Update on CYBERsitter, LLC v. The People's Republic of China et al

Remember Green Dam Youth Escort? Short reminder: the Chinese government ordered computer manufacturers to bundle computers sold in China with software that could filter pornography by July 2009. It postponed the deadline because of pressure by foreign computer manufacturers. In August it backtracked the obligation to pre-install the software (Japanese companies Sony and Toshiba, and Acer from Taiwan voluntarily installed the software). It now only required schools and internet cafes to install the filter software. Soon it became clear that the software, called Green Dam Youth Escort. 

Now on January 5th, 2010, CYBERsitter LLC sued the following Chinese, Taiwanese and Japanese parties:

• The People's Republic of China ("a foreign state", as can be read in the original lawsuit)
• Zhengzhou Jinhui Computer System Engineering Ltd.
• Beijing Dazheng Human Language Technology Academy Ltd.
• Sony Corporation
• Lenovo Group Limited
• Toshiba Corporation
• Acer Incorporated
• ASUSTeK Computer Inc.
• Benq Corporation
• Haier Group Corporation
• DOES 1-10

The complaint at the California Central District Court is based on what allegation? Copyright infringement: CYBERsitter's allegation was that Green Dam Youth Escort makes use of approximately 3,000 programming lines of CYBERsitter. It demands damages worth 2,257,175,000 US dollar, based on 56.5 million unauthorised copies in China as of early June 2009, multiplied by 39.95 US dollar per copy. Rich Kuslan of AsiaBizBlog (the web's first China business and law blog) provides the lawsuit document here. Mr Kuslan provides another lawsuit document of CYBERsitter versus CBS Interactive, Inc, and DOES 1-10 here.

Michael Kan of IDG news gives us the update on the case. August 1, the U.S. District Court for the Central District of California denied the motions brought by the China-based Zhengzhou Jinhui Computer System Engineering and Beijing Dazheng Human Language Technology Academy. Their argument that the California court had no jurisdiction over the case was dismissed by Judge Gary A. Feess, because the companies had allegedly committed the criminal acts knowing that CYBERsitter was based in California and that its business there could be damaged.

Chinese electronics vendor Haier argued, according to Mr Kan, that the case's key defendant, the Chinese government, was immune from a U.S. court's jurisdiction. However, "[b]ecause Defendant PRC's wrongful acts alleged herein arise in connection with a commercial activity that causes a direct effect in the United Stated, Defendant PRC comes within an express exception to the Foreign Sovereign Immunities Act, viz, 28 U.S.C. section 1605 (a)(2):
(a) A foreign state shall not be immune from the jurisdiction of courts of the United States or of the States in any case - (1) in which the foreign state has waived its immunity either explicitly or by implication, notwithstanding any withdrawal of the waiver which the foreign state may purport to effect except in accordance with the terms of the waiver; (2) in which the action is based upon a commercial activity carried on in the United States by the foreign state; or upon an act performed in the United States in connection with a commercial activity of the foreign state elsewhere; or upon an act outside the territory of the United States in connection with a commercial activity of the foreign state elsewhere and that act causes a direct effect in the United States;

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IP Dragon's Book Review: Invisible Gold in Asia

Professor David Llewelyn (King's College London and IP Academy, Singapore) wrote an exceptional book that will appeal to both laypeople and IP professionals. Although Invisible Gold in Asia does not aim to be a scholarly book (for example there are no footnotes), the book could not be written by a non-scholar. For laypeople the book lays out the intricacies of intellectual property rights and their relationships to wealth creation, a topic incredibly comprehensive and therefore almost unmanageable, in digestible parts. For the IP professionals the book is a treasure of anecdotes worth knowing and sketches the whole field of IP in Asia, and thereby giving some crucial context even to IP professionals, since most of them cover only some part of intellectual property rights, and their focus is often geographically limited. Professor Llewelyn's educational capabilities are charged by years of teaching a critical mass of students. Therefore when he touches upon a complex subject, he goes just deep enough into the matter to convey the essence of the subject. When you read the easy flowing book, you will notice that Professor Llewelyn not only wants to illuminate the obscure world of IP, but he has a message as well: basically he wants to wake up everybody inside and outside of Asia that IP, will be of crucial importance for Asia in the coming years. Professor Llewelyn rightly divides two markets for the world of IP: the USA and the rest of the world. But the role of Asia and the role of IP in Asia will become ever more important. And he tries to make the reader aware that IP rights are not mere liabilities, but they could be valuable assets. The book is structured in two parts. In part I Professor Llewelyn is going on a tour de force as he gives an overview of all intellectual property rights and their different characteristics. He can do this like no other, see here. In part II he gives describes the Asian IP landscape: Japan, the Little Dragons/Tigers (Taiwan, Hong Kong, Republic of Korea and Singapore), China, India, Malaysia, Indonesia, the Philippines, Thailand, Sri Lanka, Pakistan and Vietnam, Bangladesh, Laos, Cambodia. My favorite chapters where about the Little Dragons (or Little Tigers) and China. Professor Llewelyn sketches in a few sentences a mini-biography of some highly interesting Chinese companies with iconic brands and IP, such as Li Ning, Haier Group, Mengniu, Huawei, ZTE etc. Before the text Professor Llewelyn put a great maxim: "Don't make the mistake of thinking something is valuable merely because you can measure it. It is far better to work out what you can value and then see if you can measure it." That same maxim could not only be applied to IP, but to reading a book such as Invisible Gold in Asia as well.

If you want to get an overview of IP in Asia, this is the book to read. If you are an IP professional the book is the perfect present to give to clients, so that they can learn about the importance of IP, or to give to your spouse, or friends, so that they can get a clue about what you are doing.

Invisible Gold in Asia, Creating Wealth Through Intellectual Property, can be bought at Marshall Cavendish Business.

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Haier Files 2.6 Patent Applications Per Day

Gao Hucheng, the Vice-Minister of Commerce, wrote an article about the need for China to improve its brands and IPRs in order to become internationally more competitive.

Haier, the Chinese posterchild that is taking its brand very serious, "put[s] forth 2.6 patents each day on average and takes the lead among all household appliance enterprises in China with it total 6,189 patents."

Other Chinese companies include: "Shanghai Zhenhua Port Machinery Co., Ltd. [which] has obtained over 20 world leading key technologies for container cranes and the Dual 40 Feet Containers' Quayside Container Crane invented by the company can improve the efficiency of handling containers by over 60 percent. Relying on the globally exclusive technology, Shanghai Zhenhua Port Machinery Co., Ltd. has seized 50 percent of the world's port machinery market. A second example is that Chery Automobile Co., Ltd. has jointly developed 18 kinds of worldly leading gasoline and diesel engines with its partners and exported such engines to various countries, and it is expected that it will export 13,000 engines to the USA this year. The sales of other products with independent brands of Huawei Technologies Ltd, ZTE Corp., and Kangnai Group Co., Ltd. in the international markets are also increasing steadily."

It's interesting to glance over these sites, since they give you an impression of the aspirations each of these mentioned brands have.

Read the translation of Gao's article on China Economic Net here.

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