Legal Analyses written by Mike Meier,
Attorney at Law. Copyright 2017 Mike Meier. www.internationallawinfo.com.
1997 International Law
Update, Volume 3, Number 12 (December).
AVIATION
Mexico publishes rules that
regulate overflights and landings by foreign aircraft within Mexican territory
Effective October 4, 1977,
the Mexican government has issued rules, drafted jointly with other agencies,
to coordinate the grants of permission for overflights by, and landing of,
foreign aircraft within Mexican jurisdiction.
Four different government agencies will play a role in these
authorizations. Among the new rules are:
- Using diplomatic
channels, foreign governments must ask for permission for their aircraft to
take part in overflights. (Segunda, 2.).
- The rules ban flights
that interfere with law enforcement activities (for example, if the flight
would "intercept the pursuit of" an aircraft engaged in illicit
activities) (Tercera, 1.a.(1.)).
- Foreign pilots have to
notify the competent agency of any change in the route of a programmed flight.
[Editors' Note: the rules list the competent agencies that have jurisdiction
over various types of flight activities.] (Tercera, 1.b. (1)&(2)).
- The rules allow the
flights of foreign aircraft that take part in the war against drug-trafficking
only for refueling or in like special situations. (Tercera, 1.c.(2.)).
- Foreign aircraft may not
have installations on Mexican territory (Cuarta).
Citation: Bases de coordinación para autorizar
sobrevuelos en el espacio aereo mexicano y aterrizaje de aeronaves extranjeras,
1997 Diario Oficial de la Federación [Mexican Official Gazette], October 3,
1997.
BANKRUPTCY
German High Court (BGH)
debates whether filing of foreign bankruptcy proceeding should lead to stay of
domestic proceedings involving foreign debtor
The German High Court
(Bundesgerichtshof, BGH) is considering whether to retain the rule that the
beginning of a foreign bankruptcy proceeding does not interrupt domestic
proceedings against or by that party.
The IX. Civil Branch (Zivilsenat) of the BGH has submitted the issue for
a joint decision by the two other BGH Branches with jurisdiction over such
matters, the I. Civil Branch and the Cartel Senate.
In 1992, the Luxembourg
defendant’s vessel damaged the German plaintiff's small container vessel (Leichter)
on the Rhine River. The plaintiff claimed DM 83,268.22 [about $46,000] in
damages. In the meantime, the Luxembourg district court began bankruptcy
proceedings against defendant. The question is whether the Luxembourg
proceeding should interrupt the plaintiff's German action against defendant.
The I. Civil Branch of the
BGH would like to change the rule. It wants a foreign bankruptcy proceeding
against a debtor to stay a domestic proceeding that may affect the bankruptcy
estate. This would happen only as long
as the foreign law looks upon the bankruptcy trustee as the sole person
competent to conduct legal proceedings. This already seems to have become the
generally accepted opinion.
Citation:
Unterbrechungswirkung ausländischer Konkurseröffnung (Vorbereitungsanfrage zum
Grossen Senat), BGH, Beschl. v. 13.5.1997 - IX ZR 309/96, reported in 1997 NJW,
Heft 38, page 2525.
BUSINESS TRANSACTIONS
In international business
transactions, OECD adopts Bribery Convention to ban payoffs to foreign
government officials
On November 20, 1997, 29
member countries of the Organization for Economic Cooperation and Development
(OECD), including the U.S., as well as five non-member countries, approved the
Convention on Combating Bribery of Foreign Public Officials in International
Business Transactions, as well as related Commentaries. The Convention provides that:
- Each party shall make
"bribery of foreign public officials" a criminal offense under its
domestic law. The Convention broadly
defines "foreign public official" to include any person holding a
legislative, administrative or judicial office in a foreign country (Article
1).
- The criminal penalties
imposed have to be comparable to those that apply to the party's own public
officials. These may include
imprisonment so as to trigger mutual legal assistance and extradition
agreements. If a party's legal system
does not treat briberies as criminal acts, the state shall impose other
sanctions such as fines (Article 3).
- Each party shall have
jurisdiction over such offenses when committed in whole or in part in its
territory. Each party shall prosecute
its own nationals for such acts committed abroad (Article 4).
- Each party shall mutually
grant prompt and effective legal assistance to other parties, including
extradition. There is a presumption of
"dual criminality" if the charged act falls within the scope of this
Convention (Articles 9 & 10).
The Convention will enter
into force on the 60th day after five of the ten countries with the largest
export shares have ratified it. The
parties have scheduled the Convention for signature on December 17, 1997 in Paris.
Citation: OECD Convention on Combating Bribery of
Foreign Public Officials in International Business Transactions (adopted on
November 20, 1997). [The preliminary text is available on the OECD website
www.oecd.org. More information about international bribery is obtainable at the
website of the U.S. Department of State,
www.state.gov/www/issues/economic/bribery.html.]
ECONOMIC SANCTIONS
Federal Maritime Commission
suspends per-voyage fees on Japanese vessels imposed as punishment for
discriminatory Japanese port practices
The Federal Maritime
Commission (FMC) recently imposed a $100,000 per-voyage payment for Japanese
vessels as punishment for Japan's alleged discriminatory port practices [see
1997 Int'l L. Update 45]. The alleged
practices include the unfavorable licensing of port transportation businesses
and the requirement of "prior consultation" for the docking of
foreign vessels. Under the "prior
consultation" system applied by the Japan Harbor Transport Authority
(JHTA), shipping lines had to secure approval before changing their port
schedules.
Effective November 13,
1997, the FMC suspended the sanctions in light of agreements reached between
the U.S. and Japanese governments, and among the affected parties. The FMC learned on October 27, 1997, that
government negotiators had agreed on a reform of Japanese port practices. It then entered into a consent order with the
Japanese shipping lines concerned.
The order involved a
compromise payment of $1.5 million for the month of September for Japanese
vessels entering U.S. harbors. The FMC
will stay its hand while the agreement on Japanese port practices is pending.
Citation:
Federal Maritime Commission, Port Restrictions and Requirements in the United
States/Japan Trade, 62 Federal Register 61648 (November 19, 1997). [The rule
suspends the effective date of the rules published in 62 Federal Register 9696,
amended by 62 Federal Register 18532.]
EXTRADITION
Colombian Parliament
approves constitutional change to permit extradition; despite U.S. criticism,
extradition will not apply retroactively
For more than six years,
the Colombian Constitution did not permit the extradition of Colombian citizens
to the U.S. and other countries [see 1997 Int'l L. Update 23]. Article 35 of the Colombian Constitution of
1991 had introduced that prohibition. A
recent change to the Constitution will permit extraditions in the future.
On September 16, 1997, the
Colombian Congress voted to delete the provision from the bill that would have
made extradition available retroactively.
The Colombian Government, which had attempted to make extradition
available retroactively, unsuccessfully issued a statement opposing the vote.
On November 25, 1997, the
plenary session of the House of Representatives [Cámara de Representantes]
adopted a revised Article 35, which now reads:
"Extradition may be
requested, granted and offered according to public treaties and, if
inapplicable, the Law. In addition, the
extradition of individuals born with Colombian nationality shall be granted for
offenses committed abroad, if considered an offense according to Colombian
criminal law. The law will govern the
subject. Extradition will not be granted
for political offenses. Extradition will
not be granted if the acts have been committed before the promulgation of this
rule." [Translation by the Editors].
The Government is
requesting the Constitutional Tribunal (Corte Constitucional) to review the
validity of this legislative act, and will present a statute governing
extradition at the beginning of the next parliamentary session.
[The U.S. favors
retroactivity of extradition so that major narco-traffickers who are currently
in Colombian jails, including Cali cartel members, can be extradited].
Citation: Information received from Colombian
Government, Centro de Información de Colombia, E-mail: cic@presidencia.gov.co;
U.S. Department of State Daily Press Briefing, Transcript #164 (November 13,
1997) & Off-Camera Briefing Index (November 26, 1997); U.S. Department of
State Press Statement (September 17, 1997), available on internet at
http://secretary.state.gov.
INTERNATIONAL COURT OF
JUSTICE
On merits of dispute over
Gabcikovo-Nagymaros project along Danube, International Court of Justice finds
both Hungary and Slovakia in breach of their treaty, thus requiring them to
carry out its provisions in modified form
The Danube is the second
longest river in Europe, flowing about 1,773 miles from the Black Forest in
Germany to the Black Sea. Recently
linked to the Main and thence to the Rhine Rivers, the Danube is an important
navigational artery that links the North Sea to the Black Sea.
In September 1977, the
Hungarian People's Republic (Hungary) and the Czechoslovak People's Republic
(Czechoslovakia) entered into a treaty dealing with the joint building and
running of the "Gabcikovo-Nagymaros System of Locks" on a 120-mile
stretch of the Danube between Bratislava and Budapest. Its goal was to develop electrical energy,
shipping and agriculture. The system
would include several dams and canals along with a hydroelectric generating
plant, some of them to be jointly owned.
It involved the dredging of the lower portion of the river and the
improvement of flood control works.
The treaty also contained
pledges to maintain the quality of Danube water and to protect the environment.
Shortly after Hungary had
rejected communism, the new regime came under heavy fire for being involved in
this "totalitarian, gigomaniac monument." By the end of 1989, Hungary had stopped work
on the Nagymaros project and on its share of the Gabcikovo power plant. Hungary sent Czechoslovakia a Note Verbale in
May 1992. It purported to terminate the
1977 treaty and claimed that completing the system would fatally damage the
environment. Negotiations having been a
failure, Czechoslovakia decided to continue on a modified version of the
project. Referred to as "Variant C," it led to the damming of the
Danube in October 1992. By mutual
agreement, both nations agreed to submit key issues in their dispute to the
International Court of Justice.
The first issue is whether
international law allowed Hungary to abandon its treaty obligations with
Czechoslovakia. Both parties agreed that
the 1977 treaty and later modifications were valid and still in force at all
relevant times. Neither side claims that
any of their agreements expressly allowed for unilateral abandonment or major
modifications of the projects. Hungary contended, however, that a state of
"ecological necessity" warranted its behavior. It predicted that the
project would silt up the river bed as well as dry out its extensive
wetlands. Extinction of fluvial flora
and fauna would follow.
By a vote of 14 to 1, the
Court, however, condemns Hungary's actions.
Hungary's own conduct made completion of the joint project impossible
and left its ecological projections highly speculative. Moreover, the customary international law of
treaties, substantially codified in the later Vienna Convention on Treaties,
does not support Hungary's theory of necessity.
"The Court concludes
from the foregoing that, with respect to both Nagymaros and Gabcikovo, the
perils invoked by Hungary, without prejudging their possible gravity, were not
sufficiently established in 1989, nor were they 'imminent'; and that Hungary
had available to it at that time means of responding to these perceived perils
other than the suspension and abandonment of works with which it had been
entrusted. What is more, negotiations were under way which might have led to a
review of the Project and the extension of some of its time‑limits, without
there being need to abandon it." [¶ 57]
By a vote of 10 to 5, the
Court holds that the Czech and Slovak Federal Republic breached the treaty when
it put Variant C into operation as of October 1992. This involved the damming up of the Danube at
river kilometer 1851.7 on Czechoslovak territory with its resulting adverse
impact on water quality and navigation.
"Slovakia also
maintained that Czechoslovakia was under a duty to mitigate the damage
resulting from Hungary's unlawful actions.
It claimed that a State which is confronted with a wrongful act of
another State is under an obligation to minimize its losses and, thereby, the
damages claimable against the wrong‑doing State. By definition all this could not be carried
out by unilateral action. In spite of having a certain external physical
similarity with the original Project, Variant C thus differed sharply from it
in its legal characteristics. ... Moreover, in practice, the operation of
Variant C led Czechoslovakia to appropriate, essentially for its use and
benefit, between 80 and 90 percent of the waters of the Danube before returning
them to the main bed of the river, despite the fact that the Danube is not only
a shared international watercourse but also an international boundary river [¶¶
68, 78].
In the Court's view, this
was an internationally wrongful act that breached the principle of
proportionality.
In addition, the Court sees
little merit in Hungary's argument that compliance with the treaty was
impossible under Article 61 of the Vienna Convention. There is little in the
record to support the notion that reasonably modified compliance with the
treaty would have been totally without benefit to the parties. Nor does the
doctrine of rebus sic stantibus avail Hungary.
There has not been such a radical alteration of circumstances that a
flexible reading of the treaty could not adapt to it.
By a vote of 11 to 4, the
Court finds that Hungary's repudiation of the treaty in May 1992 was premature
and had no legal effect on the treaty.
Czechoslovakia did not violate the treaty until it diverted the waters
of the Danube into a bypass canal in October 1992. The Court also rules, 12 to 3, that Slovakia
had succeeded Czechoslovakia as a party to the 1977 treaty in January 1993.
Finally, the Court rules,
13 to 2, that Hungary and Slovakia must adjust their differences so as to carry
out the substance of the 1977 treaty. In
accordance with the treaty, the Court also directs the parties to settle
financial accounts on the joint projects that came within the treaty and to
negotiate whatever amount of damages the respective breaches of each may have
brought about to the other.
Citation:
Case Concerning the Gabcikovo-Nagymaros Project (Hungary/Slovakia), Case No. 95
(Int'l Ct. J. September 27, 1997). [See also the Court's ruling on its visit to
the site of the above project at 1997 Int'l L. Update 79] [For more detailed
background, texts and cross-references to other material involved in the above
dispute, see 32 I.L.M. 1247 (1993).]
JUDGMENTS
Japanese Supreme Court
considers U.S. judgment of punitive damages unenforceable in Japan
In a case of first
impression in Japan, the Supreme Court of Japan held punitive damages
unenforceable in Japan. With that, the
Court affirmed an earlier Tokyo High Court decision that held a U.S. decision
awarding punitive damages partially unenforceable because the damages exceeded
the actual damages suffered by the plaintiff.
The case concerns the
enforcement of a final U.S. judgment rendered by the Superior Court of Santa
Clara, California, in 1982. Plaintiff
Toshiba Semiconductor Inc. (formerly known as Maruman Integrated Circuits,
Inc.) (located in California) develops and manufactures semiconductors. It
planned to build a factory in Oregon, but the project eventually failed. On March 7, 1980, plaintiff filed an action
seeking a declaration that a long term lease purportedly executed on its behalf
by its former CEO was void. Plaintiff named as defendants the developers of the
facility contemplated by the lease. A
convoluted action, involving a dozen parties, counterclaims, as well as
cross-defendants, ensued.
The jury found several of
the Japanese parties liable for, inter alia, intentional and negligent
misrepresentation. The Superior Court
awarded $425,251.00 in compensatory damages and $1,125,000 in punitive damages.
The Court held that the function
of punitive damages in the U.S. resembles the function of punishments such as
fines in Japan. They are incompatible
with the principles of damages awarded by Japanese courts, which are intended
to make the aggrieved party whole rather than punish the perpetrator. Punitive damages are not a proper remedy
under Japanese civil procedure, but may apply in criminal contexts. Therefore,
punitive damages are against public order. The U.S. judgment, however, is enforceable
up to the amount of actual damages.
Citation:
Decision of the Japanese Supreme Court of July 11, 1997 (Heisei 5 nen wo dai
ichi 1762 go), affirming the 1995 decision of the Tokyo High Court (Tokyo
kootoo saibansho), No. 703, 722.
Submitted by Mr. Shoichi Okuyama, Japan.
A brief English summary of the case is available on the internet at
Japan IP Resources, http://okuyama.com/ news.html. The underlying U.S. case is Maruman
Integrated Circuits, Inc. v. The Consortium Co., No. 445647 (Superior Court of
California, County of Santa Clara, May 19, 1982).
JUDICIAL ASSISTANCE
Federal District Court
rules that Hague Service Convention does not demand use of Central Authority
for serving process on U.K. defendants
A Delaware medical
technology company sued certain English medical schools seeking $7,000,000 in
damages and injunctive relief. The complaint alleged that, after plaintiff had
shared its technology with defendants in the course of setting up English
medical clinics, defendants and former members of plaintiff's organization
formed their own company to make use of the imaging system to diagnose skin
cancers, burns and ulcerations. The
system could penetrate tissue for 1.5 inches.
Plaintiff alleged that defendants had thereby infringed plaintiff's
proprietary devices.
Defendants moved to dismiss
under F.R. Civ. P. 12(b)(5) for insufficiency of service of process. They maintained that, by failing to transmit
the complaint and summons via the U.K. Central Authority, plaintiff had
contravened Articles 3 and 5 of the Hague Service Convention. The U.S. District Court for the Eastern
District of Pennsylvania denies the motion.
In the Court's view, the
Convention clearly allows service by means other than the foreign state's
Central Authority in the absence of a reservation or declaration to the
contrary by the state of service. See Article 10. Here, plaintiff employed an
English solicitor to serve defendants and they accepted service. Moreover, U.K. and Hague authorities confirm
that service by solicitor is proper under U.K. law. Finally, the service complied with due
process.
Citation:
Supra Medical Corp. v. McGonigle, 955 F. Supp. 374 (E.D.Pa. 1997).
JURISDICTION (PERSONAL)
Ninth Circuit holds that
amended Bankruptcy and Civil Procedure Rules permitting nationwide personal
jurisdiction over foreign defendants but not in force when suit filed apply in
action against former company officers because they do not affect substantive
rights
The plaintiffs are the
trustees of a litigation trust ("the Trustees"). It benefits retired employees of a company
related to Gulf USA Corp. (Gulf) in Idaho.
The defendants are the foreign officers of two companies, Inoco and
Rowland ("the Rowland Directors"), who held a controlling interest in
Inoco (UK). Inoco later bought 34% of Gulf's shares. The Rowland Directors then allegedly looted
Gulf's assets and rendered the company unable to meet its obligations for
environmental clean-up and pension benefits.
The plaintiffs' complaint
alleged that the Rowland Directors among other things, made fraudulent
conveyances, and took part in corporate waste and mismanagement, as well as
civil conspiracy. Upon motion of the Rowland Directors, the district court
dismissed one count for lack of personal jurisdiction over the Rowland
Directors. This interlocutory appeal ensued. The U.S. Court of Appeals for the
Ninth Circuit affirms the district court and remands.
When the Trustees filed
this action in 1994, Fed.R.Bankr.P. 7004(g) partially incorporated Fed.R.Civ.P.
4. The latter did not then authorize
personal jurisdiction over non-residents on the basis of nation-wide
contacts. There were, however, two later
amendments to the Rules. First, Rule
7004(f) now incorporates Rule 4 without any limitation. Second, as to federal claims, Rule 4(k)(2)
permits the exercise of jurisdiction, if consistent with the Constitution, over
non-residents who are properly served under Rules 7004(a) and Rule 4(f).
In the Court’s view,
application of this (amended) Rule to the action is just and practicable. The
defendants failed to show any prejudice because the Idaho long-arm statute
might also have reached them. Finally,
application of the amended Rule does not alter any substantive rights.
Citation: Pintlar Corp. v. Rowland, No. 96-36062 (9th
Cir. November 3, 1997).
JURISDICTION (SUBJECT
MATTER)
In case of first impression
interpreting Executive Order barring transactions with Iran, Fourth Circuit
holds that license that one party received pursuant to Executive Order may
cover other parties involved
Comet Enterprises Ltd. (UK)
(Comet) was the exclusive sales representative in Iran for Air-A-Plane
Corporation of Virginia’s aircraft equipment.
According to their contract, Air-A-Plane would pay sales commissions to
Comet for orders gotten from Iranian customers.
Iran Air bought much equipment from Air-A-Plane beginning in 1992.
For these efforts,
Air-A-Plane should have paid Comet more than $200,000 in commissions but in
fact it did not. In 1995, Comet made the
related company, Comet Enterprise, Ltd. (Iran) (jointly Comet), the beneficiary
of future Air-A-Plane sales commissions. Iran Air continued to buy equipment
from Air-A-Plane and the latter went on withholding Comet’s sales commissions.
On May 6, 1995, President
Clinton issued Executive Order No. 12959 outlawing certain transactions with
Iran [based on the International Emergency Economic Powers Act, 50 U.S.C. §
1701 (1977)]. Among other things, the
Order barred the sale of goods and services to Iranian government
entities. Related regulations from the
Office of Foreign Assets Control (OFAC) also required a license to represent
"a person in Iran" (31 C.F.R. § 560.525(b) and 560.305).
Comet sued Air-A-Plane in
federal court to collect the back commissions on its sales to Iran Air. Air-A-Plane
moved to dismiss because (i) the Executive Order barred performance of the
contract, and (ii) the court did not have jurisdiction over Comet, Iran because
it had failed to obtain an OFAC license. The lower court granted both motions.
Comet then appealed. The U.S. Court of
Appeals for the Fourth Circuit reverses and remands.
Generally, the lack of a
license does not divest the court of jurisdiction, in the Court's view, and the
Executive Order does not necessarily preclude Comet's claims. First, the federal courts have never
interpreted the OFAC licensing requirements.
Nevertheless, federal courts have been reluctant to find that failure to
comply with similar licensing requirements, such as the Cuban Assets Control
Regulations, deprived them of jurisdiction.
In its amicus brief, the U.S. stated that OFAC itself has never read its
regulation as stripping federal courts of jurisdiction to hear civil suits
brought by private foreign corporations.
Second, as a matter of
first impression, the Court analyzes the Executive Order and its implementing
regulations [31 C.F.R. § 560]. In its view, the Order does not necessarily bar
Comet's claims. The Order exempts parties from its general ban "to the
extent provided in regulations, orders, directives, or licenses that may be
issued pursuant to this order ..." (§ 1).
According to the appellate
briefs, Air-A-Plane itself had gotten a license after the Order had gone into
effect. This license entitles the holder
to export parts to Iran and to engage in “all transactions in connection with
performance of the trade contract."
This license may well have authorized Comet's suit to receive the sales
commissions on these transactions.
Citation: Comet Enterprises Ltd. v. Air-A-Plane Corp.,
No. 96-1606 (4th Cir. November 10, 1997).
MONETARY POLICY
India relaxes many of its
formerly severe restrictions on transactions in foreign currency
India is one of the
countries that still maintains restrictions on the international transfer of
currency. The Reserve Bank of India has
announced Amendments to the Exchange Control Manual (ECM) and [Exchange Control
Manual] Memorandum FLM, that liberalize certain foreign currency
transactions. These Amendments will
affect U.S. companies engaging in trade with India, hiring Indian employees, or
providing immigration and travel services to Indians.
The Amendments permit the
following transactions with corresponding foreign currency limits:
- Advance Remittance of
Imports (ECM Paragraph 7A, 10(d)): Up to U.S. $15,000 without bank guarantee.
- Release of exchange to
persons proceeding to take employment abroad (Item IX Part A of Annexure I to
Chapter 8): Up to U.S. $2,500 per person.
- Release of exchange to
persons emigrating abroad (Item X Part A of Annexure I to Chapter 8): Up to
U.S. $3,000 per person/member of family, or the amount required by the country
of emigration. This is subject to the production of supporting documentary
evidence from the new country's Mission in India.
- Basic Travel Quota (Item
XV Part A of Annexure I to Chapter 8): Up to U.S. $3,000 per person per
calendar year.
- Casual (Gift) Remittances
(Item IIA Part B of Annexure I to Chapter 8): Up to U.S. $1,000 per calendar
year per person to relatives/friends.
- Donations (Item VI Part B
of Annexure I to Chapter 8): Up to U.S. $1,000 in a calendar year per person.
These Amendments were based
on Section 73(3) of the Foreign Exchange Regulation Act, 1973.
Citation: Letter of Reserve Bank of India, Exchange
Control Department, Central Office, Mumbai 400 001, sent to all authorized
dealers in foreign exchange, and full-fledged money changers (July 8, 1997) [AD
Circular No. 24, AM Circular No. 4].
PATENTS
In case of parallel
imports, Japanese Supreme Court holds that owner of German and Japanese patents
on German products cannot bar buyer from distributing them in Japan based on
patent infringement theory absent express antidistribution agreement
A Japanese company,
Jap-Auto Products, had imported aluminum wheels made by BBS in Germany without
BBS' authorization. BBS holds the
patents in both Germany and Japan. After Jap-Auto Products sold the wheels to
Racimex Japan, BBS unsuccessfully sued to prevent the Japanese parties from
distributing BBS products in Japan.
The Supreme Court affirms
the Tokyo High Court decision of March 1995.
It agrees with the lower court that the exhaustion or first sale
doctrine prevents patentees from controlling patented goods indefinitely. Thus, no patent infringement arose from the
"parallel import" of goods patented in both Japan and Germany.
[Editors' Note: Exclusive licensees or dealerships distribute
many imported luxury products in Japan.
They often invest large sums in advertising and promotion. "Parallel importers" often take
advantage of the product's reputation and sell it at a much lower price].
The Court concludes that
the Japanese parties and BBS had not expressly agreed on which markets, if any,
they wanted to exclude.
"A patentee has an
exclusive right to commercially exploit its patented invention. ... In the case
of an invention of a product, acts of using, assigning or leasing constitute
the exploitation of the invention. ... However, in the case of the sale of
patented products in Japan by the patentee or its licensee, a relevant patent
in Japan should be deemed to have its right exhausted with respect to the
product. In that case, the effect of the patent should no longer extend to the
acts of use, assignment or lease of the patented product."
The Supreme Court also
declares: "a patentee receives proceeds ... when the patentee sells its
patented product. ... It can be said that an opportunity to secure a reward for
disclosing its patented invention is guaranteed. Thus, once the patentee or its
licensee sells Patented Products, there is no need to allow the patentee to
obtain double profits through the process of distribution."
Here, BBS, a Japanese
patentee, sold its patented product outside Japan. Thus, it cannot enforce its patent in Japan
against the buyer unless the buyer expressly agrees to exclude Japan from the
place of sale or use. Nor can it use its
Japanese patent against a third party who bought the patented products unless
it clearly places a notice of such agreement on the patented products.
Citation:
Japanese Supreme Court, Decision on case No. Heisei 7 (wo)1988, issued on July
1, 1997 (BBS Kraftfahrzeug-Technik AG v. Racimex Japan K.K.). [Translation of
decision, along with comment, by Jinzo Fujino of Morrison & Foerster,
Tokyo, is available on internet, Japan IP Resources, at
http://okuyama.com/news.html. Another comment appeared in "Intellectual
Property," November/December 1997 (New York Law Publishing Co.).]
TRADE
UNCITRAL adopts Model Law
on Cross-Border Insolvency to promote international cooperation in dealing with
financial troubles of multinational enterprises
On May 30, 1997, the U.N.
Commission on International Trade Law (UNCITRAL) has approved the final text of
a Model Law on Cross-Border Insolvency.
Its goal is to increase the degree and efficiency of international
cooperation in solving the problems that arise when multinational enterprises
get involved in reorganizations and liquidations.
Insolvency proceedings
frequently have an impact on investments and commercial interests far beyond
the borders of the nation in which they occur.
Globalization of trade demands a multilateral response to financial
crises such as those involving BCCI and Maxwell Communication. UNCITRAL chose the model-law approach because
of the difficulty in persuading nations formally to bind themselves in this
complex and controversial area of the law.
Chapter I sets forth
definitions of terms, and designates those national courts to which this Law
would apply. It also contains a public
policy exemption. Chapter II spells out
the right of direct access by a foreign representative to courts where ancillary
proceedings are taking place. Chapters
III and IV grapple with the issues of recognition of foreign proceedings,
interim protective measures, and the mode of direct cooperation between foreign
courts and representatives. In Chapter
V, there are five Articles dealing with the problems of coordinating concurrent
insolvency proceedings in different countries.
Citation:
U.N. Commission on International Trade Law: Model Law on Cross-Border
Insolvency, May 30, 1997, 36 I.L.M. 1386-98.
- U.S. Customs Service
issues technical amendments to Customs Regulations that raise user fees. The U.S. Department of the Treasury, U.S.
Customs Service, has issued technical changes and corrections to the Customs
Regulations. For example, Section 612(a)
of the Uruguay Round Agreements Act (URAA) (Pub.L. No. 103-465, 108 Stat. 4809)
amended the merchandise-processing-fee provisions of the Customs user-fee
statute. In accordance with the URAA, the regulations increase these fees. The
effective date was October 3, 1997. Citation: 62 Federal Register 51766 (October 3, 1997).
- U.S. and China
conclude agreement on space launch terms.
The U.S. Trade Representative, Charlene Barshefsky, has announced that
the U.S. and China have signed an agreement regarding space launches. This
agreement establishes guidelines on the Chinese pricing of commercial launch
services to low earth orbit (LEO). This agreement is part of the overall
U.S.-China space launch accord. The U.S. and China signed a Bilateral Agreement
on Space Launch Services in 1995 and extended an agreement that had been in
effect since 1989. Citation: U.S. Trade Representative press release
97-2 (October 27, 1997). [Available through the USTR Fax Retrieval System at
(202) 395-4809.]
- The United States and
several other nations become fellow parties to important multilateral treaties.
On April 17,
1997, the United States ratified the Protocol on Environmental Protection to
the Antarctic Treaty, with schedules and annexes. Senate Treaty Doc. 102-22 [see 30 I.L.M. 1461
(1991)]. In addition, the U.S. ratified
the Convention on the Marking of Plastic Explosives for the Purpose of
Detection [see 30 I.L.M. 726 (1991)] on April 9, 1997. As of October 16, 1996, Venezuela signed and
ratified the Convention on the Civil Aspects of International Child Abduction,
T.I.A.S. 11670. Lithuania has acceded to
the Convention Abolishing the Requirement of Legalization for Foreign Public
Documents, T.I.A.S. 10072; 33 U.S.T. 883.
Australia has acceded to, and Colombia has ratified, the 1907 Convention
for the Pacific Settlement of International Disputes, TS 536; 36 Stat.
2199. Citation: Recent Actions
Regarding Treaties to which the United States is a Party, 36 I.L.M. 1399-1403
(1998).
- Three agreements between
United States and Hungary have entered into force. The U.S.-Hungary Treaty on Extradition,
signed in 1994, has entered into effect as of March 18, 1997. On the same date, a Treaty on Mutual Legal
Assistance in Criminal Matters, with attachments, entered into force. The two countries also haved entered into an
agreement dealing with security measures for the protection of classified
military information. It became
effective on June 4, 1997. Citation:
36 I.L.M. 1050 (1997).
- ICJ to issue judgment
regarding jurisdiction over Lockerbie incident in February/March 1998. The
U.S. is seeking to have Libya surrender two of its nationals who are allegedly
responsible for the destruction of PanAm flight 103 over Lockerbie, Scotland,
on December 21, 1988. The U.S. and the
UK maintain that the ICJ has no jurisdiction in this matter and that the Libyan
complaints are inadmissible. The ICJ held hearings from 13 October through 22
October, and is expected to issue a decision on the jurisdictional matter in
February or March of 1998. Citation:
International Court of Justice press releases Nos. 97/12 (1 October 1997) &
97/13 (22 October 1997). [The transcripts of the hearings of 13-22 October are
available at the ICJ internet site www.icj-cij.org.]
- EU brings action
against U.S. before WTO regarding export subsidies. The EU has announced
that it is requesting formal consultations before the WTO regarding the U.S.
subsidy system which allegedly puts EU companies at a disadvantage. The EU
claims that the U.S. subsidies, in the form of tax exemptions, for exports
carried out by so-called "Foreign Sales Corporations" (FSCs) violate
the WTO Agreement on Subsidies and Countervailing Measures. Citation: European Union News press
release No. 77/97 (November 18, 1997).
- New German Law
comprehensively regulates multimedia services and internet and imposes
liability for content, as well as protection requirements for personal data. Effective August 1, 1977, the new German
Information and Communication Service Law (IuKDG) will
comprehensively regulate
German multimedia services and the internet. The IuKDG implements the European
Directive on the legal protection of databases (Directive 96/9/EC). The KDG
covers, for example, electronic banking, the internet or similar networks, and
the electronic sale or transfer of products and services, regardless of whether
the services are free of charge.
Generally, the new Law does not demand registration or a license for
these electronic services (§ 4). Citation: Gesetz zur Regelung der Rahmenbedingungen für
Informations- und Kommunikationsdienste (IuKDG), 1997 Bundesgesetzblatt I, page
1870. [A comment on this law appears in "Intellectual Property,"
November/December 1997 (New York Law Publishing Co.).]
