Hawaii Pacific Export Council

Intellectual Property, A Primer

by E. Milton Wilson
SCORE of Hawaii

A SCORE counselor at times may receive a question about some aspect of so-called intellectual property (IP). Rather than saying, “Sorry, but that is outside my area of expertise,” in many cases you can point the client towards a potential solution to their needs. The Federal IP web sites are excellent and will supply information that will answer the vast majority of client questions. These, and other appropriate sites, are listed below, along with a very brief summary of the fundamentals of the IP area. Always keep in mind that a specialization within the legal profession is that of Patent Attorney and it is essential that you inform the client that (1) you are not a lawyer; (2) the information you are supplying is of a generalized nature as could be found in lay publications and templates; and (3) if written documents are required, or if any litigation is involved, clients should engage the services of a licensed Patent Attorney or other legal counsel as appropriate.

SCORE Sites (Good summaries by patent attorneys of the Phoenix and Tucson Chapters)

http://tenonline.org/sref.df1.html
http://tenonline.org/sref/jp1.html

U.S. Government Sites

www.uspto.gov (National site for all forms of IP)
www.copyright.gov (National site for copyright information only)
www.uspto.gov/web/offices/tac/doc/basic (Basic facts on trademarks)
www.uspto.gov/patft/index.html (Search of U.S. patents)

The Sub-categories of Intellectual Property

Patents – There are two basic forms of patents, Utility and Design. (There are also Plant Patents, but these will be ignored here.) The first named is the most common and concerns inventions related to one of the following: a process, a machine, a means of manufacture, a composition of matter, or an improvement of an existing idea. A Design Patent is issued for a new and original design that is to be used as an ornament for a manufactured article; it does not improve the functionality of the article. A patent is issued by the U.S. Patent and Trademark Office (USPTO) and allows the patent holder to maintain a legal monopoly for a defined period (20 years after the application date for a Utility Patent and 14 years from the date of issuance for a Design Patent) on the use and development of an invention. A Utility Patent must offer something new and novel, and be non-obvious. The USPTO must establish that the inventor has devised a new development in at least one or more of its claimed constituent elements as of the date of conception. With more than 7 million U.S. patents now having been issued, this novelty is far more difficult to achieve than the average amateur inventor realizes. There have been a number of above average inventors approach SCORE for business advice, but unless you are

quite familiar with the world of inventions, you probably should not comment on whether you think the proposed idea is patentable. If you can cite a product you have seen physically, or might have noticed in an ad or media publication, and it is at all similar to the proposed idea, you will be doing the client a favor by informing him or her of this fact so that further investigation might be made as part of their legally required search for proof of novelty.

Trademarks – A trademark or a service mark is a distinctive word, phrase, logo, graphic symbol, or other device that is used to identify the source of a product or of a service. It is used to distinguish it from competitors. Some examples of trademarks are Microsoft for software, Coca-Cola for beverages, and SCORE for business counseling. The mark can be more than just a word, with shapes, letters, numbers, sounds, colors, and even odors falling within the protection of the trademark system. When competing businesses adopt similar names or logos, the rules for resolving these disputes favor whichever business can prove it was first to use the name on a category of goods within a geographic area. Trademark laws are generally considered a subset of unfair competition laws. While you can attempt to defend your trademark through proof of its use over the years, it is far safer to register the mark with the State or Federal government. In the latter area, again it is the USPTO that handles this; it may be done electronically for a fee of $325. The main combined site or the trademark only one listed above are both quite excellent. The duration of a Federal registration is now ten years and it may be renewed indefinitely for additional ten-year periods by timely filings.

Copyrights – This area of IP is probably more misunderstood than any other element of intellectual property. The U.S. Constitution itself states that Congress can pass laws that, for a limited time, protect writings “to promote the progress of science and useful arts.” Laws enacted have greatly expanded the definition of “writings” and generally concern “original works of authorship fixed in any tangible medium of expression.” Works are generally considered to include literary works (books, articles), performing arts works (a play), sound recordings (a song), serials and periodicals (newspapers and magazines), and visual arts (a painting or sculpture). Software is now included within these protection laws, but it is an area of increasingly complex litigation and SCORE clients should properly be referred to a specialist attorney if they seek advice in this area. Works that contain no originality cannot be protected. Formulas, standard calendars, rulers, and scientific tables are examples of items that cannot be copyrighted (adding some original art to a calendar would make it protectable however). Titles, slogans, ideas, and symbols also cannot be protected. When a work is able to be copyrighted, the process is essentially automatic. As these words are being placed within this SCORE document (and provided that I am not considered a Government employee), protection is given to the words and the way that they are arranged. The reason to seek Federal Registration is to give other persons notice that you have and claim a copyright; it serves as an officially dated record of your claim in case there is a later infringement (unapproved copying) of your work. It also gives you additional protection from the U.S. Customs Service against the importation of copies of your copyrighted work. Generally the cost for registration is now $35 and protection is given for the life of the author plus 70 years.

The “circle c” puts the world on notice that you claim a copyright, usually used in this form: © Copyright 2008 E. Milton Wilson.

Point, Click, Read: The Power of Good Web Copy

DJ Halcro; Hawaii Score Counselor, Webmaster

Good writing is the fundamental element of all your small business marketing strategy. A thoughtful, well-crafted message that connects with your customers will do more to connect with your customers than any other element.

This is particularly true for Web sites. Although the Web is a visual-driven medium, with sites using flashy graphics, sounds, and other fancy features, success still comes down to what you say and how you say it.

However, Web site copy differs significantly from that for, say, brochures or display ads. With only few seconds to capture and hold the reader’s attention, Web copy must be brief and to the point, but engaging enough for them want to see more.

Focus first on establishing credibility. The content on your site must be crisp and intelligent. What you say should grab a visitor’s attention, pique their interest and motivate them to action. But avoid sounding like a commercial.

“Don’t make your Web site look like an ad” is rule number one of Web copywriting, says Maria Veloso, director of Web Copywriting University. We are all bombarded by ad images daily, says Veloso. The last thing we want to see on a site is another ad.

Yet many small business sites seem specifically designed to look like billboards. Avoid this trap. “People go online for information,” says Veloso. “That’s why they call it the information superhighway.” Your site should provide help, not hype, with the feel of editorial, not advertising. Web visitors consider themselves active participants in a shared online experience, so the writing should speak to them in this way.

Even though you’re writing for an infinite number of potential readers, your copy read like a conversation. That’s why many successful Web sites use common, everyday words, not platitudes and overused clichés that show off the writer’s knowledge of the dictionary. Using the second-person (“you”) in addressing readers also helps create a personal bond with your Web site visitors and helps convey your sincere interest in helping them address their business needs. They more they feel like they know you, the more interested they’ll be in doing business with your company.

For more advice on marketing your small business, contact SCORE “Counselors to America’s Small Business.” SCORE is a nonprofit organization of more than 10,500 volunteer business counselors who provide free, confidential business counseling and training workshops to small business owners. Call 1-808-547-2700 for the Hawaii SCORE Chapter or find a counselor online at www.hawaiiscore.org.

What is SKAL?

Any one who is in the hospitality industry would be very well served to research this organization. It is a by “invatation only organization” and is worldwide.

Skål is a professional organisation of tourism leaders around the world, promoting global tourism and friendship. It is the only international group uniting all branches of the travel and tourism industry. Its members, the industry’s leaders, managers and executives, meet at local, national, regional and international levels to discuss and pursue topics of common interest.

The first Club was founded in 1932 in Paris by travel managers, following an educational tour of Scandinavia. The idea of international goodwill and friendship grew and, in 1934, the “Association Internationale des Skål Clubs” was formed with Florimond Volckaert as its first President, who is considered the “Father of Skål”.

Skål International today has approximately 22,000 members in 500 Clubs throughout 90 nations. Most activities occur at local level, moving up through National Committees, under the umbrella of Skål International, headquartered at the General Secretariat in Torremolinos, Spain.

Skål International is governed by an Executive Committee of seven members, elected by delegates to an annual General Assembly, held during the World Congress, hosted by a different country each year. This allows members first-hand observation of the travel and tourism potential around the world.

Membership of Skål is open by invatation to General Managers and above or executives directly involved in tourism management, sales and promotions, in specified travel and tourism businesses, including: transportation (airlines, cruise lines, railways, ferries), travel and tour operators and agencies, tourism organisations, governments and non-government tourism councils, hotels, convention centres, travel media; who have been in the industry for 5 years.

The international friendship and close personal contact of Skål must be experienced to be appreciated.

“Doing Business among friends”. Skål is not a community organisation like Rotary or Lions, rather it benefits and develops the professional sector, while assisting the community at large. Skål is an Association of Tourism Professionals which encourages and creates a network of professionals around the world. It promotes seminars and conferences to strengthen the industry’s professionalism.

Through participation in local activities and events at all levels, members meet industry colleagues from around the world. Here, in an atmosphere of amicale, ideas, opportunities and industry matters, in general, may be shared on a personal and business level.

The Young Skål program is open to junior executives and tourism students entering the industry.

If there is one tourism organization to be a member of, this is the one.

DJ Halcro
www.skal.org

Volume 15, Issue 100

Monday, May 19, 2008

CBP Moving Toward Greater Emphasis on Trade Facilitation

U.S. Customs and Border Protection officials indicated at a recent meeting with the trade community that the agency is moving to bring its mission to facilitate legitimate trade more into balance with its mandate to protect national security. Although CBP has repeatedly stated in the post-9/11 environment that these are its “twin goals,” its focus in recent years has clearly been improving the security of the supply chain. It now appears that Customs is preparing to put more resources into trade facilitation, a move that is being welcomed by importers, exporters and others involved in global commerce.

The May 9 meeting of the Departmental Advisory Committee on Commercial Operations of CBP and Related Homeland Security Functions (COAC) addressed this and many other customs and trade-related issues.

Trade Facilitation. Commissioner Ralph Basham said that after nearly seven years of emphasizing supply chain security “we know we’re going to have to focus more of our energies at trade enforcement and facilitation.” He indicated that CBP will be relying on COAC for assistance in this effort, which will begin with the development of a new Trade Strategy. Brenda Brockman Smith, CBP’s executive director for trade policy and programs, explained that this strategy will center on four goals: facilitating legitimate trade and promoting compliance, enforcing trade laws, advancing national and economic security, and intensifying automation and further integrating it into CBP’s business processes. CBP will look to use many of its existing methods in pursuit of these goals, Smith said, including multi-layered risk management, pre- and post-arrival activities away from physical borders and the use of advance information. CBP is now in the process of consulting with the trade community, the departments of Homeland Security and Treasury, and the Office of Management and Budget to further develop the Trade Strategy, including determining the roles and responsibilities of the public and private sectors. Smith noted that one of the major challenges for CBP will be strengthening the trade expertise of its employees and that one of the ways it will seek to do this is through the active use of partnerships with the trade community.
Resumption of Trade. CBP officials said they have been working with other agencies as well as other countries to develop plans for the resumption of trade following incidents such as terrorist attacks, natural disasters, labor strikes, etc. An interagency agreement with the Coast Guard that focuses on the maritime transportation system will be tested during an exercise to be held in August in the ports of Savannah, Jacksonville and Charleston. CBP and the Canada Border Services Agency have developed general planning protocols as well as a more detailed business resumption communication and coordination plan, and the two sides recently conducted training on this plan at a number of northern border ports. Similar protocols are still under negotiation with Mexico.

At a recent congressional hearing on the resiliency of the U.S. supply chain, lawmakers and staff members said trade resumption is a primary concern for Congress and that the plans developed so far are not detailed enough. CBP executive director for cargo and conveyance security Todd Owen responded that “it is impossible to predict every significant event scenario or the details that will present themselves in an actual event” and that “our response to an actual event will depend on the facts we encounter and each response will be tailored to reflect these circumstances.”

Import Safety. According to officials, CBP has three key responsibilities with respect to import safety.

• cooperating with other government agencies such as the Consumer Product Safety Commission and the Food and Drug Administration to harmonize procedures and processes at the border

• fostering increased interoperability through the use of the International Trade Data System, refining shipment targeting policy and tracking goods via unique identifiers

• creating a new interactive network to gather additional information on product safety issues

Carol Cave, director of the CPSC’s new Import Surveillance Division, said her agency is considering the adoption of an approach similar to CBP’s Importer Self-Assessment program for product safety issues. However, she indicated that it is still early in this process and that the CPSC plans to hold further discussions with the trade before making any decision to proceed. COAC expressed concern with the idea and said it could pose substantial challenges for importers.

100 Percent Scanning. Rich DiNucci, director of the Secure Freight Initiative, said CBP is still testing 100 percent scanning of U.S.-bound cargo containers at three overseas ports and making progress toward the expansion of the test to three other high-volume ports. CBP sent its first report on the test to Congress in February and the second report is expected shortly.
Lawmakers said recently they will be interested to hear the report’s findings, particularly in light of Deputy Commissioner Jay Ahern’s recent statement that 100 percent scanning should be limited to high-risk trade lanes. A law enacted last year requires that by 2012 all oceanborne cargo containers must be scanned before being shipped to the U.S., but according to press reports at least some members of Congress are reconsidering that mandate. One factor could be the cost of scanning, which has been estimated at $20 per container by one House staffer but $500 per container by a recent European Commission study.

C-TPAT. Bradd Skinner, CBP’s director of industry partnerships, provided an update on the Customs-Trade Partnership Against Terrorism. Skinner said that as of April 17 there were 8,322 certified participants, 7,269 of which had been validated and 252 of which were receiving Tier 3 benefits. CBP has suspended 531 companies from the program, about half of them truck carriers, for failed validations or security incidents. Three joint validations have been conducted with China Customs since March and a pilot test of third-party validations in China is due to expire in June. CBP expects to issue a document on the benefits of C-TPAT participation sometime this year.

Skinner also addressed the status of mutual recognition efforts concerning other countries’ supply chain security programs. Mutual recognition has already been extended to New Zealand and agreements are expected to be signed with Canada and Jordan in June. Australia, Japan and Singapore are possibilities as well.

In-Bond. Director of cargo control Greg Olsavsky told meeting attendees that CBP is pursuing a number of efforts to improve its oversight and enforcement of the in-bond system, which were criticized in a report issued by the Government Accountability Office last year. For example, an improvement to the QP in-bond filing procedure is planned for ACE in late August. CBP is also considering regulatory changes, such as allowing 100 percent electronic filing, shortening allowable delivery times and imposing a single time period for all modes of transport, adding data to in-bond requests to better enable screening of restricted shipments, and requiring notice of diversions. Technological solutions are being explored as well. CBP is currently pilot testing the use of radio frequency identification on in-bond shipments between Los Angeles/Long Beach and Laredo. But Olsavsky said RFID is only an interim solution and that ultimately CBP will use container security devices to better control in-bonds.

ACE. Executive director for cargo systems Lou Samenfink said CBP is continuing to refine the electronic truck manifest module of the Automated Commercial Environment. Nearly four million truck e-manifests have been submitted already this year, he said, and truck processing times are down to 105 seconds. Ensuring the reliability and performance of this module is a priority for CBP.

Samenfink also announced that CBP will program 24 “hard edits” into ACE. CBP had identified 63 edits (which automatically make corrections to import entries) for possible elimination in the transition from the Automated Commercial System to ACE but has agreed to a trade community request to retain 24 of them.

WCO Framework. Assistant Commissioner for International Affairs Mike Mullen told the meeting that CBP has submitted to the World Customs Organization a proposed amendment to the WCO’s Framework of Standards to Secure and Facilitate Global Trade that would reflect CBP’s “10+2” security filing proposal. This amendment, which could be approved as early as next month, would only require the addition of five new data elements to the SAFE Framework.
In addition, Mullen said, CBP has recommended three criteria for approving any future changes to the framework: they must be in response to a national or legal mandate, there must be consultations with the trade community and the data elements to be added must be part of the WCO data model.

Why Do Economists Make Such Dismal Arguments About Trade?

By Robert Driskill May 2008

www.foreignpolicy.com

My fellow economists are manning the barricades to defend free trade from a growing public backlash. But with globalization increasingly seen as a threat, our arguments are falling on deaf ears. Maybe it’s time to stop claiming we know what is best for everyone?
Hard case: Economists’ arguments for free trade are often little more convincing than this sign on a closed GM plant in Lansing, Michigan.
Trade is proving to be an unexpectedly potent political issue these days. A number of free trade deals have stalled on Capitol Hill, with little hope of quick passage. On the campaign trail, the U.S. Democratic presidential candidates Barack Obama and Hillary Clinton have sought to outdo one another to express their concern about everything from NAFTA to outsourcing. My fellow economists have watched this show with growing unease, and many have made it their mission to defend free trade from what they see as ill-informed, scurrilous attacks.
As one prominent economist framed it:
No issue divides economists and mere Muggles more than the debate over globalization and international trade. Where the high priests of the dismal science see opportunity through the magic of the market’s invisible hand, Joe Sixpack sees a threat to his livelihood.
This was written in a New York Times column by one of those high priests, Harvard University’s Gregory Mankiw, and it accurately reflects the views of most economists.
A non-economist might ask: What are these opportunities, and how do these economists judge them as more important than the threats?
At bottom, trade is responsible for creating opportunities in some sectors of the economy and reducing opportunities in others. By the same token, restriction of trade reduces opportunities in some sectors and expands them in others. Without a doubt, this means that trade helps some people and hurts others.
In such a situation, why do economists claim that trade is good for the country? After all, the Joe Sixpacks are citizens of the country, and their losses are often large, painful, and traumatic, requiring dramatic life changes. Why should people think economists can be, in effect, high priests who tally up benefits and losses to different individuals and pronounce the outcome good or bad for the group as a whole?
In fact, people shouldn’t. Any time a change in economic circumstances creates both winners and losers, the judgment of whether such change was good or bad for the group as a whole is problematic. It becomes a matter of moral philosophy, not number crunching. Economists, as a result of their training, have no more claim to know what is “good for the country” than Joe Sixpack. It’s really that simple.
Do economists know something, though, that Joe Sixpack doesn’t, and does this knowledge inform their thinking about free trade? What they know that Joe Sixpack doesn’t is a basic but not obvious result from economic analysis: The gains to winners from free trade are sufficiently large that a hypothetical redistribution of these gains from winners to losers could make everyone better off. Note that economic analysis doesn’t say that these compensations actually take place. In fact, everyday experience shows us they don’t, and economists know that there are practical problems that make it virtually impossible to carry out such redistribution schemes. Why, then, do economists support free trade?
To answer this requires speculation, of course, because the arguments economists frequently present in favor of free trade are poor and simply cannot be a basis of support. In particular, they almost all in some form or another are a variation of the above-mentioned compensation criterion. For example, in an op-ed in the New York Times, the University of Rochester’s Steven Landsburg writes:
All economists know that when American jobs are outsourced, Americans as a group are net winners. What we lose through lower wages is more than offset by what we gain through lower prices. In other words, the winners can more than afford to compensate the losers.
A quick thought experiment shows why this argument is problematic. What if free trade is making a small percentage of the country much better off, but is hurting a much greater percentage (the “Joe Sixpacks”), as some argue is the case? Even if the total gains to the few winners are sufficiently large that they could hypothetically compensate the losers, why would it be obvious that “Americans as a group are net winners”?
Some arguments are even worse. They take the form: “We have a model that shows that everyone is made better off by free trade.” Joe Sixpack doesn’t need a Ph.D. to understand the uselessness of a model that doesn’t apply to the world of actual experience, or to understand the problematic nature of a judgment that relies on hypothetical redistributions.
So, one explanation for why economists are free traders is that their argument for free trade has become an institution: 200 years of tradition that has short-circuited their critical thinking. That would explain why economists seem to cherry-pick the implications of trade that support their case. For example, economists frequently point out that import competition leads to lower prices for things like baby clothes, athletic shoes, and toys. They never point out that these imports are fundamentally paid for by exports, such as food and pharmaceuticals, the price of which must rise to generate the increased sales. These higher prices are certainly bad for those domestic consumers who spend a greater proportion of their income on drugs and food than on baby clothes and toys.
It would also explain why economists employ such rhetorical sleights of hand as pointing out the unambiguously good things that come to an individual from trade with the wider world, and then arguing that, by analogy, trade must always be good for a country of distinct, heterogeneous individuals. They love to quote Adam Smith:
What is prudence in the conduct of every private family can scarce be folly in that of a great kingdom. If a foreign country can supply us with a commodity cheaper than we ourselves can make it, better buy it of them with some part of the produce of our own industry, employed in a way in which we have some advantage … .
But this famous analogy doesn’t quite hold water. Families are composed of relatively small numbers of intimately connected individuals. A move from autarky to trade for a family might create some “losers,” but these could be easily identified and compensated. That is just not the case for a nation with many millions of people.
Perhaps the deeper reason economists favor free trade so strongly is that they do use the compensation argument to inform their thinking about free trade, technological progress, and other economic changes. Their craft tells them that, if societies embrace economic changes that satisfy this criterion, such societies will have a “bigger pie” over time. Observation of economies over long periods of time suggests that the benefits of the bigger pie are widespread. The rising tide eventually raises most boats.
Is this, then, the priestly knowledge that allows economists to be certain that free trade is good for the nation? Not at all. Who are economists to judge whether benefits to future generations justify current hardships? That’s a question for philosophers. But it is the kind of useful knowledge that economists can present to the world to help people make up their own minds. It clarifies the trade-offs that societies face when they follow different policies. That is what economists are trained to do: see the pros and cons of different policy choices, trade-offs that are not obvious to non-economists. But they don’t have to practice philosophy without a license to do that.

Robert Driskill is professor of economics at Vanderbilt University.

May 18 2008

Honolulu Hawaii USA: May 16 2008 Keynote Speech to 300 guests – Titled “I believe that Children are our Future” Presented by Johnson Choi at the Dole Cannery HACTE “Hawaii’s Future Fortune 500 Luncheon”

Mr. Soma, President of the Hawaii Association for Career and Technical Education, Fellow UH TIM Alumni, honor guests, friends and students.

Leaders from the East and the West frequently saying “Children are our future” and Singer Whitney Houston has a song start out saying “I believe that children are our future”. When I was at the white house meeting with President George Bush a little over two (2) weeks ago, our President also talk about the future of our Children and Small Business who is providing more than 75% of the new jobs in the United States.

We must help our Children to understand and believe that they are the stake holders and future for Hawaii. We as businessman, businesswoman, educator, politician, union leader and voters must take a practical approach to provide the necessary tools for our Children to excel to bring positive impact to the State of Hawaii. A well educated work force is crucial on the ability of a City, a State and a Country to compete and survive in the increasing competitive world economy.

What is Hawaii’s future in the context of the boundaries of our State surrounded by water?

I have witnessed the changes since I arrived in Hawaii in 1974, the Big-5s of Hawaii, the Alexander and Baldwin, the Amfac, the Castle and Cooke, the C Brewer and the Theo Davis. Today, Alexander and Baldwin is the only Hawaii Company running the successful Matson Container ship with the protection of Jones Act and developing valuable Hawaii Real Estates.

When I attended Kauai Community College and Leeward Community College, the tuition per semester was only $25. When I transferred to University of Hawaii School of Travel Industry Management, the tuition per semester was only $145. The tuition fee charged by Chaminade University of Honolulu was $60 per credit hour for my MBA degree in 1977.

When I attended the UH School of Travel Industry Management in the 70s lead by Dean Emeritus Chuck Gee, in order to prepare us for future Hotel and Restaurant Management position, we are required to attend food and beverage courses, Food Lab, 800 hours of practical work experience as part of the degree requirement. The School had given us the tools and the means for UH TIM graduates to compete and win good paying jobs against Schools such as Cornell and University of Denver. TIM Night which was the hallmark of UH TIM until 2005 had connected our alumni in Hawaii, Asia, North America and Europe helped brought in 100s of thousands to the School. Two years after it was discontinued, our survey still show 89% of our alumni support TIM Night with the majority of the of the faculty and staff felt the same way. The pride of the UH TIM School is the Sunset Library, the computer lab and the Gee Technology Center that make us shine funded by 100s of thousands of dollars donated by 100s of UH TIM Alumni and donors around the world wanting to leave a permanent mark on UH Campus. Almost 1/3 of the donation has strong ties or came from alumni connected to major financial centers in Asia such as Hong Kong, China, Taiwan and Japan.

I was the Vice President of a software company in Hawaii in the late 1990s. During a visit to a software company located at the Silicon Valley who wrote the computer code for the Intel Chips. The Company has 2,300 employees. The CEO and Founder of the Company have told the investment bankers in the room that his Company asset is the people. They go home every night. If his people do not return, his Company will be gone tomorrow. Buildings and Hardwares could be replaced easily, but not the people who work and loyal to him. Therefore for a University, it is not the Dean, but the Professor, Staff and alumni that make a School shine; for a State, it is the people and many of you in the room, our Children who help chart the destiny of the State of Hawaii.

Today, Hawaii depend heavily on Federal money, they are the billions of military funded projects, millions of military related research projects going to the University and private sectors. Therefore if you are contractors, developers and scientists attached to this federal money, you will continue to live a good life, earning high income.

Despite the talk of 100s of thousand of tourist from Countries like China to visit Hawaii in the coming years, today, Hawaii is ill prepare to receive foreign tour groups, except Japan. Lack of new hotel developments limit our ability to offer management position to graduates from our Universities. A fresh graduate to begin his/her career is Asia could make management 3x faster putting in the same time and efforts. The pay could be 200% higher when you take into account of cost of living and favorable tax breaks offered by the Federal Government.

You could also consider working for the Government. The challenge is your ability to find jobs in the private sectors as most private sectors employers do not like to hire former government employees.

What is Hawaii’s future in the context of our country, the United States of America?

It will depend on how long we can keep the Federal money coming.

As an Island State, we have limited resources. Almost everything we use in our daily life must be shipped in or flew in.

During the past 15 years, Hawaii has experience serious brain drain. Many of our best educated children left Hawaii for greener pasture in the mainland USA. Some have also moved to Asia. This is actually not unique to Hawaii. Let us use China as an example, workers from the poor country side of interior China moved to factories in Southern China for 3 – 5 times better pay. Another example is the Philippines. Many gave up their professions as Nurses and even Doctors, moved to Hong Kong to become maids for 3 – 6 times better pay.

Unless our graduates are getting better pay, we do not see the out migration to stop anytime soon.

How can we pay our graduates more? When Hawaii rank as the top 5 most expensive place to do business in the United States, it is rather difficult to attract new business to come to Hawaii.

Couple of days ago, John Rutledge, an economist for President Ronald Reagan and George Bush interviewed by the Honolulu Advertiser Newspaper has a house on Maui wondered why Billions of dollars flying around the world not landed in Hawaii. We have a growing list of wealthy individuals from around the world; many former Hawaii residents now own properties in Hawaii. For the past 10 years, I must have run into no less than 200 such wealthy individual. Each time, I have made an effort to ask them one question when they made similar comments such as John Rutledge. Their general comments are as follow:

1) My business in not in Hawaii, I come here to relax to enjoy the Sun, Sea and Surf,
2) Yes, I was born and raised in Hawaii, but now I am in my late 50s or early 60s, I think I should leave it to my Children to get involved on the future of Hawaii. My follow up question soon found out, for many of them, most of their children do not live in Hawaii. Many felt the Hawaii business climate has not improved since they left 10, 20 or 30 years ago.

Our challenge is how to attract those that come here for the Sun, Sea and Surf to stay longer to smell the roses and share their expertise with us.

For those successful returning former Hawaii residents, what can we do to encourage them to teach and share with us their formula of successes helping us to connect with the mainland USA economy beyond the Federal funding?

What is the Hawaii’s future in the context of the World economy?

We had our opportunity in the 70s to have an open sky policy for Hawaii when most airplanes must refuel in Hawaii. We had also an opportunity to ask for an exemption to the Jones Act in the 70s, allowing better and competing non-USA shipping companies to enter the Hawaii market. The challenges is for the policy makers in Hawaii to understand and to convey the message to Washington DC to help them understand that we are the only state that everything must be shipped in/out of Hawaii by Air and Ship only. Hawaii has no natural resources. We need to import almost everything from outside of Hawaii and cannot be treated same as the other 49 States.

Hawaii has an excellent reputation in tourism and our natural beauty, rank top 5 worldwide. In terms of Hawaii as a business destination, we are nowhere to be seen. Many corporations in North America and Asia do not want to hold conferences in Hawaii as shareholders have difficult times believing that serious meetings will be conducted in Hawaii. It is not unusual when we conduct serious business in Asia; we are asked “Where is the hula girl”, took the focus away from serious business discussions. Our business partners in New York and San Francisco are able to zero in serious business discussion without distractions.

We still see quotes from top Hawaii government officials saying that companies should come to Hawaii since we are the gateway to the Pacific because we are in the middle of the Pacific. It is only true geographically, no longer in business sense as we lost our advantages more than 15 years ago.

I am still seeing promotional material advocating that Hawaii’s high percentage of Asian population such as the Japanese, the Filipino, the Korea, the Chinese, and the Vietnamese and so on qualify us for direct ties and understanding to the countries I just mentioned. Since majority of our Chamber members and clients are from Asia. We found out after the 2nd generation, most of the immigrant families have no idea where their relatives are from their home country.

If the majority of the People live in Hawaii want a better life for our Children and our Grand Children, private sectors businesses must take the lead. The government and the power of government which can be addictive must step back allowing the private sectors to take its place gradually. Government should monitor, regulate and oversee without direct involvement of the day to day business operation.

Let us use the Honolulu Mass Transit as an example, if the City will use the Tokyo or Hong Kong business models, we do not have to pay the ½ % general excise tax with millions of annual deficits by allowing the private sector to build the entire system at no cost to the City in exchange for development rights at the transit stations. Development on top of the transit stations could ensure ridership. By using the Government business model, it has increase the cost for all of us doing business in Honolulu. Future operational deficit may result in increase of our Real Property tax.

Given the opportunity working with the 4 major Universities in Hawaii (not to mentioned a number of ivory league college in Asia we work with frequently), we found each of them offer different ways to put a degree or program together. If you plan to get your college degree from one of the colleges in Hawaii, I will suggest you to talk to the alumni in the field of your interest to find out what they like or don’t like about the program they had attended. You should do one more thing, share with the alumni the courses being offer now as it could change, sometimes substantially from time to time. For example, if you want to become a hotel manager and one day manage one of the 500 new hotels being built in Asia each year. A school that only offer tourism or a course or two in transportation may not be the right school you want to go to as it will ill prepare you in the field of your interest.

Beside Hong Kong.China.Hawaii Chamber of Commerce, there are two (2) organizations you may want to consider joining. They are the Tax Foundation Hawaii and Small Business Hawaii. Tax Foundation Hawaii provide timely advise for many challenging issues we are facing today as a State and Small Business Hawaii like its name said represent the Small Businesses in Hawaii and many issues they are facing daily.

I will also encourage our student to get involved in non-profit organization and support your school. The School is only as good as its alumni. Many of the alumni with the best idea may not live in Hawaii. They have so much to offer, please do not treat them as second class citizen. I see people giving to non-profit expecting pay back, helping non-profit and your school with no expectation of pay back, avoid conflict of interest. You will find your life more enriched and rewarding.

In time of natural disaster, reach out to those alumni that live there. Let us use UH TIM School as an example, ¼ of our alumni now live and work in China, Hong Kong, Taiwan, Japan and Singapore. The good will you offer in time of need like the horrify earthquake in China last week, for every dollar you spent, you could get 100s or even 1,000s of times back to benefit your school and the State of Hawaii in the future. Think long term, do not let politics to get into your way, reach out with our Aloha spirit.

To our students, venture out to see the world, come back during the prime of your life and help Hawaii to become an even better place to live, to work and raising our children. Do not forget to give thanks to your Parents and teachers. Many have to work very hard and gave personal sacrifices to send you to high school and college.

I would like to share with you “The Paradoxical Commandments” written by Kent Keith, a White House Fellow in the 60s. I have felt very warm about it. It has shared many of my father’s life philosophy in our daily teaching and dealing with people.
1. People are illogical, unreasonable, and self-centered, Love them anyway.
2. If you do good, people will accuse you of selfish ulterior motives. Do good anyway.
3. If you are successful, you win false friends and true enemies. Succeed anyway.
4. The good you do today will be forgotten tomorrow. Do good anyway.
5. Honesty and frankness make you vulnerable. Be honest and frank anyway.
6. The biggest men and women with the biggest ideas can be shot down by the smallest men and women with the smallest minds. Think big anyway.
7. People favor underdogs but follow only top dogs. Fight for a few underdogs anyway.
8. What you spend years building may be destroyed overnight. Build anyway.
9. People really need help but may attack you if you do help them. Help people anyway.
10. Give the world the best you have and you will get kicked in the teeth. Give the world the best you have anyway.

Last, but not least, I would like to thank my Wife, Carmen, allowing me to spend no less than 20 hours per week on non-profit organizations such as the Hong Kong.China.Hawaii Chamber of Commerce, T.I.M. International Inc – the alumni association of the UH School of Travel Industry Management and others. Without her support and continuous encouragement, I will probably not able to do what I am doing.

Thank you.

Johnson Choi, MBA, RFC.
2008 SBA Minority Small Business Champion of the Year – National Winner
http://www.hkchcc.org/sba.htm
President
Hong Kong.China.Hawaii Chamber of Commerce
“Hawaii-China Guan Xi, We Get Things Done™”
Offices in Honolulu, San Francisco, Hong Kong and China
http://www.hkchcc.org
Vice Chair – Hawaii Pacific Export Council (HPEC)

Stand Up to Economic Downturns with Good Financial Practices
They will help you survive

Broad economic slowdowns can often trickle down to small businesses, including those in relatively stable industries or geographic locations. Individuals tend to cut back on discretionary spending while corporations curb routine activities, delay major purchases, and shelve new initiatives.

For many small businesses with limited resources, these and other factors often combine to pressure bottom lines past the breaking point, creating a domino effect of other dilemmas such as a credit crunch or layoffs.

A downturn doesn’t have to spell disaster for your small business, it may actually be a great time to expand and / or increase market share or prepare yourself to be ready when the market improves so you are positioned to take advantage. Good financial management practices will help you weather even the worst of economic times, and be ready to capitalize on new opportunities that will inevitably come when good times return.

Begin with the basics. Even when times are terrific, no small business can survive without good recordkeeping, budgeting, cash flow monitoring, and credit management. Have strong systems in place.

Consult your bank. Lenders can tap their vast experience in economic cycles to advise you on issues specific to your business and industry. Depending on your projected long-term expenses, consider arranging a line of credit in case a cash flow gap occurs.

Be on good terms with your creditors. Falling behind on payments is never the answer, even if it’s “just this once.” Creditors will be more amenable to renegotiating terms to small businesses they consider to be conscientious and reliable.

Watch your receivables. By the same token, you need to stay on top of any outstanding debts to your company, particularly problem accounts. Be firm, but also willing to negotiate where appropriate. As a small business owner, you do you best to meet your obligations to your customers. So it’s only natural to expect them to pay their bills on time, right?

Unfortunately, the answer is not always. Most customers are conscientious about making timely payments, but others may require some extra effort. Though frustrating and time-consuming, collecting from delinquent accounts is not something you should put off or simply hope will work itself out. Every dollar of revenue counts toward keeping your small business afloat.

Obviously, prevention is the best way to avoid having to deal with collections in the first place. Establish a standard payment policy and make your customers aware it before starting work. Your invoices should also clearly state when the total amount is due and the fee for late payments.

Scrutinize your spending. Rather than arbitrarily slashing your budget, strive to spend only on those things that have a justifiable positive effect on your business. That will make it easier to redirect money to areas that enhance business performance.

Step up your review of financials. Assessing your reports weekly or biweekly rather than monthly will put you in a better position to make informed decisions. Similarly, a monthly or quarterly review your business plan enables you to adjust your strategy and direction to changing market conditions.

Keep marketing in the mix. Look for cost-effective ways to keep your company visible to current customers and potential new markets. They may be ready to restart their spending long before the headlines proclaim an end to the economic crisis.

Keep your company, product, service, and name in the media and in front of the consumer. A low cost way is press releases.

Aside from the news item itself, the most important parts of a press release are the headline and first paragraph. Editors sift through dozens of press releases a day; they rarely read anything that doesn’t immediately grab their attention. Get to the point by organizing the first paragraph around what your news is, who it’s about, and why it’s important. Then, use brief supporting paragraphs to add detail.

Remember that like a resume, a press release is designed to pique interest, not tell the entire story. As such, limit your release to no more than two double-spaced pages.

Your company’s logo and contact information should be at the top of your press release. It’s also helpful to include a name, address, and phone number or email in the text.

Once your release is ready, contact the publications or media outlets to identify the right editor, and whether they prefer to receive releases by regular mail or electronically. Make sure you spell the editor’s name and title correctly. Releases with errors or addressed to long-departed predecessors often go into the trash unread.

www.hawaiipacificexportcouncil.org

District Export Councils: Your partners in exporting
Hawaii District Export Council is an organization of community leaders whose knowledge of international business provides a source of professional advice to firms seeking to expand their international sales. We are closely affiliated with the U.S. Department of Commerce, provide specialized expertise to the Department and its clients as well as provide support to the FCS Officer in Honolulu.

We respond to your export needs by working with the U.S. and Foreign Commercial Service (US&FCS) domestic offices and promoting greater international trade activity at the local level. We Counsel exporters, sponsor trade events, and help build local export assistance partnerships with other organizations.

There are a number of Councils nationwide with over 1,700 volunteers representing business, universities, and government. Members, appointed by the Secretary of Commerce, are recognized for their extensive knowledge of international business and access to specialized trade resources. Members provide an important source of professional advice that complements the assistance provided by US&FCS international trade specialists.

Each DEC has a membership mix which includes exporters (manufacturing and service industry), export service providers, tourism specialists and public sector trade promotion organizations. This group represents the users and providers of local export assistance services that can identify opportunities / gaps in community export programs. We also help develop local networks to provide a broad range of international trade services to the exporter. We provide assistance and infrastructure that matches available resources with business needs.

Each DEC establishes committees to address the priority objectives of their community and the Department. Committee members address issues such as trade finance, international competitiveness, and National Export Strategy initiatives. We also provide workshops and mentoring for companies that are interested in developing an export plan for their business.

January 19, 2008

Dear Friend:

I’ve always believed that the prosperity of our Hawai’i and country rests largely on the
shoulders of our small businesses. To that end, I advocated for Hawai’i’s 130,000-plus small
businesses in our state legislature and for small businesses nationally as a member of
Congress, where I served throughout my tenure on the U.S. House Committee on Small
Business.

Returning home last year, I accepted an invitation to serve as a director of Small Business
Hawaii, a private, independent, nonprofit association of 2,000 small businesses dedicated to
enhancing the business climate and private enterprise opportunities throughout Hawai’i for
the benefit of all citizens. Recently, SBH (www.smallbusinesshawaii.com) hosted a very
successful 32nd annual conference, at which I spoke.

The title of my speech (text provided below) was “Hawai’i Politics 2008: Will Small Business
Play?” Whether you’re in small business or not, I hope you’ll choose, as I urged Hawai’i’s
small businesses, the fullest possible personal engagement in the crucial discussions and
decisions we all face in this Election ‘08.

With aloha,

Ed Case

Hawai’i Politics 2008: Will Small Business Play?

Small Business Hawai’i Annual Conference
January 9, 2008

Aloha and Happy New Year. And welcome to Election Year ’08!

Yes, from the moment you woke up January 1st clear through Inauguration Day January 20th
next will be one long election year. And thus far the theme is, as it should be, change.

I’ve been thinking about change myself. For example:

-a year ago I was a U.S. Congressman; today I’m the cool-down act for Famous Amos and
the warm-up act for Gene Simmons.
-a year ago I was in government and knew it all; today I’m not in government and see it all.
-and a year ago I thought small business’ representation in government had only up to go;
today … well, what do you think?

Yesterday I was talking with an old friend and colleague from my state legislative days. A
Democrat, he could not be considered a friend of small business. But he’s come to believe
that change is the only way forward for our Hawai’i.

We were talking about the presidential campaign, about the national yearning for change.
And he stopped midstream and asked me this simple question: if the rest of our country is so
ready, why are we so resistant? If we rate our national leadership so low and want new
directions there, why, with similar ratings of our state leadership, don’t we here?

The title of this year’s conference – Hawai’i’s Economic Tipping Point – states what we may
not consider obvious: that we have a choice; that we can collectively find our own new
directions. And the title of my talk – Will Small Business Play? – asks Hawai’i’s 130,000-plus
small businesses – you – whether you’re ready to make the personal commitment necessary
to make that happen.

Perhaps your first question is: why should you care? Why do you have to take your valuable
time to be an agent of change? Here are five reasons.

First, your government does matter to your business. In my almost three decades in
business and two decades in politics, I’ve observed that Hawai’i government and small
business consider themselves mutually exclusive: government believes what it does won’t
really impact small business, and small business believes if it just lays low government won’t
affect it. Obviously wrong on both counts: from taxes to regulation and beyond, our
government can make or break small business.

Second, your government does not know small business. The fact is that most decision
makers statewide simply don’t have the personal experience to understand what drives and
impacts small business, much less advocate for your needs; they have other backgrounds,
priorities and constituencies. What you want won’t just happen automatically.

Third, big business is not your advocate. They have the expertise and resources to
manipulate the system toward specific benefits such as targeted tax credits and spending
and statutory protectionism, and they generally won’t risk those benefits and insider
influence to demand the kind of broad based business climate improvements that will help
you.

Fourth, tough choices that will hurt you if made wrong are coming. Our leaders have had it
easy for half a decade; they’ve been able to give everyone most of what they want in the
short term and kick structural long term problems down the road. As in the mid-1990s, those
days are over; the coming years will force those tough decisions, and at present small
business is not at the table.

Fifth, you are not alone. Too often we don’t act individually if we’re not comfortable we’re
acting collectively. And it’s always puzzled me why, as by far one of the largest segments of
our population, small business owners and their employees and beneficiaries don’t capitalize
on the power of your collective efforts. You will not be alone.

If this all makes sense, then what’s the root challenge and central opportunity?
Fundamentally, the challenge is citizen (small business) withdrawal from the political process,
and the opportunity is full engagement.

The current withdrawal is first from voting. The basics are well-known; voting is declining
precipitously. For example, in Hawai’i’s 1992 general election 82% of registered voters voted;
in ’06, 53%. And that was after about 33% of eligible citizens didn’t even register, so actual
voters were about one-third of eligible citizens.

One-third of our citizens always vote, one-third don’t vote, and one-third vote depending.
Perhaps one wouldn’t view that as a significant problem if the one-third voting was
representative of all citizens, or, more directly for today’s purposes, of small business. But is
it? In my observation, not close generally, and certainly not with respect to you.

But why? Yes, it is in part about ease of voting, and there are many improvements we must
make. But I believe it’s much deeper and more basic than that; I believe it’s mainly about the
lack of choice.

Most citizens vote when they’re asked to choose among candidates; they don’t when there’s
no choice to make. Just look at the turnout in presidential versus non-presidential years.
Here in Hawai’i, we saw substantially higher statewide turnout in the highly contested
governor races of ’98 and ’02 and my own U.S. Senate race of ’06. And it compounds either
way: more candidates, more choice, more voting, more representation, better decisions;
fewer … apathy, misrepresentation, centralization of power and control, withdrawal.

We all need more candidates, and you – small business – especially so. There are over a
hundred seats open throughout Hawai’i this election year, ranging from two U.S. House
seats to most of our legislature and county councils and beyond. Just a few hundred more
candidates could materially change Hawai’i and, if they are oriented to small business issues,
could materially advance the prosperity of small business statewide. The question for you is:
will you do it; will you find and back someone who will?

I’d like to close by highlighting what I believe is the most important single vote we in Hawai’i
can cast for our Hawai’i this year, and that is a yes vote on convening a constitutional
convention. If approved, the convention itself would occur later, and would afford us all a
long-overdue opportunity, as we celebrate two generations of statehood, to reformulate the
foundations of our next generation together. But it won’t happen without your affirmative
yes vote, a vote that, in and of itself, will express your own yearning for a better way
forward.

We are indeed at a tipping point at which the individual and collective efforts of Hawai’i small
business can chart a different path not only for you but for all of Hawai’i. But you have to
choose to play. I truly look forward to working with you!

Mahalo and aloha.

Ed Case