Ten Model Cases Released by the Supreme People's Court on the Equal Protection of the Personal and Property Safety of Private Entrepreneurs (Mainland China)

2019.5.16
Jolene Chen

On May 16,
2019, the Supreme People's Court released ten model cases regarding the equal
protection of the personal and property safety of private entrepreneurs (the
"Cases").  The Cases primarily
cover the following three aspects:  

1. The Cases contain several
decisions acquitting the founders, chairmen, legal representatives and factory
managers of several private enterprises and reflect the spirit of law in the
people's courts through the use of facts as the basis and the law as the
determinant factor, as well as highlight the state's position to provide effective
judicial protection of private enterprises. 

The Cases selected this time
contain several cases where the defendants were acquitted or had their
convictions overturned.  For example, in
the case where Wenzhong Zhang was first found guilty of fraud, bribery of an
organization, and embezzlement of public funds but acquitted upon retrial
because the accused did not engage in fraud through fabrication of facts or
concealment of the truth to, nor was there subjective intent of illegal
possession, thus the elements for the offense of fraud are not satisfied.  In addition, it was determined that since the
payment of benefits or a requested sum was not for the purpose of pursuing illegitimate
benefits, nor was it a material offense, there is no basis to pursue criminal
liability for bribery.  In the original
decision, Zhang’s use of funds was for personal use, but the facts did not
clearly support that, so the evidence was insufficient.  The new decision to acquit the defendant
demonstrates the state's position to protect the property rights of private
enterprises and is particularly significant in creating a judicial environment
where private entrepreneurs can have the peace of mind in creating their
businesses. 

2. The Cases also include
decisions where multiple charges were dropped to specifically indicate that the
judiciary should adhere to the boundary between guilt and innocence and enhance
the personal and property protection of private entrepreneurs. 

For example, one of the Cases
selected this time involves the acquittal of a Shanghai company named Vivian Jewelry
Co. and Weiwei Wu over an illegal conversion of public funds charge.  The court held that the borrowing method did
not involve public promotions, and the people whom the loans were requested from
were relatively restricted in scope; in addition, real estate and jewelry were
provided as collateral to secure the loans. 
Therefore, the elements of the offense were not met, and the matter is
properly a civil dispute over loans.  The
reiteration of the elements of public fund conversion is meaningful in
preventing overreach of criminal justice in interfering with the operation of
private enterprises.  

3. There are also decisions
involving a breach of big data protection and a name trademark infringement
which provide guidance for courts in such field. 

In the case involving Taobao
Software Co., Ltd. suing Anhui Meijing Information Technology Co., Ltd. over a unfair
competition dispute, the court found that since Taobao's collection and use of
network user information could not possibly allow it to identify any natural
person independently or in combination with other information, and the
collection and use also fell within the scope declared under the Taobao Privacy
Policy, Taobao's collection and use of user and subscriber information were
justified.  Further, given that such data
is the result of a large amount of intellectual labor from the network operator
and systematically organized through in-depth development, the defendant's direct
use of the data product for commercial gains without a license or any new
creative labor is an act of unfair competition. 
Therefore, the court ruled that the defendant should desist from the
infringement and pay damages.  This is
the first case involving a new type of unfair competition with respect to the
protection of rights and interests associated with big data products, and this
court decision has positive significance for the creation of a fair and orderly
competitive environment for the development of the big data industry.

In addition, in the case
involving Ciqikou Chen Mahua Food Co., Ltd. and the Jiulongpo branch of Xihuoge
Food Culture Co., Ltd. over trademark infringement and unfair competition, the
court strictly set down the boundary between justified use of a natural
person's name and infringing use of a name trademark in commercial activities,
refined the adjudication rules for name trademark infringement, and effectively
curbed unfair competition through free-riding on the goodwill of others.  Therefore, this case is of exemplary
significance in protecting the rights of enterprises seeking to protect name
trademarks, guiding market entities to operate pursuant to law, and creating a
fair and orderly market competition environment.