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IPR: How to Remove Counterfeit Goods from E-Commerce Sites in China
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1. China: Counterfeit goods and the internet

The internet has become a popular and easy channel for product distribution around the world. It has created a marketplace of more than half a billion users in China, more than a third of the world’s total online population, and is still expanding. Apart from being a forum for legitimate vendors and original products, the internet is also used by illegal and unscrupulous businesses as a platform for the distribution of counterfeit goods which infringe intellectual property rights (IPR).

As the internet provides a convenient platform for counterfeits, we recommend that every European SME (especially those with successful products) monitors Chinese e-commerce sites for infringing products. By moving quickly you will be able to have infringing products removed from sale and preserve your market share. Although some companies find that internet monitoring is time consuming, you may find yourself at high risk if you sell your product on the Chinese market, manufacture your product in China or even if you have a popular product on sale in Europe.

This guide provides you with information on the regulations governing e-commerce and a practical introduction on how to have infringing products removed from two popular Chinese e-commerce sites: Alibaba and Taobao.

Protection for Intellectual Property online

China, similarly to European countries, provides legal protection of Intellectual Property Rights (IPR) including trademarks, copyrights and patents. The specific regulations related to the internet stipulates that if the IP-protected material is uploaded without the right holder’s consent, they may request in writing that the internet service provider (ISP) removes the infringing work, or removes the relevant website from the ISP’s network and disables access to the copyrighted material. This kind of written warning is known as a ‘take-down notice’. Trademarks and patent rights must be registered in China. Copyright exists automatically but registration is recommended and usually necessary for take-down notices.

In order to issue a take-down notice you must have registered your IPR in China. Registration in your home country is not usually sufficient (although Alibaba does accept IP registered outside of China). For a successful take down action you will have to provide the ISP with the registration documents of your Chinese trademarks, patents or copyright.

Although ISPs can help to remove infringing products their powers are limited. E-commerce platforms ISPs cannot impose fines on infringers or grant any compensation to right holders. Additionally, the ISP cannot make a judgment on conflicting IP infringement claims.

2. How to spot infringing content online

a) Where to search for infringing content

The most common infringements encountered on e-commerce sites include trademark violation (i.e. used without permission), the sale of counterfeit products and copyright infringement (advertisements and other images used to promote counterfeit products).

b) Tips on how to find infringing products online

1. Search for names which are identical or similar to your brand or product name.

2. Search for your brand or product name in Chinese. Chinese consumers like to translate brand names into Chinese, either as a phonetic translation or by translating the meaning. Where possible ask a Chinese colleague or use a translation tool to search e-commerce sites in Chinese.

3. You may also find more results by conducting your search through a Chinese search engine (baidu.com or bing.com).

4. Search for items in the same category as your product.

5. Use you product name plus your home country as key search terms.

c) How to spot a suspicious sale

1. The listing was made by an individual or company who is not involved in your official distribution channel in China.

2. There are a large number of listings from one vendor.

3. The vendor is offering the product lower than the market price.

4. The product is listed several times with a wide variation between prices for each listing.

5. The vendor has a large number of units available for sale. Please note that if a vendor offers only one or few a units of a product, it may not constitute an infringement as it is legal to sell ‘second hand’ products or to re-sell original new products.

3. User friendly tools provided by popular Chinese ISPs

Many Chinese ISPs provide tools to facilitate submission of takedown notices; please see the examples from Alibaba and Taobao below.

Alibaba’s IPR policy

In case of infringement Alibaba may:

Remove the listing upon receipt of a take-down notice from the IPR holder.

Notify members responsible for listings subject to IP infringement claim.

Suspend or terminate the membership of a user who has received multiple IP infringement claims.

AliProtect®: File claims and request take-downs

AliProtect® provides an efficient and transparent channel for IPR holders to file claims and request the taking down of allegedly infringing listings, which is available in English. In order to proceed you need to complete a free registration and accept the terms and conditions.

Necessary documents

Three sets of documents must be submitted to AliProtect® for IP infringement claims:

1. Proof of identity – For companies this includes business incorporation certificate or certificate of incorporation. For individuals, your identification documents such as a passport or national identification card are required.

2. Proof of IPR ownership – Including patent registration certificate, trademark registration certificate or copyright registration certificate (please note an application receipt is insufficient).

3. Identification of the alleged infringer and details of the listing which you wish to have removed. We suggest providing clickable hyperlinks.

Timeline and counter-notification system

Alibaba evaluates IP infringement claims filed via AliProtect® promptly and deletes listings on a weekly basis. Often, there will be more than one infringing listing and Alibaba admits max 200 listings per infringement complaint against a single vendor.

After receiving a complaint the alleged infringer must:

1. If there is no objection to the complaint - delete the link and clear up other product information involving intellectual rights on relevant webpage.

2. If there is an objection to the complaint - submit a counter notification in the system (note: if no counter-notification is received within three days after receipt of notice, the system will automatically delete the listing under complaint).

The complainant must take the following steps after receiving any counter-notification:

1. If the complainant accepts the counter-notification – confirm so in the system.

2. If the complainant does not accept the counter-notification - submit a dispute handling request in the system.

3. If the complainant does not respond - the listing under complaint will be reinstated until the complainant responds.

Fees

There is no charge for registration and submission of IPR infringement claims.

Taobao’s IPR policy

Another popular online platform in China is Taobao. Taobao is a domestic Chinese online platform aimed at local users. It operates exclusively in Chinese and only accepts IPR registered in China for take-down notices.

However, Taobao is a powerful force in the e-commerce sector in China and European SMES should monitor it for IPR infringements. Taobao has a sophisticated complaint system which led to 87 million listings being removed from the site and one million users being punished in 2012.

Fees

There is no charge for registration and submission of IPR infringement claims.

4. Next Steps

Although issuing a take-down notice is a relatively quick process, it is one which may need to be completed frequently depending on the number of counterfeits of your product on the market. As well as searching the sites mentioned above, you should look at other popular e-commerce sites in case your IP is being infringed elsewhere. In the case of wide-spread counterfeiting it may be possible to take further legal action against the infringer. 
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