Guangdong High Court ruled that a cross-border e-commerce ERP constituted unfair competition

The " 2024 China Cross-border E-commerce Software Service Industry Report" shows that the scale of China's cross-border e-commerce market has jumped from US$0.7 trillion in 2019 to US$1.4 trillion in 2023, and is expected to exceed US$2.4 trillion in 2028.

However, as the industry develops rapidly, some SaaS service providers have also exposed the phenomenon of disordered competition - from functional architecture to interactive design, some companies have excessively borrowed and "copied homework", which also raises new issues for the long-term healthy development of the industry.

In June 2024, the Shenzhen Intermediate People's Court made a second-instance judgment, finding that Shenzhen Dianxiaomi Network Technology Co., Ltd. and Shenzhen Meiyunji Network Technology Co., Ltd. (its product "Saihu ERP") constituted unfair competition. The case originated from Shenzhen Lingxing Network Technology Co., Ltd. (its product "Lingxing ERP") claiming that Meiyunji had committed software interface plagiarism and infringement, and then filed a lawsuit with the Longgang District People's Court of Shenzhen.

After the Shenzhen Intermediate People's Court made the second-instance judgment, Meiyunji Company and Dianxiaomi Company applied for a retrial to the Guangdong Higher People's Court. After review, the Guangdong Higher People's Court made the "(2024) Yue Min Shen No. 13348" civil ruling on January 15, 2025, rejecting the retrial application of Meiyunji Company and Dianxiaomi Company, and held that the second-instance court's determination that Meiyunji Company and Dianxiaomi Company constituted unfair competition was not improper. The following is part of the original text of the ruling: "...... This court believes that the software interface is the "outer shell" of the software product, and the two are in the relationship of content and form. The higher the popularity of the software product, the more users of the software interface, and the higher the popularity of the software interface. Therefore, the popularity of the software product can prove the popularity of the software interface. In this case, first of all, the tax report, award certificate, publicity contract and payment voucher, sales revenue and other evidence submitted by Lingxing Company are sufficient to prove the popularity of Lingxing ERP software, and then prove the popularity of the software interface. ......"

This ruling means that the Shenzhen Intermediate People's Court and the Guangdong High People's Court have both determined that the defendants in this case, Meiyunji Company and Dianxiaomi Company, used the Lingxing ERP software interface similar to that of Lingxing Company without the permission of Lingxing Company, which constituted unfair competition. The judgment has final legal effect.

According to the "2024 China Cross-border E-commerce Software Service Industry Report" released by iResearch Consulting, Lingxing ERP ranks first in the market share of multi-platform cross-border e-commerce ERP, mainly Amazon. As a typical practice case of unfair competition caused by SaaS software interface, this case provides a reusable litigation path reference for solving the two major judicial dilemmas of "difficulty in identifying substantial similarity" and "difficulty in obtaining source code evidence" in the software industry, and also brings important significance to the healthy development of the cross-border e-commerce industry.

As the cross-border e-commerce industry involves cross-regulation by multiple national legal systems, the compliance risks of cross-border enterprises have attracted the attention of more and more sellers in recent years. The judicial practice of this case is not only of great reference value to similar cases of SaaS software interface protection at the level of innovation protection, but also of great reference value to the construction of a three-dimensional (innovation capability, compliance history, and risk control mechanism) compliance assessment system for cross-border e-commerce enterprises in the selection of service providers at the level of enterprise compliance system construction.

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