As a sub-brand of Alibaba Group, TMALL is one of the most popular E-commercial companies in China.  Also, TMALL has been criticized years for its connivance in selling of counterfeiting and infringement products.     

Zaigle is a Korean-invested manufacturer producing and selling hundreds of thousands of barbecuing devices in China.  From end of 2014, Zaigle found that tens of online shops from TMALL and Taobao (another sub-brand of Alibaba) were selling a barbecuing device that isundoubtfully infringing Zaigle’s Chinese Patent No. ZL 200980000002.8

At the beginning, Zaigle decided to have the infringement stopped through cooperation of TMALL because it was not practical to sue tens of on-line shops with most of them were setup by individuals.  However, after more than one-month online complaint to TMALL, Zaigle found no hope to get things done.  Desperately, Zaigle entrusted Intelightip IP LAW FIRM with suing two of the TMALL’s online shops while also accusing TMALL for co-infringement.

During the first instance heard by the Intermediate Court of Jinhua City, the judge heldthat TMALL did not timely take “necessary measures” to stop the infringement which caused damages boosted. Therefore, TMALL was ruled to not only stop the infringement but also take a joint liability for paying damages.  Unsatisfied with this decision, TMALL appealed at the second instance but the Zhejiang Higher Court finally maintained the first instance decision.

According to a speech by Alibaba with a topic of “Liability of E-commercial platforms in patent infringement”, from April 1 to September 1 of 2015, Alibaba ended totally 222 IP cases.  Among these cases, 190 ended due to withdraw by plaintiffs, 2 were settled, 5 ended withjurisdiction dispute, 24 ended with plaintiffs winning the cases but Alibaba taking no liability at all, and only 1 lost to Zaigle. This case was also the only one IP case for which Alibaba took the liability in the whole year of 2015.

Recently, this case was also ranked by the Supreme Court of China as one of the most influenced 10 IP cases in the year of 2015.  As commented by the Supreme Court, this case further exemplifies what are the “necessary measures” indicated in the Tort Law.  

Article 36 of the Tort Law says “Where a network user commits a tort through the network services, the victim of the tort shall be entitled to notify the network service provider to take such necessary measures as deletion, block or disconnection. If, after being notified, the network service provider fails to take necessary measures in a timely manner, it shall be jointly and severally liable for any additional harm with the network user”.  Through this case, one would be more clearly that the “necessary measures” should include not only deletion, block or disconnection of the infringing link but also timely notification of the complaint submitted by the right owner to the accused.  If a network service provider, after being notified, does not forward the complaint to the accused timely, it shall bear a joint liability for boosted damages.   After ending of this case, Alibaba has changed its rules for handling of complaint regarding on-line infringement.  To date, however, a complaint is still not served to the accused online shop immediately after it is received by Alibaba.  In stead, Alibaba has set up several formality requirements to a complaint and one cannot go ahead unless all the formality requirements are fulfilled.  A further exemplified court case is to be expected whether such a non-immediate serve of complaint would cause a joint liability to boosted damages.