A functionalist approach to a principled application of the General Clause of China’s Anti-Unfair Competition Law in intellectual property cases
Wenjie DingFudan University Law School

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Li ChenFudan University Law School

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An overlap exists between China’s IP laws and its Anti-Unfair Competition Law in that the General Clause of the latter can and is expected to be used to protect IP rights (‘IPRs’) that are not specifically enumerated in existing IP laws. However, in applying the General Clause, current court practice fails to properly adhere to the separation of powers doctrine between the legislature and judiciary and adopts an excessively interventionist approach in creating ‘judge-made’ law. To address this, a functionalist analysis proposes, in consideration of both the extrinsic and intrinsic constraints of IP rights, that courts should generally avoid invoking the General Clause save in exceptional situations. On the one hand, the extrinsic constraints of IPRs dictate that the courts should, in principle, avoid applying the General Clause in so far as possible. Yet on the other hand, the intrinsic constraints permit exceptions in cases where the creators of the intellectual property do put adequate work into warranting legal recognition and protection, and where allowing free-riding will result in grossly inadequate incentives and underinvestment in product innovation and development, jeopardizing the evolution of legitimate business models and social welfare overall.

Contributor Notes

The authors wish to thank the following: Ge Jiangqiu, Lee Kay Han, Li Ruoqing, Shi Hongpeng, Yuan Guohe. If you have any questions, please contact the corresponding author, lichen@wustl.edu. Funding sources: Shanghai Pujiang Talent Program, ‘Innovation and Competition: Identification of Unfair Competition Behaviour in the Internet Age’ (18PJC005), the Program for Professors of Special Appointment (Eastern Scholar) at Shanghai Institutions of Higher Learning.

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