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By Sidney Qin and Yang Xiaoli  King & Wood Mallesons’ Compliance Group

Overview: Promoting products or services by advertising and other forms of propaganda (“Advertising Behavior”) has always being crucial for emerging retail brands to build their brand image, increase sales and secure market share. It is not rare for authorities in China to challenge retailers for improper Advertising Behavior, but how many of the retail market players have bothered to watch their steps in the various ways of conducting advertisements and propaganda in China?
Continue Reading Retailers Beware: Be Careful with How You Advertise Your Products in China

By King & Wood Mallesons’ Compliance Group

On December 26, 2012, the Supreme People’s Court and the Supreme People’s Procuratorate jointly released the “Interpretation on Certain Issues Concerning the Application of Law in the Handling of the Criminal Cases of Offering Bribes“(the “Interpretation”). This Interpretation comes into effect as of January 1, 2013. The Interpretation specifies how the relevant provisions of the Criminal Law pertaining to the offering of bribes are to be applied.

The crime of offering bribes refers to the crime of offering money or property in kind to a state functionary with the intent to acquire illegal enrichment or interest. According to relevant provisions in the Criminal Law, state functionaries are persons who perform public service in state bodies, state-owned companies or, enterprises, institutions or people’s organizations. Additionally, persons who are assigned by state bodies, state-owned companies, enterprises or institutions to non-state-owned companies, enterprises or institutions to perform public service, and other persons who perform public service according to the law, shall all be regarded as state functionaries.
Continue Reading Briefing Notes: “Interpretation on Certain Issues Concerning the Application of Law in the Handling of the Criminal Cases of Offering Bribes”

By Susan Ning, Li Rui and Hazel Yin

On January 5th, 2013, the Xi’an Intermediate People’s Court (the “Court”) ruled in favor of a consumer who sued Shanxi Broadcast & TV Network Intermediary (Group) Co., Ltd. (“Network”), the local cable service provider, for tie-in and imposing unreasonable sales conditions by tying basic cable services with digital channel services. The Court found that the Network’s practice of selling basic cable services on the condition that the subscribers also purchase digital channel services violated Article 17(5) of the Anti-Monopoly Law (“AML”) regarding tie-in sales and imposition of unreasonable trade conditions. In reaching this decision, the court reasoned that because the Network is a lawful monopoly in the local market for cable TV, its conditioning of the sale of basic cable service on the customer’s subscription for digital channels infringes upon the customer’s freedom of choice and diminishes consumer welfare.
Continue Reading Chinese Consumer Wins Abuse of Dominance Civil Action against Tie-in Sales in Program Bundling

By Susan Ning, Kate Peng, Pulcheria Chung and Karen Ji

China’s Supreme People’s Court (“SPC”) issued its Provisions on Several Issues concerning the Application of Law in the Trial of Civil Dispute Cases Arising from Monopolistic Conduct (“SPC rules”) on May 3, 2012, effective on June 1, 2012.  Article 7 of the SPC rules differentiates between horizontal and vertical monopolistic agreements with regard to the plaintiff’s burden of proof on the element of anti-competitive effect.  Horizontal monopolistic agreements falling within Article 13 of the AM are presumed to have the effect of eliminating or restricting competition, unless the defendants can demonstrate otherwise.  For vertical monopolistic agreements under Article 14 of the AML, no such presumption will be made. 

By implication, the above differentiation would mean that the plaintiff in a vertical monopolistic claim must prove (1) the monopolistic agreement falls within Article 14 of the AML; (2) the agreement has anti-competitive effects; (3) it suffered damages because of the monopolistic conduct.  Whereas the plaintiff in a horizontal monopolistic claim only needs to prove item (1) and (3) abovementioned, and the defendant has the rebuttal burden to prove that the agreement would not eliminate or restrict competition.
Continue Reading Burden of Proof in Monopolistic Agreement Claims

By King & Wood Mallesons’ Healthcare Group

Some recent news releases show that the PRC Ministry of Health has proposed to revise (the “Proposed Revision”) the current Measures for Inspection of Medical Advertisement (promulgated on 13 March 2007 and effective as of 1 May 2007) (the “2007 Measures”).

Among all other changes in the Proposed Revision, one hot-button issue is that, except for general information and name of the medicine, any other specific information (e.g. usage) regarding all medicine, including OTC medicines, is no longer allowed in public-oriented media, and only allowed in professional media. Compared with the 2007 Measures, which allowed OTC medicine advertisement to be used in public media, but subject to inspection by the SFDA. However, the Proposed Revision might ban this practice.
Continue Reading Proposed Change on Medical Advertisement Related Regulation Might Cease All Advertisement for Otc Medicines in Public Media

By Mark Schaub and Chen Bing King & Wood Mallesons’ Foreign Direct Investment (FDI) Group

It would be safe to say that when Hong Kong rejoined China as a Special Administrative Region in 1997 there was little thought, if any, paid to milk powder and its effect on relations with the mainland. However, recent restrictions introduced in Hong Kong on the sale and distribution of milk powder produced by mainland suppliers has become a major, and indeed emotional, issue. As the 12th Chinese People’s Political Consultative Conference National Committee (“CPPCC”) and 12th National People’s Congress (“NPC”) (the highest authority of the PRC) commenced on March 5, 2013, baby milk grabbed the attention of representatives in both forums.
Continue Reading PRC Food Safety Law: Food for Thought

By WACHTELL, LIPTON, ROSEN & KATZ：Adam O. Emmerich Robin Panovka David A. Katz；King & Wood Mallesons：Wang Kaiding  Jing Gang  Wang Lianghua

More than 40% of global M&A in 2012 involved acquirors and targets in different countries, including $170 billion of acquisitions in the U.S. by non-U.S. acquirors. Given the continuing accumulation of U.S. Dollars in emerging economies, many expect the trend to continue as Dollars are re-invested in the U.S. Natural resources will continue to be an important part of this story, including in the U.S., where substantial non-U.S. investment has been an important trend, as well as in resource-rich developed nations such as Canada and Australia, where non-domestic investment has lately been highly controversial.
Continue Reading Cross-Border M&A – Checklist for Successful Acquisitions in the U.S.

By Cecilia Lou  Ding Xianjie and Yao Di King & Wood Mallesons’ IP Legal Group Shang Hai Office

On November 12, 2012, the Consultation Draft of Regulations on Service Inventions (“Draft Regulation”) was released by the State Intellectual Property Office of China for public comments with immediate effect. The Draft Regulation was formulated for the purpose of protecting the legal rights and interests of the inventor-employee and the employer, to stimulate and improve the ability to innovate. For those companies which have Chinese service inventions in China, they should be aware of this Draft Regulation as it places additional pressures on employers.
Continue Reading SIPO Releases Consultation Draft of Regulations on Service Inventions

By Cecilia Lou  Ding Xianjie Yao Di  King and Wood Mallesons’ IP Legal Group

The current PRC Trademark Law (“Law”) was implemented in 1983, and revised in 1993 and 2001, and it has played a significant role in supporting the development of the PRC social economy since its implementation. However, the current Law is complained a lot in practice mainly because the registration procedure is fairly complex and time consuming, bad faith registration is common and difficult to stop and it provides insufficient protection against trademark infringement. Thus, The latest draft of revision of PRC Trademark Law Draft (“the Draft”) has been released and is currently open for any public comments until January 31, 2013. Generally speaking, the Draft addresses to the above mentioned issues.
Continue Reading Five Issues You should be Aware of the Latest Draft of Revision of PRC Trademark Law

By Denis Brock Stuart Valentine KingandWoodMallesons’ Hong Kong Office

The English High court’s decision in McManus & Ors v European Risk Insurance Co[i] indicates that the blanket notification of claims (or of circumstances which might give rise to a claim) is likely to be sufficient to trigger an insurance policy. It also highlights the need for an insured to promptly notify claims or circumstances when they first discover them.
Continue Reading The blanket approach – Green light given to “catch-all” insurance notifications