Due to private matters I had to attend IP Dragon was not active in the blogosphere for some time. However, in that time I did go to Zürich and met an interesting IPR scholar. Anyhow, I will resume blogging soon.

Thanks for your kind letters.

IP Dragon

Mark Barton and Warren Giles wrote the article “Mandelson warns China on trademark violations” for Bloomberg and South Africa’s Business Day is running the story.

The above mentioned article also mentioned briefly a survey. EurActive wrote more elaborately about it: “According to the EU Chamber of Commerce in China’s 2006 Business Confidence Survey, weak Intellectual Property Rights (IPR) protection is still regarded as one of the key challenges of doing business in China, with only 9% of respondents never having encountered IPR protection related problems in China and 67 stating that the present enforcement of IP laws and regulations in China does not act as an effective deterrent.
This is a cross-sectoral problem which causes huge losses for sectors as varied as agro-chemicals, textiles, automotive and pharmaceuticals.“

Read more here. The direct link to the EU Chamber of Commece in China survey itself I could not connect to, yet.

In December 2005 IP Dragon blogged about a trial by the governement of Guangzhou to charge Karaoke parlors. According to the Pacific Epoch the Guangzhou governement was leaning towards a one Yuan fee for each time a song is played. Read more here.

Managing IP gives an update on Karaoke royalties in China. Howard Tsang and Cyril Yeung of Wilkinson & Grist wrote that the National Copyright Administration of China (NCAC) has proposed a tariff of 12 Yuan per room per day.

It seems that the original Guangzhou governement’s fee proposal deviates from that of the NCAC. Everybody who ever went crooning in a Karaoke room, knows that 12 songs per room per day is a very low number of songs played. But more important, the relation between the frequency of songs played and the royalties is broken, if Karaoke parlors have to pay a fixed fee per room per day. This way unequal songs are compensated equally. Musicians of popular songs should receive more royalties, to compensate for their quality, which will be an incentive for other musicians to make good Karaokeable music.
Technically it is possible to determine which songs are played how many times in which Karaoke parlor, in Guangzhou a Chinese proprietary system for this was used.

Who is going to collect and distribute the royalties?
“The NCAC has generally approved the centralized collection of royalties by the Music Copyright Society of China and the China Audio & Video Collective Administration Association (in preparation).”

The NCAC has lauched a public consultation, which ended September 20, 2006. Whether it will change the fee structure or hight remains unclear.
Read the Managing IP update here.

Last year Chan Nai-ming, BitTorrent uploader under the alias Big Crook was sentenced to three months in jail by an Hong Kong court. Chan was out on bail until his appeal, which began September 26th.

“At the hearing the defence argued that Mr Chan was merely the “seeder”, and that the downlaoders had initiated the actual distribution. His council addes that whereas Mr Chan might have infringed copyright in some way, it was not an extent that warranted criminal sanction. The prosecution argued that the law clearly states that putting files into a BitTorrent format and sticking them on a bulletin board amounts to distribution.”

Source: Economist City Briefings Hong Kong, here.

National Intellectual Property Law Enforcement Coordination Council (NIPLECC), which consists of the Office of the U.S. Trade Representative; the Department of Commerce, including the U.S. Patent and Trademark Office and the International Trade Administration; the Department of Homeland Security, which includes U.S. Customs and Border Protection and U.S. Immigration and Customs Enforcement; the Department of Justice; and the State Department. The U.S. Copyright Office serves in an advisory capacity.

In the NIPLECC’ fifth annual report ‘Report to the President and Congress on Coordination of Intellectual Property Enforcement and Protection’ it is summarised what actions they have taken to increase IPR enforcement in China, see here (pdf).

Chapter VI Results of Coordination, page 31-34 starts with China: Concerted action to address a top priority.
However in Chapter VII a completer list of actions per government department is given.

Ray Parry, editor-in-chief of counterfeit.com, wrote an interesting article: The Great Gall of China? Counterfeit.com is according to the site an online voice for the anti-counterfeiting industry.

Parry proposes the following as a proactive, deterrent-type, IP protection programme specifically addressing China:

“Well first, brand owners should develop strong relationships with their home base country’s Chinese embassy and then, which is patently obvious, ensure that any trademark or copyright is registered in China.”

“Next (and this is a really novel twist) publicise the fact that protection exists, in Chinese of course, on a continuous basis in major Chinese newspapers such as the Xinhua Reference News which has the largest daily circulation in China. If currently manufacturing or intending to manufacture in the country, publish also in the province or area where the production facility is located. In my experience, perhaps inexplicably, this form of direct, public, approach can often have the desired deterrent effect and persuade would-be counterfeiters, not to stop their activities of course, but to move on to other branded items apparently not subject to the same exposure.”

Read Parry’s elaborate article here.

This week the “usual suspects” are Counterfeit Chic and China Law Blog. Their postings about intellectual property in China were concentrated on Tuesday.

Monday, September 25

Tuesday, September 26
Counterfeit Chic’ Knockoff News 33 supplied a mer à boire for IPR in China:

Alex Littlefield wrote for Radar Online the article Knockoff Nation with great pictures, here.

Oupa Segalwe reported for All Africa about South Africa Revenue Services’ Commissioner Pravin Gordhan and the Chinese Minister General Administration of Customs Mu Xinsheng, signed an agreement to strengthen bilateral cooperation between the two countries’ customs administrations in order to combat the smuggling of counterfeit goods. Read here.

The European Union and China increase customs cooperation to fight terrorism and counterfeiting. To hasten checks at Rotterdam in the Netherlands, Felixstow in Britain and Shenzhen in China, a pilot project with container screening technology will be set up with the participation of Hutchison Whampoa of Hong Kong, a conglomerate controlled by Li Ka- shing, Hong Kong richest business man. Read Bloomberg and Reuters story that was run by the International Herald Tribune here.

Dan Harris of China Law Blog has a good post about Trademark Law and refered to his article he wrote for the China Trade Law Report here.

China Law Blog had also a post about the US-China Business Council (USCBC) 2006 survey about the perception of American companies on the operating and investment climate in China, as well as China’s progress in implementing its WTO commitments, including IPR enforcement, see here.

“IPR enforcement ranks as third most important operating issue. IPR propetection’s dip in this year’s rankings may reflect the greater immediate concerns confronted on the human resources and licensing fronts. It may also reflect the business community’s view that the PRC central government now acknowledges the importance of IPR enforcement and is taking steps to address it, although problems remain in the implementation of laws at the provincial and local levels.”

“For the second straight year, most respondents (57 percent) reported that China’s IPR enforcement had remained unchanged, though 33 percent reported some progress. The remaining 10 percent of respondents said enforcement had deteriorated. These results are slightly better than 2005, when 59 percent of respondents reported no change in China’s IPR enforcement, 26 percent noted some improvement, and 11 percent indicated deterioration in enforcement.”

“The survey further asked respondents about specific legal changes that China has made in the past year. In April 2006, China issued new rules for transferring IPR cases fro criminal prosecution. Thirty-five percent of survey respondents indicated that these rules, plus the Supreme People’s Court 2004 judicial interpretation on IPR, had not improved the prospects for criminal prosecution of IPR violations. Thirteen percent of companies noted that it was easier to effect criminal prosecutions. Another 30 percent indicated it was too early to assess the new rules.”

“The legal framework for IPR, as distinct from enforcement of those laws, ranked among the top 10 concerns in 2003, 2004, and 2005, but fell to 11th place in the 2006 survey, reflecting the continuing build-up of IPR regulations. Enforcement of those regulations, however, will likely remain among the top priorities for companies doing business in China for the foreseeable future.”

Source: USCBC 2006 report pages 4 and 5, here (pdf).

Wednesday, September 27

Thursday, September 28

Friday, September 29

Emma Moore, an expat from New Zealand living in China, wrote an interesting article called The Chinese Rip Off for Scoop. She is discussing the 100 Day Campaign Against Piracy that started July 15, 2006:

“This week, government officials announced the destruction of almost 13 million pirated CDs, DVDs and computer software in the wake of a 100-day anti-piracy crackdown started on July 15. The campaign shut down 8,907 shops and vendors but these often reopen days later, or reopen with illegal goods hidden in back rooms.”

Moore is not hiding any scepticism about IPR enforcement in China:
“As is so often the case in China, the appearance of taking vigorous action masks the reality that little or no action is being taken at all.”

Read Moore’s article here.

On a more positive note: PR firm Edelman wrote an article for Warner Bros. Home Entertainment about Superman’s return at legitimate sales boots in China because of the 100 Day Campaign Against Piracy. Here, the author is letting the campaign start already in June.

“The government’s 100 Day Campaign is clearly having an impact on the legal market,” said Mark Horak, Executive Vice President and General Manager of Warner Home Video, Asia Pacific and Latin America. “We are achieving significant increases in sales through our current retail network and, with the close support of government anti-piracy initiatives, are building a wide distribution network of new retail partners.”

Read more here.

The World Economic Forum launced its Global Competitiveness Report 2006-2007. As country highlights the following text is given in case of China:

“China’s ranking has fallen from 48 to 54, characterized by a heterogeneous performance. On the positive side, China’s buoyant growth rates coupled with low inflation, one of the highest savings rates in the world and manageable levels of public debt have boosted China’s ranking on the macroeconomy pillar of the GCI to 6th place – an excellent result. However, a number of structural weaknesses need to be addressed, including in the largely state-controlled banking sector. Levels of financial intermediation are low and the state has had to intervene from time to time to mitigate the adverse effects of a large, non-performing loan portfolio. China has low penetration rates for the latest technologies (mobile telephones, Internet, personal computers), and secondary and tertiary school enrolment rates are still low by international standards. By far the most worrisome development is a marked drop in the quality of the institutional environment, as witnessed by the steep fall in rankings from 60 to 80 in 2006, with poor results across all 15 institutional indicators, and spanning both public and private institutions.” See here.

Not a word about intellectual property protection and enforcement.
On page 34 of Part One, the Competitiveness Index it said: “There are concerns about the strenght of auditing and accounting standards, protection of minority shareholders’ interests, the burdern of government regulation, the climate for the protection of property rights, as well as the independence of the judiciary from undue influence.” Right, the protection of intellectual property could fall within the definition of the protection of property, and a problems with the independence of the judiciary could lead to IPR related problems. But why not mentioning IPR not explicitly?

So what are, according to the World Economic Forum, the key elements for sustainable growth?
9 pillars were identified:

1. Institutions
2. Infrastructure
3. Macroeconomy
4. Health and primary education
5. Higher education and training
6. Market efficiency
7. Technological Readiness
8. Business sophistication
9. Innovation

Each pillar can be subdivided into indicators. If we look at the nineth pillar Innovation, we see:

9.01 Quality of scientific research institutions
9.02 Company spending on research and development
9.03 University/industry research collaboration
9.04 Governement procurement of advanced technology products
9.05 Availability of scientists and engineers
9.06 Utility patents (hard data)
9.07 Intellectual Property protection
9.08 Capacity for innovation

Ok, so utilty patents and intellectual properyt protection are included as indicators. But only the aggregated score for the whole pillar is given, and how the indicators are weighed relatively is unknown to me: Rank 65, score 3.24. See page 22.

If China would clean up its environment and improve intellectual property protection it probably would rise like a rocket in the next Global Competitiveness Index.

Jonathan Hopfner reports for the Electronic Engineering Times about what Philip Koh, a Singapore-based research vice president with analyst firm Gartner, forcasted a week ago about the semiconductor industry.

“China will account for 60 percent of the $118 billion Asian semiconductor market by 2010, up from 49 percent today.”

And with this increased manufacturing and consumption, intellectual property will be increasingly concentrated in China too. Read Hopfner’s article here.

According to Ernest Linek, IP attorney at Banner & Witcoff, there are multiple reasons for optimism if one looks at IPR in China. Linek states that the progress and potential of IPR in China is exemplified by what has happened and is happening in the semiconductor industry. See the article in the China Trade Law Report here (click on the subscription link, it’s free for now).
Head tip to Dan Harris of China Law Blog, who is in the board of editors.

The US Patent and Trademark Office is inviting you to Boston, Massachusetts for a two day conference (September 27-28, 2006) about protecting IPR in China and the globabal marketplace.

See here. Head tip to Philip Brooks’ Patent Infringement Updates. If you are in the position to go, please share it with us: ipdragon (at) gmail (dot) com

Within the next two to three months Akin Gump Strauss Hauer & Feld LLP is planning to open an office in Beijing, according to Amanda Bronstad in the China Trade Law Report, who interviewed the firm’s chairman, R. Bruce McLean, see here.

“Specifically, the firm plans to provide legal work for Chinese companies in the international trade and energy sectors, both of which have strong connections to the governmental entities based in Beijing, he said. The firm also intends to staff intellectual property lawyers at the Beijing office.“

Read the article via Law.com here.

Mr. Yitai Hu is a partner of Akin Gump and a specialist in intellectual property in China.
He wrote a very insightful article on this topic in two parts. Hu points out in his article Protecting Intellectual Property In China, Part I, that it is relatively easy to deter IPR infringers, but it is hard to locate and deal with the ones that invests in the infringement: “particularly where the investors have had strong influence with local authorities. Early in 2000, the Chinese government mandated changes to certain investor qualifications in an attempt to ameliorate this problem.”

About trade secrets Hu writes that China has no protection for trade secrets that are strictly intangible. So only if someone is walking away with a document including the trade secret, the owner could enforce his right at the courts for misappropriation of a trade secret. Hu states convincingly that this is rather theft, because a tangible item has been stolen.

Another thing Hu clarified is about non-compete clauses. Those may not be enforceable in China, unless you pay the former employee a portion of his regular salary.

In part II Hu writes: “Because criminal infringement actions are often brought against the company’s CEO, it is not uncommon to find someone serving as CEO in name only so that the management of the company would not be affected if the in-name-only CEO is required to serve a prison term. ”

Protecting Intellectual Property In China Part I (pdf)

Protecting Intellectual Property In China Part II (pdf)

China Confucius Foundation has commissioned a statute in Qufu, the birth place of the great sage.

To standardise the image of Confucius the world over, the statute will be used as the official copyrighted image.

Read the Xinhua article here and the Richard Spencer’s article for the Telegraph here, to whom the China Daily article was linking here.

However, the consequence could be that if illustrators want to make use of the official portrait of K’ung-fu-tzu 孔夫子 they have to ask permission and/or pay a remuneration.
This might be a disincentive to use the standardised portrait and keep using other interpretations in illustrations and statutes.

The century old sage is in the news, so I refer to the news on current affairs exception of article 5 Copyright Law to use these images of Confucius.

The Digital Chosun Ilbo reports some staggering statistics of counterfeit goods entering South Korea. The writer of this article, who remains unknown, uses a splendid euphemism for trademark infringement: sincere flattery.

According to the Chosun Ilbo, the Korea Customs Service uncovered the following knockoffs as of the end of July:

• Counterfeit Adidas products 2006: W106.7 billion (US$1=W944). In 2004 these counterfeit Adidas products were worth only W27 million, which means an increase of 3,953 times!

Part of the explosion in counterfeit Adidas might be explained by the rise in popularity because of the World Cup Soccer in Germany. However, according to the Chosun Ilbo legitimate sales picked up during the World Cup with 30 percent.

Other brands were infringed upon as well heavily. The increase since 2004 was:

• Piaget 133 times;
• Gucci 99 times;
• Frank Muller 9.3 times;
• Montblanc 8.8 times;
• Vacheron Constantin 8.2 times.

However, infringements of the brands Fendi, Versace, Celine, Tiffany and DKNY products have decreased. Chosun Ilbo presumed that this went hand in hand with the alleged decreased esteem of these brands.

“Louis Vuitton, Cartier and Rolex spawned the largest numbers of knock-offs over the last three years. In 2004, the entire value of intercepted counterfeit merchandise was W205.5 billion, but through July 2006, that number jumped to an alarming W922.3 billion.”

Read the Chosun Ilbo article here.

Managing IP has made a ranking of the law firms and patent and trademark agencies in Asia, Europe and the US, based on the number of IP practitioners.

The biggest lawfirm of Asia is not a Chinese lawfirm, as one might expect. It’s a South Korean firm: Kim & Chang.

The biggest Chinese lawfirms and patent and trademark agencies are:

• Liu Shen & Associates (Beijing) 152 IP practitioners, ranks 3 in Asia;
• Shanghai Patent & Trademark Law Office 150 IP practitioners, ranks 4 in Asia;
• CCPIT Patent and Trademark Law Office (Beijing) 129 IP practitioners, ranks 5 in Asia;
• China Patent Agent (Hong Kong) 125 IP practitioners, ranks 6 in Asia;
• Baker & McKenzie (Hong Kong) 111 IP practitioners, ranks 7 in Asia;
• Wan Hui Da (Beijing) 87 IP practitioners, ranks 9 in Asia;
• China Sinda (Beijing) 60 IP practitioners, ranks 14 in Asia.

• Taiwan’s Lee & Li (Taipei) has 152 IP practitioners and ranks second in Asia.

Disclaimer: IP Dragon is cooperating with Managing IP

Monday, September 18 IP Dragon posted in June Debunking the Chinese Tourist in Europe Story. But now Susan Scafidi of Counterfeit Chic posted a Flickr picture in her Knockoff News 32 that seems to at least partly debunk the debunking story. On the picture one can read: “In France, buying or carrying a counterfeit product is a criminal offence punishable by up to 3 years imprisonment and a 300,000 euro fine.” Of course it is unlikely that a Chinese tourist dressed in counterfeit clothing receives such a sanction, most probably certain thresholds need to be passed.
Martin Schwimmer of the Trademark Blog, linked to an article about Anna Sui who reclaimed her domain name in China, here.

Tuesday, September 19

Wednesday, September 20 William Heinze of I/P Updates blogged about Honda Files Unfair Import Complaint Against Wuxi Kipor Power, see here.

Thursday, September 21

Friday, September 22

Saturday, September 23

Sunday, September 24

Did you miss something in this posting? Let me know: ipdragon (at) gmail (dot) com

Monday, September 11

Tuesday, September 12 Richard Kuslan of Asia Business Intelligence is talking about main stream book stores and that one cannot expect rapid and radical change in intellectual property rights consciousness. His posting is entitled Pirated Editions and American Copyright Law it is based on his paper which was commissioned by the Chinese-American Librarians Association and presented in a talk given at the Queens Public Library in New York City. Read or listen to it here. Dan Harris of China Law Blog has a posting about patent strategy here for in-house counsels.

Wednesday, September 13

Thursday, September 14

Friday, September 15

Saturday, September 16

Sunday, September 17

If you are of the opinion a relevant blog is missing, please tell me, ipdragon (at) gmail (d0t) com

Monday, September 4

Tuesday, September 5

Wednesday, September 6 China Law Blog refers in the article Is A Cigar In China Really Just a Cigar? to a number of blog postings about the business/finance perspective on IPR.

Thursday, September 7

Friday, September 8

Saturday, September 9 Travis Hodgekin of Transnational Law Blog has an interesting post entitled Advice From Starbucks About IP Protection in China. And Counterfeit Chic’s Susan Scafidi posted Knockoff News number 31. In this posting she links to an article about counterfeit Nikes from China and the arrests made in the US, here.

Sunday, September 10

Mice Love Rice Copyright Dispute Solved

Yang Chengang, the composer of the song Mice Love Rice, must have thought that companies and singers are like mice and the assignment of the copyright of his song like rice. But instead of rice, which you can divide, he assigned the copyright five times. A lot of litigation followed and Yang apologised, but it was not the end of the disputes. Read the CRI English article here (7 pages).

I have listened to the litigious song. Sounds good to me.

Finally record company Hurray! Freeland has signed a copyright assignment contract to become the official right owner of ”Mice Love Rice” under PRC copyright law. Read here.

Wen Jiabao visited Helsinki, Finland for the Asia Europe Meeting (ASEM). The full transcript of an interview with the Chinese premier was covered by The Times and published by The Australian.

One question (question 4) was about IPR:

What steps will you take to ensure that the world can be confident in China’s promises on IPR (intellectual property rights) after so many years with little change?

WEN JIABAO: “Frankly, it is only in recent years that we have given priority to the protection of intellectual property rights as a matter of strategic policy. This has something to do with the level of development China has achieved, and China should be given some more time. But what I wish to stress is that no one should fail to see the Chinese Government’s commitment to protecting IPR and the steps it has taken.

First, the IPR protection strategy is being pursued with the same importance given to the national innovation strategy.

Second, a national leading group for IPR protection has been set up to exercise overall leadership and co-ordination over IPR protection efforts in China.

Third, we have adopted and revised a number of laws and regulations on IPR protection. Of them, the most important three laws are: the patent law, the copyright law and the trademark law. We will continue to improve the relevant laws and regulations and lower the threshold for prosecuting IPR-related offences.

Fourth, law enforcement is being strengthened. Both administrative and judicial protection are provided, which complement each other. We have launched special national operations against IPR-infringement activities, and 50 centres have been set up across China for handling IPR-violation complaints to step up the fight against copyright infringement and piracy.
Fifth, we are working to raise public awareness of the importance of IPR protection to encourage consumers, businesses and social groups to play their part in protecting IPR. Sixth, we have taken an active part in international co-operation and have ongoing dialogue with the EU on IPR protection.

In short, China’s IPR protection effort will carry the full force of steel, and it will definitely not be something that is soft as bean curd, so to speak.“

Read The Times interview here.

African News Dimension wrote an article entitled: “China blamed for killing Nigerian economy”.

The Nigerian commerce minister Aliyu Modibo displayed the original Nigerian Wax materials and faked Chinese samples presented to him by the leadership of the Association of Textile Manufacturers.

“Modibo informed the [Nigerian] senators that textile manufacturers had complained that some unscrupulous Nigerians scanned their designs soon after they were released.
The Tides said Modibo said the perpetrators dispatched the designs to their Chinese counterparts who faked them and sold it at rock bottom prices thus destroying the Nigerian economy.“

Read the AND article here.

Aaron Tan questioned whether China and other Asian countries warm up to intellectual property in an article for Silicon.com.

During the Global Forum on IP in Singapore the panel drew the conclusion that IPR are valued by Asian companies, albeit in the wrong way.

Tan quoted Jari Vaario, director of IP rights strategy programme at Nokia saying:

“In the telecommunications field, I would say that Chinese companies have been infringing on Nokia’s patents. There is no Chinese telecoms company that does not infringe on some of Nokia’s patents.” But with the succession of China into the World Trade Organization, Chinese companies now find themselves having to face counterparts in a global playing field that have established IPR management. Vaario said: “This has put some pressure on them to respect IP.“

Read Tan’s article here.

Anna-Lucille Montgomery is a doctoral candidate and researcher at Queensland University of Technology, Brisbane, Australia’s Creative Industries Research and Applications Center. She is writing Copyright, Creativity and Economic Development – Intellectual Property and the Creative Industries in Post-WTO China. Now she has just given a preview at Asia Times Online.

She gives a great overview of the different technical circumstances in China that are conducive for copyright infringement. Digital Rights Manegement seems not to work very well in China, exept for ringtones and ringback tones.

“Astoundingly, ringtone downloads and ringback tones have arguably become more significant as a source of income for many Chinese music industry players than royalties from album sales. Artist management services, which allow record labels to capitalize on advertising, publicity and concert fees generated by their stars, are also much more significant in the Chinese music industry than they are in markets where intellectual property rights are easier to enforce. “

Read Montgomery’s article here.

In 2005 Montgomery wrote: Online music markets in China: The broader picture and the role of copyright and DRM, pg 4-8, INDICARE (INformed DIalogue about Consumer Acceptability of DRM in Europe), here.

The spirit of Bruce Lee is alive and kicking. After Bruce Lee’s untimely death, on July 20, 1973, there were no statutes erected in Hong Kong (there was only a Bruce Lee Café, run by Jon Ben, which had the authorisation of Lee’s family), nor in the People’s Republic of China, to commemorate this incredible martial arts genius. And only in the next century, in 2005 Hong Kong placed a sculpture (kitsch) at the Avenue of the Stars. Now the People’s Republic of China seems to have discovered Master Lee as a public’s magnet as well.

Read John Harlow‘s article in the Sunday Times Online about plans to open a Bruce Lee theme park in Shunde, north west of Hong Kong, here. Is that possible within Chinese intellectual property law you might ask. Chinese law gives authors, like civil law countries, moral rights article 10 Copyright Law and and the term of protection can be found in article 21 here.

Article 10 Copyright Law states:

The term “copyright” shall include the following personality rights and property rights:
(1) the right of publication, that is, the right to decide whether to make a work available to the public;
(2) the right of authorship, that is, the right to claim authorship and to have the author’s name mentioned in connection with the work;
(3) the right of alteration, that is, the right to alter or authorize others to alter one’s work;
(4) the right of integrity, that is, the right to protect one’s work against distortion and mutilation;
(5) the right of exploitation and the right to remuneration, that is, the right of exploiting one’s work by reproduction, live performance, broadcasting, exhibition, distribution, making cinematographic, television or video production, adaptation, translation, annotation, compilation and the like, and the right of authorizing others to exploit one’s work by the above-mentioned means and of receiving remuneration therefor.

Article 20 Chinese copyright law states that the term of protection shall be the lifetime of the author and fifty years after his death, expiring on December 31 of the fiftieth year after his death.

Another possible route to fight this kind of unauthorised use of Bruce Lee’s name and pictures might be to argue that Bruce Lee has been a well known trademark, as mentioned in the Paris Convention and which is included in TRIPS.

Garry Wiseman project leader of Window Live Expo, a free classified service provided by Microsoft, blogged that Sino.com has unauthorisedly copied parts of its old lay-out. However, recently Wiseman has withdrawn the posting, see here why.

According to Big Mouth Media Wiseman wrote that:
“The post above was mainly intended to raise the issue of cross-border copyright infringements and signal that it’s not acceptable.” He was not expecting sympathy.

Are the sites similar enough that one can speak of copyright infringement? Tech Crunch does not think so and has a good post about the affaire including two screen snapshots, so you could arrive at your own objective judgement, here.

IP Dragon is honoured and humbled that it is nominated for best Asia Business/Economics Blog Q1 2006/2007 by the Asia Blog Awards.

IP Dragon is a happily surprised, because it is focused on China, rather Asia, and although it has ground in common with business and economics it is formost about law, and not any law IPR law.

The other nominees in alphabetic order are: Chief Asia Inspector, China Law Blog, Go Figure, Indian Economy, Indian Raj, Sarapan Ekonomi, South Asia Biz, Walter Hutchens.

Now you can vote which blog you like most, here.

A Knowledge Expert Says (And A Journalist Quotes) The Darndest Things

Waltraut Ritter, director of Knowledge Enterprises, spoke Wednesday at the University of Oklahoma-Tulsa Schusterman Center as part of the university’s Renaissance Project, an initiative to encourage discussion of modern issues and ideas. This year’s theme is “Science, Technology and Ethics.”

According to Robert Evatt of Tulsa World: “Ritter said that, overall, Chinese people do have a moral system they follow, but they have not applied similar values in their business practices.“

If Ritter really said this she is blinding her public with the obvious.

““In their business, ethical values are hard to find,” she said. “In China, the main value is to get rich as quickly as possible.” “

Nice stereotyping Ritter. And no word about exempting factors, such as poverty, ignorance, the fact that modern IPR in China exist for only approximately 25 years, has poor enforcement, sanctions seem not very deterrent, etc.

It’s great to try to come up with explanations for China’s rampant IPR infringements, but you have to give some context. In this article I find too many clichés for a knowledge expert.

Read here

Friday, August 25

Saterday, August 26
Internet, that sea of info gives and takes. To my regret Asia Business Law is no more. However Christopher Cassidy and Travis Hodgkins are continuing somewhere else, and Christopher Pitts and Jason Lohr might return, some day somewhere: Thank you for reading.

Sunday, August 27

Monday, August 28
Susan Scafidi has a great posting about trademark infringement you have to see for yourself: Counterfeit Coffee Break 2.

Tuesday, August 29
Dan Harris of China Law Blog blogged about Cover Your Bases. Cover Your Patents, a posting of Richard Brubaker of All Roads Lead To China, good advice including don’t become complacent and be proactive: Cover Your Bases In China By Covering Your IP

Wednesday, August 30
Richard Kuslan of Asia Business Intelligence has a short article about Dell Loses China Trademark Suit, and a request to send him the transcript of the judgment. That’s the spirit Richard!

Dan Harris of China Law Blog states that the real improvement in IPR in China will come when domestic companies start to demand protection for their IPRs: Chinese Pirates Like Chinese Brands And That’s A Good Thing

Thursday, August 31
Susan Scafidi of Counterfeit Chic in her Knock-off Week 30 referred to a short article about Zippo, here (more about the Zippo case you can find here); and about more Chinese companies going to court to enforce their IPR here. IP Dragon reacted to the enthusiasm about the growth in litigation by proposing the enforcement ratio, see here.

Friday, September 1
Bill Heinze of I/P Updates blogged about Ahuja’s World patent and Trademark News article about Chinese Protection Measures for Digital Communication of Protected Works. Interesting, but where can we find a translated version of the Regulations On The Right Of Communication Of Works/Performances On The Internet (26 Jun 2006)?

Yesterday you could read here that Thelen Reid & Priest opened an office in Shanghai. Now Perkins Coie is opening their second office in China. After Beijing it is opening an office in Shanghai, located within the Shanghai Zhangjiang Hi-Tech Park.
Read the press release here.

The Shanghai office will be staffed by two resident attorneys, Fabiola Suwanto (bio) and Zhaohui Zoe Wang (bio). The office will primarily focus on intellectual property rights, business and personal planning.

Another foreign law firm in Shanghai will mean more competition and hopefully more transparency in the information about IPR protection and enforcement in China. The more the merrier.

The US International Trade Commission is investigating a complaint by Zippo Manufacturing Co, Inc. of Bradford, Pennsylvania and Zippmark, Inc. of Wilmington, Delaware.

Complaint was filed May 16, 2006 under section 337 of the Tarif Act of 1930, as amended, 19 USC section 1997. A supplement to the complaint was filed on June 5, 2006. The complaint as supplemented alleges violation of section 337 (as amended 19 USC section 1337) in the importation into the US, the sale of importation, and the sale within the US after importation of certain lighters by reason of infringement of US Trademark No. 2,606,241. (which corresponds to an infringement of 19 USC 1337 (a) (1) (C): The importation into the United States, the sale for importation, or the sale within the United States after importation by the owner, importer, or consignee, of articles that infringe a valid and enforceable United States trademark registered under the Trademark Act of 1946 [15 U.S.C. 1051 et seq.].)
The complaint further alleges that an industry in the US exists as required by subsection (a)(2) of section 337 (as amended 19 USC section 1337).

Zippo Manufacturing and Zippmark request that the US ITC institute an investigation and, after that issue a general exclusion order and cease and desist orders. More info about the Section 337 investigation you can find here.

The respondents of the investigation are four Chinese Producers:
Tung Fong International Promotion Co, Ltd. Hong Kong;
Wenzhou Star Smoking Set Co., Ltd., of China;
Taizhou Rongshi Lighter Development Co., of China;
Wenzhou Tailier Smoking Set Co., Ltd., of China.

And two US Distributors:
beWild.com of Bellmore, New York;
Kalan LP (dba Kalan Trendsetting Gifts & Novelties) of Lansdowne, Pennsylvania;
Vista Wholesale of Greencastle, Indiana.

The US ITC’s notice of investigation, pursuant to 19 USC section 1337 can be found here (pdf) or here.

Inflammory language
Two years ago Zippo complained that the counterfeiting in China affected Zippo and Bradford, Pennsylvania, USA. A few governement officials visited the Zippo plant, including
US Department of Commerce Assistent Secretary William Lash, who lashed out to Chinese counterfeiters: “There is no product in the world that is not being copied in China. There is no limit to their creativity and lack of conscience.” Besides these inflammatory exclamations probably inspired by the firy atmosphere that goes with a lighters plant, the Zippo people argued that counterfeiting not only hurts their business, and damages their brand, but it could also puts the public health and safety in danger. Jeff Duke, legal counsel for Zippo said that Zippo was named twice in law suits that were not their products. And on top of counterfeit trademarks, copyrights are infringed, by putting art and pictures on lighters, including Walt Disney’s figures. Zippo argues it would never put art that is attractive to children on lighters. Read Zippo’s article here.

China is pushing innovation. It wants to move on from the ‘made in China’ phase to the ‘designed in China’ and ‘invented in China’ phase. To see if Shanghai is moving in the right direction it has developed a creativity index.

China Daily wrote an article about it entitled Creating a Clever Country.

“By combining industrial scale, research and development, cultural environment, human resources and social environment into a comprehensive measure, the new index aims to reflect the overall development of industrial businesses in this metropolis.
Mainly thanks to rapid growth in research and development investment, Shanghai’s creativity index increased to 109.1 in 2005 from 100 in 2004, the benchmark year. Since design and development is crucial to creative businesses like music, film, design, television and publishing industries, the enhanced capacity of innovation indicates that Shanghai will likely be able to better bolster its creative economy.“

Innovation however is a very complex matter. If Shanghai wants to be a magnet for innovation it needs to be open and treasure diversity and different opinions, have a good working climate, which does not equal to eternal smog or water poisoning.

What is lacking in the index, however, is an intellectual property protection and enforcement component. Real innovation can prosper when it is protected and when it can be effectively enforced.

Read China Daily’s article here.

Taiwan Semiconductor Manufacturing Co. Ltd (TSMC) has again filed a law suit against China’s SMIC for misapprobiating of trade secrets. The law suit will take place in the US.

““SMIC has violated an agreement with our company set in 2005 and continued to use our business secrets inappropriately,” TSMC said in the statement.
“Therefore, the suit filed by our company seeks compensation for damages and cessation of the activities.”“

Read David Lin’s articel for Reuters here.

Thelen Reid & Priest LLP, attorneys at law for 80 years, announced the opening of an office in Shanghai. Read the press release here.

Ms Utterback is resident at the Shanghai office:

“Meg Utterback studied law at China People’s University in Beijing from 1985-1987 and speaks and reads Mandarin. Her practice is focused on assisting foreign companies establishing manufacturing facilities in China, and includes review of real estate and construction contracts as well as advising on labor and intellectual property issues affecting foreign businesses. Ms. Utterback also has extensive experience in commercial litigation, construction litigation, and international commercial arbitration. She has represented Chinese and foreign clients in litigation in the United States and throughout Asia, including India and Singapore.“

IP Dragon blogged about an illuminating article of Utterback on IPR enforcement in China, here.

Today, Professor Zhang Naigen of Fudan University put a very interesting presentation online on China’s IP Laws Post WTO: New Developments. He outlines a survey of recent changes in IP laws in China, new rules for well-known trademarks and new regulations for protection of IP by customs officials.

Read professor Zhang’s presentation here.

“Wei2 (喂)? Is what you say in Chinese when you answer the phone. Liu Li reports for the China Daily that a nationwide reporting and complaining hotline (12312) was established yesterday, that should be an answer to IPR infringements.

“[..] Yiwu has become the first county-level city in China to boast an IPR reporting and complaint centre. The city, home to the world’s largest small commodities wholesale market, has become the 50th place to establish such a centre, in response to the 2006-07 Action Plan on IPR Protection adopted by the State Council.“

Photo: Tom Arthur

Liu writes that according to work procedures, the centres will decide
within five days whether to pursue a complaint. If the complaint is accurate, it will be sent up to industry and commerce departments for
administrative punishment, or to public security departments and public prosecutors for criminal punishment. So far, the service centres have received over 6,000 reports and complaints.

Read Liu Li’s article here.

Austrialian Manufacturing and China: Deepening Engagement is the title of the Australian Industry Group’s 2006 China study, which is based on a survey of 700 Austrailian manufacturers with a total sales of 25.5 billion Australian dollars.

In chapter 6.2 Non-tariff on page 30, the relevant results can be found about the perception of the Australian manufacturers about intellectual property protection in China.

“It is clear from the 2006 China study that the concerns about intellectual property protection and other non-tariff barriers expressed in the 2004 China report have intensified over the intervening period.”

The 2006 China study shows the following key issues Australian manufacturers are encountering, in descending order of frequency:

• Lack of intellectual property protection;
• Lack of transparency in legal and financial protection;Inconstistent enforcement of import duties;
• Inconstistent interpretation of provincial laws;
• Varying customs requirements;
• Unique technical standards;
• Restrictions on foreign invenstment; and
• Quarantine controls.

Conclusions: “Australian manufacturers are encountering significant non-tariff barriers in trading with China – the key one being the lack of intellectual property (IP) protection (49%). Many companies see the enforcement of their IP rights as a futile endeavour. IP protection is not solely about trade in China, it is also an issue of significant importance on the domestic market. Nearly double the number of companies operating in China are concerned about IP abuse here in Australia from Chinese imports compared with their operations in China.“

Read the report here (pdf)

Tim Johnson, wrote an interesting article about IPR litigation that percentage wise is almost an all-Chinese affaire. Head tip to: China Business Services (a business consultancy in Beijing, Shanghai and London).

Johnson has covered the travails of Foshan Rifeng and interviewed J. Benjamin Bai of Jones Day and Steven M. Dickenson of Harris & Moure and China Law Blog, read here

Bai was pretty optimistic about the growth in the number of litigations. However, I think these statistics should be approached cautiously. A higher number of IP infringement cases in court could mean a lot of things:

Because the growth of two absolute numbers is expressed as a relative one, this does not give the relation toward the total amount of infringements.

I propose using an enforcement ratio: total number of litigations in a country divided by the number of infringements in a country. This way you could really tell if the IPR enforcement was going in the right direction.

With the absolute numbers they use now, if the number of litigations in China has risen considerably, maybe the total number of infringements in China has increased even more. That means that the enforcement ratio decreased. Not good.
And if the number of litigations in China has decreased, it could mean that the enforcement is going into the right direction, in case of an decreased total number of infringements in China. Good.

Now, of course the challenge is getting realistic statistics for the total number of infringements in China. This could be solved by an aggregated estimate of all seizures at international customs offices. And the good thing is that the absolute number of total infringements is only important as a benchmark.

Taiwan’s China Post has an article about the Film Industry Response Group, a HK industry group that is clamping down on movie piracy, threatening to sue 42 illegal downloaders, which they can avoid by paying US $ 3,000 and never infringe their copyrights in the future.

In May Hong Kong’s High Court ordered four Internet Service Providers to disclose the identities and addresses of the people who illegally downloaded “Fearless” (Huo Yuan Jia), “McDull, The Alumni” and “The Shopaaholics” (Jui oi nui yun kau muk kong). So far for customer privacy.

According to Agence France Presse (AFP) it was the first time Hong Kong film companies have taken legal action over illegal Internet downloads.

John Chong, deputy chairman of Media Asia was quoted saying that the illegal downloader could not hide and they were not tolerating more illegal actions.

BBC News quoted what film producer Charles Heung said to Reuters: “The government should be ashamed that we investors have to put up money to play police officer”.

You can find China Post’s AFP article here, and BBC News article here (with a picture including Chong left and Heung in the middle).

What would be the advice you would give to the HK industry group? Is sueing (potential) customers (infringers can be actual customers at the same time) the way forward to protect your rights, or will it alienate them from your products? Is it as Heung implicitly stated the role of the police and not of the movie makers? What’s your opinion?
If the illegal downloaders are fearless, as the movie they have downloaded, they might decide not pay anything. That way they have a chance they will not get sued at all, and if they will, they have a chance that the fine will be lower. Then again, the risk is that a HK court will set an example and fine these small time infringers extra. What would be your advice if you were defending the illegal downloaders?

TransWorldNews wrote that Homer Simpson is persona non grata in Chinese prime time.

The US TV series The Simpsons, of which Homer is one of the protagonists, is banned from Chinese TV (between 5-8 p.m.), not because Homer drinks too much beer, but because the series is, just as the British Teletubbies and Japanese animations, too popular in China, according to the Chinese government. The Chinese TV series/movies industry, still in its infancy, cannot evolve when it is standing in the shadow of the foreign movies industry, their argument must be. But this will make foreign series the more interesting. And the effect of this protectionism is that copyright piracy will only increase. Besides, without foreign competition the quality of the Chinese TV series/movies can artificially remain below the international standards.

Read TransWorldNews’s article here.

Danwei published an interesting article of Beijing bureau chief of Red Herring Kaiser Kuo.

Kuo is looking at the benefits of copyright infringement:
“Piracy has provided an inexhaustible source of inspiration for musicians and filmmakers, raising the bar significantly for them, and created larger and more discerning audiences.“

Exposure to western culture and values “will lead the Chinese people inexorably to increase policial openness and deepened reform”, according to Kuo. Of course he sees also the other side of the coin:

” [..] an equally persuasive case could be made that rule of law, to include respect for intellectual property rights, is ultimately the more critical variable in attaining those same goals.“

Besides Kuo gives a short historical overview, beginning in 1992, of the evolution of copyright piracy.

Read Kuo’s article here.

According to the Chinese Movie Copyright Association, Chinese TV stations air up to 1,500 pirated Chinese movies a year, costing studios up to $9.4 million in lost revenues, the official Xinhua News Agency reported Sunday.

““The number of movies illegally aired is startling – more than 100 in the first six months of the year, and most of them are very recent,” Meng Yu, the association’s legal director, was quoted as saying.“

The conclusion is that 1,400 pirated Chinese movies were aired on Chinese TV in just two months.

This Associated Press story is published by, among others, the Washington Post, the HK Standard, and the Taiwan’s China Post.

Yangtze Yan of Xinhua wrote about the General Administration of Customs (GAC) statistics over the first half of 2006.

• 1,076 cases of intellectual property rights were prosecuted;
• 39 million fakes were seized with a total value of more than 68 million yuan (8.5 million U.S. dollars);
• Guangzhou customs on May 24: seized 108,000 bottles of counterfeit medicine from Hong Kong named Wong To Yick worth 1.89 million yuan;
• Xiamen customs in May seized 672 pieces of children’s clothing suspected of illegally carrying the 2008 Olympic trademark mascots.;
• Tianjin customs seized 4,150 school bags carrying the 2009 Olympic trademark being exported to Cameroon.

Besides seizing counterfeit goods in ports the GAC uncovered via Fuzhou Customs 157 cases of mail fraud.

Read Yan’s article here.