STLR Link Roundup – November 2, 2013

WTO Rules against China in Rare Mineral Earths Case

Chinese government officials announced this Wednesday that the World Trade Organization has ruled against China’s export duties on rare earths. In doing so, the WTO dispute settlement panel basically upheld the joint claim by the United States, the European Union and Japan, questioning Beijing’s policy of limiting the amounts of rare earths it makes available to the international market as a violation of WTO rules. The United States, the European Union and Japan had jointly filed the complaint with the WTO in March 2012 after efforts to resolve the issue through bilateral talks proved unsuccessful.

China’s rare earth policy has long been a matter of concern for the international community because China controls 97% of the world’s rare earth market. While viable alternative rare earths remain elusive, they are essential for the high-tech and defense industries. Beijing first enforced restrictions on rare earths exports in 2010, saying it had the right to cut export quotas to preserve exhaustible resources. China had offered to ease export restrictions in 2011, but the international community demanded abolition of all restrictions.

The WTO panel said that China’s export duties on rare earths run counter to an agreement on the abolition of export duties that China adopted upon joining the WTO in 2001. While the ruling is not expected to be formally released until November, China is opposing publication of the report. In the meantime, China is expected to appeal the ruling. The case is also notable for being Japan’s first direct complaint against China through the WTO dispute settlement system.

Google and Android Smartphone Manufacturers Sued for Infringement of former Nortel Patents

Rockstar, a consortium jointly owned by Apple, Microsoft, Sony, RIM and Ericsson and the holder of the rights to former Nortel Patents, filed a barrage of patent lawsuits against Google and Android smartphone manufacturers including Samsung. Rockstar had spent $4.5 billion buying the thousands of patents owned by the bankrupt telecoms company Nortel in 2009. Google was one of the parties that lost out in the bidding war – ultimately offering as high as $4.4 billion.

The complaint against Google involves six patents (one of which is U.S. Patent No. 6,098,065 – the oldest patent in the case), all titled “Associative Search Engine” and under the same inventors. They cover technology that helps to match Internet search terms with relevant advertising, the core of Google’s search business. The complaint also tries to use against Google the fact that Google had previously bid for the rights of the patents.

Google’s failure to obtain the Nortel patents was seen as one of the principle factors that led to its purchase of Motorola Mobility in 2011. The Motorola acquisition gives Google some extra patents with which to go to battle. Google also has been shown to vigorously defend patent infringement attacks, as just last year it successfully saved Android in a court battle with Oracle.

Antigua and Barbuda Moving Forward to Monetize Suspended U.S. Copyright Protection under WTO Authorization

The government of Antigua and Barbuda, following a WTO panel ruling, is now pursuing a monetization scheme that would create a local market for United States copyrighted material free of royalties to the U.S. copyright holders. The ruling was the result of a complaint filed by the Caribbean country in 2003 claiming that the implementation of measures by the U.S. government restricting the market for cross-border gambling services is a trade violation.

Specifically, the WTO panel found that “[t]hree US federal laws (the Wire Act, the Travel Act and the Illegal Gambling Business Act) and the provisions of four US state laws … on their face, prohibit one, several or all means of delivery included in … cross-border supply … contrary to the United States’ specific market access commitments for gambling and betting services.” The WTO essentially authorized Antigua and Barbuda to suspend its TRIPs obligations with respect to United States intellectual property at the expense of copyright holders in the United States.

The U.S. ban on cross-border gambling services had greatly hurt Antigua and Barbuda’s economy. As a result, the exploitation of the suspended U.S. copyright protections is seen partly as retaliation by the Antigua and Barbuda government for the economic harm that it suffered.

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