IP Protection under the Frame of Live Streaming E-commerce

In recent years, live streaming e-commerce has become a prevalent form of shopping in China. Live streaming e-commerce allows people to see the product style and interact with the host in real-time through the network, and thus it is favored by many merchants and consumers. However, with the rapid development and popularity of live streaming e-commerce, IP infringement cases related to live streaming e-commerce are also increasing year by year. The public has raised questions and concerns about the protection of intellectual property rights under this new model.

In the following contents, we will analyze some common problems of intellectual property protection of live streaming e-commerce and provide some suggestions:

1. IP infringement is easier to take place in the environment of live streaming e-commerce compared to conventional retail sales
    
    In the first aspect, live streaming currently does not have a strict access mechanism, and among the vast number of participants, some have relatively weak awareness of intellectual property laws.
    Due to its advantages and policy support, live streaming e-commerce has attracted more e-commerce platforms, sellers, suppliers, and consumers, and with a large number of competitive entities in the industry, the risk of intellectual property infringement has also increased. Moreover, E-commerce platforms break through the limitations of physical stores in terms of sales time, region, quantity, and type of goods for sale to a certain extent. Through the Internet, consumers can enter any online store at anytime from anywhere and freely choose and buy goods. In this sense, e-commerce triggers almost an indefinite growth in the number of buyers and sellers and the number of commodities and merchants. In terms of probability, the large number of participants can indicate increased risk of intellectual property infringement.
    In a second aspect, the immediacy and randomness of live streaming make it almost impossible to detect and stop infringement in time and also make preserving and tracing evidence relatively more challenging.
    Compared with traditional e-commerce (which is based on a static display of product information through an Internet web page), live streaming hosts fully release product information in the introduction process and promote the completion of a large number of transactions in a short time under the stimulation of price comparison, live streaming discount, real-time streaming of sales data and other aspects. The fast pace of live streaming e-commerce - where the entire sale process happens extremely fast - creates a significant barrier to IP rights protection. Since e-commerce does not have a physical warehouse or space that limits the number of goods or buyers, the quantity of the goods for sale during live streaming is so huge that the scrolling of the goods is accelerated, and the product information disappears right after the quick sales are made. The fast-moving appearance and disappearance of the goods make it much more difficult to spot or collect evidence of infringement.
    In addition, due to the publicity and sales behaviors in the process of live streaming marketing, to attract more consumers to shop in live streaming studios, there may be infringement risks of intellectual property rights in the process of publicity and sales. For example, since e-commerce live streaming breaks the geographical restrictions on consumers, users from anywhere may become consumers of a live streaming studio. Thus, the operators' publicity programs, publicity materials, live streaming decorations, background music, etc., which are elaborately arranged to attract more consumers, are subject to copyright infringement risks, and there is a chance that the host could have false publicity and other unfair competition behaviors in the product introduction process.
    In a third aspect, the fast and widespread transmission of live streaming e-commerce makes it more challenging to regulate.
    The hastiness and the large population of buyers make it much more laborious for platform maintenance. E-commerce platforms are faced with managing a vast seller and buyer team, which brings significant challenges to their technical and management means for seller review, problem identification, and dispute resolution. Unless the product information released by a host contains obvious infringing details or the right holder has sent a warning notice of rights in advance, it is usually tricky for e-commerce platform operators to screen infringing information. Moreover, e-commerce platform operators have limited ability to monitor massive hosts' live streaming words and actions in real-time, and the supervision cost is also high.
    In a fourth aspect, the attribution of live streaming accounts is not clear, making rights protection relatively tricky.
    Live streaming e-commerce involves multiple parties such as merchants, hosts, and online platforms which have complicated legal relationships. It is difficult to directly confirm the identity of a specific seller because consumers are faced with various entities. These can create significant confusion about rights protection because it is difficult to distinguish who the actual seller is, making rights protection relatively tricky.

2. Legal responsibilities faced by the involved parties in case that a live streaming channel offers infringing products for sale

    When an infringement occurs, the responsible party should be determined first. In the following, you can see the responsible party that should bear the corresponding infringement legal liability in different live streaming circumstances. Specifically:
        i) When a host sets up a studio by registering an account on a live streaming platform and engages in live streaming marketing activities as an individual (individual host), the responsible party shall be the host themselves;
        ii) When a merchant or supplier sets up a studio by registering an account on a live streaming platform and engages in live streaming marketing activities through a contracted host who has established a labor or service relationship with the merchant or supplier, the responsible party shall be the merchant or supplier;
        iii) When a live streaming platform conducts live streaming marketing activities by setting up a studio on its website (the platform is self-run, and the host establishes a labor or service relationship with the platform), the responsible party is the live streaming platform.
        It should be noted that:
        1) If the above responsible party is the manufacturer of the infringing product, the party shall bear all legal liabilities for infringement.
        2) If the above responsible party is only a seller who does not know that the product sold or to be sold is an infringing product and can prove the legitimate source of the product, it usually only needs to stop selling it and is not liable for compensation. However, suppose the right holder can provide evidence to prove that an infringement notice has been fully and thoroughly given, but the above responsible party continues to sell the suspected infringing product through live streaming, the legal source defense of the responsible party after receiving the infringement notice cannot be established, and the responsible party also needs to bear the liability for compensation.
       3) If the above responsible party knows or should have known that the products sold or to be sold is an infringing product or could not prove the legitimate source of the product, it shall also be liable for compensation.
        4) Under the above circumstances i) and ii), as a network service provider, the live streaming platform further needs to assume different responsibilities under different circumstances. It is necessary to comprehensively consider whether the platform operator has fulfilled the reasonable duty of care, and then determine its responsibility in combination with various factors, such as whether the live streaming platform has established an access mechanism, whether it has formulated and publicized the live streaming marketing management norms or platform conventions, whether it has performed the audit of the live streaming studio operators' qualifications and commodities, whether a negative list has been formulated, whether IP protection rules have been established, whether necessary complaint mechanisms have been established, whether timely and necessary handling measures have been taken afterwards, and whether rights holders have been actively assisted in safeguarding their rights, and so on.
        If the platform knows or should know that others are using its platform to sell infringing products, it shall take necessary measures such as deletion, blocking, and disconnection. If the platform fails to take necessary measures in time, it shall be jointly and severally liable with the infringer for the aggravated damages.
        5) In live streaming marketing, if hosts promote products in their names or images, they need to conduct necessary audits on the legitimate source and quality of the products; otherwise, they may face the risk of taking corresponding responsibilities borne by advertising spokespersons under the Advertising Law.

3. Our Suggestions

    As the industry of live streaming e-commerce in China is evolving rapidly, we recommend business entities take the following actions to protect their IP rights from potential infringement in this sector.
        1) Before an event, business entities may clearly mark all IP-related information on their products or services, strengthen rights supervision, and timely inform live streaming platforms of possible infringements.
        2) When an infringement is discovered, business entities may fix and preserve evidence in time, submit infringement complaints to the live streaming e-commerce platform, and take further actions when necessary.
        3) As the determination of infringement and the preservation and preparation of evidence is highly professional, it is suggested that the right holders consult professional firms, lawyers, and intellectual property attorneys for appropriate solutions with respect to specific situations.