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Combating Malicious Trademark Filings in China

August 18, 2023

In a bid to address the persistent issue of bad-faith trademark filings, the China National Intellectual Property Administration (CNIPA) has been taking decisive action. Notably, in 2021, the CNIPA rejected a staggering 482,000 trademark applications that were deemed to be filed with malicious intent. Building on this progress, the administration continued its efforts in 2022 to combat trademark squatting, freeriding, and the imitation of renowned brand trademarks.

To fortify its enforcement actions, the CNIPA issued the Circular on Continuing to Severely Crack Down on Acts of Malicious Registration of Trademarks in April 2022. This circular aims to intensify measures against trademark filings made without genuine intent of use and crack down on those engaging in unfair competition through malicious applications.

A significant legal precedent was set in the case of Emerson v Xiamen Hemeiquan el al (2021). The Fujian High People’s Court upheld the ruling that numerous malicious trademark applications constituted acts of unfair competition. In response, the court ordered the defendants to cease filing such applications, granted damages of RMB 1.6 million (USD 230,000) to the plaintiff, and held the trademark agency of the applicant jointly liable.

Acknowledging the pivotal role of trademark agencies in facilitating these malicious filings, the CNIPA launched the “Blue Sky” campaign in 2022. Furthermore, the State Administration for Market Regulation (SAMR) issued the Provisions on the Regulation of Trademark Agencies in November 2022. These provisions outline detailed regulations to prevent violations of the Trademark Law by local trademark agencies and enhance the deterrent effect of penalties.

Both the CNIPA and local market regulation administrations have taken action against trademark agencies involved in malicious trademark filings and other unlawful activities. The objective is to curb the influence of these agencies and uphold the integrity of the trademark registration process.

The commitment to combating these infringements remains a priority as China works towards fostering a robust and trustworthy intellectual property landscape.

To discourage bad-faith applications, a new article (Article 4) was introduced in the Trademark Law through a 2019 amendment (You may check our previous post for more information: Highlights of The Amended Trademark Law of PRC) . Article 4 stipulates that malicious applications lacking genuine intent of use should be rejected. In line with this provision, the CNIPA has increasingly cited Article 4 in its decisions throughout 2022. However, this legal change has placed a heavier workload on the CNIPA and has resulted in refusals of defensive marks filed by legitimate rights owners. The interpretation of what constitutes a bad-faith trademark application has often been unclear, causing frustration and challenges for rightful trademark holders.

As a result, successfully overcoming refusals under Article 4 has become more arduous. Legitimate rights owners continue to navigate the obstacles posed by this new system, seeking innovative strategies to protect their trademarks and rights.

While progress has been made in combating malicious trademark filings in China, ongoing efforts are essential to refine the interpretation of the law, strike a balance between protecting legitimate rights owners and deterring bad-faith applicants, and ensure a fair and effective trademark registration system. The commitment to combating these infringements remains a priority as China works towards fostering a robust and trustworthy intellectual property landscape.

IPR protection, trademark registration

Part-time Jobs & Internships for Foreigners in China

August 15, 2023

We often receive inquiries about how foreigners can work in China legally, particularly regarding part-time jobs and internships. Here are some answers to common questions:

A) Can foreign students take an internship in China?

According to Article 30 of the Administrative Measures for the Enrollment and Cultivation of International Students by Schools, international students studying in higher education institutions in China are allowed to participate in work-study programs during their period of study. However, they are not permitted to be employed, engage in business, or participate in other for-profit activities. This means that companies cannot hire foreign students as full-time or part-time employees. Nevertheless, companies can offer internships to foreign students following the proper procedure.

To legally undertake an internship, certain requirements must be met. According to Article 22 of the Administrative Regulations of the People’s Republic of China on the Entry and Exit of Foreigners, if a foreigner holding a study residence permit wishes to engage in off-campus work-study or an internship, they must obtain consent from their school and apply to the Entry and Exit Administration Agency of the Public Security Authorities. The agency will include information about the venue, duration, etc., of the work-study or internship on the foreigner’s residence permit.

If the study residence permit does not specify the necessary information mentioned above, the foreign student is not allowed to undertake any part-time job or internship.

After reviewing the rules of several universities regarding part-time jobs or internships for foreign students, we found that most provisions are similar. The conditions for applying for a part-time job or internship typically include the following:

Being at least 18 years old.
Undergraduate and postgraduate students must be officially registered in the school and have obtained their academic status.
Meeting the passing requirements for each compulsory and elective course.
Complying with school discipline and Chinese laws and regulations during the study.
Being enrolled in the insurance plan for international students.
Completing the necessary procedures for the confirmation of the Medical Examination Records of Foreigners.

There are also regulations regarding the duration and scope of part-time jobs:

During the semester, the weekly working hours should not exceed 6 hours.
During winter and summer holidays, the weekly work-study time should not exceed 12 hours.
Participating in the production of radio, film, and television programs or commercial performances in entertainment venues is not considered a part-time job.
In principle, the part-time job should be relevant to the applicant’s major.

B) Can a foreigner do a part-time job in China?

companies can't hire foreign students as full/part-time employees, but can offer internships by following proper procedure.

According to Article 23 of the Administrative Provisions on Employment of Foreigners in China, the employer in China must be consistent with the employer stated on the employment pass. If a foreigner seeks employment outside the region specified by the permit-issuing department or intends to change employers within the originally stipulated region but for a different occupation, they must complete the employment permit formalities again( for more information, you may check our previous post: Work Permit for Foreigners.)

Generally, this provision is interpreted to mean that foreigners can only work for the company indicated in their work permit, which restricts the possibility of foreigners doing part-time jobs for other companies in China. However, in recent years, with China’s policy of attracting foreign scientific and technological talents, some cities (e.g., Shanghai) have established regulations stating that eligible foreign scientific and technical personnel can engage in part-time work related to their full-time jobs after completing certain formalities.

It’s important for foreigners and employers to adhere to the relevant laws and regulations when considering part-time jobs or internships in China. Consulting with immigration authorities or legal professionals can provide specific guidance based on individual circumstances.

employment law, internship, Labor law, part-time job

Unlocking the Power of an Employment Handbook

August 8, 2023

We all know that having a written employment contract is crucial, but did you know that an Employment Handbook can be even more influential? Let me show you the ins and outs of this often underestimated gem now.

1. What’s Inside the Employment Handbook?

Sure, an employment contract is a necessary document with all the legal mumbo-jumbo. It covers the basics like names, terms, duties, and salaries—yawn! But an Employment Handbook? It’s like the secret sauce that adds flavor to your workplace. It not only sets the stage for your company culture but also spells out the dos and don’ts for your employees. Think of it as your trusty sidekick for daily management.

2. Unleashing the Power of the Employment Handbook

Picture this: your Employment Handbook is a treasure trove of management regulations that keep your HR department on top of their game. From defining your company’s vision and culture to establishing nitty-gritty rules, it’s your go-to guide for everything employee-related. Need guidelines for hiring? It’s got you covered. Want to iron out the probation period, leaves, or even disciplinary actions? Look no further! Plus, it ensures everyone plays fair by making it crystal clear what behaviors are off-limits.

3. The Magical Recipe for an Effective Employment Handbook

the Employment Handbook is your secret weapon for effective employee management, it goes beyond the legalities of an employment contract

Creating an employment handbook is not a one-person show; you need your employees in on the fun too. According to the Labor Contract Law, when your regulations affect employee benefits (like pay, working hours, vacation, and more), you’ve got to gather the troops. So, get the discussion going at an employee congress or through consultations with your awesome team. Let’s not forget the grand finale—publicizing the handbook and making sure every employee is in the know.

In addition, a little side note for all you law-abiding employers out there: following the procedural requirements is key. If you want your employment handbook to have that magical binding effect, it’s essential to dot your i’s and cross your t’s. Trust us, it’s worth it! In case of any labor disputes down the road, having documented proof of employee involvement and awareness will save the day.

So, here’s a pro-tip: keep those meeting minutes and make sure each employee signs an acknowledgement form. That way, you’re armed with the ultimate defense against any unexpected trouble.

In a nutshell, the Employment Handbook is your secret weapon for effective employee management. It goes beyond the legalities of an employment contract and adds that extra zing to your workplace( you can check our previous case study to understand how it works: Case Study: Understanding the Implications of Workplace Sexual Harassment). With the right ingredients and a sprinkle of employee involvement, you’ll have a powerful document that sets the stage for success.

Distinctions: Confidentiality Agreement & Non-Competition Agreement

August 8, 2023

In the realm of employer-employee relationships, it’s crucial to establish legal safeguards to protect trade secrets and prevent unauthorized disclosure. Two commonly used measures are the confidentiality agreement and the non-competition agreement ( You may check our previous post for more information: Non-competition Agreement in China Labor Law. However, these terms often create confusion among both employees and employers, leading to misconceptions and misunderstandings. In this post, we will shed light on the differences between confidentiality agreements and non-competition agreements, outlining key aspects that set them apart:

1. Nature of Liability

A confidentiality agreement imposes a statutory or contractual obligation on employees to maintain the employer’s trade secrets, regardless of whether such an agreement is signed. The duty of confidentiality is inherent in the employment relationship. On the other hand, a non-competition agreement is a mutually agreed upon obligation between the employer and employee. The employee is only bound by the non-competition obligation if a specific agreement is in place.

2. Focus of Liability

Confidentiality obligations primarily center around the prohibition of disclosing the employer’s trade secrets. The employee is required “not to disclose” such sensitive information. Non-competition obligations, however, prohibit the employee from engaging in work with a competing company or starting a similar business. The emphasis here is on “not to compete.”

3. Term of Liability

Confidentiality obligations persist as long as the trade secrets remain undisclosed, extending beyond the duration of the employment relationship. This means the duty of confidentiality continues even after the employment ends, as long as the trade secrets are not made public. In contrast, non-competition agreements typically have a shorter duration, usually no longer than two years.

confidentiality agreement and non-competition agreement are crucial to establish legal safeguards to protect trade secrets.

4. Breach of Agreement Liability

Breaching a confidentiality agreement does not generally entail specific penalties. However, employers can seek compensation for actual losses incurred due to the employee’s breach of confidentiality. It is crucial for employers to specify how such losses will be calculated in the confidentiality agreement. Non-competition agreements, on the other hand, often include liquidated damages clauses. If an employee breaches the non-competition obligation, the employer can directly claim the specified liquidated damages without having to prove the actual damages caused.

5. Conditions for Agreement Compliance

The duty of confidentiality is a statutory obligation for employees and does not depend on the employer providing any confidentiality fee or compensation. Employees are expected to safeguard their employer’s trade secrets unconditionally. In contrast, non-competition agreements require employers to compensate employees for adhering to the agreement. Typically, this compensation amounts to 30% of the employee’s salary before the termination of the labor contract, or it should be no less than the minimum local average salary.

In conclusion, while both confidentiality agreements and non-competition agreements serve to protect trade secrets, it is essential to understand the nuances that differentiate them. By comprehending the nature of liability, focus of obligation, term of liability, breach consequences, and conditions for agreement compliance, employers can effectively utilize these measures to safeguard their valuable intellectual property and maintain a competitive edge.

Confidentiality agreement, non-competition agreement

1. Q: Can employees terminate their employment contract without penalty?

A: Yes, employees can legally terminate their employment contract by providing a 30-day written notice without facing any penalty. According to Article 37 of the “Labor Contract Law of the PRC,” employees can terminate their contract by informing the employer in writing 30 days in advance. During the probation period, employees can terminate the contract with a three-day notice. Generally, employers cannot ask employees to pay penalties unless specified in the contract, such as for breaching a non-compete agreement or if the contract stipulates compensation for direct losses incurred by early termination.

2. Q: Can an employer refuse to provide a release letter when an employee resigns?

A: No, an employer cannot refuse to provide a release letter when an employee resigns. According to Article 50 of the “Labor Contract Law of the PRC,” employers are required to issue a certification for the discharge or termination of the employment contract within 15 days. Failure to provide the certification may result in penalties for the employer. It is the employer’s responsibility to provide release letters and assist in canceling work permits so that employees can apply for new permits in a timely manner.

3. Q: Can foreign employees participate in the social security plan in China?

A: Yes, foreign employees are required to participate in the social security plan as long as they are working legally in China. According to Article 72 of the “Labor Law of the PRC,” both employers and employees must participate in social insurance and pay premiums accordingly. The “Interim Measures for the Participation in Social Insurance of Foreigners Employed in China” also mandates that employers register foreign employees for social insurance within 30 days of their employment.

4. Q: Can an employer hold an employee’s passport or work permit?

A: No, it is not permissible for an employer to hold an employee’s passport or work permit. According to Article 9 of the “Labor Contract Law of the PRC,” employers are not allowed to detain identity cards or other certificates from employees. It is against the law for an employer to demand such documents as a guarantee or under any other pretext.

5. Q: How can employees ensure proper payment of individual income tax?

A: Employers are responsible for withholding and deducting individual income tax from employees’ salaries according to relevant tax laws. Each taxpayer can check their tax records at the local tax bureau by presenting their original passport. Visiting the tax bureau in the district where the employer is located allows employees to obtain printed records of their tax payments.

6. Q: What can employees do if their employment contract provisions are not in line with labor laws?

Top ten questions foreigners may have while working in China, let's see what the expert tell us, hearsay is not trustable!

A: Although a signed contract is generally binding, it is essential that the provisions within it are legal. If the provisions in an employment contract are illegal or not in line with labor laws, they are not valid and, therefore, not binding. It is advisable to thoroughly read the employment contract before signing, ensuring understanding and compliance with applicable labor laws.

7. Q: Can an employer terminate an employee’s contract for being late to work?

A: According to Article 39 of the “Labor Contract Law,” an employer may terminate a labor contract under certain circumstances, such as when an employee fails to meet recruitment requirements during the probation period, seriously violates employer bylaws, causes severe damage due to negligence or personal gain, establishes labor relationships with other employers that affect their work, or engages in criminal activities. If an employer terminates a contract without justification, it constitutes illegal termination, and the employer may be required to provide severance payment.

8. Q: What are the regulations regarding severance payment?

A: According to the law, employers must provide a 30-day notice or one month’s salary in lieu of notice when terminating a labor contract. In cases of illegal termination by the employer, they are required to pay two months’ salary for each year the employee has worked. However, if the monthly salary exceeds three times the local average salary, the employee may only receive three times the local average salary instead of their actual salary.

9. Q: How can employees request severance payment if they are illegally terminated?

A: Employees can first try negotiating with their employer, but if they refuse to pay, there are other options. Filing a complaint with the local labor bureau or labor supervision authority can often resolve the issue quickly. If that fails, employees can pursue labor arbitration, the initial step for resolving any labor dispute through legal means. If either party is unsatisfied with the arbitration result, they can proceed to file a lawsuit. The second instance court is usually the final instance in general lawsuits in China.

10. Q: Can foreigners win labor dispute cases in China?

A: The purpose of labor laws is to protect employees, including foreigners legally working in China. The main challenge for foreigners in winning labor dispute cases is often the language barrier rather than any other factors. The court fee for labor disputes is typically only 10 RMB. However, without appropriate assistance, winning a case can be challenging for foreigners.

Note: It is advisable to consult with a legal professional or labor expert to obtain accurate and up-to-date information regarding specific labor laws and regulations in China.

employee's right, labor contract, work permit

What to do in the event of a medical malpractice?

June 26, 2023

The following is a general instruction we prepare in line with the Civil Code of the PRC:

1. How to collect evidence?

If a patient believes that there is a medical malpractice, they should contact the medical affairs department（医务科）of the hospital as soon as possible to file a complaint and request a copy of their medical records. Together with a representative from the hospital, they should seal the medical records, including diagnosis and treatment records, hospital records, surgical consent forms, medical consultation records, and discussion records, as well as all other relevant documents. They should also request a receipt for the complaint form regarding the medical malpractice from the medical affairs department.

If the hospital is unwilling to cooperate in copying and sealing the medical records, there is no need to worry too much because according to Article 4 of the Supreme People’s Court’s provisions on evidence in civil litigation, the burden of proof is reversed in medical disputes. If the patient meets the basic conditions for filing a lawsuit and the court agree to accept the filing, the hospital has the obligation to prove that there is no causal relationship between their medical actions and the resulting harm, as well as the absence of medical negligence.

In other words, the hospital needs to provide relevant evidence to prove that they had no negligence during the medical process.

Then, in order to achieve the goal of filing a case, the patient needs to prove the following:

1. Whether there is a doctor-patient relationship;

2. Whether there is evidence of harm to the patient;

3. Whether there are actual losses and the extent of the losses.

The patient must carefully preserve any receipts and documents from the initial visits ( You may check our previous post: How to File a Lawsuit in China (P2-evidence) for more information). Only when the evidence provided by the patient meets the conditions for filing a lawsuit as stipulated in Article 108 of the Civil Procedure Law, will the people’s court accept the case.

2. Is it necessary to conduct an appraisal in the event of a medical malpractice?

There is no legal requirement that medical malpractice litigation must undergo a medical accident appraisal. Medical accident appraisal is not a prerequisite for medical malpractice litigation. Generally speaking, as long as the patient has evidence to prove that they or their deceased relatives received diagnosis and treatment from a hospital and were harmed as a result, they can directly file a lawsuit with the court to claim compensation, and the court should accept the case.

If there is a medical malpractice, they patient should contact the hospital ASAP to file a complaint and request a copy of medical records

3. What compensation can be claimed and how much?

Article 50 of the “Regulations on the Handling of Medical Accidents” stipulates that the calculation of compensation for medical malpractice shall be based on the following items and standards:

(1) Medical expenses

Calculate the medical expenses incurred for the treatment of the physical harm caused to the patient by the medical malpractice and provide reimbursement based on receipts. If further treatment is required after the case is closed, basic medical expenses shall be provided.

(2) Lost income

If the patient has a fixed income, calculate the reduction in fixed income due to lost work, and for income exceeding three times the average annual wage of employees in the place where the medical accident occurred, compensation shall be calculated based on three times the income reduction; if there is no fixed income, compensation shall be calculated based on the average annual wage of employees in the place where the medical malpractice occurred.

(3) Subsistence allowance during hospitalization

Calculate based on the subsistence allowance standards for general government staff on business trips in the place where the medical malpractice occurred.

(4) Accompanying expenses

If a patient requires someone to accompany them during hospitalization, calculate based on the average annual wage of employees in the place where the medical accident occurred.

Please be noted that: the statute of limitations for medical compensation disputes is three years, and the court will not protect rights that have been damaged for more than twenty years.

medical malpractice

Foreigners’ Property Purchase Requirements and Documentation in China

June 22, 2023

Before 2010, there were no strict restrictions on foreign individuals and organizations buying property in China. However, on November 4, 2010, the Ministry of Construction and the State Administration of Foreign Exchange issued a notice titled “Regulations on Further Standardizing the Management of Overseas Institutions and Individuals Purchasing Property,” which imposed specific requirements on foreigners and foreign-funded organizations purchasing property in China.

According to the regulations, foreign individuals can only purchase one residential property for self-use within the country. Overseas organizations that establish branches or representative offices in China can only buy non-residential properties required for their registered city’s office space.

In other words, eligible foreigners can only purchase one residential property for self-use in China. Foreign branch offices can only purchase office spaces in the city where they are registered. However, many multinational corporations have branch offices registered in various cities, allowing them to buy office spaces in different locations.

In early 2012, the National Development and Reform Commission (NDRC) issued a notice titled “Regarding Issues Related to the Application for the Scale of Medium and Long-Term Foreign Debt for Domestic and Overseas Banks in 2012.” The notice stated that when approving the quota for medium and long-term foreign debt, the NDRC would primarily consider the demand for foreign debt related to fixed asset investment projects.

It explicitly stated that the quota for medium and long-term foreign debt would not be allocated for personal housing mortgage loans provided to foreign nationals. However, it doesn’t rule out the possibility that foreign banks may offer loans to eligible property buyers.

What documentation is required when a foreigner with foreign nationality purchases property and signs a contract for registration of property rights?

foreign individuals can only purchase one residential property for self-use within mainland of China and usually can't get loan for it

I. Foreigners need to provide the following identity documents:

Passport and foreigner’s residence permit (for those without a residence permit, a Chinese translation of the passport certified by a Chinese notary institution is required).
Proof of working or studying in China for at least one year (such as a labor contract or a visa valid for at least one year).

II. For purchasing new commercial properties, the following documents are required:

If there are two or more co-owners, a joint application must be submitted. If any of the applicants lacks full capacity for civil conduct, a guardian certificate and a photocopy of the guardian’s ID card (or passport) must be provided.
“Opinion Letter on Foreign-Related Examination and Approval” issued by the office responsible for foreign-related examination and approval.
After obtaining the land and housing surveying certificate, the real estate ownership certificate can be processed at the real estate transaction center.

III. For purchasing second-hand properties, the following documents are required:

Notarized sales contract.
“Opinion Letter on Foreign-Related Examination and Approval” issued by the office responsible for foreign-related examination and approval.
“Property Evaluation Report.”
“Land and Housing Surveying Certificate.”

IV. For foreigners applying for property loans, the following documents should be provided:

Identity proof.
Proof of down payment.
Proof of income, educational background, and creditworthiness of the loan applicant.
Marriage certificate (marriage certificate or certificate of single status). If one spouse entrusts the other to handle the loan, an “Authorization Letter” should be provided. All these documents should be authenticated by the Chinese embassy or consulate in the country or by the embassy or consulate of that country in China.

If the property purchase is conducted through an agent, an authorization notarization procedure is required. The authorization letter should clearly state the authorized scope and period to avoid any potential loss caused by unclear authorization.

It should be noted that policies may vary in different cities, so it is necessary to understand the local regulations, especially in cities with property purchase restrictions.

Property

What’s the Trick to Not Getting Scammed While Sourcing from China?

June 16, 2023

Once a while, we will get inquiry from our clients looking for help to get their money back, most of the time, the supplier disappeared once the deposit was paid, or the whole payment was made, however, they found there are a huge shortage in the delivered products or the products are just trash!

So what’s the trick to not getting scammed?

The most important thing is to make sure that you’re actually dealing with a registered Chinese company. At least half of the time when an oversea company is scammed by a “Chinese company,” the company is either not Chinese at all or they are not registered with Chinese corporate authorities.

The information they show in E-commerce platform, their website, they email address or their business card is probably not true, it’s something they make up to cheat people.

To verify that you’re dealing with a real Chinese company, you should ask for a copy of its business license and have someone who speaks Chinese and understands Chinese business licenses examine it ( If you know need more information, please check our previous post: What Can We Learn from a Business License?). Look for information on the license such as the year the company was formed, its location, and the scope of its business.

Another way to check their authenticity is to ask them to provide all these information, and compared all these with the information you found through check it yourself, if there are discrepancies in the information provided, it’s a red flag and you should walk away.

To verify that you're dealing with a real Chinese company, you should ask for a copy of its business license and have someone check for you

Another issue we want to specifically explain is: A HK registered company is probably a shell company, which more than often, is a tool to do fraud.

Before the opening- up policy of China, many HK registered company is a real trading company, they sell products they buy from Mainland of China. After the opening-up of China, some Chinese factory choose to open HK company to sell their products directly to overseas market. However, there are a lot of HK company are incorporated with a vicious purpose–cheating money.

If you know the HK company’s history, that’s fine. If the HK company is opened by a factory located in Mainland of China, it’s highly recommended that you sign the contract directly with the factory. Why? Because even if the business is real, the HK company has no assets at all. Once there is any dispute, you can’t enforce the judgement even if you win the case. Sign the contract directly with the factory instead of the HK company, and provide the jurisdiction is in Mainland of China and the applicable law is law of the PRC.

If you are uncertain of the identity of the HK company, just go away.

international trade, sourcing from China