Recently, Unitalen Law Office represented a large state-owned enterprise group in China and its subsidiary branches, successfully handling a dispute involving unfair competition involving novel e-commerce business models, such as live-streaming sales and advertising-driven traffic generation.

Case Background

Against the backdrop of actively responding to the policy to benefit and assist farmers, our client launched live-streaming sales campaigns on TikTok to promote local specialty products, such as "white birch sap," under several brands from Northeast China. During the live-streaming period, the plaintiff sued a large state-owned enterprise group in China and its subsidiary branches, alleging that the defendants engaged in unfair competition by "broadcasting A to sell B" through "illegal traffic-driving live streaming". Additionally, the plaintiff claimed that the defendants infringed its trademark and design patent rights during the live stream, thereby constituting unfair competition, and sought compensation exceeding 10 million yuan.

Case Focus and Challenges

This case focuses on the legal characterization of whether the common sales means, such as live-streaming sales under the TikTok model, which constitute an act of unfair competition, and also covers multidimensional legal issues such as trademark infringement determination and delimitation of design patent infringement.

After accepting the commission, Unitalen's legal team promptly launched an in-depth investigation and thoroughly reviewed the facts of the case and the platform's rules. Through investigating TikTok’s live-streaming model and its "Selective Alliance" service agreement, the legitimacy of video traffic-driving activities, the defense of trademark exhaustion, and whether the sued act has specific distinctiveness, the team obtained, by means of defense, key evidence demonstrating the absence of the "broadcasting A to sell B", such as authorizations under platform rules and live-streaming sales data. Based on these comprehensive defenses, Unitalen's attorney team argued that the sued act did not constitute unfair competition, trademark infringement, or design patent infringement.

Court Judgment Result

After two court sessions, the court fully adopted our argument, determining that the plaintiff's allegation of the unfair practice of "broadcasting A to sell B" through live-streaming traffic generation was not established. Our client's live-streaming traffic-driving activities were legally authorized, and the live stream complied with the TikTok e-commerce platform's policies and guidelines. Accordingly, the court rejected all the plaintiff's claims in accordance with the law, including those regarding trademark infringement, patent infringement, and unfair competition.

Case Value and Enlightenment

This case represents a typical composite intellectual property dispute involving the novel business models of live-streaming e-commerce and advertising-driven traffic generation. The victory in this case not only spared the client from significant economic losses but also set a practical and referenceable precedent for handling similar composite disputes involving "unfair competition + trademark + patent" issues.