Articles

(Part1) Litigation manual for intellectual property cases involving an E-commerce platform (Part 1)
05.10.2020

Basic principles

  1. When trying intellectual property cases involving an E-commerce platform, one shall not only persist in the basic value of strict protection, but also properly manage the relationship between the intellectual property owner, E-commerce platform operator, online store owner and public interest. And thus, a good balance between the interests of different parties can be maintained.
  2. Following the principle of “powers commensurate with responsibilities”, online platform owner’s autonomy should be respected and, the limitations on the behaviours and liability of the E-commerce platform operator should be clear. It in turn facilitates the proper development of the Internet-related industries.
  3. The idea of the cooperative governance of Internet should be upheld. The relationship between the legal protection, law enforcement, mediation and arbitration should be enhanced. The participation of all stakeholders of E-commerce in governance should be encouraged, and forming a cooperative governance regime of the E-commerce market.

General rules

4. When determining whether the alleged act of the E-commerce platform operator is a provision of service of the platform or an initiative in the proprietary trading business, the People’s Court shall consider the following factors:

  1. (1) The information of the seller on the product webpage and the label “proprietary trading” and “third-party seller”;
  2. (2) The information of the seller on the actual product;
  3. (3) The information of the seller on the invoice or other receipt of the trade.

If there is any inconsistency between the above information of seller, it is normally confirmed that all relevant parties collectively commit an act of sale. However, invoice issued on demand of the taxation department is not included.

  1. In intellectual property infringement cases, if the plaintiff purchases the product which is alleged to be an infringement through an E-commerce platform, the place of receipt is neither the place of performance of contract, nor the place of infringement. Therefore, place of receipt should not be used to determine the appropriate jurisdiction.
  2. The behaviour of sale of infringement products via E-commerce platform does not fall within the scope of “a tort committed on an information network” in Section 25 of Interpretation of the Supreme People’s Court on the Application of the Civil Procedure Law of the People’s Republic of China. Therefore, the place of domicile of the victim should not be used to determine the appropriate jurisdiction.
  • Regarding the “notice-takedown” regulation
  1. E-commerce platform operator should establish efficient intellectual property complaint channels, and make announcement on its webpage in a reasonable manner.
  2. “Notice” issued by the intellectual property owners shall include the following content:
  • Personal information and contact details of the intellectual property owner (and his agent);
  • Information or address that can accurately identify the alleged infringement product, service or content; and
  • Preliminary evidence of infringement, including evidence of ownership and evidence establishing infringement.
  1. “Counter notice” submitted by online store owners shall include the following content:
  • Name and contact details of the person submitting counter notice;
  • Address of the products, service or content which he requests to terminate investigation;
  • Preliminary evidence rebutting the allegation of infringement.
  1. Notice and counter notice shall be delivered in writing. The notice issuer and counter notice issuer shall have the responsibility of ensuring the notice and counter notice to be genuine.
  2. E-commerce platform operator may, in accordance with the legal framework, request the parties to provide more certain and specific information in the notice and counter notice, after considering the factors of need of self-examination, the type of intellectual property right, the circumstances of industry development etc.

In relation to notices involving patent, E-commerce platform operator may request the intellectual property owner to provide explanation on infringement comparison; In relation to notices involving design and utility model patent, the E-commerce platform operator may additionally request the owner to provide patent assessment report (or Notification of Examination on Request for Invalidation)

  1. E-commerce platform operator, by setting requirements for notice and counter notice, shall not impose unreasonable conditions or limitations to the party’s lawful right to protect his rights, for instance setting additional condition irrelevant to the notice and counter notice or setting an excessively high standard to the preliminary evidence.
  2. E-commerce platform operator shall conduct an examination the formality of the notice and counter notice, and eliminate notices that obviously do not prove an infringement of intellectual property and counter notices that obviously do not prove the legality of the issuer person’s act.

When determining whether it can be classified as “obvious”, The People’s Court shall consider the ability to judge of an ordinary E-commerce platform operator, instead of that of a professional intellectual property practitioner.

When imposing a higher standard for the examination of notice and counter notice, E-commerce platform operator shall bear the liability incurred due to wrongful judgments in the examination.

  1. The categories of “necessary measures” E-commerce platform operator shall impose after the receipt of the notification of passing examination includes but is not limited to, removal, blocking off, disconnection, termination of transaction and service, closure of account or payment of guarantee.
  2. The People’s Court shall determine whether the E-commerce platform operator has taken reasonable necessary measures in accordance with the “principle of proportionality”. Specific factors to be taken into account include but are not limited to:
  • Possibility of infringement;
  • Severity of infringement;
  • Effects on the interests of the party against which the notice was issued;
  • Technological ability of the E-commerce platform.

If the party against which the notice was issued repeatedly and intentionally infringes other parties’ intellectual property, the E-commerce platform operator shall take measure to terminate the transactions and services.

  1. When determining whether the E-commerce platform operator has taken necessary measures “timely”, the People’s Court shall take into account factors like the likelihood of amounting to an infringement and the specific category of the necessary measure etc.
  2. If the E-commerce platform operator considers that the notice does not satisfy the requirements, he shall inform and explain to the issuer about the result of the examination with an aim to facilitate his amendment.

In relation to notices issued by the same right owner that has been dealt with already, if it adds no content to the previous one, the E-commerce platform operator has the right to neglect it.

Benny Kong & Tsai © 2020
 

Benny Kong & Tsai, Solicitors

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