Judicial Issuance [2020] No. 32

Notice from the Supreme People's Court regarding Issuing Guiding Opinions on the Trial of Intellectual Property Civil Cases Involving e-Commerce Platforms

The High People's Courts of all provinces, autonomous regions, and municipalities directly under the Central Government, the Military Court of the People's Liberation Army, and the Production and Construction Corps Branch of the High People's Court of the Xinjiang Uygur Autonomous Region:
The Guiding Opinions of the Supreme People's Court on the Trial of Intellectual Property Civil Cases Involving e-Commerce Platforms are hereby issued to you for your conscientious compliance and implementation.
The Supreme People's Court
September 10, 2020

Guiding Opinions of the Supreme People's Court on the Trial of Intellectual Property Civil Cases Involving e-Commerce Platforms

These Guiding Opinions are developed in light of the intellectual property trial practices for the purposes of fairly hearing intellectual property civil cases involving e-commerce platforms, protecting the legitimate rights and interests of all parties in e-commerce in accordance with the law, and promoting the standardized, orderly and healthy development of e-commerce platform business activities.

1. In hearing cases of intellectual property disputes involving e-commerce platforms, the People's Court shall, under the principle of strictly protecting intellectual property rights (IPRs), punish acts of providing counterfeit, pirated and other infringing goods or services through e-commerce platforms in accordance with the law, actively encourage the parties to follow the principle of good faith and exercise their rights properly in accordance with the law, and properly handle the relationship between all the parties, such as IPR holders, e-commerce platform operators and on-platform operators.

2. In hearing cases of intellectual property disputes involving e-commerce platforms, the People's Court shall determine whether the relevant party is an e-commerce platform operator or an on-platform operator in accordance with Article 9 of the E-Commerce Law of the People's Republic of China (hereinafter referred to as the ‘E-Commerce Law').

When determining whether an e-commerce platform operator conducts self-operated business, the People's Court may consider the following factors: the “self-operating” information marked on the product sales page, the seller’s information marked on the physical product, and the seller’s information marked on the invoice and other transaction documents, etc.

3. Where an e-commerce platform operator knows or should know any infringement on IPR by an on-platform operator, it shall take necessary measures in a timely manner based on the nature of the rights, the specific circumstances and technical conditions of the infringement, as well as the prima facie evidence on the constitution of infringement and the types of service. The necessary measures taken shall follow the principle of reasonable prudence, including but not limited to deletion, blocking, disconnection of links and other removal measures. If an on-platform operator has repeatedly and deliberately infringed on IPRs, the e-commerce platform operator has the right to take measures to terminate transactions and services.

4. In accordance with the provisions of Articles 41, 42, and 43 of the E-Commerce Law, an e-commerce platform operator may develop specific implementation measures for the platform-wide notification and statement mechanism according to the type of IPRs and the characteristics of goods or services, etc. However, the relevant measures may not set unreasonable conditions or obstacles for the parties to take actions to protect their rights in accordance with the law.

5. The notice issued by an IPR holder to an e-commerce platform operator in accordance with the provisions of Article 42 of the e-Commerce Law generally includes: IPR certificate and the authentic identity information of the rights holder; information about the accused goods or services that can be accurately positioned; prima facie evidence on the constitution of infringement; and written assurance of the authenticity of the notice, etc. The notice should be in writing.
Where the notice involves patents, the e-commerce platform operator may request the IPR holder to submit a description of comparison of the technical features or the design features, patent evaluation report for utility model or design patents, and other materials.

6. The People's Court may take the following factors into account when determining whether a notice sender is "malicious" referred to in Article 42(3) of the E-Commerce Law: submitting forged or falsified certificates of rights; submitting false infringement comparison of appraisal opinions, expert opinions; sending notices while knowing that the right status is unstable; failing to timely withdraw or correct the notices while knowing that they are wrong; repeatedly submitting wrong notices, etc.
Where E-commerce platform operators or on-platform operators who file a lawsuit in the People's Court on the grounds that wrong notices or maliciously sent notices cause damage to them, the lawsuit may be heard together with IPR dispute cases  involving e-commerce platforms.

7. The statement of non-infringement submitted to an e-commerce platform operator by an on-platform operator in accordance with the provisions of Article 43 of the E-commerce Law generally includes: authentic identity information of the on-platform operator; information on goods or services that can achieve accurate positioning and require termination of necessary measures; prima facie evidence of non-infringement such as certificates of ownership and authorization; written guarantee of authenticity of the statement, etc. The statement should be in writing.
Where the statement involves patent rights, e-commerce platform operators can require on-platform operators to submit a description of the comparison of technical features or design features and other materials.

8. The People's Court may consider the following factors when determining whether an on-platform operator maliciously issues a statement: providing forged or invalid certificates of rights or authorization; making a statement which contains false information or is obviously misleading; still issuing a statement when an effective decision or administrative handling decision which determines the infringement has been attached to a notice; failing to timely withdraw or correct a statement while knowing that the content of the statement is wrong, etc.

9. Due to the urgency of the situation, where an e-commerce platform operators do not immediately take measures such as removing the product, which will irreparably damage the legitimate interests of an IPR holder, the IPR holder may apply to the People's Court for preservation measures in accordance with the provisions of Articles 100 and 101 of the Civil Procedure Law of the People's Republic of China.
Due to the urgency of the situation, where an e-commerce platform operator does not immediately restore the product link, a notice sender does not immediately withdraw the notice or stop sending notices, etc., which will irreparably damage the legitimate interests of an on-platform operator, the on-platform operator may apply to the People's Court for preservation measures in accordance with the legal provisions mentioned in the preceding paragraph.
If the application of the IPR holder or the on-platform operator complies with the law, the People's Court shall support it in accordance with the law.

10. The People's Court may consider the following factors when judging whether an e-commerce platform operator has taken reasonable measures: the prima facie evidence of infringement; the possibility of infringement establishment; the scope of influence of infringement; the specific circumstances of infringement, including whether there is malicious infringement or repeated infringement; the effectiveness of preventing the expansion of damage; the possible impact on the interests of on-platform operators; the type of services and technical conditions of the e-commerce platform.
Where an on-platform operator has evidence to prove that the patent right involved in a notice has been declared invalid by the CNIPA, the e-commerce platform operator suspends taking necessary measures based on this, and the IPR holder requests to determine that e-commerce platform operator has not taken necessary measures in a timely manner, the People's Court shall not support it.

11. If an e-commerce platform operator has any of the following circumstances, the People's Court may determine that it "should have known" the existence of the infringement:
(1) Failure to perform statutory obligations such as formulating intellectual property protection rules and reviewing the operating qualifications of on-platform operators;
     (2) Failure to review the certificates of rights of operators whose on-platform store types are marked as "flagship store" and "brand store";
     (3) Failure to take effective technical measures to filter and block links to infringing goods that contain words such as "high imitation" and "fake goods", or links to infringing goods that are put on shelves again after a complaint is established;
     (4) Other circumstances in which the duty of reasonable review and care has not been fulfilled.