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26 April 2019Trademarks

USTR lists Pinduoduo on Notorious Markets List

The US has added one of China’s biggest e-commerce platforms to its  Notorious Markets List, which lists online markets which the US says are in violation of IP rights.

Pinduoduo.com has enjoyed rapid growth since it was founded in 2015, raising $1.6 billion through a public share offering in the US last July.

Yet the e-commerce platform is now the subject of US criticism over the sale of counterfeit goods on its site. Yesterday, April 25, the US Trade Representative (USTR) published its 2018 Notorious Markets List, which featured Pinduoduo for the first time.

According to the USTR, “a particularly common and pernicious form of counterfeit products on pinduoduo.com is so-called ‘Shanzhai’ products, also known as ‘parasite brands.’”

These ‘parasite brands’, the USTR said, “are products whose brand name and trademark imitate a legitimate brand”.

Although the report noted efforts by the company to tackle the listing of counterfeits on its site, the USTR said that these measures “fell short of fully addressing the problem” and urged Pinduoduo to do more to tackle trademark infringement.

The USTR  Special 301 report, which identifies markets that fail to “adequately or effectively” ensure protection of IP rights, was also published yesterday.

In the report, the USTR placed Pinduoduo’s listing in the context of concerns over IP protection in China—a major source of tension between the American and Chinese governments.

“As China has become the largest e-commerce market in the world, widespread online piracy and counterfeiting in e-commerce markets represent critical concerns for US right holders”, the report said.

China recently implemented a new e-commerce legislation aimed at strengthening online trademark protection.

Last July, lawyers told WIPR that the law marked a  positive step forward for rights owners in China.

The law makes e-commerce platforms such as Pinduoduo jointly responsible for counterfeits sold by third parties on their platforms.

The 301 report also sharply criticised the Canadian government’s plans to reform how the country regulates prices for patented drugs.

“If implemented, the changes would significantly undermine the marketplace for innovative pharmaceutical products”, the USTR said.

The report also noted that the USTR had obtained assurances from South Korea that it would bring its own regulation of drug prices in line with commitments made as part of the US-Korea Free Trade Agreement.

WIPR has contacted Pinduoduo for comment.

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