally from banks in Cuba, Iran, Libya, Sudan and Burma, not to mention their names in U.S. dollar payment messages sent to Barclays’ branch in New York and to other financial institutions located in the United States. Barclays routed U.S. dollar payments through an internal Barclays account to hide the payments’ connection to OFAC-sanctioned entities and amended and reformatted the U.S dollar payment messages to remove information identifying the sanctioned entities. Barclays also deliberately used a less transparent method of payment messages, known as cover payments, as another way of hiding the sanctioned entities identifying information.

OFAC has also entered into a settlement agreement with Barclays for IEEPA violations that will require Barclays to pay $176 million, which is concurrent with the forfeiture paid as a result of the deferred prosecution agreements.

If you have questions about complying with international trade laws, Contact Us. SOURCE: DOJ & OFAC

Customs IP Enforcement News

The CBP strategic approach to intellectual property rights enforcement is multi-layered and includes seizing counterfeit goods at the border, pushing the border outward through audits of infringing importers and cooperation with our international trading partners, and partnering with industry and other government agencies to enhance these efforts. CBP officers and import specialists are aggressively working together to intercept shipments containing counterfeit and pirated items.

Recent CBP IP counterfeit seizures at the US border include:

– CBP in Los Angeles, Ca., along with ICE and LAPD Seize $6.2 Million in Counterfeit Jeans U.S. Customs and Border Protection officers at the Los Angeles/Long Beach Seaport discovered merchandise which led to a joint operation between U.S. Immigration and Customs Enforcement agents and Los Angeles Police Department detectives, who on Aug. 17, seized counterfeit “True Religion” jeans with a manufacturer’s suggested retail value of more than $6.2 million.

– Pembina, ND. CBP Upgrades Its System; Donates Computers to Local Schools U.S. Customs and Border Protection recently donated used government computers to local area schools. The area port of Pembina recently concluded an upgrade of most of its computer systems. In order to carry out the CBP mission, CBP maintains the most current technology available to the federal government. Computer software upgrades and technology improvements require new computers with higher speeds and more memory. As a result, 251 computers were donated to local area schools in Minnesota and North Dakota.

If you have questions about protecting or enforcing intellectual property rights or complying with international trade laws, Contact Us. SOURCE: CBP

North Carolina Businessman Faces 5 Years in Prison

North Carolina Businessman Faces 5 Years in Prison and a $250,000 Fine for Foreign Bribery Scheme for Employer

A former Kyrgyzstan country manager for a U.S. tobacco company has pleaded guilty for his role in a conspiracy to pay bribes to officials of the Republic of Kyrgyzstan. Bobby Jay Elkin Jr., 50, of Washington, N.C., pleaded guilty to a one-count criminal information charging him with conspiracy to violate the Foreign Corrupt Practices Act (FCPA). At sentencing, Elkin faces a maximum penalty of five years in prison and a $250,000 fine.

Elkin admitted to conspiring to make corrupt payments totaling more than $3 million to foreign government officials in Kyrgyzstan from 1996 through 2004 for the purpose of securing business advantages for his employer. Elkin admitted he made cash payments to officials of the Kyrgyz tobacco authority, an instrumentality of the government, in order to obtain export licenses and to gain access to government-owned tobacco processing facilities. The payments were based on the number of kilograms of Kyrgyz tobacco Elkin’s employer purchased and processed for export. In addition, Elkin admitted he made cash payments to local government officials, known as Akims, to obtain permission to purchase tobacco from local growers, and to the Kyrgyz Tax Inspection Police to influence their decisions and avoid lengthy tax inspections and penalties.

If you have questions about complying with the Foreign Corrupt Practices Act, Contact Us SOURCE: DOJ

Tobacco Industry Companies Settles FCPA Charges

Two foreign subsidiaries of Alliance One International Inc., a global tobacco leaf merchant headquartered in Morrisville, N.C., pleaded guilty to violating various provisions of the Foreign Corrupt Practices Act (FCPA). The Department of Justice also filed FCPA charges against Universal Leaf Tabacos Ltda. (Universal Brazil), a subsidiary of Universal Corporation, which is a Virginia corporation.

Alliance One International AG (AOIAG) has agreed to pay a fine of $5,250,000 and Alliance One Tobacco Osh LLC (AOI-Kyrgyzstan) agreed to pay a fine of $4,200,000, for a total of $9.45 million in fines. AOIAG, a Swiss corporation, pleaded guilty to a three-count criminal information charging it with conspiring to violate the FCPA, violations of the anti-bribery provisions of the FCPA and violations of the books and records provisions of the FCPA. The charges relate to bribes paid to Thai government officials to secure contracts with the Thailand Tobacco Monopoly, a Thai government agency, for the sale of tobacco leaf. AOI-Kyrgyzstan, a Kyrgyzstan corporation, also pleaded guilty to a separate three-count criminal information charging the corporation with conspiracy to violate the FCPA, violations of the anti-bribery provisions of the FCPA and violations of the books and records provisions of the FCPA relating to bribes paid to Kyrgyzstan government officials in connection with its purchase of Kyrgyz tobacco. Universal Brazil has agreed to pay a $4.4 million criminal fine for conspiring to violate the anti-bribery provisions and books and records provisions of the FCPA, and with violating the anti-bribery provisions of the FCPA relating to bribes paid to Thailand Tobacco Monopoly employees for the sale of Brazilian tobacco.

Involved in these transactions were bribes totaling $1,238,750 paid to the Thailand Tobacco Monopoly officials during the course of four years. In addition, approximately $3 million in bribes were paid to various officials between 1996 and 2004 in the Republic of Kyrgyzstan.

Alliance One also settled a civil complaint filed by the U.S. Securities and Exchange Commission (SEC) and will disgorge approximately $10 million in profits to the SEC. Universal Corporation settled its civil complaint filed by the SEC and will disgorge approximately $4.5 million in profits to resolve the civil matter.

If you have questions about complying with the Foreign Corrupt Practices Act, Contact Us SOURCE: DOJ

LG Targeted by Section 337 Investigation

Vizio, Inc., of Irvine, CA filed a complaint with the U.S. International Trade Commission (USITC) requesting an investigation pursuant to Section 337. The complaint alleges patent infringement of flat panel digital televisions that can receive signals via a cable delivery system.

The USITC has identified the following as respondents in this investigation:

LG Electronics, Inc., of South Korea; and LG Electronics U.S.A., Inc., of Englewood Cliffs, NJ.

By instituting an investigation, the USITC has not yet made any decision on the merits of the case. One of the USITC’s six administrative law judges (ALJ) will make an initial determination as to whether there is a violation of Section 337; that initial determination is subject to review by the Commission. The USITC will set a target date for when the investigation will be complete within the first 45 days of the investigation. USITC remedial orders in Section 337 cases are effective when issued and become final 60 days after issuance unless disapproved for policy reasons by the U.S. Trade Representative within that 60-day period.

A Section 337 victory for a party could possibly mean a complete U.S. ban on the importation of the infringing product, by stopping the affected products at the border.

If you have questions about Section 337 Investigations or protecting and enforcing intellectual property rights, Contact Us. SOURCE: USITC

Former Army Sergeant Charged with Bribery in Afghanistan Fuel Theft Scheme

A former U.S. Army staff sergeant was charged with bribery, theft of government property and conspiracy in connection with a fuel theft scheme to solicit approximately $400,000 in bribes from a government contractor in Afghanistan.

Between December 2009 and February 2010, the former Sergeant Ringo solicited and accepted approximately $400,000 in cash payments from a government contractor in exchange for his creation and submission of fraudulent paperwork permitting that contractor to steal fuel from FOB Shank. The indictment alleges that the total value of the fuel stolen during the course of the scheme was approximately $1.4 million.

The bribery count carries a maximum penalty of 15 years in prison and a fine of the greater of $250,000, three times the value of the payments made or solicited, or twice the value gained or lost from the scheme. The theft of government property count carries a maximum penalty of 10 years in prison and a fine of the greater of $250,000 or twice the value gained or lost, while the conspiracy count carries a maximum penalty of five years in prison and a fine of the greater of $250,000 or twice the value gained or lost.

If you have questions, Contact Us. SOURCE: DOJ
———————————————–

Jim Chester

Jim Chester advises entrepreneurs, start-ups and privately-held companies of all sizes in a variety of industries regarding commercial intellectual property matters, including trademark, copyright, and trade secret protection, licensing & enforcement in the US and abroad. He also assists companies in international business transactions and trade matters, and has advised clients on business deals involving over 100 countries. He is also an adjunct professor of law at Baylor University Law School, where he teaches courses on international trade law and international business transactions. He is a licensed US Customs broker, and holds an LL.M. degree in international economic law.

ABOUT KLEMCHUK KUBASTA LLP

Klemchuk Kubasta LLP is an IP boutique law firm offering a full array of intellectual property related services, including litigation and enforcement of all forms of intellectual property, as well as registration and licensing of patents, trademarks, trade dress, and copyrights. The firm also provides legal services relating to trade secrets, unfair competition, domain names, e-commerce, privacy policies, Internet law, commercial litigation, business litigation, technology transactions and international business & trade. Located in Dallas, Texas, Klemchuk Kubasta LLP supports a diverse client base ranging from individuals and startups to established market-leading companies. Through its Virtual IP Counselsm and Virtual General Counselsm programs, the firm also has experience with technology incubators and pre-first round financing technology start-ups. Klemchuk Kubasta LLP also serves as local counsel for IP and commercial litigation cases pending in Texas, including the federal courts in the Northern and Eastern Districts of Texas. Additional information about the firm and its attorneys may be found at www.kk-llp.com

Sincerely,

Jim Chester
Klemchuk Kubasta LLP

http://r20.rs6.net/tn.jsp?llr=ouiquldab&et=1103669421879&s=525&e=0011kV2lZ5Un_7_m_j_O_OZhqQjE_5uLr1nVI8L4MwRi2hXk5cYBcqj5ddNWkEZyu088E5gGzWnRVSxilApWR46Vfx8j2_wY3BFh3AJCxwqINCllCvZApEdQOltaqORsJccgjJFNVhyP0M=

email: [email protected]
phone: 214-367-6000
web: http://www.kk-llp.com

Tags: None

Comments: Leave a comment

 

Trade & Technology Law Update – August 2010 Issue

On behalf of Klemchuk Kubasta, LLP posted in Trade & Technology Law on Tuesday, August 24, 2010

Blockbuster FCPA Case of 2010

Blockbuster FCPA Case of 2010: $1.28 Billion in Fines Assessed in Nigerian Bribe Case

Snamprogetti Netherlands B.V., (Snamprogetti) has agreed to pay a $240 million criminal penalty to resolve charges related to the Foreign Corrupt Practices Act (FCPA) for its participation in a decade-long scheme to bribe Nigerian government officials to obtain engineering, procurement and construction (EPC) contracts. The EPC contracts to build liquefied natural gas (LNG) facilities on Bonny Island, Nigeria, were valued at more than $6 billion.

The department filed a deferred prosecution agreement and a criminal information against Snamprogetti in U.S. District Court for the Southern District of Texas. The two-count information charges Snamprogetti with one count of conspiracy and one count of aiding and abetting violations of the FCPA.

Snamprogetti, Kellogg Brown & Root Inc. (KBR), Technip S.A. (Technip) and an engineering and construction company headquartered in Yokohama, Japan, were part of a four-company joint venture that was awarded four EPC contracts by Nigeria LNG Ltd. (NLNG), between 1995 and 2004 to build LNG facilities on Bonny Island.

Snamprogetti authorized the joint venture to hire two agents, Jeffrey Tesler and a Japanese trading company, to pay bribes to a range of Nigerian government officials, including top-level executive branch officials, to assist Snamprogetti and the joint venture in obtaining the EPC contracts. At crucial junctures preceding the award of EPC contracts, Snamprogetti’s co-conspirators met with successive holders of a top-level office in the executive branch of the Nigerian government to ask the office holders to designate a representative with whom the joint venture should negotiate bribes to Nigerian government officials. The joint venture paid approximately $132 million to a Gibraltar corporation controlled by Tesler and more than $50 million to the Japanese trading company during the course of the bribery scheme. According to court documents, Snamprogetti intended for these payments to be used, in part, for bribes to Nigerian government officials.

Kellogg Brown & Root LLC, pleaded guilty in February 2009 to charges related to the FCPA for its participation in the scheme to bribe Nigerian government officials. Kellogg Brown & Root LLC was ordered to pay a $402 million fine. The department also filed a deferred prosecution agreement and criminal information against Technip on June 28, 2010. According to that agreement, Technip agreed to pay a $240 million criminal penalty and to retain an independent compliance monitor for two years.

Snamprogetti and ENI also reached a settlement of a related civil complaint filed by the U.S. Securities and Exchange Commission (SEC). As part of that settlement, Snamprogetti and ENI agreed jointly to pay $125 million in disgorgement of profits relating to those violations.

If you have questions about complying with the Foreign Corrupt Practices Act, Contact Us. SOURCE: DOJ

Customs IP Enforcement News

The CBP strategic approach to intellectual property rights enforcement is multi-layered and includes seizing counterfeit goods at the border, pushing the border outward through audits of infringing importers and cooperation with our international trading partners, and partnering with industry and other government agencies to enhance these efforts. CBP officers and import specialists are aggressively working together to intercept shipments containing counterfeit and pirated items.

Recent CBP IP counterfeit seizures at the US border include:

– Otay Mesa, Ca. CBP Seizes Nearly 6,000 Counterfeit Video Games U.S. Customs and Border Protection officers seized almost 6,000 counterfeit handheld “Tetris” video games. CBP officers processing trucks exporting goods out of the United States into Mexico pulled aside two shipments labeled as “hand-held brick games.” The import specialist quickly determined that the games violated the Tetris copyright. The games were of generally poor quality and lacked any licensing information, despite using the same individual brick shapes and the same rotating lateral and downward movements of the playing pieces as the copyrighted Tetris game. CBP seized all of the games: two shipments each with 81 boxes containing 2,916 games. The total domestic value for all 5,832 games is $17,496, and the manufacturer’s suggested retail price is $69,925.

– Savannah, Ga. CBP Seizes Table Lamps Bearing Counterfeit UL Labels U.S. Customs and Border Protection at the Port of Savannah intercepted and seized 1,988 desk lamps from China. The shipment which entered through the Port of Savannah was discovered by CBP officers on June 30 and was appraised with a manufacturer’s suggested retail price of $212,680 and a declared domestic value of $48,708. Upon physical inspection of the shipping container, CBP officers discovered 500 cartons of desk lamps which were marked with counterfeit (UL) logos. The UL logo is owned by the Underwriter Laboratories Testing Company and certifies electrical safety standards of products sold in the United States.

If you have questions about protecting or enforcing intellectual property rights or complying with international trade laws, Contact Us. SOURCE: CBP

Interim Guidance for Determining Subject Matter Eligibility

Interim Guidance for Determining Subject Matter Eligibility for Process Claims in View of Bilski v. Kappos

The United States Patent and Trademark Office (USPTO) has prepared interim guidance for the patent examining corporations to use when determining subject matter eligibility under 35 U.S.C. § 101 in view of the recent decision by the United States Supreme Court in Bilski v. Kappos. The interim guidance was signed on July 21, 2010.

The published interim guidance sets forth the factors that should be considered in determining subject matter eligibility of method claims in view of the abstract idea exception. The machine-or-transformation test remains an investigative tool and is a useful starting point for determining whether a claimed invention is a process under 35 U.S.C. § 101 but, as the Supreme Court made clear, is not the sole test for determining subject matter eligibility. The interim guidance provides additional factors to aid in the determination of whether a claimed method is an abstract idea.

If you have questions about protecting or enforcing intellectual property, Contact Us SOURCE: USPTO

Charges Filed Against Irish Trading Firm

Charges Filed Against Irish Trading Firm for Exporting U.S. Military Items to Iran

A federal grand jury has charged Mac Aviation Group and its officers Thomas and Sean McGuinn of Sligo, Ireland, with purchasing F-5 fighter aircraft parts, helicopter engines and other aircraft components from U.S. firms and illegally exporting them to Iran.

The defendants were originally charged in a sealed 25-count indictment in July 2008 with two counts of conspiracy, 19 counts of violating the International Emergency Economic Powers Act (IEEPA) and Iranian Transactions Regulations, four counts of false statements, and forfeiture allegations. The indictment was unsealed in March 2009.

The two additional counts charged in the superseding indictment pertain to Mac Aviation and Tom McGuinn’s procurement of military items, specifically F-5 fighter aircraft parts, from a U.S. company and export of those parts to Iran, in violation of the Arms Export Control Act (AECA). If convicted, the defendants face a maximum sentence of 10-20 years in prison for each of the IEEPA counts, 10 years in prison for the AECA charge, 5-20 years in prison for each of the conspiracy counts, and five years in prison for each of the false statement counts.

Beginning as early as August 2005 and continuing through July 2008, the defendants solicited purchase orders from customers in Iran for U.S.-origin aircraft engines and parts and then sent requests for aircraft components to U.S. companies. These parts included helicopter engines, aircraft bolts and vanes, and canopy panels for the F-5 fighter aircraft. The defendants wired money to banks in the U.S. as payment for these parts and concealed from U.S. sellers the ultimate end-use and end-users of the purchased parts.

The defendants were previously charged with purchasing 17 helicopter engines from Rolls Royce Corporation in Indiana for $4.27 million dollars on behalf of an Iranian trading company, some of which were ultimately sent to HESA, and also causing U.S.-origin airplane vanes and bolts to be exported from the United States to Iran.

If you have questions regarding compliance with U.S. export laws, Contact Us SOURCE: DOJ

Multiple Texas Companies Settle Antiboycott

Multiple Texas Companies Settle Antiboycott Violation Allegations

The U.S. Department of Commerce’s Bureau of Industry and Security (BIS) announced that Messina, Inc. of Dallas, TX (Messina), has agreed to pay a $10,800 civil penalty to settle allegations that it violated the antiboycott provisions of the Export Administration Regulations (EAR) on two occasions.

BIS alleged that in 2004, in connection with two letter of credit transactions involving the sale and transfer of goods destined for Iraq, Messina furnished to a U.S. bank two certificates signed by the agent for a vessel that attested to the vessel’s eligibility to call at the port of a boycotting country. In doing so, Messina furnished information concerning other persons known or believed to be restricted from having any business relationship with or in a boycotting country, in violation of the antiboycott provisions of the EAR.

BIS also announced that Plane Cargo Inc. (PCI), a freight forwarder located in Houston, TX, has agreed to pay a civil penalty of $ 5,200 to settle one allegation that it violated the antiboycott provisions of the Export Administration Regulations (EAR).

BIS alleged that on one occasion in 2003, PCI, in connection with a transaction involving the sale and transfer of goods from the United States to Syria, furnished an invoice to a company in Syria that certified that the goods were not of Israeli origin in violation of the antiboycott provisions of the EAR.

If you have questions regarding compliance with U.S. export laws, Contact Us. SOURCE: BIS

Nokia, RIM, HTC and LG

Nokia, RIM, HTC and LG Targeted by Section 337 Investigation

FlashPoint Technology lodged a complaint with the U.S. International Trade Commission (USITC) requesting an investigation pursuant to Section 337. The complaint alleges patent infringement of electronic imaging devices found in portable data devices, such as digital cameras found in cell phones, laptop computers and personal digital assistants.

The USITC has identified the following as respondents in this investigation:

Nokia Corp. of Finland; Nokia Inc. of Irving, TX; Research In Motion Ltd. of Canada; Research In Motion Corp. of Irving, TX; HTC Corporation of Taiwan; HTC America, Inc., of Bellevue, WA; LG Electronics, Inc., of South Korea; LG Electronics U.S.A., Inc. of Englewood Cliffs, NJ, and LG Electronics MobileComm U.S.A., Inc., of San Diego, CA.

By instituting an investigation, the USITC has not yet made any decision on the merits of the case. One of the USITC’s six administrative law judges (ALJ) will make an initial determination as to whether there is a violation of Ssection 337; that initial determination is subject to review by the Commission. The USITC will set a target date for when the investigation will be complete within the first 45 days of the investigation. USITC remedial orders in Ssection 337 cases are effective when issued and become final 60 days after issuance unless disapproved for policy reasons by the U.S. Trade Representative within that 60-day period.

A Section 337 victory for a party could possibly mean a complete U.S. ban on the importation of the infringing product, by stopping the affected products at the border.

If you have questions about Section 337 Investigations or protecting and enforcing intellectual property rights, Contact Us. SOURCE: USITC

Jim Chester

Jim Chester advises entrepreneurs, start-ups and privately-held companies of all sizes in a variety of industries regarding commercial intellectual property matters, including trademark, copyright, and trade secret protection, licensing & enforcement in the US and abroad. He also assists companies in international business transactions and trade matters, and has advised clients on business deals involving over 100 countries. He is also an adjunct professor of law at Baylor University Law School, where he teaches courses on international trade law and international business transactions. He is a licensed US Customs broker, and holds an LL.M. degree in international economic law.
Read on…

ABOUT KLEMCHUK KUBASTA LLP

Klemchuk Kubasta LLP is an IP boutique law firm offering a full array of intellectual property related services, including litigation and enforcement of all forms of intellectual property, as well as registration and licensing of patents, trademarks, trade dress, and copyrights. The firm also provides legal services relating to trade secrets, unfair competition, domain names, e-commerce, privacy policies, Internet law, commercial litigation, business litigation, technology transactions and international business & trade. Located in Dallas, Texas, Klemchuk Kubasta LLP supports a diverse client base ranging from individuals and startups to established market-leading companies. Through its Virtual IP Counselsm and Virtual General Counselsm programs, the firm also has experience with technology incubators and pre-first round financing technology start-ups. Klemchuk Kubasta LLP also serves as local counsel for IP and commercial litigation cases pending in Texas, including the federal courts in the Northern and Eastern Districts of Texas. Additional information about the firm and its attorneys may be found at www.kk-llp.com

Sincerely,

Jim Chester
Klemchuk Kubasta LLP

email: [email protected]
phone: 214-367-6000
web: http://www.kk-llp.com

Tags: None

Comments: Leave a comment

 

CHESTER’S Trade & Technology Law Update – July 2010

On behalf of Klemchuk Kubasta, LLP posted in Trade & Technology Law on Sunday, July 18, 2010

Counterfeiters Convicted in $100+ Million in Counterfeit Luxury Goods Case: One of the Largest in U.S. History

Chong Lam, 52, and Siu Yung Chan, aka Joyce Chan, 42, were convicted for their participation in one of the largest counterfeit luxury goods operations in the United States. In January 2008, investigators seized approximately 1,500 cartons of alleged infringing items. In addition to criminal penalties, a civil penalty of up to the value that the merchandise would have had if it were genuine according to the MSRP, could be assessed under 19 U.S.C. 1526. The total value, in this case, of the corresponding authentic luxury goods manufactured by Burberry, Louis Vuitton, Gucci, Coach, Fendi, Chanel and others is estimated to be over $100 million.

A federal jury found Lam and Chan each guilty on one count of conspiracy to traffic in counterfeit goods imported from the China; two counts of trafficking in counterfeit handbags, wallets, purses and carry-on bags; and two counts of illegally smuggling counterfeit goods into the United States.

Lam and Chan and their co-conspirators operated a massive international manufacturing, import and wholesale counterfeit goods business. Lam and Chan, controlling officers of at least 13 different companies in the United States and overseas, operated at least eight separate factories dedicated to producing handbags, including enormous quantities of counterfeit bags. From 2002 until Oct. 31, 2005, U.S. Customs and Border Protection seized numerous containers of counterfeit luxury handbags and wallets imported from China. A subsequent ICE investigation disclosed that Lam and Chan imported over 300,000 counterfeit luxury handbags and wallets into the United States from China in the names of different companies.

The government is seeking forfeiture of the illicit proceeds of the enterprise, including funds that the defendants had transferred to bank accounts in the United States and overseas in the names of companies under their control, as well as three properties in New York. All of these assets were previously frozen by court order. At sentencing, Lam and Chan each face a maximum of five years in prison and a $250,000 fine for the conspiracy count, 10 years in prison and a $2 million fine for each trafficking count, and 5 years in prison and a $250,000 fine for each smuggling count.

If you have questions about protecting and enforcing intellectual property rights, Contact Us. SOURCE: DOJ

Dallas Company Settles Allegations of Antiboycott Violations

The U.S. Department of Commerce’s Bureau of Industry and Security (BIS) announced that Messina, Inc. of Dallas, TX (Messina), has agreed to pay a $10,800 civil penalty to settle allegations that it violated the antiboycott provisions of the Export Administration Regulations (EAR) on two occasions.

BIS, through its Office of Antiboycott Compliance, alleged that in 2004, in connection with two letter of credit transactions involving the sale and transfer of goods destined for Iraq that were shipped through the UAE, Messina furnished to a U.S. bank two certificates signed by the agent for a vessel that attested to the vessel’s eligibility to call at the port of a boycotting country. In doing so, Messina furnished information concerning other persons known or believed to be restricted from having any business relationship with or in a boycotting country, in violation of the antiboycott provisions of the EAR.

If you have questions about compliance with U.S. export laws, Contact Us. SOURCE: BIS

Customs IP Enforcement News

The CBP strategic approach to intellectual property rights enforcement is multi-layered and includes seizing counterfeit goods at the border, pushing the border outward through audits of infringing importers and cooperation with our international trading partners, and partnering with industry and other government agencies to enhance these efforts. CBP officers and import specialists are aggressively working together to intercept shipments containing counterfeit and pirated items.

Recent CBP IP counterfeit seizures at the US border include:

– Dallas, Tx. CBP Seizes Counterfeit PlayStation 2 and Compact Disc RW Drives U.S. Customs and Border Protection officers at the Dallas-Fort Worth International Airport intercepted and seized 62 cartons containing more than 3,000 fraudulent PlayStation 2 memory cards and 1,000 fraudulent DVD/CD-RW external drives on June 4. The cards and drives had a domestic value of $58,458 and a manufacturer’s suggested retail value of more than $150,000. The shipment originated in Hong Kong and was destined for Brazil. CBP officers inspected the shipment and found 12 cartons of PlayStation 2 memory cards and 50 cartons of external Compact Disc RW drives. Digital photos and information on the merchandise were sent to the trademark holders, and it was determined that the merchandise was counterfeit.

– Los Angeles, Ca., CBP Donates $2.3 Million in Seized Clothing U.S. Customs and Border Protection’s Los Angeles field office announced the donation of 8,048 pairs of athletic shoes, 1,873 pairs of denim jeans and 5,500 exercise pants and jackets, for a total of 15,521 pieces, to World Vision International, a non-profit organization. All the items were seized by CBP officials at the Los Angeles/Long Beach seaport complex for bearing counterfeit trademarks of various famous brands. The total estimated domestic value of the items is $349,541, with a manufacturer’s suggested retail price of more than $2.3 million. In fiscal year 2009, the Los Angeles field office donated 639,000 pairs of shoes, 3,696 men shirts, 351 TV-DVD combo sets and 41,071 pieces of clothing to charities. These items had a domestic value of $19.2 million and a manufacturer’s suggested retail price of $76.5 million.

– CBP and ICE Partner to Stop Flow of Counterfeit Goods through Savannah, Ga. More than $3 million in counterfeit goods have been seized by U.S. Customs and Border Protection and U.S. Immigration and Customs Enforcement since the beginning of fiscal year 2010 in the Port of Savannah. Stopping the flow of fake goods is a priority for the U.S. government, and CBP has designated intellectual property rights enforcement as a priority trade issue. As a result of the government’s joint effort, CBP has seized 30 shipments of counterfeit goods since Oct. 1, 2009. The goods, which were destined to be sold in American markets, had a domestic value of more than $3.1 million. In fiscal year 2009, 14,841 seizures of counterfeit and pirated goods with a total domestic value of $260.7 million were made by CBP and ICE nationwide.

If you have questions about protecting or enforcing intellectual property rights or complying with international trade laws, Contact Us SOURCE: CBP

FCPA / Bribery

Former Haitian Government Official Sentenced to 48 Months in Prison for FCPA Violations

Robert Antoine, 62, a former official of the Republic of Haiti’s state-owned national telecommunications company was sentenced to 48 months in prison for his part in a money laundering conspiracy in connection with a foreign bribery scheme. Antoine was also ordered to serve three years of supervised release following his prison term, and pay $1,852,209 in restitution and to forfeit $1,580,771.

Antoine was the director of international affairs for Haiti’s state-owned national telecommunications company, Telecommunications D’Haiti (Haiti Teleco) from May 2001 to April 2003. In that position, Antoine had primary responsibility for the relationships between U.S. telecommunications companies and Haiti Teleco. Antoine previously admitted that he accepted bribes from three U.S. telecommunications companies and thereby defrauded Haiti Teleco. To disguise the origin of these funds, Antoine admitted he laundered them through intermediary companies, including J.D. Locator Services. Juan Diaz, the president of J.D. Locator, pleaded guilty on May 15, 2009, to conspiracy to commit violations of the Foreign Corrupt Practices Act (FCPA) and money laundering. Antoine admitted that a portion of the J.D. Locator funds were also laundered by Jean Fourcand of Fourcand Enterprises, who pleaded guilty on Feb. 19, 2010, to money laundering, and who was sentenced to six months in prison for his involvement in the scheme.

Antoine acknowledged that $800,000 of these bribes were intended to be given to him by a U.S. telecommunications company for which Joel Esquenazi was the president and director, Carlos Rodriguez was the Executive Vice President, and Antonio Perez was, at times, the Controller. Perez pleaded guilty on Apr. 27, 2009, to conspiring to commit FCPA violations and money laundering. Trial for these remaining defendants is scheduled to begin July 19, 2010, in U.S. District Court in Miami.

If you have questions regarding compliance with the Foreign Corrupt Practices Act, Contact Us SOURCE: DOJ

IPR Center marks World IP Day by Seizing $263 Million in Counterfeit Goodss

The federal partners of the National Intellectual Property Rights Coordination Center (IPR Center) announced April 26 that more than $263 million worth of counterfeit merchandise was seized by law enforcement around the country in April.

More than $44 million was seized in “Operation Spring Cleaning,” a massive nationwide joint enforcement operation involving federal, state and local partners of the IPR Center. An additional $219 million was seized this month as part of a long-term ICE investigation worked with U.S. Customs and Border Protection (CBP) of counterfeit products manufactured in Asia and smuggled through the Port of Baltimore.

In “Spring Cleaning,” 45 people were arrested on federal and state counterfeiting charges and 703,684 items of counterfeit merchandise were seized in operations in dozens of cities across the United States, including Seattle, Dallas, Houston, New York, Miami, Detroit and Norfolk, Va. The seized counterfeit merchandise includes everything from counterfeit DVDs, circuit breakers, pharmaceuticals, video games and controllers, exercise equipment, sportswear and luxury goods.

At the World IP Day observance, the IPR Center announced the formation of 22 IP Theft Enforcement Teams (IPTETs) with 70 federal, state and local law enforcement agencies around the country to join the 10 federal partners of the IPR Center in collaborating on activities to more effectively combat IP theft nationwide.

If you have questions about protecting and enforcing intellectual property rights, Contact Us. SOURCE: ICE

Iranian National Pleads Guilty to Attempting to Export Munitions

Omid Khalili, an Iranian national, pled guilty to attempting to illegally export fighter jet or military aircraft parts from the United States to Iran. Khalili along with defendant Masun, whose last name is unknown, was charged in a nine-count indictment returned on Jan. 28, 2010, with conspiracy, money laundering, smuggling, as well as violations of the Arms Export Control Act and the International Emergency Economic Powers Act.

Khalili, along with his co-conspirator Masun (who remains at large), have been actively working with the Iranian government to procure military items for the Iranian government. In November 2009, Khalili and Masun contacted an undercover agent seeking parts for the military aircraft for export to Iran. These parts are replacement parts for a military aircraft that was sold to Iran by the United States before the 1979 Iranian revolution. These items may not be exported to Iran without a license from the U.S. Treasury Department due to the U.S. trade embargo on Iran and the defendants had not obtained the required U.S. government export licenses for such exports.

On Dec. 4, 2009, Khalili and Masun talked with the agent and informed him that the aircraft parts were to be sent to Iran and that, because of the U.S. embargo, they would first need to be shipped through an intermediate country. Thereafter, the defendant and other co-conspirators sent four separate cash deposits totaling in excess of $70,000 by wire from a bank in the United Arab Emirates to a bank in Alabama as down payment for the aircraft parts to be shipped to Iran. Using e-mail and telephone calls, the agents agreed to send the requested parts to the defendants.

Khalili faces a maximum penalty of ten years in prison and a $1 million fine.

If you have questions about compliance with U.S. export laws, Contact Us. SOURCE: DOJ

Texas Man Pleads Guilty to Commodities Fraud Involving Foreign Currency Trading Ponzi Scheme

Ray M. White, 51, pleaded guilty to a criminal information charging him with one count of commodities fraud. White faces a maximum prison sentence of 10 years and a maximum fine of $1 million.

White admitted that in July 2008 he contracted with an investor to sell $50,000 in commodities through CRW Management LP, which White operated in Mansfield, Texas. White admitted that, from July 2008 until January 2009, he knowingly and willfully cheated and defrauded, made false statements to, and deceived the investor by making several misrepresentations in connection with the contract to sell commodities. Specifically, White represented to the investor that his funds would be used to trade off-exchange foreign currency contracts and that CRW averaged 7 percent per week returns through off-exchange foreign currency trading.

The vast majority of the funds were never used to trade off-exchange foreign currency. White admitted that he either misappropriated investor funds or paid them to other investors in the form of Ponzi payments. White admitted losing more than $86,500 on off-exchange foreign currency trading, rather than making the 7 percent per week profits he claimed.

White solicited at least $10.9 million from late 2006 until March 2009 from more than 250 investors to trade in the foreign currency market. White used at most $93,900 of the $10.9 million he raised to trade in the foreign currency market. The remaining approximately $10.8 million was either misappropriated or returned to CRW customers as part of the Ponzi scheme. The complaint filed by the SEC states that White used the funds to finance his son’s car-racing career, to purchase a company called Hurricane Motorsports LLC, in Arlington, Texas, and to purchase a home and other real property.

If you have questions about complying with international trade laws, Contact Us. SOURCE: DOJ

Jim Chester

Jim Chester advises entrepreneurs, start-ups and privately-held companies of all sizes in a variety of industries regarding commercial intellectual property matters, including trademark, copyright, and trade secret protection, licensing & enforcement in the US and abroad. He also assists companies in international business transactions and trade matters, and has advised clients on business deals involving over 100 countries. He is also an adjunct professor of law at Baylor University Law School, where he teaches courses on international trade law and international business transactions. He is a licensed US Customs broker, and holds an LL.M. degree in international economic law.

ABOUT KLEMCHUK KUBASTA LLP

Klemchuk Kubasta LLP is an IP boutique law firm offering a full array of intellectual property related services, including litigation and enforcement of all forms of intellectual property, as well as registration and licensing of patents, trademarks, trade dress, and copyrights. The firm also provides legal services relating to trade secrets, unfair competition, domain names, e-commerce, privacy policies, Internet law, commercial litigation, business litigation, technology transactions and international business & trade. Located in Dallas, Texas, Klemchuk Kubasta LLP supports a diverse client base ranging from individuals and startups to established market-leading companies. Through its Virtual IP Counselsm and Virtual General Counselsm programs, the firm also has experience with technology incubators and pre-first round financing technology start-ups. Klemchuk Kubasta LLP also serves as local counsel for IP and commercial litigation cases pending in Texas, including the federal courts in the Northern and Eastern Districts of Texas. Additional information about the firm and its attorneys may be found at www.kk-llp.com

Sincerely,

Jim Chester

Klemchuk Kubasta LLP

email: [email protected]

phone: 214-367-6000

web: http://www.kk-llp.com

Tags: None

Comments: Leave a comment

 

CHESTER’S Trade & Technology Law Update – June 2010

On behalf of Klemchuk Kubasta, LLP posted in Trade & Technology Law on Wednesday, June 9, 2010

Intellectual Property

iSuits: Apple Inc. and USITC Section 337 Investigations

Within the past several months, the U.S. International Trade Commission (USITC) has been inundated with complaints, both by and against Apple Inc. (“Apple”).

Following the cross-complaints filed in U.S. District Court between Apple and Nokia, both claiming patent infringement, Nokia lodged a complaint with the USITC requesting an investigation pursuant to Section 337. The complaint alleges direct, contributory, and inducement of, infringement of seven Nokia patents, affecting the iPhone, iPod and MacBook product lines. Apple, in turn, filed its own complaint with the USITC, also alleging infringement of technologies relating to software used to implement operating systems, graphic systems and corresponding management of graphic processing, and relating to hardware interfaces and power management techniques. Apple requests a ban on all Nokia smart phones.

Apple and NeXt Software, Inc., both of Cupertino CA, also filed a complaint requesting an investigation pursuant to Section 337, alleging that High Tech Computer Corp. of Taiwan and HTC America, Inc. of Bellevue, WA (collectively “HTC”) and Exedea, Inc. of Houston, TX unlawfully imports into the U.S. and sells cellular phones and smart phones with hardware and software that infringes a wide-range of patents asserted by Apple. Most notably, HTC produces the iPhone competitor the Droid, along with the HTC Touch and the HTC Tilt.

HTC, in return, has filed a Section 337 complaint against Apple alleging that Apple unlawfully imports into the U.S. and sells the iPhone, iPad and iPod product lines, which infringe five patents held by HTC. The patents at issue relate generally to hardware and software used to implement telephone directories in cell phones and power management / power control method in smart phones.

Most recently, Elan Microelectronics Corporation of Taiwan (“Elan”), filed a Section 337 complaint alleging that Apple unlawfully imports into the United States and sells certain electronic devices with multi-touch enabled touchpads and touchscreens that infringe a patent asserted by Elan. The products at issue include the iPhone, the iPad and the iPod Touch, among others.

By instituting an investigation, the USITC has not yet made any decision on the merits of the case. One of the USITC’s six administrative law judges (ALJ) will make an initial determination as to whether there is a violation of section 337; that initial determination is subject to review by the Commission. The USITC will set a target date for when the investigation will be complete within the first 45 days of the investigation. USITC remedial orders in section 337 cases are effective when issued and become final 60 days after issuance unless disapproved for policy reasons by the U.S. Trade Representative within that 60-day period.

A Section 337 victory for a party could possibly mean a complete U.S. ban on the importation of the infringing product, by stopping the affected products at the border. If you have questions about Section 337 Investigations or protecting and enforcing intellectual property rights, Contact Us. SOURCE: USITC

Intellectual Property

Customs IP Enforcement News

The CBP strategic approach to intellectual property rights enforcement is multi-layered and includes seizing counterfeit goods at the border, pushing the border outward through audits of infringing importers and cooperation with our international trading partners, and partnering with industry and other government agencies to enhance these efforts. CBP officers and import specialists are aggressively working together to intercept shipments containing counterfeit and pirated items.

Recent CBP IP counterfeit seizures at the US border include:

– Chicago, Il. CBP Seizes Counterfeit Consumer Electronics U.S. Customs and Border Protection officers at Chicago O’Hare International Airport discovered and seized 25 cartons of counterfeit merchandise earlier this month. The cartons of cell phones, head phones and gaming systems, which infringed on trademarks recorded with CBP and were estimated to have a MSRP value of $1,261,556 and a domestic value of $1,168,829. The shipment originated in China and was destined for Florida. The shipment was selected for examination after CBP officers became suspicious of documentation that had been submitted for the cargo. Upon physical inspection, more than 9,400 name-brand consumer electronic items bearing the names of Sony, LG, BlackBerry and Nintendo, to name a few, were discovered. After determining the items violated trademark laws, the shipment was seized.

– Sterling, Va., Dulles CBP Makes Unusual Seizures Customs and Border Protection agriculture specialists educated three passengers, who arrived at Washington-Dulles International Airport over the course of one weekend that some things just aren’t allowed into the United States. One passenger arrived on Sunday from Vietnam with two boxes, about two pounds, of pre-packaged Birds Nest. Birds Nest is an edible nest made usually by cave swifts, and is an Asian delicacy made into soup broth. However, birds nest poses potential threats, such as Exotic Newcastle Disease and the Highly Pathogenic Avian Influenza (H5N1). Another passenger arrived from Brazil on Friday with about 60 pounds of raw beef and about 11 pounds of raw chicken. These meat products pose potential threats, such as Foot and Mouth Disease and Exotic Newcastle Disease, to American livestock. CBP didn’t fine either traveler since both claimed possessing the inadmissible products, however CBP did fine one traveler $300 who repeatedly denied possessing about four pounds of dried beef. That traveler arrived on Friday from Ethiopia. All agriculture products were incinerated.

CBP officers also seized an ivory necklace after U.S. Fish and Wildlife confirmed that the necklace was indeed made of ivory. CBP officers initially detained the necklace during a baggage inspection of a traveler from Germany on April 12.

If you have questions about protecting or enforcing intellectual property rights or complying with international trade laws, Contact Us. SOURCE: CBP

Exporting

Chinese Nationals Convicted Of Illegally Exporting Electronics

A federal jury in Massachusetts found two Chinese nationals, Zhen Zhou Wu aka Alex Wu and Yufeng Wei aka Annie Wei, guilty of illegally conspiring to violate U.S. export laws over a period of ten years, illegally exporting electronic equipment from the United States to China, and filing false shipping documents with the U.S. Department of Commerce. Several Chinese military entities were among those receiving the exported equipment. The jury also convicted Chitron Electronics, Inc. (“Chitron”), a Waltham, Massachusetts corporation, owned by Wu, which procured the equipment from U.S. suppliers and then exported the goods to China, through Hong Kong. The exported equipment is used in electronic warfare, military radar, fire control, military guidance and control equipment, and satellite communications, including global positioning systems.

Evidence presented at trial proved that the defendants illegally exported military electronic components, which are designated on the U.S. Munitions List, to mainland China, through Hong Kong, between April 2004 and June 2006. The defense articles the defendants illegally exported are primarily used in military phased array radar, electronic warfare, military guidance systems, and military satellite communications. Since 1990 the U.S. government has maintained an arms embargo against China that prohibits the export, re-export, or re-transfer of any defense article to China.

Using Chitron, Wu targeted Chinese military factories and military research institutes as customers of Chitron, including numerous institutes of the China Electronics Technology Group Corporation (“CETC”), which is responsible for the procurement, development, and manufacture of electronics for the Chinese military. Indeed, Wu referred to Chinese military entities as Chitron’s major customer since as early as 2002. Wu hired an engineer at Chitron’s Shenzhen office to work with Chinese military customers. By 2007, 25% of Chitron’s sales were to Chinese military entities.

Correspondence between Wu, Wei and other Chitron employees showed knowledge that U.S. export restricted parts were being shipped overseas to Chinese customers without having first obtained an export license. Wu instructed Wei and employees of Chitron on numerous occasions to never tell U.S. companies that parts were going overseas. At Wu and Wei’s direction, U.S. companies were told to ship all ordered products to the Chitron office located in Waltham, Massachusetts. Upon receipt by Chitron of the ordered products, the U.S. commodities were inspected by Chitron employees and consolidated into packages, which were then exported to Chitron’s Shenzhen office (located in mainland China) using freight forwarders in Hong Kong, without the required export licenses from the Department of State and Department of Commerce.

Wu and Wei both face up to 20 years imprisonment to be followed by three years supervised release and a $1 million fine. After serving their sentence, both will face deportation to China. Chitron faces up to a $1 million fine for each count in the Indictment charging them with illegal export of U.S. Munitions List items and $500,000 for each count in the Indictment charging them with illegal export of Commerce controlled electronics. Sentencing is scheduled for August 17, 2010. Co-defendant Bo Li, aka Eric Lee, previously pled guilty to making false statements on shipping documents, and faces five years imprisonment to be followed by three years supervised release and a $1 million fine. Sentencing is scheduled for July 22, 2010 in Boston.

If you have questions regarding compliance with U.S. export laws, Contact Us SOURCE: DOJ & BIS

Exporting

Former Maryland Probation Officer Convicted For Illegally Exporting Weapons

Emenike Charles Nwankwoala, age 49, of Laurel, Maryland, pled guilty to exporting arms without a license, exporting controlled goods without a license and willful delivery of a firearm to a common carrier without written notice, in connection with a scheme to export firearms and ammunition to Nigeria.

According to Nwankwoala’s plea agreement, he was employed by the State of Maryland as a Probation Officer. Investigation showed that during a six-month period beginning in December 2008, Nwankwoala purchased at least 37 Maverick Model 88 shotguns from a Federal Firearms Licensee located in Kensington, Maryland. On April 21, 2009, Nwankwoala ordered an additional 25 shotguns over the internet from Impact Guns in Ogden, Utah, a Federal Firearms Licensee. Nwankwoala stated that he was purchasing these shotguns for hunting in Nigeria. The licensee asked Nwankwoala if he had an export license, and Nwankwoala falsely indicated that he did. Nwankwoala never obtained guns through this gun store.

On May 13, 2009, Nwankwoala told an undercover agent from Immigrations and Customs Enforcement (“ICE”) that for approximately ten years he has purchased shotguns and shipped them to Nigeria in shipping containers with vehicles and hospital beds. Nwankwoala further stated that he made a large profit from these arms shipments and that he knew that he needed a license to engage in this activity but had not obtained one because he could not identify the end user as required by the United States Department of Commerce.

Nwankwoala faces a maximum sentence of 10 years in prison for exporting arms without a license; 20 years in prison for exporting controlled goods without a license; and five years in prison for willful delivery of a firearm to a common carrier without written notice.

If you have questions regarding compliance with U.S. export laws, Contact Us SOURCE: DOJ & BIS

Exporting

Taiwan Citizen Pleads Guilty to Conspiring to Export Missile Components

Yi-Lan Chen, aka Kevin Chen, 40, a Taiwan passport holder, and his Taiwan corporation, Landstar Tech Company Limited, pleaded guilty to charges of conspiring to illegally export dual-use commodities to Iran.

Chen pleaded guilty to all three counts filed against him, and Landstar Tech pleaded guilty to count 1 of the criminal information. Count 1 charges conspiracy to export and cause the export of commodities from the United States to the Islamic Republic of Iran, in violation of the embargo imposed upon that country by the United States and in violation of the International Emergency Economic Powers Act. Counts 2 and 3 charge attempts to export and cause the export of commodities from the United States to the Islamic Republic of Iran, in violation of the U.S.-Iran Embargo and in violation of the International Emergency Economic Powers Act. On the conspiracy count, Chen faces a maximum statutory term of 20 years in prison and a maximum fine of $1 million. Landstar Tech also faces a statutory maximum fine of $1 million.

Chen, by and through his corporation, Landstar Tech, communicated and coordinated with co-conspirators in the United States, Iran, Hong Kong and elsewhere and facilitated the attempted export of dual-use goods from the United States to Iran. In so doing, Chen communicated with and took requests for U.S. manufactured goods from customers in Iran. Chen and Landstar Tech then purchased those U.S.-manufactured goods from U.S. companies and misrepresented to those companies the ultimate end-user or consignee of the goods.

Chen made arrangements with a federal agent acting in an undercover capacity to have those U.S. goods hand-delivered by the undercover agent to Chen in Guam, a territory of the United States. Chen then planned to transport those goods back to Taiwan and then on to his customers in Iran. Chen and Landstar Tech also received payment for the purchase and shipment of the U.S. goods from his customers in Iran and then used funds received from the customers in Iran to pay the U.S. companies for those goods.

If you have questions regarding compliance with U.S. export laws, Contact Us. SOURCE: DOJ

Exporting

Hong Kong Citizen Extradited To Massachusetts

Indictment was unsealed in U.S. District Court in Boston, charging a Hong Kong citizen with conspiring to, and attempting to, illegally export defense articles designated on the United States Munitions List in violation of the Arms Export Control Act.

Hok Shek Chan, aka John Chan, 57, of Hong Kong, was charged in an Indictment with conspiring with two Malyasian nationals, Wong Fook Loy aka Aaron Wong and Ngo Tek Chai aka T.C. Ngo and others to knowingly and willfully export and cause the export of 10 indicators servo driven tachometers used in C-130 military flight simulators from the United States without a required license or written authorization from the Department of State. The Indictment further charges Chan and Chai with attempting to illegally export and causing the illegal export of the military flight indicators from the United States in violation of the Arms Export Control Act.

If convicted on these charges, Chan faces up to 10 years imprisonment, to be followed by three years of supervised release and a $1million fine.

If you have questions regarding compliance with U.S. export laws, Contact Us. SOURCE: DOJ & BIS

Intellectual Property

USPTO and SIPO Expand Cooperation to Reduce Patent Backlogs and Increase Efficiency

Commerce Under Secretary for Intellectual Property and Director of the United States Patent and Trademark Office (USPTO) David Kappos and China’s State Intellectual Property Office (SIPO) Commissioner Tian Lipu on May 19 signed a Memorandum of Understanding (MOU) on comprehensive bilateral cooperation on patents during a ceremony at the USPTO. A primary focus will be to build worksharing programs, including a bilateral Patent Prosecution Highway (PPH) agreement, in order to reduce both Offices’ growing backlogs and shorten patent pendency.

The MOU establishes a general framework for bilateral cooperation between the USPTO and the SIPO with an aim toward improving the administration and effectiveness of the intellectual property systems through the exchange of information as well as the development of best practices and cooperative activities.

The two offices will immediately begin planning the implementation of these cooperative projects under the MOU.

If you have questions about protecting or enforcing intellectual property, Contact Us. SOURCE: USPTO

Jim Chester

Jim Chester advises entrepreneurs, start-ups and privately-held companies of all sizes in a variety of industries regarding commercial intellectual property matters, including trademark, copyright, and trade secret protection, licensing & enforcement in the US and abroad. He also assists companies in international business transactions and trade matters, and has advised clients on business deals involving over 100 countries. He is also an adjunct professor of law at Baylor University Law School, where he teaches courses on international trade law and international business transactions. He is a licensed US Customs broker, and holds an LL.M. degree in international economic law.
Read on…

ABOUT KLEMCHUK KUBASTA LLP

Klemchuk Kubasta LLP is an IP boutique law firm offering a full array of intellectual property related services, including litigation and enforcement of all forms of intellectual property, as well as registration and licensing of patents, trademarks, trade dress, and copyrights. The firm also provides legal services relating to trade secrets, unfair competition, domain names, e-commerce, privacy policies, Internet law, commercial litigation, business litigation, technology transactions and international business & trade. Located in Dallas, Texas, Klemchuk Kubasta LLP supports a diverse client base ranging from individuals and startups to established market-leading companies. Through its Virtual IP Counselsm and Virtual General Counselsm programs, the firm also has experience with technology incubators and pre-first round financing technology start-ups. Klemchuk Kubasta LLP also serves as local counsel for IP and commercial litigation cases pending in Texas, including the federal courts in the Northern and Eastern Districts of Texas. Additional information about the firm and its attorneys may be found at www.kk-llp.com

Sincerely,

Jim Chester
Klemchuk Kubasta LLP

email: [email protected]
phone: 214-367-6000
web: http://www.kk-llp.com

Tags: None

Comments: Leave a comment

 

CHESTER’S Trade & Technology Law Update – May 2010

On behalf of Klemchuk Kubasta, LLP posted in Trade & Technology Law on Friday, May 14, 2010

FCPA Violator Receives 87-Month Prison Sentence

Charles Paul Edward Jumet of Fluvanna County, Va., was recently sentenced to 87 months in prison for paying bribes to former Panamanian government officials to secure maritime contracts, in violation of the Foreign Corrupt Practices Act (FCPA), and for making a false statement to federal agents. In addition to the prison term, U.S. District Court Judge Henry E. Hudson for the Eastern District of Virginia ordered Jumet to pay a $15,000 fine and to serve three years of supervised release following the prison term. The 87-month sentence is the longest prison term imposed against an individual for violating the FCPA.

Jumet, 53, pleaded guilty on Nov. 13, 2009, to conspiring to violate the FCPA and making a false statement to federal agents. The FCPA makes it a crime to pay or offer to pay anything of value to a foreign government official in order to obtain or retain business.

According to court documents, from approximately 1997 through July 2003, Jumet and others conspired to pay money secretly to Panamanian government officials in exchange for awarding contracts to Ports Engineering Consultants Corporation (PECC) to maintain lighthouses and buoys along Panama’s waterway. In December 1997, the Panamanian government awarded PECC a no-bid 20-year concession. Upon receipt of the concession, Jumet admitted that he and others authorized corrupt payments to be made to the Panamanian government officials. In total, Jumet and others caused corrupt payments of more than $200,000 to be paid to the former administrator and the former deputy administrator of the Panama Maritime Authority and to a former high-ranking elected executive official of the Republic of Panama.

Jumet also made a false statement to federal agents about a “dividend” check payable to the bearer in the amount of $18,000 that was endorsed and deposited into an account belonging to the high-ranking elected Panamanian government official. Jumet falsely claimed that this “dividend” check was a donation for the high-ranking elected official’s re-election campaign, when, in fact, Jumet admitted it was given to the elected Panamanian government official as a corrupt payment for allowing PECC to receive the contract.

If you have questions about complying with the FCPA and other international trade laws, Contact Us SOURCE: DOJ

California Company Executives Plead Guilty to Federal Counterfeiting and Conspiracy Charges

Two executives of MVP Micro, Inc., a California-based electronics parts reseller, have pleaded guilty to various federal charges stemming from their involvement in the manufacture and distribution of counterfeit integrated circuits to the U.S. military. According to an eleven-count indictment, Mustafa Aljaff (MVP’s owner) and Neil Felahy (MVP’s operations manager and Aljaff’s brother-in-law), were engaged in the interstate trafficking of counterfeit integrated circuits through at least six California companies they owned and operated. The defendants apparently acquired counterfeit integrated circuits from supply sources in China, imported them into the United States, and sold them via the Internet. They also acquired counterfeit integrated circuits from other distributors within the United States. In addition, the defendants obtained integrated circuits then sent them to another entity where the original product markings were removed and the devices were remarked to fraudulently indicate that the devices were of a certain brand, and were newer, higher quality or of a certain grade, including military grade.

Aljaff admitted that on 23 separate occasions, that he and others imported into the United States from China and Hong Kong, over 13,000 integrated circuits bearing counterfeit trademarks, including military-grade markings, valued at over $140,000. Those counterfeit integrated circuits displayed the purported trademarks of a number of legitimate and well-known semiconductor manufacturers.

Aljaff and Felahy each face a statutory sentence for conspiracy of up to five years incarceration and a fine of $250,000. For the crime of trafficking in counterfeit goods, Aljaff and Felahy each face up to ten years incarceration and a fine of $2,000,000. Sentencing for both Aljaff and Felahy should occur later this year and under U.S. Sentencing Guidelines, Aljaff and Felahy face sentences up to 46-57 months and 30-51 months, respectively.

If you have questions about protecting or enforcing intellectual property, Contact Us
SOURCE: This Article was submitted by guest correspondent Ken Thomas, Legal Counsel at Texas Instruments.

Daimler AG to Pay $185 Million for FCPA Violations

Daimler AG, a German corporation, and three of its subsidiaries have resolved charges related to a Foreign Corrupt Practices Act (FCPA) investigation into the company’s worldwide sales practices.

Daimler AG’s Russian subsidiary DaimlerChrysler Automotive Russia SAO (DCAR), now known as Mercedes-Benz Russia SAO, and its German subsidiary, Export and Trade Finance GmbH (ETF), each pleaded guilty to criminal informations charging the companies with one count of conspiracy to violate the anti-bribery provisions of the FCPA and one count of violating those provisions. As part of the plea agreements, DCAR and ETF agreed to pay criminal fines of $27.26 million and $29.12 million, respectively. Daimler AG entered into a deferred prosecution agreement and agreed to the filing of a criminal information charging that company with one count of conspiracy to violate the books and records provisions of the FCPA and one count of violating those provisions. Daimler AG’s Chinese subsidiary DaimlerChrysler China Ltd. (DCCL), now known as Daimler North East Asia Ltd., also entered into a deferred prosecution agreement and agreed to the filing of a criminal information charging it with one count of conspiracy to violate the anti-bribery provisions of the FCPA and one count of violating those provisions. In total, Daimler AG and its subsidiaries will pay $93.6 million in criminal fines and penalties.

According to court documents, Daimler AG, whose shares trade on multiple exchanges in the United States, engaged in a long-standing practice of paying bribes to foreign government officials through a variety of mechanisms, including the use of corporate ledger accounts known internally as “third-party accounts” or “TPAs,” corporate “cash desks,” offshore bank accounts, deceptive pricing arrangements and third-party intermediaries. According to court documents, Daimler AG and its subsidiaries made hundreds of improper payments worth tens of millions of dollars to foreign officials in at least 22 countries – including China, Croatia, Egypt, Greece, Hungary, Indonesia, Iraq, Ivory Coast, Latvia, Nigeria, Russia, Serbia and Montenegro, Thailand, Turkey, Turkmenistan, Uzbekistan, Vietnam and others – to assist in securing contracts with government customers for the purchase of Daimler vehicles. The contracts were valued at hundreds of millions of dollars. In some cases, Daimler AG or its subsidiaries wire transferred these improper payments to U.S. bank accounts or to the foreign bank accounts of U.S. shell companies, in order for those entities to pass on the bribes. Within Daimler AG and its subsidiaries, bribe payments were often identified and recorded as “commissions,” “special discounts,” and/or “nützliche Aufwendungen” or “N.A.” payments, which translates to “useful payment” or “necessary payment,” and was understood by certain Daimler employees to mean “official bribe.” According to court documents, certain corrupt payments continued as late as January 2008, after the Department of Justice had begun its investigation. In all cases, Daimler AG improperly recorded these corrupt payments in its corporate books and records. Daimler AG admitted that it earned more than $50 million in profits from corrupt transactions with a nexus to the territory of the United States. Daimler AG also admitted that it agreed to pay kickbacks to the former Iraqi government in connection with contracts to sell vehicles to Iraq under the U.N.’s Oil for Food program.

A separate judgment was also entered against Daimler AG resolving a related civil complaint filed by the U.S. Securities and Exchange Commission (SEC). Daimler AG agreed to pay $91.4 million in disgorgement of profits relating to those violations.

If you have questions about complying with FCPA or other international trade laws, Contact Us SOURCE: DOJ

Customs IP Enforcement News

The CBP strategic approach to intellectual property rights enforcement is multi-layered and includes seizing counterfeit goods at the border, pushing the border outward through audits of infringing importers and cooperation with our international trading partners, and partnering with industry and other government agencies to enhance these efforts. CBP officers and import specialists are aggressively working together to intercept shipments containing counterfeit and pirated items.

Recent CBP IP counterfeit seizures at the US border include:

– San Francisco, Ca. CBP Seizes Two Thousand Counterfeit iPhones U.S. Customs and Border Protection officers in San Francisco have seized two thousand counterfeit Apple iPhones worth almost $1.2 million entering the U.S. in commercial shipments. The shipment, from Taiwain, arrived at the San Francisco International Airport. CBP seized the counterfeit goods under authority of 19 USC 1526(e) and Regulatory Citation 19 CFR 133.21 for goods bearing counterfeit registered and recorded trademarks.

– Los Angeles CBP Seizes More than $18 Million in Counterfeit Sunglasses In March and April, U.S. Customs and Border Protection officials at the Los Angeles/Long Beach seaport seized six shipments of counterfeit sunglasses arriving from China with a combined manufacturer’s suggested retail price of more than $18.6 million. CBP officials seized a total 156,900 pairs of sunglasses in violation of Versace, Louis Vuitton, Dolce Gabbana, Lacoste, Coach, Emporio Armani and Bvlgary trademarks with a total domestic value of $151,564. The infringing merchandise was discovered on six different shipments during the period of March 13 to April 14. Along with the negative impact on legitimate manufacturers and on the U.S. economy, counterfeit sunglasses threaten the health and safety of consumers. Counterfeit sunglasses may not be impact resistant, may cause injury by shattering and may fail to provide UV protection.

– CBP in Savannah, Ga. Seizes Counterfeit DVD Systems U.S. Customs and Border Protection at the Port of Savannah intercepted and seized 9,000 counterfeit electronic components. The shipment had domestic value of $27,630, and a manufacturer’s suggested retail price of $77,490. The counterfeit electronic components were discovered in a container that had been designated for examination. CBP officers found 80 cartons which contained unassembled remote control audio changers and door panels to DVD systems. All items were marked with the trademarked “DVD” logos and found concealed in the shipping container. After determining the items violated trademark laws, the shipment was seized on April 6. In March, CBP in Savannah seized over 430 complete counterfeit Home Theater Surround Sound Systems. They also bore counterfeit “DVD” markings. This shipment had domestic value of $33,651, and a manufacturer’s suggested retail price of $67,598.

In an unrelated seizure later last month, U.S. Customs and Border Protection officers at the Port of Savannah intercepted and seized 10,800 counterfeit blank DVDs. The shipment had a domestic value of $159,948, and a manufacturer’s suggested retail price of $874,800.

The counterfeit DVDs were discovered in a container that had been designated for examination. CBP officers found 1,800 cartons which contained blank DVD-R recordable disks. All the items were marked with the trademarked “DVD” logos and found concealed in the shipping container. After determining the items violated trademark laws, the shipment was seized on April 14.

If you have questions about protecting or enforcing intellectual property rights or complying with international trade laws, Contact Us SOURCE: CBP

Delaware Company Agrees to pay $2.2 Million for Violating Cuban Sanctions

Innospec Inc. (“Innospec”) has agreed to pay $2.2 million to settle allegations of violations of the Cuban Assets Control Regulations, 31 C.F.R. Part 515 (the “CACR”). OFAC’s settlement of the apparent violations of the CACR is part of a $40.2 million comprehensive criminal and civil settlement.

OFAC alleged that, after its acquisition of a foreign corporation that maintained a local sales office in Cuba, Innospec conducted business in Cuba through its acquired subsidiary, including conducting transactions in which the government of Cuba and/or Cuban nationals had an interest in apparent violation of § 515.201(b) of the CACR. The base penalty amount for the alleged violations was $4,447,878.

As part of this comprehensive settlement, Innospec pleaded guilty to a twelve-count indictment in the U.S. District Court charging wire fraud in connection with the payment of kickbacks to the Iraqi government under the United Nations Oil for Food Program (OFFP), as well as violations of the Foreign Corrupt Practices Act (FCPA) in connection with bribe payments to officials in the Iraqi Ministry of Oil and the Indonesian government. Innospec also admitted that, from 2001 to 2004, a subsidiary sold nearly $20 million in oil soluble fuel additives to state-owned Cuban power plants without a license, conduct that in part formed the basis for the settlement with OFAC. As part of the plea agreement with DOJ, Innospec agreed to pay a $14.1 million criminal fine, to retain an independent compliance monitor, and to continue fully cooperating with DOJ and other authorities in ongoing investigations of corrupt payments by company employees and agents.

Innospec also settled a civil complaint filed by the SEC charging Innospec with violating the FCPA anti-bribery, internal controls, and books and records provisions by engaging in widespread bribery of foreign government officials in Iraq and Indonesia to obtain and retain business. Innospec’s internal controls failed to detect the illicit conduct, which continued for nearly a decade. As agreed with the SEC, and based on its financial condition, Innospec will disgorge $11.2 million of total profits to the SEC.

In another related matter brought by the United Kingdom’s Serious Fraud Office, Innospec’s British subsidiary, Innospec Ltd., pleaded guilty in U.K. court to having made corrupt payments to Indonesian officials as inducements to secure, or as rewards for having secured, contracts from the Government of Indonesia for the supply of specialized chemicals to the Government of Indonesia by Innospec Ltd. As a result of the plea, Innospec Ltd. will pay a criminal penalty of $12.7 million.

If you have questions about protecting or enforcing complying with international trade laws, Contact Us. SOURCE: OFAC

Trade to Expand by 9.5% in 2010 After a Dismal 2009

After the sharpest decline in more than 70 years, world trade is set to rebound in 2010 by growing at 9.5%, according to WTO economists. Exports from developed economies are expected to increase by 7.5% in volume terms over the course of the year while shipments from the rest of the world (including developing economies and the Commonwealth of Independent States) should rise by around 11% as the world emerges from recession.

This strong expansion will help recover some, but by no means all, of the ground lost in 2009 when the global economic crisis sparked a 12.2% contraction in the volume of global trade – the largest such decline since World War II. Should trade continue to expand at its current pace, the economists predict, it would take another year for trade volumes to surpass the peak level of 2008. Measuring trade in volume terms provides a more reliable basis for annual comparisons since volume measurements are not distorted by changes in commodity prices or currency fluctuations, as they can be when trade is measured in dollars or other currencies.

One positive development in 2009 was the absence of any major increase in trade barriers imposed by WTO members in response to the crisis. The number of trade-restricting measures applied by governments has actually declined in recent months. However, significant slack remains in the global economy, and unemployment is likely to remain high throughout 2010 in many countries. Persistent unemployment may intensify protectionist pressures.

World trade and output are currently in a recovery phase. The fall in global output last year (-2.3%) was the first of its kind since the Great Depression in the 1920s and 30s, prompting strong fiscal and monetary policy responses from governments around the world.

Without any further upheavals in the global economy, world merchandise trade should resume its normal upward trajectory through the end of 2010, although some deviation from its previous trend line will persist indefinitely. The WTO Secretariat estimates that world exports in volume terms will grow by 9.5%, this year, while developed economies’ exports will expand 7.5% and the rest of the world (developing economies plus the Commonwealth of Independent States) will advance 11%. This projection assumes a resumption of global GDP growth in line with consensus estimates (2.9% at market exchange rates), as well as stability in oil prices and exchange rates. However, unexpectedly positive or negative economic news in the coming months could necessitate a revision of the trade forecast.

A 9.5% growth rate for trade is insufficient to bring about a return to pre-crisis levels this year, and even the 11% rate forecast for developing countries would not do the trick. However, two years of growth at this pace would result in trade levels surpassing the peaks of 2008. Developed economies, on the other hand, would require three years of growth to accomplish this.

There remain significant risks that the forecast could be over-optimistic, including the possibility of further increases in oil prices, appreciation or depreciation of major currencies, and additional adverse developments in financial markets. However, there is also a possibility that trade may outperform the forecast, for example if unemployment rates fall more quickly than expected in developed countries.

If you have questions about protecting or enforcing doing business abroad, Contact Us. SOURCE: WTO

Jim Chester

Jim Chester advises entrepreneurs, start-ups and privately-held companies of all sizes in a variety of industries regarding commercial intellectual property matters, including trademark, copyright, and trade secret protection, licensing & enforcement in the US and abroad. He also assists companies in international business transactions and trade matters, and has advised clients on business deals involving over 100 countries. He is also an adjunct professor of law at Baylor University Law School, where he teaches courses on international trade law and international business transactions. He is a licensed US Customs broker, and holds an LL.M. degree in international economic law.

ABOUT KLEMCHUK KUBASTA LLP

Klemchuk Kubasta LLP is an IP boutique law firm offering a full array of intellectual property related services, including litigation and enforcement of all forms of intellectual property, as well as registration and licensing of patents, trademarks, trade dress, and copyrights. The firm also provides legal services relating to trade secrets, unfair competition, domain names, e-commerce, privacy policies, Internet law, commercial litigation, business litigation, technology transactions and international business & trade. Located in Dallas, Texas, Klemchuk Kubasta LLP supports a diverse client base ranging from individuals and startups to established market-leading companies. Through its Virtual IP Counsel(sm) and Virtual General Counsel(sm) programs, the firm also has experience with technology incubators and pre-first round financing technology start-ups. Klemchuk Kubasta LLP also serves as local counsel for IP and commercial litigation cases pending in Texas, including the federal courts in the Northern and Eastern Districts of Texas. Additional information about the firm and its attorneys may be found at www.kk-llp.com

Sincerely,

Jim Chester

Klemchuk Kubasta LLP

email: [email protected]

phone: 214-367-6000

web: http://www.kk-llp.com

Tags: None

Comments: Leave a comment

 

CHESTER’S Trade & Technology – Klemchuk Kubasta, LLP Newsletter April 2010

On behalf of Klemchuk Kubasta, LLP posted in Trade & Technology Law on Tuesday, April 20, 2010

International Trade Sanctions

Company to Pay $17 Million in Fines for Illegal Exports

Balli Aviation Ltd. (“Balli”), a subsidiary of the United Kingdom-based Balli Group PLC, recently pleaded guilty in the U.S. District Court for the District of Columbia to a two-count criminal information in connection with its illegal export of commercial Boeing 747 aircraft from the United States to Iran. Balli agreed to pay a $2 million criminal fine and be placed on corporate probation for five years. The $2 million fine, combined with a related $15 million civil settlement, represents one of the largest fines for an export violation in BIS history. In addition, Balli is denied export privileges for five years, although this penalty will be suspended provided that Balli does not commit any export violations and pays the civil penalty.

According to count one of the information filed with the court, beginning in at least October 2005, through October 2008, Balli conspired to export three Boeing 747 aircraft from the United States to Iran without first having obtained the required export license from BIS or authorization from OFAC, in violation of the Export Administration Regulations (EAR) and the Iranian Transactions Regulations. More particularly, the information states that Balli, through its subsidiaries, the Blue Sky Companies, purchased U.S.-origin aircraft with financing obtained from an Iranian airline and caused these aircraft to be exported to Iran without obtaining the required U.S. government licenses. Further, Balli entered into lease arrangements that permitted the Iranian airline to use the U.S.-origin aircraft for flights in and out of Iran.

Count two of the information states that Balli violated a Temporary Denial Order (TDO) issued by BIS on March 17, 2008, that prohibited the company from conducting any transaction involving any item subject to the EAR. Starting in or about March 2008 and continuing through about August 2008, Balli willfully violated the TDO by carrying on negotiations with others concerning buying, receiving, using, selling and delivering U.S.-origin aircraft which went to the Export Administration Regulations.

If you have any questions regarding compliance with US export or sanctions laws, Contact Us SOURCE: DOJ & BIS

Importing

Customs & Border Protection: 2009 Year in Review Highlights

Here are some highlights from a year-end report recently issued by Customs & Border Protection (CBP):

  • CBP seized more than 4.75 million pounds of narcotics during FY09. In terms of weight, total narcotics seizures increased in FY09 by 57 percent. Marijuana seizures were up in FY09 by 58 percent over FY08, and cocaine seizures increased 18 percent. Heroin seizures saw the most significant increase with a 316% jump compared to the previous year.
  • The global downturn evident in decline of commercial imports. The preliminary total for year end import value is at $1.7 trillion, a decline of 25 percent or $600 billion from the all time high of $2.3 trillion in FY 2008. Preliminary data for other key indicators were also lower, including revenue collections, down by 15 percent, and entries filed, were down 15 percent. At the close of FY09 most indicators show that imports stabilized to levels seen in FY05.
  • CBP officers at 327 ports of entry inspected 361.2 million travelers and more than 108.5 million cars, trucks, buses, trains, vessels and aircraft.
  • CBP agriculture specialists seized more than 1.5 million prohibited meat, plant materials or animal products, including 166,727 agricultural pests at ports of entry.
  • The number of seizures for intellectual property rights (IPR) violations declined by one percent from 14,992 in FY08 to 14,841 in FY09. The domestic value of goods seized decreased by four percent to $260.7 million from $272.7 million. China continued to be the top trading partner for IPR seizures in FY09 with a domestic value of $204.7 million, accounting for 79 percent of the total value seized. Footwear was the top commodity seized in FY09 with a domestic value of $99.7 million, which accounted for 38 percent of the entire value of infringing goods. The top categories of IPR infringing products seized also include consumer electronics, wearing apparel, computers/hardware, pharmaceuticals, and toys/electronic games. Jewelry appeared on the top commodities list for the first time, accounting for 4 percent of the total value of IPR seizures by domestic value.
  • Regulatory Audit completed 345 audits of importers and other parties involved in the process of importing goods in FY 2009 and had another 233 audits in progress. Regulatory Audit identified approximately $61.8 million in recommended recoveries, including user fees, and collected about $26.5 million in revenue.

If you have any questions regarding import or Customs laws, Contact Us SOURCE: CBP

Exporting

Buyer Beware: Company Acquires more than it bargained for, such as $12 Million in Export Penalties

The Commerce Department’s Bureau of Industry and Security (BIS) announced that Sirchie Acquisition Company, LLC (Sirchie LLC), a forensics and police equipment supplier based in Youngsville, North Carolina, has entered into an administrative Settlement Agreement with BIS to settle allegations of aiding and abetting actions taken to evade a denial order issued by BIS in September 2005.

This settlement marks the first BIS administrative case in which the recently-enhanced administrative civil monetary penalty amount of $250,000 per violation has been imposed for violations of the Export Administration Regulations (EAR). Sirchie LLC will pay the maximum aggregate administrative civil penalty of $2.5 million for the 10 charged violations of the EAR. Additionally, Sirchie LLC will pay a total of $10.1 million in criminal fines.

In December 2005, Sirchie Fingerprint Laboratories, Inc. (SFPL) and its then President and Chief Executive Officer, settled with BIS concerning allegations that they had engaged in a scheme designed to evade the licensing requirements of the EAR by which SFPL products controlled for crime control reasons were diverted for ultimate end use in the People’s Republic of China and Hong Kong. SFPL agreed to pay a $400,000 administrative civil penalty and accept a 5- year suspended denial of its export privileges, and its then President and Chief Executive Officer (“the denied person”) agreed to a 5-year denial of his export privileges in settlement of the allegations (“the denial order”).

An investigation determined that between February 2006 and November 2007, the denied person was directly involved in SFPL export transactions on at least ten occasions. SFPL aided and abetted actions taken to evade the denial order by providing the denied person with requests for price quotes for items to be exported, receiving pricing information from him, and engaging in export transactions involving these items. The assets of SFPL were acquired by Sirchie LLC on January 15, 2008, after the violations had occurred and BIS’s investigation had begun.

If you have any questions regarding export compliance, Contact Us SOURCE: BIS

Customs IP Enforcement News

The CBP strategic approach to intellectual property rights enforcement is multi-layered and includes seizing counterfeit goods at the border, pushing the border outward through audits of infringing importers and cooperation with our international trading partners, and partnering with industry and other government agencies to enhance these efforts. CBP officers and import specialists are aggressively working together to intercept shipments containing counterfeit and pirated items.

Recent CBP IP counterfeit seizures at the US border include:

– San Diego, Ca. CBP Seizes Thousands of Counterfeit Jeep Toys, Barbie Dolls U.S. Customs and Border Protection officers in San Diego have seized thousands of fake toys worth more than $1.6 million entering the U.S. in commercial shipments. CBP officers discovered and seized 600 Barbie dolls with a domestic value of $2,975 and a MSRP of $23,994. The confiscated dolls were of poor quality and lacked license information. This follows an earlier discovery of 1,920 counterfeit Barbie dolls that were of poor quality and lacked license information. The earlier seized dolls have a domestic value of $2,723 and an MSRP of $34,502. CBP officers also recently found battery-operated vehicles designed for children to ride in and operate. The Jeep trademark, which had been recorded with CBP, was found on the counterfeit goods, leading to their seizure. The 3,100 seized Jeep toys have a domestic value of over $554,000 and a MSRP totaling $1,571,964 and the 2,520 counterfeit Barbie dolls have an MSRP of $58,496.

– CBP in Savannah, Ga. Seizes Counterfeit Handbags, Nike Sneakers U.S. Customs and Border Protection at the Port of Savannah, Ga. intercepted and seized a shipment of counterfeit designer handbags and Nike sneakers, officials announced. The shipment had a total domestic value of $216,000 and a manufacturers’ suggested retail price of $7.1 million. The shipment was selected for examination after CBP officers became suspicious of the documentation that had been submitted for the shipment. Upon physical inspection of the cargo, CBP officers found a total of 5,656 name-brand designer bags bearing the names of Chanel, Coach and Louis Vuitton as well as 4,624 pairs of Nike “Air Max” sneakers. After determining the items violated trademark laws, the shipment was seized December 30.

– Los Angeles, Ca. CBP Seizes $7 Million Worth of DVDs with Counterfeit Trademarks U.S. Customs and Border Protection officials seized 252,968 DVDs with counterfeit trademarks. The manufacturer’s suggested retail price of the shipment was estimated to be more than $7.1 million and the domestic value was $204,904. On January 7, CBP officials from Los Angeles/Long Beach seaport complex seized a shipment, which arrived from South Korea. The shipment consisted of movies and music DVDs destined to an importer in the Los Angeles County. When CBP officials inspected the shipment, they discovered counterfeit “DVD,” “Dolby,” and “DTS” trademark designs on the packaging. The shipment was seized for illegal importation of merchandise bearing counterfeit trademarks.

– CBP in Charleston, SC Intercepts Counterfeit Shirts U.S. Customs and Border Protection at the Port of Charleston, SC seized 701 cartons of counterfeit “Gap” and “Faded Glory” polo shirts, along with other commingled merchandise on December 3, officials announced. The shipment had a total domestic value of $28,129 and a manufacturers suggested retail price of $415,306. CBP officers discovered the shipment of counterfeit merchandise in a container that was selected for examination. A total of 10,842 boy’s polo shirts bearing the Gap logo and 8,014 men’s polo shirts bearing the Faded Glory logo were seized.

– Atlanta, Ga. CBP Seizes Thousands of Counterfeit MLB, Designer Logo Hats U.S. Customs and Border Protection in Atlanta seized a shipment of counterfeit hats. The shipment had a total domestic value of $130,000 and a manufacturers suggested retail price of $1,307,946. On December 17, CBP officers discovered the shipment of counterfeit hats in a container that was selected for examination. After verifying the shipment violated trademark laws, the shipment was seized on January 6. There were a total of 42,925 hats bearing Major League Baseball team logos and a designer logo.

If you have any questions regarding Customs enforcement of IP rights, Contact Us SOURCE: CBP

International Trade Sanctions

Treasury Issues Licenses to Allow Exports to Iran, Sudan and Cuba

The U.S. Department of the Treasury’s Office of Foreign Assets Control (OFAC) amended the Iranian Transactions Regulations, Sudanese Sanctions Regulations, and Cuban Assets Control Regulations to ensure that individuals in these countries can exercise their universal right to free speech and information to the greatest extent possible. The amendments add general licenses authorizing the exportation of certain personal Internet-based communications services – such as instant messaging, chat and email, and social networking – to Iran, Sudan and Cuba. The amendments also permit the exportation of related software to Iran and Sudan.

The new general licenses authorize exports from the United States or by U.S. persons to persons in Iran and Sudan of services and software related to the exchange of personal communications over the Internet, including web browsing, blogging, email, instant messaging, and chat; social networking; and photo and movie sharing. Today’s amendments also provide that specific licenses may be issued on a case-by-case basis for the exportation of services and software used to share information over the Internet that are not covered by the general licenses.

The sanctions regulations on Cuba also have been amended to include a similar authorization and statement of licensing policy for the exportation of such services to Cuba. Unlike Iran and Sudan, the exportation of goods and technology, including software, to Cuba is separately licensed or otherwise authorized by the Commerce Department.

If you have any questions regarding US sanctions and licenses, Contact Us. SOURCE: OFAC

Jim Chester

Jim Chester advises entrepreneurs, start-ups and privately-held companies of all sizes in a variety of industries regarding commercial intellectual property matters, including trademark, copyright, and trade secret protection, licensing & enforcement in the US and abroad. He also assists companies in international business transactions and trade matters, and has advised clients on business deals involving over 100 countries. He is also an adjunct professor of law at Baylor University Law School, where he teaches courses on international trade law and international business transactions. He is a licensed US Customs broker, and holds an LL.M. degree in international economic law.

ABOUT KLEMCHUK KUBASTA LLP

Klemchuk Kubasta LLP is an IP boutique law firm offering a full array of intellectual property related services, including litigation and enforcement of all forms of intellectual property, as well as registration and licensing of patents, trademarks, trade dress, and copyrights. The firm also provides legal services relating to trade secrets, unfair competition, domain names, e-commerce, privacy policies, Internet law, commercial litigation, business litigation, technology transactions and international business & trade. Located in Dallas, Texas, Klemchuk Kubasta LLP supports a diverse client base ranging from individuals and startups to established market-leading companies. Through its Virtual IP Counselsm and Virtual General Counselsm programs, the firm also has experience with technology incubators and pre-first round financing technology start-ups. Klemchuk Kubasta LLP also serves as local counsel for IP and commercial litigation cases pending in Texas, including the federal courts in the Northern and Eastern Districts of Texas. Additional information about the firm and its attorneys may be found at www.kk-llp.com

Sincerely,

Jim Chester
Klemchuk Kubasta LLP

email: [email protected]
phone: 214-367-6000
web: http://www.kk-llp.com

Tags: None

Comments: Leave a comment

 

CHESTER’s World of Trade & Innovation Law – Nov/Dev 2009

On behalf of Klemchuk Kubasta, LLP posted in Trade & Technology Law on Friday, December 4, 2009

Tech Exports from Texas Rise $117 Million in 2008
Texas Ranks 1st in US for Communications/Electronic Components Exports

Texas has firmly established itself as the nation’s second largest tech exporting state with $39.8 billion in technology exports in 2008. Tech exports rose by $117 million from 2007. Texas ranked first nationwide in exports of communications equipment ($9.5 billion) and electronic components ($3.5 billion), and second in exports of semiconductors ($10.7 billion). Tech exports support 253,600 jobs in Texas and make up more than one fifth of all goods exported from the state.

“Texas is the 2nd largest exporter of high-tech goods, which continued to see growth in 2008 despite the spreading global recession,” said Sue Dark, Chief Executive Officer, DeepNines Technologies. “The technology industry in Texas has greatly benefited from NAFTA, as Canada and Mexico are our two leading destinations for tech exports. Texas would also benefit from the passage of the Free Trade Agreement with South Korea, the state’s third largest tech export destination. The agreement, which has been concluded but not yet passed and signed into law, would lower tariffs on U.S. goods entering the South Korean market.”

Nationally, Trade in the Cyberstates 2009 shows that U.S. high-tech goods exports rose by one percent in 2008, reaching $223 billion, representing 17 percent of all U.S. exports to the world. High-tech imports were down by less than one percent, totaling $336 billion in 2008, resulting in a slight improvement in the high-tech trade deficit, which stands at $114 billion. High-tech exports supported 1,158,000 jobs in the United States.

TechAmerica Foundation’s supplemental quarterly breakdown reveals that despite the gains in 2008, high-tech exports had begun to decline in the 4th quarter, and continued in the first half of 2009. High-tech exports were down 8 percent in Q4 2008 compared to Q4 2007. The drop steepened with a 22 percent decline in Q1 2009 and a 23 percent decline in Q2 2009 compared to their respective quarters in 2008. This tracks closely with the overall decline in U.S. merchandise exports in the first half of 2009.

What Does High-Tech Trade Mean for Texas?
$39.8 billion in high-tech exports (2nd ranked cyberstate)
Up $117 million in tech exports between 2007 and 2008
21 percent of exports from Texas are tech exports (ranked 15th)
253,600 jobs in Texas are supported by tech exports

Texas’ Leading Tech Export Destinations:
$14.6 billion in tech exports to Mexico
$3.5 billion in tech exports to Canada
$2.2 billion in tech exports to South Korea

Texas’ Leading Tech Export Sectors:
1st in communications equipment exports at $9.5 billion
1st in electronic components at $3.5 billion
2nd in semiconductors exports at $10.7 billion

Source: Trade in the Cyberstates 2009, TechAmerica Foundation

If you have questions regarding this article, click here to contact Jim Chester

Excellent (and Free) FCPA Video Available

PBS’s “Frontline” news series has produced an enlightening documentary called “Black Money” which analyzes the policies behind, and implications of, the US Foreign Corrupt Practices Act on international business dealings.

The documentary, less than an hour long, is available for a limited time for free viewing via streaming video from the PBS web site:

http://video.pbs.org/video/1114436938/program/979358040

In light of recent high-profile cases involving FCPA violations, all US persons and companies with international business dealings (including foreign agents and subsidiaries) should to be aware of the importance of understanding and complying with the FCPA.

Source: PBS.org

If you have questions regarding this article, click here to contact Jim Chester.

NJ Firm Fined $700,000 for Unlicensed Exports of Specialty Powders

The Commerce Department’s Bureau of Industry and Security (BIS) recently announced that Novamet Specialty Products Corporation has agreed to pay a $700,000 civil penalty to settle allegations that it exported nickel powders without a license. Nickel powders are controlled for nuclear non-proliferation reasons. Novamet also agreed to complete an internal export compliance audit and submit the results of that audit to BIS.

The New Jersey-based company, which produces and distributes specialty metal products, including metal powders, violated the Export Administration Regulations (EAR) 32 times over a five-year period.

BIS alleged that on 28 occasions between April 2003 and January 2008, Novamet exported nickel powders without the required export licenses to the People’s Republic of China (PRC), Singapore, Taiwan, Thailand, India, Israel, the Dominican Republic, and Mexico. BIS further alleged that on four occasions in 2005-2006, Novamet sold or transported nickel powders with knowledge that a violation of the EAR would occur. Specifically, Novamet sold or transported nickel powders to India on one occasion and on another occasion to Israel, while license applications it had previously submitted to BIS regarding those exports were pending. On two other occasions, Novamet failed to obtain the required licenses to export nickel powders to the PRC, notwithstanding the fact that it had previously applied for and obtained licenses for export to the PRC of similar powders with the same ECCN.

Source: BIS

If you have questions regarding this article, click here to contact Jim Chester.

CBP Seizes 3 Million Pieces of Counterfeit Party Supplies

U.S. Customs and Border Protection officials in Los Angeles recently announced the seizure of more than 3.4 million pieces of party supplies with counterfeit trademarks. The manufacturer’s suggested retail price of the party supplies is more than $4.2 million and has an estimated domestic value of $120,064. The party supplies consisted of paper party hats, plastic table covers, plastic party loot bags, balloons, invitation cards, cups and plates. The counterfeit trademarks included Dora the Explorer, Spiderman, Spongebob Squarepants, Go Diego Go and many other famous brands.

Source: CBP

If you have questions regarding this article, click here to contact Jim Chester.

Houston/Miami CPB Seize over $10 Million in Counterfeit Sunglasses For I.P. Violations

Houston U.S. Customs and Border Protection officers seized a shipment of counterfeit sunglasses with an estimated manufacturer’s suggested retail price of more than $3 million. The officers seized the shipment September 16 after they confirmed the merchandise violated trademark laws. The importer described the container’s shipment as sunglasses with a domestic value of about $50,000; however, when officers inspected the shipment they found sunglasses with designer name brands including Coach, XLOOP, Etienne Aigner and Lacoste affixed to the shades.

Seized property specialists will take possession of the sunglasses. CBP could assess fines and penalties to the importer that could equal the amount of the MSRP value of authentic goods (i.e., approximately $3 million)

In Miami, U.S. Customs and Border Protection officers at the Miami seaport on Friday seized 97 parcels containing sunglasses and reading glasses with infringing trademarks of brands such as Christian Dior, XOXO, Chanel, D&G and Burberry.

The shipments had a manufacturer’s suggested retail price of nearly $7.7 million, and a domestic value of approximately $388,000. CBP officers discovered the merchandise while conducting a trade examination at the Miami seaport. Samples were turned over to CBP import specialists for intellectual property rights review. The shipment was seized after it was determined to infringe on trademarks which were recorded with CBP.

Source: CBP

If you have questions regarding this article, click here to contact Jim Chester.

Director of Singapore Firm Sentenced for Illegally Exporting Controlled Aircraft Components to Iran

Laura Wang-Woodford, a U.S. citizen who served as a director of Monarch Aviation Pte, Ltd. (“Monarch”), a Singapore company that imported and exported military and commercial aircraft components for more than 20 years, was recently sentenced in federal court in Brooklyn to 46 months incarceration for conspiring to violate the U.S. trade embargo by exporting controlled aircraft components to Iran. Wang-Woodford was also ordered to forfeit $500,000 to the United States Treasury Department.

According to the indictment, between January 1998 and December 2007, the defendant exported controlled U.S. aircraft parts from the United States to Monarch and Jungda in Singapore and Malaysia and then re-exported those items to companies in Tehran, Iran, without obtaining the required U.S. government licenses. As part of the charged conspiracy, the defendant falsely listed Monarch and Jungda as the ultimate recipients of the parts on export documents filed with the U.S. government. The aircraft parts illegally exported to Iran include aircraft shields, shears, “o” rings, and switch assemblies. The superseding indictment further charged that the defendants arranged for the illegal export of U.S. military aircraft components, designed for use in Chinook military helicopters, to Monarch in Singapore.

At the time of her arrest in San Francisco, Wang-Woodford possessed catalogues from a Chinese company, the China National Precision Machinery Import and Export Corporation (“CPMIEC”), containing advertisements for military technology and weaponry. The products advertised included surface-to-air missile systems and rocket launchers. CPMIEC has been sanctioned by the United States Treasury Department, Office of Foreign Assets Control, based, in part, on CPMIEC’s history of selling military hardware to Iran. All United States persons and entities are prohibited from engaging in business with CPMIEC.

“As today’s sentence demonstrates, those who export restricted American technology in violation of our laws will be held accountable for their actions. Keeping sensitive U.S. technology from falling into the wrong hands is a top priority for the Justice Department,” said Assistant Attorney General Kris.

“Shutting down diverters like Monarch Aviation to protect our national security is our top priority,” said Acting Assistant Secretary of Commerce for Export Enforcement Delli-Colli. “This case illustrates a successful, coordinated effort to stop the illegal shipment of controlled aircraft parts to Iran.”

“The illegal sale of military parts is not only a threat to our national security, but to U.S. soldiers and allies,” said Assistant Secretary of Homeland Security for U.S. Immigration and Customs Enforcement Morton.

Source: BIS

If you have questions regarding this article, click here to contact Jim Chester

USPTO Rescinds Controversial Patent Regulations

Under Secretary of Commerce for Intellectual Property and Director of the USPTO David Kappos has signed a new Final Rule rescinding highly controversial regulations, proposed by the previous administration, that patent applicants felt unduly restricted their capacity to protect intellectual property. The regulations, which addressed the number of continuation applications as well as the number of claims that could be included within each application, were published in the Federal Register in August 2007, but were enjoined and never came into effect.

In August 2007, the agency published new rules intended to help improve examination efficiency, enhance the quality of examination, and manage the growing backlog of unexamined applications. Two regulations, commonly referred to as the “Continuation Rule” and the “RCE Rule,” would have permitted an applicant to file only two continuation applications and one request for continued examination (“RCE”) per application family as a matter of right. For a third or subsequent continuation application or RCE, the applicant would have had to make a case to the USPTO to show why the additional filing was needed. A third regulation, referred to as the “Claims Rule,” would have permitted an applicant to file five independent claims and twenty-five total claims per application. If an applicant desired more than five independent claims or more than twenty-five total claims, then the Claims Rule would have required the applicant to supply information to the USPTO about the claimed invention to assist the Office’s examination. The specific information that would have been required was outlined in another regulation, termed the “ESD Rule.”

Many in the applicant community felt the combination of these new requirements would ultimately have had an effect that was at odds with their intended purposes.

Source: USPTO

If you have questions regarding this article, click here to contact Jim Chester.

USPTO Awards 600,000th Design Patent

The United States Patent and Trademark Office (USPTO) recently awarded design patent number 600,000 to Goal Zero, a subsidiary of Provo Craft and Novelty, and a small business located in Spanish Fork, Utah. The patent was granted for the design of a battery system, which works in conjunction with a solar briefcase that recharges the system using sunlight. This patent exemplifies the blending of green technology and appealing design.

Design patents are granted for new, original and ornamental designs for articles of manufacture. They are intended to give encouragement to the decorative arts and promote commerce by giving designers an incentive to make their products more aesthetically appealing to consumers. The first design patent was issued in 1842 to George Bruce of New York City for printing types. Design patents provide exclusive rights to their owners for a term of 14 years from the date of issuance. More than 23,400 design patents were issued in fiscal year 2009.

Source: USPTO

If you have questions regarding this article, click here to contact Jim Chester.

About Jim Chester

Jim advises Fortune 500 companies, start-ups, and mid-sized companies in a variety of industries regarding intellectual property and international business & trade. He routinely represents companies before the US Patent and Trademark Office (USPTO), the US Library of Congress (Copyright Office), US Customs & Border Protection, among other federal and international governing bodies and agencies. In addition to his work at the Firm, Jim is also an adjunct professor of law at Baylor University Law School, where he teaches courses on International Trade Law and International Business Transactions.Click here to contact Jim Chester.

Jim Chester | 214-672-2114 | [email protected]

Tags: None

Comments: Leave a comment

 

Chester’s Trade & Innovation Law Update – October 2009

On behalf of Klemchuk Kubasta, LLP posted in Trade & Technology Law on Friday, October 2, 2009

International Trade Sanctions

Aussie Bank Pays $5.75 Million OFAC Penalty

Australia and New Zealand Bank Group, Ltd., Melbourne, Australia (“ANZ”), remitted $5,750,000 to settle allegations of violations of the Sudanese Sanctions Regulations, 31 C.F.R. Part 538, and the Cuban Assets Control Regulations, 31 C.F.R. Part 515. The international trade finance and foreign currency exchange activities at issue in the settlement occurred from 2004 to 2006 and involved ANZ’s processing of transactions through U.S. correspondent accounts. ANZ actively manipulated the SWIFT messages related to the Sudanese transactions by removing references to Sudan or the names of entities subject to sanctions in the United States, thereby concealing the identities of the targets of U.S. sanctions and impeding the ability of U.S. banks to detect these violations. The settlement covers 16 transactions in the aggregate amount of approximately $28 million alleged to have violated the Sudanese Sanctions Regulations, and 15 transactions in the aggregate amount of $78 million alleged to have violated the Cuban Assets Control Regulations.

The US Treasury Department’s Office of Foreign Asset Controls (OFAC) mitigated the total potential penalty based on ANZ’s substantial cooperation, its prompt and thorough remedial response, and the fact that ANZ had not been subject to an OFAC enforcement action in the five years preceding the transactions at issue. Although ANZ did not voluntarily self-disclose the apparent violations of the Sudanese Sanctions Regulations, ANZ substantially cooperated with OFAC by conducting an extensive review of transactions. This review identified additional apparent violations of the Sudanese Sanctions Regulations of which OFAC was not aware, as well as apparent violations of the Cuban Assets Control Regulations, which ANZ voluntarily self-disclosed to OFAC.

SOURCE: OFAC

If you have questions regarding this article, click here to contact Jim Chester

Imports

US Implements Additional 35% Duty on Chinese Tires

U.S. Customs and Border Protection’s Office of International Trade announced to the trade community plans to assess an additional 35 percent ad valorem duty on certain tires of Chinese origin entered or withdrawn from warehouses on or after September 26.

On September 11, President Obama signed Proclamation 8414 imposing additional duties on certain passenger vehicle and light truck tires from China for three years. The additional duty is 35 percent ad valorem the first year, 30 percent ad valorem the second year and 25 percent ad valorem the third and final year. This duty is in addition to the general rate provided in column one of the Harmonized Tariff Schedule of the United States (HTSUS).

A new U.S. note, number 14, and two new subheadings, 9903.40.05 and 9903.40.10 are added to Subchapter III of chapter 99, Temporary Modifications Established Pursuant To Trade Legislation of the HTSUS, to collect the additional duty.

Specifically, the tires subject to this additional duty are new pneumatic rubber tires, from China, of a kind used on motor cars (except racing cars) and on-the-highway light trucks, vans, and sport utility vehicles and are, generally, to be mounted onto the rims of passenger cars, sport utility vehicles, vans, and light trucks. These tires are classified in subheadings 4011.10.10, 4011.10.50, 4011.20.10, or 4011.20.50, HTSUS.

The following tires are not subject to the additional duty: pneumatic racing car tires, new pneumatic tires of a kind used on large trucks and buses; new pneumatic tires of a kind used on agricultural or forestry vehicles and machines and construction or industrial handling vehicles or machines; new pneumatic tires of a kind used on aircraft, bicycles, motorcycles, trailers, all-terrain vehicles, and vehicles for turf, lawn and garden, and golf applications; pneumatic tires that are not new, including recycled and retreaded tires; and non-pneumatic tires, such as solid rubber tires.

SOURCE: CBP

If you have questions regarding this article, click here to contact Jim Chester.

Intellectual Property

Louis Vuitton wins US and French IP Infringement Lawsuits

LVMH Moët Hennessy Louis Vuitton (LVMH), one of the world’s leading luxury products groups, recently won a ruling by the Paris Tribunal de Grande Instance which found eBay responsible for brand counterfeiting through the use of LVMH brands as “keywords” in its site. Pierre Godé, Director of LVMH group, said: “The Tribunal ruled that eBay, in using in its adverts the keywords of some of LVMH’s brands, has committed acts of counterfeiting through reproduction or imitation.” The Tribunal ordered eBay to pay LVMH €80,000 in damages, and issued an injunction forbidding eBay from continuing any such activities in the future, subject to a fine of €1,000 per future infringement.

In an unrelated lawsuit also involving a unit of LVMH, a federal jury in California awarded it $32.4 million in damages in a copyright and trademark infringement lawsuit against businesses that hosted Web sites selling counterfeit consumer products. The LVMH unit filed the lawsuit in 2007, after finding a group of Web sites with the same Internet address selling what LVMH believed was counterfeit Louis Vuitton merchandise. The Web sites were hosted by Akanoc Solutions Inc. and Managed Solutions Group Inc. The jury found Akanoc Solutions, Managed Solutions Group and an individual owner of the companies liable for contributory trademark and copyright infringement, and awarded Louis Vuitton $32.4 million in damages.

SOURCE: LVMH & U.S. Dist. Ct. CA

If you have questions regarding this article, click here

to contact Jim Chester.

Exporting

Texas Company’s Affiliates Pay $176,000 to Settle Charges for Unlawful Exports

The Commerce Department’s Bureau of Industry and Security (BIS) recently announced that five foreign subsidiaries of Thermon Manufacturing Company, a San Marcos, Texas-based firm, have agreed to pay a total of $176,000 in combined civil penalties to settle allegations that they participated in unlicensed exports and reexports of heat tracing equipment to Iran, Syria, Libya and listed entities in India, in violation of the Export Administration Regulations (EAR). Thermon Manufacturing voluntarily disclosed the violations to BIS.

“Thermon’s foreign subsidiaries placed orders intended for and ultimately shipped to sanctioned countries and listed entities,” said Kevin Delli-Colli Acting Secretary of Commerce for Export Enforcement. “A number of the violations occurred despite the fact that Thermon U.S. told the subsidiaries that such actions were prohibited.”

BIS alleged that between October 2002 and June 2006, the five subsidiaries-Thermon Europe B.V., Thermon Far East Ltd., Thermon Heat Tracers Pvt. Ltd. (based in India), Thermon Korea Ltd., and Thermon (U.K.) Ltd.-committed a total of 33 violations by re-exporting or causing the export of EAR99 heat tracing equipment manufactured in the United States by Thermon Manufacturing, without the required BIS license or, for shipments to Iran, a License from the Treasury Department’s Office of Foreign Assets Control.

The Thermon subsidiaries did not inform Thermon Manufacturing of the ultimate destinations for the items and had been informed by Thermon Manufacturing in February 2005 that “products manufactured by Thermon US may not be sold to countries on the US trade sanctions list,” including specifically Iran, Syria and Libya. BIS alleged that the affiliates acted with knowledge of those violations involving shipments to sanctioned countries that occurred after this warning.

SOURCE: BIS

If you have questions regarding this article, click here to contact Jim Chester.

Intellectual Property

Customs IP Enforcement News

The CBP strategic approach to intellectual property rights enforcement is multi-layered and includes seizing counterfeit goods at the border, pushing the border outward through audits of infringing importers and cooperation with our international trading partners, and partnering with industry and other government agencies to enhance these efforts. CBP officers and import specialists are aggressively working together to intercept shipments containing counterfeit and pirated items.

Recent CBP counterfeit seizures at the US border include:

– Norfolk, VA CBP Stops $3.85 Million Shipment of Counterfeit Gucci Shoes

U.S. Customs and Border Protection in Norfolk seized more than 15,000 pairs of counterfeit Gucci shoes on August 25th. During a routine inspection, CBP officers discovered the counterfeits and seized the goods under federal law prohibiting the importation of merchandise bearing a counterfeit trademark. The shipment, which originated from China, was manifested as home decorations. CBP seized a total of 15,104 pairs of counterfeit Gucci shoes contained in 472 cartons. The shipment had a total domestic value of $1,963,520 and a manufacturers suggested retail price of $3,851,520.

– CBP in Savannah, Ga. Intercepts $800,000 in Counterfeit Socks

For the second time this month, U.S. Customs and Border Protection at the port of Savannah has seized a counterfeit sock shipment. The most recent interception occurred on September 11, when 840 cartons of socks with counterfeit “Cotton” logos were seized. CBP officers discovered this latest shipment of fake merchandise in a container that had been selected for examination. A total of 201,840 pairs were seized. The shipment had a total domestic value of $44,609 and a manufacturers suggested retail price of $672,800. A previous shipment seized on September 2 had a total domestic value of $4,203 and a manufacturers suggested retail price of $165,998.

SOURCE: CPB

If you have questions regarding this article, click here to contact Jim Chester.

Exporting

Semiconductor Companies Pay $410,000 to Settle Allegations of Unlawful Exports to China

The Commerce Department’s Bureau of Industry and Security (BIS) recently announced that Foxsemicon Integrated Technologies, Inc. (FITI) of Taiwan has agreed to a $250,000 civil penalty to settle allegations that it committed thirty-one violations of the Export Administration Regulations (EAR) related to the unlicensed export of pressure transducers from the United States to the People’s Republic of China (PRC).

In a related matter, Foxsemicon LLC, of a San Jose, Calif., a wholly-owned affiliate of FITI, agreed to a $160,000 civil penalty to settle allegations that it aided and abetted FITI’s violations. FITI designs and manufactures components and systems used in the manufacture of semiconductor wafers and flat panel screens.

“Exporters must heed the advice of their suppliers when told that products require an export license. Companies involved in systems integration bear the burden of ensuring that license requirements regarding parts and components are met before exporting to foreign customers,” said Kevin Delli-Colli, the acting assistant secretary of Commerce for Export Enforcement.

BIS alleged that between August 2005 and May 2006, FITI made fifteen unlicensed exports of pressure transducers to the PRC, aided and abetted by Foxsemicon LLC. The transducers are used as spare parts to larger manufacturing systems controlled for nuclear non-proliferations reason to the PRC. BIS alleged that at the time the unauthorized exports were made, FITI knew licenses were required for the parts, yet the company made no attempt to apply for licenses to authorize the shipments. FITI is also alleged to have made false statements on export documentation, aided and abetted by Foxsemicon LLC, by incorrectly stating that no license was required for the exports.

SOURCE: BIS

If you have questions regarding this article, click here to contact Jim Chester.

About Jim Chester

Jim advises Fortune 500 companies, start-ups, and mid-sized companies in a variety of industries regarding intellectual property and international business & trade. He routinely represents companies before the US Patent and Trademark Office (USPTO), the US Library of Congress (Copyright Office), US Customs & Border Protection, among other federal and international governing bodies and agencies. In addition to his work at the Firm, Jim is also an adjunct professor of law at Baylor University Law School, where he teaches courses on International Trade Law and International Business Transactions.

Click here to contact Jim Chester.

Jim Chester | 214-672-2114 | [email protected]

Tags: None

Comments: Leave a comment

 

CHESTER’S WORLD of Trade & Innovation Law – September 2009

On behalf of Klemchuk Kubasta, LLP posted in Trade & Technology Law on Tuesday, September 1, 2009

International Business & Trade

EXPORTING

DHL Signs $9.44 Million Settlement Agreement with BIS and OFAC

The Commerce Department’s Bureau of Industry and Security (BIS) and the Treasury Department’s Office of Foreign Assets Control (OFAC) have entered into a joint settlement agreement with DPWN Holdings (USA), Inc. (formerly known as DHL Holdings (USA), Inc.) and DHL Express (USA), Inc. (collectively “DHL”), regarding allegations that DHL unlawfully aided and abetted the illegal exportation of goods to Syria, Iran and Sudan and failed to comply with record keeping requirements of the Export Administration Regulations (EAR) and OFAC regulations. DHL will pay a civil penalty of $9,444,744 and conduct external audits covering exports to Iran, Syria and Sudan from March 2007 through December 2011.

“Preventing exports to sanctioned countries and preserving export records are fundamental components of effective compliance,” said Kevin A. Delli-Colli, Acting Assistant Secretary of Commerce for Export Enforcement. “Large-scale compliance breakdowns lead to significant sanctions aimed at ensuring that freight forwarders put into place and maintain necessary measures to meet their compliance responsibilities.”

BIS charged that on eight occasions between June 2004 and September 2004, DHL caused, aided and abetted acts prohibited by EAR when it transported items subject to the EAR from the United States to Syria, and that with regard to 90 exports between May 2004 and November 2004, DHL failed to retain air waybills and other export control documents required to be retained under Part 762 of the EAR. OFAC charged that DHL violated various OFAC regulations between 2002 and 2006 relating to thousands of shipments to Iran and Sudan. Like DHL’s EAR violations, its OFAC violations primarily involve DHL’s failure to comply with applicable recordkeeping requirements.

In addition to the monetary penalty, DHL will hire an expert on U.S. export controls laws and sanctions regulations for an external audit of DHL transactions to Iran, Sudan and Syria between March 2007 and December 2009. Annual calendar year audits will be conducted in 2010 and 2011. The external auditor will assess DHL’s compliance with the EAR and OFAC regulations, including recordkeeping requirements.

SOURCE: BIS

If you have questions regarding exporting, click here to contact Jim Chester

Intellectual Property

Gucci Sues Credit Card Processing Companies for Involvement in Sales of Counterfeit Goods

For many reasons, stopping the sale of counterfeit goods on the Internet has been a struggle for intellectual property (IP) owners. Efforts to police millions of postings on individual web sites, as well as independent sites such a eBay, are time consuming and expensive. Moreover, enforcement is difficult, and monetary damages often difficult to collect. However, a recent case filed in a federal district court in Manhattan reveals that IP owners may now have another group of companies involved in such sales in their sights: credit card processing companies.

In a case filed in the US District Court for the Southern District of New York, Gucci America, which is owned by French luxury goods company PPR, sued several credit card processing companies for trademark infringement on grounds those companies facilitated the sale of counterfeit Gucci bags on the Internet. The lawsuit named Frontline Processing Corp, Woodforest National Bank, Durango Merchant Services LLC and others as defendants. Gucci America said in the lawsuit that by processing transactions on counterfeits, the credit card processing companies not only supply the necessary marketplace for such transactions, but are “full partners” in those counterfeiting activities.

All of the companies listed in the current complaint had worked with the Laurette Co, which owns the website TheBagAddiction.com. In 2008, Gucci sued the Laurette Co, saying its sale of counterfeit Gucci products via TheBagAddiction.com contributed to trademark infringement. In December 2008, Laurette Co and others were ordered to pay Gucci $5.2 million.

SOURCE: US District Court – Southern Dist, NY

If you have questions regarding protecting intellectual property, click here to contact Jim Chester.

International Business & Trade

IMPORTING

Proposed Law Would Increase Harbor Maintenance Tax by 350%

In May, Representative Laura Richardson (D-CA) and 11 cosponsors (10 Democrats and 1 Republican), introduced H.R. 2355, which contains the “Making Opportunity via Efficient and More Effective National Transportation (“MOVEMENT”) Act of 2009″. The bill, if passed, would substantially increase and expand the Harbor Maintenance Tax (“HMT”), and importers would pay significantly more HMT on every shipment, – even on merchandise that is otherwise duty free – and could extend the HMF to entries not currently subject to HMT.

The HMT is meant to provide funds for improved infrastructure and seaport facilities. Currently, the HMT applies a tax of 0.125% based on the value of most goods imported through most U.S. seaports. If passed, the new MOVEMENT Act would increase the HMT by 350%, from 0.125% to .4375% of the cargo value. For example, if the changes is approved, the HMT owed on imported merchandise with an entered value of $80,000 would increase from $100 to $350 – even if the goods were eligible for duty-free importation.

The bill would also expand the HMT by imposing a tax of 0.3125% of the value of commercial cargo crossing into the United States after arrival at a port in Canada or Mexico. Such goods are not currently subject to HMT. This provision is apparently intended to prevent the increased HMTs from causing U.S. ports to lose business to ports in Canada and Mexico. However, pursuant to NAFTA-related obligations of the US, goods manufactured in Canada or Mexico would not be subject to the new HMT.

SOURCE: US Congress

If you have questions regarding Importing, click here to contact Jim Chester.

Intellectual Property

US Customs IP Enforcement

In 2008, the combined effort of CBP import specialists and CBP officers resulted in a record breaking year of counterfeit seizures. Preventing the entry of counterfeit items is crucial to protect consumers as well as the economy of the United States. Recent IP-related enforcement activity of CBP includes:

1. L.A./Long Beach CBP Seizes $850,000 worth of Counterfeit Computer Equipment

U.S. Customs and Border Protection officers at Los Angeles/Long Beach seaport seized a shipment of wireless routers and Ethernet switches for trademark infringement. The shipment has a domestic value of $659,500 and a manufacture’s suggested retail price of $857,340. The items had logos similar to Apple, Microsoft, and Windows Vista. CBP import specialist determined that the logos were substantially indistinguishable from trademarks recorded with CBP. The importer of this shipment tried to conceal the logos by placing a sticker on the product packaging. A total of 5,475 wireless routers and 7,472 Ethernet switches were seized.

2. Officers Confiscate Counterfeit Michael Jackson Belt Buckles at California Seaport

At a glance they looked legitimate, but for U.S. Customs and Border Protection officers and import specialists, a shipment of belt buckles bearing the Michael Jackson image was cause for a closer look. CBP officials examined samples of the belt buckles last week and determined that they were indistinguishable from various items bearing the Michael Jackson name, words and images registered with the United States Patent and Trademark Office and the Copyright Office of the Library of Congress.

After the importer was unable to provide authorization for the use of the trademarks and the copyrights, CBP officers seized the shipment containing 800 belt buckles. The domestic value of the shipment is $400, with an estimated manufacturer’s suggested retail price of $6,992. The shipment contained an assortment of items bearing Michael Jackson’s copyrighted images along with the trademarked words “Michael Jackson,” “Dangerous World Tour 1992,” “Dangerous,” “Moonwalker,” “Bad World Tour,” “King of Pop” and “Money,” the title of a popular Michael Jackson song.

3. CBP L.A./Long Beach Intercepts $750,000 in Counterfeit ‘Spiderman’ Sandals

U.S. Customs and Border Protection officials at the Los Angeles/Long Beach seaport complex intercepted and seized a shipment arriving from China containing 25,056 pairs of counterfeit “Spiderman” children’s clog sandals. On August 11, CBP officers and import specialists examined the shipment for possible trademark violations and found 552 cartons containing the counterfeit merchandise with a domestic value of $21,206 and a manufacturer’s suggested retail price of $751,429.

4. Fla. CBP Intercepts Fake Perfume worth $280,000 for Intellectual Property Violation

U.S. Customs and Border Protection officers at Port Everglades performing routine inspections intercepted 9,984 bottles of fake “Perry Ellis” perfume. During examination of the perfume shipment which originated from China, CBP officers assigned to the Port Everglades trade enforcement team discovered possible violations of the Perry Ellis registered trademark. The domestic value of the shipment is $41,920. If it had been genuine “Perry Ellis” perfume, the manufacturer’s suggested retail price would have been $279,552.

During fiscal year 2008, CBP and U.S. Immigration and Customs Enforcement seized more than $272 million worth of counterfeit items nationwide. Perfumes and colognes are among the top commodities seized, accounting for $6.7 million or 2 percent of the total domestic value of intellectual property rights seizures.

SOURCE: CBP

If you have questions regarding intellectual property, click here to contact Jim Chester.

International Business & Trade

EXPORTING

N. Carolina-Based Semiconductor Company Pays $190,000 to Settle Charges of Export Violations; Employee to Pay $15,000 Penalty for “False Statements”

The Commerce Department’s Bureau of Industry and Security (BIS) recently announced that RF Micro Devices, Inc. (RFMD) of Greensboro, N.C. has agreed to pay a $190,000 civil penalty to settle allegations that it exported spread-spectrum modems in violation of the Export Administration Regulations to the People’s Republic of China.

RFMD designs and manufactures high-performance semiconductor components and voluntarily disclosed these violations. In addition, BIS announced today that Carol Wilkins, an RFMD manager whose responsibilities, at the time of the violations, included export control compliance, has agreed to pay a civil penalty in the amount of $15,000 for making false and misleading statements to BIS Special Agents in the course of the investigation of RFMD.

“Unlawful shipment of state-of-the-art micro devices is a serious national security concern,” said Kevin Delli-Colli, the acting assistant secretary of Commerce for Export Enforcement. “Moreover, companies that voluntarily disclose violations must provide truthful and complete information to investigators. Self-serving, false or misleading statements only serve to further undermine corporate credibility.”

The allegations involved 14 unlicensed exports of spread-spectrum modems, classified under Export Control Classification Number 5A001 and controlled for national security reasons, to the People’s Republic of China with knowledge that a violation of the Regulations was occurring, was about to occur or was intended to occur in connection with the spread-spectrum modems. Additionally, BIS alleged that on 13 occasions RFMD made false or misleading statements in connection with the submission of Shipper’s Export Declarations (SEDs). The violations occurred in 2002 and 2003.

BIS also alleged that, in 2004, Carol Wilkins made a false or misleading statement in the course of the BIS investigation of RFMD. Specifically, the allegation stated that Wilkins told a BIS investigator that an outside export control consultant had confirmed that RFMD’s products were not export-controlled to any region where the company was marketing or selling its products. BIS alleged that, in fact, Wilkins had been repeatedly advised that certain RFMD products may have been classified under the Commerce Control List and that these products may have required an export license.

SOURCE: BIS

If you have questions regarding exporting, click here to contact Jim Chester.

International Business & Trade

IMPORTING

CBP Discovers, Seizes Motorcycles and Scooters in Violation of EPA Standards

U.S. Customs and Border Protection officers at Port Everglades intercepted 24 motorcycles that had arrived from China on June 25. CBP officers from the Trade Enforcement Team selected a container for an intensive examination and discovered what they determined to be possible Environmental Protection Agency violations. The shipment was then detained and the documentation and information that was obtained during the inspection forwarded to the EPA for review and evaluation. Once the violations were confirmed the CBP commodity specialists completed the appropriate paperwork and all were seized.

In a related story, U.S. Customs and Border Protection official at the Dallas/Forth Worth port seized more than 1,400 motorcycles and motor scooters with a domestic value of more than $1.6 million officials. The scooters are equipped with unsafe fuel tanks and fuel lines that failed to meet Environmental Protection Agency’s testing on emission guidelines for importation into the U.S. creating potential hazards for the rider. The motorized scooters must meet the requirements of the Clean Air Act. The seized scooters will be stored until such time they are destroyed.

“While protecting our nation’s borders, we also enforce hundreds of U.S. laws including EPA laws,” said Jeffrey O. Baldwin Sr., director of the Houston Field Office. “The environment is a precious resource, and we protect it by seizing or refusing entry to imported vehicles that do not meet EPA and safety standards.”

SOURCE: CBP

If you have questions regarding importing, click here to contact Jim Chester.

International Business & Trade

EXPORTING

Houston Firm Pays $610,000 to Settle Export Violations

The Commerce Department’s Bureau of Industry and Security (BIS) recently announced that FMC Technologies, Inc., has agreed to pay a $610,000 civil penalty to settle allegations that it exported certain oil and gas industry service parts in violation of the Export Administration Regulations.

“An effective compliance program is only as good as its last revision,” said Kevin Delli-Colli, Acting Assistant Secretary of Commerce for Export Enforcement, “not staying up to date with regulatory changes can lead to violations of the export regulations.”

The allegations involved 78 unlicensed exports to a variety of countries of butterfly and check valves classified under Export Control Classification Number 2B350 and controlled for reasons of chemical and biological weapons proliferation. The violations occurred between 2003 and 2007. FMC Technologies headquarters in Houston, Texas is a provider of specialty products and services to the oil and gas industries. The company voluntarily disclosed the violations, and cooperated fully with the investigation.

SOURCE: BIS

If you have questions regarding exporting, click here to contact Jim Chester

About Jim Chester

For more than a decade, Jim has advised Fortune 500 companies, start-ups, and mid-sized companies in a variety of industries regarding intellectual property and international business & trade. He routinely represents companies before the US Patent and Trademark Office (USPTO), the US Library of Congress (Copyright Office), US Customs & Border Protection, among other federal and international governing bodies and agencies. In addition to his work at the Firm, Jim is also an adjunct professor of law at Baylor University Law School, where he teaches courses on International Trade Law and International Business Transactions.

 

International Business & Trade

Defendant Sentenced to Sixty Months on Arms Export Control Act Conspiracy

Joseph Piquet was sentenced by U.S. District Judge Jose Martinez on May 14, 2009, to sixty months in prison, to be followed by two years of supervised release. Piquet was convicted in March 2009 after a four-day trial on all seven counts charged (Case No. 08-14031-Cr-Martinez/Lynch).

Piquet was convicted of seven separate counts arising from a conspiracy to purchase high-tech military use electronic components from a domestic corporation, and to then ship the items to Hong Kong and the People’s Republic of China without first obtaining required export licenses under the Arms Export Control Act and the International Emergency Economic Powers Act. Among the items involved in the export conspiracy were high power amplifiers designed for use by the U.S. military in early warning radar and missile target acquisition systems, and low noise amplifiers that have both commercial and military use.

The testimony at trial showed that on five separate occasions, from March 2004 through February 2005, Piquet bought the restricted electronic components and submitted false End Use Certificates to the manufacturer to conceal the intended final destination of the parts, which he then forwarded through conspirators in Texas and Hong Kong.

Mr. Acosta commended the collaborative investigative work of OEE, ICE’s Office of Investigations in West Palm Beach, and the Office of International Affairs of the Department of Justice. Acosta also commended Northrop Grumman Corporation for its outstanding cooperation throughout the investigation and prosecution of this case.

SOURCE: BIS

If you have questions regarding export controls, click here to contact Jim Chester.

Intellectual Property

Counterfeit Alert – I. P. Border Enforcement

CBP has designated intellectual property rights enforcement as a Priority Trade Issue and devotes considerable resources and diverse personnel to the enforcement of IPR. CBP has targeted and seized an increasing number of counterfeit products that pose safety threats to American consumers, to our infrastructure, and potentially to our security. In fiscal year 2008, CBP initiated more than 14,700 IPR seizures with a domestic value of more than $267 million.

– Los Angeles CBP Seizes $5.1 Million Worth of Fake Merchandise

In July, U.S. Customs and Border Protection officials at Los Angeles/Long Beach seaport seized 20,136 counterfeit items. The items confiscated consisted of handbags, wallets, tote bags and backpacks. The total appraised domestic value of the shipment was $63,234; however, had they been sold at their legitimate value they would have been worth $5.1 million.

These items arrived from China in two different containers and were both selected for a CBP examination. Following an intensive examination of the merchandise, CBP officers discovered the counterfeits and seized the goods for violating the Burberry, Tokidoki, Baby Cinnamon and Tous trademarks. The seizures occurred on July 14 and 15.

– CBP in Norfolk, VA Seizes Counterfeit Jeans worth $1.1 Million

U.S. Customs and Border Protection in Norfolk seized more than 14,000 pieces of counterfeit designer jeans on July 9, officials announced. CBP officers discovered the suspect shipment in a container that was selected for an examination. Later, CBP imports specialist confirmed the jeans were counterfeit. A total of 14,400 jeans bearing the Abercrombie logo were seized. The shipment had a total domestic value of $144,000 and a manufacturers suggested retail price of $1,152,000.

– CBP in Charleston, SC Intercepts Counterfeit Clothing Shipments worth $727,000

U.S. Customs and Border Protection at the Port of Charleston recently seized more than 800 pieces of counterfeit designer shorts and jeans in two separate seizures, officials announced.
CBP officers discovered the shipments of counterfeit merchandise in two containers that were selected for examination. A total of 187 shorts bearing the Izod logo accounted for the first seizure. The second seizure consisted of 475 denim jeans bearing the Old Navy logo, and 185 shorts and jeans bearing the Gap logo. Combined, the shipments had a total domestic value of $165,000 and a manufacturers suggested retail price of $727,208.

– Los Angeles CBP Seizes 10,900 Pairs of Fake Nike Shoes Worth $1.8 Million

U.S. Customs and Border Protection officials at Los Angeles/Long Beach seaport recently seized 10,900 pairs of counterfeit Nike shoes. CBP officers confiscated the fake Nike athletic shoes along with 16 pairs of used sneakers, which were co-mingled with the fakes apparently to disguise the crime.

The appraised domestic value of the shipment was $381,740. Had the shoes been legitimate, the value would have been $1.8 million. Nike officials advised CBP that they had not authorized the importer or exporter to use their trademark.

In this incident the shipping container that arrived from China was selected for CBP examination on May 21. The contents were declared as shoes but had no indication of the type of shoes. Following intensive inspection of the shipment, CBP officers discovered the counterfeits and seized the goods for federal violation of merchandise bearing a counterfeit trademark, intercept, detain, seize and forfeit shipments of goods that violate these laws.

SOURCE: CBP

If you have questions regarding protecting intellectual property, click here to contact Jim Chester.

International Business & Trade

CBP Agriculture Specialists in Los Angeles Intercept 2,845 Pests during April, May & June 2009

U.S. Customs and Border Protection agriculture specialists from Los Angeles Field Operations intercepted more than 2,845 pests from entering the country during the third quarter of fiscal year 2009 (April 1 – June 30).

CBP agriculture specialists conduct inspections of arriving passengers and cargo at ports of entry to prevent the entry of prohibited agriculture items that can host many pests. Kevin Weeks, director of Field Operations Los Angeles said, “CBP agriculture specialists play an active role in protecting the U.S. agriculture industry by preventing the introduction of harmful pests into the country.”

Some of the pests intercepted were classified as “actionable.” If introduced into the United States, actionable pests have potential to significantly harm the food supply because they are either non-existent in the U.S. or currently have very limited distribution in the country. Preventing the entry of these pests saves the country millions of dollars in eradication efforts.

In fiscal year 2008, 7,866 pests were intercepted by Los Angeles Field Operations agriculture specialists. All prohibited products or items containing pests are fumigated, destroyed or returned to the country of origin. Los Angeles Field Operations encompasses Los Angeles International airport, Long Beach/Los Angeles seaport, Las Vegas International airport and an International mail facility.

CBP Field Operations is responsible for securing our borders at the ports of entry. U.S. Customs and Border Protection officers’ primary mission is anti-terrorism; they screen all people, vehicles, and goods entering the United States, while facilitating the flow of legitimate trade and travel into and out of the United States. Their mission also includes carrying out traditional border-related responsibilities, including narcotics interdiction, enforcing immigration law, protecting the nation’s food supply and agriculture industry from pests and diseases, and enforcing trade laws.

SOURCE: CBP

If you have questions regarding importing, click here to contact Jim Chester

Intellectual Property

USPTO Takes Another Step Closer to Full Electronic Patent Application Processing

e-Office Action provides faster, more efficient notification to patent applicants

The United States Patent and Trademark Office (USPTO) recently announced the implementation of the e-Office Action program following a successful pilot project. Under the program, patent applicants receive an e-mail notification of office communications instead of paper mailings. An e-mail is sent to program participants when new office communications are available for viewing and downloading in Private PAIR, the patent application information retrieval system that allows applicants electronic access to the entire file history of their applications.

“We received very positive feedback from applicants who participated in the pilot program,” said Acting Under Secretary of Commerce for Intellectual Property and Acting Director of the USPTO John Doll. “Not only have we dramatically reduced paper processing and mailing costs but also expedited notification allowing applicants to take full advantage of their time period for reply to an office action.”

The e-Office Action program minimizes the possibility of lost or delayed postal mail and makes it faster and more efficient for participants to process and docket USPTO communications in electronic format, thus reducing processing costs. During the pilot, participants were able to retrieve office communications several days faster than postal mail. Participants in the pilot program have also suggested several enhancements to the system which will be under consideration for future implementation as the IT infrastructure is strengthened.

Participation in the e-Office Action program is optional and open to any registered attorney or agent of record, or pro se inventor who is a named inventor, in a patent application associated with a customer number. Program participants also will have the flexibility to opt-out of the e-Office Action program at any time and return to receiving office communications through the postal mail.

The program includes provisional applications and non-provisional applications including utility, plant, design, and reissue applications and national stage applications. International applications, reexamination proceedings, and interference proceedings are not included in the program.

Full requirements for e-Office Action program participation, training, and other program resource information are available at www.uspto.gov/eoa. For specific questions or suggestions about e-Office Action, please contact the Patent Electronic Business Center (EBC) Customer Service Center at 866-217-9197 (toll-free) or 571-272-4100 or send an e-mail to [email protected]

SOURCE: USPTO

If you have questions regarding intellectual property, click here to contact Jim Chester.

International Business & Trade

First Indian Company to Receive Express Lane Status for U.S.-Indian Trade

First designation for a company in India will cut red tape and increase flow of high-technology trade between the two countries

General Electric India (GE India) has been tapped as the first Indian company to qualify as a validated end-user (VEU) in India, allowing the company to enter a pre-approved, export express lane as a trusted end user.

After an extensive background review, the VEU designation will allow GE India to receive certain controlled items from the United States, including civilian aircraft technology and explosive detection equipment without an individual license, cutting red tape and making the flow of trade more efficient between the countries.

That the VEU program was opened for India is an indication of the increased importance of the U.S.-India bilateral and commercial relationship.

End-users that apply and are qualified by BIS as validated end-users are eligible to receive specified items under the general authorization “Authorization Validated End User” instead of under individual transaction-specific licenses. Companies in India participating in VEU must pass a rigorous national security review and agree to strict follow-on compliance obligations prior to qualification. Qualification for VEU benefits both the foreign participants and U.S. exporters by limiting the paperwork that must be completed for shipment authorization, thereby allowing export on demand as well as resource savings.

The program is administered by the Department of Commerce’s Bureau of Industry and Security (BIS) and implemented by an interagency committee consisting of representatives from the Departments of Commerce, State, Defense, Energy and, when appropriate, the Treasury.

GE India will become eligible as a validated end-user later this month after the regulation is published in the Federal Register. Secretary Locke also encouraged additional Indian firms to take advantage of the VEU program.

SOURCE: CBP

If you have questions regarding exporting, click here to contact Jim Chester.

International Business & Trade

USITC Announces Remedy Proposals in China Safeguard Investigation Involving Imports of Certain Passenger and Light Truck Tires from China

The U.S. International Trade Commission (USITC) recently announced the remedy proposals it will forward to the President and the U.S. Trade Representative (USTR) in its China safeguard investigation concerning certain passenger and light truck tires from China.

This action follows the Commission’s June 18, 2009, determination on market disruption in the investigation. The Commission found that certain passenger vehicle and light truck tires from China are being imported into the United States in such increased quantities or under such conditions as to cause or threaten to cause market disruption to the domestic producers of like or directly competitive products.

The Commission announced that they will propose that the President, for a three-year period, impose a duty, in addition to the current rate of duty, on imports of certain passenger vehicle and light truck tires from China. This duty would be 55 percent ad valorem in the first year, 45 percent ad valorem in the second year, and 35 percent ad valorem in the third year. They further announced that they will recommend that, if applications are filed, the President direct the U.S. Department of Labor and the U.S. Department of Commerce to provide expedited consideration of Trade Adjustment Assistance for firms and/or workers that are affected by subject imports.

Vice Chairman Daniel R. Pearson and Commissioner Deanna Tanner Okun announced that while they did not find market disruption to exist, they intend to submit views on this matter to the President, as has been done previously under Section 421 investigations. They will urge that no trade restricting action be taken. Rather, they will urge that the U.S. government be prepared to provide economic adjustment assistance to displaced tire workers. They noted that Trade Adjustment Assistance already has been provided to some tire industry workers and will recommend that the President utilize similar measures to help workers who find that their employment alternatives are changing.

The Commission will submit its report to the President and the USTR by July 9, 2009. The report will include the Commissioners’ determination, views, and remedy proposals. The President, not the Commission, will make the final decision whether to provide relief to the U.S. industry and the type and amount of relief.

Under section 421 of the Trade Act of 1974, the Commission determines whether imports of a product from China are being imported into the United States in such increased quantities or under such conditions as to cause or threaten to cause market disruption to the domestic producers of like or directly competitive products. If the Commission makes an affirmative determination, it proposes a remedy. The Commission sends its report to the President and the U.S. Trade Representative. The President makes the final remedy decision. (For further information, see section 421, Trade Act of 1974, 19 U.S.C. 2451.)

SOURCE: ITC

If you have questions regarding safeguards, click here to contact Jim Chester.

International Business & Trade

Japan, U.S. Sign Arrangement to Align Security Standards for Cross-Border Business

Japan and the United States signed a mutual recognition arrangement June 26 aligning security standards in international trade partnership programs critical to both countries. The arrangement recognizes compatibility between the Japan and U.S. cargo security programs.

The Director General of Japan Customs and Tariff Bureau Hiroshi Fujioka and U.S. Customs Border Protection Acting Commissioner Jayson P. Ahern in a ceremony in Brussels agreed to mutual standards in Japan’s Partners Authorized Economic Operators program and the U.S.’s Customs-Trade Partnership Against Terrorism program.

The arrangement acknowledges that CTB and CBP will accept the security status of members of each other’s programs. It is expected that this arrangement will result in cost savings to both CTB and CBP because the number of supply chain security validations that each customs administration has to conduct will be reduced.

“This arrangement is yet another sign of the level of trust and respect we have for one of our most important economic partners,” said Acting Commissioner Ahern.

The goal of these arrangements is to link the various international industry partnership programs, so that together they create a unified and sustainable security standard that can assist in securing and facilitating global cargo trade.

SOURCE: CBP

If you have questions regarding doing business internationally, click here to contact Jim Chester

About Jim Chester

For more than a decade, Jim has advised Fortune 500 companies, start-ups, and mid-sized companies in a variety of industries regarding intellectual property and international business & trade. He routinely represents companies before the US Patent and Trademark Office (USPTO), the US Library of Congress (Copyright Office), US Customs & Border Protection, among other federal and international governing bodies and agencies. In addition to his work at the Firm, Jim is also an adjunct professor of law at Baylor University Law School, where he teaches courses on International Trade Law and International Business Transactions.

Click here to contact Jim Chester.

www.tradelawfirm.com

Jim Chester | 214-672-2114 | [email protected]

Tags: None

Comments: Leave a comment

 

CHESTER’S Trade & Innovation Law Update – June/July 2009 Issue

On behalf of Klemchuk Kubasta, LLP posted in Trade & Technology Law on Monday, July 13, 2009

International Trademark Registrations Top One Million

In May, the number of international trademark registrations topped the one million mark when Austrian “eco” company Grüne Erde, which specializes in natural wood, textile and cosmetic products, registered its mark under the WIPO-administered Madrid system for the international registration of marks.

Trademark registrations often mirror evolving consumer tastes as companies work to strengthen their market position. In this case, the millionth trademark registration is a “green” brand, reflecting a growing environmental awareness among the general public and the business community.

“Trademarks and the branding efforts they support help consumers make informed choices about the products they buy,” said WIPO Director General Francis Gurry. “They are extremely valuable commercial assets. WIPO’s international trademark registration system is a cost-effective, user-friendly and streamlined means by which businesses operating internationally can protect and manage their trademark portfolio.”

Grüne Erde founder and Managing Director Reinhard Kepplinger said the company is “delighted” to be registered as the millionth international trademark. “We have found that the Madrid system offers an easy and inexpensive way for our company to register its trademark internationally,” he said. Kepplinger added that Grüne Erde, which employs more than 300 people, is tangible proof that “it is possible to create an ecologically-aware company that is highly successful within the marketplace.” The company produces and sells a range of some 5,000 products made from natural materials including furniture, textiles and cosmetics.

The increasingly rapid growth of the Madrid system over the last two decades reflects the increased internationalization of trade and broader recognition of the commercial importance of trademarks. After the first international trademark was registered in 1893 by Swiss Chocolate-maker Russ-Suchard & Company, it took some 93 years to reach the 500,000th mark, registered in 1986 by Sandoz AG of Switzerland (now owned by BASF SE of Germany). The 750,000th mark was registered 15 years later in 2001 by microTec Gesellschaft für Mikrotechnologie mbH of Germany. The 900,000th international trademark was registered five years later in 2006 by a Chinese company, Chaozhou Fengxi Jinbaichuan Porcelain Crafts Factory, with the millionth mark registered just three years later.

If you have questions regarding protecting your intellectual property in the U.S. and abroad, click here to contact Jim Chester.

Source: WIPO

International Business & Trade

Defendant Sentenced in Conspiracy to Export Military Aircraft Parts to Iran

Traian Bujduveanu was recently sentenced in Miami federal court for his role in a conspiracy to illegally export military and dual use aircraft parts to Iran. Bujduveanu’s co-defendant, Hassan Keshari, and his corporation, Kesh Air International, were sentenced in May 2009.

U. S. District Court Judge Patricia Seitz sentenced Bujduveanu to thirty-five (35) months’ imprisonment, followed by three (3) years of supervised release. Bujduveanu pled guilty on April 2, 2009 to Count 1 of the Indictment, which charged conspiracy to export and cause the export of goods from the U.S. to the Islamic Republic Iran, in violation of the Embargo imposed upon that country by the U.S. and in violation of the International Emergency Economic Powers Act, and to export and cause to be exported defense articles in violation of the Arms Export Control Act.

As part of his plea, Bujduveanu, a Romanian national and naturalized U.S. citizen, admitted that he used his Plantation, FL corporation, Orion Aviation, to sell aircraft parts to Keshari for purchasers in Iran and exported the aircraft parts to Iran by way of freight forwarders in Dubai, United Arab Emirates. Among the aircraft parts illegally exported to Iran through the conspiracy were parts designed exclusively for the F-14 Fighter Jet, the Cobra AH-1 Attack Helicopter, and the CH-53A Military Helicopter. All of these aircraft are part of the Iranian military fleet, while the F-14 is known to be used exclusively by the Iranian military. Moreover, all of the parts supplied by Bujduveanu as part of the conspiracy are manufactured in the U.S., are designed exclusively for military use, and have been designated by the U.S. Department of State as “defense articles” on the U.S. Munitions List, thus requiring registration and licensing with the Department of State, Directorate of Defense Trade Controls. Neither Bujduveanu nor his co-defendants are registered, and they did not have the required licenses to ship defense articles to Iran.

According to the Indictment and statements and documents filed with the court, Bujduveanu received orders by email from Keshari requesting specific aircraft parts for buyers in Iran. Bujduveanu then provided quotes, usually by e-mail, to Keshari. After the receipt of payment for the parts from Keshari, Bujduveanu then sent the parts to a company in Dubai through the use of false or misleading shipping document. From Dubai, the parts were then shipped on to the purchasers in Iran.

Bujduveanu has been in federal custody since his arrest in June 2008.

If you have questions regarding export laws, click here to contact Jim Chester.

Source: BIS

Intellectual Property

Red Bull Wants to Clip Infringers’ Wings

The U.S. International Trade Commission (USITC) has voted to institute an investigation of certain energy drink products. The investigation is based on a complaint filed by Red Bull GmbH of Austria and Red Bull North America, Inc., of Santa Monica, CA, on May 15, 2009. The complaint alleges violations of section 337 of the Tariff Act of 1930 in the importation into the United States and sale of certain energy drink products that infringe trademarks and a copyright asserted by Red Bull. The complainant requests that the USITC issue an exclusion order and cease and desist orders.

The USITC has identified the following as respondents in this investigation:

* Chicago Import Inc. of Chicago, IL;
* Lamont Dist. Inc., a/k/a Lamont Distributors Inc. of Brooklyn, NY;
* India Imports, Inc., a/k/a International Wholesale Club of Metairie, LA;
* Washington Food and Supply of D.C., Inc., a/k/a Washington Cash & Carry of Washington, D.C.;
* Vending Plus, Inc. of Glen Burnie, MD; and
* Baltimore Beverage Co. of Glen Burnie, MD.

By instituting this investigation (337-TA-678), the USITC has not yet made any decision on the merits of the case. The USITC’s Chief Administrative Law Judge will assign the case to one of the USITC’s six administrative law judges (ALJ), who will schedule and hold an evidentiary hearing. The ALJ will make an initial determination as to whether there is a violation of section 337; that initial determination is subject to review by the Commission.

The USITC will make a final determination in the investigation at the earliest practicable time. Within 45 days after institution of the investigation, the USITC will set a target date for completing the investigation. USITC remedial orders in section 337 cases are effective when issued, and they become final 60 days after issuance unless disapproved for policy reasons by the U.S. Trade Representative within that 60-day period.

If a violation is determined, the ITC will issue a Section 337 “Exclusion Order” which will require US Customs to seize all imports of the covered merchandise.

If you have questions regarding stopping infringing imports, click here to contact Jim Chester.

Source: ITC

Intellectual Property

CBP in Los Angeles Donates 3,696 Shirts to Charity

U.S. Customs and Border Protection in Los Angeles is donating 3,696 men’s shirts to Shelter Partnership, Inc., in Los Angeles, a non-profit charity organization. The donation has an estimated domestic value of $9,536 and a manufacturer’s suggested retail price of $66,491.

The shirts arrived from Pakistan in a sea container at the Los Angeles/ Long Beach seaport complex. CBP officers intercepted and seized the shirts for bearing counterfeit trademarks. The legitimate trademark owner has authorized CBP to donate the items to charity. “We are pleased to be able to donate the shirts to assist Shelter Partnership in providing help to the needy,” said Kevin Weeks, CBP director of Los Angeles Field Operations.

In fiscal year 2008, CBP and U.S. Immigration and Customs Enforcement seized more than $272.7 million worth of counterfeit items nationwide. Wearing apparel was one of the top five commodities seized with a total domestic value of $25.1 million, which accounted for 9 percent of the entire value of goods seized.

CBP is charged with enforcing trade laws and has devoted substantial resources to target, intercept, detain, seize and forfeit shipments of goods that violate these laws.

Once federal forfeiture procedures are completed, seized items may be donated to relief efforts and to charity, with the trademark owner’s approval. Products that threaten the health and safety of American consumers are destroyed.

If you have questions regarding intellectual property laws, click here to contact Jim Chester.

Source: CBP

International Business & Trade

Goods and Services Deficit Increases in April 2009

The Nation’s international deficit in goods and services increased to $29.2 billion in April from $28.5 billion (revised) in March, as exports decreased more than imports.

Chart Source: U.S. Census

Highlights
* Exports decreased to $121.1 billion in April from $123.9 billion in March. Goods were $80.0 billion in April, down from $82.6 billion in March, and services were $41.1 billion in April, down from $41.4 billion in March.

* Imports decreased to $150.3 billion in April from $152.5 billion in March. Goods were $120.1 billion in April, down from $121.8 billion in March, and services were $30.2 billion in April, down from $30.7 billion in March.

* For goods, the deficit was $40.1 billion in April, up from $39.2 billion in March. For services, the surplus was $10.9 billion in April, up from $10.7 billion in March.

Goods by Category
* The March to April decrease in exports of goods reflected decreases in industrial supplies and materials ($1.3 billion); capital goods ($1.1 billion); consumer goods ($0.5 billion); other goods ($0.2 billion); and automotive vehicles, parts, and engines ($0.2 billion). An increase occurred in foods, feeds, and beverages ($0.3 billion).

* The March to April decrease in imports of goods reflected decreases in capital goods ($0.9 billion); industrial supplies and materials ($0.7 billion); other goods ($0.3 billion); automotive vehicles, parts, and engines ($0.1 billion); and foods, feeds, and beverages ($0.1 billion). An increase occurred in consumer goods ($0.4 billion).

Services by Category
* The March to April change in exports of services reflected decreases in travel ($0.1 billion); other private services ($0.1 billion), which includes items such as business, professional, and technical services, insurance services, and financial services; and passenger fares ($0.1 billion). An increase in other transportation ($0.1 billion), which includes freight and port services, was partly offsetting. Changes in other categories of services exports were small.

* The March to April change in imports of services reflected decreases in other transportation ($0.3 billion), travel ($0.1 billion), and passenger fares ($0.1 billion). An increase in other private services ($0.1 billion) was partly offsetting. Changes in other categories of services imports were small.

Goods by Geographic Area (Not Seasonally Adjusted)
* The goods deficit with Canada increased from $0.8 billion in March to $1.2 billion in April. Exports decreased $0.7 billion (primarily pharmaceutical preparations) to $16.1 billion, while imports decreased $0.3 billion (primarily iron and steel mill products) to $17.3 billion.

* The goods deficit with China increased from $15.6 billion in March to $16.8 billion in April. Exports decreased $0.4 billion (primarily steelmaking materials) to $5.2 billion, while imports increased $0.7 billion (primarily apparel and furniture) to $21.9 billion.

* The goods deficit with the European Union increased from $4.4 billion in March to $5.3 billion in April. Exports decreased $2.0 billion (primarily civilian aircraft, engines, equipment, and parts) to $17.8 billion, while imports decreased $1.0 billion (primarily passenger cars, industrial machines, and petroleum products) to $23.2 billion.

If you have legal questions regarding importing or exporting, click here to contact Jim Chester.

Source: U.S. Census

International Business & Trade

Customs Issuing New FAST Cards for Commercial Drivers Border Crossing Program Members

U.S. Customs and Border Protection (CBP) reminds members of its Free and Secure Trade (“FAST”) program that all FAST cards are compliant with the new travel document requirements under the Western Hemisphere Travel Initiative that went into effect on June 1.

The FAST program is available to commercial drivers crossing both the northern and southern borders. Currently, the program has more than 91,000 members. For more information on enrollment in the FAST program, visit the Travel page of the CBP Web site. FAST cards can be used by travelers in commercial lanes or in regular passenger lanes at U.S. land ports of entry. They cannot be used in the NEXUS and SENTRI dedicated lanes.

CBP has been issuing new cards for current FAST members since March 16. The new cards have enhanced security features that allow U.S. and Canadian citizen cardholders to comply with the documentary requirements under WHTI. All members must activate their cards within 30 days of issuance by going to the application on the CBP web site.

FAST members are requested to destroy their old cards after activating their new ones and to verify and update their contact information online. CBP will notify FAST members when their old cards will be deactivated. FAST members who have not yet received their new cards should call the enrollment center where they joined the FAST program to schedule a time to pick up their new card in the next 30 days.

If you have questions regarding Customs laws, click here to contact Jim Chester.

Source: CBP

Intellectual Property

U.S. to Move Foward in International Anti-Counterfeiting Talks

The United States Trade Representative (USTR) recently announced that the Obama Administration plans to move forward with the negotiation of an Anti-Counterfeiting Trade Agreement (ACTA) to step up the fight against global counterfeiting and piracy.

“The ACTA negotiations provide an opportunity to toughen international standards for the enforcement of intellectual property rights, making it harder for counterfeit and pirated products to enter our country, and making the world safer for the innovation and creativity that are so critical to the U.S. economy,” said United States Trade Representative Ron Kirk. “As we proceed with these negotiations, we will ensure that the public is kept well informed and has further opportunities to give input.”

The Obama Administration has been conducting an overall review of current and pending trade agreements, including the ACTA. Ambassador Kirk emphasized that ACTA remains an important part of the U.S. trade agenda and, accordingly, the United States is ready to continue negotiations. In keeping with President Obama’s transparency goals, USTR will continue its efforts to ensure that the public is well-informed about the negotiations. In addition to the April 6 release of a detailed summary of issues under negotiation, USTR has established a dedicated ACTA page on the USTR website. Also, USTR will maintain our “open-door” policy toward all stakeholders, and will hold “town hall” meetings to engage with members of the public.

The participants in the ACTA negotiations will next meet in Morocco in July to continue their discussions with a goal of reaching an agreement in 2010. Today’s announcement underscores the participants’ goal of combating global infringements of intellectual property rights (IPR), particularly in the context of counterfeiting and piracy, by increasing international cooperation, strengthening the framework of practices that contribute to effective enforcement, and strengthening relevant IPR enforcement measures themselves.

Negotiations on the ACTA began in June 2008. The objective of the ACTA negotiations is to create a new, state-of-the art agreement to combat counterfeiting and piracy. The United States has been working with several trading partners, including Australia, Canada, the European Union and its 27 member states, Japan, Mexico, Morocco, New Zealand, Singapore, South Korea, and Switzerland, to negotiate the agreement. When it is finalized, the ACTA is intended to assist in the efforts of governments around the world to combat more effectively the proliferation of counterfeit and pirated goods, which undermines legitimate trade and the sustainable development of the world economy, and in some cases contributes to organized crime and exposes American consumers to dangerous fake products.

The U.S. approach to the legal framework provisions of ACTA has been to view the IPR enforcement provisions of recent U.S. free trade agreements as a model. Members of the public with questions about the status of the negotiations should contact Kira Alvarez, Chief Negotiator and Deputy Assistant U.S. Trade Representative for Intellectual Property Enforcement at (202) 395-4510.

If you have questions regarding international trade agreements, click here to contact Jim Chester.

Source: USTR

About Jim Chester

For more than a decade, Jim has advised Fortune 500 companies, start-ups, and mid-sized companies in a variety of industries regarding intellectual property and international business & trade. He routinely represents companies before the US Patent and Trademark Office (USPTO), the US Library of Congress (Copyright Office), US Customs & Border Protection, among other federal and international governing bodies and agencies. In addition to his work at the Firm, Jim is also an adjunct professor of law at Baylor University Law School, where he teaches courses on International Trade Law and International Business Transactions.

Tags: None

Comments: Leave a comment

 

Trade & Innovation Law Update – May 2009

On behalf of Klemchuk Kubasta, LLP posted in Trade & Technology Law on Thursday, June 18, 2009

Innovation & Trade Law Update – May 2009

International Business & Trade

U.S. Export Fact Sheet

ITA’s February 2009 Export Statistics Released April 9, 2009

With the release of February 2009 U.S. International Trade in Goods and Services report by the Department of Commerce’s U.S. Census Bureau and the Bureau of Economic Analysis, U.S. exports of goods and services increased by 1.6% in February 2009 to $126.8 billion since January 2009, while imports declined 5.1% to $152.7 billion over the same period. The U.S. goods and services trade deficit ($26.0 billion) was the lowest monthly deficit since November 1999. This led to a 28.3% improvement in the goods and services deficit when compared to January 2009. The monthly goods and services trade deficit has declined for the seventh consecutive month from the $62.5 billion deficit recorded in July 2008 to the $26.0 billion recorded in February 2009.

Trade Spotlight::

  • The largest export markets for U.S. goods year-to-date through February 2009 were Canada ($30.3 billion), Mexico ($19.1 billion), China ($8.9 billion), Japan ($8.2 billion), and the United Kingdom ($7.4 billion)
  • Capital goods represent the largest goods export category (end-use) for the U.S. with $66.4 billion worth of exports year-to-date through February 2009.
  • The top export categories for capital goods products through February 2009 were civilian aircraft ($6.9 billion), semiconductors ($5.5 billion), telecommunications equipment ($5.0 billion), industrial machines ($4.8 billion), and medicinal equipment ($4.5 billion).
  • Industrial supplies represented $44.2 billion of U.S. exports in through February 2009, down $17.4 billion (or 28.3 percent) from the same period of 2008.
  • The top export categories for industrial supplies through February 2009 were plastic materials ($3.4 billion), organic chemicals ($3.3 billion), other chemicals ($3.2 billion), fuel oil ($3.2 billion), and other petroleum products ($2.8 billion).
  • Foods, feeds and beverages represented $14.3 billion of U.S. exports through February 2009. The U.S. trade surplus in foods, feeds and beverages fell $2.5 billion to reach $739 million through February 2009, down from a surplus of $3.2 billion through the same period of 2008.
  • The top export categories for foods, feeds, and beverages through February 2009 were soybeans ($2.3 billion), meat and poultry ($2.1 billion), corn ($1.4 billion).
  • U.S. services exports totaled $84.6 billion through February 2009, down $4.7 billion (or 5.3 percent) from the same period of 2008. The surplus in services was $21.6 billion, down $1.0 billion (or 4.4 percent) from the first two months of 2008.
  • Services export categories were other private services ($39.0 billion), travel ($16.0 billion), royalties and license fees ($14.5 billion), other transportation ($7.8 billion), passenger fares ($4.7 billion), and government services ($2.6 billion).

Source: ITA

Intellectual Property

USPTO, German Patent Office Partner

The U.S. Commerce Department’s United States Patent and Trademark Office (USPTO) and the German Patent and Trade Mark Office (DPMA) agreed to partner in establishing a Patent Prosecution Highway (PPH) pilot program. PPH agreements are cooperative initiatives that streamline the patent system and promote expeditious, inexpensive and high-quality patent protection throughout the world. The U.S.-German PPH is USPTO’s ninth such agreement with other nations’ patent and trademark offices. The pilot period will begin April 27, 2009, and continue for a period of two years.

“The Patent Prosecution Highway with Germany will eliminate redundant work and expedite processing,” Acting Director of the USPTO John J. Doll said. “By working with our colleagues at the German Patent and Trade Mark Office, both offices will increase the efficiency of the patent process and will further expand a worldwide network that allows a broader array of inventors to take advantage of these benefits.”

“The pilot program will enable both offices to use the respective work and search results. Intensified cooperation of our two offices will enhance efficiency and quality of the patent grant procedure and so be of great advantage to U.S. and German applicants,” said Cornelia Rudloff-Schäffer, President of the German Patent and Trade Mark Office.

PPH implementation is a significant achievement and is part of USPTO’s 21st Century Strategic Plan to transform the agency into a more quality-focused, highly productive organization. The plan is one step toward addressing a growing patent backlog and increased workload.

Under PPH agreements, an applicant receiving a favorable ruling from one nation’s patent office on at least one claim in an application may request that the corresponding application filed with the other nation advance out of turn for examination. By coordinating patentable results between both nations’ offices, applicants can expect to obtain patents in both nations more quickly.

USPTO requirements for participation in the U.S.-German PPH are available at: http://www.uspto.gov/web/patents/pph/pph_dpma.html.

DPMA requirements for participation can be found at: http://www.dpma.de/english/patent/forms/index.html

The USPTO and the DPMA will continue to evaluate the needs of applicants and the progress of the PPH. Discussions on revisions to the requirements and to improve the procedure of the PPH will be ongoing.

The pilot program may be extended if necessary to adequately assess the feasibility of the PPH program. Notification of any revisions will be posted on the web sites of each office.

SOURCE: USPTO

International Business & Trade

Chicago CBP Seizes $1.3M in Counterfeit Designer Merchandise

In April, U .S. Customs and Border Protection import specialists at Chicago O’Hare International Airport seized a large shipment of counterfeit merchandise.

The shipment en route from Hong Kong to Toronto contained more than 2,000 items, included wallets, handbags, purses and tote bags with protected trademarks and a Manufacturer’s Suggested Retail Price value of more than $1.3 million and a domestic value of more than $300,000.

The counterfeit merchandise was discovered during a warehouse sweep of arriving international freight shipments by CBP officers with the Contraband Enforcement Team. The 2,172 piece shipment, which arrived in 26 large packages, was verified as counterfeit merchandise by CBP import specialists. The shipment contained items bearing popular brand name trade marks ranging from Prada and Coach handbags to Gucci and Louis Vuitton wallets, from Dolce & Gabbana and Chanel belts to Tiffany jewelry.

“When it comes to imported goods coming into the United States, CBP is on the frontline and import specialists play a key role in determining admissibility, classification, duty, and health-safety determinations for imported merchandise,” said Janice Adams, acting director of field operations in Chicago. “CBP is vigilant and on the constant lookout to prevent illegal goods and contraband from entering this country.”

U.S. Customs and Border Protection officers protect registered trademarks by preventing the importation of infringing goods. Trademarks and copyrights are recorded with CBP through the Intellectual Property Rights e-Recordation online system. This system allows CBP to obtain information instantly which facilitates the seizure of fake goods.

The domestic value of counterfeit goods seized for Intellectual Property Rights violations in fiscal year 2008 increased by 38.7 percent to $272.7 million an increase of more than $72 million from FY 2007.

For more information on import or IP issues, click here to contact Jim Chester.

Source: CBP

Upcoming Trade & Innovation Seminars

Protecting Intellectual Property in International Trade
Sponsor: Texas Bar Association – International Section
Date: June 25, 2009
Time: TBD
Place: TBD, Dallas

Speaker: Jim Chester
Contact: TBD

International Business & Trade

Houston Firm Settles Export Allegations for $800K

The Commerce Department’s Bureau of Industry and Security (BIS) recently announced that B.J. Services Company, a provider of specialty products and services to the oil and gas industries, has agreed to pay an $800,000 civil penalty to settle allegations that it exported certain butterfly and check valves in violation of the Export Administration Regulations. B.J. Services Company is headquartered in Houston, Texas.

“An effective compliance program requires continuous oversight and revision,” said Kevin Delli-Colli, the Acting Assistant Secretary of Commerce for Export Enforcement. “Failing to keep pace with changing business practices can result in numerous violations and degrade our system of export controls.”

The allegations involved 72 unlicensed exports to a variety of countries of various service parts controlled under Export Commodity Classification Number 2B350 for reasons of chemical and biological weapons proliferation, specifically, Teflon-coated valves, spare parts kits (including seats and o-rings), and spare parts for pumps. The violations occurred between 2003 and 2007. The company voluntarily disclosed the violations, and cooperated fully with the investigation.

For more information on export rules and penalties, click here to contact Jim Chester.

Source: BIS

Tags: None

Comments: Leave a comment