Judicial authorities intensify efforts to ensure fair market practices

China's judicial authorities have intensified efforts to tackle unfair competition, especially counterfeiting, to ensure a fair market environment.

This week marks the 2024 Fair Competition Policy Promotion Week, during which the Supreme People's Court revealed four significant cases involving unfair competition, addressing issues such as counterfeiting, false advertising and trade secret violations.

The nation's top court highlighted the prevalence of various unfair competition practices, such as mixing counterfeits with authentic products, in recent years. These practices have significantly harmed both business operators and the legitimate rights of consumers, necessitating a firm crackdown, it said.

In one case, a European company granted permission for its registered trademark "Schneider" to be used by a Chinese electrical company it had invested in. The Chinese company has invested in multiple electrical production facilities nationwide, many of which incorporate "Schneider" into their company names, establishing a strong market presence for the brand in the electrical industry.

However, an elevator company based in Suzhou, Jiangsu province, extensively used the "Schneider" and "SCHNEiDER" logos, registered a business name featuring "Schneider," and employed a domain name closely resembling the core elements of the "Schneider electric" trademark.

Subsequently, the electrical company sued the Suzhou company, demanding an end to the infringement, a name change, compensation for losses and efforts to mitigate the impact.

The Suzhou company asserted that its use of the contested trademarks was authorized by a foreign entity and that it had not intentionally leveraged the reputation of the trademarks.

At the trial, a Jiangsu court ruled that the Suzhou company had committed trademark infringement and engaged in unfair competition. It ordered the company to immediately cease its infringing activities, complete the business name change process, pay the electrical company 40 million yuan ($5.62 million) in compensation and reimburse the company 150,000 yuan for related expenses.

The Suzhou company appealed the verdict. The Jiangsu High People's Court upheld the lower court's decision, ruling that the Suzhou company had knowingly capitalized on the popularity of the trademarks and businesses involved.

The Supreme People's Court emphasized the commitment of courts nationwide to promoting ethical business practices, safeguarding renowned brands and taking decisive action against deceptive practices such as leveraging the reputation of other brands and counterfeiting.

In cases where substantial evidence of profit from infringement exists, the court will significantly raise the costs associated with infringement to deter all forms of malicious violations, the top court said.

Furthermore, the courts have intensified their efforts to provide judicial protection that supports the development of new productive forces. By focusing on the evolving needs of new forms and models of businesses and exploring judicial frameworks for competition protection in the big data sector, efforts are being made to define data ownership and usage boundaries to foster an open, healthy and secure digital ecosystem, it said.

The Supreme People's Court also disclosed four cases spanning industries including catering, digital television, natural gas and wholesale vegetables, underscoring the vital role of antitrust judicial services in safeguarding public well-being.

These cases offer valuable reference for curbing illegal monopolistic practices, guiding fair and orderly competition among businesses, and standardizing the handling and adjudication of antitrust disputes within the judicial system, the top court said.