THE Shanghai No. 2 Intermediate People's Court rejected an appeal from the city's first privately run umbilical blood bank on December 6.

　　"The Shanghai Public Health Bureau's action in shutting down the bank is legitimate, but its confiscation of equipment from the bank is unjustified," said the judge.

　　The company, Shanghai Zaishengyuan Stem Cell Engineering Co, opened for business and began storing umbilical blood in mid-2003. It was shut down in January for "conducting blood collection without authorization, thus breaking the Blood Donation Law of the People's Republic of China and regulations on the practices of blood centres", said Liu Xuefeng from the bureau, during the first hearing at the intermediate people's court in September.

　　The bureau banned all privately run blood banks from the city in May.

　　Zaishengyuan sued the bureau, and lost the first trial, heard in the Shanghai Huangpu District People's Court in July. It then appealed to the higher court.

　　"Zaishengyuan isn't under the category of blood centres which are non-profit organizations. We operate to make a profit," said Zhang Yu, lawyer for Zaishengyuan. "Umbilical blood doesn't fall under the category of such practices, and what's more, we store stem cells from umbilical blood instead of the blood itself."

　　A representative for Zaishengyuan insisted that the company never collected the umbilical blood itself.

　　"We signed agreements with more than 20 local hospitals, entrusting them to collect umbilical blood on our behalf," said Zhang. "We simply separated stem cells from the umbilical blood and stored them. We never collected them ourselves."

　　The Shanghai No. 2 Intermediate People's Court judged early this week that the umbilical blood falls under the category of blood regulated by the law, since it is from the placenta and identical to the blood of the new-born baby.

　　"It is written in the law that the collection of blood must be authorized by relevant government departments," said the judge. "And for any place collecting umbilical blood, even higher qualifications are needed."

　　"The business licence the company obtained only means it is qualified to run a business, but for the practices involving blood, it must also obtain proper authorization from the health bureau."

　　By Cao LI