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Trademark Logo Goes Up in Smoke To Save Australians? Let’s Check The HK-Australian Bilateral Investment Treaty

Posted on June 27, 2011 by Dr. Danny Friedmann

How to warn people
against blindness who
~~cannot~~ do not want to see?

Cigarette manufacturer Philip Morris was not amused when Australia announced last November 2010 that it would prohibit brand logos on cigarette packets, to prevent exposure to children that might be lured to the flames of eternal damnation. Smoking kills 15,000 deaths in Australia each year.

According to the BBC: “Health Secretary Andrew Lansley said “glitzy designs on packets” attracted children to smoking and it made sense to look at “less attractive packaging“. Read here. As you can see the substitute for the
brand logo is less than attractive, unless you are a masochist. So “plain packaging law” as the Australian law is described is quite a euphemism.

The proposed ban would be implemented in 2012, and made the cigarette manufacturers worry that this would jeopardise their financial health.

Philip Morris Brands: Marlboro, Virginia Slims, Merit, Parliament, Benson & Hedges, L&M, Chesterfield, Lark, Cambridge, Basic

If a cigarette manufacturer such as Philip Morris can no longer use their trademarked logos on its cigarette packets (including the heraldry with the slogan “veni-vidi-vice”, which is Ceasar’s phrase meaning I came, I saw and I conquered) it becomes more difficult to distinguish its brand of cigarettes from other brands of cigarettes. The personality of the brand, the carefully cultivated associations with the brand, will partly go up in smoke. Then again all Philip Morris’ competitors deal with the same problem. Cigarette manufacturers such as Philip Morris and British Tobaccco, that have advertised for decades to gain name recognition and brand associations will probably lose relatively more market share than more generic brands.

But can Australia really prohibit the use of trademarked logos and only allow the trademarked brand name on a packet full of warnings?

According to a BBC article, Philip Morris Asia, based in Hong Kong, is now considering a case against Australia for violating the Bilateral Investment ‘Agreement between the Governments of Hong Kong and Australia for the Promotion and Protection of Investments’ signed in 1993, see here.

Intellectual property rights falls, according to article 1 (e) iv of the Bilateral Investment Treaty, within the scope of the definition of investment (“intellectual property rights including rights with respect to copyright, patents, trademarks, trade names, industrial designs, trade secrets, know-how and goodwill“).

The first sentence of article 6 (1) of the Bilateral Investment Treaty is: “Investors of either Contracting Party shall not be deprived of their investments nor subjected to measures having effect equivalent to such deprivation in the area of the other Contracting Party except under due process of law, for a public purpose related to the internal needs of that Party, on a non-discriminatory basis, and against compensation.“

This means that Australia cannot subject an investor in Hong Kong to “measures having effect equivalent to such deprivation”, such as the prohibition of the use of a trademarked logo on cigarette packets, except for a public purpose related to the internal needs of Australia. To prevent 15,000 people in Australia each year from dying caused by smoking I think falls within this definition. So the exception can only kick-in in case there is a public purpose, check, and compensation for the expropriation of the use of the logo.

Claimant = company respondent = state

Bilateral Investment Treaties can be a vehicle for companies to get a binding tribunal judgement against a non-compliant state via for example the Arbitration Rules of the United Nations Commission on International Trade Law. In case a company wanted to change a law or regulation in a state that is not in compliance to the Agreement on Trade-related Aspects of Intellectual Property Rights (TRIPs), it could lobby its government to bring the case to the Dispute Settlement panel of the World Trade Organization, (which was done collectively by the copyright industries for example in case of DS 362) which is a less direct and less efficient route for a company to take.

Interested in Bilateral Investment Treaties?

This time I wrote about Bilateral Investment Treaties because it touches upon the protection of intellectual property rights and Hong Kong. At the Chinese University of Hong Kong there are, however two experts in this field who deal with the subject in a broader sense. Professor Bryan Mercurio, Chinese University of Hong Kong (CUHK) has written extensively about the subject. For example two books: ‘Bilateral and Regional Trade Agreements: Commentary and Analysis’ (Cambridge University Press, 2009)(edited with Simon Lester) ‘Bilateral and Regional Trade Agreements: Case Studies’ (Cambridge University Press, 2009)(edited with Simon Lester). This year the following book chapter will be published about a particularly fascinating region: Bilateral and Regional Trade Agreements in Asia: A Sceptic’s View’ in Ross Buckley, Richard Hu and Douglas Arner (eds), The Economic and Financial Integration of East Asia (Edward Elgar, forthcoming 2011). See more of Professor Mercurio’s publications here.

Another expert is Professor Julien Chaisse (CUHK), who specialises in Foreign Direct Investments, and therefore also writes about Bilateral Investment Treaties: ‘Do bilateral investment treaties increase foreign direct investment flows – Revisiting the role of legal parameters in economic empirical research’ as co-investigator with Prof. Christian Bellak (Forschungsprojekt ‘Vielfalt von Bilateralen Investitionsverträgen‘), supported by the Vienna University of Business and Economics (WU) & Arbeitskammer Vienna (Austria) (March 2010-March 2012). See more of Professor Chaisse’s publications here.

Tagged Australia, Bilateral Investment Treaty, expropriation, Hong Kong, logo, Marlboro, tobacco industry, TRIPs, UNCTD | 2 Comments

Part III: Lessons Learned from Technology Transfer and Essential IP in China/HK

Posted on June 18, 2011 by Dr. Danny Friedmann

June 16th, the European Chamber of Commerce in Hong Kong (ECCHK) organised together with the European Union Business Information Programme of Hong Kong and Macao the 3rd annual China IPR SME Helpdesk seminar, this time about ‘Technology Transfer and Essential IP Strategies for EU SMEs in Mainland China and Hong Kong’.

For all companies that are involved in adding or acquiring technology to and from China and want to remit the Renminbis earned, this seminar could not have come more timely. You can find Part I here and Part II you can find here.

Peter Cheung, Director of IPD Hong Kong
Photo: Danny Friedmann

Then it was Peter Cheung’s turn. Mr Cheung is the Director of Intellectual Property Department, Hong Kong SAR. He has been representing Hong Kong in WIPO law-making conferences. Mr Cheung settled two WTO disputes (DS 174 US versus EU and DS 290 Australia versus EU, both about trademark protection and Geographical Indications). Mr Cheung’s message was that Hong Kong should and could become an IP hub. Hong Kong’s advantages are, among many more factors, that it is a bilingual special administrative region and that it is part of China.

Claudia Xu, Director of Hong Kong University of Science & Technology
Photo: Danny Friedmann

After this hopeful and optimistic message Claudia Xu, director of Hong Kong University of Science & Technology (HKUST) spoke about the university’s technology transfer centre.

Elizabeth Wong, Associate DLA Piper
Photo: Danny Friedmann

Elizabeth Wong, associate of the Intellectual Property & Technology group at DLA Piper Hong Kong, specialised in trademark law. Ms Wong guided the audience through the economically most important IPRs: copyrights, trademarks and patents. She warned that trademark holders that only have an English name should also register a Chinese character trademark, otherwise there is a big chance that the public will come up with a Chinese character version of the brand, as happened in case of Ralph Lauren’s Polo, namely 三脚马 (three legged horse), and also with Salvatore Ferragamo 飞甩鸡毛 (fly off the chicken feathers).

Ralph Lauren does not always use the polo player on the pony
Festival Walk, Kowloon, Hong Kong
Photo: Danny Friedmann

Ms Wong’s assessment of good and bad Chinese language marks

Ms Wong also assessed some Chinese characters chosen by international brands. My favorite is Heineken: 喜力 (xi3 li3 in Mandarin, but also phonetic in Cantonese hei lik) which means happy power.

Ms Wong explained that one should register your products/services as broadly as possible. She illustrated it with Apple’s application for the iPhone trademark in China in 2002. However, under subclass 0901 computers and computer software. In 2004 Hanwang Technology registered the mark iPhone device in subclass 0907 communication and navigation instruments. Apple lost in the opposition and the subjsequent appeal. Apple had to pay Hanwang Technology a substantial amount to get its mark back. China does protect well known marks, but iPhone was at that time not well known, yet.

Philippe Healey, China IPR SME Helpdesk
Photo: Danny Friedmann

The excellent morning was closed by Philippe Healey who gave a good overview of all the services of the China IPR SME Helpdesk. Check out their website here.

Veronica Llorca and her team of the European Chamber of Commerce have again organised an insightful and inspiring event. Thank you Veronica.

Part I you can find here.
Part II you can find here.

Tagged Apple, Claudia Xu, DLA Piper, ECCHK, Elizabeth Wong, Hanwang Technology, Heineken, HKUST, IPD, iPhone, Peter Cheung, Philippe Healey, Ralph Lauren, Salvatore Ferragamo, Veronica Llorca | Comments Off

Part II: Lessons Learned from Technology Transfer and Essential IP in China/HK

Posted on June 18, 2011 by Dr. Danny Friedmann

For all companies that are involved in adding or acquiring technology to and from China and want to remit the Renminbis earned, this seminar could not have come more timely. You can find Part I here.

Dr. Martin Seybold, founder Seybold & Partner, Beijing
Photo: Danny Friedmann

Dr. Martin Seybold founder of Seybold & Partner in Beijing talked about how to manage technology transfer and the different structures for technology transfer (Contractual Technology Transfer, Transfer into Joint Venture/Foreign Invested Parntership, Transfer into Wholly Foreign Owned Enterprise).
Mr Seybold started with the overly broad definition of what technology transfer is.
Regulations on Administration of Import and Export of Technologies, effective since January 1, 2002: Import and export of technologies in these regulations refer to the transfer of technologies from outside the PRC into or out of the PRC through trade, investment, or economic or technological cooperation.

Such transfer includes assignment of patent rights or rights to apply for patents, licensing of rights to implement patents, assignement of technical know-how, technical service, etc.

Contract Law: “A technology contract is a contract the parties conclude for establishing their rights and obligations in respect of the development or transfer of technology, or in respect of technical consulting or service.”

Mr Seybold made clear how many certifications are needed in case of technology transfer.
Mr Seybold made some important distinctions between direct and indirect consequences of technology transfer. Technology transfer can have an immediate effect on the validity of the contract and transfer of money. Then indirect consequences are caused by IP brought in (“background IP”), or in case of a joint venture Joint IP, improvements that came into being during the joint-venture (“foreground IP”) generated through a project.

Mr Seybold made warnings against specific IP dangers:
Construction industry: copies of engineering drawings/blueprints; Public procurement: often transfer of technology to Chinese co-operation partner is a pre-condition; Chinese certifications: often disclosure of extensive know-how to Chinese inspections, even inspection of facilities in Europe.

Mr Seybold advices that companies should try to know the outcome of the intended technology transfer, which might be easy when the service/product is clearly defined, but it could be really challenging in case of research cooperation.

Examples of Contractual Technology Transfers are Licensing of IP, assignments of IP, consultancy, research cooperation. Your contract partner needs to be a “Technology Transfer Importer” even if only consultancy services are involved.

Mr Seybold stressed to make sure to clarify in the contract to what extent the transferred technology can be used. In case of a delivery of prototype for example: what about licenses in case the prototype becomes a product? And what about the protection of IP of the prototype? Make a distinction between the right of use and the right to register IP in China.

In case of a WFOE, according to Mr Seybold there are different means to transfer money, and validity of the technology transfer contract is usual not a problem.
Bigger challenges are an unwanted loss of IP through employees and registration of your IP by Chinese companies.
To avoid this one should have Non-Disclosure Agreements and Non-Competition clauses with employees.

Stephanie Mitchell, Head of the IPR Team
of the European Commission
DG Enterprise and Industry
Photo: Danny Friedmann

After this well structured presentation Ms Sun, Mr Seybold were in a panel discussion which was moderated by Stephanie Mitchell,. Head of the IPR Team of the European Commission, Directorate-General Enterprise and Industry. Ms Mitchell summarised it eloquently: Know thyself, know your IP.

Part III you can find here.
Part I you can find here.

Tagged Dr. Martin Seybold, European Commission, Stephanie Mitchell | Comments Off

Part I: Lessons Learned from Technology Transfer and Essential IP in China/HK

Posted on June 17, 2011 by Dr. Danny Friedmann

For all companies that are involved in adding or acquiring technology to and from China and want to remit the Renminbis earned, this seminar could not have come more timely.

Veronica Llorca, Project Director-European Union Business Information Programme

Photo: Danny Friedmann

Veronica Llorca (ECCHK) gave the kickoff of the event followed by Peter Cremers, chairman of ECCHK, who in his introductory words illustrated the importance of technology transfer and IP. Mr Cremers stressed that public awareness of IP is the guarantee for companies’ long term success.

Peter Cremers, Chairman ECCHK
Photo: Danny Friedmann

Maria Castillo, Head of Office, EU Delegation to Hong Kong & Macau concisely described the high costs of IP infringements for EU industry.

Maria Castillo, Head of Office, EU Delegation to Hong Kong and Macao
Photo: Danny Friedmann

Then Catherine Sun, managing director of China Intellectual Property Limited in Shanghai gave a presentation about the ‘practical considerations for European companies engaging in technology transfer. Ms Sun gave an overview of the legal framework.

Catherine Sun, Managing Director, China Intellectual Property Limited
Photo: Danny Friedmann

Regulations on Administration of Technology Import and Export adopted by the State Council on October 31, 2001, promulgated on December 10, 2001, effective since January 1, 2002;
Catalogue of Technology of Which China Prohibits or Restricts the Import (First Batch) promulgated by MOFTEC and SETC on December 30, 2001, into force on January 1, 2002, but repealed on November 23, 2007, with the implementation of Catalogue of Technology Which China Prohibits or Restricts the Import, promulgated by MOFTEC on Decmber 12, 2001, in force on January 1, 2002, revised on November 1, 2008;
Catalogue for Guidance on Foreign Investment in Industries issued by the State Development Planning Commission, SETC, MOFTEC on March 11, 2002, into force on April 1, 2002;
Regulations on Guiding the Direction of Foreign Investment promulgated by the State Council on February 11, 2002, into force April 1, 2002;
Notice on How to Adjudicate Disputes on Technology Contracts by Intellectual Property Courts issued by the Supreme People’s Court on June 19, 2001;
The Supplemental Notice Concerning Strengthening Administration for Technology Imnport Contracts and the Sale and Payment of Foreign Exchange issued by MOFTEC and SAFE on March 19, 2001;
Catalogue for Technology and Products that are Encouraged for Import, issued by National Development and Reform Commission, MOFCOM and Ministry of Finance on July 22, 2009.

For dispute resolution Ms Sun made clear that Hong Kong and Singapore are preferred locations for arbitration, and considered politically acceptable by China. She also touched upon articles 24 and 25 Technology Import & Export Regulations 2002 that the technology to be transferred is “complete, error-free, valid, and capable of accomplishing contracted technical objectives.”

This is not because China does not want later improvements, but it means that China wants that the innovator is acknowledged: article 27 Technology Import & Export Regulations 2002 provides that during the validity of the contract, ownership of improvements in technology shall be vested in the improving party. Foreign transferors are advised to limit the geographical area of use of the licensed technology and its improvements, and to negotiate for a nonexclusive license and an exclusive license outside China for use of the improved technology.

Article 26 Technology Import & Export Regulations 2002 require assignees and transferees to keep trade secrets and know-how received from assignors and licensors confidential during the validity of the technology contract.

Although confidentiality is required by government employees responsible for approving and registering technology import and export contracts when they received trade secrets and know-how from transferors and/or transferees, irregularities can happen.

Ms Sun has written extensively about the topic and also about trade secrets.

Part II you can find here.

Part III you can find here.

Tagged Catherine Sun, China IPR-SME Helpdesk, ECCHK, Maria Castillo, Peter Cremers, technology transfer, Veronica Llorca | Comments Off

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

Posted on June 7, 2011 by Dr. Danny Friedmann

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.

Tagged 3D, animation, article 15 TRIPs, certificate of origin, colour, counterfeit trademark, geographical indications, holograms, IHMA, Ralph Sieckmann, sound, Taiwan, Taiwan IP Update, 商標法, 王美花 | Comments Off

Happy Dragon Boat Festival! Unhappy Trademark Protection for Qu Yuan?

Posted on June 6, 2011 by Dr. Danny Friedmann

Free interpretation of
zong zi (glutinous rice).
Traditional zong zi has a triangular form.
Photo Danny Friedmann

Today is the fifth day of the fifth month of the lunar calendar. Time for Duan Wu festival (端午节). On this day Chinese around the world commemorate the great poet Qu Yuan 屈原. Qu is not only famous for his work Chu Ci 楚辞 (58 long and 6 short poems) but also because of his act of patriotism.

Qu, who lived between 340 BCE and 278 BCE, was fed up with the corruption by the local government and in protest drowned himself. (The yoga guru Swami Ramdev was on hunger striking protesting graft, becoming a kind of modern Indian version of Qu, read more about it here.) When the local villagers found out about it, they started to paddle and play the drums to frighten the fish away from Qu’s body (this started the tradition of dragon boat races), and throw rice in the water so that the fish would not eat Qu (this lead to the tradition of eating zong zi) and doctors poured liquor seasoned with realgar in the river in the hope to make the fish drunk (first people drank a bit of this poisonous wine, now some parents draw with it the character for king on the forehead of their children).

After seeing and hearing the dragon boat race, eating zong zi, there was only one thing on IP Dragon’s mind: has the name Qu Yuan been registered in China? In many classes including food and beverages the name was registered, search here. Joel Martinsen wrote already in 2006 about the fact that Qu Yuan was even registered as a trademark for pig-feed, read here. And to add insult to injury, the company that registered is based in Yueyang, Hunan: the location where Qu committed suicide. This location is disputed by South-Korea who claims that the event’s genesis was Korea. Read more about Dano (단오) versus Duan Wu here.

Mr Martinsen asked the question whether the State Administration for Industry and Commerce’s Trademark Office that granted the registration of the trademark was too lenient.
Article 10 Trademark Law: “The following signs shall not be used as trademarks:
(8) those detrimental to socialist morality or customs, or having other unhealthy influences.

So the registrar could invoke this provision to reject the registration. It is my opinion that article 10 (1): Trademark Law: “those identical with or similar to the State name, national flag, national emblem, military flag or decorations of the People’s Republic of China, and those identical with the name of the particular place, or with the name or image of the symbolic building, where a central government department of the State is located” should be extended to include “or national historical figures“, such as Qu Yuan.

In a way Qu Yuan lives on because of the well established traditions of dragon boat races and eating zongzi. Does the prosaic use of the name of the great poet for food, beverage dilute or spread his reputation? That depends. One could imagine it could be enhanced if for example a wine brand would publish some of Qu’s poetic phrases (that are from the pre-copyright era and have been always in the public domain) on the wine label.

Tagged Dragon Boat Festival, Qu Yuan, South Korea, Trademark Law PR of China, 屈原, 楚辞, 端午节, 단오 | Comments Off

Induced Patent Infringement Standard: How To Avoid Proving Intent And Fast Forward To Actual Knowledge

Posted on June 3, 2011 by Dr. Danny Friedmann

Q:”How do you want your induced patent infringement?“
A:”Willful blind, not deepfried“

Spicy vegetarian deep-fried noodle nest
Source: Veggy Monkey Eats

The U.S. Supreme Court decided Global-Tech versus SEB May 31, 2011. It gives a standard for induced patent infringement: namely willful blindness, that goes beyond recklessness and negligence.

The facts are interesting too for IP Dragon:
“Pentalpha is a Hong Kong maker of home appliances and a wholly owned subsidiary of petitioner Global-Tech Appliances, Inc. In order to develop a deep fryer for Sunbeam, Pentalpha purchased an SEB fryer in Hong Kong and copied all but its cosmetic features. Because the SEB fryer bought in Hong Kong was made for sale in a foreign market, it bore no U.S. patent markings. After copying SEB’s design, Pentalpha retained an attorney to conduct a right-to-use study, but Pentalpha refrained from telling the attorney that its design was copied directly from SEB’s.”

So what can be learned from these bare facts? A way for patent holders to avoid this problem of proving intent and fast forward proving actual knowledge is to use the patent numbers of the patents you own in different jurisdictions on your products. Maybe a sticker is suboptimal, because removable. Engraved in or stamped on the metal or plastic could do the trick.

Now back to the case. It was about which intent test to use in case of 35 U.S.C. §271(b): “Whoever actively induces infringement of a patent shall be liable as an infringer.“

The Federal Circuit had used the deliberate indifference test.
The Supreme Court opines that the deliberate indifference test makes it possible that knowledge is found where there is just a known risk that the induced acts are infringing. Instead the Supreme Court (8 minus 1) think that some active effort by the inducer is needed to avoid knowing about the infringing nature of the activities.

In this humble author’s opinion the wording “actively induces” does not correspond to “deliberate indifference”, which seems a mental state. So in this respect he agrees with the outcome of the Supreme Court’s decision.

What is the willful blindness test exactly:
(1) the defendant must subjectively believe that there is a high probability that a fact exists;
(2) the defendant must take deliberate actions to avoid learning of that fact.

There seems to be a continuum from no knowledge to recklessness/negligence to deliberate indifference to willful blindness to actual knowledge.

Read the Supreme Court decision here.

Eileen McDermott, whose coverage of the court deliberations is excellent, is quoting Global-Tech’s counsel William Dunnegan who was proposing to use a “purposeful, culpability test”. This was followed by John Roberts C.J. question of how to apply such a standard across different industries. McDermott points out that in some amici briefs it became clear that for example the semiconductor industry has 420,000 patents. McDermott quoted the reaction of John Roberts C.J. after Dunnegan said that there might be different standards per industry: “Well we’re not going to adopt a special rule for the deep-fryer industry.” Read McDermott’s court report for Managing IP here.

Tagged Eileen McDermott, Hong Kong, intent, Managing IP, patent infringement, willful blindness | Comments Off

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

Posted on June 1, 2011 by Dr. Danny Friedmann

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.

Tagged Brand Hong Kong, movies, Sex and Zen Extreme Ecstacy, Shenzhen | Comments Off

Invisible Gold in Asia: Where The Book Ends The Community Takes Off

Posted on June 1, 2011 by Dr. Danny Friedmann

Professor David Llewelyn’s book Invisible Gold in China
has its own Facebook page.

As you probably know the characters for China are 中 (centre) and 国 (country): the country in the middle. On most Chinese maps the country is actually situated in the middle of the world. Yes, China is an important country in all respects, but so is India and do not count Japan out. Indeed the whole Asian sphere is thriving and intellectual property assets can play a pivotal role of which the well informed can benefit. Professor David Llewelyn’s book Invisible Gold in Asia is daring because it crossed the line of perception, by explaining intellectual property rights concepts to business people. It reminds me of Bruce Lee teaching martial arts to non-Chinese for the first time (movie Dragon: The Bruce Lee Story 1993). And it is no small feat: teaching to view the invisible. Some book stores do not get it: they position Invisible Gold in Asia at the law section. They do not understand that it is a business book about law. Well, for the readers, and for everybody interested in the field of intellectual property law from a business perspective, Professor Llewelyn started not so long ago a community on Facebook. Join the conversation, here.

Tagged Facebook, Invisible Gold in Asia Creating Wealth Through Intellectual Property, professor David Llewelyn | Comments Off

Siren Got Rid of the Letters “Starbucks”

Posted on May 27, 2011 by Dr. Danny Friedmann

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.“

Tagged Brand Hong Kong, logo, Shenzhen, Starbucks Coffee, trademark | Comments Off

TGIF, But What Happened To This Author’s Moral Rights On The IPR.gov.cn Site?

Posted on May 20, 2011 by Dr. Danny Friedmann

星期五: Friday

Thank Goodness It’s Friday

I just finished a blog post on Professor Ken Shao’s interesting article, see here, which ironically is about morality in copyright, and now I see his article republished on the site of Intellectual Property Protection in China ipr.gov.cn: Copyright battles shouldn’t be fought for the wrong reasons. The source “Global Times” is mentioned, but not Professor Shao’s name. And there is no link going to the original site, so you have to do some detective work to find the author.

I know it’s almost weekend but not giving attribution to the author is not something I expect from ipr.gov.cn, nor something an author needs to accept.

Article 22 Copyright Law: “In the following cases, a work may be exploited without permission from, and without payment of remuneration to, the copyright owner, provided that the name of the author and the title of the work shall be mentioned and the other rights enjoyed by the copyright owner by virtue of this Law shall not be prejudiced:
(3) reuse or citation, for any unavoidable reason, of a published work in newspapers, periodicals, at radio stations, television stations or any other media for the purpose of reporting current events;”

Ok, it can be republished, however…

… there are moral rights in the Chinese copyright law. Here are two examples:
Article 10 Copyright Law: “The term “copyright” shall include the following personality rights and property rights: (l) 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;”.

Tagged Copyright Law PR of China, ipr.gov.cn, moral rights, Professor Ken Shao | Comments Off

Online Copyright: Norms Or the Law, One Of Them Needs To Give In

Posted on May 20, 2011 by Dr. Danny Friedmann

On the road to respect for copyright there is not much traffic
Photo Danny Friedmann

Professor Ken Shao, director of China Law Programme of the Murdoch University in Perth, Australia, has an interesting article in the Global Times in which he persuasively explains that a balance between copyright protection and access to knowledge should be struck. Professor Shao points to the “expectation” issue and that internet users have to be made aware that their expectation to get everything online for free is not justified. There seems indeed a disconnect between the norms of internet users and the law. Then he questions whether Shanda Interactive Entertainment Ltd, who successfully sued Baidu before a Shanghai court, did so for the wrong reasons. The Shanghai People’s Court decided that since Baidu had knowledge of the copyright infringements against Shanda, the ISP safe harbor provision did not apply.

Professor Shao’s argument that copyright might overprotect and stifle creativity is valid as such, but does not apply to the decision of Shanda whether or not to sue Baidu. The reason Shanda sued Baidu because they wanted to stop the copyright infringements and be compensated for the damages inflicted upon itself. Nothing frivolous here. Commercial companies should use the law that is available to their best interests. That is their obligation they have towards their employees and stockholders. And the Shanghai court needs to apply the law regardless of who is the plaintiff and defendant, and not in a teleological way (towards a certain goal, in this case access of knowledge by Baidu users). In a moral sense professor Shao might be right if Baidu would not unfairly benefit and if the law was applied consistently (but then the law could be changed) to copyright holders, but his lofty expectations that commercial companies follow many moral principles might not be based in reality.

Although I do not completely agree with Professor Shao, I think his article is a great kick-off for further discussion on the issues copyright morality, a balanced copyright and rising awareness for the internet users about the topic. Read it here.

Tagged Murdoch University, online copyrights, Professor Ken Shao | Comments Off

USITC: “China’s IP and Indigenous Innovation Cost U.S. 48,2 billion dollar”

Posted on May 19, 2011 by Dr. Danny Friedmann

Photo Danny Friedmann
“Maybe we need more resources for IP enforcement?”

The U.S. International Trade Commission report (ITC), commissioned by the U.S. Senate has been published. The title of the ITC report is: China: Effects of Intellectual Property Infringement and Indigenous Innovation Policies on the U.S. Economy. One of the effects, according to the writers, is that IP infringements and preferential treatment for indigenous innovation cost the U.S. economy in 2009 48,2 billion dollar. We have to be patient for the 2010 result. I have glanced through the whole thing. It is nice that they refer to an article of mine “China: China’s National IP Strategy 2008; Feasible Commitments or Road to Nowhere Paved with Good Intentions?” on biblio-page 7.

Tagged China's National IP Strategy, Danny Friedmann, indigenous innovation, IP infringements, US ITC | Comments Off

Digital Economy Act: Google Points Finger To China, But Patent Application Points to Google

Posted on May 19, 2011 by Dr. Danny Friedmann

Photo: Danny Friedmann
Google shedding crocodile tears about freedom of speech

Will the real freedom of expression lover please stand up?

Just as “Digital Opportunity“, Professor Ian Hargreaves’ independent review of UK’s intellectual property law came out, Eric Schmidt, executive chairman of Google is comparing UK’s plans on copyright enforcement with censorship in China.

He was quoted by Josh Halliday saying: “So, ‘let’s whack off the DNS’. Okay, that seems like an appealing solution but it sets a very bad precedent because now another country will say ‘I don’t like free speech so I’ll whack off all those DNSs’ – that country would be China.” Read Mr Halliday’s article for PaidContent here.

Well Google does have first-hand experience with censorship, because in most countries, including China, they filter whatever the government wants them to filter. Ironically, Google went even beyond what is required by governments and filed an application in the U.S. to patent censoring methodology, that censors depending on the location of the user. Namely: ‘Variable user interface based on document access privileges’, U.S. Patent application number: 10/953,496, filed: September 30, 2004, assignee: Google Inc. (Mountain View, CA), you can find it here.

Tagged censorship, digital copyright infringement, Digital Economy Act, Digital Opportunity, freedom of expression, Google and censorship, Josh Halliday, PaidContent, Professor Ian Hargreaves, UK | Comments Off

Reaction to Professor Navarro’s China Bashing: We Get What We Paid For

Posted on May 19, 2011 by Dr. Danny Friedmann

Due to the melamine scare many Chinese parents buy
milk powder in foreign supermarkets;
such as Walmart, or in Hong Kong
Photo Danny Friedmann

July last year I posted a blog about professor Peter Navarro who questioned whether profit making is the only goal of Chinese counterfeiters, read here. Now IP Dragon likes provocative straight forward opinions that do not need to be always politically correct, but the title of professor Navarro’s book “Death by China” is a bit too negative, and too little nuanced for this blogger.

One should never judge a book by its cover, I know, but as far as I understood professor Navarro’s thesis, see here, is based on three parts: counterfeiting kills, China’s mercantilism “kills” jobs, and military buildup could become lethal. About the counterfeiting part:

Yes, most lethal counterfeited products come from China, because most counterfeited products come from China. However, if a product is imported into another country, it is that country’s responsibility. Therefore customs should have more resources to make sure the products that enter are safe. This will make the imported products more expensive, yes. But many products coming from China are still too cheap. Why, because hidden costs are not factored in, and we will be presented the bill later on.

Health and safety costs;
Environmental costs;
Labour costs.

Because of many reasons covered on this blog China’s protection and enforcement of intellectual property rights is challenged. And these problems do not go away anytime soon. So if China cannot guarantee product safety, the countries that import from China (that is about all countries) should take that responsibility in their own hands and rigorously and massively test products.

Tagged counterfeit, environment, health and safety risks, labour rights, Professor Peter Navarro | Comments Off

IP Dragon’s Chinese Provinces Counterfeit & Piracy Observatory

Posted on May 18, 2011 by Dr. Danny Friedmann

This post is a work in process, similar to IP Dragon’s Worldwide Seizures and Measures Against Counterfeit and Pirated Goods Originating in China.

Provinces

Heilongjiang 黑龙江

Jilin 吉林

Liaoning 辽宁

Dandong companies have business talks with universities, China Daily, August 15, 2011.

Qinghai 青海

Gansu 甘肃

Gansu: Patent applications in Zhangye exceeded over 600, ipr.gov.cn, May 23, 2011.

Shaanxi 陕西

Shanxi 山西

Hebei 河北

Hebei: Tangshan promoted patent capacity in local industrial parks, ipr.gov.cn, May 26, 2011.
IP Scene, China Daily, August 14, 2011.

Sichuan 四川
Danny Friedmann, Trademarks That “Innovate and Beautfy Life”: China Trademark Festival, Chengdu, IP Dragon, August 19, 2011.

Hubei 湖北

Henan 河南
 Anger over fake wall, Xinhua, May 15, 2011.

Shandong 山东

Anhui 安徽

Jiangsu 江苏

Yunnan 云南

Guizhou 贵州

Hunan 湖南

Hunan opens various channels for reporting IP violations, ipr.gov.cn, May 26, 2011.

Jiangxi 江西

Zhejiang 浙江

Hainan 海南

Guangdong 广东
 IP Scene, China Daily, August 14, 2011.

Hao Nan, State-level zone for IP finance, investment (Nanhai district, Foshan) China Daily, June 22, 2011.
Police arrest 15 in crackdown on counterfeit Viagra in Guangzhou, China Daily via ipr.gov.cn, May 26, 2011.

Fujian 福建

Municipalities

Beijing 北京

Peking duck in counterfeit battle, Shanghai Daily, May 19, 2011

IP Scene, China Daily, August 14, 2011.

Tianjin 天津

Shanghai 上海

Chongqing 重庆

Autonomous regions

Xinjiang 新疆

Inner Mongolia 内蒙古

Tibet 西藏

Ningxia 宁夏

Guangxi 广西
 IP Scene, China Daily, August 14, 2011.

Special Administrative Region

Hong Kong 香港

Macau 澳門

Other

Taiwan 臺灣

Singapore 新加坡

Tagged IP Dragon's Chinese Provinces Counterfeit and Piracy Observatory, IP Dragon's Worldwide Review of Seizures and Measures Against Counterfeit and Pirated Goods from China | Comments Off

Whitebook on IP Protection in 2010: Is White the New Black?

Posted on May 17, 2011 by Dr. Danny Friedmann

Photo Danny Friedmann

A: “Milestones of the past

don’t equal

beacons to the future”

B: “That is so 2010!“

The 12th Five Year Plan (2011-2015) has already started but its interesting to see what happened during the last year of the 11th Five Year Plan (2006-2010). If you don’t know your history, you don’t know your future, as Bob Marley already sung, right? The State Intellectual Property Office (SIPO), although it is only responsible for the protection and enforcement of patents, published a rather self-complacent “whitebook” on Intellectual Property Protection in 2010. Let us put it this way, it is great to say what has been done, but on the enforcement front there is still a lot of work to be done.

Readers of this blog know that its author does not believe in mass campaigns such as Operation Strike of the Sword and Swordnet. Not because they do not sound cool, they do. The problem is they do not work in the longer run, read more here.

This time I skip Benjamin Disraeli’s phrase, because Thomas Miles, who researches judicial behaviour cracked a relevant joke during the 2011 Coase Lecture in Law and Economics: “Lawyers have only two reactions to a statistical analysis: it’s either obvious, or wrong.”

Statistics about patent applications are interesting but in the end only the granted patents count:
SIPO granted 814,825 patents: a year-on-year increase of 40.0%.

740,620 were granted to domestic applications, representing 90.9% of the total and a year-on-year increase of 47.6%;
74,205 were granted to foreign applications, representing 9.1% of the total and a year-on-year decrease of 7.5%.

So how to explain the decrease of patents granted to foreign companies/individuals, while the applications year-on-year rose by 13,9 percent?

Percentage of domestic patent applications granted: 740,620/1,109,428 = 67 percent
Percentage of foreign patent applications granted: 74,205/112,858 = 66 percent.
So that is nearly the same. Are we seeing now the delay of the financial crisis or a lack of trust in the Chinese patent system in Europe and the U.S., which resulted in not many applications before 2010, so that in 2010 there is a decrease? And that in 2010 the applications increased?

However, although the information was not provided, I think one must also know about what kind of patents we are talking. In former years foreign companies/individuals often applied and were granted a much higher percentage of invention patents, while Chinese companies/individuals often applied for and were granted utility patents (to harness incremental innovation).

The aggregated information for both domestic and foreigner companies/individuals:

135,110 invention patents were granted, representing 16.6% and a year-on-year increase of 5.2%.
344,472 utility model patents were granted, representing 42.3% of the total and a year-on-year increase of 69.0%;
335,243 industrial design patents were granted, representing 41.1% of the total and a year-on-year increase of 34.3%.

For the 12th Five Year Plan the Chinese government wants to increase invention patent ownership from 1.7 per 10,000 people to 3.3. The arguments against using this kind of ratios to achieve innovation I give in my post Patents in China: Quantity obsessed, quality challenged.

Tagged China's 11th Five Year Plan, China's 12th Five-Year Plan, statistics, 专利 | Comments Off

China Launches International Patent Database

Posted on May 16, 2011 by Dr. Danny Friedmann

Photo Danny Friedmann
Raise the flag,
there is reason for celebration

China’s State Intellectual Property Office (SIPO) has launched a new patent search, see here.
The search system also offers machine translation: China Patent Machine Translation (CPMT).

“The system has more than 80 million abstracts of patent-related documents, and more than 70 million full-text documents and charts, collected from nearly 100 countries, regions and organizations.” Read the article about it in the China Daily here.

Good news if you want to see which patents are out there and what quality they have.

Tagged CPMT, patent quality, patent search, SIPO，专利 | 5 Comments

Yao Ming Wants To Reign Supreme Over Yao Ming Era

Posted on May 15, 2011 by Dr. Danny Friedmann

Photo Danny Friedmann
Story for the Sunday (星期日)

Xinhua reported that Yao Ming, the tallest basketballer in the NBA, who has a contract with Reebok to wear their products, sued Wuhan Yunhe Dashayu Sportswear Co., Ltd for allegedly printing in Yao Ming’s handwriting 姚明一代 (Yao Ming Yi Dai) which means Yao Ming era or Yao Ming Era in English on shoes and apparel, see picture here. It was said that Yao Ming Yi Dai is popular in Hunan and that the alleged infringer wants to sell it nationwide.

Yao Ming registered his name as a trademark in several fields in 2002. However, Xinhua wrote that other “companies and individuals have registered Yao-Ming-related trademarks in China, like Yao Ming World, Yao Ming Empire, Yao Ming Rockets etc. Most of these trademarks are not printed on products.”

Hopefully Yao Ming’s era as basketball player is not coming to a close, since the Houston Rockets center is recovering from an ankle that could turn out his Achilles’ heel.

Read Chen Zhi’s Xinhua article here.

Tagged basketball, Hunan, trademark infringement, Wuhan Yunhe Dashayu Sportswear, Yao Ming, ZTE，商标, 姚明, 姚明一代, 星期日 | Comments Off

Polo For the People

Posted on May 9, 2011 by Dr. Danny Friedmann

“Everybody was ~~Kung Fu fighting~~ playing polo”

After ‘Marco Polo Hiuui‘ and ‘Polo Santa Roberta‘ in Hong Kong there is another Polo clone in Wangfujiang 王府井 Dajie 大街 , the busy shopping avenue of Beijing, called Polo Villae. The logo is a polo player shown from the right side of the polo pony. I am sure that the exclusive brand Polo Ralph Lauren is also not happy with this brand, but what adds insult to injury is the way the Polo Villae shop presents its products. Cheap, full of clutter and disorganised. A kind of Polo for the masses. They seem to clone the brand minus its exclusivity, thereby damaging the goodwill and reputation of the original brand.

Wangfujing Dajie in Beijing

From a distance it looks still exclusive

Pile up your products to show
your products are exclusive?

Bags and clothes, just
like the other Polo clones

You can find the infectious song Everybody was Kung Fu fighting by Carl Douglas (made in 1974) mixed with the hilarious comedy Kung Fu Hustle (2004), which makes all kinds of references to other movies, including the Matrix, here.

Tagged copycat, Marco Polo Hiuui, Polo Santa Roberta, Polo Villae, Ralph Lauren, 王府井 | Comments Off

Media Piracy in Emerging Economy Report: Omnipresent China Conspicuously Absent

Posted on May 4, 2011 by Dr. Danny Friedmann

Media Piracy in Emerging Economies, is a very interesting report edited by Joe Karaganis, program director of Social Science Research Council. Digital copying of music, film and software works that fall outside the boundaries of copyright are not only a dilemma in developed countries but also in emergent markets such as Brazil, Russia, India and South Africa, which are covered in country cases. The report also deals with Mexico and Bolivia.

Conspicuously absent is a country case on China. However, the reader can observe this omnipresent protaganist, during the whole 400 pages, a bit like the great white whale in the novel Moby Dick.
The report contends refreshingly that the question is not whether stronger enforcement can preserve existing market structures, but whether business models can emerge that can serve the low end of the media market. Or in the words of Karaganis: the choice is between high piracy/low price and not high piracy/high price.
The report seems to take the copyright law of the respective jurisdictions as a given.

The report has many interesting critical notes, including about the alleged link between piracy and organized crime/terrorism. It persuasively makes the case that in the time that film and music were consumed via CD and DVD and optical disk production was only lucrative on a industrial scale, it might have had some relevance. But first cottage production of optical disks became possible and now even they are in competition with down loading consumers.

Media Piracy in Emerging Economies, funded by the Canadian International Development Research Center and the Ford Foundation, is available via pdf under a Consumer’s Dilemma license, see here.

Tagged Bolivia, BRIC, copyright piracy, Joe Karaganis, Mexico, South Africa | Comments Off

Fast Technology Transfer/IPR Infringements Slows Down China’s High Speed Train

Posted on May 2, 2011 by Dr. Danny Friedmann

Photo: Danny Friedmann
High-speed train just got slower.
Getting a ticket even more so.

Infringed intellectual property rights can have negative influences on society. During the manufacturing process of these goods labour and environmental minimum standards, already challenged in China, can be ignored without ever being checked. Then the products of the manufacturing process can cause real safety challenges to the public.

China’s high profile high-speed trains were so rapidly developed without much consideration to foreign IPR rights, see here. Now it becomes clear that not only IPR infringements were condoned, but that some safety standards seem to have been skipped altogether too, see here.

The Railways Ministry announced that the trains now need to slow down from 218 miles per hour (350 kilometers per hour) to 186 miles per hour (almost 300 kilometers per hour).

Tagged environment, labour rights, patent infringement, Railways Ministry, train, 专利 | 2 Comments

Shake or Crush Your Hand: Huawei versus ZTE versus Huawei

Posted on May 2, 2011 by Dr. Danny Friedmann

Photo: Danny Friedmann
Shake Or Crush Your Hand, you choose.

What if you are developing a product but your competitor has patented some technology needed to achieve the technical result? And at the same time you have some patents that you know you competitor likes to use? You might consider to cross-license. However, from a patent strategy point of view, excluding your competitor from some crucial technology might be the best thing to do.

Bien Perez reports in the South China Morning Post (April 30, 2011): “Huawei had also invited ZTE on many occassions to enter into cross-patent licensing negotiations, but was unsuccessful.“

Then April 28, Huawei sues ZTE in Germany, France and Hungary for alleged patent infringement related to its data card and Long Term Evolution standard (candidate for 4G mobile communication standard) technologies, and trademark infringement.

April 29, ZTE counter sues Huawei for alleged patent infringement on Long Term Evolution.

“Proxy PRC Courts” in Europe and now also China

China Hearsay’s Stan Abrams is not surprised that the legal fight “in a most non-harmonious fashion” between two Chinese giants took place overseas, see here.

It is interesting that Chinese competitors fight some patent and trademark issues abroad. But I think it becomes really interesting now that ZTE has sued Huawei in China. ZTE also threaten to take a series of legal actions globally to protect its IPR rights.

UPDATE: The Hungarian site Portfolio.hu has a picture provided by Huawei that it uses to proof that ZTE is infringing its trademark. See Porfolio.hu’s article Huawei files patent, trademark lawsuits against ZTE, rival rejects charges.

Tagged 4G, Bien Perez, China Hearsay, Huawei, Long Term Evolution, patent infringement, Portfolio.hu, SCMP, Stan Abrams, standards, trademark infringement, ZTE, 专利, 商标 | Comments Off

Intellectual Property and Indigenous Innovation, Two Opposite Roads For Foreign IPR Holders

Posted on April 28, 2011 by Dr. Danny Friedmann

Photo Danny Friedmann
IP and indigenous innnovation
roads going in opposite directions?

The US-China Economic and Security Review Commission will hold hearings on China’s intellectual property and indigenous innovation policies on May 4th. Emphasis will be given on the consequences of these policies for the film, broadcast, and software industries.

Programme:
8:30 am – 8:45 am: Hearing Co-Chairs’ Opening (Commissioners Dick D’Amato and Dennis Shea);
8:45 am – 9:15 am: Panel I: Congressional Perspectives by Senator Slade Gorton (R-WA) – retired;
9:15 am – 10:45 am: Panel II: Film and Broadcast Industry by Mr. Richard Masur, former President, Screen Actors Guild;
11:00 am – 12:30 pm: Panel III: Business Software by Mr. Michael Schlesinger, Of Counsel, Greenberg
Traurig, and International Intellectual Property Alliance and Mr. Ken Wasch, President, Software & Information Industry Association;

1:15 pm – 2:30 pm: Panel IV: China’s Indigenous Innovation Policy by Ms. Thea Lee, Deputy Chief of Staff, AFL-CIO and Mr. Alan Wm. Wolff, Of Counsel, Dewey & LeBoeu.

Information about location here.

Tagged China Intellectual Property, indigenous innovation, USCC | Comments Off

The Process of Trademark Counterfeiting Captured

Posted on April 26, 2011 by Dr. Danny Friedmann

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!

Tagged Apple, counterfeit trademark, Dong Men, Shenzhen, World Intellectual Property Day, 华强电子世界 | 2 Comments

Forgive Them For They Know Not What They Do. Now Do They?

Posted on April 23, 2011 by Dr. Danny Friedmann

God has strange lodgers

Nick Squires reports for The Telegraph that 13 million pounds worth of counterfeit souvenirs was seized before the beautification of the late pope John Paul II.

The products involved were ““family packs” of plastic rosaries which they said could be dangerous because they did not pass European safety standards.“

The assumption is that the counterfeit goods originate from China: “The goods are believed to have been shipped from China to a port in northern Europe and then transported to Italy in trucks.” Read Squires article here.

Catholic News USA wrote:

“The 5.5 million items seized – which included fake Rolex, Omega and Cartier watches as well as pirate Mont Blanc pens – had a market value of around 15 million euros (S$26.9 million), it said according to an AFP report.” Read here.

Another problem was that some people started to sell tickets to the beautification: “A further problem is reported by the Prefecture of the Papal Household, informed of the existence of “improper deals”, particularly via the internet, of services and tickets for payment The Household points out that there is no need of tickets to attend the ceremonies for the beatification. In addition, tickets granted by the Prefecture of the Pontifical Household, at pontifical ceremonies or general audiences, are always free, and no person or institution can demand any payment.” Read more here.

Last year the Vatican denounced the deaths of 700,000 people because of counterfeit drugs. See here.

If the counterfeiters wrestle with their conscience they cannot use the iPhone app “Confessions” to get forgiveness according to the Vatican, read here.

Tagged Cartier, counterfeit, Mont Blanc, Omega, Rolex, Vatican | Comments Off

Copyright Piracy of Communist Books is Not Patriotic

Posted on April 22, 2011 by Dr. Danny Friedmann

Photo Danny Friedmann
“A book is like a garden that you can put into your pocket”

IP Dragon Weekend Edition

As the Chinese proverb goes “a book is like a garden that you can put in your pocket.” However, you cannot multiply books just as plants (well not in the case of genetically modified plants), even though the government might find the books commendable.

The General Administration of Press and Publication (GAPP) said that the authorities have seized 27 suspects so far for pirating a book on the history of the Communist Party of China (CPC), Mu Xuequan writes for Xinhua. Eight publishers and binderies were closed in Sanhe City, in Hebei.
Mu writes: “Five officials also received punishments for dereliction of duty”.

The book that was counterfeited was the second book in the series about the crucial period 1949-1978 period. From the founding of the People’s Republic of China by Mao Zedong until the economic reforms and opening up to the world policy of Deng Xiaoping.

The GAPP tries now to fight copyright piracy by launching the Green Bookmark campaign “aimed to persuade the public to buy authorized publications.” But how can one avoid that the copyright pirates copy the Green Bookmark too?

Read the Xinhua article here.

Tagged Chinese Communist Party, copyright piracy, GAPP, 版权 | Comments Off

Double Dragon Head: Looking Backward, Looking Forward

Posted on April 22, 2011 by Dr. Danny Friedmann

Photo Mountain
Warren states, Shanghai Museum
Some rights reserved
Double headed dragon,
looking backward
looking forward

Looking backward:

星期一 Another mass anti-IP infringement campaign with a fancy name, here.
星期二 Oxford University professor about brandscape in China patient, but everything can go wrong, here. Some illustrations of the things that go wrong in Hong Kong, Micky copyright piracy, here and Polo/Burberry clone here.
星期三 Hangover from counterfeit liquor and wine, here.
星期四 IP Bank in Taiwan and China here, Shanghai Disneyland Shrouded in Secrecy, here.
星期五 Pfizer Is Moving R&D to China After History of IP Challenges here, Judicial interpretation for contributory liability is getting drafted here, TGIF: Magical-realist authorises publication in China here.

Looking forward:

IP Dragon Weekend Edition
星期六 If you love the Party, don’t buy counterfeit communist books.
星期日 For the Sunday: Chinese counterfeit products “desecrate” the Vatican.

The Week Ahead (April 25-29)

星期一 Optimist/Negative Views Indigenous Innovation.

星期二 April 26th, China Cares About World IP Day, Does It Care About IP Enforcement Too?; Mobile Phonies.

星期三 “Clever, charming and charismatic man”: biggest UK counterfeit importer from China; Too soft on software piracy?

星期四 Ford Trade Secret Infringer Sentenced.

星期五 China’s TV Format Business Starting To Respect IP?; Tiffany sues Four Chinese jewellery sellers for counterfeiting.

Tagged Double Dragon Head | Comments Off

After 44 Years Chinese Lovers of Literature Can Legally Buy “One Hundred Years Of Solitude”

Posted on April 22, 2011 by Dr. Danny Friedmann

Photo Festival Internacional de Cine en Guadalajara

Some rights reserved

TGIF

Zhang Lei wrote a nice article for the Global Times about Thinkingdomhouse, a publisher who achieved to get a copyright license for China from Nobel Prize for Literature laureate Gabriel García Márquez to publish his masterpiece ‘One hundred years of solitude’ (Cien años de soledad).

“Unauthorized editions were widely available in markets as early as the 1980s, which infuriated the author, who vowed that even 150 years after his death, his works would not be authorized in China, when he visited in 1990.” Well if Márquez was quoted correctly, he might be able to abstain Chinese publishers from authorised versions, but his copyright will expire 50 years after the moment he will exchange the temporary with the eternal. Then again within magic-realism, a writing style Márquez brought to great fruition, 150 years starting in the 1980s is a possibility which can not be completely excluded. It is great news that this summer an authorised version of Márquez’ masterwork will be on sale in China. On the one hand it is moral rights of the author to determine whether he makes his work public or not (le droit de divulgation). On the other hand you cannot blame Chinese literature lovers that they want to read Márquez’ masterpiece of which Pulitzer Prize winner William Kennedy said “the first piece of literature since the Book of Genesis that should be required reading for the entire human race.”

Zhang is mentioning China’s membership of the Universal Copyright Convention in 1992, as the moment the publishing industry has gradually increased awareness of copyright. According to this convention an author had to put a © on their work, his name and the year of creation in order to be protected via copyright.

Article III (1.) Universal Copyright Convention: “Any Contracting ‘State which, under its domestic law, requires as a condition of copyright, compliance with formalities such as deposit, registration, notice, notarial certificates, payment of fees or manufacture or publication in that Contracting State, shall regard these requirements as satisfied with respect to all works protected in accordance with this Convention and first published outside its territory and the author of which is not one of its nationals, if from the time of the first publication all the copies of the work published with the authority of the author or other copyright proprietor bear the symbol © accompanied by the name of the copyright proprietor and the year of first publication placed in such manner and location as to give reasonable notice of claim of copyright.”

Interestingly, this is in contradiction to the “no formalities” requirement of article 5 (2) Berne Convention for the Protection of Literary and Artistic Works to which China acceded in the same year. UNESCO’s Universal Copyright Convention has been rather dormant lately, but it could already make a useful distinction between works in the public domain without the © and those protected by copyright. It avoids also to some extent the copyright orphan problem, because the name must be included. Creative Commons has been “ported” to China and makes clear what kind of use is allowed online, see here.

Read the Global Times article here.

Tagged Berne Convention, copyright, Global Times, le droit de divulgation, Márquez, moral rights, Nobel Prize, orphan, Pulitzer Prize, TGIF, Universal Copyright Convention, William Kennedy, 版权 | Comments Off

China’s Supreme People’s Court Will Tell You How Safe Safe Harbours Are

Posted on April 22, 2011 by Dr. Danny Friedmann

Photo Rneches
Main entrance Supreme People’s Court Beijing

The writers versus Baidu case triggered the Supreme People’s Court to draft a judicial interpretation of online copyright, and can be expected this year. A refinement of the Regulation on Protection to Network Dissemination of Information, is welcomed. Hopefully the Supreme People’s Court will succeed in making the principles crystal clear whether a safe harbour applies or an online service provider is held contributorily liable. The president of the Supreme People’s Court, Kong Xiangjun was quoted by Li Mao saying: “The judicial interpretation would help protect copyright owners, network service providers as well as online users [..].” Judge Kong also said that half of all copyright cases were online cases. I hope they also illuminate the subject of online trademark, which sometimes is interpreted analogously with online copyright, but, given is distinct character, deserves its own attention from China’s highest authority in the interpretation of the law.

Read Li Mao’s article for the Global Times here.

Tagged contributory liability, copyright, Li Mao, Regulation on Protection to Network Dissemination of Information, safe harbour, Supreme People's Court, trademark, 商标, 版权 | Comments Off

Pfizer Starts R&D in China After IPR in China Challenges

Posted on April 21, 2011 by Dr. Danny Friedmann

Photo Danny Friedmann
Perilous hills, but nice view.
Climb worth the risk?

As one of the first U.S. companies pharmaceutical giant Pfizer has decided to start doing R&D in China. This way the company can probably take advantage of indigenous innovation preferential rules if it invents and patents in China. Read here.

Pfizer had some IP challenges in China. To brush up your memory, here is a summary of how Pfizer bot back its Viagra patent:

September 19, 2001 SIPO granted a patent for Viagra’s active ingredient;
A dozen Chinese pharmaceutical companies file a petition to invalidate the patent, alledging that it failed adequate disclosure under article 26 Patent Law (at the time Patent Law 2000) and lacked novelty as required by article 22 Patent Law (at the time Patent Law 2000);
July 7, 2004 Patent Reexamination Board invalidated Pfizer’s Viagra patent because it failed to meet the disclosure requirement;
September 28, 2004, Pfizer appealed the Patent Reexamination Board’s decision at the Beijing No. 1 Intermediate People’s Court;
June 2006 Beijing No. 1 Intermediate People’s Court reversed the invalidation and remanded the case to SIPO for further determinations;
The Chinese pharmaceutical companies appealed to the Beijing High People’s Court;
September 7, 2007 Beijing High People’s Court upheld the Beijing No. 1 Intermediate People’s Court.

Tagged patent invalidation, patent law, Pfizer, Viagra, 专利 | Comments Off

The Lay-Out of the Magic Kingdom in Shanghai Wrapped Up in a Trade Secret

Posted on April 21, 2011 by Dr. Danny Friedmann

“One rat will invite his friend”

In November 2009 the Chinese government approved that Shanghai would get its own Disneyland and even the first Disney resort in China. Hong Kong was not amused, because as of 2016 Hong Kong will no longer be the exclusive gate to the Magic Kingdom in China. Brady MacDonald wrote for the Los Angeles Times the reasons why the lay-out of the Shanghai Disneyland is shrouded in secrecy:

“To prevent knockoff rides by rival Asian theme parks, which happened before Hong Kong Disneyland’s 2005 opening.
To preserve creative flexibility for Disney’s Imagineers during the ongoing “Blue Sky” development phase, when rides, shows and even entire lands appear or disappear.
To tread lightly with the Chinese government during the upcoming five-year engagement, which follows a delicate two-decade courtship.“

Major construction of Shanghai Disneyland is expected to begin next month (May 2011), then it will become harder to keep the trade secret.

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

Posted on April 20, 2011 by Dr. Danny Friedmann

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.

Tagged Intellectual Property Bank, MOEA, patent, Taiwan, Zhongtian Technology Company, 知识产权, 銀行, 银行 | Comments Off

On Counterfeit liquor and wine

Posted on April 19, 2011 by Dr. Danny Friedmann

People’s Republic of China

During the massive IP enforcement campaign “Bright Sword” police cracked down in Beijing, Jiangsu, Zhejiang and Guizhou in 40 cases involving the production and selling of fake alcohol. China Daily wrote: “March 23 to 25, police raided 272 production and sales outlets nationwide and found more than 300 devices used for counterfeiting as well as over 13.5 million pieces of forged packaging materials, such as bottle caps, labels and boxes of well-known brands. Meanwhile, more than 30 tons of bulk wines and 13.5 million fake bottles, caps and labels worth up to 2 billion yuan (US$ 306 million) were also seized by police.” Read here.

Hong Kong
Special Administrative
Region

It is estimated that five percent of all wines in China are counterfeit. Is Chateau Le Tromperie on sale, instead of the label that is on the bottle? According to an article by Alexandra Lages for the Macau Daily Times: “Hong Kong’s expert Simon Tam recently alerted that the HKSAR newly-gained reputation as the wine-trading hub must be protected against fakes in the market. Tam said that the problem is not serious yet, but urged authorities to act fast.”

Macau
Special Administrative
Region

In China, Hong Kong and Macau wine drinking has only recently become en vogue. Thus not everybody has the knowledge yet of what taste a certain wine should have. If it smells like paint remover it is clear, but the difference between a bulk wine and some special wine can be more subtle. And it is well known that it is near impossible to find out before buying some vintage wine whether the bottle is real but its content might be not. There is a luctrative trade in real bottles. As Peter Shadbolt points out Chateau Lafite bottles can fetch 1,500 US dollar on the black market in China. He quotes Fongyee Walker, a Beijing-based wine consultant with Dragon Phoenix Fine Wines. Ms Walker makes it clear that gifting is bad for a brand. Because if someone receives a counterfeit wine as a gift and recognises it as a counterfeit, chances are that he or she in turn will give it to someone as a gift, etc. See here.

(Chateau La Tromperie= Castle The Deception)

Read Ms Lages article here.

Tagged Alexandra Lages, Bright Sword, Chateau Lafite, counterfeit wine, Dragon Phoenix Fine Wines, fake liquor, Fongyee Walker, Hong Kong, Macau, mass campaigns, Peter Shadbolt, 商标 | 2 Comments

Why Could Polo Ralph Lauren/Burberry Clone Get Trademark In Hong Kong?

Posted on April 19, 2011 by Dr. Danny Friedmann

The outdoor advertisement of Polo Santa Roberta no longer has the
Burberry tartan pattern background

“Buy one get one free”
Is this what luxury goods manufacturers such as
Polo Ralph Lauren and Burberry want to be associated with?

Here you can see the ® of registered trademark on the promotional poster

Still Polo Santa Roberta bags use Burberry-like tartan patterns

Polo Santa Roberta shop seen yesterday in Mongkok, Hong Kong. Remember my January 2011 posting when I thought that these kinds of shops were closed in Hong Kong, see here.

Polo Santa Roberta uses the ® of registered trademark in their promotional material. After checking the database of the Intellectual Property Department of Hong Kong, see here, they indeed have registered their brand (which is in my eyes controversial).

The Polo/Lauren company registered (actual registration) its logo with the polo player with a stick high in the air in combination with the words ‘Polo’ and trademarks in July 12, 1994 in class 25 and July 17, 1996 in class 42. In February 2, 1999 was the actual registration of the word mark Polo for class 25.

Santa Roberta Polo & Racoquet Club (owned by Hampton, Winter and Glynn), actual registration for class 25 on January 27, 2006. stick low. See the spelling of Racoquet.

Polo Santa Roberta (owned by Santa Roberta Polo & Racquet Club International Limited), actual registration for classes 3 and 25 July 7, 2009, stick high in the air.

I am interested to know why the Trade Mark Registry of the Hong Kong Intellectual Property Department did not refuse the registration of Polo Santa Roberta based on article 12 (3) Trade Marks Ordinance:

“A trade mark shall not be registered if –

(a) the trade mark is similar to an earlier trade mark;

(b) the goods or services for which the application for registration is made are identical or similar to those for which the earlier trade mark is protected; and

(c) the use of the trade mark in relation to those goods or services is likely to cause confusion on the part of the public.”

Not only The Polo/ Lauren company’s trademark is harmed, but the registered designs of Burberry tartan patterns as wel

Polo Santa Roberta shirts are no longer sold at the Ladies Market (女人街) in Mongkok. Instead “Polo” shirts are sold.

Polo shirts with the iconic Polo player logo
at sale at Ladies Market (女人街), Mongkok, Hong Kong

One “Polo” shirt for 45 Hong Kong dollar (a little over 4 euro),
three for 120 Hong Kong dollar (almost 11 euro)

During the Tang dynasty, early 8th century CE, polo was a popular sport
This figurine can be found at Musée Guimet in Paris

Tagged Burberry, Hong Kong, IPD, Ladies Market, Polo Santa Roberta, Ralph Lauren, registered designs, tartan, Trade Mark Registry, Trade Marks Ordinance, trademark rights, 商标, 女人街 | 1 Comment

Mickey Mouse Went To the Ladies’ Market in Hong Kong Without Disney Knowing It

Posted on April 18, 2011 by Dr. Danny Friedmann

Unauthorised Use of Disney’s copyright

Smoothite versus Samsonite

Tagged copyright infringement, counterfeit trademark, Hong Kong, Samsonite, Smoothite, Walt Disney | Comments Off

Emergent brandscape in China: “Sony was not built in a day”

Posted on April 18, 2011 by Dr. Danny Friedmann

David Barboza interviewed Karl Gerth who teaches modern Chinese history at Oxford University about his new book ‘As China Goes So Does The World’. Professor Gerth is optimistic about Chinese brands. His take is that China will get strong brands indigenously or it will acquire foreign brands. We just have to give it some time: Professor Gerth: “Sony was not built in a day.”

However, on an ominous note professor Gerth said about IPR protection and enforcement in China: “Rather than China increasingly protecting the intellectual property like the brand integrity of multinationals, perhaps counterfeits manufactured in China and exported globally will undermine global brands and consumerism itself. This is happening. Even as retailing and branding have been encouraging much more consumption in China, consumer confidence (both nationally and internationally) has been undermined by the massive production of Chinese counterfeits.”

Read Mr Barboza’s interview for the New York Times here.

Tagged brand, counterfeit trademark, David Barboza, Oxford University, Professor Karl Gerth, Sony, 商标 | Comments Off

How bright is Bright Sword?

Posted on April 17, 2011 by Dr. Danny Friedmann

Is the Force with mass campaigns?

Are mass campaigns of intellectual property enforcement mere temporary patchwork, leaving untouched the underlaying problems? Most mass campaigns are still announced with starting date and expiration date. The only thing trademark counterfeiters and copyright pirates need to do is book a holiday and start after the campaign is over, reinvigorated. Now I exaggerate a bit. But mass campaigns are in my view suboptimal and overrated, despite all the impressive statistics, and to be consumed by foreign media tired about reporting on IPR infringement cases in China.

The newest campaign is named Bright Sword. The question is whether it is a bit less typical in that it will continue for quite a long time. It started November 2010 and will continue until the end of 2011. The police seized 14,185 suspects in five months, allegedly involved in over 8,000 cases of IPR infringements, according to the Public Security Ministry.

Zhang Yan and Cai Yin wrote for the China Daily that Bright Swords focuses on eight fields including fake international brands, fake food and drugs, pirated film and television works as well as organised crime. Zhang and Cai wrote in the same article that the police is targeting four activities: agriculture, fake drugs, counterfeit wine and food, as well as fake brands. If the journalists are so unclear about which categories are targeted IPR infringers have a more difficult job finding out if they need to temporarily stop their activities.

Deputy director of the ministry’s economic crime investigation department, Gao Feng was quoted saying that of 7,000 production and sales outlets were shut down and that the ministry will focus on the supervision of 340 major cases to ensure thorough investigation and punishment of violators. This information is a bit cryptical: does it mean that out of 8,000 cases just 340 cases are prosecuted?

Read the China Daily article here.

Tagged Bright Sword, China Daily, copyright piracy, mass campaigns, Public Security Bureau, trademark counterfeit, 商标, 版权 | Comments Off

Sunday Specialty: SARFT Knows Watching Time-travelling Is Bad

Posted on April 17, 2011 by Dr. Danny Friedmann

Photo Danny Friedmann
星期日 = Sunday: Time-travelling not allowed. Not even by taxi.

The State Administration for Radio Film and TV (SARFT) came up with the Notice Concerning the Nationwide Television Drama Shooting Filing Announcement for March 2011.

“In the recent few months, the general situation of reporting and filing of programmes nationwide is good, but we have also discovered some incorrect creation sprouting: individual supernatural dramas and time-travel dramas reported for filing, have compiled myths as they please, the plots are strange and bizarre, techniques are absurd, and they even play up feudal superstition, determinism, samsara and reincarnation, value orientations are ambiguous, and they lack a positive ideological sense.”
SARFT knows what content “lacks a positive ideological sense” and what “value orientations are ambiguous”. No more watching ‘Back to the Future‘. Now I am also becoming curious about SARFT’s take on the positive ideological way we best should watch drama. Is time-shifting ok? Read SARFT’s complete notice on Rogier Creemers’ excellent China Copyright and Media here.

Time-travelling cannot completely excluded theoretically, at least according to Tom Weiler and Chui Man Ho. These physicists think that the Large Hadron Collider could be sending matter back in time. Read Science Daily of March 16, here.

Tagged China Copyright and Media, Chui Man Ho, Large Hadron Collider, Rogier Creemers, SARFT, Tom Weiler, 星期日 | Comments Off

Saturated Saturday: Tsingtao Beer China’s Well Known Trademark

Posted on April 16, 2011 by Dr. Danny Friedmann

Since September 20, 1991, Tsingtao Beer 青島啤酒 has been recognised as a well-known trademark in China. It was approved this status by the State Administration for Industry and Commerce (SAIC) during the first batch of China’s Well-known Trademarks. Wang Jun, of Deheng Law Firm has a nice overview of the dual track system of well-known trademarks, see on China IP here.

This means that if Tsingtao Beer did not register its trademark it would still be able to stop other people of using the brand name for the same product category (beer). If they registered the well-known trademark, which they did, they canalso protect the trademarked brand against use in all product categories (even unrelated to beer).

More about the fundamentals of well-known trademarks see here:

Tagged 6bis Paris Convention, dual track, Judicial Interpretation on Famous Trademarks, Tsingtao Beer, well-known trademark, 青島啤酒 | Comments Off

Peter K. Yu Kicks Off the UNH Franklin Pierce Center for IP Distinguished Speaker in IP Lecture Series

Posted on April 15, 2011 by Dr. Danny Friedmann

Mary Wong, the first director of the University of New Hampshire Franklin Pierce Center for IP invited Drake University professor Peter K. Yu to give the inaugural speech of the Franklin Pierce Center for IP Distinguished Speaker in IP Lecture Series, April 14, 2011.

Professor Yu gives a grand tour of IP enforcement, and recommends a holistic solution to get a more enabling environment. In regard to new international enforcement treaties such as ACTA, Professor Yu asserts that countries such as China, India and Brazil should be included.
Thank you Danielle Barrick for the link.

[ustream vid=14016931 hid=0 w=480 h=386]
Video streaming by Ustream

Tagged Franklin Pierce Center for Intellectual Property, IP enforcement, Peter K. Yu, University of New Hampshire | Comments Off

Sino-U.S. Investment Treaty: A Little BIT For You and Me

Posted on April 14, 2011 by Dr. Danny Friedmann

Photo “Shaking Hands” by Nicola Corboy (Some rights reserved)

In May, 2011, the U.S.-China Strategic and Economic Dialogue will be resumed in Washington. Daniel Michaeli, research associate at the Council on Foreign Relations, a think tank and publisher, opines in the Huffington Post that the U.S. should negotiate a bilateral investment treaty (BIT) with China: “China has already signed 120 investment treaties around the world, including with Japan, Germany and the United Kingdom. The most recent ones have clauses providing foreign investors with the option to resort to binding international arbitration for intellectual property disputes, if Chinese local courts cannot resolve such issues satisfactorily (as, indeed, too often they cannot).”

According to Mr Michaeli jobs do not necessarily follow U.S. investments to China: “Recent data indicates that U.S.-based multinational corporations locate more than half of their employees in the United States, where they have 70 percent of their operations and spend 87 percent of their research and development budget.”

Read Mr Michaeli’s article here.

Tagged bilateral trade agreement, China-US Strategic Economic Dialogue, Council on Foreign Relations, Daniel Michaeli, Huffington Post, Nicola Corboy | Comments Off

The Influence of China’s Trade deficit on IP Enforcement in China

Posted on April 13, 2011 by Dr. Danny Friedmann

Light at the end?
Photo: Danny Friedmann

Remember that in 2009, because of the financial crisis, the Supreme People’s Court urged the lower courts to conservatively grant injunctions, read here. Now too, there are economic circumstances that might not be conducive to the enforcement of IPRs in China. For the first time in seven years China has a trade deficit. China has a huge trade surplus with the U.S. and Europe, but a trade deficit with countries such as Saudi Arabia and Australia, because they import so many commodities. Since commodity rich countries can only absorb so many Chinese export products, chances are that China will try to compensate its trade deficit with countries it already has a trade surplus, such as the U.S. and Europe. Therefore it might not be willing to import more trademarked, patented and copyrighted goods from the U.S. and Europe, which could stimulate a demand for counterfeit and pirated goods. Read more here.

Tagged financial crisis, IP enforcement, Supreme People's Court, trade deficit | Comments Off

50 percent Nike 50 percent Li-Ning, 0 percent Creativity…What percentage confusion?

Posted on April 13, 2011 by Dr. Danny Friedmann

Photo: Danny Friedmann
Seen today in hypermarket Carrefour, Futian, Shenzhen
Name of the brand: Fujian Jinjiang Hengren Shoes

Tagged clone, copycat, Fujian Jinjiang Hengren Shoes, Li-Ning, Nike | Comments Off

What Came First? Fake Chicken or Fake Egg

Posted on April 12, 2011 by Dr. Danny Friedmann

In 2008 I wrote a column for a Dutch magazine in which I assert that even people who do not want to do business in China or have no interest in IP at all, should take an interest in it, since IP in China will find you. Wherever you are. To map this process I started in April 2009 with IP Dragon’s Worldwide Review of Seizures and Measures Against Counterfeit and Pirated Goods Originated From China. The Worldwide Review is regularly updated, latest for example about Matryoshkas made in China.

Last week IP Dragon was giving a presentation about the differences between IP in Hong Kong and China to the students of the University of Amsterdam’s Institute of Information Law who were on an IP excursion to the Special Economic Region. The Amsterdam students’ imagination could not entail the fact that eggs are counterfeited in China (and Malaysia). Earlier I wrote about fake egg school, where they teach migrants to the big cities how to manufacture fake eggs: ‘You Cannot Buy A Real Egg in China Without Breaking It‘. These eggs could severely harm someone’s health. The students asked me how one could distinguish between fake and real eggs. According to Key of ChinaHush, which has an excellent article on the phenomenon the pointers to identify fake from real are:

1. Fake egg’s shell is a little shinier than the real egg, but it is not very noticeable.

2. When touch the fake egg by hand, it feels a little rougher than the real egg.

3. Shake the fake egg will make some noises, because water overflows from the solid agent.

4. Real egg smells a little like raw meat.

5. Tap the egg lightly. Real egg makes a more crisp sound than the fake egg.

6. Shortly after opening the fake egg, egg yolk and egg white will melt together. This is because the egg yolk and egg white are made of the same raw materials.

7. When frying a fake egg, the yolk will spread without being touched.

Recently fake eggs have been found in Malaysia. Read in the Borneo News here. It is unclear whether they were domestically made or originate from China. Since fake eggs can not spoil transport from China might be possible. How to solve this problem? A student suggested to stamp the eggs, but stamps can be easily counterfeited as well. I proposed to register each egg, so that you can look up a code and see whether an egg is genuine. “Check an egg!” a student said. Good name for such a website, indeed.

Now you might be a vegan, having nothing to do with animal products. Unfortunately even then IP in China could pose a problem for you: fake rice. And it is not feasible to register each rice grain. Product chain protection and authentication technology are invaluable in China. Read here.

Tagged fake egg, IP Dragon's Worldwide Review of Seizures and Measures Against Counterfeit and Pirated Goods from China, Malaysia, Matryoshkas, University of Amsterdam | 2 Comments

Tim Smith’s Guest Blog: Taobao Online Infringement Case

Posted on April 12, 2011 by Dr. Danny Friedmann

星期二 = Tuesday Photo Danny Friedmann

Taobao.com, the popular Chinese e-commerce platform, has appealed against a verdict handed down by a Shanghai court in late March that it should pay compensation of RMB 10,000 (around GBP 950) for its failure to take sufficient steps to prevent a vendor selling counterfeit products on its platform.

The claimant had sent seven letters to Taobao asking it to delete information supplied by the vendor regarding the counterfeit products. Taobao deleted the information but did not take any further action against the vendor such as freezing its account or checking other information uploaded by the vendor to the platform. Consequently, the vendor was able to maintain information about other counterfeit products it was selling on Taobao.

The first instance court stated that if a network provider deletes information after receiving a notice, this is a necessary condition of non-liability, but not a sufficient condition – it may need to do more. Taobao had failed to take further steps against this specific infringer – something its own IPR protection rules already contemplate – and consequently was liable for contributory infringement.

This marks a departure from previous decisions, which did not impose liability on Taobao if it immediately deleted the counterfeit product information. Article 36 of the Tort Liability Law deals specifically with internet providers, stating that “[w]here a network service provider knows that a network user is infringing upon a civil right or interest of another person through its network services, and fails to take necessary measures, it shall be jointly and severally liable for any additional harm with the network user.”

The Chinese judiciary is currently drafting a judicial interpretation to deal with on-line liabilities and safe harbours in the copyright field, and it is hoped that will add further clarity to the developing jurisprudential picture.

Guest blog by Tim Smith, Rouse Beijing.

Tagged contributory liability, joint liability, Rouse, Taobao, Tim Smith, Tort Liability Law, 星期二 | Comments Off

Patents in China: Quantity Obsessed Quality Challenged

Posted on April 12, 2011 by Dr. Danny Friedmann

Time for quality patents
Photo: Danny Friedmann

Now we are all following Ericsson sueing ZTE for patent infringement in Germany, UK and Italy, read here. Followed of course by ZTE trying to invalidate Ericsson’s patent at China’s Patent Re-examination Board, read here, because of an alleged lack of novelty, inventiveness or usefulness. In other words: lack of quality.

Wan Gang 万钢 minister of Science and Technology, was saying some remarkable things about innovation that might bode not too well for patent quality, when he was interviewed during a press conference held by the State Council Information Office, April 2 about China’s scientific and technological research as outlined in the 12th Five-Year Plan.

Minister Wan was quoted by the Global Times saying that China’s budget for research and experiment across the country should account for 2.2 percent of GDP. And that the number of patent-holders per 10,000 people should be the second benchmark.

One can question the usefulness of the latter benchmark. What kind of patents are meant, utility patents which are for incremental innovations, design-patents or invention patents? Read more about utility patent here. Quantity does not say much about the quality of patents. And patents are preoccupied with usefulness (article 22 Patent Law 2008), and scientific discoveries (article 25.1 Patent Law 2008) are excluded of getting a patent. while it could be the case that fundamental research is most fruitful in the longer run.

Read the interview at Global Times here.

Tagged design patent, Ericsson, Global Times, invention patent, Ministry of Science and Technology, Patent Law 2008, patent quality, utility patent, Wan Gang, ZTE，专利 | Comments Off

Trends Counterfeit Trademarks/Infringed Patents From China: Smaller Scale, Bigger Risks

Posted on April 11, 2011 by Dr. Danny Friedmann

Two trends can be abstracted from the 2010 report of the Austrian Federal Finance Ministry to the National Council about the application of Council Regulation (EC) 1383/2003 of July, 22 2003, concerning customs action against goods suspected of infringing certain intellectual property rights and measures against goods found to have infringed such rights. According to the report these trends are in line with the other countries of the European Union.

Unlike in the movie
Matrix, there is no choice
between a blue or red pill.

Only blue pills.
But which one is real?

• Trend 1. From containers and trucks to postal packages via internet

The Austrian customs administration in 2010 seized 2,803 cases after it implemented the EC Counterfeiting Regulation 2004, these consisted out of 292,606 articles. This resulted in (because sometimes a consignment involves more than one person) 4,038 prosecutions. The products represent a value, if they were genuine goods, of € 6,765,057. This is much less than in 2009, when the amount was 16 million euro. So smaller amounts representing lesser value per consignment. These were ordered via the internet and send via the postal service.

• Trend 2. From counterfeit luxury goods to counterfeit daily products with lower original prices
and higher risks

Mass consumer products such as food, cosmetics and hygiene products, auto spare parts, toys and equipment, with all inherent health and safety related risks. Fake drugs were mainly lifestyle drugs such as sexual enhancers, diet pills and hair growth preparations. These trends together are quite a challenge for customs the world over. To check each and every postal package is hardly feasible. If customs in cooperation with industry can find an automised way to authenticate goods, it could decrease risks.

The report says that the EU-China customs action plan, which intensifies the contact between the respective customs, will be extended to 2012. The action plan was a pilot project and will now probably become institutionalised.
For those who can read German, read the Piracy report 2010 of the Federal finance ministry of Austria (in German): Produktpirateriebericht 2010 des Bundesministers für Finanzen (III-226 d.B.) , April 1, 2011.

Tagged Austria, authentication, Council Regulation 1383/2003, counterfeit luxury goods, counterfeit trademark, customs, EU, patent infringement, trends, 专利, 商标 | Comments Off

Sue Where The Assets Are: Reflex Packaging is suing former client Lenovo for patent infringement in US

Posted on April 7, 2011 by Dr. Danny Friedmann

By Michiel Tjoe-Awie

Reflex Packaging (Reflex) was supplying patented thermoformed cushions to pack Lenovo’s computers. In 2008 Lenovo asked Reflex to remove their name and patent number from the packages. Reflex refused to do so, only to discover later that Lenovo continued to use the same patented package which were allegedly produced without there consent.

The Epoch Times’ Matthew Robertson editor quoted Forrest Smith as saying: “The commentary from our counsel over in China was (…) frustrating, which was that your odds of suing successfully in China because of this are very low, because Lenovo is one of the ‘great sons of China.’ That was the message that I got back.” Lenovo is a former state-owned company, but still has ties with powerful Communist Part of China people.

The advice given above led to Reflex filing a lawsuit at the California Northern Disctrict Court in March 2010. Lenovo, which acquired the personal computer division of IBM in 2005, has many assets in the U.S since it is the fourth biggest computer manufacturer in the world and sells a lot of computers in the U.S.

Joint-venture with technology transfer no panacea for market access to China’s aviation industry

Posted on April 7, 2011 by Dr. Danny Friedmann

China’s 12th Five-Year Plan (2011-2015) states that the general aviation industry’s development will be
promoted, reform the airspace management system as well as increase the efficiency of the allocation and utilization of airspace resources. Bright sky for China’s aviation industry. But what about foreign aviation companies, will they be able to takeoff or will they stay grounded.

Like all governments the Chinese government is giving its national aircraft corporation, the Commercial Aircraft Corporation of China, Ltd. (COMAC), support. The government made it obligatory for foreign aviation companies that want to supply to China to partner with COMAC and establish joint-ventures to get technology transfer via the ARJ21 and C919 projects. No company, including Western companies wants to give its intellectual property away without compensation. Therefore those Western companies that agreed to the terms of technology transfer for the C919 did so with old versions of their technology.

飞机

Cliff, Ohlandt and Yang write in their report ‘Ready for Takeoff’ sponsored by the U.S.-China Economic and Security Review (USCC) that joint ventures per se do not guarantee effective market access, but that the inverse, “those that do not provide access to coveted technologies or—even more problematically—are perceived to compete against domestic producers are not likely to receive preferential treatment and may indeed face severe obstacles.”

Read Roger Cliff, Chad J.R. Ohlandt, David Yang, Ready for Takeoff, China’s Advancing Aerospace
Industry RAND National Security Research Division, sponsored by the U.S.-China Economic and
Security Review Commission, 2011, available here.

Wonderful characters 飞 fei 机 ji mean literally “bird machine” = airplane

Tagged ARJ21, C919, China's 12th Five-Year Plan, Comac, indigenous innovation, joint-venture, patents, RAND, technology transfer, USCC, 专利, 技術創新 | Comments Off

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