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By Miao Qu of King & Wood’s Interllectual Property Group

With the growth of a market economy system, more and more enterprises are seeking to expand their businesses by investment or mergers and acquisitions ("M&A") rather than gradual traditional business growth. In investment and M&A, intellectual property ("IP") issues are increasingly involved in transactions and lawyers must be familiar with the intellectual property state of the enterprise. Moreover, lawyers engaged in dispute resolution also come across more disputes regarding the after-effects of M&A. These disputes and other legal risks which result from M&A can be mitigated or avoided. This writer summarizes typical IP issues involved in M&A from previous experience.Continue Reading Core Intellectual Property Issues in M&A and Investment (Part I of II)

By King & Wood’s Trademark  Practice

The Tort Law of People’s Republic of China was adopted on December 26, 2009, under which the IP rights, including copyrights, patent rights, and exclusive rights to use trademarks, are protected as individual rights and interests. Wang Shengming, vice-chairman of the Legislative Affairs Commission under NPC, commented, "Tort Law provides supplementary reference to the protection of IP rights."Continue Reading Tort Law Provides Supplementary Protection to IP Rights

By: Gao Chunkai, He Yunfan and Li Lingxiao of King and Wood’s Foreign Direct Investment Group

I. Background

On May 20, 2011, the State Administration of Foreign Exchange ("SAFE") issued the Circular of the SAFE on Operating Rules Concerning Financing and Round-Trip Investment Undertaken by Domestic Residents through Overseas Special-Purpose Vehicles (1)( "Circular 19" or "New Operating Rules"), which took effect on July 1, 2011. This Circular provides new operating rules for the foreign exchange registration with the SAFE of round-trip investments made through special-purpose vehicles ("SPV") and non-SPVs.Continue Reading Brief Analysis of Rules Covering Financing and Round-Trip Investment by Domestic Residents through Overseas Special-Purpose Vehicles

By King & Wood’s Trademark  Practice

The mark "日本電產" (Japan Densan in Chinese Characters) is also the short form of the enterprise name of its owner Nippon Densan Corporation (now Nidec Corporation). As a trade name, it is unique and distinctive. However, when being filed for registration as a trademark, "日本電產" ("Japan Densan in Chinese Characters") must also bear the distinctiveness that is required of a trademark.Continue Reading What is proven, the Use of Trademark or Trade Name?

By King & Wood’s Trademark  Practice

Nokia opposed a trademark application to register "VERTU" under Appn. No. 3084613 which covered "spectacles [optics]; eyeglass cases, etc." in Class 9 filed by an individual. Both the China Trademark Office ("CTMO") and Trademark Review and Adjudication Board ("TRAB") denied the opposition. Nokia appealed before the Beijing First Intermediate People’s Court asserting that:Continue Reading “VERTU” Mobile Phones vs. “VERTU” Spectacles

By King & Wood’s Banking Group

Since the launch of the pilot program of RMB settlement in cross-border trade transactions in July 2009, the volume and complexity of the said transactions and the ancillary banking businesses have been rapidly increasing. During the past two years, the pilot program was carried out in 20 provincial regions. PBOC plans to expand the pilot program to the whole country within this year. In order to satisfy business and banking industry’s strong needs for policy transparency, regulatory authorities such as SAFE and MOFCOM have issued various rules and guidelines aiming to streamline cross-border flows of RMB. On June 8, 2011, PBOC published a most recent circular (1)("Circular") which clarifies several major issues relating to cross-border RMB transactions. Industry feedback regarding the Circular has been positive and the Circular has been interpreted as "a significant step towards the internationalization of RMB" by the market.Continue Reading PBOC New Rules to Boost RMB Cross-border Transactions

Susan Ning and Yin Ranran

On September 2, 2011, China’s Ministry of Commerce ("MOFCOM") released on its website the Provisional Rules on Assessment of Competitive Effects of Concentration of Business Operators (MOFCOM 2011 Announcement No. 55, the "Rules").  With 14 articles, the Rules elaborated on the factors to be considered by MOFCOM in assessing the competitive effects of a business concentration, which have been listed in Article 27 of the Anti-monopoly Law ("AML")1 .  The Rules are implemented as of today (September 5, 2011).

The Rules set out the basic methodology for its competitive analysis and the basic elements for application of each factor in a merger review process.  The Rules appear to identify market share/market control power and market concentration levels as the most important factors to be considered by MOFCOM in assessment of competitive effects of a concentration.Continue Reading MOFCOM’s New Antitrust Rules Shed Light on Its Competitive Assessment Process

By Susan Ning, Huang Jing and Yin Ranran

On 25 August 2011, the Ministry of Commerce (MOFCOM) released the MOFCOM Rules for Implementation of Relevant Issues regarding National Security Review Mechanism for Mergers and Acquisitions of Domestic Enterprises by Foreign Investors (NSR Rules).  From 1 September 2011, the Rules replaces the MOFCOM Interim Rules for Implementation of Relevant Issues regarding National Security Review Mechanism for Mergers and Acquisitions of Domestic Enterprises by Foreign Investors (NSR Interim Rules) issued on 4 March 2011 (see our article entitled "MOFCOM issues national security review interim rules").

Compared with the Interim Rules, the key change we see in the NSR Rules is that MOFCOM clearly states that the authority will assess the applicability of the national security review (NSR) process from the substance and actual impact of a transaction; and that foreign investors shall not evade the NSR regime via alternative transaction structures, including but not limited to warehousing arrangements, trusts, multi-tier investments, leases, loans, contractual control, or offshore transactions, etc.Continue Reading Updated National Security Review Rules: A Justifiable Cause of Anxiety?

By Zhang Yi of King & Wood’s Corporate Group

On August 25, 2011, the Ministry of Commerce (MOFCOM) promulgated the Provisions on Implementation of Security Review System Regarding Mergers and Acquisitions of Domestic Enterprises by Foreign Investors ( “Provisions”), which will become effective on September 1, 2011. The Provisions state that foreign investors must file an application for security review with MOFCOM for merger and acquisition (“M&A”) transactions that fall within the scope of security review. If a given M&A transaction is within the scope of security review, MOFCOM will inform foreign investors within 15 working days of the application being filed, and submit the application to the Joint Ministerial Panel for security review within 5 working days. The Provisions also state that foreign investors must not use any means, including but not limited to nominee shareholdings, trusts, multi-tier investments, leasing, loaning, control agreements, and offshore transactions, to evade M&A security review.Continue Reading China Enhances the Legal Administration and Security Review of Inbound M&A Transactions

By Susan Ning and Yin Ranran

On 27 July 2011, the Ministry of Industry and Information Technology ("MIIT") issued for public comments draft rules entitled Provisions on Administration of Internet Information Services (Draft for Comments) ("Draft Rules").

The Draft Rules are based on an earlier draft entitled Interim Rules for Supervision and Management of Internet Information Service Market ("Interim Rules") released by MIIT on 12 January 2011.1   The Draft Rules mainly set out the code of conducts for an internet information service provider ("IISP") vis-à-vis its competitors and consumers.
 Continue Reading MIIT Issues Revised Draft Rules Governing Competition in Internet Industry