Category Archives: Anti-trust

Are Pig Breeding Businesses under Non-poaching Pact Really Reckless to Face the Risk of Ten Billion Penalties for Monopolies?

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(By You Yunting) According to a media report[1], Muyuan Group, a big pig breeding business announced a non-poaching pact among Muyuan, Wens, Twins, Chai Tai and other big businesses, advocating no poaching, less competition and sound development in the industry, stating any violation will result in retaliation. I couldn’t help feeling surprised for the pact probably violating the Anti-monopoly Law and resulting in a penalty of hundreds of million to tens of billion RMB.

Non-poaching pact

In order to reduce internal competitions and develop in sound environments, we advocate:

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By Adding Safe Harbor in Anti-Monopoly Law, Do Small and Medium Sized Businesses Regain the Right to Set Resale Prices?

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(By You Yunting) Can brand holders cap wholesale and retail prices of their products? Many people believe brand holders have the discretion to set prices. However, the Anti-Monopoly Law 2007 imposes such strict restrictions that almost ban this practice, causing controversies. The safe harbor clauses added to the new Anti-Monopoly Law adopted by the Standing Committee of the National Congress conditionally allows small and medium sized businesses with small market shares to cap resale prices. Now let’s look at where the safe harbor comes from.

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How does China’s Court Determine the Validity of Arbitration Clauses in Monopoly Dispute?

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.

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Does the Merchandizing Rights Fall into the Protection for Priority Right in China Trademark Cases?

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(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.

Case Introduction

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.

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Judgment Abstract on NDRC’s Administrative Decision of Qualcomm Incorporated (Part 2)

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 (By You Yunting)  As we have already posted Judgment Abstract on NDRC’s Administrative Decision of Qualcomm Incorporated (Part 1) on April 17 2015, today we would like to introduce more.

III What’re the legitimate basis and the final decision?

Pursuant to Article 47 and Article 49 of the Anti-Monopoly Law, the NDRC made the following decisiosn against Qualcomm’s abuse of dominant market position in the SEPs markets and the baseband chip markets:

  1. Order Qualcomm a halt to illegal activities upon abuse of dominant market position as follows:

a   Qualcomm shall provide patent lists to its licensees in China and not charge licensees for expired patents.

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Judgment Abstract on NDRC’s Administrative Decision of Qualcomm Incorporated (Part 1)

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(By You Yunting) As from October 2013, the National Development and Reform Commission (the “NDRC”) starts the anti-monopoly probe into the world’s biggest cellphone chip maker, Qualcomm (NASDAQ: QCOM) , and makes in-depth investigations and discussion with tens of cellphone manufacturers and baseband chip manufacturers at home and abroad. Recently, the NDRC determined that Qualcomm holds a dominant position in the markets of standard essential patents (“SEPs”) licensing in relation to CDMA, WCDMA and LTE wireless communication and the baseband chip market, and that Qualcomm be fined 6.088 billion yuan in the violation of the Anti-Monopoly Law. Today we will introduce the punishment decision and make comments.

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Does Proposed Anti-Monopoly Investigation against the Merger of Didi and Kuaidi Affect Innovation?

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(By You Yunting) China’s two largest Taxi apps Didi Dache (“Didi”) and Kuaidi Dache (“Kuaidi”) confirmed merger on the Western Valentine’s Day, triggering the whole industry, which also lead to the suspicion of a monopoly. Afterwards, the Taxi apps Didi and Kuaidi responded this with much larger travel markets, and told that their merger does not lead to a monopoly, because mobile taxis only count a small proportion with lots of participators. As for whether their merger is accused of monopoly, there are hot discussions among legal professions. At present, third parties were tending to make anti-monopoly investigation from the Ministry of Commerce, and I am no exception. But after full consideration, I fell into confusion.

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Is It Illegal for WeChat to Block Sharing Link of Alipay?

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WeChat vs Alipay_副本

(By You Yunting) Recently, China Internet giant enterprises generated an intense competition during their hand-to-hand combat, but this time the main character is the Tencent which successively block sharing link with Alipay, Xiami Music App and NetEase Cloud Music App on its WeChat platform. It means that WeChat users could not use the mobile applications to link the contents of Alipay Red Envelope Gifting, Xiami App and NetEase Cloud Music App on its WeChat platform.

Afterwards, Tencent implied externally that the act of sharing link with Alipay Red Envelope Gifting is a malicious marketing and promotion on its WeChat platform, even a shattering experience, and its blocking should have something done with the uninstallation of WeChat Payment on Alipay platform (Chinese Link: http://tech.techweb.com.cn/thread-642700-1-1.html) For cutting off link with Xiami App and NetEase Cloud Music App, Tencent implied to have relationship with its content piracy (Chinese Link: http://tech.sina.com.cn/i/2015-02-05/doc-ichmifpx7018268.shtml).

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Judgment Abstract on NDRC’s Administrative Decision of Zhejiang Insurance Association in China

(By You Yunting) By reports, recently, National Development and Reform Commission (the “NDRC”) investigated the industry group the Zhejiang Insurance Association and its membership insurers, originated from that the Zhejiang Insurance Association in violation of the Anti-Monopoly Law organized its 23 membership insurers to agree on unified commissions from auto insurance premiums through meetings. The NDRC fined 22 of the insurers a total of RMB 110 million. Today, we will introduce the NDRC’s Punishment Decision on Zhejiang Insurance Association and make some comments.

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Judgment Abstract on NDRC’s Administrative Anti-Monopoly Decision of PICC Zhejiang Branch’s Impunity in China

NDRC

(By You Yunting) By reports, recently, National Development and Reform Commission (the “NDRC”) investigated the industry group the Zhejiang Insurance Association and its membership insurers, originated from that the Zhejiang Insurance Association in violation of the Anti-Monopoly Law organized its 23 membership insurers to agree on unified commissions from auto insurance premiums through meetings. The NDRC fined 22 of the insurers a total of RMB 110 million, with PICC Property and Casualty Company Limited Zhejiang Branch, an insurer, escaping punishment because of informing the authorities and providing key evidence. In today’s post, we will introduce the decision on PICC Property and Casualty Company Limited Zhejiang Branch escaping punishment and make comments.

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Is CCTV Refusing to Sub-license World Cup Broadcasting Rights Found Violation of the Anti-Monopoly Law?

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(By You Yunting)The 2014 FIFA World Cup is taking place at several venues across Brazil, and is attracting attentions from all over the world. According to reports, CCTV holds the exclusive rights of broadcasting 2014 FIFA World Cup in mainland China. However, CCTV refuses to sell the right of live network broadcasting but only sells the on-demand right of network broadcasting to video sharing websites. In reality, CCTV refusing to sell the right of live network broadcasting could potentially be considered to be a violation of the Anti-Monopoly Law. The following is our legal analysis.

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The Anti-Monopoly Judgment’s Digest of Huawei vs. InterDigital of China Courts

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huawei

(By You Yunting) The anti-monopoly litigation of Huawei v. InterDigital caused the attention of intellectual property bound in China. Huawei had filed litigations in China accusing InterDigital of discrimination in patent licensing. Recently, Guangdong Higher People’s Court published its rulings in Huawei v. InterDigital. In today’s post, we will present the judgment of this case and address our comments in the following.

Introduction to the Case:

Appellant (Plaintiff in the first instance): Huawei Technologies Co., Ltd (the “Huawei”)

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How to Determine the Competent Jurisdiction for Online Infringement?

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(By Luo Yanjie) Abstract: The Supreme People’s Court’s decision concerning jurisdiction in terms of determining the domicile of a transit server seems rather amiss against the principle of the doctrine of the plaintiff accommodating the defendant. The place where a plaintiff discovers infringing content should be the final choice of jurisdiction in cases involving network and online infringement. Unfortunately, laws and judicial interpretations in our country do not currently make a distinction between the right of goodwill and a legal person’s right of reputation.

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The Chinese Automotive Industry is a Hotbed for Systematic Vertical Monopoly

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Abstract: Current regulations, created by ministries and commissions such as the National Development and Reform Commission (“NDRC”), formulate that automobile distribution should follow the hierarchy from sole distributor to brand distributors. This is to prevent in-fighting within the individual brand, however, the results is a legal hotbed for monopoly practices to eliminate or restrict competition.

(By You Yunting) According to Media’s reports, China Automobile Dealers Association (the “CADA”) recently confirmed that the CADA is actively cooperating with the NDRC’s anti-monopoly investigation. But a senior executive of CADA explained that the investigation is aimed at whether automobile manufacturing enterprises fixed the minimum sale prices to distributors, not about the issue of high profit of imported automobiles into China. Setting a high price for import automobiles is a business decision, and does not constitute as a monopoly conduct.

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NDRC should Further Improve the Transparency of Administrative Law Enforcement on Price Monopoly.

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Abstract: Five Shanghai gold retailers fined for price manipulation because although they were supposed to be competing with each other, the retailers conspired to fix the price, which constitutes as a horizontal monopoly, a clear violation of the Anti-Monopoly Law. The reason behind the five gold retailers’ fines is that their practices of horizontal monopoly caused more severe harm to consumer’s legal interest and social orders than that of previous vertical monopoly on limitation of resale prices made by Mao Tai, Wu Liang Ye, and six milk powder manufacturers. However, what is puzzling about this fine is that the punishments for this horizontal monopoly violation made by the NDRC were inferior to that of vertical monopoly violation.

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