Chinese Latest Laws and Regulations of September 2012, I

Posted on by

I. The General Office of the State Council Issued Several Opinions on Promoting Steady Growth of Foreign Trade.

The General Office of the State Council issued the Several Opinions on Promotion of Steady Growth of Foreign Trade of the General of Office of the State Council (the “Several Opinions”) on 18, September, 2012, which provide 16 opinions to promote steady growth of foreign trade in 2012, including doing well with export tax refund and financial service, developing trade facilitation, improving trade environment, optimizing the trade structure and other areas. And the policies of export tax refund and export credit insurance are the hot issues attracting the attentions. The experts said the following detail implementation measures and provisions would be promulgated soon for the implementation of the Several Opinions.

READ MORE

Analysis on Application of Red Flag Rule in China

Posted on by

By Luo Yanjie

Recently, Shanghai No.2 Intermediate People’s Court issued “Investigation Report about Infringement of Right of Information Network Dissemination in the Area” which introduces the application of “red flag” principle in China. Today we would like to share the topic with readers as follows:

I. The basic concept of “red flag” principle

“Red flag” principle is an exception of “safe harbor” principle. It means if the fact of infringement obviously like a “red flag” flying, network service providers cannot pretend not to see, or to shirk responsibility as not knowing. In this premise, even if the right people have issued a notice, the court should also identify the Internet service provider is aware of third party’s infringement and shall bear tort liability.

READ MORE

What Financial Support and Tax Preferential Policies can be enjoyed for Patent Application?

Posted on by

Nowadays, the State and local governments have issued serious financial support and tax preferential policies to encourage innovation of patents.

I. Financial Support Policies

Firstly, from the perspective of the State, the Chinese applicants applying to the State Intellectual Property Office (SIPO) for patents can enjoy the policy of reduction or postponement of the payment of the patent fee. The relevant expenses include the application fee (excluding printing expense and surcharge), substantive examination fee of the invention and 3 years’ annual fees from the year when the patent right is granted. On the other hand, for the Chinese applicants applying for patents overseas, they can obtain the financial support to the extent of certain amount, which includes the official fee of application for foreign patent, retrieval expense paid to patent retrieval organization, service expenses paid to the agency and so forth.

READ MORE

Guiding Case by China Supreme Court: JV’s Minority Shareholders May Undertake All Company’s Debt

Posted on by

By You Yunting

By judicial practices in China, in case the Sino-foreign invested company, which however is operated under the management of Chinese shareholder, is trapped in the insolvency, the foreign investors could be judged to take all the debt of the company, not subject to the total amount of its investment, when Chinese partner chooses to disappear or refuse to clear the debt. And in recent, as per the latest 3rd guiding cases by China Supreme People’s Court, by a decision indicated in it, the non controlling shareholder shall be liable to the joint liability to the non-settled debt of the company, that obviously aggravates the burden of the company shareholder. Then, what is the fair way to avoid such risks? We put forward our answer to it in today’s post.

READ MORE

Encyclopedia vs Apple: Why AppStore Could Not Ship into Safe Harbor?

By You Yunting

As reported by media, Beijing No.2 Intermediate People’s Court made the first instance decision for infringement claims made by Encyclopedia of China Publishing House (Encyclopedia) agains Apple’s AppStore. With the decision, Apple shall compensate Encyclopedia RMB 520, 000 yuan and immediately cease the infringement. In current, no intention to appeal has been expressed by Apple.

Case: Encyclopedia discovered Apple’s user could purchase and download apps of its copyrighted works, which could be read in iPhone and iPad. With the anger of the infringement, Encyclopedia filed a lawsuit against Apple, who counter-stroke that the actuall operator of AppStore is a company registered in Luxembourg, not Apple. And Apple provided no services in the process of software uploading, and therefore Apple shall be with no engagement in the dispute.

READ MORE

Han Han Vs Baidu: Safe Harbor Principle in China

By Albert Chen

Han Han, Baidu, Baidu Wenku, apology, Safe Harbor Principle, information storage space, ISP, Internet Service Provider, prior examination, delete infringing contents, delete classification, quick channel, DNA comparison technology, prevent and stop the infringement, Baidu claim, more rigorous due diligence duty, bona fide and no misfeasance,

By news reports, Beijing Haidian People’s Court judged the copyright infringements filed by Han Han and other Chinese writers against Baidu (NASDAQ: BIDU) Wenku, an online document sharing port, in recent. Among all the 14 lawsuits, 7 are supported the claims of compensation as $ 400 for each work involved, yet refuse the claims of shut-down the port and apology. As to the rest 7 lawsuits, Baidu gain an overwhelming victory.

READ MORE

Risk and Its Prevention for Dormant Investment in China

By Luo Yanjie

Recently, Shanghai Huangpu People’s Court issued white paper about cases involved Non-State-Invested Units. The white paper disclosed that the dormant investment is ubiquitous in Non-State-Invested Units during the process of their establishment, and that not only makes investors’ rights and interests unguaranteed, but also cause a serious threat to the commercial good-faith. As introduced, some actual investor would not like to establish the company in their own names considering various factors, but registered the company in others’ name. It results lots of disputes. Now we would like to discuss the risk of “dormant investment” and introduce how to reduce the risk as follows:

READ MORE

The Validity of Foreign Investor’s Share Holding In the Name of Chinese Dormant Citizens

By Luo Yanjie

As reported, 24quan.com, a Chinese daily-deal website, is undergoing a contentious conflict (note: the link is in Chinese) between its operation team and investors. Berjaya Corporation Bhd (Berjaya), the biggest investor of the website and registered in Malaysia, accused the operation team of withholding  RMB 2 million yuan with no authorization, yet the team responded by saying that the investor was unilaterally deducing the share held by the team from 40% to 3%. Currently, the website and the company is under the control of the team, who has dismissed the staffs appointed by the investor, and in retaliation, the investor announce that their funding cease.

READ MORE

Calculation to the Illegal Operation Income in Trademark Infringement

By Luo Yanjie

The trademark infringement in China, honestly though reluctant to admit, is very serious. That made the administration and the judicial organ pay more attention to the infringement investigation, and on the other hand, foreign invested companies could also be dragged into the conflict concerning the trademark, like Apple encountered enforcement by local administration for iPad trademark. In such circumstance, the calculation to the illegal income amount shall be important to the infringer, which shall influence their legal liability in direct way.

READ MORE

Analysis on Legal Risk of Out-of-Account Kickback by Foreign Invested Companies in China

By Luo Yanjie

As the mid-autumn festival is drawing on, the producers and sellers of moon cakes in cities throughout China (note: the link is in Chinese) are keen in the promotion of the snack. And by the investigation of some reporters, some merchants even try to get a big order for the moon cake by risking the kickback, and by one case, the reporter pretended to order 200 boxes of moon cakes in the name of a company, the kickback offered to him is 6% of each 10 thousand purchase, that means a total feedback of RMB 2, 400 will be paid to the reporter for the 200 boxes purchase. And in addition to the official kickback, another part of rebate from the salesman is also available.

READ MORE

Who Shall Pay for E-commerce’s Wrong Pricing?

By Luo Yanjie

With the rising of E-commerce in the retail industry, the protection on the consumers’ interests thereby emerges has been ever attended to. This article will discuss the problem of “wrong price”. Let’s take a look at the following example:

In August of last year, we saw a panic shopping (note: the link is in Chinese) on the books labeled RMB 50 which shall be RMB 1800 in origin in the book promotion on Dangdang.com (NYSE: Dang), Soon after, however, dangdang.com refused to deliver the books arguing the “wrong price” and thereafter cancelled orders. That triggered the right protection by thousands of consumers, and lawsuits filed in succession. Yet the court rejected part of the claims, and held that the contract has ever been concluded on the order cancellation, and therefore the website shall not be responsible for it. Now we would like to share the opinions with readers as follows:

READ MORE

Legal Risk of Unlicensed User Data Disclosure by Internet Companies

By Albert Chen

It has been a chronic social problem that personal information could be released with no license, and that has brought widely seen information harassment, also a threat to the security of personal asset. The Economic Investigation Squad of Shanghai Police Department published a case in recent, in which the crime of illegally selling personal information has been investigated, and there involved more than 200 million pieces of information and thousands of corporate information. In an era of information, the Internet companies have a wide command of personal data compared with normal companies. Therefore, through today’s post, we would like to express our opinions on the risk and risk prevention of the information leakage.

READ MORE

Could Selling Parallel Imported iPhone 5 be Trademark Infringement in China?

By Luo Yanjie

In recent, Apply unveiled its new device iPhone 5, and that exited Apple fans around the world. Yet, as sad to Apples fans in mainland China, the region is not among the first launching zones.

Due to the arrangement, the retailer from the grey market is eagerly for their new fortune with the new device launch, and some have even made the preorder for the new iPhone by smuggling the Hongkong sold one to mainland China. Then, in addition to the strike back on taxation, could Apple prohibit such selling through the claim of trademark infringement, while considering all the imported ones are the true Apple phones? Here’re our opinions:

READ MORE

Difference Between Crime of Copyright Infringement and Selling Infringing Work Copies

By Luo Yanjie

In recent, a man was judged the crime of copyright infringement (note: the link is in Chinese) by Ningbo Beilun People’s Court for his selling the pirated discs. Yet, to our understanding, the crime of selling infringing work copies provided in Article 218 of Criminal Law shall be more suitable, while as seen in this case, the criminal liability was established on the crime of copyright infringement which is in Article 217 of Criminal Law. The following is our analysis:

I. the difference between the crime of copyright infringement and selling infringing work copies

READ MORE