Does the similarity in packaging and decoration necessarily constitute infringement?

In practice, to combat infringement of counterfeit products' appearance, packaging, and decoration, the main consideration is generally to use established design patents, copyrights, trademarks, and other rights to protect rights. In recent years, citing the packaging and decoration rights stipulated in Article 6 of the Anti Unfair Competition Law to sue infringing parties seems to be more favored by rights holders. Compared to others, using the path of unfair competition to protect one's rights can not only compensate for the lack of other proprietary rights, but also enable those who identify the infringing party as engaging in unfair competition to seek higher compensation.

Anti Unfair Competition Law of the People's Republic of China (Revised in 2019)

Article 6: Operators shall not engage in the following confusing behaviors, which may lead people to mistakenly believe that they are other people's goods or have specific connections with others:

（1） Unauthorized use of product names, packaging, decorations, and other similar or identical signs that have a certain impact on others;

（2） Unauthorized use of enterprise names (including abbreviations, trade names, etc.), social organization names (including abbreviations, etc.), and personal names (including pen names, stage names, translated names, etc.) that have a certain influence on others;

（3） Unauthorized use of domain names, website names, web pages, etc. that have a certain impact on others;

（4） Other confusing behaviors that can lead people to mistake them for other people's products or have specific connections with others.

In judicial practice, when the accused infringing goods are similar in appearance to the rights holder's goods as a whole, it is easy to directly determine infringement based on the literal meaning of Article 6 of the Anti Law. At this point, it is necessary to explore the legislative intent of this provision, clarify what "packaging and decoration protection with certain impact" means, what its legal basis is, and how to define the protection threshold for its "identifiable function".

Article 4 of the Interpretation 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 (Interpretation [2022] No. 9) stipulates that a mark with a certain market reputation and significant characteristics that distinguish the source of goods can be recognized by the people's court as a "mark with certain influence" as stipulated in Article 6 of the Anti Unfair Competition Law. The people's court shall comprehensively consider factors such as the level of public awareness within China, the time, region, amount, and target of product sales, the duration, degree, and geographical scope of publicity, and the protection of the identification when determining whether the identification provided for in Article 6 of the Anti Unfair Competition Law has a certain market reputation. Therefore, the sales and promotion of products packaged and decorated in this way are strong evidence of the market awareness of the packaging and decoration.

The identification function that packaging and decoration should have refers to the ability of consumers to recognize which company provides goods or services when they see the packaging and decoration. It is precisely packaging and decoration that can play a role in identifying the source of goods and establish a stable corresponding relationship with specific operators. Packaging and decoration have the value of protection and the legitimacy of private ownership.

Packaging and decoration should be protected by law, and having a certain market reputation is just one of the conditions. Whether they have recognizability is a more critical and substantive condition. If there are a large number of entities in the market using the same or similar packaging and decoration, and a specific operator cannot be identified through the packaging and decoration, then the packaging and decoration still do not have recognizability. If the packaging and decoration of a certain product use identifying elements of a third-party entity, and the entity identified through packaging and decoration is not the operator who provides the product or service, then the packaging and decoration rights of the product cannot be enjoyed by the operator. Therefore, if the packaging and decoration of the goods cannot play a role in identification, or if the entity identified through the packaging and decoration is not the operator providing the goods or services, the operator will not be able to claim packaging and decoration rights that have a certain impact according to Article 6 of the Anti Unfair Competition Law.

In an unfair competition case represented by the defendant, the plaintiff used third-party promotional slogans for their decoration and claimed protection under the Anti Unfair Competition Law based on this decoration. We have collected products with similar decorations from numerous other market entities, proving that the decoration is not identifiable, and submitted relevant consumer reviews to prove that even if it is identifiable, the identified entity is not the plaintiff, thus defending that the plaintiff does not enjoy the legal interests protected by the Anti Unfair Competition Law. Based on this, the plaintiff waives the claim of Article 6 of the Anti Law and instead requests the application of the general principle provisions stipulated in Article 2 of the Anti Law.

We believe that Article 2 of the Anti Unfair Competition Law is a comprehensive provision, and if there are specific provisions, they should be applied. The rights and actions claimed by the plaintiff still fall within the scope of Article 6 of the Anti Unfair Competition Law and should not be subject to Article 2.

Article 2, Paragraph 2 of the Anti Unfair Competition Law stipulates that "unfair competition behavior" referred to in this Law refers to the behavior of operators who violate the provisions of this Law, disrupt market competition order, and harm the legitimate rights and interests of other operators or consumers in their production and operation activities. This clause is an abstraction and summary of the basic principles of market transactions, and the specific competitive behaviors stipulated in Chapter 2 are all concretizations of the principle provisions of Article 2. In today's Internet and big data market environment, the market transaction competition mode is changing with each passing day. It is very likely that there will be unfair competition beyond the specific terms. At this time, the principled terms will have a place to play.

Article 2 of the Anti Law, as a general provision, should adopt strict and humble application standards. When determining whether a certain behavior can be regulated by Article 2 of the Anti Law, it is necessary to distinguish whether the legislative body's attitude is "not considering the issue" or "has indicated that it does not provide protection". The attitude of the legislative body towards any unfair competition behavior that has been regulated by specific provisions of the law is already clear, that is, the behavior will only be regulated when it meets the conditions stipulated in the specific provisions. The first article of the Interpretation 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 (Interpretation [2022] No. 9) clarifies that the acts regulated by Article 2 of the Anti Unfair Competition Law must be "outside of the provisions of Chapter 2 of the Anti Unfair Competition Law and the Patent Law, Trademark Law, Copyright Law, etc.". Therefore, only when the accused behavior exceeds the scope of specific unfair competition behaviors explicitly listed by law, can it be adjusted by applying Article 2 of the Anti Law; If it does not exceed the limit, the corresponding specific regulations should be applied for adjustment, and the provisions of Article 2 cannot be applied. Otherwise, it will lead to a lack of certainty and predictability in the application of the law, and may ultimately result in the specific provisions of the law being overridden.

In the above-mentioned case, the act of confusing imitation of product packaging and decoration has been clearly stipulated in Article 6 of the Anti Unfair Competition Law. When the plaintiff's packaging and decoration do not meet the protection conditions stipulated in Article 6 and the defendant's behavior does not violate Article 6 of the Anti Unfair Competition Law, it means that the behavior has not exceeded the scope of regulation of the Anti Unfair Competition Law and does not constitute unfair competition behavior. In the end, the first instance judgment of this case rejected all of the plaintiff's claims.

conclusion

The verdict of the above case clearly indicates that in order for the packaging and decoration of goods to receive legal protection, they need to have sufficient recognizability. Packaging, decoration, patent rights, trademark rights, and other rights that have a certain impact should be protected carefully and strictly defined without authorization, registration, and public disclosure by national public authorities. Otherwise, market entities will be at risk. The judgment of this case also clearly defined the boundary between free competition and unfair competition. Not all similarities constitute infringement, and not all references are unfair competition.