Newsletter – 3 March 2022 – ELLALAN

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News, Laws and Regulatory Changes

Hong Kong

The Hong Kong Monetary Authority Published Discussion Paper on Crypto-assets and Stablecoins

• On 12 January 2022, the Hong Kong Monetary Authority (“HKMA”) published a Discussion Paper on Crypto-assets and Stablecoins (the “Paper”).
• As the HKMA plans to introduce new regulatory regime by 2023 in light of the growing use of crypto-assets and stablecoins, the HKMA aims to gather public feedback.
• The Paper sets out the HKMA’s policy directions for regulation, among which, the HKMA proposed licensing requirements for the following activities:

(i)                  issuing, creating or destroying stablecoins;

(ii)                managing reserve assets to ensure stabilisation of the stablecoin value;

(iii)              validating transactions and records;

(iv)              storing the private keys providing access to stablecoins;

(v)                facilitating the redemption of stablecoins;

(vi)              transmission of funds; and

(vii)            executing transactions in stablecoins.

• The HKMA now calls for public opinion until 31 March 2022.

Privacy Commissioner Launched Investigation into Cyberattack on  Harbour Plaza Hotels

• On 9 February 2022, the Office of the Privacy Commissioner for Personal Data (“PCPD”) received a data breach notification from Harbour Plaza Hotel Management Limited, reporting that its hotels’ accommodation reservation databases suffered from cybersecurity attack.
• Personal data of more than 1.2 million customers was affected.
• On 11 February 2022, having considered the nature of the incident and the significant number of data subjects involved, the PCPD confirmed having commenced an investigation into the incident. The PCPD has requested Harbour Plaza for more information including details of the incident and the types of personal data involved. 

People’s Republic of China

China Rejecting Metaverse Trade Mark Applications

• As the Metaverse has become one of the biggest buzzwords, local governments and state-backed entities in China are investing large amounts of cash into the Metaverse.
• China’s tech giants including Tencent, Baidu and Alibaba Group have filed trade mark applications containing the word “yuan yuzhou (translated as metaverse in Mandarin)” and/or “metaverse” in Classes 9, 35, 41 and/or 42.
• However, with the flood of incoming applications, many of these trade mark applications have been denied registration by the National Intellectual Property Administration (the “CNIPA”) to prevent abuse of the registration process.
• Many applications are still pending review at this stage. It remains to be seen how the CNIPA would determine these applications.

 China As Top Patent Cooperation Treaty Filer in 2021

• The World Intellectual Property Organization (the “WIPO”) announced on 10 February 2022 that China remained the top filer of Patent Cooperation Treaty (“PCT”) applications for the third year. 
• A PCT application is a single utility patent filing that offers applicants international patent-pending status in its contracting states.
• According to statistics, Chinese applicants had filed 69,540 PCT applications in 2021 which amounted to an increase of 0.9% as compared 2020. This was followed by the U.S. (59,570 applications), Japan (50,260 applications) the Republic of Korea (20,678 applications) and Germany (17,322 applications).

China Releases Draft Guidelines To Identify Critical Data

• Under the Data Security Law, all data types will be subject to a classification protection system. On 13 January 2022, the Cyberspace Administration of China released the draft Guidelines for Identification of Critical Data (the “Draft Guidelines”) to assist organisations identify critical data.
• The Draft Guidelines set out six major principles:

(i)                  Data must be assessed based on its security impact;

(ii)                Data classification should be in place to identify area(s) of focus for protection. Critical data is to be subject to additional requirements;

(iii)              Local regulations and industry practice must be considered to ensure the feasibility of additional measures;

(iv)              Risks should be assessed holistically, factoring in the data’s confidentiality, completeness, availability, authenticity and accuracy;

(v)                Data quality and quantity must be examined; and

(vi)               Assessment shall be conducted a regular basis.

• Public consultation period will end on 13 March 2022.

China Implements Measures for Quick Examination of Trade Mark Applications for Trial

• Taking effect on 18 January 2022, trade mark applicants may request for quick examination of their applications if one of the following conditions is met:

1. the mark involves the names of major national or provincial projects and requires urgent protection;
2. the mark is filed in response to public emergencies such as major natural disasters, public health incidents and social security incidents;
3. the application serves the purpose of achieving high-quality economic and social development and building a powerful intellectual property nation; or
4. there is great practical significance in the application to safeguard national interests, social public interests or major regional development strategies.

• Requests can be made without additional costs to the applications.
• If quick examination is approved by the CNIPA, the examination of a trade mark will be completed within 20 working days.

CNIPA Issues Notice Implementing Changes of the Nice Classification

• The Nice Classification, established by the Nice Agreement in 1957, is an international classification of goods and services applied for the registration of trade marks. 
• On 1 January 2022, the latest edition of Nice Classification (11th edition, version 2022) published by the WIPO came into effect. Changes include the additions and deletions of classifications.
• The CNIPA issued a notice on 27 December 2021 and revised the Similar Goods and Services Classification Table (《类似商品和服务区分表》) to incorporate the changes.

Rest of the world

Posting Photos on Facebook may incur liability

• The Supreme Court in Austria clarified that uploading of a photo onto social media channels may infringe author’s right to make work available to public pursuant to section 18a of the Copyright Act.
• The case concerned a defendant who shared in his Facebook chat groups a picture that was owned by the plaintiff and referred to himself as the author.
• The plaintiff claimed for a cease-and-desist order against the defendant. On the other hand, the defendant, in defending his case, relied on section 42(5) of the Copyright Act and argued that the work was reproduced for private use only.
• The courts dismissed the claim and held that the use of the photo was for private use as Facebook group in question was only accessible to members by invitation.
• However, had the defendant posted the photo in the Facebook group, the plaintiff’s claim would have been upheld. Individuals and corporates should be aware of potential infringement risk when uploading photos on Facebook.