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IP strategy in one of the world’s fastest-growing companies

James Nurton, London

The senior legal director of tells Managing IP about its anti-counterfeiting efforts, growth in patent applications and tips for brand owners in China

Ellen Lin
Senior legal director

I have worked for since 2012. Our IP department handles the protection of both the company's IP and the rights holders' IP, so we also deal with complaints and issues that IP rights holders bring to our attention.

By the way of background, is the largest e-commerce business in China by revenue and the largest retailer. The business model is business-to-consumer (B2C). Our company, which was founded in 1998 and has its headquarters in Beijing, is now a Fortune Global 500 company. It is listed on NASDAQ and we reported revenue in 2015 of about $28 billion.

IP is critical to the company. Our superior customer experience, built on our innovative technology, drives our growth and success. The company also operates its own delivery and logistics network and this has enabled us to provide same- and next-day delivery to customers in virtually every city in China. Our logistics systems include highly sophisticated, fully automated warehouses and advanced functions such as autonomous delivery vehicles and even drone delivery in some hard to reach rural areas. Our IP protection strategy is focused on those key technologies and the systems that run and support the business. So far this year we have filed more than 1,000 patents.

Lin and her panel at IP Week

We are aware that counterfeiting is a worldwide issue that affects both customers and IP rights holders. The company has strict rules for direct sales sourcing and also for third-party sales. All suppliers and third party vendors are subject to mandatory background checks. Our QA team also conduct on-site visits if necessary. Those rigorous approaches help ensure that the products listed on are authentic.

In terms of proactive monitoring, we also use proprietary big-data analysis and technical measures that our company has developed to identify and block suspected counterfeit products. Where a product offered for sale is identified as likely to infringe a third-party's IP rights, we takes down the product immediately.

Our notice and takedown procedures, where rights holders can claim potential infringements, are available in Chinese and English. Obviously infringing content will be removed as soon as possible, and not more than three to five days. In terms of penalties, a merchant account is permanently closed if it receives a single unchallenged takedown request against a counterfeit listing.

In terms of proactive monitoring, we also use proprietary bigdata analysis and technical measures that our company has developed to identify and block suspected counterfeit products

In addition to establishing these policies and procedures, has collaborated with a range of rights holders to promote the protection of IP rights. For example, we buy high-risk goods and send them to IP holders for verification. IP rights holders also conduct training for JD's QA and sales staff to help them learn how to identify counterfeits.

Taken together, these practices are key to sustaining customers' and IP holders' confidence in JD and to maintaining's differentiated position in the market.

Upon entering the Chinese market, some foreign companies don't know enough about trade mark law in China. The most important thing for them to do is to register their trade marks to ensure protection. Another important early step is to pick a Chinese brand name. If you don't pick one, the customer will do so – and you might not like it! In the worst case, someone else can register the trade mark in bad faith.

The positive news in China is that the climate has changed a lot since the last revision of the Trade Mark Law, which extended certain protections to unregistered trade marks and added enforcement regulations covering unfair competition in the registration process. Now there is increased support in the provisions for the principles of honesty and credit and prohibitions against trade mark squatting. Now China has specialist IP courts and the IP judges are very knowledgeable and professional. One big area where we would still like to see improvement relates to damages for infringement – that is a real issue for all IP rights, but one that I hope will improve in time.

Ellen Lin took part in IP Week @ SG 2016 in August, where Managing IP was a media partner. She was interviewed by telephone in October



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