Förderverein Informationstechnik und Gesellschaft

CHINA IP NEWS LETTER 1999.03.24 No.6

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Date:          Wed, 24 Mar 1999 13:44:08 +0800
From:          "Info - NTD Patent & Trademark Agency Ltd." <>
Reply-to:      info-ntd <>
Organization:  Yanshen
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To:            34 Axel H Horns <>
Subject:       CHINA IP NEWS LETTER  1999.03.24 No.6

------------------------------- CHINA IP NEWS LETTER 1999.3.24 (No.6)

Edited by the Department of Information and Consultation of NTD Patent
& Trademark Agency Ltd., Beijing, China  


[E9024] Internet Phone Businessmen Gets Day in Court

Although "calling global, paying local" via the Internet is
technically feasible, the selling of this leading-edge Internet Phone
(IP) technology to make international phone calls landed two
businessmen in Court. A local public security bureau charged Chen Zhui
and Chen Yan for "illegal provision of international calling services"
in Fuzhou, Fujian this past January. The Fuzhou Mawei District Public
Security Bureau received a report from the Fuzhou Telecom Bureau and
then seized the Chens' equipment . The accused posted 50,000 yuan
(US$6,020) bail pending their trial.

The Chens insist this technology falls within the definition of
internet technology, over which the State enjoys no monopoly, because
the Internet involves text, audio and video transmission. On the other
hand, the State argues IP technology falls within the definition of
conventional telephone systems, over which the State does enjoy a

"We think Internet Phone falls in the category of international long-
distance calling service, which is a State monopoly in China,
therefore the plaintiff had illegally operated an international
calling business by providing IP service for payment,"  China
Commercial Times said, quoting two unidentified Fuijan provincial
telecom officials.

The Chens filed an administrative action against the public security
bureau with the Mawei District People's Court. The Chens argue that
they possessed a valid account, paid Internet fees and had provided IP
service without damaging anyone's interests. They further allege the
defendant violated their property rights in the name of a "criminal
investigation," according to a document faxed to China Daily recently.

Qu Feng, chief judge of the administrative division of the Fuzhou
Intermediate People's Court, the Court of second instance, signed a
document, which said the Court of first instance accepted the
defendant's position that the public security bureau had simply, and
rightly, enforced the criminal law. The plaintiff refused to accept
this judgment.

The Chens then instituted an appeal in Qu's Court, asking the Court to
cancel the lower Court's judgment and to protect their lawful rights
and interests. "If a citizen considers that his legal rights have been
infringed by a specific administrative act or by an administrative
organ, he shall have the right to bring a lawsuit before a people's
Court in accordance with the Administrative Procedure Law of China,"
said Xu Yuandong, a judge of the intermediate Court.

The document indicates the Court will decide whether the defendants'
acts against the plaintiff should have been conducted as a criminal or
administrative investigation. If the Court rules the issue an
administrative matter, the Court may order a judicial review of the
legality of the public security bureau's actions.


------ Editors: Shen YAN, Ph.D, Deputy Manager of Info. and
Consultation Department
         Yunfang WANG, Vice President of NTD
Invited Editor: Bill Krys of Barrigar & Moss
fax: 0086-10-66211845/46/47/48
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