Announcement for Concurrences Journal Event on Antitrust in Developing Countries

Concurrences Competition Law Journal, in partnership with the New York University School of Law, will hold its inaugural conference "Antitrust in Emerging and Developing Countries” on Friday, October 24, 2014, at the NYU campus. This one-day conference (8:30am to 6:30pm) brings together prestigious speakers from across the world. Leading lawyers, in-house consultant, and enterprises senior managers from emerging and developing countries like China, Brazil, Mexico, South Africa, among other jurisdictions will participate in the event.

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Analysis of the New Specialized Courts in China

Authored by He Jing (hejing@anjielaw.com) at AnJie Law Firm

After an expedited legislative process over the last 9 months, China’s legislature passed a bill on August 31 announcing that three specialized IP courts will open up in Beijing, Shanghai and Guangzhou.  Supreme People’s Court is in charge of the actual operational details and has vowed to have these courts up and running by the end of 2014.  All the three specialized IP courts will be intermediate-level courts, meaning that they will handle many cases as the court of first instance and the decisions may be appealed to provincial-level higher people’s courts. 

It is no secret that the establishment of the specialized courts is to better deal with "technology centric" matters such as patent and trade secret cases.  The new courts will act as the court of first instance to handle civil infringement cases involving patents, new plant variety, layout designs of integrated circuit and trade secret cases.  Also, the Beijing Specialized IP Court will be responsible to act as the court of first instance to review all the patent validity and patent prosecution decision coming out of Patent Review Board (PRB).  The rational is that a specialized court will deliver more “consistent” decisions through a group of specialized judges especially on those patent case or IP cases involving complicated technological matters.

The idea of specialized IP courts went back as far as mid-1990s.  Chinese IP judges and professors already proposed the idea of establishing specialized patent courts.  The very idea was brought to life and was heavily researched in 2006-2008 at the time China was planning the third amendment of the patent law.  Many people advocated the idea of establishing a higher court level IP court, similar to the US Court of Appeals for the Federal Circuit, Japan IP High Court, and Taiwan IP High Court.  But the government dropped the plan.  One reason is that the new establishment of the IP courts would require substantial changes of the various court organization legislations.  It would have consumed significant amount of political capital to make the change. 

While almost nobody believed the specialized court would become possible in China in any near future, China announced its new reform roadmap in the Third Plenum Resolution in October 2013, which stated that China will “explore” the establishment of specialized IP as a way to improve IP protection.  This completely changed the momentum, directly resulting in a quick launch of the specialized IP courts. 

What is notably interesting is the debate among leading scholars, IP judges and IP practitioners around what should be the form of the specialized IP court.  People generally believe the specialized courts are indicative of pro-IP policy directions.  At the same time, many observers strongly advocated that new specialized IP courts should be an appellate court at provincial level.   Under the current model, an IP court at intermediate court level has no power to render final judgments in high stake cases, including those related to TRAB cases.  The fact that the IP court decisions will be appealed to provincial higher courts somewhat compromises the very purposes of specialized courts, as people may argue. 

Despite the debate, the new specialized IP courts should be a fairly positive development for IP owners, or at least provide better opportunities for IP litigations.  The establishment itself continues to prove China has strong interest to improve quality of adjudicating IP matters.  The new courts may have some incentives to delivery positive results.  One particular area is damages.   China Premier Li Ke Qiang just announced at Davos Forum that China is going to impose “massive sum” of damages against IP infringers.  The specialized IP courts should be the place for reflecting the new trend. 

At a deeper level, the new courts may be indicative of the upcoming judiciary reforms plan in China.  China has commenced pilot programs for judiciary reforms in Shanghai and other cities.  One key measure is to increase staff support for judges and improve the budgeting and other benefits for the courts.  Another measure is to increase the “independence” of the judges that are assigned to specific cases, which means minimizing any interference from third parties.  The specialized courts may be the place for implementing such pilot programs at full scales.  

The same legislative bill requires Supreme People’s Court to report back in three years about the outcome of the specialized IP courts.   We expect that some judges with very strong IP background will play key roles in the new courts.  The feedback from the IP world may be helpful for China to decide whether and how the specialized IP courts should evolve to next level.

Chinese Competition Authorities Hold Joint Press Conference in Response to Criticism from E.U. and U.S. Trade Groups

Authored by Michael Gu (michaelgu@anjielaw.com) and Yu Shuitian at AnJie Law Firm

Introduction

On 11 September 2014, China’s three antitrust law enforcers held a joint press conference in defense of the recent antitrust probes into multinationals including Microsoft and Japanese auto parts and bearing manufacturers. Issues surrounding the probes came to light after U.S. and European trade groups including the U.S. Chamber of Commerce and the European Union Chamber of Commerce said PRC antitrust investigators were unfairly targeting foreign businesses. Director General Mr. Shang Ming of the Anti-Monopoly Bureau of Ministry of Commerce (“MOFCOM”), Director General Mr. Xu Kunlin of the Price Supervision and Anti-Monopoly Bureau of National Development and Reform Commission (“NDRC”) and Director General Ms. Ren Airong of AntiMonopoly and Anti-unfair Competition Enforcement Bureau of State Administration for Industry and Commerce (“SAIC”) attended the press conference. They spoke on their respective Anti-Monopoly Law (“AML”) enforcement positions and answered questions. In particular, they offered updates on the status of several high-profile cases, responded to criticism on selective law enforcement and lack of procedural fairness and transparency.

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China's Follow-on Public Antitrust Enforcement Intensifies

Authored by Dr. Zhan Hao (zhanhao@anjielaw.com) and Dr. Annie Xue at AnJie Law Firm

China’s National Development and Reform Commission (NDRC) handed down antitrust penalties totaling 1.24 billion yuan on 12 Japanese companies in the past August, including eight auto parts makers and four bearing manufacturers. This action came after a series of global crackdown on auto parts price cartels taking place in the U.S., the EU, Japan and Singapore, while reinforcing the trend of the Chinese antitrust authorities following their counterparts in other major antitrust regimes, especially the U.S. and the EU.

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Better Late Than Never: NDRC Publishes Full Decisions on Zhejiang Car Insurance Cartel Case - Analysis of NDRC's Antitrust Law Enforcement Approach

Authored by Michael Gu (michaelgu@anjielaw.com) and Shuitian Yu at AnJie Law Firm

Introduction

Less than 2 weeks after the record fine (USD 200 million) in the Japanese Auto Parts and Bearing Manufacturers case that shocked the auto parts industry [1], on 2 September 2014, the Chinese price monopoly regulator, NDRC released its decisions [2] to impose combined fines of RMB 110 million (USD 17.89 million) on 23 property insurance companies and a local trade association in Zhejiang province for their price fixing in relation to car insurance. Among the companies involved in the case, one company is fully exempted and two other are granted significant reduction of the fines. Investigations into the Zhejiang branches of other nine insurance companies were terminated because those nine companies had not fixed prices or reached monopoly agreements.

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State Council Issues New Guideline To Accelerate Insurance Development

Authored by Dr. Zhan Hao (zhanhao@anjielaw.com) and Wu Shanshan from AnJie Law Firm

On August 14, 2014, State Council promulgated Several Guiding Opinions Regarding Accelerating the Development of Modern Insurance Services (“New Guideline”) based on the original version of Guiding Opinions [1] issued by State Council in June 15 2006. The New Guideline is deemed as the essential impetus to PRC insurance industry.

 
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Note of Caution: Record Fines on 12 Japnese Auto Parts and Bearing Manufactures - Analysis of the NDRC's Penalty Decision and Countermeasures of Companies

Authored by Michael Gu (michaelgu@anjielaw.com) at AnJie Law Firm

Within six years of implementation of China's Anti-Monopoly Law, the China's law enforcement agency responsible for supervising price monopoly, the National Development and Reform Commission ("NDRC"), continues to strengthen its law enforcement efforts with rounds of “antitrust storm” that swept across a number of industries and companies along with record fines. This is especially true since 2013, the NDRC has probed into number of high-profile penalty cases, including the LCD Panel case [1], Moutai and Wuliangye case [2], Baby Formula case [3], Shanghai Gold Jewelers case [4] and Spectacle Lenses case [5]. Meanwhile, the NDRC has also launched investigation into the US high-tech giants, InterDigital and Qualcomm. For InterDigital case, the investigation has been suspended [6]. As for Qualcomm case [7], Qualcomm has manifested their willingness to cooperate with the NDRC in its investigation and has submitted relevant commitment.

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China's Antitrust Enforcement is at Its Full Swing

Authored by Dr. Zhan Hao (zhanhao@anjielaw.com) and Dr. Song Ying from AnJie Law Firm

Since the very beginning of 2014, China’s public antitrust enforcement has attracted increasing attention domestically and abroad. Apart from business people, antitrust scholars and lawyers, even common people in the mainland have gotten to be familiar with the terminology of “antitrust”. The enforcement of China’s two antitrust investigative authorities, the National Development and Reform Commission (“NDRC”) and the State Administration for Industry and Commerce (“SAIC”), has foreboded two tendencies recently, which will be elaborated in the following.

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The Application of Reinstatement Value Insurance

Authored by Dr. Zhan Hao (zhanhao@anjielaw.com) and Song Yiqiu from AnJie Law Firm

Reinstatement Value Insurance is applied more and more in PRC insurance market. However, the Insurance Law of the People’s Republic of China does not specifically define the Reinstatement Value or how to apply the Reinstatement Value Insurance. This article pertains to briefly analyze the application of Reinstatement Value Insurance.

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Abuse of Dominance in Relation to Intellectual Property: From China's Perspective

Authored by Dr. Zhan Hao (zhanhao@anjielaw.com) and Li Xiang at AnJie Law Firm

Introduction

There is a joke in reference to the relationship between antitrust and intellectual property and the conflicts between them, which goes, “It is not easy to marry the innovation bride and the competition groom and some have argued that such a marriage will unavoidably lead to divorce.” Nowadays it is not a problem if there is an intrinsic conflict between them. In China, the principle that both of the two legal regimes serve the common purpose of promoting innovation and enhancing consumer welfare is broadly acknowledged.

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