CHINA / TRADE MARKS / COMPARATIVE ADVERTISING

IP Asia: Intellectual Property and Communications Law, Vol 12 No 6, Aug 2000

The Rules of the Advertising Game

Chris Betts and Matthew Murphy

According to the authors of this article, "trade mark owners need to be careful with advertising in China … aggressive campaigns which might work in other countries can be punished". The authors outline the provisions of the Anti-Unfair Competition Law of 1993 and the Adverising Law of 1994 and they refer to the Trademark Law and to the regulations made by the State Administration for Industry and Commerce. An interesting difference between the two principal laws lies in their respective provisions on compensation for a breach of the law. "Both Article 20 of the Anti-Unfair Competition Law and Article 38 of the Advertising Law provide that any business operator who engages in false or misleading advertising causing damage is liable to pay compensation." However, the Advertising Law is primarily directed towards the protection of consumers’, as distinct from competitors’, interests. It follows that breaches of the Advertising Law may enable consumers to claim damages, while breaches of the Anti-Unfair Competition Law, particularly in relation to comparative advertising, may enable competitors to claim damages. If the comparative advertising also features the registered trade mark of a competitor and an advertiser has, for example, insufficiently differentiated his product from the product to which a comparison is being made, then the claim for damages may be strengthened by the claim that Article 38 of the Trademark Law has been infringed. Under the relevant regulations, civil claims for damages may be accompanied by the imposition of penalties and of prohibitions on the continuance of the advertising in question. The authors illustrate their point with citations of cases in the Chinese courts and conclude that foreign companies mounting aggressive comparative adveristising in China "may attract the attention of the regulators (and their competitors)". [20028]