03 May 2013

IP Infringement in E-commerce Platforms and Others - FAQ

I. How to discover infringing activities in an E-commerce platform?

Customer complaints, Internet media (including Blogs and Weibo) and initiative online searches and monitoring are the primary ways to discover infringing goods in E-Commerce platforms. As the activities of infringers on such E-Commerce platforms are becoming more discreet and more sophisticated, when conducting online search and monitoring activities, it is important to pay attention to the following issues:

  • While conducting a search by keywords of brands or common names of goods, sorting the results by price may uncover infringing goods. If the price is extremely low, it is likely an infringing good. Moreover, some infringers may still use the normal price in the pricing table. However, they might display their "REAL" price in the product picture. These goods is also likely infringing goods
  • Take note of the alternative names of brands. The infringer will sometimes change keywords to avoid being detected. For example, the infringer might use words with a similar pronunciation, add extra wording, use other inexplicit words, or add wording with implied meanings that relate to the brand
  • Analyze the form of payment and delivery. If the seller only accepts "payment on delivery", it is highly possible that the seller is an infringer
  • Communicate with sellers to obtain relevant information, including but not limited to the price, specifications, whether it is parallel goods, any invoices, whether it is counterfeiting, origin of production, etc
  • Analyze customer reviews, negative reviews may provide necessary information, including any product liability, whether it is infringing goods. Moreover, one should also keep an eye on those abnormal highly positive reviews, which you may reasonably cast doubt on whether all the positive reviews are untrue and aim to increase the reputation of its store.

II. How to effectively complain about infringement on E-Commerce platforms?

Often times these E-Commerce platforms may not immediately address complaints made by the real IP owners. In order to make your complaint more effective and efficient, IP owners should pay attention to the following points:

  • Understand the complaint mechanisms and requirements of the relevant E-commerce platforms. For example, Taobao only accepts complaints related to patent, trademark and copyright infringement, and provides a special website for handling such complaints
  • Collect evidence and information of infringement as much as possible. For example, Taobao requires the complainant to provide a link to the infringing products. Moreover, we suggest notarizing the relevant web pages before making your complaint, in order to preserve the evidence before the infringer has an opportunity to hide their infringing activity
  • Prepare all evidence of your valid IP rights. Taobao for example, requires the complainant to provide the valid Identification certificate, ownership certificate, and in some circumstances, will also require a special form complaint letter
  • Make sure that the products you are making the complaint about are not parallel-imported products.

III. Further actions if a complaint made to an E-commerce platform does not generate positive results

If the complaint made to an E-commerce platform does not generate positive results, IP owners should

  • Further verify and confirm whether it is actual infringement, or whether it is a parallel-imported product
  • Further confirm whether the complaint has been delivered and accepted by the correct department, and whether the complaint was made in accordance with the complaint mechanisms and requirements
  • Notarize web pages to preserve evidence
  • Complain to the State Intellectual Properties Office, State Administration for Industry & Commerce or National Copyrights Administration regarding the E-commerce platform
  • Bring litigation against the E-commerce platform
  • Generate necessary media exposure.

IV. Matters about establishing online shop in E-commerce platform

Many companies have complained that it is quite difficult to establish a flagship store on Taobao or Tmall; however, the problem is often because they do not properly understand the requirements. For example, Tmall has different qualification requirements for establishing a "Flagship store", "Store" and "Franchise Store". In addition, there are also different qualification requirements for different kinds of businesses. For example, establishing a sportswear store will require the person to be a general taxpayer and obtain a trademark registration certificate.

Moreover, applications to Taobao or Tmall are generally conducted on-line. This approach may frustrate applicants as they cannot find anyone for clarifications or to answer questions. A better approach is to read all relevant rules for establishing an on-line shop, understanding the platform's considerations behind those rules, and analyzing whether the applicant meets the requirements. Hiring lawyers or consultants in communicating with E-commerce platforms directly may also be a sound decision.

(This article was originally written in Chinese, and the English version is a translation.)

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