Intellectual property rights for online platforms
Online platforms are an important venue for selling products, particularly when the buyer and seller are based in different countries. While approved distributors may use online platforms, they are often a venue for parallel importers, those in the second-hand market and, of course, for those who sell counterfeits of infringing products. For this reason, it is important to be aware of the online platforms that are being used to sell products of interest.
An online platform can provide a means of obtaining evidence of IP infringement (or confirming that such evidence exists), including by means of making trap purchases, which may also serve to identify the seller once an invoice is generated or any additional documents are supplied. If infringement can be established, the infringer may then be pursued by conventional legal means in the country where the infringement has occurred.
In addition to any available enforcement mechanisms under conventional legal processes, online platforms usually have their mechanisms for resolving disputes that can often be faster and more efficient. Many of these dispute mechanisms have come about because they provide platforms with protection from liability for IP infringement in the United States in the wake of the US Digital Millennium Copyright Act (DMCA). While the DMCA is a United States law, and the same protections do not apply in other countries, including Australia, these mechanisms can provide a useful, quick and inexpensive means for IP rights holders to address infringing acts. Where an infringer relies on an online platform to sell counterfeit products into a particular country, especially where the infringer seeks to remain anonymous, a series of reports of infringements to the platform may be enough to put a stop to the activity even where the infringer tries changing identities.
By way of example, if an online seller using the Amazon Australia platform offers a product for sale that infringes an Australian patent, it is possible to have the offending listing taken down overnight with a simple online report, citing the patent number, the claims alleged to be infringed and why such claims are infringed by the listed product. However, each platform will have different requirements and may require additional proof, and some countries with pro-parallel importation policies (and corresponding laws) may challenge such reports if they consider that the selling activity is legal in their country, even if it would not be legal elsewhere.
Some online platforms do not investigate whether claims of infringement are correct before taking down a listing based on a report of IP rights infringement. Sellers who wish to keep their identities secret may be less motivated than those whose identities are public to challenge the removal of their listings. Nonetheless, it is important to be in a position to justify any claim of infringement in the event that the seller challenges the removal of the listing.
Online platforms are usually regarded as mere conduits for the conduct on their platform, which, depending on the IP right and the country involved, may be sufficient to shield them from liability. However, if the platform acts as more than a mere intermediary, this may change. In an Australian case (the Redbubble case), Redbubble was held liable for trade mark infringement and would also have been liable for copyright infringement (but for the failure of the applicant to demonstrate its ownership of the copyright at issue) because it exercised control over the creation and sale of the products on its website. In a given case therefore, it may be possible to take action against the online platform.
There are many things to be mindful of when using online platforms to sell your products and it is important to note not all legal protections apply in every country. Seeking professional advice at an early stage insures that you are aware of any potential complications that may arise. Please contact our IP experts at Spruson & Ferguson should you require any assistance.
This article is written by Lucy Hartland, Senior Associate at Spruson & Ferguson.