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By Susan Ning, Ding Liang, Liu Jia and Sun Yiming

On November 14, the National Development and Reform Commission ("NDRC") announced its decision to fine two private pharmaceutical companies nearly RMB 7 million for violating the Anti-monopoly Law ("AML")1. The penalty decision was released right after the NDRC publicly confirmed its investigation over China Telecom and China Union for alleged abuse of dominance in the broadband market. It seemed that the NDRC could not wait to show its determination to enforce the AML with another striking case.Continue Reading NDRC Fined Two Pharmaceutical Companies for Abusive Conducts

By Susan Ning, Sun Yiming, Liu Jia and Yin Ranran

On 2 December 2011, China Telecom and China Unicom announced that they have applied to the National Development and Reform Commission (NDRC) for suspension of its antitrust investigation into their internet access pricing practices, by promising to adjust the internet access prices and overhaul their broadband services.

According to their announcements 1, China Telecom and China Unicom stated that they have proactively cooperated with the NDRC’s investigation and have engaged in "self-evaluation" of the challenged pricing practices.  Both companies acknowledged "room for improvement" for their interconnection services and pricing practices.Continue Reading China Telecom and China Unicom Seek to Settle Antitrust Probe

By Susan Ning, Sun Yiming and Liu Jia

On December 7, the Provisional Measures on Investigating and Penalizing Violation of Notification Obligations for Concentrations between Business Operators (Provisional Measures) were reviewed and discussed at the No. 57th Ministerial Affairs Meeting of the Ministry of Commerce (MOFCOM) and were passed in principle.1  

It was discussed at the meeting that currently companies frequently ignore their merger control notification obligations under the Anti-Monopoly Law which has caused negative social impact.  Under such circumstances, the Provisional Measures are expected to strengthen MOFCOM’s enforcement in relation to investigation and punishment for those companies who fail to honor their notification obligations.Continue Reading MOFCOM Passed Provisional Rule on Failure to Notify on Concentration

King & Wood’s Trademark Group

After a three-year trial, the case of Kirin Kyowa Foods Co., Ltd. vs. Chen and Wang over a trademark assignment contract has currently been decided by the first instance. Kirin Kyowa Foods Co., Ltd. (the "Plaintiff"), as the proprietor of the trademark "可得然", appointed Shanghai Aucane Enterprise Co., Ltd. ("Aucane") as its sales agent for gelatine bearing the "可得然" trademark. In March 2006, Chen (the "Defendant"), the legal representative of Aucane, preemptively filed an application for registration of "CURDLAN", which is the English equivalent of the "可得然" trademark at the China Trademark Office (the "TMO"). In 2007, both parties signed a Trademark Assignment Contract (the "Contract"), requiring the Defendant to assign the trademark "CURDLAN" to the Plaintiff at the price of US$2,000. In May 2008, the TMO took office action on the grounds that "the assignor’s signature is evidently inconsistent with the one filed with the TMO in the past", and required the Plaintiff to provide a copy of the assignor’s ID card and its notarized statement of agreement on the said trademark assignment. However, the Defendant failed to provide any of the above materials, causing the TMO to refuse the assignment of "CURDLAN", and thus the Plaintiff appealed to the court.

Continue Reading Trademark Assignment Dispute Over “CURDLAN” — Kirin Kyowa Foods Co., Ltd. vs. Chen and Wang

King & Wood’s Trademark Group

On November 9, 2011, the China Trademark Office (the "TMO") has partially adjusted its official website for the purpose of facilitating the public in browsing and searching information about recordal of pledges of exclusive rights to registered trademarks. The adjustments are in respect of the place of the information, the means of disclosure and the items of disclosure.

Thanks to such adjustments, the public may directly search whether the exclusive right of a registered trademark is pledged in the column "Use of Trademark Rights" on the TMO website, including name of the pledgor, name of the pledgee, the registration number of the pledged trademark, and validity period of the pledge. Moreover, the pledge information in e-charts has changed to web links below which the public may find a collection of information of pledges as of November 2009.Continue Reading China Trademark Office Adjusts Means of Disclosure for Pledge of Exclusive Rights

By Cecilia Lou and Steven Yao King & Wood’s Intellectual Property Group

The Patent Law of the People’s Republic of China(1)("Patent Law") and Regulations for the Implementation of the Patent Law of the People’s Republic of China(2) ("Implementing Regulations") has drawn our attention to rewards and remuneration for inventors. The Patent Law stipulates that employers must pay reasonable rewards and remuneration to inventors of a service invention and the Implementing Regulations explicitly address the amount payable. For purposes of encouraging technological innovation and industrialization, the change is sure to play a positive role in motivating employee initiatives and promoting social productivity. However, it will also bring certain challenges to many employers in terms of compliance with reward and remuneration issues in China, especially when the Blue LED case in Japan resulted in a 70 million RMB settlement.

The key issue of concern to employers is: Whether the huge commercial benefits acquired by the employer based on a service invention made by its employee do not correspond to the remuneration received from the employer due to the creation of the service invention agreed in the remuneration clause in China, whether the employee shall be entitled to request the court to modify or even revoke the remuneration clause and request some additional remuneration?Continue Reading Dodging Service Invention Disputes

By Yan Jun and Chen Haiting King & Wood’s Real Estate Group

With urbanization surging in China, conflicts triggered by urban housing demolition constitute a grave threat to social stability. In order to cope with the legislative demands posed by new situations, China’s State Council ("CSC") made amendments to the Administrative Regulations on Urban Housing Demolition and Relocation(1)("2001 Regulations") and promulgated the Regulations on Expropriation and Compensation of Housing on State-owned Land on January 21, 2011 ("New Regulations").

Compared to the 2001 Regulations, the New Regulations set forth some principles in housing expropriation. The New Regulations stipulate that compensation standards should be set no lower than market prices, and require increased transparency during the expropriation process. The New Regulations specify circumstances under which compulsory expropriation can be conducted for the sake of the public interest. Though there are still some debatable points to be clarified, the New Regulations have made significant improvements in the regulation of public rights and the protection of private rights. The promulgation of the New Regulations caters to the economic and social development of China, which fully reflects China’s legislative progress in building a more democratic society. This article will explore the major changes and highlights of the New Regulations.Continue Reading Understanding the Regulations on Expropriation and Compensation of Housing on State-owned Land

By King & Wood’s Labor Group

On November 21, 2011, the Legislative Affairs Office of the State Council released a notice to solicit public comments on the Regulations on Special Labor Protection for Female Employees (the "Draft Regulations"). The deadline for receiving comments on the Draft Regulations is December 23, 2011. The appendix of the Draft Regulations lists the scope of work prohibited to be assigned to female employees.Continue Reading China Releases Regulations on Special Labor Protection for Female Employees

By King & Wood’s Securities Group
 
On November 16, 2010, the General Office of China’s State Council promulgated a circular aimed at better detection, prevention and control of insider trading in capital markets by requiring listed companies in China to establish a registration system for people in possession of insider information (the "2010 Circular")[1].   To further implement the 2010 Circular, the China Securities Regulatory Commission (the "CSRC") released the Provisions for Establishing a Registration and Administration System for Persons with Insider Information in Listed Companies, which will become effective on November, 25 2011 (the "Provisions").
 

Continue Reading China Enhances Oversight of Insider Information

By Zhang Shouzhi Li Xiang and Zhang Mei King and Wood’s International Trade  Group

This article continues to discuss Legal Issues in Contracts for Sale of Large-sized Complete Set Equipment. The first part of this article was published on Chinalawinsight on October 2011.

II. Delivery and Acceptance

Because large-sized complete set equipment are often composed of multiple parts, it is customary for the manufacturing and delivery of equipment to occur in conjunction with the assembly sequence. Accordingly, there are multiple deliveries, installations and inspections during the contract performance. The general procedures are as follows:

A. Inspection

The first inspection of the equipment is usually an open-package joint inspection conducted by both parties upon the arrival of the equipment at the destination port. If the package appears intact, yet after inspection the equipment is found damaged, defective, short of quantity or not conforming to the quality standards and specifications, the buyer is entitled to request the seller to repair, replace, or supplement the parts in question or to claim compensation. If problems are found to arise from the transportation, the buyer’s claim should be made against the carrier or insurance company. As an extra precaution, the buyer sometimes dispatches staff to do a preliminary inspection at the seller’s factory or at the departure port before loading of the equipment.Continue Reading Legal Issues in Contracts for Sale of Large-sized Complete Set Equipment （Part II of II）