Last April the Supreme People's Court (the highest judicial governing body of China), when submitting their periodic reports on the activities of the previous year, decided to also publish a list of the “Top 10 IP Cases of 2011”, a selection of cases, even if they did not came to the attention of the Court itself, shall be deemed most representative of the trend of case law in the field of intellectual property.
Among these, of particular interest would seem to be the decision issued by the Intermediate People's Court of Shanghai in a case brought by the Korean giant in the fashion industry E-Land against, inter alia, the famous Chinese site Taobao online sales. E-Land, in particular, had reported numerous times to Taobao for the sale on its platform of counterfeit goods bearing the mark Tennie Weenie, owned by the Korean company.
In response to reports, Taobao had always applied the practice of formally prohibiting the sale of counterfeit goods through its platform and to give notice to the operators involved for the removal of such products, but not taking any action against operators guilty of those counterfeiting, even in case of repetition of the offense. In its defence, the Chinese provider had always supported the legality of its conduct on the basis of the neutral role of the platform with respect to acts of infringement committed by users.
Chinese judges, however, have held that in case of repeated acts of misconduct of which they have been made aware, owners of trading platforms have a duty to take appropriate and effective action so that the offence proven is remedied and its repetition prevented.
The decision is important, even in a civil law country like China where the precedent is not binding, because it is one of the first cases in which Chinese courts have recognized the obligation to take action for owners of platforms of online stores for violations by of third parties, and because the yearbook of the most important cases of 2011 is the guideline for the Chinese courts in similar cases.