Strategies to Combat Internet Sales of Counterfeit Goods

By Daniel C.K. Chow 

The proliferation of counterfeits for sale on e-commerce sites has created new and more dangerous challenges to brand owners than counterfeits sold through brick and mortar establishments. Most brand owners are currently focusing their efforts on simplifying and streamlining Notice and Takedown (“NTD”) procedures set up by ecommerce platforms to remove illegal listings. The shortcomings of these efforts are that NTDs do not directly reach the counterfeiter who remains free to conduct its illegal activities with impunity and that NTDs do not prevent delisted counterfeiters from reappearing in short order under a new fictitious name and identity. Brand owners should seek to induce China to rigorously enforce its recently enacted Electronic Commerce Law (“ECL”), which was designed by China’s lawmakers to create a “choke point” that excludes counterfeiters and other unscrupulous merchants from gaining access to online accounts. The ECL requires multiple layers of government review and approval that were designed so that they can be satisfied only by legitimate and economically viable business entities. To date, e-commerce sites in China do not strictly comply with the ECL, and U.S.-based ecommerce sites do not require any compliance whatsoever with the ECL. Rigorous enforcement of the ECL should result in preventing counterfeiters from gaining access to e-commerce sites based in China and the United States and should lead to a decrease in sales of counterfeits on the internet. 

Ohio State Legal Studies Research Paper No. 676. 52 Seton Hall Law Review 1053 (2022)