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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.

According to the proposal, Internet service providers and other network operators would be tasked with collecting and securing the real-name identities of its users.

“Such identity management could be conducted backstage, allowing users to use different names when publicizing information,” Li Fei, deputy director of the Commission for Legislative Affairs of the NPC Standing Committee, said on Monday. The fact that the report is published by the Xinhua news wire, one of the state’s mouthpieces, is fairly ominous since government affiliated media is often used to publicize upcoming changes. That was indeed the case in December 2011, ahead of the introduce of real-name regulation for social media.

As China has developed its Internet infrastructure, it has already been working to close down loopholes that would allow anonymity. Most vendors now require identification to purchase a SIM card, activate cellular service, or sign up for broadband service at home.

If implemented across the board, a real-name system would allow authorities to compile a comprehensive portfolio of a resident’s digital activities, across their devices, connections and social networks. Those requirements, coupled with the blocking of circumvention tools, could pose trouble for political dissidents, many of whom rely on anonymity online to evade authorities.

The regulations would have a dramatic impact on domestic social networking services. Sina Weibo, the country’s top microblogging site, has dragged its feet in putting into place real-name verification requirements, and it has even voiced fears that the government could clamp down before Weibo was ready to fully implement the system. With over 400 million registered users, Weibo is too big to be ignored by the government.

It’s still early in new Chinese head of state Xi Jinping’s tenure, but so far it looks like loosening restrictions on the Internet are not at the top of his list. In recent weeks, the government has obstructed pathways normally used by foreign VPN services for dodging censorship restrictions. During the transition where Xi took power last month, the Chinese Internet slowed to a crawl.

“I have lived in Beijing since 2005, and these have been the most draconian few days of Internet restrictions I have experienced,” Bishop said at the time.

Meanwhile, the Ministry of Industry and Information Technology is moving forward with plans to require real-name registration for app developers publishing on application stores in China, which will themselves receive new regulations. The proposed regulations pre-date Xi’s ascendence, but they look set to come into effect under his watch.

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.

A Beijing-level official in the Ministry told the Beijing Evening News that the city was taking the lead by establishing a new laboratory for the collection of electronic data and evidence that will hopefully help in the prosecution of law-breaking e-commerce companies. The system, which will be overseen by legal authorities, can apparently access the computers of e-commerce executives and copy (but not alter) files to its own servers for examination.

It’s not clear when the Ministry’s new system of oversight will be fully implemented, but it is clearly taking e-commerce fraud very seriously. Ministry officials promised to make the fines levied on e-commerce criminals harsher, and this year the Ministry has already inspected more than 290,000 e-commerce sites, deleted more than seven million instances of illegal product information, and shut down 168 illegal e-commerce companies.


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.

The capital announced on Wednesday that, from Jan 1, visitors from 45 countries will be allowed a three-day stay without a visa.

The program, of particular benefit to transit passengers and business people, will make the city more accessible and allow tourism to be a strategic pillar of the economy, the Beijing Tourism Development Committee said.

"The waiver is definitely a giant step forward that will greatly boost tourism," said Zhang Hui, a professor of tourism at Beijing Jiaotong University.

"Business tours and high-end travel will benefit the most.

"Those on business trips usually don't have sightseeing plans, so they're free to explore when they have time," Zhang said. "However, the relatively tight visa restrictions China now adopts only put potential visitors off.''

The countries include the United States, France, Germany, Italy, Spain, Canada, Brazil, Argentina, Australia, Japan and Singapore, according to the committee.

No decision has been made on including more countries and the program will have to be evaluated.

Tourists from the 45 countries, as long as they hold a ticket to a third country and proof of identity, are entitled to the visa exemption, the committee said.

The Beijing General Station of Exit and Entry Frontier Inspection said the station would strive to provide a convenient and effective service.

The visa exemption only applies to the capital. To go to other cities, foreigners will have to go through the public security bureau's exit and entry administration.

"Those traveling to other provinces and cities, even to neighboring cities like Tianjin, will face punishment," if they travel without the required documentation, said Gao Huada, deputy director of the exit-entry administration under the Beijing Municipal Public Security Bureau.

However, the exact details were not released on Wednesday.

Visitors who break the law during their stay will face a lifetime ban, he said.

"These procedures are just in case of accidents," he said.

Members of the public can dial 5609-5400 or visit the station's website if they have any questions.

According to Gao Lijia, executive vice-president of Beijing Capital International Airport, the number of inbound passengers will rise sharply as a consequence of the policy.

"We have been looking forward to the implementation of the visa waiver for so long," he said.

"We are fully prepared to embrace our first batch of visitors and it's also an opportunity to contribute to the city's tourism development."

In addition, the waiver is expected to increase jobs at the airport. One extra flight can create hundreds of positions over the year, according to the committee.

BTG International Travel and Tours said they designed a number of products to cater for the surge.

"We have prepared cultural performances, including martial arts and Beijing Opera, in the evening so that they can enjoy more of the city's charm in a short space of time," said Sun Lianqin, deputy general manager of the company.

According to Wang Yue, deputy director of the Beijing Tourism Development Committee, Beijing needs to make greater efforts to improve tourism and its global appeal.

"The capital should further open up its transit policy," she 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.

Chinese hurdler Liu Xiang attended a Nike promotional event last year in Beijing.

The Beaverton, Ore., sportswear company already has the right to use Mr. Liu's image and his name in English spelling,

The Trademark Appeal Board had previously denied Nike's trademark application, saying that the rights still belong to Chinese garment maker Shanghai Liuxiang Industrial Ltd.

Now, Nike is suing China's Trademark Appeal Board of the State Administration for Industry and Commerce to use the name, a spokesman for the Beijing No. 1 Intermediate People's Court said Wednesday. The court heard the case last week but hasn't yet made a ruling, the spokesman said.

Nike didn't respond to requests for comment.

Nike's dispute is the latest in a growing list of court cases that have emerged over the past year over trademarks, underscoring the challenges of branding, naming rights and trademarks in China. While the Chinese government is often criticized for its lack of intellectual-property rights enforcement, the country's own intellectual property laws are known to be so broad that they may prevent world-wide sales of products that are made in China and violate Chinese trademark laws and patent protections.

In February, Chinese authorities started seizing from retailers Apple Inc.'s iPads that they claimed violated the rights of Proview Electronics Co., a screen maker that owned the trademark to the iPad name. Courts ruled that the Cupertino, Calif., gadget maker pay $60 million to the Chinese company.

Basketball star Michael Jordan in February cried foul against sportswear chain Qiaodan Sports Co., saying the company improperly used the Chinese version of his name to set up more than 5,700 stores. The verdict is still pending.

For years, Nike has built its marketing in China using Mr. Liu, who became a national hero and gained commercial appeal after winning a gold medal in the 2004 Athens Games and setting a world record in the 110-meter hurdles.

Subway walls around China are plastered with Nike ads featuring the athlete and Nike has also developed lines of apparel commemorating him, using LX and LiuXiang on the products rather than his name in Chinese characters. This summer, Nike launched a special sneaker called the Liu Xiang x Nike LunarGlide+ 4 to add to its other items, such as the Nike LunarGlide LiuXiang Storm Fly running jacket.

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.

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.

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.'s%20Trademark%20Law.pdf

Edward Lehman 雷曼法学博士
Managing Director 董事长

LEHMAN, LEE & XU China Lawyers

Lehman, Lee & Xu is a top-tier Chinese law firm specializing in corporate, commercial and intellectual property matters. For further information on any issue discussed in this edition of China Law Digest , or for all other enquiries, please e-mail us at or visit our website at

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