China Laws and Regulations Update in January 2023

1. Instructions on Improving Legal Protection of Intellectual Property Rights Relating to Traditional Chinese Medicines

Promulgated by Supreme People’s Court

Promulgation date: 22 December 2022

Document number: FF[2022]34

The Instructions consists of three parts and sixteen articles which are specific provisions relating to the role of judicial authorities in legal protection of intellectual property rights in traditional Chinese medicines and improvement of the ability to administer law to give legal protection of traditional Chinese medicine patents, business marks, trade and state secrets, copyrights and related rights, raw materials of traditional Chinese medicines, various products made from traditional Chinese medicines, etc. and more vigorously maintain the fair competition order on the traditional Chinese medicine market, protect legal interests of traditional Chinese medicine innovators and fight infringement of intellectual property rights in traditional Chinese medicines. The Instructions focuses on main areas and key issues relating to traditional Chinese medicines and is a guide for legal professionals to deal with cases arising from intellectual property rights in traditional Chinese medicines. To improve the protection of traditional Chinese medicine patents, the Instructions suggests following the development law of traditional Chinese medicines, understanding characteristics of traditional Chinese medicine innovation and improving rules on legal protection of patents in traditional Chinese medicine areas. (Source: SPC website)


China Laws and Regulations Update in December 2022

1. Instructions on Formulating Fundamental Data Policies to Take Good Advantage of Data Elements

Promulgated by the Central Committee of the Communist Party and the State Council

Promulgation date: 19 December 2022

The Instructions includes 20 policies relating to data property, trade, profit distribution and security governance in order to establish underlying data policies and systems in China, fully activate data elements, energize real economic development, vitalize market entities, help develop new growth perspective and promote sound development. The Instructions explicitly mentions exploration of data property structuring system and establishment of confirmation and authorization systems for classification and grading of public, corporate and individual data. It also puts forward establishment and improvement of personal information confirmation and authorization mechanisms in order to cause data processors to legally collect, possess, use and entrust others to manage data containing personal information within the individual’s authorized scope, regulate activities of processing personal information, prevent excessive collection of personal information by “package licensing”, forced approval, etc. and promote fair use of personal information. (Source: Chinese Government website)


Six Key Points in Amendments to Company Law for Second Deliberation

(By Huangfu Yuxuan) On 30 December 2022 the Company Law (Amendments for Second Deliberation) (“Amendments”) was published on the website of Chinese National Congress. The Amendments is to further modify and regulate shareholders’ responsibility to contribute capital, the company’s organizational structure, shareholders’ right to know, directors’ responsibilities, corporate governance of listed companies, company cancellation, etc. to address the problems of existing company laws that do not fit or match the market development. It is the third major amendment of the Company Law since its promulgation in 1993. Key points in the Amendments are as follows.


China Laws and Regulations Update in November 2022

1. Law on Protection of Women’s Interests

Promulgated by Standing Committee of National People’s Congress

Promulgation date: 30 October 2022

Implementation date: 1 January 2023

Document number: Chinese President Order No.122

The Law on Protection of Women’s Rights and Interests aims to fully implement fundamental state policies, including ones relating to the equality between men and women and continue improving rules on protection of women’s rights and interests. In terms of women’s personal and moral rights for which there is widespread concern in our society, based on bans on women trafficking and abduction, it sets out job duties of the government and departments concerned, villagers’ committee and residents’ committee to ascertain, report, rescue, settle, support and take care of women trafficked or abducted, improves women’s employment and social interests, eliminates and sets out circumstances of job and sex discrimination, includes job and sex discrimination in the scope of employment supervision, sets out employer’s responsibilities for protecting women’s interests and explicitly provides that employment (or appointment) contract or service agreement should include provisions relating to protection of women’s interests. (Source: NPC website)


Legal Protection of Digital Derivatives of Drama (Part II)

(By Lv Xuanxuan)

I. Civil right protection

As stated above, digital derivatives are virtual property because of its form and value. In Section 5 Civil Rights of Chapter I General Provisions of Civil Code include general provisions about digital and internet based virtual property, stating that digital and internet based virtual property should be protected according to relevant legal provisions, if any. Pursuant to Articles 240 and 241 of Civil Code, real property or property owner is legally entitled to possess, use, receive profits from, assign or create a right to use or security interest in the property, but the person with a right to use or security interest in the property cannot exercise their rights by harming the property owner’s rights. In Article 323 of Civil Code which sets out five rights relating to use of property, the person with a right to use other person’s real property or property can legally possess, use or receive profits from the property. In addition, Civil Code also includes security, pledge, lien and occupation related rules. Because of the legality of rights in property, ownership and the right to assign internet based virtual property is based on creditor’s right to ask for payment of debts owed to them, not directly coming from the property related provisions of Civil Code.


Legal Protection of Digital Derivatives of Drama (Part I)

(By Lv Xuanxuan)


Digital collectibles (artworks) that emerged over the past year or so are a hot topic in culture and art. As one example, an artist uploads a digital file of painting, audio, video or creative works in other forms onto a third party platform, creates a file copy on the digital book of a block chain as “NFT” and backs it up with encrypted currency. As another example, a performance organizer sells tickets with characters in a play (art images) on a third party platform.[1] Digital collectibles (artworks) come from “NFT” applications. “NFT” technology is used to record ownership of artworks or collectibles and other assets. “NFT” is the abbreviation of “Non-Fungible Tokens” which according to Collins English Dictionary[2] means a digital certificate registered in a block chain and is usually translated into Chinese as “non-homogenous tokens”.


China Laws and Regulations Update in October 2022

1. Regulations on Several Issues Connected with People Freed on Bail Pending Trial

Promulgated by Supreme People’s Court, Supreme People’s Procuratorate, Ministry of Public Security and Ministry of National Security

Promulgation date: 21 September 2022

Implementation date: 21 September 2022

Document number: GTZ[2022]25

To better regulate people freed on bail pending trial and prevent failure to or negligence in the regulation, the Regulations mainly puts forward the following measures.

First, the scope of activities of people freed on bail is clarified. To meet the practical regulatory requirements, the Regulations further specifies the “specific places”, “specific people” and “specific activities” in Article 71 of the Criminal Procedural Law so that enforcement authorities can understand and put these provisions into practice and people freed on bail can clearly know the scope of their activities.


If Blizzard Changes the Agent of The Legend of Mir II, Can Players’ User Data stored by Netease Be Totally Transferred?

(By You Yunting) Blizzard, a US company recently announced[1] that the license agreement with Netease would expire on 23rd January 2023 and that the parties failed to reach a renewal agreement that conformed to Blizzard’s operational principles and commitments to players and staff members, so it would suspend most of Blizzard’s game services relating to the World of Warcraft, etc. in the Chinese mainland. Let’s discuss this incident and related issues below. Is it possible to renew the agreement? Will the game services be terminated if the agreement renewal failed? If Blizzard changed the Chinese agent, can players’ data be totally transferred?


China Laws and Regulations Update in September 2022

1. Law Against Telecommunication Fraud

Promulgated by the Standing Committee of National People’s Congress

Promulgation date: 2 September 2022

Implementation date: 1 December 2022

Document number: 119 President Order

The Law Against Telecommunication Fraud consists of seven chapters and fifty articles, including general principles, telecommunication, financial and internet governance, comprehensive measures, legal responsibilities, supplementary articles, etc. in order to give powerful legal support for fighting telecommunication fraud by adhering to the people centered philosophy, balancing development and safety, preventing and governing telecommunication fraud in all parts of the chain and working hard with accuracy. The Law further strengthens punishment for telecommunication fraud by including specialized provisions relating to administrative punishment and further clarifying the offender’s civil responsibilities and records on the credit report.


China Laws and Regulations Update in August 2022

1. Decision to Abolish and Change a Number of Penalties

Promulgated by State Council

Promulgation date: 12 August 2022

Document number: SI[2022]15

The content of the Decision is comprised of three main parts.

First, abolition and modification of 53 penalties, including 29 ones abolished, 1 by the Ministry of Public Security, 12 by the Ministry of Transportation and 16 by the State Administration for Market Regulation, and 24 ones modified, 19 by the Ministry of Transportation and 5 by the State Administration for Market Regulation. The Decision sets forth names of, bases for creation of, decisions to deal with and regulatory measures that substitute such penalties.


How to Send Data in Chinese Concept Share Audit Papers Abroad?

(By You Yunting) China and the US recently signed the Audit Supervision Cooperation Agreement, allowing supervisors and inspectors of the Public Company Accounting Oversight Board (PCAOB) to review audit materials of Chinese companies listed in the US in Hong Kong, including complete audit papers containing all information. According to media reports, Alibaba, JD and Yum China are the first businesses to be audited.[1] Audit papers contain large amounts of data and personal information of domestic users (collectively “data”). I would like to discuss whether the audit paper review by the US parties is outbound data transfer and what procedures should be followed to transfer the data abroad according to Chinese laws.


What is Disney’s Greatest Concern After Expiration of Copyright in Mickey Mouse

(By You Yunting) The 94-year-old Mickey Mouse will reach the end of its copyright protection term in the US, Disney’s headquarters. Actually, its copyright protection terms in other countries almost all expired some time ago. Being well acquainted with Mickey Mouse IP, Disney has maximized profits by running its business skillfully and continuing making innovations. However, it has weaknesses as well. This article discusses the most destructive practices by its rivals to the commercial value of Mickey Mouse, potential damage to Mickey Mouse’s commercial value by making it a horror or pornographic movie, and its corresponding solutions.


Why Huawei Trademark Has More Worth than MI Trademark in Trademark Infringement Cases?

(By You Yunting andGao Tianyi) In a recently decided trademark infringement case brought by Huawei Technology Ltd. (“Huawei”) against Shenzhen Shangpai Technology Ltd. (“Shangpai”), the court awarded Huawei all punitive damages based on its claims and ordered Shangpai to pay Huawei RMB 5 million. In this case the court found 80% contribution rate of the trademark “Huawei”, which was much higher than the 30% contribution rate of the trademark “mi” in a precedent similar case. So let’s discuss whether the contribution rate of Huawei trademark decided by the court was rational and how punitive damages in the trademark infringement case were calculated.


China Laws and Regulations Update in June 2022

1. Opinions on Improvement of Block Chain Applications in the Judicial Fields

Promulgated by Supreme People’s Court

Promulgation date: 25 May 2022

Document number: LI[2022]16

Opinions consists of seven parts and 32 articles, clarifying overall requirements for blockchain application in the judicial field and requirements for the establishment of the blockchain platforms of the poeple’s courts, charting courses for four typical application scenarios where blockchain technology facilitates the enhancement of judicial credibility and etc., and specifying measures to guarantee the blockchain application. The Opinions mainly hasthe following features. First, it proposes establishing a judicial blockchain alliance featuring interconnectivity and mutual sharing. Second, it clarifies requirements for the establishment of the blockchain platforms of the people’s courts. Third, it proposes the application of data tamper-proof blockchain technology to enhance judicial credibility. Fourth, it proposes using blockchain to improve business procedures and judicial efficiency. Fifth, it proposes interconnecting blockchains to enhance judicial coordination. Sixth, it proposes using mutual trust of the blockchain alliance for economic and social governance.