In this article from we explore best practices for suing online sellers in China.
In this article from Carol Wang of Lusheng (strategic partner of Rouse) we explore best practices for suing online sellers in China.
Close to 30% of the total retail sales in China are made online. Because of this, online sales of counterfeits, look-alike and other infringing products are a major problem for rights-holders. Two of the biggest problems in dealing with online infringers are: 1) identifying their true identity; and 2) working out the scope and quantity of their sales. We set out below tips for dealing with these issues.
1. Contact the e-commerce platform to identify the trader. Before relying on legal remedies discussed below, it may be possible to obtain some useful information online. On some platforms, information about a trader’s identity can be found on the webpage for the trader’s store. For platforms that do not have such information online, the customer services centre may follow their own services rules and disclose a trader’s identity based on specific customer complaints. If so, information provided by the platform should include the trader’s real name, online alias, phone number and address. It is advisable to conduct a further check to make sure if the information is accurate.
2. Obtain an investigation order from the court. The information obtained voluntarily from a platform may not be sufficient to bring action or prove damages. Per rights-holders’ application during lawsuits, Chinese courts may grant an investigation order to compel a platform to disclose information such as sales data. An investigation order can be obtained setting out details of the infringement and requested information, such as the name and address of the trader and sales data for the infringing products. The court can obtain the data directly, and sometimes the court may issue the investigation order to the right-holder’s lawyers who then submit it to the platform to obtain the information ordered to be disclosed. In practice, platforms are more inclined to provide the information directly to the court after receiving the order.
3. General sales data provided by the e-commerce platform. Upon investigation order issued by court in a specific civil litigation, E-commerce platforms will provide backstage information which usually includes the following:
- order ID allocated by the platform for each purchase;
- product name;
- sales amount;
- product price; and
- purchase date.
Information about the trader’s business bank account can be provided only if the investigation order explicitly states so. Therefore, it is advisable to apply for an order that such information be provided.
4. Analyse the data to identify infringement network. Very often, traders will do business under multiple accounts using different names. The data should be analysed to identify any other accounts. This can be done by finding transactions made by the trader and searching for any transactions made on similar terms (e.g. a large sales amount, identical recipient address, same online alias). In addition, sales data from one platform may aid in finding related stores on other platforms, so it is advisable to retrieve data from various platforms and cross analyse the data for any related transactions.
The information obtained by these methods can be very useful to support a claim for substantial damages.
Written by: Carol Wang, Polly Jiang and Wenny Zhou (Lusheng, strategic partner of Rouse)