(By You Yunting) China is a heavily administrated and controlled country. If administrative approval is not obtained, business activity such as producing and selling of Alcoholic beverages, medicine, etc., could be ruled to be invalid by the court. According to the Trademark Law of China, once the trademark has not been used for three continuous years, it could be eliminated. There is a significant amount of people who uses their right to their trademark however, many people fail to obtain the proper administrative approval or violates administrative rules. This brings us to the issue of whether or not such a trademark should be removed even though it has been used. For this kind of cases, we find an example in the 10 annual cases of 2011 promulgated by the Supreme People’s Court of China. In that case, the Supreme Court overturned its opinions expressed in the previous year, “Kangwang Trademark Dispute”, in which the court determined that despite a shortage of administrative approval, the using of the trademark is sufficient according to the Trademark Law.
(By Yu Zhiyuan) Recently, the author was interviewed by the media on the issue of the “two boards” of Jiulongshan, a Chinese listed company. The author would like to analyze the basic legal principles concerned in the “board battle” in this particular case.
I. The ummary of the Issue
Shanghai Jiulongshan Travelling Co. Inc. (hereinafter “Jiulongshan”) is a listed company, and recently, its original biggest shareholder (represented by Mr. Li Qin Fu, chief of the company board) transferred approximately 29.9% of the company’s share options to HNA Property (hereinafter “HNA”). As a result of that transaction, HNA became the biggest shareholder and company registration with the Ministry of Industry and Commerce was amended to reflect those changes. However, HNA has not completed its payments in consideration of the stock transfer. On 21st December 2012, HNA called an impromptu shareholders’ meeting as the company’s biggest shareholder. At the meeting, it passed on the suggestion to recall Mr. Li Qin Fu to act as head of the board of the company, and thereafter voted in new board members. Beijing Kang Da Law Firm filed a brief to affirm the legal effectiveness of the decision and the voting. In reply to Kang Da’s brief, Jiulongshan held its own board meeting on 25th December 2012, at which most board members claimed that HNA lacked the ability to hold its own impromptu shareholders’ meeting. In addition, the board made an announcement, supported by the legal opinions of Shanghai-based Yan Yi Ming Law Firm, that any decisions made by the temporary shareholders at their previous meeting on 21st December 2012 were invalid.