On December 25, 2024, the China’s National People’s Congress (NPC) released the draft Anti-Unfair Competition Law (AUCL, 反不正当竞争法(修订草案)) for comment. From an IP perspective, the Draft updates Article 7 for newish technology. However, Artificial Intelligence is left out and might warrant a comment, e.g., to prevent LLM hallucinations that cause confusion as to a connection to others. The Draft also adds an extraterritorial Article 40 that might inadvertently snare foreign companies in edge cases.  

The Draft also covers other areas of unfair competition including:

• Investigating both bribery and acceptance of bribes (Article 8);
• Operators shall not use data, algorithms, technology, platform rules, etc. to engage in unfair competition such as malicious transactions (Article 13);
• False advertising (Article 9), unfair sales with prizes (Article 11), commercial defamation (Article 12), and abuse of dominant position to damage the legitimate rights and interests of small and medium-sized enterprises (Article 15).

A translation of Article 7 and 40 follow.

Article 7: Business operators shall not engage in the following confusing conduct that may mislead people into believing that their products are those of others or that they have a specific connection with others:

(I) Unauthorized use of the same or similar logos as others’ product names, packaging, decorations, etc. that have a certain influence;

(II) Unauthorized use of others’ enterprise names (including abbreviations, business names, etc.), names of social organizations and non-legal organizations (including abbreviations, etc.), names (including pen names, stage names, translated names, etc.);

(III) Unauthorized use of the main part of a domain name, website name, web page, new media account name, application name or icon, etc. that has a certain influence on others;

(IV) Unauthorized use of another’s registered trademark or unregistered well-known trademark as the name of the enterprise;

(V) Unauthorized use of another’s influential product name, enterprise name (including abbreviation, name, etc.) as its search keyword;

(VI) Other confusing behaviors that are sufficient to mislead people into believing that it is another’s product or has a specific connection with another.

Operators shall not assist others to carry out confusing conduct.

 Article 40: Unfair competition activities stipulated in this Law that are carried out outside the territory of the People’s Republic of China and disrupt the domestic market competition order or damage the legitimate rights and interests of domestic operators shall be dealt with in accordance with the provisions of this Law and relevant laws.

Comments are due January 23, 2025. The full text and a comparison table is available here (Chinese only). A translation of the current law from WIPO is available here.