CHINA ESQUIRE

I didn’t think I’d be seeing any interesting resolution of the milk scandal from earlier this year that would be worth posting…  but lo and behold, Yahoo decided to post an article ( h/t to China Digital Times) entitled “ Chinese Dairies to Compensate Melamine Victims“.  I’d seen news about the Sanlu trials, but didn’t think anything special enough to comment about them.  (that may change of course)  But here’s the article, which triggered some thoughts:

Chinese dairy companies that sold melamine-tainted milk are ready to pay compensation to the families of the nearly 300,000 children who became ill or died from drinking contaminated infant formula, a state news agency reported Saturday.

Twenty-two dairy producers will make a one-time cash payment to the victims’ families, China’s Dairy Industry Association announced, although it did not disclose an amount, the official Xinhua News agency said.

“The money for compensation is in place now and will soon be handed to the people who have custody of the sickened children through various channels,” the association said. The group did not specify a date.

The issue of compensation for the young victims has been a highly sensitive one, with Chinese courts so far not accepting any lawsuits filed by the families.

It’s interesting to consider that the courts refuse to accept lawsuits, and that payment up until this point has been handled only by the government.  (in an attempt to tide public unrest and excessive use of the legal system)  Now it looks like the companies are ready to turn in a compensation package…  but more than that, I wonder if this is more or less the formal apology to the people.

People who understand the U.S. legal system understand that often these sort of tort cases go on because plaintiffs want an apology.  And they proceed to trial because of “principle”.  Settlement is sometimes the goal of plaintiffs, but often, more so the goal of the lawyers involved.  (and yes, I’ve done plaintiff’s work)  I think that many of the plaintiffs I’ve represented would have gladly taken less if the company was crazy enough to just admit liability and issue an apology.  (that never happens for PR, liability, and a whole host of other reasons)  But what if they did?

And so I am left wondering if Sanlu and other dairies are making this event into a pay-off or an apology…  the former would place them in good company with American corporations.  The latter would place them into foreign territory…  and yet, everyone already knows the companies sold tainted goods.  The court of public opinion is already against them.  And what better way to stave off lawsuits than to just give the darn apology?  Is it that hard?  It is in America.  Perhaps this isn’t the case in China…  I’m curious as to how the companies are going to maneuver the PR around this case.  I hope its an apology…  its about time someone finally stepped up to the plate and owned up to their mistakes.

Yes, Chinese dairies, I hope your performance shames American companies.  That would be a sight to see!

I just wanted to wish you all a Merry Christmas!  (Sheng Dan Kuai Le for those of you in China…  I don’t have Chinese character capability on Wordpress or I’d use them)  Thank you for continuing to drop by my blog and comment, especially the regular readers.  I never expected that I would have a readership and regular hits when I started the blog this past year, so I am grateful to all of you.

Voting for the China Blog Awards closes December 31, 2008, so I want to make one last push for votes.  If you’ve enjoyed my blog this past year, please take the time to vote!  It’s simple: click this link and then click the “+” symbol.

Wishing you the best and happy holidays!

A long overdue weekend review.  So it seems like the great firewall is working again, and this time, its the New York Times that has some sort of technical glitches that won’t allow it to show up in China again.  From CNET yesterday:

Chinese authorities have begun blocking access from mainland China to the Web site of The New York Times even while lifting some of the restrictions they had recently imposed on the Web sites of other media outlets.

When computer users in cities like Beijing, Shanghai and Guangzhou tried to connect on Friday morning local time to NYTimes.com, they received a message that the site was not available; some users were cut off on Thursday as early as 8 p.m. The blocking was still in effect on Saturday morning.

Chinese officials had few explanations for the restriction on the Times site. “Concerning your particular question, we’re not really familiar with the details,” said a spokesman for the Ministry of Foreign Affairs in Beijing, who declined to give his name. “Web site maintenance is not within the job purview of the Foreign Ministry.”

Tang Rui, an official with the government’s International Press Center in Beijing, said he also had no specific information. “It might be a technical problem,” he said, declining to elaborate.

In the months leading up to the Olympics in Beijing, during the Games and immediately after, the Chinese government temporarily unblocked access to some Web sites and eased curbs on the ability of foreign correspondents to travel within China. It has not tightened the travel restrictions since then.

So China is cracking down on “free” internet usage again.  To be honest, I am actually surprised it lasted this long…  I thought it would be may be 2 months or so, and then that’s it, the clamp comes down.  Well, it went a little longer than I expected, so I am willing to count this as a good thing overall.

I’m pretty darn certain its not a technical glitch.  The NY Times site seems to work for me just fine.  (and probably all over the world too except for one rather significant “outage”)  But honestly, what did you expect?  I don’t think anyone figured that the Olympics would mean that China would allow free and unfettered piping in of western propaganda and media…  and it was only a matter of time before it happened again.  So pardon me if I don’t run around and act like its a big deal…  and yawn instead.  My thought: just get used to it because it was bound to happen.

I figured I would announce it soon enough on the blog, but I have decided to break from law firm life for the time being.  I recently joined TechSoup Global as an Eligibility Manager, which is doing domestic and international legal compliance on tax and non-profit/NGO issues.  (though I am also handling a fair amount of general corporate, international, and in-house legal matters as well)

It’s a big change, and I hope to continue blogging more in the new year once I am more settled.  I have been at TechSoup now for over 3 weeks and really enjoy the culture here.  The people are very nice, and the Global Networks Team that I am a part of is very entrepreneurial.  Our service is currently in 19 countries, but will likely be in another 10 by the end of 2009.  (it’s very exciting…  especially since I get to work on international corporate matters and more business design)

Here is the announcement that went out yesterday:

Dear Partners,

We are very excited to be introducing Thomas Chow!  Thomas is our new Eligibility Manager for the TechSoup Global Network, where he will be taking a leading role in managing and implementing our eligibility rules and standards across the donation programs. And given his legal background, it hopefully won’t come as a big surprise when he starts pitching in on legal matters as well.  We’re very fortunate to have persuaded him away from his traditional law firm path and I hope you will please join us in welcoming him.

So don’t be surprised if I start adding some non-profit/NGO related material to this blog in the future.

Merry Christmas if I don’t have a chance to write again before then…  (and please don’t forget to vote for my blog at Chinalyst)

Finally, part 3 of my series.  One way that plaintiffs often try to get their international copyright violations heard in U.S. courts is by alleging that a U.S. based defendant aided the infringement.  To my knowledge, there are two types of contributory infringment: vicarious and contributory.  I have not seen any cases on point within my Circuit as to vicarious. However, it appears that Subafilms (which was the basis for part 1 of this series) directly addresses contributory infringement in a way that severely limits what plaintiffs may actually get away with.

The Ninth Circuit held that it is axiomatic that activity outside the United States, “not constituting an infringement cognizable under the Copyright Act, cannot serve as the basis for holding liable under the Copyright Act one who is merely related to that activity within the United States.”  Subafilms, Ltd. v. MGM-Pathe Comm’ns Co., 24 F.3d 1088, 1093 (9th Cir. 1994) (en banc).  A party cannot be held liable for contributory infringement unless the authorized or encouraged activity itself amounted to copyright infringement.  Id. at 1092.

The Subafilms court held that a movie studio that “licensed” infringing DVD’s to international markets could not be held liable under U.S. Copyright Act.  Why?  Because the violation occurred abroad…  and not in the United States.  So even if a U.S. based defendant contributed to what would amount to infringment in China, Japan, Russia, etc., that is not sufficient to be held liable in the U.S.  The only way to get a third party on the hook is in a situation where the infringement took place in America.

Practically speaking, if there is infringement that happens abroad, Subafilms knocks out liability against the primary infringer and any contributing third parties or additional defendants.

Bottom line: unless a plaintiff can demonstrate that authorized activity fell under the Copyright Act in America, then parties may not be held liable for contributory infringement… because there is simply no copyright infringement.

For plaintiffs: You have to demonstrate that copyright infringement happened in the United States if you want to use the Federal Copyright Act.  Otherwise, you need to take the case to international courts or U.S. state courts.  The former may not yield you much because damages are low…  but then again, so are damages in the latter without statutory damages under the FCA.  Your best bet is an injunction in international court.

So if you can’t show infringement in the U.S., its a business decision: do you want to spend that much money for that little in damages?

For defendants: This is your lucky day if this happens to match your facts.  You can argue that the court has no subject matter jurisdiction over federal copyright claims, and thus, likely knock this case into international courts or U.S. state courts.  And in the state courts, plaintiffs don’t get ridiculously high statutory damage, so its a win for you.

For those of you who missed parts 1 and 2, they are here:

• part 1 (general overview of Subafilms)
• part 2 (why you cannot vest jurisdiction by EULA or shrinkwrap license)

Yes, I realize that I haven’t posted much in the last few weeks….  but I promise that part 3 of my copyright infringement series will come very soon.  I haven’t had time to post it given the Holiday season rushing upon us.  (Happy belated Thanksgiving to all!)

That being said, I am thankful that my blog made the roster at Chinalyst for the 2008 China Blog Awards, along with many other fine law and business blogs.  For those who follow my blog, please vote!   You can find China Esquire on that page link, and then click on the “+” sign under the points tally.

I will have some personal updates up soon as well–there have been some exciting things going on and I can’t wait to share with everyone!

To my fellow nominees, I wish you the best!  Now, let’s rock the vote…