CHINA INFORMATION TECHNOLOGY LAW NEWSLETTER
Vol. 4, No. 12 - September 1, 2003
TOPICS THIS ISSUE:
- CNNIC Files Lawsuit Against 3721 In Beijing
- Number Of Internet Users In China Rises 15 Percent With 68 Million Chinese Web Surfers And Counting
- Controversy On Sale Of Domain Name "Guowuyuan.Com"
- Japan, China To Counter Microsoft
- Shanghai Games Group Accused Of Piracy
- Survey: Worm Infects 30 Percent Of China E-Mail Users
China Litigation and Arbitration
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CNNIC Files Lawsuit Against 3721 In Beijing
China Internet Network Information Center (CNNIC) has filed a civil infringement lawsuit against 3721 Company in the Beijing Haidian District People's Medium Court for RMB200,000 (USD 24,000) compensation, alleging that 3721 made unrealistic insinuations about CNNIC in the public media. Both companies are currently preparing for the upcoming trial. The first round of court hearings will begin soon.
3721 had argued in the media that CNNIC was neither a government organization nor a legally established commercial company authorized to regulate Chinese language domain names or the Chinese language KIPS (keyword Internet positioning service) market. CNNIC, which launched a Chinese Internet domain name service on May 26, 2003, has serious competition conflicts with 3721, whose Chinese KIPS currently holds approximately a 90% share of the domestic Chinese KIPS market.
To date, the ICANN (Internet Corporation for Assigned Names and Numbers), under the charge of the Chinese government, has allocated four sets of domain names, ".cn", ".zhongguo (China)", ".gongsi (company)" and ".wangluo (net)". CNNIC is currently the only official management department in China for Internet domain registrations under these domain names. The ".com" domain is an international Internet domain name system, and is open to the whole world. Thus, CNNIC has no jurisdiction for the registration of any Chinese Internet domain name under ".com".
(Source: Interfax)
Number Of Internet Users In China Rises 15 Percent With 68 Million Chinese Web Surfers And Counting
The number of Internet users in China grew by 15% over the past six months to 68 million, while the country's number of Web sites surged by 28%.
China has the world's second-biggest online population, but is far behind the United States, with more than 165 million.
In China, users are mostly young, male and single, according to the survey conducted twice a year by the China Internet Network Information Center.
China promotes Internet use for business and education, although the communist government censors chat rooms and tries to block access to foreign sites run by dissidents, human rights groups and news organizations.
The biggest single group online in China is people aged 18 to 24, making up 39% of the total. According to the survey, 40% of the users are women.
The survey also revealed that Chinese Web users spend an average of 13 hours online each week, 10 hours of which is spent playing games.
The number of Web sites in China grew to 474,000, with 250,000 registered using its ".cn" domain-name suffix.
The Chinese Internet agency's survey is the most widely watched set of figures on China's online use, although results can differ widely from surveys carried out by commercial and academic researchers.
(Source: The Associated Press)
Controversy On Sale Of Domain Name "Guowuyuan.Com"
The Chinese language Internet domain name, "Guowuyuan.com" (State Council. com), was being sold through a public bidding on Yi Ming Wang, a Chinese professional Internet domain name dealing website. The sale had aroused a great deal of controversy in China. Yi Ming Wang belongs to Xiamen Jingtong Technology Industrial Co., Ltd., which was the first ICANN authorized Internet domain name registration organization in China for the international domain name ".com".
According to Wang Zhijiang, director of the CNNIC news office, the Internet domain name "Guowuyuan.com", developed and managed by a U.S.-based company, belongs to a Chinese Internet domain name system, but that it has not obtained a legal status in China, neither has the Chinese Internet domain name system it belongs to.
Although China's related government departments, such as MII, have no jurisdiction over the U.S.-based company, which has developed the Chinese Internet domain name system and tried to sell it in China, it can however punish its domestic Chinese agencies. To protect China's future public interests in Chinese Internet domain name registration, MII may likely negotiate with ICANN for new measures for solving similar problems.
(Source: Interfax)
Japan, China To Counter Microsoft
Japan, China and South Korea plan to develop an original operating system in a bid to challenge the domination of Microsoft Corp.'s Windows.
Japanese Trade and Industry Minister Takeo Hiranuma is to propose the plan when he meets his Chinese and South Korean counterparts in Phnom Penh in the coming week on the sidelines of the ASEAN trade ministers' meeting, the Nihon Keizai Shimbun and the Asahi Shimbun said, quoting sources.
The accord would be the first signed by major economies, the two dailies said. Under the expected tie-up, the partners are expected to improve open-source operating system, like Linux.
The three countries are to set up a joint private-sector promotion committee in mid-November, to include Japanese businesses such as NTT Data Corp., Matsushita Electric Industrial Co., NEC Corp., Hitachi Ltd. and Fujitsu Ltd.
The project is part of combined efforts to reduce heavy reliance on Microsoft's operating system, which they say has oppressed their business strength in the computer software industry. Japan, China and South Korea have also noted the risk of over-concentration of a single software product, they said.
(Source: AFP)
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Shanghai Games Group Accused Of Piracy
Shanghai Shanda Networking, China's largest online games service provider, has rejected accusations of piracy and cheating made by its former South Korean partner - the latest episode in a lengthy and bitter dispute undermining the mainland company's fast-growing business.
According to Chen Tianquiao, the 30-year-old entrepreneur who founded the Shanghai company in 1999, Shanda had filed an application for the dispute to go to arbitration in Singapore in response to threats of legal action.
Actoz, the Korean online game operator, is threatening to sue Shanda for failure to pay fees on the game it licensed to the Shanghai company, and has also accused it of piracy in the preparation of Shanda's recently developed in-house game.
"We fully own the copyright of this game," Mr Chen said, in his first extensive public comments on the issue. "We invested a huge amount of time and energy, and used more than 160 designers to develop it."
With global game giants such as Sony staying out of China because of the threat of piracy, the mainland market is dominated by Chinese online games, a development that has allowed companies to operate profitably.
Companies such as Shanda sell RMB35 cards to registered users that give them 120 hours playing time online. At any one time, up to 800,000 people are playing online. Even with these cheap rates, Shanda, a private company, says it made $25m profit last year on revenues of $50m, figures that industry officials regard as credible.
Softbank, the Japanese tech investor, recently put $40 million into Shanda. The dispute with the Korean company may be significant in determining the competitive landscape in what is likely to be the world's largest online games market.
Shanda licenced the highly successful game, The Legend of Mir II, from Actoz in June 2001 on a revenue sharing basis, with the agreement expiring September this year.
However, Shanda stopped paying some commissions to Actoz early last year, blaming technical problems and the appearance of illegal servers, which Mr Chen said caused a "flabbergasting sales loss". He also said: "But the most important reason is that Shanda has not got the respect it deserved as a partner."
In an effort to gain independence from South Korean companies, which dominate the online game industry, Shanda had also begun developing its own in-house game, a first for China.
A series of negotiations to find a compromise have all failed. Actoz would not comment on the dispute.
(Source: Channel News Asia)
Survey: Worm Infects 30 Percent Of China E-Mail Users
An Internet worm that turns computers into spam machines has infected 30% of all e-mail users in China, the country's top Web security firm reported recently.
More than 20 million users opened and passed along the Sobig.F virus -- called the fastest spreading Web worm ever -- to domestic and regional networks, Hao Ting, spokeswoman for Beijing Rising Technology Shareholding Co Ltd, told Reuters. "We haven't seen anything spread so fast," she said by telephone. "It could get worse because there's very limited awareness of viruses and preventive measures."
Hao said the 30% figure was based on a study of the firm's one million regular customers and queries at its hotline. The number could not be independently confirmed by the National Computer Virus Emergency Response Center, based in the northern city of Tianjin, which said it had not conducted its own survey.
Although Sobig.F does not shut down or paralyze infected computers, it can crash servers or slow down Windows operations. Messages can be identified by subject lines that say "Thank you," "Movies," "Details" or "Applications."
Hao said only about 60% to 70% of Internet users, a total of 68 million people in China by the end of June this year, had installed anti-virus software and only half of them updated regularly enough to protect against mutating viruses.
Unsuspecting Windows users who do not take precautions could receive mountains of junk mail, called "spam," that the virus was programmed to send. Users who open the malicious messages turn their own computers into spam relay stations, experts have said.
China, which some call a fertile breeding ground for Internet worms because of rampant piracy of anti-virus software, could help spread the virus more quickly to other countries, experts said.
South Korean Internet security companies said damages from the Sobig.F virus were expected to be quite serious before the virus self-destructs in early September. "There was a huge in jump of virus infections this morning," said Kim Jung-hee, a marketing executive at Seoul-based firm Coconut.Inc.
A survey by Coconut and British e-mail security firm MessageLabs said less than 1% of their clients in South Korea and Japan had been affected so far, compared to 38.8% in Britain and 31.5% in the United States.
(Source: Reuters)
The China Information Technology Law Newsletter is intended to be used for news purposes only. It should not be taken as comprehensive legal advice, and Lehman, Lee & Xu will not be held responsible for any such reliance on its contents.
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