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Export, Customs & Trade ReedSmith Export, Customs & Trade Fall 2005 Volume II, Number 4 Sentinenel International Trade Remedies are Available to In This Issue: Enforce Intellectual Property Rights International Trade Remedies are Available to Enforce Intellectual Whereas many companies are aware of the traditional means of enforc- Property Rights—Page 1 ing company-owned intellectual property rights (patents, trademarks and copyrights) through litigation in federal district court, companies operat- UN Trade Sanctions After the ing in the international arena or facing infringement from international ac- Oil-for-Food Program—Page 2 tors have a number of additional international trade remedies available to Enforcement Highlights—Page 4 protect intellectual property assets. International trade remedies available OFAC Reissues Burma Sanctions through the U.S. International Trade Commission (“ITC”) and the U.S. Regulations—Page 5 Customs Service (“Customs”) may offer fast, broad, and effective relief from intellectual property right infringement. Reed Smith in Print and at the Podium—Page 7 International Trade Commission “337” Investigations Recent Reed Smith Publications— Under Section 337 of the Tariff Act of 1930, as amended, it is unlaw- Page 11 ful to import, sell for importation, or sell within the United States after importation, articles that infringe upon a valid U.S. patent, trademark, or copyright. The Tariff Act empowers the ITC to conduct “337” investiga- tions into all allegations of unfair practices in import trade, including infringement of patents, trademarks, or copyrights. The ITC may institute a 337 investigation on its own initiative, but usually such investigations are initiated based upon the fi ling of a complaint. If a “Complainant” fi les a complaint before the ITC, certain pre-institution proceedings may be undertaken between the Complainant and the ITC staff to ensure the adequacy of the complaint. If the complaint is deemed to be suffi cient, the ITC will decide to institute a formal 337 investigation within 30 days NEW YORK of the fi ling of the complaint. LONDON LOS ANGELES After initiation of the investigation, the ITC then assigns an Administra- PARIS tive Law Judge (“ALJ”) to conduct the investigation. While analogous to SAN FRANCISCO judicial proceedings before federal district courts, a 337 investigation is WASHINGTON, D.C. PHILADELPHIA an administrative proceeding which consists of formal discovery leading PITTSBURGH to a full briefi ng and hearing on the merits in which the alleged infringer, OAKLAND the “Respondent,” is entitled to participate. A 337 investigation operates MUNICH under procedural rules similar to the Federal Rules of Civil Procedure as PRINCETON NORTHERN VA supplemented by additional “ground rules” set forth by the ALJ and strict WILMINGTON regulatory deadlines. Like judicial proceedings before federal district NEWARK courts, traditional intellectual property defenses, such as patent invalidity, MIDLANDS, U.K. can be raised by the Respondent during the course of a 337 investigation. CENTURY CITY RICHMOND (continued on page 10) r e e d s m i t h . c o m ReedSmith UN Trade Sanctions After the Oil-for-Food Program On October 27, 2005, the United comprehensive trade sanction regime Nations (“UN”) released its fi nal as well. UN Resolution 661 further report (the “Report”) on the investi- established a Committee consisting of gation of the Oil-for-Food Program all members of the Security Council (“OFFP”). In addition to highlighting to obtain information from Member certain structural defi ciencies, the Re- States regarding the implementation port identifi ed more than 2,200 com- of the UN sanctions and to otherwise panies that paid bribes or kickbacks coordinate the sanctions regime. to the Iraqi government in violation of The growing humanitarian crisis in the OFFP. Without issuing a fi nal ver- Iraq caused the UN Security Council dict, the Report essentially provided to re-assess the sanctions program in a roadmap for interested national law 1995. On April 14, 1995, acting un- enforcement authorities to follow by der Chapter VII of the United Nations naming those companies that appear Charter, the Security Council adopted to have violated anti-bribery laws. UN Resolution 986, establishing the In addition to its explosive revela- OFFP. This program provided Iraq The [OFFP] Report tions, the UN inquiry represents a with an opportunity to sell oil to new and potentially signifi cant fi nance the purchase of humanitarian undoubtedly will serve as development in the administration of goods and to support other mandated a starting point for law international trade sanctions. Under United Nations activities concerning enforcement authorities previous UN sanction regimes, indi- Iraq. The OFFP was funded exclu- vidual Member States were primarily sively with the proceeds from Iraqi in investigating possible responsible for implementing and oil exports that were deposited in a violations by domestic enforcing trade sanctions imposed by UN-sponsored escrow account. The companies of national the Security Counsel. In the after- OFFP was intended as a temporary math of the allegations associated with measure to provide for the humanitar- anti-bribery laws. the OFFP, however, the UN formed ian needs of the Iraqi people, until a special committee—the Indepen- the fulfi llment by Iraq of the relevant dent Inquiry Committee (“IIC”)—to Security Council resolutions. investigate the scandal. Although a The Security Council lifted civilian unique set of circumstances precipi- sanctions on Iraq on May 22, 2003 tated the IIC’s formation, its investi- with the adoption of UN Resolu- gative powers nevertheless warrant tion 1483. This resolution gave the special attention, since they may have Secretary-General the authority to ramifi cations for future UN sanction appoint a Special Representative to programs. work with the occupying forces in UN Sanctions and the OFFP rebuilding Iraq. Following public allegations involving corruption and Soon after Iraq’s invasion of Kuwait mis- management of the OFFP, the in early August 1990, the United UN Secretary General appointed the Nations imposed comprehensive IIC on April 21, 2004 to conduct an trade sanctions on Iraq through UN inquiry into the program. Shortly Security Council Resolution 661. thereafter, the UN Security Council The United States implemented UN unanimously adopted UN Resolution Resolution 661 through the issuance 1538, which called for full coopera- of Executive Order No. 12724 on Au- tion in the investigation by all United gust 9, 1990, and established its own Nations offi cials and personnel, the 2 Export, Customs & Trade Sentinel Coalition Provisional Authority, Iraq, cooperate and make themselves avail- Conclusion and all other Member States, includ- able for interviews. As noted above, The IIC was granted special powers ing their national regulatory authori- the IIC’s mandate also included the to investigate corruption and other ties. investigation of individual contractors malfeasance in the OFFP. While that participated in the OFFP. As an The IIC was chaired by Paul Volcker, the IIC probe may turn out to be a administrative inquiry committee, the former Chairman of the United States one-off event, it raises the possibility IIC was not assigned legally enforce- Federal Reserve. Committee Members of increased interaction between the able subpoena powers, meaning that included Mark Pieth of Switzerland, UN and domestic judicial authori- individual contractors were under no an expert on money-laundering in the ties in investigating violations of UN legal obligation to provide informa- Organization for Economic Coopera- trade sanctions. Moreover, the IIC’s tion. Nevertheless, the IIC was able tion and Development (“OECD”); and issuance of the Report, highlighting to put indirect pressure on private Richard Goldstone of South Africa, individual violations, could lead to a contractors, most notably, through former Prosecutor of the International more active UN role in supervising the threat of providing information to Criminal Tribunals for the former trade sanction programs. The Report national legal authorities. The IIC’s Yugoslavia and Rwanda. itself most likely will lead to criminal Investigation Guidelines specifi cally investigations and indictments in nu- stated that “[c]onsideration will be The IIC’S Investigation merous countries, and its full impact given to referring investigative infor- has only begun to be felt. Future The IIC was given a broad mandate mation and fi ndings to the appropri- Security Council sanction resolutions to collect and examine information ate national governmental authority,” will have to be reviewed carefully to relating to the administration and although companies with pending determine to what extent the UN re- management of the OFFP, including adverse fi ndings were given an op- lies on the IIC precedent and pursues allegations of fraud and corruption portunity by the IIC to rebut such greater oversight authority over sanc- (bribery, illegal surcharges, illicit pay- charges prior to any fi nal determina- tion programs. ments, etc.) on the part of United Na- tion of corruption. tions offi cials, personnel, and agents, Eric A. Dubelier as well as by private contractors. At several stages of the investigation, Leigh T. Hansson Pursuant to the IIC’s Terms of Refer- the IIC apparently recommended that William E. Pomeranz ence, as listed on its offi cial website the Secretary General grant a properly (www.iic-offp.org/reference.htwww.iic-offp.org/reference.htm),
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