China Laws and Regulations Update in November 2020

1.CopyrightLaw of China (Revised)

Promulgated by the Standing Committee of the National People’s Congress

Promulgation date: 1 November 2020

Implementation date: 1 June 2021

Document number: No.62 Chinese President Order

Major clauses revised this time are as follows.

I.Changes of relevant wordings and new rules and measures to meet practical needs

Changing movies and works created in a similar way of making a film to “audiovisual works”; creating rules on recordation of works, making the public accessible to information about owners of rights in works; changing wordings relating to the broadcast right to adapt to new technologies for simultaneous online broadcast and use of works; clearly stating that as owners of neighboring rights radio and IV stations have the right to broadcast through information network in “signals containing programs” they broadcast; adding provisions on technical measures and right control information to solve problems in protecting them online and offline as a whole.

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An Analysis of the Export Control Law from the Angle of National Security and Interests

(By Wang Haichua)The Export Control Law adopted by the Standing Committee of the National Congress on 17 October 2020 took effect on 1 December 2020. The aim of this law to accord paramount status to national security and interests was reflected in its official version and the process of its amendment in its formulation procedures. This article is an analysis of this law from the angle of national security and interests.

1.National security and interests up to the highest status

Article 1 of the Export Control Law provides that the aim of making this law is to protect national security and interests, perform the international duty of non-proliferation and strengthen export control. The second draft published in July 2020 changed the order of the phrases “protect national security and interests” and “perform the international duty of non-proliferation” so that the former came before the latter. In contrast with the second draft, in Articles 2, 9 and 10 of the official version the phrase “protect national security and interests” comes before the phrase “perform the international duty of non-proliferation”. The amendments are aimed to align the clauses with Article 1 and reflect the top aim of making the law to protect national security and interests.

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China Laws and Regulations Update in October 2020

1.Patent Law of China (Revised)

Promulgated by the Standing Committee of the National People’s Congress

Promulgation date: 19 October 2020

Implementation date: 1 June 2021

Document number: No.55 Chinese President Order

The revised law mainly deals with the following matters.

I.Increase of the cost of infringement, making infringers pay high prices

The revised law creates rules on punitive damages, under which in serious cases of patent right infringement, the court can decide the amount of damages at one to five times an amount calculated on the basis of patent holder’s loss, infringer’s benefits and times the patent license fee. In addition, it increases the upper limit of statutory damages to RMB 5 million and their lower limit to RMB 30 thousand. To solve evidence collection problems in patent cases, the revised patent law further improves evidence rules and provides that if the patent holder has make greatest possible efforts to collect evidence and most of books and materials connected with infringement are controlled by the infringer, the court can order the infringer to present such books and materials and reduce the patent holder’s burden of proof.

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Could Gathering Images through Cameras in Advertising Screens Create Law Violation Risks?

According to People’s Daily, the Personal Data Protection Law (Draft) was recently submitted to the Standing Committee of the National Congress for deliberation. I believe it protects personal data better and offsets disadvantages of the Cyber Security Law in protecting offline citizens’ data, which could increase law violation risks to non-internet businesses, for example Focus Media that was criticized for its intention to gather images through cameras in advertising screens.

Focus Media, if using cameras in advertising screens to gather images for big data analysis, would violate the Personal Data Protection Law (Draft) providing that “image collection and identity recognition devices placed in public places should be necessary for public security”. Its gathering, processing, transmission and storage of personal data are controversial and accompanied by risks of being punished by regulatory authorities for personal data protection purposes. The worst possible outcome is a closure of that business. More details are as follows.

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China Laws and Regulations Update in July 2020

1.Instructions (Given on an Experimental Basis) by the Supreme Court on Application of Law and Case Searches

Promulgated by the Supreme People’s Court

Promulgation date: 27 July 2020

Implementation date: 1 August 2020

Document number: F.[2020] 185

Case searches help judges make correct judgement. If a dispute arises from application of law or no clear or uniform decision-making rules exist, judges need to study the application of law more carefully and decide more prudently. To standardize the exercise of the decision making right and cause uniform rules on application of law to be implemented, the Instructions states that in one of the following events, case searches are required: 1. to propose to submit to the qualified (presiding) judge meeting or trial committee for deliberation; 2. in the absence of clear or uniform decision making rules; 3. the president or chairman requires case searches within their power to monitor and administer trials; 4. other event in which case searches are necessary to standardize the case search report mechanism. (Source: Website of the Supreme Court)

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An Analysis of the Effect of Liability Limitation Clauses (Part I)

(By Guo Yaojie)Businesses may encounter contract risks in the course of regular business operation. Increasingly more businesses have become aware of the importance of risk prevention and started to put focus on risk control and prevention. Liability limitation clauses are often seen in contracts. What do liability limitation clauses mean? How do they work? What about the validity of liability limitation clauses in contracts? To find answers to these questions, read this article.

1.General liability limitation clauses

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China Laws and Regulations Update in June 2020

1.The Law of the People’s Republic of China on Safeguarding National Security in the Hong Kong Special Administrative Region

Promulgated by the Standing Committee of the National People’s Congress

Promulgation date: 30 June 2020

Implementation date: 1 July 2020

Document number: No.49 President Order

The Law of the People’s Republic of China on Safeguarding National Security in the Hong Kong Special Administrative Region consists of six chapters, i.e. General Principles, Duties, Bodies, Offenses and Penalties, Jurisdiction, Applicable Law and Procedure, Office for Safeguarding National Security of the Central People’s Government in the Hong Kong Special Administrative Region and Supplementary Provisions, including altogether 66 articles. This is an comprehensive law containing articles of substantive, procedural and organization laws.

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Strategies for Protecting Intellectual Property Rights in Online Education Platform Software

(By Gao Shaoyi, Li Rong)Online education is becoming increasingly more important to educational and training industries due to the impact of Covid-19. Online education platforms provide various educational services including course video recording, live online teaching, personalized teaching and instructing, test question searching, work assessment, etc., which to some extent reduce the effect of suspension of on-campus classes on teachers and students. There are many online education platform developers and a lot of online education platform software products launched. Some software brands are copied from others. Therefore, for online education platform software developers, giving a protection for intellectual property rights in their online education platforms in all respects is the only way to gain more core competitive advantages and succeed in today’s market.

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China Laws and Regulations Update in May 2020

1.The Civil Codeof the People’s Republic of China

Promulgated by the National People’s Congress

Promulgation date: 28 May 2020

Implementation date: 1 January 2021

Document number: No.45 President Order

The Civil Code of the People’s Republic of China consists of 1260 items in seven chapters, i.e. general principles, rights in property, contracts, personality rights, marriage and family, inheritance, infringement and attached sections.

The lawmaking committee of the Standing Committee of the National People’s Congress started to work on the Civil Code in March 2015. The general principles of the civil law were reviewed and passed on the 5th meeting of the 12th National People’s Congress in March 2017. In December 2019 the Standing Committee of the National People’s Congress reviewed the draft of the Civil Code incorporating the general principles of the civil law and drafts of the chapters of the amended Civil Code and decided to submit the draft of the Civil Code to the 3rd meeting of the 13th National People’s Congress for review.

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How to Calculate the Time Limit on Liability-Exempt Delay in Construction Work of Builder Units Due to Convid-19

(By Nie Shengnan)Just before the Chinese Spring Festival 2020, Convid-19 broke out across our country. The government has taken a series of measures to control the spread of the disease, including spring festival holiday extension, increases in the number of inspectors, closure of highways, delay of work and business resumption, quarantine at fixed places and times, etc. These measures are bound to affect the term of work on construction projects. How to calculate the time when the majeure force incident appears and disappears is an issue that the parties involved are very concerned about and is very likely to cause disputes when builder units claim exemption of liabilities based on force majeure clauses.

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China Laws and Regulations Update in April 2020

1.Opinions (I) on Legally and Appropriately Dealing with Civil Cases Arising from the Covid-19 Pandemic

Promulgated by the Supreme People’s Court

Document No. F.F.[2020] 12

Promulgation date: 20 April 2020                            

Opinions is comprised of ten items relating to use of support services provided by legal authorities, accurate application of force majeure rules, legally and appropriately dealing with contract, labor and other cases, exemplary damages, suspension of time limit on legal actions and extension of the period of legal proceedings, aid and support from legal authorities and companies. In general, the Opinions are given mainly from four aspects below.

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Has Luckin Inc. Violated Chinese Criminal Law?

(By Zhao Sen)There is a widespread concern about the news that Luckin Coffee, a famous Chinese company listed on the US stock market underwent an over 80% slump in share price because of the allegation of financial information falsification. According to documents provided by Luckin Coffee to SEC, Tencent Securities reported, CEO of Luckin Coffee and some of employees who reported to him did improper activities, including false deals since the second quarter of 2019. According to the US Securities Law 1934 and the Sarbanes-Oxley Act, in addition to a large sum of fines, a person who has committed securities related fraud may face an imprisonment of up to 25 years. Is falsification by Luckin Coffee a crime in Chinese law? This is a good question.

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China Laws and Regulations Update in March 2020

1.Information Security Technology and Personal Information Safety Rules

Published by the State Standardization Administration

Document No. GB/T 35273-2020

Publication date: 6 March 2020

Implementation date: 1 October 2020

Rules deals with personal information collection, storage and use matters and states that personal information owners have the rights to access, correct, remove, revoke the license, cancel the account and obtain copies of personal information. There are three major changes this time from the 2017 version.

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New Changes in Export Control Rules of China

(By Wang Haichuan)The new Export Control Law of China (the “Draft”) was published for public comments on December 28, 2019. This is the first law on export control in China. Export control means measures taken to prohibit or restrict the export of certain items such as nuclear, biological products or weapons in order to fulfill international obligations such as non-proliferation obligation, national security and development interests, etc. Currently, there are administrative regulations of export control on chemicals, general nuclear items, nuclear items used for multi-purpose, missiles, military products, biological products (the “Current Regulations”). Compared with the Current Regulations, the Draft makes no change in the current regulatory mechanism and allocation of responsibility and duties, appropriately improves the system and measures and fills blanks in laws. This article will focus on the changes in export control and their possible impact on companies doing business in China.

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China Laws and Regulations Update in February 2020

1.Foreigner Permanent Residence Regulations of the People’s Republic of China (Draft Version)

Published by the Ministry of Justice

Publication date: 27 February 2020

Draft Version clearly states that the foreign permanent resident’s identity card is the identity document of foreign permanent residents in China. Foreign permanent residents with this document can do and none of relevant organizations and their staff can prevent them from doing certain activities. Draft Version sets out the eligibility for foreigners applying for permanent residence in China. For instance, foreigners who have made globally recognized achievements in economics, science and technology, education, culture, health, sports and other areas can apply for permanent residence application directly. Foreigners who have made significant contribution to China’s economic and social development and obtained recommendation of relevant government authority or the provincial, autonomous region or municipality government may apply for permanent residence. Foreigners who are needed for the national economic and social development such as urgently needed talents introduced into state key industries and areas and recommended by relevant regulatory authority may apply for permanent residence application. Draft Version provides that the foreigner wanting to obtain permanent residence in China should file a permanent residence application to the exit and entry administration affiliated with the public security department of the place where the applicant lives. The applicant should ensure information contained in the application form is true, submit photos of their passport or other international travel document or of specific standards and other documents, attend an interview and give their human identification information such as fingerprint. Foreign permanent residents cannot stay in China for less than three months every year. According to Draft Version, foreign permanent residents can use the entry and exit passages only for Chinese citizens, buy commercial houses in China by relevant rules for personal use or to live in, pay and use public housing funds by public housing fund management rules. Foreigners with permanent residence in the specific age group or their accompanying children who have not reached adulthood can receive compulsory education in China and only need to pay mandatory fees. (Source: Website of the Ministry of Justice)

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