Trademark infringement liability of C2C platform service providers

The trading model where a third party provides a platform for buyers and sellers to publish merchandise information and purchase goods online is called the C2C (customer to customer) model. With the sharp increase in the number of online purchase transactions under this model, trademark infringement cases on the C2C platform have also seen explosive growth.

In comparison with the traditional trading method, in the virtual trading environment the infringement costs of sellers that sell trademark-infringing goods are smaller, yet the spatial range of infringement is much wider, causing trademark rights holders greater losses. Additionally, given that, on the C2C platform, small, medium and individual sellers constitute a majority, are widely distributed, and their capacity to bear liability is low, the ability of trademark rights holders to protect their rights against such small sellers one by one is extremely limited, and this potentially leads to a situation in which the losses of pursuing protection outweigh the gains. As a result, rights holders have turned to pursuing the online trading platform service providers for liability for infringement in an attempt to achieve their objective of halting the infringement and securing damages.

Obligation of reasonable care

The failure by a platform provider to perform its “obligation of reasonable care” is the necessary condition for it to bear joint and several liability with the direct infringer. In the case of Louis Vuitton and four other major international brands versus the operator and manager of the Beijing Silk Street Market, over infringement of exclusive rights to use registered trademarks, in which the author acted as counsel, a merchant directly sold goods that infringed the exclusive right to use of LV and other trademarks.

Wang Yadong is the executive partner and Lu Lei is a partner at Run Ming Law Office