Author Archives: yytbest

Is Apple Breaching China’s Foreign Exchange Management Rules in the App Store?

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(By You Yunting) In November of 2011, Apple Inc. began allowing its users in China to purchase app by RMB. At the time, the author believed that it means Apple would operate its AppStore in China. Yet unill now, the business concerning AppStore of Apple is still run by iTunes S.A.R.L.(the “iTunes”), the company registered in Luxembourg, a subsidiary of Apple Inc. Furthermore, according to the relevant International convention on transnational transaction, neither Apple nor iTunes is required to pay taxes for Chinese user’s purchase of the apps to the Chinese government. For Apple and iTunes, on one hand they take the payment in RMB, but on the other hand, they do not pay the taxes. This business model is achieved through the third party payment method. In this situation, the third party payment service provider would collect the payment from the Chinese users, and then transfer them to overseas. But this business model is at risk of violating the foreign currency control regulations of China. The following are the opinions of the author on this issue.

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Does 360’ s QQ Guard Constitute Unfair Competition against Tencent? Part II

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 (By Luo Yanjie) Today, we would give our opinions on 360’s unfair competition ruling.

Lawyer’s Comments:

The case is a part of the “3Q battle”, and has garnered wide attention in the society. Both parties in the case have submitted large amounts of evidences to support their claims. As showed in the judgment, the case seems to be very complicated. Moreover, because 360 provided the service for free, 360’s lose in the case has gained the sympathy of Internet users. However, from a legal standpoint, this case is not difficult. The ruling against 360 was proper for the following reasons:

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Does 360’ s QQ Guard Constitute Unfair Competition against Tencent? Part I

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(By Luo Yanjie) Abstract: Although online ads or pop-up ads may make you feel uncomfortable, that is a profit model utilized by free software like Tencent’s QQ, the popular online messaging software. But, when the 360 Guard software removed QQ’s ads, despite that being deemed reasonable in the eyes of some netizens, it would no doubt damage Tencent’s legal rights as QQ’s developer and operator. The author believes that it was proper for the court to determine that 360 had engaged in unfair competition practices. Today we’d like to introduce a bit about this case to our readers, beginning with today’s post and extending into tomorrow’s.  

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Whether using the Name of Another’s Work Constitutes Copyright Infringement or Unfair Competition

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Abstract: The Copyright Law and the Anti Unfair Competition Law supplement each other, but they also compete with each other. In the case introduced in this article, the first instance court denied the copyright infringement claim, but confirmed liability under the principles of unfair competition. This seems to be logically contradictory, and the court in the second instance corrected this glaring mistake.

(By Luo Yanjie Unfair competition refers to an operator’s misconduct that violates principles of fairness, justice, and good faith; it is also considered any behavior that violates widely adopted commercial ethics. As for copyright, as a kind of exclusive right, it mainly focuses on granting the right holder a monopolistic right in conformance with the law, and thereby grants the right holder monopoly rights as well as a competitive advantage through the exploitation of his/her own intellectual works. In this particular aspect, it shares a similar purpose with the Anti Unfair Competition Law. For this reason, the Copyright Law and the Anti Unfair Competition Law supplement each other, yet on the other hand they also compete with each other.

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China Supreme Court Publishes New Judicial Interpretation on Competitive Restriction Clauses

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(By Albert Chen) The system of competitive restriction is one of the major systems concerning the protection of trade secrets. In the beginning of 2013, the Supreme People’s Court of China (the “Supreme Court”) published its Interpretation IV on Several Issues concerning the Application of Law in Hearing Labor Disputes (the “Interpretation IV”). According to the new Interpretation, the rules related to the labor issue include: 1) a competitive restriction clause is valid when no article has been made regarding payment for the restriction; 2) removal of competitive competition due to delayed payment for the restriction compensation; 3) the employee may claim extra compensation when an employer terminates the restriction.

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Why No Solution to “Box Office Stealing” under the Current Laws in China?

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(By You Yunting) Abstract: the author was interviewed: is “box office stealing” mainly a result of a defect in GAPP’s legislature (the General Administration of Press and Publication) and SARFT (State Administration of Radio, Film and Television)? For this issue, the author’s opinion is that the administration and governance over the film industry is the real reason this problem arises, because there is really no way this would happen otherwise, and its unlikely those right holders would try to protect their rights, making the aggressive parties even more aggressive. Thus we would only see the bad drives out the good.

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Can “屌丝” Serve as a Trademark or Online Game Name in China?

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(By You Yunting) Recently, Mr. Shi Yuzhu, the senior executive of Giant Inc. has once again entered the flurry of public opinion. The main reason is that he claimed on his Weibo that the company has applied for 屌丝 as a trademark, and he also joked that anyone using the term must pay the company one yuan. (屌丝 (diaosi) means pubic hair in Chinese, but it has been used on the internet to popularly refer to losers). Curious about Mr. Shi’s words, the author checked the Trademark Office’s database for the application for 屌丝 in classes concerning online games. Perhaps because the application was filed recently, there is no indication of Giant Inc.’s application in the database. But, the author also found that Giant’s opponent, Suzhou Woniu Company, has applied for the trademark 屌丝侠 in Classes 9, 38, 41, and 42 on May of 2012, and all of these application are related to online games.

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Can Genes Be Patented?

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(by George Wu) About two weeks ago on April 15, 2013, the Supreme Court of the United States heard oral arguments concerning the matter of patenting of genes.  Myriad Genetics and the University of Utah are the owners of several patents related to the isolated human BRCA1 and BRCA2 genes.  Particular sequences of the BRCA1 and BRCA2 genes predispose women to early-onset of breast cancer and ovarian cancer.  The American Civil Liberty Union (ACLU) and several other parties are challenging the validity of these patents.

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China’s Latest Laws and Regulations in April 2013

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I. The Supreme People’s Court and Local People’s Courts Successively Released White Books on Judicial Protection of Intellectual Property in 2012 and Model Cases.

On April 22, before World Intellectual Property Day, the Supreme People’s Court released the White Book on Judicial Protection of Intellectual Property By Chinese Courts in 2012 (the ”White Book”) and Model Cases embodying new Issues related to intellectual property protection.

Afterwards, the local people’s courts successively released local white books on local intellectual property protection and local model cases. On April 25, the Shanghai High People’s Court held a press conference and released the White Book of the Shanghai People’s Court on Intellectual Property Adjudication in 2012 and Ten Key Cases.

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What do the First Valuation Adjustment Mechanism (VAM) Lawsuits in China Tell Us?

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Analysis on the HF Fund’s lawsuits against Gansu Shiheng and Hong Kong Dia

(By Bai Lituan & Zhang Qianlin) In December 2012, HF Fund Management Co., Ltd. (the “HFF”) filed a lawsuit against Gansu Shiheng Nonferrous Metals Co., Ltd (the “GSNM”), and after being heard by the Supreme People’s Court, the Court stated that the valuation adjustment Mechanism (VAM) would be considered partially valid. This particular case has been seen ups and downs, and now that it has finally been heard, we would like to share our opinions on it within a framework of legal analysis, and hope that it will help clarify any issues presented in the case and thus help to reduce the risks investors typically face.

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How to Decide the Domain Name Belonging When It Conflicts with Renowned Names?

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(By Albert Chen) Our website has introduced readers to the dispute between Ms. Yue and Mr. Zhou Libo, a popular talk show act in China. Yue, the plaintiff, lost the case in the first instance, because the court decided that her domain name registration was likely infringement, and that the domain name shall be Zhou Libo’s property. Yue subsequently appealed to a higher court, and the court in the second instance also refused her demands.

Today, our website would introduce to our readers the standards and methods utilized in determining when infringement involving conflicts between domain name owners and a well known name occurs, based on the judgments of the first and the second instance courts.

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Why Glasses and Clothing Were Deemed Similar Products Under the Trademark Law, Part II

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 (By Luo Yanjie) Today, we will introduce all of our opinions on yesterday’s case.

Lawyer’s opinions:

The reason why the two courts made different conclusions than the Trademark Office and the Board is that the court does not blindly follow the Similar Products and Services Form. With that in mind, we will share our opinions on the legal issues in this case:

1. The preconditions for trans-class protection of well-known trademarks

Article 13 of the Trademark Law provides:

“Where a trademark for which the application for registration is filed for use on non-identical or dissimilar goods is a reproduction, imitation, or translation of the well-known mark of another person that has been registered in China, misleads the pub1ic, and is likely to create prejudice to the interests of the well-known mark registrant, it must be rejected for registration and prohibited from use.”

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Why Glasses and Clothing Were Deemed Similar Products Under the Trademark Law, Part I

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(By Luo Yanjie) Today and tomorrow’s posts will introduce an administrative lawsuit recently decided by Chinese courts. The greatest focus point in the case is that the courts broke the barrier between trademark classes to hold that glasses and clothing are similar classes of trademark application.

According to China’s Trademark Law, trademark applications in China follow the “first application” principle. This means that for similar products whoever applies for a trademark first owns it and receives protection in that class, except for well-known trademarks, which receive cross-class protection. To determine what classes are identical or similar, the Trademark Office, Trademark Adjudication and Review Board (the “Board”), and other administrative institutions follow the Similar Products and Services Form that they promulgated. In practice, however, courts do not blindly follow this form. Today’s case is a prime example of the different opinions held by and different results reached by administrative organs and courts.

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Is a Copyright’s Creation Time Important for Deciding Copyright Infringement?

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(By Albert Chen) In 2010, Getty Images China (“Getty China”) filed a copyright infringement suit against Sinotrans Chongqing Co. (“Sinotrans Chongqing”). After the first instance, second instance, and review, the Supreme Court confirmed the copyright held by Getty China over the pictures involved in the case. The point that deserves the most attention in the case is the different understandings on whether the creation date of the copyright is an essential requirement for showing infringement.

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Is there Any Local Protection in the Patent & Anti Monopoly Lawsuit between Monsanto and DuPont?

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Visit to St. Louis in the US, Part II

(By You Yunting) At the end of this past March, at the invitation of the US government, the author visited America with other Chinese legal experts with the goal of better understanding its IPR system. The third city in the visit was St. Louis, located in the middle of the United States. On March 26 2013, the day where the most-watched lawsuit in the bio-science industry, the lawsuit between Monsanto and DuPont, entered into a mediation agreement, and coincidently, the second day after that, namely on March 28, the author visited Monsanto’s legal department in St. Louis to better understand the facts involved in the case. The day after that, the author went to the Federal Court in the Eastern District, in St. Louis, Missouri, and exchanged opinions regarding the case with the judge hearing it. Considering the influence coming from that lawsuit would not be less than that produced by the lawsuit between Samsung and Apple in the tech industry, the author would like to introduce to the readers some of the facts presented to us by the judge. Also, we would like to remind our readers that the title of this essay covers only part of the content of this post; that being said, it shall not be taken as suited for a professional study.

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