Video Game Equipment Ban to Be Lifted Nationwide

In a development that speaks to both recent developments that seek to drive more value for the content industries in China, as well the vitality of the Shanghai Free Trade Zone as an experimental pilot, the Ministry of Culture has lifted the ban of video game consoles in China.

The ban had previously been lifted in the Shanghai Free Trade Zone in early 2014. The Ministry of Culture on Tuesday lifted the ban on video games and consoles effective retroactively as of June 30, 2015.

In its announcement, (文化部关于允许内外资企业从事游戏游艺设备生产和销售的通知) (Notice of Ministry of Culture Permitting Domestic and Foreign Enterprises Participating in Video Game Entertainment Equipment Production and Sales) as well as the related notice accompanying the announcement (游戏游艺设备内容审核管理办法)(dated June 24, 2015) (Rule for Managing Approval of Content for Video Game Entertainment Equipment), the Ministry noted that it will encourage “healthy” video games, with national characteristics, including “use of indigenous intellectual property.” (具有自主知识产权).   Self-censorship and reporting mechanisms are to be established by game developers and manufacturers.

Requests to lift the video game console ban had long been a staple of requests made to USTR by console manufacturers and game developers, as well as the International Intellectual Property Alliance.

How much will the removal of the ban stimulate the legitimate industry? This appears to be one of several efforts to bring more value and protection to copyrighted content in China. Among those recent developments are the market opening efforts announced in the recent Strategic and Economic Dialogue on marketing of flat-fee (non-revenue sharing) films in China, the availability of copyright protection for sports broadcasts, the grant of a preliminary injunction involving a US video game product, and recent licensing deals for music and sports broadcasts.

July 24th USPTO – Denver Lecture on Chinese IP

I wil be giving a talk at USPTO-Denver on Chinese IP Developments on July 24th.  The announcement is available here.   The title is “Anticipating Future Challenges on Chinese IP – Why Being Up-to-date is not Enough.”  The lecture is free.  Please reserve ast rockymountain@uspto.gov.

USPTO-SIPO To Conduct Second IP Licensing Program

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USPTO and SIPO are cohosting another program on IP licensing on July 29 at SIPO’s training center in Beijing. I reported on the last program earlier this year here. Although the final agenda is not set, this program is intended to take a “deeper dive” on many of the issues raised in the earlier program. Registration can be accomplished by emailing jia.liu@trade.gov.

Note: Drawing is used pursuant to a Creative Commons License for non-commercial purposes.(http://www.iisvolta.gov.it/home/).

Sword Net Campaign to Focus on Music Piracy

I had previously blogged on the 2014 top 10 cases of the copyright-oriented “Sword Network” or “Sword” Campaign.  On July 8, the National Copyright Administration announced that a top priority for the balance of this year for this year’s campaign will be music piracy.   Oddly, this focus on music piracy, had already been announced in January of this year. Music was also a focus for the WIPO’s World IP Day this year.

According to the announcement of the National Copyright Administration, unlicensed online music providers must stop providing this content by July 31 (Chinese announcement, English article). The announcement does not specify any new policies or additional enforcement mechanisms, but rather appears to be a prioritization of NCA’s efforts going forward.

There was some improvement of audiovisual works through similar campaign efforts recently. However, music – which invariably includes many more titles, with smaller size files, that are likely to be listened to many times and via different platforms–arguably presents a more challenging enforcement environment than movies.

China’s Rising Presence in the IPO Top 300

Intellectual Property Owners (IPO) recently released its top 300 organizations granted US patents in 2014.  Many Chinese companies made the top 300.  TSMC was the top amongst Mainland or Taiwan companies, ranking number 26, with 1,446 US patents. Huawei was 48 with 872 patents; ZTE was 63 at 705.  ZTE also showed a 58.2 increase over last year.  Hon Hai (Foxconn) was number 68 with a drop of 33.8 percent in patent filings to 665, and a drop in rank from number 35 in 2013.   Hong Fu Jin was number 85 ( a decrease of 47.9 percent), and Shenzhen China Star Optoelectronics showed the highest increase of any Chinese organization amongst the top 300, with a total of 431 filings.  This 318.4%  increased earned it the number 93 spot.

Patent grants increased for both Chinese and Taiwanese cell phone companies.  Amongst Taiwanese cell phone companies, HTC also made the top 300.  It received 210 patent grants, with an increase of 44.3% earning it the 157th place.

Tsinghua University retained its rank as the top Chinese university patent filer, ranking number 153 with 230 patents in 2014.  Amongst well-known universities, Tsinghua retained the enviable position of being behind the University of California system (number 91) and MIT (number 135) and ahead of Stanford (181), and Caltech (196).

Chinese “Top 300″ changing ranks may be contrasted with overall patent grant trends at USPTO.  Patent grants from all countries, increased at USPTO last year, from 301,962 in 2013 to 326,039.  This was an increase of  about 8 percent.  Chinese patent grants increased from 6597 to 7921, an increase of  about 20 percent.

China is receiving more patents in both relative and absolute terms.   There were however many outliers in China’s overall growth.  While many Chinese organizations received patents in numbers that were well in excess of the overall growth rate at USPTO, as noted above several organizations experienced negative growth (Foxconn, Hong Fu Jin).

Of course, increases in patent grants do not necessarily translate into patent quality or commercial value.   Other patent data, including data on allowance rates, pendency rates and technology rate can help in further understanding overall patent data.  Data on licensing flows can also assist in understanding China’s role as technology importer and an emerging technology exporter.

International Innovation and IP Analyst Position Opening at ITIF

ITIF, the Information Technology and Innovation Foundation (ITIF)—a Washington, DC-based technology and economic policy think tank is seeking a trade and intellectual property policy analyst. The analyst will work on a wide range of trade policy issues including assessing foreign countries’ “innovation mercantilist” policies.  According to the position announcement, the analyst will work at the intersection of a range of intellectual property, digital, and trade policy issues, including copyright, patent, digital content, and digital trade issues.  ITIF informs me that the position will involve “about 25%” China-related work.  This position does not require legal training.  Further details are available here.

Protecting Chinese Broadcasts …. In the United States

As I noted recently, a Beijing district court recently decided that live broadcasts of sports events can be protected under China’s copyright law (June 30, 2015).

Only a few weeks earlier, a US district court decided in CCTV et al vs. Create New Technology (HK) Ltd.  et al.  (June 11) (Case No. CV 15-01869 MMM (MRWx) (C. D. Cal) (Morrow, J). that the pirated streaming of live and time-shifted CCTV and TVB  (Hong Kong) channels  through media boxes  and apps on a peer-to-peer network and/or through servers in the United States to large numbers of users who had no right to access the content constituted copyright infringement.   The CCTV and content covered by the court’s preliminary injunction included live news, sports, and television.

The U.S. case underscores the availability to Chinese plaintiffs of strong civil remedies in the United States, including preliminary injunctions. Although Chinese courts normally dispose of first instance cases in six months, this case was filed on March 13, 2015 and the preliminary injunction was granted June 11 – precisely 90 days later, not including the end date.  In other words the preliminary injunction in this case was rendered in case involving foreign interests in less time than a Chinese court would have rendered its first instance decision in a domestic case (time frames are expanded if there is a foreign litigant).

Of about 90,000 civil IP cases in the Chinese courts in 2012, there were only  27 cases involving preliminary injunctions.  By contrast, US courts are, by all accounts, more willing to grant provisional relief of all kinds.  Judge Morrow, in her decision, noted that “unauthorized and uncompensated internet streaming that competes directly with the television programming of a  copyright owner and its authorized licensees causes harm that is ‘neither easily calculable, nor easily compensable.’ ”  She further stated that “given the extensive nature of the infringement alleged … it is unclear that defendants would be able to satisfy any damages award entered. This further supports the conclusion that injunctive relief is appropriate in this case.”

These two recent cases are positive steps in protecting broadcasts, including live sports broadcasts.  The U.S. case is also a good guide post for Chinese courts looking to extend the availability of provisional remedies in civil IP adjudication for foreigners and Chinese alike, including in cases involving online infringement and live broadcasts.