A ‘black spot’ for forgers

E-commerce has not only many advantages, but also entails the risk of counterfeit goods being sold. The state and business are making joint efforts to protect the interests of right holders and consumers. Elena Sokolovskaya, Partner and a head of antitrust practice at Pepeliaev Group will tell about the measures taken in terms of sufficiency and effectiveness.

In Russia the problem of counterfeit goods on marketplaces became aggravated after Federal Law No. 46-FZ dated 8 March 2022 legalised parallel import for certain groups of goods.

Russian online platforms started to take measures within the framework of self-regulation of the sector.

In particular, in August 2022 Wildberries, Ozon and Yandex.Market agreed to implement together a unified digital information system for combating counterfeit goods on the platform of the Association of E-Commerce Companies (abbreviated in Russian as AKIT) Russian marketplaces have created a unified information system to combat counterfeiting // RG.Ru. 9 August 2022 URL: https://rg.ru.. In the autumn of the same year Wildberries launched a new service for protecting right holders and consumers from counterfeit products – Digital Arbitration Wildberries will launch a service aimed at protection from counterfeiting // Kommersant. 8 August 2022 URL: https://www.kommersant.ru.. With the help of this service brand owners will be able to protect their rights on the platform by filling in a special form.

The antimonopoly authority could not to fail to pay attention to the fight against fake products.

At the same time the integrated nature of measures presupposed joint actions of both the state and business. In 2023 the Russian Corporate Counsel Association, representatives of marketplaces, right holders and the Russian Federal Antimonopoly Service have drafted Good-Faith Practices for Marketplaces to Liaise with Right Holders and Sellers to Prevent the Sale of Counterfeit Products URL: https://www.rcca.com.ru. (the Practices). Let us consider them.

The document contains 12 practices which consolidate good-faith approaches to preventing the sale of counterfeit products on the platforms of marketplaces’. These practices include both those already used in Russia and which can only be implemented in order to more efficiently combat the sale of counterfeit products and protect intellectual rights.

The use of ‘red flag’ systems is provided for, focusing on which the right holder is more likely to find suspicious products in the offer of an online store. The following can be taken into account by way of such indicators: the price, if it is significantly lower than the average price of the product of this article in the marketplace; the presence of court-confirmed cases of a seller selling non-original or counterfeit products on this or another Internet platform; the sale of goods in a set assembled by other persons unrelated to the right holder; the lack of communication between the seller and buyers or potential buyers when they publish questions about the product, etc.

The presence of ‘red flags’ does not confirm the fact that non-original or counterfeit products are being sold, but can form well-grounded assumptions of the right holder about suspicious goods.
If the indicators or a combination of them have worked in relation to a specific offer, the platform can provide the right holder with the specified information by posting a notification in its personal account or by any other available method.

The introduction of such a system will simplify the tracking of counterfeit goods, which in turn will make it possible to successfully protect the interests of right holders and consumers.

The Practices have a clear procedure for how marketplaces interact with right holders: those whose intellectual rights have been violated can file a complaint about suspicious products. As confirmation of the signs of counterfeit products, the following can be used: the results of a control purchase; an opinion on the results of an examination of the goods; and the results of a comparative analysis of the characteristics of original and suspicious products.

When a complaint is received, the marketplace must consider it, identify information confirming a violation or a threat of a violation, and take necessary and sufficient measures in a timely manner, including hiding the offer of suspicious products. In addition, at its own discretion and if technically possible, the marketplace informs consumers of this using a special label.

The online platform sends an inquiry to the seller in order to confirm that the product is original and to review the necessary documents. Based on the results of the consideration of the complaint, a decision cane be made to hide the offer of suspicious products, if it has been concluded that the product lacks sufficient proof of its originality. If the marketplace concludes otherwise, the offer shall not be hidden and the label shall be removed.

How will it be assessed in practice that there is sufficient proof of a product being original? We believe that the recommendations in this regard should also have been reflected in the Practices.
At the same time, the document provides for a procedure by which the marketplace can block the possibility of goods under certain brands being sold or can block the account of their seller:

This is quite logical and justified. However, even if the seller is blocked, according to the general rule (see, for example the provisions of clauses 9.2.5 and 9.9.7 of the Offer on the Sale of Goods on the Wildberries website), the seller can submit an application to have the blocked personal account or the flypage restored if the violation is eliminated.

The source: Competition and Law journal