New law assigns liability to online platforms in China

On January 1, China’s new E-commerce law went into effect that provides greater protection for intellectual property rights owners.

Under the new law, providers of e-commerce platforms are required to develop intellectual property protection policies and procedures while collaborating with rights holders. More importantly, these platform providers face fines and legal liability if they fail to implement IP rights protection policies and enforces those measures.

Without a doubt, this new law will help brand owners protect their intellectual property rights in China, a jurisdiction that historically been very challenging for brand owners.

Your role and liabilities

As tempting as it may be to start enforcing on every questionable listing, site or advert, brand owners must maintain a tight brand protection program. Under China’s new law, brand owners can be liable for falsely taking down a listing or site, especially if damage was caused to the business.

Moreover, an alleged rogue seller can provide a statement of non-infringement with counterevidence to the platform. If that counterevidence proves sufficient, the platform will notify the brand owner, and the brand owner has 15 days to respond. If a brand owner doesn’t file a complaint or lawsuit in a timely fashion to further counter, the platform has the right to stop taking measures by the brand owner.

Another key point to highlight: The PRC Electronic Commerce Law began providing industry guidelines and protocols that require all vendors – spanning platforms, WeChat and even live-streaming websites – to obtain a business registration certificate and display their business license prominently. They are also required to pay taxes, provide invoices and be held responsible for the sale of fraudulent goods.

Online protection is looking up

Overall, brand owners should consider this new legislation a win that highlights a commitment the Chinese government is making towards regulating e-commerce and drawing attention to protecting intellectual property and consumers. Brand owners who follow with a structured approach to online protection can better ensure timely and accurate enforcements.

For more information about brand protection across Asia, read Best Practices for Online Protection and Effective Enforcement in China.