In a recently concluded civil retrial case (the first of this year), the Supreme Court found that replacing trademarks with competitors' propaganda pictures constituted unfair competition. 

Nanjing Delson Electric Co., Ltd. (hereinafter referred to as Delson Company), the retrial applicant, is the seller of constant temperature and humidity control cabinet in intelligent substation, and has sent this product brochure to its customers. According to Delson, the respondent Meffler Intelligent Equipment Co., Ltd. (hereinafter referred to as Meffler Company) used eight pictures of its products (hereinafter referred to as "the pictures involved") in the construction project of Delson Company as replaced trademark in its own brochure, and described in the brochure that "multiple patents have been applied for to protect the products at present". After investigation, Delson Company has signed contracts with many companies, including State Grid Systems in Jiangsu, Anhui and Jiangxi provinces, while Meifler Company sent its brochure to Huanggang branch of the State Grid. Delson Company believes that the above behavior constitutes trademark infringement and unfair competition, hence sued Meffler to the court.

In view of the significant difference between Delson's logo "DERSON" and Meffler's logo "Powerfiller", the trial court did not support the claim of trademark infringement. Therefore, the focus of the dispute in this case lies in whether the brochure produced by Meffler Company and the propaganda behavior constitute unfair competition. 

The court of first and second instances held that the pictures involved showed the installation effect of single products, and the picture did not indicate the source and location of the content, which could not reflect the specific construction project, nor could it make people mistakenly think that there was a specific connection with Delson Company, which did not constitute confusion. In addition, the products involved in the case are electrical products for specific uses, so it is necessary to determine the sales of such products through legal means, such as tendering and bidding. The publicity behavior itself will not increase the competitive advantage of Meffler Company, nor does it cause Delson Company to lose legitimate trading opportunities.

However, the Supreme Court overturned the above allegation based on the ground that, on the one hand, the use of pictures involved in the brochure by Meifler Company is misleading enough to let the consumers believe that these eight engineering cases were undertaken by Meifler Company. By deceiving and misleading consumers, it is easy for Meffler Company to gain competitive advantage and trading opportunities in the market, which damages the interests of its competitor Delson Company, hence disrupts the market rules. The false propaganda of Meifler Company on its products has led the consumers to consume by mistake, which also harms the interests of consumers. On the other hand, Meffler Company admits that it has not applied for relevant patents so far, resulting in false and misleading contents which will easily deceive the relevant public and infringe on the interests of Delson Company who has a competitive relationship with Meffler Company and owns many patents.

The Supreme Court deemed, after retrial, the behavior of Meffler Company to violate Article 8 of the Anti-Unfair Competition Law, which constituted unfair competition with false propaganda. 

It is worth noting in this case that the respondent sent the brochure to the subsidiary of the applicant's customer, which would clearly end up with a high probability of confusion. However, if we only stand upon the independence of sales brought by "bidding", which is concerned by the court of the second instance, or put the judgment idea of this article in a more generalized scenario of usage (for example, using the pictures involved in the case for web page display), whether the conclusion of the court is still valid would remain for further discussion.