Most every ecommerce company owns intellectual property — photos, product descriptions, logos, brand names, designs. Many online companies have experienced the theft of their intellectual property from other websites, often in other countries.
Alibaba.com, the China-based global marketplace, combats intellectual property theft on its website through vigorous internal policing and cooperation with governments, among other steps. David Ho, an in-house attorney for Alibaba, puts it this way, “Our position is very clear: We do not tolerate any intellectual property theft; we simply do not allow it.”
Ho is a legal counsel at Alibaba.com Limited, responsible for managing intellectual property and litigation matters. He has years of experience in intellectual property enforcement. He has represented Fortune 500 and multinational companies in trademark and patent infringement litigations, domain name dispute arbitrations, as well as administrative raid actions in China.
We recently spoke with David Ho.
Practical Ecommerce: We are here to discuss intellectual property theft online. What is intellectual property?
David Ho: “Intellectual property is very broad. It covers many things. It relates to creations of the mind — for example in fashion, artistic works, symbols, and names — and images that are used in commerce for our everyday purposes in commerce. There are three main types of intellectual properties: trademarks, copyrights, and patents. There are two main types of trademarks. There are word marks — for example ‘Coca-Cola’ and ‘McDonalds.’ We also have logos. The Apple logo on an iPhone and the golden arches logo of McDonalds are device marks.
“Beside trademarks we have copyrights. You own copyrights in the photographs you take, and the pictures you draw. Someone else cannot make a copy of your photographs or your drawing without your authorization.
“The third type of intellectual property is patents. Patents can be intention patents, utility model patents, and design patents mainly. They really protect the industrial designs intentions.
“An iPhone, for example, will be loaded with different types of intellectual properties. The Apple logo will be a trademark. The Apple company will own copyrights probably in the shape of the phone and the design of those icons in the app. And Apple will own numerous patents relating to the iPhone, such as the user interface, the touchscreen, and so forth.
“Generally speaking that’s intellectual property.”
PEC: Does every country recognize the three types of intellectual property that you just described?
Ho: “Yes. Generally all countries recognize those three types of intellectual properties.”
PEC: What’s the most common form of online intellectual property theft?
Ho: “In my experience on a day to day basis the most common form of intellectual property theft is trademark infringement and copyright infringements. The reason is that using someone else’s mark and stealing their photos are quite easy to do in an online environment. It would be much more difficult to actually steal someone’s patents because it’s much more complicated.”
PEC: Are intellectual property laws less strict than protection of physical property? In other words, if someone steals an automobile are the penalties more severe than if he steals a online photo?
Ho: “Different laws apply. If you steal a physical property you will be charged under criminal law for theft. But if you steal someone else’s IP right, for example you steal someone else’s photos, then it’s likely a civil action by the rights holders under the copyright laws. So we are essentially talking about two different types of theft here. But infringement of IP is illegal worldwide. The same set of laws apply to both online and offline infringements. But those people that infringe IP rights online are much more elusive and difficult to trace, so it is easier to trace the offline infringes.”
PEC: Are there cases where IP theft is prosecuted criminally?
Ho: “Yes, certainly. Even in China some IP cases are prosecuted criminally. But from a rights holder’s perspective, if they want to ask for a remedy they will have to do so as a civil action themselves.”
PEC: Say I’m a small U.S. based manufacturer. I make a product that I sell online. I’ve gone to great efforts to take high-quality photos or perhaps videos of my product. I’ve done that and then I see that someone in China — it could be any country — has copied my physical product and stolen my photos and videos. Under that scenario, what is my recourse?
Ho: “It very much depends on where you actually find the stolen photo or stolen products. If you find someone is using your photo or products description without your authorization on Alibaba.com, the best way to have it removed or address your problem is simply to report it to us, or to any similar ecommerce platform where you find your stolen goods. For example on Alibaba.com you can report infringing listings with our online reporting system call AliProtect. Anyone can easily register an account on AliProtect.
“Simply report it to Alibaba or the relevant platform. In most cases they will happily remove them for you.”
PEC: What if it’s not Alibaba or other reputable platform? What if it is a site in China that’s independently owned that is stealing those photos?
Ho: “That will be a much more complicated problem because those websites usually do those infringing activities intentionally. In those cases from my experience you usually need to write them a cease and desist letter, and ask them to remove your listing. You also have to organize your IP portfolio. For example you need to collect your copyright ownership evidence and trademark certificate and so forth and properly instruct a Chinese law firm to issue a cease and desist letter against that website on your behalf. Of course in China they also have administrative actions. You can ask the administration for industry and commerce to take action against infringes. You can also ask the registrar the domain of the respective website to take action against that website for IP infringement. So there are various ways to go about it. But it will be more complicated, and it will be more costly.”
PEC: The example we’ve used here involves someone in China. Is intellectual property theft more common in China than other countries?
Ho: “All things are relative. I would imagine the total incidence of intellectual property infringement in China is higher than many other countries, simply because China is a manufacturing center of the world and we cannot expect that the society will appreciate intellectual property rights at the same level as those in the United States because China is a developing country. Intellectual property theft happens all over the world. But the level of certification and stability are different because China is a manufacturing center with a developing economy. We see a large volume of intellectual property theft such as counterfeit of luxury products and consumer goods; they are easy to do and they can be done in large scale. So they’re more visible.
“But there is also quite a lot of intellectual property theft in the United States for example, but it normally occurs at a much higher level with more sophistication. For example instead of just counterfeiting a luxury product in the United States, it may come in the form of trade secrets’ theft and content piracy, which are much less visible to the public, but they are done against a corporation and the level of damage to the right orders will still be extremely high. The more visible intellectual property thefts can be seen in China, but they occur all over the world.”
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PEC: You are a legal counsel for Alibaba.com, the biggest ecommerce marketplace in the world. What is Alibaba’s position on intellectual property theft for goods on that platform?
Ho: “Our position is very clear: We do not tolerate any intellectual property theft; we simply do not allow it. Let me put it in some context as to why this is our position. In 2010 the ecommerce economy amounted to 4 percent of GDP across the G20 countries. That number is expected to grow to about 5.3 percent by 2016. We see 500,000 people getting connected to the Internet for the first time every day. About 2 billion people are connected to the Internet in 2010, and 3 billion will be using the internet by 2016. Our platform can leverage the Internet and reach an additional 1 billion potential customers in the next 3 years theoretically speaking. From a business perspective there’s absolutely a huge economic potential in this ecommerce system. It is in our interest to promote its growth in a fair way. Our chairman quite clearly stated earlier this year that he thinks counterfeiting is a cancer we will have to deal with or else it will destroy our system.”
PEC: Anything else?
Ho: “In my experience many rights holders in the U.S. may assume we are on the opposite side of things. Many of them may assume we allow intellectual property theft on our platform. That assumption is a result of some misconceptions and miscommunication because of cultural or language differences. Because we are a Chinese company, many of our staff are not really English speaking. So communication may be a bit of problem with U.S. merchants or U.S. rights holders. But in most cases all it takes to clear a problem is to talk to us. Once rights holders know about our position and our methods in fighting intellectual property theft, most of them realize we are actually on the same side of things. It makes absolutely no economic sense for us to allow intellectual property theft on our platform.”