IP Dragon's Law Firms Update

IP Dragon checked the IP law firms specialised in IPR in China. Here are some of the firms with new articles:

Baker & McKenzie
- 'People's Republic of China Patent Law Implementing Regulations Draft' (pdf)http://www.bakernet.com/BakerNet/Resources/Publications/Recent+Publications/ChinaPRCPatentLawImplementingRegulationsDraftCAApr09.htm
Bird & Bird
- Chen, Sofia and Ewan Grist, 'Anti-counterfeiting framework', May 11, 2009 http://www.twobirds.com/English/News/Articles/Pages/Anti-counterfeiting_Legal_Framework.Aspx

CCPIT Patent and Trademark Law Office
- 'The Second "Beijing International Pharmaceutical & ChemicalIntellectual Property Forum"will be held from August 6 to August 8, 2009 in Beijing' http://www.ccpit-patent.com.cn/News/2009042201.htm
- Hu Gang, 'Position Trademarks Refused by the Chinese Court forRegistration as Three-dimensional Trademarks for the First Time'http://www.ccpit-patent.com.cn/News/2009030301a.htm

China Patent Agent (HK) Ltd.
- Liao Xiaojun, 'Several Issues in Hearing Design Patent Cases the IPTribunal of Beijing Higher People’s Court' http://www.cpahkltd.com/cn/Publications/2009liulan/200902/ebjc.pdf
- Wu Yuhe and Pang Lizhi, 'Impact of Drug Dosage Feature on Novalty ofSwiss-type Use Claim' http://www.cpahkltd.com/cn/Publications/2009liulan/200902/ewyh.pdf

China Science Patent & Trademark
- Zhu Nongfan, 'Review: 2008 China Intellectual Property Developments' http://www.csptal.com/en/en_z.asp?id=119

Deacons
- China IP Bulletin- May 2009 http://www.deaconslaw.com/eng/knowledge/knowledge_330.htm

Dragon IP Law
- Newsletter March 18, 2009 http://www.dragon-patent.com.cn/en/news_content.asp?id=218&anclassid=1

DS-Avocats
- Lettre en Droit Chinois des Affaires (French), February 19, 2009 http://www.ds-asie.com/dszh/IMG/pdf/Droit_chinois_des_affaires_no107.pdf

East IP
- 'Our Chairman, Dr. Lulin Gao, Invited to Attend 2009 Global IPExchange in U.S.A.' http://www.eastip.com/news/ip/news_publications/09-2-22gie/index_html_v2

Foley & Lardner LLP
- Bartner, Sharon R., Catherine Sun and Yan Zhao, 'China's HighestCourt Opinion Addresses Impact Of The International Financial CrisisOn Intellectual Property', April 24, 2009 http://www.foley.com/publications/pub_detail.aspx?pubid=5977

Freshfield Bruckhaus Deringer
- Carnabuci, Connie and Richard Bird, 'Major changes in the thirdrevision to the PRC Patent Law', February 13, 2009 http://www.freshfields.com/publications/pdfs/2009/feb09/25150.pdf
- Carnabuci, Connie and Richard Bird, 'Trade Descriptions (Amendment)Ordinance 2008, Hong Kong', February 10, 2009 http://www.freshfields.com/publications/pdfs/2009/feb09/25054.pdf

Haseltine Lake
- 'Haseltine Lake at INTA 131st Annual Meeting', May 16-20, 2009 http://www.haseltinelake.com/news/shownews/inta09

JSM (Johnson Stokes & Master) Mayer Brown
- Wong, Kenny, 'A New Opinion of the PRC Supreme People's CourtConcerning the Adjudication of IP Disputes' http://www.mayerbrown.com/publications/article.asp?id=6683&nid=6

Jones Day
- Bai, J. Benjamin, Tony Chen, Mark Allen Cohen, Chiang Ling Li, AnnW. Chen, 'What Does the Third Amendment to China's Patent Law Mean toYou?', January 2009

Jun He Law Offices
- 'The Supreme Court Issues Opinions on Due Implementation of NationalIntellectual Property Strategy', April 30, 2009, http://www.junhe.com/uploadpic/news/2009511214635977.pdf

Kangxin
- 'SARFT offers 9 mln yuan to support original cartoon', February 11, 2009. http://124.207.176.104:8080/mainServlet.do?ClassName=NewsManage1&ActionName=doBeforeUpdate&jsp=/english/ipnews/viewnews.jsp&newsID=590&titleimage=title-2-4-1.gif&lanuage_type=2&Pro_type_id=90
- 'China to build 100 IP assistance centers', February 10, 2009. http://124.207.176.104:8080/mainServlet.do?ClassName=NewsManage1&ActionName=doBeforeUpdate&jsp=/english/ipnews/viewnews.jsp&newsID=589&titleimage=title-2-4-1.gif&lanuage_type=2&Pro_type_id=90

King & Wood
- IP Bulletin, February 2009, Shi Yusheng, 'Microsoft's Windows Genuine Advantage Initiative andthe Protection of Intellectual Property Rights in China'
- Zheng Lizhu and Kenneth Y. Choy, 'The Impact of Bilski on BusinessMethod Patent'- Nelson, Stephen, and Wu Libin, 'Tax Issues Related to Intellectual Property Transfer of the Foreign Enterprise to China Transferee' http://www.kingandwood.com/Bulletin.aspx?id=11445

Lehman, Lee & Xu
- Lee, John and Cythia Zhang, 'Trademark Practice & Forms' http://www.lehmanlaw.com/fileadmin/lehmanlaw_com/Publications/Trademark_Practice_and_Forms-China_Chapter.pdf

Liu, Shen & Associates
- 'New Comments on IP Trials issued by Supreme People’s Court' May 7, 2009 http://www.liu-shen.com/english/news_detail_en.asp?newsid=511
- 'New Interpretations of Application of Law in Civil Litigationconcerning Well-Known Trademark by Supreme People’s Court', May 7,2009 http://www.liu-shen.com/english/news_detail_en.asp?newsid=510
- 'Development on Well-Known Trademark Recognition and Protection', May 7, 2009 http://www.liu-shen.com/english/news_detail_en.asp?newsid=512
- ChinaCourt.org,'The Judicial Reform of People’s Court Considers Introducing Unified IPR Courts', April 15, 2009 http://www.liu-shen.com/english/news_detail_en.asp?newsid=500- 'Liu, Shen & Associates Receives “China IP Firm 0f 2009” Award', April 15, 2009 http://www.liu-shen.com/english/news_detail_en.asp?newsid=504
- Shenzhen Special Zone Daily, 'Shenzhen Covers 44.5% of the Total PCTPatent Application', March 24, 2009 http://www.liu-shen.com/english/news_detail_en.asp?newsid=492

Lung Tin International Intellectual Property Agent Ltd.
- 'The third revision of Chinese Patent Law regarding the design: anintroduction (fourth)', April 24, 2005 http://www.lungtin.com/en/view.php?id=124053784249
- 'Shanghai MGE sentenced to pay CNY 0.5 million in compensation', April 24, 2009 http://www.lungtin.com/en/view.php?id=124053765916
- 'For suspected promotion of feudal superstition, registration of anew trademark of Blizzard Entertainment based in USA has beenrejected', April 24, 2009 http://www.lungtin.com/en/view.php?id=124053751559
- 'The third revision of Chinese Patent Law regarding the design: anintroduction (3)', Mar. 27, 2009 http://www.lungtin.com/en/view.php?id=123813353819
- 'Administrative institutions strengthen the capacity ofinvestigating and dealing with trademark violation cases', March 27, 2009 http://www.lungtin.com/en/view.php?id=123813335997
- 'New rules for trademark applications in newspapers industry', March 27, 2009 http://www.lungtin.com/en/view.php?id=123813311909

Maier & Maier
- 18 articles about IPR in China http://www.postgrant.com/china-ip/

McDermott Will & Emery
- Ma, Patrick, 'Chinese Trademark Office Releases Trial Provisions for Online Trademark Applications', April 9, 2009 http://www.mwechinalaw.com/news/2009/chinalawalert0409a.htm

NTD Trademark & Patent Agency Ltd.
- 'Shanghai Expo Lawsuit Service Center Established', May 14, 2009 http://www.chinantd.com/en/en-newsshow.asp?id=1016
- 'Chongqing Subsidize Invention Patents Granted Abroad', May 13, 2009 http://www.chinantd.com/en/en-newsshow.asp?id=1015

O'Melveny & Myers LLP
- 'Trial measures for Online Trademark Applications', China Law & Policy, February 16, 2009 http://www.omm.com/files/Publication/a70f2a48-2380-4c36-b3d7-2e4eca6e15f2/Presentation/PublicationAttachment/ab35488e-bb34-4fda-8049-301225b7eda8/clp2009E05.pdf

Orrick, Herrington & Sutcliffe LLP
- Xiang Wang, Neal Stender, Tao Wu and Gary Zeng, 'China's New Testfor Patent Injunctions; Echoes of eBay', May 5, 2009,
http://www.orrick.com/publications/item.asp?action=article&articleID=1832
- Xiang Wang and Neal Stender, 'More changes & some more of the samein amended PRC Patent Law', April 1, 2009 http://www.orrick.com/fileupload/1823.pdf
- Dale, Andrew and Janie Wong, 'The Civil Justice Reforms, An In-House Perspective', March 9, 2009 http://www.orrick.com/fileupload/1691.pdf

Rouse & Co.
- 'China IP Express, 316', April 24, 2009 http://www.iprights.com/document.aspx?fn=load&media_id=611

Shanghai Patent & Trademark Law Office, Inc.
- 'World Expo 2010 Shanghai IP Protection Outlines Unveiled' http://www.sptl.com.cn/en/news/news08.htm

Tee & Howe
- Haynes, James, 'Chinese Utility Model Patents Might Cut Your IP Costsby Half While Providing Better Protection' http://www.teehowe.com/news_detail.php?id=323

Troutman Sanders
- 'Judicial Interpretation of Several Issues on Application ofEnforcement Procedures in PRC Civil Procedural Law', January 22, 2009 http://www.troutmansanders.com/cnlb-012009-07/

Tsai, Lee & Chen
- 'Opinions Shared across the Straits: Using Other’s Trademark as aCompany’s Chinese/English Name Not Allowed', May 12, 2008 http://www.tsailee.com/_en/_ipn/default01.asp?PKID=1303
- 'Third Read of Amendment to Copyright Act Pass Three-strikesProvision', May 1, 2009 http://www.tsailee.com/_en/_ipn/default01.asp?PKID=1302
- 'Indication of Distinctive Name on Company’s Website Not TrademarkUse', May 1, 2009 http://www.tsailee.com/_en/_ipn/default01.asp?PKID=1301
- 'FOXY Sued for Involvement in Copyright Infringement over 5.8Billion', May 1, 2009 http://www.tsailee.com/_en/_ipn/default01.asp?PKID=1300
- 'The Cross-strait Regulations Recognize the Validity of Judgments',April 14, 2009 http://www.tsailee.com/_en/_ipn/default01.asp?PKID=1284

Unitalen
- 'China’s Ministry of Commerce Highlighted IPR for ChineseEnterprises on CeBIT' http://www.unitalen.com/servlet/Node?node=38389&language=0

Wilkinson & Grist Solicitors & Notaries
- articles about IPR in China publised in IAM Magazinehttp://www.wilgrist.com/index.php?main=10002&dept=05&lang=en

Harlan Ellison Says The Darndest Things About Digital Piracy Of His Work

May 16-17, 2009, the International Herald Tribune had the following quote from the sci-fi author and screenwriter Harlan Ellison: 

"If you put your hand in my pocket, you'll drag back six inches of bloody stump." 

Reality Imitates Fiction: China National Space Administration Logo: Half Star Trek, And Other Half ...Star Trek

Professor Susan Scafidi, the authoriy on Fashion Law (Fashion and Intellectual Property Law), author of 'Who Owns Culture?' and Counterfeit Chic sent me a great link: 'China Bootlegs Star Trek for Its Space Program' on Cool Aggregator, a site about pop-culture and strange news maintained by Valerie D'Orazio. 

Reality Imitates Fiction

It is understandable that the people of the China National Space Administration (CNSA) are inspired by science fiction show Star Trek, but the fact that the designers of the logo of CNSA forged two different Star Trek logo's (of Star Trek itself and of the imaginary United Federation of Planets) from this popular series into one, is less then decent. Then again, the creators of Star Trek probably never imagined that their creations would ever fly, in reality, into space. Unless, Star Trek will sue the CNSA for trademark infringement, that is.  Then again, they might see it as a free (interplanetary) advertisment for their science fiction show (which becomes less and less science fiction).  

After the name "Taikonaut" was coined by Chiew Lee Yih from Malaysia and later embraced by Xinhua for people who travelled in space for the Chinese space programme (to distinguish those from astronauts from the US and cosmonauts from the USSR/Russia), IP Dragon is surprised that the CNSA chose for a less than original logo. According to this Wikipedia article: "the terms "yǔhángyuán" (宇航员, "sailing personnel in universe") or "hángtiānyuán" (航天员, "sailing personnel in sky") have long been used for astronauts. The phrase "tàikōng rén" (太空人, "spaceman") is often used in Hong Kong and Taiwan." 

Grim audits of EU-China Relations – IPR to the rescue?

Guest article by Mikołaj Rogowski

Dragons Nightmare, an article from the last month’s edition of The Economist drew a rather pessimistic picture of the European Union – China relations landscape.  According to The Economist the EU is a tough spot. The Economist argues that currently the conflicting policies of the member states are far from rising to the task of coping with the challenges of the emerging of China.

“If you wanted to design a competitor to show up European weaknesses most painfully, you would come up with something a lot like China. It is a centralized, unitary state, which is patient and relentless in the pursuit of national goals that often matter more to the Chinese than anyone else. European governments do not even agree on what they want from China”.

That picture is grim. On the far reaches of the horizon the author sees a possibility of a world where “Chi-American” G-2 is in charge and the European states are no longer treated as meaningful world powers. 

This gloomy vision might just be one of many possible outcomes of the current geopolitical struggle, however the newly published Policy Report by the European Council on Foreign Relations confirms most if not all defects of the current European position outlined by The Economist. 

The report written by John Fox, ECFR Senior Policy Fellow; and François Godement, ECFR Senior Policy Fellow, Professor and Director of the Asia Centre at Sciences Po, proposes what its authors call a “reciprocal engagement” a new policy based on 4 R’s: reduction and reciprocity, relevance and realism: 

“… interest-based approach with two principles and two criteria. The principles: European offers to China should be focused on a reduced number of policy areas, and the EU should use incentives and leverage to ensure that China will reciprocate. The criteria: relevance to the EU, and a realistic expectation that a collective European effort will shift Chinese policy.”(pg. 13) 

Unsurprisingly many of the actions proposed by the report are focused on IPR. The paper perceives the strengthening of the IP protection in China as one of the key factors that could shape the new rebalanced economic relationship between China and EU. One that stands out the most among the anticipated actions is the proposition of establishing “an IPR and patent support fund, supervised by the EU delegation or Chamber of Commerce in Beijing, to which European SMEs could apply for financial support and legal advice to assist with IPR registration/protection in China. “(pg. 56) I am sure that many European companies that are currently considering entering Chinese market would welcome such a move. 

The report’s appendix also proves to be a source of interesting information. It summarizes the approach of every EU member state towards China, highlighting certain areas, including IPR (You can find out i.e. that Poland, as far as the foreign policy goes, is blissfully unconcerned about IPR in China). 

All too all ECFR’s paper is a read worth recommending. It gives the reader a coherent view of the current Eu-China relations and suggests several appealing solutions. It would be interesting to hear what others have to say on the topic of the current EU policy, its proposed changes and how they could affects IPR and IP focused business in China.

Text  Mikołaj Rogowski

This is the second guest contribution of Mikolaj Rogowski, law student at Jagiellonian University, author of several IP articles and Polish-English translations, specializes in Polish, European, Chinese and American IP law, China assistant to MEP Jan Olbrycht. His first guest contribution can be found here.

Business Leaders' Advice On Succeeding in China: IPR, IPR and IPR

The Knowledge@W.P. Carey newsletter of the W.P. Carey School of Business, Arizona State University, has a great series of articles: 'Trade, China and the World Economic Order'. Part 3 is called: Business Leaders' Advice on Succeeding in China.' Herein, sensible things are said about intellectual property rights in China:

• "Hit-and-miss IP regulation is a significant inhibitor to development in China," said W.P. Carey School's Phillip Carter [professor supply chain management]. To work around that challenge, companies should not enter China with their most cutting-edge technology.
• Now that China's domestic companies have moved up the value chain, becoming significantly better at innovating their own technologies, they too are pushing the government for intellectual property rights protection in China.
• While the joint venture model may be great for China and its demestic firms, Motorola's Gary Tooker advises against it. "The best model to incorporate in China is a wholly-owned subsidiary of the American or multinational company," he said." Again to avoid to intellectual property problems.

Read Part Three here.

Taylor Wessing Global Intellectual Property Index and China: The Last Shall Be The First

The People's Republic of China was ranked last (24th position) in the Taylor Wessing Global Intellectual Property Index 2009, see here. The methodology of the GIPI rating is a calculation by a factor assessment model with jurisdiction assessments and instrumental factors as input. See the methodology here. 

About China's trademark system Taylor Wessing complains about the delay in adopting the new Trademark Law which it sees as the solution to the registry delays and backlogs. The time from application to publication of trademarks in China is according to Taylor Wessing currently three years and the duration of opposition procedures up to five years. It says that there is an "absence of any protection for unregistered marks, save the 230 or so marks held to be “famous” (of which only about 20 are foreign), remains a concern for respondents." Taylor Wessing is more positive about China's National IP Strategy and an electronic application system which has cut costs and allocated filing receipts and application numbers quite quickly.

About China's copyright system Taylor Wessing wrote: "China trails overall, as well as for each

of the attacking, enforcing, exploiting and cost-effectiveness subindices." The lack of effective enforcement of copyright is respondents' primary concern, as is bureaucracy associated with giving evidence, and criminal remedies that are perceived as too low, underused and with thresholds set too high, civil and administrative remedies inadequate. Taylor Wessing mentioned also the harsh criticism China received from the USTR in the Special 301 Report. The supporting argument that China faces the "the harshest and most in-depth criticism" because it was covered in 24 pages while the other 45 countries only got 16 pages is not very convincing. It is not the quantity but the quality of the commentary that counts. On a positive note Taylor Wessing acknowledged that the US government considers that progress is being made because China is fulfilling its WIPO Copyright Treaty (WCT) and WIPO Performances and Phonograms Treaty (WPPT) and WTO TRIPs obligations. 

About design Taylor Wessing wrote that "China’s courts have awarded $3 million to the German

bus maker, Neoplan, in one of the biggest design patent infringement awards since China joined the WTO in 2001." China’s design system which requires annual renewals of designs (plus renewal fees) is seen by respondents as onerous and in need of reform, according to Taylor Wessing.

About China's domain names system Taylor Wessing wrote that although China has liberal registration rules it ranked low, because domain names are extremely cheap to register in China, which has encouraged domain name squatters. Taylor Wessing: "It remains to be seen whether the recent exponential increase in numbers (nearly 90% last year) is an ongoing trend or a spike, and also whether brand owners’ awareness of the issue and increasing interest in doing business in China will lead to them registering more pre-emptive .cn domain name." 

About China's Patent system Taylor Wessing was quite positive: "China certainly has also made significant efforts over the past few years to improve its IP systems." The respondents appreciated China's new specialist IP courts, that are relatively much speedier than before and anticpate the Third Amendment to the Patent Law which will take effect October 1st, 2009 and will introduce the absolute international novelty standard and the possibility of compulsory licensing for patents unused within 3 years of grant. 

I am not sure whether Matthew 20:16 (King James Bible) can bring any consolation for China's low score, but here goes: "So the last shall be first, and the first last: for many be called, but few chosen."

Two Encouraging Surveys: On Public Awareness and Business Attitudes of Intellectual Property Rights in Hong Kong

Selene Ng of Wilkinson and Grist wrote an article on the site of IAM Magazine about an encouraging outcome of a survey on public awareness of intellectual property protection by the Hong Kong population. The Survey on Public Awareness of Intellectual Property Right Protection 香港市民保護知識產權意識調查 2008 conducted by Mercador Solutions Associates Ltd., commissioned by the IP Department of Hong Kong. It showed that 96.3 percent of the surveyed group (1,003 repondents, response rate of 51.5 percent) considered that it was very/quite necessary to protect the IP rights in Hong Kong.

However, awareness does not necessarily convert into online behaviour that is respectful towards intellectual property rights. 78.6 percent stated that they probably/definitely would not pay to download songs, movies, games or ebooks. Why? The main reason for this was that purchasing legitimate content is “considered troublesome in purchasing online” (47.0%). When this group is downloading chances are that they access pirated content. So it is safe to assume that there is enough work to do for the intellectual property department of firms, such as Wilkinson and Grist, to enforce IPRs in Hong Kong. Read Ms Ng's article here.

Then there was another rather encouraging survey: Survey on Business Attitudes to Intellectual Property 香港商業機構知識產權意識調查 2008 conducted by Mercador Solutions Associates Ltd. , commissioned by the IP Department of Hong Kong (1,001 business establishments surveyed, response rate 30.3 percent) which showed that: 

• 98.3% of business establishments considered intellectual properties (e.g. patents for invented products / technology, design, logo or brand name) of the surveyed group in Hong Kong valuable assets of a company;
• 93.7% of the business establishments considered that it was very/quite necessary to protect IP rights in the business environment of Hong Kong.
  

WSJ Reports 90 Percent of China's Netizens Access Pirated Music

Mira Veda of the Huffington Post writes "The Wall Street Journal reports that 90% of China's Web Users, which is estimated to be about 162 million people, access pirated music from their computers every day ... " Read here.

Ms Veda, and with her many others, is doubting what the next best business model for the music industry will be in times of massive digital piracy: Google's advertising model (read 'Giving Away Music for Free to Destroy Copyright Piracy: Operation Succes, Patient Dead?') or France's three strikes system (read 'Taiwan's Three Strikes System Less Strict Than French Equivalent'), or some other model. Ms Veda is convinced that some regulation is a prerequisite for the world to see the potential of authors and performing artists that otherwise cannot afford to make music.

Below Ms Veda's article rjmiller (Rob Miller, who is a musician and songwriter) comments that regulation is not the answer and that it only hurts the extremely succesful musicians, quoting Tim O'Reilly 'Piracy is Progressive Taxation'. Mr Miller also wrote: "If you've ever spoken to an Indie artist, they don't worry about piracy, they worry about obscurity". 

Google Will Continue To Investigate Trademarks as Keywords in China, Hong Kong and Macau

Imagine that your competitor can advertise with your name using Google AdWords. This nightmare can come true in the following jurisdictions: 'Regions for Which Google will not investigate the use of trademarks as keywords'. So far the People's Republic of China, Hong Kong SAR and Macau SAR are excluded from this practice. 

Promising News: China and UK Fast-Track Green Patent Applications

Today the UK will start fast-tracking green patent applications, and China will follow suit. IAM Magazine 's Joff Wild has a very interesting blog about it called 'China and UK to fast-track green patent applications, according to British IP Minister'. That could be the best news since the WIPO chose "promoting green innovation" as its theme for this year's World Intellectual Property Day (last April 26th). Read Mr Wild's blog here.  

BSA Software Piracy Study: Taiwan 39 Percent, Ranks 23th Lowest

Business Software Allicance (BSA) publishes its 2008 study of software piracy: May 2009, Sixth Annual BSA-IDG Software 08 Piracy Study.

With 39 percent, Taiwan came in on the 23th position of the countries with the lowest software piracy, causing a 201 million US dollar loss in 2008 (215 million US dollar loss in 2007):

Percentage software piracy Taiwan

2008 39 percent

2007 40 percent

2006 41 percent

2005 43 percent

2004 43 percent

BSA Software Piracy Study: Hong Kong 48 Percent, Ranks Average

Business Software Allicance (BSA) publishes its 2008 study of software piracy: May 2009, Sixth Annual BSA-IDG Software 08 Piracy Study.

With 48 percent, Hong Kong is a Special Administrative Region whose software piracy ranking is between a country with a low and a country with a high software piracy percentage, causing a loss of 225 million US dollar in 2008 (224 million US dollar in 2007).

 

"In Hong Kong, 2008 saw the government amend

copyright laws to make it easier for criminal

enforcement against end-user piracy and conduct

more highly publicized raids on infringing hard-disk

loaders. The extension of the government’s Genuine

Business Software Campaign (GBSC) reached 50,000

companies and increased software vendor revenues

from legalization programs."

Percentage software piracy Hong Kong SAR

2008 48 percent

2007  51 percent

2006  53 percent

2005 54 percent

2004 52 percent

BSA Software Piracy Study: China 80 Percent; Ranks 24th Highest

Business Software Allicance (BSA) publishes its 2008 study of software piracy: May 2009, Sixth Annual BSA-IDG Software 08 Piracy Study.

With 80 percent, China came in on the 24th position of the countries with the highest software piracy, causing a loss of 6,677 billion US dollar in 2008 (6,664 billion US dollar loss in 2007):  

"China’s piracy rate has dropped 10 points since 2004, a result of more vigorous enforcement and education as well as vendor legalization programs andagreements with original equipment manufacturers(OEMs) and resellers. The government, for instance, has mandated that PC OEMs only ship PCs with legitimate operating systems."

"In China, the break up of a massive counterfeiting ring in late 2007 and the subsequent trials in 2008 set a stern anti-piracy tone for the year. Also during 2008, BSA sent out 53,000 “notice and takedown” letters to Chinese Internet Service Providers (ISPs) in an effort to counter Internet piracy. The government conducted enterprise end-user raids in numerous regions, including Jinlin, Hainan, Shanxi, Shanghai, Beijing, Xian, Wuhan, Shenyang, and Qingdao. The Chinese government also continued its efforts to ensure legal use of software in government agencies and stateowned enterprises."

Percentage software piracy People's Republic of China

2008 80 percent 

2007 82 percent

2006 82 percent

2005 86 percent

2004 90 percent

Little Red Book About Xiao Nei: "A Great Example of Digital Copycatting Done Right"

Rand Han of Little Red Book has another great article. This time he has used, analysed and deconstructed the social networking site Xiao Nei (at Campus) which is a blatant copycat of Facebook.

Mr Han's blog posting does not lack humor: "Now while we normally associate copies with inferior quality or some odd defect from the original, Xiaonei, on the other hand, is a great example of digital copycatting done right. It’s funny how I’ve turned copying someone else’s work into a positive. This is just one of many signs that I’ve been in China too long." 

It is not very likely that Facebook is smiling. Literal imitations in our digital era must be demotivating for businesses to invest in creative works and innovations. 

Read more here.

Taiwan's Three Strikes Sanction Less Strict Than French Equivalent

In the rebound the French Assemblée national adopted the Hadopi law today, which includes a "three strikes" sanction for file sharers of pirated works: repeat offenders will have their internet connection cut off after the third offense, see the France24.fr video about it here (in French) or here (in English). Besides France, Taiwan's Executive Yuan has proposed an amendment to its Copyright Law (ISP liability limitation bill) which includes this three strikes sanction. The bill completed the third reading by the Legislative Yuan and will be promulgated by the Presidential Office in the near future. ISPs will be exempt from both civil liability in case of alleged copyright infringement to the copyright owner and contractual liability to the alleged user. The price for this exemption is that ISPs should abide the notice-and-take down procedures for alleged infringing content and apply the three strikes system. 

However, the Taiwanese version of the three strike system seems at first sight less strict than its French equivalent: 

Margaret Chen, Deputy Director General of Taiwan's Intellectual Property Office (TIPO) said to reporters: ".., there are lots of ways to restrict Internet access besides cutting it off entirely." Read blog about it by Ben Challis at  'At last ...the 1709 Copyright Blog'. 

Hon Hai versus BYD: IPR Infringement or Malicious Attack by a Rival?

Hon Hai Precision Industry Co. sued Build Your Dreams (BYD) at a People's Court in Shenzhen for intellectual property infringement in technology needed for electrical cars. Hon Hai is Taiwan's leading outsourced manufacturing company for Apple's iPhone, HP, Sony and Nokia etc. BYD started with the production of batteries in 1995 and combined this with the development of cars (electrical) six years ago. BYD already has its own museum.

Terry Gou, the CEO of Taiwanese Hon Hai, said in an interview with Economic Daily News in Taiwan: "Didn't Buffett proclaim that he would only invest in companies that are trustworthy? Then why did he invest in BYD which stole commercial secrets from (Hon Hai affiliate) Foxconn?" Billionaire Warren Buffett's Berkshire's MidAmerican Energy Holdings took a 10 percent stake last and stated that Hon Hai's accusation is a malicious attack by a rival.  

Read Alex Crippen's article for CNBC here.

AmCham Gives Chinese Government Recommendations About Copyright Law, Trademark Law and Patent Law

American Chamber of Commerce in the People's Republic of China (AmCham-China) issued the 'American Business in China White Paper 2009' last month. Pages 45-48 pdf, with pagenumbers 88-94 are about intellectual property rights protection. Read here.

AmCham-China's recommendations to the Chinese government are:

• "Continue the pioneering efforts of the US Embassy and government in recent years, with greater internal coordination and cooperation with industry.
• Amend the Chinese Patent law to address AmCham-China concerns, as specified in this chapter (IP Dragon: Lacks patentability from computer program/software; left out an earlier draft provision allowing employers and inventors to define remuneration for employment invention through contracts; requires the disclosure of genetic resource for patentability; does not have criteria of inventiveness at the same levels for utility model patents and invention patents; does not compensate for regulatory approval process delays in the duration of drug patents; does not set forth conditions for granting compulsory license in sufficiently detailed language; and is unclear and possibly overly broad in defining what constitutes “patent abuse,” its relationship with the Anti-monopoly Law, and “working” requirements for patents.
• Fully support and follow through with the efforts of the trademark office in eliminating the examination backlog. Retain the Trademark Office examination of trademark applications on relative grounds.
• Establish new public-private partnerships to duplicate the effective IPR infringement prevention during the Olympics.
• Resist establishing IP policies in violation of WTO rules, which unduly favor Chinese domestic companies over foreign companies.
• Amend the 2006 Internet Regulations and Copyright Law to correspond with international norms and comply with WIPO treaties.
• Enable websites and ISPs to work with rightholders and adopt preventive measures such as filtering and automated take-down.
• Establish a clear and transparent government structure for administrative enforcement, and adopt an inter-departmental enforcement platform."
  

I do not understand AmCham-China's recommendation to change China's patent law so that it has criteria of inventiveness at the same levels for utility model patents and invention patents. A utility model patent is something completely different from an invention patent: Utility model patents are meant to protect innovations and are not examined at the application stage, such as an invention patent, and is only examined in case it is enforced. Besides, the protection term for a utililty patent is 10 years, while the term for an invention patent is 20 years. Do you know the ratio of this recommendation?

Knockoff Phones Explode And Not Just the Volume

Knockoff mobile phones such as Apple (hi-phone), Nokia (Nckia), Samsung (Sumsang), that sometimes explode or have high radiation, are immensely popular in China, 20 percent of this biggest market in the world! The phones are also exported to Russia, India, Middle East, Europe and US. David Barboza wrote an article about it: 'In China, Knockoff Cellphones Are a Hit' for the NYT, read here.

Mr Barboza explains why it is easy to produce a knockoff mobile phone in China for about 20 US dollar:

• Since 2005 came Mediatek, a Taiwanese semiconductor design company with a turnkey solution that can be used as a platform to produce low cost mobile phones;
• Since 2007 no license is needed to manufacture a cellphone;
• If you are a manufacturer of these so called Shan Zhai Ji (Mountain Bandit Machines), you are not going to pay value-added tax of 17 percent of the revenues;
• Tapping in the supply chains is not difficult, because there are manufacturers that cannot resist a request to run a night shift.

New Chinese brands emerge, such as Meizu, that aspire to emulate Apple. More information about Shan Zhai Ji, read here.

Professor Mossoff's Historical Paper About Patent Thicket, Patent Troll and Patent Pool: Relevant Today

Can we learn from history? Or are we doomed to make the same mistakes over and over? Professor Adam Mossoff of George Mason University School of Law wrote an excellent paper about the Sewing Machine War of the 1850's which illustrates that the challenges we are facing in this day and age with patent thickets, patent trolls and patent pools are not new. Professor Mossoff draws the conclusion that "[t]he denouement of the sewing machine patent thicket in the Sewing Machine Combination of 1856, the first privately formed patent pool, further challenges the widely held belief that patent thickets are best solved through new statutes, regulations or court decisions that limit property rights in patents."

The paper illustrates in great style the titanic battle between Elias Howe (who did not do anything other with the patent then using it for injunctions to compel licenses from manufacturers) and Isaac Merritt Singer (who was an incremental inventor). In this battle Singer was looking for prior art to invalidate Howe's patent:

"Singer first attempted to uncover prior art in the patent offices in England, France, and, of course, the United States, and he even went so far as to argue that the sewing machine had long been invented in China, but this was all to no avail."

Download and read professor Mossoff's great SSRN-paper 'A Stitch in Time: The Rise and Fall of the Sewing Machine Patent Thicket', here (52 pages PDF).

IIPA: "China and Russia Remain Major Concerns for Copyright Industries"

The International Intellectual Property Alliance (IIPA) has made a statement on USTR’s decisions in its 2009 Special 301 Review affecting copyright protection and enforcement around the world. No real surprises, including that the IIPA commends USTR for the decision to elevate Canada to the Priority Watch List.

This is what IIPA stated April 30, 2009 about China:

“China and Russia both continue to be major concerns to the copyright industries, as they were in 2008 and prior years. While there have been some positive developments in both these key markets over the past year, enforcement efforts generally remain inadequate, and the copyright industries continue to await sustained, effective and deterrent enforcement, enhanced legal reform, and greater market access for legitimate copyrighted materials.”

“While the Chinese government has launched enforcement efforts, these have so far not proven to be effective in dealing with pervasive piracy in the physical and online markets. These problems have been exacerbated by the maintenance of severe and discriminatory market access restrictions for the distribution of some categories of U.S. content. China must significantly expand its use of criminal measures in appropriate circumstances and employ all available tools, including administrative sanctions, to prevent companies such as Baidu and Kangjian Shixun from continuing to profit from providing access to infringing materials.”

China's number one search engine Baidu needs no introduction. Beijing Kangjian Shixun Technology Company with the sites http://www.kjmed.com.cn/ and http://www.kjmed.com.cn/ offers "subscribers access to the firm’s Foreign Medical Journal Full-Text Service (FMJS), a paid service that sells electronic copies of medical journals, including many well-known American ones, obtained from libraries at no cost", according to the US-China Business Council, see here.

• Business Software losses 2008 2940.0 million US dollar levels 79 percent.

Business Software Alliance (BSA)’s 2008 statistics are preliminary. They represent the U.S. software publishers’ share of software piracy losses in each country, and follow the methodology compiled in the Fifth Annual BSA and IDC Global Software Piracy Study (May 2008). These figures cover, in addition to business applications software, computer applications such as operating systems, consumer applications such as PC gaming, personal finance,and reference software.

• Records & Music losses 2008 564.0 million US dollar levels 90 percent.
  

Read the IIPA's press release (4 pages pdf) here.