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Petzl and Chinese IP law October 21, 2011

Posted by Brandon in Technique Forum - the Training.
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Counterfeit products from China are notorious, but a recent turn towards an insular and specialized outdoor sport is putting athlete’s lives at risk.  Earlier this year, the climbing manufacturer Petzl discovered counterfeit safety equipment was being tracked to China.  These products included handle ascenders, pulleys and carabiners, i.e. products used to save climber’s lives in a deadly sport.  The counterfeits were so thorough that in some cases, fake serial numbers were engraved on the components.  However, the quality of the materials and workmanship was clear.  Normally, counterfeit products are associated with clothing and electronics, but as Petzl now realizes, these untested and cheaply made products are doing more than just diluting their brand.

Climbing equipment is predominately designed and manufactured by Petzl and Black Diamond.  These companies have built a reputation for quality in the climbing community over decades of use in the outdoors.  Petzl claims their products are built and safe tested in the United State and France with durable components and comprehensive design.  However over the last few years, Petzl noticed Chinese counterfeits of their headlamps appearing, presumably in an attempt to capitalize on the loyal customer base who value the Petzl brand.  The counterfeit climbing equipment was nearly identical in color, design, markings, packaging and batch numbering.  While Petzl is pursuing legal action against the Chinese manufacturer, presumably for patent infringement and trademark dilution, the only remedial action they have suggested for end users is to ensure you purchase Petzl products from an authorized reseller.  This is likely due to the fact that to date Petzl has been unable to specifically identify or distinguish the counterfeited products from their own.

While intellectual property protection in China is widely considered to be poor, the legal structure and organization of IP laws in China is quite strong.  Independent offices administer trademark, patent and copyrighted articles, and the government is a member of World Trade Organization and has adopted significant international agreements on IP such as TRIPS.  The Chinese Trademark Office is the most active trademark office in the world.  While registration is required and can take up to three years to complete, foreign owners of “well known” marks can challenge Chinese domestic applications.  Although patent rights are territorial, meaning that an inventor must register in China for protection, China has adopted the international standard of “first to file” for patents.  What is more, China’s copyright laws are very liberal, granting protection for tangible products without requiring registration.  This is ideal for software owners, as source code does not need to be disclosed in order to gain rights under copyright.

Despite these protections, IP enforcement is difficult and infringement is rampant.  This is likely in part a result of a booming economy and growing socioeconomic diversity.  China has the world’s second highest number of internet users, and their economy has tripled in the last ten years.  This dramatically affects enforcement and the ability to regulate technology.  Potentially more significant, the Chinese government heavily regulates imports, creating an exaggerated demand for foreign goods and technology that feeds the black market.

The consequences are severe for foreign IP owners.  The US Customs Office, now part of the Department of Homeland Security, notes that China is the single largest source of seizures at our borders.  Outside the US, chinese counterfeiters can not only sell their products locally, but easily export to foreign markets.  In fact, counterfeit products have been found at trade shows in the United States, which are further introduced to the US market through sales to customers and suppliers.  Unsurprisingly, this has led to some counterfeited products having been found within the original IP holder’s own supply chain.

To combat counterfeits, there are many precautions available to IP holders.  For example, one could make efforts to register IP, particularly where it is required (patents), record the development and investigate customers, as well as enforce rights whenever infringement is discovered.  More important, register your IP in China in Chinese, to avoid inconsistencies or graft in translation disputes, and do thorough prior art searches.  Finally, to assist policing, the US Customs office offers a program to register copyrights and trademarks with the department, which is then used to actively monitor imports coming into the country.

Chinese counterfeits are not going to disappear, so domestic IP holders need to consider where they can to protect their brand and monitor their industry.  Rock climbing is a beautiful but dangerous sport, and litigious if you run a guide or touring company.  Adding the possibility of indistinguishable fake equipment is not a risk we can take.  Hopefully Petzl will make sure this is the last time we have to worry about it.

I want to thank my friend and prolific climber G Johnson for suggesting this topic, cheers bud.


Google Power October 12, 2011

Posted by Brandon in Technology Forum - the Art.
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Google’s services are generally free, but they’re not cheap.  While it is the pre-eminent source for search, cloud and increasingly mobile technology, Google has entered a new market over the last few years…Energy.  Last month, Google began offering solar panel installation packages for residential properties to support its energy consumption.  However this is not Google’s first investment in energy exploration, and it likely won’t be the last.

Data centers full of servers store and run Google’s technology, and it uses a lot of electricity.  A single data center can gobble up enough energy to power a city of 40,000 people, and Google has almost forty around the world.  “Brown” energy, or energy created from coal and oil, is expensive and shown to be environmentally hazardous.  Google had trouble finding energy investments or companies to develop new tools, so as they “do no evil”, Google moved into investing in green technology and support its development independantly.

This led Google to found a new arm of the company, known as Google Green.  Google strives to use green technology and energy to power their data centers and promote the use of sustainable energy in general.  While Google is notoriously secretive, CEO Eric Schmidt admits that “energy prices drive the cost of Google”, and the lack of green energy development inspired the company to begin investing in the technology itself.  Internally, Google is developing new materials to replace mirrors on solar-thermal farms, which dramatically cuts manufacturing costs.  It already has installed 1.6 megawatts of solar panels on its facilities, which now cover 30% of Google’s operating power needs.

In the first stages of developing green technology, Google partnered with General Electric in 2008, and began developing its own technology in 2009.  Since then, it has invested in wind farms in North Dakota, California and Oregon along with solar projects in California and Germany.  Google’s most well known projects include a $168 million investment in 2011 for a solar thermal development in California’s Mojave Desert, which could supply energy to nearby locations like Las Vegas and Los Angeles.

However, Google’s most ambitious plan involves funding and developing a “superhighway” of huge waterproof wiring to be installed off the US eastern coastline, with the goal of creating the infrastructure for large wind farms in the Atlantic.

The most recent project of supplying residential solar panels launched last month.  Under the plan, Google will finance and own the solar panel installations, and will collect fees from homeowners as well as energy subsidies from the federal government.  In return, homeowners are provided with free solar panels and installation along with the right to buy the solar energy which is collected from their own roofs.  Residential solar panel installation would otherwise cost upwards of $30,000, and the monthly “energy fee” Google will charge homeowners to use the power should be less than the local utility bills.  Indeed, for Google “it’s an opportunity to significantly expand the market” for green energy.  Certainly, much of this power would be harnessed for Google or its investor’s purposes.

Which leads to the current political “climate” for green energy.  The Obama administration is in an uncomfortable position of justifying it’s guaranteed $500 million to the solar panel manufacturer Solyndra, which subsequently filed for chapter 11 bankruptcy and laid off all its workers earlier this year.  Despite this, at the end of last month President Obama approved two more solar panel loans for $1 billion.  In Massachusetts, the company Evergreen was given $58 million in state and federal credits, only to file for chapter 11 bankruptcy as well.

Certainly the green energy sector is in need for an overhaul, and requires commercial support apart from government subsidies.  To compete with China, which provides subsidizes in the billions of dollars to it’s green energy sector, the US green energy industry needs a massive boost.  Maybe Google is just trying to do its part.  The Obama administration would certainly appreciate someone else footing the bill for a little while.

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