PRAC MEMBER NEWS · 2008. 9. 18. · PRAC MEMBER NEWS Page 5 Page 5 Honolulu, Hawaii – Goodsill...

► BAKER BOTTS ASARCO Wins Liability Phase of Fraudulent Transfer Trial Against Grupo Mexico ► CLAYTON UTZ Advises Australian Worldwide Exploration (“AWE”) in Billion Dollar Merger with ARC Energy and Demerger of Buru Energy Ltd. ► GIDE LOYRETTE NOUEL Paris and Tunis counsel to Groupama in Privatisation of STAR (Societe Tunisienne d’Assurances et de Reassurances) ► HOGAN & HARTSON Successfully Defends Chinese Producers in Major U.S. Countervailing Duty and Antidumping Investigations of OTR Tires from China ► LOVELLS Milan Italian Capital Markets Team Assists ABN AMRO Bank N.V. and Royal Bank of Scotland in €380 Million Securitisation Transaction ►NAUTADUTILH Acts in IPO of Germany1 Acquisition Limited on Euronext Amsterdam by NYSE Euronext ► TOZZINIFREIRE Advises in US$390 Million Share Purchase Transaction ► WILMERHALE Wins Big for Targus Information Corporation

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►Davis Wright Adds to Business Transactions and Energy Practices ►Fraser Milner Adds to National Tax and International Trade Groups ►Gide Loyrette Launches London Graduate Recruitment Program ►Goodsill Welcomes New Associates ►Hogan & Hartson Partner Re-elected Regional President of Hispanic National Bar Association ►Lovells Enhances Asia Finance Team ►Luce Forward Announces new Action Sports Practice ►NautaDutilh Launches Landmark Benelux Restructuring And Insolvency Team ►Simpson Grierson Welcomes Back Former Partner ►Tilleke Relocates Bangkok Offices ►AUSTRALIA CLAYTON UTZ What Happens To A Franchising Agreement if the Franchising Code Wasn't Complied With ►CANADA FRASER MILNER CASGRAIN Recent Development in Canadian Trade Regulation Proposed Tariff Elimination and Sanctions Against Zimbabwe ►CHINA KING & WOOD - The Anti-Unfair Competition Law and “Packaging or Decoration Unique to Well-Known Products” ►NEW ZEALAND SIMPSON GRIERSON - Seven Deadly Sins Of Software Licensing ►UNITED STATES DAVIS WRIGHT Labor and Industries Clarifies Washington State Rules Regarding Pay for Commute Time in Employer's Vehicle ►UNITED STATES HOGAN & HARTSON Federal Government Takes Control of Fannie Mae and Freddie Mac ►UNITED STATES MORGAN LEWIS - Immigration Alert Visa Waiver Electronic System

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MEMBER NEWS P R A C M E M B E R G A T H E R I N G S

October 15, 2008 - Allende & Brea Hosted Reception IBA ‘08 Conference - Buenos Aires PRAC Delegates click here or visit http://www.prac.org/events.php October 19-22 PRAC Gathering Association of Corporate Counsel Annual Meeting Seattle PRAC Delegates contact A. Peter Parsons, Davis Wright Tremaine November 15-18, 2008 44th International PRAC Conference - Mumbai Hosted by Mulla & Mulla & Craigie Blunt & Caroe http://www.prac.org/events.php Registration Now Open

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September 2008 e-BULLETIN

MIAMI, August 28, 2008 Hogan & Hartson LLP partner Richard C. Lorenzo has been re-elected to serve as the President of Region VIII (Florida) of the Hispanic National Bar Association (HNBA). Lorenzo concentrates his practice on international, cross-border litigation and arbitration in the firm’s Miami office. The HNBA is an incorporated, nonprofit, national association representing the interest of more than 33,000 U.S. Hispanic attorneys, judges, law professors, legal professionals, legal assistants or paralegals, and law students in the United States. The mission of the HBNA is to improve the study, practice, and administration of justice for all by ensuring the meaningful par-ticipation of U.S. Hispanics in the legal profession.

For additional information visit www.hhlaw.com

H O G A N & H A R T S O N L L P P A R T N E R R E - E L E C T E D R E G I O N A L P R E S I D E N T O F H I S P A N I C N A T I O N A L B A R A S S O C I A T I O N


FOR IMMEDIATE RELEASE August 21, 2008

Haeryung Shin Joins Davis Wright Tremaine as Of Counsel

SEATTLE, August 21, 2008 – Davis Wright Tremaine LLP announced today that Haeryung A. Shin has joined the Seattle office as of counsel in its business transactions and energy practices. Shin has more than 11 years experience representing venture capital investors and emerging technology and growth companies, with particular focus in recent years on investors and companies in the clean technology and renewable energy industries.

“Haeryung brings a keen understanding of the legal issues facing clients in the clean technology and alternative energy industries,” said Joe Weinstein, chair of Davis Wright Tremaine's Business Transactions group. "Her industry expertise coupled with her strong corporate legal skills will bring great value to the services we provide our clients. We are excited to have her on board."

Prior to joining Davis Wright Tremaine, Shin was in private practice, where for four years she served as outside North American counsel to several European renewable energy venture funds handling portfolio investments in the United States and Canada. An East Coast native, Shin worked as an associate at two Boston law firms and also clerked for the U.S. District Court in Portland, Maine.

Shin earned her J.D. at Cornell Law School in Ithaca, N.Y., after receiving her B.A. in English Language and Literature, cum laude, at Yale University in New Haven, Conn.

About Davis Wright Tremaine LLP Davis Wright Tremaine LLP is a national business and litigation law firm with approximately 500 attorneys in nine offices: Seattle and Bellevue (Wash.), Portland (Ore.), Los Angeles, San Francisco, New York, Washington, D.C., Anchorage (Alaska) and Shanghai, China.

For additional information visit www.dwt.com

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D A V I S W R I G H T T R E M A I N E L L P A D D S T O B U S I N E S S T R A N S A C T I O N S A N D E N E R G Y P R A C T I C E S

Jaime Seidner joins FMC as Senior Customs Consultant

August 7 2008 Fraser Milner Casgrain LLP (FMC) is pleased to announce the addition of Jaime Seidner to the firm as Senior Customs Consultant with the National Tax and International Trade Groups.

Jaime joins FMC from a position as the National Practice Leader of the Canadian Customs consulting practice of a global freight forwarder. Prior to his role in the customs brokerage and freight forwarding industry, Jaime was with the customs and tax group of a "Big 4" accounting firm in both the US and Canada, where he led the customs consulting practice for the Northeast region of the US from the Boston office. Jaime also brings over 20 years of government and consulting experience to our firm, having worked in various government capacities including positions with Canada Customs where he worked as a senior commercial customs inspector, an import commodity specialist and a headquarters project officer on the Customs Accounting Team.

"The addition of Jaime to our team will allow FMC to continue to provide innovative, practical and timely advice and representation to our clients in all aspects of Canadian customs and international trade," says Neil Bass, Partner and National Sales and Commodity Tax Group Lead. Specializing in customs compliance planning and duty saving strategies, Jaime will also provide support to our clients on the Customs impact to matters concerning accounting, transfer pricing and taxation (both direct and indirect).

For FMC's international clients, Jaime also brings extensive knowledge of Canadian non-resident importer issues in relation to both the associated Customs and import (GST) issues. In addition to his vast experience in Canada, Jaime has worked on a wide range of customs projects in the US, Mexico, Latin America, Europe, Australia and Asia. Jaime has been involved in establishing Foreign Trade Zones in the US and has been an active member of both the American Association of Exporters and Importers and the National Association of Foreign Trade Zones. He frequently speaks and writes on customs issues, and has been recognized by the U.S. Department of Commerce for his support for Canada-US trade. For additional information visit www.fmc-law.com

F R A S E R M I L N E R C A S G R A I N A D D S T O N A T I O N A L T A X A N D I N T E R N A T I O N A L T R A D E G R O U P S


Gide Loyrette Nouel has launched its first graduate recruitment programme in the UK. The Firm expects to take on at least two graduates each year, starting in March 2009. Gide already has four trainees in London, all of whom were previously paralegals at the Firm. Gide’s 15-strong paralegal team plays an important part in its international capital markets practice and the Firm began offering training contracts to high performing paralegals in 2007. The London office also has three "stagiaires" (an internship programme for French law students) on secondment from Gide’s international offices. The launch of the graduate recruitment programme coincides with the recent qualification of Gide’s first UK trainee, Ricky Champion, who will join the Firm’s banking & finance practice. Gide’s London office has grown rapidly since it was launched in 2003, trebling in size to 57 fee earners in five years. It is now the second largest office in Gide’s 21 office global network; only the Paris head office is larger. Originally a niche finance practice f ocusing on capital markets, banking and tax, the Firm added a common law dispute resolution practice and a mining, oil & gas team during 2007. Worldwide Gide has over 700 lawyers drawn from 30 nationalities. All of the Firm’s offices outside France practise the law of the country where they are located as well as French law. Gide's London office advises on English, US and French law. Applications for Gide’s training contracts may be made online through the Firm’s London web page at www.gide.com. Trainees are not expected to speak French. Pierre Raoul-Duval, Gide’s senior partner based in Paris, said: “This is an important landmark for Gide and shows how far we have come since we opened in London in 2003. Gide has a unique ethos and our first choice is always to grow organically.” Colin Mercer, partner and training principal at Gide London said: “Our rapid growth and, particularly, the opening of our common law dispute resolution practice, meant this is the right time to start recruiting graduates. Despite market conditions we continue to be busy and we can promise trainees challenging and varied work in a world class legal environment.”

For additional information visit www.gide.com

G I D E L O Y R E T T E N O U E L L A U N C H E S L O N D O N G R A D U A T E R E C R U I T M E N T P R O G R A M M E



Honolulu, Hawaii – Goodsill Anderson Quinn & Stifel, LLP is pleased to announce that Shannon Sagum, Jessica Mickelsen, Go Kobayashi, and Brian Sheehy have joined the firm as associates. The attorneys will join various practice areas for the firm, which serves all aspects of civil law for domestic and international clients.

Sagum joins the firm’s Labor and Employment group, which serves the needs of employers of all sizes, from individual entrepreneurs to multinational corporations. She is experienced in the investigation of discrimination and harassment claims, dealing with governmental regulatory agencies, and all aspects of litigation. Sagum is a graduate of Santa Clara University School of Law, and received her Bachelor of Arts in business and public administration, with an emphasis in finance, at the University of Puget Sound. She practiced with a San Francisco-based litigation firm prior to returning home to Hawaii and joining the Goodsill firm.

Mickelsen joins the firm’s litigation group and focuses her practice in the area of commercial litigation, with an emphasis on antitrust law, corporate law, intellectual property law, and white collar crime. She is a cum laude graduate of American University’s Washington College of Law and received her Bachelor of Arts degree from the University of Michigan, with a joint major in political science and communication studies. She served as a judicial law clerk for the Honorable David A. Ezra, on the United States District Court, District of Hawai‘i, where she also assisted with published and unpublished opinions on the United States Court of Appeals for the Ninth Circuit. Mickelsen also worked at an intellectual property law firm in Washington, D.C.

Kobayashi focuses his practice in the areas of corporate, real estate and immigration law. He is a graduate of Tulane Law School and received his Bachelor of Arts in archaeology at Aoyama Gakuin University in Tokyo, Japan. He served as a judicial clerk for the Honorable Charles Jones at the Louisiana Court of Appeals, Fourth Circuit. Kobayashi was raised in Tokyo, Japan and he speaks, writes and reads Japanese fluently.

Sheehy joins the firm’s litigation group, and focuses his practice on business disputes, construction, personal injury and medical malpractice. A cum laude graduate of the Whittier Law School, he holds a master’s degree in mechanical engineering from Wayne State University and a bachelor’s degree in aerospace engineering from the University of Michigan Prior to law school, Sheehy worked as a dimensional management engineer for Boeing, Integrated Defense Systems where he worked on the Navy F/A-18E/F Super Hornet fighter aircraft program and the Air Force Delta IV rocket program. After law school he worked at Boeing as a patent attorney/engineer, while also working part-time at a small law firm in Long Beach, California. Sheehy brings a wealth of experience to the firm.

"We are delighted to welcome Shannon, Jessica ,Go and Brian to Goodsill. Each has a strong and diverse background that will add value to the services offered by the Goodsill firm,” said Gary Slovin, Goodsill’s managing partner. Goodsill Anderson Quinn & Stifel LLP traces its roots to 1878 and currently has more than 70 full-time attorneys.

Always keeping pace with client needs, Goodsill attorneys practice in all areas of civil law, providing personal, boutique-quality legal services with cutting-edge resources that can only be found at a large firm. For more information visit www.goodsill.com.

G O O D S I L L A N D E R S O N Q U I N N & S T I F E L L L P A D D S T H R E E A S S O C I A T E S


Leading Hong Kong and China banking partner Owen Chan joins Lovells Hong Kong as part of a continued focus on com-plex, high-end transactions for leading banking and financial institutions in the Greater China region Owen Chan joins partner Gary Hamp who relocated from Lovells' London office to head the Hong Kong banking team at the begin-ning of the year. The recruitment of Owen will complement the hire of corporate finance partner Fred Chang in Beijing from White & Case and will further enhance the practice's offering to the growing number of clients actively investing in the Chinese market. As International banks continue to grow their business in China and domestic banks increasingly invest offshore, combined exper-tise in structuring both domestic and international banking transactions is increasingly in demand. Recognised as a leading individ-ual in both Hong Kong and China by the main legal directories, Owen is uniquely placed to advise on international and China re-lated banking transactions. Previously a partner at Stephenson Harwood & Lo, Owen, who is a native mandarin speaker, advises a range of financial institu-tions and investment intermediaries on structured finance involving lending and security issues in Hong Kong and China, including acquisition finance and PRC banking regulatory advice, to financial institutions and investment intermediaries with interests in the mainland. David Harris, Lovells' Managing Partner, said: "Our Asian practice had a particularly strong 2007/08 financial year, recording a 27% increase in revenue. The Asia finance prac-tice played a key role in that success and that momentum has been continuing this year despite market conditions. With the recruit-ment of Owen Chan and Gary's relocation we have an experienced and well regarded finance team in Hong Kong well versed in executing complex transactions in an increasingly sophisticated financial market." Commenting today, Owen Chan said: "Lovells has an outstanding reputation for banking and finance in the region and internationally. The structure and focus of the team in Hong Kong and China is highly complementary to my own practice. I'm delighted to be able to join Gary in Hong Kong and look forward to working closely with the team across the region. " Commenting on the hire, Asia regional managing partner Crispin Rapinet said: "The addition of Owen to the team re-inforces our status as one of the leading banking and finance practices in the region and posi-tions us to service our clients on both inbound and outbound China related transactions. Owen's detailed understanding of PRC issues, laws and regulations will prove invaluable to our international clients, whilst we expect the work for Chinese financial institu-tions to increase as they continue to expand overseas."

For additional information visit www.lovells.com

Notes for editor About Lovells With over 3,000 people operating from 26 offices in Asia, Europe, the Middle East and the United States, Lovells is one of the world's leading interna-tional law firms. We advise many of the world's largest corporations, financial institutions and governmental organisations. We regularly act on complex, multi jurisdic-tional transactions as well as some of the most high-profile commercial disputes. Lovells (the "firm") is an international legal practice comprising Lovells LLP and its affiliated businesses. Lovells LLP is a limited liability partnership registered in England and Wales with registered number OC323639. Registered office and principal place of business: Atlantic House, Holborn Viaduct, London EC1A 2FG. The word "partner" is used to refer to a member of Lovells LLP, or an employee or consultant with equivalent standing and qualifications, and to a partner, member, employee or consultant in any of its affiliated businesses who has equivalent standing.

L O V E L L S E N H A N C E S A S I A F I N A N C E T E A M


New practice is dedicated to providing legal services to both established and emerging companies in the action sports industry.

Luce Forward announced the formalization of a new action sports practice area committed to providing comprehensive legal services to action sports businesses worldwide. The Luce Forward attorneys in this new practice area participate in action sports themselves and are currently working with a variety of clients in the industry. The practice draws on the expertise of attorneys from multiple specialties including business, Intellectual property, financing, tax and estate planning, labor/employment, product liability, general litigation and real estate. “We believe action sports companies can really benefit by working with attorneys who focus specifically on the industry and understand the unique issues associated with that type of business,” said Robert J. Bell, Luce Forward’s Managing Partner. “We have attorneys who not only understand the varied legal issues that confront action sport business, but they also have genuine enthusiasm for action sports. Many start their day at the break of dawn surfing, and during the winter, you'll find them skiing or riding all over California and the West Coast.” He continued, “Our action sports attorneys practice in the industry with both transactional and litigation matters, and they have experience founding, advising and operating start-up companies. The passion of our lawyers for these sports and their industry-specific experience are invaluable assets when advising action sports companies.” Luce Forward combines its interest and knowledge of the action sports industry with more than 135 years of legal experience, offering solutions to the legal complexities associated with starting and running an action sports-based business. With almost 200 attorneys practicing in its Southern California offices, the firm has a significant presence in the business and legal community in the heart of the action sports world.

Cordon Baesel, a long-time Luce Forward lawyer who has surfed for more than 30 years and started his own snowboard company in the ‘90s agreed, “The surf, snow and skate industries have matured dramatically in the last 20 years. Applying our legal expertise to assist these businesses provides us with great professional and personal satisfaction.” Luce Forward’s legal services will assist emerging and well-known surf, skate, snow and moto businesses, as well as other types of action sports companies, during every stage of the business cycle. With established attorneys from various practice groups, the firm has invaluable experience in starting businesses, developing products and identity, growing clientele, evaluating company growth, and planning for the future. The services provided by Luce Forward will be tailored to the individual needs of each company. For additional information visit www.luce.com

L U C E F O R W A R D A N N O U N C E S N E W A C T I O N S P O R T S P R A C T I C E

September 02, 2008 Leading Benelux law firm NautaDutilh has today announced the launch of their Benelux Restructuring &Insolvency Team. The team will be led by Robert van Galen, practice group manager of the firm’s ‘corporate department and a leading international insolvency and restructuring specialist. NautaDutilh is the first Dutch law firm to announce the formation of a dedicated

Benelux restructuring and insolvency capability in response to the anticipated effects of the credit crunch, to enable the firm to assist clients facing complex and unexpected situations. The team, consisting of more than 20 lawyers, will combine NautaDutilh core strengths in banking & finance, insolvency and litigation alongside their significant expertise in major international financing transactions as well as complex bankruptcies cases. NautaDutilh has an excellent track record in this field and has, over the past 25 years, been involved in almost all complex international bankruptcy cases and many major refinancing transactions, including Laurus, AveBe,GTS, De Koop-Groep, UPC, as well as bankruptcy cases such as Ceteco, KPNQwest, Fokker, Van der Hoop Bankiers and Yukos Group’s preservation of its international assets from seizure by the Russian trustee. Commenting on the launch of the Benelux Restructuring & I nsolvency team, lead partner Robert van Galen said: “In difficult times it is important to identify problems and take well prepared measures in a timely manner. Restructurings and bankruptcies ask for sound legal expertise and where necessary unconventional, creative solutions. We offer just that with the unique combination of authoritative specialists from our banking & finance, insolvency and litigation groups.” For additional information visit www.nautadutilh.com

N A U T A D U T I L H L A U N C H E S L A N D M A R K B E N E L U X R E S T R U C T U R I N G A N D I N S O L V E N C Y T E A M


Simpson Grierson is delighted to welcome back Mark Verbiest as a part-time Consultant. Mark was the senior commercial partner in Wellington, when he left to join Telecom New Zealand Limited in late 2000.

At Telecom, Mark was Group General Counsel and Executive responsible for Telecom's international and cable divisions as well as a member of Telecom's Senior Executive Team.

Mark is a highly regarded commercial lawyer and business leader and sits on a number of boards of directors.

Simpson Grierson is proud to have him back at the firm, where he will assist on strategic issues and business development initiatives and work with the corporate advisory partners on major transactions.

Mark will be based in the Wellington office from early October. For additional information visit www.simpsongrierson.com

S I M P S O N G R I E R S O N W E L C O M E S B A C K F O R M E R P A R T N E R

T I L L E K E & G I B B I N S I N T E R N A T I O N A L L T D B A N G K O K O F F I C E R E L O C A T E S


Tilleke & Gibbins International Ltd.

announces the relocation of its Bangkok office to:

Supalai Grand Tower, 26th Floor 1011 Rama 3 Road

Chongnonsi, Yannawa Bangkok 10120, Thailand

Tel: +66 2653 5555 Fax: +66 2653 5678

E-mail: [email protected]

with effect on September 8, 2008 (note new address, phone and fax)

Sydney, 28 August 2008: Clayton Utz has advised Australian Worldwide Exploration (AWE) on its successful merger with ARC Energy and the demerger of Buru Energy Ltd.

The $2.5 billion merger was implemented by scheme of arrangement, with ARC Energy's Western Australian Canning Basin assets spun-off into a new company called Buru Energy.

Energy and resources partner Susan O'Rourke led the team advising AWE on the merger and was supported by a strong cross-specialty team which included partners Wally McDonald, Mark Paganin, John Oakes, Luke Buchanan and Mark Williamson.

Ms O'Rourke said the Clayton Utz team worked closely with AWE to structure the acquisition, undertake due diligence, negotiate the scheme documentation, obtain regulatory and court approvals and implement the merger.

"The deal was unusual in that it involved the creation of a demerged spin-off vehicle for the Canning Basin exploration assets. This feature is unusual as an adjunct to a scheme," she said.

"The merger will make AWE the leading mid-tier oil and gas company listed on the ASX."

The deal reached financial close on 25 August 2008.

For additional information visit www.claytonutz.com


HOUSTON, September 2, 2008 -- On August 30, 2008, U.S. District Judge Andrew Hanen of Brownsville, Texas published an opinion holding that Americas Mining Corporation (a Grupo Mexico subsidiary) had perpetrated a fraudulent transfer to itself of ASARCO’s controlling interest in Southern Peru Copper Corporation by intending to hinder and delay creditors in making the transfer. In his opinion, Hanen also stated that in making the transfer Americas Mining had aided and abetted and conspired in the breach of the fiduciary duties of ASARCO’s directors owed to ASARCO’s creditors. Hanen requested briefing on an appropriate remedy by September 15 and promised an expeditious ruling. "We are delighted with Judge Hanen's opinion,” said Irv Terrell, a partner with Baker Botts and lead outside counsel representing ASARCO. “We now have the opportunity to recover substantial value for Asarco and its creditors." ASARCO is seeking disgorgement of the Southern Peru interest and the dividends paid on that interest, totaling more than $8 billion. Grupo Mexico and Americas Mining contend that nothing is owed because all of ASARCO’s creditors will be paid in full under a Grupo Mexico plan of reorganization yet to be decided by the bankruptcy court. ASARCO says that Grupo’s plan should not be confirmed by the Corpus Christi bankruptcy judge, that Grupo’s characterization of its plan is misleading, and ASARCO’s plan should instead be confirmed. About Baker Botts L.L.P. Baker Botts L.L.P., dating from 1840, is a leading international law firm with offices in Austin, Beijing, Dallas, Dubai, Hong Kong, Houston, London, Moscow, New York, Palo Alto, California, Riyadh and Washington. With approximately 800 lawyers, Baker Botts provides a full range of legal services to international, national and regional clients. For more information, please visit www.bakerbotts.com.

B A K E R B O T T S A S A R C O W I N S L I A B I L I T Y P H A S E O F F R A U D U L E N T T R A N S F E R T R I A L A G A I N S T G R U P O M E X I C O

C L A Y T O N U T Z A D V I S E S A U S T R A L I A N W O R L D W I D E E X P L O R A T I O N ( A W E ) I N B I L L I O N D O L L A R M E R G E R W I T H A R C E N E R G Y A N D D E M E R G E R O F B U R U E N E R G Y L T D .


NautaDutilh has advised Deutsche Bank AG in connection with the issuance by Germany1 Acquisition Limited (''Germany1'') of 25,000,000 units. The units were admitted today to listing and trading on Euronext Amsterdam by NYSE Euronext, the regulated market of Euronext Amsterdam N.V (''Euronext Amsterdam'') for a price of EUR 10.00 each, raising EUR 250,000,000. Germany1 is the third Special Purpose Acquisition Company (SPAC) which is admitted to listing and trading on Euronext Amsterdam. NautaDutilh also acted in the IPOs of the first two SPACs on Euronext Amsterdam: Liberty International Acquisition Company and Pan-European Hotel Acquisition Company. Germany1 is expected to be the largest SPAC IPO since February 2008 despite one of the most challenging market backdrops experienced in recent years and the novelty of the SPAC structure in Europe. The marketing effort of Germany1 primarily targeted the emerging European investor market for SPACs. As the first European SPAC to focus specifically on German-speaking countries, Germany1 intends to acquire one or more operating businesses with principal operations in Germany, Austria or Switzerland. The deal team was lead by Banking & Finance partner Petra Zijp. She was assisted by Teun Struycken, Antonia Netiv, Jochem Polderman, Chris Warner, Lonneke van Moorselaar and Timo Balster.

For additional information visit www.nautadutilh.com

N A U T A D U T I L H A D V I S E S D E U T S C H E B A N K A G I N I P 0 O F G E R M A N Y 1 A C Q U I S I T I O N L I M I T E D O N E U R O N E X T A M S T E R D A M B Y N Y S E E U R O N E X T

Gide Loyrette Nouel Paris and Tunis advised Groupama in connection with the privatisation of STAR (Société Tunisienne d'Assurances et de Réassurances). Following a competitive international tendering procedure, Groupama was selected as the preliminary candidate on 15 July 2008 by the Tunisian Government to become its strategic partner in a reserved increase in the share capital of STAR, following which Groupama will own a 35% stake in the company’s capital and voting rights. STAR, which is currently 60% state-owned (directly or through other equity interests), is listed on the Tunisian stock exchange. STAR is the Tunisian insurance market leader, occupying first position in damage insurance with a 29% market share and ninth position in the life assurance with a 5% market share. In 2007, the company realised a turnover of 121.3 million euros and a net income of 3.4 million euros. It employs a staff of 660 people. Legal counsel to Groupama: Gide Loyrette Nouel (Christophe Eck, Jean-Gabriel Flandrois and Edgard Nguyen in Paris, with the assistance of Jean-Marie Guéguen on insurance law issues, and Imed Tanazefti and Badis Jedidi in Tunis). For additional information visit www.gide.com

G I D E L O Y R E T T E N O U E L P A R I S A N D T U N I S C O U N S E L T O G R O U P A M A I N P R I V A T I Z A T I O N O F S T A R ( S O C I E T E T U N I S I E N N E D ’ A S S U R A N C E S E T D E R E A S S U R A N C E S )

WASHINGTON, D.C., August 26, 2008 - Hogan & Hartson LLP has defended a leading Chinese tire manufacturer and exporter and the government of the People’s Republic of China before the U.S. Department of Commerce in the recently completed U.S. countervailing duty and antidumping investigations of off-the-road tires from China. Involving an estimated $360 million in U.S. imports in 2007, the off-the-road tires investigations represented some of the largest and most complex U.S. antidumping and countervailing duty cases ever brought against Chinese exporters. Hogan & Hartson’s private sector client secured the lowest countervailing duty margin (2.45 percent), and the second lowest antidumping margin (5.25 percent) of any of the participating Chinese companies. The countervailing duty investigation presented particularly complex factual and legal challenges. The government of China and Hogan & Hartson’s private sector client have maintained throughout the proceeding that the U.S. Department of Commerce lacks legal authority to conduct a countervailing duty investigation of exporters in a country designated by the United States as a “non-market economy” (NME). Moreover, the application of countervailing duty law in the particular economic circumstances of China presented novel factual and legal questions concerning the scope of programs subject to investigation and the measurement of benefit in the context of an NME country. Likewise, the antidumping investigation presented a number of uniquely complex factual and legal challenges concerning the scope of the investigation and the correct valuation of inputs. Partners Mark S. McConnell, T. Clark Weymouth, Craig A. Lewis, and H. Deen Kaplan from the Washington, D.C. office led this matter, along with Washington, D.C. associates Jonathan Stoel, Annalise Nelson, and Brian Janovitz, and Beijing associate Fay Zhou.

For additional information visit www.hhlaw.com


H O G A N & H A R T S O N L L P S U C C E S S F U L L Y D E F E N D S C H I N E S E P R O D U C E R S I N M A J O R U . S . C O U N T E R V A I L I N G D U T Y A N D A N T I D U M P I N G I N V E S T I G A T I O N S O F O T R T I R E S F R O M C H I N A

44th International PRAC Conference Hosted by Mulla & Mulla & Craigie Blunt & Caroe

Open to all PRAC Member Firms Formal Registration Now Available

online at www.prac.org

Lovells' Milan based Italian Capital Markets team has assisted ABN AMRO Bank N.V. and the Royal Bank of Scotland plc, the arranger and the joint lead managers respectively, in a securitisation transaction of leasing receivables worth approximately Euro 380 million. The Lovells team was led by Marco Lantelme. Assistance on tax law issues was provided by Fulvia Astolfi's team in Rome. LaSalle Global Trust Services, was the representative of the noteholders and trustee. The transaction is one of the few securitisation transactions of leasing receivables in Italy in which the final instalment has also been transferred. The notes, issued in three separate series A1, A2 and J, were partly placed with institutional investors. One of the series was guaranteed by the European Investment Fund or EIF, assisted by the law firm Gianni, Origoni, Grippo & Partners. The transaction relates to receivables originated from Commercio e Finanza, part of the Cassa di Risparmio di Ferrara group. The first two series of notes were listed and rated with a "Triple A" rating by Moody's and Fitch.

For additional information visit www.lovells.com

Notes for editor About Lovells With over 3,000 people operating from 26 offices in Asia, Europe and the United States, Lovells is one of the world's leading international law firms. We advise many of the world's largest corporations, financial institutions and governmental organisations. We regularly act on complex, multi jurisdictional transactions as well as some of the most high profile commercial disputes. Lovells (the "firm") is an international legal practice comprising Lovells LLP and its affiliated businesses. Lovells LLP is a limited liability partnership registered in England and Wales with registered number OC323639. Registered office and principal place of business: Atlantic House, Holborn Viaduct, London EC1A 2FG. The word "partner" is used to refer to a member of Lovells LLP, or an employee or consultant with equivalent standing and qualifications, and to a partner, member, em-ployee or consultant in any of its affiliated businesses who has equivalent standing.


L O V E L L S M I L A N I T A L I A N C A P I T A L M A R K E T S T E A M A S S I S T S A B N A M R O B A N K N . V . A N D R O Y A L B A N K O F S C O T L A N D I N € 3 8 0 M I L L I O N S E C U R I T I Z A T I O N T R A N S A C T I O N

September 5, 2008

FEDERAL CIRCUIT OVERTURNS $49 MILLION VERDICT AGAINST CALL COMPANY

Late last month WilmerHale lawyers got a big win for Targus Information Corporation in a patent suit involving technology used to route calls to toll-free numbers. The US Court of Appeals for the Federal Circuit vacated the $49 million damages award stemming from a patent suit filed by 800 Adept. The Federal Circuit reversed the district court’s claim construction and rulings on other issues. WilmerHale co-managing partner Bill Lee argued the appeal. Also on the team were litigation partners Lisa Pirozzolo and Paul Wolfson and associate Megan Barbero. 800 Adept filed the suit in 2002 in the US District Court for the Middle District of Florida. WilmerHale began representing Targus after a Florida jury found that Targus willfully infringed 800 Adept’s patents and engaged in tortious interference by asserting its own patents against the plaintiff's customers. After the six week trial, the District Court issued a permanent injunction and awarded enhanced damages resulting in a judgment against Targus of $49 million. But the Federal Circuit Court disagreed. The Court found that the District Court erred and reversed the judgment of infringement as well as the judgment of tortious interference. As a result, the Federal Circuit vacated the injunction and the entire $49 million damages award. "Under the correct claim construction, no reasonable jury could find that Targus infringes the asserted claims of Adept's patents," Senior Circuit Judge Plager wrote for the panel, which included Judges Gajarsa and Dyk. "In light of these determinations, we vacate the trial court's damages award, the permanent injunction, and the judgment with respect to willfulness, enhanced damages and attorney fees."

For additional information visit www.wilmerhale.com


SEOUL 2007

October 20-24

PRAC Conference Materials Available online at www.prac.org

PRAC e-Bulletin is published monthly.

Member Firms are encouraged to contribute articles for

future consideration. Send to [email protected].

Deadline is 10th of each month.

W I L M E R H A L E W I N S B I G F O R T A R G U S I N F O R M A T I O N C O R P O R A T I O N

alert 27 August 2008

The Franchising Code of Conduct sets out rules governing the franchising relat ionship - but what happens i f they are not fol lowed? The High Court today answered that question in Master Education Services Pty Limited v Ketchel l [2008] HCA 38: fai lure to comply with the Code does not automatical ly mean the agreement is void and unenforceable.

The franchising agreement, disclosure and the written statement

Under clause 11 of the Code, a franchisor must not enter into a franchise agreement or receive non-refundable money under a franchise agreement unless the franchisor has received a wri t ten statement from a prospect ive franchisee. The statement is that the prospect ive franchisee has received, read and had a reasonable opportunity to understand the disclosure document and the Code.

This Code is an industry code which has the force of law, and corporations must not, in trade or commerce, contravene applicable industry codes (section 51AD of the Trade Practices Act 1974).

Master Education Services Pty Limited provided a disclosure document and a copy of the Code to Ms Jean Ketchel l , but did not get the writ ten statement from her. There was no suggestion that Ms Ketchel l had not read or understood the agreement. When she was sued for unpaid monthly fees, she argued that the fai lure to get a wri t ten statement meant the franchising agreement was void and therefore she didn't owe those monthly fees.

This argument succeeded in the NSW Court of Appeal, a result which left f ranchisors in an uncertain posi t ion.

Why a breach of the Code doesn't automatically make a franchising agreement void

Neither the Act nor the Code state that this fai lure makes the franchising agreement i l legal, so the High Court looked at the context in which they were made and their underlying purpose. I t held that the non-compliance did not automatical ly make a contract void for three reasons:

Both the Act and the Code are intended to regulate the conduct of persons in the franchising industry in order to improve business practices, to provide some protection to franchisees proposing to enter into franchise agreements and to decrease l i t igat ion. These aims don't require that a contract made by a non-complying franchisor be struck down automatical ly. The Act sets out a whole range of f lexible remedies that can be used to deal with non-compliance, such as preventing entry into a franchise agreement, varying the terms of an agreement entered into in breach of the Code, or even terminating i t . Final ly, i f the contract was void, this could operate unfair ly and harshly - i t would al low a non-complying franchisor to breach the Code and then walk away from its obl igations, while putt ing franchisees in breach of their obl igat ions to third part ies.

Lessons for franchisors

For franchisors, this is a good decision: their franchising agreements wi l l not automatical ly be void simply because of one breach of their obl igations under the Code. I t al lows both part ies to continue in their arrangements with some degree of certainty and the courts to deal with any breach in a f lexible fashion.

Of course, this doesn't mean franchisors can be casual in complying with the Code. Sett ing up and

What happens to a franchising agreement if the Franchising Code wasn't complied with?

Page 1 of 2

maintaining a good compliance program internal ly wi l l mean that these sorts of questions wi l l arise infrequently, i f at al l , saving you t ime and money.

Disc la imer Clayton Utz News A ler t is in tended to prov ide commentary and general in format ion. I t shou ld not be re l ied upon as legal adv ice. Formal lega l adv ice shou ld be sought in par t icu lar t ransact ions or on mat ters of in terest ar is ing f rom th is bul le t in . Persons l is ted may not be admit ted in a l l s ta tes.

For more information please contact:

Name: Kate Marshall - Partner MelbourneTel: +61 3 9286 6937Fax: +61 3 9629 8488Email: [email protected]

Name: Richard Hoad - Senior Associate Melbourne

Tel: +61 3 9286 6936Fax: +61 3 9629 8488Email: [email protected]

Name: Anna Sharpe - Partner BrisbaneTel: +61 7 3292 7303, Mob: +61 409 809

963Fax: +61 7 3221 9669Email: [email protected]

Name: Bruce Lloyd - Partner SydneyTel: +61 2 9353 4219Fax: +61 2 8220 6700Email: [email protected]

Page 2 of 2

Recent Developments in Canadian Trade Regulation: Proposed Tariff Elimination and Sanctions against Zimbabwe

Over the course of the past week, there have been two important developments in Canadian trade regulation, summarized below, of potential relevance to any business with substantial imports andexports into and out of Canada, as well as any business with production in Canada of a broad range of products.

Proposed Tariff Elimination

On August 30, 2008, the Government of Canada published a notice outlining a proposal to eliminate Most-Favoured Nation (MFN) tariff rates on a broad list of products and components thereof which fall under Chapters 84 and 85 of the Customs Tariff. A copy of the Government of Canada notice which includes the listing of Harmonized Codes proposed for MFN tariff elimination can be found in the Canada Gazette at pages 2524 to 2529. As is always the case when tariffs are up for reduction or removal, and with the caveat that thefederal election introduces extra uncertainty as to both the likelihood and timing of implementation, the Government will base its final decision on the submissions received, both for and against. As such, any business engaged in the import or domestic production of a listed product or component thereof may wish to consider making a submission in favour of, or against, the proposed MFN tariff elimination. Please note that the deadline for submission isSeptember 30, 2008.

Sanctions against Zimbabwe

On September 4, 2008, the Government of Canada implemented certain targeted economic sanctions against Zimbabwe. Key elements of the announced sanctions include:

A ban on the export of arms and related material to Zimbabwe or to any person in Zimbabwe; A prohibition on the transport of arms and related material to Zimbabwe aboard a Canadian vessel or aircraft; A prohibition on the provision of technical or financial assistance or services related to arms and related material (including the provision, transfer or communication of technical data) to Zimbabwe or any person in Zimbabwe; A freeze on the assets of listed Zimbabwean persons and entities; and A prohibition on Zimbabwean aircraft flying over or landing in Canada.

The sanctions have been implemented pursuant to Canada’s Special Economic Measures Act which imposes fines and/or imprisonment for non-compliance.

Page 1 of 2

Any business engaged in trade with Zimbabwe or otherwise providing support (technical or financial) should inform themselves of the precise scope of these sanctions and ensure that theiractivity is not in breach of the sanctions.

Contact Us

Should you have any questions or require additional information with respect to either of the proposed tariff elimination and the submission process, or the sanctions against Zimbabwe, please do not hesitate to contact Christopher Kent in our Ottawa office at 613-783-9647 or by e-mail at [email protected].

For a complete description of our international trade capabilities, please visit our website www.fmc-law.com

Page 2 of 2

July 2008

Page

© 2008 King & Wood www.kingandwood.com

1

The Anti-Unfair Competition Law and “Packaging or Decoration Unique to Well-known Products”

By Lu Qing*

On March 24, 2008, the Supreme People’s Court issued its final judgment in the appeal case Ferrero S.p.A. v. Zhangjiagang Montresor Foodstuff Co.,Ltd. holding that the manufacture and distribution of chocolate products by Montresor using packaging and decoration that was similar to that used by FERRERO ROCHER chocolates of Ferrero S.p.A., Italy, had constituted an act of unfair competition1. The judgment provides important guidelines on how to apply Article 5, Item 2 of the PRC Anti-Unfair Competition Law to “unauthorized use of a name, packaging or decoration (trade dress) unique to well-known products”.2 Ferrero S.p.A. started selling FERRERO ROCHER chocolates (“FERRERO ROCHER Chocolates”) in China in 1984. The Chocolates were individually packaged in a unique ball shape wrapped in gold colored paper. Initially, the Chocolates were sold mainly in duty free shops and airport stores. In 1986, Ferrero S.p.A. obtained the trademark registration to “FERRERO ROCHER” and, in 1993, started extensive sales and promotion in major Chinese cities. In June 2000, the trademark “FERRERO ROCHER” was selected as one of the nation’s protected trademarks by the State Administration for Industry and Commerce. FERRERO ROCHER Chocolates are world-renowned premium chocolate products with mouth-watering sensations that have brought exceptional enjoyment to consumers worldwide. The special packaging is unique to the FERRERO ROCHER Chocolates. See picture 1 for a sample of FERRERO ROCHER Chocolates packaging and Picture 2 for a sample of the defendant, Montresor, packaging. Picture 1: FERRERO ROCHER Chocolates packaging

1 PRC Supreme People’s Court Civil Judgment (2006) Minsantizi No.3 2 People’s Republic of China Anti-Unfair Competition Law, implemented on 1 December 1993。Article 5, Item 2 indicates that any

unauthorized use of a name, packaging or decoration unique to well-known products and of a name, packaging or decoration similar

to that of well-known products that may cause purchasers to mistake the products for such well-known products constitute unfair

competition。

July 2008

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Picture 2: Montresor packaging

The defendant, Montresor, has been producing and selling chocolate products using almost identical packaging and decoration as that of FERRERO ROCHER Chocolates from as early as 1990. The defendant also preemptively registered Ferrero S.p.A.’s corresponding Chinese trademark “金莎” (“JINSHA”) in China in April 1991 and used the mark on Montresor products since registration (“JINSHA Chocolates”). JINSHA Chocolates and FERRERO ROCHER Chocolates are different in quality, taste and price. However, until the court’s recent final judgment, JINSHA Chocolates had co-existed with FERRERO ROCHER Chocolates in China for more than 16 years. In fact, JINSHA Chocolates had won several awards, become the most recommended top brand chocolate product and the top selling chocolate product in China through extensive advertisement and promotion. In China, JINSHA Chocolates became more well-known than FERRERO ROCHER. In 2004, Ferrero S.p.A. brought a lawsuit to Tianjin No. 2 Intermediate People’s Court against Montresor for unfair competition based on Article 5, Item 2 of the PRC Anti-Unfair Competition Law. However, the Court held that the act of unfair competition could not be established since the methods of distribution by Ferrero S.p.A. in China in past years determined that FERRERO ROCHER Chocolates were not “well-known” in 1990. The Court for the Second Instance, Tianjin Higher People’s Court, however, overruled the decision. Montresor thus appealed to the Supreme People’s Court which upheld the decision of the Court for the Second Instance. In its judgment, the Court provided further explanation on the principles applied in the interpretation of relevant laws.

July 2008

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Using names, packaging or decorations similar or identical to those of others for identical goods is another type of infringement in addition to trademark infringement. The consequence of such infringement is similar to trademark infringement, i.e. it may mislead and cause confusion among consumers, affect social and economic order, and infringe upon the legitimate rights of the original right owners. Trademark infringement is regulated under the China Trademark Law, which only protects registered trademarks, while the act of using identical or similar packaging or decoration but a different trademark falls into the category of unfair competition under Article 5, Item 2 of the Anti-Unfair Competition Law. Three elements must be satisfied under Article 5, Item 2 of the Anti-Unfair Competition Law:

(a) the infringed commodity must be a well-known product; (b) the name, packaging and/or decoration of the well-known product must be unique and not a commonly

used name, packaging and/or decoration of the same products; (c) confusion will occur should the two products be sold in the market.

Unlike the Chinese Trademark Law which provides detailed criteria for trademark infringement and how to identify similar trademarks, the Anti-Unfair Competition Law does not provide further explanations on how to apply the three elements in unfair competition cases. The lack of specific regulations results in some uncertainties in the action of enforcement filed under Article 5 of Anti-unfair Competition Law, especially in determining whether a certain commodity is a well-known product. In earlier years, the State Administration for Industry and Commerce (“SAIC”) had issued an administrative interpretation for the definition of unauthorized use of “specific names, packaging and decorations peculiar to well-known commodities” and measures on handling related unfair competition conduct.3 According to the interpretation of the Certain Regulations on Prohibiting Unfair Competition Activity Concerning Imitating Specific Names, Packaging or Decoration of Well-known Commodities, “well-known Commodity” under Article 5, Item 2 of the Anti-unfair Competition Law refers to “a commodity enjoying a certain reputation in the market and being well known among the relevant public”; “peculiar to well-known commodity” refers to “the name, packaging and decoration of a commodity not commonly used by similar commodities and having remarkable distinction.”4. The interpretation further states that

“In case the name, packaging or decoration of a commodity is used by others in the same or a similar way without authorization, and is enough to cause mis-identification of the buyers, this commodity can be recognized as a well-known commodity. The name, packaging and decoration specially owned by a commodity should be determined according to the principle of first use.”5

According to the above interpretation, we note that the criteria set by SAIC in deciding “the specific name, packaging and decoration peculiar to well-known commodities” are comparably low. The interpretation also failed to specify the scope and methods of “prior use”. 3 See Certain Regulations on Prohibiting Unfair Competition Activity Concerning Imitating Specific Names, Packaging or Decoration of Well-known Commodities Decree 33, the State Administration of Industry and Commerce, 3 December, 2003. 4 Ibid. Article 3 5 Ibid. Article 4

July 2008

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In January 2007, while the Ferrero S.p.A. case was still pending at the Supreme Court, the Court issued a judicial interpretation on the application of Article 5, Item 2 of the Anti-unfair Competition Law.6 Accordingly, the Court applied the principle provided in the judicial interpretation in its judgment for this case. The Court held that the “well-known commodity” must have obtained a certain market reputation in China and be well-known among the relevant members of the public. When determining whether a commodity is well-known, the people’s court shall consider factors such as sales period, sales region, sales amount and sales target, and duration, extent and geographic region of promotional activity undertaken, as well as any evidence that the commodity has been recognized as a well-known commodity by the relevant authorities7. In this case, three levels of courts had different interpretations to the concept of “well-known”. The trial court required that the commodity enjoy a high reputation throughout all of China; the appeals court held that a product can be well-known if it is sold in a specific market and known by the relevant public. The appeals court also held that the assessment of the well-known status of a commodity should be based on the overall situations of the products on the markets both in China and abroad, and “well-known” should not be interpreted as only referring to the commodities famous inside China’s territory. The different interpretations of “well-known commodities” resulted in the contrary judgments. In this respect, the Supreme Court ruled that “for commodities already well-known internationally, the protection afforded by the Chinese laws to the specific names, packaging and decorations of such commodities shall still be based on the recognition by the relevant public within the territory of China. The claimed well-known status for commodities or services usually derives from engaging in manufacturing, distribution and other commercial activities in China…. The fact that it is already well-known aboard may also be considered.” Although the three levels of courts have different interpretations of “well-known status”, they have one thing in common, i.e. all three Courts required that the commodity must “enjoy a high reputation” which is different from the administrative interpretation of SAIC. The outcome of the Supreme Court’s final judgment indicates that the Supreme Court, when deciding upon the “well-known” status of FERRERO ROCHER Chocolates, considered not only the sales of the Chocolates in China before the 1990s, but also the fact that the Chocolates have been well-known for a long period of time to date as well as the fact that the Chocolates are well-known worldwide. Respectively, the Tianjin Higher People’s Court, when considering the fact that JINSHA Chocolates had also been sold for a long period of time and enjoyed a high reputation, brought up an opinion that

“commercial activities should be conducted based on the principle of honesty and commercial ethics. A well-known commodity should be the result of honest commercial operation and the law will not allow using an outcome of commercial activities obtained through unfair competition act as the basis on deciding if related

6The Supreme People’s Court Interpretation on Several Issues concerning the Application of the Laws in Civil Trials of Unfair

Competition Cases (Fashi [2007] No. 2) effective as of 1 February 2007. 7 Ibid. Article 1

July 2008

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product is well-known. Accordingly, the result of an unfair competition act will be maintained if the Court rules that Montresor’s act does not constitute infringement based on the grounds that JINSHA chocolates enjoying higher reputation than FERRERO ROCHER in China.”

Obviously, the Tianjin Higher People’s Court made its decision based on the principle of protecting the interest of the original right owner. Although the Supreme Court did not discuss this issue in its judgment, from the outcome of the judgment, it is obvious that the Supreme Court supported this opinion. The author believes that this opinion of the Tianjin Higher Court is of great significance to intellectual property right owners. As to how to determine “identical or similar to the specific name, packaging and decoration peculiar to the well-known products”, the judicial interpretation explicitly points out that the principles and criteria on judging identical and similar trademarks can serve as a reference. Article 9, Item 2 of The Interpretations of the Supreme People’s Court Concerning the Application of Laws in the Trial of Cases of Civil Disputes Arising from Trademarks8 provides that “similar trademark” refers to when

“the trademark charged with infringement and the registered trademark of the plaintiff are similar in the font style, pronunciation, meaning of the words, or in the composition and color of the pictures, or in the overall structure of all the elements combined, or in the cubic form or combination of colors so that the relevant general public may be confused about the origin of the commodity or believe that there exist certain connections between the origin and the commodity which is represented by the registered trademark of the plaintiff.”

Article 10 of the same Interpretations further provides that when deciding if two marks are similar, three aspects should be considered :

(a) “General attention of the relevant ordinary public” should be used as the judging standard; (b) The marks should be compared as a whole as well as on individual components that form the mark. The

comparison should be done when the two marks are separated from each other; (c) When determining whether the trademarks are similar, the distinctiveness and the well-known status of

the registered trademark should be considered. Similarly, in the Ferrero case, when comparing the packaging and decorations of the two products, the Supreme Court emphasized the uniqueness of the packaging and decoration of FERRERO ROCHER Chocolates and ruled that, since the common elements of the packaging and decoration of JINSHA Chocolates are visually and confusingly similar to the whole image of FERRERO ROCHER Chocolates, consumers are likely to be misled and confused with the origins of two products. Whether the use of a packaging or decoration will cause confusion and mislead the relevant pubic is another important element. In this respect, the judicial interpretations state that “acts that will cause confusion to the

8 The Interpretations of the Supreme People’s Court Concerning the Application of Laws in the Trial of Cases of Civil Disputes Arising from Trademarks , (Fashi [2002] No. 32), adopted on October 12, 2002, effective as of October 16, 2002.

July 2008

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relevant public and make them mistake the origin of the well-known commodity of others” refers to “acts that will make the relevant public mistake the origin of a commodity, which includes misrepresenting the relationship or association between business operators, such as suggesting licensing relationships or corporate or business affiliations with business operators of well-known commodities”. It will also be deemed as causing confusion if a commodity uses names, packaging or trade dress that create a visual impression that it is the same as, or basically no different from, that of a well-known commodity.9 In the Ferrero case, the Court explained that, as long as the packaging and decorations of the two products were visually similar, they will be deemed as likely to cause confusion and mislead consumers, even if the prices, qualities, tastes, target customers, company names and trademarks of the two commodities are different. Although China does not have a precedent system, the Supreme Court’s judgment on Ferrero case which further clarified issues raised in the Judicial Interpretation has provided important guidelines to handling similar cases in the future. Unauthorized use of identical or similar packaging and decorations that are peculiar to well-known commodities will create the same effect on the marketplace as those of trademark infringement. Both belong to the act of “free riding”. However, for the foreseeable future, the effectiveness of using Article 5, Item 2 of the Anti-Unfair Competition Law for “packaging or decorations peculiar to well-known commodities” will be much less than that of trademark infringement. The main reason for this is that the Anti-unfair Competition Law does not provide detailed explanations for the principles as provided in this Article. This lack of explanation resulted in different interpretations to the same provision. The judicial interpretations of the Supreme Court and its judgment made for Ferrero case have to a large extent clarified the concepts of “well-known commodity” and “misleading” and “cause confusion”. This can be referred to by the intellectual property right owners in enforcement actions. Second, the judgment of this case also provides an important principle of the Court that, for acts of infringement, neither the well-known status nor the longtime co-existence factor can be used as a defense in an infringement claim. To many rights owners who are facing similar types of situations, this will be encouraging news.

(The article was originally written in Chinese, the English version is a translation.) * Lu Qing is a partner of King and Wood’s Publication Group in Beijing.

9 The Interpretation of the Supreme People’s Court on Some Issues Concerning the Application of Law in the Trial of Civil Cases Involving Unfair Competition, Article 4.

8710694_1.DOC

The Seven Deadly Sins Of Software Licensing

Introduction An IT licence is a simply grant of permission to do something that would otherwise infringe another’s intellectual property rights. Easy? Sadly not. From a practical perspective, the purpose of any licence is to ensure certainty – for both parties. However, software doesn't easily lend itself to certainty. It dates quickly, can be modified or copied by any number of people, and scope of use can be difficult to define. There are a number of common pitfalls for both licensors and licensees, which if not considered up front can lead to at best uncertainty, and at worst disputes. Set out below are some of the common pitfalls, and suggestions of how to avoid them. Not Having a Licence By far the biggest (and most common) mistake made in software licensing is not having one. The basis for this tends to be inertia on the part of both parties – particularly where the lifespan of the software is likely to be relatively short. However, this means that key issues such as ownership of IP in derivative works, suitability for purpose and maintenance will not be dealt with. These are major litigation risks.

Licensing Checklist Assuming good sense prevails and a licence is agreed, there are seven issues that need to be considered up front. While by no means the only concerns in licensing, disputes over the following 'seven sins' count for well over 90% of licensing disputes: • environment or territory;

• exclusivity;

• fees;

• ownership of IP in developed works;

• maintenance and upgrades;

• ability to assign/sub-license; and

• termination.

http://www.simpsongrierson.com/

http://www.simpsongrierson.com/fyi_x-tech.html

Environment/Territory When it comes to IT licences the parties tend to spend a lot of time concentrating on defining what software is being licensed. While not to be discouraged, the reality is that this is usually the only thing the parties already agree on - usually both parties are very familiar with the software, and fully appreciate what it is, regardless of how well it is described. In stark contrast, the parties seldom start with a mutual understanding as to what will be done with the software. For any licence, it is important to clearly agree the territory within which the goods can be used. For tangible property, one needs to consider territory in geographical terms. However, for software licences the issue is often more complicated, as software is often used, accessed or stored on servers in other jurisdictions. Equally, the issue of environment needs to be considered – licences should consider whether use is restricted to particular hardware or in virtual environment. Exclusivity Closely linked to territory or environment is exclusivity. Within any particular environment licences can be sole, exclusive or non-exclusive. A sole licence means the licensor will not grant licence rights to another party but the licensor is still free to use the software. An exclusive licence means the licensee can use the software and even the licensor will not exercise any rights. A non-exclusive licence means the licensor can still exercise rights to the software and grant multiple licences. Fees Software is usually licensed for a fee, either as a lump sum payment or a ongoing royalty fee, and the quantum of the payment is sometimes tied to the number of users or size of the user organisation. The key area for dispute over fees tends to be the basis for determining royalty payments – will it be a percentage of gross revenue, the manufactured cost or net profit? IT businesses are often structured not make a net profit, and investment tends to be more often in equity than cash – so smart licensors need to be sure that royalties or payments cover non-monetary payments. The other alternative for determining royalties is a piece rate – a set figure per product sold or manufactured. Intellectual Property in Developments/Modified Works Given the nature of software, it is likely that some licensees will be interested in making improvements to the software and the question then arises as to who should own the IP underlying the improvement – the licensee or the licensor? It falls to be negotiated between the parties, but improvements to software under a licence agreement typically become the property of the licensor, although it can depend on the extent that the improvement can be regarded as a standalone improvement (in which case the licensee may own the IP). The key issue is to make sure it is dealt with up front.

Upgrades, Updates or Fixes The cost and responsibility for upgrades, updates and fixes should be clearly defined between the parties (and usually falls on the licensor). Licensees generally expect these to be provided as a matter of course – but it is open to negotiation whether a positive obligation should be imposed in the licence. Hand in hand with this is whether a licensee should be obliged to accept updates and, if they don't, will the licensor be obliged to continue to support the old software? Assignment and Sub-Licensing The parties will need to consider whether the licensee is permitted to assign its rights or delegate its obligations under the licence agreement. From a licensor's perspective this is important if for no other reason than to prevent the rights being passed on to a competitor. At the very least, the licensee should not be able to bind the licensor without prior written consent of the licensor. Termination Termination provisions are of particular importance in a software licence, as are post-termination obligations. As noted above, there are plenty of things that can go wrong in a licence, and a licensor needs to be able to terminate in case of breach, liquidation or even merely for convenience. Other key considerations should be change of control – what if your major competitor purchased the company you licence software to? Just as important are post-termination obligations. Will the software be removed from the licensee's servers, and will original discs be returned or destroyed? Who will verify the removal and at whose cost? Conclusion It isn't possible, or desirable, to try to list everything that needs to go into an IT licence. The above points are intended to cover off the most common concerns, but are by no means exhaustive. What is important, however, is to ensure that both the licensor and the licensee turn their minds to all of these issues. Uncertainty is the single worst thing in any licensing arrangement – and the faster an industry moves, the worse the effects of that uncertainty. Key Contacts Richard Watts +64-9-977 5182 [email protected] Nicola McCarthy +64-9-977 5108 [email protected] Note: The information provided in this article is intended to provide general information only. This information is not intended to constitute expert or professional advice and should not be relied upon as such. Specialist legal advice should always be sought for your particular circumstances.

September 2008 © Simpson Grierson

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Mailto:[email protected]

Mailto:[email protected]

Employer Services Advisory Bulletin

L&I Clarifies Washington Rules Regarding Pay for Commute Time in Employer's Vehicle

By Michael J. Killeen and Sheehan Sullivan Weiss [September 2008]

The Washington Department of Labor and Industries (L&I) has revised one of its Administrative Policies to clarify when time spent commuting in a company-provided vehicle constitutes paid work time.

The new Administrative Policy, which became effective September 2, states that travel or commute time is compensable when the facts and circumstances show that the time meets the definition of “hours worked.” Under current regulations, hours worked has three elements, each of which must be satisfied. The employee must be:

authorized or required by the employer; on duty; and on the employer's premises or at a prescribed workplace.

Although the analysis depends on the specific facts and circumstances of each employee, employer, and workweek, L&I makes clear that time spent driving a company-provided vehicle during an employee's ordinary travel, when the employee is not on duty and performs no work while driving between home and the first or last jobsite of the day, is not considered hours worked.

The Administrative Policy was the result of a year-long review process following the controversial and confusing Washington Supreme Court decision in Stevens v. Brink's Home Security, Inc., 162 Wn.2d 42, 169 P.3d 463 (2007). In Brinks, the court held that the commute time for home security installation and service technicians was compensable because the technicians drove employer-provided vehicles in which they not only carried their tools and supplies, but the technicians were also required to engage in interactive communication regarding their work assignments while commuting and could not use the vehicle for personal activities before and after work while they were commuting.

The Administrative Policy assists employers by providing specific, non-exclusive factors to consider in determining if an employee is “on duty” or “on the employer's premises or at a prescribed workplace.” The policy also provides examples of when drive time between home and the first or last jobsite of the day using a company-provided vehicle is compensable and when it is not.

For more information, please contact:

Davis Wright Tremaine has a team of experienced attorneys representing a wide range of employers throughout the United States. We have expertise in all aspects of human resource and employee relations law, including employment discrimination, wage/hour, labor, employee benefits, immigration, and diversity counseling. For a referral to an attorney who can help you with your particular need,

Michael J. Killeen Seattle, Washington (206) 757-8076 [email protected]

Sheehan Sullivan Weiss Seattle, Washington (206) 757-8152 [email protected]

please contact any one of us. Thank you.

This advisory is a publication of Davis Wright Tremaine LLP. Our purpose in publishing this advisory is to inform our clients and friends of recent legal developments. It is not intended, nor should it be used, as a substitute for specific legal advice as legal counsel may be given only in response to inquiries regarding particular situations.

Copyright © 2008, Davis Wright Tremaine LLP.

Page 2 of 2

FINANCIAL SERVICES REGULATION UPDATE | September 8, 2008 | 1

FINANCIAL SERVICES REGULATION UPDATE

Federal Government Takes Control of Fannie Mae and Freddie Mac: Conservatorship Will Likely Have a Near Term Negative Capital Impact on Banks and Thrifts Holding the GSEs’ Common and Preferred Stock On Sunday, September 7, 2008, James Lockhart, the Director of the Federal Housing Finance

Agency (“FHFA”), announced that he was placing Fannie Mae and Freddie Mac into the FHFA’s

conservatorship because “the companies cannot continue to operate safely and soundly and fulfill

their critical public mission.” In conjunction with the conservatorships of the two government

sponsored enterprises (“GSEs”), Secretary of the Treasury Henry Paulson announced three

primary actions by the Department of the Treasury to help stabilize Fannie and Freddie and the

broader financial markets. The three actions, discussed below, include a purchase by the Treasury

of mortgage-backed securities (“MBS”) guaranteed by Fannie and Freddie, a new liquidity tool to

lend directly to Fannie and Freddie if needed and the government becoming a senior preferred

shareholder of Fannie and Freddie. As a result, the government will own approximately 79.9% of

the common stock of each company on a fully diluted basis. These actions are permitted or

facilitated by recent passage of the Housing and Economic Recovery Act of 2008. 1/

Of particular interest to financial institutions holding Fannie and Freddie stock, both common and

preferred equity holdings will remain in place. Common shareholders will lose their voting rights

under the conservatorships, however, as noted by Secretary Paulson, "While conservatorship does

not eliminate common stock, it does place common shareholders last in terms of claims on the

assets of the enterprise." He further stated, "Similarly, the conservatorship does not eliminate the

outstanding preferred stock, but does place preferred shareholders second, after the common

shareholders, in absorbing losses."

In a Fact Sheet regarding the action and in Mr. Lockhart’s statement announcing the

conservatorship, 2/ Mr. Lockhart stressed that Fannie and Freddie will continue to pay its

obligations during the conservatorship, the conservatorships should be temporary and there are no

current plans to liquidate the two GSEs. Under their charters from Congress, Fannie Mae and

Freddie Mac can only be fully dissolved by and Act of Congress.

1/ Pub. L. 110-298. 2/ Both available at http://www.ofheo.gov/newsroom.aspx?ID=456&q1=1&q2=None

Hogan & Hartson LLP

http://www.ofheo.gov/newsroom.aspx?ID-456&q1-1&q2-None


The three primary actions of the Department of Treasury are designed to help stabilize the GSEs,

and the mortgage markets in general. 3/ First, the Department of Treasury entered into Preferred

Stock Purchase Agreements with each of Fannie and Freddie whereby Treasury will ensure that

each GSE maintains a positive net worth by contributing cash capital (up to $100 billion each). In

return, the Department of Treasury immediately receives $1 billion of senior preferred stock of each

GSE, and warrants for the purchase of common stock of each GSE at an exercise price of one -

one thousandth of a cent, representing approximately 79.9% of the common stock of each

company on a fully diluted basis.

Second, the Department of Treasury established a new secured lending credit facility which will be

available to Fannie Mae and Freddie Mac, as well as the Federal Home Loan Banks (“FHLBs”).

However, Secretary Paulson stated he did not believe any of the FHLBs would need to tap this

source of liquidity, as they have maintained stronger financial positions than Fannie and Freddie.

This facility is intended to serve as an “ultimate liquidity backstop.” The credit facility is structured

in a somewhat similar fashion to the liquidity facility the Federal Reserve has provided to primary

dealers. Though the Federal Reserve Bank of New York will administer parts of the program as

fiscal agent for the Treasury, it will be solely Department of Treasury funds used in the new credit

facility. Authority for these credit facilities expires in December 2009.

Third, and also under temporary authority which will expire in December 2009, the Department of

Treasury will purchase Fannie Mae and Freddie Mac MBS in the open market. Initially the

Treasury will purchase approximately $5 billion in GSE MBS, with additional purchases able to be

made when deemed appropriate. According to the Department of Treasury Fact Sheets issued

together with Secretary Paulson’s statement, the primary objectives in the management of these

investments in GSE MBS will be to promote market stability, ensure mortgage availability, and

protect the taxpayer. Secretary Paulson stated that the Treasury Department’s MBS purchase

program will aid mortgage affordability by assisting the GSEs as they are expected to now

moderately increase the size of their portfolios over the next 15 months, as opposed to the

shrinking of the balance sheets the two GSEs had undertaken in order to attempt to meet their

capital requirements.

In summing up the actions, Secretary Paulson emphasized that these were temporary steps, giving

policymakers, especially the next Congress and administration, a “time out where we have

stabilized the GSEs while we decide their future role and structure.”

Impact on Banks and Thrifts

In the long term, it is at least the hope that the Fannie and Freddie conservatorships, and the

related actions of the Department of Treasury, will stabilize the housing market and ultimately

benefit banks and thrifts. However, in the short term, banks and thrifts that hold common or

preferred shares may face some difficulties. In light of the beneficial capital treatment given to GSE

3/ See generally, “Statement by Secretary Henry M. Paulson, Jr. on Treasury and Federal housing Finance Agency Action to Protect Financial Markets and Taxpayers” and related documents, available at http://www.treas.gov/press/releases/hp1129.htm

http://www.treas.gov/press/releases/hp1129/htm


preferred shares (20% risk-weighting under the capital adequacy guidelines), a large number of

banks and thrifts hold significant equity positions in the GSEs. The conservatorships do not

eliminate all value of the GSEs’ common and preferred shares, but given the dilutive effect of the

Department of Treasury’s investment in the GSEs, and the conservator holding all voting rights of

the common stock, an impairment of Fannie Mae and Freddie Mac common and preferred shares

no longer seems in doubt. Similar issues appear to be less likely for GSE MBS and debt.

On Sunday, September 7, 2008, the Federal Banking Agencies (the Board of Governors of the

Federal Reserve System, Federal Deposit Insurance Corporation, Office of the Comptroller of the

Currency, and Office of Thrift Supervision) issued a joint statement regarding GSE exposure in light

of the conservatorships. 4/ The Agencies reminded institutions that investment in preferred stock

and common stock with readily determinable fair value should be reported as available-for-sale

equity security holdings, and that any net unrealized losses on those securities are deducted from

regulatory capital. The Federal Banking Agencies said that they believed only a limited number of

smaller institutions have holdings of Fannie and Freddie common and preferred shares that are

significant compared to their capital. The Federal Banking Agencies also said they are prepared to

work with institutions to develop capital-restoration plans pursuant to capital regulations and prompt

corrective action provisions. The Agencies encourage depository institutions to contact their

primary federal regulator if they believe that losses on their holdings of Fannie Mae or Freddie Mac

common or preferred are likely to reduce their regulatory capital below “well capitalized” levels.

About the Financial Services Regulation Update For more information on the matters discussed in this Financial Services Regulation Update, or to have this publication sent to additional colleagues, please contact one of the attorneys below.

STUART G. STEIN Partner [email protected] 202.637.8575 Washington, D.C. DANIEL S. MEADE Associate [email protected] 202.637.5896 Washington, D.C.

This Update is for informational purposes only and is not intended as basis for decisions in specific situations. This information is not intended to create, and receipt of it does not constitute, a lawyer-client relationship.

Copyright © 2008 Hogan & Hartson LLP. All rights reserved. Hogan & Hartson LLP is a District of Columbia limited liability partnership with offices across the United States and around the world. Some of the offices outside of the United States are operated through affiliated partnerships, all of which are referred to herein collectively as Hogan & Hartson or the firm.

www.hhlaw.com

4/ Available at http://www.federalreserve.gov/newsevents/press/bcreg/20080907a.htm

mailto://[email protected]

mailto://[email protected]

http://www.hhlaw.com

http://www.federalreserve.gov/newsevents/press/bcreq20080907a.htm

Electronic System for Travel Authorization for Visa Waiver Program Now Available

September 8, 2008

The Department of Homeland Security (DHS) is now accepting Electronic System for Travel Authorization (ESTA) applications on a voluntary basis for visa waiver program (VWP) travelers. ESTA will become mandatory on January 12, 2009. What Is ESTA? ESTA is an automated system that will determine the eligibility of nationals and citizens from a VWP country to board a carrier for travel by air or sea to the United States. If approved, the authorization will be valid for multiple entries for up to two years or until the traveler’s passport expires, whichever is earlier. ESTA does not guarantee admission to the United States. Customs and Border Protection officers will still make a determination of admissibility at the U.S. port of entry. For detailed information regarding ESTA, please visit http://www.cbp.gov/xp/cgov/travel/id_visa/esta/. What Is the VWP? The VWP allows nationals and citizens of certain countries to travel to the United States as visitors for business or pleasure for a temporary period of 90 days or less without first obtaining a B-1/B-2 visa stamp from a U.S. consulate. Eligible VWP countries are as follows: Andorra, Austria, Australia, Belgium, Brunei, Denmark, Finland, France, Germany, Iceland, Ireland, Italy, Japan, Liechtenstein, Luxembourg, Monaco, The Netherlands, New Zealand, Norway, Portugal, San Marino, Singapore, Slovenia, Spain, Sweden, Switzerland, and the United Kingdom. How to Apply for ESTA Authorization Nationals and citizens of a VWP country, regardless of age, must complete the ESTA application online at https://esta.cbp.dhs.gov. A third party, including a relative or a travel agent, is allowed to submit an application on the traveler’s behalf. Should the application be denied, the traveler will need to apply for a visa at a U.S. consulate. DHS recommends that ESTA approval be obtained as soon as travel plans are begun and no later than 72 hours prior to departure. Accommodation for emergency and last-minute travelers may be possible. Travelers may update their information, including their itineraries, through the ESTA website. How This Affects You We recommend that nationals and citizens of VWP countries who wish to travel to the United States as visitors for business or pleasure for a temporary period of 90 days or less and without a B-1/B-2 visa stamp obtain ESTA approval as soon as travel is expected. In addition, frequent business travelers may want to register now to avoid any possible delays in future travel.

http://www.cbp.gov/xp/cgov/travel/id_visa/esta/

https://esta.cbp.dhs.gov/

Morgan, Lewis & Bockius will continue to monitor the situation and will update you with any new information. If you have any questions about any of the issues raised in this Morgan Lewis Immigration Alert, please contact: San Francisco A. James Vázquez-Azpiri 415.442.1343 [email protected] Lance Nagel 415.442.1345 [email protected] Washington, D.C. Eleanor Pelta 202.739.5050 [email protected] Eric S. Bord 202.739.6040 [email protected] About Morgan, Lewis & Bockius LLP Morgan Lewis is a global law firm with more than 1,400 lawyers in 22 offices located in Beijing, Boston, Brussels, Chicago, Dallas, Frankfurt, Harrisburg, Houston, Irvine, London, Los Angeles, Miami, Minneapolis, New York, Palo Alto, Paris, Philadelphia, Pittsburgh, Princeton, San Francisco, Tokyo, and Washington, D.C. For more information about Morgan Lewis or its practices, please visit us online at www.morganlewis.com.

This LawFlash is provided as a general informational service to clients and friends of Morgan, Lewis & Bockius LLP. It should not be construed as, and does not constitute, legal advice on any

specific matter, nor does this message create an attorney-client relationship. These materials may be considered Attorney Advertising in some states. Please note that the prior results discussed in the material do not guarantee similar outcomes.

© 2008 Morgan, Lewis & Bockius LLP. All Rights Reserved.

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