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August 30, 2006
Dell Loses China Trademark Suit
The Beijing News reports that Dell has lost its trademark suit against a Foshan (广东佛山) research institute, which had in 1997 registered a trademark for “德尔,” a transliteration of the Dell name. Dell has long since made use of another Chinese name "戴尔", which, to my ears, sounds rather more attractive. The article in full reads:
戴尔起诉要求撤销“德尔”商标
一中院经审理维持商评委裁定，戴尔一审败诉
本报讯（记者吕佳瑜 通讯员郭京霞）戴尔公司以其“DELL”商标的中文译名与广东一家研究所注册的“德尔”商标相近似为由，要求国家工商总局商标评审委员会撤销“德尔”商标未果，遂将商评委诉上法庭。北京市一中院近日作出一审判决，驳回戴尔公司的诉讼请求。
1997年2月，广东佛山兴禅高新技术应用研究所申请注册了“德尔”商标，指定使用的商品为“计算机，电子记分器等”。戴尔公司认为该商标侵犯了戴尔公司的在先企业名称权，于2000年11月29日向商评委提出申请，请求撤销该商标。
戴尔公司称，其在1991年开始陆续在中国申请注册了“DELL”商标。其产品大规模进入中国市场前就选择“德尔”一词作为其驰名商标 “DELL”的中文音译商标，同时“德尔电脑股份有限公司”也是“DELL”最初进入中国市场时正式使用的商号。2005年，商评委经审理作出裁定，维持了广东的“德尔”商标。
商评委裁定后，戴尔公司不服，向一中院提起诉讼，请求法院撤销商评委的决定，撤销争议商标注册。
一中院经审理认为，商评委的决定维持争议商标的结论正确，审理程序亦符合法律规定，驳回原告戴尔公司的诉讼请求。
A reader with a transcript of the judgment （if one there be) is encouraged to send it to me at the email in the right sidebar.
Posted by Richard at 1:06 PM | Comments (0)August 29, 2006
EVENT: COMMERCE OFFICIAL SPEAKS ON CHINA IN MANHATTAN
“Doing Business in China”
Speaker: Jonathan M. Heimer, Deputy Principal Commercial Officer, U.S. Commercial Service, Consulate General of the U.S., Shanghai
Time: Friday, September 8, 2006, 8:30 am – 10:30 am
Location: Weissman Center for International Business, Baruch College, Room 14-285, 55 Lexington (corner of Lexington and 24th Street), New York City
Topics addressed include
* The state of China's Intellectual Property Rights
* What measures are you exercising to protect your IPR in China?
* Payment scams by Chinese companies.
* Why is China’s legal environment currently under attack?
* Why the recent upswing in Chinese economic nationalism?
* Export services to China -- financial, legal, and marketing -- provided by the U.S. Commercial Service to U.S. exporters.
Presented by the Commercial Service of the U.S. Department of Commerce and The Weissman Center for International Business.
For further information, contact:
Alice Chan, International Trade Specialist
Tel: 212-809-2678
U.S. Department of Commerce, U.S. Commercial Service
New York U.S. Export Assistance Center
www.buyusa.gov/nyc
August 28, 2006
Reflections on Transitions in Japanese Business Practices from the Bubble Era to Today (Part III)
Highly Adaptive Abroad, Japanese Firms Struggle to Integrate Global Best Practices at Home
[Editor's Note: With many thanks to the author for his insight, we conclude Shawn Beifuss's series on Japanese business management practices. Part I may be found here; Part II, here.]
Fast forwarding from my departure from Denso in 2002 to today, and I currently have spent just over one year employed with a Japanese logistics provider based in Tokyo. Operating in the middle market and family-owned since 1924, this firm’s work environment illustrates the fact that the majority of Japanese companies—primarily the 2nd and 3rd tiers—have been heavily insulated domestically from learning the lessons that firms like Denso have by venturing abroad in the late 1980’s. Especially in the Japanese trucking industry, which is fragmented amongst approximately 60,000 firms, the traditional approaches to strategy management and human resource management remain entrenched.
This traditional style of strategy management possesses a decision-by-committee orientation that encourages highly iterative versus transformative initiatives. By iterative initiatives I refer to activities that seek to improve upon past practices without a significant change in management structure, systems and philosophy. Transformative initiatives on the other hand typically require a paradigm shift where the perceptions of and approaches to a firm’s current business realities experience foundational change. In the iterative environment, improvements can “get by” through reliance on the homogeneity of the Japanese workforce to bond together towards a common goal. This approach doesn’t employ communication tools that explicitly link a pronounced strategy or policy to individual objectives—it is assumed “the group” collectively understands their role in relation to policy announcements.
Obviously, such an iterative approach requires a longer time horizon to effect change; in this context, human resource managers can feel at ease with the traditional seniority-based system that defers to length of employment or age level. Training in such an environment also follows an iterative approach—absent any external effort, employees learn at the pace of the firm. In the past, when Japanese firms could rely on a lengthy if not lifetime period of loyalty from their employees, this system made sense or at least was sufficient. But the Japanese employment picture of today has changed dramatically, and Japan’s 2nd and 3rd tier firms along with the Japanese tertiary educational system are struggling to keep up. Data released earlier this year on the program “Up Close” via NHK, Japan’s public broadcaster, showed that more than 30% of all new employees freshly graduated from college quit their job within three years.
From my experience working in my current firm and discussing this trend with our own new employees just out of college, as well as with friends working in other companies, it seems that the following conditions generally exist:
1.) Lack of fundamentals upon university graduation: The majority of university students in Japan graduate with very few of the skills necessary to be successful employees via their own resources. The university system is such that it is still generally based on the old system of deferring to companies to train and educate the workforce to be productive and successful.
2.) Poor utilization of new human capital on-the-job: Since a significant number of graduating students no longer enter companies with the expectation of seeking lifetime employment or with the loyalty traditionally expected of new recruits, a mismatch between training and employee placement occurs. The result is many university graduates learn on the job at a pace below their abilities—I estimate anywhere from only 30-50%—and quit the firm before the company is able to maximize the contribution of that employee—this in a period of 3-5 years. As an example, one ex-coworker of mine spent three years in the finance department but, after leaving the firm, realized in later interviews that his knowledge of financial management and financial tools significantly lagged his peers of the same age.
3.) Death spiral of low expectations hindering corporate performance: With a significant number of new employees lacking the discipline and resourcefulness to self-educate and the majority of Japanese firms lacking the training systems to maximize employee contribution, there is an increasing trend of looking outside the firm for managerial talent. Often, these management hires are older workers forced into retirement in their 50’s and 60’s by larger firms restructuring or descending from the hiring firm’s own customers. In this case, the often lack of knowledge of the firm and its services/products upon employment ensures at least a short-term drop in corporate performance. At the same time, lower-level employees become more and more discouraged with a system that fails to provide dynamic personnel development and promotional opportunities that match pace with the challenges of today’s rapid globalization. A death spiral ensues where the firm continues to rely on older employees with a lack of practical and current business knowledge for management positions while these managers are considerably negligent in developing younger employees to eventually replace them.
The top-tier firms manage to hold their own in terms of training and have done a great deal to adapt to globalization and the use of global best practices. As the first and only Westerner to be hired in my firm, I am attempting to change the approaches and perceptions described above one step at a time. But these types of firms can hire the best talent in the world and they will be relatively marginalized or fail because they work in a system that does not identify, maximize and reward talent. Rather, a system that does cultivate talent in the appropriate manner can turn ordinary employees into stellar performance contributors.
Even being constrained by the type of system described above, I feel my Western education has cultivated in me the resourcefulness and discipline necessary to educate myself as needed to reach my professional goals. I honestly believe that one reason Westerners excel in innovation and leadership more quickly upon entering the workforce than many Asian employees is due to the Western tertiary education system. Although the students of Asian countries excel at the high school level in the testing of math and science knowledge, the majority of these students fall far behind at the tertiary level—in essence, the critical thinking and intensive focus on individual excellence that drives Western education is very absent in Japan’s universities. The difference can be clearly seen when comparing Japanese who have studied overseas at the university level versus the majority of their peers back home. So as a Japanese university student, if the first firm I work for upon graduation is not going to provide the foundation for success, it is up to that student to make-up the gap in moving along the learning curve. Unfortunately, from my experience so far, this perspective and skill set is difficult to transfer to my co-workers without being in a position as their direct superior.
Gradually, as more and more Japanese domestic firms realize that having a domestic-only business doesn’t exclude them from responding to the demands of globalization, those firms are demanding more from their management systems—especially such tools as metric-based performance measurement. This change will be painful and those Japanese firms that don’t initiate such a transformative effort will find themselves acquired by companies that will force it upon them, or gradually fall into bankruptcy, ceasing to exist. The strength of Japanese companies overseas, especially in the automotive industry, illustrates that it is possible for Japanese firms to succeed when the environment demands it. For Japan’s numerous domestic companies, it is of great importance to benchmark these success stories towards transforming their employee management syste
Posted by Richard at 9:29 PM | Comments (0)August 24, 2006
New Proposed U.S. Export to China Regulations Webinar
UPDATE: Tom Pifer of GRVR tells me that a repeat of this webinar will be held on August 31. Check out GRVR's website for more information.
Gonzalez Rolon Valdespino & Rodriguez has announced a webinar happening today at 10.30 am Central time (11.30 am Eastern).
[Note: This posting may not give you sufficient time in which to sign up for this webinar. However, please contact the firm through the URL above if you missed the webinar, but would like to take it.]
If you are an American exporter selling product to China, recently proposed changes to US export regulations may affect your business. Carol Kalinoski of Carol A Kalinoski & Associates in Washington, DC, has written that they will, "if made final...dramatically and adversely impact trade and finance between China and the United States and its allies."
Tom Pifer, an attorney with GRVR, describes the webinar:
"The webinar presents the proposed regulations that were published by the Department of Commerce - Bureau of Industry and Security on July 6, 2006. These regulations are in the Comment Stage right now. A finalized version is expected to be implemented in early 2007.
The webinar will cover the policy behind the regulations, as well as the major aspects of the proposed regulations, including: (1) a new license requirement applicable to 47 particular commodities when the exporter knows the goods are destined for a military end-use in China; (2) the creation of a Validated End-User (VEU) status for Chinese importers that would exempt the VEU from certain export licensing requirements; and (3) an expansion of the use of End-User Certificates issued by the Chinese Ministry of Commerce.
The audience should be able to take away a basic understanding of what is being proposed and the rationale for the change in regulations."
There is a fee. See this page to participate in the webinar.
Posted by Richard at 1:49 PM | Comments (0)New PRC Foreign Investment Regulation
For those searching for it, newly promulgated regulation on the purchase of PRC enterprises by foreign investors may be found here (in Chinese).
Posted by Richard at 12:25 PM | Comments (0)August 22, 2006
Reflections on Transitions in Japanese Business Practices from the Bubble Era to Today (Part II)
[Editor's Note: Today's post is the second in a series by Shawn Beifuss of Asia Logistics Wrap. Shawn continues his discussion of Japanese business management practices begun here.
On the subject of Japanese transformations, you may also wish to read "Major Legal Reforms Expected to Bring Wave of New Lawyers in Japan."]
After graduating from college and entering the workforce in the summer of 1998, I discovered that Japan’s leading companies were learning to adapt in markets outside of Japan quicker than many might have realized, or wanted to believe, in the Western business community. What opened my eyes was a four-year stint working for Denso Corporation as a production engineering liaison. Denso is arguably the world’s current leader in the auto parts industry and Toyota’s lead supplier. I worked in Denso’s Battle Creek, Michigan plant, Denso Manufacturing, MI (DMMI), where approximately 2600 American employees are currently led by a mix of American and Japanese management. The facility was the first established in the USA by Denso in response to Toyota’s own venture into Kentucky, and began production in 1986. A book titled “Small Town, Big Corporation” about the story of DMMI’s establishment is an excellent case study to read, but unfortunately is out of print and difficult to find. However, the point I want to make is that even while the Japanese corporate system was being advocated during the 1980’s and oppositely criticized throughout the post-bubble period, Denso was already establishing a hybrid of American and Japanese best practices at Battle Creek that would become the foundation of its strong business success and resiliency across North America throughout the 90’s and into the 21st Century.
As a liaison, I witnessed on a daily basis the tension of such a hybrid management system, but at the same time observed the characteristics that made the company quite adaptive and competitively stronger than American suppliers, such as Visteon and Delphi. This can be seen in the firm’s resilience and upward trajectory throughout the automotive industry’s struggles post-IT bubble and the 9/11 terrorist attacks—a period during which its customer base was almost 50% non-Toyota auto makers. Steeped in the principles advanced by Toyota via the Toyota Production System, Denso’s management succeeded in bringing about a culture where the predominantly American workforce adopted Japanese best practices and vocabulary in terms of team-driven, quality management and continuous process improvement. For example, words like kaizen, genba and heijunka do not need translation (continuous improvement, work floor, and leveling, respectively). Americans work alongside Japanese peers for every production line start-up and regularly participate in global innovation and quality circle tournaments sponsored by Denso Corporation headquarters.
At the same time, the predominantly Japanese management developed the ability to lead with the performance-based incentives and directness desired by American employees. Every Japanese president has been known to make regular visits to production lines to converse with employees; management feedback forums are held once per month so that employees can directly bring concerns from the genba to DMMI executives; and a famous process improvement incentive program supports individual kaizen suggestions that save DMMI money, but also over time provide employees with increasingly bigger rewards—the largest prize being a completely new, personally selected automobile via a DMMI customer. DMMI was able to do this through a unique co-management system where American managers pair up with Japanese transplant managers up to the vice president level (the president is always Japanese). Despite regular, ongoing tension regarding information sharing between Japanese and American managers, DMMI has been able to capture the strengths of both cultures in a management system that provides regular reviews, transparency, and a dedication to employee development and empowerment that has made the firm truly a model place to work.
Stepping back to the see the bigger picture, however, these advances by Japanese firms operating abroad often face barriers toward being modified and adopted, even partially, for Japan’s domestic business environment. My next post will look at some of the key challenges domestic Japanese operations face and provide some thoughts to remember for future discussion.
Posted by Richard at 1:42 PM | Comments (0)August 16, 2006
"How Do I Get to China?"
[Editor's Note: Now and again, this writer hears from young men and women who wish to build a career in China, echoing aspirations I heard and similarly uttered whiles ago, when most of that vast nation was off-limits to foreigners. For me, who had been given extraordinary linguistic talents, China was the locus of a range of fascinating sounds and expressive concepts, which nation, by extension, must also have been as exotic, mystical and enjoyable in every other aspect.
That youthful idealism was highly imaginative, I found, upon arrival in a country where the traditional culture we had studied and venerated had been smashed; where ordained restrictions upon thought and behavior prevented the natural development of mind and spirit which thrives in liberty; where even the mere fulfillment of the bare necessities of daily life had become so onerous that one could hardly develop a life beyond it.
Some enthusiastically report that China has been transformed since those times. From my own experience in China, I would indeed agree that life now is easier for very many, certainly in the urban centers, but it does not approach the Valhalla imagined in the minds of many in the West, who seem to think their futures lie "over there," instead of "right here." This grossly expanding phenomenon is indicative of serious changes in the American mindset, as if Americans can no longer envision a future at home.
We are grateful to Mark Agrasut for today's post. Mark discusses legal careers specifically, but his post will likely prove helpful as well to those considering what might be called a China career. Mark is a solicitor with Linklaters, specialising on energy and infrastructure transactions, as well as project finance. He has also been a research associate and programme director at the Centre for East Asian Law at the School of Oriental and African Studies, London University (SOAS), The opinions expressed in this post are his own and do not represent the views of his firm.]
Possibly more so than ever, international law firms are targeting Asia, and especially Greater China. More and more newly-qualified lawyers are starting their careers with aspirations and intentions to work in Asia, and many are approaching the path as "Asia specialists" first, lawyers second. Having spoken to a number of aspiring China law specialists, trained in the UK/US, about career options, one notices more and more looking to spend a greater and greater proportion of their professional lives in the PRC. This note is a (slightly) amended posting which was made in relation to one such query (from a US-trained law student), detailing my point of view on the subject of starting a legal career at a China office of an international law firm. Let me qualify this by emphasising that this is all just based on unofficial information/personal views, and from informal discussions I have had with colleagues and lawyers in similar positions. Further, my intent is not to ignore the importance and accomplishments of the developing China-business environment, but to focus mainly on the potential breadth of experience at the cutting edge of commerce-side legal developments offered in more established legal/regulatory environments to lawyers trained within them, exposure to which may allow an aspirant China-specialist, for example, to bring more to the table when the time comes.
I think one needs to have in mind a long-term view when considering this sort of move. Starting your career and being hired to be in China may have a slightly limiting effect on your long-term options to practice anywhere else. My personal view on this is that in most areas of practice, starting out as a China-based foreign attorney may not serve you well if you intend to move back to a more mature jurisdiction later, especially if you're thinking of competing to secure your place working on complex, ground-breaking international deals in markets like London or New York. My experience has been that the ability to move laterally from a position in China (or any developing market) to an equivalent position in London is limited if you have no real grounding/transactional experience in the more mature legal markets.
I'd also say that the work you get in fast-developing markets has also often been more subject to macro movements in the market; you start as an energy/infrastructure sector lawyer, and then find yourself working on general IPOs the next year. In that context, you might find yourself being a China lawyer first and foremost, and a specialist in any particular field of law through necessity rather than choice. Of course, I also accept that there may be much to be said for "regional" specialisms, much as there are "industry/sector" specialisms: but it has always seemed to be the case that the process of globalisation diminishes the need for the former, whilst increasingly-sophisticated business practices demand the latter. On current trends, my inclination is to believe that sector specialism to be marginally more important.
That being said, an excellent lawyer anywhere should be an excellent lawyer no matter what, and there is a lot of valuable experience you can gain in China. Of course, you may only wish to practice in China, and not to practice in your "home" jurisdiction, in which case the position is different: bear in mind, however, the fact that foreign lawyers/law firms in China currently occupy a unique, but essentially medium-term position, that will erode as PRC law firms gain experience and expertise operating in and dealing with international standard environments/documentation. As the dynamic between foreign and domestic law firms changes, so will the profile of the lawyers involved. It may take a while, but I think it must happen, and at that stage you will be competing with PRC nationals who (forgive me for making quite an assumption) will in most cases have a greater grasp, linguistically and legally, of the nuances of the domestic market; as well as foreign lawyers entering a maturing market which is demanding cutting-edge legal products which you may not have expertise in.
In all honesty, I often question many of the UK/US lawyers-in-training who intend to start their professional practice in China and for whom that goal is paramount, because I haven't yet heard a really good professional reason why they've chosen to set out their stand and declare for China so early in their career; I do, however, hear an awful lot of personal reasons (and many reasons which are ostensibly professional but which often do not bear up to close scrutiny in the context of anything other than academia or certain types of development/NGO work). Essentially, my view is that the very best training and experience (with the greatest degree of transferability) is probably more easily found in the more mature legal jurisdictions, amongst those firms who consistently practice at the forefront of their fields of expertise. Unless the US firms are very different in their approach, I'd think long-term on this point, and bear in mind that (until China becomes an exporter of legal services on the scale of New York and London) the widest range of options are reserved for the lawyers with the greatest exposure to the widest spectrum of deals, who can practice almost anywhere they choose.
Posted by Richard at 2:03 PM | Comments (3)August 11, 2006
[Thanks to a number of readers who have asked about podcasts. Technical problems, as well as projects at hand, have delayed the recording of new podcasts. Apologies! We should have new podcasts available shortly. Past podcasts remain available for listening here].
Posted by Richard at 6:31 PM | Comments (0)White & Case Article on Chinese Stocks
Having ourselves penned a good deal of virtual ink on the subject of Chinese stock market reform (see our Investment archive), we thought it in order to recommend Seung Chong and John C. Leary's article on the development of the Chinese share system.
While much legal writing seems to be carved out of granite, theirs is not a ponderous read by any stretch of the imagination. I found especially practical and to the point their discussion of the legal issues involved in the acquisition of C and G shares by foreign investors.
Posted by Richard at 6:16 PM | Comments (0)August 8, 2006
Reflections on Transitions in Japanese Business Practices from the Bubble Era to Today (Part I)
[Editor's note: "Even an idiot can make money in easy times," said a Taiwanese business friend, once one of the largest garment manufacturers on the island and long since retired. "But the test of your commercial ability comes when times are tough. Try staying afloat then."
During the 1980s, this editor worked for Japanese corporations in Japan during the so-called semiconductor wars with the United States. Japanese had become mighty competitors, reducing venerable American brands to so much rubble. How had they done it? Americans wanted to know the secrets of Japanese success.
But then came China, and, oh, how the mighty have fallen! Or have they? What about those famed Japanese business practices? Have the Japanese adapted to changing commercial circumstances, and, if so, how?
Shawn Beifuss of Asia Logistics Wrap, discusses these issues in a series of posts beginning today. We are grateful to Shawn for his insight and permission to post on Asia Business Intelligence.]
Part I: Overestimating Japan in its Rise, Western Business Underestimated Japan in its Descent
During Japan’s bubble years throughout the mid- to late-1980’s, there were many books and articles written for the Western business community that advocated the “Japanese way,” and warning the Western business community to either adopt Japanese practices or lose out in head-on competition. A widely read book that exemplifies this period is titled “Kaisha: The Japanese Corporation,” and is reviewed at Amazon as follows:
“Much of the literature on the legendary success of the Japanese corporation has rested on the premise that the Japanese possess certain cultural traits, not easily transferable to the West, that provide them with inherent advantages in executing corporate strategy (see, for example, William Ouchi's Theory Z). Abegglen and Stalk, however, maintain that the successful strategies of the best Japanese “kaisha” (corporations) are more imitable than not. They discuss such learnable, competitive fundamentals as debt financing, high retained earnings, a short-run concern for building market share, and a partnership with labor. While the preoccupation with the Japanese managerial style can become tiresome, Kaisha offers a different interpretation and is recommended.”
I was assigned to read this book during my first visit to Japan as an exchange student at Waseda University in 1996, already about five years into the post-bubble era. By that time, the vulnerabilities of Japanese firms were regularly appearing in domestic newspapers in the form of high profile scandal, bankruptcy and financial mismanagement that extended to large contracts private firms held with the Japanese government. The aura of the Japanese firm’s prowess seemed to be crumbling and looked to give way to the West regaining its sense of superiority as the leader in global business practices. This background context while reading and dissecting Kaisha provided insight into both the origins of Japanese firms’ perceived unrivaled ascension and the sources of their increasingly publicized failures in managing business realities.
One more trip to Japan from January to March of 1998 to complete my senior thesis helped solidify the feeling that Japan was entrenched, at least domestically, in a downward trajectory in terms of its business climate. During those three months I stayed with a good Japanese friend from a wealthy family, and even their household had become quite conscious of their spending, pessimistic about the Japanese economy’s future. Interestingly, my friend’s father, who was president of a large film developing chain, directed most of his criticisms towards the knowledge and education of his sons, and by extension the younger population of Japan. His concerns then about the learning and progress of Japanese youth seem very prescient today, but as I will illustrate in my second post, any wholesale dismissal during this period by Western firms regarding the state of Japanese competitiveness would have been mistaken.
[Part II may be found here.]
Posted by Richard at 3:17 PM | Comments (0)
