EuroWatch 2005 Back Issues

Download PDF of December 15, 2005 Issue of EuroWatch
19 Dec 2005

IN THIS ISSUE:

Highlights:

The Devil's in the Details: How the EU Chemicals Regulation Will Affect Companies
The EU’s proposed chemicals legislation has been scaled back in a compromise with industry. A special interview examines the changes agreed by the European Council on December 13, and the practical implications of the REACH registration requirements. Page 2

New Rules Encourage Growth of Secondary Market for Debt
Changes to EU bankruptcy and insolvency laws are providing more alternatives to liquidation for financially-troubled companies.  Purchasers of distressed debt are playing an increasingly important role in hammering out restructuring agreements with creditors and company management. Page 6

Public Companies in the EU Face Security Breaches and Compliance Headaches
U.S. public companies are required to comply with the Sarbanes-Oxley Act and European privacy regulations. The challenges––and some possible solutions––to the legal conflict are discussed. Page 13

Mergers to Become Easier in Austria
Under legislation to go into effect in January, the Austrian government will raise the sales threshold so that smaller companies will no longer be required to notify authorities before mergers take place. Page 12

Country and Subject Indices:
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Articles:

EU--Brussels Briefing: A Review of Recent Legal and Business Developments in the EU
By Michal Cieplinski, Patrice Corbiau, Elena Kostadinova, Iveta Mikelsone, Anthony Seymour and Yannis Virvilis (McDermott Will & Emery/Stanbrook LLP) page 3

Chemicals Legislation Scaled Back, but REACH Retains Plenty of Sting: Review of Compromise Proposals, and their Meaning for Manufacturers and Users
An Interview with André Bywater (Eversheds) page 4

Changes in Insolvency Rules Favor Growth of European Distressed Debt Market
By Adam Plainer (Jones Day) page 6

Parallel Imports—When can a Trademark Owner Stop Goods in Transit?
By David Latham (Lovells) page 8

AUSTRIA--New Competition Rules take Effect in January
By Axel Reidlinger and Isabella Hartung (Freshfields Bruckhaus Deringer page 12

REGIONAL--Fashioning a Corporate Data Protection Plan that is EU- and U.S.-Compliant
By Jonathan Armstrong (Eversheds) page 13

UK--Company Law Reform Bill
By Jacqueline Jones-Parry (Linklaters) page 15

Market Abuse Directive: Key Implications for Issues of Debt Securities
By Simon Gleeson, Christian Lambie and Andrew Wilson (Allen & Overy) page 16

IN THIS ISSUE:

Highlights:

French Version of Takeover Directive Gives Power to Shareholders
France is expected to implement the Takeover Directive next year, and the French Parliament may fashion the legislation to make the country more investor friendly.  The draft bill would give shareholders, and not the French Financial Authority, the power to approve or decline takeover offers.  Page 11

Intra-Company Transactions—To Tax or Not to Tax?
Some EU countries are charging VAT on services provided by a head office in one EU country to a branch in another. An opinion by the Advocate General at the European Court of Justice, if followed, would exempt cross border transactions between establishments of the same company. Page 5

Stiffer Penalties for IP Piracy?
An EU Directive would permit criminal penalties for pirates. Telecom and Internet Service
Providers oppose the proposed changes. Page 4

Czech Securities Commission to have Last Word
Under a new amendment that went into effect in September, majority shareholders can force the minority to sell, but only after the Czech SEC authorizes that the offer is adequate. Page 6

Country and Subject Indices:
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Articles:

EU--Brussels Briefing: A Review of Recent Legal and Business Developments in the EU
By Mélanie Bruneau, Michal Cieplinski, Patrice Corbiau, Elena Kostadinova, Iveta Mikelsone, Anthony Seymour, Alana Tervo,
Philip Torbøl and Yannis Virvilis (McDermott Will & Emery/Stanbrook LLP) page 3

EU Moving Slowly toward Harmonizing Penalties for IP Infringements
By Jacqueline Klosek and John Kellenberger (Goodwin Procter LLP) page 4

Branch to Branch Service Charge Subject to VAT?
By Jan Snel and Jesse De Preter (Baker & McKenzie) page 5

Czech Republic--Amendment to Squeeze Out Legislation
By Jitka Logesová (Linklaters) page 6

Czech Republic Implements Financial Collateral Directive
By Václav V alvoda and Mikulas Touska (Allen & Overy) page 7

France--Takeover Directive: Implementation in France
By Alan Mason (Freshfields Bruckhaus Deringer) page 11

Germany--German Cartel Office Imposes Fines on Industrial Insurance Companies
By Porter Elliott (Van Bael & Bellis) page 15

Portugal--Competition Authority Fines Five Pharmaceutical Companies for Participating in Cartel in Market for Blood Glucose Reagents
By Porter Elliott (Van Bael & Bellis) page 15

Regional--Recent EU Competition Decisions of Note
By Romano Subiotto, Simon Genevaz, Ianis Girgenson and Michele Piergiovanni (Cleary Gottlieb Steen & Hamilton LLP) page 16

Spain--Spain Catches Up on Copyright
By Gonzalo F. Gállego (Lovells) page 18

IN THIS ISSUE:

Distinguishing between Intellectual Property Rights and Domain Names
Should “www.companyname.com” be protected in the same way as trademarks? No, says the German Federal Supreme Court.  Rather, the rights of the domain name owner are as great as—or as limited as—its contractual rights with the domain name registry. Page 9

Effect of UK Company Reform Proposals on Public Companies
The UK government said its company law reform bill would focus mainly on private companies. But on closer inspection, the proposed reforms will bring significant changes for listed companies, particularly in areas of shareholder rights, transparency, and the duties of management to shareholders. A review of the effects of the proposals on public companies. Page 16

Protecting Trade Dress in the Netherlands
Can a company protect the “look and feel” of its products, even when not trademarked? Yes, says a Dutch court, in reviving an unfair competition doctrine. Page 12

German Market Regulator and Courts Agree on Broader View of Takeover Attempt
A German court has broadly interpreted a law which will strengthen the sell-out rights of minority shareholders. Page 8

Country and Subject Indices:
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IN THIS ISSUE

Recent Developments Around the EU
European Commission concerned over restrictions to competition in legal, accounting, and other professions; genetically modified seed approved; new rules for aid to airlines from regional airports; blocked textiles from China to be released from warehouses. Page 3

Problems Remain for Issuers after the Prospectus Directive
The Prospectus Directive has brought more stringent listing requirements, which are costing many issuers both time and money. Implementation has caused some confusion as countries try to reconcile the new rules with their older methods of regulating securities. The new rules often require the involvement of high-level management. Page 4

Proposed EU Rules for Gene Therapy Products
The European Commission has proposed rules to regulate gene therapies and human engineered products. The draft proposes a compulsory marketing authorization; some small scale procedures will be exempt. Page 7

Spanish Tax Breaks Designed to Attract Foreign Investors
Spain has established a new tax regime that is designed to increase investment in non-listed companies. Both Spanish and foreign investors can qualify for benefits. Page 18

IN THIS ISSUE

How far can Pharmaceutical Companies Go in Limiting Parallel Trade?
A recent decision by the ECJ leaves pharmaceutical companies in a state of legal limbo as to whether they can restrict supplies of pharmaceuticals to a distributor that is exporting the goods to countries where the product is selling at a higher price. However the case did produce persuasive evidence that supports the position of the pharmaceutical industry. Page 5

Commission Puts Teeth into IP Enforcement
The European Commission has adopted provisions that attach significant fines and imprisonment for many violations of IP rights. The Directive requires members states to adopt penalties if they have not already done so. Page 7

When Should Companies Try to Settle Actions by Disgruntled Employees?
Given the time and resources that can be required to defend against employee litigation, settlements offer needed alternatives to battles in French courts. However, employers must carefully follow correct procedures to ensure that the settlement agreement is deemed valid. Page 8

New Rules for Bankruptcy Restructuring in Italy
The rules give creditors more flexibility to reach restructuring agreements, change the cramdown rules, and place more restrictions on the claw-back of payments made before bankruptcy. Page 14

Country/Subject Indices
p. 2

IN THIS ISSUE

Forcing Settlement of Class Action Law Suits in The Netherlands
A newly passed law is designed to encourage early settlement of multiple claimant suits. The law is one of the first of its kind in the EU. Page 12

Overlooking the Positives After the Referendum Debacle
The EU remains the most successful experiment in political institution-building since the end
of the second world war, and it is here to stay. But aggressive plans for future enlargement will need to be re-appraised. Page 3

Complications when Laying Off Employees in Germany
A recent decision by the European Court of Justice has complicated the procedures for dealing with mass redundancies. Page 10

Making REITs more Attractive to Foreign Investors
Germany, and to a lesser extent UK, have announced plans to reduce investor risks and costs. The proposals should appeal particularly to private equity funds. Page 14

Around the EU
Two GM foods are safe, says EU food authority; ban on animal testing sustained over French
challenge; proposed reinsurance directive approved on first reading; EC approves state-aid plan for Italian airline. Page 5

Country and Subject Indices
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Articles

EU—Europe Without Illusions
By Andrew Moravcsik (Princeton University, Brookings Institution)..................... p. 3

Brussels Briefing: A Review of Recent Legal and Business Developments in the EU
By Philip Bentley, Mélanie Bruneau, Nicola Chesaites, Patrice Corbiau, Elena Kostadinova, Philip Torbøl and Yannis Virvilis
(McDermott Will & Emery/Stanbrook) ........................................ p. 5

Ruling by European Court of Justice on Supplementary Protection Certificates
By Scott Foster and Nick Mathys (Baker & McKenzie) ............. p. 6

Recommendation on Broadband E-Communications through Power Lines
By Emmanuel Szafran (Linklaters) ............................................ p. 7

Germany—New Developments in German Labor and Employment Laws
By Michael Magotsch and Pascal Kremp (Coudert Brothers) ....... p. 10

The Netherlands—Act on the Collective Settlement of Mass Damage Claims to Enter into Force
By Paul Olden, Stijn Franken, Daan Lunsingh Scheurleer and Daniella Strik (NautaDutilh) ........................................................ p. 12

Regional—Proposed Introduction of REITs in Germany and the UK—A New Exit Opportunity for Real Estate Investors?
By Oliver Felsenstein and Christoph Kueppers (Lovells) .......... p. 14

Sweden—Changes to the Listing Requirements and Listing Agreement from July 1, 2005
By Thomas Wallinder and Patrik Marcelius (Mannheimer Swartling)................ p. 16

UK—Office of Fair Trading Seeks Greater Involvement in Competition Act Investigations
By Thomas Karalis (Richards Butler) ......................................... p. 16

The Prospectus Directive—What Do You Need to Know?
By Simon Porter, Jonathan Herbst and Hannah Meakin (Norton Rose)............. p. 18

IN THIS ISSUE

Better Late than Never? Delays in Implementing the Prospectus Directive
The Directive is supposed to permit common standards for the sale of securities, and permit
recognition of prospectuses throughout the EU. However confusion in the short-term is likely since several countries will not meet the July 1 implementation deadline. Page 7

Assessing the Damage from the Rejections of the EU Constitution
The rejections will reduce the influence of the EU in diplomatic and foreign affairs, but the future for EU enlargement has suffered the greatest setback. Page 3

The Divisive Conflict over Computer-Implemented Inventions
The European Council and the European Parliament continue to disagree over patents for inventions implemented on computers. A new directive is expected as early as July. Page 6

Non-resident Employees Come under Tax Agency’s Watchful Eye
The UK Tax Revenue agency is taking a tougher approach with contracts with non-domiciled senior executives. Page 19

Italy Tries to Protect Textile Industry
Italy is considering various measures to protect its textile industry, including a “Made in
Italy” trademark. Page 18

Country and Subject Indices
Page 2

IN THIS ISSUE

Dutch to Weaken Time-Honored Corporate Takeover Defenses
The Dutch government has published its draft legislative proposal to implement the EU
Company Law Directive on takeovers. New provisions will make it more difficult for Dutch companies to employ “porcupine” measures to fend off hostile takeover bids. Page 12

Risks for Companies from GMO Legislation
While the EU wants a single policy to control genetically-modified crops, some EU countries have moved ahead independently to regulate the use of GM organisms. EU regulations have broad implications for companies at all levels of the supply chain. Page 5

Patent Litigation and Patent Rights in the EU
An examination of the differing approaches to infringement and patent validity in Germany and England. Page 14

Employees’ and employers’ rights to a developed patent also vary widely. From an employer’s perspective, England’s laws are probably the most favorable. Page 18

Review of Recent EU Developments
Nine Chinese import categories could face import duties after Commission approves safeguard procedures; greater emphasis on enforcement expected from financial services policy program; approvals and investigations in proposed mergers; Commission says five member-countries must lift bans on GMOs. Page 3

IN THIS ISSUE

What Next if France Votes “Non”?
With the opponents of the EU Constitution leading in France, the question is: what happens if the May 29 French referendum delivers a "No”? Much may depend on the closeness of the vote. More worrisome than the French decision are some of the other eight countries that are letting citizens decide. An analysis of the options for the EU if approval of the treaty is not unanimous. Page 5

Directive to Regulate Unfair Business-to-Consumer Practices
The European Parliament adopted provisions for a proposed directive that would define and restrict unfair advertising and unfair trade practices directed at consumers. Page 7

EU Legal and Business Review
The European Commission ponders future actions to keep out GMO imports; directive to require environmental standards from manufacturers of energy using products; approvals of mergers and acquisitions; safeguard procedures against imports of Chinese textiles; clean marine fuel directive. Page 3

UK Publishes Guidance for Pharmaceutical Companies
The agency overseeing medicines and healthcare products has strengthened its oversight and put teeth into measures that are designed to reduce misleading information from drug companies about medicines. Page 13

Country and Subject Index
Page 2

IN THIS ISSUE

Review of Legal and Business Developments
A roundup of recent developments including: challenges to the EU Directive on Food Supplements; expected amendments to the draft Services Directive; enlargement of the EU-Turkey Customs Union; and Microsoft’s latest actions to appease the European Commission after the finding of competition-rule violations. Page 3

Ruling Denies VAT Exemptions for Some Financial Services
A recent decision of the European Court of Justice is likely to lead to significant cost increases for many financial-services companies that have outsourced back-office functions. Page 5

Blocking Spam from the EU
13 EU Member States are cooperating to stop unwanted email messages. Page 6

Registration of Chemicals under EU's REACH Proposal
Both chemical manufacturers and importers will be required to report to a new EU chemicals agency, and companies that fail to comply could be blocked from the market. Page 6

France and Belgium Implement EU Directive on Financial Collateral Arrangements
The laws, as implemented in Belgium and France, should provide greater flexibility for netting and repo arrangements. Page 10 (Belgium) and Page 11 (France).

Country and Subject Index
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