Over the years intellectual property rights and the futility of basing an economy on them in an international environment in which they’re routinely ignored and/or are unenforceable has been a repeated topic here. Today I stumbled on a story that ties the matter up in one ugly, tidy little package:
BEIJING — A $2.2 billion lawsuit that targets the Chinese government and several international computer makers is the latest twist in the saga of China’s controversial Green Dam software, which last year was introduced to filter Internet content on individual computers.
The lawsuit, filed Tuesday by Cybersitter LLC, a California maker of parental-control software, alleges that Green Dam copied code from its filtering software. The complaint also alleges that China-based sources attempted to gain access to the private servers that held its proprietary material.
The case largely hinges on the applicability of U.S. copyright law to a product distributed almost exclusively in China. When Cybersitter first raised complaints that Green Dam appeared to have pirated coding from the U.S. concern’s software last year, legal analysts said the company would face an uphill battle if the product was sold only in China.
But in an interview Wednesday, Gregory Fayer, an attorney at Gipson Hoffman & Pancione who is representing Santa Barbara, Calif.-based Cybersitter, said that China had, in fact, made the software available for download globally, and had even marketed the product to U.S. users.
“For some time on the government’s official Green Dam Web site, there were links specifically targeting users in San Francisco and New York, which happen to be the largest Chinese-speaking populations in the U.S.,” Mr. Fayer said.
Calls to China’s Ministry of Industry and Information Technology for comment on the suit, filed in Los Angeles federal court, were unanswered.
In the suit, the company alleges that “many thousands” of copies of the software have been downloaded in the U.S., including thousands in California alone. However, Cybersitter is claiming damages for all 56.5 million copies of the software distributed in China as of early June 2009. Its $2.2 billion damages claim is arrived at by multiplying that figure by $39.95, the price for a copy of Cybersitter’s software to help parents screen Web content.
The company alleges that Green Dam copied more than 3,000 lines of code directly from its filtering software, a finding initially reported by independent researchers at the University of Michigan.
Cybersitter’s suit also hinges on its argument that several global PC makers, which all have U.S. operations, colluded to offer the software even after being told it was pirated. Mr. Fayer said this allegation is separate from the complaint of copyright infringement by the software’s Chinese designers.
“Here you have basically a Who’s Who of computer makers that were conspiring with the Chinese government and the two Chinese software makers to disseminate software that they knew was illegal,” he said.
The suit names as defendants China-based Lenovo Group and Haier Group, Japan-based Sony Corp. and Toshiba Corp., and Taiwan-based Acer Inc., Asustek Computer Inc., and BenQ Corp. Cybersitter, which was previously called Solid Oak Software Inc., sent cease-and-desist letters on June 15 to the PC makers, asking them to halt shipments of the software.
Cybersitter also alleges in its complaint that there have been thousands of attempts originating in China to gain access to its private servers, which hold all its proprietary code and information. The complaint said at least one such attempt originated from within a Chinese government agency.
I suspect the case will be tough sledding. One bright light is that China’s obligations as a member of the WTO require it to honor intellectual property rights under the TRIPS agreement and this would seem to me to fall under that heading regardless of where the products were sold.
However, it does seem to me that, if the Obama Administration is really serious about ratcheting up the pressure on the Chinese government to put the U. S. in a better negotiating position (as has been suggested by some), the Justice Department might want to give Cybersitter a hand. After all, $2.2 billion is a lot of money even to the Chinese government.
