In an October 24, 2005 speech delivered at the Update 2005 Conference on Export Controls and Policy of the Commerce Department’s Bureau of Industry, Secretary Gutierrez voiced concern about the following: that costs of production are being subsidized for some Chinese goods, that State-controlled banks are making loans to State enterprises on very relaxed terms, that U.S. businesses face restrictions in the Chinese market, that China’s currency is not being valued by market forces, and that ninety percent of software sold in China is pirated. However, Secretary Gutierrez commended China for the following: average tariffs have dropped from forty-one percent to six percent since China joined the WTO; President Hu has personally pledged to President Bush that China will enhances its efforts to protect intellectual property; China recently took a first step toward a market-based currency.
Venezuela’s relationship with the U.S. has deteriorated since the election of Hugo Chavez as its President in 1998. Recently, Israeli media reported that the U.S. has blocked the sale of technology to Venezuela to upgrade the U.S. made F-16 fighters. Chavez has fired back that if the US does not comply with the contract, “we can do whatever we want with these aircraft.” Chavez said that Venezuela may give the planes to China or Cuba so the technology may be studied. He further said that Venezuela may buy aircraft from China or Russia, adding “we don’t need any U.S. imperialism.” While most of Venezuela’s crude oil is sold in the U.S. market, Chavez has strengthened its economic ties with countries like Russia, China, and other South American countries.
Bernard Smith, the President of Stealth Components, Inc. was sentenced to three years of probation for his involvement in a scheme to avoid paying antidumping duties. Smith had pled guilty to an indictment that charged him with conspiracy and false statements.
From November 1998 through May 2000, Smith admitted that he participated in a scheme to minimize the payment of antidumping duties on imported Korean Dynamic Random Access Memory (“DRAM”). Since DRAM was being sold at less than fair market value, the Department of Commerce demanded antidumping duties. Smith then perpetrated a scheme of directing foreign suppliers to prepare fraudulent invoices for each shipment of DRAM that Stealth imported. With this scheme, Stealth was able to undervalue the purchase price and reduce the amount of antidumping duties owed to Customs. With this scheme, Smith was able to avoid payment of over $385,000, to Customs in antidumping duties.
The American Jobs Creation Act of 2004 enacted new Section 409A of the Internal Revenue Code, which dramatically changes the treatment of nonqualified deferred compensation (“NQDC”) plans. Whereas employers and employees previously enjoyed tremendous flexibility in designing NQDC plans to accomplish a variety of objectives and purposes, Section 409A imposes rigid new requirements upon such plans. The penalties for failing to comply with the new requirements are rather severe. Consequently, it is important that you review all of your deferred compensation plans to determine whether any amendments or other action to your plans are necessary to protect your plan participants from these penalties. For more information, click here.
A new Israeli amendment will now extend patents based on the extensions granted in other countries. The amendment requires that a drug patent extension be shorter than extensions in other countries, since a delay in marketing generic drugs can costs hundreds of millions of dollars. International pharmaceutical companies and Israeli generic drug makers will prepare a list of countries that have granted pharmaceutical patent extensions. Israel will now be permitted to distribute generic alternatives to ethical drugs.
The list is likely to include major pharmaceutical manufacturing countries like the US, UK, Germany, Switzerland and France. Canada, New Zealand, and Japan, which do not extend pharmaceutical patents are likely to be excluded from the list. A representative from the Ministry of Industry, Trade and Labor said that Israel hopes to attract pharmaceutical companies to Israel with the passage of this new amendment.
If passed, the Bioterrorism Defense Act of 2005 will provide incentive to the drug industry to develop defense products and to generate vaccine antidotes. The bill includes a “wild card” exclusivity provision that would offer six additional months of market exclusivity on any drug developed as a useful defensive drug. For more information, click here.
Portfolio Media, New York (December 6, 2005)--The U.S. government put its stamp of approval on new compulsory licensing rules by the World Trade Organization, which dramatically decrease intellectual property barriers faced by developing countries fighting life threatening diseases. Click here for more information.
Intellectual property holding company, Patriot, has filed a patent infringement suit against Intel. The legal actions began when Patriot was awarded a patent for an on-chip clocking technology which manages a microprocessor’s clock operations. In January 2004, Patriot filed an infringement suit against Matsushita, Sony, Fujitsu, Toshiba and NEC because their computers were equipped with the Intel chip, which uses the patented technology.
On February 2, 2004, Intel sought a declaratory judgment of non-infringement against Patriot in the United States District Court for the Northern District of California. Patriot in turn filed a lawsuit alleging multiple-count patent infringement.
In October 2005, Patriot abandoned its claims against the five Japanese manufacturers. Sony is no longer being sued for infringement, but the other four companies are now being sued by Patriot’s partner, TPL. In June of this year, Patriot and TPL decided to bring their patent portfolio’s into alignment. Hence, the Patriot’s lawsuit is being replaced by TPL’s action. It is believed that TPL has a better chance of prosecuting the case than Patriot. Intel has not yet responded to this new move.
Michael Chen of KMC’s China office will present at the KMC International Business Transactions seminar from 8-9:00am on Thursday, January 19, 2006. Mr. Chen will discuss “Direct Selling in China”. Email Nikki Davis at nmdavis@kmclaw.com to register for the seminar.
Kirton & McConkie is pleased to welcome Paul K. Savage to its International Law Practice as of January 1, 2006. Mr. Savage spent the last four years (based in Seattle) as a tax professional with the International Corporate Services practice of KPMG, including a recent three-month rotation with KPMG's offices in Munich, Germany. An honor's graduate of Columbia Law School, Mr. Savage is also a former Fulbright Fellow with the University of Bern, Switzerland. Prior to joining KPMG, Mr. Savage practiced with a Seattle law firm in the area of Tax Controversy, including both civil and criminal tax defense areas, as well as general tax planning for individuals and businesses. Mr. Savage will also be involved with Kirton & McConkie's Corporate and Tax Practice Section.
1) Japanese Multi-Level Marketing Business—Due Process
Due to continuous complaints from customers, the current Japanese Special Business Transactions Law establishes a high standard for MLM companies’ marketing activities. For example, one of standards that the MLM Law requires is that MLM companies provide particular information to prospective participants. At the initial stages of a relationship between an MLM Company and a prospective participant, an MLM Company must provide the prospective participant with a Prospectus and a Contract. In this presentation, such due process clauses in relation to MLM companies will be discussed.
Mr. Yamamoto will present at the Utah State Bar Association’s International Section Luncheon on January 12, 2006 at noon at the Utah Law and Justice Center. The cost for Utah-licensed lawyers is $15 and $20 for others. Contact Ms. Stephanie Long at stephanie.long@utahbar.org to register.
2) The BYU Marriott School of Management offers international consulting services through its Global Management Center. This program is funded by a Federal CYBER grant which supports the expenses of the consulting and travel. This is a cost-effective way for companies to obtain international business consulting, supervised by Marriott School faculty members who manage each project. The students have foreign language ability and cultural experience. Companies can obtain up to 1000 hours of consulting for a modest contribution to the program. For more information, click here or contact Lee Daniels at leed@dcpfunds.com.
