legl test 3 - ch 12, 13, 17, 18

utility patent

a patent that protects the functionality of the invention has broad range of potential applications

drawback

a refund of duties already paid on imported goods when the goods are reexported or destroyed

manufacturing drawback

a refund of duties and taxes paid on merchandise that is imported, subjected to manufacture/production, and then exported within five years most common type in US, encourages US manufacturers to export

sanction

a regulation that restricts/prohibits certain relationships with specified foreign countries, entities, or named individuals because of their support for international terrorism, proliferation of weapons of mass destruction, narcotics trafficking, etc.

commercial invoice

a seller must provide a separate invoice for each commercial shipment entering required for all shipments intended for sale in US must provide all pertinent info about shipment, in english, and be signed by the seller

domestic or regional value content test

a type of value added test, requires some minimum % of the value of materials and direct processing operations be performed in a country in order for it to have "originated" there

global supply chain

an integrated international network of logistics, communications, finance, and trade relationships designed to take a product from inception through production and delivery to customers

consolidated screening list

an online compilation of prohibited end users

automatic commercial environment

an online system of US customs and border protection, exporters use automated system to file an electronic export info info shared with bureau of industry and security for export control purposes and with census bureau for statistical purposes

boycott

an organized refusal of one or more nations, often backed by economic sanctions, to trade with one or more other nations

output or customer restrictions

can be used to limit the amount of products the licensee can produce or limit the number of customers the licensee can sell to especially if licensor plans to use the licensee as a source of products for the licensor's own distribution requirements

foreign policy controls

controls used to promote the foreign policy goals of the US and for the following reasons

national security controls

coordinated with US allies on basis of wassenaar arrangement license required for all items controlled for national security reasons for US (except canada)

tariff schedule

a listing of specific items, coded numerically and described by name or use tariff rate for each item given according to country of origin

nationalization

the taking of an entire industry or national resource as part of a plan to restructure the nation's economic system

diversion

the unlawful transfer, transshipment, rerouting, or reexporting of controlled goods or technology from one destination to which the goods or technology from one destination to which the goods were legally shipped to another destination who has not been licensed to receive the items

geographical indications

where a product, particularly a wine or liquor, is marketed by reference to a geographic region

double taxation

where the same item of income is taxed by two different tax authorities

customs broker

an authorized agent, licensed by federal law, to act for and on behalf of importers in making entry of goods

electronic export information

an electronic filing required for each export shipment leaving the US

political risk insurance

inconvertibility insurance = type of this

gross negligence

an importer commits this if there is clear and convincing evidence that the act or omission was done with actual knowledge or reckless disregard for the relevant facts and with disregard for the importer's obligations under the law

protesting liquidations

an importer that wants to dispute a liquidation made by customs may file a protest with customs within 90 days at the port where the goods entered

design patents

patents protecting the ornamental features of an article of manufacture

principal use

(in the US) the ordinary use to which articles of the same class and kind as those being imported are usually put and which is greater than any other single use of the article

articles not requiring marks

1) products incapable of being marked 2) products that can't be marked without injury 3) crude substances 4) articles produced more than 20 years prior to importation 5) articles imported solely for the use of the importer and not intended for resale 6) certain products that are exported and returned

license

a limited permission to use a domestic firm's trademarks, copyrights, or know how in making products for sale in the vicinity of the foreign company's country

short supply controls

US law permits use of these to protect the US economy from excessive foreign demand for scarce materials

royalty

a license fee

currency swaps

a broad assortment of financial contracts, may be purchased from financial intermediaries to hedge against fluctuation risk

contract manufacturing

a business arrangement in which the production of goods is contracted or "outsourced" by one firm to a manufacturing firm, often overseas

tax haven

a country where the effective tax rate on a relevant item of income is very low or zero

same condition drawback

a drawback of duties paid on imported goods that are reexported in the "same condition" as they were imported, provided they were not significantly altered

extraterritorial jurisdiction

ability of a nation, as a matter of law, to extend the power of its export control laws over its goods and technology once they have left its territory

entry process

administrative process all commercial shipments must go through, supervised by national customs authorities

rejected merchandise drawback

allowed for imported merchandise that was shipped without consent, is defective, or does not conform to specifications or to samples merchandise is returned to US customs within 3 years and either destroyed or reexported

validated end user program

allows qualified exporters to preapprove shipments to foreign trusted customers, business partners, and subsidiaries of American companies of certain high technology or dual use items without the need for individual export licenses

reinsurance treaty

an agreement among insurance companies that spreads the risk among its members under its terms, the lead underwriter can commit the resources of the entire group after negotiating the transaction with the US investor

franchising

arrangement in which the licensor permits the licensee to sell certain goods under the licensor's trademark or service mark under the terms of a franchising agreement

composite goods

articles made of different materials or components if two or more headings/subheadings each describe only certain components, the article must be classified under the heading that gives it its essential character

bad faith

at common law, means intentional wrong behavior in UDRP, includes some negligence without a finding of intent

license exception

authorization to export without a license

passive investment

can involve either a passive debt investment (making a loan to a foreign business) or a passive equity investment (purchasing an equity interest in the foreign business as a portfolio investment that doesn't allow for control of business)

currency exchange rights

can negotiate with the government in advance for preferential access to hard currency, can help solve incovertability problem

useful

capable of industrial application

tied purchase clauses

clauses that require the franchisee to buy certain goods from the franchiser

compound tariff rate

combination of both ad valorem and specific tariff rates

counterpurchase agreement

common type of countertrade involves the sale of goods to a buyer, often a foreign govt, which requires as a condition of the sale that the seller buy other goods produced in that country

trading with the enemy act

congress passed to restrict trade with hostile countries during times of war or a time of emergency declared by the president

soft ucrrency

currency that is not freely exchangeable for currencies of other nations currency's fluctuation risk viewed as too great to maintain markets in it

soft blockages

delays in processing conversion requests by local authorities

substitution drawback

drawback of duties paid on imported goods may be received by a US firm that imports goods and then exports other goods of the "same kind and quality" usually deals with fungible goods or agricultural commodities

trade credtors

entities that sell supplies or services to the venture

qualified claims

even where an article can't be marked/described as "made in the USA" it may still bear a qualified claim if the claim is not deceptive ex: designed in california, assembled in china

record keeping requirements

exporters are required to keep records related to all licensed exports for a period of five years

repatriated

foreign income paid out to the US person, typically in the form of a divided

political risk analysis

form of proactive management enterprise retains a firm or its own personnel to analyze a host country's risk of nationalization/expropriation, as it would study any other business problem

general rules of interpretation (GRI)

found at beginning of tariff schedule, first step in determining dutiable status of an article

foreign availability

generally means the controlled item, or one of comparable quality, is "available in fact" from non US sources in sufficient quantities so that any attempt to control for national security purposes would be ineffective

right of priority

given by paris convention to a patent holder provides the date of an applicant's foreign application is deemed to be the same date as the applicant's original application on the same invention, so long as the foreign application was filed before the first anniversary of the original application

comity

good relations among nations

production assists

goods, services, or intellectual property furnished by the importer to a foreign producer, free or at a reduced price, for use in producing merchandise for import into the US value must be included in transaction value when the goods are imported into the US

statute of limitations

government is barred from bringing any action to collect an import duty after five years from the date of the violation involving negligence or gross negligence or five years from the date of discovery of a violation involving fraud

rule of relative specificity

if an article can be classified under two or more headings/subheadings, it must be classified under the one that most specifically/narrowly describes the article with the greatest degree of accuracy and certainty

articles substantially transformed

if an article is not wholly the growth, product, or manufacture of one country, but has been produced in multiple countries, then the country of origin is that country where the article last underwent a substantial transformation into a new/different article of commerce

priority claim

if at least one of the applicants named in the PCT application is a national/resident of a PCT signatory, the PCT gives the application this on that invention in all signatory states with this, the applicant business has up to 30 months after filing to begin the administrative processing of the application

currency risk

if investment is in an enterprise that will be earning foreign currency, business must consider this

import substitution rights

if preferential currency exchange rights aren't available, US investor may seek these available when the new venture will manufacture a product in the soft currency country that the nation had previously imported

essential character

if two or more headings/subheadings describe only certain materials in composite goods, the article is classified under the heading that gives the article this

harmonized tariff schedule of the US

in US, maintained by ITC divided products into several thousand tariff classifications organized in 22 sections and 99 chapters, which are broken into headings, subheadings, and tariff items

parallel exchange

in some soft currency countries, foreign investors form consortia to trade local soft currency

negligent violations

in which the importer fails to use reasonable care, skill, and competence to ensure that all customs documents and statements are materially correct and all laws are complied with

transfer pricing

international trade between related parties, such as parent and its subsidiary, that are free to fix prices to one another because market forces don't discipline the prices

active investment

investment that ultimately will result in the investor having an ownership interest in the foreign business as either a foreign branch or subsidiary

foreign direct investment

investor owns and actively controls the productive assets of ongoing business concerns in a foreign country

inconvertibility (nontransfer) insurance

investors can purchase insurance policies to insure against hard blockages, can also pay higher fee to protect against soft blockages

nonobvious

involves an inventive step

export controls

laws and regulations that govern the control and licensing of certain goods and technology exported from the US or released/transferred to anyone who isn't a US citizen or permanent resident (whether that person is in/outside the US)

antiboycott laws

legal responses by govts that make it unlawful for their citizens or companies to participate in a boycott

foreign trade zones (FTZs)

legally defined sites (warehouses and manufacturing facilities) operated pursuant to legislation and under govt license, that are legally "outside" the customs territory of the country they are in duty deferral and duty saving device imported goods may be brought to these sites without being subjected to tariffs until such time as the goods are released into the stream of commerce of that country

exclusive rights

licensee may demand these when exploitation of the licensed IPR requires significant financial/other resources usually within some geographic area to enhance its chances of earning adequate ROI

geographical limitations

licensor may limit sale within a specific nation/region/etc.

rates of duty

listed to each tariff item in a tariff schedule column 1 = general rate (normal trade relations) column 2 = original rates from Smoot Hawley Act (1930), (countries not given normal trade)

export

means the "actual shipment or transmission" out of the US in any manner, or releasing or transferring technology/software to a foreign person in the US (who is neither a US citizen or permanent resident)

technology

means the info necessary for the development, production, use, or operation of items, and in almost any form

gray market goods/parallel imports

merchandise produced and sold abroad and then imported back to US for sale

patent protection

now available for any new inventions, whether products or processes, in all fields of technology, provided they are new, involve an inventive step, and are capable of industrial application

hard blockages

occur when the foreign govt passes a law that prevents conversion of transfer

substantial transformation

occurs when the original article loses its identity as such and is transformed into a new and different article of commerce having "a new name, character, or use" different from that of the original item

export management and compliance program

one of the best ways to ensure compliance, companies can establish internally effective one should be in writing and state company compliance policies

privatization

opposite of nationalization, natural sovereign transfers a govt owned asset to private parties can be accomplished by outright sale of assets or ownership interests in a state owned enterprise being sold to private investors

modern traditional theory

permits takings but imposes certain requirements on the nation exercising its takings power recognizes the sovereign's right to nationalize foreign owned property to exercise eminent domain

informal entry

personal and commercial shipments valued at $2500 or less may be cleared through this processe

insurance syndicates

pools of money provided by investors to insure specific projects

fluctuation risk

possibility that the currency of the country in which the US investor has put its money will devalue against the US dollar

countertrade

practice of making payments to the franchiser with goods instead of hard currency

traditional theory

prohibits all takings of foreign property foreign investors should be exempt from the sovereign's condemnation rights

export credit agencies

promote investment from their own countries

profit margin preservation/unitary index adjustment

provisions to build currency adjustment mechanisms into contractual payment terms price or payment to foreign investor will be adjusted periodically to maintain the same profit margin

informed compliance

refers to "softer" mechanisms designed to place the burden of voluntary compliance on importers

port of entry

refers to any place when customs or immigration authorities permit the entry of goods are people typically sea/ocean ports, river ports, airports

enforced compliance

refers to the active investigation of customs violations and the prosecution of violators

formal entry

refers to the administrative process required to import goods into the customs territory of a country following conditions for US: 1. goods arrived at a US port of entry 2. goods aren't of a type that isn't permitted entry or from an embargoed country 3. delivery authorized by customs after inspection/released 4. estimated duties have been paid or customs bond posted

dutiable status

refers to the legal status of imported goods at the time of entry for purposes of compliance with the tariff and customs laws 3 factors 1) classification/numerical coding of article 2) customs value of article 3) country of origin

reexport

refers to the shipment or transfer of American controlled items or technology from one foreign country to another foreign country or foreign person

net book value

reflects the tax related depreciated cost of assets without regard to whether there has in fact been true depreciation in value

binding ruling

represents the official position of customs with respect to the specific transaction for which it was issued binding on customs personnel until revoked

prior approval

requiring substantive ____ from a govt agency is a more intrusive type of regulatory scheme indicative of a relatively protectionist govt policy

fundamental research

research in science, engineering, or mathematics, the results of which ordinarily are published and shared broadly within the research community, and for which the researchers have not accepted restrictions for proprietary or national security reasons

field of use limitations

restrict the applications for which the licensee may employ the intellectual property right

political risk

risk that profits will be affected by changes in the host country's political structure or instability

inconvertibility risk

risk that the govt of a country with "soft currency" will hinder the US entrepreneur from trading the foreign currency back to US dollars

specific processing rules

rules state that an item originates in a country if it was subjected to specific forms of manufacturing or processing in that country

notice of adjustment

sent to the importer when customs at the port of entry determines additional duties are owed

specific tariff rate

specified dollar amount per piece, or unit of weight/measure

tariff shift rule

states that the country of origin is the last country in which all "inputs" into the finished article underwent a required change in tariff classification

international emergency economic powers act

statute provides the current grant of authority to the president to regulate economic and financial transactions and to place restrictions on importing or exporting during a peacetime international emergency

prior disclosure

statute to encourage importers to voluntarily report their own possible violations of the customs laws

patent cooperation treaty

supplemented paris convention by establishing a centralized utility patent application process, signed by 152 nations

notification registration

system more open to technological transfer prior approval schemes replaced by a simple registration procedure

expropriation

taking of an isolated item of property

ad valorem tariff

tariff rate based on a percentage of the value of the articles imported

value added tax

tax on the value added at every stage of the production process

franchise tax

taxes based on the franchiser's worldwide operations

export control classification number

the commerce control list and commerce country chart used together, identify items, give reasons for control for each, and tell whether a license is required to export to specific countries

country of origin

the country from which an imported article is said to have originated according to specific rules

dutiable value

the customs value of goods entered into any country must be reported by importer of record to national customs authorities at time of entry

barter

the direct exchange of goods for goods (or services)

creeping expropriation

the effect of laws and regulations that subject the investor to discriminatory taxes, legislative controls over management of the firm, price controls, forced employment of nationals, license cancellation, and restrictions on currency convertibility

importing

the entering of goods into the customs territory of a country

conscious avoidance

the exporter purposely avoided learning the truth about an end user or destination, information that might've had a bearing on their license application

liquidation

the final computation and assessment of the applicable duty on entered goods by customs, "closes the book"/makes the entry complete

gray market/parallel trade

the importation of merchandise produced and sold abroad and then imported back into the US for sale in competition with the US trademark owner

currency inconveribility

the inability to convert currency

ultimate purchaser

the last person in the US who receives an article in the form in which it was imported

rules of origin

the legal rules used to determine the country of origin of imported products found in trade agreements, national statutes, and the regulations of customs authorities

transaction value

the price actually paid or payable for the merchandise when sold for export to the US, plus the following amounts if not included in purchase price 1) packaging/container costs 2) selling commission paid by buyer to/for an agent of the seller 3) the value of any "assist" 4) any royalty/license fee the buyer has to pay 5) proceeds of any subsequent resale of merchandise that accrues to the seller

tariff engineering

the process of modifying or engineering a product prior to importation, or importing it at an earlier stage of manufacturing, for the purposes of obtaining a lower rate of duty

buy back agreement

the provider of the equipment or technology used in manufacturing will receive, as its payment, a portion of the goods manufactured by the supplier's equipment or the factory in which the equipment is installed

cybersquatting

the registering of a domain name with the intent to profit from the goodwill of a trademark belonging to another typically, they offer to sell the domain to the company that owns the trademark at an inflated price result of "first to file" rule

deemed reexport

the release or transfer of an item from someone who was licensed to receive it to a different foreign person

deemed export

the release or transfer of any item subject to control to a foreign person in the US

grant back

the return of ownership or right to use to licensor from licensee reasoning = licensee wouldn't have had opportunity to develop these technologies without the know how of the licensor

language politics

the situation, found in regions of a few countries, where laws require that companies conduct business in a certain language

fair reasonable and nondiscriminatory (FRAND)

this type of licensing can significantly reduce risk of patent "hold up", only applies in limited circumstances reason samsung had to give apple a license for 3G telecommunications

preferential rules of origin

those applicable to 1) goods traded within a free trade area or customs union 2) goods imported from countries that receive special tariff treatment pursuant to a trade agreement 3) goods imported under a trade preference programs for developing countries

non preferential rules of origin

those applicable to imports from developed countries that receive normal tariff treatment (or have normal trade relations)

dual use items

those commercial items that may also have military, terrorist, or proliferation uses

private political risk insurance

two principal markets, provided by Lloyd's of London and other insurance syndicates private = more regulation but more expensive

commerce control list

used by exporters to determine if a license is needed for export, published by BIS as supplements to EAR, available online

multilateral sanctions

usually more effective than sanctions without universal support harder to circumvent, carry the backing of intl law and force of intl moral opinion

civil customs fraud

violation that exists where there is clear and convincing evidence that the importer knowingly made a materially false statement/omission when entering (or attempting to enter) goods in the US

biopiracy

when corporations from more developed nations extract plants and animals indigenous to the emerging nation for search (w/help of local knowledge), alter the plant/animal (genetic engineering), and obtain patents related to research without providing host country with compensation or affordable access to the inventions