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Contract Dispute Case - Shenzhen AA Company v. Zhejiang BB Network Company - No. Six of the Ten Typical Foreign Related Civil and Commercial Cases in Hangzhou

July 17, 2023

Key point:

If the right holder requests to impose penalties on platform operators in accordance with foreign court injunctions, cross-border e-commerce platforms shall consider the request as a fact that the right holder has filed a complaint and have the right to make reasonable and necessary penalties based on legal and effective platform rules.

Basic Case Fact:

In February 2017, the obligee sent an e-mail to Zhejiang BB Network Company, requesting that the transfer and withdrawal of funds on the website of Shenzhen AA Company operating on the platform be restricted in accordance with the Order issued by the List of courts of the United States, and that services related to infringing products be stopped to the company. Later, Zhejiang BB Network Company sent an email notification to Shenzhen AA Company to close the account, and took disciplinary measures such as blocking stores, freezing accounts and funds, and prohibiting product publishing. Shenzhen AA Company believes that the punishment measures taken by Zhejiang BB Network Company violate the service contract. Therefore, the lawsuit requests confirmation that Zhejiang BB Network Company's actions of deleting all website links and freezing accounts are invalid, demands immediate recovery, and compensates for the loss of 10000 yuan.

Case Result:

The first instance judgment of the Binjiang Court: 1. Zhejiang BB Network Company shall restore the link of Shenzhen AA Company to a certain website within ten days from the effective date of the judgment; 2、 Reject other litigation requests from Shenzhen AA Company. The second instance of Hangzhou Intermediate People's Court held that it should be regarded as a complaint that the obligee submitted an injunction of the List of courts of the United States to Zhejiang BB Network Company to impose penalties on the operators on the platform. Zhejiang BB Network Company deleted all links to the website of Shenzhen AA Company according to the request, which is essentially a unilateral termination of the contract and does not comply with the terms and conditions of the termination contract between it and Shenzhen AA Company in the Service Contract. In the event of intellectual property complaints involving the stores operated by Shenzhen AA Company, Zhejiang BB Network Company has the right to delete links to suspected infringing products published by Shenzhen AA Company in accordance with platform rules, but not all store links should be deleted. Therefore, judgment: 1. Change the first item of the first instance judgment to "Zhejiang BB Network Company shall restore all links in the store opened by Shenzhen AA Company on a certain website, except for products related to infringement complaints, within ten days from the effective date of the judgment". 2、 Maintain the second paragraph of the first instance judgment and the burden of Court costs.

Typical significance:

This case is a dispute arising from the e-commerce platform's punishment of operators suspected of selling intellectual property infringement products. The focus is on the nature definition and legitimacy evaluation of the punishment measures taken by the e-commerce platform after receiving an injunction from a foreign court. In terms of how to view foreign court injunctions, it is necessary to maintain national judicial sovereignty, follow the legal procedures for recognizing and enforcing foreign court judgments (rulings), and also consider that cross-border e-commerce platforms may face severe penalties for disregarding foreign court injunctions and going abroad, which seriously affects the reality of cross-border e-commerce business development. This case recognizes the fact that the e-commerce platform has received a foreign court injunction submitted by the right holder as the acceptance of third-party complaints, and determines that the e-commerce platform has the right to take corresponding measures in accordance with the contract and platform rules. The legal dispute over whether the e-commerce platform is appropriate to enforce the foreign court injunction is transformed into an evaluation of whether the measures taken after receiving the foreign court injunction are legitimate, while respecting the basic facts and contract agreements, It does not conflict with the legal provisions of our country, reflecting the judicial wisdom of the court. For e-commerce platforms that are both athletes and referees, it is necessary to support their reasonable and necessary management of business activities within the platform based on platform rules, while also strengthening the legality review of service agreements and platform rules, and strictly regulating the autonomy rights within reasonable and necessary limits. Especially in the field of intellectual property protection, it is necessary to strengthen the judicial protection of innovation and creation activities, warn operators in the platform to respect intellectual property rights, not to illegally sell infringing products, establish a judicial guidance to encourage market self purification, and at the same time, it is necessary to promote e-commerce platforms to constantly improve intellectual property rules and promote the sustainable, healthy and stable development of e-commerce.