1. IP Enforcement Challenges in China
Sophia Hou
7 April 2018

2. OUTLINE E-commerce in China
11/02/2018
OUTLINE
E-commerce in China
Challenges of online platform IP protection
Key IP legislative development in China
China IP court system and challenges

3. E-COMMERCE IN CHINA
China has clearly emerged as the world leader in e-commerce
1.2 trillion dollars.
That’s how much Chinese consumers are on track to spend online by the end of 2018 –half of the ecommerce market worldwide

4. ecommerce sales worldwide

5. Alibaba sales volume on 11.11

6. Other E-commerce platforms
Major platforms
Alibaba Group
Other E-commerce platforms
Social Media

7. 2017 Alibaba IP protection annual report
11/02/2018
2017 Alibaba IP protection annual report
Shutting down 240,000 infringing taobao stores
1606 online suspects arrested by police
Police cracking 1328 counterfeit sites sourced from alibaba
Total illegal business value from criminal action – RMB43 trillion ( USD6.8 trillion)
--attack counterfeiters as attacking drunk-driving.

8. 2017 Alibaba IP protection annual report
11/02/2018
2017 Alibaba IP protection annual report
In 2017 , Alibaba as platform sued online cat food seller based on contract breach and infringing Alibaba’s good will
Alibaba refused to settle and determined for a judgement
First case of the kind
Judge rewarded RMB120,000 (USD19,047) to Alibaba
Online seller liability to platform established
Top 10 civil litigation cases in 2017 in China

9. Platform ip protection challenges
11/02/2018
Platform ip protection challenges
Taobao (domestic B2C & C2C) more difficult than other platforms within Alibaba group. More lenient rules for sellers.
Grey market goods difficult to control.
Taobao first line counterclaim reviewers are now also accepting very limited evidence in counter claims such as receipts to prove legitimate source.
Sellers provide fake letters of authorization with fake chops
Sellers use ‘keywords’ instead of TMs to avoid detection and takedown.

10. Platform ip protection challenges
11/02/2018
Platform ip protection challenges
On Alibaba platforms, big and luxury brands get a lot of support.
Less famous brands get very little help – e.g less online to offline support

11. wechat Wechat- a way of life in China
11/02/2018
wechat
Wechat- a way of life in China
March 2016, Wechat set up brand protection platform
By March 2017, 350 brands registered
32000 infringing accounts were removed.

12. Challenges - wechat Challenges
11/02/2018
Challenges - wechat
Challenges
Individual accounts- have to be accepted to connection
Infringers very cautious, not like public platforms
Source only from consumers, no automatic screening by wechat
Many reports by consumers not relevant to IP rights registered.

13. Key legislative development
11/02/2018
Key legislative development
Draft of E-Commerce Law
Legislative Affairs Commission of the Standing Committee of the National People’s Congress published the draft on 27 Dec.2016 for public consultation.
Strengthen IP protection of IP online
Introduction of an inspection and monitoring obligation for platform operators- from ‘ know’ to ‘should know'
Challenges: specified guidance of the obligation for platform operators? Like screening for evidentt IPR infringement.

14. Key legislative development
11/02/2018
Key legislative development
New Anti-Unfair Competition Law ( AUCL)
Come into force as of 1 Jan.2018 ( from 1993 original AUCL)
Enforcement authority is empowered to investigate and penalize
Conduct of unfair competition. Bank accounts of infringers can be inspected.
Lowered burden of evidence of establishing UC ( e.g. from well-known commodity standard to commodity enjoying substantial influence)
Adding infringement of domain names, website names and webpages.
Stipulating statutory civil damages up to RMB 3 million( USD 0.47 million)
Challenges: implementation, especially in administrative enforcement.

15. Key legislative development
11/02/2018
Key legislative development
Trade Mark Law ( 2013)
TM application reviewing shortened to 9 months.
Strengthened TM protection.
Raising statutory damages to RMB 3 million (USD 0.48 million)
Well-known TM : case-by-case and passive recognition based on facts; prohibition of using well-known TM in promotional activities.
Keep up with the times - SAIC has just invited public opinion for a new round of amendment for the TM Law to be submitted by July 2018.

16. China ip courts/tribunal 3+15
11/02/2018
China ip courts/tribunal 3+15
In 2014, 3 IP courts established in Beijing, Shanghai and Guangzhou
Up to now, 15 IP tribunals established in 15 cities of Xi’an, Ningbo, Zhengzhou, Hangzhou, hefei,Nanjing, Tianjing,Shenzhen, Qingdao,Changsha, Chengdu, Jinan, Suzhou and Fuzhou.

17. Beijing ip court Heavy Burden on IP courts
11/02/2018
Beijing ip court
Heavy Burden on IP courts
Beijing Intermediate Court in 1993
80 IP cases
Beijing IP Court ( set up late 2014)
9,191 IP cases ( )
10,600 IP cases (2015 – 2016)
16,500 IP cases ( )

18. Some ip enforcement challenges
11/02/2018
Some ip enforcement challenges
Copyright
the current system for tackling online copyright piracy has limitations and deficiencies.
Technical investigative capability of the police
Evidentiary burden on IPR holders to demonstrate ownership of copyright
More efficiency needed in attacking online copyright piracy against parties in multiple jurisdictions

19. 11/02/2018
Any questions?

20.
Tel: