1. AIM 2009 www.leclairryan.com Legal Considerations for the Exporter www.leclairryan.com

2. AIM 2009 Questions for Exporters 1.Why should I export? 2.Where should I export? 3.How do I get my product sold? 4.How do I protect my product? 5.What laws should I be aware of?

3. AIM 2009 OVERVIEW - Topics Trademark and Patent Protection Foreign Corrupt Practices Act Distributor and Agency Agreements Conflict Resolution

4. AIM 2009 Logic of Sequence Trademark and patent protection first because failure to properly address means staying home. Foreign Corrupt Practices Act second because it establishes the rules of engagement in accessing the foreign market. Distributor and Agency agreements third because this agreement establishes the legal relationship between the exporter and party responsible for promoting and selling the product in a given market. Conflict resolution last because you don’t expect conflict, but you must anticipate it.

5. AIM 2009 AIM 2008 Trademark and Patent Protection Trademark 1.Grant of a monopoly regarding use of a brand name to identify the source of origin of particular goods or services 2.No universal trademark 3.First to file in most countries 4.Example 5.Danger: Confusion in the marketplace and loss of market access Patent 1.Grant of an exclusive right to exclude others from practicing an invention for a period of 20 (U.S.) years before it goes into the public domain; not a monopoly, as right to use may depend on prior rights. 2.No universal patent 3.Danger: Loss of exclusivity

6. AIM 2009 Foreign Corrupt Practices Act (FCPA) FCPA prohibits U.S. companies from making corrupt payments to foreign officials for the purpose of obtaining or keeping business. Applies to any individual, firm, officer, director, employee or agent. Anything of value is enough to trigger, not just cash. Large Penalties ($100K- $2M) Don’t be fooled by “business as usual” Don’t bribe local officials

7. AIM 2009 Other Rules of Engagement Treasury Anti-Boycott Regulation Export Administration Regulation (compliance) International Traffic in Arms Regulation Blacklisted Countries, Companies, and Individuals

8. AIM 2009 Distributor and Agency Agreements

9. AIM 2009 Ways to Enter a Foreign Market –Direct sales to foreign customers –Hiring a distributor –Hiring a commission agent –Strategic alliances (partnership with overseas firm) –Direct investment (opening branch or subsidiary)

10. AIM 2009 AIM 2008 Agent vs. Distributor - Key Distinctions Agent: Commission agent matches buyers and sellers, normally without taking ownership of goods; sells your product for a commission (usually no service, support, or maintenance); acts on your behalf Distributor: Buys the goods from the principal and resells them in its own name (marketing service, assumption of credit risk)

11. AIM 2009 Pitfalls 1.Avoid form or online agreements (example) 2.Local Laws 3.Risk of inadvertent employment relationship 4.Compensation concerns after termination 5.Taxation of principal due to establishment of business 6.Registration requirements 7.Exclusivity/Payment/Protection of IP/Performance

12. AIM 2009 AIM 2008 Conflict Resolution: Arbitration v. Litigation 1. Arbitration is generally faster and cheaper. 2. Arbitral awards can be easier to enforce. 3. Can specify expertise of arbitrators. 4. Home court advantage worth considering. 4. No effective appeal from arbitration. 5. Arbitrators can ignore the law.

13. AIM 2009 Moral: Careful analysis of legal issues is critical to success in exporting. There are no good canned answers.

14. AIM 2009 Thank you. Peer A. Segelke, Esq. 2000 Kraft Drive, Suite 1000 Blacksburg, Virginia (540) 443-3308 Peer.segelke@leclairryan.com Peer.segelke@leclairryan.com