Recently, the American Bar Association's China Committee discussed books on China that have been useful to our members and to our respective clients doing business in that country or planning to do so.
With more than 500 attorney members around the world, the China Committee is a joint body of the ABA's International Law, Intellectual Property Law, and Science and Technology practice sections.
The China Committee's recommended reading includes books covering topics ranging from China's place in the global economy to the consumer products market there to histories that elucidate Chinese cultural and business philosophies.
I have gathered these titles together for you here in the new Resources link. You'll find the link on the right side of this page above the blog archive listing. Click here and you'll go to our Amazon store to see all the China titles.
You will also see a collection of the TLG team's favorite resources on entrepreneurship, intellectual property strategy, women in science and technology, and more. Because we support Science Olympiad and other programs to foster children's creativity and natural interest in science and technology, we've even put together a set of excellent chemistry sets, books, and other great products to help Kids Create!
To discuss more about your business activities and plans in China, please contact us at +1.208.939.4472 or info@technologylawgroup.com.
4.18.2008
Chinese Intellectual Property Cases Online
To improve the rule of law in China and the transparency and availability of court decisions there, the Intellectual Property Rights (IPR) Division of the Supreme People's Court offers an online resource for obtaining published decisions in intellectual property cases in China.
The Web site is principally in Chinese language. The search engine operates in English and Chinese. One may search by litigant name, court, filing date, case number, and cause of action.
Just enter search terms in English, and the site returns a list of search results in Chinese, but with some English labeling. The decisions are in Chinese, but no worries! We have Chinese linguistics on our team.
The Web site's navigation bar to the left also has English labels for types of actions: trademarks, copyright and related rights, patents, unfair competition, plant varieties, technology contracts, and others.
Among the Others category are cases involving integrated circuit ("IC") design and cases involving discovery and innovation. (RESOURCE NOTE: For a detailed, albeit 2003, analysis of China's IC design protection law, click here.)
Under Article 134 of China's Civil Procedural Law, "The people's court shall publicly pronounce its judgment in all cases, whether publicly tried or not." (RESOURCE NOTE: For the text of this law, click here.) Further, Article 8 of the 1993 Supreme Court's Rules in Court of the People's Court states that "citizens may audit the court session of cases which are publicly tried according to law."
That said, the courts appear to have some discretion regarding publication, having, for example, no time frame within which they must publish their decisions and no requirements as to the methods of such required publication.
For more information, please reach us at +1.208.939.4472 or info@technologylawgroup.com.
The Web site is principally in Chinese language. The search engine operates in English and Chinese. One may search by litigant name, court, filing date, case number, and cause of action.Just enter search terms in English, and the site returns a list of search results in Chinese, but with some English labeling. The decisions are in Chinese, but no worries! We have Chinese linguistics on our team.
The Web site's navigation bar to the left also has English labels for types of actions: trademarks, copyright and related rights, patents, unfair competition, plant varieties, technology contracts, and others.
Among the Others category are cases involving integrated circuit ("IC") design and cases involving discovery and innovation. (RESOURCE NOTE: For a detailed, albeit 2003, analysis of China's IC design protection law, click here.)
Under Article 134 of China's Civil Procedural Law, "The people's court shall publicly pronounce its judgment in all cases, whether publicly tried or not." (RESOURCE NOTE: For the text of this law, click here.) Further, Article 8 of the 1993 Supreme Court's Rules in Court of the People's Court states that "citizens may audit the court session of cases which are publicly tried according to law."
That said, the courts appear to have some discretion regarding publication, having, for example, no time frame within which they must publish their decisions and no requirements as to the methods of such required publication.
For more information, please reach us at +1.208.939.4472 or info@technologylawgroup.com.
4.09.2008
Is Tibet A Country?
Those of us serving on the ABA's China Committee are now discussing the question of Tibet's legal status, particularly whether Tibet is independent or part of China.
For those of you who have been following the compelling stories of political unrest in Tibet and China's intervention there, this post will be particularly interesting.
The term "suzertainty" refers to a principle first seen in feudal law and later used in more modern (late 1800s) positive law in which one country is a vassal state to other. Parts of the Ottoman Empire, e.g., Egypt, Bulgaria, Romania, and others, were organized this way.
The vassal is described as an independent state that gives up some, but not all, of its autonomy to the suzerain state in exchange for certain obligations flowing back to the vassal state.
(RESOURCE NOTE: For an excellent summary of the history of the term "suzertainty" with references, click here.)
Unraveling the legal status of Tibet takes one through the period of British colonialism in the region and later through one or more treaties between Britain and imperial Russian, later cancelled by the Communist government, and through the 1950 invasion by China of Tibet to the present day. A partial timeline of the historical development of Tibet's legal status follows.
One discussion, attributed to Sir Algemon Rumbold, President of the Tibet Society of the United Kingdom from 1977-1988, says that Britain treated Tibet as an independent state from 1910, but stated in 1912 and again 1943 that it acknowledged the suzertainty of China in Tibet, but on the condition that Tibet's autonomy was respected. The latter is cited Memorandum from Sir Anthony Eden to the Chinese Foreign Minister, T.V. Soong, FO371/93001 (May 8, 1943).
Some say that Tibet initially declared independence in 1912, a position apparently agreed by the British government, which treated Tibet as independent from 1910 or from 1912, depending on the commentator. Others say that that 1912 and two subsequent declarations, at least through 1965 or so, did not amount to declarations. See Alfred P. Rubin, Tibet's Declarations of Independence, 60 AM. J. INT'L L. 812-14 (1966).
The 1914 Simla Convention between Great Britain and Tibet established or purported to establish internationally-recognized boundaries, the McMahon Line, for an independent Tibet. China refused that Convention, and Sir Rumbold writes that it was a that point that Tibet repudiated China's suzertainty.
On September 19, 2006, the Declaration of Independence of the Nations of High Asia: Tibet, East Turkistan and Inner Mongolia was made in Washington, D.C. at the Capitol Building.
Although not a thorough analysis of the question of Tibet's legal status, the foregoing indicates that Tibet is indeed a separate country.
For more information on international law, please contact us at +1.208.939.4472 or info@technologylawgroup.com.
For those of you who have been following the compelling stories of political unrest in Tibet and China's intervention there, this post will be particularly interesting.
The term "suzertainty" refers to a principle first seen in feudal law and later used in more modern (late 1800s) positive law in which one country is a vassal state to other. Parts of the Ottoman Empire, e.g., Egypt, Bulgaria, Romania, and others, were organized this way.
The vassal is described as an independent state that gives up some, but not all, of its autonomy to the suzerain state in exchange for certain obligations flowing back to the vassal state.
(RESOURCE NOTE: For an excellent summary of the history of the term "suzertainty" with references, click here.)
Unraveling the legal status of Tibet takes one through the period of British colonialism in the region and later through one or more treaties between Britain and imperial Russian, later cancelled by the Communist government, and through the 1950 invasion by China of Tibet to the present day. A partial timeline of the historical development of Tibet's legal status follows.
One discussion, attributed to Sir Algemon Rumbold, President of the Tibet Society of the United Kingdom from 1977-1988, says that Britain treated Tibet as an independent state from 1910, but stated in 1912 and again 1943 that it acknowledged the suzertainty of China in Tibet, but on the condition that Tibet's autonomy was respected. The latter is cited Memorandum from Sir Anthony Eden to the Chinese Foreign Minister, T.V. Soong, FO371/93001 (May 8, 1943).
Some say that Tibet initially declared independence in 1912, a position apparently agreed by the British government, which treated Tibet as independent from 1910 or from 1912, depending on the commentator. Others say that that 1912 and two subsequent declarations, at least through 1965 or so, did not amount to declarations. See Alfred P. Rubin, Tibet's Declarations of Independence, 60 AM. J. INT'L L. 812-14 (1966).
The 1914 Simla Convention between Great Britain and Tibet established or purported to establish internationally-recognized boundaries, the McMahon Line, for an independent Tibet. China refused that Convention, and Sir Rumbold writes that it was a that point that Tibet repudiated China's suzertainty.
On September 19, 2006, the Declaration of Independence of the Nations of High Asia: Tibet, East Turkistan and Inner Mongolia was made in Washington, D.C. at the Capitol Building.
Although not a thorough analysis of the question of Tibet's legal status, the foregoing indicates that Tibet is indeed a separate country.
For more information on international law, please contact us at +1.208.939.4472 or info@technologylawgroup.com.
3.31.2008
Intellectual Property Registration Still Nascent in China, but Growing
China's National Bureau of Statistics (NBS) issued a report on March 17, 2008 on the rates of patent and trademark registration there. The report studied a range of companies, including the 300,000 large industrial companies in China that produced some 90% of that country's industrial output in 2006.
Only a minority of these large companies have formalized intellectual property rights, however. Fewer than nine percent (8.7%), or 26,000, applied for patents from 2004 through 2006. Fewer than one-quarter (24.3%), or 73,000, registered their trademarks, although more than one-third (38.4%) registered their own brands. Finally, only about one-fifth (20.7%) had company policies to protect their trade secrets.
This last statistic is interesting. The limited enforceability and enforcement of formalized intellectual property rights in China contribute to the perception of their value as investments for companies. Trade secret policies, however, have relatively little cost associated with their implementation, but high value in terms of preventing proprietary information and know-how from leaking out to competitors.
Only a minority of these large companies have formalized intellectual property rights, however. Fewer than nine percent (8.7%), or 26,000, applied for patents from 2004 through 2006. Fewer than one-quarter (24.3%), or 73,000, registered their trademarks, although more than one-third (38.4%) registered their own brands. Finally, only about one-fifth (20.7%) had company policies to protect their trade secrets.
This last statistic is interesting. The limited enforceability and enforcement of formalized intellectual property rights in China contribute to the perception of their value as investments for companies. Trade secret policies, however, have relatively little cost associated with their implementation, but high value in terms of preventing proprietary information and know-how from leaking out to competitors. Enforceability may be one reason that trade secret policies are so scarce. There is no trade secret law as such in China. Rather, enforcement occurs under contract, employment, and other civil laws, which may or not be recognized by the courts there. A lack of professional training about intellectual property rights and communal cultural perspectives may provide other reasons.
The NBS report also examined patenting practices in a broader range of Chinese companies, including small to medium enterprises, and non-industrial companies. Among this broader range of companies, some twenty-seven percent (27.5%) of domestically-owned companies filed patent applications in 2006. This compares with about twenty-one percent of foreign-invested joint ventures (20.6%) and Hong Kong-, Macau-, and Taiwan-invested companies (20.8%).
Despite the currently low adoption rate for patenting in China, the trend is toward increased patenting. The State Intellectual Property Office earlier reported an impressive seventeen percent (16.9%) increase in the number of registered patents in 2007 over the previous year. In 2007, those registered patents totaled 850,043. For more statistics on patenting in China, please click here.
Intellectual assets are sure to play a increasing role in China's economic might and integration within the World Trade Organization and the global economy. Speaking before the 11th National People's Congress on March 5, 2008, Chinese Premier Wen Jiabao, pictured above, stated that China will adopt the National IP Strategy and will systematically promote individual innovation.
For more information about international protection for intellectual property rights, please contact us at +1.208.939.4472 or info@technologylawgroup.com.
3.23.2008
Issue-Spotting for Web Sites
Web sites are ubiquitous and an essential part of virtually every business or organization’s operational and marketing activities. Although numerical precision is a challenge, a respected resource found 142,805,398 sites on the World Wide Web in October 2007, up more than 36 million from the beginning of that year.[1]
Up-front attention to these issues when Web sites are first being developed and hosted can save time, money, and legal wrangling later. Here, Benjamin Franklin was right! "An ounce of prevention is worth a pound of cure."
Read on for some of the important legal issues to consider regarding Web sites. Also, check out the Resource Notes at the bottom.
Ownership and Control
One may view Internet domain names as a form of intellectual property, that is, an intangible property right belonging exclusively to the owner of that right. One establishes the property right by registration with a domain name registrar, such as NSI (formerly Network Solutions, Inc.), or by purchasing the domain name from an intermediary or auction sites, such as SnapNames.com. As strange as it may seem in dealing with a property right, the ownership and control of Web sites are common problems faced by many businesses.
For example, individuals may purchase an existing business, believing that the domain name by which that business is promoted online was part of the acquired business. They may later discover that title to the domain name, i.e., the registration, did not rest with the seller, but rather with the business’s former Web site developer, who decides to try to usurp the value of the business for his own aims or to leverage his control of the essential domain name to extract exorbitant Web hosting or other fees from the new owners.
Other businesses may hire a marketing or Web development company to acquire one or more domains and to build a Web site for it. Conflicts arise over payment, quality, or other issues, and the business now finds itself having invested thousands of dollars into an e-commerce site tied to a crucial domain name that its vendor owns and controls.
Just as issues arise as to domain name ownership, there can be issues as to the ownership of the source code that makes up the Web site. Many smaller businesses may contract out for the development of their Web sites and may rely upon oral contracts or contracts comprised of oral and electronic mail exchanges. These informal agreements leave much to be desired and are rife with ambiguity.
Businesses may assume that they own the Web site’s source code when indeed that title remains with the Web developer. This ownership issue can create problems where the ongoing maintenance of the Web site remains tied to the Web developer, perhaps at an inappropriate price for the business. Even where formal Web development contracts are executed between the parties, these may be drafted to the Web developer’s advantage, and ownership rights may not transfer under those agreements.
Many Web site developers now use Open Source tools for their development activities. There are many dozens of Open Source license agreements that govern what can be done with the Web sites and other products that result from the use of various Open Source components. These agreements may permit some ownership rights to be transferred to the business purchasing the Web site development services.
More frequently, however, these agreements prohibit or severely restrict the transfer of ownership rights. (Indeed, version 3.0 of the GNU General Public License is far more restrictive in this regard than version 2.0.) This means that a business may pay a Web developer to create a certain look-and-feel or special navigational aids for the Web site, but may not have absolute or any ownership rights therein. In such an instance, the business may have no ability to legally prohibit the Web developer’s use of that customization for subsequent clients.
Intellectual Property Liability
Business owners may select corporate names and purchase domain names for their businesses without considering whether the effect that selection may have on their risk profiles. For example, the selection of a corporate or domain name may infringe upon existing trademark rights. If it does not infringe an existing mark outright, the company may still face liability from allegations that the domain name dilutes the value of famous trademarks.
Copyright infringement is another concern principally regarding the content of the Web site. Here, there are issues as to whether the textual content of the site was copied from another source. Images and other graphical or visual content on the Web pages may be purchased through Web sites like BigStockImages.com. Because the license agreements that govern those purchases are generally very one-sided to favor the purveyor of that content, one must exercise care to understand and retain a record of the agreement and to ensure that the content is being used in accordance with the terms of the agreement. For example, the inbound license agreement may permit the use of the purchased images online, but not in printed collateral marketing materials.
Terms of Use
Many businesses fail to set forth on their Web sites the terms of use that govern the Web visitors use of the sites. Others may incorporate some terms of use in the text of some Web pages, but may not set forth a single contract encompassing all use of the site. Still others may have terms of use that deal with more traditional aspects of a brick-and-mortar business, such as return policies, but may not consider the intellectual property aspects of the business’ online presence. As an example, the Web site may set forth an invitation to call a contact person for licensing the business’ trademarks. Such vague language engenders the position that a mere phone call to the named individual suffices for the caller to obtain a royalty-free, inbound license to the logos contained in, and often easily copied from, the Web site.
Linking policies are another contractual control that businesses often fail to include. These policies set for the terms under which other Web sites can link to the business’ Web site. Absent these policies, linking may occur freely, and the business may find itself associated with Web sites offering questionable health remedies and other products or services not to the business’ liking.
Privacy Matters
Web sites may collect information about visitors, whether through an online registration or order form or secretly through the capture of the visitor’s Internet protocol, or IP, address. Businesses often fail to put consumers on notice that these data are being gathered and as to the uses to which the data will be put. This opens the door for disclosures of consumer information that can lead to unsolicited email complaints and identity theft. Further, where the Web site may attract youthful populations, federal law requires parental consent and other important measures to protect children and their privacy.[2]
Advertising Claims
Just as in the real world, consumer protection laws govern claims made in advertising, testimonials, statements comparing competitive products, and more. Because the Internet puts these claims in the global arena, international, federal, foreign domestic, and a variety of state laws may apply. Businesses must carefully weigh the costs and the benefits in the form of risk avoidance presented by the potentially applicable patchwork of laws. Fortunately, federal and state consumer protection laws in the United States are harmonized to a significant degree. The harmonization is not complete, however.
Conclusion
Web sites present an abundance of legal issues for consideration. Some, such as the issues presented by linking policies, are wholly unique to the Internet. Other issues are more traditional in nature, but emerge in new and thought-provoking ways in application to Web sites. We hope this article serves as a useful issue-spotting guide to entrepreneurs and businesses.
[1] Netcraft, October 2007 Web Server Survey, http://news.netcraft.com/archives/2007/10/index.html (visited Mar. 23, 2008); Netcraft, New York Internet and ThePlanet Most Reliable Hosting Companies in December 2006,(visited Nov. 7, 2007).
[2] See generally Federal Trade Commission, Implementing the Children’s Online Privacy Protection Act: A Report to Congress (Feb. 2007).
RESOURCE NOTES:
BigStockImages.com offers some terrific resources, including links to free images and tutorials. Check it out here.
Netcraft, cited in the first paragraph, is a great resource for Web-based statistics to include in business plans and pro forma analyses. This English company offers useful statistics worldwide. For an overview and to a newsletter sign-up, click here.
We hope the information here will be helpful to you. Please note, however, that, as always, information posted on this blog does not constitute legal advice, and your visits to this blog or contacts to us regarding the information posted here do not establish an attorney-client relationship. For more information, please contact us at 208.939.4472 or info@technologylawgroup.com.
Up-front attention to these issues when Web sites are first being developed and hosted can save time, money, and legal wrangling later. Here, Benjamin Franklin was right! "An ounce of prevention is worth a pound of cure."
Read on for some of the important legal issues to consider regarding Web sites. Also, check out the Resource Notes at the bottom.
Ownership and Control
One may view Internet domain names as a form of intellectual property, that is, an intangible property right belonging exclusively to the owner of that right. One establishes the property right by registration with a domain name registrar, such as NSI (formerly Network Solutions, Inc.), or by purchasing the domain name from an intermediary or auction sites, such as SnapNames.com. As strange as it may seem in dealing with a property right, the ownership and control of Web sites are common problems faced by many businesses.
For example, individuals may purchase an existing business, believing that the domain name by which that business is promoted online was part of the acquired business. They may later discover that title to the domain name, i.e., the registration, did not rest with the seller, but rather with the business’s former Web site developer, who decides to try to usurp the value of the business for his own aims or to leverage his control of the essential domain name to extract exorbitant Web hosting or other fees from the new owners.
Other businesses may hire a marketing or Web development company to acquire one or more domains and to build a Web site for it. Conflicts arise over payment, quality, or other issues, and the business now finds itself having invested thousands of dollars into an e-commerce site tied to a crucial domain name that its vendor owns and controls.
Just as issues arise as to domain name ownership, there can be issues as to the ownership of the source code that makes up the Web site. Many smaller businesses may contract out for the development of their Web sites and may rely upon oral contracts or contracts comprised of oral and electronic mail exchanges. These informal agreements leave much to be desired and are rife with ambiguity.
Businesses may assume that they own the Web site’s source code when indeed that title remains with the Web developer. This ownership issue can create problems where the ongoing maintenance of the Web site remains tied to the Web developer, perhaps at an inappropriate price for the business. Even where formal Web development contracts are executed between the parties, these may be drafted to the Web developer’s advantage, and ownership rights may not transfer under those agreements.
Many Web site developers now use Open Source tools for their development activities. There are many dozens of Open Source license agreements that govern what can be done with the Web sites and other products that result from the use of various Open Source components. These agreements may permit some ownership rights to be transferred to the business purchasing the Web site development services.
More frequently, however, these agreements prohibit or severely restrict the transfer of ownership rights. (Indeed, version 3.0 of the GNU General Public License is far more restrictive in this regard than version 2.0.) This means that a business may pay a Web developer to create a certain look-and-feel or special navigational aids for the Web site, but may not have absolute or any ownership rights therein. In such an instance, the business may have no ability to legally prohibit the Web developer’s use of that customization for subsequent clients.
Intellectual Property Liability
Business owners may select corporate names and purchase domain names for their businesses without considering whether the effect that selection may have on their risk profiles. For example, the selection of a corporate or domain name may infringe upon existing trademark rights. If it does not infringe an existing mark outright, the company may still face liability from allegations that the domain name dilutes the value of famous trademarks.
Copyright infringement is another concern principally regarding the content of the Web site. Here, there are issues as to whether the textual content of the site was copied from another source. Images and other graphical or visual content on the Web pages may be purchased through Web sites like BigStockImages.com. Because the license agreements that govern those purchases are generally very one-sided to favor the purveyor of that content, one must exercise care to understand and retain a record of the agreement and to ensure that the content is being used in accordance with the terms of the agreement. For example, the inbound license agreement may permit the use of the purchased images online, but not in printed collateral marketing materials.
Terms of Use
Many businesses fail to set forth on their Web sites the terms of use that govern the Web visitors use of the sites. Others may incorporate some terms of use in the text of some Web pages, but may not set forth a single contract encompassing all use of the site. Still others may have terms of use that deal with more traditional aspects of a brick-and-mortar business, such as return policies, but may not consider the intellectual property aspects of the business’ online presence. As an example, the Web site may set forth an invitation to call a contact person for licensing the business’ trademarks. Such vague language engenders the position that a mere phone call to the named individual suffices for the caller to obtain a royalty-free, inbound license to the logos contained in, and often easily copied from, the Web site.
Linking policies are another contractual control that businesses often fail to include. These policies set for the terms under which other Web sites can link to the business’ Web site. Absent these policies, linking may occur freely, and the business may find itself associated with Web sites offering questionable health remedies and other products or services not to the business’ liking.
Privacy Matters
Web sites may collect information about visitors, whether through an online registration or order form or secretly through the capture of the visitor’s Internet protocol, or IP, address. Businesses often fail to put consumers on notice that these data are being gathered and as to the uses to which the data will be put. This opens the door for disclosures of consumer information that can lead to unsolicited email complaints and identity theft. Further, where the Web site may attract youthful populations, federal law requires parental consent and other important measures to protect children and their privacy.[2]
Advertising Claims
Just as in the real world, consumer protection laws govern claims made in advertising, testimonials, statements comparing competitive products, and more. Because the Internet puts these claims in the global arena, international, federal, foreign domestic, and a variety of state laws may apply. Businesses must carefully weigh the costs and the benefits in the form of risk avoidance presented by the potentially applicable patchwork of laws. Fortunately, federal and state consumer protection laws in the United States are harmonized to a significant degree. The harmonization is not complete, however.
Conclusion
Web sites present an abundance of legal issues for consideration. Some, such as the issues presented by linking policies, are wholly unique to the Internet. Other issues are more traditional in nature, but emerge in new and thought-provoking ways in application to Web sites. We hope this article serves as a useful issue-spotting guide to entrepreneurs and businesses.
[1] Netcraft, October 2007 Web Server Survey, http://news.netcraft.com/archives/2007/10/index.html (visited Mar. 23, 2008); Netcraft, New York Internet and ThePlanet Most Reliable Hosting Companies in December 2006,
[2] See generally Federal Trade Commission, Implementing the Children’s Online Privacy Protection Act: A Report to Congress (Feb. 2007).
RESOURCE NOTES:
BigStockImages.com offers some terrific resources, including links to free images and tutorials. Check it out here.
Netcraft, cited in the first paragraph, is a great resource for Web-based statistics to include in business plans and pro forma analyses. This English company offers useful statistics worldwide. For an overview and to a newsletter sign-up, click here.
We hope the information here will be helpful to you. Please note, however, that, as always, information posted on this blog does not constitute legal advice, and your visits to this blog or contacts to us regarding the information posted here do not establish an attorney-client relationship. For more information, please contact us at 208.939.4472 or info@technologylawgroup.com.
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