The Beijing Higher People’s Court recently issued guidance on the liability of ecommerce platform service providers where third party intellectual property rights (IPRs) are infringed through transactions using the provider’s platform. The Court also clarified the steps to be taken where liability is established.

This guidance will interest the many businesses which provide e-commerce platforms alongside electronic devices, as well as those businesses which are concerned that their IPRs in electronic products may be infringed through online transactions in China.

Under the guidance, the provider is not obliged to proactively supervise or monitor transaction information which the vendor shares through the platform, if it has complied with its general obligations and duties under PRC Civil Laws.

The provider may be liable for infringement caused by a transaction if it knows or should have known that the vendor uses its platform to:

  • share information about the transaction activities which infringe a third party’s IPRs.
  • conduct transaction activities which infringe a third party’s IPRs.

The provider will be jointly liable with the vendor if it knows that the vendor is using its platform to infringe third party IPRs and does not take certain measures to stop such activities.

The provider will also be liable where:

  • it cooperates with the vendor.
  • it receives certain benefits related to either a transaction or dissemination of transaction information.
  • it allows the dissemination of information which it knows will lead to an infringing transaction.
  • it withholds the vendor’s details from the IPR owner.

The IPR owner is entitled to ask the provider to take appropriate action to stop infringing activities including suspending or deleting the vendor’s account.

The IPR owner does not need to provide evidence for such a request, but the vendor can request that the IPR owner subsequently provides evidence to the provider. If this evidence is not provided, the provider can allow the vendor to resume its activities.

Comment

This is the first time a Chinese court has issued guidance on liability for IPR infringement through online transactions. It should improve certainty both in the ecommerce sector and for all who seek to use and protect their IPRs in China by providing a more consistent approach across the Beijing courts. 

Future developments in this area may include further national regulations on ecommerce, IPR infringement and disclosure of vendors’ identities. 

Further information

The guidance, which the Beijing Higher People’s Court released in December 2012, is referred to as its “Reply to several questions in relation to trials of intellectual property infringement dispute cases in E-commerce”.