标题: Stratic Advice on Intellectual Property Investment in Asia/苏冉 [打印本页] 作者: [db:作者] 时间: 2014-3-4 23:08 标题: Stratic Advice on Intellectual Property Investment in Asia/苏冉 Stratic Advice on Intellectual Property Investment in Asia
苏冉
IssueⅠ: Legal framework of protection on software copyright in P.R.C and Singapore
A) P.R.C
In conjunction with China’s astonishing economic growth over the past two decades, especially after the entrance to WTO, China has steadily improved its legal framework on Software Copyright by checking and clearing large-scale regulations both in domestic and international activities.
Frankly speaking, China joined in three vital international treaties relate to copyright: the Berne Convention , TRIPs and Universal Copyright Convention. Moreover, China and US signed MOU especially for software in January 1992. All these Conventions are regarded as a milestone to reflect China’s dramatic promotion and strong determination to build a satisfactory environment for foreign software investors.
Similarly to US, P.R.C has chosen to protect software under copyright law rather than trademark, patent, or contract law. One year after Copyright Law Amendment in 2001, Chinese Council corrected its software-specific “Computer Software Protection Rules” , to deal with new problems prevailing in software protection nowadays. Under the Rule, software is defined as two particular types: computer program and their relevant documentation. Furthermore, since MOU came into force, computer software is protected as a literary work. Third, according to the conditional nation treatment here, foreigners are required to comply with “connecting factor”, to sum up, either first publication or nationality/residence of the author in China or in any of these countries ,between the work and China or a country who is a member of the WTO, or the Berne Convention. So, despite your software products first being published in US, you can still enjoy the original copyright and the legal protection on in China.
Except from the above rules, other laws also have supportive stipulation on the protection of software copyrights as follows:
(a)The General Principle of Civil Law, the country’s current basic civil law, has authorized the author’s copyright in general;
(b)The Criminal Code has a section of articles referring to piracy offences, with “Dual Punishment Principle” in front of copyright encroachment;
(c)The newly amended Foreign Trade Law (adopted in Feb).
B) Singapore
The general legal framework of software copyright protection in Singapore is almost the same as P.R.C, but with some characteristics of its own. Actually, different from P.R.C based on Civil law background, laws and litigations in Singapore are principally modeled on the English system under Common law system till nowadays. Pursuant to certain legal revolutions, modern copyright legislation contains the same international conventions as P.R.C: the Berne Conventions, Universal Copyright Convention, and TRIPs. But, Singapore signed ASEAN Framework on Intellectual Property Cooperation and the WIPO Copyright Treaty as a member of ASEAN. Turning to its domestic laws, the latest Copyright Act 1999(revised edition) is the principle one, with some other relevant regulations for enforcement. And it also definites software program into literary work under protection. In addition, Singapore owes large resources of case laws so as to make its legal conditions more particular than that in P.R.C.
The amended Act is first purposed to address issues arising from the use of copyright materials in a digital environment, especially provide legal certainty for the use of copyright in cyberspace. For instance, the extension of concept “reproduction” .Second, the Act plays another role in enhancing performer’s rights, offering two new defenses to allegations of copyright infringement. Therefore, merely surfing the Web doesn’t constitute software copyright infringement, if it’s necessary to browse. Even , Singapore passed the Electronic Transactions Act 1998 to give statutory protection of Network Service Providers. At these points, Singapore seemingly forwards a step further than P.R.C, declining its attention on encouraging the growth of a knowledge-based economy and promoting E-commerce and creative innovations. Last but the most significant point, Singapore and the United State signed a bilateral free trade agreement (FTA) on May 6th 2003, and entered it into force from January 1st 2004. Virtually, this is the first FTA between US and an Asia country .So it’s doubtlessly the greatest advantage for Singapore to attract US investors, apart from other Asian countries. They would encourage the entrepreneurship, investment, job creation and growth in our own technology, science and creative industries as well as set the stage for Singapore’s emergence as a global IP hub.
Issue Ⅱ: Implementation on Software Copyright Law in P.R.C and Singapore
Sufficient and effective enforcement is more useful and practical than recorded documents, with no exception to P.R.C and Singapore.
(ⅰ)Role of Government
A)P.R.C
Learned from Annual Report on the Protection of Intellectual Property Right in China during the past 5 years by the head officer Jingchuan Wang in TableⅠ , you can see copyright administration at various levels make remarkable progress in encouraging innovation, promoting industrial development, regulating market order, and even improving the opening-up policy.
As a matter of fact, the People’s Courts, the People’s Prosecution Department, National Copyright Administration Centre and Public Security compose the backbone of the implementation of copyright law in China with civil remedies, criminal sensations and administrative punishments, such as fine. And border enforcement assistance to copyright owners by the Customs and Excise Department is also available.
TableⅠ:
The Administration on Software Copyright In P.R.C
YearRegistrationProsecute CasesResolved Cases Resolved Cases RateSeized Pirates(M)Top 1 Region of Piracy
19991,0411,6161,51593.75%20.14Shenzhen
20003,3002,4571,98095.30%32.60Guangdong
20014,6202,6832,32797.52%61.75Guangdong
20024,8602,7402,60499.02%67.90Guangdong
20035,0206,1205,79397.64%73.28Beijing
Statistics from NCAC (National Copyright Administration Centre
Fortunately, China has begun to regard software as an industry with strategic significance while formulating effective policies in areas including anti-piracy and anti-monopoly. To adapt to the legal framework, China has shifted its attention upon educating software users and strengthening the law. “Government departments are being asked to show a good example in using copyrighted software only and make software budget each year”. For example, Beijing, Shanghai, Guangdong buy over 3,000 software products every year through public bidding. What’s more, the National Software Government Procurement Regulation will probably act in the near future. Eventually, Chinese government is trying to treat all software companies equal in P.R.C, no matter domestic or foreign countries.
Nevertheless, given China’s vast geography and population, it would be an awesome task for the central government to manage pirating activities throughout the entire country. On the other hand, due to lack of resources, the lack of judicial expertise, the unpredictability of trial outcomes, and large costs, litigation in Chinese courts remains a risky and expensive response to Chinese copyright violations. Another administrative difficulty arises from the increasing decentralization of the Chinese government. Much of China's copyright enforcement takes place at the provincial and local levels; the national government lacks the resources and control to effectively monitor nationwide pirating activity and to impose national enforcement policies.
B) Singapore
Switching to Singapore, the Intellectual Property Office of Singapore (IPOS) is its senior administration department, and it leads Singapore to the success in copyright infrastructure. Singapore has announced a number of meaningful standards through requirements for tough penalties to combat piracy and counterfeiting, including, in civil cases, procedures for seizure and destruction of pirated and counterfeit products, and a requirement to provide for statutory and actual damages to remedy such practices. There has been a rule in Singapore that government could only allowed to use copyrighted software since 1996. In order to obtain efficiency, Singapore maintain civil remedies and criminal penalties for circumvention of technology protection measures, and it also has in place implementation allowing for border seizures of infringing articles by customs officials. For example, the copyright infringement is punished with a maximum fine of S$100,000 or five years’ imprisonment or both. So, in comparison to P.R.C, the least time for imprisonment is shorter .But due to the judge’s free power under common law system, the court is increasingly harsh in their sentencing in respect of infringement of copyright. In other words, criminal obligation will become heavier with more limitation in Singapore.
In the contrast with Chinese administrative punishments, Singapore has a large scope of interlocutory remedies to fill in the blank area between civil remedies and criminal sensations, and they are three main types:
(a) the interlocutory injunction---It is an injunction obtained before the trail often with the main objective of maintaining the Stats quo between the parties pending the outcome of the trail. The interlocutory injunction may be in a mandatory or prohibitory form.
(b) the Anton Piller Order---It’s developed from Anton Piller KG v.Mfg Processes Ltd as a safeguard system of evidence for avoiding the defendant to destroy and hide the evidence of copyright infringement, if the plaintiff shows an extremely strong prima facie that his right are being interfered with, or the damage, potential or actual are very serious to the plaintiff, or even there must be clear evidence to proof the defendants faults.
(c) the Norwich Pharmacal Order.---The further expansion of Anton Piller Order to raise over the privilege against self-incrimination from Rank Film Distributors Ltd v. Video Information Centre Virtually . However, case law in Singapore has now established that where the privilege against self-incrimination exists, an undertaking from the plaintiff/ applicant not to use the information obtained in criminal proceedings is not an adequate safeguard for the defendant’s privilege against self-crimination. Singapore courts have also held that they don’t have the power to order that the information be inadmissible in any subsequent criminal prosecution.
Relying on common law foundation, people in Singapore prefer to a lawsuit rather than mediation while more mediation in P.R.C, once in the face of a dispute. Consequently, it would like to be more time and energy consuming somehow, for it costs at least one year of a civil procedure in the High Court of Singapore.
Last but not least, along with legsilation changes, Singapore Administration departments are also mounting a public campaign targeting both consumers and businesses to increase their awareness on the benefits and other implications of the new laws. There’s broad-based public awareness initiatives like the HIP Alliance’s year-long anti-piracy campaign– “The Real thing is the Right thing”, and brain Wave, Singapore’s first reality television show on IP.
(ⅱ)Role of Anti- Piracy Organizations
Both P.R.C and Singapore joined in Business Software Alliance (BSA) ,and WIPO several years ago and established domestic anti-piracy alliances at their own respective locality. The alliances played an active part in combating piracy and protecting the interests of right holders. They always declare laws, promulgate routine reports of current protection on TV, newspapers, and Website and show different points between pirate and authorized products. In the contrast with P.R.C, Singapore has other special disputes resolution organs under its common law system, including the small claims tribunals, E-commerce disputes centre. What’s more, Singapore collaborates with other ASAEN countries to harmonize IP rights with international and regional organizations such as the Office of Harmonization of the Internal Market (OHIM), the European Union, the French National Office of Industrial Property, and IP Australia.
(ⅲ)Introduction of Judgments in Precedent Cases
A) P.R.C
In a landmark verdict on April 16, 1996 against Beijing JuRen Computer, the Beijing No.1 Intermediate Court delivered judgment in favor of the Business Software Alliance (BSA) upholding the plaintiffs' intellectual property rights and ordering the defendant to (a) publicly apologize to the plaintiff; (b) pay over RMB600,000 (US$70,000) in damages, including court costs and accounting costs; (c) pay additional fines directly to the court. The court also ordered the defendant to undertake not to infringe intellectual property rights in the future, and the law enforcement officials to confiscate all computers and software seized during the raid on the defendant's premises. In another case, the same court rendered a judgment against Beijing Giant Computer Co. for software copyright infringement. These were the first cases decided in favor of a US plaintiff in a Chinese court.
B) Singapore
A famous case concerning to software copyright is decided on 12th Nov,1996 between the appellants (Creative) and the respondents (Aztech). Because Aztech was proved to copy Creative’s code resource instruction, rewrite it in another source code language, turn the source code into objective code and copy computer program function as well with the help of Dr. Nichol’s powerfully technological test .Aztech had disassembled and copied a substantial portion of the firmware program contained in the microprocessor of Creative's Sound Blaster Card. Creative also claimed that their copyright in TEST.SBC (a program ancillary to and supplied with the Sound Blaster package) had been infringed when it was copied for the purpose of effecting assembly through the running of the DEBUG program. Having resolved the disputes of private study or public use by cyberspace, thinking carefully together with other evidence, the judge of the Court of Appeal supported the appellant’s claims in the end. Unfortunately, this case later resulted in the academic discussion of Copyright Infringement and caused the revising of the old Copyright Act, taking Internet and Cyberspace as a vital account.
Issue Ⅲ: Current Software Piracy in P.R.C and Singapore
With no exception, Asia is suffering from the most complicated problem of software piracy. There will likely be a long way to fight against it, demanding the social collaborations.
A) P.R.C
In China, by virtue of the increasing public awareness, the involvement of corrupt officials and the more difficulties to access to counterfeited computer software, software piracy is on the decline these years. Based on the latest statistic of 10 sample cities in Southern and Eastern provinces, the pirate US software copies decreased to 45% of the total market However, more ridiculously, a number of pirate peddlers and retailers have quit their existent work and turn to find other jobs instead.
In respect of the rapid development of Internet, software anti-piracy faces another challenge. As a result, those illegal copying and unauthorized use of copyrighted software, such as pre-installation with hardware and Internet downloading ranks the No.1 means of piracy. Focusing on a particularly problematic area for China-pirated software perhaps software piracy in China is not as pervasive as is normally thought. But, because of Chinese software companies’ juvenility, the biggest victims are not foreign software corporations who lose potential sales to piracy but are local Chinese software companies that are unable to sell enough software to prosper.
B) Singapore
According to the Global Competitiveness Report published by the World Economic Forum, Singapore’s annual international IP protection rank has improved consistently from 15th in 2001, to 12th in 2002, and now to 8th in 2003. In 2003, Singapore was rated the most IP protective country in Asia for the second time in two consecutive years by the Political & Economic Risk Consultancy (PERC). For further fight against software copyright piracy, the relevant authorities also have conducted a wide and comprehensive review of the IP laws which dovetailed with the implementation of obligations under the United States-Singapore Free Trade Agreement.
Issue Ⅳ: Market Potentiality in P.R.C and Singapore
A) P.R.C
Obviously, China is not only a large purchasing market but also a large potential labor and entrepreneurial market for software development and service. Transportation in China has turned to be more convenient. There grows up Express Transportation as Fedex, DHL, Ups, etc. To the bottom line, according to International Data Corporation (IDC), packaged software was an approximately US$135 Billion global industry in 1998 (growing 14% through 2002), while the global IT products/services industry reached nearly US$800 Billion (growing nearly 10% through 2002). Many software moguls have classified China as "perhaps the world's most interesting market." .Second, with huge market potentiality hidden in western regions and Chinese inclined economic policies, many foreign software companies positively take advantages of the western regions as the basis, and then spread to the whole country regularly, just like IBM, and Intel. Furthermore, the enactment and actual enforcement of new IPR laws and public embarrassment of pirating manufactures suggests that there’s a future for the software industry in China. Thinking of the old saying “the waters among giants have always been perilous for smaller firms” , the software industry is under the same condition. Smaller firms may be able to find creative service-based methods for entering the Chinese market, though it would certainly need to be a long-term investment. Over time, as China develops credible protections for IPR and begins penalizing violators, smaller foreign companies will be able to justify developing and promoting better products and services in the Chinese market.
B) Singapore
Singapore's strategic locations on major sea lanes and industrious population have given the country an economic importance in Southeast Asia disproportionate to its small size. Since independence in 1965,the Singapore Government has adopted a pro-business, pro-foreign investment to explore its economic statute in Asia. The economy rebounded in 2002, up to 2.2% and it is expected to expand by 8%-9% in 2004 with GDP up to $94 billion, driven by the growth in world electronics demand and in the economies of its major trading partners, the US, EU, China, and Japan. As far as I’m concerned, there’re a few reasons to support business in Singapore:(a) Best place to start a business for its No.1 statute in Asia;(b)Close proximity to Regional Markets;(c)Reasonable corporate tax;(d) Efficient and effective manpower;(e) Intellectual Property Protected;(f)Plug-and-Play Environment;(g) Resilient Economy;(h) High standard, comparatively low cost living;(i)Responsive Government;(j) Successful stories.
Finally, most US investors are attracted by special relation between Singapore and US, especially from the enforcement of FTA. From my research, I’ve learned two particular measures on FTA with US in Foreign Investment and Copyright Protection as follows:
For foreign investment, Singapore has firstly provided a strong and predictable legal framework for U.S. investors, including direct ownership by U.S. firms of companies, real estate, intellectual property rights, concessions, permits, and debt instruments in Singapore. Furthermore, Singapore treats U.S. investor’s equal rights as domestic investors, offering them due process rights, and recourse in the event of expropriations, that are consistent with U.S. legal principles and practice.
For copyright protection, Singapore has applied a high level of IPR protection similar to the standard under U.S. law at the beginning. Secondly, in order to accede to international Internet treaties and extend its term of protection for copyrighted works, Singapore began to establish the state-of-the-art protection for copyrights. Third, Singapore ensures that copyright owners maintain rights to temporary copies of their works that others have on their computers, which is vital for protecting software, and text from widespread unauthorized sharing over the Internet. It’s necessary to prohibit, in the absence of the copyright holder’s written request, the production of optical discs (CDs, DVDs, and CD-ROMs) that do not contain a source identification code.
IssueⅤ: Simple Comparisons between P.R.C and Singapore in Software Investment
As I mentioned in details before, I’d like to show some charters to inform you more accurate comprehension of software investment in Asia.
Table Ⅱ :
Software Copyright Protection in P.R.C and Singapore
IssuesP.R.CSingaporeRemarks
Legal SystemCivil LawCommon LawSingapore follows case law with more unpredictable situations and flexibility.
Legal Framework ExcellentExcellentBoth of the two countries signed the same international conventions and created specific domestic laws on Copyright
Legal
Implementation Not satisfied Needs further improvement GoodSingapore ranks No.1 in the copyright protection field of Asia twice. P.R.C is still regarded as one the cradles of piracy in spite of some achievements.
Anti-Piracy
Under Process
Under ProcessWith many anti-piracy organizations and movements, both P.R.C and Singapore are fighting against piracy. Comparatively speaking, Singapore received more effective results till now.
Piracy 70% per year20%-30%
Civil RemediesDamages, CompensationDamages,
CompensationTheir legal systems are different: P.R.C-Civil law( statute law) and Singapore-Common law(case law)
Criminal
OffencesFine
or 3-7years’
Imprisonment or bothFine or 5years’ Imprisonment or bothSingapore is supposed to enhance stricter punishment, extending the imprisonment period. But P.R.C is said to renew its Criminal Code with lighter punishment.
AdministrationPunishments:
Fine, custodyInjunctionsIt’s due to different legal systems. The common law countries always lacks of administrative punishments, but some interlocutory injunctions.
Table Ⅲ :
Foreign Business in P.R.C and Singapore (They are APEC members)
P.R.CSingaporeRemarks
Economy
Socialist Market ;
Developing countryCapitalism ;
Developed Country
Nonaligned PolicySocialist Market offers free trade opportunities under governmental macro controls while capitalism is based on free trade market
Business EnvironmentNo 1 in Asia ;
ASEAN member Improving with great potentiality Both of the two countries are building good business environment. On my opinion, the situation in Singapore is better at this moment.
Foreign Investment PolicyFTA with US;
Absolutely openmarket to the world; Limited open market under governmental macro controlsP.R.C has decided to open its market step by step, and give foreign investors more benefits in the future. Meanwhile, Singapore is the only Asia country to have made FTA with US.
Tax 30% 22%
MarketLarge
Most potential Small
Already explored P.R.C has the largest population up to 1.3 billion while Singapore only owes 2.8 million.
Social Economic Problems Local Protection;
Low GDP ;Difficulties in Economy Rebound mechanism More complicated society, serious local protection and low GDP about $400 harm Chinese software market.
Issue Ⅵ: Conclusion and Suggestions
In respect of those issues analyzed in the above paragraphs, it’s apparent to maintain the common senses and divergence between P.R.C and Singapore. But, whatever country a new software company chooses, there’re still some formal and likely steps to follow:
(ⅰ) Decide your first investment place This is the chief issue for you to decide first. Suppose you’d like to set up your company in P.R.C, indicated from TableⅠ, I think you’d like to locate your company in Shanghai to avoid the most software piracy of Guangdong Province. Because Shanghai is the most international city in P.R.C, ranks No.1 in economic field and serves as the open-window to the world. Later, having made your steady foundation, you could diffuse your eyesight to other regions in China. That may be a good way somewhat. For another thing, Singapore is just a centralized city, so there’s no use to care about the location.
(ⅱ) Decide which company models you’d like to take: Joint Venture or Foreign-owned The two models are quite different from each other both for the process of establishment, the legal protection and taxes. Sorry, I didn’t obtain any successful samples for small foreign-owned software companies in P.R.C yet. Maybe you will be the first one. As for Joint Venture, here is a triumphant experience from Microsoft. To conquer the most painful piracy, Microsoft has not only worked with local partners like China Mobile, China Unicom and Sinopec, while also signed strategic partnerships with three domestic software companies: CS&S, Powerise, and Digital China, to win customers in key industries where domestic companies are strong. On the consumers' side, it teamed up with almost all computer makers in China to bundle its operating systems with computers. Another advantage for joint venture is their familiarity with domestic market, policy, and the governmental support. So, I believe that you may benefit more by making a joint venture with local companies. No matter what decision there is, foreign companies need to obey the Foreign Trade Law. But for what I’ve known in Singapore, there’re two separate tax system, of which Foreign-owned company charges lower 5% than Joint Venture one. Many famous software firms like Bentley, AutoDesk ,Adobe and Symantec, etc, chose to enjoy foreign-owned type there, for tighter control, the whole management, less consumption, less complexity with domestic firms, and Singapore’s preferable tax.
（ⅲ）Register the Software Copyright Notwithstanding both Copyright Law and Computer Software Protection Rules don’t require the registration of copyright in P.R.C and Singapore, it’s indeed meaningful somehow. Basically, the official document by Copyright Registration Centre is the original evidence of your copyright. Once you receive a lawsuit on piracy or copyright disputes, you will be easier to proof your copyright. Besides, formal periodical report is a good advertisement of your products, so that, you could upgrade your software’s reputation more quickly. If you want to register your products in P.R.C and Singapore, you should prepare all the required materials ready, and then go to the Centre while submitting necessary fees. In fact, a few days later, you could see your product announcing in a bulletin both in paper and on the official website。
（iv）Use Special way to enter market “Defeat someone by a surprise action.” For large firms have own a major portion of current software market, new small entrants should change in respect of increasing Internet usage and related commercial practices. You can frequently distribute your programs through “virtual” methods. (from a distance over the Internet and through other alternatives to sales of physical CD-ROMs). It will bring lower costs of distribution while giving you more direct contact with the customer. In the end, you should have an excellent service system. The more satisfactory it is , the more benefits.
To sum up, having adopted “Dual Channels and Coordinated Operation” mechanism, characterized by both judicial trail and administrative protection, China and Singapore are good options for foreign software investors. With respect to distinct legal fundamentions, Singapore and China enjoy separate legislation and implementation of software copyright protection. No matter how different, they’re all willing to strengthen their copyright protection system and increase foreign software investments. Because every coin has two sides: advantages and disadvantages. As far as I’ve learned, your main concern is to find a country with better software copyright protection as well as satisfied investment environment. In other words, it is the focus that has a free market for capital. As a matter of fact, for the functions of APEC , P.R.C and Singapore has begun to share more and more business exchanges frequently. Therefore, every foreign company could still get profits from the regional business in the two countries. Even a company has located in Singapore, it doesn’t mean to give up Chinese market .I think there’s no contradiction to obtain the profits from the two countries at the same time. The core issue is which country would like to benefit you more as a new entrant. For the view of my thoughts, Singapore acts more likely as your better choice for its special relationship with US, better capital infrastructure, more liberal human resources practices, adequate power, a good fiber optic network, and last but not least, a well-educated population, Singapore already has the basic hardware infrastructure to support its own version of Silicon Valley. Finally, as its leading position in ASEAN, a company would probably get as many profits as possible from other economic regions for their non-barrier business.