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China Agrees To Update Intellectual Property Rules, Asks U.S. To Relax Export Controls

Government officials from both the United States and China on Wednesday said that they had made progress on several key issues that had been on the table during their trade negotiations in the past couple of days in Washington, D.C.



China's Vice Premier Wang Qishan at the 2010 JCCT meeting.

Government officials from both the United States and China on Wednesday said that they had made progress on several key issues that had been on the table during their trade negotiations in the past couple of days in Washington, D.C.

China addressed many of the U.S. business community’s concerns about its government procurement policies favoring local companies, prohibited subsidies to Chinese companies and government software purchasing practices.

The country’s officials also pledged to not enact policies that discriminate against U.S. companies and to make its burgeoning smart grid and 3G cellular markets more open.

According to the U.S. Commerce Department, China plans on investing $10 billion annually between 2011 and 2020 to build a national smart grid, and an additional $590 billion to build an electric power grid.

“The work we’ve done today will benefit both China and the United States.  We have agreed to a variety of measures that will make America’s businesses more competitive in the global marketplace by China not discriminating against American companies selling everything from industrial machinery and telecom devices to equipment for large scale wind farms,” said U.S. Commerce Department Secretary Gary Locke in his closing statement to the 21st annual U.S.-China Joint Commission on Commerce and Trade meeting.

“On the indigenous innovation front, China will revise its major equipment catalogue in 2011 and publish a draft for public comment to ensure there is no discrimination against foreign suppliers.” he added.

“China agreed to a series of intellectual property rights commitments that will protect American jobs,” said U.S. Trade Representative Ron Kirk in a press statement. We expect to see concrete and measurable results, including increased purchase and use of legal software, steps to eradicate the piracy of electronic journals, more effective rules for addressing internet piracy, and a crack down on landlords who rent space to counterfeiters in China.”

Commerce issued a statement saying that the Chinese government has agreed to establish a software asset management system for government agencies to track implementations of legitimate software. The Chinese officials also said that they would promote the use of licensed software in 30 major Chinese state-owned enterprises. Both sides are scheduled to discuss “before the middle of January,” verification and compliance procedures.

Locke and Kirk led the U.S. delegation in its talks with China, while China’s Vice Premier Wang Qishan led the Chinese delegation.

Wang said that the process had yielded “positive outcomes.”

“The two sides, through candid exchanges and dialogues, have enhanced mutual understanding and trust and laid the groundwork for intensive, in-depth, close economic cooperation between the two countries,” Wang said in a Xinhua news article.

The Chinese officials also pressed U.S. government officials on export controls.

“In our efforts to increase our imports, we very much hope that those countries still having a trade deficit vis-a-vis China could lift or relax export controls towards China,” the Agence-France Presse quoted the Chinese Commerce Minsister Chen Deming as saying.

For its part, the U.S. Commerce Department said that the Chinese government is getting its judiciary system to conduct a study on drafting judiciary interpretations on internet intermediary liability.

“The United States and China have agreed to actively support this process in order to obtain the early completion of a judicial interpretation that will make clear that those who facilitate online infringement will be equally liable for such infringement,” according to a Commerce Department statement.

Addressing a long-standing concern of the U.S. business community, the two sides also formally agreed that neither will “adopt or maintain measures that make the location or the development or ownership of intellectual property a direct or indirect condition for eligibility for government procurement preferences for products and services.”

The U.S.-Business Council, which has been vocal on many of these issues, praised the trade negotiators for their work.

“We are pleased that there was movement on some of the key concerns raised by USCBC and our member companies,” USCBC President John Frisbie said in a press statement “It is critically important to show progress in advance of the expected state visit of President Hu Jintao in January.”

“The JCCT needs to be sized to fit today’s much larger and more complex commercial relationship,” he added. “It needs to be effective throughout the year at reducing tensions and solving mutual problems, as well as to show that sanctions and legislation are the wrong approach. I know the US government supports this objective, and we hope today’s progress shows that China also sees the JCCT as an effective vehicle to address the challenges we face.”

On the issue of export controls, though the Obama administration may want to loosen them, it’s doubtful that Congress will allow it to do so, said Denis Simon, a China expert and professor of international relations at Penn State University.

He also doubts that the expected “trading bonanza” as a result of the change will materialize, he said, since there’s still a lot of competition in those markets from international companies.

Importantly, both countries also agreed to re-examine how they calculate their trade statistics. Trade experts have become concerned with existing methodologies because they don’t reflect the complex realities of how modern high-tech products are created part by part, in regions all around the world.

Editor’s Note: The Intellectual Property Breakfast Club will hold a February 8, 2011 breakfast panel at Clyde’s in downtown Washington DC on China and IP. To register for this FREE event, click here.

Join us for a stimulating, high-level discussion!

2010 Jcct Fact Sheet

Broadband Breakfast is a decade-old news organization based in Washington that is building a community of interest around broadband policy and internet technology, with a particular focus on better broadband infrastructure, the politics of privacy and the regulation of social media. Learn more about Broadband Breakfast.


Public Knowledge Celebrates 20 Years of Helping Congress Get a Clue on Digital Rights



Screenshot of Gigi Sohn from Public Knowledge's 20th anniversary event

February 27, 2021 – The non-profit advocacy group Public Knowledge celebrated its twentieth anniversary year in a Monday event revolving around the issues that the group has made its hallmark: Copyright, open standards and other digital rights issues.

Group Founder Gigi Sohn, now a Benton Institute for Broadband and Society senior fellow and public advocate, said that through her professional relationship with Laurie Racine, now president of Racine Strategy, that she became “appointed and anointed” to help start the interest group.

Together with David Bollier, who also had worked on public interest projects in broadcast media with Sohn, and is now director of Reinventing the Commons program at the Schumacher Center for a New Economics, the two cofounded a small and scrappy Public Knowledge that has become a non-profit powerhouse.

The secret sauce? Timing, which couldn’t have been better, said Sohn. Being given free office space at DuPont Circle at the New America Foundation by Steve Clemmons and the late Ted Halstead, then head of the foundation, was instrumental in Public Knowledge’s launch.

The cofounders met with major challenges, Sohn and others said. The nationwide tragedy of September 11, 2001, occurred weeks after its official founding. The group continued their advocacy of what was then more commonly known as “open source,” a related grandparent to the new “net neutrality” of today, she said.

In the aftermath of September 11, a bill by the late Sen. Ernest “Fritz” Hollings, D-S.C., demonstrated a bid by large copyright interest to force technology companies to effectively be the copyright police. Additional copyright maximalist measures we launched almost every month, she said.

Public Knowledge grew into something larger than was probably imagined by the three co-founders. Still, they shared setbacks and losses that accompanied their successes and wins.

“We would form alliances with anybody, which meant that sometimes we sided with internet service providers [on issues like copyright] and sometimes we were against them [on issues like telecom],” said Sohn. An ingredient in the interest group’s success was its desire to work with everyone.

Congress didn’t have a clue on digital rights

What drove the trio together was a shared view that “Congress had no vision for the future of the internet,” explained Sohn.

Much of our early work was spend explaining how digitation works to Congress, she said. The 2000s were a time of great activity and massive growth in the digital industry and lawmakers at the Hill were not acquainted well with screens, computers, and the internet. They took on the role of explaining to members of Congress what the interests of their constituents were when it came to digitization.

Public Knowledge helped popularize digital issues and by “walking [digital information] across the street to [Capitol Hill] at the time created an operational reality with digitization,” said Bollier.

Racine remarked about the influence Linux software maker Red Hat had during its 2002 initial public offering. She said the founders of Red Hat pushed open source beyond a business model and into a philosophy in ways that hadn’t been done before.

During the early days of Public Knowledge, all sorts of legacy tech was being rolled out. Apple’s iTunes, Windows XP, and the first Xbox launched. Nokia and Sony were the leaders in cellphones at the time, augmenting the rise of technology in the coming digital age.

Racine said consumers needed someone in Washington who could represent their interests amid the new software and hardware and embrace the idea of open source technologies for the future.

Also speaking at the event was Public Knowledge CEO Chris Lewis, who said Public Knowledge was at the forefront of new technology issues as it was already holding 3D printing symposiums before Congress, something totally unfamiliar at the time.

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In Google v. Oracle, Supreme Court Hears Landmark Fair Use Case on Software Copyright



Photo of Tom Goldstein from the Peabody Award used with permission

October 12, 2020 – The Supreme Court on Wednesday publicly struggled with the copyrightability of software in a uniquely contested case between Google and Oracle, the outcome of which could play a significant role in the future of software development in the United States.

The oral arguments were the culmination of a battle that started 10 years ago, when tech company Oracle accused Google of illegally copying its code. Oracle owns the copyright to the Java application programming interface that Google utilized to establish a new mobile operating system.

The company has sued Google for more than $9 billion in damages.

Yet Google claimed a “fair use” defense to its copying. Google copied less than 1 percent of the Java code. Even though the law generally treats computer programs as copyrightable, Google’s attorney before the Supreme Court, Thomas Goldstein, said that by adapting Oracle’s code to serve a different purpose, Google’s use was “transformational,” and entitled to fair use protections.

Goldstein said that this form of unlicensed copying is completely standard in software, and saves developers time and lowers barriers to innovation.

He referenced a famous Supreme Court precedent about public domain works, Baker v. Selden, which in 1880 declared that once information is published to the public, the public has a right to use it.

“Google had the right to do this,” said Goldstein.

Still, Oracle attorney Joshua Rosenkranz asserted that the Java code is an expressive work eligible for copyright protections. Rosenkranz further argued that Google’s use of the code was not transformational.

Justice Sonia Sotomayor appeared to suggest that jurors in the lower court case properly found Google’s use to be transformational because it took the APIs from a desktop environment to smartphones.

“Interfaces have been reused for decades,” said Goldstein. Google had to reuse Oracle’s code to respond to interoperability demands.

“It has always been the understanding that this purely functional, non-creative code that is essentially the glue that keeps computer programs together could be reused, and it would upend that world to rule the other way,” he said.

Supreme Court observers said that the high court appeared leaning toward upholding the 2016 jury verdict vindicating Google’s fair use defense.

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Fair Use is Essential But its Enforcement is Broken, Says Senate Intellectual Property Subcommittee



Screenshot of Grammy-winning recording artist Yolanda Adams from the hearing

July 28, 2020 — “Fair use” is an essential doctrine of copyright law that is unevenly applied, said participants in a Senate Intellectual Property Subcommittee hearing Tuesday.

The hearing, “How Does the DMCA Contemplate Limitations and Exceptions Like Fair Use,” saw participants discuss whether the Digital Millennium Copyright Act still permits fair uses of copyrighted content that would be otherwise infringing.

The DMCA, passed in 1998, criminalizes the manufacture, sale or other distribution of technologies designed to decrypt encoded copyrighted material. This ban on anti-circumvention tools does not appear to account for fair use.

The fair use exception to copyright law allows the republication or redistribution of copyrighted works for commentary, criticism or educational purposes without having to obtain permission from the copyright holder.

However, Joseph Gratz, partner at Durie Tangri, said that fair use often clearly applies but is not enforced, leaving users of the legally obtained content to deal with automated content censors.

“Fair use depends on context, and machines can’t consider context,” he said. “A video, for example, that incidentally captures a song playing in the background at a political rally or a protest is clearly fair use but may be detected by an automated filter.”

When an automated filter detects a song on a platform like YouTube, it redirects advertising revenue from the creator of the video to the creator of the song, often erroneously.

Rick Beato, who owns a music education YouTube channel with over one-and-a-half million subscribers, said that he does not receive ad revenue from hundreds of his videos.

“One of my recent videos called ‘The Mixolydian Mode’ was manually claimed by Sony ATV because I played ten seconds of a Beatles song on my acoustic guitar to demonstrate how the melody is derived from the scale,” he said. “This is an obvious example of fair use, I would argue.”

Grammy-winning recording artist Yolanda Adams testified that she sees the problems of fair use employment as about more than simply receiving money.

“As a gospel artist, I’m not just an entertainer,” she said. “I see my mission as using my gift to spread the gospel — so for me, fair use is not just about money. It’s about access.”

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