Courts in China generally demonstrate skepticism of secondary liability claims
for trademark infringement against online intermediaries. As early as 2006, the
Shanghai First Intermediate People’s Court ruled that online intermediaries are not
able to control counterfeiting online by third parties.14 The court noted that the
defendants, as online marketplace operators, had established an intellectual
property rights reporting system in order to stop online intellectual property
violations, and therefore held it had reasonably exercised their duty of care.15
Moreover, the court noted that there are large numbers of Internet users and online
merchandisers, and consequently it would be unrealistic to require online
intermediaries like eBay to investigate every piece of merchandise sold on their
Web sites to ensure it is legitimate.16 Furthermore, the court stated that even if the
defendant has made an ex ante investigation, it would still not be able to guarantee
the legitimacy of the commodities actually delivered offline—i.e., third parties
could post pictures of legitimate products online but then deliver infringing
products instead.17
The Guangzhou Intermediate People’s court decided a similar case in 2006 that
was filed against Taobao. The court held that, because the online network extends
globally, ISPs might not be capable of ensuring the legality of goods sold through
its networks, and that it was therefore beyond the capacity of ISPs to be held
responsible for possible infringement of all of the goods sold by online vendors.18
Taobao—an online shopping site operated by Alibaba that is similar to Amazon or