(By Lisa Li)In accordance with the PRC Company Law (hereinafter referred to as the “Company Law”), the Regulations of PRC on Administration of Company Registration (hereinafter referred to as “Company Registration Administration Regulations”) as well as the Law of PRC on Foreign Invested Enterprises (hereinafter referred to as “Foreign Invested Enterprises Law”) etc and based on the author’s prior experience in handling cases of early dissolution and liquidation of companies, we summarized key points and practical experience regarding the early dissolution and liquidation process of wholly foreign invested companies, including foreign invested enterprises owned by one sole foreign investor and those jointly owned by foreign investors (hereinafter collectively referred to as the “WFOE”) prior to expiration of the registered operation term.
(By Lisa Li) As of April 2017, the Circular on Fully Implementing the Work Permit System for Foreigners to Work in China jointly issued by the State Administration of Foreign Expert Affairs, the Ministry of Human Resources and Social Security, the Ministry of Foreign Affairs and the Ministry of Public Security (the “Circular”) has been implemented in China to integrate previous foreigner’s employment permit and foreign expert work permit as the foreigner’s work permit, aiming to simplify the foreigner’s work permit application procedures and to facilitate the introduction of foreign talents. In accordance with the relevant laws, regulations and policies regarding the foreigner’s work permit and from our recent experience, we summarized the following main points and some best practices regarding the foreigner’s work permit in order to provide a brief overview on the foreigner’s work permit system in China.
1. Circular Notice on Adjusting Import Taxes on Certain Commodities
Promulgated by the Ministry of Finance
Document number: No.25  TB
Promulgation date: 22nd November 2017
Effective date: 1st December 2017
As from 1st December 2017 import taxes on certain commodities are reduced based on current tax rates. The import tax reduction this time applies to 187 commodities with an 8-digit tax number such as food, healthcare products, medicine, cosmetics, clothes, shoes and hats. The average tax rate is reduced from 17.3% to 7.7%. The tax rate of diapers and nappies is reduced from 7.5% to 0%. The tax rate of certain baby milk powder products is reduced from 20% to 0%. (Source: Website of the Ministry of Finance)
(By Xiong Leizhi) Some popular We Chat accounts recently received a lawyer letter about copyright infringement from a well-known picture library. Before that some We Media were sued for picture infringement. Content creators are in trouble since 2015 when capital flooded in and proceeds surged. In the circumstances where start-ups abound and the gross national attention remains constant, each start-up tries to attract customers quickly and keep their interest for a long time. However, it takes much time to create an original piece of content. As a result, increasingly more unauthorized copies of works appear. The above cases that recently happened arose out of infringement.
According to a recent media report, someone made a malicious complaint against Wechat public accounts, resulting in a large number of public accounts containing the word “beauty” closed by Tencent, perhaps because the word “beauty” has been registered as a trademark and such an owner filed a complaint on this matter. Afterwards L’Oreal appealed for recovering its public account of “YSL Saint Laurent Beauty”. As such an incident has been heated up via the Internet, Tencent recovered all the public accounts it previously closed. Now let me introduce you approaches to deal with a malicious complaint against a public account.
Pursuant to the Anti-Monopoly Law, the Civil Procedure Law and the Arbitration Law, there is no limitation of applying arbitration clause as a settlement to monopoly disputes in China. The Arbitration is well acknowledged for its confidentiality, flexible legal or commercial basis of arbitrating and its finality of one award, which are perfectly adapted to the requirements of confidentiality, efficiency and reliance on customs in business operation. Therefore, the practice of arbitration clause can bring about significant values and meanings to commercial subjects, and furthermore help indicate various risks and opportunities of different timing in relevant market. In this essay, we will introduce relevant cases and investigate whether the judicial opinions on arbitration clauses applied in monopoly disputes are appropriate.
1.Catalogue of Industries for Guiding Foreign Investment (Revised Edition 2017)
Promulgated by the National Development and Reform Committee
File No. No.4 Order of the NDRC
Promulgation date: 28th June 2017
Effective date: 28th July 2017
The Catalogue of Industries for Guiding Foreign Investment (Revised Edition 2017) first introduced the negative list for foreign investment access, containing 63 articles about restrictions and prohibitions, decreased by 30 articles compared with the 2015 edition. The Catalogue shall be the basis on which the pre-establishment national treatment and negative list administration model is implemented. No measure should be taken to restrict foreign investment access to any area outside the scope of the negative list. The new Catalogue further relaxes the restrictions on foreign investment access to service, manufacturing and mining industries and especially abolishes the restrictions on foreign investment access to industries of oil and gas for special use, precious metals, lithium ores, etc. (Source: Website of the National Development and Reform Committee)
(By Ning Tinggang) Beijing Intellectual Property Court recently introduced some movie, TV series, music, animation and game related cases it heard in 2015 and 2016 via its public WeChat platform, including the trademark “Kuroko Basketball” invalidity case which inspired me. The way that the court dealt with this case shows a new trend of protecting merchandizing interests which we legal professionals should pay attention to.
Kuroko Basketball is a popular comic work about basketball created by ふじまき ただとし, a Japanese comics artist. The work was serialized on the magazine SHONEN JUMP published by Shueisha since the second issue in 2009, and then was adapted for an animation and first broadcast on 7th April 2012. The plaintiff, SL Sport Ltd. in Kaiping (“SL Company”), filed a trademark-register application to the trademark office on 19th July 2012. As approved, this trademark (“Disputed Trademark”) should be used under Class 25. In addition, SL Company registered tens of trademarks closely connected with popular comics works such as Kuroko Basketball and SLAM DUNK that Shueisha had published, including trademarks used under Class 18, 24, 25, 35 and other types of commodities or services. Thus, Shueisha filed a request for declaration of invalidity of the Disputed Trademark.
1.Circular on Special Administrative Measures for the Access of Foreign Investment to the Pilot Free Trade Zone (Negative List) (for 2017)
The revised edition is intended to further improve the access for foreign investment. The new negative list consists of 15 categories, 40 sub-categories and 95 special administrative measures, with 10 sub-categories and 27 measures removed from the negative list 2015, including 6 sub-categories with respect to subway equipment manufacturing, pharmaceutical manufacturing, road transport, insurance, accounting and auditing and other business services removed and 4 sub-categories combined with other sub-categories. The Special Administrative Measures on Foreign Investment Access to the China (Shanghai) Pilot Free Trade Zone (Negative List) published on 8th April 2015 was abolished at the same time.
1.The Supreme People’s Court and the Supreme People’s Procuratorate Give the Clarification of Several Issues on Dealing with Criminal Cases of Personal Information Infringement
The Clarification consists of 13 articles to clarify the definition of “personal information”, the decision making criteria on unlawful “provision of personal information”, the conviction criteria on personal information infringement, etc. Article 2 thereof states that violation of laws, rules and bylaws governing the protection of personal information should be deemed as “violation of applicable national laws” specified in Article 253.1 of the Criminal Law.
1.The State Administration for Industry and Commerce Releases the Opinions on Making the Registration Process More Efficient and Reforming the Registration of Business Names System
In order to deepen the business system reform, make the process of registering business names (including names of farmers’ cooperatives and individually owned businesses) more efficient and reform the registration of business names system, the State Administration for Industry and Commerce released on 19th April 2017 the Opinions on Making the Registration Process More Efficient and Reforming the Registration of Business Names System, opening the database of business names and related services.
（By Albert Chen）Last year Beijing Intellectual Property Tribunal dealt with an infringement case involving a QQ group and made the same decision as the first-trial court that the group’s administrator should be responsible for the infringement, but with different reasons. Detailed analysis of differences in the reasons for decision given by the two courts will help you answer the question of whether the group administrator should be brought to account for direct or indirect infringement.
1.The National People’s Congress Votes to Adopt the General Principles of the Civil Law of the People’s Republic of China
On 15th March 2017 the National People’s Congress voted to adopt the General Principles of the Civil Law of the People’s Republic of China which will take effect on 1st October 2017.
The new General Principles of the Civil Law includes new provisions on inheritance rights of a fetus, boundaries of limitation on capacity for civil conduct, legal entities, statutes of limitations, etc.
1.The State Council Issues the Notice on Active Measures to Expand Opening Up and Use Foreign Funds
On 17th January 2017 the State Council issued the Notice on Active Measures to Expand Opening Up and Use Foreign Funds in order to clarify opening up and foreign fund use policies and create a fair and favorable market environment.
(Source: Website of the Central Government)
2.The State Administration for Industry and Commerce Publishes the Opinions on Comprehensive Promotion of the Simplified Registration Cancellation Policy
(By Wang Ting) In China, the Trademark Law applies the Principle of First Filing and when the Trademark Office reviews these applications, they usually examine whether there are prior applications or registrations existed, but not the intentions of filing such prior registrations. It means they don’t consider the bad faith during trademark registration procedure. Many foreign companies have applied and obtained the trademarks for their own products and services at the beginning. However, as so-called villains can always outsmart, besides the malicious registrations of others’ un-registered trademarks, there are lots of cases in which the trademark squatters register the well-known or popular trademarks on different goods or services. Thus foreign companies suffered from such consequences. Today, in our introduced case, we are going to discuss about the situations that the acts of malicious registrations under different classes are finally determined as improper means as stipulated in the Trademark Law.