What Constitutes Unfair Competition Behavior in China?

In China, unfair competition legislation provides additional protection similar to that found in the German system. However, this is not "competition law" in the traditional sense of antitrust law; rather, it offers a general right to prevent unfair or derogatory use of unregistered trademarks, trade names, get-ups, or images. To qualify for protection under anti-unfair competition laws, the claimant's product must enjoy a certain degree of reputation in China. Another key aspect to prove is "causing consumer confusion."

Unfair competition behavior encompasses a broad range of activities. Chinese courts have developed considerable experience in addressing the following behaviors under the anti-unfair competition law:

1. Reverse Counterfeiting: This occurs when someone obtains branded products and replaces the original brand with their own. Previously handled under unfair competition law, this behavior is now classified as trademark infringement under the revised Chinese Trademark Law.

2. Unbranded Sale: This involves obtaining branded products, removing the brand, and selling them unbranded. While this type of infringement is not yet categorized as trademark infringement, it remains subject to unfair competition law.

3. Counterfeiting Trade Signs: Numerous activities fall under this category, including:

- Counterfeiting product names, trade dress, and packaging

- Counterfeiting trade names

- Counterfeiting enterprise codes, abbreviations, and barcodes

- Counterfeiting unique shapes, patterns, or signs of famous commodities

- Counterfeiting advertising slogans

4. Trademark Dilution: Various behaviors that dilute trademarks are also covered by unfair competition law.

5. Online Unfair Competition: New types of online unfair competition behaviors are addressed under this law. Notable examples include bad faith registration of domain names, misleading hyperlinks, and bundled software.

6. Trade Secret Disputes: These disputes represent one of the most litigated areas under unfair competition law.

7. Misleading Commercial Activities: This broad category includes misleading advertising and other deceptive practices such as forging awards or certificates or misrepresenting the origin of famous products.

8. Defamation and Slander: Activities involving defamation, libel, or slander in a commercial context are often addressed by unfair competition law.

It’s important to note that pursuing unfair competition cases can be expensive and challenging due to the nature and standard of evidence required. In Chinese courts, only notarized evidence or evidence legalized by apostilles (for overseas documents) carries significant weight. Therefore, wherever possible, obtaining a registered right is advisable; registered rights receive much greater respect in China compared to unregistered ones.

(By Dr. Jian Xu. Last updated: Nov 2024)

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