In Part I, we discussed five cases involving trademark distinctiveness, semiconductor patents, punitive damages, trade secret protection, and malicious employee poaching. This article highlights five additional cases concerning data scraping, anti-counterfeiting enforcement, online commercial defamation, platform liability, and bad-faith trademark filings.
6. Data Scraping Must Be Assessed Based on Both Access Methods and Use Scenarios
Key Holding
The court held that the platform operators had legitimate commercial interests in the product data stored on their e-commerce platforms based on merchant authorizations and contractual arrangements. In assessing data-related unfair competition claims, the key is to distinguish between the legitimacy of data acquisition methods and the reasonableness of data use scenarios. The defendants bypassed anti-scraping measures, obtained platform data through technical means including user cookies, and used the data to provide commercial products and services. The court found that such conduct interfered with the normal operation of the platforms, undermined their security mechanisms, infringed consumer privacy, and disrupted fair market competition, thereby constituting unfair competition.
Significance
This case reflects the Chinese courts’ emerging approach of layered protection for data rights. The decision distinguishes between public and non-public data, commercial data and personal information, and clarifies the legal boundaries governing both data acquisition and data utilization. It seeks to balance data accessibility and innovation against the need to prevent abusive scraping and unfair exploitation.
Practical Takeaway
Although China has not enacted a dedicated data rights law, its courts have already developed a relatively mature framework for the protection of different categories of data. This decision largely reaffirms existing judicial principles rather than creating new rules.
Interestingly, relatively few data-related disputes in China have involved foreign rights holders. Most leading cases have arisen from competition among Chinese technology platforms. It will be interesting to see whether more foreign companies seek to enforce their data-related interests before Chinese courts as the digital economy continues to evolve.
7. Civil Litigation May Uncover Criminal Counterfeiting Activities
Key Holding
During the course of a trademark infringement lawsuit, the court discovered evidence indicating that the source of the infringing products might constitute a criminal offense. The case was subsequently referred to the public security authorities, leading to a criminal investigation and prosecution. The defendant was found guilty of counterfeiting registered trademarks by assembling and selling counterfeit batteries bearing another company’s registered trademark over an extended period. Taking into account the defendant’s voluntary confession, guilty plea, compensation to the trademark owner, and reconciliation with the victim, the court imposed a suspended prison sentence, a criminal fine, and ordered the destruction of the infringing products.
Significance
This case illustrates the growing integration of civil, administrative, and criminal enforcement mechanisms in China’s intellectual property system. By transferring criminal clues discovered during civil proceedings, the court helped identify and prosecute the upstream source of counterfeit products, demonstrating how different enforcement channels can work together to combat large-scale infringement.
Practical Takeaway
Counterfeit battery cases present particular enforcement challenges because the cost of producing counterfeit products is often extremely low, while distribution networks can be extensive and difficult to trace. In practice, relying on a single enforcement mechanism may not always produce satisfactory results. This case highlights the value of coordinated civil and criminal enforcement, as evidence uncovered during civil proceedings may ultimately lead to criminal investigation and prosecution against the source of counterfeit products.
8. Online Commercial Defamation May Result in Joint Liability
Key Holding
The court found that the defendant had fabricated and disseminated false and misleading information concerning a company’s business model, product quality, commercial reputation, and the personal reputation of its founder. The court held that such conduct constituted commercial defamation because it damaged consumer trust, caused product returns, negatively affected sales, and disrupted fair competition. The court further held that the use of insulting and defamatory statements against the founder infringed his personal reputation rights. In addition, the court imposed joint liability on the account holder who permitted the use of the social media account and on affiliated companies that benefited from the traffic generated by the defamatory content.
Significance
This case clarifies the boundary between legitimate public commentary and commercially motivated online defamation. The decision demonstrates the courts’ willingness to impose liability on individuals and businesses that exploit false information to gain competitive advantages through social media traffic and online influence.
Practical Takeaway
Social media has created many millionaires, but it has also created an unprecedented environment for the rapid spread of rumors and misinformation. This case confirms that Chinese courts are prepared to take a strict approach where false or misleading statements are used to attract traffic, generate sales, or obtain competitive advantages. Importantly, liability may extend beyond the content creator to account holders and affiliated businesses that knowingly benefit from the infringement.
9. Online Platforms May Face Liability for Failing to Act Against Pirated E-Books
Key Holding
The court held that the e-commerce platform operator should bear joint liability for the sale of pirated e-books on its platform. Although the platform had established certain qualification requirements for sellers of publications, it failed to properly implement those requirements, did not verify the necessary licenses, and failed to conduct ongoing monitoring. More importantly, despite receiving multiple cease-and-desist letters identifying specific infringing e-books, the platform failed to take timely and necessary measures. The court therefore held the platform jointly liable with the seller for copyright infringement.
Significance
This case reinforces the principle that online platform operators may be held jointly liable where they know or should know that infringing activities are taking place on their platforms and fail to take necessary action. The decision emphasizes the importance of platform governance, proactive monitoring, and effective notice-and-takedown mechanisms in combating online copyright infringement.
Practical Takeaway
Copyright damages in online piracy cases are often relatively modest, making it difficult for rights holders to achieve meaningful results by pursuing individual sellers alone. This case provides an alternative enforcement strategy by placing greater responsibility on platform operators that fail to respond to repeated infringement notices.
10. Repeated Bad-Faith Trademark Filings May Constitute Unfair Competition
Key Holding
The court held that a competitor’s repeated applications for trademarks similar to the well-known “Blue Girl” trademarks, despite multiple prior adverse decisions from both the CNIPA and Chinese courts, constituted unfair competition. The court found that the trademark filings exceeded legitimate business needs, were intended to exploit the goodwill associated with the plaintiff’s trademarks, and disrupted fair market competition. The court further held that the trademark agency assisting with the filings should bear joint liability because it continued to provide trademark filing services despite being aware of the applicant’s pattern of bad-faith filings.
Significance
This case demonstrates the Chinese courts’ continued efforts to combat repeated bad-faith trademark filings through the Anti-Unfair Competition Law. More importantly, it confirms that trademark agencies may also face liability where they knowingly participate in or facilitate abusive filing strategies. The decision reinforces the principle that both applicants and professional intermediaries share responsibility for maintaining a fair trademark registration system.
Practical Takeaway
China has made significant progress in combating bad-faith trademark filings in recent years. While trademark registrants remain the primary targets, this case shows that courts may also hold trademark agencies accountable when they continue assisting repeat bad-faith filers despite clear warning signs. More importantly, the decision provides trademark owners with an additional enforcement tool. Instead of relying solely on opposition and invalidation proceedings, rights holders may consider civil litigation under the Anti-Unfair Competition Law against persistent bad-faith filers and, where appropriate, the agencies assisting them
