Mercedes-Benz Fined for Price Fixing: Auto Industry at Stake

Authored by Dr.  Zhan Hao (zhanhao@anjielaw.com) and Moon Wang (wanglingling@anjielaw.com) at Anjie Law Firm

Event

On 23 April, 2015, the Jiangsu Price Bureau, which is the provincial branch of the NDRC, announced the punishment on its website and stated that it had imposed a fine of CNY 350 million (USD 56.49 million) on German premium car maker Mercedes-Benz, along with a combined CNY 7.87 million (USD 1.27 million) fine on its dealers. The fine came as a result of Mercedes-Benz reaching and implementing resale price maintenance (“RPM”) agreements to fix the minimum prices of Class E and Class S cars, as well as certain auto parts. The announcement (“announcement”) was published without much detail of relevant facts, the reasons for the fine calculations, or definitions of the relevant markets.  
 
Later on 22 May, 2015, the Jiangsu Price Bureau published a full administrative penalty decision imposed against Mercedes-Benz and several of its dealers in Jiangsu province for the price monopoly. The punishment decision was dated 20 April, 2015 and shed light on the facts and reasons behind the penalty decision. 
 

Brief Comments on China's First Anti-Monopoly Regulation in the IP Field

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

On 7 April 2015, State Administration for Industry and Commerce of the People’s Republic of China (SAIC) published China’s first anti-monopoly regulation specifically aimed at the abuse of intellectual property rights (IP), namely the Provisions on the Prohibition of Abuse of Intellectual Property Rights for the Purpose of Eliminating or Restricting Competition (the Provisions) which will become effective on 1 August 2015. The drafting of the Measures can be traced back to 2009, when the SAIC established a special task force to carry out the research and drafting of the Guidelines on the Anti-monopoly Enforcement in the Intellectual Property Rights field (the Consultation Draft)(the Guidelines). Based on the draft Guidelines, the SAIC issued the draft Provisions for public consultation (the Consultation Draft) in June 2014.The Official promulgation of the Provisions marks a giant leap for the SAIC in terms of anti-monopoly legislation in the IP field.

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China's Patent Office Inviting Public Comments on New Amendments of the Patent Law

 Authored by Mr He Jing (hejing@anjielaw.comand Mr Li Binxin (libinxin@anjielaw.comat Anjie Law Firm

The State Intellectual Property Office (“SIPO”) is reviving its effort to amend the patent law.  A new version of the proposed amendment was released for public comments with a deadline of the end of April 2014.  
 
The earlier draft as released in 2013 attracted some criticism because of the administrative enforcement powers related to patent infringement cases. People were worried about the creation of a separate patent adjudication system.  The new version still retains the administrative enforcement powers and also addresses delicate issues such as standard essential patents. Predictably, the new draft will lead to new rounds of heated debates.  
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China's Patent Office Inviting Public Comments on New Amendments of the Patent Law

 Authored by He Jing (heijing@anjielaw.comand Ms. Lyu Pei(lvpei@anjielaw.comat Anjie Law Firm

The State Intellectual Property Office (“SIPO”) is reviving its effort to amend the patent law.  A new version of the proposed amendment was released for public comments with a deadline of the end of April 2014.  

The earlier draft as released in 2013 attracted some criticism because of the administrative enforcement powers related to patent infringement cases. People were worried about the creation of a separate patent adjudication system.  The new version still retains the administrative enforcement powers and also addresses delicate issues such as standard essential patents. Predictably, the new draft will lead to new rounds of heated debates.

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Chinese Judge Gives Special Consideration to Internet in Wechat Trademark Decision

Authored by He Jing (heijing@anjielaw.comand Ms. Lyu Pei(lvpei@anjielaw.comat Anjie Law Firm

A recent Beijing IP Court decision on “weixin” (the Chinese name of WeChat) trademark has attracted wide discussion and debate in China. On March 11, the Beijing IP Court issued its first instance judgment on the dispute, affirming Trademark Review and Adjudication Board (TRAB)’s refusal to register the “weixin” trademark applied by Trunkbow Asia Pacific (Shandong) Co., Ltd. (“Trunkbow”). The court cited Art. 10.1.8 to rule that Trunkbow’s “weixin” mark, which has no bad faith intent, would have such “unhealthy influence” or “ill effect” as to the existing and stable market order and potentially lead to false recognition among the public.  What is particularly noted by the trademark community is that the court believes that allowing the earlier-filed mark to be registered would harm the public interest.  

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Interim Measures in Support of Commercial Arbitration in China

 Authored by Arthur Dong (dongxiao@anjielaw.com) at AnJie Law Firm

In China, arbitral tribunals do not have the power to implement interim protection measures, regardless of the institutional rules to be applied to the arbitration. Moreover, the arbitral tribunals are prevented from implementing interim protection measures even if its rules would grant it such a right. In simple terms, the parties to arbitration must first make their applications for property preservation or evidence preservation to the relevant arbitration institution. From there, the arbitration institution then transfers the party's application to the people’s court. The arbitral institution is prohibited from considering the merits of the motion. Based on the recent amendment to Civil Procedure Law of the People’s Republic of China (‘Civil Procedure Law’, the latest version become effective from 1 January 2013), parties are allowed to apply for interim measures directly with the judicial court before initiating arbitration proceedings, which is deemed a sign of pro-arbitration judicial policy.

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Annual Review of PRC Anti-Monopoly Law Enforcement (2015)

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

Overview

In 2014, China’s three competition authorities have all been very active in their enforcement practices. A number of new implementing rules have been enacted as part of an effort to further refine China’s antitrust regime. On top of that, a recent wave of high-profile antitrust crackdowns has established China’s standing as one of the most important emerging jurisdictions for antitrust enforcement.

In terms of the rulemaking, the Ministry of Commerce (MOFCOM) has been the most active one, with four implementing rules published - covering simple case qualifications and review procedure, merger control guidance and imposition of restrictive conditions. The Interim Provisions on Standards Applied to Simple Cases of Concentration of Undertakings (“Provisions on Simple Cases Standards”) published on 13 February 2015, the Guiding Opinions on Notification of Simple Cases of Concentration of Undertakings issued on 18 April 2015 are the set of rules that build up a fast-track merger review system for transactions unlikely to raise competition concern, which is a big step forward for China’s merger review regime. They laid down the criteria for determining cases that qualify as a simple case and provide guidance on the procedure for the notification of simple cases.

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SAIC IPR Abuse Rules (AnJie Translation)

Translated by Anjie Law Firm

 

Measures of the State Administrations for Industry and Commerce on the Prohibition of Abuse of Intellectual Property Rights for the Purpose of Eliminating or Restricting Competition.

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Supreme Court Further Clarifies the Criteria For Determining the Validity of Foreign-Related Arbitration Clauses

 Authored by Arthur Dong (dongxiao@anjielaw.com) at Anjie Law Firm

Introduction

During the past year, for those who are running international commercial activities, it is noteworthy that the Supreme People’s Court of China (the “Supreme Court”) has, through the publication of a series of official replies towards cases in lower level courts, further clarified the criteria for determining the validity of foreign-related commercial arbitration clauses. Taking into consideration relevant cases, this column will explore with its readers the issue of how to distinguish the effectiveness of foreign-related commercial arbitration clauses in China.

Chinese Antitrust Agency Renders Milestone Decision on Standard Essential Patent Case

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

Background

Just a week before the Chinese New Year, the National Development and Reform Commission of China (NDRC)announced the long-awaited penalty decision against Qualcomm with respect to its abuse of standard essential patents (SEPs) in the wireless telecommunication industry. The NDRC imposed a penalty ofRMB 6.088 billion (about USD 1 billion) onQualcomm, equivalent to 8% of Qualcomm's China sales in 2013, for itsabuse of dominance in China, in addition to an order to cease illegal conduct.This milestone decision demonstrates NDRC’s determination to take a stringent stance against any monopoly activities in China and its ambition to become one of the most powerful antitrust enforcement agencies in the world. The NDRC initiated an antitrust investigation of Qualcommas early as November 2013 based on a complaint filed with the NDRC. On 10 February 2015, the NDRCmade its final decision after a one-and-a-half-year investigation, numerous consultations with external experts and multiple meetings and discussions with senior officers of Qualcomm. The fine imposed on Qualcomm sets the record as the highest antitrust penalty ever issued in China’s anti-monopoly enforcement history which accounts for more than three times the total amount of fines rendered by the NDRC in 2014 which is nearly RMB 1.8 billion.

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