Tim Smith's Guest Blog: Taobao Online Infringement Case

星期二 = Tuesday Photo Danny Friedmann

Taobao.com, the popular Chinese e-commerce platform, has appealed against a verdict handed down by a Shanghai court in late March that it should pay compensation of RMB 10,000 (around GBP 950) for its failure to take sufficient steps to prevent a vendor selling counterfeit products on its platform.

The claimant had sent seven letters to Taobao asking it to delete information supplied by the vendor regarding the counterfeit products. Taobao deleted the information but did not take any further action against the vendor such as freezing its account or checking other information uploaded by the vendor to the platform. Consequently, the vendor was able to maintain information about other counterfeit products it was selling on Taobao.

The first instance court stated that if a network provider deletes information after receiving a notice, this is a necessary condition of non-liability, but not a sufficient condition - it may need to do more. Taobao had failed to take further steps against this specific infringer - something its own IPR protection rules already contemplate - and consequently was liable for contributory infringement.

This marks a departure from previous decisions, which did not impose liability on Taobao if it immediately deleted the counterfeit product information. Article 36 of the Tort Liability Law deals specifically with internet providers, stating that "[w]here a network service provider knows that a network user is infringing upon a civil right or interest of another person through its network services, and fails to take necessary measures, it shall be jointly and severally liable for any additional harm with the network user."

The Chinese judiciary is currently drafting a judicial interpretation to deal with on-line liabilities and safe harbours in the copyright field, and it is hoped that will add further clarity to the developing jurisprudential picture.

Guest blog by Tim Smith, Rouse Beijing.

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Beijing's Silk Market

IP Komodo’s friend Tim Smith of Rouse was curious to know what was happening at the famous Beijing Silk Market. He asked his intern Dominic to take a look and here is what they found. Large public notices appear around the market issued by the Beijing Administration for Industry and Commerce, concerning counterfeit goods. The notices (in Chinese only) state that any merchants in Silk Street caught selling any items bearing any of a finite list of famous foreign brands (Prada, Chanel, Burberry, Givenchy, Boss, Hermes, Miu Miu, North Face etc.) would be subject to administrative penalties, as all such articles would be counterfeit. Further, the management of the Silk Street shopping plaza would, if it was shown to have knowingly permitted the sale of any such goods, be subject to administrative measures and criminal punishment. These are all brands which we believe were involved in civil litigation against the Silk Market management.

There are also large red banners in Chinese and English reading "protect intellectual property rights - be law-abiding vendors" and "embrace national brand - respect intellectual property right". There were red sign boards displayed above the aisles every few metres or so in English advising customers that if they had any concerns with the merchandise they had purchased they could contact the customer service desk, call a telephone hotline or send the details of their complaint to a dedicated email address.

But a look around revealed many articles from jackets and shirts to belts and watches bearing brands such as D&G, Giorgio Armani, Adidas, Nike, Ralph Lauren and Abercrombie, all on unabashed display. Few of the brands listed in the notice, however, were seen. Coincidentally these all appear to be companies which were plaintiffs in civil court actions against the market in recent years. The result of the cases is that those brands who went to court appear to have succeeded in proving secondary liability against the landlord, so he ensures their products are not sold there. But those who have not litigated do not appear to be in that position. Further pending litigation is seeking to widen the landlord's liability further.

Guest post by IP Komodo Dragon

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