2024.04.09
Recently, JunHe assisted a well-known online travel service provider (the “client” or “plaintiff”) in winning an unfair competition case against a competitor (the “competitor” or “defendant”) (the “Case”). The defendant was ordered to compensate the plaintiff for the losses caused due to its unfair competition. The defendant stated that it would not appeal.
The defendant set the plaintiff’s well-known company name and trademark as “keywords” in pay-per-clink (PPC) Internet advertising. As a result of this, when consumers searched for such “keywords” in App stores, the defendant and its App would appear on the top of the search result page. The court fully accepted the arguments put forward by JunHe and analyzed whether the key issue of the Case, i.e. whether the use by a company of another company’s well-known company name and trademark as “keywords” in the PPC advertising constitutes a violation of business ethics under Article 2 of the Anti-Unfair Competition Law of the People’s Republic of China (the “Anti-Unfair Competition Law”). The analysis provides important guidance for the selection of keywords and compliance review in connection with PPC advertising and deserves the attention of Internet companies, e-commerce platforms and brands.
JunHe helped the client to produce evidence and make arguments from the following perspectives:
1. Assisting the client to comprehensively collect evidence
In an unfair competition case, the court will conduct a strict review of the plaintiff’s underlying interests and the defendant’s unfair competition practices. If the plaintiff is unable to provide evidence to prove its underlying interests and the defendant’s infringement, the plaintiff will very likely lose the case. JunHe helped the client to comprehensively collect and present the evidence.
1) Sorting out the evidence supporting the plaintiff’s underlying interests. In the Case, JunHe assisted the client to provide evidence proving its competitive interests should be protected by law from perspectives such as its company name, trademark and business interests, including but not limited to various awards, trademark registration information and webpage search results, thereby fully demonstrating the plaintiff’s underlying interests.
2) Communicating with the court regarding evidence proving the defendant’s infringement. In the Case, the key evidence of the infringement proving that the defendant set the plaintiff’s company name and trademark as keywords was kept by third-party platforms and was unavailable to the plaintiff. JunHe clearly explained the situation to the court and communicated with the necessity of issuing investigation orders to collect evidence and the specific scope of evidence to be obtained. The court adopted JunHe’s opinions and issued investigation orders to the platforms, requiring them to provide the evidence.
2. Selecting the best litigation strategy
In relation to similar alleged infringements, the aggrieved party may file a lawsuit on the grounds of confusion under Article 6, cyber-related unfair competition under Article 12, or a violation of business ethics under Article 2, of the Anti-Unfair Competition Law, or even a trademark infringement under the Trademark Law.
JunHe assisted the client to choose the best strategy by evaluating and analyzing the different strategies. Many believe that the application of laws to the violation of a business ethics claim is uncertain. However, JunHe assisted the client to determine to sue its competitor for the violation of business ethics under Article 2 of the Anti-Unfair Competition Law, eventually achieving satisfactory results.
3. Analyzing the defendant’s violation of business ethics
There are only a few provisions of law regarding “violation of business ethics” as provided for in Article 2 of the Anti-Unfair Competition Law, and courts in different regions hold different views. JunHe reviewed the analysis of the courts at different levels (such as the supreme court, high court, and intermediate court) in relation to similar unfair competition-related disputes, selected precedents that were helpful for the client, prepared a case search report and submitted it to the court for reference. Based on the case search results, JunHe further drafted and updated its post-hearing submissions to support the arguments.
The JunHe team was led by partners SUN, Jiangang (Roy), QI, Da (David) and SHEN, Cheng.
