Counterfeiting products are not unusual in China. The key players of E-commerce in China are the Alibaba Group, which holds 70% of the total E-commerce market in China with Taobao and Tmall, and JD. com with a 20% market share. They step up taking various measures to crack down on counterfeit products, but the effect is quite limited. According to a survey published by State Administration for Industry and Commerce of China (SAIC) and China Consumers’ Association in 2015, there are 7 of 9 E-commerce platforms in the spot-check which sell counterfeit or substandard quality goods. However, to remove the offending items from Chinese e-commerce websites is not simple.
A key factor in removing the infringing product is that the product is indeed a proven infringing product. If the intellectual property rights of third parties are violated, all of the big domestic and foreign E-commerce sites, including the Alibaba family of sites and JD etc. need to carry out a fixed internal procedure of removing the items. To have someone during the procedure who are able to speak Chinese and be familiar with Chinese intellectual property law will have many decisive positive effects on it.
Generally, suing is not advisable because of the high cost unless and until there is no other way to implement the takedown action. As well as a previous lawsuit against Alibaba, it deals a lot more with why so many counterfeit products show up on Alibaba websites in the first place than on Alibaba’s failure to take down counterfeit products once on one of their sites.
The most important evidence to show is a registration of your IP (your trademark or your copyright) somewhere. If the registration is conducted in China, then the e-commerce platform will certainly recognize the trademark, the request for cancellation will be relatively simple and quick. In the case of products with foreign IP registrations, it could be admitted on some websites. In theory, China is obligated to recognize all trademarks registered in the countries of any Berne Convention signatory nation. If your IP are never registered anywhere, the rights protection will be quite difficult. A registration in advance is important, because if you turn to register after the infringement happens, when the registration is done after a periods of time, you may already lost a lot even the most interests in Chinese market.
Another thing to consider is each site's own takedown procedure that we have to comply with. For example, submit information and documents in a specific website, for example by Taobao and Tmall in ipp.alibabagroup.com and claim a removal. Alibaba Group requests the IP-holder to provide proof of identity and IP rights, hyperlinks to the counterfeiting products, any additional support of infringements and a power of attorney. For some small websites, we can contact the responsible person directly. Those platform administrator also doesn't want their website to be sued for serving counterfeit products a distribution channel.
We have also dealt with Chinese distributor with a overdue certificate, which still sells products of our client in an official store in Tmall or holds an official account of this brand in Weibo. There are not really counterfeiting products presented in the website, but it is categorized by certain websites into illegal use of rights of third parties. They also have a procedure of takedown and request the right holder to provide in addition proof of the invalid certificate.
But troubles are not so easy over. After the takedown procedure goes smoothly, the same counterfeiters may not abandon all of this, and in addition, it is possible that more other counterfeits pop up. Therefore, it is imperative to make reasonable proposals and regulatory strategy with professionals. In this case, it is important to find effective ways to prevent or reduce the loss caused by counterfeiting products. A lot of famous international brand, including Apple, Burberry, Louis Vuitton, Cartier, Nike etc. have established cooperative relationship with big e-commerce platforms like Alibaba family sites against counterfeiting products.
In order to regulate and prevent the occurrence of this circumstance, the largest E-commerce platform Taobao has its internal system of punishment for their shops in addition to remove products. Each shop has a initial score to penalize if the shop is found and confirmed to sell counterfeit goods or illegally use rights of third parties. The level of penalty depends on how serious the circumstance is. A infringement with huge influence could directly lead to close of a shop.
There are not only offending items on E-commerce platform, but ads of those products also appear on social media in China like Weibo (“Chinese Twitter”) and WeChat (a combination of Whatsapp and Facebook). We also have an official Weibo account that makes us eligible to seek removal of links and ads that infringe our clients’ IP. Therefore, the following should be submitted to Weibo: (i) your “business license” (ii) any formal IP registration documents (iii) a authenticity statement and (iiii) a power of attorney. We also need to provide proof of the connection between the infringing material and the IP being infringed. Then we translate these documents into Chinese to make things easier on the Chinese website company. After submission, it typically takes websites some days to verify our information. In this step, the progress of the verification mostly depends on the website and could take time. The infringing party could then be prohibited from posting the same information again. If the infringing party files a cross-complaint, we would then need to deny the cross-complaint, and then website would handle the “dispute”. But the counterfeiters almost never file a cross-complaint; they typically just disappear.
In other words, plan now with your IP filings for takedowns later!