Companies should attach importance to IP compliance

Not long ago, a used car website was fined RMB12.5 million (US$1.8 million) by the law enforcement department of the Administration for Industry and Commerce (AIC) for its untrue advertising slogan “Far ahead of peers”, which could also be called “a single word is worth a thousand pieces of gold!”

Cases have been increasing in recent years where companies were punished by the AIC for improper advertising slogans involving fraudulent or misleading words, or the utilization of absolute terms such as “first” and “highest”, which go against relevant laws and regulations.

Obviously, in the current mobile internet era, companies focus more on how to attract consumers’ attention in commercial promotion instead of compliance review and risk management. Their legal departments may also put more energy into intellectual property (IP) acquisition and enforcement. The compliance risks associated with IP involve all aspects of corporate business activities, without limitation to the field of the Advertisement Law.

Jerry Xia is a partner-level senior counsel and Simon Du is a senior associate at AnJie Law Firm