Edited by Rohan Kariyawasam
Chapter 5: Unfair Competition/Trade Secrets (1)
5. Unfair competition/trade secrets (1) Hu Kaizhong1 The market economy as a competitive economy suggests that competition should be based on impartiality and honesty. However, some business operators of corporate concerns often infringe fair competition principles and try to use various kinds of unfair methods to damage others’ legal rights and interests. Therefore, many countries around the world have brought into effect Anti-Unfair Competition Laws to deal with such methods. In recent years, a series of acts of unfair competition have emerged in the field of intellectual property in China, which has caused damage to consumers’ welfare and business operators, and other undertakings competing in the same markets. As a consequence, China has felt an urgent need to amend current laws to protect the normal order of competition. 5.1. ACTS OF UNFAIR COMPETITION The market economy is based on competition built on the relationship between commodity supply and demand, which in essence is an economy with free competition. The role of free competition can only be fully played in a ‘perfect competition’ market.2 However, not all competition in daily life is the result of perfect competition. In practice, the realistic Professor of Law, Zhongnan University of Economics and Law. So-called perfect competition exists only in markets where (1) there are many small firms and consumers, and all the sellers are decision-makers on price; (2) all firms aim to maximize profits while all customers aim to maximize effectiveness; (3) all firms produce homogeneous goods; (4) there are no entry/exit barriers; (5)...
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