NPC Reviews Second Draft of the Anti Unfair Competition Law

On September 5, the National People's Congress (NPC) issued the second revised version of the Anti-Unfair Competition Law (AUCL) open for public comment until September 25, 2017. The last revised draft was circulated for public comment in February of this year. 
The new draft contains the following major changes

  • Trade secrets: The previous two articles in the first draft version covering trade secrets has been consolidated into one article, Article 9, that covers three types of behavior that constitute trade secret infringement. It appears that previous language on ensuring that government employees, lawyers, and certified public accounts keep trade secrets confidential when performing their duties has been deleted. The punishment for infringing upon trade secrets has also been trimmed (Article 21).
  • Investigation: New approvals have been added on performing investigations on operators. Specifically, written approval reports from the supervision and inspection authority are required for any of the investigative actions listed in Article 13, and a written approval report is required from the supervision and inspection authority at the city level or higher in order to seal and detain property, and review bank accounts (items #4 and #5). 
  • Liability: The formula for compensation amounts are newly spelled out in Article 17. Specifically, the amount of compensation is to be determined on "actual loss suffered due to infringement." If this is difficult to ascertain, the amount of compensation is the amount infringer has gained from infringement, including expenses to stop the infringement behavior. Victims may also be awarded compensation up to 3 million yuan for violations of Article 6 and 9. Article 25 newly states that if a violation is "minor," and "corrected in a timely manner," the operator is exempt from administrative penalty. 
  • Article 11 on tying was deleted.