(By You Yunting) The Chinese internet industry is a fiercely competitive one in which many large internet companies have used lawsuits to gain a competitive advantage. Lawyers are engaged by internet companies to fight against their competitors using any new laws and regulations that might offer opportunity. In the most recent unfair competition litigation Qihoo 360 v. Baidu, Qihoo 360 applied for a litigation injunction to prevent Baidu engaging in infringement. On May 23, 2014, the Beijing No.1 Intermediate People’s Court issued its first litigation injunction since the new Civil Procedure Law came into effect.
Introduction to the Case:
Plaintiff: Beijing Qihoo 360 Technology Co., Ltd (the “Qihoo 360”)
Defendant: Beijing Baidu Network Information Technology Co., Ltd (the “Baidu”)
Court: Beijing No.1 Intermediate People’s Court
On April 1, Qihoo 360 filed an unfair competition lawsuit to the Beijing No.1 Intermediate People’s Court. Qihoo 360 alleged that when searching Qihoo 360’s products, services or its enterprise name in Baidu search engine, Baidu inserted a dialog box without authorization that showed several links showing information relevant to “Qihoo 360 defied the Several Provisions Regulating the Market Order of Internet Information Services (the “Order No. 20”) issued by Ministry of Industry and Information Technology, and acted to prevent users from downloading and installing Baidu Antivirus and Baidu Guard. In order to guarantee the legitimate rights of users’ freedom of choice, please uninstall Qihoo 360’s products before installing Baidu Antivirus and Baidu Guard to ensure normal installation.”
The Beijing No.1 Intermediate People’s Court ruled that, as both Qihoo 360 and Baidu are internet companies, there they directly competed against each other. Qihoo 360’s evidence could prima facie prove that Baidu had engaged in such alleged conduct and further that such conduct likely constitutes anti-competitive behavior. Furthermore, if Baidu continued to engage in such conduct, it is likely to cause Qihoo 360 to suffer substantial losses. Therefore, the Beijing No.1 Intermediate People’s Court made a ruling which ordered Baidu to cease infringement.
In researching this article, we searched Qihoo 360’s products, services and enterprise name in the Baidu search engine。 At the time of writing a dialog box was displayed on the right of the page, reading that “Zhou Hongwei and Qihoo 360 are refusing to make an apology to Baidu regarding their punishment by the court”, instead of “Qihoo 360 defied the Several Provisions Regulating the Market Order of Internet Information Services (the “No. 20 Order”).
A highlight of the 2012 version of Civil Procedure Law was the first establishment of the act preservation system. Act preservation, evidence preservation and property preservation make up the preservation system in our Civil Procedure Law. Act preservation refers, similar to a litigation injunction in the western legal system, to an order for the purpose of protecting the interests of the party from sustaining further damages, where the court may, upon the request of the applying party or relying on its legal mandate, order compulsory measures.
Article 100 of new Civil Procedure Law states that: The People’s Court may, regarding the behavior of a party or for other reasons, issue an order where there is difficulty in executing a judgment or where conduct of a party may give rise to losses. On a party’s application, the court may order the preservation of property, demand the engagement in a prescribed conduct or the cessation of a prescribed conduct; where the parties have not raised an application with the court, the court may, at a necessary time, order the adoption of preservation measures.
Where the court orders for preservation, it may require the applying party to issue a guarantee. In this situation, where the applying party refused to issue a guarantee, the court may reject the application for an order of preservation.
If the circumstances are urgent, the court may issue a preservation order within 48 hours of receiving the application; where the court has made such a ruling for preservation, the order will immediately come into effect.
Where a party has successfully applied for a preservation order, it may prevent, either before the lawsuit or during it, the suffering of further damages and might keep self-inflicted damages to a minimum. The different preservation actions can be divided into before-trial and during trial types. Generally speaking, the People’s Courts will require an applicant to give a guarantee. Where such an injunction was found to be erroneously issued, the guarantee will be used to compensate the affected party for any losses suffered as a result of this preservation.
We can see from the circumstances of the above case that, Chinese People’s Courts has already started issuing an increasing number of these injunctions. In the articles: An Introduction to China’s Commercial Secrets Injunctions,HaiDing Court issuing such an order for the sharing of the Talent Show “I am a Singer” on an unauthorized video website,the Court issuing a pre-trial injunction preventing an auction company from auctioning letters between the famous writer Yang Jiangshu and Qian Zhongshu, this website has already written about these injunctions in the circumstances of Commercial Secrets and Copyright litigation.