Plaintiff: CDP Group

The plaintiff CDP Group was established in 2004, and its business scope includes computer software development and design, as well as consult services for enterprise management. It is a partner of SAP Company on BPO business, and collaborates with Wanguo Chang'an Company and Wanguo Data Company in China, and provides human management services for Dow Chemical (China) Investment Co., Ltd. 

Defendant: Peggy Information Technology Co., Ltd.

The defendant Shanghai Peggy Information Technology Co., Ltd. (hereinafter referred to as "Peggy Company") was established in 2012, and its business covers technology development, consulting and enterprise management consulting in the field of computer information technology. 

According to the plaintiff, the defendant had, on "Partner" page of its website (www.packagehr.com),  publicized SAP Company and Wanguo Data Company as its partners, and publicized that they provided human resources and other services for more than 2,000 multinational enterprises and large enterprises, such as Dow Chemical Company, of more than 30 industries across more than 300 cities (hereinafter referred to as "publicity behavior involved"). The plaintiff is the only domestic company that qualifies as the partners of SAP Company, Wanguo Data Company and Dow Chemical Company at the same time. Although the defendant did not mention the name of the plaintiff's company, the publicity behavior involved was directly aimed at the plaintiff, and the false publicity caused damage to the plaintiff, so the plaintiff brought the defendant to court on the grounds of false publicizing. The defendant argued that it only used "SAP" and other logos as demonstrations on the website and was able to provide related services. Such promotional act did not constitute false publicizing, nor was it aimed at the plaintiff. 

According to the Article 9.1 of the Anti-Unfair Competition Law (1993), the court of first instance ruled that all the plaintiff's claims shall be rejected. Unsatisfied with the ruling, the plaintiff appealed to the Shanghai Intellectual Property Court. According to the court of second instance, the dispute focuses on whether the CDP Company has suffered damage due to the publicity behavior involved. First of all, CDP Company is indeed a partner of SAP on BPO business in China. However, CDP Company is not the only partner in this business. Moreover, it failed to prove that it was the only partner of Wanguo Chang'an Company and Wanguo Data Company in China. On the premise that Peggy Company did not directly mention the company name, there is no way to prove the pertinence of the publicity behavior involved. Also, the CDP Company failed to prove that it was the exclusive provider of human resources services for DOW Chemical Company in China. Peggy Company claimed that it provided human resources services for many companies, but did not indicate that it provided services for DOW Company, nor has it mentioned the CDP Company, so the pertinence of the publicity behavior involved cannot be established. Besides, there are a tremendous number of companies that can provide human resources services in the market. Therefore, the court of second instance found that the CDP Company failed to prove that it was targeted by the publicity behavior involved and had suffered damage, hence rejected the appeal and maintained the original judgment. 

CDP Company refused to accept the ruling, and appealed to Shanghai Higher People's Court for retrial. The Higher People's Court ordered the Shanghai Intellectual Property Court to rehear the case. The retrial court held that the focus of the dispute in this case was whether Peggy Company's behavior constituted unfair competition by false publicity and whether it should bear civil liability. False publicity behavior that needs to bear civil liability shall meet three basic requirements: there is a competitive relationship among operators, and the relevant publicity content is sufficient to cause misunderstanding among the relevant public and cause direct damage to operators. In this case, both companies are engaged in human resource management services, and have served as competitors in the same industry. According to the documented evidence, Peggy Company made false publicity / introduction to its services on its website, which will lead to misunderstanding of the relevant public, and result in disadvantage of operators in the same industry in the face of customer choice and market competition, hence directly damaging the interests of other operators. Therefore, no matter whether Peggy Company mentions or implies the CDP Company, the CDP Company can be still deemed as the victim of unfair competition involved. In addition, according to the Anti-Unfair Competition Law, the focus of the regulation on false publicizing is to prevent false statements, and the court should not impose too strict a restriction on the pertinence of direct damage. Therefore, the retrial court found that the publicity behavior involved constituted unfair competition behavior of false publicizing, and the courts of first and second instance made mistakes in determining the nature of the case. 

As Peggy Company did not directly derogate or produce negative comments against the CDP Company in its website publicity, nor did it bring any impact to the goodwill of the CDP Company, the court rejected the claim of "publishing a statement to eliminate the impact". In addition, the CDP Company failed to render the evidence to prove the economic losses suffered by the false publicity involved, so the court did not support the claim of "compensation for economic losses". Considering the reasonable expenses and factors such as relevance, necessity and rationality of the case, the court ordered reasonable expenses including attorney fees, notary fees and translation fees, totaling 60,000 Yuan.