Short-form video content has been dominating the social media landscape in recent years. It is an effective medium to catch mass attention in no time. In China, the most popular platforms for short-form videos include TikTok (抖音), Kuaishou (快手), Xiaohongshu (小红书) and WeChat Video (微信视频号). Enterprises have started to take advantage of short-form videos to build their brand image and directly engage with their customers to boost sales, and at the same time these short-form video platforms become the new hot spots for IP infringement. In June 2021, the Beijing Haidian People’s Court handed down the first judgment for trademark infringement case involving the short-form video platform, TikTok (抖音), in China, and is the first case applying the Measures for the Administration of Live Streaming Marketing (for trial implementation). In this article, we will look at what happened in this landmark case and the points to take.
The French brand “AGATHA” is the plaintiff of this case who sued the first defendant Hengyu Company for conducting a livestream on its TikTok account, in which the defendant sold handbags bearing the plaintiff’s trademarks. TikTok was also sued in the same proceedings for not fulfilling its reasonable duties in handling the trademark infringement.
Although the first defendant, Hengyu, argued that they were duly authorized by a third party to the case, the plaintiff was able to adduce sufficient evidence that they had never licensed any third party to use their marks. As such, the court ruled in favor of the plaintiff in relation to the trademark infringement claim and awarded them damages of RMB 300,000 (~USD 46,550).
I. OBLIGATIONS OF THE PLATFORM
One important aspect of this case was to determine the responsibilities of the second defendant, TikTok, if any, in the context of IP infringements by its users via their platform. First, the court confirmed that even though TikTok is a short-form video platform, it also actively provides e-commerce functions, such as their “Show Window” which provides direct links to product listings where products can be bought by users, thereby rendering TikTok an “e-commerce platform” subject to the obligations mandated by the relevant Chinese e-commerce laws. Their liability will therefore be assessed on whether they have exercised reasonable care, e.g. performing audits against vendors, keeping a “blacklist” of offenders, having in place policies for IP rights protection, establishing a complaint channel and taking immediate action after receiving a complaint, etc. In this case, the court ruled that TikTok had indeed fulfilled its duty as an “e-commerce platform” when dealing with the infringement by its user.
This case brought good news to petitioners as the court confirmed that these short-form video platforms are not exempted from duties of “e-commerce platforms”, that they have to assist brand owners in IP rights enforcement on their platforms as mandated by the relevant Chinese e-commerce laws.
In practice, we also see that many similar platforms and other social-media platforms have taken extra steps in combating IP infringements. For example, Xiaohongshu has been utilizing a three-pronged strategy for detecting infringing activities on their platform: “automated interception, human review and complaint mechanism”, which resulted in nearly 30,000 counterfeit tips provided to brand owners. The platform has been making use of big data, AI and technologies such as optical character recognition (OCR) models to identify potentially infringing words that appeared in video postings.
As could be seen from the above case, brand owners should not only focus on the traditional e-commerce platforms when policing their IP portfolio in China, but they should also pay attention to other short-form video platforms and social media sites. Brand owners are recommended to implement a vigilant monitoring system covering these sites and liaise directly with these platforms to take down counterfeit accounts and videos or other types of infringing contents, so as to take advantage of their technologies and algorithms in identifying counterfeits. As long as the brand owners have secured valid IP rights in China, these platforms are usually helpful and the brand owners should utilize the platforms’ complaint system in taking prompt enforcement actions, as well as seeking cooperation with the platforms in going to Court to seek damages from larger scale infringers.