Rising Above the Fake to Keep It Real

August 29, 2018 | BY

Jacelyn Johnson

Justina Zhang, Senior Partner of Beijing's TransAsia Lawyers discusses the risks and liabilities faced by e-commerce platform providers and safeguard measures that can be employed to protect against potential infringement disputes from third-party sale of counterfeit goods on their platforms.

The Case of Pinduoduo

Pinduoduo made a high-profile debut in its July 26, 2018, NASDAQ initial public offering (IPO) at a share price of US$19, raising US$1.63 billion at a market cap of US$24 billion, making this the second-biggest Chinese IPO in the U.S. Although Pinduoduo had hoped to outperform Alibaba, Taobao and JD.com in its IPO, the company's involvement in a trademark infringement lawsuit in the days preceding the IPO (along with an open investigation into the company for allegedly selling counterfeit goods) led to share prices falling below the initial offering price.

The facts and allegations that significantly impacted the company brings about the question of whether, and to what extent e-commerce platforms may be held liable for the sale of counterfeit goods by third party vendors utilizing its platform.

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