Recently, the Legislative Affairs Office of China’s State Council published the Draft Amendment of Anti-Unfair Competition Law of the People's Republic of China (for examination), hereinafter referred to as the Draft Amendment, which amended 30 of the 33 current articles of the law. After deleting 7 and adding 9 new ones, the Draft Amendment has 35 articles in all.
1. Revision on the General Provisions
- Amended “business operators” in the original law into “natural persons, legal persons, and other organizations that engage or participate in manufacturing, or selling commodities or providing services”. The new expression broadens the scope of coverage to the extent that it is similar with that provided in the corresponding provision of the Anti-Monopoly Law.
- Unified the law enforcement system for anti-unfair competition
The General Provisions of the Draft Amendment clearly provides that administrative departments for industry and commerce have general jurisdiction over acts of unfair competition, and that related departments could also supervise over such acts in accordance with corresponding laws and administrative regulations.
2. Revision on acts of unfair competition
- To complement with Trademark Law, the act of TM registration by passing off as somebody else provided in Paragraph 1 of Article 5 in the current Anti-Unfair Competition Law was deleted.
- Introduced provision on unfair acts of competition by using others’ registered TM or unregistered famous brand in a trade name, which causes confusion in the market.
- The Draft Amendment clearly stipulates the concept and behaviors of commercial bribery through definition plus enumeration.
- To differentiate from Advertising Law, the provision on the business operator of advertisement is deleted.
- The Draft Amendment clearly provides that false and misleading publicity includes false ones as well as ones that cause confusion among relevant public;
- Paragraph 4 of Article 5 (“forging or counterfeiting authentication marks, famous-and-excellent-product marks or other product quality marks on their commodities, forging the origin of their products or making false and misleading indications as to the quality of their commodities”) of the current Law was deleted. Such acts could be dealt with in accordance with the provision of the Draft Amendment on misleading publicity.
- Added provision on the burden of proof in cases involving trade secrets.
- Amended “lottery-attached sale activities” into “lottery-attached marketing” and complemented the forms of unfair lottery-attached sale activities. Increased the amount of the highest prize for lottery-attached marketing in view that the economy has expanded.
- Introduced provision against unfair transactions of business operators with relative advantage but is still not dominant in the market.
- Introduced provision against acts such as disrupting, restricting or interfering other business operators and their clients on the internet through software or other technical means.
- Added a miscellaneous provision (Article 14) as a precaution measure against new forms of acts of unfair competition.
- To compliment with Anti-Monopoly Law, provisions against acts like restricting competition, tie-in sale, selling commodities at prices below cost and establishing monopoly through abuse of administrative power are deleted.
3. Revision on supervision and legal responsibilities
- Empowered the law enforcement organs with further rights and responsibilities in supervising and investigating unfair acts of competition, including compulsory administrative measures such as sealing up and seizing.
- Introduced provision on the duty to cooperate during an investigation, providing punishments for individuals who refuse to cooperate during an investigation or refuse to be investigated at all.
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