Friday, January 30, 2009

Globalizing Extra-jurisdictional Anti-trust Laws

Globalizing Extra-jurisdictional Anti-trust Laws

Are extra-jurisdictional antitrust laws likely to gain prominence or lose it in the whole wide world or "global village?"

Since mid-December 2008, I have been generally researching food security issues in Korea. Its a huge topic so I don't mean to bore you with the whole whale-shark but it means I have approached the topic with a wide net relating to macro-economic policies, farm management, innovation, supply chain improvements, delivery systems and corporate food distribution policies trends and disparities. There is a wealth of research relating to extra-jurisdictionality in anti-trust laws which may be of particularly important relevance here in the near future. So I am submitting a couple of sweetly tasting portions directly related to this topic of globalizing anti-trust laws.

For example John C. Begin, Jean-Christophe Bureau and Park Sung Joon illustrate in a short and sweet piece, "The Cost of Food Self-Sufficiency and Agricultural Protection in South Korea " (2002) that high tariffs, production prices and government supported purchases continue to protect local producers from import price competition which translates into above global market consumer prices for average Koreans. These obstacles to local fair food price competition are conversely compared to Korea's numerous export manufacturing opportunities and bilateral trade agreements. They contend that poorer consumers indeed often representing a high proportion of the elderly in an aging population (whose problem is described as 20 times worse than that found in Japan) suffer under such conditions and is inconsistent with "access to food for all" food security provisions as described by The Food and Agricultural Organization.

While Korea has made some progress under minimum access provisions of the WTO Uruguay Round Provisions (since 2002) it continues to shelter many local food sector specific producers at the expense of its poorest families and communities. In a Confucian society respect for the elderly is supposed to be a paramount and overarching tenet. But cost to consumers far exceeds gains for producers according to this study especially for those elderly envisioning minimum retirement ages of perhaps 80 in the near to distant future.

Chapter 3. National Policies on Ageing in Korea (Sung-Jae Choi, IDRC Canada)

Without provisions which lower food costs many local conditions appear monopolistic and might face greater challenges under US anti-trust or restraint of trade acts in the near future with possible ratification of the Doha Round as a large proportion of Korea's food imports have their origin in the US. At the same time Chinese competitor products have recently been seen to be replacing US farm produce in comparative threat to trade growth studies on nearly all food sector imports. So local laws and preferred practices may be seen to exist in direct opposition to the implementation of extra-jurisdictional antitrust laws -especially those which might originate in the US.

Bruce Owen of Stanford University Law School explains well in "Imported Antitrust" (2004) a review of Competition Policy for Small Market Economies by Michal S. Gal that challenges of extra-jurisdictional applications are comprised of three main problems.

The first is that U.S. antitrust law or enforcement standards are considered inappropriate in economies with dissimilar business and economic environments. Korea would be one of them.

The second is that antitrust analysis or enforcement needs to be focused on specific markets which are not always comprised of nations, national economies or jurisdictional divisions. He explains the challenge in applying contradictory or conflicting laws which differentiate and shape the context of nations which question the progressive net benefits in a global context of implementing those laws which see few examples of parallel legal regulatory trade enforcements on a global scale other than in the US/EU or perhaps Canada.

Finally he states that individual economic players need to be the focus of increased good corporate governance as their effects on economic performance and global trade make a greater impact on progressive reforms than attempting to implement laws or extra-jurisdictional legal wranglings on a global scale which do not align with local, national political or historical cultural value systems. These same issues plague progress in the growth of free trade policies either in Asia or elsewhere as compared to traditional developing nation mercantilistic systems. So in short, Owen is saying forget the laws, focus on corporations, stakeholder accountability, transparency and good governance.

In Korea, as elsewhere, such progress is often made one leader at a time which never seems to be fast enough for the US. Extra-jurisdictional legal provisions perhaps scare a lot of the world's businesses and may raise the repeated arguments of anti-globalisation supporters that protectionism is better for everyone.

John C. Begin, Jean-Christophe Bureau and Park Sung Joon, "The Cost of Food Self-Sufficiency and Agricultural Protection in South Korea " (2002) Paper provided by European Association of Agricultural Economists in its series 2002 International Congress, August 28-31, 2002, Zaragoza, Spain with number 24879.

Bruce M. Owen, "Imported Antitrust," Stanford Institute for Economic Policy Research (SIEPR); Stanford University Public Policy Program (March 2004) Stanford Law and Economics Olin Working Paper No. 281.

Exclusivity versus Restraint of Trade

Exclusivity versus Restraint of Trade

The difference between exclusivity and restraint of trade: Exclusivity relates most closely to contractual trade agreements between agents or distributors of exports which authorize sales territories in countries and geographic areas, sole or exclusive representation, and restrictions regarding sales of competitive products which might represent conflict of interest on the part of the importer or seller. In an ideal, freely competitive market such exclusivity clauses are in the best interests of the exporter who must select agents or distributors to actively market and sell their products.

The rules and laws regulating agency and distributor agreements differ from country to country. So without sufficient review general contractual terms of exclusivity themselves may violate local national competition and anti-trust laws. This concept of exclusivity may be perceived as restrictive if it involves excessive tied selling, or significant decreases in local competition which lead to trade monopolies. The US Sherman Antitrust Act governs over cases of restraint of trade or interstate and international commerce where contracts, combinations or conspiracies of trade lead to exclusionary, monopolistic or anti-competitive acts.

For example these practices are described as restraint of trade: illegal price fixing (either raising or lowering prices in agreement between competitors), group boycotts (for political or religious reasons), market territory divisions (such as quotas), production limitation or supply controls agreements, customer allocation, divisions of fields of production, clauses on patent-tying above and beyond rights obtained through patent grants or patent permissions based on obligations to purchase materials from agreed buyers. Other US acts such as The Clayton Act, The US Federal Trade Commission Act, The Wilson Tariff Act and The Anti-Dumping Act also contain clauses ruling unfair competitive practices, price discrimination, or unfair trade restraints.

Clauses providing an exclusive arrangement between trading partners may become a form of unfair competition subject to legal challenge if they are found to perpetuate restraint of trade.

An example of a legitimate exclusivity clause.

From Jagoe's Export Sales and Marketing Manual (2007):

"Representative is authorized to sell all products manufactured and/or marketed by the Seller, hereafter referred to in this agreement as "Products," in (name of country), hereafter referred to in this Agreement as "Territory." Unless authorized in writing by the Seller, Representative further agrees not to promote, advertise, market or sell Products in Territory that are directly competitive with Seller's products. " (From Figure 5.1 Sample of Distributor Agreement).

A similar example where an exclusivity arrangement would constitute restraint of trade and therefore be clearly illegal.

"Representative is required to sell all products manufactured and/or marketed by the Seller, hereafter referred to in this agreement as "Products," in (name of country), and only to (companies named) hereafter referred to in this Agreement as "Territory." As authorized in writing by the Seller, Representative further agrees to fix prices on products in agreement with (companies listed) and not to promote, advertise, market or sell Products in Territory that are directly competitive with Seller's or (companies listed) products. In addition Seller is prohibited from making sales to purchasers of competitors products." (Hypothetical Restraint of Trade Clause)

Thursday, January 29, 2009


Official No: 0368854
Place Built: Bremerhaven, Germany
Builder: A/G Weser Werk Seebeck
Year Built: 1969
Vehicles: 115
Passengers: 480-650
Crew: 60-65
Overall Length: 125 m
Breadth: 19.2 m
Gross Tons: 8,806
Service Speed: 20 knots
Horsepower: 15,600

Are you familiar with The Queen of the North? At total losses of CAD 70,000,000 described as the largest marine insurance pay out in Canadian history.

"Two people, Shirley Rosette and Gerald Foisy of 100 Mile House, apparently failed to reach the safety of the lifeboats and perished along with the ship."

"Passengers sue BC Ferries for alleged negligence" (CBC) March 28, 2006

"Marine Insurance Association of British Columbia: January 24, 2007"

The Sinking of the Queen of the North

TSB Simulation of Queen of the North accident

2X CIF Value Insurance for Total Losses

2X CIF Value Insurance for Total Losses

A decides to arrange insurance under a special cargo policy for goods she is shipping overseas by freighter: This is within A's rights as it is negotiated separately from shipment and is issued with an insurance certificate. This could also represent a single or infrequently shipped cargo.

She estimates the value of the goods at approximately $X: Value of goods is usually insured to at least 110% of CIF value with excess included as compensation for lost profits.

A is aware of the various transportation risks, and decides to take a policy with coverage of $2X: This may be because the products are extremely valuable and/or difficult to replace through manufacture or lost profits which may not be redeemed under a general open policy. However this may be excessive and may demonstrate overpayment or taking out the wrong insurance.

B, her insurer, accepts the terms, receives A's payment premium, and extends coverage up to that amount: As the insurer has agreed with terms and received payments and while the coverage appears sound it far exceeds generally accepted 110% of CIF value of goods.

The entire shipment is lost at sea: It must be determined whether the policy includes "free of particular average" which limits losses to particular circumstances or "general average" terms where the cargo may have been tossed overboard to save the vessel or whether the cargo is covered under terms of "all risk."

A seeks reimbursement: The total loss at sea may exempt A from any contracts for the sale of goods which include a froce majeure clause of which "lost at sea" would eligible.

How much does her insurer owe her? Her insurer may try to back-peddle to 110% CIF value and offer partial refund of the difference in premiums between goods value x and insured goods value of 2x especially if the insurer covered a large proportion of loss claims on this particular vessel. However it appears the insurer must pay the bill as long as Institute Clauses for Lloyds Ship and Goods policies include terms such as:

Actual Total Loss: "An actual total loss occurs when (1) the insured property is completely destroyed or (2) the Assured is irretrievably deprived of the insured property or (3) cargo changes in character so that it is no longer the thing that was insured or (4) a ship is posted "missing" at Lloyd's, in which case both the ship and its cargo are deemed to be an actual total loss. "(IMIM)

Total Loss: "This can be actual total loss or constructive total loss." (IMIM)

If the insurer refuses to pay the 2x CIF value of the goods lost or negotiated agreement cannot be reached then A should take her resources and case to a reputable marine insurance lawyer to investigate the validity of the insurance contract. Notifying the insurance agency of this choice of action may grease the wheels to a complete settlement of claim.

"International Marine Insurance Glossary," International Marine Insurance Managers: Insurances Effected At Lloyd's of London.

A great slide show on marine insurance losses: "MARINE & CARGO INSURANCE: From an international viewpoint, " by Aldo Salcioli (2003).

Oranges, Oral Contracts and the S.S. Ardennes

Oranges, Oral Contracts and the S.S. Ardennes

S.S. Ardennes
1951 blt 1945 J. Boel & Fils, Temse (1146)
1018 n 3195 dwt
301.4 x 44.3 x 18.5 ft
C 4 cyl by Borsig A.G., Berlin
1 deck + shelter deck
ordered: 8.3.43
built for Germany (Hansa A ship) intended owner:Schiffahrt Treuhand GmbH, Hamburg
9.1944 seized by Belgium

In Re Ardennes [1951] 1 K.B. 55, a Spanish exporter, Mr. Tornero, entered into an oral agreement with the defendants, owners of the S.S. Ardennes, to ship 3,000 cases of oranges from Cartagena, Columbia, direct to London, England: Discussions upon the S.S. Ardennes case are widely available on the internet with various interpretations regarding the plausibility of an oral contract agreement.

The ship arrived at Cartagena and the goods were loaded on board. A B/L was issued indicating that the goods had been received in good order: This is the point of the exporter which was supported by Lord Goddard that the bill of lading was not the contract itself but comprised the oral agreement which preceded it.

The B/L also stated (in the small print) that the ship was at liberty to call upon any other ports for any other purpose: This fine print would not have been known to the exporter as he neither saw nor signed the bill of lading prior to the departure of his produce and according to Lord Goddard which provided no time for the exporter to demand his goods back once the discrepancy between the oral terms and the B/L were known.

Unbeknownst to Mr. Tornero, the ship had previously picked up other cargo destined for other destinations, which the defendants commenced to deliver: This would have been clear if the ship owners had made the exporter aware prior to departure of the clause regarding calls at other ports prior to London.

Instead of sailing straight for London, the ship first went to Antwerp, where 374 cases of the oranges were mistakenly off-loaded: This occured due to the apparent misloading of the oranges which was described as impossible even for the carrier to offload prior to arrival at Antwerp.

As a result of the delay, the ship arrived in London several days after a competitor’s oranges flooded the London marketplace, causing a substantial drop in the price of oranges: The trial notes indicate that the carrier had sufficient experience in the seasonality and arrrival pricing requirements of the oranges to havee prior knowledge that making the oral agreement would be impossible and that significant damages would be brought upon the seller.

In addition, the import duty on oranges was raised several days before the ship arrived, resulting in further costs to Mr. Tornero: Lord Goddard also states, "The shippers would not have put these goods on the Ardennes unless assured of delivery by November 30."

He sued for his lost profit, the extra duty paid, and the lost crates of oranges: It would be within his rights pertaining to the oral contract which assured direct delivery from Cartagena to London prior to November 30th.

The defendant ship owner claimed reliance on the terms set out in the B/L: Lord Goddard trounced these claims as they were in direct contradiction to the oral contract.

Did the court agree? No the court did not agree. It awarded the damages to Mr. Tornero.

Ship's Rail Liabilities Under FOB Clause

From Countryman & McDaniels Peerless "Cargo Law Website"

Ship's Rail Liabilities Under FOB Clause

The seller, Mr. White, sued a ship owner, Liberian Lines Inc., for damage caused to the goods by the negligence of the ship owner’s employees: The question of damages is not the issue. They were clearly damaged goods. The question relates to which party is responsible seller, carrier or buyer (or their insurances) for payment of the damages and whether negligence can be found on the part of the ship owner's employees. INCOTERMS exist for this reason to determine title and risk transfer liabilities.

As the goods were being loaded onto the ship, but before passing over the ship’s rail, they were dropped and damaged. The sale contract specified “FOB London”: Under the terms "FOB London" the seller is responsible for warehousing at point of origin, warehouse labour charges, export packing, loading costs, inland freight charges, loading cargo on the ocean carrier, but not ocean insurance charges. Therefore as the damage occurred prior to passing over the ship's rail it would be illogical to sue the shipowner, Liberian Lines Inc. as the shipowner's responsibility for the goods has not taken place prior to damages. In what ways could the shipowners be found liable of negligence if the damages occur prior to passing over the rail?

In this type of contract, the buyer engages a freight forwarder to book space and to procure a B/L; the seller discharges his duty by putting the goods on board, getting the mate’s receipt and handing the receipt to the buyer’s freight forwarder to enable him to obtain a B/L: Seeing as the goods were damaged prior to crossing the ship's rail one must examine the terms of liability and risk assigned to the freight-forwarder, the dock stevedores and loading company who under the buyer's instructions have taken responsibility for the goods especially if the exporter has transferred title and risk at the point of loading cargo on the ocean carrier. Insurance coverage should also be investigated to determine who is liable for damages; the freight forwarder, the dock stevedores or port loading company. This would require complete review of all documents from the shipper or exporter to the dock receipt, to the bill of lading, insurance coverage and certificates with review of the mate's receipt which should detail nature of damages as "claused" or "unclean." The freight forwarder handling all of these details of proper documentation and insurance should clearly demonstrate coverage for damages and liability clauses.

In, "Is The Ship's Rail Really Significant?" by Dr. Bruno Zeller, the INCOTERMS of FOB are expressed as often misused where FCA would more clearly determine liabilities in the cases of loading damages. Zeller asks, "who bears the responsibility if the goods sway back over the ‘ship’s rail’ and fall on the wharf?" He states that FOB generally holds the seller/exporter liable for delivering clean and cleared goods to a specific port and loading onto a ship. He also states that the seller bears the loss if the goods fall on the wharf or in the water as they are being loaded while conversely the buyer must cover the loss if the goods fall upon the deck or upon any point over the "ship’s rails."

The ship owner, Liberian Lines Inc., tried to rely on the B/L which incorporated the Hamburg Rules and thus limited liability: This would be correct especially if the evidence proves that the damages resulted in cargo falling to the wharf/dock or water. Evidence suggests that the seller should have better selected FCA as an INCOTERM to clearly delineate transfer of liability and risk at the point of the ship's rail. Zeller confirms," the seller in the FOB transaction remains liable until this point, which means that if the parties incorrectly use FOB instead of FCA the seller remains at risk even after the goods have been handed over to the first carrier. " In addition, prior to crossing the rail the goods are not considered in the carrier's possession under terms of FOB.

The seller, Mr. White, claimed that since it was not a party to the B/L, the ship owner could not rely on the limitation: Mr. White agreed to the FOB clause and the selection of freight forwarder by the buyer therefore he apparently remains liable for damages even after the point of crossing the rail according to Dr. Zeller.

Who won?: It would appear Mr. White cannot win as he has signed an FOB clause, "instead of FCA – the seller remains liable until the goods cross the ‘ship’s rail’." (Zeller, 2005)

Tuesday, January 27, 2009

Strict Documentary Compliance

Strict Documentary Compliance

L/C negotiated for “standard white granulated sugar”, while the bill of lading described the sugar as “granulated white sugar, Java No. 24, direct polarization, 98.5”. Can the bank be forced to pay?

This appears to correlate to the case of National City Bank versus Seattle National Bank (Sup. Ct. Wash., 1922) in "Fundamentals of International Business Transactions" by Robert Bland, 2000 where differences in product description terms resulted in the L/C being found to be non-conforming at that time. It however appears villainous nonetheless.

This minor description error would classify strict documentary compliance as a discrepancy possibly resulting from improper or insufficient documentation or clerical error in the transfer of product information. In that case, the discrepancy might be correctable if made in advance of expiry dates, or
exporter may request issuing bank to pay on L/C notwithstanding discrepancy, buyer may be required to pay on documents collection basis, or draft may be negotiated under reserve.

Banks with long-term relationships between both the buyer and seller would not permit a small discrepancy like this from ruining the relationship. Both buyer and seller would need to agree to these new terms as well.

Disreputable and unethical one time buyers and shady bankers would jump at the chance to pull this off. Sometimes a buyer is only a slot in a doorway in an alley behind an empty dumpster. At the same time the questionable bank may be a shop front in a factory zone with shady snaggle-tooth characters manning a phone and fax machine.

Otherwise according to International Payments Second Addition, by Edward J. Hinkleman neither the issuing bank nor (if it is confirmed) the confirming bank need pay out.

However this would be detrimental to the banks reputations, if indeed, as it appears these two product descriptions are being used to describe the self-same product. A buyer walked away with a seller's goods without paying for it. It would be extremely unlikely that either of the banks or the buyer could walk away without sticky implications similar to stealing a man's horse circa 1922.

A vindictive Javanese might suddenly appear out of fragrant harbour and start messing with black spots for Model T Fords in US parking lots.

At the same time Canadian exporters have been complaining that importers in China have been using documentary compliance more forcefully lately than in the past. At the heart of the credit letters issue are triple-fold cost increases in the last few months. Reputable now means pay through the nose. Financial reliability of issuing or confirming banks may not be the only motivator. It is possibly a convenient time to make those losses known based on non-conformance in an issue to force buyer concessions such as partial advance payments for cash starved companies seeing 20-30% declines in orders over the last three months. Is it coincidence that BRIC appears flush with cash?

"Fundamentals of International Business Transactions," Brand (2000)

Exporter Payments Contrast and Comparison

Exporter Payments Contrast and Comparison: Cash (Prepayment) and Open Account

Cash (Prepayment) Advantages: Zero commercial risk from buyer insolvency, contractual dispute or breach or transaction uncertainty. Buyer may be unknown or in a grey area in its financial stability which is immaterial. Quick and cleared capital either for reinvestment or divestment. Cash pays the bills. May encourage high volume sales if discounts are generous.

Cash (Prepayment) Inconveniences: Buyer assumes all commercial risk therefore may deter importers particularly at present. Encourages one-off deals and little incentives to develop reliable buyers or clients. Reinforces the possible myth that price outweighs quality or relationship. Lack of customer loyalty may see shift in overall product or service demand due to competitive interests.

Open Account Advantages: Buyer is a reliable, consistent and well known customer. Reduces delays in delivery and order processing, provides historical cycles data to allow seasonal trends and predictions to minimize inventory and indicates low risk of insolvency, minimal to no contract disputes and low level of uncertainty. Attracts reputable firms and develops strong partner-like business relationships.

Open Account Inconveniences: International accounts have higher risk of complexity, buyer insolvency, contractual dispute/breach or transaction uncertainty. A good customer can suddenly start missing payments. If half of your customers start doing that over a period of three months your collections and liquidity will drop and your company may become cash starved. Plenty of businesses qualify for these inconveniences at this time in their rapid and increasing demise.

WTO worried over protectionist measures due to global crisis

D Ravi Kanth / Geneva January 27, 2009 (Business Standard)

World Trade Organization (WTO) Director General Pascal Lamy today presented a “work in progress” report on the dangers of tit-for-tat protectionist measures due to the worsening global trade conditions.

Commentary: Considering its the only global trade body we have at present, which makes it the devil we all know, I am glad to hear that the WTO will begin active updating of trade reports on the crisis.

Even as rich countries are providing tens of billions of dollars to their ailing industries, developing countries without deep pockets have been forced to raise their tariff barriers. “Protectionism could also provoke retaliatory action by others that would compound the damage caused,” he suggested.

Commentary: They do so because protectionism is possibly a natural human group response to threat and if there is no where to run barriers go up.

The Indian government’s move to raise tariffs on some steel products as well as fresh restrictions on imports of some steel products figured in the report along with other rescue packages and state-aid provided by different members.

Commentary: It might have made sense to ensure this didn't happen during the G8 talks with BRIC nations a few months ago. Concessions might have been made more easily at that time.

“The shortage of liquidity and disproportionate aversion to risk” has resulted in a shortfall of trade finance to the tune of $25 billion in November last year. Worse still, the cost of trade credit has been tripling in some emerging economies, he noted.

Commentary: This access to liquidity was reserved for US investment banks and car companies (with perhaps the exception of Freddie Mac and Fannie Mae). Unfortunately according to the system of capitalism which Americans have claimed in the past was best, a free trade world should ensure only the survival of the fittest companies and banks.

The confidential 14-page report submitted to members, a copy of which is with Business Standard, catalogues the range of “trade-restricting” or “trade-distorting” measures adopted by members in the face of uncontrollable financial tsunami that began on the shores of the industrialised countries last year.

Commentary: This is the kind of information which reveals the duality of information. "If there's danger in the language gentlemen, I suggest no further use of the two way radio." Revealing trade restrictions trends in the last three months might appear to be a good idea to ensure everyone is on the same page. However limiting access may be an attempt to prevent further trade restrictions.

While real trade growth is estimated at around 4 per cent last year, the global export volumes would be -2.1 per cent in 2009 based on the World Bank estimates. “Weaker economic growth” will have far-reaching ramifications for developing countries given their heavy dependence on global trade.

That is a net fall of 6.1% ~ wiping out the annual 2007 GDP growth of 71% of APEC member states anyway. By bailing out local investment banks and car companies in the US most of Asia appears left to its own devices on how to perceive free trade policies in terms of US priorities which appear to be taking care of their own and themselves first.

Several measures underlying the stimulus packages, such as “state aid” or “subsidy”, are bound to have negative slipover effects on other markets or introduce distortions to competition among financial institutions, the report says.

Commentary: Who is the pot calling the kettle black here? What other forms of remediation can be expected to be made? Can developing nations be expected to troop up to IMF and be administered US focused reforms when the US was responsible for the crisis to begin with? There shouldn't be a debate about this. National sovereignty issues may be the real problem for the US. Money may not be able to talk especially the US dollar ~ for much longer.

It is time for a massive US banking industry "mea culpa." Common sense might suggest the US Treasury be the preferred lender of choice to any foreign reserve banks willing to borrow from it (or if they are even allowed to do that) and on the same standards and principles as for Lehmans and relatives.

Or make the IMF what it was intended to be. A self-administered emergency loans agency with no strings attached. Then this problem might go away a little more quickly and with less pain and suffering. Or as according to somebody (who wrote it a number of years ago), as the US has special and unlimited drawing rights to IMF loans at interest rates it sets for itself, use the "carte blanche." Set those interest rates for yourself at zero and start a bidding war on interest rates to approved administrators of subsidiary loans to virtually any nation who asks for them with few to no strings attached. The puppet master has no clothes.

Besides, the ongoing turmoil in banks and financial markets has directly impacted international trade “through the tightening of liquidity, which affects the supply of trade credit by the main international banks”.

Commentary: This coincides with cheap commodities prices which should stimulate trade rather than suppress it. I can't help feeling that the credit tightening is in collusion with sellers at a convenient time.

Due to the worsening conditions in the flow of credit among banks, international banks are not able to supply as much credit as demanded by traders at affordable prices, says Lamy.

Commentary: Perhaps another reason, gentlemen, why the IMF should step forward with a blueprint which allows it to function as was originally intended.

Asia Pacific Airlines Brace for Turbulent Year

Asia Pacific Airlines Brace for Turbulent Year
(Cargonews Asia)

The Association of Asia Pacific Airlines (AAPA) today [Friday] released preliminary traffic figures for the full year 2008, and it makes for grim reading.

AAPA international air cargo traffic for 2008, expressed in freight tonne kilometres (FTKs), suffered a significant decline, ending the year 6.1% lower than the record set in the previous year. Member airlines reduced cargo capacity accordingly, but the average cargo load factor for the year still fell by one percentage point to 65.6%.

Commenting on the 2008 results, Andrew Herdman, AAPA director general said airlines were battered by skyrocketing oil prices followed by rapidly weakening demand as the effects of the global economic downturn ricocheted around the world.

"The situation in the air cargo market was dire, as demand for air cargo collapsed in the second half of the year, registering increasingly steep monthly declines," he said. "December volumes were down by a shocking -24% compared to the same month a year ago."

Herdman added that with no sign of any respite amid the global economic downturn, Asia Pacific airlines are braced for another extremely difficult year.

Commentary: 24% down appears better than the 26.66% prediction for containerships. I can't imagine how shocked they would be regarding oil prices as is not hedging jet fuel prices and stockpiling a common practice among Asian Airlines? Would it not be better for them to operate at significant losses and offer Ryan Air type rates to maintain altitude for the unforseeable future? Has no one at the AAPA heard of scenarios planning? I would really like a $99 dollars return flight to Cebu from Inchon right about now to wash away some of the grim direness.

Monday, January 26, 2009

Idle Containership Fleet Grows to 255 Vessels - 675,000 TEU

Idle Containership Fleet Grows to 255 Vessels - 675,000 TEU
(CIFFA e-Bulletin – January 22, 2009)

Shipping News - The level of idle containerships has risen to historic highs, with 675,000 TEU, or 5.5 per cent of the global fleet now idle, according to AXS-Alphaliner. This figure translates into around 255 container vessels by Alphaliner's last count to January 19, up from around 550,000 TEU two weeks earlier. Of these, 148 ships are from the charter ship market. And the worst appears yet to be over as Alphaliner forecasts this figure will reach 750,000 TEU in early February, with six per cent of the global fleet standing idle. It noted that the planned closures of CSAV's Asia-North Europe service, MOL and "K" Line's FE-WCSA loop 2 and MOL's ZAX service will add to the number of idle vessels, along with a few ships still sailing on services that were suspended in recent few weeks once they complete their port rotation.

Alphaliner estimates that if 100,000 TEU is scrapped this year, the global fleet would still grow by 14 per cent, up from 13.2 per cent last year. "However, this growth figure does not take into account the 750,000 TEU capacity expected to lay idle in early February. The market will have to absorb this non-working fleet, on top of new buildings. Adding this fleet overhang to the new buildings, the actual fleet growth - based on today's working fleet- will then reach 20," the Alphaliner report said, forecasting the situation is unlikely to improve until spring 2010 at the earliest. Adding to the container shipping industry's woes is the low price of oil, which is fluctuating between US$40 and $50 per barrel. However, if crude oil prices were to fall below $40 per barrel and bunker fuel to less than $200, it would make the practice of slow steaming no longer cost effective.

Commentary: This is a 19% increase in the number of idled container ships in only two weeks with a predicted increase to 26.66% of all container ships on earth by early February. If container ships represented US workers at roughly 25% unemployed after the crash of 1929 what can we expect for the global logistics and supply chain economy in 2009 and 2010? My concern is how many of the smaller contractors and supply chains can survive up to 24 months of zero business? How much of the recovery process will be only more severe due to fewer smaller competitive carriers when the rebound in trade occurs? Will shipping and transport be able to quickly meet demand or will freight rates suddenly sky-rocket again if most of the smaller carriers and contractors are downsized to such an extent or permanently out of business? Not to be gloomy but here is what happened to a lot of military cargo ships following the Korean War. Conversely all those empty containers could add up to very affordable housing for people who may actually not be able to afford anything else.

Eclipse 2009 SVP

Happy Year of the Ox!



Doctors' Law: If you don't feel well, make an appointment to go to the doctor, by the time you get there you'll feel better. Don't make an appointment and you'll stay sick.

Wilson's Law of Commercial Marketing Strategy: As soon as you find a product that you really like, they will stop making it.

Oliver's Law of Public Speaking: A closed mouth gathers no feet.

Brown's Law of Physical Appearance: If the clothes fit, they're ugly and outdated.

Law of Logical Argument: Anything is possible if you don't know what you are talking about.

Law of Physical Surfaces: The chances of an open-faced jelly sandwich landing face down on a floor covering are directly correlated to the newness and cost of the carpet/rug.

Murphy's Law of Lockers: If there are only two people in a locker room, they will have adjacent lockers.

The Starbucks Law: As soon as you sit down to a cup of hot coffee, your boss will ask you to do something which will last until the coffee is cold.

Law of the Theater: The people whose seats are farthest from the aisle arrive last.

Law of Biomechanics: The severity of the itch is proportional to the difficulty of the reach.

Law of the Result: When you try to prove to someone that a machine won't work, it will.

Law of Close Encounters: The probability of meeting someone you know increases dramatically when you are with someone you don't want to be seen with.

Law of the Bathtub Ring: When the body is fully immersed in water, the telephone will ring.

Variation Law: If you change lines (or traffic lanes), the one you were in will always move faster than the one you are in now.

Law of the Alibi: If you tell the boss you were late for work because you had a flat tire, the very next morning you will have a flat tire.

Law of Random Numbers: If you dial a wrong number , you will never get a busy signal and someone will always answer.

Law of Probability: The probability of being watched is directly proportional to the stupidity of your act.

Law of Gravity: Any tool, when dropped, will roll to the least accessible corner.

Law of Mechanical Repair: After your hands become coated with grease, your nose will begin to itch and you'll have to urinate.

Sunday, January 25, 2009

Case of Missing Brushes

Case of Missing Brushes

An artist ordered important supplies from a company website. She then received an email from the company which read: “Confirmation notice – your confirmation number is 727.”

What is the legal impact of the confirmation notice?

D.H. Mowat can be assured that general principles are applied to contracts over the internet. For example, "click agreements" in both Canada and US are deemed as valid and legal forms of consent. However on selecting purchases from websites orders or "click to agree" purchases are actually considered "invitation to treat" which is described in our book and also by Lloyd Duhaime, Barrister, Solicitor, Attorney and Lawyer (and Notary Public) from Chitty on Contracts (2004):

"As a general rule, a display of goods at a fixed price in a shop window or on a shelf in a self-service store is an invitation to treat and not an offer. An offer may be made by a prospective buyer. At this stage, the retailer may accept or reject that offer.

Similar principles would seem to apply where a supplier of goods or services indicates their availability on a website: that is, the offer would seem to come from the customer (eg. when he clicks the appropriate button) and it is then open to the supplier to accept or reject that offer."

"Invitation to Treat" (

Confirmation notice may not constitute acceptance of offer and may imply that the website is not legally bound to complete the transaction. In such a circumstance the conclusion of the transaction may come about when the seller sends a formal receipt or notice of transaction which serves as implication of acceptance. Processing receipts on credit cards also act as proof of acceptance. This would explain some of the gaps in electronic data exchange for many internet sales websites relating inventory control, 24 order processing and delivery capabilities. If they are not finely or well in tune the possibility exists that a confirmation of order may be missed and/or a contract acceptance as in debit of the credit card without delivery of product could occur from time to time.

If D.W. Mowat does not receive a further transaction compeltion notice it would be best to send an inquiry or call the company to enquire regarding her order. Many speciality suppliers are running small scale or home businesses and might not have the seamless or fail-safe ordering technology of larger e-businesses.

Is the Snoop in PIPEDA Poop?

Is the Snoop in PIPEDA Poop?

Mr. Snoop employs Mr. Innocent. Mr. Snoop downloaded information from Mr. Innocent’s computer. Mr. Snoop suspected Mr. Innocent of using the company email system to send out personal communications (during work hours). Mr. Innocent perceives this as an invasion of privacy and decides to sue Mr. Snoop under PIPEDA.

Well, PIPEDA or the Personal Information Protection and Electronic Documents Act is only enforceable in Canada. So if Mr. Snoop and Mr. Innocent are doing business elsewhere the lawsuit would be quite pointless. Canada is sort of naked in regard to personal privacy protection regarding invasion of employee privacy by businesses however the legislation itself appears to be designed to protect the privacy of the public or customers of companies and not their employees. That said it would be tempting for businesses to invade employee privacy with impunity especially if thats what managers think motivates their workers to increase productivity. It looks more like Chuckie harassing the gerbils.

However it doesn't look like Mr. Innocent really has a case.

A search of the Privacy Commisson of Canada's, "Overview of Privacy Legislation" sugggests that while the PIPEDA Act of 2004 does apply to all commercial activities, it does not extend to employment unless it is a federal (or provincial according to CIPPIC) work, undertaking or business and further explains that provincial laws govern the privacy of employee information.

So, if Mr. Innocent is working for a federal agency like EDC perhaps he may have a case under PIPEDA legislation. Otherwise he may need to rely upon other provincial laws regarding electronic privacy of employees which may prove absent.

At the same time, The Privacy Commissioner makes a few recommendations to employers in Canada. First, that they should always inform their employees of what personal information may be collected, used, and/or disclosed, either in advance of employment or perhaps under terms of contract or inter-office memoranda. Also that employees should be clearly informed as to policies regarding Web, e-mail, or telephone use. Random or continuous surveillance should be revealed to the employees. It would be difficult to work under such conditions. However I do get the impression that Canadians generally trust each other less than perhaps they did ten or twenty years ago. Chalk it up to Americanisation?

The Privacy Commissioner also states, "ensure that information they collect for one purpose isn't used for an unrelated purpose without the employee's consent." Finally the Commissioner agitates that while current laws may not require it, employers should provide access to all personal information held about employees, so that they may qualify or contest the accuracy or completeness of that information.

These would appear to be considerate or common sense approaches for Mr. Snoop to take on to ensure a smooth managerial relationship with Mr. Innocent among others of his descent. If personal information is being used by Mr. Snoop for commercial or illicit/illegitimate purposes above and beyond monitoring personal use of the internet during working hours then perhaps Mr. Innocent could pursue a claim under PIPEDA but again this might be difficult to prove.

A collation of provincial privacy legislation is well represented at The University of Ottawa in "The Canadian Internet Policy and Public Interest Clinic" (CIPPIC) which provides an entire selection of links to various judicial acts across the country but admits, "personal information of private sector workers is not uniformly covered by privacy legislation across Canada. As of March 2007, only those companies that are federally regulated or provincially regulated in Alberta, B.C., or Quebec, are subject to data protection laws in Canada."

So unless Mr. Innocent works for the federal government and/or provincial government or lives and works in Alberta, BC or Quebec there are no clear recourses for him to rely upon if he sues Mr. Snoop and PIPEDA would not be moot for the snoop. A better policy for Mr. Innocent would be to refrain from any internet use at work which might compromise his employment or privacy. Whistle while you work.

As for Korea, I do not write anything on my office computer that I would not mind my employer reading. As I do not have a home computer I frequent my office at any or all hours mixing personal emails, telephone calls, internet use, etc. with no real qualms about disturbing any policies whatever they might be. I am a bird in the attic. The caretaker routinely leaves a light on for me on the stairs. I certainly hope my employers occasionally read my homework.

Mr. X and the Cybersquatters

Mr. X and the Cybersquatters

Mr. X as owner of the U.S. trademark “SuperSpuds” noticed that the domain name was taken by another person. Mr. X believes his trademark rights ensure his acquisition of the domain name. He begins a trademark lawsuit against the owner of the domain name.

Domain names are valuable commodities regulated by "The Internet Corporation for Assigned Names and Numbers" (ICANN). In order for Mr. X to acquire the domain name, or in other words, deregister the name from the current holder and transfer to himself, he or his lawyers need to prove three points completely under the Uniform Domain Name Resolution Policy ("UDRP").

1. The domain name is similar in a confusing way to his trademarked company name.

As the domain name and his company name are virtually identical there exists confusing similarity which would possibly support his case.

2. Domain has been registered and used in bad faith.

Mr. X would need to instruct his lawyers to investigate this point as there is as of yet no evidence of bad faith. Evidence of bad faith would be found if registration of the domain name was made with the intention of re-selling the domain name for a profit, business disruption of competitors or misrepresentation of the website as being affiliated with the trademarked company of the complainant.

3. Defendant has no legitimate business interests in the domain name.

Mr. X would need to instruct his lawyers to investigate this point as there is as of yet no evidence of legitimate or illegitimate business. The current holder of this domain name may have legitimate rights such as bona fide intention to conduct sales of goods or services, defendant is closely associated with the domain name even without holding a trade mark on it, or the use of the website does not intend commercial gain at the expense of the trade mark name holder and is conducting non-commercial or fair use of the domain name.

Advice for Mr. X: While the first point of confusing similarity may be the easiest to confirm or prove the following two points, evidence of bad faith usage or cyber-squatting and legitimacy of business interests require more consideration. If the second proves true it might be more economical to simply make an out of court offer to purchase the domain name (unless the price is exorbident). In the second case if it is found that the non-trademarked holder is conducting non-commercial or fair use of the domain name it will be impossible to ensure deregistration and transfer to Mr. X.

A cybersquatter is in the business of selling domain names to rightful holders and enters the internet pantheon some where in the realms of spam advertisers and phising scams. It would be very unlikely that a defendant proven holding the domain name in bad faith could alternatively prove legitimacy in terms of fair use. This would be the UDRP's provision for relief against cyber-squatters.

Cybersquatters have specific goals relating to pay-offs from larger trademarked companies. While the costs of litigation for domain name deregistration are described as at a minimum of USD $5,000 through the UDRP the full pursuit of a domain name by a trade marked company may be cheaper than the cybersquatter's asking price. If Mr. X proceeds with cautious negotiations with the cybersquatter directly prior to litigation perhaps a greater cost savings may be made. Even in the case of a legitimate non-commercial or fair use of the domain name a simple request might suffice particuarly if the domain holder is reasonable the deregistration process may occur simply out of courtesy without the threat of litigation. By this means civility is the first option for Mr. X.

Jumping into a lawsuit without first investigating rather than mediation or simply making requests for transfer of the domain title would be a foolish and costly first move for Mr. X. Why pay to fight for something you might get for free or next to nothing if you ask nicely?

Thoughts On Adult Learning: Search for the Self

Thoughts On Adult Learning: Search for the Self

What I have learned has just been accumulated through diffusive reading mostly and for a lot of people that does not equate with experience measures of knowledge accumulation. Jung's theories of subliminal perceptions impact on the silent self as well as the conscious self. My silent self resides in my reading and writing. These cannot be nurtured without doing both. But connecting disparate information and points of view is way more interesting than grading exams. There are harvests of scenarios for the future out there which suggest the current youth cultures and students of the world share more in common in terms of technology and their connectivity to it than ever before. I find that hopeful. The planet is starving for cooperation. Clashes of cultures are where solutions and concessions need to be grown and learned. Like planting trees on bare rock.

Korea: My Working Habitat

I started out here in 1996 teaching in a small south coastal city at a cram school for two years. Then I moved closer to Pusan for another two years teaching at a medical university. Then I made a move for The UAE for three years teaching at a former US SAM missle site which had been turned into the Abu Dhabi Navy's equivalent to ROTC navigation officers training college. That is when I started looking for more learning and Dr. Stephanie Jones was manning the UOW booth at Dubai Education Expo in 2003 and assured me that a UOW MIB would pay for itself. She was completely right. My accounting professor called me, "camel boy."

Single: But Looking!

I'm as happy as a single guy can be! The dating pool is not large but I am moving closer to nesting stage - the habitat is concrete jungle but the motivators are the same - I just met a young teacher and I hope things grow warmer. If she is a dream I want to remain in hibernation. I plan to stay here where I am now - a second tier private university owned by a New Age Eastern Religion (a Korean version of Buddhism/Reincarnation Worship) until they tell me to get out -which could be any day. However I always have a comfortable escape route.

It took three years of nearly continuous and targeted job searching anywhere to find this one where I least expected it and by accident. I was willing to leave then for Bangladesh to teach part-time at The Liberal Arts University of Dhaka but Korea kept me. I've just worked here in Korea and The UAE.

But my serious offers and inquiries over the last six years have included:

Head of Beginner English Unit: Management and Development Institute of Singapore.

Manager of International Student Advisement: The University of North Carolina Greensboro.

Domestic Marketing Director: EF English First (Saudi Arabia).

Business Development Associate (Joint Venture in Seoul): Qatar Gas Company.

English Language and Literature, Morals and Ethics Teacher: Singapore Ministry of Education.

Air-traffic controller instructor in Iraq: TELIC Corporation.

Head of Economics and International Business in a private school: Brunei Darasallam.

International Program Manager: Fortune Five Company in Rüsselsheim, Germany.

Social Scientist with Human Terrain System (BAE Systems)

HR Management with undisclosed banks in either Hartford, Connecticut or Rhode Island

I stumbled a lot in Canada and I had to make a conscious choice. Play hard scrabble in one of our urban metropoli or choose to live in nations where the social contract may be more traditionally based on public order (peace?) and a tolerance of expatriates along with enough holidays for studying. I have a few stalwart friends in these diverse pursuits, mentors and supporters and a fan club of students. I'd say my parents and family are still my best friends. We moved around NS a bit. Most of it feels like home. However the study of cross cultural behaviour in business is a strong pull towards a subject which has also become something like home and lets the world feel a lot like home too. An Algerian contractor once told me, "We make our fortunes far from our homes."

I haven't heard of Jeannette Vos until today but I agree with principles of accelerated learning - it works for some - I rushed my masters through nine months of full-time on campus learning instead of twelve with permission from the department mostly to save money on cost of living expenses but it definitely impacted my ability to consume research materials at some sort of accelerated rate. Also in realizing how to find what I was looking for and anticipating hunches became a real treat for me. They wished me luck and told me it was a heavy load. It was.

I was having lots of wild dreams too and intense headaches on occasion which I attributed to my brain attempting to grasp something new and forging new webs. I think there is some sort of anticipatory process which allows humans to find what we need to find to consume learning similar to selective filtering in advertising. We see what we want or need to see to survive and grow. It is amazing and the concept of self-realisation is high on my list of research motivations.

I come home to Nova Scotia once every 1.5 years or so. I miss the community there but I don't miss the working or economic environment or political complacency. My parents and brother remain there. As New Brunswick and PEI are chock a block full of family. And various clumps of friends and a sister in Kingston Ontario.

Amazing what we share with strangers! What are you reading these days?

The Path I Have Made

The Path I Have Made

The path I have made...I carry a pruning saw to avoid scaring off the wildlife! I got bored in Abu Dhabi and an enterprising PhD recommended Wollongong. They jumped 75places into the top 200 a couple of years ago confirming my choice - they gave me more than they took - that's the way I feel about learning courses.

And it really makes me feel I am right here/there with my students in the act of continuous improvement. I ask for their best work. These courses over the last three years are all online however the more I learn about mobile learning the more I believe we are not far off from ubiqutous computing which self materializes through laser beams out of handheld portable devices.

"Educause: Mobile Learning Initiative"

"Straight out of Star Trek?"

"We might all get to be Dilbert?"

The courses I have taken over the last three years shored up my Masters in International Business completed in Dubai and Wollongong Australia - an industrial but beautiful city about two hours south of Sydney Australia with about twenty beaches. They are building an innovation campus and represent one of Australia's best government-business-enterprise-university institutions. I wish Canada had the same commitment to educational infrastructure improvement. Also my current employers let me start teaching global negotiation to senior students following these courses.

"University of Wollongong"

These Cornell & Notre Dame certificates are completely online with books, DVDs and realtime chat sessions. I consider them highly and the credits are completely approved as continuing education. Executive education is intended for working professionals. Is anyone going to try tell me that these courses lack quality?

Supply Chain Management is the big nexus in logistics and lead time delivery systems and it is the current battle ground in terms of economic fronts for a lot of businesses and delivery services which are currently suffering from time sting (my own term) electronic data entry systems which need innovative new solutions - the last twenty years not much has changed in bar coding technology. Productivity improvements need to come from wireless self-identifying systems. But change management is challenging and interesting.

"Top Nine Supply Chain Challenges in 2009 (Industry Week – David Blanchard)"

The challenge for supply chain is that just in time is suddenly about 40% down in services globally at present. These are the companies that will need to downsize more quickly than any others. Supply chain managers are a lot like product managers who seek out buyers and sellers and partners to map out the least costly methods of delivery to shave costs on unit sales. So I have been reading a lot about this because I was approached by an APEC Project Leader to act as Senior National Consultant in Korea on research into supply chain reforms and recommendations which could increase food security and reduce food prices for consumers here which is a worry all over Asia at this time. Even if the proposal falls through the last month and a half has provided lots of fodder for thought.

I looked at Harvard's prospectus over the last couple of years they have moved slowly in offering certificates entirely online and as of yet still combine some on the ground in the classroom learning.

Wharton has an interesting consortium on business english teaching certification which has a summer term residency.

Couch-surfing, I haven't heard of that yet. ROK- Republic of Korea - explains my penchant for distance coursework! Anybody interested in my couch or spare bedroom?

Friday, January 23, 2009

Nova Scotia: Woodland Owner Conferences 2009

One of the little guys I don't like to scare away.

Woodland Owner Conferences will be held in all 3 regions
of Nova Scotia this spring.

Venues and dates are as indicated here below:

March 7th , 2009, Digby Regional High school, Digby,
Digby County.

March 28th , 2009, Havre Boucher Community Centre,
Havre Boucher.

April 04th , 2009, Natural Resources Education Centre,
Middle Musquodoboit, Halifax County.

The conferences are organized by the Nova Scotia Department of Natural Resources, Nova Forest Alliance, and Regional Development Authorities. The conferences
will focus on woodland management issues, and resources that can help you manage your land in a sustainable way. For more information or to register: please call
toll-free: 1-866 477 2494 or register at

Stewardship and Outreach Section
Department of Natural Resources
P.O. Box 698 Halifax, NS B3J 2T9
Phone: (902) 424 5444
Toll Free: 1 866 226 7577
Fax: (902) 424 7735

Nova Scotia Department of Natural Resources: chainsaw use and safety course

One of the other fellas who appreciates pruning saws

The Nova Scotia Department of Natural Resources will
host a chainsaw use and safety course in the Eastern,
Western and Central regions in January and February.

March 14, 2009, Northshore Fire Hall, Ballantynes
Cove, Antigonish, from 9:00am to 3:00 pm.

February 07th ,Milton Canoe and Camera Club,
Liverpool, from 9:00 am to 3:00 pm.

February 28th, Goffs Fire Hal, Goffs, Halifax Regional
Municipality, from 9:00 am to 3:00 pm.

If you are interested in attending one of these courses
please contact your local DNR office or Simon
Mutabazi at the Stewardship and Outreach Section of
DNR., Halifax ( 1-866- 226- 7577).

Trademark Registration Denials

Likely reason why trademark registration would be denied for the following:

Our text describes grounds upon which a trade mark would not be suitable for registration.First, if it is the name or surname of person living or dead within the last thirty years. Second, if it is "clearly descriptive" or "deceptively misdescriptive" of quality or use or character in either of the two official languages. Third, if it is already in use in describing a product in other languages.

A wants to register the name of his new floor cleaner - Once-A-Week - as a trademark.

This might infringe upon the terms of "clearly descriptive" or "deceptively misdescriptive" of quality or use or character of the floor cleaner. As in, this cleaner may not fit the required floor cleaning standards of health and hygiene in most Canadian food service industries or commercial kitchens. It may misrepresent the concept of cleanliness and lead buyers to assume that cleaning the floors once a week is sufficient.

B is awaiting determination on her trademark application for KOHI (pronounced ko hee) for coffee beans.

This may very well be already used to describe a product in a third language most likely in Japan. It is related to an ice coffee product in Japan.

"Bathrobe's Chinese, Japanese & Vietnamese Writing Systems"

C intends to market portable outhouses with the trademark "Here's Johnny" and seeks trademark registration. C has no permission from Johnny Carson, the TV personality.

Anything relating to Johnny Carson might infringe upon an expression which may be trademarked and associated with Johnny Carson who lived and died within the last fifty years. Johnny Carson agreed in an actual case argued and decided in 1982-1983 where Carson Productions lost. "On the right of privacy and right of publicity theories, the court held that these rights extend only to a "name or likeness," and "Here's Johnny" did not qualify."

"John W. CARSON, d/b/a Johnny Carson, an individual, and Johnny Carson Apparel, Inc., a corporation, Plaintiffs-Appellants, v. HERE'S JOHNNY PORTABLE TOILETS, INC., a corporation, Defendant-Appellee. No. 80-1720.United States Court of Appeals, Sixth Circuit."

D, who is proud of the multiracial hiring practices of his franchise operation, has decided to pursue trademark registration of "United Nations Dry-Cleaning."

This would conflict with "clearly descriptive" or "deceptively misdescriptive" of quality or use or character of the dry cleaning services as customers might confuse the general assembly with laundered products. It might also be confused with UNITED NATIONS Disengagement Observer Force or UNDOF which is an actual procurement agency of the UN which already provides laundry & dry cleaning services as UNDORF.


E is an all-Canadian producer who wants to register the trademark "Bermuda Body Beauty Gel" for her new moisturizer.

This trademark may already be taken particularly by Michael Kors, a leading American designer of apparels and fragrances and an entire line of "Island Bermuda" body gels and creams available at department stores such as Bloomingdale's and Macy's. "Bermuda Body Beauty Gel" might infringe upon the terms of "clearly descriptive" or "deceptively misdescriptive" of quality or use or character of the product and might infringe upon "Michael Kors Bermuda Body Lotion" which is already in use.

"Michael Kors Website"

"Michael Kors Bermuda Body Lotion 5.0 oz."

Patent Protection: Canadian Style

Patent Protection: Canadian Style

While C begins producing a copied verison of B's product which is without protection, C may then simply march up to the patent office and make a patent application on the product within the terms of "first to file" priority. It would then be in B's own interests to either stamp all products "patent pending" through "first to file" priority by making a request for patent assessment prior to production to prevent C from taking control of the invention. Then B might face infringement claims despite being the first to invent the product.

Inventing a patentable subject matter in itself does not require patent protection unless the inventor seeks to maximize profits on that product and to extend its life cycle to redeem its value through manufacturing, selling or distributing it over a long period of time. As B has chosen not to pursue patent protection he or she may have his or her own reasons to redeem profits immediately through early production or first entrant in the particular product category. However conditions may quickly change when and if competitors produce a similar product possibly based on that invention when B may in hindsight regret production without patent protection.

While research and design phases of product development can be costly both in capital and investment of time the advantages of going to market first over competitors could be to extract a premium price for that product over the short term as its uniqueness and novelty will perhaps confirm that lack of patent protection is the best option. It may also be challenging to replicate it by competitors depending upon its design complexity, individual components, production methods and/or quality performance.

The processes of seeking patent protection for a unique product might be more time consuming and costly than the value of its total production and sales profits. While under Canadian patent protection laws B may prevent others from using, making or selling the invention for a period of up to twenty years the component products themselves making up the invention may also be subject to patent protection covenants which will be costly to clear through royalties. After that time B's patented product will enter the public domain and be free of use to anyone. It is therefore a race against time to extract maximum value from the invented product prior to competitors.

Canada's patent process follows a "first to file priority" thus if B seeks to protect itself from copy-cat competitors who might quickly reverse engineer the invention, map out its essential components and design or re-design a similar facsimile then B must file for patent protection first to benefit from patent pending or patent infringement regulations. In addition B might be eligible for deferred patent application seven years following production with the time intervening as assessment of saleability. However B would have had to make application for that patent assessment seven years prior.

At no time does B ever legally deserve patent protection unless it has been requested. C would then be completely free to copy its design and take control of its use, sale and production rights. While this might appear unfair it is the reason patent protections exist. It is B's responsibility to explore the patent protection system to determine its suitable application to product or intellectual property rights.

Korean intellectual property laws?

Would Korean intellectual property laws provide examples of weak trademark protection enforcement?

Two examples come to mind, the first "Donald Donuts" often sold on the street in market stalls directly across from "Dunkin' Donuts" stores in boxes of identical colours as well as letter shapes and sizes. The second is "KikKer" a locally produced clone of Nestle's "KitKat."

In the mid-nineties it was estimated that about 70% of all computer operating systems in Korea were Microsoft copies. These were described as pathways for wide dispersals of worms, viruses and other malignant hacker codes world-wide.

At one point I remember reading Microsoft had discontinued sales in China due to widespread counterfeiting. When did they begin selling there again?

Also recently Warner Brothers has ceased DVD distribution in Korea due to rampant piracy.

"Warner Bros. Closes Korean Home Video Biz"

Any ideas on how entertainment industries can enforce trademark protection globally?

Wednesday, January 21, 2009

The Case of Ng and Singh

The Case of Ng and Singh

Similar to Ms. Singh somewhere I read about nightmare novices attempting to import bubble gum candy to Canada. Without stipulating that each gum ball should be individually cellophane wrapped in the commercial invoice notes or sales agreement what arrived from the exporter was one giant melted gum ball weighing several pounds. The moral of the story is put it in writing.

Sugar itself also represents a mercurial heat and humidity hazard product as well, its pricing peaks in 1974 with a secondary spike occuring in 1980 and possibly another this year adds not only to the volatility but also danger of exporting or importing this sticky commodity as noted following the great Boston Molasses Disaster of 1919 which killed 21 people and injured around 150. Sugar should not be considered lightly.

"Views of the International Sugar Organization" (Willers and Jolly, Food and Agriculture Organization of the United Nations, 2003)

"The Molasses Disaster of January 15, 1919"

In terms of Ms. Singh's business relationship with Mr. Watt, the business world is no longer/may have never been a realm of easy spit and handshake deals or "my word is my bond" credos, where some Sheikhs (or Sheikhas) may still wave a magic stick over a patch of sand and decree, "build it there" a more prudent level of business trust includes actual written and specified contracts which clearly express the terms of international business and transaction.

If Ms. Singh was appointed an exclusive agent for the importer and arranged purchase from an undisclosed seller's agent she should be able to provide exclusive rights with respect to procurement of the product with an exclusivity clause that ensures Mr. Watt is legally bound to her agency and is not permitted to hire anyone else for this particular procurement or threaten to alter/lower or forego agency fees based on failure to disclose or full disclosure of seller's identity.

Non-disclosure agreements in terms of supplier may be supportable dependent upon the particular national laws and in fact Ms. Singh may seek to arrange similar non-disclosure with reference to her buyer under the terms of agency. If Mr. Watt is in agreement this protects their mutual interests as to possible price fixing or collusion on pricing where the buyer is known with properitary or confidentiality clauses.

Buyer and seller agents are then able to meet in the shadow of some anonymous mollasses keg and limit the terms of purchase or sale to quantity, quality and price rather than other pesky details which could foreseeably mire the transaction in costly or sticky delays. If both agents are given permission under the terms of agency to mutually disclose the identity of the buyer to the seller and vice versa it would be in both of their interests to ensure that obligations of agency (which are a two way street) are met. If these remain unwritten none need necessarily oblige them.

Otherwise, Mr. Ng is just as exposed to risk loss of agency commission as is Ms. Singh. So Singh and Ng might choose to include specifications regarding reservations to possibly lock in their commissions to long-term buying and selling customer relationships between Mr. Watt and the undisclosed seller.

Binding commissions agreements would need to be in place to ensure both Ng and Singh were paid their dues as both principals (both buyer and seller) may just seek to circumvent the entire commissions process once they have been revealed to each other. Attaching agency non-disclosure or confidentiality agreements to their agency activities as a concession for full obligations of agent clauses would also ensure Ng and Singh actually get paid for their hard work. Otherwise they might be quite stuck.