How can cross-border sellers effectively reduce the risk of infringement and avoid account and fund freezes?

Tips for cross-border sellers to reduce infringement risk and avoid account/fund freezes?

Frozen Funds

Attention

Being sued for intellectual property infringement can result in account funds being frozen.

Background of frequent cross-border e-commerce intellectual property disputes

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With the rapid growth of China’s cross-border e-commerce transaction scale, disputes in the cross-border e-commerce field, especially intellectual property disputes, are increasing. Intellectual property has become one of the important competitive means for foreign companies to restrict practitioners in China’s cross-border e-commerce industry. According to incomplete statistics, losses caused by intellectual property issues exceed 1% of GMV, or more than 140 billion.

The typical feature of cross-border e-commerce is “selling what is popular and hot”, that is, the so-called “network explosion models”, which often conceal great risks of intellectual property infringement. In fact, most of these “popular models” or “hot-selling products” are protected by intellectual property rights, including trademark rights, packaging decoration, copyright, appearance design, and invention patents. The most common complaints in cross-border e-commerce are trademark, patent, and copyright complaints. Light cases require the products to be taken down, while heavy cases result in TRO, account freezing and fund freezing. Many cross-border sellers often realize the problem of infringement and take a series of economic remedial measures only after receiving infringement email notifications. Although this behavior can to some extent recover losses, it is passive and of low efficiency. So, how can cross-border sellers effectively reduce infringement risks?

First of all, for cross-border e-commerce, to know how to solve the problem of infringement, it is necessary to think about which stages in the entire new product development and even sales process may have infringement possibilities. Before being complained by the rights holder, the maximum degree of avoiding infringement problems is to be achieved. After receiving infringement complaints or TROs, deal with them in a timely manner and minimize infringement losses. The following are the nodes where infringement may occur before and after the product is put on the shelf and how to reduce infringement risks:

1. Product Selection Stage: When selecting products, sellers should confirm with suppliers whether they have their own intellectual property rights, including whether they have intended or registered trademarks, patents, and copyrights, to ensure normal and regular procurement channels. Sellers can also conduct intellectual property infringement investigations on products they want to list before selecting them, checking to confirm whether the target product is a well-known IP and whether it has been subject to corresponding intellectual property protection by other rights holders. Based on this, infringement avoidance can be carried out:

1) There is a risk of trademark infringement: avoid using the trademark on the product itself or packaging, and do not use the trademark for promotion when editing the copy;

2) There is a risk of patent infringement: confirm whether the patent is valid, and sell in countries with different patent protection based on the patent’s regional nature. For example, if the product has been registered with a US patent by another rights holder, selling in Europe may be a better option, and try to avoid sales within the scope of the patent’s validity;

3) There is a risk of copyright infringement: copyright issues are more complex. Generally speaking, some well-known IPs, such as Disney and Marvel, will register their copyrights for protection. Selling these products is best done with the authorization of the rights holder.

In addition, for products that are independently developed, it is recommended to do intellectual property rights deployment in advance and protect the intellectual property rights of the research and development products. Currently, the most common and convenient way is to protect the appearance and trademark of the product with a patent, which has a fast authorization time and low cost. Many cross-border e-commerce self-developed manufacturers are not aware of the importance of protecting intellectual property rights in advance. When their products are maliciously registered by others and then complained against their own products, it often takes time and money to defend their rights, which is very unfair.

2. Editing stage:

When editing the title and five-point description during the listing process, sales should try to avoid using trademarks that have already been registered by other rights holders (you can search for them on websites such as WIPO and USPTO). It is also recommended to avoid directly copying other sellers’ copywriting and to modify it instead. When using product display images, avoid using stolen images. If possible, take your own photos and have a graphic designer edit them. Beautifully crafted images can greatly improve product exposure.

3. Listing stage:

After the product is listed, if there is an intellectual property complaint, promptly handle it according to the requirements in the email from Amazon or other cross-border e-commerce platforms. Check if there are links to the same product being sold by other sellers, to avoid complaints against those links. It is worth noting that the most important thing to do when receiving an infringement complaint is to determine whether it infringes on the complainant’s rights. If the complained product does not infringe on the intellectual property rights of others, you should promptly file an appeal to avoid affecting the product’s sales. If there is an infringement, you need to take down the link or make changes. After your account is frozen, you also need to contact the complainant for further handling. Depending on the amount of compensation, sellers can choose to settle or defend themselves in court, but it is best to actively defend themselves if the compensation amount is too high.

In other words, sellers can conduct intellectual property risk assessments before listing their products and can even consult professional intellectual property organizations to avoid infringement risks. If your account is frozen due to infringement after listing, you should promptly handle it to avoid being rejected due to exceeding the deadline for processing. For the situation where many sellers receive too many emails every day and cannot determine which one is the frozen email, it is recommended to use key words to extract the relevant emails, and trigger a reminder mechanism for emails with those keywords, to ensure that you can receive the notification as soon as possible.

Overview:

Intellectual property issues cannot be ignored, cross-border sellers and related e-commerce companies should gradually raise awareness of infringement, improve the infringement system, and form a complete and effective prevention and handling mechanism. If necessary, professional intellectual property teams can be consulted to analyze products in advance during the product development stage and make corresponding intellectual property layouts; after infringement is removed, please ask a professional intellectual property team to handle it, which can often yield twice the result with half the effort.

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