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Management and Marketing Faculty Publications Department of Management and Marketing

1-1-2003 Caveat Emptor: Lessons from Volkswagen's Lemon Purchase Terence Lau University of Dayton, [email protected]

Follow this and additional works at: https://ecommons.udayton.edu/mgt_fac_pub Part of the Business Commons, Economics Commons, and the Law Commons eCommons Citation Lau, Terence, "Caveat Emptor: Lessons from Volkswagen's Lemon Purchase" (2003). Management and Marketing Faculty Publications. 60. https://ecommons.udayton.edu/mgt_fac_pub/60

This Article is brought to you for free and open access by the Department of Management and Marketing at eCommons. It has been accepted for inclusion in Management and Marketing Faculty Publications by an authorized administrator of eCommons. For more information, please contact [email protected], [email protected]. CAVEAT EMPTOR: LESSONS FROM VOLKSWAGEN’S LEMON PURCHASE T E R E N C E J . L A U

Claudius, the news that Rolls-Royce (and its Terence J. Lau is an assistant professor of INTRODUCTION sister Bentley) was being sold to German Business Law at the University of Dayton. automaker Volkswagen AG in 1998 and that He is the former in-house counsel to In the spring of 1998, German automobile arch-rival BMW would own the trademark Ford Motor Company, specializing in manufacturer Volkswagen AG paid almost to Rolls-Royce starting in 2003 was greeted international trade and transactions $1 billion for Rolls Royce but did not with derision and despair in Great Britain. practice, and former director of ASEAN acquire the Rolls Royce trademark, which The end result, however, was far from pre- Governmental Affairs, Ford Operations was ultimately sold to rival BMW for a mere ordained. Sloppy negotiating, abysmal due Thailand. $65 million. The story of Volkswagen’s diligence, and a rush to “get the deal done” led botched acquisition is a reminder of the to the incestuous relationship between BMW This article is an adaptation of text importance of careful due diligence when and Volkswagen, and the “children” of that prepared for remarks by the author at the engaged in international acquisitions. relationship: Rolls-Royce and Bentley. University of Dayton School of Law Fifth In Part I of this Article, Volkswagen’s To understand the convoluted history of Annual Licensing Intellectual Property steps (and mis-steps) are retraced and the Rolls-Royce/Bentley saga, it is important Seminar, March 20-21, 2003. solutions are offered for counsel engaged to trace the historical route the entities in international transactions with the hope involved took. Since 1904, when Henry provides a brief introduction to that control 3 that the practitioner with little experience Royce met Charles Rolls, Rolls-Royce has regime. Penalties for violations are stiff and represented the very best in British motoring in this area can avoid similarly embarrassing potentially ruinous, and enforcement is at an 1 and has set the world standard for vehicles and costly errors. all-time high due to security concerns. This For many small to medium-sized that catered to the ultra-rich. In 1931, Rolls- is information that all international counsel 4 companies, the task of expanding Royce purchased Bentley, and, thus, began a should be aware of, not just experts in the fruitful and prosperous relationship that saw internationally is a daunting proposition. field. In addition to the business equation, Rolls-Royce cater to the ultra high-end luxury the prospect of establishing a foreign market while Bentley (which often were subsidiary or forming a joint venture with a I. AN ACQUISITION GOES Rolls-Royce vehicles thinly disguised, i.e., no flying lady, formally known as the “Sprit of local partner is simply beyond the resource AWRY – WHERE WERE capabilities of many domestic enterprises. Ecstasy”) catered to the “sporty” end of the THE RADEMARK ICENSE Licensing is therefore an affordable and T L same niche market. Meanwhile, during the efficient way for companies to expand ATTORNEYS? Second World War, Rolls-Royce focused its overseas. Licensing comes in many attention on manufacturing aircraft engines, permutations and sizes but is essentially a Within a month, a venture that continued successfully after contract not to sue, by the licensor, as long Ere the salt of most unrighteous tears the war. In 1971, after financial difficulties as certain conditions are met. In addition Had left the flushing in her galled eyes, with product development of a jet engine to due diligence, therefore, international She married. O, most wicked speed, to post designed for use on commercial airliners, corporate counsel should be aware of With such dexterity to incestuous sheets! the entire company (then Rolls-Royce PLC) -- Hamlet (1.2.153-157)2 went into receivership, and the vehicle unique contracting issues that arise in 5 international intellectual property licenses. and aviation companies were separated. In Part II of this Article, recommendations When Will Shakespeare wrote Hamlet’s first Rolls-Royce Motor Cars Ltd., producing are offered on how to draft contract clauses soliloquy, he could not have foreseen a world both Rolls-Royce and Bentley vehicles, was for international licensing use. where his words would have significance for formed in 1973, and in 1980, was acquired by Finally, a discussion of licensing the breakup of one of the United Kingdom’s defense manufacturer Vickers PLC. During technology that is U.S. origin would not most venerable companies, Rolls-Royce. Just the 1971 receivership, however, Rolls-Royce be complete without a brief discussion as Hamlet despaired over his uncle’s murder PLC maintained ownership of the “Rolls- of the U.S. export control regime counsel of his father and his mother Gertrude’s Royce” trademarks and licensed the use of should be aware of. Part III of this Article subsequent marriage to the murderous the mark to Rolls-Royce Motor Cars Ltd. in a 1973 trademark license agreement. One of 3 CURRENTS WINTER 2004 the clauses in that agreement provided that included an ancillary deal to purchase Vickers’ Volkswagen, realized (or knew all along) while Rolls-Royce Motor Cars Ltd. would Cosworth engines subsidiary for an additional the trademark was worth more than the have the rights to manufacture Rolls-Royce $190 million.15 On June 5, 1998, Vickers assets and was not part of what Vickers and Bentley motor vehicles, Rolls-Royce shareholders agreed to the VW offer.16 PLC was selling, negotiated purchase of PLC would maintain exclusive control of the It seems axiomatic that in an acquisition the trademark from its rightful owner and Rolls-Royce mark in the event Rolls-Royce worth many hundreds of millions of dollars, longtime partner (one has to wonder if Motor Cars Ltd. (the licensee) was sold to a trademark attorneys would have been the sale of its aero engine joint venture foreign owner.6 integrated into the due diligence process in to Rolls Royce PLC in 2000 was part of By the late 1990’s, Rolls-Royce Motor order to identify the nature of the trademark the negotiations), and then delivered the Cars Ltd. had run into financial difficulties property owned by the target company. death blow to Volkswagen by cutting off and was having difficulty raising sufficient Arguably, in a company with storied past and supply of engines for critical products. The cash to invest in new product development. famous trademarks such as Rolls-Royce and end result: Volkswagen had paid almost The auto industry is notoriously unforgiving Bentley, the trademark is worth more than $800 million for a premium luxury car in terms of capital expenditure and absent the other assets purchased. It may also seem company but did not have the right to use high volume or high margins (preferably obvious that the transactional attorneys would its brand, had no engines, plunging sales, both), cash to invest in future product review material supply agreements prior to and inherited an ancient assembly plant and programs can be scarce. Meanwhile, Vickers closing to ensure the target company could cranky British workers. PLC, the motor company’s parent, was continue operating its business as it normally On July 28 that year, over a round of golf interested in pursuing strategic growth in would while the new owner integrated the at the Neuburg country club, Pischetsrieder marine, propulsion equipment, and turbine target into its own processes, which for an and Piech came to a compromise. components.7 Vickers, therefore, announced automobile company can take several years. Under the terms of a Memorandum of the sale of Rolls-Royce Motor Cars Ltd. in Alas, neither assumptions held true for Understanding, Volkswagen would retain 1997. Volkswagen’s acquisition team. the Bentley trademark, the factory in Crewe, At first blush, it may seem reasonable to a and its 2400 workers. BMW would own the buyer interested in the company to assume that The end result: Volkswagen had Rolls-Royce brand, but did not acquire the corporate entity held all the assets required any factories, employees, or other assets.20 to manufacture, distribute, and market Rolls- paid almost $800 million for a While BMW designed a new product and Royce and Bentley motor vehicles. On premium luxury car company built a factory in England (eventually built March 30, 1998, BMW announced a $560 in Goodwood), it would license the Rolls- million bid for Rolls-Royce Motor Cars Ltd.8 but did not have the right to Royce brand to Volkswagen until January BMW, then led by Bernd Pischetsrieder, had use its brand, had no engines, 1, 2003. It would also resume supply a long history with Rolls-Royce, both the plunging sales, and inherited of engines to Volkswagen to keep the aerospace engine company and the motor Rolls-Royce Silver Seraph in production. vehicle company. As far back as the early an ancient assembly plant and Starting in 2003 (when its new factory was 1990’s, BMW was supplying development cranky British workers. finished, workers hired, and new product services on engine chassis/body rigidity, (the “Phantom”) developed), BMW would paint technology, engine ancillaries, and air What followed next was a tripartite punch regain ownership and control of the Rolls- conditioning to Rolls-Royce Motor Cars Ltd.9 that surely takes the prize for spoiling an Royce brand. Graham Morris, the chief In 1990, BMW and Rolls-Royce PLC (keep acquirer’s post-transaction party. First, lawyers executive at Rolls-Royce Motors, who had in mind, a completely separate and unrelated for Rolls-Royce PLC notified Volkswagen of promised his staff that Bentley and Rolls- entity from the motor company) formed an the 1973 trademark license agreement and Royce would never be split apart, resigned aero engine joint venture in Germany.10 At firmly asserted its rights under the foreign- as “a matter of honor.”21 the time the sale was announced, BMW was ownership clause to retain exclusive control For Volkswagen’s Piech, the settlement supplying a V12 engine for Rolls-Royce’s of the Rolls-Royce trademark.17 Second, with BMW was acknowledgement of a Silver Seraph model and a V8 engine for the by July 9th, BMW delivered twelve-months costly and embarrassing error in business Bentley Arnage.11 An important detail in the notice that it would stop delivering engines to judgment.22 During a press conference, he 1994 engine supply agreement was BMW’s Rolls-Royce for the Silver Seraph and Bentley admitted that he would “have liked to have right to cancel the supply of engines with Arnage models.18 Third, at around the same kept both brands” and that the purchase twelve months notice if Rolls-Royce Motor time, BMW announced it had purchased the price would have been “much lower” if he Cars Ltd. was sold to another car company, Rolls-Royce trademark from its technology had known it would not have included the or three years notice if it was sold to a non- and manufacturing partner Rolls-Royce PLC Rolls-Royce trademark.23 motor vehicle manufacturer.12 for $65 million.19 One can only speculate We may never know what led Volkswagen A month later, led by Chairman Ferdinand at the behind-the-scenes strategic meetings to such a disastrous outcome. Any number Piech, Volkswagen AG made an offer occurring at BMW at this time. Led by of personal and business factors may for $720 million.13 In early July the offer Pischetsrieder, the company had made a bid have played a role, from Piech’s ego to a was increased to $795 million based on for Rolls-Royce to allow it to grow into ultra- lack of understanding of the nature of newer financial statements.14 The offer also premium market segments, been outbid by BMW’s relationship with Rolls-Royce

4 CURRENTS WINTER 2004 Motor Cars Ltd.24 On the legal team’s part, and its cranky workers).27 Looking back, he the law (and lawyers) can only do so the transactional attorneys who assisted in says, “The best stories are written by life. To much to protect a company’s invaluable the deal must have been scratching their a certain degree, I regret that I was so clever intellectual property. No quantum of collective heads over what went wrong. to get Rolls-Royce back from Volkswagen, but damages or relief, equitable or legal, Certainly, sloppy due diligence played a role. that’s the way it works.”28 With such dexterity could compensate the publication of the Whether as a result of not discovering the to incestuous sheets, indeed. formula of Coca-Cola on the Internet. key trademark licensing agreement or simply In spite of Volkswagen’s tale of horror, Clients who adopt too much of a “let the not reading all the documents gathered many companies still find a tremendous lawyers protect us” attitude will expose during due diligence, a clearer understanding amount of value in licensing their intellectual the company to unnecessary risk as they of the nature of the trademark license held property across borders. For many U.S. ignore non-legal solutions to any potential by Rolls-Royce Motor Cars under the 1973 companies, licensing a product or technology problems in protecting intellectual property. trademark license agreement with Rolls-Royce is the most cost efficient and quickest way Often, a licensee of technical information PLC and the 1994 engine supply agreement to distribute a product into a foreign market with BMW would almost certainly have saved where it does not have any experience in . . . [T]here is an important Volkswagen hundreds of millions of dollars. conducting business.29 The most common Second, there is an important lesson here for concern these licensor companies face is lesson here for transactional transactional attorneys who rely too heavily on how to prevent the licensee from using attorneys who rely too heavily a seller’s representations and warranties rather the intellectual property forever without than on due diligence. While the purchase paying anything either by law, refusal by on a seller’s representations agreement (whether stock or asset) between local authorities to enforce the law, or just and warranties rather than Volkswagen AG and Vickers PLC no doubt because. The following contract provisions on due diligence. contained customary representations and may address some of these concerns, but ultimately the ability of a licensor to prevent warranties on what Volkswagen was getting has some other business relationship the misappropriation or infringement of its for its $790 million, a long and protracted with the licensor, such as seller or buyer. intellectual property in a foreign jurisdiction court battle over Vickers PLC would almost Changes to the business relationship that is a vexing problem that may have no certainly have meant an interruption in would result from a breach of the license satisfactory solution. production of the Silver Seraph and Arnage agreement will often have more persuasive since a court battle would not have resolved effect on a licensee’s compliance with BMW’s termination of the engine supply II. CONTRACT PROVISIONS TO the terms and conditions of a license agreement. Rolls-Royce risked further CONSIDER agreement than the remedies provided alienation of its loyal customers if there was therein, and your business client is a critical a further deterioration of its precious brand Before considering licensing intellectual component in dimensioning that context image. Once the extent of the damage was to the licensee. uncovered, therefore, Volkswagen had little property to a licensee in another country, an initial question should be whether or not the The following are contract provisions to choice but to compromise with BMW and consider while drafting a license agreement salvage what it could from its $790 million laws of the licensee’s jurisdiction provide the same level of protection for the intellectual for licensing intellectual property across purchase. A tough way to learn the lesson borders. 25 property you are seeking to license as the caveat emptor. Definitions. Most license agreements There is an epilogue to the story between United States. While licenses are essentially contracts, many jurisdictions lack the same rely on the use of capitalized defined the two executives most involved with terms, so the manner of definition is the acquisition, Pischetsrieder and Piech. common law jurisprudence on contracts that the United States enjoys, and thus, sanctity critical. The most critical definition in Pischetsrieder, in spite of his victory in the license agreement is the definition winning Rolls-Royce over Volkswagen, was of contract and the parties’ intent when 30 of the item or technology to be licensed. fired a year later from BMW over his handling contracting may be overlooked. As a matter of public policy, a foreign jurisdiction may The rights being licensed should also be of another (not quite as successful) BMW 33 choose not to enforce a license agreement if defined in no uncertain terms. Carve acquisition, that of Rover (otherwise known exclusions for derivatives, new designs, or in the industry as “The English Patient”).26 the subject matter licensed is not protected under local law since in most jurisdictions improvements of the item or technology. Piech (who took a liking upon Pischetsrieder’s On the other hand, if licensee improves negotiation and strategic skills that faithful day contracts contrary to public policy are void ab initio.31 If the level of protection for the upon the licensed technology or item, the in July on the golf course), upon hearing of agreement should address which party has Pischetsrieder’s ouster, immediately offered subject intellectual property in the licensee’s jurisdiction is nonexistent or insufficient, then ownership of such improvements (i.e., a Pischetsrieder a job at Seat, Volkswagen’s grant-back clause).34 When defining the Spanish subsidiary. Within two years, contract drafting becomes even more critical, particularly choice of law and forum clauses technical information to be used by the Pischetsrieder had taken over Piech’s job as licensee, an exception should be made chief of Volkswagen, thus, inheriting the in countries that recognize and enforce 32 to exclude technical information that if newly christened Bentley Motor Cars Ltd. foreign arbitration awards. In addition, clients should be counseled used by licensee would result in licensor (not to mention that old factory in Crewe incurring an obligation to a third party or 5 CURRENTS WINTER 2004 breaching a confidentiality obligation to a expenses (i.e., hourly rate, level of employee license, even if the term is a defined length third party. sent for support, business class airfare if of time.46 At-will termination is a knife Contract territory. One of the principal long distance travel is involved), and payment that can cut two ways and may be illegal worries in licensing intellectual property is if terms.39 in some jurisdictions. If termination is something were to occur that would cause a Registration requirements. Some foreign only permitted upon a material breach, breach or leak of intellectual property within jurisdictions require license agreements, will there be an opportunity to cure, and if a particular jurisdiction, that breach or leak particularly those involving intellectual so, how long will such opportunity last?47 should be “contained” within the national property, to be registered with local authorities The parties’ obligations upon termination, borders of the licensee’s jurisdiction. This in order to be enforceable.40 If legal, consider no matter how the termination occurs, is especially true if the licensee is near or a pro forma version of a license agreement should be addressed. At a minimum, the contiguous to a major market for your client. with the minimum amount of information licensed technology should be returned If the leak spills over into a high volume necessary to register if the client wishes to and destroyed and cessation of use of keep other terms and conditions secret. If the licensed technology should occur 48 . . . [A]n initial question should the licensee is an affiliated company of the immediately upon termination. The licensor (i.e., technology holding companies), license agreement must spell out that any be whether or not the laws care should be taken not to trip any non-use confidentiality obligations that run with of the licensee’s jurisdiction statutes. Sometimes this problem can be the licensed technology shall survive any solved by registering agreements in foreign termination for the agreed length of the provide the same level of jurisdictions. confidentiality obligation.49 Bankruptcy or protection for the intellectual Use restrictions. The licensor should clearly insolvency of the licensee should give rise property you are seeking to define what uses the licensed technology may to immediate termination by the licensor be used for and exclude all non-defined without liability.50 Finally, consider a clause license as the United States. uses.41 In addition, the licensor should seek to similar to the one used by BMW in its 1994 restrain transfer of the licensed technology in engine supply agreement that permitted market, the damage from the breach may be all circumstances and may consider liquidated BMW to make life unpleasant when much higher than if it is contained. A strong damages in the event of such a transfer. Due an acquisition or change or ownership definition of the contract territory is a good diligence is called for here. If a jurisdiction occurred.51 Do not forget to account for place to start in this containment strategy.35 does not permit restraints on transfers of changes in ownership that come about Within the scope of the license grant, licensed intellectual property, the client may either through stock purchase or asset language should make it clear the licensee wish to revisit the scope of the license granted purchase. has the right to use (and/or sell) the licensed or negotiate a lower price for accepting a Compliance with U.S. export controls. technology within the contract territory only. higher risk of leakage. While some licensees may raise questions Local counsel should be consulted to ensure Product labeling. If the licensee is permitted about this clause, it is critical as part of the enforceability of a no re-export provision to use the licensor’s trade name or trademark your client’s export compliance efforts under a jurisdiction’s antitrust or competition under the license, the extent of use should that licensees are made aware of your laws.36 be clearly defined. Drafting should also obligations with regards to controlled Extent of licensed rights. Licenses can provide if the agreement is assigned under technology or software.52 run the gamut, from exclusive, royalty free, any circumstances, the right to use such trade Confidentiality clause. This clause is worldwide, perpetual, fully transferable, name or trademark ceases immediately. essential. Consider limiting individual to non-exclusive, non-transferable, to use Payment terms. Payment terms, while persons and companies that will have access a limited amount of IP in a very specific generally a business matter for the client to the licensed intellectual property (i.e., territory, or for a limited time.37 If the license to negotiate, should be structured carefully which employees and subcontractors). All is to be non-exclusive, a clause should be under applicable local laws.42 The parties information exchanged with the licensee inserted expressly reserving the right of the should specify what currency the fees will should be deemed confidential unless licensor to use and sell the licensed technology be paid in and which conversion rate(s) otherwise marked in writing or if disclosed within the contract territory.38 will apply.43 The frequency of payments, orally, is followed up with an exception in If the license of intellectual property is level of accounting to be kept by licensee, writing. The duration of the confidentiality being granted to a joint venture company, and the licensor’s right to audit should be obligation should be identified,53 and the great care should be taken to control the flow addressed. If licensor is to provide support clock should only start at the moment of information to the joint venture itself and services during the term of the agreement, of disclosure. Finally, the agreement not to the partner, especially if the partner is those payment terms should be addressed as should protect for the licensor’s decision a state owned company or affiliated with a well.44 Finally, consider whether the payment to withhold information, without being in foreign government. structure raises any issues related to creating breach of agreement, until satisfied with Obligation to support. If licensor will have a permanent establishment for tax purposes licensee’s intellectual property secrecy an obligation to support licensee’s use of the in the licensee’s jurisdiction.45 measures.54 licensed technology, issues to be addressed Termination clauses. Careful consideration Assignment. Licensor should reserve include when such support may be invoked, should be given to how to terminate the the right to assign to affiliated company in

6 CURRENTS WINTER 2004 case of reorganization i.e., for tax purposes. licensee pay the licensor’s taxes and deliver thereof. Licensee is generally not permitted to assign tax receipts and should address the issue of Severability, integration, nonwaiver of for any reason to any entity. offsetting taxes due with royalty or payments remedies, amendments. These “boilerplate” Representations and Warranties. Licensee due. Local counsel should be consulted on clauses, while taken for granted in the U.S., may seek warranties about the intellectual the legality of shifting licensor’s tax burden may provide important protections for the property being licensed, especially with to licensee.59 Finally, licensors should seek licensor, especially in jurisdictions where regards to potential infringement claims from strong indemnification for tax claims against both business practices and local law third parties.55 Licensor should seek to limit licensor. reflect a different approach to business the scope of these warranties.56 The strongest Choice of Law. Sometimes, in spite of negotiations than American mores. warranty would be “Licensor’s activities do not careful drafting and relationship management, Language. Finally, the license agreement infringe on any third party’s rights.” A weaker intellectual property may be compromised, should provide for which language of form of the same warranty would be “To and a foreign jurisdiction may refuse to the license agreement should control the best of Licensor’s knowledge, Licensors’ protect what would otherwise be protected interpretation in the event translations are activities do not infringe on any third party’s under U.S. law.60 Under some circumstances, made.64 The agreement should also address rights.” Finally, the weakest warranty would a choice of law clause may be the saving what language technical information and be “Licensor has not received any written grace. If a jurisdiction enforces arbitration licensed technology will be made in as well notice that its activities infringe a third party’s clauses, getting the dispute into a friendly as the language of correspondence and rights.” Especially in the area of software arbitral forum that will recognize U.S. law notices among the parties. development, the licensor should ensure it is on intellectual property and then seeking In addition to careful drafting of licensing the rightful owner of any copyrighted works. enforcement of any subsequent arbitral agreements to account for local variances If the software was not created as work for award in a foreign jurisdiction may be in law and practice, counsel should also hire, for example, assignment of title needs the ticket.61 Before deciding on a choice give careful consideration to the effects of to be effected before licensor can license of law clause, counsel should consider U.S. laws on the technology to be exported the software. If licensee seeks warranties what governing local law says about the as well as the destination of certain on the registration of intellectual property duration of license agreements, royalty rates, exports. The following section provides where registration is required, licensor should ownership of intellectual property after an overview of these laws, many of which limit the scope of the warranty to exclude termination, government registrations or have extraterritorial application and may registrations “duly granted” or “valid” as they approvals, export restrictions in the license, apply to non-U.S. entities. assume additional undertakings beyond mere trademark usage restrictions or requirements A Licensing Alternative. If a license registration. Both parties should also pay in the license, obligation to provide future agreement is essentially a covenant not close attention to the effect of exceptions to improvements in the technology (incremental to sue, an interesting alternative to a any warranties that are disclosed on separate vs. breakthrough), and withholding taxes on license agreement may be appropriate schedules. These exceptions fall outside the royalties (who is obligated to pay and what if in certain limited circumstances. This scope of the warranty being provided, and licensee withholds and doesn’t pay). Some alternative involves relying solely on the the schedules are often not delivered until jurisdictions will ignore choice of law and law of contracts to protect the intellectual signing of the license agreement is imminent, apply local licensing laws, in which case a property owner’s rights, sidestepping local when the business client is least likely to clause on conflicts of law may be helpful.62 laws (i.e., on withholding taxes, registration, want to re-open negotiations on the basis of Arbitration. Depending on the licensee’s ownership, and alienability rights) on an unexpected exclusion to a warranty. Of jurisdiction, arbitration may be a necessity license agreements altogether. Such an course, warranty language raises issues on in the event of a dispute.63 Counsel should alternative is most appropriately found in opinion letters and indemnification, which advise clients, however, that choice of law a global franchise or sales and distribution are beyond the scope here. and forum clauses only bind the original agreement, and is most appropriate when Sublicenses. If the licensor will permit licensee. If the licensed intellectual property there are a large number of agreements to sublicensing of the intellectual property to is compromised to non-parties, licensor will enter into, in multiple jurisdictions. second or third tier suppliers (i.e. suppliers have to rely on national law enforcement Sample language in this license alternative to the licensee), how will enforcement of the for protection of its intellectual property may include: license terms on such suppliers be effected? rights – not an attractive proposition in some “The Distributor shall not contest the right of the Actions upon termination (i.e. destruction jurisdictions. [Principal] to the exclusive use of any trademark or trade name used or claimed by the [Principal], and return of the intellectual property No agency, dealership, or franchise. This and upon written request of the [Principal], the and cessation of use) should run to these clause is important in order to prevent a foreign Distributor shall immediately cease or modify, as sublicensees as well as the licensee.57 jurisdiction from imposing onerous agency requested by the [Principal], any use or infringement Taxes. The burden of paying income, protection statutes upon the licensor. by the Distributor of any such trademark or trade name. The Distributor shall not have or acquire, withholding, stamp, registration, turnover, Non-compete clause. As part of the license either by usage, custom or operation of law, any value added, and other charges should be grant, the client may wish for business reasons right to [Principal’s] trademark, trade name, coined addressed.58 Be careful of undervaluing the to consider a non-compete clause to bind word, or combination.” intellectual property for purposes of reducing the licensee for the license term. Be sure to Caution is advised, however. Such the taxable basis. Licensors should demand check with local counsel on the enforceability contract language, while serving to put

7 CURRENTS WINTER 2004 the distributor or agent on notice about advised to seek counsel who are well versed U.S. or local law. Other sanctions regimes, the intellectual property owner’s rights, and well practiced, however, as the nuances while not directly applicable to foreign- may not hold up to scrutiny under analysis and subtleties in agencies’ interpretation incorporated subsidiaries of U.S. companies by a local court if it is deemed to evade of the applicable law can change with the (they still apply to foreign branches of U.S. (and possibly violate) local laws relating to political winds. This section will deliver an companies and U.S. citizens everywhere), license agreements. It can also invite many introductory overview of the most important prevent the “approval” or “facilitation” questions, as it is unfamiliar to most foreign export control laws which all intellectual of prohibited transactions by U.S. parent practitioners, even those who practice property counsel should be familiar with. companies and U.S. employees. OFAC intellectual property licensing. Nonetheless, takes an extremely broad application of such contract language may fit the bill for the OFFICE OF FOREIGN ASSETS CONTROL these words – caution is strongly advised. 68 narrow purposes described above. (“OFAC”) OFAC also maintains sanctions against entities deemed to be hostile to U.S. The Treasury Department’s OFAC III. EXPORT CONTROLS: BIS, interests. Currently, these regimes’ targets administers trade sanctions and embargoes include narcotic traffickers, the Taliban, 65 OAC, OFAC AND DTDC against particular countries and entities. terrorists, and proliferation of weapons of Currently, countries subject to economic mass destruction. OFAC also maintains a Most exports out of the United States, sanctions include the Balkans, Burma list of “Specially Designated Nationals” including exports of technology and (Myanmar), Cuba, Iran, Iraq, Liberia, Libya, 69 and “blocked persons” that persons and intellectual property via licensing, do not North Korea, Sudan, and Zimbabwe. entities subject to OFAC jurisdiction must require any sort of specific approval from the Permitted activities differ under each not deal with and block assets of.76 The U.S. government.66 Exporting, however, is a country’s sanctions regime and range from list of governments, companies, persons privilege, not a right, and what the government a “soft” embargo (i.e. Liberia, where the and organizations that are off-limits to giveth, the government can taketh away. sanctions regime seeks to limit imports of 70 persons subject to U.S. jurisdiction changes Before the terrorist attacks of September rough diamonds into the United States and constantly, and companies of all sizes 11, 2001, the U.S. export control regime was Zimbabwe, which seeks mainly to prevent involved in trading activities must maintain treated by most attorneys as a wayward child. President Robert Mugabe and his family strong compliance programs including the It was something to keep in mind, but not and senior officers from entering the United use of automated screening software.77 something to be overly concerned about. States)71 to a complete trade embargo (i.e. 72 As many of these entities are based in the That child has grown up now, and it demands Cuba) . Special care should be taken with the United States, even companies that conduct the full attention of all counsel involved in Cuban regime sanction (based on the Trading business exclusively in the United States cross-border transactions, including (and With the Enemy Act), which expressly applies should be checking their customers against in some cases, especially) international to foreign subsidiaries and branches of U.S. OFAC’s lists.78 intellectual property licensing. Increased companies, wherever located,73 and includes a 74 OFAC maintains a compliance hotline enforcement vigor by a U.S. government with travel ban to Cuba. Special attention should that allows companies and individuals a laser-focus on national security means that be paid to Trading With the Enemy Act-based with questions to speak with a compliance U.S. companies must continue to pay extreme officer. Calls are ostensibly handled on heed to export controls and trade sanctions Exporting . . . is a privilege, a confidential basis. Counsel is advised, 67 for the foreseeable future. not a right, and what the however, to either block caller identification From a legal perspective, the U.S. export systems or to seek information via outside control regime is fairly complicated but government giveth, the counsel, in order to maintain complete not indecipherable. Interpretation of gray government can taketh away. confidentiality and the privilege. In areas within the rules (and there are many) addition, do not expect OFAC compliance often will result in the most conservative sanctions programs (which apply to the officers to interpret the law more clearly interpretation possible by government Cuban, North Korean, and certain portions than what is already publicly available. agencies (especially when asked to put it in of the Iranian sanctions programs) due to the One OFAC spokesman, when asked how writing), a result that would almost certainly heavy penalties associated with violations.75 fines were determined in a case involving grind a significant amount of commerce to The sanctions regimes administered by OFAC the importation of Cuban cigars in 2000, a halt. On the other hand, an overly cavalier are made even more confusing by recent unhelpfully replied, “There are a variety of attitude towards the regime will almost actions relaxing the export of agricultural ways to determine the fine.”79 In another certainly deliver consequences of the most and in some instances, medical products case, job search assistance website Monster. unpleasant variety – negative publicity, heavy to sanctioned countries. These exports are com decided it had to scrub mention of fines, and the possibility of prison sentences. tightly regulated and prior approval by OFAC OFAC-sanctioned countries from all its With practice, most attorneys can become is necessary. “Blocking” legislation designed online resumes, resulting in charges of skilled at navigating the various statutes, to prevent the extraterritorial reach of U.S. law discrimination from Americans of Iranian regulations, and agencies that administer and on foreign-incorporated entities may create descent.80 OFAC, while claiming it did enforce the regimes. Counsel who do not an uncomfortable situation for a foreign not ask Monster.com to make the move, practice in this area on a regular basis are subsidiary faced with the choice of disobeying insisted that the company had interpreted

8 CURRENTS WINTER 2004 the law correctly.81 Most compliance officers Administration Regulations (“EAR”),89 which the antiboycott provisions of the Internal will answer questions broadly, err on the control the export of dual-use items (dual-use Revenue Code. Both laws seek to prohibit side of conservative interpretation, and items are those that have both military and U.S. companies from complying with the recommend the filing of a license application commercial applications). Every export out Arab League boycott of Israel.95 to obtain a definitive answer. of the United States is potentially subject Counsel are often asked by clients to predict to the EAR. Additionally, exports from DIRECTORATE OF DEFENSE TRADE 96 when sanctions against a particular country countries other than the United States are CONTROLS may be lifted. Such tea-leaf reading is a subject to the EAR if they are re-exports of dangerous task when it comes to sanctions U.S.-origin commodities and technical data, The Directorate of Defense Trade on regimes for the political winds can contain U.S.-origin parts and components Controls (formerly Office of Defense shift suddenly. For example, the Burmese used in the manufacture of a foreign end- Trade Controls, or OTDC) administers the International Traffic in Arms Regulations sanctions regime prohibited, for a long time, product (subject to de minimis exceptions), 97 new investment in Burma while permitting non-U.S. produced direct products that (“ITAR”). The ITAR seeks to control the exports and imports.82 After the arrest of result from U.S.-origin technical data, or export of defense articles and services, as commodities produced by a plant or major listed on the United States Munitions List (“USML”).98 Companies which seek to Counsel are often asked component of a plant located outside the United States that is the direct product of export or re-export items on the USML by clients to predict when U.S.-origin technology or software.90 Analysis must obtain prior permission from the sanctions against a particular under the EAR typically asks five questions: DDTC. Additionally, licenses must be (1) What are you exporting? (2) Where is it obtained before importing, even on a country may be lifted. Such going? (3) Who is the ultimate end-user? (4) temporary basis, certain items. Companies tea-leaf reading is a dangerous What is the ultimate end use of the product? wishing to apply for a license must first register with the OTDC. Registration is task . . . and (5) What else does your end-user do, such as contracting or financing?91 Depending a simple process, but must be undertaken on a regular basis in order to prevent Nobel Peace Prize winner and winner of on the answers to these questions, an export license may be required before shipment. registrations from lapsing. the last democratic election Aung Sung Suu Special care and attention should Kyi, the United States tightened the sanctions Additionally, information from the EAR is usually required to complete a Shipper’s be paid by companies seeking to enter noose around Burma with Congressional 92 into license agreements to provide a passage of the Burmese Freedom and Export Declaration (“SED”). One area of particular concern surrounds defense service. Such agreements may Democracy Act of 2003 on July 23, 2003, and include manufacturing license agreements, an Executive Order the next day, prohibiting that of “deemed exports.” Under the “deemed export” rule, an export can occur technical license agreements, distribution the import of any “product of Burma” and agreements, or off-shore procurement the export of financial services to Burma.83 within the borders of the United States if covered technology or source code is released agreements. These agreements may not A final word of caution, OFAC has recently enter into force without approval from announced a rule that would make disclosures to a covered foreign national (i.e., a tourist, student, employee, or academic). Care should DDTC and must be deposited with DDTC. of identities of companies that have settled In addition, the agreements must contain allegations of violations of the sanctions be taken in any licensing arrangement to ensure the burden of compliance with the a certain level of information including regimes.84 These disclosures occur even if a statutorily-prescribed clauses.99 company voluntarily disclosed an inadvertent EAR (including the deemed export rule) is violation (most often this occurs when a clearly spelled out. Last year, BIS commenced foreign subsidiary, without malicious intent, the first criminal prosecution based on the CONCLUSION engages in some form of prohibited conduct deemed export rule by seeking indictment of or when a U.S. parent company provides some two California companies and their presidents By and large, negotiating and drafting for “exporting” controlled technology to international intellectual property licenses form of support or facilitation to such foreign 93 affiliate) and even if a company denies any Chinese nationals in the U.S. is an enjoyable practice for most attorneys. wrongdoing and has not been adjudicated Unlike joint ventures or distributorships, OFFICE OF ANTIBOYCOTT COMPLIANCE these licensing arrangements almost always responsible in any administrative tribunal or (“OAC”) court. This rule is fresh out of the comment involve a “win-win” business relationship between licensor and licensee. While phase,85 and OFAC has started publishing Anyone doing business (not merely the identities of alleged violators.86 Public horror stories can be found especially in the exporting, but conducting all aspects of area of licensing in a merger or acquisition recriminations against the companies involved business including negotiations) with persons quickly followed.87 context or complying with the U.S. export or entities in the Middle East needs to be control regime, careful attention to drafting, mindful of U.S. antiboycott laws. The OAC, due diligence, and legal compliance will BUREAU OF INDUSTRY AND SECURITY actually a division of BIS, administers the (“BIS”) 94 go a long way to mitigate those risks and antiboycott provisions of the EAR , while concerns and keep the ghost of Hamlet’s The BIS 88 administers the Export the Internal Revenue Service administers father away for a very long time.

9 CURRENTS WINTER 2004 END NOTES

1. In addition to the acquisition costs mans, the Story of Rolls-Royce’s Expedited Arbitration Rules, 9 AM. party may bear an unanticipated eco- involved for both Volkswagen and Phantoms Has All the Makings of REV. INT’L ARB. 3, 6 (1998). nomic loss. Id. BMW, the consumer confusion an Automobile Soap Opera, THE 33. See, e.g., Limpert et al., supra note 59. See Horowitz & Proctor, supra note surrounding the transaction and STRAITS TIMES (SINGAPORE), Jan. 8, 30, at 214. 34, at 64. future ownership of Rolls-Royce 2003, at Life! Section. 34. Ethan Horowitz & Goodwin Proc- 60. See Peterson, supra note 29, at 248. caused an immediate plummet 21. Cowell, supra note 6, at D1. tor LLP, Advanced Licensing Agree- 61. See id. Sometimes it becomes neces- in sales for the brand. See, e.g., 22. See, e.g., Tom Buerkle, BMW Wrests ments, Patent & Technnology Li- sary to enforce a U.S. judgment in a Alex Taylor, BMW Takes Its Own Rolls-Royce Name Away from VW, censing, 775 PRAC. L. INST./PAT., foreign jurisdiction, and sometimes Route, FORTUNE, Oct. 26, 1998, at INT’L HERALD TRIB., July 29, 1998, at COPYRIGHTS, TRADEMARKS, the courts in those jurisdictions will 159. 6; see also English, supra note 3, at AND LITERARY PROP. COURSE not recognize U.S. choice of law 2. WILLIAM SHAKESPEARE, HAMLET act 3 (remarking Piech looked noticeably HANDBOOK SERIES 43, 50-51 provisions. Id. However, arbitration 1, sc. 2 “glum” at the press conference). (2004). clauses for intellectual property are en- 3. Andrew English, What a Carve-up! 23. Merger Zeirgeist, AUTOWEEK, Aug. 35. Limpert et al., supra note 30, at forceable virtually world-wide as over Ever wondered How Britain’s Most 10, 1998, at 2. 202. one hundred countries of the 1958 Famous Motor Maker Ended Up in 24. Such factors are beyond the scope 36. Peterson, supra note 29, at 248. New York Concention have approved the Hands of the Germans?, THE of this article. See genrally English, 37. Id. at 229. intellectual property ratification. Smit, DAILY TELEGRAPH (LONDON), Jan. supra note 3, for further theories. 38. See Ethan Horowitz, Licensing supra note 32, at 6. 4, 2003, at 3. 25. Caveat emptor is the maxim stating: Technology: Patents and Know- 62. See Peterson, supra note 29 at 248. 4. Id. Let the buyer be aware. See White How, 692 PRAC. L. INST./PAT., 63. See Limpert et al., supra note 30, at 5. Id. Lies of Advertisers Might Not Be So COPYRIGHTS, TRADEMARKS, 198. 6. Alan Cowell, A Rolls by Any Little, BANGOR DAILY NEWS, AND LITERARY PROP. COURSE 64. Horowitz & Proctor, supra note 34, Other Name?; BMW-VW Accord Apr. 12, 2004, at C13. HANDBOOK SERIES 419, 430, at 64. When contracts are drafted in for Luxury Car Maker Hinged on 26. Andrew English, The Wheel of 435 (2002). more than one language, ambiguities Legendary Trademark, N.Y. TIMES, Fortune, THE DAILY TELEGRAPH 39. Peterson, supra note 29, at 240. in interpreting provisions can result. Aug. 7, 1998, at D1. (LONDON), Sept. 15, 2001, at 1. 40. Limpert et al., supra note 30, at To avoid such ambiguities, Licensor 7. See, e.g., Andrew Lorenz, Vickers 27. Id. 196. should mandate in the event of dis- Deal Puts Rolls on New Course, 28. Id. 41. Id. at 201-202. putes, the language version licensor is SUNDAY TIMES (LONDON), Sept. 26, 29. See, e.g., Gale R. Peterson, Overview 42. Id. at 203-204. most comfortable with is the control- 1999, at Business Section. Another of Intellectual Property, 762 PRAC. 43. Id. at 205-206. ling version. Id. at 64-65. twist of irony to this tale occurred L. INST./PAT., COPYRIGHTS, 44. Peterson, supra note 29, at 240. 65. Major websites related to U.S. govern- when Rolls-Royce PLC, which in TRADEMARKS, AND LITER- 45. Limpert et al., supra note 30, at ment agencies with responsibility for 1999 was completely out of the ARY PROP. COURSE HAND- 195. administration and enforcement of motor vehicle business, acquired BOOK SERIES 11, 209 (2003) 46. See Peterson, supra note 29, at 245- U.S. export control regimes are linked Vickers PLC, the former owner of (giving examples of why it is ben- 46. The fact that due consideration at http://www.bxa.doc.gov/reslinks. Rolls-Royce Motor Cars Ltd. See eficial for both local and national should be given in terminating the htm (last visited April 2004). id. companies to use licensing as way license is supported in the article 66. Patterson Brown, Technical Advice 8. Cowell, supra note 6, at D1. to expand their market). as it finds the licensor’s ability to for U.S. Exporters, Website for the 9. English, supra note 3, at 3. 30. See Bradley Limpert et al., The terminate license is important. See Trade Information Center, at http:// 10. Rolls Royce PLC, A Brief History, Licensee is Here, the Licensor is id. infoserv2.ita.doc.gov/ticweb (last at http://www.rollsroyce.com/his- There, and the Factory is in Indo- 47. See id. at 246. modified April 2002). tory/brief/default.htm (visited nesia: Global Considerations and 48. See id. at 248. 67. See William New, Pushing Out the March 1, 2003). Concerns, 87 A.L.I.-A.B.A. 159, 184 49. Id. at 247. Borders, 34 NAT’L J. NO. 51 (2002) 11. Cowell, supra note 6, at D1. (2003) (stating a frequent problem 50. Id. at 246. (describing the Bush administration 12. English, supra note 3, at 3. with countries of former “closed” 51. English, supra note 3, at 3. efforts to reduce vulnerability to at- 13. Garrick Holmes, A Vintage Year economies is contractual obligations 52. Horowitz & Proctor, supra note 34, tack from WMDs). for European M&A: Deregulation were quite scanty, as many issues at 64. 68 OFAC’s website can be located at and the Imminence of Unification relating to the contracting parties 53. Peterson, supra note 29, at 243. http://www.treas.gov/offices/en- Drive the Flow Deal, 33 MERGERS would be resolved by political or 54. Id. at 243. Both parties should know forcement/ofac (last visited April & ACQUISITIONS 16 (Mar. 1, 1999). bureaucratic means). the duty of care owed in monitoring 24, 2004). 14. Id. 31. See Peterson, supra note 29, at confidentiality. Id. 69. See R. Richard Newcomb, Coping 15. Id. 248. 55. Id. at 249. Certainly, the licensees will with U.S. Export Controls, 2003 16. English, supra note 3, at 3. 32. See id. Sometimes it becomes neces- want an express warranty of title. Export Controls & Sanctions: What 17. Cowell, supra note 6, at D1. sary to enforce a U.S. judgment in a Id. Lawyers Need to Know, 857 PRAC. L. 18. Id. foreign jurisdiction, and sometimes 56. Id. at 250. Licensors typically resist INST./COM. L. & PRAC. COURSE 19. Id. the courts in those jurisdictions will express non-infringement clauses, HANDBOOK SERIES 653, 774 20. A result no doubt planned by not recognize U.S. choice of law especially if the technology is new, in (2003). BMW. It allowed BMW to develop provisions. Id. However, arbitration a “crowded art”, or if infringement 70. Tracey M. Price, The Kimberly Pro- a new flagship Rolls-Royce product clauses for intellectual property are analysis is difficult due to developing cess: Conflict Diamonds, WTO Ob- without any ties to what it consid- enforceable virtually world-wide law. Id. ligations, and the Universality Debate, ered to be antiquated resources. As as over one hundred countries of 57. Limpert et al., supra note 30, at 12 MINN. J. GLOBAL TRADE 1, 43 the new Rolls-Royce CEO Tony the 1958 New York Convention 202. (2003). Gott indicated, “All we had was a have approved intellectual property 58. See id. at 195. Unless tax withholding 71. John B. Reynolds, III, et al., Export wonderful brand and a blank sheet ratification. Robert H. Smit, General and other tax issues are addressed Controls and Economic Sanctions, of paper.” Quoted in Leow Ju- Commentary on the WIPO Arbitra- early on in the negotiation of the 37 INT’L LAW 263, 272 (2003). Len, Opera of the Phantom; Built tion Rules, Recommended Clauses, transaction while the economic 72. David Mowry, Lifting the Embargo by Brits, Fought Over by the Ger- General Provisions and the WIPO terms are being determined, one Against Cuba Using Vietnam as A 10 CURRENTS WINTER 2004 Model: A Policy Paper for Moder- Emergency Persists: The Limited Ef- COURSE HANDBOOK SERIES nity, 25 BROOK J. INT’L L. 229, ficacy of U.S. Investment Sanctions 807, 847-48 (2002) (stating OAC 229 (1999). in Burma, 9 PAC. RIM. L. & POL’Y administers antiboycott provisions 73. See, e.g., U.S. v. Brodie, 268 F. Supp. J. 317, 328, 336 (2000). under EAR). 2d 408 (E.D. Pa. 2002) (imposing 83. Josh Kruskol, Legislative Watch/ 95. Breed, supra note 94, at 196-97. a criminal conviction against a U.S. Legislative Focus, 11 NO. 2 HUM. 96. The Directorate’s website is located citizen on conspiracy charges in- RTS. BRIEF 38, 39-40 (2004). at http://www.pmdtc.org volving selling to Cuba in violation 84. Such a disclosure occurred in July 97. See U.S. Department of State of the Trading with the Enemy Act 2002 pursuant to FOIA request, website at http://www.pmdtc.org/ and the Cuban Asset Control Regu- but this new rule makes disclosures whoweare.htm (last visited Apr. 23, lations. With the use of Canadian a regular part of OFAC’s business. 2004). and British affiliates, the conviction See., e.g., Anitha Reddy, Ikea, Tyson 98. See U.S. Department of State was later overturned by trial judge Foods, Among U.S. Embargo Viola- website at http://www.pmdtc.org/ on insufficiency of evidence). tors, WASHINGTON POST, Jul. 3, 2002, whoweare.htm (last visited Apr. 23, 74. A ban that is currently fully en- at E1. 2004). forced. See Rafael Lorente, Trav- 85. See http://www.treas/gov/officces/ 99. See 22 C.F.R. § 124 et seq. (2000). elers Who Went to Cuba Will enforcement/ofac/interim/civpen. Face Judge; Ignoring Critics, the html for received comments on the Administration Will Begin Hear- rule. ings That Could Mean Big Fines, 86. See http://www.treas.gov/offices/ ORLANDO SENTINEL Nov. 9, enforcement/ofac/civpen/penal- 2003, at A19. ties 75. OFAC has proposed increasing 87. See, e.g., Rex Nutting, U.S. Com- these penalties to include $1 mil- panies Quietly Caught Trading lion fines for companies and ten With the Enemy, at http://cbs. year prison terms for individuals. marketwatch.com/news/story. See Managing Exports Miscellany, asp?guide={4CFAC07E-D176- MANAGING EXPORTS, Dec. 2003, at 42B2-A276-EFF1A8B9A452}&s 8. iteid=mktw&dist=&archive=true 76. For a detailed overview of all (visited April 15, 2003) (claiming OFAC sanctions regimes, down- when large corporations are fined load the “Foreign Assets Control for doing business with the enemy, Regulations for Exporters and Im- the news is buried on an “obscure porters document” from http:// web site”); see also Shane Kite, Trea- www.treas.gov/offices/enforce- sury’s OFAC Publishes First Weekly ment/ofac/regulations/t11facei. Penalty List, SECURITIES INDUSTRY pdf (last visited Dec. 1, 2003). NEWS, April 14, 2003 (reporting that 77. OFAC Regulations pose problems “the shaming has begun”); see also not just for manufacturing and Thuresson, supra note 79, at 7. export-oriented companies, but fi- 88. Formerly the Bureau of Export nancial services and securities firms Administration (“BXA”). BXA should also be wary. For more changed its name to BIS in April discussion, see James Swann, Pull- 2002. Website for U.S. Bureau of In- ing the Plug of Money Laundering: dustry and Security, at http://www. Tactics and Technology to Deal bxa.doc.gov/News/Archive97/ with Recent Changes, COMMUNITY entfacts.htm (last visited April 24, BANKER, Sept. 1, 2003, at 48. 2004). 78. See, e.g., Donna Harris, Battle 89. See http://w3.access.gpo.gov/bis/ Against Terrorism Catches Auto ear/ear_data.html for the EAR. Dealers Off Guard; High Price 90. 15 C.F.R. § 734.3 (June 2002). Could be Paid for Failing to Check 91. Steps for Using the EAR, Export Customers’ Names Against Federal Administration Regulations Data- List, AUTOMOTIVE NEWS, Dec. 1, base, at http:// w3.access.gpo.gov/ 2003, at 4 (describing the dif- bis/ear/pdf/132.pdf (last modified ficulties automotive retailers are 02-06-04). encountering in checking OFAC 92. Economic International Legal lists against their customer lists). Considerations, at http://www. 79. Michael Thuresson, Local Firms freeessays.cc/db/50/tyc41.shtml Fined as U.S. Steps Up Trade (Mar. 9, 2004). Oversight, L.A. BUS. J., Nov. 17, 93. See Michael T. Burr, Understanding 2003, at 7. Immigration and Deemed Exports; 80. Greg Allen, Monster.com Limiting The Unfortunate Ones, CORP. LE- the Information that Job Seekers GAL TIMES, Nov. 2002, at 1. Can Mention Regarding Seven 94. Pamela P. Breed, Antiboycott Provi- Nations U.S. Businesses are Pro- sion of Export Administration Act, hibited from Doing Business With 570 PRAC. L. INST./CORP. L. & on Their Resumes (National Public PRAC. COURSE HANDBOOK Radio’s All Things Considered SERIES 193, 196-97 (1987); Don- radio broadcast, Apr. 28, 2003). ald W. Smith, Defense of Export 81. Id. Control Enforcement Actions, 844 82. Ana E. Johannssen, A Silent PRAC. L. INST./COM. L. & PRAC.

11 CURRENTS WINTER 2004