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      E-commerce MOU signed in the Philippines

      Published on 15 Mar 2021 | 4 min read
      Accessible products come with equally rising chances of purchasing products which violate IP rights.

      In an ever-evolving world, it is no surprise that modern technology provides relief and convenience in accomplishing daily tasks and acts of leisure through a simple flick of a finger. While the benefits of these technologies expand our access to the world, the danger of this “convenience” looms in the dark. As the use of online shopping is becoming a norm, our selection of easy purchasable products in the market also expands. The increasing variety of accessible products come with equally rising chances of purchasing products that are in violation of intellectual property rights.

      In the Philippines, eCommerce platforms have provided many Filipinos the comfort of conveniently shopping for their daily needs, or products of leisure.

      Counterfeiting  opportunities due to the pandemic

      The year 2020 brought unexpected economic standstill and physical restrictions all around the world. Lockdowns, as an effect of the Covid-19 pandemic, restricted people from continuing the enjoyment of casual strolling and shopping. Unsurprisingly, the situation resulted in the rise of online purchases through eCommerce platforms Lazada and Shopee and through social media platforms such as Facebook. While flagship stores of reputable brands flourish in the eCommerce platforms, these are mixed with products posted online by other sellers. The eCommerce platforms play positive roles in the market, i.e., to support small businesses and to provide an avenue for individuals to earn extra income.

      However, the flip side is that the convenience offered by eCommerce platforms are open to abuse by unscrupulous sellers, including those who sell counterfeit or pirated products.The Intellectual Property Office of the Philippines (IPOPHL) recorded a surge of 121 intellectual property rights violation, 90% of which were sold and marketed online through the use of: Facebook (61%), unpopular websites (13%) Shopee (12%), Lazada (7%) and Youtube (2%).[1]

      Challenges in using eCommerce platforms

      Products available and sold online are not entirely monitored and regulated by local authorities such as the Department of Trade and Industry (DTI). While there are verified shops and seller accounts in these virtual platforms, creating a virtually anonymous seller account can be easily done. . Anyone who wants to be anonymous can stay anonymous in eCommerce platforms. Further, while eCommerce platforms publish policies that prohibit the sale of “potentially infringing items,” IP infringing products are still posted online and reach the consumers.[2]  

      Another factor to consider is that Philippine laws and regulations are yet to be updated to keep up with eCommerce  trends. The Philippine House of Representatives approved House Bill No. 7805 or the Internet Transactions Act to regulate transactions made through online platforms.[3] However, a version of the said bill is still pending before the Senate of the Philippines and still has to go through legislative processes before it becomes law.

      The buying experience has also changed with the shift in the use of eCommerce platforms. Consumer protection policies and regulations have to be responsive to the issues encountered by the consumers online.

      Bridging the gap

      One step to address the challenges mentioned above is to curtail the sale of counterfeit goods and pirated goods. Rouse, through its Philippine partner Baranda & Associates, pursuant to a project of the UK Embassy, and with the assistance of the Intellectual Property Office of the Philippines (IPOPHL) and the DTI, coordinated the preparation and signing of a Memorandum of Understanding (MoU) between e-commerce platforms, such as Lazada and Shopee, and brand owners, such as Unilever Philippines, Inc., GlaxoSmithKline Consumer Healthcare Philippines, Inc., GlaxoSmithKline Philippines, Inc., Globe Telecom, Inc., Castrol Ltd., Solar Pictures, Inc., the Philippine Retailers Association, and the American Chamber of Commerce of the Philippines. A virtual signing ceremony held  on March 1, 2021. IPOPHL Director General (DG) Rowel S. Barba stated that “This MoU establishes a code of practice among online marketplaces, as well as an efficient notice and takedown procedure, to intensify our fight against the sale of counterfeit and pirated goods over the internet. This is especially crucial with counterfeit and piracy complaints and reports surging to a record-high last year.”  [4]

      The MoU provides that eCommerce platforms will implement a notice and takedown (NTD) system that will be used by the rights owners to remove contents in eCommerce platforms that are in violation of intellectual property rights. Through the rights owner’s use of the NTD procedure, online platforms agree to remove any ad, post, or offer which is deemed to be in violation of a brand owner’s intellectual property rights.[5] More importantly, to address the anonymity issue, online platforms have agreed to include among the onboarding requirements for merchants the submission of a valid government-issued ID/

      Looking into the future

      The signing of the MoU can be seen as a vital step in further strengthening the foundations of IPR protection in the Philippines and opening avenues to make IPR enforcement responsive to the changes in the digital world.

       

      [1] https://www.ipophil.gov.ph/news/reports-complaints-against-piracy-counterfeiting-surge-in-2020-amid-covid-19-disruption/

      [2] See https://shopee.ph/docs/3594 and https://sellercenter.lazada.com.ph/seller/helpcenter/intellectual-property-rights-policy-5579.html

      [3] https://www.dti.gov.ph/archives/news-archives/proposed-internet-transactions-act/

       

      [4] https://www.ipophil.gov.ph/news/lazada-shopee-and-ip-right-holders-band-together-in-fight-vs-rising-online-counterfeiting-piracy/

      [5] Id

       

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      Partner, Principal and Country Manager
      +63 2 403 1686