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Links » Cream » China’s Lobbying Game Tested by US, Canada


China’s Lobbying Game Tested by US, Canada

Posted: 28 Aug 2012 11:49 PM PDT

The world's second largest economy is shunning confrontational tactics in business dealings with the U.S. and in favor of a newly adopted lobbying strategy, which is being tested by its North American partners. From Paul Eckert, Rachelle Younglai and David Ljunggren at Reuters:

Instead of issuing tirades, the Chinese hire top-notch firms whose ranks are filled with well-connected former U.S. and Canadian officials; buy TV advertisements to buff their image; and seek acquisitions less likely to stir nationalistic fervor.

[…] The turning point for Chinese lobbying efforts in North America was the tumultuous CNOOC attempt to buy , whose blue-and-orange gas station signs were something of an icon to many, including some U.S. lawmakers.

[…] Just over a week after the vote, the Chinese Embassy retained top lobbying firm Patton Boggs. The monthly retainer, which was initially $22,000, has since climbed to $35,000, according to the latest forms disclosed under the Foreign Agents Registration Act.

A handful of lawmakers, who were shocked at the visceral reaction to the Unocal deal, formed a group to help China understand Congress and vice versa. The Chinese Embassy started inviting members of Congress to meet their policymakers and its ambassador – then the suave and good-humored Zhou Wenzhong – paid visits to Capitol Hill where he would take verbal beatings over volatile issues such as China's support for Sudan.

Read more about Unocal deal and China's lobbying strategy via China Digital Times.


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Photo: “Children, grandchildren,” near Daocheng, Sichuan, by Kevin Schoenmakers

Posted: 28 Aug 2012 11:58 PM PDT

"Children, grandchildren," near Daocheng, Sichuan


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The Most Famous Blogger You’ve Never Heard Of

Posted: 28 Aug 2012 05:03 PM PDT

In the Atlantic, Jeffrey Wasserstrom looks at the work of Han Han and asks why he isn't a household name in the West, despite being perhaps the world's most popular blogger:

is a big deal in China — and among many China scholars and journalists in the West — and there's no mystery as to why. He has a large and loyal following among young Chinese, something the three dissidents I listed, as admirable as they are, haven't attained. And he has consistently been at or near the center of some of the liveliest debates taking place on the Chinese Internet, the closest thing to a public sphere that exists on the mainland.

[...]

How is it that someone so significant and interesting remains largely unknown outside of China? It can't be because no one has written about him. Back in 2009, Simon Elegant profiled him for Time. In 2010, Foreign Policy included him in its list of 100 top global thinkers and Perry Link celebrated his "Aesopian wit" in an International Herald Tribune op-ed. Last year, the New Yorker ran an excellent piece on him by Evan Osnos cleverly titled "The Han Dynasty," and Fast Company called him one of the 100 most creative people in business. This year he's been the subject of an unusually engaging "Lunch with the FT" feature by David Pilling, the Asia editor of the Financial Times, and was discussed in Jacob Weisberg's Slate essay on Internet censorship in China. And so on.

One reason his global fame might trail that of other Chinese figures could be that nothing he has done has garnered international headlines of the sort that came with Ai Weiwei's arrest, Liu Xiaobo's Nobel prize, and Chen Guangcheng's escape. It's one thing for an individual to be profiled in magazines, and quite another for him or her to do something that lands them on the front page or the CNN news ticker, displayed on muted televisions at airports and in gyms. And there is something about the narrative of the brave, rebellious dissident that appeals to Western audiences in a way that an inside-the-system blogger might not.

And Han Han's writings have not been readily available in English. There've been plenty of translations of his blog posts, but typically only in outlets read by the China-obsessed.

Read much more by and about Han Han via CDT.


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Huawei, ZTE Continue Playing D.C. Lobbying Game, But Where Are the Results?

Posted: 28 Aug 2012 03:11 PM PDT

According the the US Senate, Chinese telecom equipment and terminal manufacturer Huawei spent USD 820,000 on lobbying in the US in H1 2012, compared to USD 200,000 in 2011. Chinese telecom equipment and terminal manufacturer ZTE (0763.HK; 000063.SZ) has spent USD 80,000 on lobbying in the US in H1 2012, down from USD 100,000 in H1 2011.

Since October of last year, Huawei has hired six firms to represent the company in Washington D.C., including a former senator, two experienced Republican campaign aides, and a former Democratic chief of staff. (Marbridge)

On the one hand, this is exactly what these companies should be doing. They are trying to change minds up on Capitol Hill, and you can't do that with wishful thinking. As with everything else in D.C., it requires money, lots of it. I also wonder how much cash these companies are throwing around on Congressional campaigns. I would bet that donations are being made, and done so indirectly. U.S. politicos want the money, but they probably don't want anyone to know that it's coming from Huawei or ZTE. Lucky for them U.S. campaign laws allow for anonymous donations to certain types of political action committees these days. Good old American corruption at its finest.

It looks as though Huawei is dramatically increasing their budget, which I suppose is better late than never. On the other hand, neither company should expect much this year, given a U.S. election cycle where China bashing is seen as a winning proposition for members of both political parties. Additionally, Huawei has yet another patent dispute in front of the ITC, so if anyone on the Hill wants to bloviate about IP infringement, that issue is teed up and ready to go.

If you spend the money and buy the right people, you will eventually get what you want in D.C. For these companies, though, I have a feeling this will turn into a long-term strategy.

And by the way, why is that Marbridge news blurb attributed to the U.S. Senate? Why do they have this information, and if so, why is it public? Is that all normal, or is someone in the Senate playing PR games? Just wondering.


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Playing Games in Dreamworld

Posted: 28 Aug 2012 02:51 PM PDT

, head designer of the online game Dreamworld (梦想世界) and chief manager of its parent company, Duoyi, vents on about an enervating phone call he received from a local official looking to get ahead virtually:

XuYouzhen: I got a phone call from someone who claimed to be from some government office that oversaw us. They said that they wanted us to pay them a visit after we've been doing business with them for so long. They wanted me to open the lines of communication and have tea with them. A certain leader in the department plays our game and wanted to make some game currency. They asked me how to fulfill his wish. I was enraged. If they have the nerve to bother me again, I will move my business' registration and taxation address. Every year I'll move millions in tax money around, then give you 20 million just to mess around with you and be inharmonious. Isn't it just money?  If only I made more…

徐宥箴: 接到电话,自称省里某衙门,是管我们的,说我们生意做这么久了,都没去拜访,要我去交流交流喝喝茶。说有部里某领导玩我们游戏,要弄些游戏币,问我怎么 充?真是无名火大,敢找茬我就把公司注册地搬了,纳税地搬了,每年几千万纳税弄别的地方,再每年花两千万给你闹腾不和谐。不就是钱吗?我少赚点成不

The government is often in collusion with companies. Reports surfaced last year about large subsidies for the industry. The state gives even more support through "gold farming"—prisoners are forced to play games in order to earn virtual money and goods for players abroad. One prisoner told the Guardian, "Prison bosses make more money forcing inmates to play games than they do forcing people to do manual labour." In this light, a government official asking for a boost from the game creator himself is not so far-fetched.

Via SneezeBloid. Translation by Irene Hsiao.


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Tibetan Teenagers Set Themselves on Fire in China

Posted: 28 Aug 2012 12:43 PM PDT

Two more Tibetans have died outside in Aba County, Sichuan, after setting themselves on fire in protest again Beijing's policies in Tibet. Exile Tibetan groups say the deaths mark the 51st self-immolation since 2009. The Guardian reports on a news release from London-based Free Tibet:

The group said 18-year-old monk Lobsang Kalsang and 17-year-old former monk Damchoek set themselves on fire on Monday outside Kirti monastery in Aba county in the south-west Chinese province of Sichuan. They died later that day in hospital, Free Tibet said.

Citing witnesses, Free Radio Asia said the two teenagers shouted slogans condemning Chinese policies in Tibet.

Police in Aba county said on Tuesday they had no information on the self-immolations, which are rarely reported by Chinese state media. There have been at least 27 self-immolations in Aba, according to an earlier tally by the International Campaign for Tibet.

Supporters say the self-immolations are done in protest against Beijing's heavy-handed rule in Tibetan regions and to call for the return of the Dalai Lama. China has blamed the Tibetans' exiled spiritual leader for inciting the deaths, but the Dalai Lama denies the claim. He has never publicly supported or denounced the acts.

Read about the previous self-immolations by Tibetans, via CDT.


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China, India Press Each Other For Greater Access

Posted: 28 Aug 2012 09:45 AM PDT

While Chinese firms have been buying U.S. firms amid the economic slowdown, China and India have pressed each other for greater market access at a meeting between the countries' trade ministers, Reuters reports:

Despite twitchy relations and occasional heated rhetoric, business relations between and China have boomed for more than a decade. The two sides have targeted trade flows of $100 billion by 2015 from $75.5 billion now.

For its part, India has long complained that its companies, from IT and services to pharmaceuticals to Bollywood film-makers, are unfairly restricted when trying to enter the Chinese market. Exports to the world's second-biggest economy have mainly consisted of raw materials such as iron ore.

"The two governments need to work together to create a better, easier and more relaxing and business-enabling environment for our potential Chinese and Indian investors," Chen told reporters, through a translator.

Despite this meeting, Market Watch reports the China-India talks have little to offer in tackling the trade gap:

China and India Monday sought more market access for each other at a meeting of their commerce ministers, but offered little in solving the widening trade imbalance between the Asian neighbors other than saying that they will set up a joint panel to look into it.

India's with China jumped 42% to nearly $40 billion in the last fiscal year ended March 31, and was the largest contributor to the country's overall gap between exports and imports. Their total trade was more than $75 billion, up over 27% from the previous year, and the two countries have previously set a target to expand that to $100 billion by 2015.

The trade deficit has been a thorn in India-China relations.

Speaking after the meeting, Indian Commerce Minister Anand Sharma and his Chinese counterpart, Chen Deming, told reporters that the two countries needed to address the trade-gap issue and reiterated their respective stands, but didn't announce any specific measures.

China and India have been strategic rivals in the past, but India has invited Chinese companies to invest in its manufacturing zones, New York Daily News adds:

"We've invited China to participate in and support the establishment of one or more of the National Investment and Manufacturing Zones," trade minister Anand Sharma said in New Delhi after talks with his Chinese counterpart Chen Deming.

"That is where the opportunities beckon," Sharma said in a speech to Indian and Chinese business leaders, adding the response from the Chinese to the investment proposal had been "positive and encouraging".

The zones are being set up under India's National Manufacturing Policy which aims to boost manufacturing as a percentage of gross domestic product to 25 percent from 16 percent in the next decade.

The policy is part of India's struggle to provide jobs to its growing army of young people.

Aside from investing in the manufacturing zones, China plans to import more Indian commodities, according to China Daily:

China promised Monday to import more Indian commodities including IT,pharmaceutical and agricultural products in order to make trade between the two countries"more balanced".

Chen said when the global economy has not come out of crisis, there is great meaning to expand bilateral economic cooperation with India which will also send a positive message to the world.

He said China encourages its enterprises to shift some of their production bases from China to India if they are needed here.

Sharma said it is unreasonable that the direct investment into each other by China and Indiaonly totals about $1 billion and called for more investment.


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AIDS Patients Topple Government Gate

Posted: 28 Aug 2012 09:29 AM PDT

As the mortality rate in China has dropped, other reports found people with AIDS in China were denied hospital care. The Associated Press reports about 300 patients and their relatives toppled the main gate of a government building at a protest due to unmet demands for financial assistance:

Protester Li Xia said police in city beat some of the patients with batons after the group gathered outside the Henan provincial government office and blocked the main gate to demand a meeting with officials. She said one protester was dragged into the government building by police.

"We want the government to give us some help," said Li, who like many of the protesters was infected with HIV when she sold blood in 1995. Tens of thousands of people contracted the virus that causes AIDS in a blood-selling scandal in Henan in the 1990s that is widely seen as a failure of government leadership.

Collectors paid villagers to give their blood, pooled it without testing for HIV or anything else, extracted the valuable plasma then re-injected the blood back into those who sold it. Officials covered up the problem for years, which allowed HIV to spread when people were unknowingly infected from tainted transfusions at hospitals.

Officials at the Zhengzhou city government propaganda office and the city's police bureau refused to comment. A woman who answered the phone at the Henan provincial government office denied that there had been a protest.

As the blood-selling scandal continues to affect China, a man was reportedly pricked by an HIV infected needle inside a taxi. From China Daily:

According to Beijing News, 37-year-old Xu Tian (not his real name) got into a taxi in  district in the capital on Tuesday night. Sitting on the backseat, he felt a sting on his leg when he lifted it.

He took the syringe to Chaoyang District Center for Disease Control and Prevention on Wednesday. He later found the fluid contained HIV.

A doctor, surnamed Jiang, at the department of sexually transmitted diseases and AIDS detection at the center, confirmed to China Daily on Friday that a man came to the center with a syringe at about 3 pm on Wednesday, saying he was punctured by it.

Jiang said there was "very little light yellow fluid" left in the cap and the syringe barrel, and the center took a sample of the fluid in the needle cap, and found it was HIV antibody positive after a quick test.

According to The Times of , there has been a big increase in AIDS cases among Chinese over 50 years old:

There is a big spurt of HIV and AIDS cases among people aged 50 and above in China in recent years, a trend, Chinese officials say is unique requiring "targeted intervention".

"Worldwide, the new trend is so far detected only on the Chinese mainland, and most of the older carriers were infected due to prostitution," Wu Zunyou, director of the National Centre for AIDS/STD Control and Prevention, told China Daily.

Also a growing number of rural women left behind by husbands who sought employment in cities entered the sex trade, targeting mainly older men in rural areas, Ge Xianmin, a key official with the prevention and control office in Guangxi, said "That's a key reason for quickly rising HIV prevalence among local senior men," he said.

By the end of June, nearly 93% of newly reported HIV/AIDS cases in Guangxi were due to unprotected sex, and 30% of those cases were older men, he said.

See also Progress and Shortcomings in China's Fight Against AIDS, via CDT.


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I Will Not Allow Minxin Pei to Underestimate My Cynicism

Posted: 28 Aug 2012 06:09 AM PDT

Minxin Pei's latest column, "China in the Eye of the Beholder," is all about how Westerners are fooled by China's leaders:

One of the most glaring, if unremarked, oddities concerning China nowadays is how perceptions of its leaders diverge depending on the observer. In the eyes of the Chinese public, government officials are venal, incompetent, and interested solely in getting lucrative appointments. But Western executives invariably describe Chinese officials as smart, decisive, knowledgeable, and far-sighted – roughly the same adjectives that they once used to describe Bo Xilai, the disgraced Communist Party boss of Chongqing, before he was purged.

Pei then goes on to state that between Westerners and Chinese people, the latter are in a much better position to evaluate their leaders:

And that means that Westerners who have spent considerable time in China and consider themselves seasoned "China hands" need to ask why they have gotten it so wrong.

OK, hold on there a second. While I don't necessarily think of myself as a "China Hand," I have been around the hutong a few times, and I can tell you with some authority that most expat "China Hands" are jaded, cynical and possess excellent bullshit detectors. They are also not likely to be easily impressed with the usual tricks used to seduce foreigners and hardly ever do any cheerleading. I for one rarely believe anything anyone tells me. Come to think of it, this explains why my wife is so fond of hurling cutlery and glassware at me.

Pei's article is all about businessmen, and I think his use of the term "China Hands" and focus on folks over here for a "considerable" amount of time was a mistake. In my experience, the foreigners most likely to fall for the China leadership song and dance are the guys who come over here for a short period of time (anywhere from a week to a year), talk to a few officials who sound reasonably intelligent, and assume that everything they heard in terms of policy reform is: 1) true; and 2) likely to be adopted.

We could call this the Tom Friedman Syndrome.

It's possible that Pei regularly runs into naive business types whose experience with the system here has been pretty good. That's definitely possible, and if your life revolves around your job, then that positive experience will bleed over to your overall impressions of the country. It's also possible that Pei talks to multinational executives who are afraid to voice their honest opinions of China for fear of repercussions.

Either way, expats are some of the most cynical folks I've ever met (even compared to your average Chinese person, which is saying a lot), and to mistakenly lump us in with businessmen on short-term junkets to China is neither fair nor accurate.


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The Daily Twit – 8/28/12: A Mishmosh of Maladies

Posted: 28 Aug 2012 05:06 AM PDT

Today we've got the full range of China stories. From the environment to legal reform, IP infringement to nationalism and violence, we've got a little of everything.

Guardian: Japanese flag torn from ambassador's car in Beijing — The juvenile antics of the South China Sea dispute are ongoing, with yet another genius move by a "patriot" here in Beijing. Lovely. Most amusing, the Global Times even came up with a quick Op/Ed saying how stupid this vandalism was. I'm shocked.

The Diplomat: Breaking the Ice: China's Emerging Arctic Strategy — The next frontier. Hopefully there won't be stupid territorial claims, but I wouldn't bet on it.

Global Times: Hebei lake sees fish decimated due to 'lack of oxygen' — Fishermen vs. local government on what actually caused this. Sounds to me like it was either direct (dumping) or indirect (runoff) pollution. Either way, it highlights pollution enforcement problems.

China Daily: Draft law stresses govt role in environmental protection — More federalism tensions at play here.

Minxin Pei: China in the Eye of the Beholder — Have Westerners been hoodwinked by Chinese leaders as to the latter's professionalism and competence?

Marbridge: Youku Tudou Faces Insider Trading Probe — Not exactly a surprise. Mega-high profile China M&A deal. Yeah, I'd expect some insider trading.

CBS News: China AIDS patients topple gate of gov't office — More health care issues and a dispute with a local government. As I said, we're covering all the bases here today.

Wall Street Journal: Warning from China Film Watchdog: Not Enough 'Co' in Co-Productions — China is worried that foreign film studios are taking advantage of the co-production regime.

China Daily: Trademark speculators bet on Olympic Games — Your daily dose of IP infringement, specifically trademark squatting.

Guardian: Domain name disputes hit record high as brands defend virtual shop doorways — While the Olympics and sports have been motivating trademark squatters, e-commerce has done the same thing for cybersquatters.


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They Got the Same Shit Over There That We Got Here – Going Postal

Posted: 28 Aug 2012 02:30 AM PDT

Not sure why it took me so long to write this one, but better late than never. The impetus stems from a nasty murder/melee case in Jinan involving a water company and a disgruntled former employee:

Just after 10 am yesterday morning, when the company's Party leadership committee was having a meeting on the sixth floor of a company building, a retired former female employee of the company, Shi Mou (石某), suddenly burst into the room and started spilling gasoline all over the room and igniting it. In the ensuing fire, three people were burnt to death and four were injured. Among the killed and injured were the company manager, the company Party secretary and deputy secretary, and the deputy manager of operations. (Danwei)

Compare and contrast with last week's atrocity in New York City:

A disgruntled former apparel designer was killed Friday morning in a hail of police gunfire in front of the Empire State Building after he shot and killed a co-worker and engaged in a gunbattle with two officers, authorities said.

[ . . . ]

Police identified the shooter as 58-year-old Jeffrey Johnson, who was apparently laid off from his job as a designer of women's accessories at Hazan Import last year. (CNN)

Designer of women's accessories? No wonder he went nuts.

Both of these incidents can be accurately placed into the "Going Postal" category. You may not be old enough to remember this, kids, but the term "Going Postal," which has been bastardized to mean any sort of uncontrolled outburst of anger, originally stems from folks who did so in post offices.

To the Wiki Machine:

The expression derives from a series of incidents from 1983 onward in which United States Postal Service (USPS) workers shot and killed managers, fellow workers, and members of the police or general public in acts of mass murder. Between 1986 and 1997, more than forty people were gunned down by spree killers in at least twenty incidents of workplace rage.

Ah, the good old days.

China has had its fair share of work-related murder sprees, although most of them involve psychos with big knives. Don't let the higher numbers in the Jinan incident make you think that the U.S. isn't serious about body count. The New York incident was an anomaly; we usually do our best to push the stats up into the double digits. Why do you think we allow mental patients to buy machine guns with magazines so large that they have to carry them around in wheelbarrows?

That being said, with the Jinan immolation, China does deserve style points. I mean, the guy in New York used a handgun, which is hardly original. But bursting into a board room with a can of gasoline, dousing everyone and throwing a match? Let me tell you, that's some Keyser Söze gangsta shit. Not that I'm encouraging it, of course.

So who wins in the Going Postal sweepstakes? Look, I don't want to diss China or anything, but the U.S. has been in this business for a long time; we've even lost American presidents to disgruntled workers. We're the originator of Going Postal, the world leader, and we're not likely to relinquish this status anytime soon, even if we have to arm every single U.S. resident with a bazooka.


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Apple vs. Samsung: IP and Consumer Choice

Posted: 28 Aug 2012 01:34 AM PDT

Economists are odd ducks. If you aren't familiar with their lingo and way of talking, you might mistake cold calculation for psychopathy or brain injury. Case in point, a Forbes post by an economist on Apple's recent patent victory over Samsung, which asks the question "Why Don't Consumers Protest Apple's Intellectual Property Bullying?":

Reading stories about Apple's victory over Samsung in court over alleged infringement intellectual property I can't help but think back to the protests over Apple's labor standards in China, in particular in the Foxconn factories where iPhones were made. Despite the fact that these jobs were good factory jobs in China, and that they may simply lead to manufacturers to replace the workers with robots, consumers made a lot of noise over this and got Apple to subject itself to increased monitoring and pressed Foxconn into giving raises. But where are the protests of Apple's attempts to squelch competition and reduce consumer choices through lawsuits and aggressive patenting?

[ . . . ]

This isn't just Apple trying to get Samsung banned from selling these phones, this is effectively equivalent to Apple trying to get consumers banned from buying them. And yet I see little to nothing in the way of consumer protests.

Several readers wrote comments to the effect of "You idiot, don't you understand what "Intellectual Property" means?" This is unfortunate. The author knows exactly what IP is, but is posing the provocative question in order to illustrate the fact that aggressive patenting has negative welfare effects on the economy overall by reducing competition and consumer choice. It's a reasonable question, although presented in a rather ham-handed, cold-blooded economist fashion.

Then again, the answer, or possible answers, seem readily apparent, so I'm not sure why the post was concluded with "I don't have an answer for this." Really? Let's see.

1. Passion — The passion that drove folks to protests against Apple/Foxconn working conditions were all about empathy towards fellow human beings. Whether you agree or disagree with the complaints (I personally thought they were way over the top and unfairly singled out Apple), you have to admit that they were emotional and driven by concerns with working conditions, child labor, etc.

Where's the passion and human compassion in a patent case? And remember, this is coming from an IP lawyer who has more of an interest in these issues than most people. I don't think we can compare a consumer's inability to buy a mobile phone with a worker being forced to pull a 24-hour shift. Sure, the former is a direct effect on the consumer, while the latter is a concern for an unknown third party in another country, but that's what empathy is all about. And don't forget the media angle here. They have certainly been following this patent case very closely, but probably in muted tones. What makes for a better news story, a depressed worker committing suicide or the pinch-zoom patent? What's the visual for the latter story, an empty shelf at a Best Buy?

2. The Law — The Apple/Foxconn protests involved alleged violations of labor law, while Samsung was found to be a patent infringer. So in one case, protesters were on the side of law and high labor standards. If folks complained about the Samsung decision, they would be going against the established legal regime and supporting an IP infringer. I'm not sure how many people see it in those terms, but having a jury announce that someone/some company committed an infraction does carry with it negative baggage, and most people are not going to second-guess a decision like that.

3. Complexity — If someone tells you that Apple is using underage Chinese slave labor to make iPhones, that's easy to grasp. Whether it's true or not is a separate issue. However, trying to get most folks to understand the Samsung dispute is a bit more difficult, and rousing their passions over such issues is a tall order. Patent cases are so complicated these days that I'd actually support the U.S. switching to judge-only adjudication for such disputes (i.e., no juries).

4. Cult of Mac — One reason so many folks were upset with Apple over Foxconn working conditions is that they felt betrayed and/or used. They were Apple customers and felt tainted. If only Apple stopped doing all those awful things, they could go back to using their iCrap without that annoying guilt. And yet, almost none of these people abandoned their phones, laptops and tablets, nor did they stop buying new equipment. Brand loyalty trumped compassion when it came to that purchasing decision.

Samsung doesn't have that sort of connection with its customers. I'd personally rather have an S2 running Android than an iPhone, but that doesn't mean I particularly care if that consumer choice has been taken away from me by a jury in San Jose. I'll give the IP system the benefit of the doubt.

So why aren't folks rioting and pillaging in San Jose over the verdict? I think the answer is quite clear. Whatever you might think of Apple's aggressive IP strategy, that criticism isn't likely to rise to the level of public protest.


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