Labor Contract Law of China

The Labor Contract Law of the People’s Republic of China, adopted at the 28th Session of the Standing Committee of  the 10th National  People’s Congress of the People’s Republic of China on June 29, 2007, is hereby promulgated and shall come into effect on January 1, 2008.

Hu Jintao
President of the People’s Republic of China
June 29, 2007

Contents

Chapter I   General Provisions

Chapter II   Conclusion of Labor Contracts

Chapter III   Performance and Amendment of Labor Contracts

Chapter IV  Revocation and Termination of Labor Contracts

Chapter V  Special Provisions

-Part I  Collective Contracts
-Part II Work Placement
-Part III  Part-time Labor

Chapter VI  Supervision and Inspection

Chapter VII  Legal Liability

Chapter VIII  Supplementary Provisions
Labor Contract Law
of the People’s Republic of China

Chapter 1 General Provisions

Article 1  This Law is formulated to improve the labor contract system, to specify the rights and obligations of the parties to labor contracts, to protect the legitimate rights and interests of workers, and to build and develop harmonious and stable employment relationships.

Article 2  This Law applies to the establishment of labor relationships between, the conclusion of, performance of, amendment of, revocation of and termination of, labor contracts by workers and organizations such as enterprises, individual economic organizations and private non-enterprise units in the People’s Republic of China (“Employers”).

The conclusion, performance, amendment, revocation and termination of labor contracts between state authorities, institutions or social organizations and workers with whom they establish employment relationships, shall be subject to this law.

Article 3  The conclusion of a labor contract shall be based on the principles of lawfulness, fairness, equality, voluntariness, negotiated consensus and good faith. A lawfully concluded labor contract shall have binding force, both the Employer and the employee shall perform their respective obligations stipulated therein.

Article 4  Employers shall formulate and improve labor rules and regulations in accordance with the law, so as to ensure that employees enjoy their labor rights and perform their labor obligations.

The formulations, amendments and decisions made by Employers with respect to rules on labor compensation, working hours, leave and rest, occupational safety and hygiene, insurance and welfare, training, work discipline or work quota management, etc., which have a direct impact on employees’ immediate rights and interests, or other material matters, shall be presented to and discussed with the employee representative congress or all the employees, and the proposal and advice thereof shall be determined after consultation with the labor union or employee representative on the basis of equality.

If, during the implementation of a rule or regulation or decision on a material matter, the labor union or any of the employees deems it inappropriate, they shall be entitled to raise the issue with the Employer and have it amended after consultation.

The Employer shall make rules, regulations and decisions on material matters that have a direct impact on employees’ immediate interests and rights, public or communicate the same to the employees.

Article 5  The labor administration authorities of the People’s Governments at the county level and above shall, together with labor unions and enterprise representatives, establish a comprehensive tri-partite mechanism for the co-ordination of employment relationships, in order to jointly study and resolve material issues relating to employment relationships.

Article 6   The labor union shall assist and guide workers in the conclusion and performance of labor contracts with their Employer, and establish a collective consultation mechanism with the Employer in order to protect the lawful rights and interests of workers.

Chapter II Conclusion of Labor Contracts

Article 7  The employment relationship between an Employer and an employee shall commence on the date the employee commences work. The Employer shall keep a register of employees, for future reference.

Article 8   The Employer shall truthfully advise the employee of the scope of work, the working conditions, the place of work, occupational hazards, production safety conditions, labor compensation and other matters requested by the employee; the Employer shall be entitled to the worker basic information of the employee that directly relates to the labor contract, and the employee shall truthfully provide the same.

Article 9  When hiring an employee, the Employer shall not retain the employee’s resident ID card or other documentation, nor demand the employee to provide security or collect property from him/her under some other guise.

Article 10  A written labor contract shall be concluded when establishing an employment relationship.

Where an employment relationship has been established without the conclusion of a written labor contract, the written labor contract shall be concluded within one (1) month from the date the employee commences work.

Where an Employer and an employee conclude a labor contract before the employee commences work, the employment relationship shall be established on the date the employee commences work.

Article 11  Where an Employer fails to conclude a written labor contract with an employee before the employee commences work, and it is unclear what labor compensation was agreed upon with the employee, the labor compensation for the newly recruited employee shall be paid in accordance with the standards stipulated in the collective contract; where there is no collective contract or the collective contract is silent on the matter, the principle of equal pay for equal work shall apply.

Article 12  Labor contracts are divided into fixed-term labor contracts, open-ended labor contracts and labor contracts that terminate upon the completion of a certain task.

Article 13  A ‘fixed-term labor contract’ refers to a labor contract where the termination date has been agreed upon by the Employer and the employee.

A fixed-term labor contract may be concluded between an Employer and an employee upon consultation.

Article 14  An ‘open-ended labor contract’ refers to a labor contract where the Employer and the employee have agreed not to stipulate a definite termination date.

An open-ended labor contract may be concluded between an Employer and an employee upon consultation. If an employee proposes or agrees to renew and conclude a labor contract in any of the following circumstances, an open-ended labor contract shall be concluded, unless the employee requests the conclusion of a fixed-term labor contract instead:

(1) The employee has been working for the Employer for ten (10) consecutive years;

(2) When the Employer first introduces the labor contract system or the state-owned enterprise that employs him re-concludes its labor contracts as of restructuring, the employee has been working for the Employer for ten (10) consecutive years and is less than 10 years away from his legal retirement age; or

(3) Where a labor contract was concluded as a fixed-term labor contract on two consecutive occasions and the employee, in the absence of any of the circumstances stipulated in Article 39 and items (1) and (2) of Article 40 of this law, renews such contract.

If an Employer fails to conclude a written labor contract with an employee within one (1) year from the date the employee commences work, they shall be deemed to have entered into an open-ended labor contract.

Article 15  A ‘labor contract that terminates upon the completion of a certain task’ refers to a labor contract where the Employer and the employee have agreed that the contractual term is based on the completion of a specific task.

An Employer and an employee may, upon consultation, conclude a labor contract with a term that is based on the completion of a certain task.

Article 16 A labor contract shall become effective after the Employer and the employee have both signed or sealed such contract upon reaching a negotiated consensus.

The Employer and the employee shall each keep one copy of the employment agreement.

Article 17  A labor contract shall include the following items:

(1) name, domicile and legal representative or main person in-charge of the Employer;

(2) name, residential address and number of the resident ID card or other valid identity document number of the worker;

(3) term of the labor contract;

(4) scope of work and place of work;

(5) working hours, rest and leave;

(6) labor compensation;

(7) social insurance;

(8) labor protection, working conditions and protection against occupational hazards; and

(9) other issues required by laws and regulations to be included in the labor contract.

Apart from the mandatory terms mentioned above, an Employer and an employee may agree to include other matters in the labor contract such as probation period, training, confidentiality, supplementary insurance and welfare, etc.

Article 18  Should a dispute arise due to the ambiguous nature of the standards for labor compensation or working conditions or other matters, the Employer and employee may renegotiate; if such negotiation fails, the provisions of the collective contract shall apply. If there is no collective contract or if the collective contract is silent on the issue of labor compensation, the principle of equal pay for equal work shall apply; if there is no collective contract or the collective contract is silent on the standards for working conditions or other matters, the relevant regulations of the State shall apply.

Article 19  If a labor contract has a term of more than three months but less than one year, the probation period may not exceed one month; if a labor contract has a term of more than one year but less than three years, the probation period may not exceed two months; for a fixed-term labor contract with a term of more than three years and an open-ended labor contract, the probation period may not exceed six months.

The same Employer may only stipulate one probation period with any given employee.

The probation period shall not apply to labor contracts with a term of less than three months or to labor contracts that terminate upon the completion of a certain task.

The probation period shall form part of the term of the labor contract. If a labor contract merely contains a probation period, such probation period shall be rendered void and be deemed as the term of the labor contract.

Article 20  The wages paid to employees during their probation period shall not be less than the minimum wage level for the same position with the Employer or less than 80% of the wage agreed upon in the labor contract, and shall not be less than the minimum wage of the place where the Employer is located.

Article 21  An Employer shall not terminate the labor contract during the probation period unless the employee falls into any of the circumstances stipulated in Article 39 and items (1) and (2) of Article 40 of this law. If an Employer terminates a labor contract during the probation period, it shall explain the reasons to the employee.

Article 22   If an Employer is paying for a worker’s special training expenses and providing him with professional technical training, it may enter into an agreement specifying a term of service with such employee.

If the employee breaches the agreed term of service, he shall pay liquidated damages to the Employer in accordance with the terms of the agreement. The amount of the liquidated damages shall not exceed the amount of the training allowance provided by the Employer. The amount of the liquidated damages required by the Employer shall not exceed the portion of the training allowance allocated to the unperformed portion of the term of service.
The agreement between an Employer and an employee on a term of service shall not affect the increment of the worker’s labor compensation during the term of service in accordance with the normal wage adjustment mechanism.

Article 23  An Employer and an employee may include in their labor contract confidentiality provisions in respect of the Employer’s trade secrets and other confidential matters with regard to intellectual property.

If an employee has a confidentiality obligation, the Employer may contract with the worker to include non-competition provisions in the labor contract or confidentiality agreement, and agree to pay financial compensation to the employee on a monthly basis during the non-competition period after the termination or revocation of the labor contract. If the employee breaches the non-competition provisions, he shall pay liquidated damages to the Employer in accordance with the stipulated terms.

Article 24  The personnel subject to non-competition obligations shall be limited to the Employer’s senior management, senior technicians and other individuals with confidentiality obligations. The scope, geographical limitations and term of the non-competition obligations shall be agreed upon by the Employer and the employee, and they shall not violate any laws and regulations.

After the revocation or termination of a labor contract, the non-competition period for any of the persons mentioned in the preceding paragraph in terms of his working for a competing Employer that produces or deals with the same type of products or engages in the same type of business, or in terms of his setting up his own business to produce or deal with the same type of products or to engage in the same type of business, shall not exceed two years.

Article 25  Save for circumstances stipulated in Article 22 and Article 23 of this law, an Employer shall not enter into an agreement with an employee regarding liquidated damages to be borne by the employee.

Article 26  A labor contract shall be wholly or partially invalid if:

(1) through fraud, coercion or exploitation of the other party’s disadvantageous position, a party causes the other party to conclude or amend the labor contract  against the latter’s true intent;

(2) the labor contract absolves the Employer from legal liability and denies the employee his rights; or

(3) the labor contract is in violation of the mandatory provisions of laws or administrative regulations.

If there is any dispute over the invalidity or partial invalidity of the labor contract, it   shall be subject to determination by a labor dispute arbitration institution or a People’s court.

Article 27  The partial invalidity of the labor contract shall not affect the validity of the remaining part of the contract, the remaining provisions shall continue to be valid.

Article 28  Where a labor contract is held to be invalid and the worker has performed his obligations, the Employer shall pay the employee labor compensation for such obligations. The amount of labor compensation shall be determined with reference to the labor compensation for employee s in the same or a similar position with the Employer.

Chapter III Performance and Amendment of Labor Contracts

Article 29 The Employer and the employee shall fully perform their respective obligations in accordance with the terms of the labor contract.

Article 30  Employers shall pay their employees labor compensation on time and in full in accordance with the labor contract and state regulations.

An employee may, in accordance with the law, apply for an order to pay at the local People’s Court in the event that the Employer fails to pay his labor compensation on time or in full, and the People’s Court shall issue such order in accordance with the law.

Article 31  An Employer shall strictly implement the work quota standards, and shall not force or in a disguised manner force any worker to work overtime. In the event that the Employer arranges for a worker to work overtime, it shall pay overtime wages to the employee in accordance with the relevant state regulations.

Article 32  The refusal of an employee to perform dangerous tasks shall not be deemed as a breach of contract if he is forced to do so by the management staff of the Employer or if the instruction to do so is made in violation of regulations.

Employee s shall have the right to criticize, report to the authorities or bring charges against their Employers in respect of working conditions that would endanger their lives and health.

Article 33 A change in the Employer’s name, legal representative, main person-in-charge or investor, or in relation to other matters shall not affect the performance of the labor contract.

Article 34 In the event of a consolidation or division, etc., the original labor contracts shall continue to be valid and performed by the Employer(s) which succeeded to the rights and obligations of the original Employer.

Article 35 An Employer and an employee may amend the provisions of the labor contract if they so agree upon consultation. Amendments to a labor contract shall be made in writing.

The Employer and the employee shall each hold one copy of the amended labor contract.

Chapter IV Revocation and Termination of Labor Contracts

Article 36 An Employer and an employee may terminate their labor contrast if they so agree after consultation.

Article 37 An employee may terminate the labor contract upon giving his Employer 30 days’ prior written notice. An employee may terminate his labor contract during the probation period by giving the Employer 3 days’ prior notice.

Article 38 An employee may terminate his labor contract if his Employer:

(1) fails to provide work protection or working conditions as stipulated in the labor contract;

(2) fails to pay labor compensation in full or on time;

(3) fails to pay the social insurance premium for the employee in accordance with the law;

(4) adopts rules or regulations that are in violation of laws or regulations, thereby impairing the employee’s rights and interests;

(5) causes the labor contract to be invalid due to any of the circumstances stipulated in the first paragraph of Article 26 of this Law; or

(6) causes the occurrence of a circumstance in which laws or administrative regulations allow the worker to terminate the labor contract.

If an Employer uses violence, threats or unlawful restriction of personal freedom to force an employee to work, or if an Employer forces or instructs an employee to perform dangerous tasks which would endanger his personal safety in violation of rules or regulations, the employee may terminate his labor contract immediately without giving any prior notice to the Employer.

Article 39 An Employer may terminate the labor contract if the employee:

(1) fails to meet the requirements for employment during the probation period;

(2) materially breaches the Employer’s rules and regulations;

(3) causes substantial loss to the Employer due to his serious dereliction of duty or engagement in graft for personal gain;

(4)  establishes an employment relationship with another Employer simultaneously which materially affects the completion of his task with the original Employer, or he refuses to rectify the situation after being cautioned by the Employer;

(5) causes the labor contract to be invalid due to any of the circumstances stipulated in item (1) of the first paragraph of Article 26 of this Law; or

(6) is subject to criminal liability in accordance with the law.

Article 40  An Employer may terminate the labor contract under any of the following circumstances by giving the employee 30 days’ prior written notice or one month’s wages in lieu of notice:

(1) where the employee is unable to resume his original work nor engage in other work arranged for him by the Employer after the expiration of the prescribed medical treatment period for an illness or non-work-related injury;

(2) where the employee is incompetent and remains incompetent after training or adjustment of his position; or

(3) a material change in the objective circumstances relied upon at the time of conclusion of the labor contract renders it impossible for the parties to perform and, after consultation, the Employer and the employee are unable to reach an agreement on amending the labor contract.

Article 41 If any of the following circumstances make it necessary to reduce the workforce by 20 persons or more, or less than 20 persons but accounting for 10% or more of the total number of employees of the Employer, the Employer may only do so after it has explained the situation to the labor union or to all of its employees 30 days in advance, has considered the opinions of the labor union or the employees,  and has submitted its workforce layoff plan to the labor administrative department:

(1) restructuring pursuant to the Enterprise Bankruptcy Law;

(2) serious difficulties in production and/ or business operation;

(3) the enterprise switches production, introduces significant technological innovation or adjusts its business model, and still needs to reduce its workforce after amending the labor contracts; or

(4)  a material change in the objective economic conditions relied upon at the time of conclusion of the labor contracts renders it impossible for the parties to perform.

When reducing its workforce, the Employer shall retain in priority personnel:

(1) who have concluded a fixed-term labor contract with the Employer with a relatively long term;

(2) who have concluded an open-ended labor contract with the Employer; or

(3) who are the sole bread winner in the family and dependent family members who are elderly or minors.

If an Employer that has reduced its workforce pursuant to the first paragraph hereof intends to hire new employees again within 6 months, it shall notify the employees dismissed at the time of the layoff and such employees shall have priority to be re-hired under the same conditions.

Article 42 An Employer shall not terminate a labor contract under Articles 40 and 41 of this Law if the employee:

(1) is engaged in operations that would expose him to occupational disease hazards and has not undergone a occupational health check-up before leaving work, or is suspected of having contracted an occupational disease and is being diagnosed  or under medical observation;

(2) has been confirmed as having lost or partially lost his capacity to work due to an occupational disease contracted or a work-related injury sustained during his employment with the Employer;

(3) has contracted an illness or sustained a non-work-related injury and the prescribed period of medical treatment has not expired;

(4) is a female worker  in her pregnancy, confinement or nursing period;

(5) has been working for the Employer continuously for not less than 15 years and is less than 5 years away from the legal retirement age; or

(6) falls into any other circumstances stipulated by laws or administrative regulations.

Article 43 If an Employer is to terminate a labor contract unilaterally, it shall first inform the labor union of the reasons. The labor union shall have the right to demand that the Employer make the necessary adjustment if the Employer violates laws, administrative regulations or the labor contract. The Employer shall consider the opinions of the labor union and notify the labor union in writing of the outcome of its handling of the matter.

Article 44 A labor contract is terminated if:

(1) the contract term expires;

(2) the employee has started to enjoy his entitlement to basic old-age insurance pension in accordance with the law;

(3) the worker is deceased, or is declared dead or missing by a people’s court;

(4) the Employer is declared bankrupt in accordance with law;

(5) the Employer has its business license revoked, is ordered to close or is closed down, or the Employer decides on early dissolution; or

(6) other circumstances stipulated by laws or administrative regulations arise.

Article 45 Despite the expiration of a labor contract, if any of the circumstances prescribed in Article 42 of this Law applies, the labor contract shall be extended until the relevant circumstance ceases to exist, at which point the contract shall come to an end. However, the termination of a labor contract resulting from the loss of capacity, wholly or partially, to work as prescribed in item (2) of Article 42 hereof shall be handled in accordance with relevant state regulations on work-related injury insurance.

Article 46  The Employer shall pay the employee financial compensation in any of the following circumstances:

(1) the labor contract is terminated by the employee in accordance with Article 38 hereof;

(2) the Employer proposes to terminate the labor contract pursuant to Article 36 hereof and the labor contract is terminated as a result after the Employer and the employee reach an agreement thereon after consultation;

(3) the labor contract is terminated by the Employer in accordance with Article 40 hereof;

(4) the labor contract is terminated by the Employer in accordance with the first paragraph of Article 41 hereof;

(5) the labor contract is a fixed term contract that terminates in accordance with item (1) of Article 44 hereof, save where the employee refuses to renew the labor contract even though the conditions offered by the Employer are the same as or better than those stipulated in the current contract;

(6) the labor contract is terminated in accordance with items (4) and (5) of Article 44 hereof; or

(7) other circumstances stipulated by laws or administrative regulations.

Article 47 An employee shall be paid financial compensation based on the number of years he has worked for the Employer at the rate of one month’s wages for each full year worked. Any period of not less than 6 months but less than one year shall be counted as one year. The financial compensation payable to a worker for any period of less than 6 months shall be one-half of his monthly wage.

If the monthly wage of a worker is three times greater than the average monthly wage in the previous year for employees as announced by the people’s government at the municipal level directly under the central government or at the city-with-district level where the Employer is located, the rate for the financial compensations paid to him shall be three times the average monthly wage of employees and shall be for not more than 12 years of work.

The term “monthly wage” as mentioned in this Article refers to the worker’s average wage for the 12 months prior to revocation or termination of his labor contract.

Article 48 If an Employer terminates or ends a labor contract in violation of this Law and the employee demands continued performance of such contract, the Employer shall continue performing the same. If the employee does not demand continued performance of the labor contract or if continued performance of the employment contract has become impossible, the Employer shall pay the employee compensation in accordance with Article 87 hereof.

Article 49 The State will adopt measures to establish a comprehensive system that enables worker’s social insurance accounts to be transferred from one region to another and to be continued in such other region.

Article 50 At the time of revocation or termination of a labor contract, the Employer shall issue a certificate of revocation or termination of the labor contract and conduct, within 15 days, the procedures for the transfer of the employee’s file and social insurance account.

The employee shall carry out the procedures for the handover of his work as agreed by the parties. If relevant provisions of this law require the Employer to pay the worker financial compensation, it shall do so upon completion of the procedures for the handover of the work.

The Employer shall have the revoked or terminated labor contracts on file for at least two years, for reference purposes.

Chapter V   Special Provisions

Part I Collective Contracts

Article 51 After consultation on an equal basis, enterprise employees, as one party, and their Employer may conclude a collective contract on such matters as labor compensation, working hours, rest, leave, work safety and hygiene, insurance, benefits, etc. The draft of the collective contract shall be presented to the employee representative congress or all the employees for discussion and approval.

A collective contract shall be concluded by the labor union, representing the enterprise employee, and the Employer. If the Employer has yet to establish a labor union, it shall conclude the contract with a representative nominated by the employees under the guidance of the labor union at the next higher level.

Article 52 Enterprise employees, as one party, may enter into a special collective contract with the Employer with regard to issues concerning work safety and hygiene, protection of female workers’ rights and interests, wage adjustment mechanism, etc.

Article 53 In areas below the county level, industry-based or area-based collective contracts may be concluded between the labor union and a representative of the enterprise in industries such as construction, mining, catering services, etc.

Article 54 After a collective contract is concluded, it shall be submitted to the labor administrative department. The collective contract shall become effective if within 15 days after receipt of the same, the labor administrative department does not raise any objection to the contract.

A collective contract that has been concluded in accordance with the law shall be binding upon the Employer and the employees. An industry-based or region-based collective contract shall be binding upon the Employers and the employees in the industry or in the area in the locality concerned.

Article 55 The criteria for labor compensation, working conditions, etc. as stipulated in a collective contract shall not be lower than the minimum criteria prescribed by the local people’s government; the criteria for labor compensation, working conditions, etc. as stipulated in the labor contract between an Employer and an employee shall not be lower than those stipulated in the collective contract.

Article 56 If an Employer breaches the collective contract and infringes upon the employees’ labor rights and interests, the labor union may, in accordance with the law, demand that the Employer assume liability; if a dispute arising from the performance of the collective contract is not resolved after friendly negotiations, the labor union may apply for arbitration and institute legal proceedings in accordance with the law.

Part II Work placement

Article 57 Staffing firms shall be established in accordance with the relevant provisions of the Company Law and have registered capital of not less than RMB 500,000.

Article 58 Staffing firms are Employers as referred to in this Law and shall perform an Employer’s obligations toward its employees. The labor contract between a staffing firm and an employee to be placed shall, in addition to the matters stipulated in Article 17 of this law, specify matters such as the entity to which the employee will be dispatched, the term of his placement, his position, etc.

Staffing firms shall conclude a fixed term labor contract with a term of not less than two years with employees to be placed, and pay labor remuneration on a monthly basis. During periods when there is no work for the employees to be placed, staffing firms shall pay such workers remuneration on a monthly basis at the minimum wage rate as prescribed by the people’s government of the place where the staffing firms are located.

Article 59 When placing employees, staffing firms shall enter into staffing agreements with the entities that accept the employees under the placement arrangements (“Accepting Entities”). The staffing agreements shall stipulate the job positions in which the employees are to be placed, the number of persons placed, the term of placement, the amount and method of payment of labor remuneration and social insurance premiums, and the liability for breach of agreement.

An Accepting Entity shall decide with the staffing firm on the term of placement based on the actual requirements of the job position, and it may not conclude several short-term placement agreements to cover a continuous term of labor use.

Article 60 Staffing firms shall advise the employees placed of the content of the placement agreements.

Staffing firms shall not retain part of the labor remuneration paid by the Accepting Entities to the workers in accordance with the placement agreements.

Staffing firms and Accepting Entities shall not demand any fees from the workers.

Article 61 If a staffing firm places an employee with an Accepting Entity in another region, the employee’s labor remuneration and working conditions shall be in line with the standards of the place where the Accepting Entity is located.

Article 62 An Accepting Entity shall perform the following obligations:

(1) implement state labor standards and provide the corresponding working conditions and labor protection;

(2) notify the job requirements and labor remuneration to the employees placed;

(3) pay overtime wages and performance bonuses, and provide welfare benefits appropriate for the job positions;

(4) provide the employees with the training necessary for their job positions; and

(5) implement a normal wage adjustment mechanism for continuous placement.

An Accepting Entity shall not in turn place an employee with another Employer.

Article 63 Placed workers shall be entitled to receive the same pay as that received by the employees of the Accepting Entity for the same work. If the Accepting Entity does not have any employee for the same position, the labor remuneration shall be determined based on the labor remuneration paid to employees in the same or similar position at the place where the Accepting Entity is located..

Article 64 Placed workers shall have the right to join labor unions through staffing firms or Accepting Entities or organize such unions in accordance with the law, so as to protect their lawful rights and interests.

Article 65 Placed workers may terminate their labor contracts with their staffing firms in accordance with Article 36 or 38 of this Law.

If a placed worker falls into any of the circumstances stipulated in Article 39 and items (1) and (2) of Article 40 of this Law, the Accepting Entity may return the worker to the staffing firm, which may terminate its labor contract with him in accordance with the relevant provisions of this Law.

Article 66 Work placement shall generally be implemented in respect of job positions of a temporary, auxiliary or substitute nature.

Article 67 Employers shall not establish staffing firms to place workers with themselves or their subsidiaries.

Section III  Part-time Labor

Article 68 The term “part-time labor” refers to a form of labor for which the remuneration is mainly calculated on an hourly basis, and the employee’s average daily working hours shall not exceed 4 hours and the aggregate working hours per week shall not exceed 24 hours for the same Employer.

Article 69 Both parties to part-time labor may conclude an oral agreement.

An employee who engages in part-time labor may conclude a labor contract with one or more Employers, but a subsequently concluded labor contract shall not affect the performance of a previously concluded labor contract.

Article 70 Both parties to part-time labor shall not stipulate a probation period.

Article 71  Either party to part-time labor may notify the other party at any time to terminate employment. Upon termination of employment, the Employer will not have to pay severance pay to the employee.

Article 72  The hourly remuneration rate for part-time labor shall not be lower than the minimum hourly wage rate prescribed by the local people’s government of the place where the Employer is located.

The maximum remuneration settlement and payment term for part-time labor shall not exceed 15 days.

Chapter VI  Supervision and Inspection

Article 73 The labor administrative department of the State Council shall be responsible for supervising and managing the implementation of the employment contract system throughout the country.

The labor administrative departments of the local people’s governments at the county level or above shall be responsible for supervising and managing the implementation of the labor contract system in their respective administrative jurisdictions.

The labor administrative departments of the people’s governments at the county level or above shall solicit the opinions of the labor unions, enterprise representatives and the authorities in charge of the industries concerned in the course of supervising and managing the implementation of the labor contract system.

Article 74  The labor administrative departments of the local people’s governments at the county level or above shall supervise and inspect the following matters in the implementation of the labor contract system in accordance with the law:

(1) Employers’ formulation of rules and regulations directly related to the immediate interests of workers, and the implementation thereof;

(2) the conclusion and termination of labor contracts between Employers and employees;

(3) compliance with relevant regulations regarding work placement by staffing firms and Accepting Entities;

(4) Employers’ compliance with relevant regulations regarding employee’s working hours, rest and leave;

(5) payment of labor remuneration as specified in the labor contracts and implementation of minimum wage rates by Employers;

(6) Employers’ participation in various types of social insurance and payment of social insurance premiums; and

(7) other labor matters as prescribed by laws and regulations.

Article 75 During the supervision and inspection process, the labor administrative department of a local people’s government at the county level or above shall have the authority to review materials relating to labor contracts and collective contracts, and to conduct on-the-spot workplace inspection. Both the Employers and the workers shall truthfully provide relevant information and materials.

When performing their supervision and inspection duties, the working personnel of a labor administrative department shall show their IDs, exercise their powers and functions in accordance with the law and enforce the law in a well-disciplined manner.

Article 76 The supervising and administrative departments in charge of construction, health, production safety, etc., of the people’s governments at the county level or above shall, to the extent of the respective purviews, supervise and manage the implementation of labor contract system by Employers.

Article 77 A worker whose lawful rights and interests have been infringed upon shall have the right to request the relevant authority to deal with the matter in accordance with the law, or to apply for arbitration or institute legal proceedings in accordance with the law.

Article 78 Labor unions shall safeguard the lawful rights and interests of workers in accordance with the law, and supervise the performance of labor contracts and collective contracts by Employers. If an Employer violates any labor laws or regulations or breaches a labor contract or collective contract, the labor union shall have the right to put forward its opinions or request that the matter be rectified; if a worker applies for arbitration or institutes legal proceedings, the labor union shall provide support and assistance in accordance with the law.

Article 79 Any organization or individual may report any violation of this law. The labor administrative departments of the people’s governments at the county level or above shall verify and handle the matter in a timely manner and reward those who have provided valuable information.

Chapter VII Legal Liability

Article 80 Where regulations with a direct bearing on the immediate interests of an employee are formulated by an Employer in violation of law or regulations, the labor administrative department shall order rectification and issue a warning; the Employer shall be liable for damages for any harm or loss caused to the employee by such regulations.

Article 81  In case of failure by an Employer to set out the mandatory clauses in the labor contract as prescribed by this Law or to deliver the text of the labor contract to the employee, the labor administrative department shall order rectification thereof; the Employer shall be liable for damages for any harm or loss caused to the employee by such failure.

Article 82 If an Employer concludes a written labor contract with an employee more than one month but less than one year after the date on which the employee has started work, the Employer shall, each month, pay to the employee twice his wage.

If an Employer fails, in violation of this Law, to conclude an open-ended labor contract with an employee, it shall, each month, pay to the employee twice his wage, starting from the date on which the open-ended labor contract should have been concluded.

Article 83 If the probation period concluded between an Employer and an employee violates this Law, the labor administrative department shall order rectification. If such probation period has been carried out, the Employer shall pay compensation to the employee according to the time worked on probation beyond the statutory probation period, at the rate of the worker’s monthly wage following the completion of his probation.

Article 84 If an Employer violates this law by retaining an employee’s resident ID card or other identity certificates, the labor administrative department shall order the same to be returned to the employee within a specific period of time and impose punishment in accordance with the provisions of relevant laws.

If an Employer violates this Law by seizing property from an employee as security or under some other guise, the labor administrative department shall order the same to be returned to the employee within a specific period of time and impose a fine on the Employer of not less than RMB 500 and not more than RMB 2,000 for each person; the Employer shall be liable for damages for any harm or loss caused to the employee as a result thereof.

If an Employer retains an employee’s file or property after the employee has terminated or ended the labor contract in accordance with the law, punishment shall be imposed in accordance with the provisions of the preceding paragraph.

Article 85 If an Employer falls into any of the following circumstances, the labor administrative department shall order the Employer to pay labor remuneration, overtime wages or financial compensation within a specific period of time. If the labor remuneration is lower than the local minimum wage rate, the Employer shall pay the shortfall; if the payment is not made within the time limit, the Employer shall be ordered to pay extra damages to the employee at a rate of not less than 50% and not more than 100% of the amount payable.

(1) failing to pay an employee his labor remuneration in full and on time as stipulated in the labor contract or as prescribed by the State;

(2) paying an employee labor remuneration below the local minimum wage rate;

(3) failing to pay overtime wages despite the arrangement for overtime work; or

(4) revoking or terminating a labor contract without paying the employee financial compensation pursuant to this Law.

Article 86 If a labor contract is declared invalid in accordance with Article 26 of this law, the party at fault shall be liable for damages for any harm or loss caused to the other party.

Article 87 If an Employer revokes or terminates a labor contract in violation of this Law, it shall pay the employee double the amount of damages provided for in Article 47 of this law.

Article 88 If an Employer falls into any of the following circumstances, it shall be subjected to administrative punishment; if such conduct constitutes a crime, criminal liability shall be pursued in accordance with the law; if the employee suffers any harm or loss as a result thereof, the Employer shall be liable for damages:

(1) force an employee to work through the use of violence, coercion or unlawful restriction of personal freedom;

(2) order an employee to perform dangerous tasks that would endanger his life in violation of rules and regulations, or by force;

(3) insult, corporally punish, assault, illegally search or detain an employee; or

(4) provide poor working conditions or a severely polluted environment, resulting in serious damage to the physical and mental health of the employee.

Article 89 If an Employer fails, in violation of this Law, to issue to an employee a certificate evidencing the termination or revocation of his employment contract, the labor administrative department shall order rectification; if the employee suffers any loss as a result of such failure, the Employer shall be liable for damages.

Article 90 If an employee terminates his labor contract in violation of this Law or breaches the confidentiality or non-competition obligations stipulated in the labor contract, he shall be liable for damages for any loss caused to the Employer as a result of such violation or breach.

Article 91  If an Employer hires an employee whose employment contract with another Employer has not yet been terminated or revoked, thereby causing the other Employer to suffer loss, the first-mentioned Employer and the employee shall be jointly and severally liable for damages.

Article 92 If a staffing firm violates this Law, the labor administrative department and other relevant competent authorities shall order it to rectify the situation. If the situation is serious, a fine of not less than RMB 1,000 and not more than RMB 5,000 for each person shall be imposed, and the administrative department for industry and commerce shall revoke the business license. If the worker placed suffers any harm or loss, the staffing firm and the Accepting Entity shall be jointly and severally liable for damages.

Article 93  If an Employer without lawful business operation qualifications commits an illegal or a criminal act, it shall be pursued in accordance with the law. For labor already performed by its employees, the Employer or its investors shall pay them labor remuneration, severance pay or damages in accordance with the relevant provisions of this Law. If the employees suffer any harm or loss as a result thereof, it shall be liable for damages.

Article 94  Where an individual as a business operation contractor hires workers in violation of this Law and thereby causes harm or loss to such workers, the organization that employs such contractor and the contractor shall be jointly and severally liable for damages.

Article 95 If a labor administrative authority or any other relevant administrative authority or any of their personnel neglects its/his duties, fails to perform its/his statutory duties or exercises its/his authority in violation of the Law, thereby causing harm or loss to an employee or an Employer, it/he shall be liable for damages; the direct supervisor in charge and the other persons directly responsible shall be subjected to administrative punishment in accordance with the law, if a criminal offense is constituted, criminal liability shall be pursued in accordance with the law.

Chapter VIII Supplementary Provisions

Article 96 Where laws or administrative regulations provide, or the State Council has formulated separate regulations with respect to the conclusion, performance, amendment, termination or revocation of labor contracts by and between institutions and those of their personnel that are subject to the labor system, those matters shall be handled in accordance with such regulations; in the absence of such regulations, matters shall be handled in accordance with this Law.

Article 97 Labor contracts concluded in accordance with the law before the implementation of this Law and continuing to exist on the implementation date of this Law shall continue to be performed. For the purpose of item (3) of the second paragraph of Article 14 hereof, the number of consecutive occasions on which a fixed-term labor contract is concluded shall be counted from the first renewal of such contract to occur after the implementation of this Law.

If an employment relationship was established prior to the implementation of this Law without a written labor contract, such contract shall be concluded within one month from the implementation of this Law.

If a labor contract existing on the implementation date of this Law is terminated or revoked after the implementation of this Law and, in accordance with Article 46 hereof, financial compensation is payable, the number of years for which financial compensation is payable shall be counted from the implementation date of this Law. If, pursuant to relevant regulations in force prior to the implementation of this Law, the employee is entitled to financial compensation from the Employer in respect of a period preceding the implementation of this Law, the matter shall be handled in accordance with the relevant regulations that were in force at that time.

Article 98 This Law shall be implemented from January 1, 2008.

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Implementing Regulations of the Trademark Law of China

Chapter 1     General Provisions

Article 1 These Implementing Regulations are formulated in accordance with the Trademark Law of the People’s Republic of China (hereinafter referred to as the Trademark Law).

Article 2 The provisions made in these Implementing Regulations concerning goods marks shall apply to service marks.

Article 3 The use of trademarks referred to in the Trademark Law and these Regulations include, among other things, the use of trademarks on goods, Packages or containers thereof and commodity trading instruments, or use of trademarks in advertisements, exhibitions and other commercial activities.

Article 4 Goods required to bear registered trademarks as prescribed by the State mentioned in Article 6 of the Trademark Law refer to goods in respect of which registered trademarks must be used as prescribed by law and administrative regulations.

Article 5 Under the Trademark Law and these Regulations, when an interested party believes his trademark constitutes a well-known trademark when a dispute arises in the course of trademark registration or trademark review and adjudication, he may file a request with the Trademark Office or the Trademark Review and Adjudication Board to establish it as a well-known trademark, to reject the trademark registration application contrary to the provision of Article l3 of the Trademark Law, or to cancel the trademark registration contrary to the provision of Article 13 of the Trademark Law. When filing an application, an interested party shall submit proofs that his trademark constitutes a well-known trademark.

At the request of the interested party, the Trademark Office or the Trademark Review and Adjudication Board shall, on the basis of ascertained facts, establish whether his trademark constitutes a well-known trademark pursuant to the provision of Article 14 of the Trademark Law.

Article 6 Applications may be filed for registration of geographic indications provided for in Article l6 of the Trademark Law as certification marks or collective marks in accordance with the provisions of the Trademark Law and these Regulations.

Where a geographic indication is registered as a certification mark, the natural person, legal person or other organization whose goods has met the requirement imposed on the geographic indications may request for using the certification mark, and the organization having control on the certification mark shall give its permission. Where a geographic indication is registered as a collective mark, the natural person, legal person or other organization whose goods has met the requirement imposed on the geographic indications may request for membership of the body, association or other organization having the geographic indication as its collective mark. The body, association or other organization shall accept him or it as its member according to the articles of constitution thereof. Any person who does not ask to join the body, association or other organization having the geographic indication as its collective mark may also duly use the geographic indication, and the body, association or other organization does not have the right to prohibit the use.

Article 7 An interested party entrusting a trademark agency with the filing of an application for trademark registration or attending to other trademark matters shall submit a Power of Attorney. The Power of Attorney}’ shall indicate such contents and competence as authorized: the Power of Attorney from a foreign person or foreign enterprise shall, in addition, indicate the nationality of the entruster.

Notarization and legalization of the Power of Attorney and other relevant certificates from a foreign person or foreign enterprise’ shall be done based on the principle of reciprocity.

The foreign person or foreign enterprise mentioned in Article l8 of the Trademark Law refers to the foreign person who or foreign enterprise which does not have its habitual residence or place of business in China.

Article 8 The Chinese language shall be used in applying for trademark registration or attending to other trademark matters.

Where the various certificates, certifying documents and proofs submitted under the Trademark Law and these Regulations are in a foreign language, the Chinese translation thereof shall be attached; where the Chinese translation is not attached, the certificates, certifying documents and proofs shall be deemed not to have been submitted.

Article 9 In any one of the following circumstances, any staff member of the Trademark Office and the Trademark Review and Adjudication Board shall withdraw, or a party or interested Part} may request him to withdraw:

(l) he is a party or a close relative to a party or agent;

(2) he is related in such a way with a party or agent insofar as the relation would affect impartiality; or

(3) he has interests in an application for trademark registration or an}’ other trademark matters.

Article l0 Unless otherwise provided for in these Regulations, where any document is sent to the Trademark Office or the Trademark Review and Adjudication Board, the date of receipt shall be the date of delivery where it is delivered personally}. or the date of posting indicated by the postmark if it is sent by post; where the date of posting indicated by the postmark is illegible, or there is no postmark, the date of receipt shall be the date on which the Trademark Office or the Trademark Review and Adjudication Board actually receives the document, except that the interested Part]’ is able to present evidence as to the actual date of posting indicated by the postmark.

Article 11 Any document of the Trademark Office or the Trademark Review and Adjudication Board may be served by post, by personal delivery or by other means. Where an interested party entrusts a trademark agency, delivery of the document to the trademark agency shall be deemed delivery thereof to the interested party.

Where any document is sent to an interested party by the Trademark Office or the Trademark Review and Adjudication Board. the date of receipt shall be the date of receipt indicated b]- the postmark on which the interested party receives it if it is sent by post; where the date of Posting indicated by the postmark is i1legible, or where there is no postmark. the document shal1 be deemed to have been delivered to the interested party on the fifteenth day from the date of posting the document; the date of receipt shall be the date of delivery if it is delivered personally. Where any document cannot be sent by post or by personal delivery, the document may be served b}’ making an announcement. At the expiration of the thirtieth day from the date of the announcement, the document shall be deemed to have been served.

Article 12 Where an application is filed for international registration, it shall be done in accordance with the relevant international treaties to which China has acceded. The specific measures shall be prescribed by the administrative department for industry and commerce under the State Council.

Chapter 2    Application for Trademark Registration

Article 13 In application for the registration of a trademark, a separate application shall be filed in respect of each class of goods or service according to the published Classification of Goods and Services. For each application for the trademark registration, an Application for Trademark Registration shall be filed with the Trademark Office, accompanied by five copies of the reproduction of the trademark; if colour is claimed, five copies of the colour reproduction of the trademark shall be attached, so shall be a black and white design of the trademark.

The reproduction of the trademark must be clear and easy to paste and shall be printed on smooth and clean durable paper or substituted by a photograph. Its length or breadth shall not be more than l0 cm and less than 5 cm each.

Where an application is filed for the registration of a three-dimensional sign as a trademark, a statement shall be made in the application, and the reproduction capable of defining the three-dimensional formation be submitted.

Where an application is filed for the registration of a combination of colours as a trademark, a statement shall be made in the application, and an explanation thereof be submitted in writing.

Where an application is filed for the registration of a certification mark or collective mark, a statement shall be made in the application, and the certificates of the qualification of the applicant and regulations for the administration of the use thereof be submitted.

Where a trademark is in a foreign language or contains lexical elements in a foreign language, explanation of its meaning shall be made.

Article 14 When filing an application for the registration of a trademark, the applicant shall submit a copy of effective certificate capable of proving his identification. The name of the applicant for trademark registration shall be consistent with the certificate submitted.

Article 15 The goods or services shall be listed in the application according to the Classification of Goods and Services. If the goods or services are not listed in the Classification of Goods and Services, a description of the 5aid goods or services shall be attached.

The documents relating to an application for trademark registration shall be typewritten or printed.

Article 16 If an application is jointly filed for registration of the same trademark, a representative shall be designated in the application; if such representative is not designated, the first person listed in the application shall be the representative.

Article 17 If an applicant changes his name, address, agent, or deletes or reduces designated goods, he may go through the formalities for the change with the Trademark Office.

An applicant who assigns his application for trademark registration shall go through the formalities for the assignment with the Trademark Office.

Article 18 The filing date of an application for trademark registration shal1 be the date on which the Trademark Office receives the application documents.

Where the formal requirements of the application are fulfilled and the application form filled out according to the relevant rules, the Trademark Office will accept the application and notify the applicant in writing. Where the formal requirements are not fulfilled or the application form not filled out according to the relevant rules, the Trademark Office will not accept it, and it shall notify the applicant in writing and explain the reason. Where the formal requirements are basically fulfilled or the application form filled out basica1ly according to the relevant rules, but amendments are required, the Trademark Office shall notify the applicant to make the amendments and require him to do so according to the contents prescribed and re-submit it to the Trademark Office within thirty days from the date on which he receives the notification. Where the application is amended and re-submitted to the Trademark Office within the time limit, the date of filing shall be retained. Where the application is not amended within the time limit, the application shall be deemed to have been abandoned, and the Trademark Office shall notify the applicant in writing.

Article 19 Where two or more applicants respectively apply for the registration of identical or similar trademarks used on the identica1 or similar goods on the same day, each applicant sha1l, within thirty days from the date of receipt of the notification of the Trademark Office, submit a proof of his prior use of the mark in respect of which he has applied for the registration. Where the applicants used the mark for the first time on the same day or where none of them has used the mark, they shall try to resolve the matter through consultation, and submit a written agreement to the Trademark Office within thirty days from the date of receipt of the notification from the Trademark Office; where the applicants are reluctant to resolve the matter through consultation or an agreement is not reached, the Trademark Office shall notify the applicants that one applicant will be singled out by lot, and reject the registration applications filed by the other applicants. Where the Trademark Office notifies an applicant, but the applicant does not show up and draw his lot, his application shall be deemed to have been abandoned, and the Trademark Office shall notify in writing the applicant who has failed to show up.

Article 20 Where an applicant claims the right of priority according to Article 24 of the Trademark Law, the copy of the application document which he first filed for the registration of the trademark shall be certified by the competent trademark authority accepting the application, with the date of filing and the application number indicated.

Where an applicant claims the right of priority according to Article 25 of the Trademark Law, the certification documents submitted by him shall be certified by the administrative department for industry and commerce under the State Council, except that the international exhibition on which the goods are put on display is held inside the territory of China.

Chapter 3     Examination of Application for Trademark Registration

Article 21 The Trademark Office shall, in accordance with the Trademark Law and these Regulations, examine the applications for the registration of trademark it has accepted. Applications which conform to the relevant provisions, or those for the registration of trademarks in respect of a part of the designated goods which conform to the relevant provisions, shall be preliminarily approved and published. Applications which do not conform to the relevant provisions, or those for the registration of trademarks in respect of a part of the designated goods which do not conform to the relevant provisions, shall be rejected. The Trademark Office shall notify the applicant in writing and explain the reason for the rejection.

Where the Trademark Office has preliminarily approved applications for the registration of trademarks on a part of the designated goods, the applicant may apply for the abandonment thereof before the date of expiration of the opposition period; where the applicant abandons the registration of trademarks in respect of a part of the designated goods, the Trademark Office shall withdraw the preliminary approval, terminate the examination procedure, and republish it.

Article 22 Where an opposition is filed to a trademark which, after examination, has been preliminarily approved and published by the Trademark Office, the opponent shall submit the Application for Trademark Opposition in duplicate to the Trademark Office. The Application for Trademark Opposition shall indicate the issue number of the Trademark Gazette on which the opposed trademark is published, and the number of preliminary approval of the opposed trademark. The Application for Trademark Opposition shall contain the specific requests and facts and grounds, with relevant proofs and certificates attached.

The Trademark Office shall send a copy of the Application for Trademark Opposition to the opposed party and require him to make a reply within thirty days from the date of his receipt of the copy. His failure to make a rep1y shall not affect the adjudication by the Trademark Office on the opposition.

Where an interested party needs to supplement relevant proofs and certificates after he raises an opposition application or makes a reply, he shall make a statement in the application or reply, and submit the proofs and certificates within three months from the date of submission of the application or rep1y; where he fails to submit them at the expiration of the time limit, the interested party shall be deemed to have abandoned supplementing the relevant proofs and certificates.

Article 23 The justification of the opposition mentioned in Article 34, paragraph two, of the Trademark Law shall include the justification of the opposition to a registration in respect of a part of the designated goods. Where such opposition is justified, the application for the registration of trademarks in respect of that part of the designated goods shall not be approved.

Where an opposed trademark has, prior to the coming into effect of the adjudication on the opposition, been announced as a registered trademark in the Trademark Gazette, the registration announcement shall be cancelled. The trademark that has been approved for registration upon the adjudication on the opposition sha1l be re-published.

The trademark approved for registration upon the adjudication on the opposition shall not have the retroactive effect on another person’s act to use a sign identical with or similarly to the trademark on the same or similar goods from the date on which the period for trademark opposition expires and before the adjudication on the opposition takes effect; however, the losses inflicted to the trademark registrant due to the bad faith in which the sign is used shall be compensated.

The time limit for the application for review and adjudication of the trademark approved for registration upon the adjudication on the opposition shall be calculated from the date of publication of the adjudication on the trademark opposition.

Chapter 4       Modification, Assignment and Renewal of Registered Trademarks

Article 24 When applying for modification of his name, address or other registration matters, the registrant shall file an Application for Modification with the Trademark Office. The Trademark Office shall, upon examination and approval, issue the trademark registrant the relevant certificates, and make an announcement. Where the application is not approved, the Trademark Office shall notify the applicant in writing and explain the reason.

When applying for modification of his name, the registrant shall submit modification certificate issued by the relevant registry. An applicant who has not submitted the modification certificate may do so within thirty days from the date of filing the application. Where the submission is not made within the time limit, the application for the modification shall be deemed to have been abandoned, and the Trademark Office shall notify the applicant in writing.

When applying for modification of his name and address, the trademark registrant shall make the modifications in all his registered trademarks. If he fails to do so, the application for the modification shall be deemed to have been abandoned, and the Trademark Office shall notify the applicant in writing.

Article 25 When applying for the assignment of a registered trademark, the assignor and assignee shall file with the Trademark Office an Application for Assignment of Registered Trademark. The formalities of applying for the assignment of the registered trademark shall be gone through by the assignee. The Trademark Office, upon examination and approval of the application. shall issue the relevant certificate to the assignee and make an announcement.

When applying for the assignment of a registered trademark, the trademark registrant shall assign all the identical or similar trademarks registered in respect of the same or similar goods. If the registrant fails to do so, the Trademark Office shal1 notify him to correct the situation within a time limit; if the correction is not made within the time limit, the application for the assignment of the registered trademark shall be deemed to have been abandoned, and the Trademark Office shall notify the applicant in writing.

Any application for the assignment of a registered trademark that may mislead the public or cause confusion or exert any other adverse effects shall not be approved by the Trademark Office. the Trademark Office shall notify the applicant in writing and explain the reason.

Article 26 If the exclusive right to use a registered trademark is transferred for reasons other than assignment, the party receiving the transferred exclusive right to use the registered trademark shall go to the Trademark Office with relevant certificates or legal instruments to go through the formalities for the transfer of the exclusive right to use the registered trademark.

When applying for a transfer of the exclusive right to use a registered trademark, the exclusive right holder of the registered trademark shall transfer all the other identical or similar trademarks registered in respect of the same or similar goods. If the exclusive right holder fails to do so, the Trademark Office shall notify him to correct the situation within a time limit; if the correction is not made within the time limit, the application for the assignment of the registered trademark shall be deemed to have been abandoned, and the Trademark Office shall notify the applicant in writing.

Article 27 When applying for the renewal of a trademark registration, the applicant shall file with the Trademark Office an App1ication for Renewal of Trademark Registration. After examination and approval of the application for the renewal of a trademark registration, the Trademark Office shall issue the relevant certificate and announce it.

The period of validity of a renewed trademark shall be calculated from the day after the expiration of the previous period of validity of the said trademark.

Chapter 5       Trademark Review and Adjudication

Article 28 The Trademark Review and Adjudication Board shall accept applications for trademark review and adjudication filed according to the provisions of Articles 32, 33, 4l and 49 of the Trademark Law, and conduct, according to law, the review and adjudication on the basis of facts.

Article 29 By having dispute over a registered trademark mentioned in Article 4l, paragraph three, of the Trademark Law shall be meant that a registrant of a trademark in respect of which a prior application is filed for registration thereof alleges that a trademark in respect of which another person subsequently files an application for its registration is identical with or similar to his trademark registered in respect of the identical or similar goods.

Article 30 When applying for the trademark review and adjudication, the applicant shall file an application with the Trademark Review and Adjudication Board, and submit the same number of copies thereof as that of the other parties; when filing the application for reexamination based on the Decision or Adjudication made by the Trademark Office, the applicant shall meantime submit a copy of the Decision or Adjudication made by the Trademark Office.

After receipt of the application, the Trademark Review and Adjudication Board shall accept the application found to have met the requirements for acceptance upon examination; the Trademark Review and Adjudication Board shall not accept the application if it does not meet the requirements, and notify the applicant in writing and explain the reason. Where rectification is required, the Trademark Review and Adjudication Board shall notify the applicant to make the rectification within thirty days from the date of receipt of the notification. If an application still fails to meet the requirements after the rectification, the Trademark Review and Adjudication Board shall not accept it, and notify the applicant in writing and explain the reason. If the rectification is not made within the time limit, the application shall be deemed to have been withdrawn, and the Trademark Review and Adjudication Board shall notify the applicant in writing.

Where it finds that an application for the trademark review and adjudication does not meet the requirements for acceptance after accepting it, the Trademark Review and Adjudication Board shall reject the application and notify the applicant in writing and explain the reason.

Article 31 After accepting an application for the trademark review and adjudication, the Trademark Review and Adjudication Board shall send, in a timely manner, a copy of the Application to the other party, and require him to reply within thirty days from the date of receipt of the copy of the Application, failure to make a reply at the expiration of the time limit shall not affect the review and adjudication by the Trademark Review and Adjudication Board.

Article 32 Where an interested party needs to supplement relevant proofs after he files an application for trademark review and adjudication or makes a reply, he shall make a statement to this effect in the Application or Reply, and submit the proofs within three months from the date of filing the Application or making the Reply; if the proofs are not submitted at the expiration of the time limit, the supplementation thereof shall be deemed to have be abandoned.

Article 33 The Trademark Review and Adjudication Board may, at the request of an interested party or according to practical needs, decide to conduct a public review and adjudication of the application therefor.

Where it conducts a public review and adjudication of an application therefor, the Trademark Review and Adjudication Board shall notify the interested party, within fifteen days before the public review and adjudication is held, of the date and place of, and the persons conducting the public review and adjudication. The interested party shall make a reply within the time limit fixed in the notification.

Where the applicant does not reply, nor attend the public review and adjudication, his application for the trademark review and adjudication shall be deemed to have been withdrawn, and the Trademark Review and Adjudication Board shall notify him in writing. Where the respondent does not respond, nor attend the public review and adjudication, the Trademark Review and Adjudication Board may conduct a default review and adjudication.

Article 34 Where an applicant requests for the withdrawal of his application before the Trademark Review and Adjudication Board makes its decision or adjudication, he may withdraw his application after he explains the reason in writing to the Trademark Review and Adjudication. Where the application is withdrawn, the review and adjudication procedure terminates.

Article 35 Where an applicant withdraws his application for review and adjudication, he shall not file another application for the review and adjudication on the basis of the same facts and grounds. Where the Trademark Review and Adjudication Board has made the adjudication or decision as regards an application for trademark review and adjudication, any person shall not file another app1ication for the review and adjudication on the basis of the same facts and grounds.

Article 36 In respect of a trademark the registration of which is cancelled in accordance with Article 4l of the Trademark Law, the exclusive right to use the trademark shall be deemed to be non-existent from the beginning. The decision or adjudication on the cancellation of the registered trademark has no retroactive effect on a judgment or decision already made and executed by the People’s Court or the administrative department for industry and commerce on a case of trademark infringement, or on a trademark assignment or licensing contract executed. However, in respect of damage done to any other person in bad faith by the trademark registrant, he shall compensate for the damages.

Chapter 6      Administration of the Use of Trademarks

Article 37 Where a registered trademark is used, it may carry the indication of “注册商标” (“Registered Trademark”) or the registration signs of the goods, packaging or description or other attachments of the goods.

The registration signs include 注 and ®. When used, the registration signs shall be marked or indicated on the upper or lower right hand corner of the trademark.

Article 38 Where a Certificate of Trademark Registration is lost or damaged, it is necessary to apply to the Trademark Office for re-issuance of the Certificate. Where the Certificate is lost, the registrant shall declare the loss of the Certificate by publishing a declaration in the Trademark Gazette. The damaged Certificate shall be returned to the Trademark Office when an application for re-issuance is filed.

Where a Certificate of Trademark Registration is forged or falsified, criminal liability shall be imposed according to law based on the provisions governing the crimes of forging and falsifying certificates issued by the State administrative authority or other crimes.

Article 39 In respect of any of the acts referred to in Article 44 (l), (2) and (3) of the Trademark Law, the administrative authority for industry and commerce shall order the trademark registrant to rectify the situation within a time limit. If the registrant refuses to comply, the case shall be submitted to the Trademark Office for cancellation of the registered trademark.

In respect of the act referred to in Article 44 (4) of the Trademark Law, any person may apply to the Trademark Office for cancellation of the said registered trademark and explain the circumstances. The Trademark Office shall notify the trademark registrant and require him to furnish, within two months from the date of receipt of the notification, proof of use of the trademark before the date on which the application for cancellation is filed, or a justifiable reason for its non-use. If no proof of use, nor a justifiable reason for the non-use is furnished at the expiration of the time limit or the proof is invalid, the Trademark Office shall cancel his registered trademark.

The proof of use of a trademark referred to in the preceding paragraph includes proofs of the registrant’s using the registered trademark and his licensing any other person to use the registered trademark.

Article 40 Registered trademarks cancelled according to the provisions of Articles 44 and 45 of the Trademark Law shall be published by the Trademark Office, the exclusive right in the registered trademarks shall terminate on the date of cancellation decision made by the Trademark Office.

Article 4l Where the Trademark Office or the Trademark Review and Adjudication Board cancels a registered trademark for reasons re1ating only to a part of the goods designated, the trademark registration in respect of this part of the designated goods shall be cancelled.

Article 42 The amount of the fine imposed in accordance with the provisions of Articles 45 and 48 of the Trademark Law shall be less than 20% of the illegal business turnover or less than two times the illegal profits.

The amount of the fine imposed in accordance with the provision of Article 47 of the Trademark Law shall be less than l0% of the illegal business turnover.

Article 43 Where he licenses another person to use his registered trademark, the licensor shall submit the trademark licensing contract to the Trademark Office for filing within three months from the date on which the contract is concluded.

Article 44 Where any person contravening the provisions of Article 40, paragraph two, of the Trademark Law, the administrative department for industry and commerce shall order the offender to rectify the situation within a prescribed time limit. Where the offender refuses to comply, the administrative department for industry and commerce shall confiscate the representations of his trademark. If it is difficult to detach the representations of the trademark from the goods, both the representations and goods shall be confiscated and destroyed.

Article 45 Where a trademark is used in contravention of the provision of Article 13 of the Trademark Law, an interested party may request the administrative department for industry and commerce for prohibition of the use. When filing the request, the interested party shall submit proofs that his trademark constitutes a well-known mark. If the Trademark Office establishes it as a well-known mark according to the provision of Article l4 of the Trademark Law, the administrative department for industry and commerce sha1l order the infringer to cease the act of using the well-known mark in contravention with the provision of Article l3 of the Trademark Law, confiscate and destroy the representations of the trademark. If it is difficult to detach the representations of the trademark from the goods, both the representations and goods shall be confiscated and destroyed.

Article 46 Where a trademark registrant applies for the removal, from the Register, of his registered trademark or the registration of his trademark in respect of a part of the designated goods, he shall send an Application for Trademark Removal and return the original Certificate of Trademark Registration to the Trademark Office.

Where a trademark registrant applies for the removal, from the Register, of his registered trademark or the registration of his trademark in respect of a part of the designated goods, the exclusive right in the registered trademark or the effect thereof on the part of designated goods shall terminate on the date of receipt by the Trademark Office of the Application for Trademark Removal.

Article 47 Where the registrant of a trademark dies or ceases, and no formalities have been gone through for transfer of the registered trademark at the expiration of one year from the date of the death or cessation, any person is entitled to apply to the Trademark Office for the removal, from the Register, of the registered trademark. When filing an application for the removal, he shall submit the proofs of the death or cessation of the trademark registrant.

Where a registered trademark is removed from the Register owing to the death or cessation of the trademark registrant, the exclusive right to use the registered trademark terminates from the date of the death or cessation of the trademark registrant.

Article 48 Where a registered trademark is cancelled or removed from the Register according to the provisions of Articles 46 and 47 of these Regulations, the original Certificate of Trademark Registration shall become invalid. Where the registration of the trademark in respect of a part of the designated goods is cancelled, or where the trademark registrant applies for removal, from the Register, the registration of the trademark in respect of a part of designated goods, the Trademark Office shall return, to the registrant, the original Certificate of Trademark Registration on which the approval of the cancellation or removal has been marked, or re-issue the Certificate of Trademark Registration and publish the re-issuance.

Chapter 7      Protection of the Exclusive Right to Use Registered Trademark

Article 49 Where an registered trademark contains the generic name, shape or model of the goods in respect of which it is used, or directly indicates the quality, main raw material, function, use, weight, quantity and other features of the goods, or contains a place name, the holder of the exc1usive right to use the registered trademark has no right to prohibit others from duly using it.

Article 50 Any of the following acts shall be an act of infringement of the exclusive right to use a registered trademark as provided for in Article 52 (5) of the Trademark Law:

(l) to use any design which is identical with or similar to the registered trademark of another person on the same or similar goods, as the designation or decoration of the goods, which mislead the public; or

(2) to intentionally provide any other person with such facilities as of storage, transportation, postal service, and concealment in his infringement of the exclusive right of another person to use a registered trademark.

Article 51 Where the exc1usive right to use a registered trademark has been infringed, any person may lodge a complaint with, or file a report on, the case of infringement to the administrative department for industry and commerce.

Article 52 An act of infringement of the exclusive right to use a registered trademark shall be subject to a fine of not exceeding three times the amount of the illegal business turnover. Where it is impossible to calculate the amount of the illegal business turnover, the fine shall be no more than RMB l00,000 yuan.

Article 53 Where a trademark proprietor believes that another person has registered his well-known trademark as an enterprise name, which is likely to deceive, or mislead, the public, he may file an application with the competent authority for the registration of enterprise names for cancellation of the registration of the enterprise name. The competent authority for the registration of enterprise names shall handle the matter pursuant to the Regulations for the Administration of Registration of Enterprise Names.

Chapter 8       Supplementary Provisions

Article 54 Where a service mark already in continuous use up to l July l993 which is identical with or similar to the service mark of another person already registered in respect of the same or similar services may continue to be used. However, a mark the use of which has been suspended for three or more years after l July l993 shall not continue to be used.

Article 55 The specific measures for the administration of trademark agency shall be separately provided for by the State Council.

Article 56 The classification of goods and services for the purposes of registration of trademarks shall be formulated and published by the administrative department for industry and commerce under the State Council.

The documents or forms for filing applications for the registration of trademarks or for attending to other trademark matters shall be formulated and published by the administrative department for industry and commerce under the State Council.

The rules for trademark review and adjudication of the Trademark Review and Adjudication Board shall be formulated and published by the administrative department for industry and commerce under the State Council.

Article 57 The Trademark Office shall set up the Register of Trademark Registration for the documentation of registered trademarks and matters relating to the registration.

The Trademark Office shall compile, print and distribute the Trademark Gazette to publish trademark registrations and other related matters.

Article 58 Fees shall be paid for applying for the registration of trademarks or for handling other trademark matters. The items and schedule of the fees shall be provided for and published by the administrative department for industry and commerce under the State Council in conjunction with the competent price administrative department under the State Council.

Article 59 These Regulations shall enter into force on l5 September 2002. The Implementing Regulations of the Trademark Law of the People’s Republic of China promulgated by the State Council on l0 March l983, revised for the first time with the approval by the State Council on 3 January l988, and revised for the second time with the approval by the State Council on 15 July 1993 and the Answers by the State Council to Issues Relating to the Attachment of Certificates for the Purpose of Trademark Registration shall simultaneously be abrogated.

(Promulgated by the State Council on 3 August 2002)

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Stopping infringement of Patent Right Before Instituting Legal Proceedings

(Several Provisions of the Supreme People’s Court for

the Application of Law)

With a view to protecting the lawful rights and interests of patentees and other interested parties, these several Provisions have been made for the application of law to stopping infringement of patent right before instituting legal proceedings according to the relevant provisions of the General Principles of the Civil Law of the People’s Republic of China, the Patent Law of the People’s Republic of China (hereinafter referred to as the Patent Law), the Civil Procedure Law of the People’s Republic of China (hereinafter referred to as the Civil Procedure Law):

Article 1 Any patentee or interested party may file an application with the people’s court for ordering the party against whom an application is filed, before instituting legal proceedings, to stop its or his act of infringement of the patent right in accordance with the provision of Article 61 of the Patent Law.

The interested party that files an application refers to the licensee of the licensing contract for exploitation of patent and the legal heir to the property right of the patent, etc.. Among the licensees of the licensing contract for exploitation of patent, the licensee alone of a monopolising exclusive patent license* contract may file an application with the people’s court; the licensee of a sole exclusive patent license contract may file an application when the patentee does not.

Article 2 Any application for ordering to stop infringement of patent right before instituting legal proceedings shall be filed with the people’s court having jurisdiction over cases of patent infringement.

Article 3 Any patentee or interested party who files an application with the people’s court shall submit an application in writing, in which the interested party per se and the basic information thereof, the claims and the extent of and reasons for the application shall be clearly indicated. The reasons for the application shall include the specific statement that irremediable damages will be caused to the legitimate rights and interests of the applicant if the relevant act is not to be promptly stopped.

Article 4 The applicant shall submit the following evidence when filing an application:

(l) The patentee shall submit document proving the authenticity and validity of its or his patent right, including, among other things, the patent certificate, claims, description and receipt of payment for the annual patent fee. Where the application filed relates to a patent for utility model, the applicant’ shall submit the search report by the Patent Administrative Organ under the State Council.

(2) The interested party shall submit the patent licensing contract and the proof for filing the Patent Administrative Organ under the State Council; where the proof is not for filing, it or he shall submit the certificate of the patentee or other evidence that proves that it or he enjoys the right.

Where the licensee of a sole exclusive licensing contract files an application alone, it or he shall submit the proof of abandonment by the patentee of the application. The heir to the patent property right shall submit evidence indicating that it or he has already inherited or is in the process of inheriting the patent property right.

(3) The applicant shall submit evidence to prove that the party against whom an application is filed is committing or will commit an act of infringing its or his patent right, including the alleged infringing product and the technical features of the patented technology and the alleged infringing product and the comparison thereof.

Article 5 The ruling made by the people’s court to stop an act of patent infringement before instituting legal proceedings shall be confined to the application filed by the patentee or interested party.

Article 6 Any applicant shall provide guaranty when filing an application; where no guaranty is furnished, the application is rejected.

Where the guaranty furnished by the interested party, in the form of pledge or hypothecation is reasonable and valid, the people’s court shall grant its approval.

When the people’s court determines the scope of the guaranty, it shall take account of the sales of the product in question and the reasonable. costs of storage and stock-keeping; of the losses that may be caused by stopping the relevant act of the party against whom an application is filed and other reasonable costs, such as the wages or salaries and of any other factors involved as Well.

Article 7 Where, in the process of executing the ruling to stop the relevant act, the party against whom an application is filed may suffer greater losses due to the adoption of the measure, the people’s court may order the applicant to provide guaranty in an extroactive manner. Where no such guaranty is provided, the measure to stop the relevant act shall be removed.

Article 8 Any measure taken to execute the ruling to stop the act of patent infringement shall not be removed because the party against whom an application is filed provides a counterguaranty.

Article 9 After accepting the application filed by a patentee or interested party to order to stop the act of patent infringement, the people’s court shall make a ruling in writing within 48 hours where the application conforms with Article 4 of these Provisions upon examination; where the ruling is made to order the party against whom an application is filed to stop its or his act of patent infringement, the ruling shall be executed without delay.

Where it is necessary for the people’s court to verify the relevant facts within the aforementioned time limit, the people’s court may summon and inquire the one or both interested parties and, then, make the ruling in a timely manner.

The people’s court making the ruling to order the part) against whom an application is filed to stop the relevant infringing act before instituting legal proceedings shall promptly notify the party against whom an application is filed, or does so within no more than 5 days at the latest.

Article 10 Where the interested party is not satisfied with the ruling, it or he may apply for reconsideration within l0 days from the date of the receipt of the ruling. The execution of the ruling shall not be suspended during the reconsideration.

Article 11 The people’s court shall examine the application for reconsideration filed by the interested party as to the following aspects:

(l) whether or not the act which is being committed or will be committed by the party against whom an application is filed constitutes an infringement of patent right;

(2) whether or not not taking the relevant measure will cause irremediable damages to the legal rights and interests of the applicant;

(3) the content of the information relating to the applicant’s provision of the guaranty; and

(4) whether or not to the order the party against whom an application is filed to stop the relevant act would impair the public interests.

Article 12 Where the patentee or interested party does not institute legal proceedings within l5 days, after the people’s court takes the measure to stop the relevant act, the people’s court shall remove the adopted measure of the ruling.

Article 13 Where an applicant does not institute legal proceedings or there is an error in the application, causing losses to the party against whom an application is filed, the party against whom an application is filed may institute legal proceedings in the people’s court having the jurisdiction, requesting the applicant to compensate for the losses; or file a request for damages during the patent infringement litigation instituted by the patentee or interested party. The people’s court may simultaneously handle the requests.

Article 14 The ruling ordering to stop the infringement of patent right shall generally remain effective until the final legal instrument comes into effect. The people’s court may also fix a specific time limit according to the facts of the case; after the expiration of the time limit, the people’s court may still make a ruling to continue to stop some relevant acts on the request of the interested party.

Article  15 Where the party against whom an application is filed runs counter to the ruling made by the people’s court to order to stop the relevant act, the matter shall be handled according to the provision of Article l02 the Civil Procedure Law.

Article 16 When executing the pre-litigation measure to stop the act of patent infringement, the people’s court may, according to the application of the interested party, simultaneously preserve the evidence in the light of the provision of Article 74 of the Civil Procedure Law.

The people’s court may, according to the application of the interested party, preserve the property pursuant to Articles 92 and 93 of the Civil Procedure Law.

Article 17 Where the patentee or the interested party institutes proceedings against patent infringement, when simultaneously requesting for stopping the act of patent infringement in advance, the people’s court may first make the ruling on the request.

Article 18 In respect of a case to stop an act of patent infringement, the applicant shall pay the fees according to the Standards of the People’s Court for Litigation Charges and the Additional Provisions thereof.

Adopted on 5 June 2001  at the 1179th Meeting of the Adjudication Committee of the Supreme People’s Court

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