How China is cracking-down on counterfeit goods

China Brand Protection Update

Being frequently criticized as a major source of counterfeit goods, it is perhaps no wonder that the Government and online selling platforms in China appear to be stepping up their anti-counterfeiting efforts.

On Friday 31st August 2018, a new legislation was adopted by the 13th National People’s Congress in China, that will make Chinese online selling platforms jointly accountable for counterfeit goods that are sold on their sites by third parties. It will require these platforms, such as Taobao, Pinduoduo and social media channels like WeChat, to act quickly to reported IP infringements or receive a fine. This article, by CMS, China, highlights the significant provisions of the new 'E-commerce Law' and which types of e-commerce operators it applies to.

The legislation isn’t due to be implemented until January 2019, however a number of Chinese online e-commerce platforms have already reacted to previous criticism about the number of fakes found on their sites by indicating IP protection support for brand owners.

This year, when Alibaba’s online marketplace, Taobao, was put on the US Trade Representative blacklist for a second year in a row, Alibaba reacted almost immediately by announcing that their Anti-Counterfeiting Alliance; an IP Protection Program for cooperation with rights owners, had grown to over 100 members of international brands that cover 12 industries. Resulting in 247 sellers of counterfeit goods involving nearly RMB 1 billion of goods being caught and hundreds of arrests being made.

It is, however, one of the newer platforms on the scene, Pinduoduo, that has recently come under fire for selling counterfeits and replicas of branded products. Shortly after debuting on the Nasdaq stock exchange in July, China’s State Administration for Market Regulation (SAMR) said it would investigate Pinduoduo, after a number of complaints from consumers and brand owners. This also prompted SAMR to request that local market regulators crack down on illegal activities such as the sale of counterfeit goods, as any third party or company offering counterfeit goods will also be disciplined.

Pinduoduo also reacted quickly to the investigation, stating that, inside a week, it had closed 1,128 online stores and took 4.3 million counterfeit products off its shopping platform. Like Alibaba, Pinduoduo also offer an IP Protection Program, which hosts a Platform Clearance Team to handle notices of IP infringements on its platform. Other Chinese online selling platforms, such as DHGate and Tencent’s WeChat, have also set up IP Protection Programs for faster notifications and take-downs of IP infringing products.

The Chinese Government authorities and online selling platforms do appear to be stepping up in the fight against counterfeits, but there is still a very tough battle to be won. Getting to the source of the infringements is the key to making a significant difference. Meanwhile, however, registering on the Chinese platforms' IP Protection Programs is certainly not a bad idea for brand owners.

If you would like more information about the key benefits of these IP Protection Programs or how to go about registering on them, we have lots of experience in this area and would be delighted in sharing it with you. Get in touch with us today.

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