On 17 March 2022, the PRC Supreme People's Court ("SPC") issued the Interpretations on Relevant Issues Concerning the Application of the PRC Anti-Unfair Competition Law (关于适用《中华人民共和国反不正当竞争法》若干问题的解释, "Judicial Interpretations"), which has come into force on 20 March 2022. It replaces the Interpretations on Relevant Issues Concerning the Application of Law in the Trial of Civil Cases Involving Unfair Competition (关于审理不正当竞争民事案件应用法律若干问题的解释) issued in 2007. The Judicial Interpretations consist of 29 articles, including:
- a further clarification of Article 2 of the PRC Anti-Unfair Competition Law ("AUCL");
- relevant definitions of "business operators" and "business ethics"; and
- detailed provisions about unfair-competition practices such as counterfeiting, false advertising, unfair competition on the Internet and other important issues related to the implementation of the AUCL.
Clarification of Article 2 of the AUCL
Article 2 of the AUCL is a catch-all general clause to regulate various unfair competition acts that are not explicitly stipulated in the AUCL. Clause 1 of the Judicial Interpretations clarifies that Article 2 of the AUCL can apply to an act that "disrupts market competition order, infringes the legitimate rights and interests of other business operators or consumers" but is not listed in Chapter II (Acts of Unfair Competition) of the AUCL or in the provisions of other intellectual property ("IP") laws. This clause distinguishes the circumstances of applying AUCL from other IP laws.
Definition of "Business Operators" and "Business Ethics"
Clause 2 of the Judicial Interpretations defines "other business operators" as entities in the market who may potentially compete for trading opportunities with and cause damage to the competitive advantages of a business operator during production or commercial activities.
Clause 3 of the Judicial Interpretations defines "business ethics" in the AUCL as a code of conduct that is commonly followed and recognised in a specific business field. Clause 3 also stipulates relevant factors to be considered by courts in determining whether a business operator violates business ethics, including the:
- specific circumstances of the case;
- industry rules or commercial practices;
- subjective state of the business operator;
- willingness of the counterparty to choose to enter into the transaction;
- impact on the rights and interests of consumers;
- order of market competition; and
- social public interests.
Recognition of "Imitation and Confusion"
Clauses 4 to 15 of the Judicial Interpretations elaborate on the act of "Imitation and Confusion" (which will lead people to mistakenly believe that certain commodity is another business operator’s commodity or has a specific connection with another business operator) in the AUCL. The clauses cover, among others, the definition, scope and criteria of "signs with certain influence", the exclusion of certain signs from the protection by the AUCL, and the scope of market entities whose names can be protected.
Unfair Competition on the Internet
Clauses 21 and 22 of the Judicial Interpretations further explain and define two kinds of unfair competition acts on the Internet, including forcing a URL forwarding with inserted link without the consent of the user or other business operators, and maliciously interfering with or destroying the network products or services provided by other business operators.
According to a press conference held by the Third Civil Division of the SPC, the issuance of the Judicial Interpretations is a response to the new types of disputes arising from the rapid economic development, the substantial expansion of market entities and the accelerated integration of online and offline markets, and the profound changes of the competitive relationship of business operators. It has great significance for the in-depth implementation of the country's fair competition policy, the improvement of the fair competition system and the promotion of the construction of a high standard market system.
