Does MOC’s Prohibition on Item Sweepstakes Decrease the Profits for Game Companies in China?

(By You Yunting) Recently, the Ministry of Culture has issued the Notice of Ministry of Culture on Regulating Online Game Operation and Strengthening Interim and Ex Post Supervision (Referred to as “Notice”), which will be put into effect as of May, 2017. The Notice contains lots of specific policies, including the restrictive policy on providing virtual props and value-added services of an online game by sweepstakes (Referred to as “Item Sweepstakes”), which are the significant sources of profits for game companies. In this article, we’ll discuss whether this policy would affect the incomes of these game companies or not.

The Notice has two specific stipulations on Item Sweepstakes:

(1) It is forbidden to use direct or indirect transaction currency for Item Sweepstakes, or even such Item Sweepstakes is free, the companies shall disclose the rates of the Item Sweepstakes and item synthetic probability;

(2) The companies shall also offer the options for players to exchange or purchase such items and value-added services.

Why is the Item Sweepstakes forbidden? The Ministry of Culture has given us the explanations in its official interpretations of the Notice: “It is essential to ensure that the consumers should know what Read More...

Why Does Shanghai Court Dismiss a Non-use-Oriented Trademark Register in Malicious Lawsuit?

(By Yue Mengyan) There are many applicants who register a tremendous number of trademarks without the use-oriented purpose. Moreover, they register trademarks on obvious malicious purpose. In such situation, their enforcement for trademark protection shall be limited and their claims for compensation against trademark infringement may not be favored by the court.

Case Introduction

Appellant (Plaintiff at the first instance): Guangzhou Zhinanzhen Exhibition Service Co., Ltd. (the “ZHINANZHEN”)

Appellant (Plaintiff at the first instance): Guangzhou Zhongwei Enterprise Management and Consulting Co., Ltd. (the “ZHONGWEI”)

Respondent (Defendant at first instance): UNIQLO Trading Company (the Read More...

Could Coexistence Agreement Be Accepted in Trademark Application in China?

(By Yue Mengyan) Pursuant to China trademark laws and regulations, if certain trademarks have been already registered for certain goods, applicants cannot apply for such same or similar trademarks for any same or similar products. However, if the trademark coexistence agreement is made by the right holder of prior registered trademark and applicant of an identical or similar trademark without interfering in each other’s interests, then it is possible for the applicant to successfully obtain the approval of such application.

Case Introduction

Plaintiff: Beijing Weimeng Kechuang Network Technology Co., Ltd. (Referred to as “WEIMENG”)

Defendant: Trademark Review and Adjudication Board (Referred to as “TRAB”)

Right holder of Read More...

Laws and Regulations Update in December 2016

1. The Standing Committee of the National People’s Congress Promulgates the Cyber Security Law of the People’s Republic of China

The Standing Committee of the National People’s Congress promulgated the Cyber Security Law of the People’s Republic of China on 7th November 2016 to clarify duties and power of regulatory authorities about cyber security and legal responsibilities for personal information protection, strengthen individual’s control of private information and take tougher actions against infringement on personal information.  [Full Text]

2. The State Administration for Industry and Commerce Promulgates the Provisions of the Registration Administration of Advertisements

On 1st November 2016 the State Administration for Industry and Commerce promulgated the Provisions of the Registration Administration of Advertisements, which took effect as of 1st December 2016.

According to the Provisions, TV stations, televisions and newspapers engaging in advertising without going through necessary registration processes will be punished by the administration for industry and commerce in accordance with advertising laws. Any change of registered matters about advertisements should also be registered. If it fails to be duly registered, the authority concerned Read More...

Why It Is Difficult to Protect Copyrights in Live-Show Platforms in China?

(By You Yunting) Some users of ZHIHU.com (One of the most well-organized community for sharing knowledges online) asked: Would the network host infringe any right while singing at his or her own live-show room? If one host receives the user contributions from the audiences for his or her singing at such live-broadcast room, would such behavior infringe any right? Here come my answers:

The biggest problem of the hosts’ singing at their own live-show rooms is not about whether such behaviors infringe any right or not. Instead, the right holders of such songs have tremendous difficulties in protecting their rights.

The live-show hosts who are singing at their broadcast rooms can receive different kinds of user contributions. Such behaviors can be identified as “charged performances” and thus do not constitute fair use pursuant to the Copyright Law. If the hosts broadcasted songs in their performances without the prior consents of right holders, theoretically such behaviors might constitute infringements, and live-show platforms might be accountable for joint infringement.

However, the problem is that the costs of enforcement against such copyright infringement are extremely high.

  1. Evidence collection could be difficult due to lack of replay function

The feature Read More...

How to Determine Joint Liabilities of shareholder for IPR Infringement in China?

(By Wang Ting and You Yunting)The limited liability of the shareholders means that the liability of the shareholder to the company are limited to its capital contribution, and the independent personality of corporation means that the Company shall fulfill its external liabilities by all of its properties. Therefore, the shareholders usually do not take personal responsibility in IPR infringement cases even when the long-term business of the company is infringement of the intellectual property rights (“IPR”) in most cases. However, today we will introduce a recent case, in which the shareholders were determined to take such joint liabilities for the IPR infringements.

Introduction to the Case:

Appellant (Plaintiff at first instance): SAKURA BATH & KITCHEN PRODUCTS (CHINA) Co.LTD (Referred to as “SAKURA CHINA”)

Appellant (Defendant at first instance): SUZHOU YINGHUA Technology Development Co.LTD (Referred to as “SUZHOU YINGHUA”)

Appellant (Defendant at first instance): ZHONGSHAN SAKURA INTEGRATED KITCHENS LIMITED (Referred to as “ZHONGSHAN INTEGRATED”)

Appellant (Defendant at first instance): Read More...

Does Engaging Employee liable for Non-Competition Constitute Infringement in China?

(By Yue Mengyan) An employee violates non-competition clause in his previous labor contract with his former employer, and works for a new employer, which has a competitive relationship with his former one. Could the former employer claim the new employer to be liable for such infringement, in addition to the employee’s liability for breach of contract? Pursuant to relevant laws and regulations in China, we will introduce a case and make our analysis in the following.

Case Introduction:

Appellant (defendant of first instance): Liu Guoqing

Appellant (defendant of first instance): Beijing Qingke Houcheng Technology Ltd. Company (the “Qingke Company”)

Appellee (plaintiff of first instance): Beijing Ji’ao Juhe Technology Ltd. Company (the “Ji’ao Company”)

Court of first instance: Beijing Haidian District People’s Court

Court of second instance: Beijing Intellectual Property Court

Liu Guoqing entered a labor contract and the non-competition agreement with the Ji’ao Company, and then acted as the position of CTO. Upon the termination of their labor contract in 2013, Ji’ao Read More...

Laws and Regulations Update in November 2016

1.The Ministry of Commerce Publishes the Provisional Rules on the Establishment and Change of Registered Records of Foreign Invested Enterprises

Published on 8th October 2016, the Rules consists of clauses on the application scope, registration process, supervision and inspection procedures, legal responsibilities, etc. relating to the registration policy for the foreign invested businesses applying for establishment or a change of registered records not involving special access rules of PRC, set out in the revised versions of four foreign investment related laws including the Law of Foreign-funded Enterprises, issued by the National People’s Congress Standing Committee.   [Full Text]

2. The Ministry of Finance and the Ministry of Human Resources and Social Security issue the Interim Measures on the Provisional Rules on Occupational Annuities and Funds

Published on 28th September 2016, the Measures has made it clear that the forms of occupational annuities and funds are limited to domestic investments and that the total value of the investments of stocks, stock funds, mixed funds, stocks used as pension products cannot exceed 30% of the net assets of a particular investment portfolio.   [Full Text]

Read More...

Does the “GAP Underwear” Trademark Have Adverse Effect by Its Name?  

(By Luo Yanjie) Trademark Office (the “CTMO”) has been increasingly tightened its standards on trademark reviewing and claiming that the trademark itself may cause “adverse effect”. Competent authorities are more than inclined to use such grounds indiscriminately by treating it as an all-purpose shield to deal with distinct situations. Recently, the Supreme People’s Court remedied such phenomenon by making its decision on the GAP Underwear’s cases. The following is our detailed introduction:

Introduction to the Case:

Retrial Petitioner (Plaintiff at first instance, Appellant at second instance): GAP ITM INC. (盖璞(国际商标)公司, referred to as “GAP”);

Retrial Respondent (Defendant at first instance and Respondent at second instance): Trademark Review and Adjudication Board (the TRAB”);

Court of First Instance: Hefei Intermediate People’s Court No.(2012)合民三初字第00163号

Court of Second Instance: the Higher People’s Court of Anhui Province  No.(2013)皖民三终字第00072号

Retrial: Read More...

Laws and Regulations Update in October 2016

1. Decision of the Standing Committee of the National People’s Congress on Amending Four Laws including the Law of the People’s Republic of China on Wholly Foreign-Owned Enterprises

Published on 5th September 2016 and coming into effect on 1st October 2016, the Decision involves the amendment of Law of the PRC on Wholly Foreign-Owned Enterprises, Law of the PRC on Chinese-Foreign Equity Joint Ventures, Law of the PRC on Chinese-Foreign Contractual Joint Ventures and Law of the PRC on the Protection of Investments of Taiwan Compatriots. According to the amended laws, the registration system applies to foreign invested companies, joint ventures, Chinese-Foreign cooperative companies, which are not required by national laws to follow special market access administration rules promulgated by or with approval of the State Council, when they are being established or undergoing a change. The decrees issued by the State Council ordering a temporary change of laws and rules for the free trade zone as authorized by the Standing Committee of the National People’s Congress will no longer continue in effect.   [Full Text]

2. The State Council Makes the Opinions on Ensuring the Continuous Healthy Development of Business Startups Available to the Public

Published on 20th Read More...

Laws and Regulations Update in September 2016

1. The Ministry of Transport and Seven Other Departments Co-Promulgate the Interim Measures on the Administration of Online Taxi Booking

The Ministry of Transport, the Ministry of Industry and Information Technology, the Ministry of Public Security, the Ministry of Commerce, the State Administration for Industry and Commerce, the General Administration of Quality Supervision, Inspection and Quarantine and the Cyberspace Administration, of the People’s Republic of China co-promulgated the Interim Measures on the Administration of Online Taxi Booking (“Measures”) on 14th July, which will take effect on 1st November. Qualified private cars under the Measures can be used as vehicles bookable online and registered as “taxis for passengers to be booked online”. The Measures further expressly sets out that “the fare for the vehicles bookable online is subject to variable market prices, except the municipal government believes it necessary to implement the government’s guidance price”, “any vehicle bookable online that has been driven for up to 600 thousand kilometers must be reported as an abandoned vehicle”, and “any person driving a vehicle bookable online is required to have no criminal record”.   [Full Text]

2. China Banking Regulatory Commission and Four Other Read More...

Laws and Regulations Update in August 2016

1. The Ministry of Justice Issues the Notice on the Revocation of the Notice of the Ministry of Justice and the Ministry of Construction on Strengthening the Notarization Work for the Property Registration Administration

According to the Notice of the Ministry of Justice on the Revocation of the Notice of the Ministry of Justice and the Ministry of Construction on Strenthening the Notarization Work for the Property Registration Administration, notarization is not necessary to complete real estate registration formalities relating to inheritance, will, bequeathing, ownership transfer of property involving persons from abroad or Hong Kong, Macao or Taiwan.   [Full Text]

2. The State Administration for Industry and Commerce Promulgates the Interim Measures on Internet Advertising Administration

The State Administration for Industry and Commerce promulgated the Interim Measures on Internet Advertising Administration (“Interim Measures”), which will come into effect as of 1st September 2016.

The Interim Measures was made by taking account of the actualities of the internet advertising industry to give details about how to implement the new Advertising Law, set standards for Read More...

Laws and Regulations Update in July 2016

1. The State Council Publishes the Guiding Opinions on the Establishment and Strengthening of the Credit-Based Incentive and Punishment System in Order to Accelerate the Build-up of Social Credit and Moral Awareness

 

On 12th June 2016 the State Council published the Guiding Opinions on the Establishment and Strengthening of the Credit-Based Incentive and Punishment System in Order to Accelerate the Build-up of Social Credit and Moral Awareness (“Guiding Opinions”)

The Guiding Opinions indicates the necessity of the rapid development of the social credit system, making information about a person’s credit more widely available and shared, by using motivation and restraint in a legal way and creating a credit-based incentive and punishment mechanism involving government authorities and other communities in various regions, departments and areas, in order to make sure that people could do businesses in legal and honest ways without violating the good market order, in a society with good moral awareness. [Full Text]

2. The State Administration for Industry and Commerce Publishes the Opinions on the Administration of Expansion of the Opening-up to Hong Kong and Macao Residents’ Read More...

Laws and Regulations Update in June 2016

1. Notice of the State Council on Issuing the Transitional Plan on Adjusting the Distribution of the Value-Added Tax Revenue between the Central Government and the Local Governments after the Comprehensive Promotion of the Pilot Program of Replacing Business Tax with Value-Added Tax

This Notice was issued by the State Council on 30th April 2016, stating that the transitional plan described therein would come into effect on 1st May 2016 and the transitional period would be two to three years. According to this Notice, the repayment base for the central government and the payment base for the local governments should be assessed on the base of the year 2014, and the total income from payments for the value added tax would be shared by the central government and the local governments, of which 50% belongs to the central government and the rest 50% would be allocated to and shared by the local governments of the areas of the taxpayers.

(Official Website of the PRC Government:

http://www.gov.cn/zhengce/content/2016-04/30/content_5069490.htm

2. Announcement of the State Administration of Taxation on Publishing the Administrative Measures on Exempting Persons Involved in Cross-Border Read More...