The China Law Blog has published part one of an expected series of posts setting out exactly what foreign companies should do (and not do) to protect their intellectual property in China.

The author, Dan Harris of Harris Bricken, tells the story of a prospective client who sought help because a Chinese manufacturer he was working with on a product started selling a new product that happened to have the same features and functions as the product the American developer had submitted to the manufacturer.

Harris’ firm told the prospective client not much could be done because the nondisclosure agreement with the manufacturer was worthless in China. And U.S. patents won’t provide much practical protection, either.

The firm’s lawyers explained that the developer would have been better off if he had an NNN agreement —non-use, non-disclosure, and non-circumvention — that would be enforceable in a Chinese court with jurisdiction over the Chinese defendant. .

Read the article.

Photo by Kārlis Dambrāns

Microsoft President and Chief Legal Officer Brad Smith says the way the U.S. government is treating Huawei is un-American, reports Bloomberg Businessweek.

He said China’s leading maker of networking equipment and mobile phones should be allowed to buy U.S. technology, including software from his company, according to Businessweek’s Dina Bass.

“U.S. President Donald Trump has said Huawei, run by a former Chinese army technologist, is a national security threat, and his Department of Commerce has added the company to an export blacklist scheduled to take full effect in November,” Bass writes.

Read the Bloomberg Businessweek article.

Contract damages can be a great thing in a China contract, but only if done right, according to Dan Harris, writing in the Harris Bricken China Law Blog.

He explains that the term “contract damages” refers to a contract provision setting out the damages for breach. In the standard commercial contracts his firm writes for clients, the agreements usually include a specific damage amount for certain (but not all) violations of the contract terms.

“The only constant is that we try to make the amount as high as we can, while at the same time erring on the side of keeping it low enough so that it will actually work to scare the Chinese company into not breaching the contract,” Harris writes.

Read the article.

Dan Harris, a founder of Harris Bricken and lead writer of the China Law Blog, discusses why he sometimes has to explain to  companies why he never does “template” manufacturing agreements anywhere in the world and why they should not want such an agreement.

The blog post includes part of an email a lawyer in his firm wrote to an international manufacturer, illustrating why an off-the-shelf manufacturing cannot work and makes no sense, even in a rush situation.

Read the article.

The United States Supreme Court has agreed to resolve a key issue in international arbitration agreements: whether the New York Convention on the Recognition and Enforcement of Foreign Arbitral Awards permits a non-signatory to an arbitration agreement to compel arbitration against a signatory to arbitration based on the doctrine of equitable estoppel.

A post on the Harris Bricken China Law Blog points out that the question has split the circuit courts, meaning that now the answer to the question depends on where in the United States the dispute is being litigated.

Read the article.

U.S. contractors should proceed with caution when seeking to expand their footprint to an international stage, especially in developing countries where the local infrastructure may not promote a sustainable, stable environment, or a sustainable business model for the contractor, warns Rachael E. Stack in a website post for Faegre Baker Daniels.

But by considering three factors, contractors can mitigate exposure to the various risks involved in an international project.

Stack discusses the elements of contract form and language, governing law, and impact on the local community.

Read the article.

International lawyers are often pushed by clients from common law countries (even more often by their in-house lawyers) to include common broilerplate contract provisions even in countries where they make no sense, writes Dan Harris for Harris Bricken’s China Law Blog.

He explains: “These people/lawyers are simply uncomfortable with contracts that do not include such terms. When we tell them that such provisions are not needed, their response is often, ‘well, it can’t hurt.’ But it can hurt.”

He discusses such Western-style contract staples as representations and warranties, effective date, counterparts, complete agreement, no oral modifications, good faith, headings and titles, third-party beneficiaries, and severability.

The article explains the potential drawbacks of using these clauses in contracts outside common law countries.

Read the article.

Kilpatrick Townsend & Stockton has compiled a structured guide to outsourcing contracts in the United States. The guide is available on Lexology.com.

The guide covers the various types of contract forms for outsourcing arrangements, due diligence, customer base, business requirements, HR issues, third-party contracts, duration and renewal, supplier selection, service specifications, charging methods, warranties and indemnities, and ending the agreement.

Authors of the article are James Steinberg, Joshua M. Benson, Farah F. Cook, Joshua S. Ganz, Julie C. Grundman, Maha Khalaj, Lance McCord, Michelle Tyde, Amanda M. Witt and Vita Zeltser.

Read the article.

The historically large rejection of Prime Minister Theresa May’s Brexit proposal is creating new uncertainty for companies doing business in the United Kingdom.

“Questions about the terms of Brexit is already affecting currency exchange rates and the confidence of business leaders and long-range investment plans,” says Tony Magee, a former Chancery Barrister practicing in the U.K., and now a trial attorney in Dallas. “The risk for U.S. companies is that if Brexit happens without a clear long-term deal on customs rules and tariffs, that could inhibit trade with the U.K. and encourage U.S. companies to deal more with the European Union.”

Magee notes that while it is too early to predict the overall Brexit process and timing, the situation is very dynamic and volatile with the Prime Minister now required to come back to the House of Commons within three days to outline her “Plan B” proposal.

“It is possible that Brexit could be delayed by mutual consent and that the government could hold a second referendum to ask the electorate to vote on whether they still want to leave the E.U. But it is unlikely that a second referendum could be scheduled before the March 29 Brexit deadline. Publicly, May’s cabinet is not currently willing to hold a second referendum, but there are reports of differences of opinion in the cabinet on that score. Things could develop and change very quickly.”

New York State has taken steps to smooth the often rough road for resolving international contract disputes, and parties are finding the new procedures comparatively easy to follow, according to post on the website of Daniel Kron.

He explains that “when international contracts have no forum selection clause, New York can be the only — or best — place to obtain personal jurisdiction. At the same time, given the relatively broad views of personal jurisdiction found in New York, foreign individuals may find they are taken to court in New York despite their desires.”

Read the article.

A recent California case may force companies doing business with foreign entities to reconsider—and maybe rewrite—their contracts, points out Sheppard, Mullin, Richter & Hampton in its Corporate & Securities Law Blog.

In Rockefeller Tech. Invs. (Asia) VII v. Changzhou Sinotype Tech. Co., No. B272170, the California Court of Appeal held that parties may not contract around the formal service requirements of the Convention on the Service Abroad of Judicial and Extrajudicial Documents, commonly referred to as the Hague Service Convention.

Authors Hwan Kim and Neil Popovic write that the decision could have profound implications for international business.

“The Rockefeller decision arguably makes it impossible to require foreign companies from some of the largest economies including China, Japan, Germany, U.K., India, Korea, Russia and Mexico, to show up in a California court based on notice provided by mail, courier (FedEx), or email even if the parties agreed to such forms of notice in their contract,” the authors warn. “This will have profound consequences for companies with global supply chains such as Apple and GM, for investment funds with foreign investors, for engineering and construction companies that procure materials and handle projects around the world, such as AECOM, and potentially for any company that imports or exports goods to or from the United States.”

Read the article.

Thomas McVey, partner and chair of Williams Mullen’s International Practice Group, will lead a complimentary webinar on the latest International Traffic In Arms Regulations (ITAR) developments for government contracts executives.

The event will be Wednesday, Dec. 13, 2017, at 1 p.m. Eastern time.

ITAR is an important area of regulation for government contractors, the firm says on its website. This includes firms in the defense, technical services, information technology, cyber-security, military training and DOD-funded R&D fields. These requirements often apply even if a company is not engaged in any exporting activities – often just performing activities in the U.S. can trigger ITAR obligations. The stakes are high – violations can result in criminal penalties of up to 20 years imprisonment.

The program will provide executives a clear overview of the law and an update on important recent developments.

Who Should Attend: CEOs, CFOs, COOs, in-house counsel, compliance personnel, operations directors and contracts administrators

Topic outline:
• How do I know if my company is subject to ITAR?
• Is my company required to register under ITAR
• Requirements for ITAR-controlled technical data and software
• Controls on defense services and Technical Assistance Agreements
• Requirements for dealing with foreign national employees and other foreign individuals
• Obligations of second- and third-tier suppliers; subcontractors and vendors
• Are we subject to ITAR if we only perform services for U.S. government agencies?
• Contracts with foreign military organizations
• How to develop an effective ITAR compliance program
• Requirements under DFARS §225.79 and 252.225-7048
• Recent data security requirements
• What to do if you discover a violation

Time has been allotted for a brief Q&A for the speakers to address questions from the audience.

Register for the webinar.

Kevin Perry and Joanne Elieli of of Cooley offer some insight for American general counsel on the drafting of international arbitration clauses, covering preliminary considerations and specific drafting issues.

The article is posted in the Cooley blog Cooley M&A.

The topics they discuss in the article include: consider likely nature of the dispute, should the clause cover all disputes that could arise?, should you include a dispute escalation clause? could any dispute include more than two parties? will there be any enforcement issues? choice of law issues (the contract and the arbitration), institutional or ad hoc arbitration, confidentiality, the rules to be used, the number of arbitrators, the seat/place of arbitration, and the language of the arbitration.

Read the article.

Practical Law will present a webinar discussing best practices for Section 337 patent litigation and current hot topics at the International Trade Commission (ITC), such as standard essential patents and the Commission’s jurisdiction over electronic data importations.

The 75-minute event will be Tuesday, May 10, 1-2:25 p.m. EDT.

Commencing a patent infringement investigation at the International ITC under Section 337 of the Tariff Act of 1930 is a powerful weapon in a patent owner’s arsenal, Practical Law says on its website. Section 337 patent infringement investigations offer several advantages over patent litigation in federal district court, including swift resolution of disputes and broad availability of injunctive relief. However, Section 337 investigations also have potential risks, including substantial litigation costs and discovery requirements.

The webinar will feature (i) Charles Schill, a partner at Steptoe & Johnson LLP who has handled more than 130 unfair trade practice Section 337 investigations, and (ii) former ITC Administrative Law Judge Robert Rogers, who held 20 hearings during his tenure resulting in 17 Final Initial Decisions.

A short Q&A session will follow.

Presenters:
Charles F. Schill, Partner, Steptoe & Johnson: Charles focuses his practice on the intersection of international trade and intellectual property law. He has handled more than 130 unfair trade practice cases under Section 337 of the Tariff Act at the ITC, and has won or favorably settled almost all of them. He previously served as a Senior Staff Attorney in the Office of Legal Services and the Office of General Counsel at the ITC.

Robert K. Rogers, Jr., Attorney at Law: An attorney for 39 years, Mr. Rogers was an Administrative Law Judge for 19 years, including 5 years as an ALJ at the U.S. International Trade Commission. He was assigned more than 55 cases, held 20 hearings, issued 17 Final Initial Decisions, 2 TEO Decisions, and concluded one case by summary determination. Mr. Rogers has extensive experience in litigation related to patents and trade secrets, and his experience spans a breadth of industries, issues, and forums, which provides him the ability to effectively assist litigants in reaching settlement of patent and trade secret matters.

Register for the webinar.