On April 23, the Intermediate People's Court of Hangzhou held a press conference, reporting on the status of intellectual property judicial protection by Hangzhou courts in 2024 and the typical cases of intellectual property judicial protection and service support for the development of new-quality productive forces in 2024. In 2024, Hangzhou courts accepted a total of 9,443 intellectual property cases and concluded 8,411 cases, including more than 180 cases involving core technologies, new energy, artificial intelligence, biological manufacturing, and other emerging and future industries, supporting "hard-core technology" and accelerating the formation of new-quality productive forces.
Among them, the first domestic case involving unfair competition related to the "blind box online draw machine" business model, represented by Llinks Law Offices, was selected as one of the "Typical Cases of Service and Support for the Development of New-Quality Productive Forces by Hangzhou Courts in 2024" (Case No. 8).
Reason for Recommendation
"This case is the first unfair competition dispute involving the 'online draw and pre-sale' of blind boxes in Chinese courts, originating from the pre-sale of 'second-hand blind boxes.' It reflects the innovation of IP development and blind box business models. The case provides an in-depth analysis of unfair competition in blind box operations, focusing on the demand substitution between 'first-hand blind boxes' and 'second-hand blind boxes,' as well as unfair competition behaviors such as false advertising and free-riding in blind box transactions. It examines the legitimate boundaries of blind box business model innovation and clarifies that when the typified provisions of the Anti-Unfair Competition Law are insufficient to regulate unfair competition in the blind box market, the general provisions should be applied as a supplement. This case aims to provide judicial guidance for the compliant development of the blind box market under the background of new-quality productive forces."
Case Details
This case, the first of its kind in Chinese courts involving unfair competition disputes related to the "online draw and pre-sale" of blind boxes, originated from the pre-sale of "second-hand blind boxes." It reflects the innovation in IP development and the business model of blind boxes. The case provides an in-depth analysis of unfair competition in blind box operations, focusing on the demand substitution between "first-hand blind boxes" and "second-hand blind boxes," as well as unfair competition behaviors such as false advertising and free-riding in blind box transactions. It examines the legitimate boundaries of blind box business model innovation and clarifies that when the typified provisions of the Anti-Unfair Competition Law are insufficient to regulate unfair competition in the blind box market, the general provisions should be applied as a supplement. This case aims to provide judicial guidance for the compliant development of the blind box market under the background of new-quality productive forces.
After accepting the client's commission, Llinks initiated an unfair competition lawsuit against this behavior and achieved victories in both the first and second instances [(2023) Zhe 01 Min Zhong 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 such actions easily undermine consumer trust in the plaintiff's brand, substantially affect the plaintiff's platform traffic, transaction opportunities, and business profits, violate the principles of good faith and recognized commercial ethics, and constitute false advertising. They also infringe upon consumers' rights to be informed and to choose, negatively impacting the industry ecosystem where blind box operators gain competitive advantages through lawful and innovative business practices, and disrupt the normal competitive order of the blind box industry, thus constituting unfair competition.
In this case, Llinks lawyer not only comprehensively protected the client's brand reputation and sought favorable judicial rulings to regulate downstream distribution channels but also represents the first judicial case addressing the unfair competition of the "blind box online draw box machine" and "online draw box presale" business. It holds significant reference value for compliance operation and consumer protection in the blind box industry.
