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- China Considers Real Name Registration for All Internet Users
- Photo: Winter in Beijing, by cesar casellas
- 11 Kindergartners Killed in Van Accident
- A Case of Corporate and National Defamation: AMSC v. Sinovel, hot air in legal and media exercises.
- Why Does Santa Play a Saxophone?
- China 2012 News Map
- China’s Supreme Court Issues Judicial Interpretation on Criminal Procedure Law
- What Did Chinese Web Users Search for in 2012?
- China’s hottest “styles” of 2012
- Actress Meng Qian in sexy Santa costume
- Last-words analysis - Why Tibetans Self-immolate?
| China Considers Real Name Registration for All Internet Users Posted: 25 Dec 2012 07:21 PM PST Following the call for more internet supervision by state-run People's Daily newspaper last week, Xinhua news reported on December 24, 2012 that the Chinese government is considering a new law requiring real-name registration for its 500 million internet users. According to Xinhua, the legislation would "safeguard" Internet users from defamation and fraud. Li Fei, deputy director of the Commission for Legislative Affairs of the NPC Standing Committee, said:
Although Chinese microblogging service Sina Weibo was required to introduce real-name registration earlier this year, implementation has been bogged down because of technical difficulties. Now the government is taking it to legislation, which could have a major impact on China's social networking services such as Weibo which supports over 400 million registered users. While some netizens think it's necessary to regulate the fast growing Internet service in China to protect personal information and avoid fraud, many worry that the move is just another way to further restrict freedom of speech.  Local TV team reports on the draft legislation for real-name registration, interviewing some web users about internet privacy. (Screenshot from Youku) Lawyer concerns
Another lawyer Liu Xiaoyuan with 70,000 followers on Weibo cited South Korea's failed attempt for real-name registration as example:
What do ordinary netizens think?
Zhan Jiang, a professor at Beijing International Studies University suggested:
It is still unclear if or when the law would be implemented. In the past few weeks, the government has also obstructed pathways normally used by foreign VPN services for dodging censorship restrictions. It looks bleak for anyone hoping for looser Internet control in China. Written by Abby · comments (0) |
| Photo: Winter in Beijing, by cesar casellas Posted: 25 Dec 2012 03:30 PM PST  Beijing in the winter © Sophie Beach for China Digital Times (CDT), 2012. | Permalink | No comment | Add to del.icio.us  |
| 11 Kindergartners Killed in Van Accident Posted: 25 Dec 2012 02:20 PM PST Amid the recent knife attack on a primary school injuring 22 school children, Chinese state media say an van accident has killed 11 kindergarteners, from The Washington Post:
According to the BBC, four of the children survived the crash in Jiangxi:
The Ministry of Education also commented on the recent string of incidents involving children, from the Wall Street Journal:
© Melissa M. Chan for China Digital Times (CDT), 2012. | Permalink | No comment | Add to del.icio.us  |
| A Case of Corporate and National Defamation: AMSC v. Sinovel, hot air in legal and media exercises. Posted: 25 Dec 2012 01:58 PM PST In 2011, a little known Massachusetts-based technology company, American Superconductor (AMSC) sued a startup company, Sinovel, in several provincial courts in China. Most people paid little heed to the development of the case, until several US politicians cited the case as a most egregious example of Chinese Corporate Espionage. As usual, the politicians' citations of examples are rarely backed up with any factual analysis, especially for a case that's yet unresolved in China. US politicians' rather empty fanciful descriptions of the case have been amplified by repetitions of the accusations across Western media, with equally poor amount of factual analysis. Thus, we here provide our most detailed analysis from available facts.
Case History:
AMSC was a struggling US tech company that promised a lot of superconductor related technologies, but couldn't get much farther beyond US government sponsored research projects. Some time around 2009, Dan McGahn took over as AMSC's President/CEO, and began to redirect the company to produce more basic components suitable for the existing market. Instead of dreaming of making viable superconductor power lines, the company sought to produce simpler technological advances that might be profitable.
Dan McGahn some how managed to strike up a deal with a Chinese startup wind farm company, Sinovel. Sinovel didn't have much, but it had the financial backing of the Chinese government, who was eager to invest huge amounts of Chinese taxpayers' money in massive number of windfarms. The deal was in essence, that AMSC would sell specialized controllers /converters for Sinovel's wind turbines. AMSC would make the controllers in AMSC's Chinese subsidiary factory, and then install the controllers into Sinovel's wind turbines in the wind farms of remote Northwestern China. In 2010, Sinovel suddenly stopped accepting AMSC's controllers, citing low quality and bad performance of the controllers. AMSC through its investigations, believes that Sinovel had bribed an employee/manager of Windtec, an AMSC subsidiary in Austria. The bribe reportedly totaled around $20,000, plus an apartment and prostitute. The bribed employee allegedly resigned from Windtec, but his supervisor asked him to keep the company email access to help the company until a replacement was found. Sinovel allegedly hired the employee, who emailed stolen source codes to Sinovel employees, and then went to China and helped Sinovel modify AMSC's code in the controllers. Sinovel then established its own subsidiary in China to make the controller hardware, and installed its own controller with the modified AMSC code. AMSC's bribed employee upon interrogation in Austria, promptly confessed to the entire plot, conveniently. An Austrian court sentenced the corporate spy, a Serbian National, to several years in prison. AMSC then brought lawsuits in 4 separate jurisdictions in China, among them, 1 for breach of contract, 2 for copyright infringement, with damage totaling about $1.2 billion. Sinovel countersued for breach of contract with damages of $40 million. Most pertinent to the US Politicians' accuastions relates to the 2 lawsuits for copyright infringement, 1 in Hainan and 1 in Beijing. Sinovel moved to dismiss both cases on the ground that both cases of copyright infringement should be covered by the Contract arbitration clause, and thus should be consolidated with the Breach of Contract lawsuit pending in an Arbitration Commission. A Hainan Higher Court dismissed AMSC's copyright infringement case in Hainan, but a Beijing Intermediate Court ruled against Sinovel. AMSC appealed the Hainan ruling in the Chinese Supreme Court, and the ruling is pending. Western media hyped the pending Chinese Supreme Court ruling as monumental for IP rights in China. As we will see, it's any thing but, and AMSC's entire case may actually fall apart in the substance as well. FACTUAL ANALYSIS: (1) The pending issue before the Chinese Supreme Court is not on the merit of the cases. The Issue is one of jurisdiction: Whether the civil courts are the proper jurisdiction for determining the copyright infringement claims, or the Arbitration Commission should hear the copyright infringement claims. Regardless of how the Chinese Supreme Court rules on the pending issue, the outcome of the copyright infringement claims would not be determined until much later. (2) On the merits of AMSC's claims and allegations, there are many unclear factual aspects. Here are some most glaring ones, along with my analysis: I. Copyright infringement NOT covered by Contract?? Sinovel was AMSC's customer, and accounted for about 40% of AMSC's revenue (according to AMSC). Sinovel bought and paid for at least some of AMSC's shipment of controllers, which AMSC had programmed the control codes into the "firmware," which is like the resident ROM type memory of the controller system, without the need for loading the code from any disk. AMSC's own public statements also indicated that AMSC loaded the controller firmware in Windtec with a 14 day expiration date or "trial period," after which the controllers in Sinovel's wind turbines would automatically shut down. 14 days? How can that work? And why? AMSC would have to reset the trial period for every wind turbine after every 14 days. The answer is that AMSC planted a "Time Bomb" in their firmware code, a piece of code that would cause AMSC's encrypted firmware code to become inoperable after 14 days. Some similar types of software copyright protection are called "trialware," most common of which can be seen in the trial versions of Microsoft's Window Vista Operating System. However, the difference between a "trialware" and a "Time Bomb" is that a buyer of "trialware" is aware and agreed to the "trialware," which is usually free, while in contrast, a buyer of a "Time Bomb" planted software is NOT aware and did not agree to the "Time Bomb." A "trialware" is usually legal, due to evidence of buyer's awareness in a software license (a contract). A "Time bomb" is generally not legal, not enforceable, and potentially considered criminal computer trespass, because the buyer did not agree to it. (See for example, US, Virginia Criminal Code, § 18.2-152.4. Computer trespass; penalty, "A. It shall be unlawful for any person, with malicious intent, to: … 2. Cause a computer to malfunction, regardless of how long the malfunction persists".) A particularly relevant US case is Clayton X-Ray Co. v. Professional Systems Corp., 812 SW2d 565 (Mo. Ct. App. 1991). http://www.leagle.com/xmlResult.aspx?xmldoc=19911377812SW2d565_11324.xml&docbase=CSLWAR2-1986-2006. In Clayton, software vendor PSC planted a time bomb in Clayton X-ray's computer, which caused the computers to lock up after a period of contract dispute between the parties. (Also in this case, Clayton X-ray managed to hire a former PSC employee to disable the time bomb to allow Clayton X-ray to resume operations). The state appeals court in the Clayton case upheld a punitive damage against software vendor PSC. Here, AMSC's own assertion may be harming its own case, because AMSC asserted that the copyright of its software was not covered by its contract with Sinovel. I.e. the contract did not contain any provisions relating to software licensing, and Sinovel was not aware of the Time Bomb at the time of the contract. Without a software license for AMSC's code, the code was effectively part of Sinovel's hardware purchase, especially because the code came along with the controllers, and without the code, the controller could not function properly, or usable by typical commercial contract standards. Effectively, AMSC's contract sale of the controllers gave Sinovel unlimited license to use the software as it chooses. Because AMSC shipped the software with the controller hardware as part of a contract, Sinovel was a legitimate user of the code. As such, under Chinese copyright law, Sinovel was allowed to modify the code WITHOUT the permission of AMSC:
As long as Sinovel does not transfer its copy of the AMSC's code, Sinovel can make copies, use, modify the code as it pleases. Note also, without an express software licensing agreement to limit, Sinovel can have as many copies as it chooses and use the code with whatever hardware it can buy or build. II. Why was there no software licensing? It's odd to say the least, that AMSC would somehow negotiate a contract with Sinovel, its biggest customer, to sell its unique IP, without limiting the software licensing. So what could be the explanation for this? I would not speculate to say for certainty, so here are some POSSIBLE explanations based upon available facts and general business practices: (a) AMSC didn't want to sell software, because the hardware would have a bigger revenue. Afterall, even with billions poured by the Chinese government into the Sinovel wind farms, there are ONLY so many turbines. How many copies of the software can AMSC possibly sell? Controllers on the other hand, integrated with the software, AMSC could potentially lock in as a parts supplier for decades (considering replacements, etc.) AMSC also probably knew that the controller was not very special, and Chinese electronics makers could easily build one of their own for much cheaper. And if AMSC provided a full copy of the software, even with copyright protections, the Chinese could easily and quickly reverse-engineer the software and make their own versions. So AMSC locked in their unique software encrypted into the firmware of the controllers, along with a "time bomb". That way, if Sinovel ever stopped buying AMSC's hardware, the "time bomb" would just go off, and Sinovel's wind turbines would shut down. This type of "bundling software into hardware" is sometimes referred to as "vertical tying", and may be considered anti-competitive practice under many countries. That is, AMSC may have attempted to use its unique software to force its customers to buy the hardware, thus cornering the entire controller market in Chinese wind turbines. (From its own data and assertions, AMSC nearly succeeded). (b) Software licensing hassle in China. Chinese laws require that all software licensing agreements with foreign suppliers be registered with the Chinese government and approved. Registrant must prove that they are legally allowed to export the software into China. Some foreign companies do not like the bureaucracy of this procedure, and choose not to register the software licensing agreement. However, even an unregistered software licensing agreement may be enforceable in Chinese courts. Thus, it still makes little sense for AMSC to not have one at all. (c) Export Control issue. Software export from US sometimes require Export control review. AMSC's own legal page noted since the company's founding that, "Software from this Site is subject to United States export controls." So did AMSC actually comply with US Export Control rules regarding its software export? The facts suggest that AMSC might have tried to bypass the US Export Control rules. AMSC "sequestered" its software to its Austrian subsidiary Windtec, to house the software and to install it in the controller, while its Chinese subsidiary made the hardware. Why "sequester" the software in Austria, when it would be far safer to sequester the software in AMSC's own US headquarter in Massachusetts??! One possible explanation is that Austria was a 3rd-party transfer point for the potentially export controlled Software. AMSC can send the software by email from US to Windtec in Austria, and vice versa, without export control review. Then Windtec can install the code into the hardware in Austria, and send it to China. (d) Transfer pricing. To maximize profit margin and lower tariffs and taxes, AMSC may have shifted its profit on paper, by attributing the entire value of the controller to the hardware, and by not mentioning the software at all in the contract. Remember AMSC also makes the hardware in its Chinese subsidiary, no doubt for low costs. But AMSC could charge Sinovel higher prices, because of its own software. So AMSC could gain a high profit margin. But if a software licensing agreement was mentioned in the contract, (or registered with the Chinese government), then AMSC would have to pay an import tariff on EACH copy of the software it licensed to Sinovel. By not mentioning the software licensing, AMSC effectively would make the controller 100% in China at low cost, and attribute nearly 100% of the profit to the hardware in China, and pay almost ZERO in tariffs on software export to China. III. What about the "trade secret theft"?? AMSC also claimed that its "trade secrets" were stolen by its employee in Austria and given to Sinovel. But what "trade secrets" was AMSC talking about? Not the code, because even encrypted and time-bombed, the code was supposedly working in the controllers. (If it was only a partially functional copy, then Sinovel would definitely have a valid claim that the controller from AMSC didn't work well.) What did AMSC's disgruntled and bribed employee take in "trade secrets"? That which allowed the employee to disable the "time bomb" in the code. Effectively, AMSC is claiming that its "time bomb" was the "trade secret"!! Here, I must commend such an imaginative legal theory. If the code was solely AMSC's possession, Sinovel may even be liable for hacking the code. Except, Sinovel bought the code, even if the encrypted version. As stated earlier, under Chinese copyright laws (similar to US laws), Sinovel was an authorized user, and could modified the code as it pleased. And since there is no limitations on Sinovel's software copy, Sinovel could also disable the "time bomb" if it wished. Also except, under Trade Secret laws, "trade secret" must be ITSELF of economic value. A "time bomb" is NOT a trade secret, NOT unless AMSC is somehow selling the "time bomb" by itself for economic value. Under the Chinese Trade Secret laws, the "trade secret" must be immediately useful and applicable for industrial and business applications. AMSC's "time bomb" is by itself useless, other than the value of what it may protect, (which in this case was already sold to Sinovel). Generally also, IP may NOT be claimed or protected, if the IP was designed for immoral or illegal uses. (A computer malware code cannot be claimed as copyrighted or trade secret or patented). *What's ongoing? AMSC's shareholders also sued the company for misrepresenting financial statements. AMSC also attempted to have a Brazilian partner ban Sinovel's shipment of wind turbines from Brazil. The Brazilian company dropped the ban against Sinovel recently. The Chinese Supreme Court will hold another hearing on the jurisdiction issue of the copyright infringement case from Hainan. Hope the honored Chinese Justices will consider the cases deeply and recognize the hot air from the West. |
| Why Does Santa Play a Saxophone? Posted: 25 Dec 2012 01:53 PM PST Mark Fisher from the Washington Post reported on eight fascinating facts on Christmas in China, which included a 'war on Christmas' and Santa's sisters. Fisher also reports on why Santa Claus in China is always depicted playing a saxophone:
In another article Fisher speculates former US president Bill Clinton is responsible for the saxophone playing Santa. From The Washington Post:
Aside from images of Santa Claus, Pope Benedict XVI called for freedom in China in his Christmas address, the New York Times reports:
© Melissa M. Chan for China Digital Times (CDT), 2012. | Permalink | No comment | Add to del.icio.us  |
| Posted: 25 Dec 2012 06:00 AM PST Where did the major news events occur in China this year? And where was China's influence felt most acutely overseas? China Digital Times has put together a Google Map marking the locations of some of China's major stories in 2012. This is not a complete list but includes the stories that we felt had the biggest impact this past year. This is a work in progress and we may add to it in coming days.
View China News Map 2012 in a larger map Thanks to Anne Henochowicz for her help putting this map together.
© Sophie Beach for China Digital Times (CDT), 2012. | Permalink | No comment | Add to del.icio.us  |
| China’s Supreme Court Issues Judicial Interpretation on Criminal Procedure Law Posted: 25 Dec 2012 04:09 AM PST As my expertise on criminal law matters is quite limited, this is mostly a FYI post. If you live in certain jurisdictions, you may not be familiar with the concept of unsolicited judicial guidance being issued by the nation's top court. In the U.S., for example, the Supreme Court may not simply write an opinion about a point of law without there being a dispute brought before the court. In many countries, however, the highest court has no such constraints and is expected to help out with guidance on troublesome legal issues. Earlier this year, China passed amendments to its law on criminal procedure, and so this judicial interpretation, which was issued yesterday, is the Supreme People's Court (SPC) chiming in with its explanation on several points. This interpretation will be effective at the beginning of next year along with the new criminal procedure law amendments. There were several different areas of criminal procedure that the judicial interpretation commented on, but I'll just choose one in particular (see below after the quote):
Here's the announcement by the court, if you're interested (Chinese only). The issue I found most interesting, as the topic in general relates to more than just criminal trials, concerns technology and court proceedings. Xinhua ran a separate story on the judicial interpretation's take on the use of certain kinds of devices that some have used to broadcast or otherwise transmit information about a court proceeding, often in real time:
This issue has come up numerous times in the past couple of years, but with discretion in the hands of judges and the law pretty much silent on this new tech, a lot of questions remained prior to the issuance of this judicial interpretation. If your knee-jerk reaction is to interpret this as yet another example of information control by the government here, I'd caution you to take a closer look at this issue. Judges have always had discretion with respect to the behavior of parties and guests in their courtrooms. If they wanted to allow journalists to come in and view proceedings, they could do so, and the interpretation does not remove that authority. I think the concern here was much broader. There have been instances where spectators and even lawyers have been sending out emails, IMs and microblog posts during proceedings, which some judges have seen as undermining their authority and violating the rights of the parties involved in the dispute. Sounds reasonable to me. I'm all for free speech, but when it comes to civil and criminal disputes, some limits are necessary. A lot of countries have grappled with this issue, and many have either curtailed speech rights and/or given discretion to judges to make the call on a case-by-case basis. It's important to increase transparency with respect to both civil and criminal suits, and to that end, China recently said it will begin reporting all civil case rulings (this is a very big deal). But allowing a prosecutor or defense attorney to surreptitiously record the proceedings on their phones and upload them to weibo? Uh uh; that's going too far. © Stan for China Hearsay, 2012. | Permalink | No comment | Add to del.icio.us |
| What Did Chinese Web Users Search for in 2012? Posted: 25 Dec 2012 03:42 AM PST Baidu, the leading search engine in China, has compiled two Top 10 lists —the most-searched terms online in 2012, and the "fastest rising" words or phrases. TeaLeafNation has a detailed analysis on what the lists mean. Written by Abby · comments (0) |
| China’s hottest “styles” of 2012 Posted: 25 Dec 2012 02:25 AM PST Because of the Korean pop hit "Gangnam Style", the English word "style" has been popularized in China in 2012. On Dec 24,a local newspaper published a special round-up of the hottest "styles" on Chinese social media in 2012. The feature includes six categories: "Funny (幽默) Style", "Strong (实力) Style", "Emotional (感情) Style", "Surprising (惊诧) Style", "Lateral Thinking (偏锋) Style", and "Controversial (争论) Style". DANWEI translated the piece. Written by Abby · comments (0) |
| Actress Meng Qian in sexy Santa costume Posted: 24 Dec 2012 04:20 PM PST Busty actress Meng Qian got into the Christmas spirit and dressed herself up in a sexy Santa outfit to pose for a photoshoot recently. The versatile and tri-circle actress, known as goddaughter of Hong Kong famous star Chow Yun Fat (周润发), looks very glamorous in the suite, revealing her rounded boobs and slender figure. She's no doubt your winter warmer. Scroll down to turn up the heat, dude! |
| Last-words analysis - Why Tibetans Self-immolate? Posted: 24 Dec 2012 11:35 PM PST Ogyen Kyab has translated Chinese scholar Wang Lixiong's analysis of the reasons behind the Tibetans self-immolation. Written by Oiwan Lam · comments (0) |
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