China’s Enhanced IP Protection Under Revised Anti-Unfair Competition Law: Strengthening Rights Enforcement in the Digital Economy

Introduction: Elevating IP Protection to Unfair Competition Status

The October 15, 2025 implementation of China’s revised Anti-Unfair Competition Law
(AUCL) brings transformative enhancements to intellectual property protection that extend far beyond traditional IP enforcement mechanisms. By explicitly codifying IP-related unfair competition prohibitions, strengthening platform accountability for IP violations, and establishing comprehensive digital economy protection frameworks, the revised AUCL creates a powerful complementary enforcement regime that IP rights holders can leverage alongside patent, trademark, and copyright laws. For international law firms advising clients on IP strategy and enforcement in China, these developments demand immediate attention and strategic recalibration of protection and enforcement approaches.


The revised AUCL’s IP protection provisions reflect recognition that traditional IP laws,
while essential, may not adequately address all forms of IP-related misconduct in
modern business environments, particularly in digital contexts. Conduct that falls
outside the precise definitions of patent infringement, trademark violation, or
copyright breach may nevertheless constitute unfair competition if it misappropriates
others’ innovative efforts, creates market confusion, or undermines fair competitive
conditions. The AUCL’s broader unfair competition framework captures such conduct,
providing IP rights holders with additional legal tools and enforcement pathways that
can be more effective than traditional IP litigation in certain circumstances.
The digital economy provisions in the revised AUCL are particularly significant for IP protection, as they address challenges that have emerged with the proliferation of e-commerce platforms, digital content distribution, and online business models.

Platform operators face enhanced obligations to prevent and address IP violations
occurring on their platforms, with potential liability for failures to act against known
infringements. Digital content creators gain strengthened protection against
unauthorized use of their works, even when such use might not clearly constitute
copyright infringement under traditional doctrines. Technology companies benefit
from clearer rules protecting against misappropriation of technical information and
innovative business methods, reducing uncertainties that have complicated IP
enforcement in digital contexts.

Strengthened Prohibitions Against IP-Related Unfair Competition

The revised AUCL significantly strengthens prohibitions against various forms of IP-
related unfair competition, providing IP rights holders with enhanced legal foundations for enforcement actions. These strengthened prohibitions address conduct that has proliferated in digital business environments and that traditional IP laws may inadequately address.

The prohibition against unauthorized use of trade secrets and confidential business
information has been substantially enhanced with more detailed definitions of protected information and clearer standards for what constitutes misappropriation. The revised AUCL explicitly prohibits obtaining others’ trade secrets through theft, bribery, fraud, electronic intrusion, or other improper means. It also prohibits disclosing, using, or allowing others to use trade secrets obtained through improper means or in breach of confidentiality obligations. These provisions provide comprehensive protection for technical information, business strategies, customer data, and other confidential information that may not qualify for patent or copyright protection but that represents significant competitive advantages.

The prohibition against commercial confusion has been expanded to address digital
economy contexts where traditional trademark infringement standards may not
capture all forms of confusion-creating conduct. The revised AUCL prohibits using
names, packaging, decoration, or other identifiers similar to those of well-known
products in ways that create confusion with others’ goods or services. It explicitly
addresses domain name registration and use that creates confusion with others’
trademarks or business identifiers, closing gaps that have enabled cybersquatting and
domain name abuse. It also prohibits using others’ enterprise names, social media
handles, or other business identifiers in ways that mislead consumers about business
relationships or product sources.

The prohibition against false or misleading commercial publicity has been
strengthened with specific provisions addressing digital advertising and online
marketing practices. The revised AUCL prohibits making false or misleading
statements about products’ performance, functions, quality, or other characteristics. It
explicitly addresses comparative advertising, establishing standards for when
comparisons with competitors’ products are permissible and when they constitute
unfair competition. It also prohibits using technical means to manipulate search
results, recommendation algorithms, or other digital mechanisms to create false
impressions about products’ popularity, quality, or market position.

Perhaps most significantly for IP rights holders, the revised AUCL includes explicit
prohibitions against “free-riding” on others’ innovative efforts and commercial
achievements. This provision addresses conduct where businesses appropriate others’
innovations, creative works, or commercial investments without authorization, even
when such conduct might not clearly violate specific IP rights. The free-riding
prohibition provides a flexible legal tool for addressing novel forms of IP
misappropriation that emerge as business models and technologies evolve, ensuring
that the law can respond to unfair competitive practices even when they fall outside
traditional IP categories.

Platform Accountability and Intermediary Liability

The revised AUCL establishes comprehensive platform accountability frameworks that
significantly enhance IP protection in digital environments. These frameworks address
the reality that much IP infringement in the digital economy occurs on platforms
operated by intermediaries, and effective IP protection requires not only pursuing
direct infringers but also ensuring that platforms take appropriate measures to
prevent and address violations.

The platform operator obligations established by the revised AUCL create affirmative
duties for platforms to implement IP protection measures and to respond to IP
violations occurring on their services. Platforms must establish and publish rules
prohibiting IP infringement and unfair competition, providing clear notice to users
about prohibited conduct. They must implement systems for monitoring platform
activities and detecting potential IP violations, with the sophistication of monitoring
systems scaled to the platform’s size, resources, and the nature of activities it
facilitates. They must provide mechanisms for IP rights holders to report violations
and must respond promptly to such reports through investigation and appropriate
action.

The “notice and takedown” framework, already familiar from copyright contexts, has
been extended and strengthened for broader IP and unfair competition matters. When
platforms receive notices of IP violations or unfair competition from rights holders,
they must promptly investigate and take necessary measures including removing
infringing content, suspending or terminating infringing users’ accounts, and
preserving evidence for potential enforcement actions. Failure to respond
appropriately to valid notices can result in platform liability for damages resulting
from continued infringement, creating strong incentives for platforms to act decisively
when violations are reported.

The revised AUCL also addresses platforms’ liability for violations they know about or
should know about, even without formal notices from rights holders. Platforms that
have actual knowledge of IP infringement or unfair competition occurring on their
services must take initiative to address violations, regardless of whether rights holders
have submitted formal complaints. Platforms that have constructive knowledge—
meaning they should have known about violations based on obvious circumstances or
patterns—face similar obligations. This “red flag” knowledge standard prevents platforms from deliberately avoiding awareness of violations to escape liability and
requires them to exercise reasonable vigilance over platform activities.

For rights holders, these platform accountability provisions create powerful
enforcement tools that can be more effective than pursuing individual infringers. By
targeting platforms that facilitate or host infringing activities, rights holders can
achieve broader impact, potentially stopping multiple infringers through single
enforcement actions against platforms. By leveraging platforms’ notice and takedown
obligations, rights holders can achieve rapid removal of infringing content without
lengthy litigation. By holding platforms accountable for failures to prevent known
violations, rights holders can incentivize platforms to implement robust IP protection
measures that prevent infringement before it occurs.
However, the platform accountability framework also creates compliance obligations for platform operators and strategic considerations for businesses operating platform-
based models. Platforms must invest in IP protection systems, including content monitoring technologies, user verification mechanisms, and complaint handling
processes. They must develop policies and procedures for responding to IP
complaints, balancing rights holders’ interests against users’ rights and platform
business objectives. They must train personnel to recognize IP violations and to
implement appropriate responses. These obligations create costs and operational
complexities that platforms must manage while maintaining service quality and user
satisfaction.

Digital Content and Technology Protection

The revised AUCL provides enhanced protection for digital content and technology,
addressing challenges that have emerged as creative works and innovative
technologies increasingly exist in digital forms and are distributed through online
channels. These protections complement traditional copyright and patent laws while
addressing gaps that have complicated IP enforcement in digital contexts.
For digital content creators, the revised AUCL prohibits various forms of unauthorized
use and misappropriation that may not clearly constitute copyright infringement
under traditional doctrines. The law prohibits using technical means to circumvent
digital rights management systems or access controls protecting digital content, even
when such circumvention does not result in reproduction or distribution that would
constitute copyright infringement. It prohibits “deep linking” to copyrighted content in ways that bypass rights holders’ access controls or advertising, addressing practices where websites link directly to content files rather than to rights holders’ authorized pages. It prohibits “framing” others’ content within different websites in ways that create confusion about content sources or that appropriate others’ creative efforts.

The revised AUCL also addresses data scraping and aggregation practices that have
proliferated in digital environments. While some data collection may be permissible
for legitimate purposes, the law prohibits using automated means to collect others’
data, content, or information in ways that constitute unfair competition. This includes
scraping product information, user reviews, pricing data, or other content from
competitors’ websites or platforms for use in competing services. It includes
aggregating others’ content or data in ways that substitute for original sources and
undermine rights holders’ business models. The provisions require balancing
legitimate data collection for purposes including research, journalism, and
competitive analysis against unfair appropriation of others’ investments and efforts.
For technology companies, the revised AUCL provides strengthened protection against
misappropriation of technical innovations and business methods.

The law prohibits reverse engineering others’ technologies through improper means or in violation of
contractual restrictions, addressing practices where competitors seek to appropriate
technical innovations without authorization. It prohibits using others’ algorithms,
software architectures, or technical solutions in ways that constitute unfair
competition, even when such use might not infringe patents or copyrights. It prohibits
appropriating others’ innovative business methods or operational processes in ways
that undermine fair competition, recognizing that business innovation deserves
protection even when it does not qualify for formal IP rights.

The digital content and technology protections in the revised AUCL create significant
enforcement opportunities for rights holders while also establishing boundaries for
permissible competitive conduct. Rights holders can pursue unfair competition claims
against conduct that appropriates their digital investments and innovations, even
when traditional IP infringement claims might be uncertain or unavailable. They can
leverage the AUCL’s broader standards and more flexible remedies to address
emerging forms of digital misappropriation that evolve as technologies and business
models develop. However, they must also recognize that the AUCL’s protections have
limits, and that some forms of competitive conduct—including legitimate reverse
engineering, fair use of content, and competitive data collection—remain permissible
even if they disadvantage rights holders.

Enforcement Mechanisms and Strategic Considerations

The revised AUCL provides IP rights holders with enhanced enforcement mechanisms
that create strategic opportunities for more effective IP protection. Understanding
these mechanisms and their strategic applications is essential for rights holders
seeking to optimize enforcement approaches and for businesses seeking to avoid
unfair competition liability.

The administrative enforcement pathway through market regulation authorities has
been strengthened with expanded investigative powers and enhanced penalties. Market regulation bureaus can investigate suspected unfair competition, including IP- related violations, with authority to inspect business premises, review records and electronic data, interview personnel, and require companies to provide information.

They can issue administrative penalties including fines, confiscation of infringing
goods and illegal gains, and orders to cease unfair competition conduct. For serious or
repeated violations, they can revoke business licenses or impose other sanctions that
significantly impact business operations. The administrative enforcement pathway offers several advantages for IP rights holders compared to civil litigation. Administrative proceedings are typically faster than court litigation, enabling more rapid resolution of IP violations. Administrative
authorities possess investigative powers that private litigants lack, potentially
uncovering evidence that would be difficult to obtain through civil discovery.
Administrative penalties can include remedies beyond those available in civil cases,
including business license revocation and public disclosure of violations that create
reputational consequences. For these reasons, IP rights holders should consider
administrative enforcement as a primary or complementary strategy to civil litigation.
The civil litigation pathway provides IP rights holders with opportunities to obtain
damages, injunctions, and other remedies through court proceedings. The revised
AUCL establishes clear standards for unfair competition liability and provides courts
with authority to award compensatory damages, disgorgement of infringers’ profits,
and statutory damages when actual damages are difficult to calculate. Courts can also
issue preliminary and permanent injunctions preventing continued unfair
competition, providing crucial relief for ongoing violations. The litigation pathway is
particularly valuable when rights holders seek substantial monetary recovery or when
complex legal or factual issues require judicial resolution.

The criminal enforcement pathway, while reserved for serious cases, provides
powerful deterrence against egregious IP violations and unfair competition. Conduct
involving trade secret theft, large-scale counterfeiting, or other serious violations may
constitute crimes subject to criminal prosecution. Criminal penalties can include
imprisonment, substantial fines, and confiscation of assets, creating severe
consequences that deter potential violators. While IP rights holders cannot directly
initiate criminal prosecutions, they can report violations to public security authorities
and can participate in criminal proceedings as victims, potentially influencing
prosecutorial decisions and outcomes.

For IP rights holders developing enforcement strategies, the revised AUCL’s multiple
enforcement pathways create opportunities for coordinated approaches leveraging
different mechanisms’ respective advantages. Rights holders might pursue
administrative enforcement for rapid cessation of ongoing violations while
simultaneously preparing civil litigation for damages recovery. They might report
serious violations for criminal investigation while using administrative or civil
proceedings to address less severe conduct. They might use the threat of enforcement
through multiple pathways as leverage in settlement negotiations, encouraging
infringers to cease violations and provide compensation without protracted
proceedings.

However, enforcement strategy development must also consider practical constraints
and strategic risks. Administrative enforcement outcomes may be less predictable
than civil litigation, as market regulation authorities exercise discretion in case
selection and penalty determination. Civil litigation can be time-consuming and
expensive, potentially exceeding the value of recoverable damages for smaller
violations. Criminal enforcement faces high evidentiary standards and prosecutorial
discretion that may limit its availability. Rights holders must carefully evaluate which
enforcement pathways are most appropriate for specific violations, considering factors
including violation severity, evidence availability, desired remedies, cost-benefit
analysis, and broader business relationships.

Conclusion: Leveraging the AUCL for Comprehensive IP Protection

The revised Anti-Unfair Competition Law’s enhanced IP protection provisions create a
powerful complementary framework that IP rights holders can leverage alongside traditional IP laws for more comprehensive and effective protection. By addressing IP-
related unfair competition, strengthening platform accountability, and providing robust digital content and technology protection, the revised AUCL fills gaps in traditional IP enforcement and provides tools particularly suited to digital economy challenges. For international law firms and their clients, understanding and effectively leveraging these provisions can significantly enhance IP protection outcomes and business competitiveness in China’s market.

The immediate priority for IP rights holders involves assessing how the revised AUCL’s
provisions apply to their specific IP assets and business contexts. Rights holders
should evaluate whether conduct by competitors or platforms that has been difficult
to address through traditional IP enforcement might constitute unfair competition
under the AUCL. They should consider how platform accountability provisions can be
leveraged to address infringement occurring on digital platforms. They should
evaluate whether the AUCL’s digital content and technology protections provide
enforcement opportunities for innovations and creative works that may not be
adequately protected by patents, copyrights, or trademarks alone.

Beyond immediate enforcement applications, the revised AUCL signals China’s
commitment to strengthening IP protection and to adapting legal frameworks to
address digital economy challenges. This commitment reflects recognition that robust
IP protection is essential for innovation, creativity, and economic development, and
that legal frameworks must evolve as technologies and business models develop. IP
rights holders who engage proactively with the revised AUCL—through strategic
enforcement, participation in policy development, and adaptation of IP strategies to
leverage new protections—can gain significant advantages in protecting their
innovations and creative works.

For international law firms, the revised AUCL creates substantial advisory
opportunities spanning IP strategy development, enforcement planning, platform
compliance counseling, and dispute resolution. Firms must develop expertise in the
AUCL’s IP protection provisions, understand their interaction with traditional IP laws,
and provide integrated advice that leverages all available legal tools for optimal IP
protection. The firms that build these capabilities will be well-positioned to serve
clients seeking to protect and enforce IP rights in China’s dynamic and increasingly
sophisticated legal environment.

The message is clear: IP protection in China has entered a new era where the Anti-
Unfair Competition Law provides powerful complementary tools alongside traditional IP enforcement mechanisms. The revised AUCL’s provisions address digital economy
challenges, strengthen platform accountability, and provide flexible frameworks for
protecting innovations and creative works against emerging forms of misappropriation. IP rights holders and their legal advisors must embrace this enhanced framework, developing strategies that leverage the AUCL’s provisions for comprehensive IP protection while navigating the complexities of coordinated enforcement across multiple legal pathways. Those who succeed will be positioned to protect their IP assets effectively and to compete successfully in China’s innovation- driven economy.

References

[1] Hogan Lovells. (2025, October 15). China’s revised AUCL takes effect: Advancing IP
protection and fair competition in the digital economy.https://www.hoganlovells.com/en/publications/chinas-revised-aucl-takes-effect-advancing-ip-protection-and-fair-competition-in-the-digital-economy

[2] Harris Sliwoski LLP. (2025, October 6). China’s 2025 Competition Law Creates Executive Liability and Extraterritorial Reach. China Law Blog. https://harris-sliwoski.com/chinalawblog/chinas-2025-competition-law-creates-executive-liability-and-extraterritorial-reach/

[3] China IP Law Update. (2025, October). Enhanced IP Protection Under the Revised
Anti-Unfair Competition Law. Beijing: China IP Publishing House.