Professor Lessig Went To Beijing to Warn China Against ...

... US copyright policy

Mr Brett Gaylor, a Canadian from Montreal wrote and directed a thought provoking documentary 'RIP: A Remix Manifesto', which can be seen in 13 chapters via the internet, see here; which is an open invitation to remix it. The movie criticises copyright laws and intellectual property laws in general that constrain creativity instead of stimulating it. The 'Remix Manifesto':  

1. Culture always builds on the past;

2. The past always tries to control the future; 

3. Our future is becoming less free; 

4. To build free societies, you must limit control of the pas  was proposed by professor Lawrence Lessig of Stanford University and founder of the Center for Internet and Society and initiator of the Creative Commons movement. Now, what is this documentary saying about China?

In chapter 6 'Preachers, Lawyers and Criminals' professor Lessig is going to China to warn it against ... American copyright policy.

Mr Brett Gaylor: "Professor Lessig has been travelling the globe for over a decade sounding the alarm on its own country's copyright policy."

Professor Lawrence Lessig: "You know I am not anti-American, I am not trying to rally people against America. But I am against this particular version of American policy and I am embarrassed by it, because it is so extreme relative to our tradition and it does harm when this kind of extremism is forced on developing nations. And I think it is particularly appropriate then to come to developing nations and at least got them to recognise that there is another side to the story. So I felt like a lawyer with a guilty conscience, that somehow there must be a balance to this. And if a mess is being created, because lawyers were playing in the hands of these people who profit from this, then laywers need to be on the other side.         

 

In chapter 12 'Which road to the future? ' Mr Bruce Lehman who was the Under Secretary of Commerce for Intellectual Property and Commissioner of the United States Patent and Trademark Office between 1993 and 1998, was interviewed. He talks about a "deal" between the US and the rest of the world, I think, not everybody was aware of the consequences at the time.  Mr Lehman is looking back to his legacy in a critical way. 

Mr Gaylor: "In the 1990s the US hatched a plan to trade the economy of things for the economy of ideas. 

And the man who would protect those ideas was . 

Mr Lehman: "In the Clinton administration my job was to be in charge of the intellectual property policy of the US both domestically and in terms of our diplomacy. 

You know in a modern economy I think wealth is a product of the mind. It is really in intellectual creations. 

You know in much of the world we live in a sea of piracy. And you can have sympathy for developing countries, but we made a deal. You know, if you go to a shopping mall in this country you cannot buy anything made in the US anymore, all comes from China or some other place like that. Well the reason for that is that we really opened up our markets. It was to basically abandon low wage manufacturing jobs and the ideas that we would compensate for that with higher wage high tech more intangible based jobs."

Cory Doctorow, writer of sci-fi novels and copyleft advocate and blogger of Craphound : "The idea was that they would convince the world's economies to adopt that prohibited the copying of American ideas without American permission. And in exchange it would require all the countries that wanted to manufacture stuff and export them here to adopt American copyright laws. And if they didn't they wouldn't be allowed to sell their physical goods here in America. And the World Trade Organisation would be the teeth."

Mr Lehman: "And the difficulty in the global trading system is that we met our part of the bargain, but these other countries did not theirs. 

Then images of Beijing's Shijiingshan Amusement Park are shown, which I blogged about in May 2007, see here . And you see a spokesperson of the park answering to the question: Is Mickey Mouse there? "No, that's a cat with big ears."

Mr Lehman: "I have to say that now we are more than a decade into our policies on digital copyrights I feel that it also has achieved the results that we wanted. "

"So I am thinking, you know, maybe we should have forgotten intellectual property rights internationally and gone for labour standards and the environment." 

  

Video Copyright Enforcement/Anti-Piracy in China Comes of Age

Andy Greenberg wrote two great articles for Forbes about video copyright piracy in China.

In 'Video Piracy's China Syndrome' he writes that "[a]ccording to date from copyright-fingerprinting start-up Vobile, the number of copyright-infringing videos on some Chinese sites like Ku6 and Youku has jumped more than six-fold between September 2007 and September 2008 [..]"

In 'Sinking China's Video Pirates' Greenberg gives an introduction of Vobile and the service deals it struck with 56.com and Pomoho to check whether their users have uploaded content that infringes copyright. Greenberg writes:

"Even as sites like YouTube, Dailymotion and Veoh have purged the vast majority of their infringing content in recent years, Asian user-generated video sites like 56.com, Tudou, Youku, Ku6.com and Megavideo have become frustrating black holes for intellectual property. A second layer of sites like Alluc.org, MovieTVonline.com and Sidereel.com--all based in the West-- have made a business of cataloging pirated clips on those sites and linking to them for a global audience."

Read more of Greenberg's article here.

Interlingua Publishing's China Piracy Reports has a good report 'Famous Video Streaming Website Punished for Copyright Infringement' on a relevant 2008 case: Sifang Yuanchuang International Film, Yingyi Entertainment and China Warner Film Corp. as plaintiffs and Tudou.com as defendant for copyright infringement by streaming the video 'Crazy Stone'.

"Shanghai No. 1 Intermediate People's Court ordered Tudou.com to delete the film from their server, and pay damages in the amount of RMB 50,000."

Tudou.com tried to defend itself by saying that they had a computerised system in place, but that it did not have the characteristic code and the copyright holder did not file any notification.

Despite this, the judge decided that the "amount of financial and human power investment and the popularity of the film, Tudou.com should have been aware that the copyright holder was not likely to offer free viewing service of the film online."

Read Interlingua Publishing's report here.

Read also JLM Pacific Epoch's article 'Youku Sued, Claims Its Inundated by Content'.

Neither US Nor China Appeals Against WS/DS362 report

Ms Kaitlin Mara has an excellent post on Intellectual Property Watch about the acceptance of and reactions to the WTO Dispute Settlement Report (WS/DS362) by the US and China. China is expected to tell how it will implement the changes that are prescribed by the report.

The International Centre for Trade and Sustainable Development (ICTSD) co-organised with the United Nations Conference on Trade and Development (UNCTAD) an event on February 23, 2009, to analyse the implications of the WTO Dispute Settlement Report.

Ms Mara gives an overview of some of the remarks made by the speakers, which included:

• Professor Peter K. Yu, director of the IP Law Center at Drake University Law School in Indiana, who gave an interesting presentation about the 'Key Legal Findings and Implications of the US-China Panel Report';
• Professor Joost Pauwelyn, international law at the Graduate Institute of International Studies in Geneva;
• Atul Kaushik of the Consumer Unity & Trust Society International and former Indian negotiator at WTO;
• Dr. Xuan Li, Coordinator Innovation and Access to Knowledge Programme of the South Centre gave also a presentation: 'US-China case: Implications for the protection and enforcement of IPRs in China'.

Read Ms Mara's article here.

The Future of Innovation in China: "China Will Overtake Position Germany in 20 years" Or "Not in Our Life Time"

I just listened to the IP Think Tank Podcast of February 16, 2009 which is an initiative of Duncan Bucknell Company. Besides an interesting review of the WTO report on DS 362, the IP Think Tank Podcast has a lot to offer to any IPR enthusiast. At the end, Mr Nicholas Redfearn, Rouse country manager in Hong Kong, told about two recent books that convey two diametrical opposite views of China's path to patent and innovation growth (the assumption implied is that there is a strong correlation between the growth of patents and innovation in a country).

• Hutton, Will, 'Writing on The Wall (which refers to idiom: portent of doom or misfortune, see here): Why We Must Embrace China as a Partner or Face It as an Enemy', Simon & Schuster, November 2006. Mr Hutton writes according to Mr Redfearn: "the number of triadic patents (US, Europe and Japan) from China is too small for it to sustain the kind of growth and innovation you read about."
• Gupta, Anil K., Haiyan Wang, 'Getting China and India right: Strategies for Leveraging the World's Fastest-Growing Economies for Global Advantage' Wiley, John & Sons, February 2009, while Messrs. Gupta and Wang argue, according to Mr Redfearn: "China is producing vast numbers of patents and with the current rate it will overtake Germany by 2020."

Gupta and Wang's book is the most recent, whether it will be more accurate on this, we will have to see. What is your opinion about it? Let me know (ipdragon at gmail dot com). Listen to the IP Think Tank Podcast here.

Interview with Mr Joseph Simone About Which Steps The US Could Take in regard to IPR in China

IP Dragon's Danny Friedmann asked foreign registered lawyer and IPR in China specialist Mr Joseph Simone of Baker & McKenzie in Hong Kong about which course of action the US could take after the decision, WTO DS 362 Report, by the dispute settlement panel on United States’ complaint against “China — Measures affecting the protection and enforcement of intellectual property rights.”

IP Dragon: Could you please give your opinion on the best recommendation the IACC can give to the USTR in regard to their Special 301 Review about China's status: 'Priority Watch List or Priority Foreign Country/Section 306 Monitoring?
Joseph Simone: "I think the issue of thresholds is one which continues to deserve priority attention--along with the other issues mentioned in the 2009 Special 301 report of IACC. So "Priority Foreign Country" seems preferable, but if USTR has no plans to file an appeal or a fresh case in the very near term, then I'd expect them to decide on Priority Watch List and Section 306 Monitoring."

IP Dragon: Why should the US appeal the panel decision?
Joseph Simone: "It's quicker/cheaper than refiling- any refiling would probably require fresh data from industry- USTR wouldn't need more political support from Industry (really) to appeal - they arguably have a fiat already."

IP Dragon: What would a refiling mean?
Joseph Simone: "A refiling would require a lot more preparation work- an appeal would not annoy China so much as a refiling- the WTO Appellate Body has in the past shifted the burden of proof to defendants (here, China) in analogous cases, the latest being the one involving gambling (DS 285)."

IP Dragon: Did the US have enough information to base their claim?
Joseph Simone: "The US should in any case ask China for narrower data under a new article 63 (3) TRIPs request. The last one in 2006 was way to broad. If China comes through with useful data, the US may not need to ask industry for case info.

IP Dragon: What are your hopes in respect to what China should do?
Joseph Simone: "I'm really hoping China will wake up and decide to start a serious governmental/academic and legislative research project to reform all aspects of IP enforcement--including the Criminal Code.

IP Dragon: What is the magnitude of the problem of counterfeits that originate from China in the developing and developed countries?
Joseph Simone: "For example in Tanzania, between 15 and 20 percent of ALL GOODS circulating were found to be fakes from China, according to the Confederation of Tanzania Industries and up to 30 percent of medicines are counterfeit, according to a 2006 report by the World Health Organization. And for example in Japan, as you have seen, almost 82 percent of all counterfeit products originate from China."

More aricles about counterfeit goods in Africa originating from China:
- 'Tanzania: Counterfeit Drugs Put Lives at Risk', allAfrica.com, January 15, 2009, read here.
- Wadhams, Nick, 'Rapid Rise In African Anti-Counterfeiting Efforts Led By Developed Nations' IP-Watch, December 9, 2008, read here.
- Nakaweesi, Dorothy, 'Traders battle counterfeit products from China', Daily Monitor Uganda, October 14, 2008, read here

How to Sanction Lack of IPR Enforcement in China: Priority Watch List (IILA) or Foreign Country/Section 306 Monitoring Status (IACC)

The International Anti-Counterfeiting Coalition (IACC) is an organisation that represents companies concerned with trademark counterfeiting and copyright piracy. The IACC submitted the following recommendations to the Office of the US Trade Representative (USTR) in their annual Special 301 review of intellectual property protection issues in foreign countries. As in the past years, China and Russia remain the main concern for the IACC. China should be dealt with as a Priority Foreign Country, Section 306 Monitoring, according to IACC.

The International Intellectual Property Alliance (IIPA), an alliance representing U.S. producers of content and materials protected by copyright laws, including computer software (BSA joined IIPA, see here), films, television programs, music, books and journals, has the most problems with China, Russia and Canada. The IIPA submitted these recommendations to USTR. It suggest to the USTR that China stays on the priority watchlist, see here. The IIPA also recommends that Hong Kong SAR deserves 'Special Mention' (which is a warning sign), read here and so does Taiwan, read here.

Priority Foreign Countries: those countries that USTR believes have the most onerous or egregious policies with the greatest adverse impact on U.S. right holders or products. These countries are subject to accelerated investigations and possible sanctions.

Section 306 monitoring: means that the USTR can move directly to the application of trade sanctions against China if monitoring shows a slippage in China's enforcement of bilateral intellectual property rights agreements. The USTR is granted this authority under Section 306 of the U.S. Trade Act of 1974.

Priority Watch List: those countries which do not to provide adequate IP protection and enforcement or market access for U.S. persons relying on intellectual property protection.

Special Mention: These countries have made progress in improving their level of intellectual property protection but USTR believes they still need to be monitored. USTR also included countries in which problems with intellectual property protection were beginning to become more serious.

I will elaborate on these recommendations, later.

81.5 percent of Counterfeit Products in Japan originates from China

The Japan Times is running (and probably translated) Kyodo News' article which is quoting Japan's Finance Ministry saying that 81.5 percent of counterfeit products come from China.

• Japan's 9 customs houses handled 26,415 cases of fake imported goods in 2008, up 16.6 percent from 2007 and the seventh consecutive record;
• Cases linked to China (excluding Hong Kong), grew 33.6 percent from the previous year to 21,529;
• compared with 2004 the number of counterfeit itmes from China expanded about sixfold in 2008.

Read The Japan's Times article here.

In the video below you can see how the seized counterfeit goods, including fake Louis Vuitton bags, are being destroyed by Japanese customs (in the text under the moving images you can see the Kanji, which are the Chinese characters the Japanese also use: 中国 for China, plus 82 percent, which refers to the rounded up 81.5 percent of all seized counterfeits goods by Japanese customs that originate from China).

Multinationals Strengthen Their Commitment to China; But Are Scared of IPR Challenges

Booz & Company conducted a study (survey under 108 foreign invested manufacturing companies) together with the American Chamber of Commerce in Shanghai to see what the influence is of the economic crisis on their commitment of doing business in China.

"Nearly three-fourths (73 percent) of respondents said that enforcing intellectual property protection was “important” or “very important.” Other manufacturing sector issues ranked similarly include improving education and productivity of Chinese labor (67 percent), increasing quality and safety standards for Chinese-made products (66 percent), and welcoming foreign investment (62 percent). Respondents reported that the Chinese government has made noticeable progress on improving manufacturing infrastructure and incremental progress on protecting intellectual property rights."

Read the summary of the AmCham Shanghai/Booz & Company 'China Manufacturing Competitiveness report 2008-2009' here.

AMP: "Economic Crisis Should Make German Government Act More Aggressively Against Counterfeiters"

Deutsche Presse-Agentur (DPA) interviewed Mr Rüdiger Stihl, chairman of the Aktionskreises gegen Produkt- und Markenpiraterie (APM). The resulting article at the site of N24 (in German) gives a good overview of the damages that are caused by counterfeit products originating from China (for 75 percent) and Turkey (10 percent) and the measures that APM is proposing.

APM claims that:

• the counterfeit products on the German market represent a value of an estimated 30 million euro;
• 70.000 jobs in Germany are lost because of the counterfeit products.

APM demands more agressive measures from the governement, especially now during the economic crisis:

• counterfeiters should get draconic sanctions, including imprisonment;
• not only should the counterfeit products be seized that tourists bought, but they should get a fine as well.

To raise public awareness and sensitise German citizens, APM is organising an exhibition, called 'Schöner Schein. Dunkler Schatten' which means 'Glamour appearance. Dark shadow', that will be held medio 2010 in 30 German shopping centres and must inform 10 million consumers about the risks of counterfeit products.

Bleak reminder

Market price of 1 kilo counterfeit viagra: 90,000 euro (dealers are in many cases not even prosecuted); Market price 1 kilo heroin: 40,000 euro (dealers are risking high jail sentences). You can guess what is the most profitable/low risk business for organised crime.

Update: Mr John Bingham wrote an article for the Telegraph.co.uk in which he claims that drug dealers switch from cocaine to fake viagra, read here.

Portrait Rights In China: When They Say Cheese, You Say See You In Court

Chinese companies in China infringe portrait of foreign celebrities
Jane Macartney of The Times Online has an article about the commercial use of the portraits of Western celebrities without their permission, which is an infringement of their portrait right.
Little Red Book has nice post about it called 'Beckham, Reeves, and Connery; Selling Sex Pills in China; Fake ad and Chinese Netizen Reactions' including a YouTube video where you see these three celebrities, talking Chinese, endorsing a product that claims to increase the masculinity of the user; and another YouKu video where the Italian football player Messi is used to sell a height pills. IP Dragon's friend Stan Abram of China Hearsay is quoted.

Contrary to many jurisdictions where portrait rights can be found in the copyright law, China's portrait rights are hosted in two articles of the General Principles of Civil Law:

• Article 100 General Principles of Civil Law: "Citizens shall enjoy the right of portrait.
  The use of a citizen's portrait for profit without his consent shall be prohibited."
• Article 120 General Principles of Civil Law: "If a citizen's right of personal name, portrait, reputation or honour is infringed upon, he shall have the right to demand that the infringement be stopped, his reputation be rehabilitated, the ill effects be eliminated and an apology be made; he may also demand compensation for losses."

In this case the celebrities also have a right based on article 99 General Principles of Civil Law, which forbids false representation of personal names.

Portrait associated with special event
Rebecca Ordisch an IP Counsel for Cadbury wrote a 10-page paper called 'Sports Marketing in China: an IP perspective' in the Sports Law eJournal (February 13, 2007) of the Australian Bond University Faculty of Law, where she writes:
"[a] small restaurant owner sought legal advice recently, for example, because he wanted to celebrate Liu Xiang’s latest hurdling win with a special offer to his customers. He wanted to promote the special offer with a banner and a photo of the famous hurdler. He was told that, although he could use Liu Xiang’s name in a promotion in celebration of his win, he could not use the image as it would infringe Liu Xiang’s portrait rights."

Foreign company in China infringes portraits of Chinese celebrities
But foreign companies operating in China can also infringe the portrait right of Chinese celebrities. In 2003 Yao Ming, the 2.29 meter (7 ft 6 in) basketball giant sued Coca-Cola Co. for portrait infringement, when his portrait and that of two other Chinese Basketball Association was displayed on commemorative cans (here you see an AFP picture of a Coca-Cola bottle with Yao Ming on it). In the end Coca-Cola settled the case outside of court. Read the People Daily Online article here.

Stills and the coexistence between copyrights and portrait rights
Professor Chen Longjiang of the Haidian University School of Law wrote a very interesting article about the relationship between copyrights and portraits using stills to illustrate this coexistence, for China Intellectual Property Magazine, August 2008, issue 25. The article, translated by Zhang Meichang, can be read here.

So can I use the portrait right/copyright of Yao Ming?
One can argue that I do not really use the picture for commercial reasons, and the picture is on the site of Wikipedia for a long time. And I would like to refer to article 22 Copyright Law which has some relevant paragraphs limiting copyright, so I can use the picture of Yao Ming to illustrate my blog.

Article 22 Copyright Law:
"In the following cases, a work may be exploited without permission from, and without payment of remuneration to, the copyright owner, provided that the name of the author and the title of the work shall be mentioned and the other rights enjoyed by the copyright owner by virtue of this Law shall not be prejudiced:
(2) appropriate quotation from a published work in one's own work for the purposes of introduction to, or comments on, a work, or demonstration of a point;
(3) reuse or citation, for any unavoidable reason, of a published work in newspapers, periodicals, at radio stations, television stations or any other media for the purpose of reporting current events;
(4) reprinting by newspapers or periodicals, or rebroadcasting by radio stations, television stations, or any other media, of Articles on current issues relating to politics, economics or religion published by other newspapers, periodicals, or broadcast by other radio stations, television stations or any other media except where the author has declared that the reprinting and rebroadcasting is not permitted;
(5) publication in newspapers or periodicals, or broadcasting by radio stations, television stations or any other media, of a speech delivered at a public gathering, except where the author has declared that the publication or broadcasting is not permitted;

Why STAs are Different From EPAs/FTAs and Influencing IPR norms is Preferable to Being Influenced

Professor Peter K. Yu , one of the leading scholars on Intellectual Property Rights in China (director of the Intellectual Property Law Center at Drake University School of Law), informed me that he just wrote a paper called 'Sino Trade Agreements and China's Global Intellectual Property Rights'. It is a great thought provoking read. In the first part Professor Yu explains why a Sino Trade Agreement (STA) is different from a European Partnership Agreement (EPA) or US Free Trade Agreement (FTA). In the second part he gives reasons why China keeps a low profile in the global IPR policy arena, but should be more assertive to help shape global IPR norms.

What makes STAs different from EPAs/FTAs

STAs include Chile-China FTA (November 18, 2005) , Pakistan-China FTA (November 24, 2006), New Zealand-China FTA (April 7, 2008) and China-Singapore FTA (October 23, 2008).
China has, according to Professor Yu, at least the following goals for STAs:

1. secure energy sources;
2. facilitate trade between China and signatory countries;
3. attract Foreign Direct Investments (FDIs) from signatory countries;
4. strengthen China's diplomatic ties with signatory countries;
5. cultivate goodwill among its neighbours;
6. improve China's position within WTO.

The strategies deployed by China to develop such STAs are also different from the strategies deployed by the EU and US, respectively, to develop EPAs and FTAs:

• governed by the principles of national sovereignty, self-determination and non-interference in the internal matters of the signatory countries;
• gradually developed;
• more flexibile terms;
• no ambition to impose Chinese laws upon signatory countries;
• focus more on acceptance and accommodation, rather than on conversion and harmonization.

In other words: STAs are more pragmatic and tailor-made to the conditions of each signatory country. Therefore, each STA is very different from the other. Examples of the differences between the STAs: In the New Zealand-China Free Trade Agreement there is a full chapter (Chapter 12 articles 159-166) on IPR, while you cannot find a word about it in the China–Singapore FTA. Professor Yu mentions that while article 111 (a) Chile–China FTA states the Doha Declaration on TRIPs on Public Health and identifies as an important goal the prevention of abuse of intellectual property rights and restraints on competition, the New Zealand-China FTA omits both issues.

According to Professor Yu, so far, China has not shown any ambition to develop the existing STAs into a multilateral agreement in the future.

Professor Yu notices that STAs are hardly ever TRIPs plus, contrary to many EPAs and FTAs. Professor Yu argues that maybe the only exception to this might be article 165 New Zealand-China FTA, which focuses on the protection of genetic resources, traditional knowledge, and folklore, as an anticipation of the amendments in China's Patent Law. Then again this protection is optional. Many TRIPs-plus Bilateral and Regional Agreements resulted from an asymmetric power relationship. One can argue that this is also the case with China. However, it is not in China's interest to push for TRIPs-plus STAs, since China itself does not want to comply to TRIPs-plus norms at the moment.

Why China keeps a low profile

Professor Yu contends that China keeps a low profile in the arena of global IPR norms, because:

• several parts of China have not yet reached the point where companies and citizens start demanding higher levels of IPR protection and enforcement; therefore it is very difficult to come up with one IPR policy that deals with all the different challenges within China;
• China's leadership prefers to focus on its enormous domestic problems;
• The challenge for China to meet its many international commitments is difficult as it is; it is not the time to assume a leadership role in this respect, yet.

Why China needs to become an influencer of global IPR norms

Professor Yu advises China to be more assertive in shaping the global IPR norms. Only the very fact that the global IPR norms will be used in dispute settlements with WTO members to interpret whether China complied these international IPR norms, for example TRIPs as was the case with DS 362) justifies an effort by China to influence global IPR norms that could possibly prevent future problems.

• China acceded to the WTO on December 11, 2001, which is rather late. It is time to start influencing rather than being influenced;
• it could help get rid of the external pressure from the EU and US;
• it could formulate solutions to China's specific IPR challenges;
• to assume leadership in the less developed world, so that it could gather a collective bargaining position to influence the global IPR norms.

I concur with Professor Yu that it is in China's interest to try to assume a leadership role so it can help shape global IPR norms (or at least set the IPR policy agenda) and that China should consider developing coalitions with other less developed countries to change some IPR treaties to their wishes. However, I am wondering whether this would intensify the trend in the more developed countries to migrate to different forums (as they are already doing, for example it is said there is a migration going on from TRIPs to ACTA) and also to increase the number of Bilateral and Regional Agreements.

Coming Up: China-Costa Rica Free Trade Agreement