Revised Draft Anti-Unfair Competition Law Released by State Administration for Market Regulation
At the end of November 2022, the State Administration for Market Regulation (SAMR) issued a revised draft Anti-Unfair Competition Law of the People's Republic of China, with a deadline for feedback of 22 December 2022.
The current Anti-Unfair Competition Law has a total of thirty-three articles; the revised draft has forty-eight. It strengthens the regulation of unfair competition in key areas and provides enforcement guidelines in relation to some significant problems that have arisen in practice.
The main amendments include the following. (1) further regulation relating to activity in the digital economy; (2) expansion of the types of unfair competition to include acts that impair fair trade and acts of malicious trade; (3) the abuse of a position of relative advantage, in terms of technology, capital, number of users, industry influence etc, is classified as an act of unfair competition; and (4) the level of fines has been adjusted. Article 29 raises the upper limit of fines for commercial bribery from RMB 3 million (approx. US$ 442.000) to RMB 5 million (approx. US$ 737,000), and Article 30 cuts the lower limit of fines for false propaganda from more than RMB 200,000 (approx. US$ 30,000) to more than RMB 100,000 (approx. US$15,000).
Source: SAMR 2022-11-22
News link: https://www.samr.gov.cn/hd/zjdc/202211/t20221121_351812.html
Damages Award of 50 Million Yuan (approx. US$ 7,500,000) Upheld on Appeal in Raumplus's Trade Mark Infringement And Unfair Competition Case
Raumplus Besitz-und Entwicklungs-GmbH & Co.KG (‘Raumplus’) and Shanghai Ledini Furniture Co., Ltd. entered into a joint venture agreement and established two joint venture companies: Delv Furniture (Shanghai) Co., Ltd. in 2008 and Nantong Delu Furniture Co., Ltd. in 2010. Pursuant to the agreement, the joint venture companies were authorized to use the trademark "raumplus德禄" during the joint venture period. On termination of the joint venture, the right to use the trademark would cease and the name of the joint venture companies would be changed.
In 2011, Raumplus withdrew from the joint venture, but the joint venture companies continued to use its trademarks and other intellectual property rights. Further, the two companies opened large-scale distribution stores nationwide and undertook bulk business such as engineering projects, registering the trademarks "raumplus德禄" and domain names "raumplus.com" and promoting their own brands as being high-end brands of Raumplus. Raumplus sent several letters requesting the two companies to cease the infringement. When the infringement continued, it commenced a trademark infringement and unfair competition action, seeking compensation for economic loss of RMB 50 million (approx. US$ 7,500,000). The court of first instance found in favour of the Plaintiff. The Defendants appealed unsuccessfully to the Jiangsu High People's Court.
The appeal court found that the Defendant companies right to use the " raumplus德禄" trade name and the "raumplus德禄" trademark was dependent on the continuation of the joint venture relationship. When that came to an end, the companies no longer had any right to use the name or trademark; however, they continued to use the trademark in relation to customized furniture, which fell within the scope of the registered trademark, thereby infringing Raumplus’s exclusive right to the trademark. The two defendants also continued to use the trade name " raumplus德禄", causing confusion and misunderstanding in the market and seriously damaging Raumplus’s normal market competition. They also advertised their own brands as high-end brands of Raumplus, opened large-scale distribution stores, and undertook a large number of engineering projects. All these activities constituted unfair competition and should be prohibited. The Court ultimately dismissed the appeal and upheld the original decision.
Source: XinHuaNet 2022-11-02
News link: http://js.news.cn/2022-11/07/c_1129108978.htm
2008年、2010年，德禄产业与发展有限责任两合公司（raumplus Besitz-und Entwicklungs-GmbH & Co.KG, 简称“德禄两合公司”）与案外人上海雷迪尼家具公司先后合资成立德禄上海公司和德禄南通公司，约定在合资期间内由德禄两合公司授权合资企业使用案涉“德禄”商标，合资关系结束后合资公司即不得再使用上述商标，同时需更改企业名称。2011年，德禄两合公司退出合资公司。但德禄上海公司、德禄南通公司并未停止对德国公司商标等知识产权的使用。相反，两家公司通过抢注“德禄”相关商标、“德禄.com”域名，将自有品牌宣传为德禄旗下高端定制品牌等方式在全国范围内大规模开设经销门店，大批量承接工程项目等大宗业务。德禄两合公司多次发函要求德禄南通公司和德禄上海公司停止侵权均未果，故诉至法院，请求判令两家被告公司等停止商标侵权及不正当竞争行为，并赔偿经济损失5000万元。一审法院判决被告公司停止商标及不正当竞争行为，并赔偿经济损失5000万元。被告不服该判决，上诉至江苏省高级人民法院。
The Supreme People’s Court Sets Criteria for Determining Ownership of Ex-Employee’s Invention
In a dispute relating to patent ownership, the Supreme People's Court confirmed that if an invention, made within one year of an employee leaving his employment, is related to his previous employment duties in terms of technical fields, technical subjects and technical ideas, it will constitute a service invention pursuant to Article 12 (1)(3) of the Rules for the Implementation of the Patent Law and, therefore, belong to the former employer, even if it does not fall within the scope of his employment in terms of specific technical problems, solutions, means or effects.
The Defendant, Bai Jubing, worked at MCC Southern Continuous Casting Technology Engineering Co., Ltd (‘MCC Southern Company’) from 2008 to April 2019. He was engaged in work such as process and software technology development. After leaving MCC Southern Company, he established Beijing Shuyu Technology Development Co. (‘Shuyu Company’) on 18 April 2019, holding 90% of the shares. Subsequently, Shuyu Company applied for the invention patent No. 201910721305.4, naming Bai Jubing as the inventor. MCC Southern Company filed a lawsuit claiming a right to the patent application, and seeking damages from Shuyu Company and Bai Jubing.
The Supreme People's Court held that, as the main developer and department head at MCC Southern Company, Bai Jubing had, during his tenure, participated in research and development work relating to several projects. The invention concerned related to his work tasks with MCC Southern Company in terms of technical fields, technical subjects and technical ideas, and the technical solutions were also similar. Accordingly, the invention was related to his MCC Southern Company work. Further, the patent application in question, along with three other patent applications that relate to the invention was filed on 6 August, less than four months after Shuyu Company was established. The Supreme People's Court held that Bai Jubing could not reasonably have completed all four inventions in that time frame, using only the resources of Shuyu Company.
The Court held that the invention involved was made within one year of termination of the employment relationship between Bai Jubing and MCC Southern Company, and was related to Bai Jubing's duty or other tasks distributed to him during his work with MCC Southern Company. It should, therefore, be recognized as a service invention, and the patent application right belongs to the MCC Southern Company.
Source: IPHOUSE 2022-12-05
News Link: https://mp.weixin.qq.com/s/LY07HBIOzAVE9Z7VVXJejw
Defendant Fined More Than 4.2 Million Yuan (approx. US$ 620,000) for Selling Goods Bearing Counterfeit Trademark
From September 2019 to December 2021, the Defendant Wu Moumou purchased ‘Alpenliebe candies’ at a low price and sold them in two stores on the 1688 platform, knowing that the candies were counterfeit. The total income derived from the sales was more than 4.2 million yuan (approx. US$ 620,000). At first instance, the Shanghai Putuo District People's Court sentenced Wu Moumou to five years' imprisonment and imposed a fine of 2.2 million yuan (approx. US$ 320,000) for the crime of selling product bearing counterfeit registered trademarks. Wu Moumou appealed to the Shanghai Third Intermediate People's Court.
On appeal, the Defendant Wu Moumou proposed that the amount attributable to click farming (i.e. where low paid workers are hired to click on links), more than 1.3 million yuan (approx. US$ 192,000), should be deducted from the income amount determined by the first instance Court. The Shanghai Third Intermediate People's Court found that the original prosecuting authority, the Shanghai Putuo District People's Procuratorate, had deducted more than 540,000 yuan for click farming, when it initiated public prosecution. The Defendant Wu Moumou failed to provide sufficient evidence to prove that amount was not appropriate.
The Shanghai Third Intermediate People's Court dismissed the appeal, and upheld the original judgment.
Source: The High People’s Court of Shanghai Municipality 2022-12-13
News Link: http://www.hshfy.sh.cn/shfy/web/flws_view.jsp?pa=adGFoPaOoMjAyMqOpu6YwM9DM1tU2NLrFJndzeGg9MQPdcssPdcssz