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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Will the iPad Trademark Be Apple's Forbidden Fruit?

Must Apple resellers in Dongmen, Shenzhen stop selling iPads?
Photo: Danny Friedmann

Kathrin Hille wrote for the Financial Times (FT) that (mother company) Proview Electronics of Taiwan agreed to sell Apple the “global trademark” for the iPad name for 35,000 UK pounds, according to Proview. "[B]ut the two companies have subsequently disagreed about whether that deal included China", read Ms Hill's FT article here.

Of course there is no such thing as a global trademark, that is why Ms Hill put it between quotation marks. Trademarks are rather territorial creatures. It is beyond my imagination that the lawyers of Apple did not check whether the trademarks for the iPad in China were included. If I would buy something for 35,000 UK pounds, I would check and double check.

When Apple applied for the iPad trademark in China, it was rejected by the trademark office, because Proview Technology already owned the trademark. And Apple sought a declaration of invalidity at the Shenzhen Intermediate People’s Court. The FT reports that the court rejected this request by Apple earlier this week. Apple can, and I am certain, they will appeal.

In the short term Apple has more problems, now that 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). 

Guangdong Guanghe land Grandall were the law firms that assisted Proview.

UPDATE: More about ongoing trademark battles between Proview versus Apple here.

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Taiwan Dead Serious About Copyright On Funeral Music

Ralph Jennings reported for the Voice of America about two lawsuits of Taiwanese studios against funeral houses in Taichung. Mr Jennings writes: "Taiwanese funeral homes play pre-recorded music at traditional ceremonies, some of which also involve live bands and street parades to honor the dead." Read more here.

Lin Shu-hui previously wrote for the Taipei Times: "Music and Buddhist chants during funerals are usually provided by the funeral homes, mostly using a gadget called the Electric Buddhism Sutra Player or music CDs." Read more here.

A life band playing during a traditional ceremony can be seen as a public performance.
Article 7bis Taiwan's Copyright Law 2008: A performance by a performer of a pre-existing work or folklore shall be protected as an independent work. Protection of a performance shall not affect the copyright in the pre-existing work.
And relating to the CDs: according to article 5 (8) Taiwan's Copyright Law 2008, sound recordings are copyrighted works.

What about Buddhist chants that are played via a CD or an Electric Buddhism Sutra Player, which is a device that plays a sutra (teaching of the Buddha) continuously by going in a loop, and is often given away for free at Buddhist temples. Even thought the music and lyrics are not copyrighted (read more about Buddhism in relation to IP in Zen and the Art of Intellectual Property), the performance of the work is (article 7bis Taiwan's Copyright Law 2008).  

According to Wang Mei-hua, director general of the Taiwan government’s Intellectual Property Office these conflicts between studios and funeral companies signal that it is difficult to find a right compensation. She also pointed out that to collect copyright fees at the popular Karaoke bars is complex in Taiwan, because the island has five (I count 6) copyright collecting societies: 

• Music Copyright Association of Taiwan (MCAT); 
• Music Copyright Intermediary Society of Chinese Taipei (MUST); 
• Music Copyright Intermediary Society of Taiwan (TMCS); 
• Audiovisual Music Copyright Owner Association (AMCO); 
• Association of Recording Copyright Owners of ROC (ARCO); 
• Recording Copyright & Publications Administrative Society of Chinese Taipei (RPAT).  

This list I found in the interesting article that Professor Kung-Chung Liu wrote how the music CD business in Taiwan withered away and the online music industry in Taiwan flourished, and the rise and fall of P2P file-sharing services and how the copyright legislation responded to these developments. Read here.

Professor Kung-Chung Liu, who last year gave a speech at HKU on Cross-Strait Cooperation Agreement on Intellectual Property Rights (IPR) Protection, see here, is also a co-author of the excellent book called Intellectual Property Law in Taiwan which is edited by Christopher Heath, and part of the Max Planck Series on Asian Intellectual Property Law published by Kluwer Law International.

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Looking into the Back Mirror: "If I Were For Real"

If I were for real, is a 1981 Taiwanese movie (including Hong Kong teams) that was censored in Hong Kong when it was still a British crown colony, because it was deemed too critical about the privileged life of the happy few of party officials.

Li Hsiao-chang (played by Alan Tam) tries to face the challenges in his life with ingenuity. And he has to, since he made his girl friend pregnant. In fact the movie is a kind of Chinese version of the Being There (1971), Jerzy Kosinski's masterpiece. Interestingly, the melody of "Like a virgin", played by an organ you can hear at end of part I and beginning of part II. Billy Steinberg and Tom Kelly composed the song in 1983, which launched Madonna's career. Maybe this music has been put under the video later.

To placate his future father in law he wants to buy a bottle of Mao Tai wine 茅台酒. But he cannot afford the needed twelve "dollar" fifty.

The liquor sales man said sarcastically:
"Just what I thought. That is what Nixon drank. Prime Minister Tanaka too. It's not for you."

Then Li ask what the cooking wine costs. Answer: "One twenty."
 "I can afford that. Now an empty bottle of Mao Tai, a red candle."
The liquor sales man nods and gives a sardonic smile.
Later you see Li putting the cooking wine into the empty Mao Tai bottle.

Here is Part II: In the beginning you can hear the melody of "Like a virgin" and fast forwarding to minute 3 you can watch the liquor scene.

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Taiwan Shining Intellectual Property Blueprint For China Or Wishful Thinking?

What works for Taiwan, 
does (not)
necessarily works for China,
and vice versa.

During the press conference for the "Piracy Out, Competitiveness Up" campaign in Taipei (Taiwan) the chief secretary of the Ministry of Economic Affairs, Hung Shu-min said that Taiwan could be a model worth modelling for China in regard to bringing down business software piracy levels. Read Stacey Wu and Deborah Kuo's article for Focus Taiwan here.

In the Eighth Annual BSA Global Piracy Study (released last May, 2011) Taiwan scored third best in Asia. Taiwan's business software piracy rate 37 percent (2010), four percentage points lower than in 2006. Only Japan scored better (20 percent) and Singapore (34 percent) in 2010. Taiwan scored better than Hong Kong (45 percent). Taiwan's relative low piracy has probably enhanced foreign investments in research and development. China still has still a serious business computer piracy issue 78 percent in 2010.

However, between 2006 and 2010 China also reduced its business software piracy rate with four percentage points (from 82 percent in 2006 to 78 percent in 2010). So relatively China reduced business software piracy as much as Taiwan.

China's Three Experimental Gardens
But I agree that the People's Republic of China is in a unique situation where it has the opportunity to look at  a variety of Chinese communities with very different systems, and pick and choose the best from each system. I am sure Beijing is already keeping a good eye on Hong Kong, Macau and Taiwan.

The question is whether the measures that worked in Taiwan will work on the Mainland too. To name one huge difference: size. If your territory is not as humongous as China's, like Taiwan's modest size (or much smaller Singapore) each problem is easier to fix. On the island of Taiwan the local and national nearly coincide. One can argue that in China all problems are getting aggravated because the tension between the local and national interests. Taiwan's legal system, and policy is very different from that of China. But learning from each other's successes and mistakes seems a good way to make a shortcut to progress.

Do you think China can emulate Taiwan's anti-piracy system? Or do you think each system is well tuned to its unique situation and to transplant a different legal system and policies are not recommended?

Ronald Yu, lecturer University of Hong Kong wrote on personal title, via email:
"I remember that when I first went to Taiwan you could buy lots of fake goods - fake shoes, pirated recordings, etc. but it has since cleaned up a lot. I have thought, for some time, that Taiwan could act as a barometer for China's future, and if my assumption holds, perhaps China shall soon have a very clean, effective IP regime."

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Cyber attacks: "Biggest Transfer of IP in History" Points To China

After eating a rat, one should stay vigilant.
Photo: Tan Fugui

Computer security company McAfee discovered that during a 5 year time span 72 organisation were infiltrated via the internet. Jim Finkle reports for Reuters about what Dmitri Alperovitch, McAfee Lab's vice president of Threat Research calls "the biggest transfer of wealth in terms of intellectual property in history." Read Finkle's article here

Victims of the attacks were between 2006 and 2011:

• USA 49 times
• Canada 4 times
• South Korea 3 times
• Taiwan 3 times
• Japan 2 times
• Switzerland 2 times
• UK 2 times
• Indonesia 2 time
• Vietnam 1 time
• Denmark 1 time
• Singapore 1 time
• Hong Kong 1 time
• Germany 1 time
• India 1 time

Also many international organisations were targeted, including the International Olymic Committee, the World Anti-Doping Agency; and an array of companies, from defense contractors to high-tech enterprises, the computers of the United Nations and the Association of Southeast Asian Nations.

Because of the character of the cyber attacks a state actor is suspected. Mr [James] Lewis, cyber expert with the Center for Strategic and International Studies, was quoted saying: "Everything points to China." read Mr Lewis' report Cybersecurity Two Years Later January 2011. China is one of only countries in the world that enough knowledge in the field of cyber attacks to pull this off. And China is one of the countries that did not fell victim to this RAT (Remote Access Tool) attack.

Read McAfee's White Paper: 'Revealed Operation Shady RAT' (pdf, 14 pages).

UPDATE August 3, 2011:
Also normal citizens are victims of Chinese cyberattacks. Robert Lee of the Korea Herald reports that 35 million social security numbers of Korean civilians float in Chinese cyberspace, because of hacking attacks, read here.

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Taiwan IP Update: First Country That Protects Hologram In Its Trademark Law

Taiwan has amended its Trademark Act May 31, 2011. What has changed?

Progressive trademark act,
but with olfactory deficiency
Photo: NASA via Wikipedia

• Listing counterfeit merchandise online will be punishable by fines of up to NT$50,000 and up to one year in prison. 

According to the director-general of Taiwan Intellectual Property Office (TIPO), Wang Mei-hua (王美花) the scope of trademark protection expanded to include: 

• animation (movement) and laser logors (hologram);
• three-dimensional shape, colour and sound, already since the Examination Guideline for 3D, Colour and Sound Marks on 1st July 2004;
• and already since the Trademark Act November 2003 word; figure and symbol. 

Some argue that holograms are not perceived as sources of origin by consumers. But one can also argue that that article 15 (1) Trade-related Aspects of Intellectual Property Rights (TRIPs) does include holograms: "Any sign, or any combination of signs, capable of distinguishing the goods or services of one undertaking from those of other undertakings, shall be capable of constituting a trademark. Such signs, in particular words including personal names, letters, numerals, figurative elements and combinations of colours as well as any combination of such signs, shall be eligible for registration as trademarks. Where signs are not inherently ca pable of distinguishing the relevant goods or services, Members may make registrability depend on distinctiveness acquired through use. Members may require, as a condition of registration, that signs be visually perceptible.", most jurisdictions perceive some problems with the prescription of the last sentence that the representation needs to be graphically representable. Taiwan (Chinese Taipei) has become a member of the WTO of which TRIPs is an integral part on January 1, 2002.

Now a hologram's graphical representation changes per definition according to the angle you are taking towards it. However, since most intellectual property offices around the world already record the representations digitally, I think it should not have to be an insurmountable problem, as everybody who in the last few years bought a digital camera knows that these cameras include a movie function. So instead of photos, you can easily also make a very high quality movie of any dynamic representation. And even if you insist upon static photo's, there are cameras that can make a series of stills, each separated from the other by a fraction of a second.
 
The International Hologram Manufacturers Association (IHMA) is thrilled that Taiwan is the first country to protect holograms as a trademark. According to IHMA, Holograms can play a role in the authentication and detection process against counterfeit products, read here.  

Take notice that Taiwan is not taking the lead in every trademarkable representation. Scent is not specified as protectable representation. However, in case companies register it, TIPO will study executive orders.

Read more about non-traditional trademarks in the archives of Dr. Ralph Sieckmann, here.

• No longer is there a minimum limit for trademark infringement fines of 500 times the unit retail price of the infringed goods. Judges will have full discretion about the amount of the fine. 
• Applicants for certificates of origin (Taiwan's Geographical Indications) will have to use the location of origin or the logo identifying the location in their application in accordance with the Trademark Act. 

Read the China Post article here.

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Intellectual Property Bank in Taiwan and China (But Very Different)

Public sector

The China Post reports that the Ministry of Economic Affairs is setting up an IP bank: “The intellectual property bank is scheduled to be set up in June under the supervision of Taiwan's semi-official Industrial Technology Research Institute (ITRI). The bank will provide “protective shield” for Taiwan-based firms, especially those in the areas of renewable energy, green energy, mobile communications, LED, and flat panel manufacturing, by building patent portfolios and providing legal advice, the MOEA said.” Read here.

銀行

Private sector

Then an initiative from the private sector in China: Zhongtian Technology Company, set up an “IP bank” too. If I understand correctly it is a repository for patents and the patentees get some points from the bank, “the score and calculation method are linked with the contribution in principle”. “Items that can cash in rewards from the bank include new product results, new technological achievements and soft science achievements that are completed by employees or teams company resources or platforms, or with the help of research institutes, as well as various rationalization proposals.” Read here.
银行
Both pairs of characters mean "bank" (literally the first character means "silver" and the second "business"). 銀行 (yin2 xing2) is the traditional version, which they use in Taiwan and Hong Kong (only there it is pronounced as "nan4 hong4") and  银行 (yin2 xing2) is the simplified version which they use is the People's Republic of China and Singapore. The difference is indeed in the left character in the metal part. The numbers refer to the pronunciation: "2" means that the tone is going up. "4" means that the tone is going down.

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Taiwan Makes Priority Claims in Other Countries Possible In The Patent, Trademark and Plant Variety and Plant Seed Acts

Taiwan Intellectual Property Organization (TIPO) announced that the Presidential Office promulgated the amendments of some IPR laws on August 25, 2010, that makes priority claims possible in other countries. The amendments went into force on September 12, 2010. Implementing a principle of the Paris Convention for the Protection of Industrial Property (article 4) and incorporated in the WTO's TRIPs Agreement (article 2(1)). IP Dragon already covered the ECFA here. Read more here.

It concerns the following provisions:

Articles 27 and 28 Patent Act

Articles 4 and 94 Trademark Act

Article 17 Plant Variety and Seed Act

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USCC 2010 Report Released

2010 Report to [the U.S.] Congress of the U.S.-China Economic and Security Commission (USCC) has been released. The report is 324 pages long and IP Dragon will read those parts relevant to intellectual property in China, including market access, in the coming weeks.

If you cannot wait read the 4 page opening remarks of Chairman Dan Slane and Vice Chairman (why not vice chairperson?) Carolyn Bartholomew on the report which includes information about indigenous innovation and procurement in China without applying the WTO Governement Procurement Agreement (GPA) rules (which is not that strange since its status is observer since February 21, 2002, not party, see here, Hong Kong is party June 19, 1997 and Taiwan July 15, 2009), a striking name for China's approach to internet control as "networked authoritarianism" and its take on the hijacking of U.S. internet traffic. Read here.

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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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Fake Medicines Advertised on Taiwanese TV, Radio and in Newspapers

Taiwan's Health Minister Yang Chih-liang warns that the public should not believe TV, radio and newspaper advertisments selling fake pharmaceuticals. Minister Yang called the proliferation of counterfeit drugs more serious than drug trafficking.

Read the China Post article here.

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Surrealistic Copyright Infringement During Design Contest TIPO: Work Shattered, But the Truth Came Out

China National News reported the most surreal news IP Dragon has read for a long time. The Taiwanese Intellectual Property Office (TIPO) organised a design competition. The purpose was to make the public respect the intellectual property of other people. The Taiwanese student Wu Chih-Wei won the contest with 'Work - shattered' a design of a paper plane that was crashing because its tail was broken off. Wu received a medal and 5,000 Taiwanese dollar.

Then somebody recognised the design as being a copy of a design called 'Truth', made by Dutch designer Dennis Sibeijn, and Wu had to give everything back. In a way Wu succeeded in the purpose of the contest in winning by copying and then after the revelation crashing, as the paper plane design he copied. And after all the purpose of the contest was to make the public respect the intellectual property of other people, not to respect intellectual property yourself.

See Dennis Sibeijn's website DAMNENGINE.

Read the China National News report here.

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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

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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'. 

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

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

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

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

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

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

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

I will elaborate on these recommendations, later.

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MOU on IPR Between Philippines and Taiwan

Taiwan and the Philippines try to develop a so called Subic-Clark-Kaohsiung Corridor. Taiwan is located north of the Philippines, with the Taiwanese city Kaohsiung in the South. Subic-Clark-Tarlac Expressway is the longest toll expressway of the Philippines.

PNA reports via TradingMarkets.com that the Philippines and Taiwan held the 16th Republic of Philippines-Taiwan Joint Economic Conference (JEC), read here.

Four trade and investment agreements were signed:

• The Memorandum of Understanding (MOU) on Philippine-Taiwan Cooperation on Industrial Technology Development;
• MOU on SME Food Development;
• MOU on Intellectual Property Cooperation;
• and MOU on Standardization and Conformity Assessment for Electronic Products.

According to the Taiwan News it was also announced that ATA carnet systems will be activated June 15 between Taiwan and the Philippines to facilitate temporary imports to each other's country. The ATA carnet operations will be implemented only for cooperation in the intellectual property area, officials of the Taiwan Ministry of Economic Affairs told, read here.

In 2007 the two countries also signed a MOU on IPR, see here.

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Poisonous Optima Dog Food: Product Liability Or Blame The Counterfeiters?

Mr Ryan McLaughlin, blogger of Life in Suzhou, wrote about the death of Addie his beloved Golden Retriever around Christmas, read here. According to Mr McLauglin the cause is probably poisonous dog food. Addie was fed dog food from Optima, which is sold by food giant Mars, Inc.

Andrew Schneider of Seattlepi.com wrote: "Mars is aware of recent reports that dogs in the People's Republic of China have died as a result of consuming what appeared to be Optima brand pet food. However, Mars does not sell Optima branded products in China," Fair wrote me in an e-mail. "Our initial findings suggest that the affected pet food was not manufactured by, nor under the authority of, Mars or any of its affiliated companies." She told me that Mars only sells that dog food in Taiwan. But that statement does nothing to clarify the source of the poisoned food because Chinese officials said the Optima that sickened the dogs was imported to China through a Taiwan company, Natural Pet." Read Mr Schneider's article here.

So it is unclear whether Optima is the source or a counterfeit version of Optima. Product liability is for every company of crucial importance to enforce verociously every infringement of their intellectual property rights. And if they are liable to compensate in a decent way.

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US Customs Seizure Statistics 2008: "China number one, India number two and Hong Kong number three counterfeit producer"

The U.S. Customs and Border Protection and Immigration and U.S. Customs Enforcement divisions of Homeland Security gives some statistics about the numbers, characteristics and origins of counterfeit goods seized in the U.S. in 2008.
IPR seizures of goods from China rose 40 % by value in 2008. Footwear from China accounts for almost 96% of all IPR infringing footwear. "In 2008, China, India, and Hong Kong, the top three trading partners for IPR seizures overall, accounted for 94% of all IPR seizures of products posing potential safety or security risks." Read more about on the CBP.gov site here.

IPR seizures counterfeit products originating from:

• 1. China $ 221.7 million (81 %);
• 2. India $ 16.2 million (6 %);
• 3. Hong Kong $ 13.4 million (5 %);
• 4. Taiwan $ 2.6 million (1 %);
• 5. South Korea $1 million (<1%).

Read more statistics here.

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AmCham to USTR: "Remove Taiwan From Special 301 Watch List"

America's Chamber of Commerce (AmCham) in Taipei requested the Office of the US Trade Representative (USTR) to remove Taiwan from the Special 301 Watch List, a list of countries that are allegedly failing to adequately protect IPR and used as a trade tool.

Carrot more effective than stick?

In March, AmCham Taipei wrote a letter in which the laubable progress on the island was noted: Taiwan stenghtened its IPR legislation, tightened its enforcement, through the establishement of dedicated task forces, and the inauguration of a specialised IPR appelate court.

AmCham asserts that rewarding Taiwan for its achievement is the best encouragement for Taiwan "[..] to continue to move forward in IPR as parts of efforts to raise its investment environment to new levels of excellence." Read AmCham's request to Washington here.

Room for improvements

AmCham's 2008 White Paper is called: 'It's Time to Get Down to Business', see here.

The 2008 White Paper Committee on Intellectual Property & Licensing has produced a paper with recommendations to the Taiwan government, see here.

Crackdown on DVD copying factory

An example of Taiwan's actions against IPR infringements could be found in the Taiwan News of yesterday: There was a report by the Central News Agency of Taiwan that the Chiayi (northern Taiwan) unit of the Intellectual Property Protection Brigade under the Taiwan Provincial Police Administration held a DVD copying factory under surveillance for half a year. Whether this is (too) long, is hard to say, with the given limited information in the article. Read here.

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