Issues of Trademark Infringement in E-Commerce: A Comparative Study of India, China and USA

Abstract

In e-commerce transactions due to the inseparable supports from third party service providers the joint infringement has become another hot topic in e-commerce infringement. However, there is no essential difference in the positions between online payment service providers and the third-parties in traditional payment mode. Also, the role of logistics service providers who assist the completion of goods delivery in e-commerce is no different from that in traditional economy. Therefore, a lot of problems remain focused on service providers in the area of transaction information. The paper will provide an in-depth analysis of India, China and USA to provide viable solutions.

It is a brand new problem to identify infringers in e-commerce environment. In practice, there are several ways to solve this problem; to obtain information through internet real name authentication; to obtain indirect information from internet such as the operators of relevant websites, domain name owners or information of ICP recordation; to obtain the seller information through sample purchase; and to obtained information from the ISP. The basic principle to determine jurisdictions in trademark infringement is that the local court at the place of domicile of the defendant or at the place where the infringement occurs has the jurisdiction over the case.

It is difficult to get the affirmation from the majority of courts to establish jurisdiction merely by the shipping address. However, in some cases, if the parties specified in the contract that a particular place is selected as the place of performing the contract, it is possible that such place may be deemed as the place where the sales act is taken place and the local court may have jurisdiction. If the unauthorized use of trademark relates to transaction information, plaintiff may also consider using the location of the server of the website to establish jurisdiction.

Another problem that the right owners frequently encounter in trademark enforcement is the sale of parallel imported goods in e-commerce. These goods are usually “genuine”, but are supposed to be sold in other countries. Legislation is silent on whether selling goods through parallel import and breach of contract constitute trademark infringement, the majority of courts or enforcement authorities take a reserved attitude toward this issue. The typical acts of such infringement include: selling products on e-commerce platforms which, according to the agreement, could only be sold directly; selling products on e-commerce platforms which, according to the agreement, could only be sold in a certain regional territory; and selling products (such as products of luxury brand) on e-commerce platforms which should be sold in certain circumstances selected and restricted strictly by the trademark owners.

The new Trademark Law does not stipulate whether these acts are legitimate or not. At present, trademark owners still face tough problems in their trademark protection on the internet. Due to lacking of legal basis, ISPs usually will not deal with these goods. Some cases in Europe expressly support the trademark owners, such as Copad SA v. Christian Dior couture SA. But no favorable precedent follows in India. In American Zippo v. Wang Lei, the court determined the defendant’s act constituted trademark infringement. In general, regarding the use of others’ trademarks in the decoration of online shops, courts focus on whether such use is fair and proper; whether such use will cause confusion to the public, and whether such use will cause damages to the trademark owners. Currently, some ISPs will respond by taking actions to complaints regarding these kinds of act. An act may still be deemed an infringement based on trademark dilution or unfair competition. In the case of Cartier v. Yihaodian and Mkela Company, a Chinese court has made a bold verdict favoring the trademark owner.

ISP’s joint liability in trademark infringement has been a hot issue. At present, the safe harbor doctrine and the red flag standard are still commonly-used. The conflicting issue is how to apply them, and it is always closely related to the facts of individual cases. An important recent case is Eland Company v. Du Guofia and Taobao in which a Chinese court made a verdict favoring the trademark owner. Although the nature of e-commerce under the Trademark Law is the same as traditional economy, it requires serious attention to provide well established legal environment for healthy growth and development of e-commerce.