Selling fake products via the Internet is nothing new nowadays. Quite a few IPR holders have the experience of engaging law-enforcement authorities to strike the actual business location based upon online store information. Normally, law-enforcement authorities will impose penalty on the counterfeit products found in the actual business location. However, in most time, the number of products distributed via online store is far more than that in actual business location. If online sales record could be brought into penalty decision, which will intensify the power to clamp down the infringers.
How do the law-enforcement authorities deal with the online sales record of counterfeit products? According to our practical case experiences, authorities, in most of time, do not adopt the sales record in penalty decision-making. The reasons are various, such as it is impossible to confirm the authenticity of the sold products, the accuracy of the sales record and the price, etc. In terms of confirming the authenticity of the sold products, law-enforcement authorities will reach the buyers, if necessary, to investigate and collect evidence, and it is very difficult and time-consuming to carry out the investigation in reality. But every cloud has a silver lining, and there are some individual cases which successfully bring the online sales record into penalty. Today we would like to share such a case handled by our company.

  1. Recap of the case

 

 Right owner  A Japanese stationery manufacturer
 

 Target product

  Pen
Law enforcement department
 An AIC in Zhengzhou
Target
 Alibaba online store and physical store
Target detail
 The shop owner lived at a civil residence in Zhengzhou City, and operated his/her online store in the same room. The counterfeiting products were kept in the same room too.
Investigate Date
 2014-5-14
Spotted quantity
 Inventory Quantity： 2,670 pens（Among which，the infringer initiatively called back 30 pens already sold out. ）
Online sales record：2782 pens
Punishment decision
 1、 Confiscate the counterfeiting pens
2、 Imposed a fine of 10,000 yuan
Special Notes
 AIC counted the online sales amount into the illegal transaction amount, and ordered the infringer to delete the infringing links of the online store.
  1. Analysis

    According to our analysis, the main reason that leads to the identification of the online store sales record as illegal transaction amount by the law enforcement department is like follows:

    1. Investigation stage：BOB investigator paid attention to collect internet information, and grasped the infringing details of the two online stores on Alibaba operated by the infringer.
    2. Complain stage：The infringing links (including the sales records) were attached in the complain letter to the AIC, and BOB’s law enforcement officer also emphasized to the AIC the target’s behavior of selling counterfeit online and asked for a penalty against this behavior, as well as an order to delete the infringing links.
    3. AIC raid action stage：2,670 pens were seized and identified as fake on site. The infringer admitted his behavior of selling the counterfeits online. As requested by the right owner, AIC ordered the infringer to delete the links of the counterfeiting merchandise immediately.
    4. AIC handling stage：BOB’s law enforcement staff followed up with the AIC periodically on the case, urged AIC to make penalty decision based on the confiscated counterfeiting products and the sales record of the online store.

    III. Conclusion
    In order to facilitate the law enforcement department’s penalty decision on the sales record of the online store, the conscious pushing by the right owner or its agent of the case during the investigation, raid, and follow-up stages is very important. Besides, the admission of the infringer is also a contributing factor to the identification of the online sales record as an object of punishment.

 

 

Author: Yu Yehua(俞晔华)
Client Service Department /IPR protection Division,
BOB Intellectual Property Service Ltd.
2014-11-04