Intellectual Property and Trade Tribunal Sets Criteria for Determining Whether E-Commerce Platforms Liable for Trademark Infringement by Online Sellers

If an e-commerce platform shall bear joint and several liability with the sellers of the platform according to the trademark law and the civil code for an act of trademark infringement of the sellers selling products infringing the trademark on the platform, or whether it has violated trademark law and then has to bear separate responsibilities for infringement, is a matter of practical importance and a contentious issue. The Intellectual Property and Commercial Court has proposed identification standards for a specific civil damages compensation case in 2021.

The Intellectual Property and Commercial Court has clarified the current situation of the online marketing of basic products. Due to the rapid development of mobile communication and network technology, the type of transaction has changed from traditional shopping window, mail order, direct sales and TV shopping to e-commerce transaction mode. In terms of e-commerce transaction models, there are roughly four categories: (1) Consumer-to-consumer (C2C); (2) Business to business to customer (B2B2C); (3) Business to Customer (B2C); (4) Business to business (B2B).

The so-called C2C (customer to customer) refers to the fact that e-commerce providers are responsible for providing platform and transaction services by managing confluence information, matching each transaction and charging fees , or by charging advertising fees to sellers. In-store sales associates carry out the transactions directly. With regard to the so-called B2B2C, suppliers provide goods and sell goods directly to consumers through platforms and services provided by platform suppliers, and the platform charges processing fees or advertising fees. The so-called B2C (business-to-customer) refers to companies in the business model of direct-to-consumer transactions. The supplier supplies the business and the business helps the supplier to present the goods and sell them to the consumer, then the supplier shares the product with the business by sharing the revenue with the business. The so-called B2B (business-to-business) refers to the business platform between businesses. Due to the emergence of the Internet, various enterprises are connected upstream and downstream, which makes information exchange more convenient, the supply chain can be better integrated. The model has also become more convenient and transparent. Through the B2B e-commerce platform, companies can find the upstream and downstream products more easily and stably.

Based on the above, the intellectual property and commercial courts have concluded that the question of whether the e-commerce platform should be jointly and severally liable for damages for the sale by the direct infringer of brand-infringing related goods should depend on the e-commerce transaction model adopted, the degree of intervention in selling behavior, the degree of attention paid to the possibility of foreseeing or avoiding the harm in order to judge whether he has violated the duty of care due under the Civil Code and the Trademark Law.

The Intellectual Property and Trade Tribunal reviewed the facts of the case and determined that the e-commerce transaction model between certain e-commerce platform companies and platform sellers was B2B2C, while the transaction model e-commerce between some e-commerce platform companies and sellers platform was C2C. None of these e-commerce platform companies have intervened in the sales activities between the sellers of the platform and consumers, nor have they intervened and participated in the product pages published by the sellers. It is objectively difficult to know if they harm others by browsing the product pages published by the sellers. They have clearly instructed sellers not to post and sell counterfeit products that infringe the intellectual property rights of third parties, and provide a mechanism for the right holder to report in order to avoid all situations such as the occurrence and extension of damage. The e-commerce platform companies should have carried out their duty of care, and it is difficult to recognize any intentional or negligent infringement of trademark rights, and it is decided that these e-commerce platform companies electronics do not need to be jointly and severally liable for damages with the sellers.

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