How Can the Double Wages Payment Provision be Misused In China?

(By You Yunting) In order to protect the legitimate rights and interests of laborers and to avoid enterprises failing to conclude a labor contract with laborers, China’s Labor Contract Law stipulates that, where an employing unit fails to conclude a written labor contract with a laborer that has provided labor services for more than one month but less than one year, it shall pay double wages payment to the laborer each month.

In practice, however, many enterprises found this stipulation being misused. To achieve double wages payment, some laborers intentionally failed to conclude the written labor contract with their employing units and then brought the employing units to labor arbitrations claiming for double wages payment. In our post, we would like to introduce a typical case where a laborer in charge of human resources who deliberately did not conclude a labor contract with its enterprise is supported by the courts to receive double wages payment after their departure. Foreign investors who do business in China should be aware of this potential labor risk.


Who Has the Burden of Proving “Profit After Tax” When Calculating Remuneration for a Patented Invention?

(By Albert Chen) In the previous post, the author introduced how to determine the unit granted the patent right by looking at a case decided by a Shanghai court. Today, the author will use a case from a Guangdong court to introduce how the court there held on who must prove “the profit after tax” when a dispute breaks out on invention remuneration payable by the unit granted the patent right.

Summary of the case:

The employee inventor, Mr. Zhu, worked for Dongguan Wei Ba Cleaning Equipment Co., Ltd (the “Wei Ba Company”) from 1998 to 2006. During his employment, Mr. Zhu participated in the development of sixteen patents and was also registered as a joint inventor in the company’s patent applications. Afterwards, the Wei Ba Company exercised some of the patents but did not pay Mr. Zhu any remuneration. For this reason, Mr. Zhu filed a lawsuit against the Wei Ba Company, claiming that remuneration payable for his invention should be calculated based on the 2004 Annual Joint Inspection Report that the Wei Ba Company submitted to the Ministry of Commerce, which indicated the company’s total profit after tax. Moreover, Mr. Zhu claimed that the remuneration shall be calculated for the past two years.


Shall Parent Company Make the Payment for Subsidiary Employees’ Invention for Hire?

(By Albert Chen) In past essays, the author has introduced the legal issues related to the establishment of remuneration for inventions developed under work for hire schemes, and payment of said remuneration. Through a study of two recent cases, the author has found that the comments made by the judge in them is of reference value when deciding the “unit granted the patent right” and the “one liable to prove after tax profits”. In the meantime, the author would like to share his interpretation and analysis in these two posts.


The iPad Battle Comes into Price Negotiation Phase, Apple Offered Proview $16 Million But Refused (Updated)

by You Yunting

According to the report of China media(note: the link is in Chinese), the iPad battle in mainland China has seen a lifting turn. The parties, Proview and Apple, have come into the phase of reconciliation and price negotiation from the previous heat argument on the court, and the main difference between the parties is the gap on the compensation. But no matter the result is, the decision of Guangdong Higher People’s Court will be delayed for both parties’ willing to the reconciliation. By the report of Jinghua News (note: the link is in Chinese), Apple’s offer of 100 million yuan (1.6 million US dollar) to purchase the iPad trademark has been refused by Proview.


360 vs Tencent: The Summary of Anti-Monopoly Court Hearing

On 18th April, 2012, Guangdong Higher People’s Court heard the case of monopolized status dispute filed by Qihoo 360 (NYSE: QIHU) against Tencent (HKEX: 700), with the claim of 150 million yuan. For the background information of the case, please refer to Wiki and a letter from Zhou Hongyi, the CEO of Qihoo 360 to his employees.

The information disclosed from the indictment of Qihoo 360:

I. The request of Qihoo 360

Demanding Tencent to cease the infringement of abusing its market monopoly status, including but not limited to cease the limitation on the transaction between QQ user and Qihoo 360, selling the safeguard software in QQ; demanding the joint compensation by the defendants to the losses of RMB 150 million yuan and the apology to Qihoo 360, also the expenses of reasonable costs and lawsuit fee paid by Qihoo 360 shall also be borne by Tencent.