Legal Analyses written by Mike Meier, Attorney at Law. Copyright 2017 Mike Meier. www.internationallawinfo.com.

Legal Analyses written by Mike Meier, Attorney at Law. Copyright 2017 Mike Meier. www.internationallawinfo.com.

2000 International Law Update, Volume 6, Number 5 (May).

COPYRIGHT

German district court holds America On Line (Germany) liable for distributing illegal copies of copyrighted music productions through its online service

AOL Germany formed an online forum for AOL members only where they could store, copy, and swap digital recordings of music productions. AOL maintained and organized the data files, and had so-called "scouts" review them for viruses and copyright notices.

The largest German distributor of music data files, Hit Box Software GmbH (HBS), located in Karlsruhe, Germany, brought a 1998 action against AOL in a Munich court. For prices ranging from $9-$19, HBS distributes so-called "MIDI files" of instrumental music that one can play only on diskettes. The buyers are mostly amateur musicians and performers. They use them as the bases for their own performances, similar to "karaoke" productions. Plaintiff claimed that AOL should pay HBS the profits that it would have received had it sold the data file as many times as people downloaded it from AOL, that is, approximately $50,000.

At issue were three instrumental versions of pop hits (including "Get Down" by the Backstreet Boys) which many people use as "karaoke" tracks. HBS claimed that AOL's service facilitated the illegal copying of the files and the resulting copyright infringements. AOL countered that such activities are impossible to control on the internet. Thus, if AOL tried to block a certain website, e.g., www.xyz.com, it would appear the very next day as "www.xyz1.com."

According to AOL, anybody can copy data files such as the music productions at issue and distribute them via the internet. Therefore, German law should treat such data files as "shareware" or "public domain" software.

The German district court, however, essentially agrees with the plaintiff, holding that AOL's purveying of approximately 800 recordings amounted to unlawful distribution under Section 15, paragraph 2, of the Copyright Law (Urhebergesetz, UrhG). The court, however, finds that the plaintiff's claim for damages was inappropriate because it was calculated as if every download of the software had been an actual sale of the product. [Editors' Note: The Court seems to assume that the product would not have sold that many times if there had been a charge for it].

[Editors Note: In the U.S., the Recording Industry Association of America (RIAA) has similar cases currently pending against the website "MP3.com" and the producers of the software "Napster" (www.napster.com). This litigation has only just begun. On May 5, 2000, a federal court refused to grant Napster summary judgment. See A&M Records, Inc. v. Napster, Inc., No. C 99-05183 MHP (N.D. Cal. May 5, 2000)].

Citation: Landgericht Muenchen, Urteil vom 30. Maerz 2000, 7 O 3625/98 - midi files. [German court opinion is available on website "www.netlaw.de"; see also The Independent (London), April 13, 2000, page 5.]

CRIMINAL LAW

Eleventh Circuit determines that district court lacked subject matter jurisdiction to grant habeas corpus relief from U. S. citizen's foreign sentence being served in U.S. pursuant to treaty transfer

William Bishop, a U.S. citizen, took part in a conspiracy to sell 1,956 pounds of marihuana in the Bahamas. In 1995, a Bahamian court sentenced him to five years imprisonment and an $80,000 fine. If Bishop failed to pay the fine, then the prison sentence would increase another five years. Bishop did not pay the fine, thus adding five years to his sentence. The Bahamian prison authorities later granted Bishop a "remission" of his sentence to six years and eight months.

In 1996, the U.S. Department of Justice requested that The Bahamas transfer Bishop to the U.S. to serve the remainder of his sentence, pursuant to the Council of Europe Convention on the Transfer of Sentenced Persons (March 21, 1983, 35 U.S.T. 2867, T.I.A.S. No. 10824) (entered into force for U.S. on July 1, 1985) to which both the U.S. and The Bahamas are parties. A U.S. magistrate held a Bahamian hearing involving Bishop and other U.S. offenders to confirm their consent to the transfer. At a later proceeding in New York, counsel informed Bishop that only a proceeding in The Bahamas could modify his sentence.

When Bishop failed to pay his fine, the U.S. Bureau of Prisons recalculated his prison sentence to include the additional five years imposed by the Bahamian court in case of non-payment. The U.S. Parole Commission later converted the additional five years into supervised release.

A federal public defender argued on Bishop's behalf that imprisonment for inability to pay would be an unconstitutional imprisonment for debt in the U.S. and filed for habeas corpus in federal court. The district court eventually struck Bishop's extra five-year sentence for non-payment of the fine. The U.S. Court of Appeals holds that the district court lacked subject matter jurisdiction to grant habeas relief in such a case, and therefore remands for dismissal.

"To decide if the district court had jurisdiction to grant collateral, habeas relief on a foreign sentence is to delineate the interaction between the Treaty and the implementing statutes, which determine the procedure in the United States for administering a foreign-imposed sentence to be completed here. (Cits.). ... The Treaty signatories recognized 'that foreigners who are deprived of their liberty as a result of their commission of a criminal offense should be given the opportunity to serve their sentences within their own society' and 'that this aim can be achieved by having them transferred to their own countries.' (Cits.). ... "

"Nevertheless, '[a] sovereign nation has exclusive jurisdiction to punish offenses against its laws committed within its borders, unless it expressly or impliedly consents to surrender its jurisdiction.' (Cits.) ... Furthermore, provisions of our Constitution, including the writ of habeas corpus, 'have no relation to crimes committed without the jurisdiction of the United States against the laws of a foreign country'; an American citizen who commits a crime in a foreign country is subject to trial and punishment under the laws of that country ..." [Slip op. 13-14]

Under Article 13 of the Treaty, the sentencing state has the exclusive right to decide on any review or modification of the sentence. If, after transfer to the U.S., the U.S. were to disregard foreign sentences for U.S. citizens who committed crimes abroad, foreign governments would stop consenting to such transfers.

Therefore, Bishop's sentence "was consistent with and not 'in violation of the Constitution or laws or treaties of the United States.' ... The implementing statutes clarify 'that while the laws of the receiving nation shall govern the manner in which the sentence is served, the laws of the sentencing nation shall continue to govern both the validity of the conviction and the term of the sentence.' ... Therefore, we reverse the district court's grant of habeas relief to Bishop because the judge had no jurisdiction to entertain Bishop's habeas corpus petition challenging his sentence, much less to eliminate the supervised release established by the Parole Commission to retain the original Bahamian sentence." [Slip op. 29]

Citation: Bishop v. Reno, No. 98-4109 (11th Cir. April 24, 2000).

HUMAN RIGHTS

European Court of Human Rights rules that Italy violated art purchaser's peaceful possession of Van Gogh painting under Protocol No. 1 by waiting undue period of time before pre-empting painting at figure much below its current market value

Ernst Beyeler is a Swiss national who lives in Basle and owns an art gallery. In 1977, Mr. Beyeler bought a 1989 Van Gogh painting entitled "Portrait of a Young Peasant" for 600,000,000 Italian Lire [probably between $300,000 and $500,000]. He made the purchase through a Roman antique dealer as an intermediary and, apparently to keep from being overcharged, did not disclose his identity to the seller.

As a result, when the vendor filed a declaration of sale with the Italian Ministry of Cultural Heritage pursuant to Law No. 1089 of 1939, the declaration did not mention Mr. Beyeler's name. In 1983, the applicant and the dealer reported to the Ministry the true identity of  the buyer. Between 1983 and 1988, there were many discussions about the fate of the painting, its proper storage, whether applicant had good title and whether the Ministry's budget would allow its purchase.

In May 1988, Mr. Beyeler agreed to sell the work to the Solomon Guggenheim Foundation, a U.S. corporation with its headquarters in New York City, which planned to exhibit the painting in its Venetian museum. The sale price was $8,500,000. Six months later, the Italian Ministry exercised its right of pre-emption, citing the shortage of Van Gogh paintings in Italy. On the theory that Mr. Beyeler's illegal failure to notify it that he had been the buyer back in 1977 invalidated that purchase, the Ministry bought the painting at the 1977 sale price.

Having been unsuccessful in obtaining redress in the Italian courts, Mr. Beyeler (applicant) filed a complaint with the European Commission of Human Rights in 1996 alleging that the actions of the Italian Ministry had infringed his property rights guaranteed under Article I of   Protocol No. 1 of March 1952  [213 U.N.T.S. 262,  E.T.S. 9]  of the European Convention on the Protection of Human Rights and Fundamental Freedoms. [Editorial Note: as of January 1, 1999, all parties to the main Convention had ratified the Protocol except Switzerland and Andorra. See B. Carter & P. Trimble, International Law, Selected Documents (1999)]

Applicant specifically urged that the Italian authorities had, in effect, expropriated the painting "of which he claimed to be the lawful owner" in breach of the conditions prescribed by Article I.

Article I provides that: "[e]very natural or legal person is entitled to the peaceful enjoyment of his possessions. No one shall be deprived of his possessions except in the public interest and subject to the conditions provided for by law and by the general principles of international law. The preceding provisions shall not, however, in any way impair the right of a State to enforce such laws as it deems necessary to control the use of property in accordance with the general interest or to secure the payment of taxes or other contributions or penalties." After a September 1999 hearing, the Chamber holds 16 to 1 that the Italian government had failed to comply with Article I.

The Court first points out that the Italian courts had recognized applicant's proprietary interest under national law "even if it was revocable in certain circumstances" between 1977 and 1988. The national courts had thus treated applicant as holding title to the painting under the 1977 sale and had paid applicant his original purchase price. In the interim, the Italian authorities had, with some ambivalence, treated applicant as having a de facto proprietary interest in the painting. Thus, the Court concludes that applicant had enough of a possessory interest in the Van Gogh to bring him within the first sentence of Article I.

Although the pre-emption without doubt constituted an "interference" with applicant's right to peaceful possession of the painting, the Court can find nothing in the record to suggest that the Italian authorities had applied domestic law in a clearly erroneous or arbitrary manner. On the other hand, the Court declares that the Principle of Legality assumes that the applicable provisions of Italian law were "sufficiently accessible, precise and foreseeable." [Para. 109] Here, the statute left open the time-limit for exercising a right of pre-emption in the case of an incomplete declaration and did not set forth a remedy for late discovery of the facts. While not controlling, the Court finds that this uncertainty and the broad scope of ministerial discretion are important factors in deciding whether the statute had struck a fair balance between applicant's rights and the public interest.

This case, of course, does not deal with returning a work of art to its nation of origin. Apart from this element, a state does have a legitimate interest in art works lawfully within its jurisdiction. Since they belong to the cultural heritage of all nations, that state can properly adopt proportional measures to facilitate wide public access to such works.

Italy points out that applicant's own behavior had not been particularly forthcoming. He had originally failed to disclose his identity as buyer and had let six years pass before he revealed his purchase of the painting in the course of his negotiations to sell it to the Guggenheim museum in Venice. In the Court's view, the fact that he could easily have filed the statutory notice of identity before this time carries some weight against him.

The Court does not question the right of pre-emption as such or the state's interest in knowing the details of an art sale to enable it to more intelligently decide whether or not to exercise the right of pre-emption. Nevertheless, claiming uncertainty as to applicant's title, the Ministry had delayed five more years before seriously considering the question of title to the painting and determining to take possession of it.

Nor could the Court find a convincing explanation for a delay so prejudicial to applicant. "Thus, taking punitive action in 1988 on the ground that the applicant had made an incomplete declaration, a fact of which the authorities had become aware almost five years earlier, hardly seems justified. In that connection it should be stressed that where an issue in the general interest is at stake it is incumbent on the public authorities to act in good time, in an appropriate manner and with utmost consistency." [Para. 120]

Moreover, between 1983 and 1988, the fair market value of this painting had greatly increased. By its delayed pre-emption and its payment of much less than the 1983 market value, the Ministry had unjustly enriched itself. Without regard to the fact that applicant was not an Italian national, such enrichment did not comport with a fair balance between the state and the individual. Nevertheless, the Court refrains from awarding applicant monetary damages until the parties have had a chance to re-negotiate during the next six months.

Citation: Beyeler v. Italy  (Eur. Ct. Hum. Rts, 5 January 2000) [Judgment is accessible on Court's new Internet site "http://www.echr.coe.int"].

JUDICIAL ASSISTANCE

Fourth Circuit rejects request by Mohamed Al Fayed under Section 1782 for documents held by National Security Agency regarding death of son and Princess Diana in automobile crash

Mohamed Al Fayed's son, Dodi Fayed, and Diana, Princess of Wales, died as the result of a 1997 car accident in Paris. In February 1999, Al Fayed sought information from U.S. government agencies regarding the death of his son. For example, he asked the district court to issue a subpoena duces tecum against the National Security Agency (NSA) under 28 U.S.C. Section 1782.

Al Fayed presented a 1998 letter from the NSA in response to a news agency's Freedom of Information Act (FOIA) request. In the letter,  the agency admitted that it had 182 documents pertaining to Princess Diana, but denied access to 39 classified NSA documents. Al Fayed's attorneys later sent in a FOIA request for precisely the same documents. Under FOIA, an agency does not have to disclose documents that are "specifically authorized under criteria established by an Executive order to be kept secret in the interest of national defense or foreign policy ..." 5 U.S.C. Section 552(b)(1).

Section 1782(a) authorizes district courts, at the request of an "interested person," to order document production for use in proceedings in a foreign or international tribunal. Here, Al Fayed claimed that he intended to use the documents sought in a proceeding before a French magistrate judge investigating the accident.

[Editors' Note: in September 1999, the French Juge d'Instruction, Herve Stephan, closed the investigation into whether the government could hold members of the press criminally responsible for the crash, and found that the driver's drunkenness was the true cause. Al Fayed has appealed the termination of the investigation.]

The district court considered Al Fayed's application an attempt to circumvent FOIA and declined to issue the subpoena. Al Fayed appealed, arguing that the district court had erroneously assumed that he was asking for the same documents as in the news agency's FOIA request. The U.S. Court of Appeals for the Fourth Circuit finds no abuse of discretion under Section 1782 and affirms.

"The arguments and evidence that Al Fayed did present in his application understandably elicited skepticism from the district court. Al Fayed, a private party, asked the district court to issue a subpoena ex parte to an agency whose work involves some of the most sensitive and necessarily secretive operations of the United States government. Rather than asserting a right under FOIA, the typical route for private parties to gain access to government documents, he invoked a statutory provision typically utilized by foreign judicial officials, occasionally utilized by prosecutors, plaintiffs and defendants in foreign judicial proceedings, and almost never utilized by persons in Al Fayed's position. He offered scant materials in support of his application, and he only summarily explained the purpose and function the requested documents would serve in the foreign proceeding."

"Disclosure of the documents sought in Al Fayed's application had already been identified by NSA as potentially causing 'exceptionally grave damage to the national security.' Under these circumstances, the district court was well within its broad discretion to deny the application. The statute explicitly commits to the district court's discretion the determination of whether to grant a request for assistance in a foreign tribunal. The district court appropriately exercised that discretion here." [Slip op. 8-9]  The Court also spurns Al Fayed's argument that he was in fact seeking documents that were different from the news agency's FOIA request.

Citation: In Re: Mohamed Al Fayed v. United States, No. 99-1268 (4th Cir. April 26, 2000); [See also Washington Post, April 27, 2000, page B2.]

JURISDICTION (SUBJECT MATTER)

In dispute between U.S. and Hong Kong communications companies, Tenth Circuit rejects claim that forum-selection or choice-of-law issues implicate court's subject matter jurisdiction

In 1993, The Wharf (Holdings) Limited (Wharf), a Hong Kong company, won a franchise to operate a cable television system in Hong Kong. During the preparation of its bid, Wharf needed a partner with experience in the cable industry and negotiated separately with two U.S. companies, United International Holdings, Inc. (UIH) and NYNEX Network Systems Company (NYNEX),  so that it could present them as experienced partners in the endeavor. UIH agreed to provide technical expertise for Wharf's bid and in return expected to receive 10% of the shares of the Hong Kong cable television system.

After Wharf won the bid, its board of directors stalled UIH's participation and informed UIH that it "is not ready to entertain your investment at this time." UIH brought an action in federal court premised on Section 10(b) of the Securities and Exchange Act of 1934 and Colorado law. The jury found in favor of UIH and awarded $67 million in compensatory and $58.5 million in punitive damages. Wharf noted an appeal.

The U.S. Court of Appeals for the Tenth Circuit affirms. One of Wharf's arguments on appeal was that Hong Kong law governed the relationship between Wharf and UIH. Since it barred the application of U.S. federal securities law, it prevented the exercise of federal jurisdiction. Wharf pointed to several documents that the parties had drafted — but never signed — that provided that Hong Kong law governed and that the parties would submit to the non-exclusive jurisdiction of Hong Kong courts.

The Court finds the unsigned documents insufficient to constitute binding forum-selection and choice-of-law provisions. Moreover, the Court disagrees with the premise underlying Wharf's argument, i.e., that forum-selection or choice-of-law issues implicate a court's subject matter jurisdiction.

"Forum selection issues raise concern not of subject matter jurisdiction but of improper venue or failure to state a claim on which relief may be granted. ... Choice of law issues are equally unrelated to subject matter jurisdiction; state and federal courts routinely apply to [sic] the law of other states, even of other countries. ... Although a district court applying foreign law might find it appropriate to exercise its discretion and either transfer venue or dismiss a case on grounds of forum non conveniens, the court here denied Wharf's motion to dismiss for forum non conveniens, a ruling that Wharf does not separately appeal." [Slip op. 30-31]

In addition, Wharf  failed to present any choice-of-law issue regarding UIH's Rule 10b-5 claim. Here, it is enough that the 1934 Act reaches Wharf's conduct. It prohibits fraud in the sale of securities where significant conduct occurs in the U.S. or where the conduct has substantial effects in the U.S.

Finally, Wharf failed to identify any international comity or international choice-of-law rule that would require the court to decline jurisdiction in this case. The Tenth Circuit has stated that it will not consider an international-comity or choice-of-law issue unless there is a "true conflict" between U.S. and foreign law. A true conflict exists only when a person subject to the laws of two countries cannot comply with both. Here, a true conflict would exist only if Hong Kong law required Wharf to follow a course of action that amounted to securities fraud under the 1934 Act.

Citation: United Int'l Holdings, Inc. v. The Wharf (Holdings) Ltd., No. 97-1421 & 98-1002 (10th Cir. April 28, 2000).

TAXATION

Canadian Federal Court of Appeal rules that bilateral Tax Convention exempts U.S. resident who earned substantial income as temporary computer instructor at facilities of Canadian  company in Calgary from  payment of Canadian income tax

William A. Dudney is a U.S. citizen with a degree in aerospace engineering. Over time, he has achieved expertise in object-oriented technology (OOT), a new and sophisticated method of developing computer systems.

A company calling itself Object Systems Group Corporation (OSG) entered into a master agreement of indefinite duration with PanCanadian Petroleum Ltd. (PanCan) to train their employees in how to use OOT to develop computer systems.

Unable to find enough Canadians qualified in OOT, OSG recruited Dudney who was then living in Texas as a contractor. The training project was to last about one year. The classes took place in PanCan facilities in Calgary which the instructors could use only for OOT training during regular working hours. PanCan had the sole discretion as to what office spaces the project could use.

Retaining an office in his Houston home, Dudney had no letterhead or business cards showing his work in Calgary. After he billed them for his hours, PanCan sent Dudney's checks to his Houston bank. Dudney spent 300 days in Canada in 1994 and about 40 days in 1995. He then gave 30 days notice and left the project to return to Houston for personal reasons.

Dudney filed Canadian income tax returns for those years in which he claimed that his income was exempted from Canadian taxation based on Article XIV of the Canada-United States Income Tax Convention of 1980, T.I.A.S. No. 11087. That Article provides that: "Income derived by an individual who is a resident of a Contracting State in respect of independent personal services may be taxed in that state. Such income may also be taxed in the other Contracting State if the individual has or had a fixed base regularly available to him in that other State but only to the extent that the income is attributable to the fixed base." [emphasis supplied]

Relying on Convention Article XIV, the Crown assessed a tax on Dudney's income from the OOT project. On Dudney's appeal, the Tax Court of Canada ruled for Dudney. The Crown then took the case to the Federal Court of Appeal. That Court unanimously dismisses the Crown's appeal.

Preliminarily, the Court points out that tax conventions in general seek to avoid both double taxation as well as evasion of taxes by persons residing in one country who earn income in the other. Article XIV, however, specifically contemplates the possibility of the double taxation of a person who, as the Crown alleged here, earned income from a "fixed base regularly available to him" in Canada. (Article XXIV, however, would avoid the onus of double taxation by allowing a tax credit against U.S. taxes.)

After analyzing the traveaux preparatoires of the present Convention as well as of the comparable provisions of the OECD Model Taxation Convention of 1977, the Court agrees with taxpayer as to the effect of Article XIV. "The evidence as a whole gives ample support for the conclusion that the premises of PanCan were not a location through which Mr. Dudney carried on his business. Although Mr. Dudney had access to the offices of PanCan and he had the right to use them, he could do so only during PanCan's office hours and only for the purpose of performing services for PanCan that were required by his contract. He had no right to use PanCan's offices as a base for the operation of his own business. He could not and did not use PanCan's offices as his own." [Para. 20]

Citation: Dudney v. Regina, C.C.L. 7710 (T.C.C.)  (Fed. Ct. App. February 24, 2000).

TORTS

In tort action brought by survivors of Indian citizen killed in waters of United Arab Emirates, Texas Supreme Court holds that its courts may entertain suit because Article 14(1) of International Covenant on Civil and Political Rights grants U.S. citizens equal treaty rights to bring such suits in India

Alimuddin Sirajuddin Kazi, a citizen of India not residing in the United States, lost his life while employed on an oil rig in the coastal waters of the United Arab Emirates. His survivors (plaintiffs), all Indian citizens, brought a wrongful death action in the Texas state courts in 1993 relying on Section 71.031 of the Texas Civil Practice and Remedies Code.

This provision admits wrongful injury or death suits to the Texas courts, inter alia, if: "in the case of a citizen of a foreign country, the country has equal treaty rights with the United States on behalf of its citizens." [emphasis supplied] Defendants include Dubai Petroleum Company, Inc., Conoco, Inc., Dresser Industries, Inc. d/b/a Dresser‑Rand Co., Aeroquip Corporation, Solar Turbines Incorporated, and Energy Service International, LTD a/k/a ESI., Inc.

Concluding that U.S. citizens lack "equal treaty rights" in India, the trial court dismissed the case for lack of jurisdiction based on failure to comply with Section 71.031. The intermediate appellate court reversed, holding that the statute pertained to the statement of a substantive cause of action and was not jurisdictional. It also held that both India and the U.S. are parties to the International Covenant on Civil and Political Rights, 999 U.N.T.S. 171, 6 I.L.M. 368 (ICCPR) and it provides U.S. citizens equal treaty rights in India. On certiorari, the Texas Supreme Court affirms and remands.

The Court first notes that the legislative history of the statutory language and the case law throw little or no light on its intended meaning. The statute would ordinarily not assume that a treaty conferred specific substantive rights on U.S. citizens.

"Absent any other reasonable construction, the most plausible reading of the 'equal  treaty rights' provision is that the Legislature intended to condition a foreign citizen's right to sue on personal injury or death claims on the r injured party's country of citizenship and pursue a personal injury or death claim to the same extent that a citizen of that country could do so. As we noted earlier, 'equal treaty rights' does not mean that the foreign country must provide the same substantive rights, procedures, or remedies as Texas law. The provision simply means that the foreign country's law must, based on a treaty, afford United States citizens access to its courts to pursue any remedies available to its own citizens for personal injury or wrongful death." [80]

Since U.S. courts tend to interpret treaties broadly, an applicable treaty need only imply equal court access such as by providing for general due process protections or by otherwise indicating that the other nation's courts would be open to U.S. plaintiffs. The presence of appropriate language in a Convention to which both India and the U.S. belong raises a rebuttable presumption in support of plaintiffs' case. Defendants can destroy the presumption by producing evidence that U.S. citizens do not in fact have equal access to Indian courts under its laws. Plaintiffs retain the overall burden, however, of persuading the court that such equal access is available to U.S. plaintiffs.

Under the restraints placed on the states by Zschernig v. Miller, 389 U.S. 429 (1968), this Court cannot engage in minute inquiries into the actual administration of a foreign nation's legal system or into the credibility of foreign diplomatic statements. It has to limit its statutory inquiry to whether the law of the foreign state on its face or in theory grants U.S. citizens equal treaty rights.

Although plaintiffs cited eight different treaties to the Court, they relied mainly on Article 14(1) of the ICCPR. It provides that: "[a]ll persons shall be equal before the courts and tribunals. In the determination of any criminal charge against him, or of his rights and obligations in a suit at law, everyone shall be entitled to a fair and public hearing by a competent, independent and impartial tribunal established by law...."

In the Court's view, this language suggests that United States citizens will be able to pursue any remedies available in India's courts, including those for personal injury and wrongful death. Defendants countered by pointing to the U.S. Senate's Declaration in consenting to the President's ratification that the first twenty-seven articles of the ICCPR were not "self-executing." If this is binding, Article 14(1) would arguably not confer judicially enforceable rights on Indian citizens in the U.S. legal system. The Court sidesteps this issue, however.

"Under our construction of the 'equal treaty rights' requirement, the only issue is whether‑‑based on a treaty‑‑Indian law allows United States citizens to pursue claims for personal injury or death to the same extent that it allows Indian citizens to pursue these claims. Because our focus is on the rights of United States citizens in Indian courts, we need not consider whether or not the Covenant grants rights to Indian citizens in the courts of this country." [82]

The bottom line is that plaintiffs have triggered a presumption that Indian law does grant equal rights to U.S. plaintiffs. This is enough to require a remand to the trial court where the parties can, pursuant to Tex. R. Evid. 203, fully litigate the issues of what Indian law actually provides. Methods of proof might include, for example, expert testimony or affidavits, treatises, authoritative statutes, regulations and so forth. [Compare Fed. R. Civ. P. 44.1 dealing with proof of foreign law in U.S. federal courts. See generally J. Schmertz, A Modern Procedural Framework for Establishing the Law of a  Foreign Country, 28 Practical Lawyer 63 (1982). ]

Citation: Dubai Petroleum Company v. Kazi, 43 Tex. Sup. Ct. J. 412, 12 S.W.3d 71 (2000).

TRADEMARKS

In Austrian litigation brought by Polo/Lauren of New York, European Court of Justice rules that Austrian courts may apply Community's 1994 anti-piracy regulation to seize counterfeit clothing being shipped via Austria though consignor is Indonesian and consignee is Polish

The Polo/Lauren Company, L.P., has its registered office in New York and holds several verbal and pictorial trademarks which it has registered in Austria and which are recognized worldwide. Relying on Regulation (EC) No. 3295/94, the EC's "anti-piracy" regulation, Polo/Lauren asked the Austrian customs authorities to detain a batch of allegedly counterfeit Polo T-shirts bearing its trademarks. The Arnoldstein customs office responded by temporarily detaining 633 Polo T-shirts in a Linz warehouse. PT. Dwidua Langgeng Pratama International Freight Forwarders (Dwidua), an Indonesian company, was the consignor and the consignee was Olympic-SC, a Polish company.

Filing in the Landgericht Linz, Polo/Lauren obtained an order that barred Dwidua from selling the counterfeit goods and that allowed Polo/Lauren to destroy the detained T-shirts and send the bill to Dwidua. In the course of an appeal, the Oberster Gerichtshof  (Austrian Supreme Court) was uncertain on whether Regulation (EC) No. 3295/94 applied where a customs office of a Member State detains goods bearing the trademark of a company from a non-member nation which have been imported from a non-member country on its way to another non-member state. The Court stayed its proceedings and referred this legal question to the European Court of Justice (ECJ) under Article 234 [formerly Article 177].

The ECJ upholds the use of the Regulation in the instant context. The Council based the Regulation in particular on Article 113 of the EC Treaty  (now Article 133 EC) dealing with the Common Commercial Policy. According to its preamble, the Regulation seeks to prevent, as far as possible, the insertion of counterfeit and pirated goods into the internal market and to adopt measures to deal effectively with unlawful trade in such goods. It also takes into account the terms of the GATT agreement on trade‑related intellectual property (TRIPS) issues, including trade in counterfeit goods. It is immaterial whether the trademark holder's registered office lies within or without the EC.

"In view of the foregoing considerations, the answer to the national court's question must be that Article 1 of the Regulation is to be interpreted as being applicable where goods of the type specified in the Regulation, imported from a non‑member country, are, in the course of their transit to another non‑member country, temporarily detained in a Member State by the customs authorities of that State on the basis of the Regulation and at the request of the company which holds rights in respect of those goods which it claims have been infringed and whose registered  office is in a non‑member country." [Para. 29]

A further issue looked at by the ECJ is whether this Regulation can validly apply to a situation such as this case presents, i.e., where it superficially lacks any direct link to the internal market. The Court first notes that EC institutions have the power to enact common rules for halting the trade in counterfeit goods under an external transit procedure. Moreover, the external transit of non-Community goods under Article 84 of the Regulation  is not entirely bereft of impact upon the internal market.

"After all, the external transit of non‑Community goods ... is, in fact, based on a legal fiction. Goods placed under this procedure are subject neither to the corresponding import duties nor to the other measures of commercial policy; it is as if they had not entered Community territory. In reality, they are imported from a non‑member country and pass through one or more Member States before being exported to another non‑member country. This operation is all the more liable to have a direct effect on the internal market as there is a risk that counterfeit goods placed under the external transit procedure may be fraudulently brought on to the Community market ... ." [Para. 34].

Citation: The Polo/Lauren Company, L.P. v. PT. Dwidua Langgeng Pratama International Freight Forwarders, Case C-383/98 [Eur. Ct. of Just., 6 April 2000]. [Readers may consult full text of judgment at Court's home page: "www.curia.eu.int"].

TRADEMARKS

In trademark dispute over Mexican frozen lollipops, Fifth Circuit in case of first impression finds that confusion was unlikely because product name was  generic Spanish word

Guadalajara, Inc. d/b/a Dulces Vero USA (hereinafter "Dulces Vero") is based in Mexico and manufactures lollipops for the U.S. and Mexican markets. One of its lollipops is yogurt flavored and sold under the name "Chupa Gurts." Enrique Bernat F., S.A. and S.A. Chupa Chups (jointly "Chupa Chups") are based in Spain and make lollipops in the U.S., Mexico, and other countries. Its best-sellers are "ice cream flavored" lollipops sold under the name "Chupa Chups."

Chupa Chups brought an infringement action against Dulces Vero because it was marketing "Chupa Gurts" in the U.S. in violation of Chupa Chups' trademark. The district court found that Dulces Vero's mark "Chupa Gurts" was infringing the mark "Chupa Chups" and granted a preliminary injunction barring Dulces Vero from selling or marketing its "Chupa Gurts" in the U.S. Dulces Vero appealed the preliminary injunction.

The U.S. Court of Appeals for the Fifth Circuit reverses. The Court concludes that there is no likelihood of confusion between the marks "Chupa Gurts" and "Chupa Chups." The term "chupa" is a generic Spanish word used for lollipops. The district court erred in its likelihood-of-confusion analysis because it had focused on the generic segments of the marks ("Chupa", meaning "lollipop") instead of looking at the arbitrary parts of the marks ("Chups" and "Gurts").

"The parties agree that application of the doctrine of foreign equivalents governs the outcome of this dispute. This doctrine requires courts to translate foreign words into English to test them for genericness or descriptiveness. ... The act of translation, of course, can itself be an imprecise task, as foreign words sometimes have no exact equivalent in English; therefore, courts may rely on the 'primary and common translation' in determining English equivalency."  [Slip op. 6-7]

The Spanish word "chupa" means "to lick" or "to suck." In Spanish slang it also means "lollipop." The district court relied heavily on the dictionary translation of the word "chupa," which did not include "lollipop." A foreign word, however, can be generic despite its absence from the dictionary. Chupa Chups' own representative, among others, testified that "chupa" simply means "lollipop" in certain regions of Latin America.

Furthermore, considerations of international comity support this finding. "If we permit Chupa Chups to monopolize the term 'chupa,' we will impede other Mexican candy makers' ability to compete effectively in the U.S. lollipop market. Just as we do not expect Mexico to interfere with Tootsie's ability to market its product in Mexico by granting trademark protection in the word 'pop' to another American confectioner, so we cannot justify debilitating Dulces Vero's attempt to market 'Chupa Gurts' in the United States by sanctioning Chupa Chups' bid for trademark protection in the word 'chupa.'" [Slip op. 14]

Citation: Enrique Bernat F., S.A. v. Guadalajara, Inc., No. 99-50854 (5th Cir. April 18, 2000).

WORLD TRADE ORGANIZATION

WTO Panel agrees with U.S. that Canada's seventeen-year patent term is too short and thus fails to comply with WTO's TRIPS Agreement that specifies twenty-year term

On May 5, 2000, a Dispute Settlement Panel of the World Trade Organization issued its report in the U.S.-Canada dispute over Canada's term of patent protection. The Panel essentially agreed with the U.S. that Canada's 17-year patent protection fails to comply with the WTO Agreement on Trade-Related Aspects of Intellectual Property Rights (TRIPS Agreement).

The U.S. had requested that a Dispute Settlement Panel review the matter in July 1999. The U.S. argued in its complaint that the TRIPS Agreement requires WTO Members to grant a minimum term of protection to all patents existing as of the date of application of the Agreement, and that Canada must apply the Agreement as of January 1, 1996.

Article 70.2 of the TRIPS Agreement provides that "this Agreement gives rise to obligations in respect of all subject matter existing at the date of application of this Agreement for the Member in question, and which is protected in that Member on the said date ..."

Canada's Patent Act provides that patent applications filed before October 1, 1989, would receive patent protection for only 17 years from the date the patent is issued. Article 33 of the TRIPS Agreement requires WTO Members to provide a patent protection term of at least 20 years from filing for all patents existing on January 1, 1996.

Canada relied on Article 28 of the Vienna Convention, arguing that there is a presumption against retroactivity for treaties. It provides: "Unless a different intention appears from the treaty or is otherwise established, its provisions do not bind a party in relation to any act or fact which took place or any situation which ceased to exist before the date of the entry into force of the treaty with respect to that party."

The Panel concludes, however, that:  (1) the reference in Article 702 to "subject matter ... which is protected" on the date of the application of the TRIPS Agreement includes inventions that are currently protected by patent(s) and that were protected by patent(s) as of January 1, 1996;  (2) section 45 of Canada's Patent Act fails to comply with Article 33 because it does not grant a 20-year patent protection.

Citation: Canada - Term of Patent Protection (WT/DS170/R) (5 May 2000); U.S. Trade Representative press release 00-34 (May 5, 2000). [Panel Report is available on WTO website "www.wto.org".]

WORLD TRADE ORGANIZATION

WTO Dispute Settlement Panel finds that Korean procurement practices for construction of Inchon International Airport do not violate WTO trading rules because WTO Government Procurement Agreement does not apply to procuring entities

The Inchon International Airport (IIA) is currently under construction on reclaimed land between Yongjong and Yongyu islands, approximately 52 kilometers west of the capital, Seoul. The Korean Government provides approximately 40% of the funds while the rest comes from sources such as Korean and international capital markets.

The WTO Agreement on Government Procurement (GPA) applies to each WTO member's government entities classified as "central government entities," "sub-central government entities," and "other entities" (see Annexes 1 to 3 of Appendix I to the GPA). Korea acceded to the GPA in 1994, noting that it would not apply the GPA to airport procurement (See Paragraph 2.44 of Panel Report).

The U.S. had brought the complaint challenging Korea's government procurement practices for the airport by asking for consultations in February 1999. After these consultations failed, the U.S. requested the establishment of a Panel to decide the dispute in May 1999. In its request, the U.S. claimed, among other things, that (1) contractors had to have manufacturing facilities in Korea to qualify, (2) foreign firms must partner with Korean firms, and (3) there were no procedures, as required by the GPA, to challenge breaches of the GPA. Korea contended that the list of Korea's central government entities as specified in Annex 1 of Korea's obligations in Appendix I of the GPA do not cover the procurement entities.

The Panel therefore concludes that: (1) neither Korea's Appendix I of the GPA nor Korea's obligations under the GPA applied to the procurement entities for the IIA project; (2) the U.S. failed to show that measures taken by Korea (whether or not consistent with the GPA) nullified or impaired benefits reasonably expected to accrue under the GPA or in the negotiations resulting in Korea's accession to the GPA, within the meaning of the GPA'S Article XXII:2.

Citation: Korea - Measures Affecting Government Procurement (WT/DS163/R) (1 May 2000). [Panel Report is available on WTO website "www.wto.org"]

Russian Duma ratifies START II treaty. On April 14, 2000, the Russian Parliament (Duma) voted 288-131 to ratify the START II nuclear arms reduction treaty. It commits the Russian Federation and the U.S. to reduce nuclear warheads to 3,000 and 3,500, respectively, down from the 6,000 agreed to under START I. The Duma added a non-binding amendment to the treaty which gives Russia the right to revoke START II if the U.S. violates ABM Treaty provisions that limit the construction of missile defenses. On April 19, 2000, the Federation Council (upper house of parliament) voted 122-15 in favor of the treaty. Citation: Washington Post, April 15, 2000, page A1 & April 20, 2000, page A26; Agence France Presse report of April 19, 2000.

Kansas Supreme Court interprets Vienna Consular Convention. According to Article 37 of the Vienna Convention on Consular relations, 21 U.S.T. 77, T.I.A.S. No. 6820, "competent authorities" shall inform "without delay" a foreign nation that one of its citizens had died "where the appointment of a guardian or trustee appears to be in the interests of a minor or other person lacking full capacity who is a national" of that nation. In this case, the minors' mother had passed away in the U.S. The attorney, representing the minors' aunt, phoned the Mexican Consulate in August 1998 and reported the facts of the case. In a custody case, the Consul and a maternal grandfather unsuccessfully sought party-in-interest status in the Kansas court alleging that the attorney was not a "competent authority" and that the phone call had been insufficient notice under the Convention. The Kansas court ultimately gave custody of the two children to a paternal aunt and uncle. On  appeal, the Kansas Supreme Court upholds the lower court's application of the Convention. The Court noted that the Consulate had responded to the phone call by notifying maternal relatives in Mexico and had enabled the aunt to enter the U.S. to claim the body of the deceased. While perhaps not the best possible form of compliance, the Court finds the notice given to have been adequate to achieve the cooperative goals of the Convention. Citation: In the interest of L.A.M. and R.K.M. (minors), 996 P.2d 834 & 839 (Kan. 2000).

China bans direct sales or "pyramid" schemes. With a Circular issued on April 3, 2000, the Chinese State Administration for Industry and Commerce has banned "direct sales schemes," also referred to as "pyramid schemes." According to the Xinhua News Agency, "pyramid schemes" operating through chain stores or the internet defraud the people. "Pyramid schemes deceive people into buying things, mostly fake products, and have caused severe damage. Some of them in disguised form even promote superstition among sales personnel, posing a threat to social order and stability."   Such networks create widespread organizations of individuals and groups with similar economic interests, thus posing a potential political threat to the regime. The State Administration for Industry and Commerce had issued a similar Circular in April 1998, entitled "Notice on Prohibition of Pyramid Sales." It had allegedly caused riots and demonstrations. Citation: Xinhua News Agency report, April 5, 2000, available on website "www.xinhua.org", where text of  Circular will also become available; [See also Stratfor.com's Global Intelligence Update - 05 April 2000, available on website "www.stratfor.com".]

U.S. district court rules on "dolphin safe" tuna labels. On April 11, 2000, the U.S. District Court for the Northern District of California granted a motion for summary judgment in a case focusing on "dolphin safe" tuna labels, thereby setting aside the findings of the Secretary of Commerce that "there is insufficient evidence that chase and encirclement by the tuna purse seine fishery 'is having a significant adverse impact' on the depleted dolphin stocks" in the Eastern Tropical Pacific (ETP). That finding would have permitted tuna labels to state "dolphin safe" for tuna caught in the ETP with purse seine nets. The Secretary must now complete congressionally mandated stress research studies on dolphins. —  The U.S. Department of State views the decision as endangering the International Dolphin Conservation Program. Citation: Brower v. Daley, No. C99-3892 THE (N.D.Cal. April 11, 2000); U.S. Department of State Press Statement (April 14, 2000).

Mexico specifies import taxes for products from U.S., Canada, and other countries. Mexico has published a Decree regarding import taxes for imported products originating in the U.S., Canada, Colombia, Venezuela, Costa Rica, Bolivia, Chile and Nicaragua. The tables list the ad-valorem tax for all products, and some have been assigned a specific tax set in U.S. dollars and cents. The effective date of the decree is January 1, 2000. Citation: Decreto por el que se establece la tasa aplicable para el 2000 del impuesto general de importacion para las mercancias originarias de America del Norte, Colombia, Venezuela, Costa Rica, Bolivia, Chile y Nicaragua (31 de diciembre de 1999).

EU modifies freeze of Yugoslav assets and investment. With Regulation 723/2000, the EU has modified its recent freeze of Yugoslav assets and its ban on investment. The purpose is to close loopholes but also reduce the negative impact on the EU. For example, the Regulation requires banks to provide information on Yugoslav assets, and exempts Kosovo from some of the sanctions. Citation: 2000 O.J. of the European Communities (L 86) 1, 7 April 2000.