Friday, February 29, 2008

Canada Fights Back, Costa Rica Gets Extension

Here's a page slap of a few articles on the current controversy over Barack Obama's possible, but not proven (or even likely), contacts with Canada over NAFTA. The story, which the campaign denies, is that the Senator contacted the Canadian Ambassador to assure Canada that all this negative NAFTA talk is just for purposes of the campaign. Given the talk of re-negotiating NAFTA, the Canadians have started to point out the value of U.S.-Canada trade, particularly in the energy sector.

Also below is a press release from the USTR announcing the extension of time in which Costa Rica can join CAFTA-DR.

Canada's ferocious NAFTA growl - How the World Works -

Harper Says U.S. Reopening of Nafta Would Be Mistake (Update2)

Obama Fact Check

CAFTA-DR Extension

Wednesday, February 20, 2008

Help My Zune

This is an off topic technology post. I'm looking for technical help and, frankly, just letting you know I am here. I have been busy with work and have a lot of travel coming up. I'll post as I can. Also, I haven't seem too much that really struck me as interesting.

I lost my MP3 player. By "lost" I mean it was quite possibly stolen by housekeeping personnel in a hotel. Unfortunately, it is equally possible that I left it in the hotel's fitness center. Either way, my Samsung MP3 player is no more. The much greater tragedy is that my outstanding Shure headphones went with it.

I have struggled for a couple weeks to figure out what to get as a replacement. My penultimate decision was to get a very cool new Samsung YP-P2. The Samsung has a very slick iPhone-ish design and touch screen interface. I also figured that a Samsung to Samsung upgrade would make migrating my collection easy.

Best Buy, changed my mind. Basically, the sales guy told me to look at Microsoft Zunes and iPods because they have the most accessories and the most stable designs. This rang true in that I have always wanted a speaker dock that was designed for the Samsung. None exists in the U.S. (although I did find one on a UK web site). So, I started looking at the Zune. I have an anti-iPod bias because I like the idea of being free to pick my music source and did not want to get tied into iTunes. I had seen good reviews of the 30 GB Zune online but it was very bulk in my hand.

The Best Buy guy told me that the 30 GB model was old school and that the 80 GB had a much better form factor and interface. Unfortunately, he also told me that they did not have any. That was a lucky circumstance for Circuit City, which was selling the 80 GB model on its web site. I found a generally favorable review on the reliable cnet and made the purchase.

From a hardware perspective, I love the device. It's bigger than its Nano-sized Samsung predecessor but with that comes a very attractive 3.2-inch glass screen capable of playing video in the landscape orientation. Video podcasts I have downloaded from Zune look great. The interface is controlled almost entirely from a touch sensitive button on the front. Wipe up or down to adjust volume or scroll through tracks. The left to right movement is a bit more awkward but the button can also be pressed to make a tactile connection. The earbud headphones are better than most and fit my ear reasonably well, but are certainly no replacement for my Shure's.

So far, my biggest complaint is that the FM reception is spotty. Reception is periodically crystal clear but for the most part staticky. So much for my hopes of listening to Steve Dahl while on the Metra.

The Zune desktop software looks great and is quite easy to use for basic functions. But, importing my collection has been a pain. Many of the tracks were not recognized and had to be hand tagged. In some cases, Zune found and applied the proper album art but in other cases it seems to have applied a random cover from another album. I have updated the album art on the desktop over and over. In most cases, the change takes. But, and this is where I am looking for help, in some stubborn cases, the art reverts to some other album cover. It is very annoying to hear a U2 song and see a picture of Weird Al Yankovic. Any one have an answer to this?

I have not quite figured out the social networking tricks my Zune can do. Supposedly, if I am near another person with a Zune, I can share or receive a track. So far, I haven't had the opportunity, but it sounds good in theory. I do think the podcast features work quite well.

Interestingly, Zune graphic designers seem to have a hippy-ish, psychedelic take on things. Plus, they have some cryptozoological flourishes in the design. You can see both in my "Zune Card" below.

So, in closing, if you know the answer to my Zune problem, please help. Re-tagging my files is keeping me from sleeping.

UPDATE: Yes, I fixed the links. Also, I forgot the irony in this post. It turns out that Zune's only really play nicely with Microsoft's Zune marketplace. That's basically the same arrangement iPod has with iTunes. Meaning, of course, that my anti-iPod stand against being stuck with iTunes is exactly what I bought into.

No Trademark Jurisdiction without Embargo

The Federal Circuit has issued a decision in Sakar International v. United States, a case I posted about here. Sakar, you may recall, involved the seizure of and a civil penalty relating to the importation of PDA accessories bearing of allegedly counterfeit Microsoft Windows logos on keyboards and UL labels on chargers. The Court of International Trade originally determined that it had jurisdiction to hear the case because it was an embargo. However, because Customs and Border Protection's assessment of the fine was not yet final, the CIT dismissed the case.

On appeal, things only got worse for Sakar.

The Federal Circuit rejected the notion that the law prohibiting the importation of merchandise is an embargo. Rather, according to the Federal Circuit, an embargo is a governmental restriction on the importation of merchandise for governmental purposes. The law prohibiting the importation of counterfeits is, on the contrary, there to permit private parties to enjoy their private property interest in the trademark. For proof of that, the Federal Circuit pointed out that 19 USC 1526(e), the law under which the seizure occured, includes an exception permitting the entry of the merchandise with the permission of the trademark holder. Thus, the interests at stake here are the trademark holder's, not the government's. Hence, no embargo. No embargo, no jurisdiction.

In addition to the statute, the Federal Circuit noted that the Supreme Court had addressed this very issue in K Mart v. Cartier in 1988. K Mart was a big deal case involving a jurisdictional dispute between the Court of International Trade and the District Courts. The issue was whether the restriction on the importation of infringing merchandise was an embargo, giving the CIT jurisdiction. The difference between K Mart and Sakar is that K Mart involved section 1526(a) not 1526(e). Sakar argued that 1526(e) was a complete ban on imports and, therefore, an embargo.

There is something to this. Subsection (a) prohibits the importation of merchandise bearing a US trademark without the consent of the trademark holder. Subsection (e) says that counterfeit merchandise will be seized by CBP. But, subsection (e) also has an escape clause for importers of counterfeit merchandise who receive permission to import from the trademark holder. That means the private party is ultimately in control. Thus, there is no embargo.

That's too bad. Not because I want potentially counterfeit goods to enter the country. But, I remain curious about how a court would resolve the question about how to value the counterfeits. For now, that will remain an open question.

Monday, February 18, 2008

Why Valuation Matters to Art Smugglers

Customs and Border Protection checks the reported value of imports against its database of reported values on similar goods. When the current import has a value that is out of line with the statistics, CBP can issue a rejection notice or a CF28 request for information.

One wonders whether that is what started this story unraveling. A missing painting by the famed artist Jean-Michel Basquiat has been located in a warehouse in Manhattan. The painting had gone missing in Brazil after the bankruptcy and arrest of its owner. According to the article, the $8 million painting was declared to have a value of $100. That sounds like a 592 fraud penalty to me, although I think it is safe to assume that the importer of the painting may have bigger issues coming his or her way.

Thursday, February 14, 2008

Ron Paul and the North American Union

This is not a forum for debating presidential politics. So the context of this article is unfortunate. It is from and it analyzes several Ron Paul statements. Of particular interest here is his notion that a secret cabal is planning to merge the U.S., Canada, and Mexico into a North American Union and that a major (but non-existent) superhighway project is the first step. The article is worth reading as it also points out that the U.S. does not spend $1 trillion to maintain its foreign empire.

Wednesday, February 13, 2008

Real Counterfeits of Virtual Swords

Square Enix, the company behind the Final Fantasy computer games, movies and other media has a novel intellectual property issue. Someone is importing copies of its swords. Keep in mind that prior to being knocked off, these swords existed only as virtual swords to be wielded in video games.

According to this article, Square Enix has sued four retailers and is working with Customs and Border Protection to seize imports.

Tuesday, February 12, 2008

News on Border Searches of Computers

Questions surrounding Customs and Border Protection searches of computers at the border continue to generate news and lawsuits.

Here are two recent articles on the topic:

Washington Post


If a CBP inspector could, in a Matrix-like way, jack right into a passenger's brain, he or she might find all sorts of possibly messy private details. These days, computers and other digital devices are extensions of our physical memories. Where we need to be next week and where we were was last week is in our PDAs (and maybe not our head). An arriving passenger's computer might also have privileged client communications, possibly embarrassing bad hair pictures from the 1970's, secret recipes for guacamole, and mash notes from the creepy guy in accounting.

Does CBP have the right to rummage through that data looking for evidence of terrorism, child pornography, or other wrong doing? That is the question that may end up going to go before the Court. For the moment, a suit brought by the Electronic Frontier Foundation and the Asian Law Caucus in San Francisco is seeking access to CBP records of searches under the Freedom of Information Act. The complaint is available here.

This looks like another suit to watch.

Wednesday, February 06, 2008

The Other First Sale

I have been catching up on cases and, frankly, have not seen too much that is particularly interesting.

Here is one to watch for: Gross Kobrick Corp. v. United States, CIT court number 08-0042. The issue is whether Customs and Border Protection properly excluded merchandise and properly refused to permit the importer to segregate admissible from non-admissible merchandise.

The merchandise is compressed remnant sheeting known as "pound goods" sold in bales. I am picturing kids sheets printed with Curious George and Buzz Lightyear, die cut into uniform sizes and compressed into bales for resale. It is not clear to me what one would do with this merchandise, but apparently there is a market for it.

My made up references to cartoon characters is important here. According to the complaint, Customs detained the merchandise on the basis of an alleged violation of a trademark or copyright. But, and this is important, CBP never gave the importer any indication as to what trademark or copyright CBP is trying to protect. Rather, simply CBP asked the importer to get a letter from the rights holder authorizing the importation.

This is, of course, probably impossible. The rights holder generally has no interest in assisting the importation of merchandise bearing its marks where it has nothing to gain. The rights holder, assuming it can be identified, is most likely going to ignore the request. Essentially leaving the importer hanging out to dry.

The problem for the Court is that the importation may well be legal. When a trademark holder freely sells branded merchandise in a foreign country, it is fully compensated for the value of that merchandise. The buyer can (absent contractual restrictions) re-sell that merchandise. In intellectual property circles, that is known as the first sale doctrine and it is what makes garage sales and eBay legal (in most cases). This is also what makes importing genuine gray market goods legal to import in most cases.

Unfortunately, it is almost always impossible for the importer to prove that the merchandise is genuine and gray market (and not materially different from the product in the U.S. market). Customs will ask for proof that the vendor had the right to sell the merchandise to the importer. Often, the vendor is several steps removed from the rights holder. And, as I said above, the rights holder has zero incentive to cooperate. Imaging calling Disney and asking for a letter saying you can import a container load of Mickey ears for which it will not be paid. Often, importers are stuck because Customs has created an insurmountable obstacle.

The situation with copyrights is a little better because CBP will only get involved in the relatively rare circumstance where the imported merchandise was made in violation of the copyright laws. This is because the copyright statute has a first sale exhaustion provision built right into it.

Gross Kobrick has asked the Court to order CBP to release the detained merchandise or to allow it to segregate the allegedly offending merchandise and deal with it separately. It strikes me that the Court has the opportunity to look at the allocation of burdens placed on importers of goods bearing trademarks or copyrights and on Customs in deciding to detain merchandise. Customs needs to keep in mind that the Supreme Court has said that gray market imports are legal imports.

This is going to be very interesting.

Friday, February 01, 2008

Page Slap

A page slap is when you reply to an e-mail message with nothing but a link to a web site. In essence, you are saying "Look at this and figure it out yourself."

I am in DC at the Georgetown International Trade and Customs Law Update. The program is going well. Items getting a lot of attentiona are zeroing and the impact of non-subject merchandise on injury determinations at the ITC. On the customs side, most of the talk during breaks is about first sale valuation.

Later today, I am speaking on prior disclosure and internal reviews.

But, I have seen a couple interesting articles in the paper. Hence, this page slap (which is not in response to an e-mail, but so what):

An Inquiry into Artifact Smuggling

Export Controls and China's Security Services

I've got a stack of cases to review, so expect something substantive soon.