Court cracks whip on internet service providers over sale of counterfeit products

Internet operators who are aware of retailers selling counterfeit products online and yet continue to provide them with services will be punished, a judge at the Beijing Intellectual Property Court said.

"If internet platforms don't take measures to stop such infringements, including removing, blocking or disconnecting the web links of such online retailers after finding evidence or receiving reports concerning fake products, they'll be deemed to have failed to fulfill their obligations and should also be held civilly liable," said Zhou Liting, the judge of the court's No 2 Tribunal, said.

In recent years, some Western countries have claimed that Chinese merchants are able to sell counterfeit goods, both online and offline, because China's trademark protection measures are inadequate and leniency is shown toward those guilty of infringement.

Regardless of such allegations, China has been continuously fighting IP infringement through various judicial and administrative means. Public awareness on protection of IP rights is generated through focused campaigns and concerted efforts are made to further develop and improve the legal system in this regard.

Zhou said that some recently promulgated laws, including the Civil Code and the E-Commerce Law, have provided a stronger legal basis for judges to protect IP owners, while promoting the healthy development of e-commerce platforms.

She said the court has attached great importance to strengthening the governance of internet platforms since it was set up in November 2014. "The platforms help people to accurately find resources, but they are also an area where IP infringements frequently occur," she said.

The court has awarded punitive damages and increased compensation in many cases where the defendants intentionally or repeatedly infringed IP rights, according to Zhou. For example, it awarded fresh punitive damages to a retailer who despite warnings from Mast-Jagermeister SE — an alcoholic beverage company based in Germany — continued selling counterfeit bottles of the company's flagship Jagermeister drink.

The defendant (retailer) had been fined earlier for the same offense and hence, the court decided to impose further punitive damages, she explained.

While the legal protection of IP rights has been intensified, the State Administration for Market Regulation has taken various measures to crack down on counterfeit products on e-commerce platforms.

Ahead of online shopping festivals, the administration issued notices to internet service providers, requiring them to increase scrutiny of online retailers' identities and block web links if they received reports about counterfeit goods.

Data shows that from January till September last year, the administration solved some 360,000 cases involving IP infringement, nearly 30,000 of which were related to violations of trademarks and patents.