1.Regulations Regarding Customs Protection of Intellectual Property Rights of the People's Republic of China

Chapter I
General Provisions

Article 1． With a view to effecting the protection of intellectual property rights by the customs authorities, promoting the economic, trade, scientific, technical and cultural exchanges with foreign countries and safeguarding the public interests of the society, these Regulations are formulated under the Customs Law of the People's Republic of China.

Article 2． For the purpose of these Regulations, the customs protection of the intellectual property rights shall refer to the protection by the customs authorities of the intellectual property rights related to import and export goods and protected by the laws and administrative regulations of the People's Republic of China, including the exclusive right to use trademark, the copyright and the copyright-related rights and the patent right (hereinafter all referred to as the intellectual property rights).

Article 3． The People's Republic of China prohibits from import or export goods which infringe the intellectual property rights.
The customs authorities effect the protection of intellectual property pursuant to the relevant laws and provisions of these Regulations and exercise the related right as provided for in the Customs law of the People's Republic of China.

Article 4． Owners of intellectual property rights who request the Customs to protect their intellectual property rights shall file application with the Customs for adopting the protective measures.

Article 5． The consignees of import goods or consignors of export goods and their agents shall, in accordance with the State regulations, declare to the customs authorities the state of the intellectual property rights related to the import or export goods and submit the relevant certificates and documents.

Article 6． In protecting the intellectual property rights, the Customs shall keep confidential the trade secrets of the relevant parties.

Chapter II
Recordation of Intellectual Property Rights

Article 7． The owners of the intellectual property right may apply to the General Administration of Customs for the recordation of their intellectual property rights according to the provisions of these Regulations; those applying for the recordation shall file an application in writing. The application shall include the following contents:
(1) the name or personal name, place of registration or nationality of the owner of the intellectual property right;
(2) the title, contents and relevant information of the intellectual property rights;
(3) the state of execution of intellectual property licenses;
(4) the designation, origin, customs house of entry or exit, importer or exporter, principal features and normal price of the goods in respect of which the owner of the intellectual property right has lawfully exercised the intellectual property right; and
(5) the manufacturer, importer or exporter, main customs house of entry or exit, principal features and price of the known infringing goods;
Where there are certifying documents relating to the contents of the application provided for in the proceeding Article, the intellectual property right owner shall attach them with the application.

Article 8． The General Administration of Customs shall, within thirty working days from the date of receipt of all the application documents, inform in writing the applicant whether his application for the recordation of his intellectual property right is approved. Where the General Administration of Customs does not approve his application, it shall explain the reason.
Under any one of the following circumstances, the General Administration of Customs shall not put it on record:
(1) the application documents are incomplete or invalid;
(2) the applicant is not an intellectual property right owner; or
(3) the intellectual property right is no longer protected under the law and the administrative regulations.

Article 9． Where it finds that the intellectual property right owner fails to provide the authentic facts or documents in application for recordation of the intellectual property right, the General Administration of Customs may cancel the recordation.

Article 10． The recordation of customs protection for an intellectual property right shall come into effect from the date of approval of the recordation by the General Administration of Customs. The period of validity of the recordation is 10 years.
On the premise that the intellectual property right is valid, the owner of the intellectual property right may, within six months before the expiration of the period of validity of the recordation of customs protection for the intellectual property right, apply to the General Administration of Customs for renewal of the recordation. The period of validity of each renewal of the recordation is 10 years.
Where no renewal is applied for on the expiration of the recordation of customs protection for the intellectual property right or where the intellectual property rights is no longer protected under the law and administrative regulations, the recordation of customs protection for the intellectual property right will lose its effect immediately.

Article 11． Where the state of the intellectual property right on recordation changes, the owner of the intellectual property right shall, within 30 working days from the date of the change, go through the formalities for the change or cancellation of the recordation at the General Administration of Customs.

Chapter III
Application for Detention and Handling of Suspected Infringing Goods

Article 12． Where the owner of the intellectual property right discovers that the suspected infringing goods are about to be imported or exported, he may file an application with the Customs in the place of import or export of the goods for detaining the suspected infringing goods.

Article 13． The owner of the intellectual property right requesting the Customs to detain the suspected infringing goods shall file a written application and submit the relevant certifying documents and evidence sufficient to prove the obvious existence of the facts of infringement.
The application shall include the following contents:
(1) the name, place of registration or nationality of the owner of the intellectual property right;
(2) the designation, contents and relevant information of the intellectual property right;
(3) the name of the consignees or consignors of the suspected infringing goods;
(4) the designation and specifications of the relevant information on the suspected infringing goods;
(5) such as the port where the relevant information on the suspected infringing goods may be imported or exported, the time and the means of transport.
Where the suspected infringing goods are suspected of infringing the intellectual property right on recordation, the application shall also contain the number of the Customs recordation.

Article 14． Where the owner of the intellectual property right requests the Customs to detain the suspected infringing goods, he shall submit to the Customs a surety not exceeding the value of the goods to compensate the losses inflicted to the consignee or consignor because of undue application and to pay for the expenses of the Customs for warehouse, custody and disposition of the goods after the detention. Where the owner of the intellectual property right directly pays a warehouse owner for the expenses of the warehouse and custody, the payment shall be deducted from the surety. The specific measures shall be formulated by the General Administration of Customs.

Article 15． Where the application filed by the owner of the intellectual property right for detaining suspected infringing goods is in conformity with the provisions of Article 13 of these Regulations and the surety according to the provision of Article 14 of these Regulations, the Customs shall detain the suspected infringing goods, notify in writing the owner of the intellectual property right and deliver the Customs detention warrant to the consignee or consignor.
Where the application filed by the owner of the intellectual property right for detaining suspected infringing goods is not in conformity with the provisions of Article 13 of these Regulations and the surety is not submitted according to the provision of Article 14 of these Regulations, the Customs shall reject the application and notify the owner of the intellectual property right in writing.

Article 16． Where the Customs discovers that a consignment of import or export goods is suspected of infringing an item of intellectual property right on record, it shall immediately notify the owner of intellectual property right in writing. The owner of intellectual property right shall file application within three working days from the date of receipt of the notification according to the provisions of Article 13 of these Regulations and submit surety according to the provision of Article 14 of these Regulations. The Customs shall detain the suspected infringing goods, notify the owner of intellectual property right in writing and serve the warrant for customs detention to the consignee or consignor. Where the intellectual property right owner fails to file an application or submit the surety within the time limit, the Customs shall not detain the goods.

Article 17． With the consent of the Customs, the owner of the intellectual property rights and consignees or consignors may check the relevant goods.

Article 18． Where the consignee or consignor holds that his goods does not infringe the intellectual property right of the owner of the intellectual property right, he shall submit to the Customs written explanation attached with the relevant evidence.

Article 19． Where the consignee or consignor of the suspected infringing goods holds that his import or export goods do not infringe the patent right, he may, after submitting to the Customs a surety equivalent to the value of the goods, request the Customs to release his goods. Where the owner of the intellectual property right fails to institute proceedings in the people's court within due time limit, the Customs shall return the surety.

Article 20． Where after the Customs discovers that a consignment of import or export goods is suspected of infringing an item of intellectual property right on recordation and informs the owner of intellectual property right, the owner of intellectual property right requests the Customs to detain the suspected infringing goods, it shall, within 30 working days from the date of detention, begin to investigate and determine whether the suspected infringing goods detained have infringed the intellectual property rights. Where the Customs holds it impossible to determine the infringement, it shall notify the owner of the intellectual property right in writing immediately.

Article 21． When the Customs investigates the suspected infringing goods detained and requests the competent department of the intellectual property rights for assistance, the relevant competent department of the intellectual property rights shall render assistance.
Where the competent department of the intellectual property rights handling cases involving the infringement of the import or export goods request the Customs for assistance, the Customs shall render the assistance.

Article 22． When the Customs investigates the suspected infringing goods detained, the intellectual property right owner and the consignees or consignors shall cooperate.

Article 23． After applying to the Customs for the adoption of the protective measures, the owner of the intellectual property right may, before instituting proceedings, file an application with the people's court for ordering cessation of the infringing act or taking the measure for property preservation in connection with the detained suspected infringing goods according to the Trademark Law of the People's Republic of China or the Patent Law of the People's Republic of China.
Where the Customs have received the notification from the people's court of assistance in enforcement relating to the order for cessation of the infringing act or the property preservation, it shall render assistance.

Article 24． The Customs shall, in one of the following events, release the suspected infringing goods detained:
(1) where the Customs detains the suspected infringing goods according to Article 15 of these Regulations and does not receive the notification of assistance in enforcement from the people's court within twenty working days from the date of detention;
(2) where the Customs detains the suspected infringing goods according to Article 16 of these Regulations and does not receive the notification of assistance in enforcement from the People's Court within fifty working days from the date of detention and cannot determine that the suspected infringing goods have infringed the intellectual property rights upon investigation;
(3) where the consignees or consignors of the suspected infringing goods, after submitting to the Customs the surety equivalent to the value of the goods, requests the Customs to release his goods; or
(4) where the Customs holds that the consignee or consignors has sufficient evidence to prove that his goods do not infringe the intellectual property rights of the owner of the intellectual property right.

Article 25． Where the Customs detain the suspected infringing goods, the owner of the intellectual property right shall pay for the expenses for the warehouse, custody and disposition of the goods. Where the owner of the intellectual property right fails to pay the relevant expenses, the Customs may deducted them from the surety the owner has submitted thereto, or require one to submit the surety to perform the relevant surety obligation.
Where it is established that the suspected infringing goods have infringed the intellectual property right, the owner of the intellectual property right may add the expenses for the warehouse, custody and disposition of the goods to the reasonable expenses paid to cease the infringing act.

Article 26． Where the Customs suspected a criminal act when enforcing the intellectual property right, the matter shall be transferred to the organs of public security.

Chapter IV
Legal Responsibility

Article 27． Where the detained suspected infringing goods are established upon Customs investigation as infringing the intellectual property rights, they shall be confiscated by the Customs.
After the Customs confiscates the goods infringing the intellectual property rights, it shall notify in writing the owner of the intellectual property right of the relevant circumstance about the goods infringing the intellectual property rights.
Where the confiscated infringing goods may be used for the public welfare, the Customs shall transfer them to the relevant public welfare organisation to be used for the public welfare; where the owner of the intellectual property right is willing to buy them, the Customs may convey the goods to him with fees charged. Where it is impossible for the confiscated goods infringing the intellectual property right to be used for the public welfare and the owner of the intellectual property right is unwilling to buy them, the Customs may auction them after the infringing features are eliminated; and where the infringing features are impossible to be eliminated, the Customs shall destroy them.

Article 28． Where the goods which a person takes or posts in or out of the border are more than the reasonable amount for personal use and have infringed the intellectual property right provided for in Article 2 of these Regulations, the Customs shall confiscate them.

Article 29． Where, after the Customs accepts the application for recordation for protection of the intellectual property right and for taking the intellectual property right protection measures, the failure, on the part of the owner of the intellectual property rights, to provide the exact information results in the lack of discovery of the infringing goods, in failure to take, in a timely manner the protective measures, or in inadequate protective measures, the owner of the intellectual property rights shall be responsible therefor himself or itself.
Where after the owner of the intellectual property rights requests the Customs to the detain suspected infringing goods, the Customs cannot establish the detained suspected infringing goods have infringed the intellectual property right of the owner thereof, or the people's court rules on the non-infringement of the intellectual property right, the owner of the intellectual property right shall be liable for the damages according to law.

Article 30． Anyone, whose import or export of infringing goods constitutes a crime, shall be prosecuted for his criminal liability according to law.

Article 31． Any customs official who, in carrying out intellectual property right protection, neglects his duty, abuses his powers or engages in malpractice for personal gains, which constitute a crime, shall be prosecuted for his criminal liability according to law; where his acts are not serious enough to constitute a crime, he shall be given administrative disciplinary sanction according to law.

Chapter V
Supplementary Provisions
Article 32． Where the owner of the intellectual property right puts his intellectual property right on recordation with the General Administration of Customs, he shall pay the recordation fee according to the relevant regulations of the State.

Article 33． These Regulations shall enter into force as of 1 March 2004. The Regulations of the People's Republic of China Regarding Customs Protection of Intellectual Property Rights issued by the State Council as of 5 July 1995 shall be abrogated simultaneously.

2.Measures of the General Administration of Customs of
the People's Republic of China
(Effective 1 July 2004)

Chapter I
General Provisions

Article 1． The present Measures are hereby formulated in accordance with the Customs Law of the People's Republic of China and other laws and administrative regulations for the purpose of effectively implementing the Regulation of the People's Republic of China on the Customs Protection of Intellectual Property Rights (hereinafter referred to as the Regulation).

Article 2． Where an intellectual property right holder requests the customs to take measures to protect his intellectual property rights or handle the archival filing of customs protection on intellectual property rights at the General Administration of Customs, the domestic intellectual property right holder may file an application directly or by entrusting a domestic agent, and the overseas intellectual property right holder may file an application by entrusting his representative office or agent in China.
Where an intellectual property right holder files an application by entrusting his Chinese agent in accordance with the provisions of the preceding paragraph, he shall issue the power of attorney produced in the prescribed format.

Article 3． Where an intellectual property right holder and his agent (hereinafter are called jointly as the intellectual property right holders) find any goods suspected of infringement are about to be imported or exported, they may file an application to the customs for detainment of such goods in accordance with the provisions of Chapter III of the present Measures. In case any relevant goods are suspected of infringing the intellectual property rights that have been put on archives at the customs, the intellectual property right holders may report to the customs, and file an application to the customs for detainment of the goods suspected of infringement in accordance with the provisions of Chapter IV of the present Measures.

Article 4． A consignee of imported goods or his agent, or a consigner of exported goods or his agent (hereinafter are called jointly as the consignees or consigners) shall know the conditions of intellectual property rights of the goods imported or exported by him within a reasonable extent. Where there is any necessity to declare the status of the intellectual property rights of the goods imported or exported by him, the consignees or consigners shall declare to the customs according to the facts and submit relevant certificate documents.

Article 5． In case any business secret is involved in the relevant documents or evidences, which are submitted to the customs by the intellectual property right holder or the consignee or consigner, the intellectual property right holder or consignor or consignee shall submit to the customs office a written explanation.
When conducting protection on intellectual property rights, the customs shall keep the business secrets of the relevant parties concerned, unless the customs has the duty to open the information according to law.

Chapter II
Archive Filing of Intellectual Property Rights

Article 6． When handling the archival filing of the customs protection of intellectual property rights, an intellectual property right holder shall submit an application letter produced in the prescribed format to the General Administration of Customs.
An intellectual property right holder shall submit a copy of the application letter for each item of intellectual property right to be applied for archival filing. Where an intellectual property right holder applies for archival filing of international registered trademarks, he shall submit a copy of application letter separately for each class of commodity he applied for.

Article 7． Where an intellectual property right holder submits the application letter for archival filing to the General Administration of Customs, he shall attach the following documents or evidences accordingly:
(1) The photocopy of the individual identity certificate of the intellectual property right holder, the photocopy of the business license for industry and commerce or the photocopies of other registered documents.
(2) The photocopy of the Trademark Registration Certificate as signed by the trademark bureau of the administrative departments for industry and commerce under the State Council. In case the applicant alters any of the matters concerning the trademark registration, renews the trademark registration, transfers the registered trademark, or applies for archival filing of the international registered trademarks, he shall also submit the relevant certificate of trademark registration issued by the trademark bureau of the administrative departments for industry and commerce under the State Council; the photocopy of the certificate of voluntary registration of copyrights as signed and issued by the department of copyright registration and the pictures of the works certified by the department of copyright registration. In case an applicant fails to make voluntary registration on copyright, he shall submit a sample of the works that can prove he is the copyright holder and other relevant evidences of the copyright; and the photocopy of the patent certificate signed and issued by the administrative department of patent under the State Council. In case the patent authorization has exceeded one year from the date of making a public notice, the applicant shall also submit the duplicate of the patent register issued by the administrative department of patent under the State Council six months before the applicant files an application for archival filing. In case the applicant applies for archival filing of a utility model patent or patent of design, he shall also submit a photocopy of the searching report for the utility model patent made by the administrative department of patent under the State Council or a photocopy of the public notice on design patent as released by the administrative department of patent under the State Council;
(3) Where an intellectual property right holder allows anyone else to use any of his registered trademarks, works or patents, and enters into a license contract with him, he shall provide a photocopy of the license contract; if no license contract is concluded, he shall submit a written statement on the licensee, scope and term of the license, and other conditions.
(4) The photos of the goods and their packaging whose intellectual property rights have been exercised legally by the intellectual property right holders;
(5) Proof of import or export of the infringing goods known. In case the infringement dispute between the intellectual property right holder and anyone else has been handled by the people's courts or the competent departments of intellectual property rights, the photocopies of the relevant legal documents shall also be submitted; and
(6) Other documents or evidences to be submitted as required by the General Administration of Customs.
The documents and evidences submitted to the General Administration of Customs by the intellectual property right holders in accordance with the preceding paragraph shall be complete, true and effective. In case the relevant documents and evidences are written in any foreign language, a Chinese version shall be attached. Where the General Administration of Customs believes it necessary, it may require the intellectual property right holders to submit the notary or authentication documents of the relevant documents or the evidences.

Article 8． Intellectual property right holders shall pay for archival filing at the time of applying for handling archival filing of customs protection on intellectual property rights to the General Administration of Customs. The intellectual property rights holders shall, when submitting an application letter for archival filing to the General Administration of Customs, attach a photocopy of the proof of remittance for the archival filing fees.
The charging standards for the archival filing fees shall be set down by the General Administration of Customs together with the relevant departments of the state and have them publicized.

Article 9． The archival filing of the customs protection on intellectual property rights shall take effect from the date of archival filing as approved by the General Administration of Customs, with the period of validity of ten years. In case the period of validity of an intellectual property right is less than 10 years from the effective date of archival filing, the period of validity for archival filing shall be the period of validity of the intellectual property right.
The period of validity of the archival filing, which is approved by the General Administration of Customs before the implementation of the Regulation, or the period of validity of archival filing renewed upon approval shall still be computed according to the former period of validity.

Article 10． Intellectual property right holders may, within six months before the expiry of the validity period of archival filing for the customs protection of intellectual property rights, file a written application for renewing the period of validity of archival filing and attach the relevant documents. In case the General Administration of Customs approves to renew the period of validity of archival filing, it shall notify the intellectual property right holders in writing; if it refuses to approve the renewal, it shall notify the intellectual property right holders and explain the reasons.
The period of validity for extension of the archival filing shall be computed from the morrow of expiry of the period of validity for archival filing, and the period of validity shall be 10 years. In case the period of validity of the intellectual property rights is less than 10 years from the morrow of the expiry of the period of validity of archival filing of last time, the period of validity for renewing the archival filing shall be the period of validity of the intellectual property rights.

Article 11． In case there is any alteration on the conditions of following intellectual property rights that have been put on records, an intellectual property right holder shall, within 30 working days after the alteration, file an application to the General Administration of Customs for alteration of archival filing of customs protection on intellectual property rights and attach the relevant documents:
(1) The name of the intellectual property right holder;
(2) The commodities to which the registered trademark are allowed to use upon verification;
(3) The conditions for licensing of the use of the registered trademarks, works or patents;
(4) The communications address of the intellectual property right holder, contact person and contact telephone, etc.; and
(5) Other conditions as prescribed by Article 7 of the Regulation.

Article 12． In one of the following circumstances, the intellectual property right holders shall file an application to the General Administration of Customs for deregistration of the customs protection on intellectual property rights within 30 days from the date of occurrence of alteration of the intellectual property rights that have been put on archives, and attach the relevant documents:
(1) The intellectual property rights are no longer subject to the protection of laws and administrative regulations before the expiry of the period of validity of archival filing; or
(2) The intellectual property rights that have been put on archives are transferred.
The General Administration of Customs may cancel the relevant archival filing of intellectual property rights falling within the circumstances as described in the preceding paragraph on its own initiative or upon the application of the interested party.
In case the intellectual property right holders give up the archival filing within the period of validity of the archival filing, he may apply to the General Administration of Customs for canceling the archival filing.

Article 13． The General Administration of Customs shall notify the intellectual property right holders in writing when it revokes the archival filing of customs protection on intellectual property rights as prescribed by Article 9 of the Regulation.
Where the General Administration of Customs cancels the archival filing, and the intellectual property right holder reapplies for archival filing of the identical intellectual property rights that have already been revoked for not more than one year, the General Administration of Customs may reject the reapplication.

Chapter III
Detainment upon Application

Article 14． In case an intellectual property right holder finds out that any goods suspected of infringement are about to be imported or exported and requests the customs to detain them, he shall file an application letter to the customs office at the place of entry or exit of goods as prescribed in Article 13 of the Regulation. If the relevant intellectual property rights fail to be put on archives at the General Administration of Customs, the intellectual property right holder shall attach the documents and evidences as prescribed in item (1) and (2), paragraph 1 of Article 7 of the present Measures.
In case an intellectual property right holder requests the customs to detain the goods suspected of infringement, he shall submit to the customs office the obvious evidences that can sufficiently prove the existence of such infringement. The evidences submitted by the intellectual property rights holder shall be able to prove the following facts:
(1) The goods that he asks the customs to detain are about to be imported or exported; and
(2) The trademark or work that has infringed the special use right of his trademark is used in the goods or his patent is implemented without his approval.

Article 15． Where an intellectual property right holder requests the customs to detain the goods suspected of infringement, he shall provide a guarantee equivalent to the value of the goods to the customs within the time limit prescribed by the customs office.

Article 16． In case an intellectual property right holder files an application according to Article 14 of the present Measures and provides guarantee in accordance with the provisions of Article 15, he may ask the customs office to check the relevant goods before the customs office detains the goods suspected of infringement.
Upon the approval of the customs office, the intellectual property right holders may modify or withdraw its application before the customs office detains the goods suspected of infringement.
In case an intellectual property right holder files an application that does not correspond with the provisions of Article 14 of the present Measures or he fails to provide guarantee in accordance with the provisions of Article 15, the customs shall turn down his application and notify the intellectual property right holder in writing.

Article 17． In case the customs office detains the goods suspected of infringement, it shall notify the intellectual property right holders in writing the name, amount and value of the goods, the name of the consignees or consigners, the date of declaration of import or export, the date of detainment of the customs, and other facts, etc..
The intellectual property right holders may, according to Article 23 of the Regulation, file an application to the people's court for taking such measures as ordering the infringer to stop the infringement acts or property preservation. If, within 20 working days from the day when the customs office detains the goods suspected of infringement, the customs receives the written notice of the people's courts on the relevant rulings concerning assistance in execution, the customs office shall give assistance; if the customs office fails to receive the notice, the customs shall release the goods.

Article 18． Where the customs detains the goods suspected of infringement, it shall serve the written notice of detaining the goods suspected of infringement and a detainment voucher to the consignees or consigners, who may check the relevant goods upon approval of the customs office.
In case the consignees or consigners believe that the goods they import or export do not infringe upon the relevant intellectual property rights, they shall put forward a written statement to the customs within 20 working days from the day when the customs detains the goods and attach necessary evidences. If the consignees or consigners request the customs to release the goods suspected of infringing patent rights, they shall also submit a written application for releasing the goods to the customs office and a surety equivalent to the value of the goods.

Article 19． Where the consignees or consigners request the customs to release the goods suspected of infringing patent rights, which corresponds with the provisions of paragraph 2 of Article 18 of the present Measures, the customs office shall release the goods and notify in writing the intellectual property rights holders.
In case an intellectual property right holder files a lawsuit to the people's court on the relevant dispute concerning patent infringement, he shall, within 30 working days from the date of serving the written notice of the customs as prescribed by the preceding paragraph, submit to the customs office a photocopy of the notice for hearing and accepting the case produced by the people's court.

Chapter IV
Investigation and Handling in Pursuance of Authority

Article 20． The customs shall make supervision over the goods imported or exported, and shall notify in writing the intellectual property right holders immediately once finding the imported or exported goods are suspected of infringing the intellectual property rights that have been put on archives at the General Administration of Customs.

Article 21． An intellectual property right holder shall give reply according to the following provisions within 3 working days from the date of serving the customs the written notice as described Article 20 of the present Measures:
(1) If he believes that the relevant goods have infringed upon the intellectual property right that have been put on archives at the General Administration of Customs, and requests the customs to detain the goods, he shall file a written application to the customs for detaining the goods suspected of infringement and providing guarantee in accordance with Article 22 of the present Measures;
(2) In case he believes that the relevant goods do not infringe upon the intellectual property rights that have been put on archives at the General Administration of Customs by him or does not request the customs office to detain the goods suspected of infringement, he shall explain the reason to the customs in writing.
The intellectual property right holder may check the relevant goods upon approval of the customs.

Article 22． Where the intellectual property right holders request the customs to detain the goods suspected of infringement in accordance with item (1), paragraph 1 of Article 21 of the present Measures, he shall provide guarantee to the customs according to the following provisions:
(1) If the value of the goods is less than RMB 20 thousand Yuan, the guarantee provided shall be equal to the value of the goods;
(2) If the value of the goods is RMB 20 thousand Yuan up to RMB 200 thousand Yuan, the guarantee provided shall be equal to 50% of the value of the goods, but the amount of the guarantee shall not be less than RMB 20 thousand Yuan; and
(3) If the value of the goods exceeds RMB 200 thousand Yuan, the guarantee provided shall be RMB 100 thousand Yuan.
The intellectual property right holders may provide general guarantee to the customs upon approval of the customs office. The total amount of guarantee shall be no less than RMB 200 thousand Yuan.

Article 23． Where an intellectual property right holder files an application in accordance with item (1), paragraph 1 of Article 21 of the present Measures and provides guarantee according to Article 22, the customs shall detain the goods suspected of infringement and notify the intellectual property right holder in writing; if he fails to file an application or fails to provide guarantee, the customs shall release the goods.

Article 24． In case the customs office detain any goods suspected of infringement, it shall serve a written notice on detainment of the goods suspected of infringement and a detainment voucher to the consignees and consignors, who may check the relevant goods upon approval of the customs.
If the consignees or consignors believe that the goods they import or export do not infringe upon the relevant intellectual property rights, they shall put forward written statements to the customs and attach necessary evidences during the period when the customs is making investigations into the goods suspected of infringement. If they request the customs to release the goods suspected of infringing patent rights, they shall file a written application to the customs for releasing goods within 50 working days from the date the customs detains the goods and provide surety equivalent to the value of the goods.
In case the consignees or consignors request the customs to release the goods suspected of infringing upon any patent right, which corresponds with the provisions of the preceding paragraph, it shall be handled in accordance with Article 19 of the present Measures. But if the customs office believes that the goods have infringed upon relevant patent right during the period of investigation, it shall be handled in accordance with Article 27 of the Regulation.

Article 25． After the customs office has detained the goods suspected of infringement, it shall investigate into the said goods and other relevant conditions.
The consignees or consignors and the intellectual property right holders shall cooperate with the customs in investigation, and provide the relevant facts and evidences according to the facts.
Where the customs office investigates into the goods suspected of infringement, it may ask for the relevant departments in charge of intellectual property rights to provide consultation opinions.

Article 26． The customs shall, within 30 working days from the date of detaining the goods suspected of infringement, notify the intellectual property right holders any of the following investigation results:
(1) Determining that the goods have infringed the relevant intellectual property rights;
(2) Believing that the consignees or consigners have sufficient evidences to prove that their goods have not infringed the relevant intellectual property rights; and
(3) Being unable to determine whether the goods have infringed the relevant intellectual property rights.

Article 27． In case the customs office can not determine whether the relevant goods have infringed upon the intellectual property rights, the intellectual property right holders may apply to the people's courts for taking such measures as ordering the infringers to stop the infringement acts or property preservation in accordance with Article 23 of the Regulation.
Where the customs receives the notice of the people's court on assistance in ordering the infringers to stop the infringement acts or property preservation within 50 working days from the date of detaining the goods suspected of infringement, it shall give assistance; if the customs office fails to receive the notice, the customs shall release the goods.

Article 28． In case the customs office makes a decision on confiscating the infringing goods, it shall notify the intellectual property right holders in writing the following known conditions:
(1) The name and quantity of the infringing goods;
(2) The name of the consignees or consigners;
(3) Date of declaration of the import or export of the infringing goods, date of detainment by the customs and the date when the decisions on penalties take effect;
(4) The named place of departure and named place of destination of the infringing goods; and
(5) Other relevant conditions in relation to the infringing goods that may be provided by the customs.
Where, in the process when the people's courts or the competent departments in charge of intellectual property rights handle the infringement disputes between the relevant parties, it is necessary for the customs office to assist in the investigation and obtaining relevant evidences in relation to the imported or exported goods, the customs shall give assistance.

Article 29． Where any of the goods entering or exiting the frontiers carried by any individual or sent by mail exceeds the quantity for self-use and the reasonable amount and is suspected of infringing upon the intellectual property rights as prescribed in Article 2 of the Regulation, the customs shall have them detained; if, after investigation, the goods are believed to constitute an infringement, the customs shall have them confiscated.
Where the customs investigates into the infringing goods, the intellectual property right holders shall render aid.

Chapter V
Disposal of Goods and Fees

Article 30． The customs office shall dispose of the goods it has confiscated according to the following provisions:
(1) Where the relevant goods may be used directly for public welfare or the intellectual property right holder is willing to purchase the goods, the customs shall deliver the goods to the relevant public welfare institutions for the use of public welfare or transfer them to the intellectual property right holder with compensation;
(2) Where the relevant goods cannot be disposed of in accordance with item (1) and the infringement character can be eliminated, they shall be auctioned according to law after eliminating the infringement character. And the income arising from the auction shall be turned in to the state treasury; and
(3) Where the relevant goods cannot be disposed of in accordance with items (1) and (2), they shall be destroyed.
When the customs office destroys the infringing goods, the intellectual property right holders shall render necessary assistance. In case the relevant public welfare institutions use the infringing goods that are confiscated by the customs for public welfare or the intellectual property right holders assist the customs in destroying the infringing goods, the customs shall make necessary supervision over them.

Article 31． Where the customs office assists in the execution of the rulings of the people's courts for ordering the infringers to stop infringing acts or property preservation or releases the goods detained, the intellectual property right holders shall pay for such fees as the storage, preservation and disposal of goods during the period when such goods are detained by the customs.
Where the customs office confiscates the infringing goods, the intellectual property right holders shall pay such fees as storage, preservation and disposal of goods on the basis of the actual storage time after such goods are detained by the customs. But if the customs office fails to complete the disposal of goods within 3 months from the date of serving the decision on confiscation of the infringing goods to the consignees or consigners, and the failure is not caused due to the application of the consignees or consigners for administrative reconsideration, lodging of an administrative litigation or disposal of goods, or other special reasons, the intellectual property right holders do not need to pay the relevant fees after the above-mentioned 3 months.
Where the customs office auctions the infringing goods in accordance with item (2), paragraph 1 of Article 30 of the present Measures, the outlays for the auction fees shall be handled in light of the relevant provisions.

Article 32． In case the intellectual property right holders fail to pay the relevant fees in accordance with Article 31 of the present Measures, the customs shall have the right to deduct the relevant fees from the surety paid by the intellectual property right holders or require the guarantor to perform the duty of guarantee.
In case the customs office confiscates the infringing goods, it shall return the surety to the intellectual property right holders after completing the disposal of goods and settling the relevant fees or cancel the duty of guarantee.
Where the customs office assists in executing the rulings of the people's courts on ordering the infringers to stop the infringing acts or property preservation or releases the goods detained, if, within 20 working days from the date when the customs assists in the execution of the relevant rulings of the people's courts or releases goods, the customs office does not receive the notice of the people's courts in assisting the execution with the guarantee offered by the intellectual property right holders, the customs shall return the surety to the intellectual property right holders; if the customs has received the notice of assisting the execution, it shall give assistance.

Article 33． Where, after the customs has released the detained goods suspected of infringing patent rights in accordance with paragraph 1 of Article 19 of the present Measures, and the intellectual property right holders have submitted the photocopy of the notice of the people's courts on accepting the case to the customs office in accordance with paragraph 2 of Article 19 of the present Measures, the customs office shall handle the surety paid by the consignees or consignors in accordance with relevant judgment or rulings of the people's courts for assisting the execution; if the intellectual property right holders fail to submit the photocopy of the notice of accepting and hearing the case by the people's courts, the customs shall return the guaranty money provided by the consignees or consigners.

Chapter VI
Supplementary Provisions

Article 34． In the present Measures, the "guarantee" shall refer to the guaranty money, letter of guarantee of banks or non-bank financial institutions.

Article 35． The "value of goods" in the present Measures shall be subject to the examination and determination by the customs on the basis of the bargaining price of the goods. If the bargaining price cannot be determined, the value of the goods shall be assessed by the customs according to law.

Article 36． When the intellectual property right holders and the consignees or consigners submit the photocopies of the relevant documents to the customs office according to the present Measures, the customs office shall check the photocopies against the original of the documents. If after checking, there is no mistake, the words "Same as the original" shall be affixed to the photocopies together with the signature and seal for confirmation.

Article 37． The present Measures shall come into force as of July 1st, 2004. The Measures of the People's Republic of China for the Implementation of the Customs Protection on Intellectual Property Rights (Order No.54 of the General Administration of Customs) shall be repealed simultaneously.

3.Regulations for the Protection of New Varieties of Plants of
the People's Republic of China

　
Chapter I
General Provisions

Article 1． These Regulations are enacted to protect the rights pertaining to new varieties of plants, encourage the cultivation and exploitation of new varieties of plants, and to promote the development of agriculture and forestry.

Article 2． In these Regulations, "new varieties of plants" refer to varieties of plants bred artificially or developed from natural plants discovered, which possess novelty, speciality, homogeneity and stability and are duly denominated.

Article 3． The administrative departments for agriculture and forestry under the State Council (referred to below as the Examination and Approval Authorities), within the scope of their respective responsibilities, are jointly responsible for receiving and examining applications for the rights pertaining to new varieties of plants, and grant the rights pertaining to new varieties of plants (referred to below as the variety right) that conform to the provisions of these Regulations.

Article 4． Any entity or individual who has accomplished the breeding of a new variety of plant, which bears on the interest of the State or the public interest and is of great value in application, shall be rewarded by the People's Government at or above the county level or by the relevant department.

Article 5． The production, marketing, and spreading of a new variety of plants which is granted the variety right (referred to below as the granted variety) shall be examined and approved in accordance with the provisions of the laws and regulations of the State on seeds.

Chapter II
The Content and Attribution of the Variety Right

Article 6． Any entity or individual who has accomplished the breeding of a new plant variety shall enjoy the exclusive right in respect of his or its granted variety. Without the permission of the owner of the variety right (referred to below as the variety right owner), no entity or individual shall, for commercial purposes, produce or sell reproductive or propagating material of that granted variety, nor repeatedly use, for commercial purposes, reproductive or propagating material of the granted variety to produce propagating material of another variety, except as otherwise provided for in these Regulations.

Article 7． For an item of service breeding, made by a person in execution of the tasks of the entity to which he belongs or made by him mainly by utilising the material means of the entity, the right to apply for the variety right belongs to the entity. For any non-service breeding, the right to apply for the variety right belongs to the individual who has accomplished the breeding. After the application is approved, the variety right shall belong to the applicant.
In commissioned or cooperative breeding, the attribution of the variety right shall be stipulated on by the parties in the contract; where there is no contractual stipulation, the variety right shall belong to the entity or individual accomplishing on commission, or accomplishing jointly, the breeding.

Article 8． One variety right shall only be granted for one new plant variety. Where two or more applicants separately file applicants for the variety right in respect of the identical new plant variety, the variety right shall be granted to the applicant whose application is filed first; where the applications are filed simultaneously, the variety right should be granted to the applicant who accomplished the breeding of the new plant variety first.

Article 9． The right to apply for a variety right and the variety right may be assigned according to law.
Any assignment to a foreigner, by a Chinese entity or individual, of the right to apply for a variety right, or of the variety right, in respect of a new plant variety it or he has bred domestically, shall be approved by the examination and approval authorities.
Any assignment, by an entity under State ownership, of the right to apply for a variety right, or of a variety right, within the country shall be reported to the competent administrative department for approval in accordance with the relevant provisions of the State.
Where the right to apply for a variety right or the variety right is assigned, the parties shall conclude a written contract, which shall be registered with and announced by the examination and approval authorities.

Article 10． In any of the following events, an entity or individual exploiting a granted variety neither needs to have permission from nor pay the exploitation fee to the variety right owner for the exploitation, but the other rights enjoyed by the variety right owner in accordance with these Regulations shall not be infringed:
(1) Utilising a granted variety in breeding and other scientific research activities;
(2) Reproducing of the propagating material of a granted variety by farmers for their own use.

Article 11． The examination and approval authorities may, in the interest of the State or the public interest, make a decision on granting a compulsory licence for the exploitation of a new plant variety, and register and announce it.
The entity or individual who has obtained the compulsory licence shall pay a reasonable exploitation fee to the variety right owner, the amount of which shall be negotiated by the two parties; in case the two parties cannot reach an agreement, the examination and approval authorities shall make a ruling on the amount.
Where the variety right owner is not satisfied with the decision on the compulsory licence for the exploitation or with the ruling on the exploitation fee, he or it may, within three months from the receipt of the notice, institute proceedings in the People's Court.

Article 12． When selling a granted variety, the registered name of the granted variety must be used regardless of whether the period of protection for the granted variety has expired or not.


Chapter III Conditions for the Grant of a Variety Right

Article 13 A new plant variety in respect of which the variety right is to be applied for must belong to the genera or species of the plants listed in the State Catalogue of Protected Varieties of Plants. The Catalogue of Protected Varieties of Plants shall be finalised and published by the examination and approval authorities.

Article 14． A new plant variety for which the variety right is granted shall possess novelty. Novelty means that in respect of a new plant variety for which an application for the variety right is filed, the propagating material of the variety has not been sold before the date of filing, or, with the permission of the breeder, the propagating material of the variety has not been sold within China for more than one year; the propagating material of the variety of vine, forest tree, fruit tree and ornamental tree has not been sold outside of China for more than six years, and the propagating material of other varieties of plants has not been sold for more than four years.

Article 15． A new plant variety in respect of which the variety right is to be granted shall possess speciality. Speciality means that the new plant variety in respect of which an application for the variety right is filed shall be clearly distinguishable from varieties of plants known before the filing of the application.

Article 16． A new plant variety in respect of which the variety right is to be granted shall possess homogeneity. Homogeneity means that after propagation, the relevant special characteristics or properties of the new plant variety in respect of which an application for the variety right is filed shall, with the exception of foreseeable variation, remain consistent.

Article 17． A new plant variety in respect of which the variety right is to be granted shall possess stability. Stability means that the relevant special characteristics or properties of the new plant variety in respect of which an application for the variety right is filed shall, after repeated propagation or at the end of a particular cycle of reproduction, remain unchanged.

Article 18． A new plant variety in respect of which the variety right is to be granted shall be designated by an appropriate denomination, which shall be distinguishable from every denomination which designates a known variety of the same botanical genus or species or of a closely related genus or species. After registration, the denomination shall be the generic designation of the new plant variety.
The following denominations shall not be used in the designation of varieties:
(1) those consisting solely of figures;
(2) those contrary to social morality;
(3) those apt to cause misunderstanding as to the special characteristics and properties of new varieties of plants or the identities of breeders.

Chapter Ⅲ
Applications for the Variety Right and their Acceptance

Article 19． Where entities and individuals of China apply for the variety right, they may directly file applications with the examination and approval authorities or entrust the matter to agencies.
Where the new varieties of plants in respect of which entities and individuals of China apply for the variety right need to be kept secret because they involve national security or the vital interest of the State, they shall be handled according to the relevant provisions of the State.

Article 20． Where foreigners, foreign enterprises or other foreign organisations apply for the variety right in China, their applications shall be handled in accordance with the agreements concluded between those countries to which the applicants belong and the People's Republic of China, or in accordance with the international treaties to which those countries and China are party, or in accordance with these Regulations on the basis of the principle of reciprocity.

Article 21． Any party applying for the variety right shall submit to the examination and approval authorities a request, a description and photographs of the variety which meet the prescribed formal requirements.
The application documents shall be written in Chinese.

Article 22． The date on which the examination and approval authorities receive the application documents for the variety right shall be the date of filing; where the application documents are sent by post, the date of posting indicated by the postmark shall be the date of filing.

Article 23． Where, within twelve months from the date on which an applicant first filed in a foreign country an application for the variety right, he or it files in China an application for the variety right in respect of the new plant variety, he or it may, in accordance with any agreement concluded between the said foreign country and China, or in accordance with any international treaty to which both countries are party, or on the basis of the principle of mutual recognition of the right of priority, enjoy the right of priority.
An applicant who claims the right of priority shall make a written statement when filing the application, and submit, within three months, a copy of the first filed application document for the variety right authenticated by the initial organ of acceptance; where the applicant fails to make a written statement or submit a copy of the application document, the claim for the right of priority shall be deemed not to have been made.

Article 24． The examination and approval authorities shall accept any application for the variety right which conforms to the provision of Article 21 of these Regulations, make clear the date of filing, assign an application number and, within one month from the date of receipt of the application, give the applicant notice to pay the application fee.
The examination and approval authorities shall not accept any application for the priority right which, after being amended, still fails to conform to the provision of Article 21 of these Regulations and shall notify the applicant of the non- acceptance.

Article 25． An applicant may, before the variety right is granted, amend or withdraw its or his application for the variety right.

Article 26． Any Chinese entity or individual filing an application for the variety right abroad in respect of a new plant variety cultivated within the country shall register the application with the examination and approval authorities.

Chapter Ⅳ
The Examination and Approval of the Variety Right

Article 27． After the applicant pays the application fee, the examination and approval authorities shall carry out a preliminary examination of the following contents of the application for the variety right:
(1) whether it comes within the scope of the botanical genera and species listed in the catalogue of protected varieties of plants;
(2) whether it conforms to the provision of Article 20 of these Regulations;
(3) whether it conforms to the provisions for novelty;
(4) whether the denomination of the new plant variety is appropriate.

Article 28． The examination and approval authorities shall complete the preliminary examination within six months from the date of acceptance of an application for the variety right. In respect of an application for the variety right found to be in order after preliminary examination, the examination and approval authorities shall announce it and advise the applicant to pay the examination fee within three months.
In respect of an application for the variety right found not to be in order after preliminary examination, the examination and approval authorities shall invite the applicant to submit its or his observations or make amendments within three months; where no response is made on expiration of the time limit or where the application is still found not to be in order after amendment, the application shall be rejected.

Article 29． After an applicant pays the examination fee according to the provision, the examination and approval authorities shall carry out a substantive examination of its or his application for the variety right in respect of speciality, homogeneity and stability.
Where an applicant fails to pay the examination fee according to the provision, the application for the variety right shall be deemed to have been withdrawn.

Article 30． The examination and approval authorities carry out substantive examination mainly on the basis of the application document and other relevant written material. Where it is deemed necessary, the examination and approval authorities may entrust a designated testing organization to carry out tests or to study the results of planting or of other experiments.
Owing to the needs of examination, the applicant shall, in accordance with the requirement of the examination and approval authorities, provide the necessary data and the propagating material of the new plant variety.

Article 31． In respect of an application for the variety right found to conform to the provisions of these Regulations after substantive examination, the examination and approval authorities shall make a decision to grant the variety right, issue a certificate of variety right, and have it registered and announced.
Where an application for the variety right is found not to conform to the provisions of these Regulations, the examination and approval authorities shall reject it and notify the applicant of the rejection.

Article 32． The examination and approval authorities shall set up a New Plant Variety Reexamination Board.
An applicant not satisfied with the rejection of its or his application for the variety right by the examination and approval authorities may, within three months from the date of receipt of the notice, request the New Plant Variety Reexamination Board to make a reexamination. The New Plant Variety Reexamination Board shall, within six months from the date of receipt of the written request for reexamination, make a decision and notify the applicant.
An applicant not satisfied with the decision of the New Plant Variety Reexamination Board may, within fifteen days from the date of receipt of the notice, institute proceedings in the People's Court.

Article 33． After a variety right is granted, the owner of the variety right shall enjoy the right to claim compensation from entities and individuals producing or selling, without the authorisation of the applicant, the propagating material of the granted variety for commercial purposes during the period from the date on which the application for the variety is found to be in order after preliminary examination and announced to the date on which the variety right is granted.
Chapter VI Period of Protection, Cessation and Invalidation

Article 34． The period of protection for vines, forest trees, fruit trees and ornamental trees shall be twenty years and that for other plants shall be fifteen years from the date of grant.

Article 35． An variety right owner shall begin to pay the annual fee from the same year the variety right is granted and shall, in accordance with the requirement of the examination and approval authorities, provide the propagating material of the granted variety for use in testing.

Article 36． In any of the following events, the variety right shall cease before the expiration of its period of protection:
(1) the variety right owner abandons the variety right by making a declaration in writing;
(2) the variety right owner fails to pay the annual fee as prescribed;
(3) the variety right owner fails to provide, in accordance with the requirement of the examination and approval authorities, the propagating material of the granted variety which is needed for testing;
(4) the granted variety is found, after testing, no longer true to the special characteristics and properties it had at the time the variety right was granted.
The cessation of the variety right shall be registered and announced by the examination and approval authorities.

Article 37． Beginning from the date on which the examination and approval authorities announce the grant of the variety right, the New Plant Variety Reexamination Board may, in accordance with its functions and powers or the written request of any entity or individual, declare the variety right invalid for failing to conform to the provisions of Articles 14, 15, 16, 17 of these Regulations and change the denomination of a new plant variety for failing to conform to the provision of Article 18 of these Regulations. The examination and approval authorities shall register and announce the decision on declaring the variety right invalid or changing the denomination and notify the party concerned.
Where the party concerned is not satisfied with the decision of the New Plant Variety Reexamination Board, it or he may, within three months from the date of receipt of the notice, institute proceedings in the People's Court.

Article 38． A variety right which has been declared invalid shall be deemed to be non-existent from the beginning.
The decision on declaring the variety right invalid has no retroactive effect on a judgment or ruling on the infringement of the new plant variety made by the People's Court and already executed before the invalidation, a decision on dealing with the infringement of the new plant variety made by the administrative department for agriculture or forestry of a People's Government at or above the provincial level and already executed, or a licence contract for the exploitation of the new plant variety or a contract for the assignment of the new plant variety already performed. However, where losses are caused to another person through had faith on the part of the variety right owner, reasonable compensation shall be made to the aggrieved party.
Pursuant to the provision of the foregoing paragraph, where the variety right owner or assignor has not returned to the licensed exploiter or the assignee the exploitation fee or the money paid for the assignment, clearly contravening the principle of equity, the variety right owner or assignor shall return to the licensed exploiter or assignee all or party of the exploitation fee or the money paid for the assignment.

Chapter Ⅴ
Provisions of Penalties

Article 39． Where anyone produces or sells, for commercial purposes, the propagating material of a granted variety without the authorisation of the variety right owner, the variety right owner or an interested party may request the administrative departments for agriculture and forestry of a People's Government at or above the provincial level to deal with the matter in accordance with their respective functions and powers, or it or he may directly institute proceedings in the People's Court.
The administrative departments for agriculture and forestry of a People's Government at or above the provincial level may, according to their respective functions and powers and on the principle of voluntariness regarding the parties, may mediate in a dispute over the compensation for damages caused by infringement. Where an agreement is reached after mediation, the parties shall carry it out; where an agreement fails to be reached after mediation, the variety right owner or interested party may institute proceedings in the People's Court according to the civil procedure.
The administrative departments for agriculture and forestry of a People's Government at or above the provincial level, when investigating and dealing with cases of infringement on the variety right according to their respective functions and powers, may, in order to safeguard the public interest, order an infringer to desist from the infringing act and confiscate the illegal income, and may also impose a fine of not more than five times the illegal income.

Article 40． Where parties pass off plant varieties as granted, the administrative departments for agriculture and forestry of a People's Government at or above the county level shall, according to their respective functions and powers, order them to desist from the passing-off act, confiscate their illegal income and the propagating material of the varieties of plants and impose a fine of not less than twice and not more than five times the illegal income; where the circumstances are serious, with the passing off act constituting a crime, the actor shall be prosecuted for its or his criminal liability according to law.

Article 41． Where the administrative departments for agriculture and forestry of a People's Government at or above the provincial level investigate and deal with cases of infringement on the variety right according to their respective functions and powers, and where the administrative departments for agriculture and forestry of a People's Government at or above the county level investigate and deal with cases of passing off plant varieties as granted according to their respective functions and powers, they may, if need be, seal up or impound the propagating material of varieties of plants relevant to the cases and inspect, reproduce or seal up contracts, account books and related documents having to do with the cases.

Article 42． The administrative departments for agriculture and forestry of a People's Government at or above the county level shall, according to their respective functions and powers, to rectify the matter within a prescribed time limit, and may impose a fine of not more than RMB1,000 yuan.

Article 43． Where a dispute arises between parties over the attribution of the right to apply for the variety right with regard to a new plant variety and of the variety right, either of them may institute proceedings in the People's Court.

Article 44． Where staff members of the administrative departments of a People's Government at or above the county level and of relevant departments abuse their powers, neglect their duty, act wrongfully out of personal considerations, or demand and accept bribes, constituting crimes, they shall be prosecuted for their criminal liability according to law; where the acts have not yet constituted crimes, they shall be disciplined administratively.

Chapter Ⅵ
Supplementary Provisions

Article 45． The examination and approval authorities may make accommodating provisions for the novelty requirements of botanical genera or species among the first batch to be included in the Catalogue of Protected Varieties of Plants before the coming into effect of these Regulations and those newly included in the Catalogue of Protected Varieties of Plants after the coming into effect of these Regulations.

Article 46． These Regulations shall come into effect as of 1 October 1997.

4.Implementing Rules For The Regulations Of The Peoples Republic Of China On The Protection Of New Varieties Of Plants
(agriculture part)
Promulgated by the Ministry of Agriculture on April 27, 1999

CHAPTER I
General Provisions

Rule 1. These Rules are formulated in accordance with the Regulations of the People’s Republic of China on the Protection of a New Varieties of Plants (hereinafter referred to as the Regulations).

Rule 2. New varieties of agricultural plants shall include those of grains, cotton, oil seeds, hemp, sugar crops, vegetables (including water melon and mask melon), tobacco, mulberries, tea shrubs, fruit trees (except dry fruit), ornamental plants (except woody plants), grass, green manure, herbaceous medicinal materials and tropical crops such as rubber.
The provisions of these Rules shall apply to the protection of new varieties of edible fungi.

Rule 3. The Ministry of Agriculture shall be the authority for examining and approving rights in new varieties of agricultural plants (hereinafter referred to as variety rights) under Article 3 of the Regulations, and shall grant such rights in accordance with the provisions of the Regulations.
The Office for the Protection of New Varieties of Agricultural Plants under the Ministry of Agriculture (hereinafter referred to as the Office of Agriculture) shall undertake the tasks of receiving and examining applications for variety rights, and shall deal with other related matters.

Rule 4. No variety rights shall be granted to any new variety of plants that is harmful to the public interest and the ecological environment.

CHAPTER II
Content and Ownership of Variety Rights

Rule 5. The propagating materials referred to in the Regulations shall mean both the seeds and other parts of the body of a plant, which can propagate plants.

Rule 6. Entities or persons applying for variety rights are generically designated as applicants for variety rights; and entities or persons granted with variety rights are generically designated as variety rights holders.

Rule 7. Service breeding accomplished by any person in undertaking tasks for the entity to which he belongs as referred to in Article 7 of the Regulations shall mean the following:
(i) breeding accomplished in the course of performing his own duty;
(ii) breeding accomplished in the execution of any task other than his own duty, but assigned by the said entity;
(iii) breeding accomplished within three years from his resignation, retirement or transfer, and related to his work in the entity from which he resigns, retires or is transferred, or to the tasks assigned to him by that entity
The facilities of the entity referred to in Article 7 of the Regulations shall mean the financial resources, instruments and equipment, and testing sites of the entity, as well as the breeding materials and technical information owned or held by the entity, whose disclosure to the public is not yet authorised.

Rule 8. The person who has accomplished the breeding of new varieties as referred to in Article 8 of the Regulations shall mean any entity or person who has accomplished the breeding of new varieties.

Rule 9. The person who has accomplished the breeding of new varieties (hereinafter referred to as the breeder) shall mean the person who has made creative contributions to the breeding of new varieties. Those who are responsible only for organizational and managerial work, facilitate access to facilities, or perform other auxiliary functions shall not be considered as breeders.

Rule 10. Where two or more applicants apply separately for the same variety rights simultaneously, the Office of Agriculture may require the applicants to provide, within a fixed time limit, evidence to prove that he is the person who has first accomplished the breeding of the new variety concerned. Where no evidence is provided within the said time limit or where the provided evidence is not sufficient to serve as the basis of a judgement, the applicants shall decide upon ownership of the right to file an application by consultation among themselves; where a decision cannot be arrived at by consultation, the Office of Agriculture may refuse their applications.

Rule 11. If a Chinese entity or person wishes to assign to a foreigner the right to file an application or the variety rights in respect of a new plant variety bred in China, such assignment shall
be subject to examination and approval by the Ministry of Agriculture. Where it concerns service breeding, the assignment shall be examined, verified and approved by the administrative departments of agriculture of the provincial People’s Governments (and for national entities, by their competent authorities) before its submission to the Ministry of Agriculture; where it does not concerns service breeding, it shall be submitted directly to the Ministry of Agriculture for examination and approval. If a State-owned entity wishes to assign the right to file an application or the variety rights within China, such assignment shall be subject to approval by the competent administrative department at a higher level, to which the entity is subordinate.
The Ministry of Agriculture shall publish the assignment of the right to file an application or of the variety rights, which shall enter into force on the date of its publication.

Rule 12. The Ministry of Agriculture may decide to grant a compulsory license to produce, sell and exploit new varieties of plants under any of the following circumstances:
(i) where it is necessary for the national or public interest;
(ii) where the variety rights holder has no justifiable grounds not to exploit the variety himself nor to authorize its exploitation by others under reasonable conditions;
(iii) where, in respect of a variety of important crops, although the variety rights holder has already exploited them, his exploitation clearly cannot meet the demands of the domestic market, and he does not authorize its exploitation by others under reasonable conditions.
Where a compulsory license is requested, a request to that effect shall be made to the Ministry of Agriculture, stating the grounds thereof and accompanied by supporting documents each in two copies.

Rule 13. Any party who requests for adjudication of the exploitation fees by the Ministry of Agriculture under paragraph 2 of Article 11 of the Regulations shall make a request to that effect, accompanied by supporting documents that can show the failure to reach an agreement. The Ministry of Agriculture shall adjudicate within three months from the date of receipt of the request and shall notify the parties concerned accordingly.

CHAPTER III
Conditions for the Grant of Variety Rights

Rule 14. In accordance with the provisions of Articles 45 of the Regulations, the Ministry of Agriculture may grant variety rights where, within two years from the date of publication of the list of protected new plant varieties, an application for variety rights is filed in respect of the genera and species first included in the said list before the entry into force of the Regulations and those added thereto after the entry into force of the Regulations, provided that the propagating materials of the variety in respect of which variety rights are applied for have not been for sale, with the consent of the variety holder, for more than four years within the territory of China, and that the requirements for distinctness, uniformity, stability and the denomination are complied with.

Rule 15. In accordance with the provisions of Article 18 of the Regulations, any of the following shall be avoided in the selection of a denomination for a new variety:
(i) those consisting of only numbers;
(ii) those in violation of national laws or social morals, or with ethnic discriminations;
(iii) those using the names of countries;
(iv) those using the names of places of administrative districts at county level or above, or the names of well known places in foreign countries;
(v) those using the same or similar identifying names of intergovernmental international organizations or famous international or national organizations;
(vi) those that are liable to mislead as to the features or characteristics of the new variety of plant, or as to the identity of the breeder;
(vii) those that are the known denominations of the same or similar genera or species of plants;
(viii) those with an effect of exaggeration in their promotion.

CHAPTER IV
Application for Variety Rights and Receipt thereof

Rule 16. Where Chinese entities and persons apply for variety rights, they may file an application with the Office of Agriculture directly or through a representative agency designated by the said Office.

Rule 17. Where foreigners, foreign enterprises or other foreign organizations with no habitual residence in China apply for variety rights, they shall file an application with the Office of Agriculture through a representative agency designated by the said Office for relations with foreigners.

Rule 18. Any applicant who appoints a representative agency to apply for variety rights or to handle other matters before the Office of Agriculture shall file at the same time a power of attorney, specifying the scope of power entrusted. The Office of Agriculture shall directly contact the representative agency for related procedures.
Where two or more applicants are concerned and no representative agency is appointed, one of them shall be indicated as the representative.

Rule 19. For the purpose of applying for variety rights, an application, a description (including the abstract of the description and the technical questionnaire) and a photograph shall be filed, each in two copies, with the Office of Agriculture.

Rule 20. An application shall include the following elements:
(i) a provisional denomination of the new variety;
(ii) the denomination both in Chinese and in Latin of the genera and species to which the new variety belongs;
(iii) the name of the breeder;
(iv) the name, address, postal code, contact person, telephone number and fax number of the applicant;
(v) the nationality of the applicant;
(vi) where the applicant is a foreign enterprise or another organization, the name of the country in which its headquarters is located;
(vii) the starting and ending dates for the breeding of the new variety and the main region where the breeding is conducted.

Rule 21. A description shall include the following elements:
(i) a provisional denomination of the new variety, which shall be the same as that in the application;
(ii) the denomination both in Chinese and in Latin of the genera and species to which the new variety belongs;
(iii) an indication on the background information concerning the comparison between the new variety and similar varieties both at home and abroad;
(iv) an indication on the breeding process and methods, including the genealogical table, cultivating details and the parent seeds or propagating materials used;
(v) an indication on its sale;
(vi) a detailed description of distinctness, uniformity and stability;
(vii) an indication on the region or environment suitable for its growing and on the cultivating techniques.
The description shall not contain statements with an effect of depreciating other plant varieties or exaggerating the practical value of the new variety. The technical questionnaire may be submitted when the examination fee is paid.

Rule 22. The photograph referred to in Article 21 of the Regulations shall conform to the following requirements:
(i) helpful to illustrate the distinctness of the variety in respect of which the application is filed;
(ii) showing on the same photograph the comparison concerning one kind of characters;
(iii) in colour, or in black and white as may be required by the Office of Agriculture, where necessary;
(iv) of a size of 8.5cm x12.5 cm or of 10 cm x15 cm;
(v) accompanied by a brief graphic description.

Rule 23. The Office of Agriculture shall not receive any of the following application documents for variety rights:
(i) where any of the request, description or photograph is missing;
(ii) where Chinese is not used;
(iii) where the prescribed format is not used;
(iv) where they are not typed or printed;
(v) where they are illegible or altered;
(vi) where the name, address or postal code of the applicant is missing.

Rule 24. Where the Office of Agriculture deems it necessary, the applicant should furnish the propagating materials of both the variety in respect of which the application is filed and the variety for comparison, for the purpose of examination and testing of the variety in respect of which the application is filed.

Rule 25. The propagating materials furnished by the applicant shall be in consistence with those of the new variety of plant as described in the application documents for variety rights, and shall conform to the following requirements:
(i) not having suffered from accidental damage or been under chemical treatment;
(ii) free from quarantinable and harmful organisms;
(iii) recently harvested if the propagating materials furnished are seeds.
The propagating materials shall be furnished in such a manner as to comply with the requirements concerning the date, quantity, quality and other requirements as prescribed by the Office of Agriculture and in Rules 26, 27 and 28 of the present implementing Rules. Where propagating materials are not furnished within the time limit or not in the prescribed manner, the application shall be deemed to have been withdrawn.

Rule 26. The applicant shall furnish the propagating materials within three months from the date of receipt of the notification to that effect by the Office of Agriculture. Where seeds are concerned, the applicant for variety rights shall send them to the culture collection centres published by the said Office; where asexual propagating materials such as seedlings, bulbs, tubers and roots are concerned, the applicant shall send them to the testing institutions designated by the said Office.

Rule 27. The propagating materials shall be subject to quarantine in accordance with relevant provisions. Those found unacceptable upon quarantine or not quarantined shall be refused by the culture collection centers or the testing institutions.

Rule 28. Where the quantity of the propagating materials furnished by the applicant is less than that prescribed by the Office of Agriculture, the culture collection centre or the testing institution shall notify the applicant to furnish the missing amount within one month from the date of receipt of the notification. In exceptional cases, however, where propagating materials have been furnished by the applicant in the prescribed quantity, but are still not sufficient for the purposes of testing or examination, the Office of Agriculture shall have the right to require the applicant to furnish the missing amount.

Rule 29. The culture collection centre or the testing institution shall issue a written note of acknowledgement upon receipt of the propagating materials furnished by the applicant, and shall finish its testing and examination on viability and other aspects within 20 days (except for plants with rest period) from the date of receipt of the propagating materials.
Where the said materials are found acceptable upon examination, the culture collection centre or the testing institution shall issue a written certificate of examination, and shall notify the Office of Agriculture accordingly. Where the propagating materials are found unacceptable upon examination, the culture collection centre or the testing institution shall notify the applicant to furnish new propagating materials of the variety in question within one month from the date of receipt of the notification.

Rule 30. The culture collection centre and the testing institution shall have the responsibility to keep confidential the propagating materials furnished by applicants, and shall prevent the said materials from loss, theft or other accidents both during the period of examination of the application for variety rights and within the term of protection after the grant of such rights.

Rule 31. Where a priority right is claimed under Article 23 of the Regulations, the applicant shall indicate in the application the filing date and number of the initial application for variety rights as well as the name of the country that has received it; in the absence of such indications, the priority right shall be deemed not to have been claimed. The copy of the initial application submitted by the applicant shall be certified by the original receiving authority.

Rule 32. When an applicant with no habitual residence or establishments in China applies for variety rights or claims a priority right, the Office of Agriculture may, where it deems necessary, require him or it to file the following documents:
(i) a certificate of his nationality;
(ii) where the applicant is an enterprise or another organization, documents certifying the location of its establishments or its headquarters;
(iii) documents certifying that the country to which the foreigner, the foreign enterprise or other foreign organization belongs recognizes the entitlement of Chinese entities and persons, under the same conditions as its own nationals, to the right to file an application for rights in new varieties of plants, the priority right and other rights related to variety rights in that country.

Rule 33. Where an applicant files an application for variety rights in a foreign country after having filed one with the Office of Agriculture, he or it may request the Office of Agriculture to issue a certificate concerning the priority right.

Rule 34. Where, under paragraph 2 of Article 19 of the Regulations, the new plant variety in respect of which Chinese entities and persons apply for variety rights involves national security or major interests and therefore needs to be kept confidential, the applicant shall indicate this fact in the application. The Office of Agriculture shall make a decision, upon examination, as to whether it should be dealt with as a confidential application, and shall notify the applicant accordingly; where the Office of Agriculture considers it necessary to keep an application confidential even though the applicant has not made such an indication, the said Office shall deal with it as a confidential application, and shall notify the applicant accordingly.

CHAPTER V
Examination and Approval of Variety Rights

Rule 35. In the procedures of preliminary examination, substantive examination, re-examination and invalidation, any person who carries out examination or re-examination under any of the following circumstances should withdraw on his own initiative; the parties concerned or any other interested person may challenge his presence:
(i) where he is a close relative of the party concerned or his agent;
(ii) where he has a direct interest in the application for variety rights or in such rights;
(iii) where he has such other kinds of relations with the party concerned or his agent that might affect impartial examination and handling.
The withdrawal of a person carrying out examination shall be decided upon by the Office of Agriculture, and the withdrawal of a person carrying out re-examination shall be decided upon by the Ministry of Agriculture.

Rule 36. Where an application for variety rights involves two or more new varieties, the Office of Agriculture shall, before it sends an invitation for the payment of examination fee, request the applicant to file a divisional application. If the applicant does not divide his application or does not give any response within the fixed time limit, the application shall be deemed to have been withdrawn.

Rule 37. A divisional application filed under Rule 36 of these Rules may keep the filing date of the application from which it is divided, and where priority right is claimed, also the date of priority right, provided that the divisional application does not go beyond the scope of the initial application for variety rights.
A divisional application shall be subject to relevant procedures under the provisions of the Regulations and these Rules.
The number and the filing date of the application from which it is divided shall be indicated in the request for a divisional application. Where priority right is claimed, a copy of the priority document of the initial application shall be submitted.

Rule 38. In accordance with the provisions of Article 27 of the Regulations, the Office of Agriculture shall carry out a preliminary examination on the application for variety rights, and shall notify the applicant of its examination result. In the case of any doubts, the Office of Agriculture may request the applicant to make observations or amendments within a prescribed time limit; if the applicant does not make a response within such time limit, the application shall be deemed to have been withdrawn. Where the Office of Agriculture finds it not in conformity with the relevant provisions even after the applicant has made observations or amendments, the Office shall refuse the application.

Rule 39. With the exception of the application for variety rights, any document related to it filed by the applicant with the Office of Agriculture that has any of the following irregularities shall be deemed not to have been filed:
(i) failure to use the prescribed format or to comply the requirements concerning the indications;
(ii) failure to file supporting document as prescribed.
The Office of Agriculture shall notify the applicant of its findings that the application is deemed not to have been filed.

Rule 40. During the period beginning on the date on which an acceptable application is published upon preliminary examination and ending on the date of grant of variety rights, anyone may raise an objection with the Office of Agriculture to the application for variety rights which is not in conformity with the provisions of the Regulations, and shall state the grounds thereof.

Rule 41. Amendments to the description of the application for variety rights shall be in the form of replacement sheets in a prescribed format, except for the alteration, insertion or deletion of a few words.

Rule 42. In accordance with the provisions of the Regulations and these Rules, an application for variety rights shall be refused upon substantive examination under the following circumstances:
(i) where any of the provisions in Articles 13, 14, 15, 16 and 17 is not complied with;
(ii) as prescribed in Rule 4 of these Rules;
(iii) where any amendment to the application or to the divisional application goes beyond the scope of the initial description in terms of its substance.

Rule 43. Applicants shall go through the procedures for receiving a certificate for variety rights and for paying the annual fee for the first year within three months from the date of receipt of the notification by the Office of Agriculture concerning such procedures.
Where the procedures are completed within the prescribed time limit, the Ministry of Agriculture shall grant variety rights, issue a certificate for such rights, and publish the grant accordingly. The variety rights shall come into force on the date of issuance of the said certificate.
Where the procedures are not completed within such time limit, the granted variety rights shall be deemed to have been renounced.

Rule 44. The Ministry of Agriculture shall invite experienced specialists on plant breeding and cultivation as well as legal experts and administrative personnel to form the Re-Examination Board for New Varieties of Plants (hereinafter referred to as the Re-Examination Board).
One leading cadre of the Ministry of Agriculture shall act concurrently as the Chairman of the Re-Examination Board. The Office of Agriculture may deal with matters related to re-examination pursuant to the mandates given by the Re-Examination Board.

Rule 45. Where the Re-Examination Board is requested to carry out re-examination under paragraph 2 of Article 32 of the Regulations, the applicant shall make a request to that effect, stating the grounds thereof and accompanied by relevant supporting documents.
The request and the supporting documents shall be filed each in two copies.
The applicant may make amendments to his refused application for variety rights when requesting for re-examination, provided that the amendments are limited to the part to which the decision to refuse the application relates.

Rule 46. Where the request for re-examination is not in the prescribed format, the requesting party shall file supplements or corrections within the time limit fixed by the Re-Examination Board; where no supplements or corrections are filed within such time limit, the request for re-examination shall be deemed to have been withdrawn.

Rule 47. Where, upon re-examination, the Re-Examination Board finds that the request for reexamination does not conform to the provisions in the Regulations and these Rules, it shall notify the requesting party to make observations within a prescribed time limit; where no response is given within such time limit, the request for re-examination shall be deemed to have been withdrawn.

Rule 48. The requesting party for re-examination may withdraw his request before the Re-Examination Board has made a decision on it.

Rule 49. The Re-Examination Board may correct obvious mistakes in the application, and shall notify the applicant accordingly.

CHAPTER VI
Invalidation of Variety Rights

Rule 50. Any entity or person who requests the invalidation of variety rights under paragraph 1 of Article 37 of the Regulations shall make a request to that effect, and shall file relevant documents with the Re-Examination Board, each in two copies, stating the facts and grounds on which the request is based.

Rule 51. Invalidation of variety rights shall be based on the following facts and grounds:
(i) that the granted variety rights do not conform to any of the provisions of Articles 13, 14, 15, 16 and 17 of the Regulations;
(ii) that the granted variety rights fall into the categories prescribed by Rule 4 of these Rules.

Rule 52. Where a request for invalidation does not state the facts or grounds on which it is based or the stated grounds do not conform to the provisions in Rule 51 of these Rules, or where, after the Re-Examination Board has carried out examination on one request for invalidation and has decided to maintain the variety rights, the requesting party makes another request for invalidation on the basis of the same facts and grounds, the Re-Examination Board shall not accept the request.

Rule 53. The Re-Examination Board shall communicate to the variety rights holder a copy of the request for invalidation of variety rights and the copies of the relevant documents, and shall invite him to make observations within a prescribed time limit. It shall not have any effect on the examination by the Re-Examination Board if no response is given within such time limit.

Rule 54. After the Re-Examination Board has decided to change the denomination of a granted variety in accordance with paragraph 1 of Article 37of the Regulations, the Ministry of Agriculture shall record and publish such a change, and the Office of Agriculture shall notify the variety rights holder accordingly in a timely manner and re-issue a certificate for variety rights.
The variety rights holder shall not use the initial denomination of the variety once it has been changed.

Rule 55. The requesting party for invalidation of variety rights may withdraw his request before the Re-Examination Board has made a decision on it.

CHAPTER VII
Filing, Communication and Time Limit of Documents

Rule 56. For the purposes of the various procedures prescribed in the Regulations and these Rules, a written form shall always be taken.

Rule 57. All the documents under the Regulations and these Rules shall be filed in Chinese, and shall use the standard scientific and technical terms as well as other standard terms as prescribed by the State. Names of foreigners or foreign places, and foreign scientific and technical terms without a generally accepted Chinese translation may be indicated in theiroriginal language.
Papers and supporting documents that are filed under the Regulations and these Rules in a foreign language shall be accompanied by a Chinese translation; where such a translation is not accompanied, the supporting documents shall be deemed not to have been filed.

Rule 58. All the documents filed by the parties concerned with the Office of Agriculture and the Re-Examination Board shall be typed or printed in black, and shall be clear and neat.
The written part of the application shall run horizontally, and only one side of the paper shall be used.

Rule 59. All the documents filed by the parties concerned and those for other procedures shall be signed by, or affixed with a seal of, the applicant, the variety rights holder, any other interested person or his representative; if a representative agency is appointed, the documents may be affixed with a seal of the agency. Where a change is requested for in the name of the breeder, or in the name, nationality and address of the applicant or the variety rights holder, or in the name of the representative agency and the agent, the requesting party shall go through the procedures before the Office of Agriculture for a change in the bibliographic data, and in the meantime, shall file relevant supporting documents for the grounds on which such a change is based.

Rule 60. The party concerned may file any document by personal delivery or through a postal service. Filing through a postal service shall take the form of a registered mail, but not that of a parcel, and one letter shall contain only one application. In the case of filing through a postal service, the filing date shall be determined by the postmark. If the postmark on the envelope is illegible, the filing date shall be the date of receipt of the document by the Office of Agriculture and the Re-Examination Board unless the party concerned can prove otherwise.
Any document of the Office of Agriculture and the Re-Examination Board may be communicated to the party concerned through a postal service, by personal delivery or by publication. Where the party concerned has appointed a representative agency, the document shall be communicated to the agency; where no such agency is appointed, the document shall be communicated to the person first named in the request or to the representative. If the party concerned refuses to accept a document, the document shall be deemed to have been communicated.
Any document communicated through a postal service by the Office of Agriculture and the Re-Examination Board shall be deemed to have been received by the party concerned on the day immediately after 15 days from the date of dispatch.
In respect of any personally delivered document as may be required in accordance with relevant provisions, the date of communication shall be the date of such delivery.
Where a document cannot be communicated through a postal service due to an incorrect address for correspondence, it may be communicated to the party concerned by publication. The document shall be deemed to have been communicated before the expiration of two months from the date of publication.

Rule 61. In the calculation of any time limit prescribed in the Regulations and these Rules, the first day shall be excluded. Any period expressed in years or in months shall expire, in the relevant subsequent year or month, on the corresponding day in the last month of the period, except that, where the relevant month has no such corresponding day, the period shall expire on the last day of that month.
If a period expires on an official holiday, the period shall expire on the first working day after that official holiday.

Rule 62. Where a party fails to comply with a time limit prescribed in the Regulations and these Rules or fixed by the Office of Agriculture because of force majeure, and that failure has the consequence of causing a loss of variety rights, the party concerned may, within two months from the date on which the impediment is removed, but within two years following the expiration of the time limit at the latest, explain the reasons, furnish relevant supporting documents, and make a request for re-instatement of rights to the Office of Agriculture.
Where a party fails to comply with a time limit prescribed in the Regulations and these Rules or fixed by the Office of Agriculture because of a justified reason, and that failure has the consequence of causing a loss of variety rights, the party concerned may, within two months from the date of receipt of the notification, explain the reasons and make a request for re-instatement of rights to the Office of Agriculture.
Where extension of any time limit fixed by the Office of Agriculture is requested for, the party concerned shall, before the expiration of the time limit, state the grounds to the Office of Agriculture and go through the relevant procedures.
The provisions in paragraphs 1 and 2 of this Rule shall not apply to the time limits prescribed in Article 23, paragraphs 2 and 3 of Article 32, Article 34 and paragraph 2 of Article 37 of the Regulations.

Rule 63. Subject to the provisions of Article 22 of the Regulations, the filing date referred to in the Regulations shall mean the priority date where there is a priority right.

CHAPTER VIII
Fees and Gazette

Rule 64. An application fee, examination fee, annual fee and testing fee shall be paid in respect of an application for variety rights and other procedures to the Ministry of Agriculture in accordance with relevant provisions of the State.

Rule 65. The fees prescribed in the Regulations and in these Rules may be paid directly or via a postal or bank remittance, but not via telegraphic remittance.
Where fees are paid via a postal or bank remittance, indications shall be made as to the number of the application or of the variety rights, the name of the applicant or of the variety rights holder, the purpose of the payment and the denomination of the new variety.
In the case of payment via a postal or bank remittance, the date of payment shall be the date on which the payment is made.

Rule 66. The application fee under Article 24 of the Regulations may be paid by the applicant at the time of filing the application for variety rights, or within two months from the filing date at the latest. If the fee is not paid or is not paid in full within the time limit, the application shall be deemed to have been withdrawn.

Rule 67. In respect of an application for variety rights found to be acceptable upon preliminary examination, the applicant shall pay the examination fee, and the testing fee where necessary, within a prescribed time limit in accordance with the notification by the Office of Agriculture. If the fee is not paid or is not paid in full within the time limit, the application shall be deemed to have been withdrawn.

Rule 68. The annual fee for the first year after the grant of the variety rights shall be paid at the time when the applicant goes through the procedures of receiving the certificate for variety rights. Subsequent annual fees shall be paid one month in advance before the expiration of the term for the preceding year.

Rule 69. Where the applicant or the variety rights holder has not paid or has not paid in full, on time, the annual fee for the subsequent year after the first year of the grant of the variety rights, the Office of Agriculture shall invite the applicant to pay it or its missing part within six months from the expiration of the time limit within which the annual fee is due, together with a late payment fee which amounts to 25% of the annual fee. Where these fees are not paid within the time limit, the variety rights shall be terminated from the date of expiration of the time limit within which the annual fee is due.

Rule 70. Any applicant who has difficulties in paying some of the fees prescribed in Rule 64 of these Rules may make a request to the Office of Agriculture in accordance with relevant provisions for a reduction or retard of the payment, the details of which shall be prescribed separately.

Rule 71. The Ministry of Agriculture shall regularly publish relevant data concerning variety rights in a gazette on the protection of new varieties of plants.

CHAPTER IX
Penalty Provisions

Rule 72. Cases of infringement provided for in Article 39 of the Regulations shall be under the jurisdiction of the provincial administrative department of agriculture at the locality where the infringement takes place;
The case of infringement under the jurisdiction of two or more provincial administrative departments of agriculture shall be handled by the one that has first put the case on file for investigation and prosecution;
Where disputes arise between provincial administrative departments of agriculture as to the jurisdiction over a case of infringement, the Ministry of Agriculture shall designate the jurisdiction;
The Ministry of Agriculture may, where necessary, handle cases of infringement directly.
Where a provincial administrative department of agriculture considers that the significance and complexity of a case of infringement merit involvement by the Ministry of Agriculture, a request to that effect may be made to the latter.

Rule 73. Handling of cases of infringement by the administrative departments of agriculture at provincial level or above shall be subject to the following conditions:
(i) that the requesting party is the variety rights holder, or any entity or person that has a direct interest in the case of infringement of variety rights;
(ii) that the request is made in respect of a definite party, with specific claims and factual basis;
(iii) that the provisions in the Regulations and these Rules are complied with;
(iv) that neither party has filed a suit with the People’s Court.

Rule 74. Acts concerning counterfeited variety rights referred to in Articles 40 and 41 of the Regulations shall mean any of the following:
(i) printing, making or using counterfeited certificates for protected varieties, counterfeited numbers or other identifications of applications for variety rights or of the variety rights;
(ii) printing, making or using the number or other identifications of the applications for variety rights that have been refused, withdrawn or deemed to have been withdrawn;
(iii) printing, making or using certificates for, or numbers or other identifications of, the variety rights that have been terminated or invalidated;
(iv) producing or selling the varieties that fall into the categories included in items (i), (ii), (iii) of this Rule, and passing off an application or the denomination of a protected variety;
(v) selling protected varieties without using their registered denominations;
(vi) other acts that are liable to mislead others to assimilate an unprotected variety to a protected one.

Rule 75. Under Articles 40 and 41 of the Regulations, administrative departments of agriculture of the People’s Government at county level or above shall be responsible for monitoring, investigation and handling of acts concerning counterfeited variety rights that take place within the area under their jurisdiction.
The case concerning counterfeited variety rights under the jurisdiction of two or more administrative departments of agriculture at county level or above shall be handled by the one that has first put the case on file for investigation and prosecution.
Where disputes arise between the administrative departments of agriculture at county level or above as to the jurisdiction over a case concerning counterfeited variety rights, the administrative departments of agriculture at an immediately higher lever shall designate the jurisdiction;
Administrative departments of agriculture at an immediately higher level may, where necessary, handle cases concerning counterfeited variety rights under the jurisdiction of those at an immediately lower level. Where administrative departments of agriculture at a lower level considers that the significance and complexity of a case of infringement merit involvement by those at a higher level, a request to that effect may be made to the latter.

Rule 76. Administrative departments of agriculture shall pass an opinion of disposition within one month on the propagating materials of plant varieties sealed up or detained in accordance with the provision in Article 41 of the Regulations.

Rule 77. Where parties have filed a suit with the People’s Court concerning their disputes over the right to file an application for variety rights or over the variety rights, and the People’s Court has accepted it, the parties concerned shall request the Office of Agriculture to suspend the relevant procedures.
Where suspension of the relevant procedures is requested under the preceding paragraph, a request to that effect shall be made to the Office of Agriculture, accompanied by the copies of documents showing the acceptance of the case by the People's Court.

CHAPTER X
Supplementary Rules

Rule 78. Files of the applications for variety rights that are deemed to have been withdrawn, refused, or withdrawn on the initiative of applicants shall be kept until the end of two years from the date of lapse of the applications.
Files of the variety rights that are renounced, invalidated or terminated shall be kept until the end of three years from the date of lapse of the variety rights.

Rule 79. The Ministry of Agriculture shall be responsible for the interpretation of these Rules.

Rule 80. These Rules shall enter into force as from the date of their promulgation.

5.The Rules for the Implementation of the Regulations of the People's Republic of China On the Protection of New Varieties of Plants
(Forest Part)
Promulgated by the State Forestry Administration on 16 June 1999

Chapter Ⅰ
General Provision

Article 1. These Rules are formulated in accordance with the Regulations of the People's Republic of China on the Protection of New Varieties of Plants (hereinafter referred to as the Regulations)

Article 2. New plant varieties referred to these Rules are the varieties of forest tree, bamboo, and woody rattan, woody ornamental plant (including woody flower), fruit tree (dry fruit part), woody oil-bearing plant, plant used for beverage, plant used for condiment and woody herbs as well as other plants which are in conformity with Article 2 of the Regulations. The list of the protected plant varieties shall be determined and announced by the State Forestry Administration.

Article 3. The State Forestry Administration shall receive and examine the application for the rights of new plant varieties and shall grant the rights of new plant varieties (hereinafter referred to as variety rights) in accordance with the Regulations and these Rules. The Office of the Protection of New Varieties of Plants of the State Forestry Administration (hereinafter referred to as the Office of the Protection of New Varieties of Plants) is responsible for the receipt and examination of the application for rights in new varieties referred to in Article 2 of these Rules and shall organize the testing and preservation and other business relating to the protection of the new plant varieties and undertake international services concerning the protection of the new plant varieties in line with relevant regulations of the state.

Chapter Ⅱ
Content and ownership of Variety Rights

Article 4. The propagating material, which is referred to in the Regulations, is the whole plant (including stock), seed (including root, stem, leaf, flower and fruit etc.) and any part, which constitutes the plant body (including tissue and cell).

Article 5. The service breeding referred to in the Article 7 of the Regulations is:
(1) the breeding accomplished in his own work;
(2) the breeding accomplished by any person in undertaking, besides his own work, tasks assigned by the entity to which he belongs;
(3) the breeding accomplished by any person, which is related to the work in his original entity or the tasks assigned to him by his original entity, within three years after he leaves his original entity; or
(4) the breeding accomplished by using the capital, instrument, equipment, testing ground, propagating resources and other breeding material as well as not-open-to-the-public technical references of the entity to which he belongs. All other breeding is regarded as non-service breeding accept for the cases prescribed in the preceding provisions of this Article.

Article 6. The person who has accomplished the breeding of the new plant variety concerned, the applicant for the variety rights and the variety right holder referred to in Article 8 of the Regulations shall all include the entity or individual.

Article 7. Where two applicants or more apply separately for the variety rights in respect of the same new plant variety on the same time, the Office of the Protection of New Varieties of Plants may request the applicants to consult among themselves so as to determine the ownership of the right to file the application for variety rights in respect of the new plant variety concerned; if the consultation fails to reach consensus, the Office of the Protection of New Varieties of Plants shall request the applicants to provide within the prescribed period the evidence to prove that he himself is the person who has first accomplished the breeding of the new plant variety concerned. In case no evidence is provided within the time limit, the application shall be regarded as having been renounced .

Article 8. Where a Chinese entity or individual whishes to assign the right to file an application for the variety rights or assign the variety rights to a foreigner in respect of a new plant variety bred in China, the assignment shall be submitted to the State Forestry Administration for approval. Where a State-owned entity wishes to assign the right to file an application for the variety rights or assign the variety rights in respect of a new plant variety within the country, the assignment shall be approved by higher competent department concerned. In case of assignment of the right to file an application for the variety rights or assignment of the variety rights, the party concerned shall make a contract in writing and register with the State Forestry Administration. The State Forestry Administration shall publish the assignment.
The assignment of the right to file an application for the variety rights or the assignment of the variety rights shall enter into force as from the date of the publication.

Article 9. In accordance with Article 11 of the Regulations, the State Forestry Administration may decide or may decide at the request of the parties concerned to grant a compulsory license to exploit new plant varieties in any of the following cases:
(1) to meet the country's interest or public interest and other particular needs; or
(2) the variety rights holder concerned does not exploit by himself the new plant variety with no appropriate reasons nor permit other person to request, under reasonable conditions, the exploitation of the new plant variety concerned.
The entity which or the individual who requests a compulsory license shall give reasons by submitting an application for the compulsory license. The relevant certification shall also be attached with. Both the application and the certification shall be in duplication

Article 10. In accordance with Provision 2, Article 11 of the Regulations, where the State Forestry Administration is requested to adjudicate the amount of fee payable for the compulsory license to exploit new plant varieties, the parties concerned shall submit a request for adjudication attached with the related material to show that the parties concerned have failed to reach an agreement. The State Forestry Administration shall make the adjudication and notify the parties concerned within three months as from the date of receiving the request.

Chapter Ⅲ
Conditions for the Grant of Variety Rights

Article 11. Where the variety rights are granted, it shall be in conformity with Articles 13, 14,15, 16,17,18 of the Regulations and Article 2 of the Rules.

Article 12. In accordance with Article 45 of the Regulations, regarding the genera or species first included in the list of protected plant varieties before the entry into force of the Regulations and the genera or species included in the list of protected plant variety after the entry into force of the Regulations, where the application for variety rights is filed within one year from the date of publication of the list, and the propagating material of the said plant varieties concerned has been for sale within China for less than four years with the consent of the breeder, the plant varieties concerned shall be deemed to possess novelty.

Article 13. Besides the provisions of Article 16 of the Regulations, the following shall also be avoided in the selection of a denomination for a new variety:
(1) those violating laws of the state and provisions of the administrative regulations or containing national discrimination;
(2) those named after a country;
(3) those named after a place of an administrative regions at county level or above or a well-known place of a foreign country; or
(4) those that are the same or similar to the denomination of inter-governmental international organizations, other internationally or domestically well-know organizations or marks as well; or
(5) those that are the same or similar to the known denomination of a genera or species.

Chapter Ⅳ
Application for Variety Rights and Receipt thereof

Article 14. Where any Chinese entity or individual applies for variety rights, it or he may file an application to the State Forestry Administration directly or entrust a representative agency designated by the State Forestry Administration for the purpose.

Article 15. Where the new plant variety in respect of which Chinese entity or individual applies for variety rights involves national security or major interest and it needs to be kept confidential, the applicant shall give clear indication of it in the application documents. The Office of the Protection of New Varieties of Plants shall handle the case in accordance with the state regulations concerning the confidentiality and then notify the applicant accordingly. Where the Office of the Protection of New Varieties of Plants deems that the new plant variety needs to be kept confidential, but it is not indicated in the documents of the application by the applicant, the Office of the Protection of New Varieties of Plants shall address it as a confidential application and notify the applicant accordingly.

Article 16. If a foreigner who, a foreign enterprise or any other foreign organization files an application for the variety rights to or handle other matters concerning the variety rights with the State Forestry Administration, a representative agency dealing with foreign affairs which is designated by the State Forestry Administration shall be entrusted for the purpose.

Article 17. Where any applicant entrusts the representative agency to file an application for the variety rights to or handle other relevant matters with the State Forestry Administration, a trust deed shall be submitted, stating the terms of reference of the trust. In case there are two applicants or more and they have not entrusted any representative agency, one party concerned shall be clearly determined as the representative.

Article 18. Where any applicant files an application for variety rights, the application and specifications, which are in conformity with the forms prescribed by the State Forestry Administration as well as photographs, which are in conformity with the Article 19 of the Rules, shall be submitted in duplication to the Office of the Protection of New Varieties of Plants.

Article 19. The photographs refereed to in Article 21 of the Regulations shall be in conformity with the following requirements:
(1) the photographs shall be conducive to the explanation of distinctness of the plant variety concerned which the application for its variety rights is filed;
(2) the comparison of one characteristic is shown on the same photograph;
(3) the photographs shall be colored;
(4) the specification of the photographs is 8.5 cm x 12.5 or 10cm x 15 cm; and 5) there shall be a brief caption for photographs and the Office of the Protection of New Varieties of Plants may request the applicant to provide black and white photographs if necessary.

Article 20. The Office of the Protection of New Varieties of Plants shall not receive the documents of the application for variety rights in any of the following cases:
(1) the documents are incomplete or not in conformity with the prescribed forms;
(2) the writing is unclear or severely altered; and
(3) Chinese language is not used.

Article 21. the Office of the Protection of New Varieties of Plants may request the applicant to submit the propagating material of the applied variety and the check variety for the purpose of examination and inspection.

Article 22. The applicant shall deliver the propagating material within three months as from the date of receiving the note of the Office of the Protection of New Varieties of Plants. Where seeds are delivered, the applicant for the variety rights shall hand it over to the reservation agency designated by the Office of the Protection of New Varieties of Plants; where the asexual propagating material is delivered, the applicant shall hand it over to the testing agency designated by the Office of the Protection of New Varieties of Plants. Where the applicant fails to hand it over within the time limit, the application shall be regarded as having been renounced.

Article 23. The propagating material handed over by the applicant shall be quarantined in accordance with related regulations of the state; in case the propagating material, which has to be quarantined, has not been quarantined or has failed to pass the quarantine, the reservation agency or testing agency shall not receive it.

Article 24. Where the propagating material handed over by the applicant fails to satisfy the testing or satisfy the need of testing or fails to meet the testing requirement, the Office of the Protection of New Varieties of Plants may request the applicant to make up the deficiency. Where the applicant has made up the deficiency three times but it still fails to be in conformity with the provisions, the application shall be regarded as having been renounced.

Article 25. The propagating material handed over by the applicant shall be in conformity with the following requirements:
(1) to be identical with the propagating material of the said new plant variety described in the documents of the application for variety rights;
(2) to be recently harvested or collected;
(3) to be free of disease and pest; and
(4) to be untreated with medicine. If the propagating material handed over by the applicant has been undergone medical treatment, the denomination of the medicine and the method and purpose of the use of the treatment shall be attached with.

Article 26. Upon receiving the propagating material delivered by the applicant, the reservation agency or testing agency shall give a receipt to the applicant. Where the propagating material handed over by the applicant passes the inspection, the reservation agency or the testing agency shall issue the certificate of inspection in writing to the applicant and at the same time report it to the Office of the Protection of New Varieties of Plants accordingly; where the propagating material fails to pass the inspection, the reservation agency or the testing agency shall report it to the Office of the Protection of New Varieties of Plants. The Office of the Protection of New Varieties of Plants shall handle the case in accordance with the relevant regulations afterwards.

Article 27. The reservation agency and the testing agency shall keep secrete and take care of the propagating material delivered by the applicant during the period of the examination of the application for variety rights and during the period of the validity of the variety rights. Article 28 Where any foreigner who, foreign enterprise or other foreign organization which does not have permanent residence or business office in China applies for variety rights or claims to the right of priority, the Office of the Protection of New Varieties of Plants may request him or it to provide the following documents:
(1) the certificate for nationality;
(2) the certification of the business office or headquarters location if the applicant is an enterprise or other organization; and
(3) the certification that the country, to which the foreigner, the foreign enterprise or other foreign organization belongs, recognizes that the Chinese entities or individuals may enjoy in the same country the right to file an application for variety rights, the right of priority and other rights related to the variety rights under the same conditions as are accorded to its own nationals.

Article 29. Any applicant who applies for variety rights with foreign countries may, after submitting to the Office of the Protection of New Varieties of Plants the application for variety rights, request the Office of the Protection of New Varieties of Plants to issue the certificate of right of priority. Where the requirements concerned are met, the Office of the Protection of New Varieties of Plants shall issue the certificate of right of priority.

Article 30. Where the applicant withdraws the application for variety rights, he shall submit to the State Forestry Administration an statement of withdrawal of application, indicating the denomination of the plant variety concerned, the filing number and the filing date.

Article 31. Where a Chinese entity or individual wishes to apply for variety rights with a foreign country in respect of a new plant variety bred in China, it or he shall register at the State Forestry Administration.

Chapter Ⅴ
Examination and approval of Variety Rights

Article 32. In conducting the preliminary examination of the application for variety rights, the State Forestry Administration may request the applicant to state his views or make amendment on some issues concerned within the prescribed period.

Article 33. Where an application for new plant variety rights includes applications for two new plant varieties or more, the Office of the Protection of New Varieties of Plants shall, prior to the issuance of the notification for the substantial examination, request the applicant to submit the application on separate-case base within the prescribed period. Where the applicant fails to amend his application to be the application on separate-case base within the prescribed period or fails to respond within the time limit, the application shall be regarded as having been withdrawn.

Article 34. The application on separate-case base filed in accordance with Article 33 of these Rules may retain the original filing date. The date of right of priority may also be retained if the right of priority is enjoyed, but it shall not exceed the scope of the original application. For the application on separate-case base, all procedures shall be completed in accordance with the provisions of the Regulations and these Rules. In the request letter of the application on the separate-case base the filing number and the filing date of the original application shall be clearly indicated. Where the original application enjoys the right of priority, a duplicate of the documents of the original application for priority right shall be submitted.

Article 35. The State Forestry Administration shall publish the applications for the variety rights, which are proved to be in conformity with the Regulations and these Rules by the preliminary examination. From the date of publication of the application for variety right till the date before the date of publication of grant of the variety rights, any person may submit to the State Forestry Administration his opinions on any application for variety rights which does not conform to the Regulations and give reasons accordingly.

Article 36. For the amended part in the specification for the application for variety rights except for the few wording to be changed, added or deleted, the replaced pages shall be submitted in line with the prescribed forms.

Article 37. Where the application for variety rights are proved to be in conformity with the Regulations by the substantial examination, the State Forestry Administration shall decide to grant the variety rights, issue the certificate for the variety rights to the applicant for variety rights and make registration and publication. The applicant shall, within three months from the date of receipt of the notice of obtaining the certificate of variety rights, complete the procedures for obtaining the certificate of variety rights and pay the annual fee for the first year in accordance with the relevant regulations of the state. Where the applicant fails to obtain the certificate of variety rights and pay the annual fee with the time limit, the variety rights shall be regarded as having been renounced unless there are justifiable reasons.

Article 38. The Re-Examination Board for New Varieties of Plants of the State Forestry Administration (hereinafter referred to as Re-Examination Board) shall consist of experienced experts on plant breeding, experts on plant cultivation and experts on laws and other administrative managerial personnel concerned. The chairman of the Re-Examination Board shall be appointed by the principal responsible person of the State Forestry Administration. The Office of the Protection of New Varieties of Plants shall handle re-examination-related matters in line with the decision of the Re-Examination Board.

Article 39. Where any applicant applies for re-examination to the Re-Examination Board in accordance with Provision 2, Article 32 of the Regulations, he shall submit the application for re-examination, which shall be in conformity with forms prescribed by the State Forestry Administration, and the relevant certification shall be attached with. The application for re-examination and certification shall be in duplication. Where any applicant applies for re-examination, he may amend the documents of the application for the variety rights which has been refused, but the amendments shall be limited just to the part which is involved in the decision on the refusal of the application .

Article 40. Where the application for the re-examination is not in conformity with the requirements, the applicant for the re-examination shall make supplement and amendments within the time limit designated by the Re-Examination Board; where the applicant fails to make supplement and amendments within the time limit or the supplement and amendments still fail to meet the requirements, the application for the re-examination shall be regarded as having been renounced.

Article 41. The applicant for the re-examination may withdraw the application for ex-examination prior to the decision made by the Re-Examination Board.

Chapter Ⅵ
Termination and nullity of variety rights

Article 42. Where the variety rights are cancelled prior to the expiration of the protection period in accordance with Article 36 of the Regulation, the date of the cancellation of the variety rights is:
(1) in case the variety rights holder renounces the variety rights in a written statement, the variety rights shall be cancelled from the date of the statement;
(2) in case the applicant for variety rights fails to pay the annual fee in accordance with the relevant regulations, the variety rights shall be cancelled from the date of expiration of the period for the overdue payment of annual fee; or
(3) in case the variety rights holder fails to provide, in accordance with the requirements concerned, the inspection-needed propagating material of the said variety in respect of which the variety frights have been granted or the propagating materials he has handed over fails to meet the requirements concerned .The State Forestry Administration shall register it and the said variety rights shall be cancelled from the date of the registration.
(4) in case the inspection shows that the said variety in respect of which the variety rights have been granted is no longer in conformity with the features or characteristics of the variety in respect of which the variety right were then newly granted, the variety rights shall be cancelled from the date of the registration by the State Forestry Administration.

Article 43. Where any entity or individual requests to have the variety rights declared null and void in accordance with Provision 1, Article 37 of the Regulations, an application for having the variety right declared null and void, which shall be in conformity with the forms prescribed by the State Forestry Administration, and the relevant documents shall be submitted to the Re-Examination Board in duplication and explain the facts and reasons based upon.

Article 44. Where the granted variety rights do not conform to the provisions of Articles 14, 15,16,and 17 of the Regulations, the Re-Examination Board shall declare the variety rights null and void in accordance with its functions and powers or at the written request of any entity or individual. The declaration of the variety rights null and void shall be registered and published by the State Forestry Administration and notified to the party concerned by the Office of the Protection of New Varieties of Plants.

Article 45. The Re-Examination Board shall not accept the application when it is established that the application for having variety rights declared null and void are not explained the facts and reasons based upon or that the Re-examination Board has examined the application for having a set of variety rights declared null and void and decided to maintain the variety rights, but the applicant again applies for having the variety rights declared null and void by using the same facts and reasons.

Article 46. The Re-Examination Board shall, within 15 days as from the date of receiving the request of having the variety rights declared null and void, deliver to the variety rights holder a duplicate of the request of having the said variety rights declared null and void and other relevant documents. The variety rights holder shall state his views within three months. If the variety rights holder does not respond with the time limit, the adjudication of the Re-Examination Board shall not be affected.

Article 47. After the Re-Examination Board makes the decision to change the denomination of a variety in respect of which the variety rights have been granted, the State Forestry Administration shall register and publish it and the Office of the Protection of New Varieties of Plants shall notify the variety rights holder and change the certificate of variety rights. After the change of the denomination of the variety concerned in respect of which the variety rights have been granted, the variety rights holder shall no be in position to use the original denomination of the said variety in respect of which the variety rights have been granted.

Article 48. Any applicant for having the variety rights declared null and void may withdraw his application prior to the decision made by the Re-Examination Board on the application for having the variety rights declared null and void.

Chapter Ⅶ
Submission, Delivery and Term of the Documents

Article 49. All matters prescribed by the Regulations and these Rules shall be handled in written forms.

Article 50. All documents submitted in accordance with provisions of the Regulations and these Rules shall be in Chinese and the technical terms, which are uniformly stipulated by the state. For foreign person's name, foreign place name, and foreign scientific and technical terms, which do not have uniformed Chinese translation, the original shall be indicated. Where the certificates and certification submitted in accordance with the provisions of the Regulations and these Rules are in foreign languages, The Chinese translation of the said certificates and certification shall be attached with at the same time. Where the Chinese translation is not attached with, the said certificates and certification shall be regarded as having not been submitted.

Article 51. All the documents submitted by the party concerned may be typed, or written with fountain pen or brush pen as well, but the writing shall be neat and clear. The paper shall be used only on one and single side.

Article 52. All the documents and relevant material submitted to the Office of the Protection of New Varieties of Plants by the parties concerned may be sent either by direct delivery or by mail in accordance with the Regulations and these Rules. In case of mail, the postmark date shall be the date of submission. Where the postmark date on the envelop is not clearly discernible, the date of receiving the documents by the Office of the Protection of New Varieties of Plants shall be the date of submission unless the parties concerned can provide the proof. In accordance with the Regulations and these Rules, all the documents and relevant material may be delivered to the parties concerned either by direct delivery, or by mail or by way of publication. Where the parties concerned entrust a representative agency, the documents and relevant material shall be delivered to the said representative agency. Where no representative agency is entrusted, the documents and relevant material shall be delivered to the parties concerned. In case of direct delivery in accordance with the Provision 2 of this Article, the date of submission shall be the date of delivery; in case of mail, the 15th day as from the date of mailing the documents and relevant material shall be regarded as the date of receiving the documents and relevant material by the parties concerned; in case of delivery by way of publication, the documents and relevant material shall be regarded as having been delivered over two months as from the date of the publication.

Article 53. Where the terms prescribed in the Regulations and these Rules are counted by year or by month, the corresponding date of the last month of the terms shall be the date of the expiration of the terms. Where there is no corresponding date of that month, the last date of the said month shall be the date of the expiration of the terms. Where the date of the expiration of the terms happens to be a legal public holiday, the first working day after the holiday shall be the date of the expiration of the terms.

Article 54. Where the party concerned delays the terms prescribed in the Regulations or these Rules due to force majeure or unexpected circumstances and therefore it causes the forfeiture of the rights concerned, he may, within two months from the date of eliminating the obstacles or within two year from the date of the expiration of the terms at the latest, give reasons and provide the related proof to the State Forestry Administration, requesting the latter to restore his rights concerned.

Article 55. The filing date referred to in the Regulations and these Rules shall be the date of the right of priority in case the right of priority is enjoyed.

Chapter Ⅷ
Fees and Bulletins

Article 56. In applying for variety rights, fee for application and fee for examination shall be paid in accordance with the regulations concerned; fee for testing shall also be paid in case the testing is needed. Annual fee shall be paid in case the variety rights have been granted.

Article 57. Where the party concerned pays fees prescribed in Article 56 of these Rules, he may directly pay to the Office of the Protection of New Varieties of Plants or remit through the post office or banks, but not by telegraphic transfer. Where fees are remitted via post office or banks, the filing number or the number of variety rights, the name or denomination of the applicant or varieties rights holder, the denomination of the fee and the denomination of the variety in the respect of which the variety rights have been granted shall be indicated. Where fees are remitted through the post office or banks, the date of remittance shall be the date of payment.

Article 58. In accordance with Article 24 of the Regulations, any applicant may file he application for variety right and pay the fee for the application at the same time, he may pay within one month as from the date of receiving the notice of payment as well. Where the fee is not paid or not paid enough within the time limit, the application shall be regarded as having been withdrawn. In case the testing fee is to be paid in accordance with the regulations concerned, the payment shall be made within one month as from the date of receiving the notice of payment. If the fees are not paid or not paid enough within the time limit, the application shall be regarded as having been renounced.

Article 59. The annual fee for the first year shall be paid at time when the certificate for variety rights is obtained. The annual fees afterwards shall be pre-paid within one month prior to the expiration of the preceding year.

Article 60. Where any variety rights holder fails to pay in time the annual fees after the first year by which the variety rights have been granted, or the paid amount is not enough, the Office of the Protection of New Varieties of Plants shall notify the variety rights holder concerned to pay the overdue fees within six months as from the date of expiration of the due payment of the annual fees and at the same time pay overdue fine, which is 25% of the annual fee.

Article 61. Where any party finds it difficult to pay part of the fees prescribed in Article 56 within 3 years as from the date of implementation of these Rules, the payment may be reduced or delayed through the application of the party concerned and with the approval by the State Forestry Administration.

Article 62. The State Forestry Administration shall regularly publish bulletins of the protection of new plant varieties so as to announce the application, grant, assignment, inheritance, cancellation of variety rights as well as other matters concerned. The Office of the Protection of New Varieties of Plants shall make available the register for variety rights, which registers the application, grant, assignment, inheritance and cancellation of variety rights as well as other matters concerned.

Chapter Ⅸ
Supplementary Provisions

Article 63. Where competent Forestry Departments at county level or above handle any case of administrative penalty prescribed by the Regulations, the provisions of the procedures for administrative penalty concerning forestry are applicable.

Article 64. The act concerning counterfeited variety rights referred to in the Regulations is any of the following cases:
(1) use counterfeited variety rights certificates and variety rights number;
(2) use the certificate of variety rights, variety rights number or other marks of variety rights in respect of which the variety rights have been cancelled or declared null and void;
(3) pass off the variety in respect of which the variety rights are not granted as the variety in respect of which the variety rights are granted;
(4) pass off this variety in respect of which the variety rights are granted as that variety in respect of which the variety rights are granted; or
(5) other act which is serious enough to cause other people to mistake the varieties for the varieties in respect of which the variety rights are not granted for the varieties in respect of which the variety rights have been granted.

Article 65. Where parties concerned have a dispute over the right of filing an application for new plant variety or a dispute over the variety rights and have filed a suit with the People' Court which has then accepted the case, they may present to the State Forestry Administration a report attached with the certification showing that the People's Court has accepted the case. The State Forestry Administration shall take decision on suspension or cancellation.

Article 66. Any staff member who conducts examination and re-examination during the procedures of the preliminary examination, the substantial examination, re-examination and declaration of variety rights null and void shall withdraw of his own accord and the parties concerned or the party having an interest therein may request him to withdraw in any of the following cases:
(1) he is a close relative of the parties concerned or their representative agents;
(2) he has a direct interest in the application of variety rights or a direct interest in the variety rights; or
(3) he has other relations with the parties concerned or their representative agents in respect of which a fair examination and adjudication may be affected. The withdrawal of staff members who conduct examination shall be decided by the Office of the Protection of New Varieties of Plants; the withdrawal of the staff members of the Re-Examination Board shall be decided by the State Forestry Administration; the staff members for examination and re-examination shall not terminate their duty for examination prior to the approval of the application for the withdrawal.

Article 67. With the consent of the Office of the Protection of New Varieties of Plants, any person may consult or duplicate files of application for the variety rights and the register for the variety rights, which have been published. In accordance with the Regulations and these Rules, the material of application for variety rights in respect of which the application has been regarded as being withdrawn, or having been refused or regarded as being renounced, and the material of variety rights which have been renounced, have been declared null and void or have been cancelled shall be destroyed by the Office of the Protection of New Varieties of Plants.

Article 68. For any change of the applicant for variety rights, the Office of the Protection of New Varieties of Plants shall be approached to complete the procedures for the change of the record items and provide the reasons for the change and related proof.

Article 69. These Rules shall be interpreted by the Sate Forestry Administration.

Article 70. These rules shall enter into force as from the date of its promulgation.

6.Regulations on the Protection of Layout-design of Integrated Circuits
(Adopted at the 36th Executive Meeting of the State Council on March 28, 2001, promulgated by Decree No. 300 of the State Council of the People’s Republic of China on April 2001, and effective as of the date of October 1, 2001)

CHAPTER I
GENERAL PROVISIONS

Article 1. These Regulations are formulated in order to protect the exclusive right of layout-design of integrated circuit, encourage innovation of integrated circuits technology and promote development of science and technology.

Article 2. For the purposes of these Regulations,
(1) “integrated circuit” means semiconductor integrated circuit, that is, a product in its intermediate or final form which uses semiconductor as its chip, in and/or on which two or more elements, including at least one active element, and some or all of the interconnections are integrally formed and which is intended to perform a certain electronic function;
(2) “layout-design of integrated circuits”(hereinafter referred to as layout-design), means the three-dimensional disposition of an integrated circuit, consisting of two or more elements, with at least one active element, and some or all of the interconnections, or such a three-dimensional disposition prepared for the manufacture of an integrated circuit;
(3) “right holder of layout-design” means the natural person, the legal person or any other organization that, according to these Regulations, is entitled to the exclusive right of layout-design;
(4) “reproduction” means the act of reproducing a layout-design or of reproducing an integrated circuit incorporating the layout-design;
(5) “commercial exploitation” means the act of importing, selling or providing in any other form, for commercial purposes, a layout-design under protection, an integrated circuit incorporating the layout-design or an article incorporating such an integrated circuit.

Article 3. Any layout-design created by a Chinese natural person, legal person or other organization shall be accorded the exclusive right of layout-design in accordance with these Regulations.
Any layout-design created by a foreigner shall, where it was first commercially exploited in the territory of the People’s Republic of China, be accorded the exclusive right of layout-design in accordance with these Regulations.
Any layout-design created by a foreigner shall be accorded the exclusive right of layout-design in accordance with these Regulations, if the country to which the foreigner belongs has concluded agreement with China to protect layout-design or the country to which the foreigner belongs and China are both parties to an international treaty concerning the protection of layout-design.

Article 4. Any layout-design under protection shall be original, which means that the layout-design is the intellectual achievement of the creator himself, and it is not a commonplace among creators of layout-designs and manufacturers of integrated circuit at the time of its creation.
Where a layout-design under protection consists of several commonplace layout-designs, the combination of these layout-designs taken as a whole shall be in compliance with the conditions referred to in the preceding paragraph.

Article 5. Protection to layout-design under these Regulations shall not extend to the ideas, processing methods, operations and mathematics concepts.

Article 6. The intellectual property administration department of the State Council is responsible for the relevant administrative work concerning layout-design exclusive right in accordance with these Regulations.

CHAPTER II
EXCLUSIVE RIGHT OF LAYOUT-DESIGN

Article 7. The right holder of layout-design shall enjoy the following exclusive right:
(1) reproducing the layout-design under protection in its entirety or for any creative part thereof;
(2) commercially exploiting a layout-design under protection, an integrated circuit in which the layout-design is incorporated, or an article incorporating such an integrated circuit.

Article 8. The exclusive right of layout-designs takes effect with its registration with the intellectual property administration department of the State Council.
Any unregistered layout-design shall not be protected under these Regulations.

Article 9. The exclusive right of layout-design shall belong to its creator, except where otherwise provided in these Regulations.
Where a layout-design is created according to the will and under the charge of a legal person or other organization, which shall also bear responsibility therefrom, such legal person or other organization shall be the creator.
Where a layout-design is created by a natural person, the natural person shall be the creator.

Article 10. Where a layout-design is created by the cooperating efforts of two or more natural persons, legal person or other organizations, the ownership of the exclusive right shall be agreed upon by the co-operators; in absence of such agreement or explicit agreement, the exclusive right shall be owned jointly by the co-operators.

Article 11. Where a layout-design is created in execution of a commission, the ownership of the exclusive right shall be agreed upon between the commissioning and the commissioned parties; in absence of such agreement or explicit agreement, the exclusive right shall be owned by the commissioned party.

Article 12. The protection term of the exclusive right of layout-designs shall be 10 years, counting from the date of filing the application for registration or from the date on which it was first commercially exploited anywhere in the world, whichever expires earlier. However, no matter whether it has been registered or commercially exploited, a layout-design shall no longer be protected under these Regulations at the expiration of 15 years from the date of the completion of its creation.

Article 13. Where the exclusive right of layout-design belongs to a natural person, the exclusive right shall, after the death of the natural person and within the term of protection as provided for in these Regulations, be transferred in accordance with the provisions of the Succession Law.
Where the exclusive right of a layout-design belongs to a legal person or other organization, the exclusive right shall, after the change or the termination of the legal person or other organization and within the term of protection as provided for in these Regulations, be owned by the legal person or other organization which succeeds to its rights and obligations; where there is no such legal person or other organization to succeed to its rights and obligations, the layout-design shall enter into the public ownership.

CHAPTER III
REGISTRATION OF LAYOUT-DESIGN

Article 14. The intellectual property administration department of the State Council is responsible for registration of layout-design and receives the application for registrations of layout-design.

Article 15. Where a layout-design for which registration is applied for relates to the security or other vital interests of the State and is required to be kept secret, the application shall be handled in accordance with the relevant provisions of the State.

Article 16. Where the registration for layout-design is applied for, the following shall be submitted:
(1) the application form for registration of the layout-design;
(2) the copy or drawing of the layout-design;
(3) where the layout-design has been put into commercial exploitation, the sample of the integrated circuit incorporating the layout-design;
(4) other materials required by the intellectual property administration department of the State Council.

Article 17. For any layout-design, if no application for registration has been filed with the intellectual property administration department of the State Council within two years from the date on which it was first commercially exploited anywhere in the world, it shall no longer be registered by the intellectual property administration department of the State Council.

Article 18. Where it is found after preliminary examination that there is no cause for rejection of the application for registration of layout-design, the intellectual property administration department of the State Council shall register it, issue the registration certificate and announce it.

Article 19. Where any applicant for registration of layout-design is not satisfied with the decision of the intellectual property administration department of the State Council rejecting the application, it or he may, within three months from the date of receipt of the notification, request the intellectual property administration department of the State Council to make a reexamination. The intellectual property administration department of the State Council shall, after reexamination, make a decision and notify the applicant for registration of layout-design. Where the applicant for registration of layout-design is still not satisfied with the decision of reexamination of the intellectual property administration department of the State Council, it or he may, within three months from the date of receipt of the notification, institute legal proceedings in the people’s court.

Article 20. Where after the registration of a layout-design, the intellectual property administration department of the State Council finds that the registration does not comply with the provisions of these Regulations, it shall revoke the registration, notify the applicant and announce it. Where the right holder of the layout-design is not satisfied with the decision of the intellectual property administration department of the State Council revoking the registration of layout-design, it or he may, within three months from receipt of the notification, institute legal proceedings in the people’s court.

Article 21. Until the announcement of the registration of layout-design, staff members of the intellectual property administration department of the State Council have the duty to keep its contents secret.

CHAPTER IV
EXPLOITATION OF THE EXCLUSIVE RIGHT OF LAYOUT-DESIGN

Article 22. The right holder of layout-design may assign its or his exclusive right or license other persons to use its or his layout-design.
Where the exclusive right of layout-design is assigned, the parties shall conclude a written contract and register it with the intellectual property administration department of the State Council. The intellectual property administration department of the State Council shall announce the registration. The assignment shall take effect as of the date of registration.
Where a layout-design is to be licensed for others to use, the parties shall conclude a written contract.

Article 23. A layout-design may be used without authorization of the right holder of the layout-design and without any payment of remuneration under any of the following circumstances,
(1) reproducing the layout-design under protection for private purposes or for the sole purpose of evaluation, analysis, research or teaching;
(2)creating a layout-design with originality on the basis of the evaluation or analysis of the layout-design under protection referred to in the preceding paragraph;
(3)reproducing or commercially exploiting a layout-design made independently by oneself that is identical with a layout-design of another person.

Article 24. For any layout-design under protection, integrated circuit incorporating the layout-design, or article incorporating such integrated circuits, so long as they have been put on the market by the right holder of the layout-design, or with its or his consent, anyone may exploit them for commercial purposes without the authorization of, nor payment of remuneration to, the right holder of layout-design.

Article 25. In cases of national emergency, or in any extraordinary state of affairs, or for the purposes of public interests, or where it is determined according to Law by the people’s court or the unfair competition supervision department that there is unfair competition on the part of the right-holder of layout-design and there is a need to give remedy, the intellectual property administration department of the State Council may grant a non-voluntary license to exploit the layout-design to remedy the unfair competition practice.

Article 26. Any decision made by the intellectual property administration department of the State Council granting a non-voluntary license to exploit a layout-design shall be notified promptly to the right holder of the layout-design.
In the decision granting a non-voluntary license to exploit a layout-design, the scope and duration of the exploitation shall be specified on the basis of the reasons justifying the granting. The scope shall be limited to non-commercial use for public purposes or to the remedy required as determined according to Law by the people’s court or unfair competition supervision department for the unfair competition practice of the right holder of layout-design.
Where the circumstances which lead to such non-voluntary license cease to exist and are unlikely to recur, the intellectual property administration department of the State Council shall, after reviewing upon the request of the right holder of layout-design, make decision to terminate the non-voluntary license.

Article 27. Any natural person, legal person or other organization that is granted non-voluntary license to exploit a layout-design shall not have an exclusive right to exploit it and shall not have the right to authorize exploitation by any other person.

Article 28. Any natural person, legal person or other organization that is granted non-voluntary license shall pay to the right holder of layout-design a reasonable exploitation fee, the amount of which shall be fixed by both parties through consultation; where the parties fail to reach an agreement, the intellectual property administration department of the State Council shall adjudicate.

Article 29. Where the right holder of layout-design is not satisfied with the decision of the intellectual property administration department of the State Council granting a non-voluntary license to exploit the layout-design, or where the right holder of layout-design, the natural person, legal person or other organization that is granted non-voluntary license is not satisfied with the ruling made by the intellectual property administration department of the State Council regarding the fee payable for exploitation, it or he may, within three months from the date of receipt of notification, institute legal proceedings in the people’s court.

CHAPTER V
LEGAL LIABILITY

Article 30. Except where otherwise prescribed in these Regulations, without the authorization of the right holder of layout-design, any of the following infringing acts shall be stopped immediately, and the infringer shall be liable to compensation for the damage:
(1) reproducing the whole or any original part of a layout-design under protection;
(2) importing, selling or providing in any other form, for commercial purposes, any layout-design under protection, integrated circuit incorporating the layout-design or article incorporating such an integrated circuit.
The amount of compensation for the damage caused by the infringement of the exclusive right of layout-design shall be assessed on the basis of the profits which the infringer has earned through the infringement or the losses which the right holder of layout-design has suffered including the reasonable expenses of the infringed party for stopping the infringement.

Article 31. Where a dispute arises as a result of the exploitation of a layout-design without the authorization of the right holder of the layout-design, that is, the infringement of the exclusive right of layout-design, it shall be settled through consultation by the parties. Where the parties are not willing to or fails to settle the dispute through consultation, the right holder of the layout-design or any interested party may institute legal proceedings in the people’s court, or request the intellectual property administration department of the State Council to handle the matter. When the intellectual property administration department of the State Council handling the matter considers that the infringement is established, it may order the infringer to stop the infringing act immediately, and confiscate or destroy the infringing products or articles. If the infringer is not satisfied with the disposal, he may, within 15 days from the date of receipt of the disposal notification, institute legal proceedings in the people’s court in accordance with the Administration Procedure Law of the People’s Republic of China, if, within the said time limit, the infringer fails to institute legal proceedings and refuses to stop the infringing act, the intellectual property administration department of the State Council may apply to the people’s court for compulsory execution. The intellectual property administration department of the State Council may, upon the request of the parties, mediate on the amount of compensation for the damage caused by the infringement of the exclusive right of layout-design; if the mediation fails, the parties may institute legal proceedings in the people’s court in accordance with the Civil Procedure Law of the People’s Republic of China.

Article 32. Where any right holder of layout-design or interested party has evidence to prove that another person is infringing or will soon infringe its or his exclusive right and that if such infringing act is not prevented from occurring in time, it is likely to cause irreparable harm to its or his legitimate rights, it or he may, before any instituting legal proceedings, request the people’s court to adopt measures for ordering the suspension of relevant acts and the preservation of property.

Article 33. Where anyone commercially exploits integrated circuits incorporating an protected layout-design or articles incorporating such integrated circuits without knowing or without reasonable grounds to be expected to know at the time when it or he obtains these integrated circuits or the articles that they are incorporated with illegally- reproduced layout-designs, it or he shall not be deemed as infringing the exclusive right of layout-design.
After being notified that the integrated circuit or article is incorporated with illegally-reproduced layout-design, the person referred to in the preceding paragraph may, subject to payment of reasonable compensation to the right holder of the layout-design, continue to commercially exploit the goods in stock or the goods ordered by him before the notification.

Article 34. Where any staff member of the intellectual property administration department of the State Council, in his work of layout-design registration and administration, neglects his duty, abuses his power or commit illegalities for personal gains or by fraudulent means shall be investigated for criminal liability in accordance with law if a crime is constituted, if the case is not serious enough to constitute a crime, he shall be given disciplinary sanction in accordance with law.

CHAPTER VI
SUPPLEMENTARY PROVISIONS

Article 35. Any application for registration of a layout-design and any other formalities shall be subject to payment of fees as prescribed. The standard of the fees shall be fixed by the price administration department of the State Council and the intellectual property administration department of the State Council, and shall be announced by the intellectual property administration department of the State Council.

Article 36. These Regulations shall enter into force as of October 1, 2001.

7.Implementing Regulations of the Regulations for the Protection of Layout-design of Integrated Circuits

　
Chapter I
General Provisions

Rule 1
Aims
With a view to protecting the exclusive right of layout-design of integrated circuits (hereinafter referred to as the layout-design), and promoting the progress and innovation of integrated circuit technology in China, these Implementing Regulations (hereinafter referred to as the Implementing Regulations) are hereby formulated as follows in accordance with the Regulations for the Protection of Layout-design of Integrated Circuits (hereinafter referred to as the Regulations).

Rule 2
Registry
The Patent Administrative Department under the State Council mentioned in the Regulations refers to the State Intellectual Property Office.

Rule 3
Required Mode for Going through the Formal Procedures
All the documents provided for under the Regulations and the Implementing Regulations shall be prepared and handled in written form or in any other form otherwise provided for by the State Intellectual Property Office.

Rule 4
Agency
Where any Chinese entity or person applies for registration of, and handles any matter relating thereto, its or his layout-design in China, it or he may appoint an agency for these purposes.
Where any foreigner, foreign enterprise or other foreign organisation that does not have a habitual residence or business establish-ment in China applies for registration of its or his layout-design and handles any matter relating thereto, it or he shall appoint an agency designated by the State Intellectual Property Office to handle the matter.

Rule 5
Application Document and Determination of Date of filing
Where any entity or person applies for the registration of its or his layout-design with the State Intellectual Property Office, shall submit the application form for layout-design registration and a copy or drawing of the layout-design; and an integrated circuit specimen incorporating the layout-design shall also be submitted if the layout-design has been put into commercial exploitation.
The date on which the State Intellectual Property Office receives said layout-design application document in the foregoing paragraph is the date of filing. If the application document is sent by mail, the date of the postmark it bears is the date of filing.

Rule 6
Language of Documents
All the documents submitted according to the Regulations and the Implementing Regulations shall be in Chinese. Where there are prescribed uniform standard technical terms in China, these standard terms shall be used; where foreign personal names, place names and technical terms have no uniform Chinese translation, their original language shall be indicated.
Where the various certificates and certification documents submitted according to the Regulations and the Implementing Regulations, the State Intellectual Property Office may, when finding it necessary, require the interested party to furnish the Chinese translation thereof within the fixed time limit; failure to do so after the expiration of the time limit is deemed not to have submitted the certificates and certification documents.

Rule 7
Delivery and Service of Documents
As for any documents sent to the State Intellectual Property Office by mail, the date of the postmark shall be the date of delivery. Where the date of postmark is not clearly shown, the date on which the State Intellectual Property Office receives the documents is the date of delivery, except that the interested party can prove otherwise.
The documents from the State Intellectual Property Office may be sent to an interested party by mail, by direct delivery, or by any other means. Where an interested party appoints a patent agency, the documents are sent to his or its agency; Where no patent agency is appointed, the documents are sent to the person indicated in the application form to be contacted.
The various documents posted by the State Intellectual Property Office are deemed to have reached the interested party on or after 15th day from the date of sending them by mail.
As for the documents that shall be directly delivered according to the provisions by the State Intellectual Property Office, the date of delivery shall be the date of service.
Where a document the addressee of which is not clearly indicated cannot be sent by mail, it may be sent to the interested party through public notice. The document shall be deemed to have been serred on and after the last day of the month from the date of public notice.

Rule 8
Computation of Time limit
The first day of all the time limits fixed according to the Regulations and the Implementing Regulations is excluded therefrom. Where a time limit is counted in year or month, the correspounding date of the last month is the date of expiration of the time limit; where there is no such date, the last day of the month shall be the date of expiration of the time limit; where the date of expiration of the time limit is a statutory holiday, the first working day after the holiday shall be the date of expiration of the time limit.

Rule 9
Restoration of Rights and Extension of Time Limit
Where any interested party loses its or his right for failure to meet the time limit prescribed in the Implementing Regulations or fixed by the State Intellectual Property Office due to irresistable causes, it or he may, within 2 months starting from the date of elimination of the barrier or within 2 years, at the latest, from the date of the expiration of the time limit, explain the reason to, and submit the relevant proofs to the State Intellectual Property Office and request to restore its or his right.
Where any interested party loses its or his right for failure to meet the time limit prescribed in the Implementing Regulations or fixed by the State Intellectual Property Office with justification, it or he may, within 2 months starting from the date of receipt of the notification of the State Intellectual Property Office, explain the reason to the State Intellectual Property Office, and request it to restore its or his right.
Where any interested party requests for extension of a time limit fixed by the State Intellectual Property Office, it or he shall, before the expiration of the time limit, explain the reason to, and go through the relevant procedures at the State Intellectual Property Office.
The time limit prescribed in these Implementing Regulations shall not be extendable by request.

Rule 10
Joint Ownership
Where a layout-design is jointly invented by two or more entities or persons, the inventors shall jointly apply for the registration thereof; where a contract or an agreement is concluded, the contract or agreement shall be complied with.
Where a jointly owned layout-design is revolved, each of the holders of the right of the layout-design shall, without the authorisation of the other holder(s) of the right of the layout-design, not assign and pledge its or his part of the right or enter into any monopoliged or exclusive licensing contract with another person relating thereto.

Rule 11
Assignment of Exclusive Right to Foreigner
Where any Chinese entity or person assigns the exclusive right of a layout-design, it or he shall submit document indicating that the relevant competent department under the State Council approves the assignment when registering the assignment with the State Intellectual Property Office.
Where the exclusive right of a layout-design is transferred, the interested party shall, by furnishing the relevent certification or legal document, go through the procedure for any bibliographic alteration with the State Intellectual Property Office.

Chaptere Ⅱ
Application for Registration of Layout-design and Examination Thereof.

Rule 12
Application Documents
Where an application for registration of layout-design is filed in writing, the layout-design application form in duplicate and a copy or drawing of the layout-design shall be submitted to the State Intellectual Property Office.
Where an application for registration of layout-design is filed in any other form provided for by the State Intellectual Property Office, the applicant shall comply with the provision.
Where the applicant appoints a patent agency to file the application for registration of layout-design with the State Intellectual Property Office and go through other formalities, it or he shall simultaneously submit the power of attorney with express scope of the power entrusted.
Where there are two or more applicants and no patent agency is appointed, the first applicant indicated in the application form shall be their representative, except that it is otherwise stated therein.

Rule 13
Application Form
Following information shall be indicated in the application form for registration of the layout-design:
(1) Name, or title, address or place of residence of the applicant;
(2) Nationality of the applicant;
(3) Title of the layout-design;
(4) Name or title of the inventor of the layout-design;
(5) Date on which the invention of the layout-design is completed;
(6) Category of the integrated circuits in which the layout-design is incorporated;
(7) Where the applicant appoints a patent agency, it or he shall indicate the relevant matters; where it or he does not appoints a patent agency, it or he shall indicate the name, address, postal code and telephone number of the person to be contacted;
(8) Date on which an act of commercial exploitation takes place, where the layout-design has been put int commercial explotation referred to in Rule 17 of the Regulations;
(9) Where the application for registration of the layout-design contains confidential information, the copy or drawing of the layer of drawings图层 or the page number and the total number of such pages of the drawings containing the confidential information;
(10) Signature or seal of the applicant or its or his patent agency;
(11) A checklist of the items contained in the application document;
(12) Supplementary documents and a checklist of the specimens; and
(13) Any other matters required to be indicated.

Rule 14
Copy or Drawing
The copy or drawing of the layout-design submitted according to Rule 16 of the Implementing Regulations shall meet the following requirements:
(1) The paper size of the copy or drawing shall, at least, be 20 or more times the size of the integrated circuits made by incorporating the layout-design; the applicant may, at the same time, furnish the electronic version of the copy or drawing; where the electronic version of the copy or drawing is submitted, it shall contain all the information of the layout-design, with indication of the data format of the document;
(2) Where the copy or drawing contains several pages, they shall be arranged in serial number, and a list of the contents attached;
(3) The page of copy or drawing shall be of the A4 size; if it is larger than the A4 paper size, it shall be folded in the A4 size; and
(4) Brief explanations may be attached to the copy or drawing to indicate the structure, technology, function of the layout-design of the integrated circuits or any other matters that should be explained.

Rule 15
Application Relating to Confidential Information
Where a layout-design is not put into commercial exploitation before the filing date, the application for registration thereof may contain confidential information, and the proportion comprising such information shall not, at most, exceed 50% of the total area of the layout-design of the integrated circuits. The copy or drawing of the layer of drawings图层 or the page number and the total number of such pages of the drawings containing the confidential information shall be the same as what are indicated in the application form for registration of the layout-design.
Where an application for registration of the layout-design contains confidential information, the copy or drawing of the layer of drawings图层 containing the confidential information shall be submitted in a separate bag for holding confidential files. Unless it is made necessary by a judicial or administrative infringement proceeding, no one is allowed to consult or copy the confidential information.

Rule 16
Specimens of Integrated Circuits
Where a layout-design is put into commercial exploitation before the filing date, four specimens of the integrated circuits incorporating the layout-design shall be submitted when filing an application for registration, and they shall meet the requirements as follows:
(1) The submitted 4 specimens of the integrated circuits shall be put in special containers capable of keeping them from any damage, and a filled form uniformly prepared by the State Intellectual Property Office be submitted together therewith;
(2) On the surface of the containers shall be indicated the name of the applicant, the number of application and the title of the integrated circuits; and
(3) The specimens of the integrated circuits put in the containers shall be appropriately fixed, free from any damage and can be kept for at least ten years in a moisture-free container干燥器.

Rule 17
Non-acceptance
Where the following circumstances arise in respect of an application for registration of a layout-design, the State Intellectual Property Office does not accept it and notifies the applicant of the non-acceptance:
(1) Where the application form for layout-design registration and a copy or drawing of the layout-design is not submitted, where a specimen of the integrated circuit is not submitted but it has been put into commercial exploitation, or where the submission is not consistent with the preceding items;
(2) The foreign applicant comes from a country which has not concluded an agreement on the protection of the layout-design with China or which has not acceded, with China, to an international treaty on the protection of the layout-design;
(3) The related layout-design is not protectable under Rule 12 of the Regulations;
(4) The related layout-design is not registerable under Rule 17 of the Regulations;
(5) The application document is not in Chinese;
(6) The application is not clear in category, or it is difficult to determine that it is a layout-design;
(7) No agency is appointed according to stipulation; or
(8) The application form for layout-design registration is not properly filled in.

Rule 18
Supplement and Amendment of Documents
Besides the circumstances for which applications are not acceptable under Rule 17 of the Implementing Regulations, where an application document does not meet the requirements set forth in the Regulations and the Implementing Regulations, the applicant shall make rectification within two months from the date of receipt of the office action of the State Intellectual Property Office. The rectification shall be made according to the office action. Where no response is made after the expiration of the time limit, the application shall be deemed to have been withdrawn.
Where the application document still does not meet the requirement of the Regulations and the Implementing Regulations after the applicant makes the rectification according to the office action of the State Intellectual Property Office, the State Intellectual Property Office shall decide to reject it.
The State Intellectual Property Office may, on its own initiative, correct obvious lexical and graphical errors in a layout-design application document. Where it makes correction of the kind, the State Intellectual Property Office shall notify the applicant thereof.

Rule 19
Rejection of Application
Except that it is otherwise provided for in Rule 18, paragraph two, of the Implementing Regulations, one of the following circumstances arises concerning the layout-design in respect of which an application is filed for registration, the State Intellectual Property Office shall make a decision on the rejection and state the grounds on which the decision is made:
(1) It is obviously not in conformity with the provision of Article 2 (1) and (2) of the Regulations; or
(2) It is obviously not in conformity with the provision of Article 5 the Regulations.

Rule 20
Taking Effect of Exclusive Right of Layout-design
Where no ground for rejection is found in the preliminary examination of an application for registration of a layout-design, the State Intellectual Property Office shall issue the Certificate of Registration of Layout-design, and announce it on the website of the State Intellectual Property Office, or in the China Intellectual Property Gazette. The exclusive right of the layout-design takes effect on the filing date.

Rule 21
Certificate of Registration of Layout-design
The Certificate of Registration of Layout-design issued by the State Intellectual Property Office shall comprise the following:
(1) Name or title and address of the holder of the right of the layout-design;
(2) Title of the layout-design;
(3) Time when the layout-design was put into commercial exploitation for the first time, where it was put into commercial exploitation before the filing date;
(4) Date of filing the application for registration of the layout-design and date of completion of the invention of the layout-design;
(5) Date of issuance of the Certificate of Registration of Layout-design;
(6) Number of registration of the layout-design: and
(7) Seal of the State Intellectual Property Office and the signation of the head thereof.

Rule 21
Correction
The State Intellectual Property Office shall promptly correct any errors in the Layout-design Gazette once found, and publish the correction.

Chapter Ⅲ
Reexamination and Reconsideration of Applications for Registration of Layout-design and Revocation of Exclusive Right.

Rule 23
Reexamination and Revocation Organisation
The Patent Reexamination Board of the State Intellectual Property Office (hereinafter referred to as the Patent Reexamination Board) is responsible for the examination of the reexamination requests filed out of dissatisfaction with the decision made by the State Intellectual Property Office on the rejection of its or his layout-design and for the examination of the cases of revocation of the exclusive rights of layout-design.

Rule 24
Request for Reexamination
Where one requests the Patent Reexamination Board for reexamination, it or he shall file a request for reexamination, state the reason, and furnish relevant proofs if necessary. Where the reexamination request does not comply with the relevant provision of Article 19 of the Regulations, the Patent Reexamination Board shall not accept it.
Where a reexamination request is not in the prescribed format, the person making request for the reexamination shall make rectification within the time limit fixed by the Patent Reexamination Board; where the rectification is not made after the expiration of the time limit, the request for the reexamination shall be deemed not to have been filed.

Rule 25
Amendment of Documents during Reexamination Proceeding
The person making request for the reexamination may amend the layout-design application documents when it or he files a reexamination request or responds to the notice of reexamination by the Patent Reexamination Board; but the amendment shall be limited to the elimination of defects pointed out in the rejection decision, or in the notice of reexamination.
The amended application document shall be submitted in duplicate.

Rule 26
Reexamination Decision
Where the Patent Reexamination Board holds, upon its examination, that the request for reexamination of a layout-design registration application does not comply with the Regulations or the Implementing Regulations, it shall notify the person making request for the reexamination, requesting it or him to make its or his observation within the fixed time limit. Where no response is made after the expiration of the time limit, the have request for the reexamination shall be deemed to hvae been withdrawn; where the Patent Reexamination Board considers that the application still does not comply with the Regulations or the Implementing Regulations, after making the observations or amendment, it shall make its reexamination decision to uphold the rejection decision.
Where the Patent Reexamination Board holds, upon its examination, that the decision on rejection does not comply with the Regulations or the Implementing Regulations, or that the amended application document has eliminated the defects pointed out in the decision on rejection, it shall revoke the initial rejection decision and notify the original examination department to register the application and announce the registration.
In the reexamination decision, the Patent Reexamination Board shall indicate the grounds on which the reexamination decision is based, and notify the layout-design registration applicant.

Rule 27
Withdrawal of Reexamination Request
The person making the request for reexamination may withdraw its or his request for reexamination before the Patent Reexamination Board makes its decision.
Where the person making the request for reexamination withdraws its or his request for reexamination before the Patent Reexamination Board makes its decision, the reexamination proceeding terminates.

Rule 28
Reconsideration Request
Where any interested party is not satisfied or in dispute with one of the following administrative actions made by the State Intellectual Property Office, it or he may file an application for reconsideration with the administrative reconderation department of the State Intellectual Property Office:
(1) Not accepting the layout-design application;
(2) Deeming a layout-design application to have been withdrawn;
(3) Not allowing the request for restoration of relevant rights; or
(4) Any other specific administrative action that infringes the lawful rights and interests of an interested party.

Rule 29
Revocation Proceeding
Where the exclusive right of the layout-design is found not in conformity with the provisions of Articles 2 (1) or (2), 3, 4, 5, 12 or 17 of the Regulations after the publication of the registration of the layout-design, the Patent Reexamination Board shall revoke the exclusive right of the layout-design.
Where the exclusive right of the layout-design is revoked, the Patent Reexamination Board shall first notify the holder of the right of the layout-design, requesting it or him to make observations within the fixed time limit. its or his Failure to do so after the expiration of the time limit does not affect the decision by the Patent Reexamination Board to revoke the exclusive right of the layout-design.
The Patent Reexamination Board shall indicate, in the decision to revoke the exclusive right of the layout-design, the grounds the decision is based on, and notify the holder of the right of the layout-design.

Rule 30
Publication of Revocation Decision
Where no proceedings are instituted in the People's Court within the prescribed time limit in respect of the decision by the Patent Reexamination Board to revoke the exclusive right of the layout-design, or after the ruling of the People's Court to uphold the decision by the Patent Reexamination Board to revoke the exclusive right of the layout-design takes effect, the State Intellectual Property Office shall publish the decision on revocation of the exclusive right of the layout-design on its website or in the China Intellectual Property Gazette.
The revoked exclusive right of the layout-design shall be deemed to have never existed.

Chapter Ⅳ
Protection of Exclusive Right of Layout-design

Rule 31
Abandonment of Exclusive Right of Layout-design
Any holder of the right of a layout-design may, before the expiration of the term of protection of its or his exclusive right of layout-design, file a statement with the State Intellectual Property Office to abandon the exclusive right.
Where the exclusive right of the layout-design is licensed for another person to exploit or is pledged, the abandonment thereof shall be done with the consent of the licensee or the pledgee.
The abandonment of the exclusive right of the layout-design shall be registered with and published by the State Intellectual Property Office.

Rule 32
Requirements for the State Intellectual Property Office to Accept Cases of Disputes over Infringement
Where a request is filed according to the provision of Article 31 of the Regulations for the State Intellectual Property Office to handle a dispute arising from infringement of the exclusive right of a layout-design, the request shall meet the following requirements:
(1) The layout-design has been registered and the registration thereof published;
(2) The person making the request is the holder of right of the layout-design or the entity or person directly interested in the infringement dispute;
(3) The respondent is clearly identified;
(4) The matter and specific fact and reason of the request are clear; and
(5) Neither party has instituted legal proceedings in the People's Court as to the infringement dispute.

Rule 33
Suspension and Resumption of Relevant Proceedings
Where an interested party who runs into a dispute over the right to apply for registration of a layout-design or over the ownership of the exclusive right of the layout-design has instituted legal proceedings in the People's Court, it or he may request the State Intellectual Property Office to suspend the relevant proceeding.
Where any party requesting for suspension of the relevant proceeding according to the preceding provision, it or he shall file a request with the State Intellectual Property Office and submit a copy of the relevant document showing the People's Court's acceptance of the case.
After the ruling of the People's Court takes effect, the interested party shall go through the procedure for resuming the relevant proceeding at the State Intellectual Property Office. Where a case of dispute over the right to apply for registration of a layout-design or over the ownership of the exclusive right of the layout-design is not closed within one year from the date of filing the request and it is necessary to continue to suspend the relevant proceeding, the person making the request shall request for extension of the suspension within the time limit. Where no such request is made for the extension after the expiration of the time limit, the State Intellectual Property Office acts on its own to resume the relevant proceeding.
Where the People's Court rules, in its hearing of a civil case, to take preservation measures with regard to the exclusive right of a layout-design, the State Intellectual Property Office, when assisting the execution, suspends the procedure relating to the preserved exclusive right of the layout-design. Where, upon expiration of the term of the preservation, the People's Court does not rule to go on with the preservation measures, the State Intellectual Property Office acts on its own to resume the relevant proceeding. .

Chapter ⅤFees

Rule 34
Required Fees
Where an application is filed with the State Intellectual Property Office for registration of the layout-design, or to go through any other procedure, fees as follows shall be paid:
(1) Layout-design registration fee;
(2) Fees for bibliographic alteration, for a request for extension of a time limit and for a request for restoration of a right;
(3) Fee for a request for reexamination; and
(4) Fees for a request for grant of non-voluntary license and for a request for ruling on the royalties of the non-voluntary license.
The amount of the foregoing fees is to be fixed by the Price Administrative Department of the State Council in conjunction with the State Intellectual Property Office.

Rule 35
Formalities for Paying Fees
The fees required in the Regulations and the Implementing Regulations may be paid directly to the State Intellectual Property Office, or by postal or bank remittance, or in any other manner provided for by the State Intellectual Property Office.
Where the fees are paid by postal or bank remittance, on the money order to the State Intellectual Property Office shall be indicated, at least, the correct application number and the title of the fee paid. Non-compliance with this provision shall be deemed not to have gone through the formalities for paying the fees.
Where a fee is directly paid to the State Intellectual Property Office, the day on which the fee is paid is the date of payment; where the fee is paid by postal remittance, the day of postmark is the the date of payment; where the fee is paid by bank remittance, the day on which the actual bank remittance is the date of payment. Where there are more than 15 days from the date of remittance to the date on which the State Intellectual Property Office receives it, however, the day on which the State Intellectual Property Office receives the fee is the date of payment except that the post office or bank proves otherwise.
Where the layout-design registration fee is overpaid, repaid or erroneously paid, the interested party may request the State Intellectual Property Office to return the payment, but the request shall be made within one year from date of payment.

Rule 36
Time Limit for Paying Fees
An applicant shall pay the layout-design registration fee within 2 months after the receipt of the acceptance notification; where the fee is not paid or not paid in full after the expiration of the time limit, the application shall be deemed to have been withdrawn.
Where an interested party requests for restoration of its or his right or for reexamination, it or he shall pay the fee within the relevant time limit prescribed in the Regulations and the Implementing Regulations; where the fee is not paid or not paid in full after the expiration of the time limit, the request shall be deemed not to have been made.
The fees for bibliographic alteration, and the fees for a request for grant of non-voluntary license and for a request for ruling on the royalties of the non-voluntary license shall be paid within 1 month from the date of filing the request; the fee for a request for extension of a time limit shall be paid before the relevant time limit expires; where the fee is not paid or not paid in full after the expiration of the time limit, the request shall be deemed not to have been made.

Chapter Ⅵ
Supplementary Provisions

Rule 37
Layout-design Register
The State Intellectual Property Office establishes the layout-design register in order to keep the following on record:
(1) Name or title, nationality and address of the holders of right of the layout-design and any change thereof;
(2) Registration of the layout-design;
(3) Transfer and inheritance of the exclusive right of the layout-design;
(4) Abandonment of the exclusive right of the layout-design;
(5) Hypothecation, preservation and recessination of the exclusive right of the layout-design;
(6) Revocation of the exclusive right of the layout-design;
(7) Termination of the exclusive right of the layout-design;
(8) Restoration of the exclusive right of the layout-design; and
(9) Non-voluntary license for exploitation of the exclusive right of the layout-design.

Rule 38
Publication of Layout-design
The State Intellectual Property Office shall publish, on a regular basis, layout-design registration on its website and the China Intellectual Property Gazette to make known the following contents:
(1) Bibliographic alterations in the Layout-design Register;
(2) Notice to the interested parties the addresses of which are not clearly available;
(3) Corrections made by the State Intellectual Property Office; and
(4) Any other relevant matters.

Rule 39
Consultation and Reproduction by the Public
After the publication of the registration of the layout-design, the public may request to consult the Layout-design Register, or request the State Intellectual Property Office for a reproduction thereof. The public may also request to consult the copy or drawings in paper form of the layout-design.
As for said electronic version of the copy or drawing in Rule 14 of these Implementing Regulations, no one is allowed to consult or reproduce, unless it is necessary in judicial or administrative proceedings involving infringement.

Rule 40
Treatment of Invalid Files
Where a layout-design application is withdrawn, deemed to have been withdrawn or rejected, and where a layout-design exclusive right is announced to have been abandoned, revoked or terminated, the relevant files of the layout-design application or exclusive right shall not be kept after the expiration of three years from the date on which the application or exclusive right becomes invalid.

Rule 41
Postal Delivery of Documents
Any document of the relevant application or layout-design exclusive right to the State Intellectual Property Office shall be posted as registered mail, and each mail shall only contain the same application document. It shall be made sure that the posted copy or drawings in electronic form and any specimen of the integrated circuits are free from damage thereto in the course of the postal delivery.

Rule 42
Interpretation of the Implementing Regulations
The State Intellectual Property Office is responsible for the interpretation of the Implementing Regulations.

Rule 43
Date of Entry into Force of the Implementing Regulations

8.The Implementing Regulations shall enter into force on 1 October 2001.
China Internet Domain Name Regulations
(in 2002)

Chapter I
General Provisions

Article 1. China Internet Domain Name Regulations (hereafter the Regulations) are formulated in accordance with the relevant provisions of the state and with reference to the international rules for the administration of Internet domain names, with a view to promoting the development of the Internet in China, safeguarding the secure and reliable operation of China Internet Domain Names System and regulating the administration of China Internet domain names System.

Article 2. The Regulations shall be observed in the registration of domain names and in the activities with relation thereto within the territory of the People's Republic of China.

Article 3. The definitions of the following terms mentioned in the Regulations are as follows:
(1) Domain name refers to the character identification of hierarchical structure that identifies and locates a computer on the Internet and corresponds to the IP address of this computer.
(2) Chinese domain name refers to the domain name that contains Chinese characters.
(3) Domain name root server refers to the server that bear the function of root nodes in the domain name system.
(4) Institution for operating domain name root server refers to the institution that is responsible for operating, maintaining and administering the domain name root servers.
(5) Top-level domain (TLD) refers to the name of the first level domain under the root node in the domain name system.
(6) Registry refers to the administration institution that is responsible for operating, maintaining and managing one or more top-level domain names and administering the registration of domain names under this top-level domain name.
(7) Registrar refers to the service institution that accepts and audits the application for the domain name registration, and completes the registration process in the domain name database.

Article 4. Any organization or individual shall not take any action to hamper the normal operation of Internet Domain Names System in China.

Chapter II
Administration of Domain Names

Article 5. The Ministry of Information Industry is responsible for the administration of the Internet domain names in China, Its major functions and responsibility are as follows:
(1) Formulating the regulations and policies concerning the administration of the Internet domain names;
(2) Establishing the system for Country （or Regional）Code Top Level Domain (ccTLD) under .CN and Chinese domain names;
(3) Administering the registry of .CN ccTLD and the Chinese domain names;
(4) Administering the operational institution of domain name root servers, which sets up and operates the domain names root servers within the territory of the People' Republic of China;
(5) Supervising and administering the service of domain name registration;
(6) Be in charge of the international coordination regarding to domain names.

Article 6. China Internet domain names system shall be promulgated by the Ministry of Information Industry in form of proclamation. The Ministry of Information Industry may adjust the Internet domain name system partially and re-promulgate it according to the actual development of domain names.

Article 7. Chinese domain name is an integral part of the Domain Names System of China. The Ministry of Information Industry shall encourage and support the technical research, gradual spreading and application of Chinese Domain Names.

Article 8. The administration of domain names shall be conducted level-by-level. The domain name registry and holders of each level domain names shall be responsible for the administration of registration of lower level domain names and the related service according to the requirements of the Regulations and other relevant provisions.

Article 9. The domain name registry is responsible for operating and administering the corresponding domain name system, maintaining the domain name database and authorizing the registrars to provide the domain name registration services. Its main functions and responsibility include:
(1) Operating, maintaining and administering the corresponding top-level domain name servers and database and ensure the secure and reliable operation of the domain name system;
(2) Formulating the rules concerning the domain name registration in accordance with the Regulations;
(3) Selecting domain name registrars based on the principle of non-discrimination; and　inciple of non-discrimination; and　
(4) Supervising and administering the registration service provided by domain name registrars.

Article 10. The establishment of domain names root servers, domain name registrars and domain names root server operation institutions within the territory of the People's Republic of China shall be authorized by the Ministry of Information Industry.　institutions within the territory of the People's Republic of China shall be authorized by the Ministry of Information Industry.

Chapter III
Administration of Registrars

Article 11. The establishment of the domain name registry within the territory of the People's Republic of China shall be put on record with the Ministry of Information Industry.
Any organization or individual shall not engage in the service of the domain name registration without being recorded.

Article 12. Any organization that engages in the service of the domain name registration shall meet the following conditions:
(1) It shall be an a legal person established according to the laws;
(2) It shall have sufficient funds and appropriate professionals to provide domain name registration services;
(3) It shall have the reputation and ability of providing services in the long-term;
(4) It shall have the services development plan and the related technical resolutions;
(5) It shall have perfect measures for safeguarding the security of the networks and information;
(6) It shall meet other requirements prescribed by the Ministry of Information Industry.

Article 13. Any organization that engages in the service of domain name registration shall go through the recording procedure with the Ministry of Information Industry. When going through the procedures, it shall submit the following documents:
(1) The legal person certificate;
(2) The categories of domain names that are proposed to be registered;　istry of Information Industry. When going through the procedures, it shall submit the following documents:
a. The legal person certificate;
b. The categories of domain names that are proposed to be registered;　
c. The cooperation agreement signed th the relevant domain name registry;
d. The model clauses of the user service agreement ;
e. The service development plan and the related technical resolutions ;
f. The verification of the measures for safeguarding the security of networks and information.

Article 14. If such registration information as the name, address or legal representative of the domain name registrar changes or the cooperative relationship between the registrar and the registry changes or terminates, domain name registrar shall record such situation with the Ministry of Information Industry within 30 days after the change or termination.

Chapter IV
Domain Name Registration

Article 15. The domain name registry shall formulate in accordance with the Regulations the detailed implementation rules for the domain name administration and registration that shall come into force after being reported to the Ministry of Information Industry for record.

Article 16. The domain name registration adopts the principle of first come, first serve.

Article 17. When expanding the range of the domain name registration, the domain name registry may specify the duration of pre-registration, make necessary reservations for certain words and provide corresponding search service on its website.
Except for the articles provided in preceding paragraphs, the domain name registry and registrars shall not reserve domain names or do so in disguised form. During the process of domain name registration, the registry and registrars shall not represent any actual or potential domain name holder.

Article 18. The domain name registry and registrars shall publish the contents, durations and fees of domain name registration, provide public search service for the domain name registration information and ensure the quality of the domain name registration service.

Article 19. Any of the following contents shall not be included in any domain name registered and used by any organization or individual:
(1)Those that are against the basic principles prescribed in the Constitution;
(2)Those jeopardize national security, leak state secrets, intend to overturn the government, or disrupt of state integrity;
(3)Those harm national honor and national interests;　ion;
(4)Those jeopardize national security, leak state secrets, intend to overturn the government, or disrupt of state integrity;
(5)Those harm national honor and national interests;　
(6)Those instigate hostility or discrimination between different nionalities, or disrupt the national solidarity;
(7)Those violate the state religion policies or propagate cult and feudal superstition;
(8)Those spread rumors, disturb public order or disrupt social stability;
(9)Those spread pornography, obscenity, gambling, violence, homicide, terror or instigate crimes;
(10)Those insult, libel against others and infringe other people's legal rights and interests; or
(11)Other contents prohibited in laws, rules and administrative regulations.

Article 20. The applicant for the registration of a domain name shall comply with the laws, rules and administrative regulations of the state concerning the Internet, and the relevant provisions concerning domain name registration formulated by the registry and submit the authentic, accurate and complete information of domain name registration.

Article 21. The operation and administration fee for registered domain names shall be paid on schedule by the registrant. The domain name registry shall formulate the specific measures for the fee collection and submit to the Ministry of Information Industry for approval.

Article 22. The applicant of the domain name registration becomes the holder of the registered domain name immediately after the registration of the domain name.　The applicant of the domain name registration becomes the holder of the registered domain name immediately after the registration of the domain name.　
The liabity for the infringement of others' legal rights and interests arising from holding or using a domain name shall be borne by the holder of the domain name.

Article 23. If the registration information of a domain name changes, the holder of the domain name shall file the registration of such change with the domain name registrar within 30 days after such change.　

Article 24. The holder of a domain name may select or change the domain name registrar. If the holder of a domain name changes the domain name registrar, the original registrar shall bear the obligation of transferring the registration information of the domain name holder.　trar, the original registrar shall bear the obligation of transferring the registration information of the domain name holder.

Article 25. If a registered domain name involves any of the following conditions, the original registrar shall write it off and notify the holder of the domain name in written form:
(1) If the domain name holder or its agent/reseller applies for the cancellation of the domain name;　the domain name;　
(2) If the information on the registration of the domain name submitted by the domain name holder is unauthentic, inaccurate or incomplete;
(3) If the domain name holder fails to pay the corresponding fees in accordance with the provions;　ons;　
(4) If the domain name shall be written off in accordance with the judgment by the people's court, arbitration institution or the domain name dispute resolution institution; or　
(5) If the domain name is in violation of the provisions of these pvisions and the relevant laws and regulations.

Chapter V
Domain Name Disputes

Article 26. The domain name registry may designate a neutral institution for resolving domain name disputes .

Article 27. If any person complains to the domain name dispute resolution institution concerning a registered domain name or a domain name in use, which conforms to the requirements specified in the domain name dispute resolution policy, the domain name holder shall participate in the proceedings for the resolution of the dispute on the domain name.

Article 28. The decisions of the domain name dispute resolution institution shall only determine whether to change the information of the holder of the domain name in dispute.
If the decision of the domain name dispute resolution institution is in conflict with the legally effective judgment of the people's court or the arbitration organization, the legally effective judgment of the people's court or the arbitration organization prevails.

Article 29. If a domain name dispute is being processed by the people's court, the arbitration organization or the domain name dispute resolution institution, the domain name holder shall not transfer the domain name in dispute, unless the transferee of the domain name agrees in writing to be subject to the judgment by the people's court, the arbitration institution or the domain name dispute resolution institution.

Chapter VI
Penalty Provisions

Article 30. Any person who violates the provisions of Article 4, Article 10, Article 11 and Article 14 of the Regulations, hampers the normal operation of the Internet domain names Systems in China, sets up the domain names root server without authorization, sets up the operational institution for the operation of domain name root servers without authorization or engages in the service of the domain name registration without authorization and record or provides the domain name registration service beyond the items on the record shall be ordered by the Ministry of Information Industry to make corrections within the specified period , and shall, depending on the circumstances, be warned or imposed a fine of not more than RMB30,000 yuan.

Article 31. Any person who violates the provisions of Article 17, Article 18 of the Regulations shall be ordered by the Ministry of Information Industry to make corrections within the specified period , and shall, depending to the circumstances, be warned or imposed a fine of not more than RMB30, 000 Yuan.

Article 32. Any person who violates the provisions of Article 19, and whose act constitute a crime, he or she shall be prosecuted for his or her criminal activities according to the laws; If the act has not constituted a crime, he or she shall be penalized by the relevant institutions of the state in accordance with the provisions of the relevant laws, rules and administrative regulations.

Chapter VII Supplementary Provisions

Article 33. The domain name registrars which begin the registration service of Internet domain names prior to the entry into force of the Regulations shall go through the record procedures in accordance with the provisions of the Regulations within 60 days from the date of the entry into force of the Regulations.

Article 34. The Regulations shall go into force as of Sep.30, 2002. Should there be any discrepancies in the meanings between the current and former version of the Regulations, the current version shall prevail.

9.The Drug Administration Law of the People 's Republic of China
(Approved at the 7th meeting of the Standing Committee of the 5th National People 's Congress on September 20, 1984 and amended at the 20th meeting of the Standing Committee of the 9th National People 's Congress on February 28, 2001.)

Chapter Ⅰ
General Principles

Article 1. This Drug Administration Law of the People 's Republic of China [hereinafter "Law"] is promulgated in order to strengthen administration of drugs, ensure the quality and safe and efficacious use of drugs, and protect the health and the legitimate rights and interests of people in using drugs.

Article 2. The Law shall be observed by all units or individuals engaged in drug research, manufacturing, operation, use or administration of drugs within the territory of the People 's Republic of China.

Article 3. The national government shall develop both modern drugs and traditional Chinese medicines and give them full play in disease prevention, medical treatment and healthcare.
The national government shall protect wild medicinal resources and encourage the cultivation of Chinese medicinal materials.

Article 4. The national government shall encourage the research and development of new drugs, and protect the legitimate rights and interests of citizens, legal persons and other organizations in researching and developing new drugs.

Article 5. The drug administration department of the State Council (hereinafter interpreted as "SDA") shall be in charge of national drug administration affairs. Other relevant departments of the State Council shall be responsible for the drug administration affairs within their authority.
The drug administration department of the people 's government of each province, autonomous region, or municipal city is responsible for the drug administration affairs within its authority. Other relevant departments of the people 's government of each province, autonomous region, or municipal city are also responsible for the relevant drug administration affairs within their respective authority.
SDA shall cooperate with other departments under the State Council responsible for overall economic affairs to implement national development plans and policies for the pharmaceutical industry.

Article 6. Drug administration department shall establish or designate drug inspection organizations to undertake drug inspection work requested for drug evaluation and approval and drug quality control according to relevant regulations and laws.

Chapter Ⅱ
Administration of Drug Manufacturing Enterprises

Article 7. To establish a drug manufacturing enterprise, a drug manufacturer shall obtain the approval from and the License for Drug Manufacturing Enterprise issued by the drug administration department of the people 's government of the province, autonomous region or municipal city where the manufacturing enterprise is located. The drug manufacturer shall register with the administration department for industry and commerce on the basis of the License for Drug Manufacturing Enterprise. Engaging in drug manufacturing activities without the License for Drug Manufacturing Enterprise is prohibited.
The validity period and the business scope shall be clearly noted on a License for Drug Manufacturing Enterprise, which shall be reviewed and renewed upon expiration.
To approve the establishment of a pharmaceutical manufacturing enterprise, the drug administration department shall not only comply with the requirements specified in the Article 8 of this Law, but also comply with relevant national development plans and policies for the pharmaceutical industry so as to avoid redundant construction.

Article 8. To establish a drug manufacturing enterprise, the following requirements shall be met:
(1) The enterprise shall have pharmacological personnel, engineering personnel and other corresponding technicians whose qualifications have been certified according to relevant regulations.
(2) The enterprise shall be equipped with factory buildings, facilities and hygienic environment appropriate for the pharmaceutical production.
(3) The enterprise shall have departments, personnel and necessary equipment for quality management and control of the drugs it manufactures.
(4) The enterprise shall have adopted relevant regulations and rules to ensure the quality of the drug it manufactures.

Article 9. A drug manufacturing enterprise shall observe the Good Manufacturing Practices for Pharmaceutical Products [GMP], promulgated to according to this Law by SDA. The drug administration department shall conduct certification on drug manufacturing enterprises according to the requirements of GMP, and issue a GMP certificate to a qualified drug manufacturing enterprise.
SDA shall be responsible for the promulgation of the working rules and implementation procedures of GMP.

Article 10. Except for the preparation of TCM, a drug shall be produced in compliance with national drug standards and the manufacturing process approved by SDA. Production records shall be complete and accurate. For any change, a drug manufacturer shall apply for approval of a production process that may affect drug quality from the drug administration department which originally approved the manufacturing process.
TCM shall be prepared in compliance with national drug standards, or in the absence of national standards, with relevant standards established by local drug administration departments of the province, autonomous region or municipal city. The standards for TCM preparations set by the local drug administration department of the people 's government of province, autonomous region or municipal city shall be submitted for approval to SDA.

Article 11. Raw materials and excipients used for drug manufacturing shall meet relevant requirements for pharmaceutical use.

Article 12. A drug manufacturing enterprise shall conduct quality inspection on the products it manufactures. A drug that fails to conform with relevant national drug standards, or TCM preparation standards established by local drug administration departments of the people 's government of relevant province, autonomous region or municipal city, shall not be allowed to leave the factory.

Article 13. A drug manufacturing enterprise may undertake toll manufacturing upon the approval of SDA, or with the approval of local drug administration department of the people 's governments of provinces, autonomous regions and municipal cities authorized by SDA.

Chapter Ⅲ
Administration of Drug Operation Enterprises [Wholesalers and Retailers]

Article 14. A drug wholesale enterprise shall obtain approval for business operation and a License for Drug Operation Enterprise from the local drug administration department of the people 's government at the level of province, autonomous region or municipal city. A drug retail enterprise shall obtain approval for business operation and a License of Drug Operation Enterprise from the local drug administration department of the people 's government above county level. The registration with the relevant industry and commerce administration department shall be on the basis of the License of Drug Operation Enterprise. Engaging in a drug operation business without a License of Drug Operation Enterprise is prohibited.
The validity period and the business scope shall be clearly noted on a License for Drug Operation Enterprise, which shall be reviewed and renewed upon expiration. In approving the establishment of drug operation enterprise, drug administration department shall not only comply with the requirements specified in Article 15 of this Law but also observe the principles of reasonable layout [of drug operation enterprises] and convenient access [to drugs] by people.

Article 15. To establish a drug operation enterprise, the following requirements shall be met:
(1) The enterprise shall have pharmacological personnel whose qualifications has been certified according to relevant law.
(2) The enterprise shall have a business site, equipment, storage facilities and hygienic environment appropriate for its drug operation business.
(3) The enterprise shall have quality management departments and personnel commensurate with its drug operation business.
(4) The enterprise shall have adopted relevant regulations and rules to ensure the quality of drugs in its operations.

Article 16. A drug operation enterprise shall observe the Good Sales Practices for Pharmaceutical Products [GSP], which is formulated according to this Law by SDA. The drug administration departments shall certify drug operation enterprises according to the requirements of GSP, and issue GSP certificates to qualified drug manufacturing enterprises.
SDA shall be responsible for the promulgation of the working rules and implementation procedures of GSP.

Article 17. A drug operation enterprise shall establish and implement a check and acceptance system to verify the quality certificates and other labels of drugs before purchase. Drugs that fail to meet relevant requirements shall not be purchased.

Article 18. A drug operation enterprise shall keep true and complete records of the purchase and sale of drugs. The records shall clearly indicate the generic names, dosage forms, specifications, batch numbers, validity periods, manufacturing factory, procurement (selling) units, procurement (selling) quantity, procurement (selling) prices, procurement (selling) dates and other items required by SDA.

Article 19. A drug operation enterprise shall sell drugs in an accurate way, correctly indicating methods and quantity of administration and precautions. A prescription shall be checked before filling. A drug listed on a prescription shall not be arbitrarily changed or substituted. If a prescription contains drugs not compatible or with too high a dosage, the prescription shall not be filled and the drug not sold. If necessary, only after the original prescribing physician corrects or re-signs the prescription, may the drug be prepared and sold.
TCM shall be clearly marked with the place of origin.

Article 20. A drug operation enterprise shall establish and implement rules for drug storage, and adopt necessary measures such as refrigeration, and methods which prevent freezing, humidity, insects, mice, etc. to ensure drug quality. Before being admitted to and delivered from a warehouse, a drug shall be checked according to relevant rules.

Article 21. TCM (herbs) may be traded at country fairs in urban and rural areas, except for those separately regulated by the State Council.
Drugs other than TCM shall not be sold at country fairs in urban and rural area. However, a drug retail enterprise with a License of Drug Operation Enterprise may set up sales branches at country fair in urban and rural area to sell drugs other than TCM herbs according to its approved business scope. The State Council shall be responsible for the promulgation of relevant implementation methods.

Chapter Ⅳ
Administration of Drugs and Preparations in Medical Institutions

Article 22. A medical institution shall have pharmacological professionals whose qualifications have been certified according to relevant laws. Non-pharmacological professionals shall not directly engage in relevant technical work of drugs and preparations.

Article 23. To make preparations, a medical institution shall obtain approval from the health administration department of the region where the medical institution is located, and obtain a License for Medical Institution to Make Preparations issued by the drug administration department of the people 's government at the province, autonomous region or municipal city where the medical institution is located. Making preparations without a License for Medical Institution to Make Preparations is prohibited.
The validity period must be clearly indicated on the License for Medical Institution to Make Preparations. The License for Medical Institution to Make Preparations shall be reviewed and renewed upon expiration.

Article 24. To make preparations, a medical institution shall be equipped with necessary facilities, administration regulations, testing instruments and hygiene environment to ensure the quality of preparations.

Article 25. The preparation prepared by a medical institution shall be of the kind not available in the market, but clinically needed by the medical institution. The preparation shall not be prepared until it is approved by the drug administration department of the people 's government of the province, autonomous region or municipal city where the medical institution is located. The preparation shall pass quality inspection according to relevant regulations and shall only be used within the institution according to a doctor 's prescription. Under special circumstances, a preparation prepared by a medical institution may be used by other designated medical institutions with the approval of SDA or of the people 's government at the level of province, autonomous region or municipal city.
Preparations prepared by medical institutions are prohibited from being sold in the market.

Article 26. A medical institution shall establish and implement a check and acceptance system to check quality certificate documents and other labels of the drugs before purchasing. It is forbidden to purchase or prescribe the drugs that are not in compliance with relevant requirements.

Article 27. Pharmacists in a medical institution shall check a prescription before filling it. Drugs listed on the prescription shall not be arbitrarily changed or substituted. If a prescription contains drugs not compatible or with too high a dosage, the prescription shall not be filled and the drug not sold. If the drug is necessary, only after the original prescribing physician corrects or re-signs the prescription, may the drug be prepared and sold.

Article 28. A medical institution shall establish and implement a drug storage system, and adopt necessary measures such as refrigeration, and methods which prevent freezing, humidity, insects, mice, etc. so as to ensure drug quality.

Chapter Ⅴ
Drug Administration

Article 29. For new drug research and development, true data and samples regarding the method of research and development, quality parameters, results of pharmacological and toxicological experiment, etc. shall be submitted according to relevant regulations promulgated by SDA. SDA and health administration departments of the State Council (hereinafter interpreted as "MOH") shall be responsible for the promulgation of relevant regulations regarding the qualification certification drug clinical trials organizations.
SDA shall issue new drug certificates to the new drugs that have completed clinical studies and obtained approval.

Article 30. Non-clinical drug safety evaluation organizations and clinical research organizations shall respectively observe the Good Practices of Non-clinical Research of Drugs [GLP] and the Good Practice of Clinical Research of Drugs [GCP]. The Good Practices of Non-clinical Research of Drugs and the Good Practice of Clinical Research of Drugs shall be promulgated by the departments designated by the State Council.

Article 31. The manufacture of a new drug or a drug which is subject to national standards shall be approved and obtain an approval number from SDA. However, this requirement does not apply to the manufacture of TCM herbs and preparations that are not subject to approval numbers. The list of TCM herbs and preparations which shall have approval numbers shall be promulgated jointly by SDA and the TCM administration bureau of the State Council.
A drug manufacturing enterprise shall not begin manufacture until it has obtained a drug approval number.

Article 32. A drug shall comply with relevant national drug standards. TCM preparations shall comply with the requirements specified in Article 10, Provision 2 of this Law.
The Pharmacopoeia of the People 's Republic of China and the drug standards promulgated by SDA shall be the national drug standards.
SDA shall organize the pharmacopoeia committee to assume the promulgation and amendments to the national drug standards.
The drug inspection organization of SDA shall be responsible for setting the standard product and comparison product.

Article 33. SDA shall organize pharmacological, medical and other relevant technical professionals to conduct evaluation of the review and assessment of new drugs, as well as re-assessment on drugs which have been approved for production.

Article 34. Drug manufacturing enterprises, drug operation enterprises and medical institutions shall purchase drugs from licensed drug manufacturing or operation enterprises. However, this is not applicable to the purchase of TCM herbs which are not regulated by means of approval numbers.

Article 35. The national government shall implement a special administration over narcotics, psychiatric drugs, toxic and radioactive drugs. The State Council shall promulgate rules.

Article 36. The national government shall implement a system to protect traditional Chinese medicines. The State Council shall promulgate rules.

Article 37. The national government shall implement an administration system for prescription and OTC drugs. The State Council shall promulgate rules.

Article 38. Drugs with uncertain medical effects, serious adverse drug reactions, or drugs hazardous to human health due to other reasons shall not be imported.

Article 39. SDA shall organize the evaluation and issuance of the registration certificates for import drugs. An import drug shall not be imported until it is confirmed according to the evaluation to be safe, efficacious and in compliance with the national drug standards and have obtained the registration certificate for import drug.
A small quantity of import drugs that are urgently needed for clinical use or just for individual self-use shall be imported according to relevant government regulations and procedures.

Article 40. Drugs shall be imported through designated ports. Enterprises which import drugs shall file the import certificate with the drug administration department in the area where the port is located. Customs shall release an import drug against the Notice to Customs for Import Drug, which is issued by the drug administration department. Customs shall not release drugs without the Notice to Customs for Imported Drug.
The drug administration departments of the area where the port for import drugs is located shall notify relevant drug inspection organizations to conduct inspection of import drugs on a random basis according to relevant regulations promulgated by SDA. The inspection fees shall be set according to the Article 41, Provision 2 of this Law.
SDA shall coordinate with the General Customs Bureau to recommend ports designated for import drugs, which shall be submitted to the State Council for approval.

Article 41. SDA shall designate drug inspection organizations to conduct the inspection on the following drugs before sale or importation, drugs that fail to pass the inspection shall not be sold or imported:
(1) biological products stipulated by SDA;
(2) drugs sold in China for the first time; and,
(3) other drugs designated by the State Council.
The inspection items and fee standards for the drugs listed above shall be jointly approved and published by public notice by the financial department and the price department of the State Council. Collection methods for the inspection fee shall be promulgated by the financial department of State Council together with SDA.

Article 42. SDA shall conduct inspections on drugs which are approved for manufacture or import. For drugs with uncertain medical effects or serious adverse reaction and drugs that may harm the human health due to other reasons, the drug administration department shall withdraw its [manufacturing] approval numbers or registration certificate for imported drug.
It is forbidden to manufacture, import, sell or use any drug whose approval number or import registration certificate is canceled; if such drugs have been manufactured or imported, they shall be destroyed or handled under the supervision of the local drug administration department.

Article 43. The national government shall implement a drug reserve system. Departments authorized by the State Council may allocate a supply of drugs from enterprises in case of the occurrence of serious disaster, epidemic disease or other sudden incidents.

Article 44. The State Council has the right to restrict or prohibit the export of drugs which are in short domestic supply.

Article 45. An Import Permit or Export Permit issued by SDA is required to import or export narcotic drugs or psychiatric drugs under government control.

Article 46. SDA shall evaluate and approve the newly discovered or introduced medicinal herbs from abroad before the herbs may be sold.

Article 47. SDA together with the TCM administration department of the State Council shall promulgate the administration methods of local commonly used folk medicinal materials.

Article 48. The manufacture or sale of counterfeit drugs (including such compounds) is prohibited.
A drug is regarded as counterfeit if it meets one of the following conditions:
(1) ingredients contained in the drug do not conform to the national drug standards;
(2) the use of a non-drug product as if it is a drug or, the use of one type of drug as if it is another kind of drug.
A drug will be regarded as a counterfeit drug if it meets one of the following conditions:
(1) the drug is banned by the administration department of the State Council;
(2) the drug is manufactured or imported without relevant approval according to this Law; or the drug is sold without being inspected as required by this Law;
(3) the drug is already deteriorated;
(4) the drug is already contaminated;
(5) the drug is made from active ingredients to which relevant government departments have not granted approval numbers as required by this Law;
(6) the drug is labeled with indications or major treatment functions which exceed the scope approved by relevant government departments.

Article 49. It is forbidden to manufacture or sell inferior drugs. A drug whose ingredients fail to conform to the requirement of the national drug standards is regarded as an inferior drug.
A drug with one of the following conditions shall be regarded as an inferior drug:
(1) the validity period of the drug is not labeled or has been altered;
(2) the production batch number of the drug is not labeled or has been altered;
(3) the drug has expired;
(4) the packing materials or container that have direct contact with the drug have not been approved;
(5) coloring agents, preservatives, spices, tasting agents or excipients are added without approval;
(6) the drug fails to comply with the drug standards.

Article 50. The drug names listed in the national drug standard are the generic drug names. The use of generic drug names as trademarks is prohibited.

Article 51. The employee of a drug manufacturing enterprise, drug operation enterprise or a medical institution who has direct contact with drugs shall undergo a health examination every year. An employee suffering from infectious diseases or other diseases which may contaminate drugs shall not engage in work that has direct contact with drugs.

Chapter Ⅵ
Administration of Drug Packaging

Article 52. Packaging materials and containers in direct contact with drugs shall meet requirements for medical use and conform to the standards to ensure the human health and safety, and shall be evaluated and approved together with drugs by relevant drug administration department.
A drug manufacturing enterprise shall not use unapproved packaging materials or containers that have direct contact with drugs.
Relevant drug administration departments shall order a stop to the use of unqualified packaging materials and containers that have direct contact drugs.

Article 53. Drug packaging shall meet relevant requirement to ensure drug quality and shall be convenient for storage, transportation and medical use.
TCM herbs shall be packaged for transportation. Each package shall be marked with the product name, place of origin, date, name of delivery and the symbol of quality certification.

Article 54. Labels shall be printed or pasted on the drug packaging, and the insert sheet shall be included in the drug packaging.
The labels or the insert sheet of a drug shall indicate the generic name, ingredients, specifications, manufacturing enterprise, approval number, product batch number, validity period, indications or major treatment functions, method of administration, dosage, contraindications, adverse drug impacts and precautions, etc.
Labels of narcotic drugs, psychiatric drugs, toxic drugs, radioactive drugs, external application drugs and OTC drugs shall have relevant required logos.

ChapterⅦ
Administration of Drug Pricing and Advertising

Article 55. Relevant government departments responsible to set prices and price guideline principles shall comply with the Price Law of People 's Republic of China in setting or adjusting prices reasonably according to the ability of society to pay, and social average cost, market condition, in order that drug prices match quality, arbitrarily high prices are controlled, and the legitimate interests of drug consumers are protected.
Drug manufacturing enterprises, drug operation enterprises and medical institutions shall comply with the prices [or price guideline principles] set by government, and shall not arbitrarily raise drug prices.
A drug manufacturing enterprise shall honestly submit relevant material regarding its manufacturing and other business costs to relevant price administration departments. The failure to report, make a false report, or concealing information is prohibited.

Article 56. For a drug subject to free market pricing according to relevant laws, a drug manufacturing enterprise, drug operation enterprise and medical institution shall set the price for the drugs according to the following principles of "fairness, reasonableness, honesty, price based on quality", and provide drug consumers with reasonably priced drugs.
Drug manufacturing enterprises, drug operation enterprises and medical institutions shall observe relevant drug administration regulations promulgated by the relevant departments of the State Council responsible for price affairs to set and clearly mark drug retail prices. The making of exorbitant profits and conducting fraud in the pricing of drugs to damage the interest of drug consumers is prohibited.

Article 57. Drug manufacturing enterprises, operation enterprises and medical institutions shall provide relevant price administration departments with actual drug transaction prices and volumes, etc.

Article 58. A medical institution shall provide patients with a price list of drugs used. A designated medical institution for medical insurance shall publicize the prices of drugs in common use according to relevant regulations and strengthen the administration of reasonable drug use. MOH shall formulate relevant regulations.

Article 59. Drug manufacturing enterprises, operation enterprises and medical institutions are prohibited from providing and accepting kick-backs or other material benefits not included in accounting records during the process of drug transactions.
The providing of material benefits and other benefits to the responsible persons of medical institutions, drug purchasers, doctors or other relevant persons working in a medical institution by drug manufacturing enterprises, operation enterprises or their agents is prohibited. The acceptance of material benefits and other benefits responsible persons, drug purchasers, doctors or other relevant persons working in a medical institution offered by drug manufacturing enterprises, other enterprises or their agents is prohibited.

Article 60. The drug administration department of the people 's government of the province, autonomous region or municipal city where the enterprise is located shall approve and issue an approval number for a drug advertisement. The publishing of a drug advertisement without the approval number is prohibited.
Prescription drugs may be introduced on professional medical and pharmacological journals co-designated by MOH and SDA, but shall not be promoted by publishing advertisement via mass media nor by conducting any other form of promotional activities targeted at the public.

Article 61. The contents of a drug advertisement shall be truthful and legitimate, conform to the insert sheet of the drug as approved by SDA, and shall not include any false contents.
A drug advertisement shall not contain any non-scientific assertion or guarantee regarding the efficacy of drugs, shall not use the reputation or images of any government department, pharmaceutical research unit, academic research institutions or any individual such as an expert, scholar, doctor or patient as evidence.
A non-drug advertisement shall not involve promotion of any drugs.

Article 62. Drug administration departments of people 's government of provinces, autonomous regions and municipal cities shall inspect the drug advertisements they have approved, and shall inform relevant advertisement administration department of any violation of the Advertisement Law of the People 's Republic of China and make proposals regarding the handling of any violation. Relevant advertisement administration departments shall handle the violation according to law.

Article 63. The Price Law of the People 's Republic of China and Advertisement Law of the People 's Republic of China shall be applicable to any drug price and advertisement issues that are not covered by this Law.

Chapter Ⅷ
Supervision of Drugs

Article 64. Drug administration departments are authorized to supervise and inspect relevant activities of drug research and development, manufacturing, distribution, and drug use by medical institutions which are subject to its approval according to relevant laws and regulations. The concerned units and individuals shall not refuse to provide and shall not conceal any information.
A drug administration department shall present relevant certificates in conducting inspections, and shall maintain the confidentiality of any technology and business secrets learned during inspection.

Article 65. A drug administration department may conduct random quality inspection on drugs according to relevant requirements of administration. Samples taken during random inspections shall be according to relevant regulation, and a fee shall not be charged for such samples. Costs accrued during inspection shall be recorded and allocated according to relevant regulation of the State Council.
A drug administration department may adopt mandatory administrative measures to seal and retain drugs and other relevant drug materials which evidence possible harms human health. The drug administration department shall make relevant administrative decisions within seven days. Should the drug be tested, the administration decision shall be made with fifteen days from the delivery of the test report.

Article 66. SDA and drug administrative departments of provinces, autonomous regions and municipal cities shall periodically announce the results of random inspection through public notice. Any inappropriate announcement shall be clarified within the scope of the original public notice.

Article 67. Should a party object to a test result delivered by a drug testing institution, it may apply for a re-test with the original drug inspection organization or with the designated drug inspection organization at a higher level within seven days upon the receipt of the test report. The party may also directly apply for a re-test to the drug inspection organization designated by SDA. The drug inspection organization accepting the application must obtain the re-test result within the time specified by SDA.

Article 68. A drug administration department shall conduct follow-up inspections according to GMP and GSP on drug manufacturing and operation enterprises that have received quality certificate from it.

Article 69. Local people 's government and drug supervision and administration departments are forbidden to adopt any methods, such as requiring drug testing or application for approval etc., to restrict or exclude drugs manufactured according to this Law by non-local enterprises from entering into the local market.

Article 70. Drug administration departments and their drug inspection organizations and their other designated specialized drug inspection departments shall not participate in the drug manufacturing and operation activities, or recommend drugs or supervise drug manufacturing or operations.
Employees of drug administration departments and their drug inspection organizations and their other designated specialized drug inspection departments shall not participate in drug manufacturing and operation activities.

Article 71. The national government shall implement a monitoring system of adverse drug reactions. Drug manufacturing enterprises, operation enterprises and medical institutions shall frequently inspect the quality, efficacy and medical effects of the drugs. Any serious adverse reactions shall be duly reported to the local drug administration department and the health administration department of the people 's government of the province, autonomous region or municipal city. Relevant regulations shall be promulgated by SDA together with MOH.
For a drug that is confirmed to have serious drug reactions, SDA or the drug administration departments of the provinces, autonomous regions and municipal cities may adopt emergency measures to stop the manufacture, sale and use of the drug, and organize relevant experts to evaluate within five days. The administrative decision shall be according to relevant laws, and made within fifteen days from the delivery of evaluators ' determination.

Article 72. Drug inspection departments and employees of drug manufacturing enterprises, drug operation enterprises and medical institutions shall accept professional guidance from the drug inspection organizations of local drug administration departments.

Chapter Ⅸ
Legal Responsibilities

Article 73. In accordance with relevant laws, any drug manufacturing or drug transaction activities conducted without the License for Drug Manufacturing Enterprise, License for Drug Operation Enterprise or License for Medical Institution to Make Preparations shall cease, drugs illegally manufactured and the income derived from them shall be confiscated, and a fine imposed between 2 to 5 times the value of the illegally manufactured or sold drugs (including unsold).. Violations of criminal law shall be prosecuted.

Article 74. For a counterfeit drug, illegal income from its manufacture or sale shall be confiscated, a fine imposed between 2 to 5 times the value of the illegally manufactured or sold drugs, the drug approval document cancelled, and an order issued ceasing manufacturing and selling activities until the situation is remedied. In a serious case, the License for Drug Manufacturing Enterprise, License for Drug Operation Enterprise or Medical institution Medicament Compounding shall be canceled. Violations of criminal law shall be prosecuted.

Article 75. For an inferior drug manufactured illegally, the income derived shall be confiscated, a fine shall be imposed between 1 to 3 times the value of the inferior drug manufactured or sold. In a serious case, an order shall be issued to cease manufacturing and selling activities until the situation is remedied, or cancel the drug approval document, and the License for Drug Manufacturing Enterprise, License for Drug Operation Enterprise or License for Medical Institution to Make Preparations. Violations of criminal law shall be prosecuted.

Article 76. In serious cases, persons directly in charge or otherwise directly responsible in enterprises or units engaged in the manufacture or sale of counterfeit drugs or inferior drugs shall be prohibited from engaging in drug manufacturing and operation activities for 10 years.
Raw materials, excipient, packaging materials or manufacturing facilities specifically used in the manufacture of counterfeit and inferior drugs shall be confiscated.

Article 77. Illegal revenues derived from providing transportation, custody, or storage to drugs one knows or should know are counterfeit or inferior shall be confiscated, and a fine imposed in the amount of between 50% to 3 times of the illegal income. Violations of criminal law shall be prosecuted.

Article 78. Any notice containing sanctions for counterfeit or inferior drugs shall include the quality testing results of the drug testing institution. However, this is not applicable to situations described in Article 48, Provision 3, Items (1), (2), (5), and (6) and Article 49, Provision 3 of this Law.
Article 79. Drug manufacturing enterprises, drug operation enterprises, drug non-clinical safety evaluation and research institutions, and drug clinical trial institutions which fail to implement GMP, GSP, GLP, and GCP, shall be warned and instructed to remedy the violations within a certain time. Those which refuse or fail to remedy the violations within the required time shall be ordered to stop drug manufacture or operations until the violation is remedied, and shall be fined between 5,000 to 20,000 RMB. In a serious case, the License for Drug Manufacturing Enterprise, License for Drug Operation Enterprise or the certification for qualifying as a clinical test institution of drugs shall be canceled.

Article 80. Drug manufacturing enterprises, drug operation enterprises or medical institutions which, in violation of Article 34 of this Law, purchase drugs from units without License for Drug Manufacturing Enterprise, License for Drug Operation Enterprise, shall be ordered to remedy the situation, the illegally purchased drugs shall be confiscated, and a fine imposed between 2 to 5 times the value of purchase. Illegally derived income shall be confiscated. In a serious case, the License for Drug Manufacturing Enterprise, License for Drug Operation Enterprise or the Business License of Medical Institution shall be canceled.

Article 81. Any unit which, in importing a drug with an Import Permit, fails to register with drug supervision and administration departments at the location of the port of entry in accordance with requirements of this Law, shall be given a warning and ordered to remedy the violation within a certain time. For those which refuse or fail to remedy the violation within the required time, the Import Permit shall be canceled.

Article 82. Illegal income obtained from forging, modifying, trading, leasing or lending licenses or other approval documents of drugs shall be confiscated, a fine shall be imposed between 1 to 3 times of the illegal income. In there is no illegal income, a fine between 20,000 to 100,000 RMB shall be imposed. In a serious case, the License for Drug Manufacturing Enterprise, License for Drug Operation Enterprise, or License for Medical Institution to Make Preparations held by the selling, leasing, or lending party shall be canceled, or drug approval documents canceled. Violations of criminal law shall be prosecuted

Article 83. A License for Drug Manufacturing Enterprise, License for Drug Operation Enterprise, or License for Medical Institution to Make Preparations or other drug approval documents obtained in violation of this Law, by submitting false certificates or documents or, by other fraudulent measures, shall be canceled. Another application shall not be accepted within 5 years. A fine between 10,000 to 30,000 RMB shall be imposed.

Article 84. Medical institutions shall be ordered to remedy violation of selling their own preparation in the market. The illegally sold preparations shall be confiscated. A fine shall be imposed 1 to 3 times the value of the preparation. If there is illegally derived income, it shall be confiscated.

Article 85. Drug operation enterprises which violate Article 18 and Article 19 in this Law shall be ordered to remedy the situation, and be warned. In a serious case, the License for Drug Operation Enterprises shall be canceled.

Article 86. Drugs with labels that do not comply with Article 54 of this Law shall be treated as counterfeit or inferior drugs. In addition, the drug manufacturing and operation enterprises shall be ordered to remedy the situation. In a serious case, the approval documents of the drug shall be canceled.

Article 87. For the issuance of a false test report which constitutes a crime, a drug testing institute shall be criminally prosecuted. For a non-criminal violation, the drug testing institutions shall be warned and ordered to remedy the situation. A fine between 30,000 and 50,000 RMB shall be imposed. Persons directly in charge and other directly responsible persons shall be demoted, released from positions and fined less than 30,000 RMB. Illegal income shall be confiscated. In a serious case, the certification of qualification for drug testing shall be canceled. If the drug testing institution provides a false testing report which results in loss, then the unit shall be corresponding liable.

Article 88. A drug administration departments above the county level shall decide which administrative sanctions listed in Articles 73 to 87 in this Law shall be imposed within its respective authority delegated by SDA. Decisions to cancel the License for Drug Manufacturing Enterprise, License for Drug Operation Enterprise, License for Medical Institution to Make Preparations or the Business License of Medical Institution or drug approval documents shall be made by the original issuing and approval departments.

Article 89. Violation of the regulations of drug price administration as specified in Articles 55, 56 and 57 in this Law, shall be handled according to the relevant regulations promulgated under the Price Law of the People 's Republic of China.

Article 90. Drug manufacturing enterprises, drug operation enterprises and medical institutions that covertly provide or accept kick-backs or other material benefits in drug procurement and selling activities; drug manufacturing enterprises, drug operation enterprises or their agents that provide persons in charge, drug purchasing personnel, doctors or other related personnel working in medical institutions which use their drugs with material property or other benefits shall be fined between 10,000 to 200,000 RMB by the industrial and commercial administration departments. Illegally derived incomes shall be confiscated. If the case is serious, the industrial and commercial administration department shall cancel the business license of the drug manufacturing enterprises and drug operation enterprises, and inform the drug administration department which shall cancel its License for Drug Manufacturing Enterprise, or License for Drug Operation Enterprise. Violations of criminal law shall be prosecuted.

Article 91. Responsible persons, purchasing personnel and other relevant personnel in the drug manufacturing and operation enterprises who accept material properties or benefits offered by other manufacturing and operation enterprises or their agents shall be punished in accordance with relevant laws. Illegal derived income shall be confiscated. Violation of criminal law shall be prosecuted.
Responsible persons, drug purchasing personnel, doctors or other relevant personnel working in medical institutions who accept material properties or benefits provided by drug manufacturing enterprises, drug operation enterprises or their agents shall be disciplined through measures adopted by the health administration department or the local units and illegally derived income shall be confiscated. In a serious case involving a certified doctor, the doctor 's certification shall be canceled by the health administration department.

Article 92. Any unit or individual violating the regulations of drug advertising administration shall be punished according to the Advertisement Law of the People 's Republic of China, and the drug administration department which issued the advertisement approval number shall cancel the approval number and shall refuse the advertisement approval application for the drug. Violations of criminal law shall be prosecuted.
If drug administration departments do not perform their duties to check drug advertisements and an approved advertisement has fraudulent or illegal contents, then the persons directly in charge or others directly responsible shall be administratively disciplined. Violations of criminal law shall be prosecuted.

Article 93. If a drug manufacturing enterprise, drug operation enterprise or medical institution violates this Law in causing harm to a drug user, the drug manufacturing enterprise, drug operation enterprise and medical institution shall be liable for compensation.

Article 94. When the drug administration departments violate this Law, in the following circumstances, the superior level department or the supervision agency shall issue orders to revoke any certificates, or approval documents for drugs issued in violation of law. The person in charge or other persons directly responsible shall be administratively disciplined. Violations of criminal law shall be prosecuted.
(1) Issuance of certification to the enterprises that don 't comply with the GMP, GSP or failure to perform the duties of checking enterprises that have been given certificates in accordance with relevant regulation or failure to order enterprises not complying with the certification conditions to correct errors or cancel the certification;
(2) Issuance of License for Drug Manufacturing Enterprise, License for Drug Operation Enterprise or License for Medical Institution to Make Preparations to units which do not meet legal requirements;
(3) Issuance of registration certificate for drugs which do not meet import requirements;
(d) Issuance of new drug certificate, drug approval number or approval to conduct clinical trial to units which do not meet clinical trial requirements or manufacturing requirements.

Article 95. Drug administration departments or the drug testing institution identified by the drug administration departments or other institutions which specialized in drug testing and designated by the drug administration departments shall be ordered by its superior organization or the state supervision agency to cease engaging in drug manufacturing and operation activities, and illegal revenues shall be confiscated; in a serious case, the person directly in charge or other persons who are directly responsible shall receive administrative discipline.
Persons working in drug administration departments and the drug testing institution established by the drug administration departments or other institutions which specialized in drug testing and designated by the drug administration department are prohibited from engaging in drug manufacturing and operation activities. Violations will be administratively disciplined.

Article 96. Relevant government departments shall order the return of any illegally collected test fees by the drug administration departments or by their designated testing institutions in the course of administering and testing of drugs. The person directly in charge and other persons who are directly responsible shall receive administrative discipline. In a serious case of illegally collecting testing fees by drug testing institutions, their certification shall be canceled.

Article 97. Drug administration departments shall execute their supervision and inspection functions to impose supervision over the manufacturing or operation activities of enterprises which have obtained the License for Drug Manufacturing Enterprise, or License for Drug Operation Enterprise and ensure that their activities are conducted in accordance with this Law.
In addition to an enterprise with License for Drug Manufacturing Enterprise or License for Drug Operation Enterprise being legally liable if it engages in production or sales of counterfeit drugs or drugs of inferior quality, person directly in charge or other persons directly responsible in the drug administration departments who abuse their power or are negligent shall receive administrative discipline. Violations of criminal law shall be prosecuted.

Article 98. Drug administration departments shall order their subordinate drug administration departments to correct administrative acts which violate this Law within a certain time; and shall have the right to change or revoke the order if the violation is not duly corrected.

Article 99. Drug administration personnel shall be liable if they violate this Law by abuse of power or neglect of duty. Violations of criminal law shall be prosecuted, other violations shall be administratively disciplined.

Article 100. Drug administration departments shall inform the department of administration of industry and commerce to modify or cancel the registration of an enterprise which License for Drug Manufacturing Enterprise or License for Drug Operation Enterprise has been canceled in accordance with this Law.

Article 101. The value of drugs in this Chapter shall be calculated according to the retail prices marked on packaging of the drugs illegally manufactured or sold; if there is no retail price, the value shall be calculated according to the market price of the same type of drugs.
Chapter 10: Miscellaneous

Article 102. The following terms are defined as:
Drug: refers to materials that are used in prevention, treatment, or diagnosis of diseases and purposeful readjustment of the biological functions of the human body with specified indications, functions, means of administration and dosage quantity, including TCM herbs, TCM preparations, finished TCM, bulk chemicals and their preparations, antibiotics, biochemical drugs, radioactive drugs, serums, vaccines, blood products, diagnostic drugs, etc.
Excipient: refers to excipient or additive agent used in compounding preparations or prescriptions.
Drug Manufacturing Enterprise: refers to an enterprise which manufactures drugs on an exclusively or non-exclusive basis.
Drug Operation Enterprise: refers to an enterprise which engages in drug distribution on an exclusive or non-exclusive basis.

Article 103. Administration methods governing the cultivation, collection and breeding of the materials for traditional Chinese medicines shall be separately promulgated by the State Council.

Article 104. The government exercises special administration on the distribution of preventative biological products. The specific measures are to be promulgated by the State Council.

Article 105. The specific implementation methods of this Law for the PLA shall be promulgated by the State Council and the Central Military Committee in accordance with this Law.

Article 106. This Law shall be effective from December 1, 2001.

10.Rules for the Administrative Protection of Drugs
(SDA Order No. 25)

Chapter Ⅰ
General Principles

Article 1. This Rules is promulgated in accordance with Article 22 of the Regulation for Administrative Protection of Drugs (hereinafter "Regulation").

Article 2. According to the Regulation, SDA is the administrative organ responsible for administrative protection of drugs.

Article 3. SDA shall establish an Office of Administrative Protection of Drugs which is responsible for:
(1)accepting and reviewing applications for: administrative protection, revocation of administrative protection, and handling of infringement matters;
(2)granting or denying approval for administrative protection;
(3)revocation of administrative protection and handling infringement matters;
(4)establishing a registration book to record acceptance, granting or denial of approval, revocation and termination of administrative protection;
(5)publication of acceptance, granting or denial of approval, revocation and termination of administrative protection; and,
(6)other matters related to the administrative protection of drugs.

Article 4. The term "owner of exclusive rights" referred to in the Regulation means the person who has the complete rights for the manufacture, use and sales of a drug for which application is made for administrative protection.
Article 5: The term "drug" referred in the Regulation means a substance that is used in the prevention, treatment or diagnosis of human diseases with prescribed indications, usage and dosage, for the targeting of human physiology.

Chapter Ⅱ
Application for Administrative Protection of Drugs

Article 6. The phrase "not yet marketed in China" referred to in Article 5(3) of the Regulation means that a drug for which application has been made for administrative protection shall not yet have been distributed through lawful channels in the Chinese pharmaceutical market.

Article 7. The term "agent" referred to in Article 7 of the Regulation means an agent designated by SDA.

Article 8. SDA shall establish uniform forms for administrative protection, including the application and other relevant documents.

Article 9. The term "foreign language" referred to in Article 8 of the Regulation means the official language of the country of the applicant.

Article 10. When an applicant authorizes an agent to handle application matters for administrative protection, both parties shall sign a power of attorney which defines the scope of authorization.
The agent shall submit the power of attorney together with other application documents according to Article 8 of the Regulation and this Rules.

Article 11. Each application for administrative protection is limited to one drug.

Article 12. The application form referred to Article 8(1) of the Regulation, shall include the following items:
(1)name and address of the applicant;
(2)nationality of the applicant;
(3)for an applicant which is an enterprise or other organization, the name of the country or region of its corporate headquarters;
(4)name (generic name, brand name, chemical name), chemical structure, formulation, dosage form, indications, directions for administration, dosage, and a brief introduction to the processing technology of the pharmaceutical;
(5)signatures (seals) of the applicant and the agent;
(6)list of the application documents; and,
(7)any other matters which should be noted.

Article 13. The submitted documents shall be neat and clear. Attached diagrams shall meet relevant standards and specifications and shall not be altered. Technical terms used in application documents shall be the standardized terms uniformly adopted in China [assuming such term has been adopted in China].

Article 14. The documents referred to in Article 8(2), (3) of the Regulation shall be notarized, certified or authenticated in the country of the applicant.
The document referred to in Article 8(4) of the Regulation shall be notarized by a Chinese notary organization.

Article 15. The Chinese legal entity which signed the submitted pharmaceutical manufacturing contract, referred to in Article 8(4) of the Regulation, shall possess a Drug Manufacturing License and a Pharmaceutical Business License; the Chinese legal entity which signed the submitted sales contract shall possess a Pharmaceutical Business License and a Legal Enterprise Business License.
In submitting the manufacturing or sales contract, the applicant shall also attach photocopies of the above licenses.

Article 16. In making application for administrative protection, an applicant shall submit all relevant documents. SDA shall not accept an application in either of the following situations:
(1) failure to use the required forms or complete the forms as required;
(2)failure to submit relevant documents as required.

Article 17. If prior to the issuance of the certificate of administrative protection, the applicant requests to withdraw the application, the applicant shall submit a written application of revocation to SDA, indicating the applicant 's name and drug name.

Chapter Ⅲ
Term, Termination, Revocation, and Effect

Article 18. The term "date of issuance of the certificate of administrative protection for a drug (hereinafter "Certificate")" referred in Article 13 of the Regulation shall be the date indicated on the Certificate.

Article 19. SDA shall be responsible for publication according to the Regulation and this Rules.

Article 20. Within the term [period of legal effect] of administrative protection of a drug, the owner of the exclusive rights shall duly submit documents to SDA showing the continued legal effectiveness of the applicant 's right of exclusivity.

Article 21. According to Article 15 of the Regulation, in requesting revocation of administrative protection a Petition for Revocation of Administrative Protection of a Drug (hereinafter "Petition for Revocation") and other relevant documents shall be submitted in duplicate. The Petition for Revocation shall include:
(1)name, address and nationality of the petitioner;
(2)name and address of the respondent [grantee/recipient of administrative protection];
(3)the name of the drug for which the petitioner requests revocation and its approval number;
(4)the basis and evidence for the Petition for Revocation.
Each Petition for Revocation is limited to one drug.

Article 22. After receipt, SDA shall review a Petition for Revocation to determine whether, based on facts and legal arguments, it presents a prima facie case according to the Regulation, and issue a notice of acceptance or rejection.
For a Petition for Revocation which is accepted, SDA shall send a duplicate copy and other relevant documents to the owner of exclusive rights ("respondent") requesting a written answer within a prescribed time. The failure of the respondent to duly file a written answer will not affect the conducting of an examination by SDA.

Article 23. Upon completion of the examination, SDA shall determine whether to revoke the administrative protection, or dismiss the Petition for Revocation and thus maintain administrative protection for the drug. SDA shall notify the parties in writing and publish its decision.
Article 24. If a generic of the originator 's drug obtained approval for clinical trials before the date of [acceptance] of the originator 's application for administrative protection and obtained SDA approval for manufacture before the date of the grant of administrative protection, it may continue to be manufactured and sold after the grant of administrative protection within the scope of its approvals. However, [its licenses for manufacture and sale] may not be transferred to a third party.

Chapter Ⅳ Handling of Infringement

Article 25. An owner of exclusive rights may petition SDA to handle infringement matters within two years from the date it knows or should know about the infringement [the failure to petition SDA within this two year statutory term (also called "statute of limitations") presumably results in the waiver of these rights].

Article 26. The owner of exclusive rights petitioning SDA shall submit a Petition to SDA for the Handling of the Cessation of Actions Infringing on Administrative Protection Rights (hereinafter "Petition to Cease Infringement"), which shall indicate:
(1)name, address and nationality of the petitioner;
(2)name and address of the respondent [infringer];
(3)name of the drug being infringed and its approval number;
(4)allegations of infringement; and,
(5)facts and corresponding evidence showing infringement.
Duplicate copies of the Petition to Cease Infringement shall be prepared in the number of respondents. Each Petition to Cease Infringement is limited to one drug.

Article 27. SDA shall accept a Petition to Cease Infringement which meets requirements and send a duplicate to each respondent requesting a written answer within a prescribed time period.

Article 28. If necessary, SDA may hold a hearing with the participation of the petitioner and respondent(s) at which evidence is presented, evaluated, and argued.

Article 29. SDA shall determine whether a respondent has committed infringement, dismissing petitions where actions do not constitute infringement, and, according to law, stopping actions which constitute infringement.

Article 30. Upon determination by SDA of infringement, the owner of exclusive rights may sue in People 's Court for economic compensation.

Article 31. If a respondent or a third party submits a Petition for Revocation during the process of handling the infringement matter, SDA shall [possibly "may"] suspend the handling of the infringement matter until the conclusion of the revocation matter, then either resume or terminate the handling of the infringement matter.

Chapter Ⅴ
Fees

Article 32. Fees shall be required for the application for administrative protection and following related matters:
(1)application;
(2)examination;
(3)annual renewal;
(4)publication;
(5)certificate;
(6)petitioning for revocation; and
(7)handling of infringement.
SDA shall publish a standard of the above fees.

Article 33. An applicant shall pay the application fee upon the submission of the application for administrative protection; pay the examination and publication fees within one month from the date of the acceptance notice. An application shall be considered as withdrawn if, without appropriate reasons, a fee is not duly paid (including partial payment).

Article 34. The owner of exclusive rights for a drug that has been granted administrative protection shall, within one month from date of issuance of the Certificate, pay the following fees: certificate, publication and the annual fee for the current year. Within the term of administrative protection, the annual fee should be paid within the first two months of each year. If, without appropriate reasons, the annual fee is not duly paid, the right to administrative protection is automatically considered waived.

Article 35. The fee for the Petition for Revocation should be paid upon its submission.

Article 36. The owner of exclusive rights shall pay the fee the Petition to Cease Infringement upon its submission.

Article37. All the fees prescribed by Article 33 of this Rules shall be collected by the "agent".

Chapter Ⅵ
Miscellaneous

Article 38. Unless otherwise stated in the Regulation and this Rules, the first day for all the time periods shall not be counted. For a time period calculated by year or month, the corresponding day in the last month of each period shall be the end of the period; if there is no corresponding day in the month, then the last day of the month shall be the end of the period. If the last day of a time period falls on a legal holiday, then the first working day after the holiday shall be the end of the time period.

Article 39. SDA shall be responsible for the interpretation of this Rules.

Article 40. This Rules shall be effective since the date of issuance. The Rules for the Administrative Protection of Drugs issued by the former State Pharmaceutical Administration of China (SPAC) on December 30, 1992, shall be simultaneously annulled. This Rules supercedes any inconsistent provisions of previously published regulations.

11.Drug Registration Regulation
(2005)

Chapter Ⅰ
General Principles

Article 1. This Regulation is promulgated according to the Drug Administration Law of The People’s Republic of China (Drug Administration Law) and the Implementing Regulation of the Drug Administration Law of The People’s Republic of China (Implementing Regulation) to ensure the safety, efficacy and quality control of drugs and standardize drug registration.

Article 2. This Regulation shall apply to all drug research and clinical studies, application for clinical study, drug production or importation, as well as the related drug registration inspection and drug administration in The People’s Republic of China (PRC).

Article 3. Drug registration means the legal process by which a decision is made by SFDA, upon application of registration applicant, to either approve or not approve the conducting of a drug clinical trial, production or importation of a drug to be marketed, based on a systematic evaluation of the safety, efficacy and quality control of the drug.

Article 4. The State shall encourage research and development of new drugs and exercise fast track approval for innovative new drugs, those for difficult to treat and life threatening diseases, and drugs needed for emergency use.
Article 5. The State Food and Drug Administration (SFDA) is the competent national authority for drug registration, responsible for the review and approval of clinical studies, production and importation of drugs.
Provincial Drug Authorities (PDA) shall be authorized by SFDA to examine the completeness, standardization and authenticity of an application dossier, and organize inspection of the pilot manufactured drugs.

Article 6. A drug registration applicant (applicant) means an institution which makes application for and assumes corresponding liability for drug registration, and holds the drug approval certificate after approval has been obtained.
A local applicant shall be a legally registered institution in China and be competent to independently assume legal liability. A foreign applicant shall be a legally established pharmaceutical company outside of China. In making application for an import drug registration, the foreign applicant shall use its office in China, or authorize an agent in China to handle the application.
The person(s) handling the drug registration application shall have technical expertise, and be familiar with drug administration laws, regulations and technical requirements.

Chapter Ⅱ
Application for Drug Registration

Article 7. Drug registration application includes application for new drug, application for a drug already with national standards, and application for import drug as well supplemental application. A local applicant shall make application according to new drug or a drug already with national standards; a foreign applicant shall make application according to import drug.

Article 8. A new drug application means a registration application for a drug that has not been marketed in China. A drug that has been marketed in China for which an application is made for a change in dosage form, or route of administration, add new indication shall be treated as a new drug application
Application for a drug already with national standards means application for production of a drug for which SFDA has already issued formal standards.
Application for import drug means application for a drug produced outside China to be marketed in China.
Supplemental application means an application for the change, addition, or cancellation of any item or contents in the existing registration approval of a new drug, drug already with national standards, or import drug.

Article 9. Application for registration shall be made to PDA with submission of relevant documents and drug samples. However, application for import drug shall be made to SFDA.
Applicant should assume the liability for the truthfulness of all the application dossier..

Article 10. If two or more institutions jointly apply for new drug registration, the application shall be made to the PDA where the drug manufacturer is located. If all the applicants are manufacturers, the application shall be made to the PDA where the drug manufacturer of the preparation is located. If none of the applicants is a drug manufacturer, the application shall be made to the PDA where the drug sample is pilot manufactured.

Article 11. Regarding the drug or its formulation, manufacture processing, indication etc. the applicant shall submit documents explaining the China patent status and ownership rights. If other party holds patent in China, the applicant shall submit a letter of guarantee stating that the drug will not infringe on the patent rights of others and that the applicant assumes liability for any possible infringement.

Article 12. If an infringement dispute occurs after completion of registration, the parties shall try to negotiate a resolution, or resolve the matter according to relevant laws, regulations, or rules through judicial organs or patent administration institutions.
Once there is a final rule from the Patent Administration or an enforcement judgment from People’ Court to determine the fact of infringement, Patent holder may apply at SFDA for cancellation of drug approval number of infringing party. SFDA shall based on the facts, cancel the certified drug approval of infringing party.

Article 13. For a drug that has obtained patent protection in China, another applicant may apply for registration within two years prior to the patent expiration. SFDA shall review the application according to this Regulation and, after expiration of the patent, approve production or import for an application that meets requirements.

Article 14. For a period of 6 years from the date of the original applicant's approval, SFDA shall not approve a subsequent application that used, without the express consent of the original applicant, the undisclosed R&D data and other data generated by the original applicant for submission of application of manufacturing or marketing of a drug containing new chemical ingredients unless the submitted data is generated by the subsequent applicant itself.

Chapter Ⅲ
Pre-clinical Laboratory Study of Drugs

Article 15. The scope of pre-clinical laboratory study (pre-clinical study) of a drug for registration includes synthetic process, extraction methods, physical-chemical properties and purity, dosage form selection, screening of formulas, preparation process, inspection methods, specification, stability, pharmacology, toxicology and pharmacokinetic study. For TCM preparations, information such as the source and the processing of raw materials should also be included. For biological products, information such as specification, storage condition, genetic stability and immunology study of strain, cell strain as well as biological tissue should also be included.

Article 16. Pre-clinical study of a drug shall be conducted in accordance with relevant regulations; the drug safety evaluation shall be conducted in accordance with Good Laboratory Practice for Pre-Clinical Laboratory Studies (GLP).

Article 17. Institutions engaged in drug research and development shall have the necessary personnel, facility, equipment, instruments, conditions and management system needed corresponding to the research project. The animals, reagents and raw materials used for experiments shall comply with relevant national regulations and requirements. The authenticity of all data and materials shall be ensured.

Article 18. When an application is only made for registration of preparation, the raw materials of the investigative drug substance used for this preparation shall have a Drug Approval Number, Import Drug Certificate or Pharmaceutical Product Certificate, and the raw materials shall have been obtained from legal channels. Relevant certified documents should be provided if the drug substances registered by other party or still pending the approval process have been used. Any investigative drug substance which does not have a Drug Approval Number, Import Drug Certificate or Pharmaceutical Product Certificate shall go through SFDA approval process.

Article 19. If an applicant authorizes another institution to conduct the study of drugs, or any single experiment, inspection or pilot production and manufacture, the applicant shall sign a contract with the authorized party and maintain responsibility for the authenticity of study data.

Article 20. If an applicant uses the pre-clinical study documents from a foreign drug research institution as supporting materials for a drug registration application, an explanation for the items referencing the page numbers shall be provided by the institution and notarized certificate of the institution's legal overseas registration shall be attached. Only after the documents are authenticated by SFDA may they be included in the registration documents. SFDA may send people to conduct on-site inspections, if necessary.

Article 21. When there is a need to audit and inspect drug studies, SFDA and PDA may request the applicant or the drug research institute which conducted the experiments to repeat an experiment for any items by using the methods and data listed in the application dossier, and SFDA and PDA may send people to conduct on-site inspections of the experiment process. SFDA may also designate other drug control institutes or drug research institutions to repeat the experiments.

Article 22. The pre-clinical study of drugs shall be conducted in accordance with relevant technical guidelines issued by SFDA. If the applicant conducts the experiments according to other methods and techniques, the applicant shall provide information to evidence that the methods and techniques are scientific.

Chapter Ⅳ
Clinical Study of Drugs

Section 1
Basic Requirements

Article 23. Clinical study of drugs includes clinical trials and bioequivalence trials.
Only after approval from SFDA may a clinical trial study be conducted, and it shall be conducted in accordance with Good Clinical Practice (GCP).

Article 24. Clinical trials shall be conducted for the registration of a new drug.
Clinical trials are divided into Phase I, Phase II, Phase III and Phase IV. Clinical trials of Phase I, Phase II and Phase III are needed for a new drug application. In some cases only Phase II and Phase III clinical trials or, only Phase III clinical trials, are needed for a new drug application.

Phase I. Basic clinical pharmacology and human safety evaluation studies. To observe tolerance in human bodies and pharmacokinetics, providing a basis for a drug administration program.

Phase II. A preliminary exploration on the therapeutic efficacy. The purpose is to evaluate the safety and efficacy of a new drug on patients within the target indication of the drugs, and providing the basis to devise Phase III Clinical Trial and to determine a drug administration program. Phase II Clinical Trial may be conducted in many ways including randomized blind controlled clinical trial in accordance with the purpose of the study.

Phase III. The phase to confirm the therapeutic efficacy. The purpose is to further verify the safety and efficacy of a new drug for patients with targeted indication, to evaluate the benefit and risks relationship, and finally to provide sufficient data to support the registration approval of the drug. The trials usually are randomized, blind and controlled clinical trial with a large number of sample subjects.

Phase IV. A new drug post-marketing study, conducted by the applicant. The objective is to investigate the efficacy and adverse reactions under the conditions of wide use, and to evaluate the benefit and risk relationship when used by ordinary and special groups of patients and to improve dosage of the drug.

Article 25. Generally there is no need for clinical studies for the registration of a drug already with national standards. If clinical studies are needed, for a chemical drug only bioequivalence trials may be required. If the drug quality has to be controlled through the production processes and standards, clinical trials shall be conducted. For a supplemental application for a drug already marketed, clinical studies shall be conducted for an additional indication, or a significant change in the production process, or for any additional indication of TCM.
Bioequivalence Trials refers to the human trials of Bioequivalence study, where statistical difference of absorption degree and speed of active components, in term of parameter of pharmacokinetics, will be determined by comparison the same or different dosage form of the preparation at the same test conditions,

Article 26. The number of cases in the clinical study of a drug should be decided in accordance with the objective of the clinical trials and shall meet both the statistical requirements and the minimal cases required by this Regulation for a clinical study. For a drug used for the treatment of rare and special diseases or other special circumstances, any reduction in the number of cases in the clinical study or exemption must be approved by SFDA.

Article 27. For a vaccine and other special drugs prepared during the strains selection stage, if there is neither suitable animal experimental model nor a way to evaluate the efficacy of the drugs in laboratory study, application of clinical trials may made to SFDA, provided that safety of the subjects can be ensured.

Section 2
Requirements Before Implementation

Article 28. After approval of a clinical study, the applicant shall select qualified institutions to conduct the clinical study, negotiate and determine leading institution, principal investigator and participating institutions.

Article 29. The applicant shall sign a Clinical Trial Agreement with the leading and the participating institutes selected for the clinical study, and then provide the draft Informed Consent Form and Investigator’s Brochure, jointly improve the clinical trial protocol with reference to technical guidelines.
The applicant shall request the Ethics Committee of the institutions to review the clinical trial protocol.

Article 30. The applicant shall provide the institutions with the investigational drugs and comparator drugs (expect for Phase IV clinical trials) together with COA of drug samples, at no charge. The applicant shall bear the costs related to conducting the clinical study.

Article 31. The investigational drugs shall be produced in a workshop which meets GMP requirements and the production process shall be strictly in accordance with the requirements of GMP.
SFDA or the authorized PDA may conduct on-site audit, as necessary.

Article 32. The applicant may inspect the investigational drug itself in accordance with the drug's standards approved by SFDA, or authorize a drug control institute designated by Article 147 and Article 148 of this Regulation to conduct the quality test. The drug may not be used for Clinical Trails before it has passed the inspection. SFDA may designate a drug control institute to conduct a random inspection for the investigational drug.
Vaccine, blood products and other bio-products designated by SFDA as well as investigational drugs produced overseas must be inspected by a drug control institute designated by SFDA. The drug may not be used before it has passed the inspection. The applicant assumes all responsibility for the quality of the investigational drug.

Article 33. Before conducting the clinical study, the applicant shall file with SFDA information such as the clinical study protocol, name of the principle investigator of the leading institution, participating institutions and investigators, approval letter from ethics committee, and the sample of the Informed Consent Form, also providing a copy to the PDA where the institutions are located.

Section 3
Administration of a Clinical Study

Article 34. During the clinical study, the applicant shall designate inspectors to monitor the implementation of GCP.

Article 35. If an applicant discovers that an institution conducting clinical study is in violation of relevant regulations, or is not following the clinical study protocol, the applicant shall try to correct the situation. For serious violation, the applicant may request to suspend or stop the clinical study and shall submit a written report to SFDA and the relevant PDA.

Article 36. Upon the completion of each phase of the clinical study, the applicant shall submit a clinical study and statistical analysis report to SFDA and relevant PDA.

If the duration of clinical study exceeds 1 year, the applicant shall submit an annual clinical study progress report to SFDA and relevant PDA from the date of the approval of the study.

Article 37. A clinical study shall start within 2 years of approval. Otherwise the approval certificate shall automatically become null and void. A re-application shall be submitted to resume the study.

Article 38. The institutions and personnel participating in the clinical study shall be familiar with the characteristics, therapeutic activities, efficacy and safety of the investigational drugs and clearly understand their responsibility and liabilities, obtain Informed Consent Forms signed voluntarily by the subjects, keep accurate and true clinical study records.

Article 39. If an applicant violates GCP or requests to change the data and conclusions of clinical study, the participating institutions and personnel shall report the circumstances to PDA and SFDA.

Article 40. The institutions and investigators participating in the clinical study shall be responsible for taking all necessary measures to ensure the safety of the subjects.
During the clinical study the investigator shall carefully watch for the occurrence of adverse events, adopt appropriate measures, and keep a record.
The institutions shall report a serious adverse event to PDA and SFDA within 24 hours of occurrence, and immediately report to the Ethics Committee.

Article 41. SFDA and PDA shall conduct inspection or data audits for the approved clinical study.

Article 42. SFDA may request the applicant to amend the clinical study protocol, suspend or stop the clinical study in any of the following circumstances:
(1)the Ethics Committee has failed to perform its duty; or;
(2)the safety of the subjects cannot be effectively ensured;
(3)serious adverse event was not timely reported;
(4)he clinical study progress report was not timely submitted,
(5)the completion of the clinical study is more than 2 years behind the original completion date and there are still no results which can be evaluated;
(6)evidence that the investigative drug is not effective;
(7)quality problems in the drug used for clinical trials;
(8)fraud in the clinical study;
(9)other circumstances violating GCP.

Article 43. The applicant or institutions shall implement the decision regarding amendment of the clinical study protocol, or suspension or cessation of the clinical study made by SFDA

Article 44. During the clinical study, in case a large range or unexpected adverse reaction or serious adverse event occurs, or there is evidence to prove that the investigational drug has significant quality problems, SFDA or PDA may adopt emergency mandatory administrative measures to suspend or stop the clinical study, and the applicant and institutions must immediately stop the study.

Article 45. The investigators shall be responsible for use of the investigational drug and ensure the investigational drug is only used by the subjects of the study and the dosage and usage of the drug are in accordance to the clinical study protocol. The investigators shall not give the drug to any person not participating in the clinical study. The investigational drug shall not be sold.

Article 46. A foreign applicant who wants to conduct an international multi–center clinical study shall apply at SFDA in accordance with the following provisions:
(1)The drug used for an international multi–center clinical study shall be one already registered in a foreign country or in phase II or phase III clinical trials. An application for an international multi–center clinical study of new preventive vaccine from a foreign applicant still not registered outside China shall not be accepted.
(2)In approving an international multi–center clinical study in China, SFDA may first request the applicant to firstly conduct the Phase I clinical trials in China, if needed.
(3)During a study conducted in China, the Applicant shall, in accordance with the relevant regulations, report to SFDA any serious adverse events or unexpected adverse events which occur in any countries.
(4)Upon the completion of the study, the Applicant shall submit the complete clinical study report to SFDA.
(5)Data generated from an international multi–center clinical trial used for drug registration in China, shall be in accordance with the relevant provision of this Regulation, and the applicant shall submit the complete research information of the study.

Chapter Ⅴ
Application and Approval of New Drugs

Section 1
Basic Requirements

Article 47. The application dossier submitted for new drug registration shall be complete and standardized with authentic and reliable data. In citing literature and materials, the name of the work(s) and journal(s) as well as volume, issue and page number shall be provided. For unpublished literature and materials, an authorization letter from the owner must be provided. For any foreign language materials a Chinese translation should be provided in accordance with relevant requirements.

Article 48. SFDA may use fast track approval process for the following new drug:
(1)New active ingredients and its preparation extracted from TCM, natural drugs, or preparation made of material from plant, animal and minerals, which have not been marketed in China and;
(2)drug raw material and its preparations, and biological product that have not been marketed domestically or outside China;
(3)new antiviral drug for AIDS and drug used for diagnosis and prevention of AIDS, cancer and orphan drug;
(4)new drugs which treat diseases for which there is no effective therapy.
(5)Drugs needed for emergency.

Article 49. After receipt of an application for a drug described in Article 48 of this Regulation, PDA shall examine and made recommendations as to whether the application meets the requirements for fast track approval. Upon receipt of PDA recommendations, SFDA shall then decide whether to use fast track approval for the drug application.

Article 50. When a new drug is jointly developed, the application shall be made by one of the parties, and other parties shall not apply. When a joint application needs to be made, the application shall be signed by all the parties. Except for a drug described in Article 48.1 and 48.2, after approval, the new drug shall only be manufactured by one party. Different strengths of one drug shall not be manufactured by different parties.
No one should attempt to make different applicant to apply for registration for the same technology of new drug, or make repeat application in any way. SFDA and PDA will organize the related inspection, if any needs. Once the foresaid fact is confirmed, the application will not be accepted, and the application will be returned if already accepted.

Article 51. During review process of new drug, even if the marketing approval of other domestic drug of the same active substance is approved overseas, the registration category and technical requirements of the drug shall remain unchanged in the review process in China.
During the review process of new drug, even when the marketing approval of other domestic drug of the same active substance is approved in China, the registration category and technical requirements of the same kind of drug shall remain unchanged in the review process in China.

Section 2
Approval of Clinical Study for New Drugs

Article 52. Upon the completion of the pre-clinical study, the applicant shall complete the Application Form for Registration of New Drugs, and submit the authentic materials and sample drugs to PDA.

Article 53. PDA shall examine for form the application dossier, and if the requirement are met, the application will be accepted with issuing of acceptance notification of drug registration application. If the requirements are not met, the application will not be accepted with issuing of non-acceptance notification of drug registration application, with explanation of reasons.
PDA shall, within 5 days upon acceptance of the application, organize and conduct on-site inspection for production and research of the drug, take sample drugs of 1-3 batches, and notify the drug control institute for inspection. PDA shall, within the prescribed time limit, submit recommendations, inspection report and application dossier to SFDA, and notify the applicant.

Article 54. The drug control institute shall conduct drug inspections and drug standard inspection upon receiving notification, and submit the inspection reports to SFDA within the described time, notify the PDA which requested the inspection, and notify the applicant.

Article 55. Upon receipt of the application dossier, SFDA shall organizes the pharmaceutical, medicals and other technical people to conduct technical review of the new drug, and SFDA may request the applicant to provide supplemental information and drug sample. When SFDA consider the requirements are met, Approval for Drug Clinical Study will be issued. When SFDA does not consider the requirements are met, Notification of Approval Opinion will be issued with explanation.

Article 56. Upon receipt of verification recommendation, if the drug control institute concludes that the quality cannot be controlled by the drug standards, the applicant may withdraw the new drug application. If the applicant did not withdraw the new drug application, when SFDA proves the quality indeed cannot be controlled by the drug standards through a technical review, the application shall be returned.

Article 57. After inspection, if the drug sample does not meet the submitted drug standards, after verification, SFDA shall return the application of new drug.

Article 58. During SFDA's drug application review process, except for new information related to the innovative drug ingredients or drug safety, or the supplemental information required by SFDA, the applicant shall not submit supplemental technical material to SFDA. If new technical materials must be added, the applicant shall withdraw the application, and re-apply according to the original application procedures.

Article 59. For those withdrawn or returned application, after further studies, if the requirements of the Regulation are met and there is no new drug of the same kind enter into monitoring period, the original applicant may resubmit the application according to original application procedures.

Section 3
Approval of New Drug Production

Article 60. After completion of a clinical study, the applicant shall fill out the Drug Registration Form, and submit clinical study information, changes and supplemental information, with detailed explanation and justifications, to the PDA where the applicant is located. At the same time, the applicant shall submit raw material for the preparation of the standard substance to NICPBP.

Article 61. PDA shall examine for form the application dossier, and if the requirement are met, the application will be accepted with issuing of acceptance notification of drug registration application. If the requirements are not met, the application will not be accepted with issuing of non-acceptance notification of drug registration application, with explanation of reasons.

Article 62. PDA shall, within 5 days upon acceptance of the application, organize and conduct on-site inspection for production and research of the drug, take sample drugs of 3 consecutive batches, and notify the drug control institute for inspection. Upon completion, PDA shall, within the prescribed time limit, submit recommendations and , inspection report and application dossier to SFDA, and notify the applicant..

Article 63. The 3 consecutive batches of sample product used for new drug application shall be manufactured in a workshop with the GMP Certificate. For a newly established drug manufacturing enterprise or workshop or for the manufacture additional drug dosage forms, the production process of the sample product shall be in accordance with the requirements of GMP.

Article 64. The notified drug control institute shall inspect the sample product taken for registration inspection, and submit the drug inspection report within the prescribed time, send copies to the PDA which requested the inspection, and notify the applicant.

Article 65. Upon receipt of the application dossier, SFDA shall conduct a comprehensive review of the application dossier, and SFDA may request the applicant to provide supplemental information. SFDA will issue its decision through Drug Registration Approval Form. An application which meets requirements shall be issued a New Drug Certificate. If the applicant already has a Drug Manufacturing License and meets the necessary conditions for manufacture, the Drug Approval Number will also be issued at the same time. When SFDA does not consider the requirements are met, Notification of Approval Opinion will be issued with explanation.

Article 66. The insert sheet shall be approved by SFDA according to materials submitted by the applicant. SFDA shall simultaneously issue a registration standard and insert sheet in approving a new drug. The manufacturer shall be responsible for correctness and accuracy of the insert sheet, and monitor the efficacy and safety of the drug after launch, and apply to modify the insert sheet, if necessary.
Drug manufacture enterprise should be responsible for monitoring the post-marketing safety and efficacy of the drug, and if necessary, timely apply for revision of the insert sheet.
The insert sheet shall be printed according to relevant SFDA regulations.

Article 67. The 3 batches of new drug used for the new drug application, after passing the inspection by NICPBP and obtaining a Drug Approval Number, those manufactured in the workshop with Drug Manufacturing License and GMP Certificate may be sold within the expiration date.

Section 4
Administration of Monitoring Period of New Drugs

Article 68. In order to ensure public health, SFDA may implement a monitoring period for the approved new drugs to be produced so as to continue the safety monitoring of the new drug.
During the monitoring period, SFDA shall not approve production and/or importation of the drug by other enterprises.

Article 69. Different monitoring period will be set for different new drugs based on the existing safety information and research from inside and outside China. The drug-monitoring period shall start from the date of approval for production, and shall not exceed 5 years.

Article 70. During the monitoring period of a new drug, drug manufacture enterprise shall regularly inspect the production process, quality, stability, efficacy and adverse reaction, and annually report to PDA.
When a serious quality problem, or serious or unexpected adverse reactions is discovered by relevant institutions of drug manufacture, distribution, use or inspection, or administration, it shall be reported to PDA immediately.

Article 71. PDA shall organize an investigation of a drug with serious quality problems, serious and / or unexpected adverse reactions, and report to SFDA.

Article 72. PDA shall order an enterprise that fails to fulfill its responsibilities within the drug-monitoring period to take corrective action.

Article 73. If a new drug with a monitoring period has not begun production within 2 years from the approval date, SFDA may approve the production application for the new drug of another applicant and continue to monitor.

Article 74. As a new drug enters monitoring period, for an application whose clinical study has already been approved by SFDA, the application shall continue in the regular review process. SFDA may approve the production or importation of an application meeting requirements; monitor the new drug within the monitoring period of the previously approved new drug.

Article 75. As a new drug enters the monitoring period, for an application which has been accepted but whose clinical study has not been approved by SFDA, the application shall be returned. Upon the completion of monitoring period, another applicant may apply as for a drug already with national standards.

Article 76. For an import drug that has already received marketing approval, for an application whose clinical study has already been approved, the application may continue in the regular review process. SFDA may approve the production of a drug whose application meets the requirements. The applicant may withdraw the application and apply as for a drug already with national standards.For an application which has been accepted but whose clinical study has not been approved, the application shall be returned and application shall be made as for a drug already with national standard

Section 5
New Drug Technology Transfer

Article 77. New drug technology transfer means the process by which the owner of a New Drug Certificate transfers its new drug processing technology to a drug manufacturing enterprise that will apply for the drug production.

Article 78. The transferor usually is a party holding a New Drug Certificate. In the event that a Drug Approval Number has been obtained, the application for cancellation of the Drug Approval Number should also be made at the time of the application for new drug technology transfer.

Article 79. The new drug technology shall be transferred in whole at one time to a pharmaceutical production enterprise. If the transferee for special reasons is unable to produce the drugs, the holder of New Drug Certificate may re-transfer the technology by evidencing a written waiver to produce the drugs from the original transferee. SFDA shall cancel the Drug Approval Number from the original transferee in accordance with requirements.
A transferee may not re-transfer the technology to any other party.

Article 80. The transferee shall have obtained a Drug Manufacturing License, GMP Certificate and the new drug shall be consistent with the production scope described in Drug Manufacturing License and GMP Certificate of the transferee.
In the newly established drug manufacture enterprise, newly established drug manufacture workshop of any enterprise and / or for a newly added dosage form, if the GMP Certificate has not been obtained for the corresponding scope, GMP Certificate should be obtained within the time limit setout in Article 6 of Implementing Regulation. The drug with an approval number cannot be marketed before the certificate is obtained.

Article 81. In transferring the new drug technology, the transferor shall sign a Technology Transfer Contract with the transferee and transfer all technology and materials to the transferee without reservation, and guide the transferee in trial manufacture of 3 continuous batches of qualified products.

Article 82. For a new drug technology jointly developed by more than one party, any transfer should be made by all the signatories of the New Drug Certificate, who will sign a Technology Transfer Contract.

Article 83. An application for a new drug technical transfer shall be jointly submitted by the owner of the New Drug Certificate and the transferee at PDA where the transferee is located. The applicant shall complete the Drug Supplemental Application Form, submit relevant materials and the Technology Transfer Contract shall be attached.

Article 84. Upon acceptance of the application for a new drug technology transfer, PDA shall inspect the trial production site, equipment, production of sample products and inspection records of the transferee, take sample product and notify the drug control institute for drug inspection.

Article 85. The drug control institute responsible for drug inspection shall complete inspection within the prescribed time, issue an inspection report and submit it to PDA.

Article 86. PDA shall examine the inspection report it has received and the relevant information provided by the drug control institute, make recommendations and report to SFDA, and notify the applicant about the recommendations.

Article 87. SFDA shall conduct a comprehensive review of the supplemental application of new drug technology transfer, and issue an Approval for Clinical Study of Drugs, if a clinical study is needed.
Upon the completion of the clinical study, the applicant shall submit clinical study information to SFDA.

Article 88. SFDA shall issue its decision on whether to approve the production through Drug Supplemental Application Approval Form. If the requirements are met, Drug Approval Number will be issued. If the Drug Approval Number has already been issued to the transferor, it shall be canceled. When SFDA does not consider the requirements are met, Notification of Approval Opinion will be issued with explanation.

Article 89. No new drug technology transfer is allowed for the drug within its monitoring period. After the monitoring period, applicant may make application of drug already with National Standards.

Chapter Ⅵ
Application and Approval of Drugs Already with National Standards

Article 90. To apply as for a drug already with national standards, the applicant shall hold Drug Manufacturing License, and GMP Certificate. The drug for which application is made shall be consistent with the production scope described in Drugs Manufacturing License and GMP Certificate of the enterprises.

Article 91. A newly established drug manufacturing enterprise or workshop or the production of additional drug dosage forms without GMP Certificate shall obtain GMP Certificate within the time prescribed in Article 6 of Implementing Regulation. The drug with an approval number cannot be marketed before the certificate is obtained.

Article 92. After completion of pilot production according to relevant technical requirements, the applicant shall complete the Application Form for Drug Registration and submit relevant technical materials and sample products to PDA.

Article 93. PDA shall examine for form the application dossier, and if the requirement are met, the application will be accepted with issuing of acceptance notification of drug registration application. If the requirements are not met, the application will not be accepted with issuing of non-acceptance notification of drug registration application, with explanation of reasons.
PDA shall, within 5 days upon acceptance of the application, organize and conduct on-site inspection for production and research of the drug, take sample drugs of 3 consecutive batches, and notify the drug control institute for inspection. Upon completion, PDA shall, within the prescribed time limit, submit recommendations and , inspection report and application dossier to SFDA, and notify the applicant.

Article 94. The notified drug control institute shall inspect the 3 batches of the sample products taken for registration inspection, and submit the drug inspection report within the prescribed time, send copies to PDA requesting the inspection and notify the applicant.

Article 95. SFDA shall conduct review of the application dossier submitted by PDA, and SFDA may request the applicant to provide supplemental information. If a clinical study is needed, SFDA shall issue an Approval for Clinical Study of Drugs.
After completion of the clinical studies, the applicant shall submit the clinical study information to SFDA.

Article 96. SFDA shall issue its decision of whether to approve the production of the drug through the Drug Registration Approval decision form. If the requirements are met, a Drug Approval Number will be issued. When SFDA does not consider the requirements are met, Notification of Approval Opinion will be issued with explanation.

Article 97. No application will be accepted by SFDA or PDA for registration of drug with temporary national standards.

Article 98. SFDA may suspend the acceptance and approval of the application of a drug already with National Standards when there is a need to further evaluate the efficacy and safety of the drug.

Article 99. The 3 batches of new drug used for the application of a Drug Approval Number manufactured in the workshop with Drug Manufacturing License and GMP Certificate, after passing the inspection by the drug control institute designated by SFDA and obtaining a Drug Approval Number, may be sold within the expiration date of the drugs.

Chapter Ⅶ
Application and Approval for Import Drugs

Section 1
Registration of Import Drugs

Article 100. An import drug, for which application is made, shall have obtained marketing approval in its country/region of manufacture. An import drug without such a marketing approval may still be approved after SFDA confirms the safety and efficacy of the kind of drug, and there is a clinical need for the drug.
The drug for which import application is made shall meet the GMP standard in the foreign country / region as well as the requirements of GMP in China

Article 101. For an import drug application, the applicant shall complete Application Form for Drug Registration and submit the relevant application dossier and sample product and relevant certified documents. The application shall be made with SFDA.

Article 102. SFDA shall examine for form the application dossier, if the requirements are met, the application shall be accepted, and an acceptance notification shall be issued. SFDA shall notify NICPBP for drug registration inspection. When SFDA does not consider the requirements are met, Notification of Non- Acceptance will be issued with explanation. SFDA may organize the on-site inspection about the research status and manufacturing condition, if necessary.

Article 103. Upon completion of the drug inspection, NICPBP shall submit the verified drug standards, the drug inspection report and inspection recommendations to SFDA.

Article 104. SFDA shall conduct a comprehensive review of the application dossier submitted and if necessary SFDA may request the applicant to provide supplemental information. SFDA shall issue its decision of whether clinical study is approved through Approval of Clinical Study of Drugs Form. When SFDA does not consider the requirements are met, Notification of Approval Opinion will be issued with explanation

Article 105. Upon approval of the clinical study, the applicant shall conduct the clinical study in accordance with the provision under Chapter 4 of this Regulation.
Upon the completion of clinical study, the applicant shall, in accordance with relevant requirements, submit to SFDA the clinical study report, sample products, relevant changes and supplemental information, with detailed explanation and justifications, and the relevant certified documents.

Article 106. SFDA shall organize and conduct a comprehensive review of the submitted clinical study information and if necessary SFDA may request the applicant to provide supplemental information. If the requirements are met, issue an Import Drug Certificate. Regulation for import drug will apply for applicants from Hong Kong, Macao and Taiwan of China. If the requirements are met, a Pharmaceutical Product Certificate shall be issued to the When SFDA does not consider the requirements are met, Notification of Approval Opinion will be issued with explanation.

Article 107. For an import drug preparations application, documents to evidence the legal channels of immediate packaging materials or containers of the drug, documents to evidence the legal channels of drug raw material and supplemental material must be provided. For raw material and supplemental material of drug that has not been approved by SFDA, the information of relevant production processes, quality specification, and inspection methods should be submitted.

Article 108. SFDA shall simultaneously issue a registration standard and insert sheet in approving an import drug.

Section 2
Approval of Repackaging of Import Drugs

Article 109. Repackaging of import drugs means taking from offshore finished drug preparation in large packaging and putting them into smaller packaging, or taking drugs in smaller packaging and placing them into final (outside) packaging with an insert sheet, labeling, etc. in China.

Article 110. The application for repackaging of import drug shall comply with following requirements:
(1)an Import Drug Certificate or Pharmaceutical Product Certificate has already been obtained for the import drugs;
(2)the drug should not yet be manufactured in China or, if manufactured, not able to meet the clinical demand;
(3)the drug of one pharmaceutical company shall only be repackaged by one pharmaceutical production enterprise, generally for a period not exceeding the valid period of Import Drug Certificate or Pharmaceutical Product Certificate.
(4)The onshore pharmaceutical production enterprise shall have a Drug Manufacturing License. If the tablet with no packing or capsule is to be repacked in China, the drug to be repackaged shall be within the production scope described in its Drug Manufacturing License and GMP Certificate.
(5)Any application for repacking of import drug should be made one year prior to expiration of Import Drug Certificate or Pharmaceutical Product Certificate.

Article 111. The offshore pharmaceutical company shall sign a Repackaging Contract for Import Drugs with an onshore pharmaceutical production enterprise, complete the Drug Supplemental Application Form.

Article 112. An application for repackaging a drug shall be submitted by the onshore pharmaceutical production enterprise to the PDA where the party is located, and the Drug Supplemental Application Form signed by the offshore pharmaceutical company should be submitted with the relevant information and sample products. PDA shall examine for form the application dossier, and if the requirements are met, the application will be accepted with issuing of acceptance notification of drug registration application. If the requirements are not met, the application will not be accepted with issuing of non-acceptance notification of drug registration application, with explanation of reasons.
PDA should make recommendation after completion of the review process and submit the application dossier and recommendation to SFDA for approval, and notify the applicant.

Article 113. Upon receipt of the application dossier, SFDA shall review the submission. When SFDA consider the requirements are met, Approval for Drug Supplemental Application and Drug Approval Number will be issued. When SFDA does not consider the requirements are met, Notification of Approval Opinion will be issued with explanation.

Article 114. The registration standards for the import drug shall be applied to the repackaged drug.

Article 115. The package, label and insert sheet of a repackaged drug shall be consistent with that of the import drug to be repacked, and shall include the approval number for drug to be repacked and name of the drug repackaging manufacturer.

Article 116. The import inspection of finished drug preparations in large packaging should be conducted in accordance with SFDA regulations. The same standards shall be applied to both the inspection of the repackaged drug and import drug.

Article 117. The offshore pharmaceutical company shall be responsible for the quality of the repackaged drugs. If a quality problem arisen, SFDA may cancel the approval number of the drug repackaging, and if necessary, cancel the Import Drug Certificate or Pharmaceutical Product Certificate of the drug in accordance with Article 42 of Drug Administration Law.

Chapter Ⅷ
Application and Approval for OTC Drugs

Article118. An OTC drug means a drug designated by SFDA, for which consumers may purchase and use by own judgment without a prescription from a practicing physician or a practicing assistant physician.

Article 119. In the following circumstances, an applicant may apply for OTC drug registration, in making drug application:
(1)the production and / or importation of OTC drugs already with national standards;
(2)change in dosage form, but without change in indications, dosage, route of administration of an OTC drug as designated by SFDA;
(3)new combination preparations developed from active OTC ingredients designated by SFDA.

Article 120. For a drug meeting the requirement of Article 119.1), applicant should check the OTC items in the “supplemental application item” of the Drug Registration Form. SFDA shall designate the drug as OTC in approving its registration. In the event of failure to check the OTC items in the Drug Registration Form, after SFDA approved the drug registration, applicant should proceed the registration according to the Regulation of Categorized Administration of Prescription Drug and OTC Drugs (temporary) and the provision of OTC registration.

Article 121. For a drug meeting the requirement of Article 119.2) or 3), applicant should check the OTC items in the “supplemental application item” of the Drug Registration Form. When SFDA consider the drug meet the OTC drug requirement, SFDA shall designate the drug as OTC in approving its registration. When SFDA does not consider the drug meet the OTC drug requirement, SFDA shall approve the drug as prescription drug. .

Article 123. Generally, for a drug meeting the requirement of Article 119.1) or 2), a clinical study is not needed. However, bioequivalence trials may be needed for solid oral dosage forms of drug. A clinical trial setout in this Regulation is needed for TCM preparation.

Article 124. For a drug meeting the requirement of Article 119.3), basis of formula should be explained, and if necessary, a clinical study is needed.

Article 125. OTC regulation should apply for OTC registration, drug insert sheet and packing as well as label. Prescription regulation should apply for other application information.

Article 126. Import drug application and approval process should apply for application of import OTC drug, where technical requirement of import OTC drug should e the same of the domestic one.

Article 127. SFDA shall approve the re-registration application of import OTC drug based on the procedure of import drug re-registration application and approval process and OTC administration regulation. Applicant need not to complete OTC registration at PDA when applying the re-registration application of import OTC drug

Article 128. If an OTC drug has been approved by SFDA for marketing, but if during its use if discovered if is not suitable for use as OTC drug, SFDA can change the drug to prescription status.

Chapter Ⅸ
Supplemental Application for Drug Registration

Article 129. An applicant should submit a supplemental application for changes in the items in the drug approval certificate and its attached drug standards, insert sheet, content on the label, as well as a change in production process that might affect drug quality.

Article 130. The applicant shall complete the Supplemental Application Form, submit to PDA where the applicant is located with relevant documents and explanations. PDA shall examine for form the application dossier, and if the requirements are met, the application will be accepted with issuing of acceptance notification of drug registration application. If the requirements are not met, the application will not be accepted with issuing of non-acceptance notification of drug registration application, with explanation of reasons..

Article 131. For a supplemental application related to import drugs, the applicant shall apply to SFDA with relevant information and document, and the approval document of incorporating the change from the competent authorities of the foreign country or region where the drug is manufactured. SFDA shall examine for form the application dossier, and if the requirements are met, the application will be accepted with issuing of acceptance notification of drug registration application. If the requirements are not met, the application will not be accepted with issuing of non-acceptance notification of drug registration application, with explanation of reasons.

Article 132. For a supplemental application of change of enterprise name, amendment of drug packing and label as requirement by regulation, and amendment of insert sheet required by SFDA, the application should be accepted and approved by PDA. When PDA consider all the requirements are met, Approval of Drug Supplemental Application will be issued and file the approval at SFDA for record. If the requirements are not met, Notification of Approval Opinion will be issued with explanation.

Article 133. For a supplemental application for changes such as change of drug standards, change of supplemental materials, or addition of new indications or functions of TCM, , the application should be accepted by PDA, who shall submit review recommendations to SFDA for approval, and then notify the applicant.

Article 134. Any supplemental application related to an import drug shall be approved by SFDA. For some of supplemental application of import drug, such as amendment of insert sheet according to the National Standard or requirement of SFDA, supplementing and perfecting of safety related content of insert sheet, change of design of packing or label of import drug or drug appearance, change of registration agent, the application needs to be filed for record, and the applicant shall implement the supplemental application if SFDA has not commented within 30 days of its receipt by SFDA.

Article 135. For a supplemental application for a drug approval number by a New Drug Certificate holder, or for a change of drug manufacturing location and / or production process, PDA shall organize on-site inspection of the pilot production, take sample product for inspection, and notify the designated drug control institute to conduct inspection of the sample product.
For a supplemental application for change of drug standards, if necessary, drug control institute shall conduct a quality inspection of the standards.

Article 136. SFDA shall examine the supplemental application of a drug, and SFDA may request the applicant to provide supplemental information. When SFDA consider the requirements are met, Drug Supplementary Application Approval Form will be issued. When SFDA does not consider the requirements are met, Notification of Approval Opinion will be issued with explanation.
When the drug approval certificate needs to be renewed, the old drug approval certificate shall be canceled. When additional drug approval certificate needs to be issued, the old certificate shall continue to be effective.

Article 137. The expiration date of the Drug Supplementary Application Approval Form shall be same with the original certificate, upon expiration, re-application needs to be made for all certificates together.

Chapter Ⅹ
Re-registration of Drugs

Article 138. The re-registration of drug means the approval process for continuing the production and / or importation of the drug upon expiration of the current approval certificate of the drug.

Article 139. The validity period of the Drug Approval Number, the Import Drug Certificate and Pharmaceutical Product Certificate issued by SFDA is 5 years. 6 months prior to the expiration, application for re-registration shall be made.

Article 140. An applicant holding the Drug Approval Number shall apply for re-registration of the drug with PDA, complete the Application Form for Drug Re-registration according to relevant requirements and submit relevant application material.
The application for re-registration of an import drug shall be submitted to SFDA.

Article 141. PDA shall examine the application dossier, and if the requirement are met, the application will be accepted with issuing of acceptance notification of drug registration application. If the requirements are not met, the application will not be accepted with issuing of non-acceptance notification of drug registration application, with explanation of reasons..

Article 142. PDA shall issue review recommendation for the re-registration within 3 months, and submit to SFDA for examiniation.
Upon receipt of the recommendation, if there is no notification from SFDA not to approve the re- registration, PAD should approve the re-registration.

Article 143. SFDA shall complete review of the application for re-registration of the import drug within 6 months of receipt, and approve the re-registration of an application that meets the requirements.

Article 144. An application for re-registration shall not be accepted in any of the following situations:
(1)failure in applying for re-registration of the drug within the prescribed time;
(2)failure in meeting the relevant requirements of SFDA upon approval for marketing;
(3)failure in completing Phase IV clinical trials according to relevant requirements;
(4)failure in monitoring drug adverse reactions according to relevant requirements;
(5)the kind of drug whose registration should be canceled based on the re-evaluation of SFDA,
(6)the kind of drug that should be withdrawn according to the requirements of Drug Administration Law;
(7)a drug which does not meet production requirements in the Drug Administration Law;
(8)failure to fulfill the responsibility during the monitoring period; or,
(9)other situations in which relevant requirements have not been met.

Article 145. In the event that relevant requirements of re-registration are not met, SFDA shall issue the notification of rejection of the drug for re-registration with explanations, and in addition to the certified drug approval document need to be canceled by regulation, the Drug Approval Number, Import Drug Certificate or Pharmaceutical Product Certificate of the drug shall be canceled before the valid period expire.

Chapter Ⅺ
Administration of Drug Inspection for Registration

Article 146. Drug reverse registration inspection must be conducted for application for registration. The inspection includes inspection of sample products and inspection of drug quality standards.
Inspection of sample products means a drug control institute conducts drug inspection according to the quality standards submitted by the applicant.
Inspection of drug quality standards means laboratory inspection by a drug control institute to verify the feasibility and scientificness of inspection methods described in the quality standards of the drug and whether or not the assumed parameters can control the drug quality.

Article 147. Drug inspections for registration usually shall be conducted by the provincial drug control institute, inspections for import drug registration shall be conducted by NICPBP.

Article 148. Drug inspection shall be conducted by NICPBP or the designated drug control institute for the following:
(1)a drug belonging to categories of Article 48.1 and 48.2 of this Regulation;
(2)biological product;
(3)other drugs designated by SFDA.

Article 149． The drug control institute shall give priority to a drug belonging to categories in Article 49 for inspection and verification.

Article 150． A drug control institute engaged in drug inspection for registration shall be staffed and equipped according to requirements of the Good Laboratory Practice of Drug Control Institutes and National Measurement Certification, and meet the needs of the quality assurance system and technical requirements of the drug registration inspection.

Article 151． The applicant shall provide the drug control institute with information needed for drug registration inspection, submit sample product or co-operate in taking sample products used for inspection, and provide the standard drug substance used for inspection. The amount of sample products supplied shall be three times the amount of the drug needed for inspection. For a biological product, the record of preparation and inspection for the corresponding batches shall also be provided.

Article 152． During the application for production of drugs already with national standards, the drug control institute shall conduct drug inspection according to national standards. A comprehensive analysis should be made to analyze the change in quality parameters caused by the changes in production process. If necessary, the institute shall request the applicant to establish necessary quality parameters to ensure the control of drugs quality.

Article 153． During the inspection of drug standards, in addition to inspection of the sample products, the drug control institute shall also issue an inspection recommendation regarding the drug standards of the drug, items to be inspected and inspection methods, based on the research data of the drug, the drug standards of similar products domestic and in the foreign countries as well as national requirements.
Before the issuance of inspection recommendations, the drug control institute should notify the applicant if necessary. If the applicant disagrees with the recommendations, it should file an objection with the drug control institute within 10 days. If the drug control institute disagrees with the applicant's objection (explanation), it shall submit the recommendation together with the applicant's explanation to SFDA with copies to the applicant and PDA which requested the drug registration inspection.

Article 154． In re-making a drug's standards, the applicant shall not authorize the drug control institute which issued the recommendations to conduct the research work. Similarly, such Institute shall not accept such authorization.

Chapter Ⅻ
Administration of Drug Registration Standards

Section 1
Basic Requirements

Article 155． “National drug standards” means the technical requirements for quality parameters, inspection methods and production processes of drugs established by the State to ensure the drug quality, including Pharmacopoeia of People’s Republic of China, drug registration standards and other drug standards issued by SFDA.
“Drug registration standards” means the standards approved by SFDA for the specific drug of the applicant. The pharmaceutical production enterprise shall comply with the drug registration standards for the drug.

Article 156． The determination of items and inspection methods for drug registration standards shall meet the requirements of the technical guidance principles, relevant principles and rules for compiling national drug standards issued by SFDA.

Article 157． An applicant shall, conditioned on the stability of the quality of raw materials and production process, select representative sample products for the study of standards.

Section 2
Transfer of Temporary Drug Standards to Formal Standards

Article 158． After approval of a new drug for production, the quality standards of the new drug will be temporary standards for a trial period of 2 years. If after the approval of other drugs, the stability of production processes and quality standards needs further review, the quality standards may be approved as temporary standards.

Article 159． For the drug produced with temporary drug standards, three months prior to the expiration of temporary standards, the enterprise shall apply to transfer the temporary standards to formal standards at the PDA where the enterprise is located, by filling out the Drug Supplemental Application Form and with the submission of quality inspection information during the trial period of the drug standards and recommendations for modification of the temporary standards.
After approval of supplemental application of change of drug standards, if the drug standard is still temporary, the enterprise should apply to transfer the temporary standards to formal standards three months prior to the expiration of original temporary standards,

Article 160． PDA shall complete the review of the application for the transfer of temporary standards to formal standards within 10 days of receipt of the application, and submit the recommendations and relevant documents to SFDA.

Article 161． SFDA shall organize the State Pharmacopoeia Commission to examine the temporary standards of a drug.
The State Pharmacopoeia Commission shall, based on the use of the drugs during the period of the temporary standards, quality standards of the relevant products domestic and overseas and relevant national requirements, issue recommendations as to whether inspection of the temporary quality standards is needed. If an inspection is needed, the relevant drug control institute should be organized for inspection and inspection of the temporary standards, and other inspection work.

Article 162． If more than one pharmaceutical production enterprise manufactures the same drug, drug inspection and inspection of quality standards for transfer of temporary quality standards to formal standards should be conducted by NICPBP or drug control institute designated by SFDA.

Article 163． If more than one applicant has applied to transfer temporary standards of the same drug into formal standards, the proposed standards may not be lower than already approved drug standards. The subsequent applicant may include additional inspection items depending on the characteristics of its drug production process.

Article 164． When there is a need for supplemental test or supplemental inforation, upon receipt of the notification of stardard inspection or verification, applicant shall, within 50 days of notification for quality standard inspection, complete and update relevant supplemental experiment or information and submit to the PDA.

Article 165． SFDA shall comprehensively examine the information submitted by State Pharmacopoeia Commission, and when SFDA consider the requirements are met, Publication for National Drug Standard will be issued. When SFDA does not consider the requirements are met, Notification of Approval Opinion will be issued with explanation. At the same time, SFDA will cancel the temporary standards and the drug approval number approved according to the temporary standards. .

Article 166． For the same kind of drug with different trial period expiration dates, the drug with temporary standards which will first expire shall begin the process of transferring to formal standards. For the drug with temporary standards which will subsequently expire, the State Pharmacopoeia Commission shall notify the applicant to make early application to PDA to transfer to formal standards.

Article 167． If an applicant fails to apply to transfer to formal standards before the expiration of the temporary standards according to relevant regulations, SFDA shall cancel the temporary standards and the corresponding drug approval number for drug production.
During the application process to transfer of the temporary standards into formal standards, the pharmaceutical production enterprise shall continue to manufacture the drug in accordance with the requirements of the temporary standards.

Section 3
Establishment and Administration of Drug Standard Substance

Article 168． Drug standard substance means a substance with specific values, used in physical, chemical inspection and biological methods inspection needed for the drug quality standards, and used to calibrate equipments, to evaluate the measuring methods or to assay the inspection drugs including standards, control products, raw material control products, and reference products.

Article 169． NICPBP shall be responsible for standardization and administration of national drug standard substances.
NICPBP may organize the relevant provincial drug control institute, research institutions or pharmaceutical production enterprise for cooperation in standardization and administration.

Article 170． During the application process for production of a new drug, the applicant shall provide NICPBP with raw materials needed for preparation and standardization of the standard substances, with the relevant research information of the standard substances.

Article 171． NICPBP shall be responsible for the comprehensive technical review of the standard substance regarding the selection of raw materials, production methods, standardization methods, standardization results, accuracy of assay values, tracing of origin of various values, stability and conditions for repackaging and packaging, to reach a conclusion as to whether they can be used as national standard substances.

Chapter 13
Drug Registration Prescribed Timeline

Article 172． SFDA and PDA shall publicly publish in the official website and registering office the condition, procedure, duration and list of all the document of application dossier needed for drug registration, as well as template of application forms.

Article 173． SFDA and PDA shall issue notification in writing of acceptance and non-acceptance of the drug registration application, which will be chopped, dated and server as future evidence.

Article 174． The prescribed timeline for drug registration means the maximum allowed time for the relevant review, inspection, and providing of supplemental information related to drug registration. If any work is finished within the timeline of drug registration, the dossier should be forwarded into the next step timely.

Article 175． Upon receipt of an application, PDA shall, within 5 days , notify the applicant in one notification all of supplemental information and incomplete information required by the examination, and in the event of failure to notify, the application will be deemed to consider as accepted.

Application should be accepted within 5 days for an application with complete information meeting the examination for form, or after applicant complete all the required supplemental information.

Article 176: Upon acceptance of the application, PDA shall begin within 5 days, and complete within 30 days the on-site inspection, taking of sample products, notification of the drug control institute for inspection of sample product and submission of the recommendation and inspection report together with information submitted by the applicant to SFDA, and at the same time, notify the applicant of the inspection recommendations.

Article 177: A drug control institute shall, within 30 days of receipt of the notification and sample products, complete the inspection and issue the inspection report.

The inspection for special drugs and vaccine products shall be completed within 60 days.

Article 178: If inspection of sample products and verification of drug standards are needed, drug control institutes shall complete such work within 60 days.

An inspection for special drugs and vaccine products shall be completed within 90 days.

Article 179: For registration of import drug, DA shall examine for form the application dossier, and if the requirements are met, the application will be accepted. SFDA shall begin the relevant work within 5 days, and complete examination of application information within 30 days, and notify NICPBP to conduct the inspection. SFDA shall, if necessary, organize on-site inspection of the research and production condition, and take sample products. .

When SFDA does not consider the requirements are met, SFDA shall within 5 days notify the applicant with explanation. Failure to notify the application should be deem as acceptance of application.

Article 180: NICPBP shall, within 5 days upon receipt of the information and the sample product, arrange for a drug control institute to conduct the inspection.

Article 181: The drug control institute responsible for inspection of import drug shall complete the inspection and submit to NICPBP within 60 days of receipt of the information, the sample products and the related standard substances.

Article 182: NICPBP shall organize the experts to conduct a technical review within 20 days of receipt of the inspected import drug standards, and conduct a re-inspection of specific items based on the review recommendation, if necessary.

Article 183: SFDA shall administer the technical review during the drug registration in accordance with the following prescribed timeline.
1) complete in 120 days for a new clinical study, complete in 100 days if a drug meets the requirements under Article 48 of this Regulation;
2) complete in 120 days for production of new drug, complete in 100 days if a drug meets the requirements under Article 48 of this Regulation; and,
3) complete in 80 days for application registration of a drug already with national standards.
4) Complete in 40 days for supplemental application if a technical review is needed.

This Article shall also apply to the technical review of import drugs.

Article 184: During the technical review, SFDA shall issue one notification regarding submission of all needed supplementary materials.

Except for application meeting the requirement of Article 48 of this Regulation, the applicant shall at one time submit all the required supplemental materials within 4 months. If the applicant fails to submit within the prescribed time SFDA shall return the application.

Article 185: If an applicant objects to providing the materials described in the notification for supplementary materials by SFDA, the applicant shall object within the prescribed time. If there is still disagreement, the applicant may submit a written report to SFDA, explaining its reasons and providing technical materials and the scientific basis to support its reasons. SFDA shall issue its decision after review.

Article 186: When an application is returned or withdrawn by the applicant, if the applicant need to re-apply, after the applicant supplements and completes relevant experiments and gathering of information, the application may be re-submitted following the original procedure.

If an application meets the provision of this regulation and there is no other drug of the same kind enter into monitoring period, SFDA or PDA should accept the application.

Article 187: Upon receipt of the supplemental information, SFDA shall complete the technical review within one third of original prescribed time, for a drug meets the requirements under Article 48, SFDA shall complete the technical review within one fourth of original prescribed time.

Article 188: SFDA shall complete the approval process within 20 days upon the completion of technical reviewFor a supplemental drug application that needs SFDA approval, SFDA shall complete the approval process within 20 days.

When approval cannot be completed with 20 days, an extension of 10 can be granted by approval from the management, and further extension exceeding 10 days will need approvals from State Council.

Article 189: The State Pharmacopoeia Commission shall complete the review of the transfer of temporary drug standards to formal standards within 60 days.

The responsible drug control institute shall complete the inspection for drug and quality standards within 60 days, and deliver the inspection recommendations and inspection report to the State Pharmacopoeia Commission. For special drugs and vaccine products, the inspection for drug and quality standards shall be completed within no more than 90 days and for same kind of drug manufactured by more than one manufacturer, shall be completed with 80 days.

Article 190: During the examination of drug registration application, SFDA or PDA should public pubis the approval procedure and approval result. For those matter of significant interest, the applicant and related party may submit written opinion as statement or for defending.

Article 191: When making decision of the drug registration application from lawful authority, SFDA and PDA shall issue notification in writing of registration acceptance or approval and registration non-acceptance or non- approval, with explanation of reminder that applicant is lawfully entitled to applying for re-consideration, administrative re-consideration or filing administrative lawsuit.

Article 192: SFDA and PDA shall notify applicant of the entitlement to applying for hearing. During drug registration, food and drug administration consider approval as an issue of significant public interest, the issues should be publicly announced and hearing should be held.

Article 193: Once a decision of drug registration approval is made, SFDA should, within 10 das, announce and deliver the decision.

Article 194: SFDA should periodically publicly publish over its official website a list of drug formulary of the drug already approved by SFDA to provides access for public retrieval.

Article 195: In special situations, if there is a need to extend the time limit for drug registration inspection or technical review, the extension should be submitted to SFDA for approval.

Article 196: If one of the provisions of Article 70 of Administrative Permitting Laws of People’s Republic of China (Administrative Permitting Laws) occurs, SFDA should proceed with the cancellation of relevant drug approval document.

Chapter 14: Reconsideration

Article 197: When an applicant object to the decision of non approval, before applying for administrative re-consideration, and filing an administrative lawsuit, the applicant may apply for reconsideration with SFDA within 10 days upon receipt of rejection decision for drug registration by filling out Drug Supplemental Application Form together with an explanation and its reasons.

The scope of reconsideration shall only be for original application items.

Article 198: SFDA shall complete the review and issue its decision and notify the applicant within 50 days upon receipt of the application for reconsideration. If SFDA maintains its original rejection decision, no further review will be given to the application.

Article 199: When there is a need for technical review during the reconsideration, SFDA shall organize the technical experts to complete the review within the original prescribed time.

Chapter 15: Legal Liability

Article 200: If one of the provisions of Article 69 of Administrative Permitting Laws occurs, SFDA should proceed with the cancellation of relevant drug approval document, based on the request of the related party or from its lawful authority.

Article 201: If an applicant is found to have provided fraudulent drug registration information and / or sample product of the drugs during the application of clinical study, SFDA shall not approve the application, and warn the applicant. No more new application for clinical trail from the same applicant will be accepted for one year. If the application has already been approved, the approval certificate shall be canceled, and a fine of RMB 10,000 - 30,000 shall be imposed. An application for the drug which is signed by this individual or institution shall not be accepted for 3 years.

A database of fraudulent conduct by applicants shall be maintained, and may be published.

Article 202: If an applicant is found to have provided fraudulent drug registration information and / or sample product of the drugs during the application of drug production or importation, SFDA shall not approve the application, and warn the applicant. No more new application for clinical trail from the same applicant will be accepted for one year. If the application of production and / or importation of the drugs has already been approved, the approval certificate shall be canceled, and a fine of RMB 10,000 - 30,000 shall be imposed, an application for the drug which is signed by this individual or institution not be accepted for 5 years.

A database of fraudulent conduct by applicants shall be maintained, and may be published.

Article 203: During the drug registration, if SFDA and /or PDA and its staff are found to violate the provisions of this regulation with one of the following occurrences, provisions of Article 72, Article 73, Article 74, and Article 72 of Administrative Permitting Laws shall apply:

1) Did not want to accept a drug regulation that met the lawful requirement.
2) Did not want to publicly publish the information items of drug registration.
3) Failure to fulfill obligation to notify applicant during the process of acceptance and approval.
4) Failure to notify the applicant in one notification of all the supplemental information that must be supplemented, when information submitted by applicant is incomplete or not meeting the statutory form.
5) Failure to explain the reasons not to accept or not to approval.
6) Approval of an application not meeting the requirement of this regulation, or approval made beyond its authority.
7) Decision to not approve an application meeting the requirement of this regulation, or failure to approve within the time limit set out in this regulation.
8) Collect fee with no consultation, or collect fee without reference to the statutory regulation.
9) Ask for or accept valuables or other interest from any party.

Article 204: Upon the cancellation of Drug Manufacturing License of a drug manufacturer, the Drug Approval Number held by the manufacturer shall subsequently become null and void, and shall be cancelled by SFDA, and the cancellation should be public announced.

Article 205: In the event that GLP or GCP requirements were not complied with during the drug registration, sanctions shall be imposed according to Article 79 of the Drug Administration Law.

Article 206: If a drug control institute issues a fraudulent inspection report during performance of its legal duty for drug inspection during the drug registration process, sanctions shall be imposed according to Article 87 of the Drug Administration Law.

Article 207: If provision of Article 21 calls for an experiment to be repeated, but an applicant refuses to repeat the experiment according to relevant requirements, the applicant shall be warned, and ordered to correct the situation. If the applicant refuses to make corrections, the application entitlement shall be canceled.

Chapter 16: Miscellaneous

Article 208: Format of Drug Approval Number should read Guoyaozhun H(Z, S, J)+ 4 digit of year + 4 digit of serial number, where H denote chemical drug, Z denote TCM, S denote biological products and J denote import drug.

Format of Import Drug License should read H(Z, S)+ 4 digit of year + 4 digit of serial number, and Format of Drug Product License should read H(Z, S)C+ 4 digit of year + 4 digit of serial number, where H denote chemical drug, Z denote TCM, and S denote biological products. For the registration certificate number of repacking of large package from ex-China, B will added as the prefix of the original certificate number.

Format of New Drug Certificate should read Guoyaozheng H(Z, S)+ 4 digit of year + 4 digit of serial number, where H denote chemical drug, Z denote TCM, and S denote biological products.

Article 209: In addition to this Regulation, the application for narcotics, psychotropic, medical-use toxic drugs and radioactive drugs shall also be administered according to other relevant national regulations.

Article 210: SFDA shall promulgate separate regulation for the registration of TCM material, TCM herb and import TCM material that regulated with approval number.

SFDA shall promulgate separate regulation for the registration of in vitro diagnosis reagent that regulated with drug regulation.

Article 211: This Regulation is effective date of publication. Drug Registration Regulation (temporary) promulgated by SDA (SDA order 35) on October 30, 2002 shall be abolished accordingly.

12.The Law of the People's Republic of China for Countering Unfair Competition
Adopted on 2 September 1993 at the Third Session of the Standing Committee of the Eighth National People's Congress

Chapter 1
General Provisions

Article 1． With a view to safeguarding the healthy evelopment of the socialist market economy, encouraging and protecting fair competition, stopping acts of unfair competition, and defending the lawful rights and interests of operators and consumers, this law is enacted.

Article 2． In carrying on transactions in the market, operators shall follow the principle of voluntariness, equality, fairness, honesty and credibility, and observe generally recognized business ethics.
Unfair competition in this Law refers to acts of operators which contravene the provisions of this Law, damage the lawful rights and interests of other operators, and disturb the socio-economic order.
Operators in this Law refer to legal persons, other economic organizations and individuals engaging in the trading of goods or profit-making services (Goods mentioned below include services.).

Article 3． The People's Governments at various levels shall adopt measures to stop acts of unfair competition and create a salutary environment and conditions for fair competition.
The administrative authorities for industry and commerce in the People's Governments above the county level shall monitor and investigate acts of unfair competition. In respect of those acts which according to the provisions of various laws and administrative regulations, shall be monitored and investigated by other departments, these provisions shall be abided by.

Article 4． The State encourages, supports and protects all organizations and individuals in carrying out social monitoring of acts of unfair competition.
Staff members of State organs shall not support or cover up acts of unfair competition.

Chapter 2
Acts of Unfair Competition

Article 5． Operators shall not adopt the following unfair means to carry on transactions in the market and cause damage to competitors:
(1) passing off the registered trademarks of others;
(2) using, without authorization, the names, packaging or decoration peculiar to well-known goods or using names, packaging or decoration similar to those of well-known goods so that their goods are confused with the well-known goods of others, causing buyers to mistake them for the well-known goods of others;
(3) using, without authorization, the enterprise names or personal names of others on their own goods, leading to people to mistake them for the goods of others;
(4) forging or falsely using, on their goods, symbols of quality such as symbols of authentication and symbols of famous and high-quality goods, falsifying the origin of their goods, and making false representations which are misleading as to the quality of the goods.

Article 6． Public utility enterprises or other operators having monopolistic status according to law shall not force others to buy the goods of operators designated by them so as to exclude other operators from competing fairly.

Article 7． A local government and its subordinate departments shall not abuse their administrative powers to force others to buy the goods of operators designated by them and to restrict the lawful business activities of other operators.
A local government and its subordinating departments shall not abuse their administrative powers to restrict the entry of goods from other parts of the country into the local market or the flow of local goods to markets in other parts of the country.

Article 8． An operator shall not practise bribery using money, valuables or other means to sell or buy goods. Where an operator secretly pays a kickback to the other party, be it an entity or individual, off the book, it or he shall be punished for offering a bribe; where the other party, be it an entity or individual, secretly accepts a kickback off the book, it or he shall be punished for taking a bribe.
In the selling or buying of goods, an operator may express clearly its or his intention to offer a discount to the other party and pay a commission to the middleman. Where an operator gives a discount to the other party and pays a commission to the middleman, it or he must enter the items in the book factually. An operator accepting a discount or commission must enter it in the book factually.

Article 9． An operator may not use advertisement or other means to give false, misleading information on the quality, composition, performance, use, manufacturer, useful life, origin, etc. of the goods.
Advertisement operators may not act as an agent in designing, producing and releasing false advertisements where they clearly know, or should know, that the information in the advertisements is false.

Article 10． An operator may not adopt the following means to infringe on the business secrets of others:
(1) obtaining business secrets from the owners of rights by stealing, promising of gain, resorting to coercion or other illegitimate means;
(2) disclosing, using or allowing others to use business secrets of the owners of rights obtained by the means mentioned in the preceding section;
(3) disclosing, using or allowing others to use business secrets that he has obtained by breaking an engagement or disregarding the requirement of the owners of the rights to preserve the business secrets.
Where a third party obtains, uses or discloses the business secrets of others when it or he has or should have full knowledge of the illegal acts mentioned in the preceding section, it or he shall be deemed to have infringed on the business secrets of others.
Business secrets in this Article refer to technical information and operational information which is not known to the public, which is capable of bringing economic benefits to the owners of the rights, which has practical applicability and which the owners of the rights have taken measures to keep secret.

Article 11． An operator may not sell its or his goods at a price that is below the cost for the purpose of excluding its or his competitors.
In any of the following events, such sales do not come under acts of unfair competition:
(1) selling fresh goods;
(2) disposing of gods the useful life of which is about to expire or other overstocked goods; (3) seasonal lowering of prices;
(4) selling goods at lowered prices for paying off debts, changing the line of production or closing the business.

Article 12． In selling its or his goods, an operator may not make a tie-in sale against the wish of the buyer or attach other unreasonable conditions.

Article 13． An operator may not make the following kinds of sales with prizes attached:
(1) using the fraudulent method of falsely claiming the existence of prizes or intentionally causing previously determined people to win the prizes to make sales with prizes attached;
(2) promoting the sale of inferior but high-priced goods by offering prizes;
(3) making sales with prizes attached in the form of a lottery where the amount for the highest prize exceeds RMB 5,000 yuan.

Article 14． An operator may not utter or disseminate falsehoods to damage the goodwill of a competitor or the reputation of its or his goods.

Article 15． Tenderers may not submit tenders in collusion with one another to force the tender price up or down.
A tenderer may not collaborate with the party inviting tenders to exclude competitors from fair competition.

Chapter 3
control and Inspection

Article 16． The control and inspection authorities above the county level may exercise control over and carry out inspection of acts of unfair competition.

Article 17． In monitoring and investigating acts of unfair competition, the control and inspection authorities are entitled to exercise the following functions and powers:
(1) questioning operators under scrutiny, interested parties and witnesses, and requiring them to provide evidential material or other information related to acts of unfair competition;
(2) consulting and copying written agreements, account books, receipts, bills, vouchers, invoices, documents, records, business correspondence and other material;
(3) inspecting property related to acts of unfair competition as stipulated in Article 5 of this Law and where necessary, order operators under investigation to explain the source and quantity of the goods, temporarily stop selling them pending inspection, and not to remove, conceal or destroy them.

Article 18． When monitoring and investigating acts of unfair competition, members of the control and inspection authorities shall produce warrants of inspection.

Article 19． When the control and inspection authorities are monitoring and investigating acts of unfair competition, the operators under investigation, interested parties and witnesses shall truthfully provide them with relevant data or information.

Chapter 4
Legal Responsibility

Article 20． Where an operator, in contravention of the provisions of this Law, cause damage to another operator, i.e., the injured party, it or he shall bear the responsibility for compensating for the damages. Where the losses suffered by the injured operator are difficult to calculate, the amount of damages shall be the profit gained by the infringer during the period of infringement through the infringing act. The infringer shall also bear all reasonable costs paid by the injured operator in investigating the acts of unfair competition committed by the operator suspected of infringing its or his lawful rights and interests.
When the lawful rights and interests of the injured operator are damaged by the acts of unfair competition, it or he may institute proceedings in the People's Court.

Article 21． Where an operator passes off the registered trademark of another person, uses the enterprise name or personal name of another person without authorization, counterfeits or fraudulently uses symbols of quality such as symbols of authentication and symbols of famous and high-quality goods, falsifies the origin of the goods and makes false representations which are misleading as to the quality of the goods, it or he shall be punished in accordance with the provisions of the Product Quality Law of the P.R.C.
Where an operator uses, without authorization, the names, packaging or decoration peculiar to well-known goods or uses names, packaging or decoration similar to those of well-known goods so that its or his goods are confused with the well-known goods of others, causing buyers to mistake them for the well-known goods, the relevant control and inspection authority shall order it or him to stop the offence, confiscate the illegal income, and may impose, according to circumstances, a fine of more than twice and less than three times the amount of illegal income; where the circumstances are serious, the said authority may revoke its or his business licence; where an operator sells goods which are counterfeit or of inferior quality, constituting a crime, it or he shall be prosecuted according to law for its or his criminal liability.

Article 22． Where an operator practises bribery using money, valuables or other means to sell or buy goods, constituting a crime, it or he shall be prosecuted according to law for its or his criminal liability; where the act does not constitute a crime, the relevant control and inspection department may according to circumstances, impose a fine of more than RMB 10,000 yuan and less than RMB 200,000 yuan. Its or his illegal income, if any, shall be confiscated.

Article 23． Where public utility enterprises or other operators having monopolistic status according to law force others to buy the goods of operators designated by them so as to prevent other operators from competing fairly, the control and inspection authorities at the level of provinces or municipalities which are divided into districts shall order them to desist from the illegal acts and may punish them by imposing, according to circumstances, fines of more than RMB 50,000 yuan and less than RMB 200,000 yuan. Where the designated operators take advantage of the illegal arrangement to foist inferior but high-priced goods on buyers or make exorbitant charges, the control and inspection authorities shall confiscate the illegal income and may, according to circumstances, impose fines of more than twice and less than three times the illegal income.

Article 24． Where an operator uses advertisement or other means to give false, misleading information on its or his goods, the relevant control and inspection authority shall order it or him to desist from the illegal act, dispel the bad influence, and may, according to circumstances, impose a fine of more than RMB 10,000 yuan and less than RMB 200,000 yuan.
Where an advertisement operator acts as an agent in designing, producing and releasing false advertisements when it or he clearly knows, or should know, that they are false, the relevant control and inspection authority shall order it or him to desist from the illegal act, confiscate its or his illegal income, and impose a fine on it or him according to law.

Article 25． Where any party infringes the business secret of another person in contravention of the provisions of Article 10 of this Law, the relevant control and inspection authority shall order it or him to desist from the illegal act and may, according to circumstances, impose on it or him a fine of more than RMB 10,000 yuan and less than RMB 200,000 yuan.

Article 26． Where an operator makes sales with prizes attached in contravention of the provisions of Article 13 of this Law, the relevant control and inspection authority shall order it or him to desist from the illegal act and may, according to circumstances, impose on it or him a fine of more than RMB 10,000 yuan and less than RMB 100,000 yuan.

Article 27． Where tenderers submit tenders in collusion with one another to force the tender price up or down, or where a tenderer collaborates with the party inviting tenders to prevent competitors from competing fairly, its or his successful bid is null and void. The control and inspection authority may, according to circumstances, impose on it or him a fine of more than RMB 10,000 yuan and less than RMB 200,000 yuan.

Article 28． Where an operator commits an act in contravention of an order to temporarily stop selling, and not to remove, conceal or destroy, property related to acts of unfair competition, the relevant control and inspection authority may, according to circumstances, impose on it or him a fine of more than twice and less than three times the price of the property which has been sold, removed, concealed or destroyed.

Article 29． Where a party is not satisfied with the decision on punishment made by the relevant control and inspection authority, it or he may, within fifteen days from the date of receipt of the decision on punishment, apply to the competent authority at the next higher level for reconsideration; where the party is not satisfied with the decision made after reconsideration, it or he may, within fifteen days from the date of receipt of the written decision made after reconsideration, institute proceedings in the People's Court; the party may also directly institute proceedings in the People's Court upon receipt of the decision on punishment.

Article 30． Where a local government and its subordinate departments, in contravention to the provisions of Article 7 of this Law, force others to buy the goods of operators designated by them, restrict the legitimate business activities of other operators, or restrict the normal flow of goods between regions, the higher authorities shall order them to rectify the situation; where the circumstances are serious, the competent authorities at the same level or the next higher level shall take disciplinary action against the persons directly responsible. Where the designated operators, taking advantage of this illegal arrangement, sell foist inferior but high-priced goods on buyers or make exorbitant charges, the control and inspection authorities shall confiscate the illegal income and may, according to circumstances, impose a fine of more than twice and less than three times the illegal income.

Article 31． Where a staff member of the State organ monitoring and investigating acts of unfair competition abuses his powers and neglects his duty, constituting a crime, be shall be prosecuted for his criminal liability according to law; where the act does not constitute a crime, he shall be disciplined administratively.

Article 32． Where a staff member of the State organ monitoring and investigating acts of unfair competition acts irregularly out of personal considerations and intentionally screens an operator from prosecution fully knowing that he has contravened the provisions of this Law, constituting a crime, the said staff member shall be prosecuted for his criminal liability according to law.

Chapter 5
Supplementary Provision

Article 33． This Law shall enter into force on 1 December 1993.

13.Regulations of the People's Republic of China on Technology Import
and Export Administration
(Adopted at the 46th Executive Meeting of the State Council on 31 October 2001 and Entering into Force on 1 January 2002)

Chapter I
General Provisions

Article 1． These Regulations are hereby formulated in accordance with the Law of the People's Republic of China on Foreign Trade (hereinafter referred to as the Foreign Trade Law) and relevant provisions of other relevant laws with a view to regulating the administration of technology import and export, maintaining the order of technology import and export, and enhancing the national economic growth and social development.

Article 2． The technology import and export as referred to in these Regulations means acts of transferring technology from outside the territory of the People's Republic of China into the territory of the People's Republic of China or visa versa by way of trade, investment, or economic and technical cooperation.
The acts mentioned in the preceding paragraph include assignment of the patent right, assignment of the patent application right, licensing for patent exploitation, assignment of technical secrets, technical services and transfer of technology by other means.

Article 3． The State adopts a uniform system for the administration of technology import and export, and maintains the order for fair and free technology import and export according to law.

Article 4． Import and export of technology shall be conducted in compliance with the national policy of industry, the policy of science and technology, and the policy for social development, and shall be conducive to promoting the scientific and technologic progress in China, enhancing the development of foreign economic and technical cooperation, and safeguarding the economic and technical rights and interests of the country.

Article 5． China permits free technology import and export, except that the laws and administrative regulations have otherwise provided for.

Article 6． The competent department of foreign trade and economic cooperation under the State Council (hereinafter referred to as the competent foreign trade department under the State Council) is responsible for the national administration of technology import and export in accordance with the provisions of the Foreign Trade Law and these Regulations. The competent foreign trade departments under the People's Governments of the Provinces, Autonomous Regions and Municipalities under the Central Government shall, according to the authorisation by the competent foreign trade department under the State Council, be responsible for the administration of technology import and export in their respective administrative region.
The departments concerned under the State Council shall, according to the regulations by the State Council, perform the relevant functions and responsibilities for the administration of projects of technology import and export.

Chapter II
Administration of Technology Import

Article 7． The State encourages import of advanced and appropriate technology.

Article 8． Import of any technology falling into the provisions of Articles 16 or 17 of the Foreign Trade Law shall be prohibited or restricted.
The competent foreign trade department under the State Council shall, in conjunction with other relevant departments under the State Council, formulate, regulate and publish catalogues of technologies the import of which is prohibited or restricted.

Article 9． Technologies prohibited from import shall not be imported.

Article 10． Technologies restricted from import shall be subject to the license administration; any technology for which no license is granted shall not be imported.

Article 11． In respect of import of a technology restricted from import, an application for technology import, together with relevant documents, shall be filed with the competent foreign trade department under the State Council.
Where a project of technology import needs to be approved by the relevant department, the documents of approval thereby shall also be submitted.

Article 12． The competent foreign trade department under the State Council, upon receipt of an application for technology import, shall conduct an examination, in conjunction with relevant departments under the State Council, of the application, and make a decision on approval or disapproval within thirty working days from the date of receipt of the application.

Article 13． Where an application for technology import is approved, the competent foreign trade department under the State Council shall issue an letter of intent for licensing the technology import.
After being granted the letter of intent for licensing the technology import, an import operator may sign a contract for technology import with its overseas counterpart.

Article 14． After signing a contract for technology import, an import operator shall submit to the competent foreign trade department under the State Council a copy of the contract for technology import and relevant documents to apply for the technology import license.
The competent foreign trade department under the State Council examines the authenticity of the contract for technology import, and makes a decision, within ten working days from the date of receipt of the documents provided for in the preceding provision, on the approval or disapproval of the technology import.

Article 15． An applicant, when applying to the competent foreign trade department under the State Council according to the provision of Article 11 of these Regulations for technology import, may submit a copy of the technology import contract concluded.
The competent foreign trade department under the State Council shall, according to the provisions of Articles 12 and 14 of these Regulations, examine the authenticity of the application and the technology import contract, and decide, within forty working days from the date of receipt of the documents provided for in the preceding provision, on the approval or disapproval of the technology import.

Article 16． Where the import of a technology is approved, the competent foreign trade department under the State Council issues the technology import license. The contract for technology import takes effect on the date of issuance of the technology import license.

Article 17． Technologies freely importable shall be subject to the contract registration system.
A contract for importing a freely importable technology takes effect from the time when the contract is established according to law, without taking the registration thereof as a condition for the contract to be effective.

Article 18． When a freely importable technology is to be imported, registration shall be made with the competent foreign trade department under the State Council, and the following documents submitted:
(1) an application for registration of the technology import contract;
(2) a copy of the technology import contract; and
(3) any regulatory document certifying the legal status of the two parties to the contract.

Article 19． The competent foreign trade department under the State Council shall register the technology import contract and issue the certificate of registration of the technology import contract within three working days from the date of receipt of the documents provided for in Article 18 of these Regulations.

Article 20． Applicants shall use the technology import license or certificate of registration of technology import contract to go through the foreign exchange, banking, taxation and customs formalities.

Article 21． Where a technology import contract licensed or registered according to the provisions of these Regulations is changed in terms of the main contents thereof, the formalities shall be gone through once again for the license or registration thereof.
Any licensed or registered technology import contract which has terminated shall be submitted with the competent foreign trade department under the State Council for filing.

Article 22． Where an enterprise with foreign investment is set up in which the foreign party puts in a technology as its investment, the import of the technology shall be examined or registered in accordance with the procedure for examination and approval of the establishment of the enterprise with foreign investment.

Article 23． The competent foreign trade department under the State Council, other relevant departments and the employees thereof shall be under the obligation to keep confidential any trade secret they get to know when performing their functions and duties of technology import and export administration.

Article 24． The technology supplying party to a technology import contract shall ensure that he or it is the legitimate owner of the technology supplied or one who has the right to assign or license the technology.
Where the receiving party to a technology import contract is accused of infringement by a third party for using the technology supplied by the supplying party under the contract, the former shall immediately notify the latter; the latter, upon receipt of the notification, shall assist the former in removing the impediment.
Where the receiving party to a technology import contract infringes another person's lawful rights and interests by using the technology supplied by the supplying party, the supplying party shall bear the liability therefor.

Article 25． The supplying party to an technology import contract shall ensure the technology it supplies is complete, accurate, effective and capable of achieving the agreed technical object.

Article 26． The receiving and supplying parties to a technology import contract shall be under the obligation to keep confidential the undisclosed part of the technology the supplying party has supplied within the scope of confidentiality and time limit thereof as agreed in the contract.
Within the time of confidentiality, the obligation of one party to confidentiality shall terminate immediately after the confidential technology is disclosed for reasons not of his or its own.

Article 27． Within the term of validity of a contract for technology import, an achievement made in improving the technology concerned belongs to the party making the improvement.

Article 28． After a technology import contract expires, the technology supplying and receiving parties thereto may negotiate on the continued use of the technology according to the principle of justice and equity.

Article 29． A technology import contract shall not contain any of the following restrictive clauses:
(1) requiring the receiving party to accept any additional condition unnecessary for the technology import, including buying any unnecessary technology, raw material, product, equipment or service;
(2) requiring the receiving party to pay exploitation fee for a technology when the term of validity of the patent right in which has expired or the patent right of which has been invalidated, or to undertake other relevant obligations;
(3) restricting the receiving party from improving the technology supplied by the supplying party, or restricting the receiving party from using the improved technology;
(4) restricting the receiving party from obtaining technology similar to that supplied by the supplying party from other sources or from obtaining a competing technology;
(5) unduly restricting the receiving party from purchasing raw material, parts and components, products or equipment from other channels or sources;
(6) unduly restricting the quantity, variety, or sales price of the products the receiving party produces; or
(7) unduly restricting the receiving party from utilising the channel for exporting products manufactured using the imported technology.

Chapter III
Administration of Technology Export

Article 30． The State encourages exporting well-developed industrialised technology.

Article 31． Any technology that falls under any of the provisions of Articles 16 or 17 of the Foreign Trade Law is prohibited or restricted from export. The competent foreign trade department under the State Council shall, in conjunction with other relevant departments under the State Council, formulate, regulate and publish catalogues of technologies which are prohibited or restricted from export.

Article 32． Technology prohibited from export shall not be exported.

Article 33． Technology restricted from export shall be subject to license administration; and shall not be exported without a license.

Article 34． To export any technology restricted from export, an application shall be filed with the competent foreign trade department under the State Council.

Article 35． The competent foreign trade department under the State Council shall, after receipt of a technology export application, examine the technology in respect of which application for export is filed in conjunction with the science and technology administrative department under the State Council, and decide on approval or disapproval within thirty working days from the date of receipt of the application.
Where a technology restricted from export requires confidential examination by the relevant department, the relevant regulations of the State shall be complied with.

Article 36． Where an application for technology export is approved, the competent foreign trade department under the State Council shall issue a letter of intent for licensing the technology export. After obtaining the letter of intent for licensing the technology export, the applicant may begin substantive negotiation, and conclude a contract for the technology export.

Article 37． After concluding a technology export contract, the applicant shall submit to the competent foreign trade department under the State Council the following documents in applying for a license for the exporting technology:
(1) a letter of intent for licensing the technology export;
(2) a copy of the technology export contract;
(3) a list of technical information relating to the export; and
(4) any regulatory document certifying the legal status of the two parties to the contract.
The competent foreign trade department under the State Council examines the authenticity of the technology export contract, and decides, within fifteen working days from the date of receipt of the documents provided for in the preceding provision, on approval or disapproval of the technology export.

Article 38． Where a technology is licensed for export, the competent foreign trade department under the State Council issues the technology export license. The contract for technology export takes effect on the date of issuance of the technology export license.

Article 39． Freely exportable technology shall be subject to the contract registration administration.
A Contracts for exporting a technology takes effect from the time when the contract is established according to law without taking the registration thereof as a condition for the contract to be effective.

Article 40． When a freely exportable technology is to be imported, registration shall be made with the competent foreign trade department under the State Council, and the following documents submitted:
(1) an application for registration of the technology export contract;
(2) a copy of the technology export contract; and
(3) any regulatory document certifying the legal status of the contracting parties.

Article 41． The competent foreign trade department under the State Council shall, within three working days from the date of receipt of the documents provided for in Article 40 of these Regulations, register the technology export contract, and issue the certificate of the registration of technology export.

Article 42． Applicants shall use the technology export license or certificate of registration of the technology import contract to go through the foreign exchange, banking, taxation and customs formalities.

Article 43． Where a technology import contract licensed or registered according to the provisions of these Regulations is changed in terms of the main contents thereof, the formalities shall be gone through once again for the license or registration thereof.Any licensed or registered technology export contract which has terminated shall be submitted to the competent foreign trade department under the State Council for filing.

Article 44． The competent foreign trade department under the State Council, other relevant departments and the employees thereof shall be under the obligation to keep confidential the trade secret they get to know when performing their functions and duties of technology import and export administration.

Article 45． Exporting a nuclear technology, a relevant technology of nuclear products for both military and civil purposes, a technology for supervising or monitoring the manufacture of chemicals, a technology for military purposes, or any other technology under export control shall be conducted pursuant to the relevant administrative laws and regulations.

Chapter IV
Legal Liabilities

Article 46． Where a technology prohibited or restricted from import and export is imported or exported without approval shall be prosecuted for criminal liability according to the provisions for the crimes of smuggling, illegal business operation, or divulging national secrets or other crimes under the Criminal Law. Where such import or export is not so serious as to be prosecuted for criminal liability, penalty shall be imposed according to the circumstances pursuant to the relevant provisions of the Customs Law, or the competent foreign trade department under the State Council issues a warning against it, confiscates illegal income and/or imposes a fine one to five times the illegal income. The competent foreign trade department under the State Council may revoke the foreign trade business license.

Article 47． Any act of importing or exporting technology restricted from import or export by exceeding the scope of business licensed shall be prosecuted for criminal liability according to the provisions for the crime of illegal business operation, or other crimes under the Criminal Law. Where the act of import or export is not so serious as to be prosecuted for criminal liability, penalty shall be imposed according to the circumstances pursuant to the relevant provisions of the Customs Law, or the competent foreign trade department under the State Council issues a warning against it, confiscates illegal income and/or imposes a fine one to three times the illegal income. The competent foreign trade department under the State Council may suspend, and even revoke, the foreign trade business license.

Article 48． Any act of forging, mutilating, selling or buying technology import and export licenses or certificates of registration of contract for technology import and export shall be prosecuted for criminal liability according to the provisions for the crime of illegal business operation, or for the crimes of forging, mutilating, selling or buying official documents, certificates, and seals of State authority under the Criminal Law. Where the act of import or export is not so serious as to be prosecuted for criminal liability, penalty shall be imposed according to the circumstances pursuant to the relevant provisions of the Customs Law. The competent foreign trade department under the State Council may revoke the foreign trade business license.

Article 49． Where a technology import and export license is acquired by fraudulent or any other illegal means, the competent foreign trade department under the State Council shall cancel the technology import and export license, and suspend and even revoke the business license for foreign trade.

Article 50． Where a contract for technology import and export is registered by fraudulent or any other illegal means, the competent foreign trade department under the State Council shall cancel the certificate of registration of contract for technology import and export, and suspend and even revoke business license for foreign trade.

Article 51． Any employee of technology import and export administration acts in violation of the provisions of these Regulations, divulges any State secret or trade secret known to him shall be prosecuted for criminal liability according to the provisions for the crime of divulging State secret or infringing trade secret under the Criminal Law. Where the act is not so serious as to be prosecuted for criminal liability, he shall be imposed the administrative penalty according to law.

Article 52． Any employee of technology import and export administration who abuses his official power, ignores his duty, or takes advantage of his official position to seek or seize financial and property gains from others shall be prosecuted for criminal liability according to the provisions for the crime of abusing official power, ignoring duty, taking bribe, or any other crime under the Criminal Law. Where the act is not so serious as to be prosecuted for criminal liability, he shall be imposed the administrative penalty according to law.

Chapter V
Supplementary Provisions

Article 53． Any one who is dissatisfied with a decision made by the competent foreign trade department under the State Council on a matter of approval, license, registration of, or administrative penalty in respect to, technology import and export may apply for administrative reconsideration, or institute legal proceedings in the People's Court according to law.

Article 54． Where the provisions of the regulations on technology import and export formulated by the State Council before the issuance of these Regulations and those of these Regulations are not consistent, these Regulations prevail.

Article 55． These Regulations enter into force on 1 January 2002. The Regulations of the People's Republic of China on Administration of Technology Introduction Contracts issued by the State Council on 24 May 1985 and the Implementing Regulations of the Regulations of the People's Republic of China on Administration of Technology Introduction Contracts approved by the State Council on 30 December 1987 and issued by the Ministry of Foreign Trade and Economic Cooperation on 20 January 1988 are simultaneously abrogated.

14.The Contract Law of the People's Republic of China (1999)

　
Chapter I
General Principles

Article 1． This Law is enacted to protect the lawful rights and interests of the contracting parties, to maintain social and economic order and to promote socialist modernization.

Article 2． A contract referred to in this Law is an agreement among natural persons, legal persons and/or other organizations as equal parties for the establishment, modification or termination of a relationship involving the civil rights and obligations of such entities.
Agreements with respect to personal relationships such as marriage, adoption, guardianship, etc., shall be governed by the provisions in other laws.

Article 3． The parties to a contract shall have equal legal status, and no party shall impose its own will upon the other party.

Article 4． The parties have the right to lawfully enter into a contract of their own free will, and no entity or individual shall unlawfully interfere therewith.

Article 5． In defining their respective rights and obligations, the parties shall adhere to the principle of fairness.

Article 6． In exercising their rights and performing their obligations, the parties shall observe the principles of honesty and good faith.

Article 7． In forming and performing a contract, the parties shall comply with the laws and administrative regulations, respect social morals, and shall not disrupt the social and economic order or impair the social and public interests.

Article 8． A contract formed under the law shall be legally binding on the parties thereto, each of whom shall perform its own obligations as agreed, and no party shall unilaterally alter or rescind the contract.
A contract lawfully formed shall receive protection under the law.

Chapter II
Contract Formation

Article 9． In forming a contract, the parties shall possess the appropriate capacities for civil rights and civil acts.
A party may lawfully authorize an agent to enter into a contract on its behalf.

Article 10． In forming a contract, the parties may use written, oral or other forms.
Where the laws and administrative regulations so provide, a written form shall be adopted. Where the parties so agree, a written form shall be adopted.

Article 11． "Written form" means a form such as a written contractual instrument, letter, electronic data text (including a telegram, telex, facsimile, electronic data exchange and electronic mail) that can tangibly express the contents contained therein.

Article 12． The contents of a contract are to be agreed by the parties. Such contents generally include the following:
(1) name and domicile of each party;
(2) subject matter;
(3) quantity;
(4) quality;
(5) price or remuneration;
(6) specified time, place and manner of performance;
(7) liability for breach of contract; and
(8) method of dispute resolution.
In forming a contract, the parties may refer to texts of various model contracts.

Article 13． In forming a contract, the parties shall adopt the method of offer and acceptance.

Article 14． An offer is the expression of an intent to enter into a contract with another person. Such expression of intent shall conform to the following:
(1) the contents are specific and definite; and
(2) it is clearly expressed that once the offeree accepts, such expression of intent shall be binding upon the offeror.

Article 15． An invitation to offer is an expression of intent by a person to have another person tender an offer to him or her. Price lists that are mailed or delivered, public announcements of auctions, public announcements of invitations to tender a bid, stock offering prospectuses, commercial advertisements, etc., are invitations to offer.
Where the contents of a commercial advertisement conform to the provisions concerning offers, such advertisement shall be deemed to be an offer.

Article 16． An offer shall become effective once it reaches the offeree.
If a contract is concluded in the form of electronic data text and the addressee designates a particular system through which to receive the electronic data text, the time it enters the particular system shall be deemed the arrival time. If no particular system is designated, the time the electronic data text first enters any system of the addressee shall be deemed the arrival time.

Article 17． An offer may be withdrawn. The notification of withdrawal of the offer must reach the offeree prior to or at the same time the offer reaches the offeree.

Article 18． An offer may be revoked. The notification of the revocation of the offer must reach the offeree prior to the dispatch of the notification of acceptance by the offeree.

Article 19． An offer shall not be revoked under any of the following circumstances:
(1) the offeror specifies a time limit for acceptance or clearly indicates in another manner that the offer is irrevocable; or
(2) the offeree has grounds to believe that the offer is irrevocable and has already carried out preparatory work for the performance of the contract.

Article 20． An offer shall become void if:
(1) the notification of the rejection of the offer reaches the offeror;
(2) the offeror revokes the offer in accordance with the law;
(3) the offeree fails to accept the offer before the expiration of the time limit for acceptance; or
(4) the offeree makes a material alteration to the contents of the offer.

Article 21． An acceptance is the expression of an intent by the offeree to assent to the offer.

Article 22． An acceptance shall be given in the form of a notice, except where acceptance may be given by an act on the basis of customary business practice or as expressed in the offer.

Article 23． The acceptance shall reach the offeror within the time specified in the offer.
Where the offer does not specify a time limit for acceptance, the arrival of the acceptance shall be determined in accordance with the following provisions:
(1) unless otherwise agreed by the parties, if the offer is made verbally, the acceptance shall be made immediately;
(2) if the offer is not made verbally, the acceptance shall arrive within a reasonable period.

Article 24． If an offer is made by letter or telegram, the time limit for acceptance shall accrue from the date indicated on the letter or from the date the telegram is submitted for transmission. If the letter is not dated, the time limit for acceptance shall accrue from the postmark date on the letter. When the offer is made using a rapid form of communication such as the telephone or facsimile, the time limit for acceptance shall accrue from the time the offer reaches the offeree.

Article 25． A contract is concluded when the acceptance becomes effective.

Article 26． A notice of acceptance shall become effective once it reaches the offeror. Where notice of acceptance is not required, the acceptance shall become effective upon the act of acceptance based on customary business practice or the requirements in the offer.
If electronic data text is used to form the contract, the provisions in Article 16, Section 2 of this Law shall apply as to the time of arrival of the acceptance.

Article 27． An acceptance may be withdrawn. The notice of withdrawal of acceptance shall reach the offeror prior to or at the same time the notice of acceptance reaches the offeror.

Article 28． If the offeree dispatches the acceptance after the time limit for acceptance has expired, such acceptance shall constitute a new offer, unless the offeror notifies the offeree in a timely manner that the acceptance is valid.

Article 29． If the offeree dispatches its acceptance within the time specified for acceptance, and under normal circumstances the acceptance would have reached the offeror in time, but due to other reasons the acceptance reaches the offeror after the time limit for acceptance has expired, such acceptance shall be valid, unless the offeror notifies the offeree in a timely manner that it does not accept the acceptance due to the failure of the acceptance to arrive within the time limit.

Article 30． The contents of the acceptance shall be identical to the contents of the offer. A material alteration made by the offeree to the contents of the offer shall constitute a new offer. Alterations such as those concerning the subject matter, quantity, quality, price or remuneration, specified time of performance, place and manner of performance, liability for breach, dispute resolution, etc., under the contract are material alterations to the contents of an offer.

Article 31． Unless the offeror objects to the alteration to the offer in a timely manner or the offer clearly indicates that the acceptance shall not make any alterations to the contents of the offer, an acceptance that contains a non-material alteration to the contents of the offer shall be valid, and the contents of the contract shall be based upon the contents of the acceptance.

Article 32． Where the parties form a contract using a written contract, the contract is concluded at the time both parties sign the contract or affix their seals thereon.

Article 33． In forming a contract using a letter or electronic data text, etc., the parties may, prior to the conclusion of the contract, require the signing of a written confirmation. The contract is concluded at the time of the signing of the written confirmation.

Article 34． The place of the conclusion of the contract is the place where the acceptance becomes effective.
If the contract is formed using electronic data text, the place of the conclusion of the contract is the principal place of business of the addressee. In the absence of a principal place of business, the place of the conclusion of the contract is the addressee's usual residence. If the parties agree otherwise, such agreement shall apply.

Article 35． If the parties form a contract using a contractual instrument, the place of the conclusion of the contract is the place where the parties sign or affix their seals on the contract.

Article 36． Where the laws or administrative regulations provide that the contract be in written form or where the parties agree to form a contract in written form, and the parties fail to use a written form, but one party has already performed its principal obligations which have been accepted by the other party, the contract is concluded.

Article 37． If the contract is formed using a written contractual instrument, and prior to the signing of, or affixing of seals to, the contract, one party has already performed its principal obligations which have been accepted by the other party, such contract is concluded.

Article 38． If the State, based on its needs, issues a mandatory assignment or an assignment with respect to an order for goods for the State, the relevant legal persons and/or the other organizations shall enter into a contract on the basis of the rights and obligations prescribed in the relevant laws and administrative regulations.

Article 39． Where a contract is formed using standardized clauses, the party that provides the standardized clauses shall, adhering to the principle of fairness, define the rights and obligations of the parties and shall, in a reasonable manner, bring to the attention of the other party any clause that releases or limits such party's liability. Upon request by the other party, the party providing the standardized clauses shall give an explanation of such clauses.
A standardized clause is a clause that is drafted in advance by a party for repeated use and one that is not discussed with the other party at the time of the formation of the contract.

Article 40． A standardized clause is invalid if its contents fall under the provisions in Article 52 and Article 53 of this Law, or the party providing the standardized clause releases its own liabilities, increases the liabilities of the other party, or excludes a primary right of the other party.

Article 41． If a dispute arises over the understanding of a standardized clause, the interpretation rendered shall be pursuant to the common understanding of such clause. If two or more different interpretations of a standardized clause exist, the standardized clause shall be construed against the party that provides the standardized clause. If a standardized clause and a non-standardized clause are inconsistent, the non-standardized clause shall be used.

Article 42． If a party engages in any of the following during the course of the formation of a contract, thereby causing damages to the other party, such party shall be liable for damages:
(1) bad faith negotiations under the pretext of forming a contract;
(2) intentional concealment of important facts related to the formation of the contract or the provision of false information; or
(3) other acts that violate the principles of honesty and good faith.

Article 43． A trade secret that becomes known to a party during the course of the formation of a contract shall not be disclosed or improperly used whether or not the contract is concluded. If such trade secret is disclosed or improperly used, causing damages to the other party, the party that discloses or improperly uses the trade secret shall be liable for damages.

Chapter III
Contract Validity

Article 44． A contract that is lawfully concluded shall become effective at the time of its conclusion.
If the laws and administrative regulations provide that approval and registration procedures shall be carried out for a contract to become effective, such laws and regulations shall govern.

Article 45． The parties may agree that the validity of a contract be subject to certain conditions. A contract whose effectiveness is subject to certain conditions shall become effective upon the satisfaction of such conditions. A contract whose rescission is subject to certain conditions shall cease to be effective upon the satisfaction of such conditions.
If a party improperly prevents the satisfaction of a condition for its own benefit, the condition shall be deemed to have been satisfied. If a party improperly facilitates the satisfaction of a condition, the condition shall be deemed not to have been satisfied.

Article 46． The parties may agree on fixing a specific term for the validity of the contract. A contract that fixes a specific time for the contract to become effective shall become effective at such time. A contract that fixes a specific time for the termination of the contract shall cease to be effective at such time.

Article 47． A contract entered into by a person with a limited capacity for civil acts shall be valid upon ratification by his or her statutory representative. However, where the contract is purely for the procurement of benefit, or is formed in such a way as to correspond to the age, intellectual capacity or mental health status of such person, such contract need not be ratified by the statutory representative.
The opposite party may demand the statutory representative to ratify the contract within one month. The failure of the statutory representative to respond shall be deemed a refusal to ratify. Prior to the ratification of the contract, the opposite party in good faith shall have the right to rescind the contract. Such rescission shall be made by way of notice.

Article 48． If a person enters into a contract using the name of another, but the person performing such act lacks the authority to act as agent, or exceeds the scope of such authority, or such authority has terminated, such contract, in the absence of ratification by the person whose name is used, has no effect as to such person, and the person performing such act shall bear liability.
The opposite party may demand the person whose name is used to ratify the contract within one month. The failure of such person to respond shall be deemed a refusal to ratify. Prior to the ratification of the contract, the opposite party in good faith shall have the right to rescind the contract. Such rescission shall be made by way of notice.

Article 49． If a person enters into a contract using the name of another, but the person performing such act lacks the authority to act as agent, or exceeds the scope of such authority, or the agency has terminated, and the opposite party has grounds to believe that the agent has such agency rights, the act of agency shall be valid.

Article 50． If a legal representative or person in charge of a legal person or other organizations enters into a contract beyond the scope of his or her authority, the act of representation shall be valid unless the opposite party knows or should have known that the scope of authority has been exceeded.

Article 51． A contract under which a person without the right of disposition disposes of the property of another person shall be valid upon ratification by the person with such right or upon the acquisition of such right by the person without such right subsequent to the formation of the contract.

Article 52． A contract shall be void if:
(1) a party enters into a contract by fraudulent or coercive means, thereby impairing the interests of the State;
(2) there is a malicious collusion to impair the interests of the State, a collective or a third party;
(3) it conceals an illegal purpose by using legal means;
(4) it impairs social and public interests; or
(5) it violates a mandatory provision in the laws or administrative regulations.

Article 53． The following exculpatory clauses in a contract shall be invalid:
(1) one which results in bodily injury to the other party; and
(2) one which intentionally or through gross negligence results in the loss of, or damage to, property of the other party.

Article 54． A party shall have the right to petition the People's Court or an arbitration institution to alter or nullify a contract if:
(1) it is formed as a result of a major misunderstanding; or
(2) it is manifestly unfair at the time of the formation of the contract.
If a party by fraud or duress, or by taking advantage of the other party's plight causes the other party to enter into a contract under circumstances that are contrary to the true intent of such party, the injured party has the right to petition the People's Court or an arbitration institution to alter or nullify the contract.
If a party requests an alteration to the contract, the People's Court or the arbitration institution shall not nullify the contract.

Article 55． The right to nullify shall lapse under the following circumstances:
(1) a party with the right to nullify fails to exercise such right within one year from the date the party knows or should have known of the matter giving rise to the right to nullify; or
(2) a party with the right to nullify waives such right by clear expression or through its conduct, after knowing of the reason for the nullification.

Article 56． A contract that is invalid or nullified shall have no legally binding effect ab initio. If a contract is partially invalid and such partial invalidity does not affect the validity of the other parts of the contract, the other portions shall remain valid.

Article 57． The invalidity, nullification, or termination of a contract shall not affect the validity of any independently existing contractual provision related to the manner of dispute resolution.

Article 58． If a contract is invalid or is nullified, the property that was acquired as a result of such contract shall be returned. If it is impossible or unnecessary to return such property, monetary compensation shall be paid based on the value of the property. The party at fault shall compensate the other party for the damages incurred. If both parties are at fault, each party shall bear its respective liability.

Article 59． If property is acquired by way of a malicious collusion by the parties to impair the interests of the State, a collective or a third party, the property so acquired shall be recovered by the State or returned to the collective or third party.

Chapter IV
Contract Performance

Article 60． Each party shall fully perform its own obligations as agreed.
Each party shall observe the principles of honesty and good faith and perform the obligations of notification, assistance, confidentiality, etc. in accordance with the nature and purpose of the contract and customary business practice.

Article 61． After the contract becomes effective, in the absence of an agreement on such contents as quality, price or remuneration, place of performance, etc., or if the agreement on such contents is ambiguous, the parties may supplement such contents by agreement. In the event that a supplemental agreement cannot be reached, a determination shall be made according to the relevant provisions in the contract or the customary business practice.

Article 62． If certain contents agreed by the parties in the contract are ambiguous and cannot be determined pursuant to the provisions in Article 61 of this Law, the following provisions shall apply:
(1) If the quality requirements are ambiguous, performance shall be rendered in accordance with the national standard or industry standard; if neither a national standard nor an industry standard exists, performance shall be rendered in accordance with the customary standard or specific standard set in conformance with the purpose of the contract;
(2) If the price or remuneration is ambiguous, payment shall be made in accordance with the prevailing market price at the place of performance at the time the contract is formed; if the price is fixed or guided by the government, payment shall be made in accordance with the regulations thereof;
(3) If the place of performance is ambiguous, the place of performance shall be at the location of the recipient of the currency where currency is to be tendered; at the location of the real property where real property is to be delivered; and for other subject matter, at the location of the party who is to perform the obligation;
(4) If the time limit for performance is ambiguous, the obligor may perform at any time, and the obligee may also demand performance at any time, provided that necessary preparatory time is given to the other party;
(5) If the manner of performance is ambiguous, performance shall be rendered in a manner conducive to achieving the purpose of the contract; and
(6) If the responsibility for the cost of performance is ambiguous, such cost shall be borne by the party who performs the obligation.

Article 63． If a governmentally fixed or guided price is used, and the official price is adjusted during the specified term for delivery as provided in the contract, the price shall be the prevailing price at the time the goods are delivered. If delivery of the subject matter is delayed and the price rises, the original price shall be adopted; if the price falls, the new price shall be adopted. If a party takes delivery of the subject matter after the specified time limit, or payment is made after the due date and the price rises, the new price shall be adopted; if the price falls, the original price shall be adopted.

Article 64． If the parties agree that the obligor shall perform its obligations towards a third party, and the obligor fails to perform its obligations towards such third party or its performance of the obligations is not in conformance with the agreement, the obligor shall be liable to the obligee for breach.

Article 65． If the parties agree that a third party shall perform the obligations of the obligor towards the obligee, and the third party fails to perform the obligations of the obligor, or its performance of the obligations of the obligor is not in conformance with the agreement, the obligor shall be liable to the obligee for breach.

Article 66． If the parties have mutual obligations towards one another, and there is no order of priority with respect to the timing of the performance of such obligations, both parties shall perform such obligations concurrently. Each party has the right to reject any demand by the other party for performance prior to the performance by the other party. If the performance of a party's obligations fails to conform to the agreement, the other party has the right to reject such party's demand for corresponding performance.

Article 67． If an order of priority exists with respect to the timing of the performance of the mutual obligations between the parties, and the party who is to perform first fails to perform, the party who is to perform later has the right to reject the other party's demand for performance. If the performance of the obligations of the party who is to perform first is not in conformance with the agreement, the party who is to perform later has the right to reject the other party's demand for corresponding performance.

Article 68． The party who is to perform first may suspend its performance if it has clear evidence which shows that any of the following situations applies to the other party:
(1) a serious deterioration of the business condition;
(2) the transfer of its assets or withdrawal of its capital to evade its obligations;
(3) a loss of its business reputation; or
(4) other situations relating to the loss or possible loss of the obligor's ability to perform its obligations.
A party who suspends its performance without clear evidence in support thereof shall be liable for breach.

Article 69． A party who suspends performance pursuant to the provisions in Article 68 of this Law shall notify the other party in a timely manner. Performance shall resume when the other party provides an appropriate guaranty. After performance is suspended, if the other party fails to restore its ability to perform or provide an appropriate guaranty within a reasonable period, the party who suspends performance may rescind the contract.

Article 70． If the obligee is divided, merged, or has its address changed without notifying the obligor, thereby causing the obligor hardship in the performance of its obligations, the obligor may suspend its performance or escrow the subject matter.

Article 71． The obligee may reject the early performance of the obligor, unless such early performance does not impair the interests of the obligee.
The additional expenses incurred by the obligee due to the obligor's early performance of its obligations shall be borne by the obligor.

Article 72． The obligee may reject the obligor's partial performance of its obligations, unless such partial performance does not impair the interests of the obligee.
The additional expenses incurred by the obligee as a result of obligor's partial performance of its obligations shall be borne by the obligor.

Article 73． If the obligor is remiss in exercising its vested rights, thereby causing damages to the obligee, the obligee may petition the People's Court to grant the obligee the right to exercise, in its own name, the rights of the obligor by way of subrogation, unless such rights are the exclusive rights of the obligor.
The extent to which the subrogation rights can be exercised is limited to the rights of the obligee. The expenses necessary for the obligee to exercise such subrogation rights shall be borne by the obligor.

Article 74． If the obligor waives its vested rights or transfers assets gratuitously, thereby causing damages to the obligee, the obligee may petition the People's Court to nullify the acts of the obligor. If the obligor transfers any of its assets at a manifestly unreasonable low price, thereby causing damages to the obligee, and the transferee is aware of this situation, the obligee may also petition the People's Court to nullify the acts of the obligor.
The extent to which the right to nullify can be exercised is limited to the rights of the obligee. The expenses necessary for the obligee to exercise the right to nullify shall be borne by the obligor.

Article 75． The right to nullify shall be exercised within one year from the date the obligee knows or should have known of the matter for nullification. Such right to nullify shall lapse if the obligee fails to exercise such right within five years from the date of the occurrence of such act.

Article 76． Once a contract becomes effective, a party may not refuse to perform its contractual obligations due to a change in its name, or its legal representative, the person in charge or the person undertaking the performance of the contractual obligations.

Chapter V
Contract Amendments and Assignments

Article 77． Upon reaching a consensus through consultation, the parties may amend the contract.
If the laws and administrative regulations so provide, approval and registration procedures for such amendment shall be carried out in accordance with such laws and regulations.

Article 78． Where an agreement by the parties on the contents of an amendment is ambiguous, the contract shall be presumed as not having been amended.

Article 79． The obligee may assign the rights under a contract, in whole or in part, to a third party, except under the following circumstances:
(1) such rights may not be assigned based on the nature of the contract;
(2) such rights may not be assigned pursuant to the agreement of the parties; or
(3) such rights may not be assigned pursuant to the laws and regulations.

Article 80． In assigning its rights, the obligee shall notify the obligor. Without notice thereof, such assignment will have no effect on the obligor.
A notice by the obligee to assign its rights shall not be revoked, unless such revocation is consented to by the assignee.

Article 81． If the obligee assigns its rights, the assignee acquires the ancillary rights related to the rights of the obligee, unless such ancillary rights are the exclusive rights of the obligee.

Article 82． Upon receipt of the notice of assignment of rights, the obligor may assert against the assignee any defenses it has against the assignor.

Article 83． Upon receipt by the obligor of the notice of assignment of rights, the obligor shall have vested rights against the assignor, and if the rights of the obligor vest prior to or at the same time as the assigned rights, the obligor may claim an offset against the assignee.

Article 84． A delegation of the obligations under the contract, in whole or in part, by the obligor to a third party shall be subject to the consent of the obligee.

Article 85． If the obligor delegates its obligations, the new obligor may exercise any defense that the original obligor had against the obligee.

Article 86． If the obligor delegates its obligations, the new obligor shall assume the ancillary obligations related to the primary obligations of the obligor, unless such ancillary obligations are exclusive to the original obligor.

Article 87． If the laws and administrative regulations so provide, approval and registration procedures shall be carried out for the assignment of rights of the obligee and the delegation of obligations of the obligor in accordance with such laws and regulations.

Article 88． Upon the consent of the other party, a party may transfer its rights together with its obligations under a contract to a third party.

Article 89． Where the rights and obligations are transferred together, the provisions in Article 79, Articles 81 through 83, and Articles 85 through 87 of this Law shall apply.

Article 90． Where a party is merged after the contract has been formed, the legal person or other organization that survives the merger shall exercise the rights and perform the obligations under the contract. Unless otherwise agreed by the obligor and obligee, where a party is divided after the contract has been formed, the legal persons and other organizations that exist after the division shall jointly enjoy the rights and jointly assume the obligations under the contract.

Chapter VI
Termination of Contractual Rights and Obligations

Article 91． The rights and obligations under a contract shall terminate under any of the following circumstances:
(1) the obligations have been fully performed as agreed;
(2) the contract has been rescinded;
(3) the obligations have been mutually offset;
(4) the obligor has escrowed the subject matter in accordance with the law;
(5) the obligee has released the obligor of its obligations;
(6) the rights and obligations have vested in one party; or
(7) other circumstances for termination as set forth in the law or as agreed by the parties.

Article 92． After the termination of the rights and obligations under the contract, the parties shall observe the principles of honesty and good faith and perform the obligations of notification, cooperation, confidentiality, etc., in accordance with customary business practice.

Article 93． Upon reaching a consensus through consultation, the parties may rescind the contract.
The parties may agree upon condition(s) under which either party may rescind the contract. Upon the satisfaction of the condition(s), the party who has the right to rescind may rescind the contract.

Article 94． A party may rescind the contract under any of the following circumstances:
(1) the purpose of the contract is rendered impossible to achieve due to an event of force majeure;
(2) prior to the expiration of the period of performance, the other party expressly states, or indicates through its conduct, that it will not perform its principal obligation;
(3) the other party delays performance of its principal obligation after such performance has been demanded, and fails to perform within a reasonable period;
(4) the other party delays performance of its obligations, or breaches the contract in some other manner, rendering it impossible to achieve the purpose of the contract; or
(5) other circumstances as provided by law.

Article 95． If a party does not exercise the right to rescind prior to the end of the rescission period as prescribed by law or as agreed by the parties, such right shall lapse.
If the period to exercise the right to rescind is not prescribed by law or agreed by the parties, and such right is not exercised within a reasonable period after a demand for the exercise of such right is made on the other party, such right shall lapse.

Article 96． A party demanding rescission in accordance with Article 93, Section 2 and Article 94 of this Law shall notify the other party. The contract shall be rescinded upon receipt of the notice by the other party. If the other party objects to such rescission, it may petition the People's Court or an arbitration institution to adjudicate the validity of the rescission of the contract.
If the laws and administrative regulations so provide, the approval and registration procedures for the rescission of the contract shall be carried out in accordance with such laws and regulations.

Article 97． After the rescission of the contract, performance shall cease if the contract has not been performed; if the contract has been performed, a party may, in accordance with the circumstances of performance or the nature of the contract, demand the other party to restore such party to its original state or adopt other remedial measures, and such party shall have the right to demand compensation for damages.

Article 98． The termination of rights and obligations under a contract shall not affect the validity of clauses that relate to the final settlement of accounts and winding-up.

Article 99． If the parties are liable to one another for obligations that have became due, and if the type and nature of the subject matter of such obligations are the same, any party may offset its own obligations against the obligations of the other party, unless such offset is not allowed pursuant to the laws and regulations or cannot be made given the nature of the contract.
The party who claims such offset shall notify the other party. The notice shall be effective upon receipt by the other party. The offset shall not be subject to any condition or time limit.

Article 100． If the parties have obligations towards one another, and the type and nature of such obligations are different, the obligations may also be offset upon consensus between the parties after consultation.

Article 101． The obligor may escrow the subject matter under any of the following circumstances which render performance of the obligations difficult:
(1) the obligee refuses acceptance without a proper reason;
(2) the whereabouts of the obligee are unknown;
(3) the obligee is deceased and the successor has not been determined, or the obligee has lost civil capacity and a guardian has not been appointed; or
(4) other circumstances as provided for in the laws or regulations.
If the subject matter is not suitable for escrow or the cost of escrow is excessively high, the obligor may auction or sell the subject matter in accordance with the law, and escrow the proceeds therefrom.

Article 102． Unless the whereabouts of the obligee are unknown, the obligor shall notify the obligee, or the successor or guardian of the obligee immediately after the subject matter has been placed in escrow.

Article 103． After the subject matter has been placed in escrow, the risk of destruction, damage to, or loss of, the subject matter shall be borne by the obligee. The obligee shall be entitled to any fruits of the subject matter during the escrow period. Escrow costs shall be borne by the obligee.

Article 104． The obligee may reclaim the escrowed subject matter at any time, except that if the obligee has any outstanding obligations towards the obligor, the escrow institution shall, at the request of the obligor, refuse the obligee's claim of the escrowed subject matter prior to the obligee's performance of its obligations or the obligee's provision of security for its performance.
The right of the obligee to reclaim the escrowed subject matter shall lapse if such right is not exercised within five (5) years from the date the subject matter is placed in escrow, and the escrowed subject matter shall revert to the national treasury after the deduction of the escrow costs.

Article 105． If an obligee releases the obligor of its obligations, in whole or in part, the contractual rights and obligations related thereto shall terminate in whole or in part.

Article 106． If the rights and obligations vest in one person, such rights and obligations under the contract shall terminate, unless they involve the interests of a third party.

Chapter VII
Liability for Breach

Article 107． If one party fails to perform its contractual obligations, or the performance of its contractual obligations fails to conform to the agreement, such party shall continue its performance, take remedial measures or compensate the other party for damages, etc..

Article 108． If one party clearly expresses, or by its conduct clearly indicates, that it will not perform its contractual obligations, the other party may demand that it bear liability for breach of contract prior to the time such performance is due.

Article 109． If one party fails to pay the price or remuneration, the other party may demand that it pay such price or remuneration.

Article 110． If one party fails to perform a non-monetary obligation, or the performance of a non-monetary obligation fails to conform to the agreement, the other party may demand performance, except under the following circumstances:
(1) such performance cannot be rendered, in law or in fact;
(2) the object of the obligation is not suitable for specific performance, or the expenses for performance are excessively high; or
(3) the obligee fails to demand performance within a reasonable period.

Article 111． If the quality does not conform to the agreement, liability for breach should be borne in the manner agreed by the parties. In the absence of an agreement on liability for breach, or if the agreement on liability for breach is ambiguous and cannot be determined pursuant to the provisions in Article 61 of this Law, the injured party may demand, by way of making a reasonable choice based on the nature of the object and the extent of the damages, the other party to repair, replace, re-make, return, or reduce the price or remuneration of the object, etc., as liability for breach of contract.

Article 112． If one party fails to perform its contractual obligations, or the performance of its contractual obligations fails to conform to the agreement, and the other party still suffers from other damages after the performance of the obligations or adoption of remedial measures, such party shall compensate the other party for such damages.

Article 113． If one party fails to performs its contractual obligations, or the performance of the contractual obligations fails to conform to the agreement, causing damages to the other party, the amount of compensation for damages shall be equal to the damages caused by the breach, including the benefit that could have been obtained had the contract been performed; however, the amount of compensation shall not exceed the damages for breach that were foreseeable or should have been foreseeable to the party in breach at the time the contract was formed.
If an operator of the business engages in a fraudulent act while providing goods or services to a consumer, the operator of a business shall bear liability for damages to the consumer pursuant to the provisions of the Law of the People's Republic of China on the Protection of the Rights and Interests of Consumers.

Article 114． The parties may agree that when a party breaches the agreement, it shall, based on the circumstances of the breach, pay the other party liquidated damages in a fixed amount, and may also agree on a method for calculating the amount of compensation for the damages incurred as a result of the breach.
If the amount of the agreed liquidated damages is lower than the damages incurred, a party may petition the People's Court or an arbitration institution to make an increase; if the agreed upon liquidated damages are significantly higher than the damages incurred, a party may petition the People's Court or an arbitration institution to make an appropriate reduction.

Article 115． The parties may, pursuant to the Guaranty Law of the People's Republic of China, agree that one party pay a deposit to the other party as a guaranty for the obligation. After the obligor has performed its obligation, the deposit shall be offset against the price or returned to the other party. If the party who pays the deposit fails to perform the agreed obligations, such party has no right to demand the return of the deposit. If the party who accepts the deposit fails to perform the agreed obligations, such party shall refund twice the value of the deposit.

Article 116． If the parties have agreed upon liquidated damages as well as a deposit, and one party is in breach, the other party may elect to apply either the provision for liquidated damages or the provision for the deposit.

Article 117． Unless otherwise provided by law, if the contract cannot be performed due to an event of force majeure, the responsibilities with respect to performance may be wholly or partially exempted, depending on the effect of the force majeure. If an event of force majeure occurs after a party has delayed its performance, such responsibilities cannot be exempted.
"Force majeure" as referred to in this Law means objective circumstances that cannot be foreseen, avoided or overcome.

Article 118． A party who cannot perform a contract due to an event of force majeure shall notify the other party in a timely manner in order to mitigate the damages that could be caused to the other party, and such party shall, within a reasonable period, provide the other party with evidence of such event of force majeure.

Article 119． After one party breaches a contract, the other party shall take appropriate measures to prevent the damages from increasing. If the other party's failure to take appropriate measures results in additional damages, it cannot demand compensation for the additional damages.
Reasonable costs paid by a party to prevent an increase in damages shall be borne by the party in breach.

Article 120． If both parties breach a contract, each party shall bear its own respective liability.

Article 121． If a party breaches a contract for reasons attributable to a third party, such party shall be liable to the other party for the breach. A dispute between a party and a third party shall be resolved as provided by law or in accordance with the agreement.

Article 122． If an act of breach by a party physically injures or impairs the property interests of the other party, the injured party has the right to choose to demand the other party to bear liability for the breach in accordance with this Law or to assume liability in tort in accordance with other laws.

Chapter VIII
Miscellaneous

Article 123． If other laws provide otherwise with respect to a contract, the provisions therein shall govern.

Article 124． The General Principles of this Law shall apply to contracts that are not expressly provided for in the Specific Provisions of this Law or in other laws; in addition, reference may be made to the provisions in the Specific Provisions or in other laws that most closely relate to such contracts.

Article 125． If a dispute arises between the parties over the interpretation of a provision in the contract, the true meaning of such provision shall be determined according to the terms and phrases used in the contract, the relevant provisions in the contract, the purpose of the contract, customary business practice and the principles of honesty and good faith.
If the contract is formed using two or more language versions, and it is agreed that such versions shall have equal validity, the terms and phrases used in the different versions are presumed to have the same meaning. If an inconsistency exists between the terms or phrases used in the different versions, an interpretation shall be rendered based upon the purpose of the contract.

Article 126． Unless otherwise provided for by law, the parties to a foreign-related contract may select the applicable law for the resolution of disputes under the contract. Where the parties to a foreign-related contract do not make such a selection, the laws of the country to which the contract has the closest contacts shall apply.
Sino-foreign equity joint venture contracts, Sino-foreign cooperative joint venture contracts and Sino-foreign cooperative contracts for the exploration of natural resources that are performed within the boundaries of the People's Republic of China shall be governed by the laws of the People's Republic of China.

Article 127． The industry and commerce administrative departments and other relevant administrative departments in charge shall, within the scope of their respective functions and powers and pursuant to the provisions of the laws and administrative regulations, be responsible for controlling and dealing with illegal activities with respect to contracts used to impair the interests of the State or the interests of the public and society; and if such activities constitute a crime, criminal liability shall be pursued in accordance with the law.

Article 128． The parties may resolve contractual disputes through reconciliation or mediation.
If the parties are unwilling to resolve a dispute through reconciliation or mediation, or if the reconciliation or mediation is unsuccessful, the parties may, on the basis of the arbitration agreement, apply to an arbitration institution for arbitration. The parties to a foreign-related contract may, on the basis of the arbitration agreement, apply to a Chinese arbitration institution or other arbitration institution for arbitration. If the parties have not entered into an agreement with respect to arbitration, or if the arbitration agreement is invalid, the parties may institute legal proceedings in the People's Court. The parties shall comply with any legally valid judgment, arbitration award or mediation agreement; if a party refuses to comply, the other party may petition the People's Court to enforce such judgment, arbitration award or mediation agreement.

Article 129． With respect to a dispute arising from a contract for the international sale of goods or a contract for the import and export of technology, the statute of limitations for instituting an action or applying for arbitration is four years from the date a party knows or should have known of the infringement on such party's rights. As to the statute of limitations for instituting an action or applying for arbitration with respect to a dispute arising from other contracts, the provisions of the relevant laws shall govern.

Chapter IX
Sales Contracts

Article 130． A sales contract is a contract under which the seller transfers the subject matter to the purchaser, and the purchaser pays the price to the seller.

Article 131． The contents of a sales contract may include, in addition to the provisions in Article 12 of this Law, the manner of packaging, the standard and method of inspection, the method for the settlement of accounts as well as the languages versions used and their validity.

Article 132． The subject matter for sale shall be owned by the seller, or the seller shall have the right to dispose of it.
If the transfer of the subject matter is prohibited or restricted by law or administrative regulation, the provisions therein shall govern.

Article 133． Unless otherwise prescribed by law or agreed by the parties, title of the subject matter shall pass upon delivery of the subject matter.

Article 134． The parties may agree in the sales contract that if the purchaser fails to make payment or to perform other obligations, title of the subject matter shall remain with the seller.

Article 135． The seller shall perform the obligations of delivering the subject matter or the documents for taking possession of the subject matter to the purchaser and of transferring title thereto.

Article 136． In addition to the documents for taking possession of the subject matter, the seller shall deliver to the purchaser the relevant documentation and materials in accordance with the agreement or customary business practice.

Article 137． Unless otherwise prescribed by law or agreed by the parties, where the subject matter sold involves intellectual property rights such as computer software, etc., such intellectual property rights related to the subject matter do not belong to the purchaser.

Article 138． The seller shall deliver the subject matter by the agreed time limit. If the time for delivery is agreed upon, the seller may deliver the subject matter at any time within the specified time period.

Article 139． If the parties fail to agree upon the time for delivery of the subject matter or the agreement on the time of delivery is ambiguous, the provisions in Article 61 and Article 62, Section 4 of this Law shall apply.

Article 140． If the subject matter is in the possession of the purchaser prior to the formation of the contract, the contract becomes effective at the time of delivery.

Article 141． The seller shall deliver the subject matter at the agreed place.
If the parties fail to agree upon a place of delivery or the agreement on the place of delivery is ambiguous and cannot be determined pursuant to the provisions in Article 61 of this Law, the following provisions shall apply:
(1) If the subject matter needs to be transported, the seller shall deliver the subject matter to the first carrier for shipment to the purchaser;
(2) If the subject matter does not need to be transported, and both the seller and the purchaser were aware of the location of the subject matter at the time the contract was formed, the seller shall deliver the subject matter to such location; if the seller and purchaser were not aware of the location, the subject matter shall be delivered to the seller's place of business at the time the contract was formed.

Article 142． Unless otherwise prescribed by law or agreed by the parties, the risk of destruction, damage to, and loss of, the subject matter shall be borne by the seller prior to delivery of the subject matter, and borne by the purchaser after delivery of the subject matter.

Article 143． If for reasons attributable to the purchaser, the subject matter cannot be delivered by the agreed time, the purchaser shall bear the risk of destruction, damage to, or loss of, the subject matter from the date it breaches the agreement.

Article 144． Unless otherwise agreed by the parties, where the subject matter is sold by the seller who is to tender it to the carrier for transport, the risk of destruction, damage to, and loss of, the subject matter while in transit shall be borne by the purchaser from the time the contract is formed.

Article 145． If the parties fail to agree upon a place of delivery for the subject matter, or the agreement on the place of delivery is ambiguous, and the subject matter requires transportation pursuant to the provisions in Article 141, Section 2, Subsection 1 of this Law, the risk of destruction, damage to, or loss of, the subject matter after the seller delivers the subject matter to the first carrier shall be borne by the purchaser.

Article 146． If the seller places the subject matter at the place for delivery pursuant to the agreement or the provisions in Article 141, Section 2, Subsection 2 of this Law, and the purchaser, in breach of the agreement, fails to take delivery of the subject matter, the risk of destruction, damage to, or loss of, the subject matter shall be borne by the purchaser from the date the purchaser breaches the agreement.

Article 147． If the seller does not deliver the documentation and materials related to the subject matter as agreed, the passing of the risk of destruction, damage to, and loss of, the subject matter shall not be affected.

Article 148． If the quality of the subject matter fails to conform to the quality requirements, rendering it impossible to achieve the purpose of the contract, the purchaser may refuse to accept the subject matter or may rescind the contract. If the purchaser refuses to accept the subject matter or rescinds the contract, the risk of destruction, damage to, and loss of, the subject matter shall be borne by the seller.

Article 149． If the risk of destruction, damage to, and loss of, the subject matter is borne by the purchaser, the purchaser's right to demand the seller to bear liability for breach of contract due to the seller's failure to perform its obligations in conformance with the agreement shall not be affected.

Article 150． Unless otherwise prescribed by law, the seller shall have an obligation to warrant that no third party shall exercise against the purchaser any rights with respect to the delivered subject matter.

Article 151． If at the time of formation of the contract the purchaser knows or should have known that a third party has rights to the subject matter, the seller shall not assume the obligations prescribed under Article 150 of this Law.

Article 152． If the purchaser has clear evidence that a third party could assert a right to the subject matter, the purchaser may suspend the corresponding payment, unless the seller provides a proper guaranty.

Article 153． The seller shall deliver the subject matter in accordance with the agreed quality requirements. If the seller provides specifications regarding the quality of the subject matter, the delivered subject matter shall conform to the quality requirements therein.

Article 154． If the parties fail to agree upon the quality requirements, or the agreement on quality requirements is ambiguous and cannot be determined pursuant to the provisions in Article 61 of this Law, the provisions in Article 62, Section 1 of this Law shall apply.

Article 155． If the subject matter delivered by the seller fails to conform to the quality requirements, the purchaser may demand the seller to bear liability for breach of contract pursuant to the provisions in Article 111 of this Law.

Article 156． The seller shall deliver subject matter in the manner of packaging as agreed. If a manner of packaging is not agreed, or the agreement on the manner of packaging is ambiguous and cannot be determined pursuant to the provisions in Article 61 of this Law, the packaging shall be done in the customary manner, or in the absence of a customary manner, the manner of packaging adopted shall be adequate to protect the subject matter.

Article 157． Upon receipt of the subject matter, the purchaser shall inspect the subject matter during the agreed period for inspection. If a period for inspection is not agreed upon, inspection shall be conducted in a timely manner.

Article 158． If the parties have agreed upon a time period for inspection, the purchaser shall, during the inspection period, notify the seller of the circumstances under which the quantity or quality of the subject matter fails to conform to the agreement. If the purchaser is remiss in making such notification, the quantity or quality of the subject matter shall be deemed to be in conformance with the agreement.
If the parties have not agreed upon a period for inspection, the purchaser shall notify the seller within a reasonable period after the purchaser discovers or should have discovered that the quantity or quality is not in conformance with the agreement. If the purchaser fails to notify the seller within a reasonable period, or fails to notify the seller within two (2) years from the date of receipt of the subject matter, the quantity or quality of the subject matter shall be deemed to be in conformance with the agreement; however, if there is a quality warranty period for the subject matter, the quality warranty period shall apply and the provision regarding the two-year period shall not be applied.
If the seller knows or should have known that the subject matter provided does not conform to the agreement, the purchaser shall not be restricted by the notification period prescribed in the preceding two sections.

Article 159． The purchaser shall pay the price in the agreed amount. If a price is not the agreed upon, or the agreement on the price is ambiguous, the provisions in Article 61 and Article 62, Section 2 of this Law shall be applied.

Article 160． The purchaser shall make payment(s) at the agreed place. If the place of payment is not agreed upon, or the agreement on the place of payment is ambiguous and cannot be determined pursuant to the provisions in Article 61 of this Law, the purchaser shall make payment(s) at the seller's place of business; however, if it is agreed that payment(s) of the price shall be conditioned upon the delivery of the subject matter or the delivery of documents for taking possession of the subject matter, payment(s) shall be made at the place where the subject matter or the documents for taking possession of the subject matter is to be tendered.

Article 161． The purchaser shall make payment at the agreed time. If the time of payment is not agreed upon, or the agreement on the time of payment is ambiguous and cannot be determined pursuant to the provisions in Article 61 of this Law, the purchaser shall make payment at the time it receives the subject matter or the documents for taking possession of the subject matter.

Article 162． If the seller delivers the subject matter in excess quantity, the purchaser may accept or reject the excess portion. If the purchaser accepts the excess portion, the purchaser shall pay the price in accordance with the contract price; if the purchaser rejects the excess portion, the purchaser shall so notify the seller in a timely manner.

Article 163． Any fruits derived from the subject matter prior to delivery shall belong to the seller, and fruits derived after delivery shall belong to the purchaser.

Article 164． If the contract is rescinded because the principal part of the subject matter fails to conform to the agreement, the effect of the rescission of the contract shall extend to all ancillary parts of the subject matter. If the contract is rescinded because an ancillary part of the subject matter fails to conform to the agreement, the effect of such rescission shall not extend to the principal part of the subject matter.

Article 165． If the subject matter consists of several objects and only one of the objects fails to conform to the agreement, the purchaser may rescind the contract with respect to such object; however, if the severance of such object from the other objects manifestly impairs the value of the subject matter, either party may rescind the contract with respect to all objects.

Article 166． If the seller delivers the subject matter in installments, and the seller fails to deliver one installment of the subject matter or the delivery fails to conform to the agreement, rendering it impossible for such installment of subject matter to achieve the purpose of the contract, the purchaser may rescind the contract with respect to such installment of subject matter.
Where the seller delivers the subject matter in installments, if the seller fails to deliver one installment of the subject matter or the delivery fails to conform to the agreement, rendering it impossible for the subsequent delivery of other installments of the subject matter to achieve the purpose of the contract, the purchaser may rescind the contract with respect to such installment as well as other subsequent installments of the subject matter.
If the purchaser rescinds the contract with respect to one installment of the subject matter, and such installment and other installments of subject matter are interdependent, the purchaser may rescind the contract with respect to each of those installments of subject matter that has or has not been delivered.

Article 167． If the purchaser who makes payment by installment fails to make payment(s) equal to or exceeding one-fifth of the total price due, the seller may demand the purchaser to pay the price in full, or may rescind the contract.
If the seller rescinds the contact, the seller may demand the purchaser to pay a usage fee for the use of such subject matter.

Article 168． The parties who use a sample for a sales transaction shall seal up the sample, and specifications regarding the quality of the sample may be provided. The subject matter delivered by the seller shall have the same quality as that of the samples and that described in the quality specifications.

Article 169． If the purchaser who uses a sample for a purchase is unaware of a hidden defect in the sample, and even if the subject matter delivered is identical to the sample, the quality of the subject matter delivered by the seller shall nevertheless conform to the usual standards for the same type of object.

Article 170． The parties to a sale that includes a period for trial use may agree upon the period for trial use for the subject matter. If a period for trial period is not agreed upon, or the agreement on the period for trial use is ambiguous and cannot be determined pursuant to the provisions in Article 61 of this Law, the period for trial use shall be determined by the seller.

Article 171． The purchaser in a sale that includes a period for trial use may purchase or refuse to purchase the subject matter during the period for trial use. If the purchaser fails to indicate whether or not it will purchase the subject matter prior to the expiration of the period for trial use, a purchase shall be deemed to have been effected.

Article 172． For a sale by bidding, the rights and obligations of the parties as well as the bidding procedures shall conform to the provisions of the relevant laws and administrative regulations.

Article 173． For a sale by auction, the rights and obligations of the parties as well as the auction procedures shall conform to the provisions of the relevant laws and administrative regulations.

Article 174． If there are provisions in the law for other non-gratuitous contracts, such provisions shall apply; in the absence of such provisions, reference shall be made to the relevant provisions in Sales Contracts.

Article 175． If the parties agree to a barter transaction under which the title of the subject matter is transferred, reference shall be made to the relevant provisions in Sales Contracts.

Chapter X
Contracts for the Supply of Electricity, Water, Gas and Heat

Article 176． An electricity supply contract is a contract under which the electricity supplier provides electricity to the electricity user, and the electricity user pays an electricity fee.

Article 177． The contents of an electricity supply contract shall include clauses relating to the manner, quality and time of the supply of electricity, the capacity, address and nature of electricity usage, method of measurement, methods of settlement for pricing and electricity fees, and the duties with respect to the maintenance of the facilities for the supply and use of electricity.

Article 178． The place of performance for the electricity supply contract shall conform to the agreement of the parties; if the parties have no such agreement, or the agreement is ambiguous, the place of performance shall be the place within which the property rights of the electricity supply facilities are demarcated.

Article 179． The electricity supplier shall supply electricity safely in accordance with quality standards for electricity supply as prescribed by the State and as agreed by the parties. If the electricity supplier fails to supply electricity safely in accordance with quality standards for electricity supply as prescribed by the State and as agreed by the parties, causing damages to the electricity user, the electricity supplier shall be liable for damages.

Article 180． If the electricity supplier needs to suspend electricity supply due to reasons such as a scheduled or necessary examination or repair of the electricity supply facilities, rationing of electricity in accordance with the law, or the illegal use of electricity by the electricity user, the electricity supplier shall notify the electricity user in advance pursuant to relevant State regulations. If the electricity supplier fails to notify the electricity user in advance of the suspension of electricity, resulting in losses or damages to the electricity user, the electricity supplier shall be liable for damages.

Article 181． If the electricity supply is suspended due to a natural disaster or other causes, the electricity supplier shall carry out repairs in a timely manner in accordance with relevant State provisions. If the failure to carry out emergency repairs in a timely manner results in losses or damages to the electricity user, the electricity supplier shall be liable for damages.

Article 182． The electricity user shall pay the electricity fee in accordance with relevant State regulations and the agreement of the parties. If the electricity user fails to pay the electricity fee within the specified time period, the electricity user shall pay the agreed late payment penalty. If the electricity user does not pay the electricity fee and late payment penalty within a reasonable period after having been demanded to do so, the electricity supplier may suspend electricity supply in accordance with the procedures prescribed y the State.

Article 183． The electricity user shall use the electricity supplied safely in accordance with relevant State regulations and the agreement of the parties. If the electricity user fails to use the electricity safely in accordance with relevant State regulations and the agreement of the parties, resulting in losses or damages to the electricity supplier, the electricity user shall be liable for damages.

Article 184． For contracts for the supply of water, gas and heat, reference shall be made to the relevant provisions for electricity supply contracts.

Chapter XI
Gift Contracts

Article 185． A gift contract is a contract under which a donor gives its own property to a donee gratuitously and the donee expresses its acceptance.

Article 186． The donor may revoke the gift prior to the passing of title of the gifted property.
The preceding section shall not apply to a gift contract that serves the public interest or is in the nature of a moral duty, such as disaster relief and aid to the poor, or for a gift contract that has been notarized.

Article 187． Where procedures such as registration are required for the property to be lawfully gifted, such procedures shall be undertaken.

Article 188． With respect to a gift contract that serves the public interest or is in the nature of an moral duty, such as disaster relief and aid to the poor, or a gift contract that has been notarized, if the donor fails to deliver the gifted property, the donee may demand delivery of such property.

Article 189． If damage, destruction or loss is caused to the gifted property due to the intentional act or gross negligence of the donor, the donor shall be liable for damages.

Article 190． A gift may be conditioned on an obligation.
Where the gift is conditioned on an obligation, the donee shall perform the obligation as agreed.

Article 191． If the gifted property has a defect, the donor shall not bear any liability with respect thereto. If the gift is conditioned on an obligation, and the gifted property has a defect, the donor shall, to the extent of such obligation, bear the same liability as would a seller.
If the donor intentionally fails to inform the donee of the defect, or warrants that the property has no defect, resulting in damages to the donee, the donor shall be liable for damages.

Article 192． The donor may revoke a gift if one of the following applies to the donee:
(1) the donee seriously injures or infringes upon the interests of the donor or a close relative of the donor;
(2) the donee has an obligation of support towards the donor and fails to perform such obligation; or
(3) the donee fails to perform its obligations as agreed in the gift contract.
The donor's right to revoke a gift shall be exercised within one year from the date the donor knows or should have known of the reason for the revocation.

Article 193． If an illegal act of the donee results in the death or loss of civil capacity of the donor, the successor or legal representative of the donor may revoke the gift.
The right of revocation of the successor or legal representative of the donor shall be exercised within six (6) months from the date the successor or legal representative of the donor knows or should have known of the reason for the revocation.

Article 194． The person who has the right to revoke a gift may demand the donee to return the gifted property.

Article 195． If the economic condition of the donor significantly deteriorates so as to severely affect the production and operations, or family life of the donor, the donor may discontinue performance of the gift obligation.

Chapter XII
Loan Contacts

Article 196． A loan contract is a contract under which the borrower borrows money from the lender and repays the borrowed money, together with interest, on the due date.

Article 197． Unless a loan is between natural persons and such natural persons agree otherwise, a loan contract shall be in writing.
The contents of a loan contract shall include clauses relating to the nature, currency, purpose, amount, rate of interest, term and manner of repayment of the loan.

Article 198． In forming a loan contract, the lender may demand the borrower to provide security. The security shall conform to the provisions of the Guaranty Law of the People's Republic of China.

Article 199． In forming a loan contract, the borrower shall, in accordance with the requirements of the lender, provide the true status of its business activities and financial condition related to the loan.

Article 200． The loan interest shall not be deducted from the principal in advance. If the interest has been deducted from the principal in advance, the loan shall be repaid and the interest shall be calculated in accordance with the actual amount of the loan.

Article 201． If the lender fails to extend the loan on the date and in the amount as agreed, causing losses to the borrower, the lender shall compensate the borrower for such losses.
If the borrower fails to collect the loan on the date and in the amount as agreed, the borrower shall pay interest on the date and in the amount as agreed.

Article 202． The lender may inspect and supervise the use of the loan as agreed. The borrower shall provide to the lender relevant materials such as financial and accounting statements on a regular basis as agreed.

Article 203． If the borrower fails to use the loan for the agreed upon purpose, the lender may cease disbursement of the loan, accelerate repayment of the loan or rescind the contract.

Article 204． The interest rate on a loan extended by a financial institution engaged in loan operations shall be set within the range for loan interest rates as prescribed by the People's Bank of China.

Article 205． The borrower shall pay interest within the agreed time period. If the term for the payment of interest is not agreed upon, or the agreement on the term for the payment of interest is ambiguous and cannot be determined pursuant to the provisions in Article 61 of this Law, the interest shall be paid upon repayment of the loan if the loan term is less than one year; if the loan term exceeds one year, the interest shall be paid at the end of each one-year period of the loan during the loan term; and if there is a period remaining on loan term of less than one year, the interest shall be paid together with the repayment of the loan.

Article 206． The borrower shall repay the loan within the agreed time period. If the loan term is not agreed upon, or the agreement on the repayment of the loan is ambiguous and cannot be determined pursuant to the provisions in Article 61 of this Law, the borrower may repay the loan at any time; the lender may demand that repayment by made within a reasonable period.

Article 207． If the borrower fails to repay the loan within the agreed time period, the borrower shall pay the default interest in accordance with the agreement or relevant State regulations.

Article 208． Unless otherwise agreed by the parties, if the borrower repays the loan in advance, the interest shall be calculated based on the actual period of the loan.

Article 209． Prior to the expiration of the term for repayment, the borrower may apply to the lender for an extension of the term for repayment. If the lender consents, the term may be extended.

Article 210． A loan contract between natural persons shall become effective at the time the lender provides the loan.

Article 211． If the payment of interest in a loan contract between natural persons is not agreed upon, or the agreement is ambiguous, the loan shall be deemed interest free.
If the payment of interest is agreed upon in the loan contract between natural persons, the interest rate for the loan shall not violate the relevant State regulations regarding the limitations on interest rates for loans.

Chapter XIII
Lease Contracts

Article 212． A lease contract is a contract under which the lessor delivers a leased object to the lessee for the lessee to use or to obtain benefit from, and the lessee pays rent therefor.

Article 213． The contents of a lease contract shall include clauses such as the name, quantity, purpose, lease term, rent, time and method of payment, and maintenance of the leased object, etc..

Article 214． The lease term shall not exceed twenty (20) years. Any part of the term exceeding twenty (20) years shall be invalid.
Upon expiration of the lease term, the parties may renew the lease contract, provided that the agreed lease term does not exceed twenty (20) years from the date of renewal.

Article 215． If the lease term is more than six (6) months, the lease contract shall be in written form. If the parties fail to adopt a written form, the lease shall be deemed as a lease of a non-fixed term.

Article 216． The lessor shall deliver the leased object to the lessee as agreed, and shall ensure that the use of the leased object during the lease term conforms to the agreed purpose.

Article 217． The lessee shall use the leased object in the agreed manner. If the manner of use is not agreed upon, or the agreement on the manner of use is ambiguous and cannot be determined pursuant to the provisions in Article 61 of this Law, the leased object shall be used in accordance with the nature of the leased object.

Article 218． If the lessee uses the leased object in accordance with the agreed manner or consistent with the nature of the leased object, and such use results in wear and tear on the leased object, the lessee shall not be liable for damages.

Article 219． If the lessee fails to use the leased object in accordance with the agreed manner or uses the leased object in a manner inconsistent with the nature of the leased object, and such use results in damage to the leased object, the lessor may rescind the contract and demand compensation for damages.

Article 220． Unless otherwise agreed by the parties, the lessor shall perform maintenance obligations on the leased object.

Article 221． When the leased object requires maintenance, the lessee may demand the lessor to carry out such maintenance within a reasonable period. If the lessor fails to perform its maintenance obligations, the lessee may carry out such maintenance on its own, and the cost for such maintenance shall be borne by the lessor. If the maintenance on the leased object affects the lessee's use thereof, the rent shall be reduced accordingly or the lease term shall be extended.

Article 222． The lessee shall properly care for the leased object. If damage, destruction or loss is caused to the leased object due to improper safekeeping, the lessee shall be liable to compensate the lessor for damages.

Article 223． Subject to the consent of the lessor, the lessee may make improvements on, or additions to, the leased object.
If the lessee makes any improvement on, or additions to, the leased object without the lessor's consent, the lessor may demand the lessee to restore the leased object to its original condition or may demand compensation for damages.

Article 224． Subject to the consent of the lessor, the lessee may sublet the leased object to a third party. If the lessee sublets the leased object, the lease contract between the lessee and the lessor shall remain in effect. If the third party causes damage to the leased object, the lessee shall compensate the lessor for such damage.
If the lessee subleases the leased object without the consent of the lessor, the lessor may rescind the contract.

Article 225． Unless otherwise agreed by the parties, the lessee shall be entitled to the benefits obtained from the possession or use of the leased object during the lease term.

Article 226． The lessee shall pay the rent during the agreed upon time period. If the time period of payment is not agreed upon, or the agreement on the time period of payment of rent is ambiguous and cannot be determined pursuant to the provisions in Article 61 of this Law, payment shall be made at the expiration of the term of the lease, if the lease term is less than one year; if the lease term exceeds one year, payment shall be made at the end of each one-year period, and if there is a remaining period in the lease term of less than one year, payment shall be made upon the expiration of the lease term.

Article 227． If the lessee fails to pay or delays payment of the rent without a proper reason, the lessor may demand the lessee to make payment within a reasonable period. If the lessee fails to make payment within such reasonable period, the lessor may rescind the contract.

Article 228． If due to the assertion of a right by a third party the lessee is unable to make use of, or obtain benefit from, the leased object, the lessee may demand a reduction or waiver of the rent.
In the event of an assertion of a right by a third party, the lessee shall promptly notify the lessor.

Article 229． If a change in ownership of the leased object occurs during the lease term, the validity of the lease contract shall not be affected.

Article 230． In selling the leased premises, the lessor shall notify the lessee within a reasonable period prior to the sale, and the lessee shall have the right of first refusal to purchase such premises under equal conditions.

Article 231． If the leased object is damaged, destroyed, or lost, wholly or partially, due to causes not attributable to the lessee, the lessee may demand a reduction or waiver of the rent; if the leased object is damaged, destroyed or lost, wholly or partially, rendering it impossible to achieve the purpose of the contract, the lessee may rescind the contract.

Article 232． If the parties have not agreed upon a lease term, or the agreement on the lease term is ambiguous and cannot be determined pursuant to the provisions in Article 61 of this Law, the lease shall be deemed to be a lease of a non-fixed term. The parties may rescind the contract at any time, provided that the lessor shall notify the lessee within a reasonable period prior to the lessor's rescission of the contract.

Article 233． If a leased object endangers the safety or health of the lessee, the lessee may rescind the contract at any time, even if the lessee was aware at the time of the formation of the contract that the quality of the leased object was not up to standard.

Article 234． If the lessee dies during the lease term, those persons who resided with lessee while the lessee was alive may lease the premises in accordance with the original lease contract.

Article 235． The lessee shall return the leased object upon the expiration of the lease term. The condition of the returned leased object shall conform to the condition agreed upon or shall be in a condition reflecting that the leased object has been used during the lease term in a manner consistent with the nature of the leased object.

Article 236． Upon the expiration of the lease term, if the lessee continues to use the leased object and the lessor does not object, the original lease contract shall remain in effect, but the lease term shall become non-fixed.

Chapter XIV
Finance Lease Contracts

Article 237． A finance lease contract is a contract under which the lessor purchases the leased object from the seller pursuant to the lessee's designation of the seller and the leased object, and provides the leased object to the leasee for its use thereof, and for which the lessee pays rent.

Article 238． The contents of a finance lease contract include the leased object's name, quantity, specifications, technical capability, method of inspection, lease term, particulars of rent, payment term and method of payment, currency and the passage of title of the leased object upon expiration of the lease term.
A finance lease contract shall be in written form.

Article 239． The seller shall deliver the leased object to the lessee as agreed in the sales contract entered into by the lessor pursuant to the lessee's designation of the seller and the subject matter, and the lessee shall have the rights of a purchaser with respect to the subject matter.

Article 240． The lessor, seller and lessee may agree that if the seller does not perform its obligations in the sales contract, the lessee may exercise the right to claim damages. Where the lessee exercises the right to claim damages, lessor shall provide assistance therewith.

Article 241． Absent the consent of the lessee, the lessor shall not alter any contents of the sales contract entered into by the lessor pursuant to the lessee's designation of the seller and subject matter that relate to the lessee.

Article 242． The lessor shall have ownership rights to the leased object. If the lessee becomes bankrupt, the leased object shall not be included in the assets of the bankrupt estate.

Article 243． Unless otherwise agreed by the parties, the rent in the finance lease contract shall be determined on the basis of the majority or entirety of the purchase cost of leased object and the reasonable profit of the lessor.

Article 244． Where the leased object does not meet the agreed standard or is not fit for its intended use, the lessor shall not bear any liability, unless the leasee relies on the skills of the lessor to select the leased object or the lessor interferes in the selection of the leased object.

Article 245． The lessor shall ensure the lessee's possession and use of the leased object.

Article 246． The lessor shall not be liable for bodily injury to, or property damage of, any third party caused by the leased object while the lessee is in possession of the leased object.

Article 247． The lessee shall properly safe-keep and use the leased object.
The lessee shall perform the obligations of maintenance on the leased object during the period it has possession of the leased object.

Article 248． The lessee shall pay rent as agreed. If the lessee fails to pay the rent within a reasonable period after a demand for payment, the lessor may demand payment of all rent, or the lessor may rescind the contract and repossess the leased object.

Article 249． Where the parties agree that title to the leased object shall vest in the lessee upon expiration of the lease term, and the lessee has paid most of the rent, but is incapable of paying the balance owed, resulting in the lessor's rescission of the contract and repossession of the leased object, the lessee may demand a partial refund where the value of the repossessed leased object exceeds the outstanding rent owed by the lessee and other expenses.

Article 250． The lessor and the lessee may agree upon the ownership of the leased object upon the expiration of the lease term. If the ownership of the leased object is not agreed upon, or the agreement is ambiguous and cannot be determined pursuant to the provisions in Article 61 of this Law, title to the leased object shall vest in the lessor.

Chapter XV
Special Undertaking Contracts

Article 251． A special undertaking contract is a contract under which the contractor completes certain work in accordance with the requirements of the principal and delivers the work achievements to the principal, and the principal pays a remuneration to the contractor.
Special undertakings include processing, work made to order, repairs, reproductions, tests, inspections, examinations, etc..

Article 252． The contents of a special undertaking contract include provisions regarding the subject matter, quantity, quality, remuneration, manner of the work to be undertaken, furnishing of materials, time period for performance, and the standard and method of the acceptance inspection.

Article 253． Unless otherwise agreed by the parties, the contractor shall complete the principal work with its own equipment, technology and labor.
If the contractor subcontracts a third party to complete the main work, the contractor shall be liable to the principal with respect to the work completed by the third party; if such work is subcontracted without the consent of the principal, the principal may rescind the contract.

Article 254． The contractor may subcontract a third party to complete the ancillary work of the special undertaking. If the contractor subcontracts a third party to do the ancillary work of the special undertaking, it shall be liable to the principal for the work achievements completed by the third party.

Article 255． If the contractor is to provide the materials, the contractor shall select the materials as agreed, and shall make available the materials for inspection and examination by the principal.

Article 256． If the principal is to provide materials, it shall provide the materials as agreed. The contractor shall inspect the materials provided by the principal in a timely manner, and upon discovering that any of the materials fail to conform to the agreement, the contractor shall, in a timely manner, send notice to the principal to replace or make up the deficiency in the materials, or take other remedial measures.
The contractor shall not replace any materials provided by the principal without authorization, nor shall it replace any parts or components that do not require repair.

Article 257． If the contractor discovers that the drawings or technical requirements provided by the principal are unrealistic, the contractor shall notify the principal in a timely manner. If the contractor incurs damages due to the principal's delay in responding, the principal shall compensate the contractor for such damages.

Article 258． If the principal changes the work requirements during the course of the work, thereby causing damages to the contractor, the principal shall compensate for such damages.

Article 259． If the work undertaken requires the assistance of the principal, the principal shall have an obligation to provide such assistance.
If the work cannot be accomplished due to the failure of the principal to fulfill such obligation of assistance, the contractor may demand the principal to perform such obligation within a reasonable period and may extend the time limit of performance. If the principal fails to perform such obligation within such period, the contractor may rescind the contract.

Article 260． During the course of the work, the contractor shall submit to the necessary supervision and inspection by the principal. The principal shall not hinder the normal operations of the contractor in its supervision and inspection of the work.

Article 261． Upon the completion of the work, the contractor shall deliver the completed work to the principal, along with the necessary technical materials and relevant quality certificates. The principal shall carry out an acceptance inspection on the work achievements.

Article 262． If the work achievements delivered by the contractor fail to conform to the quality requirements, the principal may demand that the contractor repair, re-do or re-make, accept a reduced remuneration or compensate for damages, etc., as liability for breach of contract.

Article 263． The principal shall pay remuneration to the contractor within the agreed time period. If the time of payment is not agreed upon, or the agreement is ambiguous and cannot be determined according to the provisions of Article 61 of this Law, the principal shall make the payment at the time of delivery of the completed work achievements; if the work is partially delivered, the principal shall make the corresponding payment.

Article 264． Unless otherwise agreed by the parties, if the principal fails to pay the contractor remuneration or the cost of materials, etc., the contractor shall have possessory lien rights to the completed work achievements.

Article 265． The contractor shall properly care for the materials provided by the principal, as well as the completed work achievements; if such materials are damaged, destroyed or lost due to improper care, the contractor shall bear liability for damages.

Article 266． The contractor shall maintain confidentiality pursuant to the requirements of the principal, and shall not retain any reproduction of the contracted work or technical materials without permission from the principal.

Article 267． Unless otherwise agreed by the parties, joint-contractors for a special undertaking shall be jointly and severally liable to the principal.

Article 268． The principal may rescind the special undertaking contract at any time. If such rescission causes damages to the contractor, the principal shall compensate the contractor for such damages.

Chapter XVI
Construction Contracts

Article 269． A construction contract is a contract under which the contractor undertakes certain construction work and the party awarding the contract pays the contract price.
A construction contract includes contracts for surveying, designing, and construction.

Article 270． A construction contract shall be in written form.

Article 271． Activities related to the invitation and tendering of bids for a construction project shall be conducted publicly, fairly and impartially pursuant to the provisions of the relevant laws.

Article 272． The party awarding the contract may enter into one construction contract with a general contractor, or it may enter into separate surveying, design, and construction contracts with surveyors, designers, and constructors, respectively. The party awarding the contract shall not divide into parts a construction project that should be completed by one contractor and award the parts to various contractors.
Upon the consent of the party awarding the contract, the general contractor or the contractors for surveying, designing and construction may subcontract to a third party to complete a portion of the work for which it has been contracted. The third party, along with the general contractor or the contractors for surveying, designing and construction, shall be jointly and severally liable to the party awarding the contract with respect to the work achievements completed by the third party. The contractor shall not re-contract to a third party the entire construction project for which it has been contracted; nor shall it divide into parts the entire construction project for which it has been contracted and then, in the name of subcontracting, transfer all of the parts to a third party.
The contractor is prohibited from subcontracting a part of the construction project to any entity that does not possess the requisite qualifications. A subcontracted entity is prohibited from re-subcontracting the project that it has been contracted. The construction of the main structure of the construction project shall be completed by the contractor itself.

Article 273． Construction contracts for major State construction projects shall be formed in accordance with the procedures prescribed by the State as well as the investment plans and feasibility study reports, etc., approved by the State.

Article 274． The contents of contracts for surveying or design include provisions concerning the time limit for submission of the relevant basic materials and documentation (including an estimated budget), quality requirements, fees and other cooperative work conditions.

Article 275． The contents of a building contract include provisions regarding the scope of construction, construction period, schedule of the commencement and completion of the interim work required to be finished during the course of the project, quality of construction, costs for the construction of the project, time of delivery of the technical materials, responsibility for the supply of materials and equipment, appropriation of funds and settlement of accounts, acceptance inspection of the completed construction, scope of the quality warranty, warranty period, cooperation between both parties, etc..

Article 276． Where the construction project requires supervision, the party awarding the contract shall enter into a supervision contract in writing with a supervisor. The rights and obligations and legal responsibilities of the party awarding the contract and the supervisor shall be pursuant to the provisions in Agency Contracts in this Law, as well as those in other relevant laws and administrative regulations.

Article 277． The party awarding the contract may inspect at any time the progress and quality of the construction, provided that such inspection does not hinder the normal operations of the contractor.

Article 278． The contractor shall notify the party awarding the contract to carry out an inspection prior to the sealing of any construction work to be sealed. If the party awarding the contract fails to carry out the inspection in a timely manner, the contractor may extend the contract term and shall have right to demand compensation for damages for any work stoppages, work holdups, etc..

Article 279． After the construction work is completed, the party awarding the contract shall promptly carry out the acceptance inspection based on the construction drawings and specifications, as well as the regulations for acceptance inspection and quality inspection standards promulgated by the State. If the construction work passes the acceptance inspection, the party awarding the contract shall pay the agreed contract price and accept the construction project.
Once the completed construction project passes the acceptance inspection, it may be delivered for use; a construction project that is not inspected or one that fails to pass inspection shall not be delivered for use.

Article 280． If the party awarding the contract incurs any damages due to the failure of a survey or design to conform to the quality requirements, or due to the failure of the surveyor or designer to submit the survey or design documents within the time specified, the surveyor or designer shall continue improving the survey or design, reduce or waive the survey or design fee, and compensate the party awarding the contract for damages.

Article 281． If the quality of the construction project fails to conform to the agreement for reasons attributable to the constructor, the party awarding the contract shall be entitled to demand the constructor to repair, reconstruct or make changes to the construction project within a reasonable period free of charge. Where the delivery of the construction project is delayed due to such repair, reconstruction or changes, the contractor shall be liable for breach of contract.

Article 282． If for reasons attributable to the contractor, the construction project causes bodily injury or property damage during a reasonable period of use, the contractor shall be liable for damages.

Article 283． If the party awarding the contract fails to provide the contractor with raw materials, equipment, capital, technical information or a site pursuant to the time and requirements provided in the agreement, the contractor may extend the construction period and demand damages for any stoppage or holdup of work.

Article 284． If for reasons attributable to the party awarding the contract, a stoppage of, or suspension in, the construction of the project occurs, the party awarding the contract shall adopt measures to remedy or mitigate the losses, and shall compensate the contractor for losses and actual costs resulting from the stoppage, hold-up, returned shipment, reallocation or transfer of mechanical equipment, pile-up of materials and components, etc..

Article 285． If the party awarding the contract alters the plan, provides inaccurate data, or fails to provide necessary working conditions for a survey or design within the time specified, thereby causing the survey or design to be re-done, stopped or revised, the party awarding the contract shall pay any additional expenses incurred in accordance with the actual amount of work completed by the surveyor or designer.

Article 286． If the party awarding the contract fails to pay the price as agreed, the contractor may demand that the party awarding the contract pay the price within a reasonable period. If the party awarding the contract fails to make the payment within the time specified, the contractor may negotiate with the party awarding the contract to barter the construction work in lieu of payment or may petition the People's Court to auction the construction work in accordance with the law, unless the construction is not suitable for barter or auction given the nature of the construction. With respect to the use of proceeds from the barter or auction, priority shall be given to payment for the construction.

Article 287． Matters not provided for in this Chapter shall be governed by the relevant provisions in Special Undertaking Contracts.

Chapter XVII
Transportation Contracts

Part 1:
General Provisions

Article 288． A transportation contract is a contract under which the carrier transports a passenger or goods from the point of departure to an agreed location, and the passenger, consignor or consignee pays a fare or freight charge.

Article 289． A carrier engaged in the business of public transportation shall not reject an ordinary or reasonable request for transport made by the passenger or consignor.

Article 290． The carrier shall safely transport the passenger or goods to the agreed location within the agreed time period or within a reasonable period.

Article 291． The carrier shall transport the passenger or goods to the agreed location using the agreed or usual route.

Article 292． The passenger, consignor or consignee shall pay a fare or freight charge. If the carrier fails to use the agreed or usual route resulting in an additional fare or freight charge, the passenger, consignor or consignee may refuse to pay the additional fare or freight charge.

Part 2
Passenger Transport Contracts

Article 293． Unless otherwise agreed by the parties or some other customary business practice exists, a passenger transport contract shall be formed upon the carrier's delivery of the passenger ticket to the passenger.

Article 294． The passenger shall board the carrier with a valid passenger ticket. If a passenger boards without a ticket, travels beyond the destination or above the class, or holds an invalid ticket, such passenger shall pay the required fare. The carrier may collect the additional fare in accordance with the relevant regulations. If the passenger fails to pay the fare, the carrier may refuse to transport such passenger.

Article 295． If for his own reasons the passenger is unable to board the carrier at the time specified on the passenger ticket, he shall within the agreed time limit go through procedures to return the ticket or change the ticket. Where the passenger fails to go through such procedures within the time limit, the carrier may refuse to refund the fare and shall no longer have an obligation to transport such passenger.

Article 296． During the course of transport, the carry-on luggage of the passenger shall not exceed the agreed quantity limit. Where the carry-on luggage exceeds the agreed quantity limit, the passenger shall complete the check-in procedures for the piece(s) of luggage that exceed the agreed quantity limit.

Article 297． The passenger shall not carry on his or her person or place in his or her luggage any hazardous goods such as inflammable, explosive, toxic, corrosive or radioactive goods; goods that could threaten the safety of persons or property on board, or any other contraband.
If the passenger violates the provisions of the preceding section, the carrier may unload or destroy the contraband, or turn it over to the relevant authorities. If the passenger insists on carrying the contraband on board or placing it in his or her luggage, the carrier shall refuse to transport the passenger.

Article 298． The carrier shall inform the passenger in a timely manner of important matters related to the inability to carry out normal transport and of precautions related to transportation safety.

Article 299． The carrier shall provide the passenger with transport service in accordance with the time and carrier number specified on the passenger ticket. Where the carrier delays transport service, the carrier shall, at the request of the passenger, make arrangements for the passenger to travel on another scheduled departure or refund the ticket price.

Article 300． Where the carrier lowers the service standards by changing the mode of transport without authorization, the carrier shall, at the request of the passenger, refund the ticket price or reduce the amount of the fare; where the carrier raises the service standard, the carrier shall not collect an additional fare.

Article 301． During the course of transport, the carrier shall use its best efforts to come to the aid of any passenger who is suffering from an acute illness, who is in labor or who is in danger.

Article 302． During the course of transport, the carrier shall be liable for damages for the death or bodily injury of a passenger, unless such death or bodily injury is attributable to passenger's own health condition or the carrier has evidence showing that such death or bodily injury is due to an intentional act or gross negligence of the passenger.
The provisions of the preceding section apply to passengers who, under the relevant regulations, are exempt from purchasing tickets, passengers who hold discount tickets and passengers who are permitted by the carrier to board without tickets.

Article 303． Where the carry-on articles of the passenger are damaged or destroyed during the course of transport due to the fault of the carrier, the carrier shall be liable for damages.
Where the checked-in luggage is destroyed, damaged or lost, the relevant regulations on transportation of goods shall govern.

Part 3
Contracts for the Transport of Goods

Article 304． When consigning goods for transport, the consignor shall accurately declare to the carrier the name of the consignee or the consignee on order, as well as other necessary information related to the transport of the goods, such as the name, nature, weight, quantity and destination of the goods.
Where the consignor's declaration is inaccurate or important information is omitted, causing losses to the carrier, the consignor shall bear liability for damages.

Article 305． Where approval or inspection formalities are required for the transport of the goods, the consignor shall submit to the carrier the documentation for which the relevant procedures have been completed.

Article 306． The consignor shall pack the goods in the agreed manner. In the absence of an agreement on the manner of packaging or if the agreement on the manner of packaging is ambiguous, the provisions of Article 156 of this Law shall apply.
If the consignor violates the provisions of the preceding section, the carrier may refuse to transport the goods.

Article 307． When consigning for transport hazardous goods such as combustible, explosive, toxic, erosive or radioactive goods, the consignor shall, in accordance with State regulations for the transport of hazardous goods, properly pack the hazardous goods, mark and label the goods as hazardous, and provide the carrier with the written materials with respect to the name, nature and safety precautions for such hazardous goods.
If the consignor violates the provisions of the preceding section, the carrier may refuse to transport such goods or may take appropriate measures to prevent the occurrence of loss; any expenses incurred therefrom shall be borne by the consignee.

Article 308． Prior to the carrier's delivery of the goods to the consignee, the consignor may request the carrier to suspend transport, return the goods, change the destination or deliver the goods to another consignee, provided that the consignor pays the carrier for any losses resulting therefrom.

Article 309． If the carrier knows who the consignee is, the carrier shall promptly notify the consignee once the goods arrive at the destination, and the consignee shall promptly take delivery of the goods. Where the consignee delays in taking delivery, it shall pay to the carrier a bailment fee and other expenses.

Article 310． The consignee shall inspect the goods within the agreed time period after taking delivery thereof. In the absence of an agreement as to the time limit for the inspection of goods, or if the agreement is ambiguous and cannot be determined pursuant to the provisions of Article 61 of this Law, the consignee shall inspect the goods within a reasonable period. If the consignee does not raise an objection with respect to the quantity of, or damage to, the goods within the agreed time limit or within a reasonable period, it shall be seen as prima facie evidence that the goods delivered by the carrier are in accordance with the terms on the transport documentation.

Article 311． The carrier shall be liable for damages for any destruction, damage to, or loss of, the goods incurred during the course of transport, unless the carrier proves that such destruction, damage to, or loss of, the goods was due to an event of force majeure, the nature of the goods, reasonable wear and tear, or the fault of the consignor or consignee.

Article 312． The amount of compensation for the damage to, or loss of, the goods shall be as agreed by the parties, if the parties have such an agreement; in the absence of an agreement or if the agreement on the amount of compensation is ambiguous and cannot be determined pursuant to the provisions of Article 61 of this Law, the amount of the compensation shall be calculated based upon the prevailing market price of the goods at the destination at the time the goods are delivered or should have been delivered. Where a law or administrative regulation provides otherwise with respect to the calculation method or limitation on the amount of compensation, such provisions shall govern.

Article 313． If the goods are transported by more than one carrier in the same mode of transport, the carrier who enters into contract with the consignor shall be responsible throughout the entire course of transport. If damage to the goods occurs at a particular segment of the transport, the carrier who enters into the contract with the consignor and the carrier for such segment shall bear joint and several liability.

Article 314． If the goods are destroyed or lost due to an event of force majeure occurring during the course of transport and the freight charge has not been collected, the carrier shall not demand payment thereof. If the freight charge has been collected, the consignor may claim a refund.

Article 315． Unless otherwise agreed by the parties, if the consignor or consignee fails to pay the freight charge, bailment fee or other expenses incurred in connection with the transport of the goods, the carrier shall be entitled to a possessory lien with respect to such goods.

Article 316． If the consignee is unknown or the consignee refuses to take delivery of the goods without a proper reason, the carrier may escrow the goods pursuant to the provisions of Article 101 of this Law.

Part 4
Multimodal Transport Contract

Article 317． The multimodal transport operator shall be responsible for the performance or coordination of the performance of a multimodal transport contract, and shall have the rights and assume obligations of a carrier for the entire course of transport.

Article 318． The multimodal transport operator may agree with the individual carriers participating in each respective segment of the multimodal transport to share responsibilities within each respective segment of the multimodal transport. However, such agreement shall not affect the obligations of the multimodal transport operator for the entire course of transport.

Article 319． Upon receipt of goods delivered by the consignor, the multimodal transport operator shall issue a multimodal bill of lading. At the request of the consignor, the multimodal transport bill of lading may be transferable or not-transferable.

Article 320． If due to the fault of the consignor, the multimodal transport operator incurs damages while the goods are in transit, the consignor shall be liable for damages, even where the consignor has transferred the multimodal bill of lading.

Article 321． If destruction, damage to, or loss of, the goods occurs on a certain segment of the multimodal transport, liability for damages and the limits of liability of the multimodal transport operator shall be governed by the relevant laws regulating the mode of transportation in the segment under which the destruction, damage or loss occurred. If the transport segment on which the damage, destruction or loss occurred cannot be determined, liability for damages shall be borne in accordance with the provisions in this Chapter.

Chapter XVIII
Technology Contracts

Part 1
General Provisions

Article 322． A technology contract is a contract formed by the parties which defines the rights and obligations between one another with respect to technology development, transfer, consultation or services.

Article 323． The formation of a technology contract shall be conducive to the improvement of science and technology, and shall expedite the transformation, application and promotion of scientific and technological achievements.

Article 324． The contents of a technology contract shall be agreed by the parties. A technology contract generally contains the following provisions:
(1) name of the project;
(2) contents, scope and requirements of the subject matter;
(3) plan, progress schedule, time limit, place, area and manner with respect to performance;
(4) confidentiality of the technological information and material;
(5) assumption of risk liability;
(6) ownership of the technology achievements and the method of sharing the benefits derived therefrom;
(7) standard and method for inspection and acceptance;
(8) price, remuneration or license fee, and payment method;
(9) liquidated damages or the method of calculating damages for breach;
(10) method of dispute resolution; and
(11) definition of terms and terminology.
Pursuant to the agreement of the parties, technology background materials, feasibility studies and technology appraisal reports, documents regarding project tasks and scheduling, technology criterion, technological specifications, original design and technical documents, as well as other technical files relating to the performance of the contract may comprise parts of the contract.
If the technology contract involves a patent, it shall state the name of the invention, the applicant for the patent, the patentee, application date, application number, patent number and the valid term of the patent.

Article 325． The parties shall agree upon the manner of payment of the price, remuneration or license fee, which may be made through a single lump-sum payment based on lump-sum calculation; installment payments based on lump-sum calculation; or the parties may adopt a method of percentage payments, or percentage payments with an up-front fee.
If percentage payments are agreed upon, they may be made based on a fixed percentage of the price; the increased the value of the product, resulting from the implementation of the patent usage or technological secrets; profits or sales revenue of the product; or it may be calculated through other methods agreed by the parties. The percentage payment may be fixed, or it may be gradually increased or decreased on an annual basis.
If percentage payments are agreed upon, the parties shall agree upon a method for inspecting the relevant accounting books and records.

Article 326． If the right to use or transfer the technological achievements developed during the course of employment is owned by a legal person or other type of organization, the legal person or other type of organization may enter into a technology contract with respect to the technological achievements developed during the course of employment. The legal person or other type of organization shall grant as a reward or remuneration to the individual(s) who has accomplished the development of such technological achievements during the course of employment a fixed percentage of the benefits obtained from the use or transfer of such technology. Where the legal person or other type of organization forms a contract to transfer technological achievements developed during the course of employment, those persons who accomplish such technological achievements shall have the right of first refusal to acquire such technological achievements under equal terms and conditions.
Technological achievements developed during the course of employment means the technological achievements that are mainly developed in the course of carrying out the task of the legal person or other type of organization or developed under the material technological conditions of the legal person or other type of organization.

Article 327． An individual who develops technological achievements outside the course of employment is entitled to the right to use or transfer such technological achievements, and such individual may enter into technology contracts with respect to such technological achievements developed outside the course of employment.

Article 328． An individual who has developed technological achievements shall have the right to identify on the relevant documentation for the technological achievements that he or she is the person who has accomplished the technological achievements, and such person has the right to obtain a certificate of honor or a reward for such technological achievements.

Article 329． A technology contract that unlawfully monopolizes technology, impedes technological improvements or infringes upon another person's rights to technological achievements is invalid.

Part 2
Technology Development Contract

Article 330． A technology development contract is a contract formed by the parties with respect to research and development of a new technology, new product, new technique or new materials and their respective systems.
A technology development contract may be a commissioned development contract or a cooperative development contract.
A technology development contract shall be in written form.
With respect to a contract formed by the parties to carry out the transformation of the technological achievements that have industrial application value, reference shall be made to the provisions governing technology development contracts.

Article 331． The principal of a commissioned development contract shall pay the expenditures for the research and development work and remuneration; provide technical materials and original data; complete matters of cooperation; and accept the research and development achievements as agreed.

Article 332． The research and development party of a commissioned development contract shall formulate and implement the research and development plan, use the research and development funds in a reasonable manner, complete the research and development work as scheduled, deliver the research and development achievements; provide relevant technical information and necessary technical guidance, and assist the principal in mastering the research and development achievements as agreed.

Article 333． If the principal breaches the agreement leading to the cessation, delay or failure of the research and development work, the principal shall bear liability for breach.

Article 334． If the research and development party breaches the agreement causing the cessation, delay or failure of the research and development work, it shall bear liability for breach.

Article 335． The parties to a cooperative development contract shall make investments, including providing technology as a form of investment, as agreed; shall participate in the research and development work through the division of labor and shall cooperate and coordinate the research and development work.

Article 336． If a party to a cooperative development contract breaches the agreement causing the cessation, delay or failure of the research and development work, such party shall bear liability for breach.

Article 337． If the technology that is the subject of the technology development contract has been made public by a third party, rendering the performance of the technology development contract pointless, any party may rescind the contract.

Article 338． If insurmountable technical difficulties arise during the course of performance of a technology development contract, causing a total or partial failure of the research and development work, the liability for such risk shall be borne in the manner agreed by the parties. If no such agreement exists or the agreement on the allocation of risk is ambiguous and cannot be determined pursuant to the provisions in Article 61 of this Law, such risks shall be allocated by the parties in a reasonable manner.
If a party discovers that the research and development work may fail, in whole or in part, as a result of the provisions in the preceding section, the party shall promptly notify the other party and take appropriate measures to mitigate losses. If such party fails to promptly notify the other party and take appropriate measures, resulting in additional losses, such party shall be liable for the additional losses.

Article 339． Unless otherwise agreed by the parties, the research and development party shall be entitled to the right to apply for the patent of an invention or creation accomplished under the commissioned development. After such party has obtained the patent right, the principal may utilize such patented technology free of charge.
If the research and development party is to transfer its right to apply for a patent, the principal shall have the right of first refusal to assume such patent application right under equal terms and conditions.

Article 340． Unless otherwise agreed by the parties, the parties who cooperate in the joint development shall be entitled to the right to apply for a patent for an invention or creation accomplished under a cooperative development contract. If a party in the cooperative development is to transfer its jointly-owned right to apply for a patent, each of the other parties shall have the right of first refusal to obtain such right under equal terms and conditions.
If a party in the cooperative development declares a waiver of its jointly-owned patent application right, the other party may make an application for such patent right alone, or the other parties may make an application jointly. Once the applicant obtains the patent right, the party that has waived its right to apply for such patent may utilize such patent free of charge.
If one of the parties in the cooperative development does not agree to apply for a patent, none of the other parties may apply for a patent.

Article 341． The right to use, the right to transfer and the manner of benefit distribution of technological secrets developed under a commissioned development contract or a cooperative development contract shall be agreed by the parties. If no agreement exists or the agreement on such matters is ambiguous and cannot be determined pursuant to the provisions in Article 61 of this Law, all parties shall have the right to use or transfer the same; provided that the research and development party in a commissioned development shall not transfer the research and development achievements to a third party before it delivers such achievements to the principal.

Part 3
Technology Transfer Contracts

Article 342． A technology transfer contract includes contracts for the transfer of a patent right, transfer of the right to apply for a patent, transfer of technological secrets and patent licensing contracts.
Technology development contracts shall be in written form.

Article 343． The scope of the utilization of patented technology or the use of technological secrets between the transferor and the transferee may be agreed upon in a technology transfer contract; however, such contract shall not restrict competition in, or the development of, technology.

Article 344． A patent licensing contract shall only be valid during the valid term of the patent. After the expiration of the valid term of the patent right or if the patent right have been declared invalid, the patentee shall not enter into a patent licensing contract with any person with respect to such patent.

Article 345． The licensor in a patent licensing contract shall, in accordance with the agreed upon provisions, grant a license to the licensee to utilize the patented technology, deliver the relevant technical information for the utilization of the patented technology and provide necessary technical guidance.

Article 346． The licensee in a patent licensing contract shall utilize the patented technology in accordance with the agreement, shall not allow any third party that is not licensed in the agreement to utilize such patented technology, and shall pay the license fee in accordance with the agreement.

Article 347． The transferor in a contract for the transfer of technological secrets shall provide technical materials and conduct technical guidance, guarantee the practicality and reliability of the technology and assume the obligation of confidentiality in accordance with the agreement.

Article 348． The transferee in a contract for the transfer of technological secrets shall utilize the technology, pay the license fee and assume the obligation of confidentiality in accordance with the agreement.

Article 349． The transferor in a technology transfer contract shall warrant that it is the lawful owner of the technology provided, and that the technology provided is complete, free of errors, effective and able to accomplish the agreed objective.

Article 350． The transferee in a technology transfer contract shall undertake the obligation of confidentiality with respect to the secret parts of the technology provided by the transferor that have not been made public in accordance with the agreed upon scope and duration.

Article 351． If the transferor fails to transfer the relevant technology as agreed, it shall refund the license fee, in whole or in part, and shall be liable for breach; if the transferor's utilization of the patented technology or use of the technological secrets exceeds the agreed upon scope, or if the transferor breaches the contract by permitting without authorization a third party to utilize the patented technology or to use the technological secrets, the transferor shall cease the act of breach and assume liability for breach; if the transferor breaches its obligation of confidentiality, it shall be liable for breach.

Article 352． If the transferee fails to pay the license fee as agreed, the transferee shall pay the outstanding license fee as well as the agreed late payment penalty. If the transferee still fails to pay the outstanding license fee or pay the late payment penalty, it shall cease utilizing the patented technology or using the technological secrets, return the technical materials and assume liability for breach of contract. If the transferee's utilization of the patented technology or use of the technological secrets exceeds the agreed scope, or if the transferee permits a third party to utilize the patented technology or use the technological secrets without obtaining authorization from the transferor, the transferee shall cease such act of breach and shall assume liability for breach of contract. If the transferee breaches its obligation of confidentiality, its shall assume liability for breach of contract.

Article 353． Unless the parties agree otherwise, if the utilization of the patented technology or use of technological secrets by the transferee pursuant to the agreement infringes upon the lawful rights or interests of another person, the transferor shall bear liability.

Article 354． Based upon the principle of mutual benefit, the parties may provide in the technology transfer contract for the sharing of utilization or usage rights with respect to any subsequent improvement to the technological achievements of the patented technology or technological secrets. If no agreement on the sharing of the rights to such subsequent improvements exists or such agreement is ambiguous and cannot be determined pursuant to the provisions in Article 61 of this Law, no other parties shall have the right to share the technological achievements from any subsequent technical improvements made by a party.

Article 355． Where other laws or administrative regulations for technology import contracts, patents, or patent application contracts provide otherwise, such laws or administrative regulations shall govern.

Part 4
Technical Consulting Contracts and Technical Service Contracts

Article 356． Technical consulting contracts may include contracts that relate to the provision of feasibility studies, technical forecasts, technical investigations on a specific topic, analysis and evaluation reports with respect to a specific technical project.
A technical service contract means a contract under which one party uses its technical knowledge to solve a specific technical problem for another party. A technical service does not include construction contracts or special undertaking contracts.

Article 357． The principal in a technical consulting contract shall, in accordance with the agreement, clarify the issue(s) for consultation; provide technical background information and relevant technical materials and data; accept the work achievements of the commissioned party and pay the remuneration.

Article 358． The commissioned party in a technical consulting contract shall, within the agreed time limit, complete the consulting report or provide answers to problems; the consulting report provided shall meet the agreed upon requirements.

Article 359． If the principal in a technical consulting contract fails to provide the necessary materials and data as agreed, thereby affecting the progress and quality of the work, or does not accept or delays acceptance of the work achievements, it shall not demand a refund of the remuneration already paid and shall pay any remuneration due.
If the commissioned party in a technical consulting contract fails to provide its consultation report at the scheduled time, or the consultation report provided does not meet the agreed requirements, it shall reduce or waive its remuneration as a liability for breach of contract.
Unless otherwise agreed by the parties, if the commissioned party in a technical consulting contract provides a consultation report and opinions that meet the agreed requirements and the principal makes a decision based upon such reports and opinions that results in damages, such damages shall be borne by the principal.

Article 360． The principal in a technical service contract shall, in accordance with the agreed provisions, provide working conditions, complete matters of support, accept the work achievements and pay the remuneration.

Article 361． The commissioned party in a technical service contract shall, in accordance with the agreed provisions, complete the service work, solve technical problems, warrant the quality of the work, and impart know-how for solving technical problems.

Article 362． If the principal in a technical service contract fails to perform its obligations as agreed, or the performance of its obligation does not conform to the agreement, thereby affecting the progress and quality of the work; or if the principal does not accept or is remiss in accepting the work achievements, it shall not demand a refund of the remuneration already paid, and shall pay any remuneration due.
If the commissioned party in a technical service contract fails to complete the work as agreed in the contract, it shall waive its remuneration as a liability for breach of contract.

Article 363． The commissioned party shall be entitled to any new technological achievements developed by the commissioned party during the course of its performance of the technical consulting contract or technical service contract through its use of technical materials and working conditions provided by the principal. The principal shall be entitled to any new technological achievements developed by the principal by using the work achievements of the commissioned party. If the parties have otherwise agreed, such agreement shall apply.

Article 364． If the laws and administrative regulations have provisions for Technology Brokerage Contracts, Technology Training Contracts, such provisions shall govern.

Chapter XIX
Bailment Contracts

Article 365． A bailment contract is a contract under which the bailee safe-keeps an object delivered by the bailor and returns such object to the bailor.

Article 366． The bailor shall pay to the bailee the bailment fee as agreed.
If the parties have not agreed upon a bailment fee, or the agreement on the bailment fee is ambiguous and cannot be determined pursuant to the provisions in Article 61 of this Law, the bailment shall be gratuitous.

Article 367． Unless otherwise agreed by the parties, the bailment contract is concluded at the time the object is delivered.

Article 368． Unless a customary business practice exists to the contrary, the bailee shall provide a bailment certificate when the bailor delivers the object to the bailee.

Article 369． The bailee shall properly safe-keep the object under bailment.
The parties may agree upon the location or method of the bailment. The location or method of bailment of the object shall not be changed without authorization, except in case of an emergency or for the protection of the interests of the bailor.

Article 370． If the object delivered to the bailee has a defect or requires special measures of care due to the nature of the object, the bailor shall inform the bailee of the relevant circumstances. If the bailor fails to so inform the bailee, resulting in damages to the object, the bailee shall not be liable for damages to the object; if the bailee incurs damages as a result, the bailor shall be liable for damages, unless the bailee knew or should have known that the object delivered had a defect or required special measures of care and failed to take remedial measures.

Article 371． Unless otherwise agreed by the parties, the bailee shall not turn the object over to a third party for bailment.
If the bailee turns over the object to a third party for bailment in violation of the provision in the preceding section, thereby causing damage to, or loss of, the object, the bailee shall be liable for damages.

Article 372． Unless otherwise agreed by the parties, the bailee shall not use or permit a third party to use the object.

Article 373． If a third party exercises a claim of right to the object, the bailee shall perform the obligation of returning the object to the bailor, unless the object is subject to preservation or specific performance pursuant to the law.
If the third party institutes an action against the bailee or applies for an attachment of the object, the bailee shall promptly notify the bailor.

Article 374． If the bailee improperly safe-keeps the object during the period of bailment, causing destruction, damage to, or loss of, the object, the bailee shall be liable for damages. However, if the bailment is gratuitous and the bailee proves that it was not grossly negligent, the bailee shall not be liable for damages.

Article 375． If the object for bailment is currency, negotiable securities or other valuable objects, the bailor shall make a declaration of such to the bailee, and the bailee shall carry out an acceptance inspection or seal up such object for bailment. If the bailor fails to make such declaration and the object is damaged, destroyed or lost, the bailee may compensate the bailor as if such object were an ordinary object.

Article 376． The bailor may retrieve the object at any time.
If the parties have not agreed upon the bailment period, or the agreement on the bailment period is ambiguous, the bailee may, at any time, demand the bailor to retrieve the object. If the bailment period has been agreed upon, the bailee shall not, in the absence of a special reason, demand the bailor to retrieve the object prior to the expiration of the period.

Article 377． Upon the expiration of the bailment period or upon the bailor's early retrieval of the bailed object, the bailee shall return to the bailor the original object and any fruits derived therefrom.

Article 378． If the object under bailment is currency, the bailee may return currency of the same type and amount. For other replaceable objects under bailment, the bailee may return objects of the same kind, quality and quantity as agreed.

Article 379． Under a bailment contract that is non-gratuitous, the bailor shall pay the bailment fee to the bailee within the agreed time.
If the parties have not agreed on the time of payment, or the agreement on the time of payment is ambiguous and cannot be determined pursuant to the provisions in Article 61 of this Law, the fee shall be paid at the time the object is retrieved.

Article 380． Unless otherwise agreed by the parties, if the bailor fails to pay the bailment fee and other fees as agreed, the bailee shall have possessory lien rights to the object.

Chapter XX
Warehousing Contracts

Article 381． A warehousing contract is a contract under which a warehouseman stores goods delivered by the bailor and the bailor pays the warehousing fee.

Article 382． A warehousing contract shall become effective upon the conclusion of the contract.

Article 383． If perishable goods or hazardous goods such as combustible, explosive, poisonous, corrosive or radioactive goods are to be stored, the bailor shall specify the nature of such goods and provide relevant information.
If the bailor violates the provisions in the preceding section, the warehouseman may refuse to accept the goods for storage, or may take appropriate measures to prevent the occurrence of damage thereto, and the expenses incurred thereby shall be borne by the bailor.
If hazardous goods such as combustible, explosive, poisonous, corrosive or radioactive goods are to be stored, the warehouseman shall have the appropriate storage conditions for such goods.

Article 384． The warehouseman shall carry out an acceptance inspection on the goods to be stored in the warehouse as agreed. If during the course of the acceptance inspection, the warehouseman discovers that any of the goods does not conform to the agreement, it shall promptly notify the bailor of such non-conformity. After the acceptance inspection by the warehouseman, the warehouseman shall be liable for damages to the extent the type, quantity or quality of the goods fails to conform to the agreement.

Article 385． Upon the delivery of the goods by the bailor for storage, the warehouseman shall issue a warehouse receipt to the bailor.

Article 386． The warehouseman shall sign or affix a seal on the warehouse receipt. A warehouse receipt includes the following items:
(1) title or name and address of the bailor;
(2) type, quantity, quality, packaging, number of items and labeling of the goods;
(3) standard of wear and tear on the goods;
(4) location of storage;
(5) storage period;
(6) warehousing charge;
(7) policy amount, term of insurance and name of the insurer if insurance coverage has been obtained for the goods; and
(8) name of the issuer, place and date of issue of the warehouse receipt.

Article 387． The warehouse receipt is the voucher used to claim the stored goods. The bailor or the person in possession of the warehouse receipt may transfer the right to claim the goods if he or she has endorsed the warehouse receipt and the warehouseman has signed or affixed a seal thereon.

Article 388． The warehouseman shall, at the request of the bailor or person in possession of the warehouse receipt, consent to his or her inspection of the stored goods or his or her retrieval of the samples therefrom.

Article 389． If the warehouseman discovers any deterioration in, or other forms of damage to, the stored goods, it shall promptly notify the bailor or person in possession of the warehouse receipt.

Article 390． If the warehouseman discovers a deterioration in, or other forms of damages to, the stored goods, which endangers the safety or normal safekeeping of other stored goods, it shall demand the bailor or person in possession of the warehouse receipt to make the necessary disposal of the stored goods. In an emergency situation, the warehouseman may make the necessary disposal, provided that the bailor or person in possession of the warehouse receipt is notified of the situation promptly thereafter.

Article 391． If the parties have not agreed on the storage period or the agreement on the storage period is ambiguous, the bailor or person in possession of the warehouse receipt may retrieve the stored goods at any time. The warehouseman may, at any time, require the bailor or person in possession of warehouse receipt to retrieve the stored goods, provided that necessary preparatory time is given.

Article 392． Upon the expiration of the storage period, the bailor or person in possession of the warehouse receipt shall retrieve the stored goods with the warehouse receipt. If the bailor or person in possession of the warehouse receipt retrieves the stored goods after the expiration of the storage period, an additional warehousing fee shall be imposed. If the bailor or person in possession of the warehouse receipt retrieves the warehoused goods in advance, the warehousing fee shall not be reduced.

Article 393． If the bailor or person in possession of the warehouse receipt fails to retrieve the stored goods upon expiration of the storage period, the warehouseman may demand that the stored goods be retrieved within a reasonable period; if the stored goods are not retrieved after such reasonable period, the warehouseman may escrow the stored goods.

Article 394． During the storage period, if the stored goods are damaged, destroyed or lost due to the improper safekeeping of the warehouseman, the warehouseman shall be liable for damages.
If the deterioration in, or damage to, the stored goods is caused due to the nature of the goods, non-conformity with the agreed packaging or storage of the goods beyond the expiration of the effective storage period, the warehouseman shall not be liable for damages.
Article 395 Matters not covered by the provisions in this Chapter shall be governed by the relevant provisions in Bailment Contracts.

Chapter XXI
Agency Contracts

Article 396． An agency contract is a contract under which the agent handles matters for the principal as agreed by the principal and the agent.

Article 397． The principal may entrust an agent to handle one or several particular matters. The principal may also entrust an agent to handle all matters in general.

Article 398． The principal shall pay in advance the necessary expenses for handling the matters to be entrusted. The principal shall reimburse the agent for any necessary expenses advanced by the agent for handling the matters entrusted to it, as well as the interest thereon.

Article 399． The agent shall handle the entrusted matters according to the instructions of the principal. Where a change to the principal's instructions is necessary, it shall be consented to by the principal. In an emergency situation in which contact with the principal is difficult, the agent shall handle the entrusted matters in a proper manner, and promptly thereafter shall notify the principal of the situation.

Article 400． The agent shall personally handle the matters entrusted to it. Upon consent of the principal, the agent may re-entrust the matter to another. After the re-entrustment is consented to, the principal may directly instruct the third person to whom such matters are re-entrusted, and the agent shall bear liability only with respect to the selection and appointment of the third person and its instructions given to the third person. Where the re-entrustment is not consented to, the agent shall bear liability for the acts of the third person, unless the agent needs to re-entrust such matters for the protection of the interests of principal due to an emergency.

Article 401． The agent shall report the status of the handling of the entrusted matter in accordance with the requirements of the principal. Upon the termination of the agency contract, the agent shall report to the principal on the outcome of the matters entrusted.

Article 402． Where the agent uses its own name to enter into a contract with a third party within the scope authorized by the principal, and the third party is aware, at the time of the formation of the contract, of the agency relationship between the agent and the principal, such contract shall bind directly the principal and the third party, unless clear evidence exists that proves that such contract binds only the agent and the third party.

Article 403． When the agent uses its own name to enter into a contract with a third party, and the third party has no knowledge of the agency relationship between the agent and the principal, and for reasons attributable to the third party, the agent fails to perform its obligations toward the principal, the agent shall disclose the third party to the principal, who may thereby exercise the rights of the agent against the third party, unless the third party would not have entered into the contract if it had knowledge of the principal at the time the contract was formed.
If for reasons attributable to the principal, the agent fails to perform its obligations toward the third party, the agent shall disclose the principal to the third party. The third party may thereby elect to assert its rights against the agent or the principal as the opposite party; however, the third party shall not change its selection of the opposite party.
If the principal exercises the rights of the agent against the third party, the third party may claim against the principal any defense that it has against the agent. If the third party selects the principal as the opposite party, the principal may claim against the third party any defense that it has against the agent, as well as any defense the agent has against the third party.

Article 404． Any property obtained from handling the matters entrusted by the agent shall be turned over to the principal.

Article 405． If the agent completes the entrusted matters, the principal shall pay remuneration to the agent. If for reasons not attributable to the agent, the agency contract is rescinded or the entrusted matters are unable to be completed, the principal shall pay the agent an appropriate remuneration. If the parties otherwise agree, such agreement shall apply.

Article 406． Under an agency contract that is non-gratuitous, the principal may demand compensation for damages caused by the fault of the agent. Under an agency contract that is gratuitous, the principal may demand compensation for damages caused by the intentional act or gross negligence of the agent.
The agent shall compensate the principal for any damages caused by acts beyond the scope of the agent's authority.

Article 407． If the agent sustains damages during the course of handling the entrusted matters due to reasons not attributable to itself, the agent may demand compensation from the principal for such damages.

Article 408． Upon consent of the agent, the principal may entrust a third party, in addition to the agent, to handle the entrusted matters. If as a result, damages are caused to the agent, the agent may demand the principal to compensate for such damages.

Article 409． Where two or more agents handle the same entrusted matter, the agents shall be jointly and severally liable toward the principal.

Article 410． The principal or the agent may rescind the agency contract at any time. Any damages caused to the other party as a result of the rescission of the agency contract shall be compensated, unless the reason for such rescission is not attributable to the rescinding party.

Article 411． Unless the parties have otherwise agreed, or the contract is not suitable for termination given the nature of the entrusted matter, the agency contract shall terminate upon the death, loss of the civil capacity or bankruptcy of the principal or the agent.

Article 412． If the termination of the agency contract due to the death, loss of civil capacity or bankruptcy of the principal would result in the impairment of the interests of the principal, the agent shall continue handling the entrusted matters until the successor or legal representative of the principal, or a liquidation organization undertakes the entrusted matter.

Article 413． If the death, loss of civil capacity or bankruptcy of the agent leads to the termination of the agency contract, the successor, legal representative or liquidation organization of the agent shall notify the principal in a timely manner. If the termination of the agency contract would impair the interests of the principal, the successor or legal representative of the agent, or a liquidation organization shall take any necessary measures prior to any subsequent arrangements made by the principal.

Chapter XXII
Commission Agency Contracts

Article 414． A commission agency contract is a contract under which the commission agent uses its own name to engage in trade activities on behalf of the principal, and the principal pays a remuneration to the commission agent.

Article 415． Unless otherwise agreed by the parties, the expenses incurred by the commission agent engaged in handling the matters entrusted shall be borne by the commission agent.

Article 416． While the commission agent has possession of the entrusted object, it shall properly safe-keep such object.

Article 417． Where the entrusted goods are defective, perishable or susceptible to deterioration at the time of delivery to the commission agent, the commission agent may dispose of the goods upon the consent of the principal. If the commission agent is unable to contact the principal in a timely manner, the agent may dispose of the entrusted goods in a reasonable manner.

Article 418． The consent of the principal shall be obtained when selling goods at a price lower than the one designated by the principal, or when buying goods at a price higher than the one designated by the principal. If the principal does not consent, but the commission agent makes up for the price difference, the sale shall be deemed effective as to the principal.
If a commission agent sells goods at a price higher than the one designated by the principal or purchases goods at a price lower that the price designated by the principal, the remuneration of the commission agent may be increased as agreed. Where an increase in remuneration is not agreed or the agreement on the increase in remuneration is ambiguous and cannot be determined pursuant to the provisions in Article 61 of this Law, the principal shall be entitled to such benefit.
If the principal has given specific instructions as to the price of the goods, the commission agent shall not purchase or sell goods in violation of such instructions.

Article 419． Unless the principal expresses to the contrary, the commission agent itself may act as the purchaser or seller of goods in purchasing or selling goods with a fixed market price.
If the situation described in the preceding section applies to the commission agent, it may still demand the principal to pay remuneration.

Article 420． When the commission agent purchases goods as agreed, the principal shall accept the entrusted goods in a timely manner. If after a demand by the commission agent, the principal refuses to accept the goods without proper reason, the commission agent may escrow the entrusted goods pursuant to the provisions in Article 101 of this Law.
If the goods cannot be sold or the principal revokes the sale, and the principal fails to either retrieve or dispose of such goods after a demand by the commission agent, the commission agent may escrow the entrusted goods pursuant to the provisions in Article 101 of this Law.

Article 421． If a commission agent enters into a contract with a third party, the commission agent shall directly assume the rights and obligations in such contract.
Unless otherwise agreed by the commission agent and principal, if the third party fails to perform its obligations, resulting in damages to the principal, the agent shall be liable for damages.

Article 422． After the commission agent has completed the entrusted matter, in whole or in part, the principal shall pay the commensurate remuneration to the commission agent. Unless otherwise agreed by the parties, if the principal fails to pay the remuneration on time, the commission agent shall have possessory lien rights to the entrusted goods.

Article 423． Matters not covered by the provisions in this Chapter shall be governed by the relevant provisions in Agency Contracts.

Chapter XXIII
Brokerage Contracts

Article 424． A brokerage contract is a contract under which the broker informs the principal of an opportunity to form a contract, or provides the principal with brokerage services for the formation of a contract, and the principal pays the remuneration.

Article 425． The broker shall provide the principal with truthful information with respect to matters related to the formation of the contract.
If the broker intentionally conceals important facts related to the formation of a contract or provides false information, thereby impairing the interests of the principal, the broker shall not demand that remuneration be paid and shall be liable for damages.

Article 426． If the broker facilitates the conclusion of a contract, the principal shall pay the remuneration as agreed. If the remuneration for the broker is not agreed, or the agreement on remuneration is ambiguous and cannot be determined pursuant to the provisions in Article 61 of this Law, it shall be determined reasonably based on the labor or work of the broker. If the broker provides brokerage services for the formation of such contract, and such services facilitate the conclusion of the contract, the remuneration to the broker shall be borne equally by the parties to the contract.
When the broker facilitates the conclusion of a contract, the expenses for the brokerage activities shall be borne by the broker.

Article 427． If the broker fails to facilitate the conclusion of the contract, the broker shall not demand payment of remuneration; however, it may demand the principal to pay the expenses necessary for the brokerage activities.

Supplementary Provisions

Article 428． This Law shall take effect on October 1, 1999. At such time, the Law of the People's Republic of China on Economic Contracts, the Law of the People's Republic of China on Economic Contracts involving Foreign Interests and the Law of the People's Republic of China on Technology Contracts shall be repealed.
The revised Copyright Law of the People’s Republic China was adopted by the Standing Committee of the National People’s Congress on 27 October, 2001. The revised Law has not only fulfilled the requirements set forth in the TRIPS Agreement, but also well responded to the challenges in copyright protection due to the rapid scientific and technical development. Through the revision, some problems existing for years in copyright protection in China has finally been solved.

The major changes to the Chinese Copyright Law are as follows:

Incorporating right of rental and right of information distribution on internet to copyright: right of rental refers to the right to authorise others to temporarily use cinematographic works or works created by means similar to that for producing cinematographic works, or computer software; right of information distribution on network refers to the right to communicate to the public works, by wire or wireless means, including the making available to the public of their works in such a way that member of the public may access these works from a place and at a time individually chosen by them (See Article 10 of the Copyright Law);

Providing the protection on databases: databases created by compilation of data that do not constitute works, and having originality in the selection and arrangement of the contents are protected as works of compilation (See Article 14 of the Copyright Law);

Expanding the performer’s right: Performers have the right to authorise others to reproduce and distribute sound/video recording products including their performance, to distribute their performance through information network, and the right to receive remuneration;

Adding the right of sound/video recording producers: The producers of sound/video recording products have the right to authorise others to rent or distribute through information network their sound/video recording products to the public, and the right to receive remuneration;

Providing more legal remedies for copyright infringees:

Specifying the methods for calculating the amount of compensation for damages: The amount of compensation for damages may be calculated according to the real loss of the copyright owner or the infringer’s income, plus the reasonable expenses in stopping the infringement borne by the copyright owner; where the damages cannot be calculated by either of the above methods, the court may fix the compensation for damages to an amount up to RMB 500,000 yuan (Article 48 of the Copyright Law);

Adopting the pre-trial injunction for suspension of alleged infringement and property preservation measure: If the copyright owner has eidence that the infringer is conducting or is going to conduct an infringing act which is most likely to cause irreparable damages to his legitimate rights and interests, he may file a request with the People’s Court to order the infringer to suspend the alleged infringement or adopt the property preservation measure before instituting legal proceedings (Article 49 of the Copyright Law);

Adding the evidence preservation measure: Where the evidence is likely to be destroyed, or where it is difficult to obtain the proofs in the future, the copyright owner may apply to the People’s Court for the preservation of evidence (Article 50 of the Copyright Law);

Adding the provision for legal liabilities of publishers, producers, distributors and renters of reproductions of works; where publishers, producers, distributors and renters of reproductions of works cannot prove that their reproductions have legitimate source, they shall bear legal liabilities (Article 52 of the Copyright Law);

Adding the requirement for concluding a written contract for assignment of copyright: where the property right incorporated in a copyright, as specified in the law, is transferred, a written contract shall be concluded (Article 25 of the Copyright Law).