Category Archives: Non-litigation

Analysis on the Legal Liability of Kaspersky for Customer Fraud

In recent, it has aroused public concern that the well-known security software firm, Kaspersky, was reported by CCTV, the Chinese state television, that its sales agents are likely to be fraudulent to the customers.

“Weekly Quality Report”, a program on CCTV, reports that some agents of Kaspersky trick customers to buy security software of Kaspersky by using ads which kept displaying a false virus warning. When the computer users are normally surfing the Internet, a pop-up ad appears to warn them that many serious threats such as viruses and Trojan horses are found in this computer and the computer system will be seriously damaged if the loopholes fail to be repaired in time. Because of worry about such viruses, many computer users spend RMB 20 buying the security software. In fact, such warning is just a trick to induce computer users to buy the security software. Ironically, when the customers visit the same web again after purchasing the recommended security software the virus warning still appears.

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Legal Problems on the Payment in RMB in Apple App Store

Highlight: Apple’s acceptation of payment in RMB in its App Store may be deemed as the intention to operate in China, which by local laws shall be administrative licensed of the value-added telecommunication service first and the entity shall be at least 50% owned by local companies. Furthermore, the applications sold in App Store are also demanded for administrative license and registration of Chinese government.

On the afternoon of 17th November, I was interviewed by Mr. Zeng Hang, the journalist from the 21st Century Business Herald, an influential Chinese financial newspaper, on the Apple’s plan to accept the payment in local currency for the purchase of applications of iPhone and iPad. Mr. You replied that it’s infeasible basing on the existing regulations, for any app purchases by Chinese clients is kind of shopping in U.S.A and shall be settled in dollar. And carrying out of the payment in RMB means App Store begins its operation in China which involves many administrative licenses.

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The Introduction on the Chinese Laws and Regulations concerning the Withholding Tax

Highlight: to introduce you the regulations concerning the withholding tax in China, including the scope and the calculation base of the tax.

Recently a reader consult our website for the relevant legal problems regarding the withholding tax in China. The withholding tax is a usually encountered question in foreign exchange payment for those foreign companies having cooperation with Chinese enterprises in intellectual property right. Ms. Chen Danhong, the attorney of our website replied the question as follows:

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Analysis on the Different Infringement Liabilities of Taobao Market and Tmall


Recently, the attorneys of Bridge IPR Commentary were interviewed by “China Intellectual Property “, an IPR magazine in China, and the details are as follows:

1. Taobao Market and Tmall are both the separate channels of Taobao, and Tmall was established after Market and now have its own domain name. Then is there any difference between Taobao Market and Tmall?

Unlike the stores in the Market applied by individual merchants with a relatively low threshold, the qualification for Tmall is much stricter for only licensed corporations could run the business in it, furthermore, the service of changing or refunding, after service and invoice are also demanded. Currently, the famous brands operating in Tmall include Lenovo, Haier, Nike and other well-known brands, which are similar to brand stores guaranteeing in service quality.

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The Latest Development and Analysis on the Social Security Program Covering Foreign Workers in China

Highlight: The new Measures concerning foreigners’ participation in the local social insurance in China has come into effect recently. In this essay, we would like to introduce you the detailed regulations of the new document.

As provided in the Article 97 of the Social Insurance Law, P.R.C, which has come into effect from 2011.7.1, all foreign workers with a valid work permit could be covered by the social security program. However, according to the reply from the hotline of the Shanghai Municipal Human Resources and Social Security Bureau, the participation in the program is on worker’s own choice as agreed in their labor contracts instead of being mandatory.

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Introduction on the Regulations concerning the Capital Contribution in IPR or Domain Name in China

Highlight: The contribution of capital in IPR or domain name is permitted by China Company Law, though there regulates the proportion limitation on it. Bridge IP Commentary will introduce you the regulations of the investment in IPR.

Recently, a Company registered in Shanghai made its contribution of the 70% of the total registered capital of the company with domain name, which has been evaluated to be RMB 10 million yuan, and it has been the first company which made its capital contribution in domain name.

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Will International Software Company Benefit from China’s New VAT Policy?

— the interpretation on the preferential policy of value-added tax

Recently, the Notice on the Policy of Value-added Tax of Software Product (the “Policy”) was jointly issued by the Ministry of Finance and the State Administration of Taxation of P.R.C., which shall back cover any VAT after 2011.1.1. The stock market reacts positively to the new policy.

However, as far as Bridge IP Commentary knows，the Policy is just the continuation of the past regulations, which include the Policies for the Development of the Software & Integrated Circuit Industries issued in 2000 (the “Policy in 2000”) and the Notice of Policies for Further Development of the Software and Integrated Circuit Industries released in first half of 2011 (the “Notice”). Even so, the introduction of the Policy once again shows the ambition of China government to boost the software industry. And the following is the interpretation on the Policy from Bridge IP Commentary:

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Could Tmall Beat Back the Attack with the Aid of Police?

                   —Analysis on the Possible Legal Countermeasures against Attack on Tmall

Highlights: Tmall is facing the attack from its small merchants for the dissatisfaction on the ons side increase on the annual fee. We would like to analyze the possible legal measure Tmall may take to combat such attack.

Recently, many merchants of Tmall, a subsidiary of the biggest China e-commerce company Alibaba Group, attacked the big merchants on that platform for the upsetting on the higher annual fee with a flood of fake orders and regulatory products return leading to the cripple of the brand sites.

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What’s behind Gucci’s elegance?

                       —Gucci faces the allegations of sweatshop

Highlights: Gucci is claimed to maltreat its employees in China, which even leads to miscarriage of pregnant workers, thus not only impedes Italian luxury brand the expansion in China, but also brings the arbitration and demands for huge compensation.

Gucci, the luxury giant, recently becomes the subject of criticism for it being claimed by former employees of Shenzhen flag-store to be a sweatshop, and the maltreating includes overtime work without fair compensation, unethical treatment for pregnant workers, double compensation for stolen goods, etc. (News related)

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China Begins to Try Out Intellectual Property Pledge System

Highlight：China’s new policy on intellectual property pledge，which will help startup firms in technology or creative industries but increase the risks for the banks.

For more innovation and settlement on fund shortages with startups in the technology and creation industry, the Guidance on Financial Support on Revitalization and Development of Culture Industry was issued on 19th March, 2010, by which the collaboration is established between the government of China and more loans to support with company culture is also demanded.

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More than 1 Trillion of Software Revenues in First 8 Months 2011

The China Ministry of Industry and Information Technology (“MIIT”) released the economic statistics on software industry of first 8 months in 2011 on 26th September, 2011, which shows that the revenues of China software industry has totaled 1.112 trillion Yuan（1 USD equivalent of 6.5 RMB）by the end of August, with a year-on-year growth of 30.5%.

From January to August, the revenues of information consulting service and data processing & operation service has respectively achieved 103.2 and 150.1 billion Yuan, basing on a year-on-year raise of 38.5% and 35.7%. Furthermore, such revenues were up to 23% of the software industry revenues, 3 percentage points higher than that of the same period in 2010.

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Can Pandora Legally Operate in China?

Highlights: To introduce the legal restrictions on foreign companies to invest in service of operating online music in China and the practical ways that multinationals provide local online music services in China. 

As recent news says, the streaming subscription music website Pandora (NYSE:P) will enter into P.R. China, and is head-hunting a capable CEO. However, Pandora’s online music service by China laws shall be categorized as telecom value-added service as well as internet culture service. Though the foreign investment in telecom value-added service is legally permitted, the internet culture service remains banned.

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The Untimely Chinese Labor Contract Law

     ——Layoff Difficulty of Nokia, Groupon and Ku6, the influence of untimely and inappropriate regulations in Labor Contract law

Highlights: The untimely and inappropriate regulations on layoffs in Labor Contract Law fails to meet the current development demands of the company, the legal obstacle deteriorates competitiveness of the company and limits company’s desires on employment.

Recently, four Chinese companies met difficulties due to cuts were brought to our attention.  Gaopeng.com, a Chinese deal-of-the-day website jointly invested by Groupon.com and Tencent (SEHK 700), started mass layoff, which raised a concerns and protestations from its employees; someone even chose the suit for the dissatisfaction on the compensation. Shortly after that, Nokia (NASDAQ: NOK) and Nokia Siemens Networks were also doubted due to  its illegal layoff procedure. And what’s more, the earlier layoff of KU6 (NASDAQ:KUTV) led to physical aggression and outbursts.

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