On December 30 2006, the Supreme People's Court issued the Explanation on Several Issues on the Application of Law in Adjudicating Civil Unfair Competition Cases. It contains important interpretations of various terms used in China's Anti-Unfair Competition Law. The Explanations came into effect on February 1 2007.
Article 5(2) of the Law makes it an act of unfair competition to use without authorization a name, packaging or trade-dress the same or similar to the special name, packaging or trade dress of a well-known good/service ("commodity") causing confusion that a commodity is the well-known commodity. Among other things, the Explanation clarifies the following:
Names, packaging and trade dress lacking distinctiveness are not protected.
"Trade dress" includes the decoration of the premises of, the clothing worn by and the tools and equipment used by the owner of the well-known commodities (the "well-known owner").
"Confusion" includes not only confusion that a commodity is the well-known commodity, but also that it has been endorsed by the well-known owner, or that it is in some way connected with the well-known owner or its associated companies.
Confusion is deemed if the name, packaging or trade dress is the same, or basically the same, as that of the well-known commodity.
Use of the same or similar name, decoration or trade dress in a different geographical scope by a subsequent user is not unfair competition if the user can show good faith use.
Article 5(3) of the Law makes it an act of unfair competition to use the enterprise name of another party without authorization causing confusion as to the source of the commodity. The Explanation clarifies that the term "enterprise name" includes the "trade name" (that is, the distinctive part of enterprise name), provided that it has acquired a certain reputation and is known to the relevant public. It also clarifies that enterprise names not only include names registered, but also used, in China.
Article 9(1) of the Law prohibits making, by way of advertisements or other means, a misleading or false advertisement with respect to matters such as the commodity's quality, manufacturing ingredients, properties, use, manufacturer, validity period and place of origin. According to the Explanation, advertisements containing biased, disparaging or other misleading views or comments should be prohibited.
A relatively large part of the Explanation is to clarify the meaning of "trade secrets" and related terms.
Being only a document issued by the judiciary, the Explanation is not binding on the Administration for Industry and Commerce.
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Howard Tsang |
