Recently, the Beijing Higher People's Court made a final judgment on the unfair competition dispute between Zhuhai Xiao Yuan Technology Co., Ltd. (hereinafter referred to as Xiao Yuan Company) and Beijing Teddy Bear Mobile Technology Co., Ltd. (hereinafter referred to as Teddy Bear Company).

Xiao Yuan Company sued to the court of first instance, claiming that: 1. Teddy Bear Company shall stop using the intelligent SMS identification template written by Xiao Yuan Company; 2. Teddy Bear Company shall publish a statement on its official website for 30 days to eliminate the impact; 3. Teddy Bear Company shall compensate Xiao Yuan Company for economic losses of 10 million yuan; 4. Teddy Bear Company shall bear the reasonable expenses of Xiao Yuan Company for the litigation of this case, totaling 210,000 yuan.

The court of first instance held that Teddy Bear Company's use of the intelligent SMS identification template written by Xiao Yuan Company did not constitute unfair competition as stipulated in Article 2 of the Anti-Unfair Competition Law of 1993, and Xiao Yuan Company's claim that Teddy Bear Company should bear the responsibility of stopping using the template, eliminating influence, compensating economic losses and reasonable expenses could not be established. The court of first instance ruled that all claims of Xiao Yuan Company were rejected.

Unsatisfied with court’s ruling, Xiao Yuan Company filed an appeal to Beijing Higher People's Court.

The court of second instance held that: to apply to the provision of Article 2 of the Anti-Unfair Competition Law of 1993, it is also necessary to prove that the behavior of Teddy Bear Company involved in the case had caused damage to the market competition order and the legitimate rights and interests of consumers, and then violated "business ethics". However, considering that the expression used in the preparation of intelligent SMS recognition in this case is limited, the main information comes from the public domain, and the choice of the counterparty is free, the behavior of Teddy Bear Company involved in the case has a relatively small impact on the market competition order and consumers' right to choose, and does not yet constitute a violation of recognized business ethics. Therefore, the behavior of Teddy Bear Company involved in the case does not constitute the situation that should be regulated by Article 2 of the Anti-Unfair Competition Law of 1993. On July 9, 2021, the court of second instance rejected the appeal and upheld the original judgment.