CHANG TSI
Insights
On June 27, 2025, the third amendment to China’s Anti-Unfair Competition Law (AUCL) was passed and will take effect on October 15, 2025. On the day of its adoption, we released an overview of the revision (accessible here).
The AUCL is closely related to intellectual property (IP) protection and is often regarded as part of the modern IP legal framework in China. However, this close relationship does not diminish its character as competition law. Moreover, as the AUCL governs conduct regulation while IP law focuses on rights protection, their protected objects and regulatory approaches differ fundamentally.[1] This review—divided into two parts—will analyze the specific revisions in the third AUCL amendment, focusing on the confusion provision and online unfair competition, to explore their practical implications for future IP protection.
The confusion provision (Article 6 of the current AUCL / Article 7 of the revised AUCL) is the primary highlight of this amendment and represents the strongest bridge between the AUCL and IP law. Article 7 of the new AUCL has made the following revisions based on Article 6 of the current law: 1. Expands protected distinctive signs, adding online usernames, new-media account names, and application software names or icons while streamlining the original provision; 2. Specifies the types of confusion acts, explicitly regulating the behavior of using others' trademarks as trade names or setting others' signs as search keywords; 3. Introduces regulation of aiding confusing acts.
Compared to China’s current law and drafts during the amendment process, the wording regarding protected distinctive signs underwent repeated deliberations. These include revising "enterprise name" to "market entity name" and adding "name of an unincorporated organization". However, the final version merges "enterprise name (including abbreviations, trade names, etc.) and social organization name (including abbreviations, etc.)" into "name (including abbreviations, trade names, etc.)", which not only streamlines the language but also broadens the protectable entities. Meanwhile, Article 7 of the revised law clearly includes "online usernames", "new media account names", and "application names or icons", which strongly reflect the contemporary trends.
Undoubtedly, the above-mentioned revisions are a direct response to the rapid growth of the Internet and new media in China. Statistics show that in 2024, five major platforms in China—Douyin, Kuaishou, Rednote, Weibo, and Bilibili—covered 1.071 billion users.[2] Therefore, these novel signs carry goodwill, attract significant traffic, and serve critical source-identifying functions.
Previously, courts generally protected these signs by broadly interpreting the existing signs (e.g., stage names, company names, etc.) under the current law. Post-amendment, these new distinctive signs gain clearer and direct statutory protection. After the implementation of the new AUCL, these new distinctive signs will stand independently from general statutory language, possessing clearer and more direct protection grounds, which enhance the certainty and predictability in the judicial enforcement.
The revised AUCL adds Article 7(2), supplementing confusing acts to include using others’ trademarks as trade names and setting others’ distinctive signs as search keywords. It emphasizes the "confusing result" requirement, meaning that only acts causing confusion about the source of goods/services or a perceived connection with others are deemed confusing acts.
1. Using Others' Trademarks as Trade Names
Using others’ registered trademarks or unregistered well-known trademarks as trade names to mislead the public was already deemed unfair competition under Article 58 of China’s Trademark Law (2013). In 2022, the Supreme People’s Court Judicial Interpretation on Several Issues Concerning the Application of the Anti-Unfair Competition Law (hereinafter "Judicial Interpretation") explicitly included this behavior under “other confusing acts” listed in Article 6(4) of the AUCL. This amendment finally goes further by codifying the prohibition in the AUCL itself, thereby strengthening cohesion between the Trademark Law and AUCL in resolving conflicts between trademarks and trade names.
2. Setting Others' Distinctive Signs as Search Keywords
Setting another’s distinctive sign as a search keyword is generally divided into two types: visible use and invisible use. Visible use occurs when the third-party sign is embedded into product names, description texts, etc., thus enabling consumers to see the respective keyword directly in search results. Invisible use occurs when an operator sets another’s sign in the backend of search engines to trigger recommendations or advertisements when being searched, while the keyword itself is not displayed.
Before the amendment, consensus was generally reached in academia and practice that the visible use of keywords results in confusion. However, there was significant controversy about whether invisible use may constitute unfair competition. In judicial practice, some cases held that invisible keyword use caused no confusion. It neither harms the rights holder’s legitimate interests nor deprives consumers of choice, thus not constituting any unfair competition.[3] In contrast, in a landmark 2022 ruling, the Supreme People’s Court held that invisible keyword use damages the rights holder’s competitive interests, increases consumers’ search costs, hinders the fundamental functions of search engines, disrupts market competition order, and violates good faith and commercial ethics under the general provision of Article 2 of the AUCL.[4] Subsequently, other courts have adopted similar reasoning, recognizing invisible use as violating Article 2 and constituting unfair competition.[5]
The amendment now clarifies that only keyword use causing "confusing results" constitutes confusion, likely excluding most invisible use from Article 7. Nevertheless, whether such conduct can still be regulated under Article 2 remains debated in China’s academia. From a perspective of protecting rights holders’ distinctive signs, allowing Article 2 application in such cases is a positive sign for enforcement. Judicial decisions following the new AUCL will undoubtedly engage in further exploration of this issue.
Article 7(3) of the revised AUCL now explicitly states that "aiding others in implementing confusing acts" also constitutes unfair competition. The 2022 Judicial Interpretation (Article 15) defined aiding infringement as "intentionally providing warehousing, transportation, mailing, printing, concealment, business premises, or other conveniences." This amendment elevates aiding infringement to statutory law and uses a more general expression without exhaustive examples, allowing greater flexibility and latitude in application.
Previously, judicial practice primarily relied on Article 1169(1) of the Civil Code, which holds that “those who assist or aid others to commit infringement shall bear joint liability.” By explicitly incorporating aiding confusing acts into the AUCL, this amendment provides clearer and more concrete legal basis for regulating such behavior. This not only strengthens the legal regulation of aiding acts but also helps combat all participants in the counterfeiting chains, thereby further safeguarding the fair market order.
The revision of the confusion provision in the new AUCL is substantial. It fills the uncertain gray areas in the growing digital era, enhancing legal certainty. In this context, rights holders may consider incorporating the protection of new types of business identifications into their overall brand strategy and intellectual property portfolios, proactively strengthening the distinctiveness and influence of core distinctive signs, and timely securing evidence of the sign recognition to lay the groundwork for future enforcement. At the same time, strengthening compliance in online marketing and prudently selecting partners to avoid confusion risks and direct or joint legal liabilities are also important.
Our second part of this review will cover the AUCL’s new provisions on online unfair competition. Stay tuned.
[1] Kong Xiangjun, On the Competition Law Orientation of the Anti-Unfair Competition Law, 5 Legal Review 37 (2017).
[2] Mr.QM: 2024 New Media Ecosystem Review: Five Major Platforms Cover 1.071 Billion Users, Content Commercialization Enters Explosive Phase..., QuestMobile, available at: https://mp.weixin.qq.com/s/dH9q3xKYAgWuvrTdF60axw (last visited July 8, 2025).
[3] Shanghai Pudong New District People’s Court, (2020) Hu 0115 Min Chu No. 3814; The High People’s Court of Jiangsu Province, (2017) Su Min Shen No. 2676.
[4] Supreme People’s Court, (2022) Zuigao Fa Min Zai No. 131.
[5] Suzhou Industrial Park People’s Court, (2024) Su 0591 Min Chu No. 4799.
