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2022 China Employment

Getting right personal information protection and maternity leave

Currently, companies worldwide are called by both domestic and international regulations to become corporate citizens rather than merely profitable entities. In China, 2021, domestic legislation focused on data and cyber protection and introduced measures to support the third-child policy. Namely, Personal Information Protection Law (“PIPL”), effective from November 1 2022, obligates companies to strengthen personal data handling, process, and storage, and from late November, provinces and municipalities across China extended maternity leave to support the 3-child policy (announced on May 31, 2021, following the Chinese Communist Party Politburo meeting chaired by President Xi Jinping). As a result, in 2022, human resources (“HR”) across China should diligently implement plans to comply with such changes and obligations.

At Horizons, we have been working with clients to adjust employee policies and summarise the main aspects for human resources to practically implement changes.

Personal Information Protection Law

PIPL is the first legislation to address misuse of personal data and sets forth mandatory requirements for companies processing such data. Though data handling related to human resources do not require the employee’s consent, PIPL does introduce stricter obligations for those handling sensitive personal information, such as biometrics, religious beliefs, medical and health and so forth. Namely, companies shall obtain specific consent and inform such individuals of the necessity and impact on their rights and interests. Therefore, companies should audit the existing personal information processing systems to gain a comprehensive employee data overview and, if necessary, draft specific consent forms aligned with PIPL.

Equally, companies may only transfer personal information outside mainland China by fulfilling provisioned conditions. Under PIPL, such conditions are generally outlined and require further guidelines for companies to proceed ahead. We suggest HR keep abreast of forthcoming related guidelines, especially those handling large volumes of personal information that meet a threshold set by the National Cyberspace Authority.

Maternity Leave

In late November 2021, parental leave extensions were adopted in Chinese cities and provinces to stimulate the 3-child policy. Extended leave policies aim to reduce the burden of childbirth and childcare. The extended number of days varies from province to province or city to city, for example in Shanghai, the maternity leave is extended to 158 days. For companies, the amended policies shall directly impact employee leave policies and workforce planning and costs to cover extended leave.

We suggest that companies should conduct an employee consultation process before any amendments are made to employee leave policies and ensure employees are entitled to the legally allocated number of leave days. Namely, clear specification of the type of leave and number of days such as maternity leave, paternal leave for working parents and carer’s leave. In this manner, companies can reduce the risk of labour disputes since the amendments are consented by employees and blinding.

Both PIPL and extended maternity leave reflects Environment Social and Governance (“ESG”) principles emerging in China. As an important international topic, we anticipate ESG to be present in forthcoming legislation in China, however, governed by President Xi Jinping Thought on Socialism with Chinese Characteristics.

If you are looking for labour law professionals to evaluate whether your data management or employee policy is compliant with the new legislation, please contact Horizons at country.partners@horizons-advisory.com, and our Partner in charge will be in touch.

Wang Zhengyang joins Leaders in Law as the exclusive Arbitration Law member in China

Leaders in Law, the leading platform in its field, is delighted to welcome Wang Zhengyang as our exclusively recommended & endorsed Arbitration Law expert in China. Wang’s office is located in Shanghai.

Mr. Wang Zhengyang specializes in the areas of litigation, arbitration, and foreign investment. He has profound knowledge of Chinese law and more than 30 years of legal practice experience, including 5 years in Court.

In the field of civil and commercial affairs, Mr. Wang has provided high-quality advisory services and litigation & arbitration legal services for many state-owned and private enterprises in the fields of finance, oil and gas, construction and real estate, manufacturing, logistics, and trading. In the criminal field, Mr. Wang has successfully defended many companies and individuals in major and complex criminal cases involving loan fraud, illegal business operation, contract fraud, and bribery.

Mr. Wang also actively provides criminal compliance training services for corporate customers, member companies of the chamber of commerce, member companies of the industry association, to help companies prevent criminal legal risks. Furthermore, Mr. Wang also specializes in foreign legal services. He has successfully defended foreign-funded enterprises and individuals involved in intellectual property infringement disputes, labour disputes, shareholder disputes, contract disputes, debt recovery disputes, illegal personal detention, contract fraud, illegal possession of drugs, etc.

If you require any assistance in this area, please use the contact details provided in Wang’s profile below or contact us at info@leaders-in-law.com & we will put you in touch.

New Regulations for applications with the Chinese Patent Office (CNIPA)

On October 17, 2020, the government of the People‘s Republic of China approved the fourth amendment to the Chinese Patent law (CPL), which has far reaching consequences for the quality of patent applications at the Chinese Patent Office (CNIPA). Chinese Patent law covers design applications as well as patents, utility models and aspects of trademark law.

Most relevant amendments to the Chinese patent law concern the term of protection for designs (see our separate article on the new Chinese patent law here) as well as higher maximum charges for remuneration in cases of infringement and cases of the attempt to file an application without adhering to common standards of patent filing practice which do not comply with the expectations of the Chinese government.

In brief, the most relevant changes in force from June 1, 2021 are the following:

  • Scope of protection and term of protection for designs The term of protection for designs (design patents) is prolonged from ten to a maximum of 15 years from the date of filing (Art. 42 CPL). The definition of designs  CPL in Art. 2will also cover partial designs as long as they describe parts of products.
  • Chinese priority for designs Design applications filed at the CNIPA can from now on, according to article 29 CPL and art. 30 CPL take priority from other applications filed with the CNIPA, designs as well as patents or utility models.
  • Quality control Art. 3 CPL asks for stricter quality control of applications filed with the CNIPA, as incentives by the Chinese government to file applications had recently effectuated a considerable amount of applications of little quality, which hindered the fair and free exchange of ideas for technical innovations.
  • Prolongation of protection in case of delayed examination
  • Higher compensation and disclosure requirement for defendants Maximum compensation for patent infringement is increased from 1 to 5 million RMB (630.000 Euro); in addition to that, significant punitive damages will be introduced. Defendants will have to face disclosure requirement for the estimation of damage calculation and the production of necessary proof if asked to by the court. Limitation period for claims for damages is increased to three years, in accordance with Chinese civil law.
  • Grace period The newly amended Chinese Patent Law introduces in art. 24 CPL a grace period of  six months. This amendment was introduced with respect to recent events in reaction to the global pandemic COVID-19.

In case of more than four years from the filing date or three years from the request for substantive examination compensation by way of prolongation of the term of protection will be possible. However, this will only be possible on request and for patents only.

Also visit the following link: https://english.cnipa.gov.cn/

China Revises Administrative Regulation for Medical Devices

The newly amended “Regulation on the Supervision and Administration of Medical Devices” (“Regulations”, 医疗器械监督管理条例) was passed on 9 Feb. 2021 and came into force on 1 June 2021. The Regulation applies to the research and development, production, operation, and use of medical devices within the territory of China, as well as the supervision and administration of medical devices.

One of the core revisions is to establish a medical device registrant system. Pursuant to the system, the medical device registrant is the “producer” of the medical device product, and is responsible for the safety and effectiveness of the medical device during the whole process of research, production, operation, and use in accordance with law.

In addition, the Regulation requires medical device registrants and record holders to establish a medical device adverse event monitoring system, take the initiative to reevaluate the registered medical devices, and take applicable risk control measures in accordance with the reevaluation results.

The Regulation also strengthens the administrative penalties, stipulating penalties for medical device registrants and record holders who fail to fulfill their obligations, as well as penalties for operators of online e-commerce platforms for medical device transactions who fail to fulfill their obligations.

IP | IQ: Bad Faith Filings in China and the Impacts of the New Amendments

Melvin Mei, Trade Mark Attorney, discusses the amendments to Chinese Trade Mark law and the impacts on the region.

In November 2019, amendments to Chinese Trade Mark law came into effect around bad faith filings, which continue to be a problem in China.

Melvin Mei, one of Rouse’ trade mark experts in Shanghai reflects on the practical implications of these amendments. He explores the underlying reasons for the large numbers of bad faith filings, the first to file system and what steps brand owners can take to protect themselves. Melvin also discusses the actions which authorities have been taking since the enactment of this amendment on trade mark agencies.

 

Chongqing office set to further boost KWM’s presence in China

On 18 March 2021, King & Wood Mallesons Chongqing office officially opened. It is the second office set up by KWM in Southwest China, following Chengdu office, bringing the total of KWM China offices to 14. Located in Liangjiang New Area, Chongqing office obtained the approval for its establishment from Chongqing Municipal Bureau of Justice at the end of October 2020.

Chongqing, a municipality directly under the central government in Southwest China, is the largest industrial and commercial city in the southwestern of the country, an important modern national manufacturing base and a comprehensive transportation hub in the region. In recent years, the construction of the Chengdu and Chongqing Economic Circle has continued, and has been included into the 14th Five-Year Plan. The demand for high-end foreign-related legal services in the region is on the rise. KWM always pays close attention to the development of the economy and legal service market there, and has established its physical presence in Chengdu as early as in 1998. Based on the high reputation and extensive client base already established in Sichuan and Chongqing, the two offices will work together to serve a greater area, assisting more enterprises and institutions in keeping up with the global market trend and seeking cooperation worldwide. They will become the backbones of KWM in the region and even the west part at large.

By taking into consideration of the demands of clients and the market, Chongqing office will in the beginning contribute to the firm’s practice in capital market, corporate, dispute resolution, restructuring & insolvency, and to international cooperation relating to the Belt and Road Initiative, providing clients in the manufacturing, modern agriculture, technology, real estate and infrastructure, cultural tourism and other industries with professional and first-class legal services. The Chongqing team is made up of partners, counsels and associates who have been deeply delved in the regional market for many years. With a wealth of experience, strength and in-depth understanding of various sectors, the team is able to leverage the KWM platform and resources to assist clients in achieving better development locally.

Liu Rong, Finance & Securities

Liu Rong specializes in corporate, securities, and civil and commercial matters. He has more than 20 years of experience in the legal service market in Sichuan and Chongqing, and joined Chengdu office in 1999. Mr. Liu has advised many large and medium-sized SOEs, private enterprises, high-tech companies on their reorganization, restructuring, and merger and acquisition. He has also advised Chinese enterprises on their IPOs and listings on stock markets both in the Mainland and Hong Kong S.A.R. He has served as the counsel for many large SOEs, private high-tech companies and some large foreign-funded enterprises.

Liu Zhizhi
, Corporate

Liu Zhizhi focuses her practice on international construction projects and construction related investment, international trade in technology and goods, and civil and commercial dispute resolution. Ms. Liu knows the business processes of international construction projects and construction related investment, and international trade in technology and goods. She has a deep understanding of FIDIC contract conditions, standard goods procurement and engineering construction contract conditions of the World Bank and the Asian Development Bank, and other widely accepted international construction and engineering contract versions. She has substantial experience in drafting, review and negotiation of international construction contracts and imports and exports of major equipment contracts. She has advised clients on projects in Europe, Southeast Asia, the Middle East and Africa in such areas as railway, locomotive, minerals, power and other energy and infrastructure sectors.

Wang Xin, Dispute Resolution

Wang Xin focuses on M&A financing, real estate, disposal of non-performing assets, etc. Having been deeply engaged in the southwest legal market for many years, Mr. Wang has accumulated a wealth of experience in advising on real estate development, investment in and financing of real estate projects, financial assets M&A, corporate, M&A and restructuring, liquidation and disposal of financial claims and debts, dispute settlement involving atypical and defective warranties, dispute resolution & litigation, among others. He joined KWM at the end of 2020. Thanks to his deep understanding of the legal market environment of Chongqing, he earns a good reputation and rich client resources locally.

Li Baoshan
, Dispute Resolution

Li Baoshan specializes in civil and commercial litigation, arbitration and enforcement, corporate debt crisis resolution, etc. He has gained profound social connections and practice experience in his more than 20 years of dispute resolution experience. His understanding of the judgment thinking and the workflow of courts and arbitration institutions enabled him to provide reasonable and pragmatic solutions for clients. Prior to joining KWM, Mr. Li had been working as a judge entertaining hundreds of civil and commercial cases in the court system for nearly 15 years. After joining KWM, Mr. Li has provided legal services for a number of large SOEs, well-known listed companies and private companies. He is well trusted by his clients.

“We are delighted to announce that Chongqing office is open for business.” said Zhang Yi, Chairman of KWM China Management Committee, “We wouldn’t make it happen without the strong support from leaders at all levels in the Chongqing municipality and Liangjiang New Area and our clients. I would like to extend my sincere gratitude to you all. The establishment of Chongqing Office is an important step in our response to a series of national strategies underscored by the central government, such as further construction of Chengdu-Chongqing Economic Circle, the new western land-sea corridor and inland international financial centers. Chongqing office will continue KWM’s high-quality service and client-centric philosophy. With KWM’s strong legal service network and platforms spanning major cities like Beijing, Shanghai, Shenzhen and Guangzhou and even the whole world, Chongqing office will further contribute to the development of existing and new clients in the Southwestern region by taking root in the local market of Chongqing and fully tapping KWM’s global resources, which will help propel the regional development momentum and comprehensive competitiveness.”