Trends In International Litigation : International Business Lawyer & Attorney : Ed Joffe : Joffe & Joffe Law Firm : Miami, Florida Global Customs & Trade Issues

A U.S. District Court Judge declined to find that  the registration prerequisite for statutory damages under the U.S. Copyright laws was preempted by the Berne Convention.

Elsevier B.V., Elsevier Inc., and Mosby, Inc. (collectively “Elsevier”) own or exclusively license copyrights in scientific books and journals which they offer to subscribers to their on-line database, ScienceDirect ®. A large percentage of those publications are created abroad and their foreign copyrights have not been registered in the United States. Elsevier alleged that Defendant Ingenix, Inc. (“Ingenix”) violated the terms of its subscriber agreement with Elsevier by allowing unauthorized access to the ScienceDirect ® database. In seeking statutory damages in a case filed in the US District Court for the Southern District of New York, Elsevier assered  that Article Five of the Berne Convention for the Protection of Literary and Artistic Works (the “Berne Convention”) conflicts with § 412 of theUS Copyright laws  to the extent that it conditions an award of statutory damages and attorney's fees for infringement of a Berne Convention copyright on the registration of that copyright in the United States.

Article Five of the Berne Convention provides that “the enjoyment and the exercise of [rights under the Convention] shall not be subject to any formality.” Elsevier argues that the Berne Convention superseded § 412 of the Copyright Act of 1976 because statutory damages and attorney's fees are integral to the enjoyment and exercise of foreign copyrights.

The US District Court noted that that argument requires a finding that the Berne Convention was self-executing and became law upon ratification. However, in adopting the Berne Convention Implementation Act of 1988 (the “Implementation Act”), Congress declared that the Berne Convention was “not self-executing under the Constitution and laws of the United States”; that “[t]he obligations of the United States under the Berne Convention may be performed only pursuant to appropriate domestic law”; and that “[t]he amendments made by this Act ..., together with the law as it exists on the date of the enactment of this Act [October 31, 1988], satisfy the obligations of the United States in adhering to the Berne Convention and no further rights or interests shall be recognized or created for that purpose.” Berne Convention Implementation Act of 1988, Pub.L. No. 100-568 § 2, 102 Stat. 2853 (codified as amended at 17 U.S.C. § 101 et seq.)

The court concluded that since the Berne Convention is not self-executing, it cannot serve as the basis for a claim of preemption under Article VI of the United States Constitution.

This decision, although correct on the law, highlights a bias in our copyright laws. We cannot complain about inequities in other countries' IP rights unless we address this issue in our own laws.

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 Daniel H. Pink's posting is worth sharing. In the early 1990s, he worked for Robert B. Reich, then the U.S. Secretary of Labor. Reich  taught Pink a simple (and free) tool for diagnosing the health of an organization.

When he visited companies and talked with employees, Reich listened carefully for the pronouns people used. Did employees refer to their companies as “they” or as “we”? ”They” suggested at least some amount of disengagement, and perhaps even alienation. “We” suggested the opposite–that employees felt that they were part of something significant and meaningful.

If you’re a boss–of a handful of people, an entire organization, or even your local church group–spend a few days listening to the people around you, not only in formal settings like meetings, but also in the hallways and at lunch. Then apply Reich’s pronoun test. Are you a “we” organization or a “they” organization? The difference matters. All of us seek intrinsic motivation. The thing is, “we” can get it–but “they” can’t.
 

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As reported by  Jess Bravin in the Wall Street Journal On Line, the Supreme Court heard arguments on March 3 over whether foreign leaders are entitled to legal immunity in the U.S. for their official acts, in a case that some justices suggested could hold ramifications for former American officials.The court is seeking to reconcile two U.S. laws in apparent conflict.

The Torture Victim Protection Act of 1991 authorizes lawsuits against people who allegedly committed torture or extrajudicial killing "under actual or apparent authority…of any foreign nation" when the home nation lacks adequate remedies for such offenses. But the 1976 Foreign Sovereign Immunities Act exempts foreign governments and their "agencies" and "instrumentalities" from being sued.

The case involves a former Somali official, Mohamed Ali Samantar. Five Somali natives, including two U.S. citizens, claim that they or their relatives were abused or killed by forces under Mr. Samantar's command. Mr. Samantar, who now lives in Fairfax, Va., contends that because he was prime minister or defense minister from 1980 until the Somali regime's 1991 collapse, he was an "instrumentality" of government and thus immune from liability.

In a ruling last year, the Fourth U.S. Circuit Court of Appeals disagreed. The Richmond, Va., court said the Immunities Act was designed to cover entities such as national airlines and other state-owned businesses, not individuals. Other appeals courts have read the Immunities Act more broadly, and the Supreme Court seemed similarly divided over how to construe the law.

Shay Dvoretzky, a lawyer representing Mr. Samantar, said there was no way to distinguish between a foreign government and the individuals who ran it. Congress immunized "foreign officials for acts taken on the state's behalf, because such suits are the equivalent of a suit against the state directly," he told the court.

Patricia Millett, an attorney representing the plaintiffs, said that if Mr. Samantar was right, then the Torture Victim Act "was a very empty statute."

Deputy Solicitor General Edwin Kneedler said the law's ambiguity was intended to leave discretion with the executive branch, which could advise courts whether specific torture lawsuits should be allowed to proceed. "There are a lot of diplomatic sensitivities about whether immunity should be recognized in a particular case or not," Mr. Kneedler said.

Last year, Baltazar Garzon, a Spanish magistrate, opened an investigation into torture allegations against six former Bush administration officials, including former Justice Department lawyer John Yoo.

A decision in Samantar v. Yousuf is expected before July.

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 As reported by David Hechler of Corporate Counsel, the Department of Justice unit that prosecutes Foreign Corrupt Practices Act cases will soon grow "substantially," according to Mark Mendelsohn, deputy chief of the fraud section's criminal division.  Mendelsohn said his section "may grow as much as 50 percent in size in the next year or two." At the same time, he added, he expects companies to play an increasingly aggressive role in thwarting corruption.

"Companies -- individually and collectively and in collaboration with countries -- need to adopt stricter standards," Mendelsohn told a gathering of compliance professionals on February 24  at the Global Ethics Summit 2010 in New York City.

Companies will soon have help on that front. The Organization for Economic Co-operation and Development (OECD) will be publishing best practices guidelines that, unlike those promulgated by the U.S. Sentencing Commission, are specifically tailored to these kinds of cases, and will arrive with the endorsement of the U.S. government, Mendelsohn said.

Mendelsohn began the morning reviewing recent enforcement trends. The big one was the jump in the prosecution of individuals. The number last year was 44 -- up from nine in 2008, 10 in 2007, and six in 2006. When the Justice Department goes after corruption, it isn't myopically focused only on FCPA violations. It's used money laundering, wire fraud and antitrust laws, among others, Mendelsohn noted. "They're all tools to be used against corruption."

He also spoke of increased cooperation with other countries."I don't want to overstate this," he said. "I think the progress is modest and mixed. But there have been pockets." He called the collaboration between U.S. and German authorities in the case against Siemens "the high water mark." He sounded positive about a bribery bill in the U.K. that is widely expected to become law in the coming months. But he reserved his strongest language for the importance of this work to the United States. It even has an impact on the war effort, he observed.

"Corruption is a national security issue," he said, "and an impediment to stability in places like Iraq and Afghanistan."

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The president of a Miami-Dade County, Fla.,-based company pleaded guilty today to engaging in monetary transactions involving property derived from a scheme to bribe former Haitian government officials.

According to the criminal information filed on Feb. 1, 2010, Jean Fourcand, 62, of Miami, was the president and director of Fourcand Enterprises Inc. In pleading guilty, Fourcand admitted that he received funds between November 2001 and August 2002 originating from U.S. telecommunications companies for the benefit of an official of the Republic of Haiti’s state-owned national telecommunications company, Telecommunications D’Haiti (Haiti Teleco). Fourcand admitted during his guilty plea that some of these funds were received from an intermediary company, J.D. Locator Services Inc. Juan Diaz, the president of J.D. Locator, pleaded guilty on May 15, 2009, to conspiracy to commit violations of the Foreign Corrupt Practices Act (FCPA) and money laundering. Fourcand also admitted that Robert Antoine, the former director of international relations at Haiti Teleco, was the recipient of the bribes.

According to court documents, various U.S. telecommunications companies sent money to Diaz who would then disperse the funds by issuing J.D. Locator checks made payable to Fourcand Enterprises. For example, Fourcand admitted that he received a check for $18,500 on Feb. 20, 2002, drawn on J.D. Locator Service’s bank account, which he deposited into an account in the name of Fourcand Enterprises. This check contained a false invoice number to make the payment appear to be for legitimate services when in fact the money was intended for Antoine. Fourcand admitted that he used these funds to engage in a real estate transaction that benefited Antoine.

The charged crime carries a maximum penalty of 10 years in prison and a fine of the greater of $250,000 or twice the value of the property involved in the transaction. Fourcand also agreed to forfeit $18,500 as part of his guilty plea.

Antoine was indicted on Dec. 4, 2009, for money laundering conspiracy and later arrested and expelled from Haiti to face the U.S. charges. Also charged on Dec. 4, 2009, for their alleged roles in the scheme were Joel Esquenazi, the former president, and Carlos Rodriguez, the former executive vice president of a U.S. telecommunications company, as well as Jean Rene Duperval, a former official at Haiti Teleco, and Duperval’s sister, Marguerite Grandison.

An indictment is merely an accusation, and defendants are presumed innocent until proven guilty beyond a reasonable doubt.
 

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Four individuals and three Miami businesses have been indicted on charges involving the export of electronics to a U.S. designated terrorist entity in Paraguay.

Samer Mehdi, 37, of Paraguay, Khaled T. Safadi, 56, of Miami, FL, Ulises Talavera, 46, of Miami, FL, Emilio Jacinto Gonzalez-Neira, 43, of Paraguay, Cedar Distributors, Inc. (Cedar), a Miami-based freight forwarding company owned by defendant Safadi, Transamerica Express of Miami, Inc. (Transamerica), a Miami-based freight forwarding company owned by defendant Talavera, and Jumbo Cargo, Inc. (Jumbo), a Miami-based freight forwarding company owned by defendant Gonzalez-Neira, were indicted on charges of conspiracy, 18 U.S.C. § 371, violating the International Emergency Economic Powers Act (IEEPA), 50 U.S.C. §§ 1701-1706, and smuggling electronic goods from the United States to Paraguay, 18 U.S.C. § 554. The Indictment also seeks the forfeiture of an amount equal to the value of the electronics that were illegally exported. If convicted, the individual defendants face up to 20 years’ imprisonment on the IEEPA charges, 10 years’ imprisonment on the smuggling charges, and 5 years’ imprisonment on the conspiracy charge. The companies each face up to five years’ probation on all charges, and fines of up to $1,000,000 on the IEEPA charges, and $250,000 on the smuggling and conspiracy charges, respectively.

This investigation was initiated in 2007 by ICE, FBI, CBP and DOC, as part of the Joint Terrorism Task Force (JTTF). According to the allegations in the Indictment, from at least as early as March 2007 through and continuing to at least January 2008, freight-forwarders Talavera, through Transamerica, and Gonzalez-Neira, through Jumbo, exported Sony brand electronics, including Playstation 2 consoles and digital cameras, to defendant Samer Mehdi, owner of Jomana Import Export, an electronics business located within the Galeria Page, a shopping center in Ciudad del Este, Paraguay. Safadi, through Cedar, was a distributor of the electronics to the freight-forwarders.
Since December 6, 2006, the shopping center known as Galeria Page in Ciudad del Este, Paraguay, has been designated as a Specially Designated Global Terrorist (SDGT) entity by OFAC, pursuant to Executive Order 13224. Consequently, any transaction or dealing by a U.S. person with Galeria Page, including any transaction or dealing with an entity within Galeria Page, is prohibited. The OFAC designation banned trade with Galeria Page and all tenants located therein. At all relevant times to the Indictment, it is alleged that the defendants were aware that shipping to Galeria Page was prohibited.
To conceal the true destination of the prohibited shipments, the defendants created fake invoices that contained false addresses and also listed fictitious ultimate consignees on the required Shippers Export Declarations (SEDs), and other necessary export paperwork. Locations referenced in these false documents, as well as corresponding emails, ensured that the electronics would reach the prohibited intended destination. Additionally, wire transfer payments from Mehdi in Paraguay to the U.S.-based distributors were routed through various facilities to mask their true origin.
An Indictment is only an accusation and a defendant is presumed innocent until and unless proven guilty.
 

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 An Italian subsidiary of  Parker  has agreed to plead guilty and to pay a $2.29 million criminal fine for participating in a conspiracy to rig bids, fix prices and allocate market shares of marine hose sold in the United States and elsewhere, the Department of Justice announced today.

A one-count felony charge was filed today in U.S. District Court in Houston, against Parker ITR S.r.l., a manufacturer of marine hose, headquartered in Veniano, Italy. Under the terms of the plea agreement, which is subject to court approval, Parker ITR has agreed to pay a criminal fine and to cooperate fully in the Department’s ongoing antitrust investigation. Parker ITR is the fourth company to be charged in the investigation. To date, nine individuals have been convicted for their involvement in the marine hose conspiracy.

Marine hose is a flexible rubber hose used to transfer oil between tankers and storage facilities. The victims of this conspiracy included companies involved in the off-shore extraction and/or transportation of petroleum products, as well as the U.S. Department of Defense. During the conspiracy, the cartel affected prices for hundreds of millions of dollars worth of marine hose and related products sold worldwide.

Parker ITR is charged with participating in the conspiracy from as early as 1999 until as late as May 2, 2007. According to the charge, Parker ITR and its co-conspirators agreed to allocate shares of the marine hose market and to use a price list for marine hose in order to implement the conspiracy. Parker ITR and its co-conspirators agreed not to compete for one another’s customers either by not submitting prices or bids, or by submitting intentionally high prices or bids, to certain customers. As part of the conspiracy, Parker ITR and its co-conspirators provided information received from customers in the United States and elsewhere about upcoming marine hose jobs to a co-conspirator who served as the coordinator of the conspiracy. Parker ITR received marine hose prices for customers in the United States and elsewhere from the coordinator of the conspiracy and then sold the marine hose to those customers at collusive and noncompetitive prices and then concealed the conspiracy through various means, including code names, private email accounts and telephone numbers.

Parker ITR is charged with violating the Sherman Act, which carries a maximum fine of $100 million for corporations. The maximum fine may be increased to twice the gain derived from the crime or twice the loss suffered by the victims of the crime, if either of those amounts is greater than the statutory maximum fine.

Today’s charge is an example of the department’s commitment to protect U.S. taxpayers from public procurement fraud through its creation of the National Procurement Fraud Task Force. The National Procurement Fraud Initiative, announced in October 2006, is designed to promote the early detection, identification, prevention and prosecution of procurement fraud associated with the increase in contracting activity for national security and other government programs.

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A Virginia resident pleaded guilty today in connection with his role in a conspiracy to pay bribes to former Panamanian government officials, announced Assistant Attorney General Lanny A. Breuer of the Criminal Division, US Department of Justice.

John W. Warwick, 64, of Virginia Beach, Va., pleaded guilty before U.S. District Court Judge Henry E. Hudson in Richmond, Va., to a one-count indictment charging him with conspiring to make corrupt payments to foreign government officials for the purpose of securing business for Ports Engineering Consultants Corporation (PECC) in violation of the Foreign Corrupt Practices Act (FCPA). Warwick was indicted on Dec. 15, 2009. PECC, a company incorporated under the laws of Panama, was affiliated with an engineering firm based in Virginia Beach. According to the indictment, PECC was created so that Warwick, co-conspirator Charles Jumet, the engineering firm and others could corruptly obtain certain maritime contracts from the Panamanian government.

According to court documents, Warwick and Jumet participated in a conspiracy to pay money secretly to Panamanian government officials for awarding contracts to PECC to maintain lighthouses and buoys along Panama’s waterway. In December 1997, the Panamanian government awarded PECC a no-bid 20-year concession to perform these duties. Upon receipt of the concession, Warwick, Jumet and others authorized corrupt payments to be made to the Panamanian government officials.

In connection with his guilty plea, Warwick admitted that at least from 1997 through approximately July 2003, he, Jumet and others conspired to make corrupt payments totaling more than $200,000 to the former administrator and deputy administrator of the Panama Maritime Authority and to a former, high-ranking elected executive official of the Republic of Panama.

As part of his plea agreement, Warwick has agreed to forfeit $331,000, which represents the proceeds of this crime. At sentencing, scheduled for May 14, 2010, at 10:30 a.m. before Judge Hudson, Warwick faces a maximum of five years in prison and a fine of the greater of $250,000 or twice the gain or loss.

Jumet pleaded guilty on Nov. 13, 2009, to a two-count criminal information charging him with conspiring to make corrupt payments to foreign government officials for the purpose of securing business for PECC, in violation of the FCPA, and making a false statement. Jumet is scheduled to be sentenced on March 26, 2010.

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Balli Aviation Ltd., a subsidiary of the United Kingdom-based Balli Group PLC, has plead guilty in the U.S. District Court for the District of Columbia to a two-count criminal information in connection with its illegal export of commercial Boeing 747 aircraft from the United States to Iran.
Under the plea agreement, Balli Aviation Ltd. agreed to pay a $2 million criminal fine and be placed on corporate probation for five years. The $2 million fine, combined with a related $15 million civil settlement among Balli Group PLC, Balli Aviation Ltd., the U.S. Department of Commerce’s Bureau of Industry and Security (BIS), and the U.S. Department of the Treasury’s Office of Foreign Assets Control (OFAC), that was also announced today, represents one of the largest fines for an export violation in BIS history.
 

Under the terms of the related civil settlement, Balli Group PLC and Balli Aviation Ltd. have agreed to pay a civil penalty of $15 million of which $2 million will be suspended if there are no further export control violations. In addition, Balli Aviation Ltd. and Balli Group PLC are denied export privileges for five years, although this penalty will be suspended provided that neither Balli Aviation nor Balli Group commits any export violations and pays the civil penalty. Under the terms of the settlement, Balli Group PLC and Balli Aviation, Ltd. will also have to submit the results of an independent audit of its export compliance program to BIS and OFAC for each of the next five years.
 

According to count one of the information filed with the court, beginning in at least October 2005, through October 2008, Balli Aviation Ltd. conspired to export three Boeing 747 aircraft from the United States to Iran without first having obtained the required export license from BIS or authorization from OFAC, in violation of the Export Administration Regulations (EAR) and the Iranian Transactions Regulations. More particularly, the information states that Balli Aviation Ltd., through its subsidiaries, the Blue Sky Companies, purchased U.S.-origin aircraft with financing obtained from an Iranian airline and caused these aircraft to be exported to Iran without obtaining the required U.S. government licenses. Further, Balli Aviation Ltd. entered into lease arrangements that permitted the Iranian airline to use the U.S.-origin aircraft for flights in and out of Iran.
 

Count two of the information states that Balli Aviation Ltd. violated a Temporary Denial Order (TDO) issued by BIS on March 17, 2008, that prohibited the company from conducting any transaction involving any item subject to the EAR. Starting in or about March 2008 and continuing through about August 2008, Balli Aviation Ltd. willfully violated the TDO by carrying on negotiations with others concerning buying, receiving, using, selling and delivering U.S.-origin aircraft which went to the Export Administration Regulations.

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