Legal Analyses written by Mike Meier,
Attorney at Law. Copyright 2017 Mike Meier. www.internationallawinfo.com.
1998
International Law Update, Volume 4, Number 5 (May).
AVIATION
District
of Columbia Circuit upholds Federal Aviation Administration rule charging air
traffic control fees to private and mostly foreign carriers for overflights of
U.S.
Section
273 of the Federal Aviation Reauthorization Act of 1996 (the Act), 49 U.S.C. §
45301, ordered the Federal Aviation Administration (FAA) to set up a fee
structure allowing it to collect from certain mostly foreign air carriers up to
$100,000,000 per year for services rendered by the FAA during overflights but
not hitherto charged. It applied to "[a]ir
traffic control and related services provided to aircraft other than military
and civilian aircraft of the United States government or of a foreign
government that neither take off from, nor land in, the United
States."
Under
the Act's special statutory procedure, the FAA published a proposed fee
schedule and collection procedure in May 1997 as an interim final rule (IFR)
and allowed a sixty-day period for comments. Asiana Airlines, Inc. and several
other foreign carriers plus an association of Canadian airlines, petitioned the
U.S. Court of Appeals for the District of Columbia Circuit to set aside the IFR
on a variety of domestic and international grounds. The Court affirms the FAA.
As
to the international contentions, petitioners asserted that, despite the
procedures specified in the Act, the FAA had contravened the consultation
provisions of several international aviation agreements, by making the new fee
structure effective before considering their comments and objections. They also contended that the IFR violated the
anti-discrimination provisions of international agreements by imposing fees on
overflights which had a disparate impact on foreign airlines.
Petitioners
cited, for example, the U.S.-Canada Air Transport Agreement as imposing a duty
to take part in consultations and information exchanges before either party
changes its fee structure. The Court
differs. "The strongest language petitioners advance, found in the same
agreement, says no more than that '[r]easonable notice shall be given prior to
changes in user charges.' In this case,
the FAA published the new fee structure sixty days before its effective date.
... Petitioners offer us no basis to
conclude that this is not reasonable notice." [399]
Even
if international agreements did impose a duty to consult, the record shows
that, before the IFR came out, the FAA held informal and public meetings with
representatives of foreign air carriers and received forty documents with
comments on the proposed rule.
Petitioners'
substantive points were that the FAA's rule discriminated against foreign air
carriers and that this violated several international aviation
agreements. In the Court's view,
however, they should bring their grievances to congress rather than the courts
since the FAA merely carried out its legislative mandate. Nevertheless, the language of the Act is
quite neutral since it applies to all overflights irrespective of nationality.
"Of
course, a facially neutral statute may be no more than a pretext to mask
discriminatory intent and effects‑‑but we find no pretext in this case.
... Flights crossing through U.S.
airspace require facilities and staff to manage them. Heretofore, these flights have not borne
their share of the costs of services provided to them by the FAA. It is not discriminatory to impose fees on
this group of users for services that they use but for which they have not
previously been charged, regardless of whether the group is disproportionately
composed of foreign carriers." [400]
Citation: Asiana Airlines, Inc. v. Federal Aviation Administration,
134 F.3d 393 (D.C. Cir. 1998).
CHILD
ABDUCTION
Applying
ICARA and Hague Abduction Convention, Eleventh Circuit affirms order to return
children abducted by father to German mother though children have lived over
one year in U.S.
Michael
Lops, a U.S. citizen, married Christine, a German citizen, in 1991. In 1995, Christine filed for divorce and
custody of their two German-born daughters in a German family court. After a hearing, the parties agreed to joint
legal custody, with Christine keeping primary physical custody. Soon afterwards, Michael got new passports
for the children at the U.S. Consulate by stating that Christine had abandoned
them. Michael then removed the children to Spain. Anne Lops, Michael's mother, later took the
children to the U.S. Michael hid his
whereabouts so well that even Interpol and the U.S. State Department could not
find him and the children. Eventually,
officials placed a wiretap on Anne's telephone and thus located Michael in
South Carolina.
With
counsel representing Michael, the German court next issued a "Certificate
of Unlawfulness." Christine then
filed with the German Central Authority a "Request for Return" of the
children under the Hague Convention on the Civil Aspects of international
Child Abduction [T.I.A.S. No. 11670, 19 I.L.M. 1501]. A German Appellate Court affirmed the grant
of custody to Christine. In December
1997, Christine filed a petition under the International Child Abduction Remedies
Act (ICARA) [42 U.S.C. §§ 11601-10] in a U.S. district court in Georgia. The court found that Michael had wrongfully
removed the children and had violated Christine's custody rights. The court ordered the release of the children
to Christine. Michael filed an appeal.
The
U.S. Court of Appeals for the Eleventh Circuit affirms. It notes that ICARA implements the Hague
Convention to which both the U.S. and Germany are parties. A court considering an ICARA petition has
jurisdiction to decide the merits only of the wrongful removal claim, not of
any underlying custody dispute.
Michael
pointed out that Christine had filed the ICARA petition more than one year
after the wrongful removal of the children and claimed that they were
"well-settled" in the U.S. [Article 12 of the Hague Convention makes
this an exception to the duty to return abducted children to the one entitled
to custody. The U.S. applies a
"preponderance of the evidence" standard.]
Here,
the district court had taken into account many relevant factors in finding that
the children were not "well-settled" in their new environment. These included that the grandmother, not the
parent, was actually caring for the children, that Michael had been concealing
the children's whereabouts, and that authorities may well prosecute Michael for
misdemeanors. The German court where the
matter began had to decide any underlying custody dispute.
Citation: Lops v.
Lops, No. 97-9381 (11th Cir. May 7, 1998).
COMPANY
LAW
New
Russian Law on "companies with limited liability" (LLC) entered into
force, making LLCs more attractive to foreign investors; requires companies to
adapt by January 1, 1999
On
March 1, 1998, a new Russian Law on Limited Liability Companies entered into
force. The Law establishes the internal
structure and procedures for such companies in areas such as banking,
insurance, investment, and agriculture.
The Law defines the legal status of limited liability companies, the
rights and duties of its partners, the procedure for its creation, mergers and
acquisitions, as well as reorganization and liquidation pursuant to the Civil
Code (Article 1).
The
LLC Act limits the liability of such companies to all property that belongs to
it. A company is not liable for obligations
of its partners (Article 3). Management
has to register an LLC with an appropriate state government agency, as provided
in the Federal Law on the State Registration of Legal Entities (Article
13). The Act does not dictate that LLCs
publish reports on their activity except pursuant to other federal statutes.
(Article 49). Separate federal law will
set up special provisions for the participation of foreign investors (Article
11).
All
nonconforming LLCs must adapt by January 1, 1999 (Article 59). Existing entities having more than 50
partners must either convert to "joint stock" entities or producers'
cooperatives, or lower the number of partners to 50. The government registration fees for such
changes to conform with the new Law have been waived.
Citation: Federal
Law of the Russian Federation on Limited Liability Companies, Number 14-FZ
(approved by the State Duma on January 14, 1998, approved by the Federal
Council on January 28, 1998, signed by the Russian President on February 8,
1998; entered into force on March 1, 1998).
[The English translation was received from the U.S. Chamber of Commerce,
Russian Desk, Phone: (202) 482-2000 or 482-4655].
COPYRIGHT
In
"grey market" area, U.S. Supreme Court construes the Copyright Act of
1976 as retaining "first sale" defense to charges of unlawfully importing
copyrighted items that infringed copyright holders' exclusive right to distribute
L'anza
Research International, Inc. is a California manufacturer and seller of hair
care products in the United States. It
enters into exclusive U.S. distributorships each of which has specified limits
as to geography and authorized retailers.
Unlike in its foreign markets, however, L'anza extensively advertises its
wares and specially trains retailers in the U.S. Thus, its foreign prices are 35 to 40 percent
below those it charges in the U.S.
In
1992 and 1993, Quality King Distributors, Inc. (King), a U.S. distributor,
bought three multi-ton shipments of L'anza's products at foreign prices from
L'anza's Malta distributor. Without
L'anza's authority, King then imported the products into the U.S. and sold them
to various distributors at discount.
L'anza
then sued King in federal court for violating its exclusive distribution rights
under the Copyright Act of 1976 (Act).
The court spurned King's "first sale" defense and gave summary
judgment to L'anza. The Ninth Circuit
affirmed [98 F.3d 1109].
After
granting a writ of certiorari to resolve a split on this issue between the
Third and Ninth Circuits, the U.S. Supreme Court unanimously reverses and holds
that the "first sale" doctrine in § 109(a) of the Act does apply to
imported copies of a copyrighted product.
Although
§ 106(3) grants the copyright holder the exclusive right to "vend"
the product and distribute copies by sale or otherwise, § 109(a) allows owners
of the products to resell them without the holder's permission. L'anza argued that a proper reading of §
602(a) of the Act that bans unauthorized importation of copyrighted items is
that it bars its overseas distributors from reselling to U.S. vendors who
cannot buy from L'anza's domestic distributors.
The
Court disagrees. After the first sale of
a product, whether foreign or domestic, the buyer becomes an "owner"
within § 109(a). "The whole point
of the first sale doctrine is that once the copyright owner places a
copyrighted item in the stream of commerce by selling it, he has exhausted his
exclusive statutory right to control its distribution." [1134] The first
buyer is thus entitled to resell the product according to the literal terms of
§109(a). Section 602(a) merely makes the
unlawful importation an infringement of the exclusive right to distribute
copies guaranteed by § 106(3). In turn,
§ 109(a) applies, "notwithstanding the provisions of" § 106(3).
The
Court also sees no merit in L'anza's argument that, in banning the importation
of piratical copies, § 602(a) must also extend to lawfully made or
non-piratical copies made by the owner of the copyright. In the Court's view, § 602(a) pertains to a class of copies that are neither piratical
nor "lawfully made under this title."
This class includes copies that some entity has "lawfully
made" under the law of a foreign nation.
"...[I]rrelevant
[to construing the 1976 Act] is the fact that [since 1991] the Executive Branch
of the Government has entered into at least five international trade agreements
that are apparently intended to protect domestic copyright owners from the
unauthorized importation of copies of their works sold in those five countries
[i.e., Cambodia, Trinidad and Tobago, Jamaica, Ecuador, and Sri Lanka]. The earliest of those agreements was made in
1991; none has been ratified [sic] by the Senate." [1134]
Citation: Quality King Distributors, Inc. v. L'anza
Research Int'l, Inc., 118 S.Ct. 1125 (1998).
CRIMINAL
PROCEDURE
In
case of fugitive Italian executive of whom France had requested extradition,
Ninth Circuit dismisses fugitive's appeal based on "disentitlement"
doctrine
Giancarlo
Parretti, an Italian citizen, was heading Pathe Communications when it bought
MGM-United Artists for $1,300,000,000 in 1990.
The newly created entity soon had cash flow problems. In 1995, Parretti entered the U.S. from Italy
to face perjury charges in Delaware state court and to give a deposition for
another law suit in California.
By
diplomatic note to the U.S. State Department the next day, France asked for
Parretti's "provisional arrest" pursuant to Article IV of the 1909
Treaty of Extradition [22 U.S.T. 407, as amended, T.I.A.S. 7075]. France was interested in matters related to
the MGM deal.
Authorities
arrested Parretti in California. The
district court denied his application for bail and his petition for a writ of
habeas corpus based on the alleged unconstitutionality of his arrest. Upon Parretti's timely motion for emergency
review, the U.S. Court of Appeals for the Ninth Circuit ordered him released
while France's extradition request was pending.
Parretti soon fled the U.S.
The
Ninth Circuit, in an en banc opinion, dismisses the appeal. The Court applies the "disentitlement doctrine"
because Parretti had fled the U.S. while his appeal was pending. If the Court were to reach the merits of
Parretti's claims, it would not bring him back to the U.S. Furthermore, the dismissal deters defendants
from fleeing the jurisdiction.
Citation: Parretti
v. U.S., No. 95-56586 (9th Cir. May 1, 1998).
[International Law Update reported on the Ninth Circuit's decision to
release Parretti, see 1997 Int'l Law Update 64.
Please note that the U.S. and France have concluded a new Extradition
Treaty, see 1996 Int'l Law Update 71].
ENVIRONMENT
European
Union publishes directive regulating "biocidal" products that will
affect many products used in households and industry
After
several years of preparation, the EU has finally published the directive on
biocidal products, Directive 98/8/EC [Biocides Directive]. The Directive will regulate all products that
control "any harmful organism."
It will therefore apply to products including disinfectants,
non-agricultural pesticides, and preservatives.
The
Directive contains a list of regulated product types such as "Human
hygiene biocidal products" and "In-can preservatives" used to
extend a product's shelf life (Annex VI).
Because of the broad definition of affected products and substances,
the Directive will affect tens of thousands of products on the EU market.
All
"biocidal" products must be registered in an EU Member States, and
properly classified, packaged and labelled.
Advertisements must state "Use biocides safely. Always read the
label and product information before use," and may not use words such as
"non-toxic," or "harmless."
The
Directive has substantial technical requirements and explanations which will
be refined in the future. For example,
no substances are yet listed in Annexes I (List of active substances), IA
(Low-risk list of active substances) and IB (Basic substances). The Annexes also outline the required
toxicological tests and other technical reviews necessary for registration of a
biocidal product.
The
Member States must implement the Directive into national law within 24 months
of the effective date of the Directive, that is, by May 2000. A ten-year transitional period during which
Member States may continue to permit the distribution of biocidal products
under their national rules will facilitate the industry's compliance with the
new regulatory requirements.
The
Directive will complicate the regulatory requirements for chemical products, because
most of those products were previously unregulated, or regulated as
"chemical substances" under EC Directive 67/548/EEC [dangerous
substances]. Many products must again be
tested and registered with Member State authorities. In the U.S., many of such products are
regulated as pesticides under FIFRA.
Citation: Directive 98/8/EC ... concerning the placing of
biocidal products on the market, 1998 O.J. of the European Communities (L 123)
1, 24 April 1998. [See 1997 Int'l Law Update 115].
EVIDENCE
In
drug smuggling prosecution, Fifth Circuit finds foreign business and financial
records admissible as similar to domestic business records under Federal Rule
of Evidence 803(6)
Formerly
based in Matamoros, Mexico, Juan Garcia Abrego and his assistants had been smuggling
"tremendous quantities" of drugs into the U.S. for over twenty
years. U.S. law enforcement had seized
more than 13 tons of Garcia Abrego's cocaine -- but that was only a small
fraction of Garcia Abrego's shipments.
Authorities arrested him in Mexico in 1996 and put on trial in the U.S.
for drug trafficking and conspiracy.
At
trial, the trial judge let in foreign financial records showing that defendant
had transferred approximately $30,000,000 from Mexico through the U.S. to
Switzerland and the Cayman Islands. In
particular, he claimed that the government failed to give proper statutory
notice that they would use foreign records.
Upon
defendant's conviction and imprisonment, the district court also imposed a fine
of more than $128,000,000 and forfeiture of $350,000,
000.
Defendant then noted an appeal. The U.S.
Court of Appeals for the Fifth Circuit affirms.
The
Court first analyzes the statutory language providing for notice. Under 18 U.S.C. § 3505(b), "At the
arraignment or as soon after the arraignment as practicable, a party intending
to offer in evidence ... a foreign record of regularly conducted activity shall
provide written notice of that intention ..." Though the government gave notice about six
months after the indictment, the records may still be admissible.
"First,
subsection (a) of § 3505, which establishes the requirements for
admissibility under the section, makes no reference to subsection (b), which
establishes the notice requirement.
This would indicate that compliance with the notice requirement is not a
precondition of admissibility." [Slip op. 105-106]
Neither
did the foreign bank records violate the Confrontation Clause. The Court points out that the drafters based
Section 3505 on Fed.R.Evid. 803(6).
Business records let in under Section 3505 are at least as reliable as
evidence admitted under a "firmly rooted" hearsay exception. Therefore, the district court did not abuse
its discretion in holding the foreign bank records admissible.
Citation: United States v. Garcia Abrego, No. 97-21030
(5th Cir. May 6, 1998).
JUDICIAL
ASSISTANCE
English
Court of Appeal (Civil Division) upholds lower court order responding
favorably to Letter of Request from California court for testimonial evidence
but eliminates pretrial discovery aspects
Golden
Eagle Refinery Company, Ltd. and others (Eagle) filed suit in the California
courts against Associated International Insurance Co. and others (AII). They complained about the excessive cost of
repairing environmental damage brought about by their operations. A main cause of higher costs was the
equivalent of a "reinstatement notice" that the California State
authorities had served upon Eagle.
A
central litigable issue is whether the damage sustained fell within the
insurance coverage. Included in this
broad question is whether long-term pollution or the reinstatement order itself
caused the damage.
Relative
to this, defendants claimed that a Mr. Johnson and a Mr. Crouch are, or were,
senior executives either of Eagle or of their parent company. Based on material it had already turned up,
defendants believed that these two men may have taken part in several important
decisions. These included, for example,
determinations as to whether to file insurance claims. There were also indications that Mr. Crouch
was directly mixed up in evaluating and remedying the contamination of the
environment.
Since
Messrs. Johnson and Crouch were in England, defendants obtained an order from
a Master pursuant to a Letter of Request issued by the California court that
these two men should appear before an English examiner to give evidence
relevant to the California action.
Plaintiffs objected on the grounds that it was improper to apply the
Evidence (Proceedings in Other Jurisdictions) Act of 1975 (the Act) to a
foreign request that involved broad pre-trial discovery American-style from
non-parties.
The
court of first instance gave conditional approval to this procedure and
plaintiffs appealed. In an important
opinion, the Court of Appeal (Civil Division) dismisses the appeal with
two major qualifications.
The
Court first points out that Section (3) of the Act provides that "[a]n
order under this section shall not require any particular steps to be taken
unless they are steps which can be required to be taken by way of obtaining evidence
for the purposes of civil proceedings in the court making the
order..." Based on this language
and its judicial interpretations, plaintiffs argued that any taint of pre-trial
discovery "in the American sense" deprived the lower court of
jurisdiction to respond to the letter of request.
The
Court first points out that there are at least two main aspects of American
pretrial fact-gathering procedure. The
first is the compulsory examination of witnesses by way of pretrial discovery
as known in the United States. The
second is the examination of witnesses for the purpose of finding out what
helpful evidence, if any, they might give at the trial.
This
differs from English procedure (1) because, in the American system, that
process takes place under compulsion even in the case of [non-party] witnesses,
such as Mr Johnson and Mr Crouch, and (2) because these individuals are
presumably to be witnesses, if at all, for the adverse parties rather than the
examining parties.
The
Court is satisfied that Messrs Johnson and Crouch can probably give trial
evidence relevant to the California litigation.
The request below did not limit itself, however, to the perpetuation of
evidence admissible at the trial; it went substantially beyond into the
forbidden field of compelling the witnesses to reveal new information that
may, but need not, be admissible at trial.
An
English court, however, lacks statutory authority to make an unwilling witness
disgorge such material. Since the
Request below does involve a "hybrid" procedure, however, the
presence of a non-discovery purpose means that the lower court had jurisdiction
to issue an order but it was legal error to issue the particular form of order
sought by the California defendants.
The
Court is tempted to quash the order and require the California defendants to go
back to the forum and obtain a Letter of Request tailored to the statutory
powers of the English courts. It also
expresses the fond wish that future litigants will observe proper limitations
from the outset in seeking judicial assistance from the U. K. in evidence
matters.
In
the interests of international cooperation, however, and despite the burdens
involved for the examiner, the Court upholds the Master's order subject to two
qualifications. First, the order shall
limit the examination of the witnesses to eliciting and recording testimony
admissible at the California trial.
Second, counsel shall not ask any question of the witnesses that, in
the opinion of the Examiner, is not a question that counsel could properly ask
while interrogating a witness in chief at a trial held before the High Court of
Justice of England and Wales.
Citation: Golden Eagle Refinery Co. Ltd. v. Associated
Int'l Ins. Co., 19 February 1998 [Court of Appeal (Civil Division)] (Transcript:
Smith Bernal)(Lead Opinion by Buxton L.J.).
TELECOMMUNICATIONS
Mexico
publishes Protocol on satellite transmissions agreement with U.S. for video and
audio programs
Effective
October 16, 1997, the Mexican Official Gazette has published another Protocol
Concerning the Transmission and Reception of Signals from Satellites for
Services in the United States and the United Mexican States. It covers satellite transmissions for video
and audio programs but does not apply to direct transmissions to
households. The U.S. and Mexico had
previously entered into a separate Protocol on "direct-to-home"
satellite services [see 1996 Int'l Law Update 145].
The
Protocol will facilitate satellite services by setting forth specific
requirements such as the conditions and technical criteria for satellite
use. Essentially, the Protocol grants
mutual recognition of licenses for Mexican and U.S. providers (see Article 7).
The Annex lists the permitted band frequencies for such services. The government agencies administering this
Protocol are the Mexican Department for Communications and Transport
(Secretaría de Comunicaciones y Transportes, SCT), and the U.S. Federal Communications
Commission (FCC).
Citation: Protocolo concerniente a la transmisión y
recepción de señales de satelites para la prestación de servicios fijos por
satelite en los Estados Unidos Mexicanos y los Estados Unidos de America, 1998
Diario Oficial de la Federación, March 17, 1998.
TRADE
European
Commission determines that U.S. Antidumping Act of 1916 constitutes trade
obstacle under WTO trading
rules
The
Commission of the European Communities has issued a decision that the U.S.
Antidumping Act of 1916 (15 U.S.C. 72) constitutes a trade obstacle. The Commission had begun a review based on a
complaint received from Eurofer, the European Confederation of Iron and Steel
Industries, on behalf of its members.
After
investigating the matter, the Commission found that the Act applies to the
import and internal sale of any foreign product irrespective of its origin,
including products originating in WTO member states. The Act bans the sale of goods in the U.S. if
the price is lower than the price in the country of origin or in other foreign
countries to which the goods are exported.
The Commission noted several specific aspects of the Act that are
allegedly contrary to WTO trading rules:
-
The criteria of the Act for determining the "normal value" of a good
are inconsistent with Article V(1)(a) & (b) of GATT 1994 and Articles 2.1.
and 2.2 of the WTO Antidumping Agreement.
These set the actual price in the exporting country as the first and
privileged criterion for calculating the normal value.
-
The Act does not require actual sales in the U.S. market and a simple price
quotation from a foreign company is enough.
In comparison, Article VI(1) of GATT 1994 and Article 2(1) of the WTO
Antidumping Agreement require the actual distribution of goods to show that
dumping has taken place.
-
The Act permits treble damages and fines and/or imprisonment, while Article
VI(2) of GATT 1994 permits only antidumping duties as a remedy.
The
U.S. has implemented the WTO Agreement and its annexes with the Uruguay Round
Agreement Act (URAA) [Pub.L. No. 103-465, 108 Stat. 4809]. To enforce WTO commitments within the U.S.,
the Commission is asking the U.S. to repeal the Act. It will also start a dispute settlement
proceeding before the WTO.
Citation: Commission Decision of 16 April 1998 ...
concerning the failure of the United States of America to repeal its
Antidumping Act of 1916 (98/277/EC), 1998 O.J. of the European Communities (L
126) 36 (28 April 1998).
TRADE
European
Union and U.S. conclude Agreement in area of veterinary sanitary measures to
protect public health in course of trade in live animals and animal products
The
EU Council has issued a decision approving an Agreement between the EU and the
U.S. on veterinary sanitary measures for trade in live animals and animal
products. The Agreement applies, for
example, to meat, fish, wool, food products, and animal hides. The Agreement
provides for the
-Mutual
recognition of sanitary measures, and
-Information
exchange through government agencies and expert meetings.
Depending
on the product, various U.S. agencies issue export certificates that EU
authorities will accept. The animal
diseases covered by the Agreement include swine fever, Newcastle disease, and
avian influenza. The Agreement contains
a schedule of items (such as meat or milk) with their respective trade
conditions, EC standards and U.S. standards.
The contact points for the Agreement are (a) the Agricultural Counsellor
of the Delegation of the European Commission to the United States in
Washington, D.C., and (b) the Agricultural Attaché, Office of Agricultural
Affairs, U.S. Mission to the European Union in Brussels, Belgium. The Agreement will enter into force on the
first of the month following proper ratification. The text of the Agreement is attached to the
Council decision and published in the same issue of the Official Journal.
Citation: Council Decision ... (98/258/EC); Agreement
between the European Community and the United States of America on sanitary
measures to protect public and animal health in trade of live animals and
animal products, 1998 O.J. of the European Communities (L 118) 1, 21 April
1998.
TRADEMARKS
Applying
Lanham Act extraterritorially, Federal Circuit upholds injunction against U.S.
company's sale of shoes in Canada under trademark similar to plaintiff's
Aerogroup
International, Inc. requested an injunction in New York federal court to
prevent Marlboro Footworks, Ltd. from using a similar trademark for its
lower-priced but similar shoes.
The
court found that the trademarks users are not likely to confuse the two marks,
and denied Aerogroup's request for an injunction in part. The court, however, did enjoin some of Marlboro's
activities in Canada. Both Aerogroup and
Marlboro appealed. In its cross-appeal,
Marlboro claims that the district court erred in extending the injunction to
include sales in Canada.
The
U.S. Court of Appeals for the Federal Circuit affirms. The Lanham Act
"confers broad jurisdictional powers" upon federal courts to enjoin
infringing activities committed outside the U.S.
The
Second Circuit has developed a 3-part test to determine what territorial effect
to give the Lanham Act: (1) Does the defendant's conduct have a substantial
effect on U.S. commerce? (2) Is defendant a U.S. citizen? (3) Is there a conflict
with defendant's trademark rights established under foreign law? The Second Circuit applies this test in a
flexible manner to preserve the Lanham Act's goal of protecting U.S. consumers
and U.S. trademarks. The absence of any
one factor is not dispositive.
Here,
the district court had found that Marlboro is a U.S. corporation with
headquarters in Massachusetts. Thus it
is subject to the court's considerable authority to regulate its foreign
activities. Moreover, Marlboro had not
registered its trademark in Canada.
Furthermore,
the district court found that Marlboro's Canadian sales had a substantial
effect on plaintiff's business. For
example, Marlboro had solicited Canadian customers at shoe shows in the U.S.
and had thus caused Aerogroup to lose its largest Canadian customer.
Citation: Aerogroup
Int'l, Inc. v. Marlboro Footworks, Ltd., No. 97-1125 (Fed. Cir. April 13,
1998).
TRANSPORTATION
In
suit over damage to containers en route from Japan to U.S., Eleventh Circuit
finds that higher liability under Hague-Visby Rules applies based on forum
selection clauses in shipping documents
Itel,
a container leasing company, bought 198 refrigerated containers in Japan and
arranged for Candyline Ltd. (UK) to ship them to Savannah, Georgia. Their shipping contract was boilerplate,
except for a typewritten addendum to the Booking Note stating that English law
applies. The Bill of Lading made the
Hague Rules and the Hague-Visby Rules applicable under certain
circumstances. The contract designated
England as forum. English law is also applicable.
[The
Hague Rules are based on a 1924 Convention, ratified by the U.S. in 1924. The U.S. implemented the Convention through
the Carriage of Goods by Sea Act (COGSA).
The U.S., however, did not adopt the 1968 Protocol to Amend the Hague
Rules of 1924 (Visby Amendments), raising the per package limitation on
liability. During the relevant time
period, England had adopted the Visby Amendments, Japan had not].
Candyline
contracted with Mammoet Shipping B.V. (Netherlands) to do the actual
shipping. The Booking Note and Bill of
Lading were identical to the ones between Itel and Candyline. During the voyage, 20 containers fell
overboard and 6 were severely damaged.
Itel sued in federal court to recover damages.
The
court found Candyline liable for damages under the Hague-Visby Rules (as
adopted in England) that provide for higher liability limits than U.S.
law. The court also ruled that Candyline
could only seek indemnity from Mammoet based on COGSA with its lower liability
limit. Candyline appealed.
The
U.S. Court of Appeals for the Eleventh Circuit affirms in part and reverses in
part.
As
for the Itel/Candyline agreement, the Court agrees that the higher liability
limits of the Hague-Visby Rules apply.
First, Clause 3 of the Bill of Lading selects the country of the carrier's
place of business, i.e. England. Second,
Clause 10 in the addendum to the Booking Note looks to English law. The Supreme Court has recently held that
COGSA does not nullify foreign arbitration clauses set forth in maritime bills
of lading. See Vimar Seguros y Reaseguros, S.A. v. M/V Sky Reefer, 515 U.S.
528, 535-36 (1995) [see 1995 Int'l Law Update 2 (December)] This is enough precedent to require enforcement
of the above clauses.
As
for the Candyline/Mammoet agreement, the Court finds that the factors that
counseled our applying the English Hague-Visby Rules to the Itel/Candyline
contracts are also present. Even if
there were no Clause 10, the Netherlands, like England, has adopted the
Hague-Visby Rules.
The
Court therefore remands for a determination of the amount of indemnification
to which Candyline is entitled pursuant to the English Hague-Visby Rules.
Citation: Itel Container Corp. v. M/V Titan Scan, No.
97-8278 (11th Cir. May 1, 1998).
WAR
CRIMINALS
Swiss
Military Tribunal acquits Bosnian Serb accused of inflicting injury and
degrading treatment upon civilians in Bosnian POW camps during summer of 1992
In
1965, G.G. first saw the light of day in Bosnia-Herzegovina in the former
Federal Republic of Yugoslavia (FRY).
Thirty-two years later, despite his requests for political asylum in
Switzerland, a Swiss military prosecutor charged G.G. with breaching the laws
and customs of war, thus violating the Swiss Military Penal Code (CPM).
The
indictment alleged that G. G. had assaulted and injured various civilian
prisoners in the Omarsk and Keraterm POW camps near Prijedor during the summer
of 1992 and that he had humiliated prisoners by making them lick the boots of
camp guards. Despite eyewitness
identifications, defendant denied that he had ever been in the above camps and
claimed residence in Austria and Germany in the summer of 1992.
The
prosecution relied on the 1949 Geneva Conventions and the Protocols protecting
victims of international and non-international armed conflicts (Conventions).
In addition, it invoked Article 109 of the CPM which makes it a domestic
military crime to violate the Conventions and customary international
humanitarian norms. Furthermore,
presumably invoking "universal jurisdiction," the Article extends to
civilians and to members of foreign armed forces, though the charged offense
may have taken place outside of Switzerland and lacked any other nexus to the
Swiss legal regime.
At
the outset, the Tribunal importantly decided that the conflict in the former
FRY was of an "international" character as of October 1991 though the
perpetrators were Bosnian Serbs allegedly engaging in criminal activity on Bosnian
soil. It also concluded that the acts
attributed to G.G. would, if proven, have violated the above international
provisions as well as the implementing legislation found in the CPM. The difficulty came in proving that the defendant
was the same person who had abused and tortured the victims at those camps at
the time alleged. The tribunal found
that the identification evidence lacked consistency and wondered whether the
monstrous treatment the witness-victims had suffered might have led them to
misidentify G.G. It also noted that
torturers had often taken steps to stay out of the victim's line of sight.
Despite defendant's lies during the asylum proceedings and the dubious
believability of his trial testimony, the Tribunal entertained a reasonable
doubt on the identity issue and acquitted G.G.
In
accordance with Swiss law, the state then awarded defendant 30,000 Swiss francs
for his detention time and 70,000 francs to compensate him for the moral
damages suffered by defendant as a result of the accusations and detention.
Citation: In Re G, Military Tribunal, Div. 1, Lausanne,
Switzerland, 18 April 1997 [as reported and critiqued by Prof. Andreas R.
Ziegler, Univ. of St. Gallen, 92 Am. J. Int'l L. 78 (1998)].
- German
district court issues injunction against unsolicited advertising through e-mail. In October 1997, a German district court
(Landgericht) preliminarily enjoined a businessman (B) from sending large
numbers of unsolicited e-mails to private individuals offering to provide internet
services. A competitor sued B based on
the German Law Against Improper Competition (Gesetz gegen den unlauteren
Wettbewerb). The district court issued
an injunction. One consideration seems
to have been that, unlike telephone calls, the e-mails came through the
recipients' telephone lines unbeknownst.
Thus, the recipient could delete them only after the fact. With sales calls by telephone, on the other
hand, one can cut off the transmission simply by hanging up. Citation: Landgericht Traunstein 2 HK 0 3755/97
(14.10.97).
- International
Court of Justice (ICJ) to expedite contentious cases. The ICJ has revised its working methods to
expedite controversial cases that need a quick resolution. Among the revisions are: (a) the judges do
not have to prepare written analyses (Notes) of the key issues before all
deliberations; (b) if the parties agree, they may submit the written pleadings
not simultaneously but consecutively to reduce the number of exchanges of
pleadings; and (c) the parties must provide translations of the annexes to
their pleadings. Citation: ICJ
Communiqué No. 98/14 (6 April 1998).
