TYGlobe

Judicial Gist

Upon receipt of the notice, the network service provider shall promptly forward the notice to the relevant network user, and take necessary measures on the basis of the preliminary evidence of infringement and the type of service; where the network service provider fails to take necessary measures in a timely manner, it shall be jointly and severally liable with the said network user for the expanded part of the damage.

In the present case, the appellant, a cultural company, holds the rights to develop, design and operate derivative merchandise of a TV series. The appellant discovered that the products sold in the store operated by Li on the platform run by the appellee, an internet company, were marked with the name of the aforesaid TV series without the appellant's authorization. The appellant thereupon filed infringement complaints via the intellectual property rights complaint platform of the aforesaid internet company, explicitly pointing out that Li's products were suspected of constituting unfair competition infringement, and submitted relevant right certificates and judgments of similar cases as evidentiary materials. The appellant filed a total of 7 complaints successively, 3 of which failed the internet company's review and were left unhandled. Afterwards, the aforesaid cultural company filed complaints again against the 2 product links that had failed the previous review, the complaints passed the internet company's review this time, and the relevant products were taken down from the platform subsequently.

A cultural company has filed a lawsuit, alleging that the products sold by Li are counterfeit, and Li's sale of such products constitutes the tort of unfair competition. It further claims that a certain Internet company failed to take timely measures to prevent the expansion of losses arising from the infringement, and shall therefore bear joint and several liability.

The court of first instance holds that Li Mou's sales act constitutes the tort of unfair competition. A certain online company, as a third-party online trading platform, is objectively incapable of examining whether the products of each business operator constitute infringement. Furthermore, after receiving the litigation notice, the aforesaid online company removed Li Mou's products involved in the case and did not aggravate the damage. Therefore, it has fulfilled its obligation of reasonable review and shall not be held liable.

The Court of Second Instance holds that, faced with a vast number of complaints in the internet sector, online service providers are not necessarily required to immediately take measures such as deletion or blocking upon receipt of complaints. The necessary measures taken against the allegedly infringing goods shall be prudent, reasonable and appropriate, so as to avoid impairing the legitimate rights and interests of the complained party. However, effective transmission of complaint information to the complained subject shall be deemed as one of the necessary measures; otherwise, right holders will face difficulties in safeguarding their legitimate rights. Although a certain online company specified the reasons for the failure of the complaint review in the complaint handling progress notice, it failed to timely transmit the complaint information to the complained merchant, which may lead to aggravation of damages. The appellant's claim that the said online company shall bear joint and several liability with Li's online store for the aggravated part of the damages is tenable. The Court of First Instance did not make a ruling on this claim, and the Court of Second Instance hereby corrects such omission.

Summary of Judicial Documents

Court of First Instance / Case Number

People's Court of Ningguo City

(2024) Wan 1881 Min Chu No. 3654

Court of Second Instance / Case No.

Xuancheng Intermediate People's Court

(2025) Wan 18 Min Zhong No. 307

Cause of Action

Unfair Competition Dispute

Judge of the Second Instance

Chen Yueyin (Sole Judge)

Judge Assistant

Liang Xiang

Court Clerk

Wan Tiantian

party

Appellant (Plaintiff in the original trial): Xiamen Caimou Cultural Media Co., Ltd.

Authorized Litigation Agent: Li Chao, Shanghai TYGlobe Law Firm

Appellee (the 2nd Defendant of the First Instance): Zhejiang XX Network Co., Ltd.

Entrusted Litigation Agent: Lu Houchao

Anhui Antaida (Xuancheng) Law Firm

Original Defendant 1: Li Mou

Judgment Results of First Instance

Li Mou shall compensate a certain cultural company for its economic losses.

Dismiss the other claims of a certain cultural company.

Judgment of the Second Instance

The court of first instance erred in failing to hold the appellee jointly and severally liable, and the court of second instance hereby corrects such error.

In view of the fact that Li Mou has paid the compensation involved in the case to the account of the court of first instance, it is of no substantial significance for the court of second instance to amend the judgment to order a certain internet company to bear joint and several liability. Therefore, the judgment rendered by the court of first instance shall be upheld.

Time of Second Instance Judgment

April 29, 2025

Legal Provisions Involved in the Case

Article 6 of the Anti-Unfair Competition Law of the People's Republic of China

Article 1195 of the Civil Code of the People's Republic of China