Review of China’s unfair competition law: impact on intellectual property

Abstract

The article examines the economic and legal problems of Chinese legislation on combating unfair competition, in particular, recent changes in the context of the impact on intellectual property (IP), abuse of IP rights in the digital economy. Law enforcement practice, protection against unfair competition in court proceedings, issues of investigation of cases and responsibility for violations are analyzed. Since the entry into force of the Anti-Unfair Competition Law 30 years ago, 757,000 cases of unfair competition have been investigated, fines paid or money confiscated amounting to 12,88 billion yuan (about 1,8 billion USD). This indicates a significant economic impact of competition legislation. The Supreme People’s Court of China has issued an Interpretation on the Application of the PRC Anti-Unfair Competition Law. The document clarifies issues related to general provisions, business ethics, confusion through imitation, false advertising, and unfair competition over the Internet and outside China. It explains that the general provisions of the Act apply only if the provisions of IP laws and specific provisions of the Act do not apply. The document defines two types of unfair competition through the Internet, namely: 1) insertion of a link or forced redirection of a URL to an Internet product or service that is legally provided to another business entity, without the consent of other persons and users, and 2) maliciously interfering with or disrupting a network, disrupting a product or service that is lawfully provided by others by misleading, deceiving, or forcing users to modify, close, or unload them without express notice and consent of users. In cases where the unfair competition takes place outside of China, but the result of the violation occurs in its territory, the court of the place where the result of the violation occurs in China shall have jurisdiction. This provides Chinese rights holders with favorable opportunities to protect their rights. Draft amendments to the Law on Combating Unfair Competition were considered. It is concluded that the study and application of the experience of China’s regulation of protection against unfair competition will be useful for legislators, administrative and judicial bodies of Ukraine