LEHMAN, LEE & XU China Lawyers |
China Law Digest |
January 2013 |
The China Law News keeps you on top of business, economic and political events in the China. |
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In the News |
China considering broad law to require real-name registration for its 500m+ Internet users |
The government is considering a move to introduce real-name registration for its more than 500 million Internet users in the country, Xinhua reports.
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China’s Ministry of Commerce to Establish Supervisory System for E-Commerce |
China’s e-commerce sector has been immensely profitable, but it has also been kind of like the wild west. Without a lot of regulation, it’s very easy to find customers, merchants, and the employees of e-commerce companies that kicked it complaining about fraud. Now, China’s Ministry of Industry and Commerce has stepped in, announcing that it will establish a unified national system of oversight for e-commerce to prevent and punish law-breaking and unfair practices. |
Beijing set to welcome visa-free visitors |
The decision to waive visas for foreign visitors for 72 hours is a major step toward Beijing's goal of becoming an open international city, tourism experts said. |
Nike Sues in Chinese Trademark Dispute |
BEIJING—Nike Inc. is fighting Chinese trademark authorities to win rights to use the Chinese-language name of Olympic hurdler Liu Xiang in its marketing, the latest in a spate of trademark disputes emerging as Western companies try to build their brands in China. Shanghai Liuxiang Industrial, a family-run company that started in the mid-1980s, bought the trademark in 1986, long before the athlete earned his Olympic fame, as a logo that represented their family name, Liu, and the village, Yixiang, where it was founded. The company's owner, Liu Jianzhong, said Nike hasn't approached them for use of the trademark. Nike executives said last year that it has a goal of roughly doubling its sales in China to $4 billion by 2015. But in September, Nike said sales in China have been weakening. http://online.wsj.com/article/SB10001424127887324640104578160680028574790.html |
China’s new recall law presents huge risks for foreign car importers |
A new law covering automotive recalls in China comes into force on 1 January 2013, as part of the Chinese government’s moves to increase consumer protection. Whilst the regulations increase the obligations for manufacturers in terms of quality control and documentation, the new rules are also likely to create unanticipated disputes within the Chinese market. In addition to re-defining ‘manufacturers’ and ‘defects’, the new automotive recall law broadens the definition of ‘complainants’ to include any organisation or individual, not just the owner or driver of an automobile. Under the new law, any organisation or individual will be able to complain about possible defects in automotive products to AQSIQ (State Administration of Quality Supervision, Inspection and Quarantine). There is no requirement for the complainant to prove that he or she is the vehicle owner, as under the current provisions. “Under the new law, any organisation or individual will be able to complain about possible defects in automotive products… There is no requirement for the complainant to prove that he or she is the vehicle owner” Risks of abuse are evident, especially in China where the government at all levels tends to interfere in private business. Manufacturers could expect to see a range of complaints from bodies without a genuine liability problem, who are motivated to disrupt competition in the market and protect local brands. Automotive manufacturers and suppliers need to understand their obligations under the regulations and adjust their operations in China accordingly, especially the focus on quality control. Considering the possibility that the new complainant rights may be abused, foreign vehicle manufacturers should consider co-operating to promote a revision of the regulations in this matter. From 2013, manufacturers will be defined as being only Chinese automotive manufacturers and importers of foreign cars into China. Foreign manufacturers will now be excluded from recall liability in China. The intention here is to ensure that importers of foreign vehicles will not be able to shift the recall responsibility back onto foreign manufacturers in the future. Although foreign manufacturers will welcome the fact that they are now legally excluded from the recall obligations, this does not mean that they can forget about recalls in China. In practice, the foreign mother company will still need to provide full support to their own importers and their localised manufacturing companies. The new definition of ‘defect’ includes the design, manufacture, marks or other reasons where automotive products of the same batch, model or category have universally unreasonable hazards which endanger personal or property safety. Previously, cars meeting relevant national and industrial standards have not been considered as ‘defective’, even if they may pose a hazard to personal safety and property. The new recall law has expanded the scope of the definition of a defect to include those cases in which standards are met but where the product may still present unreasonable hazards. This will have implications for quality control procedures. “Although foreign manufacturers will welcome the fact that they are now legally excluded from the recall obligations, this does not mean that they can forget about recalls in China” The new obligations extend the amount of information that shall be preserved for no less than ten years. The Chinese manufacturer or the importer must also submit essential information, technical statistics of auto products and any recall history outside China to AQSIQ. Foreign vehicles with a recall history in or out of China are very likely to be recalled upon the order of AQSIQ. Demonstrating the seriousness of the Chinese government’s intentions, new and more severe punishments will be introduced for violations of the recall law. Among others, severe penalties of up to US$1.6m are foreseen for any ‘manufacturer’ which fails to conduct a recall according to the regulations or refuses to conduct a recall.
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Chinese Legislature Debates Trademark Law Draft Amendment |
The Trademark Law of the People’s Republic of China (“Trademark Law”) was enacted in August 1982, four years after China commenced its transition to a market economy. The Trademark Law came into force on March1, 1983 and has been amended twice so far. The First Amendment was made in 1993 under pressure from the United States, and the Second Amendment was made in October 2001 to facilitate World Trade Organization (WTO) accession. There have been significant changes to each aspect of China’s economy since its entry into the WTO in December 2001. China’s gross domestic product (GDP) has tripled within 8 years.1 This period of rapid economic growth has led to sharp increases in trademark filings and registrations. In 2001 the Chinese Trademark Office received 270,417 applications for registration of trademarks and issued 202,839 approvals for registration. In 2006, applications grew to 766,319, and registrations increased to 275,641,2 representing an 83% increase in filings and a 35.9% increase in registrations, within a period of only five years. As a result, the period of time between filing and substantial examination of applications has increased from one year in 2001 to two to three years nowadays. The Chinese government recognizes the need to update the Trademark Law in response to China’s domestic economic growth and an increasingly important role it plays in the global economy and has made efforts to introduce necessary reforms. From 2003 to 2006, the State Administration for Industry and Commerce (SAIC) invited individuals and organizations, including foreign industrial associations and professional organizations, to provide comments on how to amend the Trademark Law. Since then, SAIC has prepared at least three draft versions of the revised Trademark Law for internal discussions. One of the draft versions — a draft Third Amendment — was published in 2007 for public comments. Currently, the top legislature began deliberating a draft amendment to the Trademark Law that would prevent the malicious registration of trademarks that are already in use. "Applications should not be accepted if the applicants know beforehand that the trademarks to be registered are already in use by other companies," says the draft, which was submitted to the bimonthly session of the Standing Committee of the National People's Congress (NPC) for review. The draft is intended to curb the malicious registration of trademarks by individuals who have insider knowledge of other companies using said trademarks. The amendment also offers protection for renowned trademarks, giving their owners the right to ban others from registering the trademarks or using similar ones -- even if such trademarks are not registered. In such a case, the trademark in question must be determined to be well-known, with results to be valid only for that specific case, the amendment states. http://www.globaltimes.cn/content/751965.shtml
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