ELLALAN – Firm Updates

China Requires Signing of Commitment of Good Faith When Applying for Well-Known Status for Trademarks

·           From 1 September 2021, applicants and their trademark agents must sign and seal a Letter of Commitment for the Good Faith of the Parties Requesting the Protection of Well-Known Trademarks (当事人请求驰名商标保护诚信承诺书) when requesting well-known status for Chinese trademarks.

·           By signing the Letter, both the applicant and trademark agent acknowledge that:

o     They know the relevant provisions of the “Trademark Law”, “Implementation Regulations of the Trademark Law” and “Regulations on the Recognition and Protection of Well-Known Trademarks”;

o     The relevant information and evidential materials provided are true, accurate, and complete; and

o     There are no dishonest acts with the opposing party, and no other acts of fraudulently obtaining protection of well-known trademarks.

Heightened scrutiny in technology companies as Chinese authorities issue draft rules over unfair competition and critical data handling

• On 17 August, the State Administration for Market Regulation (SAMR) issued proposed regulations aimed to ban unfair competition and restrict companies’ use of user data.
• The draft regulations demonstrate the determination of the Chinese authorities in setting clear rules for engagement for online competition.
• Under these draft regulations, an internet operator “must not implement or assist in the implementation of unfair competition on the Internet, disrupt the order of market competition, affect fair transactions in the market”.
• Also, operators must conduct security inspections and risk assessments annually, hence priority needs to be given to purchase secure and credible network products and services.
• When promulgated, there will be significant regulatory burdens for transaction platforms, e-commerce marketplaces and shoppable short video apps.

Declaratory Judgement Actions to Confirm Non-infringement of Invalidated Patents Now Possible

• Parties may initiate judicial relief procedures if they disagree with an invalidation decision of the patent right.
• Entities which disagree with invalidation decisions only have the right to commence judicial relief procedures after the patentee has exhausted all judicial remedies.

ESG gains traction in China tech

·         The Chinese government and regulators have imposed tougher environmental requirements on all sectors, including tech firms.

·         From the newly released guidelines by the China Securities Regulatory Commissions (CSRC) in May 2021, listed companies are required to make ESG disclosures in their annual and semi-annual reports. Such disclosures include providing transparency on environmental breaches, efforts in reducing carbon emissions and other ESG initiatives.

·         Although it may seem that only the utilities, transportation, energy and commodity sectors are immediately impacted, there are also important implications for the tech sector in China’s carbon neutrality target.

Chinese Court says cryptocurrency is not protected by law

·         While delivering a judgment in a case related to the fraudulent purchase of crypto, the Supreme Court of the northern Shandong province in China stated that “investing or trading cryptocurrency is not protected by law”.

·         Similarly, an intermediate court in Jinan ruled in January 2021 that the plaintiff’s cryptocurrencies are not assets that have any legal status.

·         These statements in court judgments could set a precedent for other courts in China that investment and trading in digital assets is outlawed.

·         Centralized trading and financial payments related to digital currencies have been illegal in China since 2013.

China publishes protection measures for critical information infrastructure

·           On 17 August 2021, the PRC State Council published Security Protection Measures for Critical Information Infrastructure (CII) effective as of 1 September 2021.

·           CII refers to important network infrastructure and information systems that are used in various sectors, including but not limited to public communications and information services, energy, transportation, water conservancy, finance, public services, e-government affairs and national defence technology.

·           According to the Measures, sectoral regulators shall formulate rules to identify CII within their jurisdictions, notify operators of the identified CII and record the same with the Ministry of Public Security as soon as practicable.

Suspended Prison Sentence in Shanghai for Criminal Trademark Infringement For Repackaging of Authentic Ferrero Rocher Chocolates

·           The Shanghai Third Intermediate Court released a ruling on 19 August 2021 holding that the repackaging of authentic Ferrero Rocher chocolates without authorization is criminal trademark infringement. 

·           The defendant hired others to manufacture Ferrero Rocher packaging bearing Ferrero’s trademarks without authorization.

·           This criminal TM infringement case was not initiated by Ferrero Rocher. The Court ruled that the defendant was guilty of illegally manufacturing products bearing registered trademarks and was subjected to a suspended sentence and a penalty of RMB 300,000 to the court.