The Standing Committee of the National People's Congress has Issued a Decision on Amending the Anti-Monopoly Law of the People's Republic of China
Issuance Date: 24 June 2022
Effective Date: 1 August 2022
Important amendments to China’s Anti-Monopoly Law (AML) will come into effect on 1 August 2022. The amended AML was first proposed by the State Administration for Market Regulation (SAMR) in early 2020 and was given a first reading before the National People’s Congress in October 2021.
The most significant changes are as follows.
First, consistent with China’s continuing focus on regulation of the digital economy, the amended AML expressly stipulates that operators shall not use “data, algorithms, technologies, capital advantages, or platform rules to engage in monopolistic activities prohibited by this Law”, and that those operators with a dominant market role shall not use any of these things to abuse their dominant market position.
Secondly, a market-share based Safe Harbor is introduced for certain vertical monopoly agreements. Article 18 provides that when operators can prove that their market share in the relevant market is lower than the standards set by the AML Enforcement Agency of the State Council, and that other conditions set by the Enforcement Agency have been met, their vertical agreements shall not be prohibited.
Article 18 also provides that agreements that fix the price, or set a minimum price, for the resale of goods to a third party (resale price maintenance (RPM) agreements) shall not be prohibited if the undertakings can prove that the agreement does not have the effect of eliminating or restricting competition.
Lastly, Article 19 provides that the Enforcement Agency may require the parties to a merger agreement to notify the transaction “if the concentration of undertakings has or may have, the effect of eliminating or restricting competition”. This will apply to transactions that would otherwise fall outside the notification obligation. If the operators do not notify such a transaction, the Enforcement Agency shall investigate the concentration according to law.
National Radio and Television Administration has issued Measures for the Administration of Brokerage Agencies in the Field of Radio, Television and Internet Audiovisual
Reference No.:  No.34
Issuance Date: 30 May 2022
Effective Date: 30 June 2022
The Measures, containing twenty-one articles, have been introduced to regulate the activities of brokerage agencies operating in the field of radio, television and internet audiovisual (i.e. agencies providing contract signing and promotional services), and to guarantee the healthy and orderly development of the industry.
For the protection of minors, Article 9 of the Measures stipulates that, when providing brokerage services to minors, brokerage agencies and brokers shall obtain the prior consent of the minor’s legal guardian. Further, in providing brokerage services to minors, operators shall not use intimidation, enticement, or bribery. Article 12 stipulates that brokerage agencies shall not authorise minors to act as group owners or managers of relevant accounts.
Provision is also made for the strengthened management of accounts such as the accounts of official fan groups. Article 13 of the Measures imposes certain obligations on brokerage agencies and brokers relating to the management of these accounts, including the obligations not to release harmful information that might trigger disputes among fans; not to use false information to hype a celebrity or induce fans to purchase good.
The Hangzhou Internet Court Rules on a Case of Unfair Competition Involving Live Streaming by Intelligent Robots
Date:21 June 2022
The Plaintiff in this case is a technology company that owns all the intellectual property rights in the intelligent robot ‘Erbai Robot’. For promotional purposes, it developed a program that allows robots to host live streaming on the TikTok and Weibo platforms. The robot live streaming allowed the Plaintiff's Tiktok and Weibo accounts to gain significantly more followers. Subsequently, the Plaintiff found that the Defendant, also a technology company, was using the image of ‘Erbai Robot’ in its TikTok account and using similar live streaming to promote sales of its ‘Dabai Robot live streaming software’. It was also providing incentives in the form of commissions to offline agents to expand the sales channel of its live streaming software.
The Plaintiff claimed that it was the copyright holder of relevant art and literary works relating to the Erbai robot and its live streaming and that the Defendant had infringed its copyright and engaged in unfair competition. It brought a copyright infringement and unfair competition action, seeking compensation of 300,000 yuan (approx. US$44,500).
The Defendant claimed that it had used the image of Erbai robot only to introduce its live streaming software, which instructs and guides users to build an intelligent robot live streaming room; that the two live interfaces and the live discourse were not similar; and that its actions did not, therefore, constitute copyright infringement.
The Hangzhou Internet Court held as follows:
In relation to copyright, the image of the Erbai robot satisfied the requirements of Copyright Law and constituted an artistic work. The Defendant had disseminated the image of Erbai robot online without permission, and, as a result, had infringed the Plaintiff’s Right of Dissemination on Information Networks. The live Erbai robot live streaming discourse and interface were not, however, sufficiently original to attract copyright protection.
In relation to unfair competition, the Court held that the Defendant's conduct constituted unfair competition under Article 2 of the Anti-Unfair Competition Law. The promotional language used by the Defendant during the live streaming was used with the intention of free-riding and taking advantage of the goodwill of others; further, the Defendant’s live streaming interface and discourse were similar to those of the Plaintiff and obviously involved plagiarism. In addition, in order to promote sales of its software, the Defendant hired offline agents to make fake purchases. Because there is very little difference in user experience of both live the streamings the Defendant was unfairly gaining market attention and business opportunities through increased followers, clicks, network traffic and other business interests directly related to the live streaming industry, thereby damaging the Plaintiff's legitimate rights and interests and disrupting the order of market competition.
Ultimately, the Court ordered the Defendant to cease the copyright infringement and unfair competition and compensate the Plaintiff for economic loss and reasonable costs totaling 70,000 yuan (approx. US$10,000).
CNIPA’s rejection of ‘xiaomi’ trademark upheld by Beijing High People’s Court
Date: 6 June 2022
The Beijing High People's Court has given final administrative judgment in the case of Xiaomi Technology Co., LTD. (‘Xiaomi’) against the China National Intellectual Property Administration (‘CNIPA’), rejecting Xiaomi's claim to be entitled to register the ‘xiaomi’ trademark, and upholding the first instance judgment entered for CNIPA.
Xiaomi had previously registered the Chinese characters小米 (pronounced ‘xiaomi’), and in July 2019 it applied for registration of the English/Pinyin version ‘xiaomi’ - trademark No. 40025884. After examination, the CNIPA rejected the application on the grounds that the mark was similar to the trademarks of a third party ‘笑米 Xiaomi’ and ‘筱秘 XIAOMI’, and that the evidence submitted by Xiaomi was not sufficient to establish that its ‘xiaomi’ mark gained widespread recognition as a result of extensive use.
Xiaomi appealed to the Beijing Intellectual Property Court, claiming that the Chinese character mark 小米 had been widely used as a trademark and was a famous brand. Given that that the characters 小米 are pronounced ’xiaomo’, there is such a close connection between them and the word ‘xiaomo’ that Xiaomi should be entitled to register ‘xiaomo’ as a trademark. It requested the Court to revoke the CNIPA decision and decide in its favour.
The Beijing Intellectual Property Court held that the ‘xiaomi’ trademark was similar to the cited trademarks "笑米 Xiaomi" and "筱秘 XIAOMI" in terms of letter composition and pronunciation. Xiaomi’s Chinese character mark, however, differed from the trademark in dispute: the popularity of the Chinese character mark cannot simply be extended to the trademark ‘xiaomi’. The evidence submitted by Xiaomi was not sufficient to prove that the trademark ‘xiaomi’ had been widely used in relation to Xiaomi products. Therefore, the Court upheld the decision of the CNIPA to reject the trademark ‘xiaomi’. Xiaomi appealed to the Beijing High People's Court.
The Beijing High People's Court rejected the appeal. It held that trademark registrants enjoy their own independent exclusive rights to the different trademarks they have registered. There is no automatic continuity between successively registered trademarks, nor does the goodwill of an earlier registered trademark necessarily extend to a later trademark. The ‘xiaomi’ trademark is not identical to Xiaomi’s prior trademark “小米” , so even if the prior trademark has high visibility, that does not serve to distinguish the ‘xiaomi’ mark from the cited trademarks to allow registration.