Today's posting is more of a referral that a commentary.
I know most of you (readers) are my friends and family who get referred here from one of my other sites, and maybe you won't really care about this, but for a couple months now I have been reading faithfully a wonderful blog called the China Web 2.0 Review. I don't know who writes it, but they do an excellent job of highlighting new developments in China's technology space. For those of you (like me) looking for promising young Chinese technology companies (whether for investment, partnership, or whatever), I think CWR can be a good resource for you.
While I'm suggesting interesting places on the internet, Lawrence Lessig's blog today contained a reference to an interesting MySpace profile dedicated to Net Neutrality. I especially like all the interviews...
Thursday, August 31, 2006
Tuesday, August 29, 2006
Sharkmart
This must be a fluke. I am sitting in a restaurant in Shanghai NOT using my VPN and I thought I'd check just for fun to see if I could access my blog and... lo and behold, I can. This must just be a fluke. If China has relaxed censoring of blogspot.com it will be a pretty major development...
Wednesday, August 23, 2006
IP Protection in Asia: Past, Present, and Future
I recently returned from the Harvard Project on Asian International Relations Annual Conference in Singapore and thought I would pass on the dialogue from one of the plenary sessions on "Intellectual Property in Asia: Past, Present, and Future."
I learned quite a bit from this panel. Most significantly, all of the panelists seemed to agree that IP protection in Asia is much more stable than suggested by the media. As someone who does business with IP in China and elsewhere in the region, this is positive news. However, as someone who also holds the view that IP protection is gradually being overextended globally, this same news is a bit disappointing. Nevertheless, I was heartened by the fact that the discussion ended with new forms of alternative IP protection such as Creative Commons.
Note: The following transcript is a rough version and should not be treated as a verbatim dialogue.
Panelists:
Howard Hunter (HH), President, Singapore Management University - Moderator
Geoffrey Yu (GY), Deputy Director General, Economic Development Sector, WIPO
Anilkumar Samtani (AS), A.Professor of Law, Centre for Asia Pacific Technology Law and Policy (CAPTEL), Nanyang Technological University
Peter Wang (PW), Partner, Jones Day
HH: Let's try and focus today on the broad issues so as to abstract away from the specific details. First I would like each of you to introduce yourselves.
GY: I would like to introduce WIPO, I have been working there for over 25 years, mostly focused on Asia-Pacific, and on Economic Development and IP. I currently have a team of around 200 professionals and we work closely with all relevant governments. I have responsibility to give technical assistance to over 150 countries.
The three tasks of the WIPO:
1. Administration of 25 international treaties setting legal norms and technical standards. This includes the provision of an international forum for the participation of the international community and civil society.
2. My focus is on the provision of technical and legal advice to countries, not only to governments.
3. We administer an international registration system that simplifies the IP registration process.
I would like to take this opportunity to highlight a few of the positive things that Asia Pacific countries have been doing with regards to IP protection. They are trying to improve their IP systems in several different ways. First they are improving/modernizing their IP legal systems. Secondly, they are strengthening their institutions both of enforcement of IP, but also to develop economic opportunities wherein IP can be developed into profitable business opportunities. They are aiming for long-term investment in S&T. The countries aim for long-term investment to obtain capital formation. They are building a technical base. Although the focus in the press is usually on piracy, these steps are most commonly overlooked.
WIPO has no punishment/enforcement jurisdiction, so our primary tool of policy is to try and convince them to change their policies and to initiate a dialogue within countries.
HH: A couple guiding themes for the day:
1. How does IP regulation increase in complexity across international borders?
2. What particular concerns emerge in Asia with regard to a given issue in IP?
AS: IP Juris (an online resource) is a network we have created whereby scholars can participate with their colleagues internationally. The website also provides information on specific countries' IP policies not available elsewhere.
PW: My perspective in all of this is a bit different. What I have done in my career is to work for our clients to sometimes enforce IP rights and to sometimes defend against others who are trying to enforce their IP rights. One of the things that we have most noticed in the last 5 years is the increasing internationalization of IP issues. So we have really noticed an importance in synchronization of international IP legislation.
HH: Thank you for your introductions. Maybe for a next topic we can turn to Finance.
- Free trade and encouragement of investment
- Rule of law consistently and predictably applied
- Open competition and minimization of monopolies
- Rise of IP as corporate asset
Peter, how do you advise clients most carefully to protect their own investments in the properties that they have when they consider international expansion and/or FDI?
PW: This has been an increasingly important topic for us recently as many of our clients have moved manufacturing and recently R&D capacities to Asia. Contrary to the media view, we tell our clients that there IS effective protection for IP in China with certain safeguards. One important safeguard is to obtain Chinese IP rights. Other safeguards include limiting access to R&D until an IP-enforceable right is present and selecting your jurisdictions for litigation in China carefully (Beijing, Shanghai).
GY: Besides working with enterprises which are trading/investing across border, government in strongly growing economies also want to emphasize that local enterprises also understand and know how to utilize IP rights. One of the consequences is a high double digit increase (a 25-40% increase in local applications within China for IP protection). ASEAN countries are falling behind in this regard.
AS: On this issue I offer a somewhat more critical perspective. Many developing countries underserved by the current system. As many of you know by now, TRIPS is very controversial. Many developing countries feel they should have some freedom to create differing IP-control systems. Why is America seeking to export its legislative provisions through its trade provisions? IP is being overextended and this regime does not take into account the concerns of various countries.
HH: This is an interesting issue. NTU does a lot of scientific research. So they need to protect their IPs, but the researchers also need access to others' IPs. How are these tensions played out?
AS: Professor Hunter has highlighted a key issue here. Patents that have been granted can limit the ability to engage in future innovation efforts. "Discoveries" should not be patentable, whereas "inventions" should be. If we allow the continuation of the trend of patenting gene sequences, we may have a commoditization of the human body.
HH: Professor Yu, what do you think of this argument that trade agreements has pushed first-world IP protection standards onto unwilling third world countries? And what about the perverse incentive that IP regulations makes firms create drugs instead of vaccines?
GY: There is still "considerable leeway in TRIPS." Maybe the key is that governments do not know how to craft their laws such as to take advantage of the leeway in TRIPS and the other international treaties. Governments have NOT been playing an adequate role in terms of the R&D necessary to contribute to ongoing development. Public Private Partnershipss (PPPs) are becoming increasingly prominent in these fields (Malaria, non-profitable industries/diseases).
HH:
New Topic: Fair Use and Public Domain
- Public Domain: The "I have a dream" speech
- Public Domain and archiving: eg. TV news and programs
- Comment and defamation or privacy laws
- Use: what is "reasonable?"
PW: One thing this example points out very clearly is that we need to be careful to know that IP protections can be too broad. Theoretically the reason behind IP protection is to provide a societal benefit. This is increasingly not the case. Many people think that copyright and patent applicability have become too broad. In some places like China there have been legal and extra-legal ways to get around this. Legally, the Chinese legal code is fairly explicit in its fair-use provisions. On the practical side, the Chinese have used limited enforcement in order to counteract this overprotection of IP.
AS: In relation to the fair use defense, there is probably a need to revisit the types of cases that are coming up these days. One of the primary counter projects these days is the Creative Commons initiative.
I learned quite a bit from this panel. Most significantly, all of the panelists seemed to agree that IP protection in Asia is much more stable than suggested by the media. As someone who does business with IP in China and elsewhere in the region, this is positive news. However, as someone who also holds the view that IP protection is gradually being overextended globally, this same news is a bit disappointing. Nevertheless, I was heartened by the fact that the discussion ended with new forms of alternative IP protection such as Creative Commons.
Note: The following transcript is a rough version and should not be treated as a verbatim dialogue.
Panelists:
Howard Hunter (HH), President, Singapore Management University - Moderator
Geoffrey Yu (GY), Deputy Director General, Economic Development Sector, WIPO
Anilkumar Samtani (AS), A.Professor of Law, Centre for Asia Pacific Technology Law and Policy (CAPTEL), Nanyang Technological University
Peter Wang (PW), Partner, Jones Day
HH: Let's try and focus today on the broad issues so as to abstract away from the specific details. First I would like each of you to introduce yourselves.
GY: I would like to introduce WIPO, I have been working there for over 25 years, mostly focused on Asia-Pacific, and on Economic Development and IP. I currently have a team of around 200 professionals and we work closely with all relevant governments. I have responsibility to give technical assistance to over 150 countries.
The three tasks of the WIPO:
1. Administration of 25 international treaties setting legal norms and technical standards. This includes the provision of an international forum for the participation of the international community and civil society.
2. My focus is on the provision of technical and legal advice to countries, not only to governments.
3. We administer an international registration system that simplifies the IP registration process.
I would like to take this opportunity to highlight a few of the positive things that Asia Pacific countries have been doing with regards to IP protection. They are trying to improve their IP systems in several different ways. First they are improving/modernizing their IP legal systems. Secondly, they are strengthening their institutions both of enforcement of IP, but also to develop economic opportunities wherein IP can be developed into profitable business opportunities. They are aiming for long-term investment in S&T. The countries aim for long-term investment to obtain capital formation. They are building a technical base. Although the focus in the press is usually on piracy, these steps are most commonly overlooked.
WIPO has no punishment/enforcement jurisdiction, so our primary tool of policy is to try and convince them to change their policies and to initiate a dialogue within countries.
HH: A couple guiding themes for the day:
1. How does IP regulation increase in complexity across international borders?
2. What particular concerns emerge in Asia with regard to a given issue in IP?
AS: IP Juris (an online resource) is a network we have created whereby scholars can participate with their colleagues internationally. The website also provides information on specific countries' IP policies not available elsewhere.
PW: My perspective in all of this is a bit different. What I have done in my career is to work for our clients to sometimes enforce IP rights and to sometimes defend against others who are trying to enforce their IP rights. One of the things that we have most noticed in the last 5 years is the increasing internationalization of IP issues. So we have really noticed an importance in synchronization of international IP legislation.
HH: Thank you for your introductions. Maybe for a next topic we can turn to Finance.
- Free trade and encouragement of investment
- Rule of law consistently and predictably applied
- Open competition and minimization of monopolies
- Rise of IP as corporate asset
Peter, how do you advise clients most carefully to protect their own investments in the properties that they have when they consider international expansion and/or FDI?
PW: This has been an increasingly important topic for us recently as many of our clients have moved manufacturing and recently R&D capacities to Asia. Contrary to the media view, we tell our clients that there IS effective protection for IP in China with certain safeguards. One important safeguard is to obtain Chinese IP rights. Other safeguards include limiting access to R&D until an IP-enforceable right is present and selecting your jurisdictions for litigation in China carefully (Beijing, Shanghai).
GY: Besides working with enterprises which are trading/investing across border, government in strongly growing economies also want to emphasize that local enterprises also understand and know how to utilize IP rights. One of the consequences is a high double digit increase (a 25-40% increase in local applications within China for IP protection). ASEAN countries are falling behind in this regard.
AS: On this issue I offer a somewhat more critical perspective. Many developing countries underserved by the current system. As many of you know by now, TRIPS is very controversial. Many developing countries feel they should have some freedom to create differing IP-control systems. Why is America seeking to export its legislative provisions through its trade provisions? IP is being overextended and this regime does not take into account the concerns of various countries.
HH: This is an interesting issue. NTU does a lot of scientific research. So they need to protect their IPs, but the researchers also need access to others' IPs. How are these tensions played out?
AS: Professor Hunter has highlighted a key issue here. Patents that have been granted can limit the ability to engage in future innovation efforts. "Discoveries" should not be patentable, whereas "inventions" should be. If we allow the continuation of the trend of patenting gene sequences, we may have a commoditization of the human body.
HH: Professor Yu, what do you think of this argument that trade agreements has pushed first-world IP protection standards onto unwilling third world countries? And what about the perverse incentive that IP regulations makes firms create drugs instead of vaccines?
GY: There is still "considerable leeway in TRIPS." Maybe the key is that governments do not know how to craft their laws such as to take advantage of the leeway in TRIPS and the other international treaties. Governments have NOT been playing an adequate role in terms of the R&D necessary to contribute to ongoing development. Public Private Partnershipss (PPPs) are becoming increasingly prominent in these fields (Malaria, non-profitable industries/diseases).
HH:
New Topic: Fair Use and Public Domain
- Public Domain: The "I have a dream" speech
- Public Domain and archiving: eg. TV news and programs
- Comment and defamation or privacy laws
- Use: what is "reasonable?"
PW: One thing this example points out very clearly is that we need to be careful to know that IP protections can be too broad. Theoretically the reason behind IP protection is to provide a societal benefit. This is increasingly not the case. Many people think that copyright and patent applicability have become too broad. In some places like China there have been legal and extra-legal ways to get around this. Legally, the Chinese legal code is fairly explicit in its fair-use provisions. On the practical side, the Chinese have used limited enforcement in order to counteract this overprotection of IP.
AS: In relation to the fair use defense, there is probably a need to revisit the types of cases that are coming up these days. One of the primary counter projects these days is the Creative Commons initiative.
Tuesday, August 15, 2006
Licensing is here in Chinese online video
I saw news this morning (Bill Bishop and the China Web 2.0 Review both citing the Legal Daily via Sina) about upcoming introduction of licensing requirements under China's State Administration of Radio, Film and Television (SARFT) for online streaming video services.
Both bloggers question the degree to which China's several entrepreneurial web video startups (Toodou, UUME, Yoqoo, Wangyou, etc.) will be able to get the licenses which the major players like Sina, Sohu, and Netease should be able to attain.
For my part, while I am not that surprised that the government is stepping into this new area with enhanced regulation, I wonder to what degree foreign firms will also be subject to such regulation. For example, while I have good access to YouTube, all the talk recently about Google Video made me want to try it out, but I unfortunately couldn't because "the playback feature of Google Video isn't available" in China. The same questions as always about the enforceability of the new policies remain, but the new licensing policy definitely puts a stress on a fast-growing industry segment even before it has had the time to develop a stable business model.
Both bloggers question the degree to which China's several entrepreneurial web video startups (Toodou, UUME, Yoqoo, Wangyou, etc.) will be able to get the licenses which the major players like Sina, Sohu, and Netease should be able to attain.
For my part, while I am not that surprised that the government is stepping into this new area with enhanced regulation, I wonder to what degree foreign firms will also be subject to such regulation. For example, while I have good access to YouTube, all the talk recently about Google Video made me want to try it out, but I unfortunately couldn't because "the playback feature of Google Video isn't available" in China. The same questions as always about the enforceability of the new policies remain, but the new licensing policy definitely puts a stress on a fast-growing industry segment even before it has had the time to develop a stable business model.
Monday, August 14, 2006
Newsbytes from the Shanghai Daily
Two pieces of news caught my eye today in reviewing the Shanghai Daily.
1. China Mobile
2. China's 3G licensing got postponed (again)
Seems to me this licensing issue should be having a larger impact on the China Mobile stock price, but that appears not to be the case. I wonder what some of the competing valuations of the company (viz. rivals like Vodafone) are showing....
1. China Mobile
CHINA Mobile Ltd has overtaken Vodafone Group Plc as the world's biggest mobile phone company by market value, the Sunday Telegraph reported.
China Mobile's market capitalization reached HK$1.02 trillion (US$132 billion) after the stock closed at HK$51.50 in Hong Kong on Friday. Vodafone's market value fell 6 percent in the past week to 57.9 billion pounds (US$110 billion) in London, or 110 pence a share.
2. China's 3G licensing got postponed (again)
CHINA may again delayed the long-awaited licenses for third-generation telecommunications services.
The timetable has been extended from this year to the middle of next year to clear up possible restructuring in the telecom market and complete patent negotiations, a Beijing-based consulting firm said yesterday.
The development of homegrown third-generation technology, which earlier influenced the schedule, is now on track, however, industry officials said.
"Considering the factors, our most optimistic expectation for the issuance of 3G licenses is the middle of 2007," Norson Telecom Consulting said in a report. "At that time, only one TD-SCDMA license will be issued first to show the government's support for its homegrown technology."
China Mobile will adopt the time division-synchronous code division multiple access network, according to Norson.
Previously, most industry officials and investment banks, including UBS AG, expected China to launch licenses by the end of this year or at the beginning of 2007. And earlier forecasts put the issue date at the middle of this year.
China plans to issue only three licenses for the higher-data flow services, so the telecom industry is widely expected to restructure prior to the start of the licensing process.
China Telecom, the country's biggest fixed-line phone carrier, plans to buy China Unicom's CDMA network, as part of the restructuring, Ming Pao Daily reported recently.
Telecom industry restructuring, including China Netcom's move to acquire China Unicom's GSM (global system for mobile communications) operations, won't be wrapped up in the near term, industry insiders said.
On the patent issue, the biggest bottleneck is that US-based chip designer Qualcomm has not agreed to lower patent fees for Chinese manufacturers.
"It is not a problem that can be solved within a year," said an official at ZTE Corp who declined to be identified.
Seems to me this licensing issue should be having a larger impact on the China Mobile stock price, but that appears not to be the case. I wonder what some of the competing valuations of the company (viz. rivals like Vodafone) are showing....
Friday, August 04, 2006
China's 3G hesitation signals 4G anticipation
Marbridge Consulting in Beijing today published a translation/analysis of this article from China's 21st Century Business Herald.
The reason I decided to write a short posting about this is that the lack of 3G licenses is really constraining the current service provider industry as they seek to unleash their creativity. Couple this with new China Mobile regulations making it harder for end consumers to sign up for (and stay subscribed to) value-added services (Read about the new regulations and the reactions of China's main service providers here at Seeking Alpha), and you find a substantially squeezed industry.
Why I care about this squeeze is that China's value-added service provider industry is exactly one of the few places I am currently looking for work. All of these new pressures on the industry segment mean that I am now having to shift focus to a less stringently-regulated link in the telecommunications supply chain, mobile phone design houses. I hate it when obscure policies have direct effects on my own life/career. C'est la vie I guess...
MII Planning Quick Transition to 4G Following 3G Launch
A source close to Ministry of Information Industry (MII) policy-makers has said that, "Once 3G licenses have been issued, China plans to move quickly to 3.5G or 4G networks."
According to this source, the government plans to issue mobile licenses to China Telecom and China Netcom once large-scale TD-SCDMA trials are complete in October. These will not be 3G licenses, but will let the fixed line carriers run TD-SCDMA trials for a few months. The actual 3G licenses would then be issued towards the end of this year or in early 2007.
China Mobile and China Unicom will only be able to run 3G services after the two fixed line operators have had a chance to warm up. "If the TD-SCDMA tests are successful, it's expected that by June of next year China Mobile will start to use HSDPA, with China Telecom following suit, so the 3G stage will not last long."
A trial 4G network is underway in Shanghai, using OFDM and MIMO technology. OFDM is the post-3G standard advocated by Qualcomm. Unwillingness to see manufacturers limited by the use of Qualcomm patents, China is pushing forward work on 4G research and standards of its own.
LENS: In some respects it seems that the MII is attempting to prepare the industry for the eventual demise of TD-SCDMA. With 3G licensing and industry restructuring already held back over two years now and the readiness of TD-SCDMA still in question it may be that the focus is now changing to how to walk away from the project without losing too much face.
The 2008 Olympics have always been an unofficial deadline for 3G and the government will likely want a TD-SCDMA network rolled out by that time. The question is how extensive a network that needs to be. There are already TD-SCDMA test networks covering large parts of Beijing and Shanghai as well several other cities where operators have been testing the technology. Provided it can get the test networks functioning at a satisfactory level, the government may be able to save face without incurring too much additional cost through moderate expansion of the test networks into commercial networks.
The quote in the article attributed to an MII source that "by June of next year China Mobile will start to use HSDPA" appears to be a tacit admission that China Mobile will continue down the GSM/UMTS path rather than using TD-SCDMA. If that is the case, and only the new mobile operators - presumably China Telecom and China Netcom - adopt the TD-SCDMA standard, it's hard to see how they could be competitive. Not only would they face higher handset and equipment costs, but they would also later have difficulty luring away any of China Mobile's 3G users (those wishing to migrate to China Telecom's or Netcom's networks would need to purchase a new phone).
While the same source mentions that China "is also working on 4G research and standards" it seems that even its own operators are not entirely sanguine about the prospects for and desirability of such an outcome. Earlier this month China Mobile formed an industry alliance with six other international operators - KPN Mobile, Orange, Sprint Nextel Corp., T-Mobile International, Vodafone and NTT Docomo - called Next Generation Mobile Networks Ltd to jointly develop 4G mobile phone network standards in cooperation with existing standards groups. It would appear that despite the enthusiasm of the MII for developing a home-grown standard, China Mobile may see more advantage in conforming to an international standard.
The reason I decided to write a short posting about this is that the lack of 3G licenses is really constraining the current service provider industry as they seek to unleash their creativity. Couple this with new China Mobile regulations making it harder for end consumers to sign up for (and stay subscribed to) value-added services (Read about the new regulations and the reactions of China's main service providers here at Seeking Alpha), and you find a substantially squeezed industry.
Why I care about this squeeze is that China's value-added service provider industry is exactly one of the few places I am currently looking for work. All of these new pressures on the industry segment mean that I am now having to shift focus to a less stringently-regulated link in the telecommunications supply chain, mobile phone design houses. I hate it when obscure policies have direct effects on my own life/career. C'est la vie I guess...
Subscribe to:
Posts (Atom)
