Institute for Internet Policy & Law @ Beijing Normal University

Taobao Mall is the country’s leading online retail platform, accounted for nearly a third of China’s online retail B2C market share in the second quarter, followed by 360buy.com’s 12.4 percent and amazon.cn’s 2.3 percent.

From early October 2011, a large number of small sellers on Tabao’s system went on a riot when the company earlier announced an up to 10-fold increase in membership fees, along with a maximum 15-fold increase in cash deposits, from next year. The proposed fees ignited a storm of protest online and the owners of some small businesses disrupted the site’s operation. The company believed that some of those responsible for the disruption had been fined by Taobao for selling fake products, Ma said.

Partially pressed by Ministry of Commerce, Taobao announced on October 18 revised fees and a 1.8 billion yuan ($282.2 million) investment plan to aid the development of small- and medium-sized enterprises, in a move seen as a conciliatory gesture following a bitter online fee dispute. But some small vendors insisted that the “fight for their rights” will continue.

The revised measures include a 9-month grace period for regular sellers, who have maintained good ratings, before new fees kick in. But those who register after the revised policy will have to pay the new fees from Jan 1, 2011.

The cash deposit paid by vendors will also be cut in half, and Alibaba will pay 1 billion yuan to make up the shortfall and invest that money to help small businesses. Alibaba said it would pay another 500 million yuan as a guarantee fund to help small online traders obtain loans from banks, and it will spend an extra 300 milllion yuan on technical support and promotion. However, stores at the bottom 10 percent in terms of customer satisfaction rating will not be eligible.

Alibaba’s online retail unit split into three sections in June. Taobao Mall enables businesses to sell to customers and Taobao Marketplace allows customers to trade with each other. The third section is a shopping-related search engine, eTao. Taobao Mall, the business-to-customer (B2C) section, connects consumers in China with retailers ranging from small operators to retail giants like Gap Inc of the US and the Uniqlo brand of Japan’s Fast Retailing Co. Alibaba said that a total of 50,000 traders are registered with Taobao Mall, and some 5 percent of vendors will be affected by the new policies.

The incident involves a number of legal issues and occurred at a sensitive moment when the draft of the Regulations on Internet Retails are being reviewed by the State Council and a variety of Ministerial Agencies. The new Regulations will set out an administrative license system for any Third-Party Transactional Platform services, such as Taobao. On the other hand, the market dominance by Taobao in Internet Retail Market raised the people’s concerns on competition and consumer protection. With respect to protection of SMEs in Internet Retails, there may be an issue of Internet governance subject to multi-stakeholder and transparency.

The Asia Pacific Trade Facilitation Forum 2011, under the theme of “Trade Facilitation beyond Borders: International Supply Chain Efficiency,” focusing on how trade facilitation can enhance supply chain efficiency, was held on October 3-8, 2011 in Seoul. Critical trade facilitation issues affecting the efficiency of regional and international supply chains were discussed. There were two events related to UNNeXT Legal Panel, which is primarily tasked to research the feasibility of a Regional Agreement on Electronic Exchange of Trade Data and Documents and provide the pertinent training materials and services for the stakeholders in the Region.

On October 6, 2011, The United Nations Network of Experts for Paperless Trade in Asia and the Pacific (UNNExT) had a side meeting at the Forum in the afternoon. The leads of each working group on legal issues, data harmonization, trade process and single window implementation gave a briefing on their works done so far. Prof. Xue presented on behalf of the legal panel and reported the outcome of Legal Panel Bangkok Meeting in July. The suggestions on the regional agreement attracted many comments from the audience.

On October 7-8, 2011, UNNExT Capacity Building Workshop on Addressing Legal Issues for Single Window Implementation and Paperless Trade was held at Seoul COEX Complex. The pilot workshop introduced participants to legal issues that need to be addressed to enable paperless trade and single window implementation at the national level, as well as to facilitate interoperability and interconnectivity of e-trade systems across borders. It built the capacity of participants to develop comprehensive and harmonized paperless trade legal frameworks, providing a sound legal basis for the operation and interoperability of national single windows and related e-business and e-logistics platforms. More than 20 countries’ delegations joined the workshop. Prof. Xue who reviewed the training materials prepared and presented by Prof. Rolf Weber, gave a presentation on the Legal Environment of Paperless Trade in China. The audience was particularly interested in the progress China made to legally enable and facilitate the electronic transaction, particularly on Internet Retails. Prof. Xue’s talk had got most questions of the workshop. These questions are on the electronic signatures and transactional data that are newly subject to national regulations.

Washington Declaration on Intellectual Property and the Public Interest, now available for signature, http://infojustice.org/washington-declaration , was negotiated in late August by non-governmental groups, academics and others. It states, “[T]he last 25 years have seen an unprecedented expansion of the concentrated legal authority exercised by intellectual property rights holders.” However, “neither the substantial risks of intellectual property maximalism, nor the benefits of more open approaches, are adequately understood by most policymakers or citizens.” “This must change if the notion of a public interest distinct from the dominant private interests is to be maintained.”

The Declaration was drafted by some 180 experts from 85 countries at Global Congress on Intellectual Property and the Public Interest, held at the American University Washington College of Law in Washington, DC on August 25-27, 2011. As the only scholar from China, Prof. Xue attended the Congress and presented at several workshops. She particularly warned the danger of over-expansive of private ordering in IP enforcement.

The Declaration offers a range of recommended actions, aimed at issues such as limitations and exceptions to copyright, reining in IP enforcement, promotion of open access, and implementing development agendas. The declaration has a number of sections, entitled: Putting intellectual property in its place, valuing openness and the public domain, strengthening limitations and exceptions, setting public interest priorities for patent reform, supporting cultural creativity, and requiring evidence-based policy making.

Among the many suggestions in it, several highlighted by the organisers include:

* the use of other legal doctrines, like human rights and consumer protection laws, to cabin intellectual property rights expansion;

* promotion of open access, open educational resources, open government and related open information policies;

* strengthening limitations and exceptions that are needed to promote creativity, innovation and other socially beneficial uses of information and its products;

* setting public interest priorities in patent reform, including a more diverse structure of incentives for innovation;

* supporting cultural creativity through experimentation with new systems to reward and empower authors with, instead of in opposition to, new technologies for information diffusion;

* checking excesses in intellectual property enforcement with more safeguards, procedural fairness and proportionality in enforcement in our courts, at borders and on the internet;

* implementing development agendas, which take account of the economic, social and cultural development interests of all countries, throughout international intellectual property policy making; and

* requiring evidence, “rather than faith or ideology,” to be the core of all policy-making.

The Declaration intends to chart a more positive agenda – “one where the regulatory systems governing information and its products is informed by a fuller range of fundamental values and consideration of the public interest,” as stated by the Organization of WCL.

Global Academy on A2K held the post-Congress meeting in Washington on August 28, 2011. Representatives from Yale, China, Brazil, Egypt and South Africa participated the discussion. Many others, from India or France presented as well. Prof. Xue is leading the Chinese country study project on A2K. Her team is planning to complete the output by the end of 2011.

On 5 August 2011, the Nominating Committee announced its selections for eight leadership positions within ICANN.Prof. Hong Xue is the only appointed Council Member of ccNSO. The Appointees will take up their positions after the end of ICANN’s Annual General Meeting in Dakar, Senegal, on 28 October 2011.

The NomCom’s Chair, Adam Peake, said “We are very pleased to have been able to select such high quality people to join ICANN. They are a great group, bringing skills and experience that will serve the community well. It’s been a tough job, the NomCom had to choose from a very strong applicant pool, with many highly qualified candidates for every position, including a record number of female applicants. After many hours of teleconferences and meetings, and then almost two and half days of discussion locked away in a room in Singapore, we reached unanimous agreement on all the selected nominees and the overall slate that includes individuals from China, Germany, Jamaica, Malaysia, Nigeria, Philippines and United States. Thanks to my committee for their hard work, and on behalf of all the NomCom a very sincere Thank You to all 88 candidates who gave their time and effort in volunteering to help ICANN”.

The NomCom evaluated over eighty-eight candidates, many of whom with exceptional qualifications in relation to the key criteria as set out in the ICANN Bylaws. With such a rich pool of candidates and very few seats to fill, the NomCom found itself unable to appoint all the applicants the Committee members would have desired to see on the Board and on the other bodies.

This year’s Nominating Committee received 88 Statements of Interest from candidates all over the world (23 female and 65 male), during its open nomination period from 17 December 2010 to 4 April 2011. The regional breakdown of this year’s candidates is:

• 19 from Africa,
• 24 from Asia/Australia/Pacific
• 14 from Europe
• 15 from Latin America/Caribbean
• 16 from North America

The WIPO Seminar was held in May 25-26, 2011 in Bangkok. Officials from WIPO, Thailand, Korea , China, India, Philippians, Nepal, Pakistan and a few other Asian countries participated in the Seminar and briefed on the pertinent countries’ legal development of copyright law and intermediary liability. Generally, Asian countries, big or small, either have recently enacted or revised the copyright laws or are going to do so. It is noteworthy that the emerging powers or new economies in Asia like China and India are revising their copyright laws respectively, which could have impact in the international arena. Digital technology and free trade  are the driving force for the new wave of law-making. The most interesting parts are the presentations by the Resource Persons (Legal Experts) invited by WIPO. Prof. Xue, as the only Resource Person from China, gave a presentation and participated in the subsequent discussions.

Intermediary liability is a critical issues across the jurisdictions and legal systems. Given that no treaty law available on this issues (two WIPO Internet Treaties generally silent on this), a series of studies to exam the comparability and compatibility across the legal systems are very necessary. The three pillars of the liability, namely configuration, limitation (safe harbor defenses) and assistance obligations, are all evolving in Anglo-American common law, civil law, EU law and Chinese law. There are a rich body of statutes and cases available for the comparative study.

It’s been raised in China whether web cache is caching, which may be eligible for safe harbor defense? Web caching, which has been existing from or before Google, is generated by spiders of search engines proactively, rather than triggered responsively by the request of the users, may have insignificant technical difference from caching. However, legally it would be very absurd to distinguish them. If web caching is not caching for the purpose of DMCA Sec.512 (d), what else would be more applicable? It is obviously “automatic storage” in terms of the Chinese Regulations on Right of Communication via Information Network. It is argued that the originator (or source of communicator) has lost the control of cached contents. But this is wrong again. Even for the responsive caching, the originate is still at the mercy of the caching system, rather than having the capacity of direct control. Distinction of the proactive caching from the responsive one can only distort the well-established defense system for the secondary liability. As far as it is automatic storage to improve the efficiency of transmission, it is the caching and should be directly liable for infringement. Otherwise, we have to take down the whole Google, Baidu, Yahoo and all the other search engines. The law-making and judicial practices should be fool-proved and not affected by the biased (for undisclosed commercial interests) minds.

Also it is despising that many Chinese IP academicians are doing research based on indirect and outdated information. One guys boldly stated French 3-strike law (HADOPI) was struck out by the Constitutional Court “in May 2011”! How odds. Didn’t he know that that what was knocked out is the 1st Version of the Law in 2 years ago and the 2nd Version had long been passed by French Legislature a month later.  The Law has been implemented for 2 years. Ignorance is absolutely the enemy of knowledge.