Written Comments and Suggestions of QBPC for Anti-Unfair Competition Law (Amendment Draft)

Contact: Liu Ying (Mobile: 18612805375, Email: )

Articles in the Amendment Draft / Suggestions for Amendment / Reasons and Remarks
I. Comments and Suggestions for articles related to commercial signs including trademarks and company names (Article 6, 21)
Article 6 Operators shall not adopt any of the following improper means to carry out market transactions:
1.  Using, without authorization, the names, packaging or decoration unique to well-known goods or the names, packaging or decoration similar to those of well-known goods so that their goods are confused with the well-known goods of others, leading people to mistake them for the well-known goods of others;
2.  Using, without authorization, names, brief names and shop names of other enterprises, the personal names, pen names, and stage names of others, and names and brief names of social organizations, leading people to mistake them for the goods of others;
3.  Using, without authorization, main parts of others’ domain names, website names and web pages of others, and others’ names and identifiers of channels, programs and shows, which leads people to mistake them for the goods of others;
4.  Using registered trademarks or unregistered well-known trademarks of others as shop names in enterprise names, misguiding the public. / Article 6 Operators shall not adopt any of the following improper means to carry out market transactions:
1.  Using, without authorization, the names, packaging, decoration, or shapes unique to well-known goods of other commodity operators; or decoration designs, patterns, colors and ornaments in the business places of other commodity operators; or equipment styles, clothing designs and colors for personnel, or appearance of any or combinations of the preceding elements of other commodity operators; or the names, packaging, decoration or shapes similar to those of well-known goods of other commodity operators; or decoration designs, patterns, colors, and ornaments similar to those in the business places of other commodity operators; or equipment styles, clothing designs and colors for personnel, or appearance of any or combinations of the preceding elements similar to those of other commodity operators; so that their goods are confused with the well-known goods of others, probably causing leading people to mistake them for the well-known goods of others other commodity operators;
2.  Using, without authorization, the names unique to well-known services of other service operators; or decoration designs, colors, and ornaments in the business places of other service operators; or equipment styles, clothing designs and colors for personnel, or business images shaped by any or combinations of the preceding elements of other service operators; or the names similar to those of well-known services of other service operators; or decoration designs, colors, and ornaments in the business places similar to those of other service operators; or equipment styles, clothing designs and colors for personnel, or business images shaped by any or combinations of the preceding elements similar to those of other service operators; so that their services are confused with the well-known services of other service operators, leading people to mistake them for the well-known goods of other commodity operators;
3.  Using, without authorization, names, brief names and shop names of other enterprises, the personal names, pen names, and stage names of others, and names and brief names of social organizations;
4.  Using, without authorization, main parts of others' domain names, website names of others, and names and identifiers of channels, programs and columns of others, leading people to mistake them for the goods of others.
5.  Using registered trademarks or unregistered well-known trademarks of others as shop names, domain names, and main parts of domain names in enterprise names, misguiding the public;
6.  Other behaviors like copying others' well-known commercial signs, probably misguiding the public. / This article expands and refines the protection range of trademarks, protecting the interests of brand owners and standardizing the market order in general, and therefore shall be supported.
1.  The amendment draft lists only the names, packing, and decoration unique to well-known goods. The scope is narrow. In judicial practice, the scope is not limited to these three features. Therefore, the following content is advised to be added to item 1: "decoration designs, patterns, colors and ornaments in the business places, or equipment styles, clothing designs and colors for personnel, or appearance of any or combinations of the preceding elements of other commodity operators".
In practice, other operators copy the decoration designs, colors, and decorative photos of specific models in the stores of some member companies. A potential member company has not yet opened in China, but the stripe patterns, decoration designs and colors in dozens of chain stores in various places are almost the same as those in the store of this member company. Therefore, the suggested contents shall be added.
In addition, "using without authorization" in the front part of item 1 already shall be prohibited, therefore "their goods are confused with the well-known goods of others" is not the prerequisite to "using without authorization." However, "their goods are confused with the well-known goods of others" is the prerequisite to "using the names or packaging similar to those of well-known goods" in the latter part. Therefore, the content is amended as presented in the left column.
2.  The amendment draft stipulates only well-known goods (the goods shall be tangible and physical goods defined in a narrow sense, based on the "names, packing, and decoration" described in the following parts), but does not stipulate "well-known services" that coexist with well-known goods in markets and shall also be protected. Such stipulation does not fully meet the requirements for standardizing the market order. In addition, item 2 stipulates both goods and services. Therefore, in response to item 2, stipulation of "well-known services" shall be added.
3.  In practice, it is very easy to register domain names. Many infringers register domain names that are identical with or similar to those of the trademarks of others at a very low cost, and highlight the names in their products or packing, misguiding the public. However, their domain name registration is legal and confusing, which causes a certain degree of interference to law enforcement. Therefore, this condition shall be clarified to help implement precise law enforcement.
4.  Articles of the Law cannot cover constantly-developing unfair competition acts. Therefore, item 6, a miscellaneous item, is advised to be added.
Article 21 Where an operator violates items 1 to 3 of Article 6 of the Law, related supervision and inspection authorities shall order the operator to desist from the illegal act and confiscate related goods. Where the illegal income amount is more than CNY 50,000, impose a fine of not more than five times the illegal income; where there is no illegal income or the illegal income amount is less than CNY 50,000, impose a fine of not more than CNY 250,000. Where the circumstances are serious, the said authorities may revoke the business license.
Where an operator violates item 4 of Article 6 of the Law, related supervision and inspection authorities shall order the operator to apply for change of the registered enterprise name within one month. If the operator fails to submit the change application within the specified period, the supervision and inspection authorities may impose the same punishment according to the preceding provision. The original enterprise registration authority shall delete the enterprise name from the enterprise credit information publicity system, use the registration number or unified social credit code as a replacement, and include the enterprise in the list of enterprises with abnormal operation. Where the circumstances are serious, the said authorities may revoke the business license. / Article 21 Where an operator violates items 1 to 3 of Article 6 of the Law, related supervision and inspection authorities shall order the operator to desist from the illegal acts and confiscate related goods. Where the illegal income amount is more than CNY 50,000, impose a fine of not more than five times the illegal income; where there is no illegal income or the illegal income amount is less than CNY 50,000, impose a fine of not more than CNY 250,000. Where the illegal act is of serious nature, the said authorities may revoke the business license. Illegal operators shall bear the reasonable expenses of the infringed for stopping unfair competition acts.
The amount of the indemnity for unfair competition shall be determined by the actual loss of the infringed. If the actual loss cannot be determined, the amount is determined by the benefit gained by the infringer due to acts of unfair competition. If the loss of the infringed and the benefit gained by the infringer are difficult to determine, the people's court determines that the infringer pay the infringed the indemnity for not more than CNY 3,000,000, based on the gravity of unfair competition.
Where an operator violates item 4 of Article 6 of the Law, related supervision and inspection authorities shall order the operator to apply for change of the registered enterprise name within one month. If the operator fails to submit the change application within the specified period, the supervision and inspection authorities may impose the same punishment according to the preceding provision. The original enterprise registration authority shall delete the enterprise name from the enterprise credit information publicity system, use the unified social credit code as a replacement, and include the enterprise in the list of enterprises with abnormal operation. Where the illegal act is of serious nature, the said authorities may revoke the business license.
For violation of any of the acts listed in Article 6, the infringed can apply to the people's court for taking measures to stop unfair competition acts and for property preservation, and apply for evidence preservation before prosecuting the infringer. / Stipulation related to violation of item 4 of Article 6 is supported. The amended content adds the punishment on infringers, stepping up to crack down on unfair competition and helping standardizing the market competition order.
The first provision of this article is amended and the second provision is added to increase the indemnity for unfair competition acts and enhance civil punishment and ensure that the infringed obtain sufficient indemnity. This content is in accordance with the provisions of the trademark law.
Reason for adding item 4 to this article: applying temporary prohibition measures in dispute cases of unfair competitions is in accordance with the provisions of the trademark law and helps fully protect the interests of the infringed in a timely manner.
II. Comments and Suggestions for articles related to trade secrets (Article 9, 10, 24)
Article 9 An operator shall not conduct trade secrets infringement as follows:
1.  Obtaining the trade secrets from right holders by theft, bribe, intimidation or other improper means;
2.  Disclosing, using or allowing others to use the trade secrets of right holders obtained by the means mentioned in the preceding item;
3.  Disclosing, using or allowing others to use the trade secrets under its possession by breaching agreements or violating the requirements of the right holders on keeping confidential the trade secrets.
For the purpose of this article, trade secrets refer to the technical information and operational information that are not known to the public and have business value and for which the right holders have taken corresponding measures to ensure confidentiality.
Article 10 The following acts are be deemed to have infringed on the trade secrets of others:
1.  Employees or former employees of the right holders of trade secrets implement acts described in paragraph 1 of Article 9;
2.  Where a third party still obtains, uses or discloses the trade secrets or allows others to use the trade secretes when the third party knows or should have known that the trade secrets come from illegal acts listed in paragraph 1 of Article 9.
Professional personnel including staff members of the State organs, lawyers, and Certified Public Accountants shall keep the trade secrets known in the tenure.
Article 24 Where an operator infringes on trade secrets in violation of the provisions of Article 9 of the Law or a third party infringes on trade secrets in violation of the provisions of Article 10 of the Law, relevant supervision and inspection authority shall order the same to desist from the illegal act and impose a fine of not less than CNY 100,000 but not more than CNY 500,000; where the circumstances are serious, the said authority shall impose a fine of not less than CNY 500,000 but not more than CNY 3 million. Where employees or former employees of the right holders of the trade secrets infringe on trade secrets in violation of the provisions of Article 10 of the Law, relevant supervision and inspection authority shall order the same to desist from the illegal act and impose a fine not more than CNY 100,000. Where staff members of the State organs infringe on trade secrets in violation of Article 10 of the Law, the department in charge of appointment and removal or the supervisory organ shall give penalties on them in accordance with law. Where professional personnel including staff members of the State organs, lawyers, and Certified Public Accountants infringe on trade secrets in violation of the provisions of Article 10 of the Law, relevant supervision and inspection authority shall order the same to desist from the illegal act and impose a fine not more than CNY 100,000. Where the circumstances are serious, the said authorities may revoke the business license. / Article 9
An operator shall not conduct trade secret infringement as follows:
1.  Obtaining the trade secrets from right holders by theft, bribe, intimidation, computer network hacking, or other improper means;
2.  Disclosing, using or allowing others to use the trade secrets of right holders obtained by the means mentioned in the preceding item;
3.  Disclosing, using or allowing others to use the trade secrets under its possession by breaching agreements, duty, confidential decision of court, or confidentiality undertaking submitted to the court or violating the requirements of the right holders on keeping confidential the trade secrets.