E-commerce platforms can carry a threat to IP rights holders, but may also offer quick ways to challenge a counterfeit listing. What options are open to rights holders to strengthen their position?

As many businesses and their solicitors will be all too aware, enforcing IP rights against an infringer can be prohibitively expensive, laborious and, in some cases, ineffective. However, online platforms offer quick and relatively easy to use ways of removing counterfeit listings. This is even more valuable around key calendar sales dates, allowing counterfeits to be taken down just before an important calendar event.

All of the main forms of unregistered and registered IP rights (trade marks, patents, registered and unregistered design rights, and copyright) can be used for online takedowns of counterfeit listings. Registered designs and trade marks typically have higher success rates, due to the combination of ease of visual comparison and being a registered form of IP.

The process is far from consistent. Typically, the infringing article is compared visually against the IP right, and the decision is made as to whether or not the listing should be taken down. Listings can be taken down en masse, using a prima facie infringement review. This of course drastically reduces the time, effort and cost of the takedown, but businesses should be cautious. The other edge of the sword is that the infringer can equally make use of the takedown process themselves, often with disastrous consequences. Furthermore, any request for a takedown carries with it a risk of action from the infringer to seek recourse.

Some of the issues that prevent businesses achieving a takedown include trade marks being registered in the wrong class of goods and services, IP registered in a different territory, or a third party having registered their IP first. Furthermore, if both parties have registered IP, it can be difficult for an online platform to reach a decision, as it appears to the platform that both parties have valid IP, and they do not have the expertise to reach an informed decision.

However, some platforms, such as Amazon, are more sophisticated in how they assess IP. Amazon has a program for assessing patent infringement (the Neutral Patent Evaluation). In an evaluation, a neutral evaluator will assess whether the listing infringes a patent. If the evaluator finds that the listing is likely to infringe, Amazon will remove that product from the platform. Both the business requesting the removal of the listing and the infringer must pay for the cost of evaluation, with the successful party being refunded. Where sellers (alleged infringers) choose not to participate in the evaluation, the listings will be removed at no cost to either party. The expectation is that, given the cost and potential risk, many will choose not to participate. Listings are removed around 21 days from the owner’s initial submission.

The Chinese angle

Many businesses have concerns that enforcing IP in China is challenging. Given the powerful nature of registered IP for online takedowns, businesses should consider putting IP in place in China, even if the sole purpose of the IP is to effect takedowns. Given the relative ease with which Chinese design patents, and utility models (a patent with a shorter term) can be obtained, it is essential to monitor competitors’ IP rights and consider challenging their IP to then make takedowns easier.

Regarding prior art as evidence of potential invalidity, Chinese patent applications or patents may carry more weight with the Chinese courts or the Patent Office than other forms of evidence, because (a) they are written in the local language, and (b) their date of publication is accepted at face value. Therefore, obtaining registered rights in China can offer businesses a quicker route to IP enforcement, by being used as evidence of prior art to invalidate an infringer’s IP, and being used to effect a takedown.

Registered Chinese rights, such as patent applications, can be used as evidence of copyright. Using the patent application in this way means that (a) the patent does not need to be granted to enforce it, and (b) it is easier for the platform to do a visual comparison of the images in the patent application against the infringing product.

Some e-commerce platforms are deemed to be international platforms, and as such it may be possible to use IP rights in one territory to effect a takedown, despite the listing relating to another territory. For example, it may be possible to use a UK/EU registered design right to take down a listing that is for sale in China, because it is on an international platform.

Improving the position

Trade marks

Adding territories to existing rights should be considered, where possible, or applying for separate protection where the word and/or logo marks are not currently registered.

Seeking to register a 3D trade mark in territories where there is no registered, or unregistered design protection, may assist with online takedowns in instances where the counterfeiter has not used the brand itself. Where this is achievable, it may be a useful alternative in territories where valid registered design protection is not an option due to an earlier disclosure. With a 3D trade mark, earlier use is usually a benefit as it can assist in overcoming an objection that the shape itself is not sufficiently distinctive.

It is important to note that not all shapes can be registered as trade marks, and there are some restrictions to what can and cannot be registered. For example, if an examiner considered that the shape of the 3D mark was entirely functional or resulting from the nature of the product itself, they might raise an objection to the registration. One further restriction would be that the list of goods included in the application would, in most territories, have to be restricted to the product itself, so it may be unlikely to obtain protection for a broad list of goods, or for any services, with a 3D mark.

Designs

Registered designs should be put in place. If it is not possible to register designs, consider modifying current products to allow new registered design rights to be obtained, and new unregistered design rights to be created.

Confirmation of unregistered design right should be obtained in each territory, where possible, and documented.

Registered designs can be used to effect online takedowns on at least some of the main e-commerce platforms. Interestingly, while copyright or trade marks are used in some cases to have image(s) removed from a listing, in some instances a registered design is more likely to result in the entire listing being taken down.

In order to enforce a Chinese design patent, it is necessary to obtain an evaluation report. It is best to request it routinely as part of the registration process and before enforcing Chinese design rights.

Patents

Patent applications should be put in place, and if a product is already in the public domain, consider modifying the product to allow new patent rights to be obtained.

Copyright

Maintain good records and accessibility of copyright so that it can be used to effect a takedown quickly.

Copyright is, in some cases, the most useful IP right for effecting online takedowns, and it is not necessary to register copyright in order to use it in this way. It is, however, important to document copyright should it be needed to effect a takedown. Therefore, we recommend that all technical documentation, photographs, etc relating to a product, including trade marks, are up to date and easily accessible.

Copyright can be particularly useful if a third party uses generic wording on a product, if it can be shown that you potentially own the copyright in the generic wording.

Conclusion

If businesses are active on e-commerce platforms, they should be made aware of what IP rights they currently have, and encouraged to document their IP in a way that makes it easier to enable online enforcement to be actioned quickly and effectively. Registered forms of IP, particularly trade marks, registered designs and patents, should be put in place to strengthen online enforcement options and in view of their defensive effect against retaliatory takedown attempts. Businesses should consider modifying the function and/or appearance of products where it is practical to do so, as this will potentially allow new valid IP rights to be obtained. Registered IP, whilst being enforceable in the traditional sense, should be considered even when the only purpose of the IP is for removing online counterfeit listings.

The Author

Dr Chris Martin is a registered patent attorney with Lawrie IP, Glasgow, which advises on IP matters across a range of industry sectors

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