On 10 October 2023, the Supreme People’s Court issued the “Guiding Opinions on Optimizing the Rule of Law Environment and Promoting the Development and Strengthening of the Private Economy”, clarifying issues associated with the principle that personality rights of private enterprises and entrepreneurs are safeguarded under the Chinese law.
On 16 October 2023, the Supreme People’s Court issued a series of typical cases on protecting the personality rights of private enterprises and entrepreneurs to promote further a rule of law environment conducive to developing the private economy.
The typical cases of protection of personality rights of private enterprises and private entrepreneurs involve fabrication and dissemination of false information by online self-media for hotspots to infringe on the reputation of private enterprises, infringement of personality dignity of private entrepreneurs by registering trademarks based on inappropriate purposes, smearing of enterprises or their products without any factual basis, infringement of enterprise reputation by posting insulting remarks in the WeChat and group chats, and business defamation by false complaints from competitors in the same industry. The following is a summary of these cases and their significance.
Case 1: Internet self-media rubbing hot spots, fabricating false information, infringing on the reputation of private enterprises, shall be liable for infringement by the law – the reputation right dispute case between a technology company v. a cultural company, a media company
Basic Facts
The “Forest” project is a green, low-carbon public welfare project initiated and promoted by Plaintiff, a technology company. On 6 May 2021, Defendant, a cultural company, published an article on its WeChat public number, claiming that Plaintiff used users across the country to accumulate carbon emission indicators, then sold the emission indicators to heavy polluters to help heavy polluters pollute the environment, Etc. After the article was released, it was read more than 70,000 times, and many readers left comments questioning and denying the “Forest” project. After that, the cultural company forwarded the article to its multiple self-media platforms, such as Today’s Headlines. On 8 May 2012, a media company also delivered the article to its WeChat public number and other self-media accounts.
The technology company issued a clarification of the case and sent a letter to a cultural company and a media company. However, the results were not satisfactory, so it filed this lawsuit because the two companies had violated the right to reputation and harmed the reputation of the “Forest” green public welfare project.
Court Decision
The trial court held that the content above of the article published by the cultural company was inconsistent with the facts and that the virtual trees planted by the public in the “Forest” APP would be handed over by the Plaintiff through donations to the partner, the China Greening Foundation and other public welfare organizations to be planted in practice, and that the Plaintiff did not enjoy any property rights over the green plants planted in the “Forest” program, and obtain carbon emission indicators, and had never traded carbon sinks in this way. The cultural company’s behavior of releasing false information has significantly reduced the value of the Plaintiff and “Forest” green public welfare project social evaluation, and the Plaintiff’s reputation right was also infringed. The two defendants’ media accounts have a long-term fixed mutual reproduction that has attracted the relationship and has common advertising and promotion. The two operators have each other’s capital and personnel cross situation. Therefore, it can be determined that the two defendants in the subjective for the infringement of article writing, reproduction, and diffusion of the ordinary meaning of the liaison, objectively carried out the infringement of the synergistic behavior, causing the widespread dissemination of false information in cyberspace, resulting in a lowering of the social evaluation of the Plaintiff, in line with the constitutive elements of joint infringement, the two defendants shall bear joint and several liabilities. Therefore, it was decided that the two defendants should stop the infringement, delete the article, apologize publicly, eliminate the influence, and compensate for the economic loss.
Typical Significance
In the digital age, people are accustomed to shallow and fast reading, the number of self-media has increased dramatically, and the influence of public opinion is significant. Part of the network media to gain attention, malicious consumption of hot events, and some even form a gray traffic marketing industry chain of “rubbing the heat - attracting traffic - rising fans - cash,” and through the construction of self-media matrix in different self-media platforms at the same time release false, inaccurate information, cause impact to the reputation of enterprises and entrepreneurs, and significantly damage the excellent image of enterprises built through a lot of investment and long-term operation. This case is a valuable exploration of the criteria for the determination of malicious infringement of the right to reputation of well-known enterprises by online self-media and the resolution of joint violation of mutual diversion between online self-media accounts, which is conducive to the punishment of defamation, slander and other infringements of private enterprises according to the law, and is conducive to the encouragement and support of private enterprises to fulfill their social responsibility, actively participate in social green public welfare undertakings, and make contributions to the development of economy and society.
Case 2: Registration of a Trademark Containing Another’s Name for an Improper Purpose Constitutes an Infringement of Another’s Right to a Name and Human Dignity- Personality Right Dispute Case between Xie Mou v. Chen Mou
Basic Facts
Plaintiff Xie Mou is the chairman of a listed company, and his name and company have a high reputation. Defendant Chen Mou and Plaintiff Xie Mou are from the same hometown, the two had economic disputes in the early years. From 2014 to 2022, Chen Mou successively applied for the registration of several Xie’s name and the name of the company under the name of the same word, different terms, or harmonic trademarks, as well as Xie’s name and his company name or address associated with the trademarks, registered trademarks involved in the goods contain urns, caskets, life clothes and other funeral supplies, part of the trademarks have been registered and used in the urns and other goods. After Xie filed a cancellation application for the above trademarks, Chen still filed applications for similar registered trademarks in Xie’s name. In 2022, Chen registered a funeral goods business department with the same name as Xie, with a business scope of sale of funeral goods and funeral services.
Xie considered that Chen used his name and company name in an insulting manner without his permission, which violated social morality and public order and seriously damaged the image of himself and his company, lowered his social evaluation, and caused tremendous mental pressure on himself and his relatives, so he sued Chen not to use the relevant trademarks and demanded that Chen apologize for the damage, compensate for the loss, and pay compensation for the mental impairment.
Court Decision
The trial court held that Chen Mou applied Xie Mou’s name and company name for registration as trademarks and use in funeral supplies based on improper purpose. His subjective malice is apparent. Chen’s behavior is obviously beyond reasonable scope, contrary to social order and morality, has violated Xie’s right to name and human dignity, and should bear the corresponding civil liability. Therefore, Chen should stop using the trademark, apologize, and compensate for moral damages.
Typical Significance
With the diversification of social development, related authorities should timely stop the infringement of personality rights in a diversified and covert manner manifested in the form of conformity with the provisions of the law, but the substance of the violation of honesty and trustworthiness, fairness, and justice, public order, and morality. In this case, Defendant and Plaintiff had economic disputes in the early years, and Defendant’s behavior and subjective malice are apparent. The court ordered Chen to stop using the registered trademark and apologized and compensated for the moral damage, punished the infringement in accordance with the law, safeguarded the entrepreneur’s personality rights and interests, and was conducive to guiding the creation of a rule of law environment for the protection of the legitimate rights and interests of entrepreneurs.
Case 3: Punishing online infringement and safeguarding the right to reputation of private enterprises -- network infringement liability dispute case between a communication equipment company v. Yan Mou
Basic Facts
In 2019, Defendant Yan published an article on Sina Weibo, which contained the content that the products of Plaintiff, a communication equipment company, were seriously shoddy, Plaintiff purchased the inspection and qualification report at a high price, and illegal bidding. Many people viewed the article reproduced. The Plaintiff claimed Yan Mou’s spreading false information damaged its business reputation and affected its production and operation. So he filed a lawsuit.
Court Decision
The trial court held that the legal representative’s right to reputation is protected by law. Plaintiff’s product sampling results prove that the product meets the relevant product standards, the quality is qualified, and there are no quality problems as claimed by Defendant. Therefore, Defendant, in the absence of evidence to prove that Plaintiff’s product quality is unqualified, the release of emotionally charged information to denigrate Plaintiff’s reputation, damage to the public’s trust in Plaintiff, reduce the social evaluation of Plaintiff’s products, infringed the Plaintiff’s right to the reputation, should bear legal responsibility. It was decided that Yan Mou delete the information published and publicly apologize.
Typical Significance
Enterprise reputation is an essential foundation for the survival and development of enterprises, and protecting enterprise reputation rights by following the law is the proper meaning of building a business environment based on the rule of law. The defamation of an enterprise’s reputation through the internet has the characteristics of a broad audience, fast dissemination speed, convenient expression, Etc. This has dramatically damaged the enterprise’s image and market evaluation established by the enterprise through long-term efforts and has a bad influence. By ordering the infringer to bear the responsibility of infringement, this case safeguarded the enterprise’s right to reputation, reflecting the people’s court to optimize the business environment and protecting the private enterprises to carry out average production and business activities of the judicial guidance.
Case 4: Publishing derogatory and insulting remarks in WeChat and group chats constitutes infringement of the enterprise’s right to reputation -- Dispute over reputation rights between a Cultural Creative Company v. Wang Mou
Basic Facts Plaintiff is a cultural creative company operating an “east home” offline franchise, engaged in building materials one-stop decoration service business. Defendant Wang Mou was originally the Plaintiff’s employee. He had a labor compensation dispute with the Plaintiff. Since April 2022, Wang Mou, in Weibo, WeChat, and group chat, repeatedly published content about the Plaintiff’s “east home” franchise as a fraudulent company and other derogatory, insulting information. The Plaintiff believes that Wang Mou violated his right to reputation, so he filed the lawsuit.
Court Decision
The trial court held that Defendant Wang Mou published derogatory, insulting speech information. The improper speech information to the Plaintiff in his Weibo, WeChat, and group chat for a specific range of the public resulted in some of the public’s negative understanding of the Plaintiff’s authorized brand stores, resulting in a lower social evaluation, violating the Plaintiff’s right to reputation, according to the law, Wang Mou should bear the responsibility of infringement, and Wang Mou should apologize to the Plaintiff in his WeChat.
Typical Significance
WeChat and group chats spread information quickly and widely. In this case, Defendant repeatedly published insulting statements against the plaintiff company in his WeChat and group chats, reducing the social evaluation of the plaintiff company’s franchise business, which seriously impacted the enterprise’s reputation. The decision, in this case, regulates and punishes the use of public opinion to infringe on the right to corporate reputation and has reference value for the trial of cases in which network users violate the right to corporate reputation by publishing information through WeChat and group chats, Etc., and guides network users to use social software such as WeChat by the law.
Case 5: Regulation of short video bandwagon behavior to protect the goodwill of private enterprises -- Commercial defamation dispute case between a foodstuffs co., Ltd. v. a cultural technology Co., Ltd.
Basic Facts
Defendant, a cultural technology company, produced and released a short video, “Three strokes to select quality Leba,” on its account on a short video platform. In the video, Defendant reviewed and compared its Leba with several Leba products manufactured by Plaintiff. In the Comparison, the Anchor, when describing the Plaintiff’s product, uses language such as “the product is not made by pure dark wheat,” “the color of the product is dyed,” and “the product is only made with regular butter.” Instead, Defendant used language such as “only rye flour” and “use the best butter” to describe its products. The Defendant’s self-owned account on a short video platform has many fans and a certain degree of influence. Plaintiff believed that Defendant had damaged its commercial reputation and goodwill, so it sued the court, requesting that Defendant delete the video in question, issue a public apology, and compensate for the economic losses and reasonable costs.
Court Decision
The trial court held that the Defendant relied on short video platform, using big data algorithms, through the dissemination of short videos to promote its operation of Leba products, with the horizontal evaluation of similar goods, highlighting its competitive advantages of goods, and influencing consumers to evaluate and purchase decisions, which is the behavior of publishing comparative advertisements against competitors. In producing and releasing the video in question, the Defendant failed to exercise due care and attention, disregarded the relevant national and industry standards, and adopted a one-sided, direct comparison approach focusing on highlighting its strengths and spreading the weaknesses of its competitors, which led to misunderstanding of the actual quality of its competitors’ products among the relevant public, and jeopardized its business credibility and reputation, which constituted commercial defamation. It was ruled that Defendant deleted the short video, issued a public apology statement, and compensated for the economic loss.
Typical Significance
For private enterprises, a good reputation is the most significant flow. In recent years, the short video APP has emerged, the platform has a low barrier to entry, fast dissemination of information, and public opinion influence, and has become a “new position” for enterprises to expand their visibility and improve their competitiveness. However, some business entities have violated the principles of business ethics and honesty and credit by releasing inaccurate or misleading short videos and marketing in the name of evaluation, which not only misleads consumers and destroys the market order of fair competition on the internet, but also seriously damages the goodwill of other private enterprises. The trial of this case has clarified the nature of the evaluation video released by the business entity and made a negative evaluation of the unfair competition behavior of damaging the image and reputation of private enterprises with inaccurate short videos, which is of great significance in clarifying the cyberspace with clear sky and good ecology and creating a fair competition and healthy and orderly business environment for the private economy.
Case 6: False complaint by a competitor in the same industry causing losses to the other party constitutes commercial defamation – a business defamation dispute case between a network company and a biological company
Basic Facts
The Defendant, a biological company, is a hand-torn air-dried beef producer. Defendant was dissatisfied with the price of the same brand of hand-torn air-dried beef sold in Plaintiff’s online shop, which was 3 RMB lower than its official flagship shop, and repeatedly requested Plaintiff to adjust the price. However, the Plaintiff refused to do so. As a result, on 29 December 2020, Defendant filed a complaint of intellectual property infringement with the e-commerce platform where Plaintiff’s online shop was located because “the right holder has never produced or authorized others to produce the style or model of the products worldwide,” which led to the e-commerce platform removing the products from the Plaintiff’s online shop and giving the shop a penalty of a deduction of 2 points. The Plaintiff later sued the court because the Defendant’s actions constituted commercial defamation, requesting that the Defendant be ordered to compensate for its economic losses and apologies.
Court Decision
The trial court held that, although Defendant is the hand-torn air-dried beef producer, it and Plaintiff are on the same e-commerce platform to open stores to sell the hand-torn air-dried beef. The two have a direct competitive relationship. The defendant knows that Plaintiff’s network store sells relevant products for genuine products. The launch of intellectual property infringement complaints will cause a severe impact on the business, enhance the price competition advantage of their network store, maliciously fabricate facts, and file malicious complaints based on the identity of the trademark right holder, contrary to the socialist core values of “honesty and friendliness” and other principles, and has led to the Plaintiff’s store being forced to take down the relevant products, and being penalized by the e-commerce platform with demerit points, which has already constituted commercial defamation. It was decided that the Defendant should stop the infringement, apologize, eliminate the influence, and compensate for the economic loss.
Typical Significance
Although it is the right of the holder to report counterfeit and substandard goods, and reporting is conducive to maintaining a proper order of business competition, complaints should be based on basic facts, be made appropriately, and comply with generally accepted business ethics. Compared with other operators, it bears a higher duty of care in reporting complaints as a producer of goods. In this case, the Defendant made use of the identity of the right holder and the complaint rules of the e-commerce platform to make false complaints to harm the rights and interests of competitors in the same industry, disguised as obtaining a competitive advantage in price, which constituted commercial defamation of the Plaintiff. The judgment of this case has demonstrative significance and reference value for handling similar cases and is conducive to safeguarding the socialist core values of honesty and friendliness. The private economy is vital for advancing China’s modernization, an essential foundation for high-quality development, and a significant force in promoting China’s comprehensive building of a strong socialist modernization country and achieving the second hundred-year goal. As a next step, the People’s Court will further play the role of trial function, identify the combination point and focus of judicial protection for the development and growth of the private economy, and serve the overall situation and justice for the people in continuously optimizing the rule of law environment for the development of the private economy.