Changing Environment in Addressing Online Counterfeiting.

Infringements of IP rights attract the attention both of the Chinese governmental authorities and Chinese courts. While the governmental authorities are taking more actions to address online infringements of IP rights and more regulatory measures to restrict online trading in health-related items, Chinese courts are issuing progressive decisions to clarify the duty of care trading platforms have in responding to complaints by IP owners.

The following is a quick review of newly issued rules and regulations governing infringements of IP rights and the decisions in some important IP rights infringement cases.

Q: What’s different about the newly revised Trademark Law and The Implementing Rules?

A: According to the newly amended article 56(5) of The Trademark Law, a party which “intentionally …..provides facilitating conditions, thereby assisting another to infringe” will incur secondary liability for trademark infringements. Additionally, according to article 75 of the Implementing Rules, an online commodities trading platform may be subject to secondary liability as a result of these new laws.

The new provisions don’t introduce new obligations for a trade platform, although they clearly help to emphasis the legislature’s concerns over online trademark violations.

Q: What’s this I’ve heard about the China FDA’s newly drafted rules on Online Sales of Health-Related Products?

A: Pursuant to the draft rules, online sales of food, health food, cosmetics and medical equipment are governed by these regulations and the manufacturers and wholesalers of such products must apply for permits from the FDA before they market such products online.. Additionally, manufacturers and wholesalers will be prohibited from selling these products directly to customers.

Q:  How will the new SAIC campaign effect online counterfeiting?

A: On June12, 2014 the State Administration for Industry and Commerce issued a notice emphasizing an enforcement campaign targeting online counterfeiting, especially on of electronic goods, children’s goods, auto parts, clothing, cosmetics and agricultural goods. The new regulations should make it easier for brand owners to enforce Intellectual Property, and stop online counterfeiting.

Q:  What is the National Leading Group action plan?

A: Several days after the notice of SAIC, the National Leading Group for Fighting Intellectual Property Rights Infringements announced an online anti-counterfeiting action plan. Pursuant to this action plan, from June of this year (2014), agencies are to focus on the following objectives:

(1)   Supervising key websites and e-commerce platforms;

(2)   Shutting down illegal websites;

(3)   Warning and educating business operators and consumers; and

(4)   Encouraging information sharing and cooperation between sectors, regions and law enforcement agencies.

The action plan pays special attention to the following:

(1)   Enhanced focus on cross-border enforcement initiatives to halt online infringements, with Customs, China Post and the Ministry of Public Security meant to work with each other and corresponding agencies outside China;

(2)   Development of advanced technology to improve authorities’ enforcement capabilities and to create an effective e-commerce supervision network, tracking and tracing technologies, etc; and

(3)   Improving internet governance, regulations and standards, including through the development of judicial interpretations on issues unique to online enforcement, such as evidence collection processes, and fixing gaps in relevant laws and regulations.

Q: What actions are being taken by the SIPO?

A: As of May, 2014 the State Intellectual Property Office commenced a five-month campaign to support complaints by patent owners in their efforts to have advertisements for infringing goods taken down by Chinese trade platforms. And the campaign is aimed at encouraging local intellectual property offices to assist by providing advice and instructions to trade platforms to take down offending ads where infringements are deemed clear, and also to mediate disputes where the existence of an infringement is less clear.

Q:  Have recent court decisions effected how counterfeiting is handled on online trade platforms?

A:

(1)     E-Land (Shanghai) Clothing Trade LLC VS. Zhejiang Taobao Internet LLC (2013), lowers the evidentiary requirements for IP holders when the circumstances of an online sale make it clear that the goods are infringing an IP right.

(2)     The “safe harbor” defense which permits trade platforms to avoid liability if they remove infringing offers may not be applied where the infringers are repeat offenders on that platform. As a result, platforms will need to do more than just delist infringing sales each time they pop up. Stronger actions will need to be taken, and may include termination of the infringer’s account.

(3)     Zhejiang Pan-Asia E-commerce LLC VS. Beijing Baidu Internet LLC (2012). The court suggested that internet platforms be more more flexible in their requirements and should help verify information as needed to support take-down requests.

(4)     Beijing Sanmianxiang Copyright Agency VS Beijing Qihoo Tech LLC (2014), Beijing Qike Fantasy IT LLC VS. Guangdong Aufei Cartoon Culture Inc (2014), Shanghai Wenqin Recreation LLC VS. Zhejiang Taobao Internet LLC (2012), Shanghai HeWeiTang Medical Devices LLC VS. Zhejiang Taobao Internet LLC (2012), Hangzhou Guxiu Clothing LLC VS. Zhejiang Taobao Internet LLC (2010).

All support the position that the standard to determine whether a trade platform bears “fault” includes not only actual knowledge, but also constructive knowledge.

Finally, the famous Chinese e-commerce platform Alibaba announced that it will be introducing a three-strike rule to strengthen the deterrence against repeat offenders on its Alibaba and Aliexpress platforms. Specifically, the first strike will be a warning letter, and the second will be removal of the listings for seven days, and the third will be closing the account of the infringer.

Published by admin on August 1st, 2014 tagged China News | 3 Comments »

After an Arrest in China, what are the Rules for Pressing Charges?

There is no “Preliminary Hearing” in China criminal procedure. The Initial investigation is carried out by the prosecutor (Called The People’s Procuratorate in China), who will then decide if the case is deserving of criminal charges

After the prosecutor has concluded its investigation of a case, the facts should be clear and the evidence reliable and sufficient. It shall make a written recommendation for prosecution, which shall be transferred, together with the case file and evidence, to the People’s Procuratorate at the same level for examination and decision.

If it is discovered during investigation that a criminal suspect’s criminal responsibility should not have been investigated, the case shall be dismissed; if the criminal suspect is under arrest, he shall be released immediately and issued a release certificate, and the People’s Procuratorate which originally approved the arrest shall be notified.

The Prosecutor shall make a decision within one month on a case that a public security organ has transferred to it with a recommendation to initiate a prosecution; an extension of a half month may be allowed for major or complex cases.

When examining a case, the Prosecutor shall interrogate the criminal suspect and heed the opinions of the victim and of the persons entrusted by the criminal suspect and the victim (legal counsel).

In examining a case that requires additional investigation, the People’s Procuratorate may remand the case to a public security organ for supplementary investigation or conduct the investigation itself.

In cases where supplementary investigation is to be conducted, it shall be completed within one month. Supplementary investigation may be conducted twice at most.  When supplementary investigation is completed and the case is transferred to the People’s Procuratorate, the time limit for examination and prosecution shall be recalculated by the People’s Procuratorate.

With respect to a case for which supplementary investigation has been conducted, if the People’s Procuratorate still believes that the evidence is insufficient and the case does not meet the conditions for initiation of a prosecution, the People’s Procuratorate may decide not to initiate a prosecution.

When a People’s Procuratorate considers that the facts of a criminal suspect’s crime have been ascertained, that the evidence is reliable and sufficient and that criminal responsibility should be investigated according to law, it shall make a decision to initiate a prosecution and shall, in accordance with the provisions for trial jurisdiction, initiate a public prosecution in a People’s Court.

A decision not to initiate a prosecution shall be announced publicly, and the decision shall, in written form, be delivered to the person who is not to be prosecuted. If the said person is in custody, he shall be released immediately.

If the People’s Procuratorate decides not to initiate a prosecution with respect to a case that involves a victim, it shall send the decision in writing to the victim.

If the victim refuses to accept the decision, he may, within seven days after receiving the written decision, present a petition to the People’s Procuratorate at the next higher level and request the latter to initiate a public prosecution.

If the People’s Procuratorate upholds the decision not to initiate a prosecution, the victim may bring a lawsuit to a People’s Court. The victim may also bring a lawsuit directly to a People’s Court without presenting a petition first.

Published by admin on July 18th, 2014 tagged China News | 5 Comments »

2014 Intellectual Property Award Winners Announced

United Kingdom – 8 July 2014 – Winners of the prestigious 2014 Acquisition International Magazine Intellectual Property Awards have been announced today.

Voted for by a worldwide network of professionals, advisers, clients, peers and business insiders, the Acquisition International Magazine Intellectual Property Awards celebrate the individuals and firms who are involved in driving the intellectual property field – lawyers, agents, consultants, advisers and service providers – and thus playing a vital role in advancing innovation.

The awards, open to businesses from any sector or region, are given entirely on merit, acknowledging fantastic achievement over the course of the past year. Winners are nominated and voted for by their peers and clients.

Speaking about the awards, awards coordinator, Charlotte Abbott said: “We’re honoured to recognise some of the most committed individuals and firms working in intellectual property today. The winners can be proud of the important work they have been doing over the past year.”

Lehman, Lee & Xu has been awarded “Top Tier IP Law Firm of the Year- China.” We believe this distinction is a reflection of the dedication and knowledge of our Intellectual Property team. Lehman, Lee & Xu serves Trademark and Patent protection and litigation in addition to providing full legal services in mainland China.

Published by admin on July 9th, 2014 tagged China News | 7 Comments »

The Rights to Legal Counsel for an Arrested or Detained Person in China

After a criminal suspect is interrogated by an investigation organ for the first time or counting from the day on which compulsory [detention] measures are adopted against him, he may appoint a lawyer to provide him with legal advice and to file petitions and complaints on his behalf.

However, it is important to remember there is no Attorney-Client privilege in China. All attorney to client communications may be monitored or subject to discovery in court.

If the criminal suspect is arrested, the appointed lawyer may apply on his behalf for obtaining a guarantor pending trial. If a case involves State secrets, the criminal suspect shall have to obtain the approval of the investigation organ before appointing a lawyer. The appointed lawyer shall have the right to find out from the investigating organ about the crime the defendant is suspected of, and may meet with the criminal suspect in custody to enquire about the case.

When the lawyer meets with the criminal suspect in custody, the investigation organ may, in light of the seriousness of the crime and where it deems it necessary, send its people to be present at the meeting.

If a case involves State secrets, before the lawyer meets with the criminal suspect, he shall have to obtain the approval of the investigation organ.

A criminal suspect in a case of public prosecution shall have the right to entrust persons as defense counsel from the date on which the case is transferred for examination before prosecution.

A People’s Procuratorate (Prosecutor) shall, within three days from the date of receiving the file record of a case transferred for examination before prosecution, inform the criminal suspect that he has the right to entrust persons as his defenders.

A People’s Court shall, within three days from the date of accepting a case of private prosecution, inform the defendant that he has the right to entrust persons as his defenders.

Published by admin on July 8th, 2014 tagged China News | 5 Comments »

In China, how long can a suspect be held during an ongoing investigation?

The time limit for holding a criminal suspect in custody during investigation after arrest shall not exceed two months. If the case is complex and cannot be concluded within the time limit, an extension of one month may be allowed with the approval of the People’s Procuratorate at the next higher level.

If due to special reasons, it is not appropriate to hand over a particularly grave and complex case for trial even within a relatively long period of time, the Supreme People’s Procuratorate shall submit a report to the Standing Committee of the National People’s Congress for approval of postponing the hearing of the case.

With respect to the following cases, if investigation cannot be concluded within the time limit specified, an extension of two months may be allowed upon approval or decision by the People’s Procuratorate of a province, autonomous region or municipality directly under the Central Government:

  1. grave and complex cases in outlying areas where traffic is most inconvenient;
  2. grave cases that involve criminal gangs;
  3. grave and complex cases that involve people who commit crimes from one place to another; and
  4. grave and complex cases that involve various localities and for which it is difficult to obtain evidence.

If in the case of a criminal suspect who may be sentenced to fixed-term imprisonment of at least ten years, investigation of the case can still not be concluded upon expiration of the extended time limit, another extension of two months may be allowed upon approval or decision by the People’s Procuratorate of a province, autonomous region or municipality directly under the Central Government.

Published by admin on July 2nd, 2014 tagged China News | 5 Comments »

Lehman, Lee & Xu’s Media & Advertisement Practice Recognized as Global 100

Lehman, Lee & Xu is excited to announce its recognition as a Global 100 firm in the practice of China Advertisement in 2014. Mr. Edward Lehman, managing partner at the firm for over 22 years is proud the firm has been recognized as a true leader in the field. The Award has been determined through a comprehensive nomination and voting process among industry players. Top firms are recognized based on analysis of quality of international and domestic work in the legal practice of advertisement in China. Independent judges base the selection of winners on:

Lehman, Lee & Xu’s advertising law specialists offer complete legal service to a broad spectrum of advertising clients on a wide diversity of matters. The firm has advised some of the biggest players in the industry in some of the advertising’s most significant and intricate matters. The sizzling pace of changed market conditions, the magnitude of intense competition and a tightly controlled media environment in China have further prioritized advertising lawyers such as Lehman, Lee & Xu with on-the-ground and meticulous local knowledge to offer you cutting-edge and industry-focused legal expertise.

The firm is experienced in providing advice on changes in laws, regulations and policies and on how those changes affect our clients’ interests. Our dedicated advertising team also advises on all types of marketing contracts and content issue and is regularly involved in brand selection, protection and maintenance work. On the contentious side, we bring to bear the tremendous skills of our market-leading dispute resolution practice.

Our attorneys’’ sophisticated understanding of our clients’ marketing priorities and the dimensions of their business needs ensures that we are well placed to provide comprehensive and individually tailored solutions to the standard of professionalism, quality and timeliness essential to support the business and legal complexities encountered on a day to day basis in China.

The firm has been operating in China for the past 22 years and has been managed by American Edward Lehman throughout that time. Mr. Lehman’s extensive experience and our quality team of Chinese and English speaking attorneys, places Lehman, Lee & Xu among the elite firms in China.

Published by admin on June 26th, 2014 tagged China News | 6 Comments »

New trend on streamline the examination and approval formalities for Foreign Investment projects in China

To carry out the spirit of deepening reform of the administrative examination and approval system, optimizing the management and increasing the efficiency of examination and approval, on May 28th, the Ministry of Commerce issued an Announcement on the Launch of the Advancement in the examination and Approval of Foreign-Invested Projects. By this Announcement, the Ministry of Commerce will launch a pilot work to simplify the formalities of examination and approval for 3 months, which will be end on August 31st.

According to the Announcement, except for the foreign-direct sales projects, all the other examination and approval matters administrated by the commerce ministry, such as establishment foreign invested company, change the investor, the business scope, transfer company share etc. will be covered in this simplifying pilot work. The scope that will be streamlined in this pilot work will include: simplifying the application documents and reducing application formalities.

The aim of this Announcement is to provide convenient to the applicant by cutting down the time consumption for all the applications. By this announcement and the expectation of the result of this pilot work, we may expect that in the future, the  examination and approval for foreign invested projects that governed by the Ministry of Commerce will be more and more simple.

Published by admin on June 25th, 2014 tagged China News | 12 Comments »

Controversy surrounds the China Lawyers Bar Association New Draft Rules

The all China Lawyers Bar Association (ACLA) is drafting a revised ”Code of Conduct for Lawyers” and accompanying ”Punishment Rules of Lawyers Bar Association for Violations.” The drafts have been distributed to a small group of ACLA members to collect opinions and comments. However, some of the small number of lawyers selected have posted the drafts to a wider audience online, generating controversy within the China legal profession.

The aim of the rules is to ban lawyers from posting “aggressive or inappropriate” comments about cases, or attempting to use public opinion to influence the outcome of a case or to attack the country’s legal system.

Officially, it is said that the main objective of the two drafts is to limit some lawyers’ attempts to obstruct justice though exposing the details of a case over the Internet and though other media or by making inappropriate comments about a case or public events in the public arena. There have been well known cases in China in which public opinion expressed over the internet may have contributed to affecting the outcome of a well known legal case.

However, critics of the rules argue that the drafts lack enforceability. And others believe that the draft aims to deprive lawyers of the basic rights of a citizen.

On the one hand, restricting the voice of lawyers online may hamper the development of China’s legal system by preventing real issues from coming to the attention of the public. On the other hand, a system of mob rule, where laws are overturned by appeal to the mass of netizens is itself not conducive to the development of a system based on rule of law. Both regulators and lawyers have a responsibility to take both sides of the issue into account. Rules should be made to be as fair as possible, and lawyers have a duty to recognize that they play a special role in a society based on rule of law, and that they must always behave responsibly and in the interests of justice.

Published by admin on June 23rd, 2014 tagged China News | 4 Comments »

What are the rules governing detention and interrogation before official arrest?

When detaining a person, a public security organ must produce a detention warrant.

Within 24 hours after a person has been detained, his family shall be notified of the reasons for detention and the place of custody, except in circumstances where such notification would hinder the investigation or there is no way of notifying them.

A public security organ shall interrogate a detainee within 24 hours after detention. There is no right to an attorney. If it is found that the person should not have been detained, he must be immediately released and issued a release certificate.

If the public security organ deems it necessary to arrest a detainee, it shall, within three days after the initial detention, submit a request to the People’s Procuratorate (The Prosecutor’s Office). Under special circumstances, the time limit for submitting a request for examination and approval may be extended by one to four days.

As to the arrest of a major suspect involved in crimes committed from one place to another, repeatedly, or in a gang, the time limit for submitting a request for examination and approval may be extended to 30 days.

The People’s Procuratorate shall decide either to approve or disapprove the arrest within seven days from the date of receiving the written request for approval of arrest submitted by a public security organ.

If the People’s Procuratorate disapproves the arrest, the public security organ shall, upon receiving notification, immediately release the detainee and inform the People’s Procuratorate of the result without delay.

Published by admin on June 18th, 2014 tagged China News | 6 Comments »

Appeal against a Judgment in a China Criminal Case

If a local People’s Procuratorate at any level believes that there has been a definite error in a judgment or order of first instance made by a People’s Court, it shall present a protest to the People’s Court at the next higher level.

If the victim or his legal representative refuses to accept a judgment of first instance made by a local People’s Court at any level, he shall, within five days from the date of receiving the written judgment, have the right to request the People’s Procuratorate to present a protest.

The People’s Procuratorate shall, within five days from the date of receiving the request made by the victim or his legal representative, decide whether to present the protest or not, and give a reply.

Qualified Appellants

The defendant, the private prosecutor (citizen prosecutor in certain small criminal matters not pressed by the state) or their legal representatives are qualified Appellants.

If the defendants or the private prosecutors are juveniles or mentally disabled, so that they can’t participate in the procedure normally, their legal representatives shall be entitled to decide whether to appeal on their own discretions. Defense counsel or near relatives of the defendant may, with the consent of the defendant, file an appeal.

Time Limit for Appeals

The time limit for an appeal or a protest against a judgment shall be 10 days and the time limit for an appeal or a protest against an order shall be five days; the time limit shall be counted from the day after the written judgment or order is received.

The Scope and Methods of Appeal Procedure

A People’s Court of second instance shall conduct a complete review of the facts determined and the application of law in the judgment of first instance and shall not be limited by the scope of appeal or protest.

A People’s Court of second instance shall form a collegial panel and open a court session to hear a case of appeal. However, if after consulting the case file, interrogating the defendant and heeding the opinions of the other parties, defense counsel and agents ad litem, the collegial panel thinks the criminal facts are clear, it may decide not to open a court session.

However, a People’s Court of second instance must open a court session and form a collegial panel under the following circumstances:

In the trial of a case appealed by a defendant, the People’s Court of second instance may not increase the criminal sentence on the defendant. If appealed by the prosecutor, an increase in the sentence is possible.

Published by admin on June 16th, 2014 tagged China News | 5 Comments »