Recently, the "2024 Annual Conference on the Top 10 Chinese Cultural, Media, and Entertainment Law Cases" was successfully held at the Communication University of China. This conference was co-hosted by the Research Center for Cultural Law at the School of Cultural Industry Management of the Communication University of China and the Beijing Lawyers Association's Committee on Cultural Tourism, Media, and Sports Law. More than thirty experts from government bodies, judicial organizations, universities, research institutions, bar associations, law firms, and media participated in the discussion.
Among the cases presented, the first domestic case involving unfair competition related to the "online blind box machine" business model, represented by Llinks Law Office was selected as one of the "Top 10 Chinese Cultural and Entertainment Law Cases" (Case No. 9).
Reason for Selection
"This case is an unfair competition case targeting the pre-sale of second-hand blind box products that have not yet been officially launched during the promotional period through an online 'blind box machine,', which is a quite representative case in the industry. The judgment's reasoning dissects the core characteristics and transactional nature of the blind box business model and distinguishes between legitimate business operations with their inherent 'lottery-like' elements and false commercial advertising. Building on the 'Guidelines for the Standardization of Blind Box Business Operations (Trial)' issued by the State Administration for Market Regulation, this case provides further guidance for the standardized operation of the blind box market, offering profound guidance for the blind box trading industry, which is still in its early stages of regulation."
Case Details
The plaintiff in this case is the rights holder of the domestic leading blind box brand "Find Unicorn," while the defendant is the operator of a third-party "online blind box machine" mini-program. During the promotional period before the official launch of the plaintiff's new blind box products, the defendant engaged in pre-sales of these new blind boxes through an online blind box machine mechanism, severely disrupting the plaintiff's normal business operations.
After being commissioned by the client, Llinks Lawyers initiated a lawsuit for unfair competition, achieving victories in both the first and second instances [(2023) Zhe 01 Min Zhong No. 6853]. The court ultimately ruled that the defendant cease infringement, eliminate the impact, and compensate the plaintiff for economic losses and reasonable expenses totaling over 850,000 yuan. The court held that the relevant actions were likely to undermine consumer trust in the plaintiff's brand and substantially affect the plaintiff's platform traffic, transaction opportunities, and business benefits. These actions violated the principles of good faith and recognized business ethics, constituted false advertising, infringed upon consumers' rights to be informed and to choose, and negatively impacted the industry ecosystem where blind box operators gain competitive advantages through legitimate and innovative business practices. They also disrupted the normal competitive order of the blind box industry, constituting unfair competition.
Llinks representation in this case not only comprehensively protected the client's brand reputation and regulated downstream distribution channels but also marked the first judicial ruling on the "online blind box machine" pre-sale model. This case serves as a reference for the compliance of blind box operations and consumer protection within the industry.
Llinks Engagement Team
James Wang, Partner
Denny Jiang, Partner
Junli Xu, Senior Associate
