China& SAIC Issues Second Draft of Proposed Amendments to its Law Against Unfair Competition

The draft contains similarly changes and improvements on business bribery, infringement of change secrets and techniques and unfair opposition in the net field. Its most important modifications are as follows: 1. Further clarification of the scope of commercial bribery (Article 7 of the Second Draft for Review) Item 1, Article 7 of the First Draft for Review of the Anti-Unfair Competition FIND MORE LEGAL ARTICLES Law (First Draft for Review) offers that the business operators shall not use their property or different means to bribe buying and selling counter birthday party or any third-celebration who may also have an impact on the transaction; furthermore, the provision gives the definition for “any 0.33 birthday party who can also have a have an effect on the transaction” – any devices and persons which might also use its/his or her authority to make influence on the transaction.

There has been criticism, that the scope of “the devices and persons that may use its/his or her authority to make the have an effect on the transaction”, is not clearly sufficient for human beings to understand. So the associated Law Committee decided to combine Item 1 with Item four Therefore, Article 7 of the Second Draft for Review clarifies the 4 types of parties, that cannot be provided for any property or different means, in order to are trying to find buying and selling possibilities or competitive advantages:


a) The stuff of buying and selling counterparty; b) Units and persons coping with related matters entrusted through the buying and selling counterparty; c) State organs, state-owned corporations and enterprises, public institutions, people’s organizations, or national staff; d) Units and individuals, which may also use its/his or her authority on countrywide group of workers to make an have an impact on the transaction. 2. Further clarification of the provisions of the violation of trade secrets and techniques (Article 9 and 10 of the Second Draft for Review) Article 9 and 10 of the First Draft for Review concerns the safety of exchange secrets. Article 10 prohibits personnel and former personnel to violate any alternate secrets and techniques and requires nation officials, lawyers, certified accountants, and other experts to keep them as well.

However, there is the opinion, that the predominant physique of the Anti-Unfair Competition Law is a business operator, the personnel and the former personnel of the trade secrets and techniques owners are no longer enterprise operators. Besides this, exchange secrets and techniques owners can also reap relieves via other felony skills for the infringement of alternate secrets and techniques carried out through employees, kingdom officials and lawyers, qualified accountants and other professionals, such as making use of Labor Law, Company Law.

Thus, Article 10 of the First Draft for Review used to be removed. Furthermore, Article 9 of the Second Draft for Review further clarifies, that obtaining, disclosing, the usage of or allowing a third birthday party to use the trade secrets and techniques is deemed as an infringement upon alternate secrets and techniques if the 0.33 party is aware of or need to be aware of the fact, that the change secrets were bought from the illegal conduct of employees and former employees, or different gadgets and individuals. 3 Adding of time-honored provisions and miscellaneous clauses on unfair opposition in the web area (Article 12 of the Second Draft for Review) Article 14 of the First Draft for Review lists the unfair opposition behaviors in the web area by using technical means.

However, there is an opinion considering, that new technologies and business fashions improve and trade very quickly. It is therefore criticized, that the above-mentioned list of unfair opposition behaviors cannot cover the new web technologies and commercial enterprise models appear in the future.

Therefore, widespread provisions and miscellaneous clauses are necessary. In this sense, Article 12 of the Second Draft for Review adds a well-known provision: The operator shall no longer use the technical means, by affecting the user’s preference or other skill and might also no longer have interaction in obstruction, destruction of the ordinary operation on network products or offerings furnished through different operators. Besides this, Article 12 of the Second Draft for Review carries a miscellaneous clause:


The operator shall not habits different impediments to the obstruction, destruction of the regular operation on network merchandise or services supplied by using different operators. 4 Increase in the variety of statutory damages (Articles 17 – 25 of the Second Draft for Review) Article 17 affords that the amount of compensation is to be determined by means of the “actual loss suffered due to infringement”; if this is challenging to calculate, the amount of compensation is the amount, that the infringer has gained from the infringement, inclusive of prices to stop the infringement behavior performed by way of the commercial enterprise operators. The rights owner may additionally be awarded compensation up to RMB 3 million yuan for violations of Article 6 and 9. Article 25 newly states that if a violation is “minor” and “corrected in a timely manner”, the operator is exempt from the administrative penalty.