iPad, youPad, wePad? Who Is the Owner of the Trademark in China?

iPads for sale in the Apple Store at Central, Hong Kong
 Photo Danny Friedmann

Apple introduced a third category, in between a laptop and smartphone, on January 27, 2010 (see the late Steve Jobs give the presentation here and demonstration here and here). April 3, 2010 it was intoduced in the U.S. and one month later in other places around the world. Two months later already a million of these devices were sold. And according to Reuters, Apple has sold 15.43 million iPads in the last 14 weeks of 2011.

So Jobs vision became reality. But how to name this third category? 

" ... and we call it the iPad." 

That other companies had already registered the name iPad in some jurisdictions could be solved, so the thinking went. For this purpose Apple set up a special purpose company to acquire these trademarks in all relevant jurisdictions. The name of the company IP Application Development Limited is interesting, because abbreviated it is IPAD Ltd. 

In the acquisition process, or rather effort to assign the trademark, a mistake was made. IPAD Ltd. and Proview Holdings, Proview Electronics (Taiwan) and Proview Technology (Shenzhen) entered into a written agreement, December 2009, whereby they agreed to sell, transfer and assign the Chinese trademark of iPad to IPAD Ltd. for £35,000. However, in the written agreement Proview Electronics (Taiwan) pretended to be the proprietor of the trademark and "assigned" the trademark to IPAD Ltd. But the real proprietor was Proview Technology (Shenzhen). John Paczkowski seems to have gathered some of the documents, see here. Then Proview Technology (Shenzhen) started to try to enjoin the sale of iPads in China for alleged infringement of their iPad trademark, and was successful in cities such as Shijiazhuang and Huizhou, according to David Levine in an article for Reuters. Or, if Apple wanted to avoid getting banned from the Chinese shops and gain control over the iPad trademark, they had to pay 10,000 U.S dollar. 

Also it became clear that Proview Technology (Shenzhen) had lodged applications with the Trademark Office, part of the State Administration for Industry and Commmerce, to transfer the Chinese iPad trademarks to Yoke Technology on May 7, 2010. 

The mistake by IPAD Ltd/Apple could have been easily prevented. If you go to Trademark Search of China's Trademark Office, part of State Administration for Industry and Commerce, and type in IPAD in class international trademark 9, you will see that Proview Technology (Shenzhen) registered the trademark January 10, 2000, see registration number 1590557 and that the effective period of exclusive right: June 21, 2011-June 20, 2021, however, it seems to be repealed because of non-use for three years). Also Proview Technology (Shenzhen) has registered the stylized version of the trademark, international trademark class 9, under registration number 1682310, application date September 19, 2000. Effective period of exclusive right: December 14, 2001- December 13, 2011. Continued after objection. So at least IPAD Ltd could have easily found a starting point to trace who owns the iPad trademark for international trademark class 9. 

Everybody knows Apple these days, but Proview used to be famous too. Proview Group is a producer of display devices, which  include LCD monitors, CRT monitors and flat-panel digital products. It has operations and offices around the world, including Taiwan, Mainland China (Shenzhen and Wuhan), Hong Kong and Europe. Proview Holdings was incorporated in Bermuda and is listed on the Hong Kong Stock Exchange. Proview International Holdings Ltd was the first Taiwanese technology company to list in Hong Kong, and was quite successful. In 1999 it teamed up with U.S. chip maker National Semiconductor "to launch the I-PAD, a stripped-down desktop computer whose main selling points were its Internet connectivity and ease of use." Then Proview was hit by the financial crisis and May 12, 2010, the Hong Kong Stock Exchange issued a notice that trading of Proview Holdings’ shares had been suspended. Read here Jeremy Wagstaff and Lee Chyen Yee's Reuters article on Proview's rise and demise, see here.

Timeline

May 20, 2011, Apple Inc. and IPAD Ltd filed a lawsuit in Hong Kong against Proview International Holding Ltd, Proview Electronics Co (Taiwan) Ltd, Proview Technology (Shenzhen), Yang Rong-Shan (founder of the Proview Group and  chairman and CEO of Proview Holdings who was adjudicated bankrupt on August 2, 2010) and Yoke Technology (Shenzhen). The Hong Kong case reveals many of the relevant facts: High Court Of The Hong Kong Special Administrative Region Court Of First Instance, Action no. 739 of 2010  (HCA739/2010). On June 28, 2011 the Poon J. (潘兆初法官), decided and July 14, 2011 he motivated his decision to allow  the interlocutory injunction and restrain the defendants to "sell, transfer, assign, otherwise dispose of and/or give good title" to the Chinese iPad trademarks. 

May 24, 2010, Apple instituted proceedings against Proview Technology (Shenzhen) in the Shenzhen Intermediate People’s Court and filed an application for Asset Preservation Order (APO) in respect of the Chinese iPad trademarks. June 12, 2010 the application was granted on 12 June 2010, subject to the APOs obtained by some other Mainland banks.

Proview Technology (Shenzhen) has started suing Apple resellers at the Shenzhen Futian District Court (December 30, 2011) and Huizhou Intermediate People's Court (January 7, 2012), read Katrin Hille's FT article here and about Apple losing there here, at Stan Abram's China Hearsay.

According to Shenzhen Media People’s Court Apple lost its trademark ownership on December 6, 2011, see Huang Mengren's article here. Apple decided to appeal at the Guangdong Higher People's Court.
February 22, 2012, there was a trademark infringement case between Proview and Apple at the Shanghai  Pudong New Area People's Court. Apple was successful to the extent that Apple's iPads were not banned from the shelves. But as Stan Abrams of China Hearsay made clear, see here and here, the real question is who owns the iPad trademark. This will be decided at the Guangdong Higher People's Court, February 29, 2012.

In the mean time Proview Electronics (Taiwan) has accused Apple of fraud in a lawsuit filed at the Superior Court of California, County of Santa Clara. See here. However, in contrast to trademark lawyer Martin Schwimmer of The Trademark Blog, who was quoted by David Levine responding to the case: "I have never encountered this level of ruse", see here: I think it is not so strange nor unusual if you set up a special purpose company for the acquisition of a name such as iPad. Especially since iPhone is so ubiquitously known that if Apple pursued the trademark iPad, it would have definitely driven up the price, as this case proofs: from 35,000 pounds to 10 million U.S. dollars. There is no legal requirement to disclose the reason why you want to buy a trademark. Or is there?

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"Rethinking IP" Round Table HKU - Drake University

Knowles Building, at HKU
Photo: Danny Friedmann

Last Saturday morning, lawyers, academics and students from Hong Kong, Macau, Singapore, Australia, Japan and the U.S., all passionate about intellectual property rights, gathered at the University of Hong Kong for a round table discussion on intellectual property and policy. It was organised by the Law & Technology Centre of the University of Hong Kong (HKU) and the Intellectual Property Law Center at Drake University Law School located in Des Moines, Iowa. The 10th floor of the Knowles building with its great wooden concentric structure accommodated the participants for this purpose.

The programme consisted of four panel presentations (will be separate blog postings) that urge us to rethink:
Panel I: IP Protection in Hong kong;
Panel II: IP Protection in the Digital Age;
Panel III: IP Protection in Mainland China;
Panel IV: IP Protection globally.

After the opening remarks by professor Douglas Arner, head of the Department of Law of HKU, who welcomed everybody and told that Law & Technology Centre of HKU has already existed for a decade.

Professor Douglas Arner, head of Department of Law, HKU
Photo: Danny Friedmann

The opening speech was given by Peter Cheung, director of the Intellectual Property Department (IPD) of the HKSAR government. 

Left professor Peter K. Yu, Drake University and the right Peter Cheung, director IPD, HKSAR Government
Photo: Danny Friedmann

"Trading Intellectual Property in Hong Kong"   

Mr Cheung recalled that he was invited by the Motion Picture Association of America (MPAA) to come to Hollywood. There, he familiarised himself with the Three-Act Structure, which is a success formula to make a blockbuster movie. But, as Mr Cheung explained, it can be applied to reach his goal, namely to use IP trade to drive stakeholders' economic development. In Act I the context is given, Act II the challenge, and Act III the resolution. I am sure that the Hong Kong movie scene uses a similar scheme to keep the audiences captivated. Those Chinese from the Mainland, versed in Marxism, might recall the different acts as Hegel's thesis, anti-thesis, synthesis, respectively. So if Act I is the setting whereby Hong Kong is introduced as a Special Administrative Region with the ambition to become a regional knowledge hub, Act II is the challenge of how to get there? In other words, how to apply IP, how to monetise these intangible assets? Mr Cheung was inspired by a Japanese car manufacturer who was not interested in cars, but in the money that you can make with cars. This same approach should be followed with IP. (IP Dragon wonders whether it is really possible to exploit IP, without really loving it?). MBAs teach you many interesting things but not about the role of intangibles, Mr Cheung said. Therefore, we need to map out our niche, and make an inventory of what is already available, predict change, seize opportunity and collaborate to innovate, and execute these processes in parallel. Because, we live in an IP economy, Mr Cheung told. The significance becomes clear when one looks at the most valuable brand in the world: Coca-Cola (71,861 million U.S. dollar, according to Interbrand in October 2011). If all tangibles are destroyed, Coca-Cola could resurrect itself because of the worth of its intangibles. IP can be lucrative, even though it is sometimes tiny. For example Mr Cheung knows the composer of the two second jingles.
If one accepts that one person in a million goes to the best university and has the change to become really  innovative, then Mainland China wins (with 1,340 people), Europe will be in second place (833 person ) and the US (312 person) third place. Hong Kong gets only 8 of these talented people. Hong Kong should become a platform where demand and supply come together. According to Mr Cheung Hong Kong can bring together IP owners that want to sell some of their IP, via IP intermediaries (for this Hong Kong needs officials, professionals, scientists and financiers) so that investors can buy IP. Now only goods and services are traded. There should be transformation to IP.
Hong Kong can have a first-mover advantage in IP trade. Hong Kong has a rule of law, attractive tax system, with a bilingual work force, and is not a gate-to-China, but is part of China. Hong Kong has to take the initiative and make it blaze its own trail. Shenzhen already has a trade platform, but just a website and they seem not very active, they do not have an international nor a holistic approach to the trade platform. China each province has its own platform. In Hong Kong there are more professionals.
The HKSAR government seems to have a lot of attention to niches such as Islamic banking. In the audience there was some concern about whether Mr Cheung is getting enough support from the government. Mr Cheung is well positioned to convince the HKSAR government for his case.

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TGIF: Vacuum Cleaner Inventor Says The Darndest Things

Thank goodness it is Friday

Sir James Dyson was quoted by Dan Milmo in the Guardian, here, saying:

"They are running the risk of being expelled from the WTO. They are creating an unlevel playing field by taking our technology and selling it all over the world." 

With "they" Mr Dyson means China. I understand Mr Dyson's frustration, but the quote is grotesque. China cannot be simply pulled out of the World Trade Organization (WTO) equation. China is one of its key players. The idea about the WTO is to resolve the issues via a binding dispute resolution system. When Mr Dyson would have said that a dispute resolution procedure could be started against China's lack of IP enforcement or non-compliance of the national treatment principle (treating foreign companies at least as good as domestic ones), it would have made more sense.  

Police in Shenzhen. Aren't we ... visible?
Photo: Danny Friedmann

In the piece Mr Dyson, who invented the bagless vacuum cleaner and the bladeless electronic fan, makes the following clueless allegations to China:

- "China benefits from strictly monitored IP regimes outside its own border, but has failed to crack down on domestic offenders as it pursues rapid economic growth." Does China benefit much from strictly monitored IP regimes, if their alleged infringed products cannot enter into other countries? Did China fail to crack down on domestic offenders? One can argue that China failed to crack down on domestic offenders inadequately or insufficiently. But to assert that China failed to crack down on domestic offenders is simply not true (think about all the campaigns with the fancy names, see here 2010 and here 2011).
Mr Dyson backs up his claim with anecdotal, evidence: a patent infringement case he won, but where the infringers did not pay the fine nor stop their infringing activities.
- "China's reputation among foreign investors is being diminished by the flouting of product copyrights and a two-speed patent system that appears to discriminate against non-Chinese applications."

With "product copyrights" probably intellectual property protection is meant, which includes invention-patents, utility-patents, design-patents, trademarks, copyrights and trade secrets. To make such sweeping statements is not useful unless they are backed up by research that gives the status on how the intellectual property rights of British industries or European industries are protected. Until now Chinese foreign direct investments did not correlate much with China's level of intellectual property enforcement level. It seems more to correspond to China's economic growth. And I have not come across evidence that foreign patents on average are examined slower. Very broadly speaking a utility and design patent takes about half a year and an invention patent can take up to two years time. 

Dyson, the company, is spending 10 million UK pounds per year on legal costs (according to an article by James Hurley in the Telegraph, see here) and is also inventive to bring the intellectual property in China challenges under the attention of people in British government, such as David Cameron (prime minister) and Baroness Wilcox (IP minister). 

Inconvenient truth about intellectual property infringement

A Dyson bagless vacuum cleaner costs about 4,000 Yuan in China. Factory workers in Shenzhen make about 1,200 Renminbi per month and middle class earnings are about 4,000 Renminbi per month. The inconvenient truth is that the more a company has spent on research and development (as is the case with Dyson) or marketing and advertising (as is the case with luxury brands) the bigger the incentive for infringers to ride on the coat tails of some other companies' economic activities.

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Shenzhen Intellectual Property Index Starts Before Hong Kong's

Race has only just begun, everything is still possible...

Congratulations to Shenzhen with its own IP Index. There is a fierce competition going on between Asian cities to become the IP hub of Asia. And have your own IP index is conducive to attain this goal. For Hong Kong, with its peculiar patent system, read here, the competition seems difficult, but who knows, the race has just started.

Read Anita Lam's SCMP article here. Hat tip to Ron Yu.

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Must Read Monday: Bye Bye Shanzhai, Hello Mainstream Smartphones

Photo: Close Encounters
To Migrate or not. A wildebeest's dilemma:
"Starvation if I stay,
or risk of being eaten by a crocodile if I go"

Shen Jingting wrote an excellent article for China Daily about the epic migration taking place within the Shenzhen mobile phone industry.

Shen is distinguishing three phases: 

• Production of Shanzhai phones and focus on emerging markets, such as India and Nigeria and delivering to the domestic market.
• Transform into a legitimate supplier with good relationships with operators in emerging markets, also because when a Shanzhai producer is acquiring a high profile it will be vulnerable for IP lawsuits (as happened to "G'Five International Ltd, a Shenzhen-based handset supplier that mainly sells phones in Asian and African countries, and was sued by Nokia in India for alleged infringement of intellectual property rights."). Or working for international brands such as Motorola or Samsung. 
• Follow the Taiwan-based HTC Corp. strategy, that has succeeded in entering profitable markets in Europe and North America. 

There is enough ambition to reach the third phase. Huawei even expects to be a top five global mobile phone supplier by 2014. And ZTE wants to become one of the world's top three mobile phone vendors by 2015.

Read Shen's article here.

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Shenzhen Chinese Hop Border Hong Kong For Porn Movie in Three Dimensions

For some Daoist sex advice read
China Expat's article here.

Some months ago an American porn company sought my advice on copyright law in China. "Is porn copyrighted in China and can you sell it there?" A movie, whether porn or not, is copyrighted, thus protectable and enforceable in principle (since the amendment of article 4 Copyright Law, after the WTO dispute resolution DS 362 panel's decision, read more here). But that does not mean you can sell it legally in China. Pornography is prohibited since 1949. Exploiting a popular porn site can get you into jail... for life! You can read about the 2005 case here. That information was a cold shower for the U.S. porn company. Therefore I was extra surprised to read the rather positive and extensive article (4 pages) in the Global Times (China's answer to CNN) on porn movie tourism from Shenzhen to Hong Kong movie theaters. Read here. Because it is a Hong Kong movie, if it was not porn, it would be well positioned to be shown in China, since Hong Kong movies are not considered foreign, see here. China Hearsay's Stan Abrams has written so extensively about the restrictions on foreign movies in China that he, tongue-in-cheek, is considering to write a book about it, see here.   

I am intrigued by everything with Zen in the title, see here. But I missed all the commotion around the movie 'Sex and Zen: Extreme Ecstacy' in 3-D.  It's a costume drama released in Hong Kong, South Korea, Australia and New Zealand on April 14, 2011. Why is the Global Times so tolerant in their descriptions about this porn movie and the tourism it spawned to Hong Kong? Is it because the porn movie is, well, Chinese culture? "Based on the 1657 erotic novel The Carnal Prayer Mat written by Qing Dynasty author Li Yu that chronicles the sexual exploits and orgies of a young Ming Dynasty scholar named Wei Yangsheng who realizes that true love is hard to find." Or is it just good for Hong Kong business, and China is considering it should be more lenient towards Hong Kong since it took away its monopoly to have a Disneyland on its Special Administrative Region by granting Shanghai permission to have a Disneyland too. Well if you have another speculation, let me know.

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Siren Got Rid of the Letters "Starbucks"

Starbucks revised its logo for the fourth time (1971, 1987, 1992 and now in 2001), see overview here.
It was announced already January 5, 2011 by senior creative manager Mike P. here.

Logo change announced on Hong Kong TV on the MTR
Photo: Danny Friedmann

However, only May 27, 2011 the new logo was introduced in Hong Kong and Shenzhen. To change a brand like that is a huge operation, which starts with the design and customer surveys, then the registration of the trademark for the new variant logo.

The rationale behind the move, in the words of Mike P:

"From the start, we wanted to recognize and honor the important equities of the iconic Starbucks logo. So we broke down the four main parts of the mark – color, shape, typeface and the Siren. After hundreds of explorations, we found the answer in simplicity. Removing the words from the mark, bringing in the green, and taking the Siren out of her ring. For forty years she’s represented coffee, and now she is the star."

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The Process of Trademark Counterfeiting Captured

How An External DVD Drive Becomes A Counterfeit Apple in 5 Minutes

Dong Men (东门= East Gate) in Shenzhen is an incredible place. You can find buildings with small shops that all sell one component of a mobile phone or computer per floor, and on the next floor another component. On Shennan Central Road there is such a building named 华 Hua 强 Qiang (China Strong) 电 Dian 子 Zi (Electronic) 世 Shi 界 Jie (World) where you can buy external DVD drives.
In this photo series the whole procedure of counterfeiting is captured.

On Shennan Central Road there is a building
where you can find external DVD drives. 

Up the elevator you can see a red banner with yellow characters:
"Severe prosecution will be engaged against those selling counterfeited products illegally"

Here is the empty red casing

Then a sticker with the Apple logo came out of a drawer.

Adhesive plastic removed.

Sticker was placed

And ready is the counterfeit Apple DVD drive.

Just outside of the building is an official Apple dealer

Apple does not make any external DVD drives, to my knowledge. The counterfeit DVD drive, play only, no burning is possible, was on offer for 150 RMB, which is a little bit less than 23 US dollar.

Happy World Intellectual Property Day 2011!

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Message from IP Dragon: Happy 2011 from Shenzhen

IP Dragon wishes all his readers a happy, healthy and productive new year. Just moved from Hong Kong to Shenzhen. Only a few kilometers apart but a world of difference. From common law tradition to civil law tradition. From the Special Economic Region to a Special Economic Zone. Although I will still be going to Hong Kong regularly.

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Parallel Universe Shenzhen: Where The iPads Run on Android

Androids have landed on Shenzhen's beach
Photo Danny Friedmann

By Michiel Tjoe-Awie

The market penetration of Google's Android mobile operating system came second, behind Nokia's Symbian but was preferred above Apple's iOS. The iPad is still the most popular “pad”. Wouldn’t it be great if we could have the best of both worlds. I mean that Apple would strike a deal with Google to make a variation of iPad, running on Google's Android operating system. Unthinkable? Why? Just because it should contradict Apple’s goal to dominate the market for operating systems? Remember you once learned the difference between a consumers (demand) market, and a manufacturers (supply) market? If the consumer dictates the manufacturer what to make we talk about a demand market, a manufacturers market works the other way around. The Chinese plan economy was a typical example of the latter. But thinks has changed. Now it provides only what the market wants. No boundaries. The market has made it’s request and has produced a miraculous new product. Something like a beautiful woman that likes to watch football or a child that likes to listen or a dog that doesn’t smell or an iPad with a Android operating system. What? I said: “an iPad with an Android operating system!”

Copycats are not hindered by the animosity between Steve Jobs and Eric Schmidt (from Google). So the unthinkable has become true in the parallel universe of cloning:

Neo of Shanzhai reports that the second generation iPad inspired device in that parallel universe for clones, copycats and counterfeiters Shenzhen will be manufactured with a Google's Android 2.2 operating system.
By the way in this case the Apple logo was not used on the clone. Design patents and copyright, and even trademark (for the use of the name iPad or when the form was registered as trademark) might be infringed.
Read the Shanzhai article with pictures of genuine and clone for that parlour game: find the differences here.

Text Michiel Tjoe-Awie

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Chinese Companies Are IPR Victims Too

Lin Meilian wrote for the Global Times (China's answer to the BBC or France24) an article about a Chinese company whose IPR is being faked.

Ms Lin writes: "The report in Shenzhen-based Jing Bao quoted Fang Zhen, marketing manager of Crastal Technology (Shenzhen) Company, saying that some of the company's patented products were found to be copied overseas and then imported back to China."

In the article it becomes clear that in order to protect your invention it is essential to file for a patent application and in order to enforce your patent to register it at the customs.

Of course more Chinese inventions, brands and creative works are copied by foreign companies.

According Ms Lin, the procuratorate of Haidian district in Beijing revealed that trademark infringements represent 95 percent of all IPR cases. Of these cases 30 percent involved counterfeiting of the trademarks of local brands.

Read Ms Lin's article here.

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Is Apple's iPad a Knockoff from Shenzhen Great Dragon Brother's P88, Or Is the Latter A Case Of Pre-emtive Cloning?

Stan Abrams of China Hearsay blogs about Shenzhen Great Dragon Brother's P88, which is very similar to Apple's just released iPad. Mr Abrams, never losing his ironical talent wrote about Shenzen Great Dragon Brother's assertive stance towards IP rights in relation to Apple: "[T]he company apparently filed a design patent, so it’s doing its part to create indigenous IP. All those public education campaigns seem to be working!" Read Mr Abrams' blog here.

Aritz Parra of El Mundo interviewed Mr Wu Xiaolong, CEO of Great Dragon Brother who said that the P88 has been already on the market in China for half a year and was first presented to the world at the International Electronics Fair in Berlin six months ago. Read the article ''Made in China' vs Apple: ¿Quién copió a quién?' in Spanish here.

Earlier, Elaine Chow of Shanghaiist wrote that the P88 was already three months available at the Chinese market, which she calls pre-emtive cloning. Read Ms Chow's article here.

Sometimes Apple has to deal with knockoffs that are better than the real thing, as was the case with the knockoff MacBook Air, read here. Although the P88 has a bigger screen and a much larger disk drive (P88: 160 GB HD versus iPad: 64 GB Flash) and does multitasking and the iPad does not, the P88 has only a battery life of 1,5 hours, while the iPad has 10 hours. Shardendu Gautam compares the technical features for ThinkDigit, read here.

Yesterday, Song Jiang of the site Shanzai.com, that is following the Shanzai (Shan Zhai Ji = 山寨机 , read more about it here ) phenomenon, wrote:

"Just what will happen when the iPad gets launched in China remains to be seen, but I have a feeling that any presiding court in China might just sway in favor of Great Long. This could cause significant ripples in the intellectual property debate surrounding Chinese-made, and more recently, Chinese-designed products and their increasing penetration of traditionally Western dominated markets."

Picture by Shanzai.com.
Read Song Jiang's article here.

UPDATE:

Read Stan Abrams' article 'Shanzhai Saturday: Dawn of a New Era' about double shanzai, read here.

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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.

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Huawei Top PCT Applicant 2008; China Sixth Largest User of PCT

The People's Republic of China has the ambition to shift its manufacturing based economy to a knowledge based economy. Therefore Chinese companies need to innovate, and protect their innovations by patents, internationally.

If a company registers its patent in one country, it is only protected in that country. Therefore companies need to register their patents in every single country were they want to be protected. Using the Patent Cooperation Treaty (PCT), however, they can file patent applications in different countries in an efficient way: filing at patent applications in more than one country using one patent office. A real internatonal patent does not exist yet, but the second best is to get a bundle of national patents, using the PCT.

Is China a heavy PCT-user?

A press release of the World Intellectual Property Organisation (WIPO) reports that Shenzhen based Huawei Technologies Co. Ltd. filed the most Patent Cooperaton Treaty (PCT)-applications in 2008, namely 1,737. More than the 1,729 PCT-applications filed by Panasonic Corporation of Japan or the 1,551 patents by Koninklijke Philips Electronics N.V. of the Netherlands.

One other Chinese company, ZTE Corporation, also a Shenzen-based telecommunications company, ranks at the 38th position in the top 50 PCT applicants 2008 list. So Chinese companies in general might be not heavy PCT-user yet, but two Shenzhen ( 深圳市) companies certainly are.

The People's Republic of China improved by one place, to become the sixth largest user of the PCT (overtaking United Kingdom's position). It is expected that China will France's fifth position in 2009.

Read more here.

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Inside the Dragon's Den: Observations from a Counterfeit Watch Factory

Shenzhen based journalist and blogger (Shenzhen Zen) Justin Mitchell embedded himself for online publication Asia Sentinel inside a counterfeit watch factory in Shenzhen that sells them under brands such as Rolex, Seiko, Omega, Fossil and Tag Heuer, BMW, Bacardi, Dunhill, and the Beijing Olympics characters.

Mitchell describes the working conditions under which the counterfeit products are manufactured as Dickensian: the chemical fumes incurre long-term brain damage to the teen-aged employees. Pretty disturbing observations. For the culprit in the story, mr. Wong, there may be some hope left that he will go legit:

"Meanwhile, Wong continues well below the radar grinding out his watches, though he is proud to say he also makes “real” goods as his business straddles a line between legitimate and counterfeit."

Read Mitchell's interesting article here.

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Suspected Ringleader of Counterfeit Computer Network Equipment Finally Caught

In September a succesful joint operation was carried out by the Shenzhen Public Security Bureau and private security firm I-OnAsia. US$ 25 million worth of counterfeit computer network equipment (sold under international brands such as Nortel, Cisco Systems and Hewlett Packard) was seized and seven people were arrested in 10 raids carried out simultaneously across Shenzhen.

At the time the suspected ringleader, Tony Li Zhendong, got away. May 2 2, he was finally caught, after months of intensive surveillance by I-OnAsia.

A spokesperson for I-OnAsia said:
"After eight’s months tracking on the footprint of him by conducting surveillance and using technology such as GPRS technology, we and ECID [China's Economic Investigation Department] caught the right time to arrest him on the evening of 22 May 2007 in this new apartment in Shenzhen. He was then brought back to the Police Station and now detained for further enquiries and prosecution."

In the South China Morning Post of May 26th, Martin Wong and Nick Gentle report about the events. Read their article here.

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Bluetooth Earphones Infringement One of Shenzhen AIC' Top 10 IP Cases 2006

The Southern Daily of March 13, reports (in Chinese) that the Shenzhen Administration for Industry and Commerce (AIC) announced the top 10 Intellectual Property Protection Cases for the year 2006 in Shenzhen on 12 March 2007. The cases have involved in household appliances, mobile phones, medicines and general daily supplies. One of the top 10 cases concerns the infringement of Bluetooth earphones.

A co-operative effort between Bluetooth SIG Inc., the local authorities and Asia’s Brand Protection Consultancy, I-OnAsia Ltd has led to the arrest of principals of Shenzhen BlueBird Hi-Tech Company for Infringement of the Bluetooth SIG, Inc registered Trademark. This case has now been transferred to the Public Security Bureau for criminal prosecution.

On 17 July last year, the Administration for Industry and Commerce conducted a search on Shenzhen Bluebird Technology Ltd (深圳藍鳥科技有限公司) which was located on the 4/F, Fanen Building, No. 14, YueHua Road, MeiLinYueHua Industrial Park, FuTian Area. (福田區梅林越華工業區越華路14號凡恩大廈4樓) On-the-scene, 2868 pieces of suspected counterfeit “Bluetooth” earphones, 23,000 pieces of labels and 7,460 pieces of packaging material with infringed “Bluetooth” trademark were seized. Due to the fact that the litigant is not authorized and is presumed to have produced counterfeit “Bluetooth” earphones, the behavior has been suspected a crime. The bureau has then transferred this case to the Public Security Bureau for further criminal prosecution. Two suspects have been arrested.

Update: Derek Elmer, founding partner and chief executive officer of I-OnAsia takes a deeper look at the crackdown of counterfeit in this case, read here.

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Where to Find Genuine Software in Shenzhen? "Maybe in Shanghai"

Dr John, who wants to stay anonymous for obvious reasons, did an investigation into copyright piracy in Shenzhen for The Inquirer. He and his wife went from the back alleys to the public shops looking for pirated software. Dr John's story, with pictures made by his wife, is quite disturbing.

The most hilarious lines of this investigative piece of journalism:

"I asked the guy running the software shop where I could find a copy of genuine Microsoft Windows. I told him I needed it for something important. He really had no idea. "Maybe Shanghai. You might be able to buy it in Shanghai, but it will be very expensive.""

Read Dr John's article here.

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