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Intellectual Property Protection on E-Commerce Platforms: New Legal Initiatives
 
PIIS278229070031785-9-1
DOI10.18254/S278229070031785-9
Publication type Article
Status Approved
Authors
Xue Hong 
Affiliation: Beijing Normal University
Address: China, Beijing
Abstract

E-commerce platforms that provide the virtual marketplace play a crucial role in digital trade. They can not only cultivate new brands in trade but also provide effective protection for intellectual property rights. Legal reforms are happening in multiple dimensions to optimize platform intellectual property measures. The Chinese law requires that platform operators proactively engage with intellectual property right holders in the development of platform rules and cooperate with all the stakeholders in enforcement of these rules. EU laws, on the other hand, delegate very large platforms to affirmatively decide whether right holders’ notices against on-platform operators’ infringing activities are sufficiently substantiated and whether to act upon them. The notice-and-takedown model that had been integrated into the platform liability system is shifting gradually to a progressive and comprehensive platform governance mechanism that may keep appropriate balance among different stakeholder groups. Platforms are legally required to conduct due process to protect the legitimate interests of both intellectual property right holders and businesses on the platform. The legal reforms strengthen platform’s legal obligations and intensify legal review of platform governance. Platform alternative dispute resolution (ADR) mechanisms that provide on-platform operators an appeal process against the platforms’ measures taken against them also provide an important safeguard to the legitimate rights and interests of on-platform operators.

KeywordsE-commerce platform, intellectual property, platform rules, governance, ADR
Received26.07.2024
Number of characters23484
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Table of contents

INTRODUCTION
PLATFORM COLLABORATIVE GOVERNANCE
A NEW MODEL OF INTELLECTUAL PROPERTY PROTECTION ON PLATFORM
CONCLUSION
1

INTRODUCTION
2 A large proportion of cross-border e-commerce is conducted through digital platforms, which provide enterprises with fast and efficient online channels to integrate offline resources, promote brand upgrading, build independent brands for overseas markets, and establish brand reputation.
3 Cross-border e-commerce lowers the threshold for enterprises to do international trade, and provides a new path for them to find business opportunities and creates branding. Platforms are helping Small and Medium-Size Enterprises (SMEs) to cultivate brands in cross-border e-commerce. For example, TEMU, the cross-border arm of Pinduoduo, has rolled out the “DuoDuo Overseas Brand Supportive Program”, championing the overseas venture of 100 manufacturing brands in its inaugural phase. TEMU’s footprint has spread across over 100 manufacturing hubs situated in Guangdong, Zhejiang, Shandong, Anhui, and beyond, aiding the foray of high-caliber manufacturing products into more than 40 countries spanning North America, Australia, Europe, and Asia. This is accomplished through a suite of comprehensive services encapsulating contract fulfillment, brand incubation, logistics backing, legal support, and resource subsidies. TEMU helps Chinese manufacturing entities embark on a rejuvenated pathway overseas. Backed by TEMU's holistic overseas solution, best-selling products ranging from children's attire from Zhili, Zhejiang Province; daily essentials from Yiwu, Zhejiang Province; electronic gadgets from the Pearl River Delta to thermal insulation cups from Jinhua, Zhejiang Province; are leveraging cutting-edge technologies to effectively dismantle trade and logistics hurdles, broadening the overseas sales spectrum of their high-quality products.
4 H2O Limited is another example, which builds a cross-border e-commerce platform for building digital brands in the Japanese consumer market. Join Digital Group (JDG), on the other hand, uses social media platforms such as Facebook and Join Chat for brand communications, building a global marketing matrix, and carrying out differentiated and localized marketing campaigns during Christmas and New Year holidays, which has attracted the participation of millions of fans and effectively enhanced brand awareness and user interaction.
5 Intellectual property rights protection on platform is developing towards a comprehensive system with preventive measures, in-process governance, and post-event mechanism.
6

PLATFORM COLLABORATIVE GOVERNANCE
7 The Chinese E-Commerce Law, implemented from January 2019, requires all e-commerce businesses, including platform operators, on-platform operators and independent operators, to protect intellectual property rights according to the Chinese Copyright Law, Trademark Law, Patent Law and other relevant laws and regulations. With respect to platform operators, that provide virtual marketplace to enable a large number of on-platform operators to do business online, the E-Commerce Law establishes the additional mechanism for intellectual property protection, which consists of three interrelated parts: rules, measures, and liabilities.
8

(i) Platform rules

Large digital platforms’ policies can directly define the business models of their users and affect the value chain of the relevant sector of the digital economy. Apple’s charge of 30% of the commission on every purchase in its App Store operating on more than 1 billion iPhones around the world had been in the media spotlight because of the case with Epic Games. Apple’s so-called “Apple Tax” and payment exclusivity policies showcase digital platforms’ governance powers within their own systems (Fu et al. 2021).
9 Platform governance and policies have been recognized in law. The 2019 Chinese E-Commerce Law requires the e-commerce platform operators set out the rules on the users’ rights and obligations in respect of joining and quitting the platform, consumer protection, personal information protection, etc. These platform rules, through contracting into the service agreements, become binding to the on-platform operators. The platform operators are specifically required to formulate the rules for the protection of intellectual property rights in cooperation with the intellectual property right holders.
10 Platform intellectual property protection rules should be made based on a general consensus of the right holders. When formulating or modifying the intellectual property protection rules, the platform operator shall take reasonable measures to ensure that not only the intellectual property right holders on the platforms but the other right holders outside the platform can fully express their opinions in a timely manner.
11 Platforms should guarantee that all relevant intellectual property rights holders (both on and out of the platform) participate in the platform's intellectual property rights prevention and governance activities, so that they can speak on the governance and rules of the platform. Many intellectual property rights holders, though not becoming operators within the platform, have joined the specialized intellectual property protection schemes on the platform. These schemes provide necessary information to the platform, so as to facilitate the platform to prevent, avoid or timely stop and penalize intellectual property rights infringement on the platform in accordance with these rules. 
1. Fu, X., E. Avenyo, and  P. Ghauri. 2021. Digital platforms and development: a survey of the literature. Innovation and Development 11(2–3): 303–321. https://doi.org/10.1080/2157930X.2021.1975361 
2. Gabison G.A., and M.C. Buiten. 2020. Platform Liability in Copyright Enforcement. Science and Technology Law Review 21(2): 237–280. https://doi.org/10.7916/stlr.v21i2.6834 
3. Jütte, B. J. 2020. Digital Copyright: Law and Practice. Journal of Intellectual Property Law & Practice 15(5): 405–406. https://doi.org/10.1093/jiplp/jpaa054 
4. Quintais, J.P., G. De Gregorio, and J.C. Magalhães. 2023. How platforms govern users’ copyright-protected content: Exploring the power of private ordering and its implications. Computer Law & Security Review 48: 105792. https://doi.org/10.1016/j.clsr.2023.105792 
5. Stähler, F., and L. Stähler. 2022. Copyright Protection in the Digital Single Market: Potential Consequences for Content Platform Competition. Review of Industrial Organization 61: 73–94. https://doi.org/10.1007/s11151-022-09866-x

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