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March 24, 2011

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Taobao in appeal over sale of counterfeit items

TAOBAO.COM, a popular e-commerce platform, appealed yesterday against a verdict that it should pay compensation of 10,000 yuan (US$1,524) along with a vendor on its Website for selling counterfeits.

Taobao argued it had taken quick measures to protect the intellectual property rights of Yinian (Shanghai) Garment Trade Co Ltd and shouldn't be held responsible.

Though the amount is small, the verdict indicates Taobao may bear responsibility for counterfeit goods sold on its platform along with the vendors. Total compensation would be huge if more IPR owners sue, lawyers said.

Yinian said it found in 2009 that Du Guofa, a seller registered on Taobao, sold clothes with its Teenie Weenie trademark, but at prices up to 10 times lower than its goods.

Yinian sent seven letters to Taobao asking to delete Du's information on the clothes.

Taobao deleted the information but didn't take further steps, such as checking before the information appeared on the Website, shielding the seller's shop and freezing the Du's account. As a result, Du continued to issue information on counterfeits on the website, Yinian said.

Taobao said no further punishment was justified because it had no evidence.

Yinian then sued Du and Taobao, asking for 84,900 yuan in compensation.

Taobao argued it had deleted infringing information after getting the complaints.

The Pudong New Area People's Court ruled in the initial trial that Taobao had failed to take more steps such as shielding Du's shop, required under its IPR protection clauses, after receiving complaints against Du.

Shanghai No. 1 Intermediate People's Court didn't give a ruling yesterday.


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