- The Shanghai Municipal People’s Government Releases the 2014 Revised Version of ‘Negative List’ Applicable in the Shanghai Free Trade Zone
On 1 July 2014, the Shanghai Municipal People’s Government released the 2014 Revised Version of ‘Negative List’ applicable in the Shanghai Free Trade Zone, containing 139 special administrative measurements, while the previous version contained 190 ones, representing a change of 26.8% contents of the Negative List.
The Revised Version of ‘Negative List’ eliminated fourteen (14) material clauses to expand business scopes, fourteen (14) material clauses to lift dual restrictions on both domestic and foreign investments and twenty three (23) clauses to readjust categories. The eliminated clauses, including those restricting foreign investment in mail orders and online sales of ordinary commodities, allowing wholly owned foreign businesses to deal in railroad transport, etc., relate to manufacturing, real estate, infrastructure, commercial trade, shipping, social service sectors, etc.
Website of the Municipal Government of Shanghai:
- The Ministry of Commerce Publishes the Notice on Improving the Read More...… Read the rest
- The Legislative Affairs Office of the State Council Releases the newly revised Copyright Law of the People’s Republic of China (under Review) and Solicits Public Opinions for It
On 6 June 2014, the Legislative Affairs Office of the State Council released the newly revised Copyright Law of the People’s Republic of China (under Review) and solicited public opinions for it. The deadline for opinion solicitation will be 5 July 2014.
What is most significantly revised according to the draft copyright law under review includes provisions on objects, contents, ownership and the validity period of rights within the scope of copyright. Also, it has stipulated more penalties that will be imposed on those who infringe others’ copyrights and has set forth means of enforcement by administrative authorities concerned, who have powers of seizure and confiscation, which was first stipulated by laws.
(Website of the Legislative Affairs Office of the State Council:
- The State Administration for Industry and Commerce of the People’s Republic of China Solicits Public Opinions for Regulations (Used for Opinion Solicitation) on Prohibiting Read More...… Read the rest
- The State of Council Promulgates the Newly Amended Implementing Regulations of the Trademark Law of the People’s Republic of China
On 29 April 2014 the State Council promulgated the newly amended Implementing Regulations of the Trademark Law of the People’s Republic of China. The Regulations took effect on 1 May 2014.
The newly amended Implementing Regulations of the Trademark Law provides supplementary provisions to the new Trademark Law, in connection with renewing the trademark application division system, in which the part of any patent application that does not be refused may be registered before the refused part of the same application is completely reviewed, initiating the trademark agency filing system, clarifying legal responsibilities for illegal acts of trademark agencies, imposing tougher punishment on those who infringe others’ exclusive trademark use rights and adding a chapter entitled ‘international registration of trademarks’.
(Authorized to be published on
- Pilot Intensive Operational Management of foreign exchange funds of headquarters of multinational companies in Shanghai Free Trade Read More...… Read the rest
Is It Illegal for the SARFT to Prohibit Installing Youku and Iqiyi in Internet Cable Box?
–Analysis on the Prohibition of Installing Youku App and Iqiyi App on the Internet Cable Box
(By You Yunting) According to some media reports, the State Administration of Press, Publication, Radio, Film and Television (the ”SARFT”) issued a rule to local administrations requesting to delete Youku App, Iqiyi App, Sohu App and browsers from Wasu Box and Internet cable Set-top boxes (the “boxes”), which enables users to support TV, games, online video, music and photos. At first glance, i was astonished how it could be called boxes if without Youku App, Iqiyi App and browsers. However, Hangzhou Wasu Digital TV Media Group confirmed receiving the rule shortly after the reports came out. That being the condition, we would like to analyze the rule.
The rule relies on the Demands for Management Concerning Operation of Institutions with Internet Television Licenses (the “Demands”), stipulating that “institutions integrated Internet and television shall be designed to Read More...
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- National Development and Reform Commission of PRC Promulgates Foreign Investment Project Approval and Record Management Rules
The National Development and Reform Commission of the People’s Republic of China promulgated the Foreign Investment Project Approval and Record Management Rules on April 8th 2014. The Rules have effect from May 1st, 2014.
The Rules were made to do away with provisions that mark distinctions between overseas investment in resources and investments in other areas, except for those in connection with sensitive countries, territories or sectors. According to the Rules, the National Development and Reform Commission is entitled to assess and approve the overseas investment projects where Chinese investors contribute no less than USD 1 billion, while those with contributions of less than USD 1 billion by Chinese investors shall be put on record, no matter whether the projects relate to resource development or not. Before the Rules became effective, the minimum amount of Chinese investors’ contribution to overseas investment projects for resource development that the National Development and Reform Commission had the right to assess and approve were USD 300 million and that to other overseas investment projects were USD 100 million.
In September of last year, the Shanghai Municipality Government published the Incorporation Record Management Rules for Foreign Invested Enterprises in Read More...
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- Shanghai Customs Reform the Supervision and Administrative System of the Shanghai Free Trade Zone in Eleven (11) Respects
In response to AQSIQ’s (General Administration of Quality Supervision, Inspection and Quarantine of the People’s Republic of China) issuance of the Notice on Supporting Animals and Plants Inspection and Quarantine Reforms in the China (Shanghai) Pilot Free Trade Zone on March 4th, Shanghai Customs has launched a series of administrative system reforms in eleven (11) respects, introducing a negative list, entitlements to ‘post customs declaration’, ‘free freight transport,’ ‘unified customs declaration’ , a list of goods applied to simplified import filing procedures, etc. to the China (Shanghai) Pilot Free Trade Zone.
Subject to international conventions and current laws of the People’s Republic of China, the negative list was published by Shanghai Customs setting forth four (4) kinds of commodities that are prohibited from being imported or exported and fifty seven (57) kinds of commodities restricted under import and export supervision and controls to make sure commodities excluded from the list are circulated in a highly efficient and convenient way.
Since the Shanghai Free Trade Zone was launched at the end of January 2014, a total of 139 business transactions with an aggregate value of 204 million USD have been completed by companies in the zone. It Read More...
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(By You Yunting) Malicious litigation refers to instituting a lawsuit through fictional facts and falsified evidences for the purpose of receiving unlawful benefits. In today’s post, we will introduce some provisions about malicious litigation in intellectual property laws and civil procedure law in China.
I. Provisions on wrongful litigation injunction can be applied into malicious litigation.
In litigations concerning patent, trademark and copyright, the right holder always applies for such litigation injunctions as termination of infringement, evidence preservation and property preservation. Where the court approved the application, if the litigation is proved to be malicious, the respondent may require the applicant to compensate for such losses. Article 13 of the Several Provisions of the Supreme People’s Court on the Issues Concerning the Application of Law to Terminating Infringement upon Patent Prior to Litigation stipulates that:
In the event of any losses incurred to the party against which the request is filed due to the applicant’s failure to prosecute or any mistakes in the request, the party against which the request is filed can appeal to the People’s Court having jurisdiction over this matter requiring the applicant to compensate for such losses, or alternatively the People’s Court shall Read More...
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(By You Yunting) In the end of 2013, China issued a revised Corporate Law updating the provisions about the contributed capital, as discussed in our previous post the Amendment to the Corporate Law. Today we will discuss the legal liabilities of promoters and shareholders with regards to the required contributed capital being surreptitiously withdrawn.
Assumption of liability
Pursuant to the updated Corporate Law, any shareholder who fails to make full payment of the capital contributions at the establishment of the company shall be jointly and severally liable for refunding the paid-in capital – in accordance with the amount of registered capital. As such, it is when the company is unable to pay its debts that the shareholders shall assume the liability of surreptitiously withdrawing the contributed capital.
Common forms of surreptitiously withdrawing contributed capital
Based on the introduction of Baidupedia (note: the link is in Chinese), in judicial practice, the main forms that withdrawing contributed capital may take are:
1. Read More...
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(By You Yunting) The U.S-based TiVo Inc. developed and marketed its TiVo, a digital video recorder (DVR), which can provide programs and services like on-demand and watch-back for its users. Similar to TiVo, Chinese cable operators and cable television stations provides similar services for its programs, shows and services. This means that users who miss the program can choose an on-demand program on the television. However, cable television stations are generally purchasing the right of broadcasting for the program, without the right of communication of information via a network. This purchase is at risk of copyright infringement. In a previous post Which Copyright Should an Internet TV Operator Purchase?, we discussed the difference between the right of broadcasting and the right of communication of information via network. Today we will introduce such a typical case in the following.
According to reports (note: the link is in Chinese), Shenzhen Topway Video Communication Co., Ltd Read More...
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(By You Yunting) In our previous post, we introduced that Graphical user interface (the “GUI”) for software has not been protected in China. However, State Intellectual Property Office (the “SIPO”) suggested protecting the GUI in the latest Draft Revision of the Patent Examination Guidelines (the “Draft Revision”) on October 22, 2013. Recently, in the publication of the Decision of SIPO on Amending the Patent Examination Guidelines, It is the GUI that is protected by the Patent Law as of May 1, 2014.
Pursuant to the 2010 version of Patent Examination Guidelines by the SIPO, the GUI for software is excluded from the design patent protection, particular Item 11, Article 7.4 stipulating “visible images of a device after the device keep normal power”. For example, visible images on watch-face of electronic watches, or visible images on telephones screen or software screen, etc., are executed from any circumstances of granting a design patent.
The Draft Revision attempted to change the aforementioned article as following: “display images of a device’s visual indicators that irrelevant to human-computer interaction (the “HCI”) or the achievement of device’s function”, for example, electronic screen wallpapers, or images of a device that irrelevant to the HCI or the achievement of a device’s function in the process for on-off, or, PageMaker or game interface of a website that irrelevant to the web’s function are Read More...
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1. The State Council has begun circulating the “Registered Capital Registration System Reform Plan”
On February 7th, 2014 the State Council issued the Registered Capital Registration System Reform Plan (the “Plan”) with the purpose of promoting the development and efficiency of business registration systems.
The Plan makes it clear that requirements for registered capital of companies applying to be incorporated will be lowered. However, minimum registered capital restrictions could remain applicable to companies in given industries subject to relevant laws, administrative rules and decisions made by the State Council. The new guidelines stipulate that the minimum registered capital restrictions of RMB 30,000 on limited companies, RMB 100,000 on solely- owned limited companies and RMB 5,000,000 on stock-limited companies will generally be lifted. Additionally, restrictions on the proportion of registered capital that is initially subscribed by all shareholders (or initiators) upon incorporation of a company as well as the proportion of registered capital subscribed in cash by all shareholders (or initiators) to the total registered capital of a company will be lifted. The duration of existence for a company with registered capital not fully paid by its shareholders (or initiators) will also no longer be limited.
Furthermore, the Plan (with a list of Read More...
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(By You Yunting) China’s financial system is restricted regulated. Private corporate lending contracts, whereby an enterprise without qualified financial credit lends money to another enterprise is considered to be invalid, and China’s courts would order the lenders return the original amount of money without any interest. Recently, the President of Supreme People’s Court Xi Xiaoming delivered a speech at the National Civil and Commercial Adjudication Work Conference, indicating that the courts have recently begun to expand the validity of corporate lending and are attempting to legalize corporate lending contracts.
1. The Previous policy was that corporate lending without qualified financial credit shall be invalid.
China adopts obligatory provisions to forbid corporate lending as well as borrowing and lending in a disguised form. Pursuant to Article 61 of the General Rules for Loans issued by People’s Bank of China, no financing business involving lending or borrowing, or lending and borrowing in a disguised form, may be handled between enterprises in violation of State provisions. Pursuant to Article Read More...
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- Seven laws, including the Company Law, the Customs Law, etc. Are Amended
On 28 December 2013 the Standing Committee of the National People’s Congress adopted the Decisions on Amending Seven Laws of the People’s Republic of China, including the Marine Environment Protection Law, the Drug Control Law, the Metrology Law, the Fisheries Law, the Customs Law, the Law on Tobacco Monopoly and the Company Law.
The amendments to the Marine Environment Protection Law, the Drug Control Law, the Metrology Law, the Fisheries Law, the Customs Law, and the Law on Tobacco Monopoly entered into force upon promulgation and the amendments to the Company Law will be effective as of 1 March 2014.
According to the Decisions, the amendment to the Company Law focused on provisions relating to the paid-in registered capital, for example, those about the capital actually received, the amount of subscribed capital, etc.
2. Policies on Further Opening-Up of Value-Added Telecommunication Businesses in Shanghai Pilot Free Trade Zone jointly released by the Industry and Information Ministry and the People’s Government of Shanghai
On 6 January 2014 the new Policies on Further Opening-Up of Value-Added Telecommunication Businesses of Shanghai Pilot Free Trade Zone were jointly released by the Industry and Information Ministry and the People’s Read More...
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(By Bai Lituan) On December 28, 2013, the 6th Meeting of the Standing Committee of the Twelfth National People’s Congress approved the Amendment to the Company Law of the People’s Republic of China. The Amendment has three highlights: replaced the paid-in system with the registered capital to-be-paid-in system, decreased requirements for capital registration and simplified registration items and files. No doubt amendment to laws aims at meeting the demand of economic development, then what did this Amendment to the Company Law positively signal?
1. Encouragement of Business Startup by Individuals
Plagued by the overall global economic decline, China is predicted to suffer a slowdown in economic growth in the next a few years with the biggest side effect of unemployment, a serious problem perplexing the current government. The officially implemented to-be-paid-in system introduces the creative method of revolution of the decision-making levels and way of supervision to lower the threshold of enterprise incorporation. The restriction on minimum registered capital and the former compulsory requirements on initial subscription of 20% registered capital with the balance fully paid in within 2 years, submitting capital verification reports, etc. were abolished to make enterprise incorporation more convenient and less expensive, reflecting the governmental intention to Read More...
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(By Yu ZhiYuan) On 28 December 2013, the decision on amending the previous company law was promulgated by the National People’s Congress. The amendment this time will concentrate solely on changing the corporate capital system dramatically in the following three ways. First, the registered capital to-be-paid-in system will be launched. Second, the minimum registered capital will no longer be required. Third, the maximum proportion of intangible assets to the total registered capital will no longer be required. Obviously the amendment was made as a response of legislative authorities to the resolutions approved at the Third Plenary Session of the Eighteenth Central Committee. This article provides an analysis and brief comments on the amendment.
1．The registered capital to-be-paid-in system will replace the paid-in system
The difference between the paid-in registration system and the to-be-paid-in registration system is that under the paid-in system the amount of all shareholders’ paid-in capital shall be specified in corporate files to check how much capital is duly paid and how much is owed, while under the to-be-paid-in system, the amount of each shareholder’s capital to be paid in (payables), instead of the amount of paid-in capital, shall be specified in corporate files and the total amount of all shareholders’ capital to be paid in Read More...
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