China to Step Up Enforcement Against the Online Sale of Fake and Defective Goods
The State Council Leading Group of the National Fight against IP Infringement and Manufacture and Sale of Fake and Defective Goods in the Online Environment published their Work Plan (“The Plan”) on June 18, 2014. The Plan reports that the State Council will spend half a year carrying out a special campaign to address Online Infringement and Counterfeiting starting in June 2014.
The Plan calls for the Ministry of Industry, the Ministry of Information, the State Administration of Industry and Commerce and the State Internet Information Office to focus on the following key points:
- To monitor online sales of fake and defective goods, to improve procedures for enforcement and case management, and to investigate and provide redress to punish infringing acts.
- To focus enforcement on major e-commerce websites, to screen sites and promptly delete information on infringing goods. The above departments should offer assistance to law enforcement agencies during investigation.
- The General Administration of Quality Supervision shall carry out a special enforcement campaign to intensify the centralized investigation of sources of infringing and counterfeit products sold online; strengthen the monitoring, supervision and random checking of the quality of products sold online, and strengthen the coordination of enforcement efforts between regional departments.
- The General Administration of Customs and the Post Office shall launch a special law enforcement campaign against infringing goods transported via mail or express delivery in cross-border online transactions in order to combat cross-border infringement.
This Plan emphasizes four specific supervisory measures:
a) Collaborate to strengthen enforcement;
b) Intensify the supporting role of intelligence reports in the detection of violators;
c) Strengthen social supervision and self-discipline in industry;
d) Use of information technology to enhance supervisory capability.
This Plan is express acknowledgement of the scope, severity and impact of online infringement and is intended to strengthen the enforcement of rights of intellectual property owners. Its introduction is timely and a great opportunity to make strategic use of this government initiative to reduce the volume and scope of infringing goods sold online.
Chang Tsi & Partners recommends that our clients make full use of this newly released Plan to design a strategic plan to combat online infringement. If you have any questions related to this issue, please do not hesitate to contact us.
Work Plan of the State Council Leading Group for National Fight against IP Infringements and the Manufacture and Sale of Fake and Shoddy Goods in the Online Environment
Chinese available at
To: All member units of the Leading Group for the National Fight against IP Infringement and the Manufacture and Sale of Fake and Shoddy Goods
This “Work Plan for Fighting IP Infringements and the Manufacture and Sale of Fake and Shoddy Goods in the Internet Environment” is hereby issued to you, and you are required to implement it carefully.
This work plan has been developed to implement the spirit of the “Notice of the General Office of the State Council on the Essentials of the Nationwide Fight against IP Infringements and the Manufacture and Sale of Fake and Shoddy Goods in 2014”
(Guo Fa Ban  No. 13), crack down the illegal and criminal activities of infringing IP and manufacturing and selling fake and shoddy goods in the Internet environment (collectively “Infringement & Counterfeiting”) and promote the healthy development of e---commerce.
A. Clarifying Objectives and Tasks
Starting from June 2014, we will spend half a year carrying out a special campaign to address Infringement & Counterfeiting in the Internet environment; strengthen the supervision of key websites and online marketing platforms, severely investigate and punish a number of cases, shut down a number of illegal websites and deal with a number of lawbreakers to warn and educate operators and consumers. Meanwhile, in response to the cross-regional, “dragon chain”, virtualized and intellectualized characteristics of Infringement & Counterfeiting in the Internet environment, we will innovate the modes and means of supervision, strengthen interdepartmental and cross-regional information sharing and law enforcement cooperation, enhance the resultant force of work, improve the long-term mechanism of fighting Infringement
& Counterfeiting in the Internet environment and maintain the normal order of e-commerce.
B. Highlights of Focus
(1) Cracking down on online sales of fake and shoddy goods
Relevant departments, including the Ministry of Agriculture, State Administration for Industry and Commerce (SAIC), Administration for Quality Supervision, Inspection and Quarantine (AQSIQ) and State Food and Drug Administration (SFDA), shall focus on:
—agricultural materials, auto parts, children’s products and drugs that treat cancer and chronic diseases;
—strengthening surveillance of Internet search engines;
—promptly identify information on fake and shoddy goods and the websites, web pages and various links that are suspected of illegal sales;
—improve the mechanisms for submitting information, the sharing of leads, case studies and communications.
(2) Cracking down on online infringement and piracy
Relevant departments, including the State Administration of Press, Publication, Radio, Film and Television (SARFT) and the National Internet Information Office, shall launch a special “Sword Net Campaign” against Internet infringement and piracy that focuses on:
—the key fields of online literature, music, films and TV, games, animation and software and the key products of books, AV products, electronic publications, online publications and standard copyrighted works;
—combating infringements and piracy in the field of mobile Internet and through the use of set-top boxes and TV dongles;
—punishing and banning illegal websites offering AV programs according to law. SARFT shall intensify copyright supervision of key websites and standardize order in copyright markets for works transmitted over the Internet.
The Ministry of Culture shall regulate the market for online music and games and strengthen the supervision of the online cultural products that use terminals such as mobile phones and tablet computers as carriers.
The SAIC and the State Intellectual Property Office (SIPO) shall establish mechanisms to supervise and inspect online infringements of patent and trademark rights, intensify communications with e-commerce platforms, improve working mechanism for enforcement and case handling, and promptly investigate and punish infringing acts.
(3) Intensifying the supervision of e-commerce websites
Relevant departments, including the Ministry of Industry and Information Technology (MIIT), SAIC and the National Internet Information Office shall:
—screen and promptly delete information on infringing and fake goods by focusing on large trade platforms;
—based on the records of the sites involved, screen and shut down websites that have violated laws and regulations.
—strengthen interdepartmental collaboration in the investigation and handling of unlicensed websites;
—intensify supervision and management of business conducted by Internet service providers, domain name registration service providers and information service providers;
—assist law enforcement departments in investigating and collecting evidence of Infringement & Counterfeiting.
(4) Intensifying the harnessing of production and processing sources
The AQSIQ shall carry out a special law enforcement campaign to:
—intensify the centralized harnessing of the sources of e-commerce products;
—strengthen the monitoring, supervision and random checking of the quality of products sold through e-commerce;
—promptly announce the results of random checks of product quality;
—accelerate the building of product quality tracing systems;
—improve the mechanisms of online discovery and notification of leads, source tracing, and local investigation and handling;
—strengthen the clean-up and rectification of regions with concentrated production of products that are sold through e-commerce, and launch regional quality enhancement actions;
—encourage enterprises to establish systems for assuring the quality of e-commerce products;
—promote the use of bar codes for commodities and organization codes;
—solve the problem of asymmetrical information in the online environment;
—rely on the “12365” system to establish and improve mechanisms of collaboration in anti-counterfeiting and strengthening of joint inter-regional law enforcement.
(5) Launching a special campaign for cross-border IP protection
The General Administration of Customs (GAC) and the post offices shall launch a special law enforcement campaign that targets consumer products, cosmetics and electrical products transported by mail and express delivery channels in cross-border online transactions to combat the infringing and illegal acts in the channels for import/export, mailing and express delivery.
The Ministry of Public Security (MPS) and GAC shall improve the mechanisms for multilateral/bilateral law enforcement to fight cross-border crimes of using the Internet to sell fake and shoddy goods.
C. Intensifying Supervisory Measures
(1) Collaborating in strengthening enforcement
Relevant administrative enforcement departments shall:
—combine online supervision with offline supervision, providing each other with the information on Infringement & Counterfeiting found in production, sales and import/export;
—intensify tracing of leads into Infringement & Counterfeiting;
—investigate and deal with the sources of production and processing of infringing and fake products;
—hand over or report the cases of suspected crimes or the clues thereof to the police in a timely manner;
—strengthen collaboration in inter-regional enforcement;
—improve the system for communicating leads, referring cases and assisting in investigations;
—hand over any illegal operators of online infringing and fake goods who are found to be in non-local places promptly to law enforcement department in the location thereof or the servers of their websites for investigation and follow-up;
—report any disputes over jurisdiction to higher law enforcement department for determination of jurisdiction;
—establish mechanisms for communicating and contacting with large local e-commerce enterprises and logistic enterprises, EMS (shipping) enterprises and payment (service provider) companies related to e-commerce;
—obtain information on operations, logistics and payments according to law to enhance case-handling efficiency.
(2) Intensifying the supporting role of intel reports in detection of violations
The MPS shall:
—strengthen cooperation with e-commerce platforms;
—meticulously screen clues for online Infringement & Counterfeiting and enhance the ability to identify criminal activities in the Internet environment;
—give full play to the advantages of collective campaigns;
—ferret out production dens, destroy the marketing networks; and
—crack down on the criminal activities of online Infringement & Counterfeiting throughout the entire value chain.
(3) Strengthening social supervision and the self-discipline by industry
—improve the system of rewards to incentivise reports (of infringements);
—guide consumers to report online Infringement & Counterfeiting and broaden clue sources and channels;
—improve the systems for accepting the reports on the acts of online Infringement & Counterfeiting, case handling and reporting on results;
—encourage right holders to actively safeguard their own rights;
—publish information on cases involving online Infringement & Counterfeiting and publicize typical cases to deter criminal acts and educate the general public.
Industry management departments shall give full play to the roles of industry organizations, e.g. associations and chambers of commerce, in the field of e-commerce, to impose industry self-discipline and cultivate the culture of consciously boycotting acts of Infringement & Counterfeiting in the whole industry.
(4) Using IT to enhance supervisory capability
The competent law enforcement departments shall:
—innovate the modes and means of supervision;
—use information technologies to establish a network for electronic service supervision, a database of Internet operators, a rights-safeguarding center for online consumption and reporting platforms; and
—develop and apply search engines to search for Infringement & Counterfeiting, information inquiry and monitoring software and tracing technology, enhance the level of information available for Internet surveillance and provide technical support for intensifying supervision and enforcement.
D. Establishing long-term mechanisms
(1) Promoting the improvement of laws, regulations and standards for supervision of the Internet
The Office of the Leading Group shall:
—join with other related departments in establishing long-term working mechanisms that address the characteristics of Infringement & Counterfeiting in the Internet environment and the weaknesses of supervisory efforts;
—study and provide opinions on improving the relevant laws and regulations;
—promote the release of judicial interpretations, tighten the connection between relevant laws, administrative regulations and departmental rules;
—clarify rules for trading on online platforms and stores, quality supervision, after-sale service and compensation responsibility of e-commerce platforms and online shops;
—improve evidence rules for investigating Infringement & Counterfeiting in the Internet environment and the method of protecting online business data;
—perfect the standards for displaying products online, information disclosure and product verification so as to provide case-handling safeguards through systemization.
(2) Driving the implementation of corporate responsibility.
Industry management department shall guide e-commerce enterprises in:
—improving the internal management system;
—strictly examining the qualifications of member merchants;
—registering their real names;
—strengthening the examination of information on goods sold online;
—taking the initiative to provide law enforcement departments with relevant information on operators;
—improving the mechanisms for accepting and processing reports and complaints, as well as the mechanisms for the elimination and withdrawal of illegal merchants;
—intensifying market supervision of logistics and EMS (express shipment) enterprises;
—urging EMS enterprises to strictly implement the postal inspection systems;
—studying the possibility of establishing a system of real-name postal delivery;
—guiding e-commerce payment companies, logistics enterprises and EMS enterprises in recording information, providing information inquiry services as required for law enforcement and case handling, and assisting law enforcement departments in carrying out investigations.
(3) Accelerating the building of the e-commerce credit system
Industry management departments and enforcement supervision departments shall:
—accelerate the creation of a database of e-commerce enterprises and improve credit profiles for products traded online;
—promote the exchange and sharing of credit information for e-commerce enterprises and the relevant information in other social fields;
—guide e-commerce enterprises in establishing and improving systems for management of customer credit and evaluation of trade credit;
—encourage the development of third-party e-commerce credit rating agencies, to objectively and fairly collect and record the credit of online operators, the establishment of credit evaluation system and credit information disclosure system to provide e-commerce enterprises and consumers with credit service and warn trading risks;
—strengthen the training of small and medium-sized e-commerce enterprises to facilitate strengthening of their ability to prevent and identify fakes and cause them to carry out good faith and law-abiding operations.
E. Meet work requirements
(1) Strengthening organizational leadership
All regions and leading departments shall:
—fully recognize the importance and necessity of fighting Infringement & Counterfeiting in the Internet environment;
—strengthen organization and leadership, assign responsibilities to each level;
—reinforce guidance and inspection of the grassroots;
—coordinate the handling of interdepartmental and cross-regional cases; and
—concentrate resources to investigate and deal with a number of major cases of a serious nature that draw domestic and foreign attention.
The Office of the Leading Group and relevant departments shall supervise and inspect the implementation of the fight in various places in due time.
All regions and the related departments shall:
—work out a specific implementation plan in light of their realities;
—refine work measures and make all-round arrangements before the end of June ;
—collect criminal clues extensively and conduct careful analysis and screening thereof;
—sternly investigate, deal with and expose criminal cases;
—study the promotion of relevant systems and mechanisms between July and December ;
—prepare a comprehensive summary of efforts and prepare a report to be submitted to the Office of the Leading Group before the end of December.
(3) Strengthen publicity and education
All regions and the related departments shall:
—make full use of the media, e.g., newspapers, TV, radio and press websites, to provide timely coverage of the work measures, results and typical cases for the purpose of expanding the impact and creating an atmosphere within public opinion;
—extensively popularize knowledge about distinguishing fakes;
—guide consumers and IP right holders in taking an active part, pooling the forces of entire society to jointly address Infringement & Counterfeiting in the Internet environment.