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January 22, 2022

The Fight against Counterfeits Online: Perspectives from an E-commerce Platform

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In this guest piece, Andy Chua, senior vice president of the Lazada IP Rights (IPR) Protection Team, reveals how Southeast Asia’s leading e-commerce platform protects IP rights online while meeting rights holders’ needs for efficiency and responsiveness. This article, which was first published in World Trademark Review, is the first in a two-part series about trademark enforcement against online counterfeits.

 

It is no secret that online marketplaces have experienced rapid growth due to the digitalisation of retail and related fields. This rapid development has unfortunately also created an additional avenue for bad actors to distribute counterfeit goods to largely unaware consumers—thereby causing losses and reputational damage to brands associated with these counterfeit products. As Southeast Asia’s leading e-commerce platform, Lazada has long prioritised protecting the IP rights of brands and sellers on our platforms and has invested in safeguards that ensure consumers can shop and transact with confidence on Lazada.

In March 2019, Lazada established the IPR Protection Team, which is charged with the mission of developing a comprehensive IP rights protection programme at Lazada. To our knowledge, Lazada is the only e-commerce company in Southeast Asia with a team dedicated to addressing rights holders’ IP concerns. Beyond the initial setting up of the dedicated IPR Protection Team, Lazada continues to invest significantly in human resources and technology infrastructure to meet rights holders’ needs for efficiency and responsiveness. Presently, more than 30 people are employed full time and assigned to this effort.

The IP rights protection programme at Lazada comprises four core components:

  • a strict IP rights policy;
  • merchant education;
  • technology-driven governance; and
  • stakeholder collaboration.

Strict IP rights policy

On each of the six Lazada country platforms, the IP rights policy is publicly available in the respective local language and clearly sets out the types of listings that would violate Lazada’s IP policy. Generally, the policy prohibits the listing of IP-infringing products or services or using trademark or copyright-infringing content within a listing.

Merchant education

Lazada strongly supports merchants to grow their businesses on the platform in a fair and sustainable way that safeguards consumer interests and the rights of other sellers. This is why Lazada invests in merchant education to maintain rigorous platform governance and ensure that all merchants are schooled in lawful practices and made well aware of the platform’s terms and conditions. This education is an essential part of the merchant onboarding process.

All new merchants undergo a series of educational modules through the web-based Lazada University. Through these modules, merchants learn about Lazada’s platform policies, including those relating to IP rights. Merchants are informed of the consequences of noncompliance, which include escalating penalties that could lead to account suspension and/or termination.

Technology-driven governance – the IPP Platform

As of June 2019, Lazada sites have been integrated within a web-based portal, known as the IPP Platform. This allows rights holders to register enforcement accounts, submit takedown requests and monitor the status of the takedown requests led across all six markets in which Lazada operates. The IPP Platform also serves as a repository for IP rights documents. Rights holders only need to upload the necessary documents once, when they submit the first takedown request. Thereafter, their information and IP rights documents are logged in the system and ready for use in relation to future (relevant) takedown requests.

The IPP Platform is a technological tool developed by the Alibaba Group and is highly beneficial in driving efficiencies around the processing of takedown requests by rights holders. While the IPP Platform also supports the submission of takedown requests for other e-commerce platforms within the Alibaba Group (ie, 1688.com, Alibaba.com, AliExpress, Taobao, Tmall and Tmall Global), the review and processing of takedown requests directed at listings on Lazada platforms is carried out independently by the Lazada IPR Protection Team and in accordance with Lazada’s own set of review and processing guidelines.

Through the IPP Platform, Lazada is able to process takedown requests expeditiously. From July 2020 to June 2021, 98% of takedown requests were processed within three business days. The number of takedown requests processed increased by 22%, while the average processing time per takedown request decreased by 31% year on year.

Stakeholder collaboration

Lazada understands that effective IP protection requires targeting the physical sources of counterfeit goods, not just the online platforms where they are sold. This is why Lazada is a strong supporter and collaborator when it comes to working with rights holders and local law enforcement agencies in online investigations and enforcement actions all the way up the supply chain—sending a clear message to manufacturers and distributors of counterfeit products that Lazada platforms are off limits.

From July 2020 to June 2021, Lazada partnered with multiple rights holders, trade associations and local law enforcement agencies on several online enforcement actions, which led to almost 100,000 counterfeit goods being seized.

Notably, an enforcement raid in Thailand in May 2021—which yielded more than 82,000 counterfeit Panasonic batteries – was the rights holder’s largest seizure in Southeast Asia to date. The batteries were intended for sale on various e-commerce platforms.

Lazada also actively participated in Operation Pangea XIV—a global enforcement operation coordinated by INTERPOL from 18 to 25 May 2021, targeting the sale of counterfeit and illicit medicines and medical products. The operation involved police, customs and health regulatory authorities from 92 countries. Through Lazada’s collaboration with INTERPOL and the relevant local authorities, enforcement actions in the Philippines led to the seizure of various counterfeit health supplements.

As well as collaborating with law enforcement and rights holders, at Lazada we also organise our own events to engage stakeholders in discussions about IP protection. Rights holders can provide feedback directly to Lazada, share best practices and learn about how Lazada protects their IP rights. As an example, Lazada held a hybrid IP protection workshop on 3 March 2021, where guest speakers included representatives from Under Armour, Eli Lily and the Pharmaceutical Security Institute. The event was attended by more than 70 people and received positive reviews from many of the attendees.

Building a platform for everyone

A robust platform IP rights protection programme benefits everyone, including SMEs. During Lazada’s celebration of World IP Day this year, one of Lazada’s SME merchants, Adrian Goh, manager of the White Magic store on Lazada, spoke about how Lazada’s efforts in creating a safe and secure environment help businesses to thrive.

“After we reported the counterfeit products and got them progressively removed, we actually saw a significant increase in our sales, somewhere close to 30%,” Goh said, “because when the counterfeits are removed, the buyers will go back to buying the original brands”.

As illustrated by Goh, having clear and stringent IP policies in place, which are clearly communicated to users, combined with an efficient reporting and takedown system, are the key building blocks of a robust IP rights protection programme that will benefit businesses. In addition, an overall readiness to review and develop new processes or solutions through close collaboration with rights holders, policymakers, law enforcement agencies, industry associations and even other platforms will be critical in addressing and overcoming complex and pervasive issues, making the online world a safer place to transact for all.

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