LAWS AND REGULATIONS

(Adopted at the Third Meeting of the Standing Committee of the Eighth National People's Congress on September 2, 1993 and revised at the 30th meeting of the Standing Committee of the Twelfth National People's Congress on November 4, 2017)

Catalogue

Chapter I General provisions

Chapter II Acts of unfair competition

The third chapter investigates the suspected acts of unfair competition

Chapter IV Legal liability

Chapter V Supplementary Provisions

Chapter I General provisions

Article 1 This Law is enacted with a view to promoting the sound development of the socialist market economy, encouraging and protecting fair competition, stopping acts of unfair competition and protecting the lawful rights and interests of business operators and consumers.

Article 2 Business operators shall, in their production and business activities, abide by the principles of voluntariness, equality, fairness and good faith, and abide by laws and commercial ethics.

"Acts of unfair competition" as used in this Law refers to acts of business operators that, in their production and business activities, violate the provisions of this Law, disrupt the order of market competition and impair the legitimate rights and interests of other business operators or consumers.

The term "business operator" as used in this Law refers to any natural person, legal person or unincorporated organization engaged in the production, business operation of commodities or the provision of services (hereinafter referred to as commodities including services).

Article 3 People's governments at all levels shall take measures to stop acts of unfair competition and create a favorable environment and conditions for fair competition.

The State Council has established a coordination mechanism for anti-unfair competition work, studied and decided on major anti-unfair competition policies, and coordinated and handled major issues concerning the maintenance of market competition order.

Article 4 The departments of the people's governments at or above the county level that perform the administrative duties for industry and commerce shall investigate and punish acts of unfair competition; Where laws or administrative regulations provide that other departments shall investigate and handle such cases, such provisions shall prevail.

Article 5 The State encourages, supports and protects all organizations and individuals to conduct social supervision over acts of unfair competition.

State organs and their functionaries shall not support or shield acts of unfair competition.

Trade organizations shall strengthen industry self-discipline, guide and regulate members' competition according to law, and maintain market competition order.

Chapter II Acts of unfair competition

Article 6 A business operator shall not engage in any of the following acts of confusion to cause people to be mistaken for another person's commodities or to have a specific connection with another person:

(1) Unauthorized use of the name of a commodity, packaging, decoration, etc., which is the same or similar to others;

　　(2) Unauthorized use of enterprise names (including abbreviations, shop names, etc.), social organization names (including abbreviations, etc.), names (including pen names, stage names, translated names, etc.) that have certain influence on others;

(3) Unauthorized use of the main part of the domain name, the name of the website, the webpage, etc., which has certain influence on others;

(4) Other acts of confusion that are sufficient to cause people to be mistaken for the goods of others or have specific connections with others.

Article 7 Business operators shall not bribe the following units or individuals by means of property or other means in order to seek trading opportunities or competitive advantages:

(1) The staff of the other party to the transaction;

(2) Units or individuals entrusted by the other party to handle related affairs; 

(3) Entities or individuals that use their power or influence to influence transactions.

In the course of trading activities, the operator may explicitly pay a discount to the counterparty of the transaction, or pay a commission to the middleman. Where a business operator pays a discount to the other side of a transaction or a commission to an intermediary, it shall faithfully enter the account. Operators who accept discounts and commissions shall also truthfully enter the accounts.

Bribery by the staff of a business operator shall be regarded as an act of the business operator; However, unless the operator has evidence to prove that the staff member's conduct has nothing to do with seeking trading opportunities or competitive advantages for the operator.

Article 8 A business operator shall not make false or misleading commercial publicity about the performance, function, quality, sales status, user evaluations, or previous honors of its commodities, so as to deceive or mislead consumers.

Business operators shall not, by organizing false transactions or other means, help other business operators to carry out false or misleading commercial publicity. 

Article 9 A business operator shall not commit any of the following acts infringing on trade secrets:

(1) Obtaining the business secrets of the right holder by theft, bribery, fraud, coercion or other improper means;

(2) Disclosing, using or allowing others to use the business secrets of the right holder obtained by means mentioned in the preceding paragraph;

(3) Disclosing, using or allowing others to use the trade secret in violation of the agreement or the right holder's requirements for keeping the trade secret. 

Where a third party knows or should know that the employees, former employees or other units or individuals of the right holder of the trade secret have committed the illegal acts listed in the preceding paragraph, but still obtains, discloses, uses or allows others to use the trade secret, it shall be deemed as infringing on the trade secret. 

The term "trade secret" as used in this Law refers to the technical information and business information that are not known to the public, have commercial value and have been kept confidential by the right holder. 

Article 10 The following circumstances shall not exist when a business operator conducts sales with prizes: 

(1) The categories of prizes, the conditions for redemption, the amount of bonuses or prizes and other prize sales information are not clear, affecting the redemption of prizes; 

(2) Sales with prizes by deceptive means of falsely claiming to have prizes or intentionally letting the designated personnel win prizes;

(3) Lottery sales, with the highest prize amount exceeding 50,000 yuan. 

Article 11 A business operator shall not fabricate or disseminate false or misleading information to damage a competitor's commercial reputation or commodity reputation.

Article 12 Business operators engaged in production and business operations through networks shall abide by the provisions of this Law.

Business operators shall not use technical means to influence users' choices or other means to carry out the following acts that hinder or destroy the normal operation of network products or services legally provided by other business operators:

(1) Inserting links or forcing target jumps in the network products or services lawfully provided by other business operators without their consent;

(2) Misleading, deceiving, or forcing users to modify, close, or uninstall network products or services lawfully provided by other business operators; 

(3) Maliciously incompatibility of network products or services lawfully provided by other business operators; 

(4) Other acts that hinder or disrupt the normal operation of network products or services lawfully provided by other business operators. 

The third chapter investigates the suspected acts of unfair competition 

Article 13 Supervision and inspection departments investigating suspected acts of unfair competition may take the following measures: 

(1) entering the business premises suspected of acts of unfair competition for inspection; 

(2) interrogating the business operators under investigation, interested persons and other relevant units and individuals, asking them to explain the relevant situation or provide other information related to the conduct under investigation; 

(3) to inquire and copy agreements, accounts, bills, documents, records, business correspondence and other materials related to suspected acts of unfair competition; 

(4) to seal up or detain property related to suspected acts of unfair competition; 

(5) inquire into the bank accounts of business operators suspected of unfair competition.

In taking the measures prescribed in the preceding paragraph, a written report shall be submitted to the principal person in charge of the department for supervision and inspection, and approval shall be obtained. In taking the measures prescribed in items 4 and 5 of the preceding paragraph, a written report shall be submitted to the principal responsible person of the supervision and inspection department of the people's government at or above the city level divided into districts, and approval shall be obtained. 

Supervision and inspection departments investigating suspected acts of unfair competition shall comply with the provisions of the Compulsory Administrative Law of the People's Republic of China and other relevant laws and administrative regulations, and shall promptly disclose the investigation and investigation results to the public. 

Article 14 When the supervisory and inspection departments investigate suspected acts of unfair competition, the business operators under investigation, interested parties and other relevant units and individuals shall truthfully provide relevant information or information.

Article 15 The supervision and inspection departments and their staff shall have the obligation to keep confidential the trade secrets they come to know in the course of investigation. 

Article 16 For suspected acts of unfair competition, any unit or individual has the right to report to the supervision and inspection department, which shall deal with the case in a timely manner according to law after receiving the report. 

Supervision and inspection departments shall disclose to the public the telephone number, mailbox or E-mail address for receiving reports, and keep the informant confidential. For real-name reporting and providing relevant facts and evidence, the supervision and inspection department shall inform the informant of the handling results. 

Chapter IV Legal liability

Article 17 A business operator who violates the provisions of this Law and causes damage to others shall bear civil liability according to law.

A business operator whose lawful rights and interests have been harmed by an act of unfair competition may bring a suit in a people's court. 

The amount of compensation for a business operator injured by an act of unfair competition shall be determined on the basis of the actual losses suffered by the business operator as a result of the infringement; If the actual loss is difficult to calculate, it shall be determined according to the benefits the infringer has gained from the infringement. The amount of compensation shall also include reasonable expenses paid by the business operator to stop the infringing act.

Where a business operator violates the provisions of Article 6 and Article 9 of this Law, and it is difficult to determine the actual losses suffered by the right holder as a result of the infringement, or the benefits gained by the infringer as a result of the infringement, the people's court shall make a judgment to compensate the right holder not more than three million yuan according to the circumstances of the infringement. 

Article 18 Where a business operator violates the provisions of Article 6 of this Law by engaging in acts of confusion, the supervision and inspection department shall order him to stop the illegal act and confiscate the illegal commodities. If the amount of illegal business is more than 50,000 yuan, a fine of not more than five times the amount of illegal business may be concurrently imposed; If there is no illegal business or the amount of illegal business is less than 50,000 yuan, a fine of not more than 250,000 yuan may also be imposed. If the circumstances are serious, the business license shall be revoked. 

Where the name of an enterprise registered by a business operator violates the provisions of Article 6 of this Law, the name change registration shall be handled in a timely manner; Before the name is changed, the original enterprise registration authority shall replace its name with a unified social credit code.

Article 19 Where a business operator, in violation of the provisions of Article 7 of this Law, bribes others, the supervision and inspection department shall confiscate the illegal gains and impose a fine of not less than 100,000 yuan but not more than 3 million yuan. If the circumstances are serious, the business license shall be revoked.

Article 20 Where a business operator, in violation of the provisions of Article 8 of this Law, conducts false or misleading commercial publicity for its commodities, or assists other business operators in conducting false or misleading commercial publicity by organizing false transactions or other means, the supervision and inspection department shall order him to cease his illegal act and impose a fine of not less than 200,000 yuan but not more than one million yuan; If the circumstances are serious, a fine of not less than one million yuan but not more than two million yuan shall be imposed, and the business license may be revoked.

Business operators who violate the provisions of Article 8 of this Law by publishing false advertisements shall be punished in accordance with the provisions of the Advertising Law of the People's Republic of China. 

Article 21 Where a business operator violates the provisions of Article 9 of this Law and infringes on trade secrets, the supervision and inspection department shall order him to cease his illegal act and impose a fine of not less than 100,000 yuan but not more than 500,000 yuan; If the circumstances are serious, a fine of not less than 500,000 yuan but not more than 3 million yuan shall be imposed. 

Article 22 Where a business operator violates the provisions of Article 10 of this Law by selling with prizes, the supervision and inspection department shall order him to stop his illegal acts and impose a fine of not less than 50,000 yuan but not more than 500,000 yuan. 

Article 23 Where a business operator, in violation of the provisions of Article 11 of this Law, damages the business reputation or commodity reputation of a competitor, the supervision and inspection department shall order him to stop the illegal act, eliminate the impact, and impose a fine of not less than 100,000 yuan but not more than 500,000 yuan; If the circumstances are serious, a fine of not less than 500,000 yuan but not more than 3 million yuan shall be imposed. 

Article 24 Where a business operator, in violation of the provisions of Article 12 of this Law, obstructs or disrupts the normal operation of network products or services lawfully provided by other business operators, the supervision and inspection department shall order him to stop his illegal act and impose a fine of not less than 100,000 yuan but not more than 500,000 yuan; If the circumstances are serious, a fine of not less than 500,000 yuan but not more than 3 million yuan shall be imposed. 

Article 25 Where a business operator engages in unfair competition in violation of the provisions of this Law and has taken the initiative to eliminate or mitigate the harmful consequences of the illegal act, it shall be given a lighter or mitigated administrative penalty according to law; Where the illegal act is minor and corrected promptly, and no harmful consequences are caused, no administrative penalty shall be imposed. 

Article 26 Where a business operator, in violation of the provisions of this Law, engages in unfair competition and is subject to administrative penalties, the supervisory and inspection department shall enter the credit record and publicize it in accordance with the provisions of relevant laws and administrative regulations. 

Article 27 If a business operator violates the provisions of this Law, he shall bear civil, administrative and criminal liability. If his property is not sufficient to pay, priority shall be given to bear civil liability. 

Article 28 Where a supervision and inspection department obstructs the performance of its duties in accordance with this Law, refuses or obstructs an investigation, the supervision and inspection department shall order it to make corrections, impose a fine of not more than 5,000 yuan on an individual and a fine of not more than 50,000 yuan on a unit, and impose administrative penalties for public security by the public security organ according to law. 

Article 29 If a party is not satisfied with the decision made by the supervision and inspection department, it may apply for administrative reconsideration or bring an administrative lawsuit in accordance with law. 

Article 30 Any staff member of a supervision and inspection department who abuses his power, neglects his duty, engages in malpractices for personal gain or divulges any business secret he has learned in the course of investigation shall be punished according to law. 

Article 31 Whoever violates the provisions of this Law and constitutes a crime shall be investigated for criminal responsibility according to law. 

Chapter V Supplementary Provisions

Article 32 This Law shall come into force as of January 1, 2018.

Source: All China Patent Agents Association