VIII.Procedures for Intellectual Property Litigation

38.Determination of Repetitive Suits

Repeated litigation increases the concerned party's lawsuit fatigue and wastes judicial resources.The prohibition of repeated litigation is a necessity for the principle of‘non bis in idem’in civil litigation.How to identify repeated litigation is one of the most common problems in judicial practice.

In the appeal against the judgment of a false advertising dispute case of Beijing Golden Holiday Travel Service Ltd.（hereinafter referred to as Golden Holiday Company，appellant）v.CtripComputerTechnology（Shanghai）Co.，Ltd.（hereinafter referred to as Ctrip Computer Company，appellee），Shanghai Ctrip Commerce Co.，Ltd.（hereinafter referred to as Ctrip Commerce Company，appellee），Hebei Comfort International Airline Services Co.，Ltd.（hereinafter referred to as Comfort Services Company，appellee）and Beijing Ctrip International Travel Agency Co.，Ltd.（hereinafter referred to as Beijing Ctrip Company，appellee）［（2007）MSZZ No 4，abbreviation：‘Ctrip Case’］，the SPC defined the standards for the identification of repeated litigation，i.e.，the key to determine repeated litigation was whether the same concerned party filed the same claim for the same legal fact based on the same legal relationship.Furthermore，the SPC also specified that continuous implementation of an act that has been bound by an effective adjudication should fall within the scope of the res judicata of such effective adjudication.

The basic facts of the case are as follows：Golden Holiday Company sued to Shanghai No.1 Intermediate People's Court alleging that Ctrip Computer Company had committed unfair competition，and the case had been concluded through the civil judgment of the second instance［（2005）HGMS［Z］ZZ No.36，Hereinafter referred to as Case No.36］by Shanghai High People's Court.The judgment held that the statement that‘www.ctrip.com（stock code：CTRP）is the first Chinese tourism company to be successfully listed on the NASDAQ’could not be regarded as false，because Ctrip submitted the evidence.It was suitable that the judgment of the first instance determined that whether Ctrip Computer Company had committed illegal operation（it was accused of committing illegal internet information services）beyond its business scope did not fall within the scope of civil litigation of the people's court.Moreover，Ctrip Computer Company lodged litigation to Shanghai No.1 Intermediate People's Court accusing Golden Holiday Company of false publicity and commercial defamation，and Golden Holiday Company filed a countercharge.After combining the cases，Shanghai No.1 Intermediate People's Court delivered the judgment of the first instance holding that Ctrip Computer Company used the ultimate term‘biggest’in the advertising，which had the meaning of excluding its competitors，thus constituting false advertising and unfair competition that could mislead the people.After the appeal，Shanghai High People's Court made the civil judgment［（2006）HGMS［Z］Z No.41］to reaffirm the judgment of the first instance.As to this case，from July to September 2006，Golden Holiday Company sued through accusation，adding defendants and claiming that Ctrip Computer Company and another three companies had actually committed unfair competition.As part of the claims，Golden Holiday Company requested the court to order Ctrip Computer Company and Ctrip Commerce Company to stop using such false advertising as‘www.ctrip.com was successfully listed on the NASDAQ on December 9,2003’，‘the first Chinese tourism company to be listed in America’and‘Ctrip boasts the biggest unified air ticket booking system in the industry’，and order Ctrip Computer Company to stop all operation activities through‘www.ctrip.com’（i.e.，as a foreign wholly-owned enterprise，it cannot engage in internet information value-added services without obtaining the relevant administrative license）.In the first instance，the High People's Court of Hebei Province held that the aforesaid claims were repeated litigation，and dismissed those claims through a ruling［（2006）JMSCZ No.3-1］.When Golden Holiday Company appealed，the SPC rejected the appeal and reaffirmed the original ruling on October 22,2009.

Through investigation and retrial，the SPC defined that the key to determining repeated litigation was whether the same concerned party filed the same claim for the same legal fact based on the same legal relationship.Although the defendants of the case involved another three companies，the plaintiff's claims were only associated with Ctrip Computer Company and Ctrip Commerce Company.Moreover，the publicity involved therein was made by Ctrip Computer Company directly，so the subject bearing the corresponding liability should also be Ctrip Computer Company.The plaintiff's requests of the claims were also to stop the publicity of substantially identical contents.The continuous implementation of legitimate acts that have been bound by a prior effective adjudication should still fall within the scope of res judicata of such effective adjudication and shall be protected by the law and could not be sued again，although the times and places of the sued acts were different.

39.Administration of Illegal Business Operation

Whether a People's court can directly determine the acts claimed by the concerned party in civil litigation to violate relevant administrative laws and regulations and order the cessation of such illegal business operation is directly related to the scope of case acceptance of the people's court and the authority in charge of the case.

In the aforesaid‘Ctrip Case’，the SPC held that whether Ctrip Computer Company committed the illegal operation of value-added telecommunication business belongs to the determination of whether such business operation violated relevant administrative laws and regulations and whether it should bear the relevant administrative liability，which should be investigated and identified by the competent administrative authority and falls outside the investigation scope of civil litigation of the people's court.In fact，Golden Holiday Company complained to the relevant competent authoritythatCtripComputerCompanyrenderedillegalinternet information services，but therelevant competent authoritymadeneitherthe identification of illegal business operation nor issued any punishment to date.Under such circumstances，it was inappropriate for the people's court to make any determination through civil litigation.The reasons for the determination of the aforesaid Case No.36 applied by the people's court and the decisions on the relevant claims made by the court of first instance are appropriate.Golden Holiday Company asked the people's court to review and investigate the legality of the relevant acts，and the civil litigation lacked legal grounds.

40.Jurisdiction Over Cases of Infringement Upon Trade secrets Arising from Confidentiality or Non-competition Clauses in the Labor Contract

Article 79 of the Labor Law of the People's Republic of China（Labor Law）stipulates the prepositive procedure for the arbitration of labor disputes，i.e.，the party that has objections to the ruling of the labor arbitration can bring a lawsuit to the people's court.Disputes over the infringement of trade secrets raised by the employer according to the confidentiality or non-competition clauses in the labor contract will generate the problem of whether the dispute should be solved through the labor dispute handling procedures or be directly accepted and tried by the people's court as a dispute over unfair competition.

In the dispute case concerning jurisdiction over the infringement of technical and trade secrets Chen Jianxin（appellant）v.Nantong Synthetic Material Plant of the Ministry of the Chemical Industry（hereinafter referred to as Nantong Synthetic Plant，appellee），Nantong Bluestar Synthetic Material Co.，Ltd.（hereinafter referred to as Bluestar Company，appellee），Nantong Zhonglan Engineering Plastic Co.，Ltd.（hereinafter referred to as Zhonglan Company，appellee）&Nantong Orient Industry Co.，Ltd.（hereinafter referred to as Orient Company），Zhou Chuanmin，Chen Xi，Li Daomei and Dai Jianxun（defendants of original trial）［（2008）MSZZ No.9］，the SPC specified that a dispute arising from a non-competition agreement between the employer and the employee，through which the concerned party claims the rights on the grounds of default，should be considered a labor dispute and thus solved through the labor dispute handling procedures.A dispute through which the concerned party claims the rights on the grounds of infringing upon business secretes should be considered a dispute over unfair competition，and can be directly accepted and tried by the people's court.

The basic facts of the case are as follows：the Non-disclosure and Non-Competition agreement stipulated that either party can submit a dispute，if any，to the labor dispute arbitration committee in the place of the Nantong Synthetic Plant for arbitration.Orient Company was established on October 21,2003，and Zhou Chuanmin's father held shares in it.Zhou Chuanmin served as the general manager of the company，and Dai Jianxun and Chen Xi worked in the company.On March 17,2008，the Nantong Synthetic Plant，Bluestar Company and Zhonglan Company brought a suit against Orient Company，Zhou Chuanmin，Chen Jianxin，Chen Xi，Li Daomin and Dai Jianxun to the High People's Court of Jiangsu Province for infringing upon their technical and trade secrets，and claimed that the three plaintiffs were affiliates jointly engaged in the research，development and production of plastics and relevant products，and they owned the trade secrets involved therein.They further alleged that the actions of the six defendants constituted joint infringement upon their trade secrets，and sought a judgment ordering the defendants to immediately cease the infringement and compensate the plaintiffs for losses of RMB 45 million.During the defense period，the defendant Chen Jianxin raised an objection to the jurisdiction on the grounds that the case was a labor dispute and should therefore be arbitrated by the Nantong Labor Arbitration Commission.In the first instance，the High People's Court of Jiangsu Province held that the essence of the dispute of the case lay in whether the plaintiffs legally owned the claimed trade secrets and whether the infringement acts were tenable and warranted the assumption of civil liability for infringement，or whether it was rather a dispute over rights and obligations between employer and employee due to the labor relationship.Therefore，the case was not a labor dispute and had nothing to do with the procedural prerequisite for arbitration.The court thus dismissed Chen Jianxin's objection to the jurisdiction.Chen Jianxin appealed against this judgment to the SPC，who delivered a judgment on August 27,2009，rejecting the appeal and reaffirming the original judgment.

Upon retrial，the SPC held that Article 122 of the Contract Law stipulates that，where a party's breach harms the personal or property interests of the other party，the aggrieved party is entitled to elect to hold that party liable for breach of contract in accordance herewith，or hold the party liable for tort in accordance with any other relevant laws.Thus，for disputes arising from contracts involving liability for breach and infringement，the plaintiff has the right to choose whether to file litigation against the contract or the infringement，and the people's court should determine whether it should accept the case and jurisdiction over the case based on the plaintiff's cause of action.‘Labor dispute’means a dispute arising from the legal relationship of the labor contract between the employer and the employee.No law particularly stipulates that the concerned party can only file a labor dispute according to the labor contract.Where any act in violation of the labor contract constitutes an infringement，the law cannot prevent the concerned party from requesting the infringing party to assume liability for the infringement.Therefore，a dispute arising from a non-competition agreement between employer and employee through which the concerned party claims the right on the grounds of default should be considered a labor dispute，and solved through the labor dispute handling procedure.A dispute through which the concerned party claims the right on the grounds of infringing upon trade secrets should be considered a dispute over unfair competition，and can be directly accepted and tried by the people's court.In this case，the plaintiff Nantong Synthetic Plant and the defendants maintained the relationship of the labor contract and signed the Nondisclosure and Non-Competition Agreement，which also stipulates the clauses for arbitration.However，the cause of action in the case was a dispute over the infringement of technical and trade secrets，and the plaintiff requested that the defendants and Orient Company be ordered to cease their infringement and compensate for its losses.The object of litigation in this case was the infringement of the legal relationship between the plaintiff and the defendants，not the legal relationship of the labor contract between the plaintiff and the defendants.Therefore，this case constituted an infringement case，not a labor dispute，and could be directly accepted by the people's court.

41.Whether an Ongoing Effective Adjudication Can be Determined for Termination Because the Concerned Patent is Declared Invalid

Where the concerned party，based on a legally effective decision declaring the patent invalid wholly，applies for the termination of the execution of an effective adjudication on patent infringement made by the people's court before the patent becomes invalid，that is not executed or is being executed，the question of whether the people's court can terminate the execution is one for which Article 233 of the Civil Procedure Law does not provide clear provisions.

In the case of the High People's Court of Tianjin Municipality requesting for instructions［（2009）MSTZ No.13］on whether the ongoing execution of effective adjudication could be terminated because the involved patent was declared invalid，the SPC replied that the people's court should order to terminate the execution when an effective adjudication has been declared invalid during the execution.If the concerned party thinks that the original judgment was wrongfully made，the people's court may hear the case in accordance with the procedure for trial supervision.

The basic facts of the case are as follows：in April 2008，the High People's Court of Tianjin Municipality delivered a final adjudication on a certain patent infringement case，holding that the defendant had committed an infringement and ordering the defendant to compensate the plaintiff for losses.In June 2008，the PRB declared the patent entirely invalid，and the patentee filed an administrative lawsuit.In September，the plaintiff applied to Tianjin No.1 Intermediate People's Court for compulsory execution，and the defendant lodged dissidence on the execution on the grounds that the patent had been declared invalid.In December，Beijing No.1 Intermediate People's Court delivered a judgment reaffirming the declaration of invalidity made by the PRB.The concerned party did not file an appeal and the administrative judgment became effective.However，the plaintiff asserted that the court should implement compulsory execution on the argument that Article 47 of the Patent Law specified clear provisions.

In its response，the SPC considered that if the judicial document that determines patent infringement was not revoked，but the infringed patent thereof had been declared invalid，then if the defendant could apply to terminate the execution only after the original infringement adjudication was cancelled through the procedure for trial supervision，this would waste litigation proceedings and increase the concerned party's litigation costs，and did not conduce to solving the dispute.Therefore，from the perspective of rendering judicial remedy to the concerned party，moderate interpretation could be made to the termination of execution as stipulated in the Civil Procedure Law to facilitate the court's prompt adjudication of terminating the execution，without awaiting the cancellation of the original adjudication.Furthermore，the termination of execution could not influence the defendant of the original infringement adjudication to apply for the cancellation of such adjudication through the procedure for trial supervision.

42.Handling New Implementation Acts After the Infringing Party Alters the Infringing Technical Method

After the effective adjudication of the people's court has determined that a specific product or method has infringed upon another's patent，the concerned party may alter the allegedly infringing technology or the design or method of the product and then continue implementing such a method.Under such circumstances，it is always disputed whether such continuous implementation falls within the scope of res judicata of such effective adjudication，or could be handled through new litigation as the object of litigation.

In the case of the High People's Court of Sichuan Province requesting for the determination of not infringing upon the patent in which Sichuan Longsheng Pharm Co.，Ltd.（hereinafter referred to as Longsheng Company）sued Huainan Jieming Biomedical Research Institute（hereinafter referred to asJieming Institute）［（2009）MSTZ No.6］，the SPC held that if the concerned party has substantially altered the allegedly infringing technology or the design or method of the product，the act of implementing the altered technology or design out of the object of execution could not be bound by the original effective adjudication.It should be separately determined whether such an implementation of acts constitutes infringement.

The basic facts of the case are as follows：in January 2004，Jieming Institute sued Longsheng Company through Hefei Intermediate People's Court of Anhui Province on the grounds that the method of Longsheng Company used to make its‘Armillariella Oral Solution’（CYZZ No.［95］011116）infringed upon the method Jieming Institute used to make its own‘Armillariella Syrup’.Sichuan High People's Court ordered Longsheng Company to stop using the invention patent of Jieming Institute to produce and sell‘Armillariella Oral Solution’，and compensate Jieming Institute for its economic losses.However，Longsheng Company refused to accept this judgment and filed an appeal.In the second instance，Anhui High People's Court upheld the judgment of first instance.After that，Hefei Intermediate People's Court issued a notice on this ruling to the China Food and Drug Administration（CFDA）asking for help in deregistering the approval of‘Armillariella Oral Solution’（GYZZ No.H51023188）.The CFDA deregistered the approval on February 25,2009.Later，Jieming Institute published an‘important representation’through the internet and publicized in Chengdu stating that‘Armillariella Oral Solution’made byLongshengCompanyhadinfringedupontheinventionpatentof‘Armillariella Syrup’held by Jieming Institute，and it should investigate legal liabilities against Longsheng Company.The latter asserted that‘Armillariella Oral Solution’and‘Armillariella Syrup’were different varieties made according to different production methods，and lodged litigation before Chengdu Intermediate People's Court asking the court to identify and verify that the production method of‘Armillariella Oral Solution’did not infringe upon the involved patent of Jieming Institute.Sichuan High People's Court thus requested for instructions from the SPC on whether the case acceptance of Chengdu Intermediate People's Court constituted independent litigation.

In the SPC's response，it considered that after the effective adjudication of the people's court has determined that a specific product or method has infringed upon another's patent，and the concerned party has substantially altered the allegedly infringing technology or design or method of the product，the acts of implementing the altered technology or design should fall out of the object of execution of the original effective adjudication.It should be separately determined whether such an implementation of acts constitutes infringement.Where the concerned party refuses to perform its duty to halt the infringement as determined by the effective adjudication of the people's court，and continues the infringement acts，in addition to requesting the competent administration to investigate legal liability against the concerned party for refusing to execute the adjudication and judgment，the rights owner may file a separate lawsuit to investigate the legal liability for civil liability arising from such continuous infringement acts.

43.Handling of Retrial Request Cases When the Original Adjudication is Wrong But the Parties involved Have Reached a Settlement Agreement

Pursuant to relevant provisions for the procedure for trial supervision in the Civil Procedure Law，a case will be brought to retrial or ordered for retrial if the original adjudication is indeed wrong.In some cases requesting retrial，the parties concernedhavereachedasettlementagreementeventhoughtheoriginal adjudication is indeed wrong.Under such circumstances，a retrial would not only waste economic resources，but also not conduce to the implementation of settlement between the parties concerned.

In the petition for the retrial of the unfair competition dispute case of Shanghai Bi Feng Tang Delicious Food Co.，Ltd.（hereinafter referred to as Bi Feng Tang Company，appellant）v.Shanghai Dongyong Wharf Foods and Beverages Management Co.，Ltd.（hereinafter referred to as Dongyong Wharf Company，appellee）［（2007）MSJZ No.21-1］，the SPC attempted to innovate in the retrial method of cases of petitions for retrial and allowed the reversal of the wrong determination of the original judgment providing the parties concerned have reached a settlement agreement.This practice not only avoids wasting economic resources on a retrial to correct the wrong determination of the original judgment，but also encourages and facilitates the parties concerned to solve the civil dispute through mutual settlement.

The basic facts of the case are as follows：founded on September 15,1998，Bi Feng Tang Company mainly offered the foods and beverage services.It opened many stores in Shanghai.The menus，food package boxes and calendar cards of Bi Feng Tang Company and its stores all use‘避风塘’（Chinese characters for‘Bi Feng Tang’）and‘Bi Feng Tang’.Bi Feng Tang Company had won many honors including‘2002 Advanced Enterprises for Quality Commercial Service in Shanghai’，‘Romantic Outdoor Bar in Nanjing Road’and‘featured landscape’.Its fresh prawn dumplings，flaky egg tarts and egg-yolk white lotus seed paste moon cakes were all rated as‘China Specialty Snack’by the China Cuisine Association，and its premium moon cakes featured in the‘2001 Nationwide Moon Cake and Foods&Beverages Enterprise Exhibition’.The Xinmin Evening News，Reader Guide and many other domestic and overseas newspapers have reported and published advertising for Bi Feng Tang Company and its stores.Dongyong Wharf Company was registered and incorporated on August 7,2001.Its former name was‘Shanghai Xujiahui Fishes Causeway Bay Foods&Beverages Management Co.，Ltd.’and it was renamed Shanghai Dongyong Wharf Foods and Beverages Management Co.，Ltd.upon approval on January 25,2002.It also offers foods and beverage services.Both the tablet outside Dongyong Wharf Company and its outdoor advertising use the terms‘Dongyong Wharf Bi Feng Tang’and‘Bi Feng Tang Foods’.The menus of Dongyong Wharf Company bear the words‘Fishes Causeway Bay’and the slogan‘Enjoy original Bi Feng Tang cuisine at Fishes Causeway Bay’.Bi Feng Tang Company thus sued Dongyong Wharf Company for infringing upon its specific name and enterprise name，and false publicity.In the first instance，Shanghai No.1 Intermediate People's Court held that Dongyong Wharf Company's use of‘Bi Feng Tang’as the mark in its enterprise name could not confuse and mislead the consumers and did not infringe upon the plaintiff's right to its enterprise name.‘Bi Feng Tang’was not invented by Bi Feng Tang Company，it was actually the term of the featured cuisine and foods&beverage operation method generating from the long-term and continuously developed business operation and gradually accepted by consumers.The defendant's use of‘Bi Feng Tang’was not false publicity.The term‘Bi Feng Tang’was not first used by Bi Feng Tang Company，it was widely used by foods&beverages enterprises to represent a specific featured cuisine and operation method.Hence，it could not become a service name exclusively enjoyed by the plaintiff.Shanghai No.1 Intermediate People's Court thus rejected the plaintiff's claims.Bi Feng Tang Company filed an appeal and Shanghai High People's Court held in the second instance that‘Bi Feng Tang’，in addition to the meaning of‘a harbor for ships sheltering from the wind’，had been a term describing a unique cooking method and the featured cuisine made by this unique cooking method.Thus，Shanghai High People's Court dismissed the appeal.Bi Feng Tang Company applied to the SPC for a retrial，and the court rejected the appeal.Against this judgment，Bi Feng Tang Company appealed for a second time to the SPC for a retrial.Through investigation and retrial，the SPC found that the appellant held the tablet of‘China Famous Restaurant’bearing‘Shanghai Bi Feng Tang’issued by the China Cuisine Association in November 2002.During the investigation of the SPC，both parties entered into a settlement agreement voluntarily.The appellee recognized that‘Bi Feng Tang’had been the appellant's specific service name due to its long-term use and extensive publicity as the appellant's enterprise name and service logo.The appellee stopped using the term‘Bi Feng Tang’and guaranteed that it would not use‘Bi Feng Tang’in its publicity in the future.Pursuant to the said settlement agreement，the appellant applied to withdraw the appeal.The SPC made a ruling on December 31,2009，approving the withdrawal of the appeal.

Upon review and retrial，the SPC held that the said settlement agreement was concluded by and between both parties voluntarily，which could not harm the national interest，social public interests and outsiders'interests，nor violate either the true intention of the parties concerned or the laws and administrative regulations.Both parties recognized‘Bi Feng Tang’as the specific name of the famous service of the appellant，which was different from the determination of the court of the original instance，but it could be recognized based on existing evidences and relevant findings identified by the courts of the original instance and SPC.First，it could be recognized that the food&beverage services provided by the appellant were wellknown in Shanghai，and both parties had no objection to this during the original instance and the retrial.Second，in addition to the primary meaning of‘a harbor for ships sheltering from the wind’in the sense of a geographical concept，‘Bi Feng Tang’has long been recognized by restaurants as generic term for featured cuisine and a specific dish made from different raw ingredients.Nevertheless，since the appellant had used‘Bi Feng Tang’for a long time and made lots of publicity，the term‘Bi Feng Tang’played a role in identifying the operator's identity as the source of specific foods and beverages in Shanghai.The court of the second instance determined that‘Bi Feng Tang’was a unique cooking method and the featured cuisine cooked by such a method，which lacked sufficient evidences.Therefore，the SPC held that‘Bi Feng Tang’was the specific name of a famous foods and beverages service provided by the appellant in Shanghai.Finally，‘Dongyong Wharf Bi Feng Tang Cuisine’and‘Bi Feng Tang Cuisine’used by the appellee in its tablet and outdoor advertising，and the slogan of‘Enjoy original Bi Feng Tang cuisine in Fishes Causeway Bay’on its menu all highlighted the term‘Bi Feng Tang’，which could be regarded as the use of meaning neither in the sense of the geographical concept，nor the specific cuisine name，but the use of identifying the identity，which could easily confuse the consumers and make them believe the appellee had a specific relation with the appellant，and this exceeded the scope of the fair use of‘Bi Feng Tang’.Therefore，the appellee stopped using the term‘Bi Feng Tang’and guaranteed that it would not use‘Bi Feng Tang’in the aforesaid ways in the settlement agreement，indicating the respect for the appellant's civil rights and interests.

44.Determination of the Validity of the Clause of Governing Law in Foreign-related Contracts

Article 242 of the Civil Procedure Law stipulates that parties to a dispute over a contract involving foreign interests or over property rights and interests involving foreign interests may，through written agreement，choose a court in the place which has actual connections with the dispute as the court of jurisdiction.Provisions that are taken as authoritative provisions or indicative provisions will directly influence the validity of the clause on governing law in the agreement reached by and between the parties concerned.

In the case concerning a dispute over dissidence on jurisdiction over a network game agency and license contract，South Korea Mgame Corporation（hereinafter referred to as Mgame Corporation，appellant）v.Shandong Fengju Network Co.，Ltd.（hereinafter referred to as Fengju Network Company，appellee）and Tianjin Fengyun Network Technology Co.，Ltd.（hereinafter referred to as Fengyun Network Company，third party of the original trial）［（2009）MSZZ No.4］，the SPC held that the validity of a choice of competent court by agreement should be determined under lex fori.Given the legislative background and the then-current related legislative spirit，the provision that‘the people's court in the place which has actual connections with the dispute may be chosen，through written agreement，as the court of jurisdiction’as stated in Article 242 of the Civil Procedure Law should be understood as an authoritative provision rather than an indicative provision，i.e.parties to a dispute over a contract involving foreign interests or over property rights and interests involving foreign interests may choose a court in the place which has actual connections with the dispute as the court of jurisdiction；otherwise，the choice of court by agreement should be invalid.

The basic facts of the case are as follows：Fengju Network Company lodged a lawsuit against the Mgame Corporation as the defendant and Fengyun Network Company as the third party in accordance with the Game License Agreement signed by both parties on March 25,2005.The Mgame Corporation challenged the jurisdiction and thought the dispute should be tried by the court in Singapore with jurisdiction because Article 21 of the Game License Agreement agreed that‘This Agreement shall be governed by and construed in accordance with the laws of the People's Republic of China.Any dispute arising out of or in connection with this Agreement shall be finally settled in Singapore，and all disputes arising out of this Agreement shall be subject to the jurisdiction of Singapore’.Upon review and investigation，the High People's Court of Shandong Province held that both Parties chose Chinese law as the governing law of the Agreement.Thus，the choice of court agreement of both parties must also conform to the relevant provisions of the chosen governing law，i.e.the laws of the People's Republic of China.Article 242 of the Civil Procedure Law provides that‘parties to a dispute over a contract involving foreign interests or over property rights and interests involving foreign interests may，through written agreement，choose a court in the place which has actual connections with the dispute as the court of jurisdiction’.However，Singapore had nothing to do with the dispute，so the agreed jurisdiction of Singapore should also be invalid.The court thus dismissed this dissidence over the jurisdiction.After the Mgame Corporate appealed，the SPC rejected the appeal and reaffirmed the original ruling on December 22,2009.

Upon investigation and retrial，the SPC held that，pursuant to Article 145 of the General Principles of the Civil Law of the People's Republic of China，Article 242 of the Civil Procedure Law and Article 1 of the Provisions of the Supreme People's Court on Several Issues Concerning the Application of Law in the Trial of Foreign-Related Contractual Dispute Cases in Civil and Commercial Matters，a choice of law by agreement and a choice of court by agreement are entirely different legal acts，the validity of which should be determined respectively according to the relevant legal provisions.The validity of a choice of court by agreement should be determined under lex fori.The court of first instance was wrong in holding that the clause on governing law in an agreement must conform to the laws and provisions of the country in which the applicable law is implemented.As to the choice of court by agreement of the parties in a foreign-related case，there was no specific provision in the Civil Procedure Law of the People's Republic of China（Trial Implementation）entering into effect on October 1,1982.The current Civil Procedure Law，which published and came into effect on April 9,1991，has specific provisions in this regard as stated in Article 242.Given the legislative background and the thencurrent related legislative spirit，the provision that‘the people's court in the place which has actual connections with the dispute may be chosen，through written agreement，as the court of jurisdiction’as stated thereof should be understood as an authoritative provision rather than an indicative provision.In other words，parties to a dispute over a contract involving foreign interests or over property rights and interests involving foreign interests may choose a court in the place which has actual connections with the dispute as the court of jurisdiction；otherwise，the choice of court by agreement should be invalid.A choice of court by agreement may be reached in advance or afterwards，but must be fixed and confirmed in writing.Hence，in accordance with the current legal provisions of China，parties to a disputed foreign-related contract or parties in a dispute over foreign-related property rights should，when choosing the court having jurisdiction，insist on the written form and actual connection principles.However，Singapore，as indicated by the parties concerned，was neither a place where either party was domiciled nor a place where the Agreement was performed or signed，or where the subject matter was located.Additionally，the governing law of the Agreement as agreed upon by the two parties was not Singapore law either.The appellant also failed to prove any other actual connection to Singapore of the disputes therein.Therefore，it should be deemed that Singapore was not actually connected with the dispute.Accordingly，the choice of court provision of Article 21 of the Game License Agreement should be invalid，and cannot serve as the basis for jurisdiction over the case.