Hornblowers
April 19, 2010 by Chinatex
China must have the loudest horns in the world. Now, I don’t know much about noise levels and decibals and other technical things like that, but, I do know what i hear – when I can hear. I’ve been thinking about a topic for my next blawg post for quite awhile and while I have had a couple of great ideas, I just couldn’t figure it out. You know that Old Chinatex likes to write about the law in China and other interesting stuff like that, but, if you read my blawg you also know that I like to write about China and the customs and habits which can help us all understand or tolerate the way things work over here. If you want to go to a blog site everyday and read about changes to the law in China and other intellectual stuff, I recommend you check out the award winning China Law Blog at http://www.chinalawblog.com/ which is written by Dan Harris and his associates. If you want to read interesting stories and anecdotes that should be useful and might be funny, check out my blawg at http://chntxlaw.com/blog/
So, I was thinking about horns in China and for those of you who have been here, you know that horns are not used in the same way as they are in the West. In fact, if someone beeped their horn in the same angry, prolonged, and aggressive way as they do here in China, in Los Angles, they would most certainly be shot. They don’t just give you a friendly toot to remind you that the light is now green, they lay on the mother like their life depended upon it which then starts a chain reaction of angry beepers all laying on the loudest horns on the planet.
I’m sure that when they design and build cars in China for sale on the Domestic market, whether it’s Ford, or Mercedes, or BMW, or Geely, they have a meeting to discuss horns and there is a typical Chinese automotive engineer type with the short sleeve white shirt, black pants with white socks and overly shiny black shoes that says: ”we gotta make these horns extra loud so that they Chinese will hear them.” The response inevitably is “how much louder” and the engineer says “what about 100% louder, because we are China and the Middle Kingdom and the biggest and best country in the world and we should have the loudest horns.” The decision makers obviously not wanting to lose their jobs by allowing wimpy horns or lose face to the rest of the automotive industry all agree and the horn blowing torture on Old Chinatex begins.
So I was thinking, as they create their own traffic jams by all trying to jump ahead of each other on the roads, why the Chinese don’t just wait for the light to change, or the person rudely stopped in the middle of the road talking on their cell phone to move on, or the taxi letting off it’s passengers to complete their transaction (which usually only takes about 10 seconds), or any of the million other reasons why they beep their horns, “why do they really lay on the horn”. It doesn’t seem that it works or the person whom is the brunt of the horn blowing cares, it only annoys the hell out of me. I am sitting in my office on the 12th floor of a premier office building in the Shenzhen CBD and I hear a cacophony of the loudest horns ever invented and the same goes for my apartment on the 32nd floor. Mosquitoes don’t even make it up to the 32nd floor, how the hell can the horns sound so loud and reach my ears while I am trying to sleep. I guess the simple answer is they just don’t give a hoot about anything else other than what is impacting their little world at that time and I wholeheartedly believe that this mentality is prevalent in everything they do. Now I am not talking about everyone, of course there are considerate and inconsiderate people all over the world, it just seems like with one and a half billion people that there are plenty here that just don’t give a hoot.
So just remember, when you are dealing with a factory owner or looking to invest in or acquire an existing business or conducting any other transaction and you believe that the person(s) you are dealing with “likes you” and “I can trust them” (Old Chinatex has heard it all) the way they lay on that horn.
As always, Yeeha!! Chinatex
Customs to the rescue
April 19, 2010 by Chinatex
Fake products in China are nothing new and I have been advising clients on protecting Intellectual Property matters for many years here. As I wrote in my previous blawg “Misconceptions about China” http://chntxlaw.com/2010/03/misconceptions-about-china/ “as more Chinese companies file for IP protection in China and in the West, and they have an expectation of enforcement and a rule of law, those same principles will extend to foreign companies and individuals who apply for IP protection in China.” I thought this below article was interesting and while you can never be quite sure if the numbers are accurate, I can assure you from personal experience that Chinese Customs will enforce the IP rights of those who have IP – this means Patents and Trademarks that have been filed in China. So, the best thing you can do is file often and file early as the first to file has the IP in China and then file your IP rights with Customs and establish a good relationship with Customs (you would be surprised how far a nice sincere lunch will go). So, I hope you learn something from the below article and as always, Yeeha! Chinatex.
Fake goods in mail up 7-fold
By WANG YAN (China Daily) Updated: 2010-04-20 08:24
http://www.chinadaily.com.cn/china/2010-04/20/content_9750480.htm
Drastic increase due to rapid development of e-business: Customs
|
BEIJING — The country’s customs officials seized as many as 37,000 pieces of mails and express mails containing counterfeit items from June to December of last year, seven times the figure in the same period of 2008, the General Administration of Customs (GAC) said on Monday. |
On July 20, 2009, Beijing Customs stopped a batch of outbound express mail for random inspection.
Each of the 75 boxes, with “digital accessories and parts, digital cassettes and electronic accessories” written on them, weighed 30 kg. The parcels were headed to 10 countries.
On opening the boxes, officers found more than 50,000 mobile phones, SD cards, flash drives and memory banks involving 12 brand names.
The smuggling bid opened the customs department’s eyes to the seriousness of the infringement of intellectual property rights in the country.
The case is now been transferred to the public security department for further investigation.
The drastic increase in the practice is due to the development of e-business, said Meng Yang, director of the policy and regulations department of GAC, at a press conference in Beijing.
“Intellectual property protection in export trade faces new threats as e-business develops. With online trading gaining popularity, we’re seeing more and more cases where tort goods are shipped through mail, express mail, or carried by individual passengers across the border,” Meng said.
But she said the department would not regard it as an infringement of property rights if tort goods carried by passengers were within “range of reasonable self-use”.
Zhao Fudi, spokesperson for the GAC, said mails and express mails had become a major channel in the cross-border circulation of tort goods. Zhao said the GAC launched a special campaign from July to December last year, where inspection was focused on mail and express mail.
“The number of batches of goods seized through mails and express mail in 2009 has jumped by 738 percent compared with 2008. “The number of items has increased by 28 percent, and the total value by 402 percent,” he said. China’s e-business transactions reached 530 million yuan ($77.6 million) in 2009, an annual increase of 248.7 percent, iResearch said in its report on Thursday.
It said China’s e-business market is stepping into an explosively increasing stage. “In the next two to three years, the country’s e-business customers will maintain an annual growth rate of 70 percent. Scales of real goods will reach an annual increase of up to 400 percent,” the report said.
According to the GAC data, a total of 280 million items were seized last year because of intellectual property infringement, where 99.9 percent were exporting goods and 99 percent were trademark infringement. Tobacco products, light industrial products, cosmetic and care products, hardware and mechanical products, and clothes topped the list of goods categories in terms of the number of items seized in 2009. Among the five, only tobacco products saw a decrease in number compared with last year, from 560 million in 2008 to 180 million in 2009.
Misconceptions about China
March 12, 2010 by Chinatex
My mother thinks that people in China still ride around on bicycles wearing those green army suits and green hats with the red star in the middle. While there are still a lot of bicycles, especially in Beijing and Shanghai – where they are proud to wear their silk pajamas while riding their bicycles and smoking at the same time – there are not many people wearing those green outfits. In fact, to most people in the U.S., China would be unrecognizable from what they remember in the news clips from the last few decades. There are many misconceptions about China and Old Chinatex is here to clear up a big one.
I have had several clients recently tell me that their lawyer from _______ (insert the country here cause they are all the same) told them that there “wasn’t any need to file a trademark or patent application in China because China doesn’t recognize intellectual property rights anyway and people still ride around on bicycles wearing those green army suits and hats” (I added that part). This is a big misconception that could potentially cost someone a lot of money.
First of all, China has something called the State Intellectual Property Office of the Peoples Republic of China “SIPO”. They even have a website if you want to pay them a visit: http://www.sipo.gov.cn and if you can read Chinese you would understand what they are saying. If you can’t read Chinese, they have an English version at: http://www.sipo.gov.cn/sipo_English/ From the website you can see they are legitimate, SIPO is similar to the US Patent and Trademark Office (USPTO), and takes Intellectual Property filing and enforcement very seriously.
Secondly, as more Chinese companies file for IP protection in China and in the West, and they have an expectation of enforcement and a rule of law, those same principles will extend to foreign companies and individuals who apply for IP protection in China. I have personally watched IP filing and protection improve dramatically in the past 7 years and most of the problems in enforcing intellectual property rights arise when foreign companies have not filed in China.
Thirdly, China does not recognize US and other patents in the same way as other countries. China recognizes Chinese patents filed with the SIPO and China is a first to file jurisdiction. This means the first person to file usually gets the IP rights. I say usually because there are circumstances where internationally recognized brands have spent a lot of money to enforce their trademark rights from people who have filed first in China or similarly they have spent a lot of money to buy the rights from those same clever individuals who filed first.
Finally, filing Trademark and Patent applications in China is relatively straight forward and not prohibitively expensive. In fact, the costs compare with those in the U.S. and are lower than in the E.U. When filed and approved by the SIPO you then have Intellectual Property rights and an asset in the IP that you didn’t have in China previous to filing. The certificate then allows you to use expanding legal channels to enforce your IP.
So, why wouldn’t you file!!!! Because your lawyer, who has never been to China, told you it wouldn’t make a difference. While Old Chinatex doesn’t make a bunch of money on helping clients file Trademarks and Patents in China, it is a service we offer because we simply wouldn’t be doing everything we can to help our clients navigate the business jungle in China – if we didn’t.
For more information on Intellectual Property protection in China please contact Chinatex or his staff at info@chntxlaw.com
As always, yeeha! Chinatex
Tastes like chicken
February 1, 2010 by Chinatex
Y’all know that Chinatex is from Texas. Right down near the border in San Antone. Well, in Texas we like dogs and we have dogs everywhere. In fact, dogs are mans’ best friend. I don’t really agree with that one, but, i did have an old hound dog named Snoopy when i was a kid and he was a good old dog til he got run over by a car. So when i tell my friends back home that they really do eat dogs over here they can’t believe it and say things like “gross”, “that’s terrible”, “what does it taste like?” etc…. Then i have to explain that they are not eating the domestic dogs, that there actually is a dog farm, or lot’s of em, where they raise one kind of dog – just like cows – to be slaughtered and eaten. In Texas, we don’t believe in mistreating our animals, especially our dogs but the thought of raising dogs like chickens or cows or goats or sheep to be eaten doesn’t really bother me too much. In fact, Old Chinatex has eaten a little fried dog meat and it wasn’t so bad – although i don’t prefer it over good old Texas beef or barbecue. That leads me to my point. Y’all know that sometimes i can’t help but write about the interesting stuff that goes on over here in China, rather than boring legal mumbo jumbo. However, when a new law or proposed law is going to come out, i’m one of the first to let y’all know so that you can adjust your business accordingly. So, i was reading the paper today scanning for interesting information to share with y’all when i came across the following: ”Dog and cat meat – age old delicacies in China – could be off the menu in the food-loving nation under its first law against animal cruelty”. ”People who eat either animal, both of which are viewed as promoting bodily warmth” (i can think of other more pleasant things that promote bodily warmth), “could face fines of up to 5,000 RMB (US $730) and up to 15 days in jail if the law is passed”. I’ll keep you posted on the progress of this law, cause i wouldn’t want any of you having to call me from the local jail for mistakenly eating some dog meat. By the way, it doesn’t taste like chicken. As always, yeeha!! Chinatex
Entrepreneur of the Year
January 31, 2010 by Chinatex
Part of the fun of living and working here in this huge concrete jungle is that Old Chinatex gets to be a part of a lot of really cool stuff. It seems that every week and possibly every day, there is something new to participate in, not just as a bystander or paying customer but as an advisor, counsel or just a friend. Since I first came here 7 years ago and looked out my hotel window in the small city of Dongguan and counted 80 building cranes – just on one side of the city – I have seen similar and tremendous growth everywhere I look. While as an advisor to individuals, small businesses and multi-national corporations I most often find myself sorting out problems with doing business here in China as not enough people come to see me prior to entering this market. It can cloud your perspective and even result in the “I’m done with China” syndrome which affects most of us on a monthly basis. However, since I counted the 80 cranes, one thing has not changed – the Chinese peoples’ propensity to absolutely amaze me with the things they are capable of doing and achieving. I often tell people that Shenzhen, the small city of 15 million people feels like Silicon Valley during the late 90’s, except the scale is much larger and it seems to be built on lasting and fundamental economic principles (not carelessly funded by VC and hedge money) without a bubble in sight. For those of you that have not been here or are planning to come here, it is unbelievable the amount of pure entrepreneurial energy that courses through the veins of this city – on an almost 24 hour cycle.
Yesterday, I was honored to be invited to witness the launching of my friend Jame Guo’s new line of sailing yachts. Jame, a veteran of the components business and former resident of the city that claims to never sleep, was looking to have a sailboat made a few years ago. He went all through China looking at the supposedly best and most well funded shipyards and found an opportunity. While overseas joint ventures were bleeding money and producing substandard quality and local shipyards were just not experienced enough to handle the larger boats, Jame decided to build one by himself. Necessity it seems is still the mother of invention and in the sailing yacht business in China Jame Guo is the father. After a painful and hard working year spent in a small trailer outside of his factory, Jame launched the first Farnova 48′ yesterday. 
Picked it right up off the pier and carefully craned it into the waters of the South China sea. Chinese style with champagne and fireworks and a large crew of workers intent on protecting the hull from being pushed into the sea wall. So, here is a man who has been very successful in electronic components, he didn’t need to spend a year in a trailer and struggle with things like redesigning (and building) the below deck interior more than 4 times – until he got it right. He could of retired and invested his money in U.S treasuries (maybe not) and sailed off into the sunset. But, Jame 
like so many entrepreneurs in China, are driving the recovery in Asia and doing exactly what we used to do in the west. Invent, innovate, build and take calculated risks. Jame’s new Farnova 48′ is a beautiful and well made cruising sailboat and he has a dozen more lined up in his factory waiting to set sail. For more info you can check out his website: http://www.teammarine.cn/
I cannot explain how exciting it was to watch this man and his team realize a hard fought dream. I have seen teams win championships in different sports and many other similar successes but few have been as rewarding for me as joining Jame yesterday at the boat launch. As we countdown the days until Chinese New Year, one thing is certain – China will take a break to breath and relax and then afterwards hold on world because they are going to come out of the gates roaring in the year of the Tiger. As always, yeeha!! Chinatex
Lunch
November 15, 2009 by Chinatex
I know this is supposed to be a legal blog and you might come to this site looking for intelligent legal dissertation, up to date changes in the dynamic Chinese legal system or some free advice, and while i do that when it’s real important, this is more fun. So, I decided to begin posting stories about my experiences (and my clients) which are often unbelievable but always contain bits of wisdom, like those mystery meat dumplings sold on the street corners in China. They will be posted under the heading Jungle Lessons and i hope you enjoy them as much as i do writing them. This is the first one.
The Chinese have a traditional way of greeting each other. They say “chi fan le mei you?” This means, “have you eaten?” They also say hello and how are you and long time no see and stuff like that, but, the traditional way to greet someone is by asking if they have eaten yet. This is unusual to say the least and often misunderstood by foreigners in China. There are many theories of where the greeting began and i won’t go into those – the most important thing is to understand how important eating is in the Chinese culture and psyche.
Many years ago, when i had been here for about a year and thought i knew a lot about China, i was driving through a district of Shenzhen (a city with 12 million + people) and it came to me why eating was everything in China. It was about noon and we were weaving our way through the throngs of people leaving their offices/factories, and the cars, taxi’s, buses, three wheeled gasoline powered tricycle things, and every other contraption known to mankind. Now, i wasn’t driving but i was in the passenger seat and my driver was in 5th gear going 30km per hour and the car was shaking and i kept wanting to reach over and down shift for him but i refrained and gritted my teeth until they started to disintegrate. It didn’t help that i hadn’t had anything to eat since that awful cup of Chinese hotel coffee and greasy fried bread stick that i had earlier that morning. So, i tried to get into that Zen state that has gotten me through some of the most uncomfortable situations and i looked out the window at the chaos that was unfolding around me.
Right when i was concentrating on my breathing, i looked down the road and thought i saw what looked like a buck naked cave man eating a coconut. ”I have taken this Zen thing to a completely new level” i thought to myself and looked away. ”Can’t be a naked cave man, surely someone would have taken him away or thrown a shawl around him or given him a fig leaf.” I looked back in the same direction just to see if i might have not imagined this and there he was, a completely naked cave man eating a coconut. He looked exactly like Tom Hanks in that movie where he is stranded on the island with the volleyball – not the fat Tom Hanks but the one after he had been there for a few years. As we approached, he was on the area that in most countries would be a sidewalk, but in China is actually a labyrinth of open manholes, electric scooters carrying propane, rickshaws loaded down with styrofoam, dangling high tension wires and an assortment of other wonders and dangers. He was indeed naked and brown, obviously from not wearing any clothes, and his hair was matted and dreadlocked, obviously from not having a haircut, and he was eating what looked like a coconut or some other thing with a hemplike exterior. Now in Borneo or Sumatra i wouldn’t have been surprised to see this phenomenon, but in Shenzhen China at noon on a busy work day – i was shocked.
The cave man walked through the crowd and no one even paid any attention to him. He just leisurely strolled along and the Chinese purposefully moved on their way to somewhere without noticing him. I wondered what they were thinking: “naked man – hmm”", “naked man – gotta get back to work”, “naked mand – time to eat”, ”that coconut looks good – i’m hungry”, “what’s a cave man?”. I asked the driver about the man and he said, “what naked man?” I said, “that one right there in front of the car” and he said oh, and i’ll never forget what he said next and you shouldn’t either because it’s the moral of this story, he said “where do you want to eat?” Well, i was hungry and i have been to many of the big cities in the world, but i have never seen a naked cave man walking down the street eating a coconut and i just couldn’t think about food right now. I said, “that man is naked, don’t the police or someone come to take him away?” He responded, “maybe he is crazy, now do you want Chinese food or McDonalds?”
I couldn’t let it go that quickly so i called a Chinese friend and told him what i had just seen, he said “he’s probably crazy, do you want to eat hotpot tonight?” Unbelievable is all i could think and i said i would think about it and call him later. We had passed the cave man and were rolling along in 5th gear when it hit me. They are obsessed with eating. Now i don’t know where it came from and don’t really concern myself with the roots of their hunger obsession, but i just then realized that eating consumes their mind and probably gets in the way of otherwise productive thought.
Having been in China for 7 years, it’s no longer a surprise to me when someone asks “have you eaten?” I now respond with a yes or no and ask them if they have eaten. I like to eat, especially big old Texas hamburgers and a good pizza and even some Chinese food, but it doesn’t consume most of my waking thoughts. So i started to think about other things like productivity and creativity and rationality and how they apply in China and i keep coming back to the cave man and the people around him that were singly focused on something other than his being naked walking down the city street. It has to be food. They are always thinking about food.
I haven’t done any research with focus groups or control groups or any groups for that matter, but i have looked around and observed and i have reached the non scientific conclusion that the Chinese are more concerned about eating than anything else. Even their obsession with money and saving face and smoking is far outweighed by eating. For those of us China veterans we know that trying to accomplish anything from 11:00 a.m. until 2 is next to impossible. I have even suggested that if anyone thinks about attacking China, they ought to do it during lunch because the Chinese will probably think, “look at that we are being attacked and overrun by aliens, where do you want to eat?” Note to aliens, I have given you this pearl of wisdom without sending you a bill, please wait until i am out of the country.
So, if you are thinking about doing business in this huge and burgeoning market or have done business here for years, you should understand the customs and psyche of the people who are and control this market. While they can do good work and are industrious and hard working and entrepreneurial and lots of other things that i won’t mention here, they are often distracted by some genetically coded obsession with eating. Plan your meetings accordingly, schedule factory/supplier/partner meetings first thing in the morning or mid afternoon (after they have eaten and slept). Bring candy and pass it out if you see their blood sugar meters dropping into the “your head looks like a bowl of noodles” zone. Don’t get frustrated, instead try and understand the things that make them tick and adapt to their ways, which you will never change in 5,000 years and i believe you will be more successful in doing business in China.
You won’t believe this part, but several weeks later we were driving through a completely different district in Shenzhen and i had reached another conclusion that the other gears didn’t actually work and that’s why we were in 5th all the time and who did we see – yes, the caveman. Naked as a newborn (with brown skin and pubic hair and dreadlocks) and this time he was eating a banana! A banana!! Even Hollywood couldn’t script this. Scene 2. Naked cave man walking down the street in Borneo, no let’s make it Shenzhen and he’s eating dumplings or noodles, no a banana this way it looks like he pulled it right off the tree. You’d think i wouldn’t be shocked but i was and i got excited and said to the driver, “look at that naked man he is the same one we saw two weeks ago isn’t he?” He said, “what naked man, we never saw a naked man………… are you hungry, where do you want to eat?”
As always, yee ha!! Chinatex
Badmitten
November 9, 2009 by Chinatex
Of course i know i spelled it incorrectly, but the first time i spelled it i didn’t even know that it was spelled badminton. Doesn’t make much sense as in Texas we always called it “badmitten”. In fact we only played this game once every few years at family reunions and picnics and usually beer was involved and it could get ugly as some inebriated and not so athletic relative fell on his big fat behind while trying to smash the birdie. That’s what we called em – birdies, we didn’t even know it’s called a shuttlecock and if we did we probably we would have laughed so hard at the name we wouldn’t have even got to playing.
That brings me to the point of this blawg post. Old Chinatex tried his hand at Badminton tonight and boy was it an awakening. I was going to write about one of my favorite subjects which is the hiring of chinese/taiwanese/hong kong managers by western companies and the company executive management trusting them to give legal advice just because they studied somewhere in the U.S. or the U.K. and speak good English. I realized that i didn’t need to waste my time when Old Dan Harris over at Harris & Moure took the words right out of Old Chinatex’s mind and posted it on his award winning China Law Blog. This gave me some time to try my hand at badmitten. Here is the link to the blog post.http://www.chinalawblog.com/2009/11/first_lets_kill_all_the_nonchi.html
Now back to badmitten! I now have an acute understanding why the Chinese are infatuated with this game. If you have ever watched them play it seems they get an inordinate amount of joy out of smashing that little birdie. I’m talking really smashing it and they get even more joy when their opponent or just the other person smashing it back to them, misses it. I can only imagine that they are thinking about their boss or husband or coworker or professor or who knows when they take aim at that little rubber head on the birdie and give it a resounding whack. So, tonight i played and thought about the rude taxi drivers, the clients who don’t listen to me and hire crooked managers anyway and say “but i trust him, he went to the University of Wisconsin”, and the bad service at restaurants and the noisy people in the elevators talking on their cell phones and a plethora of other unmentionables. Every time i took a swipe at that little birdie i imagined one of their faces – now i know why it is their national sport. With 1.6 billion of them, they have to take their frustrations out on something and those poor little birdies are the perfect foils for their anger.
So, if you hire a manager who went to the University of Wisconsin or some other school and professes to be an expert on China and international law and you trust him and then later you realize that Dan Harris and Old Chinatex were right, i suggest you take up Badmitten. As always, yeeha!! Chinatex
The IP shoe is on the Google foot
October 20, 2009 by Chinatex
In the country known for overt violations of intellectual property and where copying is not really considered unethical or taboo, it seems that the shoe of Intellectual Property is now on the other foot. The Chinese government has made a formal complaint on behalf of its writers and authors to end unauthorized copying and online publication of Chinese literary works – by Google. It seems that Google thought they could scan thousands of Chinese books into its searchable database without seeking permission or compensating the copyright owner. The recent article from the China Daily at: http://www.chinadaily.com.cn/china/2009-10/21/content_8822335.htm and also below with my comments. The tables are indeed turning. As always yeeha!! Chinatex
Google violating copyrights, authors say
By Xie Yu (China Daily) Updated: 2009-10-21 07:49
Search engine giant Google is facing accusations that its employees, illegally and without permission, scanned Chinese writers’ works into its digital library, Google Books.
“Google’s infringement to Chinese authors is very severe,” said Zhang Hongbo, deputy director-general of China Written Works Copyright Society (CWWCS), the only domestic administration of written works copyrights.
Chinese government departments, such as the National Copyright Administration, will push the US government to handle the issue properly, considering Google is such a major force in the online world and has acted arbitrarily in this issue, he said. According to a rough estimate from CWWCS, nearly 18,000 books from 570 Chinese writers have been scanned by Google and included in its digital library, which is only open to netizens within the US borders. This was done without informing or paying most of the writers.
“So far, no writer we reached said he or she has authorized Google to do the scanning,” Zhang said. Google has not yet replied to the accusation. Its spokesman was not available for comment yesterday. Hmm, no authorization and nobody available to reply to the accusations. Looks like Google is learning from the Chinese.
Google has been scanning millions of books under US copyright since 2004. Under a tentative settlement with US authors and publishers, that will cover all books unless the copyright holders object. Google is in the final stages of reaching a settlement with two US copyright organizations, which brought copyright infringement lawsuits against the search company for its book-scanning project.
A US court has given the parties until early next month to revise their current settlement agreement and ensure its compliance with antitrust and copyright laws. According to the settlement offered by Google, authors who accept Google’s scan could get $60 per book as compensation, as well as 63 percent of the income from online reading. Readers of the books online would pay a fee for digital access to the book.
According to the settlement, if the author rejects Google’s right to scan, he or she should appeal before Jan 5, 2010. Authors should approach Google authorizing the scanning and get the compensation before June 5, 2010. But Zhang said this settlement is not acceptable to Chinese writers. Of course it’s not acceptable to Chinese writers.
“First of all, Google violated Chinese writers’ copyright. Actually this is a difficult issue and one for the lawyers to work out. Did Google violate Chinese copyright? It doesn’t make sense for them to set a deadline for Chinese writers to protect their interests. “Secondly, the company should show a clear attitude to admitting its infringement and then negotiate with Chinese authors sincerely,” he said.
The US often criticizes China’s inefficiency in protecting property rights, Zhang said. Indeed they do.
“But you see what their company is doing in China? Many of our writers are infuriated,” Zhang said. Zhang Kangkang, a prominent writer and also vice-president of the Chinese Writers’ Association, said she was “surprised” and “angry” at Google’s copyright infringement. “It’s one-sided agreement to scan the work without permission from the author. It is illegal to enjoy the writer’s work in the name of knowledge sharing,” said Zhang, whose books have been scanned by Google.
Chen Cun, another well-known Chinese writer who lives in Shanghai, said Google is “day-dreaming” if it wants to buy copyright from him for $60. “The price should be set by both sides. It is impossible to buy an object with your bid only,” he said. I love it when I hear Chinese speaking in reasonable business terminology and standards that we have been playing by for years. Yes Google is daydreaming and this could turn into a nightmare although Google has probably performed a financial risk assessment and made a strategic decision to violate copyright and sort it all out later. $60 dollars, you have got to be kidding!!
Google Books is planning to turn millions of books into electronic literature available online.
Google’s head of Print Content Partnerships in Britain, Santiago de la Mora, earlier said that Google is solving one of the big problems in the print world – that some books are pretty much dead in the sense that hard copies can no longer be found. “We’re bringing these books back to life, making them more visible to 1.8 billion Internet users in a very controlled way,” de la Mora said. Thank goodness for Google bringing these dead books back to life – perhaps they should be awarded the Nobel Prize. However, Google Books is facing big legal problems in the US, Europe and elsewhere around the globe over the issue of copyrights.
Tax Amnesty Scheme
October 11, 2009 by Chinatex
In March of this year, the IRS came up with a program similar to the guns for cash program popular in many U.S. states. This time, instead of turning in an old rusty handgun or rifle – for cash (mind you we didn’t have this program in Texas), individual taxpayers with offshore accounts could voluntarily disclose these accounts to the IRS in exchange for amnesty (not cash), as set forth by the IRS as follows: Under the special provisions issued in March, taxpayers with these accounts originally had until Sept. 23, 2009, to come forward. Those taxpayers who do not voluntarily disclose their accounts by Oct. 15 face harsh civil penalties, where applicable, and possible criminal prosecution. Here are two sections from the IRS’ website concerning voluntary disclosure with my comments:
Q2. What is the objective of these steps?
A2. The objective is to bring taxpayers that have used undisclosed foreign accounts and undisclosed foreign entities to avoid or evade tax into compliance with United States tax laws. The objective is to get more money because we are broke and cannot print anymore without risking the dollar becoming worthless. Additionally, the information gathered from taxpayers making voluntary disclosures under this practice will be used to further the IRS’s understanding of how foreign accounts and foreign entities are promoted to United States taxpayers as ways to avoid or evade tax. Further the IRS’s understanding?? This is like the government hiring criminals to tell them how to catch criminals. Data gathered will be used in developing additional strategies to inhibit promoters and facilitators from soliciting new clients. Data gathered will be used to strongarm citizens and financial institutions into paying high taxes to fund government debt and expansion.
Q3. Why should I make a voluntary disclosure?
A3. Taxpayers with undisclosed foreign accounts or entities should make a voluntary disclosure because it enables them to become compliant, avoid substantial civil penalties and generally eliminate the risk of criminal prosecution. Because it enables them to become compliant – what kind of answer is this??? They are threatening criminal prosecution where none really exists. Making a voluntary disclosure also provides the opportunity to calculate, with a reasonable degree of certainty, the total cost of resolving all offshore tax issues. Taxpayers who do not submit a voluntary disclosure run the risk of detection by the IRS and the imposition of substantial penalties, including the fraud penalty and foreign information return penalties, and an increased risk of criminal prosecution.
For more nonsense from the IRS here is the link to the relevant part of their website concerning this issue:
http://www.irs.gov/newsroom/article/0,,id=210027,00.html
Check out Question 12 where it talks about how to figure out how to pay the back taxes owed. Now Old Chinatex likes how the Brits call things a scheme. In Texas we consider a scheme to be something fishy that we don’t want to get involved in. Looks like the IRS didn’t get enough people to take part in their scheme so they are extending the deadline to turn in your guns and then pay them lots of money. Sounds schemy to me. Here is an excerpt from a recent article in the Hong Kong English language newspaper. It’s relevant because as you might remember from Chinatex’s blawg entitled Tax Man Cometh Part II http://chntxlaw.com/2009/06/tax-man-cometh-part-ii/ the U.S. government recently tried to force Hong Kong and Macau banks into disclosing account holder information. As I told y’all China told em no and it should stay that way as long as China continues to hold almost a trillion dollars of our worthless currency.
Americans in HK rush to beat this week’s tax deadline
Nick Westra South China Morning Post Oct 12, 2009
Americans living in Hong Kong are rushing to ensure their tax affairs are in order ahead of Thursday’s deadline for them to voluntarily disclose unreported income in offshore accounts. The US government is casting its shadow across the Pacific and stepping up efforts to catch tax cheats and expand overseas enforcement.
The so-called amnesty scheme was initiated earlier this year by the US Internal Revenue Service (IRS) following a UBS settlement over allegations of abetting tax evasion. The programme was designed to gather information that would widen an ongoing investigation into a suspected web of wealthy tax cheats. But many ordinary Americans have been caught out as well because they were either unaware of stringent US tax-filing requirements or completed them incorrectly.
In addition to paying local taxes, the 60,000-plus Americans living in Hong Kong must regularly declare their earnings to the IRS. They are allowed an exclusion of as much as US$91,400 in locally earned income for 2009 if they can prove they spent most of the year abroad. But they must complete a filing regardless of whether they are under the threshold or not. US citizens must also report whether the combined value of their personal overseas bank accounts, or even those for which they have signatory power, has exceeded US$10,000 at any time in a given year.
Robert Keys, a partner at PricewaterhouseCoopers (Hong Kong) said: “There is an incredible amount of additional complication that affects the tax filing for an American living abroad. The foreign issues on a return are much more complex than those for a typical guy sitting in San Francisco.”
This is because the IRS has pledged to tighten its enforcement of international taxation amid growing suspicions that wealthy Americans have been exploiting loopholes in foreign tax codes and been stashing cash overseas. Those fears were fanned in February when UBS struck a US$780 million settlement with the US government to avoid facing charges of assisting wealthy Americans with tax evasion.
Highlighting the gravity of the allegations, the Swiss bank also broke from the centuries-old banking tradition of guarding customer secrecy and identified some clients who may have been involved. The number of named clients has since reportedly expanded to more than 4,000. But the IRS’ push to beef up its overseas presence is not just a reaction to recent events. It is also part of a long-term effort to adapt to an increasingly global business environment.
In its Strategic Plan 2009-2013 released in April, the IRS said some taxpayers may be dropping off the radar as more wealth shifted overseas. It estimated that the percentage of US citizens’ income coming from abroad had doubled from 2001 to 2006 and that the number of multinational firms worldwide had increased by 20 times to 63,000 since 1990. The IRS also published an announcement that month entitled “Reaching out to Americans abroad”. It said there were 7 million US citizens living overseas and included information for them to learn more about tax requirements.
The growing reach of the IRS was something that Americans living abroad must take note of, said Richard Weisman, a tax partner at Baker & McKenzie in Hong Kong. “While the basic US tax laws themselves have not materially changed, the tax enforcement climate in the US has totally changed in the last year or so,” Weisman said.
The US economy has been battered by the global downturn and is facing slower growth and mounting debts. Its budget deficit for the financial year climbed to a record US$1.38 trillion in August and unemployment has ballooned to a 26-year high. Against this backdrop, the US government has eagerly pumped more resources into the IRS in the hope that it can collect more revenue to fill the coffers. US President Barack Obama outlined a plan in May which he said would recoup US$210 billion over the next decade in part by hiring 800 new IRS agents for overseas assignments.
The growing footprint of the US taxman has sparked consternation among Americans overseas given the IRS’ harsh rhetoric in the wake of the UBS settlement. Keys said: “People don’t want the IRS to put their financial affairs under a spotlight, whether they are completely compliant or not.”
The growing footprint of the taxman is right!!! There are legal ways to avoid paying the high taxes that American companies and individuals pay to fund our bloated and nearly bankrupt government, especially for those of you doing business in Asia Pacific. Big companies with lots of money that donate to the political parties know how to avoid taxes, you should too. We help our clients from all over the world set up legal business structures where they are willing to pay reasonable amounts of tax and no capital gains on income or dividends. If big companies can do this, you can too. As always yeeha! Chinatex.
You get what you pay for!
September 6, 2009 by Chinatex
We have a phrase in Texas, something about the difference between a steer and a cow, I don’t remember how it goes, but it’s kind of like the British one – Pennywise and Pound Foolish. This can be used to describe those who try to save a few dollars (used to be a penny back in the 1600’s) and it ends up costing them a lot more in the long term. Old Chinatex gets a lot of enquiries from people and companies that want to do business in Asia-Pacific. They think that just because factories makes stuff real cheap here in China, that things like quality legal counsel should also be cheap. As many of you may know, Hong Kong and it’s neighbor city in China are two of the most expensive cities, as ranked by Mercer, in the world and that while making stuff is still cheap, helping those who make stuff keep their money is not. Now I know what you are thinking “those *#!% lawyers” – well that’s what you will be saying if you trust somebody who is not a lawyer or even worse, a local lawyer to handle your matter. Reminds me of one of the first legal matters I witnessed here in China. Foreign (U.S.) company comes to China to build a entertainment facility in a shopping mall. Against the advice of those who know better, they hire a local lawyer for numerous reasons - one of them being he is cheaper. Unbeknownst to them, the lawyer was good friends with the lawyer for the shopping mall and they had struck a deal where the savings to the shopping mall owner from the negotiations would be shared equally between the two lawyers and the mall owner. True story.
Now, Old Chinatex has been helping people in Hong Kong and China who are in trouble and who don’t want to be in trouble and who want to make good money and keep it – for many years. I don’t want to see y’all be Pennywise and Pound Foolish when having somebody advise you on your business, which to many of you is your life. Better just be careful, make sure you get references if you have any doubt who you are hiring and expect to spend what you would spend in your country for similar quality services. As always, Yee Ha!! Chinatex
