In the news: Range Rover gets copied, Microsoft is fined and the NDRC may lift drug price caps

Chinese LandWind copies Range Rover Evoque

British multinational carmaker Jaguar may file a lawsuit against LandWind, a joint venture of Changan Auto and Jiangling Motors, for releasing a model that is an imitation of (and a third of the price of) the Range Rover Evoque. Jaguar has said the copying in China “is very disappointing” and that infringing the IP it owns is “in breach of international regulations”. It is likely to enforce its rights against the Chinese manufacturer by claiming copyright, trademark, patent and design infringement as well as violation of laws of deceptive conduct. As competition in the car industry gets stronger, imitating foreign luxury brands is still a key strategy for smaller domestic carmakers. This case serves as a reminder to all owners to review their IP portfolios and make sure all registrations are in use, valid and enforceable in China.

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China charges Microsoft US$140 million for tax evasion

The Chinese government has charged company M US$140 million in back taxes and interest. The report suggested that while the company's China-based businesses were officially lossmaking, its profits were being directed to offshore tax havens and claimed that Microsoft had admitted to the tax evasion. But the Seattle-based company contradicted these claims of back taxes and said it had agreed with the authorities to pay US$140 million as a bilateral advanced pricing agreement. Although it hasn't been confirmed whether company M is indeed Microsoft, the penalised company's financial profile matches that of the US-based tech giant. Transfer pricing has long been a grey area under PRC law and despite the complaints about targeting foreign businesses (Microsoft has faced a particularly rough year), this may be the start of a more consistent crackdown.

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NDRC may lift price caps on drugs

The NDRC is considering lifting price caps on most drugs sold in the country in order to let the market set prices. It will impose measures to keep drug costs from spiking, according to a proposal drafted by the Commission that was sent to drug industry groups. The changes will be effective on January 1 2015. China controls prices of most medicines through caps and other methods such as state-run tenders to contain healthcare costs. The proposal says prices for patented drugs will be determined in negotiations, but did not elaborate on how the process would work. The controls have been criticised for leading to supply shortages of critical drugs, which led China to remove caps on a limited number of drugs in April. The complete removal of price caps should lift pressures on both local and international pharmaceutical firms aiming to tap the country's healthcare market.

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Tencent signs deal with HBO

Tencent Holdings has made a deal with Time Warner's HBO network to allow Chinese viewers to stream HBO television shows, making Tencent the exclusive online provider in the country of series such as Game of Thrones, True Detective and Boardwalk Empire. Although Chinese internet TV companies have spent over US$1 billion on foreign content in the last two years, regulators have increased scrutiny over the previously unrestricted industry. It is clear that China is still trying to protect its developing TV and film industry from foreign competition. Despite being a high-profile deal, it will undoubtedly draw attention from either the internet or broadcasting authorities.

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