2001 International Law Update, Volume 7, Number 1 (January).
In case of first impression in Ninth Circuit, Court holds that child acquires new “habitual residence” under Hague Convention on Child Abduction only in presence of settled intent by parent or lawful guardian to abandon former residence
Israeli citizens Arnon and Michal Mozes were living with their four children in Israel until 1997 when Michal decided to move to Los Angeles with her children. Arnon stayed behind in Israel, but he did cover the expenses of the house and cars in Los Angeles. Even though the family had only short-term U. S. visas, the children went to school and quickly learned English. A year after her arrival in the U.S., Michal filed for divorce and custody of the children who then ranged from seven to sixteen years old. A Los Angeles Court granted Michal temporary custody of the children.
Less than a month later, Arnon filed a petition in a California federal court seeking the children’s return to Israel pursuant to the Hague Convention on the Civil Aspects of International Child Abduction (T.I.A.S. 11670, 15 I.L.M. 1501). The Hague Convention addresses the unilateral removal or retention of children by parents, guardians or close family members. When a person wrongfully removes a child habitually residing in one signatory state to another signatory state, Article 12 provides for procedures to secure the child’s return to its former residence. Under Article 16, the authorities of a signatory state are not to decide custody rights on the merits until they have determined that the child is not returnable under the Hague Convention. The district court denied Arnon’s petition, and he appealed. The U.S. Court of Appeals for the Ninth Circuit reverses and remands.
As to what constitutes the “habitual residence” of the children and whether the children were wrongfully removed, the Court turns first to the “intent” element. “[T]he first step toward acquiring a new habitual residence is forming a settled intention to abandon the one left behind. Otherwise, one is not habitually residing; one is away for a temporary absence of long or short duration. Of course, one need not have this settled intention at the moment of departure; it could coalesce during the course of a stay abroad originally intended to be temporary. Nor need the intention be expressly declared, if it is manifest from one’s actions; indeed, one’s actions may belie any declaration that no abandonment was intended. ... Whether there is a settled intention to abandon a prior habitual residence is a question of fact as to which we defer to the district court.” [Slip op. 20-21]
The question then becomes “whose settled intention” determines whether a child has abandoned a prior habitual residence. In general, American courts say it should be the intent of the person or persons who are legally entitled to fix the place of the child’s residence. “Sometimes the circumstances surrounding the child’s stay are such that, despite the lack of perfect consensus, the court finds the parents to have shared a settled mutual intent that the stay last indefinitely. When this is the case, we can reasonably infer a mutual abandonment of the child’s prior habitual residence. Other times, however, circumstances are such that, even though the exact length of the stay was left open to negotiation, the court is able to find no settled mutual intent from which such abandonment can be inferred. Clearly, this is one of those questions of ‘historical and narrative facts’ in which the findings of the district court are entitled to great deference.” [Slip op. 29] Finally, acquiring a new “habitual residence” demands an actual change in geography and the passage of a period of time “sufficient for acclimatization.”
Here, the district court failed to consider the importance of shared parental intent under the Convention. “Given that the Mozes children had a clearly established habitual residence in Israel in April 1997, and that the district court did not find an intent to abandon this residence in favor of the United States, the question it needed to answer was not simply whether the children had in some sense ‘become settled’ in this country. Rather, the appropriate inquiry under the Convention is whether the United States had supplanted Israel as the locus of the children’s family and social development. As the district court did not answer this question, we must remand and allow it to do so.” [Slip op. 52-53]
In the interest of judicial economy, the Court clarifies certain additional issues that may arise on remand. For example, the Convention requires a review of whether the retention breached rights of custody attributed to Arnon in Israel. Article 14 of the Convention allows courts to take judicial notice of the law of the habitual residence in such cases. Here, the applicable Israeli Capacity and Guardianship Law, Section 18, states that “in any matter within the scope of their guardianship the parents shall act in agreement.” Thus, Michal had disregarded her husband’s rights. In this case, if Israel was still the children’s habitual residence at the time that Michal filed her action, then their retention in the U.S. was wrongful and Convention Article 12 requires that the children go back to Israel for an Israeli court to decide the question of custody.
Citation: Mozes v. Mozes, No. 98-56505 (9th Cir. January 9, 2001). [Additional information on Hague Convention is available on internet website of Hague Conventions on Private International Law “www.hcch.net”.]
District of Columbia Circuit upholds legal sufficiency of plaintiff‘s allegations that U.S. government’s longstanding deceptions concerning torture and death of her husband at hands of Guatemalan military breached her constitutional right of access to courts
In 1991, Jennifer K. Harbury, a U.S. national, entered into a Texas marriage with Efrain Bamaca-Velasquez, a citizen of Guatemala and a leader in the Guatemalan National Revolutionary Union, a rebel organization. A few months later Bamaca went back to Guatemala where, in March 1992, he dropped out of sight. According to the Guatemalan army, Bamaca had committed suicide during a skirmish with its troops. The alleged truth was that the Guatemalan military had captured and secretly detained Bamaca to torture information out of him about the local resistance forces. According to Harbury, CIA “assets” such as security or intelligence personnel took part in this operation with financial support from the CIA.
An escapee from a military interrogation camp told Harbury in early 1993 that Bamaca was still alive but under physical and psychological pressures. State Department officials whom Harbury contacted promised to inquire into the matter but never gave her any information.
When Harbury eventually got to open Bamaca’s alleged grave, she found that the body therein was someone else. Harbury immediately reported this to Marilyn McAfee, the U.S. Ambassador to Guatemala. McAfee allegedly assured Harbury that she would look into the situation and report back but never did convey any information to Harbury.
Harbury had many meetings with State Department officials over the next year or so only to hear that the Guatemalan Military claimed that it never had detained Bamaca. An October 1994 broadcast of the CBS news program “60 Minutes” announced that the American Embassy in Guatemala had an intelligence report that the local military had captured Bamaca alive. At this point, State admitted to knowing about Bamaca’s capture and detention but denied it knew whether Bamaca was dead or alive.
These disclosures led Harbury to meet with National Security Advisor Anthony Lake. He claimed that the U.S. government had “scraped the bottom of the barrel” for data on Bamaca but had nothing more to report. He, too, assured Harbury that the government would go on looking for information and would keep her informed. Other State Department and NSC officials told Harbury that they lacked specific information about Bamaca’s fate but that they assumed he was still alive.
Finally, Harbury announced that she would start a hunger strike in front of the White House on March 12, 1995. Twelve days into the strike, Congressman Robert Torricelli publicly reported that a paid “CIA asset” had ordered the murder of Bamaca years before.
Harbury then sued various named and unnamed officials of the CIA, State Department and the NSC. Her claims rested on two general allegations of fact. “First, she alleged that CIA officials at all levels ‘knowingly engaged in, directed, collaborated and conspired in, and otherwise contributed to [her husband's] secret imprisonment, torture and extrajudicial murder.’ Complaint paragraph 49. Many of the Guatemalan military officers who tortured and killed Bamaca, she alleged, were paid CIA agents. Two had been trained in torture and interrogation techniques at the School of the Americas, a U.S. Army facility located in Georgia.”
“According to Harbury, CIA officials who did not participate directly in Bamaca's torture not only paid Agency assets for information about Bamaca's rebel organization, knowing that the information had been extracted through torture, but also requested further intelligence, knowing it too would be obtained in the same manner. And as a general matter, Harbury alleged that CIA officials knew of other gross human rights violations in Guatemalan interrogation centers‑‑including beatings with cement blocks, burials of prisoners alive, and electrical shocks to the testicles and legs‑‑and that CIA officials up the chain of command, from the operations and intelligence divisions to the Director himself, expressly authorized their assets to use torture to obtain information from Guatemalan rebel leaders.” 
Secondly, Harbury alleged that, during years of meetings, U.S. officials knew of Bamaca’s fate and deliberately refused to reveal the facts to her for fear of incurring bad publicity or legal liability. Harbury’s complaint alleged direct breaches of the U.S. constitution -- the Bivens claims -- plus common law tort claims and claims for violating international law.
The U. S. District Court for the District of Columbia dismissed her complaint for failure to state claims upon which relief may be granted. This rested not only on plaintiff’s failure to allege valid substantive violations but on the conclusion that, assuming the violations arguendo, defendants were immune from suit. Harbury appealed.
Only Harbury's Bivens claims, however, are directly at issue before the appellate court. These rest on three alleged constitutional violations: (1) that, by complicity in Bamaca's torture, CIA defendants had violated his Fifth Amendment substantive due process rights; (2) that, by taking part in and covering up information about Bamaca's torture and murder, all defendants had breached Harbury's constitutional right to familial association; and (3) that, by hiding information and misleading her about her husband's fate, NSC and State Department defendants had transgressed her right of access to the courts. The U. S. Court of Appeals for the District of Columbia Circuit affirms in part and reverses in part.
First, the Court rejects plaintiff’s contention that the torture of her husband in Guatemala violated his substantive Fifth Amendment right to due process. In general, the extent of an alien’s claim to constitutional protection varies directly as the closeness of his or her links to the U.S. Here, Bamaca was a non-resident alien allegedly being abused outside the U. S. The furthest reach of the precedents have recognized violations of the substantive constitutional rights of non-citizens only in the cases of (1) physical presence in the U.S. at the time, (2) mistreatment in a country where the U.S. exercised de facto political control or (3) abuse in the course of abduction for trial in an American court. Bamaca falls into none of these categories.
As to the government’s violation of plaintiff’s familial rights, there are two lines of argument relied on by plaintiff. The first involves the extension to spouses of recognized parental rights to maintain their relationship with their children. The second principle is the constitutional right of family members to make certain private decisions as to intimate family affairs such as in the areas of procreation or the children’s education.
The Court first takes issue with plaintiff’s application of the first type of family protection. “Harbury's claim ... lies beyond Supreme Court precedent in not one but two respects: it concerns neither a parent‑child relationship nor purposeful interference with a familial relationship. ... We hold only that in view of Supreme Court precedent ..., we cannot extend a constitutional right to familial association to cases where, as here, the government has indirectly interfered with a spousal relationship.” 
The Court then summarily rejects plaintiff’s invocation of the second principle. Her familial association claim against the State Department and NSC defendants alleged that their failure to reveal information about Bamaca’s fate had violated her right to decide the best way to rescue her husband from torture during his life and, after his death, how to secure him a decent burial. “The broad general principle Harbury cites appears never to have been applied to a situation even remotely like hers. Nor does she explain why it should be. We therefore decline to extend the right in the manner she proposes.” [Id.]
Plaintiff fares better on her claim alleging the government’s denial of meaningful access to the courts, a right fundamental to a civilized society. “[She] alleges that they affirmatively deceived her into believing that they were actively seeking information about her husband. Instead of saying (as they could have) that they were unable to discuss Bamaca's situation, they sought to lull her into believing that they were working on her behalf, intending to prevent her from suspecting that the U.S. Government was actually involved in Bamaca's torture. One of their express objectives, Harbury alleges, was to prevent her from suing them. Viewed this way, and regardless of whether Defense and NSC officials had an affirmative duty to provide information to Harbury in the first place, the complaint states a clear case of denial of access to courts.” 
Although the lower court erred in dismissing plaintiff’s denial-of-access allegations, the Court of Appeals next turns to the government’s fall back reliance on qualified immunity from suit. To trigger immunity, “[t]he contours of the right must be sufficiently clear that a reasonable official would understand that what he is doing violates that right. This is not to say that an official action is protected by qualified immunity unless the very action in question has previously been held unlawful ... but it is to say that in the light of pre‑existing law the unlawfulness must be apparent.” 
Since plaintiff does not allege a breach of a duty to inform, “[t]he relevant inquiry in Harbury's case, then, is this: would an objectively reasonable official have thought it clearly unconstitutional to affirmatively mislead Harbury for the express purpose of preventing her from filing a lawsuit?” [Id.] The Court concludes that the answer is clearly yes.
“Not only have five of our sister circuits held that cover‑ups that conceal the existence of a cause of action (or make it difficult to prosecute one) infringe the constitutional right of access to courts, and not only are we unaware of any contrary decision, but we think it should be obvious to public officials that they may not affirmatively mislead citizens for the purpose of protecting themselves from suit. ... Qualified immunity was never intended to protect public officials who affirmatively mislead citizens for the purpose of protecting themselves from being held accountable in a court of law.” 
Instead, the immunity is only supposed to protect public officials from “insubstantial lawsuits” that would tend to distract them unduly from attending to the public’s business or to discourage able citizens from taking on public office.
Citation: Harbury v. Deutch, 233 F.3d 596 (D. C. Cir. 2000).
German High Court decides novel issue in holding that German law may impose criminal liability on foreign owners of internet websites who design their sites to stir up racial hatred within German society
On December 12, 2000, the German High Court (Bundesgerichtshof) issued a decision that concerns criminal liability for internet content obtained from foreign internet websites. In the case at bar, the Court affirms the criminal conviction of an Australian national for libel and for “inciting hatred among people” (Volksverhetzung) (see Section 130 paragraphs 1 and 3 of the German Criminal Code, StGB).
The defendant is Frederick Toben, the Director of the “Adelaides Institute” in Australia. Holding itself out as a research entity, the Institute published statements and articles with “revisionist” theories that doubt the Holocaust and describe it as an invention of “Jewish circles.”
Even though defendant has acted only outside Germany, the Court holds that he may be criminally liable for his actions under German criminal law if the “success necessary to constitute a crime” under Section 9 of the Criminal Code (StGB) took place in Germany. The crime of incitement of hatred among people requires that the action be “capable of disturbing the peace in Germany.” German criminal law, however, does not require proof that the peace was actually disturbed [i.e., such a crime is called an “abstract offense” (abstraktes Gefaehrdungsdelikt) in German law]. Until this decision, the High Court has never addressed the issue of whether such “abstract” offenses require a special “location of success.”
The Court rules that German criminal law may punish a foreign national if he publishes statements that constitute incitement of hatred among people on a foreign internet server that is accessible to German internet users within Germany. Such actions are considered “capable of disturbing the peace in Germany” and Germany is thus the “location of success” of the crime. The Court emphasizes that its decision applies only to the defendant’s own extremist statements which he made available on the internet.
Even though the Court found defendant liable for his statements, it reverses the conviction for a procedural defect. The criminal court had assigned defendant an attorney who himself had charges of inciting hatred among people pending against him. Therefore, defendant was not in a position to receive the effective assistance of counsel.
[Editors’ Note: Many radical groups have established internet websites with far-right and Nazi propaganda material. According to the German Interior Ministry, about 800 of those foreign websites direct their propaganda at Germans. Even though a person cannot publish such content in Germany, the foreign websites may enjoy local free speech protections such as from the First Amendment in the U.S.]
Citation: Bundesgerichtshof, Urteil vom 12. December 2000 — 1 StR 184/00; Washington Post, December 21, 2000, page A1.
European Court of Justice rules that jurisdictional provisions of Brussels Convention require plaintiffs domiciled outside European Union to comply with Convention rules when suing defendants domiciled in EU Member States
Universal General Insurance Company (UGIC), a Canadian insurance company with its registered office in Vancouver, is in liquidation. It brought a civil action in the French courts against Group Josi Reinsurance Company, S.A. (GJR), a Belgian reinsurance company with its registered office in Brussels, over an amount of money claimed by UGIC from GJR as a party to a reinsurance contract.
UGIC had instructed its broker, Euromepa, a French company, to obtain a reinsurance contract to take effect from April 1990 onward and dealing with a portfolio of comprehensive home-occupiers’ insurance policies centered in Canada. Euromepa offered GJR a shared-in reinsurance contract, representing that the “main reinsurers are Union Ruck with 24 percent and Agrippina Ruck with 20 percent.” In a fax dated April 6, 1990, GJR agreed to buy a 7.5 percent share in that contract.
It turned out that in March 1990, Union Ruck had already informed Euromepa that it intended to terminate its share after May 31, 1990. A few days later, Agrippina Ruck had told Euromepa that it would cut back its share to 10 percent, effective June 1 of that year. Both companies explained that their parent companies based in the United States had imposed certain changes in economic policy upon them, thus requiring their cutback.
In February 1991, Euromepa sent GJR a bill for Can. $ 54,679 for its share in the reinsurance transaction. The following month, GJR declined to pay, contending that false information had induced it to enter into the reinsurance contract. In July 1994, UGIC sued GJR in the Commercial Court of Nanterre, France.
GJR maintained that the Nanterre court lacked jurisdiction over the case since only the Tribunal de Commerce, Brussels, the situs of its registered office, had power to decide the case under the Brussels Convention. In July 1995, the Nanterre court upheld its jurisdiction. It reasoned that UGIC is a Canadian company without a place of business in the EU and thus the jurisdictional provisions of the Brussels Convention do not apply to it. The Court awarded judgment on the amount claimed by UGIC plus interest.
On appeal to the Cour d’Appel in Versailles, the Court decided in November 1998 to stay proceedings and to refer two issues to the ECJ for a preliminary ruling under Title II of The Convention of 27 September 1968 on Jurisdiction and the Enforcement of Judgments in Civil and Commercial Matters, as amended (the “Brussels Convention”).
These questions are: (1) may a defendant established in a Contracting State rely upon the specific rules on jurisdiction set out in the Brussels Convention against a plaintiff domiciled in Canada? and (2) do the Convention’s specific rules pertaining to insurance litigation in Articles 7 to 12a apply to matters dealing with reinsurance?
The Sixth Chamber of the ECJ first outlines the general jurisdictional scheme of the Convention. “It is only by way of derogation from [the] fundamental principle, that the courts of the Contracting State in which the defendant has its domicile or seat are to have jurisdiction, that the Convention provides, under the first paragraph of Article 3 thereof, for the cases, exhaustively listed in Sections 2 to 6 of Title II, in which a defendant domiciled or established in a Contracting State may, where the situation is covered by a rule of special jurisdiction, or must, where it is covered by a rule of exclusive jurisdiction or a prorogation of jurisdiction, be excluded from the jurisdiction of the courts of the State in which it is domiciled and sued in a court of another Contracting State.” [para. 36]
After analyzing those of its cases which have construed those rare Convention provisions keyed on the plaintiff’s domicile, the Court responds to Question 1. “In those circumstances, the answer to the first question must be that Title II of the Convention is in principle applicable where the defendant has its domicile or seat in a Contracting State, even if the plaintiff is domiciled in a non‑member country. It would be otherwise only in exceptional cases where an express provision of the Convention provides that the application of the rule of jurisdiction which it sets out is dependent on the plaintiff's domicile being in a Contracting State.” [para. 61]
The ECJ then addresses the second question. “First, according to settled case law, it is apparent from a consideration of the provisions of Section 3 of Title II of the Convention in the light of the documents leading to their enactment that, in affording the insured a wider range of jurisdiction than that available to the insurer and in excluding any possibility of a clause conferring jurisdiction for the benefit of the insurer, they reflect an underlying concern to protect the insured, who in most cases is faced with a predetermined contract the clauses of which are no longer negotiable and is the weaker party economically.” [para. 64]
This rationale, however, does not extend to reinsurance contracts. “The role of protecting the party deemed to be economically weaker and less experienced in legal matters than the other party to the contract which is fulfilled by those provisions, implies, however, that the application of the rules of special jurisdiction laid down to that end by the Convention should not be extended to persons for whom that protection is not justified.” [para. 65] No special protection seems to have been contemplated with respect to contracts between a reinsured and its reinsurer, both of whom are insurance professionals. In addition, Article 8 which provides for litigation at the domicile of the insured plaintiff is inapplicable here. “In the light of all the foregoing, the answer to the second question must be that the rules of special jurisdiction in matters relating to insurance set out in Articles 7 to 12a of the Convention do not cover disputes between a reinsurer and a reinsured in connection with a reinsurance contract.” [para. 76]
Citation: Group Josi Reinsurance Co. S.A. v. Universal General Ins. Co. (UGIC), Case C‑412/98,  Int. Lit. Proc. 549,  All E.R. (EC) 653 (European Court of Justice [6th Chamber]).
Supreme Court of Canada dismisses appeal by General Electric from lower court findings that it had infringed Canadian patents held by Whirlpool on its dual action clothes washing machines
Whirlpool Corporation during the 1970s came up with a clever dual action agitator for clothes washing machines. It used the lower part of the shaft for the customary back-and-forth oscillating activity but also put in an upper sleeve to serve as a helical auger. In the manner of a post-hole digger, the auger turned in a uniform direction, thus moving water and clothing down onto the oscillating vanes of the agitator below to bring about more consistent scrubbing.
Due to certain mechanical variations, Whirlpool was able to secure three Canadian patents. It charged in litigation that General Electric and its subsidiary Camco, Inc. (GE) had turned out an infringing mechanism in its washers which it was marketing mainly in the U.S. and but also to some extent in Canada. The first Whirlpool patent featured a drive shaft powering the dual agitator. Secondly, patent ‘803 used a clutch device instead of a drive shaft. The trial judge held that both of these patents provided for rigid vanes on the lower agitator. The third patent (‘734) also furnished a choice of drive modes. In one setup, the upper auger ran “intermittently” and in the other it operated continuously. The trial judge held that the ‘734 patent was valid and that GE’s devices were infringing it.
GE then took the case to the Federal Court of Appeal. There it focused on two challenges to the validity of the ‘734 patent. Its main point was that it amounted to impermissible “double-patenting.” By this it meant that Whirlpool’s intermittent drive claims were substantially the same as in the invention set out in the earlier claims of the ‘803 patent. In the alternative, GE maintained that the use of flexible vanes was an obvious and non-inventive twist to the rigid vanes specified in the ‘803 patent, thus did not justify patent protection. GE also denied that its devices were infringing the claims that involved a continuous drive.
The Federal Court of Appeal dismissed GE’s appeal and the latter obtained review in the Supreme Court of Canada. Agreeing with the lower court, the Supreme Court also dismisses the appeal.
In the Supreme Court’s view, the first step in patent litigation is for a court to construe the claims by “purposive construction” in the area of both validity and infringement issues. This approach requires the courts to identify, aided by the skilled reader, the specific descriptive words or phrases that the claim uses to limn the “essential” aspects of the invention. The courts then interpret these terms knowledgeably in the overall context of the claim. The goal is to read the claims in a manner that is reasonable and fair to both the patentee and to the public.
The Supreme Court concludes that the trial judge did not stray in deciding in light of the expert evidence that the claims of the ‘803 patent did not include flexible vanes. Patent specifications do not speak to grammarians, etymologists or to the man or woman in the street. Instead they communicate to skilled workers in a particular field able to understand the technical nature and description of the invention. Nothing in the record sets up a reason to reverse the trial judge’s ruling.
The claims set the boundaries to the monopoly. The difficulty, however, lies in determining how “identical” two sets of claims must be to warrant a holding of invalidity as to the second patent. The record supports the trial judge’s conclusion that the subject matter of the ‘734 patent was not the same as those in the ‘803 patent nor were the claims “identical or conterminous” with it.
A second branch of the ban is “obviousness” double patenting. This less literal and more elastic test bars the issuance of a second patent that contains claims not “patentably distinct” from the prior one.
Here, the Court believes that the trial judge did not err in spurning the evidence of GE’s expert. The level of practical understanding of dual action washing machines that was common knowledge in 1981 in this branch of the industry failed to furnish a sound basis for the expert’s opinions. Nothing in the record gainsays the trial judge’s bottom-line finding that GE had not come up with enough proof to overcome the presumption of validity in Section 45 of the Patent Act. The Supreme Court thus agrees with the Federal Court of Appeal and affirms the validity of Whirlpool’s ‘734 patent.
The Supreme Court also notes that GE failed to put on a witness to describe the drive method used by the GE washing machines. The lower courts had to rely mainly on a video that showed a rotating GE auger under a medium or light wash load. Skimpy as this was, the Court of Appeal could reasonably decide that the evidence provided an inference of continuous drive and rotation that infringed Whirlpool’s continuous drive claims. There was no infringement, however, of patent ‘803.
Citation: Whirlpool Corp. v. Camco Inc., File No. 27208, 2000 S.C.C. 67 (Can. Sup. Ct. Dec. 15).
German High Court issues decision outlining how software may be indirectly patented through use in patentable technology
On May 17, 1990, the petitioner filed a patent application with the German Patent Office (Patentamt) for a “Dialogue Analysis System for Natural Speech.” Based on a previous patent application submitted in Japan, the system uses an input system, a dictionary, and a grammar check to analyze the language input. The Patent Office rejected the application and the petitioner appealed. The Federal Patent Court (Bundespatentgericht) denied the patentability of the system on May 17, 1998 (BPatGE 40, 62 und Mitteilungen 1998, 473).
The German High Court (Bundesgerichtshof, BGH) agrees with the Patent Court that the system at issue cannot receive a patent because it is not based on a “technical achievement.” The system at issue is based on the word of linguists who have analyzed language, identified grammatical rules and put the latter into software form. Such activity is the application of data processing knowledge and does not necessarily contribute to the “technological” state of the art. For example, the system does not lead to new uses of data processing hardware.
Furthermore, under German and European Patent Law, only “technological inventions” can receive patent protection. The term “technology,” however, is subject to interpretation. It generally comprises commercially manufactured systems that use energy. For example, a particular computer or a particular configuration of a data processing system would fit within the notion of “technology.” In the same vein, a system designed in a particular way that uses especially configured software may constitute “technology.” What is significant here is that the High Court’s interpretation may eventually lead to patent protection for the software that is part of a particularly configured technology, even though the software by itself could not receive patent protection.
Citation: Bundesgerichtshof (BGH), Beschluss vom 11. Mai 2000, X ZB 15/98 - Bundespatentgericht - Softwarepatentierung.
Japan and U.S. agree on new measures regarding U.S. forces in Japan under Treaty of Mutual Cooperation and Security, providing inter alia for Japan’s payment of expenses for requested relocations of U.S. military facilities
On September 11, 2000, Japan and the U.S. signed an agreement regarding U.S. armed forces in Japan, pursuant to the U.S.-Japan Treaty of Mutual Cooperation and Security of January 19, 1960 [11 U.S.T. 1652, 373 U.N.T.S. 248], and their Agreement on U.S. facilities and armed forces in Japan of September 27, 1995.
The new Agreement determines that Japan will bear the wages for employees of the U.S. armed forces in Japan, as well as electricity, gas, and water supply for U.S. facilities. Japan will also cover all relocation expenses if it requests the U.S. to change any facilities. [The latter provision appears of special importance for Okinawa, where the presence of U.S. forces has created tension.] The new Agreement will enter into force on April 1, 2001, and remain in force until March 31, 2006.
Citation: Agreement between Japan and United States concerning New Special Measures relating to Article XXIV of Agreement under Article VI of Treaty of Mutual Cooperation and Security between Japan and United States of America, regarding Facilities and Areas and Status of United States Armed Forces in Japan (September 11, 2000), available along with related information on internet website of Japanese Ministry of Foreign Affairs “www.mofa.go.jp”.
In action by environmental organization to enforce provisions of Driftnet Fishing Act, Federal Circuit decides, as matter of first impression, that President and other executive officers are not immune from suit
The Humane Society of the United States and two other environmental organizations (jointly The Humane Society) filed suit in the Court of International Trade for a writ of mandamus to direct the U.S. President to impose sanctions on Italy for violating the Driftnet Fishing Act (16 U.S.C. Sections 1826-1826g (Supp. IV 1998)). [N.B. Driftnet fishing is the combination of gillnets for a length of more than one mile that drifts with the current. This kind of fishing indiscriminately catches all aquatic life, including fish, whales, dolphins, sea turtles and sea birds.] The Driftnet Act authorizes the U.S. to impose sanctions on foreign nations that use large-scale driftnet fishing on the high seas.
In this case, the U.S. and Italy held consultations on Italy’s driftnet fishing and the U.S. Secretary of Commerce certified in January 1997 that Italy had terminated the illegal practice. The Humane Society disagreed with the certification and contended that Italy was continuing to use driftnet fishing. It provided evidence of dozens of incidents that show Italy’s use of this system.
The Court of International Trade ordered the Secretary to again identify Italy as a nation for which there is reason to believe that its nationals or vessels are conducting driftnet fishing on the high seas (see Section 1826a(b)(1)(B)). The Humane Society appealed those parts of the decision not in its favor. The U.S. Court of Appeals for the Federal Circuit affirms.
An interesting issue of first impression arose in the course of the litigation. The Government argued that in an action under 28 U.S.C. Section 1581 [Court of International Trade, civil actions against the U.S. and its officers] to enforce the provisions of the Driftnet Fishing Act, the President and other executive officers are immune from suit under the doctrine of sovereign immunity.
The Court of Appeals, however, agrees with The Humane Society that case precedent and the legislative history of the Custom Courts Act of 1980 demonstrate that Section 1581 itself amounts to a waiver of sovereign immunity. “In sum: (1) Neither the President nor other executive officers are immune from suit under 28 U.S.C. § 1581 with regard to their compliance with the provisions of 16 U.S.C. § 1826; the grant of jurisdiction to the Court of International Trade under § 1581 carries with it a co-extensive waiver of sovereign immunity. (2) The statutory standard governing the President’s determination that consultations leading to an agreement with an identified nation have been ‘satisfactorily concluded’ gives the President broad discretion; it is not a standard that comes within the reach of a mandamus action.”
“(3) The determination in the form of a certification by the Secretary of Commerce that a nation has terminated the proscribed large-scale driftnet fishing is subject to judicial review under the statutory standard for review of such actions, focused on the actions taken by that nation under the negotiated agreement with the President. On the facts found by the trial court in this case, the Secretary’s determination did not violate the standard.” [Slip op. 39-40]
Citation: The Humane Society of the United States v. Clinton, No. 99-1360 (Fed. Cir. January 4, 2001).
WORLD TRADE ORGANIZATION
WTO Appellate Body reviews U.S.-EU wheat gluten dispute, finding that U.S. quota on wheat gluten imports did not square with several provisions of Agreement on Safeguards
The Appellate Body of the World Trade Organization (WTO) has reversed parts of a Dispute Settlement Report regarding the U.S. safeguard measures imposed on European wheat gluten. See 2000 International Law Update 127. Wheat gluten is used for high-fiber and multi-grain bread. A U.S. International Trade Commission (USITC) investigation led to a quota on European wheat gluten pursuant to Section 201 of the Trade Act of 1974 in response to a 1996-1997 surge in wheat gluten imports.
The WTO Panel Report circulated on July 31, 2000 found that the U.S. quota imposed on European wheat gluten is inconsistent with Articles 2.1 and 4 of the Agreement on Safeguards because the causation analysis was flawed and did not consider Canadian imports. The U.S. appealed, claiming among other things that the USITC’s “causation” analysis complies with Article 4.2 of the Agreement on Safeguards, that the U.S. properly excluded Canadian imports from the application of the safeguard measures.
In particular, the Appellate Body: (1) agrees with the Panel’s finding that the U.S. acted improperly under Article 4.2(a) of the Agreement on Safeguards by not evaluating the overall relationship between the protein content of wheat and the price of wheat gluten as a “relevant factor” under Article 4.2(a); (2) reverses the Panel’s interpretation of Article 4.2(b) of the Agreement on Safeguards that increased imports “alone,” “in and of themselves,” or “per se” must be capable of causing “serious injury”; (3) agrees with the Panel’s finding that the U.S. acted inconsistently with Articles 2.1 and 4.2 of the Agreement on Safeguards by excluding imports from Canada from the application of the safeguard measures; (4) upholds the Panel’s findings that the U.S. acted inconsistently with Articles 8.1, 12.1(a) and (b), as well as 12.3 of the Agreement on Safeguards. The Appellate Body recommends that the U.S. bring its safeguard measure into compliance with this report.
Citation: United States — Definitive safeguard measures on imports of wheat gluten from European Communities (DS/166/AB/R) (December 22, 2000). [Report is available on WTO website “www.wto.org”; U.S. Trade Representative press release 00-95 (December 22, 2000).]
WORLD TRADE ORGANIZATION
WTO Dispute Settlement Panel issues report in U.S.-Korea dispute over alleged dumping of cheap steel on U.S. market, concluding that U.S. had acted inconsistently with Anti-Dumping Agreement in several respects
A WTO Dispute Settlement Panel has issued a report in the dispute “United States — Anti-dumping measures on stainless steel plate in coils and stainless steel sheet and strip from Korea.” Korea had brought the complaint on July 30, 1999, arguing that several determinations of the U.S. Department of Commerce and the resulting anti-dumping duty orders of 16.26 percent on Korean steel plates and steel sheets were inconsistent with WTO trading rules (N.B. the Anti-Dumping Duty Order was published in 64 Federal Register 27756).
The Panel sided mostly with Korea. It held, in particular that: (1) as for “local sales,” the U.S. acted had inconsistently with Article 2.4.1 of the Anti-Dumping Agreement in the steel sheet investigation by performing a currency conversion that was not required; (2) with respect to the “treatment of unpaid sales,” the U.S. acted inconsistently with the introduction to Article 2.4 of the Anti-Dumping Agreement by making allowances for sales through unaffiliated importers which were not permissible allowances for differences affecting price comparability; and (3) the U.S.’ use of “multiple averaging” periods in its investigations was inconsistent with the requirement of Article 2.4.2 of the Anti-Dumping Agreement to compare “weighted average normal value with a weighed average of all comparable export transactions.”
The Panel therefore recommends that the U.S. bring its anti-dumping duties on Korean steel plates and sheets into compliance with the Anti-Dumping Agreements. Without giving specific instructions on how the U.S. should proceed, the Panel merely suggests that revocation of the current anti-dumping duties would be a possible solution, noting that there may be other options.
Citation: United States — Anti-dumping measures on stainless steel plate in coils and stainless steel sheet and strip from Korea (DS/179/R) (December 22, 2000). Report is available on WTO website “www.wto.org.”
As of January 1, 2001, changes in taxes and tariffs affect enterprises doing business in Russia. Several recent changes in Russian taxes and tariffs affect companies doing business in or with the Russian Federation (RF). (1) According to a report of WorldTrade Executive (www.wtexec.com) circulated by the U.S. Department of Commerce, the city of Moscow has exercised its right under Article 8 of the RF Law No. 118-FZ of August 5, 2000, On the Entry into Force of Part II of the Tax Code, and introduced an additional profits tax of 5 percent. According to the new Law No. 33 of the City of Moscow of October 18, 2000, the new profits tax beginning January 1, 2001, will be 32 percent for financial institutions and insurance companies, and 24 percent for other enterprises (including foreign entities). (2) According to another report of the WorldTrade Executive, with an Order dated October 31, 2000, the Russian Ministry of Finance has approved the Chart of Accounts for Business Activity and the Instruction on the Application of the Chart of Accounts, proceeding with its accounting reform program based on international accounting standards. The accounting changes will became effective for companies (except credit and budget institutions) on January 1, 2001. Companies must adopt a new Chart of Accounts during the year 2001 which may affect how they account for assets, liabilities, and their transactions. (3) Based on Government Resolution No. 866, new tariff rates took effect on January 1, 2001. These changes affect the applicable duties on thousands of import items. It standardizes and unifies the rates to four base rates of 5, 10, 15 and 20 percent. It also lowers the maximum duty to 20 percent, except for a few items including foreign cars and poultry for which the duty is 25 percent. The tariff rates are available in Russian on the internet website of the Russian State Customs Committee “www.gtk.ru”. Citation: Information disseminated by BISNIS section of the U.S. Department of Commerce, website “www.bisnis.doc.gov”, Phone: (202) 482-2022.
U.S. and Israel sign Air Service Agreement to permit code sharing. On January 10, 2001, U.S. Special Negotiator Thomas J. White and Israeli Civil Aviation Administration Director General initialed a Protocol to the 1950 Air Transport Agreement between the two countries. The purpose is to increase air traffic between the two countries by code sharing and other cooperative marketing arrangements. - Code sharing permits an airline to use the code of another airline to service a market without operating its own aircraft in that market. Citation: U.S. Department of State Media Note, January 11, 2001.
U.S. President pardons fugitive billionaire. On Saturday, January 20, hours before his term expired, President Clinton pardoned billionaire Marc Rich who was indicted, but never tried, for evading $48,000,000 in federal taxes, for 65 counts of running a large oil price-rigging operation, and for illegally buying oil from Iran during the 1979 hostage crisis. Rich fled the U.S. in 1983 for Switzerland. That nation refused to extradite him (apparently based on the absence of dual criminality) and also seized many documents located in Switzerland that were under subpoena by the U.S. government. Three appellate opinions dealing with some of these issues are: In the Matter of a Grand Jury Subpoena Direct to Marc Rich & Co., 707 F.2d 663 (2nd Cir. 1983); In re Grand Jury Subpoena Duces Tecum dated September 15, 1983, 731 F.2d 1032 (2nd Cir. 1984); In re Marc Rich & Co., 736 F.2d 864 (2nd Cir. 1984). Reportedly, Rich’s companies later entered agreed to pay the U.S. $150,000,000 and to forfeit $21,000,000 in fines to settle the charges. Rich is a citizen of Israel but may have renounced his American citizenship. Citation: The Wall Street Journal, January 23, 2001, page C1; The Wall Street Journal, January 24, 2001, page A3.
U.S. and EU renew Educational Cooperation Agreement, including Fulbright Program. On December 18, 2000, during the U.S.-EU Summit, Secretary of State Madeleine K. Albright, EU External Affairs Commissioner Christopher Patten, and French Foreign Minister Hubert Vedrine signed the U.S.-EU “Program of Cooperation in Higher Education and Vocational Education and Training.” It continues for five years the cooperation between U.S. and European educational institutions, including the Fulbright exchange program. Citation: U.S. Department of State Media Note, December 20, 2000. [For further information contact Dr. Sam Westgate at Bureau of Educational and Cultural Affairs, Office of Policy and Evaluation, Phone: (202) 619-5305].
U.S. treasury issues regulations for conversion to EURO. The U.S. Department of the Treasury has issued final income tax regulations regarding U.S. taxpayers who invest, operate, or otherwise conduct business in European countries where the EURO is becoming the currency. The regulations instruct businesses on how to make adjustments for their EURO-based transactions, and the tax effect of holding EURO-denominated financial instruments. Citation: 66 Federal Register 2215 (January 11, 2001).
Outgoing Clinton administration signs treaty that would create permanent International Criminal Court. On December 31, 2000, the U.S. signed the international treaty to create a permanent International Court to try charges of genocide, war crimes and other crimes against humanity (also referred to as the “Rome Statute”). For the Treaty to be effective for the U.S., two-thirds of the Senate must vote to consent (which seems unlikely in the near future) and the President has to ratify it. The Rome Conference of the United Nations Diplomatic Conference of Plenipotentiaries on the Establishment of an International Criminal Court drafted the Treaty during June and July of 1998. As of January 31, 2001, 139 nations have signed the treaty, but only 27 have ratified it. The Treaty will enter into force on the first day of the month following deposit of the 60th instrument of ratification. Citation: U.S. Department of State Daily Briefing Index, Tuesday, January 2, 2001; Washington Post, January 1, 2001, page A1. [Further information, including text of treaty, is available on internet website of International Criminal Court “www.un.org/law/icc”.]
EU saddles more U.S. states with restrictions on horse imports. Based on reports of equine “West Nile” fever in certain East Coast U.S. states, the EU has enlarged to six the list of states from which there are special controls on horse exports to the EU. The affected states now include New York, New Jersey, Massachusetts, Connecticut, Rhode Island, and Pennsylvania. Citation: 2000 O.J. of the European Communities (L 290) 36, 17 November 2000.
EU moves forward on acceptance of electronic signatures in e-commerce and electronic data transfer. To further implement the acceptance of electronic signatures, the EU Commission has published a Decision that spells out the criteria for selecting institutions authorized to approve secure electronic signature-creation devices. The EU had specified the criteria for such devices themselves with Directive 1999/93/EC on electronic signatures. Citation: Commission Decision 2000/709/EC, 2000 O.J. of European Communities (L 289) 42, 16 November 2000.