CHINA: Supreme Court Sets Obligations for Advertisers and Broadcasters

A recent landmark decision by the China Supreme Court (Zui Gao Fa Min Shen, case no. 3098 (2023)), has shed light on the shared responsibilities between advertisers and television broadcasters in addressing the prevalence of trademark infringement and false advertising in China.

The case involved a trademark infringement and unfair competition dispute between Zhou Liu Fu Jewelry Co., Ltd. (the original plaintiff), Hong Kong Zhou Liu Fu Gold and Diamond Jewelry Group Co., Ltd. (the original defendant), and Sichuan Radio and Television Station (Sichuan TV Station, the original co-defendant). The crux of the matter centered on a TV shopping advertisement broadcast by the Sichuan TV Station, which was accused of infringing registered trademarks and making false advertising claims.

The Supreme Court’s ruling emphasized the importance of identifying the true advertiser. If the advertiser fails to provide evidence that it did not publish the advertisement, it shall be held responsible as the beneficiary of the advertisement. In this case, the defendant was unable to prove that two other companies were the actual advertisers and was thus considered the liable party.

Regarding the television broadcaster’s obligations, the Court clarified that the Sichuan TV Station must fulfill its due diligence, including reviewing the advertiser’s qualifications and identity documents. The Sichuan TV Station had conducted such a review and promptly ceased broadcasting upon receiving a cease-and-desist letter, thereby fulfilling its obligations and avoiding compensatory liability.

This landmark decision carries significant implications for the advertising industry in China. It underscores the need for all stakeholders, from advertisers to broadcasters, to remain vigilant and proactive in safeguarding intellectual property rights. Advertisers must ensure the legitimacy of their campaigns, while broadcasters must exercise due diligence in vetting their clients and advertising content.

Although every effort has been made to verify the accuracy of this article, readers are urged to check independently on matters of specific concern or interest. Law & Practice updates are published without comment from INTA except where it has taken an official position.

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