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Navigating Fair Competition: An Analysis of the Supreme People’s Court’s Nine Typical Anti-Unfair Competition Cases and Future Legal Trends
On September 9, the Supreme People’s Court (the Court) of China released nine typical anti-unfair competition cases under the theme “Unified Great Market, Fair Competition for the Future”. These rulings span traditional consumer sectors tied to public welfare alongside frontier domains like artificial intelligence, clean energy, and platform economies.
The following overview examines these nine cases, outlines China’s ongoing legal evolution, and highlights forthcoming regulatory directions.
Part I: Overview of the Nine Typical Cases
- Case 1: Registering and Using a Trade Name Confusingly Similar to Another’s Registered Trademark Constitutes Unfair Competition
- Brief Facts: A marketing company licensed the registered trademarks “六福” (Luk Fook) and “六福珠宝” for jewelry. A jewelry firm later acquired the “金六福尚美” trademark (which was subsequently invalidated) and licensed it to a trading business. The marketing company filed suit for trademark infringement and unfair competition over the corporate trade name registration.
- Ruling & Significance: The Court established that registering a trade name containing elements confusingly similar to a renowned registered trademark—where standard use still fails to prevent confusion—constitutes unfair competition when driven by a clear intent to ride on the senior brand’s goodwill. This refines standards for identifying corporate name counterfeiting.
- Case 2: Remuneration Obtained from Securing Engineering Projects via Misappropriated Trade Secrets Can Be Deemed Infringement Profits
- Brief Facts: A tech company developed a dry-desulfurization technology for blast furnace gas protected as a trade secret. An engineering partner breached its non-disclosure agreement by leaking the technology to third parties and utilizing it in an operational project.
- Ruling & Significance: The Court held that because the trade secret directly unlocked the commercial opportunity for the project, the technical provider’s total remuneration serves as an accurate measure of the secret’s commercial value, forming the basis for infringement profits. Coupled with punitive damages, the court awarded over 44.58 million RMB/US$6.65 million in compensatory damages alongside a 2x punitive multiplier.
- Case 3: Malicious “Transcoding and Reconstruction” Constitutes Interference with Network Products
- Brief Facts: An information firm operated a literature platform. A browser provider applied a “reading mode” via transcoding that stripped away core features like user logins, top-ups, and tipping, while embedding its own AI reading tools and floating links directing users to pirated text.
- Ruling & Significance: The court ruled that systematically stripping core interactive functions while inserting competing content exceeds legitimate technical adaptation, violating the internet-specific provisions of the Anti-Unfair Competition Law (Unfair Competition Law).
- Case 4: Distinctive Well-Known Movie Titles Constitute “Commercial Identifiers with Certain Influence”
- Brief Facts: A dispute emerged over the unauthorized commercial exploitation and imitation of a prominent movie title, leading to litigation over unfair competition and cultural asset free-riding.
- Ruling & Significance: The court clarified that recognized movie titles qualify legally as “commercial identifiers with a certain influence” under the Unfair Competition Law, securing cultural innovation and deterring unauthorized associations.
- Case 5: Providing Order-Snatching “Physical Plug-ins” Disrupts Platform Competition Order
- Brief Facts: External actors distributed hardware “plug-ins” engineered to bypass food delivery platform operating rules, granting select couriers an unfair advantage while harming peers, merchants, and consumers.
- Ruling & Significance: The court determined that disrupting platform operational logic via physical plug-ins violates the catch-all provisions of the Unfair Competition Law’s internet clauses.
- Case 6: Using AI to Fabricate Product Review Articles for “Free-Riding” Traffic Constitutes Unfair Competition
- Brief Facts: A tech company leveraged artificial intelligence to batch-generate and publish review articles targeting rival software products to misdirect traffic to its own tools.
- Ruling & Significance: This decision marks a firm regulatory stance against deploying emerging AI technologies to manipulate reviews, distort market signals, and siphon competitor traffic.
- Case 7: Tampering with Competitors’ Live-Streaming E-Commerce Videos Constitutes False Advertising
- Brief Facts: Live-streaming operators altered competing promotional streams via technical manipulation, manufacturing false product endorsement ties to mislead consumers.
- Ruling & Significance: The court explicitly ruled that tampering with peer live-streaming content constitutes false advertising, steering live-streaming e-commerce toward orderly transparency.
- Case 8: Maliciously Editing Product Review Videos to Disparage Competitors Constitutes Commercial Disparagement
- Brief Facts: Market actors deliberately edited and spliced product testing footage regarding core components (such as blade batteries) to undermine a rival’s product performance.
- Ruling & Significance: The court penalized malicious video editing intended to smear competitor performance, supplying a strong judicial safeguard for advanced manufacturing and clean energy sectors.
- Case 9: Inaccurate Comparative Advertising Capable of Identifying Competitor Sources Constitutes Commercial Disparagement
- Brief Facts: A company distributed comparative marketing materials that lacked factual grounding and directly pinpointed a competitor’s goods, impairing its commercial standing.
- Ruling & Significance: The court clamped down on misleading comparative ads as commercial disparagement, defending business reputation and enforcing truthfulness in commercial promotion.
Part II: Summary of China’s Anti-Unfair Competition Legal Development
These landmark decisions highlight three core trajectories in China’s evolving anti-unfair competition jurisprudence:
- Reinforcing Traditional IP Protection and Escalating Economic Deterrence: Courts are decisively cracking down on classic bad-faith practices like passing off and corporate name misappropriation (Case 1 above). Simultaneously, they are willing to calculate substantial damages—factoring in full project remuneration alongside punitive damages—to strip wrongdoers of their illicit proceeds (Case 2 above).
- Curbing Destructive “Involution” in Core Sectors: Judicial organs are focusing sharply on modern growth engines (such as clean energy, live-streaming, and platform ecosystems) to penalize malicious commercial disparagement, fake reviews, and false advertising that erode market trust (Cases 7, 8, and 9 above).
- Prudently Applying General Provisions to Digital and AI Innovations: To address novel digital disruptions, courts carefully balance technological enablement against the public interest. By flexibly deploying catch-all and internet-specific rules, the judiciary has reined in unauthorized web transcoding (Case 3 above), delivery plug-ins (Case 5 above), and AI-generated review text (Case 6 above).
Part III: Future Focus Areas for Judicial and Regulatory Enforcement
Looking ahead, China’s judicial and regulatory bodies are positioned to concentrate on several core priorities:
- Regulating AI and Emerging Digital Models: As AI tools proliferate, oversight will target automated, algorithm-driven market manipulation—such as AI-generated fake reviews and algorithmic traffic hijacking—to check digital unfair competition.
- Suppressing Destructive “Involutionary” Practices: Regulators and courts maintain a zero-tolerance posture toward destructive price wars, malicious video doctoring, and deceptive comparative advertising that undermines high-tech and green industries.
- Securing the Unified National Market: Jurisprudential standards will continue refining platform neutrality, fair traffic distribution, and cross-enterprise boundaries to ensure dominant actors cannot abuse platform rules or technical gates to crowd out smaller operators or restrict consumer options.
Disclaimer: This article is for reference only. Nothing herein shall be construed as Hong Kong legal advice or any legal advice for that matter to any person. Oldham, Li & Nie shall not be held liable for any loss and/or damage incurred by any person acting as a result of the materials contained in this article.
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