Music in China Business Model: Life Without Oxygen Possible?

6 articles to go: IP Dragon on its way to its 1000th article

NASA discovered that life can exist even without the 6 building blocks that were presumed crucial; carbon, hydrogen, nitrogen, oxygen, phosphorus and sulfur, read here. In the same vain the music industry thought for a long time that their only way of survival was selling songs. But the digital revolution sucked this oxygen out of their business model. Good news for them is that life can still exist, even without seeming crucial building blocks. If paying for songs does not work anymore, it can be substituted with free songs plus advertising on the side. Just as some life can exist without oxygen, and as NASA just found out even without phosporous if it is substituted by arsenic.

Top100.cn is trying to survive in the most "toxic" (because hardly any customer wants to pay for songs) and competitive (Baidu is its formidable competitor) business environments in the world.

Top100.cn is also experimenting with charging for:

• selection of music, with recommendations and links;
• a subscription for cloud service, so that you can access music on different devices.

In Spock's words: "It's life Jim, but not as we know it." The music industry could take an example to the astrobiologists who now realise that their search should be much more comprehensive in order to achieve their goal.

Read The Economist article here.

Thank you Mikołaj Rogowski, former guest columnist of IP Dragon, for pointing to the Economist aricle and Hans Klaufus to the NASA press release.

continue reading ...

News From The Front Lines

Guest article and picture by Mikołaj Rogowski

Writing that the all-front global IPR war between the owners and the infringers is well underway might sound a bit of a truism so I will simply skip to the notable news from the trenches.

Chinese government owned China Daily and Taiwanese China Post both have some worth reading articles regarding details of the Beijing No 1 Intermediate People's Courts recent decision. The amount of +67000 dollars of compensation is by no means a substantial sum for a corporate giant of Microsoft’s size but it’s more than sure that it will be a motivation for the likes of Strongwel to make sure that no one under their roof is selling computers with illegal software.

Remember how some of the commentators used to mention that a time will come when the entire trend of litigation against Chinese based entities will turn against some weiguo firms? The time is now, it seems : China Post reports that Wall Mart and Best Buy have been sued in US court, by a Chinese company on the grounds of patent infringement. The article has some interesting data regarding the number of Chinese patent applications.

Final piece of news: not surprisingly my previous post on the topic of the health reform in china and what it means for the “western” medical companies is not the only material that focuses on the opportunities and threats that come with this Chinese reform. Go to Reuters. Once again, some very interesting numbers are attached.

This is the third guest contribution of Mikołaj 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, second here.

continue reading ...

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.

continue reading ...

“A new dawn for the China health-care or… Grand theft IP?”

Guest article and picture by Mikołaj Rogowski

Back in January, Chinese government announced another one of its subsidies. This time around public health-care is the target and a sum of $128 billion is the weapon. It is no secret that it is another of Beijing’s measures of calming the nation during the year of the economic slow down, however anyone who has been in a public hospital in China will tell you that the system is indeed in need of the equipment and drugs that can be bought with such a substantial sum. Reasons aside, the dawn of new health care means that in the years to come Chinese officials will be on the medical shopping spree. Forbes (http://www.forbes.com/2009/04/08/china-health-care-markets-equity-stimulus.html) has an interesting article on that topic. As Tina Wang points out, it is more than likely that most of the promised sum will go to the Chinese companies. However, in many fields of medicine there are simply no Chinese-made substitutes for the western made, high-end equipment and drugs. That leaves the government with no other choice than to contract with foreign producers. Seems that non-Chinese firms have much to gain, however it might turn out that there is even more to lose. Most if not all of the companies working in the aforementioned fields are IP-based. Without their patents and know-how their products would simply stand no chance of competing with their cheaper Chinese rivals.

The optimistic scenario: some of the items from the no doubt massive order list will not end up as targets of a disappearing act performances, only to later magically ‘reappear’ as certain solutions in ‘new’ Chinese made products.

The pessimistic picture? Remember how Russian military industry was always eager to sell their arms to the ever-expanding, ever-modernized People’s Liberation Army (People's Republic of China armed forces)? Seems that lately they have had a change of heart. After long negotiations concerning the sale of Sukhoi Su-33 Flanker-D carrier-borne fighters Russian party decided to scrap the deal because of the… Fear of the IP theft. Russians claim that China has already copied most of the equipment they have sold them. (More on this topic here: http://en.rian.ru/analysis/20090313/120554173.html). A month after the fiasco of that deal China Association for Science and Technology publishes an article in which it stated that "In some areas, Chinese weapons have either achieved or are very close to achieving international advanced standards,". (The China Post: http://www.chinapost.com.tw/china/national-news/2009/04/13/204090/China-says.htm) The question that just begs to be asked, assuming the report is trustworthy, is how did the Chinese industry reach such levels of standards and if the theft of the IP was one of the main factors that led to this achievement, what would stop the Chinese medical industry from doing the same thing?

It certainly would not be the first time. Thanks to a friend of mine I had an opportunity to talk to a executive at Optopol ( http://optopol.com/en/), a renowned Polish firm specializing in manufacturing of diagnostics equipment in ophthalmology. They have sold a few units of their devices in China and they were met with a disturbing pattern. Most of the equipment was returned shortly, labeled as nonfunctioning. After a brief inspection it turned out that all of the returned machines bared signs of disassembly and whoever did the dismantling had a much harder time putting the machines back together – hence the returns of the “faulty” equipment. Now why would anyone want to take these machines apart, I wonder? What is even more disturbing is that this practice seems not be local - different copies of their products were sent to various locations in china, with the same results.

What do you think? Have any of the readers had any similar experience with products that were sold in China?

For more on the reform check: http://online.wsj.com/article/SB123982492165322167.html

Text and picture Mikołaj Rogowski

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.

continue reading ...