In the news: Mainland firms using HK for arbitration, Heineken's trademark hijacked and keeping personal data confidential
October 08, 2013 | BY
clpstaff &clp articles &Hong Kong is attracting more mainland parties for arbitration. Heineken is facing an uphill trademark battle and companies are feeling the need to keep personal data confidential
More Chinese companies turn to Hong Kong for arbitration
The SCMP ran an article on how an increasing number of mainland companies have been turning to Hong Kong to arbitrate their commercial disputes. The close proximity and cultural similarities to the mainland have meant that the territory is accessible. The article said lawyers in Hong Kong expected the trend to continue, especially for marine, construction and commercial disputes. However, in order for Hong Kong to maintain its attractiveness to mainland parties, costs have to be considered, as arbitration is supposed to be the low-cost alternative to expensive trials.
Source: SCMP
The Hong Kong government has been pushing for the territory to be an arbitration centre. This was seen recently with the China International Economic and Trade Arbitration Commission (CIETAC) establishing its first arbitration centre outside of mainland China. “Backed by a sound legal system and excellent geographic location, Hong Kong has many advantages when it comes to developing international arbitration,” said Wang Wenying, secretary general of CIETAC HK in a previous interview with China Law & Practice. The article does make a good point that arbitration has to be commercially viable. Mainland outfits are notorious for their tight budgets and low cost approach – something that might hamper growth if fees are not aligned with expectations.
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Heineken's trademark issues
The global beer-maker has accused Wujiang Xili Machinery Factory from Jiangsu province of copying its name and logo. Wujiang Xili used the Heineken name and logo at the Shanghai trade show at the end of September. The FT quoted Joe Simone, a partner at SIPS, who is acting on behalf of Heineken as saying “a pirate that steals your trademark can effectively stop you from entering the PRC market and using Chinese factories to produce goods for global distribution.”
Source: FT
The article comes as market participants are reviewing the long-awaited amendments to the PRC Trademark Law (中华人民共和国商标法). The Law has increased penalties for infringement and the burden on defendants to prove that applications were made in bad faith. However, the amendments have also meant that foreign companies need to ensure opposition hearings go their way, because if they fail to get the mark cancelled during proceedings, it will be registered. The Heineken case highlights that any foreign brand owner is susceptible to China's rampant trademark hijacking.
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Companies feel government's data privacy effort
The piece from Herbert Smith Freehills mentions how prosecution of data privacy violations has increased this year, in addition to new regulations being issued. Chinese prosecutors have reported 30 cases of personal data theft, involving 57 suspects in the first half of 2013. By contrast there was only one case, involving eight suspects in the first half of 2012.
Source: Herbert Smith Freehills
Data privacy has been a hot topic in China this year and the statistics provided in this piece show that enforcement is set to continue. The problem with introducing such a new concept in China means that companies are unsure what has to be kept confidential and what does not. The legislation is also unclear. Companies that outsource HR activities should also make sure that employees have consented to any such information being transferred. The ChinaWhys case should also be a lesson to employers and an example of this heightened enforcement regime.
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