IP PROTECTION IN CHINA ’ S E-COMMERCE INDUSTRY
China ’ s leading e-commerce platforms have approached the challenge by instituting a range of measures to protect IP , which in many cases include solutions well beyond their legal obligations . In China , as in the US , e-commerce platforms are required to deploy notice and takedown procedures that allow rights holders to assert their IP rights so that platforms can take the measures necessary to stop any infringement once they have received a rights holder ’ s complaint .
But China ’ s leading e-commerce platforms have gone much further : by taking the initiative to implement a series of proactive steps to screen and identify counterfeits , and ensuring that these measures and the compensation that is imposed exceed what is mandated in law .
This section will show that many of their efforts meet the latest best practice guidance on combating the sale of counterfeit goods online that the International Trademark Association ( INTA ) released in 2017 , and which call on e-commerce platforms to “ strengthen and streamline procedures for identifying and taking more effective action against repeat offenders .” 18 INTA also notes that trademark owners should do more to educate the public and others about IP , and monitor and notify platforms when they find counterfeits .
The key areas that INTA ’ s guidelines cover are :
• Vendor registration .
• Using technology to screen proactively for fraudulent products and counterfeit listings .
• Creating user-friendly portals for takedown requests and complaints about fraudulent products .
• Implementing penalty policies and enforcement measures .
• Collaborating with stakeholders and law enforcement .
VENDOR REGISTRATION Vendor registration matters because , as INTA notes , lax verification procedures let counterfeiters sign up anonymously and open multiple shops on the same platform . INTA recommends platforms use filters and ID verification to better screen customers , while automated know-your-customer ( KYC ) measures can help verify sellers ’ identities and addresses , and ensure they aren ’ t operating false accounts .
China ’ s top platforms have taken a comprehensive and broadly similar approach to vendor registration . Pinduoduo and Taobao require that individual merchants submit their ID cards , and use facial recognition to check against the national public security database to confirm the prospective vendor is the cardholder . Both restrict the number of stores that a merchant can set up . And corporate merchants looking to sell on Pinduoduo must submit their business license and the ID cards of their legal representatives and store managers , which are also checked against national databases .
Holding such information helps prevent the sale of counterfeits , makes investigations of alleged breaches and penalizing actual breaches easier , and precludes those on Pinduoduo ’ s blacklist , for example , from getting another account .
JD . com has strict rules for direct sourcing and thirdparty sales , with suppliers and vendors having to undergo mandatory background checks , and site inspections if required . 19 Any merchant looking to sell products in key categories must be authorized and endorsed by the relevant brand and pay a deposit . 20 JD . com also carries out reviews to determine a merchant ’ s authenticity . 21
PRODUCT-SCREENING TECHNOLOGY The first line of defense for China ’ s leading platforms to screen the billions of products listed on them is by using technology such as data analytics , artificial intelligence ( AI ), machine learning and image recognition .
The bulk of platforms ’ efforts happen well before customers see products online . Pinduoduo identifies potentially problematic products using text , image and behavior analysis – assessing a merchant ’ s operations and records of rejected product listings , for example , to determine how likely they are to be a seller of counterfeit goods .
Pinduoduo works with leading brands and develops customized and AI-driven blocking rules and screening models for each . The company ’ s “ Brand Care Program ” allows for counterfeits to be blocked and removed automatically , and borderline cases are sent for manual 18
Addressing the Sale of Counterfeits on the Internet , INTA ( 2017 ). See : https :// www . inta . org / Advocacy / Documents / 2018 / Addressing _ the _ Sale _ of _ Counterfeits _ on _ the _ Internet _ 021518 . pdf 19
See : https :// ipkey . eu / sites / default / files / legacy-ipkey-docs / ellen-lin---ip-protection---jd . pdf 20 In-Depth Report : How JD Tackles Counterfeits Part Two : The Quality Guarantee , JD . com , op cit . 21 Ibid .
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