The Intellectual Property Office of the Philippines (IPOPHL) and the country’s top e-commerce players have recently engaged in a robust and progressive dialogue aimed at ensuring that Intellectual Property (IP) laws are properly enforced in the digital space. 

At the KaIPhan on Aug. 20, Tuesday, the Office sat down with Lazada, Shoppee, Zalora, and Facebook to discuss, among other matters, their respective mechanisms in resolving complaints from customers who claim falling victim to counterfeit selling activities channelled through their platforms.

Most online market players noted that they have 24/7 customer support service, flexible return policies, a takedown protocol enforced against sellers reportedly selling counterfeit goods, and IP teams dedicated to determining the validity and reasonableness of complaints. 

The information sheds light on what IPOPHL can do to more promptly respond to concerns lodged to the Office.

"We find initially that four of the main marketplace players are in good shape in addressing consumer complaints," said IPOPHL Deputy Director-General Teodoro C. Pascua who spearheaded the focus group discussion (FGD).

The International Trademark Association, through its member-representatives who participated in the FGD, also expressed satisfaction over how most e-commerce players are taking swift action against IP infringement complaints from brand owners. This is based on their actual experience with the online platforms. 

Zalora, during the discussion, emerged as a model example, having never encountered IP-related complaints. The company attributed its zero-IP-case record to its adoption of a rigorous screening process where applying merchant-partners are required to show sufficient evidence of ownership over the marks they claim.

The stringent application process is necessary to create an environment completely unconducive to IP rights violators as Zalora equips its platform only with its in-house products and fashion, cosmetics, and skincare brands known locally and abroad. 

This makes Zalora's business model widely different from the three other online market platforms which mostly cater to general public sellers without registered marks or those who simply resell new or second-hand products. Nevertheless, Lazada and Shoppee noted that they require sellers to undergo an incubation period, usually spanning three months. Here, sellers are familiarised with the laws they are bound to comply with, including IP, among other laws and standard practices that ensure quality customer experience. 

For its part, Facebook, which allows all its social media users to conduct trade in its Marketplace platform, admitted that it is in the early stage compared with the others, thus, is still developing a procedure to filter counterfeit-goods sellers before they can even be granted access to the commerce area of its platform.

Nevertheless, the tech giant noted that, like the other e-commerce players, it immediately takes down accounts of sellers reportedly violating IP laws and regulations.

Although efforts to address complaints are crucial in suppressing the distribution of counterfeit goods online, DDG Pascua highlighted the need for an improved system where sellers of counterfeit goods, at the onset, are barred from the online marketplace.

"Where our efforts should focus on is finding ways to avoid counterfeit selling from occurring instead of rectifying them. The former would be a better priority so as not to inflict further damage to targeted users of the fake products," DDG Pascua added.

The Philippines' e-commerce industry

Google-Temasek had estimated that the Philippines' internet economy is pegged at $1.5 billion in 2018, and is poised to surge to $10 billion in 2025. 

Under the Philippine E-commerce Roadmap 2016-2020, government’s “primary objective” for online business activities is to account for 25% of the country’s gross domestic product by 2020, a hike from the 10% the sector reportedly contributed in 2015. 

During the KaIPhan, the online market players called on the government to help accelerate the growth of the local e-commerce industry, urging for the nationwide implementation of the E-commerce Roadmap which is currently undergoing a series of stakeholder consultations for the updating of the objectives and strategies.

The industry call comes with the acknowledgement that certain controls will necessarily be deployed to ensure IP and Consumer Rights are safeguarded.

The ultimate objective of the FGD was for IPOPHL to put in place a set of policies that strengthen protection of IP rights in the online world. However, further talks are needed to come up with rules that strike a balance between bolstering the growth of e-commerce and ensuring that players are fully compliant with IP and IP-related laws.

All e-commerce players were in agreement with DDG Pascua in the need to formulate preventive strategies, and have committed to continue collaborating with the government toward exploring and putting in place best practices in preventing counterfeit selling.

The IPOPHL is also proposing that Republic Act 8293 or the IP code be amended to treat trademarks akin to copyrights in that those individuals knowingly conducting activities that indirectly contribute to the fulfilment of the infringing act will be sanctionable of criminal and civil actions.