HTC sues to block iPhone, iPad, iPod sales – The China Post

HTC Corp fired back on Wednesday in its legal battle with Apple Inc, asking the U.S. International Trade Commission to ban sales of iPhones, iPads and iPods in the United States.

In a complaint filed with the ITC and obtained by Reuters, HTC accused Apple of infringing five of its patents related to cellphone directory hardware and software and power-management technology in portable devices.

HTC’s action was widely expected after Apple filed a patent infringement suit against the company in March.

Apple’s move against HTC was seen as a proxy for an attack on Google Inc. Taiwan’s HTC makes smartphones based on Google’s Android software, which has gained ground on Apple’s popular iPhone.

In the complaint dated May 12, HTC said Apple violated patents on technology that helps devices such as the iPhone manage power and handle phone directories, and on technology that enables the just-launched iPad tablet computer to store data when in “sleep” mode, among other applications.

HTC is seeking a ban on importation, marketing and sale of Apple’s popular mobile devices in the United States. Apple, whose products are made in countries such as China, declined comment.

For its part, Apple accused HTC of infringing 20 patents. In addition, Apple filed a complaint with the ITC and also sued HTC in the U.S. District Court in Delaware.

“We are taking this action against Apple to protect our intellectual property, our industry partners, and most importantly, our customers that use HTC phones,” Jason Mackenzie, HTC’s vice-president for North America, said in a statement.

via HTC sues to block iPhone, iPad, iPod sales – The China Post.

China Moves to Tighten Data Controls – NYTimes.com

China is on the verge of requiring telecommunications companies and Internet service providers to halt and report leaks of what the government deems to be state secrets, the latest in a series of moves intended to strengthen the government’s control over private communications.

The proposed amendment to the state secrets law, reported Tuesday by the state news media, defines a state secret broadly and loosely as information that, if disclosed, would damage China’s security or interests in political, economic, defense and other realms.

The amendment was submitted Monday to the Standing Committee of the National People’s Congress, China’s legislature, for a third reading, the final step before being signed into law. Few measures reach that point in China without being adopted.

The wording of the amendment, as cited by the state-controlled newspaper China Daily, suggested that Internet and telecommunications companies would have to take a more proactive stance in identifying leaks of state secrets and their sources. The paper said companies must detect, report and delete unauthorized disclosures.

But reports by the state-run news agency Xinhua seemed less definitive about whether the companies must independently scour online transmissions for forbidden information or simply cooperate with the authorities if they suspect transgressions.

via China Moves to Tighten Data Controls – NYTimes.com.

GE, Sony, Nvidia said to be part of Justice Dept. probe – The China Post

The U.S. Justice Department has questioned General Electric Co., Sony Corp. and Nvidia Corp. as part of a probe into the technology industry’s recruiting and hiring practices, according to a person familiar with the matter.

Authorities are examining whether companies secretly agreed to not recruit or hire each other’s employees, an antitrust violation that could deprive workers of higher salaries, said the person, who requested anonymity.

The disclosure that officials at the three companies have been questioned indicates a wider investigation than was previously known publicly. The Wall Street Journal has reported that the investigation also involves Intel Corp., International Business Machines Corp., Google Inc., Apple Inc. and IAC/InteractiveCorp.

Collusion of this sort “would hurt the workers” and give consumers “fewer choices,” said Robert Lande, a law professor at the University of Baltimore. Besides depressing wages, such an agreement may stifle innovation, he said.

The Justice Department hasn’t determined whether any company violated the law, said the person familiar with the matter. Investigators are still following up on leads from their discussions with the firms and examining several time periods, the person said.

via GE, Sony, Nvidia said to be part of Justice Dept. probe – The China Post.

China Litigation And Arbitration. Maybe. – China Law Blog: a blog about Chinese law and the legal issues of doing business in China.

People far too often focus on the law or the choice of law, when so often it is not the law so much that determines the best place to proceed with a lawsuit, but the intangibles. The reality is that most breaches of contract in the United States also constitute a breach of contract in China, in Russia, in the Sudan, or wherever else. Buying a product and then not paying for it is, as far as I know, a breach of contract everywhere in the world. Similarly, getting drunk and running someone over with your car gives rise to a cause of action probably everywhere in the world as well. I am not saying the choice of law is not important, but I am saying it is wrong to assume it is the most important.

Take negligence. Getting run over by a drunk driver is probably pretty much the same cause of action in both China and the United States and the laws for that cause of action will probably be pretty much the same. But let's get real here and ask where would you rather have that lawsuit if you are the plaintiff? In the United States where you could put your friends and relatives on the witness stand to testify in front of a jury on how you have never been the same since the accident and where multi-million dollar verdicts are commonplace, or in China where your only evidence may end up being a written doctor’s report and where you will be lucking to get $30,000?

Or take a breach of contract where you purchase a defective part to go into a piece of equipment you make and sell for a million dollars. In the United States you would have a good chance of collecting the profits you lost by not being able to sell your million dollar equipment, whereas in China your chances of getting those lost profits would be minuscule.

via China Litigation And Arbitration. Maybe. – China Law Blog: a blog about Chinese law and the legal issues of doing business in China..

Israel bans imports of Apple’s iPad because of wireless disruption concerns – The China Post

Israel has banned imports of Apple Inc.&’s hottest new product, the iPad, citing concerns the powerful gadget’s wireless signals could disrupt other devices. Customs officials said Thursday they have already confiscated about 10 of the lightweight tablet computers since Israel announced the new regulations this week. The ban prevents anyone — even tourists — from bringing iPads into Israel until officials certify that they comply with local transmitter standards.

The U.S. Federal Communications Commission allows devices with Wi-Fi capability to broadcast at higher power levels than are allowed in Europe and Israel — meaning that the iPad’s stronger signal could throw off others’ wireless connections, Schubert said.

via Israel bans imports of Apple’s iPad because of wireless disruption concerns – The China Post.

Next Stop on FCPA Train: China? – WSJ

There seemingly is no limit to where the Foreign Corrupt Practices Act — the U.S. law that bars companies from bribing foreign officials — can take us.

On Tuesday we turned to China, where Avon Products, the beauty products company based in New York, is investigating its operations. Here’s the WSJ story and LB posts on FCPA matters.

The company has suspended three top executives in its China unit amid an internal investigation into alleged bribery that began in China and, according to story, now involves a dozen or more countries. A fourth suspended employee was a senior executive in New York who was Avon’s head of internal audit until the middle of last year, WSJ reported.

Avon’s China unit wouldn’t make the executives available to comment or discuss their alleged activities. The New York executive couldn’t be reached for comment.

The possible wrongdoing under investigation includes the alleged purchase of trips to France, New York, Canada and Hawaii for Chinese government officials with ties to Avon’s business, according to WSJ.

via Next Stop on FCPA Train: China? – Law Blog – WSJ.

Google CEO: Were now paranoid about security | Relevant Results – CNET News

Google Inc.
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Google learned some hard security lessons after it was attacked late last year by hackers, CEO Eric Schmidt said Monday.

“Google is now particularly paranoid about that,” Schmidt said during a question-and-answer session following Googles Atmosphere 2010 conference before about 400 CIOs. After the company learned that some of its intellectual property was stolen during an attack that originated from inside China, it began locking down its systems to a greater degree and accelerated plans to move to Web-based systems like Chrome OS netbooks.

The attacks took advantage of a flaw in Internet Explorer 6 that was quickly patched, although the damage had been done. More than 30 U.S. companies were believed to be targeted by the attacks, but Google was one of the few that publicly identified itself as a victim because “we decided we had to tell people as a warning,” Schmidt said.

via Google CEO: Were now paranoid about security | Relevant Results – CNET News.

E-discovery challenges in China | Lawyers Weekly

A complicated international anti-dumping case brought several U.S. lawyers and a team of e-discovery experts to a large industrial town in northeast China. They had come to interview senior executives and conduct a search of paper and electronic records at a major pharmaceutical company.

During negotiations for the trip, the company said the team was more than welcome to speak with anyone they wished to meet and that access to records would be granted willingly. What transpired once the team arrived in China, however, was considerably different.

To begin with, their hosts seemed disinclined to get down to business. On the first day, they insisted on giving a tour of the large plant. It was long and far too detailed for the team’s interests. Having everything translated only added to the ordeal.

After the tour ended, the hosts suggested everyone go to lunch. The lead lawyer politely declined, despite the urging of her translator to accept. The lawyer asked, instead, to begin the discovery process. “I would like to begin by taking a copy of your hard drive,” she said to the company’s CEO.

Although the CEO didn’t say no outright, it was obvious this request made him quite upset. Rather than discuss the matter further, he changed the subject back to the luncheon invitation. “We can eat and have something to drink and get to know each other,” he said.

“He’s got something to hide,” one of the lawyers said to his colleagues. Although he had made this observation in an aside, it was loud enough for the CEO’s translator to hear.

There was a growing tension in the room, which was especially felt by a North American consultant the pharmaceutical had retained to assist with the discovery process. Fluent in Chinese, he suggested everyone take a break.

During the break the consultant explained that cultural differences were causing unnecessary conflict.

In China, he explained, most executives (and all employees, for that matter) use work computers also as personal computers. “The CEO’s computer will have all his personal e-mails on it. Also, his banking and his children’s homework — and who knows what else. When you asked to take a copy of it, to him, it was like asking for a key to his house and going into his home and looking around. Don’t confuse his reluctance to just let you do this with evidence of guilt. That would be a big mistake.”

“Doesn’t he have his work e-mails on a different system than his personal ones?” the consultant was asked. “No,” the consultant replied. “He uses a hotmail account for all his e-mails.”

The consultant explained that in China, it’s not uncommon — in fact, it’s the norm — for people at all levels in a company to use hotmail, Yahoo and other free e-mail providers for business and personal correspondence.

It’s typical, he added, for company computers to be shared by many people. As a result, it’s much harder to identify who specifically might have sent an e-mail if it originated on a communal machine.

Because of the communal usage, passwords and other login features, as commonly seen in North America, might not even be employed. Or, if used, a password was likely known by everyone, rendering it meaningless. “People in China tend to work for the same company for many years, if not for life,” he said. “They are far more of a family than what you encounter in a U.S. firm.”

via E-discovery challenges in China.

How Altria Is Winnowing Out Fake Marlboros – BusinessWeek

Cigarette smuggling is booming, in part because New York and 21 other states have raised cigarette excise taxes in recent years. On top of that, the U.S. government increased the federal tax on cigarettes last year by 159%, to $1.01 per pack. A pack now typically sells for about $10 in New York City, more than double what it cost 10 years ago, and the state is considering yet another excise increase.

The high levies, meant to help close huge budget gaps and discourage smoking, have had the unintended side effect of spurring the illicit market. One passenger car filled with Marlboros bought in low-tax Virginia and driven up Interstate 95 to resell in New York can yield more than $30,000 in profit, says Crisanto Perez, a senior official with the U.S. Bureau of Alcohol, Tobacco, Firearms, & Explosives.

In Asia, Altria employees have begun to build an intelligence network to combat the counterfeiting problem. The company cites academic research estimating that factories in China manufacture 400 billion knock-off cigarettes a year. Altria has hired detectives to try to infiltrate the international distributors that sell Chinese fakes to mom-and-pop shops in the U.S. The company says it will funnel the information it gathers to government authorities.

Back in the U.S., Altria has 21 employees in its brand integrity unit, which it created in 2002. They are assisted by outside contractors hired nationwide. The company even has given nearly $2 million over the past eight years to cash-strapped public police departments in such places as Los Angeles and Suffolk County, N.Y., to help fund contraband investigations.

Tax collectors have their own concerns. New York currently loses $1 billion a year because of cigarette tax cheating, according to a 2009 study by the New York Association of Convenience Stores. Across the country, tobacco excise revenue lost annually to smuggling totals $5 billion, the U.S. Justice Dept.'s Inspector General concluded last year.

via How Altria Is Winnowing Out Fake Marlboros – BusinessWeek.

China Hearsay: China law, business, and economics commentary

The case was brought in a U.S. court over events that took place in China. The threshold question: should the court take the case or kick it over to China, which is a more suitable forum for hearing the dispute?

[I]t is natural that someone tried to bring cases here concerning the melamine contamination of infant formula and milk products in China, which reportedly affected thousands of infants in China. Their angle was an American holding company with Chinese subsidiaries that made contaminated milk products. Plaintiffs’ counsel found about 100 Chinese citizens and residents and filed suit in federal district court in Maryland, the holding company’s principal place of business.

Just as inevitable as the filing of the lawsuit in the U.S. was the defendants’ response: they moved to dismiss the case on forum non conveniens grounds, arguing that the cases did not belong in the U.S. and should be litigated in China. The court granted that motion in a very interesting decision filed last week. Tang v. Synutra International, Inc., No. DKC 09-0088 (D. Md. March 29, 2010).

This is basic civil procedure for lawyers (first year of law school), but the interesting part is the way that U.S. courts have looked at China’s court system over the years, and under what circumstances U.S. courts have found it lacking. I profess to not having looked into this issue for quite a few years, mostly because I don’t do a lot of cross-border litigation.

The way these arguments work is thus: the plaintiffs want the case to remain in the U.S. court so they can go after the U.S.-based holding company, receive more damages, and benefit from the U.S. system of discovery (among other things), while the defendant wants the case to be dismissed so it can fall back on the relatively high hurdles that exist for foreign companies to sue Chinese enterprises here, particularly in relation to tort claims.

So the defense is saying that the case should be heard in China. The tort took place there, the product in question was manufactured there, the plaintiffs live in China, etc. The plaintiff will hit back with evidence arguing that the Chinese court system will not offer plaintiff reasonable redress for damages suffered as a result of the tortious act.

In arguing that China could not offer an adequate forum for hearing the dispute, the plaintiff:

[P]rovided affidavits from Chinese lawyers with stories of how some Chinese lawyers were pressured to withdraw from melamine cases. The expert also cited anecdotal evidence, in part based on newspaper reports, that some cases filed in China have sat without court action for months, as the courts allegedly have placed some cases perpetually in limbo.

Not too impressive. Relying on a lot of anecdotal evidence, including newspaper accounts, is not a strong way to go. Moreover, and as Walk points out, cases that sit on dockets in perpetuity is a situation not restricted to the Chinese court system.

via China Hearsay: China law, business, and economics commentary.