09 July 2021

China Regulatory Legal Round Up | May 2021

Foreign Investment and General Corporate

The Supreme People’s Court released Opinion on the Pilot Program for Recognition and Assistance in Bankruptcy Proceedings of HK SAR

On May 11, 2021, the Supreme People’s Court (“SPC”) released the Opinion on the Pilot Program for Recognition and Assistance in Bankruptcy Proceedings of Hong Kong Special Administrative Region (《关于开展认可和协助香港特别行政区破产程序试点工作的意见》) (“Opinion”) (see here for the full text in Chinese) which further improves the judicial assistance system between the Mainland and the HK SAR. The Opinion has come into immediate effect since the date of release.

The Opinion is enacted in accordance with the Civil Procedure Law, the Corporate Bankruptcy Law and other relevant laws. It provides clear guidelines with respect to, among other things, case acceptance, examination conditions, objects to be admitted, methods of assistance, and distribution of assets under bankruptcy.

The Ministry of Culture and Tourism issued the Notice on Adjustments to the Approval of Entertainment Venues and Internet Access Service Business Premises

On May 27, 2021, the Ministry of Culture and Tourism (“MCT”) released the Notice on Adjustments to the Approval of Entertainment Venues and Internet Access Service Business Premises (《关于调整娱乐场所和互联网上网服务营业场所审批有关事项的通知》) (“Notice”) (see here for the full text in Chinese). The Notice came into immediate effect upon the date of release.

The Notice follows the State Council’s previous decision on the removal of restrictions from foreign investment in the entertainment venues sector. To apply to operate an entertainment venues business, a foreign investor will need to file an application with the provincial culture and tourism authorities, and the application materials, establishment conditions and procedures will be the same as those for domestic investment.

Data Protection

CAC releases Circular on 105 Apps that Infringe User Rights and Interests

On May 21, 2021, the Office of the Central Cyberspace Affairs Commission  (“CAC”) released, on its official website, the Circular on the Illegal Collection and Use of Personal Information of 105 Apps including Tik Tok (《关于抖音等105款App违法违规收集使用个人信息情况的通报》) (see here for the full text in Chinese). In response to the heavily complained about misuse of personal information by various Apps, including illegal accessing of information, collection of information beyond what is necessary, and excessive demands for authorization of access, the CAC has examined the collection and use of personal information by some Apps that are widely used by the public. These include short video apps, internet browsers, recruitment platforms and practical tools. The Circular exposes Tik Tok, Kwai, Baidu, UC Browser and others, and states that most of the Apps “collected personal information unrelated to the services offered in violation of the principle of necessity”.

On May 10, 2021, the CAC also circulated a Circular on the Illegal Collection and Use of Personal Information by 84 Apps including WeSecure (《关于腾讯手机管家等84款App违法违规收集使用个人信息情况的通报》) (see here for the full text in Chinese).

Both of the above two law enforcement circulars were released following the Provisions on the Scope of Necessary Personal Information for Common Types of Mobile Internet Applications (《常见类型移动互联网应用程序必要个人信息范围规定》) (see here for the full text in Chinese), which came into effect on 1 May 2021. The necessity of personal information processing has become a hot topic for regulation.

We suggest that enterprises in China pay close attention to the law enforcement activities of Apps, follow the principle of necessity and fully perform their notification obligations in the process of collecting and using users' personal information.

CAC publishes Several Provisions on the Management of Automobile Data Security (Draft for Comment)

On May 12, 2021, CAC released, on its official website, Several Provisions on the Management of Automotive Data Security (Draft for Comment) (《汽车数据安全管理若干规定(征求意见稿)》) (Provisions”) (see here for the full text in Chinese) to solicit public comments.

The Provisions, comprised of 21 articles, set out the regulatory requirements for the collection, analysis, storage, transfer, inquiry, utilization, deletion, or provision of personal information or important data to overseas parties during the time when an automobile is being designed, manufactured, sold, operated, maintained and managed within the territory China. They include the scope of important automobile data, principles for information processing, and rules for cross-border data transfer. The Provisions apply to a wide range of entities, including automobile manufacturers, component and software suppliers, distributors, maintenance organizations, online car-hailing companies, insurance companies and so on.

We suggest that enterprises in China pay close attention to the enactment of the Provisions and ensure that their collection and processing of important data and personal information relating to automobiles complies with the laws and regulations.

IP

The SPC released a White Paper on Intellectual Property Protection by Chinese Courts (2020) and announced Typical Intellectual Property Cases in 2020

On April 22, 2021, the SPC released the White Paper on Intellectual Property Protection by Chinese Courts (2020) (《中国法院知识产权司法保护状况(2020)》) (“White Paper”) (see here for the full text in Chinese) and announced the top 10 intellectual property cases for 2020, along with 50 typical intellectual property cases in 2020 (see here for the full text in Chinese). It demonstrates, from different perspectives, the achievements of Chinese courts in intellectual property cases in the past year.

According to the White Paper, in 2020 Chinese courts accepted a total of 525,618 new intellectual property cases, including first and second instance applications and applications for retrial. 524,387 intellectual property cases were concluded in 2020. These figures represented an increase of 9.1 percent and 10.2 percent respectively from 2019. The SPC issued 10 judicial interpretations and regulations on trade secrets, patent prosecution and invalidation, internet intellectual property, criminal protection of intellectual property, and evidence in civil intellectual property cases, which have clarified the criteria for trials and the application of laws, unified judicial standards, and strengthened protection of intellectual property and punishments for infringement.

The SPC issued its Outline of the Annual Report on Intellectual Property Cases (2020)

On March 3, 2021, the SPC released the Interpretation of the Application of Punitive Damages in the Trial of Civil Cases of Intellectual Property Rights Infringement (《关于审理侵害知识产权民事案件适用惩罚性赔偿的解释》) (“Interpretation”) (see here for the full text in Chinese). The Interpretation came into force on 3 March 2021.

On April 26, 2020, the SPC issued the Outline of the Annual Report of the SPC on Intellectual Property Cases (2020) (《最高人民法院知识产权案件年度报告(2020)摘要》) (“Report”) (see here for the full text in Chinese), which provides an overview of the SPC’s intellectual property cases in the past year.

The Report shows that in 2020 the SPC accepted a total of 5,390 new intellectual property cases and concluded 5,006 intellectual property cases. New intellectual property cases increased significantly by 40.2 percent over the previous year. Patent and trademark cases increased by 46.6 percent and 54.4 percent respectively from 2019. Patent and trademark cases continued to make up the largest share of the cases accepted by the SPC, accounting for 52.5 percent and 27.6 percent of the total respectively.

The China National Intellectual Property Administration issued a White Paper on Intellectual Property Protection in China (2020)

On April 25, 2021, the China National Intellectual Property Administration (“CNIPA”) issued the White Paper on Intellectual Property Protection in China (2020) (《2020年中国知识产权保护状况》) (“CNIPA White Paper”) (see here for the full text in Chinese). It is a summary of China’s practices and progress in intellectual property protection and the effects of work in this area since 2020. 

The CNIPA White Paper shows that, in accordance with the strategy of comprehensively advancing the rule of law, relevant departments have fulfilled their responsibilities by improving laws and regulations relating to intellectual property, and that progress has been made in the legalization of intellectual property protection. In 2020, China revised and issued four laws and regulations, six judicial interpretations, more than 20 relevant policies and two national standards relating to intellectual property protection.

The CNIPA White Paper shows a steady increase in the number of intellectual property examinations and registrations, and a remarkable improvement in examination quality and efficiency. In 2020, 530,000 invention patents were authorized, and 5.761 million trademarks and 5.039 million copyrights were registered in China. Chinese applicants filed 7,553 applications for international registration of trademarks under the Madrid Protocol. The examination cycle for high-value patents has been reduced to 14 months, and the average examination cycle for trademark applications has been reduced to four months.

CNIPA issues Provisions on Participation of Technical Investigators in Administrative Rulings on Infringement Disputes over Patent and Integrated Circuit Layout Design (Interim)

On May 7, 2021, the General Office of CNIPA issued the Provisions on Participation of Technical Investigators in Administrative Rulings on Infringement Disputes over Patent and Integrated Circuit Layout Design (Interim) (《关于技术调查官参与专利、集成电路布图设计侵权纠纷行政裁决办案的若干规定(暂行)》) (“Provisions”) (see here for the full text in Chinese). The Provisions include 20 articles, specifying the scope of their application, role and responsibilities of technical investigators, scope for investigator selection, administrative measures, and effective date of the Provisions. According to the Provisions:

  • in handling infringement disputes, CNIPA and local patent authorities may assign technical investigators to participate in administrative adjudication;
  • technical investigators act as support staff in administrative adjudication and have no right to vote on the decision in the case. Their opinions on technical investigations may serve as a reference for the panel in determining technical facts, and the panel are accountable for their own determination; and
  • the parties to a case will be informed of the participation of technical investigators, and technical investigators shall abide by the provisions on recusal and confidentiality and other laws and regulations relating to administrative adjudication.

Labor

Suzhou Industrial Park and Shenzhen Yantian successively launch the Electronic Employment Contract Dispute Settlement Rules

On April 14, 2021, Suzhou Industrial Park officially issued the Suzhou Industrial Park Labor and Human Resources Disputes Arbitration Committee Electronic Employment Contract Dispute Resolution Rules (Trial) (《苏州工业园区劳动人事争议仲裁委员会电子劳动合同争议处理规则(试行)》) (see here for the full text in Chinese), which consists of four chapters and 19 articles. This rule is also the first electronic employment contract dispute resolution rule nationwide.

On May 18, 2021, Shenzhen Yantian also issued the first electronic employment contract dispute settlement rules for Guangdong province - Shenzhen Yantian District Electronic Employment Contract Dispute Settlement Rules (《深圳市盐田区电子劳动合同争议处理规则》) (see here for the full text in Chinese), with a total of 26 articles.

The above two rules include articles that stipulate the requirements for evidence production, certification procedures, and other steps relating to electronic employment contracts. They are of strong practical operation, and have significance as a guide and reference point for judicial practice in electronic employment contract disputes. The rules are also conducive to further optimization of the business environment and the promotion of harmonious and stable employment relations.

****

Should you need any additional information, or if you would like to discuss how recent updates in Chinese law may affect your business, please feel free to contact us.

Disclaimer

This client alert is not intended to be legal advice. Readers should seek specific legal advice from KWM legal professionals before acting on the information contained in this alert.

Key contacts

A Guide to Doing Business in China

We explore the key issues being considered by clients looking to unlock investment opportunities in the People’s Republic of China.

Doing Business in China
Share on LinkedIn Share on Facebook Share on Twitter
    You might also be interested in

    The manner in which China will regulate data security in the automotive industry has become much clearer.

    24 August 2021

    On 1 July 2021, the OECD / G20 Inclusive Framework on Base Erosion and Profit Shifting issued a statement that agreed to the Pillar One and Pillar Two initiatives.

    17 August 2021

    In 2021, China finally ended mandatory animal testing for most types of cosmetics products. However, it is not only rabbits that have reason to rejoice.

    17 August 2021

    A number of offices operated by international organizations in China have been recently visited by Chinese Public Security Bureau (PSB) officers for operating in a non-compliant manner.

    11 August 2021

    This site uses cookies to enhance your experience and to help us improve the site. Please see our Privacy Policy for further information. If you continue without changing your settings, we will assume that you are happy to receive these cookies. You can change your cookie settings at any time.

    For more information on which cookies we use then please refer to our Cookie Policy.