Final Opportunity to Shape SFDR’s Future in European Commission’s Call for Evidence
On 2 May 2025, the European Commission launched its ‘Call for Evidence’ on the review of the Sustainable Finance Disclosure Regulation (SFDR).
The European Commission aims to review the SFDR to simplify the framework, enhance usability, and prevent greenwashing. Stakeholders are invited to submit general feedback rather than answer specific questions, in contrast to the European Commission’s 2023 SFDR consultations. This is an important opportunity for asset managers and other stakeholders to provide their views on the future of the European Union’s sustainable finance disclosure regime. The European Commission has confirmed there will be no further public consultation following this Call for Evidence, although it may carry out targeted outreach to specific stakeholders or their representatives.
There is a general momentum in the European Union to streamline sustainability reporting, as seen under the ‘Omnibus’ initiative on corporate sustainability reporting and due diligence requirements. The Call for Evidence notes that the SFDR review will aim for greater alignment and to strengthen the coherence of SFDR with the sustainability reporting requirements for companies under the Omnibus amendments to the Corporate Sustainability Reporting Directive (CSRD). This could be particularly relevant in relation to developments on the principal adverse impact indicators (PAIs) present in both CSRD and SFDR.
The Call for Evidence states that, generally, SFDR has been effective in increasing transparency and giving investors access to detailed ESG information. Nevertheless, the European Commission notes concerns about the lack of legal clarity on key concepts, the limited relevance of certain disclosure requirements, overlaps and inconsistencies with other parts of the sustainable finance framework, and data availability concerns. As a result, there is a risk of greenwashing and an “unwarranted exclusion of some sectors because of how some rules are applied in practice,” according to the European Commission.
Of particular note for private markets clients is that the Call for Evidence suggests that an objective and policy option should be to consider different investor groups and types of financial products, as well as the international reach and exposures of investments. Feedback submitted could explore retaining the flawed but flexible Article 8, SFDR fund categorisation with the promotion of environmental and/or social characteristics or the merits of a more prescriptive new labelling regime, as envisaged by the Sustainable Finance Platform, which we reported on here.
The deadline for feedback is 30 May 2025, with the European Commission confirming that its revision of SFDR is in its work programme for Q4 2025 (coinciding with the CSRD Omnibus updates). After a lengthy wait, it seems it is now full pace ahead for a revised SFDR.
Constitutional Reform Initiative Regarding Pharmaceutical Sovereignty and Safety
On April 22, 2025, a proposal was submitted to the Deputies Chamber proposing to reform articles 4, 25 and 28 of the Mexican Constitution, regarding pharmaceutical sovereignty and security.
The proposal appoints the modification of the legal framework at the constitutional level so that the State is required to guarantee pharmaceutical sovereignty and security, which in turn is intended to allow the subsequent adaptation of secondary laws, programs and budgets with a long-term vision.
This reform mainly states the following:
The State will guarantee access to biological medicines, vaccines and medical devices by promoting the national production, storage and distribution of essential health products.
Pharmaceutical sovereignty and security will be fundamental principles to ensure the timely supply of such products, especially those of public interest and high impact on health.
The State will promote the development and strengthening of the national pharmaceutical industry, through public policies that encourage research, production and distribution of medicines recognized by law and that are strategic for the population, guaranteeing the reduction of external dependence in the acquisition of critical products for health.
It defines as functions of strategic areas the production, storage and distribution of medicines, biologicals, vaccines and medical devices essential for public health and therefore exempts them from being considered as monopolies, with the objective of guaranteeing universal access to indispensable treatments.
If approved, this initiative would undoubtedly have an impact on Mexican health legislation and, of course, would imply the modification of processes for the evaluation and approval of health products, as well as the authorization of activities in establishments focused on the production, manufacture, storage and distribution of health products.
In other words, the effects of this proposal translate into drastic changes in the system of production of health products that are known today, so that if it is not analyzed harmoniously with the applicable legislation and the international treaties, in cooperation with the institutions and entities involved in the corresponding processes, as well as the subjects involved in the health system, it could complicate the due access to health products to the detriment of the patients.
Choose Your GenAI Model Providers, Models, and Use Cases Wisely
Generative AI (GenAI) vendors, models, and uses cases are not created equal. Model providers must be trusted to handle sensitive data. Models, like tools in a toolbox, may be better suited for some jobs than others. Use cases vary widely in risk.
When it comes to selection of GenAI model providers (e.g., tech companies and others offering models) and their models, due diligence is wise. For example, DeepSeek dominated headlines in early 2025 as a trendy pick for high performance and lower cost GenAI models. But not everyone is sold. A number of U.S. states and the federal government are reportedly implementing or considering bans because the models allegedly transfer user data to China, among other concerns.
Before selecting a provider and model, it is important to learn where the provider is located; where data is transferred and stored; where and how the training data was sourced; compliance with the NIST AI risk management framework, ISO/IEC 42001:2023, and other voluntary standards; impact or risk assessments under the EU AI Act, Colorado AI Act, and other laws; guardrails and other safety features built into the model; and performance metrics of the model relative to planned use cases. This information may be learned from the “model card” and other documentation for each model, conversations with the provider, and other research. And, of course, the contractual terms governing the provider relationship and model usage are critical. Key issues include IP ownership, confidentiality and data protection, cybersecurity, liability, reps and warranties, and indemnification.
Once the appropriate provider and model are selected, the job is not done. Use cases must also be scrutinized. Even if a particular GenAI model is approved for use generally, what it is used for still matters (a lot). It may be relatively low risk to use an AI model for one purpose (e.g., summarizing documents), but the risk may increase for another purpose (e.g., autonomous resume screening). Companies should calibrate their risk tolerance for AI use cases, leaning on a cross-functional AI advisory committee. Use cases should be vetted to mitigate risks including loss of IP ownership, loss of confidentiality, hallucination and inaccuracies in outputs, IP infringement, non-unique outputs, and biased and discriminatory outputs and outcomes. If GenAI is already being used by employees in an ad hoc manner before a formal governance framework is implemented, identify such use though the advisory committee and other outreach, and prioritize higher-risk use cases for review and potential action.
Once enterprise risk tolerance is calibrated, AI usage policies and employee training should be rolled out. The policy and training should articulate which models and use cases are (and are not) permitted and explain the “why” behind the decisions to help contextualize important risks for employees. Policies should consider both existing laws and voluntary frameworks like NIST and ISO/IEC and should remain living documents subject to regular review and revision as the legal and technological landscape continue evolving rapidly. Employee training is not only a good idea, but may also be a legal mandate, e.g., under the “AI literacy” requirement of the EU AI Act for companies doing business in the EU.
Bottom line: all businesses and their employees will soon be using GenAI in day-to-day operations—if they are not already. To mitigate risk, carefully select your vendors, models, and uses cases, and implement policies and training reflecting enterprise risk tolerance.
China’s National Intellectual Property Releases RFC for Draft Patent Examination Guidelines Targeting Video Codecs
On April 30, 2025, China’s National Intellectual Property Administration (CNIPA) released a draft amendment for comment of the Patent Examination Guidelines (专利审查指南修改草案 (征求意见)), which is somewhat analogous to the US Patent & Trademark Office’s Manual of Patent Examining Procedure. One of the main proposed changes is the addition of a section tightening examination standards for video codec patent applications. CNIPA explained, in part, that the purpose of the addition was to “provide the right holder with the option of claiming rights to one of the links” (e.g., generation, storage and transmission of bitstreams) and prevent the “right holder from claiming rights to multiple links of the streaming industry and obtain licensing income that is disproportionate to their technical contributions.”
Comments are due June 15, 2025. A translation of the proposed bitstream addition and drafting notes follow. The full text is available here (Chinese only).
Proposed Addition
Part II Chapter 9
7. Provisions on the Examination of Invention Patent Applications Containing Bitstreams In application fields such as streaming media, communication systems, and computer systems, various types of data are generally generated, stored, and transmitted in the form of bitstreams. This section aims to make specific provisions on the examination of the protected object of invention patent applications containing bitstreams and the drafting of specifications and claims in accordance with the provisions of the Patent Law and its implementing regulations.
7.1 Examination of protected object
7.1.1 Applications that are not patentable
If the subject matter of a claim only involves a simple bitstream, the claim falls within the rules and methods of intellectual activities stipulated in Article 25, paragraph 1, item (2) of the Patent Law and does not fall within the subject matter of patent protection. If a claim, except for the title of its subject matter, all the contents that limit it only involve a simple bitstream, the claim falls within the rules and methods of intellectual activities stipulated in Article 25, paragraph 1, item (2) of the Patent Law and does not fall within the subject matter of patent protection.
7.1.2 Patentable applications In the technical field of digital video encoding/decoding,
If a specific video encoding/decoding method for generating a bitstream belongs to the technical solution described in Article 2, Paragraph 2 of the Patent Law, then the method for storing or transmitting the bitstream and the computer-readable storage medium for storing the bitstream defined by the specific video encoding/decoding method can achieve the optimization configuration of storage or transmission resources, etc. Therefore, the storage or transmission method and the computer-readable storage medium defined by the specific video encoding/decoding method belong to the technical solution described in Article 2, Paragraph 2 of the Patent Law and are the subject of patent protection.
7.2 Writing of the specification
The specification of an invention patent application containing a bitstream generated by a specific video encoding/decoding method shall make a clear and complete description of the specific video encoding/decoding method, which shall be implemented by a technician in the relevant technical field. If the subject of protection involves the method for storing or transmitting the bitstream and the computer-readable storage medium for storing the bitstream, the specification shall also make corresponding descriptions to support the claims.
7.3 Drafting of claims
An invention patent application that includes a bitstream generated by a specific video encoding/decoding method can be drafted as a method, device, and computer-readable storage medium claim. In the claims of an invention patent application, the specific video encoding/decoding method claim for generating the bitstream should generally be used as the basis, and the corresponding storage method, transmission method, and/or computer-readable storage medium claim should be drafted by citing the specific video encoding/decoding method claim or including all the features of the specific video encoding/decoding method.
[Example 1] An invention patent application related to “a video encoding method” can draft claims in the following manner.
A video encoding method, characterized in that it includes the following steps: obtaining a frame image to be encoded, dividing the current frame image into multiple image blocks; selecting at least one reference frame from the encoded frames; for each image block, searching for the best matching block in the reference frame, and calculating the motion vector between the image block and the best matching block; obtaining a prediction block from the reference frame according to the motion vector; calculating the residual between the image block and the prediction block; transforming and quantizing the residual to generate a quantization coefficient; performing entropy coding on the quantization coefficient and the motion vector to generate a bit stream.
A video encoding device, characterized in that it includes the following units: a frame image division unit, which obtains the current frame image to be encoded and divides the current frame image into multiple image blocks; a reference frame selection unit, which selects at least one reference frame from the encoded frame; a motion vector calculation unit, which searches for the best matching block in the reference frame for each image block and calculates the motion vector between the image block and the best matching block; a prediction block acquisition unit, which obtains the prediction block from the reference frame according to the motion vector; a residual calculation unit, which calculates the residual between the image block and the prediction block; a transform and quantization unit, which transforms and quantizes the residual to generate a quantization coefficient; an entropy coding unit, which entropy codes the quantization coefficient and the motion vector to generate a bit stream.
A method for storing a bit stream, comprising storing the bit stream in a storage medium, characterized in that the bit stream is generated by the method of claim 1.
A method for transmitting a bit stream, comprising transmitting the bit stream, characterized in that the bit stream is generated by the method of claim 1.
A computer-readable storage medium having a bit stream stored thereon, wherein the bit stream is generated by the method of claim 1.
Drafting Notes
(V) Section 7 of Chapter 9 of Part II on the examination of invention patent applications containing bitstreams
In order to adapt to the new situation of the rapid development of the streaming media industry, adapt to the new changes brought about by the continuous evolution of streaming media related technologies and application scenarios, respond to the demands of innovation entities to further strengthen patent protection for multiple links in the streaming media industry chain such as generation, storage, and transmission, and actively connect with international high-standard patent examination and protection rules, Section 7 “Related provisions on the examination of invention patent applications containing bitstreams” is added to Chapter 9 of Part II. The main contents include:
Examination of the object of protection of invention patent applications containing bitstreams
(1) Clarifying the circumstances in which invention patent applications containing bitstreams cannot be granted patent rights
Section 7.1.1 stipulates that if the subject matter of a claim only involves a simple bitstream, it is not an object of patent protection. If a claim, except for its subject name, all the contents that limit it only involve a simple bitstream, it is not an object of patent protection.
(2) Circumstances in which patent rights can be granted for invention patent applications that clearly include bitstreams
Section 7.1.2 stipulates that in the technical field of digital video encoding/decoding, if a specific video encoding/decoding method that generates a bitstream belongs to a technical solution in the sense of patent law, then the method for storing or transmitting the bitstream and the computer-readable storage medium for storing the bitstream defined by the specific video encoding/decoding method belong to the subject of patent protection.
Requirements for writing the specification of invention patent applications that clearly include bitstreams
Section 7.2 clarifies that the specification should fully disclose the specific video encoding/decoding method for generating a bitstream. If the subject matter of the protection involves the method for storing or transmitting the bitstream and the computer-readable storage medium for storing the bitstream, the specification should also make corresponding explanations to support the claims.
Clarify the requirements for the drafting of the claims of invention patent applications containing bitstreams
Section 7.3 clarifies that invention patent applications containing bitstreams generated by specific video encoding/decoding methods can be drafted as method, device and computer-readable storage medium claims, which is intended to regulate that the applicant should generally write the corresponding storage method, transmission method and/or computer-readable storage medium claims based on the specific video encoding/decoding method claim for generating the bitstream, by citing the method claim or including all the features of the method; at the same time, specific drafting examples are given.
It should be noted that, unlike the relatively concentrated industrial chain of the traditional communications industry, the industrial chain of the streaming media industry is relatively dispersed, with multiple links and entities such as generation, storage, and transmission. Therefore, the protection of technical themes involved in multiple links of the streaming media industry in this section is intended to adapt to the new situation and changes in the streaming media industry, and provide the right holder with the option of claiming rights to one of the links, so as to balance the interests of the right holder, implementer and the public, and ensure the sustainable development of the industry, rather than allowing the right holder to claim rights to multiple links of the industry and obtain licensing income that is disproportionate to their technical contributions.
Navigating the Rise in Data Subject Access Requests
Recently, there has been an increase in individual rights activity across Europe, particularly organizations receiving Data Subject Access Requests (DSARs) from former employees. This surge in activity may be attributed to several factors, including economic uncertainty leading to increased redundancies across industries globally and a growing awareness among individuals about their data rights.
Quick Hits
Implementing an internal process for managing individual rights requests will be key to organizations remaining compliant with applicable data protection laws and managing compliance costs.
The role of artificial intelligence and individual rights may lead to organizations undertaking excessive, unnecessary, and costly work when responding to requests.
Organizations that fail to respond to DSARs continue to be actively investigated and penalized by regulators in the EU, the UK, and other jurisdictions.
The current global economic climate has led to a rise in redundancies, and this appears to be prompting former employees to exercise their individual data rights. There has been a marked uptick across Europe in DSAR submissions—or requests to exercise the right for individuals to obtain copies of the information an organization has relating to them. Organizations are faced with dealing with this legal challenge, in many cases for the first time, and en masse. DSARs are also becoming increasingly comprehensive, with requests frequently requiring employers, and organizations in general, to search for, capture, and review all personal information being processed across their often complex digital ecosystems. This trend is likely to continue as economic conditions remain volatile and as individuals become increasingly knowledgeable about their individual data rights, which is in part due to increased data protection activism in the European Union, media coverage, and educational awareness around data privacy.
It also appears that artificial intelligence (AI) tools are being used by individuals to draft their DSARs. Although AI can generate requests that are comprehensive, well-written, and seemingly credible, these requests often include imperfect interpretations of legal requirements, including the applicability of these requirements in a particular context, as well as sometimes confusing circular descriptions; arguably, common traits of AI-generated content that has not undergone human review. This use of AI presents challenges for organizations, and organizations may want to note these when managing DSARs. An organization aiming to be compliant with a DSAR without challenging the accuracy of the request, might end up providing information that is outside of the parameters of the request, disclose commercially sensitive information that it might otherwise withhold, or indeed disclose information it is not legally permitted to disclose such as the personal data relating to other employees.
To effectively respond to the increasing volume and complexity of DSARs, organizations may want to consider the following steps:
Developing and implementing a DSAR response process for handling requests that is both comprehensive and easily operational. Consider including in this process clear procedures for identifying, retrieving, and reviewing personal data.
Undertaking a data-mapping exercise, if this has not already been done, to identify where personal data is processed across an organization’s operations and what systems are involved. This will enable the DSAR response team to easily contact the relevant team or person when a DSAR is received, and to coordinate the quick capture of personal data.
Ensure the organization is familiar with, or capable of quickly finding out, applicable data protection laws and legal timeframes. This can help minimize the risk of repeat DSARs, complaints to supervisory authorities, and potential regulatory fines.
The rise in DSAR activity and increased data rights awareness presents significant challenges for organizations. By establishing a comprehensive and efficient method for responding to these requests, organizations can ensure compliance with data protection laws and mitigate commercial and reputational risks, including reducing compliance costs, business disruption, risk of regulatory scrutiny, and reputational damage.
In addition, organizations may want to verify, using proportionate means, the identity of requestors, consider whether the existence of a DSAR should be reported to other teams in the organization as a wider employment issue, and ensure they remind individuals of their rights regarding their personal data including their right to lodge a complaint with the relevant data protection authority.
Organizations may want to assess their current approach or implement a new process to manage individual rights requests to ensure they are identifying these requests when they are being made, undertaking searches for information to the extent they are legally complied with and in a commercially sensible way, and meeting all applicable legal deadlines.
Failure to comply with up-to-date data protection laws and rules regarding individual rights can lead to commercial and reputational damage. If appropriate measures are not taken, corrective sanctions can be assessed such as significant financial penalties.
France & UK Continue Corporate Criminal Enforcement: SFO Issues New Corporate Guidance
Foreign regulators continue to intensify their efforts to combat bribery and corruption. France’s Anti-Corruption Agency (L’Agence française anticorruption or AFA) recently published its year-in-review for 2024, which showed a nearly ten percent increase in corruption enforcement actions. Half of the offenses involved fraud or deception and 41 percent involved “active” or “passive” corruption. More recently, on April 24, 2025, the UK Serious Fraud Office (“SFO”) issued new corporate guidance, outlining factors it will consider when determining whether to prosecute a company or enter into Deferred Prosecution Agreement (“DPA”) negotiations. Together, these developments further underscore the growing commitment of international enforcement agencies to prioritize bribery and corruption in the corporate context.
The Guidance
The Guidance identifies those factors that the SFO will weigh – including when and how a company should self-report suspected misconduct as well as what constitutes “full” cooperation – when deciding whether a DPA is appropriate. SFO DPA agreements effectively suspend prosecution for a certain period so long as the company satisfies specified conditions and requirements. SFO DPAs are available only to companies, not individuals. Benefits of DPAs and why companies prefer DPA outcomes include avoiding long and expensive trials as well as minimizing the reputational damage of a conviction while still accounting for the relevant criminal behavior.
When considering the importance of self-reporting suspected misconduct, the Guidance states that the SFO does not expect for a company to “fully investigate the matter before self-reporting.” Therefore, companies should be aware that the Guidance makes clear the SFO’s expectation that a company promptly self-report “soon after learning of that evidence” of the suspected criminal conduct. According to the Guidance, when self-reporting, a company should include: (1) “all relevant known facts and evidence concerning the suspected offences”; (2) “the individual(s) involved (both those inside and outside the organization)”; and (3) “the relevant jurisdiction(s).” Ultimately, through self-reporting, the SFO seeks information allowing it “to understand the nature and extent of the suspected offending.”
The Guidance also elaborates on what the SFO considers as constituting “full” cooperation, with cooperation being identified as a “key factor” when determining the outcome of a case as well as the fines and penalties levied. Specifically, the Guidance states that a company that self-reports, but does not exhibit the level of cooperation the SFO expects may not be eligible for a DPA, while a company that does not self-report, but “provide[s] exemplary cooperation” may still be eligible for DPA negotiations. Key indicators of meaningful cooperation include, for instance, preservation of both digital and hard copy materials, disclosure of relevant documents and information, as well as providing a comprehensive account of the suspected misconduct along with identifying all individuals involved. Importantly, even if a company opts to conduct its own internal investigation, the Guidance indicates that early engagement with the SFO is critical when establishing eligibility for a DPA negotiation.
Proactive Steps for Companies
When describing “genuine cooperation” efforts, the Guidance includes “[p]resenting a thorough analysis of the corporate’s compliance programme and procedures in place at the time of offending and how the corporate has remediated, or plans to remediate, any ongoing deficiencies.” In line with previous messaging from both U.S. and foreign enforcement authorities, the Guidance reinforces the expectation that companies maintain a robust, well resourced, and effective compliance program, including proactively evaluating and documenting their compliance efforts both before and after any potential misconduct is identified.
As companies review the Guidance and determine next steps, a strong compliance framework not only helps prevent misconduct but can also significantly mitigate the consequences in the event misconduct should occur, potentially impacting both the outcome of an investigation and the severity of fines or penalties sought. More broadly, effective and robust compliance programs help to mitigate not only bribery and corruption risks, but also money laundering, sanctions issues, human rights violations, and financial fraud risks, among others. Companies with strong compliance programs are better positioned to negotiate favorable outcomes in the event enforcement actions arise, making proactive investment in compliance crucial. To that end, in today’s dynamic regulatory and enforcement landscape, maintaining a well-designed and effective compliance program is critical for companies seeking to mitigate corruption risks.
Takeaways
The SFO’s Guidance signals a greater willingness to resolve corporate cases through DPAs provided that companies timely self-report and demonstrate meaningful cooperation.
Both the Guidance and the UK’s new Failure to Prevent Fraud Offense, emphasize the SFO’s commitment to combating corporate bribery, fraud, and corruption.
While there are similarities between the SFO’s Guidance and existing DOJ guidance around, for instance, cooperation, it will be important for companies to monitor whether further alignment or divergence emerges between UK and US enforcement practices following the current 180-day pause on FCPA enforcement.
Multinational companies should continue to evaluate, assess, and address any potential gaps regarding their compliance programs as foreign regulators, including the SFO, AFA, and the Office of the Attorney General of Switzerland to name a few, ramp up enforcement efforts around corporate bribery and corruption.
Preparing for USTR 301 Fees on Chinese Vessels
Concluding its Section 301 Investigation into “China’s Targeting the Maritime, Logistics, and Shipbuilding Sectors,” the United States Trade Representative (USTR) issued an updated notice of action on April 17. USTR initially issued a proposed action to impose fees on Chinese vessels in the amount of $1 million or $1.5 million per port call. USTR issued the updated notice following President Donald Trump’s April 9 Executive Order 14269, “Restoring America’s Maritime Dominance” (90 Fed. Reg. 15635).
The updated fees will be imposed starting October 14. The fees are structured under four annexes, with Annex I and Annex II being particularly relevant to intermediaries, non-vessel-operating common carriers (NVOCCs), and freight forwarders. Each vessel will be charged only on the initial port call and cannot be charged more than five times per year.
Annex I: Chinese-Owned and Chinese-Operated Vessels
Vessels owned or operated by Chinese entities will be subject to fees based on their net tonnage. The fee starts at $50 per net ton in 2025 and will incrementally increase to $140 per net ton by 2028. Importantly, the fee is assessed at the first US port of entry, regardless of subsequent port calls within the United States.
Annex II: Chinese-Built Vessels
For vessels that are not Chinese-owned or Chinese-operated but are Chinese-built, fees are assessed based on the higher of two metrics:
Net Tonnage: Starting at $18 per net ton and increasing to $33 per net ton over three years.
Container-Based Fee: Starting at $120 per container and increasing to $250 per container over three years. (While the USTR was ambiguous on this point, this per-container fee is likely on a per Twenty-foot Equivalent Unit basis.)
Vessel operators are required to report the number of containers discharged at US ports or with an ultimate destination in US customs territory.
Exemptions and Fee Remissions
Certain vessels are exempt from these fees, including:
Vessels with at least 75% US ownership.
Small vessels under specific size thresholds.
Vessels engaged in short sea shipping (voyages under 2,000 nautical miles).
Additionally, operators can receive fee remissions for up to three years if they order and take delivery of US-built vessels of equivalent or greater capacity within that period.
Annex III: Foreign-Built Car Carrier Vessels
For all foreign-built car carrier vessels, fees are assessed at $150 per Car Equivalent Unit capacity.
Annex IV: Liquefied Natural Gas (LNG) Vessels
One percent of vessels transporting LNG exports must be US-flagged, US-operated starting in 2028, and then in 2029, must be an increasing percentage US-built, US-flagged, and US-operated, increasing to 15% in 2047.
Annex V: Tariffs on Ship-to-Shore (STS) Cranes and Cargo-Handling Equipment from China
Finally, USTR proposed duties on STS cranes and cargo-handling equipment. Comments are due May 19.
Next Steps: Update Your Rules Tariff Terms and Conditions
To adapt to these new fees, it is crucial for freight forwarders and NVOCCs to update their rules tariff terms and conditions. By doing so, you can ensure that these fees are passed through to the appropriate parties, minimizing financial exposure and maintaining operational efficiency.
Time for Some Spring Cleaning? Ombudsman’s Determination Shows Need to Press on With GMP Equalisation
With the Pension Schemes Bill on its way in “late Spring”, now might be a good time for trustees to take stock of their trustee agendas and to brush off some items that may have been left to gather dust. A recent Pensions Ombudsman determination serves as a useful reminder that, for most schemes, GMP equalisation is not yet done and dusted.
The determination concerned a former member of a pension scheme (Mr N), who had taken a transfer out of the scheme some 30 years earlier. His complaint related to seeking a recalculation of his transferred-out benefits in light of the requirement to equalise for GMPs.
The key takeaways from Mr N’s case are that:
Trustees should continue to progress their GMP equalisation projects diligently and promptly. Don’t put off collaborating with the employer or taking professional advice. It is important to formulate and implement an appropriate methodology.
GMP implementation involves many stages and will take some time to complete. The Pensions Ombudsman (TPO) made the point that GMP equalisation is a difficult and complicated project and it is important to ensure it is carried out correctly. TPO said that although it should not be unnecessarily delayed, it is understandable that it will take a reasonable amount of time to implement. Notwithstanding TPO’s comments, trustees should bear in mind that the longer it takes to carry out GMP equalisation, the more likely trustees are going to encounter complaints from members and other beneficiaries.
Good communication with those affected by GMP equalisation projects is paramount. If a member or, indeed, former member asks for an update on progress, provide it. As trustees are painstakingly aware, it is real people who are affected by a delay in the recalculation of benefits. During a cost of living crisis in particular, the uncertainty of being in long-term financial limbo can create anxiety, even if benefit adjustments are likely to be minimal and represent an improvement. Good communication is key.
A Bit of Background
The first Lloyds case in 2018 confirmed a requirement for schemes to equalise for the effect of GMPs. This decision left a lot of unanswered questions, some of which were considered in later judgments. In particular, the November 2020 judgment (Lloyds 3) dealt with the treatment of past transfers. In Lloyds 3, the court ruled that in the case of transfers made under the cash equivalent legislation, the trustee of the Lloyds schemes remained liable for a failure to pay the correct (i.e. equalised) cash equivalent transfer value amount. Note that the position was different where the transfer from the Lloyds schemes was as a result of a bulk transfer, or was a non-statutory individual transfer under the relevant Lloyds scheme rules.
How Was This Relevant to the Case of Mr N?
Mr N had taken a transfer out of his occupational pension scheme some 30 years earlier. It seems not at all surprising that the actual details of Mr N’s benefits were no longer available, although the scheme appears to have retained a record of the transfer out. The lack of data relating to his records formed part of Mr N’s complaint, along with a lack of a plan or timetable for carrying out GMP equalisation. While the pension scheme trustee of Mr N’s former scheme had provided updates to existing members about the Lloyds decisions and the steps that the trustee was taking, it had not, understandably, provided updates to past members.
What Did The Pensions Ombudsman Decide?
TPO agreed with the opinion of his Adjudicator, which was summarised in the determination. Mr N was awarded £500 for distress and inconvenience caused by the trustee’s maladministration. But what maladministration took place?
Lack of a Plan or Timetable for Carrying out GMP Equalisation
What you might expect to form the main basis for a finding of maladministration, did not. The Adjudicator and TPO agreed that in the circumstances of Mr N’s particular scheme, the events complained about were taking place in 2023 so five years since the passing of the first Lloyds decision in 2018 and three since Lloyds 3 and that was not an unreasonable period of time to take to resolve all the issues. The Adjudicator considered all the steps the trustee had taken and was taking to deal with GMP equalisation and thought that those measures (e.g. forming a joint working group with the employer and involving professional advisers to develop and adopt an appropriate methodology), comprised appropriate actions to address the issues. The timescales involved were not considered unreasonable in the circumstances.
Lack of Past Member Records
Likewise, there was no specific criticism of the lack of complete records in relation to Mr N. The Adjudicator noted that TPR guidance does require some limited record retention in relation to past members but, again, the Adjudicator was not so concerned with the retention (or lack of retention) of records in this particular case saying that this did not amount to maladministration. Significantly TPO said that Mr N had failed to show that he incurred any loss as a result of the perceived maladministration.
In case you were wondering, TPR’s record keeping guidance requires the retention of:
member’s name
transfer terms
name of the scheme into or out of which the member has been transferred
transfer date
date of receipt or payment of money or assets.
Lack of Communication with Mr N
This is the hurdle at which the trustee fell. While the Adjudicator acknowledged that it would be difficult for the trustee to easily establish communication with all members impacted by the review, in particular those like Mr N who left the scheme many years before, he considered that it nonetheless had a responsibility to attempt to do so and that it was unclear why the trustee failed to update Mr N, specifically, on progress when it was aware that Mr N was clearly concerned about progress.
In addition, TPO opined “Mr N originally contacted the trustee to ask how the [Lloyds 1] and [Lloyds 3] judgments affected him. Having started that line of communication with the trustee, and provided contact details, the trustee agreed to keep him updated on the progress of the project. However, it did not do so. Therefore, I agree that the trustee’s failure to keep Mr N informed of progress, as it undertook both to Mr N and to TPO to do, will have caused him unnecessary distress and inconvenience.” Mr N was awarded £500 for maladministration.
Some Final Thoughts
This determination, while recognising the complexity of GMP equalisation, does highlight the likelihood that the longer it takes schemes to implement GMP equalisation, the more likely it is that schemes will receive member complaints. Trustees should knock the cobwebs off their GMP equalisation plan and consider it afresh. Outstanding issues should be analysed and addressed, and advice taken where appropriate so that trustees can move forward with good quality data ensuring that members know where they stand in relation to their benefit entitlements.
And if that wasn’t a good enough reason to revisit their GMP equalisation plan, implementation will mean that trustees are one step closer to complying with their general code requirements to keep accurate and complete data, and they will be one step closer to being dashboards ready.
A final thought. In a recent speech at the Pensions Age Conference, Patrick Coyne, Interim Director of Policy and Public Affairs, said that improving data must be the first step to innovation in pensions. He commented on feedback that the pensions industry wants to increase the use of automation and pointed out that “if the data going into the system isn’t up to scratch, you’re automating rubbish.” Enough said!
China Launches Special Campaign to “Clear Up and Rectify the Abuse of AI”
On April 30, 2025, China’s Cyberspace Administration (CAC) launched a 3-month campaign to “clear up and rectify the abuse of AI technology” including using information that infringes on others’ intellectual property rights, privacy rights and other rights. Per the Cyberspace Administration, “the first phase will strengthen the source governance of AI technology, clean up and rectify illegal AI applications, strengthen AI generation and synthesis technology and content identification management, and promote website platforms to improve their detection and identification capabilities. The second phase will focus on the abuse of AI technology to create and publish rumors, false information, pornographic and vulgar content, impersonate others, engage in online water army [paid posters] activities and other prominent issues, and concentrate on cleaning up related illegal and negative information, and deal with and punish illegal accounts, multi-channel networks (MCNs) and website platforms.”
Per the CAC, in the first phase, the focus is on rectifying six prominent problems:
First, illegal AI products by failing to perform large model filing or registration procedures. Providing “one-click undressing” and other functions that violate laws and ethics. Cloning and editing other people’s voices, faces and other biometric information without authorization and consent, infringing on other people’s privacy.
Second, teaching and selling illegal AI product tutorials and products. Teaching tutorial information on how to use illegal AI products to forge face-changing videos, voice-changing audio, etc. Selling illegal “speech synthesizers” and “face-changing tools” and other product information. Marketing, hyping, and promoting illegal AI product information.
Third, lax management of training corpus. Using information that infringes on others’ intellectual property rights, privacy rights and other rights. Using false, invalid, and untrue content crawled from the Internet. Using data from illegal sources. Failure to establish a training corpus management mechanism, and failure to regularly check and clean up illegal corpus.
Fourth, weak security management measures. Failure to establish content review, intent recognition and other security measures that are commensurate with the scale of business. Failure to establish an effective illegal account management mechanism. Failure to conduct regular security self-assessments. Social platforms are unclear about the AI automatic reply and other services accessed through API interfaces, and do not strictly control them.
Fifth, the content identification requirements have not been implemented. The service provider has not added implicit or explicit content identification to deep synthetic content, and has not provided or prompted explicit content identification functions to users. The content dissemination platform has not carried out monitoring and identification of generated synthetic content, resulting in false information misleading the public.
Sixth, there are security risks in key areas. AI products that have been registered to provide question-and-answer services in key areas such as medical care, finance, and for minors have not set up targeted industry security audits and control measures, resulting in problems such as “AI prescribing”, “inducing investment”, and “AI hallucinations”, misleading students and patients and disrupting the order of the financial market.
The second phase focuses on rectifying seven prominent problems:
First, using AI to create and publish rumors. Fabricating all kinds of rumors and information involving current politics, public policies, social livelihood, international relations, emergencies, etc., or making arbitrary guesses and malicious interpretations of major policies. Fabricating and fabricating causes, progress, details, etc. by taking advantage of emergencies, disasters, etc. Impersonating official press conferences or news reports to publish rumors. Using content generated by AI cognitive bias to maliciously guide.
Second, using AI to create and publish false information. Splicing and editing irrelevant pictures, texts, and videos to generate mixed, half-true and half-false information. Blurring and modifying the time, place, and people of the incident, and rehashing old news. Creating and publishing exaggerated, pseudo-scientific and other false content involving professional fields such as finance, education, justice, and medical care. Using AI fortune-telling and AI divination to mislead and deceive netizens and spread superstitious ideas.
Third, using AI to create and publish pornographic and vulgar content. Using AI stripping, AI drawing and other functions to generate synthetic pornographic content or indecent pictures and videos of others, soft pornographic, two-dimensional borderline images such as revealing clothes and coquettish poses, or ugly and other negative content. Produce and publish bloody and violent scenes, distorted human bodies, surreal monsters and other terrifying and bizarre images. Generate synthetic “pornographic texts” and “dirty jokes” and other novels, posts and notes with obvious sexual implications.
Fourth, use AI to impersonate others to commit infringement and illegal acts. Through deep fake technologies such as AI face-changing and voice cloning, impersonate experts, entrepreneurs, celebrities and other public figures to deceive netizens and even market for profit. Use AI to spoof, smear, distort and alienate public figures or historical figures. Use AI to impersonate relatives and friends and engage in illegal activities such as online fraud. Improper use of AI to “resurrect the dead” and abuse the information of the dead.
Fifth, use AI to engage in online water army [paid posting] activities. Use AI technology to “raise accounts” and simulate real people to register and operate social accounts in batches. Use AI content farms or AI to wash manuscripts to batch generate and publish low-quality homogeneous writing to gain traffic. Use AI group control software and social robots to like, post and comment in batches, control the volume and comments, and create hot topics to be listed.
Sixth, AI products, services and applications violate regulations. Create and disseminate counterfeit and shell AI websites and applications. AI applications provide illegal functional services, such as creative tools that provide functions such as “expanding hot searches and hot lists into texts”, and AI social and chat software that provide vulgar and soft pornographic dialogue services. Provide illegal AI applications, generate synthetic services or sell courses, promote and divert traffic, etc.
Seventh, infringe on the rights and interests of minors. AI applications induce minors to become addicted, and there is content that affects the physical and mental health of minors in the minor mode.
The original text is available here (Chinese only).
Belgium as Frontrunner on Rules to Protect Against “Strategic Lawsuits Against Public Participation” (SLAPP), What You Need to Know.
The anti-SLAPP EU Directive 2024/1069 aims to protect people taking part in the public debate against dissuasive legal proceedings brought against them. It provides various guarantees against manifestly unfounded claims or legal proceedings targeting people because of their participation in the public debate.
As a directive, it must now be transposed into national law in each Member State of the European Union. In Belgium, on 18 February 2025, the anti-SLAPP bill was tabled before the Belgian Parliament, giving interesting insights on how this EU initiative may materialize in Member States.
The anti-SLAPP bill’s stated objective is to combat the abusive use of judicial proceedings for the purpose of intimidating or silencing people expressing their opinions (journalists, academics, NGOs, etc.). Among its proposed features, two major points stand out:
Firstly, if a legal claim is brought against a person because of his/her participation in the public debate (for example if this person has expressed his/her opinion on a public subject), the judge may, during the preliminary hearing, dismiss the claim for being manifestly unfounded.
Then, in the event of abuse of procedure by a party, the judge may impose a fine of up to €25,000, damages and/or the publication of the judgment. The draft bill provides several criteria to be considered to establish whether there is an abuse of procedure.
In addition to introducing the above points for civil cases, the draft bill also caters for anti-SLAPP measures through amending the Belgian Code of Criminal Procedure.
At this stage it is still only a draft bill that has not yet been adopted by the Belgian Parliament and may hence be subject to further changes, and once adopted, subject to future case law and doctrinal developments. Still, it is likely to have a significant impact on companies operating in sectors subject to public opinion’s pressure such as health, food, construction, consumer products and heavy industry. This draft bill (if adopted) will indeed provide a solid means of defense for NGOs and other players active in the public debate and already exercising noticeable policy and legal activism.
China’s Supreme People’s Court and Supreme People’s Procuratorate Issue Interpretation on Several Issues Concerning the Application of Law in Handling Criminal Cases of Intellectual Property Infringement
On April 24, 2025, China’s Supreme People’s Court (SPC) and Supreme People’s Procuratorate (SPP) jointly issued the Interpretation on Several Issues Concerning the Application of Law in Handling Criminal Cases of Intellectual Property Infringement (关于办理侵犯知识产权刑事案件适用法律若干问题的解释). The Interpretation clarifies trademark crimes, patent counterfeiting, copyright crimes, trade secret misappropriation, and common issues arising in IP crimes (e.g., heavier or reduced sentences). The Interpretation is effective as of April 26, 2025.
A translation follows. The original text is available here (Chinese only).
In order to punish crimes of infringement of intellectual property rights in accordance with the law and maintain the socialist market economic order, in accordance with the relevant provisions of the Criminal Law of the People’s Republic of China, the Criminal Procedure Law of the People’s Republic of China and other laws, and in combination with judicial practice, we hereby explain several issues concerning the application of law in handling criminal cases of infringement of intellectual property rights as follows:
Article 1: Where a person uses a trademark identical to a registered trademark on the same kind of goods or services without the permission of the registered trademark owner, any of the following circumstances shall be deemed to be “the same kind of goods or services” as provided for in Article 213 of the Criminal Law:
(1) The names of the goods actually produced and sold, or the names of the services actually provided by the actor are the same as the names of the goods or services approved for use by the right holder’s registered trademark;
(2) The commodity names are different, but the functions, uses, main raw materials, consumers, sales channels, etc. are the same or substantially the same, and the relevant public generally believes that they are the same kind of commodities;
(3) The service names are different, but the purpose, content, method, object, location, etc. of the services are the same or substantially the same, and the relevant public generally believes that they are the same type of services.
To determine “the same kind of goods or services”, a comparison should be made between the goods or services approved for use by the right holder’s registered trademark and the goods or services actually produced and sold, or the services actually provided, by the actor.
Article 2 A trademark that is identical to a counterfeited registered trademark, or that is substantially indistinguishable from a counterfeited registered trademark and sufficient to mislead the relevant public, shall be deemed a “trademark that is identical to its registered trademark” as provided for in Article 213 of the Criminal Law. A trademark that is substantially indistinguishable from a counterfeited registered trademark and sufficient to mislead the relevant public shall be deemed to be a trademark that is substantially indistinguishable from a counterfeited registered trademark and sufficient to mislead the relevant public if any of the following circumstances exists:
(1) Changing the font, uppercase and lowercase letters, or the horizontal and vertical arrangement of the characters of a registered trademark, which is basically indistinguishable from the registered trademark;
(2) Changing the spacing between words, letters, numbers, etc. of a registered trademark, which is basically indistinguishable from the registered trademark;
(3) Changing the color of a registered trademark does not affect the distinctive features of the registered trademark;
(4) merely adding to a registered trademark elements that lack distinctive features, such as the common name of the goods or model number, which do not affect the distinctive features of the registered trademark;
(5) There is basically no difference between the three-dimensional signs and the two-dimensional elements of the three-dimensional registered trademark;
(6) Other marks that are basically indistinguishable from the registered trademark and are sufficient to mislead the relevant public.
Article 3: Where a person uses a trademark identical to a registered trademark on the same kind of goods without the permission of the registered trademark owner, any of the following circumstances shall be deemed to be a “serious circumstance” as provided for in Article 213 of the Criminal Law:
(1) The amount of illegal income is RMB 30,000 or more, or the amount of illegal business is RMB 50,000 or more;
(2) counterfeiting two or more registered trademarks, with illegal gains exceeding RMB 20,000 or illegal business volume exceeding RMB 30,000;
(3) Having been subject to criminal or administrative punishment for committing an act specified in Articles 213 to 215 of the Criminal Law within two years, he commits the act again, and the amount of illegal gains is more than RMB 20,000 or the amount of illegal business is more than RMB 30,000;
(4) Other circumstances of a serious nature.
If a person uses a trademark identical to a registered trademark on the same kind of service without the permission of the registered trademark owner, any of the following circumstances shall be deemed to be a “serious circumstance” as provided for in Article 213 of the Criminal Law:
(1) The amount of illegal gains is RMB 50,000 or more;
(2) counterfeiting two or more registered trademarks, with the amount of illegal gains exceeding RMB 30,000;
(3) Having been subject to criminal or administrative punishment for committing an act specified in Articles 213 to 215 of the Criminal Law within two years, he commits the act again, and the amount of illegal gains is RMB 30,000 or more;
(4) Other circumstances of a serious nature.
Where a person counterfeits both a registered trademark for goods and a registered trademark for services, and the amount of illegal gains from the counterfeit registered trademark for goods is less than the standard prescribed in the first paragraph of this Article, but the total amount of illegal gains from the counterfeit registered trademark for services reaches the standard prescribed in the second paragraph of this Article, it shall be deemed as “serious circumstances” as prescribed in Article 213 of the Criminal Law.
If the amount of illegal gains or illegal business operations reaches ten times or more the standards specified in the first three paragraphs of this article, it shall be deemed as “particularly serious circumstances” as stipulated in Article 213 of the Criminal Law.
Article 4 Anyone who sells goods bearing counterfeit registered trademarks shall be deemed to have “knowingly” done so as provided for in Article 214 of the Criminal Law if any of the following circumstances exists, unless there is evidence proving that the person was truly unaware:
(1) Knowing that the registered trademark on the goods he sells has been altered, replaced or covered;
(2) Forging or altering a trademark registrant’s authorization document or knowing that the document has been forged or altered;
(3) A person who has been subject to criminal or administrative penalties for selling goods bearing counterfeit registered trademarks and then sells the same goods bearing counterfeit registered trademarks;
(4) purchasing or selling goods at prices significantly lower than the market price without justifiable reasons;
(5) after being discovered by administrative law enforcement agencies or judicial agencies to be selling goods bearing counterfeit registered trademarks, transferring or destroying infringing goods, accounting documents and other evidence, or providing false certification;
(6) Other circumstances that may be regarded as knowing that the goods are counterfeit registered trademarks.
Article 5 Where a person knowingly sells goods that are counterfeit registered trademarks and the amount of illegal proceeds is more than RMB 30,000, it shall be deemed as “a relatively large amount of illegal proceeds” as provided for in Article 214 of the Criminal Law. If any of the following circumstances exists, it shall be deemed as “other serious circumstances” as provided for in Article 214 of the Criminal Law:
(1) The sales amount is RMB 50,000 or more;
(2) Having been subject to criminal or administrative punishment for committing an act specified in Articles 213 to 215 of the Criminal Law within two years, he commits the act again, and the amount of illegal gains is more than RMB 20,000 or the amount of sales is more than RMB 30,000;
(3) The value of the goods bearing counterfeit registered trademarks that have not yet been sold reaches three times or more the sales amount standards prescribed in the first two paragraphs of this paragraph, or the sales amount of the goods that have been sold is less than the sales amount standards in the first two paragraphs of this paragraph, but the total value of the goods and the sales amount of the goods that have not yet been sold reaches three times or more the sales amount standards prescribed in the first two paragraphs of this paragraph.
If the amount of illegal proceeds, sales amount, value of goods, or the total of sales amount and value of goods reaches ten times or more of the standard specified in the preceding paragraph of this Article, it shall be deemed as “the amount of illegal proceeds is huge or there are other particularly serious circumstances” as stipulated in Article 214 of the Criminal Law.
Article 6 Forging or unauthorized manufacturing of another person’s registered trademark or selling forged or unauthorized registered trademark shall be deemed to be a “serious circumstance” as provided for in Article 215 of the Criminal Law if any of the following circumstances exists:
(1) The number of labels is more than 10,000, or the amount of illegal income is more than 20,000 yuan, or the amount of illegal business is more than 30,000 yuan;
(2) Forging, manufacturing without authorization, or selling forged or unauthorized manufacturing of two or more registered trademarks, the number of which is more than 5,000, or the amount of illegal gains is more than RMB 10,000, or the amount of illegal business is more than RMB 20,000;
(3) Having been subject to criminal or administrative punishment for committing an act specified in Articles 213 to 215 of the Criminal Law within two years, and committing the act again, the number of labels is more than 5,000, or the amount of illegal income is more than RMB 10,000, or the amount of illegal business is more than RMB 20,000;
(4) selling registered trademark signs illegally manufactured by others, where the number of signs that have not yet been sold reaches three times or more the standards specified in the first three items of this paragraph, or the number of signs that have been sold is less than the standards specified in the first three items of this paragraph, but the total number of signs that have not yet been sold reaches three times or more the standards specified in the first three items of this paragraph;
(5) Other serious circumstances.
If the number of labels, the amount of illegal income, and the amount of illegal business reach more than five times the standards specified in the preceding paragraph of this article, it shall be deemed as “particularly serious circumstances” as stipulated in Article 215 of the Criminal Law.
Article 7 The term “two or more registered trademarks” as used in this interpretation refers to two or more registered trademarks that identify different sources of goods or services. Although the registered trademarks are different, if they are used on the same goods or services and point to the same source of goods or services, they should not be considered as “two or more registered trademarks”.
The term “piece” of a registered trademark logo as used in this interpretation generally refers to a logo with a complete trademark image. If several logo images are printed on a tangible carrier and the logo image cannot be used independently without the tangible carrier, it shall be deemed as one logo.
Article 8 Whoever commits the crime of counterfeiting registered trademarks as provided for in Article 213 of the Criminal Law and also sells goods bearing the counterfeit registered trademarks, and where such a crime is constituted, he shall be convicted and punished for the crime of counterfeiting registered trademarks in accordance with the provisions of Article 213 of the Criminal Law.
If a person commits the crime of counterfeiting registered trademarks as stipulated in Article 213 of the Criminal Law and sells goods that he knows are counterfeit registered trademarks of others, and the crime is constituted, he shall be punished for multiple crimes.
Article 9 Any of the following circumstances shall be deemed as “counterfeiting another’s patent” as provided for in Article 216 of the Criminal Law:
(1) Forging or altering another person’s patent certificate, patent document or patent application document;
(2) Marking the patent number of another person on the products or product packaging manufactured or sold without permission;
(3) Using another’s patent number in a contract, product manual, advertisement or other promotional materials without permission, causing others to mistakenly believe that the invention, utility model or design is that of another.
Article 10 Anyone who counterfeits another person’s patent shall be deemed to be a “serious circumstance” as provided for in Article 216 of the Criminal Law if any of the following circumstances exists:
(1) The amount of illegal income is more than RMB 100,000 or the amount of illegal business operations is more than RMB 200,000;
(2) causing direct economic losses of more than RMB 300,000 to the patentee;
(3) counterfeiting two or more patents of others, with illegal gains exceeding RMB 50,000 or illegal business volume exceeding RMB 100,000;
(4) Having been subject to criminal or administrative penalties for counterfeiting another person’s patent within two years, he again commits the act, and the amount of illegal gains is more than RMB 50,000 or the amount of illegal business is more than RMB 100,000;
(5) Other serious circumstances.
Article 11: Any act of infringing upon copyright or rights related to copyright without obtaining authorization from the copyright owner, producer of audio or video recordings, or performer, or forging or altering authorization documents, or exceeding the scope of the authorization, shall be deemed as “without the permission of the copyright owner”, “without the permission of the producer of audio or video recordings”, or “without the permission of the performer” as stipulated in Article 217 of the Criminal Law.
A natural person, legal person or unincorporated organization that signs a work or audio or video product in a usual manner as provided for in Article 217 of the Criminal Law shall be presumed to be the copyright owner or audio or video producer, and shall have corresponding rights in the work or audio or video product, unless there is evidence to the contrary.
In cases where there are many types of works, audio and video products involved and the rights holders are scattered, if there is evidence that the works, audio and video products involved were illegally published, copied and distributed, or disseminated to the public through information networks, and the publishers, copy distributors, and information network disseminators cannot provide relevant evidence materials for obtaining permission from the copyright owner, audio and video producer, or performer, it can be determined as “without the permission of the copyright owner”, “without the permission of the audio and video producer”, or “without the permission of the performer” as stipulated in Article 217 of the Criminal Law. However, this does not apply if there is evidence that the rights holder has waived his rights, the copyright of the works involved or the relevant rights of the audio and video products and performers are not protected by China’s Copyright Law, or the protection period of the rights has expired.
Article 12 The act of reproducing and distributing, or reproducing for the purpose of distributing, a work or audio or video recording without the permission of the copyright owner or the owner of rights related to the copyright shall be deemed as “reproduction and distribution” as stipulated in Article 217 of the Criminal Law.
Without the permission of the copyright owner or the owner of rights related to the copyright, providing works, audio and video products, or performances to the public by wired or wireless means so that the public can obtain them at a time and place of their choice shall be deemed as “dissemination to the public through an information network” as stipulated in Article 217 of the Criminal Law.
Article 13 Where an act of infringing upon copyright or copyright-related rights as provided for in Article 217 of the Criminal Law is carried out, and the amount of illegal proceeds is RMB 30,000 or more, it shall be deemed as “a relatively large amount of illegal proceeds” as provided for in Article 217 of the Criminal Law; where any of the following circumstances exists, it shall be deemed as “other serious circumstances” as provided for in Article 217 of the Criminal Law:
(1) The amount of illegal business operations is more than RMB 50,000;
(2) Having been subject to criminal or administrative punishment for committing an act specified in Articles 217 and 218 of the Criminal Law within two years, he commits the act again, and the amount of illegal gains is more than RMB 20,000 or the amount of illegal business is more than RMB 30,000;
(3) copying and distributing another person’s work or audio or video recording, where the total number of copies is 500 or more;
(4) disseminating to the public through information networks other people’s works, audio and video recordings or performances, the total number of which is 500 or more, or the number of which is downloaded more than 10,000 times, or the number of which is clicked more than 100,000 times, or disseminating through a membership system with more than 1,000 registered members;
(5) The amount or quantity does not reach the standards specified in Items 1 to 4 of this paragraph, but reaches more than half of two or more of the standards.
If a person knowingly provides others with devices or components mainly used to circumvent or destroy technical measures, or provides technical services for others to circumvent or destroy technical measures, and the amount of illegal gains or illegal business reaches the standards prescribed in the preceding paragraph, he shall be held criminally liable for the crime of copyright infringement.
If the amount or quantity reaches more than ten times the corresponding standards stipulated in the first two paragraphs of this article, it shall be deemed as “the illegal proceeds are huge or there are other particularly serious circumstances” as stipulated in Article 217 of the Criminal Law.
Article 14: If a person knowingly sells infringing copies as provided for in Article 217 of the Criminal Law, and the amount of illegal proceeds is RMB 50,000 or more, he shall be deemed to have committed the “huge amount of illegal proceeds” as provided for in Article 218 of the Criminal Law. If any of the following circumstances exists, he shall be deemed to have committed the “other serious circumstances” as provided for in Article 218 of the Criminal Law:
(1) The sales amount is more than RMB 100,000;
(2) Having been subject to criminal or administrative punishment for committing an act specified in Article 217 or Article 218 of the Criminal Law within two years, he commits the act again, and the amount of illegal gains is more than RMB 30,000 or the amount of sales is more than RMB 50,000;
(3) selling another person’s work or audio or video recording, where the total number of copies is more than one thousand;
(4) The value of the infringing copies that have not yet been sold or the number of infringing copies that have not yet been sold is more than three times the standards set forth in the first three items of this paragraph; or the value or number of infringing copies that have been sold is less than the standards set forth in the first three items of this paragraph, but the total value or number of infringing copies that have not yet been sold is more than three times the standards set forth in the first three items of this paragraph.
Article 15 Whoever commits the crime of copyright infringement as provided for in Article 217 of the Criminal Law and also sells the infringing copies, and this constitutes a crime, shall be convicted and punished for the crime of copyright infringement in accordance with the provisions of Article 217 of the Criminal Law.
If a person commits the crime of copyright infringement as provided for in Article 217 of the Criminal Law and knowingly sells the infringing copies of others’ works, and this constitutes a crime, he shall be punished for multiple crimes.
Article 16: Obtaining commercial secrets by means of illegal copying or other means shall be deemed as “theft” as provided for in Article 219, paragraph 1, item 1 of the Criminal Law; obtaining commercial secrets by means of unauthorized or unauthorized use of computer information systems or other means shall be deemed as “electronic intrusion” as provided for in Article 219, paragraph 1, item 1 of the Criminal Law.
Article 17: Infringement of trade secrets under any of the following circumstances shall be deemed to be a “serious circumstance” as provided for in Article 219 of the Criminal Law:
(1) causing losses of more than RMB 300,000 to the owner of the rights of the trade secrets;
(2) The amount of illegal gains from infringement of trade secrets is more than RMB 300,000;
(3) Having been subject to criminal or administrative punishment for committing an act specified in Article 219 or Article 219-1 of the Criminal Law within two years, he commits the act again, causing losses or illegal gains of more than RMB 100,000;
(4) Other circumstances of a serious nature.
If the infringement of trade secrets directly leads to the bankruptcy or closure of the rights holder of the trade secrets due to major operational difficulties, or the amount is more than ten times the standard specified in the preceding paragraph of this article, it shall be deemed as “particularly serious circumstances” as stipulated in Article 219 of the Criminal Law.
Article 18 The “amount of loss” for infringement of trade secrets as provided for in this Interpretation shall be determined in the following manner:
(1) Where the business secrets of the right holder are obtained by improper means and have not yet been disclosed, used or allowed to be used by others, the amount of loss may be determined based on the reasonable licensing fee for the business secrets;
(2) If a person obtains the right holder’s trade secrets by unfair means and then discloses, uses or allows others to use the trade secrets, the amount of loss may be determined based on the loss of profits caused by the right holder’s infringement. However, if the amount of loss is lower than the reasonable license fee for the trade secrets, it shall be determined based on the reasonable license fee;
(3) If a person violates the obligation to keep confidentiality or the right holder’s request to keep business secrets confidential and discloses, uses or allows others to use the business secrets in his possession, the amount of loss may be determined based on the loss of profits caused by the right holder due to the infringement;
(4) Where a person knowingly obtains, discloses, uses or allows others to use a trade secret by improper means or in violation of the obligation to keep the trade secret or the right holder’s requirement to keep the trade secret, but still obtains, discloses, uses or allows others to use the trade secret, the amount of loss may be determined based on the loss of profits caused by the right holder due to the infringement;
(5) If a trade secret has become known to the public or has been lost due to an act of infringing a trade secret, the amount of loss may be determined based on the commercial value of the trade secret. The commercial value of a trade secret may be determined based on a combination of factors such as the research and development costs of the trade secret and the benefits of implementing the trade secret.
The loss of profits caused by infringement of the rights holder specified in the second to fourth items of the preceding paragraph can be determined by multiplying the total number of product sales reductions caused by the infringement by the reasonable profit of each product of the rights holder; if the total number of product sales reductions cannot be determined, it can be determined by multiplying the sales volume of the infringing products by the reasonable profit of each product of the rights holder. If the trade secret is used for other business activities such as services, the amount of loss can be determined based on the reasonable profit reduced by the rights holder due to infringement.
The remedial expenses incurred by the right holder of the trade secret to mitigate the losses to business operations or business plans or to restore the security of computer information systems or other systems should be included in the losses caused to the right holder of the trade secret.
Article 19 The “amount of illegal gains” from infringement of trade secrets as provided for in this Interpretation refers to the value of property or other property benefits obtained by disclosing or allowing others to use trade secrets, or the profits obtained by using trade secrets. Such profits can be determined by multiplying the sales volume of the infringing products by the reasonable profit of each infringing product.
Article 20: If a foreign institution, organization or individual steals, spies on, buys or illegally provides commercial secrets and the circumstances specified in Article 17 of this Interpretation exist, it shall be deemed as “serious circumstances” as specified in Article 219 of the Criminal Law.
Article 21 In criminal proceedings, if a party, defender, litigation agent or non-party applies in writing for confidentiality measures to be taken with respect to evidence or materials concerning commercial secrets or other commercial information that needs to be kept confidential, necessary confidentiality measures shall be taken, such as organizing the litigation participants to sign a confidentiality commitment letter, based on the circumstances of the case.
Anyone who violates the requirements of the confidentiality measures in the preceding paragraph or the confidentiality obligations stipulated by laws and regulations shall bear corresponding responsibilities in accordance with the law. Anyone who discloses, uses or allows others to use commercial secrets accessed or obtained in criminal proceedings without authorization shall be held criminally liable in accordance with the law if a crime is constituted.
Article 22 Anyone who knowingly commits a crime of intellectual property infringement by another person and commits any of the following acts shall be treated as a co-offender, except where otherwise provided by law or judicial interpretation:
(1) Providing assistance in producing or manufacturing the main raw materials, auxiliary materials, semi-finished products, packaging materials, machinery and equipment, labels and logos, production technology, formulas, etc. for the production or manufacture of infringing products;
(2) Providing loans, funds, accounts, licenses, payment settlement and other services;
(3) Providing production or business premises or transportation, warehousing, storage, express delivery, mailing and other services;
(4) Providing technical support such as Internet access, server hosting, network storage, and communication transmission;
(5) Other circumstances of assisting crimes of infringement of intellectual property rights.
Article 23: Where any of the following circumstances exist in the commission of a crime of infringement of intellectual property rights, a heavier punishment shall generally be imposed as appropriate:
(1) Mainly engaged in infringement of intellectual property rights;
(2) counterfeiting registered trademarks of goods or services such as emergency and disaster relief supplies or epidemic prevention materials during major natural disasters, accidents, disasters, or public health incidents;
(3) Refusing to hand over illegal gains.
Article 24: Where a crime of infringement of intellectual property rights exists and any of the following circumstances exists, a lighter punishment may be given in accordance with law:
(1) Those who plead guilty and accept punishment;
(2) the right holder has obtained forgiveness;
(3) Obtaining the right holder’s business secrets by improper means but not disclosing, using or allowing others to use them.
If the circumstances of the crime are minor, prosecution may be waived or criminal punishment may be exempted in accordance with the law. If the circumstances are significantly minor and the harm is not serious, they shall not be treated as crimes.
Article 25: Those who commit crimes of infringement of intellectual property rights shall be sentenced to a fine in accordance with the law by taking into account the amount of illegal gains from the crime, the amount of illegal business, the amount of losses caused to the right holder, the number of infringing and counterfeit goods and the social harm, etc.
The amount of the fine is generally determined to be between one and ten times the amount of the illegal income. If the amount of the illegal income cannot be ascertained, the amount of the fine is generally determined to be between 50% and one time the amount of the illegal business. If both the amount of the illegal income and the amount of the illegal business cannot be ascertained, if a sentence of less than three years of fixed-term imprisonment, criminal detention or a fine is imposed, the amount of the fine is generally determined to be between RMB 30,000 and RMB 1 million; if a sentence of more than three years of fixed-term imprisonment is imposed, the amount of the fine is generally determined to be between RMB 150,000 and RMB 5 million.
Article 26 If an organization commits any of the acts specified in Articles 213 to 219 of the Criminal Law, the organization shall be sentenced to a fine, and the directly responsible supervisors and other directly responsible persons shall be punished in accordance with the conviction and sentencing standards prescribed in these Interpretations.
Article 27 Except in special circumstances, goods with counterfeit registered trademarks, illegally manufactured registered trademark signs, infringing copies, and materials and tools mainly used to manufacture goods with counterfeit registered trademarks, registered trademark signs or infringing copies shall be confiscated and destroyed in accordance with the law.
If the above-mentioned items need to be used as evidence in civil or administrative cases, they may be destroyed upon application by the right holder after the civil or administrative case is concluded or after the evidence is fixed by means of sampling, photographing, etc.
Article 28 The “amount of illegal business” referred to in this interpretation refers to the value of the infringing products manufactured, stored, transported, and sold by the perpetrator in the process of committing an act of infringement of intellectual property rights. The value of the infringing products that have been sold shall be calculated according to the actual sales price. The value of the infringing products that have not yet been sold shall be calculated according to the actual sales average price of the infringing products that have been ascertained. If the actual average sales price cannot be ascertained, it shall be calculated according to the marked price of the infringing products. If the actual sales price cannot be ascertained or the infringing products have no marked price, it shall be calculated according to the market median price of the infringed products.
The “value of goods” referred to in this interpretation shall be determined in accordance with the value of the unsold infringing intellectual property rights products stipulated in the preceding paragraph.
The “sales amount” referred to in this interpretation refers to all illegal income obtained by and owed to the person from the sale of infringing products during the process of committing acts of infringement of intellectual property rights.
The “amount of illegal income” referred to in this interpretation refers to the total illegal income obtained by and owed to the perpetrator after selling products that infringe intellectual property rights, minus the purchase price of raw materials and products sold; if services are provided, minus the purchase price of products used in the service. If a person makes a profit by charging service fees, membership fees or advertising fees, the fees collected shall be deemed as “illegal income”.
Article 29: Where intellectual property rights infringement is committed multiple times and has not been dealt with but should be prosecuted according to law, the amounts and quantities involved in conviction and sentencing shall be calculated cumulatively.
For products that have been completed but have not yet been affixed with counterfeit registered trademark logos or have not yet been fully affixed with counterfeit registered trademark logos, if there is evidence that the product will counterfeit another person’s registered trademark, its value will be included in the amount of illegal business operations.
Article 30 Where a people’s court accepts a criminal private prosecution case involving infringement of intellectual property rights in accordance with law, and where a party is unable to obtain evidence due to objective reasons but is able to provide relevant clues when filing a private prosecution and applies to the people’s court for the evidence, the people’s court shall obtain the evidence in accordance with law.
Article 31 This interpretation shall come into force on April 26, 2025.
The Renaissance of HVDC for a Low Carbon Future
In this, the first of a series of two articles, we explore the resurgence of high voltage DC transmission technology and its relevance in a world that is transitioning to renewable power and adopting electric vehicles and heating and reducing its reliance on fossil fuels.
In this article we consider the benefits of the technology and some of the challenges it creates for investors, regulators and policy makers. In the second article we will look at how investments in HVDC transmission projects might be structured, including by examining examples of projects that have been successfully implemented.
Introduction
Anyone who has read a little history or seen the 2017 film The Current War knows that George Westinghouse’s alternating current (AC) won the late nineteenth century battle against Thomas Edison’s purportedly safer direct current (DC) alternative—the evidence is plain to see in our own homes. Ultimately, in 1892 the Edison Electric Light Company merged with its main AC competitor, Thomson-Houston, to form General Electric.[1]
A principal reason for AC’s early success was that transmission of electricity over significant distances is inefficient at low voltages: the energy wasted as heat in a conductor is proportional to the square of the current; and, for any given quantity of power transmission, the current is inversely proportional to voltage. Therefore, the higher the voltage the lower the energy losses become.
High transmission voltages are therefore desirable, with lower voltages at the point of use for safety reasons. A hundred odd years ago there was no efficient solution to convert DC from low to high voltage. AC on the other hand could be easily stepped up in voltage using a simple and cheap transformer, which has no moving parts. The invention of the induction motor also allowed AC to be used to power heavy industrial machinery, although DC still had many advantages over AC, such as being easier to use for railways and to control variable speed, asynchronous motors.
DC’s renaissance
More recently, over the past few decades, DC systems and in particular high voltage DC (HVDC) have enjoyed a renaissance, owing to their offering a number of benefits. HVDC transmission involves purely reactive power with no reactive power component and associated losses, which ultimately limits the length of high voltage AC power lines. HVDC transmission lines are technically the only viable solution for submarine or terrestrial buried electrical cables longer than a few tens of kilometers because of the capacitance of the insulated cables (which have to be charged and discharged each cycle, causing significant energy losses).
DC transmission also allows two asynchronous AC transmission grids (e.g., operating at different frequencies in different territories) to be interconnected. For the same reason, HVDC is typically also used to connect offshore wind farms, with the additional advantage that wind turbine generators can operate asynchronously with the onshore grid and, as such, at an optimum level of efficiency for any given wind condition.
Photovoltaic panels are only capable of directly producing DC output, and an inverter therefore has to be used to generate a three-phase high voltage AC output which is synchronised with the transmission grid. The same is true of storage batteries and other non-traditional power generation sources that do not use spinning generators.
Inverters use high-power, solid-state devices (typically, insulated gate bipolar transistors (IGBTs)) which switch on and off in a modulated configuration, controlled by sophisticated electronics, to produce a sinusoidal output which can be stepped up via a transformer to high voltage AC (HVAC) for transmission. Similar conversion devices can be configured to step-up the lower voltage DC output of a solar panel array or battery energy storage system directly to HVDC suitable for transmission or indeed to convert HVAC to HVDC.
The drive towards increased offshore wind power generation in many countries, including the UK, where generation sources are located far from where energy is required by consumers, provides a good illustration of the advantages and benefits of HVDC solutions. It would be impractical to build new transmission lines linking Scotland with England, such as the Eastern Green Links, without using subsea cables;[2] and, as noted above, HVDC is the only viable way to transmit electricity over long distances via such cables, which will necessarily have to be several hundred kilometers long.[3]
Several planned projects also involve long distance terrestrial buried HVDC cables, as the impact on the landscape is minimal once the work is completed and the land corridor restored—and there may be significant local resistance to new terrestrial overhead cables.
As the proportion of electricity generated by renewables increases, and as battery storage systems become more widespread, the arguments for using HVDC transmission more generally, as opposed to high voltage AC, become more compelling. If we take into account the future expansion of electric vehicle (EV) use and the need for fast battery charging stations, there are additional arguments in favour of HVDC systems. EV batteries require relatively low voltage but high current DC to charge rapidly. As such, a battery charging station array could in principle be supplied locally by DC or AC. There is no inherent technical requirement for AC as opposed to DC (or vice versa) and in principle either could be used with the appropriate conversion equipment; but what HVDC offers is potentially greater efficiencies and economies on a wider scale, which are discussed below.
Why use HVDC systems?
HVDC transmission systems offer a number of advantages over HVAC:
HVDC requires only two conductors, whereas HVAC needs three to support three phases, reducing costs and potentially requiring narrower land corridors.
HVDC power transmission losses may be lower than 0.3% per 100 km, which is 30% to 40% lower than losses for HVAC at an equivalent voltage, for a number of reasons:
AC suffers from a skin effect whereby only the outer part of the cable conducts current, which is avoided in DC transmission—the result is that for a given conductor size and energy losses, HVDC systems can transmit higher current over longer distances;
HVDC lines operate continuously at peak voltage (which is determined by the design of the transmission line insulators and towers, among other things), whereas HVAC is sinusoidal—and while the crests of the sine wave are naturally at peak voltage, the effective average voltage (and corresponding current) is the root mean square value (RMS), which is only 0.7 times the peak voltage; the net effect is to increase the power transmission capacity of an HVDC system relative to HVAC; and
DC carries only active power, whereas AC transfers both active and reactive power.
HVDC transmission lines/interconnectors are asynchronous, enabling connections between unsynchronised power sources, such as two grids operating at different frequencies, phases or voltages.
As noted above, HVDC is the only practical option for undersea cables longer than around 50 km.
Drawbacks of HVDC
HVDC does have certain drawbacks:
HVDC systems may be less reliable, have lower availability and be more expensive to maintain than HVAC, owing to their greater complexity;
additional complexity also increases the relative cost for shorter-distance transmission as compared with HVAC;
converter stations are required at each end of HVDC cables to convert from AC to DC and back again (assuming the source and load are AC)—these are expensive and may introduce relatively higher energy losses for shorter distance lines—but as noted above in the case of DC generation sources (such as solar) and DC loads (such as battery chargers), conversion equipment is also required if an HVAC transmission line is used; and
HVDC switching and breaker systems are more difficult to design and implement because, unlike AC which has zero current twice every cycle (at which point the circuit can be broken safely), HVDC current is continuous and a simple mechanical breaker cannot therefore be used because it would suffer potentially destructive arcing.
Weighing up the pros and cons, it is generally considered that for overhead transmission lines, HVDC transmission becomes cost effective above a minimum critical distance.
Bringing increased future reliance on renewable power generation, electrical vehicles, battery storage and heat pumps into the equation suggests that there are potential benefits in developing wide area HVDC super grids. These might help to mitigate the intermittency of renewable power sources by averaging and smoothing the outputs of geographically dispersed generation facilities.
It also seems likely that substantial investment in upgrading of transmission systems will be required to support any move towards the widespread use of electric vehicles and the adoption of heat pumps for heating in place of natural gas. Existing transmission systems are entirely inadequate and would create severe bottlenecks. The United Kingdom is already seeing the impact of planning for such changes in its “Great Grid Upgrade” through the procurement of the Eastern Green Links (EGL 1 to EGL 4) between Scotland and England, in the case of EGL3 and EGL4 reaching as far as East Anglia.
Implications for investors, regulators and policymakers[4]
Given the potential attractiveness of HVDC solutions, those responsible for investing in grid infrastructure (such as integrated utilities or unbundled network companies) may need to keep their investment programmes under review. Changes in the nature of the grid and the technologies connected to it may mean that HVDC becomes a contender to traditional AC network investments where the conditions are right, such as where power generated by non-synchronous generators (e.g., wind and solar farms) is being moved over long distances and in particular where it is impractical to build new conventional terrestrial transmission lines.
As noted above, this is already happening today in the UK. While many early links to offshore windfarms relied on AC technology, ENTSO-E’s Offshore Network Development Plan (ONDP) has adopted HVDC as a standard transmission technology, with 525 kV VSC converter technology. Following the precedent of the Eastern Green Link projects, it looks likely that 525 kV HVDC may become the standard for the significant GB offshore network investment planned in the North Sea, as well as interconnectors (for example, Neuconnect).
The EGL projects were signed off after formal reviews of their costs and benefits, conducted separately from the normal regulatory regime for the GB transmission network. This underlines that considering the full range of technologies and making optimum choices with the right long-term strategic benefits may require extraordinary action by policymakers and regulators.
Traditionally, network regulation typically aims to incentivise grid companies to do what is cheapest, but regulatory incentives are typically less effective than those from competitive markets. For example, if new technologies carry more of an operational risk than the traditional options, and grid operators believe that regulators may penalise them for investments which fail to perform, they may act in an unduly risk-averse manner and just carry on doing what they have always done, particularly if new technologies are not as well understood as traditional ones; and, at least in the short term, choice of technologies may be affected by limitations in the supply chain for HVDC equipment, and in particular cables, while traditional HVAC infrastructure is more readily available.
Everyone would agree that regulators should protect customers’ interests. However, they also need to realise that, in a world of technical change, this sometimes means innovation and taking greater risks. While penalising failure (e.g., lower asset availability) or failing to allow companies to pay to reserve supply chain capacity may feel like the right strategy in the short term, this could act to stall innovation, which in turn might be against customers’ long-term interests. Striking the right balance is therefore critical.
The NeuConnect project (which we discuss in part 2 of this article) provides a good illustration of how regulators such as Ofgem have taken a flexible approach in adapting regulatory regimes to unlock private investment in HVDC infrastructure through revenue support arrangements.
Endnotes
[1] Today, General Electric’s successor GE Vernova is once again championing DC in the form of high voltage conversion systems to support HVDC cables that can transfer electricity point-to-point or from offshore wind farms to shore—more about this below.
[2] The environmental impact of using terrestrial overhead transmission lines for the entire length of one of the Eastern Green Links would likely be prohibitive. Terrestrial underground cables are estimated by Scottish Power to cost between five and ten times as much as overhead transmission lines; however, submarine cables are also significantly more expensive than overhead transmission lines.
[3] For example, Eastern Green Link 1 (EGL1) is almost 200 km long (including 176 km of subsea cable) and when completed will link East Lothian with County Durham, allowing the transfer of 2GW of electrical power. The UK is planning a series of such links, including four Eastern Green Links, and the Western HVDC Link between Scotland and North Wales (with a capacity of 2.25 GW) was completed in 2019.
[4] Comments on regulatory aspects were kindly provided by Dan Roberts of Frontier Economics.