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By He Wei and Zeng Ying King & Wood’s Dispute Resolution Group

Mediation in China can be divided into three categories: mediation supervised by the people’s court, mediation supervised by an arbitral tribunal and mediation without the supervision of a court or arbitral tribunal. The first two categories of mediation share many similarities. Both of them are conducted by particular institutions in accordance with statutory proceedings, and the settlement agreements reached have the same binding force as judicial judgments. These two categories of mediation, because of their "quasi-judicial" nature, are usually collectively referred to as "judicial mediation". Usually such bodies are decision making—and a mediation must give only the parties control over decisions.

Besides judicial mediation there are many other forms of mediation, which also help resolve disputes and lift the heavy caseload of the courts and arbitration institutions. These forms of mediation can be collectively described as "extra-judicial mediation". Extra-judicial mediation, which provides parties with more alternative dispute resolution mechanisms, plays a very important role in today’s fast-growing economy.Continue Reading Extra-judicial Mediation System and Practice （Part I of II）

By King & Wood’s Foreign Investment Group

On October 12, 2011, the Ministry of Commerce (MOFCOM) promulgated the Circular on Issues Relating to RMB Cross Border Direct Investment dated (the "Circular"). The Circular provides that outbound investors (including investors of Hong Kong, Macao and Taiwan) can make direct investment with RMB funds they obtained legally outbound (the "Offshore RMB").Continue Reading MOFCOM Releases Circular on Cross-border RMB Direct Investment

By Susan Ning and Huang Jing

On 7 September 2011, the Shanxi Combined Transportation Group Company (SCTG) filed an administrative law suit with the Taiyuan Xinghualing District People’s Court against the Taiyuan Bureau of Railways (the "SCTG Case"). On 15 September 2011, the Taiyuan Xinghualing District People’s Court accepted the SCTG Case.

SCTG alleged that it had submitted two applications to the Taiyuan Bureau of Railways for establishing new railway ticket agent stores on 25 January 2011; but Taiyuan Bureau of Railways did not respond to such applications.  According to SCTG, Taiyuan Bureau of Railways’ conduct was a violation of the Anti-monopoly Law (AML), and constituted administrative omission.   Thus SCTG filed the administrative lawsuit.Continue Reading Taiyuan Bureau of Railways Sued for Antitrust Violation

By King & Wood Intellectual Property Group

Liu Zhaolong, a Chinese national, was found to have purchased raw wine, bottles, bottle caps, labels, bottle capping equipment and other illegal materials and tools, and manufactured counterfeit wines imitating Chivas, Remy Martin, Ballantine’s, Jack Daniels, Martell, Hennessy, Royal Salute and other famous wine brands. Liu filled the counterfeit wines and distributed them to several cities in China, the illegal turnover of which has been over RMB 200,000 (around US$31,250). As a result, Beijing Daxing District Court found that Liu Zhaolong had violated the provisions of Article 213 of the Criminal Law of China and committed the crime of counterfeiting a registered trademark.Continue Reading Criminal Liability: the Last Resort for Trademark Protection

By King & Wood’s Intellectual Property Group

Pursuant to the judicial interpretations enacted by the Supreme People’s Court of China in February 2008, if a prior registered trademark owner files an infringement lawsuit against the use of a latter registered trademark, courts will refuse to accept the case. The prior trademark registrant must first initiate a trademark dispute action with the China Trademark Review and Adjudication Board (TRAB) to invalidate the latter registered trademark. The are various reasons that may prevent the latter registered trademark from being invalidated within a short period of time, making it difficult for the prior registrant to prevent continued infringement by the latter mark in a timely manner.Continue Reading Copyright, a Drawn Sword towards Bad Faith Trademark Registration

By Xu Ping  King & Wood’s Foreign Direct Investment Group

The variable interest entity ("VIE") has long been a popular structure for foreign parties to invest in sectors which are restricted by China’s industrial policy to foreign investment. In addition the VIE structure has also been used as a means by which Chinese domestic entities could list offshore on international capital markets.

The first well known VIE structure was that of Sina.com in its 2000 listing on NASDAQ. Indeed the VIE structure is also commonly known as a "Sina Structure". Sina used the VIE as a workaround structure to avoid restrictions on foreign direct investment (FDI) in the value-added telecom services sector. Since then, both foreign and Chinese investors alike have replicated the VIE structure in many other sectors of China’s economy where FDI is either restricted or prohibited to foreign investors.Continue Reading Variable Interest Entity (VIE) Structure for Foreign Investment in the PRC May Face Challenge

by Yang Hua  Connie Zhuang     King & Wood’s Intellectual Property  Group

On September 2, 2011, the Legislative Affairs Office of China’s State Council released a circular seeking public comments on proposed revisions to the Trademark Law of the People’s Republic of China (the "Draft Revisions").

The most notable amendments in the Draft Revisions are provisions aimed at preventing bad faith filings and changes to the trademark opposition procedures.Continue Reading The Revised Trademark Law of China Open for Public Comment

by King and Wood’s Finance Group

Further to Circular No. 145, on 14 October 2011 PBOC released new rules on RMB FDI, the Measures on Administration of the RMB Settlement in relation to Foreign Direct Investment ("PBOC Rules") to roll out PBOC’s detailed management system.  The PBOC Rules cover all the FDI aspects denominated in RMB, including capital injection, payment of purchase price in the acquisition of PRC companies, repatriation of dividends and distribution as well as RMB denominated cross-border loans.  The PBOC Rules adopt similar methodology applied by SAFE to foreign currency FDI but appear to be more friendly.  On the same day, MOFCOM also issued a circular ("MOFCOM Circular") to clarify certain issues in relation to cross-border RMB FDI transactions.
We highlight the following aspects we deem of significance:Continue Reading RMB FDI Goes to Fast Track

By King & Wood’s Intellectual Property Group

China’s State Intellectual Property Office (SIPO) is able to issue compulsory patent licenses where an entity or individual who is otherwise qualified to exploit a patent does not succeed in obtaining a license on  reasonable terms and within a reasonable period from the patent holder. The new Patent Law of the PRC (the “Patent Law”) and the Implementing Rules of the Patent Law of the PRC (the “Implementing Rules”) both contain provisions regarding the compulsory licensing of patents. On October 12, 2011, the SIPO issued a circular to solicit public comments on the Amendments to the Measures on Compulsory Patent Licensing (Draft for Comments) (the “Draft Amendments”). The SIPO will be taking comments until November 13, 2011.Continue Reading SIPO Issues Amendments to Compulsory Patent Licensing Measures