Top VCs Tell Congress: PROTECT IP Will Harm Innovation

from the good-for-them dept

While the entertainment industry has assumed that they would have a smooth ride getting PROTECT IP approved, it seems they've run into a bit of turbulence. We've already pointed out that both the NY Times and LA Times have come out against the bill as written and now a group of some of the most well known, and most successful, venture capitalists have all gotten together to send a letter to every member of Congress warning that PROTECT IP will harm investment and innovation. The list of people signing it really is a who's who of the top venture capitalists around. You've got Vinod Khosla, Fred Wilson, Marc Andreessen, Ron Conway, Bill Draper, Esther Dyson, Brad Feld, Roger Ehrenberg, Eric Hippeau, Reid Hoffman, Tim O'Reilly, Alan Patricof, Danny Rimer, and many many others. In total 53 of the top venture capitalist signed on, and they don't mince words about why this is a bad bill:
The bill is ripe for abuse, as it allows rights-holders to require third-parties to block access to and take away revenues sources for online services, with limited oversight and due process.

In particular:

  1. By requiring "information location tools" -- potentially encompassing any "director[ies], index[es], reference[s], pointer[s], or hypertext link[s]" -- to remove access to entire domains, the bill puts burdens on countless Internet services.

  2. By requiring access to sites to be blocked by Domain Name System providers, it endangers the security and integrity of the Internet.

  3. The bill's private right of action will no doubt be used by many rights-holders in ways that create significant burdens on legitimate online commerce services. The scope of orders and cost of litigation could be significant, even for companies acting in good faith.

While we understand PIPA was originally intended to deal with “rogue” foreign sites, we think PIPA will ultimately put American innovators and investors at a clear disadvantage in the global economy. For one, services dedicated to infringement will simply make their sites easy to find and access in other ways, and determined users who want to find blocked content will simply shift to services outside the reach of U.S. law, in turn giving a leg up to foreign search engines, DNS providers, social networks, and others. Second, PIPA creates a dangerous precedent and a convenient excuse for countries to engage in protectionism and censorship against U.S. services. These countries will point to PIPA as precedent for taking action against U.S. technology and Internet companies.

As one of the VCs behind the letter, Brad Burnham, noted in his blog post about the bill, unlike most of the support for PROTECT IP, this is not a "usual group" of lobbyists. This is not an organized group or a trade organization. This is a bunch of very concerned people with their finger on the pulse of innovation, who are quite scared of the bill:
Venture capitalists are notoriously apolitical. We believe in markets. We are not asking for tax breaks or favorable regulatory rulings, we are asking for restraint.

The group of venture capitalists who joined us in expressing concern about S. 968, the PROTECT IP Act ("PIPA") represent a broad range of political views. We share a passion for start-ups and a conviction that young companies are a fantastic source of productive innovation. This group is responsible for a significant amount of investment in the U.S. economy.
Unfortunately, chances are their pleas will be ignored, in part because they're not a big lobbying organization. However, anyone supporting PROTECT IP would be smart to take a look at who's speaking here, note that these are not the usual folks who speak up about what's going on in DC, and recognize that this isn't just a standard complaint. These are people who are legitimately worried about the impact of such a bill on American innovation.


Reader Comments (rss)

(Flattened / Threaded)

  1.  
    identicon
    AJ, Jun 23rd, 2011 @ 1:47pm

    Score!

    "determined users who want to find blocked content will simply shift to services outside the reach of U.S. law, in turn giving a leg up to foreign search engines, DNS providers, social networks, and others. "

    Exactly! Obviously someone gets it! It doesn't matter if it is/is not legal here in the U.S. The internet is global, if there is a demand, you will be able to find it..... You want to stop pirates?! Kill the demand by servicing the customer!

     

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  2.  
    identicon
    Hothmonster, Jun 23rd, 2011 @ 1:50pm

    Hmmm, I would never have suspected that all these tops vcs were freetards. But there we have it, they are all a bunch of lying fud-filled pirate apologists who don't know how economics, business, or innovation works.

     

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  3.  
    identicon
    Anonymous Coward, Jun 23rd, 2011 @ 1:53pm

    You've got Vinod Khosla, Fred Wilson, Marc Andreessen, Ron Conway, Bill Draper, Esther Dyson, Brad Feld, Roger Ehrenberg, Eric Hippeau, Reid Hoffman, Tim O'Reilly, Alan Patricof, Danny Rimer, and many many others

    sounds like a bunch of thieving terroristic paedophiles to me

     

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  4.  
    icon
    Jay (profile), Jun 23rd, 2011 @ 1:55pm

    Re:

    Nah, they're doing this for the Lulz.

     

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  5.  
    identicon
    Anonymous Coward, Jun 23rd, 2011 @ 1:59pm

    VCs will always come down that way. They want the lowest cost of inventment up front, the biggest bang when they sell out the company going public, and then they are out of the game, not caring if the company really makes a go of it or if it is swallowed up by 1000 people duplicating their products.

    VCs have little interest in IP laws, they just get in the way of a fast buck.

     

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  6.  
    identicon
    A Guy, Jun 23rd, 2011 @ 2:03pm

    Re:

    The evil capitalists and innovators are just to pick on big media who have no interest in making money. They are only concerned about the children and the moral fiber of America.

    Give me a fucking break.

     

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  7.  
    identicon
    A Guy, Jun 23rd, 2011 @ 2:05pm

    Re: Re:

    I really wish tech dirt had an edit button. Oh well, my point stands despite my poor grammar.

     

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  8.  
    icon
    rubberpants (profile), Jun 23rd, 2011 @ 2:07pm

    Re:

    Wow, the sarcasm is strong with this one.

     

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  9.  
    icon
    rubberpants (profile), Jun 23rd, 2011 @ 2:08pm

    Re:

    Are they ancient behemoths trying to squeeze every last cent out of mountainous hoards of back catalog music? No?

    Then their opinions don't matter.

    Besides, I'm pretty sure all those signatories just want free music. I mean, I haven't looked into it but I have no problem demonizing those who have other ideas. It makes not listening to them much easier.

    Now I'm off to cloak myself in the self-righteousness of paid-for laws.

     

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  10.  
    identicon
    Anonymous Coward, Jun 23rd, 2011 @ 2:14pm

    Keep whining. I enjoy it.

     

    reply to this | link to this | view in thread ]

  11.  
    identicon
    out_of_the_blue, Jun 23rd, 2011 @ 2:23pm

    Just a bunch of pirates alarmed about /other/ pirates.

    "We believe in markets." Besides that /any/ market is enjoyable when one starts out at the top, note lack of the qualifier "free".

     

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  12.  
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    Josh in CharlotteNC (profile), Jun 23rd, 2011 @ 2:33pm

    Re:

    VCs have little interest in IP laws

    The fact that, without an existing trade group, a huge group of them all signed on to and agreed on an open letter to Congress disproves that.

     

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  13.  
    icon
    Josef Anvil (profile), Jun 23rd, 2011 @ 2:39pm

    Re:

    I'm begging Mike to add a "moron" button next to insightful. Comments like this one just scream in support of it.


    "VCs have little interest in IP laws, they just get in the way of a fast buck."

    Assuming that is correct, because we all know that so many companies funded by VC's turn around a huge windfall in a short period of time, what's wrong with that concept? Investing wisely in someone's innovation for profit.

    I suppose it's just not as great a business model as getting a lifetime monopoly rent (that wipes out the incentive to innovate).

     

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  14.  
    identicon
    Anonymous Coward, Jun 23rd, 2011 @ 2:39pm

    They're all pirate sympathizers.

     

    reply to this | link to this | view in thread ]

  15.  
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    N W Karels (profile), Jun 23rd, 2011 @ 2:42pm

    It's the Coalition of The Obsolete!

     

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  16.  
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    Richard (profile), Jun 23rd, 2011 @ 2:47pm

    Re:

    VCs will always come down that way. They want the lowest cost of inventment up front, the biggest bang when they sell out the company going public,

    Biggest non-sequitur in history.

    To make a profit when the company goes public you need some assets on the balance sheet. I would have thought that IP would be exactly the kind of thing they would need if they were intending to cut and run. The fact that they don't is actually mildly surprising and refreshing.

     

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  17.  
    identicon
    Jim Hownroll, Jun 23rd, 2011 @ 2:58pm

    Bankers

    Funny! Bankers(VC's) telling the Gov't what to do.

     

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  18.  
    identicon
    Anonymous Coward, Jun 23rd, 2011 @ 3:04pm

    Re: Re:

    Why? It's a fact.

    VCs come up with trendy BS that usually disappears within a few years.

    Anyway, a bunch of technerds lobbying for their fellow geeks is going to get one giant yawn from Congress.

     

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  19.  
    icon
    Ron Rezendes (profile), Jun 23rd, 2011 @ 3:08pm

    Re:

    Hothmonster must now clean my desk! The sarcasm was so thick and voluminous it actually dripped off my screen onto my TSR Reports. Now I have to come to work on Saturday to redo these damn things!


    Ummmm ya, I don't think so!

     

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  20.  
    icon
    Ron Rezendes (profile), Jun 23rd, 2011 @ 3:11pm

    Re: Re: Re:

    Trendy BS like wireless networks, social networking sites, search engines?

    You sir, are a fucktard!

     

    reply to this | link to this | view in thread ]

  21.  
    identicon
    Anonymous Coward, Jun 23rd, 2011 @ 3:24pm

    Considering this was one of the group photos they included with the letter it won't do much good: http://wegotthiscovered.com/wp-content/uploads/pirates.jpg-RESIZE-s925-s450-fit.jpg

     

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  22.  
    icon
    Richard (profile), Jun 23rd, 2011 @ 3:30pm

    Re: Re: Re:

    Why? It's a fact.

    Unsupported assertion.

    VCs come up with trendy BS that usually disappears within a few years.

    Successful ones that survive as VCs long term can't possibly be doing that.

    Anyway, a bunch of technerds lobbying for their fellow geeks is going to get one giant yawn from Congress.
    After the unappealing namecalling (why is it that that those who lack technical expertise are so ready to insult those who have, through abil;ity and hard work, mastered a difficult discipline?) you then come up with another assertion that can only be justified on the basis that you know Congress is either as ignorant as you are or has been bribed to behave as if they were.
    How do you know

     

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  23.  
    icon
    Richard (profile), Jun 23rd, 2011 @ 3:33pm

    Re: Bankers

    VCs!=bankers

     

    reply to this | link to this | view in thread ]

  24.  
    identicon
    Anonymous Coward, Jun 23rd, 2011 @ 5:55pm

    Aw, poor VC folks. What a crock. Protect IP is about MORE than big business folks. It will actually do more to help the little guys with smaller profit margins.

    The VC crowd can cry all the way to their banks.

    Time to get this law passed. If it's not the right version, work together to FIX IT and then PASS IT.

     

    reply to this | link to this | view in thread ]

  25.  
    identicon
    Matthew McIntyre, Jun 23rd, 2011 @ 5:57pm

    Re:

    I'm sorry to be the one who informs you of this, but you are the one who does not understand economics. These VC's know quite allot after all they have built multi-billion/million dollar businesses and are still quite successful. Thanks for your opinion but your an idiot.

     

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  26.  
    identicon
    JMT, Jun 23rd, 2011 @ 6:38pm

    Re: Re:

    You might want to try tweaking the settings on your sarcasm detector...

     

    reply to this | link to this | view in thread ]

  27.  
    identicon
    A monkey with Attitude, Jun 23rd, 2011 @ 8:09pm

    Re:

    You sir are an idiot if you believe that....

    Health Care you said... Just pass it and fix it... they passed it and still nothings changed but the money being passed around.

    Patriot Act... Just pass it and fix it the "terrorist are winning" .... Didn't work

    Monetize the Debt... Just do it and fix it later... BAD IDEAS AND BAD LAWS DONT GET FIXED... and THEY NEED TO BE STOPPED...

    Your just reversing the order and it STILL WONT WORK... basic logic tells you the idea is a FAIL... the process is a FAIL and no matter how hard you shill we know its a fail and that wont change... What will change is how we work the internet (oh yea thats right the people you hate so much know and run the internet and we will route around you)

     

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  28.  
    identicon
    Anonymous Coward, Jun 23rd, 2011 @ 8:36pm

    Re: Re: Re: Re:

    A VC needs only to hit about 1 in 50 to become stinking rich. Put a million here, 500k there, 50k there... one of them hits for a big IPO, and you make back 8 to 9 figures and call it a day. Sell out to Google or similar, and make 7 figures plus.

    My original point is only that VC's aren't in it for the development or the great discoveries, they are in it to turn their pile of money into a large pile of money. Legal issues, copyright, trademarks, and patents all get in the way of the "short cycle" from idea to IPO or Google buyout.

    It's like asking drug dealers if drugs should be legalized. Why not, right?

     

    reply to this | link to this | view in thread ]

  29.  
    identicon
    Neighbourhood Street Dealer, Jun 23rd, 2011 @ 9:54pm

    Re: Re: Re: Re: Re:

    legalizing drugs would flood the streets with cheap drugs and competitors. we'll lose our monopoly and prices will fall. we are against the legalization of drugs. /sacas

     

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  30.  
    icon
    The eejit (profile), Jun 23rd, 2011 @ 11:12pm

    Re: Re: Re:

    Well, then, the VCs can turn the next time Sony BMG want to start up a nerw label and laugh them off the face of the earth.

    Or they can give larger donations for a higher RoI from Congress, and make them pay attention. The best VCs can turn over a couple a billion dollars a year, whcih is taxed at every level, earning the Government more money (even from the flops).

    All the US is doing is driving VCs away to invest elsewhere. [sarc]The VCs are theiving pirates who want a free lunch![/sarc]

     

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  31.  
    icon
    G Thompson (profile), Jun 23rd, 2011 @ 11:36pm

    Re: Re: Re: Re:

    It seems to me that the more I look at these amazing new bills that are coming out of the USA the more I'm beginning to think they are a brilliant idea for every other country on the planet.

    I mean think of it, If these things pass, which is highly likely, the knock on effect will mean that other more democratic, innovative, and less protectionist countries will be able to fill the gap that these bills will enable. Investement will flow from the current regime of America and that a new Silicon Valley will be developed in other major, and non-centralised places around the world.

    Knowledge will be able to flow more freely since things like the DMCA, Encryption Export compliance, "National US Security" fallacies, etc.

    Bring on PROTECT IP, etc I say... the more the better for humanity as a whole.

    PS: For those Americans that these Bills will affect I offer my condolences for the soon to be loss of your economy, scientific community, and brightest people. Though you could always immigrate away from the USSA ;)

    PPS: Since I am from Australia this comment really isn't that sarcastic... sorry

     

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  32.  
    icon
    Richard (profile), Jun 24th, 2011 @ 2:42am

    Re: Re: Re: Re: Re:

    A VC needs only to hit about 1 in 50 to become stinking rich. Put a million here, 500k there, 50k there... one of them hits for a big IPO, and you make back 8 to 9 figures and call it a day. Sell out to Google or similar, and make 7 figures plus.


    According to that thesis VCs shouldn't really exist there should only be wannabee VCs (who haven't yet had a success) and ex VCs (who have retired on the proceeds.

    My original point is only that VC's aren't in it for the development or the great discoveries, they are in it to turn their pile of money into a large pile of money.

    There are many easier ways to do that than being a VC.

    Legal issues, copyright, trademarks, and patents all get in the way of the "short cycle" from idea to IPO or Google buyout.

    Actually copyrights, trademarks and patents are supposed to be the main things that you sell in the IPO or buyout. They are supposed to be the mechanism which makes abstract things tradeable.



    It's like asking drug dealers if drugs should be legalized. Why not, right?

    Drug dealers would certainly oppose repealing the laws which create their criminal business opportunity.

    They could not survive in the face of legal competition.

     

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  33.  
    icon
    The eejit (profile), Jun 24th, 2011 @ 3:50am

    Re:

    man what

    Remember, it's these guys that help sMEs the most. IF they don't invest, the economy cannot grow. This will spiral into a Great Depresssion-style stagflation ecomnomy for the US.

    It appears that you think this will not happen. I ecpect it will.

     

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  34.  
    identicon
    Anonymous Coward, Jun 24th, 2011 @ 6:16am

    cost of litigation could be significant

    This will appeal to the rogue lawfirms.

     

    reply to this | link to this | view in thread ]

  35.  
    identicon
    Anonymous Coward, Jun 24th, 2011 @ 6:20am

    Re: Re: Re: Re: Re: Re:

    This is a problem?

     

    reply to this | link to this | view in thread ]

  36.  
    icon
    The eejit (profile), Jun 24th, 2011 @ 6:28am

    Re:

    There are rogue-class law firms? Are they Assassination spec? OR Subtlety?

     

    reply to this | link to this | view in thread ]

  37.  
    identicon
    darryl, Jun 24th, 2011 @ 6:45am

    You would trust a VC ?

    I bet these were the same VC's that thought the SUB-PRIME LOANS and CREDIT DEFAULT SWAPS, were a good idea!

     

    reply to this | link to this | view in thread ]

  38.  
    identicon
    darryl, Jun 24th, 2011 @ 6:46am

    You would trust a VC ?

    I bet these were the same VC's that thought the SUB-PRIME LOANS and CREDIT DEFAULT SWAPS, were a good idea!

     

    reply to this | link to this | view in thread ]

  39.  
    identicon
    AJBarnes, Jun 24th, 2011 @ 7:02am

    Rock Paper Scissors Lizzard Spock Congress...

    Do you really think Congress CARES about creating jobs here in the US? Do you really think they're willing to give up big money contributions to do what is right? Surely you jest!

    As long as they're the lapdogs of the entertainment industry, they will sabotage, kill, hamper, impede or otherwise demand the destruction of what they're told is bad for their benefactors.

    If the automobile industry was as 'with it' as the RIAA, they'd lobby congress about car thefts. Think of the BILLIONS in sales the auto makers lose becasue of all the car thieves out there. Oh, how the woes of the big union automakers would be solved if we'd just make stealing cars illegal!! Thiefs would then be forced to buy that new BMW instead of stealing it. After all, the RIAA says that for every theft, there is a sale that is lost. The HAVE to be right, don't they?

     

    reply to this | link to this | view in thread ]

  40.  
    icon
    The eejit (profile), Jun 24th, 2011 @ 7:55am

    Re: You would trust a VC ?

    I'd trust a VC over an Investmnent Banker anyday of the week.

     

    reply to this | link to this | view in thread ]

  41.  
    icon
    Mike Masnick (profile), Jun 24th, 2011 @ 10:16am

    Re: You would trust a VC ?

    I bet these were the same VC's that thought the SUB-PRIME LOANS and CREDIT DEFAULT SWAPS, were a good idea!


    You have no idea what a VC does, do you? They have nothing to do with sub-prime loans and credit default swaps.

    I mean, seriously, there's a list of who signed this above. It's not even that hard to look up what they've done.

     

    reply to this | link to this | view in thread ]

  42.  
    identicon
    rxrightsadvocate, Jun 25th, 2011 @ 12:01pm

    PROTECT IP will also take away access to affordable meds

    It's great to see venture capitalists voicing their opposition to the PROTECT IP Act. If enacted, this bill would not only affect innovation in the tech sector, it would take away Americans’ online access to safe, affordable prescription medications.

    The PROTECT IP Act’s overarching language fails to make a distinction between rogue online pharmacies that do not require valid prescriptions and trusted, legitimate pharmacies that do. The bill would cut off a virtual lifeline that over a million Americans depend on for their needed medicine (they can't afford the price of drugs at home at home).

    RxRights is a national coalition of individuals and organizations dedicated to promoting and protecting American consumer access to sources of safe, affordable prescription drugs. The Coalition is encouraging consumers to take action now by sending letters to Congress and President Obama urging them to protect our right to safe, affordable medications. For more information or to voice your concern, visit www.RxRights.org.

     

    reply to this | link to this | view in thread ]

  43.  
    identicon
    JEONG CHUN PHUOC, Jun 13th, 2013 @ 8:40pm

    “INTELLECTUAL PROPERTY BLUEPRINT 2014-2020”

    “INTELLECTUAL PROPERTY BLUEPRINT 2014-2020”
    by Jeong Chun Phuoc, Adv of Competitive Legal Intelligence(CLI)

    OVERVIEW
    If EU focus is on piracy and counterfeiting, the ‘fair use’ factor must be treated objectively. The issue of patents and patenting policy and strategy remains controversial.
    In the UK, Professor Ian Hargreaves was tasked by the UK government under the leadership of PM David Cameron to give his review on how IP--including patenting activism-- affects UK IP innovation and IP growth as a whole within the Single Market.

    The Digital Economy Act has been perceived to be lacking in several departments especially IP innovation, and in the course of industrial interpretation, of course, was perceived to be an imperfect Act under this scorecard measurement. The same applies to patenting and innovation activism.

    ASEAN REGION
    In Asia/ASEAN region, including Singapore and Malaysia, the fair use practice
    has seen much judicial activism that challenges traditional thoughts in IP protection and innovation given the technological flux in an Age of K-Economy.

    MALAYSIAN PERSPECTIVE
    Prof Datuk Khaw Lake Tee(UM), Professor Dr Ida Madieha(IIUM) and Professor Dr.Lim Heng Gee(UITM) and Jeong Chun Phuoc (MMU,NUS,IIUM) of Malaysia have treated with delicate care a plethora of critical domestic IP issues, which have not seen proper redress from a policy and strategic analysis under the Competitive Legal Intelligence(CLI) assessment.

    However, there are certain IP improvements undertaken by Malaysian Intellectual Property Corporation (MyIPO) Chairman, Dato’ Abdul Manan Ismail in Malaysia.
    IP advancement has also seen a jump to a better field of IP protection and Innovation spectrum under the leadership of maverick former Chief Justice Tun Zaki Azmi.

    CONCLUDING RECOMMENDATION
    As at 13 June 2013, attempts are being made to quantum leap a draft proposal “Intellectual Property Blueprint 2014-2020″ for the Malaysian government to take lead in charting a new course in IP Innovation Roadmap.

    ……………...............
    JEONG CHUN PHUOC
    Pioneer Advocate in Competitive Legal Intelligence/CLI; Senior Lecturer-in-Law and Consultant External Law, AZMI & ASSOCIATES(advocates and Solicitors) Menara keck Seng, Jln Bukit Bintang,KL, Malaysia.
    He can be reached at his new email : Jeongchunphuoc@gmail.com

     

    reply to this | link to this | view in thread ]


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