New Advertising Law provides new tool to protect brands

In April 2015 the Advertising Law, which has been in force since 1995, was revised and promulgated by the Standing Committee of the National People’s Congress. The new law has clarified certain grey areas and redefined the boundaries of advertising in light of changing market realities.

Highlights
The new law sets out the following more stringent requirements for ads:

• The ad should state, accurately and clearly, the feature, functionality, origin, purpose, quality, ingredient, price, producer, validity period and guarantee of the advertised product or the provider, means, quality, price and guarantee of the advertised service.
• The ad should expressly indicate the type, specification, quantity, time limit and means of any complimentary gifts provided.

A false advertisement is one that contains false or misleading content that deceives or misleads consumers. The new law gives the following examples of what constitutes false advertisement:

• The advertised product or service does not exist.
• The contents advertised do not reflect reality.
• The ad uses fabricated, forged or unverifiable research results, statistical data or survey findings.
• The effect of the advertised product or service is fabricated.

The new law introduces strict advertising requirements for specific products, services and industries, including:

• pharmaceuticals, health foods and medical instruments;
• tobacco and alcohol;
• education and training;
• real estate; and
• commercial products and services with investment return.

The new law prohibits the advertisement of certain products targeted at minors, as well as imposing further restrictions on the advertisement of products targeted at minors under the age of 14.

Advertisers, advertising operators and broadcasters face increased penalties, including fines of up to Rmb1 million, for violating the new law. The new law also imposes criminal liability and the revocation of business licences for serious and/or repetitive violations.

Any party may complain to the Administration of Industry and Commerce regarding a violation of the new law and the authorities must deal with complaints within seven working days. Such complaints will be treated in confidence

Implications for brand owners
The new law demonstrates China’s determination to police advertising more closely in the ever-changing media environment. When devising a strategy to dispute the unauthorised use of a trademark, brand owners should also consider the advertising aspect of the mark, as the new law may offer them remedies and measures for the protection of their rights. Thus, the new law should give brand owners another weapon in the battle to curb infringing activities and synergise enforcement efforts.

The new Advertising Law will come into force on September 1 2015.