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Counterfeits on Taobao? Enforcing Your IP rights with online platforms
date: 2019-03-14 Nell Greenhouse Read by:

Once it was hard to walk down the streets of Beijing without finding fake branded goods in one shop or another. Thankfully, things have moved on since then, and in 2019, with the strengthening of IP protections such sights are a . Still, a lot of these goods have moved into the virtual market place. This trend is in some ways more problematic and can really damage a brand, both because it makes counterfeits more accessible, and also because in many cases it is unclear to consumers whether the seller has a legitimate relationship with the brand in question. When purchasing a cut-price wristwatch in a Shanghai market it’s clear that the seller is most likely not an authorised distributor – but that same watch, marketed well on an online platform and at a reasonable price is quite a different matter. In this situation, what can brand owners do?

The good news is that these days, as the majority of large online platforms have their own dedicated IP complaints teams, the process for bringing a complaint is fairly straightforward. Of course the rights holder must have a rights basis in China, so make sure your IP is registered in China first. Each platform has slightly different requirements, and in cases of patent infringement a thorough infringement analysis must be submitted along with other evidence, an experienced IP attorney is best placed to prepare these and guide you through the application process. Once you have submitted this evidence, the platform will make a judgement on whether the goods in question are infringing and if so, will take these goods down.

Platform complaints can prove highly effective in tackling infringing goods where infringer’s business models rely heavily on online sales. The new China E-Commerce law (2019) specifically emphasises the responsibility of e-commerce platforms for infringing products on their sites and specifies that where platforms fail to take effective action, they will be held liable for any further losses incurred by the rights holder. In this case, rights holders may sue the platform jointly with the infringer, as was the case in ELand Fashion (Shanghai) Trade Co. v. Taobao Network Co. & Du Guofa where Taobao was held jointly liable for the damage caused to Eland’s profits by sales of counterfeit goods on its platform, and therefore had to pay damages after it failed to “take such necessary measures as removing, blocking or disconnecting the link timely”.

Of course, platform complaints fail to deal with the source of counterfeit goods; however they are a cost-efficient measure for dealing with counterfeits quickly, in real time as they appear. To deal with the root cause, and stop those pesky stores popping up, a thorough investigation into the source of manufacture is the best option, and gives rights owners the evidence they need to take further action; be that through the courts or through administrative action.