Resolving disputes over cooperation in cross-border e-commerce to protect intangible assets

— Typical case in white paper on foreign-related, Hong Kong, Macao and Taiwan-related commercial adjudication 

A tech company and a healthcare company, both registered in the Hong Kong Special Administrative Region, entered into an e-commerce cooperation agreement, whereby the latter entrusted the former with the sales of its branded and co‑branded products through e-commerce channels. In May 2022, the two parties preliminarily negotiated the termination of their cooperation and scheduled a handover on May 7.

On May 6, the tech company deleted multiple sales and promotional links, due to business needs as it had claimed. Upon discovering this, the healthcare company demanded that the tech company cease the deletion, asserting that the deletion constituted a breach of contract and harmed its legitimate rights and interests. It later changed the passwords for some of its online stores that had been run by the tech company.

Subsequently, the parties failed to reach an agreement on the handling of inventory and reconciliation of sales proceeds. The tech company filed a lawsuit demanding that the healthcare company pay outstanding sales revenue and compensate for goods losses, promotion expenses and software usage fees. The healthcare company filed a counterclaim demanding compensation for losses and payment of contractual penalties.

The Beijing Fourth Intermediate People's Court (BFIPC) organized the parties to reconcile the sales figures for each store. After clarifying the facts of the case, the BFIPC guided the parties to narrow their differences, ultimately leading to a mediation agreement.

The tech company agreed to pay the healthcare company the outstanding payment for goods in installments, leading to a complete resolution of all disputes under the cooperation agreement and related agreements with a package settlement.

Disputes arising from collaboration between brand owners and operating agents involve not only traditional contractual rights and obligations, such as sales performance, service quality and ownership of goods, but also new types of disputes related to data rights, such as ownership of sales links, store password ownership and platform rating rules.

During the cooperation, a substantial amount of intangible assets, such as account resources, content materials, fan bases and platform rankings, are accumulated. A smooth transition upon termination of the cooperation can preserve these existing assets to the greatest extent, which is beneficial for all parties to achieve mutually beneficial results.

In this case, the BFIPC guided the parties to focus on a substantive resolution of disputes, narrow their differences and reduce the cost of dispute resolution. It also respected the consensus voluntarily reached by the parties to enhance their willingness to comply with the agreement, achieving a complete resolution of the case.

Resolving e‑commerce operation contract disputes through mediation enables enterprises to disengage quickly from disputes, avoids damage to corporate information and commercial reputation, protects enterprises' legitimate rights and interests and injects legal impetus into the development of the e‑commerce industry.