The China Law News keeps you on top of business, economic and political events in the China.
Blawg | Newsletter Archiv | |

In the News

Proposed Changes to Chinese Trademark Laws

Recognizing the economic importance of a well-functioning trademark system and in view of recent high-profile trademark disputes, such as the widely publicized iPad dispute which was reputedly settled for a payment of about US$60million,  the Chinese government has been considering a further revision of the Trademark Law which has been open for public consultation through January.

The draft amendment  addresses some important issues for applicants. It seeks to make trademark registration faster and more convenient, increases punishments for infringement, includes additional provisions to prevent unfair competition, and extends protection to additional types of non-traditional marks.

A common complaint from foreign and domestic parties is that Chinese law does not provide adequate remedies for intellectual property infringement. The new draft law would raise the ceiling for fines imposed on trademark violators in circumstances where the financial losses and gains from the infringement cannot be determined. This is a significant issue because the absence of a discovery process under Chinese law means that it can be very difficult to establish the amount of any losses to the trademark owner or amount of any illegitimate profits made by an infringer. Repeat infringers and those who intentionally assist an infringer would be subject to increased penalties.  The amendments would also permit awards of punitive damages.

The trademark registration process currently takes up to three years to complete and requires separate filings to obtain protection in each class of wares and services. The proposed amendments are intended to shorten the registration process to less than 10 months, and would allow a single application to be filed to encompass multiple international classes. This would make the registration process substantially cheaper.

The amendments would also introduce new obstacles to trademark squatting and malicious trademark registrations and give additional protection to the owners of unregistered but renowned marks.  In a further effort to block unfair competition, the amendments would also limit the grounds on which a third party may challenge pending applications, and would limit the range of parties who are entitled to make such a challenge. These changes are all intended to block unfair trading practices such as bad faith applications to register an existing trademark and vexatious challenge proceedings. 

Finally, the amended law would permit sounds, smells, colors and moving objects to be registered as trademarks, if they satisfy the other requirements for registerability.

There are more than 10 million trademark filings on record with the Chinese State Intellectual Property Office of China and more than seven million of these are already registered. With the continuing growth in the economic importance of the PRC both as a manufacturing location and as a consumer market, it is increasingly critical for intellectual property owners to take proactive steps to protect their position in the Chinese market.

MBM provides advice on all areas of intellectual property, including advice on the registration, enforcement and defense of international rights. Please contact us for further information.

Top Legislature Reviews Laws to Cover PE Funds Industry

(Beijing) – The country's legislature has reviewed a draft amendment to the Law on Securities Investment Funds that would broaden its application to domestic private equity funds. The amendment was reviewed by the NPC's Standing Committee the second time on October 24, after public consultation which followed its first reading in June. Despite rapid development over the past few years, the PE funds industry still has no unified national law or regulation governing it.

The Law on Securities Investment Funds was introduced in 2004 when equity investments in unlisted companies were rare. It does not cover PE and venture capital investment funds. Administrative control over PE funds has been in the hands of the nation's top economic planner, the National Development and Reform Commission, since 2005. That year, it co-drafted with nine other central government departments an interim policy to prop up high-tech startup companies by developing venture capital investment institutions to help them finance. It has rolled out two more policies since last year to consolidate its authority over the PE funds business by imposing a mandatory requirement on all equity investment enterprises to file with NDRC or a designated provincial authority.

The China Securities Regulatory Commission, on the other hand, is said to be vying for control over the business, on the grounds that PE investments are more closely tied to securities investment in listed companies than to national economic policies. Some legislators back the argument. “Macro-economic policymakers should focus on the holistic picture of national development and refrain from interfering with regulations on a micro level”, Wu Xiaoling, Deputy Director of the Financial and Economic Affairs Committee under the NPC, said at the amendment's second review. There were also worries that the draft had avoided addressing a complicated issue about which regulatory body's command prevails if a conflict arises.

Other concerns debated at the review included punishment to rule breakers and whether there should be restrictions on regulatory officials working in companies they supervised. The draft proposes punishing those responsible for a transgression with an administrative warning on top of a fine ranging from 30,000 to 300,000 yuan.

Some legislators said the warning should be replaced by barring the violator from executive positions in the business for five years. "A warning is too light a punishment to impose any real deterring effect," NPC delegate Jin Shuoren said. "It is vitally important to strengthen industrial disciplines by revoking the transgressors' executive qualification."

Separately, delegate Fang Xin said the amendment should have another provision to defend the integrity of regulatory agencies by preventing individual regulators from working in companies they supervised for a period of time.

The PE funds industry has experienced explosive development recently. Last year alone, a record 230 PE funds sprang up, raising more than 252 billion yuan, up 40 percent from the previous year, said Dai Xianglong, chairman of the country's largest institutional investor, the National Council for Social Security Fund.

Tougher penalties to put taxi drivers on the right track

Beijing taxi drivers have reacted angrily to strict new penalties aimed at cleaning up the industry. According to rules announced by transport authorities, cabbies now face a ban of up to three years for foul play ― or a lifetime ban in extreme cases.

The penalties are for such offenses as purposely ignoring passengers, fixing the meter and bargaining with a commuter over a fare.

Blacklisted drivers will have their licenses revoked for life, the city government said, without elaborating on what would land a driver on the list.

Passengers can report drivers by dialing 96123.

Although intended to put a stop to rogue behavior ― and guarantee that more taxis are available during peak times ― drivers say the punishments are excessive.

"These regulations might be meant to put the industry back on track, but they're way too tough," said veteran cabbie Wan Weidong, who added that taxi companies and authorities already heap pressure on taxi drivers.

For example, he said, to run a taxi during peak hours or severe weather increases the risk of an accident, the cost of which usually falls on the driver.

"A small rear-ender and a whole day's work can go up in smoke," he said. "That's why many think it's not worth taking the chance and stay off duty."

In addition, Wan said, in heavy congestion running a taxi is more like a public service. "Sometimes you spend 20 minutes going 2 kilometers. With the price of fuel rising, you're simply losing money."

Zhou Quanyi, a cabbie in his 40s, said he pays a monthly franchise fee of about 4,500 yuan ($724) and that "an illness or traffic accident would mean I was working for nothing".

Another driver, Wang Shibin, said he often stops for breaks by the roadside after hours of driving. "It's ridiculous that a commuter could complain that I reject passengers and I could be banned," he said.

The city's transport commission and transport law enforcement team jointly devised the penalties.

Regulations urge taxi drivers and companies to strengthen self-monitoring and guarantee taxis are on the road, especially during peak hours and at prosperous business districts, airports and train stations.

"I understand it's difficult to make money as a taxi driver, but at least they should have a professional moral code," said Wang Xiande, a 36-year-old Beijing resident. "It's really annoying when you're ignored several times, especially when you're in a hurry."

Some netizens posting on Sina Weibo, the popular micro-blogging website, were also in support of the penalties.

"They really need to be regulated like this," one wrote. "After all, the taxi industry is a service industry. The taxi companies and drivers cannot only focus on their own interests."

However, Beijing attorney Yi Shenghua said he sympathizes with the drivers.

"These measures are too strict and unfair," he said. "They won't reform the overall management system but only solve the problem in the short term."

If a cabbie has a good reason to reject a passenger, such as they are about to change shift, they should not run the risk of a three-year ban, said the attorney for Yingke Law Firm.
It will also be difficult to obtain evidence of a violation, he said, and warned: "Simply threatening taxi drivers may even result in extreme events."

To fundamentally fix the problem, Wan suggested lowering the driver's monthly fees and increasing the tariff during peak hours.

"It requires the efforts of both individual taxi drivers and taxi companies to crack this nut," he said.

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

2012 LEHMAN, LEE & XU Christmas Party

© Lehman, Lee & Xu 2013.
You may share this document with your friends or colleagues, either by forwarding this message to them (provided that the contents of this message, including all notices, are preserved in their entirety), or by directing them to the online edition at here. You may use short excerpts from this document in your own work (provided that each such excerpt shall not exceed three sentences in length; no more than twenty percent of this document, by word length, may be excerpted; no more than twenty percent of your work, by word length, may consist of such excerpts; each such excerpt shall be attributed to Lehman, Lee & Xu, with such attribution to include the Internet address of this document’s online edition; and your work shall not disparage Lehman, Lee & Xu). All other rights reserved.
This document has been created for educational purposes for clients, potential clients and referrers of legal services to Lehman, Lee & Xu, and to alert readers to the services provided by Lehman, Lee & Xu. It is not intended to serve as definitive legal advice, and should not be relied upon as such. Lehman, Lee & Xu does not endorse any personal opinions which may be contained herein.
If you would like us to send you new issues by e-mail each month, please click here to subscribe. There is no charge for this service. If not, please click here to unsubscribe (Please provide the correct Email address which you received our message or forward the message which you received to us for further process).