A functionalist approach to a principled application of the General Clause of China's Anti-Unfair Competition Law in intellectual property cases

An overlap exists between China's IP laws and its Anti-Unfair Competition Law in that the General Clause of the latter can and is expected to be used to protect IP rights (`IPRs') that are not specifically enumerated in existing IP laws. However, in applying the General Clause, current court practice fails to properly adhere to the separation of powers doctrine between the legislature and judiciary and adopts an excessively interventionist approach in creating `judge-made' law. To address this, a functionalist analysis proposes, in consideration of both the extrinsic and intrinsic constraints of IP rights, that courts should generally avoid invoking the General Clause save in exceptional situations. On the one hand, the extrinsic constraints of IPRs dictate that the courts should, in principle, avoid applying the General Clause in so far as possible. Yet on the other hand, the intrinsic constraints permit exceptions in cases where the creators of the intellectual property do put adequate work into warranting legal recognition and protection, and where allowing free-riding will result in grossly inadequate incentives and underinvestment in product innovation and development, jeopardizing the evolution of legitimate business models and social welfare overall.