How to deal with infringers using false company address in China?

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(Author: Dr. Jian Xu, the China IP Blogger)

Infringers frequently use false company address when registering with China’s AIC (similar to UK’s companies house).  The petitioner can consider reporting such false company address to the local AIC as an additional way to combating infringers. Sometimes it can lead to the infringer’s business registration being revoked.

Infringers also relocate their business frequently to avoid being caught, but they usually forget to amend their business address with the local AIC. Again, the petitioner can report such behaviour to local AIC to give the infringer another hit.

Actually, there are several legal situations where it is mandatory for a company to carry out amendment registration upon its relocation.  For instance, according to Article 17 of Administrative Regulations of PRC Governing the Registration of Corporate Legal Person, “A corporation which needs to amend details regarding its name, domicile, business premises, legal representative, economic nature, scope of business, registered capital or duration of operations, or needs to register the establishment or abolition of a branch organization shall apply to register the amendment”, and according to Article 26 of the Regulations of PRC on the Administration of Company Registration, “To modify any registered item, a company shall apply for registration of modification to the original company registration organ”.

If an infringer has changed its domicile without an AIC modification registration, it shall be punished by the relevant Administration for Industry and Commerce (“AIC”) pursuant to Article 30 of Administrative Regulations of PRC Governing the Registration of Corporate Legal Person which provides that ”A competent registration organ may, depending on the circumstances, issue a warning, impose a fine, confiscate illegal income, order the suspension of business operations until the matter is rectified, or confiscate or revoke a Corporate Business License if a company is involved in any of the following acts:…(2) amending any of the main items of registration without authorization…”.

Moreover, Article 73 of the Regulations of PRC on the Administration of Company Registration provides that “Where a company fails to conduct the relevant registration of modification according to these Regulations for any modification of the company registration items, a company registration organ shall order the company to conduct the registration within a prescribed time limit; and, if the company fails to do so within the prescribed time limit, shall impose a fine of not less than RMB10,000 but not more than RMB100,000. In particular, where the business scope of a company to be modified includes any item which must be reported for approval according to the laws, administrative regulations or decisions of the State Council and such an approval is not acquired, then if the company engages in the relevant business operation without the approval and the case is serious, the company registration organ shall revoke its business licence”.  While according to Article 63 (3) of Detail Implementing Rules of Administrative Regulations of PRC Governing the Registration of Corporate Legal Persons, “Where a company amends any of the main items of registration without authorisation and without modification of registration according to the regulations, the company registration organ shall issue a warning, confiscate illegal income, and impose a fine of under three times of the illegal income, with a limitation of RMB 30, 000.  If there is no illegal income, the company registration organ shall impose a fine of under RMB 10,000, and demand that the company conduct modification of registration within a prescribed period.  If the company did not follow the demand within the prescribed period, the suspension of business operations will be ordered until the matter is rectified, or the Corporate Business Licence will be confiscated.  If the case is serious, the company will have the Corporate Business Licence revoked”.

So, pursuant to the above laws and regulations, the petitioner may file a complaint to the in-charge AIC against the infringer.  For example, an enquiry with Shenzhen AIC on a no names basis shows that it normally takes about 15 days for the in-charge AIC to investigate the case and provide a feedback.  While according to the Provisions on the Procedures for Imposition of Administrative Punishments by the Administrative Authorities for Industry and Commerce, upon accepting the complaint, the AIC shall conclude the case by conducting the investigation and issuing an administrative decision within 90 days.