The 2017 version of Anti-unfair Competition Law deleted and revised the "counterfeits another's registered trademark" in the 1993 version. But there still exists the problem of links on the problem of counterfeiting and confusion between the 2017 version and the Trademark Law that is enforced in 2014.

1. Legal application for counterfeiting registered TMs

Article 6 of 2017 version of Anti-unfair Competition Law provides:" A business operator shall not conduct any of the following acts of confusion to cause its products from being mistaken for the products of others or from being mistaken as having specific connection with others:

(1) Where the business operator uses, without authorization, logos identical with or similar to others' product names, packaging or decoration that has certain influence;

(2) Where the business operator uses, without authorization, others' enterprise names (including abbreviations, trade names, etc.), social organization names (including abbreviations, etc.) or names (including pen names, stage names, translated names, etc.) that have certain influence;

(3) Where the business operator uses, without authorization, the main parts of others' domain names, website names, web pages, etc. that have certain influence; or

(4) Other acts of confusion enough to cause its products from being mistaken for the products of others or from being mistaken as having specific connection with others."

Item (1) of Article 5 of the 1993 version is deleted. The purpose of this revision is that TM rights infringing acts will no longer be applicable to the 2017 version of Anti-unfair Competition Law, but will be applicable to Articles 57 and 60 of Trademark Law effected in 2014.

2. From "well known" and "unique" to "has certain influence"

"a unique name, package, or decoration of another's famous commodity" in Item 2, Article 5 of 1993 version of Anti-unfair Competition Law has been revised as "logos identical with or similar to others' product names, packaging or decoration that has certain influence" in Article 6 of the 2017 version. The "certain influence" here means known to relevant public. The change of this provision makes it clear that the new law protects all business marks that are popular among relevant public, not just famous brands.

In practice, it is a common understanding that the "a unique name, package, or decoration of another's famous commodity" is equal to unregistered famous brands in Trademark Law. And the product names, packaging or decoration, enterprise names, social organization names, main parts of others' domain names, website names, web pages, etc that "have certain influence" in the 2017 version of Anti-unfair Competition Law are equal to the unregistered in the Trademark Law effected in 2014. It worth noting that the "have certain influence" in the 2017 version shall not go beyond the protection scope of unregistered famous brands.

3. Which is the key in determining counterfeiting, actual confusion or enough to cause confusion?

"Confusion" is the key in determining whether the 2017 version of Anti-unfair Competition Law is violated. But there exists huge difference in the determination of actual confusion and enough to cause confusion.

Law of the People's Republic of China Against Unfair Competition (Revised Draft for Review) published on February 2016 for solicitation of public comments had the expression of "misleading the public and causing market confusion". The expression of "causing market confusion" was deleted in the revised draft for review in the February 2017 version. But was again changed to "A business operator shall not conduct any of the following acts of confusion to cause its products from being mistaken for the products of others or from being mistaken as having specific connection with others" in the second draft in August 2017. With the back-and-forth changes, there comes the confusion of which is the key in determining counterfeiting, actual confusion or enough to cause confusion?

To answer this question, we have to refer to the Trademark Law, where paragraph 2 of Article 13 and paragraph 2 of Article 57 all use "likely to cause confusion" as determination standard for acts of reproduction, imitation, or translation of another's well-known trademark not registered in China and using a trademark that is similar to a registered trademark on the same goods, or using a trademark that is identical with or similar to the registered trademark on similar goods. Legislative consistence pursues inner coordination and unification. Though Article 6 of the 2017 version starts with "A business operator shall not conduct any of the following acts of confusion to cause its products from being mistaken for the products of others or from being mistaken as having specific connection with others", but the save clause (4) provides "Other acts of confusion enough to cause its products from being mistaken for the products of others or from being mistaken as having specific connection with others". Therefore, the determination standard for acts of counterfeiting and confusion in the 2017 version is "enough to cause confusion".

4. Link and application of Article 58 of Trademark Law and 2017 version of Anti-unfair Competition Law

Article 58 of the Trademark Law effected in 2014 provides "Whoever constitutes unfair competition by using a registered trademark or an unregistered well-known trademark of another party as the trade name in its enterprise name to mislead the public shall be dealt with in accordance with the Anti-unfair Competition Law of the People's Republic of China." This is a new clause added in its revision. But the 1993 version of Anti-unfair Competition Law did not provide such provision, which posed a difficult problem for law enforcement officials.

For handling of acts of using a registered trademark or an unregistered well-known trademark of another party as the trade name in its enterprise name to mislead the public, Article 58 of Trademark Law, or Articles 6, 17 and 18 of the 2017 version of Anti-unfair Competition Law could be applied. It is hoped that this opinion could be affirmed through administrative and judicial practices after the enforcement of the 2017 version of Anti-unfair Competition Law.

It worth noting that this revision increased the punishment against IPR infringing acts, with the highest amount of administrative penalty raised from the RMB 200,000 as provided in the 1993 version, to RMB 3 million in the 2017 version. And the revision also granted high compensation amount against infringement "Where a business operator violates Article 6 or Article 9 herein, and the actual loss suffered by the right holder as a result of the infringement and the profits gained by the infringer from the infringement are both difficult to determine, the competent people's court shall render a judgment on awarding compensation of up to RMB 3 million to the right holder depending on the circumstances of the infringing acts".

Edited by Rongrong Luo (Attorney-at-Law/ Patent Attorney) and Yi Qu (Patent Attorney)

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.