The internet has become a popular and easy channel for product distribution around the world. It has created a marketplace of more than half a billion users in China.
This is more than a third of the world’s total online population, and is still expanding. However, the internet is also used by businesses as a platform for selling counterfeit goods which infringe intellectual property rights (IP).
There are many issues that are specific to the Chinese internet retail environment that international businesses should be aware of.
Companies producing goods for the Chinese market should safeguard their business via a three-step strategy.
1. registering rights
2. monitoring e-commerce sites
3. requesting take-downs of counterfeit or infringing goods
Alibaba.com and Taobao are the main online platforms of the e-commerce giant, Alibaba Group. Alibaba.com and Taobao dominate the business-to-business (B2B) and business-to-consumer (B2C) retail platforms respectively. However, both are also being used by businesses for illegal activity. This includes trade mark violation and copyright infringement.
Registering your IP is a very important first step. IP can take around 6 months to a year to process in China.
Monitoring e-commerce sites will turn into a regular business practice soon. There is much discussion whether these sites should be responsible for policing brand infringement. It is a good idea to monitor the internet yourself. A good place to start is on Alibaba and Taobao who have 700 million users worldwide.
Requesting take-downs of counterfeit or infringing goods is only possible if the companies’ IP has been registered.
In the event that a company spots its IP being infringed, a written take-down letter can be sent to the Internet Service Provider (IPS) for review. On sites such as Taobao, this can be done through the website or AliProtect®, given the company can provide proof of IP ownership.
If these platforms provide a trusted means to certify brands and products as the real deal, Chinese consumers do and will use them. They are more discerning and affluent than ever before and want to display that by buying genuine, not fake, products. This at least should inspire some confidence in European businesses thinking about entering China via the internet. It should also reassure them that if they show the authenticity of their products, whilst monitoring for infringements, it will more often than not pay off.
• The China IPR SME Helpdesk is a European Union co-funded project that provides free, practical, business advice relating to China IPR to European SMEs. To learn about any aspect of intellectual property rights in China, including Hong Kong, Taiwan and Macao, visit our online portal. For free expert advice on China IPR for your business email your questions.