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There has been a great deal of media coverage in China in the past weeks regarding the impact of Microsoft’s making available its Windows Genuine Advantage (hereafter, “WGA”) to users with Chinese language versions of Windows operating systems. For users going to Microsoft for many of its software updates (excluding some security updates), a validation is required where WGA would notify the user if unlicensed Microsoft Windows software was found on the user’s computer. Microsoft contends that WGA has been made available to warn users of the presence of unlicensed software and to give them the opportunity to purchase licensed software which would then allow them to have the benefits associated with said software, such as product support and ongoing software updates.

Shi Yusheng, Partner, IP Litigation

Mr. Shi Yusheng has also discussed this issue recently on CCTV – 9’s Dialogue

Continue Reading Microsoft’s Windows Genuine Advantage Initiative and the Protection of Intellectual Property Rights in China

Under the United Nation’s Framework Convention on Climate Change (UNFCCC), “developed country Parties should provide new and additional financial resources to support the transfer of technology and take all practical steps to promote, facilitate and finance the transfer of, or access to, environmentally sound technologies and know how to developing country Parties.” However, a UNFCCC report revealed that a large portion of developing nations do not take advantage of CDM projects to import technology.
 

As long as technology transfer from developed countries is a convenient low-cost means for China to reduce GHG emissions, why doesn’t China have more CDM projects that involve technology transfer? [continue reading to see our analysis]
 

Wang Rui, Partner, International Trade

Continue Reading Clean Development Mechanism: Untapped Potential

The Hong Kong Government has decided to introduce a cross-sector competition law during the 2008-09 legislative session. The Government has published a draft framework for the competition law and is currently seeking public comments on this draft.

The introduction of a competition law is a significant step for an economy to take. Not all competition laws are the same and the most important thing is that the law is designed well to suit the Hong Kong economy.
Continue Reading Hong Kong’s Proposed Competition Ordinance: Unsettled Issues of Design

By Liu Yanling, Partner and head of King & Wood’s Bankruptcy, Restructuring & Insolvency Practice

Stellar Megaunion Corporation (“SMC”) was in serious debt, as it could barely repay its liabilities. New World China Land (“NWCL”), which was seeking an opportunity to go public, proposed to acquire SMC as a shell company which has no assets, but is publicly listed. To achieve this goal, NWCL conducted several rounds of negotiations with SMC’s creditors to settle SMC’s debts and clear the roadblocks for the acquisition. However, the parties were unable to make much progress in the negotiations due to the large number of SMC’s creditors involved. As SMC needed to solve its debt crisis as soon as possible and its negotiations with NWCL were deadlocked, the company decided to reorganize to completely release itself from the heavy debt burdens in a short period time.
Continue Reading Debt Restructuring — Second Life for a Distressed Company

At first glance, the goals of intellectual property law and competition law might appear to conflict. IPR owners are granted statutory rights to control access and charge monopoly rents to others for use of their rights. IPR owners may also use terms of IPR licences to regulate downstream activities of their distributors, such as imposing exclusivity, territorial restraints and price restraints. Competition law, on the other hand, is directed at curtailing such market power which may prove harmful to economic welfare.
Continue Reading Intersect Between Intellectual Property Law And Competition Law

Huang Caihua, Associate, Foreign Direct Investment

Recently, the Chinese government issued a couple of new laws and regulations to curb overseas “hot” money and strengthen the administration of foreign exchange. On August 5, 2008, the State Council amended and promulgated the Regulations on Foreign Exchange Administration of the People’s Republic of China which requires that foreign exchange and the fund for settlement in a capital account should be used as approved by relevant approval authorities. On August 29, 2008, the Circular of Relevant Implementation Questions Concerning the Improvement of Administration of Payment and Settlement of Foreign Exchange Capital of Foreign Invested Enterprises (the “Circular”) was then issued by the State Administration of Foreign Exchange (“SAFE”), according to which the RMB settled from the capital account of a foreign invested enterprise (“FIE”) should be used in accordance with the business scope approved by the governmental agencies and may not be used to make equity investments in China. This means foreign investors cannot directly make use of the foreign exchange in their capital account to invest in China, which is expected to have a major impact on domestic re-investment by FIEs.
Continue Reading Foreign Exchange Capital: Restrictions on Domestic Investment

Duan Haiyan, associate, Labor & Employment

The Implementation Regulations of the PRC Employment Contract Law, which has been anticipated for over a year, became effective on September 18, 2008. Overall, the Regulations are consistent with the spirit of the Employment Contract Law and resolves certain problems in its implementation. However, the Regulations have a relatively limited impact and failed to meet many expectations.
Continue Reading Employment Contract Law Implementation Regulations: Initial Thoughts

Ting Xu, Associate, Trademark Department

On May 26, 2008, the China Trademark Review and Adjudication Board (“TRAB”) of the State Administration for Industry and Commerce (SAIC) made a decision in favor of Changyu Winery Group, upholding its exclusive use of the mark “cabernet” in Chinese （“解百纳”） as a registered trademark. The decision further found that Changyu established “解百纳”  as one of its trademarks through its use and did not consider “解百纳” the generic name for these cabernet grape varieties.  This means other wineries such as China Great Wall Winery, Dynasty Fine Wines Group Limited and Yantai Weilong Grape Wine Co. are prohibited from using the mark “解百纳”, which may certainly cause damage to these wine makers in marketing their products.
Continue Reading Wine Confusion: Trademark Dispute over Cabernet

The current concerns about the spiking of dairy products in China with melamine have expanded into concerns about the state of Chinese food safety generally.

The problem does not appear to be a lack of regulations as there are a myriad of  relevant laws, regulations and rules (including PRC Food Hygiene Law, PRC Product Quality Law, PRC Agricultural Product Quality Safety Law, PRC Consumer Rights Protection Law, Special State Council Rules on Strengthening Supervision and Management of Food Safety, National Plan for Major Food Safety Emergencies to name a few).

Mark Schaub, Partner, FDI

Continue Reading Milk Mayhem – China Food Safety System in Flux

Finally, it seems that the first light of dawn in a quieter world has been shown to people who have been continuously bombarded by anonymous messages or phone calls via mobile and other communication channels for private tutoring, apartment sales, and insurance.

On the 25th of August 2008, the 4th Conference of the Standing Committee of the 11th National People’s Congress (NPC) deliberated on The 7th Amendment to the PRC Criminal Law (draft). The Draft is the first time a proposal for providing protection of personal information by imposing criminal charges for violations on such information was put forward. This has raised broad public attention at all levels.

Li Yongmei, associate, Domestic Dispute Resolution

Continue Reading Privacy: New Developments in the Protection of Personal Information