Chinese consumers bought $1.5 trillion worth of goods through e-commerce in 2019, making them the world’s most enthusiastic online shoppers.
The sheer scale of operations also means that China’s e-commerce companies are among the most sophisticated and incentivized in the world when it comes to designing systems and processes to foil counterfeiters.
China has made significant efforts to combat the trade in counterfeits, and some companies there have done more than any in tackling the challenge, according to Mark Cohen, Senior Fellow and Director of the Berkley Center for Law & Technology’s Asia IP Project at the University of California Berkeley’s School of Law.
“This is a pretty tough area. It demands, in many cases, great technological resources and commitments, and I think China is generally showing a lot of those commitments. I hear people increasingly praising some of the Chinese e-tailers from the steps they’re taking,” said Cohen, who served as the senior IP attaché at the U.S. embassy in Beijing from 2004-08 and is viewed by many as the U.S.’s leading expert on IP law in China.
“It’s going to be hard to criticize China because frankly, some U.S. companies can also do a better job,” he said.
His comments, and others by leading experts in the field of intellectual property rights protection, were part of the “IP Protection: Prospects, Challenges and Best Practices in China’s Highly Competitive E-Commerce Industry” report published recently by Pinduoduo.
Indeed, many observers today feel that China’s key e-commerce platforms are leading in protecting IP rights.
“A lot of the trade association representatives said to us that Chinese e-commerce platforms are actually leading the industry in combating counterfeits, in terms of innovation and technology,” said Andre Zhu, general counsel of Pinduoduo. “We want to share our insights and best practices, as well as the challenges and hurdles we face, with other stakeholders and hopefully that generates further discussions on this very important topic.”
IP lawyer Bo Yu is a partner at LexField Law, and chairs INTA’s China subcommittee within its Anticounterfeiting Committee. Speaking in his LexField Law capacity, Bo Yu said brand owners operating in China know matters have improved — though those with no experience in China would likely be negatively influenced by news stories that talk about a lack of IP protection.
“But if you talk to the big companies who have been operating and developing for the past years in China, they will probably have a different perspective — because they know that everyone’s working hard to address these issues, to improve on that,” Bo Yu said.
To be sure, more can be done in areas such as cooperation between platforms to shut out criminals, particularly on social media.
Going forward, the increasing popularity of social media platforms could pose new challenges for the e-commerce industry. The International Trademark Association (INTA) has pointed out that the sale of fakes through social media platforms is a growing problem. Clicking on a targeted advertisement can send users to websites that appear to offer legitimate goods, but that sells fakes.
The increasing use of livestreaming and short video makes such activity harder to police and offers a smaller window in which to monitor and act, the report noted.
“I haven’t seen good cross-platform cooperation,” said Nora Zhang, Deputy Director, Business Environment & IP at the China-Britain Business Council. “Criminal gangs are selling counterfeits over different social media platforms, not just one. If e-commerce platforms and social media platforms can be more united — share data and blacklist — it would be very helpful to us rights holders.”
To download the IP protection white paper, click here.