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China’s new e-commerce law and IP protections

China recently adopted its e-commerce law. Its purported aim is to protect intellectual property rights as well as personal information. Those e-commerce operators that fail to fulfill their “duties to protect consumers” face significant financial penalties. This particularly applies to operators who fail to take steps to prevent intellectual property right infringement.

It is an ambitious undertaking for the Chinese government to hope that such a law can regulate and control e-commerce. Officials also hope to somehow promote more use of e-commerce in the country. How successful the law will be at preventing IP infringement remains to be seen.

The obligations the new law places on operators and IP owners

The e-commerce law will govern three sorts of operators including platform operators, operators on a particular platform, and those operators engaging in business-related activities. These operators must comply with a number of laws and ethical concerns.

Operators must find means to disclose reasons for personal data collection. They must also reveal what use they propose concerning this personal data.

Finally, they will need to reveal methods for collection and storage of the data. There should not be any transference of data to a third party without consent. The data must remain confidential and safe.

Some suggest the final version of the law does not punish operators as severely for infringement as in earlier drafts. The final draft appears to make it more difficult for victims of infringement to establish liability and seek an equitable remedy. Importantly, the law impacts more than just operators. IP owners may face possible liability for presumed infractions as well.

All intellectual property disputes involving infringement contain a number of complexities. This is particularly true when dealing with infringements involving Chinese law.

Attorneys with familiarity with Chinese intellectual property practices can assist those hoping to gain protection from infringement. This includes protection of profits one hopes to acquire through the intellectual property they own. These attorneys can also advise on the practicality and costs of protecting against infringement.

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