China

IPRs. Supreme Court issues Interpretation on Several Issues Concerning the Application of Law to the Trial of Cases of Civil Disputes over the Protection of Well-known Trademarks

On April 23 the Supreme Court promulgated the Interpretation on Several Issues Concerning the Application of Law to the Trial of Cases of Civil Disputes over the Protection of Well-known Trademarks (hereafter referred to as “Interpretation”). The Interpretation aims at preventing the abuse of the well-known trademarks system.

The Interpretation clarifies the case in which the well-known trademarks shall be applied, specifies the factors which shall be taken into account in recognition of well-known trademarks, lower the proof burden of the super well-known trademarks and clarifies the condition for the cross-protection of the well-known trademarks.


IPRs. Supreme Court issues Opinions on Due Implementation of National Intellectual Property Strategy

The Supreme Court issued the Opinions on Due Implementation of National Intellectual Property Strategy (hereafter referred to as “Opinion”), which stipulates the overall plan for the court to implement the national intellectual property rights. The Opinion consists of 6 parts and includes 36 articles.

The Opinion increases the civil compensation liability and crime liability for malicious IPRs infringement. Article 5 and article 21 dedicate that the court shall adhere to full compensation principle, enlarge the scope and degree of application and enforcement of the fine penalty and take steps to deprive the infringers of their abilities to recommit to the crime.

Criminal, civil and administrative IPRs proceedings will be exclusively handled by IPRs tribunals and the special appellate court is intended to be established.

The Opinion stipulates principals separately for different IPRs cases, such as trademark, patent, copy right and Anti-Unfair Competition Law.

The courts will be more prudent in the reorganization of well-known trademark and in the application of the principal of Anti-Unfair Competition Law.


Anti-Trust & Competition Cases

1) MOC Rejects Coca Cola’s Merger Control Application for Acquisition of China Huiyuan Juice Group Ltd.(March 18,2009)

On March 18, MOC makes a statement that it has rejected Coca Cola’s merger control application for acquisition of China Huiyuan Juice Group. This is the first merger control application rejected by MOC since the Anti-Monopoly Law coming into effect.

According to Anti-Monopoly Law, MOC has taking the factors into consideration in this case, such as the impact on market share and control, the level of market concentration, the concentration on market entry and technology advancement, the concentration on consumers and related business operators and the market effect of Huiyuan brand. After the review, MOC decided that this acquisition would have an adverse impact on competition in the relevant market.

It takes about 1month for MOC to finish its first review and 3 months to decide on this case.

2) MOC Approves Mitsubishi Rayon’s Merger Control Application for Acquisition of Lucite with Conditions(April 24,2009)

On April 24, MOC made a statement that it has conditionally approved Mitsubishi Rayon merger control application fir the acquisition of Lucite International Group.

MOC has taking the following factors into consideration in this case, such as relevant market and competition, decides the concentration would have minor impact on the relevant product market and the merger would have an adverse impact on competition in China’s market. But MOC hold the belief that the proposal submitted by the applicants is enough to eliminate the adverse effect.

MOC approves the merger on the condition of production capacity strip-off and independent operation before the completion of the strip-off. Without approval of MOC, Mitsubishi Rayon shall not conduct any acquisition or building new factories after Merger.


MOC Delegates Authority to Approve Investment Companies with Foreign Capital

MOC issued The Notice on Delegation of the Authority to Approve the Establishment of Foreign-Invested Investment Companies (hereafter referred to as “Notice”) on March 6, 2009. The Notice intends to simplify the approval procedures make the approval process more efficient.

The Notice stipulates the establishment of a foreign-invested investment company whose registered capital is below USD 100 million and its alteration issues (except for any capital increase exceeding USD100 million at one time) shall be approved by commerce authorities of provinces, autonomous regions, municipals, the cities especially listed in the state plan, Xinjiang Production and Construction Corps and sub-province cities which including Ha’erbin, Changchun, Shenyang, Jinan, Nanjing, Hangzhou, Guangzhou, Wuhan, Chengdu and Xi’an.

The subsequent alteration issues (except for any capital increase exceeding USD 100 million or investors alteration) of foreign-invested investment company whose establishment is approved by MOC shall be approved by commerce authorities of provincial level.


China to Regulate Electronic Wastes

China's State Council, or Cabinet, announced on Wednesday a regulation, signed by Premier Wen Jiabao, on the disposal of waste electrical and electronic equipment, in a bid to promote recycling, environmental protection and safeguard human health.

Treatment will be done only by treatment firms, which get a license from local governments, said the regulation which will take effect on January 1, 2011.

A fund, paid for by domestic producers and sellers of imported electrical and electronic equipment, will offer subsidies for treatment.

The regulation outlines the government's backing for scientific research and technology development on disposal as well as the use of new equipment and technology. It also bans the use of out-dated treatment methods for waste equipment.

Since 2003, more than five million TV sets, four million fridges, six million washing machines and five million computers have needed treatment each year, said the State-owned Assets Supervision and Administration Commission.

(Xinhua News Agency March 5, 2009)


New Food Safety Law

China's top legislature approved the Food Safety Law on Feb. 28, providing a legal basis for the government to strengthen food safety control "from the production line to the dining table."

The law, which goes into effect on June 1, 2009, will enhance monitoring and supervision, toughens safety standards, recall substandard products and severely punish offenders.

Earlier reports said China's Health Ministry would mainly handle food safety monitoring, evaluation and investigation of food safety emergencies. It would also be responsible for the general coordination of departments and promotion of local health authority reform.

The Health Ministry would also be responsible for the general coordination of departments and promotion of local health authority reform.

The Ministry of Industry and Information Technology was committed to creating a credit record system among food manufacturers and strengthening self-discipline in the food industry.

The Agriculture Ministry should take effective measures to secure the quality and safety of farm produce at source and promote standardized agricultural production.

The State Administration for Industry and Commerce was responsible for regular inspections of retail and wholesale markets and the establishment of a long-term supervision system on food distribution links.

The General Administration of Quality Supervision, Inspection and Quarantine along with the State Food and Drug Administration (SFDA) would mainly deal with producer access to the industry and the market.

The SFDA would also conduct large inspections of sanitation at restaurants.


Chinese Health Ministry to lead implementation of food safety law

BEIJING, March 2 (Xinhua) -- China's Health Ministry is to take the lead among the government's departments tasked with implementing the new Food Safety Law, Vice Health Minister Chen Xiaohong said Monday.

Detailing the division of responsibilities for enforcing the law, Chen said a joint leading group consisting of nine departments had been founded to deal with nationwide food safety supervision.

The Health Ministry would mainly handle food safety monitoring, evaluation and investigation of food safety emergencies, Chen told a press conference.

The Health Ministry would also be responsible for the general coordination of departments and promotion of local health authority reform.

The Ministry of Industry and Information Technology was committed to creating a credit record system among food manufacturers and strengthening self-discipline in the food industry.

The Agriculture Ministry should take effective measures to secure the quality and safety of farm produce at source and promote standardized agricultural production.

The State Administration for Industry and Commerce was responsible for regular inspections of retail and wholesale markets and the establishment of a long-term supervision system on food distribution links.

The General Administration of Quality Supervision, Inspection and Quarantine along with the State Food and Drug Administration (SFDA) would mainly deal with producer access to the industry and the market.

The SFDA would also conduct large inspections of sanitation at restaurants.
China's legislature approved -- with 158 votes out of 165 -- the Food Safety Law Saturday, providing a legal basis for the government to strengthen food safety control "from production line to dining table".

The law requires the State Council, or Cabinet, to set up a state-level food safety commission to oversee the entire food monitoring system, whose lack of efficiency has long been blamed for repeated scandals.

The draft law had been revised several times since it was submitted to the National People's Congress Standing Committee for the first reading in December 2007.


Tax Administration on Foreign Enterprise Representative Offices

The Provisional Measures for Tax Administration of Foreign Enterprise Representative Office ("Provisional Measures") was issued by the State Administration of Taxation on February 20th, 2010 and became effective since January 1st, 2010.

According to the Provisional Measures, the minimum rate of profit, which should be used in the calculation of taxes, has been increased from 10% to 15%.

In general, there are three kinds of taxes levied on foreign enterprise representative offices: 1) the enterprise income tax, 2) the business tax, and 3) the "river way management charge" based on the business tax.

Before the Provisional Measures was applied, the enterprise income tax was 2.94% of the expenses, the business tax was 5.9% of the expenses, and the river way management charge was 0.059% of the expenses.

Therefore, the overall tax burden was 8.899% of the expenses.

According to the Provisional Measures, the enterprise income tax shall be 4.69% of the expenses, the business tax shall be 6.25% of the expenses, and the river way management charge shall be 0.0625% of the expenses.

Therefore, the overall tax burden shall be 11.0025% of the expenses.

Therefore, the enterprise income tax is increased in a 1.75% of the expenses, the business is increased in a 0.35% of the expenses, and the "river way management charge" is increased in a 0.0035% of the expenses.

Therefore, the overall tax burden is increased in a 2.1035% of the expenses.


China's National People's Congress (NPC) Discusses Report on Water Pollution Control

China's National People's Congress (NPC), the country's top legislature, began discussing a report on water pollution prevention and control on Wednesday.

Zhou Shengxian, the Environmental Protection Minister, delivered the report at a plenary session of NPC Standing Committee.

China has paid increasing attention to ecological challenges and environmental problems as it seeks to balance its high economic growth rate with a rational use of natural resources and pollution control.

Zhou is to detail the country's efforts in curbing drinking water contamination and achievements in tackling water pollution in major rivers and rural areas.


The State Administration for Industry and Commerce issues New Rules on Capital Contribution with Equities

On 14 January, the State Administration for Industry and Commerce issued the Measures for Administration of the Registration of Capital Distribution with Equities (hereafter referred to as “Measures”), which comes into effect on 1 March, 2009. The Measures give the legal basis and clear guidelines for the registration of capital contribution in the form of equity transfer.

The Measures stipulates that the investor is permitted to make capital contribution into a PRC company established or to be established by transferring his equities in other PRC company. The transferred equities shall be clear in ownership, complete in terms of rights and transferable under the laws. The Measures also dedicates the situations where the equities shall not be transferred for capital contributions. The value of the foresaid transferred equities shall be appraised by qualified appraisers.