Recently, the Beijing Intellectual Property Court issued a final and successful judgment in the case of unfair competition dispute between Beijing Houdaxuancheng Education Technology Co., Ltd. and Beijing Ruidachengtai Education Technology Co., Ltd. This case involves two training institutions, which is popular in judicial examination, namely, Houda Fakao and Ruida Fakao. Due to the fact that law students are familiar with this two training institutions and their famous teachers, the case has received high social attention and caused heated discussion in the legal circle.
The amount of the subject matter of this case amounted to CNY100 million, lasting for a total of five years. Ruida Legal Examination fully entrusts Jincheng Tongda & Neal Law Firm, and is led by senior partners Yong WANG and Zhenzhong YANG, with lawyers Chenlin JIN and Yi CHEN participating in the entire process of the case. After the first and second trials, the case was finally settled. The court rejected all the claims of Houda Company, and Ruida Fakao won the lawsuit.
In March 2013, Beijing Houdaxuancheng Education Technology Co., Ltd. was established, which was later called “Houda Judicial Examination”. In the following years, Fengke LIU, Xiuyong ZHONG, Jingui XU and many other famous teachers of judicial examination training joined the training institution one after another. In March 2016, Beijing Ruidachengtai Education Technology Co., Ltd. was established, later renamed “Ruida Education”. In that year, after completing the training work of this year, the above-mentioned illustrious teachers negotiated with Houda Judicial Examination and terminated the contract based on personal development considerations. Later, they joined Ruida Education and participated in the training work of the 2017 judicial examination. For negotiation and termination of contracts, there was no contract dispute or labor dispute between Houda Judicial Examination and the above-mentioned eminent teachers.
In October 2017, Houda Judicial Examination sued Ruida Education in Haidian District People's Court of Beijing on the grounds of “unfair competition”, involving CNY 100 million. It claimed that Ruida Education had “poaching” behavior, and the poaching of the above-mentioned eminent teachers caused serious economic losses to Houda. At the same time, it also constituted unfair competition in terms of frequency, branch school setting and book name.
As the two training institutions are well-known and involve many renowned teachers in the legal examination, this case has aroused heated discussion in the legal circle and is called “the first case in the field of judicial examination training”.
In July 2022, a second-instance judgment was made in this case ((2021) J73MZ No. 2969), and all the claims of Houda Company were rejected according to law. Ruida Education won the case. So far, after five years, this case finally ended.
In view of the so-called “poaching behavior”, China's judicial practice has never formed a unified judgment standard, and the judgment standards of different courts are quite different. In such cases, the plaintiffs often claim that they pay a lot for the growth of a certain talent, and if they change jobs easily, plaintiffs may suffer from serious damage to their expected interests. However, the defendants often argue that the flow of talents is the cornerstone of social progress and personal development, and no one or any unit has the right to restrict the free flow of talents. The limitation of the term of office of talents can only be determined by contract, that is, both parties sign a non-competition agreement, otherwise, talents have the right to flow freely.
Therefore, the biggest difficulty in this case is the application of Article 2 of the Anti-Unfair Competition Law, that is, how to define the so-called business ethics and how to define the boundaries of the free flow of talents in the field of judicial examination and training where talents flow frequently.
In this case, in order to prove its litigation claim, Houda Company submitted the employment certificate and expense evidence of the above-mentioned famous teachers in the judicial examination to the court to prove that it paid a certain cost for the formation of the popularity of the above-mentioned famous teachers.
In order to defend the lawsuit claim of Houda Company, Ruidachengtai Company submitted the resume of the above-mentioned famous teachers and the popularity evidence before joining Houda Company to prove that they had high popularity before joining Houda Company, and the formation of their popularity had nothing to do with Houda Company.
At the same time, due to the general provisions of Article 2 of the Anti-Unfair Competition Law and great theoretical controversy, in order to effectively express our views, in the litigation process of this case, in addition to conventional proof, a large number of legal rhetoric skills were adopted, and the client's views were systematically expounded from the aspects of industry development, policy guidance, concurrence of laws and regulations, personal restrictions and exceptions.
The success of this case is not limited to individual cases, and the values upheld in this case will inevitably extend to the whole training industry, guiding training institutions to attract and retain talents by increasing salaries and providing a more suitable development platform and more development space, instead of restricting the flow of talents and reducing the efficiency of human resource allocation with the flexibility of Article 2 of the Anti-Unfair Competition Law.
As the “first case in the field of judicial examination training”, this case aroused great concern in the whole legal circle. When the court was in session, a large number of students and lawyers attended the trial. After the judgment of the second instance of this case was made, the topic became a hit among the legal circle, and a large number of news media reported the case.
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