Article 10bis of the Paris Convention,(1) together with the Agreement on Trade-Related Aspects of Intellectual Property Rights, forms the cornerstone of China's legislative framework on the protection of commercial signs. This legislative framework comprises:
- the new Anti-unfair Competition Law of 4 November 2017, which took effect on 1 January 2018 (a first revision of the original 1993 act);
- the Trademark Law (amended in 2013);
- the General Principles of Civil Law (enacted in 1986); and
- the General Provisions of Civil Law (enacted in 2017).
The legislature had been planning the recent amendments to the Anti-unfair Competition Law since China's accession to the World Trade Organisation. During the four drafts that followed, substantial changes were made concerning important issues such as the theft of trade secrets. However, as regards the principles set out in Article 10bis of the Paris Convention, most of the main concepts and principles of the original 1993 text have been maintained.
This update analyses Article 8(a) of the new law from the perspective of Article 10bis of the Paris Convention and, by way of a comparison with the corresponding provisions of the Trademark Law, examines how the new law will redefine the legal landscape for protecting commercial signs in China.(2)
Article 8(a) of the new Anti-unfair Competition Law provides as follows:
A business operator shall not make false or misleading commercial publicity on the performance, function, quality, sales, user ratings (b), awards (c), etc. of its merchandise to deceive or mislead the consumers.
A business operator shall not assist other operators in conducting false or misleading commercial publicity by organizing fraudulent transactions (d) or other means.
Misleading publicity Article 9 of the 1993 law remains largely unchanged (apart from being renumbered as Article 8), although some matters have been clarified, including with regard to "misleading commercial publicity" concerning the "performance, function, quality, sales, used ratings, awards etc" of a party's merchandise.
Article 8 of the new Anti-unfair Competition Law regulates the acts of unfair competition listed in Article 10bis(3)(3) of the Paris Convention – namely:
Indications or allegations the use of which in the course of trade is liable to mislead the public as to the nature, the manufacturing process, the characteristics, the suitability for their purpose, or the quantity, of the goods.
Such practices are prohibited because they:
- distort market reality;
- mislead consumers;
- enable offenders to gain illicit profits; and
- violate business ethics and honest practices in industrial or commercial matters.
Where trademarks are concerned, the Trademark Law contains a clause that addresses the same type of issue: Article 10(1)(7) prohibits the registration and use of signs "that are deceptive and likely to mislead the public in terms of the quality, place of production or other characteristics of the goods", which is quite similar but has a narrower scope.
Awards Granting awards is common in China and publicising such awards is a logical promotional method. The new law allows the authorities to monitor the above practices and is expected to rein in the abuse of well-known trademark status. This is in line with Article 14(5) of the Trademark Law, which prohibits the use of well-known trademarks on goods or their packaging for advertising, exhibition or other commercial activities. This may serve as a reference point to control the use for commercial purposes of so-called 'famous trademarks' (a title granted by the local authorities which is sometimes confused with the 'well-known trademark status' referred to in the Trademark Law).
For further information on this topic please contact Hui Huang or Paul Ranjard at Wanhuida Peksung by telephone (+86 10 6892 1000) or email (email@example.com or firstname.lastname@example.org). The Wanhuida Peksung website can be accessed at www.wanhuida.com and www.peksung.com.
(1) The countries of the Union are bound to assure to nationals of such countries effective protection against unfair competition.
(2) Any act of competition contrary to honest practices in industrial or commercial matters constitutes an act of unfair competition.
(3) The following in particular shall be prohibited:
1. all acts of such a nature as to create confusion by any means whatever with the establishment, the goods, or the industrial or commercial activities, of a competitor;
2. false allegations in the course of trade of such a nature as to discredit the establishment, the goods, or the industrial or commercial activities, of a competitor;
3. indications or allegations the use of which in the course of trade is liable to mislead the public as to the nature, the manufacturing process, the characteristics, the suitability for their purpose, or the quantity, of the goods.
(2) This update is part of a series that examine the new Anti-unfair Competition Law in view of Article 10bis of the Paris Convention and the Trademark Law. For previous updates in the series, please see:
- "Relationship between new Anti-unfair Competition Law and Paris Convention: general principles";
- "Relationship between new Anti-unfair Competition Law and Paris Convention: misleading consumers";
- "Relationship between new Anti-unfair Competition Law and Paris Convention: uniqueness";
- "Relationship between Anti-unfair Competition Law and Paris Convention: trade names";
- "Relationship between Anti-unfair Competition Law and Paris Convention: websites and domains"; and
- "Relationship between new Anti-unfair Competition Law and Paris Convention: other acts of confusion".
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