Posted in Apple, Asia at 6:45 pm by Dr. Roy Schestowitz
Summary: Apple and Pfizer have a lot more in common than people may realise
Apple is a Badgeware/Brandware company. It is a major competitor of Linux and common sense. It’s all about marketing and perception at Apple, arguably a big delusion and spin on products made in China but designed in California. Apple is largely based on PR (and brand value). Eliminate those and all they are left with are Foxconn-made imitations/knock-offs that merely integrate good technology from IBM (hardware), Xerox, etc. The English-speaking press likes to boost the “Mac vs PC” delusion because it’s good for the US duopoly. The matter of fact is, Asia is rising and it is using Linux. Likewise, Xbox was a loser; the Japanese consoles do exceptionally well, but they don’t control English-speaking press. Linux makes affordable products; Apple makes expensive marketing. Would one prefer paying for quality and value or just marketing/peer perception?
Regardless of this introduction which mostly reuses a message that was made public earlier, the following Cablegate cable shows how Apple guards its brand. It takes the same approach as that of drug companies and even uses the same people.
VZCZCXRO1957
PP RUEHCN RUEHGH RUEHVC
DE RUEHBJ #3732/01 2700120
ZNR UUUUU ZZH
P 260120Z SEP 08
FM AMEMBASSY BEIJING
TO RUEHC/SECSTATE WASHDC PRIORITY 0136
INFO RUEHOO/CHINA POSTS COLLECTIVE
RUEHIN/AIT TAIPEI 7073
RUEHKO/AMEMBASSY TOKYO 2238
RUEHUL/AMEMBASSY SEOUL 0954
RUEHMO/AMEMBASSY MOSCOW 9123
RUEHGV/USMISSION GENEVA 2295
RUEAHLC/DHS WASHDC
RUCPDOC/USDOC WASHDC
RUEAWJA/DEPT OF JUSTICE WASHDC
RHMCSUU/FBI WASHINGTON DC
UNCLAS SECTION 01 OF 05 BEIJING 003732
SENSITIVE
SIPDIS
State for EAP/CM - PPark and EB/IPE - DBubman
State for EB/TPP - EMagdanz and INL - JVigil
State for EB/CIP - WWitteman and RDaley
USTR for China Office - AWinter; IPR Office - RBae;
and OCG - SMcCoy; and JRagland
Commerce for National Coordinator for IPR
Enforcement
Commerce for WPaugh, NWinetke
Commerce for MAC 3204/ESzymanski
Commerce for MAC 3042/SWilson, JYoung
LOC/Copyright Office - STepp
USPTO for Int'l Affairs - LBoland, EWu, STong
DOJ for CCIPS - MDubose and SChembtob
FTC for Blumenthal
FBI for LBryant
DHS/ICE for IPR Center - DFaulconer, TRandazzo
DHS/CBP for IPR Rights Branch - GMacray, PPizzeck
ITC for LLevine, LSchlitt
State for White House OTP Ambassador Richard Russell
E.O. 12958: N/A
TAGS: ETRD [Foreign Trade], EIND [Industry and Manufacturing],
KIPR [Intellectual Property Rights],
ECON [Economic Conditions], CH [China (Mainland)]
SUBJECT: CHINA/IPR: APPLE TAKES A BITE OUT OF
CHINESE FAKES
This cable is sensitive but unclassified and is not
for Internet distribution.
Summary
-------
¶1. (SBU) As amazing as it seems, computer maker
Apple Inc. had no global security team - including
inside China - until March 2008, when they hired
away the team from Pfizer that formed and led a
multi-year crackdown on counterfeit Viagra
production in Asia. Now with Apple, Don Shruhan,
based in Hong Kong, has taken the first basic step
of registering the company's trademarks in China and
Hong Kong and is targeting retailers, manufacturers,
distributors, and online vendors to take a bite out
of China's counterfeit iPod and iPhone production.
Early evidence suggests nearly 100 percent of Apple
products in unauthorized mainland markets are knock-
offs, while factories in Guangdong province are
exporting enough counterfeits to single-handedly
supply the world with fake Apple products. End
Summary.
From Viagra to iPods
--------------------
¶2. (SBU) Apple Inc., the Cupertino, California-based
designer of Mac desktop and laptop computers, was
not especially well known in mainland China before
the introduction in 2001 of its now-ubiquitous iPod
music player and, more recently, the iPhone. Now
those products are so popular worldwide that China's
notorious counterfeit markets are filled with knock-
off versions. After finally recognizing the threat,
Apple hired Don Shruhan from Pfizer in March as
Senior Director of Security for Asia Pacific to
design and launch the company's security strategy,
including anti-counterfeiting efforts, in the
region. His focus is on China, where he is "afraid"
of the volume of fake Apple products being produced,
though he is so far unable to quantify the scope.
Shruhan's boss at Pfizer, John Theriault, was also
hired by Apple, and is now VP of Global Security,
based in California.
¶3. (SBU) Shruhan, who over the past five years
developed and implemented a security and anti-
counterfeiting strategy for Pfizer aimed largely at
tackling fake Viagra production in China, said that
he is starting more or less from scratch at Apple -
the company had not so much as registered its
trademarks in China or Hong Kong until he joined the
company early this year.
China: Source of Fake (and Real) Apples
---------------------------------------
¶4. (SBU) Effectively all of Apple's iPod and iPhone
production is performed by sole-sourced third party
vendors in China, largely in Guangdong province --
BEIJING 00003732 002 OF 005
China's manufacturing heartland and counterfeit
capital. (Note: MacBook laptop computers are also
produced in China, but are less popular than the
company's other products and not subject to
counterfeiting. Shruhan has not yet spotted any
fake Apple computers. End Note.) Media reports
indicate that a single plant operated by electronics
subcontractor Foxconn employs 200,000 workers making
iPods in Longhua, Guangdong province. While cities
in that province, which also include Shenzhen and
Guangzhou, are far and away the biggest source for
fake Apple products, Shruhan says that internal
controls at subcontracted facilities, combined with
independent audits, are good enough that he does not
believe authorized plants are producing unlicensed
products in a so-called "third shift" scenario. He
explained that Apple's system for tracking each
product's unique serial number appears very
effective, and more sophisticated than Pfizer's.
Instead, he attributes the usually poor-quality
fakes to independent operators without links to the
licensees, though he acknowledges the manufacturing
molds for iPods or iPhones could be removed from
licensed factories and used in illegal production.
This can result in fakes that appear flawless on the
surface, but whose internal hardware is substandard.
Shruhan has discovered, for instance, what appear to
be real iPods with 80GB of storage, but that in fact
have only a very inexpensive 1GB hard drive inside.
Exports Shipped through Hong Kong
---------------------------------
¶5. (SBU) Whatever means counterfeiters are able to
exploit, the numbers are compelling: Shruhan notes
that customs seizure data definitively show that
there is enough counterfeit production of Apple
products in Guangdong to effectively make China the
single source for the world's fake iPods and
iPhones, many of which are transshipped via Hong
Kong to points onward. Even with the introduction
of genuine iPod and iPhone retail sales in China
(through authorized dealers and, more recently, an
actual Apple Store), Apple's marketing strategy here
is still in its infancy. The popularity of its
products is stronger outside of China. In three
recent raids in India, all fake Apple products were
found to have been transshipped through Hong Kong
(from China). Also, goods bound by air for
Mauritius were recently seized in Hong Kong.
Shruhan explained that Hong Kong's port has
historically received less scrutiny than others for
outgoing goods. In his experience with Pfizer, he
found Hong Kong customs authorities reluctant to
launch investigations that they fear could slow port
traffic - especially in comparison to more willing
mainland customs officials - but could be convinced
to cooperate if negative publicity can be minimized.
¶6. (SBU) Hong Kong is not only the exit port for
outbound fakes, Shruhan said, but is also the point
BEIJING 00003732 003 OF 005
of entry for legitimate Apple products entering
China's gray market. By buying iPods and iPhones in
Hong Kong, outside of mainland China's customs zone,
entrepreneurs willing to transport products across
the border can resell them at an instant profit of
approximately 25 percent to mainland Chinese
accustomed to paying import duties and value-added
taxes.
Retail Outlets
--------------
¶7. (SBU) Genuine Apple products in China until
recently were sold only through authorized
resellers. In July, the company opened its first
official Apple Store in Beijing and plans to open
another - the world's largest - in the Chinese
capital in early 2009. Outside of these legitimate
channels, vendors misrepresenting themselves as
"authorized" may sell the occasional real iPod or
iPhone, but predominantly offer fakes. Shruhan
recently completed an informal (and statistically
insignificant) survey of markets in Beijing,
including the notorious Silk Street Market, where
his team found that, while many Apple products "look
good," nearly 100 percent were fake.
The Approach to Fighting Fakes
------------------------------
¶8. (SBU) In many ways, Shruhan intends to model
Apple's security plan in China on his successful
experience at Pfizer, so he can quickly unroll a
strategy. In broad terms, the company will target
retailers first to raise their costs and get
counterfeit products off the street. Next, Shruhan
will work with the authorities to crack down on
major manufacturers and distributors of fakes to
undermine the supply of fake products. Finally, he
will seek out vendors who sell knock-offs online.
To accomplish this will require not only a team of
investigators, which Shruhan has subcontracted, but
also tools like a laboratory to begin accurately
tracing the source of counterfeit goods. A lab that
can perform forensic analysis on individual parts
like batteries, for example, can help to locate
high-volume manufacturers of such component parts.
Cooperation with the Chinese Government
---------------------------------------
¶9. (SBU) A key component in Shruhan's plan is close
cooperation with the Public Security Bureau (PSB).
Pfizer enjoyed very strong support from the PSB in
pursuing counterfeit pharmaceuticals, in large part
due to health and safety implications at a time when
China was particularly sensitive to such image
issues after the use of lead-based paint in toys and
unsafe Heparin. Shruhan is unsure how much the PSB
will focus on Apple's issues, but believes a safety
angle like shoddy devices causing fire hazards will
BEIJING 00003732 004 OF 005
strengthen his case. Short of this, his most
persuasive argument will be the economic impact of
counterfeiting: lost tax revenue and jobs. Apple is
studying what this costs the Chinese Government per
counterfeit device sold. Whatever degree of support
the PSB offers, Shruhan accepts that, as with
Pfizer, the reality of successful cooperation will
be that his team "does 95 percent of the
investigative work," turns case files over to the
PSB, and "gives the PSB 100 percent of the credit"
for successful enforcement actions. The payoff is
worth it. China has some of the strictest penalties
around for counterfeiters, he claimed - if the PSB
can successfully prosecute a case. Shruhan recalled
a pharmaceuticals case in which the counterfeiter
was sentenced to ten years and received a USD
250,000 fine.
¶10. (SBU) Apple's first raids will be carried out in
Shenzhen in Guangdong province, where Shruhan has
identified at least one major underground factory.
In such a raid, carried out by the PSB, the factory
will be shut down by authorities only if its output
exceeds the criminal threshold that under Chinese
law represents production on a commercial scale: RMB
150,000 (USD 22,000). In addition to working with
the PSB to shut down manufacturers, Shruhan is also
encouraging China's local Administrations of
Industry and Commerce (AICs) to raid retailers.
Such raids may not put vendors out of business, but
associated fines and penalties from civil suits will
raise their costs. Shruhan said that low profile
retail raids are a good option for Apple, a company
that wants to stay away from too much publicity
surrounding this issue. The evidence Apple gathers
doing market surveys, including the names of
infringing shops, the number of fakes found, and the
trademarks being violated, will be provided to the
AIC for support in upcoming raids in cities
including Shanghai, Beijing, Guangzhou, and
Shenzhen.
¶11. (SBU) Shruhan describes his relationship with
China Customs, developed over five years of joint
efforts to fight fake drugs, as very cooperative,
and he is already getting the support he needs,
including five export seizures in August. A key
element of his relationship with customs officials
in the past has been providing them with the
training they need to identify counterfeit goods in
the field. In addition to building strong
relationships with investigators and law enforcement
agencies, Shruhan knows that currying favor with the
Supreme People's Procuratorate and the courts are
essential in ensuring effective prosecution and
sentencing.
Selling the Plan in California
------------------------------
¶12. (SBU) While Shruhan has the benefit of his
BEIJING 00003732 005 OF 005
Pfizer experience in China, he laments that Apple
lawyers do not. Based in California, the company's
inexperience has slowed cooperative progress with
Chinese Authorities. Officials at Lowu Commercial
City, one of China's notorious counterfeit markets
near Hong Kong, asked Apple for training and
evidence of counterfeit sales in their shops.
However, reluctance by the company to accept
standard Chinese legal documents and other problems
in corporate communication have so far prevented
such cooperation. Shruhan has an ally at Apple's
Cupertino headquarters who will help him win the
support he needs to build an effective security
operation in China. John Theriault, former Vice
President of Global Security for Pfizer, was
Shruhan's boss for the last five years, and is the
one responsible for bringing Shruhan to Apple, where
Theriault is now Vice President of Global Security.
Theriault, said Shruhan, has already pitched the
China security strategy to Steve Jobs.
Comment
-------
¶13. (SBU) Shruhan and Theriault spent five years
building an effective security plan for Pfizer,
resulting in high-profile raids and seizures of
large quantities of counterfeit drugs like Viagra.
This was due in large part to the high priority the
Chinese Government placed on health and safety
issues. Now at Apple, they have an excellent
understanding of China's underground manufacturers
and global distribution channels that will serve
them well as they seek to stem fake iPod and iPhone
production. However, the key will be whether their
personal relationships with customs, law
enforcement, and judiciary officials will be enough
to focus the Chinese Government on Apple's non-
health-related problems as they seek to make life
uncomfortable for counterfeiters. End Comment.
If Apple “hired away the team from Pfizer that formed and led a multi-year crackdown on counterfeit Viagra production in Asia,” does that explain Apple’s fertile spirit of litigation and assaults? █
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Posted in Asia, Bill Gates, Microsoft at 6:15 pm by Dr. Roy Schestowitz
Summary: Government of Pakistan (GOP) and the US government speak of weapons and Microsoft
The following Cablegate cable, dated 2008, has a special section about “MICROSOFT CORPORATION”. It says that the “GOP currently uses 90 percent of pirated Microsoft Software for its operations worth USD 10 million. In an April meeting with now former Prime Minister Shaukat Aziz at the Economic Forum Summit in Boao, China, Microsoft’s Bill Gates proposed that the GOP pay USD 10 million over a five year period for legal licenses for government desktops, and asked that the PM respond within 45 days. The deadline passed on June 5 without a response from the GOP.
“Bill Gates sent a letter to former Prime Minister in June 2007 to follow up on their agreement and Microsoft has yet to receive a response.”
This was written around the same time Microsoft Gold Partners in Pakistan helped subvert an OOXML vote on the face of it. Here is the cable in full:
VZCZCXRO1809
PP RUEHBI RUEHLH RUEHPW
DE RUEHIL #0392/01 0260355
ZNY CCCCC ZZH
P 260355Z JAN 08
FM AMEMBASSY ISLAMABAD
TO RUEHC/SECSTATE WASHDC 4672
INFO RHMFISS/CDR USCENTCOM MACDILL AFB FL PRIORITY
RUEKJCS/SECDEF WASHINGTON DC PRIORITY
RUEATRS/DEPT OF TREASURY WASHDC
RUCPDOC/USDOC WASHDC
RUEHNE/AMEMBASSY NEW DELHI 2698
RUEHDO/AMEMBASSY DOHA 1482
RUEHKP/AMCONSUL KARACHI 8754
RUEHLH/AMCONSUL LAHORE 4669
RUEHPW/AMCONSUL PESHAWAR 3338
RUEHBI/AMCONSUL MUMBAI 3743
C O N F I D E N T I A L SECTION 01 OF 03 ISLAMABAD 000392
SIPDIS
SIPDIS
E.O. 12958: DECL: 01/24/2018
TAGS: ECON [Economic Conditions],
PREL [External Political Relations],
ETRD [Foreign Trade], EAID [Foreign Economic Assistance],
EINV [Foreign Investments], EFIN [Financial and Monetary Affairs],
PGOV [Internal Governmental Affairs], PK [Pakistan]
SUBJECT: AMERICAN COMPANIES EXPERIENCE INCREASED DIFFICULTY DOING
BUSINESS IN PAKISTAN
REFS: (A) Islamabad 191, (B) Islamabad 228, (C) Islamabad 288
Classified By: DCM Peter W. Bodde, Reasons 1.4 (b), (d)
¶1. (C) SUMMARY: Embassy Islamabad has received an increased number of
complaints from American companies over the last several months
regarding unfair practices on the part of GOP, many stemming from
action of the caretaker government. General Electric, Oracle, Bell
Helicopters and AES have experienced problems in GOP tenders.
Chevron and AES have yet to be paid millions of dollars for energy
products and services rendered. Netsol and Microsoft have
experienced non-compliance or interference in intellectual property
rights (IPR) violations. These problems, totaling an estimated USD
1.82 billion, present challenges for American businesses to fairly
compete and survive in Pakistan. The GOP's cash crunch is the cause
of the slow payments to the energy companies and the cancellation of
the Augusta helicopter contract, and may further complicate bidding
on GOP contracts. END SUMMARY.
--------------------------------------------- -------
PROBLEMATIC GOP CONTRACT BIDS WORTH USD 1.7 BILLION
--------------------------------------------- -------
¶2. (C) GENERAL ELECTRIC (GE): GE won a tender for a Railways
Re-signaling Project with the Ministry of Railways worth USD 46
million in Phase One to re-signal the existing railway lines in
Pakistan. Phase one and two are worth USD 150 million. Pakistan
Railways made technical changes in the contract so that the full
contract can be awarded to another supplier using cheaper Chinese
inputs.
¶3. (C) GE CURRENT STATUS: On Dec 19, a letter was sent to the
Chairman of the Pakistan Railways by the Ambassador requesting that
the transparency of the tender process be respected and that GE's
contract award for Phase One of the project be upheld. Neither GE nor
the Embassy has received any reply to date. Railway infrastructure
was targeted and damaged in the post Bhutto assassination violence
and the GOP is currently assessing the extent of the damage and how
this will impact planned railway projects.
¶4. (C) ORACLE: Oracle is interested in projects with Pakistan
International Airways (PIA) worth USD 23.5 million. PIA plans to
implement ERP (Enterprise Resource Planning) and MRO (Maintenance
Repair and Overhaul) solutions using prepackaged applications
software in order to automate its key business functions such as
revenue accounting, inventory, aircraft maintenance, repair and
overhaul. The two other competitors are representing German software
package SAP.
¶5. (C) ORACLE CURRENT STATUS: Samina Rizwan, Regional Director,
reported on December 19 that Oracle was structured out of the ERP
project and could not fairly compete for the MRO project because the
only competitor booked all costs under the ERP project to "give away
the ERP project for free." Oracle does not plan to submit a tender
due to their perceived unfairness in the procurement process.
¶6. (C) BELL HELICOPTERS: Bell Helicopter bid on a tender with the
Pakistan Military worth USD 35 million. The Cabinet Division plans to
procure new twin engine and single engine helicopters totaling USD 35
million for which the local distributor for Bell Helicopters has
expressed keen interest. Bell Helicopters have served the Cabinet
Division and other GOP agencies for the past 15 years.
¶7. (C) BELL CURRENT STATUS: The GOP tender was structured for the
specifications of Agusta helicopters. All competitors were
structured out of the bid because of the technical specifics related
to Augusta's products. Advocacy letters from the American Embassy
and Canadian High Commission were unsuccessful in convincing the GOP
to open its tender to competition. January 25 press reports indicate
that the GOP is cancelling the Augusta helicopter contract. Comment:
The USG has given the GOP two VIP helicopters for the President's
use. End comment.
¶8. (C) AES: AES has the opportunity to build a 1000-1200 MW Coal
Fired imported Power Plant near Karachi worth USD 1.6 billion. The
Private Power and Infrastructure Board of Pakistan has issued AES
Pakistan a Letter of Interest to carry out a feasibility study by
March 15.
¶9. (C) CURRENT STATUS: AES reported to ECON that they are getting
signals from the GOP that the tender process for the power plant may
not involve a level playing field. AES is awaiting the installation
ISLAMABAD 00000392 002 OF 003
of a new government before moving forward with further expansion
plans.
--------------------------------------------- ------
NON-PAYMENT ISSUES WITH GOP WORTH USD 85.2 MILLION
--------------------------------------------- ------
¶10. (C) CHEVRON: The GOP owes Chevron nearly USD 3 billion rupees
(USD 50.2 million) in back payments on differential price claims from
August 2007- January 2008. The GOP heavily subsidizes consumer gas
prices and has not increased local prices since gas was approximately
USD 55 per barrel.
¶11. (C) CHEVRON CURRENT STATUS: The Ministry of Petroleum and
Natural Resources is willing to pay, but they and Chevron report that
the Ministry of Finance is the hold up. Chevron's headquarters would
like to see a reimbursement of at least USD 27.5 million made prior
to January 31, 2008 or the company plans to reduce distribution to
Pakistan from 40,000 metric tons to 20,000 metric tons. Chevron
currently supplies approximately 25 percent of Pakistan's gas and
diesel.
¶12. (C) AES: AES reports that the Pakistan Water and Power
Development Authority (WAPDA) consistently does not pay the company
in a timely manner for electricity. The Country Manager said that
his subsidiary routinely stops plant operations from time to time due
to lack of funds available to purchase power plant fuel.
¶13. (C) AES CURRENT STATUS: AES has received some payment for
electricity production and is currently operational but the company
is still owed approximately USD 30 million for its operations and
services rendered.
-------------------------------------------
THE GOP CASH CRUNCH AND GOVERNMENT SPENDING
-------------------------------------------
¶14. (C) The GOP's cash crunch is due to increased fuel and food
subsidy bills, lack of political will to pass through increased
international fuel and food prices to consumers already faced by high
essential good inflation in an election year, and increased
government spending on infrastructure projects prior to elections.
This increased spending means that there is less money available to
pay outstanding bills or contemplate new projects (ref C),
particularly since GOP revenues are not able to keep pace with the
increased expenditures. The GOP has deferred any decision to pass
along increased commodity prices until after the February 18
elections, which will cause further increases in the fiscal and
current account deficits. The GOP has also resorted to increased
borrowing from the State Bank of Pakistan. We believe the GOP cash
crunch is behind the Augusta contract cancellation. Finance Minister
Shah (ref A) acknowledged that the GOP's fiscal difficulties (ref A)
were holding up payments to the energy companies in a January 4
meeting with the Ambassador.
---------------------------------------------
REPORTED IPR VIOLATIONS WORTH USD 30 MILLION
---------------------------------------------
¶15. (C) NETSOL TECHNOLOGIES: NetSol has a pending IPR investigation
worth USD 20 million. The company reported Dec 20 that two former
employees stole secret information from the company and launched
their own public company in Pakistan to sell the exact same products.
The company filed a complaint with the Federal Investigative Agency
(FIA) Nov 22 and investigators then arrested one of the partners and
scanned his laptop which contained over 100 secret corporate
documents. On December 18, 2007 FIA contacted NetSol to say the
Supreme Court Justice Nawaz Abbasi, a family friend of one of the
accused, called their investigators in for a meeting and asked them
to drop the case, return the laptop, and dismiss evidence.
¶16. (C) NETSOL CURRENT STATUS: Embassy drafted letters requesting
information from the FIA on the status of this on-going
investigation. Embassy pressure was successful. FIA retained the
laptop, the company dissolved, a non-disclosure agreement was signed,
and the Supreme Court justice moved his pressure down to a civil
suit.
¶17. (C) MICROSOFT CORPORATION: GOP currently uses 90 percent of
pirated Microsoft Software for its operations worth USD 10 million.
In an April meeting with now former Prime Minister Shaukat Aziz at
the Economic Forum Summit in Boao, China, Microsoft's Bill Gates
ISLAMABAD 00000392 003 OF 003
proposed that the GOP pay USD 10 million over a five year period for
legal licenses for government desktops, and asked that the PM respond
within 45 days. The deadline passed on June 5 without a response
from the GOP.
¶18. (C) MICROSOFT CURRENT STATUS: Bill Gates sent a letter to former
Prime Minister in June 2007 to follow up on their agreement and
Microsoft has yet to receive a response.
¶19. (C) COMMENT: With an estimated total of approximately USD 1.82
billion at stake, Embassy Islamabad considers the increased activity
a troubling trend. Increased economic and financial problems continue
to compound the GOP's political difficulties. The newly elected
government, regardless of party, will have to face mounting economic
challenges. Embassy will continue to closely monitor each situation
involving these and other American companies and raise each issue
with the appropriate GOP officials on a regular basis. END COMMENT.
PATTERSON
- 1 -
Much of the above is too political for us to delve into. █
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Posted in Asia, Bill Gates at 5:58 pm by Dr. Roy Schestowitz
“Gates has created a huge blood-buying operation that only cares about money, not about people.”
–AIDS organisation manager in China
Summary: The Chinese government’s denial or misuse of human rights gets defended by Caterpillar (notorious for human rights and workers’ rights abuses), whose representative cites Bill Gates
IN THE FOLLOWING Cablegate cable, Caterpillar’s Xiao is said to think that ‘Google approached the problem [with the Chinese government] incorrectly, citing Bill Gates’ position that companies must “follow the laws of the country in which they operate.”‘
Some people still think of Gates, a convicted monopolist, as some kind of a moral symbol. See what Microsoft does in Hong Kong based on Cablegate.
VZCZCXRO1384
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O 291210Z JAN 10
FM AMEMBASSY BEIJING
TO RUEHC/SECSTATE WASHDC IMMEDIATE 7843
INFO RUEHOO/CHINA POSTS COLLECTIVE IMMEDIATE
RUEHLO/AMEMBASSY LONDON IMMEDIATE 3671
RHMFISS/DEPT OF HOMELAND SECURITY WASHINGTON DC IMMEDIATE
RHMFISS/FBI WASHINGTON DC IMMEDIATE
RUEAWJA/DEPT OF JUSTICE WASHDC IMMEDIATE
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RHEHNSC/NSC WASHDC IMMEDIATE
C O N F I D E N T I A L SECTION 01 OF 03 BEIJING 000247
SIPDIS
DEPT FOR S, P, D, EAP/CM, EEB, AND H
NSC FOR BADER, MEDEIROS, AND LOI
E.O. 12958: DECL: 01/28/2030
TAGS: ECON [Economic Conditions], EINV [Foreign Investments], PGOV [Internal Governmental Affairs], PREL [External Political Relations], CH [China (Mainland)]
SUBJECT: GOOGLE UPDATE: CHINA TECH BUSINESS COMMUNITY
SPECULATES AND EVALUATES
REF: BEIJING 183
Classified By: Economic Minister Counselor Weinstein for reasons: 1.4(B
), (D)
¶1. (C) Summary. Despite media reports quoting Google
officials in the U.S. as saying Google is in talks with
China, a Ministry of Commerce official told a visiting U.S.
delegation on January 28 that "it would be better if Google
stopped telling the media that it is in negotiations with
China, since it is not." However, a Foreign Ministry
official told Poloff earlier this week there is going to be a
"meeting in Davos" that China hopes "will resolve everything
in an extremely low-key and quiet manner." Separately,
several U.S.-China dialogues related to IT issues were
unexpectedly postponed by China this week due to the
purported unavailability of key officials who had previously
confirmed to attend. It is unclear, however, whether the
postponements are related. Google remained the hot topic
this week among our contacts in China,s information
technology (IT) industry, with those in foreign firms
generally supportive and appreciative of the Secretary,s
speech on internet freedom. Expat executives said that while
they expect the USG's highlighting of internet freedom and
requests for an investigation of Google's allegations will
lead to frictions with China, they welcomed the intervention
in what they see as an increasingly difficult operating
environment. End summary.
GOOGLE REMAINS HOT
------------------
¶2. (C) Google's decision to potentially walk away from
China's market of nearly 400 million internet users continues
to spark extensive discussion on a range of important related
issues: censorship and information flow; principled versus
bottom-line decision-making; protection of corporate
proprietary information and intellectual property; and how
companies can effect positive change from within a foreign
economy. Secretary Clinton's January 21 speech on Internet
freedom touched a nerve in China's leadership (reftel), and
rightly so according to our local business contacts who
regularly cite the increasingly challenging business climate
in China. Locally-based western businessmen and consultants
are viewing Google's confrontation with the Chinese
authorities with a fascinated mix of admiration and caution,
though few are willing to bet on the ultimate outcome.
¶3. (C) Western companies, Chinese employees are, not
surprisingly, sometimes more sympathetic to the PRC,s
position. Local Caterpillar Vice President S.C. Xiao
commented that Google has played matters badly, suggesting it
should have tried to help PRC authorities understand what
Google provides "is good for China." Xiao stated he thinks
Google approached the problem incorrectly, citing Bill Gates'
position that companies must "follow the laws of the country
in which they operate." Xiao also intimated that, as a
Chinese citizen, he could empathize with the Chinese
government,s fears that Google's services could be used by
Dalai Lama supporters to publicize their views throughout
China. Liu Tao, Government Affairs Manager for Caterpillar,
notes that the parties involved in the Google issue should
discuss the issue without "being so emotional." Liu, a
Chinese citizen, said that the Chinese government was "not
acting emotionally" over this issue.
PREDICTIONS FOR A RESOLUTION
----------------------------
¶4. (C) A visiting London-based APCO executive believes the
Google matter was a "good shaking of the tree" for China
issues needing greater visibility. Although he predicted
impact from Google would not necessarily change the game for
European interests here, he noted that Google has established
close relations with UK Conservatives, and predicted a
potential future Conservative government would be very
supportive of the tenets in Secretary Clinton's recent
speech. Another Beijing-based APCO consultant compared
Google,s experience to Intel, which in 2003 threatened to
withdraw from China after Chinese authorities sought to
impose technological modifications to its encryption-enabled
products. The Chinese government ultimately backed down, but
our local contact believes Chinese payback continues today
and is one reason China insists that homegrown technology be
BEIJING 00000247 002 OF 003
co-installed in any WI-FI-enabled phones/communication
devices. The latter local contact further suggested Google
could pursue resolution of its current impasse by lobbying
technologically-enlightened senior statesmen, especially more
pro-business ones, who might sway China's leadership to
address Google's censorship issues more moderately.
¶5. (C) Many contacts have opined that it appears Google will
likely remain in China, albeit with a more limited presence,
i.e., without a search engine service. Although Google has
firmly positioned itself on censorship matters and hence will
likely have little choice but to take down its Google.cn
search site, they believe Google executives' public
statements and vested interests still coincide with
maintaining at least some presence in China.
LONG TERM OUTLOOK POSITIVE, SHORT TERM FALLOUT
--------------------------------------------- -
¶6. (C) Another IT association representative told Econoff
that interest in the Google case "highlights the growing
number of Chinese measures and policy goals that diminish the
investment environment in China... part of a troubling
pattern that is making it increasingly difficult for foreign
firms to do business." Business contacts told ConGen
Shanghai that they "welcome a more assertive voice on behalf
of the U.S. While it may not be good for U.S.-China
relations in the short term, it will be better in the long
term. We need to stand for what we believe in." Injecting a
more cautionary note, however, another Shanghai businessmen
warns that "America will not advance its objectives with
regard to the bilateral relationship by telling the Chinese
government that it is working to put new internet
technologies into the hands of dissidents. In this particular
face-off, at least, the Chinese are 'spinning' the issue far
more effectively than the Americans."
¶7. (C) Fallout beyond China's borders continues. Two
governmental dialogues (the U.S. China ICT Consultations,
previously scheduled for February 9, 2010, and the
DOC-Ministry of Industry and Information Technology on
February 2, 2010 - both in Washington DC) were postponed this
week due to purported unavailability of key officials who had
previously confirmed to attend. Congen Shanghai has found
many IPR-related meetings cancelled this week.
Interestingly, officials from the Swedish Embassy were
summoned to the MFA to receive a protest of statements made
by the Swedish FM supportive of Secretary Clinton's speech on
Internet Freedom. According to our Swedish contacts, the MFA
charged the Swedes with damaging ties during the 60th
anniversary of Chinese-Swedish diplomatic relationship.
WHAT'S DRIVING CHINA
--------------------
¶8. (C) According to another well-respected tech sector
analyst here, a number of historical, cultural, and
technological factors have coalesced to put China in a
technologically-aggressive state-of-mind. One contributing
factor was Microsoft's flubbed 2004 "black screen" strategy
to deter intellectual property theft by darkening computer
monitors running unlicensed Windows operating software. This
consultant believes that example of U.S. technology
effectively wielding power over China's personal computers
helped spur China's aggressive campaign for source codes and
its own technology. This, combined with growing Chinese
pride, economic clout and influence, and the "weakened"
position of the U.S. and its allies after the global economic
downturn, are emboldening the Chinese to take ever more
aggressive positions in advancing its innovative industries
at the expense of foreign ones.
¶9. (C) A local Microsoft executive applauds the Secretary's
speech and the Administration's commitment "to organize
sustained, targeted, persistent engagement on the full range
of Internet-related issues" with China. This executive said
the Secretary's remarks were "right on point," particularly
for companies who "desperately need the help of the USG" in
the face of "harassment, threats and actual shutdowns of
service, threats of licenses being revoked, resistance to
provide legal authority, mandates to place servers in China,
etc." Our local APCO contact described the Google issue as a
"stirring of the beehive," but says the kind of harassment
Microsoft describes is a fact of worsening life here which
BEIJING 00000247 003 OF 003
the Google incident only helps spotlight.
HUNTSMAN
This cable is interesting for many political reasons, too. █
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Posted in Asia, Cablegate, Microsoft at 5:44 pm by Dr. Roy Schestowitz
Summary: How politicians view Microsoft’s signing of software deals with foreign governments
“Ministry of Posts and Telematics (MPT) may sign an agreement with Microsoft,” says the following Cablegate cable. “Microsoft is pushing to sign the agreement during a planned visit to Vietnam by its CEO, Steve Ballmer, before President Triet’s visit, but is uncertain if that would happen.”
Why are politicians so involved in this? Here is why: “this agreement would be an important symbol of Vietnam,s commitment to protect intellectual property rights and something they hope to include in a possible Joint Statement.”
Oh, that’s right. Also see:
The cable itself is very long and diverse.
VZCZCXRO6823
PP RUEHHM
DE RUEHHI #0898/01 1361126
ZNY CCCCC ZZH
P 161126Z MAY 07
FM AMEMBASSY HANOI
TO RUEHC/SECSTATE WASHDC PRIORITY 5373
INFO RUEHHM/AMCONSUL HO CHI MINH 3032
RHEHNSC/NATIONAL SECURITY COUNCIL WASHINGTON DC
RUEAIIA/CIA WASHINGTON DC
Hide header
C O N F I D E N T I A L SECTION 01 OF 05 HANOI 000898
SIPDIS
SIPDIS
STATE FOR EAP/MLS
E.O. 12958: DECL: 05/16/2017
TAGS: ECON [Economic Conditions], ETRD [Foreign Trade],
KIRF [International Religious Freedom],
OVIP [Visits and Travel of Prominent Individuals and Leaders],
PGOV [Internal Governmental Affairs], PHUM [Human Rights],
PREL [External Political Relations], VM [Vietnam]
SUBJECT: AMBASSADOR AND VFM BANG DISCUSS TRIET VISIT, HUMAN
RIGHTS, A/S HILL VISIT AND OTHER BILATERAL ISSUES
Classified By: Ambassador Michael W. Marine, Reasons 1.4 (b/d)
1. (C) Summary: At a May 15 dinner with Vice Foreign
Minister (VFM) Le Van Bang and other MFA officials, the
Ambassador stressed that time is short for the two sides to
reach agreements on potential deliverables to ensure a
successful visit by President Nguyen Minh Triet. The two
sides discussed human rights at length, with the Ambassador
urging the GVN to take steps responsive to calls from the USG
and others. VFM Bang reported that Vietnam is considering
several measures to reduce tensions in this area, including
amnesty for Nguyen Vu Binh, a cessation of arrests and
unspecified "action" on the case of Le Quoc Quan.
¶2. (C) The Ambassador raised the items the USG would like as
deliverables, including a TIFA, commercial deals, increased
cooperation in law enforcement and rule of law/good
governance programs. Although making no specific
commitments, the MFA officials acknowledged the need to make
progress quickly, and as a first step, offered to prepare the
initial draft of a Joint Statement. The Ambassador also
raised other bilateral issues such as the new embassy
compound, adoptions and a bilateral work agreement. End
Summary.
¶3. (C) At a May 15 dinner meeting, the Ambassador met with
Ministry of Foreign Affairs (MFA) Vice Minister Le Van Bang
and Americas Department Director General Pham Van Que to
discuss ways to advance preparations for President Nguyen
Minh Triet's June visit to Washington. Stressing that only
five weeks remain before the visit, the Ambassador pressed
VFM Bang for a list of Vietnam's priorities. In response to
Bang's discussion of a Joint Statement, the Ambassador said
that a statement will require positive and concrete contents.
It will be important to address human rights concerns and to
have a list of specific deliverables to ensure that our
Presidents' meeting will be a success, he added.
¶4. (C) VFM Bang began by reflecting on the progress in our
bilateral relations over the past three years of the
Ambassador's tenure, concluding by stating that our relations
are at a "high mark" politically and diplomatically, our
economic ties are expanding rapidly and the relationship has
even grown to include cooperation on military and security
issues. He said that the Government of Vietnam (GVN) shares
the desire to ensure a highly successful visit by President
Triet (even more successful than the 2005 visit of then-PM
Phan Van Khai, he hoped), and is "working hard" to conclude
agreements on a list of deliverables - commercial and
otherwise. Vietnam expects this visit will continue to
expand, deepen and broaden our relationship in the interest
of both countries.
Triet Visit Logistics
---------------------
¶5. (C) Vietnam is considering sending an advance team to
Washington by the end of May to prepare for President Triet's
visit. The advance team would likely be headed by VFM Bang's
probable successor, AFM Pham Binh Minh. The MFA officials
said the Embassy in Washington would be reaching out to the
Department in the next day or two to discuss the possibility
of an advance team.
¶6. (C) While travel plans are not final, President Triet and
his delegation intend to leave Hanoi for New York City on
June 18 or 19. They will remain in New York for one or two
days, arriving in Washington on June 21. Following Triet's
June 22 meetings at the White House and elsewhere in
Washington, he will depart late that evening or early June 23
for a day of meetings in Los Angeles (the timing depends upon
the scheduling of a requested meeting with the mayor). Triet
and the delegation will return to Hanoi from Los Angeles.
Despite earlier considerations, Triet will not visit Canada
on this trip. The MFA officials do not yet have a final list
of the delegation members, but offered to provide the USG
with that list and a final schedule as soon as it is
available.
Joint Statement and Vietnam's Protocol Request
--------------------------------------------- -
¶7. (C) The MFA officials expressed hope that President Triet
and President Bush's meeting would yield a "forward-looking"
Joint Statement that builds upon the November Joint Statement
and outlines the landscape for closer cooperation in coming
years. Noting that this would be the White House's call, the
Ambassador emphasized that any Joint Statement must be
HANOI 00000898 002 OF 005
"robust" and underscored the importance of concluding
agreements on deliverables now for inclusion in that possible
Statement. DG Que offered to provide a first draft this week
as a jumping off point, and VFM Bang proposed that the two
sides sit down "in the next week" to go through each
potential deliverable in detail. Bang added that, in
addition to a positive Joint Statement, the GVN hopes that
the White House will agree to allow President Triet to stay
at Blair House.
U.S. Deliverables
-----------------
¶8. (SBU) Both sides agreed that the signing of a Trade and
Investment Framework Agreement (TIFA) during the visit would
be an important step forward in the relationship. VFM Bang
and the Ambassador each expressed confidence that the TIFA
would be ready by the visit, as the two sides are close to an
agreement. The TIFA could be used as a platform to help
Vietnam pursue possible participation in the Generalized
System of Preferences (GSP) program, which DG Que
acknowledged would be a long process and not something that
could be announced during the June visit.
¶9. (SBU) Noting that we are in a position to seal a number of
high-profile, high-value commercial deals, the Ambassador
pressed the MFA officials for progress on agreements with
Boeing, AES (power plant), Alcoa, SSA Marine (ports) and
Gannon (power plants), among others. If Secretary Gutierrez
is to preside over a signing ceremony in Washington, as he
has indicated an interest in doing, we will need to know what
contracts will be included. Que assured the Ambassador that,
at the direct order of the Prime Minister, the GVN is
"working hard" to make a final determination on these deals.
VFM Bang reported that the Prime Minister personally
mentioned to him that Boeing had improved its loan offer to
now be in line with the Airbus offer, which he described as
an encouraging sign. The officials could make no additional
commitments beyond the assurance that the GVN continues to
work these issues.
¶10. (SBU) Recent discussions between the Embassy and the MFA
have yielded some progress on amending an existing Letter of
Agreement (LOA) to include intellectual property protection
technical assistance to Vietnam's Customs Department, the
Ambassador said. The U.S. side would be coming back with
amended language shortly, and signing the LOA would be ideal
to mention in a possible Joint Statement, he said.
¶11. (SBU) Agreement to expand cooperative law enforcement
efforts would contribute to the success of the President's
visit, the Ambassador continued. Although cooperation
between law enforcement agencies has improved, more work can
be done in information sharing. Anti-money laundering (AML)
is one example where we can work together. Upon request, the
United States is willing to provide comments on Vietnam's
existing AML law and work with Vietnam to make it more
effective. The USG also strongly supports Vietnam's interest
in joining the Asia Pacific Group's Financial Action Task
Force for Asia and encourages Vietnam to formalize its
membership as soon as possible, the Ambassador said.
¶12. (SBU) Some progress has also occurred on discussions to
begin a Peace Corps program in Vietnam, the Ambassador noted.
It is clear that Vietnam has considered the Peace Corps'
requests, and we have conveyed the GVN's latest ideas to
Washington, the Ambassador explained. We are now awaiting
the response. The Ambassador will meet with Minister of
Finance Ninh this week, and will raise the question of
immunities, privileges and taxes for Peace Corps volunteers.
Vietnam's Deliverables
----------------------
¶13. (SBU) For its part, Vietnam is requesting assistance from
the United States to set up a world-class university, VFM
Bang said. DG Que claimed that the Ministry of Education and
Training (MOET) submitted a concept paper to Washington
during DPM/FM Khiem's March visit. GVN officials will be
meeting with Harvard University during their trip to the
United States. Pursuing contacts with the private sector,
including universities like Harvard, is the right approach,
explained the Ambassador. He agreed to note Vietnam's
interest in including language on this issue in a possible
Joint Statement and requested from Que a copy of MOET's
concept paper to share with relevant USG agencies.
¶14. (SBU) DG Que also raised the possibility that the
HANOI 00000898 003 OF 005
Ministry of Posts and Telematics (MPT) may sign an agreement
with Microsoft in Washington to purchase licensed versions of
Microsoft Office. He noted that Microsoft is pushing to sign
the agreement during a planned visit to Vietnam by its CEO,
Steve Ballmer, before President Triet's visit, but is
uncertain if that would happen. In either case, this
agreement would be an important symbol of Vietnam,s
commitment to protect intellectual property rights and
something they hope to include in a possible Joint Statement.
¶15. (SBU) Vietnam's Ministry of Science and Technology (MOST)
has also made progress in its work with the U.S. Department
of Energy on the use of nuclear technology for peaceful
purposes. Que underscored that MOST and DOE are happy with
their cooperation, and this could also be an item for
inclusion in the Joint Statement.
¶16. (SBU) Vietnam would also like to build upon the dioxin
language in the November joint statement by offering
something new in June, VFM Bang said. Language on new
cooperation on de-mining and the clearance of unexploded
ordinance would also be welcome, DG Que added.
Human Rights
------------
¶17. (SBU) Introducing the main topic for discussion during
the two-hour meeting, Ambassador Marine told VFM Bang that
the economic progress and potential commercial deals
notwithstanding, human rights issues are now attracting more
attention in the United States than at any other point in his
tenure in Vietnam. The GVN should find a constructive way to
address USG concerns over its recent crackdown, which will
certainly be a significant topic of discussion during the
Triet visit. He pointed to the recent release of Phan Van
Ban as evidence that the two sides can cooperate together.
¶18. (SBU) VFM Bang recognized that the two sides view the
issue from different perspectives, explaining that the recent
arrests arose from concerns over Vietnam's security. He
raised the war legacy and the fear that former South Vietnam
soldiers and others are working to organize groups or parties
not only to change the way the GVN operates, but also to
overthrow the government entirely. This would "threaten the
stability and security of Vietnam." Vietnam looks to
separatist movements and terrorist elements in other
Southeast Asian nations and draws the strong lesson that its
first priority must be safety and stability, and that any
changes in its system of governance will have to come slowly
and systematically to avoid political instability.
¶19. (SBU) While the United States may view human rights as an
important issue, Vietnam accords the matter less weight,
viewing it as "only one of many" issues between our
countries, Bang said. He also requested that the United
States consider religious freedom and human rights as two
separate issues. Vietnam would like to prevent human rights
critics in the United States from using recent arrests to
place Vietnam back on the List of Countries of Particular
Concern (CPC), which would be unwarranted in its eyes given
continuing progress on religious freedom issues. The
Ambassador agreed that Vietnam has made progress on the issue
of religious freedom, and stated that he is unaware of any
official consideration of putting Vietnam back on the CPC
list.
¶20. (SBU) The Ambassador said he understands ) but does not
agree with - Vietnam's views of its security concerns, but
emphasized that the USG has seen no evidence that any of the
recently arrested dissidents have advocated violence. We do
not support those who promote the use of violence, he
explained, and in fact want to work with Vietnam to counter
those actions. Rather, the United States views recent cases
such as the convictions of lawyers Nguyen Van Dai and Le Thi
Cong Nhan and others as freedom of speech issues, a
fundamental value for the United States. Not only do we
disagree with the recent arrests of individuals who were
peacefully expressing their political views, but believe that
the sentences are harsh in proportion to the so-called
"crime" of which they are accused, the Ambassador said.
Given that the Party is firmly in power and under no threat,
the USG views recent actions, and the reliance on Article 88
(under which recent dissidents have been convicted), as
attempts to stamp out freedom of speech and forestall any
attempts to peacefully advocate for political change.
¶21. The Ambassador noted that the two sides need to come to
HANOI 00000898 004 OF 005
RIGHTS, A/S HILL VISIT AND OTHER BILATERAL ISSUES
some agreement about interactions with family members of
jailed dissidents. He expressed his surprise at a recent
statement by MFA official Duong Chi Dzung (at the Human
Rights Dialogue) that, "the Ambassador is able to meet
whomever he likes." This statement came one day after the
Ambassador's second attempt to host the wives and mothers of
several jailed dissidents (who themselves have not been
accused of any crime) for tea. He asked that the MFA
officials share the view with others in the GVN that recent
GVN steps against dissidents and actions to prevent the
Ambassador and other Mission staff from meeting with family
members and others only strengthen the groups overseas who
are rallying support in opposition to the GVN and the
bilateral relationship.
¶22. (SBU) In the context of increased concerns over human
rights, VFM Bang promised that Vietnam would "give
ammunition" to counter criticism in the United States ) from
Capitol Hill and elsewhere ) in the run-up to President
Triet's visit. For one thing, Bang said that the pace of
arrests would likely slow down from now on (to which the
Ambassador countered that many will believe that this is
because there is no one left to arrest). In addition to the
recent release of Phan Van Ban, Vietnam is considering an
amnesty "in the next several weeks" for Nguyen Vu Binh as a
gesture by Vietnam tofulfill DPM/FM Khiem's promise to
Secretary Ricelast November. When pressed by the
SIPDIS
Ambassador, V Bang expressed confidence that this would
happe before President Triet's visit and that the DPM/FM
plans to write to the Secretary on this matter.
¶23. (SBU) Vietnam is also considering how to deal with
(former NED fellow) Le Quoc Quan; the GVN understands well
the sensitivities surrounding this particular case and
acknowledged receiving a letter from Senator McCain urging
Quan's release. Director General Que interjected that the
GVN did not take action against Quan because of his
connections to NED; rather, they are concerned about his
alleged connections to the Viet Tan "terrorist group." VM
Bang could not commit to anything during the dinner, but
informed the Ambassador that they are considering how to deal
with the case in a way that will help the atmosphere between
our two countries. The Ambassador said that given concerns
by U.S. political leaders over Mr. Quan's case, positive
actions by the GVN would attract considerable attention.
¶24. (SBU) For its part, the GVN is asking that the United
States "tone down the rhetoric" surrounding human rights,
explaining that this request has come from "the highest
levels," VFM Bang said. The Ambassador noted that recent
arrests hurt Vietnam's image as it takes on a greater role
internationally. That being said, he stressed his
determination to seek a way to work together to prevent this
issue from overshadowing the visit, noting that amnesty for
Mr. Binh and positive action on Mr. Quan's case could improve
the atmosphere and inject additional momentum in preparations
for the President's visit. He also suggested that another
way to demonstrate human rights progress would be through
cooperative efforts in the area of strengthening rule of law,
civil society and good governance, as Senator Leahy recently
proposed to President Triet. Should the sides reach an
agreement on this issue, it could be highlighted during the
President's June visit.
Other Bilateral Issues
----------------------
¶25. (U) The Ambassador lamented that the two sides have still
not reached an agreement on land for a New Embassy Compound
in Hanoi. He continues to hope that the two sides can reach
agreement before he leaves Vietnam. Progress on an agreement
to open new consulates/American Presence Posts could also be
included, in general terms, in a possible joint statement if
Vietnam and the United States can reach some agreement on
this, including an equitable arrangement on consular
districts. U.S. parents adopted more than 100 children in
Vietnam last month, the Ambassador noted, but as this program
expands, so too are the signs of fraud. The Ambassador urged
Vietnam to set a schedule of fees to avoid baby-buying and
other problems, and added that he intends to raise this with
Finance Minister Ninh this week. Noting that our
relationship is now mature enough, Ambassador Marine
encouraged the MFA officials to respond to the draft
Bilateral Work Agreement that the USG presented several
months ago. This agreement would clearly benefit both sides,
he said.
A/S Hill's Visit
HANOI 00000898 005 OF 005
----------------
¶26. (SBU) VFM Bang reported that the MFA has been making
active preparations and is prepared to receive Assistant
Secretary Hill during his May 23-24 visit to Hanoi. VFM Bang
SIPDIS
himself will unfortunately be in Seoul during the Assistant
Secretary's visit; at the same time, VFM Le Cong Phung has to
SIPDIS
travel to Europe and VFM Nguyen Phu Binh will be in Tokyo.
VFM Vu Dzung is therefore planning to host and meet with A/S
Hill. Bang agreed that the Office of Government (OOG)
Chairman Doan Manh Giao would also be a good interlocutor to
discuss broad, cross-cutting issues.
MARINE
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Posted in Africa, Microsoft at 5:30 pm by Dr. Roy Schestowitz
Summary: A cable explaining Microsoft’s affairs with the Algerian government
THE FOLLOWING Cablegate cable is from almost 4 years ago and it helps complete this other insulting cable from in Algeria.
VZCZCXRO2537
RR RUEHTRO
DE RUEHAS #1581/01 3030607
ZNR UUUUU ZZH
R 300607Z OCT 07
FM AMEMBASSY ALGIERS
TO RUEHC/SECSTATE WASHDC 4760
INFO RUEHFR/AMEMBASSY PARIS 2384
RUEHLO/AMEMBASSY LONDON 1738
RUEHMD/AMEMBASSY MADRID 8660
RUEHRB/AMEMBASSY RABAT 1990
RUEHTU/AMEMBASSY TUNIS 6841
RUEHTRO/AMEMBASSY TRIPOLI
RUEHNK/AMEMBASSY NOUAKCHOTT 6077
RUEHNM/AMEMBASSY NIAMEY 1332
RUEHBP/AMEMBASSY BAMAKO 0280
RUEHCL/AMCONSUL CASABLANCA 3105
RUCPDOC/DEPT OF COMMERCE WASHDC
UNCLAS SECTION 01 OF 02 ALGIERS 001581
SIPDIS
SENSITIVE
SIPDIS
E.O. 12958: N/A
TAGS: ECON [Economic Conditions], EINV [Foreign Investments], ETRD [Foreign Trade], KIPR [Intellectual Property Rights], AG [Algeria]
SUBJECT: (MICRO)SOFT DIPLOMACY, VERSION 1.0
¶1. (U) SUMMARY: Microsoft CEO Steve Ballmer paid a brief visit to
Algeria in a trip touted as an opportunity for Microsoft to help the
GOA expand Algeria's information and communications technology (ICT)
sector and enhance its education system. Ballmer said he was
inspired by the GOA's commitment to technology development and by
the potential for market growth in Algeria. ICT insiders suggested
that the CEO visited Algeria in an effort to enhance Microsoft's
government relations, and to signal that its recently reorganized
business unit is serious about this market. Meanwhile, firms are
optimistic about the ICT sector in Algeria, but are skeptical about
whether Microsoft can effectively expand its software marketing
here, or expect to make any progress combating piracy. END
SUMMARY.
¶2. (U) In a whirlwind visit on October 3, Ballmer met with President
Bouteflika and several ministers to discuss the development of the
technology sector in Algeria, the use of IT start-up companies as a
means to energize the Algerian economy, and access to computers in
Algeria's schools. Ballmer later told a group of Microsoft partner
firms that the greatest growth potential for the ICT industry lies
in emerging markets like Algeria, where ICT structures can be
expanded to tap into significant populations hungry for access to
Web-based entertainment and educational services. (Note: 7.3
percent of the Algerian population has access to the Internet,
compared to a 0.2 percent penetration rate in 2000, according to
recent data compiled by the International Telecommunication Union.
End note.) Ballmer said that he came to Algeria to evaluate his
local team's recommendations for expansion, which he will consider
in early 2008. He told the industry group that he was "inspired by
the president's thoughtfulness toward the future," and that he saw
potential growth across all economic sectors.
BUT STILL, WHY COME TO ALGERIA?
-------------------------------
¶3. (SBU) Microsoft recently split its regional marketing division
and created the Microsoft Algeria business unit. Because of the
terrorist activity in Algeria in the 1990s, Microsoft established
its North African headquarters in Morocco, which local IT
representatives and former Microsoft employees say the GOA never
forgave. Ballmer's visit to Algeria appeared timed to show
corporate support for the new Algerian unit's government relations
efforts, and an attempt to relieve past tensions between the GOA and
Microsoft.
HOPE SPRINGS ETERNAL, BUT SO DO CLONES AND PIRATES
--------------------------------------------- -----
¶4. (SBU) Industry representatives told Econoff that they were
optimistic about the near-term future of the ICT sector in Algeria.
Abdelaziz Ben Aissa, the general manager of a certified Microsoft
business solutions firm, said that the GOA seems focused on ICT
issues and opportunities are expanding. Ben Aissa's firm provides
support services for Northrop Grumman information systems. He works
extensively with the Algerian federal police, with whom he expects
more contracts to support expanding communications and information
systems. Djamal Hadjout, the information services director of an
Algerian wholesaler representing a number of leading American
computer periphery brands, said business is generally growing and
that retailers are finding new customers among both Algerian
corporate and individual consumers. He noted that American products
continue to be associated with quality and prestige but are
considered expensive.
¶5. (U) IT representatives were at the same time skeptical that
Microsoft will be able to raise significantly its stake in the
Algerian consumer software market or to combat piracy effectively
because of the relatively high price of its products and the
continued weakening of Algerians' buying power. They said that most
personal computers sold to households are clones assembled in
Algeria, and that most people buy pirated copies of operating
systems like Windows and other software applications for as little
as two dollars. Further, according to recent news reports,
electronics represents the second-largest category of goods smuggled
into Algeria (after cigarettes), and overall customs seizures of
contraband rose significantly throughout 2007. Given Algeria's
rising cost of living and high unemployment rate, the ICT
representatives saw little hope that Microsoft will be able to
counter these IPR challenges anytime soon. Ballmer was asked about
this dilemma, but gave only a general response about his company's
ALGIERS 00001581 002 OF 002
commitment to finding innovative solutions to specific markets and
his confidence that the GOA will move in a positive direction
regarding ICT use and development in Algeria.
¶6. (SBU) COMMENT: Ballmer's visit, along with the recent creation of
Microsoft Algeria, likely went a long way to meeting Microsoft's
government relations goals. Some in the business world interpreted
President Bouteflika's overt hospitality to a corporate leader as a
sign that the GOA is serious about its stated intent to build out
Algeria's ICT sector, improve the country's education system through
access to technology, and see that every Algerian family has a
computer at home. Nonetheless, the challenges of contraband
hardware and pirated software remain significant as the high cost of
living continues to influence not only consumer decisions regarding
brand preference and when to buy, but also the choice between
licensed, cloned or pirated goods.
FORD
This is the perspective of US diplomats. They ignore all the critics of these affairs, as one might expect (sometimes, as we have shown before using other cables, critics are comped to “conspiracy theorists”). █
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Posted in Apple, GNU/Linux, Google, Microsoft, Patents at 11:29 am by Dr. Roy Schestowitz
Summary: An accumulation of the latest articles about the USPTO, its so-called ‘reform’, and the reality of patent aggression and trolls
JUST when the SCO case was coming to its very end, we were seeing a rise in patent attacks on Linux, not just copyright attacks. It was also when Linux became a leader in mobile platforms that the attacks truly soared, just as the attack from SCO started when GNU/Linux had gained rapidly on servers. The timing made sense because if someone claims ‘damages’ and demands royalties, it is reasonable to make sure the return is greater than litigation expenses.
Currently, Apple becomes a bit like SCO, as did Microsoft a few years ago. Apple is not invincible at all as it recently lost its main brand, Steve Jobs. Jay from the 451 Group speaks of lessons of SCO in his latest fine article which the editor summarised as follows:
SCO showed that convoluted contract, IP and other courtroom claims make for long, convoluted courtroom processes. Considering the SCO case in its totality, it seems the more the company relied on legal means to compete or limit other competitors, the further it strayed from users, consumers and its core business.
Yes, that sounds just like Apple and Microsoft. Apple is too busy trying to block the competition, so people can lose sight of Apple’s future products; as for Microsoft, just watch what happened in the mobile arena. Microsoft was too busy filing patents; not much real work got done. Linux leapt ahead in the mean time and it is reported that Android does to Apple in tablets what it already did to it in phones. Fantastic! But we must not lose sight of the constant attacks on mobile Linux.
“But we must not lose sight of the constant attacks on mobile Linux.”Red Hat’s Open Source site features an article by Keith Bergelt and it focuses on the mobile patent wars that affect Linux. There are several platforms affected by this and they include MeeGo and WebOS, both of which were weakened recently. Patents had a little to do with it, based on numerous reports. “RIM Patents Rotating Keyboard Keys” we learn from a new article, so there is clearly quite a maze of patents being created not just by Microsoft’s and Apple’s cartel. It affects not only the United States because some of the patents are design related, not purely software (which is controversial too). The FSFE writes about software patents in Europe this week, deciphering the situation in Germany where Apple has most prominently been attacking Android.
There is an analysis from patent maximalists regarding the ruling that may weaken or eliminate a lot of software patents rather than one at a time (reexamination). To quote the part freely accessible to the public:
August 16, 2011, the Court of Appeals for the Federal Circuit (CAFC) issued its decision in CyberSource Corp. v. Retail Decisions, Inc., affirming patent-ineligibility of a reexamined software patent. The patent-in-dispute, U.S. Patent 6,029,154, is directed to detecting credit card fraud on the Internet and claims 2 and 3 were at issue. The court’s reasoning recognized that software is still patent-eligible after Bilski, but held that the bar has been raised – which has important implications for the software industry.
Well, based on further analysis in the Oracle vs. Google case, even Google has started working towards the weakening of software patents. It’s very important. Quoting Pogson:
Google has moved for summary judgment that using Java APIs is not copyright violation. Oracle has replied. Oracle is trying to persuade the court that APIs are protectable despite much legal precedent as far back as 1879:” the Supreme Court made clear that publication of a book that explains a particular accounting system gives the author no rights under the copyright laws to prevent others from using the system, as long as no protectable expression from the book is copied. Baker v. Selden, 101 U.S. 99 (1879); see also 17 U.S.C. § 102(b) (“In no case does copyright protection . . . extend to any idea, procedure, process, system, method of operation, concept, principle, or discovery, regardless of the form in which it is described, explained, illustrated, or embodied in such work.”). Oracle’s Java language books and API specifications give Oracle no greater rights to prevent implementation by others of the APIs using original code.”
Google is now in a position where the low cost advantage of its main operating system (RHEL, Chrome OS and Goobuntu aside) is in jeopardy. Even CNN has a new article on the subject, stating initially that:
If you feel like you’ve been seeing more news about patents than ever before, you have. In July, a consortium that included Apple, RIM and Microsoft made a move on Nortel’s patent portfolio, outflanking Google. In August, Google hit back by proposing to acquire Motorola Mobility in a $12.5 billion deal, largely for its massive cache of patents. HTC and Apple continue to spar in court over patent infringements. And now, Kodak and InterDigital are being eyed for their intellectual assets. Patent lawsuits in the U.S. rose to 2,833 in 2010, up nearly 25% from a decade earlier, according to IP litigation research firm Lex Machina. The 2011 total will almost certainly be higher.
What exactly is going on? How did a seemingly sleepy subject like patents suddenly become an active fault line in American business?
Adding to this the presence of patent trolls like Acacia, it sure seems like the system has become a mess. According to this new article, this massive troll has just extorted yet another company. To quote:
Newport Beach-based Acacia Research Corp., which licenses patents for companies, reached a settlement and licensing agreement with Salt Lake City-based Internet retailer Overstock.com, the company announced Tuesday.
The agreement resolves litigation that was pending in the United States District Court for the Eastern District of Texas.
Jerry Brito, a senior research fellow at the Mercatus Center at George Mason University, spoke to Tim Lee on the subject of today’s patent ‘reform’. No real reform has yet been implemented, just a bogus one. The article “How Congress Just Failed to Fix America’s Broken Patent System” has just been published in a reputable site which put forth the following idea:
The second thing you need to know is that the U.S. Patent and Trademark Office has been so neglected for so many years — literally robbed of funds by Congress, which re-appropriated portions of the agency’s budget for other purposes — that the organization tasked with protecting America’s technological and scientific assets labors with too few staff and a “20-year old technology infrastructure that does not even remotely enable it to take advantage of modern information technology.”
Maybe this is why it has granted a monopoly to almost any patent applicant, which aided the patent trolls, helped patent lawyers make more money, and gave the mere illusion that innovation was on the rise. The latest reform does almost nothing to change this, so the mobile patent wars are probably here to stay for a while longer. We predict a growing level of backlash against the USPTO in years to come. It might suffer the same PR problem as the Federal Reserve.
Looking at Law.com, Ben Henrion finds this article titled “Patent Law’s Passage Spurs Flood of New Complaints”. It quotes Chaikovsky as saying: “At least in the short term, there’s going to be a lot more patent litigation. That means litigators will be busy.”
This new Patently-O Blog about “the International Harmonization of Patent Laws” led Henrion to warning about the “Combination of an English respect for precedent with a Germanic desire for consistency and uniformity” as “EPO ‘caselaw”.’ To quote:
International harmonization has always been seen as a major purpose of the Leahy-Smith America Invents Act. Every country has its own patent structure as does the European Patent Office. Ongoing differences between the various countries add substantial transaction costs to the process of obtaining and enforcing patents. Many US companies would like European patents, but the prospect is often cost prohibitive.
Although disputed, most would agree that the Leahy-Smith’s new filing-date focus moves the US closer an international patentability norm. Still, a number of important differences remain between US law and the laws in other major patent centers. As a result, the US law has not been internationally harmonized, but it has been shifted in that direction.
See our post about the ambitions to establish the interpol of patent systems. Microsoft craves it. █
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