Good news and bad news. The bad news is that the Panel report on this case is so long, so technical, and so detailed, that I cannot simply list the findings. Wouldn’t make any sense, and it would probably take me another four days to do so anyway.

Good news is that you don’t really need to know all the ins and outs, unless you are in the film, music, or book industries and you need to know what to expect. I suspect you will be spending oodles of money for some international law firm to provide you with a 100 page memo on this case in any event, so I’d wait for that.

For everyone else, some general conclusions:

1. Compared to the other case filed by the US in April ‘08, which covered IP issues, this one was a stellar win for the US. The IP case was kind of a big loser, but the US won on a lot of important points here. Score one for the lawyers. Could have been better for the US, but such is life. Would have been interesting to see the fallout if the Panel had ruled for the US with respect to Internet music streaming.

2. For those of us who were around when China entered the WTO, this has been a long time coming. I recall talking to my entertainment clients at the time, speculating about distribution and import opening up within the next few years. It never really happened as promised, and I’m not surprised that the US finally went after China here. Remember that a lot of this was specifically negotiated when China became a member — the US entertainment industry was not just going to forget about these promises.

3. Will China appeal? I have no idea, but if it was me, I wouldn’t bother for most of the issues. China basically shot its legal wad with respect to several of these issues with the “public morals” defense, and they lost. The restrictions against foreign companies are obviously there, and if they have no excuse as to why they need those policies, then that is discriminatory.

One statement that came out today from the Chinese government simply said that the market for foreign products in this area is unimpeded by restrictions. Weak.

That’s not the point. The central issues here related to the ability of foreign companies to access the market directly. Sure, a movie studio can sell here via China Film Group, so technically they can access the market. But that isn’t going to cut it anymore.

4. Will this have an effect on content censorship? It might effect the process, but not the government’s ability to censor. That’s the whole point of the US argument against the public morals defense. “China, keep censoring, just let us sell into the market. We’ll follow all the censorship rules you want us to.”

5. Will this mean the entertainment industry is finally going to crack open the China market? Not much change from this case. Remember that there is still a quota of foreign films allowed into China every year — this case did not deal with that.

Let me reiterate, since I’ve already seen one news article talk about issues that are not really relevant to this case. This was not about film quotas!

Quotas are still here, censorship is still here. Distribution rights will open up some new opportunities, I suppose. The horrible licensing deals that, for example, foreign book publishers had to swallow, might change over time. That would be welcome.

6. What about IP?

Once again, this was not about IP. That was another case, also filed last April, which was an epic fail for the US.

To the extent that IP infringement is killing the entertainment industry, that’s going to continue. I saw one absolutely ridiculous quote from a Beijing resident in an AP story on the case that was exceptionally irrelevant:

[I]f after this (WTO) ruling there are more cultural products available in China and they could be reasonably priced, I would buy legitimate copies.

I know that it is ingrained for a reporter to go out of the bureau office and do some “man on the street” interviews for a piece, the subject notwithstanding, but a little hint here — this is not a good time to do it.

This decision was 500 pages long, very very technical, and gave me vivid and painful flashbacks of my WTO Law class in grad school. The average person on the street has little of value to say. Save it for a case about IP infringement.

And how about this bizarre comment from our old friend Dan Glickman at the Motion Picture Association? MPA has been artificially trying to roll IP infringement, import/distribution restrictions, and quotas into one issue for many years. Poppycock.

The Motion Picture Association of America hailed what it called a “landmark” ruling, saying it would be helpful in combating rampant piracy in China.

“This ruling will complement our strategy to fight movie piracy in China,” the association’s chairman Dan Glickman said in a statement.

“(It) represents a positive step in promoting the growth of legitimate US movies in a market that is growing rapidly, and with great potential.” (AFP)

Full of sound and fury, signifying nothing.

OK – in conclusion. From a foreign investment standpoint, this was one of the last remaining highly-regulated areas still restricted (several others are still out there, including quite a few remaining problems with the entertainment industry itself). All in all, this is a big win for the US in that sense.

From a business standpoint, I don’t agree with Glickman. This will do nothing to combat piracy, and it’s too early to tell how the ruling will effect the bottom line for companies in the film, music, and publishing industries.

If this ruling actually leads to meaningful changes in Chinese foreign investment law (and if not, a painful enforcement period would follow), the market will indeed open up for foreign investors. What they will do at that point is another story entirely.

FYI, lots of news articles out there on this case already. The wire services did a decent job (AFP, AP, Reuters), but steer clear of Bloomberg’s story. Ouch — factual errors; the writer obviously did not do his homework or was rushing faster than he should have to make a deadline. The other major papers are also on this, although one gets the feeling that many of these articles were written a bit too quickly.