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Manage your Intellectual Property in Mainland China, HongKong, Macao and Taiwan

What are the differences between taking action against an infringer based on ‘IP’ regulations and ‘unfair competition’ regulations in China?

In China, an action against unfair competition may offer protection in situations which are not specifically covered by the laws protecting intellectual property. An action against an infringer based on intellectual property regulations requires proof of relevant rights and infringement whereas a claim for unfair competition may not require proof of registered rights in China. For instance, trade mark infringement may be limited to situations where an infringer uses a trade mark identical or similar to another registered trade mark without authorisation from the trade mark registrant. Whereas, in an unfair competition claim, use of an unregistered trade mark, or using names, packaging, or decoration similar to a well-known mark, enterprise or name on a good may be actionable under unfair competition, even if not necessarily actionable under intellectual property laws. Having said that, the levels of proof required to show that a trade mark is well-known in China is high.

Unfortunately unlike in many European jurisdictions, the availability of unfair competition actions is much narrower. Typically where you have already registered intellectual property rights in China, you would take action under the intellectual property regulations. Where the activity at issue is not actionable under the intellectual property regulations (e.g. trade secret misappropriation), or you do not have relevant intellectual property rights in China (e.g. in the case of unregistered trade marks) you should consider whether unfair competition actions are available.

Unfair competition covers misappropriation of trade secrets, false advertising, tie-in sales, disseminating misinformation with the aim of damaging the goodwill of a competitor or its products etc. Therefore, the relative effectiveness of intellectual property and unfair competition claims would depend much on what activity is at issue and whether or not you have registered rights in China.