China has recently introduced a new e-commerce law which, amongst other things, will implement tougher requirements for e-commerce platform operators to deal with IP rights infringements, such as the sale of counterfeit goods, on their websites. This is a welcome change in a landscape where China has always been a challenging jurisdiction for brand owners in which to enforce their IP rights and get infringing products removed from sale online.
The new law requires e-commerce operators, such as AliBaba or WeChat, to “establish rules to protect intellectual property rights” and to take prompt action, when notified of an infringement, to remove infringing material. If they do not do so, e-commerce operators will be jointly liable with the primary wrongdoers for any infringement.
Failure to comply with the new law could also result in fines for e-commerce operators between 50,000 – 5,000,000 Chinese Yuan (approximately £5,500 – £55,500), with serious violations resulting in fines of up to 2 million Chinese Yuan (approximately £225,000).
The new law will come into force on 1 January 2019. Whilst it is a positive development, we will have to wait and see whether this will bring about a change in attitude of Chinese e-commerce operators when they receive notifications of infringements on their websites, and how strictly this new law will be enforced.