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By Richard W. Wigley of King & Wood’s Dispute Resolution Group

Data privacy for internet users is a topic of concern the world over, with the P.R.C. being no exception. Internet information service providers (hereinafter also referred to as "IISPs"), such as commercial websites, regularly collect information from online visitors, sometimes with full knowledge of the visitors and sometimes unknown to the visitors. In addition, IISPs have been known to maliciously introduce software incompatible with the user’s existing software, install certain software such as "spyware" onto users’ computers/mobile devices and/or change users’ browser configurations without permission, and it goes without saying that "pop up ads" are an ongoing online annoyance. As online users in the P.R.C. look for protections from such unwanted invasions of their privacy and restrictions upon user control of their online experience, the recently released "Several Provisions on Regulating the Market Order for Internet Information Services" (hereinafter referred to as the "Provisions") provides needed rules and regulations in this regard.[1]   Continue Reading New M.I.I.T. Provisions Provide Additional Online User Control and Data Privacy Protections

By Jiao Hongbin King & Wood’s Intellectual Property Group

In December 2011, the Deputy Director of the State Intellectual Property Office of the P.R.C. expressed that China would in the near future promote amendments to the Patent Law, the Trademark Law and the Copyright Law of the P.R.C. as well as associated regulations, increase the amount of fines, and conduct research on applying punitive damage awards to profit-generating intentional infringement and counterfeiting acts.  This suggests that punitive damage awards may be adopted into China’s intellectual property (IP) protection framework.

Liability for infringement can be compensatory or punitive, depending on the purpose of the compensation to be granted.  According to the current Patent Law, Trademark Law and Copyright Law of the P.R.C., the amount of compensation is determined by the basis of compensation and is calculated in accordance with the actual losses suffered by the rights owner or the benefits obtained by the infringer (and by reference to the reasonable multiples of the royalties in a patent infringement case), and while neither of the two elements could be determined, a People’s Court can award a statutory compensation amount within the scope provided by the law.Continue Reading Intellectual Property Cases in China May Result in Punitive Damage Awards

By Wu Wei and Su Shaohua King & Wood’s Dispute Resolution Group

Under China’s anti-bribery laws, the value of bribes in commercial bribery cases is calculated on a cumulative basis in the conviction and sentencing process. However, such calculations may yield varying results in practice. According to our experience, due to a lack of clarity in the law and various policy rationale for fighting corruption, cumulative calculations give rise to risks of criminal liability, whether seen as accepting or offering bribes.

I. Calculation of Value for Bribes Accepted

A. Legislation

a. The second paragraph of Article 383 of the Criminal Law of the People’s Republic of China(1) ("Criminal Law") provides:" Toward those who have committed repeated crimes of graft, all amounts of graft of unhandled cases are to be added in meting out punishment." Article 386 of Criminal Law provides:" whoever commits the crime of accepting bribes is to be punished on the basis of Article 383 of this law according to the amount of bribes and the circumstances. A heavier punishment shall be given where a bribe was specifically demanded."Continue Reading Calculation of Value in Commercial Bribery Cases

by Feng Ai and Chen Xunan  King & Wood’s Finance Group

In the process of an Initial Public Offering ("IPO"), the issuer’s intellectual property ("IP"), such as trademarks, patents, copyrights and know-how, is often directly related to the issuer’s competitive advantage and long term profitability. The Examination and Verification Committee of the China Securities Regulatory Commission ("Examination and Verification Committee") often takes this fact into consideration.

I. IP Issues Arising from A share IPOs within Legal Framework

This article focuses on IP rights from the perspective of A share public offerings, and particularly on trademark, patent, know-how and copyright issues that have caught the attention of the Examination and Verification Committee.Continue Reading Intellectual Property Issues Arising from A Share Initial Public Offerings

By Susan Ning, Liwei Wang and Hazel Yin

On 27 December 2011, the Ministry of Commerce ("MOFCOM") made a press release on its major merger enforcement work in 2011.1  Mr. Shang Ming, Director General of MOFCOM’s Anti-monopoly Bureau and Chairman of the General Office of the State Council’s Anti-monopoly Commission, gave a briefing at the press release and responded to press inquiries.

According to Mr. Shang, from January to mid-December, 2011, MOFCOM received a total of 194 merger control filings, an increase of 43% compared to the same period last year. Among the received filings, 179 filings have been accepted and 160 filings have been reviewed and closed.

Of the 160 closed cases, 151 cases were granted unconditional approval (94%), 4 cases were granted conditional approval (3%), and 5 cases were withdrawn by the applicants after case acceptance (3%). A breakdown of the filings by the industrial classification for national economic activities is as follows:Continue Reading AMB Director Shang Ming Speaks on Merger Enforcement in 2011

By Susan Ning and Yun Wang

On 29 December 2011, the Ministry of Industry and Information Technology ("MIIT") finally promulgated the Various Provisions on Regulating the Order of Internet Information Service Market ("Rules").  Viewed by many as been driven by the QQ/360 disputes in late 2010, the Rules mainly set out the code of conducts for an internet information service provider ("IISP") vis-à-vis its competitors and consumers. The Rules also create a dispute resolution mechanism between IISPs.Continue Reading MIIT Finalizes Rules Governing Competition in Internet Industry

By King & Wood’s Trademark Group

In March, the leading domestic industrial recorder enterprise Hangzhou Pangu Automation Systems Co., Ltd. ("Pangu Ltd.", 杭州盘古自动化系统有限公司) found that searching on www.baidu.com ("Baidu", 百度公司) for "Pangu recorders (in Chinese)" etc. returned results heading "Pangu recorder professional manufacturer Hangzhou Mengkong instruments www.mkong.com.cn (in Chinese)", and clicking the link leads to the website of Hangzhou Mengkong Instrument Technology Co., Ltd. ("Mengkong", 杭州盟控仪表技术有限公司).Continue Reading First Instance Court Finds that Internet Keywords Constitute Infringement by Using Unauthorized Trademark

By King & Wood’s Securities Group

Following the promulgation of the Notice on Further Regulating the Administration of Development and Filing of Equity Investment Enterprises in Pilot Areas (the "Pilot Rules") by the National Development and Reform Commission (the "NDRC") on 31 January 2011 and positive feedback from the six pilot areas, the NDRC is now determined to apply its administration and filing system to equity investment enterprises ("EIEs") across the nation. 

On November 23, 2011, the NDRC promulgated its first set of nationwide rules on the administration of equity investment enterprises, the Notice on Promoting Regular Development of Equity Investment Enterprises (the "Notice"). The main objective of the Notice is to standardize the establishment and operation of private equity funds.  This Notice evolved from the Pilot Rules and has addressed five major topics.  Together with the Notice, the NDRC also issued a set of forms for filing and guidance for EIEs’ constitutional documents (i.e. guidance on articles of association/partnership agreement of EIEs, guidance on the fund raising prospectus, etc.).Continue Reading NDRC Standardizes Private Equity Funds Filing System

King & Wood’s Intellectual Property Group

In recent years, the world has witnessed several milestone events signaling the arrival of a new generation of global internet companies. Apart from the much-hyped dawn of social media, there is a much broader trend taking place, one that has outgrown the traditional boundaries of the tech sector itself. “In short,” as Marc Andreessen wrote in a recent Wall Street Journal column, “software is eating the world.” As corresponding developments are happening in China, this new era has caused and will continue to cause dramatic implications on the monitoring and enforcement of intellectual property rights in the country. Continue Reading Enforcing Intellectual Property Rights in the Next Internet Era

By Susan Ning, Sun Yiming and Hazel Yin

It was reported 1 that on December 15, 2011, the Intermediate Court of Changsha, Hunan Province dismissed a consumer’s complaint that automobile producer Dongfeng Nissan and its 4S store 2 abused their dominant position in violation of China’s Anti-monopoly Law ("AML") by reaping exorbitant profits and expelling their competitors.  The case was originally filed in November 2010 and the court hearing was held in May 4, 2011.  It is the first antitrust lawsuit in the automobile industry and yet another defeated attempt by Chinese consumers in bringing AML private actions.

The plaintiff, Mr. Liu Dahua, is a Nissan car owner.  In October 2009, He had his car repaired at a local 4S store of Nissan.  Finding that the 4S store charged much higher price for repair services than other local auto repair factories, Mr. Liu asked the 4S store to sell the spare parts separately so he could do the repairs elsewhere.  However, the 4S store turned down his request saying that Dongfeng Nissan did not allow its 4S stores to sell spare parts alone, meaning that customers could only purchase the spare parts as well as the repair services together from Dongfeng Nissan’s 4S stores.Continue Reading Consumer Lost Antitrust Action against Dongfeng Nissan