Intellectual Property and Commercial Court Defines Criteria for Determining Whether E-commerce Platforms Liable for Online Sellers’ Trademark Infringement
Whether an e-commerce platform should bear joint and several liability with the platform sellers in accordance with the Trademark Act and the Civil Code for a trademark infringement act of sellers selling trademark-infringing products on the platform, or whether it has violated the Trademark Act and then must undertake separate infringement liabilities, is a matter of practical importance and a controversial issue. The Intellectual Property and Commercial Court proposed identification standards for a specific civil tort damage compensation case in 2021.
The Intellectual Property and Commercial Court clarified the current situation of online commodity marketing. Due to the rapid development of mobile communication and network technology, the transaction type has developed from the traditional brick-and-mortar storefront, mail order, direct sales, and TV shopping to the 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 charging sellers advertising fees. Store sellers conduct transactions directly. As to the so-called B2B2C, suppliers provide goods and sell goods directly to consumers through platforms and services provided by platform providers, and the platform charges handling fees or advertising fees. The so-called B2C (business-to-customer) refers to enterprises in the business model of direct-to-consumer transactions. The supplier supplies the enterprise and the enterprise helps the supplier display the goods and sells it to the consumer, and then the supplier shares the product with the enterprise by splitting the revenue with the enterprise. The so-called B2B (business-to-business) refers to the trading platform between enterprises. Due to the emergence of the Internet, various enterprises are connected with the upstream and downstream, which makes the exchange of information more convenient, the supply chain can be better integrated. The model has also become more convenient and transparent. Through the B2B e-commerce platform, enterprises can find the upstream and downstream products more easily and stably.
Based on the foregoing, the Intellectual Property and Commercial Courts concluded that whether the e-commerce platform should be jointly and severally liable for damages for the direct infringer’s sale of related trademark-infringing goods should depend on the e-commerce transaction model adopted, the degree of intervention in the sales behavior, the degree of attention to whether the damage can be foreseen or avoided so as to judge whether it has violated the due diligence obligation under the Civil Code and the Trademark Act.
The Intellectual Property and Commercial Court reviewed the facts of the case and determined that the e-commerce transaction model between some e-commerce platform companies and platform sellers was B2B2C, while the e-commerce transaction model between some e-commerce platform companies and platform sellers was C2C. None of these e-commerce platform companies have intervened in the sales activities between the platform sellers and consumers, nor have they intervened and participated in the product pages published by the sellers. It is objectively difficult to know whether they are infringing others by browsing the product pages published by the sellers. They have clearly informed the sellers not to publish and sell infringing products that infringe on the intellectual property rights of third parties, and provide a mechanism for the right owner to report so as to avoid all situations such as the occurrence and expansion of damage. The e-commerce platform companies should have performed their duty of care, and it is difficult to recognize any intentional or negligent infringement of trademark rights, and it is decided that such e-commerce platform companies do not need to be jointly and severally liable for damages with the sellers.