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March 28, 2008
© Chester/Associates, PLLC 2008
Catching the ‘TweenersAddressingOverlappingLegalIssues
BetweenInternationalTrade&IntellectualProperty
J. F. (Jim) ChesterJD, LL.M, CCS, CHB
Chester/Associates, PLLCDallas, Texas
March 28, 2008 2
Whatisa‘Tweener?tweener (n) 1. a ball hit between the
outfielders. 2. a softly hit fly ball thatlands just beyond the infield.
SOURCE: Enlexica Dictionary of Baseball
March 28, 2008 3
WhatisIntellectualProperty? Tangible manifestations of creations
of the mind.Examples: inventions, literary and artisticworks, and symbols, names, images, anddesigns used in commerce.
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What is International Trade Law?
Regulation of theexchange of goodsand services acrossinternational borders
March 28, 2008
© Chester/Associates, PLLC 2008
IBT ICLWeeks/Months Years/Decades
What is International Trade Law?
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Key Overlap Issues Customs Enforcement of IP Rights Export Laws
EAR & Transfers of Technology Deemed Exports
Import Laws (Undeclared Value) Assists IP License Agreements
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Customs Enforcement of IP Rights
How do IP owners obtainCustoms protection?
How does Customsenforce IP rights?
Example“compatible with NOKIA”
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EAR & Transfers of Technology• What is an Export?
– Physical shipment of EAR-subject goods, technology, ortechnical data outside USCustoms Territory
– Downloads and emails oftechnology and technical dataoutside US
– Example• Programming or patent drafting in
India
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Deemed Exports What is the Deemed Export Rule?
“Release” “Technology or technical data” “Foreign National”
ExampleTelecom test contractors
March 28, 2008
© Chester/Associates, PLLC 2008
– Upto$1million– Upto5yearsinprison– Denialofexportprivileges
PenaltiesforEARViolations
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© Chester/Associates, PLLC 2008
InternationalTrafficinArmsRegulation(ITAR)
– “Munitions”– Includeanythingmanufacturedto“MilitaryStd.”or“Spec.”
– DualUse– Encryption
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© Chester/Associates, PLLC 2008
ITARPenalties• Criminal:“Willful”violation:– Upto$1millionperviolationforcorporations– Upto$1millionperviolationandupto10yearsinjailforindividuals
• Civil:“Any”Violation:– Upto$500kperviolationforcorporationsand/orindividuals
• OtherEnforcementMeasures:– Seizureorforfeitureofgoods– Debarmentfromlicensingforaslongasthreeyears
– PotentialdebarmentfromGovernmentcontractingforuptothreeyears
March 28, 2008
© Chester/Associates, PLLC 2008
CommonImportingPitfalls– Assists– UndeclaredValues• Royalties• IndirectPayments
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Assists What are Assists and
how do they affectimport duties?
What types of IP canbe considered assists?Exception – US
developed designs andtech.
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IP License Agreements How do IP license
agreements impactCustoms duties?Royalties Indirect payment
March 28, 2008
© Chester/Associates, PLLC 2008
• ImportPenalties-Civil– FalseStatementorOmission• Domesticvalueofimportedgoods
– RecordKeeping• Upto$100,000pertransaction
– Marking• 10%ofdomesticvalue
• OtherCustomsEnforcement– Seizure&Forfeiture– Criminal–5yrs;$500,000– Additionalscrutiny,exams&audits– Referraltootheragenciesforaction
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How to Catch the ‘TweenersCompliance Integration Inter-Departmental
Awareness &Communication
Use of Outside ExpertsPeriodic Compliance
Assessments
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ConclusionFailure to catch ‘tweeners can result in:
lost opportunitiespotential liabilities
One can budget and plan for compliance;but not for enforcement.
“The unexamined life. . . .”
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Questions?
Chester/Associates,PLLC6060NCX,Suite560Dallas,Texas75206www.tradelawfirm.com
Phone214.800.2845
