FOCUS ON: Intellectual PropertyTHE INTERNATIONAL LAW Quarterly a publication of the florida bar international law section www.floridabar.org • www.internationallawsection.org Vol. XXX, no. 1 Winter 2012 Managing Your Client’s Marks Worldwide: Challenges and Strategies of Registering and Maintaining Your Brand Abroad By Penelope B. Perez-Kelly, Orlando, Florida In ThIs Issue: Message from the Chair ...................3 From the Editor .................................4 World Roundup........................... 8-15 The Quest for Intellectual Property Protections in a Digital Age..........17 Football Association Premier League Limited and others v. QC Leisure and others; Murphy v. Media Protection Services Limited— Landscape Change for Rights Licensing in Europe, But Not All Good News for Public Venues .....21 The Glivec Cases: Novartis and the New Pharmaceutical Patent Regime in India ................27 Christian Louboutin and U.S. Customs and Border Protection ..31 Honda Motor Co. Ltd. v. Friedrich Winkelmann: Raising the Bar on “Bona Fide Intent to Use” in U.S. Trademark Applications ...36 A Practical Guide to Introducing Products in the Dominican Republic.......................................38 Pleural Plaques: The North-South Divide...........................................44 Creating Jobs and Strengthening the U.S. Economy Through the E Visa ....................................49 The Redesigned U.N. Internal Justice System: Providing Administrative Justice to International Civil Servants? ....................................53 High-Speed Public Policy for Algae-Based Biofuel as a Viable Energy Alternative—Improving Florida-China Relations Through Sustainable Collaboration ....... 56 Section Calendar ........................ 64 The Call Your corporate client has just advised you that it has acquired a new company and has asked you review the new company’s trademark portfolio to determine what marks are registered and where, and ultimately to make recommendations regarding the assignment and continued protection of those marks. You are told that the portfolio consists of trademarks in the United States and abroad. You begin reviewing the acquired marks and all information regarding their ownership. After a review of the marks acquired, you need to determine the requirements of various countries to assign the marks to your corporate client. The assignment process may include the issuance of powers of attorneys that may require an apostille. Assignment forms may need to be executed by both the assignee and assignor and, in most instances, assignments will need to be notarized and translated. Legalization by the consulate in the United States of See “Your Brand Abroad,” page 2 Four Years After Christopher X: U.S. Courts Afford French Blocking Statute Little Deference By Christina Taber-Kewene, New York City, and Cécile Di Meglio, Paris France long has viewed the application of U.S.-style discovery procedures to obtain evidence located in France as an attack against its sovereignty. Although both France and the U.S. ratified The Hague Convention on the Taking of Evidence Abroad (“The Hague Evidence Convention”) more than thirty-five years ago, U.S. courts still have not limited extraterritorial discovery to the methods prescribed by The Hague Evidence Convention. Without a finding that comity requires use of The Hague Evidence Convention, U.S. courts allow parties to seek the broader discovery allowed under the U.S. Federal Rules of Civil Procedure (“Federal Rules”). In response, in 1980 France enacted a criminal statute prohibiting individuals from cooperating with U.S. discovery requests not made in accordance with The Hague Evidence Convention. No French court convicted anyone under the statute until the French Supreme Court’s decision in Christopher X on 12 December 2007. Despite that decision, and with awareness of it, U.S. courts still discount the prospects of criminal sanctions under the French blocking statute when considering whether to limit the producSee “Christopher X,” page 60 Vol. XXX, No. 1 The International Law Quarterly Winter 2012 YOur BraND aBrOaD, from previous page the country where the assignment will be filed may also be required. Further review of the portfolio reveals gaps in protection in important markets where your client’s marks should be registered. Before starting work on the assignments and registration of the marks, it is imperative that you discuss with the client its expectations for the project, the budget for the project and the length of time necessary to obtain the required clearances to file applications for registration and obtain trademark registration of those marks in the different jurisdictions. The client must be apprised of obstacles in the process of clearing and registering the marks in the particular jurisdictions and the cost of each step of the registration process. other attorneys in that jurisdiction who may practice in another area of law. Joining international organizations such as the International Law Section of The Florida Bar, the American Bar Association or the International Trademark Association (“INTA”) provides great resources for locating and hiring competent legal counsel. Before engaging local counsel, a published list of attorneys’ fees, and filing fees applicable in clearing and registering or assigning a mark in that jurisdiction should be obtained. Also, it should be determined whether there are special rates for registering multiple marks in multiple international classes. The International Law Quarterly is prepared and published by the International Law Section of The Florida Bar. Nicolas Swerdloff, Miami Chair Richard C. Lorenzo, Miami Chair-elect C. Ryan Reetz, Miami Secretary Peter A. Quinter, Miami Treasurer Edward M. Mullins, Miami Immediate Past Chair Mark R. Weiner, Tampa CLE Chair Alvin F. Lindsay, Miami Editor-In-Chief Angela Froelich, Tallahassee Program Administrator Lynn M. Brady, Tallahassee Layout Elizabeth Ortega Media Contact, ECO Strategic Communications,
[email protected] Clearance of the Mark Some countries have trademark offices with searchable databases that allow a U.S. firm to search for conflicting registered marks. Some databases, however, may be in a foreign language, while other databases may not contain up-to-date information. Therefore, it is often necessary to contact a trademark attorney in the applicable jurisdiction and have that attorney perform the clearance of the mark for the client. Clearance of a mark involves a search of registered marks and pending trademark applications and may include common law trademarks to determine if a mark is available for use and registration in that particular jurisdiction. Some jurisdictions may recognize common law trademark rights based on use and not on registration. A search of the database alone of the foreign trademark office will not reveal those marks, but a local attorney will be able to advise you on the common law and regulations of that jurisdiction. Private search firms may also offer searchable databases, but the same concerns arise as to their accuracy. When engaging trademark counsel abroad, the same criteria as engaging an attorney in the United States apply. Expertise in trademark law is key. Check for references. If you do not have an existing relationship with a trademark counsel in a particular jurisdiction or region, you should try to obtain recommendations from Assignment and Registration Process After conducting the searches and discussing with the client the budget for the assignment and registration of the marks, you recommend that assignments and applications for registration of several marks be filed in some countries in Europe as well as some parts of Asia and Latin America. For U.S. companies seeking to obtain a trademark registration in Europe, there are a few options: (1) obtaining a Community Trade Mark; (2) registering through the Madrid registration system; or (3) filing a national application. Community Trade Mark A Community Trade Mark, or “CTM,” allows a trademark owner to register a trademark1 throughout the European Union with a single application. The trademark application is filed with the Office of Harmonization for the Internal Market2 (“OHIM”), the agency responsible for the registration process of a CTM application. A CTM application, if successfully registered, will be valid in twenty-seven countries (referred to as “Member States”). A CTM is valid for ten years and can be renewed for additional ten-year terms, just like most national applications. The single application can be prepared in any of the European Union official languages.3 One of the advantages of registering a CTM is that use in one Member State will allow registration, and therefore protection, of See “Your Brand Abroad,” page 5 Winter 2012 Articles between 7 and 20 pages, doublespaced, involving the various disciplines affecting international law may be submitted via email in MS Word format (with the use of endnotes, rather than footnotes). Please contact
[email protected] for submissions and for any questions you may have concerning the Quarterly. DeADLIne FOR neXT Issue Is 7 MAY 2012. Page 2 The International Law Quarterly Message from the Chair With the holidays, year-end closings and the extra hours being put in to cover for our colleagues’ vacations (and hopefully some of our own), we have all probably found that the final quarter of 2011 passed us by in a blink. This did not, however, stop the editors and correspondents of the winter 2012 International Law Quarterly from putting together a world-class edition, full of interesting and informative articles. This ILQ also introduces our now-quarterly World Roundup, in which regional editors provide updates on the important issues of international law. I’m sure the updates and perspectives provided in the World Roundup will make the International Law Quarterly an even more valuable tool for all of those who practice in this ever-changing field N. Swerdloff and will reinforce the standing of The Florida Bar—and particularly the International Law Section—as a major player in the international law community. This edition, with a focus on international intellectual property, could not come at a better time. The Megaupload. com case has been making waves in the press due to the defendant’s lavish lifestyle and movie-villain persona. But more importantly, this case could become the biggest criminal copyright infringement case to date and may have far-reaching implications for future extradition and international IP prosecutions. As websites and companies that provide similar services watch anxiously the various governments’ attempts to either prosecute or extradite the defendants, we lawyers watch for the impact on our future advising, drafting, and litigation strategies for current and potential clients. With cloud computing on the rise worldwide and the U.S. legal system’s expanding reach into these new arenas, an international perspective on intellectual property is fast becoming a necessary tool for every well-rounded attorney. We hope this edition will pique your interest and help bring you up to date on some of the many IP-related issues that can arise in international and cross-border legal practice. We are also glad to report on some recent developments from Tallahassee that we believe will have a positive impact on the practice of international law in Florida. First, the legislature passed the ILS-sponsored “Glitch-Fix Bill” (S.B. 486/H.B. 917), which will fill gaps and address other issues with Florida’s long arm statute, choice of law, Enforcement of Foreign Judgments Act and International Commercial Arbitration Act. Second, the legislature voted down the “Sharia law” bill (S.B. 1360/H.B. 1209). As you know, the measure would have seriously limited the application of foreign law in family court actions throughout the state. Finally, as usual, the section has a full slate of events planned for 2012. First, we congratulate the organizers, sponsors and participants of the 10th Annual International Litigation and Arbitration Conference (“ILAC”), held at the J.W. Marriott Marquis in downtown Miami on February 23rd and 24th, on another successful program. Second, we remind you that ILAC has partnered with the Pre-Vis Moot Arbitration Competition in order to provide law students with advice from experienced practitioners as they prepare for the annual Vis arbitration competition in Austria. And third, don’t forget to take advantage of the International Law Webinar Series, which is an easy way to stay current on international issues and earn CLE credits at the same time. As of the date of printing, the section has scheduled the following past and upcoming webinars: “5 Ways Corporations Can Limit Their International Liability Exposure” (15 February 2012); “Managing Criminal Exposure Under the FCPA and Other Laws Impacting International Trade” (15 March 2012); and “Ethics Considerations in International Dispute Resolution” (26 April 2012). Keep checking the section’s website, as new webinars will be added throughout the year. I hope you enjoy this edition of the International Law Quarterly, and I look forward to seeing you at ILAC. Nicolas Swerdloff Hughes Hubbard & Reed, LLP Winter 2012 The International Law Quarterly Page 3 From the editor . . . The other day a senior executive for the Latin American division of a major paper corporation made a big point to tell me that he read our last issue on Brazil from cover to cover and that it was “extraordinariA. Lindsay ly good.” Of course, I concurred. Nonetheless, receiving this kind of feedback that recognizes the quality produced by the authors of this publication is gratifying for us all. For almost three decades, the International Law Quarterly has aimed to be one of the world’s best journals covering all areas of international law. Judging by the quality of our submissions and the comments of our readers, we succeed. And this first issue of the ILQ’s thirtieth volume rests on no laurels. To begin, we are tremendously excited to present the debut of our World roundup section. Over the past six months the ILQ has assembled a first-rate group of regional editors. For every issue going forward, they will monitor and report on the most important international legal stories from around the world. Now, in one place, our readers will find the information they need to stay on the leading edge of international practice. Each of our regional editors has a strong connection to the assigned region, and we are confident that our readers will eagerly anticipate this section with every issue. So let me thank and introduce our new regional editors: Mikki Canton (Asia/ China); Peter anagnostou (Australia); Lucius Smejda (Canada); Sandy Jones (Caribbean); Christopher Kokoruda (Central America); Santiago Cueto (European Union and Singapore); Sumeet Chugani (India); Mahesh H. Nanwani (Japan); Prof. Patrick M. Talbot (Korean Peninsula); renee Pobjecky (Mexico); Omar Ibrahem (Middle East); anna V. Tumpovskiy (Russia); Quinn Smith (South America: Brazil); Julio Barbosa (South America: Southern Cone); Daniel E. Vielleville (South America: Northern Cone); and Peter Quinter (United States). I also want to thank everyone else who submitted their names for these positions. Although an applicant’s desired region may have been previously assigned, a publication like this will not remain static. As the World Roundup section develops and the ILQ continues to grow, there will be many more opportunities for those who are most qualified and interested. But our new World Roundup section is far from the only exciting aspect of this edition; this is also our “Focus On: International Intellectual Property” issue. Penelope Perez-Kelly—who wrote the lead article exploring the challenges and strategies involved in managing a client’s IP on a worldwide basis—did a great job coordinating an impressive lineup of authors on the hottest topics in IP. They include: Kimra Major-Morris and her timely article on online privacy in the wake of multiple high-profile international copyright cases involving the Internet; Danielle amor, who tackles the problem of video pirating in Europe by those, including UK public houses (pubs), who use foreign decoder boxes to show live football matches; Pierre Gaunaurd and his examination of the challenges of protecting patents in India; Peter Quinter and Michael De Biase who map the intersection of trademark and customs law designed to keep counterfeit merchandise out of the United States; James Faier who analyzes the “bona fide intent to use” requirement for foreign registration applicants seeking U.S. federal trademark protection; and Brenda recio with her primer on IP law in the Dominican Republic. All are great articles that, taken together, provide a sophisticated understanding of the current state of intellectual property from a global perspective. But, as they say, there’s more. Unlike our “special issues”—such as our last one on Brazil—which focus exclusively on one topic, our “focus-on” format permits publication of articles on other areas as well. Here again, this issue has much to offer. We are privileged to share Nina Tulloch’s article examining the impact of Scotland’s Damages Act of 2009 for which she won the British Insurance Law Association’s prestigious first-place prize for articles. The transatlantic team of Cécile Di Meglio and Christina Taber-Kewene provide an update on France’s famous Christopher X case that imposed criminal fines against a French lawyer for cooperating in the discovery process of a U.S. lawsuit. Immigration specialist Giselle Carson explores the E-2 investors’ visa that can provide foreign nationals an opportunity to live and work in the United States despite increased government scrutiny of L-1 (intra-company transferee) visas. Regular ILQ contributor Neil Fishman writes from The Hague on developments in the law of the international civil service, an interesting area that draws from international labor, administrative and contract law. Finally, we are pleased to round out the issue with a forward-thinking article on algae-based biofuel by environmental scholar Nadia ahmad. With articles like these, our publication will certainly continue to grow in audience and prominence. Our upcoming spring edition will be a “special” international litigation and arbitration issue, followed by a summer issue with a “focus on” Canada, Mexico and NAFTA. Please feel free to forward the electronic version of this ILQ to your friends and colleagues around the world, and never hesitate to submit an idea for publication. Safe travels, Alvin F. Lindsay Editor-in-Chief Hogan Lovells US LLP Visit the section Website: internationallawsection.org Page 4 The International Law Quarterly Winter 2012 YOur BraND aBrOaD, from page 2 the client’s mark(s) in all twenty-seven Member States, which may considerably reduce the cost of registration. That being said, if there is a conflicting mark in one Member State and the CTM is objected to in that one Member State, the entire CTM may be defeated. If a CTM is successfully objected to, the client has the option of converting the CTM application to a national application in each of the Member States. While the client will maintain the priority date tied to the filing of the CTM application, this option could be a very expensive one. If the client opts to convert to a national application, the client will not be able to recover the filing fees paid for the CTM application and will have to pay filing fees in each of the countries where it will file a national application, and use of the mark in each country may be required. Additionally, the client will be required to hire foreign counsel in each of those countries. That is one of the reasons why it is extremely important to conduct a thorough search for the availability of the proposed mark before filing a CTM application or any other trademark application. In addition to the cost savings if the client is successful in obtaining a CTM, the cost savings of filing only one assignment with OHIM in one language will also be significant, and the ease of dealing with only one office instead of working with multiple trademark offices when the mark is transferred or assigned can also be attractive to your client. The same applies when you are renewing a trademark registration. Your client will need only a single renewal application in one language and to deal with a single office and pay a single application fee.4 While the thought of saving money may be appealing to your client, you should advise the client that the application process for a CTM may take longer than the application process for national trademark registrations, and the processing time of a CTM application should be discussed at the outset of the project with your client. As attractive as a CTM may appear, if the client is conducting business in only a few European countries and has no immediate plans of expanding its business, or the client discovers that there is Winter 2012 a conflicting mark in one of the Member States, a Madrid Protocol application or a national application may be a better option for that particular client seeking to register its mark(s) in Europe. Madrid system of International Registration Another option for clients interested in registering their marks in Europe and Asia is use of the Madrid System of International Registration. This system for the registration of trademarks is based on two treaties: the Madrid Agreement and the Madrid Protocol. The United States has been a contracting party to the Madrid Protocol since 2 November 2003 but is not a contracting party to the Madrid Agreement.5 A Madrid Protocol application may be filed in any national trademark office of a contracting party. The Madrid Protocol must be based on an existing trademark registration or a pending trademark application referred to as a “basic” application or registration. If a decision is made to file a Madrid Protocol application, one of the most important considerations for a client who may already have its mark registered (or applied for) in several contracting countries, including the United States, is to determine whether to base the Madrid Protocol application on the client’s U.S. registration (or U.S. pending application), or on a trademark registration (or pending application) in any other contracting country where the client has already obtained trademark protection (or is seeking trademark protection). The Madrid Protocol includes not only the European Union but also countries in Asia, Africa and Australia.6 Other than the United States of America—Cuba, and Antigua and Barbuda are the only other contracting countries in North and South America that are parties to the Madrid Protocol.7 Canada, Mexico, countries in South America and Central America, and most of the Caribbean countries are not parties to this treaty. One important reason to determine whether to use a U.S. registration or a registration in another contracting country as the “basic” trademark for a Madrid Protocol application is that the description of goods in a Madrid Protocol application cannot be broader than the goods or services associated with the “basic” trademark registration (or “basic” trademark application8). Since a description of goods may be more restrictive in the United States than in other contracting countries, advising the client to use its trademark registered in another contracting country as the basic trademark registration may afford more protection to the client if the client has that option. If a Madrid Protocol application is based on a U.S. registration, the Madrid Protocol application can be filed with the United States Trademark Office 9 (“USPTO”) whose role is ministerial at best in certifying that the Madrid Protocol application is identical to the U.S. trademark registration (or pending trademark application). The USPTO certifies that the basic U.S. trademark registration (or pending application) and the Madrid Protocol application depict the same mark, that the owner is the same, and that the goods or services described are not broader than the goods or services of the basic trademark registration. The USPTO then sends the Madrid Protocol application to the World Intellectual Property Organization (“WIPO”) for processing. The Madrid Protocol application is completely dependent on the basic trademark application or trademark registration. If the basic pending trademark application is objected to and later denied registration, the Madrid Protocol application will be defeated. In addition, if the Madrid Protocol application is based on an existing trademark registration and that registration is cancelled during a period of five years from the date of registration, then the Madrid Protocol application (or international registration) will also be defeated.10 The advantage of filing a Madrid Protocol application is that the client will be filing one application, dealing with one office in one language, and filing one fee. The official languages of the Madrid Protocol are English, Spanish and French. Notably, the perception that there is only one filing fee may be misleading. Unlike the CTM application, where a CTM registration will provide the client with trademark protecPage 5 The International Law Quarterly YOur BraND aBrOaD, from previous page tion in all twenty-seven countries of the European Union, with a Madrid Protocol application the client can designate one contracting country, or ten contracting countries, or all eighty-four contracting countries. The client also has the option to designate the European Union as a whole in its Madrid Protocol application. The fees associated with the Madrid Protocol application will increase with each additional contracting country the client designates. In the beginning, the cost of the Madrid Protocol application may be significant,11 but there will be savings in the long run when the client renews its mark(s) or when a name change or assignment may be required. The filing fees paid to WIPO must be paid in Swiss francs. Once WIPO receives the Madrid Protocol application, WIPO’s role is to determine that the goods or services are properly classified and that there are no conflicting international registrations (“IR”). If the goods or services associated with the trademark are properly classified and there are no conflicting international registrations, an IR will be issued to your client. The issuance of the IR does not mean the client has obtained protection in each of the designated contracting countries via the Madrid Protocol application. A request for extension of protection (“REP”) is later forwarded by WIPO to each of the trademark offices of the contracting countries that the client designates, and each contracting country’s trademark office conducts its own substantive examination of the REP and independently decides whether or not to extend protection of the trademark.12 An advantage of filing a Madrid Protocol application, as opposed to a national application, is that the contracting country has up to eighteen months to conduct the examination. If the REP is not denied within that time, the REP will be deemed granted.13 In contracting countries where the application process can take years, a Madrid Protocol application will be advantageous because the processing time of the application will be shorter. Also, if the client has designated ten contracting countries and one of the ten contracting countries refuses to approve Page 6 the REP, the other designations are not affected. Only if the basic trademark application or trademark registration is denied or cancelled, will the entire IR be cancelled. As with a CTM application, the trademark owner has the option to convert a rejected IR to individual national applications within three months of the cancellation of the IR. If the REP is opposed in one of the designated countries, the trademark owner will need the assistance of foreign counsel to defend the opposition, and additional fees will be incurred for engaging the foreign counsel. A trademark office may also require additional information or require that the applicant respond to an office action.14 If that is required, the trademark owner would also have to engage local counsel in that jurisdiction,15 and the benefits of filing a Madrid Protocol application will be diminished. The owner of an IR can request additional extensions of protection to other contracting countries at any time during the life of the IR.16 Another advantage of filing a Madrid Protocol application is that “[o]nce an extension of protection is granted in at least one country, the international registration is renewable every ten years from the initial date of the registration”17 with WIPO. The trademark owner “may choose to renew the registration with respect to all of the goods or services listed in the original IR or fewer than all, and with respect to all of the [contracting] countries to which protection has been extended or to fewer than all.”18 The same will apply for assignment of a trademark. This may result in substantial cost savings for your client. Another consideration to keep in mind if you are filing an assignment of an IR is that the assignee must be domiciled, incorporated or must have an industrial or commercial establishment in a contracting country.19 The “basic” trademark registration must be renewed separately from the IR registration.20 Additional benefits of filing under the Madrid Protocol21 include not having to deal with translations and related costs and not having to incur additional fees to engage foreign counsel to file the trademark application.22 national Applications If the client wants to protect its trademark abroad, filing a national application in the country where the client is planning to introduce its goods or services is always a reliable alternative even if the expense may be higher than using a uniform system of registration. Relying on the expertise of foreign trademark counsel provides the client more predictability during the application process since local counsel will be familiar with navigating the system within the jurisdiction and, in the event obstacles arise, the foreign counsel will be able to advise the client how to overcome those issues. Currently, the only option for clients wishing to register marks in most of Latin America and the Caribbean is by filing country-specific national applications with the assistance of foreign counsel in the particular jurisdiction. The client must be aware that in addition to filing fees and attorneys’ fees in registering marks in Latin America and the Caribbean, translation costs and legalization costs may also be incurred. In some instances, legalization by apostille is necessary for powers of attorney and other required documentation. Certification of documents by a United States consulate of the particular jurisdiction may also be necessary. In some countries in South America, the processing time for a trademark application may be years. An advantage of registering a mark in some countries in South America is that the trademark owner may designate for protection an entire class of products or services associated with its mark even if its products constitute only a single item within the international class, thereby affording the trademark owner broader protection and a tremendous advantage in preventing others from using similar marks within the same international classification, even if their products are not similar. Most Latin American countries have adopted the international classification of goods and services consisting of forty-five classes.23 As is the case in other areas of law, when working with foreign counsel it is imperative to maintain constant communication and reinforce the expectations and objecWinter 2012 The International Law Quarterly YOur BraND aBrOaD, from previous page tives of the client to adhere to the budget for the project. If problems arise in the application process, working with local authorities in addition to local counsel may also be required. One advantage of filing a national application and working with foreign counsel is that when challenges arise with respect to the client’s trademark, you are already working with a foreign attorney who is familiar with the client’s mark and products (or services). Challenges faced by U.S. companies in trying to protect their marks abroad typically include misappropriation of the client’s marks by a former or current distributor, or the discovery that the mark is no longer available in a particular jurisdiction based on a third party’s prior use and/or registration. In those instances, the client’s options may include the filing of an opposition or cancellation proceeding, challenging ownership of the mark (if that option is available) based on rights acquired as a “well-known” mark through prior use or brand recognition. The client may also have the option of initiating legal proceedings and attempting to show that its goods or services are not confusingly similar to the conflicting mark. The client may further seek to negotiate a licensing agreement with the owner of the conflicting mark, which will allow the marks to co-exist in that particular jurisdiction. If any of these problems arise, coordinating with foreign counsel and local authorities will result in more effective representation for the client.24 Penelope B. PerezKelly is a partner in the firm of McClane Partners in Orlando, Florida. Her practice focuses on trademarks, commercial litigation, international business law and immigration. P. Perez-Kelly Mrs. Perez-Kelly was born in Santo Domingo, Dominican Republic and is fluent in Spanish. She serves on the executive council of the International Law Section of The Florida Bar and currently serves as chair of the International Intellectual Property Subcommittee for the section. endnotes: 1 The term “trademark” also refers to service marks in this article. 2 The Office of Harmonization for Internal Market’s website at hhtp://oami.europa.eu/ows/rw/pages/index. en.do is a great resource when contemplating filing a CTM application. 3 A second language must be designated in the event an action is brought concerning the CTM. 4 See Office of Harmonization for the Internal Market (OHIM), http://oami.europa.eu/ows/rw/pages/ index.en.do. 5 The Madrid Agreement was enacted in 1891, but the United States is not a party. The Madrid Protocol became operational in 1994 and was enacted in the United States on 2 November 2003. Protocol Relating to the Madrid Agreement Concerning the International Registration of Marks, 15 U.S.C. §1141 [hereinafter Madrid Protocol]. 6 As of April 2011, 84 countries have joined the Madrid Protocol. The countries are: Albania, Algeria, Antigua and Barbuda, Armenia, Australia, Austria, Azerbaijan, Bahrain, Belarus, Belgium, Bhutan, Bosnia and Herzegovina, Botswana, Bulgaria, China, Croatia, Cuba, Cyprus, Czech Republic, Democratic People’s Republic of Korea, Denmark, Egypt, Estonia, European Union, Finland, France, Georgia, Germany, Ghana, Greece, Hungary, Iceland, Iran (Islamic Republic of), Ireland, Israel, Italy, Japan, Kazakhstan, Kenya, Kyrgyzstan, Latvia, Lesotho, Liberia, Liechtenstein, Lithuania, Luxembourg, Madagascar, Monaco, Mongolia, Montenegro, Morocco, Mozambique, Namibia, Netherlands, Norway, Oman, Poland, Portugal, Republic of Korea, Republic of Moldova, Romania, Russian Federation, San Marino, São Tome and Principe, Serbia, Sierra Leone, Singapore, Slovakia, Slovenia, Spain, Sudan, Swaziland, Sweden, Switzerland, Syrian Arab Republic, Tajikistan, The former Yugoslav Republic of Macedonia, Turkey, Turkmenistan, Ukraine, United Kingdom, United States of America, Uzbekistan, Viet Nam and Zambia. U.S. Trademark Office, http:www.uspto.gov/ trademarks/law/madrid/madridfaqs.jsp#q2. 7 Colombia approved the adoption of the Madrid Protocol last July, but the treaty has not yet entered into force. Colombia’s adoption of the Madrid Protocol makes Colombia the first country in South America to adopt it. 8 The “basic” trademark can be a pending trademark application that must be filed prior to the filing of the Madrid Protocol application in any of the Madrid Protocol’s contracting countries, or it may be based on an existing trademark registration already filed in one of the contracting countries. 9 The USPTO does not conduct any substantive review of the Madrid Protocol application. 10 An attack to the “basic” registration is referred to as a “central attack.” 11 Even though the initial cost of the Madrid Application will be substantial, it should be more economical than filing individual national applications in that the client is not incurring attorneys’ fees. That being said, if there is any opposition in any of the designated countries, the client may still be required to hire foreign counsel to defend the objection proceeding. 12 In some countries, a trademark office does not conduct substantive reviews of a trademark application. Instead the trademark office publishes the trademark, and it is up to the trademark owners to file oppositions to the pending application. 13 Natalie Hanlon-Leh, Kathleen S. Herbert, Adam Lindquist Scoville, A Brand New World: International Trademark Registration and the Madrid Protocol, 32 Colo. law. 89 (Oct. 2003). 14 An “office action” is a request by the examining personnel of a trademark office for additional information addressing deficiencies in the application or a substantive denial of the application based on conflicting registered or pending marks. 15 Bruce Londa, U.S. Trademark Owners may now file International Trademark Registrations, 11 Metro. Corp. Couns. 63 (Sept. 2003). 16 Irene Segal Ayers and Leigh N. Doran, New in 2003: Cheaper and Faster International Trademark Registration, 228 the legal IntellIgenCer 27 (10 Feb. 2003). 17 Id. 18 Id. 19 Londa, supra note 15. An IR cannot be assigned to a Brazilian company because Brazil is not a contracting country to the Madrid Protocol. 20 Hanlon-Leh et al., supra note 13. 21 Madrid Protocol. 22 It is recommended to engage counsel to clear the proposed trademark. 23 International trademark classification and the headings of the international trademark classes are established by the Committee of Experts of the Nice Union, also known as the Nice Classification. The Nice Agreement Concerning the International Classification of Goods and Services for the Purposes of the Registration of Marks (10th ed. 2011) published by WIPO and available at http://www.wipo.int/classifications/en/index/html. 24 For instance, in Mexico if a third party has applied for application of your client’s mark but the application is pending, no opposition proceeding is available and the client has to wait until the mark is registered to institute a cancellation proceeding. Conclusion In deciding whether to file a CTM application, an international application through the Madrid Protocol, or a country-by-country national application will depend on the client’s needs, objectives and budget. When you receive the call from a client that it has acquired a new company, your role as counsel is to review the facts and recommend the best strategy to meet the client’s objectives of obtaining maximum protection for its marks abroad while simultaneously managing the client’s expectations and minimizing costs.n Winter 2012 The International Law Quarterly Page 7 World Roundup Asia: China and Taiwan By Mikki Canton
[email protected] China says nO to the european union’s emissions Trading scheme. With China’s refusal to participate in the EU’s Emissions Trading Scheme, the controversy over a possible trade war over carbon-emissions trading looms and shows no sign of being resolved in the near future. China has officially banned all airlines in the country from joining the European Union’s Emissions Trading Scheme (ETS). This scheme, implemented from 1 January 2012, levies charges on flights in European Union airspace based on carbon emissions. The ban comes on the heels of China’s Air Transport Association’s refusal to support the ETS. As a result of this action, Chinese carriers may not increase their fares or levy new fees to comply with the scheme. This latest move by China, joined by the United States and Canada in opposing the ETS, is being watched with considerable apprehension. While the EU could prohibit Chinese airlines from flying into the EU, that is highly improbable as China may retaliate in a number of ways, all serious enough to complicate matters worldwide. Analysts believe that resolution may be achieved by an international body, such as the World Trade Organization, or through a cooperative compromise, which is unlikely to happen. Either way, China has acted upon its refusal to participate and has put the ball in the court of the EU, which must carefully decide its next move. Taiwan holds presidential election. On 14 January 2012, the Nationalist Party candidate, and Harvard-educated incumbent, Ma Ying-jeou won the presidential race, which is remarkable given that he supports economic cooperation and partnership with mainland China. Though Taiwan, formerly known as Formosa and now known as The Republic of China, is not pursuing unification with its former—and some argue very present—foe, President Ma’s victory symbolically represents Taiwan’s support for improved economic relations with China and the “1992 Consensus” that there is “but one China.” No one, however, seems to agree on what that means for Taiwan. Most Taiwanese believe that, regardless of their country’s economic engagement with China, Taiwan must remain autonomous and independent. In spite of serious disagreements on this issue between Taiwan’s two leading parties, over 40% of Taiwan’s wealth is invested in mainland China, and the numbers keep growing. While long-standing U.S. support towards Taiwan is unwavering, Taiwan remains a source of tension in the United States’ relationship with China. proposed cigarette packaging law. Australia’s Tobacco Plain Packaging Bill 2011, a draft law that aims to make tobacco products less attractive to consumers, would prohibit all logos and require certain coloring and layout on cigarette packs, including health warnings over a substantial portion of each package. Though other countries have previously attempted to adopt similarly strict requirements for cigarette packaging, Australia would be the first country to actually implement such measures. On 27 June 2011, Phillip Morris Asia Limited (“PMA”), owner of Australian affiliate Philip Morris Limited, served a Notice of Claim on the Commonwealth of Australia pursuant to Article 10 of the bilateral investment treaty between Hong Kong and Australia for the promotion and protection of investments. PMA argues that the plain packaging legislation constitutes an expropriation or deprivation of its investments in the two Australian companies because of its detrimental impact on the value of those trademarks. In an interesting development, the Australian government has recently stated that PMA did not have any interest in the Australian affiliate Philip Morris Limited until 23 February 2011, nearly one year after the Australian government had made its policy position public. Asia: singapore By Santiago Cueto
[email protected] Changes proposed to digital evidence rules. The Ministry of Law recently proposed changes to Singapore’s Evidence Act to allow computer output evidence to be treated the same as all other forms of evidence. Under current laws, computer data can be submitted as court evidence only after it is certified by forensic computer experts, among other technical requirements. The proposed change will do away with such requirements. An additional proposal would introduce evidentiary presumptions to admit certain classes of reliable electronic records that are unlikely to be tampered with, such as evidence stored by a neutral third party. Caribbean By Sandy Jones
[email protected] new business-friendly laws in Puerto Rico. Puerto Rico has new legislation designed to attract more business. The recently created Ponce Port Authority is intended to turn the Port of the Americas, already the deepest port in the Caribbean at fifty feet, into an international trans-shipment port through a superior management scheme. Moreover, Governor Luis Fortuño signed new legislation on 17 January 2012 to improve the island’s ap- Australia By Peter anagnostou peter.anagnostou83@gmail. com Phillip Morris opposes Page 8 The International Law Quarterly Winter 2012 peal to foreign investors. Among the new laws are the Service Export Development (“SED”) and Incentives for the Transfer of Individual Investors to Puerto Rico (“TIIPR”). The SED creates tax incentives for income earned on exported services. The applicable tax rates can range up to a 4% fixed tax rate with exemptions on property taxes. A favorable tax decree, issued to businesses, initially lasts for twenty years with a possible ten-year extension. The TIIPR is designed to encourage individuals to transfer their passive investments into Puerto Rico by means of a tax exemption for qualifying individuals (e.g., persons who were not domiciled in Puerto Rico for the fifteen-year period preceding 17 January 2012). new u.s. tax law to impact Caribbean banks. In an effort to combat tax evasion by persons holding investments in offshore accounts, the U.S. government passed legislation requiring more transparency in foreign institutions with such accounts. The Foreign Account Tax Compliance Act, enacted in 2010, will require foreign banking institutions—such as those located in traditional tax havens in the Caribbean—to divulge information about accounts held by U.S. nationals beginning on 30 June 2013. This legislation also includes a requirement to report on companies with a “substantial” U.S. ownership interest. many of the 2006 amendments to the Model Law, including provisions addressing interim measures and preliminary orders. Costa Rica’s adoption of the UNCITRAL Model Law is a step towards establishing and promoting international commercial arbitration legal principals in that country. usRDC goes to arbitration against Guatemala. U.S.-based Railroad Development Corporation requested arbitration against the Republic of Guatemala under DR-CAFTA for Guatemala’s alleged improper termination of a contract to manage Guatemala’s railroad system. The case was filed in 2007 as the first claim under DR-CAFTA, and the merits hearing took place in December 2011. The merits hearing was transmitted live on the ICSID website pursuant to Article 10.21.2 of DR-CAFTA, which provides that tribunals must “conduct hearings open to the public and shall determine, in consultation with the disputing parties, the appropriate logistical arrangements.” A final award is expected near the end of this year. el salvador ethics guidelines introduced in October 2011. Fundación LIDERA, in conjunction with the U.S. Agency for International Development (USAID), introduced the first code of proposed ethics guidelines for lawyers practicing in El Salvador. The proposed code was introduced with the endorsement of El Salvador’s Supreme Court. Although the ethical code is not binding on attorneys practicing in El Salvador, it offers greater awareness of ethical standards in the practice of law. ICsID annulment proceeding in Panama tax dispute. An ICSID proceeding brought by Nations Energy and Electric Machinery Enterprises, among others, against the Republic of Panama in 2006, alleging that the Re- public’s denial of the claimant’s attempt to transfer certain tax credits to third parties breached the expropriation and fair and equitable treatment provisions of the U.S.Panama BIT was dismissed, and the claimants were ordered to pay over US$4 million to the Republic in legal fees and costs. The claimants have since moved to annul the award. The annulment proceeding is pending before an ad hoc ICSID Committee. european union By Santiago a. Cueto
[email protected] Proposed laws would impose heavy fines on Internet companies for failure to protect user information. The European Commission recently proposed changes to current data privacy laws that would force Internet companies to protect user information more effectively or face fines. The laws are intended to improve online defenses and unify data protection laws across all European Union countries. The proposed rules would apply to data handled outside the EU if the companies involved offered services to citizens living in the twentyseven-nation zone. Companies found to have violated the rules could face fines of up to 2% of a company’s annual revenue, which could amount to hundreds of millions of dollars for many Internet and technology companies. If approved by all twenty-seven member states and the European Parliament, the rules would become law by the end of 2013. europe opens door to lawsuits over online content. The European Court of Justice recently issued a groundbreaking ruling giving plaintiffs, no matter where they reside, the right to sue in an EU member state of their choosing over online content that is alleged to be defamatory or a violation of Central America By Christopher C. Kokoruda
[email protected] new Costa Rica arbitration law in effect. In May 2011, Costa Rica’s new arbitration law, based on the UNCITRAL Model Law, entered into force. Costa Rica’s new arbitration law provides an updated framework for international arbitrations and reflects Winter 2012 The International Law Quarterly Page 9 World Roundup the plaintiff’s privacy rights. In reaching its decision, the court focused on constitutional precedent that establishes jurisdiction in “the place where the harmful event occurred or may occur.” The decision is significant because it allows individuals to sue anywhere in the EU, regardless of whether the individual or the publication has any real connection to the chosen forum where a complaint is filed. direct investment. All equity instruments with built-in options lose their equity character and must comply with India’s external commercial borrowing guidelines. The FDI policy does not currently include a specific definition for the term “option.” This provision, as it stands, will have an adverse impact on foreign investors who utilize put options as a mode of exit from Indian investment. Government makes strides to open doors to foreign retail giants. Global giants such as Wal-Mart and Carrefour have been eyeing India’s lucrative retail sector, currently dominated by “mom and pop” operations. India’s Cabinet, headed by Ajit Kumar Seth, has cleared a proposal to allow 51% FDI in multi-brand retail and to permit 100% investment in single-brand retail. The Cabinet’s recommendation will require investors to spend 50% of the investment in building and maintaining back-end infrastructure. Each foreign retailer would also be required to commit at least US$100 million through investment. Facebook, Google, and nineteen other companies asked to censor objectionable material. Facebook and Google have appealed a recent lower-court ruling ordering the development of a mechanism to block objectionable material in India. Using India’s recently enacted law making companies responsible for user content posted on their website, Vinay Rai claimed that websites were showing images offensive to Christians, Hindus and Muslims. The lower court agreed. Google and Facebook have appealed, arguing that they have a global policy of non-interference even if content posted on their respective websites is obscene or objectionable. The high court’s order, which will center on the issues of freedom of speech and expression in India, is set to be pronounced in early February. Japan By Mahesh H. Nanwani
[email protected] Asian site location policy implemented. To stem the tide of foreign companies moving their Asia headquarters and facilities out of Japan to other Asian countries, the Japanese government adopted a series of economic revitalization policies—the “Asian Site Location” plan—to revive Japan as the business center of Asia by using various tax reductions, subsidies and other incentives. In 2011, the Ministry of Economy, Trade and Industry proposed a bill under which qualifying multinationals would be entitled to preferential corporate tax for five years; preferential income tax treatment; preferential treatment under the Foreign Exchange Act; special exemptions for patent fees; and special treatment for small and medium firms capitalized at over 300-million yen. The bill also provides for expedited visa processing for foreign workers. Additionally, in April 2011, the Ministry of Economy, Trade and Industry proposed the first subsidy program in furtherance of the Asian Site Location policy. Under the program, foreign companies that establish new, qualifying Asia headquarters or R&D facilities in Japan are entitled to subsidies from the Japanese government on such items as survey and design costs for building, refurbishing or for facility installation; costs for purchasing, building or refurbishing facilities; costs for purchasing, leasing, and installing equipment and software; and leasing costs for facilities. The application period for this subsidy program closed in October 2011, and the initial awards were issued in December 2011. Companies selected under the program include the following Japanese subsidiaries of U.S. companies: NeoPhotonics Japan Godo Kaisha, Nihon Cabot Microelectronics, K.K. and 3M Health Care Ltd. Additional India By Sumeet H. Chugani
[email protected] Central government proposes new land titling bill. A proposed bill will replace India’s flawed deed system and implement a new electronic registration system to provide conclusive evidence of title ownership. If enacted, the legislation will offer a new safeguard for property owners, enhance transparency in land records and foster a new market for title insurance. Ministry of Corporate Affairs introduces new Fast-Track exit scheme for defunct companies. The new Fast Track Scheme allows companies registered under the Companies Act of 1956 and that have been inoperative or defunct to strike their names from the register of companies by satisfying the conditions under Section 560 of the Companies Act. Companies requesting fast-track status must have no assets or liabilities and must not have carried out business for at least one year before application under the new provision. new provisions in India’s FDI policy. New provisions in the foreign direct investment (“FDI”) policy require equity shares, or convertible preference shares with no built-in options of any type, to qualify as eligible instruments for foreign Page 10 The International Law Quarterly Winter 2012 programs are expected to be adopted in 2012 to promote the Asian Site Location policy further. estimated 10,000 demonstrators. Mexico By a. renee Pobjecky
[email protected] Approval of new trade and tax agreements. On 9 January 2012, the Department of Foreign Relations announced the following three decrees: (1) Decree approving the Commercial Integration Agreement with Peru; (2) Decree approving the Free Trade Agreement with the Republics of Costa Rica, El Salvador, Guatemala, Honduras and Nicaragua; and (3) Decree promulgating the Agreement that Amends the Agreement between the United Mexican States and the Republic of Singapore to Avoid Double Taxation and Prevent Tax Evasion with respect to income taxes. negotiations to join the TransPacific Partnership. On 14 November 2011, during the annual summit of the Asia-Pacific Economic Cooperation (APEC) Forum in Hawaii, the Secretary of the Economy of Mexico indicated that negotiations have begun with countries that are members of TransPacific Partnership (“TPP”), as well as with national industry sectors, in order to participate in this initiative. The TPP is a multilateral free-trade agreement between various members of APEC. Through its participation, Mexico expects greater economic growth, investment and export possibilities. united states and Mexico vs. Organized Crime. A debate currently exists in Mexico’s Congress, the mass media and newspapers over the legality of collaboration between Korean Peninsula By Patrick M. Talbot
[email protected] KORus FTA coming closer to reality. The Korea-U.S. Free Trade Agreement (“KORUS FTA”), signed initially in June 2007, took a giant step closer toward becoming a reality in late November when it was ratified by the Korean National Assembly. This came after President Obama signed legislation on 21 October 2011 enacting the KORUS FTA as part of American law. In order for the KORUS FTA to enter into force, both countries must enter into a series of implementing steps, with an indefinite time frame for completion but apparent resolve to move quickly. The FTA is expected to result in the elimination of tariffs on most consumer and industrial products traded between the countries, in about a five-year span after implementation. Several agricultural products from the U.S. will experience immediate elimination of tariffs once the treaty enters into force. The FTA is expected to improve U.S. automakers’ access to the Korean market drastically. Access to government procurement contracts for U.S. suppliers should also improve. In addition, the FTA will allow a vast expansion of U.S. legal services into South Korea. The KORUS FTA is not without strong opposition from some sectors of Korean society. The judiciary is taking steps either to block its implementation or to renegotiate it. Large protests in Seoul are also common, including one recently, involving an the U.S. and Mexico against the illegal activities of organized crime. A recent article in the New York Times indicates that U.S. forces have trained nearly 4,500 Mexican federal agents, eavesdropped on telephone conversations, interrogated suspects and handled informants. The Mexican government has refused comment on the matter, citing national security reasons. Mexico’s President, however, has reiterated his request to obtain additional assistance from the U.S. in the war against organized crime. Middle east By Omar K. Ibrahem
[email protected] shoura Council approves saudi Arabia draft arbitration law. The process of revising and modernizing the Kingdom of Saudi Arabia’s (“KSA”) arbitration regime is underway. The KSA’s Shoura Council recently approved a new draft arbitration law. While the details of the new law are still emerging, the draft law is intended to resolve problems under the existing arbitral regime and to expedite the arbitral process. The draft law consists of fifty-eight articles and was written in conformity with Islamic law and the international conventions to which the KSA is a signatory. united Arab emirates’ new business bankruptcy law in final stages of approval. The UAE Ministries of Finance and the Economy and Central Bank have delivered a draft business bankruptcy law to the Ministry of Justice. Modeled after bankruptcy laws in the United States and the United Kingdom, the new UAE business bankrupt- Visit the Section website at: www.internationallawsection.org Winter 2012 The International Law Quarterly Page 11 World Roundup cy law would afford companies protection from debt-holders and time to restructure their business to regain solvency, similar to a Chapter 11 bankruptcy in the United States. Once approved by the Ministry of Justice, the draft law will be submitted to the Cabinet, then the Federal National Council and, finally, Sheikh Khalifa, President of the UAE, before becoming law. effect of Jordan’s new tenantlandlord laws worries business leaders. Passed in 2011, Jordan’s new tenantlandlord laws have gone into effect, raising concern among many Jordanian business leaders. Among the provisions in the law that have business leaders worried is paragraph A of Article 7, which reads: “Tenants’ heirs are allowed to retain residential properties for three years and commercial properties for six years following the tenant’s death.” Business leaders are working together through the Jordanian Chamber of Commerce to find ways to influence the implementation mechanisms of the new law. Value added tax a possibility in Qatar. Despite posting a huge surplus in 2011, mainly due to hydrocarbon revenues, Qatar is weighing the possibility of a value added tax (“VAT”) on private companies. While the proposal is still in its infancy, Qatar would enact a VAT in conjunction with other members of the Gulf Cooperation Council (GCC). The proposed VAT is intended to diversify Qatar’s revenues and reduce Qatar’s dependence on hydrocarbon revenues. Iraq awards us$998 million deal to samsung Group. Iraq and Russia’s Lukoil Holding awarded the Samsung Group a US$998 million deal to develop Iraq’s West Qurna phase 2 oil field. Samsung is slated to build a central processing facility for oil production in the field. Lukoil and Norway’s Statoil ASA were awarded a twenty-year service contract for West Qurna Phase 2 in December 2009. Russia By anna V. Tumpovskiy
[email protected] Russia’s investment climate warms up. After many years of being the only major economy not a member of the WTO, Russia was finally granted membership on 16 December 2011. Russia now has to begin the process of ratifying and finalizing the accession agreement. According to the World Bank, Russia does not stand to reap immediate benefits from this membership, but the long-term benefits might be substantial (a 3.3 % increase of the annual GDP in the next few years, totaling at least US$58 billion). Since Russia is a major oil exporter, over 50% of Russian foreign trade is already tariff free; however, some of the raw material industries can gain substantially from increased market access and protection from anti-dumping measures. The remaining issue is the Jason-Vanik Act, the U.S. Cold War provision that restricts trade to former members of the Communist bloc. This provision directly conflicts with the WTO policy of giving fellow members “most-preferred” status. Removing this outdated policy, would allow the United States to reap many benefits as Russia is a major market for many American goods. As the Russian government looks to liberalize and, in some cases, conform some of the federal laws to the European standard, the legislature’s redraft of the Russian anti-monopoly laws is a welcome step forward. On 3 January 2012, the new amendment “On Protection of Competition Law” (the “Competition Law”) came into effect. The new law not only amends almost all chapters of the federal law but also changes a number of related legislation such as federal law on mineral resources, natural monopolies, privatization of state and municipal property, and even criminal law. The legislature heeded the need for clearer guidelines after the Russian Federal Anti-Monopoly Service issued a regulatory decision in a case involving pharmaceutical company OOO “Novo-Nordisk” that raised possible inconsistencies between a multinational’s conduct of compliance and Russian anti-monopoly law. The new law clarifies that provisions of the Competition Law shall apply to agreements concluded outside Russia by and between Russian or foreign individuals or entities, and to acts conducted by the same, provided that such agreements or acts affect the competitive environment in Russia. Therefore, the Competition Law covers agreements and acts regarding stocks, shares, or other rights with respect to foreign companies. One of the most important aspects that the new law introduces is the concept of intra-group agreements that could be exempt from the majority of restrictions based on the “single control group” assessment. On 18 December 2011, in an attempt to attract more foreign investment, Russia’s new federal law came into effect amending: (1) the Federal Law “On Procedure for Foreign Investments in Business Entities of Strategic Significance for National Defense and State Security” (the “Strategic Investment Law”), and (2) Article 6 of the Federal Law “On Foreign Investments in the Russian Federation” (collectively, the “Amendments”). The Strategic Investment Law was enacted in 2008 to restrict foreign investment in companies involved in so-called “strategic” activity. Foreigners interested in investing in such companies had to seek prior governmental approval. The Amendments now exclude from the list of “strategic” activities: • Transactions of companies controlled by Russian beneficiaries (individuals or legal entities); • International financial organizations Page 12 The International Law Quarterly Winter 2012 (IFOs) created under international treaties with participation of the Russian Federation or IFOs having an international agreement with the Russian Federation; • Companies from the civil sector that do not have operations with sources of radiation (as a primary activity); • Data-encryption activities performed by banks having no capital subscription of the Russian Federation. decisions in Paraná and the rest of Brazil. Inepar can appeal to the Superior Tribunal of Justice, the highest Brazilian commercial court, but such appeal is unlikely to succeed in light of recent decisions by that court. new regulation regarding declaration of foreign capital. As a result of government policy in the 1980’s, some Brazilians sent money to offshore accounts without declaring the values to the Brazilian Central Bank. Recently, the Brazilian government has taken steps to try and regulate this situation. One of those steps is Resolution 3854 from the National Monetary Council, requiring all residents in Brazil to declare all assets outside Brazil with a value of US$100,000 or more. This action builds on the Brazilian government’s attempts to bring back foreign capital. Major change in antitrust regulation. Following extended debate in the business press, Brazil passed a new antitrust law, Law 12529/11. The law dramatically changes the method for obtaining approval for mergers from government authorities. Now parties must notify regulators and receive their approval prior to most mergers. The new law also changes the requirements for compulsory notification. The law takes effect 1 June 2012. In the interim, regulators are working on further rules and regulations to guide parties through the approval process. Rule change for the purchase of rural property by foreigners. With more companies and individuals buying rural land in Brazil, the Brazilian Land Development Agency has enacted new rules to control the acquisition and lease of rural properties by foreigners. The regulation is Normative Instruction 70/11 of 9 December 2011. south America: northern Cone By Daniel E. Vielleville
[email protected] Colombia’s consumer protection legislation enhanced. On 12 October 2011, the Colombia Congress enacted Law 1480 which adopts the Consumers’ Statute of Rights, applicable to both domestic and imported goods. The statute imposes obligations on foreign manufacturers exporting certain goods into Colombia. These obligations include informing the competent authority of the manufacturer’s name, the name of its Colombian legal representative or agent, and its address for notification purposes. The statute grants the government the power to regulate situations where a foreign manufacturer would have to establish a presence in Colombia. Under the new legislation, manufacturers, distributors and retailers are jointly liable for injuries to consumers. The statute also declares—as abusive and against consumers’ fundamental rights—null and void certain contractual provisions often included in consumer transactions. Significantly, among the contractual provisions prohibited by law are arbitration agreements. Finally, the statute also provides for comprehensive rules regarding electronic commerce. The statute enters into force in May of 2012. ecuador adopts controversial antitrust statute. The new Ecuadorian legislation on the regulation and control of market power These amendments comprise the “first set of amendments” and will likely exclude more activities/industries from the Strategic Investments Law in the “second set of amendments,” currently being negotiated by the Federal Security Service of Russia. south America: Brazil By Quinn Smith
[email protected] Court reverses controversial arbitration ruling. The Appellate Court for the State of Paraná reconsidered its prior ruling in Itiquira v. Inepar and, in an en banc decision, enforced an arbitration award rendered against Inepar, an instrumentality of the State of Paraná. Since 2008, the case had stood out like a “black sheep” in Brazilian arbitration decisions. The parties’ agreement contained a clear intent to arbitrate, although the procedure was a hybrid of ad hoc proceedings according to the ICC Rules. Inepar had argued this invalidated the ruling because it failed to have the necessary components to avoid the requirement of going to a local court to sign a submission agreement. The lower court had confirmed the award, only for a panel of the appellate court to reverse. The en banc decision is in line with the trend of Visit the Florida Bar website at: www.floridabar.org Winter 2012 The International Law Quarterly Page 13 World Roundup aims at establishing mechanisms to prevent and sanction abuse by economic groups. The new statute, adopted in October of 2011, has not been well received by the Ecuadorian business community which, through the Ecuador Chamber of Commerce, has filed a judicial action seeking to annul several articles of the new act on constitutional grounds. Perhaps the most controversial new provision prohibits bankers and owners of media groups from holding more than 6% in other enterprises. Other constitutional objections to the new statute include: (1) the creation of a regulatory board appointed and controlled exclusively by the executive power, instead of the Ecuadorian state, with broad authority to establish and regulate state monopolies; (2) the submission of autonomous regional governments to the regulatory board; and (3) the exclusive control granted to the executive power with respect to prices of goods. Peruvian indigenous communities granted rights to be consulted on programs or projects. Last September, the Peruvian Congress adopted the law on prior consultation of indigenous people under Convention No. 169 of the International Labor Organization (“ILO”). Member countries must align national legislation, policies and programs with the Convention’s stated purpose of protecting indigenous or tribal groups and safeguarding their integrity. The new legislation grants indigenous or original groups the right to be consulted regarding legislative or administrative measures that may directly affect their collective rights or their cultural identity. To further this goal, governmental entities promoting measures shall comply with a special procedure aimed at involving protected groups and seeking their agreement with the proposed measure. The law also grants indigenous communities the right to challenge an administrative measure where the governmental entity fails to initiate a consultation process upon request of the affected indigenous group. The legislation grants local communities a major role with respect to new projects related to the exploitation of Peruvian natural resources. Venezuela creates advisory bodies to coordinate disputes arising out of nationalization process. Since taking office, Venezuelan President Hugo Chavez has engaged in a comprehensive and controversial program of nationalization and expropriation of many industries and companies. This process has triggered a number of international arbitrations against Venezuela itself or state-owned entities. The ICSID website currently lists approximately seventeen cases pending against Venezuela. There are also numerous commercial arbitrations against state-owned entities arising out of measures taken by the government to secure control over certain industries. Last December, in an effort to coordinate the defense of Venezuela and its stateowned entities, President Chavez issued decrees creating two advisory bodies: (1) the Superior Council for the International Defense and Sovereignty of the Bolivarian Republic of Venezuela; and (2) the Strategic Superior Council on Expropriations. The first Council will have as its purpose to establish guidelines and strategies with respect to international proceedings in which the government or state-owned entities are involved. The Council on Expropriations aims to establish guidelines for the Venezuelan government on how to exert its expropriation powers, including issuing recommendations as to which assets to expropriate and how to negotiate with the parties affected by such expropriations. Both Councils are to be formed with the highest officers of the government, including the vice-president, attorney-general and several ministers. It is unclear how the creation of these two Councils will affect the current prosecution of the many cases currently filed against Venezuela or its state-owned entities. Soon after the creation of the two Councils, Venezuela officially denounced the ICSID Convention, perhaps an indication of a change in direction in Venezuela’s policy with respect to these cases. Important Venezuelan supreme Court decision regarding country’s exchange control regime. Since 2003 Venezuela’s Central Bank has had exclusive control over the sale and purchase of foreign currency. Congress also enacted legislation criminalizing certain transactions in foreign currency. Notwithstanding the exchange control regime, the government allowed certain mechanisms for Venezuelans to acquire foreign currency by purchasing U.S. dollar-denominated securities from local banks or brokerage houses and then selling them outside Venezuela. Likewise, many agreements included payment in foreign currency. At the same time, there is a substantial differential between the official and black market rates to acquire United States dollars in Venezuela, which makes it very convenient for a debtor to pay a foreign currency-denominated obligation in local currency. On 2 November of 2011, in a very important case, the Constitutional Chamber of Venezuela’s highest court, the TSJ, annulled a decision of the Civil Chamber of the same court on constitutional grounds. The Civil Chamber had previously held that although the exchange-control regime imposes restrictions on the ability to acquire foreign currency, there was no prohibition to enter into agreements in foreign currency and, as there were alternative and informal mechanisms for converting Bolivars into foreign currency, the debtor could have easily used these to pay its debt. The Constitutional Chamber disagreed and annulled the decision of the Civil Chamber on two fundamental grounds: first, that Venezuelan law provides that with respect to any obligation payable in Venezuelan territory, the debtor may always fulfill its obligation by paying local currency at the Page 14 The International Law Quarterly Winter 2012 official exchange rate applicable on the date of payment; second, that the Civil Chamber, by acknowledging an informal regime to access foreign currency, invited the parties to breach and subvert the existing legal exchange control system, which at the same time implied condoning a criminal offense under Venezuelan law. Such position, in the Constitutional Chamber’s view, represented a violation of Venezuelan public policy. Therefore, the Constitutional Chamber concluded that the debtor had the right to pay its obligation in local currency at the official rate applicable as to the date of payment. south America: southern Cone By Julio Barbosa
[email protected] Argentina issues new regulations on repatriation of foreign direct investments. On 28 October 2011, the Central Bank of Argentina issued Comunicación “A” 5237 (Communication “A” 5237), amending certain regulations on the repatriation of direct investments by foreign investors. The Communication established that the repatriation of funds arising from direct investments by foreign investors in Argentina, made after 28 October 2011, will be subject to evidence that the original investment was conducted through the Mercado Único y Libre de Cambios, (“MULC,” the Foreign Exchange Market). In cases of transfers of direct investments between non-residents, the requirement is satisfied if the transferor demonstrates that the original investment was made through the MULC. Repatriation of funds that are not in compliance with the requirements set forth by the Communication requires prior approval by the Central Bank. new anti-terrorism law in Argentina. A new anti-terrorism law, promulgated on 28 December 2011, changes Article 41 of the Argentinian Penal Code, doubling the minimum and maximum time to be served when “any of the crimes set forth in this Code is perpetrated with the purpose to terrorize the population.” The same standard applies if the crime “obliges the authorities to perform an act or abstain from performing one.” In addition to tougher penalties for a range of financial crimes, including tax evasion, bribery, money laundering and the financing of terrorism, the new law also criminalizes any action that might disrupt the country’s economy, such as a run on the banks. The law’s broad language has generated several protests inside and outside Argentina. One of its most vocal critics is Eugenio Zaffaroni, a justice on Argentina’s Supreme Court. Argentina to place new controls on imports. On 23 January 2012, the Official Gazette published the AFIP’s (Administración Federal de Ingresos Públicos, translated as the Federal Administration of Public Income) General Resolution No. 3255/2012, which became effective on 1 February 2012 and will make it more complicated to import products into Argentina. (Argentina Customs is part of AFIP.) According to the new regulation, importers will have to file a certain Declaraciones Juradas Anticipadas de Importación (literally, Sworn Affidavit in Advance of Import) and, as a practical matter, will be required to obtain prior authorization from Customs and other government agencies to import. Chile’s supreme Court orders twoyear deadline on human rights cases. According to The Santiago Times, on 11 January 2012, Chile’s Supreme Court announced a two-year deadline for closing all cases related to human rights abuses in Chile during the military dictatorship that ruled the country from 1973-1990. The newspaper says that in order to comply with the deadline, “the Supreme Court will appoint two more judges to the courts that are designated to handle human rights cases, raising the total number to six.” Mercosur signs free trade agreement with Palestinian Authority. On 20 December 2012, at a presidential summit in Montevideo, Uruguay, members of the South American trade block Mercosur (Argentina, Brazil, Paraguay and Uruguay) signed a free trade agreement with the Palestinian Authority, similar to the FTA that Mercosur has in place with Israel. united states By Peter a. Quinter PQuinter@becker-poliakoff. com Global entry Trusted Traveler Program U.S. Customs and Border Protection recently published a rule making permanent the Global Entry Trusted Traveler Program, which speeds the passage of air passengers arriving in the United States through customs and immigration inspections by more than 70%. The pilot program started in 2008 and more than one million persons have been admitted into the program since then. In fact, those already admitted have now been granted a full five-year membership in Global Entry beginning from the time of their first enrollment. Currently, Global Entry is open to U.S. citizens, lawful permanent residents, Dutch citizens, and Mexican nationals although there is a thorough application and interview process to be admitted. If an individual does not meet the requirements of Global Entry, his or her application may be denied though there is an appeals process.n Winter 2012 The International Law Quarterly Page 15 Thank You to Our Annual Sponsors Page 16 The International Law Quarterly Winter 2012 FOCUS ON: Intellectual Property The Quest for Intellectual Property Protections in a Digital Age By Kimra Major-Morris, Orlando, Florida Dramatic protests against the Stop Online Piracy Act (“SOPA”) occurred on 18 January 2012, as numerous sites “blacked out” to show their disdain for the proposed law that outlined an aggressive approach to prosecuting foreign online pirates who infringe on U.S.-owned intellectual property. Just days before, the White House released a statement confirming it would not support legislation that “reduces freedom of expression, increases cyber-security risk or undermines the dynamic, innovative global Internet.”1 According to the House Judiciary Committee—whose chair, Lamar Smith, proposed SOPA—online piracy is linked to the loss of more than $100 billion in intellectual property revenue and of countless U.S. jobs.2 Indeed, adding to the drama, on 20 January 2012, United States federal agents arrested Megaupload employees following accusations that the Hong Kong-based company “facilitated illegal downloads of films, music, and other content, costing copyright holders at least $500 million in lost revenue.”3 Opponents of SOPA argued the Megaupload crackdown was proof that current laws were sufficient to take down foreign rogue sites and prosecute their owners. While it is undisputed that illegal downloads are a problem for United States intellectual property owners, SOPA’s broad approach threatened to censor the Internet, free speech, and user-generated content (“UGC”) sites, and appeared to carry more risks than benefits. The Internet increasingly has become a preferred vehicle for personal and creative expression. UGC sites such as YouTube, Facebook and Twitter encourage the sharing of personal experiences, entertainment, thought-provoking topics, images, and other unique information. With so much interchange, copyright protections are not as apparent as they could be. For example, many people believe that Google Images Winter 2012 are for the public’s convenience and unlimited use and that uploading protected works to YouTube is okay. Unfortunately, the convenience and common practice of infringing activity on UGC sites masks the seriousness of copyright violations and the complexity of copyright law. The House Judiciary Committee estimates that 25% of Internet traffic is infringing.4 that provision.7 On 20 January 2012, Chairman Smith released this statement: I have heard from the critics and I take seriously their concerns regarding proposed legislation to address the problem of online piracy. It is clear that we need to revisit the approach on how best to address the problem of foreign thieves that steal and sell United Sates inventions and products. The problem of online piracy is too big to ignore. United Sates intellectual property industries provide 19 million high-paying jobs and account for more than 60 percent of U.S. exports. The theft of America’s intellectual property costs the U.S. economy more than $100 billion annually and results in the loss of thousands of American jobs. Congress cannot stand by and do nothing while American innovators and job creators are under attack. The online theft of United Sates intellectual property is no different than the theft of products from a store. It is illegal and the law should be enforced both in the store and online. The Committee will continue [to] work with copyright owners, Internet companies, and financial institutions to develop proposals that combat online piracy and protect America’s intellectual property. We welcome input from all organizations and individuals who have an honest difference of opinion about how best to address this widespread problem. The Committee remains committed to finding a solution to the problem of online piracy that protects United Sates intellectual property and innovation. The House Judiciary Committee will postpone consideration of the legislation until there is wider agreement on a solution.8 A Quick Look at sOPA Under the proposed SOPA, rogue sites (defined as “foreign websites that are primarily dedicated to the illegal sale and distribution of counterfeit or pirated goods or foreign websites that market themselves as such”)5 would be targeted by the Department of Justice (“DOJ”) for the counterfeit goods (such as electronics, games, apparel and pharmaceuticals) sold through them. Third parties, such as advertisers and payment processors, doing business with rogue sites would be required to stop doing business with them.6 Third parties who fail to comply with the court order to sever business relationships with foreign rogue sites would be subject to contributory liability charges. The proposed law would greatly affect the ability of user-generated content sites to survive, because severed ties with payment processors and advertisers would cut off their funding. Under SOPA, search engines would be required to remove the foreign rogue sites from their indexes. Legitimate companies with infringing materials on their sites would be subject to SOPA’s rigid crackdown, which would be a deterrent for start-up companies with the potential to advance innovation. After hearing criticisms of the SOPA provision that Internet service providers would be ordered to utilize Domain Name System (“DNS”) blocking to prevent users from accessing the foreign rogue sites, Chairman Lamar Smith announced he planned to remove The Protect Intellectual Property Act, also referred to as PIPA, was the Senate’s version of SOPA with few differences. Page 17 The International Law Quarterly FOCUS ON: Intellectual Property THE QuEST FOr PrOTECTIONS, from previous page Senate Majority Leader Harry Reid indefinitely postponed the vote for PIPA amid SOPA protests and the Internet blackout on popular sites. The public outcry was so great that even nineteen senators who initially supported PIPA objected to it just prior to Reid’s postponement.9 Although other legislation was proposed to address the issue of online piracy, none attracted the attention SOPA received. laws found in the United States Code have protected authors and inventors to a certain extent. For example, copyright holders have six exclusive rights: (1) to reproduce their work; (2) to make derivative works; (3) to distribute their work; (4) to display their work; (5) to perform their work; and in the use of sound recordings, (6) to perform the music publicly by means of digital audio transmission.10 While these exclusive rights are not absolute, intellectual property rights offer incentive for creative contributors to our society. New technology, despite its benefits, allows for effortless, shameless infringement that forces authors and inventors to spend time and money protecting their products. The problem is that people do not feel like they are stealing when they click and download protected material. Nevertheless, clicking and downloading is no different than putting a DVD in one’s pocket and walking out of a store without paying, and it leads to the same result for the copyright holder—lost revenue. Ironically, perhaps, not-for-profit organizations can seem especially inclined to disregard copyright laws. Often small notfor-profits tend to focus on their charitable missions in justifying infringement. For example, some churches that broadcast their services lack the required licenses to record or stream protected content in their worship services. Rather than comply with the law, they rationalize that the use of protected content is permissible because it is being used to minister to others. With so much casual infringement, some adopt the “everybody else does it” attitude and take their chances with liability. Artists, producers, writers, graphic designers, composers or other creative contributors who are self-published and cannot afford the expense of monitoring the use of their works are unable to benefit from copyright protections, as they have no means of discovering that their rights are being violated. In contrast, many music industry artists have accepted that their videos and online music will be pirated, and they continue to make videos for promotional purposes. Fans, it is common industry knowledge, often use pirated music to familiarize themselves with their favorite artist’s songs and then buy concert tickets—finally affording some benefit to the artist. Safe harbor provisions of the 1998 Digital Millennium Copyright Act (“DMCA”) limit Internet service providers’ liability and subject users to direct infringement liability for their unauthorized uploads—but only if the service provider does not profit from the infringing material and only after copyright owners complain of the infringement.11 While it is a burden for copyright holders to control the use of their works, the proposed laws would give the government the power to regulate and disrupt sites suspected of copyright violations. Supporters of SOPA claim that social networking sites should not be concerned that the legislation would shut them down, because Facebook, YouTube and Twitter are not foreign sites that would fall under its purview. Sadly, distrust in the promise that the government would not abuse its expanded power and overly censor the Internet caused panic and unfiltered criticism of the bill. Winter 2012 Domestic Issues Involving Copyright Infringement The primary focus of SOPA is foreign rogue sites. It is worth mentioning, however, that infringing activities are tolerated domestically (in spite of the 1998 Digital Millennium Copyright Act) in less offensive and less profitable circumstances. Article I, Section 8 of the United States Constitution provides that, “Congress shall have power to promote the progress of science and useful arts, by securing for limited times to authors and inventors the exclusive right to their respective writings and discoveries.” Copyright, trademark, and patent Page 18 The International Law Quarterly FOCUS ON: Intellectual Property THE QuEST FOr PrOTECTIONS, from previous page The Balancing Act The delicate balance between protecting intellectual property and encouraging innovation and free speech is not new. In 1979, Universal City Studios and Walt Disney Productions fought Sony for manufacturing video tape recorders (“VTRs”), claiming Sony was a contributory infringer because VTR consumers were recording commercially sponsored television.12 The Supreme Court ultimately held that VTR machines had various non-infringing uses, and the time-shifting feature of the VTR created a new market for works produced by Universal and Disney; therefore, the machines were more beneficial than harmful to the public.13 While SOPA does not propose to shut the Internet down, its reach would effectively pull the plug on a number of helpful sites. Public opinion based on the Sony case’s rationale is what carried the day against SOPA. There are too many legitimate uses for the Internet and too much at stake to take a chance with legislation that might, in the effort to catch intellectual property thieves, cause us to lose the benefits derived from online free speech. A Global Issue SOPA opponents quickly compared its provisions to China’s web censorship policies. The idea that America would “import” any part of China’s web censorship policy to protect intellectual property raised First Amendment concerns and concerns regarding collateral damage to the public interest. Despite China’s web censorship and extensive oversight, the World Trade Organization in 2009 found that China failed to protect and enforce U.S. copyrights and trademarks on a wide range of goods.14 The International Intellectual Property Alliance modestly estimated a loss of $3.7 billion in music, movie, book and software sales.15 Ironically, that same year, a group of Chinese writers claimed that Google infringed on their copyrights by scanning their books into the Google Library.16 The Business Software Alliance recently reported that 78% of all software sold in China in 2010 was pirated.17 One of the most stunning acts of piracy in China came to light last year with the discovery of a counterfeit Apple Store in the city of Kunming, “complete with a Genius Bar, transparent staircase and blue t-shirted staff.”18 Although China has signed onto the Berne-Convention Treaty and the Agreement on Trade-Related Aspects of Intellectual Property Rights (TRIPS), it has failed to enforce copyright laws mandated by those agreements. Online piracy is a global issue in need of more effective measures to address the unique cultures where it exists. In its 2010 report, the Business Software Alliance reported PC software piracy rates by region.19 Central and Eastern Europe were tied with Latin America as the most prevalent regions, having 64% of pirated PC software. The Asia-Pacific region, the Middle East and Africa rounded out the top four. North America’s PC software piracy rate was the lowest, at an estimated 21%. While some Aballí Milne Kalil, P.A. is a Miami legal boutique, now in its nineteenth year, which focuses its practice on international commercial litigation, international business transactions, tax and estate planning, and domestic real estate transactions. The firm’s attorneys are fluent in a number of languages including English, Spanish, Portuguese and French, and have connections with a strong network of capable lawyers across the United States, Europe, Latin America and the Far East. www.aballi.com Winter 2012 The International Law Quarterly Page 19 FOCUS ON: Intellectual Property THE QuEST FOr PrOTECTIONS, from previous page countries are taking action, much more cooperation is needed. Spain, for example, adopted a policy to impose sanctions for online piracy in December of last year reportedly in response to a letter written by United States Ambassador Alan Solomont complaining that Spain’s former president failed to implement such a policy despite pressure by the United States.20 Spain and Canada were among those countries placed on the U.S. trade representative’s Special 301 list, “which serves as a formal warning ahead of potential trade sanctions.”21 Sweden-based site “The Pirate Bay,” notorious for facilitating copyright infringement through its file-sharing services, contains an archive of legal matters against it along with defiant responses to anyone-anywhere attempting to interfere with its services.22 The Pirate Bay now has a new legal matter to announce on its site. On 30 January 2012, the Netherlands announced it would amend its law to “strike a just balance between protecting against infringements of copyright and the importance of a free and open Internet.”23 The announcement followed an 11 January 2012 verdict in favor of the Dutch anti-piracy group BREIN against The Pirate Bay’s access provider Ziggo and against XS4ALL (also an access provider), both owned by pirate equity groups.24 Pursuant to the order, Ziggo must block The Pirate Bay site by 31 January 2012. Ziggo plans to appeal the decision and disputes the government’s authority to carry out the order. approach to the gray areas of copyright law as against the public interest. He wrote: The limited scope of the copyright holder’s statutory monopoly, like the limited copyright duration required by the Constitution, reflects a balance of competing claims upon the public interest: Creative work is to be encouraged and rewarded, but private motivation must ultimately serve the cause of promoting broad public availability of literature, music, and the other arts. The immediate effect of our copyright law is to secure a fair return for an “author’s” creative labor. But the ultimate aim is, by this incentive, to stimulate artistic creativity for the general public good. “The sole interest of the United States and the primary object in conferring the monopoly,” this Court has said, lies in the general benefits derived by the public from the labors of authors. When technological change has rendered its literal terms ambiguous, the Copyright Act must be construed in light of this basic purpose.26 down/52678528/1. 4 Id. 5 http://judiciary.house.gov/issues/Rogue%20Websites/011812_SOPA%20Myth%20vs%20Fact.pdf. 6 H.R. 3261, 112th Cong. (2011). 7 Press Release, U.S. House of Representatives Committee on the Judiciary, Smith to Remove DNS Blocking From SOPA, 13 Jan. 2012, available at http://judiciary.house.gov/news/DNS%20blocking%20SOPA.html. 8 Statement from Chairman on Senate Delay of Vote on PROTECT IP Act, U.S. House of Representatives Committee on the Judiciary, 20 Jan. 2012, available at http://judiciary.house.gov/news/01202012.html. 9 Andrew Couts, PIPA Vote Canceled by Sen. Harry Reid, dIgItal trends, 20 Jan. 2012, http://www. digitaltrends.com/web/pipa-vote-canceled-by-senharry-reid. 10 17 U.S.C. § 106. 11 17 U.S.C. § 512. 12 Universal City Studios v. Sony Corp. of Amer., 480 F. Supp 429 (C.D. Cal. 1979). 13 Sony Corp. of Amer. v. Universal City Studios, Inc. 464 U.S. 417 (1984). 14 W.T.O. Finds China Copyright Law Lacking, reuters, 27 Jan. 2009, available at http://www.nytimes. com/2009/01/27/business/27trade.html. 15 Id. 16 Christopher Beam, Bootleg Nation, slate, 22 Oct. 2009, http://www.slate.com/articles/news_and_politics/explainer/2009/10/bootleg_nation.htmlww.slate. com/articles/news_and_politics/explainer/2009. 17 Kathrin Hille, Microsoft Alleges Piracy in China Lawsuits, FIn. tIMes, 10 Jan. 2012, available at http://www.ft.com/cms/s/2/f87227ac-3b89-11e1a09a-00144feabdc0.html#axzz1l1EDD47M. 18 Pan Kwan Yuk, Apple Store? Yup, We Can Fake That Too, FIn. tIMes, 20 July 2011, available at http:// blogs.ft.com/beyond-brics/2011/07/20/china-applestore-yup-we-can-fake-that-too/#axzz1l1F54AaA. 19 Business Software Alliance, Global Software Piracy, http://portal.bsa.org/globalpiracy2010/index. html, (accessed 30 Jan. 2012). 20 Stephen C. Webster, Leak Reveals U.S. Threat Moved Spain to Implement Anti-Piracy Law, the raw story, 5 Jan. 2012, http://www.rawstory.com/ rs/2012/01/05/letter-reveals-u-s-threat-moved-spainto-implement-anti-piracy-law/. 21 Id. 22 http://thepiratebay.org/legal. 23 http://www.reuters.com/article/2012/01/30/usdutch-internet-idUSTRE80T0N620120130. 24 Id. 25 http://judiciary.house.gov/issues/Rogue%20Websites/011812_SOPA%20Myth%20vs%20Fact.pdf. 26 Twentieth Century Music Corp. v. Aiken, 422 U.S. 151, 156 (1975). Following the rulings against Grokster and Napster and their file-sharing practices, Steve Jobs provided a profitable, legal solution to rights holders and intermediaries of protected works with his ninety-nine-cent iTunes download option. The future lies in embracing such relevant, innovative technologies.n Kimra Major-Morris is an intellectual property and business law attorney in Orlando, Florida. 1 Victoria Espinel, Aneesh Chopra, & Howard Schmidt, K. Major-Morris Obama Administration Responds to We the People Petitions on SOPA and Online Piracy, the whIte house Blog, 14 Jan. 2012, http://www.whitehouse.gov/ blog/2012/01/14/obama-administration-responds-wepeople-petitions-sopa-and-online-piracy. 2 http://judiciary.house.gov/issues/Rogue%20Websites/011812_SOPA%20Myth%20vs%20Fact.pdf. 3 Nick Perry, Popular File-sharing Website Megaupload Shut Down, u sa t oday , 20 Jan. 2012, available at http://www.usatoday.com/tech/ news/story/2012-01-19/megaupload-feds-shut- Conclusion As nations scramble to address online piracy and the United States Congress attempts to find a medium between protection of property and public interest, it will be fascinating to witness the evolution of this unique area of the law. The House Judiciary Committee defended its interest in censoring infringing online activity by comparing it to the duty to stop online child pornography.25 As it stands, the broad language of SOPA buries former Justice Potter Stewart’s Page 20 Endnotes: The International Law Quarterly Winter 2012 FOCUS ON: Intellectual Property Football Association Premier League Limited and others v. QC Leisure and others; Murphy v. Media Protection Services Limited Landscape Change for Rights Licensing in europe, But not All Good news for Public Venues By Danielle amor, London, England A ruling of the Court of Justice of the European Union (“CJEU”) has recently raised the interplay between the notion of a free internal market within the European Union and the rights of television broadcasters to restrict access to their services from outside the territory for which they were intended. The decision has left both consumers and rights-holders in a state of flux, pending an application of the ruling by national courts. This article considers the complex issues addressed by the CJEU; namely, do copyright laws in the EU provide sufficient redress for broadcasters with exclusive rights in one particular member state, and is it against the fundamental principles of the EU Treaty to permit broadcasters to prevent access to services that are legitimate in other member states? are no longer) by the operators of the Arab Radio and Television Network (“ART”). In theory, FAPL would be prepared to license the rights outside the UK on a global or pan-European basis, but traditionally the interest in such a licence has been low because operators tend to broadcast in only one territory, often due to language barriers (e.g., German subscribers want to receive German programming). In the UK, a typical subscription to the BSkyB sports channels for a public venue (such as a pub) costs some several thousand pounds per year. In Greece, a subscription and ancillary equipment costs around £700 per year. Both services broadcast the same footage, albeit with different commentary, advertisements and so on. Enterprising individuals (such as the defendants in the first and second combined cases, to whom we shall refer as the “suppliers”), realised the potential market for the cost savings and began importing Greek and ART decoder cards into the UK, thereby allowing pubs (such as the four defendants in the third action, which defendants shall be referred to as the “pubs”) to receive the Greek or North African broadcasts in the UK and screen the matches to customers. Aside from the cost savings, the foreign signal was of particular benefit to pubs since in the UK live football matches cannot be broadcast between 2:45 and 5:15 on a Saturday afternoon so as to promote attendance at the games. The decoder cards were “legitimate” in the sense that they had been supplied by NOVA or ART. In order to obtain the Greek cards, however, the suppliers had to provide details of Greek residents or businesses using the cards. On the ART cards was printed, at least for a time, a prohibition that the cards were not to be used outside the territory in which they were sold. The importance of this case is that it did not concern pirate cards manufactured and supplied by unauthorised third parties. The decoder cards in question were authorised by the rights-holder in the territory in question, except that the rights-holder was under an obligation to prohibit access to its service from outside the territory. FAPL argued that the sale of these foreign decoder cards in the UK and their use to receive foreign broadcast signals of English Premier League matches infringed FAPL’s rights in the UK—in particular, their copyright on the underlying works comprising the broadcast and their right to prevent unauthorised reception of broadcast transmissions. Essentially if this practice were permitted, it would undermine FAPL’s entire licensing system, with the provider offering the cheapest subscription likely to become the pan-European broadcaster. This would seriously impact FAPL’s revenues and, potentially, the success of the competition. In the criminal case, Ms. Murphy ran a pub in Hampshire and had obtained a decoder card that enabled her to access the NOVA broadcasts of the English football matches. Ms. Murphy was convicted under section 297(1) of the Copyright, Designs and Patents Act 1988 (“CDPA”) for dishonestly receiving a programme included in a broadcasting service with the intent to avoid payment of any charge applicable to such reception. Ms. Murphy was fined £2,000 and ordered to contribute £5,000 towards the prosecution’s costs. Upon hearing Ms. Murphy’s appeal, the High Court Page 21 Background The CJEU was asked to provide a preliminary ruling on a number of questions arising from two cases before the UK courts, one being a set of combined civil actions and the other a criminal action. In the civil actions, the High Court of England and Wales was hearing claims brought by the Football Association Premier League (“FAPL”). FAPL runs the top-flight national football competition in England and holds the rights to record and broadcast the football matches which it licenses to broadcasters on a territorial basis depending on demand. In the UK and Ireland, the rights are held exclusively by BSkyB. In Greece, the rights to screen the matches are held by the operators of the Greek platform “NOVA” (also claimants in these proceedings). In the Middle East and North Africa, the rights were held (but Winter 2012 The International Law Quarterly FOCUS ON: Intellectual Property rIGHTS LICENSING IN EurOPE, from previous page referred a number of questions to the CJEU which were dealt with at the same time as the FAPL case. grammes or transmissions or to circumvent conditional access technology by persons not entitled to do so. The sections were implemented pursuant to the UK’s obligations under the Conditional Access Directive (“CAD”), and therefore Mr. Justice Kitchin (now Lord Justice Kitchin) in the High Court in FAPL looked to CAD to interpret the meaning of the CDPA. (a) Are the decoder cards “illicit”? CAD provides that member states must take measures to prohibit, inter alia, the sale and possession of “illicit devices.” “Illicit devices” are defined in CAD to mean “any equipment or software designed or adapted to give access to a protected service in an intelligible form without the authorisation of the service provider.” The question for the High Court (which it decided to refer to the CJEU) was whether the decoder cards issued by NOVA or ART were “illicit.” The parties accepted that pirate cards would clearly fall within the definition. Interestingly, the claimants did not seek to rely on the fact that the Greek cards had been issued on the basis of false names and addresses. The claimants’ contention was far wider—they claimed the decoder cards gave access to protected services within the UK without authorisation and therefore are illicit. The defendants, with whom Kitchin LJ noted he agreed, argued that CAD is concerned with the production and use of devices that do not originate from a legitimate service provider, rather than the unauthorised use of devices that do originate from a legitimate service provider. The CJEU did take note of the fact that false names and addresses had been used but still agreed with Kitchin LJ. CAD is limited to equipment that has been the subject of manual or automated operations prior to its use and enables access to protected services without the operator’s consent. The CJEU also thought the reference to access “free of charge” in the CAD Recitals was noteworthy. Foreign decoder cards, whether or not they were procured via false details and/or used outside the terms of use, are not illicit within the meaning of CAD since they were manufactured and placed on the market with the consent of the service provider, and the service provider was remunerated for that service in its home territory. THE PUBS LEAD 1-NIL Foreign decoder cards issued by legitimate service providers are not prohibited from sale or possession in the UK by virtue of CAD. Issues Both cases involved a number of complex issues requiring interpretation of national and European legislation and the consideration of the relationship between intellectual property rights and anti-competitive practices. The High Court proffered its own opinions on some of the issues, the Advocate-General delivered her (non-binding) opinion on the case in February 2011, and then the CJEU gave its ruling in October 2011. This article focuses on the CJEU ruling and its impact on the outcome of the cases. 1. Are the defendants liable for having used unauthorised equipment in the uK to access foreign broadcast signals? Sections 297A and 298 of the CDPA provide civil and criminal penalties in the UK for the supply and possession of apparatus designed or adapted to enable access to pro- (b) Can national law prevent the use of a conditional access device if it is not illicit? Lord Justice Bunton, hearing the Murphy appeal, considered that if Article 3(2) of CAD prevented member states from implementing measures that go beyond those required by the remainder of the directive, any such national measures that have been implemented must be assessed in accordance with the usual principle of Page 22 The International Law Quarterly Winter 2012 FOCUS ON: Intellectual Property rIGHTS LICENSING IN EurOPE, from previous page free movement of goods. This was of importance because the CDPA does not follow the wording of CAD and, in particular, does not refer to “illicit” devices. In Bunton LJ’s view in the Murphy case, CAD provides a limited derogation from this principle with respect to “illicit devices” only. The CJEU concluded, however, that since foreign decoding devices are not illicit devices within the meaning of CAD, their use is not governed by CAD and therefore member states may implement legislation that prevents their use. Thus, CAD does not prevent member states from prohibiting the use of foreign decoder devices, including those that have been procured using false details and/or employed outside their terms of use. In light of the Court’s answers to these initial questions, it did not go on to rule on the other questions raised in relation to CAD. The High Court had also wanted to know, for example, whether the FAPL had standing to bring a claim under s.298 CDPA as a “broadcaster” and whether use of the decoder cards in pubs amounted to “commercial use.” 2. What impact, if any, does the Treaty on the Functioning of the eu (“TFeu”) have on national legislation prohibiting the import, sale and use of foreign decoder devices? Here is where the focus of the case turns from protecting the interests of rightsholders to protecting the interests of other businesses and consumers to impart and receive services from other member states. Intellectual property lawyers understand well the concept of exhaustion of goods. For example, once a DVD has been sold in another member state with the consent of the rights-holder, it can be freely imported into and re-sold in the UK. The concept of exhaustion of services, however, is a little more difficult to comprehend. Industry practice dictates that the broadcast market is divided on the basis of geographic boundaries and, at least until now, competition law has not effectively challenged this notion. While the concept may be difficult for IP lawyers to grasp, it is not at all radical to competition lawyers. “Of Winter 2012 course you can’t partition the market on a geographical basis,” they would say . . . and so said the CJEU. By conferring upon rights-holders legal protection in the event of a breach of the terms of use of the foreign decoder cards, national legislation constitutes a restriction on the freedom to provide services in breach of Article 56 TFEU unless it can be objectively justified. The CJEU acknowledged that the protection of intellectual property rights is an accepted justification for restrictions on the free movement of goods or services. In this case, however, FAPL could not claim copyright in the football matches per se since they were not “works.” Nonetheless, pursuant to Article 165(1), TFEU member states are to contribute to the promotion of European sporting events. Therefore, if the national legislation in question is designed to confer protection on sporting events, such a restriction may be justifiable provided it does not go beyond the objective of protecting the intellectual property at issue, a matter for the national court to assess. Intellectual property rights, said the CJEU, are intended to enable rights-holders to exploit their works commercially in return for remuneration, but they do not guarantee the opportunity to demand the highest possible remuneration. Only appropriate remuneration is ensured. In this case, the rights-holders are remunerated for the broadcast services from the member state of broadcast (for example, NOVA pays a licence fee to FAPL from Greece). There is nothing to stop FAPL from requesting higher remuneration based on the potential reception of the broadcast throughout the EU. This territorial exclusivity has resulted in an artificial price differential between the partitioned national markets. This, according to the CJEU, is irreconcilable with the TFEU. The premium paid for such territorial exclusivity does not form part of the “appropriate remuneration” that must be ensured. Further, such territorial restrictions in FAPL’s licensing agreements constitute a restriction on competition pro- hibited by the TFEU if FAPL obliges national broadcasters not to supply decoding devices enabling access to their service outside the territory covered by the licence agreement (e.g., Greece). FAPL’s argument that the restriction is justified on the grounds that the broadcast blackout period in the UK encourages people to attend games at the stadiums was also rejected. The CJEU held that if this is a legitimate concern, appropriate provisions could be included in the rights agreements with broadcasters, but it would not be legitimate to restrict access to the service completely. Consequently, the prohibition on the use of foreign decoding devices cannot be justified on the basis of protecting intellectual property rights or promoting match attendance. Therefore, the TFEU precludes national legislation that makes it unlawful to import into the UK and sell and use foreign decoding devices. This conclusion is not affected by the fact that some subscribers procured the decoder devices through the use of false names and addresses and/ or used them for an unauthorised purpose (i.e., residential subscribers who used the card for a commercial purpose). PUBS – 2; FAPL – NIL Principle of free movement of goods trumps any intellectual property rights subsisting in the football matches and the promotion of match attendance. The FAPL has already been appropriately remunerated for the exploitation of its broadcasts. Territorial restrictions in licence agreements are permitted, but a ban on the sale of decoders crossborder is not; and the goal of promoting attendance at stadiums is not sufficient justification for such partitioning. The CJEU noted that this aspect of the decision does not affect the conclusion of Coditel I which concerned the communication of works to the public without authorisation from the relevant rights-holders in Page 23 The International Law Quarterly FOCUS ON: Intellectual Property rIGHTS LICENSING IN EurOPE, from previous page the originating member state of the communication and without having remunerated those rights-holders. 3. have the defendants infringed copyright? Having looked at the unauthorised use of decoder equipment, the courts were then tasked with assessing whether the receipt and display of the broadcast signals by the pubs infringed copyright in the underlying works. For this assessment, the High Court considered a number of sample matches from the 2005/2006 and 2006/2007 seasons and looked at various copyright works forming part of the broadcast: musical works and sound recordings (in the FAPL anthems); artistic works (in the opening sequence graphics and Premiership logos); and films (for example, in the opening sequence, match highlights, previous match highlights and special features). For reasons not explained in the judgments, the FAPL did not seek to rely on copyright in the broadcasts per se, but only the underlying works. From the outset, Kitchin LJ held that copyright in the FAPL anthem could not be infringed since it was included in the broadcast entirely incidentally (it was played in the stadium as the players lined up). (a) Reproduction right To copy a work or a substantial part of it in the UK is an act restricted by copyright. Did the pubs copy a substantial part of any of the claimants’ copyright works in the decoder boxes or on the television monitors? Kitchin LJ in FAPL considered it an infringement of copyright to make a transient copy of a substantial part of a work, not to make successive transient copies of insubstantial parts of a work. Since no more than four frames of the film would be stored at any one time, this could not constitute a substantial part of the film. A substantial part of the artistic works was, however, captured in one frame on the decoders and on the television monitors (since the whole work was reproduced in one frame). Despite his apparent confidence on this Page 24 issue, Kitchin LJ did refer the matter to the CJEU. The CJEU used the language from its earlier decision in Infopaq to rule that it is for the national court to decide whether transient fragments of the copyright works within the decoder or on the television screen contain elements that are the “expression of the authors’ own intellectual creation.” In this regard, the CJEU essentially agreed with Kitchin LJ’s interpretation. (b) Transient copy defence Section 28A CDPA transposes Article 5(1) of the Copyright Directive and provides a defence to infringement with respect to transient copying. In order to benefit from the defence under the Copyright Directive, the copy must be temporary, transient or incidental, and be an integral and essential part of a technological process (it was agreed these criteria were met). In addition, the copy’s sole purpose must be to enable a lawful use of the work and it must have “no independent economic significance.” The claimants argued that use of the work was not lawful, and since the pubs do not have a BSkyB subscription, the transient copy is the sole basis upon which FAPL and BSkyB can extract value from their rights. Kitchin LJ showed some sympathy with the defendants’ argument that the transient copies in the decoder could not have any independent value. With respect to the transient copies of the television screen, however, he thought it may be important to take other matters into account, including the extent to which the underlying works form only a small part of the programming (here, the artistic works) and whether it is reasonable for FAPL to seek to extract further fees in addition to those already paid. On lawfulness, the CJEU ruled that since the reception of broadcasts and their visual display in private circles is not an act restricted by UK or EU legislation and since the use of foreign decoding devices is also permitted in the UK, the transient acts of reproduction have the sole pur- pose of enabling “lawful use” in accordance with the Copyright Directive. In addition, the CJEU thought no independent economic significance was derived from the temporary acts of reproduction. Such acts “form an inseparable and non-autonomous part of the process of reception” and are not capable of forming an additional economic advantage beyond that derived from the mere reception of the broadcasts. In reaching this decision, the court took into account the purpose of the provision; namely, the promotion of the development and operation of new technologies, which could be impeded if technological processes in decoder boxes and on television monitors were not permitted. PUBS LEAD IT, 3-NIL!! There is no liability for infringement by copying. Only a substantial part of the artistic works forming part of the broadcast are capable of being reproduced within the decoders and on the TV monitors (not the films or the sound recordings), and the defendants can rely on the transient copying defence with respect to that copying. (c) Communication to the public Communication to the public is a current hot topic in the UK, receiving much commentary and attention that has proven particularly useful for claimants with regard to internet streaming and websites that make available pirated content, although the protected scope of such communication is pending consideration by the CJEU in another reference from the UK on broadcasting rights. Section 20 CDPA makes it an act restricted by copyright to communicate to the public: a literary, dramatic, musical or artistic work; a sound recording or film; or a broadcast. “Communication to the public” means communication by electronic transmission and includes the broadcasting of a work. The claimants submitted that the pubs were communicating the copyright Winter 2012 The International Law Quarterly FOCUS ON: Intellectual Property rIGHTS LICENSING IN EurOPE, from previous page works to the public by (1) re-broadcasting the works from their satellite dishes to the public bar areas, and (2) by displaying the visual works on the television screens in the bar and playing the audio works through the TV speakers. Kitchin LJ’s provisional view was that there had been no communication to the public by the pubs. The relevant “public” was wider than the publicans and their families, but there had been no re-transmission of the broadcast signal by wire or otherwise. The pubs had merely received the broadcast signal, decoded it and displayed it on their television screens. FAPL, NOVA and ART were responsible for communicating the broadcast to the public, and the pubs had not undertaken any communication separate from that. The CJEU disagreed. The concept of communication must be construed broadly and refers to any transmission of the protected works, irrespective of the technical means or process used. Accordingly, the proprietor of a public house effects a communication when he intentionally transmits broadcast works, via a television screen and speakers, to the customers present in that establishment. In order to infringe the copyright in the work communicated, it must be communicated to a “new public,” namely a public not taken into account by the authors of protected work. The CJEU thought it relevant that the communication in this instance was profit-making. The pubs were showing the broadcasts to attract customers, which would ultimately affect the takings of the pubs. Consequently, the re-transmission of the football matches in the pubs does amount to communication to the public. A COMEBACK BY FAPL It is an infringement of copyright to display copyright protected works on television screens in public venues such as pubs. And so it would seem, despite the suppliers being entitled to sell the Greek and North African decoder cards and despite the pubs being entitled to purchase and use them in the UK, the pubs are not entitled to screen certain works comprising the broadcast to the public without authorisation from the FAPL or NOVA. (d) “Free showing of a broadcast” defence That’s not quite the end of the story, however. Section 72 CDPA states that it is not an infringement of broadcasts, certain sound recordings or films to show or play a broadcast in public to persons who have not paid for admission to the place where the broadcast is seen or heard. Interestingly, in the High Court the FAPL accepted that customers of pubs are not to be treated as having paid for admission. It should also be remembered that FAPL was not relying on copyright in the broadcasts but the underlying works forming part of the broadcast. In the High Court, Kitchin LJ accepted that this section provides a defence to section 19 CDPA infringement (namely infringement by performance, showing or playing of a work in public) of films but not underlying works such as musical works forming part of the broadcast. Does section 72 also provide a defence to communication to the public? The section was not considered by the CJEU in its ruling but was subsequently applied when the FAPL case returned to the High Court. Final score On 3 February 2012, the High Court delivered its judgment in the FAPL case following a hearing in December 2011.1 Applying the CJEU’s ruling, Lord Justice Kitchin decided that certain copyright works owned by the claimants had been infringed by communication to the public by the pubs, and the suppliers were also liable for “authorising” the pubs to so infringe. Kitchin LJ also decided that section 72 CDPA did apply to infringement under section 20 (communication to the public) as well as under section 19 (showing or playing certain works in public). Otherwise, the entire purpose of section 72 would be defeated since there would always be infringement by virtue of the acts in question under section 20. This is a helpful clarification of the legislation. Victory is, however, bittersweet for the claimants. Due to the section 72 defence and the other findings of the High Court decision in 2008, only the artistic works and musical works forming part of the broadcast have been infringed by the defendants; namely, the FAPL/NOVA logos and other graphics that appear on screen during the matches, and the FAPL anthem. In light of the scale of the infringements, Kitchin LJ ADVeRTIse In The ILQ! Contact Elizabeth Ortega ECO Strategic Communications
[email protected] AD RATES per issue $125 quarter page $250 half page $500 full page Winter 2012 The International Law Quarterly Page 25 FOCUS ON: Intellectual Property rIGHTS LICENSING IN EurOPE, from previous page referred the matter to the Patents County Court2 for an inquiry as to the appropriate sum of damages. An injunction against the suppliers was refused on the grounds they are no longer trading, and an injunction against the pubs was also denied on the basis that undertakings had been offered by the pubs to the effect that they would turn the sound off so as not to infringe any musical works in the broadcast. Ms. Murphy will be pleased that her criminal conviction will now be quashed in light of the CJEU ruling, but given the outcome of the FAPL case, she will not be entitled to continue screening the matches in her pub unless she can do so without infringing FAPL’s artistic and musical copyright. not be satisfied that it has recourse against the defendants only with respect to the screening of the FAPL anthem and logos. To put the decision in its simplest terms, the foreign decoder boxes are legitimate and can be used in the UK, provided they are not used to display to members of the public, such as customers in a pub, any artistic or musical works in which copyright subsists. Customers in a pub could, however, use the cards to watch the matches in the comfort of their own homes. As to how this affects the wider broadcasting industry remains to be seen. There is a raft of cases on this issue waiting to be heard by national and EU courts, and it is likely that the licensing landscape will change. Rights-holders will need proactively to consider innovative models that protect their legal rights as well as their revenue streams. In practice, however, the content industries are in a far more secure place than FAPL since they are seeking to protect their creative works. FAPL was seeking to protect its broadcast of a live event in which no intellectual property rights subsist.n Danielle Amor is an associate in the London office of Hogan Lovells where she works with the Intellectual Property, Media and Technology team. Her practice focuses on contentious D. Amor and non-contentious copyright matters, and she regularly advises television broadcasters and other rights-holders. Endnotes: 1 [2012] EWHC 108 (Ch). 2 The Patents County Court is a specialized intellectual property court with a streamlined procedure for dealing with IP disputes more quickly and costeffectively than the High Court. By transferring the matter the PCC, Kitchin LJ has indicated that the likely award of damages will be relatively low. Post-Match Review Neither party is likely to be particularly overjoyed with the final result. The CJEU effectively ruled in the defendants’ favor on all but one issue—but no doubt FAPL will Astigarraga Davis is a firm of litigation and arbitration lawyers focused on international and other business disputes. We have an extensive cross-border international practice, our lawyers having handled business disputes emanating from virtually every country in the Western Hemisphere as well as elsewhere in the world. Our clients include primarily multinational companies, financial institutions, other public and non-public companies, as well as sovereign states and their instrumentalities. Our firm’s strengths focus on international litigation, international arbitration, and financial services litigation including creditors' rights, bankruptcy, and class actions. We have a leading asset recovery team that has pursued fraudsters and corrupt officials around the world to recover misappropriated assets, particularly from fraudulent transactions originating in Latin America and the Caribbean. For more information, please visit our website at www.astidavis.com. Page 26 The International Law Quarterly Winter 2012 FOCUS ON: Intellectual Property Novartis and the New Pharmaceutical Patent Regime in India By Pierre M. Gaunaurd, Coral Gables, Florida The Glivec Cases: Introduction With a reputation as an insufficiently regulated frontier for inventors, India is now becoming known as one of the stricter jurisdictions in which to apply for a patent. For multinational corporations (“MNCs”) in the pharmaceutical industry, India’s amended intellectual property (“IP”) code offers an opportunity to perform research and development (“R&D”) while protecting marketing rights to the final product, all at a lower cost than if performed in the West. MNCs, however, face the prospect that their existing products may not enjoy the same protection enjoyed in other countries and the prospect that market competition will be fiercer. Over the past decade, India has largely overhauled its patent protection laws in order to comply with the country’s obligations under the Agreement on Trade-Related Aspects of Intellectual Property Rights (“TRIPS”). Greater legal protections for inventors ordinarily would encourage creative entry into a market, but here, stricter regulations imposed on innovators and laboratories may be too restrictive to facilitate quick patent approvals. MNCs attempting to shield their prize products in the new patent regime are already challenging some of its provisions. Critics of these new laws argue that the stricter policies continue to promulgate a system favoring and protecting local industry rather than inviting fair participation in the market by outside players. The Indian government and domestic pharmaceutical advocates counter that these laws create a level playing field for all companies and encourage the distribution of lower-cost drugs to the general population. This article offers a short overview of the current patent regime in India, as well as Winter 2012 analysis of several recent cases highlighting the frustrations of MNCs accustomed to more liberal patent laws in Western countries. These case studies touch upon two TRIPS-related and pharmaceutical-specific IP enforcement concerns for MNCs: tolerance of “evergreening,” and process versus product patents. Since 2005, India’s patent laws have become stricter in scope and enforcement, incorporating the country’s international obligations under the TRIPS agreement. The IP legal code relating to patents, before the Patent (Amendment) Act of 2005 (“Amendment Act”), was molded both by the country’s own protectionist and socialist political culture and by the British laws in effect before independence. evolution of Indian Patent Law India is now home to some of the world’s fastest growing pharmaceutical companies, but at one point, foreign companies—largely British-owned—dominated 90% of the country’s pharmaceutical industry.1 This reality, of course, was due to British colonialism and the convenience of India and the United Kingdom having similar legal structures. For example, the Indian Patents and Design Act of 1911 integrated the British patent system into the local code, and although colonial law, it was not designed to encourage Indian entrepreneurship.2 It would not be until 1970 that India had an IP code consolidating the looser patent policies that had been enacted by the newly independent government in order to develop a domestic pharmaceutical industry. In 1970, the Congress passed the Patent Act, which was intended to reverse the dominance of foreign corporations and prevent them from obtaining patents only to export the products and revenues generated. The Act accomplished this goal not by recognizing product patents (the patent specifically protecting the invented or discovered final product), but by recognizing only process patents (a patent protecting the process used to create the product). Besides scaring away MNCs from operating in India by ignoring product patents, the focus on process patents had the consequence of guiding the domestic pharmaceutical industry’s growth toward production of generic drugs and reverse-engineering, a less sustainable strategy than one focused on innovation and R&D.3 In 1994, the TRIPS agreement was incorporated into the General Agreement on Trade and Tariffs (“GATT”). The purpose of TRIPS was to provide a universal standard for intellectual property laws that would combat piracy, clarify and consolidate previous IP-related treaties, and streamline trade. For purposes of this analysis, the most important part of the Agreement affecting the pharmaceutical industry in India is the requirement that member countries “make patents available for any inventions, whether products or processes.”4 TRIPS Page 27 The International Law Quarterly FOCUS ON: Intellectual Property THE GLIVEC CaSES, from previous page went into effect in 1995, but although a signatory to the GATT, India was not obligated to enact its provisions into national law until 2005. As a developing country (on a scale of developed, developing, and least developed), India was given a ten-year extension to update its IP laws.5 In December 2004, Indian Prime Minister Manmohan Singh issued a temporary Ordinance (the equivalent of an Executive Order by a U.S. President) immediately putting the country in compliance with the TRIPS agreement including, most notably, the acceptance of product patents updating the nation’s IP regulations.6 Still, an enactment law was necessary, and in 2005 the Amendment Act was passed to adopt the entire TRIPS package into law. The Amendment Act codified the majority of the 2004 Ordinance and allowed product patents to be recognized in India once again.7 It is no surprise that the evolution of India’s IP regime was incremental considering the fundamental way the changes would reshape the Indian pharmaceutical industry and the strong opposition existing within the domestic pharmaceutical industry.8 Opposition to portions of the Amendment Act, however, exists on the MNCs side of the aisle as well. One of the strictest measures added to Indian law by the Amendment Act was the limit on new patents for products resulting from the discovery of new uses of previously patented products.9 This process, known as “evergreening,” is a way companies circumvent patent expirations and renew their patents, simultaneously warding off producers of generics from access to their drugs without a license. Typically, the pharmaceutical company will file a new patent application for a slightly modified version of that same drug to maintain the product’s legal protections. While a common practice in the West, it is a controversial strategy in the rest of the world and is now being argued before the Indian Supreme Court. the practice of evergreening is prohibited. The 2005 law does not allow approval of a patent for “the mere discovery of a new form of a known substance which does not result in the enhancement of the known efficacy of that substance . . . or of the mere use of a known process . . . unless such known process results in a new product or employs at least one new reactant.”10 The effect of this law is two-fold. First, pharmaceutical companies seeking to protect the marketing rights to their original product will not be able to maximize their revenue past the original patent term (twenty years from the date the application was submitted under Indian law11), unless the substance of the drug is modified enough to qualify as a new discovery under the law—a high bar intentionally set by the Indian Congress. Second, Indian pharmaceutical companies, still dominated by laboratories focused primarily on generic drugs, will continue to have a windfall from the new rights available to produce generic versions of previously manufactured drugs that are unable to receive protection in India. In 1997, in anticipation of the TRIPSmandated rule change, and under the WTOmandated “mailbox rule,” Roche filed an application to obtain a product patent for Pegasys, a hepatitis-fighting drug.12 In 2006, Roche became the first pharmaceutical company to obtain a product patent in India after passage of the Amendment Act.13 This initial success with the updated Indian patent framework has not been universal, and other MNCs continue to wait— and litigate—for their own product patents. Arguably, the Swiss-based pharmaceutical company Novartis has the most controversial and noteworthy case related to the Amendment Act. tion 3(d) and seeks to have the provision struck down, while the other case appeals the rejection on the merits of the original application and the patent office’s interpretation of Section 3(d). Section 3(d) of the Amendment Act was enacted with the goal of prohibiting evergreening, a practice that at times has been justified as “incremental innovations” by pharmaceutical companies. In the first case before the High Court, Novartis’s application for a product patent for its anti-cancer drug Glivec was denied, essentially on the ground that the drug had existed for years prior to the application filed in India and therefore the requested patent was not for a new and inventive product.15 In 1998, like Roche with its drug Pegasys, Novartis filed a product patent application for Glivec under the mailbox rule.16 Unlike the Roche case, however, Novartis’s application was denied by the Assistant Controller of Patents. Key to the decision was that Glivec was originally patented in 1993, and the application submitted to Indian authorities in 1998 was for a drug that had not been modified enough from the 1993 drug to qualify as an innovation.17 At issue was whether the modified version of the compound imatinib mesylate in the new Glivec created “significantly enhanced efficacy,” which the Indian Patent Office (“IPO”) held it did not. Novartis subsequently challenged Section 3(d) as “vague and arbitrary” because, it argued, the IPO’s mandate was not specific enough regarding what innovations would qualify as having enhanced efficacy and because the wide discretion violated Article 14 of the Indian Constitution respecting societal equality.18 The Chennai High Court disagreed, finding sufficient regulations existed to guide the IPO’s decisions. Some of Novartis’s arguments then, as now, were that the Amendment Act was not TRIPS-compliant because it erected needless barriers to the product patent process, including denyWinter 2012 The novartis Glivec Cases In 2006, Novartis filed two challenges, split into two cases by the Chennai High Court, attempting to reverse the Indian government’s rejection of their product patent application.14 One case challenges the general constitutional validity of Sec- evergreening Controversy Under Section 3(d) of the Amended Act, Page 28 The International Law Quarterly FOCUS ON: Intellectual Property THE GLIVEC CaSES, from previous page ing patents for incremental innovation and breakthroughs.19 The Indian government organized an expert committee on patent laws, known as the Mashelkar Committee, to analyze and advise how the Amendment Act should be interpreted.20 The Committee heard and reported mixed testimony from various groups about the legitimacy of incremental innovation.21 Though Novartis insists that the Committee stated “that denying patent protection to new forms and uses of older drugs is not in line with the WTO’s TRIPS agreement,” the Committee report also included an annex from the non-profit organization Medecins Sans Frontieres (Doctors Without Borders) that incremental innovation is not legitimate.22 The France-based medical group has argued that deciding otherwise would be harmful to the public interest because it prevents the manufacture of cheaper drugs by generic manufacturers to treat the poor.23 The 2006 Mashelkar Committee report was withdrawn in late 2007 for reasons, at least in part, described as plagiarism.24 Nevertheless, the committee reconvened and submitted a new report in 2009 that generally had findings similar to the original report.25 With regard to Section 3(d), the committee clarified its position by stating that its purpose was not to judge the constitutional validity of Section 3(d) but only to determine whether its intention was TRIPS-compliant or not. The committee found that prohibiting the approval of incremental innovations would violate the Agreement.26 In August 2007, the Chennai High Court held against Novartis, upholding the validity of Section 3(d) and finding that the government had no requirement under TRIPS to allow for “incremental innovation,” as the pharmaceutical company labels evergreening. Further, the High Court held that Section 3(d) did not violate any other fundamental law that would lead to its reversal.27 The second Glivec-related case filed by Novartis in 2006 was an appeal that was re-directed to the Intellectual Property Appellate Board (“IPAB”) seeking to reverse the Assistant Controller’s decision to reject the patent application.28 The IPAB case also related to Section 3(d), but only in terms of the government’s interpretation of the statute in relation to Novartis’s rejection. Although filed in 2006 along with the Section 3(d) case, the first hearings were not until late 2008, and the Board’s ruling came down in July 2009. Here, too, Novartis unsuccessfully argued that Glivec should receive a product patent. Deciding on the merits of Novartis’s application versus the statutory requirements, the IPAB declared that imatinib mesylate, the different compound used by the pharmaceutical to justify Glivec’s new product patent, did not rise to the level of a new chemical entity (“NCE”) for purposes of complying with Section 3(d). Novartis appealed both cases to the Winter 2012 The International Law Quarterly Page 29 FOCUS ON: Intellectual Property THE GLIVEC CaSES, from previous page Supreme Court, and hearing dates have been set.29 the Amendment Act to date, will sway the future of the pharmaceutical industry in India.n Pierre M. Gaunaurd is a graduate of American University Washington College of Law in Washington, D.C. He has an M.A. in international affairs from American UniverP. Gaunaurd sity, focusing on transnational crime and corruption studies. He currently serves as co-chair of the American Bar Association’s Islamic Finance Committee. He is licensed to practice in Maryland and Florida. The author would like to thank Anar Pathak and Meghann Smith for their co-authorship of the original 2007 report, entitled “India’s Pharmaceutical Industry: A Closer Look,” upon which this article is based. Portions of the report are incorporated in this article with permission. Special thanks to Professors Ajay Adhikari, Shyam Chidamber, and Shalini Venturelli for their guidance, input, and edits to the aforementioned original work, developed for the Spring 2007 American University graduate business course “India: Information Economy & Corporate Strategy.” 1 See David K. Tomar, A Look Into the WTO Pharmaceutical Patent Dispute Between the United States and India, 17 wIs. Int’l l.J. 579 (1999). 2 See Stephen Barnes, Pharmaceutical Patents and TRIPS: A Comparison of India and South Africa, 91 Ky. l.J. 911 (2002-2003). 3 See Sierra Dean, India’s Controversial New Patent Regime: The End of Affordable Generics?, 40 Int’l lawyer 725 (2006). 4 See id at 727. 5 See id. 6 See id. 7 See id. 8 See id. 9 See Dean, supra note 3. 10 See The Patent (Amendment) Act, No. 15 of 2005; India Code (2005). 11 See id. 12 Roche Bags The First Product Patent In India, express pharMa, http://www.expresspharmaonline. com/20060331/management05.shtml (last visited on 2007 Feb. 26 ). 13 See id. 14 See Rustling Section 3(d) in the Novartis (Glivec) case, IndIa patent, 8 Dec. 2011, http://indiapatents. blogspot.com/2011/12/rustling-Section-3d-in-novartis-glivec.html [hereinafter Rustling]. 15 See Nikhil Kanekal, Final Hearing in Novartis’ Glivec case begins in SC, lIveMInt.CoM, 11 Aug. 2009, http://www.livemint.com/2011/08/10002346/ Final-hearing-in-Novartis821.html. 16 See Latha Jishnu, Evergreen Novartis, down to earth, 15 Sept. 2011, http://www.downtoearth.org. in/content/ evergreen-novartis. 17 See id. 18 See Rustling, supra note 14. 19 See Press Release, Novartis, Novartis Perspective: Improving Indian Patent Law Helps Patients and Societies (23 Feb. 2007) (on file with author) [hereinafter Press Release, Novartis]. 20 See Dr. RA Mashelkar, et al., Report of the Technical Expert Group on Patent Law Issues (Dec. 2006) [hereinafter Mashelkar Report]. 21 See id. 22 See id.; see also Press Release, Novartis, supra note 19. 23 See Press Release, Medecins Sans Frontieres, Quarter of a Million People Urge Novartis To Drop Case Against India: Company Would Effectively be Shutting Down the “Pharmacy of the Developing World,” (29 Jan. 2007) available at http://www.doctors withoutborders.org/pr/2007/01-29-2007_1.cfm (on file with author) [hereinafter MSF]. 24 See Shamnad Basheer, Encouraging Drug Innovation, lIveMInt.CoM, 27 Aug. 2009, http://www. livemint.com/2009/08/27205615/Encouraging-druginnovation.html?h=B. 25 See id. 26 See id. 27 See Jishnu, supra note 16. 28 See Rustling, supra note 14. 29 As of the completion of this article, the next hearing date was set for 28 Feb. 2012. 30 See generally Daniel Cook, India’s cheap drugs under patent threat. BBC news onlIne,15 Feb. 2007, http://www.news.bbc.co.uk/2/hi/south_asia/6358721. stm. (mentioning how in 2006, 7,000 of the estimated 9,000 patent applications waiting to be reviewed were of previously manufactured products, and many possibly were going to face the same rejection as Novartis had with Glivec). 31 Although the long-standing statutory preference for process patents over product patents has had a major influence on domestic pharmaceuticals’ gravitation towards generics, other factors have played a role, and it is not the intent of this article to minimize their influence or importance. Issues including government price controls and international reputation have restricted the amount of revenue Indian pharma companies generate, thereby limiting the amount of money they could invest in R&D and innovation. Looking Ahead The Novartis case has received much attention over the past half-decade for more than just being the first case to challenge a portion of the Amendment Act. The outcome of this case, considering its extended litigation history, is important because a plethora of cases related to Section 3(d) are waiting to be docketed around the country.30 Other product patent applications have been denied or invalidated based on Section 3(d) of the Amendment Act, but in the Novartis case, the Indian Supreme Court will have the opportunity to clarify any misconceptions that remain about whether India’s patent regime is truly TRIPS-compliant. A decision against Novartis would appear to leave an uncertain future for MNCs in the Indian pharmaceutical sector. Without domestic protection for product patents, some Indian pharmaceuticals may continue to challenge foreign patents belonging to MNCs—and the validity of any domestic application—by simply producing their own generic version. Thus, the Supreme Court’s interpretation may greatly affect the patience MNCs have for the Indian market. If the Supreme Court holds against Novartis, it may have the positive effect of forcing MNCs in India to innovate; but with cheaper labor to the north in China—and more established and convenient patent regimes in the West—that is unlikely. If the Court decides in favor of Novartis, MNCs will have more incentive to begin or continue investing in R&D within India. Indian pharmaceutical companies, too, will be forced to invest more heavily in product innovation and veer away from generic-focused production models due to fewer opportunities to rely on the traditional model of process patents.31 As the Indian Supreme Court prepares to issue its final decision, and other avenues of appeal for Novartis seem to have run dry, all eyes will be on this case. This decision, likely more than any other related to Page 30 Endnotes: The International Law Quarterly Winter 2012 FOCUS ON: Intellectual Property Christian Louboutin and u.s. Customs and Border Protection By Peter Quinter and Michael De Biase, Miami, Florida Red-lacquered leather, high-end fashion designers, trademark infringement, counterfeit merchandise, border protection—it all sounds so provocative. In actuality, these words and phrases reflect the overlap of intellectual property law with customs and international trade law. This nexus is underscored by the recent decision in Christian Louboutin S.A. v. Yves Saint Laurent America.1 Louboutin does more than establish that certain longstanding trademarks may be cancelled due to aesthetic functionality—it highlights the lack of coordination among those government agencies protecting our borders and those protecting our intellectual property. This article discusses how intellectual property law—specifically, trademark law—and customs and trade law intersect to prevent infringing or counterfeit merchandise from entering the U.S. The discussion will begin with an overview of the procedures used by Customs and Border Protection (“CBP”) and Immigration and Customs Enforcement (“ICE”) to protect intellectual property rights. The article will then discuss how the Louboutin case, coupled with certain government inefficiencies, can adversely affect importers and manufacturers. Perhaps as evidence of CBP and ICE’s best efforts, perhaps as evidence of the increasing amount of counterfeit merchandise being imported into the U.S.—but likely due to both—the number of Intellectual Property Rights (“IPR”) seizures (merchandise seized because it infringes intellectual property rights) increased by 24% between fiscal year 2010 and fiscal year 2011.2 Such an increase would be hard to accomplish without the help of the IPR recordation database (“IPR Database”), CBP’s most effective tool for preventing Winter 2012 counterfeit and infringing merchandise from entering the U.S. CBP’s IPR Database extends and facilitates the protection that is provided by federal trademark and copyright law; specifically, the Lanham Act or Trademark Act for trademarks, and the Copyright Act for copyrights. The U.S. Patent and Trademark Office (“USPTO”) and the U.S. Copyright Office administer these laws as they relate to the filing of applications and granting of registrations, and the U.S. federal courts are the sole forum for disputes concerning these laws after the trademark or copyright has been registered. The fact that the USPTO and the Copyright Office control the registration and record keeping regarding trademarks and copyrights is important to know because without a valid trademark or copyright registration, CBP will not allow the recordation of the intellectual property. CBP relies on the USPTO or the Copyright Office to determine whether the intellectual property should be registered and afforded the appropriate protection. The process for a trademark owner to record a trademark with CBP starts with the USPTO. The trademark owner must first fill out a trademark application and go through the trademark registration process, which can take over a year in many circumstances. Although it may seem like common sense, the trademark application must establish use in commerce prior to being registered. CBP requires a registration number to establish that the trademark has been registered. Thus, a mere “intent-to-use” application, which allows the applicant to begin the trademark registration process before actual use in commerce has begun, will be insufficient for purposes of a CBP recordation, as no registration number is issued until actual use in commerce has been established. After the trademark owner successfully registers the trademark with the USPTO, an application to CBP must be submitted to be recorded on the IPR Database. Since the heavy lifting has already been done by the USPTO, the recordation application takes substantially less time to process, and recordations may be achieved in a matter of weeks or months. A notable difference between the USPTO and CBP applications is that the latter asks for the names of subsidiaries, affiliates, or licensees that are allowed to import merchandise bearing the trademark. The fact that CBP’s recordation application includes such an inquiry underscores the difference between CBP and USPTO responsibilities. Unlike the USPTO, CBP uses the recordation information in a policing role to prevent infringing or counterfeit merchandise from entering the U.S., whereas the USPTO application is used to qualify a trademark for federal protection. Once recorded with CBP, the trademark will be listed in the IPR Database, which continued, page 34 Page 31 The International Law Quarterly Section International Law Quarterly special Brazil edition Release and holiday Party 14 December 2011 Photos by Melissa Groisman, Becker & Poliakoff Page 32 The International Law Quarterly Winter 2012 Scene Winter 2012 The International Law Quarterly Page 33 FOCUS ON: Intellectual Property CHrISTIaN LOuBOuTIN, from page 31 can be accessed by the public on CBP’s website. In addition to the benefits and protection afforded the trademark owner, the IPR Database provides importers, manufacturers, merchants and other parties with a valuable tool for conducting due diligence and assessing risk when importing merchandise. For example: if you are importing Fendi handbags, you can check the database to see if there are any graymarket3 restrictions on those handbags, and whether you will need to obtain consent from Fendi to import that merchandise. If consent is required, the contact person and phone number is listed on the website, which facilitates compliance with the law. Of course, the most important use of the IPR Database—to prevent infringing or counterfeit merchandise from entering U.S. shores—is undertaken by CBP and ICE. CBP and ICE personnel, sometimes referred to as import specialists, occupy the receiving docks to inspect and identify potentially infringing or counterfeit merchandise. The import specialists crossreference the merchandise with the IPR Database to determine if the merchandise is authentic and imported by a permissible party, or whether it is suspect and needs to be seized. Once the merchandise is seized, CBP contacts both the party importing the merchandise, as well as the trademark owner’s representative. If the seized merchandise is not claimed, or is determined to be infringing and counterfeit, it may be destroyed. Louboutin presents an interesting scenario with ramifications extending from the intellectual property arena into the customs and trade arena. The case involved two famous high-end clothing and apparel companies: Yves St. Laurent America, Inc. (“YSL”) and Christian Louboutin (“CL”). CL’s trademark consists of a red-lacquered sole placed on the bottom of a shoe. The company claimed the color red as a feature of the mark. In January of 2011, YSL approached CL to discuss several models of shoes offered by YSL. CL claimed that YSL’s shoes infringed CL’s trademark Page 34 because YSL’s shoes had a similar red bottom. YSL refused to stop selling the shoes, and CL brought suit for trademark infringement, among other things. YSL countered, claiming that CL’s mark was unworthy of trademark protection and should therefore be cancelled. The opinion in the Louboutin case gives full credit to the recognition achieved by CL’s trademark, and the shoes that the trademark adorns. CL desired to break away from the industry standard and add a unique element to its shoes. The redlacquered bottoms on CL’s shoes were meant to excite and be considered “flirtatious,” “memorable,” “engaging,” and passionate. CL’s efforts worked, and in the fashion world and high-end social circles and clothing markets, the red-lacquered soles on the bottom of high-heeled shoes became closely associated with CL. For this recognition and brand status, CL was able to demand upward of $1,000 for pairs of its shoes. The evidence establishing the consumer public’s recognition of the redlacquered sole as a CL shoe was substantial and incontrovertible. Since one of the key goals of trademark law is to prevent consumer confusion as to the source of the goods, it would seem that CL would have an easy case. Unfortunately for CL, this case took a turn in the opposite direction. YSL did not challenge the fact that shoppers associated CL’s trademark with the source of the goods. YSL’s challenge was instead based on the doctrine of aesthetic functionality. Aesthetic functionality stands for the proposition that a design is “functional” and should not be afforded trademark protection “if its ‘aesthetic value’ is able to ‘confe[r] a significant benefit that cannot practically be duplicated by the use of alternative designs.’”4 Color, in particular, “may not be protectable where it is ‘functional,’ meaning that the color is essential to the use or purpose of the product, or affects the cost or quality of the product” and therefore would put a competitor at a disadvantage.5 The Louboutin court found that CL’s trademark was functional and should not be afforded trademark protection. The court reasoned that a mere color was insufficient to identify sponsorship or source in the fashion industry because, like art, fashion uses colors or designs in an expressive, functional and ornamental manner. To prevent other designers from using a color would restrict an artist’s or designer’s ability to express or convey emotion or feeling through art. For example, such a restriction would prohibit competitors in the industry from making certain types of shoes that were designed to be only one color, or monochromatic, due to the style or expression of the shoe. The court found this kind of restriction impermissible and contrary to the goal of trademark law protection. On the other hand, the court noted that the use of color in a mark is allowed “but only in distinct patterns or combinations of shades that manifest a conscious effort to design a uniquely identifiable mark embedded in the goods.”6 The court ended its opinion by stating that CL’s claim for trademark infringement must fail because such infringement requires a trademark that merits protection. Since the court found CL’s trademark to be unworthy of trademark protection, there could be no infringement. The court, and Judge Victor Marrero, went further and stated that an order cancelling the trademark was imminent unless CL could show good cause against it. Given that CL’s trademark has all but been revoked, the decision has received a lot of attention. CBP, however, has not given Louboutin due attention, and CL’s trademark recordation still exists on the IPR Database. Although this is partially due to the fact that the case continues to make its way through the judicial process, it does raise an important question: how would CBP know if CL’s trademark was cancelled? After pondering this question, conducting research, and making phone calls to both the USPTO and CBP, it was determined that CBP does not know a trademark is cancelled until somebody contacts CBP and provides proof thereof. At Winter 2012 The International Law Quarterly FOCUS ON: Intellectual Property CHrISTIaN LOuBOuTIN, from previous page that point, CBP conducts its own due diligence to verify that the trademark has been cancelled and then revokes and removes the recordation from the IPR Database. This apparent procedural inefficiency, or lack of procedure altogether, risks harming innocent importers, manufacturers, distributors, retailers and other parties. For example, if a manufacturer makes shoes with a red-lacquered sole in China for a retailer/importer in the U.S., those shoes should be seized by CBP based on CL’s recordation in the IPR Database. A prudent importing party—in this example, the retailer—will hire an attorney to defend against the seizure and, in some cases, contact the trademark owner. This will cause the importer to incur legal fees and will create significant delays in the receipt of the imported merchandise. Such delays can have further negative implications and effects on the importer. In this hypothetical, the harm incurred by the importer should never have occurred. The merchandise was wrongfully seized due to the fact that there can be no infringement or counterfeit without an underlying trademark. The party harmed is the innocent importer. In sum, despite the progress displayed by CBP and ICE, as well as the effectiveness of the IPR Database, there is still room for improvement. With the overlap of intellectual property law and customs and trade law, formal procedures must be developed and implemented, and better lines of communication should be formed among U.S. federal courts, the USPTO and CBP. In this rare and unique circumstance, it was not the red tape that highlighted inefficiency; rather, it was red-lacquered leather.n Peter Quinter is a shareholder in the firm of Becker & Poliakoff, P.A., and is the chair and founder of the firm’s customs and international trade practice group. Peter is Florida Bar Board P. Quinter Certified in International Law and has been recognized as a Super Lawyer in the area of international law, a Top South Florida Lawyer, and among South Florida’s Legal Elite. Michael De Biase is a corporate and intellectual property attorney at Becker & Poliakoff, P.A. Michael has assisted clients in all stages of the trademark application and cancellation process and has assisted multi-national clients in their trademark and intellectual property needs. M. De Biase Endnotes: 1 Christian Louboutin S.A. v. Yves Saint Laurent Am., Inc., 778 F. Supp. 2d 445 (S.D.N.Y. 2011). 2 Intellectual Property Rights – Fiscal Year 2011. CBP Publication 0153-0112 (6 Jan. 2012). 3 Restricted gray-market articles are “articles bearing a genuine trademark or trade name identical with or substantially indistinguishable from one owned and recorded by a citizen of the U.S. or a corporation or association created or organized within the U.S. and imported without the authorization of the U.S. owner.” 19 C.F.R. § 133.23(a). 4 Louboutin, 778 F. Supp. 2d at 450 (quoting Qualitex Co. v. Jacobson Prods. Co., 514 U.S. 159, 170 (1995)) (internal citations omitted). 5 Louboutin, 778 F. Supp. 2d at 450, 453. 6 Id. at 451; see, e.g., Louis Vuitton Malletier, 454 F.3d at 116 (“LV” monogram combined in a pattern of rows with 33 bright colors); Burberry Ltd. v. Euro Moda, Inc., No. 08 Civ. 5781, 2009 WL 1675080, at *5 (S.D.N.Y. June 10, 2009). We want you! Become an ILS Sponsor today! Each year firms, companies and suppliers sponsor the International Law Section. Because of their generosity and support, the ILS is able to host top-notch seminars, events and meetings in Florida and around the world. In light of what we accomplished this past year, we hope our current sponsors will continue to support the Section. We also hope others will consider joining with us, as we look forward to innovative programs where we can advance international law and promote our sponsors Please contact elizabeth Ortega at
[email protected] for more details. Winter 2012 The International Law Quarterly Page 35 FOCUS ON: Intellectual Property Honda Motor Co. Ltd. v. Friedrich Winkelmann: Raising the Bar on “Bona Fide Intent to use” in u.s. Trademark Applications By James Michael Faier, Chicago, Illinois More than 60% of the trademark applications filed in the United States Patent and Trademark Office (“USPTO”) may have a fatal flaw. A federal trademark applicant must prove either use of the trademark or declare, at time of filing, a “bona fide” intention to use the trademark. This bona fide requirement is for both “intent to use” (§1b) and foreign registration (§44) applicants. “Bona fide” requires documentary evidence of intent, says the USPTO’s Trademark Trial and Appeal Board (the “TTAB” or “board”). In the case of Honda Motor Co., Ltd. v. Friedrich Winkelmann,1 Honda, which holds “CIVIC” registrations, opposed Winkelman’s application to register “V.I.C.” for vehicles and parts. Honda prevailed on a Motion for Summary Judgment. Winkelmann claimed both §1b and §44 filing bases. Honda argued that as a matter of law Winkelmann’s application was void from the start because he lacked a bona fide intent to use when he filed his application. Honda buttressed its argument with discovery responses from Winkelmann. Honda asked Winkelmann for his business plans, strategies, arrangements, and methods used in connection with the use of, or intent to use, the mark for the identified goods. Honda also asked for the channels to be exploited. Winkelmann responded that he had no activities in the U.S., and he had not produced the requested materials for the U.S. market. Asked for documents to evidence an intent to use, Winkelmann responded, “Not Applicable.” Winkelmann contended evidence of his bona fide intent to use the mark in the U.S. is found in his use of the mark in Europe and through the trademark applications and trademark registrations owned in other countries. Winkelmann provided to Honda printouts in German from his website and provided Page 36 copies of his German, European and international (WIPO) registrations. The TTAB held that while the evidence necessary to support bona fide intent to use may differ from case to case, the evidence provided by Winkelmann of foreign registrations and Internet printouts “did not demonstrate trademark use for the claimed goods.”2 The TTAB noted that as a general rule, the fact question of intent is badly suited for resolution through a motion for summary judgment.3 The board wrote that the “absence of any documentary evidence regarding an applicant’s bona fide intention to use a mark in commerce is sufficient to prove that an applicant lacks such intention as required by Section 1(b) of the Trademark Act.” The board held that the documents did not show that the applicant had an intent to use the mark in the United States. The Board noted that the website printouts were not translated into English, and that the images on the website related to car care packages and not vehicles or other goods recited in the application. The board held that the materials presented did not create a genuine issue of material fact sufficient to defeat the Motion for Summary Judgment.4 According to the USPTO Trademark Electronic Search System (“TESS”), applicants filed 4,473,873 applications from 1990 to 2011. Only 1,750,096 of those applications claimed that the marks in the applications were in use (§1a of the Act) when the application was filed. In the other 2.7 million cases, the applicant (basing the application on §1b Intent to Use, §44e Foreign Registration, or, more recently, §66a Madrid Protocol) declared a bona fide intention to use the mark. In light of the Honda decision, applicants would be well served to have a business plan and other documentation in their files at the moment the application is filed. Although this case does not provide information on point, an applicant who files an application without bona fide intent to use the mark may not cure that failure by actions at a later time since the statute requires such intent at the time of filing. In its decision, the TTAB identified interrogatories and requests for documents from Opposer (Honda) to Applicant (Winkelmann). Opposer propounded discovery that focused on the period prior to the filing of the application. In its interrogatories, Opposer asked for (1) business plans, strategy papers, and arrangements used by Applicant in connection with the use of, or the intent to use, the mark for the identified goods, and (2) the channels of trade to be exploited in the U.S. by Applicant. In its document requests, Opposer asked for (1) documents to identify all intended uses of Applicant’s mark on, or in connection with, the claimed goods, (2) documents to identify products of Applicant associated with Applicant’s mark intended to be used, and (3) documents Applicant intends to use to promote, advertise, publicize, offer to sell and/or sell in connection with the mark. In addition to the §1(b) filing basis, Winkelmann claimed foreign registration basis under Section 44 of the federal trademark act. The board noted that when an applicant files an application based on §44, the applicant must verify in writing a bona fide intent to use the mark in U.S. commerce. When that bona fide intent under §44 is questioned, the board “uses the same objective, good-faith analysis” that it applies in a bona fide intent question in a §1(b) matter.5 The board appears to point to the importance of evidence in the record of an existing business that provides the goods or markets the service listed in the application. In a footnote in the Winkelmann decision, the TTAB cited to Lane Ltd. v. Jackson International Trading Co.6 In Lane, the Winter 2012 The International Law Quarterly FOCUS ON: Intellectual Property Honda Motor Co. Ltd. v. Friedrich Winkelmann, board found bona fide intent to use the mark SMUGGLER for tobacco where applicant’s principal had been engaged in the tobacco marketing business under a prior registration for the SMUGGLER mark. The board found that applicant’s efforts to obtain a licensee for the new SMUGGLER mark was consistent and supportive of applicant’s claimed bona fide intent to use the mark in commerce.7 The decision in Winkelmann raises the bar for what a business person must do in anticipation of filing to register a trademark. Prior to 1989, a trademark owner had to have actual use in commerce to register a mark in the United States. The 1989 amendments to the Lanham Trademark Act were very much a result of global marketers who were tired of investing in brand development only to find that a competitor brought a product to market first and adopted a mark confusingly similar to the mark that the global marketer wanted to adopt. The “intent to use” provisions enabled marketers to develop lists of po- from previous page tential marks, file to register them, and then embark on testing to whittle them down. The U.S. continued to be a country that required actual use as the basis for registering a trademark. Most countries around the world do not require evidence of use prior to registration. The open question raised by the Winkelmann decision is whether there is much benefit to be had from the “intent to use” provisions if one must make a large planning investment prior to filing an “intent to use” application.n James Michael Faier, M.P.P., M.B.A., J.D., is a registered patent attorney in Chicago. He holds degrees from Pomona College, Harvard University, and Northwestern University. Email:
[email protected]. Endnotes: 1 2009 WL 962810, 90 U.S.P.Q.2d 1660 (TTAB 08 April 2009) (Opposition No. 91170552). J. Faier 2 Id. at 4. 3 Id. at 2. 4 Id. at 4. 5 Id. at 2. 6 33 U.S.P.Q.2d 1351 (TTAB 1994). 7 Id. at 5. 2012 Annual Florida Bar Convention June 20 - 23 Gaylord Palms Resort & Convention Center Watch www.floridabar.org for details. Winter 2012 The International Law Quarterly Page 37 FOCUS ON: Intellectual Property A Practical Guide to Introducing Products in the Dominican Republic By Brenda recio, Santo Domingo, Dominican republic When introducing a product or service in the Dominican Republic (“DR”), the foreign manufacturer, provider, or distributor must take into consideration local legislation—particularly legislation on intellectual property, applicable sanitary registrations, and agency. When entering the Dominican market, many investors are unaware that their trademarks, trade names, or patents are not automatically protected in the jurisdiction, or they proceed to grant product distribution rights to local representatives without investigating the consequences of their consent. Focusing primarily on tangible goods, this article sets out the basic issues to consider when importing a product into, and distributing it within, the DR. Act of the Uruguay Round, specifically the Agreement on Trade-Related Aspects of Intellectual Property (“TRIPS”), the DR has implemented a legal framework to ensure effective protection of industrial property rights while promoting economic and technological developments.2 Another international treaty that resulted in key changes in DR legislation is the Free Trade Agreement among the Dominican Republic, Central America, and the United States (“DR-CAFTA”), which entered into force in the DR on the Madrid Protocol,4 however, all trademark registrations must be made directly at ONAPI following the guidelines set forth in Law 20-00, regardless of any existing international registration the trademark may have. A. Trademark Registrations To register the trademark of a product or service to be distributed or manufactured in the DR, the interested party can, prior to the registration, perform a search at ONAPI to confirm the trademark availability in the DR. If the mark is available, the registration application may be filed. In the DR—as in any other jurisdiction—at the time of registration the applicant must submit certain documents that depend on the nature of the registration requested (i.e., general information of the applicant, description of the mark, labels, power of representation, corresponding fees, etc.). The applicant has to provide a detailed list and description of the goods and services for which the trademark protection is requested, and the exact classification, according to the International Classification of Goods and Services for the Purpose of the Registration of Marks (Nice Classification), under which the mark will be registered.5 In the case of patents and utility models, the DR uses the classification by technical subjects set forth in the International Patent Classification, established by the Strasbourg Agreement dated 24 March 1971, as amended.6 For the documents relating to industrial designs, the DR uses International Classification of Industrial Drawings and Models, established by the Locarno Agreement of 8 October 1968.7 After receiving the application, ONAPI examines its form and substance and, upon approval, orders a publication announcing the trademark application in order to allow Winter 2012 Industrial Property in the Dominican Republic Before a product or service is introduced into the DR, protection of intellectual property rights related to the product or service must be secured. Industrial property rights, trademark, trade name and patent registrations are all governed by Law No. 20-00 on Industrial Property and its Implementing Regulations (“Law 20-00”).1 These registrations serve as preventive measures against counterfeiting and other intellectual property infringements. The government office in charge of enforcing Law 20-00 is the National Office for Industrial Property (“ONAPI” for its Spanish acronym). Through the years, the DR has worked to reform its intellectual property legislation and fulfill the commitments undertaken in various international treaties to which it is a signatory, especially the WTO. In line with the commitments undertaken in the Final Page 38 1 March 2007. The country’s legislation now contains the minimum standards of protection, although the DR has not yet unified trademark registrations among the contracting parties. For the purposes of unifying trademark registrations, the DR-CAFTA contracting parties agreed to make all reasonable efforts to ratify or accede to the Madrid system, which is comprised of the Madrid Agreement Concerning the International Registration of Marks (1891) and its modifications, and the Madrid Protocol of 1989, and its further modifications, currently administered by the International Bureau of WIPO located in Geneva, Switzerland. The Madrid system allows trademark owners to have a trademark protected in several countries at the same time by filing one application directly with a national or regional trademark office.3 Because the Dominican Congress has not yet ratified The International Law Quarterly FOCUS ON: Intellectual Property DOMINICaN rEPuBLIC, from previous page any third party to object to its registration. If no third party objects within forty-five days from the publication date, ONAPI grants registration by issuing a certificate of registration to the applicant.8 In general, the whole registration process of a trademark lasts around sixty days, and the trademark is registered for ten years from its issuance date and can be renewed for the same period. Any intellectual property owner who believes a trademark registration violates the provisions of Law 20-00 may challenge it by initiating an administrative proceeding before the relevant department of ONAPI.9 Once the department director issues a decision, it can be appealed to the General Director of ONAPI, who issues a final and binding decision in the case, thus extinguishing the administrative proceeding.10 After securing the exclusivity right granted to the trademark owner, the trademarked product may be safely commercialized in the DR. B. Trade names, Logos, slogans, Denominations of Origins and Trade secrets Trade names and other distinctive signs such as logos, slogans, and denominations of origin follow a registration procedure similar to trademarks. The right to exclusive use of a trade name is acquired by virtue of its first use in business in the DR, after which the trade name enjoys protection without the requirement of registration.11 The trade name registration is for ten years, but to maintain its exclusivity the owner must continuously use the trade name in commerce for more than five years.12 For logos and commercial slogans, exclusivity is obtained only through registration, and the protection is granted for ten years from the application filing date. For denominations of origin, the registration procedure is similar to the trademark registration procedure; however, the protection is granted for an indefinite period.13 Foreign producers, manufacturers, artisans, or guilds, as well as the competent public authorities of foreign countries, may register denominations of origin at ONAPI.14 Law 20-00 also protects trade secrets or business secrets, defined as any confidential information in possession of an individual or corporation that may be used in any productive, industrial, or commercial activity and that is capable of being transmitted to a third party.15 Law 20-00 imposes sanctions on any individual who reveals a trade secret, deeming it an act of unfair competition. Any person affected by the act of unfair competition may initiate an action before the competent judicial authority.16 C. Patents, utility Models and Industrial Designs An invention is patentable in the DR if it is novel, capable of industrial application and has a degree of inventiveness.17 According to Law 20-00, the patent applicant must provide ONAPI with information re- Hogan Lovells is a global law firm with more than 40 offices around the world. Building on the foundations of our previous success as two firms, Hogan & Hartson and Lovells, Hogan Lovells is dedicated and equipped to help clients across the spectrum of their critical business and legal issues. We draw from our local market knowledge and international capabilities to provide exceptional service and creative advice to our clients. www.hoganlovells.com Winter 2012 The International Law Quarterly Page 39 FOCUS ON: Intellectual Property DOMINICaN rEPuBLIC, from previous page garding the owner of the invention, description of the invention, claims and drawings, among other things. ONAPI conducts a thorough examination, which, if favorable, results in the grant of a patent for a nonextendable term of twenty years from the date of the DR patent application.18 If the examination is partially unfavorable, the patent will be granted only for the claims accepted; if the examination is completely unfavorable, the patent will be denied.19 To prevent the patent from lapsing during the registration term, the patent owner must pay annual maintenance fees. Law 20-00 also sets forth the procedures for registration of utility models and industrial designs at the Inventions Department of ONAPI. The protection of industrial designs is granted for five years from the filing date and may be extended for two additional periods of five years after applying for extensions at ONAPI and fulfilling the necessary requirements. Protection for utility models is granted for a non-extendable term of fifteen years, subject to payment of maintenance fees in the fifth and tenth year from the application filing date.20 In 2007, the DR acceded to the WIPO’s Patent Cooperation Treaty (“PCT”), which makes it possible to obtain national registration under the PCT for patents and utility models at ONAPI.21 in accordance with the General Regulation for Risk Control in Food and Beverages in DR No. 528-01. Sanitary registrations for pharmaceutical products are approved by the General Drug and Pharmaceutical Products Department of the MISPAS in accordance with Rule No. 0246-06. The Department also handles sanitary registrations of all cosmetics and personal hygiene products. The sanitary registration requirements depend on the nature of the product, but they generally include: (1) information about the applicant and/or legal representative who will be distributing the product in the DR, as well as the product manufacturer (if different); (2) the product description (qualitative and quantitative formulas, etc.); (3) the certificate of free sales issued by the competent health authority authorizing sale and consumption of the product in the country of origin with the corresponding analysis; (4) product samples (usually three); (5) local certificates of trademark registration; (6) labels conforming to the local legislation concerning information to be provided to the Dominican consumers;22 and (7) applicable fees. Additionally, as a prerequisite for registration of pharmaceutical products, a copy of the certificate of registration of the manufacturing pharmaceutical establishment must be filed, as well as the formula and composition of the product, its active ingredients and excipients (expressed in units of administration), monograph of the product (including pharmacological and toxicological information), quality control information, method of manufacturing, and description of the fabrication process. The MISPAS does not accept incomplete files under any circumstances and requires all documentation from abroad to be apostilled or duly legalized. When preparing its business plan in the DR, a foreign manufacturer should take into consideration the current time frame for obtaining a sanitary registration. The Food and Beverage Control Department of MISPAS takes about two to three months to issue a final certificate for food and beverage products, while the General Drug and Pharmaceutical Products Department can take a year or more to issue a final certificate for other products. Final sanitary registrations are issued for five years and can be renewed for the same period three months before the expiry date.23 Since local registration of the product’s trademark is one of the requirements for sanitary registration, the foreign manufacturer also needs to take into consideration the time it takes to register the trademark (approximately sixty days, as stated above). Any information provided to the MISPAS concerning products for registration is confidential and may not be disclosed to third parties. In this regard, national authorities shall safeguard confidential information against disclosure, except as necessary to protect the public. Notwithstanding the foregoing, if the MISPAS discloses confidential information concerning safety and efficacy submitted to it for marketing approval, the MISPAS then has the obligation to protect such information against unfair commercial use by third parties.24 Law no. 173 Regarding Protection of Agents, Importers of Merchandise and/or Products in the DR The foreign manufacturer may import and sell products in the DR directly or through a local distributor or agent. When designating a distributor, the foreign manufacturer will have to take into consideration the DR’s protectionist agency legislation: Law No. 173 on Protection of Importer Agents, Importers of Merchandise and/ or Products of 6 April 1966, as amended (“Law 173”),25 which governs the distribution and sale of goods and services and the distribution or agency relationship between a foreign manufacturer (licensor) and a local distributor (licensee). The principal objective of Law 173 is to protect the rights of local distributors, agents, and/or representatives from unfair practices of foreign enterprises, such as the unilateral termination of contracts. Winter 2012 sanitary Registrations in the Dominican Republic When commercializing a product in the DR, a certificate of sanitary registration— guaranteeing that a product is fit for human consumption or usage—must be obtained for consumer products such as food and beverages, pharmaceuticals, health products, cosmetics, and personal hygiene products. Sanitary registrations are processed locally by the Ministry of Public Health and Welfare (“MISPAS” for its Spanish acronym) in accordance with General Health Law No. 42-01 (“Law 42-01”). In addition, food and beverage sanitary registrations are subject to approval by the Food and Beverage Control Department of MISPAS, Page 40 The International Law Quarterly FOCUS ON: Intellectual Property DOMINICaN rEPuBLIC, from previous page Following is a brief overview of its salient provisions: (a) Law 173 belongs to the public order; therefore, its content cannot be modified by the parties’ agreement26 and, in case of a conflict, Law 173 shall prevail over the parties’ distribution agreement. This rule has an exception where the foreign licensor is a corporation from the U.S. or is an affiliate of a U.S. corporation, in which case, as of the date of entry into force of DR-CAFTA, Law 173 does not apply27 unless the distribution agreement expressly states that Law 173 will govern the agreement.28 (b) To benefit from the protection of Law 173, the local licensee must register its status in the Central Bank of the DR. This registration can be exclusive or non-exclusive, the latter meaning that the foreign licensor can appoint other licensees within the Dominican territory who may also register their relationships in the Central Bank. (c) Under Law 173, the licensor can unilaterally terminate a distribution relationship only if he or she demonstrates the existence of a just cause or pays the indemnities set forth in Law 173. Law 173 defines just cause as the “[n]on-fulfillment of any of the essential obligations29 of the Concession Agreement or any action or omission from the same that affects adversely and substantially the interests of the licensor.”30 (d) Consequently, the foreign licensor violates Law 173 if the licensor: (1) ends the concession agreement without a just cause; (2) designates another distributor, agent, or representative or develops a direct distribution of its products or services in the country, despite the existing exclusive relationship with the local licensee; (3) refuses, without a just cause, to renew the distribution agreement once it has reached its term; or, (4) establishes a subsidiary or a branch in the DR to the detriment of the licensee. (e) In the event the licensor is not able to demonstrate existence of a just cause when it unilaterally terminates the distribution relationship, the local licensee may be entitled to payment of indemnity calculated according to the formula established by Law 173. Termination or non-renewal of a distribution agreement is subject to compensation calculated as the sum of the following components:31 (1) gross profits of the local licensee in the last five years of the relationship; (2) 10% of the average gross profits for the last five years multiplied by the number of years in addition to five during which the relationship has been in place; (3) value of any investment by the licensee to purchase or lease the commercial location where principal services are rendered, including expenses for its conversion for the intended use and acquisition of machinery, equipment, etc.; (4) any loss derived from termination of the agreement, including the value of the licensee’s personal services; and (5) aggregate value of the product’s goodwill generated through the licensee’s Winter 2012 The International Law Quarterly Page 41 FOCUS ON: Intellectual Property DOMINICaN rEPuBLIC, from previous page efforts. The local courts determine whether the licensor had just cause to terminate the agreement. (f) Finally, if the licensor enters into a new distribution agreement when the prior distributor relationship protected by Law 173 has not been yet terminated, the new distributor or licensee designated by the foreign licensor is jointly responsible for any indemnity payments allowed by law.32 Law 173 has been severely criticized because of its overprotective nature. Notwithstanding the foregoing, the foreign manufacturer or licensor may take certain steps to avoid its reach. One positive development is that lower courts have started to recognize arbitration clauses agreed to by the parties in their distribution agreements. In the past, only local courts could hear cases under Law 173. ducing a product or service into the DR, investors should obtain advice of local counsel.n Brenda Recio is a senior associate at Jimenez Cruz Peña in Santo Domingo, Dominican Republic, where she focuses her practice on international business law and intellectual propB. Recio erty. She received her LL.B in 1997 from Universidad Iberoamericana (UNIBE) in Santo Domingo and an LL.M in international business law from American University Washington College of Law in Washington D.C., where she was a Fulbright Scholar (2002-2003). Endnotes: 1 Ley No. 20-00 sobre Propiedad Industrial de fecha 8 mayo de 2000 [Law No. 20-00 of 8 May 2000 on Industrial Property], translated in IndustrIal property In doMInICan repuBlIC legIslatIve suMMary, ONAPI, Computhen (2008). 2 Id., Decree No. 599-01, establishing Implementing Regulations of Law No. 20-00. 3 World Intellectual Property Organization (WIPO), The Madrid System for the International Registration of Marks, available at http://www.wipo.int/madrid/ en/. 4 The list of current parties to the Madrid System for the International Registration of Marks is available at http://www.wipo.int/export/sites/www/treaties/en/ documents/pdf/madrid_marks.pdf. 5 Law 20-00, art. 75(d) on Registration of Application, repealed and substituted by Ley No. 424-06 sobre Implementacion del Tratado de Libre Comercio entre la Republica Dominicana, Cetroamerica y los Estados Unidos de America (DR-CAFTA) de fecha 20 de nov. 2006 [Law 424-06 of 20 Nov. 2006 on Implementation of the DR-CAFTA Agreement], art. 13. 6 Id., art. 162 on Classification of Patents. 7 Id., art. 163 on Classification of Industrial Designs. 8 Id., art. 80 on Publication, Opposition, and Issuance of the Certificate, repealed and substituted by Law 424-06, art. 17. 9 This applies as well to registrations of trade names, slogans, and denomination of origins, among other types of industrial property. 10 Law 20-00, on Registration of Application, repealed and substituted by Ley No. 424-06 sobre Implementacion del Tratado de Libre Comercio entre la Republica Dominicana, Cetroamerica y los Estados Unidos de America (DR-CAFTA) de fecha 20 de nov. 2006 [Law 424-06 of 20 Nov. 2006 on Implementation of the DR-CAFTA Agreement] art. 157 on Administrative Appeals. 11 Id.. art. 113(1) on Acquisition of Right to Commercial Name. 12 Id., art. 113(3). 13 Id., art. 132(1) on Duration and Modification of Appellation of Origin Registration. 14 Id., art. 127 on Registration of Denominations of Origin, repealed and substituted by Law 424-06, art. 21. 15 Id., art. 178(1) on Definition and Conditions to Protect Secret. 16 Law 20-00 on Registration of Application, repealed and substituted by Ley No. 424-06 sobre Implementacion del Tratado de Libre Comercio entre la Republica Dominicana, Cetroamerica y los Estados Unidos de America (DR-CAFTA) de fecha 20 de nov. 2006 [Law 424-06 of 20 Nov. 2006 on Implementation of the DR-CAFTA Agreement], art. 183(1) on Action against Act of Unfair Competition. 17 Id., art. 3 on Requirements of Inventions to be Patentable. 18 Id., art. 27 on Registration of Denominations of Origin, repealed and substituted by Law 424-06, art. 2. 19 Id., art. 23 on Granting of Patent. 20 Id., art. 53 on Term for Patent for Utility Model. 21 World Intellectual Property Organization (WIPO), Types of Protection Available for Contracting States, available at: http://www.wipo.int/pct/en/texts/pdf/ typesprotection.pdf. 22 The package and labels of food and beverage products to be commercialized in the DR have to comply with specifications of Technical Dominican Norm NORDOM 53 of Labeling of Prepackaged Foods, including the product name, date of fabrication, date of expiry, list of ingredients, information on the manufacturer, weight, sanitary registration number, instructions for handling product, and batch number. Most of these requirements are the same for the package and labels of health, pharmaceutical, cosmetic, and personal hygiene products. Notably, labels must be in Spanish, in accordance with the Ley General de Protección de los Derechos del Consumidor o Usuario No. 358-05 de fecha 9 de sept. de 2005 [General Law of Consumer or End User Protection No. 358-05], or have a corresponding translation, in accordance with its Implementing Regulations No. 236-08. 23 Reglamento No. 246-06 que Regula el Sector Farmacéutico en la República Dominicana [Implementation Rules that Govern Pharmaceutical Industry in the Dominican Republic], art. 92. 24 Law 20-00, art. 181(3) on Information and Data Protection for Marketing Authorization, repealed and substituted by Law 424-06, art. 32. 25 Ley No. 173 sobre Protección a los Agentes Importadores de Mercaderías y Productos de fecha 6 de abril 1966 [Law No. 173 on Protection of Agents, Importers of Merchandise and Products of 6 April 1966]. Conclusions and Recommendations The framework described in this article provides basic legal protection for an investor seeking to introduce products or services in the DR. Becoming a member of the TRIPS Agreement and DR-CAFTA has helped the DR bring its intellectual property laws up to international standards and fulfill its obligations under the WTO. Many investors, when introducing their products or services into the local market, benefit from such legislative advancement, which efficiently protects their products from counterfeiting or from unfair competition by national or international competitors. Also, international agreements have helped to raise local standards for consumer products by making a certificate of sanitary registration mandatory for their commercialization. In addition to intellectual property rights and sanitary registrations, the investor must carefully consider the application of Law 173 which, even though outdated and protectionist with respect to local distributors, still regulates the agency relationship in the DR. As always, prior to investing or to introPage 42 The International Law Quarterly Winter 2012 FOCUS ON: Intellectual Property DOMINICaN rEPuBLIC, from previous page 26 “The Laws which are of interest to the public order and proper conduct shall not be abolished by private agreements.” Codigo Civil [C.C.], art. 6. 27 Law 424-06, art. 67(a). 28 Free Trade Agreement between the Dominican Republic, Central America and the United States (DRCAFTA), Annex 11.13(B). DR-CAFTA states that “the Dominican Republic shall not apply Law No. 173 to any covered contract signed after the date of entry into force of this Agreement unless the contract explicitly provides for the application of Law No. 173.” 29 Law 173 does not define “essential obligations,” the determination of which is left to the courts. 30 Law 173, art. 1(d). 31 Id., art. 3. 32 Id., art. 6: All natural, juridical, national or foreign persons associated with the author of the destitution or substitution, of the resolution or termination of the Concession Contract or who refuses to renew said contract, by unilateral action and without a just cause on the part of the Licensor, and who substitutes Licensee, shall be jointly responsible for the compensation payment agreed upon. Paragraph: The natural or juridical person, national or foreign, who has by any means obtained the rights over the merchandise, products or services of Licensor, shall be jointly held responsible for such action, as well as the persons substituting Licensee on behalf of the new buyer. MeMber benefits The Florida Bar • 651 East Jefferson Street • Tallahassee, Florida 32399-2300 www.floridabar.org/memberbenefits • 850/561-5600 • 800/342-8060 LeGAL ReseARCh ABA PuBLICATIOns www.ababooks.org ref. #PAB6EFLB for 15% discount CCh AssOCIATIOn http://tax.cchgroup.com/members/tfb Use ref. #Y5604 at check out. FAsTCAse nATIOnAL LAW LIBRARY 866-77-FASTCASE FRee FLORIDA CAse LAW at www.floridabar.org. 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BAnK CLOThIeRs 800-285-2265 www.josbank.com • Code: 91861 nATIOnAL InsuRAnCe BusIness PLAnnInG COnCePTs, InC. 800-282-8626 www.memberbenefits.com CeLeDInAs InsuRAnCe GROuP www.celedinas.com/florida-bar FLORIDA LAWYeRs MuTuAL (FLMIC) 800-633-6458 • www.flmic.com GEiCO 800-368-2734 www.geico.com MeDICAL eVACuATIOn AnD RePATRIATIOn MEDJET 800-527-7478 www.Medjet.com/TFB For detailed information on ALL Bar Membership Services, visit www.floridabar.org/memberbenefits REV 02/12 Winter 2012 The International Law Quarterly Page 43 Pleural Plaques: The north-south Divide By Nina Tulloch, London, England In Axa General Insurance and ors v. The Lord Advocate and ors [2011] CSIH 31, four insurers failed in their bid to have the Damages (Asbestosrelated Conditions) (Scotland) Act 2009 (the “Act”) declared unlawful. This article examines recent developments in the approach to compensation for pleural plaques, focussing in particular on the contrast between the Scottish and English jurisdictions. Pleural plaques are areas of fibrous thickening of the pleural membrane which surrounds the lungs. In general, they are asymptomatic and do not, of themselves, lead to other asbestos-related diseases. However, pleural plaques indicate an exposure to asbestos fibres which have penetrated into the membrane surrounding the lung. These fibres may independently cause life-threatening or fatal diseases such as asbestosis and mesothelioma. In consequence, a diagnosis of pleural plaques confirms an exposure to asbestos and that may itself cause the patient anxiety or to suffer from clinical depression. as “around 4000,” the greatest cause of work-related fatalities in the UK.3 Any employer carrying on any business in Great Britain must insure and maintain insurance against liability for bodily injury or disease sustained by employees arising out of and in the course of their employment. This has been the case since the passing of the Employer’s Liability (Compulsory Insurance) Act 1969. As there is often significant passage of time between exposure to asbestos and medical confirmation of asbestos-related disease, there are a number of hurdles to be overcome by the affected individuals when pursing a claim for compensation. One of the most frequently encountered problems is identifying the employer who was responsible for the exposure to asbestos (and who may have long since gone into liquidation or merged) and the employer’s liability insurer (who themselves may have ceased to exist). Assuming that these can be identified, there are issues of proof and causation to be overcome which are compounded by the fact that events took place several decades before. The question of when an employer’s liability for asbestos-related disease is triggered (and therefore which insurance policy should respond) has been the subject of a separate string of litigation.4 In the case of pleural plaques, however, there may be a bar to commencing a claim at all for the reasons set out below. history of asbestos use in scotland and england The UK was a global leader in the manufacture of products containing asbestos and is now facing the reality of caring for individuals left with asbestos-related disease. The amount of compensation and the circumstances under which compensation is available has been a matter of parliamentary and judicial debate for the last thirty years. In 1871, two Scottish businessmen imported the first asbestos into the UK from Canada, marking the beginning of what became the extensive use of asbestos in Scotland. The asbestos minerals’ ability to resist high temperatures made it a useful manufacturing material. It was used for its Page 44 heat resistant and insulating properties in shipyards across Scotland but particularly in Clydeside, in locomotive construction, motor engineering and at the oil refineries in Grangemouth to name but a few areas. The result is that West Dunbartonshire in Scotland has the highest incidence of mesothelioma in the UK, with Inverclyde, Renfrewshire and Glasgow similarly affected.1 Asbestos use was similarly prevalent in England, particularly in the railway industry, the heavy manufacturing industries in the North East (Tyneside is classed as an area of high risk for mesothelioma deaths2) and in the nationwide construction industry as asbestos and asbestos-containing materials were used in a large number of buildings. For a long time the dangers of asbestos use were observed but not widely understood. Increased life expectancy and advances in medical science have meant that asbestos-related disease, which often takes several decades to develop after exposure, has become more prevalent. It is difficult to estimate the number of asbestos-related cancer deaths per year in the UK but the Health and Safety Executive estimates it Constituent elements of the tort (in england) and delict (in scotland) of negligence The actionability of pleural plaques in England and Scotland has led to judicial examination of what constitutes damage for the purposes of the tort/delict of negligence. For the purposes of this article, Winter 2012 The International Law Quarterly PLEuraL PLaQuES, from previous page the elements required to found a cause of action in negligence under the laws of both England and Scotland are the same. First, there must be a duty of care owed by one party to the other (in asbestosrelated cases, the most common scenario is employer’s duty of care to the employee). Second, there must have been a breach of the duty of care by the employer (the breach usually takes place in the form of exposure to the harmful asbestos). Third, the employee must have suffered damage as a result of the employer’s negligence. It is this third element that has been the subject of the recent pleural plaques cases decided by the higher courts of England and Wales. As Lord Hoffmann observed in the House of Lords decision in Rothwell and ors v. Chemical and Insulating Co Ltd [2007] UKHL 39, damage is an abstract concept of being worse off, physically or economically, so that compensation is the appropriate remedy.5 How much worse off the claimant needs to be is a question of degree. The concept of degree needs to be looked at against the background of the underlying principle in both Scots and English law of de mimimis non curat lex—the law is not concerned with inconsequential things. Are pleural plaques, for the most part asymptomatic, inconsequential? gence, the change representing damage. In Patterson v. Ministry of Defence [1987] CLY 1194, what later became known as the aggregation theory emerged. In Patterson, Mr. Justice Simon Brown held that the plaques, when combined together with the risk of future disease and attendant anxiety, could add up to a cause of action. The proposition was that physiological damage which is not itself compensable damage could be aggregated with both risk and anxiety (neither of which would by themselves give rise to a cause of action) to create a cause of action. (1884) 14 QBD 141, which said that where a claimant suffered actionable personal injury as a result of the defendant’s breach of duty, the claimant can and must claim damages in the same action for all damage suffered or that will be suffered in consequence of that breach of duty. This principle gave certainty to both parties and meant that actions were only tried once. The claimants argued that although pleural plaques may not, of themselves, constitute actionable injury, when combined with the anxiety of knowing that asbestos fibres had penetrated the pleural membrane and of risk of future asbestos-related disease, this led to something which was more than de minimis and therefore they should be entitled to claim now for what may be more serious harm in the future. At first instance, Mr. Justice Holland found that plaques were not damage which could found a cause of action. He held that the identification of pleural plaques had an evidential rather than substantive significance. Their existence confirmed significant physical penetration by asbestos fibres but did not add in any way to resultant disabilities, actual or prospective.8 He was, however, persuaded that when anxiety is engendered by tortiously inflicted physiological damage, it can properly contribute to “damage” or “injury” so as to complete the foundation of a cause of action. Mr. Justice Holland having found in favour of the claimants, seven of the ten test cases were appealed to the Court of Appeal.9 The Court of Appeal overturned the first-instance decision, rejecting the aggregation theory by a majority (Lady Justice Smith dissenting). The Lord Chief Justice and Lord Justice Longmore considered there were strong policy reasons why pleural plaques should not give rise to claims for compensation. In particular the Lords Justice were critical of “claims farmers” who made a business from litigation and who encouraged workers who had been exposed to asbestos to have CT scans to see whether they might have grounds for a claim. They saw this as a way of creating stress and anxiety that was often unjustified. Following the decision of the Court of Page 45 Rothwell—rewriting the history of compensation for pleural plaques Based on the above three decisions, employers’ liability insurers settled claims from (ex) employees that were founded upon the presence of pleural plaques from 1984 onwards, on the understanding that these were actionable injury. Typical payouts amounted to £1500 per individual in the 1980’s.6 Faced with an increase in the number of pleural plaques-based claims and concerns about the costs of these cases to the insurance industry, in 2004 a group of insurers decided to challenge the practice of indemnifying for pleural plaques claims. The challenge was mounted on the basis that none of the claimants in these cases had suffered an injury sufficient to found a claim in negligence and that the quantum in such cases was far too high. Ten test cases were tried at first instance in the English courts.7 In all of the cases it was admitted that the employer had negligently exposed the employee to asbestos such that there could be a liability in negligence were sufficient damage to the employee found by the court to have been caused. In the test cases, the claimant (ex) employees relied upon what became known as the “aggregation theory” to argue that they had sustained damage sufficient to found a cause of action. The aggregation theory was based upon the English common law principle set out in Brunsden v. Humphrey Pleural plaques litigation in england In 1980’s England, the actionability of pleural plaques was considered in three first-instance decisions. In Church v. Ministry of Defence (1984) 134 NLJ 623, Mr. Justice Peter Pain held that they could found an action in negligence, deciding that it was an error to treat pleural plaques on their own. Damage for the purposes of a cause of action was caused by the asbestos passing through the lungs and causing the plaques to form. Pleural plaques were not, the court decided, so de minimis that the law should disregard it. In Sykes v. Ministry of Defence (The Times 23 March 1984) Mr. Justice Otton found that the fact that there had been a definite change in the structure of the pleura was enough to found an action in negliWinter 2012 The International Law Quarterly PLEuraL PLaQuES, from previous page Appeal, four of the seven cases were appealed to the House of Lords in Rothwell v. Chemical and Insulating Co Ltd [2007] UKHL 39. The House of Lords upheld the Court of Appeal’s judgment. Their Lordships decided that it is not possible, by adding together two or more components, none of which in itself is actionable, to arrive at an actionable injury. As Lord Scott observed, the question of whether the formation of pleural plaques suffices to complete a tortious cause of action in negligence depends on what the law recognises as damage, not on how the medical experts may classify the condition in question. Pleural plaques are not visible or disfiguring. None of the claimants suffered from any disability or impairment of physical condition caused by the pleural plaques. The plaques were asymptomatic and were not the first stage of any asbestosrelated disease. The inhalation of fibres and the formation of plaques involved no physical pain or physical discomfort. The presence of pleural plaques could not therefore suffice to complete a tortious cause of action in negligence. Plaques have been regarded as actionable for over 20 years. Although plaques are not in themselves harmful, they do give rise to anxiety because they signify an increased risk of developing serious illness as a result of exposure to asbestos. In areas associated with Scotland’s industrial past, people with pleural plaques are living alongside friends who worked beside them and are witnessing the terrible suffering of those who have contracted serious asbestos related conditions including mesothelioma. This causes terrible anxiety that they will suffer the same fate. The Scottish government believes that people who have negligently been exposed to asbestos who are subsequently diagnosed with pleural plaques should be able to raise an action for damages as has been the practice in Scotland for over twenty years.12 The Scottish government’s position was that legislation would not introduce any liability not in existence prior to Rothwell, it would restore a right of action to those who enjoyed that right before. It did not alter the Scots law relating to negligence in any way, but rather permitted a cause of action that England had ruled out. and the total cost at £1.1 billion to £8.6 billion. 13 The Scottish government put the figures much lower at £11,843,950 to £20,033,950 for insurers, employers and ex-employers to settle existing cases with annual costs thereafter of £3,761,000 to £6,947,000 rising to £5,841,000 to £16,555,000 in 2015 before decreasing.14 In April 2009, four insurers took the very unusual step of petitioning for an interim interdict (injunction) to prevent the Act coming into force before the challenge to the Act’s validity could be heard by the Scottish Courts.15 That petition was refused and the Act came into force on 17 June 2009. In January 2010, the Outer House of the Court of Session gave judgment on insurers’ challenge to the validity of the Act.16 The insurers sought to argue that the passing of the Act was irrational in the Wednesbury sense (Associated Provincial Picture Houses Ltd v. Wednesbury Corporation [1947] 2 All ER 680); i.e., it was so unreasonable that no reasonable person acting reasonably could have made it. Lord Emslie, however, found that the challenge did not come anywhere near meeting the extremes of bad faith, improper motive or manifest absurdity which would be required to justify reducing an act of the Scottish parliament. The Scottish government was allowed a discretionary area of judgment especially where social, economic and political considerations were in issue.17 Similarly, the two challenges brought under the Convention also failed. The Insurers argued that the Act infringed Art. 6 of the Convention (right to a fair trial) by its indirect interference with the determination of the cases which had been sisted (stayed) pending the decision in Rothwell. They argued that the Act would impose new liabilities on insurance contracts which were not reflected in the premium taken. This submission was rejected by Lord Emslie who said that whilst the Act may have a financial impact upon insurers, it could not be said that the Act itself interfered with any rights of the insurers. Either the policies underwritten by the insurers covered damage or they did not—confirming a cause of action did not alter an Winter 2012 The scottish government’s response to Rothwell Rothwell was concerned with the appeal of four English cases. As such, it was not a decision that was binding upon the Scottish Courts. The Scottish Courts had previously held that pleural plaques were actionable.10 Shortly after the House of Lords’ decision in Rothwell, the Scottish government expressed concern that were pleural plaques cases to reach Scotland’s higher Courts, those Courts may draw the same conclusions as the House of Lords. On 28 November 2007, the then-Cabinet Secretary for Justice, Kenny MacAskill MSP, confirmed the Scottish government’s intention to introduce a bill that would reverse the effect of Rothwell in Scotland, permitting those negligently exposed to asbestos and diagnosed with pleural plaques to continue to be able to raise an action in delict for negligence.11 The Scottish government’s rationale was as follows: Page 46 The challenge by insurers Following Royal Assent given to the Act, a number of insurers alleged that the Act was outside the legislative competence of the Scottish Parliament by virtue of s. 29(2) (d) of the Scotland Act 1998, which states that an act of the Scottish Parliament is not law in so far as any provision of the act is incompatible with any of the rights under the European Convention on Human Rights or by Community law. It was further alleged that the Act was, of itself, incompatible with Article 6 of the European Convention on Human Rights (right to a fair trial) and Article 1 of the First Protocol (right to protection of property and possessions). Insurers cited the financial cost of the Act and relied upon figures given by the ABI which estimated annual cost of the Act in Scotland at £76,000,000 to £607,000,000 The International Law Quarterly PLEuraL PLaQuES, from previous page insurer’s contractual obligations to its insureds. All that the Act did was to remove a bar (Rothwell) to a cause of action in Scotland—the claims themselves would be left to be determined by the Scottish Courts in the ordinary way. The second challenge was made under Article 1 of Protocol 1 (“A1P1”) to the Convention—the right to enjoy possessions. Insurers argued that their right to enjoy their capital resources (their “possessions”) had been unlawfully interfered with by the passing of the Act and that they would be required to maintain large reserves against future liabilities. The Outer House held, along similar lines to the Article 6 challenge, that Insurers were one step removed in that the Act could not sensibly be said to authorise individuals diagnosed with pleural plaques to withdraw funds from the insurers’ capital resources. An action must be successfully pursued before damages would be awarded, and it could not be said that the passing of the Act itself was directly responsible for any decrease in insurers’ capital resources. The insurers appealed to the Inner House of the Court of Session. The Lord President, Lord Eassie and Lord Hardie gave judgment on 12 April 2011.18 The appeal proceeded on two bases: (1) a challenge to the validity of the Act on the basis of irrationality, and (2) that the Act infringes insurers’ rights under A1P1 of the Convention. The challenge under Article 6 of the Convention was not pursued. Once again, insurers’ challenge to the validity of the Act was dismissed on all grounds. The Inner House held that the Scottish government and Parliament were entitled to take into account that the insurance industry had proceeded since 1984 on the basis that their insured were liable to meet pleural plaques claims and hence the premia charged would, in general, be reflective of that belief and understanding. Further, costs to insurers could be more widely diffused to employers through the level of premia charges. The court observed19 that the absence of any provision for compensation from public funds is inherently part of the decision Winter 2012 making capacity of the Scottish government. The legislation was framed in such a way as to make pleural plaques claims financially realistic from the standpoint of the affected individual by ensuring that liability of the negligent employer could be passed to the insurer. It is perhaps worth pointing out that not every claim based upon the Act will succeed. All the Act does is remove one procedural bar to recovery. Issues of proof, causation and liability remain in each case. In fact, issues of proof and causation may become particularly acute given that, post Rothwell, pleural plaques are not actionable in England. The pursuers will have to persuasively demonstrate that their pleural plaques resulted from exposure to asbestos whilst working in Scotland. For those individuals who worked both north and south of the border, it may be particularly difficult to prove which exposure led to the formation of the plaques. As all cases under the Act have been sisted (i.e., stayed) pending insurers’ appeal (and now to the Supreme Court), it will be some time before these issues of proof and causation are subject to judicial scrutiny. The Act is not directly aimed at insurers but at negligent employers who may have employers’ liability insurance which covers their negligent acts or omissions. The Act requires that the exposure to asbestos be shown to have occurred through the fault of the insured employer. The Inner House said that in that respect, when choosing to underwrite an employer’s liability risk, the insurer takes the risk that the law may develop in a way which results in the insured employer having a liability in circumstances which at the time of concluding the contract of insurance may not have been envisaged as giving rise to a liability.20 The Act does not, therefore, alter the insurer’s contractual liability to its insured. The liability incurred by the insurance companies will be for the negligent behaviour of the person or persons who paid their premiums. The Act simply, and importantly, differentiates the circumstances in which a claim for negligence can be brought from those in England. The english approach post Rothwell So Rothwell decided that pleural plaques were not actionable harm and thereby prevented any new claim for compensation for pleural plaques from succeeding. In February 2010, however, the government announced the creation of an extra-statutory scheme of fixed payments of £5000 for individuals who had begun but not resolved a claim for compensation for pleural plaques at the time of the House of Lords decision in 2007. The extra statutory scheme was conceived on the basis that these claimants had a legitimate expectation of recovery before that date. The scheme is only open to those individuals who had commenced proceedings or contacted their trade union before October 2007, and they must have been working in England or Wales and exposed to asbestos in the course of employment.21 A two-tier system? We are left with a situation where in one jurisdiction, actions in delict may be brought on the basis of pleural plaques and in another, the House of Lords and the government have decreed that they are not sufficient damage for the purposes of the tort of negligence. Although, constitutionally speaking, this is arguably reflective of the impact of devolution in Scotland and the right of the Scottish Parliament to legislate for its people, from an insurance perspective it creates an interesting dichotomy where insurers straddle the two jurisdictions. A nationwide employer with a single employer’s liability policy will be indemnified for its liabilities stemming from pleural plaques in Scotland but not in England. Equally, employees of that nationwide company will be able to receive compensation for their pleural plaques in Scotland but not in England, and this may bring with it attendant issues of employment law. Scotland has decided that the country should not be responsible for the negligent mistakes of private employers who have the benefit of insurance, particularly where it is said that those insurers have been proceeding for the past thirty years at least that Page 47 The International Law Quarterly PLEuraL PLaQuES, from previous page pleural plaques constitute damage for the purposes of an action in negligence. The passing of the Act was a political decision designed to assist the Scottish people. The insurers are said to be taking their appeal to the Supreme Court. Inviting the Supreme Court to interfere with constitutional rights is a brave move on the part of insurers. The issues at stake are much wider than compensation for pleural plaques.n Nina Tulloch read Scots Law at Edinburgh University and now practises as a solicitor in England and Wales at Hogan Lovells International LLP. ciation (BILA) as the winner of its annual article prize. The article was chosen from a raft of articles and presentations submitted to BILA and The BILA Journal over the course of the year. It was published in issue 122 of the Journal of the British Insurance Lawyers Association and is reprinted here by permission. Endnotes: 1 HSE Publication: Mesothelioma Mortality in Great Britain: Analyses by Geographical Area and Occupation 2005 (Table 4). 2 Id. 3 HSE report: Asbestos related disease statistics (August 2010). 4 Durham v. BAI (Run-Off) Ltd. [2010] EWCA Civ 1096. 5 ¶ 7. 6 A.Horne, Parliamentary Briefing Paper, Pleural Plaques—The Government’s Response (4 Aug. 2010). 7 Grieves and ors v. F.T. Everard and ors [2005] EWHC 88. 8 Id., ¶ 64. 9 Grieves v. FT Everard & Sons [2006] EWCA Civ 27. 10 Gibson v. McAndrew Wormald & Co. Ltd. 1998 SLT 562. 11 Axa General Ins. Ltd. & Ors v. The Lord Advocate & Ors [2011] CSIH 31. 12 Id., ¶ 12. 13 Id., ¶ 15. 14 Id., ¶ 19. 15 Axa General Ins. Ltd., Petitioners: [2009] CSOH 57. 16 Axa General Ins. Ltd. and ors, Petitioners [2010] CSOH 2. 17 Id., ¶ 230. 18 Axa General Ins. Ltd. & Ors v. The Lord Advocate & Ors [2011] CSIH 31. 19 Id., ¶ 148. 20 Id., ¶ 144. 21 Ministry of Justice briefing, “Government announces measures on asbestos related illness,” 25 Feb. 2010. This article was selected by the British Insurance Law Asso- N. Tulloch If you’ve got questions, we’ve got answers! Ask us About: • Law Firm Management– Firm structure and governance; financial and personnel management; records information management; work flow processes and more • Law Office Technology– Technology utilization, tips and trends • Law Firm Manager Training– On-site training includes: - Staff selection and supervision; - Performance measurement; - Bookkeeping functions, including trust accounting; - Proper docketing, calendaring and conflict checking; and - Overall office management responsibilities • On-site Consulting– In-depth review of the efficiency and effectiveness of the firm’s administrative practices Starting, closing or merging... LOMAS provides assistance. Or visit us on the web at www.floridabar.org/lomas Call Toll-Free 866.730.2020 The Law Office Management Assistance Service of The Florida Bar Developing Business Management Practices within the Law Firm Today to Promote Efficiency and Professionalism for the Law Firm Tomorrow Page 48 The International Law Quarterly Winter 2012 Creating Jobs and strengthening the u.s. economy Through the e Visa By Giselle Carson, Jacksonville, Florida As a result of the increased scrutiny of L-1 (Intra-Company Transferee) visas at USCIS, immigration attorneys and clients are looking at alternative visas to allow foreign skilled and talented entrepreneurs to come to the U.S. One of those visa options is the nonimmigrant E visa, which provides foreign nationals the opportunity to live, work, study and potentially gain legal permanent residency in the United States. There are three types of nonimmigrant E visas available: E-1 (for Treaty Trader); E-2 (for Investors); and E-3 (for certain Specialty Occupation Professionals from Australia). This article will focus on the E-2 visa, which is the most commonly used. the Department of State website.3 Treaties were first negotiated with Costa Rica (1852), Argentina (1854), Switzerland (1855) and Yugoslavia (1882). After World War II, a flurry of negotiation ensued between the U.S. and other nations to promote trade, and a significant number of the treaties currently supporting E visa applications came into existence. The countries most recently added to the list were Chile and Singapore in 2004. To qualify, the individual investor or employee and the E business must have the nationality of the same treaty country.4 The person’s nationality is determined by the authorities of the country of which the person claims nationality. The business’ nationality is determined by the nationality of the majority owners of the business. When the treaty business is at least 50% owned by nationals of the same treaty country, the nationality requirement is satisfied. Problems can arise when the business is less than 50% owned by nationals of the treaty country. In those situations, a careful analysis of the nationalities involved must be undertaken, and the attorney should consider creating a trust and/or restructuring the business to satisfy the nationality requirement. A business applying for E status may have only one qualifying nationality. If the owner is a dual national (other than a U.S. citizen), he/she must chose which nationality to use, taking into consideration that the E employees of the company must possess the nationality of the qualifying country and hold themselves as nationals of that country. Nationals of a treaty country who are also U.S. citizens or U.S. legal permanent residents are not considered nationals of the treaty country and cannot be counted toward determining the 50% ownership for purposes of E-2 eligibility. Page 49 Advantages of the e-2 Visa The E-2 visa is particularly useful for business owners, managers and essential skilled employees who need to remain in the U.S. for extended periods of time in furtherance of the investment. The E status has the potential of indefinite renewals as long as the business is real, operating and generating enough income to support more than the investor and his/her family. The E classification is one of the best alternatives for a foreign national to remain working in the U.S. when he/she has exhausted the allowed time in an H and/or L status. The E status can also be used by non-degree workers and for self-petitioning. Additionally, the spouse of the E investor can apply to obtain work authorization. scrutiny and inconsistencies of adjudications by consular posts around the world, coupled with the irrevocable expenses incurred by the client, can cause much stress to the applicant and his/her family. Persons eligible The Immigration and Nationality Act1 (“INA”) provides nonimmigrant E-2 classification for a national of a country with which the United States maintains an appropriate treaty of commerce and navigation and who is coming to the U.S. to develop and direct the operations of an enterprise in which the national or the petitioning company has invested, or is actively in the process of investing, a substantial amount of capital. The First step in e-2 Visa Planning In order for a foreign investor or company to apply for an E-2 visa, the U.S. must have the requisite treaty with the applicant’s country of citizenship. Without the existence of the applicable treaty, no E-2 visa application is possible. For example, the U.S. does not have treaties that support an E-2 visa with any of the BRIC countries. A list of the treaty countries that support E visa applications can be found in the Foreign Affairs Manual (“FAM”)2 and at Challenges of the e-2 Visa Application Managing the client’s expectations throughout the process of interpreting the discretionary threshold requirements to determine whether the E-2 visa is the right visa for the foreign national and his/her family can be challenging. The increased Winter 2012 The International Law Quarterly THE E VISa, from previous page can present, among other things: a personal statement of net worth prepared by a CPA; transactions showing payment of sold property or business (including proof of property ownership); bank statements crediting proceeds; lines of credits backed by personal property (not the investment business); and audited financial statements. The source of the funds must be funds in which personal assets are involved. A loan cannot be secured against the business assets at issue but can be secured against other personal assets of the investor. One of the most stressful requirements for the E visa applicant is that the investment capital must be subject to partial or total loss if the investment is not successful. Presenting evidence that a portion of the required funds are being held in escrow pending visa approval can prove that the capital is irrevocably committed to the enterprise. At the time of the application, the investor must already be operating the business, or be nearing the start of operations, not simply in the stage of signing contracts. The requirement that the business be real and operating makes it difficult for a start-up business to qualify for an E. In the case of a start-up, the foreign national may want to consider hiring a manager or assistant to operate the business while the E visa is being processed. Documents demonstrating that the business is real and operating include an occupational license; a business license/permit; utility/ telephone bills; business transaction records; advertising/business brochures; and bank statements, among other things. the cost of the business (i.e., its purchase price at fair market value). Unverified and unaudited financial statements are typically insufficient to establish the nature and status of an enterprise. In the case of a new business, the funds invested can include the purchase price and the amount spent— such as the cost of equipment, government documentation and licenses, insurance and rent—on goods and assets necessary to run the business. The value of goods transferred to the U.S. may also be considered, as long as the goods will be used for the benefit of the business. In general, the lower the cost of the enterprise, the higher, proportionately, the investment must be to meet the substantiality threshold. The FAM provides an example of how the proportionality test works. For example, an investment of 100 % or a higher percentage of the cost of the business ordinarily would automatically qualify for a small business that costs $100,000 or less. At the other extreme, an investment of $10 million in a business that costs $100 million would likely qualify, based on the sheer magnitude of the investment itself.10 In practice, clients who purchase a business for $65,000 to $75,000 and invest 110% to 120% of the cost of the business—including additional assets needed to start the business—can generally qualify for an E visa. Additional Requirements An E-2 Visa applicant must also show that: • He/she has invested or is actively in the process of investing funds that are at risk or subject to loss if the business fails.5 Loans secured with assets of the investment are not allowed. Uncommitted funds in a bank account or similar security are not considered an investment. It is permissible to place some of the investment funds committed to the enterprise in an escrow account pending visa adjudication. • The enterprise is real and operational.6 Speculative or idle investments do not qualify. • The investment is substantial and proportional to the cost of the enterprise. The percentage of the amount invested in a low-cost enterprise is expected to be higher than the percentage of amount invested in a high-cost enterprise.7 • The investment is not marginal.8 It must generate sufficient present or future income to provide a minimal living for more than the investor and his/her family. • The investor is coming to the U.S. to develop and direct the enterprise.9 • If the applicant is not the principal investor, he/she must be employed in a supervisory, executive or highly specialized capacity. Ordinary skilled and unskilled workers do not qualify. • The applicant intends to depart the U.S. when the E status terminates. Proof Under the current economic climate, failure to offer sufficient proof that the business can create and support jobs for U.S. workers is one of the most common causes of E visa denials.11 A marginal enterprise is one that does not have the present or future capacity to generate more than enough income to provide a minimal living for the investor and his/her family. In order to show that an existing business is not marginal, the investor can present: U.S. corporate income tax returns; audited financial statements; annual reports; payroll registers; W-2 and W-4 tax forms; or cancelled checks for salaries paid and/ or corresponding payroll accounts. If the foreign investor is purchasing an existing business that has posted a net operating Winter 2012 The Foreign Affairs Manual (“FAM”) notations for an E visa are very helpful. Lawyers should be sure to consult 9 FAM 41.51 and its notes on the E visa requirements when preparing the application. Threshold for substantial Investment Neither the regulations nor FAM provide a bright-line minimum investment that qualifies as substantial. The applicant must show an investment sufficient to indicate the investor’s financial commitment to the enterprise and to support the successful development of the business. The determination of whether the investment is substantial is based on the “proportionality test.” The test is a comparison between the amount of funds invested and Irrevocably Committed Funds The treaty investor must show evidence that the funds invested are at risk and show how the funds were obtained. To show source of investment, the investor Page 50 The International Law Quarterly THE E VISa, from previous page loss for many years, he/she will have great difficulty overcoming marginality. In order to show that a new business is not marginal, the investor should submit a reliable and well-developed business plan outlining how the business will grow and support U.S. jobs over a five-year period. Financial projections should be backed up by resources and information supporting how the projections were developed. An investor cannot show independent sources of income to support his/her family to demonstrate that the business is not marginal. Although not as persuasive as creating direct jobs for U.S. workers, the applicant should indicate that the business will also create and support indirect job expansion by providing commerce for other local businesses such as printers, couriers, banks, utility companies, etc. tion to facilitate communication with the consulate visa unit. For example, to process an E visa in Vancouver, the applicant schedules an interview six weeks out and then submits the E package to the consulate shortly after scheduling the interview. The package is received, logged and reviewed. If the consular officer requires additional information, he/she will request it prior to the interview. To process in London, which is one of the toughest consulates for E visa issuance, the applicant submits the specific documents for the E-2 visa. The documents must be provided in a hard binder with appropriate tabs. The application is reviewed for completeness by a member of the E Visa Unit and if information is missing, the case is returned to the applicant or legal representative for correction. Once the application is deemed complete, the case is placed in a queue for processing based on the date of receipt, which is the date the case was found to be documentarily complete. Where to Apply Whether to apply for E status in the U.S. or at the consular post is an important strategic determination that must be made after a full analysis of the facts of the case and the requirements of the applicable consular post. Although a foreign national in the U.S. can apply for a change of status to E status, in many cases it is best if the foreign national applies for an E visa at the consulate abroad because the general consensus is that the Department of State has primary jurisdiction for E visa issuance, and E classification approval by USCIS is not binding on the consular post. Unlike many other nonimmigrant visas, E petition approval by USCIS is not required in order to apply for a new E visa at a consular post. Visa applicants who obtain E visa classification in the U.S. will need to submit a new E visa application to the consulate for de novo adjudication. Factors to consider in deciding whether to apply in the U.S. or abroad include: consular processing will typically take longer than USCIS using premium process adjudication; consular posts have very specific formatting and presentation requirements that might be difficult to fulfill during the initial filing; and traveling needs. The applicant might be best served by applying at the consular post if he/she needs to travel abroad soon and/or frequently. Length of stay An E visa is typically issued for five years; however, the I-94, providing the length of stay allowed in the U.S., is given for two years at a time. In practice, a foreign national can depart the U.S. before the end of the five-year visa expiration and obtain a new I-94 providing an additional two years of authorized stay, which has the effect making the initial visa good for seven years. Extensions of stay may be applied for indefinitely, as long as the enterprise is viable and the applicant continues to meet the visa qualifications. Denial or Request for Additional evidence Consular officers indicate that a disorganized and incomplete presentation is one of the main reasons for receiving a denial or a request for additional evidence. Officers note that the majority of these cases are submitted by foreign nationals who, in order to save money, do not hire an immigration attorney. In the end, this could jeopardize their chances of obtaining a visa. Other reasons for a denial or a request for additional evidence include: • failure of the applicant to be prepared for the interview; • failure to overcome the marginality threshold; • failure to complete the DS-160 application accurately; • failure to upload the required photo and/or failure to bring an additional photo to the interview; and • failure to submit supporting documents, such as marriage and birth certificates, for dependents. Page 51 Consular Processing Tips When preparing the consulate application, it is critical to check the consulate’s website on a regular basis. Each consulate has specific requirements and filing procedures and formats that must be followed and that change on a regular basis without notice. There are more than seventy-five U.S. embassies and consulates around the world, each with its own particular requirements. Websites for each embassy, consular post, and diplomatic mission can be accessed at http://usembassy.state.gov. It is also very helpful to consult with an attorney who is familiar with the processing requirements of the post, or consult with embassy personnel, and to provide an email address on the DS-156E applica- spouse and Children A spouse, as well as unmarried children under the age of twenty-one, regardless of nationality, are allowed to enter the U.S. with the principal E visa holder and obtain E visa status. A significant benefit of the E visa is that the spouse of the principal E visa holder is able to seek employment authorization from the Department of Homeland Security; dependent children are not allowed to apply for work authorization but can attend school and travel. The spouse cannot begin working until he/she receives the employment authorization document (“EAD”). It typically takes ninety days for the EAD to be processed. Winter 2012 The International Law Quarterly THE E VISa, from previous page the range of $500,000 to $1 million and the creation of at least ten new jobs for U.S. workers can consider applying for EB-5 status which could lead to permanent residency. Like the E-2 visa, the qualifying investment for the EB-5 status must benefit the U.S. economy through the provision of goods and services to U.S. markets, and the applicant must be involved in the operation of the investment enterprise. Other options include: • Employment-based sponsorship: U.S. businesses sponsor the foreign national or his/her spouse for a legal permanent residency. • Family-based sponsorship: the E visa holder marries a U.S. citizen or lawful permanent resident or has other immediate relatives (parent, sibling, or child) who can provide sponsorship. he/she should travel on advanced parole rather than the E visa. Moreover, the E visa renewal at a consular post is unlikely to be approved. If the Application is Denied The best way to avoid a denial is to submit the best possible petition/application with objective supporting evidence. In the case of a consular application for an E visa, you should prepare the client for the interview by going over the forms, the job title and requirements, the requirements of the visa classification and the intent to depart, and any other weakness in the application and/or applicant’s history. Instruct the client to obtain the name of the interviewing officer and to pay attention to the interview questions and answers. If the visa is denied, the applicant should, immediately after the interview, write the questions and his/her answers; obtain a written denial, ideally with an explanation of the basis for the denial; and obtain the name of the interviewing officer’s supervisor. If you have a strong case and believe there has been an adjudication error or misunderstanding, you should prepare a rebuttal brief with supporting evidence and submit it to the interviewing officer for reconsideration as soon as possible. If you cannot obtain a positive adjudication from the first-line officer, consider sending a request for supervisory review to the Chief of the Nonimmigrant Visa Unit and/or the Visa Section Chief. Unfortunately, there is no right to appeal consular decisions, and at times the best approach is to let some time lapse and resubmit the application with much stronger evidence. Conclusion Despite its challenges, we are fortunate to have the E visa as an option for foreign nationals who want to come to the U.S. to live and work, helping to create jobs and strengthen our economy. I am hopeful that in the future our immigration laws will also include a more direct path for foreign entrepreneurs to obtain permanent residency in the U.S. so that they can continue to contribute to our country.n Giselle Carson is a shareholder with Marks Gray, P.A., in Jacksonville, Florida, and practices primarily in the areas of U.S. and global immigration and business, civil G. Carson litigation, wills, and estate planning. Ms. Carson was born in Cuba and immigrated to Montreal, Canada, before coming to the U.S. She is a frequent writer and lecturer on immigration and has represented clients in federal court and before federal and state agencies. She is General Counsel for the Jacksonville Regional Chamber of Commerce and a board member of the Jacksonville Bar Association. Ms. Carson can be reached at gc@ marksgray.com. Endnotes: 1 INA sec. 101(a)(15)(E). 2 9 FAM 41.51, Exhibit 1. 3 http://travel.state.gov/visa. 4 9 FAM 41.51 N2, N3.1, N.3.3; 22 C.F.R. sec. 41.51. 5 9 FAM 41.51 N8. 6 9 FAM 41.51 N9. 7 9 FAM 41.51 N10. 8 9 FAM 41.51 N11. 9 9 FAM 41.31 N12. 10 9 FAM 41.51 N10.4. 11 22 C.F.R. § 41.51(b)(1)(i)); 9 FAM 41.51 N11. 12 22 C.F.R. § 41.51; 9 FAM 41.51 N15. Intent to Depart the u.s. upon Termination of status An E visa holder should proceed with caution when applying for legal permanent residency and should consult with an immigration attorney as it could jeopardize his/her E visa renewal based on the presumption of immigrant intent and lack of intent to depart. The Immigration and Nationality Act, regulations and USCIS recognize a quasi “dual intent” for E visa holders. The Department of State also recognizes a limited “dual intent” but much more narrowly. E visa holders must show, primarily via a written statement, an unequivocal intent to depart the U.S. upon termination of their status and are not required to maintain a residence or significant ties abroad.12 USCIS should not deny an extension of stay or change of status to E classification solely on the basis of an approved permanent labor certification or filed or approved immigrant petition. After filing for adjustment of status, the nonimmigrant intent becomes harder to justify. There is, however, a USCIS memorandum that supports the approval of an extension of E status after an adjustment of status has been filed for the investor. If the investor needs to travel abroad, however, Legal Permanent Resident status The E-2 visa is classified as a nonimmigrant visa whereby the investor must have intent to return to his/her home country once the business obligations have concluded. Not surprisingly, after living and working in the U.S. and spending significant time, money and effort on successful businesses, many foreign nationals want to stay here. There is, however, no clear path from E status to legal permanent residency. Recently, with the development of more favorable EB-5 (Immigrant Investor Program) rules, E visa holders whose businesses can show financial investments in Page 52 The International Law Quarterly Winter 2012 The Redesigned u.n. Internal Justice system: Providing Administrative Justice to International Civil Servants? By Neil Fishman, The Hague Since the establishment of the International Telecommunication Union in 1865, States have created international organizations in order to cooperate with each other and achieve common goals. International organizations are corporate bodies that have a range of purposes (political, technical and functional) and functions (i.e., the maintenance of international peace and security, the promotion of human rights, economic development and international trade). Both international law and States have recognized that these organizations possess international legal personality.1 Therefore, they are generally provided immunity from the jurisdiction of member States. For instance, Article 105 of the United Nations (“U.N.”) Charter states that the U.N. “shall enjoy in the territories of each of its Members such privileges and immunities as are necessary for the fulfillment of its purposes.” Due to the founding of the United Nations in 1945, the second half of the twentieth century was marked by a proliferation of international organizations in both size and number and, likewise, a proliferation in the number of employees who work for them.2 For instance, in the early twentieth century, the League of Nations employed a mere few hundred employees; today, the U.N. Secretariat alone employs over 44,000 staff members.3 In light of the immunity of the United Nations and other international organizations from national courts in their member States, two important issues arise: (1) What is the system of law that governs the employment relationship and disputes arising between the United Nations (and other international organizations) and its staff members? (2) Does this system of law provide effective justice to U.N. employees? ternal law of the organization governs the employment relationship between the international organization and its staff members. The national labor law of the country in which the organization operates ordinarily has no binding effect on this relationship.4 This internal law is composed of the organization’s charter or statute, its staff regulations and staff rules, other administrative issuances and, of course, the staff member’s employment contract. While the organization’s internal law is the lex specialis that forms and governs the employment relationship, this law is also guided (and sometimes bound) by aspects of treaty law, customary international rules, general principles, and judicial decisions relating to fields such as contract law, labor law, administrative law, public international law and human rights law (the lex generalis). Taken as a whole, this system of law is frequently referred to as the law of the international civil service.5 An organization’s staff regulations and staff rules contain the fundamental conditions of service and the basic rights, duties and obligations of an organization’s staff members. They also embody the basic principles of personnel policy for the staffing and administration of the organization. In the U.N., the General Assembly—as the principal law-making body of the organization—establishes the staff regulations setting out the broad principles of the employment relationship. In accordance with these regulations, the Secretary-General, as the head of the U.N. Secretariat and its “chief administrative officer,” provides the staff rules, which are more specific in nature.6 The Secretary-General is also authorized to create procedures—in the form of administrative issuances—based on these staff regulations and staff rules. taken by the organization with regard to his or her individual employment relationship, the staff member may have resort to an international administrative tribunal. There are two main systems of international administrative justice today: (1) the United Nations system of administration of justice; and (2) the International Labour Organization (ILO) Administrative Tribunal, which dates from the League of Nations and is the older of the two systems. The ILO Tribunal, by Article II of its statute, permits any international organization approved by the ILO’s Governing Body to recognize its jurisdiction, and it considers complaints by a staff member against such an organization alleging the non-observance of the staff member’s contract or its staff regulations and staff rules.7 The U.N. system of administration of justice is a new, decentralized system for the United Nations that entered into operation on 1 July 2009.8 The first step for a staff member challenging an administrative decision in this redesigned system is a request to the Management Evaluation Unit (“MEU”), a unit contained within the U.N.’s Office of Human Resources Management. The MEU conducts a factual and legal evaluation of the contested decision, decides whether to uphold or overturn the challenged decision and provides the staff member with a reasoned response regarding the outcome of its review.9 If the staff member is not satisfied with the result of the management evaluation, he or she may file an application with the U.N. Dispute Tribunal (“UNDT”), which serves as the U.N.’s first-instance court for administrative justice matters. Major categories of disputes include benefits/entitlements, the initial appointment of the staff member, misconduct/disciplinary matters, classification of employment posts and staff members, and issues related to a staff member’s separation from U.N. service. Once a staff member submits an application, he or she Page 53 The Internal Law of the Organization With regard to the first issue, the inWinter 2012 International Administrative Tribunals If a staff member disputes a decision The International Law Quarterly u.N INTErNaL JuSTICE SYSTEM, from previous page then enters into formal litigation against the U.N. Secretary-General at the UNDT. Cases may often be complex and require case-management hearings, pre-hearing motions, and oral hearings at one of the UNDT’s locations (New York, Geneva or Nairobi). Thereafter, the UNDT, by means of a sole judge, renders a judgment on the case. A major innovation of the redesigned U.N. system is the establishment of the United Nations Appeals Tribunal (“UNAT”), which empowers either the staff member or the Secretary-General to file an appeal of a UNDT judgment. The UNAT ordinarily sits as a panel of three judges and decides matters by majority vote.10 The UNAT is competent to review appeals that allege, inter alia, that the UNDT exceeded or failed to exercise its jurisdiction, erred on a question of law, committed an error in procedure such as to affect the decision of the case, or erred on a question of fact, resulting in a manifestly unreasonable decision.11 The unDT/unAT: Providing effective Justice to u.n. staff Members? Cynically it has been remarked that international administrative tribunals are nothing more “than a fig leaf of justice, a woeful pretence of due process to hide the fact that where one works for an international organization, the employment relationship is for all intents and purposes legally unregulated.”12 Recent UNDT/UNAT jurisprudence and activity, however, reveals that this statement is false. On the contrary, the U.N. administrative tribunals have already proven their judicial independence, professionalism and efficiency, despite a heavy caseload and budgetary restraints. Moreover, the UNDT/ UNAT’s early activity demonstrates its readiness to (1) overrule the U.N. Secretary-General’s administrative authority where his or her decisions have been procedurally flawed or unlawful, and (2) foster proper professional standards in all legal representatives before it—irrespective of which party they represent.13 Page 54 Perhaps the best known example so far of the UNDT’s judicial independence is the Bertucci judgment of 3 May 2010, in which a U.N. staff member applied for the post of Assistant Secretary-General in the Department of Economic and Social Affairs.14 After being interviewed and short-listed for the post, Bertucci became the subject of various widely publicized investigations. These ultimately did not result in any finding of impropriety, but Bertucci—due at least in part to the publicity—was not selected for the post. Instead, the U.N. hired another candidate without allegedly ever having interviewed that person for the post as was required by applicable U.N. procedures. Nevertheless, in filings before the UNDT, the Secretary-General’s legal representatives first asserted, and later departed from the assertion, that the appointee was interviewed for the post. The SecretaryGeneral’s office refused to comply, on the basis of confidentiality, with a court order to produce relevant documents.15 As a result, in a strongly worded opinion, the UNDT took an adverse inference against the U.N. Administration, found that the U.N. failed to follow its procedures with respect to the recruit, and found in favor of Bertucci by default judgment.16 On 11 March 2011, however, the UNAT set aside the default judgment because it determined that the UNDT had violated the Secretary-General’s right to a hearing and had exceeded its competence. The case was remanded to the UNDT President for further consideration.17 Nevertheless, the UNAT expressed its “astonish[ment]” at the U.N. administration’s contradictory statements during the proceedings and noted that it was empowered to draw “appropriate conclusions” from the administration’s refusal to execute the UNDT’s order to disclose evidence to the court.18 Despite the UNAT’s reversal of the lower court’s default judgment, the Bertucci case is strong evidence of the judicial independence, professionalism and competence of the judges of the redesigned U.N. system of administration of justice. Bertucci also demonstrates that the UNDT is prepared to overrule the U.N.’s administrative authority where there has been a violation of its internal law—even in politicized cases. Notwithstanding the above, there is still much work to be done to provide truly effective justice to staff members of international organizations. Staff members who wish to challenge administrative decisions face an uphill battle: proceedings are complex, experienced international civil service lawyers are costly, and most importantly, the limited resources of the U.N. Office of Staff Legal Assistance means that not all meritorious litigants will receive free legal representation. Therefore, fears of an “inequality of arms” are not ill-founded. In addition, “non-staff members” of the U.N., such as consultants or interns, have no recourse to the UNDT/UNAT even though they may participate in the core work of the organization and play an important part in its operations. Finally, the UNDT/UNAT is thus far disinclined to reinstate staff members who have been separated from U.N. service, and financial remedies may not properly compensate staff members for the professional harm that was caused by an unlawful decision. Nevertheless, the Bertucci case is but one example of the growing body of evidence revealing that international administrative tribunals are now more than a mere “fig leaf” of justice and may soon constitute a “fig tree” for international civil servants. Neil Fishman, LL.M. (Leiden), J.D. (Florida International), is assistant legal officer, Special Tribunal for Lebanon (STL), and adjunct lecturer of law, The Hague University of Applied Sciences. He may be contacted at
[email protected]. Mr. Fishman previously served as a legal consultant to the U.N.-International Criminal Tribunal for the former Yugoslavia (UN-ICTY) Staff Association. The views expressed herein are those of the author alone and do not necessarily reflect the views of the STL or any other organization with which he is or has been associated. Endnotes: 1 See Reparation for Injuries Suffered in the Service of the United Nations, 1949 I.C.J. Reports 174, 185-87 (11 April). 2 See Yearbook of International Organizations, The International Law Quarterly Winter 2012 u.N. INTErNaL JuSTICE SYSTEM, from previous page App. 3: Table 1, Number of International Organizations in this Edition by Type (2004/2005), available at http://www.uia.org/statistics/organizations/ types-oldstyle_2003.pdf. (The Appendix lists 245 “conventional international bodies” and 1743 “other international bodies” as of 2005. Please note that this number does not include non-governmental bodies such as Human Rights Watch that were not established by States.) 3 4 5 See U.N. Doc. A/65/350 at 10, ¶ 2. See C.F. aMerasInghe, 1 the law oF the InternaCIvIl servICe 9 (1994). 7 The ILO Tribunal adjudicates cases arising from over 50 international organizations such as the International Criminal Court, Interpol, the World Health Organization, and the World Trade Organization, to name but a few. See the ILO Administrative Tribunal website, http://www.ilo.org/public/english/tribunal. 8 See the U.N.’s website, http://www.un.org/en/oaj/ unjs/. 9 See Report of the Secretary-General, Administration of Justice, ¶5, U.N. Doc. A/66/275 (8 Aug. 2011). 10 See U.N. Doc. A/Res/63/253 (17 March 2009), U.N.A.T. Statute, art. 10. 11 Id., U.N.A.T. Statute, art. 2. 12 Matthew Parish, An Essay on the Accountability of International Organizations, Int’l org. l. rev. 277, 290 (2010). 13 See the U.N.’s Activity Reports of the Office of Administration of Justice for leading jurisprudence, available at http://www.un.org/en/oaj/unjs/resource. shtml. 14 U.N. Dispute Tribunal, Bertucci v. SecretaryGeneral of the United Nations, Judgment No. UNDT/2010/080, ¶ 1-2. 15 Id., ¶ 12. 16 Id., ¶ 30. 17 U.N. Appeals Tribunal, Bertucci v. SecretaryGeneral of the United Nations, Judgment No. 2011UNAT-12 , 11 March 2011, ¶ 52. 18 Id., ¶¶ 44, 53. tIonal Id. 6 See United Nations Staff Regulations and Staff Rules, U.N. Doc. ST/SGB/2011/1 at iii. Section CLE at Annual bar Convention Current Trends In Arbitration (1367R) Friday, June 22, 2012 Gaylord Palms Resort & Convention Center, Orlando/Kissimmee Program Chair: Jennifer R. Diaz, Becker & Poliakoff, Coral Gables CLE Credit: 1.50 hours, .50 ethics / 1.50 hours International Law Certification 10:25 a.m. – 10:30 a.m. Introductions Moderator: Ava Borrasso, Astigarraga Davis Mullins & Grossman P.A., Miami 10:30 a.m. – 10:50 a.m. Hot Topics & Annual Developments Richard Lorenzo, ILS Incoming Chair, Hogan Lovells US LLP, Miami Mr. Lorenzo will cover a variety of hot topics and recent developments in the field of arbitration. 10:50 a.m. – 11:15 a.m. Ethical Considerations Eduardo Palmer, Eduardo Palmer P.A., Coral Gables Mr. Palmer will address recent legislative developments in the State of Florida. In addition, Mr. Palmer will provide an overview of common ethical considerations for practitioners in arbitration proceedings and related case law. 11:15 a.m. – 11:35 a.m. Developments in Domestic, International and Class Action Arbitration – Overview of Case Law John H. Rooney, Jr., John H. Rooney Jr., P.A., Miami Mr. Rooney will address key recent legal decisions in the areas of domestic, international and class action arbitration. He will provide an overview of the most significant decisions. 11:35 a.m. – 11:45 a.m. Questions and Answers Richard Lorenzo, ILS Incoming Chair, Hogan Lovells US LLP, Miami Eduardo Palmer, Eduardo Palmer P.A., Coral Gables John H. Rooney, Jr., John H. Rooney Jr., P.A., Miami Register for this program through Annual Bar Convention Registration. See The Florida Bar website, www.floridabar.org, for more information. Winter 2012 The International Law Quarterly Page 55 high-speed Public Policy for Algae-Based Biofuel as a Viable energy Alternative Improving Florida-China Relations Through Sustainable Collaboration By Nadia B. ahmad, aurora, Colorado Introduction With Florida’s rising population and skyrocketing energy consumption, a noose hangs around the neck of the state’s energy supply as it inches closer to a breaking point. Florida’s residential electricity demand is one of the highest in the nation.1 Census data indicate that Florida remains one of the fastest-growing states of the past decade, adding 2.8 million people.2 Creating sustainable energy alternatives is no longer just trendy, but imperative. U.S. Senator Bill Nelson (D-FL) introduced legislation in the 2011 congressional session to extend a tax incentive program to algae-based biofuel producers, an incentive that is already afforded other cellulosic biofuel producers.3 Senator Nelson’s legislation seeks to curb dependence on foreign oil through S. 748, the Algae-Based Renewable Fuel Promotion Act of 2011.4 The language of the companion House bill is straightforward: “To amend the Internal Revenue Code of 1986 to expand the definition of cellulosic biofuel to include algae-based biofuel for purposes of the cellulosic biofuel producer credit and the special allowance for cellulosic biofuel plant property.”5 This bill should be considered a momentous stepping-stone to more energy options for Americans. Technology for the production of energy from algae is proliferating. Considering the short life span of algae and its replication capacities—and the high-return on investment for algae-based biofuel—the energy possibilities are limitless. Yet, the technology remains stagnant and underdeveloped in certain respects. The potential for algae-based biofuel will not be fully realized without considerable political will and scientific expertise. This paper will explore whether algae-based biofuel is a viable alternative energy option and how the proposed federal tax incentive and other Page 56 governmental and educational programs could help propel its development. No current regulation exists specifically with respect to algae-based biofuel as it falls under the broad category of cellulosic biofuels. This paper suggests public policy imperatives in Florida, in concert with the proposed algae-based biofuel tax credit, to address the economic issue of having this renewable energy alternative become sustainable and less costly in order to encourage its use on a broader scale. Floridians cannot do it alone. Policy-makers in Florida and in China—a country also making strides in the algae-based biofuel sector—will need to work together. Other U.S. states might take a lesson from Florida and view China as a natural strategic partner. Algae-Based Biofuel: Ripe for harvesting In 2008, CNN lauded algae-based biofuel as “the ultimate in renewable energy.”6 In the past, algae-based biofuels have been eyed with suspicion in the U.S. and justifiably so, but that perception is changing as the technology evolves. Recent reports on algae-based biofuels offer mixed conclusions. Mary Rosenthal, who leads the 170-member Algal Biomass Organization (“ABO”), believes algae-based biofuels could be cost competitive with oil in 7 years. Rosenthal tells Solve Climate News, “We’re hoping to be at parity with fossilfuel based petroleum in the year 2017 or 2018, with the idea that we will be at several billions of gallons.”7 The University of California at Berkeley’s Energy Biosciences Institute (“EBI”) reports that “it would take a decade of testing to determine if algae companies can produce affordable biofuels in mass quantities.”8 With present technology, algae-based biofuels are cost prohibitive. Costs per barrel of algae biofuel range from $140 a barrel to $900 per barrel.9 Authors of the EBI report, Nigel Quinn and Tryg Lundquist of the Lawrence Berkeley National Laboratory (“LBNL”), conclude, “Algae oil production will be neither quick nor plentiful—ten years is a reasonable projection for the R&D to allow a conclusion about the ability to achieve relatively low-cost algae biomass and oil production, at least for specific locations.”10 After a ten-year hiatus, even the U.S. government is stepping up research and development for algae-based biofuel. The federal government and the private sector have recognized that the location of algae processing plants is crucial. For example, operations next to carbon-producing power plants, or manufacturing plants, could sequester the CO2 that is created and use those emissions to help grow the algae, which need CO2 for photosynthesis.11 In Earth: The Sequel, Fred Krupp, President of the Environmental Defense Fund, and staff member Miriam Horn, delve into the issues of algae-based biofuel with such clarity and conviction that even the strongest skeptics would be persuaded that algae-based biofuels are a sustainable energy option. Space constraints prevent a detailed elaboration as to the science of synthesizing algae into fuel, but this book is absolutely spectacular in laying out the wonder of what the authors dub “voracious algae.”12 These microscopic, single-cell creatures are “high-energy orioles ideal for making biodiesel—producing 30 times more vegetable oil per acre than sunflowers or rapeseed—and are rich in carbohydrates that can become ethanol and proteins for animal feed.”13 Algae also filter air pollutants and neutralize acids “in splitting nitrogen oxides—precursors to smog—into harmless nitrogen and oxygen.”14 In fact, they are the “world’s most efficient converters of carbon dioxide to oxygen and biomass.”15 From a scientific perspective, Winter 2012 The International Law Quarterly aLGaE-BaSED BIOFuEL, from previous page algae are ideal for production as biofuel because they “don’t need to leaf, flower, produce seeds, or bear fruit.”16 Algae consume carbon dioxide and divide it.17 The largest caveat in large-scale algae biofuel production is “finding the right strain of algae that will produce reliably— and cheaply—at high yields.”18 The goal is to “at least double biomass and oil productivity through strain selection and genetic modification.”19 ABO’s head, Mary Rosenthal, who spent more than twenty years in corporate work, dismisses “any suggestion that the technology may not be poised for prime time.”20 Rosenthal insists that the “technology is mature. We’re going through the same nascent issues of any emerging industry—where you’re going from lab to pilot, from pilot to scale.”21 More than one hundred startups are working towards harnessing algae as a costeffective, sustainable biofuel.22 With bold innovators and investors, algae-based biofuel could be the greatest energy invention since the light bulb. by Senator Nelson would go a long way towards encouraging development of the scientific and business methodology required to make the vision for this renewable energy a reality. During a 2010 trip to southwest Florida to tout the Algae-Based Renewable Fuel Promotion Act of 2011, Senator Nelson emphasized that algaebased fuels can help reduce America’s dependence on foreign oil and also create new jobs in a weak economy.24 “I want you to succeed and I want you to succeed big time,” Nelson told executives.25 The tax incentive would amount to $1.01 per gallon of biofuel produced using algae and would cost $500,000 before it expired in 2013, Nelson said.26 The tax break would place algae-based biofuel producers on equal tax footing with competitors who use cellulose to produce fuel and are already taking advantage of the credit.27 Algenol, an algae-based biofuel producer in Ft. Myers, Florida, plans to construct a pilot produc- Tax Incentives under the Algae-Based Renewable Fuel Promotion Act Of 2011 Initially the author sought to explore policy options for wind energy in her home state of Florida, but research and written correspondence with the offices of U.S. Senator Marco Rubio (R-FL) and Florida legislator Scott Plakon (R)23 suggested that wind as an alternative energy option in Florida should be given limited credence despite the state’s vast shoreline and peninsular geography. Florida’s natural coastline is, however, conducive for algae-based bio-fuel production. Working with federal, state, and municipal bodies, algae is ripe for picking and being converted to biofuel in Florida. The tax incentive legislation introduced Winter 2012 The International Law Quarterly Page 57 aLGaE-BaSED BIOFuEL, from previous page tion plant on forty acres in Lee County where the company already has its offices and research labs.28 Algenol executives applauded the proposed legislation. Industry insiders are concerned that the tax incentive legislation can take the prospects for algae-based energy only so far. Experts hope for longer-term commitments from the government with respect to tax incentives and for industry support by way of trade and commerce. production and consumption in such a manner as to reduce the inefficiencies and external cost. In this case the tax is not neutral, but nonetheless desirable from society’s point of view.31 power capacity from renewables could reach 400 gigawatts by 2020, nearly triple the 135 gigawatts existing in 2006, with hydro, wind, biomass, and solar PV power making the greatest contributions. ... Achieving these outcomes will depend on domestic industry development, the availability of skilled personnel, technology cost reductions, continued a g g r e s s i v e g o v e r n m e n t p o l i c y, appropriate pricing levels, and allowance for distributed power generation by electric utilities. Given China’s strong commitment to becoming a world leader in renewable manufacturing, as well as concerns about energy security, power shortages, air pollution and climate change, the future of renewable energy in China appears bright.32 Tax Incentives for energy Production Security of energy supply presents a number of issues. The Organisation for Economic Co-Operation and Development (“OECD”) was created pursuant to Article I of the Convention signed in Paris in 1960 and enacted in 1961 to effectuate economic progress among member nations on a global platform. OECD’s three primary policies are designed: (1) “to achieve the highest sustainable economic growth and employment and a rising standard of living in Member countries, while maintaining financial stability, and thus to contribute to the development of the world economy;” (2) “to contribute to sound economic expansion in Member as well as non-member countries in the process of economic development;” and (3) “to contribute to the expansion of world trade on a multilateral, non-discriminatory basis in accordance with international obligations.”29 The International Energy Agency’s report Taxing Energy: Why and How indicates that OECD countries have “a continuing concern about security of energy supply, which . . . include[s] energy security defined as self-sufficiency, wartime capability, minimization of adjustment lags, reduced import dependency (especially oil dependency), and price stability.”30 The report states: The externalities and inefficiencies that exist in energy pricing can be corrected or reduced by taxes. Such remedial taxes should be effective, equitable, and without unintended side effects. . . . Where externalities and inefficient pricing occur, however, attacks can be used deliberately to alter investment, Page 58 While the Algae-Based Renewable Fuel Promotion Act of 2011 provides tax incentives to algae-based biofuel producers, the tax incentive is in some respects a tax disincentive to traditional energy producers like oil and gas. Innovative tax strategies such as those embedded in the Act could revolutionize how alternative energy is now viewed, making algae biofuel an energy sector mover and shaker. Florida-China Collaboration to Improve sustainable Technology and Business In order for the tax incentive for algaebased biofuel producers to cement algaebased biofuel as a sustainable energy resource, there must be collaboration with the international community. Given the influx of Chinese businesspersons and businesses in parts of Florida—namely Tampa, Miami, and Orlando—the state would be well served to create and foster a stronger relationship with China and its constituents. In the “new” China, engineers developing biofuel technologies are more mindful of the rural poor and those living in the countryside. The Chinese excel in engineering and harvesting energy from natural resources other than simply petroleum, natural gas, and coal. China’s future economy and its burgeoning population depend on its ability to develop better alternatives to fossil fuels. Sustainable energy is not just another rogue idea in China. Sustainable energy is at the center of China’s future and continued growth. The year 2030 is projected as the year China will trump all nations in terms of its economy and growth. Right now it is on pace to do so. In Powering China’s Development: The Role of Renewable Energy, Eric Martinot and Li Junfeng write: It is likely that China will meet and even exceed its renewable energy development targets for 2020. Total By forging a deeper alliance with China over trade missions and energy policies, Florida could quite possibly help preserve its own rustic beauty, meet growing energy demands and hopefully usher in a new era in the development of sustainable energy in the United States. Former U.S. Representative and 1978 gubernatorial candidate Lou Frey founded the Lou Frey Institute of Politics and Government at the University of Central Florida. He often coordinates educational programs with former Florida Governor and U.S. Senator Bob Graham and other leading legislators, policy-makers and legal experts. In the past, the Lou Frey Institute has conducted symposiums on alternative energy and China. The Spring 2011 Symposium was entitled, “The U.S. & China: What does the Future Hold?” The Center would be an excellent forum to discuss further public policy possibilities for enhancing and developing algae-based biofuel as a sustainable energy and for encouraging cooperation with the Chinese. Florida universities could take the lead in research with funding from private companies like Algenol and the state and federal governments. In fact, the University of Florida, Florida State University, the University of Central Florida, the University of Miami, and the University of South Florida already have exchange programs with Chinese uniWinter 2012 The International Law Quarterly aLGaE-BaSED BIOFuEL, from previous page versities and think tanks to further research. In October 2007, the Greater Tampa Chamber of Commerce, in conjunction with the Chinese Chamber of Commerce, conducted a trade mission to the Chinese cities of Guangzhou, Beijing, and Shanghai.33 Since 2007, xenophobic public policies have forestalled some business initiatives between Floridians and the Chinese. Now would be an excellent time to reinvigorate those halted efforts. To end the dependence on foreign oil will require Floridians to be willing to work with foreign nationals, businesses, and universities to gain the technological expertise, business acumen, and scientific know-how to rid Florida of its addiction to foreign oil. Conclusion In energy regulation, as in the law, there are no easy answers. With scientific expertise and political willpower, algae biofuels are ripe for harvesting in the energy sector. Federal tax incentives could be gamechangers for algae-based biofuel technology in terms of developing a long-term energy strategy that reduces high energy prices and our dependency on foreign oil without harming Florida’s environment or coastal economy. Even if this appears to be a case of “easier said than done,” Floridians have their backs against the wall in the energy sector. With its population rate continuing to rise, Florida has no option but to consider algae-based biofuel. n Nadia B. Ahmad is pursuing an LL.M in environmental and n a t u r a l re s o u rc e s law and policy at the University of Denver Sturm College of Law. She is admitted to The Florida Bar and practiced in Florida for five years prior to N. Ahmad moving to Colorado. Ms. Ahmed graduated from the University of California at Berkeley with high honors in comparative literature with language emphases in English and Latin. At the University of Florida Levin College of Law, she was a Virgil Hawkins Fellowship recipient and served as Assistant Editor-in-Chief of The Florida Journal of International Law. 1 Florida Energy Workforce Consortium, “About Us,” http://getintoenergyflorida.com/about.html (accessed 12 Aug. 2011). 2 L. Parker, Florida Growth Not So Slow After All, aol news, 24 Dec. 2010, http://www.aolnews. com/2010/12/24/florida-population-growth-notso-slow-after-all-census-shows/ (accessed 12 Aug. 2011). 3 Email from the office of Senator Bill Nelson (29 July 2011) (on file with author). 4 Id. 5 Text of H.R. 4168 [111th]: Algae-based Renewable Fuel Promotion Act of 2010 (15 Nov. 2010), available at http://www.govtrack.us/congress/billtext. xpd?bill=h111-4168. 6 M. Walton, Algae: “The Ultimate in Renewable Energy,” CNN, 4 Oct. 2008, http://articles.cnn. com/2008-04-01/tech/algae.oil_1_algae-researchfossil-fuels-nrel/2?_s=PM:TECH (accessed 9 Aug. 2011). 7 S. Feldman, Algae Fuel Inches Toward Price Endnotes: Parity with Oil, solveClIMate news, 22 Nov. 2010, http://solveclimatenews.com/news/20101122/algaefuel-inches-toward-price-parity-oil (accessed 10 Aug. 2011). 8 Id. 9 Id. 10 Id. 11 Walton, supra note 6. 12 Fred Krupp & MIrIaM horn, earth: the sequel -- the raCe to reInvent energy and stop gloBal warMIng 89-139 (2008). 13 Id. 14 Id. 15 Id. 16 Id. 17 Id. 18 Feldman, supra note 7. 19 Id. 20 Id. 21 Id. 22 Id. 23 Email from J. Marquez, the Office of Rep. Plakon, Longwood, Fla. (22 July 2011) (on file with author). 24 Algol Biomass Organization, Sen. Bill Nelson touts algae-based fuel at south Lee plant, 26 Oct. 2010, http://www.algalbiomass.org/news/1919/senbill-nelson-touts-algae-based-fuel-at-south-lee-plant/ (accessed 12 Aug. 2011). 25 Id. 26 Id. 27 Id. 28 Id. 29 Int’l Energy Agency [IEA], Taxing Energy: Why and How, at 141 (1993). 30 Id. 31 Id. 32 e. MartInot & l. JunFeng, worldwatCh InstItute, powerIng ChIna’s developMent: the role oF renewaBle energy 1-46 (2007). 33 Greater Tampa Chamber of Commerce, China Outbound Trade Mission, Oct. 2007, http://www. tampachamber.com/files/china2007missionregistrationform.pdf (accessed 20 July 2011). THE FLORIDA BAR 24/7 Online & Downloadable CLe FloridaBarCLE For the Bar, By the Bar www.floridabar.org/CLE Winter 2012 The International Law Quarterly Page 59 CHRISTOPHeR x, from page 1 tion of evidence to the discovery available under The Hague Evidence Convention. for obtaining documents and information located in a foreign signatory country. Moreover, the Supreme Court gave little deference to the French blocking statute, stating, “It is well settled that such [blocking] statutes do not deprive an American court of the power to order a party subject to its jurisdiction to produce evidence, even though the act of production may violate that statute,” and holding that “American courts are not required to adhere blindly to the directives of such a statute.”3 Rather, the Supreme Court directed lower courts to undertake a case-by-case comity analysis in order to determine in each situation whether it would be appropriate to resort to The Hague Evidence Convention procedures. The existence of a blocking statute such as France’s “is relevant to the Court’s particularized comity analysis only to the extent that its terms and its enforcement identify the nature of the sovereign interests in non disclosure of specific kinds of material.”4 The French Blocking statute: A means by which French companies could avoid compliance with u.s.-style discovery requests France, the U.S. and multiple other countries ratified The Hague Evidence Convention of 18 March 1970, which entered into force in 1972 in the U.S. and 1974 in France. This Convention prescribes means by which a judicial authority in one Contracting Country may request evidence located in another Contracting Country. When it ratified The Hague Evidence Convention, France decided, in accordance with Article 23 (and together with many other European countries), that it would not execute letters of request issued for the purpose of obtaining “pre-trial discovery of documents.” On 19 January 1987, France limited its Article 23 reservation declaring that it does not apply “when the requested documents are enumerated limitatively in the letter of request and have a direct and precise link with the object of the procedure.” Despite the accession of the U.S. to The Hague Evidence Convention, U.S. courts never limited parties seeking discovery to the methods allowed by this Convention and instead permitted them to obtain evidence from French companies in accordance with the broader discovery available under the Federal Rules. French companies perceived such discovery as abusive and, in 1980, the French legislature enacted a blocking statute prohibiting anyone, under threat of criminal sanction, to “request, search for, or communicate, in writing, orally or in any other form, documents or information of an economic, commercial, industrial, financial or technical nature for the purposes of constituting evidence in view of foreign judicial or administrative proceedings or in relation thereto,” except when such communication is authorised pursuant to an international treaty or regulation, such as The Hague Evidence Convention.1 The goal of this criminal statute, written broadly to encompass all types of docuPage 60 When the likelihood of prosecution became a reality: France’s first criminal conviction under the blocking statute ments and information, was to provide French companies with a legal basis for refusing to comply with U.S. discovery requests under the Federal Rules. Nonetheless, French criminal courts did not convict anyone under this statute until 2007, which is one of the reasons U.S. courts historically cited for giving little heed to the French law. On 12 December 2007, the Criminal Chamber of the French Supreme Court upheld a decision in which the Paris Court of Appeal ordered a French lawyer, Maître Christopher X, to pay 10,000 Euros for violating the French blocking statute.5 This French Supreme Court decision was handed down in the larger case, Executive Life, in which the California Insurance Department sued French mutual insurer MAAF and other French corporations in U.S. federal court for fraud in connection with the 1991 purchase of Executive Life Insurance Company. In April and December 2000, the court issued a number of requests for evidence under The Hague Evidence Convention to obtain from MAAF documents located in France relating to the allegedly fraudulent purchase. The French lawyer, agent of the American attorney representing the California Insurance Department, took the initiative to call an ex-director of MAAF. Winter 2012 The 1987 u.s. supreme Court decision in Aerospatiale: The hague evidence Convention does not pre-empt the Federal Rules In 1987 the approach taken by U.S. lower courts was upheld by the U.S. Supreme Court in Société Nationale Industrielle Aerospatiale v. U.S. District Court.2 In Aerospatiale the High Court ruled that The Hague Evidence Convention did not provide exclusive or mandatory procedures The International Law Quarterly CHRISTOPHeR x, from preceding page According to the Paris Court of Appeal, during this call the French lawyer alleged that the members of MAAF’s board of directors had not been properly informed at the time of the purchase. In other words, “he told a lie in order to get to the truth.” Thereafter, MAAF filed a criminal complaint against the French lawyer for violation of the French blocking statute. The Paris Court of Appeal held that the French lawyer did not solely approach, in a neutral manner, individuals whose testimony could have been obtained in accordance with the provisions of The Hague Evidence Convention. To the contrary, it held that he had sought, without due authorisation, economic, commercial or financial information aimed at constituting evidence, because the information obtained could enable the plaintiff to select the ex-director as a witness and to guide his future testimony. The Paris Court of Appeal therefore found the French lawyer guilty of violating the French blocking statute and sentenced him to pay a fine of 10,000 Euros. The convicted lawyer thereafter challenged this decision in the French Supreme Court alleging, inter alia, that he never solicited the information given by the ex-director, which, he alleged, had been provided spontaneously. He also claimed that in placing the call, he attempted only to obtain the ex-director’s consent for giving testimony, as a person appointed as Commissioner under Article 17 of The Hague Evidence Convention may not use compulsion to force a witness to testify. The Criminal Chamber of the French Supreme Court disregarded these arguments and upheld the Court of Appeal decision. This unprecedented decision made it clear that the risks of prosecution and conviction under the French blocking statute are real. The Christopher X decision was shortly followed by another decision from the Criminal Chamber of the French Supreme Court on 30 January 2008. Although it upheld the lower court’s refusal to prosecute because of insufficient charges, the French Supreme Court did not award the latter’s position according to which the French blocking statute does not apply to the “communication to French people who Winter 2012 request them, of contractual documents held on the U.S. territory by American attorneys.” The French Supreme Court confirmed that the French blocking statute applies even if the requested documents are located in the U.S. as long as, pursuant to Articles 113-7 and 113-8 of the French Criminal Code, there is a French victim at the time the offence is committed and this French victim files a complaint with the French criminal authorities.6 use the Federal Rules and are not bound by the strictures of discovery under The Hague Evidence Convention. Strauss v. Credit Lyonnais The first court after Christopher X to consider the import of the French blocking statute was the Federal District Court for the Eastern District of New York in its decision of 10 March 2008 in Strauss v. Credit Lyonnais S.A.8 In this case, the victims (and their estates) of multiple terrorist attacks allegedly perpetrated by Hamas in Israel alleged that, among others, Crédit Lyonnais, a financial institution incorporated and headquartered in France, had provided material support to terrorists in violation of U.S. antiterrorism laws. The plaintiffs sought discovery from Crédit Lyonnais under the Federal Rules, and Crédit Lyonnais moved for a protective order compelling plaintiffs to seek discovery through The Hague Evidence Convention and excusing it from discovery that Crédit Lyonnais claimed was protected under the French blocking statute.9 To determine whether plaintiffs should have to seek discovery only under The Hague Evidence Convention, the court applied factors enumerated in Paragraph Despite Christopher X, u.s. courts refuse to allow the French blocking statute to deny parties’ use of the Federal Rules to obtain discovery: The recent conviction by the French Supreme Court in Christopher X, and its reminder of the broad scope of application of the French blocking statute, has not convinced U.S. federal courts that applicants seeking discovery in France should limit themselves to the means available under The Hague Evidence Convention. Four cases decided in the federal courts since Christopher X have considered the French decision but have given it little weight.7 They all have concluded that applicants seeking discovery from a French party may Benefits of Section Membership: • • • • • • • • • • • • The International Law Quarterly Writing and Speaking Opportunities Discounts for Seminars, Webinars & Downloads Section Listserv Notices Networking Opportunities Great Seminars in Four-Star Hotels at a Group Rate Invite a colleague to become a Section member! The International Law Quarterly Page 61 CHRISTOPHeR x, from preceding page 442(1)(c) of the Restatement (Third) of Foreign Relations Law, as well as those articulated by the Supreme Court in Aerospatiale, and those previously mentioned in decisions of the district courts for the Second Circuit. These seven factors are: • the importance to the litigation of the documents or other information requested; • the degree of specificity of the request; • whether the information originated from the U.S.; • the availability of alternative means of securing the information; • the extent to which non-compliance with the request would undermine important U.S. interests, or compliance with the request would undermine important interests of the State where the information is located; • the hardship of compliance on the party from which discovery is sought; and • the resisting party’s good faith.10 The court considered the effect of the French blocking statute only with respect to the fifth and sixth factors. With regard to the fifth factor (the comity analysis), the court adopted the U.S. Supreme Court’s ruling in Aerospatiale according to which “American courts are not required to adhere blindly to the directives of such a statute.”11 It also distinguished the facts of Christopher X from those in the present case. In Christopher X, the prosecuted lawyer was not conducting discovery against a party within the confines of the Federal Rules or pursuant to court order. The lawyer had made false statements, and MAAF filed a complaint with the French authorities to initiate prosecution under the blocking statute.12 These distinguishing facts, along with the interest the court found France would have in eliminating terror financing, weighed in favour of allowing discovery pursuant to the Federal Rules under the comity analysis. With respect to the sixth factor—the hardship on Crédit Lyonnais of complying with the discovery request—the court found that the prospect of facing criminal penalties for compliance weighed in favour Page 62 of the objecting party. Nonetheless, the court held that if the objecting party were a party to the action, as in that case, such hardship would be afforded less weight in the analysis.13 Moreover, the court found that Crédit Lyonnais had failed to show that the French government was likely to prosecute or otherwise sanction Crédit Lyonnais for having complied with a U.S. court order compelling discovery. Because on balance the factors weighed in favour of the plaintiffs (except, possibly, the foreign origin of the documents sought and Crédit Lyonnais’ good faith), the court denied Crédit Lyonnais’ motion for a protective order and compelled it to produce all documents pursuant to the plaintiffs’ discovery requests in accordance with the Federal Rules.14 Thus, although the court considered the possibility that Crédit Lyonnais could be prosecuted for complying with its order, the court found such possibility to be remote given the distinguishing facts between this case and Christopher X. Accordingly, the court afforded the Christopher X decision little weight in the comity and hardship analyses, particularly in light of the fact that Crédit Lyonnais was a party to the action itself. subsequent case law In October 2009, the Federal Bankruptcy Court for the District of Delaware also considered the effects of the French blocking statute in a discovery dispute in which a party sought discovery from a Dutch party that claimed that the information was located at its affiliate’s premises in France. After determining that the discovery sought was in the control of the Dutch party, Maasvlakte, and could be compelled, the court in In re Global Power Equipment Group15 applied the seven balancing factors articulated in Strauss. In assessing France’s comity interests, the court concluded that “the French interest here is particularly attenuated.” Maasvlakte was not a French company; the facility at issue in the litigation was not located in France; the majority of the information sought was not developed in France; and the information was only transferred to France by the Dutch company, a party to the trial, subject to the court’s jurisdiction. Moreover, witnesses had testified at deposition that the French government would have little interest in protecting such information from discovery.16 In considering the potential hardship on the party, the court noted that Maasvlakte voluntarily filed a proof of claim in the bankruptcy and thereby submitted to the jurisdiction of the court. On the other hand, the court acknowledged the possibility that Maasvlakte could expose itself to prosecution in France if it complied with discovery under the Federal Rules. The court found, however, that the risk of prosecution was remote, because in the twenty years since the enactment of the blocking statute, French authorities had prosecuted under it only once and because Maasvlakte had not shown that there was any likelihood that it or its French affiliate would be prosecuted for complying with the discovery requests. In particular, the court rejected Maasvlakte’s argument that The Hague Evidence Convention was the only means to obtain evidence from its non-party French affiliate. The court cited the Supreme Court’s failure in Aerospatiale to make a distinction between discovery taken from a litigant or from a third party.17 As in Strauss, the court thus concluded that on balance the factors weighed in favor of permitting the party seeking discovery to employ the Federal Rules and did not require it to use the more limited means available under The Hague Evidence Convention. Two cases in 2010 again gave short shrift to the French blocking statute. In In re Air Cargo Shipping Services Antitrust Litig. MDL,18 the Federal District Court for the Eastern District of New York ordered the French airline Air France to produce documents that it had withheld on the ground that their production would be prohibited by the French blocking statute. The documents in question consisted of documents that the U.S. Department of Justice already had obtained in the course of its criminal antitrust investigation into the same activities that formed the basis for the civil antitrust claims at issue in the case. Winter 2012 The International Law Quarterly CHRISTOPHeR x from preceding page The court applied the seven Strauss factors and focused in particular on the potential hardship on the defendant of producing the documents. The court noted that although the Supreme Court had held that “fear of criminal prosecution constitutes a weighty excuse for non-production,”19 other courts had found that the legislative history of the statute showed that it “was never expected or intended to be enforced against French subjects but was intended rather to provide them with tactical weapons and bargaining chips in foreign courts.”20 The court recognised that “but one prosecution . . . has ever been brought for violation of the blocking statute” and distinguished the Christopher X case on its facts, specifically that in this case the defendant had “sought to circumvent the blocking statute through deceptive means.” The court concluded that, with the hardship factor undercut by the unlikelihood of France pursuing the defendant under the blocking statute and with the United States’ strong national interest in enforcing its antitrust laws, the comity analysis weighed in favour of compelling production of documents under the Federal Rules.21 On 14 December 2010, the Magistrate Judge for the Federal Court for the Eastern District of Virginia in MeadWestvaco Corp. v. Rexam PLC22 rejected the defendant’s attempt to resist discovery by relying on the French blocking statute. The court acknowledged France’s interest in preventing disclosure of the information but cited other courts in finding that the statute should not be accorded much deference. Although the court took note of the Christopher X decision, it found the facts distinguishable and concluded that the comity analysis weighed in favour of allowing discovery under the Federal Rules.23 of its blocking statute, they have continued in the vein of Aerospatiale and accorded the statute little weight in determining whether to protect French defendants from discovery under the Federal Rules. U.S. courts uniformly have distinguished the facts of Christopher X from the facts at issue in the cases before them and have concluded that the blocking statute presented little or no hardship on parties seeking to resist discovery. For a U.S. court to give a French conviction any import, it may be that it will have to be under circumstances where the prosecuted party would be a party to the lawsuit and would actually be acting in accordance with the Federal Rules. Even then, however, U.S. courts appear reluctant to allow a French law to undermine their sovereign power to compel the type of broad discovery available to litigants under the Federal Rules.n C h r i s t i n a Ta b e r Kewene is an associate in the New York office of Hogan Lovells. She has broad international litigation experience involving products liability, human rights, foreign service of proC.Taber-Kewene cess under the Hague Convention, foreign discovery of documents and testimony, personal jurisdiction and corporate veil piercing, and forum non conveniens. Christina has degrees from Stanford University and Columbia University. Cécile Di Meglio is licensed as an attorney in both France and New York and is a senior associate in the litigation practice of the Paris office of Hogan Lovells. She regularly advises clients on international jurisdiction, choice-of-law, international discovery and other issues arising in international litigation matters and has also developed a specific expertise in product liability issues, especially in the aviation industry. Cécile has degrees from Université Paris I, Panthéon-Sorbonne and New York University. endnotes: 1 2 3 4 5 Law no. 80-538 of 16 July 1980, Article 1 Bis. 482 U.S. 522 (1987). Id. at 544 n.29. Id. Bull. Crim. 2007, no. 309. 6 French Supreme Court, Criminal Chamber, 30 January 2008, Pourvoi no. 06-84.098. 7 Two other recent cases since the Christopher X decision also have declined to allow a French party to avoid application of the Federal Rules by citing to the French blocking statute but have not explicitly considered the import of the Christopher X decision. In re SNP Boat Serv. SA, 453 B.R. 446 (S.D. Fla. 2011); Metso Minerals Indus., Inc. v. Johnson Crushers Int’l, Inc., 276 F.R.D. 504 (E.D. Wis. 2011). 8 9 249 F.R.D. 429. Id. at 435, 437. 10 Id. at 438, 439. 11 Id. at 450. 12 Id. at 451. 13 Id. at 454. 14 249 F.R.D. 456. 15 418 B.R. 833 (Bankr.D.Del. 28 Oct. 2009). 16 Id. 17 Id. 18 NO. 06-MD-1775, MDL 1775, 2010 WL 1189341 (E.D.N.Y. 29 Mar. 2010). 19 Id. at *3, citing Aerospatiale. 20 Id. at *3, citing Adidas (Canada) Ltd. v. SS Seatrain Bennington, nos. 80 Civ. 1911, 82 Civ. 0375, 1984 WL 423, at *3 (S.D.N.Y., 30 May 1984) and United States v. Gonzalez, 748 F.2d 74, 78 (2d Cir. 1984)). 21 Id. at *4. 22 No. Civ. A. 1:10-511, 2010 WL 5574325, aff’d 2011 WL 102675 (E.D.Va. 10 Jan. 2011). 23 Id. at *2. Conclusion Although U.S. courts are aware of—and explicitly have considered—France’s first conviction of a French national for violation C. Di Meglio Winter 2012 The International Law Quarterly Page 63 The Florida Bar Continuing Legal Education Committee and the International Law Section present 10th Annual International Litigation and Arbitration Conference COURSE CLASSIFICATION: INTERMEDIATE LEVEL – Audio CD – Recorded February 24, 2012 at J.W. Marriott Marquis, Miami Course No. 1422C AUDIO CD ORDER FORM This is the 10th year anniversary of the International Law Section’s Litigation and Arbitration Conference. The Audio CD includes all breakout sessions on litigation and arbitration: asset tracing and recovery tools: essentials for the international litigator; arbitration rules update; hot topics in international litigation; hot topics in international arbitration; what you may not know about litigation in Latin America; what you may not know about enforcing your arbitral award abroad; cross border enforcement: the role of prosecutors, regulators, and defense attorneys; the next generation of investor-state arbitration: a review of the logical steps. The plenary sessions include: recent alien tort claim act cases and ethics issues in international litigation: fee sharing and suit financing. This one-day program has been awarded 11 hours of CLE credit, 1 hour of ethics and 11 hours of international certification credit. Friday - February 24, 2012 9:00 a.m. – 10:00 a.m. Plenary Session Recent Alien Tort Claim Act Cases Moderator: Raoul G. Cantero, White & Case LLP, Miami 10:00 a.m. – 10:15 a.m. Break 10:15 a.m. - 11:15 a.m. Breakout Sessions Asset Tracing and Recovery Tools: Essentials for the International Litigator Moderator: Arnoldo B. Lacayo, Astigarraga Davis Mullins & Grossman, P.A., Miami Arbitration Rules Update Moderator: Eduardo Palmer, Eduardo Palmer, P.A., Coral Gables 11:15 a.m. – 11:30 a.m. Break 11:30 a.m. – 12:30 p.m. Breakout Sessions Hot Topics in International Litigation Moderator: Edward M. Mullins, Astigarraga Davis Mullins & Grossman, P.A., Miami Hot Topics in International Arbitration Moderator: Carlos F. Concepción, Concepción Martinez & Bellido, Coral Gables 12:30 p.m. – 1:45 p.m. Luncheon (included in registration fee) 1:45 p.m. – 2:45 p.m. Breakout Sessions What You May Not Know About Litigating in Latin America Moderator: Gustavo Lamelas, DLA Piper (US) LLP, Miami What You Need to Know about Enforcing Your Arbitral Award Abroad Moderator: C. Ryan Reetz, DLA Piper (US) LLP, Miami 2:45 p.m. – 3:00 p.m. Break 3:00 p.m. – 4:00 p.m. Breakout Sessions Cross Border Enforcement: The Role of Prosecutors, Regulators, and Defense Attorneys Moderator: Matthew Menchel, Kobre & Kim, LLP, Miami The Next Generation of Investor-State Arbitration: A Review of the Logical Steps Moderator: Alberto Wray, FoleyHoag LLP, Washington, D.C. and Quito, Ecuador 4:00 p.m. – 4:15 p.m. Break 4:15 p.m. – 5:15 p.m. Plenary Session Ethics Issues in International Litigation: Fee Sharing, Suit Financing Moderator: Martin Kenney, Martin Kenney & Co., Tortola, British Virgin Islands 5:30 p.m. – 7:00 p.m. Reception (included in registration fee) J.W. Marriott Marquis CLE CREDITS CLER PROGRAM (Max. Credit: 11.0 hours) General: 11.0 hours Ethics: 1.0 hour CERTIFICATION PROGRAM (Max. Credit: 11.0 hours) Business Litigation: 8.0 hours Civil Trial: 8.0 hours Criminal Appellate: 1.0 hour Criminal Trial: 1.0 hour International Law: 11.0 hours REFUND POLICY: A $25 service fee applies to all requests for refunds. Requests must be in writing and postmarked no later than two business days following the live course presentation or receipt of product. Registration fees are non-transferrable, unless transferred to a colleague registering at the same price paid. ELECTRONIC MATERIALS: Every CLE course will feature an electronic course book in lieu of a printed book for all live presentations, live webcasts, webinars, teleseminars, audio CDs and video DVDs. This searchable, downloadable, printable material will be available via e-mail several days in advance of the live course presentation or thereafter for purchased products. We strongly encourage you to purchase the book separately if you prefer your material printed but do not want to print it yourself. Effective July 1, 2010. TO ORDER AUDIO CD OR COURSE MATERIALS BY MAIL, SEND THIS FORM TO The Florida Bar, Order Entry Department: 651 E. Jefferson Street, Tallahassee, FL 32399-2300 with a check in the appropriate amount payable to The Florida Bar or credit card information filled in below. If you have questions, call 850/561-5831. Name ____________________________________________________________________________ Florida Bar # __________________________ Address _______________________________________________________________________________________________________________ City/State/Zip _______________________________________________________________ Phone # ____________________________________ Email Address __________________________________________________________________________________________________________ ABF: Course No. 1422C METHOD OF PAYMENT (CHECK ONE): Check enclosed made payable to The Florida Bar Credit Card (Advance registration only. Fax to 850/561-5816.) MASTERCARD VISA DISCOVER AMEX Signature: _____________________________________________________________________________________Exp. Date: ____/____ (MO./YR.) Name on Card: ______________________________________________________________ Billing Zip Code: ____________________________ Card No. ______________________________________________________________________________________________________________ TO ORDER AUDIO CD OR COURSE MATERIALS, fill out the order form above, including a street address for delivery. Please add sales tax. Tax exempt entities must pay the non-section member price. Please include sales tax unless ordering party is tax-exempt or a nonresident of Florida. If this order is to be purchased by a tax-exempt organization, the media must be mailed to that organization and not to a person. Include tax-exempt number beside organization’s name on the order form. ❑ AUDIO CD (includes electronic course material) $345 plus tax (section member) $395 plus tax (non-section member) (1422C) TOTAL $ _______ Winter 2012 The International Law Quarterly Page 64 The Florida Bar Continuing Legal education Committee and The International Law section present International Income Tax and Estate Planning 2011– Audio CD COuRse CLAssIFICATIOn: InTeRMeDIATe LeVeL Recorded Thursday, October 27, 2011 Course no. 1299R sCheDuLe: 8:25 a.m. – 8:30 a.m. Opening Remarks William H. Newton, III, Esq., Law Offices of William H. Newton, III, Miami – Program Chair Margarita P. Muina, Esq., Law Offices of Margarita P. Muina, P.A., Miami – Program Vice Chair 8:30 a.m. – 9:20 a.m. Overview of International Tax and estate Planning Developments William H. Newton, III, Esq., Law Offices of William H. Newton, III, Miami 9:20 a.m. – 10:10 a.m. Putting FATCA into Context: The International Focus on Information exchange Professor Patricia Brown, Director, Masters of Taxation Program, University of Miami School of Law, Coral Gables 10:25 a.m. – 11:15 a.m. Choice of entity Issues and International Tax Planning Seth Entin, Esq., Greenberg Traurig, Miami 11:15 a.m. – 12:05 p.m. Cutting-edge Developments With Respect to Tax Fraud and Collection Considerations as Related to International Tax Andrew H. Weinstein, Esq., Holland and Knight L.L.P., Miami Kevin Packman, Esq., Holland and Knight L.L.P., Miami 1:30 p.m. – 2:20 p.m. Globalization and Legal education Professor Patricia White, Dean, University of Miami School of Law, Coral Gables 2:20 p.m. – 3:10 p.m. Current Issues in estate and Gift Tax Planning for u.s. situs Assets Margarita P. Muina, Esq., Law Offices of Margarita P. Muina, P.A., Miami 3:25 p.m. – 4:15 p.m. expatriation – Current Issues and Required Disclosures Shawn P. Wolf, Esq., Packman, Neuwahl and Rosenberg, Coral Gables William Yates, Esq., Associate Chief Counsel (International), Internal Revenue Service, Washington, D.C. 4:15 p.m. – 5:05 p.m. Transfer Pricing in the Current economic environment Ian Gray, Esq., Economics Partners, L.L.C., Denver, CO Robert A. Feinschreiber, Esq., Feinschreiber & Associates, Key Biscayne 5:05 p.m. – 5:10 p.m. Closing Remarks William H. Newton, III, Esq., Law Offices of William H. Newton, III, Miami – Program Chair Margarita P. Muina, Esq., Law Offices of Margarita P. Muina, P.A., Miami – Program Vice Chair AuDIO CD (1299C): (Cost including electronic materials) • Member of the International Law Section: $195 plus tax • Non-section member: $245 plus tax CLeR PROGRAM (Max. Credit: 8.0 hours) General: 8.0 hours Ethics: 1.5 hours (Max. Credit: 8.0 hours) International Law: 8.0 hours Tax Law: 6.0 hours Wills, Trusts & Estates: 6.0 hours CeRTIFICATIOn PROGRAM ome onal Inc Internati Estate Tax and 2011 Planning 1299C To ORDeR AuDIO CD OR COuRse MATeRIAL, go to FLORIDABAR.ORG/CLe and search by course number 1299R. The International Law Quarterly Page 65 Winter 2012 The Florida Bar Continuing Legal Education Committee and The International Law Section present International Law Section Webinar Series 2011-2012 COURSE CLASSIFICATION: INTERMEDIATE LEVEL WEBINAR Presentation Dates: November 10, 2011, December 8, 2011, February 15, 2012, March 15, 2012, and April 26, 2012 12:00 noon – 1:00 p.m. EST Course Nos. 1401, 1402, 1403, 1404, 1405, 1406R The Florida Bar International Law Section is pleased to announce its 2011-2012 International Law Webinar Series. Over the course of six months, we will provide an easy and affordable manner to earn CLE credits and listen to presentations from the comfort of your home or office. You may register for each live webinar individually or purchase the entire live series at a discount. In addition, each program will be audiotaped and an audio cd (including electronic course material) will be available after April 26, 2012. November 10, 2011 12:00 noon – 1:00 p.m. what to Do when the Export Laws of the United States May Have Been Violated (1401R) Peter A. Quinter, Becker & Poliakoff P.A., Fort Lauderdale wEBINAR As a webinar attendee you will listen to the program over the telephone and follow the materials online. Registrants will receive webinar connection instructions 2 days prior to the scheduled course date via e-mail. If you do not have an e-mail address, contact Order Entry Department at 850-561-5831, 2 days prior to the event for the instructions. December 8, 2011 12:00 noon – 1:00 p.m. Managing U.S. Discovery “Assistance” in International Arbitration (1402R) Gustavo J. Lamelas, DLA Piper LLP (US), Miami February 15, 2012 12:00 noon – 1:00 p.m. 5 ways Corporations Can Limit their International Liability Exposure (1403R) Santiago A. Cueto, Cueto Law Group P.L., Coral Gables CLE CREDITS (Max. Credit: 6.0 hours for the Entire Series) General: 1.0 hour (per program) Ethics: 1.0 hour (April 26 Webinar Only)* (Max. Credit: 6.0 hours for the Entire Series) International Law: 1.0 hour (per program) Seminar credit may be applied to satisfy CLER / Certification requirements in the amounts specified above, not to exceed the maximum credit. See the CLE link at www.floridabar.org for more information. Prior to your CLER reporting date (located on the mailing label of your Florida Bar News or available in your CLE record on-line) you will be sent a Reporting Affidavit if you have not completed your required hours (must be returned by your CLER reporting date). CLER PROGRAM March 15, 2012 12:00 noon – 1:00 p.m. Managing Criminal Exposure Under the FCPA and Other Laws Impacting International Trade (1404R) Robert J. Becerra, Fuerst Ittleman, P.L., Miami Angela J. Crawford, DLA Piper LLP (US), Tampa CERTIFICATION PROGRAM April 26, 2012* 12:00 noon – 1:00 p.m. Ethics Considerations in International Dispute Resolution (1405R) Richard J. Dewitt, Dewitt Law / Resolve Disputes, Coral Gables REFUND POLICY: A $25 service fee applies to all requests for refunds. Requests must be in writing and postmarked no later than two business days following the live course presentation or receipt of product. Registration fees are non-transferrable, unless transferred to a colleague registering at the same price paid. Winter 2012 The International Law Quarterly Page 66 TO REGISTER OR ORDER AUDIO CD BY MAIL, SEND THIS FORM TO: The Florida Bar, Order Entry Department, 651 E. Jefferson Street, Tallahassee, FL 32399-2300 with a check in the appropriate amount payable to The Florida Bar or credit card information filled in below. If you have questions, call 850/561-5831. Name __________________________________________________________________ Florida Bar # _______________________ Address _____________________________________________________________ Phone: ( City/State/Zip _________________________________________________ E-mail *E-mail address required to transmit electronic course materials and is only used for this order. ) _______________________ ABF * _____________________________________ ELECTRONIC MATERIALS: Every CLE course will feature an electronic course book in lieu of a printed book for all live presentations, live webcasts, webinars, teleseminars, audio CDs and video DVDs. This searchable, downloadable, printable material will be available via e-mail several days in advance of the live course presentation or thereafter for purchased products. We strongly encourage you to purchase the book separately if you prefer your material printed but do not want to print it yourself. Effective July 1, 2010. REGISTRATION FEE (CHECk wHICH APPLY): what to Do when the Export Laws of the United States May Have Been Violated – November 10, 2011 (1401R351) Managing Criminal Exposure Under the FCPA and Other Laws Impacting International Trade – March 15, 2012 (1404R351) Member of International Law Section: $40 Non-section member: $90 Managing U.S. Discovery “Assistance” in International Arbitration – December 8, 2011 (1402R351) Member of International Law Section: $40 Non-section member: $90 Ethics Considerations in International Dispute Resolution – April 26, 2012 (1405R351) Member of International Law Section: $40 Non-section member: $90 5 ways Corporations Can Limit their International Liability Exposure – February 15, 2012 (1403R351) Member of International Law Section: $40 Non-section member: $90 Member of International Law Section: $40 Non-section member: $90 METHOD OF PAYMENT (CHECk ONE): Check enclosed made payable to The Florida Bar Credit Card (Advance registration only. Fax to 850/561-9413.) MASTERCARD VISA DISCOVER AMEX Exp. Date: _____/_____ (MO./YR.) Signature: _______________________________________________________________________________________________ Name on Card: ______________________________________________ Billing Zip Code: _______________________________ Card No. ________________________________________________________________________________________________ Please check here if you have a disability that may require special attention or services. To ensure availability of appropriate accommodations, attach a general description of your needs. We will contact you for further coordination. AUDIO CD Private recording of this program is not permitted. Delivery time is 4 to 6 weeks after 04/26/12. TO ORDER AUDIO CD, fill out the order form above, including a street address for delivery. Please add sales tax. Tax exempt entities must pay the non-section member price. Those eligible for the above mentioned fee waiver may order a complimentary audio CD in lieu of live attendance upon written request and for personal use only. Please include sales tax unless ordering party is tax-exempt or a nonresident of Florida. If this order is to be purchased by a tax-exempt organization, the media must be mailed to that organization and not to a person. Include tax-exempt number beside organization’s name on the order form. ❑ AUDIO CD (1407C) (includes Electronic Course Material for all 5 programs) $200 plus tax (section member) $250 plus tax (non-section member) TOTAL $ _______ Winter 2012 The International Law Quarterly Page 67 The Florida Bar 651 East Jefferson Street Tallahassee, FL 32399-2300 FIRST CLASS U.S. POSTAGE TALLAhAssee, FL Permit no. 43 PAID Section Calendar For more information, visit www.internationllawsection.org. Mark your calendars for these important dates. eXeCuTIVe COunCIL MeeTInGs Friday, June 22, 2012 Annual Florida Bar Convention Gaylord Palms Resort & Convention Center, Orlando/ Kissimmee seCTIOn MeeTInGs AT The AnnuAL FLORIDA BAR COnVenTIOn n Thursday, June 21, 2012 8:00 p.m. - 10:00 p.m. ILs Joint Reception for Outgoing Chair nicolas swerdloff & Incoming Chair Richard Lorenzo Location: Nicolas Swerdloff’s Suite seMInARs/PROGRAMs Thursday, April 26, 2012 (WEBINAR) ethics Considerations in International Dispute Resolution (#1405R) Richard J. Dewitt, Dewitt Law/Resolve Disputes, Coral Gables Friday, June 22, 2012 Current Trends in Arbitration (#1367R) Annual Florida Bar Convention Gaylord Palms Resort & Convention Center Orlando/Kissimmee n Friday, June 22, 2012 10:25 a.m. - 11:45 p.m. CLe: CuRRenT TRenDs In ARBITRATIOn (1367R) 12:15 p.m. - 1:45 p.m. section Luncheon with Keynote speaker 2:00 p.m. - 3:00 p.m. 2012 - 2013 ILs Committee Meetings 3:15 p.m. - 6:00 p.m. section executive Council Meeting Page 68 The International Law Quarterly Winter 2012