The Supreme People's Court recently issued the Interpretations of the Supreme People's Court on Several Issues Concerning the Application of the Anti-Unfair Competition Law of the People's Republic of China (Draft for Comments) to solicit opinions from the public (see http://www.court.gov.cn/zixun-xiangqing-318221.html for details in Chinese）. It includes the following main contents:

The Draft defines the applicable norms of Article 2, the principle clause of the Anti-unfair Competition Law(general acts of unfair competition), i.e., where the act is not explicitly listed in the Chapter II of the Anti-unfair Competition Law (acts of unfair competition) and other relevant laws, but violates the principle of good faith and business ethics, and disrupts the market competition order, and harm the legitimate rights and interests of other business operators or consumers, the people's court may apply Article 2 of the Anti-unfair Competition Law to identify. The "other business operators" and "business ethics" stipulated in Article 2 are also clarified.

The Draft also defines the identification norms of "confusion acts" stipulated in Article 6 of the Anti-unfair Competition Law, including the identification of elements of confusion acts constituting unfair competition such as "having a certain impact" and "use", and also clarifies the situations including helping confusion and bona fide use.

The Draft also explains the specific Internet article of the Anti-unfair Competition Law in response to the frequent Internet unfair competition disputes. In addition, it clarifies the judgment criteria for the use of user data to constitute unfair competition, including whether to obtain the consent of users, whether it is sufficient to substantially replace the products or services provided by other business operators, and damage the market order of fair competition and the legitimate rights and interests of consumers, etc.

In addition, the Draft also increases the discretionary compensation for violation of the general provision of the Anti-unfair Competition Law, false publicity, business defamation and unfair competition on the Internet. Where it is difficult to determine the actual losses suffered by the right holder due to infringement and the interests obtained by the infringer due to infringement, the court may refer to the provisions on damages for confusion acts and infringement of trade secrets, and order to award a compensation of 5 million RMB at maximum to the right holder.